department. again, the federal reserve, mr. speaker, independent, doing its own thing. the treasury department completely funded by this congress, completely involved in oversight directed by the administration. we are experiencing record low interest rates today and because there is so much uncertainty in our future and again i'm trying to highlight how some of that uncertainty is being created by the federal reserve so that america begins to have that conversation, the good news is, that the frokes over at treasury, the bureau of public debt and treasury, have begun to extend the maturity, average maturity rate of our debt. what does that mean? well, you remember reading about all the folks in the mortgage market who got caught by those teaser rate loan the rates were low on year one but went up in year two and people couldn't afford the rate in year two when the interest rates jumped. teaser rates. right now we're financing american debt with teaser

rates. we're borrowing at the lowest rates in history and when we go out and start selling debt instruments, we're not selling everyone as a 30-year bond where nobody will come looking for the principal for another 30 years. we sell debt in 28-day instruments. . one month, three months, six months. short-term instruments financed the debt. and what does that mean? we have tremendous interest rate risk in and if we have those amortized, we know what those are going to be. so to the treasury's credit, go back to 1980 here, average maturity of debt, where interest rates have gotten lower, treasury has begun to lock

america debt in for longer and longer maturities, back in october of 2008 when we are dumping it on the marketplace and spending at the highest levels, four times the previous levels as george bush was leaving office, we had to sell it to anybody who was willing to buy it. the average maturity date collapsed and we have been battling back, 48 months in october of 2008, that's average. october of 2008, what is that? $1.5 trillion in debt that on average was due in four years or less. think about that, there was no

surplus here. we are still borrowing more. but every four years, the average debt turns over four years. we aren't borrowing, but we have to pay back the $13 trillion. to the treasury's debt we are extending that time line, one month at a time and here in may of 2012, we have already pushed out the average maturity date, 32%, cut to 64 months there over the summer, to try to lock in these low interest rates to give america some interest rate protection to reduce our interest rate exposure, because you can't throw money around the way this nation is throwing around and think that inflation isn't going to get ya. the question is when is it coming? it's coming. the laws of economic are sound.

it's sound. when is it coming? our treasury department locking in those longer term rates now. let me say we have begun that discussion in congress and we need to begin that in living rooms around the country. it is a discussion that the american people need to have. what are we mortgaging away in our tomorrow to try to help out our today and making our today easier, is it worth that risk? we aren't having that conversation. we are leaving those decisions to the federal market committee. that was a different choice that we made when the balance sheet of the federal reserve was $800 billion, a big number, but $800 billion, but now four times

larger. it began with the federal reserve transparency act. that's a bipartisan bill, 274 co-sponsors in the house and passed 327 to 98. that is big. we talk about things we don't agree on and party-lishe votes that divide us right down the middle. three to one. is that saying the federal reserve is doing a bad job? no. the federal reserve is doing a lot and doing a lot that we never anticipated when we created the federal reserve. and there comes a time that the american people need to be involved in that process. this is dr. ron paul from texas who has been pushing for this for years and years. and finally passed by a large

margin. another bill called the h.r. 4851 and going back to that article i showed you in the beginning, 6% devaluation of our currency in the last three months. as the federal reserve began to act, 18% devaluation in our currency. you work hard all your life, you think the stock market is too risky. i have seen it collapse more than once. builders, real estate collapse. september 11 collapse. too risky, i can't do it. i'm going to take my dollar and put it in a federally-insured banking institution so when i take that dollar out, it's going to be there.

well, that's true, but is it still going to be worth a dollar when you take a dollar and the answer is no. we can come and tax you, mr. speaker and take 20% of what you own, 20% of all the wealth. $10, we are going to take two of you. it's not going to pass this body, it shouldn't. but through monetary policy, we can achieve that very same effect and nar ymp a voter says a word. i'm not telling you it's bad for america. and i'm not saying that at all. these are men and women who love this country and make sure in line with their federal mandates and keeping an eye on inflation and these are contradictory

goals and have to keep them in the same basket and succeed on all fronts, but the beneficiary, if they succeed, is the american taxpayer. and the ones who bury the burdenen if they fail is the american taxpayer and the one not involved in the discussion right now if it's the right thing or the wrong thing to do is the american taxpayer. i believe this november, we will have the largest voter turnout and i'm thrilled. i still believe in americans and when more americans turn out to have their voice heard, we are going to end up with the right answer. but when we wend up at the end

of the day, we get involved in american federal policy. this chart, mr. speaker is one of my favorites. go back to 1962 and go deep, deep, deep. this if you are born before 1962, it might seem not like that far, but 50 years of american interest policy. the end of the carter years and end of the reagan years had a chance to get the economy back on track, we are talking about sky-high interest rates. but over 50 years of american history, 50 years of american history, through vietnam through the oil embargos throo carter, reagan, bush and clinton, look out to the end of this chart,

you see a collapse in the 10-year interest rate to the lowest levels that we have ever seen in our lifetime. these are the interest rates that america ordinarily pays. but we are manipulating the system to pay the lower interest rates in history. at the same time, we are borrowing the most money in history. laws of economics tells you that is not going on with supply and demand. for supply for demand, interest rates are supposed to go up. more demand than ever before. less supply of buyers in the world marketplace and interest rates are at the lowest level in history. going to come a time that we are going to have to pay the piper. this is historic. what we are experiencing today is temporary.

and by definition -- 30-year interest rates. this goes back to 1977. after 30-year interest rates today, 30-year government interest rate, down around 3%, mr. speaker. who is it, who wants to trade away a dollar today with the agreement that they'll get $1.03 back next year and that same deal over the next 30 years. who thinks that is going to devalue three cents. let me see that "wall street journal" article, because as i close, i want to make it clear, there is a lot of kicking that goes on in this town. i have a lot of constituents who think i should kick the shins. but what i don't have enough of,

voices across the nation demanding that we take a look at it. i recommend this article to you, september 11, 2012, again, written by senator phil gramm, our last serious effort. this is a gentleman who is concerned about american debt for a generation, for a generation and served here in the house and united states senate and moss progressive to try to change the fiscal direction of the country for the better. writing on september 11 about our fiscal future and what is happening at the federal reserve. i'll close with the same way that he closed, he said some

day, hopefully next year, the american economy will come back to life. the money will expand and velocity will rise. unless the fed responds by reducing its balance sheet, at that point the cost of our current monetary policy will be all too clear. like mr. obama's monetary policy will ultimately have to be paid for. the fed softened the recession by decisive actions, but the marginal benefits have almost certainly been small. we may find the policies that have little positive impact on the recovery today and have high costs indeed when they must be reversed in a full-blown expansion.

not a man or woman in this country who is not thinking about their tax bill, not thinking about the economy, not thinking about job creation and not going to go to the polls and vote accordingly. i encourage you to encourage your constituents, don't think about tax policy but think about monetary policy. what we are doing in washington, what the federal reserve is doing with interest rates, that will be monetary policy. and it makes a difference, the addition decisions we make today have to be paid for tomorrow, perhaps it's the right thing to do today, but if it happens in secret, if it happens not knowing to the taxpayer, the american job creator and job

holder who will have to foot that bill that it's not the right course of action for america. let's have that debate and talk about it in the light of day and let's make that decision. balance those costs and those benefits and do we know what will be best for the american family. and with that, i yield back the balance of my time. the speaker pro tempore: the chair is now recognized a member of the minority policy. the chair recognizes the gentleman from iowa from --, mr. king, for 30 minutes. . mr. king: it is my honor to address you on the floor of the

house of representatives. things weigh on me as i come to the floor tonight and one of them is something that i think is emerging in the consciousness of the american people, mr. speaker, in a way that really wasn't there before this administration took office. and that is, the massive growth of the nanny state here in the united states of america. we watched as regulation after regulation has crept in on our regular lives and some of the things that i've spoken with you in the past fall down along the lines of, for example, the curlicue light bulb. the idea that the federal government could ban 100 watt light bulbs and prohibit us buying our patriotic edison light bulbs an require us to have those mercury-laden curlicue light bulbs. i have a good number of those modern light bulbs in my house,

i put them where i make sense. if i need quick light to walk into a room, i want an edison bulb, it's not on much, doesn't cost much electricity. if i'm going to have a bomb that's going -- a bulb that's going to be on for a long time, i want the energy efficient bulb. that's a decision a consumer can make, especially an informed consumer. but when you end up with a one size fits all if the federal government you end up with a lot of bad decisions so it all fit into one formula. another one is shower heads. several months ago, the federal government fined three companies for selling shower heads that let too much water out. think of that. too much water. one size fits all. the water supply in buffalo up by niagara is different than the water supply in someplace like dueson, different than place like new orleans or florida or iowa. and so we have one size fits

all on shower heads and here's the brilliant presumption on the part of the nanny state federal government, the conclusion that in all cases, water is going to be more valuable than time. so people can stand under that showerhead and wait for their feet to get wet because over the broad calculation of 300 million people you'll save some gallons of water that are more valuable to the mind of the nanny state than, certainly more valuable to the mind of the nanny state than the time it takes for someone to stand there and wait to get wet. here's another one. the 55-mile-per-hour speed limit that was imposed a long time ago on this country. under the belief that if we all drove 55 miles per hour, we would save gas and that would help our energy independence and keep us less dependent upon foreign oil. so the federal government dialed the speed limit down to double nickel, as we called it, and everybody in the country drove 5 -- 55 for a long time even on the interstates with

the misfwided idea that gas was always worth more than time. so one day, mr. speaker, i was driving down the road in iowa at 55 miles per hour, and i came through this intersection on a county road and i could look in my mirror and see a mile in my mirror, not a car in sight. a lot of corn fields. look right, look left, i can see a mile in either direction and a mile ahead of me. i can cover four miles of road by looking out three windows and into a mirror. there i am, looking at corn fields, which i love to look at, at 55 miles per hour. i thought, why am i doing this? it must be the nanny state that's imposed this on me. i called my -- now there's a law against that, but i called my secretary in our office in one of our offices and said, i want to know how many passenger miles are traveled on rural roads in iowa each year. and can you give me that number? she came back to me later and said, i can't give you the

passenger miles but i can give you vehicle miles on rural roads. i did one of those calculations on my calculator that works out like this. if we all drove 65 miles per hour instead of 55 miles per hour, at 10 miles per hour faster, calculate how much sooner you awe rive at your destinations by driving 10 miles per hour faster and calculate that each of ounce the day we were born were granted the actuarial number, at that time i figured it at 76 years, you figure the hours you have in your lifetime at 76 years and figure out how many hours you spend unnecessarily looking out the wind shield at 55 miles per hour and calculate this life spann and divide it into the time saved an the -- and the miles traveled on rural roads in wray each year and it came down to this. if we drove 56 instead of 55, we will have saved 79.64

lifetimes of living and -- in other words getting to our destination, doing something productive, that has value too. that calculation wasn't made by the nanny state. the nanny state only calculated, gas is always worth more than time. not so in germany where people get out on the autobahn and drive as fast as they have the nerve to drive, on the idea you get them on the highway, off the highway and out of the way where they're not congested -- congesting traffic. that's another speed limit, the shower nozzles, the curlicue light bulbs, all examples of the nanny state. but mr. speaker, the examples of the nanny state have surpassed the imagination of almost every one of us that has common sense. when i look at what has come out of he u.s. department of agriculture, for example, the rule that cooperated with the department of labor, worked in conjunction with the department

of labor and i asked this question under oath of one of the undersecretaries of the department of labor before the small business committee, did the u.s. department of agriculture work in cooperation with the department of labor to produce these rules that would -- that would regulate farm youth labor? and the answer was, yes, they worked in cooperation with the department of agriculture. ag is supposed to know about what goes on in farm families. and so ag worked with labor and produced rules that said to parents, you can no longer control your own children or manage your own children, entrust them into to go to work for the neighbors even if those neighbors are aunts, uncles or grandparents of these children. they wrote the rule that would prohibit farm youth, other than those working right there on a family farm with their parents, outside of that zone, farm youth were prohibited under the rule from being more than six feet off the ground. so they can go out and climb a

tree but they couldn't go out there and get up on a scaffold and paint the undereves of the machine shed, for example. and they were prohibited from being engaged in any kind of hurting of live -- herding of livestock in confinement. they couldn't walk into a hog building and have any engagement there. they couldn't herd livestock even outdoors from horseback or from any motorized vehicle. so you'd say to kids, you can't ride horses out here if it has anything to do with what's work. you might be able to do it recreationally but not with work. i remember rules coming at me from a convenience store several years ago, all they wanted to do was sell sandwiches and pizza and gas and do those things that come out of the regular convenience store. the department of labor went into the community and interviewed high school students working there, learning a good work ethic, how to count change and hold up their end of the work load, they interviewed them and asked them questions like, for

example, have you ever worked after 7:00 on a school night? and one or two of them said, yes, once or twice and there were two violations of working after 7:00 on a school night. and then it was, have you ever operated the pizza dough maker? well, no. none of them had orped the pizza dough maker but once or twice one of them said, yes, i washed the pizza dough maker but didn't operate it. these kind of silly things came out of the department of labor and they levied a significant fine against this good family convenience store operation because they alleged that these youth had violated the rule on working past 7:00 on a school night and that they had not operated the pizza doughmaker but they had washed it. that little egg beeter in inside there they had washed that. too much of a risk far 15 1/2-year-old to have their hands on something like that. so they concluded that the rule

reads operate or otherwise use. and so washing the pizza dough maker turned into otherwise use, levee a fine against this operation. why would anybody stay in business if they had the nanny state go staw poe hunting down employees, interviewing them in their home, these kids that done have any idea why the federal government is sticking their nose into something like this, a completely safe and harmless operation, regulated by the department of labor, all kind of laws that can't be enforced and aren't enforced, we've got people doing that. here's another thing that is idiocy on the part of our child labor laws. and that is that a 17-year-old young man cannot get on the lawn mower and cut the grass around the gas station if he's working for somebody else. violates the rule. but he can get in a car that runs 120 miles per hour and turn the radio up and put his girlfriend next to him and drive down the road with one hand talking and laughing. i can't say he was driving at

120 i might point out for those who are willfully ignorant. a car that has the capability of going that fast. we hand that vehicle over to somebody who is that age but they can't run the lawn mower. this is going on constantly. but the usda foreign piece of this thing has gone too far. they withdrew the rule, not because they changed their mind but because there's a political liability involved. i want to turn up the political liability so they don't get any more crazy rules. but to regulate that farm youth can't be over six feet off the ground, they can't herd animals from horseback or from a motorized four-wheeler or quad, that's all banned specifically by this rule, down to the point where hsus must have been in the room writing this rule saying that the youth cannot bay loued anything to do with livestock that inflicts pain on the livestock. there are a number of things

that happen that are painful. to a newborn baby, i might add, as well as to animals. that's done for their best interests and best good, most of it. but if a 15-year-old girl can go get her earsed pierced without having any permission from her parents and presumably that inflicts pain on those ear lobes, i'm told it does, but that same girl that can opt into her own ear piercing cannot watch while a calf is being ear tagged because the nan nee -- nanny state decided that would damage her psyche to be around that operation. this is nanny state run amok. this is a reach of the federal government into all these aspects of our lives that's so completely intolerable for a free people. we need to push back, mr. speaker system of we are pushing back on some of this. but the one that stands out, i think, the most, emanates from the first lady, michelle obama, and in the lame duck session in

2010, the discredited congress here and i'll say down the hallway in the senate, passed a bill out of there. and it's called the healthy hunger-free kids act, mr. speaker. the healthy, hunger-free kids act was written and passed to satisfy the wishes of the first lady who had the let's move initiative to get our youth in shape. now that on its face is ok. and it's probably pretty good that we inspire our youth to get some exercise, after all, that is a big part of the problem with overweight youth. it's been well publicized that 30% of our youth are overweight. i haven't gone back to question that number, it seems to be a number that's accepted. but if it could be a higher number, i think we'd hear that out of the white house. 30% of our youth are overweight. there's your consensus number, true or not. and clear back when bob gates was secretary of defense, under

barack obama, mr. speaker, he made the statement that since 30% of our youth are overweight, it is a national security issue because we can't recruit enough troops to go through basic training and be able to keep our -- keep them trained up into shape to keep our nation ready for whatever might threaten us because youth obesity was prohibiting our national security. now that causes me to pause, mr. speaker. when the secretary of defense has all these things to worry about, and you've got everything from missile defense to our ground troops and multiple places in the world where we have a presence and where we need a presence and threats all over the globe and the secretary of defense is making a political statement that 30% of our youth are overweight and national security is at stake so therefore we need to do something to cut down on the weight of these kids. excuse me.

and so i think, how is it we can't recruit enough people in our military, even if there are 30% that are overweight an the other 70% don't fill the ranks enough voluntarily, wouldn't you go ahead and take somebody that's five or 10 or 20 or 50 pounds overweight and put them into basic training and just say, you didn't make weight so you're still in basic training and we'll keep you in basic training until you do make weight? it's not that complicated. how could a nation conclude that if the national -- it's a national security issue, we can't solve that problem, it doesn't hurt, you take an 18-year-old young man or woman and if they're 30% overweight and maybe that's 30 pounds overweight, it doesn't damage their skeletal system or their mussclatur system of the nervous system, it's just a matter of carrying too much weight around and you shrink that down and they're good to go. if that unt wasn't the case, there wouldn't be so many healthy people around here that formerly were obese. they turn themselves around, get a good diet and exercise plan they get slim and a lot of

them stay slim for life and live healthy and happy thereafter. i'm glad to see that. that's what we should do. but we can't be a nation that throws up our hands and says america is in danger because we haven't addressed childhood obesity, that's overhype. i sat down with food retailers shortly after mrs. obama brought her initiative to get people to lose weight in this country and they said to me, we're going to take 1.5 trillion calories off the diets of our young people and in doing so, our goal is that they will lose weight and get back in shape. . their answer is, their is a power bar and reduce the calories down to 90 and that dorito bag, we are going to take a couple of chips out of there and fool these kids into eating

fewer calories and there is a habit that will eat a power bar and one single serving of boritos. these kids aren't overweight because there were too many serving, with you they don't exercise enough. you can't give them a calorie bar and can't fool them by taking a couple of chips out of the bag and will open another bag. that's the reality of real life and somehow we have this vision out of the nanny state that there is a way to trick people into getting slimmer. it gets so bad, mr. speaker, in marking up the previous farm bill in 2007, they like to bring somebody in who is suffering

from malnutrition, they couldn't find any witnesses like that, because the food stam himself have been pushed out too hard, because they seem to be available. they brought in janet, the president of the organization. and she testified that this was in march of 2007, she testified that one of the growing problems of obesity is rooted in -- excuse me a second. hopefully i set up the suspense just the right way. janet testified that one of the growing problems with obesity is that even though most people know where their next meal is

coming from, they don't know where all their meals are coming from, therefore, they tend to overeat and when they overeat, they become obese and if we give them an unlimited amount of food stamps, they wouldn't be concerned of food insecurity, they would eat less and that is bizarre. i didn't know how to argue against it. people are overweight because they didn't have enough food stamps. i deal with this here in this congress. wonder for people po call for common sense in this place -- excuse me. and so, mr. speaker, that's the food stamp argument and the

nanny stamp argument but takes me to the school lunch program. it is out of control. it is unhealthy hunger kids, the first lady's bill and i wept into lunch this week to sit down with them. and i look forward to going back there. good young people. and i said now it's lunch time, i'm going to eat your lunch. and they said, you aren't going to? i sat down and not picking on their program, it is rationed by the united states department of agriculture. they didn't have the authority to ration calories to our kids.

