for citizenship. and they try every day to do the right thing and treat people fairly and equally, and ensure that people wait in line and wait their time. they're not supportive of this legislation. they represent 12,000 uscis employees. adjudication officers and staff. and this is is the statement they issued. quote, "the amended 1,200 corker-hoeven immigration bill, not something previously but the last bill that we've moved forward today, if passed, will exacerbate uscis concerns about threats to national security and public safety" -- close quote. these officers try every day to review these applications for visas and entry permits and they try to identify terrorists and not let them come in.

and they turn down people who don't qualify, and they said this bill will exacerbate threats to national security and public safety. they go on to say -- quote -- "it will further expose uscis agency as inept with an already proposed massive increase in case flow that the agency is ill prepared to handle" -- close quote. in other words, they're not able to handle the flow they've got now and this is going to promote a disastrous flow that will make them look inept, they're afraid, correctly, people will come back and say you let terrorists in the country, you let criminals this the country and they had no way, no way possible to properly process these matters. they go on to make a strong statement. these are people who serve our country, who are not -- not allowed to participate in drafting the legislation.

quote -- "the proposal goes out of its way to provide legalization for criminal offenders while making it more difficult for the adjudications officers to identify threats to the nation's security in our ongoing war against terrorism. it was deliberately designed to undermine the integrity of our lawful immigration system" -- close quote. now, i don't think our people deliberately wanted to have the system fail, but the people who have been writing this if they had wanted to make it tougher and tighter would have written it a lot differently than it is. and it leaves these officers exposed and unable to fulfill their requirements to identify and block people who should not be admitted to the united states. and that was a very strong statement. and it represents deep feelings by those officers. they go on to say -- quote --

"this bill should be opposed and the reforms should be offered based on consultation with ucsis adjudicators who actuallily have to -- actually have to implement it. hopefully lawmakers will read the bill before their votes. i say put a cork in it" -- close quote. that's what they say to us. that was monday. and here's another one from the i.c.e. officers. these officers headed by chris crane, their association, union president, chris crane is a former marine, so articulate, so concerned about this legislation. he just has raised it time and again. the i.c.e. officers have filed a lawsuit against secretary napolitano because they say

she's blocked their ability to do their duty and placed them in a position where the supervisory directions to not enforce the law deny them the right to fulfill their oath to enforce the law and they filed a lawsuit in federal court attacking this. i've never heard of this. this whole association of thousands of officers filed a lawsuit against secretary napolitano and their supervisor. they voted no confidence two years ago in john morton, their supervisor, who just retired a few days ago. voted no confidence in him. and an independent survey of government morale factors found that i.c.e. had virtually the lowest morale rating of 179 government agencies. i asked secretary napolitano two years ago, would you meet with these officers? she refused to say so. i asked her again earlier this

year, she has not met with them. they -- nobody wants to listen to the people who are required to enforce the law. and who are the i.c.e. officers? the i.c.e. officers are the people who deal with the interior enforcement and deportations. they identify people who are here illegally and they deport them and go through the mechanism. they have relationships with prisons where they go by the prison and pick up somebody who is illegally in the country who has committed a crime and they are the ones who get them deported. they arrest people, supposedly, they used to when they had jobs, they interfaced with local place. they have been undermined in every way by this administration and kept from doing their job. that's just a fact. that's why the morale is down, that's why they've sued the government, that's why they oppose this bill. and they would never listen

to -- were never listened to. it cannot be the policy of the united states of america that if you get past the border of the united states, that you're never going to be deported. it cannot be the policy that the only thing that counts is having border patrol but if you can get through, you're home free. there's not that many, i think 12,000 of these officers. not nearly enough to do the job already. they're getting no strength at all and support at all in this legislation. and i would note further that under the congressional budget office analysis of this bill, which comports with what i've been saying for months, we're going to have a big increase in the amount of visa overstays. so they're not going to be caught at the border. they're going to come in on a visa and never return. so if you don't have an i.c.e. officer engaged in the effort,

we'll never be able to deport them. you say, well, we're going to give legal status to everybody that's here. all right, let's say we do give legal status to everybody that's here. what about the future? the people that are given legal status will be given a social security card, they'll be given a legal document that allows them to be in the country. i.c.e. is not going to deport them. but what about those who come in the future? we're going to have no mechanism that they be deported? that is one of the biggest flaws in this legislation. i was a federal prosecutor. i know law enforcement. i did it for 15 years. and i'm telling you, if you don't help and have them engaged and utilize their ability and you treat them like second-class officers or citizens, you're not going to get the kind of legality that the legislation promises. nowhere close. it's flawed.

it should not pass. and these officers tell us that correctly. so the i.c.e. officers are right and they -- write and they say to us, june 24, "i urge you to vote no as this bill fails to address the problems which have led to the nation's broken immigration system and, in fact, will only serve to worsen current immigration problems." worsen current immigration problems. that's their word. they go on to say "instead of empowering i.c.e. agents to enforce the law, this legislation empowers political appointees to further violate the law and unilaterally stop law enforcement." this at a time like no other in our nation's history in which political appointees throughout the federal government have proven to congress their propensity for the lawless abuse of authority.

there is no doubt that if passed, public safety will be endangered and massive amounts of future illegal immigration, especially visa overstays, is ensured." they go on to say "abuses by political appointees who currently pick and choose which laws enacted by congress will or will not be enforced will escalate with their increased discretion and authority provided by this bill." i've already -- a vote against this bill, they say, is not a vote against immigration reform, which we all seek, it's a vote against bad legislation and the special interests that wrote it. it's a vote to start this process anew and create reforms that truly fix the nation's broken immigration system, close quote. how much clearer can it be? and they're correct about this.

chris crane is an american patriot. and his team are courageous and they've had to stand in there against an administration who used -- who issued directives that basically require them not to follow plain law. and what does this bill do? he indicated it right there. he said it gives even more discretion to the secretary so she can issue even more directives undermining the law. in fact, basically what the bill does, it is -- it gives more legal authority to the secretary to do what she's ben doing -- been doing now which is fundamentally in many ways contrary to law and the federal judge that's hearing this lawsuit that the i.c.e. officers have filed explicitly stated at one of the hearings the secretary is not above the law. and that is certainly so. but she's been acting above it,

directing them not to comply about the law. so we're not saying that we want the ayes officers -- i.c.e. officers to go out and round up everybody. remember, if this bill passes, everybody will be given legal status, the ones that are supposed to be given legal status and others will need to be identified and if not legally here, they would need to be deported and in the future people who come in violation of the law will need to be deported also. so, mr. president, the gang of eight also -- proposal adds four times more guest workers to our economy than the 2007 plan offered. four times more guest workers than was offered by the 2007 bill that failed here. that comprehensive plan. and this at a time when 21 million americans can't find full-time employment. imagine that. we have much higher unemployment

rate today than we had in 2007 before the bubble burst and we had the recession. we had virtually full employment in those days. now we have high unemployment. a deep problem with employment in america today. and i don't think it's going to rapidly get better. last quarter of last year growth of g.d.p. was only .4%. the first quarter of this year has been revised down dramatically today to 1.8%. that means over two years we had have about -- over half a year, our growth is only 1.1%. that will not create jobs. it's not creating jobs. not enough to pull down unemployment in any way. and this bill is going to bring in huge amounts of new workers to take the few jobs being created. so the bill also dramatically

boosts permanent legal immigration. so the permanent legal flow of immigration will increase substantially. overall, it is a conservatively estimated that the bill would legalize more than 30 million, mostly lower 1keu8d legal immigrants over the next decade. three times the current rate. that's something i said originally. i asked senator schumer, the gang of eight leader, at the committee how many people will be legalized under your bill? well, we won't say. i said again, how many. you offered a bill. you want us to vote for it. can't you tell us how many people would be admitted, and he refused to say. i said then 30 million. over ten years. and the current legal flow would be ten million over ten years. c.b.o. came out with thaoeur report last -- came out with their report last week. 30 million over ten years.

who was right about that? this is a big increase. yes, it includes some of the people, it includes the people that are here illegally. but the annual flow is at least 50% higher than the current one million, according to "the los angeles times". and i think that number comports with what we're able to calculate. you're talking about a 50% increase in the annual flow of immigrants into the country with more coming in under chain migration. and all of those will be able to work. all of those will be competing for jobs in the workplace at a time we're not producing many jobs. the congressional budget office, what does it say? i said for weeks that this flow of labor had no other reasonable impact than to pull down wages of american workers.

what does c.b.o. say? c.b.o. said the same thing. the congressional budget office last week in their study put this chart -- i didn't make this chart. this is one of the few charts c.b.o. put in their report, and it deals with the question of wages. "the average wage would be lower than under the current law under the first dozen years." and this shows in 2025 coming back to catch up. but still if the bill hadn't passed, we would have had more increased wages here and we would have had a different picture altogether. so it's going to be a serious impact on working americans. professor borjas at harvard talked about this. he's written papers about this. he's written books on the subject. he's i'm sure the most authoritative person.

he's an immigrant himself. himself. not his parents. he was an immigrant. and he says also that wages are adversely impacted, particularly in lower-skilled workers. so it can -- professor borjas basically said there's benefit to low-income workers. who gets it? the companies that hire the most low-income workers, because those companies will be able to hire more people at lower wages. who will lose, he said, in this process. there are many more people who are workers. that is who is going to lose. you can't bring in large, large increases in labor at a time of high unemployment and not expect labor rates to go down. i mean, is the free market crowd not aware of that? our democratic colleagues who talk about protecting the worker

not aware of that? how can you deny that so professor borjas said it. the atlanta federal reserve economists found a substantial reduction of the value of working people in the atlanta region as a result of the current flow of immigration. they detect a clear reduction in wages as a result of the current flow of immigration, and this flow is much bigger. we're talking about not only a 50 partly cloudy -- a 50% increase in the legal flow of immigration every year, meaning 15 million over ten as opposed to 10 million. in addition to that we're talking about the 11 million that would be given amnesty and

legal status, and there's an additional 4.5 million people who have been waiting to come in, can't come in right now because there is a limit how many each year. those are going to be accelerated. and then we have a guest worker program. senator chambliss talked about the agriculture ones. but there's all kinds of guest worker program. the guest worker program will double the number of workers that will come. they come for one reason. that's to take a job. they will double. so this is a huge impact in our wages in america. and this country is not creating enough jobs to sustain that. and that hurts the 11 million who are going to be given legal status. that hurts the immigrants who come here legally and have legal status already. that hurts poor people all over america, particularly because so many of these workers are competing for the lower-wage

jobs. and the people, according to the u.s. commission on civil rights and professor borjas, the group that will suffer the most are african-american males. this is really a matter not to be disputed. one in three high school dropouts don't have a job. one in two african-american teenagers are unemployed. 21 million americans who want a full-time job cannot find one. in the city of detroit, one in three households are on food stamps. in washington, d.c., one in three children live in poverty. senator menendez, i think, confuses total wage growth with average wage growth. remember, more workers will increase the total wages. so if you bring in a whole bunch, a million people, yes, more wages will be paid.

