[Senate Hearing 107-439]
[From the U.S. Government Publishing Office]
S. Hrg. 107-439
NOMINATION HEARING FOR NANCY S. BRYSON, GRACE DANIEL, FRED DAILEY,
AND THOMAS DORR
=======================================================================
HEARING
before the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MARCH 6, 2002
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
Available via the World Wide Web: http://www.agriculture.senate.gov
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WASHINGTON : 2003
79-500 PDF
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
TOM HARKIN, Iowa, Chairman
PATRICK J. LEAHY, Vermont RICHARD G. LUGAR, Indiana
KENT CONRAD, North Dakota JESSE HELMS, North Carolina
THOMAS A. DASCHLE, South Dakota THAD COCHRAN, Mississippi
MAX BAUCUS, Montana MITCH McCONNELL, Kentucky
BLANCHE L. LINCOLN, Arkansas PAT ROBERTS, Kansas
ZELL MILLER, Georgia PETER G. FITZGERALD, Illinois
DEBBIE A. STABENOW, Michigan CRAIG THOMAS, Wyoming
BEN NELSON, Nebraska WAYNE ALLARD, Colorado
MARK DAYTON, Minnesota TIM HUTCHINSON, Arkansas
PAUL DAVID WELLSTONE, Minnesota MICHEAL D. CRAPO, Idaho
Mark Halverson, Staff Director/Chief Counsel
David L. Johnson, Chief Counsel for the Minority
Robert E. Sturm, Chief Clerk
Keith Luse, Staff Director for the Minority
(ii)
C O N T E N T S
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Page
Hearing(s):
Nomination Hearing for Nancy S. Bryson, Grace Daniel, Fred
Dailey, and Thomas Dorr........................................ 01
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Wednesday, March 6, 2002
STATEMENTS PRESENTED BY SENATORS
Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee
on Agriculture, Nutrition, and Forestry........................ 01
Lugar, Hon. Richard, a U.S. Senator from Indiana, Ranking Member,
Committee on Agriculture, Nutrition, and Forestry.............. 01
Baucus, Hon. Max, a U.S. Senator from Montana.................... 20
Clayton, Hon. Eva, a Representative in Congress from North
Carolina....................................................... 25
DeWine, Hon. Mike, a U.S. Senator from Ohio...................... 03
Grasseley, Hon. Charles E., a U.S. Senator from Iowa............. 17
Voinovich, Hon. George, a U.S. Senator from Ohio................. 02
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WITNESSES
Panel I
Bryson, Nancy S., of the District of Columbia, to be General
Counsel for the Department of Agriculture...................... 11
Dailey, Fred, of Mount Vernon, Ohio, to be on Board of Directors
of the Federal Agriculture Mortgage Corporation................ 04
Daniel, Grace, of El Macero, California, to be on the Board of
Director of the Federal Agriculture Mortgage Corporation....... 07
Panel II
Dorr, Thomas, of Marcus, Iowa, to be Under Secretary for Rural
Development for the Department of Agriculture.................. 22
Panel III
Clayton, Hon. Eva, a Representative in Congress from North
Carolina....................................................... 25
Crump, Leon, of East Point, Georgia, on behalf of the Federation
of Southern Cooperatives/Land Assistance Fund.................. 32
Keeney, Dennis, of Ames, Iowa.................................... 28
Naylor, George, of Des Moines, Iowa, on behalf of the Iowa
Citizens for Community Improvement............................. 30
Panel IV
Bailey, Varel, of Anita, Iowa, Former Chairman, National Corn
Growers........................................................ 37
Curris, Constantine, of Chevy Chase, Maryland, President,
American
Association of State Colleges and Universities................. 41
Fretz, Thomas A., of College Park, Maryland, Dean and Director,
Agricultural Experiment Station, University of Maryland........ 40
Hier, Nancy, of Marcus, Iowa..................................... 36
Langston, Ron, of the District of Columbia, National Director,
Minority
Business Development Agency, U.S. Department of Commerce....... 34
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APPENDIX
Prepared Statements:
Bailey, Varel................................................ 120
Bryson, Nancy S.............................................. 99
Clayton, Hon. Eva............................................ 89
Crump, Leon.................................................. 111
Curris, Constantine.......................................... 124
Dailey, Fred................................................. 96
Daniel, Grace................................................ 98
DeWine, Hon. Mike............................................ 86
Dorr, Thomas................................................. 101
Fretz, Thomas................................................ 122
Grassley, Hon. Charles....................................... 88
Harl, Neil................................................... 126
Hier, Nancy.................................................. 118
Keeney, Dennis............................................... 104
Langston, Ronald............................................. 115
Naylor, George............................................... 106
Document(s) Submitted for the Record:
Bryson, Nancy S., (Biography)................................ 150
Cochran, Hon. Thad........................................... 130
Dailey, Fred, (Biography).................................... 131
Daniel, Grace, (Biography)................................... 140
Dorr, Thomas, (Biography).................................... 170
Support Letters and Testimonies for Thomas Dorr's Nomination220-269
Opposition Letters and Petitions to Thomas Dorr's Nomination270-348
Letters to and from Senator Harkin and Secretary Veneman....349-364
Questions and Answers:
Harkin, Hon. Tom (some questions not answered)............... 366
Conrad, Hon. Kent............................................ 391
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NOMINATION HEARING: NANCY S. BRYSON, GRACE DANIEL, FRED DAILEY AND
THOMAS DORR
----------
WEDNESDAY, MARCH 6, 2002
U.S. Senate,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC.
The committee met, pursuant to notice, at 9:35 a.m., in
room SD-106, Dirksen Senate Office Building, Hon. Tom Harkin,
[Chairman of the Committee], presiding.
Present or submitting a statement: Senators Harkin, Baucus,
Stabenow, Wellstone, Dayton, Lugar, Thomas, and Allard.
STATEMENT OF TOM HARKIN, A U.S. SENATOR FROM IOWA
The Chairman. Good morning. The Senate Committee on
Agriculture, Nutrition, and Forestry will come to order.
We are here this morning to consider four nominations.
First, we will consider the nomination of Mr. Dailey, and then
Ms. Daniel, and then Ms. Bryson, and then Mr. Thomas Dorr to
serve as Under Secretary of Agriculture for Rural Development.
To each of the nominees, I want to say I wish we could have
scheduled the hearing sooner, and I hope your families and
friends were not too inconvenienced by our several attempts to
schedule this hearing. September the 11th brought many
challenges to conducting business on Capitol Hill. Then we
became embroiled in another great challenge, passing a farm
bill, and we are still in the middle of that effort as we try
to work with the House to reach agreements on the two bills.
With that said, I would welcome our first panel--that is
Ms. Bryson and Ms. Daniel and Mr. Dailey--to the witness table.
Before I administer the oath to these three nominees and before
I recognize Senator Voinovich and Senator DeWine for the
purposes of introduction, I would turn to my distinguished
ranking member, Senator Lugar, for any opening statement that
he might have.
STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR FROM INDIANA
Senator Lugar. Well, thank you very much, Mr. Chairman. I
join you in welcoming the nominees and witnesses who will speak
about them today. I look forward to an excellent hearing. I am
glad that we have an opportunity to bring these witnesses to a
point of confirmation.
I will have more to say as the hearing progresses and we
have opportunities to question the witness. We thank you all
for appearing. We appreciate our colleagues Senator DeWine and
Senator Voinovich coming this morning to be with us.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Lugar.
Now, I would ask the three nominees--Ms. Nancy Bryson, Ms.
Grace Daniel, and Mr. Fred Dailey--to please rise and raise
your right hand, and I will administer the oath to all of you
in unison.
Do you swear to tell the truth, the whole truth, and
nothing but the truth, so help you God?
Ms. Bryson. I do.
Ms. Daniel. I do.
Mr. Dailey. I do.
The Chairman. Thank you. Please be seated.
I would first recognize Senator Voinovich from Ohio for the
purposes of introduction, and then I would recognize Senator
DeWine.
Senator Voinovich, welcome to the Agriculture Committee.
STATEMENT OF HON. GEORGE VOINOVICH, A U.S. SENATOR FROM OHIO
Senator Voinovich. Thank you very much, Mr. Chairman.
It is my pleasure to join with the senior Senator from
Ohio, Senator DeWine, to introduce to this committee President
Bush's nominee to the Board of Directors of the Federal
Agricultural Mortgage Corporation and my dear friend, Fred
Dailey.
Fred, I would first like to extend a welcome to you and
your daughter, Calley, and extend my regrets that your wife,
Rita, is not able to be here today. I would also like to thank
you for your willingness, Fred, to serve your country in this
position.
Mr. Chairman, as Governor of Ohio, I appointed Fred Dailey
to be the Director of the Department of Agriculture in 1991,
and I have often said that Fred was one of the smartest
appointments that I made. He served me for 8 years, and then
the new Governor came in and extraordinarily decided that he
wanted to continue to have Fred's services. That really speaks
volumes about how he is regarded in Ohio.
To say Fred has a vast knowledge and understanding of and
experience with the agriculture community would be an
understatement. Besides his current duties, Fred has his own
farm where he and his wife, Rita, raise Angus beef. In
addition, Fred is past president of the Midwest Association of
the State Departments of Agriculture, having previously served
the organization as vice president and secretary. He is past
president of the Mid-America International Agritrade Council,
and he has received the Future Farmers of America's Honorary
State Farmer Degree from both Ohio and, Senator Lugar, from
Indiana.
He is also the recipient of numerous other agricultural
awards, including Agrimarketer of the Year, industry service
awards from commodity organizations, and the Golden Boot Award
presented by Agri-Broadcasting Network.
Perhaps the greatest endorsement of Fred Dailey is from his
peers who have selected him as president of the National
Association of State Departments of Agriculture.
Mr. Chairman, I have had the privilege of knowing Fred for
many years, and he is unquestionably a man of exceptional
character, talent, and integrity, the kind of person that we
would want to serve on any of our boards. His professional
demeanor and his thorough knowledge of the agricultural
community combine to make him truly an excellent candidate for
the Board, and I am delighted that Fred has once again accepted
the call to public service.
Mr. Chairman, it is my pleasure to give Fred my highest
recommendation, and I would like to thank you for the
opportunity that you have given me this morning to introduce
him to the committee.
The Chairman. Thank you very much, Senator Voinovich, for
that great statement and for your strong support of Mr. Dailey.
Now I would recognize the senior Senator from Ohio, Senator
DeWine.
STATEMENT OF HON. MIKE DeWINE, A U.S. SENATOR FROM OHIO
Senator DeWine. Mr. Chairman, thank you very much. I have a
written statement which I would like to submit for the record
with the Chair's permission.
Let me also welcome to the U.S. Senate and to this
committee Fred and his daughter, Calley. We are delighted that
Calley could join you, Fred, today.
We are very proud, Mr. Chairman, of Fred Dailey in Ohio.
Senator Lugar, as has already been pointed out, Fred also has
roots in Indiana agriculture as well.
We are very proud of him, as my colleague, Senator
Voinovich, has indicated. Fred has actually now served under
three Governors in the State of Ohio. He has been someone who I
got to know and spent a lot of time with when I was Lieutenant
Governor, the 4 years that I served under then-Governor
Voinovich. Fred and I worked very closely on a number of
agriculture-related issues, and he was always someone who I was
very impressed with the depth of his knowledge of agriculture.
He was a great administrator, is a great administrator, someone
who has made the department run very, very well. When you would
see Fred out talking with other farmers, when you would see him
traveling the State of Ohio, you just really got a feel that
this is a man who truly does, in fact, understand agriculture.
I am delighted that Fred has agreed to allow his name to be
put in nomination by the President, and I could not recommend
him higher to this committee.
[The prepared statement of Senator DeWine can be found in
the appendix on page 86.]
The Chairman. Thank you very much, Senator DeWine, for your
strong support and for your great statement.
Before I recognize Mr. Dailey, I recognize Senator Allard
from Colorado, for any opening statements or comments that you
would like to make.
Senator Allard. Mr. Chairman, thank you very much. I don't
have an opening statement. I look forward to this hearing.
Thank you very much.
The Chairman. Thank you very much, Senator Allard.
Senator DeWine and Senator Voinovich, I--well, I see he has
already--I know we have busy schedules. We all have hearings to
attend.
Senator DeWine. Thank you, Mr. Chairman.
The Chairman. Thank you very much for being here.
The Chairman. As I said, we will go in order with Mr.
Dailey, then Ms. Daniel, then Ms. Bryson. That is rather
logical. The first two, of course, are nominees for the Board
of Directors of the Federal Agricultural Mortgage Corporation.
Mr. Dailey, we welcome you and congratulate you on your
nomination. There is one question I have to ask each of you
after administering the oath.
Mr. Dailey, do you agree to appear before any duly
constituted committee of the U.S. Congress if asked?
Mr. Dailey. I do, Mr. Chairman.
The Chairman. Thank you very much, Mr. Dailey.
Mr. Dailey, I would recognize you for any opening statement
that you might have for the committee.
STATEMENT OF FRED L. DAILEY, OF OHIO, TO BE ON THE BOARD OF
DIRECTORS OF THE FEDERAL AGRICULTURAL MORTGAGE CORPORATION
Mr. Dailey. Mr. Chairman, I am going to keep my opening
statements very short since you were kind enough to let both
our U.S. Senators speak on my behalf. I would like to recognize
my daughter, Calley Dailey, who is a student at Miami
University, and thank you for allowing her to come to this----
The Chairman. Miami of Ohio.
Mr. Dailey. Miami of Ohio, that is right.
The Chairman. I just wanted to make sure the record showed
that.
Mr. Dailey. Purdue would have been her second choice,
though.
[Laughter.]
Mr. Dailey. I appreciate the opportunity to appear before
you today, and I want to share with you my background as it
relates to this appointment and my enthusiasm for our Nation's
agriculture industry.
As Governor Voinovich, now Senator Voinovich, when he asked
me to serve with the administration, that was back in 1991. We
have come a long way since that time. Even before then, I
served in Indiana under the Lieutenant Governor, who serves by
statute as Commissioner of Agriculture in the State of Indiana.
I have had a variety of jobs, from being a soldier to a U.S.
sky marshal. For the last 25 years, my professional experience
has revolved around agriculture.
Currently, I oversee 500 employees at the Department of
Agriculture. Our role and mission is primarily regulatory, and
much of that revolves around food safety. As Senator Voinovich
indicated, I am immediate past president of the National
Association of State Departments of Agriculture, and I would
like to say that we have spent a lot of time at the State
Departments of Agriculture since September working on bio-
terrorism. We have done a lot of testing of anthrax in our
laboratories. Routinely we do 400 to 500 tests a year. We have
also done a lot of preparedness for potential agro-terrorism
events--foot-and-mouth disease, table-top exercises, and BSE
exercises, mad-cow disease, with the Food and Drug
Administration.
I currently live on a farm and commute back and forth to
Columbus, Ohio, a 270-acre farm where we raise Angus cattle. As
I indicated, most of my professional career has involved
farmers and agriculture in some manner or another.
I will be candid with you, Mr. Chairman and members of the
committee. I am not a banker. I don't have a degree in finance.
I do have a strong commitment to the Nation's agriculture
industry, and I am interested in this appointment because it
allows me to further serve our Nation's agriculture industry by
assuring that there will continue to be a ready and competitive
secondary market for agricultural mortgages.
I am hopeful that I can carry out the mandates of this
program as envisioned by Congress and that we can continue to
provide an ever-growing secondary market for agricultural
mortgages, thereby assuring the continued availability of
reasonably priced credit to our producers and agri-businesses
as well as capital to our rural banks and credit institutions.
Mr. Chairman, it has been my experience working with
farmers directly that we have moved from being a very labor-
intensive industry to a capital-intensive industry. It is
important that we have reasonably priced capital for our
producers.
Thank you again for inviting me here today, Mr. Chairman. I
would be happy to answer any questions that you or members of
the Senate Ag Committee would have.
The Chairman. Well, thank you very much, Mr. Dailey. Again,
we have heard many good recommendations on your behalf. I
really don't have a lot of questions, except the one that I
just posed to you. Many of us on this committee for a long time
have wrestled with the difficulty of getting young farmers and
starting up their own operations. As a committee, we continue
to look for ways to address the challenge. We look for ways
that USDA and the institutions regulated by the Farm Credit
Administration, including Farmer MAC, and private lending
institutions can provide access to credit, reasonably priced,
for beginning farmers.
I guess just my general question to you is: How do you
believe that Farmer MAC could help contribute to this process,
this goal of trying to enable younger farmers to get a foothold
in agriculture?
Mr. Dailey. Mr. Chairman, you have really done a very good
job of helping young farmers. In the new farm bill, as you have
proposed it, there are additional provisions that would provide
additional dollars for first-time beginning farmers. As I
indicated, it is difficult for young farmers to get started,
and especially perhaps in some of those States that are very
rural. In our State, in the urbanized States, you can work
second jobs, but in many of the other States you can't.
At the same time, those rural banks need to have the
liquidity so that they can provide credit to farmers, and that
is where Farmer MAC comes in because it provides increased
liquidity, generates additional capital that those farmers have
in the rural areas so they can lend money to hopefully
beginning farmers and other farms as well.
The Chairman. Thank you, Mr. Dailey. I look forward to
further discussions with you as we go through the months ahead
on that one subject.
Senator Lugar.
Senator Lugar. Mr. Dailey, I appreciate all the good
comments that have been made about your Indiana experience in
addition to the vast experience you have had in Ohio. I would
just simply add for the record that Anderson University and
Ball State University are very proud of you, as well as your
service with the Lieutenant Governor of Indiana.
Mr. Dailey. Thank you.
Senator Lugar. My question is prompted by the chairman's
question and your response; namely, the farm bill, at least as
passed by the Senate, does have substantial emphasis on young
farmer loans, and that is deliberate, and that is a
conferenceable item. This is still in flux. The chairman and I
have a strong feeling of support for that. Hopefully all of the
conferees will come to that conclusion.
In preparation for either dealing with young farmers or
others in Farmer MAC, you mentioned that you were not a banker,
but obviously your experience in agriculture is extensive. What
preparation have you taken to prepare yourself for this role?
Have you visited with other members of the Board, with people
who have been involved with the bank? Or can you describe at
all, at least for the sake of this hearing, your own
preparation for this responsibility?
Mr. Dailey. Mr. Chairman, Senator Lugar, first of all, I
had a chance to read the briefing materials, the Securities and
Exchange Commission reports for the past four quarters. I had a
chance to look at the outline of the charter--I haven't read
the charter itself--and some of the amendments that we have
made to that.
I have had the chance to come into the Farmer MAC office
and receive a briefing, along with my counterpart here, Grace
Daniel.
On top of that, I have had a chance to go to the Rural
Development Service of the USDA that also sells paper to the
Farmer MAC program, and they were very appreciative of this
program and having that outlet, and many of their programs are
guaranteed programs. I have had a chance to talk to some
bankers about the program, too, that have used it.
My learning curve is still continuing, I would hasten to
add, and I still have a lot of work to do. I am very concerned
about transparency. We have an excellent management team in
place. The track record is good. I know that my role as one of
the Board members is to make sure that things continue to go as
Congress envisioned it, and I pledge to you my best efforts to
do that.
Senator Lugar. Well, thank you very much. As you know, the
Farmer MAC organization and much of its acceleration has
occurred because of hearings such as this one in the committee
and actual legislation passed in various farm bills. From time
to time in the early days, Farmer MAC's existence seemed
precarious. Members such as yourself or Board members came to
tell us of their difficulties and asked for support, which they
received. This is not a perfunctory hearing. As far as we are
concerned today, this is a very important institution that
really has arisen from the needs of agricultural America. I
appreciate your answers. I look forward to supporting your
nomination.
Mr. Dailey. Thank you.
Senator Lugar. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Lugar.
Senator Baucus.
Senator Baucus. No questions. Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Allard.
Senator Allard. Mr. Chairman, I just want to re-emphasize
what my colleague from Indiana, Senator Lugar, said about being
sure that we have good transparency. It is a well-managed
program and investors have confidence in Farmer MAC. Just
before I came to the Senate, I served on--in fact, I was
chairman of one of the subcommittees on the Agricultural
Committee over on the House side. Farmer MAC was under our
jurisdiction. We had some concerns at that particular time
about Farmer MAC and among other things, its financial
stability. Apparently most of that is behind us, but I can't
emphasize enough how important it is, particularly during
economic downturns, that we maintain investor confidence in
Farmer MAC. That is an important part of making sure that money
is available for beginning farmers and their needs.
One of the things that we noticed is that some farmers for
one reason or another, didn't qualify as beginning farmers. It
seems these same farmers kept defaulting on their loans and
continued to come back and for another loan. That is something
that we need to watch in the portfolio.
The Chairman. Thank you, Senator Allard.
Mr. Dailey, thank you very much.
[The prepared statement of Mr. Dailey can be found in the
appendix on page 96.]
The Chairman. We will turn now to Ms. Grace Trujilo Daniel,
of California, a nominee for the Board of Directors of the
Federal Agricultural Mortgage Corporation. I would ask you, Ms.
Daniel, do you agree to appear before any duly constituted
committee of the U.S. Congress if asked?
Ms. Daniel. I do, sir.
The Chairman. Thank you very much. We welcome you to the
committee, Ms. Daniel, and if you have an opening statement,
please proceed.
STATEMENT OF GRACE DANIEL, OF CALIFORNIA, TO BE ON THE BOARD OF
DIRECTORS OF THE FEDERAL
AGRICULTURAL MORTGAGE CORPORATION
Ms. Daniel. I do, if I may. First of all, I wanted to
introduce to you my guests today. Unfortunately, my husband,
Tony, could not be with me but my brother-in-law and my sister-
in-law, who live nearby, were kind enough to join me today for
moral support, and it is John and Mandy Wertz. They are sitting
right here behind me.
The Chairman. We certainly welcome them here to the
committee.
Ms. Daniel. Then it just happened that this is the week
where the U.S. Hispanic Chamber of Commerce had its legislative
conference, so I am lucky enough to introduce you to some of my
board members of the Sacramento Hispanic Chamber of Commerce,
and they are in those back two rows back there. They are all
here wanting to see the process in action. I am very proud to
have them here today.
The Chairman. Well, we certainly welcome you to the
Agriculture Committee. Welcome.
Ms. Daniel. Anyway, good morning to you, Mr. Chairman, Mr.
Harkin, Senator Lugar, Senator Allard, Senator Baucus. Thank
you for allowing me today to make brief statements, and they
will be brief.
I am honored, privileged to be before you today as the
nominee of George W. Bush to this fantastic Board of Directors,
Farmer MAC Board of Directors.
If confirmed by the Senate, I look forward to serving on
the Farmer MAC Board to ensure liquidity to lending
institutions that provide loans to agricultural borrowers. I
fully recognize the importance--the important role agriculture
plays in the strength of the U.S. economy and the need to
enable farmers and ranchers to access much needed financial
resources.
I would like to briefly discuss with you my credentials for
the position and how I can provide this experience to Farmer
MAC's loan programs.
As director of the California Small Business Office and the
Small Business Advocate for the State of California, I became
very familiar with government-guaranteed lending and the
importance of providing financial flexibility to developing
small businesses and to rural farming communities. In that
capacity, I was responsible for the management of the eight
California Small Business Financial Development Corporations
that provided loan guarantees and direct farm loans.
I am proud to say that during my tenure, from 1992 to 1996,
we increased both the dollar amount of the State's trust fund,
from $30 million to $70 million, and doubled the number of
guarantees from 200 to 400 loans, and doubled the direct farm
loans from 28 to 52. This may seem insignificant considering
the size of Farmer MAC's lending capability, but this truly
prepared me for some of the important things that we need to
look at when we are trying to support the farming communities,
especially what we were trying to do in California.
In closing, I would like to restate my feelings of the
great honor I feel for being nominated by President Bush to
this Board and the commitment I have to serving my country in
this capacity. I truly feel my background and experience have
prepared me for this position.
If confirmed, I will seek the advice of the Federal
Agricultural Mortgage Corporation staff and Board members, this
committee, and other Members of Congress, as I attempt to
effectively discharge the duties as a member of the Federal
Agricultural Mortgage Corporation Board of Directors.
I thank you for your consideration.
The Chairman. Ms. Daniel, thank you for your statement.
Thank you for your willingness to serve. You certainly have a
distinguished background.
As you know, Farmer MAC also serves as the secondary market
for rural business and community development loans and certain
other loans guaranteed by the USDA under the Farmer MAC II
Program. We on this committee have worked hard to help provide
new opportunities for rural businesses, which we feel is a
crucial ingredient to a healthy rural economy.
With your experience as the former director of the
California Office of Small Business and as a private
consultant, could you make some brief comments on what role
Farmer MAC should and could effectively play in rural economic
development for small business development?
Ms. Daniel. One of the major roles or challenges that
Farmer MAC is going to have is to have an education program. We
have found that some of the rural farmers and some of the small
business owners did not access programs that were available to
them is because they were not aware of them, and they were not
aware of how to prepare themselves to qualify for some of these
opportunities. One of those would be an education that we would
have insure we have in place.
The Chairman. More effective outreach.
Ms. Daniel. Absolutely.
The Chairman. I appreciate that. Thank you very much, Ms.
Daniel.
Senator Lugar.
Senator Lugar. Ms. Daniel, as I questioned Mr. Dailey
before, the committee faced within the last decade a situation
with regard to all of farm credit that was very dire. It did
not approach the size of the savings and loan crisis, although
at the time there were some wild estimates of how many billions
of dollars might be required of taxpayers to somehow really
bail out those elements, not necessarily Farmer MAC but well-
established institutions in the Federal Credit System.
Your background is extensive in marketing, in business, and
working through these problems, but are you aware generally of
the history say of farm credit in the last two decades, both
its rise and its fall and its resurrection, and how the
resurrection came about, namely, the bailout did amount to a
little over $1 billion, not 10 or 20, but still sizable sums of
money to reorganize what we had, with Farmer MAC then added
really to give these additional services the chairman has
mentioned. I just want you in your own words to describe your
preparation for this experience, your idea of the history of
farm credit so that as now a trustee on behalf of all of us of
a part of it, and a very important part, you will be prepared
to alert us in this committee or others as to problems that you
foresee so that we do not go into the drink again, as we are
inclined to do given the cycles in farming in America.
Ms. Daniel. In my past experience in California, I had two
main responsibilities when I was overseeing the financial
centers. One of them was to protect the trust fund and to
ensure that that trust fund was being managed properly. Second,
to make sure that the underwriting requirements were as
stringent as we could make them, and yet flexible enough so
that those that could qualify could receive this funding. We
wanted to make sure that this money was used and it was a trust
fund, so in view of that, I feel that for Farmer MAC, I would
apply those same principles of ensuring that taxpayers' money
and in this case, the investors of Farmer MAC's fund is
protected. Also I am also aware of Farmer MAC's underwriting
requirements and the necessary steps that the loan program--or
the people who are going to be accessing these loans need to
make in order to qualify for these direct loans and for the
loan guarantees.
