[Senate Hearing 107-976]
[From the U.S. Government Printing Office]
S. Hrg. 107-976
NOMINATION OF MR. EMIL FRANKEL TO BE
ASSISTANT SECRETARY FOR TRANSPORTATION
POLICY AND MR. JEFFREY SHANE TO BE
ASSOCIATE DEPUTY SECRETARY OF
TRANSPORTATION AT THE
DEPARTMENT OF TRANSPORTATION
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
DECEMBER 6, 2001
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska
Virginia CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon SAM BROWNBACK, Kansas
MAX CLELAND, Georgia GORDON SMITH, Oregon
BARBARA BOXER, California PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri GEORGE ALLEN, Virginia
BILL NELSON, Florida
Kevin D. Kayes, Democratic Staff Director
Moses Boyd, Democratic Chief Counsel
Mark Buse, Republican Staff Director
Jeanne Bumpus, Republican General Counsel
C O N T E N T S
----------
Page
Hearing held on December 6, 2001................................. 1
Statement of Senator Breaux...................................... 1
Witnesses
Dodd, Hon. Christopher, U.S. Senator from Connecticut............ 3
Prepared statement........................................... 3
Frankel, Emil, Nominee to be Assistant Secretary for
Transportation Policy at the Department of Transportation...... 18
Prepared statement........................................... 19
Biographical information..................................... 20
Lieberman, Hon. Joseph, U.S. Senator from Connecticut............ 4
Prepared statement........................................... 4
Oberstar, Hon. James, a Representative in Congress from Minnesota 6
Petri, Hon. Thomas, a Representative in Congress from Wisconsin.. 5
Shane, Jeffrey, Nominee to be Associate Deputy Secretary of
Transportation at the Department of Transportation............. 8
Prepared statement........................................... 10
Biographical information..................................... 11
Shays, Hon. Christopher, a Representative in Congress from
Connecticut.................................................... 6
Appendix
Response by Emil Frankel to written questions submitted by:
Hon. Ernest F. Hollings...................................... 40
Hon. John McCain............................................. 42
Response by Jeffrey Shane to written questions submitted by:
Hon. Ernest F. Hollings...................................... 37
Hon. John McCain............................................. 43
Hon. Ted Stevens............................................. 47
NOMINATION OF MR. EMIL FRANKEL
TO BE ASSISTANT SECRETARY FOR
TRANSPORTATION POLICY AND
MR. JEFFREY SHANE TO BE ASSOCIATE
DEPUTY SECRETARY OF TRANSPORTATION
AT THE DEPARTMENT OF TRANSPORTATION
----------
THURSDAY, DECEMBER 6, 2001
U.S. Senate,
Committee on Commerce, Science, and Transportation
Washington, DC.
The Committee met, pursuant to notice, at 2:35 p.m. in room
SR-253, Russell Senate Office Building, Hon. John B. Breaux
presiding.
OPENING STATEMENT OF HON. JOHN B. BREAUX,
U.S. SENATOR FROM LOUISIANA
Senator Breaux. The Committee will please come to order.
Good afternoon. We are in the Full Committee, this afternoon on
the confirmation of two nominees submitted by the
administration, Mr. Jeffrey Shane to be Associate Deputy
Secretary, Mr. Emil Frankel to be Assistant Secretary of
Transportation Policy at the Department of Transportation.
We are delighted to have some of our colleagues here to
introduce our nominees and we will get right to their remarks
and let them be excused after they make their comments. Of
course, our good friend Senator Dodd is here, and Chris, we
welcome your introductory comments.
[The prepared statement of Senator Breaux Follows:]
Prepared Statement of Hon. John Breaux, U.S. Senator from Louisiana
I am pleased to welcome Mr. Jeffrey Shane and Mr. Emil Frankel to
the Committee today.
The two candidates before us present good credentials in
transportation, law, education and politics. As veteran of the
Department of Transportation, Mr. Shane's knowledge and background will
serve him well as he moves through the confirmation process and into
his new role as Associate Deputy Secretary. As a former Commissioner at
the Connecticut Department of Transportation, Mr. Frankel is up to the
task of Assistant Secretary for Transportation Policy, but we don't
want to downplay the host of challenges awaiting both nominees at the
Department of Transportation. I would like to highlight a few of my
concerns.
SECURITY
After the passage of the Aviation Security Act, there is a lot of
work ahead for the FAA and the Department of Transportation to
establish improved federal security systems at airports, oversee
airplane retrofits, and coordinate relevant criminal data bases. While
much attention has been correctly focused on aviation, I would like to
make sure that security efforts are addressed in a comprehensive
fashion. My subcommittee has held hearings on maritime, rail, and
hazardous materials security concerns. All of these modes face serious
security challenges and they have not received adequate attention and
support from the federal government. We should not wait until a
catastrophe happens to provide the necessary focus to our nation's
transportation systems--there is a clear need to do so now.
COMPETITION
We have watched for many years as the airline, railroad and
virtually every other industry has continued to consolidate--the
transportation sector is not unique in this respect. However, while I
am a true supporter of competition, we will not have a competitive
environment if we are left with only one or two carriers and the
government regulates every movement or transaction.
MARITIME
There are few organizations in the federal bureaucracy that are
more liked and better respected than the Coast Guard. Each year we add
to the Coast Guard's diverse missions in law enforcement, search and
rescue, drug interdiction, port security, and marine environmental
protection. Each year the men and women of the Coast Guard rise to the
new challenges we offer them--and this year is no exception with the
increased demands placed on the Coast Guard after September 11th. But
there is a limit to what we can ask without compromising their safety
and security of the nation. We have made strides this past Congress to
ensure appropriations can support the Agency's mission, but even after
securing substantial additional funding, budget shortfalls remain.
These shortfalls, made chronic by ever-tightening budget caps, will
continue to undermine the agency's operational readiness and the safety
of its service members until we come up with a solution.
TRUCKING
The safety of truck and bus operations in the U.S. is of particular
concern to me. Following a horrible bus crash on Mother's Day in 1998,
I worked with the Chairman to create the Motor Carrier Safety
Administration, and I continue to have concerns about truck and motor
coach safety and security.
The issue of Mexican trucks and buses has been highlighted this
Congress and while I am glad that a resolution was reached in the
Transportation Appropriations bill that was recently approved, this is
an area which requires continued oversight. In 2000, 35 percent of
inspected Mexican vehicles were placed out of service for significant
safety violations, compared with 25 percent of U.S. trucks. In
addition, the DOT IG found that there were hundreds of Mexican carriers
operating improperly outside of the commercial zones. If we do not have
the ability to properly oversee the safety and movements of Mexican
trucks when they are only permitted to operate in the U.S. on a limited
basis, how can we have any confidence in their adherence to U.S. safety
and cabotage requirements if the borders are opened.
PIPELINE SAFETY
The Senate has approved bipartisan Pipeline Safety legislation in
each of the last 2 years. It is my hope that we can work with the
Administration and encourage the House to achieve a strong safety
regime for interstate pipeline operators.
AMTRAK
Finally, the national passenger railroad system will continue to be
a top priority for the members of this Committee. My state is highly
supportive of Amtrak and participates directly with Amtrak in the
development and implementation of existing and new service throughout
Louisiana. The recent finding of the Amtrak Reform Council and the
subsequent requirement that Amtrak prepare and submit a plan for its
own liquidation has created serious questions within the financial
markets about Amtrak's viability. I hope that we can work together to
address the short-term and long-term issues facing Amtrak.
Although you will certainly face many challenges, I look forward to
seeing both of you confirmed and working with you in the future. Please
introduce your families to the Committee and make a brief statement,
the text of your written statement with be included in its entirety in
the record.
STATEMENT OF HON. CHRISTOPHER DODD,
U.S. SENATOR FROM CONNECTICUT
Senator Dodd. Thank you, Mr. Chairman, and I suspect you
will be seeing shortly come through the door my colleague as
well, Senator Lieberman, who wants to be here as well on behalf
of Emil, to express our support for this nominee.
You will see, Mr. Chairman, as you go and take a look at
the background qualifications of Emil Frankel, that this is
just a first-class nomination, and I want to commend the
administration for reaching out to Emil to fill this position.
He has had a distinguished career and knows the areas of
transportation very, very well. He served as our Commissioner
of Transportation in Connecticut for about 4 or 5 years, back
in the early 1990s, I might point out during those immediately
after the passage of ISTEA, which, as we all know, around the
country a transition period and very, very difficult, the first
major federal legislation designed to encourage intermodal
planning and multimodal operations, and he just did a fabulous
job in our state as the Commissioner of Connecticut's
Department of Transportation.
Since then, he has been an adjunct professor at the
University of Connecticut, a fellow at Harvard and Yale, a
graduate of Wesleyan University, Harvard law degree, knows
these issues, knows economic development issues. Part of his
earlier incarnation was at HUD. You tie these together, you
have really got in the person of this nominee a remarkable
individual who will bring, I think, some wonderful
observations, analysis to the office of Transportation Policy.
So I am just pleased to be--I am glad he asked me to stand
and present him to you. I think Joe will echo these comments
when you hear from him. He served, as I said, as a very
successful Commissioner in our state, and I think across the
board in our delegation in Connecticut you will hear nothing
but kudos about Emil Frankel.
Senator Breaux. Well, it is good to have you here, Senator
Dodd, and it is good to have Mr. Frankel and your delegation
supporting you. It is a Republican nomination. You have two
Democratic Senators who are strongly in support of you, and
that is a good sign. Chris, thank you for being with us.
Senator Dodd. Thank you, Mr. Chairman.
[The prepared statement of Senator Dodd follows:]
Prepared Statement of Hon. Christopher J. Dodd,
U.S. Senator from Connecticut
Thank you for scheduling this important hearing. It is a distinct
pleasure to be here in support of the nomination of Emil Frankel to be
the Assistant Secretary for Transportation Policy at the United States
Department of Transportation.
The American people expect thoughtful analysis of the federal
government's transportation choices. The Transportation Policy Office
can play an invaluable role in helping DOT decisionmakers understand
how new technologies and new approaches to design and community
involvement can improve not only transportation, but people's lives. I
hope that under Emil Frankel's leadership, the office will remain at
the forefront of the federal government's efforts to develop a
comprehensive approach to managing our transportation resources.
I have every confidence that Emil will not only succeed, but will
excel in his new role. His background and interests betray a remarkable
understanding of the infrastructure, business, environmental, and
quality of life aspects of transportation policy.
Emil served as the Commissioner of the Connecticut Department of
Transportation from 1991 to 1995, during the critical years immediately
after passage of ISTEA--the first major federal legislation designed to
encourage intermodal planning and multimodal operations. Since leaving
ConnDOT, Emil has be an Adjunct Professor at the University of
Connecticut and a Fellow at both Harvard and Yale where he has
conducted research, written, and taught on issues of transportation
policy, transportation and the environment, and public management.
Emil started his academic career in good standing when he graduated
from Wesleyan University in Middletown, Connecticut. After graduating
from Harvard Law School, he has enjoyed a distinguished career in
business, academia and public service. I am delighted that the federal
Department of Transportation will now have the advantage of his many
talents.
Senator Breaux. Next, if it is OK, because I think Joe had
another engagement--Joe, do you want to go ahead and make
comments now? We will love to have Senator Lieberman's
comments.
STATEMENT OF HON. JOSEPH LIEBERMAN,
U.S. SENATOR FROM CONNECTICUT
Senator Lieberman. Junior colleagues always find a word,
but we always start with an expression of respect for our
senior colleague.
Very briefly, I am delighted to come before you today, Mr.
Chairman, on behalf of Emil Frankel. He has served as a very
able and highly respected Commissioner of Transportation for
Connecticut for 4 years. He has extensive knowledge of
transportation programs and planning. During those 4 years in
Connecticut he oversaw 4,000 employees and a $1 billion annual
budget, was responsible for construction, rehabilitation and
management of a genuinely multimodal transportation system, and
at the same time he was chairman of the Standing Committee on
the Environment of the American Association of State Highway
and Transportation Officials.
Since he has left the state, he has been involved as an
advisor to the Massachusetts Transportation Authority. I have
searched his record, and wanting to create credibility before
you, Mr. Chairman, having two Democrat Senators support him, I
have looked for some Republican contact, because he served
under a truly independent governor of the State of Connecticut
but served as legislative assistant to Senator Javits. Did you
remember that?
Senator Dodd. I did not remember that.
Senator Lieberman. I thought you were here then.
[Laughter.]
Senator Lieberman. Anyway, this is a very good and able
person, and I am really thrilled that the President has put him
before you for this Assistant Secretary of Transportation.
[The prepared statement of Senator Lieberman follows:]
Prepared Statement of Hon. Joseph Lieberman,
U.S. Senator from Connecticut
Mr. Chairman and members of the Committee, I am pleased to come
before you to introduce Emil H. Frankel. Mr. Frankel served as a very
able and highly respected Commissioner of the Department of
Transportation in my state for 4 years and has extensive knowledge of
transportation programs and planning. It is with great pleasure that I
come before you to strongly support his nomination to the position of
Assistant Secretary of Transportation Policy for the U.S. Department of
Transportation.
From 1991 to 1995 Mr. Frankel served as Commissioner of the
Connecticut Department of Transportation where he oversaw over 4,000
employees and a $1 billion annual budget. He was responsible for the
construction, rehabilitation, maintenance, and management of a truly
multi-modal transportation system. This included Connecticut's highways
and bridges, bus and commuter rail services, and airports.
Additionally, he was Chairman of the Standing Committee on the
Environment of the American Association of State Highway and
Transportation Officials and Vice Chairman of the I-95 Corridor
Coalition. He has brought to these positions his in-depth understanding
of Intelligent Transportation Systems technologies, inter-city rail
services, transportation planning and managing, and transportation and
air quality.
Since Mr. Frankel left the Connecticut Department of
Transportation, he has acted as advisor to the Massachusetts Port
Authority on proposals to reorganize state government and worked on a
major transportation Joint Feasibility Study for the Massachusetts
Turnpike Authority and Massachusetts Highway Department. Furthermore,
he served as counsel to the New York City Partnership and Chamber of
Commerce regarding federal surface transportation legislation and he
advised the Delaware Department of Transportation. He has continued to
work with the Connecticut Department of Transportation on management
and governance reforms for bus and commuter rail. In other words, he
has a strong grasp of transportation, including some exciting areas for
transportation innovations. He also truly understands state and local
transportation needs.
Mr. Frankel's federal public service includes serving as a
Legislative Assistant to Senator Jacob Javits of New York and as a
Special Assistant to the Under Secretary of the Department of Housing
and Urban Development.
Mr. Frankel has very strong academic credentials; he graduated Phi
Beta Kappa from Wesleyan University and was a Fulbright Scholar. From
1981 to 1997 he served as a Trustee to Wesleyan. He received his law
degree from Harvard Law School and, in 1995, was a Fellow at Harvard's
John F. Kennedy School of Government. At the University of Connecticut,
he was an adjunct professor. Currently, Mr. Frankel is a Fellow at the
Yale School of Management and a Senior Fellow at the Yale School of
Forestry and Environmental Studies.
When Mr. Frankel is not occupied with the teaching and law, he
serves as a member on the Governor's Council on Economic
Competitiveness and Technology as Chairman of the Council's
Transportation Infrastructure Advisory Board. He is Advisor to the
National Trust for Historic Preservation, Trustee of the Connecticut
Trust for Historic Preservation, and a Director of the Regional Plan
Association. Additionally, he was a Selectman for the town of Weston,
Connecticut.
While Emil's credentials overwhelmingly speak for themselves and
demonstrate his high qualification to be an Assistant Secretary of
Transportation, I would like to emphasize my own personal support. His
experience in the public and private sector, as well as in academia,
allow him to understand the complex nature and importance of
transportation in today's economy and society. He is an innovator and
thinker with a great understanding of state and local transportation
needs. I can think of no better person for the job. I hope you will
confirm him quickly and I thank the Chair and Committee members for
their time. Thank you.
Senator Breaux. I appreciate both of your comments. I want
to get our House colleagues--I appreciate your comments about
his credibility. I noticed--I think I noticed--yes, I noticed
that in the conflicts of interest in Mr. Frankel's testimony
that Mr. Frankel has agreed to, if he is confirmed, to sell his
stock in Enron Corporation.
[Laughter.]
Senator Breaux. I know that is a tough thing to have to do.
We are glad you agreed to do that.
Mr. Frankel. I wish I had been here 2 months ago.
[Laughter.]
Senator Breaux. We are glad to have Congressman Petri here,
and any comments you might make.
STATEMENT OF HON. THOMAS PETRI,
U.S. REPRESENTATIVE FROM WISCONSIN
Representative Petri. Just a word, Senator, to say I have
had the opportunity to know Emil Frankel for longer than either
one of us would like to admit, and he is an honorable person,
and I think the public is lucky to have the opportunity to
benefit from his services. I know that I and a number of us in
the transportation area look forward to working with him. He
brings a very broad range of experience to his job, and I think
will be of great benefit.
Senator Breaux. Thank you very much, Congressman.
Congressman Chris Shays, we are glad to have you.
STATEMENT OF HON. CHRISTOPHER SHAYS,
U.S. REPRESENTATIVE FROM CONNECTICUT
Representative Shays. Thank you, Mr. Chairman. I am
delighted to be here with my two very esteemed Senators, and my
colleague from the House, to just say to you that Emil Frankel
is probably one of the people I respect the very most. If I was
ever in a tight situation, he would be one of the people I
would want by my side, and so I think that our new Secretary
will find him extraordinarily helpful. I think both the
administration will find him very loyal, but I think Congress
will find him very responsive, and I just have enormous respect
for him.
The only quality I wondered if he had was patience, and I
have learned that he is a very patient person, this being
December, and his selection process beginning many, many, many,
many moons ago.
Senator Breaux. Well, we are going to try to do it as
expeditiously as we can, Chris. We thank you and Tom for being
with us. We are going to move on and have Congressman Jim
Oberstar--Jim, if you would come on up with Mr. Jeffrey Shane,
and Mr. Frankel, go ahead and stay at the desk, and we will
have both of our nominees at the table, and we will look
forward to having Congressman Jim Oberstar's introductory
comments for Mr. Jeffrey Shane.
STATEMENT OF HON. JAMES OBERSTAR,
U.S. REPRESENTATIVE FROM MINNESOTA
Representative Oberstar. Thank you, Mr. Chairman. First,
Mr. Chairman I want to thank you and Chairman Hollings for
standing as towers of strength during the aviation security
conference negotiations. Thanks to your firm position and
visionary view we got the best aviation security bill that the
nation has seen, and surpassing even the original 1990 NM 103
bill.
Senator Breaux. Thank you, Congressman. I think you are
certainly correct that Chairman Fritz Hollings deserves the
lion's share of the credit. He did a truly outstanding job, and
I appreciate your comments.
Representative Oberstar. I would say that never in the 35-
year history of the Department of Transportation has a person
been nominated for a position at DOT with better or more
appropriate credentials than Jeff Shane, the only exception
perhaps being the current Secretary, Norm Mineta.
I was present at the creation of the Department of
Transportation in 1966 as administrative assistant to my
predecessor, John Blotnick, who chaired the appropriate
subcommittee at the request of President Johnson, managed the
legislation that crafted the Department, and so I have had a
long view of this issue, and those who have filled various
positions.
