to e-mail i want to know everything you have paid yourself and your bonuses and her diem i have to help america kickstart that is what you have to do as a sta country to get somes credibility back internationally. thank you.t me >> thank you. i will start to ask the question. you heard him just say u.s. soccer had to know. so the question is what it did u.s. soccer know and what should you have known and in particular with the indictment of racketeering, bribery, wire fraud and money-laundering, what is the reaction of the u.s. soccer federation? . . does u.s. soccer federation know about concacaf in similar circumstances.

it is perceived as the most corrupt of the very regional associations. what does u.s. soccer federation know? >> thank you, senator. >> let me interrupt, you speak for you personally?ht >> no one have run anything to my attention regarding corruption. that being said, they're are a couple of things i would like to.out. mr. blaser has not beene to involved since 1986. been memb he has been a member of cocky cast, but not us soccer.blatand

in terms of mr. blatter anderctiv mr. warner's activities i would like to.out that those were private individual, secret transactions that with the four resourcesfullars to b resources of the department of justice and fbi chick forwe a s four years to bring light. we are a soccer organization with our greatest focus onhicountr developing all aspects of our support. i wantedi wanted to.out that private transactions also were for regionalt is aimpo sponsorship and regional broadcast which has nothingould to do with us soccer and our rights and our tv andk you. sponsorship which is an important distinction. >> let me ask a follow-up. when the us department of

justice attorney's office announced indictments you and your colleagues would bewhen u.s. departme surprisednt that they're would so be some activity occurring r cuemack's. indi >> sen., i was not not aware of any part of the investigation. >> the fact that someone wassed indicted surprises you. >> i just was not involved. arrested focused on domestic cy ber business.having >> it may be confusing as toexple. why we're having a hearinge relaonsh

soccer world cup.imony th whatat is the relationship between the testimony that we are hearing the corruption bribery racketeering the findings that your organization is made. t intimately tied to eachy when fifa other? made t >> thank you for thehe question. at the end of the day when the decision wasld co made to grant the bread for onsibi the 2022 world cup it took >> b responsibility for the humanatiol organiza rights impact of that decision. >> how can you say that? why is that true? >> fee for has a responsibilityns under un

principles to ensure its a bl operations do not turned a blind -- blind eye to herrettclea directly involve serious human rights abuses and it is clear human rights abuses and labor rights of ourshows that t rapid and qatar and they have yet to do anything serious are substantial. the question remains why the for did not go more deeply into these questions of labor exportation in then process. it has been said that in2026 with a 2026 qu process they will incorporate human rights concerns. why has it taken until the 2026 process? >> let me ask you, is themr relationship between what you discover your testimony and the testimony that mr. berry has described the conditions leading up to the2. preparation of 2022. how do

they relate. >> take a step back. us soccer has its failings. so the leaders of english soccer. they should have known better than to everwe a been for that world cup bss t because we for that world cup because we all no in the an business that you have toe the glis pay to play. i don't think the us takes bribes. you don't get in ain a rwh race where you will get bribed of the planet. let's bear that in mind. an it was a dirty decision to put the world's and it was boiling. people would die ift blatter there was a summer tournament there. fee for new, and you have to wonder why certain people voted for the world cup to go they're. moving and it has got iten worse. knowing that cannot happen

stakeholders. allow -- and now moving it to november december of the world cupli year. if you want to die al young come to england andubs standout signed arsenal manchester city, manchester united, liverpool is the fans come out and say we'reck warner to going to stop you having football for seven weeks. i hope it is a painless else's death. you can't walk int so it aw someone else's sports culture and take away, but that is what is being done. who is questioning him? i do not see any of the officials from us soccer saying no, no and no.ill hao we're friends with the english and the german and the dutch and all the otherfa. western european federations th want to stopat the game because of the dirty slime bags.we that is the background. the money went somewhere.nvestiga but it went in the lowlifest in voted for something that is ending up at the death. i would say one other thing.

we have a saying in european ball when officials and administrators can arm up what happened. i don't know. oh, yeah. when they were hheaded that big we younger than motivated thatt people at football too many times. because th the scandals to 2,002e againacts in 2010. a richly documented. racketeering was a way of lifely. apparently that is never reach the chicago offices. >> let me turn to sen. blumenthal. >> thank you, mr. chairman. i appreciate you being here t today. i today. i understand is your testimony you have noste is knowledge about this corruption before may of this year and the departmentis of justice issued its indictment is that correct?

he had no knowledge? >> that is correct. >> did you have suspicion? >> they're were moments i would describe if i had a level of discomfort i wouldt t not participate in just get myself out of any situation that offered a level ofld discomfort. >> they're was aevidence because you to removehe yourself from discussionsve and meetings. >> i would not say evidence. i think it was the comfort level. >> when did that begin? >> i could not pinpoint any time. particular time. >> years before the indictment, correct? >> i would not necessarily say years. it we will be hard to pinpoint the time. >> months? >> i think it would be fair to say greater than months. once again it we will bestigate? hard to pinpoint exact time friends. >> did you make any effort to investigate?

>> they're is -- they're was called facts. i would haveingn brought that to the attention of the appropriateou people. there was nothing in the way of any fact that i could take anyone else and de obviously would consult to outside counsel, but that is as far as i would take because it was something that was as i said,o, discomfort level. >> but he made no effort to investigate and outside counsel did not tell you to investigate. >> no. i passed on my level of discomfort. >> would you agree that us soccer acted inadequately to investigate or prevent or stop the ongoing blatant 20

criminal wrongdoing? >> i would not say that we would do it differently. our focus has been -- we really have two choices. one of 209 national associations command we have really atth the end of the day to find ato way to participate in aate in manner consistent with our mission and core values and think one of the ways to do ways that is starting in 2013 weinallyad 2013 we finally have someone that was n't us soccer. that was a start. >> let me just interrupt. interrupt. se what you are stating is he ta is fairly well-known.als at very bluntly why those officials did so little

particularly in light of thend lack of comfort level yound have. what is the explanation? >> i was aware of some levelf of discomfort but it was all in general the general feeling. i have no hard evidence andsecond

c we wanted to continue to participate and tried to and w influence the organization of one of 209 members. the 2nd choice is topped out and pull out. no with that comes a serious ramifications in the competition for unity and it has far-reaching ramifications for us soccer in the business model. which count we have through ownership of our professional ranks in all three divisions invested delop hundreds of millions of o dollarsf if not billions of dollars bill this.over the last 20 years so that we can continue to build and can be on the field in such a manner that we just a compass, women suffer from them. i those two options but was they're not a 3rd? mp been asking questions, beginning corey will beging

shining a light on thebegian employee also called again essentially holy account officials who might be guilty and we now no they are wire fraud conspiracy, money laundering, money laundering, bribery that directly impacted the quality and integrity of thei sport that you are responsible for the.e f >> well, we did support the 2011 ethics committee as i mentioned in my opening remarks.commit we pushed for fullte disclosure of the full reportsh. theythey said front and center with 4106 nations that nominated prince ali to run against long-standing with great peril for the chance of hosting 26 and the ane having the fee for executive seat we continue to feel that that is ae proper course of action to