I feel that they're in place. I am looking forward to
learning more about how we can make this as safe as possible.
Senator Lugar. Have you studied the portfolio to the extent
of knowing the number of loans that are in arrears as far as
payments or classified in some degree of jeopardy of repayment
and what kind of program Farmer MAC has to try to bring this
back to equilibrium?
Ms. Daniel. I haven't studied thoroughly the portfolio, but
I was aware during our briefing that the default loans were
quite minimal and that a lot of effort was made to ensure that
they were paid ultimately.
I'm not a banker, either, but I felt pretty confident that
the measures they have in place are good lending practices.
Senator Lugar. Thank you very much, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Baucus.
Senator Baucus. No questions. Thank you.
The Chairman. Senator Allard.
Senator Allard. No questions.
The Chairman. Thank you very much, Ms. Daniel.
[The prepared statement of Ms. Daniel can be found in the
appendix on page 98.]
The Chairman. Now we turn to the nomination of Nancy S.
Bryson for the position of General Counsel at USDA.
Ms. Bryson, you have been nominated to serve as General
Counsel. This is an important position with many
responsibilities as part of the Secretary's sub-cabinet. The
General Counsel is the chief legal officer of the Department
and, therefore, plays a critical role in the regulatory and
legal affairs of the Department.
I should warn you at the outset that I do know a little bit
about the Office of General Counsel. My wife once served as the
Deputy General Counsel there. That has been a few years ago. We
also have Charlie Rauls as the counsel to our committee, who
was your predecessor and who served for two and a half years as
General Counsel at the Department of Agriculture. It is an
extremely important position.
I have always heard good things about the quality of the
lawyers at the Department and their dedication to public
service, and I am sure that tradition will continue under your
leadership. Before I recognize you for an opening statement, I
have one more question I have to ask you. Do you agree to
appear before any duly constituted committee of the U.S.
Congress if asked?
Ms. Bryson. I do, Mr. Chairman.
The Chairman. Thank you very much, Ms. Bryson, and if you
have an opening statement, please proceed.
STATEMENT OF NANCY S. BRYSON, OF THE DISTRICT OF
COLUMBIA, TO BE GENERAL COUNSEL OF THE
DEPARTMENT OF AGRICULTURE
Ms. Bryson. Thank you. Mr. Chairman and distinguished
members of the committee, it is an honor for me to appear
before you today as President Bush's nominee for the position
of General Counsel of the Department of Agriculture.
I thank the President and Secretary Veneman for the trust
and confidence they have placed in me in choosing me for this
nomination. If confirmed, I will work to the best of my ability
to faithfully discharge the duties of my office.
I would like to introduce my family members who are here
with me in the audience: my husband, John; my son, Alex, who is
a junior at Georgetown Day School here in the District; my
father-in-law, Brady Bryson; and my cousin, Donna Whitman. If
you will bear with me----
The Chairman. Welcome. Welcome to the committee.
Ms. Bryson. I would like to say others who are here with us
in spirit but couldn't make the trip include: my son, Sam, who
is attending class at Harvard University as a sophomore; and my
mother and father, James and Marjorie Southard; my sister, Sue
Southard; and my brothers, James, Christopher, and Bruce
Southard.
My goal, if confirmed by the Senate, will be to provide the
best possible legal advice and counsel to the Secretary on the
many challenging issues facing the Department of Agriculture. I
look forward to working with USDA's strong professional legal
career staff to achieve this goal and to a close working
relationship with this committee.
I was born and grew up in the rural community of Hancock,
Massachusetts. For much of my life there, Hancock had more cows
than people. I was an active member of our local 4-H Club when
I was growing up. I worked summers during college in a farm
machinery business operated by one of my uncles, the father of
my cousin, Donna. I went to Boston University on a full
scholarship and then to Georgetown University Law Center here
in the District.
I have spent my legal career as a practicing attorney. I
began as a Government attorney first at the Department of Labor
and then at the Department of Justice. In that capacity, I
learned how to try cases, both civil and criminal, how to
prepare and argue them on appeal, and how to work with the
Solicitor General's office on Supreme Court cases. I learned
how the Department of Justice functions at the working level
and how it interacts with its client agencies. I learned the
administrative and managerial aspects of running offices full
of busy lawyers, including staffing and supervision of legal
work, providing effective performance evaluations, managing
resources so as to get the greatest possible value, and
negotiating differences of opinion about the optimum legal
strategy for particular matters.
I left Government service after 9 years to explore the
opportunities of a Washington legal practice, joining Crowell &
Moring in 1984. I built a successful environmental law practice
at the firm in this highly competitive field. That practice has
been a constantly evolving one, as the breadth of what are
considered environment law issues has continued to expand. I
have worked on legislative initiatives with clients involving
the reauthorization of the Federal pesticide law and in a
number of Clean Air Act issues for nontraditional sources.
During the past several years, I have developed an
interdisciplinary practice in biotechnology and have
represented clients working to secure approvals for innovative
products at the Environmental Protection Agency.
When I look at the full spectrum of laws and programs which
USDA administers, I see both a great challenge and a wonderful
opportunity for the lawyer who becomes General Counsel at USDA
under the leadership of Secretary Veneman.
I am keenly aware of the importance the Secretary has
placed on ensuring USDA's compliance with civil rights and
equal employment opportunity for everyone. I share the vision
which the Secretary has expressed in our Civil Rights Policy
Statement--consistent education and outreach to ensure civil
rights are protected, our laws are enforced, and discrimination
in any form is prevented. I will work to implement that vision.
I look forward very much, if confirmed, to serving my
country as General Counsel at USDA in this administration,
working for this Secretary, and with the highly professional
OGC staff, and the committee.
Thank you, again, Mr. Chairman.
The Chairman. Thank you, Ms. Bryson, for your statement.
Thank you for your willingness to serve.
I basically have just one question I would like to pose to
you, and it would be something that I would think that we would
want to followup on as we move ahead. You have written a
somewhat critical article about the subject of judicial
deference to agency decisionmaking, but particularly when it
comes to agency decisions based on science or risk analysis. I
understand that most of these articles dealt with rulemaking
procedures at EPA, but as you know, USDA also frequently
undertakes rulemaking proceedings in which science plays an
important role particularly in the areas of food safety and
protection of plant and animal health.
Could you briefly explain your views about the role that
Federal agencies such as USDA have in making policy in the
public interest based on science and risk assessment?
Ms. Bryson. Certainly. The role of the Federal agencies is
to adopt regulations which implement the laws which Congress
passes and directs them to administer. Increasingly the
agencies face very difficult scientific questions in which it
is a challenge for non-scientists to understand what the issues
are and how to address them in a way that makes the public feel
that public safety is being protected and that there can be
confidence in the products that enter the market and in the
regulatory structures the agencies put in place to protect
them.
Risk assessment is a critical aspect of being able to issue
those kinds of regulations. There are many issues that relate
to the science which require a basic level of certainty about
the science. It can't be sufficient to meet the standards that
the Supreme Court has set out in Daubert for causation and
litigation. Certainly there has to be a vetting of the science
and understanding of what it is telling us and adoption of the
appropriate responsive risk assessment regulation.
The Chairman. Ms. Bryson, can you assure us that you will
effectively represent the Department in formal rulemaking and
adjudicatory proceedings and work with the Department of
Justice to effectively represent the Department in civil
actions arising out of its administrative activities?
Ms. Bryson. I will.
The Chairman. Thank you very much, Ms. Bryson.
Senator Lugar.
Senator Lugar. Thank you, Mr. Chairman.
Ms. Bryson, you have an extraordinary record and a very
good one and extensive experience in the Government of the
United States. I am simply curious as to how you were nominated
for this particular position with the Department of
Agriculture, not that your experience at EPA would not be
relevant, and the chairman has already led to that in his
questions, or the Department of Justice, but there are
obviously issues that are peculiar to the Department of
Agriculture and the defense at least of that Department, the
Secretary with whom you have indicated you wish to work, and
activities of this committee.
Can you trace at least how you came into this situation? Is
it a position that you sought? Did the administration seek you?
Do you have a pretty good idea of the type of activities that
your predecessor had to face, or your predecessors over, say,
the last decade or so?
Ms. Bryson. I was given a wonderful opportunity. That is
why I am here, Senator. I was asked in August of this past year
if I would be interested in being considered for this position.
President Bush and Secretary Veneman had decided they wanted a
candidate for General Counsel with a strong background in
environment and natural resources because of the many issues in
that field which face the Department.
I entered the door. I was recommended by a number of
colleagues who I have encountered in the course of my career in
Washington. I was very interested from the beginning simply
because our agriculture and forestry resources are such an
asset for us and will be so important in the coming century.
My interview actually with Secretary Veneman was scheduled
for September 11th at 4 o'clock in the afternoon. It was
rescheduled very quickly after that, but after September 11th,
I wanted very much to be part of the administration and to
serve my country in this capacity.
I have been the beneficiary of some wonderful briefings
from the Office of General Counsel and the fine staff that
exists there on the issues. I do at this point have a good
sense of the range of issues which confront the Department
across the board, in the regulatory programs, in the farm
credit programs, in issues relating to competition in
agriculture, certainly forestry and water rights. With the
assistance and the wonderful team at OGC we're going to be in a
position to provide very strong support to the Secretary.
Senator Lugar. Well, I thank you for that response. I would
just say that as you have wished this day to come, so have many
of us to have the General Counsel before us and have an
opportunity to confirm this nomination, because it fulfills a
very vital role for the Department. I wish you well, and I look
forward to supporting your nomination.
Ms. Bryson. Thank you, Senator.
The Chairman. Thank you, Senator Lugar.
Senator Baucus.
Senator Baucus. I wish you all well. These are not easy
jobs. No job in Government today is easy. I appreciate your
willingness to work in these various capacities.
A concern I have slightly is, in looking at your resumes,
none of you has any experience between the Mississippi River
and the Cascades, that is, the central heart of America in
agriculture.
Ms. Bryson, you are Boston, DC Ms. Daniel, you are
California.
Ms. Daniel. Quite a large ag community.
Senator Baucus. I know, but it is a different kind of
agriculture. It is totally different. Mr. Dailey, of Ohio,
essentially as I read your resume.
I was slightly concerned listening to you, Ms. Bryson,
because clearly we have laws and regulations and we are here to
serve people, average, ordinary people. We have lots of laws
and lots of regulations, and sometimes we get wrapped around
the axle trying to figure out what the laws and regulations are
and forgetting why they are there in the first place, just
serving people, our employees--excuse me, our employers, your
employers, my employers.
I am trying to figure out how I can encourage you to spend
time in my part of America so it gets in your blood, so you
feel it and taste it and smell it, and know what it is like to
be out there on a farm, when a crop doesn't come in. I am
talking about dryland farming, where it doesn't rain, or
pulling a calf at 3 in the morning or just seeing how tough it
is for producers--I am talking about grain producers and
livestock producers--to make a living. It is extremely tough.
When we are thinking about rules and regulations and all
that and getting briefed by OGC staff about all these various
components, that is not what this is all about. This is about
people, real live people in America.
How can you tell me--what can you tell me that can reassure
me that you have a sense of that?
Ms. Bryson. Well, Senator, one of the things that I did in
private practice was work for about 4 years with a farmers co-
op in Nebraska, the Central Nebraska Public Power Group, on
relicensing of their hydroelectric facilities on the Platte
River. I spent a lot of time in Nebraska. I went to Lake
McConaughy with them to look at the hydro facilities. We worked
with wildlife experts and the farmers to evaluate questions
FERC and the Fish and Wildlife Service were asking about the
impacts of farming around the Platte, on bald eagles, whooping
cranes--it is a critical habitat for whooping cranes there,
sandtail cranes--and came to have a very strong appreciation
from my representation of these people about how issues that
are created and sometimes decided in Washington affect people
in their daily lives in the heartland of America.
Senator Baucus. I appreciate that. I would like you to come
to Montana. Will you come to Montana?
Ms. Bryson. Absolutely.
Senator Baucus. This year?
Ms. Bryson. Absolutely.
Senator Baucus. OK. We will find a good visit, just to get
around and get a sense of what is going on.
Ms. Bryson. I would be delighted.
Senator Baucus. Thank you very much. I appreciate that.
Good luck.
Ms. Bryson. Thank you.
Senator Baucus. Thank you, Chairman.
The Chairman. Thank you very much, Senator.
Senator Allard.
Senator Allard. Thank you, Mr. Chairman.
I appreciate you coming by and visiting with me, Ms.
Bryson. One of the things I want to get on the record is to see
if you have taken time to understand water law as it applies to
the West. This is a followup on questions asked by Senator
Baucus. Water as it applies to natural resources, particularly
forests and public lands, is a rising issue. In the West, there
are fundamentally two sets of water laws that we deal with. The
kind of water law that you get east of the Mississippi, which
is a riparian water rights system. The system west of the
Mississippi, which is used in the State of Colorado and
throughout the West, is one of prior appropriation. There is
actually a property right assigned and it is adjudicated at the
State level. In other words, the Federal Government and the
Congress have agreed that the primary role in controlling that
water is with the State. I just want to get some assurance from
you that you have taken time to understand Western water law,
particularly the doctrine of prior appropriation, and if not,
that you will take time to fully understand it.
Ms. Bryson. Yes, Senator, I have since our discussion spent
quite a bit of time looking into the water law issues and how
they affect positions that the Forest Service takes in
administering the national forest system. I am sure I need much
more education, and----
Senator Allard. I would be glad to help you with that.
Ms. Bryson. I will be glad to get--take all the help that I
can get.
Senator Allard. If you don't mind a little consulting with
a veterinarian.
[Laughter.]
Senator Allard. Specifically, one of the problems we have
with the Forest Service in Colorado is concerned with ditches
that run through the mountains that were there before the
national forest was. The forest has a renews the permit for the
ditch to go through, they have begun, instead of asking for a
flat fee to renew the permit, to ask for a percentage of the
water right, which then allows them to move in front of the
State primacy in controlling how water is allocated in the
State. We have seen this on the agricultural bill with what has
been referred to as the Reid amendment. In this instance with
CRP land, there is an allocation of water that may be allowed
to the Federal Government which bypasses the State's primacy
role in States where we have the doctrine of prior
appropriation.
What has happened with these ditches is that they come back
and ask for water. Each time you renew the permit, if you take
a percentage of that water, pretty soon the farmer will be out
of business. He was there relying on that water before the
Forest Service established the land in question as a national
forest. Many States view water as a property right. This action
is viewed as a taking of private property.
I just hope that you look really closely at that particular
issue because it does surface from time to time in Colorado and
other States as well, Idaho, probably Montana, Wyoming, those
of us that are in the Rocky Mountain region, certainly there
are higher reaches of mountainous areas. This is probably an
issue that you will be faced with. I would be surprised if you
don't have a lot of issues coming up related to water,
particularly in the West. I hope that you will take time to
thoroughly understand water law and perhaps to have someone on
your staff who is particularly knowledgeable in Western water
law. It would also be nice to have someone, even yourself, to
take the time to attend some of the courses that are offered in
some of these States that discusses the uniqueness of the water
law in Western States.
Thank you.
The Chairman. Thank you very much, Senator Allard.
That does not mean, however, Ms. Bryson, that you are now
in charge of rain.
[Laughter.]
The Chairman. We thank you all very much. I compliment each
and every one of you on your distinguished careers. We thank
you for your willingness to serve this Nation in your various
capacities. We look forward to working with you in the future.
With that, this panel will be dismissed, and we will bring
up our next nominee. Thank you very much, all of you.
[The prepared statement of Ms. Bryson can be found in the
appendix on page 99.]
The Chairman. The committee will now move to the
consideration of Mr. Thomas Dorr, who has been nominated by the
President to serve as Under Secretary of Agriculture for Rural
Development. We would ask Mr. Dorr to please come to the
witness table.
Mr. Dorr, before I recognize Senator Grassley and you for a
statement, I would ask you the same question I have asked the
other nominees. Mr. Dorr, do you agree to appear before any
duly constituted committee of the U.S. Congress if asked?
Mr. Dorr. I do.
The Chairman. Thank you. Again, I would ask you to rise and
I will administer the oath. If you would raise your right hand.
Do you swear to tell the truth, the whole truth and nothing
but the truth, so help you God?
Mr. Dorr. I do.
The Chairman. Thank you very much, Mr. Dorr.
Now I would recognize the senior senator from the State of
Iowa, Senator Grassley. Senator Grassley, I certainly
appreciate your being here this morning to introduce the
nominee, and we recognize you at this time to make a statement.
STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM IOWA
Senator Grassley. I thank you very much, Chairman Harkin,
my colleague from Iowa, Senator Lugar, and everybody who is
present for one of the most important positions in the U.S.
Department of Agriculture, an opportunity for us from the State
of Iowa, at least in Republican administrations to have the
first person from Iowa this high up in the administration of
agricultural policy and rural development policy since C.D.
Lodwick of Weaver, Iowa served in this important position in
the years of 1982, 1983, maybe 1981, 1982, 1983. It gives me a
privilege then to nominate somebody that I feel is very
qualified as C.D. Lodwick was qualified to lead in agricultural
policy.
It is an opportunity for me to say that there is a void
within the Department of Agriculture of people who represent
the upper midwest, in a type of agriculture where family farms
are so prominent compared to other areas of the United States,
and that does not denigrate all the good people that are from
other states, members of this committee like a prominent member
for Indiana in the Agricultural Department, or prominent person
from Mississippi in the Agriculture Department, and maybe a lot
of other prominent people. I guess I look at this maybe in a
parochial way, that somehow west of the Mississippi and from
Missouri north, there is a little different view toward
agricultural policy than there is in some parts of the United
States, so it gives me an opportunity to say that this
nomination fills a void that needs to be better represented in
the Department of Agriculture.
I am pleased to introduce to you a fourth generation Iowan,
whom President Bush has nominated to be Under Secretary for
Rural Development at the Department of Agriculture. Rural
Development is one of the most important mission areas in the
U.S. Government, and particularly for my home State of Iowa,
and I know that the Chairman shares my belief about the
importance of rural development.
Rural Development programs benefit every State represented
on this committee. It is critical for the health and well being
of rural America that this mission area function efficiently.
That is why I believe the President has made an excellent
choice in nominating Tom Dorr to lead Rural Development.
As Under Secretary for Rural Development, Mr. Dorr will
oversee efforts to improve the economy and quality of life for
residents of communities across rural America. He will be in
charge of programs which support essential public facilities,
such as water and sewer systems, housing, health clinics,
emergency service facilities, and electric and telephone
service. He will also be responsible for supervising the U.S.
Department of Agriculture's efforts of promoting economic
development by supporting loans to businesses through banks and
community-managed lending pools, and assisting producer
cooperatives.
For these programs to function at their best, they need a
manager who has a strong understanding of business, of finance,
modern information technology as well as agriculture, and I
believe that Tom Dorr has all this and more. The more is that
he understands rural America because that is where he is from.
Tom is not from inside the beltway. He is not a lawyer. He is
not an economist. He is not an old bureaucrat that claims to
understand agriculture because they regulated lots of programs
and talked to farmers and other folks from rural America.
He is from a farm near Marcus, Iowa. This is an individual
that understands rural America because that is where he was
raised. He has had dirt under his fingernails for decades. He
knows what it means to be a farmer and to try and make a living
and support a family in rural Iowa. He will bring extraordinary
talent and experience to the Under Secretary's position from
his work on the Board of Directors of the Federal Reserve Bank,
to his success in helping to develop Heartland Care Center in
Marcus, Iowa, a cooperative for senior citizens.
Whether it is big city relationships that he has
established or whether the care of senior citizens in rural
America, he brings a breadth of background to this job.
Now, I have noticed from newspaper articles that several
organizations will be testifying against his nomination. Some
of these, like the Iowa Citizens for Community Improvement, is
a well-established organization, credible in their helping to
improve lives in rural America. I have worked with them on many
issues. Or there is a African-American group that represents
farmers, who will be testifying. I have had an opportunity to
work with that group as well on helping African-American
farmers get legislation to sue the FSA because they did not
get--because they were discriminated against. All I can say is,
as these groups come to present their opposition, I would ask
them to take into consideration that there are a lot of people
who will be testifying as well, who know Tom personally, and I
would ask the committee to give fair consideration to all these
points of view.
I do not blame anybody who wants to testify in any
particular position, but I hope that we will give primary
consideration to those individuals who know Tom well, and so I
am prepared now to make some references to these, a strong base
of support that I know Tom has because they have worked with
him. A number of these folks wrote to my colleague, Senator
Harkin, who is Chairman of the committee, Senator Lugar as the
ranking member. They also wrote to me. The reason I am
mentioning these folks is because they have known Tom for
years. They are his neighbors, coworkers, peers. These are
folks not speculating about Tom. They know him and they know he
will do a great job as Under Secretary.
Tim Burrick, a farmer from Arlington, Iowa, former
president of the Iowa Corn Growers' Association, wrote, quote:
``I know him personally, and I can attest that Tom is a good
and decent man who values, not disparages, diversity in all its
forms. I believe that you'll find his intentions and his views
on diversity nothing short of honorable.''
James Kersten, Chief Operating Officer, Heartland
Communications, Fort Dodge, wrote, quote: ``Mr. Dorr is very
qualified for this position. I believe he will work hard to
help Iowa and other rural States expand and diversify their
economies.''
David Cruz, President of Comstalk Investments from the
little town of Royal, Iowa. Senator Harkin, this is the same
person that wrote a very nice piece about you and I, that when
we work together, things can get done for agriculture. Mr. Cruz
wrote: ``Tom Dorr is a worthy candidate for USDA Under
Secretary. I encourage your support of the President by
confirming his nominee.''
Mike Hunter, President of the Cherokee State Bank; LeRoy
Shone, Cherokee County Supervisor; Charles Sand, President of
Sands of Iowa; Darryl Hawk, President of the Little Sioux Corn
Processors; Darryl Downes, Mayor of Marcus; Ray Wetherall,
Cherokee County Supervisor; Kenneth Olgren, President of
Farmers State Bank, in a letter collectively signed, wrote:
``We would like to request your efforts to get Tom Dorr
confirmed as Under Secretary of Agriculture for Rural
Development. We feel his leadership will not only benefit
Cherokee County but all of rural Iowa.''
Two more. Lee Cline, Chairman, National Corn Growers, has
asked me to enter in this record, a strong statement in support
of Tom, so if that is all right, Mr. Chairman, I would like to
have that entered.
The Chairman. Without objection.
Senator Grassley. There are many more, but I will conclude
with only one more from Dr. William C. Hunter, the Senior Vice
President and Director of Research of the Federal Reserve Bank.
Dr. Hunter hoped to be here in person, but he states this in
his letter. Quote: ``I have known Tom for almost 7 years and
have come to greatly respect and admire his dedication to the
development of sound economic and agricultural policies. Tom
was one of a handful of people to understand that while the
adaption of technological advances in the farm sector would
lift productivity to new levels, these same changes could also
have adverse implications for the viability of the traditional
family farm. In particular, he often expressed concern for the
plight of the traditional family farm. Tom continually raised
concerns about the lack of coherent plan for maintaining the
viability of the small family farm. As an African-American,''
Mr. Hunter remarks, ``I have never heard him offer disparaging
remarks about people of color, the intrinsic value of diversity
or about small farmers.''
Before I give my closing paragraph, I just thought of Mr.
Dorr's service on the Iowa Board of Regents, and in my 42 years
of serving Iowa public office, both as legislator and as State
legislator, Congressman and senator, you can measure the
quality of people in the State of Iowa that serves on the Board
of Regents. I speak, whether it is Governor Loveless, Governor
Hughes, Governor Ray, Governor Branstad, or even now Governor
Vilsack--so that is a range of Republicans and Democrats--
people that serve on the Board of Regents only get there
because they are outstanding leaders in their field, in public
service, in civic duty, and also because they are well
qualified to govern higher education in the State of Iowa,
consequently our three universities.
In closing, I know that Tom has spoken to a few of the
members of this committee personally. I hope those meetings
went well. He is a qualified farmer from Iowa who wants to make
a difference, and that is why I am here introducing him. I want
more people like Tom, farmers from Iowa and other rural areas
of America, to get involved in agriculture. That is why I
pushed so hard to make sure that if we were not going to have a
Secretary of Agriculture that could speak about having dirt
under their fingernails, at least we had deputies who had dirt
under their fingernails before coming to these very important
positions. People coming from the farm to leadership in the
U.S. Department of Agriculture is very important for the
preservation of the institution of the family farm in America
agriculture.
This proposition serves us well to draw from family
farmers, their knowledge and experience, because it is
invaluable and it is impossible to duplicate. After you listen
to Tom, I am confident that you will agree with the President's
choice.
Thank you, Mr. Chairman.
[The prepared statement of Senator Grassley can be found in
the appendix on page 88.]
The Chairman. Thank you, Senator Grassley.
Senator Baucus has to leave very shortly, and I will
recognize him for a statement, but let me just begin this part
of today's hearing by picking up I guess a little bit where
Senator Grassley just left off, by saying that few nominees for
senior positions at the Department of Agriculture have
generated quite the degree of interest that we have seen here,
and unfortunately, that is not really a positive thing either,
one way or the other. Frankly, most nominees at USDA go through
the committee without a lot of controversy.
Well, obviously, if you read the papers or read my mail,
one would see that this one has been different, and frankly, I
have been surprised by the level of opposition that has been
expressed. I cannot say that I am happy about that, or the time
that we now need to spend to appropriately and fairly consider
this nomination. We are in the midst of the conference on the
farm bill, and there are many, many other priorities that need
our attention. However, I have said that we should fairly hear
this matter, and that we plan to do so today or for as long as
it takes. That is our responsibility and we will meet that
responsibility.
Let me assure the candidate, as I did in a private meeting
last week, and everyone else, that I have an open mind, and am
assured that other members of this committee do also. There are
issues that need to be explored, and concerns that need to be
addressed. We will do so fairly and try to finish within a
reasonable period of time. I expect, Mr. Dorr, that there will
be a fair number of written followup questions, especially from
members who told me they could not be present this morning, and
before the committee moves to a business session to consider
reporting the nomination, we will need to consider fully the
information gathered at the hearing today along with any other
information which is properly brought to the committee. Mr.
Dorr, with that said, and before I recognize you, I would just
recognize the Senator from Montana for a statement, because I
know he has to leave.
STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM MONTANA
Senator Baucus. Thank you very much, Mr. Chairman, and I
thank my fellow colleagues for indulging here.
Mr. Dorr, I cannot tell you how important the position of
Under Secretary of Rural Development is to the State of
Montana. It is critical. There are people who have had that
position in Washington and also in Montana, for example, who
have helped breathe economic growth into our State. I say this
because I am very concerned about statements that have been
attributed to you and people's reactions to your concept of
agriculture. The statement that is attributed to you, is 1998,
I guess the ``New York Times'', basically saying that you
envision a Nation of 225,000 acre farm operations. I do not
know if you said that or not, but at least that is in the
papers. A little quick calculation shows that is a place of
about 350 square miles. I know you have this concept of pods,
and it is very technologically organized and computerized and
so forth, which raises a whole other set of questions. I have
to tell you, we do not have any places in Montana that large
with the possible exception of Ted Turner, and he is not really
a Montanan.
[Laughter.]
I say this because we are a State where agriculture is in
dire straits and small towns are in dire straits. USDA Rural
Development provides the infrastructure in many cases for small
towns in rural America, towns under a population of 10,000, for
example, water, sewage and so forth. If, unfortunately, your
vision were to materialize, at least the vision as it has been
represented, all of those small towns would die on the vine,
and you will be working at cross purposes with your vision.
Clearly it will not work. You cannot have both.
My real deep concern is you have this vision that is
nearly, it is almost in your DNA, which you are going to be
driving for, which is antithetical to rural America,
antithetical to rural America. That is my worry. That is my
concern.
Now, I know you will come back and say, ``Well, gee, we are
trying to liberate farmers so they do not go down the road of a
lot of chicken producers and a lot of hog producers and maybe
even some cow producers that are being taken over in a certain
sense by the packing industry. I understand all that. Your
vision, as I see it, is just the same anyway, because nobody
would own his own place, very few will; rather they will be
working for the people like you. They do not have their own
place.''
I say that also because that is the comments, like I say.
Neil Harl has made comments to the fact that your concept is
very unusual. I have a quote here. It says it creates a sector
of serfs, very respected economist, Iowa State University.
I just wanted to say to you, this is not fair I have to
leave, because you are not able to answer the questions I am
posing, but I must leave, but if you are confirmed, Mr. Dorr, I
want you to come out to my State of Montana, and I want you to
walk around with those folks, and I want you to see how
impossible it is, it is impossible, and it is wrong to pursue,
quote, your vision.
Now, I appreciate that agriculture needs a lot more
technology. We can have a lot more data. Whether it is weather,
soil conditions, fertilizers and whatnot, I agree with all of
that. Our farmers are doing it. Not in the grand scale that you
are talking about which is so technical and so money driven,
and it is so contrary to the lives that Montana farmers and
ranchers want to lead, that is, having their own place and
making a go of it. I am just deeply concerned that it is too
focused on something you think makes too much sense. You
probably made a lot of money doing it for yourself and your
family, but it is not the American way of life for agriculture.
I hope you think very seriously about that if you are
confirmed.
Thank you, Chairman.
The Chairman. Thank you, Senator Baucus.
I recognized Senator Baucus because he does have to leave.
My plan is to recognize Senator Lugar. I want to recognize Mr.
Dorr for his opening statement, and then I know our
distinguished Congresswoman Eva Clayton is here, and has been
waiting to testify. I will recognize Senator Lugar for his
comments, and then I will recognize you, Mr. Dorr, for a
statement. I will dismiss you and I will bring up the panels,
and we will recognize Congresswoman Clayton first off at that
point.
Senator Lugar.
Senator Lugar. Thank you, Mr. Chairman. I simply want to
thank you for scheduling this hearing. It is very important
that we hear from the nominee. I was impressed, and
Congresswoman Clayton will make these comments, I suspect, in
her statement, but she points out that farm income amounts to
less than 3 percent of total rural personal income, and among
farm families only 12 percent of total farm income comes from
farming. This illustrates the reason why many of us in this
committee, during markup and floor debate, were strongly in
favor of much greater sums for rural development, and some
specific program suggestions that have come forward in the farm
bill that we have passed.
What I look forward to pointing out, Mr. Dorr, is your
strategy for rural development in a comprehensive way. That is
the position for which you have been nominated. It is an
extraordinary priority of this committee and of the Senate as a
whole as is spoken, and I look forward to that testimony.
I thank you, Mr. Chairman.
The Chairman. Thank you, senator.
Mr. Dorr, welcome to the committee, and please proceed with
your opening statement.
STATEMENT OF THOMAS DORR, OF IOWA, TO BE UNDER
SECRETARY FOR RURAL DEVELOPMENT FOR THE
DEPARTMENT OF AGRICULTURE
Mr. Dorr. Thank you, Mr. Chairman, Ranking Member Lugar.
Senator Grassley, I am most appreciative of your kind and
gracious introduction.
I am deeply honored by the nomination of the President to
serve as Under Secretary for Rural Development. It is with a
great deal of humility that I appear before you today in this
confirmation process.
I am a farmer from Marcus, located in Northwest Iowa. My
great grandfather, a German immigrant, was the first
homesteader in Amherst Township in Cherokee County. Even today
a single large tree marks the spot near the creek where he
built his first sod home. As a fourth generation farmer, I
operate a corn and soybean farm, a grain elevator and
warehouse, and also finish swine in a business with other
family members.
I am the second child and eldest son of a family of nine
children. Only two of us, my brother John and I, remain in
production agriculture. My father is deceased, and although my
80-year-old mother, Margaret Dorr, would like to have been
here, her health precludes that. However, without my parents'
guidance, support and love, I would not be here today.
I would like to take just a moment to introduce my wife of
over 30 years, Ann Dorr, our two children, our daughter Allison
and her husband Karlton Kleiss of Des Moines, and our son,
Andrew, sitting next to Ann, who is a student at the University
of Iowa. I have a brother, Kurt, in the crowd also, who is from
the Chicago area. Kurt is in the back.
Finally, I would like to introduce three other very close
friends of mine who traveled here from Iowa to be with us
today. One is Keith Heffernan from Des Moines, Iowa, Bob Engle,
my banker from Marcus, Iowa, wanted to be sure he was here; and
Rod Ogren, the Director of Economic Development from Marcus.
The Chairman. We welcome you all to the committee.
Mr. Dorr. These friends, family members and many others,
have supported me in the quest to maintain the family farm for
nearly 30 years. The view that there is a special and unique
synergism between the value of family and farms is not a myth.
It is real. It is worth protecting and revitalizing. Farming is
one of the very few endeavors in which those who labor realize
that they truly do not control their own destinies, a higher
order, God, or the forces of nature, however you may view it,
created a particularly unique set of circumstances which make
it necessary for farmers to develop relationships with their
families and neighbors in order that they may survive.
My father and mother embodied this realization by their
examples, of civic and community involvement. It was their
philosophy that to whom much was given, much would be expected.
Early in my career I was urged by my parents to be responsive
to the needs of our community and agriculture.
After spending nearly 8 years attending college, serving in
the military and working for an educational research
organization, I returned to the family farm in 1972. At that
time agriculture was viewed as dynamic and growing. We were
going to feed the world.
In the mid 1970's I became actively involved in the Iowa
Corn Growers Association, served on its Board of Directors, and
worked hard to pass the first ever statewide corn check-off in
the nation. Later I was elected by my peers to serve on both
the Board of Directors and the Executive Committee of the
National Corn Growers.
In addition to my agricultural service, I was nominated and
confirmed to serve a 6-year term on the Iowa Board of Regents,
and I served two 3-year terms on the Board of Directors of the
Federal Reserve Bank of Chicago.
Of all my efforts in public service, those involving local
issues have been perhaps the most meaningful to me. One such
example is the successful development of the Heartland Care
Center in Marcus. I helped organize and became the first
president of that Board of Directors.
The Heartland Care Center project led to a successful
community-wide effort, which resulted in the construction of a
much needed 50-bed extended care and nursing home facility. It
is significant because it helped maintain the viability of our
rural community. Instead of having to place elderly family
members in facilities 15 or 20 miles from our community, their
licensed home now allows our loved ones to remain near their
families. In addition to solving this very personal need, it
also created job opportunities within the community.
Significant changes are taking their toll on the rural
landscape. Since the late 1980's two major events have had a
dramatic effect on the structure of rural America, the
development of the Internet and related technologies, and the
growth of global competition. However, if we can determine how
to treat these and other changes as opportunities, I believe it
may be possible, it may be possible to revisit the dynamics of
the early 1970's, the period which so effectively enticed Ann
and me, and many more like us, back to the family farm.
Examples of these possibilities may involve focusing on how
to conserve and utilize the natural resource base of this
country. By developing ways to cost effectively generate
renewable energy resources, improve water quality through
farmer-owned filtration opportunities, or other yet unknown and
undeveloped ways, we may have the potential to develop
significant new income sources for America's farmers and
ranchers.
These are just a few examples. The issue becomes how do we
preserve the integrity of rural America for those who not only
do the farming, but for those who support and share in the
risks of living in rural areas? It is a difficult charge, one
which all of us who love rural America and live in it, have
struggled with for some time.
Hopefully, by working with you to explore these and other
possibilities, our collective efforts will make them relevant,
accessible, and profitable for rural America.
If confirmed, I look forward to working with each of you to
make this rural rejuvenation, which all of us so desperately
desire, a reality. Thank you for your consideration, and I look
forward to your questions.
[The prepared statement of Mr. Dorr can be found in the
appendix on page 101.]
The Chairman. Thank you, Mr. Dorr.
As I stated, we have a distinguished member of the House,
and a senior member of the House Agriculture Committee here. I
would ask you, Mr. Dorr, if you could please take a seat back.
We will bring these panels to the table and then ask you to
come back for a question and answer session at that time.
Mr. Dorr. Thank you.
The Chairman. Thank you, Mr. Dorr.
I would like to bring the panel to the table. The first
panel is the Honorable Eva Clayton, Congresswoman from North
Carolina; Mr. Dennis Keeney of Ames, Iowa; Mr. George Naylor of
Des Moines, on behalf of the Iowa Citizens for Community
Improvement; and Mr. Leon Crump of East Point, Georgia on
behalf of the Federation of Southern Cooperatives.
In consultation with Mr. Dorr last week, we asked who he
would like to have testify on his behalf and after this panel,
we will have a second panel with Mr. Ron Langston, Ms. Nancy
Hier, Mr. Varel Bailey, Dr. Thomas Fretz and Dr. Constantine
Curris.
That is how we will proceed, and then we will bring Mr.
Dorr back to the witness table for further questions by the
Senators.
Congresswoman Clayton, as a senior member of the House
Agriculture Committee, we welcome you here. I apologize that
you had to wait so long, and of course, we look forward to
working with you to get a farm bill through as we meet in
conference.
Congresswoman Clayton, again, welcome to the committee.
Your statement will be made a part of the record in its
entirety, and please proceed as you so desire.
STATEMENT OF HON. EVA CLAYTON, A REPRESENTATIVE IN CONGRESS
FROM NORTH CAROLINA
Mrs. Clayton. Thank you, Mr. Chairman. Good morning,
Chairman Harkin and Ranking Member Lugar and other members of
the committee. I appreciate the invitation to appear before you
today regarding the nomination of Thomas Dorr for Under
Secretary for Rural Development at the Department of
Agriculture. As you may know, I have long had a great interest
in the topic of rural development, especially for under served
and minority communities such as that I represent in the First
District of North Carolina. With your consent, I ask that my
entire statement and attached materials be entered into the
record.
The Chairman. Without objection. Congresswoman, we are
going to try to keep it to 5 minutes if we could, but
obviously, I am going to give you as much time as you need.
Mrs. Clayton. I will try my very best.
I come before you today on behalf of almost 20 Members of
the Congressional Black Caucus who wrote to you expressing deep
concern regarding the proposed nomination of Thomas Dorr. I am
glad you have called this hearing today to give Mr. Dorr an
opportunity to explain some of his past statements and also to
lay out his vision for rural development at USDA, particularly
for under served and minority communities.
Mr. Dorr visited me earlier this week, and I was pleased to
listen and discuss the issues raised here in my testimony. I
shared with Mr. Dorr that my only knowledge of him were the
insensitive and troubling remarks reported, and explanations
would need to reach a very high bar indeed to overcome the
hurdle that he placed for himself.
I would like to stress at the beginning though that this
hearing ought not to be simply a referendum on Mr. Dorr's
statements regarding economic development and ethnic diversity,
though it should be a topic of discussion. Rather, this hearing
must concern much larger issues, should be about the decline of
rural America, it should be about the tremendously
disadvantaged communities and rural areas throughout the
country, about Mr. Dorr's vision for the resurrection and
revitalization of these communities, and about his
qualifications to do so.
Let me make no mistake about the importance of this task,
for hundreds of communities across the country this is a matter
of seriousness and urgency. I represent the First District of
North Carolina. The First District of North Carolina is a
majority black district, rural district in Eastern North
Carolina. My district has been hit hard in recent years.
Repeated hurricanes, loss of textile and manufacturing jobs,
and serious downturns in the agricultural economy, all have
taken a serious toll on the communities I represent. The rural
problem of which President Theodore Roosevelt spoke almost 100
years ago continues to exist in Eastern North Carolina. The
administration and the Senate Agriculture Committee should
consider carefully the extent to which this nominee for Under
Secretary for Rural Development has the capacity, the
creativity, and the energy to approach the tremendous challenge
posed by struggling rural communities.
I would also like to stress the need of rural America to go
far beyond agriculture. No one familiar with rural communities
could fail to understand the critical importance of the
agricultural economy for rural communities. The farm sector has
long played an important role in the prosperity for rural
families across America. Rural America does not end as the
field's edge. In fact, statistics bear witness to the fact that
we must think beyond the farm sector when working for the
revitalization of rural America.
Today, farm income amounts to less than 3 percent of total
rural personal income. Senator Lugar recognized that. Even
among farm families, only 12 percent of the total farm income
comes from farming, and in 1999, 90 percent of all farm
operators' household income came from all farm sources. Given
these statistics, it is surprising that Mr. Dorr's vision for
rural America involves farms of over 200,000 acres and
increasingly large and vertically integrated livestock
operations.
Until we reinvigorate our rural communities and farm
economy, we need someone with a commitment to support family
farms as strongly as he supports big corporate farms, and who
will recognize that simply increasing the scale of the farm
economy will not be a panacea for the ills of rural America.
Thomas Dorr's preference for large-scale agriculture and
his statements linking the lack of diversity with economic
prosperity simply do not mesh with the mission of USDA Rural
Development. USDA Rural Development Long-Range Plan 2000-2005
states that the program delivery depends on working in
partnership with ``small farm operators and organizations that
represent small farm interests; minorities' organizations; and
community-based and nonprofit organizations.'' End of quote.
I would now like to reference a letter from Members of the
Congressional Black Caucus to the Senate Agriculture Committee
leadership that is the impetus for my appearance here today.
This letter enumerates quite clearly the issues that require
serious examination by this committee.
The letter notes that Mr. Dorr's statement at an
agricultural conference sponsored by our State university in
December 1999, while I am aware that many here are familiar
with these comments, I believe that they are worthy of noting,
and I quote.
``And I know this is not at all the correct environment to
say this, but you ought to perhaps go out and look at what you
perceive the three most successful rural economic environments
in this state...you'll notice when you get to looking at them
that they are not particularly diverse, at least not ethnically
diverse. They're very diverse in their economic growth, but
they're very focused, uh, have been very non-diverse in their
ethnic background and their religious background and there's
something there obviously that has enabled them to succeed very
well.''
That Mr. Dorr would make a comment such as this is puzzling
at best, deeply offensive at worst. He did share with me in our
conversation the context and how the remarks came to be made.
I, for one, cannot help but wonder what the correct environment
for such a comment would be.
However, it is imperative that we not simply look at this
statement in isolation. These comments and the nomination of
Mr. Dorr for the Under Secretary for Rural Development must be
placed within a long history of civil rights discrimination and
struggle at the Department of Agriculture. I would note,
parenthetically, this has been acknowledged by you, the U.S.
Senate, because you indeed included an Assistant Secretary for
Civil Rights at USDA during the markup of a farm bill.
The civil rights abuses at the Department of Agriculture
are well known. The consent decree of Pigford v. Glickman class
action lawsuit by black farmers has led to the payments of
hundreds of millions of dollars to farmers who have made it
through the complicated settlement procedure. These settlements
are just a fraction of the real cost to these farmers and their
families have, and in most cases, continue to face.
The Congressional Black Caucus has endeavored for many
years to rectify the Department of Agriculture bias against
minority farmers, and to improve the capacity at USDA to work
with minority and economically disadvantaged farmers. To
confirm Mr. Dorr as the Under Secretary for Rural Development
without a deeper understanding investigation into his
sentiments regarding ethnic diversity, would send the message
that the administration lacks an adequate commitment to civil
rights and minority farmers.
I ask as well that the committee bear in mind the
unfortunate fact that many of the poorest communities in our
country, those most in need of rural development assistance,
are rural communities of color, stretching from the Indian
reservations of the Southwest, to Latino border communities,
and across a deeply impoverished black belt of the Southeastern
United States. The Under Secretary for Rural Development is
charged above all else with working with these communities and
supporting them in their own efforts to create sustainable
livelihoods for their residents.
The intersection of race and poverty is not a coincidence,
nor should it be incidental to this hearing. Disadvantaged
rural communities throughout the country know what it means to
be disregarded and ignored by economic development experts, by
state officials, and by Federal programs. While this disregard
may not be intentional or malicious, it is not less real and no
less painful to those communities or their residents. While it
is certainly not my intent to tar Mr. Dorr with the accusation
of racism, I do urge the committee to remember that race and
rural poverty go hand in hand. While there is certainly more
than enough disadvantage in rural America to go around, and
while I am all too aware that poverty knows no racial or ethnic
boundaries, it is nonetheless the case that for communities of
color, poverty is persistent, deeper and consistently more
widespread.
In assessing the qualifications of Mr. Dorr for Under
Secretary for Rural Development, I ask the Senate to step back
and to look at the long history of discrimination of which I
have spoken. The question before the committee should not, in
my opinion, be whether Mr. Dorr's comments were in themselves
unsettling enough to accept or reject his nomination. Rather,
the question is whether or not the administration has brought
to bear on the nomination the care that is necessary to ensure
the eventual appointee is not just aware of this history of
discrimination, but actively concerned about it.
Should the Senate confirm Mr. Dorr as the Under Secretary
for Rural Development at the United States Department of
Agriculture, I will work cooperatively with him and will
continue to vigorously challenge him on these important issues
facing rural America.
Thank you very much, Mr. Chairman.
[The prepared statement of Congresswoman Clayton can be
found in the appendix on page 89.]
The Chairman. Congresswoman Clayton, thank you very much
for your statement, for your patience in being here today. I
know you are extremely busy, and if you have to leave, please
do so.
Mrs. Clayton. Thank you.
The Chairman. We look forward again to working with you on
the Conference Committee.
Mrs. Clayton. Thank you.
The Chairman. Thank you.
Now I would turn to the testimony of Mr. Dennis Keeney of
Ames, Iowa, and I will start enforcing the 5-minute rule. We
will permit statements of up to 5 minutes. At that time I am
going to have to cut it off. The time is getting late. You
certainly can understand that we would let the distinguished
Congresswoman and others go on a bit longer than the 5 minutes.
We thank you for being here, and Mr. Keeney, your statement
will be made a part of the record, and please proceed with your
statement.
STATEMENT OF DENNIS KEENEY, AMES, IOWA
Mr. Keeney. Thank you, Chairman Harkin and Mr. Lugar, for
inviting me to talk in front of you and to the rest of the
committee.
I am probably here because of my background in directing
Leopold Center for Sustainable Agriculture. I directed the
Center starting in 1988 and was the first permanent director of
the center.
I would like to say that I have a high degree of respect
for Tom Dorr and for his accomplishments, and so this is
concerns that I want to share that we have interacted with on
and off over the years I was director of the Center.
I first heard of Tom when I came from Wisconsin to take the
Leopold Center position, and Tom was explained to me as one who
was known as an innovator in agriculture technology especially
at the large farm scale and was very skeptical of the
sustainable ag. movement. This was 1988, remember, and
certainly Tom was not alone in being skeptical of this
particular movement.
I tried, through the auspices of Stan Johnson and Keith
Heffernan, to find a common ground with his Tom, where his
concepts and the Leopold Center could possibly fit because I
realized we should be working together if we could. It just
never quite worked out. I believe our closest encounter was
trying to get some work going in precision agriculture, but
this technology really did not fit the Leopold Center mission,
which was to try and get management skills that keep farmers on
their land.
It was apparent early in my tenure that Tom Dorr was going
to be a strong critic of the Leopold Center legislation. It is
my belief that at that time Tom considered sustainable
agriculture to be a step backward from modern agriculture
technologies, and that he viewed the concerns that row crop
farming was damaging the environment as misguided.
Tom's criticisms of the Leopold Center did not particularly
concern me. In fact, I found his views were a good measure to
use in our progress. Were there ways we could address the
interest of those in Iowa who see agriculture more in terms of
commodities and profits as opposed to others who see it in
terms of communities and people? Mr. Dorr's sharpest criticisms
of some of our work dealt with the sociology agenda of the
Center and the College of Agriculture, particularly the use of
surveys to find out what was going on in agriculture.
Mr. Dorr's generally critical but hands-off attitude toward
me and the Center changed about the time he became a member of
the Board of Regents. At that time he was strongly questioning
many things we had under way, especially our work in nitrogen
management and my leadership of a Certified Crop Advisor
Program. I would have welcomed more discussion of our
difficulties, but again we never seemed to reach a common
ground on this.
Instead at times Tom used his influence to question us
negatively in public and in private. It was not a pleasant time
because of his status as a regent.
We continued to invite Tom to the Leopold Center advisors
board meetings, give him specific notice of our agendas, mainly
because he was on the agriculture Regent at that time. He did
attend several meetings, and at times offered some discussions.
There was nothing particularly negative in the inputs that Tom
had to these meetings.
I can only give a very general impression of how Tom might
perform in the role he is being asked to fill. I do not see him
as a leader for rural development issues except as they might
pertain to large business and farming groups, and it would be
hard for me to see him relating to the needs of people who are
trying to stay on the land and face financial adversity, or
citizens who are in need of help because they have not had the
opportunity to share in the financial gains of our country over
the past 20 years. Perhaps Tom has or is changing his views.
That we will hear from him I am sure. If he is confirmed, I
would hope that he listens well to those who so badly need the
assistance of the Government to improve their quality of life.
Thank you for this opportunity.
[The prepared statement of Mr. Keeney can be found in the
appendix on page 104.]
The Chairman. Thank you, Mr. Keeney.
Before we question our panel, we will now move on to the
testimony of Mr. George Naylor from the National Farm Action
Campaign. We have your statement, Mr. Naylor, and it will be
made a part of the record in its entirety. Please proceed.
STATEMENT OF GEORGE NAYLOR, STEERING COMMITTEE MEMBER OF THE
NATIONAL FARM ACTION CAMPAIGN,
APPEARING ON BEHALF OF THE IOWA CITIZENS FOR
COMMUNITY IMPROVEMENT, DES MOINES, IOWA
Mr. Naylor. I would like to thank Senator Harkin, Senator
Lugar, and the committee for inviting me to testify. My name is
George Naylor. I farm with my wife and two sons near Churdan,
Iowa. Senator Harkin has been my representative, first in the
House and now in the Senate, for the full 25 years that I have
farmed, and I want to thank him for his good representation. I
would also like to say hello to Senator Grassley and thank him
for his good representation also. I appear here as a member of
the nonpartisan group, Iowa Citizens for Community Improvement,
and as a steering committee member of the National Farm Action
Campaign, the group that has spearheaded national opposition to
Thomas Dorr's confirmation.
I appear today to ask you to reject the nomination of
Thomas Dorr as Under Secretary of Development of the USDA.
Widespread opposition to this nominee has grown as America has
become aware of Thomas Dorr's disastrous vision of the future
of rural America and his reprehensible views of equating
economic success with a lack of religious and ethnic diversity.
165 groups signed a letter to the Senate Agriculture Committee
opposing Mr. Dorr's nomination. Some of those groups were the
American Corn Growers Association, the Sierra Club, Defenders
of Wildlife, Humane Society of the USA, the NAACP, La Raza,
LULAC, AFGE and the United Farm Workers.
I urge you to read the supporting documents attached to my
written testimony, and ask that they be included in the
official record.
Our member organizations believe that the family farm is
one of the Nation's most precious but misunderstood
institutions. The family farm is not merely a nostalgic
artifact from the past. It is the foundation of modern
sustainable economy in the 21st century. Family farmers have
provided a safe and reliable food supply while serving as a
backbone of rural economic development. Family farmers
represent personal initiative and personal responsibility. When
family farmers do something right or wrong, you know who is
responsible. Because family farmers want to pass their land on
to the next generation, we have the irreplaceable incentive to
serve as good stewards of the land and water without the
necessity of costly regulations or incentives.
It is important to contrast this tried and true institution
with the corporate industrialized model of agriculture that
increasingly invades our neighborhoods. Absentee landownership,
contract farming and polluting animal factories are rapidly
bringing blight to our beloved landscape. Absentee investors
take profits out of the community while vulnerable immigrant
labor languishes in poverty. Property values decline, family
farmers leave the land, and small communities lose their
schools, grocery stores, and churches and health care. It
should be clear to all that corporate industrialized
agriculture is not compatible in any shape or form with
healthy, vibrant rural communities.
However, Thomas Dorr's publicly touted vision of the future
of American agriculture embraces that corporate industrial
agriculture. It is clear that his mega-farm folly would clearly
not buy inputs locally resulting in the closure of businesses
up and down Main Street. Tom Dorr may say that farm
consolidation is inevitable and that we can make it a good
outcome for family farmers in rural communities. Well, I have
heard that story before. 23 years ago I served on the Iowa Corn
Promotion Board, where I heard the same hollow promises from
the National Corn Growers Association. They said just wait for
exports to bring corn prices up, and in the meantime get bigger
and more efficient. My organization's hog farmer members heard
the same thing from the National Pork Producers Council, while
polluting vertically integrated operations nearly took over hog
production.
Given the economic distress in rural America, why should
Tom Dorr and these organizations have any credibility at all?
One of the strengths of American agriculture is diversity
of techniques and the supporting economic institutions, from
banks to suppliers, veterinary clinics and repair shops. This
diversity and the economic development associated with it would
disappear.
The growing conformity of production techniques would make
our food system more brittle and subject to catastrophic
mistakes. Does anyone really believe that huge centrally
managed farms, where farmers become serfs on the land, fits
with the American dream?