but the average wage would be lower. if you're a worker, what do you want to hear? you want to hear somebody say, oh, the economy is going to have more wages; isn't that great? but i'm going to have less because 30 million people-plus here adding to the workforce, and everybody gets less, and i'm supposed to be thankful about that? and i'm supposed to right my congressman and say, oh, great, thank you for passing a bill that increases total wages in america. give me a break. how about this? oh, they say that g.d.p. is up. senator menendez said that. said g.d.p. will increase. and we're hearing that repeatedly. g.d.p. will increase. well, of course, just like total wages increase when you have 30

million, 40 million people added to the economy, g.d.p. is going to increase some if you add large numbers of people to the economy. that's the total of goods and services produced in america. but what about average? what about the average person? their share of the economy, will it go up or will it go down? look at this chart. it comes right out of the c.b.o. store, right out of their book. 2013, this is 2013. this is 2029. this is, i guess, 2032, where the lines cross. how many years? well, 29 years or something? 26-plus years. 744, this bill, s. 744, would reduce per capita g.d.p. by .7%

in 2023 out here. and it stays below the line it would have been on had the bill not passed. this is below what would have happened if the bill had not passed. passing the bill pulls down g.d.p. per capita, making each worker in america less able to have a full share of the wealth of america. that's what that means. and it's not right. and we have people just blithely come down here for days now and assert boldly without any serious economic data to back it up, except, well, in 2033 -- this is out to 2033 -- they have had years wait out there -- years way out there that they try to claim is improvement. we need to be worrying about our people now. we've got people unemployed now, looking for jobs right now.

we should be helping them. so this is important. and finally, i'll mention one more chart that we need to focus on. this is one of the most stunning charts that i have heard. i was shocked when my staff told me about it. it was part of the congressional budget office analysis and projects for our -- and projections for our economy for the next ten years. they do that every year. they do updates every year. in the early part of this year they did a projection of employment for the next ten years, and they projected what kind of job creation we would have over the next ten years, colleagues. our c.b.o. does it every year. it's not a new report. it's something they do normally. and this is what they concluded. for the next five years, 2015 through 2018, while we're coming

out of the recovery, of the recession, they projected we would create 171,000 jobs a month. and that's really not enough to reduce unemployment significantly. we ought to be 200,000, 250,000, 300,000 to really begin to pull down employment. that's what they predicted. look at this, the second five years of their ten-year window, they project only 75,000 jobs a month. so our staff called. they said tell me about this. oh, we're glad you called, c.b.o. said. this was back in the spring. we're glad you called because we've given a lot of thought to this. we've studied projections and data and the case for projections for slower growth in this period of time for mature economies. this is what we come up with as the best projections using

private-sector information and other data that they use, department of labor statistics. well, from 2019 through 2023, we will be bringing in more than 75,000 jobs a month with this bill. how can that not increase unemployment in america? how can that not create a glut of workers that pulls down wages and creates more unemployment? i just don't see how we can possibly justify this large flow of workers without impacting adversely american workers' salary. and i'm not -- i'm not talking about, friends and colleagues, the 11 million that would be legalized. i'm not talking about that, because that's part of the agenda that will have to be a part of any long-term settlement of the immigration problem that we've got. what i'm saying is in the

future, the annual flow, the monthly flow will be more than we'll be creating jobs here. that's a pretty stunning figure professor peter -- mr. peter kersnow, who serves on the u.s. commission on civil rights, used to be on the labor relations board, i believe, he writes that this bill would have -- quote -- "profound and substantial cost to american workers." he was participating in the -- the civil rights commissions hearings. he said every witness there said that. professor borjas at harvard, the leading expert in this area, has found that from 1960 through 2012, immigration has cost

native-born workers an average of $402 billion in lost wages. firms using workers like this gained income. he goes on that the impact of increased immigration from 1980 to 2000 resulted in a 3% decrease in wages for average native workers and an 8% decrease for high school dropouts. this is 8%. that means a lot of money. he goes on to say -- quote -- "immigration has its largest negative impact on the wage of native workers who lack a high school diploma, a group that makes up a mode and in recent decades shrinking share of the workforce." these workers are among the poorest of americans. the children of these workers make up a disproportionate

number of children in poverty. based on census data, he concludes that when you have an increase in workers in a specific field of 10%, you can have the employment rate fall. a 10% increase in supply workers from immigration levels reduce the employment rate for african-americans by 5.9% already. so i guess my point here, colleagues, is that i don't see how anyone can say that anything like over the next decade, that we're not going to see lower wages, more unemployment, lower per capita g.d.p.. and i frankly think borjas' analysis probably is stronger on that subject than c.b.o.'s. we know this, the federal

reserve bank in atlanta has done similar studies. these studies show things such as the average worker's pay being reduced by $1,500 a month -- a year, which is $120 a month. our colleagues continue to insist that their promise that this bill would not provide welfare to those who are given legal status is correct. but the facts show it's not correct. i just have to rebut that. i questioned that at the beginning. we now know that that's not correct, their promise. immediate access to once legalized individuals, they will first have immediate access to state and local benefits. senator rubio even proposed an amendment to the bill that would

have eliminated that. but it was never voted on, so the bill that we'll be voting on does not change that at all. he knew that that was contrary to the promises he had made. the immediate access -- immediate access to those who have given this r.p.i., provisional status, to free earned income tax credits is in the bill. i offered an amendment in committee to fix that. in other words, earned-income tax credit, if you make below a certain salary and you're working and you have a family, you get a big check. sometimes it's $2,000, $3,000 from the federal government. it's not a tax deduction. it's not a credit against future taxes. it's a direct payment to that individual in the form of a subsidy and a welfare payment, and that's the way the c.b.o. scores it. as a d as a direct payment just like

any other payment of welfare to the individual, because that's what it is. well, they'll get that immediately, and i offered an amendment in committee, i do think, i think i incorrectly said earlier that the gang of eight members voted against it. i do believe senator rubio and senator flake voted for my amendment in committee, but it failed in committee, and that amendment to be offered tonight by senator ron johnson of wisconsin has been blocked and will not be voted on. and so if this bill passes there will be welfare payments immediately to all 11 million who qualify and large numbers of these individuals will qualify because they're low-skilled, over half do not have a high school diploma and they will be in that wage rate that qualifies for this welfare payment. it also within five years, two million to three million illegal

immigrants given legal status will become green card holders and/or citizens and become eligible for all federal benefits. so a big chunk of them, two to three, will be put on a pathway to citizenship in five years and certainly legal status in five years. the presiding officer: the senator has consumed 30 minutes. mr. sessions: i would ask for an additional two minutes and i'll wrap up. the presiding officer: without objection. mr. sessions: thank you for your courtesy. so those will get the welfare within five years. and the -- that's where we are. so i appreciate the work of a lot of people have put into this legislation. people have worked hard on it. they have a vision that they want to accomplish. and we do need to fix our broken immigration system. but this legislation does not do it, it does not come close to

doing it, it should not become law, and we should make sure it does not become law. i urge my colleagues tomorrow to vote no. that does not mean that we'll never do anything. that's, of course, silly. we need to come back with a more realistic piece of legislation, piece of legislation that asks seriously how many workers this economy can accommodate, do we have a system that deals with visa overstays. this bill weakens dramatically the entry-exit visa system that's supposed to -- under current law. that has never been implemented but should have been implemented years ago. it undermines the requirements in current law that would make that system work. therefore, it will not work, it's weaker than the current law. we should be following current law. and in addition we need to

strengthen as senator portman advocated, the everify system at the workplace. that's not done. and as senator chambliss pointed out, there are --, there are so many complexities in these guest worker programs, loopholes and difficulties that we don't even know about them. we need to simplify that system. a guest worker system that brings a person here to work for three years with their family, where they can reup for another three years and maybe another three years. they're then going to be asked to leave this country if they no longer have a job, we hit a recession? that's not going to happen. that's an impractical system. a good guest worker system should allow workers to come to america, to come only -- only those who intend to work for the season they intend to work and then they should return home and they should maintain their residence in the foreign country, and then they work here as guest workers.

that's what a guest worker program should be. this bill allows people to come with their families, to put down roots, and become established, and then it's impractical and unkind and unrealistic we would ten years from now say go home. that's not -- and we're going to have huge visa overstays as c.b.o. predicts. because that's the way it's going to work. so i thank the chair for giving me an opportunity tonight to share a few of my concerns as we move to a big vote tomorrow on cloture. i would yield the floor. the presiding officer: under the previous order, the senate stands adjourned until 9:30 a.m. on thursday, june 27, 2013, and does so as a further mark of respect to the memory of the late senator william dodd hathaway of maine.

s battlefield. the purpose is to 18 etds and the 1890's. the man that bought this is getting older to be at the want to make sure what they did is remembered and they are going to do that by building monuments. in modern times the 20th century we have other ways of commemorating things but in those days is how they commemorated this year.

this is monument to the soldiers come to the leaders. the monuments help us interpret stories and they are placed on the ground where the units fought. most of them are union monuments that was going to be a union victory, it was going to be a union victory and quite honestly by the time it ends there isn't a lot of money to build monuments especially in northern state.

on his company's refusal to participate in the nsa data collection. >> in washington, trucker has become the talking town for actually being omitted from very famous prison slides in the program that we are all reporting about across the country on the data collection and the federal government's intelligence gathering.