perform fisa.cour and i want to make clearifa. that my comments are directed against the collective you not you personally for the executive officers, the board members the organization of us soccer federation. and. board and i want to ask you as a of matter of fact why the invitation was declined to be here today.ti to >> when the notice came of the hearing we anticipated p rather broad and specific i questi wons potentially, andte it was determined with counl outside counsel that i would appear before the senate subcommittee hearing. >> what is the reason? >> i think iti think it was tt a comfort level that i have more>> i knowledge of the had more

knowledge day-to-day operations in the event that there were questions related to that. >> don't you think he has an obligation to answer theas questions we have been directing? >> sen., if you are not comfortable with my answersansws we we're more than happy to respond in writing yourresp staff. wri >> we will you commit that mr. july once it is questions?>>l, d >> i we willi will certainly wi do my best. >> thank you. a couple more questions. my what is the continuing role? >> to the best of my understanding they're is a special meeting the 20th ctinu and 21st. >> monday and tuesday from ere which they have to do afor four-month notice we will forward and they we will be a knew election for pres. >> we will us soccer take

positi the position that he should be excluded? >> our position was pretty >> our p clear when we in the last c election nominated and supported principally. e. i do not no who the candidates are. i'll thinkssur anyone does. rest assured we will look at at all of thed candidates on that platformplrm for human rights to corruption to reform before you make a decision.or >> one last question. don't you believe now that us soccer has a responsibility to do more? it sounds has been deafening in many respects to expose the wrongdoing and condemn it. eose >> i would like to address her answer your question. i l think the real prime example of what we've done is the recent reform. sweeping reforms fromthose e s we independent directors to greater transparency. we

think that is a footprint that we would like to bring forward recognizing that wezing that we are one of25 on the the executive committee and 10209 nations within the fee for organization itself. we pride ourselveswe pride ourselves in our leadershipso and understand at times the capacity that we have for reform.. >> my time has lon g expired and i am hopeful we may have another round of questions.e >> thank you.or. follow-up on some of the questions. how many years have you served as ceo forha secretary-general of us soccer? ashe >> roughly 15 years.ceo >> fifteen years. and i understand mr. blaser dn't

the indictments and 14 others. is that correct.wa m >> i cannot tell you the exact number. >> more than ten. you mentioned the cold hard c facts not having cold hard times facts and that time having discomfort. and over 15 years -- and we will get to the happier part. congratulations. recognized. a tremendous a competent. >> thank you. but regarding the discomfort that you felt at times stepse back because perhaps that a l wasthey're was a line cost.sed,we if we look at what theset indictments read the bribery racketeering, so forth, can you tell me about a time when you experience discomfort and step back because of what you received? you >> the discomfort was kindscomfort of in generalities. in terms of how mr. warner of being one of 41 nations 35 of the nations how he

ran a meeting and went through an agenda and have" and versus seal votes those those are the kind of discomforts that i would -- 118 to some level ofl o discomfort. >> and india distinguished 15 year career leaving the organization how long agohin was it when you 1st don't happen started something perhaps something is wrong? perhaps a few baltimore's clubhouse they're is discomfort. looking at the indictments, these things typically don't just happen overnight. when did you start having concerns? >> hard to pinpoint. the generalities related to the manner in which jack warner and mr. blaser ran they're meetings and how ithe poin think us soccer would be

like to have a greater influence been one of 35 voting nations and mind you, mr. warner came mr. warner came from the caribbean and 25 euros 35camerom those were from the caribbean, it just gave me a vo level of discomfort that we were not going to make progress in terms of transparency and some of the things that i would haveuld ve p preferred as to how us soccer operates. >> did you ever express those concerns? >> i did not. >> there a reason if you are did seeing these issues knowing what we no now why you mightblzer? not have confronted him perhaps asked why he is doing what is doing? >> generally speaking it falls into the two choice geral equation framework. one of the things we try to

do is host olympic qualifying and host events. we have to at times balance that with the potential to opt out. mr. blaser i just felt thatwe we had other things to do i could help build ouri could help build our support. they're was concern that if a product to his attention that i may feel some level of discomfort in a different way. >> did you see other peers in experience discomfort in other ways to make tried to confront mr. blaser? >> it would be hard toias, categorize it that way. iffe and when we reached out to talk to other national associations from other federations once again we were one of 41 or 35 voting members. and they're really were not

anybody else -- wasn't anybody else that have the same for the same feeling i did on a personal level we did is an organization. so we operate as best we could within the framework. once again framework. once again we are in concord an calf by virtue of being a member of fee for and felt that we had to find a way to participate, work our way 2 through and are fortunate think enough." 18 to 17, electedhe to the expo seat in 813. and we think that was a and theard thing that was a step rightanat i direction, step form, and that is the model that we int felt was in the best interest of moving as put i forward in a difficult andic tricky environment. >> one final question i will wrap up. wrap back on women soccer, i have

have to note, the s a most-watched soccer match inte us history as many television viewers is game seven of the 2,014 world u. series.tion a i was looking at the financial numbers with the united states soccer federation, and just looking at the investment in the men's national team versus the women's national teams as a father of two sons and two $2. you probably see where i'm yo headed. i'm this pending on the men'sheaded national team was up 50% this go for june over 13 to me at this pending for women soccer went down 13% ofst ioad fiscal 13 verses 14. just inre w broad strokes, any reasonce why the men's soccer would have beenopen up 50 percent the and the women's down 13?men's >> let me 1st say thatwe'r thank you for your comments

about obama's national team. we are quite proud of our track record. your recognized as a worldwo leader. and i give you a few small facts. us soccer writing campaign is the reason us women's soccer was admitted to the olympics and continues to this day. we are the top.we team in in the world by far th the one side.m in 23 we have to do as well the winnings, they're were no waitswarnings for any team. first, 2nd, 3rd, 4th quarter. we continued to push fee for in the right direction. to related to your direct question is i was 2014 ii don't have the exact numbers014 in front of me, but it couldth be because of the 2014 men'sit

world cup and it would create more activity. >> what i was something, but it, but it might be worth ainue to follow-up. hopefully we will continue the men's program is growing you are so proud of the t women do and want to make m sure we continue to invest.hat >> as the father of $3 we are proud that unfortunately were to fail professional women's leagues three years ago we took it upon ourselves and run the women's league and found 25o to 30 women we are providingprovid a 1sta 1st division women soccer league for 100 women's professional soccer players and think with the success we had an candidates in visio we while additional ownership and investment. >> we are about out of time. ver

>> want to follow forank questions.follow we are very proud. are you aware that they are putting together a's team resolution that has been put retion in for the senate asking for equal compensation between men and women? betw >> i am not aware. >> be ready for it. and i just think given the us emerging role and given what we have seen in themade and last few years with theome corruption i think thatit while i appreciate that you say changes are being made ta them i don't think enough changes are being made andm have additional dollars from what the senator was talking about. the us women's team for the victory was compensatedhat' tulane dollars. >> dollars. >> that's correct. >> and the men's team, the germans team was compensated so it's

