of them said that suspects were abused and misled in order to keep them from a true islam. the program seeks to reinforce the official state version of islam. this struck me as being a little bit remarkable. those who are familiar with the official saudi understanding of islam will understand a couple of things right away. number one, this is one of the most intolerant brand of islam in the entire world, without question. toward the other sex, toward other faiths, etc. the second thing is that when you look at the ideology of a group like al-qaeda, for osama enlighten -- osama bin ladin,

his leadership is about living up to the principles of the faith. . . dealt with in a peculiar way. that is, they have an austere vision of islam which the monarchy cannot live up to because they live in the real world where you have to engage in diplomacy and compromise on certain things. as a result, they have been trying to channel aggression abroad for decades as opposed to focusing it on the monarchy. in the book "holy war" they use -- the author uses this phrase about spending a lot of money trying to create of aggression abroad so that is not aggression at home.

the one of the things that is an unfortunate outcome in a state with a very few civil liberties and a set of ideals that the state can never live up to. the reason i bring this up is not to say that the saudi rehabilitation program cannot work. perhaps it can, but one question that you get into is the religious debate is about how people have strayed from the official saudi version of islam. that creates the question as to how much people's minds are changing. and moreover, if we're looking productively -- predictably at and what is happening, we have key predictions. in saudi arabia, we have a history of people undertaking jihad outside the kingdom. perhaps, if people are being inculcated in an official saudi islam, one thing that you can predict is that you will get a high recidivism rate not directed at the kingdom, but directed elsewhere.

like say, against u.s. forces in iraq. to that extent, that is where marissa and i part ways on this issue. this is not something that she raised in her speech, but in foreign policy she argued that perhaps the best solution is transferring yemeni detainee's not back to yemen. and i agree with her there. but she says to saudi arabia, and i am not convinced of that. for particular prisoners who are the kind that we would want to release, who are not as radical as some of those we are most concerned about, will inculcating them in the saudi a ideology, which is exactly what the report claims to do, and of making a safer? -- end up making us safer?

the ideas at the heart of these programs, we will have a -- if we do not look at the ideas at the heart of these programs, we will have a blind spot. unless this situation changes, i think we are going in with stories of the deradicalization who are not looking at the big picture. thank you. [applause] >> nawaz the moment you have been waiting for, your opportunity to ask an actual -- now is the moment you have been waiting for, your opportunity to ask an actual question. as the microphone comes to you, tell us your name and affiliation and please ask an actual question. and i would ask you to rephrase your comments into a question. we will start here. >> i'm debra brice. this question is for daveed.

the could you comment a bit about the senate hearings on the deradicalization programs and i have a specific question, which sounds ridiculous to me. they keep asking, how radical is it ok -- give me one second to collect my thoughts. they keep asking at what point is radicalization going to turn into something violent where we have to stop it? that seems to me the wrong question. >> i actually think it is the right question and it is a very difficult question to answer. there is clearly a gap between radical beliefs and terrorism. this is something that our nation is founded upon. the first amendment is based upon the idea that there is a difference between radical beliefs and actually undertaking violence.

that is why you have people advocating communists, islamists, a wide variety of people who get to express their opinions. and you have people who are somewhere along the path. the nypd has studied radicalization, which has been much criticized, as a force that process. beginning with pre radicalization, into a doctor ration -- indoctrination, into ideology, and self identification with it and finally into where you are undertaking violence. the vast majority of people who start down this path toward radicalization and up at some point of turning back. what is the gap between radicalization and violence? that is something that researchers are looking at, and it is an important question. i do not know that there have been any satisfactory answers, but i do not see a problem with asking it.

>> do you want to comment? >> my one comment on it is that you can be radical without being violent. to clarify about when i was talking about the deradicalization programs versus those that are focused on rehabilitation, i would argue that you have to be closer to the rehabilitation focused than the ideology. you can be radical and have radical thoughts without committing to join a terrorist group or committee and terrorism. we have to be most concerned with the action and activities than the ideology. also understanding that there are those that have committed that can have their minds changed. bringing it back to the deradicalization standpoint, that question is very important in determining how to develop a program and what it should look like from the outset. >> this lady was next. >> i'm terry hart, a private

consultant. my question is, would one or both of you please explore in greater detail the use of art therapy as deradicalization or counter radicalization, the pros, the cons, the success rates. thank you. >> the results of complementing a detainee's painting skills when i was there a few times ago is i now have at a painting by one of the saudi detainee's hanging in my living room. but the first instance of a program that i have seen, in looking at a saudi example, it was used as another way to get at the psychological source of the detainee's radicalization or mental issues that he might have. the way it is played out there is using an art therapist who works with the detainee is to

try to get them to paint their emotions. it sounds a bit silly, but you see it over the course of their art work and how they are trying to release some of their emotions because of the radicalization of or the violence. you cannocould doubt it and it s pretty cool, but i think that there is a therapeutic element of it. but there is also the idea of keeping them busy and engaged in something else they can be doing to express themselves when they are in detention. this is the element of it that is being implemented in afghanistan. when i was just there in december, they were starting to implement programs to give the detainees other options while they were in custody. i spoke to the woman in charge of these efforts.

she started bringing in string, the thread that they used to make certain jewelry and beads and things like that in afghanistan. the detainees were given opportunity to make trinkets for their families, their wives, even sometimes the cards when they develop a report. it is interesting -- even the guards when they develop a rapport. the detainees in bagram who have historically been the most violent against the guards, the ones that have been most committed, those that will never change their minds a, when they have been given this opportunity of rehabilitation, suddenly, there is more report with the guards, less violent activity within their cells -- there is more rapport with the guards,

less violent activity within their cells. it may be strategic in how it paints a picture of detention in a counter radicalizing tool, but you also have the side benefit of making detention effort safer for for both -- safer for both the guard and a detainee. it does play to many different elements, depending on how and where it is implemented. >> the saudi arabian, they have unlimited resources, so if they want to throw money at it, whether it works or not, they cannot really waste money. by the way, that is not mockery of your point. i think we're making some good points. but if you have so much money, you can give them cars, apartments, you might as well give them art as well. >> in the back, and then in the front next.

>> a couple of questions, if i may. >> your name? >> [unintelligible] at the institute for international studies. one of the things that there has been a lot of controversy over is the recidivism rate and how you measure that and what you describe as recidivism. you quoted 20%, and there have been studies as low as 14% and others that have said is as low as 4% or 5%. lahooto some of, how would you e recidivism, basically -- to sum up, how would you define recidivism, basically? and there is the spectrum that you run on, basically. should we change the terminology away from deradicalization to

what you used now, which is rehabilitation? it is the idea -- is the success just to move away from violent acts, and also -- just to move away from violent acts? or also to move from arlin? and away from -- a move away from violent acts as well as radicalization? >> to go ahead, this is actually one of the points that i wanted to raise. john brennan -- you have john brennan's famous remarks on this where he compared the recidivism rate of 20%, when he was speaking at the islamic center. he said sometimes people use this percentage and say, oh, my

goodness, 20% return to terrorist activities. but in the u.s., something like 50% return to committing crimes, so 20% is not that bad. i completely disagree with that. first of all, to look at what constitutes recidivism, there is a good question about that. a lot of the recidivism evidence, we are basing it upon pentagon figures. from open source information, i cannot get the 20% figure. but the pentagon says, and nobody is seriously challenging this, that the recidivism rate to terrorist activity is about 20%. the reason i have a problem with crandon's remark in this regard, is first of all, -- with brennan's remarked, is first of all, it is 20% right now.

and over time, more people will be released. but the figure has been climbing consistently and i expect it to continue to do so. there is a little bit of an apples to oranges comparison when you look at a 20% rate, which is not that bad. you're comparing it to the overall rate with everyone in the penal system in the u.s., including both violent and non- violent crime. terrorism is inherently violent activity. if you look at the broad spectrum, some have low recidivism rate, such as singapore that has done quite well. but it is important not just to keep this in the context of islamic terrorist deradicalization. look at columbia, for example -- columbia, for example. the recidivism rate was only 5% for those who@@@@

of language. >> it's a great point and i've speant lot of my time in research trying to think of how to reframe and changing the name as part of that and i haven't scom up with a better name yet. so if anybody has a suggestion, pass it on. but you're right. is it reforming the terrorists? i don't think it's reprogram, i don't think it's necessarily deradicalizing. unfortunately, rehabilitation may ignore entirely the ideology, which as you mentioned, is a part of it. woe might differ on how much a part of it, but it's someplace in between. so i don't know if there's a perfect word out there as of

yet. but it is a good point that we have to sort of rethink through understanding these programs. but just to follow up on the residive. issue. not to dispute the numbers or how to measure them. but i would argue that it should not be the bottom line of how we're measuring them. over time, more will return to the fight. not because there's more out there but the process of returning to bad things takes time, but we're letting out worse and worse people in some instances because of political or legal reasons, more hard core individuals might be released from custody. and also, because it takes a long time to measure something like this. a programs that's been around for a couple years and released a handful of people, there's no way to tell. but i think we need to look at how we're assessing the people in custdepi and how the program is making impact wider than the tabtcal aim of the individuals in custdepi. which gets back -- custody.

so that gets back to looking at it from a strategic perspective. and the singapore thing, we all need to remember that security efforts are a tool as part of these programs as well. in saudi arabia and in singapore, which is a heavyly secured state, and they are using that as part of the tool post release. which is a heavily secured state. they're using that as part of the tool for post release. >> to you all agree that this is an interim question that you can incorporate into this general -- this gentleman's question. the you agree that we are one attack away from departure from these programs if it is proven that a person we have in custody who went through a rehabilitation program conducts and effectively carries out a large-scale attack in the u.s. and? -- in the u.s.?

i'm sure you hear that when you are out on the road. and we will go to this gentleman. >> i am with the center for human rights in saudi arabia. i want to thank heritage foundation for keeping these events going on. keep it on the forefront because it is not going to go away. i have not met your friend yet. i am from saudi arabia. i know a little bit about the country and the way oil is used and i'm very aware from the region that the head of the al qaeda in yemen went through this rehabilitation process. i am also aware that the rest of these rehabilitated people -- by the way, is reprogramming.

they were programmed to kill and to keep killing other people, but not us. that is with is -- what is. i didn't know if you are aware, but most of these people -- not all of them -- in this rehabilitation program are not actually used by the interior ministry to fight, kill, incarcerate or keep the alliances in saudi arabia a line. those go back to where they were before. the rest are being used by the saudi authorities to control minorities. my question is, what is the difference and the objectives -- and i agree that, one of you had

mentioned that there are more reasons for terrorism than just religion. religion is a tool because the saudis, the only thing they know is religion. they have been brainwashed from childhood until they die. in terms of objectives, what is the difference between the objective of the saudi government, religious clerics, and bin laden? the reason i'm asking this, they believe there should be no woman's rights, and the religious right, no religious freedom, no rights for minorities. but what is the difference? what is the difference between the people that we think are going to save us and the people that are going to kill us? >> first of all, i think you might have been a plant in the audience because you did raise the interesting point of how the saudis use those detainees and

better successfully graduate of the program to help with the counter-terrorism efforts. this is a little known fact that counter-terrorism effort -- experts and those in the system would say that there is a good side to this program. sometimes we can flip a detainee to help us with -- after the fact. this becomes more widely known and might actually prohibit them from rejoining the group's if they are -- if it becomes well known that they are working for the government. i'm going to use this as an opening to describe, to go back to the program itself a bit and appreciate the saudi program. yes, it is publicly proclaimed to be a religious the base program with an ideology of

changing the minds of the detainees. however, if you look at what is going on with the program over time, having visited it a number of times in the past four years and looked at what is going on there, i see that over time they give them more rehabilitative efforts, give them something to do when they get out, reintegrate them into society. no, the saudi government is not likely to say that they are changing their approach from the ideology because the legitimacy of the government is predicated on religion, on ideology. but i think that we should recognize that when we are looking at what is most effective, even a program like that over time has actually become more and more inclusive and focused on the rehabilitation efforts. i'm using your question as an opportunity to explain that and i think it is important to explain this? these programs. >> the question was much more of an argument and is an argument

that i agree with. when you look at the official saudi version of islam and people who have been radicalized and what they believe, there is not that much daylight between them. that is an inherent problem. when authors write about this, and i provided a few statements before that were meant to be reassuring, i sat there and thought for a while, what is the difference? the main error that they have made was deciding to attack saudi arabia. understanding what is being taught -- look, i agree. there are rehabilitative efforts that go beyond that. one thing i like about the saudi program is those rehabilitative efforts, drawing in the family, for example, and the programs that can be described as aftercare with jobs and the like. those will work, but the main

way they will work is increasing much more stability for saudi arabia. i am not convinced that the programs and of creating more stability at large. in part, when you look at saudi arabia, they openly allow terrorist finance years to operate, and you can name them. they have been designated by the u.s. my former employer is a major financier of terrorist organizations throughout the world. you can find saudi money going to somalia to go to -- and to groups in iraq and afghanistan. does that make us safer? i know it makes the saudis safer. i am not convinced it makes us safer. in many ways, this comes back to the question of ideology, which need to factor into the analysis. look, there are many other factors as well. it is not just ideology. everybody agrees on that. but as much as -- if ever one can keep -- if everyone can keep

that as a about crown question -- as a background question and not a forefront question, we will not have these programs function in the way that we would like to believe they will. >> ladies and gentleman, thank you for coming and please thank the panelists. we are adjourned. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] . .

>> the house subcommittee looked at how credit scores are used when consumers apply for things such as mortgages and car loans. this portion of the hearing lasts about 1 hour, ten minutes. products. luis gutierrez of illinois is

of this hearing. it's about two hours. >> this hearing of the subcommittee of financial institutions and consumer credit will come to order. good afternoon and thanks to all of the witnesses for agreeing to appear before the subcommittee today. today's hearing will example how consumer reports are created how they're used in today's financial service economy and the impact they have on consumers. this hearing will also focus on reports completed by the federal reserve and federal trade commission, pursuant to the requirements of section 215. we will be limiting opening statements to 10 minutes perseid, but without objection, the record will be held open for all members' opening statements to be made part of the record. we may have members that wish to attend who do not sit on this committee. as they join us, i will or unanimous consent motion for

each to sit with the committee, and ask questions, when time allows. i yield myself as much time as i may consume. as we begin this hearing on credit scores and reports, we must recognize that the american consumer faces a very different landscape than 30 years ago. credit cards are so widespread, that they are routinely marketed to college students, your local bank, that is, if you're lucky enough to have one in your neighborhood, is important likely owned by the same faceless wall street corporation that you can shop for loans and car insurance on line. something that went even imagined 30 years ago. in large part, what has made all this possible are the now ubiquitous credit scores and reports created and provided largely by companies that sit before us today. driven by an increasingly impersonal and homogenized lending environment, and even cell phone companies are relying more and more on credit scores

and reports to determine whether a consumer is worthy of their attention and indeed, their services. i know the increased use of credit scores has expanded credit to previously ineligible borrowers and the standardization of the system has minimized some of the baez present in hour economy, but the system has created new concerns and dangers for consumers, especially if you are black or latino, that we should address. a good credit score and a correspondingly favorable credit in a democracy there is something unseemly in having one's life judge and possibly even guided no matter how benignly or unintentionally by private for-profit companies through a system where it is impossible for one to opt out. this fact alone causes me to doubt the fairness of our

current system and structure. for instance, as mr. hendrirks will mention in his testimony, consumers are not commonly allowed to access to the scores that lenders and other financial consumers of data actually use to make lending decisions. let me repeat that. for instance, as we will hear in testimony today, consumers, americans, are not commonly allowed access to the scores that lenders and other institutional consumers of data actually use to make lending decisions. data actually use to make lending decisions. instead, you are sold an educational score, that is not the score used by the lender to determine necessarily your credit card rate can be different than that used to determine the rate for qualifying -- or qualifying score, so what's going on is they are selling awe product that is never really used to make any decision about your credit worthiness. how is that educational?

