children. he fought for $5 billion in cuts to education made by his insider buddies. ob on the is proposing getting tests to 4-year-olds. heard enough? wendy davis will reduce the number of tests our kids take across the board and cut waist and davis will use education to build an economy for all hardworking texans. you decide who will be best for texas. >> this is the first time in 14 years that texas will elect a new governor. texas gubernatorial candidates, senator wendy davis and republican attorney general greg abbott face off in a debate tonight. you can see it at 10:00 eastern on c-span. >> the student video cam competition is under way open to middle to high school students

showing how a policy, law, or action with the federal government has affected you or your community. there is 200 cash prizes for students and teachers totalling $100,000. for the list of rules and how it get started, go to studentcam.org. >> wells fargo ceo john stumpf stopped by to talk about the role of financial services and banking issues and the economy. he said he was optimistic about the economy and addressed the housing market. wells fargo is the nation's top home morgan lender. it's about an hour. >> good afternoon.

welcome. my name is myron and i'm an adjunct professor at the george washington school of media and foreign affairs. the bureau chief with the associated press and the 10 seventh president of the national press club. the national press club was the leading professional organization for journalists committed to our profession's future through the programming with events such as this while fostering a free press worldwide. for more information about the national press club, please visit our website at press.org. on behalf of our members, i would like to welcome our speaker and those of you attending today's event. our head table includes guests of our speaker and working journalists who are club members. if you hear applause in our audience, i note members are attending and it's not necessarily evidence of a lack of journalistic objectivity. i would also like to welcome the

c-span and public radio audiences. you can follow the action on twitter using the hash tag mpc lunch. we will have a question and answer period and i will ask as many question as time permits. it's time to introduce the head table guest and would like each of you to stand briefly as your name is announced. from your right, ed barks, president of barks communication and a member of the national press club board of governors. justin lee, university of maryland department of finance. tommy burr, washington correspondent for the salt lake tribune for the national press club. we thought it would be good if you come and listen to advice from our guest speaker. oscar is the director at the wells fargo corporate communications.

a member of the mpc. the wells fargo greater washington, d.c. region. buffalo news. the chief in washington and chairman of the speaker's committee. the past president. skipping over the speaker for a moment, a bloomberg news and speaker's committee member who helped organize today's event. emily stevenson, thompson reuters reporter who covers bank regulation. cofounder and chief strategy officer of social driver and a member of our board of governors. keith hill, editor and writer with bloomberg and a former mpc vice president.

thank you all. as the chairman and chief executive officer, the san francisco based wells fargo, john stump runs the largest bank by market value. the biggest u.s. morgan lender. it took about 250 deals to arrive at that point and stump has been involved in more than 100 of them. among them is the $12.7 billion purchase of wachovia corporation in 2008. during the first quarter earnings conference call with investors, he raised the possibility to expand within the brokerage retirement businesses. that includes dealing with the increasing number of laws and regulations and regulators created after the financial crisis as well as navigating through the rough waters of slow expansion and record low

interest rates. wells fargo is particularly vulnerable to changes in the jobs and housing markets. the bank observed sanctions like russia and iran and anti-money laundering rules to avoid fines such as the record $8.97 billion slapped on them earlier this year. the responsibilities include ensuring that credit card data reaches such as those reported by home depot and target do not happen under his watch a& including the largest one, berkshire hathaway. please join me in welcoming john stumpf, ceo from wells fargo.

i would like to ask if you can share your personal story of growing up in rural minnesota as one of 11 children. >> what a great introduction. that might be the second best one i have ever heard. i was in texas last week. the guy said i did it myself. they came in 13 years and no twins. people can't get over this. that was a fairly average sized family. in california, they asked me, were you part of a commune?

i said no, no, just one dad and one mother. they were good questions. how many bathrooms did you have in the farmhouse? we had one. we had 1 1/2. if you used it after thanksgiving, they didn't find you until mother's day. how many bedrooms did you have in this house? the answer was two. we had a north room where my four sisters slept. my six other brothers or seven of us. we could not divide evenly into seven. one bed had two and the third had three.

my brother was on my left and you guys are going to be difficult here. when you tell me all the thing i'm responsible for, i don't have time. since now you know me, let me tell you in a few minutes a little bit about the company. i want to talk about the economy and a little bit about the industry and then my favorite time will be when i get to answer your questions. they are in the 163rd year of business. it was on july 13th and started in 1852. there was a henry wells, william fargo and a few years earlier in

the early months of 1852, they decide to start a business west of the mississippi. they were the internet of those days. they were going to move people at five miles an hour and every ten miles you find yourself in san francisco a couple days or weeks later. starting out is the stagecoach which you know today as the logo. by the late 1860s, the railroads came through. i will tell you one story in 1918, at that time we had 10,000 offices we connected the country. we were u.p.s. and fedex before we heard of them. somebody sitting in my office,

the president at the time got a call and they announced they would take all of the offices to support the world war one effort. that's a lousy day with the government. dodd frank, i can't get all that excited, here is the punch line. the great depression and the great recession. almost every economic environment you can imagine. all kinds of technology and changes. today i want to give you a quick tale of a tape. we have 265,000 team members. 97% of the business is in the u.s. 97% of the people in the u.s. we serve in three americans.

one way or another. we don't know anything about cornering the market, but we know about small business and consumers and corporate customers and others planning for retirement. we make more home loans and do business with in ten of all small business in america. the next closest is half of that share. we make more energy loans. the commercial real estate if you travel upon this, you think there is a crane convention and cranes everywhere. we do more of that than anyone. that's what we do. that's not the only part of our culture. philanthropy also plays an enormously important role. the company's size is measured different ways and we never have

been impressed with the side. the 11th largest revenue producer in the country. on the philanthropy side, no country in america invested more in the communities than wells fargo. last year we were number two. part of our culture has been the number one campaign for the last five years. people asked me why is that such an important part? we live and work and recreate and go to church and we are part of local communities. we have have never seen them do well overtime. they are linked in a special

way. we have stockholders and as the introduction was heard, you heard about the largest owner who owns the single largest investment. you look at size of institutions, we are not even in the top 20. we have more people, but we are not the largest asset size. we are far and wide the most valuable bank in the world. if you hire great people and treat them as family and take care of customers, most have been with us for decades. we do lots of stuff with them. they are friends. you give back and invest in your communities, your stockholder can and will get rewarded. by the way, we have been one of the largest taxpayers in the

u.s. for years. in fact last year, i think our cash tax rate was 32%. let me move on to the industry. the economy. then we will talk about the industry. recoveries are not pleasant to watch. they are messy. we are now six years and anniversary since the bankruptcy and years since the recovery started. and it doesn't feel like that even though it is in the low sixes. in the first quarter, we saw a big drop in growth. we had a strong second quarter and it would not surprise me if

they both started with a three handle. august comes around and we have 145,000. i will tell you off the bat, the economy feels stronger than some of the recent numbers would show. we are optimistic about what is happening in america and our future. i am bullish about the long-term future. the so-called great years. compare the economy today to that. let's for a minute ex-clues real estate out of both economies.

