welcome, governor, congressman waxman. thank you all for being here today. governor bush, i read your testimony with interest, and apologize, i was on the floor and couldn't be here for the earlier part of the hearing. in your testimony you state, "i understand there may be political support for specific industries and companies, and we know from recent experience that government is not good at picking winners and losers in economy and fundamentally it's not the job of government to pick winners and losers in the economy." i'd like to learn more about your thoughts, then, on the financial services industry. one that i understand from press reports you have worked with. according to "the wall street journal," shortly after you left the governor's office, you went to work for lehman brothers in what is described as the in-house investing arm of the company. was that correctly reported? is that correct? >> i was on the private -- the

advisory council of the private equity arm of lehman brothers. >> thank you. and you were working for or with lehman brothers then when it collapsed? is that correct? >> i was a consultant adviser to lehman brothers. >> okay. do you still work -- excuse me? >> not an employee. >> do you still work for -- did you receive compensation for that engagement? >> yeah, sure. >> do you still work for lehman brothers merchant banking, which i understand was spun off? >> no. >> you do not? thank you. thousands of people lost their jobs when lehman brothers collapsed and many people lost money. what was your job at lehman brothers, exactly? >> i was an adviser to lehman brothers. had dealt with -- basically spent most of my time dealing with their customer base. providing insights in things like the madness of washington, d.c. sharing my experiences with

customers to try to add value in the relationship. so it was not related to internal functions of the company, it was related to client interface. >> if you could provide any specificity for the record, it would be greatly appreciated. do you think the government picked winners and losers during the financial bailouts? >> i think government oversight was lax. not the rules that were created afterwards but the oversight was lax for sure. >> might i get some clarification on another small point? because of some reporting in "the guardian" newspaper in britain. for whom do you work now, and do you have any relationship to barclays? >> i do. >> you do. what is your relationship? >> i'm a senior advisor to barclays capital. >> "the guardian" newspaper in britain reported in 2010 a u.s. bankruptcy examiner concluded grounds exist for legal claims

against top lehman brothers bosses and auditor ernest and young for signing off misleading accounting statements in the run-up to the 2008 collapse. the newspaper said a forensic report which i'm familiar with by anton valukis -- >> does the gentle lady have a question about the subject of the hearing at hand? >> i do. reveal that barclays, which bought lehman's business out of bankruptcy, got certain equipment and assets to which it was not entitled, i'm quoting. are you aware of any of these allegations and do you have a response to them if. >> no, i'm not. >> the lucas report revealed during lehman's final few hours, its chief executive officer sought to convince prime minister gordon brown to overrule britain's financial services authority when it refused to fast track -- >> does the gentle lady imply this gentleman had anything to do with that? >> mr. chairman, if you could just allow me to finish here.

according to "the guardian," during the bank's final hours in 2008 fold desperately tried to strike a rescue deal with barclays but the fsa would not allow the british bank an exemption for seeking shareholder approval. the chancellor darling declined to intervene and fold appealed to the treasury secretary paulson to contact the prime minister. according to the valukis report, fold asked paulson to call prime minister gordon brown but paulson said he could not do that so fold asked paulson to ask president bush to call brown but paulson said he was working on other ideas but in a brainstorming session fold suggested getting the president's brother jeb bush, who was a lehman adviser, to get the white house to lean on downing street. to your knowledge, did your boss mr. fold in fact make such a suggestion? >> first of all, he wasn't my boss, i was a sult ant to lehman brothers as i stated. and no, he didn't ask me to do anything and i didn't do anything. >> time for the gentle lady has expired. why don't you direct your

questions to mr. fold? this gentleman doesn't have information on that. >> it's very interesting how terse you were with my questioning this moneying -- >> you're not asking him questions about the hearing, you're injecting innuendo it seems and the gentleman has asked your question -- >> it's important for the american people to understand the witnesses before us and what their financial connections actually are. thank you. >> so i will bring it back to the hearing. i'll bring it -- start off with actually testimony from the witnesses. mr. waxman, congressman, you made the comment with reference to i guess the appearance of impropriety, call it that way, when you have consultants on the payroll for the companies on the one hand, they're also is ones that are involved with the decision-making of the salaries and what have you, the positions there. certainly there is an appearance of impropriety there. i guess in politics you can somedays see the same things where you have people making donations to politicians or elected officials on the one