on top of that, lenders use their own private data to further determine what rate or fee they want to charge a consume he were. for an industry that is supposed to be focused solely on accuracy and predictability, there seems to be quite a bit of effort going on behind the scenes, to prevent consumers for seeing things as they really were. americans do not know where these scores are coming from, and how they are created. i have strong reservations about allowing the use of credit reports to determine employability and insurance fees. for example, 22% of latinos in america have thin files that are given a worse rate for loans and insurance and can even lead to them being rejected for a loan. at a time when americans are dealing with 10% unemployment rates, which is in fact actually higher in many communities across america, i do not believe that our constituent should have to worry about whether or not their credit report is entirely accurate or even worry about it

when they should be focused on finding a new way to pay their rent, and feed their kids. we shouldn't allow the secrecy of our current system to affect consumers' livelihood without their knowing the rules of the game and what they can do about it before it's too late. consumers should know that a medical debt that they already paid off will affect their credit for seven years to come. or that being away on military service, in iraq , in afghanistan, protecting this country, might not be much of a mitigating factor for the credit bureaus and institutional consumers of credit scores and reports as recently immigrant credit worthiness is often lower than the general population. regardless of how good their credit history was in their home country. these are just some of the concerns that make it clear that the current system has not reached acceptable levels of fairness or transparency. finally, i have concerns that with banks and others taking

credit away from consumers, due to the bank's own problems, not those of the consumer, your formulas are not accurately predict being the consumer's true likelihood of default. just because some bank is consolidating their credit line, they have out there for all their consumer, doesn't mean that every single one of them is a greater credit risk. there are many legislative proposals circulating right now on credit scores and reports. some i have co-sponsored and some i plan to introduce myself. we will be holding further hearings on these proposals after we give a harder look at credit-based insurance scores in the near future. many of these concerns that i have are with institutional consumers of credit scores and reports, so that i can assure you, we will be inviting them to sit down and have their own discussion with our subcommittee about this has well. i guess basically, i don't know if i'm a good driver of a car, i

check the locks on my house every night, i make sure that the electricity is up-to-date, gas is working good, and i got my of roof, i should pay for my insurance on my house. i go 55 in a 55, don't go through a red light, put my turn signals on when i'm supposed to and i'm a good driver. i don't think i should pay more for car insurance, yet, people are using credit scores, so if i'm one of those 40 municipal americans without health care insurance, or the tens of millions of americans without any job, and i become ill, seven years that illness, i was just thinking before i came up here, when i was in school, i used to be able to go to the teacher and say you know, i was out two weeks, i was sick. so she gave me time to make up, so i could study, so there could be a true reflection of who i

was and what grade i could receive but in america, if you get sick, you can't just take i've got a sick card or a note from your doctor to the credit bureau and say, by the way, don't tell everybody i'm a bad credit risk. i was sick. i mean, that's the way we dealt with employment at the end of the year. i know if i had an employee and they were sick in the hospital, i mean sick, they were gone for a couple of months i don't think i would evaluate testimony on their absence during those two months. yet, credit scores are routinely used if people get sick, because for seven years it takes for them to fix that. some would say well, they didn't pay. yeah, well, they were out of a job. they were sick. it was something beyond their control. they were ill. and in america, i just think a credit score shouldn't be used for that, especially when it's going to determine how much you pay for other products. not for a job. if you're in a job interview, you might be able to explain, but you don't know, because someone, somewhere is using that.

so with that, i'm going to close my opening statement and yield to mr. henson. >> thank you, mr. chairman. i can't help but notice the television camera that's facing us. hopefully there will be a number of insurance companies in the market who know you're such a good customer and hopefully there will be more competition for your business and you'll get a better rate. i would hope that indeed, that you and other members of your party would support legislation to make these markets more competitive instead of less competitive. i did -- i believe i heard you correctly in your statement saying that you were fearful that consumers are ending up in a system where it is impossible for consumers to opt out. to some of us, it sounds a little bit like the health care bill that was passed on sunday. it would be very difficult for consumers to opt out indeed. nevertheless, i appreciate you calling this hearing, mr. chairman. i think it's important that we talk about the role that credit

scores and resources play in hour economy. clearly, when there is information that is accurate, that credit scores have done a lot to help consumers throughout our economy. they have proven to be doors of opportunity for all demographics and geographies. i mean, when you think about it, through a simple number, there are people throughout america, consumers are empowered by simple number, with the opportunity to borrow from a lender, that they never met, never met, and in order to buy a house, a car, or any number of items, that in past years, they would have had to save for weeks, months, years, before they could purchase that particular high temperature. -- item. i think the modern credit score has helped to democratize

society and i think this is a very good thing. if we allow these scores to be -- if we allow the data companies to process the scores properly, and reporting agencies are able to compare people with similar characteristics or borrowers of different backgrounds, yes, you do have a democratization of credit and the retired schoolteacher and grandmother of three in mesquite, texas, that i'm able and privileged to represent in congress, can access credit as well as maybe the new construction worker from your district, mr. chairman, their credit worthiness is now determined through an impartial formula, but the linchpin of the system that goes into determining the credit score, it's got to be complete, it's got to be accurate, otherwise the outcome is going to be misleading and i think ultimately that hurts the consume early. and a lot of work hash done. i know -- has been done. i know we were both on this

committee, the fact act was passed in 2003, i look forward to hearing through the system, listening to our witnesses on their reaction to that act. anything suggestions that they may have. but i'm still somewhat fearful that this hearing may be leading to a movement to somehow make credit files thinner. i'm not sure that's going to be helpful. number one, to me, the thicker the time, gives one a more complete picture of the customer and they are more willing to lend. ultimately, i think that brings down the cost of credit and i think it makes the availability of credit even greater. at least my research into history shows that before the advent, the wide use throughout our economy of credit scores and again, that's exactly what we saw, less credit, so if we go down the road thin are files, several things are going to happen. number one, some people are going to be denied access to credit that they could otherwise

access through the market. some will have to pay more credit. others, as we get away from any kind of risk based pricing, will have yet another bailout foisted upon us by the united states congress where those were good credit scores end up having to bail out toes with bad credit scores. i certainly don't see the merit in that. finally, i really question the wisdom and propriety of the united states congress essentially gagging those who wish to exercise their right to offer opinions about the credit worthiness of their fellow citizens. you know, we should tread very lightly before we trample upon commercial-free speech and i think we need to look very, very carefully before we go through that. and again, if we just look to the recent credit card legislation, where some of us said, you know, if you end up passing this thing, it's going to lead it higher interest rates, more fees, less credit. sure enough, the law was passed

and that's exactly what we see. now, i know there are many instances that adversely impact certain individuals. as the chairman described. but you know, i'm not sure that the congressionally mandated law that says that all of a sudden a for-profit company has to enpage in a charitable business that they may not want to engage in. i would think the answer would be to help the individual involved and put it on budget. this is a nation going bankrupt as is, doubling the national debt in five years, tripling it in 10, but if we're going to do this, we putt to at least put it on budget and start making decisions and priorities. anyway, mr. chairman, i appreciate your calling the hearing. i look forward to hearing from the witnesses. i yield back. >> mr. garre ted kennedett is r. >> i was taken aback by the

gentleman's comment about the democratization that we should have the ability to opt out of this segment of the market, but as the gentleman from texas said, just three days ago, we said that if you were born in this country, you're a citizen of this country, you cannot opt out of what was just passed for the first time in u.s. history. the requirement that you buy a particular product, approved by the federal government over which you have absolutely no direct control as to whether you want to or not as a price of citizenship. would that be true, that the chairman continued his reasoning to the health care bill to allow americans to opt out of that plan or allow the states to opt out of that program and when the chairman speaks of secrecy versus transparency, my gosh, i don't think there's anyone back at home or in congress who actually knows the faceless bureaucrats who will now be imposing upon the citizenry of this country, the requirements of their health policies and the health care going forward. so perhaps we should put

priorities and say, let's have transparency and the ability to opt out in something more personal as our health care as opposed to getting into regulating the credit markets. with that said, i can just say that i was here about six years ago when i first came into congress, back in, oh, my first year was 2003 and at that time, spencer baucus was the ranking member, the chair of the financial institutions subcommittee, and that's when we passed the fair and accurate credit transaction act, or the fact act and that law made a number of important changes for pro consumer changes to the reporting laws, it allowed consumers of to have easier access to credit information, as well as what we're looking for and that is improve the accuracy of that information. now during that time, credit scores have become an essential and valuable tool if allowing creditors basically to more accurately price for risk and that's really what it's all about. unfortunately, many of my colleagues on the other side of the aisle do not agree with the

idea of risk-based pricing, there it is the fha loans or credit cards, if you do not allow a company to price for risk, you know what the end result is going to be. it's going to be one of two things. either you will decrease credit availability for some folks, or you will increase the cost of credit for other people. so i believe that this committee should work closely and examine closely and be careful in hour deliberations before we take any actions that could lead to less accurate credit scores and higher costs or less credit for consumers. finally, the use of accurate credit scoring, basically allows consumers to do what i think most of them want to do and that is to manage their financial affairs and provide better control, not less to the consumers. credit scoring is a useful function of the markets, and therefore it should remain free of unnecessary government regulation. when you get right down to it, the very best way to ensure consumers have access to credit and to financial freedom that

they need is develop policies here in congress that will focus on economic growth and job creation as well. and with that, i yield back. >> the gentleman yields back. we have the first panel here. mr. evan hendricks, editor and publisher of "privacy times," mr. stuart pratt, president consumer of data industry association, mr. barrett burns, president and c.e.o. of advantage score solutions, mr. cheat wiermanski, global chief scientist, analytic decision services, transunion. mr. stan oliai, senior vice-president, experian decision. ms. myra hart, senior vice-president, equifax.

we'll begin with mr. evan hendricks for five minutes. >> thank you, mr. chairman, the ranking member, for the privilege to appear before the committee. i would like to run through about a dozen points in my five minutes. first, on credit scores. the congress did pass a really good law in 2003. it's the fact act, the amendments to the fair credit reporting act and they've been very helpful to consumers and i think it makes for a better industry. one of the great things it did is made consumers eligible for one free credit report per year. which is something that millions of people have taken advantage of, and for commerce, the credit bureaus have sold twice as many credit reports as they've given away when you include monitoring service, so i think we need to take the next step. consumers should be entimed to one free credit score per year, that credit score should be one used by lenders, not a so-called educational score, which the chairman cited to. and you know, in hour free marketplace, companies are going to continue to sell educational scores, which sometimes we call

them knockoff scores or since they're not real fico scores, we call them fako scores, but if they're doing that, they should have to disclose that they're selling a score -- first to say are they used by any lenders and if they're not used by lenders or used by a significant number or a majority of lenders. last thing on credit scores, and this is not in my prepared statement, so i apologize and i'll submit something, there's two important fixes that i think this committee could achieve and actually a lot people would agree on because the problem is fannie mae. fannie mae has adopted a policy that if someone has a disputed account on their credit report, they're holding up loans and really making it hard for consumers to get loans. i've written about this and ken harney has written about this in his syndicated column. i think fannie mae should be made to justify that policy because i don't think there's a basis for it and it's hurting consumers and stopping loans from going through to credit worthy people. the other thing is fico scores

took off in the 1990's, now there's a much better figures called fico 08. if fannie mae would move forward and adopt that. maybe mr. quinn can talk about why that's a better score. in terms of accuracy, there's two standards in the american fair reporting act. one is reasonable procedural for maximum possible accuracy and the problem there is we still have the same sort of inaccuracy problems that we saw 20 years ago, and i think it goes to a fundamental issue, is that our three credit reporting agencies often like to think of themselves as libraries, simply passively take information from creditors and then just pass it on, when in fact, the law sets a standard for them that they have a grave responsibility to ensure accuracy and i don't think they live up to that, on very important occasions, especially with mixed files and identity theft are causes of serious inaccuracies, it would be harmful to consumers. possibly even bigger problem is the dispute process.

naturally, companies want to automate, by the credit bureaus have automated to the extent that a consumer makes a dispute and there's a computerized exchange of messages and the law requires a reinvestigation, but the ray they do this computerized exchange of messages, it doesn't amount to a real reinvestigation and this is something playing out in the courts over and over again, therefore, inaccuracy continues to be a major problem. the federal trade commission is supposed to be getting ready to do a major accuracy study. so far, they have not done a good job with their pilots and i think it's one thing worth note, independent groups have done studies, but credit bureaus themselves have never done an accuracy study, at least in the last 15 years, an they're the ones sitting on all the data. we have another issue because of technology, and because of entrepreneurship that we have a lot of medium and small sized consumer reporting agencies popping up, but a lot of times, consumers don't know that they're there and they don't know what they do and sometimes they get ambushed by them. i think that considering the

proliferation of all these little consumer reporting agencies, we should have a registration requirement. if you're subject to the fair credit reporting act, we need to have a comprehensive list of who is gathering data on us, so people exercise their right of reporting. one thing i discovered was the national telecom and utilities exchange, an exchange run bin the utility companies where they are keeping records on people that haven't paid their utility bills and then they're screening new applicants against this, but it wasn't clear to the extent that consumers were getting adverse action notices and finding out, as required by the fair credit reporting act, if this is the basis for them being denied, and so i would like to see some transparency there. originally, they wouldn't answer a lot of the questions i had for them. in employment background screening, i'm just say this. there's a lot of sort of startup companies that simply mr. do a background check on someone, based on simply a name and a date of birth and that means

that there's times where i've seen someone like debra adams apply for a job and lose a job because they found another debra adams with a felony record, she never had a felony and also someone like thomas paine was another person i saw. >> the gentleman's time has ex expired. >> thank you. >> thank you. i want to mention that in the interest of time, and as agreed by all parties, mr. pratt will testify on behalf of his association and the three credit bureaus, but they have all submitted written testimony and are here to answer questions. mr. pratt, you're recognized for five minutes. >> why thank you, mr. chairman. mr. chairman and members of the committee, thank you very much for this opportunity to appear before you today. i'd like to just focus on a few key issues in my oral remarks and let's start with the importance of precertificating and expanding data for risk decisions. our members' database preserve an invaluable history of how we manage our finances. 18,000 data sources, update three billion data elements every month.

this congress by enacting new laws, calling for creditors to do even more to hey zest the consumer's ability to repay a loan has recognized the value of these data systems. while it might be tempting to eliminate certain data due to the severity of the recession, it is vitally important to preserve the toality of every consumers credit. to require furnishers to delay the furnishing of data or to prohibit the analyzing of data are wrong choices. we must expand data choices which tell the consumer's story. we must verify counsel zoomer's income, lenders should know when a consumer owns his or her home outright. now, turning to scores, no nation has such a competitive and innovative market for the development of credit scores. this industry is a u.s. core competency. it is no mean fate -- the resulting software is

intellectual property protected by the uspto. credit scores are designed to estimate the relative risk of my likelihood of repaying a loan or to predict some other credit behavior. use of credit scores benefits all of us. credit scores help lenders lower prices and they help remove unintentional baezs baezs in the marketplace. it is the decision and objectivity which the score brings to the table which makes it an integral part of our nation's lending process. with this basic information about scores in mind, let's turn to the consumer perspective. behind every credit score is a credit report and as we all know, in december of 2004, our members went live with a free credit report delivery system, and as of now, more than 150 million credit file disclosures have been issued. in addition to the credible number of consumers who have reviewed their credit reports, coconsumers also know more about their scores today than at any point in history. whenever a consume he were accesses a score, it is a teachable moment.

