S. Rept. 113-115 - 113th Congress (2013-2014)
October 28, 2013, As Reported by the Homeland Security and Governmental Affairs Committee

Report text available as:

Formatting necessary for an accurate reading of this legislative text may be shown by tags (e.g., <DELETED> or <BOLD>) or may be missing from this TXT display. For complete and accurate display of this text, see the PDF.




Senate Report 113-115 - ACTIVITIES OF THE COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS




[Senate Report 113-115]
[From the U.S. Government Publishing Office]


113th Congress                                             Report
                                 SENATE 
 1st Session                                               113-115
_______________________________________________________________________



                     ACTIVITIES OF THE COMMITTEE ON

                         HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS


                               __________

                              R E P O R T

                                 of the

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                                and its

                             SUBCOMMITTEES

                                for the

                      ONE HUNDRED TWELFTH CONGRESS


<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


                October 28, 2013--Ordered to be printed
                                 _______

                         U.S. GOVERNMENT PRINTING OFFICE

  39-010                        WASHINGTON : 2013




        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                  THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota         JEFF CHIESA, New Jersey

                   Richard J. Kessler, Staff Director
               Keith B. Ashdown, Minority Staff Director
                     Laura W. Kilbride, Chief Clerk
                                 ------                                

  COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS DURING THE 
                             112TH CONGRESS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
JON TESTER, Montana                  ROB PORTMAN, Ohio
MARK BEGICH, Alaska                  RAND PAUL, Kentucky
                                 ------                                

                  SUBCOMMITTEES OF THE 112TH CONGRESS
  OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE 
                       DISTRICT OF COLUMBIA (OGM)

                   DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan                 RON JOHNSON, Wisconsin
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
MARK BEGICH, Alaska                  JOHN ENSIGN, Nevada
                                 ------                                

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, FEDERAL SERVICES, 
                    AND INTERNATIONAL SECURITY (FFM)

                  THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan                 SCOTT P. BROWN, Massachusetts
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              TED STEVENS, Alaska
CLAIRE MCCASKILL, Missouri           JOHN McCAIN, Arizona
MARK BEGICH, Alaska                  RON JOHNSON, Wisconsin
                                     RON PORTMAN, Ohio
                                 ------                                

             PERMANENT SUBCOMMITTEE ON INVESTIGATIONS (PSI)

                     CARL LEVIN, Michigan, Chairman
THOMAS R. CARPER, Delaware           TOM COBURN, Oklahoma
MARY L. LANDRIEU, Louisiana          SUSAN M. COLLINS, Maine
CLAIRE McCASKILL, Missouri           SCOTT P. BROWN, Massachusetts
JON TESTER, Montana                  JOHN McCAIN, Arizona
MARK BEGICH, Alaska                  RAND PAUL, Kentucky
                                 ------                                

AD HOC SUBCOMMITTEE ON DISASTER RECOVERY AND INTERGOVERNMENTAL AFFAIRS 
                                 (DRIA)

                   MARK L. PRYOR, Arkansas, Chairman
DANIEL K. AKAKA, Hawaii              JOHN ENSIGN, Nevada
MARY L. LANDRIEU, Louisiana          SCOTT P. BROWN, Massachusetts
JON TESTER, Montana                  RON JOHNSON, Wisconsin
                                 ------                                

           AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT (SCO)

                  CLAIRE McCASKILL, Missouri, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MARK L. PRYOR, Arkansas              SUSAN M. COLLINS, Maine
JON TESTER, Montana                  JOHN McCAIN, Arizona
MARK BEGICH, Alaska                  RAND PAUL, Kentucky







                                CONTENTS

                                 ------                                
                                                                   Page
  I. Introduction.....................................................1

 II. Highlights of Activities.........................................4

      Homeland Security..........................................     4
        A. Cybersecurity.........................................     4
        B. Ten Years After 9/11: Evaluating Post-9/11 Reforms....    11
        C. Homegrown Terrorism and Violent Islamist Extremism....    15
            1. Fort Hood Report..................................    15
            2. Countering Domestic Radicalization................    17
            3. Zachary Chesser Report............................    18
        D. Border Security and Immigration.......................    18
            1. The Southern Border...............................    18
            2. Deterring Terrorist Travel........................    20
            3. SBInet............................................    21
        E. Secret Service Scandal................................    21
        F. General DHS Oversight.................................    22
            1. Budget............................................    22
            2. High-Risk List....................................    23

      Stock Act..................................................    23

      Reforming the Postal Service...............................    24

      Government Oversight.......................................    26
        A. GSA Scandal...........................................    26
        B. Stimulus Tracking.....................................    26
        C. Nominations Reform....................................    27
        D. Information Technology................................    28
        E. GAO High-Risk List....................................    28
        F. Regulations...........................................    29

      Federal Employees..........................................    30
        A. Domestic Partnerships.................................    30
        B. Transportation Security Administration Employees......    30
        C. Employee Rotation.....................................    30
        D. Whistleblowers........................................    31
        E. Hatch Act Modernization...............................    31

      District of Columbia.......................................    32
        A. Opportunity Scholarship Program.......................    32
        B. District of Columbia Statehood........................    32
        C. D.C. Budget Autonomy..................................    32

      Helping Connecticut........................................    33
        A. Hurricane/Tropical Storm Irene........................    33
        B. Tropical Storm Sandy..................................    34

III. Committee Jurisdiction..........................................37
 IV. Bills and Resolutions Referred and Considered...................40
  V. Hearings........................................................40
 VI. Reports, Prints, and GAO Reports................................56
VII. Official Communications.........................................66
VIII.Legislative Actions.............................................66

        Measures Enacted Into Law................................    67
        Postal Naming Bills......................................    73
 IX. Presidential Nominations........................................75
  X. Activities of the Subcommittees.................................79

Federal Financial Management, Government Information, Federal Services, 
             and International Security Subcommittee (FFM)

  I. Hearings........................................................79

 II. Legislation.....................................................88

III. GAO Reports 2011-2012...........................................91

  Oversight of Government Management, the Federal Workforce, and the 
                District of Columbia Subcommittee (OGM)

  I. Hearings........................................................95

 II. Legislation....................................................105

        Measures Enacted Into Law................................   105

        Measures Which Did Not Advance Beyond Referral to 
        Subcommittee.............................................   109

III. GAO Reports....................................................110

             Permanent Subcommittee on Investigations (PSI)

  I. Historical Background..........................................113

        A. Subcommittee Jurisdiction.............................   113

        B. Subcommittee Investigations...........................   115

 II. Subcommittee Hearings during the 112th Congress................120

III. Legislation Activities during the 112th Congress...............131

 IV. Reports, Prints, and Studies...................................135

  V. Requested and Sponsored Reports................................151

Ad Hoc Subcommittee on Disaster Recovery and Intergovernmental Affairs 
                                 (DRIA)

  I. Hearings.......................................................162

 II. Legislation....................................................166

III. GAO Reports....................................................169

           Ad Hoc Subcommittee on Contracting Oversight (SCO)

  I. Hearings.......................................................170

 II. Legislation....................................................182




113th Congress                                                  Report
                                 SENATE
                                                                 
 1st Session                                                    113-115

======================================================================
 
                ACTIVITIES OF THE COMMITTEE ON HOMELAND
                   SECURITY AND GOVERNMENTAL AFFAIRS
                       DURING THE 112TH CONGRESS

                                _______
                                

                October 28, 2013.--Ordered to be printed

                                _______
                                

 Mr. CARPER, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                                 REPORT

    This report reviews the legislative and oversight 
activities of the Committee on Homeland Security and 
Governmental Affairs and its Subcommittees during the 112th 
Congress. These activities were conducted pursuant to the 
Legislative Reorganization Act of 1946, as amended; by Rule 
XXV(k) of the Standing Rules of the Senate; and by additional 
authorizing resolutions of the Senate. See Section II, 
``Committee Jurisdiction,'' for details.
    Senator Lieberman was Chairman of the Committee during the 
112th Congress; Senator Collins was the Ranking Member.
    Major activities of the Committee during the 112th Congress 
included legislation to strengthen the Nation's cybersecurity, 
to reform the U.S. Postal Service, and to bar Congressional 
insider trading; releasing an investigative report into the 
November 2009 Fort Hood shooting; and a series of oversight 
hearings on the progress of homeland security to mark the 10th 
anniversary of September 11, 2001. Discussion of these major 
activities appears in Section I below; additional information 
on these and other measures appears in Section VII, 
``Legislative Actions.''
    Extensive information about the Committee's history, 
hearings, legislation, documents, Subcommittees, and other 
matters is available at the Web site, http://hsgac.senate.gov/.

                            I. INTRODUCTION

    The 112th Congress began inauspiciously for legislative 
achievement. Just 2 years after President Obama was elected the 
first African-American president--a period during which 
Democrats controlled the presidency, the House, and the Senate 
for the first time since 1994--the 2010 mid-term elections 
turned the division of power, and the President's ability to 
enact his legislative agenda upside down. The House of 
Representatives fell back into Republican control after a 4-
year hiatus. In fact, more Republicans were elected to the 
House in 2010 than any election year since 1946. And while the 
Senate remained in the hands of Democrats, they lost the super 
majority of 60 votes they had enjoyed since 2008 and which had 
enabled them to push through ground breaking health care 
reform. The result was the most politically polarized Congress 
in memory.
    If the ideological division was not enough to dampen 
spirits, the economy provided little comfort. The previous 2 
years had seen the worst economic conditions in the United 
States since the Great Depression. Unemployment rose past 9 
percent. Multinational companies folded like houses of cards. 
Credit card defaults and home foreclosures occurred at record 
rates. The national debt and the deficit reached astronomical 
levels. By the 112th Congress, economic growth and business 
investments had begun ticking upward slowly, but the next 2 
years posed extreme difficulties for the working poor and 
middle-class Americans.
    Just days into the new Congress, another event contributed 
to the unforgiving mood that had descended upon the country. On 
January 8, 2011, Congresswoman Gabrielle Giffords, a sunny, up-
and-coming, middle-of-the-road Democrat from Tuscon, Arizona, 
was shot in the head at close range and critically wounded by a 
deranged constituent.
    Giffords survived, miraculously, but after she was shot, 
civil political discourse plunged, stripping bare the hostility 
that had been brewing between the two parties over the course 
of the Obama presidency. On an electoral map, Sarah Palin, 
former Vice Presidential Nominee, had placed targets over the 
congressional districts she hoped Republicans would win, 
including Rep. Giffords' seat. To add fuel to the fire, Ms. 
Palin used the incendiary term ``blood libel''--an anti-Semitic 
accusation that Jews killed Christian children for ritual 
sacrifice--to blame the media and defend her own fiery 
rhetoric.
    The lines were drawn. The mood was set. Agreement between 
the two parties, and thus legislative accomplishment, would be 
hard to come by for the next 2 years despite Chairman Joseph 
Lieberman's considerable political skills and record of 
bipartisan accomplishments. Congress' failure to pass a 2011 
budget on time nearly closed the government down. Its inability 
to raise the Nation's debt limit on a timely basis rocked the 
economy further, leading to a downgrade of the Nation's credit 
rating, and a worldwide loss of confidence in America's 
economic machine.
    The inability of the Committee on Homeland Security and 
Governmental Affairs (HSGAC) to find compromise on Chairman 
Lieberman's top legislative goals--cybersecurity and postal 
reform--played out for 2 years against this contentious 
backdrop. In the 111th Congress, the Committee had drafted and 
reported out legislation to secure the cyber networks of the 
country's most critical infrastructure--those life sustaining 
services that support our national and economy security on a 
daily basis, such as the power supply, water delivery systems, 
financial and transportation networks, and communications 
systems. The bill was revised and re-introduced in the 112th 
Congress. Senate Majority Leader Harry Reid asked the chairmen 
of several committees with jurisdiction over pieces of the 
bill--Intelligence, Commerce, Foreign Affairs, and Judiciary--
to negotiate an agreement that he could bring to the floor. 
Yet, despite 10 hearings on the issue since 2005, a markup, and 
countless hours of negotiations with Republicans, privacy and 
civil liberties groups, and industry, the bill's supporters 
were unable to overcome the opposition's claim that the bill 
would impose job-killing regulation on American business at 
precisely the moment businesses were beginning to recover from 
the 2008 financial crisis.
    The Chairman also worked relentlessly to reform the U.S. 
Postal Service (USPS) to stop the hemorrhaging of $50 million a 
day and place USPS on sound financial footing for the near 
future. Although the Senate approved a bill, the House never 
did. And geographic divisions doomed the bill when agreement 
between rural and urban lawmakers could not be reached to 
reduce postal delivery from 6 days to 5 days, eliminate postal 
processing plants, and shutter under-used post offices.
    The Committee did succeed in shepherding legislation 
through Congress to bar Members and their top staff from 
insider trading on information they obtain as part of their 
jobs. After ``60 Minutes'' broadcast a story about Members 
personally profiting from inside information, Congress handily 
passed the Stop Trading On Congressional Knowledge Act, or the 
STOCK Act, to prove to the public in an election year that 
Members of Congress work for the public good rather than 
private gain.
    Senators Lieberman and Collins also released the findings 
of their year-and-a-half long investigation into the November 
2009 shooting at Ford Hood, Texas, by Army Major Nidal Hasan. 
The investigation found multiple signs in the years leading up 
to the shooting that Hasan had been radicalizing to violent 
Islamist extremism--signs that were either ignored or not 
recognized for what they were by the Federal Bureau of 
Investigation (FBI) and the Department of Defense (DOD).
    The Committee also conducted a number of valuable oversight 
hearings marking the 10th anniversary of the September 11, 2001 
(9/11) terror attacks, the 5th anniversary of the Intelligence 
Reform and Terrorist Prevention Act, and the 10th birthday of 
the legislation creating the Department of Homeland Security. 
The hearings put into perspective how much better our homeland 
defenses are today and examined what remains to be done to 
close remaining gaps. And a series of border security hearings 
concluded with testimony that while fewer undocumented 
immigrants were crossing the line from Mexico into the 
southwest, the residents of the southwest did not feel safer.
    The Senator continued his advocacy for benefits for the 
domestic partners of Federal employees and on behalf of voting 
rights and budget autonomy for the people of the District of 
Columbia. And he continued to push for reauthorization of the 
U.S. Fire Administration and a series of homeland security 
grants that prepare local and State first responders with the 
training and equipment they need to protect their communities 
effectively.

                      II. HIGHLIGHTS OF ACTIVITIES

                           HOMELAND SECURITY

                            A. Cybersecurity

    Chairman Lieberman's efforts to pass cybersecurity 
legislation took center stage for the Committee in the 112th 
Congress. By 2011, cyber criminals, hostile nations, 
terrorists, and hacktivists posed an unprecedented threat to 
national security and the strength of our economy by targeting 
public and private networks, including critical infrastructure, 
defense systems, corporate records, and global communications. 
More than $1 trillion worth of intellectual property had 
already been stolen from American businesses. And military 
leaders were beginning to sound the alarm.
    On January 26, 2011, a place holder, leadership bill was 
introduced by Senators Patrick Leahy, D-VT, Carl Levin, D-MI, 
Jeff Bingaman, D-NM, John Kerry, D-MA, Jay Rockefeller, D-WV, 
Joe Lieberman, D-CT, and Dianne Feinstein, D-CA--all committee 
chairmen who had a stake in cybersecurity. At the time, 
Chairman Lieberman said: ``The future security of the American 
way of life depends on passage of comprehensive cyber security 
legislation that will provide the Federal Government with 
modern tools to secure and defend the Nation's most critical 
networks and assets.'' The legislation called for protection of 
the Nation's most critical infrastructure--the electric grid, 
the financial sector, financial and telecommunications 
networks, for example--those networks, which if disabled or 
destroyed, could jeopardize the economy or national security.
    When the Administration released its 2012 budget on 
February 14, 2011, the Senator praised the 17 percent, $67 
million increase for cybersecurity funding. The increase, he 
said, ``will enable the Department to better coordinate the 
security of critical cyber systems and information, which are 
under constant and increasing threat from foreign and domestic 
digital thieves and hackers.
    Later that month, on February 17, 2011, Chairman Lieberman, 
Ranking Member Susan Collins, and Senator Tom Carper introduced 
cybersecurity legislation specific to HSGAC's jurisdiction 
called ``The Cybersecurity and Internet Freedom Act,'' S. 413, 
to establish baseline security standards for critical 
infrastructure. Although it was based on the bill the Committee 
had marked up the previous Congress, the new bill was tweaked 
in an effort to dispel the gross canard that the legislation 
contained a ``kill switch'' allowing the President to ``turn 
off'' the Internet. Events in Egypt in late January, as 
President Hosni Mubarak was losing his grip on power, fueled 
the fire. News reports indicated that Mubarak had managed to 
shut down a number of networks that enabled Egyptians to 
communicate with one another about their opposition to his 
regime. A few online technology blogs compared the Senators' 
legislation to what was happening in Egypt.
    Senators Lieberman, Collins, and Carper protested. ``We 
would never sign on to legislation that authorized the 
President, or anyone else, to shut down the Internet. Emergency 
or no, the exercise of such broad authority would be an affront 
to our Constitution.''
    To dispel any doubts about the Senators' intentions, ``The 
Cybersecurity and Internet Freedom Act'' explicitly stated that 
``neither the President, the Director of the National Center 
for Cybersecurity and Communications or any officer or employee 
of the U.S. Government shall have the authority to shut down 
the Internet.'' It also provided an opportunity for judicial 
review of designations of systems and assets as ``covered 
critical infrastructure.''
    ``We want to clear the air once and for all,'' Senator 
Lieberman said. ``There is no so-called `kill switch' in our 
legislation because the very notion is antithetical to our goal 
of providing precise and targeted authorities to the President. 
Furthermore, it is impossible to turn off the Internet in this 
country. This legislation applies to the most critical 
infrastructures that Americans rely on in their daily lives--
energy transmission, water supply, financial services, for 
example--to ensure that those assets are protected in case of a 
potentially crippling cyber attack.
    ``The so-called `internet kill switch' debate has eclipsed 
discussion of actual, substantive provisions in this bill that 
would significantly improve the security of all Americans by 
creating a new national center to prevent and respond to cyber 
attacks, requiring critical infrastructure owners--for the 
first time--to shore up cyber vulnerabilities, and establishing 
a strategy to secure the Federal information technology (IT) 
supply chain. I look forward to working with Senator Reid to 
bring comprehensive cyber security legislation to the floor 
early this year,'' Senator Collins said.
    On May 12, 2011, the White House released a proposal of its 
own that overlapped significantly with the Committee bill and 
the previous extensive collaborations between the HSGAC and the 
Commerce Committee. Senators Lieberman, Collins, and Carper 
released a joint statement that said, in part, ``The Senate and 
the White House are on the same track to make sure our cyber 
networks are protected against an attack that could throw the 
Nation into chaos. We both recognize that the government and 
the private sector must work together to secure our Nation's 
most critical infrastructure, for example, our energy, water, 
financial, telecommunications, and transportation systems. We 
both call for risk-based assessments of the systems and assets 
that run that infrastructure. We both designate the Department 
of Homeland Security to lead this effort, with the assistance 
of other Federal agencies. And we both encourage the government 
and the private sector to use and refine best practices honed 
over years of experience.''
    On May 23, 2011, the Committee held a hearing on the White 
House proposal at which four witnesses--representing the 
Departments of Homeland Security, Defense, Commerce, and 
Justice--pledged their cooperation to find consensus on 
legislation to protect against catastrophic cyber attack on the 
Nation's critical infrastructure.
    ``If we do not do something soon, the Internet is going to 
become a digital Dodge City,'' Chairman Lieberman said. 
``Cyberspace is just too important to modern life to allow that 
to happen. It's time to say: `There's a new sheriff in town and 
we're going to have some law and order around here.' And we can 
do that without compromising liberty and privacy. This is not a 
partisan debate. It is a national security and economic growth 
debate.''
    As the year wore on, more and more companies made public 
the fact that they had been hacked--including companies with 
top notch cybersecurity, such as the internet security firm 
RSA, the military contractor Lockheed Martin, and the 
international giant Sony. Defense Secretary Leon Panetta 
weighed in during a December 11, 2011, speech at the Intrepid 
Sea, Air, and Space Museum in New York, warning of a ``cyber 
Pearl Harbor'' attacking the electric grid, transportation and 
financial systems, and government networks.
    The House Cybersecurity Task Force lent crucial support to 
the effort to pass a comprehensive bill when it released its 
findings on October 5, 2011. Specifically, the Task Force noted 
that Congress should consider carefully targeted directives for 
limited regulation for critical infrastructure cybersecurity. 
``The recommendations of the House Republican Cybersecurity 
Task Force are an important and positive step toward passing 
badly needed comprehensive cybersecurity legislation,'' Senator 
Lieberman said.
    Unfortunately, most Senate Republicans were boycotting 
negotiations with the committee chairmen of jurisdiction. But 
at the end of the year, Majority Leader Harry Reid announced 
that cybersecurity would be up for debate on the Senate floor 
in the first work period of 2012. However, that was not to be.
    The bill's prospects were boosted when President Obama 
weighed in on cybersecurity in his January 24, 2012, State of 
the Union address. Additionally, Director of National 
Intelligence James Clapper publicly stated that Iran, China, 
and Russia posed the greatest cyber threats to our Nation. This 
was the most serious warning yet from the intelligence 
community of the imminent threat the country faced.
    On February 14, 2012, building on the years of hard work 
and cooperation between their committees, Senators Lieberman, 
Collins, Rockefeller, and Feinstein introduced the next 
iteration of their bill--``The Cybersecurity Act of 2012,'' S. 
2105--based on agreements they had reached in negotiations the 
previous fall with representatives from the information 
technology, financial services, telecommunications, and energy 
sectors.
    Major players in the field of information technology--
Cisco, Oracle, TechAmerica, and EMC2--praised the legislation. 
National and homeland security leaders--Joint Chiefs of Staff 
Chairman Martin Dempsey, Defense Secretary Leon Panetta, and 
former Homeland Security Secretary Michael Chertoff--endorsed 
the bill. And more members of the military, intelligence, and 
homeland security communities would support the bill as the 
weeks wore on.
    The Cybersecurity Act of 2012 was similar in general 
outline to the Cybersecurity and Internet Freedom Act: The bill 
would require the Department of Homeland Security (DHS), in 
consultation with the private sector, the Intelligence 
Community, and others, to conduct risk assessments to determine 
which sectors were subject to the greatest and most immediate 
cyber risks.
    The bill would authorize the Secretary of Homeland 
Security, with the private sector, to determine cybersecurity 
performance requirements based upon the risk assessments. The 
performance requirements would cover critical infrastructure 
systems and assets whose disruption could result in severe 
degradation of national security, catastrophic economic damage, 
or the interruption of life-sustaining services sufficient to 
cause mass casualties or mass evacuations.
    The bill would only cover the most critical systems and 
assets if they were not already being appropriately secured. 
Owners of ``covered critical infrastructure'' would have the 
flexibility to meet the cybersecurity performance requirements 
in the manner they deem appropriate. The private sector also 
would have the opportunity to develop and propose performance 
requirements for ``covered critical infrastructure.''
    The bill came under scrutiny at the hearing on February 16, 
2012, that included as witnesses Senators Rockefeller and 
Feinstein; Department of Homeland Security Secretary Janet 
Napolitano; former DHS Secretary Tom Ridge; Assistant DHS 
Secretary for Management Stewart Baker; James A. Lewis, 
Director and Senior Fellow of the Technology and Public Policy 
Program at the Center for Strategic and International Studies; 
and Scott Charney, Corporate Vice President, Trustworthy 
Computing Group for Microsoft Corporation. Republicans 
announced at the hearing that they would introduce their own 
legislation, and while the Chairman expressed hope that 
Republicans were beginning to engage, he also expressed concern 
that partisan politics might get in the way of protecting the 
country's best interests.
    ``I am heartened that Republicans will offer their own 
cybersecurity proposal so that we can engage in rigorous debate 
and pass badly needed legislation this year,'' Senator 
Lieberman said, ``because to me it feels like it is September 
10, 2001. The system is blinking red--again. Yet, we are 
failing to connect the dots--again. We have come so far and in 
such a bipartisan way that we cannot allow this moment to slip 
away from us. We need to act now to defend America's cyberspace 
as a matter of national and economic security.''
    The first Senate work period of 2012 ended without floor 
debate and partisan divisions were becoming more prominent. On 
March 2, 2012, after reading a draft of the Republican bill, 
the four co-sponsors of the Cybersecurity Act issued a 
statement lamenting the GOP bill's focus on information sharing 
only. ``While we appreciate our colleagues' commitment to 
passing a cybersecurity bill, it is absolutely essential that 
legislation address the cyber vulnerabilities of our most 
critical infrastructure. The bill introduced Thursday does 
little to ensure that we improve the security of critical 
infrastructure--not even the security of those systems that 
could cause catastrophic harm and mass causalities if damaged 
by a cyber attack.''
    On March 27, 2012, the head of the military's Cyber Command 
and Director of the National Security Agency, General Keith 
Alexander, told the Senate Armed Services Committee that 
information-sharing among critical infrastructure owners and 
operators is not enough to protect their cyber networks against 
attacks from rival nations, criminals, terrorists, and 
hacktivists. Information sharing combined with security 
standards are needed to confront the growing cyber threat, 
Alexander said. He also agreed with the Cybersecurity Act 
cosponsors that DHS was the proper agency to collaborate with 
industry to secure the most critical cyber networks. ``I do 
think we have to have some set of standards,'' General 
Alexander said.
    Negotiations continued with stakeholders throughout the 
spring, and the bill gained additional support from IT 
companies such as Cisco and Oracle, and from 9/11 Commission 
Co-Chairmen Tom Kean and Lee Hamilton. But it was not brought 
to the floor in the second work period either.
    The House passed a number of smaller cybersecurity bills on 
April 27, 2012, that Senators Lieberman and Collins and the 
other cosponsors of the Cybersecurity Act of 2012 found 
inadequate. Although the bills mirrored some portions of the 
Senate provisions on information sharing, Federal network 
security, and cybersecurity research and development, they did 
not address the vulnerability of our most critical, privately-
owned infrastructure.
    In a statement, the chief co-sponsors of the Senate bill 
said: ``By leaving out protection for critical infrastructure--
our electric grid, water and sewer systems, transportation and 
financial networks--the House ignores the advice of our 
intelligence community, our national and homeland security 
leaders, as well as a number of prominent Republicans, 
including former Director of National Intelligence Mike 
McConnell, former Homeland Security Secretary Michael Chertoff, 
9/11 Commission Co-Chairman Gov. Tom Kean, and even President 
Ronald Reagan's chief economist Martin Feldstein, who serves as 
an outside advisor to the National Security Agency.''
    In May, the concept of baseline security standards for 
critical infrastructure received another important endorsement 
from a leading conservative legal scholar. On May 10, 2012, 
Harvard Professor Jack Goldsmith said critical infrastructure 
``is central to the security of the Nation,'' and security 
standards were needed to protect it from probes or attacks by 
hostile nations, terrorists, and other bad actors. Goldsmith 
served as Assistant Attorney General in the Administration of 
President George Bush and authored the book ``Terror 
President.'' In 2007, The New York Times Magazine said he was 
``widely considered one of the brightest stars in the 
conservative legal firmament.''
    The urgent need for legislation was reinforced once again 
on May 22, 2012, when an al-Qaeda video emerged calling upon 
the ``covert Mujahidin'' to commit ``electronic jihad.'' The 
video explicitly called for cyber attacks against the networks 
of both government and life-sustaining critical infrastructure, 
including the electric grid, and compared vulnerabilities in 
U.S. critical cyber networks to the vulnerabilities in our 
aviation system prior to 9/11.
    ``This is the clearest evidence we've seen that al-Qaeda 
and other terrorist groups want to attack the cyber systems of 
our critical infrastructure,'' Senator Lieberman said. 
``Congress needs to act now to protect the American public from 
a possible devastating attack on our electric grid, water 
delivery systems, or financial networks, for example. As 
numerous, bipartisan national security experts have said, 
minimum cybersecurity standards for those networks are 
necessary to protect our national and economic security.''
    On June 13, 2012, DHS provided a demonstration of just how 
easy it is to hack into the operating system of critical 
infrastructure, and Senator Lieberman went to the Senate floor 
to, once again, sound the alarm. ``Given the time left in this 
legislative session and the upcoming election this fall, we are 
concerned that the window of opportunity to pass legislation 
that is, in our view, critically necessary to protect our 
national and economic security is quickly disappearing.''
    The third Senate work period of 2012 ended before July 
Fourth with no floor action on the bill. But momentum was 
building.
    On July 10, 2012, General Alexander said publicly that the 
U.S loses billions of dollars each year because of cyber 
espionage and cyber crime, constituting the ``greatest transfer 
of wealth in history.'' Senator Lieberman responded, ``The 
General estimated that the United States loses $250 billion 
annually in intellectual property theft and $338 billion 
annually in financial theft. If those numbers do not argue for 
improving our cybersecurity--both in the public and private 
domains--I do not know what will.''
    But Republicans had dug in hard and were not budging in 
their opposition to security standards, which they said 
amounted to onerous regulation on businesses still recovering 
from 2 years of economic stress. Therefore, on July 19, 2012, 
Senator Lieberman and his co-sponsors, now including Senator 
Carper, again, introduced a revised version of ``The 
Cybersecurity Act,'' S. 3414--absent required security 
standards--in a good faith effort to secure enough votes to 
address the threat of cyber attack.
    ``This compromise bill creates a public-private partnership 
to set cybersecurity standards for critical American 
infrastructure, and offers the reward of some immunity from 
liability to those who meet those standards. In other words, we 
are going to try carrots instead of sticks as we begin to 
improve our cyber defenses. This compromise bill will depend on 
incentives rather than mandatory regulations to strengthen 
America's cybersecurity. If that does not work, a future 
Congress will undoubtedly come back and adopt a more coercive 
system.
    ``While the bill we introduced in February is stronger, 
this compromise will significantly strengthen the cybersecurity 
of the Nation's most critical infrastructure and with it our 
national and economic security.''
    On July 24, 2012, the prestigious Aspen Institute's 
Homeland Security Group--over half of whom were Bush 
Administration appointees--endorsed the revised, bipartisan 
cybersecurity legislation. ``The Aspen Homeland Security group 
strongly urges the Senate to vote this week to take up S. 3414, 
the cybersecurity bill, for debate on the floor. The country is 
already being hurt by foreign cyber-intrusions and the 
possibility of a devastating cyber attack is real.''
    The next day, Senator Lieberman returned to the floor of 
the Senate to argue on behalf of his legislation. ``First,'' he 
said, ``the threat of cyber attacks is a danger that is clear, 
present and growing, with enemies ranging from rival nations, 
to cyber-terrorists, to organized crime, to rogue hackers 
sitting at computers almost anywhere around the world.''
    ``Second: This bill is more than a decade in the making. I 
attended my first hearing on cybersecurity as a member of the 
former Senate Governmental Affairs Committee, under the 
leadership of Chairman Fred Thompson, back in 1998, and have 
been concerned about this growing threat ever since.''
    ``And third: The bill I hope we are about to begin debating 
is already the result of bipartisan compromise. My cosponsors 
and I did not get everything we wanted. In fact, we gave up 
some things we thought were vitally important to the bill. But 
given the threat, we thought it was important to move forward 
with a bill that will significantly strengthen our cyber 
security. We did not want to lose the chance to pass 
legislation this year that could help secure our Nation for 
decades to come, so we made big compromises.''
    On July 26, 2012, the day floor debate began, seven major 
information technology companies and industry groups announced 
their support for the Cybersecurity Act. They were Microsoft, 
Oracle, Cisco, CA Technologies, a global IT management and 
software company, EMC/RSA, an IT services company, the 
Information Technology Industry Council, a trade group, and the 
National Defense Industrial Association, also a trade group. 
The Senate agreed 84-11 to proceed to debate on the bill.
    The next day, General Alexander disclosed new figures on 
the frequency of cyber attacks, particularly on critical 
infrastructure. At an Aspen Institute security conference, 
General Alexander said attacks had increased 17-fold between 
2009 and 2011, with more and more targeted at critical 
infrastructure. General Alexander said the United States was 
unprepared for a major cyber attack and urged passage of 
legislation to improve the Nation's defenses. Three days later, 
Alexander wrote to the Senate's top Democratic and Republican 
leaders urging them to vote on cybersecurity legislation.
    Meanwhile, The New York Times, The Washington Post, and The 
Boston Globe all editorialized in favor of the Cybersecurity 
Act of 2012. But on August 2, when the Senate was asked to end 
debate on the bill so it could move toward a vote, it voted 52-
46 against the motion, eight votes shy of the 60 needed to 
overcome Republican opposition. Senator Reid switched his vote 
to ``Nay'' in a procedural maneuver to keep the bill on the 
legislative calendar in hopes that compromise could later be 
reached.
    Returning from the August break, Senator Lieberman 
continued to press for passage of the bill although by now it 
was clear that the bill had too steep a hill to climb. On 
September 19, 2012, at the Committee's annual terrorist threat 
hearing, FBI Associate Director Kevin Perkins noted that the 
Nation was facing ``increasingly complex threats'' to its 
cybersecurity, including from nation-states, organized crime 
groups, and hackers. He noted that these threats pose ``a 
significant risk to our Nation's critical infrastructure.''
    In the absence of Senate action, and the presence of a real 
and imminent threat, Senator Lieberman, along with two of his 
cosponsors, wrote to President Obama on September 24, shortly 
before Congress was to recess for the November elections, 
urging him to issue an executive order to better secure the 
Nation's most important cyber networks, particularly by 
conducting risk assessments of the most critical cyber 
infrastructure and establishing security standards.
    ``Of course, I hope and prefer that the Senate passes 
cybersecurity legislation and works with the House to get a 
bill to your desk before the end of this session,'' the Senator 
wrote. ``Though it is hard to be optimistic about the prospects 
of passing legislation in the lame duck session, I continue to 
work with my colleagues to find a bipartisan and bicameral 
compromise.
    ``But our Nation's security interests cannot be left 
inadequately protected because of special interest pressure. 
Therefore, I urge you to use the full extent of your 
authorities under the Constitution and those already given to 
you by Congress to protect the Nation from the real and growing 
threat of cyber attack.''
    After serious denial of service attacks against several 
U.S. banks and an attack on the Saudi Aramco oil company that 
was called the most destructive cyber attack against a private 
company in history. The end came, finally, on November 14, 
2012, when the Senate rejected a second chance to move forward 
on cybersecurity legislation that was supported by top-ranking 
members of the Nation's intelligence, national, and homeland 
security communities. By a vote of 51-47, nine short of the 60 
necessary, the Senate failed to approve a procedural motion to 
end debate on the bill, S. 3414, and move to a final vote.
    Senators Lieberman and Collins penned their last op-ed on 
cybersecurity, which appeared on the New York Times Web site on 
December 7, 2012, the anniversary of the attack on Pearl 
Harbor. ``On this anniversary of the Pearl Harbor attack,'' 
they wrote, ``it's worth remembering that enemies will attack 
at a time of their choosing. In fact, they rely on surprise. A 
storm is surely gathering again, and we must resist the false 
sense of calm. The attack is not a matter of if, but when. It 
will not be launched from aircraft carriers, missile silos or 
massed armies. It will come through cyberspace. The new 
Congress must take up this issue, and pass comprehensive 
legislation to defend our Nation against this gathering cyber 
threat. If it does not, the day on which those cyber weapons 
strike will be another `date which will live in infamy,' 
because we knew it was coming and did not come together to stop 
it.''

         B. Ten Years After 9/11: Evaluating Post-9/11 Reforms

    To mark the 10th anniversary of the 9/11 terror attacks, 
the Homeland Security and Governmental Affairs Committee 
launched a series of hearings to examine the Nation's 
counterterrorism efforts over the past decade in order to build 
upon reforms that have worked and to improve those that have 
not.
    The inaugural hearing, on March 20, 2011, titled ``Ten 
Years After 9/11: A Report from the 9/11 Commission Chairmen,'' 
presented an overview of the gains that have been made to 
protect the American people from terrorist attacks and the work 
that remains before the 9/11 Commission recommendations of 2004 
have been fulfilled.
    ``Since the 9/11 Commission reforms were adopted, we have 
had many successes in our battles with terrorists, many plots 
broken, and planned attacks thwarted,'' said Chairman 
Lieberman. ``And we've also had some tragic failures. We must 
continue to learn from our successes and our failures so we are 
not just reacting to the last attack or attempted attack but 
are taking the fight to our enemies.''
    The second hearing was held on May 12, and titled ``Ten 
Years After 9/11: Is Intelligence Reform Working, Part I,'' was 
called to examine implementation of national security reforms 
made after 9/11 and where improvement was needed. The Chairman 
praised the intelligence community for its role in locating 
Osama bin Laden but questioned whether that level of 
cooperation was common across the board, as envisioned by 
intelligence reform legislation Senators Lieberman and Collins 
authored.
     ``When the target is not at this high level, the evidence 
about improved functioning of the Intelligence Community is 
mixed,'' the Chairman said. ``We need to ensure that the 
shoulder-to-shoulder cooperation we saw in the hunt for bin 
Laden is being applied to all those lurking in the shadows 
planning fresh attacks, because the death of bin Laden does not 
mean the death of al-Qaeda or Islamist terrorism. And the 
threat of homegrown, lone wolf terrorists--like Hasan--is 
growing. Our revamped intelligence community must take on these 
challenges and more.''
    The third hearing, on May 19, 2011, was a continuation of 
the second hearing.
    The fourth hearing, on June 22, did not carry the ``Ten 
Years After'' title, but was considered part of the 9/11 
series. Its title was, ``See Something, Say Something, Do 
Something,'' and the hearing focused on the vulnerabilities 
that still exist in rail transit security. ``We must continue 
to work with travelers to make them full partners in securing 
our rail and transit systems,'' the Senator said. ``This 
includes educating them about risks, how to report suspicious 
activity, and how to respond and recover should an attack 
occur. Speed, reliability, and convenience are hallmarks of 
mass transit. But with so many passengers at so many stations, 
along so many routes, these systems are very difficult to 
secure. It is simply not possible to install permanent 
aviation-level security checkpoints without impeding the flow 
of traffic. But there is much more the Transportation Security 
Administration (TSA) can and should do and more that State and 
local governments and transit agencies can and should do.''
    Although rail and transit security is primarily the 
responsibility of State and local law enforcement and rail 
operators, TSA has a critical role to play. Among the steps the 
Senator said should be taken:

    
 LTSA must fulfill a 2007 legislative requirement 
to develop uniform standards for rail and transit training 
programs, for background checks for frontline employees, and 
for transit agencies' security plans.
    
 LThe Department of Homeland Security must step up 
its efforts to develop creative, non-intrusive security 
solutions--especially to detect improvised explosive devices, 
which history has shown are the weapon of choice for disrupting 
rail and transit systems.
    
 LTSA must improve its intelligence sharing with 
State and local officials, and the private sector.
    
 LAll stakeholders should conduct more exercises to 
accustom rail and transit officials to the unique requirements 
of disaster prevention and response involving trains.
    
 LMake passengers full partners in rail and transit 
security, educating them about risks, how to report suspicious 
activity, and how to respond should an attack occur--without 
alienating them.

    The fifth hearing, titled ``Ten Years After 9/11: 
Preventing Terrorist Travel,'' was held on July 13, 2011. 
Chairman Lieberman pressed Administration officials about 
continuing gaps in our defenses against terrorist travel, 
including inadequate security in visa processing, a large 
backlog of visa overstays in this country, and our failure to 
implement biometric information-sharing programs with our 
allies.
    ``Denying terrorists the ability to travel to our country 
from abroad and attack us was one of the fundamental 
recommendations made by the 9/11 Commission,'' the Senator 
said. ``We have come a long way since 9/11 in preventing 
terrorist travel but we have much work to do to close remaining 
gaps.
    ``Implementation of the program at overseas consular 
offices that requires all visa applicants to be investigated is 
seriously lagging. The Department of Homeland Security and the 
State Department have identified 57 high-risk posts abroad, but 
of the 20 highest risk posts only nine have criminal 
investigators to provide an added layer of security to the visa 
issuing process.
    ``Only half of the countries whose citizens need no visa to 
enter the United States have signed electronic biometric 
information-sharing agreements required to participate in the 
Visa Waiver Program, and none of these agreements has actually 
been implemented.
    ``And, implementation of U.S. VISIT's exit system has been 
one of our biggest failures, leading to large backlogs of 
potential overstays and uncertainty about whether people have 
left the country. I am heartened that most of this backlog has 
been cleared in response to a our previous questions about it 
but I question why it took so long
    ``We will never achieve 100 percent security but we must 
continue our work to improve these shortcomings.''
    On July 27, the Committee held its sixth hearing in the 
series, ``Ten Years After 9/11: Improving Emergency 
Communications.'' The Committee was told that first responders 
need a 21st Century communications system that includes 
dedicated bandwidth to make the most out of new and future 
information technologies that will maximize performance and 
help save lives.
    Chairman Lieberman and Senator John McCain had introduced 
legislation to dedicate the so-called D-Block bandwidth to 
first responders. A similar bill was also reported out of the 
Commerce Committee.
    ``We've made a lot of progress toward interoperability for 
first responders and in strengthening the operability of 
communications networks and systems,'' Senator Lieberman said. 
``The public should have an increased sense of confidence in 
that. But in an age when the weather, not to mention extremist 
and terrorist groups, is so unpredictable, dedicated spectrum 
is essential. If the D-Block legislation passes, that would be 
a giant leap forward for the ability of first responders to do 
what we ask and need them to do every day in cities and States 
across the country. Senator Reid has included the D-Block 
reallocation in his debt reduction plan, which means we have an 
opportunity within the next week to finally, and fully, fulfill 
the 9/11 Commission's recommendation on interoperability.''
    The seventh hearing in the series, on September 7, 2012, 
was called ``Successful Reforms and Challenges Ahead at the 
Department of Homeland Security.
    The eighth hearing called ``Ten Years After 9/11: Are We 
Safer,'' was held on September 13 and substituted for the 
Committee's annual terrorist threat hearing. Homeland Security 
Secretary Napolitano, FBI Director Robert Mueller and National 
Counterterrorism Center Director Matthew Olsen agreed that 
while al-Qaeda's leadership has been degraded, the terrorist 
threat was more ``complex and diverse'' than it was 10 years 
ago, and that violent Islamist extremists working by themselves 
in this country, perhaps U.S. citizens, posed a particular 
threat.
    ``The 9th anniversary of 9/11 did not get the kind of 
attention we saw from the media last week. And neither will the 
11th,'' Senator Lieberman said. ``And even though we were 
reminded with fresh threat warnings over the past few days, 
there is evidence that America is already beginning to forget 
how real the threat of Islamist extremism really is.
    ``In some ways we may be the victims of our own success 
because there has not been another mass-casualty terrorist 
attack on American soil since 9/11--something that, 10 years 
ago, no one would have predicted. So the question we ask today 
is not `are we safer?'--it is evidently clear we are safer--but 
`are we doing enough to stay safe?'''
    The ninth hearing on October 12, ``Ten Years After 9/11: A 
Status Report on Information Sharing,'' featured witnesses who 
agreed that while the pre 9/11 obstacles to information sharing 
have largely been eliminated, several key challenges remain, 
including clarifying intelligence agencies' policies with 
respect to U.S. citizens and maintaining funding for activities 
that support State and local information sharing, including 
fusion centers. Several witnesses touched on the need to 
address privacy concerns. Former Deputy Central Intelligence 
Agency (CIA) Director John McLaughlin noted that fear of 
violating rules protecting the privacy of U.S. citizens can 
lead intelligence agents to err on the side of not pursuing 
questionable intelligence. Senator Lieberman said this needs to 
be resolved, given the increased numbers of Americans engaged 
in homegrown terrorism over the past few years.
    ``Just yesterday, we witnessed the stunning outcome of 
brilliant information sharing when the Department of Justice 
announced it had uncovered a plot to assassinate the Saudi 
ambassador to the United States here in the United States,'' 
Senator Lieberman said. ``This is just an example of how 
barriers to information sharing have been taken down, 
significantly improving the quality and quantity of 
information. We have seen this, not just yesterday, but in 
game-changing military and counterterrorism successes, such as 
the military operations that killed Osama bin Laden and Anwar 
al-Awlaki. So, we have built a strong foundation but we are not 
finished building the complete structure.''
    The tenth hearing in the series, ``Ten Years After 9/11 and 
the Anthrax Attacks: Protecting Against Biological Threats,'' 
held on October 18, 2011, found the Nation more prepared for a 
biological attack or a naturally occurring pandemic than it was 
10 years ago through creation of new disease surveillance 
systems, new vaccines, and new ways to analyze and characterize 
threats. But experts told the Committee that the ability to 
treat people effectively could be hampered by an understaffed 
public health care system, an absence of countermeasures to 
many threats, and an insufficient ability to rapidly distribute 
therapeutics to a mass population.
    ``Over the past decade, we have spent billions of dollars 
on bio-defense research; on strengthening first responder 
capabilities; and on developing new vaccines, bio-surveillance 
systems, and forensic science techniques,'' Senator Lieberman 
said. ``Really we've done a lot more than the average American 
knows about to protect their security.
    ``But it is also clear from reports that we are not 
prepared for a catastrophic biological incident. We are much 
better prepared for a smaller weapons of mass destruction (WMD) 
attack although gaps remain there too. We lack a strategy for 
dispensing vaccines and antibiotics in a mass crisis and tight 
budgets have led to an under-staffed medical surge force to 
respond to a biological attack in communities around the 
country.''
    The final hearing in the series was held November 2, 2011, 
and was called ``Ten Years After 9/11: The Next Wave in 
Aviation Security.'' Senator Lieberman concluded that the 
strict, layered security measures the Transportation Service 
Administration requires at airport checkpoints were still 
necessary given what those checkpoints turn up every day.
    TSA Administrator John Pistole told the Senators that four 
to five guns are discovered at checkpoints around the country 
on a daily basis.
    ``But those security measures and TSA's limited resources 
need to be targeted more directly at passengers who pose the 
greatest risk,'' Senator Lieberman said. ``TSA also needs to 
think creatively about better uses of technology and 
information in the screening process. When you tell us four or 
five weapons are found in carry-on luggage every day, we are 
reminded why TSA's security efforts are so essential. What TSA 
officers do at airport security checkpoints is for the security 
of the general public. We want you to carry out your mission in 
the most cost effective and technologically progressive way you 
can.''

         C. Homegrown Terrorism and Violent Islamist Extremism

                          1. Fort Hood Report

    After more than a year of investigating the Fort Hood 
massacre, Chairman Lieberman and Ranking Member Collins on 
February 3, 2011, released their report, ``A Ticking Time Bomb: 
Counterterrorism Lessons from the U.S. Government's Failure to 
Prevent the Fort Hood Attack.'' The report concluded that the 
November 5, 2009, terrorist attack, which took the lives of 13 
people and wounded scores more, could have been prevented.
    The report found that accused killer Nidal Hasan's growing 
drift toward violent Islamist extremism (VIE) was on full 
display during his military medical training, although his 
superiors took no punitive action. Two of his associates said 
he was a ``ticking time bomb.'' He had defended Osama Bin Laden 
and suggested Muslim Americans in the U.S. military might be 
prone to commit fratricide.
    But, a slipshod Federal Bureau of Investigation 
investigation into Hasan before the shootings coupled with 
internal disagreements and structural flaws in the agency's 
intelligence operations also contributed to the government's 
failure to prevent the attack.
    The report found ``compelling evidence that Hasan embraced 
views so extreme that he did not belong in the military.'' It 
also found that FBI organizational problems impeded the 
agency's full use of intelligence analysts, concluding that the 
FBI's ``transformation into an intelligence driven, domestic 
counterterrorism organization needs to be accelerated.''
    The Department of Defense and the FBI ``collectively had 
sufficient information necessary to have detected Hasan's 
radicalization to violent Islamist extremism but failed both to 
understand and to act on it,'' the report states. ``Our 
investigation found specific and systemic failures in the 
government's handling of the Hasan case and raises additional 
concerns about what may be broader systemic issues.''
    The report recommended ways to strengthen our defenses 
against homegrown terrorism, including by adding to the 
Department of Defense policies against extremism among service 
members the specific category of violent Islamist extremism. 
This is too important to be subsumed within policies aimed at 
``violent extremism'' in general or ``workplace violence,'' the 
report said.
    Two weeks after release of the report, the Committee held a 
hearing on February 15, 2011, to examine the findings and 
recommendations contained in the Senators' report. Chairman 
Lieberman and Ranking Member Collins asked expert witnesses for 
their views on how to combat the ideology that fuels violent 
Islamist extremism and how to correct the negligence, missed 
communications, and failure to share information at the two 
Federal agencies leading up to the attack.
    A former top Homeland Security intelligence officer noted 
that the U.S. Intelligence Community does not even have 
``minimum essential requirements'' for how to collect 
information about violent Islamist extremism. The internet 
provides a virulent message to susceptible people all day, 
every day, he said, and ``for us to not call it for what it is 
and deal with it directly will be more damaging in the long 
run.''
    Former four-star Army General Jack Keane--who was involved 
in an investigation of racial extremism in the Army--said that 
racial extremism has been brought under control because 
military commanders, officers, and enlisted men and women were 
trained how to recognize that particular brand of extremism and 
how to contend with it. ``Take the burden off the soldiers and 
officers and make it a duty to report it,'' he urged.
    And former FBI Deputy Director of National Security Phillip 
Mudd called homegrown terrorism a ``metastasized threat'' that 
requires more involvement by State and local law enforcers who 
can detect activity in their jurisdictions early on. ``The 
police, the FBI, the CIA, and the Department of Homeland 
Security should all be training together,'' he said.
    Less than one month later, the Army disciplined nine 
officials, sending a clear message to everyone that the Army 
will not tolerate such negligence and passivity in reaction to 
clear signs that a soldier is radicalizing to violent Islamist 
extremism. On March 10, 2011, Senators Lieberman and Collins 
reacted to the discipline. ``Our Fort Hood report documents 
Major Nidal Hasan's drift towards violent Islamist extremism 
and the poor judgment of his superiors who failed again and 
again to take disciplinary action against him,'' Senator 
Lieberman said. ``Unbelievably, they distorted his 
radicalization into an advantage for the Army and the United 
States. The FBI relied on these reports to conclude Hasan was 
not a threat, when, in fact, he was a traitor and a terrorist. 
The discipline which the Army has imposed on these nine of 
Hasan's superiors will send a clear message to everyone that 
the Army will not tolerate such negligence and passivity in 
reaction to clear signs that a soldier is radicalizing to 
violent Islamist extremism.''
    On July 19, 2012, Chairman Lieberman and Ranking Member 
Collins responded to the declassified version of the report 
from the independent investigation led by former FBI Director 
William Webster on the causes of the Fort Hood shooting.
    The Webster report reinforced many of the same conclusions 
reached by the Senators. But they were concerned that the 
report failed to address the specific cause for the Fort Hood 
attack: violent Islamist extremism. They were also skeptical 
that FBI analysts had become well-integrated into the FBI's 
operations, as the report stated.
    The Senators appreciated that, for the first time, the 
report declassified the communications between Nidal Hasan and 
Anwar al-Awlaki so that all Americans, especially the families 
of the victims, could understand Hasan's radicalization and the 
full scale of the tragedy for which he was responsible.