hand and at the same time those very same politicians or elected officials are making decisions with respect to those donors. is it not the same situation there for us politicians? >> i think there's an appearance of unseemliness and that's why i think the system we have for funding campaigns is one that we definitely ought to change. but i think there are distinctions between the two. but -- >> i appreciate that. so we have the same situation on financial matters and the gent lady brought it up and the situation at amf global where you have an individual who is now one of the largest bundlers for this administration on the one hand, and on the other hand, that is the same individual being investigated or at least the company is being investigated by that same -- very same administration. so there is at least an appearance of impropriety when someone donates to the administration and that administration is either investigating, or maybe not doing a valid investigation there. >> you need to go beyond the appearance. >> right. >> and look at the facts.

for example in the solyndra investigation -- >> i'm not on that but thank you very much. what i am concerned about is the testimony when you make accusations the republicans want to return to an era of robber barons with no restraints on wall street and enriching themselves at the expense of everyone else, i don't know actually how you can say that. furthermore, you go on to say the problems of 2008 were demonstrated on the collapse of wall street caused by the absence of cops on the beat. really? there were cops all over the beat. when you look at the institutions that failed, aig, they were regulated institution. lehman brothers, they were a regulated institution. this gentleman next to you was not sitting inside lehman brothers at the time but there were regulators who were sitting inside lehman brothers on a daily basis and they failed to do are in job. >> i would dispute that fact. i would absolutely dispute that fact. >> there was regulators at lehmans. >> they may be regulated for some things but their financial practices were not being regulated or being watched and i think governor bush is absolutely right when he said

there was not government oversight. the s.e.c., it was shocking how poorly the s.e.c. did its job. >> exactly. and that's exactly my point here is that you had regulators from the s.e.c., from the ots, the federal reserve, and each one of these institutions were regulators involved with, starting from bear stearns on out, the regulators had the authority, they had the information, they had the wherewithal to try to prevent the meltdown in '08 so we would not find ourselves in this situation today. but the regulators failed to do the job. so whereas your testimony likes to point the finger entirely at wall street and the free enterprise system and capitalism for failing and greed over there, we can equally point the finger back at the regulators who were sitting in these companies, they failed to do the job. >> the solution isn't to end regulation or put in people who won't enforce the regulations. >> as you can see from both in this committee and financial services there's not a single republican who has ever said to end regulation.

everyone simply said to reform it. let's turn to another issue i know is dear to the governor's heart and that is the area of education. that's also important to me as well. so you have k-12 education. and we know what has been able to be done in various states as far as reforming it which will provide for better-educated students and a better economy going down. my question to you is this, though. do the states have enough flexibility in this area in order to achieve what they need to achieve, or is this one other area where the federal government has entrooded to such an extent we are once again providing for impediment or barrier to free enterprise to be able to grow by allowing for a flourishing educational system in the states? >> historically the federal government's role in education has been limited. it's grown in the last few years. the last decade it's grown, i would say. but it's not -- it's not similar to, say, health care where the

federal role is now significantly, both in regulation, spending, and the two major programs, significantly higher. but there should be flexibility. i think the objective ought to be a year's worth of knowledge in a year's time, there ought to be effective measuring, and states ought to try to apply different approaches. in our case we had an accountability system that was based on grading schools, 100% based on student learning, ending social promotions, school choice. compensation for teachers that was different than just longevity of service driving it. digital learning being an element now of the florida strategy. and the results are there, congressman waxman will probably appreciate this. low-income hispanic kids do better than the california average on the fourth grade reading test. even though we spend less than $7,000 per student. it's because we had a focused, strategic approach. washington's not equipped to

provide that. florida's different than california, or different than other states. and so, you know, we ought to be given more freedom to do things. i think the title 1 monies is a place where maybe there could be more innovation in the lower-performing schools, for example. i think you could trust governors and state legislatures and the communities in states to be able to come up with the best slews. >> thank you. a vote's been called so we have to move with dispatch. last but not least mr. mulvaney. >> mr. edwards, thanks very much for coming. miscellaneous tariff benefits. something getting some attention here this week by way of quick introduction, these are reductions in tariffs on things that are not made here, that are generally available to the marketplace, and we're having some debate as to whether or not those are earmarks, tax subsidies. there's discussion whether or not miscellaneous tariff benefits are a subsidy similar to a tax loophole.