the reason for score dischose you're is educational. some have expressed concern about which scores are disclosed, and we think they have missed the mark for a number of reasons. there is not just one score used by all lenders. it is wrong to leave consumers with that false impression. various lenders use various scores. scores are not the final word in a lending decision. in previous testimony, one lender said, we use external credit scores and scores developed internally based on our own lending experience. further, all scores our members disclose are production scores used by real lenders. in the end, consumers should understand that the data in their credit report is the one constant. every lender is going to use this data to make a lending decision, regardless of the score used. some have also suggested that nationwide consumer credit reporting agencies should provide consumers with scores free of charge. we do not agree. a consumer pays a fee to have an appraise are assess the value of his or her home.

consumers will pay for a software program to produce a tax filing. no one is suggesting these services be offered for free. congress in enacting the fact act, recognized the difference between given consumers free access to their credit report disclosure and giving them access to scores at a reasonable fee. this staple congress recognized -- same congress recognized that it could be beneficial for consumers to access the score given by a lender in a given transaction and further, as a result of the newly finalized fact act risk based pricing notice rule, consumers will now have an opportunity to see the score used by the lender for any type of loan. this expansion of the credit score disclosure by a lender is a positive result for consumers. it is our view that there is no need to create new, score disclosure requirements. consumers have clearly benefited from their right to free credit file disclosures. consumers have benefited from the use of scores by lenders, which ensures fairness and lowers prices.

consumers have benefited from the extensive coys of access they have in the marketplace today. mr. chairman, we thank you for this opportunity to testify and i look forward to evenings your questions. >> thank you so much. we will have a second panel, with witnesses from the federal reserve board and the federal trade commission. we will now hear from mr. tom quinn for fico. please, mr. quinn, you're recognized for five minutes. >> thank you, mr. chairman and members of the committee, my name is tom quinn, i am vice-president in the scores division of fico, responsible for the management and delivery of the company's global scoring products and services. thank you for the opportunity to testify before you today on this important topic. fico is the leading provider of analytics and decision management technology. thousand we offer a wide array of services, our company brand remains most closely tied to the fico, first introduced in 1989.

today, fico are the most largely used credit score in the world, powering over 10 become credit decisions. in the context of today's hearing, we hope that fico is a developer of credit scoring models. we are not a credit bureau and not in the business of compiling consume early credit reports. our analytic scientists develop models in the form of a mathematical formula called algorithms. when a lender requests a fico score, the credit bureau feeds the consumer credit report information into the algorithm, the score is generate the and outputted to the lender. i wanted to highlight a few key areas related to the fico score. the fico score is a three digit number, ranging from 300 to 850. the score rank orders consumers by the likelihood that they will become serious delinquent, meaning 90 days past due or greater on credit obligations. the higher the score, the lower

the risk. fico scores are used by businesses across a range of industries to help assess a consumer's credit worthiness. when a consumer applies for a car loan, a mortgage, or a credit card, the lender may check the consumer's fico score to help determine if they're going to approve or decline and what terms they may set with the loan, such as pricing and credit line. however, fico scores are usually only one of several key factors considered by lenders. traditionally, responsible lenders use other information considered as the three c's. credit worthiness, capacity to pay, and collateral. the fico score addresses the first of those, credit worthiness. fico scores are objective and data driven. our analytic scientists study large representative, national, depersonalized samples of credit data from each of the credit reporting agencies, to isolate and prioritize factors that consistently predict credit account performance. those factors found to be most powerful and consistent in predicting credit performance,

both individually and in combination, form the basis of the complex mathematical algorithms, which become the fico scores. the fico credit risk score is not static. it undergoes continuous innovation. fico tests the predictive value of the factors considered by the fico score. through empirical analysis of the data, fico has consistently updated its algorithm, resulting in a more predictive scoring model. in fact, our latest scoring model, fico aid, which what referenced by mr. hendricks, generates the most predictive fico score to date. at fico, we appreciate the importance of an educated consumer. as a result, we've demonstrated a strong commitment to providing freely accessible -- on our my fico.com web site, you annot only purchase your fico score for a modest fee, but also gain access to a wealth of credit

information about how credit works. in addition to a detailed explanation of how your fico score is derived and a program that helps consumers determine whether they qualify for government sponsored mortgage relief. also, we supported the creation of an active, on-line consumer forum in which a community of 340,000 registered users gather online to discuss credit scoring topics, and to help each other understand what they can do to improve their fico scores over time. in addition to our web presence, fico staff work with a wide range of government officials an consumer non-profit agencies and groups, providing education and training related to credit scoring topics and matters. all of this is consistent with our long held commitment in empowering consumers to manage their credit health. credit scores are not static, they are constantly changing based on consumer credit changing behavior. there are no short cuts to a rapidly raising a low score, but smart practices like consistently paying bills on

time, keeping your credit balances low, and only applying for credit when needed, will help to lift your score over time. consumers who commit themselves to healthy credit habits and sound financial management practices are likely to see their credit scores improve over time. i appreciate the opportunity to testify before you today. thank you. >> you're very, very welcome. and now we have mr. barrett burns, president and c.e.o. of vantage score solutions. you're recognized for five minutes. >> good afternoon, i am president and c.e.o. of vantage score solutions. thank you for the opportunity to testify at today's hearing. vantage score solutions is a vantage score solutions is a joint venture of the credit bureaus, we were formed in 2006 to offer choice and competition in the credit score marketplace by providing a highly predictive credit score based in the hattest analytic methodologies.

armed with a deep understanding of consumer risk modeling and the respected bureau's database design, team members spent several months building a new consumer credit score from the ground up. 15 million anonymous consumers served as the basis for development and testing of the new model of medicine em. innovative approaches in the model's development included advanced segmentation techniques that provide more score cards than traditional models, including segmentation cards for full file and sim file consumers. our algorithm ranked consumers on being more than 90 days past due based on many consumer warriors and factors, grouped into the following six buckets, which proximate these waitings. payment history, 32%. utilization, 23%. current balances, 15%. debt to credit, 13%. recent credit, 10%, and available credit, 7%. additionally, medical debt, when identified as a medical debt on a credit file is excluded from

the algorithm. the vantage score scale ranges from 501 to 990. the higher the consumer's score, the less likelihood of becoming 90 days or more past due. the score range approximate mates the academic rating scale familiar to most consumers, so in addition to receiving their nenumerical score, a score betwn 900 and 990 is an a. many algorithm are unique. we use a single algorithm across the three bureaus and a new modeling approach that looks deeply into scoring, which allows us to score many individuals that would not be able to get scores. first, consumers who have fewer than three accounts on their credit file. between 35 and 50 million adults in the united states or 18% to

25% of the adult population may be considered thin file and therefore often underserved. second, any frequent credit users who may not be eligible for a score because there has not been any new activity on a credit account for 6 months and third, new entrants who are just establishing credit relationships have not had credit open for more than the six months required by some traditional scoring models. many scores reach back deeper into an infrequent credit outers' history, assisting millions more to obtain sustainable credit. a comparison of vantage score with a traditional crc scoring model that used a random sample of mortgage customers saw an overall increase of vantage score of 8% or approximately 10 municipal consumers. additionally, 2.5 million consumers from the study were more accurately identified as higher quality than subprime.

well like to thank congressman green for authoring the -- direct being the department of housing and urban development to undertake a pilot program establishing an automated process to determine the credit worthiness of borrowers with insufficient credit histories. credit scores offer a uniform, non-judgmental mechanism that can be quickly deployed, systemwide, within an institution responding to changing credit conditions. although we believe credit scores should be part of any decision process for credit approval, they should not be the sole criterion. approving large loans without also verifying other critical information needed to assess a consumer's ability to repay the loan is simply not prudent. risk is increased across all areas of the credit spectrum. we perform an annual revalidation to test the score of our model. our most recent revalidation is capturing the increased risk presents in its environment. this allows lenders to

understand the change in risk presence of their portfolios from systemic shifts, and adjust their business strategies to reflect that change. so even though the performance of our score remains highly predictive under these stressful economic conditions, the conditions may prior a shift in lender standards. thank you for the opportunity to contribute to this important discussion. i hope the information i have shared has been beneficial to the subcommittee and would be pleased to answer any questions you might have and to work with the members on scoring issues in the future. >> thank you so much. and last we have ms. ann p. horton, partner at hudson cook. please, for five minutes, you're recognized jo i don't thank you. good afternoon, i am ann forth any, a partner in the washington, d.c. office of the hudson cook law firm. is it on now? ok, good. again, i'm anne fortney.

apry earth the opportunity to -- i appreciate the opportunity to appear before you today. i have almost 35 years experience in -- i have also worked as in-house counsel at a consumer credit card issuer. currently, in addition to counseling clients, i sometimes serve as a consultant and an expert witness in litigation. my experience in credit scoring is described in my written statement. based on my experience, i believe that credit scoring is a very effective tool that ensures objective credit underwriting decision les. credit scoring systems eliminate the potential baezs, illegal or even benign, that may exist in judgmental credit underwriting systems. they ensure that each consumer will be evaluated only according to attributes that are neutral and they facilitate fair lending compliance. ironically, it is the fact that credit scoring focuses only on objective factors that has engendered criticism. for example, some complain that

credit scores may reflect circumstances beyond a consumer's control, such as a natural disaster. these kinds of events however are not dissimilar to other uncontrolled events that have historically been associated with payment defaults, such as job loss or illness. regardless of a consumer's personal control over events leading to default, credit underwriting systems necessarily focus on default when that is the risk they evaluate. if characteristics such as payment history or credit limits and credit scoring models were eliminated or restricted, regardless of their predictive value, the models would necessarily be less predictive. less predictive credit scoring models would impair creditors' ability to make sound underwriting decision or price according to risk. the inevitable result would be less credit availability at higher prices or prices where good credit risk subsidize the higher credit risk and none of those results would be more fair than the present systems. it is neither efficient for fair

to focus on individual circumstances if an underwriting system that is designed to predict risk for an entire population. some have complained that credit scoring models may penalize consumers who are conservative in their use of credit, or who, because of age or other circumstances, may have limited credit histories. if this allegation is true, the obvious solution is to increase the amount of information available for credit score developers. without credit histories, and similar empirical information, creditors are unable to assess the relative risk of a consumers default. by analogy, a 16-year-old has a perfect driving record, when she obtains her first drivers permit. despite the demonstrated value of credit scoring, there continue it shall anecdotal reports regarding its accuracy. i believe these reports are based on a misunderstanding of how credit scoring works. they also overlook the fact that credit score users have a vested interest in making these models work. credit scoring models are

continually reevaluated and underdated. credit score developers and users of credit scores are in the best position to evaluate the accuracy and predictability of credit scores because of their impact on the bottom line. credit scoring has also been criticized for an adverse impact on minorities and other protected groups. however, studies by the federal reserve board and the federal trade commission found that these systems are not proxies to prohibitive factors. characteristics that correlate to lower credit scores may also correlate to race, ethnicity and other protective characteristics. this phenomena is reflected in credit underwriting in general. the solution is to increase educational and employment opportunities and outreach for underserved populations and to provide for alternative source of data that may predict credit wore aniness such as rent, utility and telecom payments. i believe many concerns about credit scoring can be attributed to a lack of understanding about the factors applied in credit scoring. these concerns can be addressed through the implementation of

new notices, such as the risk based pricing notice, and also increased education and awareness of the process. based on my experience at the ftc, i firmly believe that consumer he had education plays a large role in a consume -- consumer's ability to protect themselves. i do not believe any providers of credit scores should be required to give away their product for free. they persist if the mistaken belief that there is only one credit score and only one provider of that score. in fact, there are many credit scores provided by many different sources. moreover, it would be fundamentally unfair to require any credit score provider to give away its product. this is especially true -- ok, this is especially true because the educational materials available through the ftc and online provide adequate instruction for consumers. thank you for the opportunity to

testify. i'd be glad to answer your questions. >> why thank you so much for your testimony. one of the most notorious examples of misleading advertisements are the ads of free credit report.com run by experian. this site does not provide free credit reports. the ftc has taken a number of steps to address this and will testify about those actions in the second panel, but i wanted to show an ad that the ftc produced in its attempt to counteract misleading ads and educate consumers about their right to a truly free credit report, through the official web site, annual credit report.com. i went there, it was free. didn't cost me anything. the ftc does have -- doesn't have the budget to run it had on tv though, but let's show the ftc ad. >> in today's economy, i checked my credit annually. you can do it too for free,

under the law, it's guaranteed. an you'll credit report.com, the one you can depend upon. other sites may turn your head, they say they're free. don't be misled. once you're in their tangled web, they'll sell you something else instead. annual credit report.com, the one you can depend on. all the others charge a fee. that's the harsh reality, i should know because it happened to me. for truly free credit reports, there's only one authorized source. annual credit report.com, the one you can depend upon. >> that is actually a free credit report that you can get. for the record, i did enjoy the commercials. i always seem to get the second- hand stock. i will not talk about getting the date i wanted to get. ultimately, i got hurt.

the commercials are well produced. think about it. the ftc took the time to produce this commercial. it shows you what we need to do. one was the last time we saw the government produced an ad to counteract an ad that was produced by corporate america? i thought we should put that on the to start our conversation today. they ran a parody. let me start by asking some questions. i want to ask mr. evan hendricks, in your testimony, you sounded an alarm of what you called shadow operations run

with the help of equifax. companies to secretly screen consumer applications or charge higher deposits on non-paying customers. in essence, your description this practice makes it sound like almost the blackwater of credit reporting, a secretive company that worked hard to maintain its secrecy and may be evading the application of laws of unsuspecting people that don't know the circumstances. do consumers know the repercussions of late payments are sent to the agencies and do they have a way to appeal the information in their file? >> when i first did the story in october, i couldn't get any of the questions answered. i also want today know what utilities were members of it, so we could checkup, see what was happening, but since that story has run, i was pointed to their web site this morning, to show that they now have some contact

information for consumers to order their reports from the database, and they do say, their communications said that they are subject to the fair credit reporting act. again, they didn't tell me that when i first asked them in hocket. >> sorry. do they report all the information or just negative information? >> i think it's mainly negative, but we don't know because we don't have any power to audit and find out what they do. but clearly, it's a situation where consumers can get denied or charged a higher deposit for, you know, for the utilities based on -- >> let me just say something. let's say there was negative information and i was charged a higher rate for my utilities or deposit. do i get it a note in the mail. let's say i was denied a credit card or a mortgage, i get something, here's what the information was used to deny. this credit worthiness. do we get that when this happens? >> under the law, you're

supposed to get that, but they wouldn't answer whether it was given to consumers. >> do we have a representative, maybe we'll be able to get an answer from them? >> this is why -- >> my time expired, i have like 5 seconds. my time is expired. we won't take any more time. mr. hensarling can get his question in. >> thank you, mr. chairman. it was a cute ad. my questions is youtube has nothing to worry about, but it was a cute ad. i frankly don't know the facts dealing with free credit repor report.com. my upped standing is that certainly the federal trade commission has the opportunity to issue cease and desist orders, i don't know if they have, so i don't know if the facts are still being adjudicated or not. i know, mr. chairman, you said that unfortunately, the ftc didn't have sufficient funds to

run the ad. perhaps had the house not passed on sunday evening the $2.3 trillion takeover of our health care system bill, replaced it with something that would make health care affordable and portable an maintain the high quality, maybe it would have been a few extra dollars to run that ad, but unfortunately, president signed the legislation, so there goes the cute ad. we continue to study all the different but-for causes of the economic turmoil that we have in hour economy today. most people would point to the fact of all the no doc, low doc loans that took place in the residential mortgage market. it's certainly the contributing factor. certainly one of the most significant contributing factors and i'm just curious about a parallel here.

