of the appropriations bills done, they also are trying to get into this tax cut debate. the senate wants to -- senate majority harry reid has signaled they want to bring up debate over extending the bush 2001 and 2003 tax cuts which will expire at the end of the year. there are only a few weeks left. it's not sure what will be pushed off until after november or what will actually be -- just pass a continuing resolution extending the current funding levels. >> we saw what happened to walter mondale when he talked about raising taxes. is this going to be an issue between republicans and democrats? >> i think so. it's all in who wins the race to define what is actually happening. this is not a new pledge from democrats. go back to the 2004 campaign, this is what we heard, how are

you going to pay? the tricky part for the democrats and the white house is to make clear what they want to do, they want to roll back the tax cuts for the wealthy. just like they said on the campaign trail six years ago. it's not a democratic policy but so easy for republicans to frame this as an across-the-board tax cut and as we know from walter mondale and george bush 41. raising taxes is a good way to lose. >> let me conclude, congressman kevin mccarthy said if the democrats control but much more narrow, he contends there could be a fight for the speakership within the democrats. it may not be nancy pelosi. have you heard talk along those lines? >> there are always rumors to that fact. it's not entirely clear that will happen. a lot of republicans are trying to drum up a controversy on the

democratic side. if the democrats lose their majority, certainly i think pelosi may face a face for the minority leader position with steny hoyer or any other ambitious lower ranking lawmaker. her days may be numbed if top leadership of the democrats want cold onto the majority. >> let's say that that does happen and the republicans in a year which many people thought would take control, could you see a fight for congressman boehner's position? could there be a fight within the republican leadership? >> potentially. eric cantor and john boehner, while they get along publicly, i'm not sure they are best of friends and there is some rivalry there. but i think that cantor may -- it depends on what eric cantor has in mind for his own political ambitions. 2012 there is a senate race against jim webb in virginia and

may throw his hat in the rining ring for that or he may want to put out his name for a perspective v.p. slot. i'm throwing out speculation. those are all things that i'm certain they will be calculated as to whether or not boehner needs to be challenged. >> let me ask you over the white house, the longest serving cabinet member is defense secretary gates. as to any sense he will stay or step down or are there others that may leave the white house? >> we will start seeing significant movement within senior staff after november because it's an exhausting job. but also, they are going to have to ramp up for the campaigns and decisions as to who goes where, chicago or washington, to run the re-election effort. secretary gates, i can't imagine how worn out he is especially while fighting two wars.

he hasn't given any indication he is leaving immediately but i think he will hand the keys over to someone else. >> our journalists, thank you both for joining us here on "newsmakers." thank you and have a good day. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> daniel webster used to use it. >> harry truman in 1939 when he said he hated this movie and at the time harry truman was seen as a senator from kansas city and i wonder if he didn't think at that point at least that the movie was looking at him and his relationship with the political machine back home. tonight on washington movies and his book "u.s. congress" tonight

on c-span. >> monday, secretary of state hillary clinton delivers a speech on the global health initiative a centerpiece on obama's foreign policy and expression of u.s. values and leadership in the world. secretary clinton will describe the global health initiatives core principles and calls on governments, organizations and individuals to join the united states in pursuing a sustainable approach for delivering essential health services to more people. live coverage on monday at 11 pisme 30 a.m. monday on c-span. >> new york democrat charles rangel said tuesday he is not resigning despite 13 charges of ethical wrongdoing. the former ways and means committee chairman told the house that he made mistakes, but that he is not corrupt.

congressman rangel made his comments from the house floor in between votes when most of the members were there. it's about a half hour. re re-- i retire or remove myself from this body and i've always tried to play by the rules and i cannot think of anybody that has encouraged me to speak here . and i want to thank all of you who are concerned about me for saying that, you know, a guy's a fool to represent himself as some of the people have said. but i have been losing a lot of sleep over these allegations and my family and community.

some of these rules that they have is that i'm restricted by confidentiality, but for years i have been saying no comment, no comment, no comment to a lot of serious allegations because i could not comment and i would refer them to the ethics committee. and when the ethics committee finally brought out their statement of alleged violations, it was a long list of things, and somehow the chairman of the subcommittee of investigation indicated that i had received a lot of offers to settle this thing so that it would not cause embarrassment to my democratic friends. and that i'd been offered a

reprimand. and a lot of people kind of felt that sounded like a wonderful opportunity to remove this so that i could leave the congress with some degree of dignity. why, even some people said that the president had suggested that his life might be made easier if there was no charlie rangel, so-called, scandal. but i interpreted it another way. i think when the president said that he wanted me to end my career in dignity, he didn't put a time limit on it, and i would think that his concern would be that if any member of the house of representatives has been accused of serious crimes or allegations that somehow within the process, even though -- there has to be some process in which the member has an opportunity to tell his constituents, his

family and his friends what he didn't believe. so when the chairman of the investigating committee said i have been offered a settlement reminded me of something that i will devote my retiring years the science and education, which is the major thrust of my attempt here, is that those of you that come anywhere near criminal court, we have a terrible thing that happens throughout these united states and that is that someone gets arrested for a very serious crime and they get their lawyer and the lawyer explains that i think it's better that you plead guilty to a lesser crime. he says, well, i'm not only not guilty but i don't even know what's involved here. they said, listen, we're not suggesting if you plea guilty if you're innocent, but i think you ought to know this judge if

you're found guilty is going to send you away for 20 years. on the other hand you have no offenses, you're a first offender, and if you could just forget about this thing and explain later what happens. so he continues to tell the -- his lawyer that, hey, i'm willing to admit what i've done wrong and i've done some things wrong but i shouldn't have to -- anyway, he says, listen, we would never tell you to quit or resign. we are telling you that it would be easier for us that this is not an issue. but knowing the president, as i do, i think he believes dignity means that everybody is entitled to be judged for allegations against them. we come back to this house because the speaker has called us here in order to make certain that we provide resources for governors and mayors to maintain our teachers and our firefighters, and

rangel's not on the schedule for anything which is ok because i know that the members of the committee, they work hard, it's a selfless job. god knows i wouldn't take it. i respect the time that they placed on this. and it's been almost two years, but i have a primary that takes place a couple days before they even thought about meeting. and then i found out from my lawyer that even when they meet on the 13th of september there is no trial date then. and so i don't want to embarrass anybody. as a matter of fact, those people that believe that their election is going to be dependent on me resigning, i like to encourage them to believe i think republicans have given you enough reason to get re-elected and they continue to do something. but quite frankly, i think -- a

lot of people don't know but when the -- well, i don't want to be critical of the ethics committee because my lawyer said you can't make them -- you can't get annoyed with them because there still may be room for a settlement. and i thought about it. and, well, when i found out that one of the republicans that will be sitting on what they call the adjudication committee had made remarks condemning me for my contributions to the city college that it was a rangel thing, an ego thing, and a corrupt thing, and he was going to judge me, i asked my lawyer. i said, how can they do that? he said, well, the ethics committee can do whatever they want. i said, well, do me a favor. i've paid close to $2 million. i continue to owe you money.

and you're telling me that you have no idea when there's going to be a hearing. and every time i talk with you, i said, do me a favor on friday, let's see what happens today in terms of reaching out to settle this thing because i can't afford to be represented by counsel. each and every day the expenses build up, and i think that i have an obligation to younger members of congress to be able to tell them, if you couldn't raise the $2 million, you're out of business no matter what the allegations are. because no one's going to read the defense. and, of course, just the allegations by themselves with -- by themselves would be out of business. i am here because i could afford lawyers for close to two

years, but everyone would know that there comes a limit. so i told them, just put everything on hold. see what happens when we meet here. and guess what? nothing happened. there's no agenda. so what they're saying is that, while the ethics committee will be leaving to -- for members to be able to work in their districts and to get re-elected and i'm having a primary that i have to wait until after my primary to find out when the ethics committee intends to have a hearing. and then that hearing comes just before, maybe, the general election. there must be something wrong with the rules because people would advise me that i could only hurt myself by coming before this committee. nobody has tried to protect the

integrity of the congress with two years -- almost two years of investigation to say the mistakes that rangel has made should be public and should have been public earlier than now. and i couldn't say anything because i didn't want to offend and don't want to offend the ethics committee, but the ethics committee won't even tell me when i'm going to have a hearing. and, hey, people concerned about me, i'm 80 years old, i don't want to die before the hearing. and i think my electorate are entitled to finding out who their congressman for 40 years is. who am i? am i corrupt? what did they offer me? and i want to be a role model for new members and tell them the mistakes i made so they don't make. and so there are a list of foundations that specialize in providing funds for education.

so i'm convinced that the president wants some dignity in knowing that not only my -- am i one of his strongest supporters, but i know that you know that unless we able to provide education for every child that's there, almost by any means possible, that our nation's national security is being threatened by foreigners. that our ability to be ahead of the curve in terms of trade, and nobody is more supportive of the president in trade, clear up some of the things in the korean bill so you don't hurt us, clean up a little corruption and violence in colombia and move on with the thing. so the whole idea is really me trying to have some dignity in making certain that america is stronger. now, the thing is that in the haste of sending out hundreds of letters, never asking for a penny but still suggesting we

should meet with these people because i knew that i would hope that they would convince them to provide money. now, a lot of people have done that. doesn't mean it's right. but the rules have changed. and so there has to be a penalty for grabbing the wrong stationary and not really doing the right thing. but it's not corrupt. it may be stupid or neglect but -- neglect but it's not corrupt. -- neglijent but it's not corrupt. the benefit is that you have a legacy with your name up there. well, we should go to my website to take a look at my answers. this is a broken down building that you have to run away from if someone's going to put your name on it. but it's still there. then they say that i would receive a luxurious offer. the sworn testimony was. they never told me.

