background that might prevent a conflict of interest? >> no. >> is there anything that would prevent you from discharging the responsibilities for the office for which were nominated? >> no. >> is there anything that would keep you from appearing and testifying in a court of law if confirmed? >> no. >> thank you. as a preliminary matter, i want to express to the chairman how much i agreed with his comments this morning. and with his concern about a process that seems to get short- circuited by rumors and innuendo and lack of credible evidence. i want to tell you how much i enjoyed meeting you in my office as we relayed security concerns, understanding that your

commitment to law enforcement, your commitment and support by people you worked with, which means the world to me that cops like you. you are willing to do the tough work of taking tough cases to trial and representing the u.s. in cases that maybe other people avoid. i appreciated hearing that history about you. i appreciate having the chance to meet with you. hopefully, if everything comes to fruition the way we think it will, i look forward to the opportunity of bringing you to north dakota and introducing you to the unique challenges we have in the northern border. i don't think -- i guess i have to decide this morning whether we will have the discussion i thought we were going to have.

i think it will hopefully help clear some things up and give you a chance to respond. it is hard, from a witness's standpoint, from your standpoint, to have an opportunity to respond to what can be a frustrating situation for you and your family. i'm going to jump right in. in this situation with funds management where you had multiple requests to intervene in the process, what structures, rules, or practices did you put in place to make sure that no ethics were violated?

>> thank you, senator. it was a pleasure to meet you as well. it will be an honor to be confirmed and have the opportunity to travel with you to your state and explore the challenges of the northern border. senator, if i can, the issues -- the difficult, complex issues of law and policy that challenge the agency and present opportunities for resolution percolate up through the supervisory chain, when they need resolution and when they have broad application, the manner in which those cases reach me is through cases. we are an operation. we are a large agency. we protect our nations security. we combat fraud and assess the applications that come before us through the cases that they present to us. i have become involved in those

complex, difficult, legal policy issues when they are raised to my attention by my colleagues, which very often occurs. by members of congress, which very often occurs. by members of the public or applications themselves. we deferred to adjudicators on the frontline to adjudicate cases. i do not adjudicate cases. i address legal policy issues that are brought to my attention through the channels that i have outlined. >> what types of verbal orders or requests did you make to your staff on this issue that would not be captured by e-mail or in any other written record? >> are you speaking with respect

to the -- matter? >> yes. >> i sat around a table with my colleagues, which is my practice when difficult issues rise to my level. i sat around with my colleagues and we resolved the issues. >> so there would have been some verbal communications beyond e- mails and written correspondence? >> most certainly. we have set up structures with response to this question to resolve difficult legal issues. sometimes we are able to resolve the issues with colleagues who are handling the matter directly. sometimes different people have

to be involved in the discussion and bring their expertise. we have set up senior policy committees. we have set up leadership meetings. we have set up open and collaborative forums to resolve the issues. i do not resolve those issues alone. >> would there have been a scheduling note of who would've attended the meetings? >> there very well might be. certainly, there were a number of people around the table when we discussed the issues. >> i believe it is safe to say that the visa program has challenges attached to it through its nature. what added responsibility does an agency leader have when dealing with the program that may be considered controversial as a result of the way the program is structured? what responsibility do they have to make sure that the orders are clear and the staff understands the potential pitfalls? >> i appreciate the question. let me speak to my responsibility. then let me speak about the program about which you have inquired. it is my responsibility to assure that we administer our responsibilities, abilities to safeguard the nation's security and to protect the integrity of

the system. we do it in strict accordance with the law. based on the law and the facts oma and nothing else. we adhere to the highest ideals of public service, and they are correct. that is how i carry out my responsibilities. the program is controversial. it is comples. it is like no other program we have administered. frankly, it is a program that is primarily a business and economic program, and not an immigration program.

what is involved in the case is an assessment, whether foreign capital is invested properly in a new commercial enterprise, whether the amount of capital is at risk throughout the term of the investment, whether the business enterprise proposed is specifically detailed and viable, and whether the models submitted to us to estimate future jobs are sound and reasonable. those are some of the issues involved in the adjudication of the ev5 program. as a director of this agency, i observed that the program was a staffed with nine adjudicators, no economists, no business

analysts, and no specialists in national security or fraud detection. throughout my tenure, we have built the program. we have bright individuals dedicated to ensuring the integrity of the program as it has grown throughout the years. >> i have a second round of questions if you're able. senator mccaskill? >> from your record, i see that you're a prosecutor. i like to call what you are, a 911 prosecutor. i did not have the luxury like my colleagues did.

as you well know, we thought we were the real prosecutors, and you're not. having said that, i know that you moved up to u.s. attorney, which is extraordinarily unusual and speaks to your capabilities. as a prosecutor, i will be candid with you. these things floating out there, prosecutor, i will be candid with you. why don't you take a few minutes here, and you have five, and say

what you would want us to know about the accusations being made about you, that you tried to use inappropriately, your position, to influence a matter because of who was interested in the outcome. >> thank you for the opportunity. let me share with you if i may i felt like a 911 prosecutor. it was monday evening when i was forwarded a copy of the e-mail that was published to this committee about an apparent inspector general investigation of which i reportedly am the

subject. i had no idea. frankly, i do not understand it. i will say this, and i say it firmly, and i say it unequivocally, and i say it after 16 years of service to this country, 12 of which were as a law enforcement official, i have never in my career exercised undue influence to influence the outcome of a case. i have never based my decisions on who brings a case, but rather upon the facts and the law. i have taken my oaths of office, and i live my life by those oaths. i refer to this on a personal level in my opening statement. my entire life, i have tried to live in a way that brings honor to my parents.

there has never been an instance in which i have failed to do so in terms of the integrity with which i have brought my efforts to bear on everything i have done, whether in the private sector or the public sector. i look forward to learning about the obligations. i do not quite understand them, but i will tell you that the allegations are unequivocally false. the gulf coast matter is a matter about which we received complaints in 2011. issues in that case rose to my attention because the ev5 program is complex. a few issues were brought to my attention, and i addressed them with my colleagues around the table. >> normally i don't jump in.

i think it might be helpful for us to have a basic understanding of the program. my understanding is that you did not create the program. it was not created in this administration. it was created in 1992, and we are struggling to come out of a recession. >> you mean this decade, not this century. >> it was created in 1992. what they were trying to do was figure out how to get the economy moving. one way to do that is have

access to capital. take a few minutes and give us what i will call ev5-101. >> i will be eager to continue my response. the program has its creation. it is premised on the belief that individuals in foreign countries that are willing to invest in the u.s., and those investments yield jobs. they have an opportunity then to gain lawful status in the united states. that is the top level of the issue. >> is it a green card? >> they first get a conditional green card. then after two years, if the jobs had been created, 10 jobs specifically have been created or are likely to be created within a reasonable period of

time. this gives you an idea of the issues we wrestle with. but if they are created, the conditions of permanent resident status are removed, and the foreign individual is a lawful permanent resident. therefore, they are eligible for citizenship after a number of years, provided that they qualify. >> continue please. >> the allegation is that i somehow -- by somehow sitting around the table and resolving a

couple of difficult issues that were unsettled in our agency in the administration of the program. it was nothing that i have not done hundreds of times when difficult issues reached my attention. the agency needs resolution of them. it is interesting to note that i summarize the allegations to be a favored treatment was afforded the gulf coast. noteworthy is the fact that the complaints persisted in 2012, and they continue to this day.

also noteworthy -- >> what complaints are you referencing specifically? >> delays, layer of the agency to adjudicate the case. on this particular case, the complaints exist. >> so it has not been resolved? >> i don't know the status of the cases. >> the people that you allegedly tried to help? >> i don't know the status of the cases. with respect to this matter from that perspective, i referred the case to the fraud detection and national security directorate.

>> my time is up. i appreciate your many years. and i was teasing you about not being a nice prosecutor. i want to make sure you knew that. like you were teasing about your brothers not being as beautiful as your wife grade >> may that be the only time we disagree. >> i have a feeling there will be many other times we disagree, but it will be on finance contracting and audits. thank you very much. >> if i can give you the one i recall specifically and why i recall it specifically, when i get involved in policy issues or novel questions before us, what we seek to do is resolve them

for the benefit of the agency as a whole. the one complex issue ire members so clearly is we actually remote memorial i the resolution of that difficult issue in a new policy memorandum we published publicly and throughout the agency as guidance to our adjudicators of may of this year. the resolution of that case, of course, showed up in prior drafts of the final policy memorandum we just published. the issue is this -- there is an administrative appeal decision published by our agency called in the matter of izummi. >> that must be an acronym. >> it is not. one of the requirements in the eb5 program is that the ford investors capital must be at risk throughout the term of the investment. the matter of izumi stands for the proposition that a

redemption agreement in the transaction documents against foreign investors capital being at risk. in other words, if you could redeem your investment to ring the duration of the relative time, your not at risk and satisfy the legal requirement. the case that was presented to my attention was the following is it the mere existence of a redemption agreement that disqualifies the individual from satisfying the legal requirement that the b at risk or is it the question of looking at the terms and whether the terms militate against the requirement that b

at risk? to the best of my recollection, the individual investor according to the deal documents could convert his or her common shares to preferred shares or vice versa. i don't recall. the deal documents provided, the redemption provided there was not at the time a market for either for the common shares or preferred shares. nor may there ever be a market for those shares. the conclusion was reached around the table that quite frankly and as a matter of law in the interpretation of the deal document, the capital remained at risk because there may not ever be a market for that capital and the redemption may never be realized. that's an example of a difficult issue that could rise to my

attention. when we resolve it, we can provide guidance to our adjudicators so they can adjudicate cases in strict adherence of the lot more ably. the absolute core principle is that we adjudicate cases based on the facts of a law. >> when i first heard about it, i didn't know much about it until this month. i learned a bit and i'm still learning, but it seems to me this is a strange program to be located -- you meet people with skills and they have entrepreneurship and this is actually an idea, we have to have somebody to look at this and say does this actually make any sense? would you respond to that. and make sure you have the kind of people in your agency -- make sure you have the kind of talent and your agency to help make the

right judgment calls. >> thank you very much. i would like to answer that in a couple of parts if i may. we received more complaints about our administration of the eb5 program than we do any other area in our work. we receive complaints from the public, applicants and petitioners and we receive complaints from members of congress in both parties.