Jeff Shane comes to this position with a sweep of
intellect, with the personal and professional integrity, with
more than three decades of extensive experience with the
Department of State and Department of Transportation on
international aviation and trade policy, with credentials that
will enable him to take command of the duties of the office on
which he is about to enter without breaking stride, with a
clarity of purpose, with a clear understanding.
My experience with Jeff Shane extends back over a decade
and a half to his service at both the State Department and DOT
in the Reagan and George H. Bush administrations. We worked on
international aviation and passenger and cargo trade matters.
We worked on domestic aviation issues. In my capacity as
Chairman of the Aviation Subcommittee, I found Jeff Shane
always to be a model of intellectual probity, thoroughly
knowledgeable on a wide range of issues on which he was called
to act, informed, and consistently and a constantly vigilant,
vigorous advocate for U.S. aviation interests, and a skillful,
effective international negotiator.
He was the architect of our government's open skies policy,
Mr. Chairman, to promote competition in our bilateral aviation
agreements. Under this policy, we achieved very significant
competitive agreements that advanced the cause of U.S.
aviation, turned our share in the most important international
aviation markets from 40-60 American-foreign, or 30-70 to 70-30
and 60-40 in favor of the United States. The Clinton
administration continued those policies with great success.
But his experience extends beyond aviation to other modes
of transportation. I would just recall a conversation that Jeff
and I had early in 1992. In the aftermath of the enactment of
ISTEA, we were having a discussion about the significance of
this legislation and he said, it is one of the most
extraordinary, innovative transportation measures ever enacted.
It has had the exceptional benefit of causing Assistant
Secretaries at the policy level in the Department to get
together to share our thoughts, understand each other's mode of
transportation better, to begin thinking and acting
intermodally, something we have long needed to do. That is the
kind of person I want to see in the Department of
Transportation.
Secretary Mineta has told me several times that he wants
Jeff to upgrade the Department's Policy Office to create, as he
put it, a world class think tank. Well, I support those
efforts, and in fact 2 years ago while Jeff was in the private
sector he and Charlie Honicutt, who came to me and out of
concern about the level of staffing at DOT--Honicutt also held
the same position in the Clinton administration--to explore
means of upgrading the aviation policy staff. Normally, folks
out in the private sector, they have left government, they
forget about the public policy issues, but Jeff was concerned.
We met weekly to fashion ideas, approaches, strategies to
get the funding necessary to buildup the staff, which in the
demise of the CAB, when it was transferred over to DOT, was one
time 300, is now well under 100, and half of those are at
retirement age, and you do not have the critical expertise in
the Department to analyze these multibillion dollar aviation
trade deals that we are in the process of negotiating. Jeff
Shane is concerned about it, and wanted us to do the right
thing, took an enormous amount of time to address this issue,
and now he will have the opportunity to first-hand deal with
it, with the support of the Secretary.
I can think of no one better qualified to attract new
staff, to keep them and to inspire them., and in these post
September 11 times, in the aftermath of enactment of this
landmark aviation and transportation security law, DOT needs at
the policy level a person with Jeff Shane's experience,
intellectual capacity, honesty, openness to new ideas, and the
energy to pursue and implement innovation. His reentry into
public service, Mr. Chairman, will produce better
transportation policy decisions to the benefit of our nation's
economy and to the benefit of the Department, and to the
benefit of the American public generally.
Senator Breaux. Well, Congressman Oberstar, thank you for
coming over from the House. You are truly the transportation
guru of the House, and those remarks coming from you are very
encouraging about your relationship with Mr. Shane and your
knowledge of his background, and your support is very
important.
It is clear that both of these nominees have bipartisan
support from both Republicans and Democrats, and that has got
to be a very positive indication about the job they are going
to be able to do.
So Congressman, thank you for being with us, and you can go
back and do something over there.
[Laughter.]
Senator Breaux. Gentlemen, we have heard some nice words
about both of you. We would like to hear from you. Mr. Shane,
we will allow you to go first, if you would give your
statement, and then we will follow with Mr. Frankel.
STATEMENT OF MR. JEFFREY SHANE, NOMINEE TO BE
ASSOCIATE DEPUTY SECRETARY OF TRANSPORTATION AT THE DEPARTMENT
OF TRANSPORTATION
Mr. Shane. Thank you, Mr. Chairman. Before Congressman
Oberstar leaves, I just want to express my profound gratitude
to him for those very, very gracious remarks. Having him here
means more than I can say, and I really am grateful to you for
taking the time, especially in this environment. Thanks so
much.
Mr. Chairman, I have a prepared statement, a longer
statement that we have submitted, and I would ask that that be
included in the record. I would like to summarize that.
First, I really do want to express my gratitude to the
Committee and to you personally in this busiest of times for
holding the hearing today. I want to underscore my commitment
from the very outset, if I am fortunate enough to be confirmed
by the Senate, to continue to work with this Committee and its
staff as in past years as closely as possible in addressing the
extraordinary challenges that confront our nation's
transportation system today.
Mr. Chairman, my wife, Jean Wu is here today, and I have
relied heavily on her understanding and encouragement. From the
moment I first considered putting my law practice on hold for a
possible return to government, she has been a full partner in
this enterprise, and I am eternally grateful for her wisdom and
her support, and for her love.
Senator Breaux. We are glad to have her as well.
Mr. Shane. While I am expressing thanks, let me of course
say how grateful I am to President Bush, to Secretary Mineta,
to Deputy Secretary Michael Jackson for inviting me to join the
superb team they have assembled at the Department of
Transportation. If I am fortunate enough to be confirmed by the
Senate, this appointment will represent my fourth tour of duty
at DOT. For the past 8 years, my legal practice has been
largely devoted to transportation issues. A variety of
extracurricular activities have also been about transportation.
All of this is detailed in the material I submitted to the
Committee.
It is fair to say I have been involved in transportation
policy for the greater part of my professional life. I do not
know of any issues that are more important to the long-term
economic vitality of this country. That is why it would be such
an honor and such a privilege to be able to return to DOT and
to continue this work.
As you know, Mr. Chairman, Secretary Mineta has proposed a
reorganization of the Office of the Secretary to ensure a more
effective transportation development function there than has
existed for some time. The Secretary has proposed that I head
up that new structure, and the administration has proposed to
the Congress a small legislative adjustment to the Secretary s
senior staff to facilitate that new restructuring.
I have spent enough years at the Department to know quite a
lot about what works and what does not, and I have every
confidence that this reorganization will work. I hope,
therefore, that if I am a confirmed I will be in a position to
help breathe some life into Secretary Mineta's vision.
The events of 9/11 have altered DOT's agenda in fundamental
ways. The Aviation and Transportation Security Act is a seminal
piece of legislation, an act of which the Congress can be
immensely proud, and I can report that the Department began
working full bore on its implementation even before it was
signed. In my temporary advisory capacity at the Department I
have been working with the Secretary's team on establishing
this new Transportation Security Administration, and I can
report that the effort those far has been both extremely
intense and extremely impressive.
The implications of that legislation, however, go far
beyond the establishment of a new agency, or the many specific
requirements that it contains. That act, the Port, Maritime and
Rail Security legislation which has been introduced, and
perhaps future acts of Congress, leave no doubt that we have a
fundamental obligation to perform all of our jobs within a new
and more security conscious environment. What we need is a new
culture within our transportation sector, one that treats
security as an essential element of the logistics process.
The administration and the Congress have some big issues to
address during the next few years, during which we will have to
reauthorize all of our major transportation programs, but from
this point on we will have to take up those issues within the
context of a security challenge the dimensions of which we are
only now beginning to understand. It would be an immense
privilege to be able to work with you in that essential
enterprise.
Let me conclude by saying again how honored I am that the
President has nominated me for this position. I thoroughly
enjoyed working with this Committee and it staff during my past
tours in the executive branch, and I very much hope that I will
have the opportunity to do so again. I hope that it will be
possible, with the Senate's advice and consent, to get to work
very soon.
Thank you very much.
[The prepared statement and biographical information of Mr.
Shane follow:]
Prepared Statement of Jeffrey N. Shane, Associate Deputy
Secretary-designate, Department of Transportation
Mr. Chairman and Members of the Committee:
First, I want to express my gratitude to the Committee for your
willingness, in this busiest of times, to schedule this hearing. I also
want to underscore my commitment from the very outset, if I am
fortunate enough to be confirmed by the Senate, to work with the
Committee and its staff as closely as possible in addressing the
extraordinary challenges that confront our nation's transportation
system today.
I am extremely grateful to President Bush, Secretary Mineta, and
Deputy Secretary Jackson for inviting me to join the superb team they
have assembled at the Department of Transportation.
My wife, Jean Wu, is here today. I have relied heavily on her
understanding, encouragement, and guidance from the moment I first
considered putting my law practice on hold for a possible return to
government service. She has been a full partner in this enterprise, and
I am eternally grateful for her wisdom, her support, and her love.
Finally, let me express my heartfelt thanks to my good friend
Congressman Jim Oberstar for his gracious introductory remarks this
afternoon. Having him here means more than I can say.
Let me start by summarizing my background.
If I am fortunate enough to be confirmed by the Senate, this
appointment will represent my fourth tour of duty at the Department of
Transportation. My first began in the late 1960s, when I served as a
trial attorney and later Special Assistant for Environmental Affairs in
the Office of the General Counsel. I appeared for DOT in a great many
regulatory proceedings before the Interstate Commerce Commission, the
Civil Aeronautics Board, and the federal Maritime Administration, and
spent a considerable amount of time on the implementation of the
National Environmental Policy Act in the context of the nation's
transportation programs.
In 1979, after several years of traveling and working overseas--
mostly as an environmental lawyer for the United Nations Development
Program--I returned to DOT as Assistant General Counsel for
International Law. After four years in that position I moved to the
Office of Policy and International Affairs as Deputy Assistant
Secretary.
In 1985 I moved to the Department of State as Deputy Assistant
Secretary for Transportation Affairs to serve, among other things, as
chief aviation negotiator. I remained at State for four years.
I served as Assistant Secretary of Transportation for Policy and
International Affairs from 1989 to early 1993, working for Secretaries
Samuel Skinner and Andrew Card on the full range of transportation
issues for which DOT has responsibility.
Since early 1993 I have been practicing law. I am currently a
partner at Hogan & Hartson in the firm's Washington office.
I should also mention some extracurricular activities that I have
been engaged in during my time as a private practitioner. First, from
1994 until about a month ago I served as a Vice President of the
National Defense Transportation Association and as Chairman of its
Military Airlift Committee. The Committee exists for the purpose of
fostering as healthy and productive a relationship as possible between
the Defense Department and the civilian providers of airlift on whom
DOD relies so heavily at all times.
Second, also for the past seven years, I served as Chairman of the
Commission on Air Transport of the International Chamber of Commerce.
The Chamber represents the international business community before
governments everywhere, and the Air Transport Commission's job is to
formulate sensible positions, on behalf of business enterprise the
world over, in the area of aviation policy.
Finally, I was recently elected chair of the American Bar
Association's Forum on Air and Space Law--a large group of lawyers
around the country who specialize in aviation and space issues.
You will have inferred from this history that I have been involved
in transportation policy for the greater part of my professional life.
That is why it would be such an honor and privilege to be able to
return to the Department of Transportation and continue this work.
I am enthusiastic about this opportunity for a number of reasons.
First, I have known Secretary Mineta for many years. Based on his 21
years of service in the Congress, he brought a level of experience in
federal transportation programs to the Secretary's office on his first
day in the job that we have not seen in a very long time. I knew from
the outset that this is likely to be a uniquely productive time for DOT
under his leadership, and therefore the right time to be a part of the
DOT team.
Deputy Secretary Michael Jackson was a friend and colleague during
the first Bush Administration, when he served as Chief of Staff to then
Secretary Andrew Card. Mr. Jackson is another extraordinarily talented
public servant and it would be a special privilege to work closely with
him once again.
As you know, the Secretary has proposed a reorganization of the
Office of the Secretary to ensure a more effective transportation
policy development function than has existed for some time.
Secretary Mineta has proposed that I head up the new structure. I
have spent enough years at the Department to know quite a lot about
what works and what doesn't, and hope, if confirmed, that I will be
able to help breathe life into his vision. I am looking forward to
returning to the Committee to discuss the details of the restructuring
at the appropriate time.
Like all nominees who come before this Committee, I was asked to
respond in writing to a number of thoughtful questions about why I am
attracted to this position, why I believe I am qualified to hold it,
and what I hope to accomplish if confirmed. I don't want to take time
now to reiterate what I said in that questionnaire. I do want to say,
however, that the events of 9-11 have altered DOT's agenda in
fundamental ways. The Aviation and Transportation Security Act is a
seminal piece of legislation--an act of which the Congress can be
immensely proud--and I can report that the Department began working
full-bore on its implementation even before it was signed by the
President.
The implications of that legislation go far beyond the
establishment of a new Transportation Security Administration, or the
many specific requirements that it contains. That act, the port
security legislation which is currently pending, and perhaps future
acts of Congress, leave no doubt that we have a fundamental obligation
to perform all of our jobs within the context of a new and more
security-conscious environment. What we need, I believe, is a new
culture within our transportation sector--one that treats security as
an essential element of the logistics process. We have the tools--
notably the technology--to make our system much tighter than it is
today, and we have no alternative other than to do so with all
available speed.
The Department of Transportation and the Congress have some big
problems to address during the next few years, during which we will
have to reauthorize all of our major transportation programs. But from
this point on we will have to take up those issues within the context
of a security challenge the dimensions of which we are only now
beginning to understand. It would be an immense privilege to be able to
work with you in that essential enterprise.
Let me conclude by saying again how honored I am that the President
has nominated me for this position. I thoroughly enjoyed working with
this Committee and its staff during my past tours in the Executive
Branch, and I very much hope that I will have the opportunity to do so
again. I hope that it will be possible, with the Senate's advice and
consent, to get to work very soon.
I would be pleased to respond to any questions you might have.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Jeffrey N. Shane (Nickname: Jeff).
2. Position to which nominated: Associate Deputy Secretary of
Transportation.
3. Date of nomination: October 10, 2001.
4. Address: (Information not released to the public.) Office: Hogan
& Hartson L.L.P., 555 Thirteenth Street, N.W., Washington, DC 20004-
1109.
5. Date and place of birth: March 27, 1941, New York, NY.
6. Marital status: Married to Dzing Jean Wu.
7. Names and ages of children: N/A.
8. Education: (High School): Hempstead H.S., Hempstead, NY (9/54-6/
57), West Hempstead H.S., West Hempstead, NY (9/57-6/58), High School
Diploma, June 1958; (College): Princeton University, Princeton, NJ,
A.B., June 1962; (Law School): Columbia Law School, New York, NY,
LL.B., June 1965.
9. Employment record: Turret lathe operator, Sylvania-Corning
Nuclear Corporation, Hicksville, NY, 6/59-9/59; Waiter, Frontier
Village, Lake George, NY, 6/60-9/60; Management trainee, New York
Telephone Company, Hempstead, NY, 6/61-9/61; Counselor, Camp Timber
Lake, Phoenicia, NY, 6/62-9/62; Investigator, Retail Credit Co., New
York, NY, 6/63-9/63; Summer Intern, Voice of America, Washington, DC,
6/64-9/64; Research Assistant, Columbia University, New York, NY, 9/65-
10/65; Legislative Analyst, Basic Systems, Inc., New York, NY, 3/66-9/
66; Trial Attorney, Federal Power Commission, Washington, DC, 6/66-4/
68; Trial Attorney and Special Assistant to the General Counsel, Dept.
of Transportation, Washington, DC, 4/68-10/72; Attorney and special
investigator, Dept. of Transportation, Washington, DC, 3/74-7/74;
Consultant, Environmental Law Institute, Washington, DC, 7/74-11/75;
Attorney, United Nations Development Programme, Bangkok, Thailand, 11/
75-1/78; Attorney and consultant (self-employed), Washington, DC, 1/78-
12/78; Project Director, Library of Congress, Washington, DC, 12/78-3/
79; Assistant General Counsel for International Law, Dept. of
Transportation, Washington, DC, 3/79-3/83 Deputy Assistant Secretary
for Policy and International Affairs, Dept. of Transportation,
Washington, DC, 3/83-3/85; Deputy Assistant Secretary for
Transportation Affairs, Dept. of State, Washington, DC, 3/85-6/89;
Adjunct Professor of Law, Georgetown University, Washington, DC, 1985-
89; Assistant Secretary for Policy and International Affairs, Dept. of
Transportation, Washington, DC, 6/89-1/93; Counsel, Wilmer, Cutler &
Pickering, Washington, DC, 4/93-12/96; Partner, Wilmer, Cutler &
Pickering, Washington, DC, 12/96-4/00; Partner, Hogan & Hartson L.L.P.,
Washington, DC, 4/00-present.
10. Government experience: Member, Architectural and Transportation
Barriers Compliance Board, 1989-93 (Vice-Chairman, 1992-93); Vice-
Chairman, Advisory Commission on Conferences in Ocean Shipping, 1992;
Member, Study Group of Experts on Future Regulatory Arrangements,
International Civil Aviation Organization, 1993-94.
11. Business relationships: Director, A. A. & S. Real Estate, Inc.
(family corporation established for estate planning purposes) Director,
Albert Shane, Inc. (family corporation established for estate planning
purposes).
12. Memberships: Member, D.C.; Bar Member, American Bar
Association; Chairman, Commission on Air Transport, International
Chamber of Commerce (Paris), 1994-present; Vice President, National
Defense Transportation Association, and Chairman, NDTA Military Airlift
Committee, 1994-present; Chair, American Bar Association Forum on Air
and Space Law, 2001-present; Member, International Aviation Club of
Washington (President, 1999-2000) Member, Aero Club of Washington;
Member, Board of Directors, International Institute of Air and Space
Law, Leiden University, Holland, 1993-95; Member, Wings Club, 1993-
present (Board of Governors, 1994-97); Member, Cosmos Club, 1987-
present; Member, Columbia Country Club, 2000-present.
13. Political affiliations and activities: (a) None. (b) None. (c)
Oberstar, James--via Friends of James Oberstar: 10/07/1997--500.00, 04/
21/1999--500.00, 09/14/1999--500.00, 02/09/2000--500.00; Allen,
George--via Friends of George Allen: 08/11/2000--1000.00; Lazio, Rick
A--via Lazio 2000 Inc: 09/30/2000--1000.00; Republican National
Committee-RNC: 11/01/2000--1000.00; Hogan & Hartson Political Action
Committee: 10/02/2000--950.00; Dole, Elizabeth--via Elizabeth Dole for
President Exploratory Committee Inc: 03/30/1999--1000.00; Bush, George
W--via Bush for President Inc: 06/30/1999--1000.00; Reid, Harry--via
Friends for Harry Reid: 12/28/1997--500.00; Hogan & Hartson Political
Action Committee: 04/23/2001--1100.00; McCain, John S--via McCain 2000
INC: 02/15/2000--1000.00.
14. Honors and awards: Full-tuition academic scholarship, Princeton
University (1958-62); New York State Regents' Scholarship, Columbia Law
School (1962-65); 1Presidential Meritorious Rank Award, Department of
State, 1988; Senior Executive Service Performance Award, Department of
State, 1987; Secretary's Medal for Meritorious Achievement, Department
of Transportation, 1971.