2 million 35 main dollars. >> i think it was 32. io >> thirty-two million. okay. 2 million versus 32 million. okay. 2 million versus 32 million. w the losing team in 2014 which was the us men got 89. >> of whom was 9 million. >> million. we have a situation where>> o the losing team actually out more than four times theng amount of money is the actlly winning women's team.let m p >> correct. let me find out. the winnings just as a.ofin reference or background, there winnings payments go to the federations.nt the paymentsthe payments are our players is guided and governed by separate collective bargaining agreements. that is one topic that is important. men >> just to go back.a women sports dog as muchmetithey attention of you have awos situation where they're is record attendance and tv ratings.

foxpro to the records. making billfold file therds inhe most-watched soccer telecast ever in the us male or or female and yet you have thisave disparity, 32 million versus 2 million. my argument would be thatea certainly the us should be taking a lead in pushing for more equality. in tennis they have a quality. from than last year decided to have equality and prizesy command it would seem to me like wimbledon seems pretty su old-school and soccer is supposed to be nouveau and upscale and just a cool, progress in sport and get you have this disparity that y i think is outrageous. pled

>> we do agree and we will >> i continue to push for greater payments on the women's side without question. >> i appreciate that. couldof you comment on why thebackgr women's world cup is played on artificial turf when the men's world cup is played on grass? >> a little bit of background.background. in order for canada to receive the bid senator they went through the process. as part of that.bi from our.of view that included playing onclud artificial surfaces. it is not something we liked. we afield to no avail. when our players came to usca and wanted to participate inen some legal activity we fully an support of that. at the end participa of the day postee the l question: is team. this is what we are facedve with you want to move d forward and play are doing i not want to play.eced the women unanimously decided it is not perfect. le what we don't like what they felt a

was a lack of rgrespect webu will forward and in many respects everyone would say we're pretty happy to forward under not the best of circumstances but coming away with arthur world cup is worth the investment. >> and the salary range, iumstces went with dad. i just got this. men want, the minimum salary is 50,000. >> 50,000 for a male player. >> collective-bargaining agreement? >> 6,030,000. >> am not sure the reference >> this is professional soccer. is >> yeah. i can't speak to major league soccer. that is not governed byme collective-bargaining agreement. i can tell you the women's the women'sna national team players that

play and only as well above $6,000. we and to play for there country as well as there clothes as well aboveell $6,000. more than happy to follow upi'd and give you more detail.o >> just my view of thisu me whole thing going back to the corruption and. everything that has happened i'm sure there's more. going through all of that i find the whole thing a.and i'm glad these cases are being pursued, but it seems in general and the reason ion i bring up this issue is the us has had a shorter historyshor of international soccer stage but has significant paul internationally particularly with major corporate sponsorships of us companies. and so i am advocating here is using apple for not just reform so that andl. transparency in thehat international government structure so that we do not see this corruption and

tickets taking care of thattacare also so that when i get treated fairly and equally. equally. if they can do it wimbledon that into a soccer. >> thank you. can i make one pointof? wi we are seriously thean d strongest advocate for womenso soccer in the world. they're were 24 teams in this year's world cup.ld in 2011 they're were six. you are strong you areere strong advocates and took aon leadership position to expand.comp on the men's side there are 32 teams greater number ofs and a di games and the bitaff bit of a im different commercial impact continue to push to expand the opportunities for women. as a father with $3 rest assured itis with me oin everyday. >> you can imagine. >> absolutelyle.

>> it has been in the public>> a bit but the women for playing in the world cup and competing this year will receive over $300,000 just as a.of reference. >> i appreciate it. thank you. thank you. >> thank you. let me ask mr. -- establishment. you>>et establishment you heard the h testimony of mr. flanagan indicated that -- hours ofd th i rises testimony may involved th in the domestic side of the the issues. fetion a and i think his testimony te would be -- would reflect that he and his colleagues,co no one reported any concerns or knowledge of any corruption, bribery, racketeering. could not -- i think his testimony would suggest that

he had no -- he was unaware of the activity that led to the indictment, the indictments which suggestsugge to me -- and i do not no that exactly what mr. flynn doesn' father he is the ceo.xact what is it that needs toe's th change structurally that this kind of behavior be number of the us soccer federation? what is missing?wn b >> thank you for that question. you have just been the nature of the beast. see file is like no othereno organization that i have had an opportunity to consult with on issues related to other governance and compliance. ii want to correct the statement that mr. berry said earlier. fever is not an international organization. it is not an ngo. is not

corporation. it does notan follow any guidelines for standards. what exemplifies fee for is a small clique of powerful individuals whoseue self-dealing was kept very secret at the top level of the organization. it is nof- surprise that ant individual federation like the us soccer federation did not no, understand what was going on. this organization, as pointed out for the justicet department had systematic corruption and for years now te for for over ten years in the midst of many scandals aes in dealing going back before ten years whenten years when mr. jennings was aggressively reporting on lack of transparency and accountability of thentilit organization answer to one manman and one man alone command. [speaking in native tongue] that control this organization with an iron fist and an iron grip. and that was the pres. of a the organization, said code

blatter. what he wantedst someone to no something he would let them no.te otherwise they're would be in the dark.w it is discouraging to me that president blatter sits in that same see today. let they're be no mistake. he has now resigned. he has he has said he will step sa aside when the election is called.st, in he has said twice in the past and recent history thatic he would not run for officeis again and change his mind. i'm ve i am concerned that he wece t will dhao the same thing again. six months now he will say the reform initiative is now complete.nthsm i have succeeded, and the federations from africa, asia wanted me to continue so i have decided to stay as president. that would be the worstthi thing that could happen for fee for.here

>> therefore, in your opinion but testimony ishe that the best thing that could happen to clean up his work the departure of mr. potter. mr >> not only him. they're are dinosaurs and >> not the executive committee that do not believe in reform.lieve let me say this. we areay going are going to see next ne week at the executive committee meeting fee for the executive committee adopt new forms of reforms that we recommended yearsthat ago to be adopted and that were put aside. it is not what is on paper.ot ws on it is not going to be the's n goi compliance program, not going to be the change ine government structure but the culture of the organization valu that has to change. and you cannot have a changing culture is your people within leadership that believe in ethics and values. >> let me ask you this. mo what is the motivation for

that change to occur? what needs to happen through the us soccer federation, others around the globe, need h today we're doing here have arou any consequence?hat what i assume the opponentconseqnce to change his financial. they're is apparently significant amounts of money that's around fetal and those involved in what youis describe as a culture. howwh is it? to what steps need to be taken to overcome that culture today, tomorrow, and into the future? >> we need to build a coalition. number one, the sponsors have got to take. not only the sponsors but the media outlets a bit on meteorites have got to take aedia a stand. what an individual athlete. tiger woods or ray rice does i something wrong the 1st wrong, the 1st thing that happens is sponsoredst walks away from that relationship.

fee for has been the subject of scandal after scandal after scandal command no sponsors have taken the leadrpport in withdrawing there support based upon the scandals. so the sponsorships have got so the to be -- the sponsors and the media outlets have got to stand up and say if you an don't reform will walk away. the the federations and got to come together doesn't similar cultures, beliefsaccountability transparency, and accountability, and accountability, and i believe that is the belief of the soccer federationt t have to come together from the bottom up and force change at the top and t finally governments many governments provide substantive -- substance to sports federations, not necessarily in the united states and overseas governments spend millions of dollars in taxpayer money supporting domestic andni international sports organizations. they've got to intervene and

say that the time is right for change. even here in the us while we do not spend taxpayer money on supportingm domestic sports organizations, the nfl, we provide them with tax-exempt status. i'm sorry, with theexce exception from antitrust law ich which is worth a great deal of money.money. and so governments of also got to influence sports organizations to undertake transparent and accountablethem. governance. >> let me ask what needs toto transpire? what needs to transpire today, tomorrow that wouldou give you hope that the corruption that you have described would be resolved internally within fisa andfi perhaps your answer basedrhapyour a upon your testimony is fisa has no future. is that different?