i'd like your opinion as to whether you think mtbs are tax subsidies or tax loopholes. >> tariffs are taxes. i mean, they're taxes on international trade. ultimately we should move to an international trade agreements, get rid of tear riffs. tair reserves don't just hurt american consumers, tariffs hurt american businesses that use imported products. you look at big corporations like general motors, i mean, they import an enormous amount of parts and other goods so when we put tariffs on their production, it hurts american businesses. so, i mean, i'm not familiar with a particular bill that's in front of congress there, but tariffs are not a good idea in general. like taxes, they distort the economy. >> generally speaking, would these reductions on tariffs, on products that are available across the market, would you consider that corporate welfare? >> no, certainly not.

i'm for closing tax loopholes, for getting rid of special deals on the tariff side. but i don't -- special deals for particular industries on tax and spending and tariffs are distortionary but it does strike me there's a difference between tax reductions and tariff reductions and spending. >> ultimately, the primary beneficiary of these lower tariffs is the consumer, is that right? >> oh, absolutely. again, both consumers and american businesses that use imported products. >> thank you, mr. edwards. i appreciate you being here. governor, i don't have any questions for you. i appreciate your time. mr. waxman, i have one question for you. i've heard the auto bailouts mentioned several times. they were designed to somehow save the auto industry, save them from bankruptcy. you knew chrysler went bankrupt anyway, right? >> i do know there's a vibrant american auto -- did chrysler go bankrupt in april 2009? >> yes, they did. >> did gm go bankrupt in june

2009? >> i don't know. >> did gm go bankrupt after the auto bailout? >> i don't know. >> they did. it was the second-largest bankruptcy in the history of the country. i've only got one question about it. i'll ask the question. i'd appreciate your answers. when chrysler went bankrupt, it did so in an extraordinary bankruptcy proceeding that denied for the first time in a long time, if not ever, secured bondholders of the rights to which they were entitled. one of those secure bondholders was the indiana state teachers retirement fund. another was the indiana state police pension fund. together, those two pension funds of public employees -- teachers and policemen -- lost several millions of dollars of their retirement money. my question to you as a supporter of the auto bailouts, what would you like to tell them? >> i'm not an expert in this

area. i know when the airline industry goes into bankruptcy they tell their workers, you can't continue the pay you've already negotiated with us, this is a way to break the unions and take away benefits from them. people get hurt and when businesses go bankrupt, the stockholders get hurt, the bondholders get hurt. in this country the ceos all come out on top. >> do you understand the difference between a secured bondholder and a stockholder? >> i do. >> what would you like to tell the secured bondholders who were entitled to protections under bankruptcy law who didn't get them? retired teachers and retired policemen of the state of indiana? >> tell me what you would like to tell the unemployed auto workers and industries in the midwest who are dependent on them if we let the auto industry go down the tubes? >> do you understand the legal difference between a secured bondholder, an employee, a secured bond holder and a supplier, a secured bond holder

and an ordinary tolder? >> i don't want anybody to get hurt but the fact is people do get hurt when we have a mismanagement of the economy so that we have banks taking huge risks with other people's money on securities that don't make sense and then slice them and dice them and sell them abroad and the whole bubble fell. and government should have been there to stop that from happening and government wasn't there. >> instead, what government was there to do was to steal money from retired teachers and policemen in order to give it to unions. with that i yield back the balance of my time. >> thank you. all time is yielded. ed a you can tell, washington is as friendly and kind as it ever was before. look, henry waxman, congressman waxman, thanks for coming and spending your morning with us. chris edwards, you've come and testified a number of times, i appreciate your insights. governor bush, it's not all this bad. when these microphones are

turned off some of us actually do kind of get along with one another. so i just want to thank you for taking the time out of your busy schedule to come and share your insights with us. thank you very much, this hearing is adjourned. >> chris i wanted to ask about canada but i figured you and i were the only ones who cared about it. over the past four years, pulitzer prize winning author dave maraniss has been writing "barack obama: the story." the research included traveling the globe and speaking with the