and i will start with this, just simply how did twitter stay out? >> i think the way that i would answer that is we have taken what i think is a very specific principled approach to the request for the users information, which can be generally summed up when we received specific legal requests in the countries in which we operate, first and foremost where we started we react to those requests and do what we need to do and obey delude all. when wheat received broad requests, we pushback to ensure that they are legally valid and we challenge requests that we have which is very public about the cases like wikileaks for

example then challenging the request we haven't seen to be very valid in defense of the user's rights to know when their information is being requested. i guess i would leave it at that. we are not petulant about our response is in these things. we have a principled sense and try not to cross that line. if we receive a request that is broad we push back on it. >> it feels like we are sort of dancing around this theme that is in the press on. you can't talk so much about it. it doesn't bother you that you can't talk more about these with the government and these sorts of things? >> so, i think the interesting thing for me is i've commented on this kind of thing publicly before in the context requests in the u.k. for a kind of injunction in the u.k. that is

referred to as the super injunction in which an injunction is issued that not only are you not allowed to say this soccer player -- your not allowed to say there's an injunction preventing you from saying that you're not allowed to say that. and those kind of things have always seemed to me. those kind of things and those kind of situations are different globally. but those kind of things i think are just generally disturbing and we have called for and would love to see more transparency about these. >> in fact google petitioned the government to be able to disclose the number of requests. break that a part in this transparency report so that there can be more clarity on

those specific intelligence requests. is that something that you support and would like to see? >> we haven't taken a formal position on that, but we see our own counsel has tweeted support for google's position on this. we generally believe that they issued their own transparency report about what requests they receive and so on. and the way they responded to those we do the same thing. we have another transparency report coming out in about a month on their request that we received between the beginning of the year and will be about a week from now. again, the report will be coming out in about a month. so, we would like to see more transparency from other companies in our field of and in reaction to the specific comments about google. generally speaking yes we would call for more transparency. >> one thing or general counsel has said --

>> you got his last name. >> good. >> that you start with the philosophy that your users own their own data. is that right, can you talk about that? do you believe that there can be privacy in this age of social media and that users can expect privacy? >> we have to believe that there can be privacy. i think that just because a technology is possible doesn't mean that you don't go down the path of having a reasonable discussion of what should and should not be dealt with. obviously we are going to start seeing this kind of discussion have been around things like the jeal location services and whether they should be off in or not and is it okay to just, you know, since the device is capturing the information is it okay for the applications to be using it and passing it around a third party without any

consensus of the user. i think those are reasonable discussions. and the kind of discussions that the users and consumers expect everyone here to be having. and so, i absolutely believe that it's perfectly reasonable to have an expectation of privacy. and it's incumbent of all policy makers to figure that out on the right course in a way that, you know, obviously isn't hamper the kind of innovation they won't be able to leverage. >> do you think they should be able to, should that be the starting point? >> the services we think that works. we make it very easy and obvious that, you know, when you want to start tweeting your location it starts off by default and then i think that those are the kind of reasonable expectations and cases that people should have and as long as you are providing them, then yes i do want to say that they have answered that

question in the affirmative. >> if you are trying to gather news as a reporter as an editor or just as a regular reader it is hard not to be on twitter and get that news and even the last two days, finding the missing red panda from the zoo was oliver rhetoric. did anybody follow the sequestered? that was pretty amazing to watch the sort of the uprising and the role that it played in all of this. >> in the up being the number one trending a topic. schenectady you have anything else like how many people -- >> i don't have it off the top of my head. i was noticing last night while the was happening had become the number one trend in the country. >> a local event became international on this platform.

so it sort of begs the question what is twitter? are you a news organization? >> i think the answer to what is twitter we think about it where public, real time or live conversational media is distributed. and we feel we are the only company that brings all of those characteristics of the real-time conversation and widely distributed we heard in the introduction the discussion above the tweeting go everywhere not just on the application but newsprints and everywhere else. we think we are the only service that provides that visibility and those capabilities create the sort of global town square. your question about is at a news organization or not we think of

it as a technology company in the media business. we think of ourselves as technologists first, 50% of the employees are engineers and that is a statistic we try to stick to to make sure we are focused on technology and the future of technology. and we don't do any -- we don't do any analysis of the information so in that regard, no i do not think of ourselves as a news organization. we don't do journalism, we don't report. it's just in this goal town square people were saying what they are saying and we think that we are very complementary to the news organizations because of course it is the responsibility of journalists to analyze and editorialize, synthesize and carry the information that is coming and supporting the signal from the noise and provide more depth to it. none of the things we do. all of the things we partner

with the organizations though. >> we even go further to say we push and invest so hard on the notion is just the ability to use this to take them out of the system in the "washington post" dhaka, or wherever you want them for free. one of the reasons we do that is because we think if i was nervous as so complementary to the news that will be helpful for them to be able to take this information and plant them on their own pages and use them as they will. >> it feels like oftentimes the breaking news of life events, newtown, boston, that they are breaking the news of water. they will do a first take, put out for the link to come back to the web site, but how does this

contribute back to the news organization? >> i think that the participants in the news or broadcasting was opening to them and with it are observing and with hirsi on plater. on newtown especially -- you can think of any unplanned event. the one that i was paying attention to and sort of really dive into personally recently was the boston marathon because a good friend of a bunch of us in the office, dennis crowley day record your miles to a tauter account -- who twitter account. they were up to the markers.

we saw all that and then the news explosions and no tweets from dennis, so we were riveted to see what happens and he said we are all held up by a half mile short of the finish line and we don't know what is going on. in those kind of cases the participants that telling you what is going on as it is happening on the photos and videos of that. i think that is the world we live now to get there are hundreds of millions of people on the platform everywhere commesso they are in fukushima japan during the tsunami, and it is going to be the case that that is where the first reports come from. i think it's incumbent on the news organizations and journalists to understand this

is a rall feed of the 500 million the day pity it took three years and two months for the first ones to be sent and now there are a billion sent every two days. so, as it grows ever more, it's ever more populated and there will be a bigger role for the news organizations and journalists to sympathize it, analyze it and help everybody understand what's happening. >> what are your observations on the accuracy in those kind of events because it seemed like there is so much information. >> so i think that particularly in the aftermath of the chaotic events in the wallsten -- the tragic boston marathon bombings, but also it's been the case there is a rumor and innuendo. there was a discussion in the immediate aftermath of the devotee looking for this many

men who appear to be of this f. mazzetti in this kind of car and all of which were completely wrong but that is the nature of how the information portion in the aftermath and the same is true on any platform including ours. someone thinks they hear one thing on the police scanner. the ability of having hundreds of millions of people is that those things are easier. they get cleared up more quickly. so, during the london riots he would have people reporting things like loaded and it on fire. the more people that jumped into the platform i think the better

it gets at dispelling it's rumored to be a disconnect you found those work and that the signals -- >> i think again it is a role feet of what people are saying. it is in the public square we are not playing the role of what is more credible than that. and we look to -- and i want the news organizations that partner with us to play that role. i don't think that, you know, you are great at it and have been doing it for years and years and years. prb the distribution mechanism >> won the event that happened is a security related issue that they saw with a lot of terror in that be twitter handle was hacked. talk about the consequences that are pretty big on the market

change. what is twittered doing and what is the role and the responsibility of the town square in the global platform to make sure that the right people are saying the right thing and that there is a real identity. >> we take our responsibilities in assisting the high authority accounts with securing their account. so, our security team and were trust and safety team and our media team spent a great deal of time with services like yours and the associated press and on and on. helping them understand best practices for securing these accounts to the kind of ways in which those accounts are usually what we call spearfishing attacks which you send out an

e-mail to tons of people and killed if they quit on the link and give their id and password it's a direct attack on a specific account where a specific account credential is and you try to convince people they should click on this link and enter some data that they shouldn't. but we have also recently spent a bunch of time and energy having the factor authentication of the high authority accounts. the authentication for those of you not familiar, the factor can be something you know, something you are or something you have. the factor authentication is something you know and something you have and will involve things like you have to enter your password in the dakota we just sent to that mobile phone tie into this account. so you can't just if you know the password get in. those of those kind of additional security measures to

block of these things down even further. we are investing lots of personal resources and money engineering dollars. but we will continue to do that because people will start to figure out how it is the right thing to happen to the doctor authenticated accounts and we will spend more time there. >> a couple of events that show the ubiquity of trotter had been in the demonstrations in turkey and in brazil and the turkish prime minister called you a menace to society because so much of the protests were driven by the folks on the ground tweeting but that they had something like $3 million he tweets several times a day.

i believed turkey has asked from data from you folks and from facebook and i think facebook a couple minutes ago issued a statement saying that they have not responded to that request. talk a little bit about your role as the global town square and with the challenges are. you talked about the data request domestically. but what is happening globally? >> i think that one of the fascinating things about this global town square is there is increasingly less affection for people to see the other people who feel the same way that they do about some issue. >> they see and hear those that feel differently about them in some issue. in the aftermath of the

awakening that we had a group of female egyptian scholars and talk about the fact that it was amazing to them to see how the social services like twitter there were these women in pakistan the female scholars in pakistan who felt similarly about the issues that they were concerned about in a way that they had never been able to see or hear before that is compelling. that is what makes the global town square. that is happening right now as you mentioned in turkey and brazil. even though they are very different circumstances, we now see these protesters in basel conversing with the protesters in turkey and sort of showing the interesting solidarity in the defense of things that they believe to be wrong which is fascinating pivoted and you would have never seen it before.

