is unconstitutional. it seems to me that my friend has given up the part of the district court's decision. that should be affirmed on that ground alone. >> more than two feet or less than a two feedt. >> what happened? do we know?>> you would have to give the benefit of the interpretation which was that it was more than 2 feet. the court of appeals reversed regardless to that because the court of appeals said a few apply this decision it does not matter because you can engage in a much more intrusive true body cavity search would to is more that what essex county does. he was not asked to bend over

and have a body cavity anal search. he is asked to squats and costs because ordinarily that will cause the contrabands to fall out. -- he is asked to squats and cough. >> if i could understand your position, you did there is no reasonable suspicion -- it doesn't matter if that person is being introduced to the general prison population -- do you still think there is no reasonable suspicion requirement? >> both of these jails admit their

inmates into the general population 99.9% of the time. that is not a line we drop. >> would you say that regardless of the sense in which the person was arrested. there have been stories about cities to have taken to the arresting people for traffic citations. suppose someone is arrested because they have a lot of tickets for being caught on speed cameras, let's say. that person can be subjected to the per -- to the searches you are describing? >> yes. i think the basic principle we are asking for is the deference to the jails and the administrators require this court respect their judgment that you cannot make a distinction based on that specific individual, whether someone is a minor a fender or major offender is never all that clear.

and it is not a basis to distinguish -- >> the -- minor offenses, not drugs, not violence. there, you have to have reasonable suspicion. i cannot find all lot of contrabanders that were caught. by law clerk thinks it is one of 64,000, at best, what is the justification to avoid a reasonable suspicion in that category? >> if you look at the expert testimony before the court, the expert testimony of the plaintiff and defendant, this is the greater presence of contraband among those individuals, their experts characteristics --

characterization's, their experts said -- >> we have a lot of practical experience because different states have different rules and san francisco came in with the toughest. looking through that it is a very hard to find somebody who really was in this minor offender category who was found to have contraband. so what should i look at to show my initial reaction is wrong? >> this court said the fact that there is not a lot of contraband being found may be a testament to the effectiveness of the deterrent -- >> so why don't we change the policy? even though some contraband still got been. virtually every circuit in

practice, the federal system had been following this reasonable suspicion for minor crimes and they have been fairly successful. so why don't we change the constitutional rule to let them do more? >> anybody who thinks the problems of contraband are less serious today than they were in 1978 is ignoring -- >> i understand it is serious but most studies point to it not being an intake but coming in through guards or contact -- the great cause today is from corrupt corrections officials. >> we can debate that, but it seems to me the fundamental principle that ought to undergird the analysis here -- >> can i ask something just in terms of your rules?

year rule is you are not entitled constitutionally to any right of privacy in prison. if that is the case, are you saying if the prisons and decide on a manual search, every prisoner who comes in, correction officers can manually check their cavities? >> no. >> so there is some privacy? >> the history of the fourth amendment clearly is suggested there is no reasonable expectation of being viewed naked in a prison. the ordinary approach of having someone took a shower and looking at him or her naked for tattoos and ensure -- incident all contraband -- it does not raise the fourth amendment issue. when you get beyond that point and start to get into what essex

does, which is not a true anal cavity search but simply an anal-focused and gentle-focused search, that is subject to -- >> isn't one of the factors we look at reasonableness? should we be thinking about the fact that many of these people who are now being arrested are being put into general population's or into jails sometimes not just overnight before longer times like this gentleman, for six days, before he sees a magistrate. should we be considering a rule that basically says your rights to search someone depends on whether that individual has in fact been arrested for a crime that will lead to jail time or not, whether that person has

been presented to a magistrate to see if there is probable cause for the arrest and detention of this individual? there is something unsettling about permitting the police to arrest people for things like kids staying out after curfew. >> what is disturbing about this case is in fact that he was arrested under circumstances in which he should not have been arrested under state law. i am understand that but to change the constitutional rule and ignore what the underlying inquiry should be here which is these policies which apply across the board impinge constitutional protections but nevertheless -- what are we

doing with the presumption of innocence? shouldn't the degree to which a search is permitted the conditions in some way on whether or not this person has been presented -- >> if you want to adopt a different set of standard about who ought to be arrested and who ought to be taken to jail, that is fine. but once you're talking about actually bringing someone into the jail to be admitted into the general population in what is without question one of the most dangerous, is risky environments, i would hope that court rather than asking individual jailers where they would clearly not have the kind of information you are asking them to make and if they make a judgment wrong in either direction, all it means is litigation -- >> i thought your friend said that is what you do with a sect

to the reasonable body cavity search under the new policy. >> that is what we do it a true anal body cavity search. we changed the policy because of litigation concerns. >> as i understand it, with respect to visible body cavity searches, you require a particular reason, right? you don't require that with respect to simple strip search. you agree with your friend the only thing at issue here is how close the guard is going to be to the individual and the have no reasonable suspicion to think is different from anybody else during a simple strip search. to feed is too close, 5 feet is ok -- you don't want to have to

stand back to 6 feet. that is all the case comes down to? >> you can characterize it that way. a better way to think about is what essex wants is to examine -- >> in looking at the new policy , under the new policy, you have reasonable suspicion for everything except simple strip search and observation. >> that is the problem -- a language is different -- the line the new policy draws is where you ask the inmate to bend over and expose his or her aid is for a cavity search. we do not do that. but, we do -- >> you say we

don't do that -- >> we ask said individual to lift his genitals and squawked and cough. >> so you do more than a simple strip search. >> there is still an issue beyond the ordinary visual inspection and that is this -- even though you have change your policy, the question remains whether that change in policy was constitutionally required so that when you treated the plaintiff in a different fashion, that was a violation of the constitution. doesn't that question remain in the case? you have to consider the pure visual and the inspection for contraband. >> the only point i have been

trying to make here is if you look at the way the district court analyzes the case, -- >> does the common experience justify the argument that if you have the person to stop just for a traffic ticket but that person is going to be in custody for five or six days, that person might well prefer an institution where everyone has been searched before he or she is put into the population? >> there actually is testimony on record saying that in order to ensure everybody safety, we are better off with a blanket policy that says we're going to engage in some form of the search. it is all designed to accomplish the same thing. is not just designed to insure against contraband. it is designed to ensure there is not someone like mr. florence who will end up being poked --

>> i count seven or eight states that have some variation of the reasonable suspicion rule. is there any evidence there is more contraband being smuggled them? >> there is testimony on the record from their expert who said in kentucky, there is today the single biggest problem and the biggest cause of death is a drug overdose which suggests a serious contraband issue in kentucky. kentucky is inside one of the circuits that has had a reasonable suspicion, so i would say there is some evidence you could infer that is worse that was. what it essentially took notice of a pet -- this is a serious problem and no less a serious problem today than it was more than 30 years ago.

>> are there any constitutional limits in your view? is there any constitutional in pediment -- >> my position would be there is no constitutional -- the balance would tip in favor of the institution under those circumstances. there is a limit between a manual physical body cavity search. that would be a very different balance of the equation and i suspect i would be hard pressed to convince five members of the court -- >> de want us to write an opinion that only applies to squatting and coffee? >> you may want to ride it slightly differently. [laughter] what i would like is a decision

that recognizes the judgment under the circumstances. the only difference being are like the court to analyze it in which the analysis -- is there a logical nexus between the role the prisons at in preventing a problem and the answer is yes. are there reasonable alternatives and the answer is no. >> you are saying all searches are permissible? >> clearly, all of our searches are permissible. it was not tied in its opinion. [inaudible]

whether the pretrial detainees in new york were searched in that way on entry. >> i think that is correct. we do not know. part of the problem is that the facility was only open for four months anyway. it was going to be very difficult give you insist on some sort of empirical proof. >> the significant difference is in bell there was a effort to conspire -- here, someone was arrested on the spot and there was no opportunity for planning for conspiracy of contraband. >> the policy is aimed at all people, not just mr. florence. if you aimed at all people, if

they have an opportunity to bring in contraband -- a lot of people get arrested and happen to have drugs on them. rather than show them when their stock for a speeding ticket, they will put them in their pocket or somewhere else. >> thank you. >> mr. chief justice, may it please the court the searches should be upheld in this case. it is true contact visits in bell are different from a person coming in to the jail for the first time in that there might be a greater opportunity for planning. but as one of the justices' pointed out, there was less an opportunity to get contraband. the person coming in was going to be searched. the inmate was wearing a one piece is it up jumper and be watched the entire time.

the contraband situation in this case at intake, the person has an opportunity even if they are not self-reporting knowing they will be arresting protestors who decide deliberately to get arrested, might be stopped by the police, to the squad car behind the men might have begun or contraband in their car and think that will put that on my person. i just need to get somewhere that will be found during a pat down search and they have the contraband with them. the process of going from the point of the rest to the general jail population is not a quick one. the person typically goes to the metropolitan police department and the person would mix potentially in a holding cell with other offenders. if this court adopt a rule saying minor offenders would not be searched in a way other offenders would, i have no doubts there are offenders in those circumstances on the bus together to go to the general jail population to give the stuff to the minor -- >> the brief was really

confusing. when i read page one, page one tells me the policy requires all incoming pretrial detainees to be subject to visual body cat the inspection. it isn't until -- body cavity inspection. it is not until page 30 there is an exception for the category of arrestee we're talking about here, that they're not subject to a body cavity inspections unless there is reasonable suspicion they're concealing contraband. the misdemeanor or civil contempt offender is not subject. >> i am sorry if that was confusing. the bureau of prisons' policy is a personal not be put in the general population being allowed to mix with other offenders unless he or she has undergone a strip search. >> but i want to know how people in this category are treated in

the federal system. those people are not subject to this visual body cavity search. >> those people may go into the jail are asked if they're willing to consent to this type of search. in most cases, the consent. if they are not, they're not placed in the general population, their caps separate from the other offenders. it is the case that the rule third circuit identified which is a blanket policy that anybody that it's going to go into the jail population and mix with anyone else has to be stripped searched. that is the federal bureau of prisons' policy. >> i missed something. when they go when, they are asked if they will submit to a more intrusive search and put into the general population or a few don't, you don't have to be searched and you have to be put somewhere else. who consents to that? [laughter]

>> the general population has facilities you don't get in a cell by yourself. this arises very infrequently. fewer than 1%. the question before the court is you have before you blanket policy saying we need to strip search everyone. is that something that is unreasonable or irrational in the court has considered its normal deference to prison officials. >> i understand most of the general proposition your side is advancing, but i have to say i was somewhat surprised that the evidence of the amount of contraband discovered, the amount of weapons discovered in the literature in the citation was somewhat skimpy. i doubt there'll be a stronger showing that i found in the brief. -- i thought there would be a stronger showing than i found in the breeze. >> incident reports are not published regularly.

there's not a laboratory study you can do. sometimes it makes the news -- those are the things we reported. i would hate for the court to think there is not evidence of people who committed minor incidents is bringing things into prisons and jails. i would point to footnote no. 15 which talks about people being arrested for traffic offenses and smuggling crack pipes in body cavities. i would point to experts and to the record and fall, the san francisco case -- >> the issue has to be certainly some misdemeanor -- some people charged with misdemeanor crimes will try to smuggle things in. the issue is how many of them would not have been found by reasonable suspicion standard? i think justice breyer said in the san francisco study appears only one. >> i think that's a hazardous thing for courts to do with 2020 hindsight.

>> we don't have 20/20. we have 15 years. the prisons have been applying the reasonable suspicion standards. the most you can muster under that standard is one example of a case where someone has entered? at some point, empirical evidence has to mean something in terms of us judging the question of reasonableness. >> i agree with you, but the individuals doing the search is at issue have very limited information about people. you have people coming into the system for the first time, they have had the most contact with the outside world and you have the least amount of information about them. >> i know that it is bad to base your judgment on your own personal experiences. when i was a prosecutor, it sometimes days to get a rap sheet. i understand that is no longer the case today. they are almost always

accessible by computers today. >> that may be true, but it is not the information the people who do intake and searches have. they don't have that information at their fingertips. add the name, date of birth, and the offense the person was charged with. the question before the court is whether there are reasons for a blanket rule this court should defer to. i would say there are several. you cannot say there are minor offenders that don't pose a contraband rick scott. they're documented in the record. -- they are documented in the risk -- there documented the record. if it gets long, those mistakes can be deadly. >> suppose we except the petitioners concession that it is permissible to a -- to require everybody who is arrested to disrobe and shower under the observation of the corrections officer from a certain distance.

now the question would become how many people to do that will still be able to smuggle in contraband? >> there would be contraband found in body cavities. we have documented that there are folks who do that and the contraband is not found until they do -- >> i overstated the strength of your evidence. -- understated it. san francisco's point is the 30% to 60% of people to come in for minor crimes are high on drugs or have them -- there is to step foot note, just a few examples. the finale, they are there in this category. would it be helpful if you included in the x quoted part people who are high on drugs? we give you the high on drugs people. it's a drug offense at those who are high on drugs -- is there a way --

>> the fundamental question is who is doing a line drawing. in case after case, you defer to the -- >> the simplest thing is to say do it for everybody. the fact that they do it for everybody and don't try to make exclusions for traffic violators might be consistent with little or no evidence that might be consistent with some. >> there are many good reasons to have a policy to do it for everyone. it's done for the protection of people -- >> if there is a much to that policy -- you said because there are not that many offenders. if there were more, with the federal policy changed so that even people who are in on a contempt charge or a minor crime

-- >> the federal government thinks the blank policy is a good one. it made one modification when the weight of the circuits was against it. but the system for everyone -- >> you did not -- i did not understand -- the good policy to inspect everyone? >> yes. everyone who would be put in the general population. that is what we are defending in this case. when you have a rule that treat everyone the same, you don't have folks who are singled out and you don't have security gaps. >> thank you, counsel. >> i have three points to make. the first is my friend from the united states as deferred to the experts. but the point the united states consistently of metz is that there are 600,000 offenders ago -- consistently omits is that there are over 600,000 offenders.

every year under our standard. they're not kept in separate housing. 600,000 people is their expert judgment subject to reasonable suspicion standard. the second point about numbers just as briar, there is a significant empirical study and that is the county of orange case. the judge did an unbelievably detailed job going to the record of 26,000 admissions and was unable to identify -- was able to identify single instance were contraband would have gotten by reasonable standard. there is evidence in this case. to my surprise, there is a memorandum from the essex jail system that tells you to really relevant things. every years, they admit 25,125 people and to this jail and a life on 14 instances of

contraband and didn't even make the claim that those of 14 instances out of 25,000 would not have been found under reasonable suspicion standards. third, a couple of points have been made -- you asked whether someone who is high on drugs -- the uniform rule is the expert standard of the american standard of the expert correctional organization. almost anything will do. what will not about to reasonable suspicion is when you have a minor of thunder. we have 700,000 people -- minor offenders. the rule applied is that we have people who come in on a minor offense, they don't have any drug history. they're not high on drugs. there is no opportunity to hide a weapon. i'm not sure where they think they gun is going to be hidden that's like going to show up in the very closed manual pat down.

>> i don't think you are arguing for a weakened individualize reasonable suspicion standard. i think you are arguing for it will the draws distinctions based on categories that correspond only perhaps very roughly two reasonable suspicion. >> there are real categories that are over inclusive in favor of the jails. if they have a drug history. on top of that, if there is an individualized basis the jails can articulate, that will do as well. we're not saying that categorically people will be excluded. there are entire categories that will be searchable. we're saying do not the debate be out with the bathwater. when someone is pulled over like mr. florence, it's laugh out loud about a dinky smuggling something in to this jail, that is too much of the intrusion to put him under the direct, 2 feet away, and going to look your generals as to say we're going to oversee the showers -- look

at your a gentle as opposed to we're going to oversee the showers. this is a significant intrusion on individual privacy and individual dignity. thank you. >> thank you, counsel, the cases submitted. >> coming up at 4:00 eastern former senator john sununu examines the influence of congress on foreign policy. that's at the woodrow wilson center here in washington. we'll have live coverage at 4:00 eastern here on c-span. >> i do not object and to an investigation into solyndra. i do not see evidence of wrongdoing by government officials, just a bad investment decision. i do not want to minimize it, this was a bad decision as far as we know made on the merits. >> the gentleman's time has expired.

