many reasons. when the company purchased vermont yankee, an agreement was reached with the state that the state could be involved and would be involved as to whether or not a 40-year-old plant would be real licensed. >> that was the agreement, madam chair. that is unique in america. and the state legislature voted by a 236-4 vote to say no, we do not think it is in the best interests of the people of the state of vermont. they want vermont yankee shut down. vermont wants to mover in a new way in terms of energy. we are number one in the country in terms of energy efficiency. we are moving in a positive way in terms of sustainable energy. that is the direction the state

of vermont wants to go. the question is what is the role of the n.r.c. in that discussion? is it appropriate for the n.r.c. to get involved with one of the largest utility companies in the united states of america, entergy, a $14 billion a year coming, pays his c.e.o. $18 million a year. entergy wants to stay open. they want to make more money. i understand that. the people of vermont want to shut it down. i agree with that. why should you be involved in that in what disturbs me very much, and i want to purse this later, is my understanding is that yesterday by a 3-2 vote, this commission decided to urge the department of justice to get involved in that fight. now i don't care what your view is on what vermont yankee should or should not be doing, in my strong opinion, it is not

your business to get involved in that fight. you have to worry about the safety issues of nuclear power. it is not your business to tell the people of vermont that they have to keep open a nuclear power plant that they don't want. that is not your business. so i am going to purse during my question period, and i am going to ask each of you how you voted on that issue. i want to thank the chairman. he has said he does not believe it is the n.r.c.'s role to be involved in that debate this. is very disturbing to the people of the state of vermont. we have enough on our hands taking on than would of the largest utility companies in america. we do not want to take on the n.r.c. also. i yield back the rest of the team. >> three minutes. >> thank you, madam, chair.

i would like to note if anyone wants to answer why the hydrogen when it was vented exploded? obviously that didn't happen in japan with at least three hydrogen explosions. i wanted to note that i think it is very important that a lot of research be done on different models of nuclear reactors. systems that employ passive measures, the types of passive measures that would have made it irrelevant whether power had been knocked out to a plant or irrelevant to whether it was flooded with a tidal wave. i have a lot of doubts about nuclear power being able to be competitive by the time you take into account costs, addressing potential terror threats, natural disasters and human error. but i also think it is very

important to look at all options as we wrestle with ways to generate non-carbon power. so any comments in that vein would be helpful. thank you. >> thank you very much. senator lawsuitberg, we -- lautenberg, we haven't heard from you. >> thank you, madam chairman. i am flad they are here to present the preliminary results of its safe review. since the zast in -- disaster in japan happened in march, americans have asked with a good deal of trepidation could it happen here. this ongoing safety review is to give them the answer. we have to make sure that the final product is complete, comprehensive and thorough. we have got to make sure that

our country's nuclear facilities are safe and secure, and that means leaving no stone unturned. new jersey's four nuclear power reactors provide our state with have of its electricity. one of the reactors is the country's old els and shares the same design as the reactor in japan. we need to know what to do with the older reactors, and what we have to do to reduce risks and protect the public. we also need the n.r.c. to do a better job of making americans know what to go in the event of an emergency. i was troubled in march when our country was told that american citizens in japan should stay at least 50 miles away from the site of the

meltdown. we have had this discussion before. here in the united states, the n.r.c.'s guidelines only plans to evacuate people 10 miles from a plant. it is confusing, and we ought to not be sending mixed signals to the public. the stakes are too high. at the same time, we shouldn't lose sight of the fact that nuclear power has the qualities that we like to see. emissions-free energy source providing one fifth of our country's lengths. we have a pretty good nuclear safety record. there have been few nuclear accidents or injuries in the united states. it can be part of an energy future, but as the tragedies in other countries have taught us, nothing can be taken for depranted as far as nuclear power is concerned. japan, a leader in technology, it believed the fukushima plant was strong enough to withstand

the worst-case scenario. now we know it wasn't. chernobyl demonstrated the effects of a single nuclear accident that can linger for generations. we have to pay attention, learn from other mistakes, and the members of the nuclear regulatory commission has the responsibility to ask the hard question, but to make sure the american public gets the answers that we deserve. i've got to say that i think on balance, a great job has been done. but i think as we find these new circumstances that come up as a surprise, when in japan the zapped as it did, and regardless of the elements that created it, the fact of the matter is we shouldn't permit it to happen. madam chairman, i thank you for holding this hearing.

>> thank you, senator. >> now we go to our distinguished panel. chairman, five minutes. go ahead. >> thank you, chairman boxer, ranking member inhofe and other members of the committee. i appreciate the opportunity to appear before you to provide an update on the response of the n.r.c. to the nuclear emergency in japan. at the current time, the japanese utility and the japanese government are still in an active accident mitigation phase at the fukushima daiichi site. plant conditions are slowly destabilizing, and the reactors and spent fuel cells do not seem to be changing to create concerns. some things are gaining attention. the fuel pool is being shored up.

>> many challenges in their recovery activities include the high radiation fields in the building which make it challenging for the workers to operate. large amounts of radioactive water in the turbine basement and debris across the site. the rapey season is rotunda way and the challenges of cleaning up after the tsunami itself adds to the problems. but they are making significant progress in moving forward in what is a very difficult and challenging situation. on behalf of the commission, we continue to express our sympathies to the people of japan who are dealing with a

very significant crisis. as you know, the decision to recommend a 50-mile radius of u.s. citizens newer the fukushima site has been a topic of discussion. the concerns about the spent fuel pool were only one element of a dynamic situation in which information was scarce, sketchy and uncertain. the more reassuring assessments of the situation in the fuel pool is countered by core damage in units one, two and three. this decision was based on limited information and the best assessment of conditions as we understood them at the time. we are, however, continuing to re-evaluate and review the 50- mile recommendation. turning to the actions here in the united states, since the events of fukushima daiichi began to unfold in early march, the n.r.c. has been relaying information to our country's power plants. we issued instructions calling

for an immediate look at preparedness. they look at station black out as well as seismic and flooding issues. we issued a bulletin to provide information on a broad range of issues. once receiving this information, the agency will determine additional -- determine whether additional actions are necessary. we have also convened a senior level task force made up of a number of the agency's most experienced and expert staff. their review is proceeding on a short-term and longer term time frame. this task force is examining issues including seismic events, flooding and other natural hazards, how to maintain power during these types of events, how to mitigate potential losses of power and emergency preparedness. the time con strapets have of limited stake holder involvement, but in the

long-term we will involve other stakeholders more. in terms of accident prevention, we are evaluating the requirements and safety margins for seismic and other events that might inflict widespread damage to a plant. in addition to prevention, we are reexamining effective mitigation strategies for severe accidents. we are examining cross cutting considerations related to a plant's ability to mitigate a long-term station black out event. as part of our review, we are examining implications for emergency preparedness, especially in possible situations involving widespread infrastructure damage. >> i am sorry to interrupt you. we understand that you care about nuclear safety, but we really asked you to -- ask you to put down your signs. can you put them down and stay or leave with the signs.

it is up to you. whatever you wish to do is fine with us. thank you very much. oh, you are leaving. we are sorry to lose you. mr. chairman, you have 30 seconds more. >> thank you. as part of our review, the n.r.c. is examining implications for emergency preparedness, especially in situations involving widespread infrastructure damage, multi-used events and long-term station black out. the n.r.c. is committed to proceeding as openly and trance apparently as possible. they are going to hold three public meetings at the 30-day, 60-day and 90-day marks. we just had the 60-day meeting yesterday. the third meeting is scheduled for july 19th. this report will provide important recommendations and outline a strong vision for the longer term review. it will begin that longer term

component of our safety review, which we expect to be completed within an additional six months. members of the committee, this concludes my formal testimony. thank you for the opportunity to appear before you, and we would be pleased to answer any questions. >> madam chair, can i make a request? senator braso has been kind enough to take my five minutes. >> absolutely. we will miss you very much. remember going to move along now. each of you for three minutes each. our next commissioner is the honorable christine -- did i pronounce it ok? >> you did.