.. >> if we have to we will do that but in this specific case is very fluid and we

will eat fall fairly rapidly >> is there a movement to actually shut down in twitter that you have seen? >> i hope not hispanic gearbox to an iran and china and we do have many users to access us through virtual private networks. >> they have a work around. >> but we would obviously not -- love to not be blocked ian to have access to all the people right now it is there a global town square minus a couple and we hope to be and we hope in the future we could be but we will philosophized the principles rethink the way they should communicate in order to do so. >> what about the twitter

equivalent to a club late? >> it is a service launched by a chinese internet company and it is like twitter platform that has since seibald with 140 characters, etc. it is now said the ticket made different but i don't think think, we would just love to have twitter in china. >> with this convention there has been a lot of talk financial models, pay walls, if you have any thoughts or a debate on what is the right course to go? what your thoughts with on-line distribution of

news? >> that is much more of your expertise than mine. it is funny. i will make a little diversion here. whenever in a conversation with a ceo in the valley and he said it is funny there intercepted at various points like you have to be a founder's ceo then no, no, no. you need to bring in the professionals see zero and and on and on and the reality is each of these people in the valley whether the founder or the professional seo has a

superpower and a weakness and the various times people either forget one or the other that they are a genius are the stupidest person that has ever existed and i feel that way. people say no, no, no. we would never do that but with those people are crazy and how could they have thought that? and the reality is there is the balance that works so i think i have been impressed how well those have worked in that there is a proper balance between prescription pay and advertising but one of the reasons we have the platform service for free is so that you can bolster your

reporting with those and that is perfectly fine to have this complementary relationship. >> talk about the business model that you know, and what does the future holds for twitter in terms of the video, the experience of you talk about twitter to accompany the fence and reduce the the money being made to these avenues beyond the 140 characters? >> to order and they are remarkable together but when i watch now without my a device in front of me it really feels like the volume is off the tv. and the founder of this company that we purchased recently likes to call social -- whether the social

soundtrack for tv. so i think the model that will leverage with that symbiotic relationship we just launched a program called twitter if the five that we felt for 5f fifth users with a short segment of something that just happened on a show like a sporting event like a liberal on blocking the guy on vespers don't maybe 10 seconds to less that use a tune in now so those are compelling and useful and good for the broadcasters there because even with the launch we would in bet super short ads in advance of the

video and that is new money and those seven great aaron super successful and users get a highlight for something that literally just happened if you are in the home office you see this happen then the the up to pre-recorded shows with a first-run episodes of pretty little liers is about to air a and here is eight seconds of what is happening tonight that will be beneficial to both the broadcaster. i think the 140 characters with the associated canvass of the short and video will be a great evolution.

>> i think more twitter as the 140 characters as a caption to a canvas that paean be much more rich. maybe a video, application, you can imagine again as a news organization conducting a light pole on twitter that it is the whole question and the canvas is the of paul and as people answer the data changes to even say 90 seconds until the poll closes. the beauty of it being a tweet is it can go anywhere the tweets go it can be imbedded also embedded in though "washington post" did, and also called the tablet and on the android phone and on the desktop and everywhere else. that evolution with that platform to the end of the year will be more and more rich and twitter amplified

is the first peek at that. >> so that is more of the newspaper language thinking of the captions and envelopes of different content is why would expect that user interface it is difficult to navigate will change and evolve as well? >> i think the general nature of the stream will be pretty close to what it is today. i like the tap and it expands the notion. we will see i a will not say we will never do xyz but it is easy to see how you can go down a path where things get too noisy to quickly then people say for example,

i am making this up so do not go right this i can see the problem already. [laughter] but let say we are reopened the the everybody stores to put up a pole because those are more hayek the engage then where are we? but you kidding where is the light? of the photo are the ideal but nothing else? we will experiment and see what works and what to make sure we're always optimizing for the user experience and the simplicity of the product over thumb tacking more things on to it. >> let's talk about your cultural influence with all due respect. >> my grandma used to say

that before they were thrown under the bus. [laughter] >> i will be gentle. [laughter] sometimes i have to take a twitter holiday it is overwhelming the anxiety when you were on and it can be distracting. do you feel that sometimes it contributed some -- contributes with too much in zero ways? >> no. [laughter] >> what is your advice? >> maybe you don't use it be enough. [laughter] >> embrace it more. >> you are just not comfortable. >> you are a busy person in common a ceo with a 200 million users, how you use it effectively so it does not bother you down? >> you get to choose the

county follow-on twitter so the whole mystery is what you wanted to be so it can be as noisy were quiet as you like based on the volume and variety of the cows that you follow. i try to prove my own home timeline with the list of accounts that i follow with some regularity by feel that i am getting too much noise right now or these are not delivering value and people should go in there to do that for themselves on a regular basis. i do think that has saved me a remarkable amount of time that i don't have to check the end of number of sources a used to check regularly is there any update and i can just look at my own timeline on twitter to see quickly if

there is anything new with something i am interested. >> you only follows 300 the you have a million followers. >> that goes up and down sometimes it is 200 i change it based on things i am interested in like how does this particular group of users why is it different than the way they use it? >> tell us how new databases do you consume news? more when you wake up at 5:00 a.m. to you pick up the newspaper? >> i followed news accounts on twitter from a variety of subjects. i will check twitter then read the detailed article

and i would say i read more detailed articles because of my own time line on twitter than otherwise. just because i would not be able to have time or think to go check the variety of sources. >> one thing you do as a leader with managers and editors a and one thing that i understand that you do as a leader, that you have teatime? off the record weekly sessions with your employees >> everybody. >> what is the value of that and why do you do this? >> tee time was instituted long before i got twitter when they started the company they had this every week.

it is very important to me that everybody understands what i and the stand. i tell my managers this all the time i will teach a class that i say i stand up in front of the new managers or the experienced managers in this is how want you to manage and i have a couple pages of notes to remind me but it is an interactive session and i start off by saying if you pass out for five hours 55 minutes to hear one thing make sure that everybody understands that you understand what you understand so many leadership problems individual contributors and the thinking so part of what i tried to do is answer

every week five employee questions that they can vote up or vote down and we to the top five and after a board meeting at the very next meeting i will stand up and say this is the we talked about these were the board's concerns and here is how we responded here is what they want to see more of the next time. everybody in the company sees exactly what our strategic metrics look like and where we are with quarterly goals so everybody has the same context throughout the company for what is going on and you don't have the left and right hand thinking to different things. we extend that to a bunch of others we extend that broadly throughout the company in the super disco headquarters none of the

conference rooms are frosted glass with a couple of exceptions everyone can see everything that is going on in every room in the company with the exception there to public conference rooms and one very big one for sales meetings that the engineers got tired of getting distracted by jumping jacks or something and they asked to have a frosted so they do not have to look into that. [laughter] so you can see what is going on in any conference room and any meeting more than a couple people you have to send out notes and with that internal tool and anybody can subscribe to the notes from that meeting. >> that is fascinating. >> the benefit is you are of a red light behind some sgb

and wintergreen the person does not go but 99 percent of the people in this room don't think of themselves there must be something going on a portable or they would be moving. but we think go. but if the top of the car was ripped off you could see that driver had an emergency with the baby in the back seat or someone crossing the street you say okay. i have to sit here and wait now i will not honks so i think it is true with the company. their engineering and they are sales and what do they do all they? what do they do all they? it is not as tough on a place to work to do don't have the context

>> i think i heard you say more of a mission statement clarification. i heard you describe it grow the business in a way that makes us proud? >> it is a core value, not a mission. >> how can you continue to do that as you grow and go public? >> this fascinating to me it is almost always the case that people who ask me the question this way, as you grow as a company your desire to do the right thing will be at loggerheads if the desire to make money but it is almost always the case the tension is between two different things for the users but not the right thing to do for the users or the business.

for example, we allow people to use pseudonyms and not putting in their real name or address for identification. one of the reasons that is important because the ability to use that facilitates political speech in countries where it is not welcome. but the flip side is when i can hide behind anonymity it is easier to act like a troll to go on to a twitter pager and swear up and down all day and call them names. that tension is always what we struggle with. the tension between the business can do the right things for the users has largely been overdramatize and frankly fictional because my answer is always if we do the right thing for the user we will figure out the way to monetize that. we could make money an artifact of doing the right

things for the user cannot think of those two things that have to compete with each other. >> so the idea is to grow the business in a way that makes us proud we felt statements like dolby evil that we have to move the line that we did not sell any one. [laughter] but to grow with in a way that makes us proud we could say on every excited to announce what we did today are not tell everyone because we are not excited about that? the first year reran advertising lettuce takeover the bird and if you change it to a football we will pay you x dollars for one day only. then we said we will go through the things that

draws a business to make us proud. we will not say guess what we did? so we will take the more difficult task to monetize the platform like promote a tweet and hopefully that core value allows us to have a discussion about things that some people think are over the line. >> we will open for questions if you can identify yourself that would be terrific. >> with the editor of the columbia in vancouver, have you ever considered tweeting the of tweet number at 150? >> no. [laughter] 440 -- four to 40 characters those are sacrosanct.

>> to go back for a bit i would like to know whether you were invited your instructed by the federal government to participate in this program or whether you chose to turn the government down and if that was done based on legal objections, what were those? >> this is where i say i cannot comment but i will go back to the first thing i said what -- which was when we get specific pointed legal request that a legally valid, we work with the authorities, we respond to them. when we received a request

that we feel overly broad, not now with the legally, we push back on those it is fair to say as has been reported with other cases like mckee leaks we will spend time and energy and money to defend our users' rights to be informed of the information requested about them. that is our answer that question and all i can say about that. >> digital first media and have a question how journalists' use twitter you have a limit of 2,000 accounts somebody can follow unless they have a certain number of followers. multiple journalist in our organization clearly are using twitter and engaging

with the community kind of way to have hit the 2000 ceiling in maybe 1600 followers that they are cut off from engaging with the community and your customer service people have not been helpful with this. it's just seems like it could be valuable for news organizations. >> there are actually a range of related capabilities and pieces of functionality like weight limits for example, that i like this that would do a much better job. things that you may think are relatively easy to turn now to be a priority that we need to deal with but i completely understand what you are talking about. it is the case historical a

when we started dealing with spam we dealt with it in a brute force way all accounts are created equal like the number of accounts you could follow the, etc., etc. and we just need to be much smarter about understanding not all accounts are created equal. there is actually a bunch of work to do so it is available to the hundreds of millions of accounts that we have. >> there are those hooch we did at me at the same time you cut off them to work more effectively you don't

have that. >> i will tell you. [laughter] the amount of energy time dollars people overall resources that we spent dealing with this -- spam would surprise you in a remarkable way. it always seems to be the case you could block the spee immerse but they changed tactics in we spend an extraordinary amount of time on that. and it is one of these that you get ahead of them and

they create a new path around that and i think that will continue to be the case for quite some time. >> "usa today" whether the best ways to use the news organizations using twitter or the worst ways? >> i think some of the best ways are win the tweets are captioned to a thoughtful analysis of something that maybe even a there people are reporting on that help you understand this is a thoughtful analysis of what is being reported on in those are the things that draw people in because then they realize i already heard that. then i would say that is an

important way for news organizations to think about that. it is the case for some particularly those with a specific subject matter area without psychosocial media with a specific personality it is extremely helpful when they bring bad or tone of voice to their twitter account. that goes not just for news organizations but organizations in general if this is a satirical tone of voice that works very well. things don't work are trying to virginium the same aversion of the same headline that the 50 other

news organizations, or anything, as sports sports, athletes talking about the goal that was just scored a am looking at the world cup game and brazil scores a goal and i am one of the 10 million people that tweet goal with my reading it is not as interesting with someone who has commentary about the goal or a and assist the for the goal or something that has a link to it so that is the way i would think about it with a broad brush stroke >> i am from the missouri school of journalism. people have suggested news companies need to act like digital companies and can you talk about how you ryan trader and had news companies could learn from that?