                 2. Countering Domestic Radicalization

    On August 3, 2011, Chairman Lieberman and Ranking Member 
Collins reacted to the Administration's release of a national 
strategy to counter violent Islamist extremism.
    The Administration strategy outlined a community-led 
approach to combating VIE, with the Federal Government playing 
a significant role in fostering partnerships, providing support 
and sharing information, and helping to build trust between 
local Muslim American communities and law enforcement. It 
reaffirms a commitment to promote American ideals as a counter-
narrative to the bankrupt ideology of Islamist extremists. And 
it highlights a concern the Senators have raised recently about 
the need for effective counterterrorism training that 
distinguishes violent Islamist ideology from the peaceful 
practice of Islam.
    However, the Senators were concerned that the strategy did 
not designate a lead agency to ensure accountability and 
effectiveness, identify violent Islamist extremism as the main 
cause of the homegrown terrorist threat, or address the 
challenges posed by the Internet, which has been a major source 
for the radicalization, recruitment, and mobilization of recent 
homegrown Islamist extremists. On September 12, 2011, the 
Senators sent a letter to deputy National Security Advisor John 
Brennan detailing their disappointment with the plan.
    On December 7, 2011, the Committee held its first joint 
hearing with the House Homeland Security Committee. Members 
examined the threat of homegrown terrorism to military 
communities inside the United States and vowed to change the 
law so domestic military victims of violent Islamist extremism 
can be awarded the Purple Heart.
    The only Americans who have lost their lives in terrorist 
attacks on the homeland since 9/11 and the anthrax attacks have 
been killed at U.S. military facilities. Private William Long 
was the first soldier shot and killed in the United States, by 
violent Islamist extremists, outside a Little Rock, Arkansas, 
recruiting station June 4, 2009. In addition, 12 other soldiers 
and one civilian were killed at Fort Hood on November 5, 2009, 
bringing the total of domestic military victims of violent 
Islamist extremism to 14.
    Chairman Lieberman and House Homeland Security Committee 
Ranking Member Bennie Thompson, vowed to work with the rest of 
the conferees to change the law so Private Long and the victims 
of the Fort Hood attack can receive the Purple Heart medal.

                       3. Zachary Chesser Report

    After 6 years of investigating, reporting on, and educating 
the public about the phenomenon of homegrown terrorism and 
violent Islamist extremism, the Committee zeroed in on a 
specific case in the 112th Congress. On February 27, 2012, the 
Committee issued a staff report detailing the internet 
radicalization of a homegrown terrorist and the inadequacy of 
U.S. policy to counter online radicalization. The report 
presented a classic case study of how quickly online 
radicalization can occur compared to the traditional process of 
face-to-face contact between an aspirant and an established 
terrorist group.
    In the case of Zachary Chesser, a young Virginia man now 
serving 25 years on terrorism related charges, the trajectory 
from high school graduate to incarcerated felon occurred in 
just 2 years.
    Committee staff corresponded with Mr. Chesser over a 3-
month period from August through October 2011 and included four 
of those hand-written letters in the report. Chesser's 
extensive online writings also were analyzed closely. He was a 
member of and contributed to at least six terrorist online 
sites, created three YouTube terrorist propaganda channels, 
managed at least two Twitter accounts and a Facebook page, and 
authored two blogs advocating violent Islamist extremism.
    The report offered two recommendations: It called on the 
Federal Government to develop a strategy aimed specifically at 
global internet radicalization and propaganda. ``The U.S. 
Government needs a comprehensive internet strategy to address 
online radicalization that integrates activities across the 
State Department, the Defense Department, the Department of 
Homeland Security, the FBI, and other agencies into a single, 
coherent approach--while vigilantly respecting the First 
Amendment rights of all Americans,'' the report concluded.
    The report also recommended the Federal Government develop 
a ``whole of society'' approach to countering violent Islamist 
radicalization that includes ``how to facilitate community 
intervention by family, friends, and community and religious 
leaders supported by Federal, State, and local government 
resources. In addition, the U.S. Government should strengthen 
its ability to assist Muslim American communities seeking to 
address and counter radicalization online.''

                   D. Border Security and Immigration

                         1. The Southern Border

    In 2011, Chairman Lieberman held a series of hearings on 
the Nation's Southern Border violence due to drugs, human 
trafficking, and illegal immigration. On March 30, 2011, the 
first in a series of hearings was held to discuss an objective 
definition of successful border security.
    Expert witnesses tried to determine the effect of a decade-
long increase in border security spending, what the goal should 
be for security along the border, and the meaning of recent 
decreases in the apprehensions of illegal immigrants.
    ``We have spent a lot of money on securing the border over 
the past decade,'' said Senator Lieberman. ``And we have made 
significant gains in security as a result of this investment. 
We are having these hearings to find common ground about what 
more needs to be done and to build consensus about how we can 
achieve the ultimate goal of providing a secure environment for 
our citizens along the border. An important part of securing 
the border also involves addressing the fact that most people 
endanger their lives crossing the border illegally to find 
work. And we must recognize that 40 percent of illegal aliens 
in this country entered legally and then overstayed their 
visas.''
    On April 7, 2011, Senators Lieberman and McCain heard 
testimony directly from those on the frontlines on the struggle 
to secure the Southern Border. Testimony regarding the 
effectiveness of border security was mixed, with some witnesses 
saying that border security had improved and that illegal 
border crossings were down. But one witness said drug and human 
trafficking across his Arizona county remained out of control. 
Although progress is occurring, there remain steps that need to 
be taken to restore a sense of security to the communities at 
the Southern Border. Thirty-five percent to 45 percent of 
illegal immigrants entered the United States on valid visas, 
but have continued to stay here even after their visas expires. 
Many illegal immigrants did not enter the United States by 
crossing the border from Mexico, a problem when trying to 
combat illegal immigration. The Committee hearing found that 
there needs to be better ways to measure border control in 
order to increase the chance of effectively stopping the 
illegal immigration problem.
    On May 3, 2011, the Committee held a hearing to address the 
number of illegal immigrants who entered the country legally 
but overstayed their visas. A Government Accountability Office 
(GAO) report found that 40 percent to 45 percent of the total 
population of illegal immigrants--4 to 5 million people--stayed 
past their visa expiration dates. The population is a national 
security risk demonstrated by the fact that five of the 9/11 
hijackers overstayed their visas. Identifying individuals who 
have overstayed their visas is of critical importance to 
national security; 36 of the roughly 400 people convicted of 
terrorism-related charges since September 2001 had overstayed 
their visas. The U.S. VISIT program, which is supposed to 
identify people who have potentially overstayed their visas, 
cannot keep up with the growing number of potential overstays.
    In addition to the trouble DHS has identifying people that 
overstay their visas, Immigration and Customs Enforcement (ICE) 
only devotes 3 percent of its investigative man hours to 
tracking down immigrants whose visas have expired. The Senator 
requested that Secretary Napolitano updates the DHS's progress 
on this vulnerability in the county's national security.
    Senator Lieberman wrote to Attorney General Eric Holder and 
Office of Management and Budget (OMB) Director Jack Lew on May 
17, 2011, in support of a proposal to require gun dealers in 
Southwest Border States to report multiple sales of certain 
semi-automatic rifles.
    Senator Lieberman called the policy ``a critically 
important investigative tool'' in efforts to stem the flow of 
weapons into Mexico ``without restricting the 2nd Amendment 
right of lawful purchasers'' to buy firearms.
    The Bureau of Alcohol, Tobacco, and Firearms (ATF) has 
announced it will require Southwest Border State gun dealers to 
report for an initial period of 6 months multiple sales of 
semi-automatic, .22 caliber or greater rifles that are capable 
of accepting detachable magazines.
    In hearings held over the years before the Committee, 
witnesses testified that the shipment of guns purchased in the 
United States into Mexico is a critical component to border 
violence. GAO has reported that between 2004 and 2008, 70 
percent of guns seized and traced by Mexican officials were 
purchased in Southwest Border States. Guns purchased in the 
United States have also been used to slaughter our own law 
enforcement officers.
    On February 15, 2011, two Immigration and Customs 
Enforcement agents were shot in Mexico City. One died from his 
wounds, and it would later be revealed that he was killed with 
a gun that had been returned in the ill fated Justice 
Department Operation Fast and Furious, which tried to trace 
illegally purchased guns.
    ``The tragic death of an ICE agent in Mexico City--and the 
wounding of another--is the latest reminder of the grievous 
violence south of our border that must be stopped. I am 
grateful to the many Federal agents who serve our country in 
dangerous circumstances every day. My thoughts and prayers are 
with the families of today's victims in their moment of 
heartbreak,'' said the Chairman.

                     2. Deterring Terrorist Travel

    On May 10, 2011, the Senators joined with the Chairman and 
Ranking Member of the House Homeland Security Committee to 
introduce matching resolutions in their respective houses 
emphasizing the importance of sharing airline passengers' names 
with other countries to deter terrorist travel, sending a 
message of disapproval of European Union (EU) efforts to weaken 
an existing data-sharing agreement with the United States. The 
move was in response to EU efforts to reopen negotiations on an 
agreement signed by the EU and the United States in 2007 to 
share passenger name record (PNR) data. The agreement was 
intended to remain in effect until 2014.
    This agreement allowed Customs and Border Protection (CBP) 
to begin pre-screening international flights against terrorism 
databases 72 hours before the flights are scheduled to depart. 
Data collected from the airlines' PNR systems have contributed 
to terrorism investigations and to the arrests of Times Square 
bomber Faisal Shahzad and David Headley, who helped mastermind 
the 2009 Mumbai attacks.
    ``We know from hard experience that terrorists are still 
trying to use airplanes as weapons to strike out at the 
American people, and thus, we should be doing everything we can 
to keep terrorists off airplanes in the first place,'' Senate 
Lieberman said. ``Accessing PNR data enables us to deny 
terrorists the ability to wage war on innocent air travelers, 
and I urge the Federal Government to accept no changes to our 
current agreement with the European Union if those changes 
impede on our ability to protect our citizens.''
    On May 11, 2011, the Committee reported out the resolution, 
S. Res. 174, and the Senate cleared it on May 18. ``The botched 
Christmas Day attack in 2009 and the failed efforts last year 
to blow up planes with bombs loaded on as cargo remind us that 
terrorists still want to use airplanes as weapons of mass 
destruction against us,'' Senator Lieberman said. ``Sharing 
passenger names is an important part of our layered defenses 
against terrorism and is an effective way to keep terrorists 
off planes. PNR data has contributed to the arrests of at least 
two terrorists since the current agreement with the EU was 
signed. We simply cannot accept changes to the agreement that 
could limit our ability to identify and arrest terrorists or 
potential terrorists in the future.''

                               3. SBInet

    On January 14, 2011, the Department of Homeland Security 
announced it would end the SBInet program as originally 
conceived. Senator Lieberman, who had overseen the troubled 
program, said: ``The Secretary's decision to terminate SBInet 
ends a long-troubled program that spent far too much of the 
taxpayers' money for the results it delivered. From the start, 
SBInet's one-size-fits-all approach was unrealistic. The 
Department's decision to use technology based on the particular 
security needs of each segment of the border is a far wiser 
approach, and I hope it will be more cost effective.''

                       E. Secret Service Scandal

    In reaction to a story involving the misconduct of Secret 
Service agents and military personnel in Cartagena, Colombia, 
the Chairman and Ranking Member began an investigation of the 
Secret Service. On April 27, 2012, Senator Lieberman released a 
statement on the scandal. ``The issue needs to be thoroughly 
investigated and, if the allegations are true, people should be 
punished.''
    The incident in question occurred on the night of April 11, 
and the morning of April 12, 2012, in which 12 Secret Service 
agents and military personnel procured prostitutes and 
allegedly were disruptive in public due to public drunkenness, 
bringing disgrace to themselves and to the U.S. Government. 
Just as important, it could well have compromised the security 
of the President and the integrity of the mission for which he 
traveled to Colombia.
    Senator Lieberman, along with Senator Collins, requested 
rules guiding employee conduct and records of past Secret 
Service misconduct on May 1, 2012.
    A hearing was held on May 23, 2012, in which the Senators 
raised questions regarding whether a culture of misconduct 
existed at the agency long before the Cartagena scandal became 
public. The Chairman commented that, ``The mission of the 
Secret Service is too important to the Nation for its agents to 
engage in risky behavior.'' To the Director of the U.S. Secret 
Service, Mark J. Sullivan, Senator Lieberman said, ``Going 
forward you have to assume Cartagena was not the only case of 
serious misconduct. You need to put in place rules and 
procedures that will make sure this great agency will not be 
subject again to the suspicions that many people now have, 
including us, about its culture of permissiveness.''

                        F. General DHS Oversight

                               1. Budget

    Despite a weak economy, an unprecedented Federal deficit 
and debt, and pressure to cut government spending, Senator 
Lieberman and the Committee continued to work to obtain 
adequate funding for the Department of Homeland Security and 
especially first responders. When the White House released its 
Fiscal Year 2012 budget on February 14, 2011, Senator Lieberman 
had a generally favorable reaction to the DHS budget proposal, 
which represented a 1.5 percent increase over current funding. 
The budget, the Chairman said is ``a measured approach that 
will put the Department on track to fulfill its varied missions 
and yet reflects the fiscal responsibility needed to bring down 
the deficit and help energize a sluggish economy.
    He praised increased funding for cyber security, the 
acquisition workforce, and to bar terrorist travel, saying it 
``reflects an on-target prioritization of vulnerabilities that 
must be strengthened for the sake of the Nation's security.
    ``The Administration's 17 percent, or $67 million, increase 
in funding for cybersecurity, compared to the Fiscal Year 2011 
Continuing Resolution, will enable the Department to better 
coordinate the security of critical cyber systems and 
information, which are under constant and increasing threat 
from foreign and domestic digital thieves and hackers.
    The Senator expressed dismay with cuts to Federal Emergency 
Management Agency (FEMA), firefighter grants, and proposed 
elimination of the Metropolitan Medical Response System, which 
is critical to preparedness for medical surge in large-scale 
disasters. He also expressed regret that DHS was delaying the 
building of a unified headquarters at St. Elizabeths.
    At a March 21, 2012, hearing on the DHS Fiscal Year 2013 
budget, the Chairman welcomed the Department's proposed 
increase in spending on cybersecurity but expressed dismay 
about a proposal to consolidate homeland security grant 
programs without consulting Congress. DHS Secretary Napolitano 
appeared as the lone witness to defend the Department's $58.6 
billion request.
    Both the Chairman and Ranking Member Collins hailed the 
proposed $325.8 million increase to the cybersecurity budget 
for a total of $770 million, given that public and private 
networks are experiencing a steady increase in probes and 
attacks, and top national security officials say the cyber 
threat could soon overtake the threat of terrorism.
    Both Senators also expressed concern that the Department is 
proposing to circumvent Congress to reorganize its homeland 
security grant programs. The Department's proposal would 
eliminate the State Homeland Security Grant Program, the Urban 
Areas Security Initiative, and port and transit security grants 
and replace them with a new program that includes grants for 
natural disasters.
    Finally, the continued delays in building DHS a proper 
headquarters at St. Elizabeths have been especially troublesome 
for the Chairman. Delays in ongoing construction will likely 
increase the costs to taxpayers in the future.
    DHS currently operates out of 70 different buildings around 
the Washington area. A unified headquarters is a critical 
cornerstone to improving DHS's ability to achieve its core 
functions in a coordinated and efficient way.

                           2. High Risk List

    A September 7, 2011, hearing focused on the Department's 
managerial record and established that the Department has a 
long way to go before it is removed from the Government 
Accountability Office's biennial ``high-risk'' list, where it 
has been identified as an agency at high-risk of waste, fraud, 
abuse, and mismanagement since it provenance.
    The GAO released a new report at the hearing evaluating 
DHS's track record since it was launched in 2003. The report 
concluded that overall DHS is a more effective agency than it 
once was and has created a foundation on which to continue to 
mature and reach its full potential. Chairman Lieberman 
applauded the work of DHS, which matured to the point where it 
has significantly contributed to the Nation's security and 
prevented another attack of a 9/11 magnitude.
    ``Some people say that the Federal Government overreacted 
in its response to the 9/11 attacks. I do not agree,'' the 
Senator said. ``In the past decade, we have been spared another 
catastrophic terrorist attack like the one on 9/11 and that's 
not just a matter of luck or coincidence. It's because of what 
so many people in government did. Ten years ago, no single 
agency and no single official was designated to lead the 
Federal Government's efforts to prevent terrorism or to 
adequately marshal the resources of the Federal Government to 
respond to catastrophic disasters. Today there is clarity on 
who is in charge, and that makes a tremendous difference in the 
security of the country.''

                               STOCK ACT

    A November 2011, a ``60 Minutes'' report on insider trading 
among Members of Congress implied that Congress had exempted 
itself from laws governing insider trading and that both 
Members and staff were abusing their positions. In response, 
Senator Scott Brown requested a hearing to clarify the laws and 
rules that govern Members of Congress who may profit personally 
from non-public information they learn in the course of their 
work. Shortly thereafter, Senators Brown and Gillibrand 
introduced separate pieces of legislation intended to prevent 
such profiteering. Both bills were referred to the Committee.
    Although the ``60 Minutes'' report implied that Congress 
exempted itself from insider trading laws, no law specifically 
prohibits insider trading by anyone, including Members of 
Congress. All investigations and prosecutions of insider 
trading are carried out based on broad anti-fraud provisions of 
the Securities Exchange Act of 1934. The rules against insider 
trading encompass corporate insiders and others who have bought 
and sold securities based on ``material, nonpublic 
information'' they obtained and used in violation of a duty of 
trust. The ambiguity arises because some argue that courts 
might hold that Members of Congress do not have the necessary 
fiduciary duty to the institution of Congress.
    On December 14, 2011, the Committee held a markup during 
which the Chairman drafted compromise legislation based on S. 
1903 and S. 1871, introduced by Senators Gillibrand and Brown, 
respectively.
    The Committee adopted the legislation, known as the Stop 
Trading on Congressional Knowledge (STOCK) Act by a vote of 7-
2. An amendment to the bill also would require financial 
disclosure forms filed by Members of Congress and staff to be 
available electronically. The amendment--offered by Senators 
Mark Begich, D-AK, Jon Tester, D-MT, and co-sponsored by 
Senators Lieberman, Carl Levin, D-MI, and Scott Brown, R-MA--
was approved by voice vote.
    On March 22, 2012, the Senate approved the STOCK Act 96-3. 
The House passed a similar bill, and the Senate agreed to the 
House version. In addition to the aforementioned measures, the 
bill also:
    
 LRequires disclosure 30 days after any securities 
trade over $1,000 and would require all financial disclosures 
by Members of Congress, senior Congressional staff, and high 
level Executive Branch employees to be available 
electronically.
    
 LRequires Members of Congress, their senior staff, 
and top level Executive Branch employees to disclose their 
mortgages annually;
    
 LRequires a Government Accountability Office study 
of so-called ``political intelligence'' to determine who 
practices it and what type of information is being sold to 
their clients.
    
 LDenies Congressional benefits to Members or 
former Members who commit public corruption crimes.
    On April 4, 2012, President Obama signed the STOCK Act into 
law.

                      REFORMING THE POSTAL SERVICE

    A combination of business lost to the Internet and the 
Nation's economic problems has led to a 22 percent drop in mail 
with a revenue loss for the U.S. Postal Service (USPS) of more 
than $10 billion over the past 5 years. In 2011, the Postal 
Service ran up an $8 billion deficit for the second year in a 
row.
    The Postal Service also bumped up against its $15 billion 
credit line with the U.S. Treasury, which forced it to default 
on a $5.5 billion payment into the health care fund for its 
retirees. Postmaster General Patrick Donahoe testified at a 
hearing on September 6, 2011, that the USPS would save $20 
billion and return to solvency by 2015 if it eliminates 
Saturday delivery; closes approximately 3,700 post offices; 
shrinks its workforce by 220,000; pulls out of the Federal 
employee health care plan and creates its own; does away with a 
defined benefit retirement plan for new employees, offering 
them instead a defined contribution plan; and requests the 
return of $6.9 billion in overpayments to the Federal Employee 
Retirement System.
    On Wednesday, November 2, 2011, Chairman Lieberman, Ranking 
Member Collins, Senator Tom Carper, and Senator Scott Brown 
unveiled the 21st Century Postal Service Act. On November 9, 
2011, the Committee passed the bill by a vote of 9-1.
    The 21st Century Postal Service Act:

    1. Authorizes USPS to offer buyouts to employees to help 
reduce its workforce. The Office of Personnel Management (OPM) 
is directed to refund the Postal Service for what everyone 
agrees has been an overpayment to the Federal Employees 
Retirement System. Using this money to support buyouts, the 
Postmaster General estimates he can reduce the Postal Service 
workforce by as many as 100,000 employees over the next 3 years 
in order to reach savings of $8 billion a year.
    2. Allows the Postal Service to work with its employee 
unions and OPM to develop a new health plan to cover postal 
employees. The Postmaster General estimates that a new 
healthcare plan could cut costs roughly in half, while 
maintaining adequate benefits.
    3. Recalibrates the pre-funding requirements for its 
retiree health benefits by amortizing those payments over time.
    4. Bars the USPS from 5-day-a-week mail delivery for 2 
years and until it develops remedies for customers who may be 
affected disproportionately by the change in service. USPS also 
must reduce costs and increase revenues by other means before 
5-day delivery takes effect.
    5. Gives the Postmaster General access to money USPS has 
overpaid into one of its retirement funds to provide incentives 
to encourage 100,000 eligible employees to retire. This would 
help voluntarily ``right-size'' the workforce to take into 
account the steep decline in first class mail volume in recent 
years.
    6. Reduces the amount of money that USPS has to prefund for 
retiree health benefits by amortizing the costs over 40 years 
and calculating those costs more appropriately.
    7. Retains overnight delivery of first class mail, but 
limit it in some cases to shorter geographic distances.
    8. Prevents the Postal Service from going to 5-day delivery 
for the next 2 years and require it to exhaust all other cost-
saving measures first;
    9. Requires USPS to set standards for retail service across 
the country, consider several alternative options before 
closing post offices, and provide for increased opportunity for 
public input.
    10. Allows USPS to deliver mail to curbside, sidewalk, or 
centralized mailboxes, rather than front door mail slots or 
boxes.
    11. Allows USPS to sell non-postal products and services in 
appropriate cases.
    12. Allows USPS to ship beer, wine, and distilled spirits.
    13. Establishes a Strategic Advisory Commission on Postal 
Solvency and Innovation to examine costs and revenues, look at 
alternative business models, and develop a strategic blueprint 
for the Postal Service.
    14. Creates a Chief Innovation Officer to foster innovation 
at USPS.
    15. Reforms the Federal Employees Compensation Act, the 
Federal workers' compensation program.

    It was announced November 16, 2011, that the Postal Service 
lost $5.1 billion in Fiscal Year 2011, though the loss would 
have been $10 billion without emergency Congressional 
intervention.
    On April 17, 2012, the four Senators introduced a 
substitute amendment to the 21st Century Postal Service Act on 
the Senate floor.
    The substitute requires the U.S. Postal Service to continue 
to provide overnight delivery for local first class mail, 
although across shorter distances than may be the case now. The 
Postal Service would still deliver first class mail anywhere in 
the continental United States in a maximum of 3 days. The 
substitute also expands the alternatives USPS must consider 
before closing a post office. It would encourage the Postal 
Service to think innovatively about how to adapt its business 
model in a world increasingly reliant on electronic 
communications. And the revised bill requires appointment of a 
Chief Innovation Officer and establishes a Strategic Advisory 
Commission composed of prominent citizens and charged with 
developing a new strategic blueprint for the Postal Service.
    On April 25, 2012, the Senate passed the Postal Service Act 
by a vote of 62-37. The House has yet to consider postal 
reform, prompting numerous appeals from the Chairman and other 
Senators for the House to act. Despite the USPS's May 2012 
decision to reduce hours at 13,000 post offices around the 
country, the House still did not take up the bill. On August 1, 
2012, the USPS defaulted on its $5.5 billion payment due to the 
Treasury.

                          GOVERNMENT OVERSIGHT

                             A. GSA Scandal

    In reaction to a General Services Administration (GSA) 
Inspector General report outlining reckless spending on a 
regional GSA conference in April 2011, the Chairman condemned 
the misuse of government funds. ``This was a stupid and 
infuriating waste of taxpayer dollars. The people responsible 
for it should be held accountable.''
    The Chairman and Ranking Member Collins were dismayed about 
the more than $800,000 GSA wasted on a Las Vegas conference. 
``The waste, excessive spending, and possible fraud uncovered 
as a result of this investigation and continuing investigations 
cause us grave concern,'' the Senators said. ``In light of the 
array of problems uncovered by the Western Regions Conference 
investigation, we seek to understand whether there is a wider 
problem at GSA.''

                          B. Stimulus Tracking

    On January 18, 2011, HSGAC Chairman Lieberman and Ranking 
Member Collins applauded the President's strategy to promote 
economic job growth and stimulation. They also announced they 
would hold hearings in the upcoming months to examine the 
government's role in a free market economy.
    Senator Lieberman endorsed the main principles of President 
Obama's strategy for more regulation in the economy, ensuring 
events such as the BP oil spill do not happen again. He 
emphasized the President's focus on ``protecting the health and 
safety of the American people and the environment while 
minimizing the burden on small businesses so they can grow and 
create new jobs.''

                         C. Nominations Reform

    With bipartisan legislation ready waiting in the wings, the 
Committee held a hearing on March 2, 2011, on reforming the 
nominations process in the Senate. Witnesses testified in 
support of the proposed plan to speed up the nomination process 
of Presidential appointees, in part by reducing the number of 
positions that must be confirmed. ``We need to simplify and 
speed-up the nominations process,'' Chairman Lieberman said, 
``because if we do not, I fear we risk discouraging some of our 
Nation's most talented individuals from accepting nominations 
and leaving important positions unfilled.
    ``One idea today's witnesses suggested is to standardize 
and centralize the forms and documentation required by both the 
Senate and White House so a nominee is not overwhelmed with 
often duplicative paperwork and information requests. And since 
we know there will be a flood of nominations with each new 
Administration, maybe we should add temporary `surge' workers 
to the White House Office of Presidential Personnel and the FBI 
to handle vetting and background checks more efficiently. Both 
ideas should be seriously considered.''
    One of the reasons the nomination process has become so 
long is because the number of positions that require 
verification has grown greatly. The President must confirm 422 
key positions, plus another nearly 800 lesser positions that 
require Senate confirmation. These numbers do not include 
judges, foreign service officers, or public health officials 
who also require Senate confirmation.
    On March 31, 2011, Senators Lieberman and Collins joined 
Senators Charles E. Schumer, D-NY, and Lamar Alexander, R-TN, 
to introduce ``The Bipartisan Presidential Appointment 
Efficiency and Streamlining Act of 2011,'' S. 679, to clear the 
backlog of stalled executive nominations by permanently 
exempting a range of positions from Senate confirmation. The 
bill would eliminate the need for the Senate to vote on roughly 
200 executive nominations and 3,000 noncontroversial Officer 
Corps positions. In all, the bill reduces the number of 
positions requiring full Senate confirmation by one-third. A 
separate Senate resolution, also introduced today, would 
establish a streamlined confirmation process for an additional 
250 part-time positions.
    ``One hundred days into President Obama's Administration, 
only 14 percent of the Senate-confirmed positions in his 
Administration had been filled,'' Senator Lieberman said. 
``After 18 months, 25 percent of these positions were still 
vacant. And this is not an aberration or anomaly. The 
timetables for putting in place a leadership team across the 
government has been pretty much the same each of the last three 
times there has been a change of occupant in the White House. 
We've known about this problem a long time, but failed to act. 
After years of talk, we finally have bipartisan support for 
change. I call on my fellow chairmen, ranking members, and 
colleagues on both sides of the aisle to work with us on 
addressing this challenge so the next new Administration, 
regardless of party, can recruit the best candidates and then 
put them to work quickly addressing the many challenges our 
Nation faces.''
    The Committee marked up the legislation and reported it out 
on a voice vote on April 13, 2011. The Rules Committee worked 
on a companion resolution to exclude a number of board and 
commission appointments from the Senate nomination process
    ``We need to simplify and speed-up the process to fill 
important positions and to encourage more of our Nation's most 
talented individuals to accept nominations,'' Senator Lieberman 
said. ``And we need to reduce the number of confirmed positions 
so that the Senate can focus and act more quickly on the most 
critical positions.''
    The legislation passed the Senate 79-20 on June 29, 2011, 
and, after passing the House on July 31, 2012, was signed into 
law by the President. (Public Law 112-166)

                       D. Information Technology

    In the 112th Congress, the Committee conducted close 
oversight of the Administration's IT reform efforts, including 
their cloud first and data center consolidation initiatives. In 
addition, we held numerous briefings with the Federal Chief 
Information Officer (CIO) and the E-Gov office at OMB on their 
efforts to implement PortfolioStat across the Federal 
Government. In the summer of 2012, the Federal CIO kicked off 
this initiative by holding PortfolioStat sessions (face-to-
face, evidence-based reviews of an agency's IT portfolio) with 
Federal agencies. Moving forward, the PortfolioStat initiative 
requires agency Chief Operating Officers, on an annual basis, 
to continue to lead an agency-wide IT portfolio review within 
their respective organizations.
    December 2012 also marked the 10-year anniversary of the E-
Gov Act, a bill that was designed to enhance the delivery of 
information and services to the public and others and to use e-
government to improve the effectiveness, efficiency, and 
quality of government service. In September 2012, the 
Government Accountability Office (GAO) released a report 
detailing Administration efforts to implement the E-Gov Act. 
OMB and Federal agencies, GAO concluded, have made progress in 
issuing guidance, developing performance measures, and 
enhancing public access to government information. GAO also 
concluded that the E-Gov Act has contributed to increased 
public access to government information and services, but that 
challenges remain in providing consolidated access to 
government information and services.

                         E. GAO High-Risk List

    On February 16, 2011, Senators Lieberman, Collins, Akaka, 
Johnson, and their House counterparts, joined the Comptroller 
General of the United States, Gene Dodaro, to release the 
Government Accountability Offices's (GAO) biennial list of 
Federal programs at risk of fraud, waste, abuse, and 
mismanagement.
    The list of 29 agencies and programs had changed very 
little since it was last published in 2009. Programs such as 
Medicare and Medicaid and contract management at the 
Departments of Defense and Energy, which had been on the 
previous list, were once again on the list in 2011. The 
programs on the list pose a high risk for wasteful spending of 
taxpayer dollars and abuse of funds appropriated to them. GAO 
did remove the Department of Defense Personnel Security 
Clearance Program and the 2010 Census--two items in which the 
Homeland Security and Governmental Affairs Committee has taken 
an active interest.
    ``This report is especially important this year,'' Senator 
Lieberman said. ``At a time when our Nation's budget deficits 
are at historic levels, we must spend taxpayer dollars as if 
they were our own. We're going to make GAO's high-risk list our 
high priority list for action.''
    GAO also released a report on overlapping programs and, in 
response, Senator Lieberman announced his intention to hold a 
hearing on duplication and inefficiencies in Federal programs.

                             F. Regulations

    On January 11, 2011, Chairman Lieberman and Ranking Member 
Collins expressed support for the President's regulatory 
strategy to promote economic growth and job stimulation and 
announced they would hold hearings in the coming months on the 
essential role of government regulation in a free market 
economy and how the regulatory process can be improved.
    The Senators endorsed the main principles of the 
President's strategy to ``support continued economic growth and 
job creation, while protecting the safety and rights of all 
Americans.''
    ``Regulations are critical to the working of a free market 
and to the health and welfare of all Americans,'' Senator 
Lieberman said. ``As we saw in the financial meltdown of 2008, 
a failure to regulate can lead to catastrophic economic harm. 
Lack of regulation also contributed to the BP oil spill in the 
Gulf of Mexico, the largest oil spill in U.S. history. The 
President's strategy emphasizes protecting the health and 
safety of the American people and the environment while 
minimizing the burden on small businesses so they can grow and 
create new jobs. This is a balanced, common sense strategy 
specifically calibrated to encourage economic recovery.''
    The first hearing, titled ``Federal Regulations: How Best 
to Advance the Public Interest?'' was held on April 14, 2011, 
and focused on the benefits of Federal regulations to public 
health, safety, and the environment and the costs regulations 
incur, especially for small businesses. The Senators engaged 
witness Cass Sunstein, head of the Office of Information and 
Regulatory Affairs (OIRA), which serves as the nerve center for 
regulatory policy, on ways to improve the process of writing 
and implementing regulations.
    ``Smart regulations do not just help individuals, they can 
also help industry by providing a predictable and even playing 
field in a given sector or serving other goals,'' Senator 
Lieberman said. ``But many regulations do impose costs and 
requirements on businesses, so it is important to continually 
oversee the process to ensure it is achieving the law's goals 
with as little extra cost and requirements as possible. That's 
what we are doing here today.''
    The Committee held its third hearing on the topic on July 
20, 2011, to assess the impacts of Federal regulations on the 
process of rulemaking. ``The goal of the hearings is to 
determine the most effective regulation possible. We know that 
regulations have brought us invaluable improvements in health, 
safety and environmental quality, and are essential to the 
financial stability of the private sector. But, especially when 
our economy is under such duress, the regulatory process must 
be open, rigorous, and accountable, to avoid regulatory 
excesses that undercut economic health,'' Senator Lieberman 
said.
    President Obama issued an Executive Order and 
administrative guidance to strengthen the rulemaking process by 
ensuring rules are cost effective and impose the least possible 
burden, particularly for small businesses. And the Senator 
agreed that vigilance in policing the regulatory process was 
necessary to make sure it does not lead to regulatory excesses 
that become a drag on economic health.

                           FEDERAL EMPLOYEES

                        A. Domestic Partnerships

    On November 18, 2011, Senator Lieberman introduced 
legislation to extend benefits to domestic partners of Federal 
employees. ``The Domestic Partnership Benefits and Obligations 
Act of 2011,'' which the Senator had introduced in the previous 
two Congresses, would grant same-sex domestic partners of 
Federal employees living together in a committed relationship 
eligibility for health benefits, long-term care, Family and 
Medical Leave, and Federal retirement benefits, and other 
benefits already granted to spouses of Federal employees.
    ``We want to attract the best men and women possible to 
serve in Federal Government. One way to do that is by offering 
competitive benefits to the family members of gay Federal 
employees. This legislation makes good economic sense. It is 
sound policy. And it is the right thing to do,'' the Senator 
said.

          B. Transportation Security Administration Employees

    ``My record on this issue has been crystal clear since the 
early days of the Transportation Security Administration. I 
support collective bargaining for Transportation Security 
officers because I believe that is the path toward achieving 
higher job performance and, therefore, better security for our 
Nation. I look forward to reviewing the Administration's 
proposal and engaging in this conversation,'' Senator Lieberman 
said.

                          C. Employee Rotation

    A bipartisan, bicameral group of legislators introduced 
bills in the House and Senate on June 23, 2011, to improve the 
efficiency and effectiveness of the Federal Government's 
national and homeland security missions by encouraging the 
government-wide integration of Executive Branch employees 
working in those areas. ``The Interagency Personnel Rotation 
Act of 2011,'' S. 1268 and H. 2314, would promote the temporary 
rotation of certain homeland and national security employees to 
improve communications and break down stovepipes among Federal 
agencies.
    Senator Lieberman said, ``The national security and 
homeland security challenges our Nation faces in the 21st 
Century are far more complex than those of the last century. 
Threats such as terrorism, nuclear and biological weapons 
proliferation, insurgencies, failed States, and organized crime 
know no borders and are beyond the capability of any single 
agency of our government. Our government needs to integrate all 
instruments of national power--including military, diplomatic, 
intelligence, law enforcement, foreign aid, homeland security, 
and public health--to counter these threats. By promoting 
greater understanding among the professionals who dedicate 
their careers to our security, that's what our bill would help 
us do.''

                           D. Whistleblowers

    On April 6, 2011, Senator Lieberman joined a bipartisan 
group of Senators, led by Senator Akaka, in introducing the 
Whistleblower Protection Enhancement Act of 2011. The 
legislation aimed to strengthen the current Whistleblower 
Protection Act.
    ``The importance of Federal whistleblowers in helping root 
out gross mismanagement and abuse in the Federal Government 
cannot be overstated. From FBI lawyer Coleen Rowley, who 
unsuccessfully sought an investigation of a 9/11 co-conspirator 
before the terrorist attacks, to U.S. Park Police Chief Teresa 
Chambers, who was fired for criticizing the lack of funding for 
the Park Police, whistleblowers play an important role in 
improving government performance,'' Senator Lieberman said. 
``This legislation will help assure that the whistleblowers of 
tomorrow will not be silenced.''
    The government relies heavily on whistleblowers to help 
root out mismanagement and abuse in the Federal Government. The 
legislation would clarify any disclosure of gross waste or 
mismanagement, fraud, abuse, or illegal activity may be 
protected, but not disagreements over legitimate policy 
decisions. In addition to suspending the Federal Circuit Court 
of Appeals sole jurisdiction over Federal employee 
whistleblower cases for 5 years, it also establishes 
protections for the Intelligence Community modeled on existing 
whistleblower protections for FBI employees.

                       E. Hatch Act Modernization

    On March 7, 2012, Senator Lieberman joined Senator Akaka 
and others in introducing the bipartisan ``Hatch Act 
Modernization Act of 2012,'' S. 2170. The Hatch Act, originally 
enacted in 1939, restricts the political activity of Federal 
employees, District of Columbia government employees, and State 
and local employees whose positions are connected to Federal 
funds. Congress has not amended the law since 1993. The new 
bill would:

    
 LAllow most State and local employees to run for 
partisan elective office;
    
 LPlace employees of the executive branch of the 
District of Columbia under provisions of the Hatch Act that 
apply to employees in other States or localities;
    
 LAmend the Hatch's Act's penalty provisions for 
Federal employees to allow a broader range of penalties; and
    
 LAllow Federal employees residing in the District 
of Columbia to run as independent candidates in partisan local 
elections, which already is permitted for Federal employees who 
live in suburbs of the District of Columbia and other areas of 
the country with high concentrations of Federal employees.

    The bill was reported out of Committee on September 13, 
2012, and was passed by unanimous consent in the Senate on 
November 30, 2012.
    ``This common sense legislation adds flexibility to the 
Hatch Act by allowing talented State and local public servants 
to run for office,'' Senator Lieberman said. ``The bill also 
treats D.C. government employees like State and local employees 
and increases disciplinary options for Federal employees 
charged with minor violations of the Act. These reasonable 
changes will help protect the personal freedoms of Federal and 
District of Columbia employees while shielding them from 
pressure to use their work time and resources for partisan 
gain.''

                          DISTRICT OF COLUMBIA

                   A. Opportunity Scholarship Program

    On January 26, 2011, Chairman Lieberman introduced the 
Scholarship for Opportunity and Results Act, S. 206, along with 
Senator Collins and seven other co-sponsors. The bill would 
have authorized 5-year grants on a competitive basis to provide 
expanded school choice opportunities to low income students in 
the District of Columbia.
    The Committee held a hearing February 16, 2011, on the D.C. 
Opportunity Scholarship Program (OSP), which he had championed 
since 2004. Although the Secretary of Education had previously 
announced he was going to phase the program out, the Senator 
argued for its continuation, citing its proven track record of 
academic success for underprivileged students. ``In America it 
should not be a privilege for our children to get a first rate 
education. It should be a right,'' the Senator said. For many 
of the families who benefit from the program, the vouchers they 
receive are the only opportunity they have to receive high 
quality education.

                   B. District of Columbia Statehood

    In the waning days of the 112th Congress, Senator Lieberman 
introduced legislation that would give the citizens of the 
District of Columbia the opportunity to decide if they wanted 
Statehood. The New Columbia Admissions Act, S. 3696, was 
introduced on December 19, 2012, and was the first D.C. 
Statehood bill to be introduced in the Senate since 1993. It 
would create a 51st State called New Columbia. In January 2011, 
Rep. Eleanor Holmes Norton had introduced companion legislation 
in the House, H.R. 265.
    ``It is long past time to give those American citizens who 
have chosen the District of Columbia as their home the voice 
they deserve in our democracy,'' Senator Lieberman said. ``The 
United States is the only democracy in the world that denies 
voting representation to the people who live in its capital 
city. As I retire from the Senate after having had the great 
privilege of serving here for 24 years, securing full voting 
rights for the 600,000 disenfranchised people who live in the 
District is unfinished business, not just for me, but for the 
United States of America.''
    Senators Dick Durbin, D-IL, Patty Murray, D-WA, and Barbara 
Boxer, D-CA, co-sponsored the legislation.

                        C. D.C. Budget Autonomy

    Chairman Lieberman, Ranking Member Collins, and Senator 
Akaka, introduced legislation on April 24, 2012, to give the 
District of Columbia greater control over its budget so that 
the city can be managed more effectively.
    The District of Columbia Budget Autonomy Act of 2012, S. 
2345, would have allowed the mayor and city council to enact 
the locally-funded portion of D.C.'s budget at the beginning of 
a new fiscal year without explicit approval from Congress. 
Under existing law, the District cannot implement its budget 
until Congress affirmatively approves it. Ongoing budget 
disputes in Congress have delayed implementation of the D.C. 
budget on multiple occasions, creating needless fiscal 
uncertainty for the city.

                          HELPING CONNECTICUT

                   A. Hurricane/Tropical Storm Irene

    In late August 2011, Tropical Storm Irene's destructive 
winds, flooding, and coastal storm surge displaced thousands of 
Connecticut residents, flooded their homes, businesses and 
roads, and, at one time, left nearly one million people without 
electricity. The Connecticut, Housatonic, Farmington, 
Pomperaug, and Pequbuck Rivers all overran their banks. Downed 
trees closed over 1,000 local roads and 65 State roads. And 
shelters housed over 2,000 residents at the height of the 
disaster. The entire State was declared a major disaster area.
    On September 2, 2011, all seven members of Connecticut's 
congressional delegation urged President Obama to visit the 
State and observe first-hand the devastation caused by Tropical 
Storm Irene. In a letter to the President, the delegation cited 
major flooding caused by five Connecticut rivers, coastal 
surge, and wave damage to support the case for an emergency 
declaration for the State.
    ``We urge you to visit Connecticut to see the damage this 
storm has caused,'' the letter stated. ``We are certain that 
your visit will lift the spirits of the thousands of residents 
who are struggling with recovery from the destruction inflicted 
by this storm.''
    The same day, September 2, the delegation expressed its 
gratitude as President Obama, DHS Secretary Napolitano, and 
Federal Emergency Management Agency Administrator Fugate for 
declaring a major disaster for Connecticut as a result of 
Irene's fierce winds, flooding, and coastal storm surge.
    Under the declaration, five counties were designated for 
assistance which will help State and local governments to 
repair wreckage caused by the storm. The five counties were 
Fairfield, Litchfield, Middlesex, New Haven, and New London. 
Hartford, Tolland, and Windham counties, where damages were 
still being reviewed, were not included in the declaration. 
Additionally, all Connecticut counties were made eligible to 
apply for separate grants for hazard mitigation to prevent or 
reduce long term risk to life and property from hazards.
    Late Saturday, September 3, FEMA announced that the three 
additional Connecticut counties--Hartford, Tolland, and 
Windham--would be added to the five counties that were declared 
a major disaster area on Friday.
    The designation meant that State and local governments 
throughout the State were made eligible for Federal funds to 
help repair, reconstruct, and rebuild the wreckage caused by 
Tropical Storm Irene. All State and local governments in 
Connecticut were also eligible to apply for separate grants for 
hazard mitigation to prevent or reduce long-term risk to life 
and property. Individual households throughout the State were 
also eligible for Federal funds to assist in their recovery.
    On September 13, Senators Lieberman and Richard Blumenthal, 
D-CT, along with 10 colleagues from States impacted by Tropical 
Storm Irene, called on Senate leaders to move a package of 
comprehensive disaster aid through Congress without delay. The 
aid would help to ensure that families, businesses, and State 
and local governments receive the resources they need to 
rebuild and recover from the devastating storm and flooding.
    In a letter to the leaders, the Senators wrote: ``The storm 
caused sweeping damage in a variety of ways and the Federal 
response should be comprehensive and include support from 
multiple programs from different agencies. Congress has a 
tradition of providing comprehensive support to help States 
recover from natural disasters, which has included funding from 
various departments.''
    In addition to Senators Lieberman and Blumenthal, those 
signing the letter included Senators Frank Lautenberg, D-NJ, 
Patrick Leahy, D-VT, Kirsten Gillibrand, D-NY, John Kerry, D-
MA, Robert Menendez, D-NJ, Jack Reed, D-RI, Bernie Sanders, I-
VT, Charles Schumer, D-NY, Jeanne Shaheen, D-NH, and Sheldon 
Whitehouse, D-RI.
    In addition to programs administered by FEMA, the Senators 
requested that aid be provided through disaster relief programs 
such as Community Development Block Grants, the Federal Highway 
Administration Emergency Relief program, Economic Development 
Administration grants, as well as funding for the Department of 
Agriculture, the Army Corps of Engineers, and the Small 
Business Administration.
    The same day, the Senate approved a $5.1 billion aid 
package for the Federal Emergency Management Agency's disaster 
relief fund, 61-38.

                        B. Tropical Storm Sandy

    On October 28, 2012, as Hurricane Sandy churned northward, 
the Connecticut congressional delegation wrote to President 
Obama Sunday in support of Governor Dannel P. Malloy's request 
for an emergency declaration for the entire State of 
Connecticut. ``The storm's devastation is expected to be major 
and potentially catastrophic,'' the delegation wrote in its 
letter. ``To fill gaps in the State and local resources, 
Federal assistance is necessary to save lives, protect 
property, public health and safety, and to lessen the threat 
posed by this very dangerous storm.''
    On October 30, the Connecticut delegation hailed President 
Obama's declaration of a major disaster in the State, which 
entitled individuals and local and State governments to receive 
Federal funds to recover from Hurricane Sandy. The declaration 
covered eligible people and governments in Fairfield, 
Middlesex, New Haven, and New London counties, as well as the 
Mashantucket Pequot Tribal Nation and Mohegan Tribal Nation.
    ``We are grateful to the President for this declaration, 
which will help the people of Connecticut most affected by this 
terrible storm get back on their feet and return to normal 
life,'' the delegation said. ``State and personal resources 
have been depleted by a number of disasters that have battered 
Connecticut over the past year, damaging homes and businesses, 
taking down power lines, and leaving roads and property 
littered with debris.''
    The same day, Senator Lieberman, toured Connecticut coastal 
areas hit hard by Hurricane Sandy and consulted by telephone 
with DHS Secretary Napolitano and other Federal officials about 
ongoing response and recovery plans. Senator Lieberman 
commended the coordinated work of Federal, State, and local 
emergency management officials for planning in advance of the 
monster storm, as well as for their response and recovery 
operations, saying:
    ``Since Hurricane Katrina, FEMA and State and locals 
emergency managers have vastly improved their capabilities to 
deal with disasters, just as Congress intended when it enacted 
a new, much stronger FEMA and general emergency management 
retooling in 2006. That law, for example, gave FEMA expanded 
authority to take important preparatory measures in advance of 
disasters, which helped to mitigate the impact of Sandy.''
    On November 1, 2012, Senator Lieberman and DHS Secretary 
Napolitano went on an aerial tour of coastal towns hard hit by 
Hurricane Sandy. Senator Lieberman, Governor Daniel Malloy, and 
other members of the Connecticut Congressional delegation also 
joined the Secretary at a FEMA operated Disaster Recovery 
Center in Bridgeport.
    On November 14, 2012, Senators Lieberman and Blumenthal, 
and 11 others from States impacted by Superstorm Sandy called 
on President Obama to amend his 2013 budget to request 
emergency aid for Federal disaster assistance programs.
    In the letter, the Senators called on the President to take 
quick action so the necessary funds can be appropriated to help 
victims of Sandy rebuild and recover. The Senators also 
requested an increased Federal share for recovery costs.
    ``As Senators representing States impacted by Superstorm 
Sandy, we are writing to request that the Administration submit 
a budget amendment pursuant to the Budget Control Act to 
provide the necessary funding to robustly support vital Federal 
programs to rebuild our communities and meet the needs of 
victims of Sandy and other recent disasters,'' the Senators 
wrote. ``It is critical that this budget amendment be submitted 
as soon as possible so critical resources can reach impacted 
communities by the end of the calendar year.''
    On November 16, the Connecticut delegation announced 
funding up to $1,830,620 for the Connecticut Department of 
Labor. This National Emergency Grant (NEG) funding from the 
U.S. Department of Labor created about 120 temporary jobs for 
eligible dislocated workers to assist with clean-up and 
recovery efforts as a result of the effects of Superstorm 
Sandy.
    ``This grant addresses critical needs in the wake of 
Superstorm Sandy, and brings us closer to recovery by providing 
dislocated workers with opportunities to clean, rebuild, and 
reconstruct the communities that were hit hardest. People in 
Connecticut affected by Sandy will continue to need resources 
for employment, community revitalization and safety, and we are 
grateful to the U.S. Department of Labor for its support today 
in each of these areas. As we continue down the path to a full 
recovery, we pledge to continue to fight for those affected by 
Sandy,'' said the members.
    These funds, of which $610,207 were released initially, 
were used to provide temporary employment on projects to assist 
with clean-up, demolition, repair, renovation, and 
reconstruction of destroyed public structures, facilities, and 
lands within the affected communities, as well as to deliver 
humanitarian aid and safety assistance, as needed. These funds 
are to be used to perform work on the homes of economically 
disadvantaged individuals who are eligible for the federally-
funded weatherization program, with priority given to services 
for the elderly and individuals with disabilities.
    On November 25, Senators Lieberman and Blumenthal, and 
Reps. Rosa Delauro, Joe Courtney, John Larson, Chris Murphy, 
and Jim Himes thanked the Administration for sending more 
Federal assistance to help the people of Connecticut recover 
from Superstorm Sandy.
    ``We're pleased the Federal Government recognizes the 
devastation we experienced in the State because of Hurricane 
Sandy and will send additional aid to help rebuild Connecticut 
communities,'' the delegation said in a joint statement. ``The 
recovery effort has been and will continue to be difficult. But 
this assistance will help to rebuild infrastructure damaged by 
Sandy.''
    The assistance provided was expanded to include additional 
types of rebuilding aid to those areas already benefiting from 
disaster aid and to provide rebuilding and clean-up help to 
Litchfield, Tolland, and Windham counties.
    On December 5, Senators Lieberman and Blumenthal testified 
in a hearing of the Senate Appropriations Subcommittee on 
Homeland Security that focused on recovery efforts in the wake 
of Superstorm Sandy. The Senators testified on the extensive 
damage to Connecticut's communities, and pressed for a 
supplemental appropriations bill that would allow Connecticut 
to access funds for recovery and mitigation.
    ``Connecticut suffered an estimated $660 million in 
damages, on top of the destruction caused by Hurricane Irene in 
August 2011, and then by the October winter storm in 2011,'' 
Senator Lieberman said. ``It is imperative that Connecticut be 
eligible to access the funds that will be provided in the 
supplemental that is being considered.''
    ``I believe we should go beyond traditional disaster 
assistance with the Supplemental and rethink how we replace 
critical infrastructure. For various reasons, including climate 
change, extreme weather events like Hurricanes Katrina and 
Sandy are going to be more frequent not less in the years 
ahead. That's why every Federal dollar spent now on mitigation 
will save more Federal dollars in the future.''
    On December 9, Senators Lieberman and Blumenthal thanked 
the Obama Administration for requesting $60.4 billion in 
supplemental aid from Congress for States affected by 
Superstorm Sandy.
    On December 12, the Senate Appropriations Committee 
released the text of the Disaster Assistance Supplemental, 
which included the full $60.4 billion. Senators Lieberman and 
Blumenthal thanked the Committee for its sense of urgency and 
called upon fellow lawmakers to swiftly pass the legislation.