>> on friday, a house oversight committee continued its probe of the energy department's $535 million loan guarantee to solyndra, a solar powered manufacturer that laid off 1100 workers and filed for bankruptcy. watch the entire event online at the c-span video library. it is washington, your way. >> a senior treasury department official last week told congress he had never encountered alone plan like the one given to solyndra which authorized private investors to be paid back before the government in the event of default. solyndra got $535 million from one spot from the government in 2009 before filing for bankruptcy in september. the treasury departed official testified as part of an investigation into solyndra on the house energy and congress -- house energy and commerce

subcommittee. in reviewing the solyndra loan guarantee, in particular the department of energy's decision -- president obama may claim that hindsight is 20/20. the facts tell a much different story. recent e-mail's produced by the white house and the office of management and budget as well as a long chain of others clearly show numerous members of the obama administration from the most senior levels in the west wing down to the career professionals at omb and doe

knew that solyndra was a bad bet was destined to fail. while the obama administration may not have had a crystal ball they did have a financial model in august of 2009, foretelling solyndra would run out of money in september 2011, which they choose to ignore. in late 2010, solyndra before -- the solyndra informed doe the situation was dire and doe restructured terms of loan to keep solyndra above water. two primary investors, argonaut and madrone capital were given priority over the government what the first $75 million in the event of liquidation. i and other members of this subcommittee have continuously questioned the legal basis for this unprecedented decision. section 1702-3 of the energy

policy act states when the department of energy makes a loan "the obligation shall be subject to the condition that the obligation is not subordinated to other financing [inaudible] there were numerous concerns with the demonstrations -- within the administration regarding the financial and political impact of the restructuring. what the latest round of females show is senior officials within the obama administration have -- at latest round of e-mail's show is a obama administration had concerns that were ignored. discussions about a second restructuring were under way. the assistant secretary of treasury e-mail update director of the office of management and budget stating that "since july

of 2010, treasury has asked for a briefing on solyndra's fed conditions and any restructuring of terms. the only information we have received on this has been through omb as doe has not responded to any requests. she goes on to note that the treasury legal counsel notes the regulations both require the guarantee loan should not be subordinated to any loan or other debt obligations and that in february, treasury requested in writing the department of energy seek the department justice's approval of any proposed restructuring. that to our knowledge, has never happened. the assistant secretary seemed almost resigned to d.o.e.'s course of action. stating she expects why d.o.e. suspects loan subordination can

happen without treasuries consultation, i want to -- [inaudible] unfortunately, sick -- secretary miller is unable to join us today to discuss her correspondence with treasury or her department's role with the solyndra review. hopefully, our witnesses here today can surest -- and shed some light on the decision making process that occurred are all the time of this restructuring. one of our witnesses the chief financial office -- chief financial officer at the treasury financial bank also sent an e-mail to key officials involved in the solyndra restructuring after hearing about the proposed terms of the new agreement. he noted on february 10th that he understood "these adjustments may include subordination of solyndra's 500 $535 billion

reimbursement obligation to d.o.e. and the forgiveness of interest. he raised the possibility of seeking the department of justice's approval which ultimately never occurred. judging from the e-mail, it is clear officials at the department treasury were not sufficiently consulted and when they offer their opinions and warning signs, they were ignored, like so many of the others along the way. it should be noted along the way the final rule issued by d.o.e. implementing title 17 specifically requires d.o.e. to consult with the secretary of treasury before d.o.e. grant a deviation that would constitute a substantial change in the financial terms of the loan guarantee agreement. there is no exception allowing them to ignore those who disagree with this course of action.

"i look forward to better understanding by the department treasury felt so strongly about being consulted and whether they believe d.o.e. violated the energy policy act of 2009. with that, i recognize my distinguished colleague. >> thank you, mr. chairman. if we want to know the legal basis for the subordination of this loan by d.o.e., would not be nice to have d.o.e. here? the majority has focused on an e-mail from august of 2011 in which a treasury official raises questions about whether the subordination of the loan was appropriate. the treasury official expresses a view that d.o.e.'s restructuring of the loan may require department of justice approval. i think it is appropriate for this subcommittee to conduct fact gathering relating to these documents to advance the committee's understanding of

decisions relating to the solyndra loan guarantee, but if we really wanted to have a fact- finding hearing, would and we also bring in d.o.e. to see what they thought when treasury told them they thought that part of justice needed to approve this loan? the treasury comments regarding subordination raise questions about the application of the energy policy act revisions to the department of energy loan guarantee program and it is the department of energy that implements these provisions. though the treasury e-mail makes d.o.e.'s legal rationale a central issue of this hearing and i don't see how he could have this hearing is bringing one side in without the other side of me to respond. as i have said repeatedly, mr. chairman, we need to have a full and fair gathering of the facts of what happened with the solyndra loan and the restructuring so we can decide how we proceed further with

solar energy and other types of alternative energy loan guarantees and other types of support. but despite this, the majority has refused to minorities request to invite the department of energy witnesses to this hearing. astonishingly, the majority is even objected to the minorities request to release the february 15, 2011 memorandum by counsel for the d.o.e. loan program that was produced to the committee. in that memo, council provides a detailed analysis of their view of the subordination issue, the statutory authority and a the d.o.e. position. since february of this year, the department of energy has also given this committee and additional 65,000 pages of documents to go through. it should go without saying d.o.e.'s legal analysis of restructuring should be a component of today's discussion. but without the legal memo, we

are having our hands tied behind our back. let me talk for a minute about this memo. in an august 17th, 2011 e-mail to the omb decade the director, an assistant -- deputy director and assistant said the guaranteed loans should not be subordinate to any loan or any other debt obligation. she further notice that d.o.e. regulations state that d.o.e. should consult with omb and treasuries for any deviation is granted from the financial terms of the loan agreement. the statute of regulations she appears to be referring to contains the title 17 loan guarantee program which the department the of energy interprets through embalming regulations. the department has interpreted the subordination language of the statute and regulations in the memo are referenced. and the department also will

interprets what constitutes a deviation from the title 70 rules. i am looking forward to hearing more from treasury today regarding what the official met from her august 17th e-mail. but if we want a full understanding of the legal arguments for subordination and whether the restructuring costs to to deviation as defined under the department of energy regulations, we need to review the department of energy memo and have the opportunity to ask d.o.e. officials about their rationale. the august e-mail for the as treasury suggested in february that the d.o.e. consult the department of justice regarding the restructuring based on the statutory provision that requires doj approval letters compromise on the claim. a conversation between treasury and d.o.e. occurred on february 2011. to more fully understand what happened on both sides of this

issue, the committee needs to hear from d.o.e. as well as treasury. the majority may argue the subcommittee will provide an opportunity to question d.o.e. about its views on a later date and i'm sure you intend to do that. but that only serves to ensure half the story is told today. it makes this hearing appear to me to be more about generating headlines than engaging us in thorough fact finding. i hate to say that and i say it with all due respect but let's not do this investigation piecemeal. let's get all facts out there and that let's figure out what to do. >> thank you, ranking member. i think it is self evident we're going to have the d.o.e. folks up here. we agree with you completely and we intend to have them appear as well as the people who signed the dark commence -- designed the documents. with that, i recognize the

chairman of the full committee. >> thank you. eight months ago we asked secretary chu to turn over all documents between the department of energy and department of treasury related to solyndra. we had to ask again lee september and d.o.e. -- we had to ask again in september and her -- we recently asked the treasury department to turn over similar documents and they responded immediately, thank you. beginning to turn over the requested documents in less than a week. what we have seen so far suggested d.o.e. is essentially ignored treasury after signing off on the $535 million loan guarantee. the documents also reveal the department of energy fervently steering more taxpayer cash to solyndra with complete disregard to the alarm bells coming from

treasury and others within the obama administration. d.o.e. apparently stonewalled treasury, failing or refusing to turn over information dealing with solyndra's restructuring. the assistant treasury secretary noted that since july of 2010, treasury has asked d.o.e. for briefings on solyndra's fragile condition in any restructuring of terms. the only information we have received is through omb as d.o.e. has not responded to any requests about solyndra. this seems to be in a clear violation of the energy policy act of 2005 which says d.o.e. sharp consult with omb and treasured for granted any deviation and that loan. -- shall consult with omb and treasury for any deviation in that loan.

the bankruptcy is not only a deviation, it is apparently unprecedented. so what happened? why did d.o.e. keep treasury in the dark? solyndra was burning through cash and the alarm bells were ringing. treasury restructure the terms and gave to private investment firms priority over the federal government in the unlikely that event the solyndra declared bankruptcy. d.o.e. postponed their initial interest payments and pushed back the payment of the loan. d.o.e. waived several requirements solyndra was required to be before receiving further funding. including solyndra's consistent failure to comply with the davis banking act and their inability to contribute to an agreed upon reserve bucket. while all that was happening d.o.e. continued to push millions of additional dollars out the door in the futile attempt to save solyndra.

six months later, as predicted by d.o.e.'s on financial model in 2009, solyndra went belly up. today's witnesses hopefully are going to help us understand treasury's involvement in various points of life of the solyndra loan guarantee. this department believes d.o.e. should have consulted with doj on this. you have to wonder if d.o.e. responded to treasury's request, would something have been different? could some of the taxpayers' money been saved? the department of energy has a lot explaining to do and we will hear from them again send, i assure you. unfortunately we have to ask eleanor solyndras are there? were there other red -- how many more solyndras are there?

we focus on went cabinet agency concerned and others were in violation of law. this investigation will continue until taxpayers get the answers they deserve regardless of how high in this administration the facts take us. i would just like to say in regards to the request for d.o.e. witnesses, it was received less than two days for the hearing. this was precipitated in part because of the large and coordinated document by the white house, omb and d.o.e. last friday afternoon, just prior to the start of the three day federal holiday weekend. we do intend to allow further hearings on this topic. d.o.e. officials will be included in the testimony. >> will the chairman yield? >> thank you for yielding. i want to point out the fact the department of energy, the very first witness we analyst

jonathan silver. we asked him this very question. we would be glad to have other witnesses at the department of energy, but that was the first witness and he has resigned, as we all know. >> i think our time has expired. we're going to go to the minority -- >> before you recognize mr. waxman, i want to sit for the record this hearing was noticed last friday, mr. chairman. then it was a three day weekend because of the federal holiday. the majority did not tell us until tuesday of this week who the witnesses would be for this hearing and at that point we ask for our witnesses. i want to clarify that with a chairman and we can yield now to mr. waxman. >> all of these huge documents that precipitate this hearing they dumped last friday. >> the chairman insinuated we only ask for the witness to days

ago. that's only because we only found out about these witnesses three days ago. >> let me recognize mr. waxman for five minutes. >> thank you mr. chairman. after the subcommittee passed last hearing on solyndra, the ranking member and i wrote to request the committee held hearings on the effectiveness of u.s. policies in promoting clean energy. we asked the committee to examine what steps our nation needs to take to make sure we do not see the clean energy market to china and other countries. no such hearing has been scheduled. in fact, the subcommittee chairman told media last week that the united states "cannot compete with china to make solar panels and wind turbines." i cannot disagree more strongly with a chairman's statement. a clean energy economy will be

the growth industry of this century. we will lose millions of jobs if we give up the industry to china. we cannot compete china, but to do so, we have to reject the defeatist, anti science, anti progress, and tied jobs views of those who oppose investment in clean energy. instead of helping america lead the world in clean energy, the republican-controlled house is doing anything possible to maintain our addiction to fossil fuels and cripple renewable energy companies. republicans voted against putting a price on carbon, which would have created market opportunities for clean energy. republicans voted to slash funding for research and development in to clean new clean energy technologies. now, republicans are opposing government investments in solar

wind and other clean energy companies. this agenda may be good for the oil companies. it may be good for the coal companies. but it is terrible for the american people and our economy. this hearing is supposed to be about whether the department of energy had legal authority to subordinate the government loans to solyndra when the lawn was restructured earlier this year. but this is a rig process. the chairman has invited witnesses from the treasury department to raise questions about d.o.e.'s legal authority. that is appropriate. members should have a chance to hear from the treasury witnesses and why they had concerns. but which also have a chance to hear from d.o.e. the energy department disagreed with treasury.

but they are not being allowed to testify. we're only going to get one side of the story and that is no way to run an investigation. but it gets worse. the committee has received a six page document from the department of energy that explains the department's legal rationale for subordination. we asked last week if the majority would object if we released this document so the public can't understand d.o.e.'s rationale. the majority objected. they did not want the public to see d.o.e.'s explanation. and they're not going to have a witness today who can talk about their explanation. on wednesday, the democratic staff asked the republican staff if there would be any objection if we included a discussion of the d.o.e. legal memorandum in the background memorandum we provided to democratic members.

again, the republicans objected. they asked us to withhold this critical information. d.o.e.'s legal rationale from our own members. yesterday, the republicans said they do not believe this memo should be made public at this time. this investigation is beginning to resemble a kangaroo court. at our last hearing, witnesses who asserted their lawful constitutional rights were publicly humiliated. now, the republican majority is withholding exculpatory information from the public while they cast innuendo. >> will the gentleman yield? >> i will not. >> i will like to know -- >> you are supposed to be giving an opening -- >> the gentleman -- >> now, the republican majority is withholding exculpatory information from the public.

i did not object to an investigation into solyndra. based on the record today, i don't see wrongdoing by government officials, just a bad decision. i don't want to minimize it. this was a bad decision, as far as we know, made on the merits. i have repeatedly said i support their and thorough investigation. if mistakes were made with taxpayers' money, we should understand them and take steps to prevent them in the future. but our investigation needs to be fair. preventing the department of energy from testifying is not fair. suppressing exculpatory evidence is not there. mr. chairman, i believe you are a fair man, but you are not conducting this investigation fairly and impartially and i hope you will reconsider. >> the gentleman's time has expired and i i would say to him in all deference that i think we are. you and the president have cited me in talking about china and competition, it was taken out of

context. i simply point out the fact that china which subsidizes their cellar manufacturing at $30 billion a year has fewer regulations, lower labor costs access to raw materials, and a lack of an varmint all safety regulations and i think the united states should focus were have a competitive advantage. [crosstalk] >> i don't agree with that. >> i don't want to suppress statements by members. >> regular order. we're now going to go -- we're going to welcome our to witnesses. are we through with opening statements? you will have an opportunity to extrapolate on your feelings during your questions. >> we're going to let what their ranking member said -- >> in a democracy, you let both

sides have their opinion. mr. waxman certainly had an opportunity to make any outrageous -- >> i don't have a problem -- >> regular order. let's return to our witnesses and let me say to both of you -- first of all you are aware the committee is holding an investigative hearing. when doing so, has had the practice of taking testimony under oath. do you have any objections to testifying under oath? >> no, sir. >> no, sir. >> under the rules of the house and the rule of the committee, you are entitled to be advised by counsel. do you desire to be advised by counsel during your testimony today? >> no. >> in that case, if you will read your right hand so i can swear you in. these were the testimony you are about to give is the truth, the whole truth, and nothing but the truth, so help you god? you are now under oath and

subject to penalties set forth of the guided states code. you may now give a five minute -- the united states code. you may now give a five minute summary. >> chairman ranking member and other members of the committee thank you for inviting us here today to talk about the treasury's role in the department of energy loan guarantee program. i am the deputy assistant secretary at the treasury and i am joined by the cfo of the federal financing bank. he reports i submitted a written statement for the record. i'm not going to read a lengthy opening statement here. in the way of introduction, i will just say that the treasury has two very distinct roles in the department of energy loan guarantee program -- consultant,

and also as a lender. as a consultant, the statute requires the secretary of energy to consult with the department of treasury on terms and conditions of loan guarantees, and we provide input on that basis. as a lender, when the department of energy decides to make it 100% federally guaranteed loan as opposed to partially guaranteed loan, then it is the federal financing bank that actually issues alonethe loan to the private sector entity. we have a role in lending, which is operational. mr. burner and i would be happy to answer opening questions. >> we understand that mr. burner does not have an opening statement. we keep hearing "loan guarantee," i think this is a

misnomer. when the doe gives a loan guarantee to solyndra what happens is the department of treasury prints the money, and doe gives it to solyndra, and there is no private bank involved, no other commercial enterprise except it goes from treasury printing the money doe giving it to solyndra. is that a fair estimation of what happens? >> i will give a -- >> no, just answer my question. is that approximately what happens? there is no bank involved -- >> no commercial bank involved. >> solyndra is not going to bank of america or any other bank saying "would you like me $535 million because doe will guarantee --" they never did that. they just went to doe and got a check -- >> that is correct --

>> when the american people here "loan guarantee, close what it means the government is standing by a bank, but in this case, they are printing money. taxpayer money b subordinated -- can taxpayer money be subordinated ever? yes or no? >> i cannot give you a yes or no answer -- >> illegally khatami bid has there ever in the history of the united states -- you cannot tell me. has there ever been in the history of the united states money given to private companies like this, ever subordinated to the private sector? in your experience? your answer is yes or no? . >> i personally not been involved in any -- >> not in your experience could have you ever seen taxpayer money b subordinated? >> i personally -- >> ok, you are the chief financial officer, is that correct?

with your experience, how long have you been in office? can you pull the closer to you? you have got to turn it on. >> ok, thank you sir. i have been holding this position for five years. >> what was your experience before that? >> treasury department for 20 years. >> in your experience of 28 years, plus being a chief financial officer have you ever heard of taxpayer money being subordinated to outside commercial firms? >> never. >> 33 years experience -- >> 28 total. >> you have never seen to experiment subordinated -- taxpayer money being subordinated? >> no, sir. >> is it against the law? >> i cannot give you a legal

interpretation, sir. >> is it against the law -- >> i am not in a position to offer legal interpretation. i am not a lawyer. >> it is wired up the secretary of energy to consult with the secretary of the treasury were on terms and conditions regarding a loan guarantee. is that correct? >> yes. >> what must doe do to satisfy this requirement? >> the department of energy must come to the treasury with terms and conditions prior to issuing a conditional commitment to offer a loan guarantee. >> basically doe must seek approval? >> that is not fair to say tree we ought not approving terms and conditions -- that is not fair to say. not working terms and conditions. >> they have to consult you? >> yes.

>> what if treasury believes terms and conditions are guaranteed -- as guaranteed not protected the government's interest? >> ask questions -- >> there is nothing legally you can do on that? >> there is an e-mail on omb staff as saying that treasury was not pleased about solyndra a spot on that date. the stimulus adviser -- let the stimulus adviser about it in no uncertain terms. >> we were not aware they were going to come to us with the term sheet that point in time. we had not worked out the routine for conducting the consultation. >> was treasury rush to provide

consultation? >> we ask for additional time and were given additional time, and provided consultation in due course. >> i last question, mr. grippo when did they learn about -- when the treasury learn about the conditional commitment to solyndra? >> it would have been around this time, march 10, when we were provided information on the terms and conditions on the loan. i am not sure it the exact documents transmitted to us but would have been here in early march. >> i recognize my colleague, ms. to get from colorado. -- ms. degette from colorado. >> the chairman assateague if you were rushed in your decision and you said you were given -- the chairman asked you if you are rushed in your decision and your diminished additional time to soak your answer would be no?