energy is booming. the best it ever has been. we might be self it was and the number of oddos sold in august, it will be the best oddo month since 2006. that's almost since 2000. we will sell 16 to 17 new vehicles. if you took the fleed, it will be industry for sometime. agriculture doing well. not all parts and technology is booming. commercial real estate is doing

very, very well. if you look at the elements of it, we are doing very well. not as much as we need and i'm hugely bullish on or i understand the experience of manufacturing. let's take housing. typically in a recovery for every one since the end of world war two. housing is better. it's better everywhere. it's not better for everyone. it's not as good as it can be. why is housing not there? there is lots of discussion here and what are the elements. it's four or five things and

aggregate creates a big thing. first of all, households are forming later today than in the past. i got married when i was 21. my wife was 20. we bought a house the next year. now my children are getting married in their 30s. that's happening where children are living with parents. that's a big change from what it used to be. secondly, student debt is an influence. 40 million americans have a student line. they have almost doubled in the last six years. that has an influence. there is more student debt. the biggest debt category for americans is housing. it surprises people that the

next group is student debt. more student debt than there is auto debt or home equity debt or credit card debt. so it is and people another area is in some markets houses are not available. i happened to live in san francisco. in the bay area you bid on a house. you come with 27 of your closest friends and you keep running the price up. there is simply no inventory. that's not true across the country, but it's true in many of the hot markets. surely the coastal markets. the one i want to spend more time on is something we can do something about. that's credits not available for every borrower who can afford a house and wants to make that decision or commitment. this is going to get a bit

technical, but it's important. in the united states, since the housing market is so huge, $10 trillion, we need a secondary market to help finance that debt. and deposits are used to make businesses and furl government and a bunch of other things. so the way that the united states finances homes. it's fanny or freddie known as gses or the fha against loss. with that guarantee, like us and others, they originate the loans and sell them off to investors. it makes credit available at the

prices we have and so forth. what happened overtime is that the mortgage companies and the insurance companies if you will, put loans back to the originators and say this doesn't qualify for your insurance. sometimes they are put back for technicalities. that's a technical default and it comes back. what banks have done and originato originators, there is a lot of originators who are not banks. these are small companies that has always been the case. they are saying the fannies and freddies are saying we will insure a loan that has this requirement. from a credit perspective, a

fico score down to 580 or 600, we are saying no, we are only going to do it down to 650 or 670. we put a credit overlay on it. there is a certain part of the market that can't get a conforming mortgage. we know this this group there is going to be more default and we know what happens that they are going to put it back to us. we are trying to find a way to when does credit and risk transfer? if the originator originates a loan and they don't verify it, it should come back. if they do the best job they can and there is a default later, and the defect is unrelated to income or the company paying it,

it should not come back. here we have a situation we are now joining or the groups are communicating with us saying how do we open a credit box. let me segue and i think we are down to how many more minutes? eight more. we will talk about the industry. i could talk for 80 minutes about too big to fail, but i will do that in a couple of minutes. there is wide agreement in america and i would be the first to say it, there should be more company too big to fail in any industry. not for natural services. failure is an important part of the free enterprise system. now where there is a

disagreement is has enough been done to deal with this issue. one forgets how much has been done. if i look back to 2008, we now have almost 14,000 pages of new rules we have the vulcar amendment. doing business was never a big deal for us. the term stress test is in the common ve vernacular. it happens with a capital distribution element to it. something called living wills or funeral arrangements and

heightened expectations. there quantitative parts for that. on that side has been significant change. look at capital requirements. wells fargo went through the one of the unless you were my parents's age and went through the great depression. we bought a big company using our own money and today our capital went from $99 billion then to $181 billion today. almost doubled. but you say just a second now. most of the banks didn't fail and you would be right about that.

today 24% $1 of loan. today we have $11 in deposits and $8 worth of loans. we have a huge amount there. this is a fancy acronym for global systemically institution. the leverage ratios have changed. any one of these things i just. >> it all makes sense in the singular. in the aggregate, it's a large

load and my answer to critics would be give this stuff a chance to work. there is an economic price the economy does pay if you are going to have overregulation and too much capital and too much liquidity on the side lines. what's happening, the regulated box, what happens within the regulated side is shrinking and what's happening on the outside of the regulation industry, the nonbanks are growing. you look at the interconnectedness of organizations. just like in the housing area, less credit available at higher prices for fewer people.

>> how i think the industry will be successful in the future. we are in a long sales cycle business. investments that we made are being harvested today and we need to make investments that will have it continue in the future. people ask me which bank are you most impressed with. who do you think about or dream about? i dream about checking accounts. not other banks. i'm impressed with the company like apple or google or costco and amazon. those are banks. here's how they influence us.

they will be what retailing is all about. they are making lots of investments to help stay ahead of the curve and one of the big debates is our banking branches. we call them stores. are they still relevant? we think they are highly relevant. they will be compared to 5,000 square feet. they are part of the atm vest buell. in response with the community. most of our loyal customer, even millennials come into a bank branch once every six months. they don't believe they do. they tell you they don't.

they are onlines with the retailers you see like apple, they wouldn't need store, but they do. it's part of the magic of the end. lots of work going on here. how to be relevant and how to know them. i have never seen a prospector come to me and say you are so large, you are so impersonnel, i will join you because of that. i never heard that. they said know me and reward me. make it personal about me. another big issue we are are working on is all things risk. when i joined the industry, if you got your loan book right, the rest of it was insignificant.

during the most difficult time, we have over 2% of the loan to them. that's not that high compared to the editors in the second quarter of this year. we lot of around 1/3 of 1%. credit has never been better. today you have things like cyber risk. you have interest rate risks and litigation risks. foreign exchange risk. knowing your aml risk. lots of other things. another thing we are working on is digitizing the enterprise. how do our children communicate with each other. instant messaging. using data is another huge opportunity for our industry.

our advocacy for inclusiveness starts at the top. we have 14 outside directors of our company. five are persons of color. five are women. that leaves only four others. in fact if i look at my 11 directory reports as part of the operating committee, the average tenure that team has with our company is 28 years. and four are women. we see a disproportionate part of our new household and new small businesses and corporations that come to us and bank with us.

thank you very much for your attention and i will take questions. >> we could go on for a couple of hours, but we are going to go on, but the way we do it, i will try to rapid fire ask questions and the answers we could time it in. wells fargo's big home mortgage business makes it highly dependent on interest rates and the broader economy. when do you think the economy will form well enough to increase interest rates and how will the housing market be affected when that happens?

>> we will hear those comments as soon as we are done here. first of all, wells fargo has about an 18% share in the business. we helped small originators give them money so they can complete or liquefy their mortgage. it's only about 11 or 12%. 7,000 banks and only a few hundred in the mortgage business. secondly, unless you are over 40 years old, you think these rates are normal. when i got my first mortgage, it was 8.5%. my second was in 1980 at 11% and i was darn luck tow get the money. the cost of the house and your

interest rate and what it was on your mortgage. two are in great shape. my suspicion is we are positioned for higher rates and i thought it would have happened by now. i think that whatever it is overtime surely there is a bias towards the upside. >> lender survey released by fannie mae found they will ease over the next three months as demand for mortgages drops. >> this was again that discussion we talked about where we have credit overlays. we have done some of that as a first step to see if we can help

out. i don't want to make plans today. >> in hot urban markets, young people are fining themselves priced out of the home ownership market. how do we make sure that young people are able to achieve it just as previous generations did? they helped with home ownership. we wanted to test this idea as americans lot of interest in owning a home. the monies were used for down

payments or helped to fix up a home so people could get into home ownership. it remains for 2/3 of americans a high priority. probably the biggest thing financially. in some markets, it's a real issue. many young people are saddled with student loan debt. do we have suggests for how to make sure that futer generations don't face a heavy loan burden? >> maybe i should make sure they were on the same wave length. there is student debt. 92% of that is through the federal government. that has almost doubled and so

this is really an issue between the federal government. it's 2.5 times the rate of inflation. the performance in the heist area if you take that, it's eight or nine times that number. it clearly is an issue. the current outlook is relati relatively strong. especially among the young. how concerned are you and how how do you believe they should be tackled? >> as i am optimistic about the

u.s. economy, there some geopolitical and as you saw, china is slowing a bit and the eurozone is treading water. that does have jobs that have not kept up with many sectors and many situations with the growth that has been quite uneven and i worry about the differences. there is different ways to solve for that, but the more we can get business engaged in pyring, people want to work. it's part of the solution and the focus group.