because again, i seem to see the prevailing winds from congress trying to make credit files more thin. somehow let's lenders have less information and when i see that applied to residential real estate, all i see -- what i see is great economic turmoil and human misery, and it seems to me, if anything, we would want to be pushing in the opposite direction of having more information about credit decisions as opposed to less. i don't know, perhaps i guess it's the next panel that might have our professional economist, but if anybody cares to jump in on that one, i'd be glad to hear an opinion on matter. mr. pratt, you seem to be the first one reaping for the button. -- reaching for the button. >> you know, there's two things we should think about when we think about the kind of risk data. a credit report isn't just a point in time story of what i did most recently, and i think one of the reasons we feel so strongly about preserving the entirety of the credit report

history is that it sets into context, both the good that woof done and also maybe -- we've done and also the difficult experiences we've had at any difficult time. lenders want to do business with consumers. lenders want a complete picture of the possible risk. lenders don't like saying no. lenders will look, i suspected, even at this period of our recession, even at the struggles that many consumers have had and they'll see that in the context a credit report where you have a consumer who has historically done exceptionally well. the credit report is not just a snapshot of some immediate missed payments, but it's about what happened over my lifetime of managing credit. now, with regard to negative information, negative information does come off the file of after a period of time. it's also important to know that lenders look at negative information differently over time. an immediate incident is probably considered to be more risky for a lender. but a lender who has -- if

you're looking at a 6-year-old event, it's not the same and a lender wants to do business with you, so that's really important in terms of context. >> mr. pratt, along the same line of questioning, one of the most common phrases we heard applied to what was going on in the residential real estate market was predatory lending. i myself have included yes, there was a lot of predatory lending going on. i have also concluded there was a lot of predatory borrowing going on. but again, predatory lending to some extent, lending money to people who can't afford to pay it back, if we have congressionally mandated center of credit files, is there going to be a greater probability of loaning money to people who can't afford to pay it back? >> yes or no? >> our view is, you've got of to have all the data on the table in order to ensure safe and sound lending decision and also fair lending decisions, but again, for all of us who know that we've just -- we are just emerging, just struggling to get

out of a deep, deep recession, we know that there are going to be some consumers that will have a credit report that isn't as perfect as it once was, but it is a history. >> you used the term fairness, i want to go to you ms. fortney. you said the credit reporting helps eliminate bias, that the individual judgment maybe would otherwise interject that bias into the system. could you elaborate a little bit on what you mean by that? apparently no. >> you've already been accused of shutting down corporate america's freedom of speech. i would never allow the one minority witness we have here. please give your answer. >> thank you, mr. chairman. you listen well. >> yes, i appreciate the opportunity. i'm sorry. i thought i had -- ok.

yes, i really appreciate the opportunity. there are two aspects of this. as i said, i been practicing for many years and i saw what the world was like before credit scoring. it was not as efficient, and there were even benign bias that made the system less efficient. you had credit managers trying to draw on their imperfect memories of how their memories and also their comparisons of how this applicant compared to others. the other thing i know from my time at the federal trade commission, is that credit scoring has really facilitated law enforcement and compliance. that if you look hat the cases that have been brought by the federal trade commission and by the civil rights division of the justice department the last 30 years, they have not involved credit scoring. they have involved situations of what is called discretionary pricing. by and charge. >> thank you, ms. fortney. we just got a bell, but we've got the next 10 minutes, maybe we'll take questions on each

side and then we'll recess. >> thank you. >> the floor is recognized for five minutes. >> some have proposed mandating free credit score be given to consumers every year. as an alternative, i would look at something we did in drafting the fact act. that law requires under certain circumstances a credit score be used by a lender for a loan application, a credit score used by a loan. a indication be provided directly to the applicant, so instead of a mandatory free annual credit score, what if we required credit scores to be provided to the borrower in every application with a cardinal camillo ruini score if used? the credit bureau already provides the information to the borrower so i don't believe it would be an additional burden on them. they should have a right to see it regardless if their am compassion is approved or not. it could also help protect against lenders unfairly discriminated against loan applicants and empower consumers to better monitor their credit score and credit history. any reaction by mr. pratt, do you have any rehabilitation, sir? >> well, my first reaction is

that the fact act, the same fact act, did just this year bring to the floor a new notice that i think many lenders will be delivering. in other words, a risk based pricing notice, one of the options for complying with the risk based pricing notice rule is for a lender to deliver to the consumer a credit score disclosure with every application that is made. so i think it's very likely, by the end of this year, you will see an enormous increase in the number of score disclosures, where you actually see a nexus between the lender who is using the score and the consumer who made the application and we're going to see how consumers react to that, we're going to see what consumers learn from that, and i really think that's the next step in this evolution of connecting consumers with scores and with data. :

>> that would help people tie information in their credit report to what it means in terms of the score. there was one credit card company that opened a service. this was a nice market response. they made it so their customers could access the credit score that they were buying. >> very good. second and last question, in our modern society, one unfortunate reality is the increase in identity theft. as it relates to credit scores being damaged, where do things stand on identity fact and what steps can the government take to ensure that victims have their

credit scores and history repaired quickly? do any of you have any comments on that? mr. pratt? >> i think a couple of things have been ineffective. the act empowered all of us as consumers obtain an identity theft report. i can go to my lender and get access to original application data. i can go to the credit bureau and ask them to remove data that was a result of the fraud. i think the remedial powers were great ideas then, they are good ideas now. they are workable. the challenge continues to be gaining an identity fact report. some law-enforcement agencies may or may not be able to get access to one. >> the act had great advantages

and advances for consumer protection. i liked the idea of having consumers plug into their own information. in the old days, before we allowed for a free credit report, the federal law kept the price of a credit report at $8. i would like to cap the price of credit monitoring. i think it would be a win-win. you would bring more people plug in to their own reports. >> thank you. i yield back the balance of my time. >> not to be thin-skinned, but i still -- but i spoke personally, i would be accused of shutting down free-speech. i just wanted to let everyone

know, we in the majority set up these hearings. we invite the witnesses. i would like to take note that we did have mr. hendricks here for the consumers. representing corporate america is one, too, 3, 4, 5, 6, 7 -- come on, cut the democrats a break. with that, we are going to get mr. kenny marchant in for his five minutes and then recess. >> you're recognized for five minutes. >> thank you, mr. chairman. i would like to explore some of the methods that some institutions use as far as coming up with approval ratings. for instance, fha has a policy

that they are to disregard medical in some of their approval processes, yet when you get a score, and the score reflects any past-due medical bills, is there any way -- are their customers that have such a relationship with a credit score company or a credit report company where they could say to them i would like to have the credit score of this person if you do not take a certain that into consideration? are any programs that customized? are the reports and the scores just given across the board? >> @ transunion, we did not

include medical debt in the calculation of the score. that is in our generic products. when it developing customized solutions, it is up to the customer where they may want certain that elements excluded. in those situations, the information would be excluded and the models would be engineered without that data made available. >> each customer can decide? i guess you'd have to be a very large customer? >> not necessarily. we service customers from several hundred member credit unions to the very large numbers. that is where the art of developing scores comes in. it is both an art and a science. it is up to the outcome that we are trying to model and the

business objectives of that institution's, that would recreate the characteristics that feed into the modeling process, we take those things into consideration. >> these gentlemen will correct me if i'm wrong, but i think the most widely used credit scores are the fico from the 1990's. they do not allow credit collections to damage your score. if it is something that has happened in recent months, it can drag down your score dramatically. it is a big problem now. i also understand the modern version of fico excludes medical debts under $100. medical that is a big problem that unfairly hurts consumers. i recommended that fannie would

move toward models like fico 08. that would help address this problem. >> one of the concerns i have had for the last two -- two years is that it appears that's since we are quick to have a record amount of foreclosures, and certainly an record number of light payments, and where we have numerous government programs that i fear lead people to believe it is ok to be late, later and latest on your payments, we are creating an entire generation of some prime buyers that will experience problems for the next 20 years. i think many businesses are struggling with how to properly rate their scores and their

credit reports and i think that in the future, you may have lenders say in we want to exclude a late payment and really customize it. timmy, this is a big bloom in -- to me, this is a breaig bloom in problem. >> i think to make a great point. that is the difference between a credit's core and credit criteria. the score needs to be objective. the criteria can exclude that information. >> the gentleman's time has expired. we will recess for about 45 minutes. we have a series of votes.

we will reconvene and finish with this panel. we will allow the other members that are here to ask you questions. we thank you for your testimony. see why so much. the meeting is recessed until we get back at about 4:00 p.m. thank you. >> earlier today, arizona

senator john mccain was joined by his former presidential running mate, sarah palin had a campaign rally. we will show that to you in about 10 minutes. coming up next, this week's online addresses. president obama talked about the health-care bill and increased federal funding for following the president, the senate minority leader looks at the economic impact of the new health care legislation. >> this is a momentous week for america. we took bold new steps. it was a week in which some of the change that generations have hoped for and worked for finally became a reality in america. it began with the passage of comprehensive health-care reform that will begin to end the worst practices of the insurance industry, and overtime finally

offer millions of families saand small businesses quality, affordable care. it ended with congress passing legislation that will reform our student loan system and help us educate all americans to compete and win him the 21st century. we have seen billions of dollars handed out as subsidies to bankers and middlemen when that money should have gone to advance in the dreams of students. attempts to fix this problem were thwarted by special interests that fought tooth and nail to preserve their giveaway. this time, we said we would be different. we stood up for students and families. i commend all the senators and representatives who did the right thing to. this reform of federal student loan programs will save

taxpayers $68 billion over the next decade. with this legislation, we are putting that money to use achieving a goal i set for america. by the end of the decade, will have the highest proportion of college graduates in the world it had become unbearable burden. we are extending federal pell grants. we're putting the program on stronger financial footing. we are doubling the funding to help students who depend on it. to make sure that our students to not go broke just because they chose to go to college, we are making it easier for graduates to afford student loan payments. the average student ends up with more than $23,000 in debt. when this change takes effect, we will capped a graduate annual

student loan payments at 10 percent of his or her income. we are revitalizing programming at our community colleges, creating pathways for millions of dislocated workers and working families. these schools are senators of learning where students can get the skills and technical -- technical training they need. they are areas of opportunity. every community can then came the workforce it needs. they are vital to our economic future. this legislation also increases support for our minorities servings institutions, including historically black colleges and universities, to keep them as strong as ever education and health care, two of the most important pillars for a stronger america grew stronger this week.

the do not represent the end of our challenges, but they represent real and major reform. what the show is that we are a nation still capable of doing big they prove what is possible when we come together to overcome the politics of the moment, pushed back on the special interests, and look beyond the next election to do what is right for the next generation. we continue the work of tackling our greatest common tasks, and economy rebuilt, a job situation revitalized, and america for all. >> earlier this week the president signed a massive health bill that has been described as historic. democrats may measure history by how expensive and interests of the bill is. most people see it differently. in one of the most divisive

debates in modern history, democrats decided to go the partisan route and blatantly ignore the role -- the will of the people. americans exposed this -- report -- opposed this legislation. democratic leaders and white house officials may be celibate industry, but most of the country does not. most people are not interested in celebrating a bill that makes their lives more complicated, takes money out of their paychecks, and puts decisions into the hands of federal bureaucrats. most people are not celebrating the fact that their insurance premiums will go up. job creators already struggling in a down economy, are not doing cartwheels over all of the mandates and new taxes they will have to shoulder as a result of this bill.

we are already seen the economic fallout. just two days after this bill became law, the john deere co. said it will spend an extra $150 million this year alone just to comply with the new law. the illinois-based caterpillar corp. said it expects to take a $100 million hit. this is bad news for workers and terrible news for the broader economy. as the president himself put it during a visit to caterpillar, you can measure america's bottom line by looking at caterpillar's bottom line. that was the president one year ago. the timing could not be worse. at a moment when millions of americans are looking for work, democrats just voted to spend $2.60 trillion on a healthcare bill that will make it harder to

create private sector jobs. the irs gets a boost. an estimated 16,500 new workers will be needed there to enforce a brand new insurance mandate. then, there are all of the unintended consequences that will inevitably result that sets up dozens of federal boards and new rules and regulations. these are regulations that we know will not withstand their first contact with reality. in fact, we are already seeing it. just one day after the president sign this bill into law, we got word that one of its celebrated early -- the church, a ban on discriminating against children with pre-existing conditions, will not put a ban on it after all.

another band turned out to be similar ineffective. in other words, democrats just voted to takeover of one sixth of our economy and two of the biggest selling points already need fixing. here is a question. if they cannot get these two things right, how can we expect them to properly manage the rest of them? when the white house was questioned about the glitches in the bill, they said the secretary of human services with on the case, she would issue a new regulation to correct the problem, but this is precisely what americans are afraid of. this bill had not been law for 24 hours. they are already proposing legislation to cover mistakes and errors. we have not seen the last of it. i am sure that soon enough, americans will be reminded of

the wisdom that the government is best when it governs least we have said. costs are out of control. to many people are being squeezed out of the market. the fact of the matter is that this health care bill does not solve any of those problems. it uses them as an excuse to undermine the things we do best, the wide array of choices, the constant and mission of technology and treatments, and the high quality of care that people all around the world admire about the american health-care system. settling, all of those things will suffer as a result of the bill the president signed this week. we can do better. we can expand access. we can keep people from being kicked off of their plans. we can lower costs and premiums without undermining the things we do best and without raising taxes that kill jobs in a bad

economy. the american people know that. that is why they have been clamoring for a different approach. that is why republicans are committed to repealing this bill and replacing it with common-sense solutions that achieve the good things that folks on both sides want to achieve without all the nasty consequences. repealed and replaced. that is what americans really want. that is something people beyond washington, d.c., will actually want to celebrate. >> senator john mccain kicks off a series of events this week. he is running for a fifth term. he faces a challenge in the state republican primary. he spoke at a rally today, reunited with his vice- presidential running mate. this event is about 35 minutes.

♪ ♪ [applause] >> hello.

it is such a pleasure to be here this morning. thank you for this wonderful turnout. thank you. i know you all had something to do with his wonderful weather so that we can also offer up this wonderful whether to our alaskan visitors as we always do. [applause] >> before i do my introductions, i would like to ask if there are any blue-star mothers in the audience? raise your hands. [applause] >> i am a blue-star mom, as well. i like to get a special thank you to you.

i am with you all the way. god bless all of you. [applause] >> i had the opportunity, along with my husband to get to know this very special family behind me on the trail last year. it was a remarkable opportunity. not only did the campaign, but we became good, close friends. tod palin is a remarkable man in many ways. [applause] >> i agree. i agree. he is an outdoorsman. he is an athlete. he does so many things that i was not only astounded to find out, but i marveled listening to his stories. he has taught his children not only what they needed to know, but in the stories of his own

experiences, they learned lessons of life. he is a good friend. he is a good family man. he is a great father. i am proud to call him a friend of mine. [applause] >> i know all of you came here to see my husband today. [applause] >> but, as you know, he brought along a friend. [applause] >> sarah palin is a remarkable woman. [applause] >> not only is she a member of the nra, a working mom, a great

governor of the great state of alaska, a western state -- [applause] >> she is also a woman that has a great mission for the united states of america. [applause] >> she needs no further introduction from me. let me introduce to you the great governor of alaska, under sarah palin -- governor sarah palin. [applause] >> thank you, so much. thank you, so much. thank you, arizona. thank you, so much. thank you, guys. thank you, so much. thank you, so much. it is an honor to be here.

it is wonderful to be here in a basketball gen. i love it. it is so good to be here. let me ask you first, arizona, do you love your freedom? [applause] >> we think of that. if anyone who has served past or present, raise your hand. we honor you, god bless you. [applause] >> god bless you. thank you, so much for the service, for the sacrifice. i was pretty excited when john mccain called me and ask me to join him on the campaign trail. i could not wait to get that team back together. [applause] i am glad my husband got to come with me.

we left the kids home. it is so cold in alaska. i hear people whining about this weather. it is pretty chilly at home. it is about five degrees below the approval ratings of president obama. [applause] >> it is cold. things are a little bit different. a lot has changed since that 2008 campaign trail. for one, i noticed this go around, no one supplied us with a teleprompter. we will start kicking it back old school and write in those notes on our hand again. [applause] >> what is wrong with using the pour's man -- a poor man's

version of the teleprompter? i have done it all of my life. we are a long way from those days of the 2008 campaign. a lot has changed. this go round, when we add up all of the votes, this guy is going to win. we will send him back to the united states senate. [applause] >> one thing that has not changed is the deep respect and admiration that i have for senator john mccain, a true american hero. [applause] >> it was the privilege of a lifetime to be asked to run alongside him. it is an honor to stand beside him today and asked you, ariz., for the sake of our country, sent him back to the united

states senate. john is a man of principle, a man of honor, a man of his word, a man of faith, and a man of the people. he loves this state. he spent 30 years fighting for the people of this state and the principles that you all hold dear. that has not always won him friends in washington, d.c., in that political machine. i have explained yesterday at a rally, that in decades ago i competed in a pageant. i get to speak as an expert. let us say that john could win any portion of the talent and debate, but no one would ever in him miss congeniality. that is a good thing. he has never been that company

man. and dead fish to go with the flow. he is not one to do that. he is not afraid to block the political machine. he is not afraid to go against the tide. formate, it was as a young mayor, then as a -- for me, it was as a young there, then a commissioner, then a not-so- young governor, i was inspired by watching him shake things up, and making sure that the corruption would not end in washington, d.c.. he had -- de corruption would end in washington d.c..

today, those issues are at the heart of a conservative movement that is sweeping this country. it is putting government back on the side of the people. [applause] >> young man, stick around. listen to what we're going to say. maybe you will learn something. [applause] >> part of this movement that is sweeping across this beautiful country --

{crowd boos] >> john mccain, john mccain, john mccain, john mccain, john mccain, john mccain, john mccain, john mccain, john mccain -- [applause]

>> i will hope that he sunday will realize that john mccain spent 5.5 years as a pow in efforts to defend our constitution which gives him the right to protest. [applause] [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] . .