that's what they have done. and decided to opt into rationing calories to our kids. for the first time in the history of this country, we have had nutrition minimums. and that standard has been published. but michelle obama's act as interpreted by the secretary of agriculture sets caps on calories that kids get to eat. for example, a high school football player, 250 pounder line map is rationed to 00 calories for brac fast and 850 for lunch. if you give him for another calories for supper, he can't

maintain his level and weight. for me, i need 2,841 to maintain my weight. that is the formula and something i have charted on a spreadsheet. if you put me on that diet, the department of agriculture, every eight days if i'm constricted to that diet, i would lose a pount every eight days. and that's how misguided this is. and a number, 550 calories. 30-pound kinder garthner versus 120-pouppeder fifth grader. twice as large as a kind garthner. and another thing that is bad is

that people that people that come in that have the money and can buy extra food. they will go buy and get an extra hot dog. these dids that are free and reduced lunches don't have the money and watching their better-off friends go back for a second helping. it is not should not be. and this healthy and hunger-free kids act says this, set nutritional standards including vending machines, and in school stores, closed quote. that's what the bill says the department of agriculture and secretary vilsack have decided

they are going to cap the calories. they are deciding they are going to cap the calories. 30% of their kids are overweight. that's the mentality of the nanny state, mr. speaker. and where does the food come from, agriculture, of course. and we have been working to push a farm bill through this congress. a yoor ago, last may, i and i staff put together a bill. and as we went through the community, one thing that stood out, we need a good risk management program, crop insurances is a centerpiece and laid the foundation and we have held the crop insurance pretty well. but that's the crop insurance

piece. we have gone from 19 million people on food stamps up to 47 million people on food stamps and that is a number that expanded dependency in the country. they have pushed food stamps out to people and more people sign up on this program and in doing so they expand the depeppedsi people, those who rely on government. that is part of their mistake. we set about reforming that. we have ta tmp too parlor that says we take e.b.t. cars. we have a fellow that bailed himself out of jail. they are being sold for cash and

discounted. we need to tighten that up. we tightend it up to reduce the dollars so the people should not be receiving the food stamps are less likely to get them and saved them $16 billion. that is one of the reforms in the farm bill. holding the ritching management program and reducing the fraud, corruption in food stamps. that's what the house ag bill is about and i want to see it to come to the floor. i would like to see it come under a closed rule and vote it up or down. if it fails, it fails. then we can go back to the drawing board. if we fail to try, that will be a fame you are. we need to move the farm bill

out of this house of representatives. and i recognize that procedurally at this point as i stand here tonight, that is an impossibility. so the best we can hope for is to bring a farm bill to the floor. i have asked the speaker to do this and ask asked the majority leader to do that and indirect cooperation with the chairman of the ag committee who has done a stellar job and preparing it for floor action. he was great for putting it to go and the work that was done, democrats and republicans, resulted in a bill coming out of the ag committee that had 11 no-votes and bipartisan support for the bill and opposition was bipartisan, but only 11. so whatever the bar was, however high it was, we cleared the bar.

we need to provide that kind of stability and predict so they can plan. and what comes out of this house affects land prices, equipment purchases, land sales, farm rentals and whole configuration and a let's get it done and bring the bill to the floor when we come back. strong statement out of the speaker that's what will happen. looking for reinforce meant for we gavel out. it isn't so critical. the standpoint between now and december 31, but knowing for planning purposes is valuable and december 31 without a farm bill, we have a problem on our

hands. at my strongest urging that we hear that commitment from the speaker and we'll take this bill to the floor. it's a strong message now and like to see it become a full commitment before we leave this house before we go back for our election. i have vetted to so degree and inform this body about the nanny state and issued my urging that we move a farm bill and get a commitment to do so when we come back in november. i appreciate your attention. and how we have reflected the voice of the american people. after the election, i hope we get the kind of help in the senate. with that, mr. speaker, i yield back. the speaker pro tempore: the gentleman's time has expired. motion. mr. king: i move the house do

now adjourn. the speaker pro tempore: those in favor say aye. those opposed, no. the ayes have it. the motion is adopted. the house is

>> later, i house hearing on the pentagon plan for the automatic budget cuts. now oversight hearing on operation fast and furious. michael horowitz describe the sequence of events in a tactic during two arms smuggling investigations. this hearing is just over three hours. >> the committee will come to order. please close the doors.

the oversight committee exists to security the fundamental principles -- first, americans have a right to know that the money washington takes from them is well spent. second, americans deserve an efficient and effective government that works for them. our duty on the oversight reform committee is to protect these rights. our solemn responsibility is to hold government accountable to taxpayers. taxpayers have a right to know what they get from their garment. it is our job to work tirelessly in partnership with the watchdog to deliver the facts to the american people and to bring genuine reform to the federal bureaucracy. this is our mission. today we are dealing with exactly that kind of situation. the report issued yesterday began with watchdogs and whistleblowers making us aware

of a fatally flawed operation known as "fast and furious." before i begin with my opening statement, i want to thank michael horowitz. i want to congratulate him on delivering an extremely comprehensive and independent report. he is not new to the department, but he is new to this job. as inspector general and a senate confirmed nomination of march 29, and when you were sworn in on august 16, we all asked the question -- can you pick up and do this kind of a job on such a monumental task before entrance? yesterday proved to both sides of the aisle that you could. i want to personally thank you.

that ig's served a purpose that we do not get and have not gotten from any administration if not for the 74 ig's and the 12,000 men and women at work for them. the level of transparency and accountability out weights the abuse of power and abuse of discretion and the like that would not be possible. this committee relies on their work. yesterday we were not disappointed. the report released yesterday is a huge step forward toward restoring public faith in the department of justice. i was impressed with the professionalism and the thoroughness and scope of the report.

i know having been all of the day before with his family in arizona were dedicated the border patrol station that he worked out of before his untimely murder in 2010. they too were impressed that a great deal of the closure that they wanted by responsible parties at all levels was met yesterday. the conclusions after 19 months of hard work, of course, are greater than some would want and fall short of what others would want. they cannot by definition bring a complete closure. even the report still has some questions. there were some individuals and some documents that are not yet available. like any document, you have to cut it off and, as you are and bring with you have. i think this was the appropriate time. i am particularly pleased that

we waited an additional week to allow for materials that otherwise might not have been in the report. this committee has had a difficult relationship with justice. much of it because the attorney general, the matter how many time we asked or subpoenaed, no matter how many meetings are staff had, or on able to get the global cooperation necessary -- and able to get the cooperation necessary. i hope that are sick in my chair faces an administration that understands that freedom to openness and openness to the inspector general offices is critical if the american people are to have confidence in their government.

much of what is in the report but not the main subject report has to do with that every 4, 2011 letter in which the justice department falsely stated that in the operation fast and furious, guns did not walk. the only way that thing could beat to it is if you believe guns had legs. operation fast and furious is a poster child for what you do not do with deadly weapons. you do not lose track of them. you do not allowed more of them to go. you are seeing the effects of those weapons killing people in mexico. let us make no mistake, weapons had already been found at deadly scenes of crimes in mexico before fast and furious was shot down. only the tragic loss of brian

terry brought an end to fast and furious. this report will not bring a complete end to the need for us to work with justice to bring genuine reform to the process, it goes a long way toward that. i will particularly note that i am pleased in some cases the executive privilege claimed by the president of united states was not asserted in this discovery. some materials contained in this report help us. but they are many of the items we wished we had received. the conclusions in any report by ig are in fact respectful. since yesterday, two top

individuals who is time to resign had come, 14, 16, 18, 19 months ago resigned, we expected that all 14 would find a way to find appropriate new occupations. ones in which their poor judgment or lack of dedication our unwillingness to read the documents that were required to read would not be held accountable. there is no place in our government for people who under statute are required to do something and then say, i did because someone else did it baloney. that is exactly -- because someone else did it for me. for the american people to note that ultimately a wiretap application is trusted by a

judge in most cases -- only protection for the american people is in fact knowing that there are safeguards in the application. an agent or application cannot tap your phone are running an application. the safeguards that field in fast and furious to know what was known and what wiretaps would tell you that guns were walking -- that same safeguard could cause anyone to see their phones tapped when in fact it should not be under the law. a look at the protection is not granted to safeguard against a fatally flawed tactic by fast and furious. i look at it to know their needs to be material changes in control in how wiretap applications go through a process for approval.

over the next several hours, we will hear a lot from our witness and i rely on our questions based off of the report. i believe that given the opportunity to have a fair question and answer, we will understand why jason retired -- resigned yesterday and why there is much work to be done to reform the justice department and the firearms agency in order for the american people and the people of mexico to have confidence in this government. finally, nothing in this report indicates anyone. if you touched like, looked, could have touched, could have looked, could have asked for information that could have

caused you to intervene, to complain, to worry, to talk to people, and you did not and you are in our government, you fell short of your responsibility. we all have an responsibility to protect against firearms and not in the hands of dangerous criminals. with that, i went to alabama, again, -- thank again -- >> i want to welcome mr. horowitz and your staff. everyone from the review. i want to make it clear that i dread the chairman in expressing our appreciation. it is a very -- i want to make it clear that i join the

chairman in expressing our appreciation. we appreciate your work and excellent way in which they did it. i hope that they are listening. i i thank you again. bacchuses work on this for more than a year and a half. the review more than 1000 pages -- they have worked on this for more than a year and a half. they have reviewed more than 1000 pages. they did it under the microscope of this environment where some public accusations were made before the search for the evidence began. it was a difficult task. your office did an admirable job. again, thank you. one of the most important things we can do today is recognize the service of border patrol agent

brian terry who gave his life for the country. it can't truly offer solace to his family, i hope that this report will help. i would like to commend chairman issa. we have had many disagreements on how this should proceed, but the committee uncovered a severe problem that has been happening since 2006 in arizona that allowed criminals in mexico and the u.s. to obtain hundreds of guns. this committee played an important role in exposing and halting these flawed operations. i also want to commend the attorney general. i have lost count of how many times he has testified on this

issue. he has remained evenhanded and respectful and true to the daunting and critical mission of the department. he has but numerous reforms in place. i know that the administration did not exert executive pillage over any part of i think this is a positive development. i have always believed, and i continue to believe that the committee and the department can resolve any lingering issues about further conflict. i urge the committee to reconsider its position and settler group -- the remnants of this dispute without resorting

to unnecessary litigation that nobody in this country wants. with that, let me turn to the report in order to highlight several key points and raise some specific questions. there can no longer be any doubt about gun walking under the previous said ministration. it finds that atf agents simply let done is what. affidavits contain just as much detail as those in fast and furious. the report includes, these tactics were include rejigger used by atf more than three years before operation fast and furious. there can be no any doubt -- camino doubt that gun walking was authorized to approve by the

attorney general or senior department officials. . it was primarily -- in his written testimony for today's hearing, he says they share equal responsibility for the strategic and operational failures in operation wide receiver and fast and furious. with these points in mind, i have too broad questions which i hope you will address. first, how could this tactic have been used for so long, over the course of five years, in two administrations, without a field office in phoenix or the u.s.

attorney's office in arizona stepping in to halt it? what allowed it to go on for so long unchecked? second, what should we do now to ensure that this never, ever happens again. i note the ig has made his recommendations and i have made my own. which of these recommendations have already been implemented, which should be pro or it is -- prioritize, and which may require legislation? i thank you again and your staff or an excellent job, and with that, i yield back. >> i thank the gentleman. i now ask unanimous consent that the gentleman from arizona be allod to participate in today's hearing. >> without objection, so ordered. >> i also would reserve the right to remembers sitting on

the day as will be recognized only after all other individuals aisle areside of the die recognized on a back-and-forth basis. i would like to thank mr. barber for making the effort to be there and for representing that area of arizona that i think is so affected by fast and furious. pursuant to the rules, all witnesses before this committee will be sworn so i would ask that our witness please rise and take the oath. please raise your right hand. do you solemnly swear that the testimony you are about to give will be the truth, the whole truth, and nothing but the truth? with that, the record will recognize that mr. horowitz answered in the affirmative. >> gently, we normally talk about the five minutes. take the time you need to give us your opening, recognizing that it will be a long day of

additional opportunity for you to answer questions not in your opening. with that, the gentleman is recognized. >> thank you, mr. chairman. i have pared that down somewhat so that i don't go on for 20 or 30 minutes and i will try to stick to the five minutes, certainly. good morning, and thank you to the members of the committee for inviting me to testify today about the report released yesterday, which details a pattern of serious failures in both atf and the u.s. attorney's office in handling the investigations and fast and furious and wide receiver and the justice department's response to congressional inquiries about those lot operations. this is my first opportunity to testify before the congress since i was sworn in five months ago and it is an honor to be here today. during the confirmation process,

i made a commitment to the congress and to the american people that i would continue the strong tradition of my office for independence, not partisanship, impartiality, and fairness. those are the standards that i and my office applied in conducting this review and in preparing this report. as in all our work, we abided by one bedrock principle, to follow the facts and the evidence wherever they lead. as indicated previously, this report could not have been done without the extraordinary dedication of the staff and the employees in my office. that worked long nights, weekends, free vacations, and i could not thank them enough, and i appreciate the committee thanking them for their hard work. as indicated come up reviewed over 100,000 pages of documents here. we interviewed over 130 witnesses, many on multiple occasions. the witnesses we interviewed

served at all levels of the department from the current and former attorneys general to the line agents in arizona who handled the investigations. very few witnesses refused our request to be interviewed and where they did refuse, we noted those in the report. the justice department provided us with access to the documents we requested, including documents from post february 4 concerning the department's response to the congressional inquiries. we operate with complete and total independence in our search for the truth and the decision about what to cover in this report and the conclusions that we reached were made by us and our office and by no one else. i am pleased that we have been able to put forward to the congress and to the american people the full and complete recitation of the fact that we found and the conclusions that we reached, with minimal reactions by the department to our report.

the administration made no redaction for executive privilege, even though our report evaluated in detail and reaches conclusions about the department's post february 4 actions in responding to congress. additionally, at our request, the department has agreed to seek court authorization to underreact as much of the wiretap information as we included in this report as possible. the court agrees to the department's request, we will shortly issue a revised version of the report but that material unredacted. the investigation that became known as operation fast and furious began on october 31, 2009. by the time the indictment was announced on january 25, 2011, over a year later, atf agents had identified more than 40 people connected to trafficking conspiracy that was responsible for purchasing over 2000

firearms for approximately $1.5 million in cash. it atf agents seized only about 100 of those firearms that had been purchased. numerous firearms that had been bought by straw purchase shoes were recovered by law enforcement officials at crime scenes in mexico and in the united states. one such recovery occurred on december 14, 2010 in connection with the tragic shooting death of a federal law enforcement agent. u.s. customs and border protection agent brian terry. shortly thereafter, the flaws in operation fast and furious became known, as results of the willingness of a few atf agents to come forward and help it did tell what they knew about, and as a result of a convoy out of the investigation by the congress. on february 28, the attorney

general requested my office to conduct a review of operation fast and furious, and we agree to do so. during the course of our review, we received information about other atf firearms trafficking investigations that raised serious in questions about how the were conducted. we concluded that both operation white receiver and operation fast and furious -- wide receiver and operation fast and furious were seriously flawed. most significantly in their failure to adequately consider the risk to the public safety in the united states and mexico. both investigations saw to identify the higher reaches of firearms trafficking networks by deferring any overt law enforcement action against the individuals in straw purchases, such as making arrests or

seizing firearms, even when there was sufficient evidence to do so. the risk to the public safety was immediately evident in both investigations. almost from the outset of each case, atf agents learned that the purchases were being financed by violent mexican drug trafficking organizations and that firearms were destined for mexico. yet in operation fast and furious, we found that no one responsible for the case, either at the phoenix steel division or at the atf headquarters or in the u.s. attorney's office raised a serious question or concern about the government's not taking earlier measures to disrupt a firearm trafficking operation that continue to purchase firearms with impunity for many months. we also did not find any persuasive evidence that supervisors in phoenix, at the u.s. attorney's office, or at

atf headquarters, raise serious questions or concerns about the risks that public safety posed by the continuing firearm purchases or by the delay interesting individuals who were engaged in the trafficking activities. this failure, we found, reflected a significant lack of oversight and urgency by both atf and the u.s. attorney's office and a disregard by boat for the safety of individuals in the united states and in mexico. our review revealed a series of misguided strategy, tactics, errors in judgment, and management failures that permeated atf headquarters and the things bill division as well as the u.s. attorney's office and headquarters of the department justice. in the course of our review, we identified individuals ranging from line agents and prosecutors in arizona to senior atf officials in washington d.c. who bore a share responsibility

for atf's knowing failures in both of these operations to interdict arms illegally destined for mexico and for pursuing this risky strategy without adequately taking into account the significant danger to public safety that it created. we also found failures by the part officials related to these matters, including failing to respond accurately to a congressional inquiry about them. based on our findings we made six recommendations designed to increase the department's involvement in an oversight of atf's operations, to improve coordination among the department's law enforcement component, and to enhance the department's wiretap application review and authorization process. the inspector general's office intends to closely monitor the department's progress in implementing these recommendations. finally, we recommend that the department review the conduct and performance of the department personnel that are

referenced in the report and determine whether discipline or other administrative action with regard to each of them is appropriate. thank you again for the opportunity to be here and i look forward to answering any questions that the committee may have. >> thank you, mr. horowitz. i will recognize myself for a few questions. you are given a great deal of access in order to do this, over 100,000 pages. would characterize -- would you characterize, were all 100,000 pages ones that you would have made available to this committee review deciding to have to see those documents? we receive less than 8000 pages. >> i did not obviously go through the 100,000 pages. >> i will ask it in reverse. do you know of agents that you

saw that congress should for good cause beat denied -- every document we ask for an reviewed and cited in this review we found relevant and important. >> early what we have seen and we asked for and saw, we determined was relevant. >> it would be fair to say the documents were post february 4 that you evaluated and help you prepare this report in which executive privilege was not claimed were relevant, the use them, and they should have been provided to congress in the ordinary course. they are being provided in directly at this time. >> with certain found irrelevant. >> there were a number of people you did not get to speak to. mr. cunningham's spoke to you and then later would not speak to you. kevin o'reilly, can you tell us a little bit about your efforts

to try to interview kevin reilly, a member of the national security team? >> we reached out to his lawyer, requested an interview. we have no basis to compel interviews from individuals who are outside the department of justice. he does not work in the department just so we had to ask for a voluntary interview, and his lawyer told us he would not appear voluntarily. >> would it surprise you that he has been in afghanistan and we have been denied even the ability to serve him a subpoena. >> i was not aware of where he was but i was told by his attorney -- i don't recall knowing where he was, but we were told he would not appear voluntarily. >> also, there was a full-time employee of the department of homeland security. would you explain your efforts to interview that individual? >> there was an agent from the department of homeland security that was assigned to the operation.