this is a real issue. what in your opinion could stand in the way of future economic growth in america? >> i'm in favor of a good regulation. i want good honorable competitors doing the right thing. that helps us. secondly when washington what i haves badly, you can define that any way you want to, it has an impact on the real economy. we saw debt ceilings and that's hard on the economy. the third thing, not doing things that hurt or help.

anything that helps, i'm in favor of. especially manufacturing jobs. they had institutions that under cut the integrity of the markets. the department of justice hopes criminal charges will be filed in the coming months. do you have any comment on major banks and the announcement today that bigger rewards will be given to whistle blowers. >> i have not seen that report,

but i want to live in a law-abiding country and if there wrong doers, they ought to be accountable. culture is important and we will be better as a people when things are done in an appropriate manner. i don't know what it is, but i'm in favor of holding people accountable. is wells fargo considering expanding and why or why not? >> 97 percent per of people are here in america. if you believe you have a great hand, you are all in. our 3% international business

which we love is mostly doing business internationally. if you look at the regimes around the world. they bring their banks back home if you will. you never say never and what we do internationally is in support of our customers. >> even though most is not in america, you might have a following. tomorrow the scottish referendum takes place. if scotland votes yes for independence, could it affect global financial markets? >> as much as i know about scotland comes in a bottle of

scotch. i don't mean that in a negative sense. i mean that once a year. i don't have a position on that. >> it would come back domestically. if you had spoken six years ago today, in the mid-midst of this crisis, looking back on the crisis, how well do you think the u.s. government responded and how bad could things have gotten? >> i think about that from time to time, but i don't dwell on that. >> it's easy tow go back and monday morning quarterback, but with the levers and the buttons,

think about first and the gse who broke the back of them. there was a lot going on. it was clearly a difficult time. les see if we can make the best of it going forward. >> what would be your prescription for lenders so that the wells fargo culture can help fix the government to work better? let me rephrase that. what would your prescription for washington, d.c. leaders be so that wells fargo culture can fix

the government to work better? >> i'm lucky compared to the government. i have a team who loved working at wells. >> we play us ball. not that me is not important. never at the cost of the plural pronounce. we care more about what they care about than what they know. if we put country first and maybe party second which i know is hard to do.

bee put our customer first. >> more questions focusing on how wells fargo did in the financial crisis. wells fargo weathered the crisis in far better shape than the other mega banks largely because it did not take the same risk. it was as if he was not part of the culture at the time. why was that? >> first of all, we are not on wall street. not that we do sophisticated things for top end clients, but we are very much in the real economy. what you do in the boom times is more important than what you do in the downtimes. i will give you a story. back in 2003 or so, wells fargo

was the largest mortgage company in america. not that we wanted to be the largest, it's just that we thought we were doing a good job for the customers. then we started to hear about negative amortizing loans. you buy a house and say you borrow $500,000 and the interest rate is 8%. you owe $40,000 a year interest which is about $3500 a month. the bank said to you no, only pay us $1,000 a month. we will take the other and add it to your principal. called negative a.m. you oh, more later than what you started with. we said really? how is this customer friendly? how does this help customers succeed financially? that's what we do every morning. i tell our people when you get up in the morning and go to work, the most important job is

not to make money. buffett knows that. all our investors know it. it's to serve customers. the result is to make money. never put the stagecoach in front of the horses. front of the horses. so what we did is we give up market share. we became number two, then number three, others were doing this stuff. and layered risk on, you know, tell me what you make loans and liars and this sort of thing like that. and when it all blew up, that's when we got big in the business because you make your best loans after a downturn not going into one. so, it's just -- it's a focus on customer. we weren't -- i tell you, i didn't see this bubble coming. i didn't see 2008 coming. i've been in this industry since 1975 because i didn't have an appreciation for all that was going on.

we didn't do everything perfectly. we didn't make every right decision, but when you put customer first and really honor that, stick with your customers, good things generally happen. >> thank you. you mentioned mr. buffett, what influence does mr. buffett have on operating decisions? >> he could have as much as he wanted, but he has none because he doesn't ask for it. first of all, warren is just a terrific human being. i'll tell you just a quick story because i could tell stories all day on warren buffett. so i got to know warren just a little bit before i became coo because i play online bridge and any time i need a good shellacking, i play with him. he's a very accomplished player. sharon osberg, one of our former team members, is his partner and they're tough at the table. but once i became ceo, we

started doing a home in home dinner or lunch. so, my first time to omaha to have dinner with him, we went to -- i can't remember if it was pickalow pizza or garages and warren eats a full meal. let me tell you, he has a t-bone steak medium rare, mash potatoes, side of chicken parmesan, cherry coke. and when the food comes, warren grabs a salt shaker in his left hand and one in his right hand and it's a snowstorm. i know a snowstorm when i see one because i'm from minnesota. i said, warren, what does your doctor say about all your sodium. he looks at me like, doctor, really? no doctor and no directions. i said, warren, seriously, this is not good. i said, is health, you know, a strength in your families what's your genealogy like? he said, well, really his father i think passed away earlier -- i can't remember exactly what the time was, but we started talking

about colon issues and colon cancer. i said, warren, that's really important. you have to get a colonoscopy, that's an absolute requirement. he said they took a foot out. i'm great now. i went into the hospital with a colon. i came out with a semicolon. he laughs at this. how much of this is true but he had me going the whole time. here is about warren, i remember another story we were at an event last fall where we had 500 of our bankers together and he was kind enough to come, which is a rare occasion. and we were sitting next to one another on the stage. we were doing an hour, hour and a half side by side, if you're old enough, huntly brinkley, we were doing that side by side thing. and one of our team members --

these are all of our team members. somebody from the audience says to him, mr. buffett, how do you decide what companies to invest in because warren is very disciplined about he has impact that says yes, one says no and one says too difficult. he says you only do what you know. and without missing a beat warren -- i'm sitting right next to him and warren says i like to invest in companies that are so simple to run even an idiot can do it, because sooner or later one will. but warren, what's so special about warren, he takes the long view. and he understands culture. he understands risk. he understands the human nature and we are so fortunate to have him as our largest investor and for us to be one of his largest holding from the best investor the world has ever known. and for those who don't know him, the best person the world has known. he's that good of a person i can't even be objective. >> immigration is one of washington's long-term issues. from the wells fargo standpoint, what needs to be done? do you think more needs to be done to allow well-educated immigrants to come to the united

states? >> well, let me just say, first off, this is an issue that is best dealt with here -- it's an issue that needs to be dealt with. we're a nation of immigrants. my family -- my dad's side of the family came here in the 1850s. since we bank all over the country, we serve many first-generation immigrants and others. we've always won in this country as a team, you know. i'm just hopeful that however it goes that congress will have the will, along with the administration to deal with this issue. >> does wells fargo support the securities and exchange commission advancing a rule that would require brokers to act in the best interests of their clients when providing retail investment advice?