                      III. COMMITTEE JURISDICTION

    The jurisdiction of the Committee (which was renamed the 
Committee on Homeland Security and Governmental Affairs when 
the 109th Congress convened) derives from the Rules of the 
Senate and from Senate Resolutions:

                                RULE XXV

                            * * * * * * * *

    (k)(1) Committee on Governmental Affairs, to which 
committee shall be referred all proposed legislation, messages, 
petitions, memorials, and other matters relating to the 
following subjects:

     1. Archives of the United States.
     2. Budget and accounting measures, other than 
appropriations, except as provided in the Congressional Budget 
Act of 1974.
     3. Census and collection of statistics, including economic 
and social statistics.
     4. Congressional organization, except for any part of the 
matter that amends the rules or orders of the Senate.
     5. Federal Civil Service.
     6. Government information.
     7. Intergovernmental relations.
     8. Municipal affairs of the District of Columbia, except 
appropriations therefore.
     9. Organization and management of United States nuclear 
export policy.
    10. Organization and reorganization of the executive branch 
of the Government.
    11. Postal Service.
    12. Status of officers and employees of the United States, 
including their classification, compensation, and benefits.

    (2) Such committee shall have the duty of----
    (A) receiving and examining reports of the Comptroller 
General of the United States and of submitting such 
recommendations to the Senate as it deems necessary or 
desirable in connection with the subject matter of such 
reports;
    (B) studying the efficiency, economy, and effectiveness of 
all agencies and departments of the Government;
    (C) evaluating the effects of laws enacted to reorganize 
the legislative and executive branches of the Government; and
    (D) studying the intergovernmental relationships between 
the United States and the States and municipalities, and 
between the United States and international organizations of 
which the United States is a member.

                  SENATE RESOLUTION 81, 112TH CONGRESS

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS.

    Sec. 12. (a) * * *

                            * * * * * * * *

    (e) INVESTIGATIONS----
    (1) In General--The committee, or any duly authorized 
subcommittee of the committee, is authorized to study or 
investigate----
    (A) the efficiency and economy of operations of all 
branches of the Government including the possible existence of 
fraud, misfeasance, malfeasance, collusion, mismanagement, 
incompetence, corruption, or unethical practices, waste, 
extravagance, conflicts of interest, and the improper 
expenditure of Government funds in transactions, contracts, and 
activities of the Government or of Government officials and 
employees and any and all such improper practices between 
Government personnel and corporations, individuals, companies, 
or persons affiliated therewith, doing business with the 
Government; and the compliance or noncompliance of such 
corporations, companies, or individuals or other entities with 
the rules, regulations, and laws governing the various 
governmental agencies and its relationships with the public;
    (B) the extent to which criminal or other improper 
practices or activities are, or have been, engaged in the field 
of labor-management relations or in groups or organizations of 
employees or employers, to the detriment of interests of the 
public, employers, or employees, and to determine whether any 
changes are required in the laws of the United States in order 
to protect such interests against the occurrence of such 
practices or activities;
    (C) organized criminal activity which may operate in or 
otherwise utilize the facilities of interstate or international 
commerce in furtherance of any transactions and the manner and 
extent to which, and the identity of the persons, firms, or 
corporations, or other entities by whom such utilization is 
being made, and further, to study and investigate the manner in 
which and the extent to which persons engaged in organized 
criminal activity have infiltrated lawful business enterprise, 
and to study the adequacy of Federal laws to prevent the 
operations of organized crime in interstate or international 
commerce; and to determine whether any changes are required in 
the laws of the United States in order to protect the public 
against such practices or activities;
    (D) all other aspects of crime and lawlessness within the 
United States which have an impact upon or affect the national 
health, welfare, and safety; including but not limited to 
investment fraud schemes, commodity and security fraud, 
computer fraud, and the use of offshore banking and corporate 
facilities to carry out criminal objectives;
    (E) the efficiency and economy of operations of all 
branches and functions of the Government with particular 
reference to----
    (i) the effectiveness of present national security methods, 
staffing, and processes as tested against the requirements 
imposed by the rapidly mounting complexity of national security 
problems;
    (ii) the capacity of present national security staffing, 
methods, and processes to make full use of the Nation's 
resources of knowledge and talents;
    (iii) the adequacy of present intergovernmental relations 
between the United States and international organizations 
principally concerned with national security of which the 
United States is a member; and
    (iv) legislative and other proposals to improve these 
methods, processes, and relationships;
    (F) the efficiency, economy, and effectiveness of all 
agencies and departments of the Government involved in the 
control and management of energy shortages including, but not 
limited to, their performance with respect to----
    (i) the collection and dissemination of accurate statistics 
on fuel demand and supply;
    (ii) the implementation of effective energy conservation 
measures;
    (iii) the pricing of energy in all forms;
    (iv) coordination of energy programs with State and local 
government;
    (v) control of exports of scarce fuels;
    (vi) the management of tax, import, pricing, and other 
policies affecting energy supplies;
    (vii) maintenance of the independent sector of the 
petroleum industry as a strong competitive force;
    (viii) the allocation of fuels in short supply by public 
and private entities;
    (ix) the management of energy supplies owned or controlled 
by the Government;
    (x) relations with other oil producing and consuming 
countries;
    (xi) the monitoring of compliance by governments, 
corporations, or individuals with the laws and regulations 
governing the allocation, conservation, or pricing of energy 
supplies; and
    (xii) research into the discovery and development of 
alternative energy supplies; and
    (G) the efficiency and economy of all branches and 
functions of Government with particular references to the 
operations and management of Federal regulatory policies and 
programs.
    (2) Extent of Inquiries--In carrying out the duties 
provided in paragraph (1), the inquiries of this committee or 
any subcommittee of the committee shall not be construed to be 
limited to the records, functions, and operations of any 
particular branch of the Government and may extend to the 
records and activities of any persons, corporation, or other 
entity.
    (3) SPECIAL COMMITTEE AUTHORITY--For the purposes of this 
subsection, the committee, or any duly authorized subcommittee 
of the committee, or its chairman, or any other member of the 
committee or subcommittee designated by the chairman, from 
March 1, 2007, through February 28, 2009, is authorized, in 
its, his, or their discretion----
    (A) to require by subpoena or otherwise the attendance of 
witnesses and production of correspondence, books, papers, and 
documents;
    (B) to hold hearings;
    (C) to sit and act at any time or place during the 
sessions, recess, and adjournment periods of the Senate;
    (D) to administer oaths; and
    (E) to take testimony, either orally or by sworn statement, 
or, in the case of staff members of the Committee and the 
Permanent Subcommittee on Investigations, by deposition in 
accordance with the Committee Rules of Procedure.
    (4) AUTHORITY OF OTHER COMMITTEES--Nothing contained in 
this subsection shall affect or impair the exercise of any 
other standing committee of the Senate of any power, or the 
discharge by such committee of any duty, conferred or imposed 
upon it by the Standing Rules of the Senate or by the 
Legislative Reorganization Act of 1946.
    (5) SUBPOENA AUTHORITY--All subpoenas and related legal 
processes of the committee and its subcommittee authorized 
under S. Res. 50, agreed to February 17, 2005 (109th Congress) 
are authorized to continue.

           IV. BILLS AND RESOLUTIONS REFERRED AND CONSIDERED

    During the 112th Congress, 193 Senate bills and 76 House 
bills were referred to the Committee for consideration. In 
addition, 5 Senate Resolutions and 1 Senate Concurrent 
Resolution were referred to the Committee.
    The Committee reported 66 bills; an additional 24 measures 
were discharged.
    Of the legislation received by the Committee, 58 measures 
became public laws, including 39 postal naming bills.

                              V. HEARINGS

    During the 112th Congress, the Committee held 58 hearings 
on legislation, oversight issues, and nominations. Hearing 
titles and dates follow.
    The Committee also held 13 scheduled business meetings.
    Lists of hearings with copies of statements by Members and 
witnesses, with archives going back to 1997, are online at the 
Committee's Web site, http://hsgac.senate.gov/.

                  Hearing Titles and Summaries Follow:

A Ticking Time Bomb: Counterterrorism Lessons from the U.S. 
        Government's Failure to Prevent the Fort Hood Attack. February 
        15, 2011. (S. Hrg. 112-151)
    This single-panel hearing followed the publication of a 
Committee staff report on the results of a bipartisan 
investigation concerning the killing of 12 soldiers and one 
Department of Defense (DOD) civilian and the wounding of 32 
other individuals. Army Major Nidal Hasan has been charged with 
the attack. The report reviews how DOD and the Federal Bureau 
of Investigation responded to information about Hasan prior to 
the attack. The purpose of the hearing was to discuss the facts 
revealed by the report and the recommendations on improving the 
government's capabilities for countering the domestic threat 
posed by violent Islamist extremism.
    Witnesses: Hon. Charles E. Allen, Former Under Secretary of 
Homeland Security for Intelligence and Analysis and Chief 
Intelligence Officer; Gen. John M. Keane, USA, (Ret.), Former 
Vice Chief of Staff of the U.S. Army; J. Philip Mudd, Senior 
Global Adviser, Oxford Analytica; and Samuel J. Rascoff, 
Assistant Professor of Law, New York University School of Law.
The Value of Education Choices: Saving the D.C. Opportunity Scholarship 
        Program. February 16, 2011. (S. Hrg. 112-195)
    The purpose of this two-panel hearing was to examine the 
merits of continuing Federal support for the District of 
Columbia Opportunity Scholarship Program (OSP), as part of a 
three-sector initiative that also provides additional monies 
for reform and improvement of District public and charter 
schools. The hearing examined how the OSP program benefits low-
income families in the District and whether, and why, it is 
important to continue the program and preserve this choice for 
these students and their parents.
    Witnesses: Panel I: Hon. Vincent C. Gray, Mayor, The 
District of Columbia; and Hon. Kwame R. Brown, Chairman, 
Council of the District of Columbia. Panel II: Kevin P. 
Chavous, Chairman, Board of Directors, Black Alliance for 
Educational Options; Virginia Walden Ford, Executive Director, 
D.C. Parents for School Choice; and Patrick J. Wolf, Ph.D, 
Professor and 21st Century Chair in School Choice, Department 
of Education Reform, University of Arkansas.
The Homeland Security Department's Budget Submission for Fiscal Year 
        2012. February 17, 2011. (S. Hrg. 112-196)
    The purpose of this annual, one-panel hearing was to 
discuss the Department of Homeland Security (DHS) budget 
request for fiscal year 2012. Specifically, it examined how the 
DHS budget request meets the current and future homeland 
security needs of the Nation.
    Witness: Hon. Janet A. Napolitano, Secretary, Department of 
Homeland Security.
Eliminating the Bottlenecks: Streamlining the Nominations Process. 
        March 2, 2011. (S. Hrg. 112-197)
    The purpose of this one-panel hearing was to examine what 
can and should be done to improve the process by which 
Executive Branch officials are nominated and confirmed and to 
ensure that Presidents are able to put in place, in a timely 
fashion, a team to help carry out their policies.
    It also looked at recommendations for overcoming obstacles, 
including possible improvements to the process used to consider 
nominees in both the Executive Branch and in the Senate, as 
well as ways to reduce unnecessary burdens on nominees.
    Witnesses: Hon. Clay Johnson III, Former Deputy Director 
for Management at Office of Management and Budget; Max Stier, 
President and Chief Executive Officer, Partnership for Public 
Service; and Robert B. Dove, Ph.D., Former Parliamentarian of 
the U.S. Senate.
Nomination of Heather A. Higginbottom to be Deputy Director, Office of 
        Management and Budget. March 8, 2011. (S. Hrg. 112-231)
    This one-panel hearing considered the nomination of Heather 
A. Higginbottom to be Deputy Director, Office of Management and 
Budget. The nominee was introduced by Sen. John F. Kerry.
Nomination of Carolyn N. Lerner to be Special Counsel, Office of 
        Special Counsel. March 10, 2011. (S. Hrg. 112-218)
    This one-panel hearing considered the nomination of Carolyn 
N. Lerner to be Special Counsel, Office of Special Counsel.
Information Sharing in the Era of Wikileaks: Balancing Security and 
        Collaboration. March 10, 2011. (S. Hrg. 112-219)
    This one-panel hearing examined the status of information 
sharing in the Federal Government today in light of the recent 
large-scale disclosures of classified information by Wikileaks. 
It explored what the Federal Government is doing to improve the 
security of its classified networks while at the same time 
ensuring that information is shared effectively, including with 
non-Federal partners. It also considered policy, legal, and 
structural issues related to the Federal Government's 
management of classified networks, systems, and information.
    Witnesses: Hon. Patrick F. Kennedy, Under Secretary for 
Management, U.S. Department of State; Teresa M. Takai, Chief 
Information Officer and Acting Assistant Secretary for Networks 
and Information Integration, U.S. Department of Defense; Thomas 
A. Ferguson, Principal Deputy Under Secretary for Intelligence, 
U.S. Department of Defense; Corin R. Stone, Intelligence 
Community Information Sharing Executive, Office of the Director 
of National Intelligence; and Kshemendra Paul, Program Manager, 
Information Sharing Environment, Office of the Director of 
National Intelligence.
Catastrophic Preparedness: How Ready Is FEMA for the Next Big Disaster? 
        March 17, 2011. (S. Hrg. 112-222)
    Five years after Hurricane Katrina and on the heels of a 
devastating disaster in Japan, this single-panel hearing 
examined FEMA's progress in preparing for a catastrophic 
disaster and the challenges the agency faces in fully realizing 
its mission. Additionally, the hearing examined recommendations 
steps FEMA could take to improve preparedness for catastrophic 
disasters.
    Witnesses: Hon. W. Craig Fugate, Administrator, Federal 
Emergency Management Agency, U.S. Department of Homeland 
Security; Hon. Richard L. Skinner, Former Inspector General of 
the U.S. Department of Homeland Security; and William O. 
Jenkins Jr., Director, Homeland Security and Justice Issues, 
U.S. Government Accountability Office.
Ten Years After 9/11: A Report From The 9/11 Commission Chairmen. March 
        30, 2011. (S. Hrg. 112-403)
    This single-panel hearing was the first in a series marking 
the 10th anniversary of 9/11. The hearing's purpose was to 
receive an assessment of the implementation of the 
recommendations made by the National Commission on Terrorist 
Attacks Upon the United States and to hear any new 
recommendations that the chairmen of the Commission believed 
necessary due to the evolution of the terrorist threat since 
the Commission's report in 2004.
    Witnesses: Hon. Thomas H. Kean, Former Chairman, National 
Commission on Terrorist Attacks Upon the United States; and 
Hon. Lee H. Hamilton, Former Vice Chairman, National Commission 
on Terrorist Attacks Upon the United States.
Securing the Border: Building on Progress Made. March 30, 2011. (S. 
        Hrg. 112-232)
    This single-panel hearing was the first in a series that 
examined the progress that has been made towards securing the 
border, and considered what additional measures may be needed. 
One of the central issues that this hearing addressed is what 
it actually means to secure the border, and what metrics are 
needed to get a better understanding of whether progress is 
being made.
    Witnesses: Hon. Asa Hutchinson, Former Under Secretary for 
Border and Transportation Security at the Department of 
Homeland Security; Hon. Doris Meissner, Former Commissioner for 
Immigration and Naturalization Services at the Department of 
Justice; and Richard M. Stana, Director for Homeland Security 
and Justice Issues, Government Accountability Office.
Nomination of Rafael Borras to be Under Secretary for Management, 
        Department of Homeland Security. April 6, 2011. (S. Hrg. 112-
        243)
    This single-panel hearing considered the nomination of 
Rafael Borras to be Under Secretary for Management, Department 
of Homeland Security.
Securing the Border: Progress at the Local Level. April 7, 2011. (S. 
        Hrg. 112-232)
    This single-panel hearing was the second in a series that 
examined the progress that has been made toward securing the 
border, and considered what additional measures may be needed. 
The purpose of this hearing was to examine the progress that 
has been made over the past decade toward securing the border, 
and the impact these efforts have had on border communities.
    Witnesses: Hon. Veronica Escobar, El Paso County Judge, 
Texas; Raymond Loera, Sheriff of Imperial County, California; 
Raymond Cobos, Sheriff of Luna County, New Mexico; and Paul 
Babeu, Sheriff of Pinal County, Arizona.
Federal Regulation: How Best to Advance the Public Interest. April 14, 
        2011. (S. Hrg. 112-220)
    This single-panel hearing was the first in a series, the 
purpose of which was to look at the role of regulation in 
protecting health, safety, and the environment and underpinning 
the free market system, and the current efforts of the 
administration to ensure that regulations are cost-effective 
and cost-justified, flexible, necessary, and up-to-date.
    Witness: Hon. Cass R. Sunstein, Administrator, Office of 
Information and Regulatory Affairs, Office of Management and 
Budget.
Securing the Border: Progress at the Federal Level. May 4, 2011. (S. 
        Hrg. 112-232)
    This single-panel hearing was the third in a series that 
examined the progress that has been made toward securing the 
border, and considered what additional measures may be needed. 
The purpose of this hearing was to examine the Federal 
improvements in infrastructure, technology, and staffing, and 
to hear what the Department of Homeland Security is doing to 
counter visa overstays and to improve metrics to measure 
illegal immigration.
    Witness: Hon. Janet A. Napolitano, Secretary, Department of 
Homeland Security.
Ten Years After 9/11: Is Intelligence Reform Working? Part I. May 12, 
        2011. (S. Hrg. 112-403)
    The single-panel hearing was the second in a series marking 
the 10th Anniversary of 9/11. It examined the degree to which 
the U.S. Intelligence Community has increased its integration 
since September 11, 2001, and improved its performance of its 
missions, including but not limited to countering terrorism, 
and the reasons for any remaining gaps in integration or 
inadequate performance. It also looked at recommendations for 
additional reforms that are needed to improve the integration 
and performance of the U.S. intelligence Community, in light of 
how the terrorist threat to the United States has evolved since 
2004.
    Witnesses: Hon. Jane Harman, Former Representative from 
California and Chair of the Subcommittee on Intelligence, 
Information Sharing, and Terrorism Risk Assessment; Hon. 
Michael V. Hayden, Former Director of the Central Intelligence 
Agency and Former Director of the National Security Agency; and 
John C. Gannon, Former Deputy Director for Intelligence at the 
Central Intelligence Agency.
Ten Years After 9/11: Is Intelligence Reform Working? Part II. May 19, 
        2011. (S. Hrg. 112-403)
    The single-panel hearing was the third in a series marking 
the 10th anniversary of 9/11. It examined the position of the 
Director of National Intelligence and assessed the role played 
by this Director and the adequacy of the Director's statutory 
authorities.  Additionally, the hearing explored 
recommendations by the witness for increased authorities for 
the Director and reorganization of the Intelligence Community.
    Witness: Hon. Dennis C. Blair, Former Director of National 
Intelligence; Admiral, U.S. Navy, Retired.
Protecting Cyberspace: Assessing the White House Proposal. May 23, 
        2011. (S. Hrg. 112-221)
    The purpose of the single-panel hearing was to examine the 
recently unveiled White House cyber security legislative 
proposal and to hear from the witnesses about key aspects of 
the proposal, including the respective roles of the government 
and the private sector in improving cyber security in both the 
.com and the .gov domains. Additionally, the hearing examined 
how the proposal addresses the growing threat of cyber attacks 
to our Nation.
    Witnesses: Philip R. Reitinger, Deputy Under Secretary, 
National Protection and Programs Directorate, U.S. Department 
of Homeland Security; Robert J. Butler, Deputy Assistant 
Secretary for Cyber Policy, U.S. Department of Defense; Ari 
Schwartz, Senior Internet Policy Advisor, National Institute of 
Standards and Technology, U.S. Department of Commerce; and 
Jason C. Chipman, Senior Counsel to the Deputy Attorney 
General, U.S. Department of Justice.
How to Save Taxpayer Dollars: Case Studies of Duplication in the 
        Federal Government. May 25, 2011. (S. Hrg. 112-257)
    The purpose of this single-panel hearing was to examine the 
Government Accountability Office's report on ``Opportunities to 
Reduce Potential Duplication in Government Programs, Save Tax 
Dollars, and Enhance Revenue.'' The hearing explored the 
report's findings; looked at examples of duplication, overlap, 
and fragmentation in Federal agencies and programs; and 
discussed the reasons why such duplication occurs.
    Witnesses: Hon. Eugene L. Dodaro, Comptroller General, U.S. 
Government Accountability Office; Hon. Daniel I. Gordon, 
Administrator, Office of Federal Procurement Policy, Office of 
Management and Budget; and Vivek Kundra, Federal Chief 
Information Officer and Administrator, Office of E-Government 
and Information Technology, Office of Management and Budget.
Nominations of Jennifer A. Di Toro, Donna M. Murphy, and Yvonne M. 
        Williams to be Associate Judges, Superior Court of the District 
        of Columbia. June 15, 2011. (S. Hrg. 112-235)
    This one-panel hearing considered the nominations of 
Jennifer A. Di Toro, Donna M. Murphy, and Yvonne M. Williams to 
be Associate Judges, Superior Court of the District of 
Columbia. The nominees were introduced by the Delegate from the 
District of Columbia, Eleanor Holmes Norton.
See Something, Say Something, Do Something: Next Steps for Securing 
        Rail and Transit. June 22, 2011. (S. Hrg. 112-403)
    The single-panel hearing was the fourth in a series marking 
the 10th anniversary of 9/11. The purpose of this hearing was 
to examine the risks facing rail and transit systems in the 
United States and actions that have or could be taken to 
mitigate the risk of an attack and improve the resiliency of 
the Nation's rail and transit systems. The committee heard how 
TSA, States, and local system operators currently protect rail 
systems and how they should focus resources to continue to 
improve rail and transit security. This hearing also examined 
what steps had and will be taken to protect rail assets in 
light of information from Osama bin Laden's compound which 
indicated al-Qaeda had plotted to attack the U.S. rail sector 
on or about the 10th Anniversary of the September 11, 2001, 
terrorist attacks.
    Witnesses: Hon. John S. Pistole, Administrator, 
Transportation Security Administration, U.S. Department of 
Homeland Security; Hon. Peter J. Boynton, Commissioner, 
Department of Emergency Management and Homeland Security, State 
of Connecticut; and Stephen E. Flynn, Ph.D., President, Center 
for National Policy.
Transforming Lives Through Diabetes Research. June 22, 2011. (S. Hrg. 
        112-314)
    This two-panel hearing was held concomitantly with the 
biennial JDRF Children's Congress. The first panel explored 
advances in diabetes research and artificial pancreas 
technology as well as the wider effects of juvenile diabetes on 
the families and support networks of children with diabetes. 
During the second panel, the Committee heard testimonials from 
JDRF Children's Congress delegates about living with type 1 
diabetes.
    Witnesses: Panel I: Kevin Kline, Celebrity Advocate Co-
Chairman, Juvenile Diabetes Research Foundation; Griffin P. 
Rodgers, M.D., Director, National Institute of Diabetes and 
Digestive and Kidney Diseases, National Institutes of Health, 
U.S. Department of Health and Human Services; and Charles 
Zimliki, Ph.D., Chairman, Artificial Pancreas Critical Path 
Initiative, Food And Drug Administration, U.S. Department of 
Health and Human Services. Panel II: Caroline Jacobs, Delegate 
from Shapleigh, Maine, JDRF Children's Congress; Jack 
Schmittlein, Delegate from Avon, Connecticut, JDRF Children's 
Congress; Kerry Morgan, Delegate from Glen Allen, Virginia, 
JDRF Children's Congress; and Jonathan Platt, Delegate from 
Tarzana, California, JDRF Children's Congress.
Federal Regulation: A Review of Legislative Proposals, Part I. June 23, 
        2011. (S. Hrg. 112-220)
    This two-panel hearing was second in a series on Federal 
regulation. The purpose of this hearing was to examine the 
various legislative proposals to reform the regulatory process. 
During the first panel, the Committee heard descriptions and 
objectives of possible legislation from the senators sponsoring 
such proposals. The Administration's view on the impact that 
regulatory reform legislation would have on the development, 
issuance, and review of regulations was addressed in the second 
panel.
    Witnesses: Panel I: Hon. Olympia J. Snowe, U.S. Senate; 
Hon. Pat Roberts, U.S. Senate; Hon. David Vitter, U.S. Senate; 
and Hon. Mark R. Warner, U.S. Senate. Panel II: Hon. Cass R. 
Sunstein, Administrator, Office of Information and Regulatory 
Affairs, Office of Management and Budget.
Ten Years After 9/11: Preventing Terrorist Travel. July 13, 2011. (S. 
        Hrg. 112-403)
    The single-panel hearing was the fifth in a series marking 
the 10th anniversary of 9/11. It focused on the efforts that 
have been made to prevent terrorists from traveling to the 
United States, in particular the programs that have been 
implemented to address the weaknesses discovered after the 
Christmas Day attack of 2009 and subsequent efforts by 
terrorists to exploit our immigration system in order to 
infiltrate the United States.
    Witnesses: Hon. Rand Beers, Under Secretary, National 
Protection and Programs Directorate, U.S. Department of 
Homeland Security; Hon. Janice L. Jacobs, Assistant Secretary, 
Bureau of Consular Affairs, U.S. Department of State; and Hon. 
David F. Heyman, Assistant Secretary, Office of Policy, U.S. 
Department of Homeland Security.
Federal Regulation: A Review of Legislative Proposals, Part II. July 
        20, 2011. (S. Hrg. 112-220)
    This two-panel hearing was third in a series. The purpose 
of this hearing was to examine the various legislative 
proposals to reform the regulatory process. During the first 
panel, the Committee heard descriptions and objectives of 
additional possible legislation from the senator sponsoring 
such proposals. The second panel allowed former administration 
officials to assess the feasibility of the regulatory reform 
proposals and heard concerns from representatives of affected 
private sector organizations.
    Witnesses: Panel I: Hon. Sheldon Whitehouse, U.S. Senate. 
Panel II: Hon. Sally Katzen, Former Administrator of the Office 
of Information and Regulatory Affairs (1993-1998); Hon. Susan 
E. Dudley, Former Administrator of the Office of Information 
and Regulatory Affairs (2007-2009); David J. Goldston, 
Director, Government Affairs, Natural Resources Defense 
Council; and Karen R. Harned, Executive Director, Small 
Business Legal Center, National Federation of Independent 
Business.
Ten Years After 9/11: Improving Emergency Communications. July 27, 
        2011. (S. Hrg. 112-403)
    The single-panel hearing was the sixth in a series marking 
the 10th anniversary of 9/11. It examined the progress made 
since September 11, 2001, and gaps remaining, in enabling 
interoperable communications among first responders and 
emergency managers at all levels of government. The committee 
heard from witnesses from Federal, State, and local government 
and their views on the potential allocation of the D Block 
portion of the broadband spectrum to the public safety 
community.
    Witnesses: Gregory Schaffer, Acting Deputy Under Secretary, 
National Protection and Programs Directorate, U.S. Department 
of Homeland Security; Michael D. Varney, Statewide 
Interoperability Coordinator, Connecticut Department of 
Emergency Service and Public Protection; Robert P. McAleer, 
Director, Maine Emergency Management Agency; and Charles H. 
Ramsey, Police Commissioner, Philadelphia Police Department.
Nominations of Hon. Mark D. Acton and Robert G. Taub to be 
        Commissioners, Postal Regulatory Commission. July 28, 2011. (S. 
        Hrg. 112-261)
    This one-panel hearing considered the nominations of Hon. 
Mark D. Acton and Robert G. Taub to be Commissioners, Postal 
Regulatory Commission. Mr. Acton was introduced by Hon. George 
A. Omas, Former Commissioner of the U.S. Postal Rate 
Commission, and Mr. Taub was introduced by Hon. John M. McHugh, 
Secretary of the Army.
U.S. Postal Service in Crisis: Proposals to Prevent a Shutdown. 
        September 6, 2011. (S. Hrg. 112-271)
    The purpose of this two-panel hearing was to review the 
legislation currently being considered by Congress and the 
proposals being advocated by the U.S. Postal Service to address 
its dire financial condition, with an emphasis on the most 
recent plans regarding workforce reductions, the implementation 
of separate health insurance and pension plans, and the 
consolidation of retail and mail processing facilities.
    Witnesses: Panel I: Hon. Patrick R. Donahoe, Postmaster 
General and Chief Executive Officer, U.S. Postal Service; Hon. 
John Berry, Director, U.S. Office of Personnel Management; 
Phillip R. Herr, Director, Physical Infrastructure Issues, U.S. 
Government Accountability Office; and Thomas D. Levy, Senior 
Vice President and Chief Actuary, Segal Company. Panel II: 
Cliff Guffey, President, American Postal Workers Union; Louis 
M. Atkins, President, National Association of Postal 
Supervisors; Ellen Levine, Editorial Director, Hearst 
Magazines, Hearst Corporation; and Tonda F. Rush, Director of 
Public Policy, National Newspaper Association.
Defending the Nation Since 9/11: Successful Reforms and Challenges 
        Ahead at the Department of Homeland Security. September 7, 
        2011. (S. Hrg. 112-403)
    This single panel hearing was seventh in a series marking 
the 10th anniversary of 9/11. The purpose of the hearing was to 
examine the progress that the Department of Homeland Security 
has made to fulfill its key mission requirements since it was 
established in 2003, in the context of a comprehensive report 
that is being issued by the Government Accountability Office 
examining the status of the Department's progress on the 
occasion of the 10-year anniversary of the September 11, 2011, 
attacks.
    Witnesses: Hon. Jane Holl Lute, Deputy Secretary, U.S. 
Department of Homeland Security; Hon. Eugene L. Dodaro, 
Comptroller General of the United States, U.S. Government 
Accountability Office, accompanied by Cathleen Berrick, 
Director, Homeland Security and Justice Issues, U.S. Government 
Accountability Office.
Ten Years After 9/11: Are We Safer? September 13, 2011. (S. Hrg. 112-
        403)
    This single panel hearing was the eighth in a series 
marking the 10th anniversary of 9/11. The purpose of this 
hearing was to examine the current nature of the terrorist 
threat against our homeland and U.S. interests abroad generally 
as well as the status of U.S. defenses against this threat. 
This hearing also reflected on how the threat has evolved since 
9/11 and how it may continue to evolve in the future, the 
strengthening of U.S. defenses since 9/11, and the improvements 
that are needed to fill the gaps and to continue to meet the 
terrorist threat in the future.
    Witnesses: Hon. Janet A. Napolitano, Secretary, U.S. 
Department of Homeland Security; Hon. Robert S. Mueller III, 
Director, Federal Bureau of Investigation, U.S. Department of 
Justice; and Hon. Matthew G. Olsen, Director, National 
Counterterrorism Center, Office of the Director of National 
Intelligence.
Transforming Wartime Contracting: Recommendations of the Commission on 
        Wartime Contracting. September 21, 2011. (S. Hrg. 112-333)
    The purpose of this three-panel hearing was to look at how 
to improve contingency contracting by examining the 
recommendations made by the Commission on Wartime Contracting. 
The committee heard from Commission and Administration 
witnesses an assessment of reforms that have been undertaken or 
are being undertaken to address problems in contingency 
contracting and areas where reform is still lacking.
    Witnesses: Panel I: Hon. Claire McCaskill, U.S. Senate; and 
Hon. Jim Webb, U.S. Senate. Panel II: Hon. Christopher Shays, 
Co-Chair, Commission on Wartime Contracting; accompanied by 
Hon. Clark Kent Ervin, Commissioner; Hon. Robert J. Henke, 
Commissioner; Katherine Schinasi, Commissioner; Charles Tiefer, 
Commissioner; and Hon. Dov S. Zakheim, Commissioner. Panel III: 
Hon. Patrick F. Kennedy, Under Secretary for Management, U.S. 
Department of State; and Richard T. Ginman, Director, Defense 
Procurement and Acquisition Policy, U.S. Department of Defense.
Nominations of Ronald D. McCray to be a Member, Federal Retirement 
        Thrift Investment Board, and Corrine A. Beckwith and Catharine 
        F. Easterly to be Associate Judges, District of Columbia Court 
        of Appeals. September 23, 2011. (S. Hrg. 112-316)
    This two-panel hearing considered the nominations of Ronald 
D. McCray to be a Member, Federal Retirement Thrift Investment 
Board, and Corrine A. Beckwith and Catharine F. Easterly to be 
Associate Judges, District of Columbia Court of Appeals.
Nomination of Ernest Mitchell Jr. to be Administrator, U.S. Fire 
        Administration, Federal Emergency Management Agency, U.S. 
        Department of Homeland Security. October 5, 2011. (S. Hrg. 112-
        317)
    This one-panel hearing considered the nomination of Ernest 
Mitchell Jr. to be Administrator, U.S. Fire Administration, 
Federal Emergency Management Agency, U.S. Department of 
Homeland Security.
Ten Years After 9/11: A Status Report on Information Sharing. October 
        12, 2011. (S. Hrg. 112-403)
    This single panel hearing was the ninth in a series marking 
the 10th anniversary of 9/11. The purpose of this hearing was 
to examine the progress made in the last decade with respect to 
terrorism-related information sharing, highlighting specific 
areas where additional progress is required, and looking 
forward to any emerging issues of concern. The scope of the 
hearing encompassed both information sharing among Federal 
Government agencies and with non-Federal partners, including 
State and local entities and the private sector.
    Witnesses: Hon. John E. McLaughlin, Distinguished 
Practitioner-in-Residence, Paul H. Nitze School of Advanced 
International Studies, Johns Hopkins University; Hon. Thomas E. 
McNamara, Adjunct Professor, Elliott School of International 
Affairs, George Washington University; Cathy L. Lanier, Chief 
of Police, Metropolitan Police Department, District of 
Columbia; Ronald E. Brooks, Director, Northern California 
Regional Intelligence Center; and Jeffrey H. Smith, Partner, 
Arnold & Porter.
Ten Years After 9/11 and the Anthrax Attacks: Protecting Against 
        Biological Threat. October 18, 2011. (S. Hrg. 112-403)
    This two-panel hearing was the 10th in a series marking the 
10th anniversary of 9/11. The purpose of this hearing was to 
provide a general assessment of the progress made in the decade 
since the 2001 anthrax attacks with respect to preparedness for 
bioterrorism, to highlight areas where additional progress 
still needs to be made, and to identify emerging issues of 
concern.
    Witnesses: Panel I: Hon. Tara J. O'Toole, Under Secretary 
for Science and Technology, U.S. Department of Homeland 
Security; Hon. Alexander G. Garza, Assistant Secretary for 
Health Affairs and Chief Medical Officer, U.S. Department of 
Homeland Security; Hon. Nicole Lurie, Assistant Secretary for 
Preparedness and Response, U.S. Department of Health and Human 
Services; and Vahid Majidi, Ph.D., Assistant Director, Weapons 
of Mass Destruction Directorate, Federal Bureau of 
Investigation, U.S. Department of Justice. Panel II: Thomas V. 
Inglesby, M.D., Chief Executive Officer and Director, Center 
for Biosecurity, University of Pittsburgh Medical Center; 
Robert P. Kadlec, M.D., Former Special Assistant to the 
President for Homeland Security and Senior Director for 
Biological Defense Policy (2007-2009); and Jeffrey Levi, Ph.D., 
Executive Director, Trust for America's Health.
Ten Years After 9/11: The Next Wave in Aviation Security. November 2, 
        2011. (S. Hrg. 112-403)
    This two-panel hearing was the 11th in a series marking the 
10th anniversary of 9/11. The purpose of the hearing was to 
discuss the future of aviation security, with a focus on how 
passenger screening can be improved through new passenger 
screening programs, protocols, and technology in order to 
enhance security while increasing TSA's efficiency and 
passengers' understanding and satisfaction with the system.
    Witnesses: Panel I: Hon. John S. Pistole, Administrator, 
Transportation Security Administration, U.S. Department of 
Homeland Security. Panel II: Roger J. Dow, President and Chief 
Executive Officer, U.S. Travel Association; Kenneth J. Dunlap, 
Global Director, Security and Travel Facilitation, 
International Air Transport Association; and Charles M. 
Barclay, President, American Association of Airport Executives.
Nominations of Nancy M. Ware to be Director, Court Services and 
        Offender Supervision Agency for the District of Columbia; 
        Michael A. Hughes to be U.S. Marshal, Superior Court of the 
        District of Columbia; and Danya A. Dayson, Peter A. Krauthamer, 
        and John F. McCabe to be Associate Judges, Superior Court of 
        the District of Columbia. November 8, 2011. (S. Hrg. 112-323)
    This two-panel hearing considered the nominations of Nancy 
M. Ware to be Director, Court Services and Offender Supervision 
Agency for the District of Columbia; Michael A. Hughes to be 
U.S. Marshal, Superior Court of the District of Columbia; and 
Danya A. Dayson, Peter A. Krauthamer, and John F. McCabe to be 
Associate Judges, Superior Court of the District of Columbia. 
The nominees were introduced by the Delegate from the District 
of Columbia, Hon. Eleanor Holmes Norton.
Nomination of Roslyn A. Mazer to be Inspector General, U.S. Department 
        of Homeland Security. November 15, 2011. (S. Hrg. 112-334)
    This single panel hearing considered the nomination of 
Roslyn A. Mazer to be Inspector General, U.S. Department of 
Homeland Security. The nominee was introduced by Sen. Benjamin 
L. Cardin.
Weeding Out Bad Contractors: Does the Government Have the Right Tools? 
        November 16, 2011. (S. Hrg. 112-358)
    This single panel hearing examined the adequacy of the 
suspension and debarment rules; the practices of agencies in 
implementing those rules; the role of the Office of Federal 
Procurement Policy in promoting the effectiveness of the rules; 
the roles of the Interagency Suspension and Debarment Committee 
and the Inspectors General in the suspension and debarment 
framework; and the findings and recommendations of a recent 
report by the Government Accountability Office on government-
wide suspension and debarment practices.
    Witnesses: Hon. Daniel I. Gordon, Administrator for Federal 
Procurement Policy, Office of Management and Budget; William T. 
Woods, Director, Acquisition and Sourcing Management, U.S. 
Government Accountability Office; David M. Sims, Chairman, 
Interagency Suspension and Debarment Committee; Allison C. 
Lerner, Inspector General, National Science Foundation; Steven 
A. Shaw, Deputy General Counsel for Contractor Responsibility, 
U.S. Department of the Air Force.
Insider Trading and Congressional Accountability. December 1, 2011. (S. 
        Hrg. 112-344)
    The purpose of this two-panel hearing was to examine the 
applicability of insider trading laws to Members of Congress 
and their staff. It looked at whether it would be helpful for 
Congress to legislate to explicitly prohibit insider trading by 
Members of Congress and their staff, what approach legislation 
should take to provide a sound basis for enforcement, and if 
the current ethics rules of the Senate and the House of 
Representatives clearly prohibit Members and staff from 
engaging in insider trading.
    Witnesses: Panel I: Hon. Kirsten E. Gillibrand, U.S. 
Senate; and Hon. Scott P. Brown, U.S. Senate. Panel II: Melanie 
Sloan, Executive Director, Citizens for Responsibility and 
Ethics in Washington; Donna M. Nagy, C. Ben Dutton Professor of 
Law, Indiana University Maurer School of Law; Donald C. 
Langevoort, Thomas Aquinas Professor of Law, Georgetown 
University Law Center; John C. Coffee Jr., Adolf A. Berle 
Professor of Law, Columbia University Law School; and Robert L. 
Walker, Of Counsel, Wiley Rein LLP.
Homegrown Terrorism: The Threat to Military Communities Inside the 
        United States. December 7, 2011. (Serial No. 112-63)
    The purpose of this two-panel hearing, held jointly with 
the House Committee on Homeland Security, was to examine the 
terrorist threat to military personnel within the continental 
United States--from homegrown terrorists as well as terrorists 
entering the United States from abroad. The Committees asked 
the witnesses to discuss the current threat and what the 
Administration has done to increase the safety of members of 
the military while they are in the United States, both on base 
and in their communities. During the second panel, the 
Committees heard a testimonial from the father of a soldier 
killed in an attack on a recruiting station in Little Rock, 
Arkansas.
    Witnesses: Panel I: Hon. Paul N. Stockton, Assistant 
Secretary of Defense for Homeland Defense and Americas' 
Security Affairs, Office of Undersecretary of Defense for 
Policy, Department of Defense, accompanied by Jim Stuteville, 
United States Army Senior Advisor, Counterintelligence 
Operations and Liaison to the Federal Bureau of Investigation; 
and Lieutenant Colonel Reid L. Sawyer, Director, Combating 
Terrorism Center at West Point. Panel II: Daris Long, Private 
Citizen.
Securing America's Future: The Cybersecurity Act of 2012. February 16, 
        2012. (S. Hrg. 112-524)
    The purpose of this three-panel hearing was to examine 
Cybersecurity Act of 2012 (S. 2105). It focused on the threat 
that cyber attacks pose to America's national security and how 
the Lieberman-Collins-Rockefeller-Feinstein legislation 
addresses this growing threat. In particular, the hearing 
discussed key aspects of the proposal, including the respective 
roles of the government and the private sector in improving 
cybersecurity in both the .com and the .gov domains.
    Witnesses: Panel I: Hon. John D. Rockefeller IV, U.S. 
Senate; and Hon. Dianne Feinstein, U.S. Senate. Panel II: Hon. 
Janet A. Napolitano, Secretary, U.S. Department of Homeland 
Security. Panel III: Hon. Thomas J. Ridge, Chairman, National 
Security Task Force, U.S. Chamber of Commerce; Hon. Stewart A. 
Baker, Partner, Steptoe and Johnson; James A. Lewis, Ph.D., 
Director and Senior Fellow, Technology and Public Policy 
Program, Center for Strategic and International Studies; and 
Scott Charney, Corporate Vice President, Trustworthy Computing 
Group, Microsoft Corporation.
Nomination of Hon. Tony Hammond to be Commissioner, Postal Regulatory 
        Commission. March 6, 2012. (S. Hrg. 112-525)
    This single panel hearing considered the nomination of Hon. 
Tony Hammond to be a Commissioner, Postal Regulatory 
Commission. The nominee was introduced by Sen. Roy Blunt.
Nominations of Mark A. Robbins to be Member, Merit Systems Protection 
        Board; and Roy W. McLeese III to be Associate Judge, District 
        of Columbia Court of Appeals. March 6, 2012. (S. Hrg. 112-257)
    This two-panel hearing considered the nominations of Mark 
A. Robbins to be a Member, Merit Systems Protection Board; and 
Roy W. McLeese III to be an Associate Judge, District of 
Columbia Court of Appeals. Mr. McLeese was introduced by the 
Delegate from the District of Columbia, Hon. Eleanor Holmes 
Norton.
Raising the Bar for Congress: Reform Proposals for the 21st Century. 
        March 14, 2012. (S. Hrg 112-537)
    The purpose of this two-panel hearing was to discuss 
whether Congress can improve the way it considers and votes on 
legislation and to examine the various proposals that could 
improve the way it operates, such as S. 1981, the No Budget, No 
Pay bill, which was pending in the Homeland Security and 
Governmental Affairs Committee. The testimony focused on what 
changes each chamber of Congress can adopt to stop gridlock and 
the need for Members on both sides of the aisle to come 
together to help solve the greatest challenges facing our 
country.
    Witnesses: Panel I: Hon. Johnny Isakson, U.S. Senate; Hon. 
Dean Heller, U.S. Senate; and Hon. Jim Cooper, U.S. House of 
Representatives. Panel II: Hon. Thomas M. Davis, Co-Founder, No 
Labels, and Director, Federal Government Affairs, Deloitte & 
Touche; William A. Galston, Co-Founder, No Labels, and Senior 
Fellow, Governance Studies, Brookings Institution; and Donald 
R. Wolfensberger, Director, Congress Project, Woodrow Wilson 
International Center for Scholars.
Retooling Government for the 21st Century: The President's 
        Reorganization Plan and Reducing Duplication. March 21, 2012. 
        (S. Hrg. 112-531)
    The purpose of this single-panel hearing was to examine the 
Reforming and Consolidating Government Act of 2012 (S. 2129) 
which created expedited procedures for legislative 
consideration of certain reorganization plans submitted by the 
President. The witnesses focused on this legislative proposal, 
whether reorganizing the executive branch can assist in efforts 
to improve the efficiency and performance of Federal agencies, 
and other opportunities that exist to reduce unnecessary 
duplication in Federal programs.
    Witnesses: Hon. Daniel I. Werfel, Controller, Office of 
Federal Financial Management, Office of Management and Budget; 
and Patricia A. Dalton, Chief Operating Office, Government 
Accountability Office.
The Homeland Security Department's Budget Submission of Fiscal Year 
        2013. March 21, 2012. (S. Hrg. 112-545)
    The purpose of this single-panel hearing was to discuss the 
Department of Homeland Security's budget request for fiscal 
year 2013. Specifically, it discussed how the DHS budget 
request met the current and future homeland security needs of 
the Nation.
    Witness: Hon. Janet A. Napolitano, Secretary, U.S. 
Department of Homeland Security.
Biological Security: The Risk of Dual-Use Research. April 26, 2012. (S. 
        Hrg. 112-535)
    The purpose of this single-panel hearing was to examine the 
controversy surrounding the release of H5N1 Avian Flu research 
detailing mutations altering transmissibility and the larger 
debate over so-called ``dual-use research''--legitimate and 
beneficial scientific research that, if misapplied, also has 
the potential to cause significant harm to public health and 
national security.
    Witnesses: Anthony S. Fauci, M.D., Director, National 
Institute of Allergy and Infectious Diseases, National 
Institutes of Health, U.S. Department of Health and Human 
Services; Daniel M. Gerstein, Ph.D., Deputy Under Secretary for 
Science and Technology, U.S. Department of Homeland Security; 
Paul S. Keim, Ph.D., Acting Chairman, National Science Advisory 
Board for Biosecurity, National Institutes of Health, U.S. 
Department of Health and Human Services; and Thomas V. 
Inglesby, M.D., Chief Executive Officer and Director, Center 
for Biosecurity, University of Pittsburgh Medical Center.
Nomination of Joseph G. Jordan to be Administrator, Office of Federal 
        Procurement Policy, Office of Management and Budget. May 9, 
        2012. (S. Hrg. 112-539)
    This single panel hearing considered the nomination of 
Joseph G. Jordan to be Administrator, Office of Federal 
Procurement Policy, Office of Management and Budget.
Secret Service on the Line: Restoring Trust and Confidence. May 23, 
        2012. (S. Hrg. 112-559)
    This purpose of this single-panel hearing was to discuss 
the Secret Service misconduct in Cartagena, Columbia, and 
whether it indicates a broader, cultural problem within the 
agency. The hearing also focused on what steps are being taken 
to both investigate the incident as well as any corrective 
actions that might be needed to prevent future misconduct.
    Witnesses: Mark J. Sullivan, Director, United States Secret 
Service, U.S. Department of Homeland Security; and Charles K. 
Edwards, Acting Inspector General, U.S. Department of Homeland 
Security.
Nominations of Hon. Katherine C. Tobin and Hon. James C. Miller III to 
        be Governors, United States Postal Service. June 21, 2012. (S. 
        Hrg. 112-538)
    This single panel hearing considered the nominations of 
Hon. Katherine C. Tobin and Hon. James C. Miller III to be 
Governors, United States Postal Service. Dr. Tobin was 
introduced by Sen. Harry Reid.
The Future of Homeland Security: Evolving and Emerging Threats. July 
        11, 2012. (S. Hrg. 112-612)
    This single-panel hearing was the first in a series on the 
future of homeland security. The purpose was to examine the 
future homeland security threat context, including both the 
terrorism threat as well as other key threat areas, such as 
cyber threats and transnational organized crime, and the 
linkages among these threat domains. The hearing also looked at 
the broader societal and technological factors that are 
affecting these threats, and examined the capacity of DHS and 
other key stakeholders to anticipate changes to this threat 
context and to take appropriate action to counter or mitigate 
emerging threats and vulnerabilities.
    Witnesses: Hon. Michael V. Hayden, Principal, Chertoff 
Group; Brian Michael Jenkins, Senior Adviser to the President, 
RAND Corporation; Frank J. Cilluffo, Director, Homeland 
Security Policy Institute, George Washington University; and 
Stephen E. Flynn, Ph.D., Founding Co-Director, George J. Kostas 
Research Institute for Homeland Security, Northeastern 
University.
The Future of Homeland Security: The Evolution of the Homeland Security 
        Department's Roles and Missions. July 12, 2012. (S. Hrg. 112-
        612)
    This single-panel hearing was the second in a series on the 
future of homeland security. The purpose of this hearing was to 
examine how the Homeland Security Department's roles and 
missions have evolved in the decade since the passage of the 
Homeland Security Act and what the department needs to do in 
the next decade to mature to become a more effective 
organization both in its internal management and operations and 
in its interactions with other key Federal and non-Federal 
stakeholders.
    Witnesses: Hon. Jane Harman, Director, President, and Chief 
Executive Officer, Woodrow Wilson International Center for 
Scholars; Admiral Thad W. Allen, USCG, Retired, Former 
Commandant of the U.S. Coast Guard; and Hon. Richard L. 
Skinner, Chief Executive Officer, Richard Skinner Consulting.
Nomination of Stephen Crawford to be a Governor, United States Postal 
        Service. July 12, 2012. (S. Hrg. 112-566)
    This single panel hearing considered the nomination of 
Stephen Crawford to be a Governor, United States Postal 
Service. Dr. Crawford was introduced by Sen. Benjamin L. 
Cardin.
Show Me the Money: Improving the Transparency of Federal Spending. July 
        18, 2012. (S. Hrg. 112-583)
    This two-panel hearing examined the current state of 
transparency and accountability of Federal spending. The 
witness testimony focused on implementation of the Federal 
Funding Accountability and Transparency Act, lessons learned 
from the Recovery Act, and what opportunities exist to improve 
transparency and accountability of Federal spending.
    Witnesses: Panel I: Hon. Mark R. Warner, U.S. Senate. Panel 
II: Hon. Eugene L. Dodaro, Comptroller General of the United 
States, U.S. Government Accountability Office; Hon. Daniel I. 
Werfel, Controller, Office of Federal Financial Management, 
Office of Management and Budget; and Richard L. Gregg, Fiscal 
Assistant Secretary, U.S. Department of the Treasury.
Nominations of Walter M. Shaub, Jr., to be Director, Office of 
        Government Ethics, and Kimberley S. Knowles and Rainey R. 
        Brandt to be Associate Judges, Superior Court of the District 
        of Columbia. July 20, 2012. (S. Hrg. 112-565)
    This two-panel hearing considered the nominations of Walter 
M. Shaub, Jr., to be Director, Office of Government Ethics, and 
Kimberley S. Knowles and Rainey R. Brandt to be Associate 
Judges, Superior Court of the District of Columbia. Mr. Shaub 
was introduced by Rep. James P. Moran , and Ms. Knowles and Ms. 
Brandt were introduced by Del. Eleanor Holmes Norton.
Moving from Scandal to Strategy: The Future of the General Services 
        Administration. September 12, 2012. (S. Hrg. 112-613)
    The purpose of this single-panel hearing was to examine 
actions taken in response to the Inspector General's report on 
the Western Regions Conference, as well as actions taken in 
response to any other specific instances of waste, fraud, or 
abuse that have been identified. The committee was particularly 
interested in any specific recommendations developed as a 
result of the top-to-bottom review being conducted by the 
Acting Administrator, as well as an identification of GSA's 
major challenges that should be addressed by both the 
Administration and the Congress over the short and long terms.
    Witnesses: Hon. Daniel M. Tangherlini, Acting 
Administrator, U.S. General Services Administration; and Hon. 
Brian D. Miller, Inspector General, U.S. General Services 
Administration.
Homeland Threats and Agency Responses. September 19, 2012. (S. Hrg. 
        112-639)
    The purpose of this single-panel hearing was to assess the 
major threats to our homeland as well as the status of U.S. 
defenses against these threats. While the predominant focus of 
this hearing was terrorism threats, it also addressed other 
homeland threats, such as cyber threats and transnational 
organized crime. The hearing examined the current status of 
these threats, to the extent that is feasible in an 
unclassified setting, including how they may have evolved since 
the committee's 2011 threat hearing.
    Witnesses: Hon. Janet A. Napolitano, Secretary, U.S. 
Department of Homeland Security; Hon. Matthew G. Olsen, 
Director, National Counterterrorism Center, Office of the 
Director of National Intelligence; and Kevin L. Perkins, 
Associate Deputy Director, Federal Bureau of Investigation, 
U.S. Department of Justice.
Nomination of Robert D. Okun to be an Associate Judge, Superior Court 
        of the District of Columbia. November 20, 2012. (S. Hrg. 112-
        648)
    This single panel hearing considered the nomination of 
Robert D. Okun to be an Associate Judge, Superior Court of the 
District of Columbia. Mr. Okun was introduced by Del. Eleanor 
Holmes Norton.