15. Published writings: ``Aviation Policy: Who Decides?'' LatinCEO,
June 2001; ``It is Time for Foreign Investors,'' Business Travel News,
October 1998; ``The Changing Nature of International Aviation,'' FTL
Memorandum M89-4, Flight Transportation Laboratory, Massachusetts
Institute of Technology, December 1989; ``Challenges in International
Civil Aviation Negotiations,'' U.S. Department of State, Bureau of
Public Affairs, Washington, D.C., February 1988; ``Getting to Yes in
International Aviation Negotiations: An Impossible Dream?'', ITA
Magazine No. 37, September 1986; ``Environmental Law in the Developing
Nations of Southeast Asia,'' in Colin MacAndrews and Chia Lin Sien,
eds., Developing Economies and the Environment: The Southeast Asian
Experience (to be published November 1978 by McGraw-Hill); ``Asian
Nations Focus on Environmental Law,'' Environmental Policy and Law,
Autumn 1978 (to be published November 1978); Statement on applicability
of National Environmental Policy Act to U.S. Government activities
abroad, presented to Subcommittee on Resource Protection, Senate
Committee on Environment and Public Works, September 1978;
``Environmental Law: Closing the Gap,'' Business in Thailand, August
1978; ``Coastal Management Legislation in Sri Lanka,'' report to the
Regional Office for Asia and the Pacific, U.N. Environment Program,
Bangkok, Thailand, February 1978. ``Environmental Law and Technical
Cooperation: Agenda for Asia and the Pacific,'' paper presented at
ESCAP/UNEP Expert Group Meeting on Environmental Protection
Legislation, December 1977, Bangkok, Thailand; ``Environmental Law in
Thailand,'' project working paper, U.N. Task Force on Human
Environment, November 1977; ``Legal Aspects of Environmental Protection
in Asia,'' paper presented at Fifth LAWASIA Conference, Seoul, Korea,
August 1977; ``Legal Aspects of Environmental Management in Malaysia,''
project working paper, U.N. Task Force on Human Environment, January
1977; ``The Use of Environmental Impact Statements in the United
States,'' background paper, U.N. Task Force on Human Environment,
September 1976; NEPA in Action: The Impact of the National
Environmental Policy Act on Federal Decision-Making, 1975, book-length
report to the U.S. Council on Environmental Quality, prepared in
association with the Environmental Law Institute, Washington, D.C.
(principal co-author, with Roan Conrad and Susan B. Pondfield);
``Enforcement of Water Pollution Controls in California and EPA Region
IX,'' 1975, a report to the U.S. National Commission on Water Quality,
prepared in association with the Environmental Law Institute,
Washington, D.C; ``Ecology in Transportation,'' I.C.C. Practitioners
Journal, Vol. 39, p. 808 (1972); ``Environmental Litigation in 1971,''
Highway Research Circular No. 135 (published by the Highway Research
Board of the National Research Council), May 1972; ``Marijuana Law,''
The New Republic, March 28, 1968; ``Draft Those Reservists?'' The New
Republic, September 17, 1966.
16. Speeches: Please see accompanying compilation.
17. Selection: (a) I believe it was felt that my 14 years of
experience at the Department of Transportation in a variety of legal
and policy positions, together with 4 years supervising our
international transportation negotiations at the Department of State
and 8 years of practicing transportation law in the private sector,
provided a suitable background for the position. (b) During my previous
government service I had the opportunity to work with most of the
Department of Transportation's modal administrations on a variety of
issues. As Assistant Secretary for Policy and International Affairs
(1989-93) I was involved at a senior level in the entire range of
policy issues for which DOT has responsibility, both domestic and
international. My time in the private sector, predictably, has enhanced
further my understanding of many of those issues. I believe that the
sum total of that experience will be invaluable in equipping me to
assist the Secretary of Transportation and the President in addressing
the important transportation policy challenges that face our country
today.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, business associations or business organizations if you
are confirmed by the Senate? Yes--with the single exception of two
family corporations of which I am an officer.
2. Do you have any plans, commitments or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, explain. No.
3. Do you have any plans, commitments or agreements after
completing government service to resume employment, affiliation or
practice with your previous employer, business firm, association or
organization? No.
4. Has anybody made a commitment to employ your services in any
capacity after you leave government service? No.
5. If confirmed, do you expect to serve out your full term or until
the next Presidential election, whichever is applicable? Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients or customers. Please refer to the Deputy General Counsel
opinion letter.
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated. Please refer to the
Deputy General Counsel opinion letter.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated? Please refer to the Deputy
General Counsel opinion letter.
4. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat or modification of any legislation or affecting the
administration and execution of law or public policy. I have long
believed, as a matter of personal conviction, that the United States
should liberalize restrictions in its laws that impede U.S. airlines'
access to the global capital market. I have made a great many speeches
expressing that view, have written articles to that effect, and I have,
on a few occasions, expressed that view in private conversations with
Members of Congress and congressional staff members. On a few
occasions, I expressed the same view on behalf of an aspiring foreign
investor in the U.S. airline industry who was my client.
In another assignment, I indirectly assisted in the preparation of
legislative language designed to tighten up U.S. law in connection with
the ``Fly America'' requirements as applied to foreign military sales
to Israel.
Finally, I communicated with agencies of the U.S. Government and
congressional offices in an effort to persuade the Agency for
International Development to use U.S. airlines for the emergency
shipment of foodstuffs to Honduras rather than employing a Russian
airline.
I have not mentioned a larger number of examples which I pursued on
clients' behalf in the context of administrative proceedings before the
Department of Transportation.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. (Please provide a copy of any trust or other agreements.) Please
refer to the Deputy General Counsel opinion letter. A copy of my ethics
agreement with DOT is enclosed.
6. Do you agree to have written opinions provided to the Committee
by the designated agency ethics officer of the agency to which you are
nominated and by the Office of Government Ethics concerning potential
conflicts of interest or any legal impediments to your serving in this
position? Yes.
D. LEGAL MATTERS
1. Have you ever been disciplined or cited for a breach of ethics
for unprofessional conduct by, or been the subject of a complaint to
any court, administrative agency, professional association,
disciplinary committee, or other professional group? If so, provide
details. The FBI reported to me in late September of this year that a
complaint was filed against me in February 1994 with the Public
Integrity Section, Criminal Division, Department of Justice, alleging
that, while still employed by the Department of Transportation, I
entered into negotiations regarding post-government employment with a
company doing business with the Department. The file was apparently
closed without action in October 1994. I was never interviewed with
respect to this complaint and was wholly unaware of it until the FBI
brought it to my attention last month during the course of my pre-
appointment background investigation. I have never been disciplined or
cited for any breach of ethics or unprofessional conduct by any
government agency or other entity.
2. Have you ever been investigated, arrested, charged or held by
any federal, state, or other law enforcement authority for violation of
any federal, state, county, or municipal law, regulation or ordinance,
other than a minor traffic offense? If so, provide details. See
previous answer regarding an apparent Justice Department investigation
in 1994. I have never been arrested, charged, or held by any federal,
state, or other law enforcement authority for violation of any federal,
state, county, or municipal law, regulation or ordinance, other than
minor traffic offenses.
3. Have you or any business of which you are or were an officer
ever been involved as a party in interest in an administrative agency
proceeding or civil litigation? If so, provide details? Since leaving
government in early 1993 I have been a partner in two major Washington
law firms. I sure that each has been involved from time to time as. a
party in interest in administrative agency proceedings and in civil
litigation. I have had no direct involvement in any such proceedings or
litigation.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination. None.
E. RELATIONSHIP WITH COMMITTEE
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information? I will
certainly do everything within my power to ensure that such deadlines
are routinely met.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? I will do everything within my
power to ensure that the Department of Transportation protects
congressional witnesses and whistle blowers from reprisal.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. Please explain how you will review regulations issued by your
department/agency, and work closely with Congress, to ensure that such
regulations comply with the spirit of the laws passed by Congress. As a
lawyer with a practice substantially devoted to regulatory issues, my
training and experience amply equip me to understand whether a proposed
regulation complies not only with the letter, but also with the spirit
of enabling or other relevant legislation. I am also fully aware of
Congress's interest in seeing laws implemented promptly. I know that
Secretary Mineta and Deputy Secretary Jackson are fully committed to
enhancing the Department's performance and to increasing the
Department's accountability in this regard. I wholly share that
commitment, and look forward to joining them in achieving this
important objective.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. The Department of
Transportation is charged with providing leadership in the development
and administration of policies and programs that ensure the
availability of safe, secure, efficient, coordinated, competitive,
cost-effective, and environmentally sound transportation services as a
critical ingredient in the economic health of our country. From the
Department's inception, safety has been its most important goal; it
remains so today, particularly in this time of extraordinary challenge
to the security of our transportation system. A second key objective is
the maintenance and expansion of the nation's transportation
infrastructure. Third, the Department must enhance mobility by ensuring
the availability of fully accessible, competitive, and affordable
transportation services to all of our citizens. Fourth, the Department
has important law enforcement responsibilities such as those of the
U.S. Coast Guard for interdicting attempted importation of illegal
drugs or other contraband and for preventing the pollution of our
waters. I have worked with each of the Department's modal
administration over the years in carrying out the Department's mission,
and I look forward enthusiastically to doing so again if I am
confirmed.
6. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
F. GENERAL QUALIFICATIONS AND VIEWS
1. How have your previous professional experience and education
qualified you for the position for which you have been nominated. I
have spent the major portion of my career in public service. Most of
that time was devoted to transportation policy issues at the federal
level. In my last federal government assignment--Assistant Secretary of
Transportation for Policy and International Affairs--I was the senior
advisor to the Secretary of Transportation on the full range of policy
issues for which the Secretary has responsibility.
2. Why do you wish to serve in the position for which you have been
nominated? I did not seek this opportunity. When it was first
presented, I felt some ambivalence, having already enjoyed so many
tours of duty in public service, and having found a home in a wonderful
law firm with a practice that, after 8 years, had hit its stride.
Following a lengthy deliberation, however, I concluded that, for
someone with my particular background and interests, it would be a
profound mistake to say no--to forgo the opportunity to spend at least
a few more years working to rebuild our nation's transportation
infrastructure, to address the congestion and gridlock that threaten to
impede our future economic growth, to help ensure the safety and
security of our transportation system, and to ensure the maintenance of
meaningful competition for the benefit of travelers and shippers of
goods, both domestically and internationally. The extraordinary quality
of DOT's current leadership--Secretary Norman Mineta and Deputy
Secretary Michael Jackson--was an essential factor in my decision to
pursue this position. That President Bush has chosen so qualified a
team of managers for the Department bodes very well for transportation
policy during this Administration.
The events of September 11, 2001, will alter DOT's agenda, at least
for a time, but they have only served to underscore my conviction that
this is clearly the right thing for me to do, if the Senate agrees.
3. What goals have you established for your first 2 years in this
position, if confirmed? My most immediate personal goal will be to work
closely with the Secretary, Deputy Secretary, and modal administrators
to refresh the Department's transportation policymaking capability;
Given the events of September 11, 2001 and their aftermath, an
essential goal must be the securing of our transportation system and
the restoration of public confidence in it. These attacks on our
country have taken the challenge to an entirely new level, and an
effective response will require an extraordinary commitment of
resources, both human and financial. Much has been accomplished by the
Department and the Administration in recent weeks in cooperation with
Congress, there is much more to be done; The nation's surface
transportation and aviation programs will shortly be up for
reauthorization. The Department's challenge will be to exploit these
opportunities for the 14 purpose of ensuring the availability of a
national transportation infrastructure that not merely accommodates,
but encourages the economic growth of our country; Closely tied with
the previous goal is a growing concern about the quality of competition
in our transportation system. DOT, in cooperation with the Department
of Justice, must find ways to enhance competition in our transportation
system. Any measures adopted for the enhancement of consumer welfare in
this regard, however, must be taken without compromising deregulation;
Unless immediate steps are taken to augment DOT's professional staff--
notably in the areas of transportation policy generally and aviation
policy in particular--the Department simply will not have the
wherewithal to carry out its mission. Accordingly, a major goal is to
encourage in any way I can an effective response to this problem.
Secretary Mineta has stated the same thing, and I strongly support his
views.
4. What skills do you believe you may be lacking which may be
necessary to successfully carry out this position? What steps can be
taken to obtain those skills? I believe my 18 years in a variety of
transportation policy positions equips me well for the responsibilities
I will assume if confirmed.
5. Who are the stakeholders in the work of this agency? The primary
stakeholders for DOT are, of course, the traveling and shipping public.
Other important stakeholders are the providers of transportation, both
direct and indirect, our transportation workforce, state and local
transportation agencies, and, of course, the Congress.
6. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 10. Given my
proposed role in helping to shape transportation policy at the federal
level, I believe it is essential that I maintain an open channel for
communications with all stakeholders. In my experience, a constant
challenge for federal policymakers is to remain closely in touch with
those likely to be affected by the federal government's decisions.
7. The Chief Financial Officers Act requires all government
departments and agencies to develop sound financial management
practices similar to those practiced in the private sector. (a) What do
you believe are your responsibilities, if confirmed, to ensure that
your agency has proper management and accounting controls? As a senior
manager at the Department of Transportation, I would be obligated to
ensure that the Department approaches its programs in an effective,
business-like way, wholly within available budgetary resources. I know
that Secretary Mineta is committed to improving the Department's
performance on this front, and I will support him in every way
possible. (b) What experience do you have in managing a large
organization? As Assistant Secretary of Transportation for Policy and
International Affairs, I managed a staff of 185-200. I supervised three
Deputy Assistant Secretaries and five office directors, and a greater
number of division chiefs. I held that position.for 4 years (1989-
1993), and served as a Deputy Assistant Secretary in the same office
for 2 years (1983-1985).
As Deputy Assistant Secretary of State for Transportation Affairs
(1985-1989) I supervised a staff of approximately 30.
8. The Government Performance and Results Act requires all
government departments and agencies to identify measurable performance
goals and to report to Congress on their success in achieving these
goals. (a) Please discuss what you believe to be the benefits of
identifying performance goals and reporting on your progress in
achieving those goals. The most important responsibility of any public
servant privileged to serve in a decisionmaking capacity is to help set
the public policy agenda. Unless there is a determined effort to
establish identifiable performance goals, the tendency to slip into a
passive mode of operation is almost irresistible. At this point in my
own career, joining a government agency provides the opportunity to
participate in the setting of the agenda and then to help ensure that
it is accomplished in real time. The responsibility to report to
Congress on the Department's success in achieving established goals
helps to ensure that the agenda isn't subordinated to merely
``answering the mail.'' (b) What steps should Congress consider taking
when an agency fails to achieve its performance goals? Should these
steps include the elimination, privatization, downsizing or
consolidation of departments and/or programs? Congress should attempt
to analyze the organic reasons for an agency's failure to achieve its
performance goals. In some cases, no doubt, ineffective management may
be the root cause, and improvements on the managerial front may be a
sufficient remedy. In other cases, it may well be that a Department
function would be carried out more effectively at a different level of
government or in the private sector. Still other programs may be found,
upon investigation, to have outlived their usefulness and be targets
for elimination. (c) What performance goals do you believe should be
applicable to your personal performance, if confirmed? My performance
should be measured against the goals I outlined in the answers to
Question 3. I will be particularly disappointed if, by the time this
tour of duty ends, DOT does not have a more effective policymaking
capability, and has not hired new staff 16 capable of carrying the
Department's mission forward following the anticipated retirement of
large numbers of professionals in the next few years. Similarly, the
quality of the Department's contribution to the process of
reauthorizing the federal aviation and federal highway programs should
be seen, I think, as another performance indicator for the position I
hope to assume. Finally, I hope it will be possible to look back on
important improvements and the quality of competition found in our
domestic airline industry.
9. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you? I believe that the
first duty of a manager is to empower employees and to create the most
interesting and engaging work environment possible. To be productive,
the supervisor-employee relationship must be characterized by mutual
respect and collegiality. Given the extraordinary quality of the
Department's career professionals, it will not be difficult to adhere
to this model. No employee complaints have been brought against me.
10. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe. In a number of my past positions in
the federal government, I have been called upon to meet with and
testify before Members of Congress on a regular basis. The opportunity
to exchange views with Members of Congress and staff on key issues has
been one of the great privileges in these positions. I am looking
forward to further opportunities to engage the Congress.
11. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency. The Inspector General is charged with looking at the
Department's activities with a more detached, independent, and
objective view than those of us ``on the line'' are likely to have. For
that reason, the IG is often in a position to offer essential insights
and constructive criticism of the Department's activities. I have
always tried, in past positions at the Department, to engage the
Inspector General in a spirit of cooperation, with communications
predicated on mutual integrity, respect, and a shared commitment to
problem solving. I would expect to maintain this approach if confirmed.
I know that Secretary Mineta and Deputy Secretary Jackson will insist
that the Department bring this spirit to all interactions with the
Inspector General.
12. Please explain how you will work with this Committee and other
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress. As a
lawyer with a practice substantially devoted to regulatory issues, my
training and experience amply equip me to understand whether a proposed
regulation complies not only with the letter, but also with the spirit
of enabling or other relevant legislation. I will make myself readily
available to the Committee and its staff to address concerns relating
to regulations issued by the Department of Transportation.
13. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. Congress and the Administration are already
addressing the most important near-term priority: the establishment of
much tighter security measures for our transportation system, with a
particular focus on aviation.
The most important long-term priority for Congress in the
transportation policy arena will be the reauthorization of our
transportation infrastructure programs. There is an even greater danger
now, given the current downturn in economic activity--and the
consequent reduction in demand for transportation--that we will be
misled into believing that our infrastructure is adequate. It would be
a huge public policy mistake not to take steps now to ensure that our
transportation system is fully capable of supporting a more robust
level of economic activity.
14. Within your area of control, will you pledge to develop and
implement a system that allocates discretionary spending based on
national priorities determined in an open fashion on a set of
established criteria? If not, please state why. If yes, please state
what steps you intend to take and a timeframe for their implementation.
I wholly agree that discretionary spending must be predicated on a
clearly articulated set of policy objectives and that decisions must be
made pursuant to transparent criteria. I will have to acquaint myself
with the extent to which this principle already characterizes DOT
spending programs. If not, I look forward to an early project to
address this issue more effectively.
Senator Breaux. Mr. Shane, thank you very much for that
statement.
Mr. Frankel, we are pleased to have your statement now.
STATEMENT OF MR. EMIL FRANKEL, NOMINEE TO BE
ASSISTANT SECRETARY FOR TRANSPORTATION POLICY AT THE DEPARTMENT
OF TRANSPORTATION
Mr. Frankel. Than you, Mr. Chairman. I, too, would request
that my written statement be included in the record, and I will
just excerpt from it, and although they are not here any
longer, I really want to also express for the record my
profound thanks and appreciation to my two Senators and my two
long-time friends who are Representatives, Congressman Petri
and Congressman Shays.
It is a great privilege to be here before you, and I
appreciate particularly your willingness to consider my
nomination with so many other urgent and critical legislative
matters before the Congress. Needless to say, I am humbled and
honored to be nominated by President Bush for the position of
Assistant Secretary for Transportation Policy, and I appreciate
the opportunity that Secretary Mineta and Deputy Secretary
Jackson have extended to me to assist them and the great team
that Secretary Mineta has assembled in shaping national
transportation policy at this time.