>> you know, i don't know every regulation, every rule, but i think what we're getting at here is going from a suitability standard to a fiduciary standard and i think that any of our 16 or 17,000 wealth advisers want to do that everyday, to do things that are not only appropriate but in the best interest of the client. >> you mentioned the growth in the u.s. energy industry. please could you elaborate on its long-term economic impact. >> in fact, this is one of the most exciting things for this country and without going through a big energy discussion here, let me just tease out a few facts that maybe you know and maybe you don't know.

the value in btus the energy value in a barrel of oil is six times that of an mcf of gas, metric cubic feet, just so we get that on the table. let's say the average price for a barrel of oil in the world is $90. now it's little bit higher if you're talking about this versus texas and there's different terms for that. but that would mean if you divide that by six an mcf of gas should cost $15. if you go to china or southeast

asia price is about $15. if you go to europe, the price is little bit less. they get gas out of russia, so maybe it's $12 or so. what do you think the price of an mcf of gas in the united states is? it's about $4. what do you mean $4, isn't this a commodity? no. well, why don't we just ship it every place over the world? well, you need lng plants. you need to liquefy and you have to get approval from the government. and yet we have this gift of gas everywhere. now, there's controversy around that, but thi rest of the world at a factory of maybe two or three times that we could put into the product finished goods to supply the world with things that they want to buy that are american. >> we are almost out of time, but before asking the last question, one more to go, i would like to remind you about two upcoming speakers' events. this friday, september 19th, our guest will be larry merlot, the president and ceo of cvs corporation. and next tuesday, september

23rd, we will have former senator jim webb of virginia. and finally, i would like to present you with the traditional national press club mug. i've never been inside your office. i think it could maybe -- you would like to have this on your desk. >> i've been waiting for it for years. >> thank you. >> and our last question, as the head of wells fargo, how often do you get to ride in a stagecoach? >> well, i'll give you a quick deal. the stagecoach, if you've ever seen one, it had capacity for 18 people, 9 inside and it's not very big inside and 9 on top. it's actually a very unique design in that they used straps, leather straps as part of the suspension. and it's really an interesting wonderful part of our culture and it's an iconic brand. thank you very much, everybody. i really appreciate it. [ applause ].

>> ladies and gentlemen, ladies and gentlemen, thank you all for coming today. we are adjourned. congress is back in their home districts until after the november election and we want to know what you think about that. it's our facebook e question today. join the discussion. here's what cindy had to say. congress passed over 350 pieces of legislation. that's a lot of work and a lot of legislation. it's all sitting on harry reid's desk waiting to be voted on. don responded, those bills on harry reid's desk is nothing more than deregulation and task breaks, something america has enough of and doesn't need anymore of. the conversation continues on c-span's facebook page. on saturday iowa voters get a look at the candidates for governor in a debate between republican governor terry

branstad and state senator jack hatch. here's a look at some of the ads running up until that debate. four years ago, 114,000 iowans were out of work, unemployment was the highest under 25 years. our state's budget was $900 million in debt. then terry branstad came back and so did iowa. today we have a budget surplus, 140,000 new jobs, unemployment reduced nearly 30%. governor branstad is just getting started. terry's back. iowa's back. terry branstad is building iowa's future. >> he is honest, compassionate. he is a visionary. he is always looking forward, where we can go next to grow the economy. we're seeing that. the jobs are there. our unemployment is low. seventh lowest in the nation. we are seeing young people moving back. more iowans working today than

any other time in our history. i'm optimistic about the future. he has a passion for this state. it's really fun working with him. i'm really blessed. >> after 20 years, iowans are tired of governor branstad, scandals, bad deals and political favors. $110 million bad deal. given to a billionaire. isu economists call it the dumbest decision made in iowa. branstad tried to abolish preschool funding. aren't you tired of terry? it's time for a fresh start. jack hatch for governor. >> there are two men running for iowa governor. terry branstad who supports tax breaks for undeserving corporations. and jack hatch who supports cuts it for middle clags families. the governor gave away $200 million in taxpayer money to a wealthy company, hatch was rebuilding neighborhoods and

putting iowans to work. there's only one thing they have in common, for jack that's one thing too many. >> i'm jack hatch. like you, i'm ready for a fresh start. >> a recent poll shows governor branstad with a wide lead over his challenger, state senator hatch. watch live campaign 2014 coverage from iowa as their debate gets under way saturday night at 8:00 eastern on c-span. the c-span cities tour takes us on the road to learn about history and literary life. we partnered with kom past for a visit to st. paul, minnesota. >> st. paul, i wouldn't call it las vegas, but it was a very lively city. the gangsters brought their guns. during prohibition you had the biggest jazz artists of the decades here in st. paul.

it was a very, very lively place partially because the gangsters were welcome here. virtually every major gangster, kidnapper living with a three-block radius of where we're standing today. john dillinger, baby face nelson, all were here. people don't know that. there's no statues of these gangsters, but this was the epicenter of 1930s crime in the era of john dillinger. the fbi had this building as their headquarters. . this is also the building where all of the those bootleggers and bank robbers were tried and sent to alcatraz and other prisons across america. it's where it began and where it ended. >> we're standing here and looking over the junction of the

minnesota and mississippi rivers. st. paul is located up the mississippi river. and the fort was here before the city was. but the fort is intimately connected in the creation of st. paul. in the 1830s, there were groups of settlers that were living on the military's property. finally the army had enough of competing with them for resources and they felt that they should be removed officially from the military property. the settlers then move across the river to the other side and farm what became the pneumonnuc the city of st. paul. that's what we try to do here is really push people to think more about what does it mean when all these cultures came together. what perspectives do they have on these historic events? >> watch all of our events from st. paul saturday at noon eastern on c-span 2's book tv and sunday on "american history tv" on c-span 3.

michael horowitz testified recently on the process to access justice department information to conduct investigations. the inspector general talked about some of the delays he's encountered. this is about an hour and ten minutes. >> welcome to the oversight hearing entitled access to justice, does doj's office of inspector general have access to information needed to conduct proper oversight. i'll begin by recognizing myself for an opening statement.

on august 5, 2014, 47 of 72 statutory u.s. inspect ares general signed a letter to congress in protest of constraints that have recently been imposed on access to agency records constraints that impeded efforts to perform oversight work in critical areas. the conduct of meaningful oversight by any office of inspector general depends on complete and timely access to all agency materials and data. as such, section 6 a 1 of the inspector general act expressly provides for such excess. restricting or delaying an inspector general's access to key materials, in turn, deprived congress and the american people of timely information which we to evaluate an agency's performance. limiting access except in narrow instances is at odds with the necessary independence of inspectors general and is contrary to congressional intent. the hearing will exam will agency component at the department of justice have

overmined the independence by withholding, filtering, or delaying the essential records based on a novel interpretation of the inspector general act as well as restrictive readings of other statutes. in each of the three instances of interference, we will hear about today a review of agency response with the oig in the mind set that use doj leadership as the ash or it of what information the inspector general receives. they believe they must ask for and receive permission to review department of justice data and material and that sanctions oig investigations as necessary to advance its own advisory responsibilities alone. the mission of doj's office of inspector general is to detect and deter waste fraud, abuse, and misconduct in doj programs and personnel. and to promote economy and efficiency it in the programs. efforts to reduce transparency

such as those described by the inspectors general in the august 5th letter leave agencies vulnerable to mismanagement and misconduct and will not be cone doned. not every inspector general who signed the letter has experienced barriers to access, each one signed in support of the principle that an inspector general must have complete, unfiltered, and timely access to all information and materials available to the agency that relate to that inspector general's oversight activities without unreasonable administrative burdens. i welcome our witness today, the honorable michael horowitz. i am pleased to have him here to describe the challenges he's face and share his valuable insight so we may evaluate for ourselves whether the executive branch is executing the inspector general act as congress has intended. and whether additional action is

needed to restore congressional intent. now it's my pleasure to recognize the ranking member of the committee mr. conyers for his opening statement. >> thank you, chairman goodlatte and members of the committee. i thank you for convening a hearing on this topic. we have an obligation to preserve the continued independence and effectiveness of the office of the inspector general at the department of justice. inspector general horowitz, we welcome you here before the house judiciary committee today. i suspect that members -- membership of this committee is virtually unanimous in recognizing the need for vigorous oversight of the department of justice.