                  VI. REPORTS, PRINTS, AND GAO REPORTS

    During the 112th Congress, the Committee prepared and 
issued 31 reports and 2 Committee Prints on the following 
topics. Reports issued by Subcommittees are listed in their 
respective sections of this document.

                           COMMITTEE REPORTS

    To ensure objective, independent review of task and 
delivery orders. S. Rept. 112-16, re. S. 498.
    To improve the Federal Acquisition Institute. S. Rept. 112-
21, re. S. 762.
    To direct the Department of Homeland Security to undertake 
a study on emergency communications. S. Rept. 112-22, re. S. 
191.
    To reduce the number of executive positions subject to 
Senate confirmation. S. Rept. 112-24, re. S. 679.
    To improve the provision of assistance to fire departments, 
and for other purposes. S. Rept. 112-28, re. S. 550.
    To prevent abuse of Government charge cards. S. Rept. 112-
37, re. S. 300.
    To extend the chemical facility security program of the 
Department of Homeland Security, and for other purposes. S. 
Rept. 112-90, re. S. 473.
    To authorize the Secretary of Homeland Security, in 
coordination with the Secretary of State, to establish a 
program to issue Asia-Pacific Economic Cooperation business 
travel cards, and for other purposes. S. Rept. 112-92, re. S. 
1487.
    To amend title 39, United States Code, to extend the 
authority of the United States Postal Service to issue a 
semipostal to raise funds for breast cancer research. S. Rept. 
112-97, re. S. 384.
    To improve, sustain, and transform the United States Postal 
Service. S. Rept. 112-143, re. S. 1789.
    To promote the development of the Southwest waterfront in 
the District of Columbia, and for other purposes. S. Rept. 112-
154, re. H.R. 2297.
    To amend chapter 23 of title 5, United States Code, to 
clarify the disclosures of information protected from 
prohibited personnel practices, require a statement in non-
disclosure policies, forms, and agreements that such policies, 
forms, and agreements conform with certain disclosure 
protections, provide certain authority for the special counsel, 
and for other purposes. S. Rept. 112-155, re. S. 743.
    To amend title 31, United States Code, to enhance the 
oversight authorities of the Comptroller General, and for other 
purposes. S. Rept. 112-159, re. S. 237.
    To provide for an exchange of land between the Department 
of Homeland Security and the South Carolina State Ports 
Authority. S. Rept. 112-171, re. S. 2061.
    To amend title 11, District of Columbia Official Code, to 
revise certain administrative authorities of the District of 
Columbia courts, and to authorize the District of Columbia 
Public Defender Service to provide professional liability 
insurance for officers and employees of the Service for claims 
relating to services furnished within the scope of employment 
with the Service. S. Rept. 112-178, re. S. 1379.
    To reauthorize the United States Fire Administration, and 
for other purposes. S. Rept. 112-180, re. S. 2218.
    To intensify efforts to identify, prevent, and recover 
payment error, waste, fraud, and abuse within Federal spending. 
S. Rept. 112-181, re. S. 1409.
    To amend the District of Columbia Home Rule Act to revise 
the timing of special elections for local office in the 
District of Columbia. S. Rept. 112-186, re. H.R. 3902.
    Activities of the Committee on Homeland Security and 
Governmental Affairs for the 111th Congress. S. Rept. 112-193.
    To protect Federal employees and visitors, improve the 
security of Federal facilities and authorize and modernize the 
Federal Protective Service. S. Rept. 112-202, re. S. 772.
    To permit certain members of the United States Secret 
Service and certain members of the United States Secret Service 
Uniformed Division who were appointed in 1984, 1985, or 1986 to 
elect to be covered under the District of Columbia Police and 
Firefighter Retirement and Disability System in the same manner 
as members appointed prior to 1984. S. Rept. 112-205, re. S. 
1515.
    To establish a Border Enforcement Security Task Force 
program to enhance border security by fostering coordinated 
Efforts among Federal, State, and local border and law 
enforcement officials to protect United States border cities 
and communities from trans-national crime, including violence 
associated with drug trafficking, arms smuggling, illegal alien 
trafficking and smuggling, violence, and kidnapping along and 
across the international borders of the United States, and for 
other purposes. S. Rept. 112-206, re. H.R. 915.
    To amend the provisions of title 5, United States Code, 
which are commonly referred to as the ``Hatch Act'' to 
eliminate the provision preventing certain State and local 
employees from seeking elective office, clarify the application 
of certain provisions to the District of Columbia, and modify 
the penalties which may be imposed for certain violations under 
subchapter III of chapter 73 of that title. S. Rept. 112-211, 
re. S. 2170.
    To repeal or modify certain mandates of the Government 
Accountability Office. S. Rept. 112-219, re. S. 3315.
    To obtain an unqualified audit opinion, and improve 
financial accountability and management at the Department of 
Homeland Security. S. Rept. 112-230, re. S. 1998.
    To increase the efficiency and effectiveness of the 
Government by providing for greater interagency experience 
among national security and homeland security personnel through 
the development of a national security and homeland security 
human capital strategy and interagency rotational service by 
employees, and for other purposes. S. Rept. 112-235, re. S. 
1268.
    To establish the Office of Agriculture Inspection within 
the Department of Homeland Security, which shall be headed by 
the Assistant Commissioner for Agriculture Inspection, and for 
other purposes. S. Rept. 112-240, re. S. 1673.
    To require the Federal Government to expedite the sale of 
underutilized Federal real property. S. Rept. 112-241, re. S. 
2178.
    To prohibit Members of Congress and employees of Congress 
from using nonpublic information derived from their official 
positions for personal benefit, and for other purposes. S. 
Rept. 112-244, re. 2038.
    To authorize certain programs of the Department of Homeland 
Security, and for other purposes. S. Rept. 112-249, re. S. 
1546.
    To provide benefits to domestic partners of Federal 
employees. S. Rept. 112-257, re. S. 1910.

                            COMMITTEE PRINTS

    The Committee issued the following Committee Prints during 
the 112th Congress:
    Rules of Procedure. Committee on Homeland Security and 
Governmental Affairs. (Printed. 36 pp. S. Prt. 112-11.)
    Rules of Procedure. Permanent Subcommittee on 
Investigations. (Printed. 18 pp. S. Prt. 112-12.)

                              GAO REPORTS

    Also during the 112th Congress, the Government 
Accountability Office (GAO) issued 156 reports at the request 
of the Committee. GAO reports requested by the Subcommittees 
appear in their respective sections. Reports are listed here by 
title, GAO number, and release date.
    Information Technology: OMB Has Made Improvements to Its 
Dashboard, but Further Work Is Needed by Agencies and OMB to 
Ensure Data Accuracy. GAO-11-262. March 15, 2011.
    Information Security: IRS Needs to Enhance Internal Control 
over Financial Reporting and Taxpayer Data. GAO-11-308. March 
15, 2011.
    Federal Food Safety Oversight: Food Safety Working Group Is 
a Positive First Step but Governmentwide Planning Is Needed to 
Address Fragmentation. GAO-11-289. March 18, 2011.
    State and Local Governments: Knowledge of Past Recessions 
Can Inform Future Federal Fiscal Assistance. GAO-11-401. March 
31, 2011.
    Medicaid: Improving Responsiveness of Federal Assistance to 
States during Economic Downturns. GAO-11-395. March 31, 2011.
    Border Security: DHS's Visa Security Program Needs to 
Improve Performance Evaluation and Better Address Visa Risk 
Worldwide. GAO-11-315. March 31, 2011.
    2010 Lobbying Disclosure: Observations on Lobbyists' 
Compliance with Disclosure Requirements. GAO-11-452. April 1, 
2011.
    Recovery Act: Energy Efficiency and Conservation Block 
Grant Recipients Face Challenges Meeting Legislative and 
Program Goals and Requirements. GAO-11-379. April 7, 2011.
    Catastrophic Planning: States Participating in FEMA's Pilot 
Program Made Progress, but Better Guidance Could Enhance Future 
Pilot Programs. GAO-11-383. April 8, 2011.
    Overstay Enforcement: Additional Mechanisms for Collection, 
Assessing, and Sharing data Could Strengthen DHS's Efforts but 
Would Have Costs. GAO-11-411. April 15, 2011.
    Recovery Act: Thousands of Recovery Act Contract and Grant 
Recipients Owe Hundreds of Millions in Federal Taxes. GAO-11-
485. April 28, 2011.
    Visa Waiver Program: DHS Has Implemented the Electronic 
System for Travel Authorization, but Further Steps Needed to 
Address Potential Program Risks. GAO-11-335. May 5, 2011.
    United States Postal Service: Strategy Needed to Address 
Aging Delivery Fleet. GAO-11-386. May 5, 2011.
    Financial Audit: Congressional Award Foundation's Fiscal 
Years 2010 and 2009 Financial Statements. GAO-11-597. May 12, 
2011.
    Management Report: Improvements Needed in Controls over the 
Preparation of the U.S. Consolidated Financial Statements. GAO-
11-525. May 26, 2011.
    Intelligence, Surveillance, and Reconnaissance: Actions Are 
Needed to Increase Integration and Efficiencies of DOD's ISR 
Enterprise. GAO-11-465. June 3, 2011.
    Combating Terrorism: U.S. Government Should Improve Its 
Reporting on Terrorist Safe Havens. GAO-11-561. June 3, 2011.
    ACORN: Federal Funding and Monitoring. GAO-11-484. June 14, 
2011.
    DHS Science and Technology: Additional Steps Needed to 
Ensure Test and Evaluation Requirements Are Met. GAO-11-596. 
June 15, 2011.
    National Preparedness: DHS and HHS Can Further Strengthen 
Coordination for Chemical, Biological, Radiological, and 
Nuclear Risk Assessments. GAO-11-606. June 21, 2011.
    Internal Revenue Service: Status of GAO Financial Audit and 
Related Financial Management Report Recommendations. GAO-11-
536. June 22, 2011.
    Homeland Defense: Actions Needed to Improve DOD Planning 
and Coordination for Maritime Operations. GAO-11-661. June 23, 
2011.
    Social Media: Federal Agencies Need Policies and Procedures 
for Managing and Protecting Information They Access and 
Disseminate. GAO-11-605. June 28, 2011.
    Recovery Act: Funds Supported Many Water Projects, and 
Federal and State Monitoring Shows Few Compliance Problems. 
GAO-11-608. June 29, 2011.
    Recovery Act: Funding Used for Transportation 
Infrastructure Projects, but Some Requirements Proved 
Challenging. GAO-11-600. June 29, 2011.
    Race to the Top: Reform Efforts Are Under Way and 
Information Sharing Could Be Improved. GAO-11-658. June 30, 
2011.
    Combating Terrorism: Additional Steps Needed to Enhance 
Foreign Partners' Capacity to Prevent Terrorist Travel. GAO-11-
637. June 30, 2011.
    Information Security: State Has Taken Steps to Implement a 
Continuous Monitoring Application, but Key Challenges Remain. 
GAO-11-149. July 8, 2011.
    Long-Term Care Insurance: Carrier Interest in the Federal 
Program, Changes to Its Actuarial Assumptions, and OPM 
Oversight. GAO-11-630. July 11, 2011.
    Data Center Consolidation: Agencies Need to Complete 
Inventories and Plans to Achieve Expected Savings. GAO-11-565. 
July 19, 2011.
    Information Sharing Environment: Better Road Map Needed to 
Guide Implementation and Investments. GAO-11-455. July 21, 
2011.
    Emergency Preparedness: Agencies Need Coordinated Guidance 
on Incorporating Telework into Emergency and Continuity 
Planning. GAO-11-628. July 22, 2011.
    Information Technology: DHS Needs to Improve Its 
Independent Acquisition Reviews. GAO-11-581. July 28, 2011.
    Green Information Technology: Agencies Have Taken Steps to 
Implement Requirements, but Additional Guidance on Measuring 
Performance Needed. GAO-11-638. July 28, 2011.
    Medicare Integrity Program: CMS Used Increased Funding for 
New Activities but Could Improve Measurement of Program 
Effectiveness. GAO-11-592. July 29, 2011.
    Acquisition Planning: Opportunities to Build Strong 
Foundations for Better Services Contracts. GAO-11-672. August 
9, 2011.
    Suspension and Debarment: Some Agency Programs Need Greater 
Attention, and Governmentwide Oversight Could Be Improved. GAO-
11-739. August 31, 2011.
    Interagency Contracting: Improvements Needed in Setting Fee 
Rates for Selected Programs. GAO-11-784. September 9, 2011.
    DOD Financial Management: Improvement Needed in DOD 
Components' Implementation of Audit Readiness Effort. GAO-11-
851. September 13, 2011.
    Quadrennial Homeland Security Review: Enhanced Stakeholder 
Consultation and Use of Risk Information Could Strengthen 
Future Reviews. GAO-11-873. September 15, 2011.
    Iraq and Afghanistan: DOD, State, and USAID Cannot Fully 
Account for Contracts, Assistance Instruments, and Associated 
Personnel. GAO-11-886. September 15, 2011.
    Federal Chief Information Officers: Opportunities Exist to 
Improve Role in Information Technology Management. GAO-11-634. 
September 15, 2011.
    Personal ID Verification: Agencies Should Set a Higher 
Priority on Using the Capabilities of Standardized 
Identification Cards. GAO-11-751. September 20, 2011.
    Inspectors General: Reporting on Independence, 
Effectiveness, and Expertise. GAO-11-770. September 21, 2011.
    Recovery Act Education Programs: Funding Retained Teachers, 
but Education Could More Consistently Communicate Stabilization 
Monitoring Issues. GAO-11-804. September 22, 2011.
    Electronic Government: Performance Measures for Projects 
Aimed at Promoting Innovation and Transparency Can Be Improved. 
GAO-11-775. September 23, 2011.
    Contingency Contracting: Improved Planning and Management 
Oversight Needed to Address Challenges with Closing Contracts. 
GAO-11-891. September 29, 2011.
    Information Technology: OMB Needs to Improve Its Guidance 
on IT Investments. GAO-11-826. September 29, 2011.
    Streamlining Government: Key Practices from Select 
Efficiency Initiatives Should Be Shared Governmentwide. GAO-11-
908. September 30, 2011.
    Energy Star: Providing Opportunities for Additional review 
of EPA's Decisions Could Strengthen the Program. GAO-11-888. 
September 30, 2011.
    Information Security: Weaknesses Continue Amid New Federal 
Efforts to Implement Requirements. GAO-12-137. October 13, 
2011.
    Warfighter Support: DOD Has Made Progress, but Supply and 
Distribution Challenges Remain in Afghanistan. GAO-12-138. 
October 17, 2011.
    U.S. Postal Service: Allocation of Responsibility for 
Pension Benefits between the Postal Service and the Federal 
Government. GAO-12-146. October 13, 2011.
    Information Technology: Critical Factors Underlying 
Successful Major Acquisitions. GAO-12-7. October 12, 2011.
    Aviation Security: TSA Has Taken Steps to Enhance Its 
Foreign Airport Assessments, but Opportunities Exist to 
Strengthen the Program. GAO-12-163. October 12, 2011.
    National Preparedness: Improvements Needed for Acquiring 
Medical Countermeasures to Threats from Terrorism and Other 
Sources. GAO-12-121. October 26, 2011.
    Maritime Security: Coast Guard Should Conduct Required 
Inspections of Offshore Energy Infrastructure. GAO-12-37. 
October 28, 2011.
    Border Security: Additional Steps Needed to Ensure That 
Officers Are Fully Trained. GAO-12-36SU. October 31, 2011.
    Biosurveillance: Non-Federal Capabilities Should Be 
Considered in Creating a National Biosurveillance Strategy. 
GAO-12-55. October 31, 2011.
    IT Dashboard: Accuracy Has Improved, and Additional Efforts 
Are Under Way to Better Inform Decision Making. GAO-12-210. 
November 7, 2011.
    Financial Audit: Bureau of the Public Debt's Fiscal Years 
2011 and 2010 Schedules of Federal Debt. GAO-12-164. November 
8, 2011.
    Medicaid: Prototype Formula Would Provide Automatic, 
Targeted Assistance to States during Economic Downturns. GAO-
12-38. November 10, 2011.
    Financial Audit: IRS's Fiscal Years 2011 and 2010 Financial 
Statements. GAO-12-165. November 10, 2011.
    Financial Audit: Securities and Exchange Commission's 
Financial Statements for Fiscal Years 2011 and 2010. GAO-12-
219. November 15, 2011.
    Federal Contracting: OMB's Acquisition Savings Had Results, 
but Improvements Needed. GAO-12-57. November 15, 2011.
    Port Security Grant Program: Risk Model, Grant Management, 
and Effectiveness Measures Could Be Strengthened. GAO-12-47. 
November 17, 2011.
    Coast Guard: Security Risk Model Meets DHS Criteria, but 
More Training Could Enhance Its Use for Managing Programs and 
Operations. GAO-12-14. November 17, 2011.
    Transportation Security Information Sharing: Stakeholders 
Generally Satisfied but TSA Could Improve Analysis, Awareness, 
and Accountability. GAO-12-44. November 21, 2011.
    Immigration Benefits: Consistent Adherence to DHS's 
Acquisition Policy Could Help Improve Transformation Program 
Outcomes. GAO-12-66. November 22, 2011.
    Managing Service Contracts: Recent Efforts to Address 
Associated Risks Can Be Further Enhanced. GAO-12-87. December 
7, 2011.
    Homeland Defense and Weapons of Mass Destruction: 
Additional Steps Could Enhance the Effectiveness of the 
National Guard's Life-Saving Response Forces. GAO-12-114. 
December 7, 2011.
    Foster Children: HHS Guidance Could Help States Improve 
Oversight of Psychotropic Prescriptions. GAO-12-201. December 
14, 2011.
    Arlington National Cemetery: Management Improvements Made, 
but a Strategy Is Needed to Address Remaining Challenges. GAO-
12-105. December 15, 2011.
    Arlington National Cemetery: Additional Actions Needed to 
Continue Improvements in Contract Management. GAO-12-99. 
December 15, 2011.
    Recovery Act: Progress and Challenges in Spending 
Weatherization Funds. GAO-12-195. December 16, 2011.
    DOD Financial Management: Ongoing Challenges with 
Reconciling Navy and Marine Corps Fund Balance with Treasury. 
GAO-12-132. December 20, 2011.
    Federal Employees' Compensation Act: Preliminary 
Observations on Fraud-Prevention Controls. GAO-12-402. January 
25, 2012.
    Chemical, Biological, Radiological, and Nuclear Risk 
Assessments: DHS Should Establish More Specific Guidance for 
Their Use. GAO-12-272. January 25, 2012.
    Federal Contracting: Monitoring and Oversight of Tribal 
8(a) Firms Need Attention. GAO-12-84. January 31, 2012.
    Humanitarian and Development Assistance: Project 
Evaluations and Better Information Sharing needed to Manage the 
Military's Efforts. GAO-12-359. February 8, 2012.
    DHS Human Capital: Senior Leadership Vacancy Rates 
Generally Declined, but Components' Rates Varied. GAO-12-264. 
February 10, 2012.
    Maritime Security: Coast Guard Needs to Improve Use and 
Management of Interagency Operations Centers. GAO-12-202. 
February 13, 2012.
    Information Technology: Departments of Defense and Energy 
Need to Address Potentially Duplicative Investments. GAO-12-
241. February 17, 2012.
    Renewable Energy: Federal Agencies Implement hundreds of 
Initiatives. GAO-12-260. February 27, 2012.
    Homeland Security: DHS Needs Better Project Information and 
Coordination among Four Overlapping Grant Programs. GAO-12-303. 
February 27, 2012.
    Interagency Collaboration: State and Army Personnel 
Rotation Programs Can Build on Positive Results with Additional 
Preparation and Evaluation. GAO-12-386. March 9, 2012.
    Export Controls: Agencies Need to Assess Control List 
Reform's Impact on Compliance Activities. GAO-12-394SU. March 
14, 2012.
    Federal Contracting: Effort to Consolidate Governmentwide 
Acquisition Data Systems Should Be Reassessed. GAO-12-429. 
March 15, 2012.
    Information Security: IRS Needs to Further Enhance Internal 
Control over Financial Reporting and Taxpayer Data. GAO-12-393. 
March 16, 2012.
    Defense Headquarters: Further Efforts to Examine Resource 
Needs and Improve Data Could Provide Additional Opportunities 
for Cost Savings. GAO-12-345. March 21, 2012.
    DOD Financial Management: The Army Faces Significant 
Challenges in Achieving Audit Readiness for Its Military Pay. 
GAO-12-406. March 22, 2012.
    IT Supply Chain: National Security-Related Agencies Need to 
Better Address Risks. GAO-12-361. March 23, 2012.
    Export Controls: Proposed Reforms Create Opportunities to 
Address Enforcement Challenges. GAO-12-246. March 27, 2012.
    Border Security: Opportunities Exist to Ensure More 
Effective Use of DHS's Air and Marine Assets. GAO-12-518. March 
30, 2012.
    2011 Lobbying Disclosure: Observations on Lobbyists' 
Compliance with Disclosure Requirements. GAO-12-492. March 30, 
2012.
    U.S. Postal Service: Mail Processing Network Exceeds What 
Is Needed for Declining Mail Volume. GAO-12-470. April 12, 
2012.
    Defense Health Care: Applying Key Management Practices 
Should Help Achieve Efficiencies with the Military Health 
System. GAO-12-224. April 12, 2012.
    Grants Management: Action Needed to Improve the Timeliness 
of Grant Closeouts by Federal Agencies. GAO-12-360. April 16, 
2012.
    Afghanistan Security: Renewed Sharing of Biometric Data 
Could Strengthen U.S. Efforts to Protect U.S. Personnel from 
Afghan Security Force Attacks. GAO-12-471SU. April 20, 2012.
    Export Controls: U.S. Agencies Need to Assess Control List 
Reform's Impact on Compliance Activities. GAO-12-613. April 23, 
2012.
    U.S. Postal Service: Field Offices' Role in Cost-Reduction 
and Revenue-Generation Efforts. GAO-12-506. April 25, 2012.
    Information Technology Reform: Progress Made; More Needs to 
Be Done to Complete Actions and Measure Results. GAO-12-461. 
April 26, 2012.
    Federal Emergency Management Agency: Workforce Planning and 
Training Could Be Enhanced by Incorporation Strategic 
Management Principles. GAO-12-487. April 26, 2012.
    Checked Baggage Screening: TSA Has Deployed Optimal Systems 
at the Majority of TSA-Regulated Airports, but Could Strengthen 
Cost Estimates. GAO-12-266. April 27, 2012.
    Electronic Health Records: First Year of CMS's Incentive 
Programs Shows Opportunities to Improve Processes to Verify 
Providers Met Requirements. GAO-12-481. April 30, 2012.
    Department of Homeland Security: Further Action Needed to 
Improve Management of Special Acquisition Authority. GAO-12-
557. May 8, 2012.
    Homelessness: Fragmentation and Overlap in Programs 
Highlight the Need to Identify, Assess, and Reduce 
Inefficiencies. GAO-12-491. May 10, 2012.
    Aviation Security: Actions Needed to Address Challenges and 
Potential Vulnerabilities Related to Securing Inbound Air 
Cargo. GAO-12-632. May 10, 2012.
    Financial Audit: Congressional Award Foundation's Fiscal 
Years 2011 and 2010 Financial Statements. GAO-12-682. May 15, 
2012.
    2020 Census: Additional Steps Are Needed to Build on Early 
Planning. GAO-12-626. May 17, 2012.
    Streamlining Government: Questions to Consider When 
Evaluating Proposals to Consolidate Physical Infrastructure and 
Management Functions. GAO-12-542. May 23, 2012.
    Disaster Assistance Workforce: FEMA Could Enhance Human 
Capital Management and Training. GAO-12-538. May 25, 2012.
    Disability Employment: Further Action Needed to Oversee 
Efforts to meet Federal Government Hiring Goals. GAO-12-568. 
May 25, 2012.
    Terrorist Watchlist: Routinely Assessing Impacts of Agency 
Actions since the December 25, 2009, Attempted Attack Could 
Help Inform Future Efforts. GAO-12-476. May 31, 2012.
    National Medicaid Audit Program: CMS Should Improve 
Reporting and Focus on Audit Collaboration with States. GAO-12-
627. June 14, 2012.
    Department of State: Foreign Service Midlevel Staffing Gaps 
Persist Despite Significant Increases in Hiring. GAO-12-721. 
June 14, 2012.
    Recovery Act: Housing Programs Met Spending Milestones, but 
Asset Management Information Needs Evaluation. GAO-12-634. June 
18, 2012.
    Supplemental Security Income: Better Management Oversight 
Needed for Children's Benefits. GAO-12-497. June 26, 2012.
    Management Report: Improvements Needed in Controls over the 
Preparation of the U.S. Consolidated Financial Statements. GAO-
12-529. June 27, 2012.
    Internal Revenue Service: Status of GAO Financial Audit and 
Related Financial Management Recommendations. GAO-12-695. June 
28, 2012.
    Employment for People with Disabilities: Little Is Known 
about the Effectiveness of Fragmented and Overlapping Programs. 
GAO-12-677. June 29, 2012.
    Information Technology Reform: Progress Made but Future 
Cloud Computing Efforts Should Be Better Planned. GAO-12-756. 
July 11, 2012.
    Information Technology Cost Estimation: Agencies Need to 
Address Significant Weaknesses in Policies and Practices. GAO-
12-629. July 11, 2012.
    Justice Grant Programs: DOJ Should Do More to Reduce the 
Risk of Unnecessary Duplication and Enhance Program Assessment. 
GAO-12-517. July 12, 2012.
    Data Center Consolidation: Agencies Making Progress on 
Efforts, but Inventories and Plans Need to Be Completed. GAO-
12-742. July 19, 2012.
    TANF Electronic Benefit Cards: Some States Are Restricting 
Certain TANF Transactions, but Challenges Remain. GAO-12-535. 
July 20, 2012.
    World Health Organization: Reform Agenda Developed, but 
U.S. Actions to Monitor Progress Could Be Enhanced. GAO-12-722. 
July 23, 2012.
    Financial Literacy: Overlap of Programs Suggests There May 
Be Opportunities for Consolidation. GAO-12-588. July 23, 2012.
    United Nations Renovations: Best Practices Could Enhance 
Future Cost Estimates. GAO-12-795. July 25, 2012.
    Coast Guard: Legacy Vessels' Declining Conditions Reinforce 
Need for More Realistic Operational Targets. GAO-12-741. July 
31, 2012.
    Entrepreneurial Assistance: Opportunities Exist to Improve 
Programs' Collaboration, Data-Tracking, and Performance 
Management. GAO-12-819. August 23, 2012.
    Military Disability System: Improved Monitoring Needed to 
Better Track and Manage Performance. GAO-12-676. August 28, 
2012.
    Border Security: State Could Enhance Visa Fraud Prevention 
by Strategically Using Resources and Training. GAO-12-888. 
September 10, 2012.
    Biosurveillance: DHS Should Reevaluate Mission Need and 
Alternatives before Proceeding with BioWatch Generation-3 
Acquisition. GAO-12-810. September 10, 2012.
    Electronic Government Act: Agencies Have Implemented Most 
Provisions, but Key Areas of Attention Remain. GAO-12-782. 
September 12, 2012.
    Department of Homeland Security: Oversight and Coordination 
of Research and Development Should Be Strengthened. GAO-12-837. 
September 12, 2012.
    Asset Forfeiture Programs: Justice and Treasury Should 
Determine Costs and Benefits of Potential Consolidation. GAO-
12-972. September 12, 2012.
    Information Sharing: DHS Has Demonstrated Leadership and 
Progress, but Additional Actions Could Help Sustain and 
Strengthen Efforts. GAO-12-809. September 18, 2012.
    Homeland Security: DHS Requires More Disciplined Investment 
Management to Help Meet Mission Needs. GAO-12-833. September 
18, 2012.
    Countering Violent Extremism: Additional Actions Could 
Strengthen Training Efforts. GAO-12-952SU. September 18, 2012.
    Next Generation Enterprise Network: Navy Implementing 
Revised Approach, but Improvement Needed in Mitigating Risks. 
GAO-12-956. September 19, 2012.
    Strategic Sourcing: Improved and Expanded Use Could Save 
Billions in Annual Procurement Costs. GAO-12-919. September 20, 
2012.
    Homeland Defense: Management Actions Would Improve the 
Army's Domestic Chemical, Biological, Radiological, and Nuclear 
Response Capabilities. GAO-12-765SU. September 24, 2012.
    Organizational Transformation: Enterprise Architecture 
Value Needs to Be Measured and Reported. GAO-12-791. September 
26, 2012.
    Information Technology: DHS Needs to Enhance Management of 
Cost and Schedule for Major Investments. GAO-12-904. September 
26, 2012.
    Managing for Results: Key Considerations for Implementing 
Interagency Collaborative Mechanisms. GAO-12-1022. September 
27, 2012.
    Homeland Security: Agriculture Inspection Program Has Made 
Some Improvements, but Management Challenges Persist. GAO-12-
885. September 27, 2012.
    Department of Homeland Security: Taking Further Action to 
Better Determine Causes of Morale Problems Would Assist in 
Targeting Action Plans. GAO-12-940. September 28, 2012.
    Religious Compensatory Time: Office of Personnel Management 
Action Needed to Clarify Policies for Agencies. GAO-13-96. 
October 12, 2012.
    Rural Water Infrastructure: Additional Coordination Can 
Help Avoid Potentially Duplicative Application Requirements. 
GAO-13-111. October 16, 2012.
    Supply Chain Security: CBP Needs to Conduct Regular 
Assessments of Its Cargo Targeting System. GAO-13-9. October 
25, 2012.
    Financial Audit: Bureau of the Public Debt's Fiscal Years 
2012 and 2011 Schedules of Federal Debt. GAO-13-114. November 
8, 2012.
    Financial Audit: IRS's Fiscal Years 2012 and 2011 Financial 
Statements. GAO-13-120. November 9, 2012.
    Geospatial Information: OMB and Agencies Need to Make 
Coordination a Priority to Reduce Duplication. GAO-13-94. 
November 26, 2012.
    DHS Strategic Workforce Planning: Oversight of 
Departmentwide Efforts Should Be Strengthened. GAO-13-65. 
December 3, 2012.
    DOD Financial Management: Actions Needed to Address 
Deficiencies in Controls over Army Active Duty Military 
Payroll. GAO-13-28. December 12, 2012.

                      VII. OFFICIAL COMMUNICATIONS

    During the 112th Congress, 923 official communications were 
referred to the Committee. Of these, 917 were Executive 
Communications, 3 were Petitions or Memorials, and 3 were a 
Presidential Message. Of the official communications, 345 dealt 
with the District of Columbia.

                       VIII. LEGISLATIVE ACTIONS

    During the 112th Congress, the Committee reported 
significant legislation that was approved by Congress and 
signed into law by the President.
    The following are brief legislative histories of measures 
to the Committee and, in some cases, drafted by the Committee, 
which (1) became public law or (2) were favorably reported from 
the Committee and passed by the Senate, but did not become law. 
In addition to the measures listed below, the Committee 
received during the 112th Congress numerous legislative 
proposals that were not considered or reported, or that were 
reported but not passed by the Senate. Additional information 
on these measures appears in the Committee's Legislative 
Calendar for the 112th Congress, S. Prt. 112-41, Government 
Printing Office (December 31, 2012).

                       MEASURES ENACTED INTO LAW

    The following measures considered by the Committee were 
enacted into Public Law. The descriptions following the signing 
date of each measure note selected provisions of the text, and 
are not intended to serve as section-by-section summaries.
    S. 1487.--Asia-Pacific Economic Cooperation Business Travel 
Cards Act of 2011. (Public Law 112-54). November 12, 2011.
    Authorizes the Secretary of Homeland Security (DHS), in 
coordination with the Secretary of State, during the 7-year 
period ending on September 30, 2018, to issue Asia-Pacific 
Economic Cooperation Business Travel Cards to eligible persons, 
including business leaders and U.S. Government officials 
actively engaged in Asia-Pacific Economic Cooperation (APEC) 
business, who are in good standing in an international trusted 
traveler program of DHS.
    H.R. 2061.--To authorize the presentation of a United 
States flag on behalf of Federal civilian employees who die of 
injuries in connection with their employment. (Public Law 112-
73). December 20, 2011.
    Authorizes a Federal executive agency head to: (1) give a 
U.S. flag for an individual who was an agency employee and who 
died of employment-related injuries suffered as a result of a 
criminal act, an act of terrorism, a natural disaster, or other 
circumstance as determined by the President, upon the request 
of the employee's widow or widower, child, sibling, or parent, 
or other another individual other than the next of kin as 
determined by the Director of the Office of Personnel 
Management (OPM); and (2) disclose unclassified information 
that does not endanger national security to show that such 
employee is eligible to receive a flag.
    S. 384.--To amend title 39, United States Code, to extend 
the authority of the United States Postal Service to issue a 
semipostal to raise funds for breast cancer research.(Public 
Law 112-80). December 23, 2011.
    Extends for 4 years, the authority of the U.S. Postal 
Service (USPS) to issue a semipostal to contribute to funding 
for breast cancer research.
    H.R. 1059.--To protect the safety of judges by extending 
the authority of the Judicial Conference to redact sensitive 
information contained in their financial disclosure reports, 
and for other purposes. (Public Law 112-84). January 3, 2012.
    Revises the Ethics in Government Act of 1978 to extend 
until December 31, 2017, the Judicial Conference's authority to 
redact financial disclosure reports filed by a judicial officer 
or employee if it finds that revealing personal and sensitive 
information could endanger that individual or a family member 
of that individual.
    S. 2038.--To prohibit Members of Congress and employees of 
Congress from using nonpublic information derived from their 
official positions for personal benefit, and for other 
purposes. (Public Law 112-105). April 4, 2012.
    Requires the congressional ethics committees to issue 
interpretive guidance of the rules of each chamber, including 
rules on conflicts of interest and gifts, with respect to the 
prohibition against the use by Members of Congress and 
congressional employees (including legislative branch officers 
and employees), as a means for making a private profit, of any 
nonpublic information derived from their positions as Members 
or congressional employees, or gained from performance of the 
individual's official responsibilities. Declares that such 
Members and employees are not exempt from the insider trading 
prohibitions arising under the securities laws. Requires the 
Secretary of the Senate, the Sergeant at Arms of the Senate, 
and the Clerk of the House of Representatives, by August 31, 
2012, or 90 days after the enactment of this Act, to ensure 
that financial disclosure forms filed by Members, candidates 
for Congress, and congressional officers and employees, in 
calendar year 2012 and in subsequent years be made available to 
the public on the respective official Senate and House websites 
within 30 days after filing. Directs the Secretary, the 
Sergeant at Arms, and the Clerk to develop systems to enable 
the electronic filing of such reports as well as their on-line 
public availability.
    H.R. 2668.--To designate the station of the United States 
Border Patrol located at 2136 South Naco Highway in Bisbee, 
Arizona, as the ``Brian A. Terry Border Patrol Station.'' 
(Public Law 112-113). May 15, 2012.
    Designates the United States Border Patrol station located 
at 2136 South Naco Highway in Bisbee, Arizona, as the ``Brian 
A. Terry Border Patrol Station.''
    H.R. 2297.--To promote the development of the Southwest 
waterfront in the District of Columbia, and for other 
purposes.(Public Law 112-143). July 9, 2012.
    Amends the District of Columbia Official Code to revise 
certain specifications for the authorized transfer by the 
District Council, on behalf of the United States, to the 
District Redevelopment Land Agency of all Federal right, title, 
and interest in the Southwest Waterfront Project Site. 
Authorizes such transfer by one or more quitclaim deeds. 
Authorizes the Agency to lease or sell the Site to a 
redevelopment company or other lessee or purchaser. Repeals the 
United States reversionary interest in such property. Amends 
the Code with respect to the municipal fish wharf and market in 
Southwest D.C. to remove its exclusive character as a fish 
wharf and market and make it simply a market. Repeals its 
designation as the sole wharf for the landing of fish and 
oysters for sale in the District of Columbia. Declares that 
nothing in this Act or any amendment made by it authorizes the 
removal, destruction, or obstruction of the Maine Lobsterman 
Memorial. Authorizes removal of the Memorial, however, from 
this location to another one on the Southwest waterfront of 
Maine Avenue if at the second location there would be a clear, 
unimpeded pedestrian pathway, and line of sight from the 
Memorial to the water.
    H.R. 3902.--To amend the District of Columbia Home Rule Act 
to revise the timing of special elections for local office in 
the District of Columbia.(Public Law 112-145). July 18, 2012.
    Amends the District of Columbia Home Rule Act to require 
the Board of Elections and Ethics, in filling the following 
vacancies, to hold a special election in the District on the 
first Tuesday occurring between 70 and 174 days (currently, the 
first Tuesday occurring more than 114 days) after the vacancy 
occurs which the Board determines, based on a totality of the 
circumstances, taking into account, inter alia, cultural and 
religious holidays and the administrability of the election, 
will provide the greatest level of voter participation. 
Eliminates the specific alternative of a special election on 
the same day as the next general election (without eliminating 
the option of a special election on the same day as the next 
general election).
    S. 2061.--To provide for an exchange of land between the 
Department of Homeland Security and the South Carolina State 
Ports Authority. (Public Law 112-146). July 18, 2012.
    Authorizes the Secretary of Homeland Security (DHS) to 
exchange specified parcels of land owned by the United States 
located on the former U.S. Naval Base Complex in North 
Charleston, South Carolina, (Federal land) for specified 
parcels owned by the South Carolina State Ports Authority (non-
Federal land).
    S. 679.--To reduce the number of executive positions 
subject to Senate confirmation.(Public Law 112-166). August 10, 
2012.
    Eliminates the requirement of Senate approval (advice and 
consent) of specified presidentially-appointed positions in 
Federal agencies and departments. Eliminates the requirement of 
Senate approval of all appointments to and promotions for the 
Commissioned Officer Corps in the Public Health Service and in 
NOAA. Provides that removal of the requirement of Senate 
confirmation of any position in this Act shall not result in 
any such position being placed in the Senior Executive Service 
or alter compensation for such position. Expands the 
requirements for the appointment of a Director of the Census, 
including that such appointment be made without regard to 
political affiliation and that the appointee have a 
demonstrated ability in managing large organizations and 
experience in the collection, analysis, and use of statistical 
data. Establishes the Working Group on Streamlining Paperwork 
for Executive Nominations (Working Group) to study and report 
to the President and specified congressional committees on the 
streamlining of paperwork required for executive nominations 
and review the impact of background investigations requirements 
on the appointments process. Requires the Government 
Accountability Office (GAO) to study and report to Congress and 
the President on presidentially-appointed positions that do not 
require Senate approval.
    S. 300.--To prevent abuse of Government charge cards. 
(Public Law 112-194). October 5, 2012.
    Requires the head of each executive agency that issues and 
uses purchase cards and convenience checks, other than the 
Department of Defense (DOD), to establish and maintain 
safeguards and internal controls to ensure that: (1) records 
are kept of each holder of a purchase card and the applicable 
transaction limits; (2) each purchase card and convenience 
check holder is assigned an approving official; (3) the card 
holder and approving official perform a reconciliation of card 
charges with receipts and other supporting documentation and 
forward a summary report to a certifying official in a timely 
manner; (4) disputed charges are resolved in an appropriate 
manner; (5) payments on purchase card accounts are made 
promptly to avoid interest penalties; (6) rebates and refunds 
earned by the use of such cards are reviewed for accuracy; (7) 
records of each purchase card transaction are retained in 
accordance with standard government policies on disposition of 
records; (8) periodic reviews are performed to determine 
whether each purchase card holder has a need for such card; (9) 
the agency provides appropriate training to purchase card 
holders and supervising officials; (10) the agency has specific 
policies regarding the number of purchase cards issued, the 
authorized credit limits, and the categories of employees 
eligible for purchase cards; (11) effective systems, 
techniques, and technologies are used to prevent or identify 
illegal, improper, or erroneous purchases; (12) purchase cards 
of terminated or transferred employees are invalidated upon 
termination or transfer; and (13) steps are taken to recover 
the cost of erroneous, improper, or illegal purchases made with 
a purchase card or convenience check through salary offsets. 
Imposes similar safeguards and controls for the use of purchase 
cards and convenience checks by DOD personnel.
    H.R. 1791.--To designate the United States courthouse under 
construction at 101 South United States Route 1 in Fort Pierce, 
Florida, as the ``Alto Lee Adams, Sr., United States 
Courthouse.'' (Public Law 112-180). October 10, 2012.
    Designates the U.S. courthouse under construction at 101 
South U.S. Route 1 in Fort Pierce, Florida, as the ``Alto Lee 
Adams, Sr., United States Courthouse.''
    S. 743.--To amend chapter 23 of title 5, United States 
Code, to clarify the disclosures of information protected from 
prohibited personnel practices, require a statement in 
nondisclosure policies, forms, and agreements that such 
policies, forms, and agreements conform with certain disclosure 
protections, provide certain authority for the Special Counsel, 
and for other purposes. (Public Law 112-199). November 27, 
2012.
    Amends Federal personnel law relating to whistleblower 
protections to provide that such protections shall apply to a 
disclosure of any violation of law (currently, a violation of 
law).
    Provides that a disclosure shall not be excluded from 
whistleblower protections because: (1) the disclosure was made 
to a supervisor or to a person who participated in an activity 
that the employee or applicant for employment reasonably 
believed to evidence gross mismanagement, gross waste of funds, 
abuse of authority, or a substantial and specific danger to 
public health or safety; (2) the disclosure revealed 
information that had been previously disclosed; (3) of the 
employee or applicant's motive for making the disclosure; (4) 
the disclosure was not made in writing; (5) the disclosure was 
made while the employee was off duty; or (6) of the amount of 
time which has passed since the occurrence of the events 
described in the disclosure. Provides that a disclosure shall 
not be excluded from whistleblower protections if it is made 
during the normal course of duties of an employee with respect 
to whom another employee with authority took, failed to take, 
or threatened to take or fail to take a personnel action in 
reprisal for the disclosure.
    H.R. 915.--To establish a Border Enforcement Security Task 
Force program to enhance border security by fostering 
coordinated efforts among Federal, State, and local border and 
law enforcement officials to protect United States border 
cities and communities from trans-national crime, including 
violence associated with drug trafficking, arms smuggling, 
illegal alien trafficking and smuggling, violence, and 
kidnapping along and across the international borders of the 
United States, and for other purposes. (Public Law 112-205). 
December 7, 2012.
    Amends the Homeland Security Act of 2002 to establish 
within the Department of Homeland Security (DHS) the Border 
Enforcement Security Task Force (BEST), which shall establish 
units to enhance border security by addressing and reducing 
border security threats and violence by: (1) facilitating 
collaboration among Federal, State, local, tribal, and foreign 
law enforcement agencies to execute coordinated activities in 
furtherance of border security and homeland security; and (2) 
enhancing information-sharing, including the dissemination of 
homeland security information among such agencies. Authorizes 
the Secretary of Homeland Security to establish BEST units in 
jurisdictions in which such units can contribute to BEST 
missions.
    S. 1379.--To amend title 11, District of Columbia Official 
Code, to revise certain administrative authorities of the 
District of Columbia courts, and to authorize the District of 
Columbia Public Defender Service to provide professional 
liability insurance for officers and employees of the Service 
for claims relating to services furnished within the scope of 
employment with the Service. (Public Law 112-229). December 28, 
2012.
    Amends the District of Columbia Official Code to require 
the chief judge of the District of Columbia Court of Appeals 
to: (1) call biennial or, as under current law, annual judicial 
conferences; and (2) summon active magistrate judges to such 
conferences. Authorizes the chief judges of the District 
Superior Court and of the District Court of Appeals to toll or 
delay judicial proceedings in certain natural disaster or other 
emergency situations. Amends the District of Columbia Court 
Reform and Criminal Procedure Act of 1970 to require the 
District of Columbia Public Defender Service, to the extent its 
Director considers appropriate, to provide representation for 
and hold harmless, or provide liability insurance for, any 
employee, member of the Board of Trustees, or officer of the 
Service for money damages arising out of any claim, proceeding, 
or case at law relating to the furnishing of representational, 
management, or related services while acting within the scope 
of that person's office or employment, including employment 
actions, injury, loss of liberty, property damage, loss of 
property, personal injury, or death arising from the officer's 
or employee's malpractice or negligence. Reduces from 5 to 3 
years, the term an individual may be assigned to serve as a 
judge of the Family Court of the Superior Court.
    S. 1998.--To obtain an unqualified audit opinion, and 
improve financial accountability and management at the 
Department of Homeland Security. (Public Law 112-217). December 
28, 2012.
    Directs the Secretary of Homeland Security, in order to 
comply with the Department of Homeland Security Financial 
Accountability Act, to ensure that the balance sheet of the 
Department of Homeland Security (DHS) and associated statement 
of custodial activity for Fiscal Year 2012 and Fiscal Year 
2013, and the full set of consolidated financial statements of 
DHS for Fiscal Year 2014 through Fiscal Year 2016, are ready in 
a timely manner and in preparation for an audit as part of 
preparing required performance and accountability reports. 
Directs the Chief Financial Officer of DHS to: (1) submit a 
report on the plans to obtain an unqualified opinion annually 
until an unqualified opinion is submitted, and (2) submit to 
Congress and the Comptroller General a report on DHS's plans 
and resources needed to modernize DHS's financial systems. 
Directs the Comptroller General to submit a report that 
provides: (1) an assessment of the status of the financial 
system modernization by DHS; (2) an assessment of the plans to 
modernize, and developments at DHS relating to, DHS's financial 
system; and (3) recommendations for improving the plans for a 
new financial system at DHS.
    S. 2170.--To amend the provisions of title 5, United States 
Code, which are commonly referred to as the 'Hatch Act', to 
scale back the provision forbidding certain State and local 
employees from seeking elective office, clarify the application 
of certain provisions to the District of Columbia, and modify 
the penalties which may be imposed for certain violations under 
subchapter III of chapter 73 of that title. (Public Law 112-
230). December 28, 2012.
    Allows a State or local officer or employee to be a 
candidate for partisan elective office unless the salary of 
such officer or employee is paid completely, directly or 
indirectly, by loans or grants made by the United States or a 
Federal agency. Redefines ``state or local agency'' for 
purposes of the Hatch Act to include the executive branch of 
the District of Columbia, or an agency or department thereof. 
Extends the exemption from the prohibition against running for 
elective office to the head of an executive department of the 
District of Columbia who is not classified under an applicable 
merit or civil-service system. Replaces existing penalty 
provisions for violations of the Hatch Act to make an offending 
employee subject to removal (currently, removal is mandatory), 
reduction in grade, debarment from Federal employment for 5 
years, suspension, reprimand, or a civil penalty of not more 
than $1,000.
    S. 3315.--To repeal or modify certain mandates of the 
Government Accountability Office. (Public Law 112-234). 
December 28, 2012.
    Amends the Arizona-Idaho Conservation Act of 1988 to 
require audits of the transactions of the U.S. Capitol 
Preservation Commission at least once every 3 years, rather 
than annually, unless the Chairman or Ranking Member of the 
House Committee on House Administration or the Senate Committee 
on Rules and Administration, the Secretary of the Senate, or 
the Clerk of the House of Representatives requests that an 
audit be conducted at an earlier date. Amends the Federal 
judicial code to repeal the requirement that the Comptroller 
General (GAO) review contributions to the Judicial Survivors' 
Annuities Fund at the end of each 3-fiscal year period. Amends 
the Veterans' Benefits Act of 2010 to modify the annual GAO 
reporting requirement for the demonstration project for 
referral of claims under the Uniformed Services Employment and 
Reemployment Rights Act of 1994 to the Office of Special 
Counsel to require only one annual report after the 
commencement of the demonstration project. And amends other GAO 
requirements.
    S. 3564.--To extend the Public Interest Declassification 
Act of 2000 until 2014 and for other purposes. (Public Law 112-
235). December 28, 2012.
    Amends the Public Interest Declassification Act of 2000: 
(1) with respect to term limits for members of the Public 
Interest Declassification Board, and (2) to extend Board 
authority through 2018.