thank you everyone. thank you for the opportunity to appear before you today. the chairman has addressed the bred is it of the on going activities by the commission. the events at fukushima, japan is a sober reminder that nuclear technology is unique and requires a commit to safety. we must learn the lessons these tragic events present. we have initiated a review of the events. the n.r.c. staff continues its work on the many routine licensing, rule-making and inspect activities before the agency. the n.r.c. has been entrusted with missions of nuclear safety and security. i have found the n.r.c. to be an organization of dedicated safety professionals who are mindful of their important obligations to the nation. i strive as a member of the commission to enable them in

advancing this cause. thank you for this opportunity and i look forward to answering your questions. >> thank you. we move to the commissioner that i was happy to meet in california. he was visiting one of the plants when i was there. i think that was a good visit. it is an honor to welcome you back here. >> chairman, ranking member and members of the committee, good morning. i appreciate the opportunity to appear before you today. i will summarize my impressions of the fukushima events to date as follows. i have been a commissioner a little over a year now. during that time as well as during my 15 years as a member of the n.r.c.'s advisory committee on reactor safeguard, i had plenty of opportunities to interact with the n.r.c. staff at all levels.

i have always been impressed by their technical excellence and dedication to our mission of providing public health and safety. our team in japan confirmed what i already knew. i am told that both the u.s. ambassador in japan and the japanese government have great respect for our team and its advice on technical matters. i am proud of the staff and honored to be an n.r.c. commissioner. second, the value of conservative decision-making. the plants at fukushima were subjected to incredibly destructive natural forces exceeding the plant's design limits without report of acute health affects resulting from radiation exposure. in my view this reflects at least in part the conserve tism .

third, the importance of decision mf making during emergencies. the terrorist events of september 11 september 11, 2001 and the aftermath of the hurricane katrina brought focus to emergency preparedness in this country. fukushima defined the need for clear decision-making process. fourth, a lesson in humility. there have been numerous safety studies on reactors worldwide. i believe that as a community we were confident there would be no new surprises. fukushima has challenged that belief. we must retain a questioning attitude and ensure that confidence does not translate into complacency. thank you. >> thank you for those remarks. and we welcome the next

commissioner. >> thank you, chairman, and members. it is a pleasure to be here this morning to speak to you about these. the vital importance of responding appropriately weighs heavily on the minds of all who serve on the n.r.c. we continue to send our best wishes to the people of japan as they continue the hard work of rorg from the march 11 earthquake. n.r.c. is a learning organization. we have and will continue to learn from fukushima. that said, i recognize it will take months and possibly years before all the technical associated with fiduciary are fully assessed. while well learn munch what happened to the plant after the earthquake and tsunami, we know enough to look at the framework in the united states with a critical eye. from what we know now, i believe we will need to make changes in a variety of areas.

it is always our responsibility to take knowledge in new areas and put it in the framework. it is stepping up to its responsibility to preemptively identify safety issues in the aftermath of fukushima. we remain confident in the safety of all u.s. u.n.c. plants. there may be opportunities to improve safety. as our efforts proceed over the coming months, i believe a strong role for efforts outside the n.r.c. would be important. i believe we should engage them direct so that our review benefits from their insights. as smart and talented as the n.r.c. staff is, even they may not have all the answers. we will benefit from an open

process. once again, thank you for holding today's hearing. i look forward to working with this committee. >> thank you. >> thank you, madam chairman. thank you for the chance to be here today. i am supportive of the task force the commission chartered back in march. i committed to a systemic and methodical review of the events at fukushima. i know if we need to make changes, and i am sure there are changes that we need to make, that the commission will. the full commission received a public briefing yesterday in rockville on what the task force has learned so far in the near-term review. it informed the commission today including inspections of all 104 reactors and several key themes in the application of our defense and safety philosophy. they encollide protection of

equipment. mitigation strategies to prevent core damage or spent fuel damage. emergency preparedness. and lastly, how to apply our regulation ns a consistent and coherent manner. concurrent with our review efforts, resident inspectors have inspected licensing implementation of severe accident management guy lines around the country to ensure our licensies are able to deal with a loss of power or damage to their particular reactor sites. the findings from these insgs speckses will guide our decisions going forward with respect to regulatory change. in the long-term, we will focus on other key areas related to the fukushima incident. these include black out, spent fuel safety and emergency preparedness.

i'm looking forward to evaluating the n.r.c. staff's recommendation in areas where improvements can be made to our regulatory framework. congress and the public can be assured that our findings will be brought to light in an open and transparent fashion. i appreciate the committee's oversight role. i look forward to your questions. >> thank you very much. before i start my questions, i want to respond on yucca. it was important to note that we found out through a g.a.o. report, that republicans asked for, that they terminated -- the d.o.e. terminated the project because it was not a workable option and that there were benefits associated with this. that is a report that was requested by the republicans in the house.

some of the past problems we had with yucca, the risks that water will seep into the repository and cause the casks holing radioactive waves to rust, and there are earthquake faults in the vicinity. i know a lot about faults and dangerous radiation. ground water from yucca mountain flows into my state. there were tests that showed that water was leaks from the site. to me it was a closed matter, but since the subject was raised, i felt it was important to bring everybody up to date that a g.a.o. investigation said this was an appropriate decision. i have some questions here. i am going to focus on

fukushima and then move to california. i will try to cover all those bases. chairman, 34,000 children in japan have been issued personal radiation monitors. those children live within -- they live 40 miles from the plant itself, well outside the 12-mile exclusion zone. why do you think 34,000 kids were given radiation monitors? is your mic on? >> it is my understanding there has been a lot of discussion about the protective actions for children in japan, as well in general with all of the people living in japan. the japanese government continues to evaluate the actions that they have taken with regard to protecting all of their population. this is a very complicated situation. i think as the international

community begins to look more and more add what happens in japan, there is more effort to come up with more common guidelines for what protective actions are appropriate. >> wait a minute. this isn't about protective. this is about exposure. so i would just say since we want to learn from this, if your answer was because the japanese government have been bombarded by parents, i would say that is a better answer because that is my understanding. let's note that we can't have an accident like this, is my point. kids are going to school there. they live within 40 miles and the parent don't like this. i am going to ask this question. this is a hard one. help me with this. the japanese government has raised the legal limit for exposure since the plant was devastated -- since the plant

was devastated by the march 11th earthquake and tsunami, prior to the accident the dose was one milicevers per year, and now it is 20. were there any studies done that said that level is safe, and that is why they raised it? or did they raise it because they are concerned that the people were exposed to moron one? >> madam chair, i am personally not aware of there being any studies that informed that decision. but i do not have detailed knowledge of what the japanese government may have considered in that area. i do agree that is a significant change to radiation exposure levels. >> i would like to ask you to do more investigation on this. i don't want to see that happen, after an accident,

saying it is ok and then changing the limit. chairman, i will get back to you. on april 11th, pg and e asked them to delay the license removal application until they complete their 3-d seismic studies. i think that was a smart thing they did, and the right thing. according to press accounts, the n.r.c. is moving forward with safety and other things on diablo readying for a ruling on the request. is it usual, if they have asked for a delay, do you normally grant the delay, or is that something that is not going to be automatic unless you take a vote. how does that work? >> what they asked for specifically was that we delay a final decision. they did not actually ask us to delay the review. but what we have done is moved forward with the safety component of the review but