As you have already heard, I spent 4 years running or
leading a multimodal state transportation agency, but I think
importantly as state Transportation Commissioner I never forgot
that the agency I led was providing some service to every
resident and every business in the state every day, and that
what we did affected people's daily lives and their work, and I
think that speaks to the transportation field generally, and
certainly to the United States Department of Transportation.
I believe strongly in the need to continue moving toward a
transportation system that operates seamlessly and one which
provides for greater coordination between freight and passenger
modes. I know that is something to which you are committed
personally, and the leaders in the Congress, and certainly
Secretary Mineta, are equally committed to. As a result of the
experience I have had at the state and local levels, I believe
that I can bring an important and relevant perspective to the
development of policy at the federal level, and I hope that I
can contribute to the goal of a Department of Transportation
that speaks with one voice across all modes.
I have remained deeply involved in the transportation field
since I left state service in 1995, and therefore am looking
forward certainly to becoming reengaged now at the federal
level. The events of September 11 have underscored, I think,
the pivotal role that transportation plays in the nation's
prosperity and quality of life. Our obligation now is to
enhance the safety and the security of our transportation
system in every way possible. At the same time, we must ensure
that the nation's transportation system emerges from this
transformation, this crisis, even stronger and more efficient
than before.
We need to focus, even as we are focusing on issues of
airport security and maritime security, and the surface
transportation field, that we also have to focus again on
critical transportation issues which perhaps have somewhat
receded from public attention in the past 3 months. Secretary
Mineta has often said that nothing has as great an impact on
economic development patterns of growth and quality of life as
transportation. We face an urgent need together to ease
congestion of all modes of transportation, and to improve the
connections between modes for people and goods. That is, to
focus on issues of efficiency and reliability, even as we are
giving renewed and even more urgent attention to questions of
safety and security.
In the next 2 years, Congress will be taking up
reauthorization of the Department's surface transportation and
air programs, as well as other critical bills affecting
virtually every mode of transportation, and I look forward to
supporting the President and the Secretary and to working with
this Committee and other Members of Congress in addressing
these vital tasks.
In the years since I first assumed an executive position in
the transportation field, I have developed a passion for this
field, a passion that I am certain you share. I think that we
all recognize that the ultimate stakeholders in the
transportation system are the citizens and businesses of
America who rely on the transportation sector to move people
and goods safely and efficiently. If confirmed, I pledge all of
my energy and efforts toward meeting the critical challenges
which we now face in restoring and restrengthening the nation's
transportation system, and I look forward to working with you
and your colleagues in improving and protecting our nation's
transportation system.
I know we look forward, both of us now, to responding to
any of your questions.
[The prepared statement and biographical information of Mr.
Frankel follow:]
Prepared Statement of Emil H. Frankel, Assistant Secretary for
Transportation Policy-Designate, Department of Transportation
Thank you, Mr. Chairman and members of the Committee.
It is a great privilege to appear before the Committee today. I
appreciate the Committee's willingness to consider my nomination in the
midst of so many urgent and critical legislative matters.
I am honored to be President Bush's nominee for Assistant Secretary
for Transportation Policy of the Department of Transportation. I
appreciate the opportunity, which Secretary Mineta has extended to me,
to assist him in shaping national transportation policy at this
critical time.
For over ten years I have been deeply involved in the
transportation field. For four years I led a state transportation
agency, as Commissioner of Transportation of Connecticut. In that
capacity I led a consolidated multi-modal transportation agency, making
policy and implementing programs for all elements of the state's
transportation system--for the construction, maintenance and management
of highways, bridges and arterial roads, for commuter rail and bus
services, and for commercial and general aviation airports and
seaports.
As state transportation commissioner, I never forgot that the
agency I led was providing some service to every resident and business
of the state every day and that what we did affected people's daily
lives and their work. I believe strongly in the need to continue moving
towards a transportation system that operates seamlessly, and one which
provides for greater coordination between freight and passenger modes.
As a result of my experience at the state and local levels, I
believe that I can bring an important and relevant perspective to the
development of policy at the federal level, and I hope that I can
contribute to the goal of a Department of Transportation that speaks
with one voice, across all modes.
Since leaving state government, I have remained deeply engaged in
these issues--as a professional, providing legal and consulting advice
to public agencies and private organizations engaged in transportation
services and infrastructure development, and as a teacher of
transportation policy and public management at the undergraduate and
graduate school levels.
The events of September 11 have underscored the pivotal role
transportation plays in the nation's prosperity and quality of life.
Our obligation now is to enhance the safety and security of our
transportation system in every way possible. At the same time, we must
insure that America's transportation system emerges from this
transformation even stronger and more efficient than before. Actions
that the Secretary, the Administration, and Congress have taken in the
last few weeks demonstrate that DOT's mission must include protecting
against vulnerability in the transportation system and seeking to
assure the security of every transportation customer.
At the same time we must continue to focus on critical
transportation issues, which have, perhaps, somewhat receded from
public attention in the past three months. Secretary Mineta has often
said that nothing has as great an impact on economic development,
patterns of growth and quality of life as transportation. We face an
urgent need to ease congestion in all modes of transportation and to
improve the connections between modes for people and goods. Our
challenge will be to balance security and safety with efficiency and
reliability. I am certain that, under Secretary Mineta's leadership,
those goals will inform my work, as Assistant Secretary for
Transportation Policy, if I am confirmed.
In the next two years Congress will take up DOT's surface and air
program reauthorizations, as well as other critical bills affecting
virtually all modes of transportation. I look forward to supporting
President Bush and Secretary Mineta and to working with Members of
Congress, in addressing these vital tasks and in helping to analyze and
shape these policies.
In the years since I first assumed an executive position in the
transportation field I have developed a passion for this field--a
passion I am certain that many of you share. I think that we all
recognize that the ultimate stakeholders in transportation are the
citizens and businesses of America, who rely on the transportation
sector to move people and goods safely and efficiently. If confirmed, I
pledge my energy and commitment to meeting the critical challenges
facing the nation's transportation system. I look forward to working
with you in improving and protecting our nation's transportation
system.
Thank you for the opportunity to appear before you today, as you
consider my nomination to be Assistant Secretary of Transportation for
Transportation Policy. I would be pleased to respond to any questions
you may have.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Emil Hiram Frankel.
2. Position to which nominated: Assistant Secretary for
Transportation Policy, United States Department of Transportation.
3. Date of nomination: September 14, 2001.
4. Address: (Information not released to the public.) Office: Day,
Berry & Howard LLP, One Canterbury Green Stamford, CT 06901.
5. Date and place of birth: May 9, 1940, Bridgeport, CT.
6. Marital status: Married to Kathryn Frankel (maiden name:
Fletcher), November 24, 1968, in Washington, D.C.
7. Names and ages of children: None.
8. Education: Harvard Law School, Cambridge, MA, 1962-1965--LL.B.,
May 1965; Manchester University, Manchester, United Kingdom, 1961-
1962--Fulbright Scholar, no degree; Wesleyan University, Middletown,
CT, 1957-1961--B.A., May 1961; Andrew Warde High School, Fairfield, CT,
1956-1957--high school diploma, June 1957; Roger Ludlow High School,
Fairfield, CT, 1953-1956--no degree/diploma.
9. Employment record: Of Counsel, Day, Berry & Howard LLP,
Stamford, CT, 1995-Present; Fellow (part-time faculty), Schools of
Forestry and Environmental Studies and of Management, Yale University,
New Haven, CT, 1995-Present; Adjunct Professor, School of Civil and
Environmental Engineering, University of Connecticut, Storrs, CT, 2000;
Fellow, John F. Kennedy School of Government, Harvard University,
Cambridge, MA, 1995; Commissioner, Department of Transportation, State
of Connecticut, Newington, CT, 1991-1995; President, E.H. Frankel
Company, Inc., Bridgeport, CT, 1989-1991; Of Counsel, Cohen & Wolf,
P.C., Bridgeport, CT, 1989-1991; Vice President, The Palmieri Company
(formerly Victor Palmieri and Company Incorporated), Washington, DC,
and Los Angeles, CA, 1985-1988; Partner, Cohen & Wolf, P. C., Stamford
and Bridgeport, CT, 1982-1985; Division Vice President, Victor Palmieri
and Company Incorporated, New York, NY, Greenwich, CT, and Washington,
DC, 1975-1982; Visiting Lecturer, Yale University, New Haven, CT, 1972
and 1973; Associate, Wofsey, Rosen, Kweskin & Kuriansky, Stamford, CT,
1971-1975; Special Assistant to the Under Secretary, United States
Department of Housing and Urban Development, Washington, DC, 1970-1971;
Legislative Assistant to United States Senator Jacob K. Javits (New
York), Washington, DC, 1967-1970; Special Assistant to the Chairman,
Connecticut Republican State Committee, Hartford, CT, 1966; Associate,
Day, Berry & Howard, Hartford, CT, 1965-1966; Assistant Counsel,
Connecticut Constitutional Convention, Hartford, CT, 1965.
10. Government experience: Selectman, Town of Weston, CT, 1999-
Present; Member, Board of Finance, Town of Weston, CT, 1989-1999
(Chairman for five years); Member, Conservation Commission, Town of
Weston, CT, 1970s; Member, Charter Revision Commission, Town of Weston,
CT, 1970s; Member, Governor's Council on Economic Competitiveness and
Technology (Connecticut); Member, Public Infrastructure Subcouncil,
United States Competitiveness Policy Council; Member, President Bush's
Transition Team at the United States Department of Housing and Urban
Development, 1988; Member, President Reagan's Transition Team at the
United States Department of Housing and Urban Development, 1980;
Member, Governor Meskill's Task Force on Housing (Connecticut), 1970s.
11. Business relationships: Trustee, Wesleyan University,
Middletown, CT, 1981-1984 and 1985-1997 Trustee Emeritus, Wesleyan
University, Middletown, CT, 1997-Present; See positions held (as
officer, director, and/or trustee) of various non-profit organizations,
as described in the answer to Question 12, below; Between 1995 and the
present I provided consulting services to the following corporations,
business organizations, and/or public agencies, all of which entities
were clients of Day, Berry & Howard LLP, the law firm with which I have
been associated since 1995: New York City Partnership and Chamber of
Commerce; AMTRAK; Joint Program Office of the United States Department
of Transportation (as a subcontractor of Parsons Brinckerhoff);
Delaware Department of Transportation; Massachusetts Port Authority;
Massachusetts Turnpike Authority and Massachusetts Highway Department
(as a subcontractor of Commonwealth Capital Partners, Inc.);
Massachusetts Bay Transportation Authority (as a subcontractor of
Hamilton, Rabinowitz & Alschuler, Inc.); Connecticut Department of
Transportation (as a subcontractor to Cambridge Systematics, Inc.);
Connecticut Department of Economic and Community Development (as a
subcontractor to Frasca & Associates); Williams Communications, Inc.
(client of Day, Berry & Howard LLP); and Rock Acquisition LP (client of
Day, Berry & Howard LLP). All of these consulting relationships have
been terminated with the exception of the project for the Connecticut
Department of Transportation (as a subcontractor of Cambridge
Systematics, Inc.), and representation of Rock Acquisition, L.P., which
work is on-going.
12. Memberships: Admitted to Connecticut Bar, 1965; Member,
Connecticut Bar Association; Member, Stamford, CT, Regional Bar
Association; Member, Congregation B'Nai Israel, Bridgeport, CT; Member,
Weston, CT, Kiwanis Club and Director, Weston Kiwanis Foundation, Inc.;
Director and former President, Intelligent Transportation Society of
America, Connecticut Chapter; Director, Regional Plan Association
(RPA), New York, NY, and Member of RPA's Connecticut Committee;
Trustee, Connecticut Trust for Historic Preservation; Advisor, National
Trust for Historic Preservation; Director, Surface Transportation
Policy Project; Trustee, Merritt Parkway Conservancy (a charitable
trust), and President and Director of Merritt Parkway Conservancy,
Inc., a Connecticut non-profit corporation.
13. Political affiliations and activities: (a)Selectman, Town of
Weston, CT, 1999-Present; Member, Board of Finance, Town of Weston, CT,
1989-1999 (Chairman for five years); Member, Connecticut State
Republican Committee, 1979-1985. (b) Member, Weston, CT, Republican
Town Committee, 2000-Present. (c) Christopher Shays for Congress
Committee: $100.00 (September, 1994), $135.00(September and October,
1996), $150.00 (May, 1997), $250.00 (June and September, 1998), $350.00
(May and October, 2000); Weston Connecticut Republican Town Committee:
$225.00 (September, 1991), $25.00 (March, 1992), $5000 (August, 1995),
$105.00 (September and October, 1996), $100.00(September, 1997),
$500.00 (July and November, 1999); Connecticut Republicans:
$150.00(May, 1996), $150.00 (March, 1997), $150.00 (May, 1998),
$250.00(March and April 1999), $200.00(May, 2000), $200.00 (April,
2001); Weld for Senate: $600.00(May and October, 1996); Bayley Senate
1998: $500.00(March, 1998); Friends of John Rowland: $500.00(December,
1997), $250.00(May, 1998), $500.00 (June, 2001); Republican Women's
WISH List: $50.00(May, 1993), $100.00(March, 1999), $400.00.(March and
May, 2000); Nielson Congress 1998: $100.00 (August, 1998), $75.00
(February, 1998); Nielson for Congress: $350.00 (August and September,
2000); Gov. George Bush Presidential Exploratory Committee: $500.00
(June, 1999); Victory 2000 for Connecticut: $500.00(June, 2000).
14. Honors and awards: Honor Award, Conference Planning Committee
for the Preserving the Historic Road in America; Management Fellow,
School of Management, and Senior Fellow, School of Forestry and
Environmental Studies, Yale University, New Haven, CT; Joint Fellow,
Center for Business and Government and the Taubman Center for State and
Local Government, John F. Kennedy School of Government, Harvard
University, Cambridge, MA; Fulbright Scholar, United Kingdom; William
Day Leonard Award, Wesleyan University, Middletown, CT.
15. Published writings: See attached.
16. Speeches: During the past five years I have frequently spoken
to transportation groups and/or moderated panels before transportation
organizations. These appearances have largely occurred in Connecticut
or in other parts of the metropolitan New York City region. My remarks
have been delivered from notes, and I have not prepared formal speeches
for these occasions.
17. Selection: (a) Do you know why you were chosen for this
nomination by the President? I assume that I was nominated for the
position of Assistant Secretary for Transportation Policy because of my
experience and record, as Commissioner of the Connecticut Department of
Transportation, my involvement in, and leadership of, various national
and regional organizations engaged in transportation issues (such as
the American Association of State Highway and Transportation Officials
and the I-95 Corridor Coalition), my continuing work in the
transportation field, since I left my position in state government, as
a teacher of transportation policy and public management at the college
and graduate school levels, and my ability to reach out to the wide
variety of stakeholder groups, related to the transportation sector, in
all my positions over the last several years. (b) What do you believe
in your background or employment experience affirmatively qualifies you
for this particular appointment? I have been deeply involved in
transportation policy issues for more than ten years, as a public
official (Commissioner of the Connecticut Department of Transportation
from 1991 to 1995), as a professional, providing legal and consulting
advice to public agencies and private organizations engaged in
transportation services and infrastructure development, and as a
teacher of transportation policy and public management at the college
and graduate school levels.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, business associations or business organizations if you
are confirmed by the Senate? Yes.
2. Do you have any plans, commitments or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, explain. No.
3. Do you have any plans, commitments or agreements after
completing government service to resume employment, affiliation or
practice with your previous employer, business firm, association or
organization? No.
4. Has anybody made a commitment to employ your services in any
capacity after you leave government service? No.
5. If confirmed, do you expect to serve out your full term or until
the next Presidential election, whichever is applicable? Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients or customers. Please refer to the opinion letter of the Acting
General Counsel.
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated. Please refer to the
opinion letter of the Acting General Counsel.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated? Commissioner of the
Connecticut Department of Transportation (ConnDOT) from February 1991
to January 1995--Except for consulting assignments for ConnDOT, no
continuing relationships with this public agency. Consulting services
were provided to the following clients through Day, Berry & Howard LLP
between 1995 and Present: AMTRAK; Joint Program Office of the United
States Department of Transportation, as a subcontractor to Parsons
Brinckerhoff; Delaware Department of Transportation; Massachusetts Port
Authority; Massachusetts Turnpike Authority; Massachusetts Highway
Department; Massachusetts Bay Transportation Authority, as a
subcontractor to Hamilton, Rabinowitz & Alschuler, Inc.; and ConnDOT,
as a subcontractor to Cambridge Systematics, Inc. (CSI). As of this
date, all of these professional assignments had been completed with the
exception of the work for ConnDOT through CSI, which consulting
assignment is on-going.
4. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat or modification of any legislation or affecting the
administration and execution of law or public policy. During my tenure
as Commissioner of the Connecticut Department of Transportation
(ConnDOT) I frequently appeared before the Connecticut General Assembly
with regard to legislation and public policies, pursuant to my official
responsibilities. During that time I also spoke with Members of
Congress (particularly members of the Connecticut Congressional
Delegation) regarding consideration and enactment of the Intermodal
Surface Transportation Efficiency Act (ISTEA) and other matters of
federal legislation, regulation, and public policies which related to
my official duties as Commissioner of ConnDOT.
Since 1995 I testified, as a private citizen and not on behalf of a
client, before a committee of the Connecticut General Assembly,
regarding transportation financing and the establishment of a
Transportation Strategy Board for Connecticut. I have represented legal
clients of Day, Berry & Howard LLP before, and in meetings with,
ConnDOT, regarding various right-of-way and condemnation issues. As a
consultant to the New York City Partnership and Chamber of Commerce, I
was involved in developing strategies for, and providing advice
regarding, the reauthorization of the federal surface transportation
legislation in 1996 and 1997. In 1998 DBH provided lobbying services to
SPX Corporation before the Connecticut General Assembly, regarding
then-pending bills. For the purpose of that proposed legislation, I
registered as a lobbyist with the Connecticut Ethics Commission. I am
not currently registered as a lobbyist and have provided no other
lobbying services on behalf of DBH clients from 1995 to the present.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. (Please provide a copy of any trust or other agreements.) Please
refer to the opinion letter of the Acting General Counsel.
6. Do you agree to have written opinions provided to the Committee
by the designated agency ethics officer of the agency to which you are
nominated and by the Office of Government Ethics concerning potential
conflicts of interest or any legal impediments to your serving in this
position? Yes.
D. LEGAL MATTERS
1. Have you ever been disciplined or cited for a breach of ethics
for unprofessional conduct by, or been the subject of a compliant to
any court, administrative agency, professional association,
disciplinary committee, or other professional group? If so, provide
details. No.
2. Have you ever been investigated, arrested, charged or held by
any federal, state, or other law enforcement authority for violation of
any federal, state, county, or municipal law, regulation or ordinance,
other than a minor traffic offense? If so, provide details. No.
3. Have you or any business of which you are or were an officer
ever been involved as a party in interest in an administrative agency
proceeding or civil litigation? If so, provide details? No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination. None.
E. RELATIONSHIP WITH COMMITTEE
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information? Yes, to the
best of my ability.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes, to the best of my ability.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes, to
the best of my ability.