who in the heck needs an office with 40 years of service in the congress in a broken down building? and then they said, hey, we just put it in there so we encourage people to put it in there. they said the name. they thought was not a benefit to me, but a benefit in order for them to get money. so i can't imagine why in the cause of all of these things that government personnel didn't buy stamps -- well, if you think of them as official and you're wrong, then i violated the benefits. then at the end of the day the inferences are very serious and mistakes can be made and they shouldn't have -- these things shouldn't have happened. but i can't walk away and have you guys doing your campaign because i'm annoyed and the action is out there calling me corrupt and no one is coming forward saying rangel is not

corrupt, rangel didn't make a nickel. no witness ever said there was preferential treatment given. and one guy that had an issue before the senate, staff, republicans, everybody said it never came before the house but they keep putting it down there. and guess what? it was the district attorney of new york for over 40 years that suggested that i meet with him because he was in the education fill an tropic business in addition to having business in the senate which republicans and democrats say never came to the ways and means committee. and staff certainly can prove it. i don't know how far they'd go in making a mistake, but you have to be very careful members making certain when they change the rules that you know what happens. and i'm prepared to say, i'm sorry for any embarrassment that has caused. another issue has to do with having an office, a

congressional office in the building that i live in. . people say that's taking advantage, rent control, stabilized apartment. nobody has said that the ethics committee never found for stabilized apartment. no one said i broke any laws. no one said that the apartment that they considered two had always been considered one at the least. no one said that 10 years ago there was an apartment, one bedroom apartment that i got from my family, political friends, i no longer have. but the concern was how do you explain the congressional office? let's read the lapped lord's testimony. he said he was 20% vacant. that he needed money. that he knew that the checks

were paid by the congressional committee. that the mail came in rangel for congress. and that the lawyers have told him and the officials of the city and state of new york that there was no violation of any law or rules. and what was the benefit? the benefit was that your colleague and friend was not sensitive to the fact that there was appearance as though i was being treated differently than anyone else. but the landlord said he didn't treat me any differently. no one said that they did treat me differently. but i have to admit that i wasn't sensitive to anything because i never felt then that i was treated any differently than anybody else. so that ends the apartment thing. but i plead guilty of not being sensitive. now when it comes to the

negligence of the disclosures and the tax issues, there's absolutely no excuse that's there. when accusations were made, i hired a forensic accountant and told them to check out what the heck is going on because i want to make certain that when i stand up and speak that it's true. well, after i found out it was far more serious than the accusations, i then referred it to the ethics committee. it wasn't as though someone tracked me down, the i.r.s. or the clerk of the house, i filed the correct papers. and the tax that is were paid -- taxes that were paid an accountant might say that had my accountant recognized that this 2,000 down payment for a

house in the dominican republic that was promised to be paid off in seven years would be a complete failure, and if indeed they did not give me one nickel but whenever they thought they were making a dollar or two they reduced the mortgage, then there's no question you don't have to be a tax expert to know that if you didn't report that income, that was -- notwithstanding the fact if you had done the right thing you had no liability bass the taxes that were paid -- because the tax that is were paid to the dominican republic would have been deducted and with depreciation i would have no liability. having said that, is that an excuse that's worthy? of course not. the fact that there was negligence on the part of the person that for 20 years did it and the fact that i signed it, does not really give an excuse as to why i should not apologize to this body for not paying the attention to it that i should have paid to it.

but there is no, not one scintilla bit of evidence that the negligence involved in the disclosures, that there was some way to hide from the public what i had. because the value of the property they would say was $25,000, 100,000, whatever it would be that it didn't make any sense that i was trying to disclose 2 -- it. why did i take the floor today? i haven't found one lawyer that said i should do it. i haven't found one friend that said i should do it. but i thought about it. if the lawyers are going to continue to charge me, and i don't even know when the hearing's going to be, and i can't tell them i want one and not six lawyers, i don't want

to offend the ethics committee. they are doing the best they can. but, hey, i'm in a position -- the speaker pro tempore: members and their staff will please take their conversations from the floor. the gentleman may resume. mr. rangel: that, hey, i'm 0 years old. all my life has been from the beginning public service. that's all i have ever done. been in the army, been a state legislator, been a federal prosecutor, 40 years here. and all i'm saying is that if it is the judgment of people here for whatever reason that i resign, then have the ethics committee expedite this. don't leave me swinging in the wind until november. if this is an emergency and i think it is, to help our local and state governments out, what about me? i don't want anyone to feel embarrassed, awkward. if i was you i may want me to go away, too.

i am not going away. i am here. and i do recognize that -- i'm not saying there's any partisanship in this because if i do all the people that have been accused of accusations, i'm in a close district, and i -- they were republicans, i would give a couple of moments of thought to see whether or not, especially if i didn't have anything to work with to get re-elected, i would say, hey, take a look at these republicans. they have been accused. but i don't really think that the unfairness of this is to me. i don't take it personally. i'm thinking about all of you. the president wants dignity. let's have dignity in this house where the ethics committee means something and that none of you, if the newspapers say anything, will have to wait two years before you can say, no comment.

even in addition to that -- and in addition to that, once they make the accusation, they have no business making any mistakes and saying that i didn't cooperate. i got papers with my signature on it. i got papers that said i tried my darnest. i got papers where my lawyer tells me had ever reason to believe that the full committee would sign on, that there was space for people to sign. i'm the only one -- i don't know what changed their minds about settling this case. but my lawyers -- my friends say don't go to the floor. and i say what are you going to do me? suppose i do get emotional? suppose i do think of my life

the beginning and end. are you going to expel me from this boddy? are you going to say while there is no evidence that i took a nickel, asked for a nickel that there's no sworn testimony, no conflict that i have to leave here? as much as i love you, democrats are thinking it would be easy, i'm the guy that was raising money, but that doesn't mean that i criticize you for saying, hey, that's crate then but i'm running for re-election now. do what you have to do. and republicans, hey, you don't have much to run on, but you know, but what the hell, if rangel is an embarrassment, based on newspaper articles, i can see why you would do it, but think, think. isn't this historically the first time that it appears as though partisanship is in the ethics committee? isn't historically the first

time that the recommendations of the subcommittee of investigation is turned down? and darn, who in the heck would want somebody who politically call you corrupt to be the ranking bipartisan guy to judge you? i don't expect answers today. and i know you're going home. i wish all of you -- but at the end of the day somebody, somebody has to do more than wish i go away. somebody has to tell me, when does rangel get a chance to talk to witnesss? i haven't talked with any member of the ethics committee. i haven't talked -- i mean in terms of settlement. my lawyers have. i haven't talked with any of the witnesses. and they had to expedite this case. in other words, i have a shorter time to prepare for reasons that they toll me challenge the ethics committee. they make this stuff up i think all along. so my lawyer, i can understand

how financially this thing can go on longer than i can afford. but she is willing to assist me in working out something in pro bono and i'll expect the leadership to help me. don't let this happen to you. don't walk away from here because it's convenient that i disappear. because not all of you will be able to withstand it as i have. if there's no issue of corruption, if everybody, including the leader over here, has to start off what a great american i am before he drops the bomb, well, i think that should count for . . they have made a decision. i want you to make a decision. i apologize to the leadership. i feel for those people, especially newcomers, that love

this place so much that like someone said, charlie, they all love you. and i aused, but they love themselves better. i understand that. but for god's sake, just don't believe that i don't have feelings, that i don't have pride. that i do want the dignity that the president had said. and the dignity is that even if you see fit to cause me not to be able to come back because you're not going to do it in my district, but if there's some recommendation that i be expelled, for me, for me that would be dignity. because it shows openly that the system isn't working for me. and i hope some of you might think if it doesn't work for me, that it may not work for you. so i know we are anxious to get

home. i know i can't get on the agenda. i know that sometimes -- some time, somewhere i would have a hearing. while you're saying i should resign, i do hope that you might think about what happens if the whole country starts thinking it's better that you resign and don't make anyone feel uncomfortable than to have the truth at least, a person an opportunity to say, you have made alleged violations. i am saying that you're wrong based on sworn testimony. and i want somebody, and i don't think it's going to be people who have been critical of me for doing the same thing, that's going to be the judge. i know outside doesn't count because we judge the conduct of our members.

erer recall if i can't get my dignity back here, then fire your best shot in getting rid of me through expulsion. now, i apologize for any embarrassment that i have caused. i'm prepared to admit and try to let young people know that you never get too big to recognize that these rules are for junior members as they are for senior members. and that you can't get so carried away with good intentions that you break the rules. the rules are there to make certain that we have some order, some discipline and respect for the rule. and i violated that. and i'm apologizing for it. and i don't think apologies mean this is a light matter. it's very serious. but corruption? no evidence, no suggestion that this was ever found.

and lastly, i close by saying that there is an organization that some of you know, certainly national truth in government, whatever, and the only thing i can say that some of my more important democrats on the list that sent out mail to listening money to get rid of me even before i became the chairman. and they have a website that i will be giving you because they got a lot of members, including bicaucus members on their list. what i do remember is send your money in now. we got rangel against the ropes and we got to get rid of him. much knows who they are. and they -- everyone knows who they are. they followed me on vacation. they followed me when i was doing business much the airport, outside where i live. it's kind of rough.

i'm sensitive to your feelings and the hard work by the ethics committee, but this has to stop sometime. . one year, two years, primaries, elections. and all i'm saying is i deserve and demand the right to be heard. and if i hurt anybody's feeling, believe me, it's the equity and the fairness and the justice that i'm asking for and not your feelings. we are entitled to our political feelings and what we want done, but we have to respect each other, and this institution which i love. i love my country. i love my congress, and there's nothing i wouldn't do to preserve this from going on. i love the disagreements. i love the debates. i love the arguments. but you're not going to tell me to resign to make you feel comfortable. so to awful those that helped me to help myself, let me

appreciate it. and for those that disagree, i'm sorry, but that's one thing you can't take away from me. i hope you have a pleasant time while you're away. maybe, just maybe, the members of the ethics committee might think about telling me when they think they might have a hearing so that whatever they decide i can let my constituents, my families, my friends know that i did the best i could as an american, as a patriot, and someone that loves this country. thank you for your attention.