held open a piece of that review pending the analysis of the seismic studies. in addition, we have held off and won't finalize the final environmental impact statement until the final 3-d assessment is done. so we are effectively waiting for that 3-d assessment to be completed before we complete our actions on the review. >> let me just say from a very concerned senator, and i speak for my fellow senator and for the people in my state, if you are looking at a new proposal, and it came to you on an earthquake site. we have studies that show the faults are getting worse, not better, and the tsunamis are going to get worse, not better. i would assume you say take the plant somewhere else. i hope you understand. both of these plants have had enormous increase in population

since they were approved. one plant has 7.4 million people living within 50 miles. they are on earthquake faults, on the coast. you have identified issues. i think it is very important, when you look at this in a humble way, and i appreciate the tone of his remarks, i think we are all humbled by what happened. you look at this through the eyes of the people living there who are in a situation -- when i went there, one of the women, a p.r. person, pulled me aside. she said you asked what the evacuation plan is there. they don't really have any. she said sheer our evacuation plan. rush hour on the free throw way. that is not acceptable.

i am urging you, do not rush these. we also in california -- i don't know whether vermont is number one in energy efficiency, or california. we may be number one. but the bottom line in our state, we have a lot of sun. we have a lot of wind. we have a lot of geothermal, and there may be places for nuclear power that are not on earthquake faults or tsunami zones. so please put on the safety hats, and we will be working closely with you. i don't want to satisfy a rush to relicense the plants. it would not be fair to the people. senator, you have 10 minutes. >> thank you. i am glad to see we have the full commission here today. austin, thank you for being here. i congratulation you on your nomination by the president to serve again on the commission.

you have worked as a legal engineer, council, policy advisor, naval officer. you were a principal demute administrator. serving as staff director of the strategic force subcommittee and a commander in the navy. i would like to ask the chairman, having served with him on the commission, do you believe that the senate should confirm him as quickly as possible before his term expires? >> i would leave it up to the senate to decide that, but i certainly have had a good and productive working relationship with him and think he is a good and valuable member of the commission. >> thank you. i agree with senator boxer in our concerns about safety. i know you had spoken at a symposium in virginia, mr. chairman, where you said

employees of the n.r.c. and industry must feel empowered to ask the difficult questions. ensuring this happens is at the core of safety culture. we want safety for workers, for communities, for others, and you have to be able to request questions. do you agree? >> absolutely. >> i know you are aware the officer of inspector general issued a report on june 6, wide ld reported by the press. do you agree about the issue with the fairness? >> thank you. according to the report, and i have read it. the "new york times" did extensive reporting on it on june 11. to quote, it says he created a hostile work place atmosphere with frequent out bursts of temper, favoritism of travel

assignments and selective release of information to other members of the commission. i ask that the entire inspector general's report be made a part of the record. >> yes. >> those were not findings. those were comments of people interviewed. there is a distinction. >> continuing, i would say that with safety and a sense of a feeling of someone being able to speak out and feel intimidated or feel pressured to not speak out, whether it is a finding or a statement of someone who felt that way, they may be less likely to speak out. the inspector's report goes on and says over the course of the investigation, a number of interviewees conveyed their perception that the chairman controls and restricts the information available to his fellow commissioners and noted concerns about this interpersonal style.

it goes on and says several and former staff members said the chairman behavior caused an intimidating work environment. a former chairman told the i.g. that the chairman often yelled at people and his tactics had a negative effect. he described it as ruling by intimidation. >> who is making these statements? >> this is a report -- >> i know it is the i. depmplet, but it is not the i.d. >> an unnamed staffer? >> people that are members of the staff and a former chairman described the behavior as ruling by beckham dation. >> is the former chairman still active in the n.r.c.? >> the former chairman counseled this chairman on his behavior on two occasions before leaving the agency. it is page 43 of the report. i don't want to use any time in

part of the questioning, and i am happy to share this report. i am focusing on a culture of safety. i want to make sure we are getting that culture of safety. and if people feel intimidated, and they work there, and i worry about that. i worry about that in coal mines, industrial sites, railroads, the state of wyoming and from a nuclear power issue. >> i worry about the same things. i have worked very hard to ensure we have an open debate and dialogue at the commission. i am a very passionate and intense person. i hold people accountable for their actions at the agency. that is what i have done since i became chairman. i would note that all of the statements you read were not findings of the i.g.. they were statements that some

people made, and they couldn't corroborate them to the point they became an official finding. as the senator said, we can work. every day i come to the n.r.c., i work to do my job better. there are going to be difficult discussions that we will sometimes have at the agency. i feel very strongly that the staff -- i have not experienced staff being shy around me and being unwilling to tell me what they think. while sometimes i express my thoughts about what i think to them, i have been very comfortable we have an open relationship. >> do you agree that yucca mountain is a $15 billion hole to nowhere? >> that is not in any role or responsibility to comment on. >> you mentioned my colleague from delaware and his comments about the state of nevada perhaps making a decision to changed their mind on yucca mind. but it seems to me the home

county folks still did want yucca mountain to proceed and wanted those jobs and that opportunity. to get to senator inhofe's question, and if i run out of time, i would like the opportunity to smit the others. >> of course. >> this says shall be governed by general policies of the commission. the commission through its procedures sets forth procedures for the chairman to follow in exercising the emergency authority under section 3 of the reorganization plan. there have been some concerns because you have used your emergency authority. it says you should have it for a limited period of time, and it requires additional reporting to the other members. i would ask the other members who are sitting here if you could briefly tell me when did the chairman inform you that he ceased using his emergency

powers? >> i received no such norfolk. >> i did not either. >> i received no norfolk. >> i have not received any notification. >> the chairman is required to provide a complete and timely report to the commission on actions taken while exercising the authority. so you have not yet received a report if you vice president gotten notification. mr. chairman, when you testified back in april, you stated, "that most of the activities you have engaged in as part of this response have been in my normal supervisorry responsibilities. he asked for a full account of the actions you took outside of the authority. provide a full report detailing your actions during the

exercise of emergency authority? >> yes. >> in your testimony before the committee in may, you stated you were not required to make a formal d.c. ration of your decision to use emergency authority. i can read the whole plan, but in the interests of time, why did you choose to keep secret the fact that you were transferring to yourself functions vested in the commission? >> the commission was fully aware that i was exercising my emergency authority. i did not keep that secret. i did not make a formal decoration because that is not part of the process. the commission was briefed three times a kay by the staff -- or the staff was briefed three times a day about all the action being taken. they were being provided with situation reports at the outset of the incident produced at least three times a day.