>> no, we were not rushed. >> in august 17 e-mail to the blm hidekiomb deputy director -- if you could look at at 12 in your notebook, the e-mail "and the legal counsel believes that the statute and the doe regulations require that the loan should not be supported to any other loan or debt obligation." mr. grippo, do you know if they rendered a legal opinion regarding the subordination of interests, consistent with the statutory requirements regarding that program? >> we did not render a legal opinion -- >> you did not give a legal opinion, right? >> treasury did not. >> does the responsibility reside with the department of perjury for interpreting title

17 as it relates to the department -- the department of treasury for interpreting title 17 as it relates to the department -- >> it is not the department's responsibility to interpret such a trade -- interpretive thatcher. >> in fact, it is the department of energy, correct? >> correct. >> the office of 36-page memorandum that provided a detailed discussion of the legal basis for the subordination during the restructuring of the solyndra loan guarantee good that is. that is what i was referring to in my opening statement. today we are talking about white there was subordination, and what the legal basis was. i want to consult his legal memo -- i request that this legal member be entered into the

record. i read it, i am a lawyer, and i found it to have no privileged information or anything like that. i think it would be helpful to have that for today or for future hearings talking about this issue. >> gentility, we will look at it and get back to you. i will yield to the chairman -- mr. dingell -- >> unanimous consent is not going to be considered? >> it she said it's something i've not seen init, i will have the staff and counsel look at it. if i want to put in unanimous consent, i have her and her counsel look at it before making a decisionbeing a decision -- >> it has always been my understanding that these records should be as clear as possible,

and that everybody ought to know what all the events are that we're dealing with. and it is a member thinks is important enough to be in the record, that it ought to be in the record. >> both sides should have the opportunity to review its. >> i have been wasting the time -- >> it's ok, i had been doing it with his documents, too. >> this isn't a document they have to have time to review. this is the document they have had since the very first day of the hearings on slender, a document that has been discussed -- on solyndra, a document that has been discussed -- if you ask unanimous consent, they ought to ask yes or no. >> we will give them one minute, and i will make a motion. let me finish my questioning. mr. grippo, have you seen that

document, that memo? >> i have not. >> mr. burner? >> i have not. >> are you aware of many of the legal opinions expressed in that memo with the legal research? >> i am not personally aware of the legal conclusions. >> can you speak to what doe's views are regarding restructuring under the loan guarantee program? >> i would not feel comfortable speaking to their views and state of mind. >> that is it different agency. can you speak to the legal basis for restructuring under the doe program? >> no, i cannot. >> once again, mr. chairman, it would be really helpful to have doe here.

i ask for unanimous consent to put that out into the record. >> while we are looking at it -- >> our staffs have been talking about it. >> if you want some to object, i would be happy to object -- let me recognize mr. barton, the americas up the full committee for his five minutes of questioning. -- emeritus of the full committee, for his bike minutes of questioning -- >> wait a minute. i finished my questions, but i renew my request for unanimous consent -- in this case, what is the basis? >> i have not seen the memo -- >> in all fairness if he wants to see the documents -- >> ok, let's give him a copy. >> we are going to have the

votes right now and will continue the questioning. >> in that case, mr. chairman, i ask unanimous consent that we recess for the vote -- >> at this point, mr. barton is recognized for five minutes. >> let me make one comment on ranking member waxman's overstatement. i know when you are in a minority and the president is up your own party, you have an obligation to defend the president to some eccentric i would also point out that we have been trying to get the facts on solyndra for about six months, and it took us a subpoena request to get some documents, and every member of the minority voted against that subpoena request. last week we got a fairly extensive document dump right after 5:00 or 6:00, and to the

minority's credit, and their staffs spent all weekend apparently, it going to the documents, found documents were the of being released. they exercise their right to do that. i tip my hat off for that. they worked harder, and maybe they were tipped off, who knows. at least they took it an edge of the situation and did i think they thought made sense -- took advantage of the situation and did a thing they thought made sense. ms. degette says she wants to get a tax on the table pit that is what we are trying to do. -- she wants to get the facts on the table. that is what we are trying to do. today we are here to talk to the treasury department, because they are the department that actually finance the loan. it is not really a loan guarantee. apparently there is a department that raise a lot of red flags about it that nobody at doe or the white house paid any attention to. with that, i want to ask my

first question. how did you -- how did the treasury department first find out about the solyndra loan? >> about the loan itself? >> about the fact that the department of energy under president obama decided to go forward with it. were you officially notified or did you hear about it in the press? what was the first inkling that they were thinking about giving his company $500 million? >> i think the best answer is that it was in march 2009, when we submitted a document to provide consulting input. >> is that part of the record we can look at? maybe see those documents? could they be provided -- >> e-mails or other document that deliver the term sheet and other related documents -- >> chairman stearns made the

point that in the law, which authorized a loan guarantee, which means the private sector makes the amount and the federal government agrees to pay if there is default. in this case, this was not a loan guarantee to the treasury department actually granted a loan. is there a decision document that goes through that process and makes the change on the record? >> there are a number of longstanding written a federal policy including of this man an image men and budget circulars and other documents, that it is the federal government's -- the office of management and budget surplus and other documents that is the parent or when its policy to issue a loan when there is it 100% guarantee -- >> even though the law stipulates the loan guarantee -- because there was a decision to do 100% financing existing regulations convert the guaranteed to a loan as opposed

to a loan guarantee. >> the guarantee issued by the department of energy -- in this case, it is issued to a government corporation the federal financing bank, under the supervision of the treasury, rather than to commercial bank. >> but in layman's terms, the department of energy requires the department of the treasury will pay another part if the loan is not paid. >> the department is issuing the loan guarantee -- >> treasury will send $500 million to the department of energy, who will turn it around to send it to the federal financing bank, part of treasury, correct? >> that is correct, and there are good reasons for doing that, because it is the cheapest way to finance the loan for the taxpayer. >> now, there are e-mails -- the minority has put into the record release to the public showing

that many treasury officials had great concerns about this loan. was the treasury department ever in a position to just reject the loan? >> now, either the treasury department nor the federal financing bank would have legal authority to reject the loan. >> if asked on the record, or if the president had asked with the treasury department approve of this loan being given or what they had objected to it? >> i'm sorry, could you repeat the question? >> it the treasury department had the authority to say yes or no on the solyndra loan at the time it was granted, would the treasury department have approved it or disapproved it? >> one, the treasury did not have that authority, and two, we did not have all the due diligence and background information that the department of energy had. it is not our job in the process to make a credit decision --

>> is it fair to say that based on objections raised before the loan was granted, after the loan was granted, that treasury had grave concerns about this loan? >> it is not how i would characterize it. we provided consultative input on the of original terms and conditions, we made suggestions. some of those were accepted. beyond that, throughout 2010, and in 2011, we were aware of issues. we were offering advice and but, we work at letting the department of energy know that we were having federal credit policy trying to make that available to the department of energy. we did not have a specific information about the loan -- >> i am trying to help you out -- >> gentleman's time has expired.

the bell has just rang -- we will allow mr. waxman to come back here. we will have a decision on unanimous consent by the ranking member we will let mr. waxman, who has to be on the floor offer his five-minute question . >> i will have to be on the floor after these series of votes. i want to take the opportunity to ask you questions. who has the legal authority to make decisions on the issue of subordination. is it the treasury department or the department of energy? >> certainly not the treasury department. >> department of energy? >> i am not sure if it is the department of energy or the department of justice -- >> they heard from you, your department that there were concerns about the subordination issue. is that correct? >> i think we raise the issue of

whether they could compromise the claim to government debt not specifically whether there was subordination, to be clear about the concern raised. >> there was no legal decision or memorandum? >> no, we did not have or render a legal judgment. we were flagging an issue for them to consider. >> you flag an issue for them to consider. they heard what you had to say. and then a lawyer should the legal opinion. the legal opinion is a legal opinion. it is not a statement of fact, it is a statement of what they think the law is. hence the document we are trying to make public. this is a document that republicans have had for months. at the very first hearing we had on solyndra, congressman gingrey read a portion from this

legal memo and ask you a question. the issue before us at this moment in the committee is whether we are going to make this part of the record. whether we are going to make a legal opinion public. the chairman is like one of those it is serious when we were -- those serials when we were a kid going to a movie, you not going to get the result the next time. if they don't give us unanimous consent, i think we ought to have an motion to put in the record. we have documented the investigation, and explains the department of energy's legal explanation for the subordination of taxpayer-. it was produced for our committee. -- pikesvilletaxpayer-debt. it was produced from our committee. the republicans alleged that

release of this document could taint witnesses in the investigation. the introduction of a relevant document does not pollute an investigation. rather, it creates a more falls, record, so we know what doe -- a more fulsome record, so we now what doe was thinking. we don't have doe here. we should have doeh here. we flag in issue for doe. ok, the issue was like to read what is your view of that issue? >> the issue was flat. what is your view of that issue? all it knows that the issue was flagged. they leaked documents related to the investigation, they leaked many more to the national media. the release of this document is not tainted the investigation

any more than the release of all these other documents. the majority wants to release the documents whether it supports the theory of the case and keep documents down that may contradict it. we will see what happens in this fight when we come back. i know that ranking member degette will do it and able job in putting out why this ought to be part of the record, in addition to my comments. >> i would ask for additional time if you just -- >> regular order, regular order. we do have a vote. >> thank you, mr. chairman g mr.. -- that you, mr. chairman. i would like to ask you about questions you have for mr. kaiser. did any of you talk to mr. kaiser? >> i did not. >> i did not. >> did you ask anyone to give

specific advice on thatbecause of mr. kaiser's donations the president? >> no. > when treasury determined interest rates for solyndra, did you instruct anyone to take this is a big action regarding this rate because of mr. kaiser's donations to the president? >> no. >> is there anything that would suggest that mr. kaiser's donation to the bus and was a factor in granting or restructuring the solyndra -- donation to the president was a factor in granting or restructuring the solyndra loan guarantee? >> no, sir. >> i thank you for your answers and for your being here today for the limited value it may be. >> we are going to temporarily

recessed the committee and we ask the forbearance of the witnesses.

>> the subcommittee will be convened. -- will reconvene. we have had a chance to review this. i think before i make my final decision i will recognize the gentleman from texas emeritus of the full committee, on his reservation. mr. barton is recognized for five minutes. >> at you, mr. chairman. i do reserve the -- at you, mr. chairman. i do reserve the right to object i want to tell the gentle lady from colorado that if we get a productive discussion about my reservation, i am willing to withdraw my reservation, because i am not at all interested in cutting 11 information from the american public, -- hiding any information from the american public, and the way to get it in the public domain is to put it in the record. it is clear to me that this is a

key memo. it is also clear to me that the majority counsel at every intention to probably have -- i would say definitely have -- a hearing specifically on this memo, and the minority counsel was made aware of that at least two to three weeks ago. there are apparently at least two memos that are identical in terms of content, with the exception of who they are addressed to. one memo is addressed to secretary chu from the general counsel, and the other memo, i think the memo that the gentle lady from colorado wanted to put in the record, is a memo to the general counsel from a lady named susan richards and, who is the chief counsel of the loans program office. the content, at least from what i can tell in trying to rebut memos very quickly, is identical -- trying to read a book and was very quickly is identical

but the salutation is different. in time, i hope we put both memos in the record if we put one of them. the one that addresses the secretary of energy and the one addressed to the general counsel. the key part of the tax in the memo is on page three and it has got the aircraft had line at issue. i am going to read it. i think it is important the issue is whether proposed subordination of certain borrowers'reimbursement obligation is to consist with subsection 23 it with titles 17 . i was the committee chairmanship that supported this provision and the law. it provides that the guaranteed obligations shall be subject to the condition that the

obligation is not subordinate to other financing. i want to repeat that, mr. chairman. subsection 17od provides that the guaranteed obligations of the subject to the condition of the obligation, not support and to the other financing. not subordinate to other financing. that, to me, is explicitly clear. now, here is the answer. either susan richardson or the general counsel, depending on which memo you decide to put in the record, here is the short answer to the question. the proposed subordination is permitted under title 17. the subordination condition contained in subsection 17 is by its terms applicable only as a condition precedent to the issue of the loan guarantee. the question i would have for the author of the memo, mr.

chairman where does that come from? under what retail what he decide after reading that is not supported it, just out of the to make the statement that it is applicable only president to the issuance? as it turns out, mr. chairman, the reason they answer that is this memo was issued after solyndra had already received some of its loan proceeds and was in default. this is an opinion on my part. i am not saying it is a fact. i think is an informed opinion. the department of energy is looking for a reason to continue alone and to restructure it, but they have a problem in that they cannot subordinate. the only way to restructure it is if they can. the rest of this memo, mr. chairman, goes through a convoluted explanation of why

they think they can subordinate it. finally, on the bottom of page six, in a footnote, no. 2, they basically say we think we can subordinate it because the secretary of energy has broad authority to do whatever he wants to do. that is not a real reason that legal opinion, mr. chairman. i would hope that we would find out how many of these memos are floating around, who actually altered them, have the staffs on both sides depose the authors probably have a hearing specifically on this topic, and let's get to the bottom of it. it is clear to me that the department of energy and violated the law when they agreed to subordinate taxpayer money to private investors, some of whom appeared to have been happeavy contributors to president

obama's campaign. i'm want to thank the gentle lady for wanting to put the memo in the record. it is one of the key documents but we need to get all the facts on the table not just this one document. >> i think what we're going to do is have unanimous consent -- >> i ask unanimous consent to respond. >> i thought we might have a discussion that you would want to have more time on that. i think we will try to limit this to 3 or four members perhaps 15-20 minutes on this discussion if it goes that long. >> i just want to respond on the reservation of rights. i want to thank the chairman emeritus for restoring this debate to some sanity. we won't object -- if mr. barton will -- apparently has the same memo and it has different addressees --

>> my quick reading -- >> i don't object to that coming in, either. i think the chairman emeritus is understanding the point i have been making all along, which is that we need to travel investigation, we need to have all the evidence in the record, we need to figure out what happened because it just to have treasury come in and say, "well, we said it should go to doj," without having doe come in and say here is what we thought about what treasury said, and to have the actual author of the memo in, we cannot know what happened. that is the purpose of the oversight investigation committee, to figure out what happened. i think that the chairman a emeritus' questions about them, are good legal questions. i just wish susan richardson or

somebody else were here to answer those questions. i'm glad we will put this memo and the other memo in the record. i will also ask the chairman after the recess next week, let's have another hearing let's bring these folks in. we really need to know -- >> the gentle lady heard me earlier -- we intended to bring secretary chu and the department of energy in -- >> with all due respect, i support bringing in isecretary chu, but we should also bring in individuals within doe who wrote these memos and made the legal opinions otherwise he would not know the legal basis -- >> i would say to them i remember that my staff has told years doubt that we are going to do that. "exit -- my staff has told your staff that we were going to do that. "excellent" is a good word to use.

>>[crosstalk] to you request to strike the requisite number of words? yes, you do. you are recognized for finance. -- five minutes. >> i recognize the gentle lady from colorado and the chairman emeritus from taxes. i am glad these two documents are submitted for the record. i do have some concerns, usually before the documents are submitted we have some level of understanding about them. some of the concerns i have that now are discussing, we are discussing them in theory because interviews have not been done on these with these parties. traditionally what happens is that we get documents that are conflicting, or we have questions about the interviews that are done by staff. we are better informed.

that has not been able to be done and the staff's point here of not releasing these -- of course, mr. chairman, we have been briefed. the minorities have these documents for at least a week. if not more. is that true? >> that is my understanding. >> it the gentleman will yield -- will you yield? many of the e-mails that and put in the record, interviews have not been connected with the authors of those either. >> let me ask you this -- you want to have a hearing next week? i love that. well, maybe not -- i would if you what but i am not sure our colleagues would agree to having one next week. but the week after. in the meantime, would you be helpful, gentle lady atranking chair providing it, encouraging

it susan richards to have an interview? any of the associates with her that wrote this memorandum? i think it is important that even dr. chu's staff be involved because the first one was ostensibly written to him which raises a lot of questions white with a subsequent one day it felt it was necessary to -- why with a subsequent 1 they felt it was necessary to erase his name out there. those are important questions to ask, because it looks like there is a cover-up to protect dr. chu -- >> will the gentleman yield? i think that is a pretty incendiary statements. they might have had two memos ones with his name, once with the susan richardson's name. the allegations are exactly what

is wrong with the investigations -- >> you are not allowing us to go through regular order to allow us to ask these questions -- >> i would be happy to do that, recognizing that the administration does not always do what i tell them to do, sadly enough. >> it would be helpful because frankly, from my perspective the red rug from -- rhetoric from the two top people on the committee has been obstruction and diversion. i appreciate the gentle lady's -- what i believe is a sincere gesture of helping with those trade i. we have not had time to do those interviews. when things change from one thing to another, is a legitimate question to say why was it change? why was dr. chu's name removed

there? it looks like it was to protect him. discussions occurring on subordination, october -- three full months before the january memo was written. and then the february supposed official one -- it looks like -- i want to know this during your interviews, the bipartisan interviews that will occur -- it appears that perhaps there may have been another quarter, maybe a verbal, that they -- the legal department was to design a memorandum supporting subordination, as opposed to an unbiased legal analysis that the department of justice crafted in. i would appreciate those

questions in the interview, and i will yield back. >> mr. burgess is recognized for five minutes. >> thank you, striking the requisite number of words in the reservation. it is important -- when the former secretary of the department of energy was here, one of the various things we asked him was would you make available, members of your staff to our staff, to be able to talk about these issues, and our staff, on both sides, i think was doing that due diligence and proceeding. this has all been difficult because there was an obstruction at first reading. we could not get the documents until the subpoena was issued in july trade every democrat voted against it. i am sorry to be incendiary, but that is a lie -- it should not

be allowed to stand. we got the draft memo only as a result of the subpoena, and we got a sanitized memo, if i can use that incendiary language only because we asked since this is a draft to you have a final? that is the issue before us today agreed to say that the republican staff -- that is the issue before us today. to say that the republican staff hid things is a lie. they did what we asked them to do. we said, secretary can we have access to your staff? can we talk to them? again, the word "sanitized" made the incendiary, but when you look at the dropaft attached to the legal memorandum, and it is addressed to the secretary

through the general counsel's office, what are we to think when we see that? even though it is trapped on it -- even though it says "track" on it? the administration needs to hear something today, and that when we ask questions, they me to respond when asked for documents, they produce. we call hearings, they need to show up. otherwise, we're left to our imaginations, and i have a very vivid imagination. i think someone is sanitizing something, someone is hiding something. we have members of the press in the room. they asked me questions when i go to a vote. what is the deal? i don't know the answer to the questions. i would like to know the answer to the questions. i would like to call all the people to the committee and get that straightened out. -- i would like to call relevant people to the committee and get that straightened out. >> gentleman from illinois is

recognized for five minutes. >> i would like to yield to my colleague, congressmwoman degette. >> mr. chairman, i think we should cut this debate off because mr. burgess really did not want to say what he just said to. the documents from the department of energy were not produced by subpoena. the only subpoena was for the documents by omb not doe. all the documents from the department of energy were produced to this committee 65,000 pages voluntarily. this particular memo, and in addition, the other memo which says draft on it and secretary chu -- the chu one was omb production but this was

produced many, many months ago. if we want to try to cater to the press and make a scandal where there is none, we can do that. if we want to have a full thrown investigation, i would suggest we put these memos in and bring the doe people in, we talk to them about why there was one draft and so on, instead of making these allegations completely unsupported by evidence. i would also say that the doe wasn't even abideinvited to the committee. mr. waxman and i wrote a letter to you asking that doe be invited to the committee paid to it now say th -- invited to the committee. to now say doe is hiding something is inaccurate. let's bring doe in and have them talk about it instead of making allegations that are completely unsupported by evidence.