                          POSTAL NAMING BILLS

    H.R. 298--To designate the facility of the U.S. Postal 
Service located at 500 East Whitestone Boulevard in Cedar Park, 
Texas, as the ``Army Specialist Matthew Troy Morris Post Office 
Building.'' (Public Law 112-107). May 15, 2012.
    H.R. 771--To designate the facility of the United States 
Postal Service located at 1081 Elbel Road in Schertz, Texas, as 
the ``Schertz Veterans Post Office.'' (Public Law 112-38). 
October 12, 2011.
    H.R. 789--To designate the facility of the United States 
Postal Service located at 20 Main Street in Little Ferry, New 
Jersey, as the ``Sergeant Matthew J. Fenton Post Office.'' 
(Public Law 112-83). January 3, 2012.
    H.R. 793--To designate the facility of the U.S. Postal 
Service located at 12781 Sir Francis Drake Boulevard in 
Inverness, California, as the ``Specialist Jake Robert Velloza 
Post Office.'' (Public Law 112-15). May 31, 2011.
    H.R. 1369--To designate the facility of the United States 
Postal Service located at 1021 Pennsylvania Avenue in 
Hartshorne, Oklahoma, as the ``Warren Lindley Post Office.'' 
(Public Law 112-156). August 10, 2012.
    H.R. 1423--To designate the facility of the U.S. Postal 
Service located at 115 4th Avenue Southwest in Ardmore, 
Oklahoma, as the ``Specialist Michael E. Phillips Post 
Office.'' (Public Law 112-108). May 15, 2012.
    H.R. 1632--To designate the facility of the United States 
Postal Service located at 5014 Gary Avenue in Lubbock, Texas, 
as the ``Sergeant Chris Davis Post Office.'' (Public Law 112-
39). October 12, 2011.
    H.R. 1843--To designate the facility of the U.S. Postal 
Service located at 489 Army Drive in Barrigada, Guam, as the 
``John Pangelinan Gerber Post Office Building.'' (Public Law 
112-47). November 7, 2011.
    H.R. 1975--To designate the facility of the U.S. Postal 
Service located at 281 East Colorado Boulevard in Pasadena, 
California, as the ``First Lieutenant Oliver Goodall Post 
Office Building.'' (Public Law 112-48). November 7, 2011.
    H.R. 2062--To designate the facility of the U.S. Postal 
Service located at 45 Meetinghouse Lane in Sagamore Beach, 
Massachusetts, as the ``Matthew A. Pucino Post Office.'' 
(Public Law 112-49). November 7, 2011.
    H.R. 2079--To designate the facility of the U.S. Postal 
Service located at 10 Main Street in East Rockaway, New York, 
as the ``John C. Cook Post Office.'' (Public Law 112-109). May 
15, 2012.
    H.R. 2149--To designate the facility of the U.S. Postal 
Service located at 4354 Pahoa Avenue in Honolulu, Hawaii, as 
the ``Cecil L. Heftel Post Office Building.'' (Public Law 112-
50). November 7, 2011.
    H.R. 2213--To designate the facility of the U.S. Postal 
Service located at 801 West Eastport Street in Iuka, 
Mississippi, as the ``Sergeant Jason W. Vaughn Post Office.'' 
(Public Law 112-110). May 15, 2012.
    H.R. 2244--To designate the facility of the U.S. Postal 
Service located at 67 Castle Street in Geneva, New York, as the 
``Corporal Steven Baines Riccione Post Office.'' (Public Law 
112-111). May 15, 2012.
    H.R. 2415--To designate the facility of the U.S. Postal 
Service located at 11 Dock Street in Pittston, Pennsylvania, as 
the ``Trooper Joshua D. Miller Post Office Building.'' (Public 
Law 112-124). June 5, 2012.
    H.R. 2422--To designate the facility of the United States 
Postal Service located at 45 Bay Street, Suite 2, in Staten 
Island, New York, as the ``Sergeant Angel Mendez Post Office.'' 
(Public Law 112-89). January 3, 2012.
    H.R. 2660--To designate the facility of the U.S. Postal 
Service located at 122 North Holderrieth Boulevard in Tomball, 
Texas, as the ``Tomball Veterans Post Office.'' (Public Law 
112-112). May 15, 2012.
    H.R. 2767--To designate the facility of the U.S. Postal 
Service located at 8 West Silver Street in Westfield, 
Massachusetts, as the ``William T. Trant Post Office.'' (Public 
Law 112-114). May 15, 2012.
    H.R. 3004--To designate the facility of the U.S. Postal 
Service located at 260 California Drive in Yountville, 
California, as the ``Private First Class Alejandro R. Ruiz Post 
Office Building.'' (Public Law 112-115). May 15, 2012.
    H.R. 3220--To designate the facility of the U.S. Postal 
Service located at 170 Evergreen Square SW in Pine City, 
Minnesota, as the ``Master Sergeant Daniel L. Fedder Post 
Office.'' (Public Law 112-125). June 5, 2012.
    H.R. 3246--To designate the facility of the U.S. Postal 
Service located at 15455 Manchester Road in Ballwin, Missouri, 
as the ``Specialist Peter J. Navarro Post Office Building.'' 
(Public Law 112-116). May 15, 2012.
    H.R. 3247--To designate the facility of the U.S. Postal 
Service located at 1100 Town and Country Commons in 
Chesterfield, Missouri, as the ``Lance Corporal Matthew P. 
Pathenos Post Office Building.'' (Public Law 112-117). May 15, 
2012.
    H.R. 3248--To designate the facility of the U.S. Postal 
Service located at 112 South 5th Street in Saint Charles, 
Missouri, as the ``Lance Corporal Drew W. Weaver Post Office 
Building.''
    (Public Law 112-118). May 15, 2012.
    H.R. 3276--To designate the facility of the United States 
Postal Service located at 2810 East Hillsborough Avenue in 
Tampa, Florida, as the ``Reverend Abe Brown Post Office 
Building.'' (Public Law 112-159). August 10, 2012.
    H.R. 3412--To designate the facility of the United States 
Postal Service located at 1421 Veterans Memorial Drive in 
Abbeville, Louisiana, as the ``Sergeant Richard Franklin 
Abshire Post Office Building.'' (Public Law 112-160). August 
10, 2012.
    H.R. 3413--To designate the facility of the U.S. Postal 
Service located at 1449 West Avenue in Bronx, New York, as the 
``Private Isaac T. Cortes Post Office.'' (Public Law 112-126). 
June 5, 2012.
    H.R. 3477--To designate the facility of the United States 
Postal Service located at 133 Hare Road in Crosby, Texas, as 
the ``Army First Sergeant David McNerney Post Office 
Building.'' (Public Law 112-219). December 28, 2012.
    H.R. 3501--To designate the facility of the United States 
Postal Service located at 125 Kerr Avenue in Rome City, 
Indiana, as the ``SPC Nicholas Scott Hartge Post Office.'' 
(Public Law 112-161). August 10, 2012.
    H.R. 3772--To designate the facility of the United States 
Postal Service located at 150 South Union Street in Canton, 
Mississippi, as the ``First Sergeant Landres Cheeks Post Office 
Building.'' (Public Law 112-162). August 10, 2012.
    H.R. 3870--To designate the facility of the United States 
Postal Service located at 6083 Highway 36 West in Rose Bud, 
Arkansas, as the ``Nicky `Nick' Daniel Bacon Post Office.'' 
(Public Law 112-221). December 28, 2012.
    H.R. 3912--To designate the facility of the United States 
Postal Service located at 110 Mastic Road in Mastic Beach, New 
York, as the ``Brigadier General Nathaniel Woodhull Post Office 
Building.'' (Public Law 112-222). December 28, 2012.
    H.R. 5738--To designate the facility of the United States 
Postal Service located at 15285 Samohin Drive in Macomb, 
Michigan, as the ``Lance Cpl. Anthony A. DiLisio Clinton-Macomb 
Carrier Annex.'' (Public Law 112-223). December 28, 2012.
    H.R. 5837--To designate the facility of the United States 
Postal Service located at 26 East Genesee Street in 
Baldwinsville, New York, as the ``Corporal Kyle Schneider Post 
Office Building.'' (Public Law 112-224). December 28, 2012.
    H.R. 5954--To designate the facility of the United States 
Postal Service located at 320 7th Street in Ellwood City, 
Pennsylvania, as the ``Sergeant Leslie H. Sabo, Jr. Post Office 
Building.'' (Public Law 112-225). December 28, 2012.
    S. 349--To designate the facility of the U.S. Postal 
Service located at 4865 Tallmadge Road in Rootstown, Ohio, as 
the ``Marine Sgt. Jeremy E. Murray Post Office.'' (Public Law 
112-22). June 29, 2011.
    S. 655--To designate the facility of the U.S. Postal 
Service located at 95 Dogwood Street in Cary, Mississippi, as 
the ``Spencer Byrd Powers Jr. Post Office.'' (Public Law 112-
23). June 29, 2011.
    S. 1412--To designate the facility of the U.S. Postal 
Service located at 462 Washington Street, Woburn, 
Massachusetts, as the ``Officer John Maguire Post Office.'' 
(Public Law 112-60). November 23, 2011.
    S. 3630--To designate the facility of the United States 
Postal Service located at 218 North Milwaukee Street in 
Waterford, Wisconsin, as the ``Captain Rhett W. Schiller Post 
Office.'' (Public Law 112-279). January 14, 2013.
    S. 3662--To designate the facility of the United States 
Postal Service located at 6 Nichols Street in Westminster, 
Massachusetts, as the ``Lieutenant Ryan Patrick Jones Post 
Office Building.'' (Public Law 112-280). January 14, 2013.

                      IX. PRESIDENTIAL NOMINATIONS

    The Committee received a total of 38 Presidential 
nominations during the 112th Congress. Of these, 19 were 
reported favorably and confirmed by the Senate, 9 were 
discharged from Committee and confirmed, 2 were withdrawn by 
the President, and 7 were not acted upon by the Committee. 
Hearing dates and reports on these nominations appear in 
Section IV.
    The following 19 nominations were favorably reported by the 
Committee and confirmed by the Senate:
    Carolyn N. Lerner, of Maryland, to be Special Counsel, 
Office of Special Counsel, vice Scott J. Bloch, resigned. 
Confirmed April 14, 2011.
    Rafael Borras, of Maryland, to be Under Secretary for 
Management, Department of Homeland Security, vice Elaine C. 
Duke, resigned. Confirmed April 14, 2011.
    Heather A. Higginbottom, of the District of Columbia, to be 
Deputy Director of the Office of Management and Budget, vice 
Robert L. Nabors, resigned. Confirmed October 20, 2011.
    Jennifer A. DiToro, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia, vice Judith E. Retchin, retired. Confirmed August 2, 
2011.
    Yvonne M. Williams, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia, vice Brook Hedge, retired. Confirmed August 2, 2011.
    Corinne Ann Beckwith, of the District of Columbia, to be an 
Associate Judge of the District of Columbia Court of Appeals, 
vice Inez Smith Reid, retired. Confirmed November 18, 2011.
    Ronald David McCray, of Texas, to be a Member of the 
Federal Retirement Thrift Investment Board, vice Andrew Saul, 
resigned. Confirmed November 18, 2011.
    Ronald David McCray, of Texas, to be a Member of the 
Federal Retirement Thrift Investment Board (Reappointment). 
Confirmed November 18, 2011.
    John Francis McCabe, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia, vice James E. Boasberg, resigned. Confirmed November 
18, 2011.
    Peter Arno Krauthamer, of the District of Columbia, to be 
an Associate Judge of the Superior Court of the District of 
Columbia, vice John Henry Bayly Jr., retired. Confirmed 
November 18, 2011.
    Danya Ariel Dayson, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia, vice Stephanie Duncan-Peters, retired. Confirmed 
November 18, 2011.
    Catharine Friend Easterly, of the District of Columbia, to 
be an Associate Judge of the Superior Court of the District of 
Columbia, vice A. Noel Anketell Kramer, retired. Confirmed 
November 18, 2011.
    Nancy Maria Ware, of the District of Columbia, to be 
Director of the Court Services and Offender Supervision Agency 
for the District of Columbia, vice Paul A. Quander Jr., term 
expired. Confirmed November 18, 2011.
    Ernest Mitchell Jr., of California, to be Administrator of 
the United States Fire Administration, Federal Emergency 
Management Agency, Department of Homeland Security, vice Kelvin 
James Cochran, resigned. Confirmed November 18, 2011.
    Michael A. Hughes, of the District of Columbia, to be 
United States Marshal of the Superior Court of the District of 
Columbia, vice Stephen Thomas Conboy, resigned. Confirmed 
November 18, 2011.
    Roy Wallace McLeese III, of the District of Columbia, to be 
an Associate Judge of the District of Columbia Court of 
Appeals, vice Vanessa Ruiz, retired. Confirmed May 24, 2012.
    Tony Hammond, of Missouri, to be a Commissioner of the 
Postal Regulatory Commission, vice Dan Blair, resigned. 
Confirmed April 26, 2012.
    Mark A. Robbins, of California, to be a Member of the Merit 
Systems Protection Board, vice Mary M. Rose, term expired. 
Confirmed April 26, 2012.
    Joseph G. Jordan, of Massachusetts, to be Administrator for 
Federal Procurement Policy, vice Daniel I. Gordon. Confirmed 
May 24, 2012.
    The following 9 nominations were discharged by the 
Committee and confirmed:
    Mark D. Acton, of Kentucky, to be a Commissioner of the 
Postal Regulatory Commission (Reappointment). Confirmed 
September 29, 2011.
    Robert G. Taub, of New York, to be a Commissioner of the 
Postal Regulatory Commission, vice Tony Hammond, term expired. 
Confirmed September 26, 2011.
    David A. Montoya, of Texas, to be Inspector General, 
Department of Housing and Urban Development, vice Kenneth M. 
Donohue Sr., resigned. Confirmed November 18, 2011.
    Michael E. Horowitz, of Maryland, to be Inspector General, 
Department of Justice, vice Glenn A. Fine, resigned. Confirmed 
March 29, 2012.
    Irvin Charles McCullough III, of Maryland, to be Inspector 
General of the Intelligence Community, Office of the Director 
of National Intelligence (New position). Confirmed November 7, 
2011.
    Deborah J. Jeffrey, of the District of Columbia, to be 
Inspector General Corporation for National and Community 
Service, vice Gerald Walpin. Confirmed June 29, 2012.
    Christy L. Romero, of Virginia, to be Special Inspector 
General for the Troubled Asset Relief Program, vice Neil M. 
Barofsky, resigned. Confirmed March 29, 2012.
    Walter M. Shaub Jr., of Virginia, to be Director of the 
Office of Government Ethics, vice Robert Irwin Cusick Jr., term 
expired. Confirmed January 1, 2013.
    Kimberley Sherri Knowles, of the District of Columbia, to 
be an Associate Judge of the Superior Court of the District of 
Columbia, vice Zinora M. Mitchell, retired. Confirmed August 2, 
2012.
      
    The following 1 nomination was favorably reported by the 
Committee but not acted upon by the Senate. It was returned to 
the President under provisions of Senate Rule XXXI, paragraph 
6, of the Standing Rules of the Senate:
    Donna Mary Murphy, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia, vice Kaye K. Christian, retired. Returned January 3, 
2013.
    The following 2 nominations were withdrawn by the 
President:
    Jonathan Andrew Hatfield, of Virginia, to be Inspector 
General, Corporation for National and Community Service, vice 
Gerald Walpin. Nomination withdrawn April 8, 2011.
    Roslyn Ann Mazer, of Maryland, to be Inspector General, 
Department of Homeland Security, vice Richard L. Skinner, 
resigned. Nomination withdrawn June 7, 2012.
    The following 7 nominations were not acted upon by the 
Committee. Each was returned to the President under provisions 
of Senate Rule XXXI, paragraph 6, of the Standing Rules of the 
Senate:
    Katherine C. Tobin, of New York, to be a Governor of the 
United States Postal Service, vice Carolyn L. Gallagher, term 
expired. Returned January 3, 2013.
    Rainey Ransom Brandt, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia, vice Joan Z. McAvoy, retired. Returned January 3, 
2013.
    James C. Miller III, of Virginia, to be a Governor of the 
United States Postal Service (Reappointment). Returned January 
3, 2013.
    Stephen Crawford, of Maryland, to be a Governor of the 
United States Postal Service, vice Alan C. Kessler, resigned. 
Returned January 3, 2013.
    Robert D. Okun, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia, vice Linda Kay Davis, retired. Returned January 3, 
2013.
    Ernest W. Dubester, of Virginia, to be a Member of the 
Federal Labor Relations Authority for a term of 5 years 
expiring July 29, 2017 (Reappointment). Returned January 3, 
2013.
    Carol Waller Pope, of the District of Columbia, to be a 
Member of the Federal Labor Relations Authority for a term of 5 
years expiring July 1, 2014 (Reappointment). Returned January 
3, 2013.
                   X. ACTIVITIES OF THE SUBCOMMITTEES


                   SUBCOMMITTEE ON FEDERAL FINANCIAL


                  MANAGEMENT, GOVERNMENT INFORMATION,


              FEDERAL SERVICES, AND INTERNATIONAL SECURITY


                       Chairman: Thomas R. Carper


        Ranking Minority Member: Scott P. Brown of Massachusetts


                              I. Hearings

    The Subcommittee on Federal Financial Management, 
Government Information, Federal Services, and International 
Security held the following hearings during the 112th Congress.
    1. March 2, 2011, ``Preventing Abuse of the Military's 
Tuition Assistance Program.''
    This hearing sought to identify the weaknesses in DOD's 
ability to mitigate abuses of its Tuition Assistance Program. 
Moreover, this hearing aimed to improve Federal oversight of 
the program in order to ensure that service members receive the 
high quality education they deserve.
    Witnesses: Hon. Tom Harkin, U.S. Senator, State of Iowa; 
Robert L. Gordon, III, Deputy Assistant Secretary of Defense 
for Military Community and Family Policy, U.S. Department of 
Defense; George A. Scott, Director of Education, Workforce, and 
Income Security Issues, U.S. Government Accountability Office; 
Kathryn M. Snead, Director, Servicemembers Opportunity 
Colleges.
    2. March 9, 2011, ``New Tools for Curbing Waste and Fraud 
in Medicare and Medicaid.''
    The hearing examined new efforts by the Centers for 
Medicare and Medicaid Services (CMS) to curb waste and fraud in 
the Medicare and Medicaid programs. CMS is currently 
implementing program integrity provisions of the Affordable 
Care Act, which provide new statutory authority and 
requirements to both prevent and identify fraud and 
overpayments. These include requirements to improve screening 
of Medicare providers, end payments to providers when there is 
credible evidence of fraud, and also to extend Recovery Audit 
Contracting to all of Medicare and Medicaid. Further, CMS is 
implementing new regulations and other program changes based on 
previously existing authority. Finally, there are a host of 
additional ideas for curbing waste and fraud that are under 
consideration for both programs.
    Witnesses: Peter Budetti, M.D., CMS Deputy Administrator 
and Director, Center for Program Integrity, Centers for 
Medicare and Medicaid Services; Gregory Andres, Acting Deputy 
Assistant Attorney General, Criminal Division, U.S. Department 
of Justice; Daniel R. Levinson, Inspector General, U.S. 
Department of Health and Human Services; Kathleen M. King, 
Director, Health Care, U.S. Government Accountability Office; 
Helen Carson, Volunteer Service Coordinator, Case Manager, 
Delaware Partners of Senior Medicare Patrol, State of Delaware 
Department of Health and Social Services.
    3. March 15, 2011, ``Enhancing the President's Authority to 
Eliminate Wasteful Spending and Reduce the Budget Deficit.''
    This hearing sought to create meaningful dialogue 
surrounding the President's abilities to get Congress to 
consider spending cuts. Chairman Carper discussed enhancing the 
President's existing authority without overstepping 
constitutional boundaries.
    Witnesses: Maya MacGuineas, President, Committee for a 
Responsible Federal Budget; Virginia A. McMurtry, Specialist in 
American National Government, Congressional Research Service, 
Library of Congress; Todd B. Tatelman, Legislative Attorney, 
Congressional Research Service, Library of Congress; and Thomas 
A. Schatz, President, Citizens Against Government Waste.
    4. March 29, 2011, ``Tools to Prevent Defense Department 
Cost Overruns.''
    This hearing studied whether the Administration and 
Congress posses sufficient tools to combat and prevent 
significant acquisition costs overruns and examined whether 
additional mechanisms are needed to achieve this goal.
    Witnesses: Frank Kendall, Principal Deputy Under Secretary 
of Defense, Acquisition, Technology and Logistics, U.S. 
Department of Defense; Richard Burke, Ph.D., Deputy Director of 
Cost Assessment, U.S. Department of Defense; Hon. John J. 
Young, Jr., Senior Fellow, The Potomac Institute for Policy 
Studies; Michael J. Sullivan, Director, Acquisition Sourcing 
Management, U.S. Government Accountability Office; and Moshe 
Schwartz, Specialist in Defense Acquisition, Congressional 
Research Service, Library of Congress.
    5. April 6, 2011, ``Census: Learning Lessons from 2010, 
Planning for 2020.''
    The purpose of the hearing was to identify lessons learned 
from the 2010 Census, identify technological advances that can 
be used to improve data quality, and reexamine areas that could 
help produce a more cost-effective 2020 Census. The hearing 
also assessed recent developments with the American Community 
Survey, an ongoing statistical survey that produces demographic 
information.
    Witnesses: Hon. Robert M. Groves, Director, U.S. Census 
Bureau; Todd J. Zinser, Inspector General, U.S. Department of 
Commerce, Robert Goldenkoff, Director, Strategic Issues, U.S. 
Government Accountability Office; Daniel Castro, Senior 
Analyst, Information Technology and Innovation Foundation; 
Thomas M. Cook, Co-Chair, National Research Council Panel to 
Review the 2010 Census; and Arturo Vargas, Executive director, 
National Association of Latino Elected and Appointed Officials 
(NALEO) Educational Fund.
    6. April 12, 2011, ``Examining the President's Plan for 
Eliminating Wasteful Spending in Information Technology.''
    This hearing explored the Office of Management and Budget 
plan to eliminate wasteful spending, find out what progress has 
been made to date, and discussed what more should be done. In 
addition, several examples of failed IT projects identified and 
analyzed by GAO were discussed. Lessons learned from these 
failures and how they are being applied to our future 
investments was also explored.
    Witnesses: Vivek Kundra, Federal Chief Information Officer, 
Administrator for Electronic Government and Information 
Technology, Office of Management and Budget; David McClure, 
Associate Administrator, Office of Citizen Services and 
Innovative Technologies, U.S. General Services Administration; 
David A. Powner, Director of Information Technology Management 
Issues, U.S. Government Accountability Office; Stephen W.T. 
O'Keefe, Founder, MeriTalk; Rishi Sood, Vice President, 
Government Vertical Industries Gartner Inc.; and Alfred Grasso, 
President and Chief Executive Officer, The MITRE Corporation.
    7. May 10, 2011, Joint Hearing with the Subcommittee on 
Oversight of Government Management, the Federal Workforce, and 
the District of Columbia: ``Roadmap for a More Efficient and 
Accountable Federal Government: Implementing the GPRA 
Modernization Act.''
    This hearing examined the implementation of the GPRA 
Modernization Act, with particular focus on ensuring the 
Congressional intent behind the law is faithfully executed. The 
hearing also studied how the Office of Management and Budget 
and the Government Accountability Office can best work together 
to leverage scarce resources and ensure the most transformative 
aspects of the law are fully implemented across the Federal 
Government.
    Witnesses: Hon. Jeffrey D. Zients, Federal Chief 
Performance Officer and Deputy Director for Management, Office 
of Management and Budget; Hon. Eugene L. Dodaro, Comptroller 
General of the United States, U.S. Government Accountability 
Office; Robert J. Shea, Former Associate Director for 
Administration and Government Performance, Office of Management 
and Budget; Paul L. Posner, Professor and Director, Public 
Administration Program, George Mason University; and Jonathan 
D. Breul, Executive Director, IBM Center for The Business of 
Government.
    8. May 17, 2011, ``Addressing the U.S. Postal Service's 
Financial Crisis.''
    This hearing examined the nature of the Postal Service's 
ongoing financial problems, the impact these problems are 
having on postal operations, postal managements plans to cut 
costs, and Senator Carper's legislative proposals on postal 
issues.
    Witnesses: Hon. Patrick R. Donahoe, Postmaster General and 
Chief Executive Officer, U.S. Postal Service; Phillip R. Herr, 
Director, Physical Infrastructure Issues, U.S. Government 
Accountability Office; Margaret Cigno, Director of 
Accountability and Compliance, U.S. Postal Regulatory 
Commission; Hon. David C. Williams, Inspector General, U.S. 
Postal Service; Clint Guffey, President, American Postal 
Workers Union, AFL-CIO; Mark Strong, President, National League 
of Postmasters; and Jerry Cerasale, Senior Vice President, 
Government Affairs, Direct Marketing Association.
    9. May 25, 2011, ``Assessing Efforts to Eliminate Improper 
Payments.''
    This hearing examined initiatives by the Administration to 
reduce by half the improper payments made by Federal agencies, 
including the initiative to establish a government ``Do Not 
Pay'' list. Federal agencies made an estimated $125 billion in 
improper payments in fiscal year 2010 and The Improper Payments 
Elimination and Recovery Act requires Federal agencies to 
establish plans and procedures to curb improper payments and in 
June 2010, President Obama signed the Enhancing Payment 
Accuracy Through a ``Do Not Pay List'' Executive Order (EO 
13520). The initiative attempts to prevent improper payments 
before they are made by requiring agencies to check centralized 
lists of disbarred, ineligible, or otherwise excluded 
individuals, and agencies have begun to establish related pilot 
programs. The Subcommittee hearing explored the implementation 
of the executive order, as well as the potential next steps for 
the initiative.
    Witnesses: Hon. Daniel I. Werfel, Controller, Office of 
Management and Budget; Hon. Richard L. Gregg, Fiscal Assistant 
Secretary, U.S. Department of the Treasury; Hon. Robert F. 
Hale, Under Secretary of Defense, and Chief Financial Officer, 
U.S. Department of Defense; Hon. Calvin L. Scovel, III, Vice 
Chairman, Recovery Accountability and Transparency Board; and 
Kelly Croft, Deputy Commissioner for Systems, U.S. Social 
Security Administration.
    10. June 9, 2011, ``Federal Asset Management: Eliminating 
Waste by Disposing of Unneeded Federal Real Property.''
    This hearing assessed the progress made to date in 
addressing weaknesses in Federal property management and 
examined whether a civilian BRAC process would be an effective 
strategy in realigning Federal real property, disposing of 
unneeded assets, and mitigating the problem of heavy reliance 
on costly leasing.
    Witnesses: Hon. Alan Dixon, Former Chairman, 1995 Defense 
Base Realignment and Closure Commission; David B. Baxa, Chief 
Executive Officer, VISTA Technology Services, Inc.; Tim Ford, 
Chief Executive Officer, Association of Defense Communities; 
Maria Foscarinis, Executive Director, National Law Center on 
Homelessness and Poverty; Daniel I. Werfel, Controller, Office 
of Management and Budget; Robert Peck, Commissioner, Public 
Buildings Service, U.S. General Services Administration; James 
Sullivan, Director, Office of Asset Enterprise Management, U.S. 
Office of Veterans Affairs; David J. Wise, Director, Physical 
Infrastructure Issues, U.S. Government Accountability Office; 
and Brian J. Lepore, Director, Defense Capabilities and 
Management Issues, U.S. Government Accountability Office.
    11. June 20, 2011, Field hearing in Boston, Massachusetts, 
``How is NOAA Managing Funds to Protect the Domestic Fishing 
Industry.''
    Under provisions of the Magnuson-Stevens Fishery 
Conservation and Management Act (MSA), the National Oceanic and 
Atmospheric Agency (NOAA) has authority to retain proceeds from 
civil penalties it imposes and collects for violations of the 
Act, to pay for certain expenses directly related to 
investigations and civil or criminal enforcement proceedings. 
NOAA's Asset Forfeiture Fund (AFF) primarily consists of funds 
from the monetary proceeds from MSA enforcement actions. The 
Commerce Inspector General has recently examined NOAA's 
handling of the AFF and with the assistance of KPMG was unable 
to discern the current balance of the AFF. The Inspector 
General and the Department of Commerce are conducting 
additional audits to determine how funds in the AFF are used. 
The Fishing Industry has raised concerns that NOAA's ability to 
retain and use proceeds from its enforcement activities has 
lead to excessive and overzealous enforcement. The Commerce 
Inspector General has examined NOAA's enforcement activities 
which has led the Commerce Secretary and NOAA Administrator to 
introduce a series of steps to address the problem such as the 
appointment of a Special Master to review the fairness of past 
penalties and a new nationwide penalty policy. The hearing 
examined what the balance in the AFF is and whether it has been 
used for fraudulent or other illicit purposes. The hearing also 
inquired into whether NOAA's ability to retain enforcement 
proceeds serves as an incentive for overzealous enforcement. A 
second panel examined how NOAA's National Marine Fisheries 
Service (NMFS) is handling money allocated to assist New 
England fisherman transition to a new catch share fishery 
management system. The second panel touched on whether the 
Federal money spent on supporting catch-share programs is an 
efficient approach to supporting commercial fishing while 
ensuring conservation of natural resources for future 
generations.
    Witnesses: Hon. John F. Tierney, a Representative in 
Congress from the State of Massachusetts; Todd J. Zinser, 
Inspector General, U.S. Department of Commerce; Eric C. 
Schwaab, Assistant Administrator for Fisheries, National 
Oceanic and Atmospheric Administration; Lawrence Yacubian, 
Retired Fisherman; Larry Ciulla, Proprietor, Gloucester Seafood 
Display Auction; Stephen M. Ouellette, Attorney at Law, 
Ouellette and Smith; Vito Giacalone, Chairman, Northeast 
Seafood Coalition; and Brian J. Rothschild, Ph.D., Montgomery 
Charter Professor of Marine Science and Technology, University 
of Massachusetts-Dartmouth.
    12. July 12, 2011, ``Harnessing Technology and Innovation 
to Cut Waste and Curb Fraud in Federal Health Programs.''
    This hearing examined the opportunity for new technology 
and private sector business practices to curb waste and fraud 
in Medicare and Medicaid. The Centers for Medicare and Medicaid 
Services (CMS) office of program integrity has several major 
information technology initiatives to both identify and prevent 
improper payments. These initiatives include implementation of 
new prepayment analytics and advance information modeling to 
screen all Medicare payments, new integrated information 
systems to detect fraud and engaging commercial data analysis 
companies to review provider of medical services.
    Witnesses: Peter Budetti, M.D., Deputy Administrator and 
Director for Program Integrity at the Centers for Medicare and 
Medicaid Services; Lewis Morris, Chief Counsel, Office of 
Inspector General, U.S. Department of Health and Human 
Services; Joel C. Willemssen, Managing Director, Information 
Technology Issues, U.S. Government Accountability Office; and 
Louis Saccoccio, Executive Director, National Health Care Anti-
Fraud Association.
    13. August 4, 2011, ``Federal Leased Property: Are Federal 
Agencies Getting a Bad Deal?
    This hearing assessed the progress made to date in 
addressing weaknesses in the Federal Government's lease 
management and sought to identify ways to reduce the number of 
leased properties held by Federal agencies.
    Witnesses: David Foley, Deputy Commissioner, Public 
Buildings Service, U.S. General Services Administration; James 
M. Sullivan, Director, Office of Asset Enterprise Management, 
U.S. Department of Veterans Affairs; Jeff Heslop, Chief 
Operating Officer, U.S. Securities and Exchange Commission; and 
David J. Wise, Director, Physical Infrastructure, U.S. 
Government Accountability Office.
    14. September 15, 2011, ``Improving Financial 
Accountability at the Department of Defense.''
    This hearing examined the Department of Defense's plans for 
improving its financial accountability. Congress established a 
requirement for the Department of Defense (DOD) to become 
``audit ready'' by 2017. However, past hearings and studies by 
the Government Accountability Office (GAO) bring into question 
whether the DOD and the military services and agencies will 
meet this deadline. Further, the GAO placed DOD's financial 
management on its list of ``high risk'' areas of concern. Key 
questions for the hearing included whether the DOD's financial 
improvement plan is adequate, and whether DOD can and will meet 
the goals of this plan.
    Witnesses: Hon. Robert F. Hale, Under Secretary of Defense 
(Comptroller), and Chief Financial Officer, U.S. Department of 
Defense; Hon. Elizabeth A. McGrath, Deputy Chief Management 
Officer, U.S. Department of Defense; Hon. Gladys J. Commons, 
Assistant Secretary of the Navy, Financial Management 
Comptroller, U.S. Department of the Navy, accompanied by Carol 
E. Spangler, Assistant Deputy Commandant (Resources), U.S. 
Marine Corps; Hon. Mary Sally Matiella, Assistant Secretary of 
the Army, Financial Management and Comptroller, U.S. Department 
of the Army; Hon. Jamie M. Morin, Assistant Secretary of the 
Air Force, Financial Management and Comptroller, U.S. 
Department of the Air Force; and Asif A. Khan, Director, 
Financial Management and Assurance, U.S. Government 
Accountability Office.
    15. September 22, 2011, ``Improving Educational Outcomes 
for Our Military and Veterans.''
    This hearing sought to improve Federal oversight of 
military and veterans education programs funded by taxpayers in 
order to ensure that veterans and military personnel enrolled 
at proprietary schools receive the quality of education they 
expect and that the Federal Government is not wasting scarce 
resources on poor-quality educational products.
    Witnesses: Hon. Jim Webb, U.S. Senator from the State of 
Virginia; Curtis L. Coy, Deputy Under Secretary for Economic 
Opportunity, Veterans Benefits Administration, U.S. Department 
of Veterans Affairs, accompanied by Keith Wilson, Director of 
the Education Service, Veterans Benefits Administration, U.S. 
Department of Veterans Affairs; Theodore L. Daywalt, President, 
VetJobs; Ryan M. Gallucci, Deputy Director, National 
Legislative Service, Veterans of Foreign Wars of the United 
States; Russell Kitchner, Vice President for Regulatory and 
Governmental Relations, American Public University System; and 
Greg Von Lehmen, Provost and Chief Academic Officer, University 
of Maryland University College.
    16. October 4, 2011, ``Costs of Prescription Drug Abuse in 
the Medicare Part D Program.''
    Prescription drug abuse is a serious and growing public 
health problem. According to the Centers for Disease Control 
and Prevention, drug overdoses, including those from 
prescription drugs, are the second leading cause of death from 
unintentional injuries in the United Sates, exceeded only by 
motor vehicle fatalities. Unlike addition to heroin and other 
drugs that have no accepted medical use, addiction to some 
controlled substances can be unknowingly financed by insurance 
and government programs such as Medicare. The financial cost 
associated with controlled substance fraud and abuse in 
Medicare is greater than the cost of the drug purchases 
themselves since there are related medical services, such as 
doctor and emergency room visits, that precede the dispensing 
of these medications.
    In a report to be released the day of the hearing, GAO 
found indications of doctor shopping in the Medicare Part D 
program for 14 categories of frequently abused prescription 
drugs. About 170,000 beneficiaries acquired the same class of 
frequently abused drugs, primarily hydrocodone and oxycodone, 
from five or more medical practitioners during calendar year 
2008 at a cost of about $148 million. This hearing examined the 
report's findings, the financial costs associated with fraud 
and abuse of the Medicare Part D program, and explored what 
controls might be necessary to protect taxpayers' money.
    Witnesses: Gregory D. Kutz, Director, Forensic Audits and 
Special Investigations, U.S. Government Accountability Office; 
Jonathan Blum, Deputy Administrator and Director, Centers for 
Medicare and Medicaid Services, U.S. Department of Health and 
Human Services; and Louis Saccoccio, Executive Director, 
National Health Care Anti-Fraud Association.
    17. December 1, 2011, ``The Financial and Societal Costs of 
Medicating America's Foster Children.''
    Over 4.6 million American children, nearly one in 10, are 
treated annually for serious mental or emotional disorders. 
This makes mental illness the single most costly condition in 
terms of healthcare expenditures for children. Children under 
State care are particularly vulnerable to these types of 
disorders and by definition, are Medicaid beneficiaries. GAO 
has previously found that the overuse of psychotropics in their 
foster care populations as one of the most pressing issues 
facing the child welfare system nationwide. A GAO report, 
released at the hearing, explored potential overprescribing and 
medically negligent prescribing practices in general, that may 
be costing the Medicaid system, and these children's health, an 
enormous sum.
    Witnesses discussed the fiscal challenges facing our 
healthcare system and the billions of dollars spent by Medicaid 
each year, and the potentially calamitous effects on the health 
and welfare of our Nation's most vulnerable children. In 
particular the hearing explored whether there are wasteful and 
abusive prescribing practices being engaged in as it relates to 
psychotropic drugs and children under State care.
    Witnesses: Ke'onte Cook, age 12, McKinney, Texas, 
accompanied by his mother, Carol Cook; Gregory D. Kutz, 
Director, Forensic Audits and Special Investigations, U.S. 
Government Accountability Office; Bryan Samuels, Commissioner, 
Administration on Children, Youth, and Families, U.S. 
Department of Health and Human Services; Matt Salo, Executive 
Director, National Association of State Medicaid Directors; and 
Jon McClellan, M.D., Child Psychiatrist, Seattle Children's 
Hospital.
    18. March 22, 2012, Joint hearing with the Subcommittee on 
Government Organization, Efficiency and Financial Management of 
the House Committee on Oversight and Government Reform, ``New 
Audit Finds Problems in Army Military Pay.''
    This hearing reviewed the findings of the GAO report on 
Army auditability and the accuracy of Army pay. GAO's report 
was released concurrent with the hearing.
    Witnesses: Lt. Col, Kirk Zecchini, U.S. Army Reserve; Asif 
Khan, Director, Financial Management and Assurance, U.S. 
Government Accountability Office; James Watkins, Director, 
Accountability and Audit Readiness, Department of the Army; 
Jeanne M. Brooks, Director, Technology and Business 
Architecture Integration, Office of the Deputy Chief of Staff, 
Department of the Army; and Aaron P. Gillison, Acting Director, 
Defense Finance and Accounting Service, Indianapolis Department 
of Defense.
    19. March 28, 2012, ``Assessing Efforts to Combat Waste and 
Fraud in Federal Programs.''
    The hearing examined the status of Federal improper 
payments, including those made by State agencies under programs 
such as Medicaid, Unemployment Insurance, and the Foster Care 
program. The hearing also explored current and proposed 
initiatives by the Administration to reduce improper payments. 
Federal agencies made an estimated $115 billion in improper 
payments in fiscal year 2011. In the fall of 2011, the 
Committee approved the Improper Payments Eliminate and Recovery 
Improvement Act, which seeks to strengthen Federal agencies 
detection, prevention and recovery of improper payments. The 
Subcommittee hearing examined the legislation, as well as 
additional steps to curb improper payments.
    Witnesses: Hon. Daniel I. Werfel, Controller, Office of 
Federal Financial Management, Office of Management and Budget; 
Sheila O. Conley, Deputy Assistant Secretary for Finance and 
Deputy Chief Financial Officer, U.S. Department of Health and 
Human Services; Beryl H. Davis, Director, Financial Management 
and Assurance, U.S. Government Accountability Office; Hon. Todd 
Russell Platts, U.S. House of Representatives; and Hon. 
Edolphus Towns, U.S. House of Representatives.
    20. May 24, 2012, ``Innovating with Less: Examining Efforts 
to Reform Information Technology Spending.''
    This hearing explored efforts by the Obama Administration 
to cut wasteful and inefficient spending on the Federal 
Government's Information Technology (IT) infrastructure through 
data center consolidations, cloud computing, and several other 
initiatives. The hearing coincided with the release of a GAO 
report analyzing progress to date on these efforts.
    Witnesses: Steven VanRoekel, Federal Chief Information 
Officer, U.S. Office of Management and Budget; David A. Powner, 
Director, Information Technology Management Issues, U.S. 
Government Accountability Office; George DelPrete, Principal, 
Grant Thornton, LLP, on behalf of TechAmerica; Molly O'Neill, 
Vice President, CGI Federal, Inc.; Nick Combs, Federal Chief 
Technology Officer, EMC Corporation; and Jennifer Morgan, 
President, SAP America Public Services, Inc.
    21. June 14, 2012, ``Saving Taxpayer Dollars by Curbing 
Waste and Fraud in Medicaid.''
    This hearing examined steps needed to curb waste and fraud 
in Medicaid. The Centers for Medicare and Medicaid Services 
(CMS) office of program integrity has initiated several major 
programs intended to identify, recover, and prevent improper 
payments, including improper payments related to fraud. All of 
these efforts are in partnership with State Medicaid offices, 
which also have their own anti-waste and fraud programs. 
Federal estimates of Medicaid improper payments are in the tens 
of billions of dollars annually. Recent reports by the Office 
of Inspector General of the Department of Health and Human 
Services have raised serious questions about the efficacy of 
current Medicaid program integrity efforts. Further, OIG, 
Government Accountability Office, and experts have specific 
steps to greatly improve the level of success of anti-waste and 
fraud efforts.
    Witnesses: Peter Budetti, M.D., Deputy Administrator and 
Director for Program Integrity, Centers for Medicare and 
Medicaid Services, U.S. Department of Health and Human 
Services; Douglas Porter, Director, Washington State Health 
Care Authority; Douglas Wilson, Inspector General, Health and 
Human Services Commission, State of Texas; Carolyn Yocom, 
Director, Health Care, U.S. Government Accountability Office; 
and Ann Maxwell, Regional Inspector General for Evaluations and 
Inspections, Office of the Inspector General, U.S. Department 
of Health and Human Services.
    22. July 18, 2012, ``Census: Planning Ahead for 2020.''
    This hearing sought to identify lessons learned from the 
2010 Census, identify technological advances that can be used 
to improve data quality, and reexamine areas that could help 
produce a more cost-effective 2020 Census. The hearing also 
assessed recent developments with the American Community 
Survey, an ongoing statistical survey that produces demographic 
information.
    Witnesses: Hon. Robert M. Groves, Director, U.S. Census 
Bureau, U.S. Department of Commerce; Hon. Todd J. Zinser, 
Inspector General, U.S. Department of Commerce; Robert 
Goldenkoff, Director, Strategic Issues, U.S. Government 
Accountability Office; Jason Providakes, Ph.D., Senior Vice 
President and General Manager, The MITRE Corporation; Jack 
Baker, Ph.D., Senior Research Scientist, Geospatial and 
Population Studies, The National Academy of Sciences; and 
Andrew Reamer, Ph.D., Research Professor, George Washington 
Institute of Public Policy, George Washington University.
    23. July 25, 2012, ``Assessing Grants Management Practices 
at Federal Agencies.''
    This hearing examined the practices of Federal agencies in 
managing grants. Federal agencies allocate billions of dollars 
each year as grants to State and local governments, educational 
institutions, and non-profit organizations. Effective 
management of Federal grants ensures that the funds are spent 
correctly. One key issue is the timely closeout of expired 
grants when the deadline for a recipient to spend grant funds 
has passed. Failure to properly close out expired grants, and 
perform required audit of the account, results in higher risks 
for waste, fraud, and abuse. Currently, two management systems, 
the Payment Management System and the Automated Standard 
Application for Payments, track the status of most Federal 
agency grants. Further, each Federal Department has rules that 
govern grant making, and determine financial management 
practices.
    Witnesses: Hon. Daniel I. Werfel, Controller, Office of 
Federal Financial Management, Office of Management and Budget; 
Hon. Elizabeth M. Harman, Assistant Administrator, Grants 
Program Directorate, Federal Emergency Management Agency, U.S. 
Department of Homeland Security; Nancy J. Gunderson, Deputy 
Assistant Secretary, Office of Grants Acquisition Policy and 
Accountability, U.S. Department of Health and Human Services; 
and Stanley J. Czerwinski, Director, Strategic Issues, U.S. 
Government Accountability Office.

                            II. LEGISLATION

    H.R. 298--To designate the facility of the United States 
Postal Service located at 500 East Whitestone Boulevard in 
Cedar Park, Texas, as the ``Army Specialist Matthew Troy Morris 
Post Office Building.''
    H.R. 771--To designate the facility of the United States 
Postal Service located at 1081 Elbel Road in Schertz, Texas, as 
the ``Schertz Veterans Post Office.''
    H.R. 789--To designate the facility of the United States 
Postal Service located at 20 Main Street in Little Ferry, New 
Jersey, as the ``Sergeant Matthew J. Fenton Post Office.''
    H.R. 793--To designate the facility of the United States 
Postal Service located at 12781 Sir Francis Drake Boulevard in 
Inverness, California, as the ``Specialist Jake Robert Velloza 
Post Office.''
    H.R. 1369--To designate the facility of the United States 
Postal Service located at 1021 Pennsylvania Avenue in 
Hartshorne, Oklahoma, as the ``Warren Lindley Post Office.''
    H.R. 1423--To designate the facility of the United States 
Postal Service located at 115 4th Avenue Southwest in Ardmore, 
Oklahoma, as the ``Specialist Michael E. Phillips Post 
Office.''
    H.R. 1632--To designate the facility of the United States 
Postal Service located at 5014 Gary Avenue in Lubbock, Texas, 
as the ``Sergeant Chris Davis Post Office.''
    H.R. 1791--To designate the United States courthouse under 
construction at 101 South United States Route 1 in Fort Pierce, 
Florida, as the ``Alto Lee Adams, Sr., United States 
Courthouse.''
    H.R. 1843--To designate the facility of the United States 
Postal Service located at 489 Army Drive in Barrigada, Guam, as 
the ``John Pangelinan Gerber Post Office Building.''
    H.R. 1975--To designate the facility of the United States 
Postal Service located at 281 East Colorado Boulevard in 
Pasadena, California, as the ``First Lieutenant Oliver Goodall 
Post Office Building.''
    H.R. 2062--To designate the facility of the United States 
Postal Service located at 45 Meetinghouse Lane in Sagamore 
Beach, Massachusetts, as the ``Matthew A. Pucino Post Office.''
    H.R. 2079--To designate the facility of the United States 
Postal Service located at 10 Main Street in East Rockaway, New 
York, as the ``John J. Cook Post Office.''
    H.R. 2149--To designate the facility of the United States 
Postal Service located at 4354 Pahoa Avenue in Honolulu, 
Hawaii, as the ``Cecil L. Heftel Post Office Building.''
    H.R. 2158--To designate the facility of the United States 
Postal Service located at 14901 Adelfa Drive in La Mirada, 
California, as the ``Wayne Grisham Post Office.''
    H.R. 2213--To designate the facility of the United States 
Postal Service located at 801 West Eastport Street in Iuka, 
Mississippi, as the ``Sergeant Jason W. Vaughn Post Office.''
    H.R. 2244--To designate the facility of the United States 
Postal Service located at 67 Castle Street in Geneva, New York, 
as the ``Corporal Steven Blaine Riccione Post Office.''
    H.R. 2338--To designate the facility of the United States 
Postal Service located at 600 Florida Avenue in Cocoa, Florida, 
as the ``Harry T. and Harriette Moore Post Office.''
    H.R. 2415--To designate the facility of the United States 
Postal Service located at 11 Dock Street in Pittston, 
Pennsylvania, as the ``Trooper Joshua D. Miller Post Office 
Building.''
    H.R. 2422--To designate the facility of the United States 
Postal Service located at 45 Bay Street, Suite 2, in Staten 
Island, New York, as the ``Sergeant Angel Mendez Post Office.''
    H.R. 2548--To designate the facility of the United States 
Postal Service located at 6310 North University Street in 
Peoria, Illinois, as the ``Charles 'Chip' Lawrence Chan Post 
Office Building.''
    H.R. 2660--To designate the facility of the United States 
Postal Service located at 122 North Holderrieth Boulevard in 
Tomball, Texas, as the ``Tomball Veterans Post Office.''
    H.R. 2767--To designate the facility of the United States 
Postal Service located at 8 West Silver Street in Westfield, 
Massachusetts, as the ``William T. Trant Post Office 
Building.''
    H.R. 2896--To designate the facility of the United States 
Postal Service located at 369 Martin Luther King Jr. Drive in 
Jersey City, New Jersey, as the ``Judge Shirley A. Tolentino 
Post Office Building.''
    H.R. 3004--To designate the facility of the United States 
Postal Service located at 260 California Drive in Yountville, 
California, as the ``Private First Class Alejandro R. Ruiz Post 
Office Building.''
    H.R. 3220--To designate the facility of the United States 
Postal Service located at 170 Evergreen Square SW in Pine City, 
Minnesota, as the ``Master Sergeant Daniel L. Fedder Post 
Office.''
    H.R. 3246--To designate the facility of the United States 
Postal Service located at 15455 Manchester Road in Ballwin, 
Missouri, as the ``Specialist Peter J. Navarro Post Office 
Building.''
    H.R. 3247--To designate the facility of the United States 
Postal Service located at 1100 Town and Country Commons in 
Chesterfield, Missouri, as the ``Lance Corporal Matthew P. 
Pathenos Post Office Building.''
    H.R. 3248--To designate the facility of the United States 
Postal Service located at 112 South 5th Street in Saint 
Charles, Missouri, as the ``Lance Corporal Drew W. Weaver Post 
Office Building.''
    H.R. 3276--To designate the facility of the United States 
Postal Service located at 2819 East Hillsborough Avenue in 
Tampa, Florida, as the ``Reverend Abe Brown Post Office 
Building.''
    H.R. 3412--To designate the facility of the United States 
Postal Service located at 1421 Veterans Memorial Drive in 
Abbeville, Louisiana, as the ``Sergeant Richard Franklin 
Abshire Post Office Building.''
    H.R. 3413--To designate the facility of the United States 
Postal Service located at 1449 West Avenue in Bronx, New York, 
as the ``Private Isaac T. Cortes Post Office.''
    H.R. 3477--To designate the facility of the United States 
Postal Service located at 133 Hare Road in Crosby, Texas, as 
the Army First Sergeant David McNerney Post Office Building.
    H.R. 3501--To designate the facility of the United States 
Postal Service located at 125 Kerr Avenue in Rome City, 
Indiana, as the ``SPC Nicholas Scott Hartge Post Office.''
    H.R. 3593--To designate the facility of the United States 
Postal Service located at 787 State Route 17M in Monroe, New 
York, as the ``National Clandestine Service of the Central 
Intelligence Agency NCS Officer Gregg David Wenzel Memorial 
Post Office.''
    H.R. 3637--To designate the facility of the United States 
Postal Service located at 401 Old Dixie Highway in Jupiter, 
Florida, as the ``Roy Schallern Rood Post Office Building.''
    H.R. 3772--To designate the facility of the United States 
Postal Service located at 150 South Union Street in Canton, 
Mississippi, as the ``First Sergeant Landres Cheeks Post Office 
Building.''
    H.R. 3870--To designate the facility of the United States 
Postal Service located at 6083 Highway 36 West in Rose Bud, 
Arkansas, as the ``Nicky 'Nick' Daniel Bacon Post Office.''
    H.R. 3892--To designate the facility of the United States 
Postal Service located at 8771 Auburn Folsom Road in Roseville, 
California, as the ``Lance Corporal Victor A. Dew Post 
Office.''
    H.R. 3912--To designate the facility of the United States 
Postal Service located at 110 Mastic Road in Mastic Beach, New 
York, as the ``Brigadier General Nathaniel Woodhull Post Office 
Building.''
    H.R. 5738--To designate the facility of the United States 
Postal Service located at 15285 Samohin Drive in Macomb, 
Michigan, as the ``Lance Cpl. Anthony A. DiLisio Clinton-Macomb 
Carrier Annex.''
    H.R. 5788--To designate the facility of the United States 
Postal Service located at 103 Center Street West in Eatonville, 
Washington, as the ``National Park Ranger Margaret Anderson 
Post Office.''
    H.R. 5837--To designate the facility of the United States 
Postal Service located at 26 East Genesee Street in 
Baldwinsville, New York, as the ``Corporal Kyle Schneider Post 
Office Building.''
    H.R. 5954--To designate the facility of the United States 
Postal Service located at 320 7th Street in Ellwood City, 
Pennsylvania, as the ``Sergeant Leslie H. Sabo, Jr. Post Office 
Building.''
    S. 349--A bill to designate the facility of the United 
States Postal Service located at 4865 Tallmadge Road in 
Rootstown, Ohio, as the ``Marine Sgt. Jeremy E. Murray Post 
Office.''
    S. 384--A bill to amend title 39, United States Code, to 
extend the authority of the United States Postal Service to 
issue a semipostal to raise funds for breast cancer research.
    S. 655--A bill to designate the facility of the United 
States Postal Service located at 95 Dogwood Street in Cary, 
Mississippi, as the ``Spencer Byrd Powers, Jr. Post Office.''
    S. 1412--A bill to designate the facility of the United 
States Postal Service located at 462 Washington Street, Woburn, 
Massachusetts, as the ``Officer John Maguire Post Office.''
    S. 3208--Multinational Species Conservation Funds 
Semipostal Stamp Reauthorization Act of 2012.
    S. 3231--To provide for the issuance and sale of a 
semipostal by the United States Postal Service to support 
effective programs targeted at improving permanency outcomes 
for youth in foster care.
    S. 3435--A bill to designate the facility of the United 
States Postal Service located at 26 East Genesee Street in 
Baldwinsville, New York, as the ``Corporal Kyle Schneider Post 
Office Building.''
    S. 3630--A bill to designate the facility of the United 
States Postal Service located at 218 North Milwaukee Street in 
Waterford, Wisconsin, as the ``Captain Rhett W. Schiller Post 
Office.''
    S. Con. Res. 57--A concurrent resolution expressing the 
sense of Congress that the census surveys and the information 
derived from those surveys are crucial to the national welfare.

