devise more people to become doctors, more people to become nurses -- incentivize more people to become doctors, more nurses, more clinics, that is how you distribute health care. but we do not talk in the redistribution. >> you have responsibility for political severance in denver and a swing state for the 2012 election. what is the conversation in the newsroom on how you will cover economic issues? >> one of the things we have been talking about quite a bit is, and i think it was brought up in the last panel a little bit, is that we owe it to our readers to get away from only focusing on the politicians and we need to look at folks who are not in an ideological trench but who are trying to make up their mind to hear what is important to them and to get their voices in the paper.

as far as covering economic issues, it is a great question. again, i come back to a lot of today -- a lot of today has been sent -- spent in a hair pulling a fire in brimstone demotion or mood. this is a time we're getting information about a candidate and about a platform is far easier than it ever has been be. -- has ever been. you can go online and with two clicks, be getting as much of mitt romney's tax plan as you care to read. or as much of the -- of newt gingrich's plans. it is difficult when you talk about the media in a broad perspective. at the "denver post" level, we do not -- our reporters are focused on state government. on city hall.

we have a reporter in d.c. who is in charge of keeping up with the congressional delegation. the nine officials we have out there. the parts of the massive federal government that affect the western states. we do not often have the luxury to cover presidential politics. in the way that you are asking about. when barack obama comes to town, if -- as he is done quite a bit because we are a swing state, we try very hard on our team to find out what his message is going to be with his speeches. we try to figure out whether he is pitching to high school students for college students who are dealing with debt and a down economy when they are taking out loans so that they can get a job and then it is hard to get a job once they are done with school. we try not to just do the horse race. we tried to cover it in a way

that if he did not get to go to the event, you feel like you were there with a video offering and or blogging in tweeting. we also tried to -- we tried to have the reporters deal with that particular topic is part of their deal and say, this is the politics of it. this is what it is intended to accomplish. if you strip away, you're the realities, challenges. here is what he's up against. your student loans explained in a way that you can understand. guest: let us have the -- >> let us have the obvious attempt in -- the audience jump in peoria >>. >> i am an engineer and i got

into the old business because years ago i had this naive idea that it getting value from the ground was something that did not offend anybody else. that was not at someone else's expense. i have been involved in the lobbying and in various activities for many, many years. i was involved in the sagebrush rebellion in the 70's. one thing you learn out of that is what a messy, messy group they are. they're all going in 17 different ways. that is what i like about the tea party movement. they are missing movement. [laughter] they not have an idealism they can stay with the. whenever you look at occupy

wall street, i get the impression that what ever else you say, they are basically saying the same thing, which means that it is not a true movement. but it is a force fed propaganda. and you look at things different ways. >> a question for the panel? [laughter] >> in 98 -- 1990, i debated with exxon mobile flat tax versus the income tax system we have. i took a position that we were better off with an income tax system we had rather than flat tax for all the evil potential that was in the flat tax. the problem has come to this day something entirely different. the tax base in this country is less than 30% of its members. only 30% of us are not net pay years. how are we going to address the

fact that we are about to the road our entire tax base for this country? -- erode our entire tax base for this country? >> i am going to give the panel a minute so they can address that. >> i am glad you brought out the flat tax because in 1986 when reagan enacted the reduction of 50% to 28%, that would have created a windfall of revenue for the state of colorado. the legislature came to the independent institute at that time and janitors was president and they said, we are interested in a flat tax. would you come up with a neutral flat tax for colorado? john came to me and i came up with the best number i could -- 440%. we met with leadership and they said, we are not sure about 4%. we will set it at 5%. john, bless his heart, said no. he does the higher. we do not need another tax

increase. we will defend pork -- 4.2%. we were proven right. the effect of that 5% was colorado did capture the windfall. i know that economics is boring. economics is a dismal science, right? [laughter] this is important stuff. you need to understand what happens. essentially, and colorado, we created one of the best tax climate in that country. we created one of the highest rates of economic growth in the 1990's. a lot of that was a result of a more efficient tax system and by the way, more equitable. that also shifted the tax burden to the upper income group because we broadband the base -- broaden the base. >> have been the media cover taxes in a way that is not dismal? -- how can the media cover taxes in a way that is not dismal? [laughter] we will leave it there.

>> i would like to see our media at -- this will never happen, but in a perfect world, the media could tell some great stories about rich people. and the phenomenal things they do. we have a man coming into scrapes the river in southern colorado. he is paying $50 million out of his own pocket to do this. the opponents want the $50 million to go to poor people and send people's kids through school. if we can tell a story of this guy coming in and how many jobs he is going to create for people who can really use them right now and we could tell the stories of immigrants who are here illegally for producing 10 or 20 times with the consent, then we can imitate the way things are seen in this country. >> are those the stories you would like to see? >> i would love to. i would love to hear the stories of the values of the investments and what it means to people to have a robust public education allowing them to go on to be more productive.

i would love to hear those stories because i think that all of this is in the middle. we are neither a right or left that is right. we have a system that is a system, not an individually- driven enterprise. we have got to have the story so that we can figure out how it is that we all work together for the better of all of us, not for the better or the detriment of one group or another. >> you are in a story telling business. >> we love to tell good stories. you know, we endeavor to do that day in and day of. and as we get it right and some is we right boring stories. -- some days we get it right and some days we bright bowring stores. certain folks who used to be considered entrepreneurs, do

they find themselves in the hot seat? that is a great question. certain organizations in the media will handle it different ways. we understand that on some basic level, well as opposed to create wealth. i do not think we have redefined ideals as we approach stories rick -- is we approach stories. >> another question? wait for the microphone. >> my question is going to something that you said, carol. we should be investing more to public works. i am studying economics right now. how can -- government cannot produce anything. that is not israel. -- its role. how can we invest in public

works to grow at the economy? can you explain why we should invest more into public works? >> i would be happy to. i think there is a point and i am not a phd economist. when i sat with one, i am nervous. -- sit with one, i am nervous to talk about the design of the system. structure, market there are efficiencies that are achieved not by individual producers, but by collector production. transportation, education, national defense are some of the places that we have found, historic plea -- historical, that is the case. those investments we are not making right now. i think that the debate is that, what are the choices?

what we invested together as opposed to individual pursuit? you cannot deny that the designer says there are places where the market fails. we need to have the response. the political discussion is, how big is that? what are those areas? how do we support that? that is the conversation i want to have, not the one about taxes and government being bad or that rich people are dead. that is what -- rich people are being dead. that is what our political conflict is. how do we balance these things? how do we make it so that transportation is not the responsibility of the individual business. because it is a collective in share value that we are -- all benefit from and productivity results. >> we will take one more question. in the front. >> hello.

i am a student here at ccu. effort occupy wall street mention a couple of times and i have a friend who is a reporter who has talked to me about that. everything i have seen as far as the media goes towards them is not portrayed about how i talk to him about that because he kind of supports that movement, but the media, whether it be in a wall street and new york city, the local here, everything i see, whether on the newspaper war on tv, is not representative of how -- id is not an intelligent kind of representation of what the real people. everybody is jumping on the bandwagon. the media is portraying like a difference in on that. how can we not -- a different spin on that. how can we not -- i do not think the media is giving

inaccurate portrayal of -- giving an accurate portrayal. i am skeptical. >> both the left and the right to object to the media coverage. one more question. >> we had our own version in occupy, denver. that was vigorous. they still come out of there -- ert defections appear people who are not in the movement that are still sleeping on the sidewalk. there are people organized and to beat irregularly into certain kind of organized protests. but, i have been in the occupied denver camp and we have had several reporters spend huge amounts of time in their effort over there during that time it was at its peak. if you talk to 70 different people, you have 27 different positions. -- 17 different people, you 27

different positions. that was very difficult. people want to restore lands to the indians. some people wanted to do with the environment. some people want to screw the rich man. some people wanted to redistribute the wealth. what have you. as a newspaper with only some in the column inches, we spent a lot of ink and money on that protest. it is difficult to sum that up. so, again, i urge folks when i talk to them about discussions like this to realize this discussion gets overly simple but sometimes when you mentioned the idea that media -- the idea of media. there post a comment and those who report. we try to report the what about -- we tried to report what people are doing. it is up to other people in the opinion section of the media universe to talk about what it all means be. i think because it was so

amorphous, it landed itself to commentaries on both sides. this is an attack against the rich or the poor. anyway, that is my two since. >> we will leave it it there. two-by-four occupied the space. [laughter] -- thank you for occupying the space. [laughter] [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> live to washington, d.c., this is a georgetown university law center were the justice department will be hosting a summit this afternoon on consumer protection issues. the event will start with remarks by attorney general eric holder and other senior officials. they will have three panels following focusing on the elderly, tax scams, and business opportunity scams. the obama administration has estimated this week as national

consumer protection week. we expect that attorney general eric holder will be along shortly. we understand he is about five minutes or -- or so away. president obama head to texas this afternoon. he has three vans. one of which you will see online at c-span.org at 6:15 p.m. eastern. \ the documentary about the president to attack campaign about the term in office we did president's campaign about his term in office is going to be released next week. we will show you a preview right now. >> how do we understand as president and his time in office? do we look at the day's headlines? do we remember what we as a country have been through? >> president has named the members of the economic team and they fly in for the first big

briefing on the economy. >> what was described in that meeting was an economic crisis beyond anything anybody had imagined it. >> hard time of standing -- our time of putting off the decision has surely past. -- passed. >> people ask where to begin. which need would he put >> greater than greater than which is one, two, three, four, five. >> if we do not do this now, and we will be a generation before 30 million people have health insurance. >> if the auto industry goes down, what happens to american manufacturing? jobs in america? what happens to the whole midwest? >> entire national security

apparatus was in that room. we had to make a decision. go or not go. >> as he walked out of the room, he is all alone. this is his decision. nobody is standing there with him. ♪ >> again, that film being released next week. we are back live at any event hosted by the justice department looking at consumer protection issues. three panels this afternoon. they will look at consumer protection for the elderly, tax scams, and also a business opportunity scams. a number of justice department officials, federal trade

commission officials, and others will speak as will the attorney general, eric holder, a look at the whole thing started in a few minutes. h >> this event is just about to

start. the obama administration has designated this week as consumer protection week. this is a summit on consumer protection issues. the attorney general will speak first. he will have three panels on the elderly, tax scams, and business opportunity scams. the folks from the justice department and also federal trade commission, as well as a number of officials from state attorney general offices -- marilyn, california, and indiana to name a few.

>> thank you, ladies and judgment. it good afternoon. thank you for being here. my name is michael. i want to thank georgetown university law center for hosting this very specially event that we have had and are having here today.

hensarling sahlin influential leaders throughout the department of justice -- and for allowing influential leaders throughout the department of justice and other agencies and offices as well as nine different consumer protection groups to gather together under one roof and to talk about critical issues that affect millions of americans all across the country, every day. four weeks ago today, united states attorney general eric holder announced the creation of the consumer protection group, punctuating his commitment to preventing and prosecuting fraud against some of our most vulnerable citizens. during his time as attorney general, he has charged civil attorneys and criminal prosecutors to use all the resources in their arsenal to enhance their enforcement of consumer fraud. these efforts have been met with tremendous success. under attorney general holder's

leadership and years resolve to protect consumers, we have forged partnerships with the consumer advocates here today and we will continue to do so through the consumer protection working group and defense like this one. ladies and gentlemen, it is with great honor for me to introduce this afternoon's for speaker, the attorney general, eric holder. [applause] >> good afternoon. >> that afternoon. >> good afternoon. >> afternoon. thank you for that introduction and a leader as the fraught -- of up fraud enforcement tax forced -- task force. it is a pleasure to join with you and so many dedicated colleagues and partners as we begin today's important conversation. i want to thank you all, especially our panelists for being a part of what i think is

truly a historic summit. i cannot think of a better way to commemorate and raise awareness of consumer protection week then for this group of stakeholders, experts, and advocates to join forces in examining the challenges we face in identifying the solutions that the american people deserve. in this conversation, i am especially grateful for the commitment and engagement of the members of the consumer protection working group. it is a newly formed initiative opening as part of the financial fraud enforcement task force. i would like to recognize director michael blume and all of the co-chairs. tony west, who listen to the our associate attorney general. lanny breuer of the criminal division. andr birotte, of the central district of california. director david vladeck of the bureau of consumer protection and kent markus, the head of

the enforcement. today is the work -- today as the working group gathers for the second time since its inaugural meeting, i want to express my gratitude for your leadership and for your dedication and protecting the safety and economic security of consumers across the country. these are goals and these are responsibilities that we all share. each one of us has a role in fulfilling them. for me, and for today's department of justice, protecting american consumers is a top priority. as we have rededicate ourselves to this work in recent years, we have also learned some lessons. primarily, fully understanding the threats that consumers face and protecting their interests in a comprehensive way is not something the justice department can achieve on its own. we cannot simply prosecute our way out of this problem. so, we need your help. uighur perspective. we need your expertise. uighur talents.

-- we need your talents. that is what this day is all about. earlier, this afternoon, we kicked off an important and unprecedented conversation between this working group's leaders and the consumer advocates. we talked about strategy. to enhance consumer fraud -- awareness about fraud crimes and ways to report them. ordinary citizens will have the knowledge they need to fight back. building on the momentum established in the fight against consumer fraud. as a result of this discussion, we formed partnerships with federal law enforcement officials, regulatory agencies, and key state and local authorities. we have been able to gain access to the white away of tools -- wide array of tools we will need to continue the work that is underway and to bring this fight to the next level. especially in these times of great economic challenges, i recognize the need to move

aggressively to combat these crimes. that has never been more important. the department of justice and so many of the consumer groups represented here have responded to these threats, now with the spare, but with resolve. -- despair, but with resolve. during the last year, we achieved a 95% conviction rate. they recovered over $900 million for criminal and civil fines. they obtain sentences totaling over 125 years of imprisonment against more than 30 individuals. these achievements build on the remarkable success of the financial fraud enforcement task force, which is helping to secure convictions against those responsible for a wide variety of consumer scams. including telemarketing schemes, fraudulent job- training, and referral services, and even enterprise is generated over $75 million in loss and victimize a 350,000 small

businesses by placing unauthorized charges on its people -- on people's phone bills. since april when i established a new part known as the oil and gas price from a working group, we have been focused on identifying a civil -- criminal violations in the oil and gas markets and insuring that american consumers are not harmed by it -- unlawful conduct. conduct. this working group's latest meeting was held at the justice department this morning, and members discussed a variety of topics, including the role of speculators in the market. recent reports by various working group members such as the new york state attorney general's office, as well as ways to improve information- sharing between working group members and partners. where do we go from here? i can report that one of the working group members, the federal trade commission, is in an investigation.

there determining if anything was violated by a -- if there was any antitrust violation. working group member stand ready to act if they learn anything that implicates the laws that they and force. the task force has been at the forefront of the administration's efforts to seek justice with areas devastated with the recent financial crisis. we have helped to bring charges to secure convictions, and to get prison sentences of up to 60 years in a variety of cases charging securities fraud, bank fraud, and investment fraud. criminal investment tools where possible and sanctions were necessary, i think we have made good strides in holding individuals and institutions responsible for the oftentimes

on lawful conduct that helped contribute to the crisis. by employing a similar approach, we have been able to make history. in january, the departments of justice and housing and urban development and 49 state attorneys general came together to achieve a $25 billion agreement with the top five mortgage services, the largest joint settlement on record. this will provide significant assistance to struggling homeowners and communities. it will serve as a model for what we can accomplish when we worked together across federal agencies, state boundaries, and party lines. there is another new task force component. we can all be encouraged by the achievements that have characterized the past few years, but there is perhaps no better illustration of the progress we have made than our work to combat health care fraud.

over the last fiscal year alone, the department and partners were able to recover nearly $4.1 billion in funds that were stolen or taken improperly from federal health care programs, the highest amount ever recorded in a single year. over the last three years, for every dollar we have spent fighting against fraud, we have returned an average of $7 to the u.s. treasury, the medicare trust fund, and others. these numbers are stunning. there's no question. we are proud of the results we have already achieved. health care fraud will not be a focal point of this group. this will augment our latest consumer protection efforts. this is no time to be satisfied. we cannot afford to become complacent. that is why we must and will continue to seek new avenues for communication and collaboration with partners like you. with the assistance and expertise of the friends and allies that have been gathered

here today, and to discussions like those that will take place with issues ranging from fraud targeting the elderly, to tax schemes, to business opportunity fraud, we will develop strategies and implement new solutions to preventing and combat in consumer fraud in the years ahead. my colleagues and i are counting on each and every one of you. american consumers are depending on you. i look forward to all we will be able to accomplish together. thank you all for the great work that you are doing and that you will do. thank you. >> thank you, and thank you all for joining us here today.

happy consumer protection week. this week is really an opportunity for us to do a number of things, to raise awareness about consumer protection issues with consumers around the country, to begin to think about our own efforts, education efforts, when it comes to protecting consumers from fraud, but i think the most important thing that this week is proving to be as an opportunity for us to come together and to share ideas, thoughts, to achieve some synergy, talk about efficiencies that we can achieve by working together, and we have already started to do that. we had a very productive meeting with consumer advocates who have been in this for a long time, and with federal partners and state partners, to talk about how we can work better as a team tackling some issues. as the attorney general

mentioned, protecting the health, safety, and financial well-being of consumers has really been a centerpiece of this administration's antifraud effort. over the last three years, we in the civil division of the department of justice have refocused and redoubled and really reorganized our efforts to protect consumers by creating a new branch, the consumer protection branch. the work of that branch, which the attorney general mentioned, has been going on for the last 40 years. what we have done is to -- they have been enforcing consumer protection statutes for a long time. what we have done over the last three years, we have provided additional resources, we have given that branch and expanded focus, and we have renewed partnerships with key players in the consumer protection space so that our efforts are even more

effective today. we enjoy great partnerships with the ftc, fda, the consumer product safety commission, or friends at the consumer financial protection bureau, state attorneys general, strong partnerships with u.s. attorneys around the country, and several others. we have really stepped up efforts to enforce consumer protection laws in a number of areas, including mortgage fraud, food and product safety, counterfeit pharmaceuticals, investor schemes, there will be a panel on that later today, criminal law, health care fraud, our interest rose in for- profit colleges, and there's a type of fraud that preys on immigrant communities. we have redoubled efforts that have led to record-breaking results. again, that is a testament to

the partnerships that we have been able to establish. he told you about last year's numbers. when you look at the numbers from january, 2009, uc the consumer protection branch has recovered a record-breaking $3.7 billion in criminal fines, civil penalties, restitution to victims. when you add up the sentences of the defendants who have been convicted during those three years, you find it adds up to more than 295 years. it is a record of success. as the attorney general said, we have much more work to do. that is why this gathering is so important. so, the last thing i will say in closing before i turn it over to my friend, one of the things that happens in washington, d.c., when people hear a new working group, they think, a new working group. what is that? whooppee.

one thing we have seen time and again with the task force and the working groups that informed under it, whether it is the mortgage fraud working group, which i have had the privilege to work on, or some of the of the working groups -- and other working groups, the reason we form these working groups is because they work. they have really lead to significant results when people are coming together. people are working on similar enforcement challenges. we are breaking -- bringing together the full panoply of federal, and sybil, and criminal, and state authorities to bear on these common problems. when you add to that in this context, bringing in the ideas of so many consumer advocates, i think that we have a recipe for

success again. i am very pleased that all of you are here. it is a privilege to be able to be engaged in this effort with you. let me introduce my friend and colleague, lanie brewer. >> thank you, tony. the working groups are only as good as the people who are involved. they are only as good as our willingness to deal with the issues at hand and tried to find a comprehensive approach. my view of all of these issues is to say that to some degree, we have different areas, but on different levels, fraud and criminality morph. they more by the subject matter. right now, what the working group does is exactly what tony says. it gives us an opportunity to give real -- have real

discussions with experts. i think, at least my criminal division will be better. we will start focusing. give you a real example, one of my deputy chiefs, i said i wanted us to deal with the issue. a few weeks ago, one group was exchanging ideas with others. what we need to do is raise awareness. we have to understand that fraud, particularly at a time of financial distress, when people are feeling more vulnerable, is a time when people are absolutely at their most vulnerable and their greatest risk of fraud. we also have to be realistic that crime today is global, and we have to be realistic that more and more today, organized groups will sometimes perpetuate

fraud. one of our goals, one of our goals in the criminal division, is to try and identify who is committing these crimes, and how are they committing them? one thing we know is that some crime, consumer-related crimes, are internationally based. sometimes they realize they can better state law enforcement if they do it abroad. we're trying to deal with our international partners. we will talk to our partners in west africa. we are working hard to extradite people and identify them. it is why i was recently in romania to talk with our partners, where romania has been an incredibly strong partner with us in dealing with the identity fraud and many of the kinds of scams we are here to talk about. jonathan from my office is here.