>> very mild. fever has got to be resolved. they don't want reform. l it works fine. get arrested. went on for years. the operation went on. iause'm would like to come backabou because i am quiteut astonished what i here. a reform meeting.re they have had one.foeti the 3rd.hird they had reforms forms. meetings, placed transparency and border. from traffic across what marketing company and a fewe years later the fbi is going can use of this way next and now there doing it again.

in 1998 to have the document in they are so corrupt. do y the united statesthe united states federation has been fe cowardly be as little peter cowar jenkins not a powerful country and begins tobecause the stand up and said jack is warner is stealing tens of o millions of dollars that should be developed the of sport in the caribbean.houl he had the guts to say it. surviv turned the poison upon hime to and he just survived but he had the courage to do it. >> let me ask. in your testimony i just made note. this we will be a difficult difficult for you just said they testimony was theto encounter potential political impact that youtimony indicated you opposed thenter reelection of mr. blatter. o

>> i did not here you. >> you indicated the usatr. soccer federation opposed>> you voting for someone th ?-question-mark chain. you >> be the president correct.he >> in your testimony had something along these lines which could have caused potential political impact and arkansas to host theto h world cup. thatthat suggests to me that there is an awareness of the decision about world cupthat soccer match is going to beci about played as you admit not playeds necessarily based upon the merits.on having a consequence on siteif y ou selection which suggests you are aware that something is not above the board or am i -- >> sorry. i think it reflects management style which is

what i was trying to impart. as others have said a lotther of influence in the organization and taking a th position to not only vote ou openly but to nominate and op work very hard. we no that that may come a with some difficulties down the road in terms of seeking dow support for hosting the 2026 world cup as part of his men. >> thank you. >> thanks, mr. chairman. mr. jennings would you agree based upon your experience that american corporate sponsors like nike, mcdonald coffee for the coca-cola have been in some sense enablers?

>> inadequate they have had terrible attacks of blindness seven day. for the rest of the world w has been categorizing, listing corruption and conquer cast and documented. isn't the sponsors and said we only support the world cup ould not fever. isn't that tough and brave. >> maybe i should amend myuld be question to say they certainly would be enablers now if they continue to beued sponsors without insisting on reforms. >> i think -- what they -- would their -- they should with withdraw unless the money, the money should be withheld until something radical happens to clean up the sport and interest of theclean grassroots. >> in fact, they're is in precedent for example in the way that nike tiger woods following song revelations d w

and public disclosure. >> that is a very limited case which got huge case publicity because it dealt with the proper celebrity that gets a lotau of tabloid coverage. of >> whether it is private a life and moralit y or in this instance public corruption, it should be addressed. have >> hopefully yes, and they have the capacity.ve they have the wealth. they have the brains and experience of offices from and beaverton to atlanta and i chicago and i have not done anything, and they should be to trying to not justify but apologize because mr. flynn has talked a lot about the organization not particularly soccer. not particularly relevant toa the issues at hand. otba nevertheless the moms and dads for my granddaughter place for upon the park infif seattle.the you noyou no the sort ofhe

people and talking abouttalkin families, lower level, not just the stars.ars they have been betrayed by organization that sounds itself in the camera brilliant women and men. without actually doing to say we are america. briiant >> would you agree that american corporate sponsors of turned a blind eye to the alleged human rights abuses at potential deaths of migrant workers involving human trafficking in thema world post nations? should they have not connected they know not actually have done something. >> i cannot that. the answer is yes. r. >> mr. berry. >> they're has definitely been a startling lack ofrr attention by many parties involved to the serious problems of labor exploitation today.re

thousands upon thousands of foreign migrant workers arerible forced into a terrible, terrible system that can lead up to forced labor in some cases. and it is time for theom sponsors of the world cup. it is time for the contractors in the businesses involved as well as those government itself to start taking action in and doing something about the slave risk races. >> and they can have an h impact simply by virtue of the power of the person dollars and investment. >> the sponsors of the world cup can definitely play a serious and constructive role in covering the labor rights crisis that is happening in the laborpe l exploitation that is plaguing the construction of the world cup in 2022. >> do you agree? >> i do agree. look, the sponsors and tens of millions of dollars to protect there brands.

they themselves adopt governance programs and compliance standards that are best practice recognized globally. whatwhat does it say whengove they are willing to partner best with organizations that haveganizas the record that the fans?rd tha >> and do you agree with the views stated? >> we are happy to have the sponsors weigh in on thise're particular issue. as a.that is worth making from the us soccer sp perspective these things come to like welight we have spent a lot of time withth sponsors explaining the difference between us soccer, copy cast, and fever. the sponsors welcome that opportunity of discussion command we are happy if they were in. >> in your view

mr. jennings, is free for salvageable? >> salvageable? no, not at all. the corruption is so deeply embedded that if you cut thenot going head of the snake there is to build the wriggling about. america has to with bunc o its moral values join with other countries and justexp say, you stay there. we're out of here. we're not goingas to be contaminated by sitting in your meetingsse with a bunch of organized crime experts.ti it was good to see your fbi for your department ofth st justice has a system like that. i saw that before. i'm thyo glad that they came aboard.o you don't go to mr. john gotti and say there's too much heroin on the streets dealt of new york. w the could you cut back.fia thank you. a couple of keys of the street. thatstreet. that is not how you dealt with it. new line after them. >> is fee for salvageable? >> i would address that byif looking at the recent

reforms. they have been sweeping. they are real. i would like to give it hope that that footprint could be used. i'm not an organizational expertkeop but i think that is. one option. and. and i can tell you the weekend of the women's world cup final they're were two other confederations from around the world are tell presented in vancouver that om a were very well aware of the sweeping reforms. repr they were pleased.erwell and hopefully that footprint is at least one step in the edge -- excuse me, and theeane short-term to reform the for but apart from with comcast is done have you seen anca tangible, meaningful effort to reform?

and is that not have to happen for it to be salvageable? >> i have seen attempts. unfortunately them, but short.thav and we continue once again as one of 209 nations toand build coalitions and work with like-minded national associations. we think given our structure, who we are that is a good model for us to move forward. we're open to other discussions as always and we will be doing so with theoing candidates that are all running for the knew -- for the presidency moving forward.encyovin thatg is going to be anwell interesting opportunity to see what platforms the candidates bring. >> us.unto s >> us soccer withdraw from the structure that supports fee for if it fails to takeit tak meaningful reform? meanin >> as i said we hgfave the two choices for participate or opt out. opt out is a difficult and severe -- has severe

ramifications to our model for the sport. so i would like to think that we can push for reform given the knew platform and level ofmo for intensity not only from the u.s. senate but from othern parts of the world that feel an now is the time to make thehe many changes that need to bear made in terms of.e >> well, aswell as a fan as r well as a public official,>> as a parent, let me suggests that sometimes in action and silencing of complicity. there we willthere we will t be a.where in effect us soccer is complicit in the ongoing lack of reform for action.action. you may have no directcome pol control, but i respectfullyic suggest that maybe something you want to consider moreat may seriously. let me ask whether you will

commit to us soccer conducting an independent you inquiry has happened in the wake of the salt lake city scandal. lt >> sen., we will cooperate with any inquiry that is brought to our attention.rate >> i am suggesting that you'sroug take action, the us soccer take action to conduct the inquiry. you certainly have and the resources, and againresources, and again, i respectfully suggest you have thein responsibility. >> one of 209 it would be safe to say that we will need the assistance of help. we're committed to have those dialogs andek discussions. >> committed to seek such an inquiry? >> committed to work with w other national associations to reform fee for.