                       III. GAO REPORTS 2011-2012

    GAO-11-86--Electronic Records Archive: National Archives 
Needs to Strengthen Its Capacity to Use Earned Value Techniques 
to Manage and Oversee Development, 01/13/2011
    GAO-11-300--DOD Education Benefits: Increased Oversight of 
Tuition Assistance Program Is Needed, 03/01/2011
    GAO-11-262--Information Technology: OMB Has Made 
Improvements to Its Dashboard, but Further Work Is Needed by 
Agencies and OMB to Ensure Data Accuracy, 03/15/2011
    GAO-11-396--Key Indicator Systems: Experiences of Other 
National and Subnational Systems Offer Insights for the United 
States, 03/31/2011
    GAO-11-386--United States Postal Service: Strategy Needed 
to Address Aging Delivery Fleet, 05/05/2011
    GAO-11-605--Social Media: Federal Agencies Need Policies 
and Procedures for Managing and Protecting Information They 
Access and Disseminate, 06/28/2011
    GAO-11-475--Fraud Detection Systems: Centers for Medicare 
and Medicaid Services Needs to Ensure More Widespread Use, 06/
30/2011
    GAO-11-149--Information Security: State Has Taken Steps to 
Implement a Continuous Monitoring Application, but Key 
Challenges Remain, 07/08/2011
    GAO-11-565--Data Center Consolidation: Agencies Need to 
Complete Inventories and Plans to Achieve Expected Savings, 07/
19/2011
    GAO-11-581--Information Technology: DHS Needs to Improve 
Its Independent Acquisition Reviews, 07/28/2011
    GAO-11-638--Green Information Technology: Agencies Have 
Taken Steps to Implement Requirements, but Additional Guidance 
on Measuring Performance Needed, 07/28/2011
    GAO-11-592--Medicare Integrity Program: CMS Used Increased 
Funding for New Activities but Could Improve Measurement of 
Program Effectiveness, 07/29/2011
    GAO-11-699--Medicare Part D: Instances of Questionable 
Access to Prescription Drugs, 09/06/2011
    GAO-11-851--DOD Financial Management: Improvement Needed in 
DOD Components' Implementation of Audit Readiness Effort, 09/
13/2011
    GAO-11-830--DOD Financial Management: Marine Corps 
Statement of Budgetary Resources Audit Results and Lessons 
Learned [Reissued on October 17, 2011], 09/15/2011
    GAO-11-751--Personal ID Verification: Agencies Should Set a 
Higher Priority on Using the Capabilities of Standardized 
Identification Cards, 09/20/2011
    GAO-11-826--Information Technology: OMB Needs to Improve 
Its Guidance on IT Investments, 09/29/2011
    GAO-12-146--U.S. Postal Service: Allocation of 
Responsibility for Pension Benefits between the Postal Service 
and the Federal Government, 10/13/2011
    GAO-12-7--Information Technology: Critical Factors 
Underlying Successful Major Acquisitions, 10/21/2011
    GAO-12-86--Deepwater Horizon Oil Spill: Actions Needed to 
Reduce Evolving but Uncertain Federal Financial Risks, 10/24/
2011
    GAO-12-79--Green Building: Federal Initiatives for the 
Nonfederal Sector Could Benefit from More Interagency 
Collaboration, 11/02/2011
    GAO-12-210--IT Dashboard: Accuracy Has Improved, and 
Additional Efforts Are Under Way to Better Inform Decision 
Making, 11/07/2011
    GAO-12-164--Financial Audit: Bureau of the Public Debt's 
Fiscal Years 2011 and 2010 Schedules of Federal Debt, 11/08/
2011
    GAO-12-57--Federal Contracting: OMB's Acquisition Savings 
Initiative Had Results, but Improvements Needed, 11/15/2011
    GAO-12-201--Foster Children: HHS Guidance Could Help States 
Improve Oversight of Psychotropic Prescriptions [Reissued on 
December 15, 2011], 12/14/2011
    GAO-12-132--DOD Financial Management: Ongoing Challenges 
with Reconciling Navy and Marine Corps Fund Balance with 
Treasury, 12/20/2011
    GAO-12-80--Decennial Census: Additional Actions Could 
Improve the Census Bureau's Ability to Control Costs for the 
2020 Census, 01/24/2012
    GAO-12-402--Federal Employees' Compensation Act: 
Preliminary Observations on Fraud-Prevention Controls, 01/25/
2012
    GAO-12-307--U.S. Coins: Alternative Scenarios Suggest 
Different Benefits and Losses from Replacing the $1 Note with a 
$1 Coin, 02/15/2012
    GAO-12-241--Information Technology: Departments of Defense 
and Energy Need to Address Potentially Duplicative Investments, 
02/17/2012
    GAO-12-54--Federal Statistical System: Agencies Can Make 
Greater Use of Existing Data, but Continued Progress Is Needed 
on Access and Quality Issues, 02/24/2012
    GAO-12-134--DOD Financial Management: Implementation 
Weaknesses in Army and Air Force Business Systems Could 
Jeopardize DOD's Auditability Goals, 02/28/2012
    GAO-12-312--Foster Care Program: Improved Processes Needed 
to Estimate Improper Payments and Evaluate Related Corrective 
Actions, 03/07/2012
    GAO-12-361--IT Supply Chain: National Security-Related 
Agencies Need to Better Address Risks, 03/23/2012
    GAO-12-470--U.S. Postal Service: Mail Processing Network 
Exceeds What Is Needed for Declining Mail Volume, 04/12/2012
    GAO-12-360--Grants Management: Action Needed to Improve the 
Timeliness of Grant Closeouts by Federal Agencies, 04/16/2012
    GAO-12-433--U.S. Postal Service: Challenges Related to 
Restructuring the Postal Service's Retail Network, 04/17/2012
    GAO-12-506--U.S. Postal Service: Field Offices' Role in 
Cost-Reduction and Revenue-Generation Efforts, 04/25/2012
    GAO-12-461--Information Technology Reform: Progress Made; 
More Needs to Be Done to Complete Actions and Measure Results, 
04/26/2012
    GAO-12-626--2020 Census: Additional Steps Are Needed to 
Build on Early Planning, 05/17/2012
    GAO-12-542--Streamlining Government: Questions to Consider 
When Evaluating Proposals to Consolidate Physical 
Infrastructure and Management Functions, 05/23/2012
    GAO-12-627--National Medicaid Audit Program: CMS Should 
Improve Reporting and Focus on Audit Collaboration with States, 
06/14/2012
    GAO-12-497--Supplemental Security Income: Better Management 
Oversight Needed for Children's Benefits, 06/26/2012
    GAO-12-756--Information Technology Reform: Progress Made 
but Future Cloud Computing Efforts Should be Better Planned, 
07/11/2012
    GAO-12-646--Federal Buildings Fund: Improved Transparency 
and Long-term Plan Needed to Clarify Capital Funding 
Priorities, 07/12/2012
    GAO-12-742--Data Center Consolidation: Agencies Making 
Progress on Efforts, but Inventories and Plans Need to Be 
Completed, 07/19/2012
    GAO-12-818--Information Technology: DHS Needs to Further 
Define and Implement Its New Governance Process, 07/25/2012
    GAO-12-779--Federal Real Property: Strategic Partnerships 
and Local Coordination Could Help Agencies Better Utilize 
Space, 07/25/2012
    GAO-12-681--Software Development: Effective Practices and 
Federal Challenges in Applying Agile Methods, 07/27/2012
    GAO-12-764--Income Security: Overlapping Disability and 
Unemployment Benefits Should be Evaluated for Potential 
Savings, 07/31/2012
    GAO-12-782--Electronic Government Act: Agencies Have 
Implemented Most Provisions, but Key Areas of Attention Remain, 
09/12/2012
    GAO-12-915--Information Technology: Census Bureau Needs to 
Implement Key Management Practices, 09/18/2012
    GAO-12-833--Homeland Security: DHS Requires More 
Disciplined Investment Management to Help Meet Mission Needs, 
09/18/2012
    GAO-12-1016--Grants to State and Local Governments: An 
Overview of Federal Funding Levels and Selected Challenges, 09/
25/2012
    GAO-12-904--Information Technology: DHS Needs to Enhance 
Management of Cost and Schedule for Major Investments, 09/26/
2012
    GAO-13-104--Medicare Fraud Prevention: CMS Has Implemented 
a Predictive Analytics System, but Needs to Define Measures to 
Determine Its Effectiveness, 10/15/2012
    GAO-13-87--Information Technology: Agencies Need to 
Strengthen Oversight of Billions of Dollars in Operations and 
Maintenance Investments, 10/16/2012
    GAO-13-98--Information Technology Dashboard: Opportunities 
Exist to Improve Transparency and Oversight of Investment Risk 
at Select Agencies, 10/16/2012
    GAO-13-53--2020 Census: Initial Research Milestones 
Generally Met but Plans Needed to Mitigate Highest Risks, 11/
07/2012
    GAO-13-114--Financial Audit: Bureau of the Public Debt's 
Fiscal Years 2012 and 2011 Schedules of Federal Debt, 11/08/
2012
    GAO-13-102--Medicare Program Integrity: Greater Prepayment 
Control Efforts Could Increase Savings and Better Ensure Proper 
Payment, 11/13/2012
    GAO-13-50--Medicaid Integrity Program: CMS Should Take 
Steps to Eliminate Duplication and Improve Efficiency, 11/13/
2012
                SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT


                   MANAGEMENT, THE FEDERAL WORKFORCE,


                      AND THE DISTRICT OF COLUMBIA


                       Chairman: Daniel K. Akaka


                  Ranking Minority Member: Ron Johnson


                              I. HEARINGS

    The Senate Subcommittee on Oversight of Government 
Management, the Federal Workforce, and the District of Columbia 
held the following hearings during the 112th Congress:

Improving Federal Employment of People with Disabilities, February 16, 
        2011

    This hearing examined how the Federal Government as a 
whole, as well as individual agencies, can increase the hiring 
of individuals with disabilities in the Federal workforce and 
design and implement systems to provide accommodations for 
Federal employees with disabilities. Witnesses from the 
Department of Labor, the Equal Employment Opportunity 
Commission, Office of Personnel Management, and Government 
Accountability Office gave testimony regarding their agency's 
efforts to improve employment outcomes for people with 
disabilities within the Federal Government and recommendations 
on what improvements can be made.
    Witnesses: Yvonne Jones, Director, Strategic Issues, U.S. 
Government Accountability Office; Hon. Christine M. Griffin, 
Deputy Director, U.S. Office of Personnel Management; Hon. 
Kathleen Martinez, Assistant Secretary, Office of Disability 
Employment Policy, U.S. Department of Labor; Hon. Chai 
Feldblum, Commissioner, U.S. Equal Employment Opportunity 
Commission.

State Department Training: Investing in the Workforce to Address 21st 
        Century Challenges, March 8, 2011

    This hearing examined efforts at the Department of State to 
provide its employees the necessary skills to carry out its 
mission. Specifically, the hearing delved into the 
implementation of the ``Diplomacy 3.0'' initiative that 
addressed staffing shortages in the Foreign Service and the 
civil service. Concerns were raised by a GAO review about the 
Department's training efforts in recent years, citing 
insufficient language and public diplomacy training. The 
hearing focused on the findings and recommendations from the 
review, and addressed ways to improve training programs at the 
Department.
    Panel I Witnesses: Hon. Nancy J. Powell, Director General 
of the Foreign Service & Director of Human Resources, U.S. 
Department of State; Ruth A. Whiteside, Director, Foreign 
Service Institute, U.S. Department of State; Jess T. Ford, 
Director, International Affairs and Trade Team, U.S. Government 
Accountability Office.
    Panel II Witnesses: Hon. Ronald E. Neumann, President, 
American Academy of Diplomacy; Susan R. Johnson, President, 
American Foreign Service Association.

Strengthening the Senior Executive Service: A Review of Challenges 
        Facing the Government's Leadership Corps, March 29, 2011

    In 2004, a new pay for performance system was established 
for the Senior Executive Service (SES), which linked pay to 
Congressional pay and raised the pay cap for agency appraisal 
systems that had been certified by the Office of Personnel 
Management. This hearing was held to identify areas that may be 
in need of reform so that the Government's leadership corps has 
the tools it needs to lead the Federal workforce. Areas for 
improvement that were discussed included a variety of personnel 
issues such as overlapping pay scales, complicated hiring 
processes, insufficient candidate development programs, 
inconsistent training, and difficulty recruiting and retaining 
diverse candidates.
    Panel I Witnesses: Nancy Kichak, Associate Director & Chief 
Human Capital Officer, Strategic Human Resource Policy, U.S. 
Office of Personnel Management.
    Panel II Witnesses: Carol Bonosaro, President, Senior 
Executives Association; Max Stier, President & Chief Executive 
Officer; Partnership for Public Service.

Financial Literacy: Empowering Americans to Make Informed Financial 
        Decisions, April 12, 2011

    This hearing examined the status and effectiveness of 
Federal financial literacy and consumer protection initiatives. 
It was discussed how financial literacy is vitally important to 
our Nation's economic future and the well-being of American 
families. In recent years, the financial products and 
investment options available to consumers have rapidly grown in 
complexity and sophistication, while American's financial 
knowledge and skills have not kept pace. Potential ways the 
Federal Government could empower individuals and families to 
effectively manage their finances, evaluate credit 
opportunities, and invest for long-term financial goals were 
the topic of discussion.
    Panel I Witness: Hon. Gene L. Dodaro, Comptroller General 
of the United States, U.S. Government Accountability Office.
    Panel II Witnesses: Hon. Brenda Dann-Messier, Assistant 
Secretary, Office of Vocational & Adult Education, U.S. 
Department of Education; Joshua Wright, Acting Director, Office 
of Financial Education & Financial Access, U.S. Department of 
the Treasury; Lori J. Schock, Director, Office of Investor 
Education & Advocacy, U.S. Securities and Exchange Commission; 
Hollister K. Petraeus, Director, Office of Servicemember 
Affairs, Consumer Financial Protection Bureau, U.S. Department 
of the Treasury.

Roadmap for a More Efficient and Accountable Federal Government: 
        Implementing the GPRA Modernization Act, May 10, 2011

    This hearing examined the process agencies made in 
implementing the GPRA Modernization Act of 2010. Some key 
implementation issues discussed at the hearing included 
coordination among agencies, fostering Congressional buy-in to 
the GPRA process, and releasing a fully functional, public 
version of performance.gov which had been delayed due to 
funding challenges associated with the Electronic Government 
Fund.
    Panel I Witnesses: Hon. Jeffrey D. Zients, Federal Chief 
Performance Officer and Deputy Director for Management, Office 
of Management and Budget; Hon. Gene L. Dodaro, Comptroller 
General of the United States, U.S. Government Accountability 
Office.
    Panel II Witnesses: Robert J. Shea, Former Associate 
Director for Administration and Government Performance, Office 
of Management and Budget; Paul L. Posner, Professor and 
Director, Public Administration Program, George Mason 
University; Jonathan D. Breul, Executive Director, IBM Center 
for The Business of Government.

Inspiring Students to Federal Service, June 21, 2011

    Within the next 5 years, the Federal Government is expected 
to face one of the largest retirement waves in the Nation's 
history, making the development of a new generation of Federal 
workers even more vital. This hearing examined how the Federal 
Government can better partner with universities to prepare and 
recruit students for Federal service, and particularly for 
hard-to-fill positions. The hearing also reviewed the 
implementation of new student and recent graduate programs 
created by Executive Order 13562.
    Panel I Witnesses: Hon. Christine Griffin, Deputy Director, 
U.S. Office of Personnel Management; Michael C. Kane, Chief 
Human Capital Officer, U.S. Department of Energy; Carolyn 
Taylor, Chief Human Capital Officer, U.S. Government 
Accountability Office.
    Panel II Witnesses: Timothy McManus, Vice President for 
Education and Outreach, Partnership for Public Service; Laurel 
McFarland, Executive Director, National Association of Schools 
of Public Affairs and Administration; Anne Mahle, Vice 
President for Recruitment, Teach for America; Witold 
Skwierczynski, President, National Council of Social Security 
Administration Field Operations Locals, American Federation of 
Government Employees.

The Diplomat's Shield: Diplomatic Security and Its Implications for 
        U.S. Diplomacy, June 29, 2011

    This hearing was held as a response to the Government 
Accountability Office (GAO) review of The Department of State's 
Bureau of Diplomatic Security (DS) training efforts in the 
report Diplomatic Security: Expanded Missions and Inadequate 
Facilities Pose Critical Challenges to Training Efforts. The 
hearing addressed the challenges DS faces carrying out its 
mission because of inadequate training facilities, obtaining 
feedback on its training efforts, tracking the use of some of 
its training, and strategically addressing expanded training 
missions. Specific issues discussed include staffing shortages, 
language proficiency challenges, risk management, the Iraq 
transition, and contractor management.
    Panel I Witnesses: Hon. Eric J. Boswell, Assistant 
Secretary for Diplomatic Security, U.S. Department of State; 
Jess T. Ford, Director, International Affairs and Trade, U.S. 
Government Accountability Office.
    Panel II Witness: Susan R. Johnson, President, American 
Foreign Service Association.

Examining the Federal Workers' Compensation Program for Injured 
        Employees, July 26, 2011

    The Federal Employees' Compensation Act (FECA) was 
established in 1916 and has not been significantly amended 
since 1974. It provides workers' compensation coverage to 
roughly 2.8 million Federal civilian workers if they are 
injured in the performance of their official duty. This hearing 
examined a number of FECA reform proposals, which were 
developed to update and modernize the program, increase its 
efficiency and effectiveness, improve return-to-work outcomes 
and reduce the cost to the Federal Government.
    Panel I Witnesses: Hon. Christine Griffin, Deputy Director, 
U.S. Office of Personnel Management; Gary Steinberg, Acting 
Director, Office of Workers' Compensation Programs, U.S. 
Department of Labor; Andrew Sherrill, Director, Education, 
Workforce, and Income Security, U.S. Government Accountability 
Office.
    Panel II Witnesses: Joseph Beaudoin, President, National 
Active and Retired Federal Employees Association; Ronald 
Watson, Consultant, National Association of Letter Carriers, 
AFL-CIO; Gregory Krohm, Executive Director, International 
Association of Industrial Accident Boards and Commissions.

Agro-Defense: Responding to Threats Against America's Agriculture and 
        Food System, September 13, 2011

    This hearing was held as a response to the Government 
Accountability Office (GAO) review of Federal agencies' efforts 
to implement Homeland Security Presidential Directive 9 (HSPD-
9), which established the Nation's agriculture and food defense 
policy, in the report, Homeland Security: Actions Needed to 
Improve Response to Potential Terrorist Attacks and Natural 
Disasters Affecting Food and Agriculture. It was discussed how 
there is no centralized coordination to oversee the Federal 
Government's overall progress in defending the food and 
agriculture systems, weaknesses in the flow of critical 
information among key food and agriculture stakeholders and 
disaster response and recovery challenges.
    Panel I Witnesses: Colonel John T. Hoffman (Ret.), Senior 
Research Fellow, National Center for Food Protection and 
Defense, University of Minnesota; Dr. Paul Williams, DVM, 
Director of Agriculture, Food, and Veterinary Programs, 
Division of Homeland Security, Georgia Emergency Management 
Agency.
    Panel II Witnesses: Lisa Shames, Director, Natural 
Resources and Environment, U.S. Government Accountability 
Office; Dr. Doug Meckes, DVM, Director of Food, Agricultural, 
and Veterinary Defense Division, Office of Health Affairs, U.S. 
Department of Homeland Security; Ted Elkin, Director, Office of 
Food Defense, Communication and Emergency Response, Center for 
Food Safety and Applied Nutrition, Food and Drug 
Administration, U.S. Department of Health and Human Services; 
Sheryl K. Maddux, Deputy Director, Office of Homeland Security 
and Emergency Coordination, U.S. Department of Agriculture, 
accompanied by Dr. John R. Clifford, Deputy Administrator and 
Chief Veterinary Officer for the Animal and Plant Health 
Inspection Service.

Intelligence Community Contractors: Are We Striking the Right Balance? 
        September 20, 2011

    The U.S. Intelligence Community (IC) historically has 
relied on contractors to help meet national security goals, but 
that reliance deepened after the September 11, 2001, attacks. A 
decade after the attacks, the IC remains heavily reliant on 
contractors, so this hearing was held to discuss reasons for 
this continued reliance such as: (1) specialized technical 
capability deficiencies within the government workforce; (2) 
cultural, military, or linguistic expertise deficiencies within 
the government workforce; and (3) greater flexibility with 
contractors that allows government to quickly fill and remove 
positions. This reliance on contractors has been controversial 
because in some workspaces, contractors outnumber government 
employees. Other key concerns discussed during the hearing 
include performance of inherently governmental functions, 
whether the IC has an acquisition workforce that is 
sufficiently equipped to promote the efficient, effective, and 
appropriate use of contractors, the high cost of contract 
employees, increased competition because of higher paying 
contractors, conflicts of interest and misaligned incentives as 
a result of the ``revolving door'', and inadequate strategic 
human capital planning
    Panel I Witness: Hon. Daniel I. Gordon, Administrator, 
Office of Federal Procurement Policy, Office of Management and 
Budget.
    Panel II Witnesses: Hon. Charles E. Allen, Senior 
Intelligence Advisor, Intelligence and National Security 
Alliance; Mark M. Lowenthal, Ph.D., President & CEO, The 
Intelligence and Security Academy, LLC; Scott H. Amey, General 
Counsel, Project on Government Oversight; Joshua Foust, Fellow, 
American Security Project.
    Panel III Witnesses (Closed Session): Edward L. Haugland, 
Assistant Inspector General for Inspections, Office of 
Inspector General, Office of the Director of National 
Intelligence; Paula J. Roberts, Associate Director of National 
Intelligence for Human Capital and Intelligence Community Chief 
Human Capital Officer, Office of the Director of National 
Intelligence.

Labor-Management Forums in the Federal Government, October 11, 2011

    This hearing examined the implementation of labor 
management forums required under Executive Order 13522, signed 
by President Obama on December 9, 2009. The work of the 
National Council on Federal Labor-Management Relations was 
discussed, including its efforts to determine the effectiveness 
of, and potential cost savings from, labor-management forums. 
Additionally, DoD's efforts to establish a new performance 
management and hiring system, while ensuring employee (and 
employee representative) involvement was talked about.
    Panel I Witnesses: Hon. John Berry, Director, U.S. Office 
of Personnel Management; Hon. W. Scott Gould, Deputy Secretary, 
U.S. Department of Veterans Affairs; Pat Tamburrino, Jr. Deputy 
Assistant Secretary of Defense for Civilian Personnel Policy, 
U.S. Department of Defense.
    Panel II Witnesses: William Dougan, President, National 
Federation of Federal Employees; Gregory Junemann, President, 
International Federation of Professional and Technical 
Engineers; Patricia Niehaus, President, Federal Managers 
Association; George Nesterczuk, President, Nesterczuk and 
Associates.

Safeguarding Hawaii's Ecosystem and Agriculture Against Invasive 
        Species, October 27, 2011

    This hearing examined the Federal, State, and local 
interagency initiatives to protect Hawaii against harmful 
invasive pests and diseases. Invasive species cost Hawaii 
hundreds of millions of dollars annually in lost agricultural 
revenue, property damage, and eradication programs. Witnesses 
testified that certain non-native pests that have been 
intercepted at the State's borders, such as the Brown Tree 
Snake, threaten to permanently devastate the fragile island 
ecosystem of Hawaii, which is home to more endangered species 
than any other State. It was discussed how the loss of animals 
and foliage unique to Hawaii, combined with the introduction of 
pests and diseases not native to the islands, such as 
mosquitoes or malaria, would grievously harm the State's 
multibillion dollar tourism industry, the primary driver of 
Hawaii's economy, and could affect the character and quality of 
life found in Hawaii.
    Panel I Witness: Hon. Neil Abercrombie, Governor, State of 
Hawaii
    Panel II Witnesses: Hon. Clifton K. Tsuji, Chair of the 
House Committee on Agriculture, Hawaii State Legislature; Hon. 
Clarence K. Nishihara, Chair of the Senate Committee on 
Agriculture, Hawaii State Legislature; Hon. James J. Nakatani, 
Deputy Director, Hawaii Department of Agriculture, Mr. Lyle 
Wong, Ph.D., Plant Industry Administrator for the Hawaii 
Department of Agriculture, testified on behalf of Deputy 
Director Nakatani.
    Panel III Witnesses: Bruce W. Murley, Area Port Director, 
Honolulu, Office of Field Operations, Customs and Border 
Protection, U.S. Department of Homeland Security; Vernon 
Harrington, Hawaii State Plant Health Director, Plant 
Protection and Quarantine, Animal and Plant Health Inspection 
Services, U.S. Department of Agriculture; George Phocas, 
Resident-Agent-in-Charge, Office of Law Enforcement, Fish and 
Wildlife Service, U.S. Department of the Interior.

From Earthquakes to Terrorist Attacks: Is the National Capital Region 
        Prepared for the Next Disaster? December 7, 2011

    This hearing examined the preparedness of the National 
Capital Region (NCR) to respond to both natural and manmade 
disasters. Testimony focused specifically on NCR strategic 
planning, areas to improve efficiencies and effectiveness in 
leadership, coordination and decision-making authority in a 
crisis, and communication capabilities among key stakeholders.
    Witnesses: Steward D. Beckham, Director, Office of National 
Capital Region Coordination, Federal Emergency Management 
Agency, U.S. Department of Homeland Security; Richard Muth, 
Director, Maryland Emergency Management Agency, State of 
Maryland; Dean S. Hunter, Deputy Director, Facilities, 
Security, and Contracting, U.S. Office of Personnel Management; 
Terrie Suit, Secretary of Veterans Affairs and Homeland 
Security, the Commonwealth of Virginia; Bill Jenkins, Director, 
Homeland Security and Justice Team, U.S. Government 
Accountability Office; Paul Quander, Deputy Mayor for Public 
Safety and Justice, District of Columbia.

Federal Retirement Processing: Ensuring Proper and Timely Payments, 
        February 1, 2012

    The Office of Personnel Management (OPM) administers the 
Civil Service Retirement and Disability Fund (CSRDF), servicing 
roughly 2.5 million Federal retirees, and processing 
approximately 100,000 new claims each year. Incomplete agency 
files and an outdated system have resulted in delayed annuity 
payments, particularly to recently retired Federal employees. 
This hearing examined areas in need of reform, including 
retirement system modernization, processing delays, customer 
service, and adequate internal controls to detect and prevent 
fraud so that tax dollars are protected and properly 
administered.
    Panel I Witnesses: Hon. John Berry, Director, U.S. Office 
of Personnel Management; Hon. Patrick McFarland, Inspector 
General, U.S. Office of Personnel Management; Valerie Melvin, 
Director of Information Management and Technology Resource 
Issues, U.S. Government Accountability Office.
    Panel II Witnesses: Joseph Beaudoin, President, National 
Active and Retired Federal Employees Association; George 
Nesterczuk, President, Nesterczuk and Associates.

Managing Interagency Nuclear Nonproliferation Efforts: Are We 
        Effectively Securing Nuclear Materials Around the World? March 
        14, 2012

    This hearing assessed the United States' progress in 
securing vulnerable nuclear material domestically and abroad 
pursuant to the President's 4-year plan. In particular, it 
examined the effectiveness of the multiple Federal agencies 
tasked with preventing the theft and diversion of nuclear 
materials. It also reviewed the goals for the Seoul summit and 
explored agency strategic plans to improve nuclear material 
security beyond the 4-year time frame. Furthermore, it examined 
our cooperation and coordination with international bodies, 
such as the International Atomic Energy Agency (IAEA), to meet 
nuclear material security objectives. Finally, this hearing 
provided an opportunity for the Government Accountability 
Office (GAO) to report on several completed and ongoing related 
nuclear security investigations.
    Panel I Witnesses: Hon. Thomas M. Countryman, Assistant 
Secretary for International Security and Nonproliferation, U.S. 
Department of State; Hon. Anne Harrington, Deputy Administrator 
for Defense Nuclear Nonproliferation, National Nuclear Security 
Administration, U.S. Department of Energy; Hon. Kenneth B. 
Handelman, Principal Deputy Assistant Secretary for Global 
Strategic Affairs, U.S. Department of Defense; Gene Aloise, 
Director, Natural Resources and Environment, U.S. Government 
Accountability Office.
    Panel II Witnesses: Kenneth Luongo, President, Partnership 
for Global Security; Page O. Stougland, Ph.D., Vice President, 
Nuclear Materials Security Program, Nuclear Threat Initiative.

A Review of the Office of Special Counsel and Merit Systems Protection 
        Board, March 20, 2012

    This hearing examined the Office of Special Counsel's (OSC) 
and the Merit Systems Protection Board's (MSPB or Board) recent 
progress and challenges in fulfilling their statutory 
responsibilities. The MSPB and OSC were created by the Civil 
Service Reform Act of 1978 to safeguard the merit system 
principles and help ensure that Federal employees are free from 
discriminatory, arbitrary, and retaliatory actions, 
particularly those who step forward to disclose government 
waste, fraud, and abuse.
    Witnesses: Hon. Susan Tsui Grundman, Chairman, Merit 
Systems Protection Board; Hon. Carolyn Lerner, Special Counsel, 
U.S. Office of Special Counsel.

Financial Literacy: Empowering Americans to Prevent the Next Financial 
        Crisis, April 26, 2012

    This was the fifth oversight hearing in a series addressing 
a critical national priority: financial literacy. Efforts to 
enhance, coordinate, and streamline Federal financial literacy 
and financial access initiatives aimed at improving the 
financial capability of all Americans were examined.
    Panel I Witness: Hon. Sheila Bair, Former Chairman, U.S. 
Federal Deposit Insurance Corporation & Senior Advisor, The Pew 
Charitable Trusts.
    Panel II Witnesses: Melissa Koide, Deputy Assistant 
Secretary, Office of Financial Education & Financial Access, 
U.S. Department of the Treasury; Alicia Puente Cackley, 
Director, Financial Markets & Community Investment, U.S. 
Government Accountability Office; Camille Busette, Assistant 
Director, Office of Financial Education, Consumer Financial 
Protection Bureau.
    Panel III Witnesses: Brigitte Madrian, Ph.D., Aetna 
Professor of Public Policy & Corporate Management, John F. 
Kennedy School of Government, Harvard University; Mark 
Calabria, Ph.D., Director, Financial Regulation Studies, Cato 
Institute; Sharra Jones, Math Instructor, Oak Park Elementary 
School, Laurel School District; Michael Martin, Academy of 
Finance Instructor, Lansdowne High School, Baltimore County 
Public Schools, Evan Richards, Academy of Finance Alumnus, 
Lansdowne High School, Baltimore County Public Schools.

Building and Maintaining an Effective Human Resource Workforce in the 
        Federal Government, May 9, 2012

    This hearing explored the current state of Federal human 
resource (HR) professionals, what the Federal Government is 
doing to build and maintain an effective HR workforce, and what 
more can be done to ensure our HR workforce is responsive and 
an educated strategic partner that can help meet the demands of 
the Federal Government.
    Panel I Witnesses: Hon. John Berry, Director, U.S. Office 
of Personnel Management, Hon. John Sepulveda, Assistant 
Secretary for Human Resources and Administration, U.S. 
Department of Veterans Affairs; Anita Blair, Deputy Assistant 
Secretary for Human Resources and Chief Human Capital Officer, 
U.S. Department of the Treasury.
    Panel II Witnesses: John Palguta, Vice President for 
Policy, Partnership for Public Service; Sara Thompson, Ph.D., 
Dean, Metropolitan School of Professional Studies, The Catholic 
University of America.

A National Security Crisis: Foreign Language Capabilities in the 
        Federal Government, May 21, 2012

    This hearing reviewed the state of the Federal Government's 
foreign language capabilities, how language skill deficiencies 
impact national security, and ways to improve the nation's 
language capacity. The September 11, 2001 terrorist attacks 
revealed our Nation's severe shortages of Americans proficient 
in foreign languages and with the necessary cultural expertise 
as we failed to fully understand the threat. It was discussed 
how Federal agencies have shortages in translators and 
interpreters and an overall shortfall of proficient speakers. 
Testimony focused on steps to address these issues and the 
different programs Federal agencies have implemented to 
increase foreign language capabilities.
    Panel I Witnesses: Hon. Eduardo Ochoa, Assistant Secretary 
for the Office of Postsecondary Education, U.S. Department of 
Education; Hon. Linda Thomas-Greenfield, Director General of 
the Foreign Service and Director of Human Resources, U.S. 
Department of State; Laura Junor, Ph.D., Deputy Assistant 
Secretary of Defense for Readiness, U.S. Department of Defense; 
Tracey North, Deputy Assistant Director, Intelligence 
Operations Branch, Directorate of Intelligence, Federal Bureau 
of Investigation, U.S. Department of Justice; Glen Nordin, 
Principal Foreign Language and Area Advisor, Office of the 
Under Secretary of Defense Intelligence, U.S. Department of 
Defense (Representing the Director of National Intelligence).
    Panel II Witnesses: Andrew Lawless, Member of the 
Globalization and Localization Association and Chief Executive 
Officer, Dig-IT Strategies for Content Globalization; Allan 
Goodman, Ph.D., Member of the Council on Foreign Relations' 
Task Force on U.S. Education Reform and National Security and 
President of the Institute for International Education; Dan E. 
Davidson, Ph.D., President of American Councils for 
International Education and Elected President of the Joint 
National Committee for Languages.
    Panel III Witnesses: Shauna Kaplan, 5th Grade Student, 
Providence Elementary School, Fairfax County, Virginia; Paula 
Patrick, Coordinator of World Languages, Fairfax County Public 
Schools; Michelle Dressner, 2010 Participant, National Security 
Language Initiative for Youth Program; Jeffrey Wood, 2010 
Participant, National Security Language Initiative for Youth 
Program; Major Gregory Mitchell, 1995 Fellow for the David L. 
Boren Fellowship Program.

Security Clearance Reform: Sustaining Progress for the Future, June 21, 
        2012

    In 2005, the Government Accountability Office (GAO) placed 
the personnel security clearance process on its High-Risk List 
due, in part, to a massive backlog of applications and 
insufficient quality standards. This hearing was eighth in a 
series of hearings on the security clearance process since that 
time. In 2011, the security clearance process was removed from 
GAO's High-Risk List. It was discussed how the application 
backlog has been eliminated, and timeliness requirements in the 
2004 Intelligence Reform and Terrorism Prevention Act have been 
met and exceeded. It was stated that initial investigations 
currently take an average of 44 days to complete compared to a 
staggering 189 days in 2005. Though considerable progress was 
made, challenges that still remain were touched upon. There 
must be continued oversight and accountability to ensure 
sustained progress and momentum in the future. Other issues 
addressed include reciprocity among agencies, establishing more 
uniform training, investigation, and suitability standards, 
additional information technology improvements to support 
information-sharing and case management.
    Witnesses: Hon. Gene Dodaro, Comptroller General, U.S. 
Government Accountability Office; Hon. Danny Werfel, 
Controller, U.S. Office of Management and Budget; Hon. 
Elizabeth McGrath, Deputy Chief Management Officer, U.S. 
Department of Defense; Merton Miller, Associate Director, 
Federal Investigative Services, U.S. Office of Personnel 
Management; Charlie Sowell, Deputy Assistant Director for 
Special Security, Office of the Director of National 
Intelligence.

State of Federal Privacy and Data Security Law: Lagging Behind the 
        Times? July 31, 2012

    The Privacy Act was enacted in 1974 to protect Americans' 
personal information from improper disclosure by the Federal 
Government. However, the rapid expansion of technology and few 
updates to the Privacy Act have rendered the law outdated. This 
hearing examined whether the Privacy Act and other related 
privacy laws adequately protect privacy in the 21st century, 
reviewed whether Federal leadership on privacy policy should be 
altered, and explored how Congress can fix our privacy and data 
security framework. It also examined the response to the recent 
cyber attack that led to the unauthorized access to the 
personal information of 123,000 Thrift Savings Plan 
participants and ways to avoid such agency data breaches in the 
future.
    Panel I Witnesses: Mary Ellen Callahan, Chief Privacy 
Officer, U.S. Department of Homeland Security; Greg Long, 
Executive Director, Federal Retirement Thrift Investment Board, 
Greg Wilshusen, Director, Information Security Issues, U.S. 
Government Accountability Office.
    Panel II Witnesses: Peter Swire, C. William O'Neill 
Professor of Law, Ohio State University; Chris Calabrese, 
Legislative Counsel, American Civil Liberties Union; Paul 
Rosenzweig, Visiting Fellow, The Heritage Foundation.

Investing in an Effective Federal Workforce, September 19, 2012

    This hearing addressed both the current state of the 
Federal workforce, and the steps being taken to ensure that the 
Federal Government is an effective and efficient provider of 
services for future generations. Key topic discussed include: 
Federal hiring reform, Usajobs.com, hiring people with 
disabilities, diversity in the Federal workforce, the Veterans 
Hiring Initiative, the Federal Student Pathways program, work-
life balance, telework opportunities, Federal pay and benefits, 
retirement processing, non-foreign area locality pay, Federal 
training, whistleblower protections, security clearance reform, 
Senior Executive Service (SES) reform, and national labor 
relations.
    Panel I Witnesses: Hon. John Berry, Director, U.S. Office 
of Personnel Management; Hon. Gene Dodaro, Comptroller General, 
U.S. Government Accountability Office.
    Panel II Witnesses: Colleen Kelley, President, National 
Treasury Employees Union; J. David Cox, President, American 
Federation of Government Employees, AFL-CIO; Max Stier, 
President, Partnership for Public Service; William Bransford, 
Representative, Government Mangers Coalition.

                            II. Legislation

    The following bills were considered by the Subcommittee on 
Oversight of Government Management, the Federal Workforce, and 
the District of Columbia during the 112th Congress:

                       Measures Enacted into Law

    P.L. 112-145, H.R. 3902--The District of Columbia Special 
Election Reform Act amends the District of Columbia Home Rule 
Act to require the Board of Elections and Ethics, in filling 
the following vacancies, to hold a special election in the 
District on the first Tuesday occurring between 70 and 174 days 
(currently, the first Tuesday occurring more than 114 days) 
after the vacancy occurs which the Board determines, based on a 
totality of the circumstances, taking into account, inter alia, 
cultural and religious holidays and the administrability of the 
election, will provide the greatest level of voter 
participation. Eliminates the specific alternative of a special 
election on the same day as the next general election (without 
eliminating the option of a special election on the same day as 
the next general election). Applies this revised special 
election requirement to: (1) the Office of the Chairman of the 
Council of the District of Columbia, (2) a Council member 
elected from a ward or elected at large, (3) the Office of the 
Mayor of the District, and (4) the Office of the Attorney 
General of the District.
    P.L. 112-199, S. 743--Title I: Protection of Certain 
Disclosures of Information by Federal Employees--(Sec. 101) The 
Whistleblower Protection Enhancement Act of 2012 amends Federal 
personnel law relating to whistleblower protections to provide 
that such protections shall apply to a disclosure of any 
violation of law (currently, a violation of law). Provides that 
a disclosure shall not be excluded from whistleblower 
protections because: (1) the disclosure was made to a 
supervisor or to a person who participated in an activity that 
the employee or applicant for employment reasonably believed to 
evidence gross mismanagement, gross waste of funds, abuse of 
authority, or a substantial and specific danger to public 
health or safety; (2) the disclosure revealed information that 
had been previously disclosed; (3) of the employee or 
applicant's motive for making the disclosure; (4) the 
disclosure was not made in writing; (5) the disclosure was made 
while the employee was off duty; or (6) of the amount of time 
which has passed since the occurrence of the events described 
in the disclosure. Provides that a disclosure shall not be 
excluded from whistleblower protections if it is made during 
the normal course of duties of an employee with respect to whom 
another employee with authority took, failed to take, or 
threatened to take or fail to take a personnel action in 
reprisal for the disclosure. (Sec. 102) Defines ``disclosure'' 
as a formal or informal communication or transmission, 
excluding a communication concerning policy decisions that 
lawfully exercise discretionary authority, unless the employee 
or applicant making the disclosure reasonably believes that it 
evidences: (1) any violation of any law, rule, or regulation; 
or (2) gross mismanagement, gross waste of funds, abuse of 
authority, or a substantial and specific danger to public 
health or safety. (Sec. 103) Provides that any presumption 
regarding a public officer's performance of a duty may be 
rebutted by substantial evidence. Establishes a ``disinterested 
observer'' standard for evaluating the validity of disclosures 
that evidence violations of law, gross mismanagement, gross 
waste of funds, an abuse of authority, or a substantial and 
specific danger to public health or safety. (Sec. 104) Includes 
as a prohibited personnel practice the implementation or 
enforcement of any nondisclosure policy, form, or agreement 
that does not contain a specific statement that its provisions 
are consistent with and do not supersede, conflict with, or 
otherwise alter the employee obligations, rights, or 
liabilities created by existing statute or executive order 
relating to: (1) classified information; (2) communications to 
Congress; (3) the reporting to an Inspector General of a 
violation of any law, rule, or regulation or mismanagement, a 
gross waste of funds, an abuse of authority, or a substantial 
and specific danger to public health or safety; or (4) any 
other whistleblower protection. Allows the enforcement of a 
nondisclosure policy, form, or agreement that was in effect 
prior to the effective date of this Act if the agency gives an 
affected employee notice of the statement required by this 
section. Allows any action ordered to correct a prohibited 
personnel practice to include fees, costs, or damages 
reasonably incurred due to an agency investigation of an 
employee that was commenced, expanded, or extended in 
retaliation for the disclosure of protected activity that 
formed the basis of the corrective action. (Sec. 105) Adds the 
Office of the Director of National Intelligence and the 
National Reconnaissance Office to the list of intelligence 
community entities excluded from coverage under the 
Whistleblower Protection Act of 1989 (WPA). Provides that a 
whistleblower cannot be deprived of WPA coverage unless the 
President removes the whistleblower's agency from coverage 
prior to a challenged personnel action taken against the 
whistleblower. (Sec. 106) Revises the standard of proof in 
disciplinary proceedings against an agency employee who takes 
an adverse personnel action against a whistleblower to require 
the Office of Special Counsel to show that the whistleblower's 
protected disclosure was a significant motivating factor in the 
decision to take an adverse action, even if other factors also 
motivated the decision. (Sec. 107) Authorizes: (1) the Merit 
Systems Protection Board (MSPB), in disciplinary actions, to 
require payment of reasonable attorney fees by the agency where 
the prevailing party is employed, or has applied for 
employment, if specified conditions apply; and (2) reasonable 
and foreseeable consequential and compensatory damages 
(including interest, reasonable expert witness fees, and costs) 
if MSPB orders corrective action. (Sec. 108) Requires that, 
during the 2-year period beginning on the effective date of 
this Act, a petition to review a final order or decision of the 
MSPB that raises no challenge to the MSPB's disposition of 
allegations of a prohibited personnel practice shall be filed 
in any court of appeals of competent jurisdiction (rather than 
exclusively in the Federal Circuit). Allows such court 
discretion to grant a petition for judicial review. (Sec. 109) 
Extends whistleblower and other anti-discrimination protections 
to employees (and applicants for employment) of the 
Transportation Security Administration (TSA). (Sec. 110) 
Extends whistleblower protections to any current or prospective 
Federal employee for disclosures that such employee reasonably 
believes are evidence of censorship related to research, 
analysis, or technical information. (Sec. 111) Amends the 
Homeland Security Act of 2002 to provide that a permissible use 
of independently obtained infrastructure information includes 
the disclosure of such information for whistleblower purposes. 
(Sec. 112) Requires Federal agency heads to advise their 
employees on how to make a lawful disclosure of information 
that is required to be kept classified in the interest of 
national defense or the conduct of foreign affairs. (Sec. 113) 
Authorizes the Special Counsel to appear as amicus curiae in 
whistleblower actions. (Sec. 114) Provides that corrective 
action relating to a prohibited personnel practice may not be 
ordered if, after a finding that a protected disclosure was a 
contributing factor in taking a personnel action, the agency 
demonstrates by clear and convincing evidence that it would 
have taken the same personnel action in the absence of such 
disclosure. (Sec. 115) Requires each government nondisclosure 
policy, form, or agreement to contain a specific statement that 
its provisions are consistent with and do not supersede, 
conflict with, or otherwise alter the employee obligations, 
rights, or liabilities created by existing statute or executive 
order relating to: (1) classified information; (2) 
communications to Congress; (3) the reporting to an Inspector 
General of a violation of any law, rule, or regulation or 
mismanagement, a gross waste of funds, an abuse of authority, 
or a substantial and specific danger to public health or 
safety; or (4) any other whistleblower protection. Prohibits 
implementing or enforcing any nondisclosure policy, form, or 
agreement that does not contain such statement to the extent 
such policy, form, or agreement is inconsistent with such 
statement. Permits nondisclosure policies, forms, and 
agreements in effect before the enactment of this Act to 
continue to be enforced with respect to: (1) current employees 
if the agency provides notice of the statement to such 
employees, and (2) former employees if the agency posts notice 
of the statement on its website. Provides that a nondisclosure 
policy, form, or agreement for a person who is not a Federal 
employee, but who is connected with the conduct of intelligence 
or intelligence-related activity, shall contain appropriate 
provisions that: (1) require nondisclosure of classified 
information, and (2) make it clear that the forms do not bar 
disclosures to Congress or an authorized official that are 
essential to reporting a substantial violation of law. (Sec. 
116) Requires the Comptroller General (GAO), not later than 4 
years after the enactment of this Act, to report to specified 
congressional committees on the implementation of this title, 
including an analysis of changes in the number of cases filed 
with MSPB alleging violations, the outcome of such cases, and 
the impact the process has had on MSPB and the Federal court 
system. Requires MSPB to include in its annual program 
performance reports information on the number and outcome of 
whistleblower cases filed. (Sec. 117) Amends the Inspector 
General Act of 1978 to require each inspector general of a 
Federal agency, except any agency that is an element of the 
intelligence community or whose principal function is the 
conduct of foreign intelligence or counter intelligence 
activities, to designate a Whistleblower Protection Ombudsman 
to educate agency employees about prohibitions on retaliation 
for protected disclosures and rights and remedies against such 
retaliation. Terminates the authority for such Ombudsman 5 
years after the enactment of this Act. Title II: Savings 
Clause; Effective Date--(Sec. 201) Declares that nothing in 
this Act shall be construed to imply any limitation on any 
protections afforded to employees and applicants for employment 
by any other provision of law. (Sec. 202) Makes this Act 
effective 30 days after its enactment, except for provisions 
relating to TSA employees or applicants for employment, which 
shall be effective on the enactment date of this Act.
    P.L. 112-230, S. 2170--The Hatch Act Modernization Act of 
2012 allows a State or local officer or employee to be a 
candidate for partisan elective office unless the salary of 
such officer or employee is paid completely, directly or 
indirectly, by loans or grants made by the United States or a 
Federal agency. (Sec. 3) Redefines ``State or local agency'' 
for purposes of the Hatch Act to include the executive branch 
of the District of Columbia, or an agency or department 
thereof. Extends the exemption from Hatch Act requirements for 
State or local officers or employees to individuals employed by 
an educational or research institution, establishment, agency 
or system supported in whole or in part by the District of 
Columbia. Extends the exemption from the prohibition against 
running for elective office to the head of an executive 
department of the District of Columbia who is not classified 
under an applicable merit or civil-service system. Extends to 
agencies of the District of Columbia provisions requiring the 
Merit System Protection Board (MSPB) to withhold funds from 
agencies that reappoint employees removed for violating the 
Hatch Act within 18 months after removal. Exempts individuals 
employed or holding office in the District of Columbia from 
provisions of the Hatch Act applicable to Federal employees. 
Makes Federal employees living in the District of Columbia 
eligible to participate in local politics to the same extent as 
Federal employees living in nearby areas of Maryland or 
Virginia. (Sec. 4) Replaces existing penalty provisions for 
violations of the Hatch Act to make an offending employee 
subject to removal (currently, removal is mandatory), reduction 
in grade, debarment from Federal employment for 5 years, 
suspension, reprimand, or a civil penalty of not more than 
$1,000. (Sec. 5) Makes the new penalties imposed by this Act 
applicable to violations occurring before, on, or after the 
effective date of this Act, unless, before the effective date 
of this Act, the Special Counsel has presented a complaint for 
disciplinary action with respect to an alleged violation or the 
employee alleged to have committed the violation has entered 
into a signed settlement agreement with the Special Counsel.