>> and this is bipartisan? >> it is absolutely bipartisan and there's probably not a week that goes by that i don't receive complaints from members of congress with respect to our administration of the program. quite frankly, there have been a number of eb5 program issues that have been raised to my attention that i have addressed with my colleagues and i recall the members concerns were actually valid and we were able to resolve those. >> were there any interested where they were not valid? >> most certainly. we respond to the concerns not by who is the author of the concern but rather by what the facts and law demand. that is our principal. eb5 cases have been brought to my attention within the agency. the administration brought a case to my attention because we were terminating a regional

center for the first time and we wanted to make sure our decision was correct because the stakes are high and the decision was well reasoned and well written. my office became involved then. as i mentioned, the program requires expert economic analysis and clear and sophisticated understanding of business proposals and the myriad of legal issues that those arenas raise. when i first came to the agency, i reach out to partners in the federal government when i learned about the program and posited to them they needed to become involved as partners with us because they had the expertise to bring to bear. the department of commerce would be one example and our discussions with other government agencies in sharing responsibility for the administration of the program are ongoing. in the interim, i do not ban still. i do not stand still in progress is needed.

progress is an obligation of hours to achieve. what i did was i introduced to the program economists. we expanded the pool of adjudicators. i don't think we did right for many years in support of our adjudicators because we put them in charge of cases and did not equip them with the tools to address those cases as i think they would most want because they strive for excellence. i brought economic expertise and business expertise. i brought fraud detection to national security expertise. those efforts have been evolving and most recently, we decided to create a new program. embedded in it will be national security personnel and a greater

level of expertise. >> just to follow-up, there is reference to several employees that you retaliated against them. i think they are in a california office. this was not viewed to be a matter of retaliation. do you have any recollection of that? could you put a little light on that? >> the office of special counsel determined were no facts to support the allegations. her smell decisions are very difficult to make grade they are singularly the most taxing aspects of jobs when one has supervisor will

responsibilities. one has to act in the best interest of the agency. personnel moves are not necessarily disparagement. or anything critical. as a supervisor, as a manager and leader, one has to fit the needs of the agencies with the talent of the people most ably. my commitment is to the talent of the agency as a whole and my commitment is to the laws we are sworn to uphold. >> mr. chairman, i would like to just for a moment talk about becoming director of homeland security, if that is possible. i have one question. we are deeply concerned about morale of the department of homeland security.

i know we have had these discussions before and if you are confirmed as the deputy, what will you do to improve morel within the agency and what steps would you take to bring more cohesion to the group? >> thank you very much. i have been honored and continue to be honored to work with the men and women of u.s. citizenship and immigration services in the department of homeland security of which are agency is a part erie it we have an incredibly talented and dedicated workforce. a workforce that is deeply committed to the mission of the department and that loves its mission. it would be my honor if i am confirmed to be sure our workforce has the tools they require to work at the very highest levels of excellence to which they aspire and that they feel fully supported and that they are trained and provided with open and fair processes. i will engage with the workforce and i will engage with this committee in focusing to ensure that the morale is as high as it

should be when one considers the talent of the people and the nobility of the mission. when you talk about the tools, because we all know that what can affect morale is the lack of ability to do your job. knowing your job but not having the tools. what additional tools do you work of sential to the the department of homeland security? >> senator, thank you. let me draw upon my experience at the u.s. citizenship and

immigration services because i have spent a great deal of energy and focus on the well-being of our workforce. the workforce in uscis has asked for more training. our immigration law and policy is ever evolving. new decisions are issued, new challenges arise, and they've asked for enhanced training and we have delivered. they have asked for agency.

very often we pick managers who are experts but not expertly trained in how to bring out the best in people. how to assist people when they have challenges and how to promote people when they have successes. those are some examples of tools that a workforce requests and a workforce deserves. >> just one final point. as you have disparaged the appearance of your brothers, we just want to point out that some might suggest that they're better looking than you are. >> senator, they have not gone through three confirmation earings. >> i would just acknowledge that you have lost some of your hair but not some of your

humor. we are joined by senator tester. >> thanks. 'm sorry i was late. don't take senator hite camp's remarks to heart because she talks about me being ugly too. just kidding. thanks for being here. i appreciate your willingness to serve. this country. we're in a situation where janet napolitano has stepped down. so consequently, there will be an administration leadership void. a leadership void within the administration is what i meant to say. if confirmed how will you work with the administration and congress to make sure the department is moving forward even though there's going to be so many positions of leadership missing at the department? >> thank you very much senator tester for the question.

if i have the privilege of being confirmed as the deputy secretary, i would work with this committee to ensure that the president's nominees to fill vacancies in the department of homeland security are completed successfully as swiftly as possible. and in the interim, senator, i can say unequivocally that we have tremendous talent within the department of homeland security to ensure that the mission of the department is accomplished successfully, effectively, and efficiently until those vacancies are filled. >> i want to talk about these overstays as you know 40% of the folks who are here improperly are because of visa overstays. it's a huge problem and processing, identifying, modifying, monitoring or apprehending individual whose

overstay their visas. from your perspective, is this an issue of inadequate man power, inadequate focus, resources, are there statutory obstacles in the road? it seems to me 40% is a little over the top. so why is that? >> thank you very much, senator. your question is the a very important one. the department of homeland security has made great strides in addressing the problem of visa overstays, immigrations and customs enforcement one of the agencies primary responsible for the enforcement area has significantly improved in its battle to combat visa overstays. we have developed enhanced biographiccal data to ensure that we are aware of the individuals who have overstayed their visas. and what i will do immediately,

senator, is ensure that immigration and customs enforcement reaches out to your office and informs you with great detail of the tremendous strides that they have made in addressing the visa overstay problem. because they have done so in recent months. >> i appreciate that. i think passed the senate went a long ways in eliminating those visa overstays and hopefully the house will take that up and not play politics with it because it really is important for the country. montana is home to seven american indian reservations and a state recognized tribe. in the past i worked to ensure that d.h.s. maintains a strong relationship with all of our tribal partners. from a personal perspective do you have any experience working with tribal leaders, either in past roles u.s. attorney or in your current position? >> thank you, senator. i do. when i was the united states attorney, i worked with tribal

leaders to address some of the challenges that they had in the central district of california with respect to enforcement issues on reservations as well as certain civil matters with respect specifically in california issues legal issues involving indian gaming. i have worked extensively with tribal leaders during my tenure in the united states attorney's office and i take great pride in the collaboration and close working relationship that i was able to achieve with them. and if confirmed, i would carry that collaborative teamwork approach to my duties as deputy secretary. >> i appreciate that. and i may have some more questions for the record. i appreciate the chairman at this late time of me coming in and allowing me to ask a few questions. i will go back and just say i wish you the best. we need good people in the department of homeland security. we need people who can carry

out this task because it's an important one. hopefully what has gone on here today will stop and we will get you confirmed and get you back to work. >> thank you very much, senator. it would be an honor. > thank you. my staff has given me a little information. i asked you earlier to give us eb 5101 and i think i said my understanding it was created in 1992. actually it was created in 1990 when we were trying to -- just going into recession and trying to make sure it was short-lived. i think the program in 1993 was modified, i think congress added at that time something called the immigrant investor pilot program in order to encourage immigrant investments through designated regional centers.

i don't recall hearing much about that designated region nal centers in 93. i had just become governor of my state but we have all heard of enterprise zones. hen i hear this, i liken it to an enterprise zone. but just talk to us about designated regional centers and ow do they work? give us a little discussion on hat, please. >> that pilot program was reauthorized i believe last year. i'm not quite certain but it was reautsdz liesed. >> my notes here say that -- in 2012.

the word pilot was removed from the 20-year-old program to rovide a 3-year-old model. that was about a year ago. >> the regional center is an area of economic activity in which commercial enterprise ks be developed into which foreign capital can be invested in the eb 5 program and the jobs can be created in that area of economic activity. the popularity of the program years. eased over the >> does it have anything to do

with the fact that we were in the worst recession and this was an effort to try to draw capital into this country? >> outside reports have the uded that indeed program and the programs within it have grown over the last few years because capital has been difficult to raise in a challenging economy. there is a great deal of interest amongst individuals in other countries to imgrate to the united states and those who can afford it five the program to be a valuable means of doing so. > so the rationale here is they're investors and entrepreneurs in other countries that have maybe good ideas, they have some money and we're looking for somebody who will invest capital here for job creation rather than compete with those in another country? s that close to correct?