4. Please explain how you will review regulations issued by your
department/agency, and work closely with Congress, to ensure that such
regulations comply with the spirit of the laws passed by Congress. To
the degree the position of Assistant Secretary for Transportation
Policy is involved in the review of regulations issued by the
Department, I will work with the Secretary, the Deputy Secretary, the
General Counsel, and all of the modal administrations to insure that
regulations meet the statutory intent of legislation enacted by
Congress. Within the limits of the Administrative Procedure Act and
consistent with my responsibilities and authority, as Assistant
Secretary for Transportation Policy, I will exert my best efforts to
keep Congress informed about the timetable and substance of proposed
regulations. Moreover, Secretary Mineta has stated his commitment to
making the rulemaking process more accountable and efficient, an
important objective of Members of Congress. I will work closely with
the Secretary, the Deputy Secretary, and my colleagues at the
Department of Transportation to achieve this important goal.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. The Department of
Transportation's mission is to support safe and efficient
transportation. The Department's core activities include direct
assistance, as provided by law, regulatory oversight and enforcement,
operational safety services, public education, and research.
The Department of Transportation's current Strategic Plan describes
five objectives for the Department for the years 2000 to 2005: First,
the Department will promote health and safety by reducing
transportation-related injuries and deaths; second, the Department will
improve mobility by delivering an accessible, affordable and reliable
transportation system for people and goods; third, the Department will
support economic growth; fourth, the Department will seek to enhance
the human and natural environment; and, fifth, the Department will
insure the security of the nation's transportation system.
While supporting these strategic objectives, if confirmed, I will
work with Secretary Mineta, Deputy Secretary Jackson, and my colleagues
in the modal administrations at the Department of Transportation to
review these goals, to revise and enhance them, to the degree
appropriate in light of changing circumstances, and to manage those
operations and programs of the Department for which I might become
responsible in support of these objectives.
6. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
F. GENERAL QUALIFICATIONS AND VIEWS
1. How have your previous professional experience and education
qualifies you for the position for which you have been nominated. For
more than ten years I have been deeply involved in transportation
issues. This period includes my tenure, as Commissioner of the
Connecticut Department of Transportation (ConnDOT) from 1991 to 1995,
and, in the years since I left my state position, as a professional,
providing consulting and legal services to a range of transportation-
related agencies and private organizations, as a frequent speaker,
panelist, and moderator on transportation issues, as a teacher of
transportation policy and public management at Yale University and the
University of Connecticut, and as a writer on transportation issues and
the interface between transportation and economic development,
environmental quality, and community renewal.
Connecticut is a heavily urbanized state, and ConnDOT is
responsible for virtually all of the transportation services provided
to the state's residents and businesses. As the chief executive officer
of this consolidated agency, I was responsible for an annual budget of
over $1 billion and for the construction, rehabilitation, maintenance
and management of a multi-modal transportation systems, including
highways, bridges and arterial roads, bus and commuter rail services,
and airports. My consulting services have included advice on almost all
elements of the transportation system--public transit, airports,
highways, intelligent transportation systems (ITS), transportation
management, and institutional reform.
Thus, I believe that the range of my engagement in transportation
issues qualifies me for the position of Assistant Secretary for
Transportation Policy.
2. Why do you wish to serve in the position for which you have been
nominated? Since first assuming a role in the transportation sector
over ten years ago, I have developed a passion for this field, a
passion which grows out of an understanding of the effect which
mobility and accessibility have on every aspect of our lives.
Transportation plays a key role in the economy, in the environment, and
in community life. With the leadership of the President and of
Secretary Mineta I welcome the opportunity to contribute to the shaping
of transportation policy at this time and to play a role in the
development of transportation policy.
3. What goals have you established for your first two years in this
position, if confirmed? Secretary Mineta has pointed out that nothing
has as great an impact on economic development, patterns of growth, and
quality of life as transportation. The mission of the Department of
Transportation emphasizes safety and enhanced mobility. We face an
urgent need to ease congestion in all modes of transportation and to
improve the connections between modes both for people and for goods. In
the next two years Congress will be considering reauthorization of the
surface transportation legislation (TEA-21). I am confident that the
Executive and Legislative branches will work together to build on the
foundations of ISTEA and TEA-21 to assure adequate capital investment
in our transportation system and to enhance the management of the
existing system through technological innovation and institutional
reform.
Engagement in these issues and participation in their solution are
the key goals that I have established for my first two years, as
Assistant Secretary for Transportation Policy, if confirmed.
4. What skills do you believe you may be lacking which may be
necessary to successfully carry out this position? What steps can be
taken to obtain those skills? My management experience in the
transportation field has largely been at the local, state and regional
levels. Although I have extensive knowledge of national transportation
issues, I have not had direct or continuing engagement in the
management of such issues. It will be necessary that I develop the
information and expert knowledge that I will need to contribute to the
management and resolution of such national transportation issues and
the experience to work constructively with Members of Congress in the
consideration and implementation of transportation and transportation-
related legislation.
5. Who are the stakeholders in the work of this agency? The
ultimate stakeholders in the work of the Department of Transportation
are the people and the businesses of America who rely on the nation's
transportation system to move people and goods efficiently and safely.
Public agency stakeholders are the Congress, state and local
governments, regional and metropolitan area public authorities, and
other transportation facility governing/managing agencies. In the
private sector stakeholders include the workers and the companies (and
the associations which represent them) who build, maintain and operate
the nation's transportation system and facilities. Finally,
stakeholders include all those who are engaged in, and concerned about,
the impact of the nation's transportation system on economic growth and
international competitiveness, community renewal, public health and
quality of life, energy utilization, and technological innovation.
6. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question number five?
Secretary Mineta has emphasized accessibility and accountability, as
essential values of the Department of Transportation. Consistent with
that commitment, I would listen to, and work with, the Department's
various stakeholders, in the development and implementation of the
agency's policies and in carrying out the responsibilities of the
position to which I have been nominated, if confirmed.
7. The Chief Financial Officers Act requires all government
departments and agencies to develop sound financial management
practices similar to those practiced in the private sector. (a) What do
you believe are your responsibilities, if confirmed, to ensure that
your agency has proper management and accounting controls? The
Department of Transportation has a centralized budgetary office, led by
the Assistant Secretary for Budget and Programs, who essentially serves
as the Department's Chief Financial Officer. While the Assistant
Secretary for Transportation Policy is not directly responsible for the
operational management of the Department's major programs, to the
extent appropriate to the responsibilities of this position, at the
direction of the Secretary and Deputy Secretary, I would work closely
with the Assistant Secretary for Budget and Programs, the Department's
Inspector General, and my senior colleagues at the Department, to
assure the effective implementation of all Department programs. (b)
What experience do you have in managing a large organization? As noted
above, from 1991 to 1995 I served as the chief executive, officer of
the Connecticut Department of Transportation (ConnDOT), a consolidated,
multi-modal transportation agency with over 4,000 employees and an
annual budget of over $1 billion. Prior to my service at ConnDOT, for
approximately ten years I served as a senior executive of The Palmieri
Company (formerly; Victor Palmieri and Company), a nationally-known
business reorganization firm. In my capacity as a Palmieri Company
executive, I was responsible for the management and reorganization of
large and complicated real estate assets and real estaterelated
companies.
8. The Government Performance and Results Act requires all
government departments and agencies to identify measurable performance
goals and to report to Congress on their success in achieving these
goals. (a) Please discuss what you believe to be the benefits of
identifying performance goals and reporting on your progress in
achieving those goals. I support the Government Performance and Results
Act. This legislation required the Department to establish measurable
program targets, and it has helped the Department achieve a coherent
vision. In my own experience as an executive in the public and private
sectors, I have established goals for myself and for those under my
supervision and have measured performance against those goals, as
critical elements in improving operations. I would anticipate that I
would use this experience in carrying out my management
responsibilities at the Department of Transportation, if confirmed. (b)
What steps should Congress consider taking when an agency fails to
achieve its performance goals? Should these steps include the
elimination, privatization, downsizing or consolidation of departments
and/or programs? The Congress has a right to expect the Department to
meet its performance objectives. If it fails to do so, there should be
an examination of the reasons for this failure. While managers should
be empowered and enabled to carry out programs and should be encouraged
to introduce innovations in program administration and implementation,
poor performance must have consequences. These might include the
elimination, privatization, downsizing or consolidating of departments
and/or programs. (c) What performance goals do you believe should be
applicable to your personal performance, if confirmed? If confirmed, I
would be committed to the Department's strategic goals, and I would
anticipate that I would be personally engaged in managing the Office of
Transportation Policy to assure its performance to those objectives. I
would be responsive to direction from the Secretary in establishing
priorities.
9. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you? My management style
might be described as ``consensual,'' that is, I consult broadly with
my colleagues, empower employees, and then make decisions, based on the
information and opinions provided to me. Information is a critical
element of my management style: I insist on being informed of all
important programmatic and operational issues, and I believe in
intervening in a matter before it has become a crisis, if possible.
Once decisions have been made, I believe in delegating implementation
to subordinates, but I expect to be kept informed of progress, and I
hold employees accountable for their performance.
When I served as the chief executive officer of the Connecticut
Department of Transportation (ConnDOT), I typically managed by
``walking around'': I visited every highway maintenance facility and
every branch office of ConnDOT, and frequently toured the headquarters
building. I sought to meet with all ConnDOT employees on a regular
basis, and during these meetings, I asked for their opinions and
suggestions, and answered their questions about our policies, programs,
and strategic goals.
I am not aware of any employee complaints brought against me in any
of my executive positions, in either the public or the private sectors.
10. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe. If confirmed to the position to
which I have been nominated, I would anticipate working closely with
all Members of Congress. Outside of an appearance before a
Congressional Committee, in my official capacity as Commissioner of the
Connecticut Department of Transportation (ConnDOT), in order to testify
about implementation of ISTEA, and frequent consultations with members
of the Connecticut Congressional Delegation about matters of federal
transportation policy and programs during my tenure at ConnDOT, I have
not had an extensive working relationship with the Congress. However,
as Commissioner of ConnDOT, I appeared frequently before, and worked
closely with, members of the Connecticut General Assembly. I am very
accustomed to establishing close and cooperative working relationships
with legislators, and I would expect to work in a similar way with
Members of Congress. Certainly, it would be an important priority for
me to work closely with Members of Congress and their staffs on a bi-
partisan basis and to support the work of Congressional committees on
all matters and issues that come before me in the position to which I
have been nominated.
11. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency. The Inspector General is a critically important
position at the Department of Transportation and provides statutorily
protected independence in evaluating effectiveness and integrity in
implementation of the Department's programs. I would anticipate a
respectful and candid working relationship with the Inspector General,
and I believe that my own performance, as an executive of the
Department, can and will benefit from the analyses, reports and
opinions of the Department's Inspector General.
12. Please explain how you will work with this Committee and other
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress. It is the
responsibility of the Department of Transportation to administer and
implement the duly enacted laws of the United States in a manner
consistent with their language and intent. Continuing consultation with
Congress and with relevant stakeholders can be critically important to
insuring that the regulations promulgated by the Department are
consistent with the laws passed by Congress, and broad public
participation in the Department's rulemaking activity is also vital to
this process.
13. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. Safety and congestion are the critical needs
facing the nation's transportation system, and it is likely that
Congress will be considering a wide and varied range of legislative
proposals to address these issues. As Secretary Mineta has noted,
congestion affects virtually all elements of the transportation
infrastructure, and. by impeding mobility and accessibility, congestion
threatens America's competitiveness, economic growth and productivity,
and quality of life. Both the Department's safety and congestion
priorities require addressing the need for additional capacity (which
is an issue of adequate capital investment) and improved operational
management of transportation systems and facilities.
While I have not analyzed all the major policy and management
issues facing the Department of Transportation, among the specific
areas which Congress may well consider as legislative priorities are
the following: Reauthorization of TEA-21 and AIR-21. While neither
reauthorization will occur for a couple of years, both Congress and the
Department will be studying implementation of existing laws and
programs, and considering possible amendments and improvements to the
current authorizing legislation; ``Streamlining'' of capacity-enhancing
transportation infrastructure projects; The future of AMTRAK and the
maintenance of a viable national system of intercity rail passenger
services; The movement of goods both domestically and in advancing
national goals in global free trade (including the implementation of
NAFTA); The role of the transportation sector in meeting the nation's
energy needs; Improved management of the nation's air and surface
transportation systems through the continued deployment of the most
advanced information technologies; and With Congress, the Secretary and
my colleagues at the Department of Transportation, working to
strengthen the Department's ability to manage important economic and
regulatory decision-making.
14. Within your area of control, will you pledge to develop and
implement a system that allocates discretionary spending based on
national priorities determined in an open fashion on a set of
established criteria? If not, please state why. If yes, please state
what steps you intend to take and a time frame for their
implementation. I believe that discretionary funds should be allocated
pursuant to a fair, fixed and understood set of criteria. Although one
of the largest grant-making agencies in the federal government, the
Department has a relatively small percentage of funds over which it has
discretion. Moreover, Congress increasingly earmarks even these funds
for specific projects. I will support, and will be guided by, national
priorities established by Congress and articulated by the Secretary in
the allocation of those funds available to the Department which are
genuinely discretionary, and, as Assistant Secretary for Transportation
Policy, I look forward to advising the Secretary, the Deputy Secretary,
and my colleagues at the Department of Transportation in the
development of such priorities.
I understand that the Department's Inspector General has studied
discretionary programs and that the Committee has held hearings on this
issue. If confirmed, I will review these reports and hearings, as soon
as possible, and will personally study the effect of Congressional
earmarking on the discretionary programs of FHWA, FTA, and FAA.
Senator Breaux. Thank you both very much, gentlemen, for
being with us, and thanks for your commitment to come back. I
know Mr. Shane and Mr. Frankel, you are not doing this for the
money. Obviously, it is a great sacrifice. I think good people
for the right job is absolutely critical, and that means
getting people with experience both in the private sector and
in the public sector to serve.
I mean, I want people who know what they are doing. The
fact that they were doing it in the private sector and are
willing to come back at great sacrifice as far as I am
concerned is something that is very positive, and not negative
at all. I want the best people there, and we are glad you are
coming back.
I want to also express the fact that I am the only Senator
here should not be considered as a bad sign for either of you.
You ought to consider it a good sign----
[Laughter.]
Senator Breaux [continuing]. Because of the fact that if
you all were controversial, or were less than supported by this
Committee, every Senator would be here trying to tear you
apart. The fact that I am doing this on behalf of the Chairman,
by myself, indicates actually the strong support that you have
from both sides of the Committee, so it should not be in any
way seen as a slight, really as positive.
Mr. Shane, we are going to confirm you very shortly for the
position of Associate Deputy Secretary, and then I take it we
are going to come back when we get the legislation from the
White House to consider creating an Under Secretary for Policy.
I am sure you have had discussions with Secretary Mineta about
that. Can you tell me what the difference is going to be? Can
we just talk about it all at one time?
Mr. Shane. Thank you, Senator. The position of Associate
Deputy Secretary has been in the Department for many years. It
has more recently, sometime after it was originally created it
was also given the additional title of Director of
Intermodalism. There have been some superb incumbents in that
position, but notwithstanding the quality of the people that
have populated the job, for some reason it has not done the job
that various Secretaries of Transportation have expected.
Secretary Mineta is of the view that what is lacking in the
Office of the Secretary of Transportation is a single, coherent
focus of policy development. He does not have that right now at
the appropriate level.
Senator Breaux. And that focus on policy development is
across all different venues of transportation and not just
aviation, but the big picture.
Mr. Shane. Absolutely, Department-wide. For example, the
position for which Mr. Frankel has been nominated is entitled,
Assistant Secretary for Transportation Policy. It is a bit of a
misnomer, because he has transportation policy except for
aviation, or except for most of aviation.
Read Van Der Water, who has already been confirmed in the
job of Assistant Secretary for Aviation and International
Affairs, has aviation and a variety of other international
transport issues, so the transportation policy function right
now is divided between two Assistant Secretaries.
Now, you might say, ``OK, well then, if you want a single
focus of transportation policy, why not combine those two
jobs''. The answer to that is, that was in fact the status quo,
and the last job that I had in the Department was those two
jobs combined, and I have to tell you as the last incumbent in
that combined position, it did not work. It did not work
because the line responsibilities that Assistant Secretaries
have are such that for the most part the aviation and
international side of the portfolio is simply overwhelmed. What
I consider to be many of the core issues of the Department of
Transportation which were there were given short shrift at the
Assistant Secretary level.
I think Secretary Mineta came to the same conclusion, and
it was therefore his view that by elevating this coordination
function, this policy development function to a notch above the
Assistant Secretaries, the Associate Deputy Secretaries--not
above, it is actually below. If you ratcheted it up above the
Assistant Secretaries, and you have that single focus, the
incumbent in that Under Secretary position will have the luxury
of not having to deal with regulatory issues every day of the
week, the way Ms. Van Der Water will have to do as Assistant
Secretary for Aviation, programmatic issues that Mr. Frankel
will have to deal with if he is confirmed, and so forth, and so
I honestly believe that we can really give life to this
concept.
What excites me most about it, if I can just add one final
thought, is that we have been talking about one DOT for as many
administrations as I can remember. I have never seen that
concept actually take hold. I think just by virtue of having
been there as many times and as many years as I have, I have
some ideas about how that can be done. I have discussed those
with the Secretary as recently as a couple of days ago. I am
really quite confident that we can make the Department of
Transportation function in a way that it was meant to function
in the Department of Transportation Act of 1966, and this
Committee and other Committees of the Congress will be the
beneficiaries of that more coherent policymaking operation.
Senator Breaux. Let me hope that when you leave this
position you will be able to look back and say, it was a better
place than when I got there. I think that is really a
challenge.
Let me talk a little bit about the concept, since it is a
policy decision that you are in. There are many of us who are
big believers in the free market and competition. It has become
increasingly, and perhaps now because of the economics of the
situation we are in, more and more concerned that in order to
have competition and free markets, you have to have
competitors, that you cannot have competition without
competitors, and more and more it seems to me that more and
more we have less and less.
More and more we have fewer railroads, more and more we
have fewer oil companies, more and more we have fewer airlines,
more and more we have fewer and fewer telephone companies, and
it is sort of something that is permeating throughout society.
There is a great deal of activity and consolidation and
mergers and what-have-you, and if we end up with two railroads
in this country, or two airlines in this country, how are we
going to have real competition, and if you do not have
competition, the alternative is, government regulates. If we
only have one railroad, we are going to regulate where they go,
what they charge, and who they serve. The same thing with
airlines. The same thing with, you name the industry, and so
competition is an essential ingredient, and you must have
competitors in order to have competition.
Can you just give me some of your philosophy about the
things that are happening out there, and what your
recommendations might be?
Mr. Shane. Yes. Well, first of all, the one thing I would
say in response to your statement is, Amen. I share that
concern. I think there are some worrisome developments in a
variety of modes of transportation that do bear close watching.
I was pleased to see the Surface Transportation Board put a
moratorium on mergers in rail in order to take a good, hard
look at what is really happening in the rail sector.
The aviation sector is, I think, complicated right now.
Obviously the airline industry is in the tank for all the
reasons that we know even prior to 9/11 and certainly
subsequent to that. The Congress has jumped in very quickly,
and I must say very adroitly, in order to stave off what could
have been a real catastrophe in the air transport sector, but I
can tell you that from my experience in the private sector over
the past 8 years, and particularly in the past couple of years,
I would not write off the prospects for new entry in the
airline industry.