>> this is about a hour and 15 minutes. >> well, good morning, everyone. >> good morning. >> you're not going to say good morning back? [laughter] >> well, i want to thank you all for being here today, especially on a friday during recess. the press and public have now had an opportunity to read the statement of alleged violation and have shown a lot of interest in the ethics matter that is now pending before the committee on standards of official conduct. i'm indeed eager to be able to have an opportunity to present my case. and that is why i have requested that standards committee schedule a hearing as unfortunately, the committee has

not yet specified a date for a hearing on this matter, and given the congress that no hearing will be held for months, even after the november elections. such a delay is unacceptable, considering that the investigation has dragged out for almost one year. it does not provide due process. it prevents my constituents and the american public from getting answers, and it delays me from being able to respond to the charges spelled out in the s.a.v. i'm pleased that committee released the s.a.v. and related documents earlier this week as i had insisted after i waived my right to having the s.a.v. remain private until the add jude ca story hearing. i've harned this press conference to present my fact in

the case and clear up ambiguities. i recognize the transparency that i'm providing may not -- to reiterate i'm in fact unshoes to share these facts with you and the public because i have not violated any house rules. i fully disclosed all of my financial information as requested by house rules, and in fact went above and beyond what was required by repeatedly disclosing my and my husband's financial interests during financial services committee hearings. neither my staff nor i engaged in any improper behavior, and we did not influence anyone, and we did not gain any benefit. we're here today because i believe my actions and the allegations against me are not easily understood. today i want to be absolutely clear about one thing, this case is not just about me.

this case is about access. it's about access for those who are not heard by the decisionmakers, whether it's having their questions answered or their concerns addressed. for the past 14 years, i've served in elective office, both at the state and national level, and i've made one of my top priorities opening doors and providing access for small, minority, and women-owned businesses. in fact, my advocacy and assistance in providing access for the national bankers' association is why we're here today. the national bankers' association consists of 103 minority banks. and i have worked with this association and their concerns for many years. i have spoken at their conventions on many occasions. i have participated in hearings

about their issues, and i have worked with our federal agencies on their behalf, including the treasury department, fdic, and fanny mae and freddy mac. my telephone call to then secretary of the treasury hank paulsen doing the -- during the worst economic crisis this nation has face provide access to the national bankers' association which was concerned about the fact that treasury had placed fanny mae and freddy mac into conservatorship. it was represented to me that many minority bankshood also leveraged their capital in fanny and freddie, and the association wished to know whether or not their members' capital was lost, or if the government was responsible for protecting the capital that they had invested in preferred stock.

they had attempted to get a meeting with the treasury department but had received no response. and so they sought me out to assist them in setting up a meeting. the question at this point should not be why i called secretary paulsen but why i had to. the question at this point should be why a trade association representing over 100 minority banks could not get a meeting at the height of the crisis. when i contacted the treasury secretary not i did not suggest any solution to the problem of the national bankers' association. i did not ask for any favors from the national bankers' association. i did not ask for a meeting for

any individual bank including one united bank. i did not suggest who would be participants in that meeting. i did not attend that meeting. and there was no such thing as the troubled assets relief program, known as tarp, at that time. there has been a great deal of confusion over a conversation i had with the financial services chairman, barney. the conversation i had with chairman frank was a conversation several weeks after this meeting had taken place, and after tarp program had been announced. one united bank was now raising questions about assistance from tarp because my office's assistants to the national bankers' association was strictly to provide access for a discussion about the impact of the financial crisis on small and minority banks broadly and

because there was no tarp program at the time of the meeting i did not wish to get involved with one united bank about any individual assistance or about this new tarp program. because my husband had once served on the board of one united bank, and still held investments there, i says tans from chairman frank, a representative from the state where the bank was head quartered and someone with a commitment to the health of minority banks. it's also important to note that no government agency or their representatives have ever said that i requested any special assistance or compensation for anyone or any institution, or that i influenced the tarp process in any way. there has also been a question about whether or not i instructed my staff not to get involved with one united bank

and their interests in assessing tarp funds. my staff had only been involved in understanding the impact of the financial crisis on small and minority banks broadly, and assisting in setting up the meeting with the treasury department for, again, again, the national bankers' association. i told my chief of staff that i had informed chairman frank about one united bank's interest, that we were only concerned about small and minority banks broadly, that chairman frank would evaluate one united's issue and make a how to proceed. and given the e-mails that committee has offered as their evidence, we communicated with each other clearly. so it's not just about us, it's about those who lack access. i was honored to serve on the conference committee of the wall

street reform and consumer protection act. i'm happy to say that much of the legislation i authored, access for women and minority rights, for shareholders a more accountable consumer, financial protection, bureau and assistance for struggling and unemployed homeowners were included in the final legislation that was signed by president obama. i'm particularly proud of the offices of minority and women inclusion that will be set up at the federal government's financial institutions such as the fdic, all of these agencies continuing with my work about access will now have these offices of minority and women inclusion. hear me clearly. because of the need for access and the work that i have done over many years, i have now opened up new opportunities by

creating the offices of minority and women assistance at the fdic, the treasury department, the federal reserve, among others, to deal with the historic lack of access that minority and women individuals and institutions have had in hiring, decision making, contracting and procurement opportunities. and over the past year, i and nine other congressional black caucuses members of the financial services committee have been meeting with the national bankers' association, the national newspaper publishers association, the national association of black-owned broadcasters, the national association of minority automobile dealers, the national association of securities professionals, and the national

bar association among others, discussing the plight of minority businesses, their lack of access to capital, and the lack of support from their government in banking, advertising and consulting contracts. access is key to understanding the scope of this case. this case is not just about them. this case is about fairness. in fact, the investigative subcommittee ignored or disregarded key pieces of exculpatory evidence crucial to my case, and that is extremely troubling. a truly robust investigate story process would have taken all the available evidence into consideration. i believe that if this had been done we would not be here today. fairness is also key to understanding the scope of this case. the case is not just about that. the case is also about my constituents and the american

people. i have truly been touched by the outpouring of support for my -- from my constituents in los angeles and from friend in places like louisiana, texas, missouri, new york, illinois, florida, and even from abroad. i know the way that american people view congress. they hear talk of partisanship, of power, of money, of influence. for congressional critics it's easy to see a report of an ethics case and completely wash your hands of it all. but my constituents and supporters have seen the many inaccurate accusatory portrayals of my work, and they know me better than that. and they have encouraged me to fight. i admit, there's some who do not believe in my philosophy or my method, but no one should question my devotion to public service. therefore, i'm asking us all to pause for a moment, set aside our cynicism, and consider two

things, the facts of the case and my life's work, in trying to provide access to those who have been denied. these two things will provide context for my constituents and your judgment. my constituents demand that i stand up for the values they elected me to represent. in some, no benefit, no improper action, no failure to disclose, no one influenced no, case. i thank you again for coming today. now i'm going to ask my chief of staff, mchale moore, who will present to you some of the key facts in the case and will also address some of our concerns with the the s.a.v. to come forward. after the presentation i will be happy to take your questions on the s.a.v. and answer them to the best of my ability. i will ask you to keep your questions to the s.a.v. and my experiences with the ethics

investigation and process. i will not be entertaining questions about the supposed issue of race in this matter or recent media reports that have nothing to do with my case pending before the committee on standards of official conduct. and let me just ask the camera guys on this side, you're distracting me. please. and when your lights go off, it bothers my eyes. so please do not stand over on this side and move back to the front row, please. please move back to the front row. i'd appreciate it very much. thank you very much. mchale moore.