>> i run it as an extremely open with my employees what is going on in the company. my default mode is to trust them so when we have a confidential project i will tell them all about it so much a twitter musec relationships with apple and the integration of imf we told people in the company when they were ready well in advance of the public announcement that it has been on vacation that has been leaked you make it very clear it is a zero tolerance policy and if you do this you may think you are

currying favor but you're hurting the fellow employees because we want to do these i very much the golf to more openness allows contact f and with the context they can be more productive our office space is completely open there are not cuticles be tried to move into a place of 80,000 square feet so people don't have to open down stairs and elevators but we have grown and we have to do that but very large teams can fit within one large open space and people can see what is going on and they can work. >> with university of kansas. how many applications did you get for the head of news job and if it is still open? [laughter] >> as i understand it the

job is still open and we have gotten an extraordinary number of applications for that and a number of other very interesting jobs that we have all been. but i am pretty sure that position has not been filled yet. >> seriously whether the priorities that you see the first things? >> as i talk about the complementary relationship between twitter and a news is facilitating that complementary relationship so for example,, as half a billion tweets per day, what are the things we can do to make sure helping a news organization identify ways to this event is happening

right now and the filibuster in texas last night you need to pay attention because otherwise it can start to look like more information so what are the ways we can help you to identify there is something interesting? and everyone coalescing we better pay attention. we want that person to be focused on those kinds of things than to go back to make sure the news organization is implementing the latest technology. >> as ceo you are in a unique situation do you send them a note you are not mad at them? >> i don't follow all of

them i definitely get employees saying i tried to direct that you but you are not following me but that is there way to say followed me sometimes i do because i switch around and i do get grief for that. i was asked by a journalist a couple months ago if you had to describe yourself as ceo what would you describe yourself? the use the word present because i'm actually serious. [laughter] but i can see the humor in that. i try to make sure i am not hiding in the corner in the middle of what is going on in the year on three or four floors i am just up on sales and engineering as as much as the others.

>> and would be a bad journalists of i do not ask my executive editors question, when you get a broad request for data from the government's been a kid could be a prosecutor in new york or that good stuff. >> i will narrow that down. if, can you give us a sense of how often you get broad the data request? >> to the extent we can split those out republish all that in our transparency reports in the next one will go up in about a month and cover the period from the beginning of the era and tell about one week from now. that breaks it down. >> finally twitter is about

moments. >> i agree it is very much going back to the founder he likes to refer to what has life in a moment. what is your position has been the most surprising momus one negative moments? the biggest high or the biggest blows? >> the world will moments are usually the ones they're very personal and i mentioned one earlier which was seeing this good friend dennis crowley tweet mile 25 then nothing. explosion. you are riveted because the information is pouring in and you think why haven't we heard from denis?

if you stopped what happened? that was the most personally terrifying moment. but the moment you have an epiphany of my gosh that could only happen on twitter say keep happening and changing in interesting ways. the conversations between the protesters in brazil and turkey because they are about completely different things but there is a camaraderie but the conversations between the kinds of people who would never speak to each other before because of artificial barriers of status or industry or social economic barriers are amazing see you get these fascinating conversations between people

like drake boasting the first million is the hardest and he booms begins response the first billion is a heckuva lot harder. [laughter] something you don't witness every day. i mentioned an earlier conversation with salmon rushdie tweets #literary smacked down to this novelist door this novelist. go. that they will time into the conversation and it is fascinating to see that like sitting in a class where the best people are talking about character development. i say this a lot and my favorite one in dip your

family is driving you crazy% you are in a woody allen movie. i tried that and it didn't work. [laughter] i tried that. those are my favorite moments. >> thank you very much. [applause] [inaudible conversations] thank you every ready for coming we will resume a to a clock.

>> the committee will come to order. the oversight committee

mission statement is we exist for two fundamental principles americans have a right to know the many washington takes is well spent and second americans deserve an efficient and effective government that works for them. our duty on the oversight reform committee is to protect these rights a solemn obligation is to hold government accountable to taxpayers and they have a right to know what they get from their government. in to bring genuine reform to the federal bureaucracy. a few days ago the irs commissioner gave a 30 day assessment on the plan of action for the future of the irs. the report stated in many instances across the irs we had the efficient and effective management leading

positive organizational performance and unfortunately we are here today because barriers within the irs are not isolated to just tax-exempt divisions and the revelation -- revelations of strong castle could acquire more than 500 million of potential contracts for potential sales with no previous track record completely undermines the irs narrative that just one branch or department failed the american people. our report shows a cozy relationship between strong castle president and the ira's deputy director for technology and it is the heart of the issue included

in our report the exchanges of text messages that we believe are shocking the inappropriate and furthermore the fact that mr. castillo could manipulate the system we are not alleging a crime but to manipulate the system to acquire contracts has staggering vulnerability in the acquisition process toots' jeopardize billions of taxpayer dollars in this situation. quite frankly we're not sure we have criminal element here but what we are sure of his the intent of congress and the stated intent of this administration before has been thwarted. the intention of without a

doubt disabled military veterans receive preference preference, the flies in the face of a small injury for the military academy prep school so later it had no effect on college football participation for years to follow that took 27 years to conveniently ask to have this put in as a disability not because of a true disability or inability to perform a job but to qualify for a statement. the use of the hub's known actually the verizon center are moving out of that into a thriving areas and the use of that in order to get a contract then creating new

jobs or in support of the $500 million contract. it is still in its infancy. today we work with the ig and others within the irs to end this problem the irs officials initially denied than repeated the denial there was a problem and failed to take action after this was brought to their attention and the irs is allowed into hundred $66 million contract with strong castle to stand. the action by the inspector general when notified of these allegations almost one year ago was a lack of

urgency that the american taxpayers deserve. in our evaluation we find no value added performed by strong castle. i repeat no value added although profits flow to the company over and above the full payment to those who provide the irs with those services. no hearing related to the irs would be complete without mentioning under obamacare the task of the ira's to implement at least 47 new provisions including 18 new taxes will raise $1 trillion in the need for computer systems to work accurately gauge the question can we afford to implement obamacare if we cannot get the system and control in place for

existing requirements. just this year the irs requested $500 million the same amount they plan to award to a strong castle to enforce obamacare including 2,000 new full-time employees. we're not trying to save one is interchangeable with the other but it is a lot of money that could for a fraction be passed on to the american people. often we applaud appropriately federal workers i want to make it clear the vast majority into a contract being seriously. the scrutinize most often try to get value for the taxpayer in.requires

absolute integrity and if we do not have full confidence with a procurement integrity then we must choose the lowest price this is not always the best value for the taxpayer but the analytics of the lowest price purses lowest value depends on the independent non cozy relationship between between the contractor this committee has applauded and will continue that most contracts have the characteristic there not always awarded the way people would like but they are based on based value to the taxpayer in this case with our draft report we don't believe that occurred and that is the

reason we continue our investigation. i would now like to recognize the ranking member for being the partner of this investigation. >> this is an important hearing and it is to examine allegations against a company called strong castle that has been awarded $51 million in obligations under the contracts with the irs. the first allegation made last december was that the company's owner, a local businessman from northern virginia fry in been a

starkly managed the business of program while setting up his company's here in washington d.c.. let me say from the outset i have a tremendous interest in the hub so on and i have lived in what would we have considered as subzone 32 years in the same house where i would imagine end male unemployment is probably 35 percent unemployment. where businesses struggle trying to become a part of this economy to do well to uc enough and to tell you i have worked with a lot of those small business people who have felt quite often there were not on the

playing field and felt there rinaldi even in the stadium. and they have struggled long enough and now i have seen many of them die. chasing a dream and trying to get there looking for a playing field that is simply level but they cannot even get on the field. so the purpose of the house of some program is to help small businesses increase employment and investment of economic envelopment to underutilized business areas and as part of this program as is overseen many received preferred status in order to qualify mr. castillo had one small office in the head sewn he then worked with the

head football coach at the catholic university to hire college students that lived in a different hubs so near the school. mr. castillo government acquisitions file a protest with the sba and government accountability of this the company accused mr. castillo of engaging'' in a shell game with multiple businesses and employees and also accused him of manipulating the fax to gain the preferred status sba investigated the allegations to certify his company as they have sown contractor may 23rd, 2013.