that is mr. chairman. that is either a minimum of 500,000 or 1 million depending on where the center is located. an area of acutely high unemployment or otherwise. they will invest their capital that requisite amount of in a region nal center. why it has grown is because when the investment is in a regional center as opposed to a new commercial enterprise outside of a regional center, the job creation can be

computed to include not only direct job creation but ndirect. but jobs created as a result of a new commercial enterprise. that are attributeable to the regional center then that is attribute tabble to the capital and counts to the job creation requirement. and this is where the complex come ic methodologies into play. and if one presented those to me even though i practiced as a lawyer for many years, i would not know how to adjudicate

hem. there's one very additional point that i would like to make and that is the following. that with growth in a program comes the potential for challenges to the programs integrity. seen cases where individuals have sought to make misrepresentation to avail themselves of the program for which they are not qualified or worst yet individuals who seek to avail themselves of entry into this country through the eb 5 program when they very well may pose a threat to this country. >> what do you do? >> we've done a great deal because this is our highest

priority to help secure our nation and to protegget the integrity of the system of which we are guardians. we have reached out to the law enforcement and intelligence communities and we have developed stronger and closer working relationships. we have increased the staffing of our personnel. we are embeding them in the eb 5 program. have reached out to the securities and exchange commission to make sure that security laws are uphe would. i've reached out to the highest levels of the securities and exchange commission to make sure that they brought their efforts and expertise to this important area. we were substantial cooperators and partners in the first successful s.e.c. action against a program in chicago llinois.

>> how do these centers become create snd are there are a lot of them? >> i don't know the number. >> would it be more than a hundred? >> i don't want to speculate but i can certainly provide that information. >> if you would. how are they created? >> from my understanding, because i sit as the director and don't get involved in seeing the actual applications and petition that is business but people ves, develop ideas. >> people being american business people? > here in the united states. they develop business plans for

hose commercial enterprises. ones those are outlined and begin to al, they attract investors. i don't know if they begin before we approve them or not but they develop their business plans, they begin to excute, they present their plans to us, and if we approve them as regional center designations, they proceed from there. knowing my colleagues and me, if i knew somebody wanted to create jobs, and one of these centers in order to increase employment opportunities in my state, i would probably be interested in seeing that succeed.

you mentioned a number of my colleagues. i don't think i've reached out to you but a number do call your office. nd in some cases you and say say there's this toferte create employment activity in my state and probably don't call to say you're doing a great job. maybe they do but they probably call to raise concerns. would you talk about the nature f concerns that emy colleagues might raise? and the concerns someone might say like it's taking too long or i don't like your decision? just share with us the nature f the those conversations. >> we receive calls from members of congress from both

sides more often than weekly and more often than one a week. i assure you. in the nterest is infusion of capital to a particular jurisdiction and the creation of jobs for u.s. workers in that jurisdiction. a need and a priority that is acutely held in times of economic challenge. the complaints vary widely, one that we most often here is we are taking too long. we have goals of approximately six months but we do not meet that goal. rarely, and sometimes the time extend longer. sometimes, for very important and valid reasons, making sure we are right according to the laws and the facts, making sure the integrity of the application is a short, making

sure there is not a threat to our security. we are being inconsistent in our adjudications. we are being untimely. we are not adhering to the law. we are not following our established policies. the complaints are diverse. there was one very noticeable -- notable complaint that i ecall because it spoke -- it accused us of being unfair. that we had made decisions in the case and then we changed our minds. the concerns of members of congress was that that was inequitable, that is this developers relied on our earlier decisions and for us to change course midstream seemed inequitable. i looked into that.

consistent with the principles to which i referred at the outset of the hearing, if something speaks of a difficult legal policy challenged the agency confronts, i looked into the matter around the table with my colleagues and agreed with concern. my colleagues asked me to get involved in the resolution of the matter and i did and i made a decision that was going in the wrong direction and made it right in the spirit of the letter and the law and the policies we have sworn to uphold. the temperature of the complaints we receive are equally diverse. neither the 10th -- temperature nor the author of the complaint are material to our decision-making.

the decision-making is based on the law and the facts. when i get involved with an issue, like the one to which i ust referred, my guiding principle is nobody -- no different than the guiding principle of the adjudicator and the one i articulated and emphasized throughout my tenure. we do with the law and the facts require and nothing less and nothing more. -- and nothing otherwise. >> my understanding is among the many people establishing one of these designated regional centers was jeremy, who is interested in bringing green technology to the state of virginia. also ended up doing it in gulf coast states. one of the reasons senator andrew was here was because apparently she and part of the

economic developments in her state, they are interested in creating a center, that is my understanding, and would like to encourage that. could you share if there is any medication you have with respect to create one center in virginia or maybe one in the olf course, any meetings you have or telephone conversations you recall? >> i was asked to attend a meeting so i can hear in person his complaints. >> what was that? >> quite some time ago. heard the complaints and that was the extent of the interaction. i should say that i engaged ith the public very often.

i meet with associations, groups, individuals, representatives, and the like, who voiced concerns, who prays us when we do our jobs well. one of my areas i focus on are o increase and -- to the -- so we are transparent not only to the public we serve but to be media, whose responsibility it is in part to hold us accountable. and, of course, to this committee, the committees of oversight, to which we are held accountable. i heard the complaints and i moved on with my work. >> did you hear from them again after the meeting? >> i recall -- let me back up. did you come back to your

agency and say, after leaving with him and the other folks, let's do things differently and change our course in this meeting? how did you react once you got up to work? >> the answer to your question is absolutely not. i do remember returning to the office and complaining about the fact i had to hear complaints. that is all. >> you are probably used to hearing complaints for his. there are probably a lot of them. >> yes. my mantra for the workforce is the following. do not shrink from criticism. just worked very hard to not deserve it. >> ok. the basic question here, for those who are dealing with the sources, anonymous assertions, is a question of whether you

have laced your hands on the scales of justice whether it is somehow, in this case in the golf course -- gulf coast or other places, that you have placed her hands on the scales of justice to change the decision. would you respond to that on the record? >> mr. chairman, for 12 years as a federal prosecutor, i served as an officer in the court. i have not changed my approach. i continue to hold myself up as an officer of the court. i am worth the law. i enforce the law based on the facts. i do not put my finger on the scale of justice. the scale of justice is based on the facts and the law and nothing else.

i should say the gulf coast complained in 2011, 2 thousand 12, and they continue to complain in 2013. we will follow the law and administer the law based on the prints bulls which i articulated and nothing less and nothing otherwise. i will say, for someone to be accused of tipping the scales in a 2013, referred a -- referring to 2000 -- referring to security, based on a question of private integrity, seems a bit contradictory. it is very difficult to have allegations swirling and not have an opportunity to address them. i am eager to be interviewed by the inspector general's office. i wish i had been interviewed earlier.

>> i was reacting to the inspector general and his department. two years since we have had that. one last question, before we close, and then give you a short opportunity to make a closing statement. my role of governor, every month, i meet with my legal counsel and we go over pardon request. my legal counsel would make recommendations and we go hrough the case. my staff would reach out to other people and ask them questions. recommended for a pardon by the board of pardons. e would ask for input. one of my colleagues, a question for a pardon, being

considered by president lyndon. the president is about to leave office. there is a rush. our understanding is that someone reached out to you. can you share that? >> most certainly. thank you for the opportunity. yes. that question was posed to me when i appeared before the judiciary committee in the nited states senate. the white house reached out for me when i was the state attorney for the district of california and asked for whether i supported -- it had been prosecuted in the district of minnesota.

my fellow united states attorney, and i of form -- informed them i did not know the facts of the case and that deference should be afforded on he federal prosecutor. > thank you. i want to give you an opportunity to make a short statement. thank you for your testimony today. >> thank you for the privilege of appearing before you and distinguished members of the community. let me say one of the greatest sources of honor i have had is to serve alongside the men and women of united dates citizenship. it is extraordinarily dedicated nd talented. it has been equally an honor to

serve as an assistant united states -- united states attorney. i love public service. i love aspiring to fulfill the highest ideals of public service. i love being an officer of the court. i love being a guardian of the law. i love the privilege and honor of always doing the right thing. i also love my family, i love my two brothers, and they are here, and i love the family they are representing air. i adored my parents. my parents were individuals of unflinching integrity and thics and honor. i have executed my public service responsibilities in a way of which they would be proud.

if i have the privilege of being confirmed as the deputy secretary of homeland security, i will continue to do so. thank you. >> thank you for those words. when we met earlier this week, we talked a little bit about your parents. you said these words, and i will paraphrase. this is what you said. "should i live my life to honor my parents? looking down, my guess is they are very proud of their three sons. it was thomas jefferson who used to say, it will know the truth, they will not make a mistake. the purpose for this hearing is to try try to ensure we get to the truth. that we do not hear about rumor and innuendo and on confidential sources, anonymous sources, investigations that take not just weeks, but months, now almost a year.

we have to get to the truth. you helped us. i am disappointed some of our colleagues could not join us today. my hope is a will have an opportunity to consider what has happened today and what we have learned. i also hope the acting inspector general or whoever is in charge these days, homeland security, i hope they put their foot on the accelerator and get this done. justice delayed is justice enied. we have a department without a confirmed secretary and will soon be without a secretary. we need to address it. this one perhaps more than any needs strong leadership. hey have that in you and others with whom you have served.

they will need it in the months and years to come as we deal with cyber attacks occurring at this very moment, terror attacks which are being planned, challenges being able to implement it, and with god knows how many other challenges are before us. the last thing i would say is a word on integrity. one of my favorite sayings, integrity, if you have got it, nothing else matters. integrity, if you do not have it, nothing else matters. it sounds to me that your parents infuse in you and your brothers a fair amount of integrity. we appreciate that. we appreciate your presence here. we will reopen until noon tomorrow. this mission of statements and questions, for the record, and this hearing is adjourned. thank you. > thank you.