we identified disaster relief a fraud. since katrina, we learned that americans and others have huge hearts. when people call up and say, i am raising money because of this calamity, could you just donate money, people do. we have created at ellis you a comprehensive approach where we have agents from all different law enforcement agencies. it has worked. we have not eradicated fraud, but we have prosecuted many people we have received high sentences. we have educated people. just this week and last week with the tornadoes that ravaged parts of the u.s., we immediately started a new educational campaign. that is what we are going to do today. we will keep learning and trying to do more. we will try to educate those who are most of all honorable, sometimes we know people are embarrassed that a sc they

wereammed. -- were scammed. maybe they gave money because they thought their life's partner needed money. maybe it was an elderly person who was defrauded and thought a grandchild needed money. we acted together to figure out how we can help our most vulnerable. we in the criminal division have identified that these boiler rooms in coaster rica, where criminals from the u.s. and other places ago, nearly 24 hours a day, they man the phones with consumer fraud. you have won the lottery. send us this much money. a relative has suffered a disaster. send us this much money. we have extradited those people. one of them was recently sentenced to 30 years in jail. a group of others were sentenced

to up to 10 years in jail. prison has to be a component. lastly, in our partnerships, such as with the u.s. attorney from the central district, we took down a group called armenian power. it is an organized crime group, an organized gang. they are a violent gang, but they also involve -- engage in consumer fraud. we went after them and we were prosecuting them. we have prosecuted their leadership. i am glad i and my team will be able to hear from folks today. we will keep working forward. we will keep holding those who would perpetuate these kinds of frogs responsible. thank you. -- kinds of frauds responsible. thank you. >> good afternoon. i am the head of the enforcement division at the consumer

financial protection bureau. we are the new kids on the block. i was thinking today as we were meeting with the consumer advocates that we probably -- at less than one year old, we have probably been doing this for about as many days as the collective group of people have been doing it for years. we are gratified to be invited to join in these efforts. we come to the table with a wonderful array of tools. part of our objective is to think creatively about how we will use that set of tools that we have been provided by the congress. we have the ability to engage in the supervision, enforcement, roll-making, consumer engagement, consumer response. all of these tools together help us be more effective in the way we do the work we are all engaged in. the references that several of us have made about the earlier session with the consumer advocates, i thought, yielded a good example of where that kind

of collaborative activity is necessary and justified. i thought it was striking that the single topic raised most frequently in that group as to what was an area of concern was illegal and fraudulent conduct associated with debt collection. it was a topic over and over as we were talking earlier today. earlier this week, our director indicated in a speech to the state attorneys general that he thought this posed an opportunity and a challenge that we should all collectively take on together, that there has been outstanding work that has been done with respect to efforts to undermine its illegal and fraudulent conduct associated with debt collection. the ftc has brought more cases in the last year than maybe ever. they have done that in collaboration with the justice department and the u.s.

attorney. the attorneys general have been working on bringing debt collection cases consistently and regularly over the years. yet come in a meeting today, it was the single topic that drew the most attention. what that says to us is that we need to collectively look for ways to do things in new ways, different ways, to utilize new tools, new concept -- concepts and ideas, about how we can bring about the changes we would like to see, and not only in this area. i use debt collection as an example of one of the many areas where we need to do the collective work many have referred to. i want to indicate that we are humbled and thankful about joining with all of these colleagues who have been working for substantial time on these difficult issues. we have generally appreciated the welcoming and generous way that we have been invited to the

table to help fight against consumer fraud. with that, and with our commitment to bring our new tools, our new energy, and our new resources to the table, let me then introduce my friend, david, the director of consumer protection at the federal trade commission. >> i am the director of the bureau for consumer protection. we are the old guys on the block. the ftc is the oldest consumer protection agency with both the consumer protection and competition mandate. over the last three years, we have focused our resources on "last-hour frauds." -- "last dollar frauds."

we do policy initiatives. we do a tremendous consumer work, which is available at our website, www.ftc.gov. i want to talk about our enforcement cases because the commitment that tony spoke about earlier and attorney-general holder spoke about earlier, i think, really deserves a moment of reflection. i have done consumer protection work for the last 35 years. never before have the federal agencies involved in consumer protection met with consumer advocates, heard them, and made the commitments that the government is making today. tony's forces have grown exponentially. we have kent. we finally have the resources to play offense, not just defense. i want to talk about the ftc's enforcement mission. when we bring an enforcement case, we had three goals.

stop the fraud. get whatever money we can find. return it to consumers. then, refer it to lanny, and tony, and andre, and hope that the justice department puts these guys in jail. let's talk about the enforcement work. as long as we are gripped with this economic downturn, people are going to be in default or facing foreclosure. that is a breeding ground for abuse by fraudsters. we filed our 35th case against hundreds of defendants engaged in scams. we will continue to do this work at a high volume until we root this problem out. mortgage servicing. yes, there is a tremendously good settlement against the top five. there are more mortgage servicers out there who need to see the federal government. we are working.

i know the department of justice is also working on these issues. in terms of resources, it is the largest issue we confronted. we confronted it in multiple ways. there are a lot of debt settlements games. if you listen to the tv at night, if you owe more than $10,000 worth of debt, call us. we will renegotiate interest. we will pay down your principal. most of those -- -your principle. most of those are frauds. this will not go away. phantom that. people are complaining that they're being called by debt collectors and day owe no debt. often, these are people who searched for payday loans online. they are getting calls from call centers in india. we know where they are. they're trying to force people

to pay debt and they don't owe. we have shut down 10 of them in one case. we filed a two weeks ago. there is more of this litigation to go. debt collection. we filed eight cases in the last year. we have got more to come. debt collection abuse remains the largest single complaint we get at the federal trade commission. we have been fighting this, and with the cooperation of the justice department, the complaints still go on. we will be doing more enforcement of this. we are also going after debt buyers. there is a new industry. stale debt used to be written off. now we call it zombi debt because we cannot kill it. -- debtperors'

collectors are buying this debt. we are very grateful to have the justice department's help. payday lending. payday lending abuses on the rise. payday lenders are now hiding offshore or residing on indian tribes and claiming immunity. we filed against one of these operations last week. jobs gams and business opportunities. with the unemployment rate stubbornly high, people out of work or who want to find extra pay, job scams have proliferate. there will be a panel on that later this afternoon that will talk about our work. government grant scams.

still on going, even though the stimulus program is over. we have talked about this before. wire fraud scams. fake check, lottery sweepstakes, contest scams. they're proliferating. we are going to the scammers and turning them over for prosecution. we are also going to the wire transfer companies that enabled us. we have an order against moneygram. we have been working with western union. precious metal scams, telemarketing scams. i can go on and on. our mission, until the economy brightens, is going to be going after these scammers, shutting them down, taking whatever access we can, and turning it over to the justice department.

thanks so much. let me introduce my colleague. u.s. attorney in l.a. and is a good partner of the ftc. we are grateful for his work. [applause] >> good afternoon. i bring greetings from sunny and extremely warmer los angeles. it is a privilege to be able to spend time with you this afternoon. i look forward to learning a lot from you here this afternoon. i am the united states internal in the central district of los angeles. it is the most populous districts in the country. i represent almost 80 million people. with a district with so many consumers, it is home to a variety of targets and crimes that you have heard about today. some examples include foreclosure or loan modification scams.

your advance loan schemes that targets small businesses. importers of counterfeit goods skirt regulations to sell to low-income neighborhoods. abuse of tax preparers target low-income taxpayers and skim the inflated refunds. fraudulent immigration practitioners who charge. i can go on and on about the different scams in our district. we have been very proactive in the central district of california and throughout the nation. our colleagues have been working very diligently on this effort. our objective is relatively simple. it is to investigate these crimes to educate the public about these scams and to hold those individuals accountable. let me give you a concrete examples of what these scum artists really do.

just last week, we charged an identity theft case in which the defendant was alleged to have stolen credit-card numbers from more than 600 victims by sending out phishing e-mails that looked like banks. a father and son were sentenced to more than 150 months in prison and ordered to pay $39 million in restitution for running a scam that defrauded more -- defrauded victims. last month, a corporation in los angeles was ordered to pay $1 million because they were mislabeling vietnamese catfish. last year, a man was sentenced to six years in prison for conducting a phony, secret shopper business, an opportunity

scam that included offers to make people bartenders. there were 80,000 victims in the district. those are just some examples we have had in the courtroom. our victories in the courtroom are not all we need to do as it relates to combating fraud. you will see u.s. attorney's offices throughout the country working with our partners from the civil side, the regulatory side, and consumer groups to deal with these issues. in many cases, and an ounce of prevention is a pound of cure. we want to provide consumers the tools they need and educate them after the scams that are going on. the only way we can do that is by working with good people like you here today, to exchange information, and hopefully develop strategies to go on and target this type of crime going on throughout the nation. we are only as good as the information we receive.

the information we received in the early session was quite productive and informative. i have a lot to bring back to my district. i will share that with my colleagues throughout the country. i look forward to hearing from all of you today and the great work we will continue to do to ultimately achieve the goal of protecting our consumers. so, thank you. >> thank you, adndr. david, if you do not mind telling our panelists coming up to the stage and we can begin the next portion of our summit. ladies and gentleman, the next portion of the summit will be a panel on fraud on the elderly. the moderator will be michael blume, the director of the consumer branch of the civil division. the panelists will be david vladeck, elizabeth costle --

director of state affairs at the aarp. naomi karp from the office of older americans consumer financial protection bureau. jonathan rusch, deputy chief for strategy and policy. jeffrey steger, the senior litigation counsel for the consumer protection brands -- branch. and abby kuzma, the director of consumer protection in the office of the indiana attorney general. with that, i give you michael blume, our matter -- moderator. thank you. [applause] >> thank you. good afternoon. this panel, i suspect, will be interesting. let us get right to it. we are going to talk about fraud directed at the elderly. it seems to the natural question -- why do we have a special panel on fraud on the elderly?

there is research that concerns particular vulnerability is that older folks may have that make them more susceptible than others to certain kinds of fraud. i would like to start than with the research that the aarp may have done concerning those vulnerabilities. if you could give us some of those factors that make older folks more vulnerable, perhaps, to the frauds you have been talking about so far today. >> it is on. ok. i want first to put in perspective there are not a great many statistics about how many elderly are victimized. we know that elderly financial abuse is dramatically under reported. maybe 24 people are victimized for everyone that is reported to any kind of criminal or social

service agency. and it is probably the most pervasive forms of elderly abuse and mistreatment amongst elderly. new york did a survey and 41 out of the thousand had suffered this type of abuse to. this did not include people who were cognitively impaired, which i will get to in a minute. the investor protection trust survey of older people and their children and found that 20% of those over 65 have been taken advantage of, financially, for and in a prime investment and reasonably -- in an unreasonable investment and high fees. 45% of scam victims were over 50. they included in current 41% of the losses with the foreclosures games. we -- one thing we would like

to research but we have not yet is better statistics on this. met life had a report or the estimated at least almost $3 million -- $3 billion had been lost. 51% of it was a bill by strangers and 34% by family, friends, people in the same church or neighbors. people they knew. i am looking forward to the business opportunity fraud because a lot of older people have lost their jobs and they have been unemployed longer then i have ever been before. -- then they have ever been before. we have done research and my friend is going to talk about one of the reports because although the csbd stole her, she worked at a rb and basically wrote the report. it -- she worked at a rp and basically wrote the report.

it is out there in a call at -- in the hall. it survey and summarized some of the data and try to figure out what financial advisers both dealing with the elderly and the client officers and how they tried to handle the problem on the investment time. i know that naomi will carry that further. i do not always have good news to bring new. we had a very well designed project that came out of the west virginia office. they purchased these lists. i do not know where they come from. that is something that should be investigated. i know they used to be the new windows with -- new widows list. the is aarp volunteers were given the list. they called the people and when -- and spent time trying to

train them to resist telephone fraud. stranger fraud. they tried various messages and they found the one that worked the best was giving them a strategy to respond at each step of the fraud. they did try a -- i two the lot of people to do this. i too was extensive. -- i t was extensive. they wanted to see if they could teach those on the phone to resist scammers. they did find that compared to a control group, two weeks later when there was a pretends camera, they were more resistant. unfortunately, six months later, there were not. there is no longer a difference between the groups. we clearly have to keep educating people. we have to educate the families

and the communities. we also have to try as all of these people are doing to stop the fraud before they get there. many of these people just do not know how to resist it. i think -- you know, one in the issues we have had is that it is not only that people lose their ability to handle their financial affairs. at least people with pre- alzheimer's disease. there also seems to be something about being more trusting. but, it is hard because there are some people who seem very resistant to this. i was just reading "the washington post" yesterday and i read about a green dot scam

but green does not mean go for it. if it sounds too good to be true, it is. i have been doing that for 30 years. it does not always work. when a stranger calls to say you have won something, you have not. crackdown the flutter of excitement. why would somebody call you out of the blue to tell you they have won the sweepstakes you don't even remember answering? sadly enough, people listen to the other voice. the one that says why should dumb luck not smile upon me once in awhile? why not deserve the universe's love? the scammers make a decent living. we have a real issue. in terms of trying to prevent this other than through the great work of law enforcement. >> why would he be -- it be that older folks may say why does

dunlop not shine on me? something about them -- why does, lot not shine on me? dumb luck not shine on me? >> thank you. i want to talk about why older people are vulnerable. i want to hear more about the research we have done. the research shows there quite a number of reasons that older people are targets to fraud in financial exploitation. they include -- this is pretty basic. they are the people of the largest portion of the wealth in our country. so, even though individually, many of them may be poor, that is where the money is and that is for the scammers code. it is maybe they are more trusting and they are more unsophisticated about financial matters. there is out of a presumption

that they are more vulnerable and thus they are targeted because they are perceived to be more vulnerable. and, they may be more vulnerable due to cognitive impairment that i will go into in a second. also, many older people are more isolated and thus they are more dependent on helpers of a whole variety. those helpless have great access to their money and to their -- bills helpers have great access to their money and documents. if these are crimes of opportunity. 20 in on diminished capacity -- to zero in to manage to cast -- capacity, there are people who cannot make decisions and we have family members, the financial-services industry, all kinds of industries and professions saying, all my god, we have this coming. we do not understand it. what are we going to do about

it. -- ? decision making capacity is made up of a number of types of capacity. we have the capacity to make personal decisions about your everyday life. capacity to make health-care decisions. then capacity to make decisions about financial transactions. what we have learned is that financial capacity has been called the canary and a coal mine of capacity. it is the first to go. it is made up of a number of skills including your basic monetary ability, identifying money, understanding demo loans, conducting cash transactions. paying bills. i want to underline the last thing because this neuropsychologist has -- nour as a colleges have identified that one component is maintaining a judgment to act prudently and avoid financial exploitation. you when financial capacity

start to go, people become more vulnerable the population numbers are pretty astounding. head and declining financial skills start to happen when people have mild conative impairment. 22% of americans aged 17 or older have mild, to the impairment. that is a lot of people. one out of a people -- eight people 65 and older has full- blown alzheimer's. you can see where this is going. let us bring it closer to home with an example. dad seems fine. he is still handling his bank account, his brokerage accounts. and then, the bank teller sees him making sudden and and characteristic large aristos -- and characteristic large withdrawals or the broker is

getting close to cash in investments. and to buy shares in a risky start that he just heard about from his new best friend. so, we all know and many of us have had personal experience that it is really hard to take away the car keys when dad's reflexes are getting shot or his vision declines. -- getting slow or his vision declines. we fear he will hit a child when crossing the street. we do not want to take away more -- mom's financial driver's license. we see mom being taken by a lottery scheme, buying an inappropriate annuity after attending a free lunch seminar or getting ripped off by her home care a. you can see that we have the challenge. i would just talk real quickly about the research at aarp public policy institute. it was in the investors fear.

-- investor sphere. we survey people about understanding diminished capacity and whether or not it is a problem. do they have protocols to deal with it. are they -- do they propose to deal with it? what do they need? the message was loud and clear, yet they see it as a problem. all of them recognized it. some of them have protocols, but they are all over the map. the overwhelmingly said that they need training on to mr. cassidy. it should be mandatory, but our -- in the training on diminished capacity. i should be mandatory, but we do not have the tools to do it. we will have to start working together to create them. >> one of the scams you mentioned was the lottery scam. jonathan rusch -- jeffrey steger has done work on that.

what is a lottery scam? how did the scammers use the vulnerabilities to steal money? >> short. -- sure. as a prosecutor, we are precipitating in a number of investigations -- partisan bidding in a number of lottery scams and that are playing on elderly people. essentially, the scammers will call them in the u.s., including many elderly people, and inform people that they have won cash prizes in either a maciel -- in either a car or money. we're talking about millions of dollars that these people are told they won. they indicate that the winnings will only be delivered wednesday individuals pay -- once the

individuals pay fees, taxes, or insurance. victims and that sending the money for a wire transfer through entities -- end up sending the money through the wire transfers or western union or stored value card. the green dark -- dot card. that money ought to millie will be sent down to to make up. -- ultimately will be sent down to jamaica. the offices in the middle of and involved in a number -- the offices in the middle of a number of investigations and i want to get a profile of five recent victims that we have talked to. meaning within the last couple of weeks. i am going to be very generic because these are obviously ongoing criminal investigations. one is a female, early '70s, she was working at the time. she was living alone. i received a call that she had

won a sweepstakes prize of $3 million to 05 million dollars. during the conversation, the fraudster wanted to know what it felt like to win the lottery, that was to gain her trust. they had many conversations and e-mails. he got her trust. she ended up sending tens of thousands of dollars and wiring tens of thousands of dollars, which ultimately we believe ended up in jamaica. second victim, a thick them -- a female in her late eighties in a small town. she awknowledged that she entered the sweepstakes. she was called several times and she wired money to them. a third victim, a male in his late '70s, early '80s. he was a widower. he lived alone in a small town. he was an owner of a small

business during his career. you know, he was a victim of this type of lottery scam. a fourth victim, a female, in her 70's. she lived alone. she awknowledged that she entered publishers clearing house. she was victimized by multiple groups over several months. she wired money. she got suspicious after she did not get her winnings, but they offered her an excuse, saying that because her fees were not coming in as quickly as they had anticipated, her winnings were being delayed. that is how she continued to get caught up in this camp. finally, a fifth victim, a female in her early 70's, i can live in a small town. they center a check to -- sent her a check to pay the fees and

she deposited itn there after richter the money from the check and send it out. the check bounced. to put more meat on this, these people we have been talking to our elderly, but they are not in their 90's or nursing homes. they are people who are living alone. they are independent. they have some this possible income -- disposible income. when that is gone, it is not unusual that they would take out a loan on their house or more typically a cash advance on a credit card. to talk about their profile a

little bit more, these skimmers who -- scammers from jamacia will call the individuals more than perhaps their family members. >> that goes to something we are talking about. what is striking about -- , and about all of these individuals is that they were living alone. -- comment about all of these individuals is that they were living alone. you may have heard of different flavors of the fraud. can you talk about imposter frauds. what they are and also, a little bit about your work internationally. all of this money is being wired internationally. it sounds like they're frauds around the world better similar to ours that can inform what we do. >> thank you. the attack about imposter frost and then i will talk about the broader -- let me talk about it

prosser frauds and then i will talk about the broader scheme. and what we have been working on. imposter frauds can fall into a couple of different categories. one of them, which has gotten a lot of currency lately amongst -- weore fraud stisters first heard about several years ago in japan. the mo is the same as we hear about today in the u.s. people get lists, senior citizens, and when the phone rings, and the person says, is me. -- it is me. it will not work in every instance, but oftentimes, the person will say, johnny, is that

you? that is all they need. yes, bram, it is me. i am so glad i got you. i have been arrested. i am here in france, the netherlands. i need bail money. can you wire me some bail money? or, i have been in an accident. i need money. i have to pay the hospital. can you send some money to me right away? naomi and beth touch about the issues of both kinds of vulnerabilities that may stem from neurobiology. these are the types of scams that readily play on the heartstrings of anybody who makes a mistake and never anticipated possibility that someone would be calling them with a specific purpose of flying from the very first words of the conversation. -- of lying from the very first

words of the conversation. there respond the way they think they need to to help out their loved one. they find out later on that the money did not go to the grandson, but to the fraudsters. as for other types of scams, the grandparents can is a variation on things we have seen increasingly from are on the world. about 10 days ago, at the -- the police made an arrest in individuals who are engaged in the grandparent scams targeting older americans. why is it that they would be doing this? first of all, for a long time, u.s. law enforcement has

recognized there has been a two- way trade in fraud between the u.s. and canada. going back as far as 1998, a series of regional tax forces were set up across canada with u.s. and canadian people to work on a collective basis. all of our major partners in consumer fraud, reaching from the federal trade commission to the fbi, the postal inspection service, have all participated in different ways in these task forces. a reference has changed. when jeff talks about lottery fraud, he did not say south florida or southern california. now, it is costa rica. jamaica. the dominican republic. for their -- furterh places like spain.