as part of our ever to be thorough an interview all people who might have information, he began -- he again is out of the part of justice, so he declined are voluntary request to be interviewed by us. we saw for the department of homeland security to speak to him and we understood that absent being compelled that he would not speak voluntarily, and that request was decline, is my understanding. >> i admonish to everyone to stay on to this, but in this case i want to go outside the scope of this somewhat. we are the committee that will oversee a change in the ig act if there is one. in your opinion, if the i.t. act that created a mechanism for you to fully that these requests, even if these were individuals outside of your particular narrow agency, is that something you believe would be helpful,

speaking as an ig, for future investigations? >> certainly, we would have used whatever portis we had to seek testimony from individuals, as we were able to internally with the justice department. having extended authority would certain have allowed us to take initial actions here. >> we may wear by secretary napolitano that the department was unable to have an individual who worked in an event, one that killed one of her charges, why she would not insist that that individual speak to you in an investigation? >> i don't know personally that information, mr. chairman. >> it has been said by many, mostly on the other side of the aisle, that there is nothing in these wiretap applications that would have caused senior

officials to see any red flags as to the reckless tactics. i realize these documents are not unsealed. would you characterize for us whether you would say, as to report does, and i will read this but i would like to elaborate. your findings that wiretap applications approved by senior officials did contain red flag about reckless tactics to should have acted on this information, and it goes on. are we to conclude that in fact, if you read one or more of these 14 wiretap applications, you should have known that guns were walking? >> as we set in the report, and i also reviewed the 14 applications, believe that if you are focused and looking at the question of gun walking, you would read these reports and see

many red flags. >> in your report, there was an area i focused on a little bit where it implied that lanny brewer did not respond or did not acknowledge the february 4 letter. is it not true that lanie brewer in fact entered good job is -- as at least an answer acknowledging he had received it and made that comment? >> that is correct. >> was he in effect on his way to mexico city to sell the mexican government on what was effectively a gun walking program, coordinated with them? >> my understanding was he was in mexico and he had raised the possibility of some program involving cross border cooperation based on tracking

activity, but i do not have more knowledge on that at this point. >> thank you very much. i just want to walk for some quick points with you and then ask you to respond in more detail to some broader questions. you examine operation wide receiver in the bush administration and operation fast and furious, which was in this administration, is that right? you found that gun walking was involved in both operations, is that correct? >> that is right. >> we are talking about atf agents letting guns walk in both operations, is that correct creston arthrex correct regret to report said this, "operation wide receiver was noteworthy because it inform our understanding of how these tactics were used but atf or than three years before operation fast and furious was initiated."

is that would your report said? >> that is. >> you also found that neither attorney general mukasey nor attorney general holder authorized or proved gun walking, is that right? >> that is corrected attorney general mukasey was sworn in after the completion of the investigative portion of the activity. >> you found that the wiretap applications in the white receiver included the same kind of potential red flags found in the fast and furious applications, is that correct we found red flags existing in receiver as well. >> you interviewed officials from both administrations and they told you that normal practice was to read only summary memos, is that correct? >> we interviewed three of the five deputy and all the three

that we interviewed -- all three indicated that they could not -- they did not routinely read the affidavits when they came to them. >> we need to make sure they read the affidavits, would you agree? >> i absolutely agree, and i remember reviewing them. >> you found a gun walking was not ordered from the top but instead was "primarily the result of strategic and tactical decisions by the agents and prosecutors." he said in your testimony "they

share equal responsibility for strategic and operational failures." peerman questions. i think these questions will go to the heart of the reform that i hope we will be able to get underway. how could these tactics have continued in phoenix over a span of five years and two administrations without being visited by atf or the attorney's office in arizona? how should it have worked, and if an atf agent came to phoenix with this kind of plant today, how should it be examined and that it now? >> as to the first question, i think there were a serious lack of controls in place in both the u.s. attorney's office and atf operations.

primarily atf, because they are the law enforcement agency that needed approval. the attorney general guidelines for these undercover operations were never amended to cover a kia. though there were a series of failures in the controls. we have made significant recommendations in that area. the department and atf have put in place additional tools and control already, but there has to be a serious review of operations like this that impact not only the number of guns in the communities that are impacted by these but that involved a foreign operation, and guns gone to a foreign country. that was not there at the time. there needs to be a serious look at that. i to prevent that going forward is watching carefully to make sure the reforms we are talking about not lost one of the headlines of the report go way,

that there is oversight and follow-up by the inspector the general's office and by the congress in this regard. >> one last question. mr. nelson, who is heading atf, from reading the report, it seems like he may have fallen asleep at the switch. from what you saw, again, this is the head of atf. how much can you tell us about what the report says about that? >> we down in operation fast and furious that there was significant information coming to atf headquarters. in fact, by march of 2010, the deputy director of atf, who was thexperienced agent, for first time in his career asked for an exit strategy because of his concern about what he had seen. he asked for but did not come

for -- did not come to headquarters for six weeks. it was not reviewed by the deputy director until almost a year later, after the shooting of agent terry and after the indictment occurred. the fact that the deputy director could see the need for an exit strategy in march of 2010 and not receive it and review it until 2011 i think speaks volumes about what happened here in terms of failures of oversight. >> i thank the gentleman. with that we recognize -- with that i ask unanimous consent, the general lady from florida. but that we go to the gentleman from utah. >> appreciate your tenacity. we have a dead border patrol agents, a mexican helicopter shutdown, a dead border patrol

agent, hundreds of guns that are still unaccounted for, untold numbers of crimes that have been committed with these guns, an attorney general is best argument is that -- is a plea of ignorance. i think, mr. cummings, the ranking member asked the most prevailing question. how does this go on for so long without someone saying something is improper? the acting atf director is in that position for two years and met with the attorney general one time. one time. that is inexcusable in my book. i also think the conclusion validates what we have been concerned about for so long. the head of the criminal division is supposed to be lanie brewer, but lanny brewer, having been briefed on what happened previously, knew about gun walking and said nothing about it. it did not issue and you eat that said we are not going to do this anymore. in fact, we could be led to

believe that just by allowing it to continue on, that he was actually endorsing this. i think this is a wonderful report. i appreciate its thoroughness. i think you were a little soft on lanie brewer. to suggest that he did not supervise operation fast and furious and did not authorize the activities in the investigation, i would disagree with that statement. place in line steam reported to lanny brewer. as this -- adjacent winds been reported to lanie brewer, and -- jason weinstein reported to lanny brewer. a letter that was totally false about the atf activities -- the letter does not even mention

fast and furious. says that these guns were allowed to walk, that atf does not allow guns to what in any way, shape or form. i would port to the february memorandum about oregon to mexico. in mexico, he proposed to the mexican government, his suggested allowing stock purchases to cross into mexico. we have in black and white a document suggesting he is not only approving of these types of activities, he is advocating for these types of activities. to answer mr. cummings question, it is crystal clear. the head of the criminal division was out -- down there pitching to mexico that we ought to be doing more. the person in charge was advocating for it. he knew about it previously and when he did hear about it, he did nothing about it.

he had seen it and he said nothing about it. after the letter goes out, everybody at the department justice knows is wrong. it takes 10 months for them to fess up on it. mr. chairman, i would highlight what is that on page 277 by the inspector general. we found the affidavit described specific incidents that would suggest to a prosecutor who was focused on the question of investigative tactics that the atf was employing a strategy of not interdicting weapons are wresting the straw purchasers. the attorney-general testified in the judiciary committee in response to congressman quell, i have looked at these affidavits and there is nothing in those avens as i review reviewed then the said don -- nothing in those

affidavits as i review them and that set gun walking was allowed. mr. chairman, i am concerned there was a culture and environment where people are either afraid or not willing or did not want to share with the attorney general key information specific to what we were doing with mexico. i will highlight the culture and environment was not conducive to have the truth surface. it is shocking in troubling to me that we did not -- the department of justice never communicated to the senior people in homeland security where one of their agents was dead. the secretary of homeland security did not ask the attorney general what was going on, nor did he ever communicate with the secretary at the state department so she could deal with the situation.

we pour thousands of weapons into mexico l whenever father to tell the secretary of state? that is one of the things we have to look at because that is one of the compounding problems we have. even after we knew all these think that our justice ever saw it. >> with that we recognize the gentle lady from new york for five minutes. >> first of all, i would like to welcome the ig and note that he is from the great state of new york do we are very proud of you, even though your now a washingtonian. congratulations on your public service. we appreciate very much to report. if you were so concerned about guns at the border, my colleagues could have supported the bill that we put forward for gun safety. in my opinion, you are not

serious. if your worth of bonds before, then let's make it a federal crime to traffic guns. let's make it a crime for sales of these guns. let's ban assault weapons that are not used to do anything but kill people. they don't kill animals, they just kill people. there are number things we could do right now that would get the guns off the border. the mexican government supports it. that vast and to do so. we got a letter from the president of mexico saying this is wonderful, that will help bonds on the border. i would like to do what the chairman on the, which is to focus on this excellent report that mr. horwitz came out with. in december 2011, our attorney general explained to the house judiciary committee that gun walking in operation fast and furious originated with the

local phoenix office of the atf and u.s. attorney and that it was not the result of any strategy or directive from the main justice. he said the notion that people in washington, the leadership of the department, through the use of those tactics and fast and furious, is simply incorrect. this was not a top to bottom operation, this was a regional operation that was controlled by atf and by the u.s. attorney's office in phoenix. mr. horwitz, report reaches a similar conclusion, pointing back to the genesis of these tactics by the field agents, the prosecutors in phoenix. this is what your report says about operation wide receiver.

"in sum, the evidence demonstrated that that decision to not introduce the firearms, this -- is by having probable cause to do so, was a decision made by the atf the steel division and was intended to ofance atf's broader goal identifying additional participants in the conspiracy." so my question to you is, the main question that we have, is how is it that these tactics started? what went wrong? can you explain what he founded investigation that would explain how these tactics first started being used in operation wide receiver? cracks in operation wide receiver, what appears to have occurred is that information came to the agents in the tucson office of the phoenixville

division and they made a conscious decision to not take any action to stop the trafficking with the straw purchases because they wanted to follow the guns and figure out to whom they were ultimately going. that was a decision made early on in the investigation, almost at the outset. it was done with the acquiescence and approval of the u.s. attorney's office, so that is what we found that there was a failure by both offices. but the net with the office in phoenix? but the u.s. attorney's office for arizona. >> what about the operation fast and furious? did the agents have that motive, or did they just failed to consider the public risk involved? what were they thinking? >> they did not have bad motives, as far as we found. what we heard from the agents what they made a conscious decision that a long-term effort, having a long-term investigative strategy to

dismantle a large organization was the greater good that they were undertaking, to dismantle the organizations, stop the trafficking, and that was what they believed was in the best interest of public safety. as we found, that was an incorrect calculation. law enforcement's primary objective, he cannot take action to let guns walk. >> what can we do to make sure this does not happen again? >> there needs to be serious reform in controlled we have outlined at atf. there has to be an internal change to how cases are managed there. there needs to be supervision. there needs to be oversight. and thoughts about investigations like this need to be carefully reviewed at the highest levels of the organization at the outset, not defer to the line agent or their

line supervisor. to me, that is the first and most important reform. >> that is a step that has to happen. there are many other reforms we have outlined, including, for example, making sure that at the department of justice, there are reviewing our tech applications when they get them. there needs to be clear policies in place within atf into what is allowed and what is not allowed. not just reviewing and vetting, it is a clear line as to what is and is not permitted. >> we now recognize the gentleman from south carolina. >> when i met with you several weeks ago, i left that meeting cautiously optimistic that we would receive a thorough, balanced report, and my optimism was rewarded. i also shared -- your gratz as a

prosecutor gave me that cautious optimism. this was never about politics to me. i don't care which party is in power. it is about a dead border patrol agent and holding the institutions of government responsible for what they have done. i think it is wonderful at one level that we have an independent entity like you to investigate. i just thought that was what the department of justice was. i naively thought the attorney general, as the top law- enforcement official at the department justice was that independent entity that we could trust. whether it is the letters in march, in february 2011, or testimony delivered to committees of congress, sadly, the departure of justice was not vindicated.

wiretap applications, i am specifically asking the attorney general, are you sure someone reading this wiretap applications would not be led to the conclusion that done walking was used. your report debunks that. you used to read wiretap applications, correct? and your conclusion with that background is that are reasonably prudent person reading these applications would have been on notice way back when that the tactic of gun walking was being used. is that correct? >> yes, for someone who was watching it, looking for it in that context, i agree it would have seen those red flags. >> that was a startling conclusion that you reached. another startling fact that you included in your report, and correct me if i mischaracterizing what you wrote, but the attorney general, even today, does not believe that a dead border patrol agent

from an agency that he does not supervise, who was killed by weapon as part of that investigation of an agency that supervises is something that should draw attention. do your report which even today the attorney general is not sure that this should have been brought to his attention. >> as we included in the report, the attorney general told us it would not necessarily be something he would be expected to be notified of. we are talking about not the death, because he was notified about the death, but the fact that to firearms were found at the scene that were connected to operation fast and furious. >> when you have a deadline for not offer, the next words out of your mouth are, i want to know everything there possibly is to know about how this happened. i don't just want to know what

the autopsy says. , to know how we got to this point. it speaks to duty to supervise, not just a common-sense duty. i like to ask specifically about the code of professional responsibility. is there a duty to supervise, for supervisors attorneys to supervise the work of those underneath them? not commonsensical obligation, but is there a code of professional responsibility, obligation to supervise? >> i am not sure i could speak directly to the code of professional responsibility in that regard. we were looking at where there were supervisory failures. we found there is clearly an obligation as part of burress -- performance responsibilities of the agents and supervisors. a fella to do that was a serious management failure, in our estimation -- the failure to do that this is serious management failure.

>> you can argue that were calculated to mislead, but there can be no argument that they were faults. the largest exception i take your report is the same one that mr. chafetz had. lanny brewer was responsible at some level for the approval of the wiretap applications. lanie brewer reported this february 4 letter, which was demonstrably false, to a home computer. you don't have to be real good prosecutor to deduce that you forward something to a home computer because you are going to read it. i cannot think of any other reason to forward a letter other than to read it unless you are a historian or an archivist. then he confirmed our suspicions by writing "good job." given the failure to connect the

dots, i just find it -- i cannot imagine headline that read passengers charged with speeding, driver exonerated. we had people under lanie brewer who work resigning are being dismissed. how does he is gay this? >> we found that -- how does he escaped this? >> we found that mr. brewer in april 2010 learned about the gun walking in wide receiver. atf reports to the deputy, not to him, so it was incumbent upon him, in our view, to reported to the deputy and the attorney general. when the letter came in from senator grassley nine months later or so in january 2011, we

believe, as the altman testified, that he should have alerted the department to that. those were the findings we may. as to what the discipline and decision is as to discipline or administrative or other conduct, that is really a decision ultimately under our system to the attorney general. i have the authority to investigate, make the findings, which i did, and then is that to the attorney general to decide what, if any, discipline to impose. >> thank you, mr. chairman, and mr. horowitz for the very thorough job you did. i appreciate the way you connected the dots and drew the line so we understood where there was instability. my line of questions really goes to why this investigation has

gone on for so long and why the public was concerned about it. the face of this investigation, the poster boy, as it were, has been the attorney general of the united states. the committee has had hearings where over and over again, it was alleged that gun walking was known at the highest levels, even by the attorney general, and it was an approved plan at the highest levels of the obama appointees. i think it is only fair, when the attorney general over and over again has been the face of

this investigation, the one held responsible for the gun walking, to put on the record what you have found with respect to the attorney general of the united states. you have indicated they you receive cooperation from the highest levels of the justice department in doing your investigation. >> yes, we receive the documents that we ask for and is indicated, other than a handful of individuals who refuse to speak with us, we generally were able to speak with everyone wanted to. >> did you speak with the attorney general of the united states? >> we did. cracks may ask you, did you find any evidence that attorney general holder approved of the gun blocking tactics that are under investigation by this

committee? >> as we outlined in the report, we found no evidence that the attorney general was aware in 2010, before senator grassley letter, of operation fast and furious and the tactics associated with it. glaxo he could not have approved because he did not even know about the gun walking tactics before 2010 para >> we found no evidence that he had been told about that. >> let's go to other high levels of the justice department. did you find any evidence that the acting deputy new or authorized by unlocking? >> we found that the acting deputy attorney general was briefed about operation fast and furious of march 2010, but we concluded after looking at what that briefing involved, which

was item 4 of a seven item agenda in a 45 minute briefing that it was not a sufficient briefing to put him on notice, directly and expressly, that gun walking had occurred. we thought it was sufficient to trigger questions but not sufficient to put him on notice. we were troubled by the fact againe was never breeiefed by atf. two weeks after that brief and, he had asked for the exit strategy. no one went back to him to tell him that information. >> so this controversy centered in the u.s. attorney's office and at the atf, your last answer, does that mean that the

decision to keep the active attorney general to know about the parts of fast and furious that are most controversial? >> we did not find any evidence of deliberateness. this is a situation where the deputy director of a tip that ask for an exit strategy in march and never looked at it until 2011. it would be hard to explain what was going on or what people were thinking given that level of failure of oversight. >> to your knowledge, is anyone at the justice department looking into, perhaps, the most important tool in the u.s. attorney general could have, but tool that might have been useful to the u.s. attorney in dealing with the gun walking, or are we left at the end of this investigation with gun walking

and whatever else anybody can think of to do something about it? is there any were going on in the justice department as a result of your investigation to give atf or the u.s. attorney in arizona hear the kinds of tools that would mean that nobody would even think about a surreptitious way to get a gun, like gun walking in fast and furious? >> what i have been told are the reforms needed within atf, within the justice department's review of wiretaps. beyond that, i have not been informed of any additional steps the department can take. >> we now go to the gentleman from arizona and would ask you to yield for 15 seconds. is it not true that the then

chief of staff that the attorney general should have been briefed related to what they do about fast and furious, and obviously the question if fast and furious led to brian terris murder. >> mr. horowitz, thank you. as my previous colleague says, i grew to when he came to talk to me, and thank you very much for instilling some trust. inner discovery with witnesses, paperwork, did anyone within the doj system raise questions about the truthfulness and possible misleading testimony that is being presented by at their interviews. >> did you directly ask the question?