president's relatives in kenya and discovering his african ancestry on the shores of lake victoria. "barack obama: the story" comes out in bookstores june 19th. book tv will give you an early look with pictures and video, including our trip to kenya as we traveled with the author in january 2010. join us sunday, june 17th, at 6:00 p.m. eastern time. and later at 7:30 that same night, your phone calls, e-mails and tweets for david maraniss on c-span2's "book tv. span c 3 with politics and public affairs programming throughout the week. every weekend, 48 hours of people and events telling the american story on "american history tv." get our schedules and see past programs at our websites. join in the conversation on social media sites.

art natter is an energy reporter with bloomberg and looking at the 2013 energy and water spending bill. what are the key issues lawmakers are talking about? >> this bill would fund the energy, interior bureau department's bureau of reclamation, nuclear regulatory commission. some of the key issues on the bill that are controversial is the fact that it would cut funding for the energy department's renewable energy programs and increase funding for their fossil fuel programs which is opposed by the obama administration and democratic lawmakers. in addition, the bill has several policy riders, including ones that would continue funding for the licensing application process which is also opposed by the obama administration and majority leader harry reid. in addition, the bill contains a

policy rider that would stop the army corps of engineers implementing clean water act guidance and stops the energy department finalizing rules that would set efficiency standards for federal buildings. >> in terms of overall spending, how does the level this year compare to the 2013, the bill that's being debated? >> the level for the overall bill is on par with last year's bill, which appropriated 32 billion, not counting about 2 billion in supplemental disaster relief. so it's on par. the senate bill would appropriate about a billion dollars more. it comes in at $33 billion. >> what did some of the -- you talked about policy riders. but what does the bill say about house republicans' priorities for the energy bill? >> i think that it's pretty typical. i think there's a lot of messaging, especially in an election year. for the most part republicans in

the house want increased funding for fossil fuel programs and decreased funding for renewable energy. for instance, it would cut the energy department's office of energy efficiency and renewable energy and also arpae, the administration research projects agency, which is a product of the development administration and would function -- for transformative energy projects it wouldn't get financing through traditional mechanisms most likely. >> what have we heard about the bill from energy secretary chu and from president obama? >> i haven't heard much from energy secretary chu on this, but the obama administration has issued a veto threat, largely because of what they call ideological and political policy riders. in addition, they're concerned about how the bill would play into the budget control act and its funding levels and there might not be enough funding left over for -- at the end of the appropriations process for additional bills. so they're concerned about that. that's why they issued a veto

threat. >> a second full day of debate on the energy and water spending bill. tell us about the tone of the opponents. what are we hearing from democrats? >> well, each side is offering amendments that have their priorities. on friday there's a lot of democratic amendments that would increase funding for renewable energy programs and also today. republicans are offering amendments that would bring those costs down including amendments that take funding away from the energy department's renewable energy programs. >> where's the senate on their version of the spending bill? and talk about the timetable for a second on this house bill. >> sure. the senate passed their bill out of the appropriations committee in april. there was a 28-1 vote. so there was a lot of bipartisan support for it. it's about a billion dollars more. senator feinstein, who's the chair of the subcommittee that has jurisdiction over the legislation, has said that she

wants the bill to move by the august recess. but that's largely up to leaders in the senate. and they haven't said yet what's going to happen. so it might come up later this summer. it might be wrapped up into a cr. it's just not known yet. >> with bloomberg bna talking about the 2013 energy and water spending bill in the house. thanks for the update. >> thanks for having me. >> coming up next on c-span 3, a congressional black caucus summit on voting rights. the cato institute hosts a talk on the causes of the 2008 financial crisis. and later, a hearing on federal regulation of the oil drilling technique known as fracking. >> over the past four years pulitzer prize-winning author david maraniss has been researching and writing his tenth book, "barack obama: the story." the research included traveling the globe and speaking with the president's relatives in kenya

and discovering his african ancestry on the shores of lake victoria. he also toured the family homes and sites in kansas to find the origins of his mother's family. barack obama the story comes out in bookstores on june 19th. but book tv will give you an early look with exclusive pictures and video including our trip to kenya as we traveled with the author in january of 2010. so join us sunday june 17th at 6:00 p.m. eastern time. and later at 7:30 that same night your phone calls, e-mails, and tweets for david maraniss on c-span2's book tv. last week the congressional black caucus he held a summit on voting rights. in the final session, dubbed "a call to action," they discussed new voter i.d. laws and how to get african-americans to the polls in november. this is 90 minutes.