>> gentle lady from illinois. >> i yelled back. >> gentle lady from tennessee recognize for five minutes. >> i just want to make certain that we all understand that it was the subpoena from omb under which to this draft memo became available. it is because of this draft a memo that was made available under the subpoena documents that we then were able to get the final version of this memo after they went back to doe for that request. just for a correction for the record, it was because of that subpoena, and that is exactly what dr. burgess was saying in his comments. i think this is such a very serious issue. if we look at only solyndra and

the situation there, if we look at this loan program in its totality, if we look at the other loan guarantee programs with other departments and how they are working this the type of issue we need to drill down on. we needed time for members to do their due diligence. i do hope that we will subpoena other members that were involved in this process of writing this e-mail and the attached documents that go from january 21 2011, which is the e-mail that came under the omb subpoena, and then into the final document that goes through detailing the subordination that is the february 15 document, and i would encourage the chairman to continue moving forward with that hearing. at this time, would any of my colleagues like the balance of

my time? >> may i have 30 seconds? >> i yield to mr. jerry. -- mr. terr7. -- mr. terry. >> in reference to comments from the gentle lady from ca colorado in reference to cut off discussion, they made specific accusations against the majority of hiding those from them. it is completely appropriate now that we have the venue to a defend ourselves against those accusations, and to be able to have a valid discussion about the fact that there is two memos with two different headings, and we don't know what else the defense is are at this point are completely appropriate. as a former reformed lawyer that did a lot of trial work, the

judge would say, "madam you open the door." >> reclaiming my time. i yield to dr. gingrey. >> it seems to me that this issue has been brought up by it the minority's request for unanimous consent to submit this memo put the record. the minority knows that in consultation with the majority a commitment was made by the majority to have a subsequent hearing and that secretary -- to have secretary chu, testify about this memo, and essentially, who knew what and when did they know it? the minority at this hearing today as sort of pre-emptive that process after seemingly an agreement was made by majority

staff and minority staff that this would be done in a timely manner under regular order so that the dots could be properly connected. all of a sudden we get this put on us this morning, andunanimous consent to release a memo, a draft, essentially that is incomplete. we cannot connect the dots. i am glad that the chairman emeritus mr. barton from texas is in all probability going to withdraw his objection but let's get this done and move forward to the hearing that the chairman of the subcommittee mr. stearns, has committed to the minority that we will have. i think i should end the discussion, quite honestly. -- i think that should the need to the discussion, quite honestly -- >> reclaiming my time. i yield to mr. griffith. >> the gentle lady's time has

expired. i am prepared to rule with mr. barton. could you go ahead and get mr. test elisse -- mr. scalise a little bit of time? i think the witnesses are showing great forbearance. >> i am glad the memos have come in. establishing this thing in the right order so that you don't have the speculation and so forth going on. i want the press and the lawyers of the united states of america to take a look at this memo. when i read this eight few weeks ago, i commented that it looked like a law school project. i texted my staff and ask them if they could find out when susan richardson was admitted to the corporate it's as she was admitted in 1983 but that surprised me. it is not give you any court

cases on the code section, and there is a part in here, once such a condition is president, you cannot subordinate, has been satisfied or weighed -- though continuing illegal act. in other words, as i said at the hearing -- no continuing legal effect. in other words, as i said at the meeting, it was astounding to me that this memo was relied upon. i think it is great that the department of treasury at least through up a warning signal in their summer and said, you all better off just as look at this -- you all better have justice look at this. i want susan richardson to be here and the asked why the memo was put together like this. this is what the suit to suspicion and speculation, because these are the series of things -- you heard the

footnotes from others. the code also requires that if there is the pot, the attorney general be notified. -- if there is default the attorney general be notified. did that happen? the secretary of treasury is supposed to consult with or notify -- i mean, doe is supposed to notify secretary of treasury. i would like to know that actually happen. clearly, there was deviation after the fall. i don't know if they notified the attorney general. it appears from the memos and e- mails we got that they did not notify treasury what was going on. it just seems like this entire memo -- one of my original notes says "it's inconvenient, boo hoo." they made a bad loan, they tried to cover-up the fact that they made a bad loan, and they went

and broke the law. >> mr. scalise from louisiana. >> mr. chairman, i thank you for, again, continuing to help us shine light on what is a major scandal that we are getting to the bottom of on this side, an unfortunate, our colleagues on the other side of blocked us and stonewalled us on every front, predating the subpoena. we needed to subpoenaed to get the information. everybody on the minority side voted against the subpoena, so we can finally uncovered the things we have uncovered. there's a lot we have uncovered and even more to come that we are trying to find out. we continue to get stonewalled on every front. they keeps saying, "why isn't the department of energy here?" the head of the loan program was here a few weeks ago, i asked the head of the department of energy policy loan program who made the decision to subordinate?

he refused to answer the question under oath. finally, he acknowledged that he would give me the names of everyone involved in subordination. everyone involved. he admitted that under oath, and then he resigned. i have a question for the council later, mr. chairman -- is he still compelled to give us the information? he said under oath he would bit as the information but who made the decision to put the taxpayers in the back of the line? this isn't about the press or republicans and democrats. there is by fund a $35 million of taxpayer money adds -- . $535 million of taxpayer money at stake this document was not originally given to us by the department of energy. it came through omb and we got back to department of energy and they said, "we forgot to give you this." "we forgot to give you this"? this is a legal counsel opinion that basically says you can ignore the law. you cannot ignore the law.

the law is very clear. just one sentence -- says he cannot do it. yet they went and got a legal opinion anyway? i want to know who was involved? was it just susan richardson, or she directed by somebody else to come up with this opinion fa? we got memos from the white house saying, "get this done we want the ribbon cutting." they were concerned about a photo op and they allowed $535 million of taxpayer money to be put on the line for a venture- capital firm -- we cannot get the information until we forced a subpoena that everybody on the minority side voted against. those are the facts. we need more of this to come out, we need more humans because we have not gotten all the facts from people that are involved -- this -- we need more hearings, because we've not

got all the tax for people that are involved in this. >> i do have a question. if i am understand mrs. degette correctly, she is agreeable to putting both memos -- >> she is. >> on the second memo, there is an addendum to it as a number of tabular information regarding proposed a finances of solyndra. does she wish that to go on the record? >> i don't know what those tabular items are. if i can see those -- i just want to make sure it is not proprietary information. i would assume we would not object. >> i would be agreeable to whatever the chair and ranking member -- >> i will take the position that the documents by unanimous consent be part of the record. >> i reserve the objection on

the table until i can see it. show it to me. >> i want to be sure -- >> it is -- >> we would not want you cannot see it. >> protection for solyndra for about five years in the future. and i am not saying it should read am just saying it was attached to the memo. -- i am not saying it should. i am just saying it was attached to the memo. >> i would ask that the majority and minority staff review that to make sure there is not proprietary information -- >> ok, by unanimous consent both documents are part of the record including the tabular. with that -- >> i have a question, though,

because what the gentle lady from colorado said is not what you said -- >> i am making the tabular part of it by unanimous consent. she can object, but she is not objecting -- >> ok, so that is it, regardless of whether it is proprietary it -- >> what i am saying is that subject to agreement by the staff, subject toconfidential business information. here is the problem is, we agreed to these two memos and chairman emeritus came in with this -- >> the tabular is such a fine print that i don't think any side is going to look at this. i think we should move on, instead of having another discussion about the tabular. >> are you objecting to putting -- >> the tabular thing before we can review and decide. the memo itself i did not object. i think our side will object to

putting the original memo. >> fine. >> the question would be -- >> i think we have agreement to put both documents -- >> both documents. >> the gentle mating -- the undulating makes the point -- >> two as unanimous consent and tabular subject to the review by the staff for redaction. so ordered. now we will move on to our witnesses who have been kind enough to stay with us. at this point, i think our side is recognize next and that would be mr. terry. >> all right. gentlemen, thank you for your patience. i have some rather bland questions, but first i want to make a point about whether or not -- i think it was mr. grippo did you say you did not feel you were rushed to provide

your information after the consultation, your feedback? >> let me be clear about what happened. we were provided with a -- sheet for this deal. we were asked for a very quick turnaround for consultation. we felt we needed more time. we ask for that -- >> you did not feel rushed. >> we felt we needed more time. we ask for it. they agreed we should have more time. and in due course gave our consultation. >> are these dates correct then i just have notes. march 10, 2009 doe asks treasury for the consultation. then march 17, 2009, doe approves and commits to the loan.

march 19 treasury submits their consultation and questions. it seems to me that your consultation was fairly irrelevant. >> i am not aware of that sequence of events myself. >> we will submit those. they are in the document that i will get to in my three minutes left -- that allowed it to. in my three minutes left, another set of questions. and mr. burner in tab 2 in your binder is a memorandum that is march 16, 2010. entitled treasury/, consultation with the department of energy on the solyndra fab 2 llc prius entitled project. have you seen this before?

>> yes, i have. >> the newly drafted a memo? >> and member of my staff. >> under your instruction? >> ok -- >> yes. >>. why was the -- to file drafted one year -- i am referring to the first paragraph of the memorandum which seems to be documenting a call a year early? >> the staff was directed to put it in final and did not and i found out about a year later and ask to be put in final at the same time. it has not been changed since it was originally drafted. >> your aid or assistant drafted the memo a year earlier and did not submit it or -- >> never got put into final for some reason. i felt i would rather explain it to you vendor -- backdated the memo. >> i appreciate that.

i had things similar in my office where i had to accept staff member groups as my own. -- goof-ups as my own. i would like to address some points in the memorandum to file the date -- i've got time. the memo, the staff may take conclusions about the project that the equity solyndra had in the project was 27% as opposed to what appears to be a standard of 35%. i can't find where 35% is reference. is that one of the conditions precedents in a rule i don't know about? where did the 35% come from? >> in the discussion before that

i was under the impression there would be 35% equity put into the deals as a standard. >> so, this is a cylinder- specific issue that you were under the impression that solyndra said there would be 35% equity? >> going forward and reviewing deals we had expected to see 35% equity put into the deals and that is not what happened. >> it is not solyndra specific but deals, plural. >> yes, you are correct. >> in that regard, where can i find the reference to the standard of 35%? and after that, why is that important that they have 35% equity? >> the number actually comes from, if this was a partially guaranteed loan it would be 80 percent saw it -- it would be 6% equity -- remote -- we rounded

it to 35% as standard and 80% is sort of a guarantee of a federal credit policy that things be partially guaranteed as opposed to fully as reference. this would put the government on an equal basis in terms of risk if it were 35% equity as opposed to 35% equity, fully guaranteed deal as opposed to having a 20% equity and having alone be 80% guaranteed. >> and the risk then it means having unbalanced risk, what is the potential consequences to the government? >> it was felt it was a better risk to government if there was more equity to the deal. >> the gentleman's time is expired. recognize the chairman emeritus, the ranking side, mr. dingell distinguished gentleman from michigan.

>> i have never seen such a big fuss over such a small matter in this committee. i have a couple of questions for our witnesses. gentlemen, the issue here of subordination of the federal guarantee and the guaranteed loans did not occur when the initial transaction took place. it occurred later, after solyndra began to get close to failure. yes or no? >> yes. >> the ninth state has from time to time over history submitted itself to subordination and to a lower treatment of its rights in order to carry out some public policy. is that right? >> i am not personally aware of those transactions but it could be both. >> this document -- these two

documents, these are essentially working papers which are defining what the government should do. is that right? >> i am sorry, which documents? >> the two of which we have had such a splendid for us. >> forgive us, i did not know if we have been privy. >> i would note that the memorandum for the general counsel has some rather interesting remarks. it says here, based on the analysis of the director for fully management division, loan program office doe determined restructuring of borrower obligations are -- to the loan guarantee will yield the highest probable net benefit to the federal government by minimizing the pro-government's potential loss of the guaranteed loan. is that right? yes or no. >> i have not seen the memo. >> but that is in there.

when the government -- the look at how they would save the loan and a business, solyndra, is that right? they felt the approach they took was the best. >> that was the department of energy's view. >> what was the policy impact of the treasury on this? did you second-guess or, up to -- with any corrections to the department of energy or did you just approve the release of the money? >> it was not us -- not our statutory decision to make. >> you just saw to it that the money was correctly and properly released according to the rules and regulation of the treasury department? >> the department of energy certified -- >> if we are going to have a

discussion of this week ought to bring in doe and let them tell us about why it was they came to the conclusions about which we are in this great befuddlement today. and i would simply make a couple of observations. we had developed the technology for new batteries and all kinds of things like that that are being made in china, in correa, in germany, and all kinds of other places. the result of that is that other people are making batteries that essentially were designed over here and windy chevy volt rolled out of the factory brand new out of an american factory with korean batteries which were designed in this country. what we are trying to do is to get back control of the battery

industry because our people in the auto new jersey -- industry -- and i have some familiarity in that endeavor -- have come to the conclusion that if the united states doesn't control this kind of technology, that it is going to see the entire manufacturing industry of automobiles move overseas. it does not seem to me it would be very good sense. so we are trying to develop an industry that would enable us to compete on the production of batteries. congress came to this policy when we passed the legislation we are discussing today and it was our decision we ought to have these kinds of subsidies so we can compete with the germans. now, the germans have as much sunshine over there as does alaska. and yet they are big in this whole business and they are controlling this industry. they and the japanese and

koreans and chinese. and the united states it is little by little being frozen out. and we want to be in this new technology. but we are not seeing ourselves in it because they subsidize and finance the efforts of their industry and we do not. so it is pretty clear we made some mistakes on the matter. and they were big mistakes and it cost us a lot of money. but the back of the matter is, losing control of this technology will cost us a heck of a lot of more money and will cost us industry and jobs, not just of the new technology is where our hope is as a manufacturing nation, but also unfortunately in preserving existing industry. so, mr. chairman, i thank you for your courtesy and i hope your committee will look at this as something where we had a mistake or a bunch of mistakes and set out to try to correct those mistakes. understands everything. first of all, there is no criminal or seriousness behavior

-- behavior. just some dumbness. and unfortunately we find ourselves and opposition where we've got to go forward and try to save these kinds of industries for the benefit of future generations and quite frankly for the help of this one. >> i recognize the gentleman from pennsylvania, mr. murphy, for five minutes. >> thank you german, and appreciate your candor. i also want to assure it is pretty clear republicans support clean energy and in fact we would like to fall through the follow-through on the constant comments that we should clean coal. but the purpose of this hearing is to protect taxpayers from potential and actual corruption, incompetence, violation of the law or ignoring the law. but mr. burner, february 10, 2011, will you send an e-mail to the general counsel and director of department of energy loan

monitoring program. am i correct? >> yes. >> that email is on tab 8 of your binder and you state that treasury learned doe is quote close to the lending is at of adjustments to the guarantee including subordination of doe 's interests. that correct? >> that is correct. >> what did you request -- recommend the department of energy do? >> apps and other authorities we recommended the department of managing both seat -- the part of justice. >> can you describe the context that lead you to ask for the part of justice consultation? >> in my experience with clients agencies, when there is a workout situation potentially developing the department of justice is consulted with. they have statutory authority over such matters. i do need to say some agencies have their own authority so it

is not 100% call every time. >> but that is not your area, it is one -- to push for to make sure things are done correctly and follow the law. >> i did not quite -- >> out of treasury it is something you practice to make sure of the departments of following -- are following the law? >> this was advice to a couple of colleagues on an area of law i was not sure they were aware of. >> or other treasury officials involved in drafting the email? >> yes, sir. i am part of a team and it was a group effort and i was the person transmitted the e-mail. >> why did treasury think it was important to write to the department of energy and ask it to seek justice approval for solyndra restructuring? >> the concern was that the authority to compromise a claim against the government was department of justice, unless they have their own authority. we do not know what their actual authorities are.