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>> on the other side of the capitol, the u.s. house is out. they're going to be coming back in tuesday, 12:00 p.m. eastern time for general speeches start legislative work at 2:00. and be working next week on transportation and housing and urban development spending for he next fiscal year.

we'll get more of a look in-depth of capitol hill on the next "washington journal" with gale russell chalic of the christian science monitor takes a look at the week ahead for congress and it's the last week efore the august recess.

>> they would come up as close as they could and then go into an assault which meant that they would send squads armed with guns and they would come charging in at our first lines and it didn't matter how many casualties they took those who a down were followed by new wave. many of the new wave had no weapons. they just picked it up from hose who had been hit. by force of numbers trying to ush us out of our positions. >> commemorating the 60th anniversary sunday at 3:00 p.m. eastern. one veteran eye witness account followed at 5:00 by president

obama and chuck hagel pay tribute at the memorial to the mericans who served. > next a look at the future of coal. environmental groups, coal industry and acting assistant nergy secretary all testify. >> good morning. welcome to today's hearing entitled the future of coal uletliting america's abandon nt energy resources and now the subcommittee will come to order. in front of you are packets of

today's witness panel. i now recognize myself for a 5-minute opening statement and then turn over to my ranking ember. coal is of critical importance to the united states. from the first power plant in 1892 through today coal has led the way in enabling the enormous improvements to america's health and well being. it remains our leading source of affordable and reliable electricity providing a foundation for our security while directly supporting hundreds of thousands of jobs empowering industrial facility that is produce the goods we too often take for granted so middle and lower income americans can enjoy a higher standard of living and make

their hard earned dollars go farther. rarely, however, has such a beneficial resource been under such hostile attack adding injury to insult this attack is being led by our own president. in 2008 president obama boasted that his policies would necessarily bankrupt any company that wanted to build a coal-fired power plant. unfortunately this is one campaign promise the president appears determined to keep. not only are his e.p.a. power plant regulations prohibitting plants from being constructed, they are imposing massive costs on existing plants and forcing shutdowns. a factor has contributed to their expected closure. senior members have readily

acnonled the negative impacts of these policies. for example, former doe secretary jim wood estimated hat up to e.p.a. rules could force -- excuse me. rules could force up to 70 giga watts of coal off line adding, number one, electric rates are going to go up, whether or not construction jobs are create -- i think there are virtually no manufacturing jobs that are likely to be created from the replacement of coal. three, transmission grid stability is likely to emerge both because of the shutdown and because of the intermittentsy of renewables. e.p.a. is just one agency leading the war on coal. discussed the department of the interior's anti-coal regulations that would restrict

coal mining instri. incredibly, the president is even attempting to limit the global use of coal by restricting international aid for it in developing countries. thus limiting access to the primary means through which those country citizens escape poverty. even if the president were successful in his quest to eliminate all u.s. coal-fired power plants any reductions in projected global warming would more than be overtaken by global emission growth. china continues to build a coal plant a week. and global coal demand is projected to grow significantly over the next half century regardless of u.s. domestic policy. the purpose of today's hearing and the challenge before us is to apply the economic and global realities to improve the focus and prioritization of

doe's coal-related activities. to this end i look forward to hearing more about the recently developed coal rd roadmap and how it could help identify technology opportunities to increase efficiencies, reduce pollutants, and lower the cost of electricity. i'm also eager to examine in more detail the truly innovative research under way at the western resources nstitute in wyoming. serves as a model to advance development and use of abandon nt and affordable energy supplies. banks -- thanks. and i now yield to our ranking member for his opening statement. >> thank you. first scuke that ranking member johnson of the whole committee, that her opening statement be entered into the record. she will not be here today but

has been a leader in this area and i hope the committee will accept that. >> accepted. >> i also want to thank you for holding this hearing and the witness force their testimony today. i am pleased to welcome ms. judy greenwald from the center for climate and energy solution arks group that does a lot of work in texas, the home state of our full committee chairman, mr. smith, our ranking member, and my colleague on this ubcommittee. this morning, before i came over here, i had some students in my office just a part of a constituent thing that we do about a couple times a month. they asked where i was going and i told them i was going to this hearing on coal. these are students from my district. they kind of had this puzzling look on their face. i said yes that's right, coal. i know you're from california. we don't necessarily rely upon coal as our energy resource but

the rest of the country in many places does. and i explained to them that we're at this point right now in our country where we're in a struggle and we're trying to figure out where are we going to provide or how are we going to provide the future of our energy needs? and in california, we're proud that 20% of our electricity in 2009, the last study, was provided by renewables. so california has always seens ourselves as kind of leading the country forward and moving away from dirty fossil fuels that could hurt the environment and not be so good for our children or the future. but coal does have place to play and i'm interested, and have always agreed that the all of the above approach is the way we should go and wherever we can make it safe we could make it happen. i support the chair's interest in doing this. but i say that what the president talked about climate change was not a war on coal.

in fact, i saw it as the ops sit. i saw it as a retreat from coal. not a war on coal but an attempt for the united states to one day hopefully pull out of coal and pull closer to more renewable cleaner energy sources. that's what i support. and so -- but until that day comes i will continue to work with our chair to find a future of coal that is clean and good for our environment. we should not ignore the possibilitys available today as we continue to move and strie for the fuels of tomorrow. and programs like the national enhanced oil recovery initiative demonstrate their innovative capabilities of a ma tour coal industry that has long enjoyed special support. carbon cap tur and storage are examples of important technologies that will help ensure that our present reliance on coal will not hinder our ability to move towards a cleaner safer enviverpletvirmente. these also support americans working in these industries

today. even as we lay the foundation for emerging energy technology that will support the workforce of the future. i look forward to working with you on doing this, hearing from our witnesses and making progress in this area. with that, i yield back the balance of my time. >> thank you. not seen the chairman of the full committee mr. smith come in. we have accepted the statement of the ranking member of the full committee. if there are other members who wish to submit additional opening statements, your statements will be added to the record at this point. we'll begin then. i would like to introduce our witnesses and i will defer to mr. baseie when he arrived -- excellent. we'll -- your opportunity to represent -- to introduce ms. greenwald will be occurring shortly. our first witness today is

chris smith acting assistant secretary for fossil energy at the department of energy. mr. smith was appointed in 2009 as assist nth secretary for fossil energies office of oil and natural gas. prior to joining doe mr. smith spent 11 years with international oil companies focused on upstream business development and lng trading. r srked witness is ben yamagata. executive director at the coal utilization research council. he is also a partner where his practice encompasses energy environment and natural resources. he has served as counsel and staff director for the senate energy on energy research and development. ur third witness is done collins. mr. collins focuses on

transitioning applied research into technology. he has spent 29 years of experience in engineering, management and deploying of new technologies. and for today's final witness, judy greenwald. yield to the gentleman from texas. >> thank you. and before i introduce ms. greenwald i would be remiss if i did not mention that mr. smith is from fort worth, my hometown, in texas just outside of dallas. and happy to have him on the panel today. and i want to introduce judy. vice president for technology and innovation at the center for climate and energy solutions. she oversees very many important aspects of that organization including the analysis and promotion of innovation in the major sectors that contribute to climate

change including transportation electric power, buildings and industry. in addition to her 30 years of working on environmental and energy policy, she also has a strong texas connection and has worked with many organizations and individuals in our great state. and i want to welcome her here this morning. thank you. >> thank you. now we will go to our witnesses. as you may know, spoken testimony is limited to 5 minutes each. after which the members of the committee will have 5 minutes each to ask questions. we welcome you here today, mr. smith, you are recognized first to present your testimony. my favorite boot store in all of america is in fort worth and we're delighted to have a good

fort worth native amongst us. so you are now recognized for five minutes. >> thank you, chairwoman lummus. lots of fort worth references this morning. thank you ranking member and members of the subcommittee. and i appreciate this opportunity to discuss the department of energy's coal research and development activities. recently our secretary announced an $8 billion draft loan guarantee solicitation to promote the early development d deployment of innovative reduction. this plus what the obama administration has already committed to reflects the the president's commitment to an all of the above strategy that includes fossil fuels including clean coal. the department of energy continues to play a leadership role in the development of clean coal technology with the

focus on carbon capture and storage. the clean coal research program in partnership is focused on maximizing efficiency and environmental performance while minimizing the cost. in recent years the program has been restructured to focus on clean coal with carbon capture and sequestration. the program pursues the two major strategies. first capturing and storing greenhouse gases and improving the efficiency of fossil systems. the program is addressing the key challenges that confront the development and deployment of cleeb coal through research, monitoring, verification, and accounting technologies to ensure permanent storage and the development of advanced energy systems. to get there we're pursuing these three technical pathways. post, pre, and oxy combugs. researching these pathways is