>> my time has expired. i haveexpired. i have additional questions, i have to go vote. we're sort of staggering our terms.ering if my chairman -- if my chairman will take over and ask sufficient questions iy will see you again.ago >> thank you for your patients and b i think they're wa thi are other members who wish to join. this may turn out to be a last round. there'sof another committee hearing later this afternoon. let me go back to an issue that i mentioned in my openinggovernan

statement and explore the moment ago. i do not want try this issue of loss of lifein to get lost in the conversation about governance. i think they are related so i am not trying tomaketain prioritize one over another, was to make certain that as a result there is an awareness by americans, by the world about what you by have discovered in your investigation into the activities leading up to the you games of the future. let me ask you again if you want to describe in more detail the findings of what is transpiring and what your request would be for us to make certain that these practices come to a conclusion of what role we play as the united states? >> thank you, chairman. amnesty international's report promising little delivering this is the latest report that goes in to the massive problem of labor exportation. the problem, you know, as we i have heard starts with lawsth that prevent migrant workers leav

from leaving their co employers, leaving the country when they are put inseeven situations that arise to even the risk of starvation but it goes beyond that. as you alluded chairman, within qatar today they're are serious health risks and the lack of accountability and due diligence when itily a comes to the sites forilig workers, foreign migrant workers are doing the hard work and putting in theo sweat of all of the construction, the hundreds of billions in construction that are going on today.toy. there have been numerous reports about death. the governments of india and nepal reported that in 2014 of 400 nationals died in a hostof the of ways and for a host of reasons. what is highly problematic not is that the government has not put in the effort to do a serious investigation as to how foreign migrant workers are dying and why. this lack of any sort of investigative interest or effort by the government

reveals potentially a lack th of interest in finding out the answers as well as the next after following the o problem. thethe government is to takeas wel t substantive steps to investigate the deaths happening, deaths that have ended the lives of manyoreign foreign migrant workers who came from many parts of the world simply to earn money mig and is in the money back home to communities and families in poor parts of the world where they do notd wh have the employment opportunities they need. .. opportunities that they need. >> let me ask mr. jennings an additional question. your our witness from outside the united states. what influence do you think that america has in regard to reforming fifa. >> i'd rather say change. well i certainly learned today that america is ary that's terrified of countries

not agreeing with it. >> when the united states olympic committee realized it had a massive moral problem with it's crooks it didn't go ask anybody else. you don't have to go and ask the rest of the world is it all right if we have an inquiry in america into our own people. please. i find this very dispiriting about america being gutless. get on and do it. don't ask permission of other countries. it's your country and you have screwed up with fifa. i hear talk about reforms. i don't believe it from concacaf? is horace there? the same bunch of crooks there for 20 years. but you can do it. it's not that you have nuclear weapons that matters. you've got the sponsors, you've got the media and the moral power of this huge country and western europe will be straight

in and say can we join as well please. they just need some leadership and they're not getting it. >> mr. jennings you must think there's sufficient value in this hearing that's taking place right now here that you came from britain to the united states to testify. what do you hope comes from this hearing today? what can you expect? what would your desires me that we accomplish? >> as we were saying earlier the independent inquiry similar to the united states olympic committee is first essential because then you look in the mirror with u.s. soccer and you see where you went wrong. that inquiry could go back into how you were blind and deaf and dumb over the concacaf problems. america doing that would have other countries saying we can do this as well. so i would hope that you do set up independent not with the

permission of them but your own commission of inquiry. i think that's the first thing. the second thing is this farce going on, blatter is going to set a date possibly for a congress. i will tell you that there are no congress facilities booked for the rest of the year by fifa. he's going to stay there and wait for us all to get tired and go away. it worked for him in the past. only the fbi can sort him out but you can walk away or our cowards and weak and have no perspective on the rest of the world. and i don't think that's true of america generally. >> you were -- let me look and see the right words member of fifa's independence governance committee. what didn't occur? it appears to me that there was an effort at changing previously. you were involved in that effortt it didn't happen. is is that an accurate analysis and why not?

>> well it is an accurate analysis. we came in as a group of independence compliance experts and sports experts to look at the internal checks and balances of fifa. to look at their compliance and governance procedures. we did so. we made a number of recommendations. many of which were adopted by fifa. for example establishing a new ethics committee with two co-chairs. independent outciders. one to do investigators and a judicato judicatory chamber. we stiededdecided an audit chair of fifa but when it came to recommendations that i consider to be no brainers because they are common standards around the world including term limits for executive committee members and

the president. including transparency of compensation, to this day no one know what is the president of fifa is paid nor what the members of the executive committee are paid. when it came to having them create an independent outside body to ensure that governance and compliance programs that we recommended were being implemented, they turned that down as well. so a number of key recommendations that might have made a difference were turned down. having said that i want to emphasize that i don't believe even if they had adopted the recommendations without a change in leadership without a change in culture, we would have seen much different. >> thank you. mr. flynn, the u.s. soccer federation has a greater role to play. i want to make sure that you have a chance to tell us anything that you would like for

us to know to, in a sense, set the record straight if there's something that you feel needs to be said and also to ask the question is there something that you would ask for us as we try to rely in the efforts for change, reform, improvements. >> thank you. one point i'd like to crystallize is that u.s. soccer would support an inquiry as a national association. we have the authority to do so under the current governance. as it relates to your question what the u.s. senate could possibly do we welcome any opportunity to weigh in on your counter parts in russia or whoever it might be for any particular issue we would welcome that and be ready to work with you on that as well. >> do you know if there's any on going conversations between u.s. government officials and other countries associated with fifa

and these allegations and criminal indictments related to corruption at fifa. do you know whether our government is associating with other countries trying to facility change. >> excuse me. i'm going to recess the hearing just for a moment. he is on his way back from a vote. i'll cast the next vote and i'll be back but we'll have a brief subject of the call to chair recess which might be a value to those of you that have been sitting there for a bit so that the subcommittee is recessed until a call to chair.