i ask unanimous consent the decertification better be placed into the hearing. >> without objection. >> his company submitted employee records were off and inaccurate and it does not have the adequate internal controls that independently verify employee records despite these findings we credit mr. castillo to appear today to participate in a nine hour interview with committee staff and provided documents to us and to the sba and he is here to explain his actions committee staff also conducted extensive interviews with almost all of his employees and another major allegation involves mr. castillo personal relationship with an irs

employee named greg roseman he did not disclose his relationship to the contracting officers who awarded contracts to strong castle. to the direct supervisor or to the irs office and this certainly concerns everybody greg roseman is 90 alternate adviser but he participated in the contracting process as a voting member of the contract review board for two of the contracts no irs officials reported having any knowledge of his relationship with mr. greg roseman no contracting officials are other irs employees interviewed by the committee reported any inappropriate influence from greg roseman with the process but nevertheless the

evidence obtained by the committee indicates at least an appearance of impropriety because he did not disclose his relationship or recused himself from the contracting process regarding the personal relationship, he stated during the interview with committee staff'' we are friends'' and in addition on may 15, and 2013 that administration reported mr. castillo and greg roseman exchanged text messages on their personal self laws that had inappropriate language and lacked professional to planet. 300 of these text messages included for work and personal communications and also included obviously inappropriate communications with a juvenile and in an offensive homosexual slur to mock references to another

irs employee. he has been reassigned pending the review and is no longer overseeing procurement and earlier this week his committee wrote to the committee indicating he is invoking the fifth amendment right not to testify today. i am not here to defend his action is but this is his right under the constitution amir bound to respect that right. to talk about the tremendous responsibility that the irs has been facing with regard to the affordable care act act, i have said it before but i will say it again, all of us, everybody up here has fired people. all of us. bad actors does not stop the show.

this is the united states of america. we have problems with the institution and of people were not doing their jobs they have to go. but that doesn't mean that the law, the affordable care act should not and cannot be administered by that agency. we are a can-do nation. it is part of our obligation to make sure that we write off this ship to make sure its sales so it can accomplish the things that the congress had voted for and that's we have stood up for and that is the law and with four -- with that of afford to hearing from witnesses and i yield back. >> all members have seven days to submit statements in reno recognize our panel.

mr. brad flohr senior adviser for compensation service for the veterans' benefit administration at the veterans of registration. next have the social demonstrator of the office of entrepreneurial development at the u.s. sba and the deputy commissioner for support at the iris, and this beth tucker. greg roseman the deputy director for enterprise networks and tear system support at the irs and i believe that is a previous title but we will use it for now. next we have the deputy commissioner for federal acquisition services at the gsa. wellcome. and also mr. castillo president and chief executive officer of strong castle.

pursuant to the committee regulations will you please all rise and raise your right hand to take the oath? do you solemnly swear or affirm the testimony you are to give will be the truth, the whole truth, nothing but the truth? let the record reflect that all witnesses and inserted in the affirmative. before i continue and because this committee is acutely aware that one or more on the panel may choose to assert there fifth amendment rights and because this chair does not want to have anyone waive that right accidentally or involuntarily does anyone here at this time intent to invoke the fifth amendment rights? >> i do intend to invoke my

fifth amendment right to be silent. >> mr. rose and you have not provided any written testimony today? is that correct? i am understand from your counsel you may want to assert your privileges and you have said that is correct. mr. roseman, today's hearing includes topics of waste fraud and abuse of government contracting set-aside as the tear systems and support at the irs you are uniquely qualified to provide testimony to better understand acquisition practices at the you are -- irs in to that and i must ask you to consider answering questions that

with there on that subject. mr. roseman what is your title at the irs? >> mr. chairman, my title was deputy director of procurement. >> to him to report at the ira's? >> i respectfully decline to answer any questions and invoke my fifth and into right. >> do that again. i apologize. >> mr. chairman on the advice of killed or respectfully decline to answer any questions and invoked fifth amendment privilege to remain silent. >> when did you first become aware of a company known as

strong castle? >> mr. chairman on divisive killed or respectfully decline to answer any questions and invoke my fifth amendment privilege to remain silent. . .

witnesses right to remain silent and see what the fifth amendment is. i have no objections with the german dismissing his witness. given that the witnesses indicated he doesn't intend to answer any questions out of respect for his rights under the constitution, i will now ask the committee to excuse the witness, take away his name, and we will take a short recess so that we can reassess the table. you are excused.

>> [inaudible conversations] [inaudible conversations]

>> the committee will come to order. i would like to thank all of the witnesses. the chair would like to make sure that we allow sufficient time and even though we are smaller there is still the small panel so i would ask that your entire statement be placed in the record and stay within the five minutes or very close to

that. you are recognized for five minutes. >> thank you mr. chairman. ranking member of the committee, i appreciate the opportunity to appear before you to discuss the part of veterans affairs process these for granting service connections for disabled veterans thereby to serve the better known small businesses. we are committed to making accurate decisions and claims for disability compensation as reflected and the goal of 98% accuracy by 2015 and monitoring the program. oversight of the programs ensures the qualified veterans receive the benefits and the business qualifications they have earned through their service to the nation. disability compensation is a monthly benefits payable to the veterans that have a disability or disabilities resulting from injuries or disease aggravated

by the active military service. such service includes active duty, active duty for training joined with the individual concerned with disabled injury incurred or aggravated in the line of duty. and in that training during which the individual concerned was disabled or died from injuries or aggravated in the line of duty. service consisting with anyone of the schools of the service academies may constitute active duty or active duty for training for the purposes depending on the circumstances of the individual service. the office of general counsel held in opinions and 94 and 95 that characterization of an individual service had a united states academy preparatory school for purpose of entitlement of butter into the combatants benefits on which they enter the school. service by a person entering as a reservist called to duty for

the purpose of attending the school whereby one was enlisted from civilian life for national guard duty to attend the school constitutes active duty for training. they enrolled directly from the active duty in the endorsement remain on the active duty within the meaning during their attendance. the individual selected in the preparatory schools are in the military. they wear the uniform, they are paid based on their military rank subject to the uniform code of military justice and upon the release from that period of training they are issued with either on a mobile service or other than whatever the characterization may be. november of 1995, the amended regulations to reflect on the general counsel statutory interpretation concerning this type of service.

the statutory authority for the disability resulting from service stated in 1110 is not limited to provide conversation with disabilities caused by the military service. the statutory authority is to compensate the veterans for disability incurred or aggravated by service. once an individual takes the oath to serve in the united states they are on duty 24 hours a day seven days a week. if he or she is injured or develops a chronic disease whether in combat or during the routine activities claims process and the decision in entitlement than the amount of any disability that may be payable. in determining whether it is related to the military service the mussulmans of an injury or disease or exposure of service, medical or certain circumstances late evidence of the current

disability and evidence of a medical or scientific access between the current condition and the service event. the heavy statutory duty to assist the claimants in the required evidence. this includes the supporting evidence and the ordering of the examination regarding to become regarding it as necessary. they review documents pertaining to the military service and service treatment records obtained from the particular records. they also request evidence identified by the claimant that may be pertinent to the claim and medical private providers that we are made aware of to be the carefully evaluate all available evidence to determine its entitlement connection is established and if so the level of severity of the disability. the standard approved of making these determinations is reasonable doubt. in addition to reviewing and requesting the military service department the highly blames

hour of the military records which includes identifying any note to alterations the fraudulent records and with expertise in military records. they enjoy the benefits are awarded to those who are entitled to them. on the determination that has occurred the preliminary decision is made with respect to adjusting for terminating an award. they provided the due process rights in the action to be taken. the reason for the adjustment and the right to the representation and the right to the evidence serving as a basis for the proposed adjustment. if no evidence has presented, the award is adjusted and the case is referred to the office of the inspector general to review any further action that office may deem as necessary. the office of the inspector

general court meets an investigation of the united states attorney's office and prosecutors -- >> could you summarize, please? >> that actually summarizes my statement on the service connection. >> thank you three much. >> thank you for inviting me to testify about the small business administration in the awarding of certain contract the computers successor strong castles incorporated recently certified as a historically underutilized businesses owned entity. before discussing the specifics of the case i would like to briefly describe the program and some of its recent successes. its aim is to help the small firms in the communities gain access to federal contract opportunities. generally the areas with very low median household incomes and

or very high unemployment. the program requires certified companies to have their office in the azo and to employ individuals that reside in these zones with the intention of spurring economic growth in the community. as of may 31st, 2013, there were 5,029 certified zoned small businesses and in fy 12 over 8 billion, over $8 billion awarded to the certified terms for the work performed in all 50 states including the d.c. come apart rico, the virgin islands and the northern of islands. in the case of the sci. it was certified on june 22, 2012. they were awarded a blanket purchase agreement by the irs on december 7, 2012. the status protest was filed by a competing firm on december 19, 2012. they couldn't process the protest based on the applicable to this fictional roles.

however, they believe the information contained the protest, to question the eligibility. as a result, sba promptly began its investigation into the eligibility for the program in late december of 2012. they proposed the decertification on january 31, 2013. it is important to note that this investigation and the resulting proposed certification took place before and independent of the investigation of sci. after a thorough review it provided in 2013. sba takes very seriously the duty without fraud, waste and abuse and all of the federal small business contracting programs and putting the stone. our top priority is to ensure the benefit of the programs flow to the intended recipients.