>> hello. >> what we want to do is run through some of the basics of the case, share some information with you that you may not be aware of to this point that will give you some insight as to why we are at this point, why a sell thement has been reached, et cetera, why we think that congresswoman has a good case to hold before the add jude ca story subcommittee. the questions are whether the national bankers association or one united, whether or not there was a benefit, assistance, failure to instruct, and whether or not there's this thing called the creation of an appearance. so here we have the first letter that was sent by robert cooper,

chairman of the national bankers' association requesting the original meeting from hank paulsen. here we have e-mail from mr. michael grant who is the president of the national bankers' association on the morning of the meeting to bob cooper. one of the things that's been talked about a lot as if bob cooper was not acting in his capacity as chairman elect but he was acting only in his capacity as an uniunited executive. here we wanted to show there was communications between folks at the m.b.a. and mr. cooper on the morning of the meeting. here you see floyd weeks. that was the current chairman of the m.b.a. if you read this, i blocked it out because of e-mail addresses. but this is is the e-mail to the entire m.b.a. membership it. says "please see attached article today in "washington post" that maxine waters requested the treasury department was initiatedded by discussions with rep waters over the weekend by the association.

bob cooper, chair elect, in an intent to set the meeting with the treasury representing the membership and all minority banks and we will send an update of the outcome. and first let me say i will go through all of these documents are documents that were produced via the subpoena of the committee. they have these. they were able to view these, and this is part of their decisionmaking process after reviewing these documents. in the "washington post" on that morning it says a number of minority institutions are banks with a strong focus on community development according to rep waters who wants the government to help those banks raise replacement capital. at her request, treasury department officials agreed to meet with some bank executives today. so we have e-mails from the the members of the association, the chairman and the president to bob cooper on the morning of the meeting and the "washington post" story that says that the congresswoman was working on behalf of the m.b.a. here after a press report in

march of 2009 a press release' association which reads "the board determined that actions taken by mr. cooper were consistent with practices and authority granted him by the association." here was the letter that was sent by the national bankers' association shortly after the meeting reiterating the purpose for the meeting and the request for assistance to a broad set of banks in the association. so now we go to the question of this alleged benefit and the preservation of stock via $12 million in tarp. so what the s.a.v. says it reads "respondent's chief of staff provided continued assistance to one unitedded in their efforts to obtain legislation that ultimately resulted in one united receiving funding from treasury." so they say, i did something which directly resulted in a benefit to one united and therefore a benefit to

congresswoman waters. the preservation of the value of the respondent's husband's investment in one united would personally benefit the respondent. so the s.a.v. allegation that i facilitated tarp funding, it allegation that one united received tarp fund because of section 1036 of the eefa which barn any frank has already said that he drafted, and s.a. "preserved one united." so the first question that folks need to ask as they evaluate is a, what did they benefit under and b how does that process work. so what's clear is they benefited under the capital purchase program within tarp. so in order to do that, it's a multistep process. one united had to raise approximately $20 million in private capital. they had to get a tax deferment from the fdic for a treatment of their g.s.a. stock. they had to get an approval by their federal regulator which was the f.d.i.c. they had to get approval by the

treasury department. -- remember for context this was all in the context of the bush administration. and finally, it's clear that they did not benefit from section 1036. here is testimony from the director of resolutions at fdic. and here it reads, i'm speaking about one united. they were critically undercapitalized. they were trying to raise capital. and we wanted to make sure that corrective action took place that corrected some of the issues that the examiners identified. so -- had to come up with an agreement to state street bank to put 17 million i believe the institution and it needed a waiver of deferred tax assets. these were assets that could be considered capital. -- and then there is there was a lot of discussion about tarp money. so we had to put together a case for our board of directors because that's not a decision cane make on my own.

so we presented the case to the board of directors and we basically said and asked for, we recommend that they get deferred tax asset waiver. they asked for 48 months and we said 12 months. actually they asked for 24 and we said 12, and then state was going to put their money in. the money had to be in by october 30th because banks file their call report at the end of the quarter and have 30 days to file on their data. the question was asked, were you in favor of this action? she respond, yeah, it was my recommendation as a division director, and we do have a responsibility to promote and protect financial institutions, minority institutions in particular. but i'm also in favor of protecting depositors which is the total mission of the fdic. so they had some issues we had been in discussion with them with like compensation and other things that they brought to our attention, and i wanted them to stipulate to an order of cease and desist. so we worked through those issues. my primary concern as a fdic official is to make sure the bank is run safe and in sound manner, and there's a law that

we to protect minority institutions. and she's referring to section 3 of the -- >> what is her name, please? >> sand ra thompson. >> thank you. what is her title at fdic? >> she was director of resolution at that time. so to go further, so we've done fdic. now we go to the treasury department. what you have here is correspondence from brooklyn mcloughlin who at that time was the deputy assistant secretary for public affairs. this is the time when the news articles started coming out. they were trying to figure out how one united got money and how they had actually benefited from the recession -- so it read "the wall street journal was told by regulator and state regulator and barn any frank that one united qualified for the december investment under -- director of the capital purchase program at time responds"

[inaudible] they qualified for the december investment under the established terms which are used for all applicants. here you have correspondence with the treasury department that first dates back to -- it starts at top with the current administration where it shows an e-mail trail back to the previous administration. i'll show you why that's important. so in their response to questions they wanted to say, this happened in the previous administration, tarp funds are awarred under two conditions, the institution meets the qualifications defined in statute, bank regulators declare the bank vinyl, and tarp is -- viable, and tarp is insulated from outside influence. so if you come down here you notice this is an e-mail from neil kashtari responding to questions. so it said says did the meeting in december related to g.s.c.

losses play any role in decision by treasury to provide one united $12 million in c.c.p. funds on december 19th. fairly straightforward, fairly clear. neil kashtari says not at all, we didn't even know about it until anthony ryan who attended the meeting was not involved in the decision. >> excuse me. can you turn ok. we need you to hear. this if i need to start over just let me know. so let's go through the next question. did the meeting or the appeal by one united contribute to the fact that it was the first community development financial institution to receive c.c.p. funds and one of the only three in the country? kashtari responds again, not at all. we didn't even know about it, speaking of the meeting. and tony, anthony ryan, wasn't involved in the decision. next question, did requests by

anied to one united c.c.p. application accelerate its decision or play any part in the decision? kashtari responds not at all, to treasury. finally after we get past all the facts which clearly show there was no influence and nothing that was done by our office to -- the standards committee says something very important in the graves case. this what is they said about treating a member in their investments class. it says "moreover, representative graves' punitive interest was not an interest unique to him but was instead an interest that he held as part of a large class of investors. as such, even if mr. hearse' testimony benefited only the two companies in which ms. graves was invested, representative graves or ms. graves personal financial interest would have been as a class of investors and not as individuals." so very clear statement. and the question we've asked the investigative subcommittee time

and time again is how they treat the congresswoman's investment as an uniquely-held investment versus the way they treated the graves investment as a class. >> when did they decide that case? >> it was about six months ago. so in the midst of our investigation, this statement was made by this standards committee. so another question is around the congresswoman's "failure town construct and the timing of the conversation with chairman frank." what i'd first like to point out and as you read the full transcript you'll notice that investigative subcommittee never asked either myself or the congresswoman directly whether or not she instructed me to refrain. rep waters testified that conversation happened sometime after the tarp bill was floating around congress, which was on or around september 20th. myself testified that conversation happened in late september-early october. and i testified twice to being made aware of the conversation and being clear that chairman

frank would evaluate the suggested problem. why is this important? if you remember in reading the report they refer to the meeting happening in early september. in an attempt to try to place the meeting before the initial action by the congresswoman to set up the meeting for the m.b.a. in order to create this illusion of conflict of interest so here is testimony from the congresswoman in front of the investigative subcommittee. it reads "did he have discussions, speaking of chairman frank, about the legislation with you? no. at the point i understood they were interested in tarp i said to barney, that is your home. i can't look at it. when you say they are you referring to one united bank? yes. skip down a little bit. "i think that when you start to look at something like tarp which is brand-new that chairman has more experience in it, it was head quartered -- they had branches all over in the area but it was head quartered in his district. so because he was chairman,

because he knew more about tarp than i did, than we did, i just said to him, this is something that i can't be involved with. they asked, at any point did you consider your husband's ownership of stock in the bank in a reason to be not involved with one united? well, i think at the time we started talking about tarp and they were asking for money, i think that may have been one of my motivations to talking to barney frank, too, that i shouldn't be involved with that. why not? as you said several reasons. tarp was new, they were asking for money and i didn't know or understand the implications of that. it was at that point that i realized that they were asking for money that i perhaps should take distance from that, i would not be included in that. did you take distance from it, not be involved with it? i told barney, i can't deal with that. i'm not going to be involved with that. slide. and those statements are important for two reasons. one again the congresswoman clearly articulates that her conversation, several things, one, the recognition that tarp was a reality and it was a legislative asset that was on the table and she recognized that investment created a

conflict. next. this is testimony from me in front of the investigative subcommittee. the question is, at some point during the fall of 2008 did you become aware of a conversation that the congresswoman had with representative frank? i asked about what? and they say, one united bank. i think what happened after the meeting based on communication, et cetera, and the fact that we hadn't gotten results from a survey back, et cetera, that at that time no otherback have basically stepped up and said, look, we have an issue with the fanny, fredy piece. so i think the conversations that congresswoman had basically was we were approached by the m.b.a. about this but at this point it seems like one united has a problem. i don't want to be involved with that on this level. can you do it? and barney kind of said stay out of it, i'll take over or something like that. do you recall when that conversation took place between chairman frank and the congresswoman? yeah, it was in late september, early october. so all the testimony speaks to the fact that conversation with mr. frank is in late september and early october.