that is why we wrote the e-mail to them, was to warn them. >> but you were not legally required to contact the department justice? >> no, sir. >> following federal statute -- it says -- unless otherwise provided by law, when the principal balance of a debt exclusive of interest, penalties, and in this city cost exceeds $100,000 or any higher amounts authorized by the attorney general, authority to accept a compromise rests with the department of justice. are you aware of that? >> aware of the authority -- i am not familiar with the statute. and it certainly seems to fit in with the issue that this exceeds $100,000 in penalties interest and that is sitting cross. responding to the email of the board 2011 asking the justice seek approval of solyndra restructuring and they did it back to? >> and staff stated "there was

gross misunderstanding of the outcome of the restructuring of the solyndra obligation." you talk to doe bought the email. >> correct. but what was the substance of the conversation? >> the primary purpose of the conversation was to make sure doe was aware that they may have an obligation to consult with the department of justice. >> why did they believe it was necessary to talk with the department of justice? >> they believed that in the results of of of the deal, the reorganization, the restructuring, did not compromise of the claim -- compromise the klan, that it did not reach the port where the have to take it to justice. >> did they convince you it was not necessary to go to the department justice? was there discussion convincing in your mind? >> they were in a workout situation. i thought would of been wise for them to go to the department of

justice. >> given all the information you have seen at that time and since then, to your knowledge do you believe today the department and agee should have had department of justice's approval? >> i have said that i believe it would have been wise for them to seek department justice approval. >> given the problems with solyndra has you raised concerns about potential of default for any of loans approved a paid out of the federal financing board? >> at this time, i have not been made aware of any other deals that were in the workout situation. >> mr. chairman, i just wanted to make sure you are aware solyndra told the department and agee needed to restructure the loan in october 2010 and a memo that was and so much debate was not written until january and at no point did the apartment and a divisive legal counsel as the department of justice if it was legal although omb and treasury staffers of an edition of do that. >> thank you, a gentleman from the the ringgit.

i think your point and a distinguished german from michigan. we need the department of energy here. the senior loan officer jonathan silver, of course, has resigned, but doe will be here and i know the secretary of energy chu indicated the senior loan officer jonathan silver was an outstanding loan officer. that in mind, i think a lot of us are very concerned. so, we will have this hearing and with that i recognize the gentleman from massachusetts mr. markey. >> mr. grippo, a few straightforward questions. say you are considering a loan guarantee of the -- company and the price of the product company sells have declined by 63% over the last several years, including the more than 20% since february. without knowing anything else about the company does that sound like a bullet to the high risk or low risk project? and i am sorry, could you restate that? i want to make sure i am

understanding. >> the product that sells dropped 63% in 20 years and 20% since february. a high risk or low risk? >> the price of their product is falling? assuming the costs of the company are not commensurately falling it would have risked to it. >> what it the same company's business model was predicated on demand for its product expanded dramatically the due to fundamental changes in the market people just were not buying the product like everybody thought they would. what does for the increase or reduce the financial risk of the company? >> again, let me ask you to repeat that so i understand the assumptions. >> if it was predicated on demand for its product increasing but today it -- is that because of fundamental changes in the market decreasing would increase or decrease the financial risk? >> if a creditor was making an assumption or had knowledge that demand would increase that would tend to reduce the risk. >> what it also turned out there were better financed

competitors, including ones that already had a large government backed loans guarantee and it the company's technology at some of the problems that technical experts at the department of energy assigned to your loan guaranty op -- application actually ask the company to withdraw it at some point because they did not think it could be commercially viable. would increase or decrease the risk of our hypothetical company defaulted on its loan? >> if i understood, it sounds like it would increase the risk. >> increase the risk. thank you. i am not talking about solyndra. i am talking about the united states enrichment corp. was asked doe for a $2 billion loan guarantee to make fuel for nuclear reactors. almost four times as much as solyndra. members of congress has -- have continued to insist that doe approve it even as the price of uranium has dropped 22% since fukushima melted down.

even as utility after utility had abandoned their plans to build new nuclear reactors. and even after doe awarded another loan guarantee to another company to do the exact same thing. two years ago doe did in fact asked usec to withdraw its application because of the grave concerns doe had with the technology. based on the circumstances i described -- a shrinking customer base, declining prices, intense competition and problematic technology, do you agree that doe should exercise particular caution before we risk billions in tax payer dollars? >> i am certainly say that the department of treasury's input and you would be of that extreme care should be taken in putting the taxpayer at risk or

offering and exported to the taxpayer. >> 13 house republicans including one in this committee wrote the energy secretary in february urging him to quickly approve of this uranium enrichment project. class week speaker boehner stated that a denial of the loan guarantee was tantamount to the obama administration detrain southern ohio. not giving a loan guarantee to a company that has these kinds of obvious financial problems, it seems to me is not a trail of the taxpayer. do you agree with that? >> i prefer not to offer an opinion on that, sir. >> in my opinion, what would be trail is is in the republican budgets, cutting investments in clean energy by 70% next year and 90% over the next three years. solar and wind, that is what

they are targeting. not call and nuclear, wind and solar, the competitors to those industries. that is what it is all about kill the competition does peabody coal or the nuclear injury has feared is finally arriving for wind and solar. keep the loan guarantees for those old industries. that is what is happening on the house floor right now. that is what continues to happen in this committee -- attacks on the clean air act, a tax on wind and solar attacks on the future. this is really a debate about the past versa the future and we can see that in the acid -- insistence the republicans have that loan guarantees be given to a corporation which obviously has a business model which is failing. so, i thank you, mr. chairman. i yield back my time. >> thank you, mr. market. now they general fund taxes is

recognized. >> i listen to what some interest to what he was saying and certainly might be willing to work with him on that concept if he would be willing. and i think that is an important part of our discussion and it certainly something members of this committee should look back. let me also just say that i favor renewals. i have a solar manufacturing company in my district. i am not aware they have got any loan guarantees. i might be wrong. i have a wind turbine manufacturer in my district and i know they have not got loan guarantees and they do a good job and sell a good product. they are a strong competitor. they do compete against imports of foreign manufactured bleeds but -- blades, but let me remind people cheap brazilian blades not stand up as good as the gainesville texas blands.

i always urged people to buy local when they are buying turbine blades. mr. berner you answered dr. murphy's question. he asked if there were any other loan guaranty deals of concern. and your answer was you are not aware of any deals -- >> that is correct. >> did solyndra come to your attention only when it was in a workout situation? was there any point along the line when you were concerned about what was happening to solyndra before it got to the point it was in a workout situation? >> only through the news, sir. >> let me phrase this and a different way. a lot of us concerned -- are concerned because solyndra seemed to create some of its own problems by accelerating -- or department of energy 3 the problems because the solyndra

was pushing because they had a photo op coming up in september of 2009, i believe with the secretary and vice president biden would its going to be brought in on the telecommunications device. you worry when there are time pressures of these loans everything is done correctly. just last week or two weeks ago the end of the fiscal year, there was a big push up having almost one-third of the told a renewable energy budget in the stimulus bill, there was a push to get it through the door relatively quickly and i was worried about that. i wanted this committee to scrutinize that's. but apparently there was not time to do so. are there any of those deals now that are now made and we did the money has gone out the door but they went through rapidly. are there any that give you heartburn? not necessarily because they are in a workout situation but the business model itself reminded of something that might not work. >> i am not exactly sure how to

answer that question, sir. i did review every single project that came through. >> are any of those projects that keep you up at night now? >> no, sir. not this minute. because we don't make the credit decisions on these programs. when we reviewed those we reviewed the term sheets and things of that nature so i don't really have the kind of knowledge. >> but the review of the term sheets, you are absolutely at peace with all the ones that have gone through your office? >> let me offer an answer. we did a review all of the conditional commitments offered and indeed loan guarantees issued. we did offer -- we had time to and did offer comments to the department of energy on all of them. if i could just take a step back

and say this -- in all of these deals, the treasury is looking to do two things and we did these in all seals over last 6 weeks or month. we are looking to make sure that the subsidy that is offered is needed to get the project done -- in other words, could this occurred through the commercial market without government subsidy? and if a subsidy is needed, is it minimize so the taxpayer isn't exposed to more risk than it needs to be? >> let me up for a minute because if there is a change in the environment like mr. markey was talking about, is is something that crosses the threshold that gets your attention? if there is something in the market that changes. the price of silicone, competitors. does any of that enter into your decision? >> we focus on the terms of the editions of the actual loan guarantee but we certainly would look at general market conditions, and if we see something we would offer device. >> something that concerns me

with a lot of these and not part of this discussion but the waxman-markey bill was debated and passed through this committee and then on the floor of a house in june of 2009 contained in a provision providing credits payments to companies that would sell carbon offsets to other companies that were not as green or clean. that never materialized and i worry that some of these projects were developed in an environment where the secretary saw -- or that someone thought these credits would be there these sales would be there to other companies, and that the not materialize because the legislation never got through the senate and never got signed into law. do you take that into account at any level? >> if we are aware of it, we would definitely take into account and if we would analyze it, we will provide input to energy on it. then again i ask one follow-up? you have an inspector general. >> correct. >> has that individual been involved in looking at any of

the activity? >> the inspector general is looking at our activities. >> mr. chairman, can i ask that the report be made available to this committee when it is completed? >> yes, you can ask that. >> thank you. you have been most generous with your time and i appreciate the lightness of the gavel you have had today. >> at this time, we recognize ms. blackburn for five minutes. >> thank you, mr. chairman. and i want to thank both of you for your time and your attention and your patience today. this is an issue that the taxpayers continue to come to us with. they are concerned about what took place with the solyndra process, and that are concerned that this is being repeated. the lack of attention to detail for the loan guarantees are

being repeated in other programs. i do have a couple of questions that i want to ask, and i know we want to finish with you all before we had to vote again. mr. burner, you have been hit with treasury for 28 years. >> that is correct. >> how often does a loan workout situation come before you? and in reading the documents for the hearing today and looking at your e-mail chain that you had with doe and your staffers, the work out language was repeated regularly in a couple of those e-mails. how often does this come before you? >> we don't see worked out very often because they are handled usually by the guaranteeing agencies. for example, we may not even know that a work out has taken place because under the guarantee, the agency may pay us directly and leave of the

original documents in place. >> so basically you are part of the due diligence -- your part of the due diligence is to provide the guidance that is given in the february 10 email that you had to france's and susan -- i guess that would be correct -- stating if there are to be adjustments that may include subordination of a solyndra's loan on then -- then this would be referral to doj for authority. but in this case i was just attempting to offer some experience and advice to a couple of colleagues to and they may or may not have been aware of. >> let me take you through -- let's see, there is another female i have, august 12, 2011 email at 11:51 a.m. where you are asking francis

can we get an update on the status of solyndra today? if so, please call pearl. would you like to comment on that. why was solyndra still on your plate? looking at solyndra. if you were there to offer guidance and then to help them, why would you have re-entered the process in august and saw an update? >> in this case the request for getting an update came from my supervisor, and i think people were starting to hear there were problems with solyndra. >> ok. and a supervisor -- >> mary miller. is she the >> issue treasury employees? >> she is the assistant secretary. but assistant secretary. >> she expressed to you? but i heard from someone else to see of we could get a briefing on solyndra.

a tram that is great. -- >> that is great. i had and the l.a. times article that references a white house meeting in late october, large h. summers then director of national economic council and tim geithner, treasury secretary, expressed concerns the selection process for federal loan guarantees was not rigorous enough and raised the risk of that funds could be going to the wrong companies including ones that didn't need the help. is it fair to say that the problems with this process, with solyndra, had risen to the level of the assistant secretary mary miller and to the secretary himself? >> there were principles and deputies at all of these agencies -- department of energy treasury, office of

management and budget, going up the line to the deputy secretary and secretary, who would periodically review the status of this program. the memo you quoted, one of the issues that was discussed was the amount of subsidy that may be needed in order to carry out some of these projects, which is what i was talking about a little earlier. >> when we look at repayment to the american taxpayers, will fsb structure or will treasury restructured, how that will be repaid, has there been a discussion on that issue? >> in the case of solyndra? >> yes. >> no, that would be an issue of -- for the department of energy and would not be -- >> you all would not be involved. i yield back. >> the gentle lady yells back. the gentle lady from colorado.

>> mr. chairman, i does want to clarify once and for all the unanimous consent we have on these documents. we have unanimous consent that the february 15 2011, legal memo and the draft february 19 2011 legal memo on subordination will be entered into the record with no redaction is. in terms of the financial situation, the addendum, staff has agreed to work together to make sure there is no confidential information proprietary, or other sensitive information, working together to redact whatever they can and they will put that in the record as well. >> that is my recollection -- but i will refer to counsel to agree that i agree. >> mr. chairman -- i think of the ranking member, that they

would redct all was necessary and not what they can't. >> it would be determined in a bipartisan way to be pricey -- proprietary or sensitive business information. >> thank you. >> we are clear? all right. mr. bill bray -- bilbray, five minutes. damascene there are statements about the agenda i just want to make it quite clear that this member does not have an axe to grind with the secretary of energy. i just went on in the record that i think finally we have a secretary of energy who is a scientist, physicists, and not a political operative. so this member's intentions is to get to the facts and to find out how this could have

happened, especially when you have somebody like secretary chu running a department and see what appears to have happened indicates to me that the biggest problem is that it appears that politics and prejudice and bad policy created a situation that could have very possibly cross the line later into a legal item that we would clarify obviously in the coming weeks. budgets for the record, i just don't want anybody to think this member has an ax to grind against the secretary. i hope to god that this does not cause him to have to do what -- did, which is to basically step aside and step out because of his problems. so everybody understands what this member comes from. i think the secretary has the possibility of finally fulfilling the goals of the energy department by creating an energy opportunity rather than

continuing to allow it to dwindle. mr. grippo, i have questions specifically about doe loan guarantees that were just given out under the stimulus deadline on the 30th. in fact, on the day of the deadline, its closing $4.7 billion of loans were given the right on the last day. was the treasury consulted about each of these deals before the close? >> yes, we were -- in some cases well before the closing. >> do you believe the treasury had adequate time to consult on all of these items? >> yes. >> these deals? >> yes. >> your review -- the you believe the financial model for these deals was right? the thing they were sound? -- do you think they were sound? >> let me be clear about how i

answer that because we do not do all the due diligence the department of energy does. we are not privy to all of the background information. >> obviously they did not do all the due diligence the taxpayer would like, either. >> so, we are not making a credit decision. we are not determining whether this is an appropriate risk and whether a loan should go forward. we are commenting on the terms and conditions of a loan guarantee. what should the interest rate be, what should the duration of the loan they. so, we did not have insider providing comments on the details of the actual financial model. >> let's look at it from the holistic point of view. what do you think about the overall health of the doe's loan guaranty portfolio at this time? >> it is difficult for us to judge without all the information, but i think the best answer i could give is that it is too early to tell how the

overall portfolio will perform. and it may take some time. there are 30-some of transactions in the portfolio. we obviously have been talking about one of 30. we are not aware that others are having problems. and so, it will take time to watch the portfolio perform. >> if you were my stockbroker and telling maine -- gave me that, i would not be really enthusiastic about putting more investment into it until i see how this thing shakes out. is that a fair perception from an investor point of view? >> it would not be. i am not implying that we perceive there are other problems -- >> but you still stated we need to see how it works out. >> many of these deals just closed a few weeks ago and obviously you have to wait and see them perform. >> the memorandum about the

conditions in 2009 -- treasury expressed concerns about there was not an of equity in the deal. basically concerns there was not enough skin and the game for some of these guys. -- skin in the game for some of these guys. under the 17 05 portfolio do you think that there was enough skin in the game in this instance with solyndra? >> i did not actually recall the details myself of that analysis. but it would not be uncommon for us to comment on the amount of skin in the game and to argue

for other investors to have more skin in the game to protect the taxpayer. >> basically everything was done last week basically. we don't know how much of a risk it is. we have to wait and see how it evolves. but i think it is fair. >> i yield back. >> dr. gingrey, you are recognized. >> mr. grippo and mr. burner, thank you for testifying from the department of treasury and thank you for your patience. some of these questions may have already been asked. i had to miss some of this to go to an interview. first of all, mr. berner, and your role as chief of -- as chief financial officer of this federal -- are you involved in restructuring a loan guarantees before it either in or out of government? >> only peripherally. >> let me ask you this -- maybe it is a bit hypothetical, but in cases where the terms of a loan guarantee or changed or restructured by other agencies, have those agencies saw the approval of the department

justice to your knowledge? >> if they don't have their own authority, then they would seek approval of department of justice. if they have their own authority, they would not. >> let me ask mr. grippo because what you just said is the crux of the matter. is that the reason, mr. grippo in your opinion, that the department of treasury said to the department of energy -- look, there is a tab here, a red flag, and it is our strong allies you consult the department of justice before going ahead with this restructuring? >> we did not know what all the department of energy's authorities were. we did not even know the details of the restructuring. we have heard there would be a restructuring and it seems like a good advice in our consultant role to tell them to seek -- to

go to the department of justice. >> and i commend you for that. i think you are absolutely correct. either one of you -- why did you think the doe was so hesitant to get doj approval to get more security, cover their backs? why do you think they didn't do that? >> i don't have an answer. >> mr. burner from any opinion on that? >> i am sure they have their reasons. i am not sure they had a legal theory on this. >> well if department of energy was so confident in their legal analysis -- that subordination was permitted, why not go to the department of justice system, your base, just to get a little back up, cya rather than cyb. agencies typically seek

department of justice approval for loans. to restructuring. you said you are not really sure of that. is that your answer, that you don't know -- mr. grippo, i did not ask you specifically. other agencies, do they typically seek department of justice approval for loan guaranty restructuring? >> i don't has visited knowledge about other loan guarantees but i am generally familiar of what the loan statute says and unless the agency has its own authority, the procedure is to talk to the department of justice. and that is what we were doing. we were making a procedural call and say you can't make a judgment about what is going on, we are not making a legal opinion. >> i am not putting words in your mouth. i do not want to do that. but it sounds like to me you were strongly suggesting to them since they did not have the statutory authority -- i will refer back to the energy policy act of 2005 under the title 17,

incentives for innovative technology section 17 02, terms and conditions, paragraph d -- subordination. you heard this several times from members on our side of the aisle. the obligation -- that is of loan -- should be subject to the condition that the obligation, the loan, is not sobor in it to other financing. that was your concern, was it not? >> we were not interpreting that statute. we were recognizing it and offered the advice. >> it does not required -- i think my first great-grandson could pretty much interpret that. it does not take a rocket scientist. that is as plain as the nose on your face and they literally ignored the warnings and went ahead with this. and the results of course, is

that the taxpayer is in a subordinate position to $75 million of in this -- additional investment. and what when mr. silva was here we asked in these questions and we have and video and audio. it is clear what he said to us. look, we were thinking in our mind that of the taxpayer would come out better if we found a way to circumvent and break the law. that is what it is all about. mr. chairman i yield back. >> thank you. at this time we will recognize the gentleman from louisiana. >> thank you, mr. chairman. i appreciate the witnesses being four answer questions as it relates to department of treasury's role in the solyndra scandal. as i look through the e-mails starting with the february 10 email of 2011, mr. burner.