     Measures Which Did Not Advance Beyond Referral to Subcommittee

    S. 47--The Clinical Social Workers' Recognition Act of 2011 
amends Federal law concerning Federal workers' compensation to 
authorize the use of clinical social workers to conduct 
evaluations to determine work-related emotional and mental 
illnesses.
    S. 376--A bill to amend title 5, United States Code, makes 
an individual who has a seriously delinquent tax debt 
ineligible to be appointed, or to continue serving, as a 
Federal employee.
    S. 514--The Gold Star Fathers Act of 2011 includes as a 
preference eligible for Federal employment purposes a parent 
(currently, the mother only) of either an individual who lost 
his or her life under honorable conditions while serving in the 
Armed Forces during a war, in a campaign or expedition for 
which a campaign badge has been authorized, or during the 
period beginning April 28, 1952, and ending July 1, 1955, or a 
service-connected permanently and totally disabled veteran, if: 
(1) the spouse of such parent is totally and permanently 
disabled; or (2) such parent, when preference is claimed, is 
unmarried or legally separated from his or her spouse.
    S. 644--The Public-Private Employee Retirement Parity Act 
excludes as creditable service under the Federal Employees' 
Retirement System any service performed by an employee or 
Member of Congress (including military service) performed after 
December 31, 2012, if that individual did not perform any 
period of creditable service (including military service) 
before January 1, 2013. Prohibits an employing agency from 
making any deduction or withholding from the basic pay of any 
employee or Member for such excluded service.
    S. 742--The Congressional Retirement Age Act of 2011--
Prohibits a Member of Congress serving on or after the 
enactment of this Act from being eligible for an annuity under 
the Civil Service Retirement System (CSRS) or the Federal 
Employees' Retirement System (FERS), unless he or she is 
separated from the service after attaining retirement age under 
the Social Security Act and completing 5 years of service. 
Makes a Member serving on or after the enactment of this Act 
ineligible for a CSRS or FERS deferred retirement annuity, 
unless the Member is separated from the service, or transferred 
to a position in which the individual does not continue subject 
to CSRS or FERS annuity requirements, after completing 5 years 
of service. Denies an early retirement annuity under FERS to 
any Member serving on or after enactment of this Act who 
otherwise meets FERS early retirement requirements. Delays 
entitlement to a FERS annuity until after attaining retirement 
age under the Social Security Act.
    S. 776--The Federal Employee Retroactive Pay Fairness Act 
requires Federal employees who are furloughed as a result of 
any lapse in appropriations that begins on or about April 9, 
2011, to be compensated at their standard rate of compensation 
for the period of such lapse as soon as practicable after such 
lapse ends.
    S. 790--The Federal Supervisor Training Act of 2011 expands 
requirements relating to specific training programs for Federal 
agency supervisors by requiring the head of each Federal agency 
to establish: (1) a program to train supervisors in carrying 
out their duties, including mentoring and motivating employees, 
fostering a employee-friendly work environment, and effectively 
managing employees with unacceptable performance ratings; (2) a 
program to train supervisors on prohibited personnel practices. 
employee collective bargaining and union participation rights, 
and the procedures and processes used to enforce employee 
rights; and (3) a program under which experienced supervisors 
mentor new supervisors. Requires: (1) the Director of the 
Office of Personnel Management (OPM) to issue guidance to 
Federal agencies on competencies supervisors are expected to 
meet in order to effectively manage, and be accountable for 
managing, the performance of employees; and (2) each agency to 
assess the performance of its supervisors and the overall 
capacity of its supervisors, based on such guidance.
    S. 2103--The District of Columbia Pain-Capable Unborn Child 
Protection Act amends the Federal criminal code to prohibit any 
person from performing or attempting to perform an abortion 
within the District of Columbia except in conformity with this 
Act's requirements. Requires the physician to first make a 
determination of the probable post-fertilization age of the 
unborn child, or reasonably rely upon such a determination made 
by another physician, by making inquiries of the pregnant woman 
and performing such medical examinations and tests as a 
reasonably prudent physician would consider necessary. 
Prohibits the abortion from being performed if the probable 
post-fertilization age of the unborn child is 20 weeks or 
greater. Makes an exception where necessary to save the life of 
a pregnant woman whose life is endangered by a physical 
disorder, illness, or injury, excluding psychological or 
emotional conditions or any claim or diagnosis that the woman 
will engage in conduct intended to result in her death. Permits 
a physician to terminate a pregnancy under such exception only 
in the manner which provides the best opportunity for the 
unborn child to survive, unless termination of the pregnancy in 
that manner would pose a greater risk of the death or 
substantial and irreversible physical impairment of a major 
bodily function, not including psychological or emotional 
conditions, of the pregnant woman than would other available 
methods. Prescribes penalties for violations. Bars prosecution 
of a woman upon whom an abortion is performed in violation of 
this Act, but authorizes such a woman or the father or maternal 
grandparent of the unborn child to obtain appropriate relief 
through a civil action. Provides for injunctive relief to 
prevent violations. Sets forth specified privacy protections in 
court proceedings for the woman upon whom an abortion has been 
performed. Requires any physician who performs an abortion 
within the District to report it to the Department of Health of 
the District of Columbia, which shall issue annual public 
reports.

                            III. GAO Reports

    The following reports were issued by the Government 
Accountability Office at the request of the Chairman/Ranking 
Member of the Subcommittee on Oversight of Government 
Management, the Federal Workforce, and the District of Columbia 
during the 112th Congress:
    ``Program Evaluation: Experienced Agencies Follow a Similar 
Model for Prioritizing Research,'' GAO-11-176, January 14, 
2011.
    ``Department of State: Additional Steps Are Needed to 
Improve Strategic Planning and Evaluation of Training for State 
Personnel,'' GAO-11-241, January 25, 2011.
    ``Diplomatic Security: Expanded Missions and Inadequate 
Facilities Pose Critical Challenges to Training Efforts,'' GAO-
11-460, June 1, 2011.
    ``DHS Science and Technology: Additional Steps Needed to 
Ensure Test and Evaluation Requirements Are Met,'' GAO-11-596, 
June 15, 2011.
    ``Long-Term Care Insurance: Carrier Interest in the Federal 
Program, Changes to Its Actuarial Assumptions, and OPM 
Oversight,'' GAO-11-630, July 11, 2011.
    ``Emergency Preparedness: Agencies Need Coordinated 
Guidance on Incorporating Telework into Emergency and 
Continuity Planning,'' GAO-11-628, July 22, 2011.
    ``Homeland Security: Actions Needed to Improve Response to 
Potential Terrorist Attacks and Natural Disasters Affecting 
Food and Agriculture,'' GAO-11-652, August 19, 2011.
    ``Quadrennial Homeland Security Review: Enhanced 
Stakeholder Consultation and Use of Risk Information Could 
Strengthen Future Reviews,'' GAO-11-873, September 15, 2011.
    ``UN Internal Oversight: Progress Made on Independence and 
Staffing Issues, but Further Actions Are Needed, GAO-11-871, 
September 20, 2011.
    ``Streamlining Government: Key Practices from Select 
Efficiency Initiatives Should be Shared Governmentwide,'' GAO-
11-908, September 30, 2011.
    ``Embassy Management: State Department and Other Agencies 
Should Further Explore Opportunities to Save Administrative 
Costs Overseas,'' GAO-12-317, January 31, 2012.
    ``DHS Human Capital: Senior Leadership Vacancy Rates 
Generally Declined, but Components' Rates Varied,'' [Reissued 
on February 22, 2012], GAO-12-264, February 10, 2012.
    ``Background Investigations: Office of Personnel Management 
Needs to Improve Transparency of Its Pricing and Seek Cost 
Savings,'' GAO-12-197, February 28, 2012.
    ``Interagency Collaboration: State and Army Personnel 
Rotation Programs Can Build on Positive Results with Additional 
Preparation and Evaluation,'' GAO-12-386, March 9, 2012.
    ``Federal Telework: Program Measurement Continues to 
Confront Data Reliability Issues,'' GAO-12-519, April 19, 2012.
    ``Modernizing the Nuclear Security Enterprise: Strategies 
and Challenges in Sustaining Critical Skills in Federal and 
Contractor Workforces,'' GAO-12-468, April 26, 2012.
    ``Federal Emergency Management Agency: Workforce Planning 
and Training Could Be Enhanced by Incorporating Strategic 
Management Principles,'' GAO-12-487, April 26, 2012.
    ``Streamlining Government: Questions to Consider When 
Evaluating Proposals to Consolidate Physical Infrastructure and 
Management Functions,'' GAO-12-542, May 23, 2012.
    ``Disaster Assistance Workforce: FEMA Could Enhance Human 
Capital Management and Training,'' GAO-12-538, May 25, 2012.
    ``Disability Employment: Further Action Needed to Oversee 
Efforts to Meet Federal Government Hiring Goals,'' GAO-12-568, 
May 25, 2012.
    ``Department of State: Foreign Service Midlevel Staffing 
Gaps Persist Despite Significant Increases in Hiring,'' GAO-12-
721, June 14, 2012.
    ``World Health Organization: Reform Agenda Developed, but 
U.S. Actions to Monitor Progress Could be Enhanced, GAO-12-722, 
July 23, 2012.
    ``Influenza Pandemic: Agencies Report Progress in Plans to 
Protect Federal Workers but Oversight Could be Improved,'' GAO-
12-748, July 25, 2012.
    ``Nuclear Nonproliferation: Additional Actions Needed to 
Improve Security of Radiological Sources at U.S. Medical 
Facilities,'' GAO-12-925, September 10, 2012.
    ``Department of Homeland Security: Oversight and 
Coordination of Research and Development Should Be 
Strengthened,'' GAO-12-837, September 12, 2012.
    ``Federal Training Investments: Office of Personnel 
Management and Agencies Can Do More to Ensure Cost-Effective 
Decisions,'' GAO-12-878, September 17, 2012.
    ``Managing for Results: Key Considerations for Implementing 
Interagency Collaborative Mechanisms,'' GAO-12-1022, September 
27, 2012.
    ``Homeland Security: Agriculture Inspection Program Has 
Made Some Improvements, but Management Challenges Persist,'' 
GAO-12-885, September 27, 2012.
    ``Afghanistan Development: Agencies Could Benefit from a 
Shared and More Comprehensive Database on U.S. Efforts,'' GAO-
13-34, November 7, 2012.
    ``DHS Strategic Workforce Planning: Oversight of 
Departmentwide Efforts Should Be Strengthened,'' GAO-13-65, 
December 3, 2012.
    ``Federal Rulemaking: Agencies Could Take Additional Steps 
to Respond to Public Comments,'' GAO-13-21, December 20, 2012 
[Restricted].
                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS


                          Chairman: Carl Levin


                  Ranking Minority Member: Tom Coburn

    The following is the Activities Report of the Permanent 
Subcommittee on Investigations during the 112th Congress.

                        I. HISTORICAL BACKGROUND


                      A. Subcommittee Jurisdiction

    The Permanent Subcommittee on Investigations was originally 
authorized by Senate Resolution 189 on January 28, 1948. At its 
creation in 1948, the Subcommittee was part of the Committee on 
Expenditures in the Executive Departments. The Subcommittee's 
records and broad investigative jurisdiction over government 
operations and national security issues, however, actually 
antedate its creation, since it was given custody of the 
jurisdiction of the former Special Committee to Investigate the 
National Defense Program (the so-called ``War Investigating 
Committee'' or ``Truman Committee''), chaired by Senator Harry 
S. Truman during the Second World War and charged with exposing 
waste, fraud, and abuse in the war effort and war profiteering. 
Today, the Subcommittee is part of the Committee on Homeland 
Security and Governmental Affairs.\1\
---------------------------------------------------------------------------
    \1\In 1952, the parent committee's name was changed to the 
Committee on Government Operations. It was changed again in early 1977, 
to the Committee on Governmental Affairs, and again in 2005, to the 
Committee on Homeland Security and Governmental Affairs, its present 
title.
---------------------------------------------------------------------------
    The Subcommittee has had nine chairmen: Senators Homer 
Ferguson of Michigan (1948), Clyde R. Hoey of North Carolina 
(1949-1952), Joseph R. McCarthy of Wisconsin (1953-1954), John 
L. McClellan of Arkansas (1955-1972), Henry M. Jackson of 
Washington (1973-1978), Sam Nunn of Georgia (1979-1980 and 
1987-1994), William V. Roth of Delaware (1981-1986 and 1995-
1996), Susan M. Collins of Maine (1997-2001); Norm Coleman of 
Minnesota (2003-2007); and Carl Levin of Michigan (2001-2002 
and 2007-present).
    Until 1957, the Subcommittee's jurisdiction focused 
principally on waste, inefficiency, impropriety, and illegality 
in government operations. Its jurisdiction then expanded over 
time, today encompassing investigations within the broad ambit 
of the parent committee's responsibility for matters relating 
to the efficiency and economy of operations of all branches of 
the government, including matters related to: (a) waste, fraud, 
abuse, malfeasance, and unethical practices in government 
contracting and operations; (b) organized criminal activities 
affecting interstate or international commerce; (c) criminal 
activity affecting the national health, welfare, or safety, 
including investment fraud, commodity and securities fraud, 
computer fraud, and offshore abuses; (d) criminality or 
improper practices in labor-management relations; (e) the 
effectiveness of present national security methods, staffing 
and procedures, and U.S. relationships with international 
organizations concerned with national security; (f) energy 
shortages, energy pricing, management of government-owned or 
controlled energy supplies; and relationships with oil 
producing and consuming countries; and (g) the operations and 
management of Federal regulatory policies and programs. While 
retaining the status of a subcommittee of a standing committee, 
the Subcommittee has long exercised its authority on an 
independent basis, selecting its own staff, issuing its own 
subpoenas, and determining its own investigatory agenda.
    The Subcommittee acquired its sweeping jurisdiction in 
several successive stages. In 1957--based on information 
developed by the Subcommittee--the Senate passed a Resolution 
establishing a Select Committee on Improper Activities in the 
Labor or Management Field. Chaired by Senator McClellan, who 
also chaired the Subcommittee at that time, the Select 
Committee was composed of eight Senators--four of whom were 
drawn from the Subcommittee on Investigations and four from the 
Committee on Labor and Public Welfare. The Select Committee 
operated for 3 years, sharing office space, personnel, and 
other facilities with the Permanent Subcommittee. Upon its 
expiration in early 1960, the Select Committee's jurisdiction 
and files were transferred to the Subcommittee on 
Investigations, greatly enlarging the latter body's 
investigative authority in the labor-management area.
    The Subcommittee's jurisdiction expanded further during the 
1960s and 1970s. In 1961, for example, it received authority to 
make inquiries into matters pertaining to organized crime and, 
in 1963, held the famous Valachi hearings examining the inner 
workings of the Italian Mafia. In 1967, following a summer of 
riots and other civil disturbances, the Senate approved a 
Resolution directing the Subcommittee to investigate the causes 
of this disorder and to recommend corrective action. In January 
1973, the Subcommittee acquired its national security mandate 
when it merged with the National Security Subcommittee. With 
this merger, the Subcommittee's jurisdiction was broadened to 
include inquiries concerning the adequacy of national security 
staffing and procedures, relations with international 
organizations, technology transfer issues, and related matters. 
In 1974, in reaction to the gasoline shortages precipitated by 
the Arab-Israeli war of October 1973, the Subcommittee acquired 
jurisdiction to investigate the control and management of 
energy resources and supplies as well as energy pricing issues.
    In 1997, the full Committee on Governmental Affairs was 
charged by the Senate to conduct a special examination into 
illegal or improper activities in connection with Federal 
election campaigns during the 1996 election cycle. The 
Permanent Subcommittee provided substantial resources and 
assistance to this investigation, contributing to a greater 
public understanding of what happened, to subsequent criminal 
and civil legal actions taken against wrongdoers, and to 
enactment of campaign finance reforms in 2001.
    In 1998, the Subcommittee marked the 50th anniversary of 
the Truman Committee's conversion into a permanent subcommittee 
of the U.S. Senate.\2\ Since then, the Subcommittee has 
developed particular expertise in complex financial matters, 
examining the collapse of Enron Corp. in 2001, the key causes 
of the 2008 financial crisis, structured finance abuses, 
financial fraud, unfair credit practices, money laundering, 
commodity speculation, and a wide range of offshore and tax 
haven abuses. It has also focused on issues involving health 
care fraud, foreign corruption, and waste, fraud and abuse in 
government programs. In the half-century of its existence, the 
Subcommittee's many successes have made clear to the Senate the 
importance of retaining a standing investigatory body devoted 
to keeping government not only efficient and effective, but 
also honest and accountable.
---------------------------------------------------------------------------
    \2\This anniversary also marked the first date upon which internal 
Subcommittee records generally began to become available to the public. 
Unlike most standing committees of the Senate whose previously 
unpublished records open after a period of 20 years has elapsed, the 
Permanent Subcommittee on Investigations, as an investigatory body, may 
close its records for 50 years to protect personal privacy and the 
integrity of the investigatory process. With this 50th anniversary, the 
Subcommittee's earliest records, housed in the Center for Legislative 
Archives at the National Archives and Records Administration, began to 
open seriatim. The records of the predecessor committee--the Truman 
Committee--were opened by Senator Nunn in 1980.
---------------------------------------------------------------------------

                     B. Subcommittee Investigations

    Armed with its broad jurisdictional mandate, the 
Subcommittee has conducted investigations into a wide variety 
of topics of public concern, ranging from financial misconduct, 
to unfair energy prices, predatory lending, and tax evasion. 
Over the years, the Subcommittee has also conducted 
investigations into criminal wrongdoing, including money 
laundering, the narcotics trade, child pornography, labor 
racketeering, and organized crime activities. In addition, the 
Subcommittee has investigated a wide range of allegations of 
waste, fraud, and abuse in government programs and consumer 
protection issues, addressing problems ranging from unfair 
credit card practices to health care fraud. In the last 
Congress, among other matters, the Subcommittee conducted 
Congress' most in-depth examination of the 2008 financial 
crisis, holding four hearings and issuing a 750-page bipartisan 
report on key causes of the crisis. In this Congress, the 
Subcommittee has focused on money laundering problems at a 
major global bank, offshore tax abuses by major U.S. 
multinational corporations, excessive commodity speculation by 
mutual funds and others, and deficiencies in Social Security 
disability programs and Department of Homeland Security (DHS) 
fusion centers intended to combat terrorism.

(1) Historical Highlights
    The Subcommittee's investigatory record as a permanent 
Senate body began under the Chairmanship of Republican Senator 
Homer Ferguson and his Chief Counsel (and future Attorney 
General and Secretary of State) William P. Rogers, as the 
Subcommittee inherited the Truman Committee's role in 
investigating fraud and waste in U.S. Government operations. 
This investigative work became particularly colorful under the 
chairmanship of Senator Clyde Hoey, a North Carolina Democrat 
who took the chair from Senator Ferguson after the 1948 
elections. The last U.S. Senator to wear a long frock coat and 
wing-tipped collar, Mr. Hoey was a distinguished southern 
gentleman of the old school. Under his leadership, the 
Subcommittee won national attention for its investigation of 
the so-called ``five percenters,'' notorious Washington 
lobbyists who charged their clients 5 percent of the profits 
from any Federal contracts they obtained on the client's 
behalf. Given the Subcommittee's jurisdictional inheritance 
from the Truman Committee, it is perhaps ironic that the ``five 
percenters'' investigation raised allegations of bribery and 
influence-peddling that reached right into the White House and 
implicated members of President Truman's staff. In any event, 
the fledgling Subcommittee was off to a rapid start.
    What began as colorful soon became contentious. When 
Republicans returned to the Majority in the Senate in 1953, 
Wisconsin's junior Senator, Joseph R. McCarthy, became the 
Subcommittee's Chairman. Two years earlier, as Ranking Minority 
Member, Senator McCarthy had arranged for another Republican 
Senator, Margaret Chase Smith of Maine, to be removed from the 
Subcommittee. Senator Smith's offense, in Senator McCarthy's 
eyes, was her issuance of a ``Declaration of Conscience'' 
repudiating those who made unfounded charges and used character 
assassination against their political opponents. Although 
Senator Smith had carefully declined to name any specific 
offender, her remarks were universally recognized as criticism 
of Senator McCarthy's accusations that communists had 
infiltrated the State Department and other government agencies. 
Senator McCarthy retaliated by engineering Senator Smith's 
removal, replacing her with the newly elected Senator from 
California, Richard Nixon.
    Upon becoming Subcommittee Chairman, Senator McCarthy 
staged a series of highly publicized anti-communist 
investigations, culminating in an inquiry into communism within 
the U.S. Army, which became known as the Army-McCarthy 
hearings. During the latter portion of those hearings, in which 
the parent Committee examined the Wisconsin Senator's attacks 
on the Army, Senator McCarthy recused himself, leaving South 
Dakota Senator Karl Mundt to serve as Acting Chairman of the 
Subcommittee. Gavel-to-gavel television coverage of the 
hearings helped turn the tide against Senator McCarthy by 
raising public concern about his treatment of witnesses and 
cavalier use of evidence. In December 1954, the Senate censured 
Senator McCarthy for unbecoming conduct. In the following year, 
the Subcommittee adopted new rules of procedure that better 
protected the rights of witnesses. The Subcommittee also 
strengthened the rules ensuring the right of both parties on 
the Subcommittee to appoint staff, initiate and approve 
investigations, and review all information in the 
Subcommittee's possession.
    In 1955, Senator John McClellan of Arkansas began 18 years 
of service as Chairman of the Permanent Subcommittee on 
Investigations. Senator McClellan appointed a young Robert F. 
Kennedy as the Subcommittee's Chief Counsel. That same year, 
Members of the Subcommittee were joined by Members of the 
Senate Labor and Public Welfare Committee on a special 
committee to investigate labor racketeering. Chaired by Senator 
McClellan and staffed by Robert Kennedy and other Subcommittee 
staff members, this special committee directed much of its 
attention to criminal influence over the Teamsters Union, most 
famously calling Teamsters' leaders Dave Beck and Jimmy Hoffa 
to testify. The televised hearings of the special committee 
also introduced Senators Barry Goldwater and John F. Kennedy to 
the nation, as well as leading to passage of the Landrum-
Griffin Labor Act.
    After the special committee completed its work, the 
Permanent Subcommittee on Investigations continued to 
investigate organized crime. In 1962, the Subcommittee held 
hearings during which Joseph Valachi outlined the activities of 
La Cosa Nostra, or the Mafia. Former Subcommittee staffer 
Robert Kennedy--who had by then become Attorney General in his 
brother's Administration--used this information to prosecute 
prominent mob leaders and their accomplices. The Subcommittee's 
investigations also led to passage of major legislation against 
organized crime, most notably the Racketeer Influenced and 
Corrupt Organizations (RICO) provisions of the Crime Control 
Act of 1970. Under Chairman McClellan, the Subcommittee also 
investigated fraud in the purchase of military uniforms, 
corruption in the Department of Agriculture's grain storage 
program, securities fraud, and civil disorders and acts of 
terrorism. In addition, from 1962 to 1970, the Subcommittee 
conducted an extensive probe of political interference in the 
awarding of government contracts for the Pentagon's ill-fated 
TFX (``tactical fighter, experimental'') aircraft. In 1968, the 
Subcommittee also examined charges of corruption in U.S. 
servicemen's clubs in Vietnam and elsewhere around the world.
    In 1973, Senator Henry ``Scoop'' Jackson, a Democrat from 
Washington, replaced Senator McClellan as the Subcommittee's 
Chairman. During his tenure, recalled Chief Clerk Ruth Young 
Watt--who served in this position from the Subcommittee's 
founding until her retirement in 1979--Ranking Minority Member 
Charles Percy, an Illinois Republican, became more active on 
the Subcommittee than Chairman Jackson, who was often 
distracted by his Chairmanship of the Interior Committee and 
his active role on the Armed Services Committee.\3\ Senator 
Percy also worked closely with Georgia Democrat Sam Nunn, a 
Subcommittee member who subsequently succeeded Senator Jackson 
as Subcommittee Chairman in 1979. As Chairman, Senator Nunn 
continued the Subcommittee's investigations into the role of 
organized crime in labor-management relations and also 
investigated pension fraud.
---------------------------------------------------------------------------
    \3\It had not been uncommon in the Subcommittee's history for the 
Chairman and Ranking Minority Member to work together closely despite 
partisan differences, but Senator Percy was unusually active while in 
the Minority--a role that included his chairing an investigation of the 
hearing aid industry.
---------------------------------------------------------------------------
    Regular reversals of political fortunes in the Senate 
during the 1980s and 1990s saw Senator Nunn trade the 
chairmanship three times with Delaware Republican William Roth. 
Senator Nunn served from 1979 to 1980 and again from 1987 to 
1995, while Senator Roth served from 1981 to 1986, and again 
from 1995 to 1996. These 15 years saw a strengthening of the 
Subcommittee's bipartisan tradition in which investigations 
were initiated by either the Majority or Minority and fully 
supported by the entire Subcommittee. For his part, Senator 
Roth led a wide range of investigations into commodity 
investment fraud, offshore banking schemes, money laundering, 
and child pornography. Senator Nunn led inquiries into Federal 
drug policy, the global spread of chemical and biological 
weapons, abuses in Federal student aid programs, computer 
security, airline safety, and health care fraud. Senator Nunn 
also appointed the Subcommittee's first female counsel, 
Eleanore Hill, who served as Chief Counsel to the Minority from 
1982 to 1986 and then as Chief Counsel from 1987 to 1995.

(2) More Recent Investigations
    At the beginning of the 105th Congress, in January 1997, 
Republican Senator Susan Collins of Maine became the first 
woman to chair the Permanent Subcommittee on Investigations. 
Senator John Glenn of Ohio became the Ranking Minority Member, 
while also serving as Ranking Minority Member of the full 
Committee. Two years later, in the 106th Congress, after 
Senator Glenn's retirement, Michigan Democrat Carl Levin 
succeeded him as the Subcommittee's Ranking Minority Member. 
During Senator Collins' chairmanship, the Subcommittee 
conducted investigations into issues affecting Americans in 
their day-to-day lives, including mortgage fraud, deceptive 
mailings and sweepstakes promotions, phony credentials obtained 
through the Internet, day trading of securities, and securities 
fraud on the Internet. Senator Levin initiated an investigation 
into money laundering. At his request, in 1999, the 
Subcommittee held hearings on money laundering issues affecting 
private banking services provided to wealthy individuals, and, 
in 2001, on how major U.S. banks providing correspondent 
accounts to offshore banks were being used to advance money 
laundering and other criminal schemes.
    During the 107th Congress, both Senator Collins and Senator 
Levin chaired the Subcommittee. Senator Collins was chairman 
until June 2001, when the Senate Majority party changed hands; 
at that point, Senator Levin assumed the chairmanship and 
Senator Collins, in turn, became the Ranking Minority Member. 
In her first 6 months chairing the Subcommittee at the start of 
the 107th Congress, Senator Collins held hearings examining 
issues related to cross border fraud, the improper operation of 
tissue banks, and Federal programs designed to fight diabetes. 
When Senator Levin assumed the chairmanship, as his first major 
effort, the Subcommittee initiated an 18-month bipartisan 
investigation into the Enron Corporation, which had recently 
collapsed into bankruptcy. As part of that investigation, the 
Subcommittee reviewed over 2 million pages of documents, 
conducted more than 100 interviews, held four hearings, and 
issued three bipartisan reports focusing on the role played by 
Enron's Board of Directors, Enron's use of tax shelters and 
structured financial instruments, and how major U.S. financial 
institutions contributed to Enron's accounting deceptions, 
corporate abuses, and ultimate collapse. The Subcommittee's 
investigative work contributed to passage of the Sarbanes-Oxley 
Act which enacted accounting and corporate reforms in July 
2002. In addition, Senator Levin continued the money laundering 
investigation initiated while he was the Ranking Minority 
Member, and the Subcommittee's work contributed to enactment of 
major reforms strengthening U.S. anti-money laundering laws in 
the 2001 PATRIOT Act. Also during the 107th Congress, the 
Subcommittee opened new investigations into offshore tax 
abuses, border security, and abusive practices related to the 
pricing of gasoline and other fuels.
    In January 2003, at the start of the 108th Congress, after 
the Senate Majority party again changed hands, Senator Collins 
was elevated to Chairman of the full Committee on Governmental 
Affairs, and Republican Senator Norm Coleman of Minnesota 
became Chairman of the Subcommittee. Over the next 2 years, 
Senator Coleman held hearings on topics of national and global 
concern including illegal file sharing on peer-to-peer 
networks, abusive practices in the credit counseling industry, 
the dangers of purchasing pharmaceuticals over the Internet, 
SARS preparedness, border security, and how Saddam Hussein 
abused the United Nations Oil for Food Program. At the request 
of Senator Levin, then Ranking Minority Member, the 
Subcommittee also examined how some U.S. accounting firms, 
banks, investment firms, and tax lawyers were designing, 
promoting, and implementing abusive tax shelters across the 
country; and how some U.S. financial institutions were failing 
to comply with anti-money laundering controls mandated by the 
PATRIOT Act, using as a case history Riggs Bank accounts 
involving Augusto Pinochet, the former President of Chile, and 
Equatorial Guinea, an oil-rich country in Africa.
    During the 109th Congress, Senator Coleman held additional 
hearings on abuses associated with the United Nation's Oil for 
Food Program, and initiated a series of hearings on Federal 
contractors who were paid with taxpayer dollars but failed to 
meet their own tax obligations, resulting in billions of 
dollars in unpaid taxes. He also held hearings on border 
security issues, securing the global supply chain, Federal 
travel abuses, abusive tax refund loans, and unfair energy 
pricing. At Senator Levin's request, the Subcommittee held 
hearings on offshore tax abuses responsible for $100 billion in 
unpaid taxes each year, and on U.S. vulnerabilities caused by 
States forming 2 million companies each year with hidden 
owners.
    During the 110th Congress, in January 2007, after the 
Senate majority shifted, Senator Levin once again became 
Subcommittee Chairman, while Senator Coleman became the Ranking 
Minority Member. Senator Levin focused the Subcommittee on 
investigations into complex financial and tax matters, 
including unfair credit card practices, executive stock option 
abuses, excessive speculation in the natural gas and crude oil 
markets, and offshore tax abuses involving tax haven banks and 
non-U.S. persons dodging payment of U.S. taxes on U.S. stock 
dividends. The Subcommittee's work contributed to enactment of 
two landmark bills, the Credit Card Accountability 
Responsibility and Disclosure Act (Credit CARD Act) which 
reformed credit card practices, and the Foreign Account Tax 
Compliance Act (FATCA) which tackled the problem of hidden 
offshore bank accounts used by U.S. persons to dodge U.S. 
taxes. At the request of Senator Coleman, the Subcommittee also 
conducted bipartisan investigations into Medicare and Medicaid 
health care providers who cheat on their taxes, fraudulent 
Medicare claims involving deceased doctors or inappropriate 
diagnosis codes, U.S. dirty bomb vulnerabilities, Federal 
payroll tax abuses, abusive practices involving transit 
benefits, and problems involving the United Nations Development 
Program.
    During the 111th Congress, Senator Levin continued as 
Chairman of the Subcommittee, while Senator Tom Coburn joined 
the Subcommittee as its Ranking Minority Member. During the 
111th Congress, the Subcommittee dedicated much of its 
resources to a bipartisan investigation into key causes of the 
2008 financial crisis, looking in particular at the role of 
high risk home loans, regulatory failures, inflated credit 
ratings, and high-risk, conflicts-ridden financial products 
designed and sold by investment banks. The Subcommittee held 
four hearings and released thousands of documents. The 
Subcommittee's work contributed to passage of another landmark 
financial reform bill, the Dodd-Frank Wall Street Reform and 
Consumer Protection Act of 2010. In addition, the Subcommittee 
held hearings on excessive speculation in the wheat market, tax 
haven banks that helped U.S. clients evade U.S. taxes, how to 
keep foreign corruption out of the United States, and social 
security disability fraud.
    During the 112th Congress, Senator Levin and Senator Coburn 
continued in their respective roles as Chairman and Ranking 
Minority Member of the Subcommittee. In a series of bipartisan 
investigations, the Subcommittee examined how a global banking 
giant, HSBC, exposed the U.S. financial system to an array of 
money laundering, drug trafficking, and terrorist financing 
risks due to poor anti-money laundering controls; how two U.S. 
multinational corporations engaged in offshore tax abuses, 
including how Microsoft shifted profits offshore to dodge U.S. 
taxes, and Hewlett Packard secretly brought offshore funds back 
home without paying taxes by utilizing abusive short term loan 
schemes; and how excessive commodity speculation by mutual 
funds and others were taking place without Dodd-Frank 
safeguards such as position limits being put into effect. At 
the request of Senator Coburn, the Subcommittee also conducted 
bipartisan investigations into problems with Social Security 
disability determinations that, due to poor procedures, 
perfunctory hearings, and poor quality decisions, resulted in 
over 1 in 5 disability cases containing errors or inadequate 
justifications; how DHS, State, and local intelligence fusion 
centers failed to yield significant, useful information to 
support Federal counterterrorism efforts; and how certain 
Federal contractors that received taxpayer dollars through 
stimulus funding nevertheless failed to pay their Federal 
taxes.

          II. Subcommittee Hearings During the 112th Congress


A. Stimulus Contractors Who Cheat on Their Taxes: What Happened? (May 
        24, 2011)

    The Subcommittee's first hearing in the 112th Congress, 
held at the request of Senator Coburn, focused on a report by 
the Government Accountability Office (GAO) entitled, 
``Thousands of Recovery Act Contract and Grant Recipients Owe 
Hundreds of Millions in Federal Taxes.'' The report was the 
latest in a series of GAO reports stretching back to 2004, each 
prepared at the request of the Subcommittee, which collectively 
exposed tens of thousands of Federal contractors and service 
providers that had failed to pay their taxes, even while being 
paid with taxpayer dollars. Those prior GAO reports focused on 
tax-delinquent defense contractors, General Service 
Administration contractors, and Medicare and Medicaid health 
care service providers, among others, and examined ways to 
better identify contractors with outstanding tax debt and to 
recover a portion of their unpaid taxes through imposing levies 
on their contract payments under the Federal Payment Levy 
Program.
    On May 24, 2011, the Subcommittee held its hearing focusing 
on the latest GAO report and took testimony from two witnesses: 
Gregory D. Kutz, Director of Forensic Audits and Investigative 
Service at GAO, and Daniel L. Gordon, Administrator of the 
Office of Federal Procurement Policy (OFPP) at the U.S. Office 
of Management and Budget.
    GAO testified that the American Recovery and Reinvestment 
Act (ARRA), enacted on February 17, 2009, appropriated $275 
billion to be distributed for Federal contracts, grants, and 
loans, and, as of March 25, 2011, $191 billion of that $275 
billion had been paid out. GAO also testified that, while the 
vast majority--well over 90 percent--of the contractors that 
received stimulus payments under ARRA were in compliance with 
Federal requirements and had paid their taxes, a small portion, 
about 5 percent, had taken taxpayer dollars, while failing to 
meet their tax obligations. According to GAO, that 5 percent 
translated into about 3,700 ARRA contractors and grant 
recipients out of a total of about 63,000, and resulted in 
total unpaid Federal taxes exceeding $750 million.
    GAO also examined 15 of the ARRA recipients in more detail. 
GAO testified that those 15 were collectively responsible for 
$40 million in unpaid taxes and had engaged in abusive or 
potentially criminal activities, including failing to remit 
payroll taxes that had been taken out of employee paychecks but 
never sent to the IRS. Failing to remit payroll taxes is both a 
civil and criminal violation of law. In one instance, GAO 
identified a security company that had received $100,000 in 
Federal funds, yet owed over $9 million in primarily payroll 
taxes from 5 years earlier that the company had never forwarded 
to the IRS. The company had also been cited by the Department 
of Labor for violating Federal labor laws. In another instance, 
GAO identified a social services company that owed over $2 
million in taxes, yet received more than $1 million in Federal 
funds. That company had defaulted on several installment 
agreements with the IRS which finally imposed a penalty on one 
of its executives. GAO found that the executive had numerous 
transactions with casinos totaling hundreds of thousands of 
dollars a year, indicating he had substantial funds to reduce 
the company's tax debt, yet had failed to do so. GAO indicated 
that the IRS had taken collection or enforcement action against 
all 15 recipients.
    GAO also found that, while some of the ARRA recipients were 
subjected to the tax levy program, about $315 million of the 
tax debt was not, because the ARRA funds had not been paid 
directly by the Federal Government to the tax delinquent. 
Instead, in those cases, the Federal Government had paid the 
funds to a State, prime contractor, or grant recipient which, 
in turn, had made payments to the ultimate recipients. The 
businesses that received their money from a State, prime 
contractor, or grant recipient were never screened by the 
Federal tax levy program and so escaped having any portion of 
their funds withheld for payment of their tax debt. The hearing 
highlighted that gap in the tax levy program.
    OFPP testified about the progress that had taken place in 
the tax levy program to increase the number of Federal payments 
screened for unpaid taxes, including completion of measures to 
screen all payments to Medicare health care service providers 
beginning in 2011. OFPP also discussed policy steps that had 
been taken to deny Federal contract awards to contractors and 
subcontractors with serious tax delinquencies. Those steps 
included establishing a policy against awarding Federal 
contracts to tax delinquents, and amending the Federal 
Acquisition Regulation (FAR) to require businesses bidding on 
Federal contracts to certify in writing if they have a tax debt 
of $3,000 or more, so that Federal agencies would know about 
their tax debt prior to awarding a contract. The FAR also made 
nonpayment of tax grounds for debarring a business from bidding 
on any Federal contract. Still another step was conducting an 
evaluation of whether Federal contracting officers and 
debarment officials were fully utilizing tax debt information 
and encouraging them to debar contractors with flagrant 
disregard for their tax obligations.

B. Excessive Speculation and Compliance with the Dodd-Frank Act 
        (November 3, 2011)

    The Subcommittee's second hearing focused on speculation in 
the commodities markets and implementation of provisions in the 
Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act) to impose position limits on speculators 
trading commodity futures, options, and swap contracts. It was 
the latest in a series of Subcommittee hearings, beginning in 
2001, focusing attention on how excessive speculation affects 
commodity prices, including in the crude oil, natural gas, and 
wheat markets, and what actions have been or should be taken by 
the Commodity Futures Trading Commission (CFTC) and the 
exchanges to detect, prevent, and punish trading abuses.
    Commodity markets are designed, not to attract investors, 
but to enable producers and users of physical commodities to 
arrive at market-driven prices and hedge their price risks over 
time. Speculators who, by definition, do not intend to use or 
deliver the commodities they trade, seek instead to profit from 
the price changes. The key problem examined by the Subcommittee 
has been an explosion of speculators over the past decade who, 
instead of facilitating commodity trading, have come to 
dominate U.S. commodity markets, overriding normal supply and 
demand factors, distorting prices, and increasing price 
volatility. The result has been commodity prices which are more 
reflective of trading by speculators than fundamental forces of 
supply and demand by end users. The hearing examined evidence 
of, not only the increasing role of commodity speculation in 
U.S. markets, but also efforts to apply the new Dodd-Frank 
position limits rule to protect consumers, businesses, and the 
commodity markets themselves from the price distortions, price 
volatility, and hedging failures attributable to excessive 
speculation.
    The hearing presented evidence on primarily three groups of 
speculators, commodity index funds, commodity related exchange 
traded products (ETPs), and commodity related mutual funds. The 
hearing showed how swap dealers were offering investors 
bilateral swaps linked to commodity index values and hedging 
their swap positions by buying the commodity futures on which 
the indexes were based. These practices have led to commodity 
index traders contributing billions of dollars to commodity 
speculation. The hearing also showed how ETPs were marketing 
securities that track the value of designated commodities, but 
trade like stocks on an exchange, enabling investors to profit 
off commodity price changes without actually buying any 
futures. Like swap dealers, many ETP managers were shown to 
support the value or offset the risks of their funds by 
purchasing commodity futures, in 2011 alone pouring over $120 
billion of speculative money into U.S. commodity markets. In 
addition, the hearing showed that, over the past 3 years, the 
mutual fund industry had established at least 40 commodity 
related mutual funds that, by 2011, had accumulated assets of 
over $50 billion. Their sales materials showed that they were 
marketing themselves to average investors as commodity funds 
and engaging in many types of commodity speculation.
    At the November hearing, the first panel of witnesses 
presented testimony from three individuals on the negative 
consequences of increasing commodity speculation in U.S. 
markets. Wallace C. Turbeville, a Derivatives Specialist with 
Better Markets, Inc., explained how swap dealers, hedge funds, 
high frequency traders, and other speculators made commodity 
trades that pushed up energy prices. Paul N. Cicio, President 
of the Industrial Energy Consumers of America, described how 
U.S. manufacturers and other businesses faced rapidly changing 
energy prices that had little relationship to the supply and 
demand factors affecting end users. Tyson T. Slocum, Director 
of the Energy Program at Public Citizen, described how American 
families paid inflated energy prices due to excessive 
speculation, citing a study showing that, in 2011, excessive 
speculation added $600 to the average family's gasoline 
expenditures. The three witnesses also discussed positive and 
negative aspects of the final rule issued by the CFTC during 
the prior month to implement the Dodd-Frank position limit 
requirements.
    The final witness was Gary Gensler, CFTC Chairman. He 
confirmed the growing dominance of speculators in U.S. 
commodity markets, noting, for example, that in 2011, 80 
percent of the outstanding futures contracts for crude oil were 
held by speculators. He also explained that, in an effort to 
address excessive commodity speculation, Congress had enacted 
as part of the Dodd-Frank Act new statutory requirements for 
the CFTC to impose position limits on speculators. Position 
limits prohibit individual traders from holding more than a 
specified number of futures contracts at a specified time, such 
as during the close of the so-called ``spot month'' when a 
futures contract expires, and buyers and sellers have to settle 
up financially or through the physical delivery of commodities. 
Position limits help ensure commodity traders cannot exercise 
undue market power over prices during those times, such as by 
cornering the market. Mr. Gensler observed that the new Dodd-
Frank requirements were intended, not only to protect consumers 
and businesses from excessive speculation and price 
manipulation, but also to prevent U.S. commodity markets from 
losing the confidence of commodity producers and end users in 
the markets' pricing and hedging capabilities. He also 
discussed the CFTC's final rule on position limits and his 
expectation that the rule would be challenged in court by 
commodity speculators.

C. Compliance with Tax Limits on Mutual Fund Commodity Speculation 
        (January 26, 2012)

    The Subcommittee held a followup hearing on commodity 
speculation in January 2012, focusing on the expanding role of 
commodity related mutual funds, a relatively new development in 
U.S. commodity markets. In particular, the Subcommittee hearing 
examined actions taken by the Internal Revenue Service (IRS) in 
issuing over 70 private letter rulings that enabled mutual 
funds to make unlimited indirect investments in commodities 
through offshore shell corporations or financial instruments 
known as commodity-linked notes, despite longstanding statutory 
restrictions on mutual fund investments in commodities.
    By law, mutual funds are supposed to derive 90 percent of 
their income from investments in securities and not more than 
10 percent from alternatives like commodities. That statutory 
requirement in the tax code has, in the past, caused mutual 
funds to spend the lion's share of their money on stocks, 
bonds, and other securities, becoming an engine of investment 
in U.S. capital markets. In addition, due to the statutory 
restriction, mutual funds were not significant participants in 
U.S. commodity markets. But in 2006, the mutual fund industry 
began pressing the IRS to permit it to use complex financial 
transactions that would, in essence, enable mutual funds to get 
around the 90 percent rule and engage in commodity investments 
beyond the 10 percent limit.
    In response to petitions filed by individual mutual funds, 
the IRS issued a series of private letter rulings, from 2006 to 
2010, that explicitly allowed the mutual funds to whom the 
letters were addressed to use either wholly owned offshore 
corporations or commodity linked notes to make unrestricted 
commodity investments, notwithstanding the 10 percent limit. 
The private letter rulings stated that the mutual funds could 
treat the resulting income--not as income from a commodities 
investment--but as income from a ``securities'' investment, 
referring to the stock of the company they had formed or the 
note they had issued to avoid the tax code restrictions.
    The hearing presented evidence that, in response to the 
letter rulings, by 2011, U.S. mutual funds had established at 
least 40 wholly owned controlled foreign corporations (CFCs), 
with accumulated assets of over $50 billion, whose sole 
function was to trade commodities. Those CFCs were organized as 
offshore shell corporations, typically in the Cayman Islands, 
with no offices or employees of their own and with a 
commodities portfolio run by employees located in the mutual 
fund's U.S. offices. One mutual fund disclosed, for example, 
that all of the commodity investment decisions for its offshore 
shell corporation were made by the mutual fund's employees in 
Rockville, Maryland. Another revealed that all commodity 
trading decisions were made by its traders in New York. Still 
another mutual fund stated that its offshore commodity fund had 
no ``Cayman presence,'' describing it as ``smoke and mirrors'' 
to obtain the tax benefit. Sales materials showed that the 
offshore corporations were marketing themselves to average 
investors as commodity funds and participating in many types of 
commodity speculation, directly contributing to increased 
speculation in the markets.
    The January hearing took testimony from two witnesses: IRS 
Commissioner Douglas Shulman and Department of the Treasury 
Acting Assistant Secretary for Tax Policy Emily McMahon. The 
witnesses were asked why the IRS had not barred the mutual 
funds from doing indirectly what they were prohibited from 
doing directly, and whether the private letter rulings were 
undermining IRS efforts to combat sham corporations and 
financially engineered transactions used to circumvent the tax 
code. The witnesses were also advised that the actions of the 
mutual fund industry had unleashed a new flood of speculative 
commodity investments in U.S. markets affecting energy and 
other prices. Both witnesses defended the IRS' actions, but 
also testified that the IRS had recently imposed a moratorium 
on issuing new private letter rulings in this area, while 
reviewing the policy issues. In addition, the Commodity Futures 
Trading Commission (CFTC) indicated that it was considering 
issuing a new rule requiring such offshore shells to register 
with the CFTC as commodity pools.
    The hearing also presented evidence that, in 2010, Congress 
had rejected an attempt by the mutual fund industry to change 
the tax code to explicitly allow mutual funds to make 
unrestricted commodity investments. As introduced in 2009, and 
passed by the House in 2010, the Regulatory Investment Company 
Modernization Act would have changed the law to permit mutual 
funds to utilize income from ``commodities'' under Section 851 
of the tax code. The Senate, however, removed that provision 
from the bill before approving it. Removal of the commodities 
provision was, in fact, the only change made to the House-
passed bill. The Senate-passed bill was returned to the House 
which then enacted the bill into law as amended. The end result 
was that Congress had rejected an attempt to add commodities to 
the list of acceptable income for mutual funds under the 90 
percent rule. When asked about these developments, the IRS and 
Treasury witnesses indicated that they were aware of the 
legislative history, but did not view it as dispositive on the 
issue of whether mutual funds could continue to make indirect 
commodity investments in ways that could be treated as 
securities investments.

D. U.S. Vulnerabilities to Money Laundering, Drugs, And Terrorist 
        Financing: HSBC Case History (July 17, 2012)

    The Subcommittee's next hearing examined money laundering, 
drug trafficking, and terrorist financing vulnerabilities 
created in the United States when a global bank, HSBC, used its 
U.S. affiliate, HSBC Bank USA (HBUS), to provide U.S. dollars 
and access to the U.S. financial system to a worldwide network 
of high risk affiliates, high risk correspondent banks, and 
high risk clients. This hearing was the latest in a series of 
Subcommittee hearings, dating back to 1999, on anti-money 
laundering (AML) deficiencies at U.S. financial institutions.
    The key focus of the hearing was how HSBC had abused its 
U.S. access. HSBC is one of the largest banks in the world, 
with headquarters in London, over 7,200 offices in more than 80 
countries, 300,000 employees, and 2011 profits of nearly $22 
billion. Its U.S. affiliate, HBUS, had more than 470 U.S. 
branches and 4 U.S. million customers, and served as the U.S. 
nexus for the entire HSBC worldwide network. In 2008, for 
example, HBUS processed 600,000 wire transfers per week; in 
2009, two-thirds of the U.S. dollar payments HBUS processed 
came from HSBC affiliates in other countries. One HSBC 
executive told the Subcommittee that a major reason why HSBC 
opened its U.S. bank was to provide its overseas clients with a 
gateway into the U.S. financial system. At the same time, HBUS 
had a history of weak anti-money laundering controls.
    Most international banks want access to U.S. dollars, 
because U.S. dollars are accepted internationally, are the 
leading international trade currency, and hold their value 
better than other currencies. Banks also want access to U.S. 
wire transfer systems which move money across international 
lines quickly and securely. In addition, they want to be able 
to clear U.S. dollar monetary instruments like travelers 
cheques, bank cheques, and money orders. Global banks also want 
the safety, efficiency, and reliability that are the hallmarks 
of U.S. banking.
    When an international bank abuses its U.S. access, it may 
allow affiliates operating in countries with severe money 
laundering, drug trafficking, or terrorist financing threats to 
open up U.S. dollar accounts without establishing safeguards at 
their U.S. affiliate. Some of those affiliates may operate in 
secrecy jurisdictions. Some may allow poorly managed or corrupt 
foreign banks to make use of the affiliate's U.S. dollar 
account. Other affiliates may allow high risk clients to use 
their U.S. accounts without taking adequate anti-money 
laundering steps. The global parent may even allow its 
affiliates to pressure their U.S. counterpart to ease up on 
U.S. anti-money laundering restrictions or look the other way 
in the presence of suspicious activity. The end result is that 
the U.S. affiliate can become a focus of risk for an entire 
network of bank affiliates, including their correspondents and 
clients around the world, and end up aiding and abetting 
transactions that fund terrorists, drug cartels, tax cheats, or 
other wrongdoers.
    In the case of HSBC, the Subcommittee's hearing and an 
accompanying bipartisan staff report identified five key areas 
of concern. The first involved HBUS' providing U.S. dollar 
accounts to high risk HSBC affiliates without performing due 
diligence, including a Mexican affiliate with unreliable AML 
controls. The second involved HSBC's failing to stop deceptive 
conduct by HSBC affiliates to circumvent an HBUS screening 
filter designed to block transactions by terrorists, drug 
kingpins and rogue nations like Iran. The third involved HBUS' 
providing bank accounts to overseas banks with links to 
terrorist financing. The fourth involved HBUS clearing hundreds 
of millions of dollars in bulk U.S. dollar travelers cheques, 
despite suspicious circumstances. The fifth involved HBUS 
offering bearer-share accounts, a high risk account that 
invites wrongdoing by facilitating hidden corporate ownership.
    In addition to those problems, the hearing presented 
evidence that the bank's primary regulator, the Office of the 
Comptroller of the Currency (OCC), was aware of the mounting 
AML problems at HBUS, yet tolerated them for 5 years, without 
taking any formal or informal enforcement action. When the OCC 
finally decided the problems required a regulatory response, it 
lowered HBUS' consumer compliance rating instead of its safety 
and soundness rating. Every other Federal banking agency treats 
AML deficiencies as a matter of safety and soundness; only the 
OCC treated AML deficiencies as if they were a matter of 
consumer protection law.
    At the hearing, the Subcommittee took testimony from four 
panels of witnesses. The first panel consisted of David S. 
Cohen, Under Secretary for Terrorism and Financial Intelligence 
at the U.S. Department of the Treasury; and Leigh H. Winchell, 
Assistant Director of Investigative Programs, U.S. Immigration 
& Customs Enforcement at the Department of Homeland Security. 
Both witnesses explained how U.S. AML safeguards protected the 
country from money laundering, drug trafficking, and terrorist 
financing, among other wrongdoing.
    The second panel of witnesses consisted of officials from 
HSBC and HBUS who were asked about AML deficiencies at the 
bank. They included Stuart A. Levey, HSBC's Chief Legal 
Officer; David Bagley, Head of HSBC Compliance; Paul Thurston, 
Chief Executive of HSBC's Retail Banking and Wealth Management; 
and Irene Dorner, HBUS President and Chief Executive Officer. 
In addition, two former bank officials testified, Michael 
Gallagher, former HBUS Executive Vice President; and 
Christopher Lok, former Head of the bank's Global Banknotes 
division. The HSBC officials admitted and expressed regret for 
the bank's AML deficiencies and described actions taken by the 
bank to strengthen its AML controls. They included increasing 
the HBUS AML staff from about 130 to nearly 1,000 employees; 
closing the accounts of over 325 high risk banks and 25 
embassies; revamping its country and client risk assessment 
methodologies; strengthening its transaction monitoring and 
wire transfer reviews; and establishing AML due diligence and 
information sharing requirements for all HSBC affiliates. HBUS 
also increased its annual compliance budget ninefold to about 
$250 million. In addition, HSBC strengthened its global 
compliance department by giving it hiring and management 
authority over all 3,500 compliance officers worldwide and 
authorizing it to set and enforce global AML and other 
compliance standards, including by ordering the closing of 
accounts. Mr. Bagley, longtime head of HSBC Compliance, after 
expressing regret for the bank's past performance, announced 
his resignation at the hearing.
    The third panel consisted of current and former officials 
from the U.S. Office of Comptroller of the Currency (OCC). They 
included Thomas J. Curry, Comptroller of the Currency; Daniel 
P. Stipano, OCC Deputy Chief Counsel; and Grace E. Dailey, 
former OCC Deputy Comptroller for Large Banks Supervision. The 
OCC officials admitted that the OCC had taken too long to 
confront HSBC about its AML deficiencies and announced actions 
taken to compel the bank to take corrective action. The OCC 
also agreed with the report's recommendations about its own 
failings, and announced that it would revamp its AML oversight 
procedures. Among other changes, the OCC announced that it 
would treat AML deficiencies as a safety and soundness and 
management issue, and would enable examiners to cite banks for 
violating any of the four components of an effective AML 
program, which consist of establishing effective internal 
controls, a capable compliance officer, an independent audit 
function, and AML training. The OCC also announced that it 
would put into place a program to identify banks with AML 
deficiencies that exceeded a specified threshold and take 
appropriate, timely enforcement action.
    The Department of Justice later filed a deferred 
prosecution agreement against HSBC in connection with its AML 
misconduct. In response, among other actions, the bank agreed 
to pay a criminal fine of $1.9 billion.