the committee nor the o.c.s. suggested any documentation or evidence that the conversation happened at any time other than that. and finally they asked, did the congresswoman eggs press concern? no. i mean, i think that she appeared to be very comfortable that whatever the issue was, if there was to be a resolution that barney would take a look at it and make a decision as a chairman whether or not it was something he wanted to get involved with. and i'm sorry that this is so small but this is basically a recount of the o.e.c. testimony which problem rates that same timeline. and it also speaks to the fact that congresswoman and i communicated about the fact that she had the conversation. and this is for timeline purposes, because the question is how do you place the timeline either the e-mail on september 19th where you said oh, you were in trouble. were why did you say that? so here we have correspondence from the national bankers association to all their members. as we spoke about before, we asked them to survey their

membership so we could understand what the depth of the problem was with minority banks. here's their correspondence on the 17th of september which said that they had found in the folks that they had surveyed they found no other banks that had the significant exposure to fanny and freddie. slide. so on september 19th you have an e-mail from me, o.e.u. is in trouble which is a recognition that universe is narrowed. -- as the survey went out as time went on it became clear that it was a more narrow issue. so here you have an e-mail from chairman frank's staff to another staffer on chairman frank's staff on monday, september 22nd, which says note that we have heard from one of our minority members this morning about this particular issue. come talk to me, et cetera. so moving on to the next question, this is a question of assistance, right? if you read the committee's motion to deny our motion to

dismiss, it says that sykes case which is a case in the late 60's "held their adoption of the s.a.v." so just for comparison sake we want to run through what the sykes cake looked like. congressman sykes worked for seven years to establish a bank charter on a naval base in his district. he wrote official correspondence on behalf of the bank to both federal and state regulators, he attended meeting with folks from the bank with federal and state regulators, he instructed staff directly to follow up with state and federal regulators. he then purchased 2500 shares of stock and sold those shares for a $10,000 profit, all without disclosing his holdings. so that's the case that subcommittee is using to compel the s.a.v. against the congresswoman. right now what i want to do is quickly run through what assistance was going on at that time and show that assistance was happening as mr. frank has already said through his office and compare that to the things that have been outreasoned in

the s.a.v. and been called assistance in our case. here you is a memo to chairman frank which is in response to a request to draft a letter to treasury about one united bank it. refers to the g.s.e. issue, et cetera. one other thing i need to point out is that it says one united bank discussed problems in detail with [inaudible] last week and told me that we're going to be monitoring the situation closely. they also say that one united also met with rep lynch's office but told me that they did not discuss the bank's problems in-depth with that office. what i want to point out there is that congresswoman waters' name is not mentioned. here you have the draft letter again which both mr. [inaudible] and mr. lynch had as italy agreed to sign on to which is a request by hank paulsen to take a look at again the national bankers association on treasury

to redeem g.s.e. stock. here you have another correspondence between staff on the full committee. and it's between staff and the full committee having conversation about their conversations with fdic. here you reader rick spiller with fdic indicated fdic does nod have the authority to implement m.b.a. proposal for what he knows treasury was looking underneath the sofa cushions to see if they have the authority through one of the programs, et cetera, et cetera, et cetera. so there's conversation going on about how to solve that problem. that conversation is going on between staffers of the full committee. further conversations between staffers on the full committee. even if regulatories are willing to be flexible on cap restoration plan still asking for reasonable plan on affected banks on how we reach capital which is in the best circumstances difficult for minority banks.

slide. >> this is from a know you folks are going under for a third time but i really need some guidance -- it's a huge project for our minority caucuses who have their major concerns not to accommodate it in the pending bill. we are talking here about the potential failure of minority institutions that treasury has a statutory to promote. >> the secretary indicated he was committed to being helpful. >> what's important about this. clearly there's conversations going on between committee staff and the treasury department but also the date, september 22nd. and context they're still talking about m.b.a. proposal, still talking about ways to solve the challenges faced by minority banks. slide. here i just talked to b.s. he said for me to step in the meeting with paulsen and hopefully we can get an exhibitment from them today. the 22nd of september.

slide. again on the 22nd of september, here's an update. it says "i have called a staffer to mr. frank. have i called over to treasury congressional staff a number of times and reached out directly to secretary paulsen's chief of staff but we have not been able to get a firm commitment from them about whether they will pursue the national bank association's proposal to redeem g.s.e. preferred stock held by minority institutions. again, and here's something that i just wanted to communicate again. here we are on september 23rd. this is michael grant who's the president of the national bankers association communicating with bob cooper, chairman elect, about language that they would like to see as the m.b.a. proposal in the context of tarp. more correspondence. more correspondence.

here you see cdfi redemptions text and language here actually reflection of language that was worked on by folks in the national bankers association. here on the 24th you see the m.b.a. proposal which is reflective of the previous language that we just showed. so it shows that there was a cooperative effort going on to figure out how to solve the challenges of minority depository institutions. slide and this piece just to show that at this time also on the 24th the independent community bankers association also began to get extremely engaininged in this issue, saying that up to 22% of their respondents hold g.s.e. preferred stock. here it's hard to read. but i just wanted to show that even if we talk about section 1036, a frank staffer testified to the fact that there were up to 40 institutions that were -- could possibly be of that size that could be impacted by

section 1036. that was the thinking at the time. so let's talk about what the assistance is that's been identified by the committee on my behalf. you have two e-mails sent to a frank staffer which say oh, you're in trouble. we already put that in context because on the 17th there was a blast that went out from the national bankers association showing the limited number of folks impacted by the trouble. then we have one sent e-mail to chairman elect of the n.b.a. which read call in the office. one sent e-mail to kevin covey a copy of a widely available tarp first draft. this is important around we'll get to that in a second because the committee reads that this is something that i or our office had drafted and sent to one united for their specific purposes. then you have two unsolicited e-mails from mr. covey with no response, four unsolicited e-mails from mr. cooper. so here's the e-mail that i'm talking about that was quoted by both the o.c.e. and standard

committee. it reads draft treasury draft p.d.f. again the committee read this as something that i've drafted and sent to mr. covey to solve one united's specific problem. but what it clearly shows is that this, if everybody remembers as the sky was falling in 2008, the treasury department came out with a three-page bill that requested about $750 billion to buy troubled assets. this was that bill. it wasn't something drafted by our office. it wasn't drafted on behalf of kevin covey or one united it. wasn't even drafted on behalf of the national bankers association. it was a widely available draft of a treasury department bill. and finally let me get to the question of appearance because there's a question that's been raised a lot. also in the graves case they said "the standards committee found that no relevant house rule or other standard of conduct prohibits the creation of an appearance of conflict of interest." the committee also in their s.a.v. or any other documents do not identify a house rule or other standard of conduct that

creates the appearance that a member is taking personal action for respondent's personal benefit. either you're doing it or now you're not. the ethics manual states that appearance of conflict of interest -- and those other circumstances where folks are negotiating for future employment. and finally, if you read the motion to deny our motion to dismiss, they site a case of a gentleman named represent b.i.a.g.i. the committee represents the reading of this case and to -- if you look at the site they only put in half the site but the porn part of the site is here. it says that committee beliefs that circumstances giving rise to representative bia gifts clearly establish that his efforts on behalf of coastal were received under circumstances which could be construed by reasonable persons as influencing his representational duties. this gentleman was convicted of federal bribery statutes. what they basically said was because he was convicted of

federal bribery statutes, that gives the appearance that what he was bribed for was an official action. so quickly, the charges clause 23-1, which is bringing discredit on the house and just for background, the types of things this has been used for in the past have been bribery statutes, sex with pages, things of that nature. the second is interestingly enough the spirit of 23, clause 3 which says you cannot let benefit accrue. now, the challenge is that on one side it says that you did something to create aarp benefit and the congresswoman benefitd from. that and the other side but they charge you with the spirit. so it's like charging you with attempting to do something and doing it at the same time. all of these charges depend on the receipt of a benefit and identifiable and actionable assistance. no benefit, no improper action, no failure to disclose, no one influenced, no case.

>> thank you very much. i know that this is a lot of information. and you have not had access to the inner workings. -- you have not had access to the inner workings for the ethics committee in the past. and you probably was not aware of all of the intricacies of these kinds of investigations. and so if someone who is accused simply goes into the back room and agrees to some violation, even if they have not been guilty of it, it would avoid all of the public press, it would be easy on the committee itself, it means that they would not have to go through an add jude ca

story hearing where they have to subpoena people and records. it would be easier and convenient for people and that's normally how it works. but we feel very strongly that we cannot do that, that we are proud of our work. our work has been consistent throughout the history of my career. we have committed no violations, and we've prepared not only to defend myself but to open up the discussion about the process. is this process a good one? how does the standards committee work, the ethics committee, that is? should it be changed? should it be made more fair? all of those questions i think must be dealt with, and we look forward to the opportunity to put some of these ideas forward legislatively. but beyond that, my reference to

the laws that i created in the wall street reform bill is something that i want you to focus on. some people said the creation of the offices of minority and women inclusions somehow got slipped into the bill. they did not get slipped into the bill. the "wall street journal" did a scathing attack on the fact that i had created these offices so that we could have fair processes for hiring and contracting. this is what i do. this is what i consider as part of my responsibility as a legislator, as a member of congress, and i want to continue to work on this process and help to open up the discussion about this process. all of those business persons in

the round table that we created this year, working with the other members of the congressional black caucuses on the financial services committee is about that. when you heard me talk about the minority automobile dealers, they got cut out of any assistance. the manufacturers were assisted. but we have lost 50% of all of the minority automobile dealers. when you hear me talk about nabob, national black broadcasters, they don't get any advertising from government, despite the fact government agencies do a lot of advertising. when you hear me talk about the national bankers association, the government puts its money into banks. why don't they put money into minority banks? when you hear me talk about the national securities professionals on wall street who happen to be people of color, why can't they get consultant