>> chair calls the meeting back to order. that was a quick recess. >> this will be a brief few questions. mr. flynn would you commit to establish a better system of accountability within u. s. soccer through some kind of internal inspector generals, a watchdog protection system. >> we actually have hired someone to look at all of our ways in which we govern ourselves and that process has been started. and supported by our board as well. >> when will that process be completed? >> it's just started so i think

it would be a better approach for us to get back to you with the time frames once we have a chance to discuss in more detail. >> you testified that sports are undermined by a lack of accountability. would you say that voluntary system is efficient to bring some higher degree of integrity to a corrupt system or at least u.s. soccer has been involved in a corrupt system? that it's being skrutcrutinized by a public authority. >> i don't want to see them take away autonomy from

organizations. i don't think that would be the way to go but i do think if voluntary standards and principles are not enacted then government should set up regulatory protocol to ensure that sports organizations are keeping best practices and standards. there's a tremendous threat to sports worldwide. we -- it hasn't come pleatlypletely hit the shores of our country yet. illegal gaming in sports totals about $500 billion a year. $500 billion a year is bet on sports illegally. that has lead to an increase in match fixing which has been endemic in europe, in africa, in asia, in latin america. while we haven't experienced it here it's raring it's ugly head, six

detroit was sentenced to six years in prison for paying college basketball players to fix matches. and so what i'm hoping this committee will do and what our government will do is get ahead of the curve to begin to see that certain standards are put in place voluntarily or otherwise in order to bring a bit -- well hopefully to bring some of the well-known purity back to sports. >> mr. hershman, you said that members of fifa's executive committee should disclose their salaries, i believe? >> that's correct. >> mr. gilotti is on fifa's executive committee. mr. flynn, do you agree he should disclose his earnings? >> i believe that we have pushed for change on that and i believe that u.s. soccer and we would support that, yes. >> actually, if i might interrupt, senator.

mr. gilotti, before he was appointed to the executive committee, he served with me on the independent governance committee, and he voted in favor of our recommendation for compensation transparency. >> can we expect that will happen then, mr. flynn? >> we'll do everything we can within our power of the united states soccer federation. ultimately i believe that's going it be a -- to be a fifa executive committee vote. >> when will fifa make that decision? >> i don't know the answer to that. be more than happy to follow up and get you that. >> i would appreciate it. mr. bery, can you tell the committee what more you think fifa can do, very specifically and directly to stop human rights abuses including human trafficking, exploitation of child labor, horrific working

conditions, illegal holding of passports in effect involuntary confinement of workers and other abuses involved in construction in host facilities, in hotels, the breadth of these violations, i think has been somewhat inadvertently lost in these proceedings, which have focused more on the corruption, the overt criminal corruption and yet these human rights abuses are real and unspeakable. >> you're absolutely right, senator. the bottom line -- there are two big pieces of the puzzle that fifa can help solve when it comes to addressing the major problems of labor exploitation in qatar today and potentially in future countries that will be future host countries for the fifa world cup. the first piece of the puzzle is the question of what the

evaluation process is during the bidding process to be a potential host of the world cup. now fifa said for the 2026 world cup it will include human rights requirements in its bidding process. it's unclear right now what those human rights requirements are going to be and any such initiative must result in fifa having qukt human rights due dill gens systems in place to avoid human rights abuses in staging world cup events in the future. so that's the first thing, any such evaluation in the context of qatar, for example, would have revealed serious problems with labor exploitation, rising up to forced labor and as we've spoken about, the risk of injury and death to some foreign migrant workers in the country. the second piece of the puzzle for fifa is what happens when it raises an issue verbally, or via

text to the host government in this case qatar, the government of qatar then says okay we're going to do x, y and z and a year later as amnesty international has documented in our report, the government of qatar largely fails to address the issue. verbal assurances are not enough. so there's a real question for fifa as to what happens now. the clock is ticking and it's not enough to wait five years from now to have serious reforms when it comes to labor rights in qatar. every day that goes by is another day that more of the hundreds of billions of dollars of infrastructure for the 2022 world cup are already built and completed. and every single day that goes by without labor reforms in qatar is another day in which a foreign migrant worker is subject to -- potentially subject to forced labor, potentially puts their life at risk in a very unsafe construction facility, peshlly coming home to a filthy set of

housing accommodations, or is simply denied their pay while their family is at risk of being evicted from their home. the question for fifa what will they do now when a year after the government of qatar has claimed it's going take steps to address the problem? the reality is, for some of the worst human rights violations in qatar in the context of labor exploitation, not enough has been done. >> i want to just add one last or maybe two last questions one of them having to do with an issue raised by my colleague, senator klobuchar. i was astonished and troubled to learn that men's teams that exited in the very first round of competition in the world cup were paid $8 million, an amount 400% greater than what the women world champions were awarded. mr. flynn, what can be done?

and what are you planning to do to address this pay disparity. >> thank you. we are a strong advocate for the women's game. during the championship weekend i met with my counterpart who was the operating officer for the world cup. we addressed several things in terms in an action report being compensation. i would call team environment, the types of hotels, the number of teams at hotels, all of those kinds of things, should be included in an after-action report. we'll continue then with our fifa executive committee member mr. gilotti to push for continued development on the women's side and continue -- one of those items is increase in compensation for those competing and participating teams in the world cup and in other competitions potentially as well. >> thank you. i will have more questions for

you on this issue. i will submit them in writing. i think your testimony, all of your testimony has been very helpful and informative. in my view this hearing is really only a beginning of an inquiry that the congress has a responsibility to conduct. and that inquiry is only one step in a larger, very intensive and critical scrutiny that has to be given to the responsibility of united states sports organizations. we have spent a good deal of time over the last 24, 48 hours talking amongst ourselves about issues of national security. and the agreement that has been reached by the administration to stop nuclear proliferation, most

specifically with iran the power of the united states consists not just of its military force but its moral example. its exceptionalism devised from its values and its ethics. and the fans here and around the world deserve better from these sports organizations that have responsibility to oversee and organize the game of soccer. corruption is not a game. it is deadly serious. it is criminal. and it betrays the trust of fans,. u.s. soccer as i've said earlier, had a responsibility to know or should have known and the fans can judge which is worse. i want to thank you again for being here today. and hope that you will continue to cooperate with our inquiry. thank you. >> mr. blumenthal, thank you very much. this is our last round of

questioning. i'll bring this hearing to a conclusion. particularly under the assumption i may have suggested to you you needed a recess, so we're going to give you one we're going to adjourn. first let me say before i do that, thank you all for your testimony. this is, in my view, something that's a very important issue, a very serious matter. mr. flynn, i particularly thank you for your testimony. and i want you and our audience, our witnesses, those who are paying attention to this hearing that we want absolutely the best for u.s. soccer. i think the point i would make is we can't tolerate the status qu o -- quo, and there's circumstances from that status quo, they are real, perhaps life-threatening, or

life-taking. and we don't want another decision to be made for the next site of the world cup that is subject to allegations that corruption continues to occur. so from an individual senator i offer to you mr. flynn, u.s. soccer federation the opportunity to work in any way we can to assist you as you make the effort to make sure the status quo does not continue and i thank you very much for being here as i would say to all of the witnesses here. thank you for the serious nature in which we treated this topic. with that, let me say a few significant words that are necessary for the record and that is that the hearing -- the hearing record, the record of this hearing will remain open for two weeks. during that time senators are asked to submit any questions in writing that they have for the record. upon receipt by you the witnesses we would request that you submit written responses to the committee just as soon as possible. and with that, i will continue -- conclude this hearing. and again, thank the witnesses.