I am not here to make any promises, but there are some very
interesting developments out there right now. Venture
capitalists are beginning to look very hard at some models that
have really worked, I think, for a long time. I used to come in
past incarnations at the Department of Transportation and
testify about how much competition we had in the airline
industry, and I will always cite Southwest Airlines. Southwest
Airlines was a savior of executive branch policymakers in the
aviation field, because it was bringing some competition to a
market that otherwise might have been too concentrated in some
places.
Now you are beginning to see replications of the Southwest
experience coming in different forms, but a whole variety of
data points I would say that investment bankers look for when
they advise possible new entrants as to whether this is a
business to get into, and so I am naturally encouraged. It is a
little hard to see it through the fog of this awful environment
we are living in right now, but I am encouraged about the
prospects for new entrants into the airline industry, and I
would not jump to any conclusions about what the federal
government needed to do beyond that which it is proposing to
do, which it is doing now pursuant to the airline stabilization
legislation that was just passed.
When we began the first Bush administration, we did a
comprehensive study of competition in the domestic aviation
industry. I do not think there has been as comprehensive a
study of competition in that industry since, and it may well be
that if, depending upon developments--I mean, we have not
formed any judgment right now as to whether we are about to do
another study, but depending upon developments there might well
be a basis for going back in and replicating that study, seeing
what the data showed today, similarly in shipping.
I think that competition, as you say, is critical to our
economic well-being and the Department of Transportation,
working with the Department of Justice, has a solemn obligation
to ensure that we continue to enjoy the benefits of it.
Senator Breaux. I know that, and thank you.
Mr. Frankel, your areas are going to deal with some of the
regulatory issues, as I understand it, is that correct?
Mr. Frankel. Principally, Mr. Chairman, in the surface
transportation area.
Senator Breaux. Let us talk about the trucking industry,
and the carrying of hazardous waste. We have been in this area
of trying to make sure that people who drive trucks that carry
hazardous materials are qualified in order to do that, and
Congress has been involved in the Patriot Act and requiring
background checks to be performed on all commercial drivers,
and there is a debate about who is going to do that, whether
the industry is going to do it, or whether the government is
going to do it, or whether we are going to have a combination
of some form to be able to do it.
I suggested, maybe naively, but it seems like it made a lot
of sense, that we now require background checks for the
purchase of firearms in this country, and we get those
background checks done in 24 hours so somebody can buy or not
buy a hand gun, which I imagine is done through some type of a
computer system. I am just wondering, why can we not use that
same type of computer information on people who have criminal
records, and extract that information for the purpose of
determining whether they should have a commercial license to be
able to transport hazardous material.
Can you give me your thinking, and what your
recommendations would be on how we are going to resolve the
question on how we can as quickly and fairly as we can get
criminal background checks on people that are applying for
these licenses?
Mr. Frankel. Well, I know, Senator, that this has been an
area to which Congress and this Committee in particular has
turned its attention with great urgency, particularly sine
September 11. Of course, the question of hazardous waste--
hazardous materials, excuse me, movements is something which
has several different parts, as you all know. The operating
agencies, the operating administrations in the Department are
involved, and indeed, the policy office, the Office of
Intermodalism, has been involved in trying for the last 2 years
in trying to coordinate this effort to deal with what public
policy and national policy should be with regard to the
movement of hazardous materials, the licensing.
I think we have taken some important first steps with the
Patriot Act. I know that this Committee, Senator Hollings,
yourself and your colleagues have also taken the initiative in
trying to clarify and make clearer the implementation of that
act.
Senator Breaux. Well, I take it on that point that the
administration is now of the opinion that that act is not
necessary. Is that your understanding of what you are hearing
down there?
Mr. Frankel. I cannot really speak to that, Mr. Chairman
with specificity. I do know that the Secretary certainly is
committed to the implementation and the clarification of the
terms and requirements of the Patriot Act with regard to the
licensing of those who would move hazardous materials.
Senator Breaux. We had some technical corrections which I
think they are saying it is not really necessary now, that I
think some of us felt that it would be helpful to have it
spelled out in legislation, and you need to take a look to see.
We are not trying to pass legislation just to pass it, but I
think if it is needed, and it is necessary, we want you all to
take a look at it.
Mr. Frankel. We will do that, sir.
Senator Breaux. You would have railroads under your
jurisdiction?
Mr. Frankel. Yes, in terms of policy, and obviously, in
working with the Secretary and the Deputy Secretary, and hope-
to-be Under Secretary in FRA. We have major fundamental issues,
obviously, before us with regard to railroads.
Senator Breaux. I was pleased to see that Mr. Shane
supports no more rail mergers at the present time. I think that
is correct. Can either of you give some indication of what we
can do as an administration and as a Congress concerning the
financial status of Amtrak? It is almost a regional issue, and
yet it really is not.
We have got the legislation requiring that they liquidate
if they do not operate in the black. That is not going to
happen. I mean, what do we need to do to assure the traveling
public who uses rail transportation as a means of moving around
the country that we are going to invest in this system?
I mean, if you look at what--and we always hear the stories
about what Japan and what Europe has done to emphasize rail as
a transportation of people. The systems are generally much
better supported, and there is a lot reasons, because of
geography and the size of the countries, of course, but I
hesitate to think what would happen to the Northeast Corridor
with aviation if we did not have Amtrak. I mean, we would have
an overload of those airports, and we would never be able to
move.
I support it, but what can you tell the Congress, and
perhaps in general right now, that we need to be doing to
reassure this country that we are going to have an Amtrak
system that is going to be available?
Mr. Frankel. Well, Mr. Chairman, I have obviously dealt
with Amtrak a good deal as Commissioner of a state in the
Northeast through which Amtrak passes, indeed, one of the few
states that actually owns a significant portion of the right-
of-way which Amtrak uses. I became quite familiar with both the
opportunities, the possibilities, the importance of intercity
passenger rail, and also what some of the obstacles and burdens
are.
There are obviously--you know better than anyone that there
are no easy answers here. If we had them, I am sure we would
have a more clearly financially appropriate program. From the
beginning, Amtrak has obviously had two oftentimes conflicting
missions, that is, to be financially viable, if not profitable,
as well as to run, maintain, operate a national passenger
service.
I think in the crisis that we have, including the events,
as you said, Mr. Chairman, of September 11, and the aftermath,
and recognizing the importance of inner city passenger rail in
crowded corridors, including, but not limited to the Northeast
Corridor, and now the statement, the finding, if you will, by
the ARC of dealing with the financial viability of Amtrak, I
think this is a moment of opportunity.
You all have Amtrak reauthorization to deal with next year.
The Secretary and the Department are committed to working with
the Congress early in the next year in trying to develop some
fundamental solutions to the provision of intercity passenger
rail. I think the one thing that I have noticed is, it may not
be unanimous, but I think there is a broad common interest and
commitment to viable, effective, efficient intercity passenger
rail, and now I think we have to together deal with the
fundamentals of that.
Senator Breaux. Mr. Shane, as a policy forecaster, perhaps,
in the Department can you share some thoughts on that? I guess
I have the conclusion that we ought to quit trying to make
Amtrak operate at a profit. Make them operate efficiently, but
recognize that a transportation system in crowded corridors
using the rail is in the national interest, and we are going to
have to quit worrying about whether it can only exist if it
makes a profit.
I think it is in the national interest to have that there,
because it also helps other sectors, other transportation
sectors immensely. What are your thoughts? Is this something we
need to do in the national interest? Do we have to recognize we
are going to have to spend some money on it, or do we take the
position that if they cannot make it, we will shut them down?
There are some Members of Congress who say, look, you have
got so many passengers. If your trains are running full, we
will operate at a profit, and if you cannot operate at a
profit, we do not need you, or you should not be there. What
are your thoughts on that?
Mr. Shane. Senator, I would be fooling myself and anybody
else if I sat here and pretended that I had the right answer to
the Amtrak dilemma. I think I actually have the somewhat
dubious distinction of having been a lawyer on the little task
force that was set up in the early seventies to create Amtrak,
and so I have a long history with Amtrak, none of which I can
take any real credit for.
The fact is that Amtrak does not seem to be viable in its
current form. Just throwing money in the kinds of amounts that
we are used to seeing at Amtrak will not make it more viable.
It will have to be in order to proceed on that basis a sea
change in the administration's and the Congress' attitude
toward Amtrak, and it is hard for me to see that that is going
to be the solution, so I look at the issue as the issue of
intercity rail transportation generally. What are we going to
do to assure we have a viable intercity rail transportation
system in this country?
I do not know whether Amtrak is a solution to that. I do
know it is an issue that we cannot not face up to very
seriously in the next few months. I am hoping that because of
the crisis which has ben created by the ARC decision, we are
all waiting for the plan that will emerge, I guess, in 90 days
from November 9, I think it was. As a result of that, our minds
are going to be concentrated wonderfully on what we are going
to do about rail transport in this country. You are absolutely
right, it cannot be sort of written off. It is an essential
component of our transportation system, and all I can tell you
is that I commit myself, and I know Mr. Frankel commits himself
to making sure that we address it with all available energy and
creativity.
I do not know whether Amtrak will be part of the solution
when we finally find the solution. If we could address this
issue successfully, Mr. Chairman, I think it would probably be
the most important thing we did in the transport sector in
years.
Senator Breaux. I am not trying to pin you down, but maybe
if you could elaborate, I mean, just from a philosophy type of
standpoint, do you think that Amtrak should only exist if it
could make its way financially, or would you be put into the
category that, let us say it is in the national interest, and
you are going to have a financial commitment of some sort to
assist it to provide the service?
Mr. Shane. Well, the country, I mean, by default has pretty
much taken the view that it is in the national interest, and we
continue to finance it, notwithstanding the fact that it is not
and has not been ever financially viable, so in that sense
there is sort of a policy in place right now, but it is a
policy by default.
I honestly do not know--after looking at the numbers, and I
cannot pretend to have studied Amtrak nearly as much as a lot
of other people have, so I really do not want to pretend to be
an expert on the subject. I do not know if, after I have taken
a look at all of that, I would conclude that we should simply
treat Amtrak as something that we should subsidize forever and
continue to operate in the way that it has been operated.
Senator Breaux. I should know, but I do not think I do, but
I would imagine that other countries that have successful rail
transportation systems, they are probably not money- making
operations, whether it is in Europe or in Asia or Japan. I
would imagine that those countries have a financial commitment
to keep those passenger transportation systems in place of some
sort.
Mr. Shane. That is right. They have taken a very different
policy decision, I think, with respect to rail transport, and
by and large we are talking about countries that have different
population densities, different demographics than much of our
country, and so it is difficult to say whether comparisons with
Europe, for example, or with Japan are apposite in trying to
address the Amtrak problem, but those are the kinds of
questions we really do need to address.
I am not trying to be cute. Please understand, I think this
is one of the most serious transportation policy issues that is
confronting the Department of Transportation right now.
Senator Breaux. It is not an easy answer. If you make the
decision that a rail transportation system is in the national
interest and it cannot make a go of it financially so we are
going to have to assist it and subsidize it, could you not say
the same thing for the aviation industry?
I mean, there is not an airline out there right now, but
maybe one, that is probably showing a profit, so eventually,
when you do not show a profit, you cease to exist in a free
market. Therefore, an aviation system is in our national
interest, so we are going to subsidize passengers on all of the
airlines to make sure they do not go away, and then you can
extrapolate that to everything that you think is in the
national interest and move away from a free market society. It
is not an easy question.
Well, I think if we do have some additional questions to
both of you gentlemen, I think we will submit them and ask that
you respond. After that is completed, I would hope the Chairman
would try to process this out of the Committee as quickly as
possible and hope we can get it done perhaps before we leave,
because the question is, nobody knows when we are going to
leave. We may have a lot of time.
[Laughter.]
Senator Breaux. Mr. Frankel, I hope you got rid of that
Enron stock.
[Laughter.]
Mr. Frankel. Too late, Mr. Chairman.
[Laughter.]
Senator Breaux. Well, we appreciate both of you spending
time with us. I think you are uniquely qualified, and thank you
for agreeing to serve, and with that, the hearing will be
adjourned.
[Whereupon, at 3:25 p.m., the hearing adjourned.]
APPENDIX
Response to Written Questions Submitted by Hon. Ernest F. Hollings
to Jeffrey Shane
Question 1. The Committee will act on your nomination to become the
Associate Deputy Secretary. I know that we will attempt to create a new
position for you, an Under Secretary for Policy and that we will need
to go through an abbreviated process to confirm you for that position
at a later time. You have already served as the Assistant Secretary for
Policy at the Department and thus have much experience with how DOT
functions. Can you explain, for the record, your view of how the new
position will function and the benefits?
Answer. Because the old position of Assistant Secretary for Policy
and International Affairs was split into two new positions in 1993,
surface and intermodal issues now enjoy the undivided attention of one
assistant secretary while another assistant secretary is devoted full-
time to aviation and other international issues.
This change produced important improvements over the previous
structure, which had become unwieldy and ineffective. Still, the day-
to-day regulatory, administrative, and project-specific decisions that
have to be addressed at the assistant secretary level leave little time
for the forward-looking, intermodal policy development process that
Congress foresaw when it wrote the Department of Transportation Act in
1966, and that Secretary Mineta wants to achieve through his proposed
reorganization.
As contemplated in Secretary Mineta's proposal, a new Under
Secretary for Policy would have Department-wide scope and serve as the
Secretary's principal policy advisor. The Under Secretary would serve
as the main focal point for formulating new initiatives, developing the
Department's views on pending program reauthorizations and other key
legislative proposals, advising the Secretary on major regulatory and
policy decisions, and brokering an on-going policy development effort
that draws continually and cooperatively on the Department's operating
administrations.
The Secretary's proposal would not do any violence to the
Department's structure. The Assistant Secretaries for Transportation
and for Aviation and International Affairs would remain in place,
reporting to the Under Secretary. Also, because the present position of
Associate Deputy Secretary would be abolished upon the creation of the
new Under Secretary position, the proposed restructuring would not
expand the Office of the Secretary. Rather, the change would facilitate
a drawing together of the Department's vast resources in a way that
will enable us--in close cooperation with the Congress--to develop and
manage a truly creative, forward-looking, and integrated responses to
our nation's transportation requirements. It is a structure, we
believe, that will enhance the Department's ability to do business with
its authorizing and appropriating committees, and vice versa.
AVIATION
Question 1. With the faltering economy and the events of 9-11, the
airline industry is facing an enormous challenge. DOT will be
confronted with a different industry in 6 months--perhaps with less
airlines, less low cost air carriers, and thousands unemployed. What
concerns do you have if we do see failures or consolidations, leaving
us with less participants in the market?
Answer. The terrorist attacks of September 11th had a profound
effect on the financial position of the airline industry. DOT has
disbursed nearly $4 billion of the $5 billion in compensation to
airlines made available by the Air Transportation Safety and System
Stabilization Act. In addition, America West was granted a loan
guarantee in accordance with procedures established by the Act.
Anecdotal evidence suggests that quick action under the Stabilization
Act has had the intended effect of stabilizing the industry and
restoring the confidence of the financial markets in the airline
industry.
Although the future of the industry is still precarious, the
financial condition of most carriers is improving. It seems premature,
therefore, to speculate that the terrorist attacks have forever changed
the fundamental structure of the airline industry. The spirit behind
the Air Transportation Safety, and System Stabilization Act was and is
exactly right: to preserve the existing competitive structure in the
airline industry by compensating airlines for their incremental losses
due to the terrorist attacks, and to allow the market to seek its own
equilibrium thereafter.
The Department will continue to monitor developments in the airline
industry closely. Our primary goal must be to continue to work toward
the stabilization of the industry and thereby to preserve competition.
We remain committed to ensuring an environment that promotes
competition and provides consumers with the price and service benefits
that competition brings.
Question 2. The House has introduced legislation to provide direct
support and loan guarantees for general aviation. Does the
Administration support this legislation?
Answer. The Administration has not yet taken a position on H.R.
3347 (or on a similar bill introduced in the Senate, S. 1552). The
general aviation industry is a critical element of the U.S. aviation
sector, and it is important to focus on the prospects for a revival in
this sector of the economy. As you know, the President has just
transmitted his FY2003 Budget Request. It represents a comprehensive
and balanced approach to reviving the economy and addressing the
consequences of the attacks of September 11. I would expect that the
Administration's position on this bill, and other bills that take an
industry-by-industry approach to these questions, will be developed as
a part of the overall budgetary and appropriations process in this
session of Congress.
Question 3. DOT has been asked repeatedly to review and revise its
CRS rules governing travel distribution. The world of travel
distribution has changed substantially since the rules were last
revised. Carriers have cut fees to travel agents, new companies have
been created to provide services, companies once subject to the rules
may no longer fall under the rules, and yet the rules remain unchanged.
When can we expect that DOT will revise its CRS rules?
Answer. The Secretary fully recognizes the importance of completing
the CRS rulemaking. He has instructed the staff to move forward on the
rulemaking and develop a rulemaking proposal that can be forwarded to
OMB. We expect the Department to submit a proposal to OMB within a few
months. I intend to ensure that the staff promptly carries out the
Secretary's directions.
Question 4. The Committee favorably reported S. 415, legislation
designed to provide an ability for carriers to enter fortress hubs.
While the downturn and 9-11 have changed much, what are your views on
how best to ensure that we have competitive access to major airports
around the country?
Answer. To increase airline competition, we should seek to reduce
anticompetitive barriers to entry--barriers that either prevent or make
it more difficult or costly for air carriers to enter a market or
expand operations once they begin serving a community.
Airport managers, as outlined in an October 1999 DOT study (Airport
Business Practices and Their Impact on Airline Competition), have a
legal obligation to ensure that all air carriers have reasonable access
to essential airport facilities. Under AIR-21, certain large- and
medium-hub airports--those airports served primarily by one or two
dominant carriers--must submit to DOT airport competition plans in
order for the FAA to approve the collection of a new Passenger Facility
Charge (PFC) or for a grant to be issued under the Airport Improvement
Program (AIP).
A competition plan must include information on the availability of
airport gates and related facilities, leasing and subleasing
arrangements, gate-use requirements, patterns of air service, gate
assignment policy financial constraints, airport controls over air- and
ground-side capacity, whether the airport intends to build or acquire
gates that would be used as common facilities, and airfare levels (as
compiled by DOT) compared to other large airports.
I understand that FAA and OST staff devoted a considerable amount
of time to reviewing fiscal year 2001 airport competition plans and
offered suggestions for what actions airport officials could take to
reduce entry barriers. The ongoing review of fiscal year 2002 plans is
focusing on actions taken in response to these suggestions,
particularly as they relate to gate utilization and monitoring,
subleasing practices and notification to all carriers of gate
availability and gate assignment policies. Clearly, a careful review of
airport competition plans is and should remain an important policy tool
for increasing airline competition.
Question 5. I know that you have been extremely involved in the
security issues, and I will not ask you to divulge classified
information or go into details about implementation of the Aviation and
Transportation Security Act. How quickly do you anticipate that the
President will nominate the Under Secretary for Security? With respect
to National Airport, the press reported that the Secretary would be
spending $2 million for additional security measures. Can you generally
explain how the money will be expended?