>> i would have to go back and look at the transcripts. cracks in detailing with lanny brewer, it is my understanding -- mr. brewer said members of the criminal division to review the auspices and directives of information wide receiver. >> correct. >> i am a dentist, but this is even worse than what operation wide receiver would have been do you know the outcome here, and you are still permitting it to go. >> i believe it is april of 2010 that the meeting occurs where mr. brewer is informed that there is going to be meeting and his deputy goes to that meeting

to discuss the unlocking and wide receiver. that is with mr. hoover, the deputy director and deputy director mcmahon. >> all these pieces are. the brewer that he knows about this early on -- all these pieces are pointing to mr. brewer. i have a problem with this with mr. brewer because he is directly in the line of fire, from what i am seeing, and he's got problems. he listens to the presentation and almost gives the thumbs-up with no caution flags at all. just like the wiretaps, these

are alarming discoveries. >> it is clear that mr. burr what the where and april 2010 about gun walking from wide receiver, which is why we were troubled by the decision to not tell the attorney general about it because they have authority over atf and he does not. >> i think the scrutiny on fast and furious is much higher than wide receiver was. you already know the results and you are making the results even worse. >> that is why we were troubled when the information came to the department from senator grassley in january 2011 that those dots were not connected by mr. brewer and by his deputy, mr. weinstein. >> the day after brian terry was killed, the attorney general emailed three people, did he not? >> i believe it was the day after.

>> the failure to notify him about the connection between the two guns found at the scene, that they had been bought 11 months earlier by subject identified in fast and furious. >> when a lobster is murdered, there are a lot of questions being asked. we have a whole scenario of things that occurred here. the question should have been asked and we should have had a better outcome. there was another incident in arizona in late january. questions were abounding, was one of these guns being used? we should have known the gdl

attorney-general testimony to maecenas flawed. we would have been asking and should have known much earlier about the questions, based upon the inquisition of the witnesses to these crimes. and the nature of these crimes and the audacity of these crimes, particularly to hire members like congress. >> as i indicated in the report, we certainly, when that information about guns connected to the shooting scene of a law enforcement agent, that kind of information needs to go to the attorney general of the united states. >> so it was covered up. >> i don't know whether it was covered up or not, but it was not told to him. >> i thank the witness for the very thorough report.

extremely thorough. churchill might say that this report defends itself against the risk of being read by its very linc. however, i am working my way through it, going through its in great detail. you do dress a lot of the questions raised here in five or more hearings. i just want to ask you one point, though, about vindication. some are saying people are vindicated and some are not. in prior hearings, the accusations were against the attorney general. attorney-general holder had come before the committee several times, also over in the senate. the allegation was the allegation was that he knew

about the operation, he ran it and the blame lies with him. i read your report is said there was no evidence that he knew. you do accurately pinpoint people who are ultimately responsible. you identify the flaws in their thinking, their misguided strategies, their misguided tacticsstrategies. it was a terrible and tragic mistake. you are highly critical of some others. in fairness, there were cross allegations against the attorney general as well that he knew more about when he was an office as attorney general, yet after the fair analysis, there was no

evidence that either attorney general holder or attorney general mike casey knew about the operations. do you believe this report vindicates attorney general holder and, fair enough, attorney general mccasey given their lack of information about what was going on. >> i think the record speaks to what we found and our conclusion. i will stand by the very lengthy i agree with you report. without trying to reach characterize it today myself. -- recharacterize it myself. >> i think your point is extremely good that nowhere did we find specific incrimination of if they knew either one of these attorneys general.

i think that is an important. and when the committee should be aware of. i do not think anyone should have us and that they knew. we all wish any attorney general would ask to know more. the inspector general's reported does cast blame for high ranking people. neither were found to know it. >> reclaiming my time. >> we stopped the clock for that question. >> thank you for that courtesy. this is a big agency. we have thousands of employees. at least the report indicates an assistant deputy attorney general in won a division who failed to report, failed to report -- failed to inform his superior. the implication is the u.s.

attorney general should know what every single assistant deputy attorney general nose and fails to report. i did not vote for it, but this congress had just held the attorney general and content, the house did. based on this report, the suggestion by many and some in this committee is the attorney general was withholding affirmation because he was involved. this report is very thorough, very well done report, and partial and objective of based on documents not available to this committee, interviewed multiple times have concluded that was wrong. that was wrong. this attorney general while not perfect was not guilty of the things that people on this committee and others in the

press accused him of. that is secondary. >> could you get to primary? >> the changes that have been made at atf, ultimately the primary objective here was to pay respect to brian terry's service to this country and his family. can you tell me whether the reforms to atf that will prevent another agent to press on the uniform for this country and served this country could be protected now because of the changes made by the atf said something like this does not happen to another american on the customs and border patrol? >>atf steps are important first

steps. we recommended those and we will call -- we will make sure they are put in place. >> the question about people in forming or should have informed the attorney general -- i think he would like to have an answer to the change. >> we struggle to understand how an operation of this size and importance that impacted another country like it they could not have been briefed on to the attorney general of the united states. it should have been. it was that kind of a case. >> we now go to the gentleman from pennsylvania. >> thank you, mr. chairman. thank you for your continuing good work on behalf of the department of justice and the united states of america.

you could huff -- you could not have tea off my question any better than asking about the failure to report this up the chain. going back to april 12, this is an e-mail that comes from deputy attorney general weinstein. it goes with the prosecution memo from operation wide receiver. these are his words. i ensure -- i am stunned what we had to do to make sure not a single weapon walked on an operation i have been involved in planning. we need to go over these issues with our front office. we owe it to atf headquarters to preview these issues before anything gets filed. let me ask a predicate question. with complete knowledge that guns have been what, that there are implications that crimes have been commited in mexico

based upon a prior activity, d you ever ask why they continue to prosecute that case and send agents that we invigorated that investigation and prosecution on the prior act? >> i would have to go back and checked the transcript on what was asked and answered. i do think it is evident from e- mail traffic that we looked at which was a belief that this was a good case. there were people who had evidence on, but there would be the possibility of embarrassing the agency. >> we are about the public safety. >> from our standpoint that appear to be the outcome of that meeting that happen two weeks later, which was about managing what the public's reaction might be. >> what i find about this statement is, in its own words it agreed to which mr. weinstein

believes there is a responsibility to inquire within a investigation. let's move forward a little bit to the next matter in which he is now in charge of the oversight of the fast and furious. there are certainly communications that take place with regard to certain higher level individuals who are engaged in the review of information and others. what responsibilities did he have at that. in time to acquire as to the activities that may have taken place during fast and furious appreciating that by his own rank by which he already understood first that the atf had already engaged the in this activity and properly, and secondly, his own articulation

that even a single gun being what was a violation of what he considered his sense of a properly run case. and, third, his own desire to ensure inquiries were made. >> what occurred in that april time period, the discussion he had about gun walking the he learned information about fast and furious. perhaps not gun walking was going on, but he learned affirmation about the case sufficient enough to write an e- mail to the head of the -- to refer to it to one of the most important cases involving the u.s.-mexico trafficking activity. he did that in the context of trying to ensure the wiretap operations were done properly. he then two weeks later had a wiretap application land on his desk for approval. he indicated to us he never read

it. we thought there was sufficient evidence even in the cover memo to warrant and to acquire into the affidavit. >> i thank you for your language. this is the most significant u.s.-mexico traffic operation we have going. what is the duty to inquire having notice. people are being sued all over the united states because they have a prior notice of a condition, failed to act, and now they are being held responsible because somebody else has been harmed. i am already identified the standards this individual had. we know he has information about prior activities of this sort. another is information contained, he is responsible for

reviewing, maybe not complete. the failure to enquire and the communications that take place between brewer and one more aware he judged by the demeanor that he understood when he was talking to the atf -- where is the duty to inquire that would have led to a clear articulation of what was going on with operation fast and furious? >> that is a very important question, and the reason we have the report about him meeting to review the affidavit said. they are not looking at it just as robotic lawyers to check a box a about, is this statutory purpose met? there are members of the ascs, they are involved and policy issues. they have an appreciation of broader issues. if they notice a problem, their

obligation as a deputy ag is to ask follow-up questions. >> you get the ability -- i think you did well. your judge, jury, a fact finder, and director of the opinions, so you are able to classify things. is it your opinion that mr. weinstein should have specifically and unambiguously questioned whether there were improper tactics on fast and furious that merited those that took place in the prior operation? >> we found there was specific information in the cover memo he saw to either ask questions or go into the affidavit and read it which would have triggered more red and flags. >> i thank you for the line of questioning. we now go to the gentleman from illinois for five minutes. >> thank you, mr. chairman. thank you for your work. we appreciate all of your staff.

the extraordinary amount of work that took place here. talking a little bit about the wiretap analysis. is it your sense they thought this was because of the sheer volume at senior level people were only reading the summaries of these wiretap applications? >> and that is what we had heard. the sheer volume of wiretap application but came before deputy ag's with all the other items they had to deal with it could rely on the memo's from their subordinates. we're not taking issue with the thoroughness of the memos that they receive, but that is what we have heard. >> or the summaries enough to create red flags and enter your mind, or the actual wiretap full body? >> in our view, the summary memo that was received by mr. when steen, given by what had just

occurred in the prior few weeks was sufficient in our view to trigger him to inquire further. >> going back to your point of avoiding this adventure of the future, which is what this should really be about, -- avoiding this in the future, how do you get through the volume that we talked about here in all of these cases and many more instances across the country and other scenarios you can imagine so what you have to do, take a random number of a particular type and do a more thorough analysis to see if there is something more significant there? >> i think in our view, the congress has authorized what is a very interest of law enforcement technique. wiretapping, phone or other personal device. that is a fourth amendment right

and is being invaded. in our view a denture each instance, a deputy attorney general, the person to whom the statute congress has given authority to authorize that intrusion, but that each affidavit in a manner that allows them to perform a judgment on whether they are comfortable that the application -- that affidavit meet the statutory criteria. we recognize that the level of scrutiny they give to the affidavit can well be informed by what they read in the memo that their staff has provided for them. they cannot and should not just rely on that memo. >> back to your old experience on this. the short volume alone, is the staffing sufficient? >> there can always be more staffing. the volume has grown since i was in the criminal division 12 years ago. i understand why there may be

more need for more resources. regardless of whether the is a need for more resources, in our view, this is such a significant event that is being authorized that this deserves the highest priorities. >> let me skip to another point, what is your estimate of the total number of guns that were locked under both administrations? >> as we put in the report, rip testament was about 2000. -- rough estimate was about 2004 fast and furious. there were about 100 fire arms in each case that where interdicted by atf. >> analyzing what the agent said that they were punished like a moving violation when he testified before this committee, your best guess in

reviewing these applications of the number of guns that are transported through straw purchases? >> i am sorry, the number of guns -- >> that go to mexico due to strong purchases. what we did a report a couple of years ago that outline the significant flow of a firearm trafficking. there is a substantial flow -- >> your guess in numbers annually? thousands and thousands? >> as i sit here, i do not have that. >> this is a tragedy. the concern is as the chairman said earlier, to keep guns out of the hands of dangerous criminals. this issue will not stop today because straw purchases are happening today. as the agent who testified before this committee said, there are not punished any more than doing 65 in a 50. i know because of your hard work

to appreciate this. you cannot be lost that the fact is, we have not solve this problem when thousands are still taking place. >> there is a need to take serious action to address this problem. >> thank you. >> i thank the gentleman. i only ask you to maybe corrector statement about when they use the word interdicted, at the you mean recovered or interdicted? >> i am limiting to that two atf interdiction. 100 out of 2000 -- >> were recovered? >> 100 interdicted or stop by atf. many additional recovered at crime scenes or other locations. but only 100 total of the 2000.

but i think the gentleman's . was very good. they lost control but regained control. in some instances, that is the case. it is hard to generalize there were events on how they got them. some i cannot even talk about because they are still under -- >> this committee has spent a enormous amount of time on try to find out what gun walking is. if you grab them before they lose your control, we generally believe that is not been walking. if you deliberately allowed it to leave your control, that is gun walking. >> the definition we operated under is, you have an opportunity to interdict and a legal basis to do so. >> a great standard. we now the to the former chairman of the full committee. >> thank you, mr. chairman.

on page 455 of your report, you referred to brewr failing to report the gun walking to the deputy attorney general. you say "we believe roy should have informed the attorney general about the matter avenger april 2010 and he fell to do so. -- in 2010 and heat failed to do so." on june 5 the committee also knows full well that the assistant attorney general did not review the wiretap application of the fast and furious. that did not stop the committee from falsely asserting member was responsible for authorizing that. the last part of my question is, i understand that there is a -- media matters.

an e-mail was sent to them about how somebody ought to be investigated or get a little pressure put on them. are you familiar with any of that? >> i have read the reports, but i have not looked at it beyond that. >> that was not involved at all? the reason i ask, if this kind of an e-mail was sent, or any other e-mails sent to media matters about the chairman or members of the committee conducting the investigation? she was pretty vocal when she said on jan 5, the committee also knows full well that assistant attorney general brewer did not review the wiretap applications. she went on to say, that did not stop the committee from falsely asserting brewer was responsible for authorizing them.

if this example of go into media matters about this is a way that they normally do things over there in the public-relations department, i was concerned aware going to do this to members of the committee working hard on the investigation. you have no knowledge of that. >> i do not have knowledge about public affairs and interaction other than what i have read in the past few days about it. >> thank you very much. >> speaking of retaliation against the administration or the attorney general's, if the federal funds are used a in order to dissuade members of congress or members of the judiciary branch, that would be a violation of law, would it not? you are not allowed to use federal funds to attack your

political opponents. >> to that extent, i would like to talk to you about the whistle-blowers. as you said in your opening statement, you call them courageous. your report does not spend much time discussing whistle-blowers who exposed fast and furious, although you do mention it. have you been able to determine whether the whistle-blowers have been dealt with fairly and protected under the whistle- blowers' act? >> that is a matter we are still finalizing and reviewing. i agree, the efforts of the agents to come forward and acknowledges what was not public -- having done law- enforcement cases, it takes a lot of courage to come forward if you are in a law enforcement agency and explain what the law

enforcement agency has done wrong. >> do you feel you have indicate -- vindicated whistle-blowers. they were accused of false allegations, etc.. would you say at the end of the a best addition, those 471 pages as cent as it is, does a good job of vindicating their concerns they raised publicly? >> it does from my standpoint. there were a lot of people who came forward. the people who came forward, the agents who said funds were being locked, they could have had an application in agent terry's death, i think it is pretty clear that is what happened here. >> notwithstanding the fact that brian terry had to be gunned

down for them to come forward, was this not an example of exactly why whistleblowers are to be protected and white whistle-blowers' should be encouraged to come forward sooner rather than -- and why whistle-blowers' should be encouraged to come forward sooner rather than a later. >> i agree. this is an example of the importance of employees in all parts of the government -- in this case law-enforcement -- to come forward if they have information and be comfortable doing that. that is one of the reasons i put in place a whistle-blower position and my office. people need to be comfortable to come forward talking. we need to do a good job following up on their concerns. >> i went to thank you for the fact more whistle-blowers -- we

often get noted when whistle- blowers' come to us. most of the cases we see come through your offices within the agency. with that i would note one of the you see is on the floor today it will be a whistle- blower reform. this could not be a better time to remind members of congress that we depend on whistle- blowers and we need to protect them. i am pleased to go to the gentleman from illinois. >> thank you very much. thank you mr. inspector general. i want to thank you for your very informative and clarifying information. i think what you have delineated and gives the average citizen a great deal of confidence that what they are

here and is what is actually happening. i know that the head of the criminal division as the department of justice has been criticized by some members of congress for what they consider to be his actions here, he has called for his resignation. the chairman of this committee has said mr. brewer "clearly had a couple ability." he even said he started this up in 2009. i want to ask you a few questions to see if we cannot really clarify and understand in thesebrewer's role two programs was. did you find that the assistant attorney general authorized or directed gun walking the in

either operation fast and furious or wide receiver? >> we did not. >> did you find mr. brewer wiretapping either operation? >> that it was the assistant attorney general who authorized the applications. >> did you find any evidence that mr. brewer was a weird gun walking occurred a in operation fast and furious before the information became public? >> prior to the center's letter, we did not find information's he was aware of been walking. it was only wide receiver we was aware of that. >> mr. brewer did learn about the gun walking tactics used during the bush administration

and venture operation wide receiver, but only after the operation had been completed. -- in only after the operation had been completed. >> we were told by mr. brewer and mr. wine scene and perhaps others that we interviewed -- wine scene and perhaps others that we interviewed there would be a meeting with atf and at the meeting they would be told the gun walking tactics were unacceptable. we found there was no admonishing at the meeting. mr. brewer was not at the meeting. >> what additional steps were there? do -- what additional steps should mr. brewer had taken when

he learned about gun walking a in operation wide receiver? >> one thing we saw out to do was address the fact that we found that not go beyond that. we found out he knew it out wide receiver in the 2010. he did not have direct authority. it was the deputy attorney general and the attorney general who had authority. he should have told two people who could have taken action to stop or to correct what was happening. >> mr. brewer testified publicly before congress has acknowledged and apologized for his oversight and explained he regretted the fact he did not raise concerns about operation wide receiver with other senior leaders at the department of justice. chairman i. sawyer has alleged

mr. brewer was actively abdicating gun walking the to the mexican government. senior officials from the mexican government in 2011 that stated that mr. brewer controlled deliveries. here is what the note said. "mr. moore suggested allowing straw purchases to cross into mexico said the mexican federal police force can a arrest the mexican attorney general -- the mexican attorney general's office, it may send a strong message to armed traffickers. in your report you draw a stark distinction. >> i would like to ask for another minute. >> thank you.

you draw a sharp distinction between gun walking and control deliveries. do you consider advocating for cooperation with mexico to be the same as advocating for gun walking? >> we found as noted a denture our report back control deliveries are different than gun walking. -- in our report to that control the deliveries are different than handgun walking. >> is it not true that wide receiver as an intent stated was a controlled delivery? the actual gun walking that occurred was when agents abandoned their watch of the weapons for any number of reasons, including they were tired, they went home. the actual program that the assistant attorney general was advocating reads right on what

was wide receiver? their first was a failure to interdict, then there was the effort of control deliveries. then there was the failure again. the control deliveries as i understand it is that mr. brewer had talked about was an effort to do coronated interdiction with mexican authorities. that was stopped by the deputy attorney general a few weeks later. >> if you succeeded and they had gone to do it, they would be repeating a history of something that had failed. >> they clearly failed in wide receiver. i guess with all things, the devil is in the details as to how the plan of action would be. i am hesitant to speculate as to what the outcome would be. that is the idea.