exploring a wide range that coupled with advances and reductions in development of gasification turbines will help provide a technology base for the commercial deployment of technologies. on the storage side, we pursue project that is design protocols for the monitoring, verification, accounting, and account of of co2 storage in formations as well as simulating the behavior of geologically stored co2. our original partnerships are an essential component of that effort. the program is currently in the development phase during which testing involving at least 1 million tons will be implemented. several of these large-scaled tests are currently under way and one project safely injected over 3.6 million metric tons and is being monitored for safe and permanent storage. the department is implementing large scale projects for the

partnerships, the clean cowl power partnerships, and industrial carbon capture and storage program. we currently have eight major projects nationwide and there have been important advances in several of them. for example, the iccs project in illinois will demonstrate a system of ccs in an ethanol production plant. the project is under construction and nearly 50% complete. future jen 2.0 has completed phase one and phase two commenced this year. now focused on design and engineering. current demonstrations are focused on storing co2 including in enhanced oil recovery. enhanced oil recovery representing the most attractive option for co2 storage that could produce substantial oil. there are currently six projects employing co2, eor and

say lean storage underway across the united states. and the say lean storage projects, the will be subject to rigorous monitoring, verification and accounting procedures and technologies to ensure their safety and effectiveness. today, nearly 3 out of 4 coal-burning power plants in this country are equipped with technologies that can trace their roots back to the department of energy advanced coal technology program. the office of fossil energy's ongoing mission is to ensure that this important resource can be developed and utilized in a sensible way to strengthen our energy security. and i believe that our clean coal research program demonstrates that we have the critical experience, expertise, and capabilities and the track record to meet this challenge. that completes my prepared statement. i would be happy to answer any questions that you may have. >> thank you very much, mr. smith. i now recognize mr. yamagata to

present his testimony. >> madam chair, ranking member, members of the subcommittee, thank you for giving me the opportunity to make these comments today. i am specifically focused on the two subject areas you asked me to address by discussing four points. first, describing to you as you requested our coal technology development roadmap done in conjunction with the electric power research institute. let me say we conclude that had we can develop technologies that will achieve very high conversion efficiencies, moving electricity generation from today's high of 39 or 40% to nearly 50%. following the same roadmap agenda, will result in significant reductions in traditional air pollutants leading ultimately to coal fueled plants that really today are very clean but will be

nearly emissions free in the future. since the 1970s, the dough's coal rd program and the work of the national technology lab in collaboration with industry has, as the assistant secretary pointed out, now been installed on many of the coal units in his country with doe's support we are confident that technology will be the pathway to addressing emissions from the use of coal. second, you have asked, let me start by stating our general agreement with doe's rd let me start by stating the coalition.

this should not be the singular -- these advanced materials are key to increasing the efficiency of coal conversion to electricity. d.o.e. may focus more attention now on technologies that are formational. power ve beyond adding plant platforms that generate electricity that's now several decades old. the ace pace of technology development pursued by development fits the age profile of the country's existing coal

fleet. we might require a direct bid of coal units or the replacement of coal units by 2020's so technology can be used in the ater 20's or 30's. secondly, it will be less than was preferred. third, the added cost of environmental regulations, uncertainty over future regulations, and market competition from abundant natural gas that led to projections that perhaps 60 to 80 giggawatts, 20% to 25% of the existing fleet, will be retired in the next several years. anticipated co-2 requirements could dramatically increase the number of those requirements. it was commented that the

original co-2 requirements for coal plants requiring plants to meet a defined co-2 standard that can only be met with carbon technology that is not economic today, this is not a realistic tandard. it is predicated on technology not commercially available, our concerns remain. simply addressing the issue of technology will not make it work. secondly, it was -- there there is a three-part program being organized that is organized around the proposition that technology development is a positive pathway to the sustained and increased use of coal. but our program southbounding developed through the prism

defining benefits to the nation of coal use. both simultaneously confronting ever more stringent recommendations. in the medium term, we need to ensure that the d.o.d. regulations currently underway are successful. an additionalal program is needed to address world class coal generation with high efficiency and emission control standards and committing those projects to receipt fit with carbon technology when that technology is commercially available. also, we would recommend using coal enhancing technology. we are looking to accomplish our mid-term program without new government spending. progress is being made on this

front. finally, in the long term, government in partnership with industry, needs to pursue a targeted r & d program. thank you for your time. and sill take your questions. >> thank you, mr. yamagata. now recognize mr. collins for five minutes. donald collins from western research institute located in larmey, wyoming. wri i f of everyone at am interested in providing research & development. can use -- that utilizes

our nation's resources wisely. currently specializing in bio-energy, natural gas, emissions capture, that utilize our nation's resources wisely. currently specializing in bio-energy, natural gas, emissions capture, environmental monitoring, remediation, as technology, as well as coal power, gasification, and others.

i will summarize my testimony, and request my testimony be entered into the record. our few is that r & d work is successful when biotechnologies are employed to the betterment of our country.

the best current example is enhanced oil. solving our energy problems will require a portfolio of polings, and all must be pursued vigorously. we are focusing here on ch off 2 because it is the most important climate and energy solution that no one knows about. thank you for your questions.

i look forward to working with the subcommittee to advance this critical technology. greenwald, ands. thank you panel. if we would limit our questions to four minutes each, everybody in this room could get to ask questions before our vote series. if there is no objection to going with four minutes instead of five minutes, so ordered. the chair would now recognize -- the chair now recognizes herself or four minutes. thank you panel for being here. can you tell us which of these technologies is the most promising to improve energy utilization? >> yes. we have a process called right coal that will extract the water that in the past has been a missed opportunity.

especially out of wyoming, known for using sulfur emissions up the e water has gone smoke stack along with other emissions. by extracting that water from that, we can increase up the smoke stack along -- we see that as a second value of low-ranked coal that we're delivering water with the energy resource. e second technology is a chemoautotrophic bacterial operate in thell dark to consume co-2 and make a bio-crude oil that can be used to make sip thetic diesel fuel nd possibly views fuels like pharmaceutical that can turn carbon into an additional

economic resource by using it and that's our view do looking at recycling energy. >> thank you, mr. collins and mr. yama good. ata. i have a question about money loal guaranteees. they were directed to advance technologies and facilitate for cial application projects selected for further evaluation. to date, no loan guaranteees have been issued. to your knowledge, where are hey in the d.o.e. process? >> quite frankly, i don't know where they are. we know that the process from the start several years ago in ich d.o.e. actually accepted

hat process. the d.o.e. as we understand it that process at any point in time, but we don't know if that has happed happened with respect to those four projects. so the answer to that is we don't quite know where those rojects are. >> has d.o.e. taken any steps to secure this process? don't rk with the -- i have oversight over the loan guarantee program. i know that the projects selected in the first round focused on c.p.o. technologies.

we have recently announced an additional level of funding of $8 billion, which is another graurntees -- guarantees so that we can structure that in a way that has a higher probability of attracting the right funding so we can be successful in moving that forward. that is the process we're pushing forward in real time now. >> thank you, panel. now i yield four minutes to the mr. swalwell. >> it is pretty evident that

aour technologies are increasing climate change. would you agree with that or disagree with that? >> i agree most of our programs are focused on reducing greenhouse gas emissions. >> do you agree that climate change is brought about by human technology? > to a certain extent. >> mr. yamagata? >> we don't take a position on hat issue. it is not something we want to deal with. we want to deal with, if public policy determines this is an issue, we must have the technology to deal with it. >> how about you, mr. collins? do you agree or just agree? mr. cross, do you agree or

disagree? >> i would say you won't like my -- mr. collins, do you agree or disagree. >> there are many causes to climate change. it is not just man made. that statement is incomplete. so i cannot glee to that question. >> do you agree human activity has played a substantial role in climate change? >> the human activity releases a lot of energy into disagree? >> i would say the environment that adds to the warming. but we live in a carbon-rich world, you and i are carbon-based life forms. to live in a carbon free world seems like suicide. -- ms. greenwald, do you agree or disagree? >> i do agree. >> thank you. >> to introduce the coal-fired

power plants and increase their efficiency, where has the bulk of the information taken place? the private at level? >> thanks for the question. without making a direct comparison, i would say this is an area for which it is critical for government to be involved. we worked closely with private industry. we need to ensure that we have scientists that work in natural laboratories working along side the practitioners in the field in industry. that's always going to be a collaborative effort. that's the only way to move forward. >> have federal regulations incentivizing this? if so, what is that? >> if you look at the investments that we have made since the start of this administration, we have made a significant investment and major demonstrations.

this came from the recovery act. in every year of the president's budget we have made important significant investments in carbon caps that fund these programs and allow us to work together with industry. >> i'll yield back in the interests of allowing more uestions from my colleagues. >> i thank the , and now yield to the gentleman from texas. >> madam chairman, thank you for holding this important hearing. mr. smith, the environmental protection agency is moving forward with greenhouse gas regulations on both new and existing coal power plapts. the initial regulatory proposal, the e.p.a. rule-making assumed that c.p.s. technology would be commercially available within 10 years of plant initiating perations.