we have seen the globalization of crime in general and faud including the globalization of techniques. when we first aired a to compare notes with our law enforcement colleagues going back for five years ago, in australia, canada, the united kingdom, and even nigeria, we started to find that we were talking about the same kinds of scams with the same techniques targeted against the same kinds of senior populations often by the same groups of people. part of what we saw to do, and i think it is fair to say that has focused on this particularly. what we are trying to do is take our ability to respond to these fraud to the next level. where we share information with each other about who are the

main players behind these scams. where they wanting them from? where they getting their lead the list? how are the recruiting? how do they organized? where they moving their money? war and more -- more and more we are focusing on sharing information better, faster, according more effectively, as i think the department and the fcc have done successfully over a number of years. recognizing that fraud has become globalized. in particularly, -- particularly, when you are talking about targeting seniors. ultimately, we have to move faster. share information faster. . collaborate -- collaborate faster. this to existing cooperation between law enforcement here and

in other countries. >> that is coordination amongst law-enforcement. there is the international component affected messages we sent to them reach consumers. david would like to talk about how the fpc is recognizing the international component of much of their works and how it affects messages they get out to the consumers. >> let me put this in context. this has been a terrific summary of the kinds of scams that are plaguing our older people in the u.s. they pose a real problem. a real challenge both for law- enforcement and on for consumer education. so, let me just run through some of the reasons why that is so it. these are retail matters rather than wholesale scams. one of the keys is getting someone on the phone and having a conversation with them. it may be initiated through the

receipt of a fake check or the internet, but generally, there is one-on-one interaction between the skimmer in the victim -- scammer and the victim. a lot of these are not in the u.s. they are in canada, guyana -- ghana. even through and spain show up on our list in terms of where these calls originate from. these are not the boiler rooms in tampa we can shut down easily. third, there are a multiplicity of scams. if he went to educate people about grandparent scams, that is one thing, but they take multiple forms. there are grandparent scams, lot 3 askance, sweepstakes scams. as you want a quiet the form it takes, you geometrically increase the difficulties of doing -- as you enhance the form

it takes, you increase the difficulties of going after them. we want to stop them. we want to close on the boiler rooms. we work very closely with the canadian authorities, the jamaican authorities, and others to try to find these people and stop them. we also are trying to go after what we think is the pivot point here. at some point, the elderly person needs to send money to the artist. that is the point where we can go after them colesville, not free to go. gram.ve money gram we of western union agreeing to abide by the terms in our moneygram order. one of the things we have done and is starting to really yield result is we have insisted on it really clear consumer ads.

if you walk into walmart today, hopefully within one year any of are in the ggrams store. you will see facing you a free manner -- in noranda -- a miranda warning. if you think you have won the lottery, guess again. if you think that check to cash to israel, wait a month because it probably is not. if he had been hired as a mystery shopper, sorry. you are out of luck. their training the personnel who man the desks to talk to an elderly person who is about to wire money across the country, why are you sending the money? and one of the sad part is that

sometimes, they have to fight with the person. you know, you did not win. oh, but it says right here. there are tragic stories in which ultimately, they leave the money all lead, which will not let them wire the money and go somewhere else. -- underscore the difficulty on the consumer advertisement front. >> just to echo what david was saying, in these types of scams, in order to ensure the victim that they have won, they may very well received documents on ftc and doj or irs letter head or federal reserve letterhead. saying they have one the lottery or this amount -- won the lottery. one of the tactics the

government can use is that there are laws against impersonating a federal employee are using this type of stuff. >> if we catch the guy. >> one of the things we are doing is not only going into the wire transfer companies, but for example, a green dot has agreed not to allow a refund in jamaica. we are working with the stored value card companies to try to combat this fraud because as important as stopping -- going after the scammers is, the way i think we will ultimately get a real attraction here is by going after the money and stopping the flow of the money. >> that is an important conceptual law-enforcement tactics that all of us are using, which is something we are willing to talk about. where can we attack a business to stop the flow of money? we have been talking a bit about sophisticated fraud.

the tried and true door-to-door fraud exists. tin men are around. this is something that abby kuzma has been doing a lot of. if you could talk about the door to door fraud happening. >> it is still very common. we at the indiana attorney general's office, have seen all of them. one of the scams that is very common in our area, partly because every year, we face a lot of storms, which you have been reading about in southern indiana and illinois, we always get tornadoes and very severe storms with hail. there are a group of scammers that will go from door to door and state to state following the storms. we typically called them storm chasers. sometimes, we have a different group that we call travelers

that just comes seasonally, depending upon what the issues are. in the case of the storm chasers, what will happen is, they will follow a disaster and it will go door-to-door and say things like, i just read your door neighbor's roof. i have some materials left over. i would be happy to give you a discount on your repair for your house because i have one more day that i will be here. if you can be said right now -- decide right now, make the deal right now, we did it for your neighbor. they are trying to get a number of areas of comfort with respect to i have already been in your neighborhood, etc.. we have seen people get on the roof and make damage so that they can sensibly repair it. a lot of times the insurance company gets involved and attack the person into signing over their ability to take the money.

this is something we see every single year and seasonally, as well. it is a really big problem. we see many of the things that you have been talking about in terms of the person's calpers coming in and taking advantage -- helpers coming in and taking advantage. >> we have been talking about strangers calling up. you are talking about folks to know -- >> these are family members, as we have been discussing, but somebody who takes advantage of this situation of being in the home of the individual. we have also seen persons who are committing identity theft. this is something we warn people about all the time. this is where you have got an individual who is coming into the home to fix the toilet or something in the home and especially elderly people, but any of us, do not think about what kinds of personal

information might be lying around in the house what that individual is wandering around. one of the things we educate people about is before you have some stranger into your home, walk around your home especially where they might be in and cover up everything. make sure everything that anything that has your identification information is taken and put away someplace safe. we find that -- i appreciated all of the research that aarp has done because we find education one-on-one to be much more effective with elderly than anything else. what we do is go all around the state and i would encourage ftc and all of the partners to use the state get -- the state office. we have our rich departments where we specifically educate groups of elderly populations. they listen because they think

of us as being -- we have a certain amount authority for that because we are the ag's office in their states. we have a bit of trust. frankly, i t is harder to reach people with paper. this is a population where you all have also materials on the internet, but they do not use it. they do not look on the internet for information. they do not even know they need the information until you tell them this is what is going on. we do it annually. >> we have to come in the interest of time, wrapup. some people did not know what is out there. could you comment on how law- enforcement learn about fraud and help folks can be more willing to report them? >> well, we depend on the

courage of people to step forward. so, one of the things we have been doing is common ground conferences. we have been doing them all over the country. many consumer groups, legal services -- meeting consumer groups, but legal services, to try to encourage people to reach out. that effort to deal the -- that effort has yielded a difference because we are getting people -- >> that is fascinating. as opposed to waiting people -- waiting for people to come to us. you can reach out to where people are. >> get out of d.c.. [laughter] >> to live for the information. [applause] -- thank you for the

information. [applause] >> thank you. as you are leaving the stage, i would like to let everybody know of a registration table up front, there are lots of different pamphlets and sheets of paper and other information that has been made available by many different public consumer protection groups. as well as by a federal law enforcement agency, the fpc and irs. sig tarp put something out about modifications gams. if you have not already taken some time to look through that information, please do so before you leave here today. the next panel is going to be

a discussion of common tax scams. this is a timely subject, as you know. tax days are approaching. the panelists are sallie cooper, the director of operations from the irs revenue -- the irs. then we have carol id, from the department of justice. they will talk about, and tax scams that consumers should watch out for. -- common tax scams that co nsumers should look out for. >> thank you for having me on the panel. i am sallie cooper, the acting director of the policy and support for irs criminal investigation. one thing we were talking about as we were listening to all the panels is that there is a poor nation of scams we did

permission of scams in every panel that seems to be presenting -- presented. as far as the criminal investigations miss chen, we are the investigative arm of the irs. we support the mission of the irs, but we enforce the criminal statutes relative to tax administration and relate to a financial crime in order to encourage and achieve voluntary compliance with the internal revenue code. once the investigation is complete, we will wrap -- we record a recommendation for prosecutors at the department of justice. we start with the tax people who authorized for us to go forward with prosecution. they then refer it over to the respective u.s. attorney's office. carol was going to give a little bit about her mission.

>> the tax division at the justice department does review of criminal referrals from the internal revenue service. criminal investigative division. our attorneys to a lot of the prosecution, but we really rely on the local united states attorney's to carry the bulk of that water in the criminal prosecutions. we also have a civil arm. more civil attorneys. as you know, there are a lot of affirmative tax litigation's which may be seen as anti- consumer. i have been doing foreclosures for over 23 years, so there are a number of people who do not like a big part of our mission. but, we also combat a lot of that kind of scams that we will be talking about today. for example, getting injunctions against bad tax returns and abusive tax shelter promoters. things like that.

we are working in accordance with the attorney general's recent memorandum and really pushing parallel investigations and parallel proceedings where we civilly shut down a scam, collect any delinquent tax penalties as possible, but also investigate and prosecute criminal it wherever possible. we are really pushing those. >> each year, the irs has been putting out the dirty dozen. that is a list of 12 scams that are perpetrated against innocent taxpayers. i am going to cover a few of them today. topping the list this year is identity theft. again, you have heard that mentioned through several presentations. it is becoming so critical to protect your personal

information. as was just mentioned on the previous panel, even having someone in your home, you have to be careful of what you have laying around. the irs is taking a very proactive look at identity theft. we are sending notices to taxpayers, which is sometimes their first that their identity has been compromised, when we see more than one return being filed and/or we see that a w-2 has been filed in that person's name. in january, the irs announced where we did a court in native sweep trying to attack this identity theft -- where we did a court natives' we've tried to attack his identity theft. anyone who believes their identity of -- their identity was in compromise, there is an identity a protection unit. that information can be accessed

on irs.gov. identity theft was mentioned and also fishing. that is where someone uses e- mail or some other electronic media to try to solicit someone to respond, either giving a personal identification, account information, and for irs, it can appear that it is coming from either legitimate irs inquiry or some related incident -- entity. irs will generally not send an initial solicitation of work request for personal information to a taxpayer. that should be a warning sign right away. if you get any mail from someone that appears to be related to the irs, the concerned and do

not respond. either call irs or go to the website and look for steps to take. that is one way that once they get your information, again, they can use that for all types of scams. they can use it to file false tax returns, they can use it to pay mortgage loans, they can use it for all types of things. it is hard to reverse that. >> let me add, with a fishing, the attempt to get personal information from consumers and what happens is generally, these cameras turn around and file some sort of false refund claim. often, the first notification a victim will have that somebody else has stolen their identity and gotten their personal information and has filed a bogus refund claim is when they go to file their own tax return and it gets bounced because the

irs has argued received what appears to be a legitimate tax return under that individual's social security number. these scammers file tax returns early. in fact, most of them are on vacation by now. if you are like me, you are just thinking about needing to file tax returns. the legitimate folks tend to get really surprised by this. we prosecute -- we have been referring a lot of these refund crimes that are facilitated through identity theft to the justice department. we participated in the january pushed. . since november, when our attorney general testified before our house committee -- we have had a ton of very very strong sentences for refund

crimes that include aggravated identity theft. a lot of these were able to get a restitution component. with restitution, hopefully, two victims -- sometimes they are not -- that everybody involved in a refund crime is necessarily a victim. there is restitution for innocent victims as well as to the u.s. treasury. collecting that is another story. the courts have been pretty receptive to giving restitution to both categories. >> thank you, carol. you made a good point that all taxpayers who are subject to a scam may or may not be victims. the first to the fishing in the identity that, probably there are more victims than it seems. when you are talking about

return repair and you give them your information, you are ultimately still responsible for what is on the return. in 2012, every return prepared needs to have a prepared tax identification number and when they signed every turn, they need to enter their return -- the number on the return. we are focused here today on consumer fraud, but most of the return preparers out there are honest and decent. we are focusing on those ones that are taking a advantage of individuals. some of the things you should watch out for when choosing a prepare is one does -- is, one, do they enter the identification number? do they give you a copy of the return? you should always seek what has been filed with the irs before it is filed. you should get a copy to sign.

are they promising you a larger refund than you thought he would it? that goes back to the old adage -- if it sounds too good to be true, it probably is. do they base your refund -- their feet on a percentage of your refund? that is also a clue because that means they are inflating your refund in order to increase their feet. do they require you to split the refund with them? do not ever sign a blank return and then let them tell that in and mail it in. if you are going to a return prepared to have it prepared, you are responsible for what is going on the return. this comes into a gentle and that was mentioned earlier that argues against fraudulent return preparerers. >> -- preparers.

>> 60% use a return preparer. most of them are legitimate. they have their tax identification number and they do a decent job. it is the ones that are perpetuating fraud and taking advantage of consumers that are the problem. and we can deal with that in the federal government in two ways. number one is prosecuting them because it is a crime to follow -- a file a false return. with the u.s. the other thing we can do more quickly is get a civil injunction against a bad return preparer to stop them from preparing bad returns. backing off -- that can be done more quickly than a criminal prosecution.

we will get a referral from the irs on a bad return preparer and talk to people love work with them, get a preliminary and denton -- injunction and then the community knows that we have a better return preparer -- bad rer.rn prepar a lot of them quickly say we give up. we will start preparing returns. we get a lot of these injunctions by consent. in fact, the u.s. attorney's office in l.a. is doing a fabulous job getting consent in jenkins -- injunctions from bad tax return preparers as part of a plea agreement. they are killing two birds with one stone. what you do with that is you have an incredible deterrent

effect. if you clean your area out of bad return preparers. that really is the power of both the criminal and civil injunctions. and one of the typical provisions in a civil injunction against a tax return preparer is that the return preparer notifies all of their clients that they have been prohibited from the pairing we turns -- returns. and perhaps the ones they did were fraudulent. also providing the irs with a list of all the clients for whom they prepared better returns. now, what that means frequently is that the irs will then go out and find a clients and try to make up the tax loss from the individual clients. a lot of them are very upset. remember, the goal is to collect the right amount of tax from everyone and a lot of these people are have -- either victims of a bat repair or --

or part of it. we tried to collect the route -- the right amount of tax. >> the last one i will touch on today is the term free money. where people put out fires and they advertise that you can get free money from the irs. this typically targets some of the lower income individuals and the elderly as we just heard about. they charge people for filing their returns and sometimes, the returns do not go through. they already have their fees and they are gone with that money. we have a number of tools and investigations we use to go out and identify these taxpayers, do

investigations. our goal is to enforce those laws and ultimately put people in jail that are committing this brought against the taxpayers and the government to detour that from happening in the future. -- to deter that from happening in the futre. -- future. we do our reach so they are aware that these scams are going on and hopefully, when somebody approaches them with something that does appear to good to be true, they think twice about it before they commit or turn over money or turn over their identifying information end, when you are going out to do your own personal health care or other items. a lot of times, a formal ask you for your social security number and other identifying things. i found that because generally, my husband is the primary and i have never had it. they never asked me for it.

they are able to process it without that information. as much as we can get out come as little information that you put out in a public venue, the better. any personal information that gets out is vulnerable for somewhat of a that purpose to get in and use it for misdeeds. they are all to make money for somebody who is getting it that it does not belong to. as far as the irs, if you have any questions or doubts about any information you have received, especially that is unsolicited, please go to www.irs.gov and they have all the official information that has been put out and that would be used by irs for official business. >> just a little reminder on the table outside, we have put down

a press release of this year's dirty dozen. if you want light reading, you can read about the other scams that we deal with. thank you very much. [applause] >> thank you. terrific. certainly timely buys. -- advice. this is a copy of the irs news release that is out front on the dirty dozen scams. as i was thinking about it, the financial fraud enforcement task force has its own website. is www.stopfraud.gov. what i would like to do if possible is make sure that this irs tax scams news releases updated -- news release is uploaded to that website.

our next panel is on business opportunity fraud schemes. the moderator is charles harwood, the deputy director of the bureau of consumer protection. the panelists are lois greisman. andr birotte, the united states attorney for the central district of california. richard goldberg, the assistant director of the consumer branch of the addition of justice. a consumer program director of the u.s. public interest research group. also known as pirs. also a senior manager at the office of the attorney general in maryland. [applause] >> i will let my panelists take their seats. i will begin with that observation. who amongst us had thought,

would not be great if i could start my own job? maybe that thought was leaking, but we took a poll, we would find many of them think they have within them someplace the ability to make it on their own. to start their own business. maybe they will not start the next spanx, but they will do something to make them extra money. in many instances, that stops right there. consumers think it would be nice to have their own business, but they stop at that point. in times of financial anxiety, when people are feeling uncertain, i suspect when people are thinking their job is at stake for they need extra income because they are not getting as many hours they used to be getting and they are facing extra education costs because they have children in college, they are worried about medical bills they may be facing. before they are realizing, for example, their retirement does not go as far.

they are feeling anxiety. frankly, that is the kind of situation consumers find themselves in right now. when they find themselves there, it makes it more likely to decide to take that next debt. to go out and try to make money on their own. to sign that for a business opportunity or to try to find work at home scheme. when they go out in the marketplace and looked around, what they find is there are many many companies and individuals who are happy to help them. or start at work at home program. that is exactly what we are calling to talk about today. business opportunities and work at homes. there are many legitimate opportunities and there i am going to start with lois when the federal trade commission. can you talk to us about the

business opportunity fraud schemes? >> sure. it is a real problem. it is a problem that not going away. people are underemployed. they need to supplement their incomes. what is a business opportunity? it is just a commercial arrangement. i will help set you up in business. you will pay me to help set you up and i will provide you with something that may or may not be real. securing an outlet. setting up a place. location assistants. maybe i will be willing to buy back your merchandise, which is the touchstone of the work at home scheme, where you will sit at home building various pieces of craft and i will buy them back and find a market for you. consistently, a tough complaint against her. the ftc received 1.8 million

complaints. business opportunities for in the top 20. >> thank you, lois. next to loisis rh -- next to lois is rich. >> typically, these investigations we do involve the sale of self-contained units that can be placed in a retail outlet. the locations are promised by the business opportunity firm as well. they are supposed to be high traffic, high profit locations. the buyer of the machine is going to earn a large profit. frequently, these salespeople will tell prospective buyers they will make their money back within a year or so. they will send them to references who claimed they on a

successful opportunity with these machines. frequently, they are the cousins are brothers or other sales people posing as real customers. in reality, they are being paid to lie to prospective buyers. the prospective buyer is sent to locators. they are just part of the conspiracy. one of these scams some of our attorneys in the office have uncovered is a particularly nefarious kind of scam. this was a scam that appeared to be out of the u.s., different cities where these scam artists purported to be in the u.s. that purported to sell greeting card display racks. in reality, they were in costa rica. all signs from the prospective buyers indicated they were in these cities in the u.s.