that is when you send an e-mail over to the department of energy expressing your concern about the restructuring. the lakers sent an e-mail back. i think your original email was on february 10 and then later that day you got the mail that says it could you give me a call to discuss. this would be email from the department of energy's legal counsel where they ask you to discuss this. there is no e-mail chain. who are all the people involved in discussions that you had about his concern that you were raising? was it just a legal counsel staff over at the department of an engine? just on phone calls or conversations -- but who were the people -- >> on the phone call itself? >> in general. when you are raising concerns -- i think you were getting your

information on the office of management and budget says there was possibly a subordination coming down and buy your legal counsel that a review they felt it was illegal, a violation of the statute, you cited in your feb. send e-mail. obviously you are having other conversation that treasury but also having other conversations with people outside as treasury -- what the department manager or bring the white house. who were the other people involved in conversations that are not included in the email documents we have? >> members of my staff. we heard from some omb staff this would be an issue. other people at the treasury department and staff lawyers at the office of general counsel at treasury. >> when you get outside of treasury, clearly as you were in mailing with the department of energy about the concerns expressed february 10 and you actually cited a number of statutes that i am sure your

legal counsel had given you the statute to site. but he specifically cited some statutes and went further to discuss. your concerns about subordination the -- it did not meet legal muster and that is what you said go consult department of justice. >> we did not make a judgment about what they were doing because we did not know -- >> you are hearing this from omb, baby subordinating the taxpayer and you cited a statute is saying you can't do it basically, you don't have the legal authority and that is why you need to consult department of justice -- reading from your e-mail -- unless other authorities exist, the statute it rests with doj and authority to accept compromise and acclaim of the youth of this government in those instances where the principal balance of the debt exceeds $100,000. you said you cannot suborning the taxpayer unless he got approval from the department of justice.

>> we were specific on the fact they should go to the department of justice. >> the next e-mail you got back was, could you call me, could you give me a call to discuss -- thanks. that is from the department of energy possibly go council. zero all were involved in those discussions? not e-mails, but actual discussant -- discussions? was anybody from the white house and bob? >> i had no -- from the white house. >> who else from department of energy? >> there were four of us on the phone calls that had the discussion. and member of my staff the director of portfolio management and susan richardson from -- >> there was a gap from the february 11 email and the next email we have is august 12. it's pretty substantive gap.

in those e-mails we've got the folks over at doe and some other people at department of treasury getting involved in this and in fact we've got your superior at the part of treasury, mary miller, he said she was the assistant secretary? >> because mary miller -- and i may be on a call tomorrow about but solyndra -- we told doe we need to consult with the department of justice. this is mary miller, above you expressing concerns. at any point -- and to refers to in the later email a july 2010 concern that the department of treasury raised with an edgy. any step of the way was there a feeling that they are not going to comply with the law? you say it in your e-mails. they are not following about getting justice involved. why don't you all get justice

and bald? another $4.7 billion that went out the door a few weeks ago. >> i want to answer that because this refers to a variety of e- mails here. and for a question for the committee. -- and important question for the committee. it is not our role to interpret department of energy statutes and and -- authorities. in no case will be doing that. we were never rendering legal judgment as to whether they were complying -- >> you were telling them they should consult -- >> we were identifying an issue. we were not answering the question or drawing legal conclusions. >> you are citing specific statutes. >> we are citing statutes -- >> if you are concerned -- please, don't comply with the law and if you hear back them -- >> it is really not the role of

the department of treasury to manage the -- >> you are cutting the taxpayer checks. >> these are all the part of an anti authorities and it would be highly unusual for us to assert ourselves in that way in management of another agency's program. >> mr. chairman, i do have a point of information. i did ask -- and i got an answer from the head of loan program at the last hearing under oath. he said he would get this whole committee the names of all of the people involved in the chain to subordinate the taxpayer -- from the white house on down. i asked him under oath and he said he would give me the information, under oath. he has resigned. i requested to the legal counsel or somebody on staff -- will we still be able to get that information? it is critical. >> it will be added to the questions. for the record. >> thank you. yield back. >> gentleman from, right.

mr. garner. >> thank you for the witnesses for spending time with us today. a couple of questions and to follow up with what mr. scalise had said. you identify your roles at the treasury department are two fold -- both as a lender as guns -- and consultant. as a lender, don't you have responsibility to referred this to doj. >> we actually do not. if you look at the statutes -- >> you consider yourself a lender. >> it is processing a loan but the department of energy is making the credit decision. >> as a lender, you are the federal financing bank, don't you have a fiduciary obligation as a lender to the people of this country? >> we certainly in our consul take the roll have a responsibility to raise these issues and questions -- >> it includes going to the apartment just as and saying we

are afraid. i think that one will give you made the statement you had said on things that raise issues of compromising a claim of the federal government. >> in that instance, our advice was to refer the matter to the department of justice. >> why wouldn't you go to the department of justice? >> treasury department? >> because it is not our statute. we don't have all the facts. >> why didn't you have the facts? >> it is not our program. to be clear about our role -- >> but you are the lender and you call yourself a lender. >> the federal financing bank did issue a loan but to be very clear about the responsibilities -- it is the guarantor agency, department of agency, assuming 100% guarantee of the law own is deciding whether to make, they are responsible for monitoring it, they are

responsible for all of the financial aspects of that credit risk. it is not the treasury's this -- responsibility to monitor that and it indeed we would not have the information to do so. >> when you call yourself a lender as the federal financing bank, in this particular it is is because you gave 100% of the money -- no bank as an intermediary. i would like a list of the other loan guarantees you are not actually guaranteeing but paying 100% of the money, cutting out the bank itself. other instances where i would appreciate that for the record. i do not understand why you would not ask those questions. i refer to tab of three in your binder from an e-mail dated july 26th between treasury omb and doe staff. it details the monitoring plan.

why did this conversation happened in the first place? >> i was not a party to this e- mail. this took place in july 2010 in the most complete answer i can give you is that various agencies predominantly doe were having weekly discussions on the efforts to monitor the portfolio. >> were you concerned about dia wii's monitoring of -- doe's monitoring of solyndra. >> we did not have any direct contact with them. >> to run not concerned about their monitoring? >> as a general matter we felt the portfolio should be properly monitor but we did not have specific information about it. >> this took place shortly after they have pulled back their ipo

is that correct? >> i believe so. >> was three months after the auditors and doubted their ability to move forward. it appears that the omb and treasury are asking for a number of pieces that would indicate their financial health. is that correct? current market prices, costs data. why were you asking? >> as a consultant to the department of energy under the statute is to be helpful wherever we can. we felt we had experience with federal credit policy and corporate financing that could be of use. this is in the mouth from the omb to the department of energy and we contributed to this because we felt we had something that would add. >> were you concerned with this loan monitoring?

because you ask for a lot of information. financial statements, actual performance numbers, monthly variance reports market production, credit committee papers. it just goes on and on. >> it was from the department of management and budget to the treasury. we did contribute to it but it was about the monitoring of the portfolio. >> were you concerned? >> i do not have any information that would lead me to have additional concerns. >> those may be submitted for the record. >> you sent an e-mail to francis

and susan, i believe susan richardson. is that correct? >> csi. >> can you pronouncer last name for me? -- pronounce her last name/ >> i can try. >> you wrote this e-mail to both of them want february 10th in got a message back saying there had been a gross misunderstanding. is that correct? >> yes. >> then you had nlm be circular -- had an omb circular, and i cannot keep track of where you currently are. >> there is an excerpt of from

the circular that susan cent. >> that says that work is big options and -- work is being optioned just short of default and that it is not a modification. is that correct? >> yes. at the time you receive the that you're not aware of the legal memo that doe had in draft form? you're not aware of that legal memorandum, correct? notwithstanding the fact that you were getting a copy of a circular from france as that

said -- "these are offering option short of default." she was saying they did not think there were modifying the mloan or doing anything that would necessitate meeting with the wall. we do not believe we're making that change that would compromise the taxpayers position. is that correct? >> as i recall, that is what they were saying it. >> they send that on a february 11th and these memos are dated january 19th. as i pointed out earlier the first line of the third paragraph, and it you know nothing about this, but a default relating to a financial requirement has occurred in relationship to solyndra.

is there any way in your mind that france's would not have known that a legal opinion had been rendered that there was a default but now they are trying to fix it when she is trying to tell you these are offering options short of default? >> i cannot comment on that. >> further you know peter bieger? >> he is a staff attorney at the treasury department. >> so he works with you all. subsequent to that, are you aware that he stated in a memo that claimed a comprehensive -- compromises that included loan workout?

august 17th memo, authorities to compromise climbs and the government. >> it is the first time i have seen the memo but it does say that. >> yes it does. i would have to say to you based on the evidence that you now know that there was a subordination of $75 million in the restructuring the man had agreed to forebear payments for three years. we do not agree that sounds like a substantial change and of the regulations regarding this loan guarantee program? >> substantial change? it was certainly a change. whether it is substantial -- >> i am asking for your opinion. >> that is something the department of energy would have to answer being their statute and indeed their program. they would not have offered any

legal interpretation. it is citing the statutes only. >> took they had agreed to forebear the long, it would not matter? is that what you are saying? >> it is not the role of the treasury institutionally to render that judgment. >> so what does it the point of having you in the loop if you have no authority. i yield back. >> i ask unanimous consent to be able to mass question since he is not a member of this committee. hearing none, you're recognized. >> thank you for granting consent. i will try to be brief. i appreciate you being here today. this is the third time we have had people, and we still do not have anyone taking a responsibility with two senior solyndra executives and today we

hear a lot of, "that is not mine." job i hope you can appreciate the frustration is we try to get people to answer questions about these very important matters. let me start with you. i want to go back to the beginning to an email for march 19th. the review board had approved a conditional improvement in view expressed concerns on march 19th. that seems backwards to me. you talk about your role --the e-mail expressing 15 concerns the treasury department had? and the conditional commitment happened two days earlier. >> i am not aware of when this happened. >> if it was, would you find it odd that your comments were unveiled after the date of the conditional review?

>> there really cannot say. >> assume the fact that march 17th was the date the conditional review had been approved. would you find it odd you were still making a comment after that? >> they do not know when the initial commitment was offered. >> that is not what i asked. >> i understand. we had the opportunity to provide this input from my understanding. >> let me turn more toward the end. what is your role today now that this is in bankruptcy try to collect this money on behalf of the taxpayer? >> we have no role in collection of the taxpayer. doe is paying us and it is my understanding that they are in bankruptcy court at this point. >> has the deal we paid you? >> they have and will pay us as is due according to the

guarantee. we receive regular payments and at some point i assume it will be extinguished by full payment. >> one is the next payment due? >> i do not have that information available. >> that have not missed a payment? >> no, sir. >> i yield back the balance of my time. >> the gentleman yields back in there are no other members wishing to ask questions. i ask unanimous consent that the contents of the document binder be introduced into the record and authorize staff to make appropriate reductions. without objections, the document will be entered without.

at this time we thank you for your patience, for your dedication and for your testimony here today. the committee rules provide that members have 10 days to submit additional questions for the record to the witnesses. there has already been one member suggesting there will be additional questions submitted to you. we do appreciate your time and we are adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> of the u.s. house is not in

session this week to allow members time to work in their home districts. the senate gabbled in at 2:00 and will begin debating at 4:00 on agricultural commerce, justice, transportation, and hud spending. harry reid has announced he will introduce the first piece of the president's bordered $47 billion john bell today. it was defeated in the senate last week and now the president is trying to break this up into smaller pieces. you can see live coverage on our companion network, c-span2. a forum looking at the influence of congress on foreign policy taking place at the woodrow wilson international center and we will bring that to you live at 4:00 p.m. eastern. >> we should not shy away from

or be afraid of cloud computing. it is a part of the advanced developments of the computer world. >> the problem we face today is that there are no standards to quickly move it one -- move from one cloud to another. >> tonight, the future of cloud computing for the government with the chairman of the homeland security subcommittee on cyber security, dan lundgren, and john curran on c-span2. >> because i am a businessman of which incidentally i am very proud. those in opposition have attempted to picture me as an opponent of liberalism, but i was a liberal before many of

them had heard the word. another roosevelt adopted and distorted the words. >> he switched in 1940, wendell willkie sought and ran fro the republican ticket. he became the foreign ambassador for his former opponent roosevelt. he is one of the men featured in "the contenders." friday at 8:00 p.m. eastern. middle and high school students, it is time to get those cameras rolling for the student's cam video competition. this year's theme -- the constitution and eu. the deadline is january 20th. you could win the grand prize.

for complete details studentcam.org. >> a live look at congress and foreign policy coming up at 4:00. until then, in discussion about competitive races in the senate from today's "washington journal." >> republicans picked up six seats getting them to 47, letting democrats keep their majority. here is the thing. republicans need four seats to win the majority, but what is working against them are the

numbers. democrats have to defend 23 of those seats. they are really playing defense on this cycle. they are out to protect their majority. it is going to be tough. host: we will go 3 number of the tossup races to route this segment to try and get a feel for what is happening in those particular states, who the players are, and what the chances are for a victory on either side. we have a chart here. we want to start with the far west and we will look at hawaii massachusetts, missouri, montana, and nebraska. what is the situation in hawaii? >> is the newest entrant on our tossup list of states we think are too close to call.

democrats have their primary to contend with. we think this will be a good race. she has come within 4000 votes of winning the last three or four. we think this to be a competitive race despite being a heavily democratic state. host: it is not a state people think about that often except during the winter when they're trying to get out of the northeast. this could be an important race for democrats in the senate. >> it could be. if they cannot hold hawaii, it does not bode well for their majority. this is also a symbolic race for them. it is the president's home state in some ways.

he is very popular still and leading the ballot making it harder for republicans, without a doubt. this is a race they did not count on having. >> the next step on the list is massachusetts. senator scott brown is the incumbent and it looks like his likely opponent will be elizabeth warren. guest: it will be a collection of epic battles. this is one of them. scott brown elected in a special election in 2010 but was the leading edge of what became this republican wave. now he has to run in a general election on a ballot that again, president obama lobbying

as popular as you think, but the numbers are still good. the democrats have come up with a strong opponent in elizabeth warren is spent the last few years in washington on financial services reform. really, most of her years as a professor in harvard. this will be a battle between i believe and the state's schools. that is the race republicans would like and democrats are trying very hard to highlight was with warrants upbringing, working-class family in oklahoma on, a working mother, things to take her out of the ivy league and get her going.

it is going to be a wonderful race. it is going to go down to the wire, and a question. host: that massachusetts seat was long time held by senator kennedy. is this the state looking at looking republican for a little while, kicking the tires. guest: democrats will have to work for this. democrats will accuse him of telling the republican line but there are lots of instances where they have been burdened. voters seem to appreciate the bipartisan approach given what

they have been watching over the last few months. host: in missouri senator mack kaska look for -- senator mccaskill facing competition. talk to us about what is going on in missouri. guest: it is a real swing state. it is really started to move a little bit more towards republicans. mccaskill was elected in 2006 in a very good year for democrats. president obama loss this state two years later.

i'm not sure you'll see a lot of ticket voters. mccaskill has her work cut out with her. she had a problem with an airplane that she owned in did not play taxes on for quite a while. it ended up costing your about $400,000. working in her favor right now is the republican primary. you have the former state senator and a newcomer who ran a company until recently that ran germx. republicans look to him as a serious candidate because he can put some of his money in if he needs to come but there's something about not being a part

of washington that is very appealing to voters this cycle. host: in montana a democratic senator whose main opposition looks like it will be coming from rep rehberg. guest: that will be another epic battle. elected in 2006 defeated an incumbent that was hobbled by some ethics questions. he promised to be a different kind of democrat and republican contend he has been a standard issue democrat. one reason this is an epic battle is because rehberg represents the entire state so you have two state wide candidates running against each other.

it will really be a fight. host: nebraska. senator ben nelson looks like he has some competition coming from the current state treasurer. guest: the most of vulnerable democratic incumbent trailing his potential opponents. it is hard to be a democrat in nebraska even harder in 2012. they have a three-way primary. he has run for the seat twice before and has lost to ben nelson twice before. he will certainly give nelson a raise.