>> thank you all so much for being here for our last official session of the day. i want to thank the chairman and the president of cnbc for allowing the cbc once again to participate. i want to thank my chairman, emmanuel cleaver, who i've always told people could tear it up. and he tore it up this morning. so i want to thank my chairman again. [ applause ] to the members of the cbc who are here, my colleagues, i see we've just been joined by congresswoman sheila jackson lee from texas. let's give sheila a hand. [ applause ] and we're going to begin this panel even though congresswoman maxine waters isn't here yet. she should be here very shortly. we're expecting her to join us. and of course you met our doctor and our vice president of the cbc earlier, congresswoman donna christiansen from the virgin islands. so again, thank you all. it is my great pleasure to serve as moderator for today's final discussion. i'm representative marcia fudge

from ohio, representing the 11th congressional district. i -- [ applause ] thank you. and i'm honored to be here with you for many reasons. i serve as the cbc's for the people voting rights initiative co-chair with my friend and colleague, representative john lewis. now, let's just take a walk down memory lane. the date was march 7th, 1965. and the place was selma, alabama. young people led the way. their goal was to achieve the uninhibited right to vote. hundreds of brave men, women, and children marched. black and white, hand in hand. i can hear it now. many of them were probably singing. singing some of those old freedom songs like "oh, freedom," "we shall not be moved," or "we shall overcome." and then all at once the marchers were attacked by police with billy clubs and tear gas.

that day will forever be known as bloody sunday. a day when hundreds of americans bled on selma, alabama's petis bridge. bleeding for the struggle to secure our right to vote. >> we're leaving this now. this program will be showed later in the evening. we're taking you to a discussion under way live with berkshire hathaway ceo warren buffett. he's giving a talk at the economic club of washington, d.c. this is live coverage here on c-span 3. >> and i looked up ben in who's who in america and it had a whole bunch of things, but it says chairman, government employees insurance company. so i asked the librarian, how can i learn more about this? i'd never taken any courses in insurance. and he said there's this big best's manual and if you read that you can find out about the company. and there was one page on government employees insurance. so that saturday i got on the first train and i came down to washington and i went to the headquarters of what was then called government employees insurance. and to my total surprise the

place was locked. people didn't work -- people in washington didn't work on saturday. so i kept pounding on the door. and finally a janitor came. and i said to the janitor, i said is there anybody here i can talk to except you? now, he didn't seem to get offended at that particular introduction. sew said there's a fellow i think up on the sixth floor and he was the only one there. and his name was rormer davidson. and he changed my life in a big way. he was a wonderful, wonderful man. he talked with me for maybe four hours on saturday and gave me an education like i'd never gotten in school. >> so you liked it so much you eventually bought the whole company. >> it's one of those things. it took a few years. >> when you were starting your investment partnership, i think you started around 1956 with a partnership. >> that's correct. >> as i understand it, if someone had put $10,000 in in 1956 and had stayed with you and kept stock that they could have gotten when you liquidated some of the partnerships, that 10,000

would be worth roughly $500 million today? >> that's about right. >> wow. so those people are very grateful to you who did that. >> i was grateful to them, though. they were betting on a 25-year-old, you know, who looked about 20 and acted about 12. so i -- you know. and actually, they were mostly relatives. my father-in-law and sister and her husband, my aunt. >> so your investment partnership started. you started buying companies and buying stocks. one of the companies you bought was berkshire hathaway. though your company is now very famous, it's named berkshire hathaway, that was not one of your best investments, was it? >> it was really dumb. it was what i -- i used to call graham's approach on buying cheap stocks that weren't very good companies cigar butts because it would be like walking down the street and finding a cigar butt. there was one puff left in. and it didn't cost anything and it was kind of