i spoke with them at least once a day and generally as much as time allowed in the initial part of the incident. there was a tremendous amount of communication to my colleagues. they were fully aware of all decision taken by the agency and ultimately by me. >> i would like to ask each of the our forecommissioners, when did you first learn that the chairman had taken on emergency powers? >> i did not receive any decoration as the chairman has stated. he made no decoration. >> next? >> he asked when did you learn about it? >> my understanding is when the n.r.c. office informed the congressional committee. >> have you? >> no. >> next? >> echoes them, i first heard about it when the office of

congressional affairs notified us. >> i did have a discussion with the chairman on march 31st, and i understood at that point it appeared he was exercising emergency powers. final question. he sent you a letter outlining his concerns regarding your exercising of emergency authority and asked you for a legal analysis of transferring functions to yourself. he said you have not provided one yet. are we to conclude that you chose to exercise that without seeking legal counsel? and perhaps you want to -- >> no, there is no question in my authority. i have plenty of documentation from the general counsel to support that. >> i am going to place in the record a document backing up what the chairman has stated. there is no requirement for an emergency decoration at all,

and we will put the actual language into the record, because this kind of questioning is to me extraordinary, asking you if you did something that you don't have to do and having every commissioner saying no, he didn't do it. you didn't have to. it is mind-boggling around here. we are going to turn to the subcommittee commarme. >> i want to get back to what i thought this hearing was to focus on, and that is what have we learned? before i do, i just want to encourage all of you in the roles you are playing on the commission whether as a commissioner or chairman of the commission, one of the best leadership rules i ever learned in the navy and other places, including my own home, was follow the golden rule. treat other people the way we want to be treated. i would remind all of you.

that is how i try to live my life, sometimes i fail miserable, but that is what i try to do. the chaplain will be meeting in a couple of hours. those who need special guide ands, meet with him on thursdays. he remind us the golden rule is the cliff notes of the new testament and just about any scripture of the mainly religions of the world. having said that, let's talk about lessons we have learned so far since the tragedies at fukushima. i we will start with you commissioner. give us one example of a lesson we have learned that we have or have not begun to act on or follow up in this country? >> thank you for your question. i would say one area that has come up in the two meetings we have had so far has been the need to evaluate the adequacy

of our existing station black out rules which deal with the loss of a.c. power on-site and off site. i think the commission will receive from the task force perhaps some recommendations in this area. that is a con concrete example i provide to you. >> thank you. >> i would agree with the commissioner on the black out. >> that is good. for anybody, if you want to repeat something somebody else has said, i appreciate that. but give me another example. >> one that leaps out at many of us, after 9/11 we put together certain equipment to allow emergency cooling from auxillary diesel generators to drive pumps to cool reactors and cool spent fuel coils.

we require it to be very short distance from reactor buildings. if we had those things in place and experienced a fukushima-type event, that would have been wiped out along with a lot of other equipment. that was a revolution -- revelation to me and something we have to look at. >> thank you. i am fine. >> one thing that maybe i have learned is that i think at least we should go back and look again at the distinction between design basis events and beyond design basis events.

>> for beyond design basis events, we don't get involved that much. nature doesn't work that way. nature doesn't distinguish between design basis and beyond design basis events. we should look at what we are doing now with respect to beyond design basis events and get ideas from staff on how to strengthen our involvement. >> good. people call you every name under the sun. you always say yes, that is correct no matter what we say. you are gracious in that matter. >> i certainly agree that we should look at station black out and loss of off site power. i also agree that we need to

relook at the measures put in place after september 11 to deal with catastrophic events. i would add an area that is fruitful would be looking at our coordination between federal agencies and state and local governments should an event occur. it is difficult to have communication ns a crisis situation, and that is an area we can be exercising and improving. >> mr. chairman? >> certainly i think there are good comment frs my colleagues. the only thing i would add that hasn't touched on is the significance of spent fool pools -- fuel pools. we have had a singular focus in the advent of accident, but not on spent fuel pools, possibly how they could impact the ability to carry out response at the site. the other piece of that is our recognition is our traditional approach has been to assume a

single event at a single reactor. fukushima has shown us we have to consider multi-conditions at a single site. >> thank you. >> thank you. >> thank you, madam chair. and again, thanks for the hearing. i would say that our country is well served when you as a commission function collectively and collegiately. when you do, you can more effective harness the knowledge at your disposal. i have concerns that the commission may be fully utilizing their expertise on reactor safeguard. the advisory committee is mandated by law and structured by forum where experts can

provide independent advice that is factored into the commission's decision-making process. the advisory committee again represents a wealth of knowledge in reactor southeast and severe accident currencies. i am concerned there have so far been merely limited to reviewing currencies in reference to the fukushima accident. i guess my question is the n.r.c.'s direction for the fukushima task force list no role for the a.c.s. other than reviewing the staff's final report and the end of the longer term review. considering the a.c.s.'s expertise in nuclear safety, wouldn't the task force benefit from the insights throughout the fukushima review? >> well, the staff has briefed

the acrs once already. very early on in the incident they held a meeting and briefed them. the senior staff members will also be briefing the acrs next week. so there has been dialogue and interaction between the acrs. but the commission did provide a role for the acrs in the longer term review. in the short time we asked the task force to work, we wanted them to focus on their best thinking in reaching out to the people they thought would be most helpful. in my discussions with the acrs, i encouraged them to make themselves available to the task force. they preferred for them to meet singularly as a body. that is unfortunate because i think they have tremendous expertise that could be made available to the task force. but their interest is not to do that in a way that would be convenient for the task force.

>> would the rest of you all like to comment in that regard? do you feel like increased use of the acrs would be beneficial? >> as the chairman noted, the commission did explicitly instruct that one tasking. but the acrs chairman can direct things to look at. >> i am a former chairman of the acrs, and i can assure you that there is no doubt in my mind that well hear from them, and they will give us their frank opinion. there is nothing to stop them from writing letters any time they want. >> and you agree that is helpful? >> yes, absolutely. >> yes, senator, i am fully supportive of full

participation by the acrs, particularly in a long-term review. >> all right. >> i agree. and i agree that the acrs role in longer term review as far as task force tasking is appropriate. but as the commissioner says, to the extent they have other ideas as to what might be helpful, i welcome those. >> very good. i believe that chairman isa sent a letter regarding this. are you familiar with that, mr. chairman? >> yes, i am. >> i think you asked for a response by june 9th. have you seen a response yet? >> i don't believe i have. >> do you have any idea when that will be done? >> i assume in the next couple of weeks. >> again, i am interested also. would you share the response with the committee? >> i would be happy to do it. >> thank you. appreciate you all being here. i yield back. >> senator sanders.

>> thank you, madam chair. i believe it was commissioner -- a commissioner in one of them in his opening remarks that the commission can benefit from an open process. i agree with that. let me ask the chairman. mr. chairman, your things, as i understand it, has been that the n.r.c. should not be involved in preemption issues, in the legal fight going on between the state of vermont and the entergy corporation. >> as i have looked at the issues, i don't see an immediate issue here for that. i don't want to get into the specifics of the legal question in front of the commission to protect those frank legal discussions from our staff.

as i have said publicly, the states have a role here. the federal government has a role. i think we have taken our action with our license extension, and the state has permanent action. those things are necessary in order for license. >> say it again. at this moment you do not believe that n.r.c. should get involved in the legal dispute between the entergy corporation and the state of vermont? am i hearing say that the n.r.c. should not be involved? >> i don't want to comment on the matter before the commission because that is a primplinged discussion, but i have seen nothing to say there is a preemption issue here. >> ok. getting back to the commissioner's statement, which i strongly agree with, that the n.r.c. benefits, and we all benefit from the open process. my understanding is that there was a vote yet at the n.r.c. on

the issue in fact of whether or not the n.r.c. should be involved in this case. can you tell me what the vote was, mr. commissioner? >> well, the matter in front of the commission was in one of our legal discussions, and we generally like to keep those closed matters because it preserves the opportunity for our legal counsel to give us recommendations. >> you may like it, but i am going to pick up on the commissioner's point about an open process. your job is to represent the best interests of the people of the united states of america on very difficult issues. my understanding is that there was a vote yesterday on whether or not the n.r.c. should recommend to the department of justice as to whether or not they should intervene on behalf of entergy. can you tell me if i am right and what the vote was on that?