do you agree this proposed rule coal ffectively ban plants without c.p.s.? >> i can't comment on the rule in that it has not been published and in written form at the moment. what i can say, is the department of energy had an important role in shaping that, and it is important we work with e.p.a. and industry to make sure these technologies are commercially ready and are being developed, that we are making the right investments and that these industries are being created here in the united states so we are creating that opportunity here for our country. that's the role that the department of energy plays in hat process. >> would you agree that for c.p.s. to be part of this, a lot

of the old issues will have to be resolved? >> i agree there are a mere yad need yad of issues that to be addressed. >> with that in mind, what is the earliest time frame you can state with confidence that c.p.s. will be commercially available for utility scale? >> i would state that currently, we know an awful lot about how to capture co-2 and we know a lot about how to capture it. we are working to push these com ps down and we are making it more and more available for road fuel release. i can't make a projection what exactly that is going to look like, but that's what we're going through now and we are making important strides in real time. >> i guess the question is back to where we started. , we can't get to that point

are we keeping new power plants from being brought online? in particular, closing existing ones? i think the chairwoman made some statistics of how many plants had been closed. the vagueness of your answer leads me to believe that those technologies would be in place and that would preclude bringing those online, wouldn't it? >> coal is under pressure from a number of factors. including the natural gas, and natural gas mass leap-frogged coal in a lot of areas. that's a challenge. it makes it difficult for these plan plants to move forward. we're making sure we only move on to sequestration, but to

prove derls to ensure that particular important part of our energy nix continues to be used in the future. -- this is research activity. they don't just address any research topic. but we are making investments to make sure we are moving that forward. is >> would it be a true statement that this administration is not a fan of coal? >> i would say cat good morning, americaly that is not -- i would say categorically, that is not a correct statement. since this administration has been in office, we have made significant investments to ensure the important source of domestic energy, coal, continues to be part of the clean energy economy of the future. when we say "all of the above"

that's not a slogan. it is an investment this administration has made over the past four years. i actually would not agree with that comment, respectfully, mr. congressman. >> i thank the gentleman from texas. i would yield to another gentleman from texas. i had t-shirts made that lummis rhymes with hummus. o i suggest the t-shirt route. is easy" said "veasey before. [laughter] i want to ask about important storage. for those of that aren't from

texas, this is an important geographic area as it relates to energy. >> and represented by the greatest congressman in the world. [laughter] >> that would be mr. webber. ms. greenwald, please. >> we were in port arthur recently. we had officials from the u.s. and canada talking about co-2 and its specific carbon capture and storage. while we were there we did a visit to the site facility in port arthur, texas. that's a facility doing carbon capture. they are using co-2 to send it to a pipeline to be used for co-2. it is really making a difference using head-on carbon capture and also advancing our increasing

u.s. oil production. so it is a great project. it is getting d.o.e. funding. so that's about a great project. we just got that up and running a few months ago. it is also a member of our initiative group. they have been active in that as ell. let me ask you about c.c. s. how would you compare the need to support c.c.s. with the need to support other nuclear energy r nuclear power? this is something we don't talk about enough. if we want to be serious about t, we obviously need to.

we think about all of these above clean. we newable, efficiency, carbon torage with gas or coal. all the most promising technologies we should be using in the marketplace. we recommend we pursue a portfolio approach and make sure we have a range of technologies that are available. for us, it is all about performance. if any particular fuel or can give the environmental performance that we need, that's what we want to achieve. the reason we have been focusing on co-2 today, and recently, is that that's an example of the solution that a lot of people don't know about. but we due support looking across the board and making sure

we are placing that in the most promising technologies in the marketplace and encouraging the use of the cleanest and most energy-beneficial projects in the marketplace. >> thank you, ms. greenwald. thank you very much, madam. i yield back the balance of my time. > thank you, mr. veasey. and the chair recognizes the entleman from kentucky, mr. ma ssey. i want to tell you, i have "a friend of coal" on my car, and it truly is a friend of coal, because it is powered by coal. this gives us an opportunity to have energy independence and reduces us -- releases us from some of these foreign entanglements.

plant tly heard that the they started would be illegal to build because it doesn't comply with the administration's rules that will be prom gated. mr. smith, could you tell me, is hat correct? can you tell me, would it be impossible to build a plant like this today? >> i'm not familiar with the plant and the details. >> would it be possible to build a coal plant without c.c.s. technology as it is written today? >> i really can't answer the

questions that are specific to regulation operates. >> ok. i'll assume they were correct in stating that. because we are determining policy, we can't base it on the opinions of an engineer. i believe without fax facts we have opinions. i am looking for facts today. if the earth has warmed because of human activity, can you tell me what percentage was due to resource causes? >> what i can say, without getting into a detailed scientific discussion -- >> i'm just looking at a percentage. >> we do believe that

anthropogenic greenhouse gases are an important part of global warming, and it is something we need to cut down on. >> that's an opinion. what percentage would you ply to anthropogenic findings? >> i won't give you a review of peer review written -- we can certainly provide your office with more facts. >> every time someone from the d.o.e. comes here, we ask this question, and we have never gotten an answer to that question. this is an easier exercise. what is the percent cost increase in coal-produced electricity that you associate with c.c.s. technology? >> well, right now we're looking at three separate traun muches n the way we im-- traunches. >> if it was implemented, what

would be the additional cost? >> it would depend on the state of technology at the point of implementation. >> i think you said 20% to 35%. would that be a reasonable range? >> yes. >> if a middle class family had is what -- tion >> that would be $100. >> their electric bill would go from $200 to $100. does the administration -- does will .e. care that this push some people below the living standard and that more people may have to go on public sistance because of prom gating the carbon captured technology? >> the point -- the position they take on this is that these will be ologies that critical to be developed. ours job is to make sure they

are done in a way that's most cost-effective, that minimizes the impact to consumers, that ensures clean coal has a part in the future, and ensures we have the maximum amount of energy diversity for families throughout the u.s. can't state knees numbers? >> if we don't move forward on these technologies, we will not have a pathway to ensure coal is of the clean energy of the future. this is something we must do to nsure we keep this important energy source. >> thank you. i yield back. >> the chair now recognizes the gentleman from california. madam commare.

-- chair. i want to explore a little more about the competitiveness of coalvis-a-vis natural gas. >> thanks for the madam commare. -- chair. i want to explore a little more about the competitiveness of coalvis-a-vis natural gas. >> thanks for the question. it has had a pretty large impact. if we look at the availability of natural gas, the geographic emit center, when i grew up there, there was no gas production, or little, and now it is an absolute boon. partly because we're natural -- because natural gas were creeping into double digits, as you and now about $2. if you have that large decrease it gives another oppings for american consumers, and we think that's generally positive.

it seems the market influences have more to do with coal struggling than administration policies. >> it is part of working too ensure we are working together to make sure coal remains relevant. >> it is probably about coal vs. natural gas. what makes natural gas a more compelling source of energy than the fossil fuel side? >> i would dispute "more compelling" because we think energy diversity is important and we want to make sure we're using all of our energy resources. right now it is much more affordable than it was. >> thank you for that. it seems to me, just looking at the administration's policies rvings that the expenditures that its seeking to make, it looks like it is trying to make

coal competitive. i would characterize the administration policies as not a war on coal, but an attempt to make coal competitive. it is something in our back pocket that we can develop potentially in the future for energy dependence. coal creates a lot of jobs and energy independence. we believe the economy of the future will be a carbon constrained world. the only way we can ensure energy security is to move forward with research and development. the problem with e we have with coal, it is a major emitter of co-2. that's the challenge we have to rise to, and that is part of the

collabor forationrd on these technologies. >> thank you for your comment. i think the policy -- administration's pog policy is really an attempt to be supportive of coal and keep it as a viable source of energy in the future. it is an important source of fuel in our country and helps us with energy independence and it does contribute to the "all of the above" strategy. >> i think that would be an accurate character zation -- characterization. of what our policy is. >> i yield to the gentleman. >> thank you. i saw you down in port arthur. you said the administration is not waging a war on coal. let me ask you about that question, the future of coal, as

it relates to coal technologies. the president has said he would bankrupt anyone who tried to develop new coal technology. now the president says he aggressively intends to pursue regulations. last month, one of his key advisors said "politically the white house is hesitant to say they are having a war on coal. on the other hand, a war on coal is regulations. what's needed." that's one of the president's advisors. what's

arbon regulations, on new coal plapts, carbon regulations on existing coal plants. e.p.a. estimated compliance costs of $10 billion with a "b" dollars. air control rule. rules for greenhouse gas emissions. regulations, section 316-b, and the list goes on and on and on. limb regulations and limitations costing between $200 and $900 million per year. new e.p.a. regional haze requirements. ow regional mountaintop mining rules. forthcoming owe zone regulations which are projected to be the

most costly regulations in the u.s. government, estimated to cost $90 billion with a "b" dollars annually. we say the president's administration, with all due respect to my colleague from california, says the gas market has waged a war on coal, that's a free market. the consumers will respond by buying those products. but it is a fact, in my opinion, that this administration has a war on coal. in fact, if you take video out on him, he is campaigning, and he says under his electricity plan electricity prices would skyrocket. i'm out of time. you say your mission is to make sure america has plenty of affordable energy. you say the future of a carbon constrained world. don't you think given what i just said is happening, the only thing that's going to be constrained is america's economy and our competitiveness?