>> i t why for yielding. -- i thank you for yielding. >> the gentleman is recognized. >> good morning and thank you for being here. i thank you for your report. i think is so very thorough. this morning and yesterday we heard a lot of media reports about how this is a vindication for mr. holder. you have already said you are not going to go there. you will let the reports before itself. i find it fascinating that the on the way some people are saying this is a vindication is by creating a straw man

argument. when this committee was investigating -- what this committee was investigating was whether mr. holder participated in fast and furious from the beginning. that is a straw man argument. we did not know because he came to congress on several occasions and he med lead that -- misled congress. the fax in your report show he on several occasions did not tell the truth to congress. s show he did not tell the truth to congress. memos, posts or either misleading or false. >> we did not look at that as part of our review. i am not in a position to speak to the representations to congress. >> in the memos, the letters

that you have -- he stated on may 3, he did not look at the statements but he didn't give the two memo's to congress for his office. they had to be retracted. >> i am not aware of that. we did not question the department about what they did or did not provide to congress. >> would the gentleman yield for a second. yesterday in the briefing we were talking about the may 2 i believe. those you do have an opinion on. >> yes, i am sorry. the reference to memo i was confused. >> we will call them letters. ifs you are aware of the two collectors.

-- two collectors. -- two letters there is an argument that it is literally true that that is what troubled us. he wrote in your report that trouble you. i do not know if you used the word misleading, but it could mislead. let me ask you a simple question. tell me how many people do you have on your staff working on this report? >> i do not know the number precisely because so many people had worked on it. i am guessing north of 20. >> how many man hours were spent on this report? >> i was not here for the first 18 months. i cannot tell you. the last five or six months, there were a lot of man hours. >> as we had just heard, your report is so long it might

encourage some people not to read it. do you think your time spent on this report, your time spent investigating it would have been necessary had the department of justice provided this congress the same information they provided to you in your investigation? >> that would be hard to speculate on. regardless of what had happened a long the way, i think the facts of fast and furious and wide receiver was important to bring out issues the agents brought forward very significant if permission before the letter writing occurred and that you referenced. we would have spent a lot of time on it. >> in your investigation the city were deputy to the attorney general before. you are always asking the

question, what does somebody know about an investigation? all we were trying to get to was the bottom line of what the attorney general knew, what his department knew. we spent countless hours here trying to figure that out. in your report you said he should have done a better job. i find it fascinating people are trying to exonerate anybody when clearly there has been blissful ignorance, there has been blissful avoidance of the truth. i think it is time for us to get to the bottom line of what has happened here. i thank you for your report and your time. i thank you for doing the job we ask you to do. >> we now go to the gentleman from arizona. >> thank you for allowing me to sit in on the hearing. i also want to thank you for coming to arizona this week when

we gathered to have a border patrol station for brian. he made the ultimate sacrifice for this country. your presence there gave the family a sense the congress was concerned and was trying to do their best to find answers to the questions they had. i have talked with the family. when i met with them this week they had one question. they asked that we make sure they get the information they have been waiting for that has been on their minds and in their hearts for 21 months. for me it is our riches that have not gotten answers sooner. they want to know what happened to brian. why were guns allowed to go into mexico with the full knowledge of personnel and the federal government and they are ultimately ending up at the

scene of the murder in arizona. they wanted to know who made the decision to launch fast and furious. they want to know who should be held accountable for the decisions and what consequences there will face. i want to thank you enter staff for what is a tremendous amount of work a denture preparing this report. in my view it has tremendous credibility and objective a tea. -- objective the tea. -- objectivity. i would like to address those in just a moment. agent terry made the ultimate sacrifice for his country. nothing we can do will bring him back. but he and his family deserve to know what was -- who was responsible.

ifs american weapons were allowed to fall into the hands of violent mexican criminals and drug cartel during fast and furious. it should never be the policy of this government to allow fire arms to be smuggled into mexico. it must never happen again. i have a question or two for you. you said steps had been taken already to prevent a reoccurrence. can he say specifically a couple steps that you believe will prevent a reoccurrence? >> the atf has instituted a variety of restrictions on when this type of activity can occur. that is first. second, there now has been put in place steps for supervisory

review that was not in place before. that is two atf has done. we suggested others with a more thorough review of policies such as requiring atf to abide by the undercover operations world of the attorney general has of place. >> the family believes and i agree with them they may have deliberately being kept in the dark about brian's death and the circumstances surrounding it. did your investigation revealed this was discussed within the department? why was it determined the family should not know more sooner? >> i do not recall us seeing evidence of discussions specifically what compelled the terry family.

i do not recall that being the basis of that was occurring, that was being discussed. >> one more question with the remaining time. we have heard there were internal disputes within the department of justice that allowed fast and furious to walk guns into mexico, specifically there was a dispute between the atf and the u.s. attorney's office. can you speak to what you found regarding this issue? >> that is an important issue we take on and address. there has been a question from agents while they could not seize or take action because the attorney general's office had a restrictive view of what they could and not do. that was a concern in other cases. what we found here is that that did not exist. from the outset both the u.s. attorney's office and the agents at atf decided they

wanted to get to the top of the organization. the way to do that was to take no action on the straw purchases. it was not a legal problem, and issued about the evidence. it was a tactical decision that was made by both entities. >> thank you for your testimony. >> with the gentleman yield for just a quick question. you have commented several times on this bottom up, the agents deciding to do it. was any part of it the arrogance and ambition, the "our job is limited to ago after guns. they ran up the chain of drugs and drug cartels by this ambition that they were going to roll up entities well outside of their basic jurisdiction.

was there any feeling by your people that this was the exuberance of ambition, i will get a big hit and move up and the director of the atf, or something like that? >> i think there was a concern about an example to go for a wiretap. that is thought of as a sophisticated technique. even though we found there was all of this evidence, by that. hundreds of guns, lots of cash from people who had no income. the question was, why not take action than, but instead focus on the wiretaps'? another concern -- nobody told us that was a reason. >> and nobody brags about that. >> as shocking as that might be. a way to keep of the case, e-

mails at the outset of this -- we have to keep the are an important piece of law enforcement with gun trafficking at the border. you cannot take that position if you want to be effective at the border in my estimation. >> i.t. why the gentleman. we now go to the gentleman from texas. -- i thank you these gentlemen. >> there are some questions i have in my office about whether this investigation is the fox guarding the henhouse. i think your report goes into great depth. there are some things that may lead to where we need to go further in this committee and investigating fast and furious. the supreme court has made very clear with respect to executive

privilege, there is not an unqualified presidential privilege. it requires material be limited to communications occurring before the policy adoption and deliberately reflecting the process by which policy alternatives are assessed at the highest level. the president has claimed executive privilege to a broad group of documents this committee has subpoenaed, some of you have looked at in your investigation. my first question is, roughly how many of these documents would be covered by executive privilege? >> we did not have to make a decision about what we thought was or was not an executive privilege. our decision was to ask for all the documents that we needed. we got them to put them into the report. >> you look at them. were there some and they're covered by executive privilege?

>> i do not know that. that was never our call. we never shared information about that. >> he noted that the white house refused to share and fast and furious. do you think the white house refusal to share these documents limited the scope of your investigation? what this committee be well served by preserving and devastation done that avenue? >> as we noted in the report, we did not get internal communications from the white house. mr. reilly's reluctance to speak to us made it impossible to pursue that angle of the case. >> it would be probably worthwhile for us to pursue? >> we have saw to pursue every lead we could. from our standpoint it was a lead we wanted to follow. >> thank you very much.

as mr. burton pointed out, the dot has been accused of cooperating with outside groups like media matters so they will come out a denture a positive manner. i imagine the press office is concerned about that. it troubles me there is such a political facet to what goes on in the doj. you would hope they would be most above politics. do you know if the doj shared this report prior to its release with any outside groups, or who within the doj might have made substantive changes to the report? >> we provide it for purposes of our comment and review. we allowed the department internally to share it with people who had relevant information but tightly

controlled who saw it, and it would not to be shared outside. >> media matters did not get this? >> they should not have, and it would have been a violation about the understanding we had about the review. >> i have been approached by commentators and constituents alike. political motives behind allowing something like fast and furious to continue. some have claimed there may have been a desire at some levels to create a public outcry for stricter gun laws. with your investigation be able to uncover political motives for allowing the operation to continue question is the entire fiasco a result of gross mismanagement? >> we did bucket that to see if we had documents or other evidence on that point. we did not go in there looking

for the month of specifically, but we thought it was an important to address it. we do highlight where there is talk about changing rules, regulations, or loss. we found all came after the investigation had begun. maybe this is a good example to show why we need to change the laws. >> did you find evidence that at any. the process was in effect this was happening? >> there was -- it was a good example to show why they might need to be changed. >> my time has expired. >> to characterize, there were opportunistic after the fact they found no evidence of before the fact they did operation fast and furious in order to get aws changed?

>> we did not see that at the outset. the documents we saw indicated the motion was, let's not take action to get to the top assembly because they want to get to the top. >> is fast and furious, but 2000 weapons being allowed to walk and leading to the death of brian terry, is that a good poster child for why you need tighter rules on and gun dealers since they were coerced into participating in this rather than listening to them when they said this guy is a straw buyer and arresting him? >> we found in terms of our law enforcement technique or law enforcement tactics, the decision making, was justified in what was going on failed. the primary function of law enforcement is to protect the public. >> we now go to that splendid individual from the great state of missouri for his questions

and probing. >> thank you. i am so glad to be back after the august break. i think we can all agree that gun walking weather during operation wide receiver or operation fast and furious was an incredibly reckless tactic that cut both american and mexican lives at risk. the attorney general testified before this committee that the department had removed, reassigned, or accepted the resignation of a number of people within atf and the u.s. attorney's office in phoenix that had operation on oversight of operation fast and furious including the acting atf director and the u.s. attorney.

it is my understanding that atf has been under new leadership since august of last year when the attorney general announced a former military prosecutor for the district of minnesota to serve as acting director of atf. is that correct? >> that is my understanding. >> the attorney general also stated that he was waiting for the release of your final report to make final determinations a bout for their personnel actions. is that consistent with prior practice for a agency leadership to reserve certain personnel actions regarding individuals under investigation for alleged misconduct until there is an inspector general report? >> since i am only five months into the job, i cannot speak to

the experience. >> you are not clear on the history? >> i do not know what those prior in my office -- what approaches might have been taken if any. >> your report not only makes policy recommendations for the department of justice, but also "the performance of each of the department employees who were most of of an operation wide receiver and operation fast and furious. several media outlets reported you recommended individuals were disciplined by the attorney general. did your office make any special -- specific personnel recommendations and light of operation wide receiver and fast and furious? >> recently reported on the facts of what we found and where we thought there were failures or other issues, but not made specific recommendations as to

what should or should that happen. >> is that common practice to not make recommendations on personnel? >> being fairly new to in the job, my understanding is that on occasions there may be instances where we have in the past. i do not know if i can speak to the history of that. >> mr. the the attorney general announced that the former acting atf director -- yesterday the attorney general announced of the former acting atf director -- he also stated that there may be more personnel action pour career employees and 80 f and the u.s. attorney office. for privacy act reasons he cannot disclose them at this time. he stated, those individuals with an atf and the u.s. attorney's office with the district of arizona home theoig

report found to be responsible for designing, implementing, or supervising operation fast and furious have been referred to the appropriate entity for review and consideration of potential personnel actions consistent with the requirements of the privacy act the department is prohibited from revealing additional information about the referrals at this time. mr. chairman, looking at how this has all developed, it gives me pause and makes me wonder, did this committee should from the hip? did we move too soon? that is food for thought. >> will the gentleman yield? >> will you and the rest of the committee who voted so recklessly when it was time to

take action against our attorney general. i yield. >> i might note that content was narrow. it was for the attorney general's refusal to give us the very documents that the ag required to do this report. i would suggest the opposite. content was most appropriate in retrospect when the very documents in this report were denied us. >> this report seems very thorough. what is it, about 1400 pages? it seems like oig got all of the information -- >> we previously noted it is the minimum possible pages. >> i thank the gentleman.

we will agree to continue to disagree on this. i wish you had been here earlier when he was explaining he did need -- did get the documents he needed. he felt we should have gotten them to. >> better late than never. >>mr. weinstein should have resigned one year and a half i respect the gentleman's desire to disagree. thank you. now we go to a gentleman with whom i am more likely to agree at the moment -- the distinguished gentleman from oklahoma. >> it would have been nice to have all these documents when we ask for them a long time ago. a lot of people have asked the same questions and wanted some answers. thank you for your work. thank you for pulling the together. i look forward to our committee continuing to work to finish our

report as well and have access to the same documents. let's get to the issue of fixing it. when the attorney general was here, he and i had a conversation about how we resolve this. the issue gunwalking of putting out a issue of any kind -- the issue of putting out that gunwalking of any kind is forbidden. things like the supervision of the process of investigation is very different for the fbi then it is for the atf. my basic question is why -- why does atf have one process of investigation and the fbi has a very different one? the scope of the task that you mentioned in your report with atf, there is a regulatory function and the criminal function that overlap at times. there were obvious issues that happened. i will allow you to make a comment on one of those. i have one more issue as well

-- the size of the agency and what they were trying to accomplish. as i read 3 report, page 338 there was an interesting comment that alluded to the fact that the atf was over their head. they had too few people, trying to take on this massive task. it looked like they were trying to accomplish something big but did not have the right people. this group of atf agents were in way over their head and should not have been engaged in this. i have one more issue i want to visit on -- i will talk a little bit about the issue. regulatory vs criminal responsibility, and the task given to atf. do you have recommendations on that based on your investigation? >> we do. upon each of the issues you identified -- they are each very important, there are reforms that need to happen. ur largertment has fo law enforcement agencies under it. they should have consistency

among their rules and requirements. of course they can have a different missions. that needs to happen. the fact that atf was not run on attorney general guidelines for undercover operations eight years into their tenure in the department, i think, was significant from our standpoint. so we have recommended in our second recommendation for the department to go back and review the other components. look at who has the best practices. you have an organization, multiple law enforcement agencies. there needs to be some effort to look at the best practices and figure out who has got -- it is atf, other components should use them. it is fbi, other components should use them. >> to make their tasks more specific and clear and have clear parameters of supervision as you are doing the other

departments. >> there should be -- for banderoles if one is better than the other. >> if one is redundant, let's make it clear. this seems to be in your report a bunker mentality. as soon as the letterheads, there is a shutdown, a, let's try to limit this process. nobody is -- they're trying to dial it down. when the letter makes the rounds, is, let it sit out there so that we do not start to get into details. the stunning one was not just the february letter of 2011 -- is the may letter and the june 15 testimony to this committee. it was apparent by that point that they either knew or should have known at that point, senior leadership, that what they're writing and testifying to congress was not the whole

truth. it was a limited form that, interpreted the right way, might stand up under light, but in retrospect was not clear. that is a treatment to congress and those investigating that we will close in and surround ourselves with the wagons and not let anybody in. did you get that sense at all? >> when we looked at that may 2 letter, we reached the conclusion that by that point there was enough to information that they could not stand by that. >> they were riding in such a way to make it look like they were san one thing when they were really saying something different. >> from my standpoint, the letter does appear to be literally true. the committee itself indicated that in a report. our concern was knowing the information they knew after four letters between every four and may 2, the department made no substitute -- substantive comments.

at that point the appropriate response was to eggnogs the information they had found. >> whe senior leader -- acknowledge the information they found. >> when senior leadership did not inform when brian terry was murdered -- it seems that they are surrounded in, closing the information down rather than letting it get out. it seems to be from the very beginning that they shut down information. >> there were many points in this case at all levels where information flow not only was not what it should have been, but in some instances it was inaccurate, even when information was flowing. >> thank you. >> i thank the gentleman. let me make sure ago correctly here -- we now go to the gentleman from pennsylvania, mr. kelly. >> thank you. i think -- attorneys talk to

each other, it makes sense to them, but the people in the regular world cannot begin to understand what it is that we are talking about. in my world, and the answer but a yes is a note. if it takes a long time to you have done this for a long time. i know you have only done this for five months -- how long does it take to do an investigation? is this one of such a magnitude that we could not come to a conclusion quicker than this? >> i will tell you that my understanding is that the investigation -- a u.s. attorney investigation was a two year investigation. given the volume of documents we had, more than 100,000, and the scope wanted to undertake, to take through the rest -- congressional responses, it took a lot of time to do that. i think that importantly for us this report had to be thorough but had to be fair and accurate.

i can tell you from the five months i was there working on this -- it was an extraordinary amount of documents. we wanted to make sure. this is the commitment i made -- i wanted this report to lay out all the facts. >> i speak for myself and for the committee -- 18 months to a waiting, being stonewalled time after time, requesting information, getting documents delivered in pickup trucks by the thousands with most of the pages redacted -- this does not happen. there is something wrong here that we are not getting too. i listen to this --lanny brw officials, they will not receive any disciplinary action. is that a disappointment to you? >> the way the operations are set up and the law is set up, we investigate and then hand over

our findings to the department. it is for the department had. >> in this case the department had to be whom? >> the attorney general. >then it is up to the public and congress to decide -- >> there is a perception in many cases that is reality. when you watch, did this not on wind? as the chairman continues to ask questions that were stonewalled, you begin to get the feeling that while we keep saying this is not political in nature, i find very few things in this town that are not political in nature. this will be the most clear and transparent administration we have ever had -- but when you ask questions, you cannot get the answers. when you have the attorney general to come here and he cannot answer questions. when you look at what is going on -- i think the american public deserves better than this. we have the responsibility to find out for them. at some point, the buck has to stop somewhere.