In an April 8th article of 2001, in the ``Des Moines
Register'' Jennifer Dukes Lee said that, quote, ``In his
hometown, farmers call Tom Dorr the poster boy of corporate
agriculture.'' One Republican farmer, who has known Tom Dorr
since he was a child, is quoted as saying, ``He would be very
counter to rural development unless you would consider that
rural development is one farmer in every county.'' At a
conference at Iowa State University he joked that because of
his views, he was the pariah of Marcus, Iowa.
I see that my time is running out, and I would like to beg
for a little more time, considering the bombshell that came
this morning in the ``Des Moines Register'', and I will leave
some of the other issues to my colleague, Mr. Crump, here.
Iowa CCI filed a lawsuit, and because our Freedom of
Information Act request for information about an alleged
incident where Mr. Dorr received payments from FSA that he was
not eligible for, and it turns out that according to the ``Des
Moines Register'' this morning, that what we suspected is in
fact the case. In the ``Des Moines Register'' article it says
that Thomas Dorr arranged his trust, allegedly arranged his
family trust, and quote, ``are operated with ASCS to quite
frankly avoid minimum payment limitations.'' This was in a
transcript of a tape recording that Mr. Dorr was having with
someone else.
The Chairman. Mr. Naylor, I am going to have to cut you
off. I assure you that the committee members have copies of
that article.
Mr. Naylor. OK. Well, in conclusion, I would ask that this
committee take this breach of integrity seriously, and
therefore, and for all the other reasons also, oppose this
nomination. Thank you.
[The prepared statement of Mr. Naylor can be found in the
appendix on page 106.]
The Chairman. Thank you, Mr. Naylor. I do have some other
letters that have come from other groups, and those will be
made part of the record.
The Chairman. Next we turn to Leon Crump of the Federation
of Southern Cooperatives and Land Assistance Fund.
Mr. Crump, your statement will be made a part of the
record, and again, please proceed for 5 minutes. Thank you.
STATEMENT OF LEON CRUMP, ON BEHALF OF THE
FEDERATION OF SOUTHERN COOPERATIVES/LAND
ASSISTANCE FUND, EAST POINT, GEORGIA
Mr. Crump. Thank you, sir. I also brought a petition that
we had signed at a Georgia meeting with over a hundred
signatures, over 200 signatures. I would like to be added part
of the record to oppose to Mr. Dorr.
The Chairman. Without objection.
[The petition can be found in the appendix on page 277.]
Mr. Crump. Thank you so much for having me and giving me
this opportunity. No one would think that a son of a
sharecropper would have an opportunity to speak before members
of the Senate Ag Committee.
My brothers and I were directly affected by USDA. In 1985 I
spoke to a House Subcommittee about Ag. credit problems through
USDA because my brother and I had a farm at the time. We raised
hogs and vegetables. They sold our farm on the courthouse steps
while they had somebody there pushing up the price. Now I rent
land to farm, and my brother since died in 1997. I have
personal experience with the USDA and some of the problems that
they deal with.
They also talked about bringing beginning farmers into
agriculture. Our Government makes loans every day to countries
with no interest for a period of time before the first payment
come due. They can also do that for minority and small farmers.
Let me get to my statement, the reason I am here.
The Federation of Southern Cooperatives has been around for
35 years. We work with farmers in rural communities. We are
licensed to do work in 16 Southern States. We have over 100
cooperatives. We work with 10,000 black farmers, 75
cooperatives, and 35 of those are agricultural cooperatives. We
have 17 credit unions as well with $24 million in assets, and
made $72 million in loans. Under the Rural Housing Program we
develop 350 rural housing units and built 126 multi-family
units. We have been utilizing the Rural Development programs
quite well.
I do not want to take up most of my time. You can read part
of my statement there, especially when you get to the third
page, you will see some of the list of loans that we have
processed, starting with $2.8 million down to $500,000.
The point I want to make right here is this last page, and
I will be through. The above are just some examples of the
essential programs being offered under USDA Rural Development
Agency, and the difference it has made in the black community
in the rural South.
We are very concerned that these successful initiatives
will be jeopardized by the appointment of Thomas Dorr to serve
as Under Secretary for Rural Development. This huge agency has
enormous responsibilities for setting the tone for the
development in rural America. Whoever serves as head of this
agency must understand the needs of rural America, its unique
diversity in terms of minorities, religion and cultures, and
that the strength of rural communities demand local control
self help, diverse entities that develop and foster wealth and
sustainability.
Tom Dorr is not qualified to serve as head of this
important agency. He has stated that North Carolina, with its
hog factory farms should be demolished for development. He
supports then corporate control highly concentrated
agriculture, rather than family farms which have been the
backbone of American development and food safety. He is noted
for saying that companies are economically strong if they are
not diverse in terms of race, religion and culture. His
understanding then and appreciation of the needs of low-income
and diverse communities across rural America are highly
questionable and of concern to family farmers and the minority
community everywhere.
We urge the Senate not to confirm Thomas Dorr. The work of
Rural Development is far too important to communities across
rural America to have as its head someone without an
appreciation for the needs of our diverse population and for
small family farmers, and small landowners and business owners
in general. In fact, there are those who will, at this
testimony, refer at length to the devastating impact to rural
communities because of increased concentration of agriculture.
It is well known that the best stewards of the land are
small family farmers. They have a vested interest in their
major resources, land and water systems. Small farmers live on
the land. They are witness to the daily necessities of
production agriculture, and they will protect their land and
water resources that they have always done in the long term. As
most black farmers and small family farmers, the impact of
forcing most of them off the land because of factory farm
agriculture, the most disruptive and destabilizing of the rural
areas; where else can small black farmers who are forced off
the land go to but the urban areas where their valuable skills
as farmers cannot be utilized. The best investment that could
be made by our country for our economy and food safety is to
assist in the development of sustainable black and minority
farmers, and in fact, all family farmers. Often because of
racism and discrimination, small businesses in the banking
world, opportunities for minority communities is not available
regarding loans, obtaining loans from commercial lending
institutions, technical assistance to access business
opportunities.
The Rural Development Agency has often made a difference
for these minority communities. We must continue with this
important program and continue to build sustainability in our
diverse and rural communities. Dorr is clearly not the person
who can lead the agency in this direction. His corporate
control mentality is not what we need. If he is appointed, then
all the decisions of rural communities and development will
probably be made similar to the devastating corporate decisions
from the likes of Enron, without any input from family farmers
who understand the needs of the rural areas. Our rural
development needs and food safety are far too important to be--
too important and too valuable to be handed over to
irresponsible short-term corporate greed.
Thank you.
[The prepared statement of Mr. Crump can be found in the
appendix on page 124.]
The Chairman. Thank you for your statement.
I thank all the witnesses for being here. I ask you to
stand by because we may have some further questions for you,
but at this time, we will dismiss this panel and bring up
another panel. If you would stay here, we would certainly
appreciate that.
I call to the panel Mr. Ron Langston, Ms. Nancy Hier, Mr.
Varel Bailey, Dr. Thomas Fretz, and Dr. Constantine Curris.
Senator Lugar. Mr. Chairman.
The Chairman. I am sorry. Senator Lugar.
Senator Lugar. Mr. Chairman, in this interval, may I
introduce into the record a number of letters and statements
from neighbors of Tom Dorr or his former colleagues, who wished
to testify, but could not be here today?
The Chairman. Without objection, they will be made a part
of the record.
Senator Lugar. I thank the Chair.
The Chairman. We wil proceed in the order in which I called
the names, and again, you will observe the 5-minute rule. Your
statements will be made a part of the record in their entirety,
and I would start first and welcome Mr. Ron Langston, National
Director, Minority Business Development Agency, U.S. Department
of Commerce.
RONALD N. LANGSTON, NATIONAL DIRECTOR, MINORITY BUSINESS
DEVELOPMENT AGENCY, U.S. DEPARTMENT OF COMMERCE, WASHINGTON, DC
Mr. Langston. Good morning. Mr. Chairman, it is good to see
you again. Senator Lugar, Senator Grassley, who was here, and I
am sure will be back, members of the committee:
I am very appreciative for the opportunity to appear before
the distinguished committee. I am here to support the nominee
for Under Secretary for Rural Development, Tom Dorr of Iowa. My
appearance is not a coincidence. I asked for this opportunity
and the privilege to support a fellow Iowan. I believe Tom Dorr
will follow in the rich legacy of other Iowans who have served
this Nation, and in particular, those who have been leaders in
U.S. and global agriculture.
Tom Dorr and I have much in common. We both have roots in
Northwest Iowa. We have lived among the diversity of the Iowa
plains, a diversity that includes the Dutch, the Germans, the
Irish, Native Iowa Tribes, Latinos, and yes, a historically
vibrant Iowa African-American community.
Mr. Chairman, I dare say that I am probably one of the few
individuals present today, and certainly in this room, who is
African-American, and has actually lived in Northwest Iowa. I
have benefited from the educational system in Iowa and the
warmth and openness of its rich prairie culture. It has been
good to me, Senator, and it has been good to my family.
I have served in the Legislative Service Bureau for the
Iowa General Assembly. I have also worked as a legislative
assistant in this body for Senator Roger Jepsen. I am a former
chair of the Iowa Commission on the Status of African-
Americans. I served as a State Transportation Commissioner.
Early in my career, I was active in the Iowa-Nebraska NAACP and
also at the Des Moines branch at NAACP. I am a member of the
African Methodist Episcopal Church. I am also in good standing
with Omega Psi Phi Fraternity. I am a contributor to a book,
``Outside In, a History of African Americans in Iowa.'' I am
here today in my capacity as an appointee of the President of
the United States within the Department of Commerce.
Now, I have noted all of the above for the record, because
it is important to convey to this committee and to the Senate
that if I believed for 1 second that Tom Dorr was of a mind of
behavior that was contrary to the social, economic and
political upward mobility toward people of color, and
especially African-Americans, I would not be here today
speaking on behalf of his appointment.
The fact is, Senator and members of the committee, I need
Tom Dorr. I need him to help me address issues of minority
business enterprise in under developed areas in rural America,
especially in the deep South. I need this relationship with the
Under Secretary of Rural Development to strategically
collaborate with the Minority Business Development Agency in
areas such as the Black Delta Region of the U.S. MBDA is an
organization in the process of transformation from an
administrative focused organization to an entrepreneurial one.
We believe in entrepreneurship. We believe in an entrepreneur
economy. Agriculture is a major segment of the Nation's
entrepreneurial foundation.
There are great synergies between Agriculture and the
Department of Commerce, Labor and HUD. There is much we can do
together to bring technology, e-commerce and infrastructure to
America's rural communities. I am very excited about the
Department of Agriculture and Department of Commerce working
together to provide value-added opportunities for the National
Minority Business Enterprise community.
Finally, sir, I look forward to also reaching out to
America's historically black colleges and universities, in
partnership with Tom Dorr and the team at Department of
Agriculture.
For the reasons I have noted above, I would ask you, this
committee, and the U.S. Senate, to support the nomine. I thank
you very much.
[The prepared statement of Mr. Langston can be found in the
appendix on page 115.]
The Chairman. Thank you, Ron, for your statement. It is
good to see you again.
Mr. Langston. Good to see you, sir.
The Chairman. Next we would recognize Ms. Nancy Hier. Did I
pronounce that right?
Ms. Hier. Correct, thank you.
The Chairman. Of Marcus, Iowa. Again, we have your
statement. We will make it a part of the record, and welcome
and please proceed.
STATEMENT OF NANCY HIER, MARCUS, IOWA
Ms. Hier. Thank you. Mr. Chairman, members of the
Agriculture Committee, guests.
I, Nancy Hier, live in Tom's home community. I have known
Tom as a student, a business man and a farmer. Of more
importance in my being able to attest to the true character of
Tom, is the fact that there has been a longstanding respect and
friendship between my family and the Dorr family. Three
generations ago they were immigrants who plowed virgin soil and
helped develop a community. My father became involved in a
number of farm organizations that affected farm policy locally
and nationally. At the height of the Depression, Henry Wallace
called several to Washington to write the first USDA farm
program. My father was one of those, of that group of 25. Here
is a citation by President Lyndon Johnson, commemorating the
35th anniversary of that original Agricultural Adjustment Act
of 1933.
Thereafter, I remember discussions between Tom's father and
mine at the kitchen table out at our farm. There was mutual
respect for the vision, the hard work, the capacity to expedite
ideas to fruition. The fourth generation is now finding time to
exchange ideas and challenge their thinking.
All this is to say that I know Tom, I know from where he
comes. His judgment is based on sound moral principles. His
christian ethic overrides all considerations. He has recently
devoted considerable leadership and time to our local church,
and after he moved to Washington, he said that he missed his
church family more than any other group.
Family is foremost in Tom's perspective of a stable
community. His concern is exemplified by not only the unity and
success within his own home, but in the character of his own
children, who are reaching out to serve others. When he
accepted his proposed appointment to Washington, it was
necessary to change his farm operation. As he made preparations
for these changes, the welfare of his employees was dominant.
All effort was made to accommodate their needs. As Under
Secretary he will strive to protect not only the business
aspect of the smaller farm, but also of the coveted lifestyle.
Tom is a man who possesses great energy of purpose. He will
strive to formulate innovative solutions to the problems facing
the small, as well as the large operator. His work ethic will
be directed toward serving the cause of agriculture, not toward
enhancing his political career. He will commit to extensive
homework and then defend his stance, but he will concede his
opinion if shown to be in error.
I believe that the initial newspaper article that got so
many misleading ideas into the public mindset, wasn't due to a
desire to derail Tom's nomination. When you go into a small
rural community unannounced in the middle of the afternoon, you
are not going to find certain men. You are only going to find
certain men at the coffee shop. An entirely different group is
out doing the cattle chores and vaccinating piglets and
auguring soybeans into the truck for sale. They did not get
interviewed, and those of us who know Tom did not recognize him
from the article. To suggest that he is a racist is to deny his
philosophy of life. He has been wrongly accused of intolerance
because his comments concerning diversity were taken out of
context. He applied statistical facts, hitherto unused
criteria, to measure economic success. To his credit, Tom
applied innovative ideas in making his assessment. Besides,
just last Christmas I was part of a discussion that was held
some distance from Marcus. Participants reported Tom's
suggestion that a nearby county bring ethnic diversity to their
labor force in order to enhance their economy. You see, many
understand that he has no racial prejudice.
Spring is coming, and he will very well remember the feel
of the soil under his feet, the aroma, the eye on the weather,
the hope, and the spring rush. With resolve, he will work hard
to sustain and enhance rural development.
Thank you.
[The prepared statement of Ms. Hier can be found in the
appendix on page 118.]
The Chairman. Ms. Hier, thank you very much for a very
eloquent statement.
Senator Lugar. That was very eloquent.
The Chairman. Very eloquent statement.
Next we turn to Varel Bailey, who is no stranger to this
committee. He has been here in the past many times, Varel, from
Iowa. Again we have your statement, Varel, and it will be made
a part of the record, and please proceed.
STATEMENT OF VAREL G. BAILEY, FORMER CHAIRMAN, NATIONAL CORN
GROWERS, ANITA IOWA
Mr. Bailey. Mr. Chairman, members of the committee, ladies
and gentlemen, thank you for this opportunity.
I appear in support of the nomination of Thomas Dorr, USDA
Under Secretary for Rural Development.
I am Varel Bailey, farmer from Anita, Iowa. My son Scott
and wife Jackie and I operate a corn, soybean, grass, cattle,
hog and sheep operation, and I really regret that Senator
Baucus departed, because I am the farmer employee. The night
before last I midwifed quadruplet lambs. It is great to be here
in these surroundings today.
Tom and I have worked together since the mid 1970's. We
were part of a group of farmers that worked to make the
National Corn Growers a federation of State associations. That
group of farmers went on to lobby for check-off legislation,
passed the corn referendum, as was mentioned, and that effort
created the first major push for what was called ``gasohol''
back then, that resulted in the alcohol fuels industry that we
have today. Tom's skills really came to the front during the
1980 grain embargo, as the Corn Growers Association struggled
to find policy solutions for market chaos that the embargo
created. This was followed by policy development work and
lobbying for the 1985 farm legislation and the 1980's farm
financial crisis, and I might add here that we worked on some
of the early work on Farmer MAC, as we thought that there were
things missing in the farm financial arena at that time. We
worked on the corn gluten feed export disputes with the
European communities, Spain and Portugal entrance into EC and
preparations for the Uruguay Round of the GATT. Tom went, as
has been mentioned, to serve on the Iowa Board of Regents and
served the midwest on the Chicago Federal Reserve Bank Board of
Directors. Just three months after the fall of the Iron
Curtain, Tom participated in a delegation to Hungary,
Czechoslovakia, Poland and East Germany. The delegation worked
on agriculture, education and humanitarian issues and resulted
in the formation of the Iowa International Development
Foundation.
Working with Tom over these years on many projects, I have
found that he has many attributes that suit him for the Under
Secretary of Rural Development position. He is smart. He is
intellectually smart and he is street smart. After a
conversation with him, it is obvious that he is a voracious
reader and stays at the cutting edge of technology and of human
thought.
He is visionary. His ability to conceptualize accumulated
nuances into expected trends and goals is uncanny. Tom was one
of the first to identify the forces that are causing the
crumbling of agriculture infrastructure today. Tom couples this
with modern technologies, enabling a quantum increase in the
span of management. The result is a potential concept for a new
food and fiber supply chain. Some perceive this as advocacy for
huge corporate farms to the detriment of family farms.
To the contrary. I value Tom's articulation of these
concepts, because it gives my family farm time to reorganize as
these new supply chains form. My farm can grow vertically and
capture value in these new supply chains, instead of
continuously just competing with my neighbors for more land.
The ever-increasing overhead costs of business require that my
farm lower costs, increase the margin per unit of production,
or increase in size to spread those costs in order to survive.
Those increasing costs are not likely to abate. Early
participation in farming supply chains is very important to my
farm.
I actually participate in a number of rural development
operations in Southwest Iowa, but it is more important to talk
about Tom's attributes here than it is to talk about those
initiatives that are happening today.
He is energetic. Faced with a challenge, his enthusiasm is
contagious. During the 1980 grain embargo debate, the spectrum
of emotion within the group ranged from utter despair to
visceral anger. It was Tom who helped rally the troops and show
that only three things are needed to change the course of human
events. You need a crisis, access to the people who must solve
the crisis, and a plan of action to help the situation. The
Corn Grower developed a 14-point plan, carried it to
Washington, and by lobbying, achieved adoption of 12 of those
points.
He is analytical. His knack for figuring out the drivers of
change and sorting out the optimal alternative solution is
appreciated by all that work with him. Whether the policy
debate was on the payment-in-kind, export enhancements, Spain
and Portugal entrance into EC or the marketing loan programs,
Tom's analyses were important for refinements to make them
work.
He is articulate. His oratory during policy development
debates that makes the point, lists the reasons, and negates
the alternatives, is legendary to all who know him.
He has financial prowess. Watching him look at a business
plan, rough out a rate of return and estimate the various
leverages is a skill not held by many people. His ability to
ferret out the inbred boards of directors, incompetent
management and unwise relationships that leave all the profits
on the table have helped many startup businesses in his area.
He understands the land/labor/capital relationship. He knows
just having financial capital may not make the project succeed.
A combination of money, technology, human capital and social
capital must come together in the right combination to make
rural development work. He understands the easiest way to kill
social capital is make a Federal grant.
He has a set of skills of a chief executive officer. Most
farmers have management skill levels of a plant manager. Tom
definitely has executive level management skills.
He is sensitive. He is aware of the feelings of people
around him and goes the extra steps to be inclusive. If he
seems abrasive, it is calculated to cause a person or group to
rethink their position. He is very aware of the plight of rural
America. He has lived and farmed through the economic, social
and political decline. The difference between Tom and most
other people, that he steps up and tries to help. If a small
town needs a nursing home, he rallies the people to make it
happen. If technology is not getting out of the university
laboratories for businesses to use, he serves on the Board of
Regents and the Wallace Technology Transfer Foundation. If
rural banks are abandoning their customers, he serves on the
Federal Reserve Board. If he finds a farmer in post-Communist
Poland that needs sweet corn processing and communications
capability, he finds used equipment and helps start a new
industry in Poland. If he finds a community in East Germany
that has no medical service, he helps get medicine to those
people. If he seen an opportunity to enhance the way USDA Rural
Development programs stimulate new and economic opportunity, he
steps up and offers his service as the Under Secretary for
Rural Development.
Mr. Chairman, members of the committee, ladies and
gentlemen, I can think of no better person qualified than
Thomas Dorr to be USDA Under Secretary of Rural Development. I
urge his endorsement of his nomination. I yield to questions.
[The prepared statement of Mr. Bailey can be found in the
appendix on page 120.]
The Chairman. Mr. Bailey, thank you very much for your
statement.
Now we will turn to Dr. Thomas Fretz, Dean and Director of
the College of Agriculture and Natural Resources at the
University of Maryland, and your statement will be made a part
of the record.
STATEMENT OF THOMAS A. FRETZ, DEAN AND DIRECTOR, COLLEGE OF
AGRICULTURE AND NATURAL RESOURCES, UNIVERSITY OF MARYLAND,
COLLEGE PARK, MARYLAND
Mr. Fretz. Thank you. Mr. Chairman, Senator Lugar, members
of the committee. I appreciate this opportunity to be here
today. My name is Thomas Fretz. I currently serve as Dean of
the College of Agriculture and Natural Resources at the
University of Maryland, and the Director of Maryland
Cooperative Extension.
I appear before you today because I am pleased to support
the nomination of Thomas Dorr as Under Secretary for Rural
Development as USDA.
I was asked to come before you and appear today, when it
was learned that there was some opposition that was growing out
of the comments which were made at a Visionaries Conference at
Iowa State University in November 1999. I suggest to you today
that perhaps there are only two people in this room that were
present in that conference, and that sat through that entire
conference, and it was Thomas Dorr and myself.
The Visionaries Conference arose as a result, Chairman
Harkin, of an anonymous and enormous gift that came to Iowa
State University and the University was struggling, as was the
College of Agriculture at Iowa State and the Department of
Agronomy, on how to best access and use that gift to really
make a difference.
I participated and I chaired a panel of visionaries that
were brought to Ames, Iowa to think out of the box and to
provide guidance and a vision for the faculty. You should know
by way of background the reason that I was asked to participate
in that conference and the reason that I was asked to chair the
panel of visionaries was that I had served for 5 years as the
Associate Dean of the College of Agriculture and Associate
Director of the Iowa Agriculture and Home Economics Experiment
Station at Ames.
More to the point and to the allegations that Mr. Tom Dorr
made comments that were not supportive of an ethnically diverse
society and environment, I feel they are unfounded, they are
totally unfounded. I observed nothing in Mr. Dorr's comments
during the 1999 Visionaries Conference, nor subsequently in
reviewing the tape of the conference, that would lead me to
believe that he is unsupportive in any fashion of the creation
of a diverse economy. Mr. Dorr simply stated in a panel in
response to a comment that had come from the floor at that
meeting, that many of these funds and programs should be put
into place that would create a more diverse society. He simply
stated what I believe was the obvious, that there are
communities that are not ethnically diverse, but are
economically viable.
I believe we all favor a diverse multicultural society. I
do not think there is anybody here that does not suggest that.
I am confident that Mr. Dorr believes the same. To infer
otherwise I believe is to misconstrue the facts and the
evidence--the facts as they were at the Visionaries Conference
in November 1999. He simply stated the reality, that many rural
communities lack diversity, yet remain economically viable. To
make or construe anything else from his comments is to take
them out of context. That is a misrepresentation of the facts
and the events of November 1999.
Let me close by saying that what I believe Tom Dorr brings
to the Office of the Under Secretary for Rural Development at
USDA is out-of-the-box thinking. He challenges the norm. He
challenges the bureaucratic normalcy which exists within
agencies, and I believe he looks for finding imaginative
solutions to the issues that we face in rural America.
This concludes my testimony, and I stand here today in
support of Mr. Dorr. Thank you.
[The prepared statement of Mr. Fretz can be found in the
appendix on page 122.]
The Chairman. Thank you very much, Dr. Fretz.
Now we turn to the statement of Dr. Constantine Curris with
the American Association of State Colleges and Universities,
former head of the University of Northern Iowa. Welcome, Dr.
Curris, and your statement will also be made a part of the
record.
STATEMENT OF CONSTANTINE CURRIS, PRESIDENT,
AMERICAN ASSOCIATION OF STATE COLLEGES AND
UNIVERSITIES, CHEVY CHASE, MARYLAND
Mr. Curris. Senator Harkin, Senator Lugar, Senator
Stabenow, Senator Dayton, it is an honor to appear before this
committee, and I am pleased to be part of a group that
recommends the confirmation of Thomas Dorr.
I met Tom Dorr in 1991 when I served as President of the
University of Northern Iowa, and he served on the State Board
of Regents. I would note that Mr. Dorr was appointed by
Governor Terry Branstad, a Republican, and was confirmed by the
Iowa Senate, a majority of whom were Democrats.
During the 4 years of our overlapping tenure, I came to
know him through monthly meetings of the Board, special
committee meetings and personal discussions. I found him to be
a man of integrity and commitment. He was, and remains, bright,
thoughtful, well read, and a public policy engaged citizen.
While we do not share similar political philosophies, I respect
him as a creative thinker, a caring citizen, and a genuinely
good person, qualities that transcend politics, qualities that
serve government well.
Much has been stated about his comments at that Iowa State
forum. I was not present. In fact, I was not even in the State
at the time, so it would be inappropriate for me to discuss
that, but I am comfortable in addressing the extrapolations
that some have drawn from that forum. Let me state clearly that
in the 4 years I worked with Tom Dorr, there was never any
instance that raised concerns to me about racist attitudes or
inappropriate values. In all my dealings I found him to be an
individual committed to equal opportunity and civil rights for
all citizens.
I would like to share a personal instance. The University
of Northern Iowa had initiated and funded a collaborative
program with the Davenport School District, 3 hours distant, to
mentor middle and high school African-American students, and to
cultivate their interest in teaching. Because of State revenue
shortfalls and the higher cost of this program, we received
criticism for its continuation. Tom Dorr was a stalwart
supporter. He expressed the belief that our efforts to raise
the educational aspirations of these youngsters was exactly
what we ought to be doing, and that Iowa very much needed an
initiative to staunch the declining number of teachers of color
in the classroom. His support was important to the university
and to the students we served.
Early in 1995 I accepted appointed as President of Clemson,
the Land Grant University of South Carolina. Although most of
my life had been spent in small towns and rural areas, it was
during my nearly 5 years at Clemson that I came to understand
fully the challenges of revitalizing rural America.