>> thank you, congressman. i'll try to comment. >> you have lots of time, 28 seconds. >> last time i saw you in port arthur we were doing a ribbon cutting project. i think -- we can talk about who unattributed article, but if you look at what we have done with the department of energy p. in particular our research and development projects, we are taking concrete actions to ensure that coal remains relevant. the market forces are going to do what they do. certainly the emergence of natural gas has had a big im-- mpact on coal. he technological work at shell has pushed natural gas prices

down. we will continue to make sure coal has a role. >> thank you. the gentleman's time has expired. >> i yield back. >> the chair recognizes mr. hall of chairman emeritus of this committee. >> thank you, madam chairman, and thank you yesterday for your good question and answer. those e.p.a. people here, i think you put them in their lace properly. i think it was mr. smith who id who he thought -- causation. we were told it was going to be halfway or 12 feet up on the statue of liberty, and it is less than a foot up on the statue of liberty. all kinds of warnings and people

coming before us being paid a lot to come here to testify. that's scaring us to death. just like going to the moon. we're going to go to the moon, but we're not going to go to the moon until people can go to the grocery store. on global warming, we are not getting any help from hardly anyone in the world on that p we from what has been done, we don't know if people caused it or not. we spent $34 billion to $38 billion up to the small steps that have been taken. i think before you answer yes to something like that, you ought to know the causation and what it cost the taxpayers to get what they have there. i hope the record will reflect thafment ms. greenwald, i have known you and served with you. i can't remember if you were a republican or democrat when you

were here. >> do i have to say? > no, you don't have to. i just remember that we worked on the charlie sheen clean air act amendment and the policy act, and since then we passed 205 policy act, and you've seen the development of new chnologies -- what are the most important methods of advancing technology efficiencies. we have president obama with his mandates. he doesn't have just a war on coal, he has a war on energy. can you give me a statement with regard to that. >> we believe that to get clean energy forces into the marketplace requires a combination of policies and making sure the market can work. that's why we advocate for flexible policies and incentives

targets and an set requirements, but you leave to the private sector as much as possible the ability to make choices, so that they pick the best technologies that can meet our environmental needs. >> we need to be aware of it, but we need to be reasonable with respect to know people that ought to be assisting us. have you answered my question? you have. i have 37 more seconds to go here. i'm from texas, and i'm a fossil fuels and oil and gas guy, but i've seen coal operations make significant investments in advancing coal clean air emissions controls and employing advanced technology, so i'm eavy on coal, and i think that

we really -- this is an important meeting, and i thank service.u for your i yield back the balance of my time. thank you, madam chairman. thank you for your good work. > thank you very much. >> we made it. both have been on the floor of the house. we made it. we thank the witnesses so much for your valuable testimony and the members for their questions. members of the committee may have additional questions for we will ask you to respond to those in writing. the record will remain open for two additional weeks for additional comments and questions. we will look forward to your responses to those questions. so you may be receiving shortly.

before we adjourn, i ask unanimous consent to enter into the record two items. first a letter signed by 23 members of congress, including me to president obama on july 22, expressing our concern about the implementation of the new source performance standards fecting greenhouse gas emissions for new and existing power plants. secondly, two charts from d.o.e.'s international energy outlet which was just released this morning showing the forecast for global coal demend demand which is projected to in the next 20 years. without objection so ordered. obviously those charts indicate that the subject is tremendously demanding. and the chart that exists for technology that you espoused in your technology, we look forward to your continued work, mr. yamagata, as well as the department of energy's future work on fossil technologies. the witnesses are excused.

with our deep gratitude, and this hearing is adjourned.

>> congress created a new caucus this caucus nd and trayvoni mfume martin's father. we will be showing thoo caucus tonight on c-span.

>> what i want to do is go into pop culture and how it impacts sports and other arenas. so it is not just pop culture. we have sports biography, we ve some history of media entities, newspaper history. so it is a range of things. when i formulated the site, i purposefully cast a wide net to see what would work. >> more with jack doyle sunday at 8:00 on c-span's "q & a." >> the s.e.c. has an ongoing court case against former

employee. hs his is about 30 minutes. >> let's start with the basics. could you tell us first and foremost who he is and why the s.e.c. is interested in him? >> you bet. in 2007, he was a 28-year-old trader at goldman sachs.

the s.e.c. sued him as well because of an investment he structured that was backed by ub prime mort bonts. -- bonds that went sour in the next couple years, as a lot of investments did. fourre c. claims that isleads investors in the deal. about the role played by a u.s. hedge fund that shorted the u.s. housing market in 2006 and 2007. according to the s.e.c., what fourre did was not disclose to the investors that they helped take out the portfolio of investments behind this vehicle hat was called abicus.

>> so mr. paulson wrote the investments, but mr. paulson also wanted those investments to fail? >> that's right. paulson made a $1 million bet against these investments. he shorted abicus. , paulson &t the time company was making massive bets against the u.s. housing market. the s.e.c. claims that this was securities fraud. that having paulson sclect select the assets that he -- they would then bet against was unfair to investors, and that was responsible for the investors losing about a billion dollars. the way the s.e.c. tells us, it is kind of like you are playing poker against someone and you get to pick some of the cards in his hand, but he doesn't know about it. the s.e.c. claims this investment was designed to fail from the beginning. paulson and company has not been charged with any wrongdoing.

john paulson, the billionaire who runs the hedge fund has not been charged with any wrong ing, but the s.e.c. sued ldman and fabrice tourre in 2007. goldman settled for a record amount of money at the time. and fabrice went to trial with the case. we're two weeks into the trial right now and we have about a week to go. >> so is fabrice tourre a big fish in this case? >> he is not a big fish. he was a vice president at goldman. a trader on the products group. he was only 28 years old. he supervised nobody. he worked in a vast trading floor with people sitting at ither elbow. he was in charge of the --

tutting together the marketing materials and assembling the 90 residential -- sub prime residential securities that were behind this abicus investment. >> was -- what is his defense in a nuthshell? >> he clims he just didn't do it. he claims he didn't lie about his role in the investment to anyone. he also said that any of the investors in abicus, that it was ompletely transparent. these are sophisticated

investors. a big german bank, a big dutch bank. ended up oldman sachs with a long position. tourre is s fabrice concerned, the s.e.c. is bringing the case against him, he says he didn't do it. at least several times mr. tourre was asked to clarify how much paulson was able to put into this investment, that by him saying or not saying things was kind of misrepresenting to them as far as paulson's intent to investment in the first place? >> that is right. about s been testimony

many the case against abicus. the s.e.c. says they misled them in the equity of the investment, a point t was making that the housing market was -- bet that the housing market was doing well. in fact, it was doing the opposite bet. that's how investors were isled. memories fade, and there hasn't been anyone that has been able to come up to the stand and say "fabrice tourre" lied to me about this. the case is based on tourre's failure to return an e-mail that

a.c.a. thought paulson was long than transaction rather aking a massive short bet.

>> the viewers probably know we have a new s.e.c. commissioner, barry joe white who spent a lot of time as the chief chief prosecutor in manhattan. -- i of people say that know for a fact these a tough prosecutor. she's prosecuted a lot of white collar cases and lots of terrorism cases, including the 1993 world trade center bombing. a lot of people say she has sent signals, including the recent case against s.e.c. capital, which indicate she may be more aggressive in enforcement than the s.e.c. has been in the past. >> how is the s.e.c. doing in presenting its case?

>> it is an interesting case. we have had a lot of jargon in the case. we have had a lot of embarrassing e-mails from fabrice tourre, that he wrote back to his girlfriend as he was working late nights in 2007 putting abicus together. the jury has had a little trouble, it appears, grazzping some of the financial questions and some of the esoteric wall street language that has come up n the trial. as a result we have had jurors from time to time appearing distracted and on several occasions, jurors appearing to be dozing off. >> on any transaction, stock exchange, someone is buying and someone is selling. the person is selling things that may go up or down.

so different people are taking different positions. n this case is there any suggestion that goldman sachs held a fishery obligation to the buyers? or was it up to the sophisticated investor to figure out what exactly was in the bonds they were buying for those mortgages? guest: that's an excellent question. in this case, you know, as you said, these are sophisticated they were supposed to be looking out for themselves, but goldman and tourre had a duty and obligation not to lie to them. so if it can be proven that they lied about something material to their investment decision, that's fraud, and tourre will be found liable.

it's a sism case, so he doesn't have to worry about going to prison as he would in a criminal case. but he is facing possible monetary -- you know, buying lifetime ban

from the securities and exchange. host: this is a point made by one viewer, "nobody was forced or fooled." >> that's the point tourre was saying. not everybody knew the market was going to go into the tank and not everybody would be able to pay their mortgages. and as the previous caller mentioned, there were sophisticated investors on both sides of this. >> that's the point that tourre was saying. not everybody knew the market was going to tank and they would not be able to pay their mortgages. there is certainly some validity to that. from the securities and exchange. host: this is a point made by one viewer, "nobody was forced or fooled." >> that's the point tourre was saying. not everybody knew the market was going to go into the tank and not everybody would be able to pay their mortgages. and as the previous caller mentioned, there were sophisticated investors on both sides of this. >> that's the point that tourre was saying. not everybody knew the market was going to tank and they would not be able to pay their mortgages. there is certainly some validity to that. from the securities and exchange. host: this is a point made by one viewer, "nobody was forced or fooled." >> that's the point tourre was saying. not everybody knew the market was going to go into the tank and not everybody would be able to pay their mortgages. and as the previous caller mentioned, there were sophisticated investors on both sides of this. >> that's the point that tourre was saying. not everybody knew the market was going to tank and they would not be able to pay their mortgages.