>> at these events. i tell him think about it. what is the root of the tea party movement? back in 1773, remember the freedom fighters fighting against tyranny and big government intrusion and throwing tea into the park the -- t into the harbor to protest? they are saying no more intrusive government. that is what we are doing today. that is part of that tea party movement. i just have to remind people that before there were these recent protests on main street and marches on capitol hill, there was the maverick in the senate fighting for the same issues. john has been leading the fight against waste, fraud, and reckless spending for decades. today, he is leading the loyal opposition that is standing up against the obama, pelosi, read

agenda -- reid agenda, and what they are trying to do to the country. remember when the obama administration proposed a trillion dollars stimulus bill senator mccain give them straight talk? he said this bill is generational theft. it is taking opportunity from our children. he voted no. when the president began to waver in afghanistan, john knew the women and men in uniform deserved better. he asked him to listen to commanders on the ground. eventually, the president listened. [applause] and when it came to obamacare -- [boos] john fought against that government takeover of one sixth of our economy. he told the president that transparency in the legislative process has got to be real.

it has to be more than just another campaign promise that is to be broken, which obama did break. obama, by the way -- doesn't something tell you something is wrong if fidel castro says this is a good thing and we do not like it? castro likes it. [applause] what a crock. the more you guys find out about obamacare, the more you're going to say it needs to be rebuilt. we need to undo what it is going to do to this country. when the pundits and talking heads said that in this day of age conservative ideals are dead, that conservatives will not rise again to these powerful positions of authority to lead this country, john mccain set out to put the fight back in the republican party. he met with a young, unknown state senator in and gave the guy some name

recognition and some help. that man was scott brown. scott brown is helping out to lead the charge against growing government. we have some big challenges in front of us, big challenges in front of this great country. and we need that new blood. whinnied republicans like scott brown and others to be elected to cast those votes that will put our country on the right track and make us more secure and more prosperous. we need those who are willing to stand up and speak out for common-sense conservative solutions. we also need statesman and heroes like john mccain who have been there from the beginning in this fight and can lead us to a brighter future. he has the wisdom, he has the courage to lead the way. that is why i am here asking for your votes. arizona, what do you say? will you send the maverick back to the united states senate? [applause]

one thing that protestor hopefully will realize -- john has spent his entire career fighting to defend our constitution and fighting for common-sense conservative solutions. that is what his campaign for the presidency was all about. it was john mccain who warned us about what an obama administration could and would do to this country. it was john who warned us and to give us an alternative to the agenda. [boos] there you go again. >> john mccain.

john mccain. john mccain. john mccain. [cheering] >> i do not know. if there was any bit of fairness in the mainstream media today, perhaps it would look at that and condemn that as a little bit of violence. [applause] reverses a peaceful get absolutely rowdy assembly with you all here today, standing up for our freedoms, including the freedom to protest. god bless you guys for being here and for being strong. [applause] as a matter of fact, let me take the opportunity to clear the

air on what cbs is coming out of the mainstream media -- on what the b.s. is, coming out of the mainstream media, with the accusation that it is a group like this that is inciting violence. when we talk about gearing up for a fight to take our country back, we're talking about taking up arms -- meaning our vote in contested primaries. violence is not the answer and none of us here are going to condone any sort of violence in these processes. [applause] do not let the left divert what the focus should be, it changed the conversation and get us off track. it is a bunch of bunk.

even though our share of the votes did not carry the day back in 2008 -- second out of two. john mccain has not stopped fighting for you. he does not stop fighting for arizona or the rest of the country. he got back to work with the campaign was over. he did not take a break. he got back to work. [applause] back in congress, he introduce legislation and pieces of policy that were just the start of his continued good service for this great state. you know, that does not sound like he is being a part of the party of "no." it sounds like he is leading the party of ideas and standing up for time tested troops. if you think about it, what is wrong with being the party of "

no," when you consider -- when you consider what obama, pelosi, and reid are trying to do to the country, let us become the party of "hell no." [applause] john mccain is standing up for the truth is that made this country the greatest country on earth, a country we are so proud to be a part of. we are always proud of being americans and are not going to apologize for being proud of being americans. he believes that the government that governs least governs best. [applause] he believes the constitution provides the path for a more perfect union. it is the constitution.

and knowing that only limited government can provide the opportunity for prosperity for all of us equally. it is only limited government that can do this. [applause] that time tested truth that we all know -- we do not work for governments. government has to work for us. [applause] friends, that time tested truth, knowing that freedom is a god- given right and freedom is worth fighting for -- [applause] these are the principles that great men like ronald reagan and barry goldwater embraced and believed in. it is what john mccain is fighting for. he and knows it is america's finest, our men and women in uniform, who are a force for good in this world. that is nothing to apologize

for. [applause] arizona, if you believe in the principles that made this country great, that helped us be the most prosperous and exceptional country in earth, and if you want conservative solutions and common sense leadership -- if you want real leadership and not just rhetoric, i ask you to vote for john mccain. let us send the maverick back to the senate. ladies and gentlemen, it is my honor and privilege to introduce your united states senator, a true american hero, senator john mccain. [applause] >> thank you, sarah. thank you so much.

isn't she magnificent? [applause] cindy and i have wonderful memories. our most treasured memory would be to get to know sarah and todd, the great americans they are in the great family the palin family is. i predict to you sarah palin will be around for a long time. [applause] tonight, thank you for turning out today. it is important that i recognize a few people. bear with me. one person who is here is a great congressman who it has served the state of arizona and the congress for a long time. he's a great friend and a great member of congress. john chadic is here. east valley is a fighter against iraq and pork barrel

spending -- against earmarks and pork-barrel spending. listen. you think i was unpopular? jeff blake will never win miss congeniality in the united states congress. he fights the corruption in washington and he stands up for the people of this country that do not have the lobbyists and special interests there. the great mayor is here -- scott smith. you're doing a great job. kirk adams, the speaker of our house of representatives. thank you to the principle of the high school. -- think you to the principal of the high school. my friends, i am grateful you are here. saratov are leaving here. guess where they are going? they are going to search light,

nevada, the home of the majority leader soon-to-be minority leader of the united states senate, or maybe not the minority leader. maybe just out of a job, a former majority leader. harry reid. do you know what the message is? it is health care bill -- repeal and replace. repealed and replaced. repeal and replace. if you do not -- if you do not, we are going to repeal them. let me mention to you something you may have seen in that monstrosity. i read every page. i will tell you we're going to

be finding out for a long time what this is doing to america. let me mention this morning's news. at&t will take a $1 billion noncash accounting charge that charges -- earlier this week, a steel, $100 million. valero energy, on and on. gm will take and $85 million charge. do you know who is going to pay for that? the taxpayers of america. that is outrageous, and unfortunately it is just the beginning. [booing] the liberal media and others are talking about the historic moment in our nation's capital. it was historic -- the first time in history a major reform has been enacted on a strictly partisan basis, the first time in history a major piece of legislation has been enacted with the overwhelming opposition of the american

people. the american people, my friends -- the american people will be heard, and we will repeal and replace. [applause] we will stop these sleazy chicago style sausage makings that went on behind closed doors. we're going to stop the louisiana purchase and the $100 million for a hospital in connecticut of your money. we're going to stop the sleazy deal that was made with the pharmaceutical companies that is going to increase the cost of prescription drugs to every american citizen. the president, eight times in the campaign, said he would have c-span cameras in and find out who is on the side of the american people and who is on

the side of the pharmaceutical companies. we know who is on whose side. it is the smarmy backroom deals that the american people do not want. they want replace and repeal -- repeal and replace. we republicans, my friends -- we in the opposition, we independence, we all americans are going to say yes. we want tort reform. why don't we have tort reform? why must doctors practice defensive medicine? it is because trial lawyers control the process in washington, my friends. this year, we could save $100 billion if we had port reform so that doctors would not practice defensive mechanism, so that the trial lawyers would not make millions of dollars. we could still protect the patients. they are doing that in the state

of texas, by the way. we could have good protection. we could have americans be able to go across state lines and have the health insurance policy of their choice. we could reward wallace and fitness. we could treat those with pre- existing conditions by getting pulls together so insurance companies could bid on caring for them. we can expand the ability of small businesses, the generators of jobs in america, to move together and negotiate with the insurance companies. we can do all these things. that is why we have to repeal and replace. repeal and replace. like sarah said, they are saying that we are the party of no. my friends, on this health care bill, we are not the party of no. like sarah said, we are the

party of hell no. hell no. >> hell no. hell no. hell no. >> let me say again -- this is all part of what is going on -- out of control spending, taxpayer dollars being spent, 1.5 trillion dollar debt next year, 12 trillion dollars in debt. my friends are spending money like a drunken sailor and the bar is still open. it is going to stop. we are going to stop it with the earmarking. let us have a little straight talk. we lost control and lost elections because we let spending get out of control. we got mixed up in the earmarking and abram of scandals. people went to jail. we cannot ever do that again. we have to say to the american people we will stop this earmarking. we will stop this pork-barrel

spending. we of committed generational theft. the greatness of america is about the fact that every generation of americans has handed off to the next generation a better nation than the one that we inherited. i cannot tell you that that is the case with the way we are doing business in washington today. so -- what we need to do? we need to begin the fight. first, we're going to challenge this law constitutionally. it is not constitutional to force every american citizen to buy any product. [applause] i am proud of our legislature and our governor who stood up and said, "we cannot afford this. we cannot afford to have our patients on access thrown off. we cannot afford the increased

costs in an already severely distressed economic situation. we are going to, after we challenge this in the courts -- we're going to register people to vote. we're going to get them out. ." we're going to continue the message to obama, harry reid, and nancy pelosi. repeal and replace. repeal and replace. repealed and replaced. stop the pork barrel spending. let me just say, my friends, two things. one, i am so proud of the men and women serving in the military. [applause] i am so proud of the members -- i am so proud of the members of the arizona guard and reserve that time after time have gone to iraq and afghanistan and served with courage and bravery. and now, my friends, in the last three months, not a single american service member has been

killed in iraq. you will not see that in the media, but we have succeeded. they just had an election. it is a messy election. we had a messy election back in 2000. but it is the only country in the middle east outside israel that there is a contested election. maybe the neighbors can learn from the example of iraq. in afghanistan, we will succeed. we will succeed if the president of the united states will stay. we're going to stay the course, not say we are going to get out. we cannot cut and run from afghanistan. we cannot allow afghanistan to return to a base for attacks on the united states of america. we have never had a more professional, better equipped, more motivated military than we have today. recruitment and retention are the highest they have been since the beginning of the force. i want to thank our veterans who have been an example for the men

and women serving today. the proudest moments of my life was the ability to serve with men and women in the military. the next time you see one of them in uniform, go over and say thanks for serving. that is all they want. just say thanks for serving. my friends, i believe, as chairman of the armed services committee, which i will be when we regain the majority in the united states set, that i can address the security needs of this country. the need of arizona is jobs and jobs and jobs. i can be effective. i will fight for you. i will pass for -- i will fight for a balanced budget amendment to the constitution. i need your vote. i would be grateful for it. i wanted and i work for you. -- i wanted it and i work for

you. -- i want it and i work for you. i intend to earn every single vote. with your help, i will have the greatest honor in my life, and that is the ability and honor of being able to serve the most beautiful state of america again in the united states senate. thank you, and god bless america. thank you. >> ♪ here i go again on my own going down the only road i've ever known like a drifter, i was born to walk alone and i've made up my mind i ain't wasting no more time i'm just another part in need of refuge

waiting on love to carry may and i am going to hold on for the rest of my days because i know i'm in need to walk along the lonely street of dreams and here i go again on my own. going down the only road i've ever known like a drifter i was born to walk alone ♪ >> if you missed this campaign rally, you can see it tonight at 8:00 p.m. eastern here on c- span. hotomorrow, we will have the rally in that search light, nevada. that will be at 6:30 eastern.

executives from the internet companies google and go daddy talk about problems they have had operating in china. both experienced attacks from hackers they think could have originated in that country. they also claim of -- they also make claims of government violation of free-speech rights of private citizens. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> last year in tehran, a protester was shot. the video was captured by a woman with a cell phone. it was posted on youtube and watched around the world. this tragic death became a galvanizing force for international outreach. this is the essence of expression on line -- and

expected, unpredictable, but capable of capturing the minds and hearts of millions of people around the world. it is for this reason that the growing restrictions on speech on line demand a commitment from countries, civil society, and governments to protect internet freedom. i would like to make three points today. internet censorship is a global threat to human rights and economic opportunity. the growing problem is not isolated to one country or one region. as secretary clinton recently expressed, the impact on human rights and the global marketplace is profound. at google, we have experienced this firsthand. in the last two years, more than 25 services -- 25 governments have blocked services like youtube and blogger. youtube had been blocked in turkey because of videos that were against turkish news. iran blocked videos on youtube.

there was our experience with china, which has a measurable increase in censorship in every medium, including the internet. that leads me to my second point. the situation in china has led google to implement a new approach. in mid december, we detected a sophisticated attack on our corporate infrastructure originating from inside china. we are frequently a target of attacks. it became clear this was not a routine security incident. at least 20 companies from a range of industries have been similarly targeted. the attack was sophisticated, with the principle but unsuccessful goal of accessing gmail accounts. separate from these attacks, the accounts of dozens of users who were advocates for human rights in china had been compromised through malware and phishing attacks. the circumstances, as well as

increasing attempts to limit speech on line led us to announce in january we no longer felt comfortable censer in our search results in china. earlier this week, we stop censoring our results on our site in china. visitors are being redirected to the google site in hong kong where we are offering a search in chinese for users in china. figuring out how to make good on our promise to stops answering search has been difficult. -- to stop censoring search has been difficult. we hope the chinese government respects our decision, although we are aware its firewall could prevent users from accessing our services. we have already seen intermittent censorship of certain surge query's on our hong kong site. government should do more to protect internet freedom around the world.