Answer. The $2 million dollars have been allocated for a
demonstration project to investigate technology for 100 percent
positive passenger bag matching at Reagan Washington National Airport.
New technology concepts, such as automated barcodes, radio-frequency
(RF) tags, and other baggage reconciliation procedures will be
evaluated and selected based on effectiveness and availability.
Separately, I know that the Secretary is gratified by the speed with
which your Committee and the Senate has acted to confirm John Magaw as
the Under Secretary of Transportation for Security.
SECURITY
Question 1. Security in the transportation system is only as strong
as its weakest link. If we focus all of our resources on the security
of the aviation system but neglect the other modes of transportation
are we doing a disservice to the American public?
Clearly there are a number of vulnerabilities throughout the
transportation system. Although the highways are publicly owned, there
is virtually no security on the highways, other than the enforcement of
highway laws. There is very little security on either the freight or
passenger rail systems or throughout the vast maritime system. While
the Commerce Committee has approved legislation addressing both
maritime and rail security, it concerns me that there are generally no
recognized standards and very little attention is being focused on
security modes other than aviation. Can you discuss what you will do to
bring these issues in the greater focus at the Department and within
the Administration?
Answer. The Department believes the security of the entire
transportation system is of paramount importance. While the aviation
system has received much of the public's attention, the Administration,
the Secretary and the Department have been looking at the security of
our transportation facilities in a more comprehensive way.
Immediately following the September 11th attacks, the Secretary--
concerned about the very issues mentioned in your question--established
the National Infrastructure Security Committee (NISC) to evaluate
security issues and recommendations in all surface modes of
transportation. Six ``Direct Action Groups'' (DAGs) were formed under
the NISC to consider transportation security matters related
specifically to particular security issues as they arise in particular
modes of transportation (maritime, motor carrier, pipeline, railroad,
transit, and hazardous materials transportation). The DAGs are
comprised of personnel from Office of the Secretary of Transportation
and from the Department's various modal administrations.
The Department has also created: A Transportation Information
Operations Center--a ``24/7'' communications facility, to be fully
operational by April 1, 2002, that will improve the flow of information
between the Department and the transportation industry; A Credentialing
Direct Action Group--exploring the ``smart'' credentialing of all
transportation workers and persons with access to secure transportation
facilities; A Container Working Group--an interagency working group
that includes the Departments of Agriculture, Commerce, Defense,
Energy, Health and Human Services. Transportation, and the Treasury.
The group is tasked with improving the security of containers that flow
through the nation's intermodal transportation system.
Representatives from across the transportation industry have been
meeting with the DAGs on a regular basis. In turn, the DAGs have been
working aggressively to (i) identify shortcomings in current security
measures, (ii) formulate recommendations (including suggested
legislative and regulatory changes), (iii) establish standards, and
(iv) engender more effective company and government security
preparedness.
As one early product of this effort, the DAG on maritime
transportation prepared recommendations and technical assistance for
the Department's position on the ``Port Maritime and Rail Security Act
of 2001'' (S. 1214).
RAIL
Question 1. Does the Administration intend to submit rail safety
legislation next year?
Answer. I am told the Administration does expect to submit a rail
safety reauthorization bill to Congress for its consideration this
session.
AMTRAK
Question 1. There is major concern over the current financial state
of Amtrak given the recent finding of the Amtrak Reform Council which
has required Amtrak to prepare a plan detailing their own liquidation.
While it is generally agreed that Amtrak will not be liquidated, the
current process has created a great deal of uncertainty within the
financial markets. What is the Administration doing to reassure Amtrak,
their creditors and passengers that Amtrak service will continue
uninterrupted at this time?
It has been said recently that the Administration plans to send up
reauthorization plans for Amtrak early next year. Can you please
comment on the successes and the failures of the current passenger
railroad system and any changes that you think might create a more
stable, better funded system which can serve a larger number of
passengers?
Answer. I strongly believe that the Administration and the Congress
need to work together sooner rather than later to craft a consensus on
the national policy toward intercity rail passenger service. While the
spotlight is on Amtrak's financial challenges, we must not lose sight
of the fact that this is a transportation mode that has the potential
to play a much more important role in providing the intercity passenger
mobility that this nation needs. I have no doubt that Amtrak will be
kept up and running while the debate over this policy takes place and
through any transition to a new paradigm of for intercity rail
passenger service.
With regard to Amtrak's experience to date, the success that is
most readily apparent to all is the important role Amtrak plays in the
Northeast Corridor transportation market, where it carries a majority
of the combined air/rail market between Washington and New York City
and a growing percentage between New York City and Boston. The less
obvious successes have been the way intercity rail passenger service
has been embraced by several states as major components of their
transportation plans and how these states have financially supported
intercity passenger rail service even in the absence of a strong
federal partner.
I believe that the two essential prerequisites to a more stable and
reliable passenger rail system are (1) a clearly stated federal policy
with regard to passenger rail service, and (2) a much larger role for
the states.
MARITIME
Question 1. President Bush has expressed strong support for the
Jones Act, support that has been reiterated by Secretary Mineta and
other members of the Administration. Do you support the President's
position on maritime cabotage?
Answer. Yes. The maritime cabotage restriction has been an element
of U.S. transportation policy for many years, and I am well aware of
the President's support for it.
______
Response to Written Questions Submitted by Hon. Ernest F. Hollings
to Emil Frankel
TRUCKING
Question 1. As you know, the issue of Mexican trucks operating
beyond the commercial zones on the U.S.-Mexican border has been the
focus of a lot of attention in recent months. While I am pleased that
the appropriators reached a compromise on this issue, I have concerns
about the lack of coordination on this issue and the amount of
information available about Mexican trucks. Can you please discuss the
state of readiness on both sides of the border and when you believe the
border can be opened to cross border traffic?
How will the requirements contained in the fiscal year 2002
Transportation Appropriations bill be complied with?
Answer. The fiscal year 2002 DOT Appropriations Act established a
variety of requirements for the Department to meet prior to opening the
southern border to meet prior to opening the USMexican border,
consistent with the requirements of the NAFTA.
The Department and the four southern border states are working
cooperatively to implement the provisions contained in the
Appropriations Act. These include the placement of vehicle weighing
scales at each crossing; placing ten Weigh in Motion scales at the ten
busiest crossings; deploying 214 additional federal enforcement
personnel at the border; providing $18 million for additional state
border enforcement personnel; establishing permanent inspection
stations at major crossings; and issuing comprehensive safety rules to
assess the safety of Mexican carriers before they are allowed to
operate in the United States.
The Mexican government has made great progress in improving their
safety information management systems, including developing a drivers
license data base with some 88,000 drivers to date and establishing a
carrier based system with some 100,000 carriers operating 500,000
vehicles. In addition, Mexico is conducting vehicle and driver
inspections. The US and Mexico have agreed to provide access to these
data bases by U.S. and state inspectors.
High-level delegations from both countries are meeting on a regular
basis to discuss issues, exchange information and solve issues
cooperatively to assure the attainment and maintenance of the highest
levels of operational safety in cross-border operations.
Question 2. The USA PATRIOT Act of 2001 required background checks
to be performed on all drivers of commercial vehicles carrying
hazardous materials. S. 1750, which I introduced last week along with
other members of the Commerce Committee, provided technical corrections
to section 1012 of the USA PATRIOT Act following extensive
consultations with the DOT. I understand that within the last week, the
Department has reached the conclusion that a legislative fix is not
necessary. Can you please discuss why it would not be helpful for the
Congress to approve S. 1750 providing the technical corrections that
DOT previously requested?
Answer. We understand that the Department is developing an interim
final rule to implement section 1012 of the USA Patriot Act. The rule
in development will be comprehensive and not only implement Section
1012 but also address the clarifying requirements, as proposed in S.
1750. We look forward to working with the Committee in ensuring that
all necessary steps are taken, by legislation and/or by rulemaking, to
ensure that the purposes of the Act are carried out.
PIPELINES
Question 1. The Senate has approved pipeline safety reauthorization
legislation in each of the last 2 years. This bipartisan legislation
has been passed overwhelmingly by the Senate and has included the input
of the Administration in addition to other interested parties. The
House has not acted on any pipeline safety legislation even though
there have been much publicized accidents resulting in multiple
fatalities in both the liquid and the gas industries in recent years.
How will you work to advance pipeline safety priorities either through
the legislative process or the regulatory process?
Answer. I understand the Administration is fully committed to
passage of pipeline safety legislation and if confirmed, I would hope
to make that a high priority for my office. In addition to supporting
the pending legislation, the Department had made considerable progress
in addressing issues of pipeline safety, and remains committed to
continuing it efforts in that regard. The Department's actions include
the following: We have now begun inspections to enforce hazardous
liquid pipeline integrity management rules; In January 2002, the
Department issued a notice of proposed rulemaking to define the areas
where gas integrity management will apply; During 2001, the Department
improved its accident reporting requirements for hazardous liquid and
gas transmission pipelines. The Department lowered the reporting
threshold for spills from 50 barrels to 5 gallons; In December 2001,
the Department issued a final rule updating corrosion control
requirements for hazardous liquid pipelines; The Department's Research
and Special Programs Administration is working with states to enforce
more comprehensive requirements to assure that pipeline employees
performing safety duties are qualified; The Department improved its
pipeline safety enforcement program, to commit more resources to this
effort; There are new guidelines for state participation in interstate
pipelines oversight; There is a new comprehensive multi-year plan for
research and development of pipeline safety technologies. This was
developed in connection with the Departments of Energy and Interior.
RAILROADS
Question 1. Railroad safety programs expired in 1998 and
reauthorization of these important programs is long overdue. What are
the major safety concerns facing freight and passenger rail?
Answer. Highway-rail grade crossing collisions and accidents
involving trespassers and pedestrians along railroad rights-of-way
account for 95 percent of all railroad-related fatalities. Grade
crossing safety and trespasser prevention programs remain essential to
the Federal Railroad Administration's (FRA) rail safety program. Track
problems have recently become the leading cause of train accidents,
accounting for more than one-third of all such accidents. Railroads
have scaled back investment in track rehabilitation, and axle loadings
have increased as the rail industry continues to introduce heavier
freight cars. The result is accelerated deterioration of the track
structure. FRA is intensifying its track inspection program to drive
down track-caused accidents. Human factors are also a significant cause
of train accidents, accounting for slightly less than one-third of
total train accidents. FRA is promoting improved training of railroad
workers, the adoption of fatigue mitigation programs, and increased
safety oversight by railroad managers as necessary steps to reduce
human factor caused accidents.
______
Response to Written Questions Submitted by Hon. John McCain
to Emil Frankel
SURFACE/MERCHANT MARINE
Question 1a. As you may be aware, last month the Amtrak Reform
Council (ARC) voted 6:5 making a ``finding'' that Amtrak will not meet
its statutory requirement of operational self-sufficiency by next
year's deadline (December 2, 2003). Have you had an opportunity to
review Amtrak's financial and operating performance?
Answer. While I have not reviewed Amtrak's financial and operating
results in detail, I am, of course, aware of the very difficult
financial circumstances, which the company faces. Costs have increased,
and are continuing to increase, more rapidly than revenues, and the
capital needs of Amtrak are significant.
Question 1b. Given the Secretary's membership role on both the ARC
and the Amtrak Reform Board, does the Administration intend to submit a
rail passenger restructuring proposal or some type of proposal to
address Amtrak's severe financial situation, and if so, when?
Answer. It is my understanding that the Department of
Transportation is working to develop a comprehensive policy and set of
recommendations, relating to the future of inter-city passenger rail.
The Secretary's goal, I believe, is to have these policy proposals
ready for submission to Congress early next year, when the President
presents his FY 2003 budget. If confirmed, I hope to be involved in the
development of this policy, and I look forward to working with Congress
in shaping a legislative package, which will address these issues.
Question 2. Earlier this week, the Senate approved, without my
support, H.R. 2299, the DOT Appropriations Bill for fiscal year 2002.
That bill was an egregious overreach by the Appropriators in
redirecting the programmatic expenditures and directives under the laws
developed by the Authorizing Committees. There were more than $4.1
billion in earmarked projects ($1.2 billion in the conference report
and $2.9 billion in the statement of managers). It went so far as to
redirect nearly $1 billion in highway dollars that should have gone out
by formula to the states or allocated to the highway programs and the
money was used as a slush fund to earmark the Appropriators' home-state
projects. I want to ensure that each of you fully understands the
difference in the legal effect between report language and bill
language. Do you understand that report language is advisory only?
Answer. Having once served as a legislative assistant to United
States Senator Jacob Javits, I have not forgotten the difference
between report language and bill language: only the language of an
enacted bill has the force of law, while report language is simply an
expression of Congressional interest and intent. Secretary Mineta has
made this point to the Department's executive management team. He has
made it clear that he understands the difference between statutory and
report language, particularly with regard to the naming of specific
projects in report language.
Question 3. How do each of you envision your role, if confirmed,
with respect to the development and advocacy of policies promoting
transportation security?
Answer. In the next two years Congress will be considering the
reauthorization of the surface transportation and aviation programs, as
well as other critical bills affecting virtually all modes of
transportation. I look forward to assisting the President and the
Secretary, and to working with Congress, in addressing these critical
issues. I believe that the legislation in all these areas--legislation
that I hope to help shape--must necessarily incorporate the critical
goals of safety and security in our transportation system, and seek to
balance those requirements with mobility and reliability.
While the position for which I have been nominated will not carry
with it management responsibilities for the Department's transportation
security programs, I hope to play a constructive role--working with my
colleagues at the Department of Transportation, with Congress, and with
state and local officials--in analyzing, developing and advocating
transportation safety and security policies and programs, relating to
all modes.
Question 4. Through much of the last century, our nation's maritime
policy was directed toward supporting our national defense needs. While
meeting our defense needs should and must remain a top priority,
changes in the global market and advances in the maritime industry have
clearly put new pressures on the industry that were not contemplated
during the development of many of the laws and regulations that form
our current maritime policy. What specific changes would you propose to
bring our nation's maritime policy in line with the maritime industry
of today?
Answer. In the past, U.S.-flag vessels have competed with other
nations primarily on the basis of superior service quality and
reliability and their ability to provide better intermodal connections
to domestic transportation. Even so, U.S.-flag carriers need a cost
structure that is not appreciably higher than those of direct, lower-
cost competitors in the world market. U.S.-companies must earn
sufficient returns to cover costs, and to fund the continuing
investments required in this extremely capital-intensive industry, if
they are to remain competitive in a global market.
If confirmed, I look forward to supporting the Secretary in
addressing these issues. To that end, I believe that we need to
consider and assess all the options available to help U.S.-flag
carriers meet the competitive pressures from foreign-flag carriers.
These could include measures to provide direct assistance to carriers,
measures to improve their tax liabilities, and measures to guarantee
certain types of cargos to U.S.-flag carriers.
Question 5a. As you may be aware, I prefer to eliminate restraints
on U.S. business competitiveness rather than provide subsidies that
remove incentives for businesses to find new ways to operate and
compete in the world market. I continue to believe that U.S. companies
are struggling to compete in the international maritime industry in
part because of the prevalence of subsidies by other flag-states. What
are your views on maritime subsidies?
Answer. As you have noted, foreign government subsidies to their
industries, as well as restrictions and barriers to free trade, have
hurt American companies in international markets. United States
companies will continue to operate at a disadvantage to foreign-flag
shipping lines, as long as their governments use subsidies and other
policies to distort or restrict market forces.
Question 5b. If confirmed, how would you propose to help improve
the competitiveness of the U.S. maritime industry?
Answer. It is my understanding that the Administration will
continue to press foreign governments to eliminate practices, which
inhibit free market forces in the maritime sector. If confirmed, I look
forward to supporting the President and the Secretary, and to working
with Congress, in seeking to remove restrictions and barriers, which
inhibit the capacity of American companies to compete fairly, and on a
``level playing field,'' with foreign shipping lines.
______
Response to Written Questions Submitted by Hon. John McCain
to Jeffrey Shane
AVIATION--GENERAL ISSUES
Question 1. Why is the Department reorganizing to create a new
position for you to hold?
Answer. From the Department's inception until early 1993, the
principal policy advisor to the Secretary was an Assistant Secretary
for Policy and International Affairs. That job covered the entire
spectrum of the Department's activities, both domestic and
international. It became clear to me after spending nearly four years
in that role (1989-1993) that the aviation and international affairs
side of the portfolio had overwhelmed the office's ability to address a
great many core transportation issues facing the country--notably in
the surface modes. Based on that experience, I recommended to the
incoming Clinton Administration in early 1993 that it consider
splitting the office into two separate offices. My guess is that others
may have had the same idea. The result was that two new offices were
then created, each headed by an Assistant Secretary. One was the Office
of Transportation Policy; the other was the Office of Aviation and
International Affairs.
The change produced a real benefit: surface transportation,
intermodal, and other issues now received once again the level of
attention they deserve from the Secretary's senior policy advisors.
Unfortunately, the change also deprived the Secretary of a single,
centralized focal point for transportation policy advice and counsel.
The newly proposed structure, Secretary Mineta believes, offers the
best of both worlds. Surface transportation and intermodal issues
continue to benefit from the attention of an Assistant Secretary.
Aviation and other international issues will also have the undivided
attention of an Assistant Secretary. A new Under Secretary for Policy
will have Department-wide scope and serve as the Secretary's principal
policy advisor. The Under Secretary will have major responsibility for
coordinating the development of new initiatives, developing the
Department's views on pending program reauthorizations and other key
legislative initiatives, advising the Secretary on major regulatory and
policy decisions, and brokering an on-going policy development effort
that draws continually and cooperatively on the Department's operating
administrations.
Question 2. What effect are these changes expected to have on the
operations of the Department?
Answer. Our hope is that the new structure will furnish a basis for
pulling the Department together, at last, in a way that Congress
intended in the Department of Transportation Act of 1966. The idea is
not to do violence to the Department's structure. Rather, it is
intended to facilitate a drawing together of the Department's vast
resources in a way that will enable us--in close cooperation with the
Congress--to develop and manage truly fresh, creative, effective and
forward-looking responses to our nation's transportation requirements.
It is a structure, we believe, that will enhance the Department's
ability to do business with its authorizing and appropriating
committees, and vice versa.
Question 3. When can we expect to see proposed legislation to
implement these organizational changes?
Answer. I am pleased to report that the House of Representatives on
December 11 passed implementing legislation introduced by Chairman Don
Young of the Committee on Transportation and Infrastructure. H.R. 3441
would make the needed structural changes in Departmental organization
to put Secretary Mineta's proposed reorganization into place. The
legislation is now before the Senate.
INTERNATIONAL AVIATION AGREEMENTS
Question 1. As you know, one of the most important matters pending
before the Department with respect to international aviation is the
American Airlines-British Airways application for antitrust immunity
for their alliance. Everyone understands that immunity for this
proposed alliance and the prospect of Open Skies with the United
Kingdom are inextricably linked. While I have pushed hard for many
years for a truly open air services market with Britain, it is
essential that such an agreement and any associated conditions, such as
approval of the alliance, produce a truly competitive and fair regime.
It is clear to me that DOT's decision on this matter must not be
rushed. Can you assure the Committee that the AA-BA application will
receive a thorough and complete review?
Answer. I have recused myself from participation in the AA-BA case.
While I have no reason to doubt that the AA-BA application will receive
a thorough review, I am not privy to the Department's deliberations.