the attorney general's appointed by the president of the united states. but all the different agencies, when there is a turnover in ministrations, a whole group of people come in with them. if i'm taking a company, i bring in all the managers i want. there may be some people still working in the same department, but there is a way we do things differently. the law may have changed, but the policy, the libyan forces, changes according to the philosophy or methods of administration. i look at this -- james talked about. we all talked about it. why so long? why so hard to get information that should be very basic? when we ask questions that require a yes or no -- a simple yes would have been fine, but the trekking out -- dragging out. is there any wonder the american people have lost faith in the we do stuff? i watch it, i look at all the

things that happen, whoever it is, if i am whistleblower, i think, i will probably never do that again. these people are being brought forward, thanks for what you did -- they get thrown under a bus. we understand that is part of the process. we have to make sure the people who talked a protected. they are very vulnerable. as a person working in those departments, i would be very aware. are you disappointed that it looked more political? >> i had that concern precisely, congressman. there needs to be an assurance the people who want to come forward come forward and do not feel they will be retaliated against, demoted, action taken against them -- what ever it is. this case is an example of the importance of people willing to step forward. one of my first -- agent terry's

family and the people who worked with him were here. they came here with complete disregard to their future. they knew that there should not have happened to brian terry and wanted to get to the bottom of it. for 18 months -- things that have been distorted and manipulated did not need to be done. that is an indication that we really mean what we say -- and some to mean, we have to do it. we cannot to say words to play people. >> i thank the gentleman. mr. horowitz, you have called for your report the unsealing of portions of the wiretaps that you used from for your report. i would like to also ask you to take possession of letters exchanges in which this committee has a difference of opinion, but concludes that wiretap affidavits describes

significant incidents is that would suggest prosecutor focusing on tactics at the atf, that would have recognized there was a attempt to interject weapons from straw buyers, particularly in cases where straw buyers who already did it were allowed to continue doing it, including the weapon sales that ultimately led to brian terry's death. i would ask to to unseal the letters in hopes that you would expand your request for the justice department to unseal portions that may be also covered by portions of those letters. >> i have been given the letters. >> i thank the gentleman. >> with that we go to mr. wallenberg, who represents my almaguer. i may have recognized -- all not

mater. i may be recognizing the last, but certainly not least. >> i represent a district in the great state of michigan which is proud of its favorite son, a homegrown sound, brian terry. we take that as important. also i appreciate very much, mr. horowitz, that you are working, extensive work, a valuable -- rep langford touched on the letter. your response to that, that you were very troubled with the response as well. do you believe that your office had complete an unfettered access to the documents required to insure a thorough review? >> i do. we asked for everything we thought was responsive. we ultimately got everything we asked for. >> everything that was

necessary? >> including, as noted in the report, we asked for some personal e-mail's, given the fact that some of it was transferred to personal e-mail accounts. >> again, i would reiterate, that is all we were asking for on this committee as well, the same document so we could have done this review. i think it would have ultimately brought about substantiating what you were able to bring. as i understand it, you personally reviewed the fast and furious wiretap application speak to that is correct. >> the former atf director said that after he read the wiretaps he was sick to his stomach. did you have a similar reaction? >> after i read them, i came to the conclusion that there was in my view more than enough red flags to identify serious questions about the tactics in use. in relation to that, your

report -- the report recommends that the department should "recommend that high-level officials responsible for authorizing the wiretap applications conduct reviews that are sufficient to enable those officials to form a judgment that the applications meet statutory criteria." that is on page 431. as the department given you any feedback on this recommendation, or indicated they will implement? >> in their letter to us, they said they agree with all our recommendations. one thing we ask is to report back in 90 days and the status of the response to our recommendations. they have indicated they are supportive of the recommendations. now we will follow up in 90 days. theo you know whather attorney general brewer agrees

with this recommendation? >> the letters on behalf of the department as a whole. >> so we assume attorney general holder agrees? >> that is my understanding. >> i appreciate that. we will wait to see. thank you. >> i am not real smart, but smart up to let him go if he had a question. >> i want to make sure i had yielded backed. >> i thank you, the gentleman from michigan. i hate to inject facts into questions members of congress act, but the record will reflect -- i know you already know this -- the attorney general -- was never held in contempt of congress because of actions in fast and furious. he was held in contempt because he felt to hand over documents, documents which he turned over to you, some of which he is

beginning to turn over to us, 300 pages of which we got yesterday. i hate to make the record clear, but he was never held in contempt of congress because he sanctioned gunwalking. he was held in contempt of congress because he thwarted our attempts to find out what you found out. >secondly, he said the february 4 letter was reviewed by dozens of people, including people in the criminal division at the department of justice. do you know whether they read the february 4 letter before it was delivered? >> we found no evidence that he had reviewed it. he said he did not recall reviewing it. we found nothing in e-mail's indicating he had actually reviewed that are made a comment about the content of the letter. >> did he give you any indication as to why he put forward a draft of that to his

personal, private e-mail account? >> i would want to go back and look of the transcript. my general recollection is that for purposes of reading it, but he did not recall if he had read it after it had been sent out on february 4. >> you have been around the block -- white-collar cases. you have twice used the word recall. that is not the same as saying i did not read it. that is saying, i do not recall reading there is a difference, is there not? >> there is. >> again, as -- and stumped as to what reason you would forward the letter to your personal e- mail account if you are not a archivist, not teaching grammar to the person writing the letter -- what other explanation is there for forwarding it, other than to read it? >> that would, you would assume, be the reason to do it. >> my time is up. i thank the gentleman from

michigan for his time. >> just to make the record clear, you said that he did not comment, but isn't the response, a good job, a comment? was that, before, during, or after the comment came out? >> that came on february 2 while the letter was still in draft form. from our standpoint, it did not indicate an understanding of a contact. if we did not use the precise word in the report that we should have, i understand that. >> i am concerned only because the attorney general's office lied to congress. he said, good job, to a draft that had the lie in it. yet he is able to say he did not remember reading it. you are a former prosecutor, may be one again sunday.

the u.s. except you are able to respond as he did, for it to personal e-mail, about 10 months to go on. as a attorney and officer of the court, you are able to do all that, and yet say, i would have known it was a lie if i had read, but i did not read it? would you accept that as a prosecutor, or would you go forward and that the jury decide? >> in doing this review our standard was whether we could draw a decision or a judgment based on the evidence we had. we decided we needed to put out the facts of what we found. others can draw conclusions. we did not feel we could draw that conclusion. >> but you did reach a conclusion that he knew or should have known t-- he was in the group that was at least somewhat derelict in the letter going out that he commented on and then said he did not run reading at -- it.

we had insisted we had been lied to, that there was gunwalking, and whistle-blowers were telling the truth. they were being retaliated against by the attorney general's representatives. >> what we found is that, regardless of whether he read the letter or not, given what he said about wide receiver, his responsibility should have been to come aboard and explain what happened in wide receiver. it would have made a difference. it did not really matter whether he read the letter. >> thank you. about theme, i aske house government oversight and reform, doj items be placed in the record. these items regard atf gunrunning between dennis burke

and a number of people, including lanny brewer. 004449, dated 2, 2, 2011, in which he placed into his personal e-mail the address being redacted, the revised grassley letter. in which there are a number of comments we have already alluded to. with that, we recognize the gentle lady from florida, ms. adams. >> thank you for allowing me to join the committee. mr. horowitz, i have sat here, and as you know, i come from a

law enforcement background. i am very concerned about that we had an operation that appeared to have had no true oversight from anybody on an upper level. when an exit strategy was suggested in march 2010, nothing happened, i have a few questions as to what happened to this agency. i think any to go back to maybe even before, because, as i worked with this agency years ago in law enforcement, they had these oversight protections. you could not get a wiretap without going and getting someone from above to review it and approve it and have it taken to a judge to be signed. do you happen to know when they decided to do away with that practice? >> i can provide you with the answer -- i do not recall as i sit here, but there was a change in practice at atf that remove the requirement.

>> that would be nice to know, when they decided to remove those practices. apparently the supervisors that should have been reviewing it did not review it or claimed to have not reviewed it. therefore, we have the loss of life of one of our own borders patrol agents and many weapons across the border, people are being harmed every day. secondly, on page 265 , the statement about mr. hoover, he said he did not recall sending the briefing on march 5 or the briefing on march 11, although his outlook calendar indicates he was invited to the meeting and, as mentioned earlier, other witnesses placed in that both of those briefings. i've heard many of your comments about, people could not recall, people could not recall. as an attorney, somebody who has prosecuted cases, when somebody tells you you can at -- they

cannot recall, what is your first impression as an attorney? >> it depends on the context. >> if the context is something like this -- >> when you have outlook invites and somebody else recall in your there, it probably means you were there. >> so in the case of mr. breuer, which he had this e-mail forwarded from himself to himself at a private account and sends back, a good job, as an attorney, if this had been a case you were investigating as an attorney and prosecuting, what would your impression be? >do you believe he would have sent it to read it? >> the only thing that causes me hesitation there is that when you go through the e-mail strength you do have mr. weinstein, when he sends the draft at the bottom of that, mr. breuer is not one of the people to whom he cents. there's a tendency at times, i am not trying to judge him, but there can be a tendency when

somebody sends you an e-mail reporting on your good work, to sit back, a good job or something like that. one of the things i want to be careful of is to make sure that everything was well founded and that we had something to support it. to put out the evidence and the people their own -- rather and use in conclusions -- respect the varying views i have heard. >> your friendship with mr. breuer would not impact your decision, would it not? >> it had zero impact when i took the oath to take this office. i took an oath to do this job. as i committed before a senate judiciary committee, the only thing that was going to make my decision were the facts and law. >> i appreciate the fact that you were asking for personal demons. i did ask a question to the committee. i know that my colleague would like to ask another question.

if i may, i would yield the rest of my time. >> thank you. mr. horowitz, i want to ask you this. ionia 30 seconds, so the quickest one that i have -- in your investigation, is still ongoing? >> there are pieces of this investigation that are ongoing, as we have reflected before. >> i will not ask you anything more beyond that. contrary to the assertions of my colleagues, many of us have never asserted that the attorney general -- we have asserted that he should have, and any managing style you have reflects that. did you make city and recommendations to creating a culture in the department of justice where information like this -- did you make recommendations to creighton

culture in the department of justice for information that this would move up the command chain? >> i wanted to make sure there is an understanding and a willingness for people to come aboard and get that information for. that is one of the tasks i want to undertake, to look at that cultural issue. i do think it is important. >> thank you. my time is up, mr. chairman. >> thank the gentleman. i will not take a short second round. we will not keep you much longer. one of the areas of particular owitz.st, mr. horwit one particular document that appeared in the report discusses e-mail's between jason when steen -- weinstein and william mcmahon. in may 2010 regarding the applications and a theroving wiretap -- a possible roving

wiretaps. these documents were explicitly asked for in our subpoenas, but the department never handed them over. do you think it is appropriate for the department to deliberately withhold these documents without setting any reason or privilege for doing so? i might note, claiming that they turned over extensive, unprecedented documents before february 4 -- would this be unprecedented, in your opinion? >> let me say, they were clearly to us highly relevant, and i frankly do not know where the decision making occurred in the department. i am not in a position to answer precisely that question without -- >> i will rephrase -- this document was relevant to important to your investigation, correct? >> correct. >> when the attorney general has repeatedly said he made

unprecedented levels of documents available to us, he was throw and complete, came before congress and many times before february 4, then omitted something which was clearly relevant and important to the investigation? >> as i said, i think these documents were highly relevant and important to us, which is what we spend so much time discussing them. >> as a former prosecutor, if you deliver a subpoena and somebody simply does not mention a document, does not turn it over, and it is relevant, and yet they assert they have fully complied, is that not a violation of the law, cannot turn something over the you know you have? >> without understanding of the facts -- >> about the hypothetical, as a prosecutor -- the service subpoena, you either get it or the lawyers for the other side have an obligation to assert a privilege, do all these things. you do not simply not deliver it. >> that would certainly be the expectation.

>> are you considering or pursuing or investigating criminal referrals related to whistleblower retaliation? >> let me say, we are actively investigating a variety of the whistleblower issues, some of which the committee has referred to us. i would be hesitant to say what we are going to do, but i think you'll find reports coming in the not too distant future. we're taking them very seriously. >> thank you. i will go against sometimes the advice of all to say, do not link the constant allegations that wide receiver and fast and furious are two peas in a pot. i will ask you a question that is at the kernel of my concern. you discussed in your report extensively that a number of people, including people at justice, at the highest levels, were aware of wide receiver.

they knew it had failed, had been shut down, had u.s. attorney records, and yet they allowed fast and furious, whether through commission or omission, to do the same and more. correct? >> there was no action apparent to try and change any policies. i agree. >> said the justice department knew that guns were walking, by definition, at least in retrospect, and they did not take steps to stop it? people dead onof both sides of the border. are you not very concerned that these are the very elements that it takes for the federal government, our government, for converse's appropriated dollars, to be paid out in damages, whether to the hundreds of people dead and mexico or at least one u.s. border patrol agent dead in the u.s.? is this kind of failure not one

that exposes the federal government to huge potential damages? >> so many people understood and knew what happened in wide receiver and took no actions. frankly, fast and furious, so me to bornu about it as the investigations -- so many people knew about it as the investigations were put aside after the agents to import. so many people knew and nobody seemed to take action, even the deputy director when he noticed in the for an exit strategy. >> you interviewed lanny breuer. >>s. correct. >> after the february 4 letter, lanny breuer looked me dead in the eye and told me that there was nothing wrong with fast and furious. it was bad work on the ground. when you interviewed him, was that still is feeling, that there was nothing wrong with

fast and furious except the atf agents had bungled it? >> i do not recall his precise answer to the question. i am happy to go back and did that for the record. >> i will yield to the ranking member. this continues to be my reason that i have so much doubt about lanny breuer's judgment and his doubt about continuing to do his job. -- ability to continue to do his job. he believed after brian terry was debt. i have no idea how he could believe this and still have his job. >> thank you very much. mr. horowitz, i have a general concern myself. if you have been around here a few years, like a half, you get concerned about the effectiveness and efficiency. i started my discussion of thanking you and your staff for

all you have done, but the question is where does this lead? all those hours, all that effort? my mother, a former sharecropper, used to teach us -- she had a second grade education. she would tell us, you could have a motion, commotion, the motion, and no results. -- emotion, and no results. there are moments in life, even legislative life, where things come together and it presents a moment which is pregnant with the possibility of change. and if it does not change, if the change does not take place at that moment, things usually get worse. this is one of those moments. i give the chairman credit -- he

has brought all of this to light. we have a great picture. you all have painted the picture accurately for us. i do not think anybody up here likes what we see. to be frank with you, knowing eric holder the way i know him, i do not think he likes this picture. for all of us, reform is so very, very important. in that light -- if i want to be effective, i do not want to look back at my tenure in congress and say i was involved in one of those moments where we did nothing and it just got worse. where we did nothing and folks continued to be killed in mexico with guns flowing from the united states. we did nothing when neighborhoods like the one i live in, where it is easier to get a gun than a cigarette. where we did nothing.

i went to rescue the sticky questions. the department of justice has made significant changes to atf -- i want to ask you a few questions. the department of justice has made significant changes to make sure what happened in operation wide receiver never happens again. new leadership in atf is an important step to ensuring accountability. the director has also implemented several policy changes at atf to improve case supervision and communication between field agents and atf management. in november 2011, acting director jones issued a memo clarifying atf's policy regarding transfers, reinforcing the importance of agents to take all reasonable steps to prevent firearms being misused. your report describes this memo as explicitly stating that, "if law enforcement officials have any knowledge that guns are

about to cross the border, they must take immediate action to prevent that, even if it means jeopardize in an investigation." i ask you now, what do you think of this guidance? is it sufficient, or would additional guidance be helpful? >> i think it is an important piece of guidance, but i think more has to be done. i could not agree with you more, congressman, about the opportunity to effect change in light of these events. we put out records, consciously to sea change happen when it needs to. i did not come back to take this job to write a report and have nobody follow-through or listen to what we say and what we recommend, which is why our recommendations are bigger than just this case. for example, recommending to the department to create a regular inner-agency law- enforcement coordination effort. among its own law enforcement agents. as you see here, there was a

failure to coordinate among agencies, sharp elbows, a variety of things happened. i'm guessing, from what i understand, and will see when the report comes out from dhs, you'll see more of that. that has to go away. that is an issue we have to think about. >> i want to thank you all for your efforts. i know -- i can assure you that all of us up here want to make sure that your efforts have not been in vain. how much jurisdiction you have with regard to trying to make sure that the recommendations actually happened? we have some pressure up here, but what about you? you talk about the things you want to follow up on -- how you see that playing out? >> what we do, as we have outlined, we ask the apartment -- department and the attorney general to report back in 90

days on the status of efforts and with a time line for implementing them. as we know, if there is not a time line in place, things drag. our goal is to follow up and make sure things happen. as an ig, our strength is in a report like this and following up on it. if recommendations are not followed, whether -- to report back, whether it is to congress or the attorney general or others. >> i hope that both sides will agree to bring back the program parties. he said 90 days -- maybe in four months so that we can actually have that accountability we are talking about. we cannot have this effectiveness now. >> i agree with the gentleman. i would hope mr. horowitz can keep his calendar open for mid january.

i ask unanimous consent that all members have seven days to observe written statements and extraneous matter in the record. without objection, so ordered. mr. gowdy -- you get the last word. >> thank you. i want to have a little potpurri. i will bounce around -- it is not designed to fool you, although i do not think i could if that were my design. do you know when the mexican government was informed that fast and furious, or if they have been the briefed on it? i could imagine it would impact our relationship with law enforcement in mexico. >> i do not know when they were debriefed. i do not know the extent to which they were debriefed about it. there were indications in e- mail's we saw about the possibility of a leading mexican -- alerting the mexican government, but i do not know. >> there have been discussions about changes. mr. cummings was extremely

elegant talking about the desire not to see this moment pass. we want to see this moment used for purposes that are -- did you ever prosecuted 924c kasich? >> yes, although not frequently. >> the crime, for using a gun illegally for a crime, is five years for each consecutive sentence. each is a consecutive five years. depending on the nature of the weapon, a semi-automatic, you could be up to 20 years. by virtue of the fact i went to law school, i'm not good in math, but 5 years times 1000 weapons strikes me that unless our name is mathusala that will be a very long sentence. i would ask you to look into whether or not asking for upper departures -- the remedy is not

always to raise the statutory actions -- maximum when you were never coming close to the set prime maximum in the first place. thirdly, i want to conclude a more harmonious note -- your job is to identify facts, and you draw some conclusions. almost all the conclusions i agreed with. i am not suggesting we disagree on this. i have a different analysis with respect to the criminal division chief. i think it is without question that he knew the tactic of gunwalking exist in the department, whether he wants to say wide receiver or fast and furious. he knew the fabric for letter was false. -- february 4 letter was false. i appreciate that there could be explanations other than reading a letter that you would forward a letter to your personal e-mail accounts, and i appreciate the fact that from time to time we do not read e-mail's in full, we

just a good job or thanks for sending it. i just have a higher expectation for that department and the criminal chief. i think it is wonderful we have some of your independence. i am going to conclude by saying, you have an incredibly hard, important job. you were exceedingly candid in our personal conversations. you have been exceedingly professional in your public testimony. i wish you and the people who worked with you all the best. on this weekend agree -- the department of justice is not a political entity. if we lose confidence in that plan for a woman holding a set of skills and a sword, we are finished. -- set of scales and a sword, we are finished. this is a very politically charged environment that we work

in and you work and. the fact that your work has partisan support is -- is not controlled bipartisan support is a testament to you and your staff. >> i never thought we would get through your questions. you were good. i went to summarize a couple of things. obstructing congress is a crime. that is a statement. you do not have to evaluate that one. clearly, justice during this time obstructed congress. they made a untruthful statements, on every four. then a double down by having at a minimum an extremely deceiving statement. as i have said, the only way it is truthful they did not let guns walked is if they did not physically have legs and feet and shoes. they in multiple areas did not respond honestly to a subpoena, leaving information out,

information they made available to you. of course, the separate content question of refusing afterwards -- in that case, i will accept that they were going to argue the question of presidential and executive privilege. what do you think we should do, and what can you do when agencies outright refuse to provide information pursuant to an investigation of crime? >> what i did, i walked into this job and was committed to doing, pressing forward and writing a report. putting it forward and letting, folks thought that was -- there was material to that, that was their responsibility. my job was to get it out there. congress and the american public could see what we saw, understand what we saw, the conclusions that we reach. that is my job as inspector

general. i am glad is out there. now, obviously, as to what occurred or did not occur in terms of other instances, the evidence compares to what we saw and found. >> were you looking into any potential criminal referrals in your authority related to the february 4 letter and those who either live or became aware, particularly as officers of the court, became aware and untruthful statements had been made and sought to make no effort to correct the record? >> let me touch on that on the february 4 letter. that is important. we tried to figure out what the intent was an state of mind. so much of that is driven by intent. the difficulty with that letter, as we outlined in the report, is it was such a disorganized and problematic process. you had people who did not know

information making substantive at its to a letter -- edits to a letter, along with people who did no information providing inaccurate information. sorting out how the letter ended up the way it did, sort and at one or two people for the particular information was the difficulty we had. it was a problematic process as we try to lay it out. you could not disentangle all the different pieces as to who offered what and how changes were made. that was the difficulty we had with the intent issue. >> do you have any closing remarks? i was listening to the question the chairman asked. on page 395 of the report, the inspector general's report said

senior department officials engaged in a effort to mislead congress -- they said that " information provided by officials was not accurate." i'm reading that from your report. >> that is correct. >> that goes to what you are saying? >> yes. >> ise. >> the problem was they were getting information that in some cases was inaccurate, in some cases was accurate, and people finally drafted the letter did not know the underlying factual scenario and were making changes they did not realize the key thing during much. .> >> thank you very much. >> in closing, this concludes a major chapter in fast and furious and the statements made to congress. as we turn the page, it is this committee's hope that we will in coming days sea level of cooperation that we have not yet seen.