they used voice-over ip to make it seem like they were using phones in the u.s. and other mechanisms to disguise the fact that the salespeople, the locators and the references were sitting in a boiler room in san jose, costa rica. they had various phone in the boiler room that indicated the u.s. phone number they were from. they had scripts st., i am john doe and i am a successful -- they have scripts saying, i am john doe and i am a successful buyer. we were able to execute search warrants for costa rica and on the opportunity rooms. they were able to do a number of arrests and extradite these

folks back to the united states for prosecution. they received high sentences as a result of the prosecutions. the scams we have prosecuted have been ones where it is not true that these consumers should have been aware they were being scams. this is not the circumstance of, if its looks too good to be true, it probably is. these consumers are doing due diligence. they are calling references and locators. they are looking at the better business bureau to see of these businesses are highly rated. these scams will open up under one name and run for nine or 10 months and close down and reopened under a different name or location. there is no way the consumer or the better business bureau could no this is a fraud that has been going on for years. in some context, that advice is good for consumers.

in the business opportunity industry, they will not know. they need to look at the end baez the federal trade commission gives. otherwise, they will -- at the advice the federal trade commission gives. otherwise, they will fall for these scams. >> anything i say may not necessarily be the opinion of the maryland attorney general. it is based on my own knowledge and education. having said that, many scammer as rely on technology and websites and up selling. telemarketing and cold karl -- cold calls are alive and well. we got several cases. one of them involves an elderly woman. it is atypical. a caller calls and says he has a

business opportunity. she would purchase an internet web site where she would sell travel packages. she would earn some commission. it piqued her interest. another caller says he will be her account manager if she buys three levels of packages. she could are and $9,600. he tells her she will get travel binders that will have discount coupons. she buys a virtual office and give him $300. after that, b says, you might need national advertising to increase your sales. she gives him a credit card number and pays another $1,500. a day later, he says, you can earn $1,000 as a level one director package. she pays an additional $2,000.

two days later, she is called to upgrade to a level b package. she was concerned because she had a credit card with a high interest rate. she put $4,000 on that credit card. the two weeks later, c calls and says, you should upgrade to a level three package. she says, all i have left is the money for my doctor's college education. college education. she is told for an additional $600 she will get an auto responder for the website. she never received the binders. she invested $18,000 and made

$0. in our state, the commissioner does not have the authority to get a payback. there is no money. this arizona company filed bankruptcy. she thinks as a creditor, she is going to get her money back. that is not true. maryland has issued a show cause order. they have not responded. in the order, it alleges violation of the act and fraud and other misrepresentations. it seeks a permanent bar against the company and the president or offering and selling business opportunities in maryland. the problem with all that is, many of these companies resurface as a new entity, a new company name, or spouses or sales reps are at the helm of a new company. >> thank you. andr birotte is the united

states attorney in los angeles. peggy talked about a consumer losing $18,000. could you talk about some of the business opportunity fraud cases your office has prosecuted? what kind of relief or convictions have you been able to obtain? >> i mentioned some of them in my earlier remarks. one of the advantages is that we tried to develop our resources so we can get the biggest impact. i am been blunt. i am talking about the sentence. we will take cases that have a high dollar amount. given our dwindling resources, we are talking about fraud schemes that are from $2 million to $5 million. we'll have about 200 federal

criminal prosecutors -- we only have about 200 federal criminal prosecutors in our district. we have to pick and choose as it relates to the cases. we have sentencing guidelines that dictate guidelines to the court. often, these rods teams are tied to the loss amount. if we are going to -- fraud teams are tied to the loss amount. you mentioned the individual who defrauded 87,000 victims. we have that people go to prison for 12 years. we are really talking about high volume amounts with high sentences. we want to be able to have the press and the public know that

if you tried to commit these schemes, the federal government is going to be watching and we will hold you accountable to the harshest sentence we can. >> thank you. let me turn to lois. what other activities are you taking to protect consumers from these scams? are there regulatory activities our rules in place. after lois, i will come back to peggy. >> there is a regulatory requirement that requires the seller of a business opportunity to provide a one page disclosure about who is the seller, what is the nature of the business opportunity, prior litigation the seller may have been and bob in, if any earnings claims are made -- have been

involved in, if any arnes claims are made. they have to provide written substantiation for those claims. there is a list of references required so that the consumer has the ability to find out who purchased this most recently and what was their experience. the disclosure experience took effect march 1. the ftc and our partners at the state and federal level will be vigorously enforcing it. >> how about at the state level? what sort of resources are billable for consumers who want to learn more about business opportunities at the state level? where can they turn? >> we have the business opportunity sales at. i like the new business opportunity rule. it says they only have to make a payment. before, the threshold was a

payment over $500. under the new federal law, work at home schemes are covered. that is a good thing. our law does not cover that. the business opportunities that have been historically covered will continue to register. it will be a requirement to file an in-depth disclosure. it will give greater protection and more disclosures related to the business opportunity. the first thing it would do would be to describe what the seller promises to do. it is going to talk about the agreement and the location assistants and the name of locators and those types of things. one of the most important disclosures is whether or not they will get exclusive territory. competition is important. they are going to disclose arrangements and they will

include a copy of their audited financial statement not older than 13 months. they will include risk factors if there is a high risk. they are going to get this disclosure document under the federal or state rules. they will get it before they pay any money. under the federal rule, they get it 7 calendar days. in the maryland law, it is 10 business days. consumers have time to review that disclosure and to check it out before they invest. >> i want to get to ed. a question occurred to me what you were talking. there are a lot of tools for dealing with business opportunity fraud problems. what is your experience in trying to pull those tools together and to make a coordinated effort to try to stop this?

>> it is federal and state, civil and criminal. in each of the last several years, we have coordinated with our law enforcement partners. we call them thought initiatives to pull together resources to tackle business opportunity fraud and bottom dollar fraud. the most frequent one was called in promises. no less than 90 actions were filed by the ftc and its law enforcement partners. this gives us the ability to have a maximum impact and visual impact that gets a lot of press covers it. we couple law enforcement activity. >> on the state level, we have limited resources for criminal prosecutions. we work with the ftc, the u.s. eternal -- u.s. attorney, the

postmaster general and the fbi. maryland has initiated an investigation. we needed some additional assistance. we went to the u.s. attorney's office. there was a search and seizure warrant that resulted in a federal prosecution and a criminal conviction of a 32- year-old mormon who was sentenced to 32 months in a federal penitentiary. >> ed, you are really being patient. what about criminal prosecution that the federal level? have you been successful in working with the states and the ftc? >> we have participated in all of this with the federal trade commission. over the last several sweeps, we have added criminal prosecutions up to 140 criminal prosecution of business opportunity fraud

stars -- fraudsters. ringleaders have got a consensus of 15 years and 20 years for this -- gotten sentences of 15 years and 20 years for this type of fraud. some folks have led to places like coaster rica and the philippines. if foreign governments have been cooperative in exit -- in expediting these people to face prosecution. >> this is nationwide. in a world of dwindling resources, the task force model seems to be working well wherever you are. most of our big cases, we get from our partners on the states local level. in some instances, that can be the tip of the iceberg.

we get information about a ring that has gone on and we start to build upon it and get grander losses that will get to our guideline level and bring a big impact on the community. >> ed, we have heard about the scams and the injury. who are the victims in these scams? i these people who think they can make money overnight? >> people should turn to their left hand turn to their right. look at the people sitting here. it is not the other guy. it is educated people. it is people who have done their due diligence. we have last dollars scams that target individual consumers for mortgage relief and debt relief. we have scams to target people whose jobs have been downsized and whose spouses have been laid off. retirees whose 401k's read like

stephen king novels. >> ed, are we seeing the same thing with your victim's? >> we are trying to get victims to come forward. we recently had a press conference. we were able to get folks to come forward. one of the people i worked with in the city of los angeles in my prior job as a -- he was a management analyst. it fell for it. the challenge is getting people to come forward and not to feel like it cannot happen to anyone. >> in addition to law enforcement, there is an educational component to all of this. ed, do you want to talk about what kind of educational efforts have been made?

>> the federal trade commission website is the place consumers start. look on the web site at at business opportunity fraud. you should also check with your state's attorney general. you can find the address there or on your state website. the national consumers league is here. i would really advise people to not pay attention to the information from the people working possibly in fraud with the fraudster. consider talking to their friends, talking to local consumer groups. say, i am thinking of giving someone i don't know $10,000 or

$20,000 to make a lot of money. consider hiring an attorney for a one hour consultation. i would go first to the ftc. >> take a look at the disclosure document. to one rained by it page to make it as accessible as possible -- we streamlined it to one page to make it as accessible as possible. often, victims are sophisticated people. there is no quick fix here. we have got to remain as vigilant as we have been in enforcement in this area. >> if the worst happens and people find they have been victimized, what should they do? they are not going to get their money back. what are your thoughts?

>> there is a reason we have tens of thousands of business opportunity complaints. we use them. they go into a centralized database. last year, 1.8 million such complaint went into that database. they are a treasure trove. it is a research we can use when we know there is a crook operating out there. we can find victims to help us build up the evidence we need to shut them down. i urge people to file complaints with the better business bureau and the state attorney general. >> i would echo that. your state and federal regulators and your attorney general post office as a website. hasttorney general's office a website. we constantly send e-mails.

a lot of the fraud we see it comes out of arizona and nevada and utah. sometimes, it is necessary to contact the agencies out there. the main thing is to report it and to come forward. the first question people ask is, how do i get -- how did i get myself into this? there are lots of people who fall for business opportunity fraud. there is nothing to be ashamed of. the real question is, what can i do about it? it doesn't mean they are going to get their money back. it is important to report it if you know someone has been a victim. may prevent other victims. there is a new kid on the block. we have seen a new company that contact the victims and says, they can help them get their money back. now they become victimized a second time.

>> andre, you want to say anything else before we close? >> the key thing is to report it. people are too scared to tell their friends about it. that is what allows the cycle to go on. the whole purpose of this roundtable town hall is to develop those relationships and those partnerships. i am coming out here from los angeles. i am going to take this on the road. you are the vehicle by which we can get the word out to the streets, to the churches, a different community groups, let them know. these are great web sites and tools. if no one knows to go to ftc.gov, you can take that message out to community groups. asked us to come to you and give

a presentation. we have a community relations specialist in our office. their teen purpose is to spread the message of what -- their purpose is to spread the message. we are only as good as the information we get. it is a two-way street. i would encourage you to take us up on that offer. the attorney general and lanny breuer are serious about engaging in that continuing dialogue. >> on that forceful and powerful know, we will stop and turn it back over to our host. thank you. [applause] >> ladies and gentlemen, thank you. that ends our panel session. what you saw here today with this summit and the three panels and the remarks by the attorney general and the other people

from the consumer protection working group best an example by what this financial fraud task force is all about. it is a mechanism to allow all of the different federal stake and local law-enforcement agencies and inspectors general and state attorneys general to get together -- federal, state, and local law-enforcement agencies and inspector general and state attorneys general to get together to increase our enforcement efforts. what we just saw today is a good example of that in action. as many people have said, this is not an end, but a beginning. we will continue to work together. as the attorney general has said, the consumer fraud schemes and i settled fraud schemes are as diverse as the imaginations -- and financial

fraud schemes are as diverse as the imagination will allow. we will continue to pursue them to protect the american consumer from being victims of financial fraud. we thank you for your attention today. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> four panels on consumer protection this afternoon by the justice department. if you missed any of them, they will be available in our video library. saturday on c-span radio, a preview of the argument on the health care bill. several cases against the bill side to the 1997 oral argument. a case about congressional authority and the rights of the states. that is saturday starting at 6:00 p.m. eastern on c-span radio. ernest hemingway is considered one of the great american writers. his work still influences readers today. not many people know of his work as a spy during world war ii. >> german submarines approaching

fishing boats say, we will take your cat in your fresh food. he says, i will wait for them to come alongside. we will lob hand grenades down the open hatches. they will machine gun the germans on deck. >> nicholas reynolds on artists hemingway, the spy. >> fire j. edgar hoover? i do not think the president could have gotten away with it. >> a detailed of the fbi's 100 year hidden history. >> hoover stands alone. he is like the washington monument. he stands alone like a statue encased in granite as one of

the most powerful man who ever served in washington in the 20th century. from woodrow wilson to richard nixon. there is no one like him. a great deal of what we know what we think we know about j. edgar hoover is met and legend. >> enemies, a history of the fbi. sunday night at 8:00 p.m. on "q & a." says whatime minister lies ahead. he says democracy is not a concept, but a system that has to be built up a piece by piece. he spoke at the carnegie endowment for international peace. it is one hour.

>> it should be apparent that the arab awakening will not be measured in months, but in decades or maybe generations. in the last 14 months, long time autocrats have fallen. in syria, the president's days also appear to be numbered. these are hugely important developments brought about by events of tremendous courage. they are only the beginning of

the story. now began the painstaking work of governing and rebuilding. lester maddox and the fall of a dictator is decisions made today by leaders in cairo and elsewhere. they will shape the future of the arab world. in libya's case, the fall of gaddafi raises a host of challenging questions. how do you rebuild political institutions followed by 42 years of misrule. what can be done to ensure government is transparent and responsive to the will of the people. how do you disarm and reintegrate the country's militia. how do you breathe life into the economy? our guest this morning -- guest this morning its familiar with

all of these challenges. he was a dissident under the gaddafi regime. he left in the 1970's and was educated in the the united states. he served as a professor of electrical engineering at the university of alabama for several decades. he dropped everything early last year to join the uprising last year against gaddafi and take an integral role helping finance and lead the revolution. last october, he was elected prime minister of libya by the national transitional council. he is responsible for overseeing the country's rebuilding effort and shepherding libya's elections this summer. it is our great pleasure to have him here today. ladies and gentlemen, join me in welcoming his excellency. [applause]

>> thank you. distinguished ladies and gentlemen. good morning. i am honored and pleased to be here with you today. i want to thank the carnegie endowment for international peace for their invitation and for their outstanding program, which supports and promotes the rights of people with freedom and dignity. very pleased to be here. for many libyans, myself included, freedom and dignity in our country or distant dreams. only 8 months ago.

gaddafi used the most [unintelligible] tools in his arsenal. gaddafi used the most [unintelligible] in his arsenal. systematic oppression, brutal violence. was theme's priority dehumanization of our people. his political theory was self service. to his ego and his interests. after over 40 years of silence, libya could be silent no more.

driven by a desperate desire for dignity and an iron resolve for freedom, they erupted. on february 17, a little over a year ago today, our young libyan man and woman took to the streets protesting peacefully the unjust imprisonment of libyan activists. just a few days later, this was echoed in aaa. people took -- this was echoed in tripoli. the people took to the streets. eventually, other citizens followed.

the first popular revolution in the history of libya broke out. however, the road to dignity, its quality, and freedom was costly. -- dignity, it quality, and freedom was costly -- the quality -- equality and freedom was costly. there were rivers of blood. hundreds of thousands of deaths. it was determined to deliver on an unwavering promise. the most violent attacks were launched against our people.

supposedly, his people. fire was opened on unarmed protesters. heavy weapons were used to crush them forever. they were not to be crushed. that was the moment and the tenacity in which the tide of history was turned. our brave men and women, armed with nothing but courage and resolve, which against be well equipped to adopt the army. untrained, but determined man, thirsting for freedom, picked up weapons to fight, picked up weapons for the first time to fight.

women pushed their sons, brothers, husbands, fathers to join the quest for dignity and freedom. some of them are here. others worked the phones and the internet to plead for help from the international community. it was a difficult battle to say the least. the gaddafi killing machine would not slow down. libyan lives were [unintelligible] in the thousands. body parts of hundreds of our young men were lost. literally thousands. i am not sure if i should say this. you need to know that many of our young men and women were raped.

and for others, the reproductive organs were literally cut off. as the revolution was entering its second month, things were looking painfully gramm. -- grim. we all held our breath. resolved and the decisive point of no return our reach. this turned events around. you, the international community, chose not to sit quietly and what as we were being massacred. to our gratitude, the international community decided to implement the u.n. resolution to protect civilians and rallied to our support.

the international community was united under the u.n. resolution, the cornerstone of which was to protect innocent civilians. these enormous efforts were initiated by our arab brothers and sisters in the arab league and later with our friends and partners around the world. i take the opportunity to tell them all thank you. such efforts gave us the motivation we needed to continue our fight and push forward i nyieldingly. our citizen army of teachers -- unyieldingly.

i was citizen army suffered great losses along with the rest of the civilian population. they stood strong in their pursuit of democracy, shared governance, and rule of law. and, sadly,courage amd with great loss, we managed to push back adopted forces to the east of libya. we endure and brought the inhumane siege down and maintain the ability of our country. we took control of the western mountains. then we liberated tripoli.

after a few months and thousands of deaths and wounded young men and women, we read our holy country from the grip of this tyranny and declared liberation of libya. the thirst and hunger for each quality and democracy within the libyan people, which has brought to life freedom and has given us back our dignity -- the libyan revolution is proof of the incredible resilience and tenacity of the libyan people. gaddafi may have believed he has contained or even extinguished libya's dreams of freedom and dignity, he was proven wrong.

comprehensively and graciously wrong. when asked the question, who are you, we are libyans and we will be three. yes, now we are all three. today, a year after the outbreak of our great revolution, this is electrifying spirit is still alive on the streets of our country. it is exciting. it is liberating and it is truly something. humbling specifically to those of us who are entrusted with political responsibility during this period. it is tempting to speak of

guardianship. but that would be too presumptuous. all libyans are guardians of the liberation. i see our interim government as being primarily to a silicate and focus the tremendous energy of the libyan people to help to ensure that it is used in such a way to realize the and of the revolution and to keep it alive. we acknowledge that the times ahead will be challenging. 42 years of dictatorial rule have taken their toll on our country and people. 42 years. we cannot build our new country overnight. we cannot build a new

institutions overnight. we cannot build awareness, understanding, and acceptance of a new order overnight. all of this will take some time. mistakes will be made. however, the audience will prove their perseverance and resolve yet again and rise up to the challenge. there may be times when things in libya may appear to be deviating from their tracks. we, the libyan people, will bring them back on course. libyans are learning for the first time in four decades to have trust in their government. most libyans have never known a government and never cared to know that government which

deserted their respects. quite the opposite. -- deserved their respect. it is up to the members of the government to prove they are different. we understand and respect the principles and the spirit of the revolution. we are acting in the interest of all libyans. we are building the future with them and for them. the principles of the revolution need to be nurtured and promoted if they are to be of help. -- upheld. libyans fought for democracy. it is our job to pave the way for the market to take -- the way for democracy to take hold in libya. we realize the market see is not

just a concept, but a system that has to be built up a piece by piece. the national transitional council, our presiding body, recently passed the election law and appointed the election commission that will carry on the job of the elections. soon we will be electing the national assembly, the first democratically elected body in over 40 years. my government will do its part to ensure that these elections are a success because we understand that these elections are the first stage of libya's acceleration to general -- a genuine democracy. there is surprising parallels

between the liberty -- the libyan and the american experience in fighting for democracy. during and after the american revolution, the states were led along the path toward an elected government and to the drafting of the american constitution. much the same way be transitional government has represented the libyan government. it will guide the upcoming election of the national assembly in june. the national assembly will oversee the drafting of a constitution, which will serve as the bedrock for our democracy and ensure peaceful transitions between elected governments. it will define the rights and responsibilities of all libyans.