internet, government, and nonprofit groups have a shared responsibility to protect a free and open internet. we support the global network initiative, which is a collaboration to create standards that protect privacy and free expression. more corporate members are needed to reach the gni's full potential. no single industry can tackle internet censorship on its own. government access -- arm action is needed. internet freedom must become a major plank of our foreign policy. the freefall -- the free flow of an spermatiinformation must be y principle. governments around the world should be transparent when the main demands to sensor or request information about users. google also supports efforts of congress and the administration to fund at technical solutions to counter censorship. i want to thank you for your

continued leadership in the fight against censorship on line. we look forward to working with you to maximize access to ideas and to promote internet freedom around the world. >> thank you very much. we appreciate your testimony. next, we will hear from christine jones, executive vice- president of go daddy. she is responsible for legal services, domestic abuse, compliance, and the legal department. she previously specialized in private commercial ledgelitigat. she is a cpa with degrees from more than one school. >> mr. chairman and members of the commission, for a few years now we have noticed that from time to time it is not possible to access our web site in china. we are not sure why. one could infer is because we host human-rights websites that

are deemed improper by chinese officials, but we have never actually been told the reason. regardless, every time it happens, millions of chinese nationals to try to visit our website or the websites of our customers are disappointed to find that censorship has kept them from free access to the internet sites of their choice. this is frustrating, as you might imagine. i am not going to dwell on that. instead, i want to briefly touch on five issues that are explained in detail in the written testimony -- monitoring and surveillance activities in china, attacks originating in china, spam, payment fraud, and what we feel the u.s. government can do to help alleviate these issues. then i would be happy to answer any questions you have. first, china's examination of internet activities of its citizens has increased in recent months. i mean very recently.

let me give you an example. this plays into what you talked about in your opening statement. we have been offering the .cn extension for about five years. in the beginning, deep ,cthe .c authority required us to collect first and last names, physical address, and an e-mail address. that is typical of what is normally required by that type of domain name extension. in december of last year, they announced would have to start collecting a photo i.d. in color from the head to the shoulders, a business idea, and a physically signed registration paper for all new registrations. in february, two months later, they announce we have to provide the increased documentation for all current registrations. in other words, we would have to

retroactively apply those rules. if we failed to provide it, the domain names were going to stop working. keep in mind some of these names have pointed to fully functioning web sites for as long as six years. we were immediately concerned about the motives behind the increased level of registration verification required. it did not make sense to us that the identification procedures that had been sufficient since 2005 were no longer sufficient from china's standpoint and no convincing rationale for the increase was ever provided to us. we were also concerned by the ex post facto or retroactive nature of the requirement. at the time the nationals registered their domain names, there were not required to provide the photo id or the business identification and other identification now being required.

because the new documentation requirement was to be retroactively applied to registrants who read previously registered their web sites, in some cases years before, it appeared the attention of the new procedures was based on a desire to exercise increase control over the subject matter of domain names registered by chinese nationals. we have been registering domain names since the year 2000. we serve as an accredited registrar for dozens of domain name extensions. we have 40 billion domain names under management, more than any company in the history of the internet. we have done this a lot. this is the first time any registry has ever asked us to retroactively obtain information on individuals who registered a domain name through our company. the first time. we are concerned for the security of the individuals

affected by the new requirement. not only that, but we are concerned about the chilling effect we believe the requirement could have on a new domain name registration and therefore the free exchange of ideas on the internet. for these reasons, as you mentioned congressman, we have decided to discontinue offering domain names in china at this time. we will continue to manage .cn domains of our existing companies, those people whose identification is in the process of being revealed to chinese officials. second, i want to touch on the attacks briefly mentioned by my colleague from google. in the first three months of this year, we have repeled dozens of extremely serious attacks on the systems that host our customers' websites, attacks

that apparently originated in china. that number only includes the attacks we had to get involved in. that does not include the attacks were our systems automatically repelled the attacks. the reason cyber attacks on us and other u.s. companies are troubling -- they are not new. there reflect a situation we have been combating for many years. on the spam issue, we found an overwhelming majority of websites are posted in china, often with service providers that choose to ignore complaints of spam and other illegal activity. we see no assistance from chinese officials to combat this problem. it seems to be the opposite. the force of the chinese government appears to justify the activities of those who engage in spam as a business model, instead of helping to stop it. on payment fraud, there is significant payment fraud originated in china. the payment fraud trend

includes the wide spaced use of compromised credit cards as well as gift cards and other on-line payment forms like the chinese version of petco. there is substantial payment fraud originated in china. there is no action by chinese officials to help us combat that problem. finally, we want to talk about what we think the u.s. government can do to help. our primary mission is to promote secure, easy, equal access to internet people around the world. we agree with google on that principle. we are also committed to ending the improper use of the internet, including for the invasion of personal privacy or to limit freedom of expression. it is a big problem. we hope the u.s. government will use its influence with authorities in china to increase

chinese enforcement activities relating to internet abuse while encouraging the free exchange of ideas, information, and trade. this would include the retraction of china's recent policies relating to the registration of domain names. we were encouraged to see there is a briefing this afternoon to discuss a movement by the global internet freedom caucus, which we hope will promote internet freedom. we're also following the online freedom legislation which purports to put the u.s. government on the side of u.s. companies and human rights activists when they deal with repressive governments. we applaud you for that. we are severely -- we are extremely grateful for the commission's attention to these issues. there is no silver bullet, but we are proud to least the part of the process. >> thank you very much. next, we will hear from the executive director of human rights in china and professor of law emeritus at city university

of new york school of law. she has testified on a variety of human rights issues before the u.s. congress and the eu government body. she has led human rights in china, an organization, in its help with investing in china. in 2007, the wall street journal named them -- named her one of the 50 women to watch for their impact on business. >> thank you, mr. chairman. i want to thank the members of the commission for your leadership, solidarity, and support for a difficult challenge to promote freedom of expression in china. i would like to request my entire written statement to be entered into the record and would like to comment on some of the responses chinese government officials have made while we were speaking last night, which are echoed in some of the statements. i would like to focus on a particular case and then and with some recommendations for

discussion and welcome your questions. as the comprehensive and excellent 2009 report and state department report for china and recent un human rights review of china absolutely demonstrates, the human rights violations in china are serious, systematic, and widespread. on top of the economic, political, increasingly soft power leverage of china, china is exerting enormous control over expression on the internet through the state of the art technology. it states secrets and state security system, the police and security apparatus, and the resulting self-censorship has been extensively mapped and inventoried in these reports. rebecca mccan akinnon mapped

the technology. the responses on the google decision -- this is obviously a story still in progress. it is a very complex story, so i think it is ongoing. there are three things that the official response says. after an initial effort to accuse google of being a cia operative -- that did not last for long -- the response has been a combination of an effort to rhetorically repackage the google decision and stating the obvious, asserting they are acting in accordance with law, and thirdly making some ludicrous statements like that there is no censorship in china and that the internet is fully open to they say there is no impact on china's international image or on u.s.-china

relations of this important development. clearly, google, as a major economic player, is very important and has an impact not only on internet which is global but impact on development of the i.t. sector and for innovation and creativity in china. it is extremely important to the region. what is at issue here, in addition to the role of the marketplace of ideas, it is really about whether china is ready and willing to be a mature, responsible member of the international community, one that respects its international obligations, including human rights obligations as well as -- under the wto, its trade obligations. it is unclear, from the vagueness of the chinese answers to date to the key question whether google actions are in compliance with chinese law.

it goes hand-in-hand with the mantra that any foreign company doing business in china has to comply with local chinese law. ironically, gogol's decision does comply with chinese law, particularly chinese law in the constitution that protects human rights and constitutional provisions that protect freedom of expression and freedom of privacy. i think that is important to keep in mind. in fact, the chinese law we will be talking about when we say companies have to comply with chinese law -- chinese law is quite complex. the across the border impacts that have been referred to by representatives smith -- i wanted to add that the experience of our own staff illustrates that the chinese authorities use repressive tactics at home, both low tech and high tech. it extends to chinese nationals and human rights defenders abroad. such tactics include blacklisting, surveillance, and

inhumane denial of permission to return to china for family funerals. this is another part of a harmonious society nor chinese. additionally, chinese authorities have been active, and increasingly so, in preventing independent human rights groups in succeeding to apply for united nations accreditation. we welcome the u.s. government's commitment to engage with the human rights system at the un. my written testimony outline some of the ways in which we are focusing on supporting journalists lawyers, and other rights defenders to our technology initiatives. we distribute 200,000 electronic newsletters every two weeks into china that published chinese writers, news, and discussion.

we get in about 75% to 80%. that is the censorship. there are other youtube and twitter initiatives. these have already been witnessed. their successful even though youtube is blocked. 20,000 to 30,000 people still reach youtube. some videos have gotten thousands of hits. let me move quickly to a case example of the frontline of the struggle for freedom of expression. we welcome this list. it is important to look at the list of individuals who, because of internet activities, are paying a heavy price. this is an independent intellectual. he is a longtime advocate of political reform, democracy, and human rights. he has been an outspoken critic of the chinese communist regime and one of the key drafters and organizers of charter 08.

with international attention and international diplomatic representation outside the courtroom on christmas day, a court in beijing convicted him of inciting subversion of state power, sentenced him to 11 years in prison, and two years of deprivation of political rights. it was for two essays that he had published on-line between 2005 and 2007. our publication, which we brought for members of the commission, took the six articles and all of the legal documents and translated it and ask the question, "what does constitute inciting subversion of state power in china?" these were the essays. there is one that debunks the notion that the cpc is the ruling party and conflates the party with the chinese people

and the nation. he says this is a fallacious concept. the second article -- the many aspects of dictatorship -- he describes the regime after mao. he says unlike most totalitarianism, this regime is more skillful in using pragmatic, flexible control to maintain stability, but it is a loyalty that is bought by the promise of a comfortable life. his third article -- can it be that the chinese people deserve only party-led democracy? this not only challenges the party boy raises a challenge to the chinese people themselves. he said that no totalitarian or authoritarian state stayed in power because of the power of the ruler. it is because people knelt. the last two articles -- the

negative effects of the rise of dictatorship and further questions -- this whole article about child slavery exposes the extreme government corruption and lack of accountability that continues to persist for thousands of children who were kidnapped and used as slaves. what is important is that the verdict sentencing him cites the number of clinics each article got. each article ranged from 57 to 5000 clicks. that is not people but websites. that is on websites that are censored in china. that means subverting power with a few clicks on websites that cannot be accessed in china. he is in prison for 11 years. this is a great testament to the insecurity of those in power but also the power and necessity of freedom of expression.

i know my time is up. let me say quick things we can pursue in questioning. on individual cases -- the political prisoner database is extremely important. we urge the commission to link your advocacy work on behalf of these cases with decisions that have been reached by international, independent, expert bodies. the man who is still in prison received a decision from the working group on arbitrary detention back in 2006 determining that his detention is arbitrary and in violation of human rights. we urge that you press for his release based not on chinese legal procedures but the fact that this was an independent body. we urge the already expanding areas of the uses of technology -- expanding uncensored platforms, developing more anti- circumvention tools and disseminating it, and promoting social networking tools. in terms of the companies, we

would say to provide and promote, encouraging companies to join initiatives. we appreciate the letter by senator durbin asking companies to join the global technology initiatives. the google decision illustrates the possibility of moving beyond an either/or mentality and thinking the choices are state and sensor or leave the country. technically, it has not left the country. we do not know that the one country, two systems move will work, but google has been able to act in a principled way. whether this will act is uncertaint, but the story is not over and the future is a long time. >> thank you for your testimony. next, we will hear from mr. edward black, the ceo of the computer industry association.

he has been the ceo of that organization since 1995. he previously chaired the state department advisory committee on international communications and information policy. he also served in the office of the commerce department and the state department, holds a b.a. and a j.d. from american university and washington college of law. it is good to see you. please proceed. >> members of the commission, is an honor to be here today and have a chance to testify on this very important subject of internet freedom in china. for too long, the business community has had insufficient support from the u.s. government in responding to other nations' ever to spy on their citizens and to interfere with the reasonable flow of services and information. companies are on the front lines in the battle for internet freedom. when they are confronted with foreign demands, the government's the represent these companies must leave in

the interest of freedom of information and free trade. our nation founded the internet. our government should have been out there promoting multilateral international understanding in order to maximize freedom of the internet. totalitarian regimes depend on controlling the flow of information, both domestically and from the outside world. the internet is no exception. it is a tempting target to turn into a tool of state control. we must protect internet openness from those who want to use it for oppression and for several noble but well-meaning efforts to control traffic that may chip away at its openness. i testimony is designed to focus on human rights aspects of censorship, on the trade aspects, and the underlying principle of internet freedom. the internet can be the greatest tool in history for people to

gather information, communicate, and do many other things that the human-righ race has tried to improve over the years, or the internet can be among the greatest tools of political repression, depending on how it is used. if we fail to take action, others might pervert the internet and bring about the orwellian future we thought we had avoided, one in which governments perpetually sensor and control -- censor and control and say they're doing it for our own good. it must treat this as a human rights issue in dealing with foreign governments. we are here partly because of the high-profile battle of google in china, but the number of companies and countries impacted are far greater. there are few easy answers for companies as they try to bring their technology services and communication tools into nations that have different rules about free speech and freedom of

expression. without the backing of their own government, companies are often faced with the unappealing decision to follow local laws or exit the market. staying and engaging can, in some cases, offer appealing choice is to citizens in a repressive country. the choices are not always simple or easy. as a trade issue, censorship has been ignored. the united states is an information economy. u.s. companies are leading vendors of information products and services. filtering american content and services has the effect of filtering american competition. combating it should be at the top of our trade agenda. restrictions of internet traffic affect trade in a number of ways. they may constitute a tariff barrier. there may be a violation of the principle of national treatment. the violation of the wto rules

on transparency and access and administrative review of regulations has had no impact in the world of internet review and regulation. there must be a trade rally when a company blocks access to a u.s. website and advertising on the sites is being blocked. trade in the products and services advertised are being interfered with. the european union should be praised at this point, because in 2008 they passed a revolution recognizing -- a resolution recognizing internet censorship as a trade barrier. there needs to be further implementation of the resolution, but it was a step in the right direction. steps we think can be taken to promote internet freedom -- first of all, the u.s. government should, on an ongoing

basis, investigate cases when internet censorship is brought to their attention. the state department and the commerce department responsibility to raise internet expressions in the dealings i have with countries on many issues around the world, on an ongoing basis. our nation has missed the opportunity to use existing trade agreements to restrain internet restrictions, censorship, and surveillance. the ustr should be high lading censorship in its trade reports. in 2006, it issued a report that was billed as a top to bottom review of u.s.-china trade relations. it discuss simple infringement of intellectual property, which we do not support, yet did not mention internet censorship policies. the ustr has an important annual review process focused on identifying intellectual property problems around the world. i think we should replicate that process for internet freedom and

violations there of. the u.s. t.r. should review censorship on the internet and seek ways to take appropriate action. we need to negotiate provisions that promote internet commerce, openness, and freedom in our trade agreements and other agreements. i will not go into details, but it is a great initiative and we actively support it. i want to make another point. internet freedom begins at home. the u.s. must lead by example. we need to discourage censorship and surveillance ourselves. we need to not restrict exclusive packages and think twice before blocking contact we perceive as unsavory. once open as a rhodes is very hard to get it back. when we go abroad advocating, we cannot go with dirty hands. our credibility is critical if we're to be an articulate

advocate in the international community. if our government leads the fight by example at home and negotiations around the world, it can support u.s. companies who are trying ethically to be in challenging markets. in conclusion, china's policy of censorship has become a matter of global public concern. if the u.s. government does not push internet freedom to the top of our priority list, foreign governments over the global conclude they are free to pick off individual companies and intimidate them into submission. we need to elevate this to the top of our diplomatic and trade agendas, consistent with our own internet freedom policies, and fight for internet freedom as a common principal, so other nations understand that threats to internet freedom, we will fight in one of our foreign the manifest. >> thank you very much. we will hear from ambassador mark plummer. he served in the u.s. state

department from 1964 to 1990 and was deputy assistant secretary of state for the soviet union, and u.s. ambassador to hungary. he was instrumental in the establishment for the international and dormant for democracy. he is vice-president of the center for communications, health, and the environment. he is a graduate of yale and a widely cited oauthor. welcome. . .