The responsibilities of the Under Secretary are significant
and in many ways daunting. What I learned from my experiences
in Iowa and in South Carolina, is that there are no simple or
easy solutions, no tried and true formulas for success. We fool
ourselves if we believe there is an orthodoxy of beliefs, which
if applied, will reverse the declining fortunes in rural
America. I do not think any one person has the answers, and
clearly having been president of a university in a state with
over 33 percent minority population and with large pockets of
minority rural areas, I feel very keenly about some of those
problems. If we bring to Government bright, creative and
thoughtful folks, and if we are open to new ideas and
approaches, we will make progress in finding policies and
programs that work in rural areas.
I believe Tom Dorr has the qualities needed to provide
leadership to the Department and to the country, and I am
pleased to recommend him to the committee and for confirmation.
Thank you.
[The prepared statement of Mr. Curris can be found in the
appendix on page 124.]
The Chairman. Thank you very much, Mr. Curris. Thank you
all very much for your statements.
In consultation with Senator Lugar, the committee will now
bring Mr. Dorr back to the table. We will go until 12:20, at
which time we will then recess until 2:30, and we will come
back at 2:30, and I hope to finish the hearing at some point
this afternoon. The senators have a number of different
obligations. I know that Senator Lugar has to meet with
President Mubarak of Egypt. There is a briefing by Secretary
Rumsfeld that most senators want to attend at 1:30. It is my
intention to come back at about 2:30. Now we will proceed until
12:20. I thank this panel.
I would say that this senator, later this afternoon, has
some questions for Mr. Dennis Keeney. If it is at all possible,
Mr. Keeney, I would appreciate it if you could be here this
afternoon. If you have a plane to catch, I certainly understand
that. Thank you all very much.
We would like to recall Mr. Dorr to the witness table.
I would now recognize Senator Lugar for questioning, and
then I will recognize Senator Mark Dayton. I will be back very
shortly.
Senator Lugar.
Senator Lugar. Thank you very much, Mr. Chairman.
Mr. Dorr, in some of the testimony this morning and in many
press accounts, you are quoted as having given a vision for the
future of very large farm entities. Frequently a farm in excess
of 200,000 acres has been mentioned as an ideal that you had
proposed, and some had ridiculed that in your own state, saying
this would be about one farm per county or this type of thing.
Just for the sake of the record, and at least to have on
record your own views of these allegations or of what you said,
would you try to explain the origin of this concept, what your
vision is really, and attempt to bring at least to completeness
this portion of the record.
Mr. Dorr. Well, I surely will, Senator. I must say that
when I began working in these areas of discussion back in the
1980's and the early 1990's, I surely did not think that some
day I would be sitting before this august committee trying to
rationalize all of those thought processes. I do appreciate the
committee's concern, and I will give it my best.
The real simple answer to this is that it has dawned on me,
as I watched things unfold, that technology, and as we shifted
from a resource to a knowledge-based economy, that technology
and the appropriate use of it was probably the one thing that
could give us as farmers and producers access to the
marketplace and to the margins which would ultimately allow us
to survive in a manner that made sense. That's really the
essence of my point on this.
I would be glad to go into more lengthy dialog on whatever
aspect of it you want, but it was very clear to me early on
that access to knowledge was the one thing that would allow
farmers to bring those vendors and those end users more inside
the farm gate to get them on our turf, to allow us to expand on
our margins and maintain more of those, rather than giving them
up outside the farm gate.
Senator Lugar. Well, many agricultural commentators would
agree with you that these breakthroughs in technology offer
opportunities for enhancement of return on invested capital.
Try to express yourself to the size issue. In other words,
could not these breakthroughs in technology bring profit in
returns say to a farm of 500 acres as well as one 10 times that
size? The criticism, as I understand it, of your point of view,
as people have either understood or misunderstood it, is that
you are advocating very large aggregations of land, and for
people who are involved as small family farmers, this certainly
appeared to be threatening.
Mr. Dorr. Sure.
Senator Lugar. What are the elements of size that are
involved? Many have written about this question, and indeed
USDA has discussed farms of 500 acres or less, or those from
500 to 1,000, and those that are 1,000 or more, and aggregated
amounts of income that come in America farming from these
groups, as well as the return on investment. Would you address
the size issue?
Mr. Dorr. Sure. Essentially where the size issues
originated from was in the final analysis when you look at the
harvesting side of a crop operation. The logistics--the
harvesting costs and the logistics to move the crop from the
farm to the ultimate user frequently involves somewhere in the
neighborhood of 50 to $75 an acre in terms of combining costs,
freight costs, and a myriad of things.
Two things happened that prompted me to look into this. No.
1, as many of my farmer friends know, many of the machinery
companies have had, for a long time, programs that would allow
farmers to run a combine for one year, as long as they put no
more than 100 to 150 hours of use on it, and then turn it over,
and they would trade or lease them a new combine the following
year.
As I evaluated that, that frequently was nothing more than
eating into the equity of the producer who was in that program.
Those combine costs were really quite considerable when I
determined, working with one of my young fellows on my farm,
that we actually had about 550 hours of available time. When I
found that out, I contacted one of the large machinery
companies, and I asked them. I said, ``What would you charge us
to lease the largest combine you have for 200 hours worth of
use and for 400 hours worth of use?'' They said, ``We don't do
it that way. We do it in 300 and 600 hour increments, but for
300 hours we charge you $39,000. For 600 hours we charge you
$41,500.''
It was clear to me that they knew where those break even
utilization costs were, and that if we could capitalize on
that, we could mitigate those costs a great deal.
Second, and in the same vein of that discussion, I
contacted a friend of mine, and I said, ``Would you do me a
favor and find out what the difference in cost is to ship a
100-ton car of coal from the Powder River Basis of Wyoming to
Chicago, versus what it costs to ship a 100-ton car of corn
from my hometown of Marcus an equidistant to an end user?'' The
difference came back to be $1,000 greater to ship the car of
corn than the car of coal. That amounts to 28 cents a bushel.
Those two factors alone lent themselves to utilizing technology
to create the kind of synergies necessary for producers to
migrate or to keep, rather, much more of that income in their
pocket.
Now, the 200,000 acres, and that's the trick. What actually
happened was I went to one pretty standard size concrete
elevator in one part of the county, and I went to another one
in the other part of the county, both on different rail lines
and different markets. I said, ``Can you in fact ship one train
of corn a week from your elevator?'' The first reaction was,
``No, we couldn't do it.'' A matter of fact, 3 or 4 days later
they both got back to me and said, ``You know, we think we
could.''
I don't have the math in front of me. When I figured, using
an 80 percent efficiency factor, those two locations, running
40 trains of grain a week with a mix of corn and beans, using
the mix that we typically plant, means that if we could as
farmers figure out a way to manage the logistics of our
delivery, and keep a fair amount of the grain back in the
county for the livestock industry and other processing needs,
we could, in that envelope, it would amount to about 225,000
acres. The question became, what do you do, how do you do that
in a way in which the family farm can maintain ownership and
operation of their farm, and yet build on those technologies?
That was the genesis of that discussion. That is how it
happened. There was never any intention to exploit that
technology. Frankly, it's ludicrous to think that anyone could
bring that kind of an acreage under control. It's just not
something anybody would want to do. That's where the numbers
got their genesis from.
Senator Lugar. Well, I appreciate that explanation. We had
testimony before the committee by Professor Parlberg, trying to
address hog operations, and the consolidation in that industry.
One of his suggestions that came out of Purdue was that farmers
form very, very large cooperatives so that there were tens of
thousands of head of livestock available for the bargaining
purposes with the packers or the stockyards or whoever they
were dealing with, with the thought that that was about the
only way, at least, theoretically, you could break through this
problem of the small hog farmer, which we deal with a lot in
this committee. Now, that's very tough to do because the
independent spirit of most hog farmers is that they don't want
to be involved in a large conglomerate cooperative even if it
does mean bargaining power, so this has not proceeded, and much
of the dispute still has proceeded. I thank you for your
analysis.
If I may just ask one more question in this round, Mr.
Chairman. In the course of our committee hearings, I have often
shared with members anecdotes from my own operation. It is 604
acres, and so I define that size to begin with. Over the course
of the last 45 years, which I have had responsibility, we have
had a roughly average return of 4 percent on invested capital
as I calculate it. I am both comforted and dismayed by the fact
that national statistics usually give a range of 3 to 5 percent
for farms in America, wherever they are, which leads persons
who are not involved in the farming business to wonder why a
rational person would be involved in this enterprise for 45
years, given the government's bond interest possibilities, with
no risks, no export problems, no pestilence, floods or anything
else.
Now the reason we always get back to this is that we like
farming, we like to farm. A family tradition, the same as you
have. It is not in theory a rational economic decision. However
I would like for it to be, so I have tried to explore actively
ways in which that return could be enhanced over the course of
time, as you have.
Now, it is very difficult in these hearings frequently to
get testimony from live farmers, dairymen, or people involved
in the fruit and vegetable industry as to what kind of return
on investment they obtain from their farms. Most of the
testimony is to the effect that we are, listen, we are
struggling simply to get cash-flow to stay alive. You have to
understand we are trying to meet the banker. We have not really
ever had time to get into these high-faluting accounting ideas
of return on investment.
I understand that, and we have tried to help, as you will
have to if you are confirmed in the development situation. All
I am asking, I suppose, is first of all, your views as to how
this kind of return can be enhanced, and you have given some of
those, as you have analyzed transportation. Some have talked
about GPS systems if you have a large enough entity to use the
satellite technology and the data that might flow to your
combine from that. Some of this requires larger farming and it
does require people coming together in some cooperative
venture, which may or may not work. Now, as a part of your job
you have to consider Congresswoman Clayton's view that there
are a lot of very small farmers in America. Whether they are
able to survive or not is of great consequence to this
committee, and we spend a lot of time trying to think of how
the safety net might be constructed for that to occur. What
programs in rural development are at least in the back of your
mind that might help the very small family farmer, the farmer
that is going to be much less than this 3 to 5 percent return
on invested capital that may be at best marginal? Yet this is a
way of life, and if it were not for that, there would be large
dislocations in our counties throughout the country, and that
is why rural redevelopment is so important to all of us. How do
you speak to those issues?
Mr. Dorr. Well, Senator, that is a very broad and difficult
question which not only you and those others of your committee
have been struggling with for a long time, so have those of us
who have been living in rural America.
In all honesty, the very small farm size that Congresswoman
Clayton referred to is something that we are not nearly as
familiar with in Iowa, so it would be remiss for me to suggest
that I have some particular answer for that.
I will relate a couple of very brief things, and that is
that in rural development, No. 1, we know that the focus of
that area is in infrastructure development, housing,
fundamental infrastructure, and there is another area called
business and industry loan programs.
The Senate Ag Committee, as I understand, is working
aggressively in this particular body of legislation, trying to
figure out ways to facilitate the generation of capital and the
development of it in a constructive way that creates economic
growth. The really very interesting thing--and this is a bit of
an aside--but the deputy at Rural Development for Policy and
Planning is a young man by the name of Gil Gonzalez, who's come
from San Antonio. His background, frankly, is in urban
development in areas with diminished resources frequently. The
focus that he's brought to the Department in some discussions
that I've had with him with regard to the use of community
development venture capital firms or perhaps the newly
legislated rural business investment co-ops, that thing, make
an awful lot of sense.
We have the need to provide some education. We have to
figure out effective ways to leverage the asset base that we
have in rural America, but most importantly, we really need to
focus on the fact that we have an awful lot of very bright,
capable people out there, and frequently we tend not to give
them enough leash. We tend not to give them their due and the
respect that they really are very capable, and that if we give
them some opportunity, they well may do things that were above
and beyond our expectation. It's a combination of struggling to
look for new ideas, leveraging, and really going after the
resources that you have in the people that are out there, and
attempting to help them exploit their capabilities.
Senator Lugar. Thank you.
Thank you, Mr. Chairman.
The Chairman. Mr. Dorr--well, I am sorry. Senator Dayton
has been waiting patiently.
Senator Dayton. No, I defer to the Chairman.
The Chairman. Well, I know the Senator has been waiting,
and I am going to be back here at 2:30. I do not know if the
Senator can come back.
Senator Dayton. I am not sure whether I can, so I
appreciate the Chair's indulgence.
The Chairman. I would let the Senator go ahead.
Senator Dayton. Thank you very much. Thank you, Mr.
Chairman.
Mr. Dorr, I apologize. I had other hearings this morning,
but I have read you testimony and the testimony of all of the
other witnesses who spoke on the other panels. I wanted to
focus on the article which was in the ``Des Moines Register''
today, and bear with me because I just got this information
this morning, and I am looking through it, and also then just
received, as I came into this hearing, a transcript of this
audiotape. Just to clarify my understanding at the outset, sir,
how many farms do you own and operate?
Mr. Dorr. I own personally a grand total of 250 acres of
farmland.
Senator Dayton. That is Pine----
Mr. Dorr. Dorr's Pine Grove Farm Company was an operating
company. It was an operating corporation that I owned that
owned the machinery that did the farming and that employed
myself and my associates who did the operating of the farm.
Senator Dayton. Pine Grove Farms is a corporation which
owns the farm which you then operate?
Mr. Dorr. No, I personally own--Dorr's Pine Grove Farm
Company did not own and does not own any farmland. Tom Dorr and
my wife and I owned about 250 acres. My family, my father a
corporation that my father owned, and a couple of family trusts
and an aunt and uncle, collectively we owned and operated--I
say ``we'' meaning these two families, but not me personally--
approximately 2,200 to 2,300 acres of farm ground.
Senator Dayton. You say owned and operated in the past
tense? Are you still involved in that, or your family?
Mr. Dorr. The ground was operated this past year. It will
be rented out this coming year.
Senator Dayton. Then do you have a beneficial interest in
any other farm or farming activity?
Mr. Dorr. I am a--I have a beneficial interest, a one-
eighth--yeah. Well, regarding the article, at that time a one-
eighth beneficial interest in something known as the Melvin G.
Dorr Irrevocable Family Trust. I also, as a result of a gift
from my father, have something around 9 percent equity in a
company called Dorr, Incorporated, which owns some farmland and
some other equity assets.
Senator Dayton. Thank you. You just referenced the M.G.
Dorr Irrevocable Family Trust?
Mr. Dorr. That's correct.
Senator Dayton. Does that own some of this farmland that
you and your siblings have been involved with?
Mr. Dorr. Yes.
Senator Dayton. The 2,200 acres. That's the--according to
the article is the trust that was cited by the Farm Service
Agency in violation of shares in 1993, 1994 and 1995; is that--
--
Mr. Dorr. That's correct.
Senator Dayton. Then the tape that is referenced again in
the article, references two other trusts, the Belva Dorr Trust
and the Harold Dorr Trust. Are those irrevocable Trusts or how
do those trusts function?
Mr. Dorr. The Belva Dorr, those trusts I have no beneficial
interest in, nor was I a trustee or did I have any direct
control over. They were trusts set up by my Uncle Harold Dorr,
who he and my Aunt Belva Dorr are both deceased. My Uncle
Harold and my father Melvin were in business for many years
together, and so that's how the relationship between the two
evolved.
Senator Dayton. Does each of those trusts then own
farmland?
Mr. Dorr. They are--they are included in that 2,200 to
2,300 acre mix, that's correct.
Senator Dayton. Who owns the 2,300 acres?
Mr. Dorr. The 2,300 acres, 2,200, 2,300 acres are owned by
myself, back in 1993, 1994, 1995, were owned by my father and
mother, by Dorr Incorporated, by the Melvin G. Dorr Irrevocable
Family Trust, the Harold Dorr Irrevocable Family Trust, the
Belva Dorr Revocable trust----
Senator Dayton. Each of these trusts owns part of the land?
Mr. Dorr. Yes, yes.
Senator Dayton. Can you provide for the committee, please,
a breakdown at that time of exactly how these ownerships were--
that is a lot of different ownerships of 2,200 acres or so.
Mr. Dorr. Sure.
Senator Dayton. You outright own, in your own right own 230
or----
Mr. Dorr. About 250 acres more or less.
Senator Dayton. The other trusts each owned----
Mr. Dorr. There was none of the trust--excuse me. I didn't
mean to interrupt you.
Senator Dayton. Going back to the M.G. Dorr Trust and the
Belva Dorr Trust and the Harold Dorr Trust, these are three
separate trusts, and each of them owns land, specific land?
Mr. Dorr. Right.
Senator Dayton. That is farmed by you or your family?
Mr. Dorr. That's correct.
Senator Dayton. All right. The beneficiaries of these trust
are who then, please?
Mr. Dorr. To get really to the meat of this issue is, I was
operating my farm company and operating family land in which
there were 8 siblings in my family, an aunt and 5 siblings in
that family, along with an excess of 20 grandchildren, who in
one form or another were receiving some income out of these
properties, and I was responsible to the extent necessary to
try to get everything done in a way in which they wanted it
done, and to satisfy the needs that they all presented.
I was trying to be a master of a lot of tricks to get
everything taken care of for everyone.
Senator Dayton. In the tape transcript then it says that
either in 1990 or 1991--this is reportedly quoting you; you
have been identified as the voice on the tape by others--``I--
we filed the way the farm, the trust land, both for the Belva
Dorr Trust and the Harold Dorr Trust are operated with the ASCS
to quite frankly, avoid minimum payment limitations, OK?''
The first part of the question is how many entities did you
file with ASCS, including yourself and then each of these three
trusts as separate entities; is that the case?
Mr. Dorr. Senator Dayton, I was--I believe the record shows
that I had power of attorney for the various family entities
with regard to filing papers at the ASCS or now the FSA office.
I worked in consultation with my aunt and a cousin of the
Harold Dorr side of the family. I worked very closely with my
father and the trustees of the trusts for those entities and
properties that worked on our side of the family. There was--it
was my citing the papers at the ASCS or the FSA office now, but
it was in consultation with those other members of the family.
Senator Dayton. Thank you. What I'm trying to understand
then is did you file with the ASCS at that tie office yourself
individually, and then each of these three trusts, the H.G.
Dorr Trust, the Harold Dorr Trust and the Belva Dorr Trust, so
are all of those filed as separate entities, farming entities
with the ASCS?
Mr. Dorr. No. Let me back up. You need to----
Senator Dayton. Let me just explain the context. What I am
trying to understand is the news article references--and I do
not have a copy of the citation from the--whatever from the
Farm Service Agency. The article says that that agency
determined that the M.G. Dorr Irrevocable Family Trust was,
quote, ``in violation of shares'', close quote, in 1993, 1994
and 1995. That is the article there.
Then the tape has you stating, ``I--we filed the way the
farm, the trust land, both for the Belva Dorr Trust and the
Harold Dorr Trust are operated, with the ASCS to quite frankly
avoid minimum payment limitations, OK?''
I am trying to understand, each of those three trusts was
filed as a separate trust entity with the ASCS and then
yourself as an individual owner and farmer in addition to that?
Mr. Dorr. There was--the Belva Dorr Trust was not filed as
a separate operating entity at any point in time other than as
the trust itself. Dorr's Pine Grove Farm was filed as an entity
to rent property from these various properties, as well as to
do custom farming. The Melvin G. Dorr Farm Irrevocable Family
Trust was set up as an individual entity, as was the Harold
Dorr Irrevocable Family Trust.
Senator Dayton. I am sorry? It was what, sir?
Mr. Dorr. As was the Harold Dorr Irrevocable Family Trust.
Senator Dayton. The Dorr's Pine Grove Farm was set up, was
registered. Then the M.C.--I am sorry--the M.G. Dorr----
Mr. Dorr. The M.G. Dorr Irrevocable----
Senator Dayton. The M.G. Dorr Irrevocable Family Trust was
registered. The Harold Trust--Dorr Trust was registered, and
then the Belva Dorr Trust was not?
Mr. Dorr. Well, the Belva Dorr Trust was not registered as
an operating unit in the sense that it was operated like the
other two trusts, no.
Senator Dayton. In the tape here when you are speaking,
reportedly speaking and said, ``I--we filed the way the farm,''
you are referring to the farm being the Dorr's Pine Grove Farm?
Mr. Dorr. Right. I assume I would have to look at----
Senator Dayton. The farm, the trust land, both for the
Belva Dorr Trust and the Harold Dorr Trust. You said you filed
the Harold Dorr Trust, but you are--in this tape then you were
speaking in error when you say here that you filed the Belva
Dorr Trust?
Mr. Dorr. Well, I'm not exactly sure what that tape says,
Senator. The----
Senator Dayton. I will come back, Mr. Chairman, and maybe
in the interim you could look at that if you could, so I could
clarify. I guess what I am trying to understand here is, how
many entities were filed and for what purpose? That many
entities were filed for 2,200 acre operation--let me just
complete then. Did you--the Pine Grove Farm was filed, two or
three trusts were filed. Were you then as an individual filed
as well?
Mr. Dorr. What we're getting to is the core of the
difficulty of all of these issues. The history----
Senator Dayton. What is the core of the difficulty?
Mr. Dorr. The history of a farmer attempting to deal within
the constraints and the confines of farm programs, and to keep
his arms wrapped around all of these issues----
Senator Dayton. Mr. Dorr, you created these entities. ASCS
did not create these entities, did not require you to file
them, any such thing. You or your family created the entities.
Now I am the beneficiary of family trusts, so I am just trying
to understand how they were established, but nobody required
you to file any of these with ASCS, so for you to be blaming
the Government program for your own decision and your own--that
you are responsible for is really misleading this committee and
unwarranted.
Mr. Dorr. Sir, I am not trying to--first of all, let me say
that this was a family matter that I regret having said some of
the things I said on that tape, quite clearly. They were said
in the context--and I want to get into this because perhaps it
will be--let me back up.
Every farm entity has to be registered at the FSA Office.
All of the family entities including, Dorr Incorporated had
farmland. It was registered at the FSA Office. The Belva Dorr
Revocable Trust, which is a trust accruing interest to my
living Aunt Belva at the time was registered. It had some farm
property. The Harold Dorr, the Melvin Dorr Irrevocable Family
Trusts were registered. My own personal farmland was
registered. My parents' farmland was registered, and Dorr's
Pine Grove Farm was listed as an operator of a number of these
properties. That is part of the requirement of the farm program
to participate in those.
Senator Dayton. OK. I have to go back and look at the
language of the regulations at that point in time, but I guess
what you are quoted as saying on the tape is, either in 1990 or
1991, ``I--we filed the way the farm, the trust land, both for
the Belva Dorr Trust and the Harold Dorr Trust are operated,
with the ASCS, to quite frankly, avoid minimum payment
limitations, OK?''
That says to me that you made a decision--maybe it fit
within the requirements. Maybe it was required, but you made a
decision, what you are saying here, the way I interpret this,
you filed the way the farm, the trust land, both for the Belva
Dorr Trust and the Harold Dorr Trust are operated with the ASCS
to quite frankly avoid minimum payment limitations.
Was that your intent?
Mr. Dorr. Senator, no.
Senator Dayton. Am I misunderstanding what the tape quotes
you as saying? Did you not make that statement?
Mr. Dorr. The statement was made in the context of a
discussion with a sibling who, quite frankly, had had a great
deal of difficulty with our entire family for some time. We had
previously gone through some other issues with him 3 or 4 years
prior to that, and when this issue was broached again,
initially, it was broached in a manner that I assumed he was
suggesting that I was taking advantage of the trust.
There were----
Senator Dayton. You are saying that you were not taking
advantage of the trust, you were taking advantage of the
Federal Government?
Mr. Dorr. No, I was not taking advantage of the Federal----
Senator Dayton. It says here you set that up to, quite
frankly, avoid minimum-payment limitations.
Mr. Dorr. Senator, farmers always have to work within the
confines of the farm programs. As a farmer who is responsible
for his fiduciary responsibility for himself, and his family,
and those which he works with, he will always work within the
farm programs. The way those programs and the way those
properties were set up, to the best of my knowledge, would not
have violated any payment limitation.
For one not to attempt to maximize the payments from the
farm programs has a significant detrimental value on one's
ability to generate an adequate rate of return or an adequate
living on the farming operation. It was within that confine and
that context, not just me, but the trustees of these two
trusts, had elected to do what we did.
Senator Dayton. Well, maybe so. It says here, in another
part of the transcript:
``Unknown Voice: This was all done that way in an effort
to--''
Then your voice is cited as saying: ``Avoid a $50,000-
payment limitation to Pine Grove Farms.''
Was that not the intent of setting up these different
trusts, filing them, and the later arrangements, which we can
go into after lunch, was to avoid the payment limitation that
was in place at that period of time?
Mr. Dorr. No, the intent was to set up and structure the
organization in a way that was in compliance with the rules in
the farm program.
Senator Dayton. I am quoting you, sir. I am quoting you in
the transcript, ``to avoid a $50,000-payment limitation to Pine
Grove Farms.''
That is what I am quoting you as saying, that that was the
reason----
Mr. Dorr. It was not, but it was not----
Senator Dayton. It was an effort to avoid a $50,000-payment
limitation to Pine Grove Farms. That is what it says in the
transcript, and it cites your name. I was just going by what
the transcript refers to you, in your own words, what your
intent was.
What else am I supposed to assume, sir?
Mr. Dorr. Sir, there was the opportunity to have other
entities, operating entities set up that would qualify for
$50,000-payment limitations. I have known many, many farmers
over the years who do that and----
Senator Dayton. I am not talking about many, many farmers.
Mr. Dorr. OK, that is fine.
Senator Dayton. Many, many farmers are not here to be
appointed to what Senator Grassley rightly earlier referred to
as an extremely important position in USDA. You, alone, sir,
are in that position so you, alone, are the one I am asking
these questions about today.
Mr. Dorr. Yes, sir. As near as I can tell, I, alone, and
our family trusts have done nothing out of the ordinary
relative to the way many farms are operated. We did that within
the confines of the way we thought it was best to be handled.
Senator Dayton. Mr. Chairman, you cited 12:20 as the time
for luncheon break. It is 12:30 now. I am willing to relinquish
my opportunity, if I may, though, with the understanding that
when the hearing resumes at 2:30, I can continue my
questioning.
The Chairman. If that is agreeable to the chair.
Senator Dayton. Or whatever arrangements the chair wishes
to make with me.
The Chairman. I say to the Senator we will be back at 2:30.
I have relinquished my right to ask questions, but I will pick
that up at 2:30, and I will recognize----
Senator Dayton. I will be glad to defer to the chairman,
and may I go after the chairman because then I do need to go
onto other----
The Chairman. I would recognize the Senator at that time.