democrats have aired $600,000 worth of ads which is a sign of how much working to do in this race. they are all in. host: in the five states we have talked about -- the four states, massachusetts, nebraska, montana, misery -- missouri, on this map, they are all in green indicating a tossup. it would not surprise you that any of these incumbents could lose it in 2012? guest: not at all. they do not split. one party tends to win more. you have incumbents in this category, so it would not

surprise me to see a few of them fall. host: we're talking with jennifer duffy from the cook political report about campaign 2012 and the top senate races. if you would like to be involved in the conversation -- host: this includes nevada, new mexico, and wisconsin. these are spread all over the map of.

first, we want to go to the phones and take our first caller on our line for independents out of richmond, virginia. caller: i would want to talk about the senate race with george allen. i know there is no way he can win and the reason is that they're going by the usual statistics but twice as many numbers as blacks. with barack obama being on the ticket, there is no way george allen can win because virginia is 8% black.

host: tell us about this race in virginia, a green state indicating a tossup. guest: here we have two candidates, the democrats, and the likely person, george allen. the caller has a point in that this is a presidential year and virginia will be on the top of the democrat's target list. he carried it in 2008. i take issue with the fact about the african american vote being as high. right now polls say no.

they are disappointed in the president and what he's done. unemployment within african- americans is above 16%. it will be like this until next november. host: burlington, mass., on our line for republicans. caller: thank you. i question on the senatorial race. my specific question is in 2012, what is the breakdown? is it something like 20 democrats, 13 republicans, something like that? guest: 23 democrats and

republicans. -- and 10 republicans. host: will be looking at senator brown, senator warren, or someone else? caller: senator brown without a doubt. i am a solid republican. host: next caller. caller: my comment is about the elections themselves. we saw a large amount of seed changing and then we had a dustup about nothing getting done in washington with everything being done.

they expect things to get done right now. their problems are media. all the other collateral the nuances of elections are fine to look at, but people are truly want something done and i am not sure that the people who run actually convey that they can and will do something. guest: americans are getting frustrated with washington's inability to get things done. congressional approval rating is 13% which pretty much tells the story that they do not think the country is headed in the right direction. we do see a lot of challengers

out there right now talking about the need to cut some of this into getting something done. i think he will seem a lot more campaigning this way. i have heard some normally die hard incumbents talking like that but what they really need to do is get the leadership of both parties to understand that it is time to put the political battle to decide. host: democratic column from bowie, md. caller: i am a senior and i talk to seniors and most of them are going to be voting for obama and democrats because they are worried about their medicare and social security. they know that the democrats will help protect it.

the cooks do not poll black people or anybody of color, so i think she has it skewed. i think the democrats will get back in and be in the majority. host: how you know about who the cook a local people talk to? caller: someone called in and asked on your show and they said they did not poll blacks and spanish people. guest: we don't poll anybody. we do not do our own polling however we spend time going through every national poll of credibility which includes

polling of just blacks, just seniors, just hispanics to incorporate that data. we do not poll anybody. host: let's talk about the race in nevada. we have another tossup. tell us about that race there. guest: nevada is becoming more and more of a swing state. it went for obama in 2008. in 2010, and elected a republican governor yet reelected harry reid to the senate. so there is an appointed senator serving in the house and intended to run for the senate

and is running for a full term in his right. again, just another terrific battle that will be close all the way through. they both have a lot to bring to the table. secretary of state before elected to the house, so he is well known. host: he has pulled in just under $670,000 and in the same amount of time berkeley has raised over $1 million. is there something we should see from that?

guest: here is something about money. we pay attention to what can did it to raise, how much they spend, and on what. these outside groups like american crossroads, senate majority fund, they are putting so much into these races that can did fundraising is becoming secondary. there will not be enough outside money in that race. host: back to the phones. i believe that is mississippi? steve? are you there? i think that is john in panama

city. are you there? go ahead. caller: i have more of a comment. i really wished just wants there would be a good independent candidate for president that could work with both sides of the aisle. we have never had that choice. host: we are talking about senate races. anything you want to talk about regarding the senate race? caller: let them have a chance wants to have a true majority see what they can do. i think he would have been reelected with no problem if he

would have focused on jobs as the most important thing. host: how much will jobs play as an issue? guest: huge. the one thing that raises to the top of every voter's list of concerns. there is a senate race in florida of with the potential to get competitive. republicans have a primary, but that does have the potential to be a tossup.

host: here is one democrat running and we could also seek former rep heather wilson who represented the state for about 11 years as a republican getting back into politics and running for the senate. tell us about this new mexico race. guest: both sides of going to have competitive primaries because he is retiring. the former mayor of albuquerque being challenged by the state treasurer. on the republican side, heather wilson being challenged by john sanchez the state lieutenant governor. it will be a very good race.

this is a place where obama did very well in 2008 but it has sunk. let's see who comes out of the primaries. right now what looks pretty close. host: myrtle, mississippi you are on with "washington journal." caller: one quick question that concerns if she believes that there may be any third party candidates that will creep into the senatorial elections to try to split votes for either party. guest: it has happened in the past. it is hard to run as a third- party candidate without any

resources. i have not seen a serious independent the merger in any race yet. some of them get in late in the game out of sheer discussed, but it is certainly worth watching in these tossups seats that will be so close. host: from ohio on the line for democrats. caller: nice to speak with ms. duffy. i want you to comment possibly on the ohio senate race with brown and any potential s who run. i think mccaskill's race is on this year. i do not think the new mexico race will be as competitive with

heather wilson. that lt. gov. that they have is a pretty strong fundraiser and i just want to hear your comments on all of that. guest: while ohio is not on the list of tossups today i expect it will get there eventually. sherrod brown elected in 2006 will probably face the state treasurer, josh mendel. he's about 33 years old and is a tireless campaigner. i think he has raised close to $4 million since he of gotten in this race. think this will be erase a real contrasts.

it will be one of biography like someone who has been in service most of his life and that his young age has done two tours in iraq and was elected treasurer in 2010. this has the makings of a good race. we talked about missouri a little bit but i do think mccaskill has a race because the nature of the state is starting to tilt more republican and it is a state obama did not win in 2008. new mexico, let's see who comes out of both of these primaries. sanchez has raised some money, but one thing he brings to the table is putting in some of his own money. host: we talked a little bit

about the nebraska race. here is an ad put out by ben nelson's campaign and some questions about how this whole ad campaign came to be. we will show this and get your response. >> this is an excuse. >> they do not get it. they put politics ahead of what is best for the country. we need to balance the budget and not on the backs of senior citizens. bring our troops home with dignity. invest in american jobs and american future. i am ben nelson and i approve this message because we need to stop paying -- playing politics and find common sense solutions. host: it was by the democratic state national committee but it

is a straight up "vote for me" ad. guest: and it is creating controversy inside political circles. that is being paid for by the state democratic party in nebraska. they got the money to pay part from the democratic senatorial campaign committee in washington. the loss as the political parties can spend a coordinated amount of money on behalf of their candidate in any given state done by population, so every state is different. what democrats are saying is that this is that a campaign ad. this is an issue at. this is potentially big implications for campaign finance and the way parties to spend money.

this really does have a lot of implications in every state and for every party. host: next call on the republican from iowa. caller: new jersey actually. thank you for taking my call. i am commenting on a collar a few calls before talking about how seniors will vote for obama because we do not want to lose our social security. if we change social security it will not be currently but for the yougnernger people. the idea about sending $1 billion on a campaign smells of buying an eelction.

he cannot stand on his record. i'm so disappointed. do what is best for the country and not your own self aggrandizement. i'm disgusted. guest: i will agree on social security medicare, and it is true. whatever changes that are made to keep these programs healthy it will not impact current beneficiaries. if you're going to fix social security and probably means raising the retirement age as we are working longer and living longer anyways. it may be making younger workers put more into the system than they do. the average worker that retires will have put in 100,000 into

medicare but will take up $300,000 in benefits. that is not a sustainable program. as far as obama getting reelected, we shall see. it will be an interesting race. caller: hellow, jennifer. host: we're running out of time. caller: let me give a brief comment. i believe this election will be a referendum on the senate. one of the senators said his job is to make sure this is a one- term president.

what they doing to help the american people? guest: there were comments made by mitch mcconnell about what he thought he would like to see. it talks about how politicized this has become. the democrats worked very hard to diminish president bush and that is part of the issue we're dealing with, the world's

greatest deliberative body that has got an unbelievably political in its constant war of one upmanship. it is less about getting legislation through. the parties would say that is not true. guess what? the best legislation that has ever come out of the senate is one both parties do not like. host: those trying to hold on to their seats and try to unseat the democrats, how much of this will be involving the president? how many will try to separate themselves from the president? >> it depends where you live. i think someone like john tester

will really separate himself from the president. mccaskill, when the president was in town last, shady previous appointment and did not join him on stage. -- she had a previous appointment. elizabeth warren is more likely to embrace the president. it depends where you live. host: next up bill in new jersey. you're on "washington journal." caller: yes? i have been a democrat all my life and it seems like every single time these programs happen -- and i appreciate c-span but these democrats need

to get off their duff and vote. they say the president is not doing enough for us and minorities complaining about what is happening need to go out there in vote. in the last midterm election, people sat on their hadns andnds and republicans got in. host: is there one side that will have the advantage? 9guest: we don't know that yet. in 2008, obama benefited from the "surge voters," 18-26 voting for the first time market not participate.

part of his re-election is making sure. the caller is right. you lose your right complain if you do not vote. host: last call from seattle washington. you are on "washington journal." caller: good morning. how are you? a comment first. my comment deals with the occupiers out there. there is a book that they're called "the starfish and the spider" talking about later this organization and i think the occupiers are following that path. what type of impact do you think occupy wall street will have on the 2012 races? do you believe that the

occupiers, if they continue to grow momentum, will have some impact on the policies within congress? guest: it is a group that sort of is lacking leadership, but it is also lacking a cohesive agenda. i have a press release that they will be occupying in california today and they did not say if they would be bringing their own golf clubs to play nine. i think they are giving voice to voter frustration, but unless they do get organized and start backing candidates against democratic incumbents in primaries, and i do not think of their impact will be felt in the election at all. i think the democratic elected officials are sort of encouraged

by their local demonstrations, but it did not see any changing policies either. host: jennifer duffy, thank you for coming on to talk to us about these senate races. >> coming up, live coverage from the woodrow wilson center on the role of congress and foreign policy. among the speakers is a former senator from new hampshire. some of the audiences gathering. we will have this for you in a few minutes scheduling to start at 4:00 p.m. eastern. >> because i am a businessman of which incidentally i am very proud, and was formally connected with a large company the opposition has attempted to picture me as an opponent of liberalism. i was a liberal before many of those men heard the word and i fought for the reforms of

theodore roosevelt and woodrow wilson before another roosevelt adopted and distorted the word "liberal." >> he was a member of the democratic party for 20 years switching in 1940 when wendell willkie sought and won the republican nomination for president. he left his mark speaking up for civil rights. wendell willkie is one of the 14 men featured in the new weekly series "the contenders" live from indiana friday night at 8:00 p.m. eastern. >> i do not object to an investigation into solyndra. based on the investigation, i do not see evidence of wrongdoing, just a bad investment decision. i do not want to minimize it but it was a bad decision as far as we noted. >> on friday, a house oversight

investigation committee continued their probe on the government's loan guarantee to solyndra, a solar manufacturer that laid-off 1100 workers filing for bankruptcy. watch the event as well as testimony from officials and a 2010 presidential visit to solyndra in the video library. washington, your way. >> president obama began a three-day bus tour to date throughout north carolina and virginia. he spoke in asheville, n.c., and you can see that starting at 8:00 p.m. eastern on c-span. at 5:00 p.m. eastern, the president makes remarks at a high school in north carolina. that will be live on our website, c-span.org. in the senate, spending legislation and a judicial nominations scheduled for today. president obama has nominated a

magistrate judge to the u.s. district court for western pennsylvania and a spending measure covering agriculture, just as, transportation, and hud. harry he will release the jobs proposal, to get teachers and first responders back to work. the senate is always live on c- span to. we are going to the woodrow wilson center for discussion on foreign policy. we will hear from academics and former senator john sununu. this is about two hours.

this discussion on the world congress an influencing foreign policy is getting underway right now. >> good afternoon and welcome to the international center for scholars. we will suspend my introductions. before i introduce her i would like to invite to the podium,

and there cosponsoring today's events and we're happy to have them here. if you could just say a few words. the apologies and partisanship in the united states senate. francis, the podium is yours. [applause] >> thank you very much to the congress project at the woodrow wilson difference. we're proud to co-sponsor this event, and we thank the panelists for what i am certain will be an interesting discussion. there has been an ongoing debate about the extent and nature over foreign policy.

with an ineffectual congress and the mushrooming of classifications to control policy information. what remains is the constitutional system of checks and balances were few members of congress will be informed about these issues. the presidency is naturally superior in this area and well- suited to respond to the crisis such as those that developed during the cold war and the post 9/11 environment. the u.s. congress is not in good position to lead. this is the way congress is able to remain influential in this area.

this is the executive branch oversight. even while the presidency has come to dominate the formal authority. in the environment where it is difficult for the government and the president to work together, what role should congress play with foreign policy. and the divide on the central issues and questions. [applause] >> join me in welcoming the president and ceo of the woodrow wilson center, jane harmon. >> i don't know why i am here. i am rea recovering politician.

i can look back at the 9- years iserved in congress. this is 119 dog years. the different wars that we got into the different ways that they were authorized from bosnia in 1995, to iraq and afghanistan in reverse order and more recently, libya when i was no longer there. each time, the role of congress seemed to be different. it is different approach this subject because the constitution has not changed all of these years and is the job of congress to declare war. i have come to listen up.

there are smart people on this panel, and to say to everyone that john sununu and i served together on the house commerce committee a thousand years ago when there was some bipartisanship. most of you cannot remember that this was ever true. he and i worked together then and we have worked since then, and the woodrow wilson center, which i am honored it to lead is absolutely committed, at least here in this one wing of the reagan building to fostering thoughtful conversation, respectful interaction and bipartisan solutions to tough problems. one of them is the role that congress should play, and we confront very different challenges aryan foreign

policy and i want to thank you for doing this panel and give him an actual hog and welcome the audience. >> thank you. today's program is the first in a series of programs in the coming academic year on congress and global challenges. we thought it would be advisable to begin the series with the overview of the subject by looking at congress and foreign policy generally, and the influence of congress on foreign policy. i think that the state department and others in foreign policy are feeling that staying and of the direction where

things are going in the budget. many people think that foreign policy is the prerogative of the president and are annoyed that congress would interfere with those prerogatives. and that is what woodrow wilson thought when he felt -- when he wrote the following. this is virtually the power to control them absolutely. and as we recall with his fight over the senate in 1920, he largely have that attitude as president. but the founders had congress in mind as a player in foreign affairs when a given the power to declare war and define and punish felonies on the high seas and to regulate the value not only of u.s. currency by foreign currency, something in the news these days.

the senate, of course, has shared powers with the president on treaties and the ambassador ships. most fundamentally the power of the person goes to domestic matters and foreign and military affairs as well. i was thumbing through 286 pages of the house foreign affairs -- foreign affairs authorization. they considered seven amendments during the markup aryan july. not withstanding the framers saying that they should work as a check congress defers more and more to the president and the united states became an international power in the last century. there are often accused of micromanaging and excessive meddling.

i recall henry kissinger said this after he left office. floating downriver of law they think that they are steering the thing. i learned later that was a paraphrase of something mark twain once said about bureaucracy and 5000 ants. congress is organized to play a role in foreign and defense policy through the committee system. this is to authorize programs in those areas financing the ways and means committee on the foreign operations and the defense subcommittee, and the allocations in those areas. they consume a substantial amount of time and resources for the committee members and their staff. with the mn and activity on the

floor of the house and the senate. congress is involved on an ongoing basis with the formulation funding and oversight of the americas foreign policy. this does this enhance or detract from the quality or success of foreign policy. we have an excellent panel to answer those questions, and you have the biography before you are a your handout. we will talk briefly about who we will hear from. the first is john sununu of new hampshire, who served six years in the house of representatives, and six years in the senate. and we will hear from david mccain who is currently a foreign-policy adviser -- and

the staff director for john kerry of massachusetts and the author of a biography of a former fbi confidante. we're very grateful to you for your willingness to fill in at the last minute after the with draw from the program of dick gephardt who had a last-minute scheduling issue. i give -- and given the option of saying a few words during the presentation and he said, i will fill in and do a few remarks. and then we will hear from james linsey from the council on foreign relations and a political scientist and author, and the co-author of several books in the field including congress and the politics of u.s. foreign policy.

we're happy that you are with us today. and we will hear from someone who i have imposed upon several times. this is gail chaddock, the paris bureau chief who has looked at this issue from both sides across the big body of water. we will be grateful for her. she is one of the people that my former boss with have been very happy to have worked with. they would say that i wish those journalists had taken one political science course because some of them did not know what is going on. and after a few years they do catch on. i will yield at the podium to john sununu for as much time as he should consume.