this hearing is now adjourned. [ hearing adjourned ]

this is an >> >> [inaudible conversations] >> and today will reduce the testimony from the federal reserve chair these hearings are an important part of the oversight of the fed and among the few opportunities we have for discussion with the chairwoman of the federal reserve. the fed plays an important role in the overall economy to manage the supply of money and much of the health of the financial system. through quantitative an

feasting and other special u programs the balance sheet hasnp expanded 4.5 trillion dollars and to put it into perspective 20 percent of all treasury securities are held on the fed balanchine and rather than using the proceeds from the mortgage-backed securities to reduce the balance sheetre sheet, the continues to reinvest these proceeds into more mortgage-backed securities. in addition the federal reserve continues to hold down interest rates despite the adverse effects on the u.s. economy including the negative impact on household savings. past announcements by the fomc have stated to adjust its interest-rate policy once for the fed estimates

show of 5.3% or lower by yet interest rates are unchanged the monetary policy report yesterday released states the fed will keep rates low even though the unemployment l rate will be at or below the normal of for a -- one normal level whatever that means. this is concerning to a lot of people because pushing theno economy beyond itsaf normal levels can have s negativeee effects as we have seen with economic bubbles in recent history. more than ever the financial markets have become heavilyolic dependenyt on the fedpare monetary policy decisions that makes transparency even more important. the fed is often described as the most transparentbut central banks or at least one of them.ng

but it is worth noting theludi fomc monetary policy decisions are less transparent than in other central banks including the european central bank and the bank of england.l the bank of england has more annual meetings and both banks issue more monetary reports per year. in addition the european central-bank has twice the number of press conferences so withld seems some aspects of the transparency could be improved similar concerns exist with the regulatory environment. with dodd/frank and ccar would get the stress test but that does not reveal how it will be tested or what way they fall short. similarly many have been

forced to file and refile without a thorough explanation to the fed on why the submission failed probably the federal reserve must provide more complete explanation the factions of for the financial system to function effectively. to your testimony today the you can shed some light on the questions i have raised. >> welcome back to the committee. nice to see you again. five years ago next week week, july 21st the wall street firm that becameaw law that in reverse reserves as an important an ever-presente reminder of the cost of the financial crisis of m 9 million jobs lost, the unemployment rate reaching 10% 5 million americans who lost their homes and $14 trillion of household

wealth erased ohio alone unemployment was over tender1. said in half a million homes were foreclosed upon through 2011.nd we live in does of code 44105 in cleveland and in 2007 that had the highest number of foreclosures of any support in the united states.serv every year there is an increased number of foreclosures as the chair has said it is more than just statistics behind each job loss or foreclosure the painful conversation of parents telling their children there will have to share a house to leave their neighborhood schools or they can noil longer a for their child's education.

the crisis took that devastating toll we cannotarin forget that is why we passed the wall street reform lawr. a reminder of how far we have come in five yearsbili after unprecedented actionsabil to stabilize the economy with the regulatory framework to maintain financial stability private-sector created almost 13 million new jobs in household wealth has grown by $30 trillion preceding crisis levels and business spending hasisremi climbed over 30 percent.em r this hearing is a reminder how important it is for the financial system to remaine wellne regulated for financial stability and to prevent the next crisis but no one was to return to the days of 2008. of the opponents of wall street reform continue to say the law has not stabilized the economy oraliz new regulations will bring

on the next financial crisis.nd lost reform cannot ruin the economy the wall street gambling did with the failure of regulators. since the passage theta academy has strengthened the less likely that taxpayers will be stuck at the tab with the bailout me overwhelmingly support strong financial rules some behavior is a product of extraordinary interest rates over the past seven years so it is no surprise all eyes are on the fed is it considers the first interest-rate increase since 2008 there are risks to tighten monetary policy too soon because the economy has made process but we still have a way to go. the recovery is uneven many groups have the benefit from the premature rate increases meaning they don't see wage

increases or have access to credit.ur the problems increase in china remind us that cannot be divorced from what is happening from overseas the manufacturers are ready contend with a strong dollar her cry look forward to yourress assessment as well as your appraisal of the progress made or the implementation of forestry reform. >> share, your written mad statement will be entered its totality proceed as you wish. r >> thank you. chairman and ranking member and rivers of the committee i am pleased to present the semiannual monetary policy report to congress. in my remarks today i discussed the current economic situation and outlook the sense my

appearance before this committee in february the economy has made progress for the federal reserve objective of maximumthat employment while inflation is up the local level the fomc judges to be most consistent over the long run with the federal reserve statutory mandate to promote r maximum employment with price stability in the labor a market the unemployment rate is 5.3%, slightly below the landing of last year down more than 4.5 percentage points from the peak of 10%y g during 2009. meanwhile the non-farm payroll employment averages 10,000 over the first half of this year. less than the robust 260,000 average seen in 2014 but

still sufficient to bring the total increase to more than 12 million jobs. also trending in the right direction is a noticeable declines over the past year with the people with long-term unemployment and working part time who wouldell prefer full-time employment too they continue to indicate that too many people are not searching for a job well what do so of the market was stronger. wage growth has picked up in continuous to be subdued and there are other indications of slack. the labor market conditions

have improved substantially they are in need of the judgment not yet consistent with maximum employment. as a labor market wasalf improving the domestic spending was notable during the first half of their sheer and real gdp is estimated to little change in the first5 quarter after the average annual rate of 3.5% over the second half of last year. t industrial production hahes declined since the turn of the year. will they bear watching some of this is transitoryat w factors with severe weather or labor disruptions and statistical noise. data that suggested moderate pace of gdp growth in the

second quarter, notably consumer spending has pickeday up but not ordering that may and june were strong butp many households have had the confidence to purchase big-ticket items and home building has picked up all the housing is still restrained by the limited availability to many potential home buyers. business investment has been soft partly reflecting the plunge in oil and exports are held down by weak economic growth with several major trading pardners and the appreciation of the dollar. looking forward prospects are favorable for further improvement hit and the economy more broadly.ul more prices should continue

with consumer spending. for in him shall conditionsg remain supportive in the highlyet accommodativeo policies abroad to perot's strength and global growth. some of the head wins restrain economic growth and and including the dollar appreciation of net exports exports, and the effect of spending should diminish over time.th t the fomc expects gdp growthhu to strengthen over theym remainder of the sheer and the unemployment rate to decline gradually.he has always there arede uncertainties in the economic outlook. foreign developments pose a risk to u.s. growth in most notably although the recovery seems to have

firmer footing the situation remains b difficult and china continues to grapple with those challenges of a dent in volatile financial conditions. but abroad that could pick up more quickly than anticipated to provide additionalon support u.s. economic activity. u.s. economy may snap back more quickly if the transitory influences fade t and the boost to consumer spending shows through more definitively. as i noted earlier inflation continues to run below the 2% objective but the personal consumption extended through the pricee index up only 1/4% from eight and the core

index, which excludes all the tile food and energyame components are up only 1.2 5% over the same period. to a significant extent to have total inflation reflects the influence to be transitory with their earlier steep decline of oil prices and indeed thoseized prices seem to have h stabilized although then inflation reading they both want a change in the price index to remain near the recent low levels in the near term for my colleagues and i continue to respect the effects to dissipate andin as the labor market improves further to move toward the 2% objective over the medium-term.