no matter which party controls the executive branch, a strong and independent office of inspector general is key to protecting civil liberties, reigning in executive overreach, safe guarding taxpayer dollars, and preserving the public trust. i have the privilege of having voted for the original inspector general act of 1978. both in the house committee on government operations, then under the leadership of jack brooks of texas and subsequently on the house floor. it's my suspicious i may be the only one that has done those things on this committee. i've reviewed the 1978 committee report, accompanying the passage of the inspector general act house report ate-5 a 4.

it was our intention then and remains our intention today that, quote, each inspector general is to have access to all records, documents, et. cetera available to his or her agency which relate to programs and operations with respect to which the office has responsibilities. simply put, the inspector general is to have complete and direct access everyone emphasized to all the information he or she deems necessary to conduct thorough and impartial investigations. recent legal analysis by the fbi's office of general counsel, unfortunately suggests otherwise. they reason that the inspector general act actually prohibits the fbi from sharing certain sensitive or confidential

materials. included but not limited to grand jury information, title iii wiretap information and consumer credit information. members of the committee, i find this analysis wholly unpersuasive. nothing in the inspector general act authorizes the department or its component agencies to refuse even these materials to the inspector general. began borrowing from the 1978 report, the act was designed to assign to each inspector general primary responsibility for auditing and investigative activities relating to programs and operations. that's a direct quotation. it's difficult to imagine how the inspector general of the

department of justice might conduct those auditing and investigating responsibilities without full access to relevant court documents, intelligent reports, or financial records. it's also difficult to imagine how the inspector general might conduct effective oversight of the department of justice if the materials it requires can only be obtained with the permission of department attorneys. to be clear, the current leadership of the department of justice has taken extraordinary steps to make sure that the inspector general has eventually received access to the material he seeks in each before us today.

attorney general eric holder and deputy attorney general james cole are not the problem. they are both intervened personally on multiple occasions to overcome the fbi's objections and to compel production of the materials in question. i commend them for that leadership. but i do not know who will hold these posts in future administrations. we should not be willing to entrust this key oversight matter to men and women who may feel differently about the effectiveness of the office of inspector general.

in may of the year, deputy attorney general cole asked the office of legal council to issue a formal opinion resolving this dispute. i hope the principle deputy assistant attorney general karl thompson and his team would adhere to the plain text of the statute and to our obvious intent and grant the inspector general unfettered access to every document in the department's position. if the office of legal counsel find ambiguity to hold in place any of them on the inspector general's access to information, the house judiciary should be the first to act to correct their mistaken impression. inspector general horowitz, we welcome and we look forward to your testimony today. and to your assistant's legislative response is indeed required. i thank the chairman and yield back. >> the chair thanks the

gentleman. and chair understands that the gentleman from ohio would like to make a brief statement welcoming the inspector general. >> i thank the chairman. i'm looking at the letter you signed along with a bunch of other inspector generals from august 5th of this year. the first paragraph talk abouts serious limitations on access of record and the second paragraph department of justice recently faced restriction. i was going to say welcome to the club. it's no -- i think it's noticeable that four of these six republican members here are also from the oversight committee. i know, we have a hearing tomorrow on the very issue. we have been frustrated from the kind of response we've gotten from the internal revenue service and the department of justice. we share your frustration and want to commend commend you. i've been impressed with your service to the pubic. this is critical. thank you for the hearing. thank you for your work and being here today. >> the chair thanks the gentleman. all other opening statements will be made a part of the record. we thank our only witness for joining us today.

if you would please rise i'll begin by swearing you in. to do you swear the testimony you're about to give should be the truth, the whole truth, and nothing but the truth so help me got. thank you very much let the record reflect that the inspector general responded in the affirmative. as inspector general, he oversees a nationwide work force of more than 400 special agents, auditors. previously worked as an assistant united states attorney for the southern district of the new york from 1990 to 1999. after this he served as in the criminal division at maine justice as deputy assistant attorney general and chief of staff. he has also spent time working in the private sector most recently as a parter. he earned his juris doctorate magna cum laude. we appreciate your presence today and look forward to your

testimony, your written statement will be entered into the record in the entirety and ask you summarize your testimony in five minutes or less. thank you, welcome. >> thank you, mr. chairman. congressman conyers, members of the committee. thank you for inviting me to testify today. information agency files go to the heart of our mission to provide independent and nonpartisan oversight. that's why 47 inspector generals signed a letter last month to congress expressing their concern about the issue. i want to thank the members of congress for their bipartisan support in response to that letter. the ig acted by congress in 1978

is crystal clear. section 6 a provides that inspectors general must be complete, timely, and unfiltered access to all agency records. since 2010, the fbi and other department components have not read section 6 a in that manner. therefore, refused request during the review for relevant grand jury, wiretap, and credit information in their files. as a result, a number of our reviews were significantly impeded. in response to the legal objections the attorney general or the deputy attorney general granted us permission to access the records by making a finding that our reviews were of assistance to them. they also stated their intention to do so in all future audits and reviews and we appreciate their commitment to do that. however, there are several significant concerns with this process. first and foremost the process is insistent with the act. the attorney general should not have to order components to provide access to records that congress made clear we are

entitled to review. second requiring the oig to abstain permission from leadership seriously compromises our independence. the oig should be deciding which documents it needs access to not the leadership of the agency that's being overseen. third, while current department leadership has supported our ability to access records, agency leadership changes over time and our access to records should not turn on the leadership. further, we understand that other department components that exercise oversight over department programs and personnel such as the office of professional responsibility given access to materials without objection. this treatment is unjustifiable and results in the department being less willing to provide materials to the oig presumably because the oig is independent while the opr is not. this highlights the lack of

independence from the department's leadership, which can only be addressed by granting the independent oig with jurisdiction to all alleged misconduct of the department. the independent oversight made the same recommendation in a report earlier this year and bipartisan legislation has been introduced in the senate to do that. they asked the office of legal council to issue an opinion addressing the legal objections raised by the fbi. attached is a summary regarding these issues. it is imperative that the issue it's decision promptly. the existing practice at the department seriously impairs our independence. in the absence of resolution in a timely manner. it also has an impact on the morale of the auditors, analysts, agents and lawyers who work extraordinary hard every

day. far too often they face challenges given time ly access to information including even with routine requests. for example, into ongoing audit, we had trouble getting organizational charts in a timely manner. we remain hopeful that concludes it is entitle the to independent access pursuant to the act. however, should it in a manner of results that limits our ability to access information pursuant to the ig act, we will request a prompt legislative remedy. it saves taxpayers money and improves operations. have substantial consequences for our work and lead to incomplete, inaccurate or delayed findings or recommendations.