>> yielding to a senator is the most dangerous thing you could possibly do in a format we were trying to get the other speakers. i will try to keep my remarks brief and focused on the peculiarities of congress in general. and the house and the senate and how they may contrast with each other, and how members made a arrive at their own decisions with foreign policy, and the background they bring to their view of foreign policy and how it may affect the outcomes. so the comments made in the introduction thank you very much for your kind words, and it was wonderful to work with jane a good friend and a very thoughtful person. working in a bipartisan way with a whole host of issues but

never more determinedly then issues of national security and the intelligence community which she was privileged to lead. i was star with the observation that there is plenty of bipartisan consensus with regard to foreign policy. as democratic and republican presidents believe that congress has no business meddling in foreign policy. they joined together in sang the oval office has no idea where they are going in public policy. there are opportunities to work together in that regard, with respect to the age of the debate. the debate goes back further to the 1970's. but academic circles have been more thoughtful and more focused on the give-and-take between congress and the

presidency since then. and the role of congress versus the presidency, but the fact is some of the earliest and most heated debates in congress were over matters of foreign policy and treaties with the english and not just the detail and the meaning, and the impact of what was written into those readings -- treaties but arguing about the increasing role of congress in foreign policy. this is an issue that has been in front of the country since its founding. and congress has a role by design. this is what the framers wanted. the to have simply written that they would put out but they did not. there is no important -- no more

and more responsibility than the ability to declare war. and in terms of relevance we can look to the past few weeks of the approval of three relatively important trade agreements. and some who were responsible for the delay may argue that this was done in order to make certain that both the treaties were well crafted and that additional issues like the trade adjustment authority were considered along with the treaty. and there is no question that if you are correa, the delay and the details in that trade agreement has shaped your foreign policy decisions with respect to the united states. it may just be a trade agreement but there is no question

affects foreign policy. whether you agree or disagree with the legislation, there is no question that is not just relevant by very important to the town of our relations economic and social and political with china. it is no question that congress is still very relevant in this debate. the central tension between the presidency and congress is that in the abstract, most americans would want a consensus-driven unified foreign policy because this is easier to implement and represents national interests if this is the case.

but we have a congress that is partisan at times and populist at times and this can certainly be driven because there are human beings in the congress by different aspects of ethnic or demographic identity. none of those things in and of themselves are bad. political parties are not a bad thing and they make the system of democracy work. and they represent different views and ideas about economic and governance and foreign policy. you don't solve the problem with getting rid of parties or telling people that you should not identify herself as an irish-american or polish american. this is what america is all about. but these things in turn, they can affect a with a member of

the congress uses their role and their responsibility. so what are the things that drive those members in and their approach to foreign policy. the first as a personal background. what part of the country are they from? how does their own families view of their immigrant roots shaped them, and their value system that they grow up and got educated beginning in pursuit of public life? this does make a difference, if you are one -- if you are first generation polish american, you are more focused with the issues of central europe, and issues associated with our allies and

adversaries in that part of the world. this is natural, not inevitable but this is natural. the east coast and the west coast are more focused on international issues. and this is as much a reflection of geography as anything. there are few people in america as a percentage americans are not nearly as focused on international issues as their counterparts in europe. this is a reflection of geography or the size of countries, the number of countries someone may have visited as they grew up and in public life. the background shapes the prospective without question. and there is the constituency. if you are a member of congress

and you represent a district, you care about the makeup of the people in your district and where they are from. and what parts of the world are the most focused on. even if there is not unanimity on any issue if you are a member of congress representing dearborn mich. you will have spent time in the largest arab- american community in the united states. without question, that will help inform your view and it may have an effect on your priorities. and you can go by each district to find that constituencies may affect the intensity with which a member of congress looks at foreign policy in part of the world.

the committees that you are on affect your impact. if you are in the foreign relations committee the call of international affairs in the house, you will be more focused on foreign policy. and if you are the chairman of the africa subcommittee in the united states senate, you'll be focus on issues affecting the african continent. and if you are a member of one of the committees with foreign policy jurisdiction, it does not mean that you will necessarily be a good member. you'll be much more likely to be focused on those issues. this is the armed services committee. they will bring members into closer contact with issues involving foreign policy. the homeland security committees

are going to bring members in closer contact with these issues in question because of the amount of work that is being done around the world to deal with the threats from terrorism. and other threats to us. this is all of the committees. and finally, in matters who is running those committees. john mccain and senator levin are going to have a different perspective on foreign-policy and national-security issues than dick lugar and john kerry their counterparts on foreign affairs. they're not necessarily better or worse and other issues are

more partisan or less partisan, they are all deeply involved in foreign policy but have their own biases and interests and areas of emphasis. there is a greater likelihood that you would follow the leadership and the development of those leaders. the final thing affecting their perspective is the events themselves. i did not expect i would be so involved in issues relating to iraq as i ended up being why was first elected in 1996. if you ask me what issues of foreign policy you will be involved with, you could ask many of those questions in 1998 or 2000, the issues -- the answers i gave you would have no

rhyme or reason to what i was working on in 2002 and 2004 in the united states senate. having said all of that, not all members of congress pay a great deal of attention to foreign policy. one issue we had to consider in preparing their remarks for today is how many members of congress pay attention to foreign policy. you have to pay attention, but what does that mean? this is 5 for 10%. how would define this would be, how many members work on foreign policy issues that are not in the headlines or work on foreign policy issues with others in the senate are not working on them were paying attention to them.

you have to vote on currency manipulation or you have to vote on troop deployments or withdrawals from iraq or afghanistan. we have all been through that and most members pay attention and consider and analyze and have their own decisions when it comes to those. but who works on those when this is not in the headlines. should this be more? yes. and the reason it should be more is because the more that the members pay attention to foreign policy issues during the time that these issues are not in the headlines, the better-prepared that they will be to react to the challenges when they do become a crisis situation.

this would be the point i would close on. how do you make this situation better. this is a simple suggestion and probably one that has been made many times before but is worth emphasizing. i think that this makes a difference. to provide many -- as many opportunities as possible, domestically. this is part of the crisis. the troop deployments and withdrawal in afghanistan this is important but the country would have been better served if people were talking about the nature of the afghani state and the strengths and weaknesses, the failures and the

opportunities to improve stability 10 or 15 years ago. the objective should be, if this is the wilson institute or any other council on foreign relations, or the institutions that care about international relations and foreign policy, you have to provide those opportunities. you may not draw as big a crowd if you are talking about the roots of democratic reform in sub-saharan africa, this may not draw the crowd that a debate about the true policy in afghanistan or iraq. it is always difficult to tell if and when we will all be tune into those questions and issues. but if there is a crisis on the world stage the u.s. states

that causes us to turn to this issue, will be better off because people have spent a lot of time discussing this. there will be better informed, they'll be more capable and more confident and able to bring something to the table to make a difference for their colleagues in the united states congress. thank you. >> interesting to mention sub- sahara africa. a letter was sent to the congress to say that he was sending special service of visors and to you gone that and would send them to the sudan and the central african republic and the congo. this is just coming out in the news but congress probably has not paid that much attention but

this was part of the war powers act. we are involving the soldiers in potentially hostile situations. we will turn this over to david mckean. >> thank you. i think that don mentioned i'd double little bit in history and spent a lot of my career working for john kerry. i will double in history and talk about john kerry as an example of someone with a career in foreign-policy -- shows a lot of what goes on in the congress. is congress a positive influence on foreign policy?

we have to know that any influence congress has the rise from the constitution. one political observer put this very well, the making of sound u.s. foreign policy relies on a combative process that involves the legislative and executive branches. and the founding fathers gave them overlapping powers in the realm of foreign policy, inviting them to struggle for the privilege of directing american foreign policy. but for most of the nation's history and certainly in the modern era has not been that much of a struggle. the president has the vision and the agenda, appointing the people to implement his vision. some will argue there is a key division of power over the

declaration of war. the power to wage war begins with the president. the president needs to get a declaration of war from the congress. the last time congress did this was 1942. since then the us states used the declaration to use military force. congress may cut off the funding which happened in vietnam. it is unlikely to ever happen again. but congress has always taken a back seat and it will not always take a back seat. already attempted constructive engagement with south africa to have incentives for a potential regime change.

they encourage the prime minister of south africa to implement reforms. they thought the pace of reform was too slow and passed over the veto of the bill to provide broad sanctions. the shared responsibility with the executive branch taking the lead generally works very well. but what can congress do to make this a more responsible player in foreign policy on a daily basis? for more i sat in it -- as a staffer on the foreign relations committee, the issue is oversight. this is an article from foreign affairs a few years ago. the key role is overside, making certain that the loss are fairly

executed and that the executive -- they're meant to keep mistakes from happening or spiraling out of control in order to prevent them or others like them for occurring. the oversight keeps policy makers on their toes. and the task is not easy, because this is time consuming, and investigating scandals can go into a partisan exercise that ignores broad policy issues for the sake of cheap publicity. this is exactly right. members need to have the information for the strategic viability of any particular policy. hearings are very important part of the process. but very few members attend them. too often issues are decided

based on political considerations rather than substantive information and is too easy to politicize foreign- policy as it is any issue. congress should explain to the public with the administration why we need to maintain a good relationship with pakistan. this does not mean the terms of the relationship need to remain static but we have to put them into context of our historical relations with that country and we have to do this in order to find common ground. and too often we see a relationship like this captured in the knee-jerk political terms that ignore the national security implementations. let me take a granular looked about how one committee and its chairman operate. i was the chief of staff for

john kerry from 2000 to 2008. he had been on the committee since 1984 and his father had been a diplomat on the foreign service. he served in vietnam but later became a critic of the war. in 1962 he asked how you ask a man to ask a man to become the last person to die for re mistake. foreign policy has always been his great passion. it is different to be the chairman of a committee and not one of the members. as a member, he had a few staffers who were responsible for covering the issues for them. you cannot be an expert on every

issue. invariably the focus on this -- personal experience can help a member find their issue. in the early 1990's he focused on the recognition and the transition and modernization issues related to vietnam because he had previously chaired the pow investigation and otherwise help the member find their issue. he was the senior democratic member on the asian subcommittee on the cambodian genocide tribunal. and the opportunity to lead on an important issue may help a leader emerge. in 1990 he did a tremendous amount of work on aids in

africa. this was a moral issue for him but not a major issue. in 2009, he became chairman and had to cover the world. annie had to be an expert on every issue that came up. that means egypt and libya. suggest to put this in real terms, as a member of the committee, he promised that 20% of this time on foreign policy and now spends 50% of his time on committee-related work. the important thing is that when the senate is in recess, he spends much of his time on the road with his vacation spots as africa and afghanistan the middle east and are for.

he believes in order to understand a country you have to know this and make contact with the people and see this yourself. he would say to me that good diplomacy lets you see another country through their eyes and their history. i think the foreign travel component is especially important to any chairman of the committee that handles foreign policy. after 2004, he was declared it a serious student of foreign policy. he did meetings with any foreign leader that he wanted. what changed in 2009 is many of the leaders there was a chairman who was close to the president and wanted him to translate the administration and their foreign policy.

but he understands that he is a translator and not a spokesman for the administration. he understands that congress is a separate branch of the government and he has differed with the administration on many issues declaring that the president and his decision on afghanistan went too far, too fast. he has also found he has a convening tower that is extremely important like bringing in former republicans of defense -- to set a bipartisan tone, but the as it can be in power with his own members, inviting committee members to his house to build relationships and bridge the partisan divide. that is a big part of why the committee has had important bipartisan success.

let me add, john kerry has had a great partner in all of this, senator richard lugar. there were times when he had to run off an appointment and he was comfortable heading -- giving the gavel to richard lugar. more commonly, you find the chairman and the ranking member actually wanting to throw the gavel at each other. the last thing that i will note about foreign relations committee and his approach is that he wanted to make it clear, it is not center to the chairman to the extent this is possible. his personal experience has been very instructive. he has worked with contemporaries but spend most of his career in the third or

fourth position, and this can be frustrating. when he got the gavel he thought about getting the members of the subcommittee engaged, to help barbara boxer work on women's issues. and he reached out to new members, and he empowered them to really lead on issues through the subcommittee. he knows the committee only succeeds if members on both sides get a real value for being on it, because it is not a committee that wins you a lot of votes back home. in the executive branch or the congress the fact that foreign policy is the byproduct of effective leadership. thank you. >> i will turn things over to james linsey, but it is teaching

in the university of iowa after i left there as a graduate student. i have fond memories of the high was the campus. >> this is when i am is supposed to say, go hawks. and i want to echo what don said earlier, this is an excellent book and i would recommend that people not only read this but purchase this, which is what every author is wanting to readers to do. i may oakdale and apology. i am a professor by training, and this is the job of one person talking as other people sleep. i hope to turn it -- the panel over tea with the audience have

to wait. i was asked about the influence of congress on foreign policy, for better or worse? and my answer is, yes. the question is if this is good and bad is in the eye of the beholder. people like congress when they're standing up to the president is doing things they don't like and want them to be quiet when the president's is doing what they want for him to do. you want to go back and forth through history to find examples of a good congressional influence on foreign policy or whether the active as congress is good or a differential congress -- you can find multiple examples on both sides.

you could talk about the imperial presidency and congress surrendering its voice giving up the gulf of tonkin resolution. what a threat -- the congress getting in the way of the president doing the right thing such as the rejection of the treaty of versailles. i would like to make three different points. one of them is that congress works at a disadvantage in form policy and will continue to do so as long as united states as an activist foreign policy. politics will shape what congress does in foreign affairs. and congress influences foreign policy directly and indirectly. my first point is that congress operates at a disadvantage in foreign policy and will as long as we have this policy.

if you look at the constitution it is important foreign-policy powers to congress and the president. they say the constitution is an invitation to struggle over foreign policy. but since world war two this has gone decisively in favor of the white house. the most important is the changed u.s. role around the world. and the set -- to change perceptions of presidential power. james madison became president during modern times and the house representatives passed a bill to pass to him the decision of whether to go to war with

france. madison said that they could not delegate to power because it belonged solely to congress. after the invasion of south korea, president truman sent forces to stop -- to south korea, and he did so without going to congress or the russian leaders. or barack obama in operation odyssey dawn. the extensive overseas involvement and the national security establishment means that congress must delegates authority to the white house and they will have difficulty with oversight. on both points, delegation and oversight keep this in mind.

if you are congress, you want to give authority to the presidency. one of my favorites was an appropriations rider in 1970 wanting to prevent the central african empire, but this was when it collapsed. and they were barred by law into helping the success of government. you delegates -- open the door for people to do what they want. the national security -- the department of state and the treasury the intelligence community is huge and it is very difficult to oversee people like david. -- people like david tried to follow with these policies do but this is a very daunting task

and this is difficult for the white house to oversee the same agencies. and the third thing is that the courts say and the sidelines for most issues. what has happened is that they thought they would step in and referee. this is the president and the white house. especially if this damages the white house. the president can take the initiative and then require congress to try to stop them. you really do have to presidencies. the president increasingly cannot act unless congress

agrees. this would be a debt ceiling -- for the summer. the president can act until congress can stop them. loll only becomes of law -- a law only becomeess a law before the senators. a bill is veto-proof. the last foreign policy bill to be overwritten is the south african sanctions bill. and this is coming more recently with president obama and libya. to stop the president's decision. everybody knew no bill could

stop the bombing was going to pass. politics shapes congressional interest in foreign policy. they believe politics stop at the water's edge. the fact is that politics does not stop at the water's edge. we talked about earlier. the most bitter disputes during the george washington presidency i am not arguing that all foreign policy is about politics. the staff works very hard to try to oversee what the government does as part of this -- there is the policy platform.

the united states senate gave more free rein to members this drives what is that congress does in foreign policy. this is the basic law of democratic politics. this is one of the issues that voters care about. this is focused on jobs and the economy. when they are solidly behind the president such as in the fall of 2002 the public comes to rally behind the president. there is consensus about what the policy should be and the

politics become very partisan when there is a significant difference, in what we should be doing abroad and what the solution to those problems are. this influence foreign policy directly and perhaps indirectly. this is in terms of what law will be passed, that compels the president to do this. some congressional legislation specifies the substantive foreign-policy. how the money may be spent and you talk about the south african sanctions bill. the substantive legislation what is well beyond that. they aren't changing this in important ways, in directly.

congress has extensive foreign- policy powers, and historically, congress has treated offices in the executive branch that have not been attended to in the more recent ones, with the concern that the administration is not paying enough attention to this. and likewise on trade policy, this is mandated with the executive branch, as it develops the policy. and the procedural legislation. and to has a say in the making of this decision. and the foreign policy and directly trying to change the climate of the country.

the speeches and the television appearances, and even dramatic stunts like going out on the ground of capitol hill with a sledgehammer to break the imported goods. there is a cost overruns and things like that. if you want to be less charitable they are trying for political grandstanding but at the end of the day, they're trying to shape the terms of the public debate to make some policies more likely and other policies less likely. at the end of the day actually passing the law is so difficult. this is aimed at trying to shape what the white house is going to do, and what is likely to be able to accomplish on capitol hill and what will cost

it too much, politically. and i will stop right there. >> thank you. [applause] >> i am happy to be here because don has sent me on more times than i can talk about. institutional memory is something we are very short on right now. or you can get the context or the time line, or ask the question, is this something that is new or has this been going on for years? switching to our topic today foreign policy, to me, it is critical to remember that congress is not as strapped as sen. sununu said. only 5% of people are interested

in foreign policy. oversight is a critical function of congress, but if you want to look at the hearing rooms there are only a few people up there asking questions. they are largely empty. too few members are attending. and the last comment was the most important. there is great interest in foreign policy that some members of congress have in spades. they do not get credit for this at home. this is a very important point. mr. murphy was talking about congress affecting what the public is interested in. the christmas trees the smashing of imports is a way to attract the public but what struck me the most in the panel discussions is that no one has

trashed the media. so let me do that. my favorite place in paris was a bookstore owned by an iranian dissident. he thought khamenei would leave power. so many of his colleagues and himself ended up back in paris. he had a special interest in the united states, which he visited frequently. the last time i saw him i asked him what he was encouraged with in the world. and the thing now made him the most depressed in the world was seeing cbs news. he noticed only a minute and a half or two minutes were