i was encouraged to the 300 pages that the attorney general personally said he would give me were delivered without the subpoena being dropped. notwithstanding that, i hope that in the days to come most, if not all, of those 100,000 pages that were made available to mr. horowitz would be made available to this committee. or, perhaps better, a willingness by the attorney general to allow a side-by-side evaluation by our committee so that we could save the redundant time that you and your staff have used a great deal of attaining facts and figures -- obtaining facts and figures we have not seen. it would be that willingness to have our investigators see what you have seen that would allow this to come to a quicker clothes and perhaps eliminate the need for a protracted fight

in the courts. lastly, i look forward to the american people having an opportunity to read as much of the material as can be made unsealed as possible. i believe the american people and that terry family have an absolute right to have as much transparency as possible. particularly, when we look at the failures of safeguards of the fourth amendment right, in fact, all groups, groups who have nothing to do with fast and furious but have everything to do with civil liberties, are going to want to know how these failures occurred in detail and, like the ranking member said, in a non-partisan way, they will want to make sure there is change so this does not happen again. i might note that atf is not the only law enforcement agency that requests wiretaps. they are requested on a daily basis from many organizations.

through this organization, i have, as a non-lawyer, queen a better understanding that wiretaps are presented to judges normally as a nearly complete decision. judges rely on the honesty and integrity of the process at the justice department in order to authorize these. it does not mean they do not have the right to question or to reject, but for the most part you can quickly dispense with it based on this -- trust documents are complete. judges have often told me that there quarks look through a number of these and rely on the completeness of that. to me, that says the american people's constitutional protections are perhaps delegated to individuals who ultimately do not exist in statute as irresponsible parties. i think mr. horowitz's about his own experience when he was reading the wiretap request

tells us this has not always been so much a beneath me even though the statute requires the standard. for that reason, for those of us on these committees, i pledge to work with both those committees to see that the restrictive -- they restrict the statute in the future, not because of a terry family's suffering, but because the american people have the right to expect delimited and necessary invasion into people's privacy -- they must be both necessary and limited. in the case of fast and furious, it was not necessary. the understanding that these operations continued long after a wiretap was not the source of additional and permission was a lesson. lastly, i would be remiss if i did not thank mr. horowitz and your entire team, who have

worked tirelessly for perhaps more months than some people would like, including those of you working on it, so many months. i think the terry family is trying to deal with the striking down of their son, their brother, their cousin at the tender age of 40. in a way that he should not have been. this will bring partial closure. for that, i would like to thank you. i know the terry family would like to. with that, i thank mr. cummings for his efforts today and thank all the members who participated. mr. horowitz again, for those not sitting behind you come up for the many who worked so hard, please express our thanks for your bureau. with that, we stand adjourned on this and will immediately reconvene after you leave for a quick markup.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> on tomorrow morning's "washington journal," jim mcdermott on tax increases set to take effect next year. he will talk about his role offering scholarships to medical students in underserved areas. then, republican congressman joe orton takes -- joe barton takes your calls on the fast and furious operation. live with the day's outlines and your calls, every day at 7:00 a.m. eastern. >> now, consumer financial protector bureau of richard cordray gives his semiannual report to the house financial- services committee. this outline the activities from january until june. they advise consumer reporting companies -- that takes effect on some september 30. this is just over 2.5 hours. >> for the purpose of making an

opening statements -- without objection, all member written statements we made part of the record. the chairman will now recognize himself for the purpose of delivering an opening statement. today we welcome back to the committee richard cordray of the consumer financial protection bureau to present the second semi-annual report required by congress. these required hearings are one of the very limited forms of oversight by congress can exert over the cfpb. many of us have been frustrated by the lack of accountability in the cfpb's leadership structure, and the lack of transparency in the cfpb's funding structure. the absence of adequate checks and balances is especially troubling, given that neither congress nor the executive branch can fully review bureau spending. cfpb's request to draw millions

of dollars in the federal reserve often takes the form of nothing more than e-mails that lack any details as to how the money will be spent. all of us on both sides of the aisle support consumer protection. under your direction, the bureau has attempted to tackle a number of issues it perceives to be problematic for consumers. some may prove to be helpful, others may warn reconsideration. for instance, in the semi-annual report, the cfpb discusses at length of the consumer complaint that it has received. while i applaud the efforts to give americans a forum for reporting potential abuses, many question the decision to release on verify complaint added to the public. -- under verify complaint that it to the public rather than have consumers publicly disclose -- it could mislead

consumers. it is my hope the cfpb will take the steps necessary to ensure the data it releases to the public is accurate. cfpb's efforts to rewrite the rules governing the mortgage market are also a particular interest to many americans. these regulations are already very complex, and the cfpb must avoid adding to that complexity. for example, that cfpb cost long awaited proposed rules consolidating mortgage disclosure forms is more than 1000 pages long. the new disclosure forms required by the board at up to eight pages. it appears that the days of a one-page disclosure form are officially dead. as the cfpb goes forward in the rulemaking process, i encourage you and to consider how the complexity of this and other

mortgage-related roles burden consumers and small businesses. welcome back. i look forward, we all look forward to a discussion, a civil discussion that we will have today. thank you forat this time, i ree ranking member. >> frankly, i would like to say i am pleased to be here, but it is too late in my career to pretend. here we go again. we will listen again for a couple of hours from my republican colleagues said that we have no time for an oversight hearing. there are 26 prior occasions in which officials have testified

before congress. it has been very closely monitored. >> without objection. >> yes. the of the objection would be genuine on merit rather than independent consumer protection if i had ever heard them before about the other federal financial regulatory agencies which are exactly similarly situated. the control of the currency gets funding from fees. it does not get appropriations. it is independent of the treasury. it is appointed to a fixed term. we have a pattern of the currency lasting from one administration to the it -- to the other, across partisan lines. it is even more insulated than

the cpb. the federal reserve itself, which is self funding and doesn't give funding from appropriations, and when we had a vote to subject cfpb, the voters voted down. when people give a reason and then do not apply it -- i am not talking about taking it to an extreme, but applying it logically to similarly seated agencies, then it is not real. what we have for the first time, we have an independent consumer agency could if it was suggested to the regular appropriations process, we would know what would happen with this congressional linemen because we have seen it with the commodities futures trading commission. what we had in the beginning of

this century was largely unregulated derivatives trading that led directly to the crisis at aig and to problems elsewhere, it hurt prices for farmers and that is why our colleague in the agricultural committee was -- weaken further regulatory authority over derivatives on the commodities futures trading commission. and the response from my colleagues as to deprive it from the funds it needs to keep it so -- it needs good to keep so inadequately funded that derivatives can not be adequately regulated. there is no example of these kinds of objections ever made to other federal agencies to which it applies. one objection to the cfpb to be

independent, what my republican party is one to do is put the other bank regulators who have a historic record about not being very serious about consumer protection, putting the interest of the consumer banks well ahead of the consumer protection. i am also struck that there have been no substantive objections -- how much time to consume? 4. i will take another one minute. i yield myself another one minute. the lack of substantive objections is very important. those argue that there are too many pages. there are often pages because the entities being regulated come to the end -- come to the regulator and say provide for that exception. i think one of the good things we did was take to statutes dealing with realistic settlement that were given to

different agencies and put them together. so i think miss cory could be proud of the fact that we had substantive objections. i have not seen the objections to the salaries of the comptroller or the fdic. a failure to find any specific thing we did wrong and they start to argue when in fact they ignore the those would be equally relevant criticisms of the other financial agencies. >> i thank the gentleman. let me take a point of personal privilege if i could. i have been quoted as saying that the regulators -- well, i have been quoted by members of the press as saying that the

regulators were there to serve the banks. what i said, in fact, was that i reviewed the regulators as public servants. the question i asked is that did that include the banks and i said yes. i went on to say, not later, but at the same time and i am quoted in the article that draws that out, that they were to enforce the rules. i will actually introduced to the record -- >> i have read that quote. i would like to read. >> i would like to clear that up. i do believe that members genuinely believe that was the quote in its entirety. but the statement was that there were public servants.

and that i view that they should look on themselves as public servants, not only to the people, but to the banks, but also there were two other sentences -- and would has been widely quoted. it is heart once something gets out on the internet to clarify. but i will read into the statement. >> if you yelled, i have not heard that explanation. i would be glad to read it. if you did not use those words. i would be glad to it knowledge that. >> the two things on the internet, i am sure that all of our members suffered from this. i said there were 19 socialists in congress. was absolutely not said. at some point, a meeting said are there any socialist in congress and said i'm sure there are and professed the european view of socialism could they said how many and i said i don't

know. they said 100 and i said no. again, i was asked how many and i said i don't know. i had no idea. the only one i knew was bernie sanders. but it makes us all look like fools sometimes, that sort of thing. it is very disappointing because there have been things where i have misspoken. but those two things have been a source -- they just seem to have a life of their own. in fact, i specifically said i had no idea. i had that in a recording. it was a speech that was recorded. the letter -- they later retracted that, but it never got out. >> thank you, mr. chairman. we have discussed before 1056 of

dog-franc that requires you to be confirmed by the senate. you haven't been. if we -- if we chose to ignore the statute, you cannot be bootstrapped with a recess the -- a recessee. so you came to was six months ago as an unlawful appointee. six months later, nothing has changed. dodd-frank has made you a very powerful appointee, but not a legitimate appointee and has not made you an accountable appointee. and it is certainly not personal to you. but as long as this big gray legal cloud hangs over you and your agency, your credibility and efficacy, both you and your agency, are compromised. we know that the cfpb was a

major title. the president predicted that dodd-frank would lift the economy and give certainty to everybody. two years later, millions suffer unemployment and underemployment. anddodd-frank rules are some of the most luminous and harmful and our capital markets, and regulations tend to fall into two categories. those that create uncertainty and the secrete certain economic harm. we know that small businesses the economic engine of america. the head of one of the community banks in my native texas remark, "my major risk is not credit risk, risk of fat, risk of some robber coming in at my desk,

but regulatory risk. i yield back. >> miss maloney for three minutes. will there be another speaker? >> yes. >> for how long? ok, thank you. we don't have that list. miss maloney. >> first, i would like to welcome director corduroy to the 27 hearing he has had. often, my republican colleagues continue to use the cpfb as a political issue and i believe this list of hearings, 27 of them, speaks to the oversight that they have gone through. in fact, you're here and the semiannual report requested. if i had known there would have been so much oversight, i would

not have required it appeared when you do come, we hear what you're doing to help people. i would say you have tremendous credibility, particularly with the college students your helping, the veterans, the seniors. know before you go, which helps people understand their finances. but the cpfb is already one of the most accountable agencies and the numerous attempts to defame the agency are merely election-year efforts by those who never wanted to create the agency in the first place. those who put forth those amendments and build did not vote for the creation of the cpfb. those of us who worked on dodd- frank felt that consumers needed

an office that would be on their side. too often, consumers worry -- consumers were a secondary thought. i think it was very appropriate to have an agency looking out for a proper balance for industry, for consumers and for the overall economy. some of my colleagues on the other side of the i'll continue to say that there is not enough accountability. but i would say that the cfpb has extensive accountability and these were standards that were put in place under the wall street reform bill. and they are absolutely unprecedented in our government but i would say there's more accountability and oversight of the cfpb than any of the federal regulators. i would like to place in the record the analysis of the accountability and mention -- my time is running out, but the president can remove the

director for cause. the director must appear before congress annually and report on their budget. the gao is required to do an audit every year could it is the only banking regulator with a funding cap. they are capped in what they can spend. and the final rules are subject to judicial review. and it is also subject to the regulatory flexibility act and the congressional review laughed, -- the congressional review act. all of their decisions could be overruled by the other regulators. so there is extensive oversight of this important agency, which, in my opinion, has significant credibility that helps americans and hard-working people that they are trying to help understand their finances, bringing transparency into their contracts with credit cards and other financial institutions,

and i believe it is good for industry, good for our overall economy and good for our consumers. i look forward to your 27th report from the cfpb to this congress. thank you for your service and i yield back the may i please this in the record? a detailed explanation of the various oversight. >> without objection. ms. cabot cove without a budget mess -- ms. capatow. >> i think you know that i believe in many of us believe on this committee, particularly on our side, they commission for a five-person panel will probably service agency better because it will eliminate dramatic swings in ideology and those things can happen with the political wind. we think the cfpb should have

more accountability to congress for the fiscal and allocations that occur. a lot of people ask us how can you control or way in in this agency? the way we we in in agencies dollar the government is to work with their finances. -- the way we weigh in in agencies in the government is to work with their finances. what we heard in the august recess and what you're hearing, what is wrong with this economy and where are we going? if is uncertainty across the board. financial regulatory uncertainty is part of this. you have some very important issues before your bureau right now. if you don't do it right, this

economy will stay in a bleaker uncertain state could if you don't get the ability to payroll that we have been asking you -- if you don't get the ability to pay rule that we have been asking for first get home spouses. many of the financial and institutions have a lot of uncertainty because you have ccpfb over here and the regulator over here. it is creating more uncertainty for financial institutions and resulting in a lack of landing and a lack of job creation and for their stagnating this economy. thank you. -- and further stagnating this economy. thank you. >> mr. scott for two minutes. >> thank you, mr. chairman. i think this is a great time because you hear a lot of complaints about the cfpb to

explain exactly what you're doing to help the consumer. for example, sharing what are the violations that pose the greatest threat to consumers would be good for us to know. you are currently carrying out hundreds of investigations. it would be good for us to know what types are they. what is most prevalent? what poses the greatest threat? there are also areas of conflict of jurisdiction, particularly in areas with the ftc and your agency. where does your -- it came up in our credit score hearing a few weeks ago. where do you begin? where do they begin? where do you and and where do they end? concerns to consumers are home appraisals.

we hear that all the time because of the economy. homeowners are caught in a bind where their mortgages have been allocated at a search -- at a certain level. you get certain appraisals coming in. that would be a good thing to know. and to describe just how the consumer complaints process works. what happens here? if a consumer disputes the response they get from a financial company, what are the options available to that consumer? in your experience, are there additional changes that the bureau could make to particularly home appraisals to help protect the consumer more? i am looking forward to your comments on these things. but i think it presents you with an excellent opportunity to give a great response to some of the criticisms we have gone to show exactly the good that you're

doing and how it is being done to the benefit of protecting our consumers. thank you, mr. chairman. >> thank you. >> director cordray, mortgage disclosures have been an interest to me since my days as a real-estate attorney couldn't today, alongside consumers and mortgage industry -- as a real estate attorney. today, alongside consumers and mortgage industry, at first glance, i can say that i think the proposal needs more work. newly proposed mortgage disclosures should be streamlined, allow stakeholders ample time to provide input and include a thorough regulatory impact analysis that will focus on small businesses. i encourage you to keep in mind

that new disclosures can radically change the marketplace and be costly to businesses, particularly small businesses. and these costs will be taken on by consumers. i yield back. >> thank you, mr. chairman. i was trying to put this into perspective. basically creating a new government agency, giving the director a 500 -- a half a billion dollars slush fund saying i will go create an agency and i was trying to put that in perspective in my background in business. it would be like having a ceo calling an employe to his office and say, i hear we have a problem in a certain area, tell you what, here is half a billion dollars parent send me an e-mail if you need a little money and don't worry about sending us any reports. i want as any questions print just go and see if you can take the money and fix that problem.

i think government is the only place where that would happen. whether you agree or not, what you should agree is that having to borrow 40 cents of every dollar of tax payers' money, transparency and accountability is very important. he has promised to have an open and transparent agency. yet our continued request for additional information for operational and financial plans have basically gone unanswered. i hope we can get a clearer picture today on with this agency is going. with that, i yield back. >> let me indicate to the members that mr. cordray has to leave at 1:30 p.m. with that being said, without objection, your written statement will be made a part of the record and you are

recognized for five minutes, and a summary of your testimony. you can certainly go longer than five minutes. >> thank you, mr. chairman. let me clarify that i will stay as long as you like. >> a little closer to the microphone could >> let me say that again. mr. chairman, thank you. i will stay as long as you like. festival a isaf to testify to death with -- thank you for inviting me to testify today. we focus solely on protecting consumers in the financial marketplace. the semiannual report we're discussing is from january 1 to june 30 this year. as the report shows, we have been using all the tools to help consumers across this country. we pledge to continue our work to provide a fair, transparent and competitive consumer marketplace.