contracts? they're asset managers, they're investment bankers. what is it about this process that excludes folks who are taxpayers, who should be involved? the system has not adequately recognized that it is not open and available to everybody. i, as an african-american woman, must be aware of what i can do to open up this system to everybody. and really this is what it's all about. i'm pleased about the opportunities for this discussion. i would never have all of you all in the room if this had not taken place. not that i would have designed it this way. i would have loved for you to have covered the work that i do on the financial services committee constantly. i would love for you to be interested in these issues. i would love for your newspapers and your television stations to be interested in this kind of work. but normally it's not sexy

enough. it's not interesting enough. so i don't get heard. and others who do this kind of work don't get heard. but now we're in the middle of an investigation, and the discussion is on. and i welcome any questions that you may have. part of this ace timeline issue and part of it is an ethics committee issue here. basically did they come -- did the ethics committee come to you a few weeks ago and say, here, we have this case allegedly against you. we want you to take a certain penalty? and did they offer a specific penalty which we heard from mr. rangel that they had recommended a reprimand? did they spell out what the penalty was? and at that point then you said no, this is absolutely wrong, i need to lay out my case? are we to understand that -- >> no. let me just say. this you must realize that in doing what i'm doing, i am teetering on a border here. and you're getting into a part

of the discussion by the ethics committee that i can't go into any further. what i'm doing now is outside of the box, beyond what is normally done, but i think that when you get into that part of it i have to not go any further that discussion. >> let me follow up to some degree, though, that you had said earlier that there was a -- i don't know how to put this -- that there was. and you didn't say it in these exact words but there was sort of a take it or leave it sort of impression. >> yes. what i was basically was saying is i won't go behind closed doors. i won't cut a deal. i will continue to talk about the fact that i have not violated anything and that they must go to an adjudicatory hearing if they don't believe

me. >> did you or your office do anything to reach out or communicate with state street for their assistance to one united? >> no, we don't know who they are. we don't know who state street is. nobody in my office has ever spoken to state street. we have nothing to do with the capital that one united bank got from state street. and i even said at one point in time to investigators, why didn't you ask state street those questions? we had nothing to do with that. we know nothing about it. yes, ma'am. >> mr. rangel on tuesday said that he went on the house floor against the recommendation of his lawyers and against the recommendation of his friends. today do you speak against the recommendation of lawyers or friends of the leadership? >> i have nothing to do with that case. and as i identified in my opening statement, i gave all the reasons why i'm here, to give you my facts as i know them, as i understand them, and to make my case.

>> yes. >> but has the leadership encouraged you not to do this? have you spoken with them? >> no, have i not spoken with any leadership. >> a followup question. >> my question pertains to the office of congressional ethics which initiated the case against you. [inaudible] is the cochairman of that. and you had some confrontations with him in the 1990's over the c.i.a. drug trafficking allegations. is it proper for him to be cochair of the body investigating you with that kind of adversarial background? >> the o.c.e. is made up by members from both sides of the aisle, appointed by the leadership on both sides of the aisle. they determine who will sit on that committee. if i had thought about it early on, i may have challenged that. i just didn't think about it. porter goss and i are two people who really do disagree

philosophically. >> did the ethics committee give you any clue at all as to why they thought the meeting was in early september with barney frank? >> no. i think they just missed during their work in such a way that they would know or understand. that they made some assumptions and they just aren't true. and they just missed doing good investigate story work. >> [inaudible] >> i think they just assumed it. i don't know. >> can i ask you are covey and cooper in the first meeting with treasury asked for $50 million in the meeting which mchale attended, why did you get out of the issue then? do you feel that covey and one united that they used you? do you feel like they were setting you up? >> understand about the meeting. i was not in the meeting. i understand that the meeting opened up pretty much in the way i would have expected a meeting

to open up, in the way that it had described it was going to, why they were going to that meeting to plight of minority bankers who had invested their money in fanny and freddie because they felt they were safe places for them to invest their money and that somehow those investments were protected or secured by government. i understand some point in the meeting mr. covey started to talk about one united, and he raised the information or shared information that he had $50 million invested in fanny, and what did that mean? was he going to lose that money or was the government going to make it good. that's what i understand took place in the meeting. the treasury department, i understand, said to them, we have no authority to make good any lost investments in preferred stock in fanny or freddie. that's just not written into our

law. that meeting was over and done, they got no assistance. and it was over. after that meeting, sometimes two, three, maybe four weeks later, tarp came into being. and that's when we learned that mr. covey was now interested in tarp. separate and apart from the g.s.e. question that they had been in the treasury about. and it was at that point that we said, if this is about one united and tarp, first of all tarp is new, we don't know now advocating for itself. barney frank is your representative. your headquarters is in his district. he's the chairman of this committee, mr. barney frank. you talk to them. i'm out of it. them, i am out o. things have like unfolded in the way that they have because this is how government is.

we were at a point in time wre the economic crisis was ready for a spread the meltdown wa going . people take tions. things go on. i do not think that was set up or use. >> were there any red flags? was there a conflict of interest even at that point? >> trade associations have representatives. small trade associatis usually have representatives of one of their member companies whose big for them, particularly if they do not have a paid on going lobbyist of some sort. not only do these small

associations use the offices and personnel of various members, but this is how associations work. he was representing the national bankers association. that is to iran as the meeting for. -- that is to i arranged the meeting for. >> they focus a lot on the actions of your chief of staff. it seems to indicate an opinion that you were responsible. is he under investigation by the ethics committee? >> i don't know. >> why do you think not at the root of so much around his action? >> if you look at the e-mails that they were -- you would have to ask yourself, what did he do? what did he say? did he ask any agency of government for assistance? did he make a telephone call?

did he ask the congresswomen to ask him? at did he do? that is probably why there is no investigation. no one can say that he actually took any action. that is my thinking. >> this may not be the main issue, but do you think the ethics process should be changed? how would you change it? >> i am not opposed to the ethics process or any ethics process, but i think there has to be due process. somewhere in this process, you cannot file a claim after a certain date. i think that is designed so that members would not be accused or set up at the point of reelection. if that is the case, why do you have an oce that can release an investigative report ofindings

at any point in time as they have done in my case? once they have held it for a year, they say, they can release its. once they released it and it goes to the ethics committee, why is the ethics committee's responsibility in terms of the time frame? can they say, while, our allegations right before you go on break. i know you'll be out six weeks. no one will be around. we do not have enough staff to get through these a judicatory hearings. we know you will not get heard prior to the elections. those kinds of things in the process must be stricken. they must be identifi. the process must be one that can be negotiated fairly by anybody. >> is there anything that you would have done differently or anything that you did not do that you would do from that time.

period? >> no. we had a letter from the national bankers association. you had requests in person from the national bankers assoation. everybody who has been listed in this case said that. i stepped forward tuesday please meet with these people. when i called secretary paulson, i did not suggest what he should do. i did not say, meet with them and solve their prlems this way. i said, will you meet with them? he said, yes. i would probably do the same thing. >> the investigative reports found that of the 363 banks the received a bail out in the fourth quarter of 2008, one

united had the lowest ratio. 1.8. they also found that on october 27, 2008, the fdic issued a cease and desist order to one united. they were in violation of law did you pour oversight and some weak loan regulation. is this the type of a bank that american taxpayers should be bailing out? >> if the fdic has information about banks, thatakes them ineligible for being a bank o if they have some information that they should be investigated about that >> in addition, if they have information that they should have given to me, they should have done it.

i do not know these things. members do not know how things are operating. that is why we havregulatory agencies to determine whether or not they are proper, whether or not they're operating under law. if they are not, then shut them down. or, if they feel there is information they should caution me about because they are investigating or doingomething that i should know about, they should tell me. nothing stops them from doing that. >> is it not odd that the weakest bank received a bailout and is directly related to your husband? is that not odd? >> i wish i could make this clear to you. i have nothing to do with the regulatory agency and how it operates in making those kinds of decisions. we depend on our regulatory agencies to make decisions about whether or not these banks are acting properly. if they are not, they should shut them down. >> on the record, one thing you

should recognize is that that report was based on data from september 30th. it does not take into account the $20 million investment and tax treatment. at the time that they apply for the money, they were not a 1.8, they have a reasonable capital ratio. >> at one point, you talk to the sting ou >> i can give you the flavor of that as we have done. i do not want to pretend that i know exactly what i said. if you look at the testimony, what is interesting is that when the witnesses tried to go back and remember what they said, it comes out in all kinds of different ways. one witness thought that they

had done something bad they have not really done. i cannot give you the exact words i said. i can tell you we had the conversation. i do not know the dates. it was after the meeting with barney frank. >> i have a question about the meeting with barney frank. do you have any evidence that the warning from barney frank for your talk with barney frank took place in september. that seems critical to your time line. he says he does not remember. he told the committee that. he says he only remembers that it took place in september. that is incidental to parts of the case, but it is part of the case. >> the fact of the matter is, if you can recall, in all of this, what i said to barney frank and the point that i went to him west that -- was that t.a.r.p.

was not a reality. it had to be some weeks after t.a.r.p. became a discussion. that was one of the reasons i was talking to him. one united was seeking assistance in a different way. we are looking for other information to confirm that. we think there is information to confirm that. perhaps one of my staff can help me with that. yes? >> could you reiterate the status and size of your husband's investments in one united over that period and how it was impacted and where it stood through the process? >> i remember this. my husband's original investment was about $350,000.