our government contracting programs are a critical and effective tool kit for small businesses. however, we have no fraud, waste and abuse in those programs. for this reason, we have implemented a comprehensive three-pronged strategy to identify, prevent and pursue the noncompliance or fraud across the demint programs. first it is effective certification process these. clear and country inns of eligibility screening on the front and ensures that only qualified eligible firms participate in the program. the continued surveillance and monitoring targeted and thorough examination of t firms that no r qualify and the robust and timely enforcement. prompt, prospective enforcement removes the bad actors and deters the wrongdoing and provides integrity to the contracting programs we are proud of our partnership with the office of the inspector

general whose assistance is critical to the success of our improvement efforts. through ongoing collaboration with the government accountability office and the stakeholders, the intend to protect the federal government commitment to aid and assist small business. the efforts described in the testimony reflect an integrated approach that utilizes the resources across the office of government contracting business development and the 68 as men to beat the district offices and others. they are described in the testimony and have taken great strides to strengthen the small business contracting programs and implement a robust strategy to combat fraud, waste and abuse. work remains to be done to completely eliminate the fraud, waste and abuse as bad actors still attempt to take wrongful the advantage of government benefits. while we have made significant progress, we continue to look for the ways to identify the opportunities for improvement

and to maximize small businesses access to this important source of revenue so they can do what they do best. start, grow and create jobs. thank you for the opportunity to testify before you today and i am happy to answer any questions you may have. >> thank you. >> chairman i said, ranking member and distinguished members of the committee. all i am the deputy commissioner for operations support at the internal revenue service. i appreciate the opportunity to appear before you today. i have been an employee for 29 years to be a i started my career in 1984 as a revenue agent. i and very proud of my government service, and it is an honor for me to work alongside the dedicated men and women of the internal revenue service to the government and keeping our economy strong. in our role as administrators,

we collect 92% of our federal receipts and last year we issued more than $330 billion of refunds to the individual taxpayers. as the deputy commissioner i oversee the internal revenue service. in putting technology, human capital, but it, real-estate, physical security and procurement putting it in february, the committee said the department of treasury a letter praising questions about the two contract the onerous awarded in december of 2012 to strong castle, one of the thousands of vendors that they do business with. one of the contract is for the computer equipment and let me be clear that we have made no award for purchases under that contract. the other animals licensing and product support for the software used across the enterprise of the irs. upon the receipt of the committee's letter i immediately

referred the matter to the treasury inspector for the administration. it's important to note the investigation is still ongoing. in mid may i was informed about the inappropriate and unacceptable personal text messages sent by one of the procurement managers doing business from his personal phone i took steps to have him reassigned to a non-supervisory commission that doesn't involve the awarding more administration contract in the investigation. they have information related to this matter the didn't been previously comprised of. this new information is deeply troubling, and it raises additional questions that the

internal revenue service must investigate. let me be clear these types of communications should not occur between a procurement employees and a contractor. we expect all of our employees to access professionalism and integrity. we are taking steps to separate the irs from any ongoing business relationship with strong castle. subject on the need to safeguard the mission critical resources. under the team agreement with ibm that has been talked about in the day since the report was issued, there are a number receiving 500 in a word from that contract. let me be clear that they haven't received anything near that amount of money so it didn't come from the software teaming arrangement and 98% of

the value of the contract if it was awarded would go to ibm. in response to the letter also directed officials within the procurement office and the office of the chief counsel to review the documentation and correspondence related to the two contracts. in addition as a result of the issue for the surface from the committee inquiry we are doing it ought to bottom review of the policies and procedures everything from internal control to the business process is in the staffing practices bit i've asked the department of treasury to expand its routine assessments of the procurements reviews. based on the information that we have received, we will also further enhance the training with regard to the ethics and the focus on impartiality and

the appearance of impropriety in use of the official position. they haven't seen anything within a predetermined organization, and i think this is also backed up by the extensive interviews the committees have done with the host of the irs procurement officials, inappropriate behavior on the part of any other irs procurement employees to the these are 400 hard-working, and mr. chairman, as you mentioned, our procurement community has a strong ethic and wants to support our agency. we work with the committee to provide you with updates on the results of the continuing review and partnership with tigda and we would implore the committee to please share with us the full set of information that you have obtained in your interviews.

the treasury inspector general in bringing this matter to conclusion. i conclude my statement and i am happy to answer any question. >> since you made a direct request it is our intention to share fully with this information. i must admit it's been a one-way street with a lot of documents from the irs the long overdue. >> members of the committee, my name is bill and i am the acting deputy commissioner of the federal acquisition service. i started in the regional office in alana in 1990 and served in a number of management positions including the assistant regional administrator and regional

commissioner. in my capacity as the commissioner i represented the acquisition services, network services and purpose personal property. i also served as the assistant commissioner in the office of general supplies and services within the federal acquisition service and was appointed to the u.s. if of the commission which is a unique program that provides employment opportunities for individuals who are blind or have other disabilities. i appreciate the opportunity to appear here to discuss the program and the process by which they review this application. schedule 70 is the largest most widely used hinkle in the federal government. schedules 70 is an indefinite delivery and the quantity multiple award schedule providing direct access to the products and services from private sector companies to become partners from the country. there are 4,853 businesses under

schedules 70 and 4,172 of these more than 85% of small businesses. many of the small businesses have the socio-economic designations. 720 are 88, 128 our hub zone, 321 our service disabled veteran owned, 333 are foreign-owned and 1,027 are women owned pitting it through june of 2013, about $11.5 billion worth of the procurement has gone through the schedule 70. and 4.5 billion of that went to small business. schedule 70 helped federal agencies to save time and money while ensuring the good value and the available goods and services. schedule 70 is one of the two schedules since available in the state and local governments through the cooperative purchasing program at competitive prices. by allowing the partner agencies to purchase from the preapproved

vendor as they can conceive it received goods and faster. it's not the only way to do business with of the government, having the scheduled contract allows vendors and agencies to cut down on the administrative cost. the and the price ceilings with a significant discount from the pricing and serve as a starting point for the competition and negotiations. they have an established process for rich to evaluate the applications and make a determination of whether or not to approve the businesses to get on schedule. over the past three years if processed approximately 2800 applications for schedule 70 to the average up with peaden processing time is approximately 110 days to the offer provides an online paperless contracting environment in the step-by-step process that complies on the acquisition regulation.

after the packages submitted into the system it is then assigned to a contracting officer or contract specialist who reduces the package for completeness. after the initial review the contracting officer or specialist sends the offer and administrative letter identifying any areas for which additional information is required. when the package is complete, the officer or specialist has the responsibility to termination using ballpark nine with house pricing tools or by submitting a standard form 1403 to the office of credit and finance to review and approval. in the review the contracting officer or specialist will also utilize the system for management to review the offer as representation, certification, past awards and performance and to ensure that all information is correct and accurate and complete. after the responsibility is complete, they prepare a pre-negotiation memorandum

outlining the negotiation strategy and any remaining deficiencies. if negotiations are successful a final proposal provision letter is sent. if the author accept, they conduct a final review of the author and perry and finalize the price negotiation memorandum. after all the required forms and additional information are completed and signed, the end of the offer into the system and prepare the package to send it to the vendor. they have an established process to review the applications in a timely fashion. i appreciate the effort kennedy to be here today and i would be happy to answer any questions you have to use the mick ranking member of the kennedy in a january of 2012 my wife and i purchased a small company called sigma computers and at that time

they had 15 years of experience as a government contractor. because the significant experience, the plan was to transform into a small business that initially focused on the i.t. procurement. when we consider how we could best position the company to support the agency, we came to learn that their desire to work with contractors will businesses decided to pursue the service disabled footer credentials. they never received any preferential treatment and we had competed fairly for every contractor that we have received and in the short timeframe that we had owned, our company made meaningful contributions and offered the government of the cost effective solutions to the difficult problems. there was instrumental in reforming the teams with large software and hardware suppliers and the irs. as we begin working with of the

department of the veterans affairs and small business administration to have strong capital qualified as a veteran of small business concern. we understand the credentials were important because they are increased focus on awarding the contracts to small business in order to achieve the small business participation goals the irs had solicitation can't give qualified concerns. in order to compete, we approached them to apply for the verification certification. we worked closely throughout the application process. for example, we attended multiple boot camps, presentations at which the representatives of the office or speakers and after meeting them we continued frequently and regularly often on a daily basis. they advised the aspects of the qualification and putting the establishment of the principal office in the zone and the hiring of college student

employees. because we believed the status would be significant benefit to the company we consulted on every detail of the application and plan. we have worked diligently with the enormous personal and financial expense to cooperate with the investigation and respond to all of the committee's request for the documents. so far we have produced over 20,000 documents including business records and e-mail communications, text messages and personal information. the characterization has strong contracting partners, lines of credit and good will among our important customers. it's hurt our reputation. responding to the committee's request for documentation i believe that we have address the issues and the committee. first it isn't true they've received $500 million in the contract it may or may not issue subsequent orders in reality the

strong katulis received and valued contract of approximately $50 million for which as previously mentioned 49 million went to the large business providers. of that amount, approximately 1 million to the strong council. last year the company lost park supplely and it's not that they had no track record of the past performance on the contract. the company the purchase had contrasting with the government and personal and worked with them for almost 15 years it is relevant to the work that we perform at the irs to the other companies are uniquely qualified to serve them based on the years of past performance event receive inappropriate treatment from the irs and competed for the purchase agreements and the contract order that was received. to my knowledge they had never received any contract award as a result of the inappropriate preferential treatment.

the strong capital has entirely open, truthful and forthcoming with the sba. because of the status it was significantly important to the company and we took extreme care to work closely in consultation with the office and sought approval and guidance throughout the certification process. strong castle has not sought or received unfair advantage in the pursuit of any government contract we are a responsible small business and unfortunately other companies are able to use the challenges as competitive weapons against us. despite these challenges, strong castle remains committed to delivering these results as a valued small-business partner to the united states and the irs as i have done for nearly 15 years. thank you. >> thank you. you talked about the experience of your company. how many employees to you have? in other words, how many at your firm have been there for 15 years? >> no one has been there 15

years. ten years? >> none of them have been there for ten years. >> five years? >> i don't believe -- >> one year? >> all of them have been there for one year or less. >> you made in the search of prior experience. the fact is the company you bought and the employees have nothing in common. i felt the company over 20 years. where is that legacy experience you are planning your company has? name and employee that when you bought the company they never did more than to under 50,000 of contracting made the and we he that is part of that experience that is with you here today. >> what time line, sir? >> you claimed 15 years and bought the company and year and a half ago. how many employees bought when you bought the company? where are they today? >> the owner left in september of last year.

we have a small company with two employees. one of them is still there. >> i want the public to understand you claim this experience and legacy, and now you are claiming that in reality the three employees grow one with the employer one of which is only with you today. quite frankly, use for an oath to tell the truth, the whole truth that is shading the truth pretty close to claim 15 years of experience with essentially no employees for all practical purposes our committee when we sent the letter to you and to the acting treasury secretary and you got involved in and back in february and march. we asked you about this and at that time you said there is no there there. do you stand by that in the case of this investigation? turn the microphone on, please. >> let me just be clear.