will issue a legal opinion finding that section 6a means what it says. this concludes my statement. . >> i will begin questioning. the only explicit limitation on an inspector attorney's investigation within a jurisdiction for 8e of the inspector general act. it provides the attorney general with the authority and carefully circumstances to prohibit the office of inspector general from carrying out an audit or investigation. to invoke section 8e the attorney general must explain the reason for his decision in writing and make a determination that a lip limitation on an ig's limitation of authority to disclose certainly described categories of information or

prevent significant impairment to national interest. my question to you is, has attorney general holder at any time during your tenure used this formal procedure to limit your office's access to material essential to. he has not. that's one of the arguments we forward, which what congress set up to limit our access, if there are sensitive matters. that's the provision that it simply is not a standing objection to our access. >> in your experience, prior to your troubling experiences with the three reviews you site in your testimony, had any department of justice component ever asserted the right to make unilateral determinations about what requested documents were relevant to an office of inspector general review. >> to my understanding from speaking with others in the agency, that had not happened before 2010. >> how valuable is your

authority to access grand jury or other sensitive material to your ability to execute rigorous oversight of national security matters? >> it is critical, mr. chairman. these are the tools of the trade for the fbi, other law enforcement agencies. if we can't access every piece of information in their files, with oversight of the fbi's use of these tools and its handling of various national security tools, we won't know the full answer to what's going on. >> and according to your office, the fbi's information is unsupported by law and contrary to the inspector general act and the general rule of grand jury secrecy. would you outline the three reasons why the office of inspector general is entitled to access of the grand jury material that the fbi claimed was privileged. >> certainly. first and foremost, 6a of the act could not be clear as congressman just outlined in his opening statement. it is crystal clear.

that's the primary reason. secondarily under the grand jury rules prior to 2010 we regularly obtained grand jury material because we have attorneys for the government working for us. i'm an attorney, we have a number of attorneys working on our staff. that would be the other exception. and third, in the national security area, there's an additional exception in the grand jury rules that has before 2010 been used to get us grand jury material. so there are at least three reasons why we should be getting this material. >> you testified earlier that at no time has the attorney general complied with section 8e and given you testimony -- or a statement in writing, as to why material would not be provided. have you had the opportunity to have any verbal discussion with either he or the director of the fbi as to why they are choosing not to make this material available to you? >> i have raised my concerns with both of them and the response from the department has

been, most recently, to send the matter to the office of legal council to evaluate the two. the fbi's competing legal argument and that is where the matter currently lies and has for several months now and it is very important that opinion be issued. it should be clear that we are entitled to it. but if there is a contrary ruling, we want to know it sooner rather than later so we can work with congress to fix the problem. >> has there been any previous opinions put forward by the office of legal council with regard to this issue? >> there have and that again is one of our points. which is in 1984, prior tower existence, which we came into existence in 1988, they found that the office professional responsibility was entitled to access grand jury information.

we are at a loss to understand why that same opinion wouldn't apply us to, given we have the same oversight responsibilities and on top of that unlike with opr, congress found that we should be getting thee materials and put a provision in law that says that. >> thank you very much. chair recognizes the gentleman from michigan. >> thank you, chairman. you have anticipated some of the questions i was going to ask and i thank you for raising them yourself. just so that we're clear, mr. horowitz, am i correct in characterizing our discussion about the correct reading of the inspector general act as nonpartisan in nature? >> correct. >> all right. >> we have in our possession

several letters written over the course of late 2011 from attorney general eric holder and deputy attorney james coal. in each of these letters, over the objection of the fbi general council, the department grants you access to sensitive material. as recently as last thursday and his response to your office's report on material witness statute, the deputy attorney general again pledged, quote, to provide your office with access to all materials in to complete our reviews consistent with existing law. are these fair descriptions of the role of the the department leadership in this debate? >> yes, as i mentioned earlier, the department's leadership made clear they will continue to issue orders giving us access.

so our issue isn't with getting these documents, it's, frankly, the process that's laid out compromises our independence. have the attorney general and deputy attorney general been helpful to you? >> yes. in getting us these orders, they have been helpful. in issuing these orders, they've been helpful in getting us the access. >> now, as the only member of the committee that was voted for the 1978 act, i agree wholeheartedly with your testimony. congress meant what it said in section 6a of the act. inspector general must be given complete, timely, unfiltered access to agency records. in your opinion, why did the

general council of the fbi feel compelled to arrive at a different interpretation of the same statute? >> i would be speculating, frankly, as to what the motivation was. but there's, i think, it's clear as you've indicated from looking at the opinion and you have it, it's attached to my statement, that the ig act, i think, trumps the arguments quite clearly. >> well, i hope the office of legal council issues a strong opinion giving your office unequivocal access to the material and information that you require. and this committee is going to be watching that very carefully. i thank the chairman and yield back the balance of my time. >> thank you, gentlemen. the chair recognizes the gentleman from california, mr. issa, chairman of the oversight committee for five minutes. >> thank you, mr. chairman. general horowitz, thank you for

your courage. for the inspectors general to write a letter appealing us to over the people who appointed them but will not let them do their job and to have more than half of all of the igs do so is clearly unprecedented. and i commend you for your courage. i have no doubt that this administration will attempt retribution against all of you. that is their pattern. you won't say it, but i will. this is an administration that believes justice delays is justice given. they have delayed it every step. so although, the distinguished ranking member is absolutely willing to say all the right things, he made one error. the fact is, there should be no commending of a man who sat in your chair, the attorney general

of the united states, and told us he wore two hats. one being a political hat. because the fbi does not operate in a vacuum. that information can be made available to you over the objections of everybody who works for them. and the policies that are in place are his choice. now, i'm going to ask just a few quick questions because you and i will be together tomorrow next door. one of them is, is there any basis, not just with your shop, but with any of the 74 inspectors general, any of the 12,000 men and women, is there any basis to see that igs have not been good stewards of confidential information over the many years since the act was enacted? >> we absolutely have been. we have handled, in my office, some of the most sensitive matters, including the hanson matter, the christina leon matter. we handle these matters entightly appropriate and consistent with the law.

>> isn't it the practice of who you see and quite frankly across the department of justice, fbi and all of the other agencies, atf, isn't in fact one the most important tools the clandestine nature of discovery, isn't in fact a good fbi investigation often done in a way in which the target of that investigation is not aware that they are a target until a substantial amount of information has been collected. >> that's correct. >> so the very requirement for you to ask for access, doesn't that essentially negate the ability for you to look through such information as you need and perhaps extraneous information, so as not to always have the targets always know you're coming and potentially thwart your investigation? >> it is. and i would note that in those earlier reviews, for example in the hanson matter, we had direct access to the information. we didn't even have to go through the process we are now going through that is creating the problems we are facing. >> i guess once of the, i always

say last question, and i don't really mean it, as you know. but an additional question, is if in fact the target knows and if your statutory limit is in fact only against current employees of the department you're involved in, doesn't any delay cause the likelihood that both political and nonpolitical appointees will move on. either through retirement or transfers? >> we face that problem frequently, i've learned, in the last two years, that individuals under review or investigation retire, move on to another job before we're able to complete our work. and there are an innumerable number of issues that we face that are problematic. >> and just hypothetically, let's say that congress is interested and sends you a letter because we are concerned about people doing the lowest learner irs targeting investigation, are in fact tainted in some way.