>> as i said, at this point the commission has released those documents. i certainly would be in favor of providing them to you with the understanding until we were to agree to release them publicly. >> well, i don't want them if they can't be released publicly. i would like them released publicly, and i would like a member of the commission now -- commissioner, you believe in an open process. would you tell us how you voted yesterday? >> i can only echo what the chairman said. it is a privileged discussion and something we have had with the department of justice. we have been specifically asked not to comment on it by the department of justice. >> i am asking you to comment on it? >> i am afraid i can't do that, senator. >> let me ask the commissioner. will you tell me how you voted

yesterday? ? >> based on inquiries from your office regarding this ongoing litigation, i asked my counsel to inquire, receive advice and confer with the justice department. the justice department asked that i emphasize two things in my response. first of all, the justice department has the litigating authority and is the sole decision making for the federal government in this matter -- >> but you can and apparently did make a recommendation to the d.o.j., is that correct? >> there are interagency -- the litigation posture of the united states is under active deliberation by the justice department, and they have asked in our testimony today we not comment any further. >> madam chair, i won't waste time by asking all the commissions. i find that a disturbing answer. let me ask the chairman if he

could tell me what did the non-partisan general counsel's office recommend to the commission about this matter? >> again, in order to preserve the integrity of their advice, i would rather not comment. i would just say personally i do think historically it has been very rare for the agency to get involved in preemption issues. it is a very high threshold for us to get involved, and it should be. >> i am running out of time now. let me ask the chairman. has entergy or its representatives, or the nuclear industry as a whole come in to meet or requested to meet with the commission or the n.r.c. staff about this litigation? mr. chairman? >> there were meetings between entergy officials and staff of the agency. they requested meetings with

commissioners under guidance from the department of justice. i can only speak for myself in that regarding. i did not take the meeting. >> you did not meet with them, but staff did? >> i believe they had a meeting with some of our staff, correct. >> have representatives from the state of vermont met with your staff? have they been invited to meet with your staff? >> i am not aware of that. >> madam chair, my time has expired.

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that's not to say that is the one that gets eventually adopted. there are reasons to calibrate. you got to choose the number somewhere. that's what's going on now in the international process and domesticically what will go on when the federal reserve does its rule making. you'll have to take it that costs for the firms and investments for the firms and we have cost analysis and we have used the pools we have available to us. it is important not to lose sight of not acting here. >> i understand there is cost of not acting but if you -- if comptroller walsh is as concerned as i am and i know chairman bair takes a different approach but under basel 3,

advanced approach to risk management, other countries will be using this approach to sort of refine their approach and it takes that off the table for us. i would ask under secretary brainard, are you concerned about that? >> as you probably know, my concerns about the implementation of basel 3 predated by work and that was a lot of the work i was doing before i got to the fed. sure i'm concerned. one would think if you put a capital regime into place in the middle of the biggest recession since the 1930's that capital retirements ought to go up and they didn't. >> secretary? >> well, i think it is very important as we're looking at this surcharge because these

institutions are competing internationally that that is really critical, whatever is agreed is comparable across countries and mandatory in every jurisdiction. that's why we have put such an emphasis on common equity. the strongest capital we would like to see in international agreement that has common equity and where it gives very little discorrection to supervisors. risk-rated assets and how they are assessed. i think our institutions are concerned. we share those concerns. we are trying put in place monitoring mechanisms for the first time so that we will be able to have some visibility. basel 3 will be helpful. it is another way of trying to

create a floor. >> i think we're all concerned about rules that are on the book. >> the approaches have not worked. they allowed european banks to reduce their capital levels and then as the recession hit when you expect the capital levels to go up, default is going up, capital kept going down. capital is still going down as the recent barclays report which we would be happy to share with you. all the effort of the committee is to try to put more objective con strapets on the ability of these individual banks to set their own capital standards. the u.s. is very strongly pushing that. that is the direction to go.

given tremendous flaws, i would just get rid of it. it is harmful. it is not helpful. i think we can improve the standard. one way to do that is to get rid of the advanced approach altogether. >> thank you. >> i want to join you in saying goodbye to sheila bair. my working relationship with chairman bair has been a beneficial one to me. she will be miss even by people who don't know that now but i think that her tenure will stand out as an extraordinary example of the right kind of public service. i do -- i'm not sure i'll be able to give back -- i like to give credit where credit is due to.

mr. zube -- mr. zubrow. on page three, he as a quick -- recent initiative designed to reduce risks taken by u.s. financial firms. margins reporting in supervision derivatives. risk reintelligence. here is what he says. as a result of these post financial crisis changes, lehman brothers would have been subject same as jpmorgan chase including capital tramplings. a.i.g. would -- tranched. a.i.g. would have been subjected to federal supervision. countrywide would have been subject to the same as national banks.

these are important changes. i appreciate this acknowledgment. both of all things in this bill and as he notes would have lessened the likelihood of those institutions that were major failures and apply some of the restrictions. all the restrictions in the bank system to the regulators. this is where the shadow bank system came in. he also on page 5 talks about what we did in terms of resolution in large institutions which i believe should be called disillusion. the united states -- most countries have no plan to order the resolution. some said their banks should be

bailed out should a crisis occur. it is very clear from the context, this is not a case where he is complaining that america is different from the rest of the world, it is a case where he is boasting. page six, he has a heading further insulation for taxpayers. he said aside from increasing the risk, dodd frank -- on taxpayers. so mr. zubrow, i thank you for that. and we have some differences but i think we ought to be clear where they are. it goes on more on too big to fail. i notice that one of the contributory factors you said could be considered, would be an increase in the capital charge to offsets the per

received advantage of being too big to fail. i differ with that because i do not think we ought to be reinforcing it rather than charge people for what i believe is an increasingly inaccurate perception. when moody's finally gets it has got to be clear cut. it is an increasing recognition that is not the case. we don't want to charge banks excessively. i would hope you would reconsider that. rather than charge the banks for inaccurate perception, let's dissolve the inaccurate perception and that will drop out. margin requirements my new york colleagues have noted when the nonu.s. subsidiary of a u.s. bank is dealing with a nonu.s. entity -- non-u.s. entity, do

you under the statute have the authority to take that into account and can you and your fellow commissioners adjust. so in those particular cases where they would be an international setting, make it go away. >> we're working along with the regulators. they actually have authority for dodd frank. we just the nonbanks but we are with the s.e.c. initiating dialogues. >> i think we have the existing authority. it has to be based upon rational reasons and the -- >> i understand. i assuming rationality, but you do have some -- given those specific situations that we're talking about? >> along with other regulators who actually have the authority.

>> let me then ask you -- do any of the -- do the regulators who have that authority concur in those specific situations that the authority would be there to take that into account? >> generally, i think that is true, mr. chairman . >> ms. bair? >> yes, we have the authority. >> mr. walsh? and you agree also? waving doesn't make it into the record. >> i didn't know you wanted to hear but yes, absolutely. >> that i wanted to hear. >> thank you, was morgan stanley a testimony inside a valentine card? >> yes, but there was no candy with it so i didn't have to report it to the ethics commission. >> certainly there is wide agreement that capital and liquidity standards were most

inadequate going into the financial panic of 2008 and clearly there is a convergence of opinion they must be raised but i think the question particularly in this hearing that has to be addressed is what is the cumulative impact of raising those capital standards? what will be the impact of the extra capital standards to be assessed against the institutions juxtaposed the 2,000-plus pagors dodd frank? i am uncertain we know the answer to that question but many testify that we must have stability in our capital markets. i agree stability is a good thing but we have had stability in our employment markets for almost 2 1/2 years. unemployment has stabilized at roughly 9%.

so stability, as a macroeconomic virtue may be woman is what overrated. clearly i think we have to look at the balance again and what will be the impact on this extra stability on our job creation. secretary brainard, you confused me with one part of your testimony. i thought i heard you say that it was critical that the united states be the first mover in regulatory reform but at the same time i believe i heard you and almost every other panelist talk about their fears of essentially a race to the bottom and what we know as regulatory arbitrage, so i'm having a little trouble understanding why it is critical to move first and why should we not move concurrently. i can't recognize the two.