there is certa to that. guest: that's an excellent point. they claimed they filed suit ainst 56 execute from the securities and exchange. host: this is a point made by one viewer, "nobody was forced or fooled." >> that's the point tourre was saying. not everybody knew the market was going to go into the tank and not everybody would be able to pay their mortgages. and as the previous caller mentioned, there were sophisticated investors on both sides of this. >> that's the point that tourre was saying. not everybody knew the market was going to tank and they would not be able to pay their mortgages. there is certainly some validity to that. guest: that's an excellent point. they claimed they filed suit against 56 execute differences at companies. but a lot of these companies are sort of smaller fish. individuals, the executives that were sued at places like citi and gold map were lower than fabrice tourre executives that were sued at places like citi and gold map were lower than fabrice tourre. caller: that's why they make the money they make is what we're told. we're also living in a society that we're told at the same time that my family deserves to pay a comparable rate because

these people are quote unquote job creators. in my opinion, we are also being told they can't be sent to jail because they are quote unquote job creators. and your question about the case? caller: we saw a complete lack of organization with the wall street protesters and things like that. but the bulk of america is tired of people that are in control of this amount of money. when are we finally going to see someone going to jail. and i'm not talking about three or four years here, i'm talking about for a long period of time so we can set a precedent so the people who are still there, who aren't in jail, can still take some accountability and think, you know, i might face 25 or 30 years in jailt. and your questi the case? caller: we saw a complete lack of organization with the wall street protesters and things like that. but the bulk of america is tired of people that are in control of this amount of money. when are we finally going to see someone going to jail. and i'm not talking about three or four years here, i'm talking about for a long period of time so we can set a precedent so the people who are still there, who aren't in jail, can still take some accountability and think, you know, i might face 25 or 30 years in jailt. and your questi the case? caller: we saw a complete lack of organization with the wall street protesters and things like that. but the bulk of america is tired of people that are in control of this amount you will guest: the caller makes a good

point. after the 2008 crisis, people lost their homes, their security, their jobs. there is a lot of anger out in. you see that reflected in the occupy movement. people are wondering why there hasn't been more prosecutions of op executives at some of the anks and some of the institutions they hold responsible for the 2008 crash. i talk to prosecutors, i talk to regulators a lot about this. the point that we are making and that we are observing in the last couple weeks, these cases institutions they hold responsible for the 2008 crash. i talk to prosecutors, i talk to gulators a lot about this. to extraordinarily difficult bring. they involve very complicated transactions. the s.e.c. in the tourre case, is flowing an a team of its own lawyers against it. there are four lawyers in court, including matthew martins, who is the s.e.c.'s top litigator. preparation go into this. lawyers have to master all of this evidence, reems and reems of evidence, thousands of e-mails. so it is really a strain on government. is a ne of these trials

strain on government resources. so they say, they have to pick their spots preferably. van moris, then why in this case target fabrice tourre? why not target paulson? guest: that is a good question. when you look aed way this particular case is structured, they are putting together aterials that look like tourre lied about paulson. paulson didn't go out and lie he just verified in the securities and made a lot of money from it. tourre is the person they can put a finger on and can say, here's a guy who we think lied to investors and, you know, who we think -- i think that's why

he's in the cross-hairs. host: who is paying for tourre's legal fees? >> goldman sachs. ey are also paying for his p.r. team, that is attending the trial. they are very interested in the case. this is an issue that goldman had hoped it would put behind it . back in july 2010 when it settled, but the trial in the past couple weeks is, you know, making headlines and bringing all of this back for people. host: next call from nick. he is is in pleasanton, alifornia. caller: i am absolutely amazed at how people really believe that the people republicanning all these broke radges didn't know what would happen with the

home mortgages. if they didn't know, why would hey put them in together and together junk bonds and selling them? they were doing that to protect themselves. in a home mortgage, you only get worth. home is you are not going to make a bundle of money. people running the broke radges controlling the stock market , they are telling companies how much money they have to make. if they make one penny, then they want to sell their stock. that's how they make their millions of dollars in bonuses. they are controlling it. nationals how they make the money is buying and selling the investment gets stuck

with it. host: caller, thank you. it guest: well, there were a lot of winners. most of us were losers in the 2008 crisis, but there were some winners. but you have to remember, there were some losers. a bet thes, they made housing market would go up, and they were burned. host: as far as people defending or at least testifying for mr. tourre and against him, who are hese people? guest: tourre is his own star witness. he spent about a day and a half on the stand telling his own story. he grew up in france. he was educated in france.

he got a degree from a top gineering school in paris, came to the united states, got a masters at stanford and started working for gommedman sachs. and engaged.vely he speaks with something of a french accent, so he can be a little bit difficult for the court reporter and the jurors to understand. getting up on the stand, he's doing his best to get across to jurors that, you know, he wasn't one of these masters of the universe. he was part of a big organization on a transaction that was reviewed by lots and you f other people know, he wasn't one of these masters of the universe. he was part of a big organization on a transaction that was reviewed by lots and

lots of other people at a place where they have lots of institutional control. and that he depended on those controls and those institutions to make sure there was nothing wrong with the transaction. on the other side, the s.e.c. has really made this a case about wall street greed. matthew martins, as i mentioned, is the lead s.e.c. lawyer. in his opening statement, he used the phrase, i think it was seven times, "wall street greed." so he is really trying to make this a case for the jurors about the gap of what people were doing on wall street and what hey were saying. if you read one of the e-mails that fabrice tourre was sending, and this was introduced -- this has actually been a big part of the trial is the e-mails that fabrice was sending to his girlfriend at the same time he was structuring some of these

deals. so this was sent by fabrice to 21, irlfriend on january 2007. this is at a time when he is working one of m his many late nights on the abicus deal, and he forwards to her an article sort of predicting doom to come in the financial markets. he writes "darling, you should take a look at this article. it is very insightful. leverage in the system. about to uilding is collapse any time now. survivor, thetial fabulous fab. standing in the middle of all of those highly leveraged trades. anyway, not feeling too guilty

about this. the real purpose of my job is to make capital markets more efficient and ultimately provide the u.s. consumer with more efficient ways to leverage and invest. o there is so there is a humble motive to my job. then he has an emoticon winky face." host: and the jurors' reaction to that? >> there has been some dry testimony to this trial. when tourre took the stand e-mails he sent to his rlfriend, they are like this one, they are a combination of pillow talk and he was compelled to read that e-mail and some of the other an and self-doubt from a 28-year-old writing his girlfriend at the time of stress . the jury paid very say they 's lawyers

don't matter. they are notes by a young man to girlfriend. the close s.e.c. claims that this shows his real thoughts at the you know, he was pretending that he was doing his best for his clients. host: to give you an idea of how many tourre is when he speaks, he testified for a senate subcommittee back in april of 2010. he talked about the s.e.c. lawsuit against him. here he is. >> goldman sachs had no economic motive to design the transaction to fail. the opposite.

when the securities referenced in ac-1 declining value, we lost money, too, including around $83 million, with respect to the retained and long position. host: interesting he pointed out they lost money too in this transaction. guest: that's right. have been cases where here banks packaged these assets into securities off to clients. this isn't really that case. anm this is a case where paulson and looking for a vehicle they could use to short the housing market. host: you are on with bob van voris of bloomberg. o ahead. caller: bob, you need to look at the commodities future modification act you know, he w pretending that he was doing his best for his clients. of decemb 2000 that made residential backed securities and

off hese derivatives balance sheet to the top 10 bank holding companies in america. this is the result of the crime. now, i just encourage you to go look at that in your work. because nobody brings that up. all of these have been structured from the people that structure them. i'm an expert witness. when the asset-backed securities were set up that was a new asset class. when i have a home at the value of $1 million, the first trust deed was converted from my the asset class

called a bond security. the end point is this -- the real estate property, the land property, cannot be taken from the home owner under a grant, under a grant deed. host: caller, let's let our guest respond. guest: knees are ultimate -- these are very much removed from mortgages and homes that are packaged into these securities. guest: knees are packaged into these securities. so at a certain point, there is a sense of unreality sometimes. host: so if we have had two weeks of testimony so far, what is expected in this final week as things wrap up? guest: we have one more week. as i say, fabrice tourre concluded his testimony. the ass some witnesses.

the defense may call robert paulson to the stand. we should find out monday if he's going to testify. the parties will wrap up probably on friday or next monday, and then the case will go just to the jury. we've got five women and four men on the jury. they include a former strock strock n episcopal broker, an episcopal priest, public school principal. it appears to be a pretty intelligent jury. but as i said before, there is a lot of jargon, and there is a real learning curve to figure his out. some of them seems seemed disconnected at times, so it is hard to tell how that will turn out. >> "washington journal" is live tomorrow morning. you can join us with your tweets as we talk with gail russell chaddock about the christian

science monitor. kim rubin also joins us with the institute for tax policy about detroit's bankruptcy and what happens when a city, town or county files for bankruptcy, and michael doran talks about the syrian civil war. in a few moments, the house energy and commerce subcommittee hearing on the upcoming spectrum auction that could repurchase broadcast spectrum for wireless communications. communicators" discussing the internet and how it has changed in the last 20 years. after that, we will continue our look with first ladies with a discussion about how first ladies in the modern era have approached their role as the president's spouse. >> i think it is interesting that the korean war in a sense

rt of helps the south korean beautify themselves in a way that was not there before. when the economists came down, they were brutal. a lot of the south koreans turned against the communists in the north. that sort of solidified, i think, their sense of national cohesion and identity. witted, it isving possible that the south probably would have -- it is possible that it would have disintegrated n its own. later, sheila warshi jager talks about a that never happe