We will recess for 2 hours, but before we do, just to
borrow the well-worn phase from Apollo 13, ``We have a problem
here. We have a real problem here,'' and it has to do with the
fact, as I see it anyway, that a finding was made with the U.S.
Department of Agriculture, verifying certain things that later
turned out not to be so. We will get into that this afternoon.
Then it gets to the issue of intent. Was this just a simple
mistake or not?
The FSA, later on in 1995 or 1996, I guess without the
benefit of this documentation, said, well, just pay the money
back, and the money was paid back. I have not heard this tape.
I heard about it. It has been rumored it has been around, but I
never heard the tape and still have not. Obviously, we have the
transcript now, and I was following it as Senator Dayton was
asking his questions. There is a problem here, and we will get
into it a little bit more this afternoon.
With that, we will recess until 2:30. We will come back at
2:30.
[Whereupon, at 12:31 p.m., the committee adjourned, to
reconvene at 2:30 p.m., this same day.]AFTERNOON SESSION[2:30
p.m.]
The Chairman. The Senate Committee on Agriculture,
Nutrition, and Forestry will resume its hearing.
We are here this afternoon to continue the discussion on
the nomination of Mr. Thomas Dorr to be Under Secretary of
Agriculture for Rural Development.
I might say to you, Mr. Dorr, I know some people are still
over at Secretary Rumsfeld's briefing on Defense, and I do not
know when others might come in here, but there are some areas
that I, personally, wanted to cover with you, but I am going to
defer again to Senator Dayton, who probably has other things to
do this afternoon too.
Senator Dayton. Thank you, Mr. Chairman.
The Chairman. One of the great privileges of being a chair,
you just get to sit here all of the time, right?
Senator Dayton. That is right.
The Chairman. I appreciate it.
Senator Dayton. It is too far to walk.
The Chairman. Right. Then to continue the discussion, I
recognize the Senator from Minnesota.
Senator Dayton. Thank you, Mr. Chairman, because I do have
other engagements to go on to.
Mr. Dorr, going back then to these filings with the ASCS
back in the early 1990's, my understanding from the Des Moines
story this morning, the Des Moines Register's story this
morning, that the Farm Service Agency, the successor to ASCS,
found that the M.G. Dorr Irrevocable Family Trust was in
violation of shares agreements in 1993, 1994, 1995, and that as
a result, $17,000 was paid from that trust to the FSA; is that
correct?
Mr. Dorr. That is correct, Senator. If I could possibly go
back to try to answer one of your earlier questions, you asked
about the number of trusts and about the number of acres, and I
did go back over lunch and pull that information together for
you.
There were actually seven different entities. One of them
was my mother and father, Melvin and Margaret Dorr. They had
360 acres, and these are all more or less, but I am pretty
close; there was the Melvin G. Dorr Irrevocable Family Trust
that had 280 acres; there was the Harold Dorr Irrevocable
Family Trust, it had 320 acres; there was the Belva Dorr
Irrevocable Trust with about 470 or 480 acres; there was the
Harold Dorr Irrevocable Trust that had 245 or 250 acres; there
was a company called Dorr, Incorporated, that at one point was
jointly owned by my father and uncle that, at that point, was
owned by my father, that had 280 acres; and I, personally, had
250 acres.
Now I understand that this is rather complex. However, my
father and uncle set up these various farming entities back in
the early 1970's to facilitate the transition and hopefully to
maintain the family farm intact and to move the farm from one
generation to the other. At that point, I had an uncle, my
Uncle Harold, who was very interested in a couple of his
grandchildren possibly returning, and it was one of the ways in
which he could facilitate that.
It was not my responsibility to put all of these entities
together. I did not structure them. This took place prior to my
being there, and ultimately I was saddled with this myriad of
groups.
The tape conversation that you were referring to earlier in
the day was one between a brother and myself, and, frankly, it
was one in which he did not understand, truly understand the
implications of my father's estate plan, and we were simply
trying to work within the context of that plan, put in place by
the previous generation, my father and uncle, within the
framework of the laws at that point.
In response to your question now, the county FSA was
approached by this brother and asked to look into this matter
with the trust, and they did. They originally determined, in
fact, they did determine that there were no violations, no
shares violations or anything of that sort.
Somehow out of that, and I do not know why, the State then
decided that they were going to get involved in it, the State
FSA, and they promulgated what ended up being what is known as
an end-of-year review. That end-of-year review took place, was
completed in late 1995. The trustees, my other brothers and
myself, were notified that they thought there was this shares
violation. In fact, they then said that we had to repay the 3
years' penalties, which approximated $17,000.
The trustees and myself, my other brothers and myself,
disagreed with that ruling. In fact, we were disappointed with
it. We had earlier sought legal counsel as we got into this
thing. We referred it to him. He, too, thought it was an
inappropriate decision. After looking at it and evaluating it,
he said we could appeal this probably, and we could probably
win, but it is probably going to cost you somewhere between two
and three times the amount of the fees.
Consequently, in our fiduciary capacity and reviewing it
with the other beneficiaries and trustees, we elected to repay
these funds. Once we repaid the funds, then I went back to the
county FSA office, and I said, ``OK. Tell us how you want us to
restructure this so that we, in fact, are in compliance with
all of the rules and regulations.''
That is the essence of this whole issue, and that is
probably as good a guidance as I can give you on it at this
point because that is really the end of the story.
Senator Dayton. The M.G. Dorr Irrevocable Family Trust paid
the $17,000, is that correct, for----
Mr. Dorr. That is correct.
Senator Dayton [continuing]. What ASCS or FSA then
subsequently determined was a violation, and you paid it off--
--
Mr. Dorr. That is correct.
Senator Dayton [continuing]. Without dispute.
Who operated, at that point, the M.G. Dorr Irrevocable
Family Trust?
Mr. Dorr. The Irrevocable Family Trust had three trustees,
myself and two brothers, and we collaboratively made the
decisions.
Senator Dayton. You had the power of attorney for the
trust, I understand.
Mr. Dorr. I had the power of attorney to sign at the FSA
office, that is correct. That was the only place that I had
power of attorney to do business.
Senator Dayton. The arrangement then was between the M.G.
Irrevocable Family Trust, of which you were a trustee and had
power of attorney, and then yourself dba Pine Grove Farms,
Inc.?
Mr. Dorr. It was not with myself. It was with my company,
Dorr's Pine Grove Farm Company, that is correct.
Senator Dayton. Pine Grove Farm Company is a--what is
that----
Mr. Dorr. Dorr's Pine Grove Farm----
Senator Dayton. What kind of a corporation is that, sir?
Mr. Dorr. That is a C corporation.
Senator Dayton. You are the CEO or the president?
Mr. Dorr. I am the CEO, and I am the sole stockholder with
my wife.
Senator Dayton. You set up an arrangement between this
trust, M.G. Dorr Irrevocable Family Trust and your company,
Pine Grove Farms, and you characterized it in the filings with
the ASCS as a custom fee arrangement; is that----
Mr. Dorr. No. The Melvin G. Dorr Irrevocable Family Trust
was set up as an operating entity, entitled to receive 100
percent of the benefits from the various farm program payments,
bearing in mind this was a 280, yes, it was a 280-acre
operation.
Then the trustees worked with Dorr's Pine Grove Farm, they
asked us, Dorr's Pine Grove Farm, to operate the farm, which
was in the context of what my father wanted them to do, and
Dorr's Pine Grove Farm then did provide custom farming services
for the family trust. That is correct.
There was not a filing that indicated we were a custom fee
operation or anything like that.
Senator Dayton. Well, was that not the basis under which
ASCS originally determined that it was subject to the limits;
whereas, before, they had determined that it was not? That
under a crop share agreement, where you would be receiving norm
is 50 percent of the proceeds, that is subject to the payment
limits; whereas, a custom fee arrangement is not subject to the
payment limits.
Mr. Dorr. Custom fee arrangement----
Senator Dayton. It is my understanding that you certified
to ASCS that it was a custom fee arrangement, that that was the
way you described the relationship between Pine Grove Farms
Company, yourself, and the trust, which was again essentially
yourself because you had the power of attorney, and that you
described that relationship as a custom fee arrangement so that
it was not counted against the payment limit?
Mr. Dorr. Well, Senator, the only power of attorney I had--
--
Senator Dayton. Is that correct or incorrect?
Mr. Dorr. No, that is incorrect, sir.
Senator Dayton. That is incorrect. What is incorrect?
Mr. Dorr. First of all, the trustees, myself and two
brothers, made this arrangement.
Senator Dayton. You had the power of attorney. The trustees
made you----
Mr. Dorr. The only power of attorney that I had was to sign
the documents at the ASCS office.
Senator Dayton. The trustees made the arrangements. You and
your brothers made the arrangements.
Mr. Dorr. That is correct.
Senator Dayton. With yourself.
Mr. Dorr. They in turn then contracted with Dorr's Pine
Grove Farm to pay for, on a custom basis, these arrangements.
Now----
Senator Dayton. On a custom basis?
Mr. Dorr. On a custom basis, that is correct.
Senator Dayton. Is the representation that you had made
to----
Mr. Dorr. That was, in fact, the case, sir--Senator.
Senator Dayton. What was the fee you were paid on a custom
fee basis?
Mr. Dorr. I was, Dorr's Pine Grove Farm, was a custom
operator. We not only custom farmed ground for the Melvin Door
Trust, we did it for other farmers in the neighborhood, as
well, so it was not something----
Senator Dayton. What was the fee arrangement then with the
trust?
Mr. Dorr. The fee arrangement was arrangement that we made
Dorr's Pine Grove Farm and the trustees agreed upon.
Senator Dayton. What was that arrangement?
Mr. Dorr. That arrangement was to pay for the machine
services that we provided to the trust.
Senator Dayton. That was the only payment made by the trust
to this company?
Mr. Dorr. The trust reimbursed Dorr's Pine Grove Farm
Company for the machinery services, and the management
services, and other things that we did for the trust, yes.
Senator Dayton. In this recording, you are describing this
arrangement, you said that you are receiving 50 percent of the
payments, of the proceeds from net of these payments on the
machinery, that you had set it up in just that fashion.
You said, ``Besides those two machine charges, everything
else is done on a 50-50 normal crop share basis,'' that you got
half of the proceeds and the trust retained half of the
proceeds, net of the use of machine and expenses. That is the
way you described the arrangement in this conversation. Is that
accurate or inaccurate?
Mr. Dorr. Senator, the trustees approved all of the charges
that they paid----
Senator Dayton. I understand. I am just asking what is the
arrangement.
Mr. Dorr. The arrangement was that they paid for the
charges for my management services, my marketing services. They
paid Dorr's Pine Grove Farm for the machinery services, and
that was the charge that they paid.
Senator Dayton. Well, as you know, since you are a farmer,
there is a very real difference here, I am not just quibbling
over words, between a custom fee arrangement, where the
payments are not subject to the payment limits under then-ASCS,
and a crop share arrangement where they are. We are not dealing
with semantics here. You, yourself, in this conversation said
that everything was done on a 50-50 normal crop share basis.
In fact, a crop share arrangement, at least as I understand
it--and it applies to Minnesota, I assume it applies in Iowa--
is that kind of 50-50 arrangement. That is subject to the
payment limit. You were representing this to ASCS, on the basis
of your filings, and the trust was representing it on the basis
of its filings, as a custom fee arrangement which, in fact,
would have been about, what, $60 or $70. It is significantly
less money, and a very different arrangement, and this was
done, according to your own statement here, and again I will
read the tape, ``Besides these two machine charges, the
expenses, everything else is done on a 50-50 normal crop share
basis.''
That unknown voice, ``This was all done that way in an
effort to,'' and this is your voice attributed, ``Avoid a
$50,000-payment limitation to Pine Grove Farms.''
It was my understanding that ASCS, when they came in and
did an evaluation, determined that the reason the trust owed
the $17,000 back was because the trust had represented this
arrangement as a custom fee arrangement, and in fact it was
not. It was a crop share arrangement.
Mr. Dorr. Senator, to suggest that I was trying to take
advantage of the----
Senator Dayton. I am just quoting your own words, Mr. Dorr.
Mr. Dorr [continuing]. Of the farm programs, is not
correct.
Senator Dayton. I am not suggesting anything. I am just
reading you the transcript.
Mr. Dorr. It was an arrangement that was entered into by
Dorr's Pine Grove Farm and the trustees within the framework of
what we were allowed.
As I pointed out to you early on, there were several
different entities. All of these, in one form or another, would
have been eligible for some payment limitation or payment
program. We did nothing, as near as I can tell, and according
to everything that I have received from the FSA, we have done
nothing that was inappropriate. They did not agree with the way
in which we did it at the time. We did not believe it was
incorrect, and I find that----
Senator Dayton. They did not agree with your
characterization of it.
Mr. Dorr. Pardon?
Senator Dayton. They did not agree with your
characterization of it as a custom fee arrangement because, in
fact, it was, what they determined it to be, which is what you,
yourself, said in the transcript it was, a crop share
arrangement. Again, I am not inferring anything. I am quoting
your own words here that it was done to avoid the payment
limitation.
You further go on to say, the question asked again, you say
in the tape, ``I have no idea if it is legal. I have no idea. I
suspect that if they would audit and somebody would decide to
come in and take a look at this thing, they could probably, if
they really wanted to, raise hell with us,'' which is, in a
sense, what ASCS did. I do not know about ``raising hell,'' but
they came in and questioned what had been done here.
Then they go on to say, ``That custom fee actually is not a
custom fee. That is crop rental income to me. That is my share
of the income,'' and then you go on to say, and I am leaving
some parts out here, but I will certainly insert all of this
for the record, ``I, we, filed the way the farm, the trust
land, both for the Belva Dorr Trust and the Harold Dorr Trust
are operating with the ASCS, quite frankly, to avoid minimum
payment limitations, OK?''
It seems to me you are stating here very, very clearly that
that was your intent. In fact, that is what ASCS determined was
the discrepancy between what you represented, what you
certified on those documents, as both the trustee and with the
power of attorney an arrangement that was with yourself and
then what it was determined to be.
I take you at your word, sir, in these tapes that you made
these arrangements so that you could circumvent the payment
limits.
Mr. Dorr. Senator, let me say one more time for the record,
that these were not arrangements that were made with myself.
They were made between Dorr's Pine Grove Farm Company and the
family trust, in full knowledge of all of the trustees and of
all of the beneficiaries, No. 1.
Number----
Senator Dayton. Let us clarify the record. You were one of
the trustees.
Mr. Dorr. I was one of three trustees----
Senator Dayton. You had the power of attorney for the
trust.
Mr. Dorr [continuing]. I was one of eight beneficiaries.
Senator Dayton. The trust made the arrangement with
yourself operating Dorr's Pine Grove Farms.
Mr. Dorr. The only benefit of the power of attorney with me
at the FSA was to enable me to sign the papers without having
to send them around to two other trustees. We----
Senator Dayton. You were one of the three trustees.
Mr. Dorr. Second, Senator, the tape refers to something
called the Belva Door Trust which was, in fact, an entity which
was never farmed on a custom farming basis. The tape, according
to my brother, was actually a tape that was put together out of
a couple of conversations and, to a large extent, there are
portions of it that were taken out of context.
It was a family matter that was involving a brother who had
been----
Senator Dayton. I do not----
Mr. Dorr. The discussions in this were taken----
Senator Dayton. Were you misrepresenting the situation? I
am taking you at your own word. I do not----
Mr. Dorr. No, what I was trying to do was assure my brother
that we were not taking advantage of the family trust.
Senator Dayton. I assume you were describing to him
accurately what was going on at the time. Whether it is your
brother or anyone else, the conversation, I am trusting your
voracity, you were describing to him, who was a beneficiary,
and I believe the context was questioning what the payment
allocation was, you, yourself, were explaining to them why you
had set it up this way, why it was being operated in this way.
As I understand it, and I am just, again, quoting you at
your own words here, that you are saying it was set up,
frankly, to avoid minimum payment limitations, that that is why
the trustees--you being one of the three--set it up that way
and represented it to ASCS as a custom fee arrangement when, in
fact, you say here it was not a custom fee arrangement.
You, yourself, knew that for a fact, when you were
certifying otherwise, it was a crop share arrangement, which if
it had been disclosed as such, would have meant you would not
have been able to claim the payments from that trust, all of
them without going up against the fee limit or at least that
was your contemplation.
Mr. Dorr. No, that is not correct because if you would have
dubbed all of those payments together, any way you want, we
would have never exceeded the payment limitation----
Senator Dayton. Who is ``we''?
Mr. Dorr. Dorr's Pine Grove Farm, the family trust, any way
in which you would have put these together, we would never have
exceeded the payment limitations.
Senator Dayton. This audit, as I understand it, which was
completed by FSA and because the repayment is only for the M.G.
Dorr Family Trust----
Mr. Dorr. That is correct.
Senator Dayton. Only that one.
Mr. Dorr. That is correct.
Senator Dayton. You have described here having a similar
arrangement with the Harold Dorr Trust?
Mr. Dorr. That is correct.
Senator Dayton. For some inexplicable reason, the FSA, at
least from my information, did not audit that trust and that
relationship. Would they find the same thing here, that this
was reported as a custom fee arrangement?
Mr. Dorr. I do not know how they would find that, Senator.
I do know that the reason that these were set up----
Senator Dayton. It was the same arrangement as with the
other trust.
Mr. Dorr. It was the same arrangement with the other trust,
and the reason these were set up was because my uncle, shortly
before his death, asked me to do that.
Senator Dayton. Those are two trusts, the two trusts which
you were receiving half of the income and that are being
reported erroneously----
Mr. Dorr. We were not receiving half the income. We were
receiving custom payments that were arranged--I was not a
trustee, nor did I have a beneficial interest in that trust. I
worked very close with my aunt and cousins and took direction
from them.
Senator Dayton. I am taking you at your word that it was a
custom, that it was the same arrangement as the other one,
which you described variously as a custom fee arrangement,
which you then acknowledge, and which the ASCS determined, was
a crop share arrangement, which has very significant different
application of Federal law and the regulations for these
programs.
If you are receiving those payments, even though the second
trust was not audited, and should have been by the FSA, and if
you are receiving payments now from two different trusts, you,
yourself, are receiving that, then I can start to understand
what the intent was here, which was to avoid yourself running
up against these payment limits.
Mr. Dorr. No, Senator. We were simply trying to work within
the restraints of the law.
Senator Dayton. This is not ``simple.'' You were not
simply--you were operating these--in fact, the trust, as I
understand it, the M.G. Trust was set up and operating as a
contract share trust until about 1987 or 1988, when you changed
it to a custom fee arrangement, so called, and then----
Mr. Dorr. That is correct, and that was at the request of
my uncle. I did not initiate that.
Senator Dayton. It was reported as such to ASCS and on
which basis you were not, you were collecting payments, as were
the trust, and then after ASCS came in and reviewed these
matters, found that this was not a custom fee arrangement.
Mr. Dorr. Senator, at the time, those were set up that way.
There was nothing illegal, there was nothing inappropriate, and
there was nothing with outside----
Senator Dayton. I am not saying that it was illegal. There
is nothing illegal in setting them up that way, but the
disclosure to the ASCS during this period of time, which was
under review, and I do not know if it was the case before the
period of time, before 1993, was as a custom fee arrangement.
That was, certainly, if not illegal, highly questionable
because, again, that was done, by your own account, to avoid
the payment limit.
Mr. Dorr. Senator, excuse me. I am sorry.
Senator Dayton. Yes.
Mr. Dorr. Senator, the trustees of both of those trusts
could determine what they decided to reimburse Dorr's Pine
Grove Farm with--it was their discretion.
Senator Dayton. Who filed the report, who filed the trust
report with the FSA or ASCS at the time?
Mr. Dorr. I am not 100----
Senator Dayton. Who signed the document?
Mr. Dorr. I believe, in fact----
Senator Dayton. You had the power of attorney.
Mr. Dorr. No, I believe, in fact, on the Harold Dorr
Irrevocable Family Trust, my aunt did.
Senator Dayton. No, the M.G. Dorr Irrevocable Family Trust.
Mr. Dorr. On the M.G. Dorr Irrevocable Family Trust, I did,
but I am----
Senator Dayton. You signed the documents----
Mr. Dorr. That is right.
Senator Dayton [continuing]. Representing it as a custom
fee arrangement.
Mr. Dorr. That is right.
Senator Dayton. You, yourself, believed at the time that it
was--at least told your brother--that it was, in fact, a crop
share arrangement, not a custom fee. You signed the document
stating it was one kind of arrangement when, you, yourself,
said to others that it was not that arrangement.
Mr. Dorr. No, what I was explaining to my brother, that it
was not any worse or any different than any other arrangement
and that we were not, as Dorr's Pine Grove Farm, making an
unduly large amount of money off of the custom farming
operations.
I would want to point out--I am glad you brought that up--
that I do believe, and I can find that document, I believe,
that my aunt Belva Dorr, who is now deceased, did, in fact,
sign the document for the Harold Dorr Irrevocable Family Trust.
At the time, that was set up that way as well.
Senator Dayton. Based on her hands-on operation of that
trust and the farming operation or based on representations
that you or someone else made to her?
Mr. Dorr. It was based on decisions that she and my uncle
at the time decided to do it for----
Senator Dayton. She went down to ASCS these years, and she
attested that this was a custom fee arrangement rather than a
crop share arrangement because that was her knowledge of the
situation?
Mr. Dorr. No, I do not think she went down there year after
year after year, but she signed----
Senator Dayton. Filed the reports or signed the documents.
Mr. Dorr. She signed the documents, and it was done in
order to facilitate a continued cash-flow for my uncle's
grandchildren and their college education, and that is what he
had intended for, and it was a way in which he could get----
Senator Dayton. If this had been reported, as it was, that
you were the recipient of these two crop share arrangements,
and you listed seven entities, so I do not know whether you
were receiving income at the time from these trust arrangements
as well, would you have then exceeded the payment limit for
those years?
Mr. Dorr. Senator, if all of those entities combined, this
is what I tried to tell you a moment ago, if all of these
entities combined would have been operated on a crop share
basis, at no time would we have ever exceeded the payment
limitations. We are not talking about a huge tract of land.
This was about 2,200 acres of property. If I would have----
Senator Dayton. You went to a lot of effort for nothing.
Mr. Dorr. Pardon?
Senator Dayton. You went to a lot of effort setting all of
these up or operating them this way for----
Mr. Dorr. That was what I----
Senator Dayton [continuing]. Out of no necessity, in
hindsight.
Mr. Dorr. That was what I tried to explain earlier. I did
not set those all up. They were set up by my uncle and by my
father for purposes of trying to pass this----
Senator Dayton. The trusts, the trusts were set up----
Mr. Dorr. The trusts and Dorr, Incorporated----
Senator Dayton [continuing]. As crop share arrangements,
and then in the late 1980's, they were changed to custom fee,
represented as being changed to custom fee arrangements. Again,
I am taking you at your word when you said in 1995 that these
custom fees are actually not a custom fee. They are crop rental
income. That is your share of the income, and you were, at the
same time, representing then to at least one trust where you
were a trustee, where you did sign the documents, you were
representing to the Federal Government something different from
that, for the purpose, you thought, of having a different
characterization of those proceeds.
Mr. Dorr. Well, Senator, I would simply reiterate that the
county committee originally reviewed this, decided there was,
in fact, no violation of shares. They, ultimately, it was taken
to the state committee by someone, I do not know who, when they
determined--frankly, I view this matter, $17,000, it is not a
huge sum of money, and I look at it, to some extent, as a tax
audit.
Senator Dayton. Mr. Dorr, I look at it differently. I look
at it, and any farmer in Minnesota who deals with these
programs looks at it for what you, yourself, in these tapes
said it was; a clearly intended attempt to violate or to
circumvent, evade these payment limitations.
I cannot imagine that somebody could be put in place of
administering this agency, which is responsible for all of
these programs, somebody who has devoted himself to trying to
circumvent the very regulations and laws which were set up just
for this reason, and where you, yourself, knowingly falsified
statements and documents that were submitted to the Federal
Government, attesting to an arrangement that you, yourself,
were saying at the time did not exist, that a different
arrangement existed. That is how I view it, sir.
I also think, Mr. Chairman, before this matter comes to the
committee for a vote, that we should request that FSA review
these other trusts and these other documents and find out if
this is--because the FSA, for some inexplicable reason, only
audited this one irrevocable family trust, the M.G. Dorr
Irrevocable Family Trust. Before I want to vote on this matter,
Mr. Chairman, I want to know the totality of all of these
different arrangements, and what the payment arrangements were,
and who signed the documents and the like, so I can make a
determination, whether as you say this was one inadvertent
situation or whether this represents something more than that.
Thank you, Mr. Chairman.
The Chairman. Thank you. I let the Senator go on longer
than the usual 5-minute rule because we are the only two here,
but also because this is a matter of extreme importance and
somehow we are going to have to get to the bottom of it.
I do not wish to go over all of that ground again, but I do
have, Mr. Dorr, a couple of questions.
How were the payments made to you? How were the payments
from this trust or all of these trusts made to you in your
capacity as farming the land and harvesting the crops? How were
the payments made?
Mr. Dorr. These payments were invoiced out, as the charges
were made, and then when the trusts had money, they would pay
me. That is, when there was money in the bank account and they
had grain sales and other things, they would reimburse us then
for our charges.
The Chairman. Were your charges then based upon the usual
and customary custom farming fee in your area?
Mr. Dorr. No, actually, these charges were higher than the
normal customary farming fee, and that was agreed upon by the
trustees, as well as the beneficiaries.
The Chairman. How much more were they than the normal and
customary custom farming fees in that area?
Mr. Dorr. I do not know. It varied from year to year.
Perhaps, depending on the services that we provided, I did
grain marketing services for them, I managed all of the daily
drainage crop monitoring normal management issues, so there
were payments for those. All in all, I suppose we probably
garnered somewhere between $150 and $175 an acre in custom
farming fees.
The Chairman. Are you saying that at that time that, from
the proceeds of the farming operations for these trusts, that
you did not, as the head of Pine Grove Farms or you
individually receive 50 percent of the value of the crops
harvested during any 1 year? You did not receive 50 percent?
Mr. Dorr. I do not know, Senator, without going back and
looking at them. That was back in the mid-1990's. There were
times when we got close to that. I do not know if it was
exactly 50 percent. I do not know if it was more or less.
The Chairman. Then what are we to understand when you say
in this transcript that, besides the two machine charges,
everything else is done on a 50-50 normal crop share basis?
Were you being honest with your, I do not know, whoever the
unknown voice is there or were you not? Were you doing it on a
50-50 normal crop share basis?