>> first of all, on the capital standards there was a great deal of consideration in the development of the basel 3 standards to the macroeconomic impact of those capital standards. our regulators did a lot of impact here on the u.s. it was also done internationally and there was broad agreement. i've seen the analysis that the transition timelines, which are quite generous, it gives our institutions plenty of time to earn their way without having any adverse impact. i think we are choosing between stability and growth and i think the real point here is that we will have much healthier growth if in fact we put in place a safe and sound financial system. >> let me interrupt you here if i could.

chairman bernanke i guess about 10 days ago spoke to the international monetary policy demomps atlanta. when asked about the impact of basel 3, he said "has anybody done a comprehensive analysis of the impact on credit? i can't prepped anybody really has. you know, it is just too complicated." . i think -- >> there has been quite a bit of analysis of that. secondly with regard to moving first, it really, i think we have a choice and we have chosen as a nation to put in place very strong standards and then to work internationally to get other countries to -- on those standards.

>> what assures the convergence of these standards? what insurance is there going to be this uniformity of compliance? what is the mechanism? >> so what we have done is first of all, we have gotten agreement in the g-20 and the basel committee around the same standards, the same set of reforms, the same principles in all of the three areas that were under discussion today. secondly there are implementation deadlines for most of those areas. and third there is a process put in place that permits supervisors to have -- to hold them to account for those deadlines. >> europe is not going to be

under american supervision and they seem to be on a different timeline. i'm out of time. >> thank you. >> thank you very much, mr. chairman . i would like to engage the honorable sheila bair. considerable amount of fraud has proliferated in the industry in the years following financial crisis. to be honest, i think the response of regulators could have been much quicker and stronger. for example, i was dissatisfied with the review released by regulators in april and since you have been leading the charge for sustainable loan modifications, i think the fdic was likewise disappointed. let me read their press release. the interagency review was limited to the management and

foreclosure practices and procedures and was not by its nature a review of the loan modification or other loss of these services. a thorough regulatory review is needed to ensure processes are sufficiently robust. to ensure services have identified the extent to which individual homeowners have been harmed. it seems you believe that another regulatory review is needed. is that what we need to deal with this terrible -- >> well, i just wanted to make sure what the scope of the review was. right now, pursuant to consent orders that are being discussed, there needs to be a look back. they need to do a thorough review of servicing -- and

identify harm -- attack the complaint process and we're in discussions with our federal regulators on that now and i would defer to commissioner walsh who is the lead regulator and what is been playing a key role in this. i think it is important for the public to explain which was a and what is not covered. so it is one set of standards for both the reforms to make sure we don't have these errors going forward as well as to look back and make sure they receive appropriate redress. >> so this recommendation about -- outside consultants to investigate them is of concern to, i suppose, many of us.

do you believe that outside consultants can do the job that needed to be done instead of a regulatory review? >> well, i do think that there needs to be a robust elevation process. we would like to see an agency team reviewing sizable samples of the reviews the consultants are doing to validate their work. i think an extra set of eyes would be helpful. >> mr. walsh, you testified in march that only a small number of foreclosures took place and do you still think that and if the review was limited, how would we know that? r well, i think the key will be the look back that chairman bair was referring to. the sampling that was done the

those exams was to determine whether it was sufficient grounds to determine whether the servicers had failed in significant ways. and that mediation plans were needed. the result of that sampling was to determine whether that was indeed the case. we have enforcement orders in place that will require follow-up and implementation plans. the process that chairman bair referred to and that we are working on an interagency basis and that will establish the wider scope of problems if there are more substantial problems. the remps was only made to the sample -- reference was only made to the sample. >> in that revie, how could it be determined that the -- if the foreclosure was improper,

how services apply, to look to see that these services were proper. none of that would put that in the review. is that right? >> fees and other things were -- but the text will be to look at those things in the context of this lookback review where you'll drill down deeper. >> thank you, mr. chairman . i wanted to ask chairman before air and mr. trullo a point here. it goes to the president of the kansas city feds, commentary on this very thing you struggling with. that is that he says the funding advantage. s to over $250 billion for the

20 largest banks in 2009. at the twral reserve bank of kansas city, he said we -- the five u.s. banking organizations during the crisis and in 2009 these organizations had senior long-term bank debt that was rated four notches higher on average than it would have been just the actual condition of the banks. 1-2-3 bank given a notch upgrade for being too big to fail. this is huge. it has a highly distorting influence on the market. now i also notice, you argue an ancillary rational is that additional capital requirements could help offset it as too big

to fail. we had a hearing yesterday regarding too big to fail. and i think some very well meaning people believe the the problem is solved by this new orderly liquidation authority. and of course according to their logic, because of the new authority, the institutions will not be per received as being bailed out. it is going to lead to higher borrowing costs. i don't believe many in the market believe it. i start with you, chairman bair and ask you for your perception on this and how do you believe orderly liquidation authority impacts the size and scope of this global surcharge in the future and this global

systematically important financial institution surcharge? >> too big to fail was a problem precrisis. the problem somebody that the bailouts reinforce the perception. we have seen widening disparities. i think we're making progress already. moody's has announced they are actively considering moving -- >> they said they may. >> that's right. we discussed before the fdic and the fed have the case to make and will make that yes, this can work and it will work and bailoutses will be a thing of the past. it is going to take a while to get rid of it but i think title two and title one give us the authority to take the steps to get rid of it over time. it is going to take some time,

but i do believe that. i don't also see any alinterprettive either. >> let me go to mr. truollo for his thoughts. >> as chairman -- the next 22 days, every time i address her it is chairman before air. i think she has already made the point that it is not an off-on switch. i think as i have suggested, the capital standards are a complement to the orderly resolution authority and in order to get to market discipline, i think both of these things going change. if you think about it, if you end up in a situation where counterparties truly believe there is not going to be a bailout forthcoming, those who advance credit to very large organizations are going to demand higher levels of capital than existed in the past.

i regarded the resolution authority and the city capital surcharge which can move us along the road to what i think, everybody on the panel agrees with what sthoub the end, which is -- should be the end. which is eliminating too big to fail. >> i agree. that should be our end goal. the one concern i have is the way the legislation was written. i'm afraid in some ways we my have inforced it. i say that because counterparties. clearly at the moment, things have not changed in terms of the way of too big to fail. my time is expired. thank you. >> we'll take one more on each side and then when we come back, we'll starts with other members. >> i think we both agree for

our members, -- >> i would like to ask all the panelists about the capital retirements and whether or not they will have a disadvantage on american firms. specifically i would like to start with chairwoman bair which requires the fed to impose capital retirements on the most complex u.s. banking entities and in your opinion should any charge adopted under basel 3 satisfy that requirement or should american banks be subject to a surcharge in addition to what is required under basel 3? >> well, i would defer to governor trulyo because the fed does have the authority. the fed is going to take this

up with basel 3. we have all made a very conscious effort. i thought your question was whether the fed would have something in addition to it. >> no. >> it will be what the fed implements here. is that correct? yes. >> so maybe the fed should answer. the fed should answer. in other words, are you going to put an additional charge so that -- a disadvantage for a bank? >> it would be an additional charge on top of the basil 3 standards but as chairman bair just noted, it is one that we are working in the basel committee to get agreement on internationally.

so that comparable institutions in all the major financial markets would have a comparable surcharge. >> that is a definitely good goal. otherwise i fool that we would be disadvantaged. may i ask you and the other panelists whether you believe that there is a risk of regulatory arbitrage with the retirements that we have in our country and whether there is any risk that u.s. markets could be placed in our financial institutions at a competitive disadvantage? >> yes, there is always a risk of that. i think you have heard from several of us and a number of your colleagues on both sides of the aisle that in the derivatives and market areas in particular i think a number of us are concerned oort that, which is why there is a -- about that, which is why there is a need to accelerate work to get basic convergence on that proposition.