george washington once said, the constitution is the guide that i will never abandon. libya has embraced this idea as we move forward with our democratic transition. the libyans also fought for human rights. as an interim government, we must pave the way so that human rights are respected and guaranteed. as i explained in the session of the human rights council in geneva, several concrete steps toward ensuring that the human rights of all libyans have already been taken. violations of these rights have been and will be investigated. in this regard, we have formed a ministerial committee chaired by the minister of justice and

with membership of the minister of interior, defense, culture, and civil society. the indians fought for justice and the rule of law. it is this government -- libyans fought for justice and the rule of law. we have a diversity of people in libya. our differences are writed -- rooted in the past, not in the future. we believe in equal opportunity for all. we believe in a libya in which second-class citizens have no place, and libya in which all libyans, regardless of background, gender, or affiliation, have freedom, equal rights, access to opportunities, and a voice in civic affairs.

we believe in a country in which women have a strong presence and play an active role, a rightful role, in shaping society and building the future of libya. we are also committed to national reconciliation. we are well aware that without social peace, no country can move forward. we have been actively involved in this and are seriously exploring the possibility of forming an association for national reconciliation, streamlining the process for reconciliation and related issues. since i am at carnegie, i should also add that we are working to build a strong civil society, which will serve to address

social problems, promote transparency and accountability. over four decades, the gaddafi regime misappropriated resources, which should have been used to the benefit of the libyan people. this cannot and will not happen again. libyans finally deserve to live up to their potential, enjoy a better quality of life, first- class education, and excellent health care. on the international scale, we are lay the foundation for the emergence of libya as a mediterranean financial center that links europe and the west to africa and the middle east.

a country engaged in the international community as a responsible and dependable source for good in the world. a country that will engaged the international community as an effective, collaborative partner to address key issues like human rights. there are some who chose to dwell on our challenges, on our differences and on our mistakes. i have no problem with that. i believe that in further ring -- in furthering that, we must understand the history of libya. we have much to discuss and learn as citizens of our newly-

free country. to learn about our responsibilities and the role of civil society and the free media. i make no apology or repeating this again. we have all of the institutions to rebuild from scratch. a huge challenge, but a truly exciting one. like all countries, we have challenges. like all countries, we have differences. like all countries, we make mistakes. the question for me is whether we have a plan to meet those challenges. whether we have a common vision much greater than our differences. and whether we can learn from our mistakes.

i would like to offer a resounding yes. to each of those questions. there are too many examples in recent history of countries that have failed in their bid to accelerate the transition from dictatorship to democracy. this have -- has given plenty of encouragement to there is who insist freedom and democracy take decades, if not centuries, to establish. libya will prove these wrong. we are blessed with many factors in our favor, including our natural resources. above all, we have pride, and

confidence in the knowledge that we overcame one of the most brutal and dangerous dictatorships of the modern age. over the past year, we did what everyone thought was impossible. i know that over this coming year, we will again do what everyone might think impossible. again, we are determined to turn the tide of victory. we have freed ourselves of our recent past. we are excited for our future and grateful to our friends and partners who helped us come this far. we are now proud to call

ourselves new partners to nations who believe in the same fundamentals, freedom, equality, opportunity and success. thank you. >> thank you very much. very encouraging words. we will open the floor for 30 minutes of questioning. before we do that, if i can take the opportunity to ask the first one. i.t. we had some very encouraging words about libya's commitment to democracy and to a pluralistic society before. this has been a concern of many, both in the region and here, of the cause of pluralism in the arab world. will the arab world be finally be able to put in place a system

that ensures a pluralistic society, or will it replace one regimes withratic another. i think you have assured many of your commitment to do this, but the road is not easy in the region and in a country that has not known democracy for a long time. i hope you can maybe shed more light about the reasons for your confidence that indeed the emerging system will be present to any efforts to impose once again one set of rules and one set of pots as opposed to political diversity and cultural diversity at all times. >> [unintelligible]

well, when i first got to be directly exposed to the process of men and women revolting regime, it wasi's some think they gave me a feeling that i never had before. many of us here in fact in this room were in the opposition against gaddafi, and we went through different experiences. we tried different ways -- but this is different. it is not a group -- but it

ended up bringing everybody together. it started with young men and women, and it brought everybody together. it was amazing. when i first was in the western mountains, looking at those young men and women, they were really young, young and determined, and it is amazing. deep inside they felt, yes, they could do it. the first time i saw a large group of men and women in libya, in fact, even in the arab world, but this can-do attitude was not there. in this case, i could see it and i could feel it, pat and i asked

them, what do you need? what is missing here? the mountains and hills were not liberated yet. they said, look, we just need to get going. they simply could not wait, so with that spirit, i guarantee you they would not let go with what they have spurned. it was not given to them. it was not simply a group of -- older men and women telling them what to do. it was them.

and this is the resource that will build libya and guarantee that it has to be a democracy. it cannot be anything else. one of the reasons why we have been having a little bit of difficulty trying to reintegrate these young men and women into the defense ministry and interior ministry, is the fact that they want to make sure that democracy prevails. they say we are not interested in anything, we do not need money, we do not need nothing, but to make sure that we do have democracy. i do not know if this is the answer you were looking for, but i guarantee you this is different. i have never seen anything like it. and i do not know everything, but i think i do about this.

>> thank you, sir. let's open it up, please. keep it short. we have a lot interest and a lot of questions, i am sure. not too much time. >> from somebody who has looked at the villa from outside, i have travelled quite often to libya, and one of the things that strikes someone when you go to tripoli, it is amazing. you have budding entrepreneur doors. this country is going to miracles. there is credible brains. people what to create jobs, and maybe some of the things we should talk about is business. what we can do today can be done to date on the private sector. everything else will take time. tunisia has financing. they are moving for.

libya has been a new market. in nine months to a year, this is going to be the game changer, not only for the region, but for the west, also. >> thank you, sir. ok, please. >> my question is, do you believe that equality between men and women is the right answer when the transitional government has announced it as the first new law, that production of polygamy -- [no audio] >> i was one of the victims of

the regime. when it first happened, i was a mere child. i have lived in libya during gaddafi, and i know exactly what happened. bair question -- my question is the rebuilding of your going to have in libya. you have asked the prime minister recently that you want the turkish construction company to go back, and maybe this gentleman cost question -- demint's question -- are you ready for these projects to start, and is it something they can trust? that is the biggest question in the minds of everyone, including american business. >> the role of women -- we

believe in that. i have nothing else to say but to give you an example. my wife has more to greece and i.t.. -- has more degrees than i did. it is not an option, and therefore right, and we can see some very smart libyan ladies. one of them is our minister. it's fantastic lady. there are some more here. they're more plebeian ladies and take -- there are more libyan ladies and will have their place, and we will love to see them do miracles, and i am sure they will. polygamy -- i do not think this is a proper place to discuss this, but i'm fine with one, you

know, so -- and i am not going to add another one. if i forget my title as prime minister and talk to you directly, how many of us have a wife and more than one without being wife? many of us unfortunately do that. but in libya, i can guarantee you this is not going to be something -- and i do not think this is something people want to do. i do not know how it came out, but i do not have to worry about it. it is not going to be a problem, i guarantee it.

profit starting soon, yes, we want them to -- projects starting soon, yes, we want them to start. ?lose to 100% pe can it be better? yes, anywhere you go, security is not 100%. we are looking for long-term relationships, partnerships, i should say, rather than just somebody who is coming their for hit and run type situation. so please do, and if we can help you to come back, by all means. >> let me read some questions from the other room.

we have people sitting in the other room, and they had it to send their cresson's -- their questions. three questions, if i may. one has to do with groups in libya who are resisting demobilization and appear to be preparing to influence the coming election. what will the government do to prevent armed groups to play a role on election day? the second question has to do with the new constitution and whether it will take into account the desire of many libyans in the east for decentralization. the third -- if you can describe the engagement with libyan civil society and the private sector to date -- and each sector it did to prepare -- to help the

transition? >> thank you very much. i do not agree with the word militia. we have a young man who fought hard, and they had to form groups and they call themselves -- i feel uncomfortable calling them militia, because it is a different. what is happening is these young men are our brothers, our sons, and we'd want to take care of them. they did this for us. it is not like people forming the militias because they belong to a certain sect or because they belong to a certain group

somewhere. you see people from everywhere in libya, and it is literally like that. people came from the eastern part, the south, the west -- everywhere, and they came together and fought together. everybody -- no, it was from everywhere. in tripoli, the same thing happen. in the mountains, the same thing happened. it is not malicious as we understand malicious. what we did is we said, look, we cannot tell them now you did your job, give us back your arms and just get going, you know, in your life. that is not the way we want to do it. we need to understand and to try to explain and then work with

them. we said let's have a project, a big project, that would try to integrate them or reintegrate them. and this project is now in place. it has three dimensions. one is the interior ministry, those who are interested in security, police work, they can go there. we give them training, decent salaries, and we give them hope that they can actually develop and progress. another one is the defense ministry. they can be part of the armed forces. this the same thing. we treat them always with respect. we give them a decent salaries. and then goes -- and right now

we have 20,000 of them -- and this goes to 30,000, maybe even more. we have budgeted for 50 of them, 25 in each group. and then we have formed an association, would take those not interested either in the police force nor in the armed forces and give them opportunities for training, scholarships to go to universities outside the country, may be inside, or do postgraduate studies. they can go get their bachelor's and ph.d.'s, and there are many of them. if they are interested in starting a small company, which will give them a small- and

medium-sized loans. we have about 130,000 of them who have registered in this association, and we are going to do whatever it takes to get them the best we can in terms of offering them a better life. i think we are succeeding in this. we actually have sent 1000 of them outside the country, to jordan. some will go to turkey. some will come here. some to europe, uk, beebe france, and other places. and this will automatically -- maybe this is not a hypothetical -- is happening -- they will give back their arms and get on with their life. one good sign about how peaceful and how successful elections can be in libya is the recent

elections that took place in mizrata, very peacefully, very successful, and another sign of how peaceful the country is, the celebrations, the spontaneous coming together of the people and celebrating the diversity of the revolution. you can see it in the big cities. no problem whatsoever. no money was paid by the government. was spontaneous. people came out and celebrate it. before i came here i prepared a video clip, and i thought it was very important it was not perfect, so i did not bring it to share, i will show it to you after we refine it, because we think we can get there.

not the militia group.s we are for decentralization. we think the past regime meant to centralize operations for the wrong reasons. and he knew that it is going to cause problems. it is totally unfair for someone to travel from one city, six counts thousand -- 6,000 kilometers, 300 kilometers, to applies for a visa just to get an a for sure -- an official document signed. this reminds you of the 19th century. we are doing and number of things. one thing is that we have already prepared and we are

simply refining it -- [unintelligible] that will decentralize the operation. the other thing for now, we will have representation of the government in benghazi, where people can communicate with the government to those offices directly and get quick responses. we also are asking governments to have consulates in those two cities, and we're getting a positive response. we have turkey, for example, italy, a few others will also do the same.

many of them will do that. i hope the u.s. will also do that. we're also planning and we have started having some of the major operations being in, for example, we have water resources department . it is a huge department. it is in charge of the river -- the man-made river, which is a huge project. also the water resources, and this will be located in benghazi, it is a big operation. we're also working on the electronic government project, and this will definitely be quite helpful in decentralizing

the operation. so we are going to do things in a way that will help the libyan individual and hopefully we will take care of this, but it will take a little bit of time. the private sector -- just before coming here, i had a meeting with maybe 30 to 40 libyans in the private sector, and this is not the first time. i have a couple of my colleagues from the cabinet who met with them, and we communicate, we feel strongly that in libya you have three pillars that should work together and created the new libya, and that is the government, private sector, and the civil society. the civil society is really flourishing. it is doing a great job there,

and we meet with them and things are going very well. >> i think we have room for making one last question, so let's take more. >> thank you for your remarks. my question is this -- would you welcome the russian companies back to libya, and will your government honor the contracts and deals struck under the gaddafi regime? and about the projects for russian participation that has been suspended? i discussed things with the russian government. thank you. >> mr. prime minister, i have a

two-part question, focusing on minorities in libya. secretary clinton yesterday praised the building of the inclusive democracy in libya under your leadership. you have eloquently emphasized this this morning. libya places multiple -- faces multiple challenges ahead, but can you tell us your government's thinking about including berbers and the jewish community that once lived in libya but was forced to leave. this is the second part of the question. can the jewish community hope for a symbolic recognition and restoration of its important religious and cultural heritage as libyans, such as synagogues, cemeteries, and houses of learning that were destroyed by the qaddafi regime -- gaddafi

regime? many young libyans are not aware of this, but are curious to find out, especially from their parents and grandparents who tell them about the good relations with their jewish neighbors for many, many centuries, and hopefully in the future. >> one last question. >> i am a libyan-american. let me commend you and thank you and your team. we support you, and we would like to see more of you. the first question it regards transparency. what efforts are you taking -- is it possible for you to convey on a more weekly or daily basis what it is your drink, because for those of us here, seems we are getting more of the

indications from the transitional council instead of the government, and what are the different responsibilities between the interim government and that of the national transitional council? i work with freedom house, a watchdog human rights organization, but we also do civil society program. i would like to hear from you, what kind of training do you think is needed for organizations that are planning to come to libya so we can help out in the development of civil society? thank you. >> russia. we wish that russia would have -- what was going on during the

eight months of the revolution. did they see what was happening? i do not know. i hope they did not. if they saw what was happening but never cared maybe that is not necessarily the proper word, but whether they had the political agenda that served their own objectives in this world? i can say they have the right to. are we happy with how russia handled the situation? respectfully, no. do we welcome russia to come

back and work on projects? yes, as long as they do not serve the best team and have no connection. do we honor contracts? i tell you, yes, but after reviewing them, they have to be legal and we have to make sure corruption was not a major part of it. i hope i answered your questions. so, yeah, by all means. we want to be a positive force in this world and a small way based on our size, but i tell you, this was a costly revolution. it was not easy. i hope our russian friends realize that, so, yeah, you are welcome to come back. keep in mind that we do not want

-- regime anymore and we do not want to take it anymore, and we do not even want to smell it anymore. but yes, you're welcome, and i guarantee you we honor our contracts. the minorities -- yyou know, -- you know, i lived half of my life in tripoli. and i was in the center of town. in fact, that was where i was born. next door, we had one block from where i was born, and raised. it was a catholic church. and we had an entire community. i never felt there was a

problem, you know? we communicated. i spoke a little bit of italian, you know. two blocks, and i refer exactly where it was from where i lived -- two blocks this week, two blocks that way. we had the synagogue, you know. just across from my house, we had a jewish family living there. i remember the name of the son who was my age. there was no problem. what causes problems is when you have a hidden agenda.

if you have a hidden agenda, you do not want to work with me. i want to be transparent, clear, and we want to work together. if that is the case, and that is difficult, it is really difficult, you know? if we get to that point, i think the world will be a fantastic world to live in. but now the government -- i am a firm believer -- and maybe this is wrong -- i do not know? i do not ask anybody to surf on my government just because he is from this group or that group. that is not my criterion. if it so happened -- i am a firm believer that -- is all over libya -- berber -- whenever you

want to call it -- arab, this or that it happens -- this or that. it happens -- and i tell you this sincerely -- have to ladies on our cabinet, strong, capable, and they are doing a good job. one of them is here, and i am pleased and honored to be on the scene team to work together. another one is -- she is the health minister, one of the toughest jobs in libya. health care is creating -- and then you have a berber. a berber. know he was saying

i talked to him and found out that he was. i lived in a place where people from different origins and backgrounds were there, but we never asked each other, where are you from? ok? when i came here to the states, i felt the same way. i served with another group, minority activities, things like that, but in libya -- the regime created this feeling. it never existed, at least as far as i am concerned. i guarantee you this is going to be a different libya. i told you, we have young ladies here in the get that i am so proud of. this is a difficult question.

i cannot answer all that, but i have touched on parts. in terms of transparency, if nothing else, fighting corruption is hard. two things we want to make sure that they exist, strongly. we have been doing what ever we can. our books are open. anybody can look into them -- to the beck groups can look into them. we are talking today to the world bank. we want to see how we can create even more transparency into the system. we will be looking into the open government concept, sending someone higher level to attend this upcoming conference in brazil. we're very serious about this. corruption -- libya was up there in that scale, you know. we do not want that to happen

anymore. we have worked for a heart. -- very hard. she raised -- it was mentioned that we are not in the media telling people what they are doing. yes indeed, this is a problem. it is a mystique. -- mistake. most of us are just technocrats. we have not done politics before. we never cared to be in the media. if i do that too much, people would say, gosh, he is there all the time, but now we have appointed a gentleman who is outspoken, articulate, and he will be outspoken. city, yes, indeed, you're right, we have not done it before, we felt it as a short time anyway,

so we do not need to do it, but we have missed the point. so you will hear more about that. the role of the ntc -- that is the legislative body -- and we are the objective one. because it is something new in our country, so sometimes we try to draw the line, but it will work, though. >> thank you very much. i am afraid this is all the time we have. please remain seated until the prime minister leaves, and then join me in thanking the prime minister for derek refreshment remarks, and we wish you the best. [applause]

[captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> this weekend there are two ways to watch the tucson

festival of books. on c-span2 saturday, 1:30 p.m. eastern, the history of the supreme court, and then panels on forensic science, politics, and mexico's drug wars. sunday, panels continued with the environment, the great depression, the american west, and studying the brain, and bernie madoff. saturday beginning at noon eastern and sunday starting at 2:30, the tucson festival of books, live this weekend on c- span2 and booktv.org. >> several cases against the bill site and oral argument., a

case about congressional authority. saturday at 6:30 p.m. eastern. -- 6:00 p.m. eastern. ernest hemingway is considered one of the great american writers, and his works still influence readers today. not many people know about his work as a spike in world war ii. >> earnest said i will wait for them to come alongside, and then my players are going to law and the grenades down the open hatches, and the other members of the crew will machine gunned the germans on deck. >> nicholas reynolds on hemingway the spike, sunday

night at 8:00 third, part of american history tv this weekend on c-span3. >> i do not think the president could have gotten away with it. 100-year history and j. edgar hoover's fight against subversives. >> hoover stands alone like a statue encased in crime. as one of the most powerful man who ever served in washington in the 20th-century, 11 presidents, 48 years, from woodrow wilson to richard nixon -- there's no one like him, and a great deal we know about j. edgar hoover is a myth and legend. >> a history of the fbi, sunday

night at 8:00 p.m.. steven chu testified about his department's 2013 budget request during the hearing. he faced accusations from republicans that the administration favors high gas prices. the secretary said using the strategic reserve is being considered, but the administration must long-term strategy is to reduce u.s. dependence on oil. this hearing is two hours and 20 minutes. >> i call this hearing to order. we have one witness today, secretary chue, and we appreciate your being with us

here today. we have a lot of questions, and we look forward to your comments as well. at this time i would recognize myself for an opening statement. i would start off by saying just about everyone agrees that america's air quality is among the best in the world, and there is no question that the obama administration is totally focused on transforming the energy delivery system in america. and the reasons given for that are, number one, to make the air quality even cleaner, and, number two, ms. jackson and others talk about regulations create more jobs. and i might also say that i have

never, ever seen an administration go after one industry the way this administration is going after the coal industry. president obama, when he was campaigning, was in san francisco, and he said they can build coal plants, but didn't go bankrupt. and you have made comments about how bad coal is, and many other people in the administration, and that is fine. that is your view, and many of us disagree with that. from looking at the budget that you have proposed, you are asking for an increase of $856 million, and in the scheme of things that is not that much money. but we have a $16 trillion federal debt, and any kind of that increase is significant in

today's atmosphere. when i look at that budget, when i read that budget, it appears to me that america is moving as fast as we can to adopt the european model for energy production. and i recently have read a number of articles about the things that are going on in europe. we know that in spain baker placed emphasis on wind energy. they have an unemployment rate of 22%. there was a study from one carlos university that talked about for every green jobs created there was a loss of two jobs in traditional industries. one of the things that i find most disturbing about this, it looks like epa is setting the energy policy for america. the most comprehensive regulation coming out of epa

relates to utility mac. ms. jackson has never been able to give us the total cost. no one has been able to give us a total cost outside experts who have testified in would be up to $90 billion, but epa said they can expect to close coal palntslants. in a november report it was indicated there were liabilities and there would be serious issues. and yet whether it is in transportation or in it is and electricity production, this administration is totally moving on the transportation side to provide all sorts of grants and loan guarantees to

technologies, many of which have not proven to be able to deliver. solyndra. another company is not going to open up a delaware plant. we have battery systems that are closing, reducing their employment. my time is running out, but i was reading some of the headlines in europe. e.u. faces 20 years in energy bills. wind turbines do nothing for emission reduction goals. germany's rising cost of going green. my whole point is this administration is moving so fast and so determined to transform the energy sector and america that i do not think they are

giving adequate consideration to the consequences of that. as one individual that is why i am representing 700,000 people, and i am most concerned about. my time is expired, i would like to recognize mr. rush for his five-minute opening statement. >> thank you, mr. chairman, and think, mr. secretary, for being here. it is always a pleasure to have you before this subcommittee, and i want to commend you for your knowledge, your expertise, and your leadership in directing this important agency at such a critical time in our nation's history. as you know, high gasoline prices are on the minds of every american. my constituents and others are

concerned about these high gas prices. although we all understand that fuel prices are influenced by a variety of geopolitical factors, to hear my republican colleagues tell it, it is the president and his energy policies that are contriving enormously to these sky-high prices. of course, mr. secretary, you and i would agree that does not explain -- their position does not explain why gas prices have skyrocketed from just over $1.50 a gallon in 2001 when president bush took office to just under $4 a gallon in the spring of