Mr. Dorr. Actually, we were doing it for a little less than
a 50-50 crop share basis. What I was trying to do was assure
this brother, who was quite disconcerted about this, that, in
fact, we were not taking advantage of the trust. We were
clearly trying to operate it under the premise in which it was
set up by my father and by my uncle in the way in which they
wanted.
The Chairman. Then when this unknown voice says, ``This was
all done that way in an effort to,'' and you respond, according
to the transcript, I have not heard the tape, you respond, you
say, ``Avoid a $50,000-payment limitation to Pine Grove
Farms.''
There was never any payment limitation consideration to the
trust?
Mr. Dorr. Excuse me. I guess I did not understand your
question.
The Chairman. You said that you had set up this arrangement
in a way to avoid a $50,000-payment limitation to Pine Grove
Farms. That was a separate entity from the different various
trusts that you were farming.
Mr. Dorr. It was the company that rented the other ground
and did other custom farming for other organizations, that is
correct.
The Chairman. You were concerned about the $50,000 payment
limitation to your operation, not to the trusts. In other
words, if there was a 50-50 normal crop share basis, if there
was a problem with a $50,000-payment limit to one entity, would
there not be a payment limit to another entity, the other
entity in the crop share arrangement?
Mr. Dorr. There was no payment limitation issue concerned,
that I am aware of. Pine Grove Farm, as I just explained to
Senator Dayton, had you taken all of the payments from all of
these farms and laid them out in a 50-50 basis, assumed that
all acres were operated 50-50, there would never have been a
payment limitation issue.
The Chairman. To the trust.
Mr. Dorr. No, to Dorr's Pine Grove Farm.
The Chairman. Then why did you say you wanted to avoid a
$50,000 payment limitation? If there was never any problem with
the payment limitation, why did you say you set it up this way
to avoid a payment limitation?
Mr. Dorr. Senator, in 19--I believe it was in 1976 or 1977,
when the farm bill was written, it was the first time in which
it was indicated that it would allow one to prove yields. We
aggressively began to prove yields because I assumed that, at
some point, farm program payments would be based on yields.
When one operates a farm, and as one of the earlier
discussants, I believe it was Senator Lugar, talked about this
morning in terms of the limited narrow margins in returns, one
attempts, and if he does not, I would be surprised, but one
attempts to work within the confines of the programs in which
they are defined and the way they are set out in order to make
sure that he can capture as much of the farm program payments,
et cetera, that are involved in any way that is within the
confines or the proper precepts of the farm programs. If you do
not do it that way, it frequently makes it impossible to
operate.
We did nothing, that I am aware of, in the way in which we
structured these operations, to farm outside the constraints of
the farm programs. The payments that were paid to Dorr's Pine
Grove Farm for custom farming fees by the trusts, either one of
the trusts, were done full knowledge with the trustees, with
the beneficiaries and everyone involved.
I did a good job of marketing. I did a good job of land
stewardship. We did a good job of operating a variety of
things. There were charges that we were paid for by our
landlords over the years that normally people do not charge
for, and it was on a continuing basis for that style of
management that we did, and that is the way in which we
operated.
The Chairman. Well, as you said earlier, there is nothing
wrong, and you alluded to the tax system, there is nothing
wrong with getting a good tax lawyer and trying to figure out
how to minimize your taxes. There is nothing wrong with that.
There is nothing wrong with running a farming operation to
maximize farm payments. There is nothing wrong with that.
What is wrong is if one falsifies a document or falsifies
tax returns in order to maximize benefits or Government
payments. That really is the crux of the issue here and it is
obvious that something was misstated on the filings on how this
arrangement was run. After all, there was a payment repayment
of over $16,000--16,000-and-some-odd dollars. Obviously, if
nothing had been done out of line, I do not know why anyone
would have to pay anything back.
Senator Dayton. Mr. Chairman, if I may, if the Senator
would yield, I want to associate myself with your last remark
because these programs depend upon the honesty and the
integrity of the participant farmers. I believe there are 2.5
million farmers that receive these payments. If every one of
them were taking the tact of misrepresenting what they are
doing in order to collect additional money or avoid payments,
the system would break down totally.
I know good Minnesota farmers who operate under the same
very tight margins that Mr. Dorr describes. I know farmers, in
fact, that have gone bankrupt, but who would have cutoff their
right arm before they would have misrepresented on a document
anything for the purpose of avoiding limits or receiving funds
to which they were not entitled. That is not a standard in
Minnesota, and that is not a standard, frankly, that I want to
be represented here in Washington for programs that Minnesotans
are participating in.
Thank you, Mr. Chairman.
The Chairman. I would just say, again, on the transcript,
again, Mr. Dorr, on down it goes on as a conversation and says:
``Tom Dorr: What actually happened there was way back in
perhaps even 1989, but--no, no, it was in 1990 because that
does not show up until then, either 1990 or 1991. I--we filed,
we filed the way the farm, the trust land, both for the Belva
Dorr Trust and the Harold Dorr Trust are operated with the ASCS
to, quite frankly, avoid minimum payment limitations. OK?'' End
of statement.
Now, if you had said we farmed it the way we did, here is
the way we farmed it, and we did this and this to maximize the
amount of farm payments we are going to get, no one is going to
argue with that. The argument is your own statement saying that
``we filed, we filed the way the farm, the trust land, both for
the Belva Dorr Trust and the Harold Dorr Trust are operated
with the ASCS to, quite frankly, avoid minimum payment
limitations.''
That, I believe, is the crux of the problem. As I said
earlier, we have a problem here, and that is the crux of it
right there.
Mr. Dorr. Senator, we did not file for the Belva Dorr
Revocable Trust. That trust was operated on a crop share basis.
The record will clearly show that.
The Harold Dorr Irrevocable Family Trust was filed as an
operating entity, in which ultimately Dorr's Pine Grove Farm
Company custom farmed it, and that was filed and signed by my
aunt. I did not do that. She did that, and that was at the
behest of my uncle, in discussions we had with him earlier,
because he wanted to make sure that there was plenty of cash-
flow coming out of that trust. There were 24 grandchildren who
were beneficiaries of that and who were getting some of their
college tuition money from that.
He said, ``I would like to do it this way.'' He said, ``We
will pay you well when things are going good, but when you have
a poor crop year, you are going to have to take less for your
custom farming operation in order that we keep the revenue
stream up for these kids for their college education.''
There were also two of those children who were actually
trying to consider coming back to the farm at one point, and it
was the way in which he wanted it handled.
I am sorry that there is a misunderstanding on this. There
is nothing in this that was falsified with the ASCS office.
There is nothing that I am aware of that was done illegally. In
fact, the county committee, as I have said earlier, early on in
the original evaluation of this, said there was no problem.
The Chairman. Was your operation a crop share operation
previously, until 1989?
Mr. Dorr. Whenever, yes, prior to that it was a crop share
operation.
The Chairman. Prior to 1989?
Mr. Dorr. I do not know what year exactly it was, Senator,
whether it was 1989 or 1988. I cannot remember for sure what
year it was.
The Chairman. This is the same operation that you had from
1989 to 1995, but during that period of time you called it
custom farming for those years.
Mr. Dorr. That is correct.
The Chairman. Before, it was crop share; after that, it was
custom farming, and yet nothing else had changed?
Mr. Dorr. Correct, other than my uncle approached me----
The Chairman. Then one must ask why would you change it
from crop share to custom farming? FSA looked into it and said
that was not a truthful characterization; is that not right? Is
that not what FSA said, that that was not a truthful
characterization of the arrangement that you had?
Mr. Dorr. No, they did not say it was a--they said there
was a division of shares violation. They did not agree with the
allocation of the capital and the management that was given to
the system.
The Chairman. FSA, basically, said that it was custom
farming. Did they say that was custom farming? Did they agree
with you on that?
Mr. Dorr. I do not know what FSA said. I do know that we
did not agree with the ruling. I know that we had considered
appealing it. In retrospect, I wish we had. I also know, as I
stated earlier, similar to a tax audit or anything else, you
make business decisions, and if, in fact, someone does not
agree with them, and they are reviewed, and you look at them,
and you say, ``OK, fine. What is the best way to resolve it?''
It was much less expensive than hiring an attorney,
spending a lot of money on legal fees, and so we decided to go
ahead, and not only did we go ahead and pay the requested sum
back, but we then also asked them to tell us how they wanted us
to set it up so that it would be structured in a manner that
they felt was proper.
The Chairman. It is my information that FSA said that
nothing changed, that it was crop share all the way through.
Mr. Dorr. I guess I disagree with that, but that is their
interpretation of it.
The Chairman. What changed in 1989? You, yourself, just
said here it was crop share until 1989, and then after that it
was custom farming. I do not see that there is any change in
any relationship or anything that indicates that, other than
your own words on that.
Now, I----
Mr. Dorr. Senator, excuse me.
The Chairman. Go ahead.
Mr. Dorr. The difference is in terms of how you and others
view whether or not we were paid too much for the services that
we provided. Frankly, if you would discuss it with anyone in
our family, with the exception of this one particular brother,
they all felt that the services that they paid us for were
adequate and that they intended to do that and that there was
nothing out of line with regard to that particular situation.
The Chairman. Mr. Dorr, I want to move on to several other
areas in which I have some concerns, a departure from this part
of it to just a few more things.
I am going to go back to 1991, when you were a member of
the Iowa Board of Regents. You expressed opposition to the Iowa
law related to requiring minimum purchases of State vehicles
powered by alternative energy sources. It was supposed to be 5
to 10 percent of all vehicles purchased. What this amounted to
was an effort to provide a small amount of support for State-
owned vehicles to use ethanol.
I am just reading from the transcript here of a meeting of
the regents. It said, ``Regent Dorr expressed his concern
regarding the requirement to purchase vehicles powered by
alternative energy sources at a minimum of 5 percent to 10
percent of all vehicles purchased. President Pomerantz said it
is a State law. Therefore, it is mandated, and they have no
choice. Regent Dorr said that requirement ties in with the
whole issue of funding. The law is an extremely expensive
proposition. It is a bad piece of legislation.''
Do you still hold this view?
Mr. Dorr. Senator, I am glad you read the document. I had
forgotten about that, and I guess that was just not something
that I was aware of. However, I will say this. At that point,
my responsibility on the Board of Regents was one of fiduciary
oversight, governance of the three universities and the two
special schools as one of a nine-member board.
I am very strongly in support of ethanol, and biomass, and
the utilization of biomass resources for the benefit of adding
value to agricultural products in the State of Iowa and
throughout the country. We have made a lot of progress in that
regard.
By the same token, in that particular situation, we had a
finite amount of resources, and as you heard Dr. Curris say
earlier this morning, and quite frankly I had forgotten about
that, as well, until he brought it up, we were having
difficulty always making choices and selections about what were
priorities, at that particular situation and that particular
time, I obviously felt that it was a higher priority to make
sure that we had adequate resources to provide educational
opportunities for our students and the resources to maintain
strong, viable institutions in the State, and it was a decision
I made based on those obvious judgments at that time.
The Chairman. Will USDA Rural Development be less
supportive of ethanol than in the past under your leadership?
Rural Development has been very supportive.
Mr. Dorr. Absolutely, I understand that. Frankly, Rural
Development has a very vital and potentially strong role to
play in the commercialization of all of these alternative fuel
and value-added initiatives. I would expect them to continue to
do so under my leadership if I am so confirmed.
The Chairman. I asked Mr. Keeney to stay here this
afternoon. I wanted to talk a little bit about sustainable
agriculture and the Leopold Center. Quite frankly, I am more
than a little concerned about Mr. Keeney's testimony, and some
of the things that have come up about the Extension Service and
also the Leopold Center.
Sustainable agriculture has made great progress and
provided new opportunities for diversification. Through
sustainable agriculture, farmers have improved the quality of
our environment and our standard of living.
During your time on the Iowa Board of Regents, did you try
to restrict the director of the Leopold Center to further his
efforts to promote sustainable agriculture?
Mr. Dorr. Senator, I was a bit surprised by that statement,
and to the best of my knowledge, no. There were discussions
that he and I had, and he knew that I did not necessarily
always agree with the direction that they were going, but to
the extent that I recall my time on the board and my
involvement with the Leopold Center, I thought that all of our
discussions were in the context of an enlightened discussion
and not one which necessarily meant that I was trying to impact
the efficacy of that organization.
The Chairman. Well, Mr. Dorr, did you at any time threaten
the Leopold Center's budget?
Mr. Dorr. If I did, I do not recall, no. No, I, frankly, do
not have any recollection of ever having threatened their
budget.
The Chairman. Mr. Dorr, did you at any time ever contact
members of the Iowa legislature's Appropriations Committee to
carry out an intent to help cut the Leopold Center's budget?
Mr. Dorr. Not that I am aware of, no.
The Chairman. Did you at any time contact any members of
the Iowa legislature's Appropriations Committee urging them to
cut the budget for the Leopold Center?
Mr. Dorr. [No response.]
The Chairman. You do not recall that?
Mr. Dorr. I do not recall that, no.
The Chairman. In 1995, well, let me ask, there was one
other issue on this that Mr. Keeney said that--well, we will
have to submit it for the record then. I understand, according
to, again, an article that was in the newspaper, that ``Mr.
Keeney says that Mr. Dorr, while serving on the Iowa Board of
Regents, barged into the Leopold Center's campus offices and
complained about sustainable agricultural programs. Keeny said
ISU officials had to ask Marvin Pomerantz, the Regents'
president at the time, to explain to Dorr that he needed an
appointment.''
In his testimony today he said, ``In order to protect my
colleagues, staff and myself from similar outbursts, I
questioned the propriety of this kind of action by Mr. Dorr. I
was told that a member of the Board of Regents must have any
meetings on campus approved in advance by the president's
office.''
He quoted here, he said, ``The regents cannot just walk
into an office and give you hell, but he was doing that, Keeney
said. He would all of a sudden look up and there he was. He was
badgering the staff.''
Again, I am just quoting that. I am concerned about the
Leopold Center.
Mr. Dorr. May I respond to that?
The Chairman. Absolutely.
Mr. Dorr. Let me say, first, that when the Leopold Center
was originally established, I looked at it with a great deal of
intrigue and interest. In fact, I am not sure if Dr. Keeney was
the director at that time or not, but the assistant director,
and I apologize, I cannot remember his first name, but the
assistant director was a Dr. Swann. I believe he came from the
University of Minnesota.
At the time that this was set up in the late 1980's, mid/
late 1980's, we were in the business of retailing soybean seed
and, like many dealers, had Field Days. I tried to invite a
dearly departed friend of bio agriculture, now, Chet Randolph,
who did show up, along with Dr. Swann. They came to our Field
Day, and they made a presentation, and they talked about the
Leopold Center.
Early in the development of the Leopold Center, I was
intrigued, I was interested, and quite frankly I was anything
but, I was very supportive. To suggest that I have had an
innate, antagonism toward the Leopold Center is just not a fair
characterization of my background and perception of this.
I also have had a great deal of concern over the years as
to how farm policy and issues have evolved to the extent that
they impact individual farm producers in a way that they are
subjected to rules and regulations, and costs, and expenses
that they simply cannot bear up under and continue viable
operations.
One of the times, and this is the particular issue that Dr.
Keeney was talking about, I was at a continuing education
seminar in December 1991. I do not remember all of the
specifics of the issue, but one of his staff members was making
a presentation at this continuing ed seminar for commercial ag
producers. That presentation, as I recollect, was given out of
context relative to what the research was about. It was
involving the nonpoint source pollution of water. For whatever
reason, and again I do not--you have caught me a bit off guard
here. I do not remember exactly why--but I knew it was out of
context, and I knew it was not appropriate.
When I got done, I was rather upset, but I did not say
anything there. I walked across campus, and I did walk into Dr.
Keeney's office, and I asked if I could meet with him, and he
said, yes. We went into his office. I do not believe I badgered
any of his employees or any of the staff members. I said, ``One
thing I want to make perfectly clear, Dr. Keeney, is I am here
as Tom Dorr, farmer, agribusinessman. I am not here as Tom
Dorr, Regent.''
Then we discussed this matter. He, in fact, and as I
recollect, indicated that perhaps my understanding of what was
said and what the research was intended to be may have been, in
fact, correct. You may recall, also, that in the spring of 1990
and 1991, after some particularly dry years in 1987, 1988, and
1989, there was a deep concern for the high level of nitrates
coming down through the Des Moines River watershed, through the
city of Des Moines, and Mr. McMullen, I believe is his name,
the head of the water system, was concerned about having to
install denitrification equipment.
At the time, I said to Dr. Keeney, ``When, in fact, are we
going to have an opportunity to look at the research that goes
back to the early 1940's, prior to the implementation of
commercial fertilization and find out what those nitrate levels
were?''
Unbeknownst to me, at that point, and I do not know exactly
why, but he admitted that they had a young researcher on their
staff that had gone back and dug through some archives and had
determined that in circumstances very similar to 1990 and 1991,
that, in fact, the nitrate levels in the Des Moines River were
as high or maybe even a little higher than they had been that
spring.
My question was, ``Well, then why do we not discuss this?
Why do we not have this as part of the debate? Because we are
talking about instigating programs that are going to create a
certain amount of expense for producers, perhaps detract from
their ability to raise the proper size crop they need to
sustain themselves, and implicate a lot of expense for the city
of Des Moines.''
He said to me, and I have not forgotten this, he said,
``Well, the young researcher that did that was a very bright
young man, and for that to come out at this point may, in fact,
negatively impact his career.''
I said, ``Fine.'' I left it at that. I was disappointed. I
let him know that I was disappointed. I walked out. I did not
go to the president of the university. I did not go to anyone
in his department. I did, in fact, discuss it with friends and
colleagues of mine, but it was not until about 2 or 3 months
later that I even had any inclination that he had gone to
someone to suggest that I was acting inappropriately in his
particular office, and the result of that was that everyone
said it really was not a very big issue.
That was the gist of that particular situation, and I am,
you--that it needed to be clarified.
The Chairman. Well, but you would say that if you were the
Under Secretary for Rural Development that you would be
promotive of programs dealing with sustainable agriculture?
Mr. Dorr. I see no reason why I wouldn't. I----
The Chairman. Well, that is----
Mr. Dorr. Well, Senator----
The Chairman. You wouldn't, OK. Just be honest. You
wouldn't be, right? You said----
Mr. Dorr. I would be, yes.
The Chairman. You wouldn't--you would be.
Mr. Dorr. I would.
The Chairman. You would be supportive.
Mr. Dorr. To suggest that I am not supportive of a
sustainable agricultural system in this country goes against
everything that I and my family stand for. My father and my
uncle had no high school education. There were 14 siblings.
They educated all of them on those family farms. Some of them
got extended master's degrees. Over half of them did. They
believed strongly in education, and they believed in the value
of the land and what the farm could do for their family and for
their community. They were dedicated and devoted to that rural
community. My father was the president of the school board when
it was built. My wife and I had been actively involved in other
things in those communities. To think that sustainability in
agriculture is not directly related to rural communities and
rural America and is something that I wouldn't be supportive of
goes against everything that I have ever lived and believed and
breathed.
The Chairman. Thank you, Mr. Dorr.
Senator Thomas has been very patient. Thank you for coming
back.
Senator Thomas. Yes, well, I apologize for not being able
to stay. We had some energy things going on and so on. Welcome,
Mr. Dorr.
Mr. Dorr. Thank you, Senator.
Senator Thomas. Good to have you here.
I guess first I would like to say that this is an unusual
hearing. I don't know that I have ever been in one like this
before in my 6 or 7 years here, partly because of the approach
that has been taken here and the questioning that comes from
newspaper articles and things like that. That is interesting.
The second is it seems to me it is unacceptable that we
have gone a year before this has been done, and I am a little
disappointed in that. Nevertheless, I just hear the last of
this questioning, and I guess the bottom line is: Did anyone,
FSA or Government offices, find some faulty activity, some
illegal activity in this payment thing that you went through?
Mr. Dorr. Senator, I will--they said that there was a
division of shares violation. Subsequently, there was a letter
sent out that said that there was nothing criminal or no scheme
or whatever involved in this. It was a difference of opinions.
Senator Thomas. I have a letter here that has indicated did
not participate in a scheme or a device to evade the maximum
payment limitation regulations, which sounds pretty good.
Let me go back more to what is really more important to
where we are. Could you tell me just in your view what is the
mission of the Rural Development Agency as you see it, as you
have looked at it and pondered being a part of it?
Mr. Dorr. It's very clear that rural development up over
the many years has been primarily focused on the development of
infrastructure, capacity, housing, and to a lesser extent, the
development of making available resources for entrepreneurial
activities or business activities that had access to limited
funds.
A very significant component of rural development
historically was obviously the rural electrification, rural
telephone systems, and development implementation.
On the one hand, it tended to, in my view, end up taking a
back seat to many of the other programs in the various farm
bill debates. It's very clear to me that now rural development
has a very significant and substantial role to play in the
sense that we are at a critical crossroads in how we define
what our rural communities are going to be.
My fundamental view is that we have a responsibility to try
to facilitate ways to encourage and make it exciting and
attractive for people in businesses to invest in rural America
so that those of us who wish to live there and reside there and
have an adequate way of making a living and enjoy the
environment and the benefits from living there can.
This is going to be difficult. It's going to take some
creativity. It's going to take some work. In the few months
that I have been in and out of town, that we have a good staff
of people. There are a lot of folks who have given a lot of
thought to these things, and we are well prepared to embark on
this. If I am confirmed, I am looking forward to that an
opportunity.
Senator Thomas. The Congresswoman that was here this
morning from North Carolina was talking a lot about the
difficulties in her communities and so on. Do you think that
kind of an approach will have an impact on the economy in that
area particularly?
Mr. Dorr. Senator, it's a struggle trying to identify the
various opportunities that will be effective in these rural
communities. We all know that. It's perhaps one of the things
that has over the years created some problems for me, and that
I frankly didn't expect I would be sitting here, but I was
always trying to search for ways and means in which we could
revitalize these communities.
We have to look at different ways and how we leverage our
assets, both our human and our financial assets in these rural
communities, in the context of congressional mandates and the
congressional direction that come down the road.
I understand in the Senate farm bill there are some very
significant discussion being made toward venture capital
programs and that thing, and they would give us a great deal of
help.
Senator Thomas. We had a meeting in Wyoming a while back.
Someone from the Kansas City Federal Reserve spoke and
indicated--and I can't remember exactly the number, but a very
high percentage of rural--a low percentage of rural communities
now are dependent on agriculture, that they indeed have to have
other kinds of things to supplement the agricultural community,
which we all want to leave there, of course.
Do you think value-added cooperatives and niche markets,
that kind of direct marketing for agriculture and so on, has a
place in this activity?
Mr. Dorr. Well, it's clear that as we explore what--
knowledge-based economics, the utilization of technology, et
cetera, really, in fact, do give us a real leg up in rural
America. If we can have access to broadband and if we can have
access to these kinds of tools--and we can--it will make it
possible for a lot of these bright entrepreneurs to exploit
their niches and their opportunities in those areas, and we
can, yes.
Senator Thomas. Well, it is difficult, there is no
question. Agriculture is changing, as is the rest of the world,
and our agricultural markets are changing and so on. We will
see change, and certainly--well, I know there is often
disagreement in appointments and so on, but obviously the
President has prerogative of selecting and putting forth his
applicants. We have the choice here of voting however we want
to, but I am glad we are doing this. This needs to be resolved.
There needs to be somebody there. We need to be moving. I wish
you well.
Thank you, Mr. Chairman.
Mr. Dorr. Thank you.
The Chairman. Thank you, Senator. I would just say to my
friend from Wyoming that I did not assume chairmanship of this
committee until July and that the Senator may have prevailed,
tried to prevail upon the former chairman to move this nominee.
I don't know, but it was not done at that time.
Senator Thomas. This is March, however, Mr. Chairman. July
was quite a ways ago.
The Chairman. Well, I find it more than passing strange and
curious that my friend from Wyoming complained loudly last year
that we were moving too fast on the farm bill and a little too
slow on this. Too fast, too slow.
Senator Thomas. I have to say in fairness, this has been 9
months. There we got the word--we got the farm bill at 10
o'clock one night and voted on it the next day, Mr. Chairman.
You can say what you want, but that is the way I feel about it,
and I felt about it then and I will continue to feel about it.
The Chairman. The Senator is certainly entitled to his
feelings.
Senator Thomas. Thank you.
The Chairman. Let the record show that the nominations came
to this committee in April. They immediately became
controversial. I became chairman in June--actually, not until
July did I actually get chairmanship. We did not have a full
committee until July. The USDA Inspector General was
investigating the FSA payment matter until September the 26th
in 2001, and I didn't feel it was advisable to have a meeting
on this particular individual until the Office of Inspector
General had completed its investigation.
The Senator from Michigan.
Senator Stabenow. Thank you, Mr. Chairman. I would just
also note that with the farm bill and all of the efforts that
have gone on for months and months, I am pleased that we
achieved that, and thank you for your leadership on the farm
bill, and now we are able to move on to other important things.
Mr. Dorr, I appreciate, your being here----
Mr. Dorr. Thank you, Senator.
Senator Stabenow [continuing]. Your willingness to serve.
We appreciate that.
The challenge for us always is in matching up individuals
with particular positions, and that is really our role, to have
an opportunity to ask questions and see whether or not there is
a fit in terms of philosophy or perspective.
In hearing Mr. Bailey this morning speak in support of your
nomination and praising your business and management skills, he
said something that I was concerned about, and I am sure he
meant this as praise. He said that you understand that the
easiest way to kill social capital is to make a Federal grant.
My concern is that rural development is the awarding of
loans and grants, in large part. We took a look at last year
and through USDA, $2.5 billion was spent on rural development,
much of that was grant money. That leveraged a total of $8.2
billion in Federal support for rural communities. Coming from
the great State of Michigan, our small communities have relied
on those loans and grants, whether it is to address sewer and
water problems or to deal with other critical issues that
affect our rural communities.
I am wondering if you might respond to Mr. Bailey's comment
that the easiest way to kill social capital is to make a
Federal grant. As Under Secretary, how would you intend to
award grants to rural communities? In fact, do you agree with
this statement that Mr. Bailey made?
Mr. Dorr. Well, Senator, I am aware that rural development
is heavily involved in making a variety of grants, particularly
in infrastructure development areas. Quite honestly, I can't
speak for Mr. Bailey. I'm not exactly sure to what he was
referring.
I would simply say this: that Mr. Bailey knows that I
believe very strongly, am very passionate about the untapped
potential of many of our citizens, that they are--we have lots
of folks out here in rural America who are very, very capable,
who are underexploited, and who, given the opportunity, could
be real success stories, real great opportunities.