i am told that once we started to look at this, his investment in the back had been reduced to about 179,000 because it was not worth as much at that point because, i guess, a dinette situation of the bank was not as much as it had been when he of originally invested in it. >> does he still owned those shares? >> yes, he does. no one wants to buy them. >> a question about the implications for democrats in the election. with your case, you are moving forward. you want a public hearing. congressman rangel is saying the same things. are you concerned about the effect for your party in november? >> there is a lot of speculation about what happens on either

side of the aisle prior to elections. people are speculating about who is going to win, how many seats are going to be lost. as far as i am concerned, most of it is speculation. each member must be concerned that they are representing their constituents, that they are doing the best job they can possibly do, and that they are not only producing the public policy that the american public expects us to produce, but that they are honoring all of the laws and they are living by the rule of law. that is all i can tell you. i am not about to try to get into what is a benefit or a lack of benefits for either party. i want to deal with the case. >> if i can follow up briefly on your point, you have been critical on the pace of the

ethics committee. if this goes to the election, which in -- when it be better for you to know tye -- yes or kn -- yes or no. >> is there is a hearing, it should be done. the facts to come out. a decision should be made. it is important for due process to take place. that is guaranteed under something called the constitution. yes? >> what do you feel is the most compelling piece of evidence for your taste in opec's -- a piece of evidence for your case? >> what you will find is this, no one in any regulatory agency, the fdic, the treasury -- know what had said that maxine

waters or her chief of staff called them or wrote to them or ask them to do anything. it is just the opposite. the head of these agencies have said no, we were not influenced by anybody. we have our criteria. we judge people by their criteria. using that criteria, one united bank qualified because they were adequately capitalized. i think that is compelling. if you would like to accuse me, what did i do? if you would like to accuse my chief of staff, what did he do? i think that is compelling. i believe that having looked at this case, this business of coming down to, we cannot find anything that you did. we cannot find anything that you and chief of staff did. you must not have instructed

them. that is my case. not good enough. >> can we go back to september? >> let's go to the back. >> the meeting with treasury officials. why weren't there any other member banks? >> i do not know. this question keeps being asked about why there wasn't other banks. i am tried to understand the question. when the trade association comes to washington, or when they send their representatives to washington, they do not usually bring all of their people with them. there is somebody who represents them. when i looked at the testimony from the fdic, that is basically what the lady said. she talks with trade

associations that represent hundreds of companies. this idea about why weren't there other minority banks is another kind of questions. i do not quite get it. >> can you talk about your concern about this money that was in the bank and how important was that $360,000 investment? >> i never had any concerns about my husband's investment in the bank. i would never take extraordinary steps. i had no concerns. >someone who has not spoken. >> y come here today and talk to the media and the public -- why come here and talk to the media

and the public? >> if you are going to write about the story, you need to know what you are writing about. some of you have been all over the place in what you know and what you do not know. i thought it was important for you to get as much information as you can possibly get so that you can have some basic information based on documents, based on an understanding. there are still people who do not know the difference between representing an association and representing one that it will bank. connors won watchers are arranged a meeting -- congress will man -- congresswoman waters or arranged a meeting for one united bank. i did not arrange a meeting for the bank.

they are saying i got members of back who are concerned and they are in town and they need a beating. -- they need a meeting. never was anything said about one united bank. i want you to know the difference. this business about maxine waters and her staff helping one united bank get money at that meeting. t.a.r.p. was not in existence. i want you to know that a conversation with barney frank took place weeks after when t.a.r.p. became a reality and the discussion became discussionone united and other banks -- one united and other

banks became a part of t.a.r.p. i want you to ask me that there is something in government that says government has a disability to give assistance to minority banks? when it appears that they are going to be bought off or merged, that they should be able to receive some type of assistance. i want you to know what the community development of a natural institutions, the small banks that are charged with the responsibility of getting money out to banks that do not have that access to that money. why is it that way of america, wells fargo, citi, chase manhattan can get on the telephone and get the treasurer

on the phone? why do they have such access? if it's not just minority banks. it is community banks also that do not have access. i really want you to ask these questions so that when you write a story, you can have some basis on which to write your stories. i think that is about it. >> that answer to why one united the representative of one -- was present at this meeting. you do not know the answer to that question? >> the outside counsel was there and the chairman elect was

there. thank you, guys. i think that is all we can do today. we have tried to be as transparent as we can possibly be an afford you the opportunity you would not normally get for this type of case. i will not be holding any interviews outside his room. this is it. >> i know you are saying this is how trade associations work and they do not get a bunch of their members to come to a meeting. even people who were wearing two hats, the questions and conversations seems to center around o.u. >> you cannot be fine appearance. >> i am not talking about in terms of the ethics committee and a parent.

the meeting surrounded this one bank. >> you forgot what i said. if you look at the witness testimony, they said back 60% of their conversation was about minority banks. one united entering into that conversation was after the conversations about minority banks. that is the information you will get if you read the documents. [unintelligible] >> tomorrow on "washington journal" lawrence yun has an

update on foreclosure rates. there will be a talk on house, senate, and gov. candidates. there will be a discussion on pending house bills that will legalize internet gambling. we will begin a week-long series on an end to regulations law. we will look at how government powers have been expanded. the series continues tuesday with a look at the impact on banks. on wednesday, we look at how it effects -- affects consumers. on thursday, we look at the changes for investors. on friday, we wrap up the series by looking at how to prevent a future financial crisis. "washington journal" live every

day on c-span. robert gates talked about a plan to cut back on senior officers and to eliminate agencies he views as unnecessary. he said the changes are necessary to ensure a stable pentagon budget in the future. this is about 50 minutes. >> it is important that we not repeat the mistakes of the past where tough economic times and the winding down of the military campaign lead to unwise reductions in defense. the current defense budget represents a minimum level of spending necessary to sustain a military at war and to protect our interests in a dangerous and unstable world.

we must be mindful of the difficult economic and fiscal situation facing our nation. the department of defense cannot expect america to approve budget increases each year unless we are doing a good job and everything possible to make every dollar counts. as a first step, last year we began reforming -- curtailing or canceling 20 troubled programs. additional program savings have been recommended in the budget we submit this year. it is clear to me that additional major changes are needed, consistent with the agenda laid out by the president. sustaining the current structure and making needed cuts will save it % to --2% to 3%.

the spending difference will need to be made up elsewhere in the department. i called on the pentagon to take a hard on how the staff was organized and operated. bureaucracies have swelled too cumbersome proportions. we have grown accustomed to operating with little consideration to costs. this has resulted in back increases in spending and staff. nearly 1000 employees are in the office of the secretary of defense alone. this expansion and its associated habits and attitudes

by a steady diet of supplementary -- supplemental appropriations. we will not reduce the department's top line budget. we want to reduce overhead costs and apply the savings to modernization. starting in june, we embarked on an approach to move america's defense institutions to a more cost-conscious way of doing business. we will fight over $100 billion in the overhead savings in the next five years. the services will be able to keep the savings they generate

for modernization programs. this exercise is well under way as the services are evaluating their progress and activities to identify what remains a critical period they are planning to limit get orders that are no longer needed and reduce the size of the staff they retain. i have also authorized each of the military department to consider consolidation or closure of excess bases and other facilities where appropriate. this is obviously a politically fraught process. congress has placed legal restraints on dod's ability to close bases. we are seeking ideas, suggestions, and proposals outside normal tissue channels, -- official channels.

we are launching an on-line contest to solicit quited idea to save money and use resources more effectively. i would encourage all dod employees to visit defense.gov. the undersecretary of defense has launched an initiative to improve efficiency in the contract irina. -- arena. we plan on providing more detail on this effort in early september. our intent is for this initiative to begin affecting ongoing programs immediately. i have included there are a number of areas where we can take action starting now and not wait for the normal budgetary

and program process. i am announcing an initial set of decisions in the defense enterprise. these initiatives very in size and level of savings and chief -- savings achieved. they represent an initial step in the savings campaign that will be incorporated fully into the budget request. i will summarize them briefly and take some of your questions. copies of this statement will be available at the end of the session. to the initiatives. in the last decade, this

department has seen a dramatic increase in advisory contractors of all kinds. 26% of the total dod work force in 2000, to 30% one year ago. in some cases, contractors may be performing functions that should be done by full-time government employees, including managing other contractors. we announced a plan to reduce the number of contractors by 33,000 by 2015. based on the day of billable, we are not satisfied with the progress to -- available, we are not satisfied with the process to reduce contractors. i have read -- i have directed that we reduce funding for contractors by 10% per year for

the next three years. we will no longer automatically replace contractors with full- time personnel. second is the issue of the growth in expense of the defense agency and the combatant command staff. there was no commensurate decrease for activities that have become less relevant and urging -- urgent. the department must not setting priorities and making real trade-off and separating appetite from real requirements. constraining the personnel available is one way to force this process to take place. i am directing a freeze on the number of defense agency and combat command positions in the fy 2011 for the next three

years. the number of full-time positions in these organizations will be created to replace contractors. some exceptions can be made in the critical areas. these measures are the first step in a comprehensive rebas elining. we will conduct a review to determine what our people should be doing, we're, and what level or rank in keeping with the priorities. i expect a result of this effort by november 15 of this year. the proliferation of new staff and more levels of bureaucracy is a natural consequence an increase in senior leadership. requiring senate confirmation.