>> there is a lot going on in china that we should be optimistic about. i want to focus on telling a story. some of the students who were present on tiananmen square came to the united states and earned a doctoral degrees in computer sciences from leading american universities. they realize the enormous popularity and potential of the internet in china in were urged by chinese still in china to find ways to use their skills to combat growing censorship and the overall decline in human rights. beginning in 2000, they developed a system of software and servers, which over the past decade, have grown to be the world's largest circumvention system, providing for roughly

90% of anti-censorship traffic in china and worldwide. hundreds of thousands of people are using the system. it works through the distribution of interested in secure free software. it constantly is switching ip addresses on dedicated servers across the world. they use volunteer labor and virtually no financial support from anyone else. the major limitation is simply money. they have had to make hard choices between serving iranian users and reducing their ability -- availability to chinese users as their servers crashed. they need to buy more servers

and support full-time staff. competing with and staying ahead of over 50,000 heavily-financed engineers and sensors in china requires a dedicated improperly financed team. we spend $800 million on this per year. we spend $1.7 billion on usaid democracy programs. surely we can and should spend $50 million t zero $100 million a year on systems to circumvent -- t$50 million to $1 million -- $100 million a year on systems to circumvent internet censorship. congress appropriated money to begin to scale up the system and any others which demonstrate proven ability to circumvent internet censorship in china, iran, and elsewhere. in 2010, another $30 million was

appropriated. in my 26 years within the state department and 20 years outside, working on democracy and human rights, i have never been more convinced of the power of any innovation to help those still living in one of the world's remaining dictatorships, half of them chinese. they have the ability to liberate themselves. i have never been more appalled at the state department's refusal to do what is so clearly in the national interest of the united states. in flagrant and repeated violations of congressional legislation, my old home has refused to use the appropriated funds to scale of an existing, successful search engine system -- circumvention system. they have made a mockery with the frequently voiced and insincere commitments to help ensure freedom of the internet.

let us take one dimension. there is a profoundly false understanding of the global- china at issue as if the ruble must lose its china market -- as if google must lose its china market. people can access googled..com. sell baidu short. watch google pick up elsewhere. it, too, should be pressing the state department. if it does so, its franchise will be enhanced for being not merely a wounded victim, but the provider of enhanced, closed society access to the internet. fortunately, five of your colleagues in the senate wrote to senator clinton on january

20, saying in the strongest possible terms that enough is enough. they have to began to fund -- they have to begin to fund the existing circumvention systems. some people in the department indicated a willingness to lead to talks. several senators are willing to put the hold back on if we do not get a serious indication that they are engaging and are going to respect the will of this congress on this critical, national issue. let me conclude by urging this commission, which does such wonderful work, that you join your colleagues in urging the state department to do what we all agree with -- to circumvent this censorship. thank you, mr. chairman. >> mr. plummer, thank you very

much. we will do just that. we appreciate your testimony. i am told there are four votes that just began in the house. i would like to recognize the house members for a series of questions before they have to leave. i want them to have the opportunity. >> thank you, mr. chairman. miss hom, you mentioned the outrageousness of the chinese government saying there was no censorship of the internet. they made that statement that no one died at tiananmen square. he was a no-show. we had people who said they saw and witnessed the dying. hopefully it is so laughable that such outrageous statements will cease. the universal periodic review last and on february 9, 2009, on china -- it only takes 1/3 of the member states on the u.n.

human rights council to call for a hearing on any country. the u.s. government should call for that. it could be done. it would bring a great spot light on what they are doing on the internet and others human rights abuses. i would like to hear your thoughts on that. i have many questions, but not enough time. i will leave it at that. >> thank you, mr. chairman. i want to ask one question of the witnesses. that is, for each of you, whether it is google or godaddy or the organizations you represent, if you have one, too, or three things -- one, two, or three things that the federal government could do in an operation -- operational way, i would like to hear your

responses. i suspect, ambassador, that i know what your top one would be. i want to take a moment to say that i could not help but notice that four out of our five witnesses are legally trained. there is criticism at times about the litigious nature of american society and the number of lawyers we have. i want to say that my response to that has been, in the international context, show me a society where there are more attorneys then generals, and that will probably be a democracy. shimmied reverse and the story is not so good. ever -- show me the reverse and the story is not so good. everything has its price. mr. chairman. >> thank you. countries who are led by teachers do not have needs for military, since they have started. on behalf of teachers, we can

learn -- my mother said it best. you have two eyes, too good years, one mouth. use them accordingly. -- two eyes, two ears, one mouth. use them accordingly. thank you for a well-balanced presentation. thank you. >> very briefly, the chinese statements for the record site international norms they feel that google and godaddy ought to live up to. tell us about your views on the online internet freedom act. >> thank you to my colleagues from the house, active participants in this commission. we are sorry they have to go to vote. we appreciate you being here. mr. davidson, can you tell us a

little about how this works with the chinese coming to an american company asking for cooperation in censorship? what types of information have authorities asked be censored? how do they instruct and deliver the information of what they want to be censored? can you give us some organic notion of how this works? >> let me try to give a general notion. in some ways, we are not actually permitted to talk about all of the requests we get, that are given to our employees in china. what i can -- i would be happy to characterize it. >> are you permitted to do it outside of china? [laughter] >> we do not share a lot of information about china outside of their. -- there.

we're in a terribly difficult position. there is not very much transparency at all about what is being requested and whether it is being requested of everybody. we do not know if they or special requests or not. that places us -- we do not know if they are special request or not. that places us in a very difficult position. you can see they are far- ranging, political in nature, and quite different from the kinds of results we have had in other hearings. they show the results one gets from a censored version of the largest surge engines, including ours -- large search engines, including ours. that is why we felt we needed to make this change. the lack of transparency makes it extremely difficult. >> i admired the judgment. i have indicated that to you. when you go to china to do business, is there someone in

china that says, all right, you are here now on chinese soil. we do business the chinese way. here are a set of written instructions. you must follow them to the letter. is there something in writing some place that describes to your company what your obligations are under what they perceive to be chinese law? >> we operate under license in china. in part, the problem we have all -- the company's there are trying to address -- the companies there are trying to address, is that the requests can be brought and there is not always -- they do not always appear to be operating through ruled law -- the rule of law. it is not like getting a court order from a u.s. judge. part of the concern is that we would like they're to be more transparency and a clearer

process and there has been. others have had this experience as well. >> you indicated there was substantial increase chinese government activities in december and february. was there any discussion by the chinese authorities about why they were doing this, or in the admission that they were increasing activities? -- or any admission that they were increasing activities? >> if i could breathe freely -- if i could briefly respond, we wish there was a rule book, something you could set on the table and say, this is what you have to do. to our knowledge, that does not exist. we just, from time to time, get a directive. in this case, two days before the broken up, we got a communication saying they're going to change the rules.

two days later, we got the rules and then we were supposed to implement them a day or two after that. there is not a buildup or indication. when our web site gets shut down in china, we never get told why. we would like for them to tell us what the rules are. it is impossible to find out, because they simply will not answer the question. >> have you had intellectual property stolen? i think google has. you indicated attacks have been made on your system repeatedly. have you had any intellectual property stolen? >> i am not sure what you mean by intellectual property, because it could be a broadly- defined term. a lot of a stolen i.p.'s do come from china. most of the attacks are designed to disable website of our customers, if human rights

sides, tiananmen square anniversary sites, website blocks discussing tibetan monks -- blogs discussing tibetan monks. they support many other things. if we -- i do not know if we have had soft were stolen. i do not think so. -- software stolen. i do not think so. >> thank you. ambassador, why do you think the state department is so behind on addressing the circumvention systems? you worked there for how many years? >> 26. >> what could explain their behavior? >> one official was quoted as

saying that the chinese authorities in beijing would be, to use my previous work, appalled, would be outraged if the global internet freedom consortium's systems were financed by the state department. it is clear from talking to my friends in the state department and the white house is that there is concern about the chinese reaction. >> this is an old story. do not offend them. we see in this -- we see this routinely in trade negotiations. it is an old story that is now surfacing with respect to this issue. >> there is another issue. the department did not ask for the money, did not want this priority, and it feels put-upon. it does not recognize we have this long-term challenge in front of us that will require major resources of financing and

talent. they are not in to that yet. they have not made that transition conceptually. >> miss hom, you, at least with respect to one chinese citizen, put a human face on the victims here. the request of godaddy to describe who these people are, names, photographs, etc. -- i assume that what the chinese are attempting to do with that is to intimidate and track down certain dissidents in china who are behaving in ways they find inappropriate. what is your sense of how many citizens in china have been tracked down by the government, apprehended, tried, sent to prison for internet transgressions? do you have a sense of that? >> related to the overall lack

of transparency about numbers in the criminal justice system or any judicial detention systems, it is very difficult, because you do not have information being reported in that way. if you just look with an eye towards relationship to the internet activities, you can see a list of individuals in prison in detention, who have been convicted to convert -- convicted of converting state power or leaking state secrets, it is clear that a great majority of them will have engaged in these activities on the internet. the revised state secret flaw that was released in june made it perfectly clear that the law provisions apply to the internet. the pros -- the proposed changes

make it clear that disseminating information on the internet will be covered by the state secrets law, which, as you know, can retroactively classified a piece of information or communication as a state secret with very serious consequences. >> mr. black, you are involved in a substantial amount of commercial transactions by your member companies. i am wondering whether the censorship and regulation of the internet in china has an impact, and if so, how, on companies that wish to sell goods in china? >> we are convinced this is an important avenue to pursue, not only because it is important, but because existing trade agreements and possibly future trade agreements, will be able to deal with some of these issues in an already established legal framework. the easiest example is any website that is blocked.

it has a variety of companies -- it could be automobile companies, procter and gamble -- who advertise their and therefore are and able -- and therefore are unable to reach the audience. you can go to website and there is a politically untenable website, all of those companies would then have their ability to do commerce affected. the reality is you have electronic commerce -- it is a many multi-billion dollar business, perhaps even trillion dollars. if you have a significant impact on the communication of data and information about products and services, you have an impact on trade. >> mr. black, is their attention -- is their tension

-- there tension for you to come here and speak to us? a tension with respect to your constituency and your foundation, or association, rather? >> within the private sector, many companies are internally divided on how to deal with doing business in the regime' re their local laws conflict with our values. >> over time, there have been many occasions where we say, business is business. the rest we will deal with later. human rights is separate. >> i think these issues are way beyond the internet and technology issues that affect

all business. i would put a good word in for the technology and internet world, that i really do think the culture of our sector of the industry is one of openness and freedom. there is a great willingness to say that is what we are about. we are not just about selling something. we are about bringing this tremendous industry to advance people's well-being. you're absolutely correct that there are constant pressures, not necessarily on me, but internally, in the dialogue about how to deal with this, with the reality that it can have a significant impact on stockholders, and on the ability of the company to survive. >> i want to ask a question about google and godaddy. you announced you are changing the way you operate there. i will ask a google a couple of things. -- ask google a couple of

things. some think you are daft. you follow the customs, tough luck. stop crying. you're setting a bad example for those who say business is business. is there some of that? >> every company has to make its own decisions about how to operate. we have made no secret that this has been a difficult decision and process for google. we went into the market hoping to make a big difference. we were initially pleased about some of the changes we were able to bring to the market. ultimately, over time, as we have described, we came to a different conclusion about what was right for our business. we have gotten some good feedback, and we hope that this is a process where other companies will also get involved. we need more help in the gni. >> you are hoping to start a

trend? >> we hope to offer our arsen services in china. >> you are an executive with the big, successful, growing, worldwide company. the news at the moment -- right up to the moment. we know what has happened so far. we know about the discussion to move to hong kong. how will this play out in the end? >> we do not know. we have moved our servers to hong kong. >> could you give me the best and worst case scenarios? >> the best is that people in china are able to access our uncensored search engines and have all the information that it provides. a bad scenario would be that they are blocked out right and that other services are as well.

others may rush in to fill in the void with censored products that did not fill in a lot of the information. our hope is that there will be more of the former. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> tomorrow, a discussion about the health care bill. howard dean will then discuss his views on the health care bill. we will also talk about the future of the tea party. "washington journal" is live at 7:00 a.m. eastern on c-span. >> this week and, on c-span2's "booktv" -- the beginning of the 20th -- the end of the 20th- century and the beginning of the 21st century. throughout the weekend, look for highlights from the virginia festival of the book. by the entire schedule online at

-- find the entire schedule online at booktv.org. >> we will hear from amr moussa and the palestinian president mahmoud a boss. -- mahmoud abbas. this is about 50 minutes. >> mr. chairman of the summit, your majesty's, your excellencies, stsarab citizens, ladies and gentlemen, this summit is held in very critical moments. police -- we extend our gratitude to our host of the summit.

it gives us great responsibilities. i would like to express gratitude and respect for the state of qatar which has displayed a great seriousness and very hard work in facing the challenges that the arab nations face. they achieved a number of successes in their diplomatic and political work. i am sure that this will also characterized the libyan chairmanship. mr. president, majesties, excellencies, it has been ten years since you elected me as the secretary general of this league. next year, at this time, it will be the end of my mandate.

i worked very hard to preserve a framework of the collective work and preserve the common interests, and worked hard to formulate common grounds for the arab political stances, and to guarantee consensus among ourselves and the number of progress that we can see. it has been very slow process and quite fragile. we might need to review the ways we do things to be more in tune with the times and challenges that face the region and the world. it is demanded of us in this summit to decide and discuss the new strategies and tactics for

the future, to face the new challenges. we will find -- you will find in front of you a detailed report that i composed, regarding the past mandate in the past cycle -- and the past cycle, in terms of the issues that face us. it is important to suggest the following. first, there is nothing wrong with the patriotic feeling for the nationalist feelings. -- patriotic feeling or the nationalist feelings. it consolidates the community of nations. it is not against the modern -- against modernity. the common, collective arab worker is not an and the principle. we need to preserve and continue

to work on -- is not an empty principle. we need to preserve and continue to work on what others show the way. any suspicion or any questioning of this, and work -- of this comon work -- of this common work is unfair and an attempt to bring us down. the common past has not always been failures. but it has shown a number of successes, as i said before. even though i am not here, going to present all of the successes in details, there are a number of details that should be mentioned. the electric network -- to the inter-arab -- the electorate

that work -- the electric and natural gas networks, the highway networks between countries, and plans to implement a network of roads, and the free trade agreements between the arab countries. we are starting to work towards a joint region, and other or cooperative initiatives -- and other cooperative initiatives. we are opening the way to joint arab works and decisions in the future, in the framework of the arab league and the communities of investors, and trade. there are many kinds of industries that are joining in

forums that are being done or passed with china, south america, and india. all of these are good indicators of progress of the joint arab work. fourth, the arab reconciliation and facing the the complex and risks -- facing the conflicts and risks that appear between arab countries is a demand of those who are fed up with their leaders fighting each other. some are now representing an important framework for this objective of arab reconciliation. many challenges based us all.