through our regulatory tools, we propose rules that will help fix the broken mortgage market with common-sense solutions. we are writing rules that simplify mortgage disclosure forms and make sure that consumers cannot receive mortgages that they cannot understand and cannot afford. i will also bring greater account -- british transparency to mortgage -- bring greater transparency to mortgage financing. our push for accountability extends beyond consumer servicing. prior to my appointment, non- banks had never been federally supervised. we also had the authority to --

so far, we have added credit reporting companies to this group. it is important for us to practice sensible oversight, but also to umpire knauf -- to empower consumers themselves to make irresponsible financial decisions. bill -- to make responsible financial decisions. we also developed advocacy and an on-line database with frequently asked questions. we launched the first database of financial products starting with credit cards been consumers can use the website to utilize and analyze information and draw their own conclusions about the service provider related to these financial products. we think it is important to engage directly with consumers so we know more about the struggles and frustrations they encounter in their daily lives. the bureau has held several hearings across the country you will recall their first one was in birmingham, alabama.

so we can talk face-to-face with consumers on a variety of topics. our website has a feature called "tell your story" which encourages consumers to share their personal stories to help us inform our approach. perhaps most significantly, we help to resolve consumer disputes with consumers by taking complaints at a website as well as by mail, fax, phone and through other agencies. as of september 3, we received 72,297 consumer complaints about credit cards, mortgages and other financial products and services and the pace of complaints is increasing over the past year. all of these processes, rulemaking, supervision and enforcement provide us with a valuable affirmation about the consumer financial markets. we engaged significant out reach to small and financial institutions, including banks and non-banks. we pride ourselves in being a

21st century agency whose work is evidence-based parent we conduct our own in depth studies on consumer financial products, such as reverse mortgages and private student loans. we have issued public requests for information to seek input from consumers, industry and other stakeholders on issues such as over-fees, prepaid credit cards, and the protection of seniors. the new consumer bureau has worked on all of these projects while being fully engaged on start of activity. the bureau has worked to create an infrastructure that promotes transparency, accountability, fairness and service to the public. our first year has been busy and pole and this report reflects considerable hard work done by people who i greatly admire and respect. they are of the highest caliber and they are deeply dedicated to public service. we look forward to continuing to fulfil congress's vision of an agency that helps all americans by proven ways and means of their financial lives.

thank you. i will be glad to address all questions. >> i appreciate you making i think one of the -- one of the first hearings was in birmingham. i appreciate you coming to birmingham for that hearing. i think it went quite well. as you know, the federal reserve issued a final rule earlier this year clarifying certain provisions of the card at in which they determined that a credit-card issuer could no longer rely on the consumers household income to determine a consumer's ability to pay. the cftb has now inherited this rule from the fed. i'm concerned about the impact this change will have on non- working spouses and military families. some people call this is the stay at home moms or stay at home spouses might be more

politically correct. but given the current economic environment, many consumers already face challenges getting access to credit. and this change would make situation worse, especially for women and military families. in a hearing with the financial institutions commission, the bureau intended to make a determination about how to proceed with the rule during the course of the summer appeared she went on to clarify that summer goes until mid-to-late september. so we are within that definition. as the cfpb finished and made a determination on how to proceed? if so, could you share with the committee any analysis you conducted and the impact this change may have on consumers? >> thank you for that question. i know it has been a concern of many members. i have discussed the matter personally over the telephone

with rep capito and representative maloney. we have over the summer made an effort to assess to things give the first is a scope of the problem and an understanding whether it is something we should move and act on. the second is, if we do so, what means are available to us? what avenues can we pursue? is it something we can simply clarify without having to we did have a chance to gather some information and data from industry to assess the gravity of the problem. we have determined it is a senior official problem. there are tens or perhaps hundreds of thousands of individuals have been denied access to credit as a result of the way the laws interpreted.

we have also attempted to gauge whether we could simply offer some sort of clarification informally in that would do the trick. i think we have determined that will not suffice. we will need to engage in rulemaking. we have also determined that in order to address this problem we can engage in rulemaking, it is not necessarily necessary to come back and how congress change the law. it is within congress's per view if they want to change the law. we have made the determination to proceed. we are going to address this issue. our proposal will be on the street in the very near future, certainly we think before you reconvene. you'll have an opportunity to look at and determine if you want to proceed by legislation, whether you want to work with us on the rulemaking process, and we do intend to face this issue and resolve it.

>> sometimes we don't always fit responsive answer -- we don't always get a responsive answer. as you know, lending standards on residential mortgages are as tight as they have ever been. even prospective borrowers with strong credit histories are in some cases finding it difficult to obtain loans. are you concerned about the rigid criteria for defining what constitutes -- what constitutes a qualified mortgage and how could disproportionately affect low-income, first time, rural, or minority borrowers, and how is that concern in forming your deliberation on the critical question of how much protection from legal liability should be afforded to lenders that make qualified mortgages? >> mr. chairman, we do have a

concern, and i think congress told us, one of our objectives is to be mindful of the issues of access to credit. i've come to understand that we can draw up the nicest looking consumer protections you have ever seen, but if people are not willing to lend to consumers, those protections are worth very little as they entered year than they could actually be harmful to consumers. i would say two things about the mortgage markets. the biggest thing that constrain credit in the mortgage market in our lifetime was the ensuing recession that has caused many problems for smaller institutions, community banks, and small businesses and individuals getting access to credit. that remains the case today. credit in the mortgage market is extremely tight. we are very low level of activity and it is part of what is essentially having to dig out of a financial crisis that would have been far better if we could have averted in the first place.

secondly, with respect to the mortgage you ask about, we have received a tremendous amount input. over the course of that, are our job is to finalize it. we have come to understand it is important for us to draw this rule in a way that encourages facilities access to credit in the mortgage market, and we plan to do so. it would be unwise of our agency to write a rule that further constrict access to credit and the protections intended to create for consumers and i think that in the end, people will be satisfied with what we do, which will be finalized before january 21 of next year. >> thank you very much.

>> thank you, mr. chairman. welcome again, director cordray. i read a story recently in bloomberg, i believe it was last week, where you were quoted as saying europe had received far fewer complaints on credit cards than expected. i was pleased to hear that, as i was the author of the credit card bill of rights in the house. you treated that low number of complaints to the changes that we made in the passage of the card act. i, likewise, have not been getting complaints. used to be i could not walk down the street without someone stopping me with a credit card horror story. i would like to know to what extent you are receiving complaints about credit cards. what are they? what is the area you are receiving, if you are receiving any, and water you doing in working to address it? >> thank you for the question and thank you for what i

thought were really important strides for consumers made in the card act that congress enacted in the last session. i do believe that for myself personally, i had been surprised we have seep -- receive your complaints about credit cards than i would have expected. my experience in that regard was at the time that the federal reserve was first considering broadening consumer protections in this area, i was the treasure in the state of ohio. i organize the speak out and i'll campaign to collect comments and reactions from the public on this. we submitted something like 30,000 comments to the bet on it and people were very upset about their credit card accounts and how those were being handled and manipulations as they perceived it of late fees and changes that they did not understand, or were not sufficiently explained. in the wake of the card act, a number of those complaints have been addressed. we held a conference on the

implementation of the card act last year and i think we were encouraged already by what we saw and as it has filtered through more and more coming has been very positive. the complaints we receive our range across the spectrum. a lot of issues clearly around billing disputes, sometimes there are claims of error. sometimes there is unclear tear around terms, although less so than was true before. we put a graph up on our website of different categories of complaints we have received so the public and scrutinize it and understand what we are seeing. we found through our complaint database that the response from the financial companies to the complaints has been at a pretty high rate. they seem to be paying increased attention to customer service.

they have over all the way in which they respond to their own complaints and to the ones that we work with them on and there seems to be -- a j.d. power survey recently indicated this as well. showed the overall level of satisfaction with public credit card companies has been increasing over each of the last several years. i would attribute some that to the card act and some to reduce focus by the companies themselves and i think it is a good development. >> i must say that one outcome of the card act with which i am not least is the interpretation of the federal reserve on the ability to pay standard and implementing the card act. i join the chairwoman and others on both sides of the aisle and i know it was certainly not my intent for a card act and the ability to pay to prevent stay

at home spouses from obtaining credit in their own right. chairlady capito held a hearing in may and we receive substantial testimony that this was a huge effort for stay at home moms. i know you say you are working on it, but we certainly don't want to legislate it. if we wanted to legislate it, we would have done it by now. we have made it a top priority of the subcommittee and it is a priority on both sides of the aisle. i would also say it is a woman's issue. when are you going to have a draft? we have been waiting for now almost two years, or a year. can you give us a little more definite statement on when we will have something we can react to? >> thank you, congresswoman.

i thought it was fairly definite before, but i will repeated. this issue came up for you and i had discussions about it in may, just a few months ago. we first had to determine whether we could proceed by rule or whether the statute itself had to be changed. this is clearly an unintended consequence of the legislation and the regulatory process. it is not an uncomplicated issue. a number of issues have to be sorted through. we have determined that we will proceed with rulemaking and we will have a proposal, i am fairly certain, before you all return. >> that is good. that is a definite date. i did not hear a definite date, and my time has expired. that is very good news that we will have something we can start working on to help stay at home moms. thank you. my time has expired. >> when your rear before the committee six months ago, we had

a discussion about the term abusive, since your agency has the ability to outlaw a abusive acts. at the time, i believe you said we will have more to say about this over time. 1031b permits the bureau to prescribe rules defining abusive. i think you were quoted a few months ago stating that it was not the intention to write rules dealing with the term abusive. is that correct, and is that still your intention? >> that is currently our outlook on that issue. >> it is a new legal term of hours, there was not clarity six months ago. you also testified six months ago before this committee that there could be a practice that could be fair, yet still be abusive. you did not give examples at the

time. six months later, now that your agency has had a chance to study this, can you give me examples of a practice or product that would be both fair and abusive, or at least give me the criteria that the agency is currently using to draw the differentiation? >> congressman, as i think you would hope we would do as a federal law enforcement agency, we are applying the language that congress itself enacted, that is following the law. the definition of abusive that is contained within the financial reform law itself is specific as to -- it is different language than act is is in defining unfair, which is also a defined term in that act, and therefore there could be different applications. i have also said it is a bit of a puzzle to determine what kind of action would not be unfair,

not be deceptive, but would be abusive. >> it is it fair to say that six months later, we still don't have an answer to the question, is there a specific example of a product or service that would be both fair and abusive? >> i would not put it that way that we don't have an answer to the question. we have had an answer from the beginning. >> can you give me examples? >> i don't understand that industry is eager to have us start spraying abusive citations around. we are trying to be careful about this. >> within not want to know what is lawful and what is unlawful? if that doesn't use it -- is a visit, it would be unlawful. >> as we go along, if we determine there are abusive acts and practices, we will rely upon congress's definition of the term. there is no reason for us to go

make up some different definition for us to establish -- >> but you have the power to prescribe rules that define it. >> we could, but i don't have a sense that the industry is dying for that, either. state attorney general's cannot enforce rules a we adopt under the act. if we were to define rules -- >> what is of concern here is whether or not the agency refuses to write a rule or is incapable. it is a totally subjective term that will be determined by the agency on a case by case basis. in which case, and credible detriment to our consumer credit markets. i have not heard any clarity around it today, but in the limited time i have a, i will move on. in the context of discussing mortgage rules, i think he said it would not help home buyers to promulgate rules that restricted

access to mortgage credit, but then i look at what has happened with respect to remittances. your own agency has estimated the first rule will require 7.7 million employee hours to implement and comply with the new rule. you also noted the cost of compliance will ultimately be shared among the consumers and businesses involved in it remittance transfers. all i can tell you is, i am hearing from a number of banks in my home state of texas that due to the rules promulgated by a agency, they are just getting out of the business. they are getting out of the remittance business, and i have lots of constituents and many other members who represent states along our southern border, so i am just curious. i hope your agency is hearing the same thing.

how is this serving the consumer that they have fewer choices and their access is getting restricted by the rules? >> thank you for raising that issue. as you will recall, we did not just come up this rule in a vacuum. congress passed the statute. it is a lot of the land, unless congress were to act otherwise, that there are brand new consumer protections being afforded to remittance transfers, and therefore when money we do when people send money internationally, they will have the same kind of protections in many respects that they have when they send money domestically. that is a public policy choice that congress made. i happen to agree with that. our job was to implement that by implementing rules, which we have done. there are some providers for whom the notion that in doing these transactions, the have to offer consumer protections and disclosures, etc., that may be too onerous that they will do

the transaction that they have to tell consumers how much they will receive on the other end. if you are a smaller credit union and not in a position to know what the exchange rate is that will be applied on the other end, you are permitted under the law to use a reasonable estimate. you don't have to get it exactly right. if you don't know what fees are going to be imposed on the other men, you are permitted to give reasonable estimate. we do hear that there are some providers for whom this is going to be difficult and that may not be able to comply. they may choose not to offer this product. we did propose and send out for comment and then finalize an extension for any institution that does not do these transactions in the normal course of business. that exemption is now in place and will exempt many providers from having to comply with this rule if they simply want to do this as a convenience for existing customers, not very

frequently. for anybody for whom that is their business model, there are new requirements imposed by congress by law. i happen to agree with them and think they are necessary. the people who engage in these transactions are entitled to the same protections we get on our bank account transactions. that is what we are doing. >> i am going to step in for a gette' and hopefully we can into some more of this topic. >> mr. cordray, there is a bureau specific requirement to assess the possibility the new consumer protection regulations will increase the cost of capital for small businesses. what factors about access to

capital did this siepi analyze when drafting -- did the cfpb analyze when drafting the regulations? >> we have been at it for more than two years now, being as transparent as we can be around these points. the issue is what the consumers understand and what exactly are financial providers needing to tell them, and how will it be framed so that is understandable? we have been doing a great deal of quantitative testing a around different forms in different language to see actual consumers react to that. we have conducted as we are required to do by law on certain of our rule making is a panel of small providers who came and gave us face-to-face their input into how different proposals might affect small providers and

we had broad representation from a lot of the real estate industry, not just lenders. that was very useful to us and a number of aspects of their input went into this proposal that we now have out for comment, which is now available. we are getting much for comment now broadly, not only from small providers but more from them. we have tried to be accessible from groups on all sides to meet with us and tell us their concerns. this is a change, something congress has wanted for more than 20 years, to take these two distinct forms into distinct statutes that overlap each other and very confusing and redundant ways and put them together. it is not an easy thing to do. i think mark twain once said that if he had more time, he would write a short letter. trying to boil things down and still make it understandable is actually quite a bit of work. we want to make sure we test

with consumers to get it right. we will be doing quantitative testing as well in the winter and spring, as we have been urged to do by many of our colleagues. we hope to get it right. we are doing everything we can. >> thank you. under the dodd-frank act, the cfpb becomes only the third federal agency required to conduct a review panel to examine how the entities will be affected by the agency's new regulations. can you talk to us about what kind of feedback as the small business community provided you in implementing these type of regulations? >> as you said, the consumer bureau is one of only three government agencies that write regulations that is required to follow the small business review process. the others are osha and the epa.

there is some concern among our staff at the onset of -- abbey outset about how onerous the process would be. we have had a good process with it so far. on all of the rulemaking where we have gone through the process thus far, we have found that we have received input that a changed the content and are thinking about the proposal. it has succeeded in the aspiration which is that during -- hearing face-to-face from small providers where will our focus specifically on them and not being drowned out by the voices of the larger providers, we come to see things a little differently and we take that into account in our proposals. i could show you for each of the rules, different specific changes that has led to. so it has been a good process. >> you have her lot of people in

critics saying that they expressed concern that the cfpb will stifle lending to small businesses. we know that even before the act was passed, small businesses were having trouble accessing capital. based on some critical data, can you talk to us if there have been any negative feedback on small businesses accessing credit? >> the small business administration probably has a better perspective than we do, but it is something we are mindful of been trying to avoid. i would echo what you said. the biggest single drying up capital for small business in our lifetime was the financial crisis, the credit freeze, and it has been difficult for small businesses ever since. how the things we can do to prevent that from happening again are very meaningful for

small business. i hope that is also understood. >> thank you. i am going to recognize myself fofive minutes for questioning. how many employees do you have right now? >> my understanding is that as up september 30 it will be 983. somewhere probably in the 1600's and 1700's range, so i would say we are more than halfway there. >> how many meetings have there been? >> i don't have an exact count. have been attending meetings since i became director of the bureau and january 4. i could go back and we could give you an exact number. i would guess there have been about a half-dozen meetings.

surly ones more than every two months. it may be less than once a month. >> what is the substance of those meetings at your level? >> the substance of the meetings is implementing the provisions of the dodd-frank act, that the federal stability oversight council was given the authority to oversee, which has to do with systematically important financial institutions and other matters that are of grave import to the stability of the financial system. >> are you satisfied that that is moving fast enough? >> i don't really have a context for making that judgment. we are moving forward. there are activities occurring and have become known publicly. there is other activity occurring that is in process that is not public yet. i think everybody is looking to move these processes along, and i as a member of the council and looking to do so as well.

>> i want to get into this uncertainty issue that i talked about in my opening statement. we have heard this as recently as yesterday from institutions will fall within the purview of the cfpb and the reserve. there is a distinct impression, and it is not just a one-shot deal, and i believe you are aware that the feeling that the cfpb is there to make decisions on consumer protection, yet the provincial regulator is still holding on or exerting influence in that area, and that there is some -- when two people think they have authority in one area, instead of of people making decisions, sometimes nobody

makes a decision, or takes the lead. where is the lead supposed to be? what are you going to do about this? when the bureau was created, we said you are just going to pylon and it will create more uncertainty. this really concerns me at this juncture of our economy. i would like for you to be as candid as you possibly can be in this area. >> it is a fair concern. the statutory authority does overlap to some degree. if you have a consumer protection issue, you arguably almost inevitably have a consumer compliance issue that could involve matters such as litigation risk, reputation a risk, and the like for the institution, which can go to safety and soundness, depending on the magnitude. this is and is going to be a collaboration. i have come to see that more and better as the director of this agency. it is very important for us to

have strong relationships with the fdic, with the occ, and with the fed, and the credit union administration as well. i have been really pleased at the progress we have all made at building those relationships and working together. it may be noted that the credit art -- credit card enforcement act that was completed recently was a collaboration between our bureau and the occ. we worked together on that. it is important that we be on the same page so that the institutions -- it is our job to see that we get together. we have a number of matters we are working on with the occ and working with the fdic and with the fed. we all collaborated earlier this summer on supervisory guidance involving military service

members and their families, permit change of station orders. that was a good collaboration. as you say, when you are a starting to do these things, there are issues you work through that are new and different, and overt time it becomes easier. i would say that the fact that the new comptroller of the currency has a strong background at the state and federal level in both consumer protection issues and safety regulation, that has been a tremendous step forward for our relationship. i would say the fact that i serve on the fdic board and have had a chance to get to know their leadership has helped tremendously with that cooperation. >> my final statement would be, i think the institutions can follow a road map if they can see the road map, and they can follow directions if they have the directions. the directions.