either because of their conduct or some other matter, and you agree to look in into it, isn't that a classic example where it has to be done timely or irreparable harm to the process concerns. >> it sim perative that we be able to do them timely, and we are not able to do that right now. in a number of our ongoing reviews. >> well, mr. chairman, mr. ranking member, i want to take a moment to say one of the few areas of specific legislation, one of the oversight committees, is in fact the inspector general's. tomorrow i will take a hearing and draft legislation on a bipartisan basis over the last several years work working with the inspectors generals and with their oversight groups. and all through that

legislation, and i hope both of you and your staff will look at it ahead of time, give us your input. because i think today's hearing here, tells us that we must, as a body, restate some principles and make reforms to make it clear for the next president, next administration, that we really meant what they legislation said. and i yield to the ranking member. >> thank you. may i ask unanimous consent that gentleman be given one additional minute. >> without objection. >> thank you very much, my friend. but i do not think that i am in error in commending either the

attorney general or deputy attorney general. because since 2010, when the fbi service advanced this argument, the leadership of the department of justice has bent over backward to make certain that the office of the inspector general has access to every last shred of evidence it requires. attorney general holder, deputy attorney general coal, personally have at least a half dozen times -- >> i thank the gentleman. i just ask mr. horowitz to comment on whether those interventions in fact represent the kind of timely and unobstructed activity. particularly when ranking members said six times. isn't once enough to show leadership and six times a pattern of obstruction that you're not able to overcome? >> i would say that the problem with the process, as i laid out, is significant in terms of our independence. it also delays reviews because we have to keep going up the chain to get to the leadership. and that's the continuing problem we face. which is why the leadership made

the decision to send it to the office of legal council. we need that decision promptly. that's what we need to hear right away. thank you. time, gentlemen, has expired. chair recognizes gentleman from texas, miss jackson lee, for five minutes. >> let me thank you the gentlemen for being here. and helping us through what are important issues. and i certainly hope that we're not on another chain of condemnation, following the obama administration, that we are actually trying to get to the facts that will help the oversight of this congress and as well work with the ids at various agencies. i understand that the doj, epa and peace corps, certain peace corps shocks me, because humanitarians around the world, we hope there is nothing they're doing, sending great americans forward to be of help.

but let me -- have you had an absolute bar to being able to address issues that have come to your attention, meaning there have been an absolute dropping of the iron i got, steel gate, concrete wall. what have you faced in trying to do the work of the inspector general? >> the issue hasn't been a roadblock to our undertaking reviews. the issue has been getting the information to timely complete them. that's been the big problem. >> you know, that is a distinction, to be very honest with you. i want to help you find a system that works. but as you well know and as i as a practicing lawyer previously, i use the term discovery. and many times, particularly if we are in litigation against one of the big guys, there are several ways we can interpret discovery. one that they are in essence roadblock org that the

documents, whether it is a governmental entity, that we have immunity issues. but if down in the bowels somewhere, my question to you is this an issue of getting a system that works because they are in the bowels. remember we have gone tech. but five years ago or ten years ago as many of us star in the united states congress for example, we were all paper. we packed up papers at the end of the session. we boxed them up. we labelled them. they were somewhere in distant mind. can you discern that we are speaking of what every american understands. i filed it away somewhere. but where is it? would you?

>> great find, congresswoman. in fact, respect, we feel like civil litigant where we're opposite the party that's going through documents and having lawyers look through documents. for example, at fbi now, the process in place because of their legal position, what they are entitled through legally. all of our requests go through the office of council. >> are you saying it is good intent. >> they are sending it there because of their legal position. the result is that we have lawyers like civil litigants. we are waiting for their discovery reviews. we end up sometimes getting documents from them and learning what is documents weren't produced. that's the problem with this situation that's been set up. and it has to be resolved, and should be resolved, in a way that gets us access, immediately, frankly. there is no reason for this process, to even be undertaken. >> but let me get you to -- this

is not seen by the ig -- because i'm going to get to the point of a solution. this is not seen in the ig as a malicious intent. is this a malicious intent? >> no, i'm not here to suggest a malicious intent, but the action put forward and the time taken, that's what organizational -- >> and this has gone over a series of administrations. i don't know how long you been here. but this has been ongoing, whether it's been president bush administration, there's a system in place that i'm understanding? >> on the ig side, my understanding is this began in 2010. i started in 2012. but fbi waves its objections -- >> the fbi end of it. >> correct. >> the question is, we are holding hearing here. and i want the hearing intent to be a resolution, not condemnation.

and so i think it is important for us to look certainly as you well know, we're not litigants but litigants each have individual rights. i would have the right to protect my client and therefore in discovery i'm going to make sure that i'm giving precisely what is asked and not something that is just grading. and you on the other side will be the same if you represent a client. we want transparent government. but as well, the fbi or epa or those production documents should be adhering to the law. the structure is in place that came in in 2010. let's see how we can work it better. but fbi has a right to council. epa has a right to council. and have you a right to transparency. am i arguing or making the point that you say you now need a system that allows these documents to come forward? >> and what i'm suggesting is the mind-set has to change. both in our earlier reviews, for example, robert hanson matter. very sensitive matter, we have direct access to information.

no one tries to interpose lawyers in that regard. we are part of the department of justice. we should have and congress set up a system in the ig act as congressman laid out that says we're there to oversee them. if we're going to oversee the fbi, their lawyers should not be going through and deciding and filtering what documents we get and how fast we get them. >> you have just given us a framework. and you're from the doj and i think of them as twinkle toes in terms of the work they do, but what i would say to you is that this is a workable -- you're presenting facts and i want to be clear as i end my query, that, and i know there's a series of sections you have come under and offered sections going forward. as i end, could you precisely just give, is that your suggestion to move that lawyer structure or could you work with a loyal structure that was would then have a structure that would be fair and cooperative with the ig. if you remove them totally,

could you work with that. >> the time of the gentle woman has expired. the inspector attorney general can and the question. >> yes. the lawyer needs to be removed from the process for routine requests. there may be issues that arise that require legal opinion. right now, every request goes that route. we should be able to get direct access to information. the witness, the whistleblower, the witness at the fbi wants to come to us with information, with documents, they aught to be able to do that directly. we shouldn't make have to make a request through legal council, get them eventually, hopefully, and then as i said, learn from other witnesses there are more materials out there relevant for

their review. >> thank you, mr. chairman for the time. and i hope condemnation is not coming forward. i yield back. >> the chair recognizes the gentleman from ohio, five minutes. >> mr. horowitz, i want to make sure i understand your last statement. every single request, information you are trying to get access to, goes through the department of justice council. >> sorry, fbi, office of general council. >> the fbi has? and you're saying that is not political? >> the office of general council is not a political appointee. >> i understand, but -- >> to send it through office of general council -- >> how long ago did that practice start? >> within the last two years. two to three years, sir. it may have been just before i came. >> i'm concerned about all your work but i'm particularly

concerned about one issue that's been a focus of the oversight committee and other committees. and that's the targeting by the internal revenue service of people exercising their first amendment rights and frankly have been very disappointed in the criminal investigation. then fbi director muller sat in the chair you are sitting in and was asked who is the agent, who was assigned to the case and have you interviewed victims. his answers were i don't know, i don't know, i don't know. didn't exactly inspire confidence at that point. since then, there's been, early this year, the leak by someone at justice that no one is going to be prosecuted. the president's now famous comment, no corruption, not a smidgin and of course the lead agent has maxed out contributions to the president's

campaign and yet she is the lead agent in -- or excuse me. not lead agent, but lawyer in this case. you signed with 46 other inspectors generals. it says this. access to certain records available to their agencies that were needed to perform their oversight work in critical areas. so i want to know, what were so i want to know what were those critical areas. were you denied access to oversight work and critical areas? were any of those critical areas relative -- related to the situation at the internal revenue service and the criminal investigation that's going on there? any inquiries in that subject matter that you were denied access to? >> no, that is not an area that i was referring to. >> anything related to that? i know we have asked you to look into certain things. we've asked you specifically, i think, to look into the fact that ms. bosserman was selected to head up this organization. so you didn't face any restriction or denied any access to information regarding that?