the department has added to what was already a historically high baseline. the number of general officers has grown by more than 100, including many 4-star positions. the number of senior positions had increased by more than 300. this department has taken on new mission and responsibilities that have required some of these new senior military and civilian role. we have also seen an acceleration of brass creep, a situation where personnel of higher and higher rank are assigned duties that could be handled by people of lower rank.

in the post 9/11-era, more and more responsibilities are being exercised by junior officers. the defense department continues to maintain a top heavy iraqi that results -- a reflex 20th- century -- reflects 20th- century protocols. we need to create a system of more agile structures where we create a cascading downward and outward. there is also the question of allocation and whether a distribution of right reflexed a mission -- rank reflects the

missions that we are doing today. a single task force will assess the number and location of senior positions as well as the overhead that go with them. i expect a result of this effort by november 1. at a minimum, i expect to cut at least 50 general and flag positions over the next two years. these reductions would represent 50% of the total world -- total growth since the year 2000. there are benefits to be gained. the problem is that too many

parts of the department claim a separate infrastructure and process. all our basic its agencies have their own i.t. infrastructures. this approach results in large costs and a patchwork of capabilities that create vulnerabilities. that is why i am directing an effort to consolidate these assets to take good vantage of economies -- to take advantage of economies of scale. this action will allow the -- rtment to approve- improve our ability to deal with

cyber threat. ts. as of 2009, the department had nearly 1000 contractors working in some capacity producing reports or the congress, of which more than 200 were working full time. reports requested by the congress are beyond my control. starting now, we will freeze the overall number of dod overside reports. we will cut the number of advisory studies by 20%.

by october 1, we will conduct a comprehensive review of all overside reports and use the results to reduced the volume generated internally. we will engage the congress on ways to meet their needs while working together to reduce the number of reports. the department had set up commissions, 65 in the case of osd alone. many of the members are under way. these bodies still requires substantial support. i am moving for a review of all outside commissions to eliminate those no longer needed and focus on those that continue to be relevant and cut the overall funding available for studies on the remaining boards and

commissions by 25% in fy 2011. since september 11, a government has seen a proliferation of new intelligence organizations. this is due to the war on terrorism and partly due to the nascent -- the mass of intelligence requirements having to do with ipad -- i.t. two wars. . fight two ward. wars. we should not flinch when eliminating unnecessary redundancy and directing more resources to places where they are needed. i ams directing 0-- freezing the number of senior

executive positions in defense intelligence organizations. we must also in need this duplications in the department also intelligence committee. there is a review of the department's relationship with contracts to be completed by november 1. these steps will only apply to the department of defense intelligence organizations. the new director of national intelligence has indicated an interest in pursuing a coordinated effort using the same rules for the national intelligence organization. the last decade has also seen as significant groping -- growth in organizations. in addition to trimming structures, we will look at organizations that have outlived their original purpose.

nii was set up in 2003 to decide abbacy functions. -- advocacy functions. it has since become redundant, costly, and cumbersome. i have directed the elimination of nii and its adjacent organizations. most of their functions were transferred to ati. responsibility for daily operations will be assigned to the defense information agency. it was established in 2006 to

reform modernization of this department's business practices. bta, which employs 360 people, has shifted more of its focus to date today oversight, a function that can be performed by a number of other organizations. i have directed the elimination of the business transformation agency and shifted its response ability to the deputy chief management office. it was understood at the time back we had created -- the benefits were dipping --

propelled by a decade of operation experience, the u.s. military has replaced it. we must remain vigilant against backsliding on this front. generating joint forces and experimenting with that doctor and are all liable -- valuable tasks. i am recommending the closing of bif -- jifcom. the duties becoming to be the center will be a sign to other entities.

consolidating these three organizations, a substantial number of full-time employees will be -- will need to find other positions. millions of americans will be affected by this tough economic climate. this will likely mean hardship for displaced employees and their families. i have assigned the and the secretary to work with a employees in assisting them in what will be a difficult transition period have admiration for the service they have provided. the ultimate success of these initiatives and the other reforms under way will depend on a fundamental change in culture and aptitude across

defense institutions. the culture of in this monday -- money must be replaced by a culture of restraint. any initiative, large or small, should come with a cost estimate. that price tag will help us determine if what we are gaining is worth the cost. as i have set a number of times, the way to make sure something is done is to set short deadlines and to provide oversight from the top. i have appointed a task force chaired by my chief of staff. he will oversee implementation. taken together, these

initiatives represent an aggressive effort, not only to reduce costs, but to reform the culture of this department. the effort will not end with the budget next february. we need to add affordability. this is reflected in ways large and small. my expectation is that the efforts will lead to the kind of cultural changes that will be part of the department's dna. in closing, i want to reemphasize that this agenda is not about cutting the department plaza budget. it is about insuring that in

tough economic times, america's fighting forces -- let me just add that cds and is it is in contact, you need to step back -- seeing these initiatives in the context, you need to step back and see what has been going on in the last two years. there have been far reaching decisions on programs. in april of 2009. i am determined to change the way this department has done business for a long time. earlier decisions have been part

of a broad campaign that will be ongoing. i intend to continue to move aggressively to achieve the broad goals of making this department more he efficient. , and assuring we are putting our resources where they are most needed. >> you mentioned some big high- profile cost-saving efforts that you have tried over the last couple of years. given that several of those, -- uding the engine one what competence -- what confidence the you have that the virginia delegation is going to go along with this? >> first of all, in april of 2009, most people were deeply

skeptical that i would be successful in getting the congress to go along with a number of the program cancellations and changes that were made. yet we were successful. the position that i have made clear and to which the president has spoken on, is also clear. i am continent the bills will be the tell -- vetoed. i think you have to have some perspective here. just to take the example of the virginia delegation. if i am able to add $1 billion

or $2 billion to the record, virginia may come out with more jobs than it loses. this is the point that needs to be emphasized again and again. this is not about cutting the a defense budget. this is about a reallocation of finds. -- funds. the issues are not as clear-cut as people affected, as when you are talking about a big acquisition program. there are chances of being successful in these efforts. they are good. there are two things that makes this different -- -- that make this different. this is not a budget cutting exercise. the services get to keep the savings they identify and invest

in higher priority things. the things that have been cut had been called off. they have lost programs. here, they have the opportunity to add to the investments they are making for higher priorities. under the current economic circumstances and budgetary pressures, they will see this as an opportunity to protect our force modernization and our force structure. to the leadership of both of the authorizing committees and the appropriations committee. while i sketched this in broad terms, i talked about the

limitations. the people that i have talked to were supported. >> you were against otherwise cut in the defense budget, as in the drw-down in -- draw-down in iraq. are you afraid they will take more drastic action? >> if we are to make a compelling argument for sustaining the top line of the department of defense to the congress, we have to demonstrate a compelling argument that we have tackled the things that worry them -- poor acquisition practices, excessive reliance on

contractors. we need to be able to show we are doing something about these programs in a systematic way that affects every part of the department. under those circumstances, we have a pretty good opportunity to make our case. my greatest fear is that in economic cupped times, that people will see the defense budget as a place to solve the nation's deficit problems, to find money or other parts of the government. my responsibility to the president and to the congress is to present them with a program that i believe is necessary to defend this nation. as i look around the world and seek a more unstable world, countries that are investing heavily in their military, as i look at places like iran, north

korea, and around the world, as i looked at the new kinds of threats that are emerging, my greatest worry is that we will do to the defense budget what we have done four times before. that is/it in an effort to find some kind of dividend to put the money someplace else. that would be disastrous in the environment we see today and what we are likely to see in the years to come. if you were to look at the defense budget going back 50 years, it would look like the egk of a heart. it allows us to make investment

decisions and not have these type increases and decreases that make efficiency and doing acquisition in a sensible way almost impossible. my hope is that through all these efforts, we will make a persuasive case to the congress and to the american people that we are spending tax dollars wisely and the department -- in the department of defense in areas where they would like them to be spent, that is in the capability and in investments in the future. >> you say you are not happy with the results you got last year from the the the 3000 contractors. what makes you think that you will be any more successful with some of the changes you want to make between now and november 1? >> part of the problem was that as we were reducing contractors

, we were not seen the savings we hope from in-sourcing. the problem with contractors, what we have learned over the past years, you do not get at contractors by cutting people. you all the contract is a search amount of money. they go and hire the people they need to fulfil that contract. the way you get at the contractor base is to cut the dollars. if you add it up, are looking at cutting one-third of the services of contractors over the last -- over the next three years. that is the way to get a handle on this problem. >> in afghanistan, there are thousands of contractors. there are 2000 contractors training as get security forces

as opposed to 900. tuck about that as being a problem. which the allies not pulling their weight, and contact is not doing -- contact is doing jobs that used to be done by soldiers. >> you are mixing things. our partners have done a lot. if you had asked me what you're about it we would have nearly 50,000 partner it is in afghanistan by this summer, i would have thought that a really tall order. there are 760 trainers. we are continuing to work on that. personally, i thinks there are a lot of things the soldiers used to do. peel potatoes, do the dishes.

i think contractors ought to do that stuff. i have a highly trained infantryman, i do not want them doing that kind of stuff. in some respects, it is cheaper. i think the other aspect of it with respect to contractors in iraq and afghanistan is that i see that as a transitory issue. the number of contractors in iraq has already come down dramatically. at some point, we will see that happen in afghanistan. i am looking at a phenomenon that started a long time ago that has accelerated over the last 10 years. that is not a transitory. >> mr. secretary, you listed some of japan's --