2008 before the bush recession took our economy over the cliff. that is an argument for another time. mr. secretary, as the person who heads the energy department, i would like to hear your thoughts on how the obama policy hasion's helped american some consumers through efficiency measures, the promotion of renewable sources of energy, and other forward- thinking policies that are necessary to move america forward and to wean us off imported oil. i would also like to get your comments on the record regarding the levels of fuel consumption, importation of foreign oil, and oil and gas

production during the obama administration. the research i have seen shows that under president obama are importing less oil now than at any other time in the last 13 years. research also shows that we are producing more oil now domestically than we were at any time in the last eight years. in fact, since president obama opened up millions of new is for all oil and gas exploration, the u.s. now has more working will and gas rigs than the rest of the world combined. york agency recently reported -- your agency recently reported that fuel demand has dropped 6.7% as compared to the same

time last year. yet despite all of these facts, gas prices have continued to climb much faster and far earlier than in previous years, and, of course, my friends on the other side, those who want to blame the president and those who have a keen eye, a sharp eye, toward the november, 2012 elections, are using this as a way to make political hay against the administration's policies. as you will hear repeated time and time and time again, that constant refrain of those who are on the other side will be pointing the finger at the president, lee at the president. mr. secretary, i want to welcome you today, and i look forward to

your testimony. i look forward to you setting the record straight, but i am not too confident that even though you will set the record straight that it will remain street. your comments in the past, as they have been, will be distorted, taken out of context, and used for political mileage and political gain. please inform the american people of the true benefits of having an energy policy that is forward-looking and will help us plan ahead for the future. so the congress will not have this same thing you're pointing debate, 10, 20, or 30 years down the road, and thank you, mr.

secretary, and i yield back my time. >> thank you, mr. chairman, and mr. secretary, welcome. today's hearing on the department of energy's fiscal year 2013 budget comes at a critical time for energy policy in the country. gasoline prices continued their march toward and probably past dollars a gallon. we remain dependent on an unstable sources of oil. at the same time residential electricity prices have been increasing every year over the last decade. you raise some eyebrows with your comments on gas prices earlier on and what the administration's -- about the administration cost energy policy. many of us were stunned by your suggestions sometime ago that somehow "have to figure out how to boost the level of -- the

price of gasoline to the price of your." last week he said the goal was to decrease dependency on oil, and long-term goal, which means we're not focused on reducing prices for families and small businesses that is struggling today. increased energy prices mean household are spending a great percentage of their income on it accosts, leaving them with less money for food, health care and, education, necessities. what has the president done to help us? he twice rejected the keystone pipeline project and the job creation and a secure energy supplies and would deliver. his solution to higher gas prices appears to threaten our emergency oil supplies by tapping it rather than opening more federal lands for development. instead of eliminating red tape,

he has imposed new regulations on the power sector that will drive up electricity. he did begin to brett about that he supports and all of the above energy policy, but lethese actions look like nothing from below. layers of new regulations, costly rules, halting development of a long-term repository and raising questions about our new clear prospects. the president's proposed 2013 budget is not all of the above. it seeks to stand for -- to transform energy portfolios based on more expensive alternatives. his budget proposes to slash funding for proven energy resources such as coal, nuclear, hydro, or increasing funding for

high-cost, high-risk energy alternatives. although we support alternative energy sources, there is a place for research, for sure, but the questions that are placed as to whether or not they really produce a healthy overall economy. we welcome your testimony today. we look forward to your answers, and i yield my time to mr. parkton. >> mr. secretary, it is always good to see you. we love to have you come for us. today we will talk about the budget, and we saw the total request by the president was over $27 billion. coincidentally, i saw overall the obama administration last year spent over $24 billion on alternative energy projects. it is obvious that some of that money has not been too well spent. i continue to be concerned about solyndra.

i continue to believe that project has been mismanaged by your department. i am going and asking some questions when i am allowed to come out what changes have been made in the management of the loan guarantee program. it is obvious mistakes have been made, and i think some lots have been violated with regard to the subordination situation. i would hope you will be able to tell me that things are being corrected and those practices will not happen again. we're always glad to see you and we look forward to your answers. i would yield to whoever i am supposed to. if not, i yield back to the chairman. >> i would like to recognize the gentleman from california. >> thank you, mr. chairman. there are a lot of energy challenges we're facing, and you'll be asked about that, but

the american people are concerned about high gasoline prices. i think because of our dependence on oil, will itself, that is leading us -- oil itself, that is leading us to higher prices in gasoline. oil is priced at the world market. if we produce more, that is not going to lower the price of gasoline here, because we have oil priced based on what the world price is rid canada should be the a tapia -- canada should be the utopia the republicans would pray for parrott their prices are just as high as ours. when the republicans say produce more oil, doing what the oil companies want, but will not reduce the price of gasoline.

energy economists tell us the republican plan is not even remotely possible to reduce the price of gasoline. it will have no effect on gasoline prices. we need to face the reality, and the reality is that will prices are determined on a global market and the matter how much we drill here, gasoline prices are going to rise if there is a crisis in the middle east, a fear about disruption from iran, labor unrest in nigeria. and the demand is increasing. in china and india. there's only one way we can protect ourselves from the impact of rising oil prices and that is if we reduced our demand for oil. that brings us to another energy challenge that we face. we have to invest in clean energy to diversify and reduce our energy use.

we're locked in a competition with china, and other countries, and a feature of clean energy. if clean energy is our future and we're not investing in that, as house republicans call us to strike those investments, we are going to lose out on jobs and the future. we have to also confront the enormous challenge of climate change that threatens our economic strength, our foreign national -- our national the health of our system. rather than confront this challenge, the republicans deny the science and block all ideas on climate change. the president says we need to listen to scientists and energy experts and become the world economy of the future.

they seem to want to obstruct the president every step of the way. despite these constant obstructions and attacks on policy, the administration has made the significant advantages to cut the emissions of cars and trucks, doubling their fuel efficiency of our fleet as the result of our energy dependence on oil has declined. even while our economy has struggled in several years, u.s. wind industry has added more than 35% of all new generating capacity over the past four years, second only to natural gas. the percentage of those wind components manufactured in the u.s. has more than doubled.

the department of energy is weatherizationhethe program. it is a savings for low-income on average of $437 a year in heating and cooling costs alone. you will not hear much about these accomplishments from the republicans. they will talk about s japanolinda and keystone -- there will talk about solyndra and keystone. we will not here for real solutions from the republicans. they're playing politics with this issue. we need to get on with the job of making sure that america is less dependent on oil and that we have a future in the clean energy sector that are consumers can face lower gasoline prices as we move away from the dependence on oil.

i yield back my time. >> thank you. that concludes the opening statement. as i said earlier, we have only one witness today, dr. steven chu, th. >> thank you. thank you for the opportunity to discuss the department of .nergy's 2013 budget request president obama has called for an all-the-above strategy that develops every source of american energy. the president wants to fuel our economy with domestic energy resources while increasing our ability to compete in the clean energy race. the 2013 request is guided by the president -- >> secretary, excuse me for

interrupting. mr. rush says he cannot hear you. is your microphone on? >> i am having a little difficulty hearing you as well. that seems to be better. thank you. to promote economic growth and strengthen security, president obama has called for an all-the- above strategy, to develop a resource of american energy. the president was to fuel our economy with domestic energy resources while increasing our ability to compete in the clean energy race. the department's 2013 request of $22.7 billion is guided by the president's vision. our 2011 strategic plan on our quadrennial manage your review.

decades ago, the energy department's support helped to develop technologies that allowed us to tap into america's abundant shell of gas and oil resources. today, our investments can help advanced technology that will unlock the possibility of renewable energy and energy efficiency. the budget request would invest $4 billion in our energy program. it quoted as prisoners of solar to offshore wind to smart green technology. and it helps develop the next generation of biofuels, advanced batteries, fuel efficiency of vehicle technologies and reduce our dependence on foreign oil which everyday places a crushing burden on families and on our economy. as the president and i have said, there is no silver bullet. but we can and pursue a serious long-term all-the-above approach

that diversifies our transportation sector that protect consumers from higher prices, and creates jobs here at home. that is exactly what this budget does. the budget request also met sonny $7 million in -- $77 million. it aligned with the recommendations of the blue ribbon commission on america's nuclear future. as we move to a sustainable energy future, america's fossil fuel energy resources will continue to play an important role in our energy mix. the budget proposal is $20 million. it is to understand and understand potential environmental, health and safety impacts through hydraulic fracking.

it sponsors are in the on materials and processes to help u.s. manufacturers cut costs. we are coordinating research and development across our bases and applied research programs and to encourage manufacturing and deployment of clean energy technology, the president has called for tax incentives, including the production tax credit, the 16 03 program, and the manufacturing tax credit. competing in the new energy economy requires our country to harness oil resources, including american ingenuity. the budget request includes $5 billion to the office of science to support basic research that could lead to new discoveries and help solve energy challenges. it continues to support energy frontier resource centers which aim to solve specific signs

problems 20 block new clean energy development. it also supports the five existing energy hubs. through the hubs, we're bringing together our nation's top scientists and engineers to achieve game changing energy goals. additionally, the budget request includes $350 million to support research projects that could fundamentally transform the ways that we use and produce energy. taken together, our research initiatives will help the american mission to accelerate resources. the budget request also strengthens our security by providing $11.5 billion for the national nuclear security administration. finally, the budget request includes $5.7 billion for environmental management to protect the public health and cleaning up the legacy waste

from the manhattan project and the cold war. this program build on progress made by the program. by the end of 2011, the program has reduced its geographic footprint by 66%, far exceeding its goal of 40%. the budget request -- we recognize the country's fiscal challenges and are cutting back where we can. we're committed to perform our work efficiently and effectively. countries around the world recognize the clean energy that we're moving aggressively to lead. thank you. i am pleased to answer your questions. >> thank you, secretary chu. >> i mentioned in my opening statement about the utility mac, which is one of the big regulations coming out of the

epa. the thing that bothers me the most about it is that it was basically explained that the reason we had to do this was primarily for mercury reduction and some acid gas reductions. they said this was the reason because we would save some money thousand people from premature death. yet, in their own documentation, it was very clear that mercury reduction had no significant benefit from utility mac, that any of the benefits came from double counting production in particulate matter. i would just like to know -- were you involved at all in forming utility mac or expressing the implications of

utility map or the benefits and utility mac? >> when asked to provide technical information on, for example, potential impacts having to do with the reliability of transmission of energy, which provided that information to the epa. i remember those especially that those were some of the concerns of the epa, what power administrations were any threat to the delivery system and for the continued reliability. >> are you concerned that epa had estimated that there would be a 14 gigawatt reduction in " production of electricity -- reduction in coal production of electricity. nerc has also raised issues on reliability.

does that concern you? >> again, in working with and in discussions with nerc by japan and epa, we saw that there were procedures and mechanisms in place so that the american public, should something occur -- it is not taken the average aggregate. would companies be able to supply reliable matter? so we certainly work with those agencies to say that there were mechanisms in place to respond should something occur. >> so you do not have concerns about the reliability issue from the information you have. >> of course we have concerns about reliability.

that is one of the important duties of the department of energy. >> i am disturbed could i think epa misled the american people. all they ever talked about -- even many of our friends on the side of the aisle, not all of them, but every time there is a public statement, they talk about the reduction of mercury emissions. and all of the data indicates that in significant benefit from mercury reduction. so if epa is selling it based on that benefit, and that benefit is not there, then why would you be moving forward with such an expensive regulation that will potentially affect reliability as well as the increased electricity prices? >> i cannot speak directly to the mercury standards that the

epa is talking about. mostly because that is not the purview of the epa to protect the air, to protect americans' health. our world is in determining power distribution, reliability, our role in our ability to make coal so it can help industry to continue to use coal, but in a much cleaner way. >> we have this $16 trillion debt. you're asking for 20 per 7% on that -- 27% on that. you have asked for a 30% increase on the energy efficiency and renewable energy grants. i was watching -- i was reading

a biography of henry ford. when he inserted ford motor co., he did it all with private investment. just like officer, you had kleiner perkins putting up a venture-capital there. i was wondering why the u.s. government should put in these millions of dollars when we are in this dire economic situation we are in and it is very speculative? >> the recent summit at the end of february, there was great excitement and enthusiasm among leaders of american industry, including the head of fedex. he said, pound for pound, dollar for dollar, he felt that our p e -- that rpe was the most effective use of government dollars he has seen in a long time. that is a paraphrase, but i can give you the transcript.

it was very important to help america get a leg up and increase our competitiveness and help our prosperity. >> thank you. >> mr. secretary, as i stated in my opening statement, i am eager for you to set the record straight in regards to levels of oil and gas production, importation, and consumption during the time the president obama has been in office. while my republican colleagues may engage in a scorched earth strategy and, in his insistence, play this blame game gamut, they point to the administration policies that call for rising gas prices. does your agency support the

policies that would help american move past their dependents on foreign oil and in general so we do not continue to have this debate every year as gas prices inevitably arise? can you talk about bill levels of oil and gas production -- can you talk about oil levels of -- can you talked about levels of oil and gas production? >> as you pointed out, during the obama administration, the production of petroleum liquids in the united states have increased. it is now at the highest it has been in over eight years. also, as you pointed out, the fraction of the oil we import has declined 60% at the high.

it is now at 48%. and they are showing signs of further decline. this is very good. that means that we are exporting fewer dollars abroad. as we produce more oil domestically, that is a jobs creation in america and wealth creation in america. so the president is very supportive of this increase in gas and oil. >> as it relates to the importation of oil, can you discuss the amount of oil that is being imported today compared to 04 -- two before president obama took office? are we importing more or less oil during this administration? >> we are importing less. roughly, believe, less in the last -- less than the last 16 years. >> has american consumption of

gas increased or decreased of the past year? if it has changed, what do you attribute to that change? can you discuss some of the policies that have impacted consumer habits under president obama or u.s. consumption of gas? >> are you speaking of gas as in gasoline? >> yes. gasoline, i'm sorry. >> our consumption of gasoline has decreased in part due to two reasons. first, there was a dramatic decrease, unfortunately, due to a very severe recession that we're slowly climbing out. but there is another very important part. we want to climb out of this recession as quickly as we can. there is another important part. that is the efficiency, the use of gasoline is improving.

this goes directly to help every american family in reducing the amount they spend on gasoline every week. again, the obama administration has been very supportive and helpful in leading the way to improving the efficiency of automobiles, trucks, and all vehicles. >> as part of your concern, i am sure, is the winning offer of the american consumer from fossil fuels and heavy dependence -- the weaning of the american consumer off fossil fuels and heavy dependence on foreign oil. give us a rationale for how you view these policies as being a top priority for the american people. >> the policies the president

has taken in terms of increasing our production of oil and natural gas include the making -- the increase in federal lands release for oil and natural gas. increase continued to conten and will continue. american oil and gas companies have more access to federal land. >> my time is up. >> thank you. the gentleman from michigan for five minutes. >> thank you, mr. chairman. mr. secretary, again, welcome. i learned literally in the last few minutes that apparently president obama is personally weighing in on members of the senate to vote no on the keystone pipeline amendment which will be an amendment as part of the highway bill today. i am not happy about that at

all. for the record, we passed that bill in this committee a couple of times with bipartisan support. we saw the same thing on the house floor. are you waiting in with any senators on this vote today? >> no, i am not. >> i know it has been reported that oil production on federal lands has dropped 14% since 2010. in reading from the green wire last week, let me just read a couple of things to you here. "domestic oil production may be at an all-time high nationwide, but the increase is primarily occurring on state and private lands rather than on federal land and waters for production has dropped significantly in 2011. production of natural gas on public lands and waters in fiscal 2011 dropped 11% from the previous year, according to the

interior department. oil production dipped nearly 14%. the reduction in oil production was most significant in the gulf of mexico where it declined nearly 17% to 514 million barrels. in a chart on oil and gas production in federal lands and waters, it appears that it has declined in oil by 100 million barrels from 2010 to 2011. we agreed that, sadly because of the decline in our economy, that is the main reason that consumption has gone down. we did not get the growth. we did not have the jobs. in my state, we had 38 consecutive months of double- digit unemployment. but as i look dead europe -- but as i look at your own eia, we

will be using the same amount of gasoline in 2030 as we are now. it issume in large part - because we will have the fuel- efficient vehicles that we want. but it cannot be the only answer. would this oil -- with this oil production on federal lands, the report that you put out two weeks to three weeks ago, it predicted that oil prices would rise to $4.20. some predict we will hit $5 gas as early as the fourth of july. in large part, it is because of declining production, primarily on federal land. we do not disagree? >> chairman, -- would you not

disagree? >> chairman, first, the president and i and everyone in the administration wish to do all that we can to reduce the cost of gasoline. it affects american businesses. in terms of the federal lands production, with the government does, as you well know, we lease land to oil companies and it is up to them to produce the oil. >> to interrupt for a second. right now, it is proposing a five-year leasing plan that would delay sales in the atlantic or pacific for at least 2017. so it is looking for yet another moratorium for five more years. how does that help us? >> it is not my and standing -- my understanding is that this is a plan, for example in the gulf of mexico, the federal jurisdiction is being made

available. it is a plan to increase in the leasing. >> i was in the gulf last summer. i went out on a raid that was 120 miles off the coast of louisiana. they pumped 110,000 barrels. looking out, there was another drilling ship the there and they were waiting for the permits, just waiting. this is a chevron rig. they were literally waiting for weeks and weeks, paying millions of dollars every day so that that chip would not an acre -- would not un joeanchor -- would not unanchor. the frustration from so many folks there is that the permits

are not being approved. the moratorium is there appeared nearly a third of our oil comes from that region. you have keystone which literally could be 1 million barrels per day that will otherwise go to china. it just seems that we're turning our back on independence from the rest of the world that would clearly help our consumers as it relates to their own pocketbook. i know my time is expired. i yield back. >> i recognize the gentleman from michigan for five minutes. >> mr. chairman, i thank you for your courtesy. welcome, mr. secretary. delighted to see you here. i have a number of questions that i will ask you to respond to buy yes or no. is there a year since your lawn office approved loans from the advanced technology vehicles manufacturing program -- as you know, the program was created to provide the auto industry with

incentives to build or expand manufacturing facilities here in the united states instead of taking those jobs overseas. those recipients, such as ford and nissan, have successfully built expanded facilities in michigan, tennessee, illinois, kentucky, and other states. question -- is the loan office working to streamline the process so that applicants can be assured they will not be waiting for years to find out if their application will be approved? yes or no? >> the loan program is working to improve their processing in all aspects. >> i will ask that you submit something on this for the record. next question. has the loan office implemented any of the recommendations of the allison report to protect

taxpayer dollars and provide a uniform system for evaluating loan applications? yes or no? >> we have actually begun to change over the past year and a half many of the things that the allison report discusses. so we internally have been doing that and we are reviewing all the things that the committee does. it is a valuable concentration. >> mr. secretary, i am very much concerned about this. the lack of funding for the facility for rare isotope beams with in the nuclear physics program -- i am told that the funds allocated to the program in fiscal year 2013 budget are not enough for them to start construction in this year. as of now, the program and the project is on time and under budget.