Question 2. As a general matter, what is your position with regard
to the U.S./U.K. bilateral, and what will you do to ensure that the
United States is not put at a disadvantage with respect to access at
Heathrow?
Answer. As you know, Bermuda 2 is a highly restrictive agreement in
many ways. Given that both the U.S. and the U.K. now routinely seek
pen-skies agreements with third countries, their inability to achieve
an open-skies regime with each other represents a conspicuous
aberration. It was the U.S. Government's goal to replace Bermuda 2 with
an open-skies agreement during my last tour of duty at DOT (1989-1993),
and that goal remains a priority for this Administration. I fully
support that objective.
It has always been a fundamental element of the U.S. position that
any new agreement with the U.K. must provide meaningful access to
Heathrow for U.S. carriers. I fully support that objective as well.
Because the precise nature of that access in the near term may well be
a central element in the Department's disposition of the AA-BA
proceeding--a case from which I am recused--I am unable to comment
further at this time.
Question 3. What role would you play in DOT efforts to liberalize
aviation markets around the world, and what areas do you see as a
priority?
Answer. I expect to contribute my experience in international
aviation to the Department's on-going efforts to liberalize aviation
markets. I intend to focus on policy formulation, consultations with
stakeholders, and negotiating strategy in cooperation with the
Assistant Secretary for Aviation and International Affairs and her
staff, as well as with our counterparts at the Department of State. We
will continue to seek open skies agreements to the extent like-minded
partners can be found, but I also believe that we should explore other
avenues toward liberalization. The all-cargo sector might form a
crucible in which to test new ideas; we should also try to build on the
multilateral approach adopted with four of our APEC partners late last
year. Although the United Kingdom, Japan, China, and Hong Kong are
clearly our highest immediate priorities, I am also very interested in
exploring further opportunities for progress with Canada, Latin
America, and Africa. It is also reasonable to anticipate that U.S.-EU
negotiations are not far off. It is my hope that the Department will be
able to engage all affected interests and the Congress in a thoughtful
discussion about fostering greater liberalization, and thus more robust
competition, in international aviation markets.
Question 4. What are your views on cabotage, and do you believe
U.S. air carriers would be at an advantage or disadvantage if the
Congress changed the cabotage laws?
Answer. In my view, U.S. airlines have demonstrated beyond doubt
that they are effective, adaptable competitors in both domestic and
international markets. I doubt that U.S. carriers would be at any net
disadvantage were our cabotage laws changed; indeed, I would expect
them to emerge as net winners in a regime that allowed them to exploit
any market that offered meaningful new economic opportunity, whether at
home or abroad.
There are, of course, some major practical impediments to the
operation of domestic services by foreign carriers. First, foreign
carriers operating in the domestic U.S. market would have to comply
with all of the regulations, labor laws, and tax requirements that
apply to U.S. carriers (and vice versa). A second is that any proposal
to the U.S. to allow foreign carriers access to domestic markets would
have to be wholly reciprocal. Third, any exchange of cabotage rights
would have to be preceded by a great deal of detailed work in the
legislative and regulatory area. It may well be for this reason that I
have not detected any major groundswell of enthusiasm from foreign
carriers for a change in our cabotage law.
Question 5. If confirmed, would you encourage the Congress to amend
the Fly America Act, or do support the current law?
Answer. Code sharing and the growing number of alliances between
U.S. and foreign airlines--meaning that U.S. Government passengers do
fly more routinely on foreign carriers--have diminished the economic
importance of this issue. Nonetheless, Fly-America requirements
continue to be a sensitive point in some of our international aviation
negotiations. In that connection, there is some scope under the Fly
America provision for the United States to offer access to Fly-America
traffic to our international aviation partners in exchange for benefits
for U.S. aviation interests, although I know of no case in which such
an exchange was entered into.
There are also competing considerations, however. First, the Fly
America requirement has undoubtedly delivered important benefits to
U.S. airlines. Second, as a former Vice President of the National
Defense Transportation Association and former Chairman of the NDTA's
Military Airlift Committee, I am fully aware of the importance the
Department of Defense attaches to Fly America as an incentive to CRAF
participation by U.S. carriers. In other words, there continue to be
divergent views on this issue that will have to be carefully considered
before we will be in a position to decide whether to offer Congress a
recommendation regarding the Fly America legislation.
Question 6. What is your position on changing the 25-percent
limitation on foreign investment in U.S. airlines?
Answer. As globalization of the airline industry and the growing
number of carrier alliances continue to strain the decades-old
limitations on foreign investment in U.S. airlines, this issue is sure
to receive increasing prominence. A change could open up new sources of
capital for U.S. airlines, strengthening their competitiveness, and
thus contributing to a more open global aviation regime. Again,
however, I am fully aware of countervailing considerations, such as the
possible implications of a change in the foreign investment ceiling on
our defense preparedness, that require careful analysis. My impression,
too, is that airline labor is generally opposed to permitting foreign
investors to own a more significant stake in U.S. airlines. Without
attempting to predict what the outcome of a public policy debate on the
continuing utility of foreign investment restrictions would be, I would
hope that we could have that debate at the appropriate time.
AIRLINE TICKET DISTRIBUTION ISSUES
Question 1. For each of the past few years DOT has extended the
current Computer Reservation System (CRS) rules for a year without
addressing the concerns that it raised about the rules' applicability
to Internet sales and other issues. Do you believe the CRS rules should
apply to Internet distribution of airline tickets?
Answer. Because the Department recognizes the importance of the
question of whether the CRS rules should be applied to the Internet
sale of airline tickets, the Department asked the parties in its
pending CRS rulemaking to comment on this issue. I understand that many
parties submitted comments on this issue to the Department over the
years, and they disagree on whether regulation is necessary. This is an
issue that needs to be decided, but I have not yet had an opportunity
to review their comments.
Question 2. When will DOT act to finalize changes to the CRS rules?
Answer. I know that Secretary Mineta views the issue as a priority
and has recently instructed the staff to move forward on the rulemaking
and develop a rulemaking proposal that can be forwarded to OMB. The
staff is currently at work on an NPRM. I fully expect that a final rule
will be issued--after comments on the NPRM have been digested--by mid-
2002.
SURFACE/MERCHANT MARINE
Question 1a. As you may be aware, last month the Amtrak Reform
Council (ARC) voted 6:5 making a ``finding'' that Amtrak will not meet
its statutory requirement of operational self-sufficiency by next
year's deadline (December 2, 2003). Have you had an opportunity to
review Amtrak's financial and operating performance?
Answer. I have reviewed Amtrak's financial and operating
performance in a general way. The company is still in very difficult
financial circumstances. Costs have increased faster than revenues and
capital needs for the current system are very large.
Question 1b. Given the Secretary's membership role on both the ARC
and the Amtrak Reform Board, does the Administration intend to submit a
rail passenger restructuring proposal or some type of proposal to
address Amtrak's severe financial situation, and if so, when?
Answer. The Department is working to develop a comprehensive
federal policy to guide the future of rail passenger service and the
financing of high-speed rail. Our aim is to have this policy ready when
we submit the FY 2003 budget early next year. After that the Department
intends to work with the Congress to develop a legislative package to
implement that policy. I look forward to being an active participant in
that process.
Question 2. Earlier this week, the Senate approved, without my
support, H.R. 2299, the DOT Appropriations Bill for fiscal year 2002.
That bill was an egregious overreach by the Appropriators in
redirecting the programmatic expenditures and directives under the laws
developed by the Authorizing Committees. There were more than $4.1
billion in earmarked projects ($1.2 billion in the conference report
and $2.9 billion in the statement of managers). It went so far as to
redirect nearly $1 billion in highway dollars that should have gone out
by formula to the states or allocated to the highway programs and the
money was used as a slush fund to earmark the Appropriators' home-state
projects. I want to ensure that each of you fully understands the
difference in the legal effect between report language and bill
language. Do you understand that report language is advisory only?
Answer. My first assignments with the Department were in its legal
office. The Committee can be confident that I do understand the
difference between statutory and report language, particularly when it
comes to the naming of specific projects. In such instances, only
statutory language is law; report language is not law but simply an
expression of Congressional interest. I know, furthermore, that the
Secretary has made this point clearly to his new management team.
Question 3. How do each of you envision your role, if confirmed,
with respect to the development and advocacy of policies promoting
transportation security?
Answer. As Under Secretary for Policy, I would expect to maintain a
close working relationship with the Under Secretary for Security. My
expectation would be to stay fully apprised of the work of the new
Transportation Security Administration (TSA) and to ensure that we miss
no opportunities to integrate more effective security measures into the
Department's organic programs. The forthcoming reauthorization of our
surface and air transportation programs will have to be undertaken with
a heightened attention to the security dimension and, if confirmed, I
would expect to be in a position to help coordinate the development of
appropriate security provisions in that legislation--again in close
cooperation with the Under Secretary for Security and the TSA. Finally,
the Department's international activities need to be heavily focused on
the need for more effective transportation security. It is self-evident
that a transportation security program focused exclusively on domestic
activities will not deliver the full measure of security that we must
have. New international protocols and a new level of international
cooperation and harmonization are urgently required if we are to
achieve the objective of a fully secure transportation system.
Question 4. Through much of the last century, our nation's maritime
policy was directed toward supporting our national defense needs. While
meeting our defense needs should and must remain a top priority,
changes in the global market and advances in the maritime industry have
clearly put new pressures on the industry that were not contemplated
during the development of many of the laws and regulations that form
our current maritime policy. What specific changes would you propose to
bring our nation's maritime policy in line with the maritime industry
of today?
Answer. The President and Congress have repeatedly affirmed the
need for a U.S.-flag international merchant fleet, a skilled American
mariner workforce, and U.S. shipbuilding and ship repair infrastructure
to assure the continued economic security and military readiness of the
nation. Although the United States today is the world's largest trading
nation, accounting for more than 24 percent of world ocean-borne trade,
the U.S. maritime industry continues to struggle to compete effectively
in international shipping and shipbuilding markets. If U.S.-companies
do not earn sufficient returns to cover costs and the continuing
investments required in this extremely capital-intensive industry,
these companies will not be able to competitively operate US-flag
vessels in a global market.
As Assistant Secretary for Policy and International Affairs during
the first Bush Administration, I served as Vice Chairman of the
Advisory Commission on Conferences in Ocean Shipping, and I worked
closely with then Secretary of Transportation Andrew Card on a program
that bore a strong resemblance to the later-enacted Maritime Security
Program. Ocean shipping issues have long been of personal interest to
me and of great concern.
In particular, I believe that we need to assess the options that
might be available in the near term. These options may include:
enhancements to the Maritime Security Program; the Voluntary Intermodal
Sealift Agreement programs; revisions to the cargo preference
regulations affecting the movement of food aid cargoes; and revisions
to the Capital Construction Fund program which might attract new
capital investment more effectively. We will also examine the U.S. tax
burdens on our merchant marine and maritime workforce relative to those
of their international competitors. By implementing a fair tax policy,
we would begin to promote cost parity with the rest of the shipping
world.
Question 5. As you may be aware, I prefer to eliminate restraints
on U.S. business competitiveness rather than provide subsidies that
remove incentives for businesses to find new ways to operate and
compete in the world market. I continue to believe that U.S. companies
are struggling to compete in the international maritime industry in
part because of the prevalence of subsidies by other flag-states. What
are your views on maritime subsidies? If confirmed, how would you
propose to help improve the competitiveness of the U.S. maritime
industry?
Answer. Let me preface my answer by saying that I am fully aware of
your long devotion to the cause of U.S. international competitiveness.
You can depend on the Department to be a staunch ally in the campaign
to eliminate barriers to U.S. transportation providers in international
markets.
Looking specifically at ocean shipping, it is certainly the case
that foreign government subsidies to national industries and
restrictions and barriers to free trade have hurt U.S. companies in
global markets. As long as foreign governments maintain policies that
distort or restrict market access, U.S. operators will operate at a
disadvantage compared to foreign flag shipping lines. We will continue
to press foreign governments to eliminate practices that distort the
operation of a free marketplace for shipping services and remove
restrictions and barriers on U.S. companies so that they can compete
fairly in the world market.
At the same time, we need to be cognizant of another distortion
that hurts U.S. operators. Like domestic rail and truck carriers and
all U.S.-based industries, U.S.-flag vessel operators incur ``U.S.
costs'' that their foreign competitors do not incur. I refer to burdens
associated with taxes, labor rules, INS requirements, and rules
relating to safety and the environment. If foreign-based shipping
companies doing business in the United States could be required to
comply with the same laws as American companies, the cost differential
between U.S. and foreign operators would largely disappear. Because the
United States cannot impose its cost structures on foreign operators,
however, we need to examine whether there might be approaches to
reducing the cost structure for U.S.-flag vessel operations that might
enhance the prospects for the long-term survival of the fleet.
______
Response to Written Questions Submitted by Hon. Ted Stevens
to Jeffrey Shane
Question 1. During the recent Transportation appropriations bill,
an amendment was accepted on the Senate floor that would have allowed
greater flexibility in transferring cargo shipments at Anchorage
International airport as long as all the carriers involved (both
domestic and foreign) had individually had rights to the final
destination point within the United States.
Initially, the Department told me that they were ``neutral'' on
that provision, but later decided that they needed to oppose it not
because they opposed the result, but that it needed to be done in a
``multilateral'' aviation negotiation. Do we have any multilateral
cargo aviation negotiations scheduled? Do we have any multilateral
passenger cargo negotiations scheduled?
Answer. Although, at the present time, the Department does not have
any multilateral aviation negotiations scheduled for cargo or passenger
operations, we are continuing our efforts to bring Open Skies to as
many countries as possible through our multilateral agreement that
Secretary Mineta signed with four other countries, New Zealand, Chile,
Brunei, and Singapore, in May 2001. This agreement is open for all
nations to join. Effective in April 2002, Peru will become a partner to
the agreement, and there is active coordination among the signatories
to obtain additional partners. The multilateral agreement contains all
the liberal elements of our bilateral Open Skies agreement,
particularly in the cargo area where seventh-freedom operations and
liberal cargo transfer operations are authorized.
In addition, I anticipate that the European Commission will
eventually receive a mandate from E.U. Member States to conduct
negotiations with the U.S. on a multilateral basis. The Department has
indicated that the U.S. is willing to discuss a potential E.U.-U.S.
agreement at that time. Such an agreement would have to build on the
open-skies bilateral relationships that the United States has already
established with most European Union countries.
Question 2. Do you believe that we should pursue liberalizing the
ability of airports and carriers to transfer cargo between and among
carriers if each of those carriers have the requisite rights to carry
that cargo to its final destination?
Answer. I recognize the economic importance to airports and
communities of air cargo operations, including the ability of carriers
to transfer cargo. Such matters are of particular importance to Alaska
because of its unique geographic characteristics.
The Department has taken a number of actions to enhance and
encourage cargo operations, and to facilitate the transfer of cargo
traffic in Alaska. At the state's request, the Department has twice
granted broad authorizations to U.S. and foreign carriers to permit
such operations to take place at airports in Alaska.
I, personally, have been committed, throughout my entire career in
aviation, to furthering liberalization of aviation services, and have
made it a personal priority to review existing policies to achieve that
end. For example, the cities program (which allowed extra-bilateral
service by foreign carriers to underserved U.S. cities) and the first
open skies agreement were developed during my tenure as Assistant
Secretary for Policy and International Affairs from 1989 through early
1993.
I believe that it is important to consider fully what further
liberalization may be accomplished to enhance economic benefits in the
State of Alaska, as well as in other communities throughout the United
States. In doing so, we must ensure full consideration of the impact of
our efforts on those communities, as well as our industry and other
affected parties. When international agreements are involved, we also
need to make sure that arrangements are fair and reciprocal.
Question 3. What role do you anticipate playing in the office of
the Secretary of Transportation vis-a-vis the Assistant Secretary for
Aviation and International Affairs, the Assistant Secretary for Policy,
and the Assistant Secretary for Budget and Programs?
Question 4. What are the line (management) responsibilities of the
office you've been nominated for?
Answer to Questions 3 and 4. As you know, although my current
nomination is for the position of Associate Deputy Secretary, it is
Secretary Mineta's hope that Congress will approve the reorganization
of DOT's policy function through the creation of a new position, Under
Secretary for Policy. The intention is that I would be appointed to
that position with the advice and consent of the Senate at which time
the Associate Deputy Secretary position would be abolished. This
response is addressed, therefore, to the role of the proposed Under
Secretary for Policy.
The Under Secretary would have Department-wide scope, serve as the
Secretary's principal policy advisor, and work closely with all
elements of the Department to ensure that the nation's transportation
programs are managed in an integrated and fully coordinated way.
As contemplated in Secretary Mineta's proposal, the Assistant
Secretaries for Transportation Policy and for Aviation and
International Affairs would report to a new Under Secretary for Policy.
The Under Secretary would be the main focal point for formulating and
evaluating new initiatives, developing the Department's views on
pending program reauthorizations and other key legislative proposals,
advising the Secretary on major regulatory and policy decisions, and
managing a long-range transportation policy development process that
draws continually and cooperatively on the Assistant Secretaries for
Transportation Policy and Aviation and International Affairs as well as
the Department's operating administrations.
Because the present position of Associate Deputy Secretary would be
abolished upon the creation of the new Under Secretary position, the
reorganization would not expand the Office of the Secretary.
Nevertheless, it is a structure that will enhance the Department's
ability to interact with stakeholders throughout the transportation
community. Secretary Mineta believes that the change will facilitate a
drawing together of the Department's resources in a way that will
enable the Department--in close cooperation with the Congress--to
develop and implement truly creative, forward-looking, and intermodal
responses to our nation's transportation requirements.
Question 5. As someone who has been in the international aviation
arena for the last 20 years, what are goals have you personally set for
next 2, 3, or 4 years for international aviation negotiations aviation?
Answer. The first objective must be to do all we can, both in
multilateral fora and bilaterally, to establish a regime that ensures
the security of international aviation. Although much has been
accomplished already in the aftermath of 9/11, the effort will have to
be focused and sustained over the long term. It is particularly
important that we encourage our trading partners around the world to
support initiatives recently undertaken within the International Civil
Aviation Organization to tighten security standards further and
establish a meaningful security audit program. We should reinforce
these themes and objectives in all of our bilateral negotiations.
Regarding the negotiation of international aviation economic
rights, the U.S. has pursued increasingly liberal aviation arrangements
with its trading partners over the course of the past 25 years. Our
current preferred model is Open Skies--a regime in which most of the
restrictions that characterized earlier, more traditional agreements
have been abolished. Open Skies agreements permit the airlines of
signatory countries to operate in keeping with commercial exigencies
rather than trying to game an artificially regulated market.
Although we have negotiated more than 50 Open Skies agreements with
like-minded countries, there are still some conspicuous exceptions--the
United Kingdom, Japan, China, and Hong Kong, to name four. My hope is
that the United States will redouble its efforts to bring these
important trading partners into a regime in which air transportation
can contribute more fully to economic growth both here and abroad.
Finally, I would hope to enter into more negotiations on a
multilateral basis in order to promote the benefits of the Open Skies
model more widely and more efficiently. As indicated above, we should
seek further signatories for the groundbreaking APEC agreement signed
early last year by Secretary Mineta. I also anticipate that we will be
able to conduct aviation negotiations with the European Union sometime
in the near future.