What Mr. Bailey was probably suggesting was that if we feed
them too much and stifle their energies and stifle their
creativity, it's a mistake. Does that mean that we can't and
should not sustain Federal grant programs? Absolutely, the
infrastructure development programs, the broadband programs,
those are all very constructive programs that we need to foster
this development. That's--I feel very strongly about that.
Senator Stabenow. I am wondering, though, in the context of
your role if you were Under Secretary, would you argue for
additional dollars for rural development or fewer dollars for
rural development in the form of grants and loans?
Mr. Dorr. Actually, Senator, the President has made it very
clear that he feels that this country has a strong obligation
to sustaining rural America in a way in which it maintains its
viability and its strength. We've had a history of a social
contract with rural America, and there's nothing that I've seen
or heard or, frankly, feel myself personally that would suggest
that we would want to diminish that social contract. The
iterations that it takes, as you all know, change from time to
time. Changes occur and we have to evaluate them. What I--in
all honesty the venture capital, the rural business investment
cooperative or corporation sorts of things that the Senate is
looking at now in the pending farm bill make a great deal of
sense. The ability to maintain adequate housing, health care
facilities, and those sorts of things that come from the
assistance from these various community facility loans and
grants are critical.
I would make one real quick comment on that as an aside. In
our hometown, when we built the nursing home, Heartland Care
Center that I referred to earlier, we did a very good job at
raising the initial capital. What we found out was that because
we had raised enough money early on, at that point the way the
programs were set up, we were not able to qualify for a
guaranteed loan from Farmers Home Administration because we had
raised too much money. We were too successful.
What we ended up having to do was to go to the investment
banking community. There were no banks locally that could make
the loan. Had we been able to get a guaranteed loan, what would
have happened is our interest rates would have been lower. Our
ability to sustain it and pay that note off and keep that
facility viable would have been far more effective. Most
importantly--and I have made this point there, then; I have
made the point in some discussions with people here since--that
the money we would have saved could have gone to the bottom
line, been reapportioned to the employees, the people that work
in those nursing homes. Frankly, we have a lot of people who
work for minimum wages in nursing homes taking care of our
loved ones. This is a way that we could use Government and use
it effectively without a cost to make it possible to be more
efficient and more effective in sustaining the jobs and those
people that work in those communities. That's the thing that I
would look at.
Senator Stabenow. Mr. Chairman, if I might continue for a
moment?
I am wondering if you might comment on some comments that
were attributed to you in the past during your time with Iowa
State University, that the Extension Service was bogged down in
tradition and no longer serves a useful purpose.
I should tell you that I am a twice graduate of Michigan
State University, and we have not only a great land grant but
an effective cooperative extension history, as well. I wondered
if you could shed some light on those comments and your opinion
regarding cooperative extension.
Mr. Dorr. Well, in fact, you are correct. You have a very
fine program at Michigan State. Dr. McPherson and some of the
friends or the colleagues that he has taken there are doing a
fine job.
The Extension Service, as we all know, evolved out of a
myriad of grants and acts way back in the 19th century, and
they were very, very significant and very effective in bringing
education to the masses and helping us become a more well-
educated and a more defined and a more focused society. It was
very, very effective.
My concern at the time I made the comments in the newspaper
here that, as times change, how quickly can the Extension
Service change to accommodate those, and things are changing
very rapidly and that makes it difficult. My concern was then--
was whether or not the Extension Service could, utilizing all
the funds that it had at its disposal, accommodate that kind of
change to equip these rural communities and these rural
citizens in a way in which they were able to enhance
themselves.
Senator Stabenow. What was your answer to that question,
what would you see as the vision for cooperative extension, or
do you believe that it has in fact, outlived its useful purpose
as it is currently structured?
Mr. Dorr. Senator, I don't know that extension has outlived
its usefulness. I know that there are an awful lot of folks
struggling with how to continue to help extension evolve and
make it more effective. I do know that under the last--in the
last several years under Dr. Johnson, his tutelage as the vice
provost of extension at Iowa State, they've done some
remarkable things. They have changed and they have accommodated
a lot of the things that I frankly feel are very effective.
My sense is that there are areas in which they do change,
and they are changing rather readily, and when those occur,
we'll find it viable.
Senator Stabenow. Thank you. One other question. In our
bill that we passed in the Senate, the farm bill, it contains a
provision for an Assistant Secretary of Civil Rights. I
apologize if you were asked this earlier and I was not here. I
am wondering at this point if you would support having someone
specifically in charge of civil rights at the USDA to assist
you in your position and how you would feel about having an
Assistant Secretary of Civil Rights?
Mr. Dorr. I would absolutely endorse that. This whole
particular issue has been one that has been a bit detracting,
and the bottom line is that civil rights and treating all
people with respect, equally, and according them all the
opportunities possible is not just the law. It is, in fact, the
law. It is the moral and the right thing to do. I would support
that and support that aggressively in its entirety.
Senator Stabenow. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Stabenow.
Senator Thomas. Mr. Chairman, may I ask permission on
behalf of Senator Grassley to insert this in the record? It is
an addendum to his statement.
The Chairman. Absolutely. Without objection, so ordered.
The Chairman. Mr. Dorr, I have just a couple of other areas
I want to cover with you, and it has a lot to do with your
views on perhaps Government in general and some other views you
might have as it might pertain to you as the head of rural
development.
As Senators, public servants, we get a lot of strange mail
a lot of times. Things come in. We can't figure out what it is
all about.
Two years ago, you sent me a letter, and I don't know if
you want a copy to take a look at or not.
Would you give him a copy?
You probably don't have it, so I wanted you to have a copy.
[The memo can be found in the appendix on page 217.]
The Chairman. Mr. Dorr, I don't know who was on the
distribution list, but obviously I was. I don't know who else
was on the distribution list. It has to do with telephone and
telecommunications taxes. You said--and what you sent me was
some copies of your telephone bills, three of them, to show the
charges for both the Federal Universal Service Fee and the
National Access Fee.
You stated in this letter, ``The monthly National Access
Fee per business line of $4.31 in conjunction with the 4.5
percent `Federal Universal Access Fee' frequently exceeds the
total monthly phone usage charges, which are necessary to have
emergency phone lines at our individual farm and hog sites.
Those taxes don't include the Federal and State excise and
sales taxes.''
``These taxes are confiscatory,'' you say.
``Confiscatory.'' You said, ``The total tax for this
statement,'' up in the first paragraph, ``is 14.65 percent.''
You say, ``This is outrageous.'' ``Outrageous.''
There are a couple of other things I want to ask you about
here, but first of all, one of the responsibilities you will
have, you would have as the head of Under Secretary for Rural
Development does directly link up with telecommunications and
access to telecommunications. That is a very important feature
in rural development.
The Universal Service Fund, of which you complain loudly
about in this message you sent me, has existed since the
1930's--since the 1930's--because Congress realized that every
American ought to have access to the telephone network and that
a telephone call in New York City or a telephone call in
Marcus, Iowa, shouldn't be any different. That was the concept
of universal service, to spread the cost of the telephone
infrastructure across America.
The same thing was true with electricity when REA came
through. In New York City, you have 100 people on a mile of
line, but in Iowa we have one person on a mile of line. It says
that we keep those even. The universal service provides reduced
cost for phone service where it is more expensive to provide
it. It is more expensive to provide it in rural Iowa, and to
low-income consumers.
In 1998, schools, libraries, and rural hospitals also began
to receive the benefits of the Universal Service Fund through
lower-cost access to advanced telecommunications systems such
as the Internet. That is the Universal Service Fund.
Now, this has always existed in phone bills. Always, since
the 1930's, since, before you were born, before I was born.
Only recently, I guess, have long-distance companies begun to
include it as a separate item on the bill, but it has always
been there. It was used as a way of offsetting the low number
of people per line that we have in rural areas.
Again, I am, quite frankly, curious about this message you
sent me, including the phone bills, and the Universal Service
Fee here is--on one bill you have $4.74. That is for a month.
On the next one it is 3 cents--3 cents. On the next bill, it
is--well, there is not one on the next bill. Why isn't there
one? I don't know. For some reason there is not one on the
other bill. I don't know why there is not.
Then there is a National Access Fee, which is--the National
Access Fee, and that is $4.31 per month. It is not a tax. It is
the cost that long-distance companies pay to local telephone
companies to help cover some of the fixed costs associated with
the interstate portion of the local loop. It is not a tax. That
is what the long-distance companies pay. That is the National
Access Fee, and as you point out, it was $4.31.
I guess, Mr. Dorr, I am just a little curious--I am more
than curious that you would be complaining so loudly about
$4.74 or 3 cents for the Universal Access Fee, which has been
set up to specifically help rural America.
I find that just really curious. Please respond.
Mr. Dorr. Well, frankly, I am caught a little cold. You are
right, it is my memorandum. I would simply state that I vaguely
remember writing this. At the time that I wrote it, it was
after--there was a substantial increase in the national access
fee, and one of these bills, perhaps another would have been
similar to it. The actual outbound or long distance service was
$2.77. The access fee was $4.31.
I had an employee who lived on the farm. It was actually
brought to my attention by him. He said, ``How long do they
expect us to be able to pay these increased taxes?'' I believe
there was, at that point, some significant change n the--and I
don't know enough about this, quite frankly, to discuss it
pragmatically, but as I indicated in my memo, the total taxes
on the bill--and I'm not arguing with the access fee and the
universal fee issue--but when it got down to the point that the
total tax on the bill was nearly 15 percent, it does seem a bit
egregious and particularly to low income people in rural areas
who, in order to have a bill end up with--if they have any kind
of long distance charges--a tax structure that amounts to close
to 15 percent. I guess I was voicing my concern at that point,
particularly as a result of my own experience, but stimulated
by that of an employee.
Senator Stabenow. Mr. Chairman, would you mind if it--did
not mean to interrupt, if you are going ahead.
The Chairman. I just wanted to point out, again, these are
not taxes. Well, the universal access fee is. That is one that
has existed since the thirties. The other one is the fees that
are charged by the companies, not our taxes, not our taxes, Mr.
Dorr.
Mr. Dorr. All we were doing was responding to the increase
in fees, the fees that come about as a result of whatever the
mandates rules and regulations are that get passed on down to
the consumer, and it's very difficult to maintain----
The Chairman. Well, the only one that was a tax, as I
pointed out, was the Federal Universal Service Fund. It is
calculated at 4.5 percent, and as you--this is what you sent
me. It is on the second page that was sent out by MCI WorldCom,
reflecting an increase of 4/10ths of a percent. That was--yes,
that was something that we did here.
Mr. Dorr. Uh-huh.
The Chairman. The reason we did that was to provide better
universal service for schools and libraries to hook up to the
Internet and to get better access to the Internet. I guess my
point is that you complained loudly about it and yet I'm--
again, I'm saying this bothers me because you are going to be
the head of Rural Development, and here you are as an
individual complaining about a bill that was $4.74 and one that
is 3 cents. This goes to basically help our rural areas.
Mr. Dorr. Senator, I appreciate the need to maintain rural
phone service. It is a very vital link. It is a necessity. On
the other hand, my point was that ultimately 15 percent taxes
or 14.65 percent taxes and fees, et cetera, become a bit of a
burden to people in rural communities. That was my point. I'll
let it rest with that.
The Chairman. Did you have something that you wanted to--I
have a question, but go ahead.
Senator Stabenow. I was just going to followup with you, if
you would not mind, Mr. Chairman, just indicate that, just for
the record, that only 25 percent of the universal service fee
listed on the bill was new as a result of the
Telecommunications Act, I understand, and it was also for rural
hospitals. This was done specifically in order to pay for
Internet access for rural hospitals.
I do not know, Mr. Chairman, if you were going to ask about
anything else in the memo, but I was concerned, in reading
this, and wonder if this is how you feel at this point. The
memo says ``School and local government systems in Iowa alone
have been subsidized so long without commensurate performance
expectations, that a large number have slipped into a slothful
state far exceeding mediocrity. They probably don't receive 30
percent of these taxes. They sure don't need them.''
Then you went on to say, ``I'm sure my rantings won't
change your approach to maintaining a constituency dependent on
government revenue, but should you decide to take a few side
trips through the Iowa countryside, you'll see an inordinate
number of homes surrounded by 5 or 10 cars. The homes generally
have a value of less than $10,000.'' This just confirms my
``10-car, $10,000 home theory.'' ``The more you try to help,
the more you hinder. The results are everywhere.''
I just wondered if you would want to comment on what you
meant by that?
Mr. Dorr. Well, it is reasonably self-explanatory, Senator,
but I feel very strongly that citizens of this country are very
bright and very capable, and given the right opportunities and
right circumstances can do marvelous things. I have observed
over the years the--in the case of telecommunications, the
increase in local and other access fees, the demands that they
put on our elderly citizens in the communities, the difficulty
to deal with phone bills, the difficulty that they have with
keeping track of all of them and paying them, and it is
something that has concerned me.
I was perhaps relating my exacerbation with that particular
issue.
Senator Stabenow. Well, I was not clear, Mr. Chairman. When
it says ``the more you try to help, the more you hinder,'' I
was not sure if Mr. Dorr was referring to public assistance or
what that particular comment was about. Again, rural
development is about helping.
Mr. Dorr. You are absolutely right, and there are some
very, very good programs in rural development, but my focus is
more on the reliability and the success of teaching people how
to fish, and I believe there's a lot of merit in that
particular philosophy. To the extent that that answers that
question, I hope it will.
The Chairman. Mr. Dorr, you said that--I want to get back
to this universal fund. Before 1998 when schools began
receiving the universal fund money, less than 30 percent of
Iowa schools had Internet access. As of the end of last year,
more than 77 percent of Iowa schools were hooked up. That is a
credit to the universal service fund.
Again, my point is, and my question to you on this, do you
oppose these initiatives like that, that help keep rural
America equal to its urban neighbors?
My staff did some interesting research, found out that the
Marcus School District got $5,000 from the universal service
fund. My question is, do you--your letter seems to indicate
that you oppose those, and I ask you here to clarify that.
Mr. Dorr. No. I do not oppose the fact that we make it
possible for rural communities, schools, hospitals and other
institutions to have access to the same capacities and
infrastructure that our urban citizens do. It's the right thing
to do, and we need to do it and do it in a cost-effective way.
The Chairman. Are you opposed to the universal access fund?
Mr. Dorr. No, I don't know that I would be.
The Chairman. Now, I am going to ask you this. Senator
Stabenow brought it up. You said, ``I'm sure my ranting won't
change your approach to maintaining a constituency dependent on
Government revenue.'' Then you said--I just repeat what Senator
Stabenow. ``If you drive around''--let me see this again. ``But
should you decide to take a few side trips through the Iowa
countryside, you'll see an inordinate number of homes
surrounded by 5 to 10 cars.'' I drive around a lot, I don't see
that. Anyway, ``The homes generally have a value of less than
$10,000. His just confirms my 10-car $10,000 home theory.''
What theory is that?
Mr. Dorr. Senator, my frustration has been over the years
that we have not been able to maintain strong, viable rural
communities, and to the extent that we have been unable to do
that and for whatever reason haven't been able to create the
right kinds of economic opportunities or get the--let me go
back to my earlier example when I talked about the community
facility loans and our inability at Marcus to get one for the
Heartland Care Center because we had raised too much money.
Had we been able to get that loan, a direct Government
loan--a guaranteed Government loan to substantially lower our
interest, whether it would have been 100 basis points or 50
basis points, those funds could have stayed in the community,
they could have gone directly to the people working in that
nursing home, many of those who are working as nurses aides and
other folks. The tax structures that we have for many of our
rural citizens--and I've seen them, where you have people
earning not a lot of money, 30 or $35,000, but when they get
all done, they may have, after taxes and after the telephone
taxes and everything else, maybe $20,000 worth of expendable
money. That doesn't leave them a lot to live on.
My frustration is, and what you end up with is you end up
with people moving in with one another, you see devalued
properties in these rural communities, and my contention is we
have to figure out a better way, a better way to make it
economically possible for these people to have the kind of life
that our urban cousins do. That was my frustration that I was
expressing. That's the point that I'm coming from, and to the
extent that that makes any sense out of that paragraph.
The Chairman. Well, certainly, I don't know that. It still
understand the theory, the ``10-car $10,000 home theory.''
Mr. Dorr. Senator, I guess I would respond in this manner.
My focus, from rural economic development point of view, is
that we need to clearly look at all the ways we can that create
60-hour a week jobs that pay $60,000, and forget about trying
to salvage the 80-hour week jobs that are paying $20,000.
That's a general broad-brush statement. We can do that. We can
do that if we look at value added. We can do that if we look at
other creative ways in which we can stimulate growth in these
rural communities.
The Chairman. You just said 60-hour weeks that pay $60,000.
Mr. Dorr. That's a--that's a general statement that I made
to use----
The Chairman. Eighty-hour weeks that pay $20,000? Did I
hear that correctly?
Mr. Dorr. Sure.
The Chairman. An 80-hour week that pays 20,000.
Mr. Dorr. There are a lot of struggling farmers that work
awfully hard, put in an awful lot of hours, and don't make very
much money. They're not--they're not wage--they're not base
wage employees. They're independent family owners, family
business owners, and it's very difficult.
The Chairman. Well, I still find this a little baffling.
Then you said, ``The more you try to help, the more you
hinder.'' I assume, I can only read this as plain English, you
talk about Government maintaining a constituency dependent on
Government revenue. ``The more you try to help, the more you
hinder.'' That is what Senator Stabenow said. ``The results are
everywhere.''
Well, Mr. Dorr, the way I look at it, it seems that the
Dorr family has benefited a lot from Government help. Did you
not, did not the Dorr farms receive farmers home loans back
during the farm crisis of the 1980's?
Mr. Dorr. I don't believe we received a farmer's home loan.
I believe I received a guaranteed loan during the 1980's,
that's correct.
The Chairman. That is a guaranteed loan.
Mr. Dorr. That's correct. I appreciated it.
The Chairman. You went to college. Did you get student
loans?
Mr. Dorr. Yes, I did.
The Chairman. Those were Government backed?
Mr. Dorr. Yes.
The Chairman. You have received farm payments.
Mr. Dorr. Yes.
The Chairman. From the Federal Government, obviously. Has
all this hindered you?
Mr. Dorr. No. Let me make one quick comment. In my farming
operation that many would like to construe as a mega corporate
farm, we employed, I believe 6 or 7 full-time employees. The
employee that had been with us the longest, nearly 35 years,
interestingly enough his wife was in fact a Native American,
raised a Native American. In our program with our employees we
set up retirement accounts, health benefits and a myriad of
programs to benefit them. These were, quite frankly, possible
because of farm program payments and other things of that
nature. These did not go to benefit the largesse of the Dorr
family. We take our social responsibilities very, very
seriously, and we've tried to conduct ourselves accordingly.
The Chairman. I appreciate that. I just--I just found
really, really disturbing a number of things in this, this
``10-car $10,000 home theory.'' I will read the record to get a
better understanding of what you just said. I am not certain I
still understand it. I am really concerned about that kind of
an attitude. It is almost--I do not know, it is almost like
poking fun at poor people. Maybe you did not mean it that way,
and I will take you at your word you did not, but it almost
seems that way, that you poke fun at poor people. A lot of
times they live in a run-down house.
I once asked someone. I said, ``How come there are so many
cars here?'' They said, ``Well, because they're all so bad we
had to junk one to take care of the other.''
Mr. Dorr. Senator, I was not poking fun at poor people. I
was lamenting the fact that we have far too many of them, and I
was looking in my own perhaps poor way, at ways in which we
could figure out to help them out of that.
The Chairman. Well, Mr. Dorr, you have been very patient,
and you have been more than generous with your time.
I have to ask unanimous consent to include in the record
letters to the committee that oppose or express concern about
the nominee.
[The letters can be found in the appendix on page 220-348.]
The Chairman. There are perhaps some other things that we
could go through, but that we have spent a good deal of time
here. This committee will just have to deliberate on this.
I would say that we do have some matters from the Office of
Inspector General, which we cannot go into here. It is my
intent, and I spoke about this, I believe, with the ranking
member, about having a committee meeting to discuss the matters
that were in the OIG report, which is confidential, and which
we cannot bring out to the public record due to the Privacy Act
and things like that.
Well, Mr. Dorr, again, it seems to me that you are
certainly an interesting individual. As I said when I saw you
last week, to the best of my knowledge our paths never crossed
before. You reminded me that maybe we did at one time or
another. There are a lot of your friends who are here who are
supporting you, and many of them I respect highly. There are a
lot of your neighbors who speak very, very highly of you. Then
again there are some neighbors that do not speak too highly of
you either. Those letters have been included also.
This is a vitally important position at the Department of
Agriculture on Rural Development. In our deliberations on the
Senate Agriculture Committee we probably spend as much time and
effort and energy on the Rural Development section as we do
anything. Because we realize as does the House, that we have to
have more of an effort in rural development as part of
agriculture. We have a provision in our bill that sets up a
rural equity fund, in which the Federal Government will put in
150 million, $150 million. That seems to have good support here
and on the House side. You can understand my concerns at some
of the statements that you have made in the past, and some of
the things that are on the record that give me pause as to
whether or not you would see it as your mission to take that
and move that ball down the field aggressively, and to say,
``Yes, the Federal Government has a role to play here.'' We
need equity investments in rural America.
Mr. Dorr. That's correct.
The Chairman. To the extent that the Congress wants it, we
are going to put in money to help invest in new enterprises,
new businesses in rural America. The last thing we need is
someone heading the Rural Development division that thinks that
Government support hinders people, and that somehow that is not
a proper role for us.
I would think that if you take that attitude into the
Department, you are going to have a lot of problems with this
committee and the committee on the House side. They will be
breathing down your neck every day to find out just how much
you are doing to promote rural economic development with
Federal help, with Federal intervention, with Federal support,
with Federal guidance, with Federal direction. This is not the
State Government, it is the Federal Government.
Yes, I agree with you, a lot of times we make mistakes
around here, we do not do things right. A lot of times programs
live beyond their usefulness. I have to agree with you on that
too, that is true. We devise these programs and devise these
things to try to meet emerging needs that are out there. We put
a great deal of emphasis on rural development. Energy,
developing energy resources in rural America. Broadband access,
we had $100 million in our bill for broadband access. Rural
water, waste water. In fact, I would say that in the scheme of
things in terms of what is going to happen to rural America,
that takes its place as equally as important, rural development
takes its place as equally as important as the commodity
support programs that we have.
Mr. Dorr. Absolutely.
The Chairman. Just as we would take pause here to approve
someone for the head of the commodity programs who was opposed
to the commodity programs, we would take pause to appoint
someone who maybe does not see a proper role for the Federal
Government in rural economic development. That is probably a
lot of the concern here. That is my concern.
That does not get to the other issue, the major issue that
Senator Dayton and others brought up, but that is why there is
a lot of concern about your nomination. I do not doubt for a
minute that you are a good person. Too many of my friends whom
I trust and for whom I have a great deal of respect, think very
highly of you. You ought--I have no qualms about your person,
that you are a good person and a caring person. I just assume
all that. It is just where you are in your mindset in terms of
the role of the Federal Government and how aggressively you
would pursue your job as a head of Rural Economic Development,
and to take the tools and the things that we have given to the
Department to carry out, and whether they would be carried out
aggressively and forcefully, or would it be doing the minimal
that is required. That is my concern.
I would yield to you for the last word today.
Mr. Dorr. Thank you, Senator. Let me say first that until a
year ago I had no idea that I would be considered for this
position. To the extent that I have said things in the past
that have been misconstrued or misinterpreted, or perhaps less
than sensitive in the perception of some people, I truly regret
that. There was no intention to do that. I have, as been
outlined by several here today, always been one who enjoys
thinking about issues and thinking outside the box, and perhaps
doing it too aggressively in some cases.
On the other hand, I would like to assure you that if I am
given the opportunity to be confirmed for this position, that
there are--and I have had the chance to look at the tools in
the Rural Development toolbox, and that there are a myriad of
very intriguing and interesting opportunities in there. I do
strongly believe that rural America will only be as strong and
will only be as effective and as vibrant as we are using those
tools now. That suggests that I would continue to use them in
the traditional and the ongoing ways that have always been
there. I suspect not. I suspect I would push people that I was
responsible to, and in conjunction with consultation with you
and other Members of Congress as to new initiatives and new
ways to go about this.
Frankly, I'm aware, very much aware of your initiatives in
the environmental arena and in the energy arena. Wind energy is
a great example. I really think that wind energy has a
tremendous potential, particularly for those of us that live in
the Buffalo Ridge area of the country, and there are a myriad
of other areas that have similar capacity.
One of the things that intrigues me, as an example is, is
there a way to structure those so that we just don't go out and
on a royalty-fee basis allow some electric company to come in
and put a tower up and we walk away with $2,000 a year in
towers--tower royalty fees. In fact, is there a way that we can
collaboratively and collectively own those farms as producers
in whose land it's on? Can we work out arrangements to work
with rural communities that have municipal electrical systems
so that we can tie our systems, the rural electric wind
systems, into those things?
These are areas that I have not seen a lot of thought given
to, at least in my limited exposure to these things. There are
lots of ways that we can leverage the asset base and the people
base in rural America in new and different and creative ways
that have the ability to give us strategic and regional
opportunities that would go far beyond our grandest
expectations. I've seen it. I've seen it in various areas of
the country. I've seen regions of the country where they have
fantastic, sophisticated manufacturing facilities or very
unique value agricultural added facilities, but they don't
always work in the same old structure that we're used to. That
kind of change I recognize is sometimes hard to understand and
hard to come by, but with someone with leadership and
management skills and the right level of encouragement and the
right level of urging, we can effect a lot of those changes.
That is possible, and I don't quibble with you in terms of your
view that we need Government resources to do that.
I would merely part with the fact that I don't discount
Government and all Government programs. What I do suggest and
what I do submit is that there are sometimes other ways that we
can take a look at doing them. I am older. I am more mature
than I was 2 years ago or 5 years ago, and frankly, I know that
you can't make these changes overnight, you can't make these
changes in 4 years or 8 years or 2 years, but I do think with
the right kind of leadership, we can do some things that are
very intriguing and very constructive.
I appreciate the time that you've taken yourself and with
your staff and your committee today, and if confirmed, I'll
look forward to working with you.
The Chairman. Thank you very much, Mr. Dorr.
We will include in the record the statement of Neil E.
Harl.
[The prepared statement of Mr. Harl can be found in the
appendix on page 126.]
The Chairman. Since there is no other business, obviously,
to come before the committee, the committee will stand
adjourned until the call of the Chair.
[Whereupon, at 4:28 p.m., the committee was adjourned.]
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A P P E N D I X
March 6, 2002
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DOCUMENTS SUBMITTED FOR THE RECORD
March 6, 2002
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QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD
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