furthermore, it will generate 5000 construction jobs, 400 permanent scientific positions, and have a $1 billion economic impact. i noticed that in other programs in the office of science, the president is proposing to increase funding for scientific projects overseas. i believe that we should first ensure that we're meeting our project obligations here at home before sending our money and scientists abroad. do you agree with that? >> we are very supportive. we have passed for $22 million to continue this project going forward. and we hope that congress votes and appropriates that money. we want this project to continue going forward. with regard to this other project you spoke about, it is in the different part of physics. but the thing i do want to point out is an international

collaboration. but 80% of the funds will be spent in the united states, both in national laboratories and universities and industries in the u.s. >> mr. secretary, your department has already invested $50 million to end the r&b project. what is the commitment the department makes with regards to frib? will we let it struggle on the line or make sure that it continues to be funded? this year, we have not given them enough to commence the construction. >> as i said, we think that effort is a worthy project. we have asked for continued funding and we hope that congress allows us to have that funding to keep this project going forward. >> you know i have great

affection and respect for you, mr. secretary. but we cannot wait this off on congress. i am talking about with the budget does and not what congress might do. frib will have national security implications and applications such as studying the detection of a nuclear weapon or dirty bomb detonation. i do not believe we can pursue these types of national security opportunities and applications at facilities overseas. doesn't that tell us we should put our money here locally rather than giving it to other countries to do this kind of critical research and programs that will have such a significant impact upon our national security? >> the funds, as i said, the lion's share of the funds for this international fusion project will be spent in the united states. but the department of energy

agrees, as does the other partners, that this is a very important experiment that could perhaps on what fusion energy for the future. >> again, mr. secretary, with great affection and respect, we will spend some money in the united states, build a facility abroad, and the work and benefits that will be achieved from this will be spent abroad and will strengthen foreign scientific applications as opposed to americans. i find this disgusting. i thank you for being here. i will follow this up with a letter indicating further distressed to you, mr. secretary. >> now the gentleman from texas. >> again, thank you mr. secretary for being here. in my opening statement, a reference to the alternate energy budget and specifically said concerns about the loan guarantee program. as you know, we continue to have

an ongoing investigation with regards to solyndra. cut the last hearing attended, the focus was on solyndra. of howvery supporteive the loan program was managed. but i think there will be some changes forthcoming. have there been changes in the way you and your department have managed the loan guarantee program for alternative energy? if so, could you tell us what those are? >> yes, sir. there were changes. let me give you a few examples. we know that sometimes the economics of a particular industry, for example, in the case of solyndra, can change very rapidly. 40% decline in the price of solar modules, essentially a

commodity, in one year, a 75% decline in three years. one of the things we now do on a weekly basis is look very closely at changing market conditions. we established a risk committee. it includes people both within the loan program and outside of the loan program and experts in the department of energy. i also now have a special adviser on financial matters that looks very closely atagaint set of eyes to make sure that we monitor closely for future disbursements. all the things that could affect the loans, including things outside the control of an individual company, like this, from geographically declining prices. >> the size the independent adviser, has he prepared and

presented to the committee for our review the list of additional loan guarantees and the status of those? what if any of those might be in danger of following solyndra and defaulting and going into bankruptcy? i know there's at least one other since solyndra. i am told that there are a number of others that are on the problem was. >> there are companies that we watch very closely because of a wide range of issues. we also have to respect the confidentiality of any of the people that we have made loans to. >> i meant how many loans are on white you call the watch list -- on which you call the watch list. that should not be proprietary. >> i do not have an exact

number. >> is a double digit number? is it between one in 10, 10 and 20? >> i do not recall the exact number. i will be briefed by my senior advisor on this matter. again, any company that we think has a chance of being subject to market changes and other issues internal within the company, we watch them very closely. >> to you think the american taxpayer should have a reasonable expectation that all of these loans should be repaid as opposed to any loan that is made is just money down the tubes and will not be repaid? you have to read -- you have to admit that the history so far of the initial projects has not

been good. >> first, i do say that the american taxpayer has a right to expect that there is a reasonable chance of repayment of the loans we give out. i would also say that many of the laws we have given out have been very good successes -- many of loans we have given out have been very good successes. loans that we have given to ford motor co. or to nissan -- >> that was not at an alternative energy loan. i do not think they can answer your department either, mr. secretary. actually, they do. but the loans that we feel and that the allison report things are loweslow risk have the abilo be repaid. >> my time is over.

i ask that this information be provided to the committee so that our people can review them and work with your agency to take steps to protect taxpayer money. >> we recognize the gentleman from massachusetts. >> there are only 2 tools in the president has to bring down gas prices. curbing excessive speculation in oil futures markets through the commodities futures trading commission. has proven effective to bring down prices. we have 700 million barrels. you have said, mr. secretary, that it is on the table as an

option. secretary salazar said the same thing. you have it on the table. the oil companies and the republicans oppose deploying the sprawl. the of the soil they're talking about are coming on line this year. people looking for relief at the pump right now. they have introduced legislation that would prevent the president from deploying any oil from the strategic petroleum reserve. he approves the keystone xl pipeline permit. do you believe that the authority of the present to deploy the strategic reserve should depend on the permitting of the keystone pipeline even if iran cuts off the strait of hormuz and blocks of 20% of the world oil supplies? >> no, i don't. >> to think that we should export over to the middle east to protect the supply of oil

that we will not used for weapons we have here in the united states in order to keep the price of oil low and not allow iran to threaten us unnecessarily? >> as you noted, the administration has said repeatedly that the strategic petroleum reserve is on the table. but it is a very complex issue. >> that would be a bad idea, would it not, to strip the president of its authority to use 8 based on the permit of the keystone pipeline? >> i agree. >> it would stop all rulemaking to give the ftc authority on speculation, on margins, on position limits, on gallatin, on protecting the public -- on

gouging, on protecting the public. so much of this is speculation driving up the price of oil. do think it is a bad idea to strip the cftc legislatively from their authority to be able to protect against damaging in the marketplace? >> no one would be in favor of damagingouging. >> the republicans believe that we do not need the rulemaking at the cftc. >> everyone is concerned -- >> no, everyone is not concerned. the republicans want to strip the cftc its authority to go against -- to deal with these more urgent issues and to deal with this position limits. is that a bad idea? >> if you please let me finish, everyone is concerned about speculation unnecessarily driving the price of oil up.

this is why the administration -- one of the things that can counter speculation is more transparent information and this is why the administration is very focused on it. >> we need the administration authority to crack down on the speculation and make sure there's more transparency and no more game playing. i will also say that there is a proposal out there to create an international national gas market. right now, as you know, there is no international natural gas market. in china, it is higher than the united states. it is three times higher in europe than the united states. that is leading to a boom in manufacturing. the prices are so low and utilities are switching over from coal to natural gas. there is an application for eight new licenses to export

this natural gas that your own agency says could raise the price by 54%. i urge you to call a timeout to make sure that we get this right. you have an assistant secretary them a statement last week that really disturbed me. i encourage you not to approve these licenses until we put together a plan for the united states on liquefied natural gas exported from our country. >> the gentleman from texas. >> i thank the chairman for the recognition. secretary, back here. let me ask you about the loan guarantee its cylinder. when you can to us in november last year, it seemed to be news to you that there was a postponement of layoffs that occurred at the company, to take

them past election day when there were announced. you seem to be surprised that that in fact occurred. you said you would look into that. can you share with us the results of your investigation white in their mission -- what information you have uncovered? >> we turned the matter over to the department of energy and they're looking into the matter. and when nato is what they find, we can share that rickie. -- and when they share that with us, we can share that with you. we turned the matter to the ig but so that it is an independent look at what happened. >> have you been interviewed by the inspector general on this issue? >> no, i have not. >> have you been informed that that is likely to happen? >> no, i have not.

>> are you willing to talk to the inspector general? >> i always cooperate with the ig. dubick >> let me get >> -- let me ask you a question about the ellison report. i respect the fact that you are concerned about proprietary issues. would you provide to the committee or committees that a copy of the list to the committee? >> actually, i slipped a note and i misread it. it appears that the committee staff will begin a briefing from my special adviser next week on this, on the loan program. >> is that the full committee staff for the democratic staff? >> i think it is the committee staff, the full committee staff. >> mass, as a member of the committee, that you have your guys bring that -- may i ask, as a member of the committee, that you have your guys to bring that

list? it is important as far as congressional oversight on this process going forward. we have all been criticized about the way things have been handled so far. i would like to bill to stop the bleeding at some point. i'm asking you for your commitment to make that list available to the staff. >> again, we do not want to violate the company, confidentiality. the dynamic changes very rapidly. again, it is -- >> if i may, sir, the taxpayer has taken a pretty bad if on this. while i want the companies to do well, at some point, we may have to put the taxpayers' needs and wants ahead of those of the companies. again, i cannot see a reason why you cannot bring that list. i will be expecting you to bring that list.

let me ask you a question. you had the chief financial officer of your department produce their report on balances in 2010. just in the purpose of the background notes at the beginning of this report, it said your approach was developed in 1996. the department did not have a standard approach for identifying access carry over balances that may reduce budget requests. so where are we with that? are you prepared to produce for this committee those numbers? >> yes. we have been working very aggressively at reducing the is on costa balances -- these uncosted balances over the last

several years. >> what is your justification for asking for funding increases with carryover balances? >> i believe the lion's share with that amount has to do with carbon capture sequestration, which means that, according to the statute, we need a significant private sector investment of over half. some of that has not materialized. if we have an uncosted balance because the private sector does not want to invest, there's not much we can do about that. >> the gentleman from california for five minutes. >> people are complaining about the high price of gas. understandably so. and we want to help. but do you see any short-term way that lowers gasoline prices?

>> as you said, everybody is concerned about the high price of gasoline and diesel fuel and we do want to help in any way we can. but, as the president said, as i have said, there is no single magic bullet that can instantaneously do this. so we worked very hard with all the tools at our disposal. the most effective tool thais tt we want to improve efficiency and diversify the energy we use in transportation. the boom in natural gas is wonderful. we now seek and very supportive and are helping offload the demand for petroleum onto natural gas using transportation. we see it in heavy trucking and things of that nature. >> the republicans have said over and over again that we just need more oil. if we had more oil, we would not

have this problem. and then they go on to say that it is the president's fault we .o not have more oil pare the reality is that we're producing more oil than ever before. and we are also increasing efficiency on the automobile. >> the price of oil is very complex. it is certainly driven by supply and demand. it is also affected by uncertainty in the middle east -- >> if we produce more oil and opec decides to produce less, that will not help us. that will hurt us. if we produce more oil and more oil is demanded by china and india, the world will divert oil over there as well. canada produces more oil than

they used and yet they pay the same price of gas that we are paying. you made this point that we need to look beyond just producing more oil. we have to look at using less oil. and the way to use less oil would be to invest in clean energy to diversify and reduce our energy use. that is a tough challenge. but congress should be helping you and the president to accomplish that goal. instead, republicans in congress attack ever proposal you and the president made. every idea, every initiative -- for example, battery manufacturing has been dominated by asia for decades. the u.s. has essentially no capacity. the administration changed all that. you used the recovery act to incentivize the development of the supply chain for vehicle

batteries here in the united states. we have the domestic production of the chevy vault, and award winning an electric vehicle. but the republicans seem to be ready for failure. they are attacking gm on this ground-breaking product. does it make sense for us to be rooting against american manufacturers at a time like this? >> no, of course not. we should all be rooting for a very innovative products. it would show industrial leadership. >> it is common sense. but this is an example. the president proposed a clean energy standard to reduce the amount of energy we get from renewable sources as well as from nuclear and natural gas plants, similar to what mr. barton proposed in the last congress. but the republicans deny even discuss this idea. -- do not even want to discuss

this idea. last year, the top five oil companies made $137 billion in profits. the price of oil is over $100 per barrel with oil at such a high price, do we need to be giving out $4 billion in tax breaks to oil companies each year to have an incentive for them to drill more oil? can you explain that to me? >> i do not believe that the oil industry is doing very well financially and they have a lot of incentives. >> they have a lot of incentives now. so we would be better off for killing the subsidies and using that money to develop cleaner sources of energy to reduce our dependence on oil and move us forward to a clean energy economy yet the republicans oppose that as well. i appreciate what he has been doing, even though congress tries to frustrate him.

>> the gentleman from illinois for five minutes. >> i loved following my friend mr. waxman. for us to move in the clean energy world, we have to pay for that. is it not true that you have filed european gas prices for the united states? very briefly. yes or no? have you not said that it would be good for us to have european gas prices? we all know the answer is yes. obviously, to move to a clean energy future based upon americans pay more upon, which is the desirable of this administration -- i did not want to go in that direction, but my friend from california empowered me to go. >> [inaudible] >> i would like to reclaim my

time. -- did not get a chance for him to enter. >> i reclaim my time. >> will the department abide by the ruling? >> yes. >> do you have the staff to pursue it? >> if the federal court says to do so, we will do so. >> describe the funds that could be made available from the prior year's through this application. this would include any carryover funds made available until expanded, annie and obligated balances from prior years that may have -- any un padillaobligated balances from prior years -- any unobligated balances from prior years.

cressida not have that permission. >> -- >> i do not have that information. >> will you meet to initiate a cooperative negotiating process? >> first, we are in the process now of reviewing the recommendations of the commission. we would also like to work with members of congress to see -- the commission has said very clearly that they would like to see congress look at revisions of the nuclear waste? . -- the nuclear waste act. >> on page 48, it says the importance of the local community. so we have the county saying we are ready to go into direct negotiations with you. looking at which you are able to

afford to bring to the a reno appeared on page 40, it says this unwavering local support helped to sustain the project during times when federal and state agencies had to work through disagreements over the issue. so the blue ribbon commission really highlights the importance of local communities in saying we will accept this nuclear waste. let's get involved in negotiations. that is what your commission suggested. we have a local county that is taking you up on author of a blue-ribbon commission. i hope that you would then talk to the good folks in the county and get into negotiations as the blue ribbon commission had suggested, which is the commission you had asked for. >> we have to set up a process that can do this. the book commission is a blue ribbon commission says you need

local support. it also says you need state support. >> on page 48, it says this unwavering local support helped to sustain the project during times when federal and state agencies had to work through disagreements over the issue. so the blue ribbon commission said, norway, finland, spain, local communities, very helpful in working through the disagreements from the state or the national government. i think that we have a local community that is fulfilling the intent as identified by the blue-ribbon commission. i would think that the department of energy would welcome that because the blue ribbon commission said two things, right? we are not disregarding yucca. we have some of its nuclear waste, we need a second

depository. >> right. they did say that. and we welcome local community support. >> so you welcomed the county when the come visit you? >> again, we need to set up a procedure so that we can deal with this thing as rapidly as possible. >> i would hope you consider night county -- nig i know this is not the ways and means committee. california benefit from the high-tech and motion picture industry. i do not know if we are going to take away their incentive for producing in their county. i would like to have those incentives continue. let me ask you one specific question. for many years, the university

of houston has been doing great work in a field that shows promise. in 2011, the federal government supported the need for continuing signs and development demonstrations in this field to keep the technology leadership in the u.s. the line item for superconductivity technology funding was eliminated two years ago. what is the government and the department of energy doing to maintain the competitive advantage on superconductor technology? it will have an impact on transmission storage. what is d.o.e. doing? >> we support research in the superconducting technology, primarily in the office of science. we continue to do this. many of the discoveries made in

the super conductivity and the understanding have been developed in the nsa. >> i will prowled ask you about that. there was another doctor at the university of houston and they had success in state and federal funding. the president 2013 -- president's 2013 budget says the u.s. geologically -- u.s. geological service is partnering. how is this different from what the epa is already doing? what is your energy advisory board already addressing? it is subcommittee of the secretary of energy's advisory

board felt that the department of energy in collaboration with other agencies would be in a good position to help industry develop develop natural -- develop natural gas and oil resources. we are requesting funding to help the companies extract those resources in an environmentally responsible way. >> there are some things we need to work on. the state law in texas changed requiring the posting of ingredients. the company had been available through osha requirements. will there be stakeholder in but incorporate -- input incorporated into this study? >> we feel this is using science

to help develop new methodology so we can continue to extract natural gas. it is a rapidly improving technology that you and i agree can be done. >> carbon control technology and rules for utilities and refineries. it is too expensive to be commercially used. can you describe d.o.t. carbon captor and sequestration -- d.o.e. carbon capture and sequestration activities? >> i can, but it would take hours.

>> i know i am out of time. ccs is not commercially viable. hopefully we will get there. the technology needs to be there. >> i recognize the gentleman from california for five minutes. >> mr. secretary, you have been brave enough to stand up on energy issues that are politically incorrect and pointing out shortfalls with ethanol. you have talked about the reactors. hopefully, the initiative with the united states navy will look at that opportunity. in san diego, we have 20 nuclear reactors within 1 mile of downtown san diego being run by 20 something year-old kids. we cannot power our street lights with it yet. there are a lot of partisan cheap shots going back and

forth. let me try to bridge the gap and find a place where democrats and republicans and americans can agree, most importantly you. the you agree that the price for finding a replacement for gasoline is supply, how clean it is, and the infrastructure. a major problem. i am a big ethanol guide. -- guy. i have a problem with the infrastructure issues. algae is clean. we will not have supply in a long time. it is compatible with the infrastructure. we have natural gas, which we have not -- massive sources of. it is super clean it is cleaner than propane. 85% of the urban homes have

natural-gas the infrastructure is there. you have a 3 foot barrier between the water heater and the car parked in the garage. we have not raised that gap. all the money we have spent and we are proposing to spend, are you looking at what we are doing for research and development to allow the american consumer five years or 10 years from now to be able to say, i do not want to fill up with gasoline. i want to plug in my car and fill up with natural gas over night. what in your budget is committed to bridget that gap between the automobile and energy independence in the next decade and the water heater that 85% of city dwellers use today? >> i am glad you asked that question. the program we have in our

budget are in renewable energy. i share your excitement. our abundant natural gas in the united states look to remain at low prices for another decade or two. we have a great opportunity to help with transportation costs. what we are building is the cost of the natural gas tank. honda sells honda gas. >> you are talking about the tank in the vehicle? i am not talking about the tank in the vehicle. i drove a car with that tank in 1992. i am talking about the home dispensing pop -- pump that can

bring the pressure up from the home to the tank in the car. is there anything in your budget that is addressing the home dispensing pop -- pump ? >> i was taking too long to explain it. the commercially available pump is expensive. it has to be refurbished for another couple thousand dollars. it is $6,000 for the dispenser. after a while, you have to send it back to the factory. we are trying to develop something that will allow the depression as several hundred pounds per square inch. when you decrease the pressure and still have the range, things become inexpensive and accessible. that is what i was trying to get at.

>> if we had done dispensing, the big event it would be flexed fuel. we would not have to have these twin systems in the car. it would be able to burn regular gasoline with a flip of the switch. thank you. >> secretary chu, thank you for being with us today. the natural energy technology lab in pittsburgh is funded by your department also office of fossil energy. the president's 2013 budget request continues be troubling trend of decreasing the fossil energy budget. a large portion of the research is advanced coal technology. in 2010, the fossil energy budget was 404 million.