market-based measures remain low. >> yes survey based measures the committee will continue to monitor inflation developments carefully. regarding monetary policy that fomc conducts policy to promote maximum point in price stability as required and their product -- prior to jury mandate given the economic situation, the committee is judged at a high degree of monetary tha policy that remains appropriate. consistent with that assessment to maintain the target range to keep the holdings of long-termel security at the elevated level to maintain the

financial conditions. the fomc noted it would be inappropriate to raise the fed funds rate and is reasonably confident that inflation will move back to the 2% objective over the medium term. but dependent on thatf assessment of expected progress but if the economy falls as we would expect, it would make inappropriate as some point to raise the fed fund rate but mostted

participants rejected the days of the projections based on anticipated path but not statements of intent was to signal how much progress the economy hasitia made with the importance of the initial step to raise the target should not be overemphasized. what matters about broader economy of interest rates

including the initial increase of the fed fundslikel rate indeed monetary policy will remain highly accommodative for quite some time in order to support progress of maximum of employment in the projections for the meeting most and disappoint those conditions in a way to more gradual increase of the fed funds rate as a head wind as activity continues toat diminish and deflationary rise is. but it could follow a higher trajectory.

conversely if conditions prove weaker than the trajectory would be lower. as always we will reassess the fit is consistent with the dualue mandate.t i would also like to note the federal reserve has continued to use the operational plans deployment of our policy tools when the committee judge is itiss appropriate to normalize the stance of policy. to issue a detailed statement for normalizationpp and we have announced additional details regarding the approach the committee intends to use when it uses the fed funds rate. the statements constitute

recent examples of the stepsubli the reserve has taken ton co improve public communications concerning monetary policy for the board hasrd delivered the extensive report on monetary policy at the semiannual hearings such as this one it has long announced itsetin decisions by issuing statements would follow by minutes with policy discussions with the lab meeting transcripts.ude and quarterly press conference with the fomc participants for growth and employment inflation in the appropriate path to the interest rate target. a

an addition adopted a statement in 2012 for monetary policy strategy with the specific long run objective for inflation and the commit to follow a balanced approach for the mandated goals. i transparency concerning the federal reserve was desirable because but more important as those that reflect thein commitment to com accountability with our system of government. an important means to implement policy with many tactical elements each has been taken with the goal to enhance the effectiveness of

monetary policy but effective communication is crucial to ensure that the ab federal reserve remains accountable but major's -- measures the monetary policyres for short-term political pressure to be avoided with the federal reserve ranks among the most transparent a summary of the balance sheet and a financial statement from an outside auditor all the information is listed and the transaction level data including the identity of borrowers that aretw published with a two-year lag.

the matter how well-intentioned it could undermine the ability to make policy in the long run best interest of american families and businesses since the 2015 report we have seen the soft batch of the first quarter the labor market is showing progress for a maximum of employment and inflation continues to vote -- from below that objective but transitory factors have played a major role we continue to anticipate for the fed funds rate with the improvement in the labor market to be reasonably confident inflation will move back

over the medium-term and there remains committed to best promote the attainment of the dual mandate. i will be pleased to take your questions. >> recently have raised concerns over a proposal of the statutory dividend facing member banks on the shares that they hold in their respective reserve bank to help pay for the new transportation bill. are you aware of these>> c proposals? >> but then to reduce the red dividend could have unintended consequences to be a part of the federal is reserve system but the policies of -- a part

smaller institutions but this is a change it is a significant concern to the small banks that have received this dividend fordend cry suppose i would say it conceivably could have unintended consequences and deserves serious thought and analysis. fro >> i piggery. i don't see a nexus from those coming from the federal reserve system which a lot of small and medium-size banks i think ed is a far reach the that isto something we better be working together on. >> in another area that impact of a regulation therket

issue of liquidity in theth fixed-income market is a daily topic in the news. last month secretary lewis testified he does not believe that federal regulation is a significant factor contributing to his liquidity issues. s interesting. wendy think that is a significant factor with the market liquidity in any d respect and what work has the federal reserve done to determine the impact of regulation on liquidity on the market's? >> we are studying this issue very carefully.is we certainly have heard the market concerns.

at this point i can give you a list of factors that may be causing this phenomenon busey this decline in liquidity. >> one civic there are changes in the structure of the rocket -- of the marketo le with the pension funds with a leveraged firms that used to be more dominant in this market to have higher a capital requirements. but in other regulatory changes to those debtor changing their own risk ms. rich practices to see an

increase in algorithm neck frequency trading leading to changes of the market trading so with thosef desired sizes of trade to account for what is going on which is a contribution of each the but a concern is the day to day and normal times are most measures of liquidity are seen to be unchanged. to see where it is less available. >> but any market you need

risk and liquidity? >> we do need liquidity. >> you don't have a market without it. >> there may be changes but it was leveraged for those that were exposed to bek vulnerable if liquidity were to be reduced.. and that may be a safer situation so there are two, sides toic this. >> in order to reduce systemic risk comedy believe having fewer financial institutions are a good

thing? >>. >> through banks through regulation be encouraged to reduce risk everywhere they r can? >> we're trying to put in place incentives to reduce the systemic footprint withha the capitalrg requirements wete plan to impose surcharges on the most systematic firms for those that will diminish the risk of -- to be reduced in ways to the financial system one. >> i continue to be

concerned the economic recovery is not taking hold me while large numbers of women and communities of color. i know confirmation bias can be ain problem that might exist in capitol hill by see evidence of underemployments o and unemployment with inflation but sources t headwind so what is the risk to tighten monetary policy too soon and what is the impact on working americans? >> of course, there are risks if we tighten too soon and we are highly focused on those and that is an important reason why we have left rates as low as they

are for as long as they have been, over six years and as effectively zero. we have had a recovery that is slow to take hold and growth has been slower than in most recoveries following a severe financial crisis. it is clear we made progress the main groups that are struggling in the market, we tried to show they're standard unemployment ratema of 5.3% may understate avoid exist in the labor market so t we clearly want to seeth continued improvement and would do nothing to threaten that. and the other hand the labor

market is getting demonstrably a closer read almost any metric to a moreient normal state. of the degree of accommodation is sufficient to generate a pretty significant improvement in the of labor market. one and a whole sea economy diminished then it does become appropriate we're not talking about tightening monetary policy but slightly diminishing the high degree of accommodation that we have in place. of course, we would do so to threaten continued progress in the labor market. at the same time inflation is low and while we have indicated a good share of

that is transitory way to inspect -- expect headlinele inflation to rise to core levels that is another reason for accommodation but it isde important to know that there are risks of all sides it is too soon to threaten the recovery or jeopardize the inflation that is the 2% target and also beecher fall not to tighten too late or we could overshoe both goals and be faced with the situation with the need to tighten monetary policy and a sharp way that could be disruptive. . .