>> would anyone else, mr. gensler, since derivatives is your area, could you comment on competitiveness? >> i think that there is always that challenge. it was one of the reasons why i think this nation didn't regulate this market. it was one of the five or six key assumptions. i think there is international coordination and good consensus on central clearing, on capital because that is part of basel 3. i think we're going work together on the margining approach. i think there is good con -- consent on the guarantees. we have swapped execution facilities. europe is looking at something called o.t.f.'s but they may be different than what we're doing here on swap execution

facilities. >> sexap iro? >> i agree. there is always a risk of arbitrage. there is a significant con sen us the among the financial stability board members who have put forth the recommendations about what needs to be done, particularly in the o.t.c. derivatives base. we have a lot of issues, there are a few as chairman gensler knows of trading platforms. i would speak to this particular where we are not exactly in the same place. that's why it is so important for us to continue to push to lead task forces and regulators and to persuade others that -- very consistent requirements along with the united states. >> mr. walsh? >> i guess i would just add to what others have said that commitments have been made to achieve consistency and if we succeed in achieving consistency in the derivatives

area and the capital area and has the governor pointed out, if people deliver on those commitments, there should not be an arbitrage or race to the bottom. we also have to to be careful here at home that as we integrate some of the dodd-frank retirements specific to us and the international commitment that that works well also. >> well, my time has expired. thank you very much. >> thank you, mr. chairman . i would note that there is not a representative of the insurance industry on this panel. so i will ask ms. brainard do you know when the president plans to finally nominate an independent insurance expert who'll have a vote? >> in fact, we have our new director of the federal insurance officer in place. i think three days i want to

say. >> you have him but you don't have the insurance expert that has been voting on -- >> i don't have the answer for you on the timing of that but i will get that for you. >> all right. critical to the u.s. competitiveness is the -- f. oimbings person. i happen to be from illinois. i'm very happy that he is there. he will proceed right away, three days he has been there now? >> that's right. and i can give get you the information on the expert as well. >> ok. because what's happening in the u.s. on the trade agreements, it is noorpt he be there. and then to all of you, sips all of you represent federal agencies that are part of that staff, can someone explain their understanding how f stocks proposed rules can

impact insurance businesses which are regulated by the states and since we have no insurance person there to really let us know? >> i think first of all the insurance commissioners from the states will be represented on f stock and as they go through designations process, will be part of that process. the other thing that we're working hard on just because this hearing is very focused on achieving international consistency is that we already have representative of the neic on the international body, aeif and we are looking forward to having faio representative there as well. >> so your resources and staffs are devoted to assure agatha they rule when they are finalized taking into drgs

unique -- >> absolutely. f stock will need a way that takes into account the unique nature of this market. looking at the volume kerr rule volcker rule, which several of you have addressed, would businesses be allowed to continue to invest in private equity? >> i can't speak to how the volcker rule will continue to be applied. that process is yet to come and in particular how it will be applied but that is something that is still under consideration. >> the key issue with the volcker rule is whether or not depository institution is engaged in the activity and then whether any ensured institution is affiliated with it?

if an insurance company is in itself not the owner of the depository institution then that is not going to become -- >> would you agree with that? >> yes. the volcker rule applies to banking entities. it would depend on the structure of a particular insurance company. >> before the august recess, the -- will hold an oversight hearing. i hope we have a representative on f stock, which would be helpful. with that, i yield back. >> thank you. i understand that is something that many of our members are concerned about with that position still and i know that the demonstration has put some ethical considerations out that -- bun of them was that they

had not been involved in insurance operation. at this time, the first panel is discharged. we appreciate your testimony. the fact that the hearing was not a long hearing doesn't mean we have your testimony which will be of great value to us. we look forward to working with you in the coming months as we try implement dodd/frank. thank you. the company stands in recess until the votes are over.

>> on today's "washington journal" a conversation on the role that unions will play in the 2012 elections. service employees international union president mary kay henry joins us. after that, more about the 2012 campaign with matt kibbe. later, the head of amtrak joseph boardman joins us. "washington journal" each morning at 7:00 eastern. now here is new york congressman anthony weiner announcing his resignation from congress after suggestive pictures of him surfaced and he admitted lying about it. a special election will be held to fill his house seat. he spoke from his congressional

district in brooklyn. applause you see applause >> good afternoon. about 20 years ago, i stood in this very same room here at the council center and asked my neighbors for their help to take a chance on me in electing me to the city council. then some seven years later i asked those same team to join with people in queens in sending me to congress. there is no higher honor in a democracy than being sent by your neighbors to represent them in the united states house of representatives. it is particularly humbling to represent this district to. the communities in this district are hard-working, patriotic, opinionated.

they are authentic. i have never forgotten my neighbors because they represent the same middle class story as mine. i we want to public schools my whole life. my mother was a schoolteacher for 32 years. my father went to law school on the g.i. bill. it is a middle class story of new york. it is my story and i'm very proud of that. i'm here today too apologize for the perm mistakes i have made and the embarrassment i have caused. i make this apology to my neighbors and my constituents but i make it particularly to my wife huma. i hope to be able to continue the work that the citizens of my district elected me to do, to fight for the middle class and those struggling to make it. unfortunately, the distraction that i have created has made that impossible. so today i am announcing my resignation from congress.

so my colleagues can get back to work, my neighbors can choose a new representative and most importantly, that my wife and i can continue to heal from the damage -- to repeat, most importantly, most importantly so that i can continue to heal from the damage that i have caused. i want to thank my colleagues in the house of representatives. democrats and republicans alike. they come from different places around the country, but fundamentally, we all agree, they are all patriots and i will miss them all. thank you. i also want to express my gratitude. to members of my staff.