-- $404 million. the new budget request is only $210 million. critical research in fuel cells and significant the reasons is the funding for carbon captor and carbon storage. some of these cuts appeared to be especially poorly timed. are you aware that the epa is preparing to issue a rule any day now studying emissions limits for greenhouse gases? >> i am not sure of the exact timing of the epa schedule. >> but it is imminent. that rule requires coal-fired power plants to capture its emissions or use technology that allows them to emit less carbon to begin with. yes or no? >> i would have to get back to

you on the exact role in the epa is contemplating. >> we cannot have it both ways here. i support epa's efforts to reduce greenhouse gases. if the administration is going to issue a regulation requiring carbon capture and sequestration this year, can you explain why the budget request is the lowest this administration has ever requested? >> we are supportive and i am support of of carbon capture and sequestration. we think this is an important part of what we do at the department of energy. we remain committed to developing the technology so we can continue using our abundant fossil fuel. >> if we are going to ask our power sector to reduce greenhouse gas emissions and we

are eliminating the research funding for the technology to do this, it is not fair or there is a lack of coordination going on between epa and the department of energy. let me ask you another question. this administration has champions regulations to reduce pollution from power plants and trucks. one way to do this is to use fuel cell technology being developed through the solid state conversion alliance. this program is developing and commercializing technology to produce efficient power from natural-gas and eliminate i dling emissions. if this technology could be used to meet regulations coming from the administration, can you explain why the funding for this program was eliminated in the president's 2013 budget? >> solid fuel cells have made a

lot of progress. we are excited about this. we think it is evolving to the point where the private sector is taking this over rather well. most of the applications will be stationary applications we do like that. >> south korea has made outside fuel cells a major part of their energy plan. we just completed a free-trade agreement with south korea. are you concerned that delaminating support for this technology in the united states will drive that industry overseas to south korean?

>> we are hopeful the united states can manufacture these fuel cells. >> i hope that is right. >> the gentleman from west virginia for five minutes. >> the department of energy was formed in 1977. there were three paragraphs i found interesting. the first was that it was set up because the increasing dependence on foreign energy presented a serious threat to the national security of the united states and the health, safety, and welfare of the united states' citizens. it was set up to deal with short-term and midterm energy problems.

long term, we are going with renewables. short term, we should be worried about coal. to foster the good health of the small business firms, private corporations, private cooperatives involved in energy production. mr. secretary, i think you have gone away from those principles. you have allowed what we have heard earlier, some of the testimony about the use of the epa and their predictions of greenhouse gas closures of plants that were talked about here. based on this level based on the other national organizations, epa has been emboldened to continue to drive for greenhouse gas emissions when all of the others are saying, if you do that, you will see closures occurring like this all across america. this questioning or challenging

our energy across america based on that information -- i am concerned that you have a real interest in reigning a rogue agency involved in this kind of activity without having, is the knowledge of how other people are looking at it across america. in pittsburgh, you said, i want all of the above. i applaud that. i wish it were back with action. i want to go back to your state you made in 2007. you said, kohl is my worst nightmare. coal is my worst nightmare. -- coal is my worst nightmare. we have a comment from harry reid. colt makes us sick -- coal makes

us sick. is that the mind set up why come on the short-term goal, you have abandoned that and you are cutting the research money 41%. 41% spending on coal. i cannot comprehend where this administration is with it. with all due respect, i think the d.o.e. and the epa have become the worst nightmare of the working men and women in our coal fields in america. you are challenging them to wonder whether tomorrow they will have a job. i hope you will go back to the requirements of the d.o.e. and look at the short term requirements.

let me try to explain why i said that was taken out of context. >> what i said is that coal, as is being used today in china and india and everywhere around the world in terms of its pollutants is a big worry of mine. even before i became secretary and after i became secretary i became committed to developing those technologies and bringing the prices down. >> i hope you will be able to explain how we have a 41% reduction in the national technology. will he be able to get back to us? we hear a lot of folks on the other side talking about how coal is subsidized.

will you be able to tell us how american coal companies are being subsidized? >> i would be glad to get back to you on that. >> at this time, i recognize the gentleman from new york for five minutes. >> i am one person who has followed you. i think you are doing a fine job. there have been a lot of political cheap shots at you on the other side of the aisle. i don't think that is reflective of the job you are doing. i want to send -- spend the next minute talking about an issue that we have talked about in the past. that is an open fuel standards for cars. i believe every car produced in america should be a flexible car and car can run on ethanol, methanol, natural gas. competition helps bring down

prices. i have seen it happen in brazil and i think it can happen here. it would cost $100 or less per car to manufacture a call -- a car with flex you'll features. the president has issued an executive order to have the federal fleet have less fuel. i would like you to briefly comment on that. >> the ability to own a flexible here call would be something like $100 or less. give the american consumer more options. it makes them more in control of what they can do in case the world oil price does increase. we are conservative about the price of gasoline. one of the options we have to bring relief to the american public is to allow them to have a diverse source of energy or

transportation. lex you'll be a close allows that. natural gas -- blacks -- flex fuel, we are excited about. >> thank you. i could not agree more. let me ask you about energy renewables and energy investment. countries have used a combination of investment and natural energy standards. china leads the world as the largest source and destination for clean energy investment. china attracted $54 billion in

the clean energy financing. such financing in the u.s. stagnated at $34 billion, equal to 2007 levels. your budget proposes to invest in energy efficiency, science, clean energy research development and deployment and eliminates $40 billion over 10 years in tax cuts to big oil. i agree with it. big oil is making record profits. some people have argued that if you eliminate subsidies for big oil, it means the government is in the business of picking winners and losers. they say that if we remove the subsidy for big oil, we should remove subsidies for every other specific industry or business. how do you respond to this. >> i think the government, over the past decade, over the past century, has always looked at

subsidies. it is a part of congress and the president to try to decide what will be an appropriate subsidy and how long. subsidies have been used in the past to encourage new industries to get started. oil subsidies began 100 years ago for the intent of helping this industry gets started. as you pointed out, they are doing well on their own. >> they made $137 billion last year. god bless them. they do not need help from the government anymore. 2/3 of the department of energy's budget is directed toward nuclear cleanup activities. some have argued those activities would be better handled by the department of defense. how do you respond to that?

>> i respectfully do not agree with that. nuclear weapons and nuclear cleanup needs a science based approach. since the manhattan project, we have a lot of expertise. we should continue to have it within the department energy under the environmental management. >> thank you mr. secretary. >> the gentleman from colorado. >> thank you secretary chu for your time. the impact the strategic oil reserve had on the price of oil was reported on. it reduced the price at the gas pump. >> you are talking up the last -- >> in june of 2011, the price

dropped. it is the president considering releasing [unintelligible] in response to gas prices? >> that option is on the table. it is more complicated than that. that is the primary use. >> do those circumstances exist now? >> the primary use is for supply disruption. there are also issues for economic disruptions. >> we released it before when there was -- >> do we have a hurricane taken refineries -- taking refineries out now? >> no. >> last year, 60 million barrels

of the world's strategic reserve was released. the price of oil dropped $4. supply made a difference. don't you agree? >> supply did make a difference. >> when president bush lifted the moratorium, the price of oil dropped $9. kept going down even though people knew the increasing supplies would not come online for years. the anticipation of supply made a difference. supplyhe basic laws of and demand dictate that so well long-term increase supplies? >> i absolutely agree. >> if you are going to pursue long-term policies, should you couple that with long-term supply such as increased

production? >> the primary usage is to deal with supply interruptions and other economic disruptions. >> you have said supply matters. we need increased supply. >> the world needs a long-term demand solution as well. both supply and demand matter. >> when you do down last year, oil prices were $9. yet not replace those 30 million barrels, have you? how do you plan to replace those barrels when the price is higher? >> there is a plan in our 2013 budget to begin to buy back that oil. >> but not increasing production. what about the royalty in kind program? secretary salazar's office was in charge of it.

will you meet with secretary salazar so that these barrels of oil can be replaced before you draw down again? >> i will get informed of the situation. >> will you report to us? the president called a phony to get down to $2 a gallon for gasoline. >> we do want the price of gasoline to go down. >> we need to do that by increasing supply or by increasing domestic production. >> as the president has pointed out, the united states supplied by itself is not going to affect the world's demands. it does not control. >> you said supply decreases

price. >> but as you well know, the production of u.s. petroleum has increase over the last 8 years. >> it did not cause gas prices to go down as you just said it did. >> there was a short-term -- >> because of the supply infusion in the market. >> the gentleman's time has expired. >> mr. secretary, if you would like to finish your answer. >> during that release, it was

meant to deal with the temporary disruption in supply in libya. now libya is coming back with petroleum reserves. it believes has served its intended purpose. >> i appreciate the work you are doing on a best forms of energy. bill gat was at our advanced energy research consortium talking about the need for greater national investment. i certainly echoed that. i would like you to a dance that cause. i was last the would-i will ask you about biofuels. we are looking at beria's bioreactors. we are ready to go out in the northwest. can you comments? i would like you to take a look at our state opportunity and what should be available in the midterm. -- the long term for bio reactors.

>> the department of energy has been supporting this. we think these technologies do have -- from algae, from grasses. all of these things have the potential of having an alternate supply of transportation fuel that will go further into our dependency on oil and dependency on foreign oil. these things can be made in the united states. >> a product designed by targeted growth, a company in seattle, partially fueled a jets going across the lentic ocean. washington university and others are leading a consortium.

what could you advise us to try to make sure the department energy looks at the state of washington as far as the opportunity there? >> we will look at that particular project. we look at all these particular projects. i think it has great potential for a decrease dependence on oil. we will need liquid transportation fuel in the coming decades. >> in washington state, you will find probably as at best a consortium you will find a welcome network that is pre prepared for this adventure. i hope you will take a good look at washington state. we had some good success at the hanford site. we are clearing some land out to be ready for development. your agency is moving forward to

allow 1,600 acres to be allowed for commercial development. we are excited because we need to transition for cleanup. we are told it could be a year- and-a-half before we get that done. we hope you can do anything you can to expedite that transfer. we have some companies looking to do good things. i hope you can take a look at that. i want to thank you. i agree with everything you are doing. -- i do not agree with everything you are doing. i want to thank you. i have a 1 month old granddaughter. i want to thank you for your efforts in giving her a shot at and enjoy a world that looks something like the one we have here today. one of my friends across the aisle talk about something ruining the world. you are doing some work to make sure it is not relent by the time she is 60. the work you are doing on solar energy is spectacular.

you look at the world's most durable solar cell, nano- technology. these are spectacular things you are doing. because of your success, my granddaughter will have a shot at having a world that looks like the one we have got. you will be catching a lot of air rose in your back from those who are naysayers -- air rose -- arrows. we are going to grow this economy and give my granddaughter and everyone a shot. >> the gentleman's time is expired. we recognize the gentleman from kansas. >> i want the world to look great for my son as well. we have to do things that work.

i will look at some things that your budget is intended to spend money on and talk about whether they are working or not. in the president's budget, i have seen your handiwork. the goal is to have 1 million electric beach goes on the road by 2015. how are we doing? are we on track to make that goal? >> we are going to wait until 2015. in terms of what is happening technically, things are developing. i remain hopeful. >> are we going to make it? how many elected vehicles on the road today? >> less -- i will have to get back to you. it is significantly less than 1 million. >> will the administration propose higher gas prices to

meet this goal. >> the administration wants lower gas prices. >> your actions beeline backed statement. -- belie that statement. last week, chevy announced that the volt would be suspended because of demand. how many taxpayer dollars have gone in support of the chevy volt? >> i do not know. i note the chevy -- i know the chevy vote -is- -- volt is a great car. i am hopeful that the chevy volt will be adopted. >> i would appreciate it if he

got back to us on how much money has been expended. do you drive 1? >> i do not our own a car at the moment. >> you cut off funding last may because it did not make sales targets. do you think we are looking at another solyndra? >> it is more complicated than what you suggest. we have milestones in our loan program. as we disburse funds, we work with the companies. we are hoping they can work through the things that are temporary blips and continue. >> how much exposure does the

united states taxpayer have? >> i can get back to you. >> we heard the same reassurances about solyndra up to the time the d.o.e. was still making loans. you were taking care that that money be repaid to the treasury. that is not going to happen. i hope you are right about this company and the taxpayer does not end up another $500 million short. thank you, mr. secretary. i appreciate your time. >> we have four votes on the floor. we have four members who wanted to come back and finish asking questions. i was wondering if you would be able to be back here for a little while or not? >> i have just heard from my staff that we have agreed to do it. i was worried about another important --

-- another appointment. >> i understand. we appreciate it. we have some of the finest restaurants here in the building. we will be back as quickly as we can. we appreciate your time. there may or may not be four coming back. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] those of us at the end of te list appreciate it very much. the united states is left with

huge coal reserves. as technology has become available, coal is becoming more affordable. south africa against 1/3 of its gasoline from coal to oil processes. the president when he was a senator introduced legislation to do just that. what do you see the department of energy doing to help get cold liquids to play an additional role in the supply of gasoline in the united states? >> united states has great fossil fuel resources. we are looking at the potential for both cold liquid and gas to liquid. we want to support research that

would enable -- the issue is high capital costs. these plants are complex. when i talk to the oil companies, shell, exxon, they say that the high capital cost is a problem. we also wants to do this -- what to do this in a way -- we would like to capture the carbon. >> the bill the president put in was a loan guarantee program. did that help defray in in the capital costs?

>> there are a few still going forward. the use of the carbon dioxide. there is a project going forward on that. >> that brings me to solyndra. you have indicated that what was happening in the chinese market during your administration and what was happening in the chinese market was not anticipated when the loan guarantee was done. one question i have always had is, that was known based on what i've heard from your testimony. that was known by late 2010 is certainly by february, 2011. if you knew what was happening in the the chinese market when the price was so low that solyndra could not manufacture its products for the price the

chinese was selling the best were selling their products for, widely subordination? >> by 2011, late 2010, we knew solyndra was in trouble. by then the price was -- >> the chinese market had made their products cheaper than solyndra could produce their product. the chinese could sell their products for less than solyndra could produce their project for. >> we knew solyndra was in deep trouble. there was a chance for bankruptcy. when we had time to decide how to do this, it was a judgment call on whether -- >> you have said that before and i respect you. late it a fact that in

2010 and by february of 2011 when the subordination was signed off on, when you looked at the price of what the chinese were able to sell their product at and the price at solyndra producing their price, the chinese could sell cheaper than solyndra could produce. isn't that a that? >> that is correct. >> i would also ask, the chairman sent you a letter on the loan program. solyndra was to be the supplier for the first phase of that project. then solyndra went bankrupt. why did d.o.e. feel comfortable in including solyndra in the first phase of that company when you knew they were about to fold or knew they were in serious danger of folding. even with the first subordination, you would -- you

were hoping there would be the august 2 subordination. why did you go forward and say this should be your supplier? >> we were not comparable with solyndra be the supplier. that company had a -- i believe the business model was a good one. i was supportive of that long. i was nervous that the company should line up a plan b. >> i thank you and i yield back. >> mr. olson from texas is recognized for five minutes. >> i would like to thank you for real testimony and for waiting for us to come back for -- or your testimony and for waiting

for us to come back from votes. the need for environmental rules is greater now than ever. i would appreciate it if you would simply answer yes or no to the following questions. question number one, are you aware that under section 202 of the federal power act, d.o.e. can issue the emergency orders to require a generator to run? >> yes, i am aware of that. >> billy to comply with -- failing to comply with an emergency order -- question number 3, do you believe is fair to make generators' choose between complying with an emergency or and comply with an emergency regulation? is that there? >> in most instances, it does

not have to be either/or. as i said before, the department of dignity's job is to make sure the private sector -- the department of energy's job is to make sure that the private- sector has a choice. >> are you aware a generator was forced to pay environmental alliance and settle a lawsuit because they complied with the emergency orders from your department? are you aware of that? yes or no? >> a i am not sure. it may have occurred. >> it has occurred. i can get you some details. my final question for you is, would you be supportive of efforts to solve the potential conflict between the federal laws? >> i am supportive.

we do not want to order a generator to continue to be online to produce an emergency backup power and space federal fines from another branch. we are eager to work through those issues. >> that is fantastic. i look forward to your support. i yield back the balance of my time. >> thank you, mr. chairman. secretary chu, thank you forestay through the votes. i appreciate that. -- thank you for staying through the holidays -- the votes. we have been talking about passing legislation through the house so that we can create millions of american jobs and lower prices of gas at the pump. the president has recently started talking about and all of the above energy strategy.

if you look at the actual things he has done, his policies have hurt energy production in this country. the president is boasting that energy and oil production has never been higher as if he supports that. when you actually look at the facts, and numbers we have seen shows that production on federal lands, which the president has control over, is down 11%. in the gulf of mexico, it is down 70%. have you seen numbers similar to that in areas where the federal government has jurisdiction? >> i have seen numbers that i have gleaned -- >> the numbers you have seen validating what i have seen show a decline in production on federal lands. >> the numbers i have seen show

an increase. >> we have seen just from 2010 to 2011, and 11% reduction in the gulf of mexico. we have seen a 17% reduction. where the increase has come is on private lands. in the north dakota and the shale plays, which the president is trying to shut down through the epa. it is disingenuous for the president to say production has never been higher. on private lands, he is trying to shut down the fracking process, which would mean there would be a reduction, making us more dependent. i will go back to the comments you have made in the past and the president has made in the pass in support of higher gas prices. in to thousand a after the president was elected, -- in

2008, you said, we have to boost gas prices to the levels in europe. did you say that? >> i am not sure. >> this is not the first time you asked. i have heard you confirm you said it. >> the prices in europe are what right now? >> i am not sure when the date was. everything i have done when i became secretary of energy was to help control and bring down the price of gas. >> that has not happened. president obama said he would prefer gradual adjustment to $4 a gallon for gasoline. he has put policies in place that have gotten us to $4 a gallon. it is over $3.70 now.

the president has gotten his wish. now that people are furious, the president is trying to blame somebody else. if you look at what is happening in the gulf of mexico, we have lost about one dozen deep water rigs. they have left the gulf of mexico because they cannot get permits because of the president's own policy. they have left the country. they go to places like egypt. imagine is better to do business in egypt and america because of the president also policies. he said no to the keystone pipeline. the president has implemented a policy that has reduced american energy production and supply. the president has been to saudi arabia. he has bowed down to the press and has been begging for more oil. you have been to saudi arabia and have had similar meetings asking them to produce more loyal. oil.ore

had you asked them to produce more oil? >> allow me to field. >> it is a yes or no question. >> when we went to saudi arabia? >> rather than go into saudi arabia, it is only a five minute walk from your office to the white house. instead of going to saudi arabia, go to 1600 pennsylvania avenue and asked the president to reverse his policies that have reduced production in america and made gas prices higher. there is no consistent policy to get permits. we have lost one dozen rigs. we have lost thousands of jobs because of that. the keystone pipeline. we have lost 1000 barrels from

canada. this epa attack on fracking is killing an ovation. we talked to a company that left $3 billion on the table. i would ask that you pursue the administration policies that are killing production. >> the gentleman's time has expired. mr. secretary, if you want to try to respond, feel free to do so. >> we were talking body immediate their production. saudi arabia has immediate their production. to develop oil takes years, typically five years. for immediate production, we think of that as a way of moderating prices in the world oil market. >> that concludes today's hearing. i want to thank you and your

staff for your patience. i would like to ask unanimous consent. yuccablic's views on mountain will be entered into the record. mr. secretary, thank you. we look forward to working with you as we moved forward. this hearing is adjourned.

>> i believe it is possible that we will come to admire this country not simply because we were born here, but because of

the kind of great and good land that you and i want it to be and that together we have made it. that is my hope. that is my reason for seeking the presidency of the united states. >> as candidates campaigned for president, we look back at 14 men who ran for the presidency and lost. go to our website for "the contenders"to see a video on those who had impacts on this country. >> we will go to work immediately to restore proper respect for law and order in this land. >> they are not fighting and dying because they are al qaeda. they are not fighting and dying and sacrificing their lives because they are muslim extremists. they are fighting and dying because they want the same universal rights and freedoms

that we guarantee in our constitution. >> if we did not get the united nations coalition together, we are going to look back and say, we did not do the right thing morally and we missed an extraordinary strategic opportunity. >> i want to make the point that the concerns that senator mccain and you and others have expressed are exactly the concerns of the administration. we are not divided. we are not holding back. this administration has led in iraq. we have led in afghanistan. we have led in libya. we are leading in syria. we are working with those elements to try to bring them together. if the agreement is that we should not go in unilaterally, we have to build a multilateral coalition. we have to be able to work at that. it is not that easy to deal with some of the concerns that are out there.