the information that we have seen about the personal relationship with mr. costillo. he should have recused himself immediately from any involvement whatsoever and in the interactions with strong castle. let me be clear also, and i think as your staff members interviewed extensively the procurement officials they stated on the record that and they were unaware of any relationship. >> by understanding. you can't have it both ways. you can't say you know what your people said when they were in the interviews and then start saying what they said in the interviews. so let me use my time more briefly. just this past monday you

indicated you were not been to cancel the to record 66 million-dollar contract to strong castle. am i understanding a few minutes ago as you are now going to cancel that and put it on hold. it isn't some important as to not be reworked. is that correct? >> i told members of your staff on monday was that we were exploring options. >> let's get to this part about the money to the when the federal government -- when you provide a contract to a disabled veteran, the irs as i understand took full credit for the hundreds of millions of dollars as though they went to that company. you didn't take credit for 1% going to the veteran of the small business in pozzato in the. you took credit for 500 million. isn't that correct? >> the internal revenue service

followed >> you are not a witness i am terribly thrilled with today because you did ignore this until we pressed and pressed. the fact is when they award $500 million, they do not do it on the net if you will skimmed off the top for a absolutely no participation in the delivery of services they kick the gross amount don't they? this is scored as hundreds of millions of dollars. isn't that correct? >> mr. chairman, the credit for the contract is for the dollars incurred and the dollars incurred our growth. >> for the american people here today, one of the fraud on the american people and for us we get these report cards talking about hundreds of millions of billions of dollars going to the

disabled veterans to get hundreds of millions of billions of dollars going into these zones we are trying to encourage. it happens to be a form of this, we are scoring 500 million elbe dollars and then somebody comes here. i am taking on you for reason. they try to say that it's minuscule. our indication is that this contract costs more than it would have cost if it had been competitive to the principles and clearly every sense that he got from what we can tell without having a clear principle operation and the witnesses did make it pretty clear they don't go there. the people who have real money don't go there to get a few college students show up and surf the internet looking for potential new contracts. that in fact was scored as hundreds of millions of dollars to help people in a blighted areas and to help a disabled veteran who turns out played college ball for years and

didn't lamp or have a problem until he got ready to apply for the special status. i have a scoring problem and i think my ranking member and every one coming and you didn't get a chance and i will go to the ranking member now, but bear in mind it is not about him. he may have broken a single rule. that is for others to determine under the wall. but we were shocked to discover we were scoring as the we are doing a lot of good for the disabled veterans, not people who turn their ankle and have no problem for 27 years until it is time to conveniently become a disabled veteran. we were scoring the impact of the communities when in fact that score is at best fraudulent we are scoring $1 million but writing it in as ten times or 100 times. >> our team mates make an

example of an agency that had a large contract and may or may not have gotten the best value for the american tax payer but certainly for the two gentlemen to the right. they are in a position where complying with the law they are not seeing you deliver the value appropriately to the american people for the set of events. >> i'm going to pick up where the chairman left off. help me with this. you apparently hadn't made a decision on a contract on monday is that right? >> we were exploring options and we were troubled, so we hadn't immediately canceled the contract because the software is critical to the mainframe operation. >> so what information monday

and this morning that caused you to see what you said and when was that decision made to sever their relationships and i think that's what you said. >> yesterday afternoon when we received the report from the committee and the printer at the executive team and i met and based on the e-mail exchanges that we are seeing in the report that we hadn't been made privy to and candidly based on the fact that mr. roh's most repeatedly asked by his superiors if he had a personal relationship with mr. costillo and strong castle and he denied it and i believe what we saw a exerted in the report has raised

considerable concern that we are in the process of separating the relationship. >> would the gentleman yield for a second? i only want to make sure that the ranking member understands that e-mail that you were discovering the read them before they deliver them to us. >> no, that is incorrect. that is in the e-mail that i'm referring to. we did provide e-mails in the internal revenue service. >> so the e-mails that you provided did not lead you -- were not enough to get you to feel that this would be a severing is that correct? >> correct. >> some additional e-mails came in. >> amazon said in my opening statement, it is text messages

from his personal phone to mr. costillo that hadn't been shared with the internal revenue service and that we were not aware of. estimates of the was the straw that broke the camel's back is that correct? tell me very briefly because i have to talk to mr. costillo. tell me how many certifications you all had done? do you know the last four or five years can you give us any idea i'm trying to figure out how unique this is. >> thank you comer representative. i can get you a full spread for the last five years of certification. i believe that we certified approximately 1500 or 1600 firms over the course of the last year. some of them were due to changes in the qualified census maps.

>> i reviewed your testimony and i am troubled because you seem to take no personal responsibility for any of your own actions. in fact you criticize everyone else but yourself. you even blame your problems on the above all little business and political environment of the day, whatever that means. i would like to read from the letter that they sent on may 23rd about 1 month ago notifying you that your company's status was revoked. then i would like to get your response. the letter says that you come and i quote, admitted that the records provided were false and inaccurate. i want you to put a pan on that. it says you did not provide them

with reliable and accurate records. it says you do not have adequate internal controls to be if it says you tried to claim that your program manager is not an employee at all but rather a contractor. it says you have an attitude with the accuracy of the records. you know, michael jackson had this long the man in the mirror. you need to look in the mirror. it says your employees can record time and work as the please. wouldn't we all like to have the job, luxalpha with. do you admit that you have false records to the sba?

>> we have measures in place. >> do you admit that you submitted false records? >> yes. >> how do you respond to other allegations. do they say that you only collected these and by quote after being confronted with conflicting evidence presented so there were not problems that you were identifying, were they? >> no, they identified them and we corrected them. >> so, let me turn to you. you were here representing, so what is your response, do you stand by your findings? >> yes. >> yes, representative. the stand by their findings on the certification was justified under the fact is. >> said, going back to you, what

do you say about them saying that you had -- you did not have adequate internal controls? what is your response to that? i want to give you an opportunity to respond. because you -- there are some problems here. >> they pointed out some inaccuracies and we put some corrections in place from the timely perspective. >> so you admit that there was a problem with the general controls. let me get to something that herman talked about putting it is extremely troubling to me. i told you might opening statement -- stila vince and the

faculty tell me how many other people outside of those that you brought an employee from the hub zone. >> not counting the college students we have one hub zone. >> sciu had ten employees. >> are you telling me that nine of them were from the university? >> we had approximately ten employees. about five of them are from the catholic university. one of them as from not counting the catholic students is from a hub zone. >> when do you how your that person? >> in may of this year. we just closed that in the committee and in the transcribed interview.

yes, sir. >> if you were in my district, the folks that you were talking about, they would have a job for the you unless they were a catholic university. hello? >> i would not agree with that characterization. >> let me ask you one other question. it seems clear from the evidence that you wanted to take full advantage of the program and not to help d.c. residents in the underlining neighborhoods, but to maximize your own profits during the interview with the committee staff. you said, and i quote, i knew that the hub zone was important being from the industry. so we went at that way. that's what you said. is that right? >> i don't recall saying it but i stand by that. >> finally, what does that mean? what did you mean by that? >> we moved our operations from

northern virginia to washington, d.c. in the certified hub zone and established our printable office there. that's what i mean by that. >> with the gentleman yield for just one moment? >> we have your interviews and so on. isn't it true that all these highly paid people that work on that contract live and effectively work elsewhere that the testimony of yours and your principles is that they don't often go to that principle location that in fact it is and mant full time and that when it is it is mostly by college students that are looking for other contract potential and not executing in the contract but you are accounting operations and the key functions and somebody would think of it as corporate headquarters were never located in that building? >> there were a few things in there so i will try to address them.

>> the principal workers work on the government side. they don't report to the office like other companies. >> i am on borrowed time. you don't work out of that office and your wife doesn't work out of that office. as of the previous individuals that were from the previous company don't even live in the area. one is in boston and florida that in fact when we look at eight, the contract so far until a few days ago basically college students showed up there and served a few sites which wasn't a direct part in the execution isn't that true the headquarters was in the police knew the business executing these contracts. >> you mean me? >> you, your wife, anybody ever get a college students. >> i worked out of the location

and my wife works out of our home. >> in the richest county in the country, right? >> i think i read that right attending to the five children. four of them are under the age of ten or under to the college students or any other reports to the washington, d.c. office which is why the established that as our principal office. we didn't have as you mentioned the employee from florida the executive who was there and retired to that area and the gentleman that you are referring to in boston actually worked on a top-secret facility in the air force base. so, that is not located in boston and on the crime site. >> based on what the chairman said, i want to remind you that you are under oath and i want to ask you this question to the don't you think that you manipulated the process for the purpose of this program?

>> i don't feel that i manipulated it. that's why i said that. >> you admitted that you lie with the accuracy of information. >> we provided inaccurate information on our time sheet and not on the payroll statements which we have corrected cents and put the process in place to correct them >> your title is a deputy commissioner from operations aboard. so you ever see the procurement process and personnel involved. you gave a statement waiving the flag and ensure there are thousands of people every day who do a good job but

representing people in the district in florida and anywhere i go i hear more complaints about them i think you have been in a meltdown of scandals and the targeting of certain political organizations. we held a hearing a few weeks ago on the conference's gone wild, spending without the irs. i think of a lawyer today there is a story about credit card abuse. i don't know if you oversee that we disconnect that is a part of our organization. >> that again is an embarrassment. this hearing on the procurement process that again has gotten out of hand i think that we have lost great confidence and probably for a very good reason.

eight sounds like if they were to gain the system would you agree? >> based on my understanding. >> let me ask a question. before the committee contacted you about this, have you or any other employee of the irs, have you been contacted about what was going on with mr. castillo and mr. roseman? my question is before the committee contacted you on a matter of this relationship where you or any others aware and notified something was going on? >> no, sir. just in the last few days something is going wrong.

it is gained by this player. >> it is a pretty fundamental principle that we have certified. >> you agreed it appears that you also gained the veterans administration. we want them to have some special preference and standing. the disability was prep school, was their anything on the active military service where you sustained disability or injury? >> the injury that i sustained was during my time at the prep

school. >> that is my question. did you sustained an injury or were you disabled during that time? >> and active military service, were you in a combat or at an entry -- >> it was during -- it sounds like you gamed the system, would you agree? yes or no, did you game the system? ..

or other contacts with with the mr. roseman, how would you sell cell phone contacts? were they few, many, texts? a few, many? meetings? a few, many? >> i probably met with them over the last five years about ten times or so. there were text messages that we provided as part of a investigation. >> okay. mr. chairman, he testified, again, a few times between may and october you and mr