>> we have not faced any document restrictions with regard to that matter. >> are you -- so changing gears a little bit then. one of the other issues we were very nervous about brought to our attention a few months ago was the fact that the internal revenue service gave -- to the fbi regarding the targeting issue. that information was given to the fbi in 2010. 1.1 million pages. some of that information contained 6103 confidential taxpayer information donor information. >> uh-huh. >> are you aware of that issue, mr. horowitz? >> i am from the news stories and various -- >> has your news looked into that at all examine any of that information at all? >> we try not to talk about matters that are nonpublic in my office and what we might be or might not be looking at. >> let me ask you this way, are you concerned about the fact that the justice department,

specifically the fbi, had confidential taxpayer information, they had it for four years? >> yes, i have noted that information and taken note of it. >> okay. last question then, just to be clear though, none of the access you were denied -- information you were denied in your oversight work dealt with the internal revenue service? >> that's correct. >> okay. mr. chairman, i yield back. >> chair thanks the gentleman. recognize the gentleman from utah, mr. chaffetz, for five minutes. >> i thank the inspector general, his efforts and i had the pleasure to interact with you on several different occasions. you play a vital role in our system of checks and balances. and we wish you nothing but success and want to make sure that your efforts are unimpeded. so i want to ask you some questions though about operation fast and furious. part of the indication from the attorney general was that he

could not answer questions, would not provide more information to the public in part because the inspector general was doing a review. how do you summaryize your ability to access information regarding fast and furious? >> we had difficulty, and this occurred just before i arrived, and of course then i picked up the investigation. >> right. >> but we had difficulty just before i arrived in gaining access to the grand jury information, because as you know fast and furious raised a number of prosecutive issues as well as title 3 information. there were numbers of wiretaps. we had difficulty obtaining both of those in a timely fashion because of the objections raised by components to providing it to us because they did not read section 6a of the act as giving us authority to look at that information. >> so what percentage of the information could you actually see? >> i'm not sure i could put a number on it frankly because i wasn't here at the time.

>> right. >> i wasn't the i.g. at the time these requests were going on. but i do know there was a fair amount of information that was potentially grand jury information. >> and your interpretation is you should be able to -- talk specifically about grand jury information then also about the other. >> so i think it's quite clear in the first instance is that section 6a and the i.g. act means we should have unfiltered timely access to all records. the agency doesn't get to pick and choose. so that would be the first basis. the second is we have always gotten grand jury information up until 2010 from the fbi and other department components, either through the i.g. act or through one of the exceptions in the grand jury law which has an exception for attorneys for the government. we are, i am an attorney, we are attorneys for the government. i work for the department of justice. that should be, i think, sel

self-evident, but that's not how it's been interpreted by the fbi. >> and how many people report to you in your group? how many i.g.s are you overseeing? >> my office has over 400 employees. >> and so the process now they're having to go and ask permission from who is it specific to the fbi who are are they having to ask permission from? >> so what happens now is we send our requests because we doe don't have unfiltered access. we now have this review going on between our requests and us getting the documents. we make a request, the fbi, the office of internal council looks at it. if it has an objection, it raises an objection. and then we start this process going. >> and what are the so-called objections? what are their excuses as objections? >> well, we've had the grand jury objection. we've had objection to wiretap information, fair credit reporting act information, we also had during the course of our review an objection raised

to personally identifiable information for which there was no base but it took months before it got sufficiently elevated and the fbi withdrew its objection and we got the materials. >> now at one point there was an objection about an organizational chart. can you tell me about that? >> correct. in two of our reviews that has come up. one of the audits, an fbi-related matter relating to cyber -- our review on cyber. the witness we were speaking with was prepared to hand us the organizational chart that we asked for but was told -- but we were told he couldn't do that because it had to go through this process at the office of general council to review it. so we were delayed for weeks. i actually had to send an e-mail to the general council saying i don't understand how this can be the case. >> a simple organizational chart. >> a simple organizational chart. in addition recently with the d.e.a. we requested an organizational chart. we got an organizational chart with names whited out. we went back and said, well, we

need the names because one of the purposes is to see who we need to interview. and we then got a makeshift unofficial organizational chart with names. i had to elevate that to the administrator in order to get the organizational chart we were looking for. >> mr. chairman, i'm so glad we're holding this hearing. i'm glad we're doing so in the oversight and government reform committee tomorrow as well. that is outrageous. the inspector general should have unfeddered access to all the information they want. and when it's gotten to the point where they can't even see an organizational chart, it's reached the level of absurdity that must be addressed immediately. i appreciate the bipartisan notion on this. and i yield back. thank you. >> the gentleman yield. happy to yield. >> the gentleman's point is well taken because not only does the organizational chart give an indication of who they need to talk to, it also gives information to who should be held accountable and accountability is, i think, a very serious issue in any

government but certainly an issue with this government. at this time it's my pleasure to recognize the gentleman from north carolina, mr. holding, for his questioning for five minutes. >> thank you, mr. chairman. limitation that's unique to daj, the department's oig does not have authority to investigate all allegations of misconduct within the agency. so while the oig or review of alleged misconduct of nonlawyers at daj under section ad -- does not have the same jurisdiction over alleged misconduct by doj attorneys when they're acting as lawyers in the department. if you could explain for us, you know, how this distinction came about and kind of how the process works? >> this is really historical anomaly. it's because of the fact opr existed before we did in 1988 and when our office was created in 1988 by congress, they

decided at that time to keep opr in existence and have this jurisdictional limitation so that all matters went to opr. for many years opr had experienced doing these matters. and so they should have authority. we're 25 years later now. we have been given misconduct by all the other parts of the justice department. we've exercised that appropriately, effectively and most importantly independently. it's time for us to have authority over all misconduct. there's no reason that agents alleged misconduct should be reviewed by the oig. but attorneys get to go to a nonstatutorily independent body for their conduct to be reviewed. >> are you advocating, i guess, for -- if you're advocating for that, would opr continue to have a role at doj or passed its usefulness? >> i think that would be a decision congress would need to make. in the past when congress has created these situations, they've kept in place for

example the fbi's opr. and what has happened now is we have writer first refusal. so we take the most sensitive cases, the cases where there needs to be independent review, where there's high level officials involved, and opr for dea, fbi, the marshal service, et cetera, handle the other matters. that could stay as the process, or congress could decide that we should have all attorney misconduct no matter who or what it is alleged to have done. >> all right. in addition to opr there's the doj's national security division oversight section as well. and as you've put forward in your testimony they're provided access to the information that the oig has had trouble accessing despite the language of the statute. so what is your understanding as to why doj leadersis