they are young people who are not paid very much. there are people that work very hard and very long hours. ultimately those people define the notion of service. i want to thank the many people who have helped me. the people who have volunteered. the people who have given me advice. many of my constituents who have offered me good ideas and of course i want to express my gratitude to my family. to my mother and family who instilled in me the values that have carried me this far, to my brother jason and of course to my wife huma who has stood by me in this difficult period. now i'll be looking for other ways to contribute my talents to make sure that we live up to that most new york and american of ideals. the idea that leaving a family, a community and ultimately a country is the one thing that

united states us. the one thing that we're all focused on. with god's help and with hard work, we will all be successful. thank you and good afternoon. >> earlier robert gates andal admiral mcmullen spoke about afghanistan and al qaeda's new leadership. this is secretary gates last press briefing before stepping down on june 30. it is 30 minutes. >> we'll begin this afternoon with a brief personnel announcement. i would announce that i was

firing myself. i recommended to the president that he nominate admiral jonathan brainard to become the next -- greenard. following two decades as the submariner. he is nominated and confirmed and would succeed admiral gary who will retire this fall. the department will have an opportunity to pay tribute to his four decades of service and his leadership at the helm of the navy for the past four years. i would just say that i very much enjoyed working with gary and enjoyed his council and wisdom on navy issues and

broader strategic matters. that is my only news today but since this will be my final press conference as secretary of defense, i would actually like to take this opportunity to say a few words to the pentagon press core. don't worry, it is all good. these past few weeks have truly been the long goodbye, particularly for the traveling press so i'll keep it short. even though i held senior jobs in the u.s. government an was president of a major university, before becoming secretary of defense, i have never sustained regular onthe record interaction with the news media. when i first took office, i worried that relations between the pentagon, the military and the press, while always difficult were mostly character sized by usual suspicion and resentment. i made it a point when speaking to military officers from cadets to generals to remind them that a vigorous, inquisitive and skeptical press was a critically important

garptor of the freedom under the constitution. and not to be treated it is a enemy. it became my top priority and two of my earliest and most significant management decisions. over the past 4 1/2 years, i have not always liked what i read. unlike everyone else in government, i hate leaks. maybe more than most. but i have great respect for your role as a watchdog on behalf of the american people and as a means for me to learn of problems. i know dwopets always -- we

don't always make it easy to do your job here. there are gatekeepers. it is always a challenge. a challenge that i have shared with you on occasion. so thanks again for your professionalism, tough questions and hard work. saying a few words about the man seated next to me. chairman mullen. he has spent four years as the military's most senior officer. he played an instrumental role in developing and executing our new strategy in afghanistan where we are now seeing substantial progress. beyond the wars, his focus has been on people, in particular his concern about the stress of the ground forces and their families. our men and women in uniform could have no better or more effective advocate and they will undoubtbly be sorry to see him go when he has his well-deserved retirement. serving alongside him general

cartwright. bringing to the office his unique technical and strategic brilliance. those skills have made him a leader in the military and an instrumental anything the difficult and complex program decisions of the past few years. i consider them both as friends and it has been a true privilege to work alongside them for nearly four years. our country owes them a great debt for their years of service and i will always be grateful for their wise counsel and extraordinary leadership. >> the only thing i would like to add is with respect to the nomination, i have known john for a long time. he is an exceptional officer and if confirm, will be, i believe, an exceptional c.n.o.. he has wonderful operational experience. fleet experience. he is terrific with people and he has extensive experience in the money world, which is now

facing all of us. so i strongly concur with the secretary's recommendation in that regard. >> mr. secretary, let me start by saying that we appreciate the fact that you kept to your promise to appear regularly if this room to take questions over 4 1/2 years. >> actually there was a little joking about that in the situation room yesterday. several of the others commenting that we made it very difficult for them. [laughter] >> i have a question for each of you. mr. secretary, on the u.s./pakistani relationship, which some say have sunk to a new low, do you have any regret about the way the relationship has been handled and whether you see on the horizon anything that will stop this downward spiral and for admiral mullen, a similar subject. you have developed a personal relationship with general kiani.

are you concerned that he may be headed out the door? what will be the meaning if he is no longer in the picture? >> first of all, i would say that the long history of the u.s./pakistani relationship has had its ebbs and flows. they have regarded over the decade that we have abandoned them on at least four occasions. two wars with india. when the soviets left afghanistan and then after the enforcement of the amendment. so it is a relationship both sides have had to work on. and it is complicated. but as i said yesterday in the hearing and as i have said often before, we need each other. and we need each other more than just in the context of afghanistan. pakistan is an important player in terms of regional stability.

and in terms of central asia. and so my view is that this is a relationship where we just need to keep working at. >> change the direction of the relationship? >> well, just as the ebbs have come at -- in surprising ways, i suppose that the things that would cause an uptick are hard to predict right now. but the key is to keep the lines of communication literally, i mean, between our government open and to continue communicating with each other as openly and honestly as we can. >> from my perspective nothing has changed in interprets of the criticality of the relationship. i worked so hard and certainly i have a very strong perm

relationship with general kiani and i consider him a friend. it is not just a perm rhode island. i have a -- personal relationship. i have a very strong professional relationship. the -- what he is going through right now with the pakistani military is going through now is obviously considerable introspection based on recent events, that makes a lot of sense to me. they have got some questions and in the end, i know general kiani well enough to know what he cares about the most is not himself but the institution, leaders in throughout the world and certainly in this case, you know, we share that with him. i think that we need to give it a little time and a little space as they, you know, go through this introspection. i would agree with what the

secretary said as opportunities come up and we get some very difficult timeses, i think there will be tons for the relationship to improve. certainly the challenges are not going to go away. the reason isn't going to go away and as i said yesterday i believe we have to be very careful now in terms of the relationship. were we to break or were we to walk away, i think it is a matter of time before the vetion that much more dangerous and there would be a huge pull for us to have to return to % our national interest. >> following up yesterday on your testimony in some of the questions asked by some of the senators yesterday. what specifically would be the thread if the u.s. were to cut off funding and close relations with the pakistanis and can the u.s. strategy in afghanistan succeed without pakistan?

>> well, first of all, i would say that the -- that our strategy is succeeding and pakistan is playing a contributory role to that. it is -- it is important to remember that they have 140,000 troops on that border that at a minimum are stirring things up. they basically cleared south wazir stan. there is some indication that al qaeda is worried that -- that because of the way we went after bin laden, that their suspicion is that the pakistanis may have been involved in it and are worried that the pakistanis may betray them as well. there is clearly the lines of communication through pakistan are critical for our operations

in afghanistan. so i think all of these things are important and then just in terms of regional stability there is the reality that pakistan is a country that has a number of nuclear weapons. and again, keeping those lines of communication open it seeps to me is very important. >> i would just reemphasize the last point. it is a country with an awful lot of terrorists on that border. obviously the link that we have got with -- within the afghanistan/pakistan campaign, if you will, which is what it has been for me from the beginning. it is not about one country or another. it is about the region and those things that i fear in the future, it is the -- it is the proliferation of that technology and it is the opportunity, the potential that it could fall into the hands of terrorists, many of whom are alive and well and seek that in

that region. and that is of great interest i think to our country and to the rest of the world. >> i would like to ask both of you your reaction to the fact that ayman al-zawahri has been elevated to the top position of al qaeda. >> well, i'm not sure it is a position that anybody should aspire to under the circumstances. i think he will face some challenges. bin laden has been the leader of al qaeda essentially since its inception. and in that particular context, he had a peculiar charisma that ayman al-zawahri does not have. i think he was much more operationly engaged than ayman al-zawahri has been. i have read that there is some suspicion within al qaeda of

ayman al-zawahri because he is egyptian. first of all, i think we should be mindful that this announcement by al qaeda reminds us that despite having suffered a huge loss with the killing of bin laden and a number of others, al qaeda seeks to perpetuate itself. seeks to find replacements for those who have been killed and remains committed to the agenda that bin laden put before them. so i think he has got some challenges but i think it is a out there and we still need to keep after them. >> david, it is not a price is from my perspective that he has moved into that position. he and his organization still threaten us. as we did both seek to capture and kill and succeed in killing bin laden, we certainly do --

will do the same thing with ayman al-zawahri. >> name him as evidence of logistical problems? >> from my perspective, i don't take it either way. just they are working their way through that process and that's how they made their decision. >> it is probably hard to count votes when you're in a cave. >> for the last couple of weeks, there has been eapt after can -- -- anti-afghanistan sentiment. what do you expect?