-- face us all. the palestine situation, yemen, somalia -- these challenges are accidentally -- x essentially -- existentially important to the society as a whole. the muslim world is a center of the dealing with this. it can be collected for reform programs that are strong and sound. you have decided in summit documents to modernize. even though we were able to put some activity and energy, we still need to review them and relaunch them. it this is critical. -- this is critical.

it needs to be a permanent point on the summit. we need to present yearly reports on the levels of what has been achieved in this respect. number six, a major challenge is how to educate our coming generations to push and prepare them to deal with these times. the 21st century is not just the century that comes after the 28th century. it is a new era that brings new challenges -- after the 20th century. it is a new era that brings new challenges. we need reform on the education level. we need to give a scientific our priority -- we need to give scientific research a priority it has never had. the reform of education and preoccupation for science and

scientific research, including nuclear technology. all arab states have a joint non-proliferation treaty, which regulates the country's willingness to acquire a peaceful, nuclear technology. why is there this slow process? the regional security -- the arab world is facing security threats. some of them our strategic. the short-term ones are about terrorists and terror cells in a number of nuclear -- in a number of arab countries. there is the possibility of civil wars exploding in any region. here, let me not dismiss our own

responsibility. i think that this is a problem that can only be faced if we join together -- if we deploy a joint effort. the strategic threats -- i think this needs to be discussed collectively. the strategic dimension needs to include a number of points. one of them is our regional, nuclear dimension. it tells us of one nuclear power in the region -- israel -- and another possible or probable nuclear power, iran, which represents the power of a race in the region. we need to have the middle east free of nuclear weapons. we need to be free of the

nuclear security threats that exist in the region, and those that might exist. the security of the arab region and the regional security issues, and the international security issues are all interconnected. we also notice turkey as a major player of the region and as a neighbor of the arab countries and the arab region. turkey is showing a high -- precise and highly effective diplomacy and political will. we also seek a run, tactically -- we also see a brand -- we also see iran, tactically and

strategically responding. there is diplomacy that has influence on all the security situations of the region. at the same time, the image is not clear from the israeli role that keeps a stranglehold on the lives of palestinians and threatens us with what is called the iranian threat. they use all kinds of virtual or even real threats. the israeli interest, which has nothing to do, or nothing in common with the arab interest, is getting its own description of the situation, while we should study and look at the situation from our perspective that is totally independent from the israeli perspective.

we also see that the shiite and sunni divide is being taken out of its historic cocoon and being used to exacerbate any other conflicts that have been brought from the depths of history. it has been 1000 years since it has been active. but it is now being used. i think this conflict represents the biggest and most dangerous threat that the region faces. it is no less serious or no less dangerous than the nuclear threat, and therefore it needs to be addressed very seriously and swiftly. the question is not about a sectarian rivalry that exists

everywhere but in other societies and religions. it is about the level of the threat and the goals of those who are exacerbating it. there is ignorance surrounding this view. there is the fragility in the education and stability of the region. i mentioned some regional problems that have affected some of the countries with foreign intervention dimensions to them. they are even more serious when we talk about the possibility of contries -- countries being split into a number of countries. we need to start to formulate a unified position, in terms of regional security, and start to coordinate our positions at the summit coming in may.

we need to have a nonproliferation of nuclear weapons. the summit needs to call on israel to stop developing its nuclear program and put its nuclear program and there -- under international mont -- under international monitoring. it is necessary that it has to be implemented before the coming summit of 2015. also, we need to give the right for -- countries to develop peaceful, nuclear technologies that are provided for. we need to reform the peace and security commission of the arab league. the countries of the gulf and

the horn of africa need to keep a close monitoring of the security situation and the threats in the region, including the possibility of creating a piece -- peace maintaining force -- an arab peace-maintaining force that is ready to be deployed within the conflict -- within the context of any conflict with the united nations. as i said in the beginning of my speech, the actions of some countries that are our neighbors in the region and the common interests or that we have, and the conflicting interests, particularly our brotherly countries of turkey and iran. i also mention the african

dimension that also interacts with us and meet our attention. there are neighbors with whom we have interests. we have joint interests and very close relations, like with the problem involving some groups and somalia, and our commitment to somalia as a member of the arab league. in this context, i want to mention the countries in the south-sahara, the sub-saharan, who have joint interests. we have historic and cultural links to them. there are a number of countries around us on the mediterranean

and in south korea -- and in south europe. i suggest that you decide launching a -- a -- a body of countries -- arab countries and the countries that i just mentioned in an initiative that can be launched from the summit. i suggest that we start inviting turkey to be the first nucleus with the arab league countries. i suggest that we look at chad, whose close illicit -- whose constitution stipulates that arabic is the official language. we should also look into other countries on the basis of

consensus of the members, if you agree. i suggest that the foreign ministers of the arab league start putting mechanisms -- implementing such steps which will be historic and which will make the arab action very effective. let me explain hear something about iran. the situation calls for more than ever -- that we start an arab-iranian dialogue to start dealing with the issues that the secretary general needs to be involved. i understand that some members have a concerns about some of the iranian positions. but this does not preclude the possibility of dialogue to

determine the future relations with iran, with which we disagree on a number of issues. we have a joint history and joint geography, and a great number of common interests. this dialogue is the only possibility to call iran to be a part of this regional body and organization. the disagreements between the west and iran have not stopped them from dialogue. why do we not have dialogue with iran? israel has no place among us as long as it is seeing itself as a country above the international law. [applause] if it keeps going against the peace process and rejects the possibility of a palestinian state with sovereignty, or

withdrawing from arab countries, or respecting the arab identity of jerusalem -- israel has no place in such a regional organization. [applause] the peace process in the middle east -- the efforts of the israeli-palestinian conflict and the israeli-syrian-lebanese conflict has entered a new period. we have relied a lot on intermediaries, instead of the united nations monitoring in hosting the negotiations -- monitoring and hosting the negotiations. we have agreed on an open-ended peace process, which ended up

being an endless peace process. israel has occupied its territory and continues to do what it has been doing for the past 20 years. settlement activities and war crimes. there is continuous changing of demographics and a changing of the identity of the arab lands that are included in jerusalem, which leads to great frustration. regardless of that and despite the israeli stubbornness and the double standards that we have seen in the past decade's end up to now -- decades and up to now. some developments have happened that need to be taken into consideration and built upon.

some of those developments that can be described as positive include that there is an international -- it is getting close to unanimity to refuse to the policies of settlement. president obama's position calls for an immediate and total freeze of settlements. yes, we see steadfastness against settlements. number two, there is also a universal position condemning the israeli steps in jerusalem, for murder -- regardless of the legality of the steps. there are considered an obstacle to peace. there is unanimity around the to-state -- the two-state

solution. the arab initiative -- it explains the commitments and responsibilities and obligations of both parties, which might lead to putting an end to the conflict with israel. five, in the peace process cannot be open-ended, but needs to have -- any peace process cannot be open-ended, but needs to have a timeframe. there needs to be monitoring of the peace process. it is not possible anymore to accept a peace process that is a drama or theater that is simply fooling people, or a trick for israel to finish up changing their realities on the ground and the changes in jerusalem.

despite the israeli attempts to renege on its commitments, there is progress. the progress is not coming from the void, but coming from an arab, solid position to refuse the israeli steps. also, because the israeli stubbornness and arrogance has reached such high levels that it has led even friends of israel to reject the israeli policies. we observed the israeli government but all -- the israeli government as it commits oneis another and we see a rejection of international community's and responsibilities. we need to follow up very closely on the situations

internationally and take every opportunity to reestablish the right of the palestinian people and the right of the syrian and lebanese to have their own lands back from israel, as is stipulated in the arab initiative. the israeli policies that do not allow for any achievement of peace in the region or do not allow opportunity to breach -- or did not miss any opportunity to breach international law, we need to put an end to this. the commission and arab league have studied steps and have taken into consideration a number of opportunities. we're developing an alternative position that will be suggested to the leaders for deliberation and a decision.

it is an unprecedented turning point. we are very aware of the efforts. we are not going to be part of a maneuvering tactic while the land and geography are being changed and altered to make the peace process, and to make the palestinian state impossible, or to change the identity of jerusalem, due to what israel is claiming is an unjust narrative about jerusalem. i believe that we need to be careful of what is coming ahead. we need to discuss a number of options, including the possibility of a total collapse and failure of the peace

process. i was for you to discuss this in your closed session this afternoon -- i wish for you to discuss this in your closed session this afternoon. the situation is still a cause a preoccupation. we need to work hard to preserve the integrity of these countries. i would like to mention the recent elections in iraq and congratulate the iraqi people for this and their advances and progress in sudan. we have noticed the possibility of solutions in dar for -- darfur. we have seen very difficult negotiations that took place, and see hope inwith regards to e

south of sudan. national unity is an attractive solution. the keys to solutions of the arab ills is development, possibilities of investment in a way that leads to real stability of the political, social, and economic situation. i hope that work will continue through the arab league to achieve such objectives and that the firm commitment to solving the problems and conflicts and challenges of each country. there are a number of suggestions, including from the republic of yemen, that will be

discussed in our closed sessions. in the past nine years, i tried very hard to preserve the integrity of the arab league and to be its spokesperson, and speak in the name of all arabs, and to present an agenda that is based on the four pillars -- political, economic reform and progress. i do not claim that i have succeeded, but i say that i tried my best with all the tools and resources that i have and with all the sincerity. the arab league cannot continue like this. the election of the coming secretary general in the 23rd summit will be an occasion to renew the commitment of the arab league to support the organization. it is not possible that the

secretary general fulfill its mission with a budget that is insufficient. the arab league is accused of being inefficient, while the responsibility lies on their member states. there will and political activity is what needs to lead to the arab league, not the other way around. i call upon you to review the budget and double it, so that we can increase the level of expertise that the league needs. i call for that. i am about to finish the second mandate that you elected me for. that was enough for me.

i have been pleased to work for the arab interest and help them he'll their -- heal their rifts. i have presented a number of ideas i wish you to look into with all of your wisdom, experience, and your upholding of the arab interests, particularly at the summit. this puts an end to the first decade of the 21st century. i hope the new decade will bring prosperity and peace to the future of the arab world. thank you so much. [applause] >> today, i address you, dear brothers, in the name of my palestinian people, from our belief that the cause of the palestinian people in regaining

its rights is the central cause of the arab countries. it is therefore representative undoubtedly a point of consensus on one of the strategic basis of the joint arab action in the future, particularly that we are living in an exceptional circumstance, very dangerous conditions that will form a turning pope in our history. -- turning point in our history. the direction of the future will rely on how we deal with this phase we're going through and what extent we are ready to face these challenges. there is no doubt that you are following with us the dangerous and grave developments. you know what israel is doing

against jerusalem and the citizens of jerusalem. . >> the third of the two holy places of islam has become a target of the occupation and the israeli extremists. these campaigns against the sacred places of muslims and christians in jerusalem, the

capital of a palestinian state, and alter the islamic identity and isolate the sacred town from the west bank. that is a decision that seeks to affect the negotiations. it is an obstruction to the peace process as a whole. it is a clear breach of the agreement, the commitment, and guarantees presented, including the american guarantee given to us in the madrid peace conference and the other declarations of international legality. it is looking down on feelings of muslims and christians on -- in the world. i have a voice said my dear brothers and i renewed again

today that jerusalem is the jewel of the crown. it is the door and the two o peace. playing with this sacred town by the occupation is enhancing the fire of conflict,. during the crisis, and starting new wars in the crisis. -- in the reason -- playing with the sacred town by the occupation is enhancing the fire of conflict and starting new wars in the region. this new attack against the mosque in jerusalem, we renew our commitment to every grain of soil and every brick of jerusalem. we are committed to defend the capital of our country, the church of the nativity, and all of the sacred places. we are determined to support the

steadfastness and courage of our people. we reiterate there will be no agreement that will not guarantee the occupation to our land and jerusalem. there's no meeting a palestinian state without jerusalem being the capital. dear brothers and sisters, at this time when we're fighting to defend jerusalem, our nation, and our people, we are facing a confrontation in the peace process. we have welcomed all of the sincere attempts in the peace process. we have welcomed the new directions of president obama, particularly the two-state solution. we have worked with the american administration in a continuing effort to translate these

visions into reality while preserving the principles of our position determined by the summit and the arab initiative. we have reiterated these positions everywhere. we never came under influence. we did not abandon our role. we cannot allow for the palestinian voices to be absent from any forum. we want to be brave and courageous to defend our rights. we have reiterated in all international forums that we are committed to the peace option. we believe it meets the requirements that the international community has established to relaunch the peace process with negotiations.

on top of that, there is a total freeze of settlement activities in jerusalem and the west of the occupied palestinian territory. the clear statement of the framework of the peace process, we have found understanding of our position in the world. we understand the uselessness of negotiations was settlement activities continue. we understand the absurdity negotiations at a time when the occupation is working to delineate the borders that respond to its expansionist views. this idea of a country with a provisional order is what we reject. we reiterate our objection today. these countries understand that any peace process is doomed to failure as long as it lacks a

clear framework based on what the international community and legality has determined. this has been cleared through the u.s. envoy george mitchell in what had been called the proximity talks. you have been notified through the committee. mr. mitchell has said the time frame will be 24 months for talking about all of the final questions and solutions. the borders of the frontier will be cleared.

the attempt to get the peace process on the previous track, we are committed to all of the arab initiatives. we join in coordination with all of our friends and brothers. the continuation of negotiations needs real partnership and a sincere partnership. this partnership is contingent on the true intentions of the other side, the israeli side, and its commitment to the letter and spirit of the previous accord. there is no need for resuming negotiations without a green -- without agreeing on previous agreements. the decision of the palestinians to relaunch the proximity talks under the auspices of the americans, this is not possible without changing

the situation on the ground. continuing the settlement building, the current israeli government has continued to commit crimes against our people. gentlemen, i continue to say to the arab people that jerusalem and its surroundings are a responsibility that god almighty has bestowed upon us. the settlements and risks, we need to stop all that. a call when you to work seriously and swiftly to defend and save jerusalem, to reinforce our opposition, to preserve its cultural and religious identity.

i want to reiterate the importance of us working on a number of points. one of them is to call the international community, particularly the security council and the european union and the international organizations, particularly unesco, to not recognize any unilateral steps that israel undertakes in jerusalem. we put the responsibilities to stop such measures in the historic archaeological sites of jerusalem, bethlehem, and galilee and the rest of the occupied palestinian territories to save it from the israeli risks. they're more than 150 such archaeological sites. the israelis are working to include it archeological and

jewish places -- to include it as archaeological jewish places. the need to observe the israeli breeches on the ground and prevent them from happening and provide international protection to our people. no. 2, the arab group in new york has called for a special session of the general assembly to condemn the actions of israel in jerusalem and enforce the international legality on israel. the occupying force has no right to change the situation in jerusalem. no. 3, to mobilize the support of arabs and muslims and cooperate with the islamic conference and commission of jerusalem to stop the actions of israel in jerusalem and mobilize the international opinion to stop the aggressions

on christians and muslims heritage in jerusalem and reiterate that eastern islam is an occupied land. all measures that the occupying forces undertake are nol as your resume is the capital of a palestinian state. the most immediate financial support for the funds of jerusalem to increase the support agreed upon in the route -- beiruit in 2002 to preserve and reinforce the resistance of the palestinians in jerusalem. the arab funds also need to implement developments in the sacred town to reinforce the

presence of the arab populations there. they need to work with the palestinians and the palestinian budget. 58% of it is now being dedicated to our people in gaza. no. 5, to put a plan for arab action. the secretary general needs to call on the arab league ministers to follow up in the coming three months. mr. president, your majesties, your excellencies, saving the two-state solution and the risk is facing and the future of peace and security in the region needs swift action to impose on israel and declare a

full review clear position of accepting the two-state solution on the borders of 1967. i say the two-state solution because israel up to now has not believed in this option. it is not working in this direction. we do not know what direction they want to take us. israel needs to be forced to stop all of that settlement activity. the road map stipulates that implementing these points will be necessary introduction for the possibility of success of any revival of the political processes that might lead to ending the occupation and lifting the siege of our people, particularly in the gaza strip. we need to open the safe passage to protect