E. Social Security Disability Programs: Improving the Quality of 
        Benefit Award Decisions (September 13, 2012)

    The Subcommittee's next hearing examined issues related to 
the quality of disability benefit awards, using as a case 
history 300 actual case files of claimants under the Social 
Security Disability Insurance (SSDI) and Supplement Security 
Income (SSI) programs. This bipartisan investigation, 
undertaken at the request of Senator Coburn, resulted in a 
September hearing and the release of a Coburn report.
    The Social Security SSDI and SSI programs provide financial 
support to Americans who, due to a disability, are incapable of 
working at a full-time job. In recent years, the number of 
individuals receiving disability insurance aid has dramatically 
increased. In the 5-years prior to the hearing, SSDI recipients 
increased by 22 percent, from 7.1 million in 2007 to 8.7 
million individuals in April 2012. Over the same period, the 
percentage of the country's population between the ages of 25 
and 64 receiving SSDI benefits rose from 4.5 percent in 2007, 
to a record-high of 5.3 percent in March 2012. The 2008 
financial crisis contributed to the problem when millions of 
workers lost their jobs and employer-sponsored health 
insurance. Without health insurance and the health care it paid 
for, in some instances chronic conditions held in check by 
treatment worsened and became disabling, requiring workers to 
turn to Federal disability insurance. Increased disability 
insurance payments, in turn, increased the stress on the Social 
Security Disability Trust Fund, which some estimates predict 
may be unable to pay full benefits by 2016. In addition to 
solvency problems, the disability programs have experienced 
long application backlogs.
    The Subcommittee investigation focused on the 
decisionmaking process resulting in an award of benefits to 
applicants. To evaluate the award process, the Subcommittee 
reviewed 300 actual electronic case files, with all identifying 
personal information removed. The cases were taken from three 
counties in three States, Virginia, Alabama, and Oklahoma, 
reflecting different levels of per capita enrollment in the 
SSDI and SSI programs. The cases provided a cross-section of 
applicants who were awarded disability benefits at different 
stages of review within the Social Security Administration 
(SSA): at the stage of the initial application, upon 
reconsideration, upon appeal before an administrative law judge 
(ALJ), or upon appeal before the Social Security Appeals 
Council. The review examined only cases in which benefits were 
awarded, and not any cases in which benefits were denied. The 
Coburn report summarized the information obtained, providing 
case-specific information normally unavailable to the public, 
since disability hearings examine individuals' personal medical 
records.
    The report and hearing disclosed evidence of troubling 
practices in many cases on how awards were made. The evidence 
showed, for example, that one judge who decided over 1,500 
disability cases per year took inappropriate shortcuts in his 
opinions, cutting and pasting medical evidence from the case 
file into his opinions without explaining or analyzing what it 
meant, and writing the phrase ``etc., etc., etc.'' rather than 
describing the relevant evidence. Despite being confronted by 
his chief judge in person and by letter, for years he continued 
to produce the same poor quality decisions. In other cases, 
evidence indicated that some judges held perfunctory hearings 
that lasted less than 10 minutes, failed to elicit any 
testimony from the person applying for benefits, and failed to 
examine medical evidence raising questions about whether that 
person was entitled to disability benefits. In still other 
cases, poorly written opinions awarding benefits failed to 
identify the medical evidence showing how the requirements for 
establishing a disability were met, did not acknowledge or 
address evidence that impairments were not disabling or 
evidence that the claimant had been working, and at times even 
misreported medical findings or hearing testimony.
    The report found that the 300 cases contained a large 
number of low quality decisions, a finding consistent with the 
Social Security Administration's own internal research. An SSA 
quality review process whose findings had not previously been 
made widely available found that, in 2011, 22 percent or over 1 
in 5 disability cases decided by an SSA Administrative Law 
Judge contained errors or were inadequately justified. Those 
errors went in both directions, resulting in either the award 
or denial of benefits. Those errors and inadequacies did not 
mean that the 1 in 5 disability decisions were all wrongly 
decided; they meant that the opinions being produced in those 
cases did not contain the type of analysis needed to be 
confident that the cases were correctly decided and disability 
benefits went to the truly disabled.
    The hearing took testimony from two panels of witness. The 
first panel consisted of two senior SSA administrative law 
judges, based in Washington, who oversaw aspects of the 
disability award program. Judge Patricia A. Jonas was Executive 
Director of SSA Appellate Operations, and Deputy Chair of the 
Appeals Council in the SSA Office of Disability Adjudication 
and Review (ODAR). Judge Debra Bice was Chief Administrative 
Law Judge in the SSA ODAR. Both witnesses testified about the 
problems they had observed in the disability award process as 
well as efforts undertaken to address them. Judge Jonas 
discussed the agency's 2009 creation of a quality review 
process which, for the first time, developed criteria and 
procedures for reviewing ALJ disability decisions, identified 
statistically significant problem areas nationwide, and 
supported new policy guidance to increase decisionmaking 
efficiency and accuracy. Judge Bice described SSA's counseling 
and disciplinary process for judges that decide too few cases 
or issue poor quality decisions.
    The second panel consisted of senior Administrative Law 
Judges from the counties reviewed during the course of the 
Subcommittee investigation. Judge Douglas S. Stults was a 
Hearing Office Chief Administrative Law Judge for the SSA ODAR 
in Oklahoma City. Judge Thomas W. Erwin was the Hearing Office 
Chief Administrative Law Judge for the SSA ODAR in Roanoke, 
Virginia. Judge Ollie L. Garmon, III, was the Regional Chief 
Administrative Law Judge for Region IV of the SSA ODAR, based 
in Atlanta, Georgia. All three admitted that poor quality 
decisionmaking was a problem and described their efforts to 
improve the decisionmaking process, while protecting the 
independence of the ALJs under their supervision.

F. Offshore Profit Shifting and the U.S. Tax Code--Part 1 (Microsoft & 
        Hewlett-Packard) (September 20, 2012)

    The Subcommittee's final hearing during the 112th Congress 
presented two case studies, involving Microsoft Corporation and 
Hewlett-Packard Corporation, showing how some profitable U.S. 
multinationals exploit U.S. tax and accounting loopholes to 
avoid the payment of U.S. taxes. The Microsoft case history 
focused on the shifting of profits offshore to controlled 
foreign corporations to avoid U.S. taxes; the Hewlett-Packard 
case history focused on the use of an abusive short term loan 
scheme to return offshore funds to the United States without 
paying any U.S. tax.
    The hearing was the latest in a decade of Subcommittee 
investigations into how multinational corporations and wealthy 
individuals use offshore tax schemes to dodge U.S. taxes, 
leaving other taxpayers to make up the difference. According to 
the Congressional Research Service, the share of corporate 
income taxes in the United States has fallen from a high of 32 
percent of Federal tax revenue in 1952, to 9 percent in 2009. 
Meanwhile, payroll taxes--which almost every working American 
must pay--have increased from 10 percent of Federal revenue to 
40 percent.
    The hearing presented evidence that Microsoft had developed 
software products in the United States using U.S. research and 
development tax credits, and then used aggressive transfer 
pricing transactions to shift the rights to market its 
intellectual property to controlled foreign corporations in 
Puerto Rico, Ireland, and Singapore, each of which was a low or 
no tax jurisdiction, thereby shielding the bulk of its 
worldwide sales profits from U.S. taxation. The hearing also 
presented evidence that from 2009 to 2011, by transferring 
certain rights to its intellectual property to a Puerto Rican 
subsidiary, Microsoft shifted nearly $21 billion offshore, or 
almost half of its U.S. retail sales net revenue, dodging up to 
$4.5 billion in taxes on goods sold in the United States. In 
2011 alone, the evidence indicated that Microsoft avoided 
paying U.S. tax on 47 percent of its U.S. sales revenue. 
Evidence indicated that Microsoft excluded an additional $2 
billion in U.S. taxes on passive income attributed to its 
offshore subsidiaries, using the so-called ``check-the-box'' 
and ``look-through'' rules to circumvent Subpart F taxation of 
passive foreign profits.
    In addition to showing how some U.S. taxable income was 
shifted offshore, the hearing showed how some offshore revenue 
was later returned to the United States untaxed. The evidence 
examined Hewlett-Packard's use of a tax loophole in Section 956 
of the tax code to avoid paying U.S. taxes on billions of 
dollars in offshore income that it had returned to the United 
States to run its U.S. operations. Hewlett-Packard obtained the 
offshore cash by directing two of its controlled foreign 
corporations in Belgium and the Cayman Islands to provide 
serial, alternating loans to its U.S. operations. From March 
2008 to September 2012, Hewlett-Packard used those intercompany 
loans to provide an average of about $3.6 billion per day for 
use in its U.S. operations, claiming they were tax-free, short 
term loans of less than 30 days duration under Section 956. The 
evidence indicated that its auditor, Ernst & Young, knew that 
the company was using a structured loan program to obtain 
billions of dollars in continual offshore loans each year, yet 
supported Hewlett-Packard's view that the offshore funds had 
not been repatriated to the United States, but qualified as 
occasional short-term loans exempt from U.S. taxation.
    An accompanying, bipartisan memorandum found that 
weaknesses in the U.S. tax code's transfer pricing regulations, 
Subpart F, and Section 956, and in accounting rules issued by 
the Financial Accounting Standards Board regarding indefinitely 
invested foreign earnings, had encouraged and facilitated the 
multinationals' tax avoidance.
    The hearing heard from three panels of witnesses. The first 
panel consisted of three international tax and accounting 
experts. Stephen E. Shay, former head of international tax 
policy at the U.S. Department of the Treasury, was a professor 
at Harvard Law School. Reuven S. Avi-Yonah was the Irwin I. 
Cohn Professor of Law at the University of Michigan School of 
Law. Jack T. Ciesielski was a Certified Public Accountant and 
President of R.G. Associates, Inc., of Baltimore, Maryland. All 
three criticized the abusive conduct and tax and accounting 
deficiencies exposed by the two case histories.
    The second panel consisted of representatives from 
Microsoft, Microsoft's auditor Ernst & Young, and Hewlett 
Packard. Microsoft was represented by Bill Sample, Corporate 
Vice President for Worldwide Tax, who defended Microsoft's tax 
strategies as permitted by law. Hewlett-Packard was represented 
by Lester Ezrati, Senior Vice President and Tax Director, who 
was accompanied by John N. McMullen, Senior Vice President and 
Treasurer. Hewlett-Packard's auditor, Ernst & Young, was 
represented by Beth Carr, a partner in the International Tax 
Services division and senior manager of the Hewlett-Packard 
account. They testified that the Hewlett-Packard offshore loan 
arrangements were permitted by law.
    The third and final panel consisted of representatives from 
the IRS and Financial Accounting Standards Board (FASB). 
William J. Wilkins, IRS Chief Counsel, was accompanied by 
Michael Danilack, IRS Deputy Commissioner (International) in 
the Large Business and International Division. Susan M. Cosper 
was FASB's Technical Director. The witnesses testified about 
the tax and accounting measures at issue in the case histories, 
while declining to express any opinion on the specifics of the 
two companies.

         III. Legislative Activities During the 112th Congress

    The Permanent Subcommittee on Investigations does not have 
legislative authority, but because its investigations play an 
important role in bringing issues to the attention of Congress 
and the public, the Subcommittee's work frequently contributes 
to the development of legislative initiatives. The 
Subcommittee's activity during the 112th Congress was no 
exception, with Subcommittee hearings and Members playing 
prominent roles in the development of several legislative 
initiatives.

A. Stop Tax Haven Abuse Act (S. 1346)

    On July 12, 2011, to address multiple tax abuses examined 
in Subcommittee hearings, Senators Levin, Conrad, Whitehouse, 
Shaheen, Bill Nelson, Sanders, Durbin, and Begich introduced 
the Stop Tax Haven Abuse Act. This legislation was based upon 8 
years of Subcommittee investigations into offshore tax havens, 
abusive tax shelters, and the professionals who design, market, 
and implement tax dodges. The Subcommittee has estimated that 
the loss to the Treasury from offshore tax abuses alone is at 
least $100 billion per year.
    Among other measures, the bill would authorize Treasury to 
take special measures against foreign jurisdictions and 
financial institutions that impede U.S. tax enforcement; 
establish rebuttable presumptions in tax enforcement cases that 
offshore companies and trusts are controlled by the U.S. 
persons who send or receive assets from them; and strengthen 
penalties on tax shelter promoters. It would also prevent 
companies that are managed and controlled from the United 
States from claiming foreign status for tax purposes; and close 
a tax loophole allowing credit default swap payments to be 
treated as non-U.S. source income when sent from the United 
States to persons offshore. Other provisions would require 
multinational corporations to report the taxes they pay on a 
country-by-country basis in public SEC filings; and treat any 
deposits they make through a controlled foreign corporation to 
a U.S. financial account as taxable, repatriated income. In 
addition, the bill would require U.S. financial institutions to 
report certain offshore activities to the IRS; and require U.S. 
hedge funds and company formation agents to establish anti-
money laundering programs. A companion bill containing the same 
provisions was introduced in the House (H.R. 2669). The Senate 
bill was referred to the Finance Committee which took no 
further action.
    One of the bill provisions, authorizing special measures to 
combat foreign jurisdictions or institutions that significantly 
impede U.S. tax enforcement, was later included in a Senate 
transportation bill to help provide funding for that 
legislation. It passed the Senate, but was not adopted in the 
House or enacted into law.

B. Ending Excessive Corporate Deductions for Stock Options Act (S. 
        1375)

    On July 7, 2011, to close a tax loophole examined in a 
Subcommittee hearing showing that, each year, corporations 
claim tens of billions of dollars in stock option tax 
deductions in excess of the stock option expenses shown on 
their books, Senators Levin, Sherrod Brown, McCaskill, and 
Whitehouse introduced S. 1375, the Ending Excessive Corporate 
Deductions for Stock Options Act.
    IRS data has shown that, each year from 2005 to 2009, 
corporations as a whole took U.S. tax deductions for stock 
options that were billions of dollars greater than the expenses 
shown on their financial statements. The IRS data also showed 
that a relatively small number of corporations took the 
majority of those excess deductions: 250 out of the millions of 
corporations that filed corporate tax returns each year. A 
blatant example of the problem came to light in connection with 
Facebook's initial stock offering in May 2012, when it 
disclosed in its public registration statement that it planned 
to claim a $16 billion stock option tax deduction, which was 
enough to eliminate its taxable income for years, while at the 
same time showing a fraction of that amount on its books as an 
expense and promoting the company to investors as highly 
profitable.
    To put an end to such excessive stock option tax 
deductions, the bill would amend the tax code to require that 
corporate tax deductions for stock option compensation not 
exceed the stock option expenses actually shown on the 
corporate books. It would also allow corporations to deduct 
stock option compensation in the same year the compensation is 
recorded on the company books, without waiting for the options 
to be exercised; and ensure research tax credits use the same 
stock option deduction. In addition, the bill would subject 
stock option pay for top executives to the existing $1 million 
cap on the tax deductions that publicly traded corporations can 
claim for executive pay, in order to eliminate taxpayer 
subsidies of outsized executive compensation. The bill was 
referred to the Finance Committee which took no further action.

C. Tax Lien Simplification Act (S. 1390)

    On July 20, 2011, Senators Levin and Begich introduced S. 
1390, the Tax Lien Simplification Act, to modernize the Federal 
tax lien system by replacing the current local, paper-based 
filing system with an electronic Federal registry system on the 
Internet that would be available to the public at no cost. The 
IRS has estimated that, over 10 years, the new system would 
save taxpayers $150 million.
    Tax liens are a principal tool used by the IRS to collect 
funds from tax delinquents. Currently, public notices of tax 
liens are filed on paper in one or more of 4,100 local 
recording offices, each with its own formatting and legal 
styling requirements. The IRS maintains a service center 
dedicated to monitoring local lien requirements; preparing 
liens in the proper format; requesting local officials to file 
the liens; paying lien filing fees; tracing and replacing lost 
filings; correcting errors; and, once resolved, releasing the 
liens. To streamline the current system, among other 
provisions, the bill would establish an electronic registry in 
which all Federal tax liens would use a common format, operate 
under common security and privacy requirements, and permit 
direct filing by IRS personnel. When resolved, the IRS would 
have 20 days instead of the current 30 days to release a tax 
lien. The public would be able to search the online registry 
for free. The bill was referred to the Finance Committee which 
took no further action.

D. Incorporation Transparency and Law Enforcement Assistance Act (S. 
        1483)

    On August 2, 2011, Senators Levin, Grassley, Feinstein and 
Harkin introduced S. 1483, the Incorporation Transparency and 
Law Enforcement Assistance Act, to protect the United States 
from U.S. corporations with hidden owners being misused to 
commit crimes, including terrorism, drug trafficking, money 
laundering, tax evasion, financial fraud, and corruption. The 
bill is based upon past Subcommittee investigations which found 
that the 50 States establish nearly two million U.S. companies 
each year without knowing who is behind them, that the lack of 
ownership information requirements invite wrongdoers to 
incorporate in the United States, and that same lack of 
ownership information impedes U.S. law enforcement efforts.
    Among other provisions, the bill would require the States 
to obtain beneficial ownership information for the corporations 
or limited liability companies formed within their borders; 
require States to provide that information to law enforcement 
in response to a subpoena or summons; and impose civil and 
criminal penalties for persons who knowingly submit false 
ownership information. The bill would exempt all publicly 
traded and regulated corporations, as well as certain other 
corporations whose ownership information was already available. 
The bill was referred to the Committee on Homeland Security and 
Governmental Affairs which took no further action.

E. Closing the Derivatives Blended Rate Loophole Act (S. 2033)

    On January 23, 2012, Senator Levin introduced S. 2033, the 
Closing the Derivatives Blended Rate Loophole Act, to close a 
loophole that effectively allows taxpayers who make short-term 
investments in certain derivatives to treat much of their 
earnings as long-term capital gains. Closing this loophole 
would eliminate a tax code provision that favors short-term 
speculation over long-term investment, and provides an 
unjustified tax break to a small group of financial 
speculators. The bill is based upon past Subcommittee 
investigations into derivatives, financial speculation, and the 
tax code.
    Under current law, taxpayers generally can claim the lower 
capital gains tax rate on earnings only if those earnings come 
from the sale of assets held for more than a year. The lower 
tax rate is restricted to those assets in order to encourage 
long-term investment in the U.S. economy. But under Section 
1256, traders in covered derivatives can claim 60 percent of 
their income as long-term capital gains, no matter how briefly 
they have held the asset. Eliminating the resulting blended tax 
rate for earnings from covered derivatives has been estimated 
to produce, over 10 years, a tax savings of $3 billion. The 
bill was referred to the Finance Committee which took no 
further action.

F. Cut Unjustified Tax (CUT) Loopholes Act (S. 2075)

    On February 17, 2012, Senators Levin, Conrad, Begich, and 
Whitehouse introduced S. 2075, the Cut Unjustified Tax 
Loopholes or CUT Loopholes Act, to close a series of tax 
loopholes, not only to increase the fairness of the tax code, 
but also to produce significant revenues for deficit reduction.
    The bill combined in a single package two of the tax reform 
bills discussed earlier, the Stop Tax Haven Abuse Act and the 
Ending Excessive Corporate Deductions for Stock Options Act. In 
addition, it included provisions to restrict corporations from 
deducting expenses for moving operations offshore and put an 
end to certain abuses involving foreign tax credits, 
intellectual property moved offshore, and the shifting of 
corporate profits to tax havens. Closing the loopholes was 
estimated to produce, over 10 years, at least $155 billion in 
deficit reduction. The bill was referred to the Finance 
Committee which took no further action.

                    IV. Reports, Prints, and Studies

    In connection with its investigations, the Subcommittee 
often issues lengthy and detailed reports. During the 112th 
Congress, the Subcommittee released five such reports, listed 
below, some of which have already been partly described in 
connection with Subcommittee hearings.

A. Wall Street and the Financial Crisis: Anatomy of a Financial 
        Collapse, April 13, 2011 (Report prepared by the Majority and 
        Minority staffs of the Permanent Subcommittee on Investigations 
        and released in connection with four Subcommittee hearings held 
        in 2010)

    In November 2008, the Subcommittee initiated a bipartisan 
investigation into key causes of the 2008 financial crisis 
which contributed to the loss of millions of jobs and homes, 
destroyed savings, shuttered good businesses, and produced the 
worst U.S. economic decline since the Great Depression. In 
April 2010, the Subcommittee held four hearings focusing on how 
high risk mortgage lending, regulatory failures, inflated 
credit ratings, and high risk, conflicts-ridden financial 
products designed and sold by investment banks helped cause the 
financial crisis, using case histories to illustrate the 
problems. One year later, in April 2011, the Subcommittee 
released a 750-page bipartisan staff report, the longest in its 
history, further detailing its investigation, releasing 
additional documents, and providing specific factual findings 
and policy recommendations. It was the only bipartisan report 
produced by Congress on the financial crisis.
    High Risk Home Loans. The first section of the Levin-Coburn 
report focused on high risk home loans and their inclusion in 
mortgage backed securities, using as a case history the lending 
and securitization practices of Washington Mutual Bank. 
Washington Mutual Bank, the largest U.S. thrift with more than 
$300 billion in assets, issued billions of dollars in high risk 
mortgage loans, packaged them into securities that later 
experienced a high rate of delinquency or loss, and then 
collapsed in the largest bank failure in U.S. history. 
Washington Mutual securitized over $77 billion in subprime home 
loans as well as billions of dollars of other high risk home 
loans, including interest-only, home equity, and ``Option 
Adjustable Rate Mortgages (ARM)'' loans. Many of those loans 
used initial low ``teaser'' interest rates that, unless the 
loan was refinanced, were later replaced with much steeper 
rates and higher monthly payments. The Option ARM loans also 
allowed borrowers, for a specified period, to pay less than the 
interest they owed each month, resulting in a larger rather 
than reduced mortgage debt, a feature called negative 
amortization. When home prices stopped increasing, many 
borrowers were unable to refinance their loans, could not 
afford the higher monthly payments that took effect, defaulted 
on their mortgages, and lost their homes while the related 
mortgage securities plummeted in value.
    The report presented evidence showing that the reason that 
Washington Mutual executives embarked upon a high risk lending 
strategy was because they had projected that high risk home 
loans, which generally charged higher interest rates and 
produced higher sales prices on Wall Street, would be more 
profitable for the bank than lower risk home loans. The report 
also presented evidence showing that Washington Mutual and its 
affiliate, Long Beach Mortgage Company, used shoddy lending 
practices riddled with credit, compliance, and operational 
deficiencies. Those practices included issuing loans with 
erroneous or fraudulent borrower information, ``stated income 
loans'' in which borrowers stated their income with no 
supporting documentation, loans with inaccurate appraisals, and 
loans in which the borrowed amount equaled 90 percent or more 
of the value of the home. The report also showed that 
Washington Mutual and Long Beach steered many borrowers into 
loans they could not afford when higher monthly payments built 
into those loans took effect. Those high-risk loans were 
nevertheless packaged into mortgage-backed securities sold to 
investors worldwide, saturating financial markets with 
mortgage-backed securities that later incurred high rates of 
delinquency and loss.
    In addition, the report showed that, at times, Washington 
Mutual securitized loans that it had identified as likely to go 
delinquent, without disclosing its analysis to investors who 
bought the securities, and securitized loans tainted by 
fraudulent information, without notifying purchasers of the 
fraud that had been discovered. The report also showed that 
Washington Mutual's compensation system rewarded loan officers 
and loan processors for speed and volume in issuing loans, 
rather than for issuing high quality loans that were likely to 
be repaid. The compensation system also provided extra 
compensation to loan officers who overcharged borrowers or 
added stiff prepayment penalties, and awarded bank executives 
millions of dollars even when their high risk lending strategy 
placed the bank in financial jeopardy.
    The report offered a number of recommendations to prevent 
similar problems with high risk home loans and mortgage backed 
securities in the future. Those recommendations included 
ensuring future residential mortgages have a low risk of 
delinquency or default; requiring financial institutions 
issuing mortgage related securities to retain not less than 5 
percent of the credit risk with no hedging offset for a 
reasonable but limited period of time; safeguarding taxpayer 
dollars by requiring banks with high risk structured finance 
products or negatively amortizing loans to meet conservative 
loss reserve, liquidity, and capital requirements; and using 
the required bank activities study under Section 620 of the 
Dodd-Frank Act to identify high risk structured finance 
products and impose a reasonable limit on the amount of such 
products that can be included in a bank's investment portfolio.
    Regulatory Failures. The second section of the report 
focused on the regulatory failures of Federal bank regulators 
charged with ensuring the safety and soundness of the U.S. 
banking system. The case study examined regulatory oversight of 
Washington Mutual, focusing on the Office of Thrift Supervision 
(OTS), which was the bank's the primary regulator, and the 
Federal Deposit Insurance Corporation (FDIC), which was its 
backup regulator.
    The report examined actions taken by OTS and the FDIC, from 
2004 to 2008, to ensure the safety and soundness of Washington 
Mutual, the sixth largest bank in the United States and OTS' 
largest institution. The report found that feeble oversight by 
the regulators, combined with weak regulatory standards and 
agency infighting, enabled Washington Mutual Bank to engage in 
high-risk and shoddy lending practices and sell poor quality 
and sometimes fraudulent mortgages that contributed to both the 
bank's demise and the financial crisis.
    The report presented evidence that over a 5-year period, 
from 2003 to 2008, OTS identified over 500 serious deficiencies 
in Washington Mutual's lending practices, risk management, and 
asset quality, but failed to force adequate corrective action 
to prevent the bank's failure. The report showed that OTS was 
aware of, yet tolerated, Washington Mutual and its affiliate 
Long Beach Mortgage Company's engaging in year after year of 
shoddy lending and securitization practices, including the 
origination and sale of loans and mortgage-backed securities 
with notoriously high rates of delinquency and loss.
    The report demonstrated that OTS allowed Washington Mutual 
to originate hundreds of billions of dollars in high risk 
loans, knowing that the bank used unsafe and unsound teaser 
rates, qualified borrowers using those teaser rates rather than 
the higher interest rates that would later take effect, 
permitted borrowers to make minimum payments resulting in 
negatively amortizing loans, relied on rising house prices and 
refinancing to avoid payment shock and loan defaults, had 
unsafe concentrations of loans in particular States, and had no 
realistic data to calculate loan losses in markets with flat or 
declining house prices. In addition, the report showed that, 
due in part to the short-term profits obtained by the bank from 
its lending activities, OTS repeatedly failed to take 
enforcement action to stop Washington Mutual's unsafe and 
unsound practices or strengthen its portfolio of high-risk, 
poor-quality loans and securities.
    In addition, the report documented agency infighting in 
which OTS actively impeded FDIC oversight of Washington Mutual 
by blocking the FDIC's access to bank data, refusing to allow 
it to participate in bank examinations, and rejecting requests 
to review bank loan files. OTS also rejected FDIC 
recommendations for stronger enforcement action.
    The report showed that Federal bank regulators were hobbled 
in their efforts to end unsafe and unsound mortgage practices 
at U.S. banks by weak regulatory standards, use of guidance 
instead of enforceable regulations to limit bank practices, and 
the failure to set clear deadlines for bank compliance. The 
case history exposed an ineffective regulatory culture at OTS 
in which bank examiners were demoralized by their inability to 
stop unsafe practices, their supervisors' reluctance to take 
formal enforcement actions even after years of recorded bank 
deficiencies, and an agency culture that treated banks as 
``constituents'' rather than regulated entities. In addition, 
the case history showed how OTS and the FDIC allowed Washington 
Mutual to reduce its risks by selling its high risk assets, 
without concern that those assets might saturate the financial 
system, contribute to investor losses, and undermine investor 
confidence in the U.S. mortgage market.
    The report offered a number of recommendations to prevent 
similar regulatory failures in the future. Those 
recommendations included dismantling OTS as a bank regulator; 
urging Federal bank regulators to review major financial 
institutions to identify those with ongoing, serious lending 
deficiencies; and eliminating any regulatory policy providing 
deference to bank management, inflated CAMELS ratings, or use 
of short term profits to excuse high risk activities. The 
report also recommended strengthening the CAMELS ratings 
system, and undertaking a study of the U.S. financial system to 
identify high risk lending practices at financial institutions 
and evaluate any systemic impacts.
    Inflated Credit Ratings. The third section of the report 
focused on the credit rating agencies that assigned 
creditworthiness ratings to residential mortgage backed 
securities (RMBS) and collateral debt obligations (CDOs) from 
2004 to 2008. The report used as case histories the two largest 
U.S. credit rating agencies, Moody's and Standard & Poor's 
(S&P), which together rated tens of thousands of RMBS and CDO 
securities in the years prior to the financial crisis. Those 
ratings proved to be both inaccurate and inflated, as evidenced 
by studies showing that over 90 percent of the RMBS securities 
given AAA ratings in 2006 and 2007 were later downgraded to 
junk status, subjecting investors to unusually high rates of 
delinquency and loss.
    The report showed that Moody's and S&P issued AAA and other 
investment grade credit ratings for the vast majority of RMBS 
and CDO securities they rated, deeming them safe investments 
even though many relied on high risk home loans. In late 2006, 
those high risk mortgages began incurring delinquencies and 
defaults at an alarming rate, leading to losses in the RMBS and 
CDO securities referencing those mortgages. Despite those and 
other signs of a deteriorating mortgage market, Moody's and S&P 
continued for another 6 months in 2007, to issue investment 
grade ratings for numerous RMBS and CDO securities.
    The report presented evidence that some investment bankers 
had pressured the credit rating agencies to provide favorable 
ratings for the RMBS and CDO products they planned to sell, and 
that Moody's and S&P--which were paid by those firms--
repeatedly gave into that pressure. The report also documented 
how competitive pressures, including the drive for market share 
and the need to accommodate investment bankers bringing in 
business, caused Moody's and S&P to weaken their standards for 
issuing favorable ratings. In addition, the report showed that 
Moody's and S&P made record profits from rating structured 
finance products in the years running up to the financial 
crisis.
    The report demonstrated that Moody's and S&P were aware of 
the increasing risks associated with the subprime, interest-
only, and adjustable rate mortgages being issued by lenders, 
including their increasing use of stated income loans that did 
not document a borrower's ability to repay debt, loans 
containing fraudulent borrower or appraisal information, and 
loans with initial teaser rates that relied on the borrower 
refinancing the debt before higher interest rates took effect. 
The report also showed that Moody's and S&P were aware of 
housing prices leveling out, delinquency rates climbing, and 
related MBS and CDO securities incurring increased losses, 
despite their AAA ratings. One S&P analyst told a superior in 
early 2007, that he did not expect the ratings to ``hold'' 
through the year.
    The report also presented evidence that, in July 2007, 
within days of each other, Moody's and S&P suddenly announced 
mass downgrades of hundreds of RMBS and CDO securities. Those 
mass downgrades shocked the financial markets, triggered sales 
of mortgage related securities that had lost their investment 
grade status, and contributed to the collapse of first the RMBS 
and then the CDO secondary markets. Financial firms and 
investors were left holding billions of dollars of suddenly 
unmarketable securities whose value began plummeting. The 
report concluded that the 2007 mass downgrades, which were 
unique in U.S. financial history and made it clear that RMBS 
and CDO securities were no longer safe investments, were the 
most immediate trigger of the financial crisis.
    The report also showed that, from 2004 to 2007, Moody's and 
S&P used credit rating models with data that was inadequate to 
predict how high risk home loans would perform. In addition, it 
showed that Moody's and S&P failed to factor into their models 
increased credit risks due to mortgage fraud, lax underwriting 
standards, and unsustainable housing price appreciation. By 
2006, Moody's and S&P knew their RMBS and CDO ratings were 
inaccurate, revised their rating models to produce more 
accurate ratings, but then failed to use the revised models to 
re-evaluate their existing RMBS and CDO ratings, delaying 
thousands of rating downgrades and allowing those securities to 
carry inflated ratings that could mislead investors. In 
addition, despite record profits, Moody's and S&P failed to 
assign sufficient resources to adequately rate new products and 
test the accuracy of their existing ratings.
    The report offered a number of recommendations to prevent 
similar credit rating problems in the future. Those 
recommendations included urging the SEC to rank existing credit 
rating agencies in terms of their performance, including the 
accuracy of their ratings; and facilitating the ability of 
investors to hold credit rating agencies accountable in civil 
lawsuits for inflated credit ratings. The report also 
recommended strengthening the SEC's inspection, examination, 
and regulatory authority to ensure credit rating agencies 
instituted internal controls, methodologies, and employee 
conflict of interest safeguards to increase ratings' accuracy, 
and assigned higher risks to financial instruments whose 
performance could not be reliably predicted due to their 
novelty or complexity, or because they relied on assets from 
parties with poor track records. In addition, the report 
recommended that the SEC ensure prompt use by the credit rating 
agencies of new forms providing comprehensible, consistent, and 
useful ratings information to investors; and that Federal 
agencies take steps to reduce the Federal Government's reliance 
on privately issued credit ratings.
    Investment Bank High Risk Products and Conflicts of 
Interest. The fourth and final section of the report focused on 
the role of investment banks in the financial crisis, using two 
case histories. The first involved Goldman Sachs, a Wall Street 
investment bank that was a leader in developing RMBS and CDO 
products and the secondary mortgage market, and then profited 
from the collapse of that same market during the crisis. The 
report detailed numerous troubling and sometimes abusive 
practices by Goldman raising multiple conflict of interest 
concerns. The second case history involved Deutche Bank which 
constructed and sold CDOs that it knew to contain poor quality 
assets.
    In the first case history, the report presented evidence 
that, from 2004 to 2007, in exchange for lucrative fees, 
Goldman helped lenders notorious for issuing high risk, poor 
quality loans to securitize them, obtain favorable credit 
ratings for them, and sell the resulting RMBS securities to 
investors, injecting billions of dollars of risky loans into 
the financial system. It also showed how Goldman Sachs 
magnified the risks associated with subprime mortgages by re-
securitizing related RMBS securities in CDOs, referencing them 
in synthetic CDOs, and selling the CDO securities to investors 
worldwide. In addition, Goldman promoted standardized credit 
default swaps and other products to enable investors to bet on 
the failure as well as the success of RMBS and CDO securities.
    The report showed how, as high risk home loans began to 
default, loan delinquency rates increased, and RMBS and CDO 
securities began to incur losses in late 2006, Goldman suddenly 
reversed course and began to bet against the mortgage market. 
The documents detailed how Goldman sold its mortgage 
investments, used a variety of tactics to build a very large 
net short position, and either locked in or cashed out its 
profits during 2007, generating billions of dollars in gain. 
One internal Goldman email characterized this 2007 effort as 
the ``big short.'' As a result, during the financial crisis, 
while other investment banks incurred large losses, Goldman 
showcased its mortgage profits, citing its net short position.
    The report also provided detailed information about 
Goldman's efforts, during late 2006 and the first half of 2007, 
to originate and sell four mortgage-related CDOs known as 
Hudson, Anderson, Timberwolf, and Abacus, even though it knew 
all four contained poor quality assets likely to fail. Goldman 
designed those CDOs, underwrote them, and recommended the CDO 
securities to clients. In three of the CDOs, Goldman also 
secretly bet against the securities, either in whole or in 
part. In the fourth, Goldman allowed a favored client to help 
select the assets and to bet against the resulting CDO, without 
informing other investors in the CDO about the favored client's 
actions. In the case of all four CDOs, Goldman did not inform 
the investors to whom it marketed and sold the CDO securities 
that it had a negative view of the mortgage market, that it was 
shorting the mortgage market, or that Goldman or a favored 
client had bet against the same CDO securities that Goldman was 
selling to them.
    In the second case history, the report presented evidence 
on actions taken by Deutsche Bank, from late 2006 through 2007, 
in exchange for lucrative fees, to issue 15 CDOs securitizing 
about $11 billion in assets, despite a deteriorating U.S. 
mortgage market. In 2006, Deutsche Bank's Global head of CDO 
trading, Gregg Lippmann, referred to the bank's CDO business as 
a ``cdo machine'' and ``ponzi scheme,'' and at one point wrote: 
``[W]e are looking for ways to get out of this risk, but for 
now the view has been, we like the fees and the league table 
credit (and dammit we have a budget to make).'' The report 
provided details about one $1.1 billion CDO called Gemstone 7, 
which Deutsche Bank had constructed with a hedge fund, HBK, and 
which included RMBS securities that Mr. Lippmann had described 
as ``crap'' and ``pigs.'' It showed how Mr. Lippmann had 
approved moving one of the RMBS securities from the bank's 
inventory to Gemstone 7, even after asking, ``DOESN'T THIS DEAL 
BLOW,'' and being told by a trader, ``yes it blows I am seeing 
20-40 percent writedowns.'' To motivate its sales force to sell 
Gemstone securities despite poor quality assets, Deutsche Bank 
offered special financial incentives and directed the sales 
force to seek buyers in Europe and Asia. While Deutsche Bank 
was unable to sell all of the Gemstone securities, it did 
remove $700 million in risk from its books, at the same time 
contaminating the U.S. market with shoddy securities that 
quickly lost value.
    The report showed that Deutsche Bank traded in the U.S. 
mortgage market, not only on behalf of clients, but also on a 
proprietary basis. The evidence indicated that the bank mostly 
purchased long mortgage related assets, but also allowed Mr. 
Lippmann to buildup a $5 billion short position, betting 
against the mortgage market. That position eventually produced 
bank profits of $1.5 billion. Despite that profitable short 
position, through its mortgage department and an affiliated 
hedge fund, Winchester Capital based in London, Deutsche Bank 
accumulated more than $25 billion in long mortgage positions. 
In 2007, its mortgage department reported an overall loss of 
$4.5 billion, demonstrating the massive losses that proprietary 
trading can produce.
    The report offered a number of recommendations to prevent 
investment banks from producing and selling high risk products 
tainted by conflicts of interest. Those recommendations 
included urging Federal bank regulators to design strong 
conflict of interest prohibitions for investment banks and 
conduct a review of banks' structured finance transactions, 
including RMBS, CDO, CDS, and ABX activities, to identify legal 
violations and stop abusive practices. The report also 
recommended allowing only narrow exceptions to the new Dodd-
Frank statutory ban on proprietary trading by banks, permitting 
only activities that serve clients or reduce risk. In addition, 
the report recommended using the Section 620 banking activities 
study to evaluate the appropriateness of allowing federally 
insured banks to design, market, and invest in naked credit 
default swaps, synthetic financial instruments, and structured 
finance products with risks that cannot be reliably measured.

B. Repatriating Offshore Funds: 2004 Tax Windfall for Select 
        Multinationals, October 11, 2011, with Addendum issued on 
        December 14, 2011 (Report Prepared by the Majority Staff of the 
        Permanent Subcommittee on Investigations)

    In October 2011, the Subcommittee released a majority staff 
report showing how a 2004 tax break allowing U.S. 
multinationals to get a substantial tax discount for bringing 
offshore funds back home did not produce new jobs or increased 
research expenditures to spur economic growth, but was followed 
instead by increased stock buybacks and executive pay and more 
investments offshore. In December 2011, an addendum to that 
report showed how claims by some multinationals that their 
offshore funds were ``trapped'' abroad by high tax rates were 
untrue, since those corporations were already using an existing 
tax loophole to place nearly $250 billion in offshore funds in 
U.S. banks, U.S. Treasury bonds, and U.S. stocks without 
triggering any tax liability. The report recommended against 
enactment of a new repatriation tax break that would benefit 
only a small percentage of U.S. corporations at the expense of 
the many domestic companies that do not send funds offshore.
    The Levin report showed that the 2004 repatriation tax 
break enabled U.S. companies to bring $312 billion in offshore 
earnings back to the United States at the low tax rate of 5.25 
percent. Though the law specified allowable uses of those 
repatriated funds, and expressly prohibited using repatriated 
money for stock repurchases or executive pay, it did not 
require corporations to track their use of repatriated funds 
and so provided no mechanism to monitor compliance with the 
law. To determine how the corporations actually used their 
repatriated funds, the Subcommittee surveyed the 15 
corporations that repatriated the most money through qualifying 
dividends, and an additional four firms that repatriated 
significant amounts. The top 15 corporations together brought 
back a total of $155 billion in offshore earnings, while the 
additional firms increased that total to $163 billion, together 
representing more than half of all funds repatriated as 
qualifying dividends.
    The report contained a number of factual findings with 
respect to those repatriated funds. First, the report found 
that the repatriation tax break had failed in its express 
purpose to increase U.S. jobs. After repatriating $155 billion, 
the top 15 repatriating firms reduced their overall U.S. 
workforce by nearly 21,000 jobs. Second, the report found that 
the repatriation tax break did not accelerate investments in 
research and development. Instead, among the top 15 
repatriating corporations, the pace of R&D spending slightly 
decreased after the tax break. Third, the report found that, 
despite a prohibition on using repatriated funds for stock 
repurchases, the top 15 repatriating corporations accelerated 
their spending on stock buybacks after repatriation, increasing 
them by 16 percent from 2004 to 2005, and 38 percent from 2005 
to 2006. Overall, the surveyed corporations more than doubled 
the amount of their average stock repurchases, from about $2.2 
billion in 2004 to $5.3 billion in 2007. Moreover, despite a 
prohibition on using repatriated funds for executive 
compensation, the report determined that the pay of the top 
five executives at the top 15 repatriating corporations jumped 
27 percent from 2004 to 2005, and another 30 percent from 2005 
to 2006. In comparison, average worker pay in the same years 
increased 3 percent and 11 percent.
    The report also presented evidence that the repatriation 
tax break benefited only a narrow slice of the U.S. economy, 
primarily pharmaceutical and technology corporations, while 
providing no benefit to domestic firms that chose not to engage 
in offshore operations or investments. The report observed that 
the 5.25 percent tax rate created a competitive disadvantage 
for domestic businesses that chose not to do business offshore, 
and provided a windfall for multinationals in a few industries 
without benefiting the U.S. economy as a whole. The report also 
determined that multinationals had significantly increased 
their offshore cash holdings since the 2004 tax break, 
indicating that the tax break itself encouraged the offshoring 
of funds. Finally, the report determined that a substantial 
share of the repatriated funds came from tax haven 
jurisdictions such as Bermuda, the British Virgin Islands, the 
Cayman Islands, and Switzerland, with seven of the surveyed 
corporations repatriating between 90 and 100 percent of their 
funds from tax havens. The report concluded that a repeat 
repatriation tax break would similarly fail to boost jobs or 
research expenditures, and would instead encourage firms to 
keep more cash overseas in hopes of future tax breaks.
    The report addendum provided new data showing that large 
multinational U.S. corporations with substantial offshore funds 
had already placed nearly half of those funds in U.S. bank 
accounts and U.S. investments without paying any U.S. tax on 
those foreign earnings. Corporations are able to invest their 
foreign earnings in the United States without treating them as 
``repatriated'' and subject to taxation, because Section 
956(c)(2) of the Federal tax code already allows U.S. 
corporations to use foreign funds to make a wide range of U.S. 
investments without incurring tax liability. If those U.S. 
investments then produce income, that additional income may be 
subject to taxation.
    The addendum's data derived from a Subcommittee survey of 
27 U.S. multinational corporations. The survey disclosed that, 
collectively, the 27 multinationals held a total of $538 
billion, or more than half a trillion dollars, in tax-deferred 
foreign earnings at the end of Fiscal Year 2010. By comparison, 
in mid-2011, all U.S. corporations held tax-deferred foreign 
earnings totaling an estimated $1.4 trillion.
    The survey determined that 46 percent of that $538 billion 
in foreign earnings--almost $250 billion--was maintained in 
U.S. bank accounts or invested in U.S. assets such as U.S. 
Treasuries, U.S. stocks other than their own, U.S. bonds, or 
U.S. mutual funds. The survey also found that nine of the 27 
companies, or one-third, including Apple, Cisco, Google, and 
Microsoft, held between 75 and 100 percent of their tax-
deferred foreign earnings in U.S. assets. The Subcommittee's 
survey information was the first to provide specific data on 
the amount of tax-deferred offshore corporate earnings that are 
maintained in the United States.
    The $250 billion of foreign funds invested in U.S. assets 
demonstrated that U.S. corporations were already well aware of 
the tax code provision allowing them to return foreign earnings 
to the United States on a tax-free basis. Those tax-deferred 
foreign earnings were in addition to overall domestic cash 
holdings of U.S. corporations, which at the time of the report 
was estimated by the Federal Reserve at $2 trillion. As a 
result of the survey data, the addendum concluded that U.S. 
corporations were already taking advantage of the security and 
stability of the U.S. financial system without paying U.S. 
taxes on their offshore funds, and that a new repatriation tax 
break would raise additional tax fairness issues.

C. U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist 
        Financing: HSBC Case History, July 17, 2012 (Report Prepared by 
        the Majority and Minority Staffs of the Permanent Subcommittee 
        on Investigations and released in conjunction with the 
        Subcommittee's hearing on July 17, 2012)

    In July 2012, the Subcommittee held a hearing, described 
earlier, examining how a large global bank, HSBC, through its 
U.S. affiliate, HSBC Bank USA (HBUS), exposed the United States 
to a wide array of money laundering, drug trafficking, and 
terrorist financing risks due to poor anti-money laundering 
(AML) controls. The hearing also examined the failure of the 
bank's primary regulator, the Office of the Comptroller of the 
Currency (OCC), to compel HBUS to take corrective action, 
despite ongoing evidence of the bank's AML deficiencies over a 
6-year period. In connection with that hearing, the 
Subcommittee released a 330-page bipartisan staff report that 
detailed the investigation, provided factual findings, and 
offered recommendations to address the problems identified.
    The Levin-Coburn report described HBUS' operations and 
explained how HBUS opened U.S. accounts for HSBC's 80 
affiliates around the world. The report also explained that 
HBUS had a history of poor AML controls, having first been 
cited, in 2003, with severe AML deficiencies by the Federal 
Reserve and New York State Banking Department which required 
the bank to overhaul its AML program. That same year, HBUS 
converted from a State to a national bank charter, changing its 
primary regulator to the OCC. The report noted that, in 2010, 
the OCC also cited HBUS for severe AML deficiencies, 
identifying, among other issues, the bank's failure to monitor 
$60 trillion in wire transfer and account activity; a backlog 
of 17,000 unreviewed account alerts regarding potentially 
suspicious activity; and its failure to conduct AML due 
diligence before opening accounts for HSBC affiliates. The 
report also noted that, prior to 2010, the OCC had failed to 
take a single enforcement action against the bank, despite 
ample evidence of AML problems.
    The report focused on five types of AML deficiencies at 
HBUS which exposed the United States to money laundering, drug 
trafficking and terrorist financing risks. The first involved 
HBUS' servicing of high risk HSBC affiliates, using as a case 
history the U.S. account opened for HSBC Bank Mexico (HBMX). 
The report detailed evidence indicating that HBUS treated HBMX 
as a low risk account, despite HBMX's location in a country 
facing substantial money laundering and drug trafficking 
challenges; HBMX's high risk clientele which included casas de 
cambio suspected of involvement with the drug trade; HBMX's 
high risk products which included offering U.S. dollar accounts 
in the Cayman Islands, a secrecy jurisdiction, to circumvent a 
Mexican prohibition on U.S. dollar accounts; and HBMX's long 
history of weak know-your-customer and other AML controls. The 
report also described how HBMX transported $7 billion in 
physical U.S. dollars to HBUS from 2007 to 2008, outstripping 
other Mexican banks, even one twice its size, leading 
regulators to express concern to HBMX that the volume of 
dollars suggested the presence of illegal drug proceeds. The 
report showed that, because HBMX was an HSBC affiliate, as a 
policy matter, HBUS had performed no initial due diligence to 
evaluate its AML risks and conducted no ongoing monitoring of 
the HBMX account, leaving it in the dark about the account's 
suspicious activity.
    Second, the report presented evidence that some HSBC 
affiliates had taken actions to circumvent a transaction filter 
required by the U.S. Office of Foreign Asset Control (OFAC) to 
identify and block transactions involving known terrorists, 
persons involved with weapons of mass destruction, drug lords, 
or rogue jurisdictions such as Iran or North Korea. Because the 
OFAC filter can delay transactions permitted by law, some HSBC 
affiliates had developed tactics to bypass it, including by 
stripping information from wire transfer documents. The report 
detailed evidence showing that, from at least 2001 to 2007, two 
HSBC affiliates sent nearly 25,000 transactions involving $19 
billion through their HBUS accounts without disclosing the 
transactions' links to Iran. In addition, from 2002 to 2007, 
some HSBC affiliates sent potentially prohibited transactions 
through HBUS involving Burma, Cuba, North Korea, Sudan, and 
other prohibited countries or persons. The report indicated 
that HSBC Group compliance personnel were aware of actions 
taken by some HSBC affiliates to circumvent the OFAC filter, 
but failed to stop it or inform HBUS about its extent. The 
report also described internal HBUS documents which showed that 
key senior HBUS officials were informed as early as 2001, that 
the bank was processing undisclosed Iranian transactions from 
HSBC affiliates.
    In the third area of concern, the report presented evidence 
that HBUS provided U.S. dollars and banking services to some 
banks in Saudi Arabia and Bangladesh, despite evidence 
suggesting that the banks had links to terrorist financing. The 
report detailed, for example, that due to terrorist financing 
concerns, in 2005, HBUS closed correspondent banking and 
banknotes accounts it had provided to Al Rajhi Bank, Saudi 
Arabia's largest private financial institution whose key 
founder was identified as an early financial benefactor of al 
Qaeda. For nearly 2 years, HBUS compliance personnel resisted 
pressure from HSBC personnel in the Middle East and United 
States to resume business with the bank. In December 2006, 
however, after Al Rajhi Bank threatened to pull all of its 
business from HSBC unless it regained access to HBUS' banknotes 
program, HBUS agreed to resume supplying Al Rajhi Bank with 
physical U.S. dollars. Despite ongoing troubling information, 
HBUS provided nearly $1 billion in U.S. dollars to Al Rajhi 
Bank until 2010, when HSBC decided, on a global basis, to exit 
the U.S. banknotes business.
    Fourth, the report presented evidence that HBUS was 
routinely clearing suspicious bulk travelers checks. The report 
showed that, from at least 2005 to 2008, HSBC cleared $290 
million in U.S. travelers cheques for a Japanese regional bank, 
Hokuriku Bank, despite evidence of suspicious activity 
benefiting Russians who claimed to be in the used car business. 
HBUS cleared the Hokuriku travelers cheques on a daily basis, 
at times clearing $500,000 or more in a single day. The cheques 
were in denominations of $500 or $1,000, submitted in large 
blocks of sequentially numbered cheques, and signed and 
countersigned with the same illegible signature. HBUS stopped 
clearing the cheques only after an OCC examination uncovered 
stacks of them being processed with inadequate AML controls.
    The fifth and final area of concern examined in the report 
presented evidence of HBUS opening accounts for bearer share 
corporations, a notorious type of corporation that invites 
secrecy and wrongdoing by assigning ownership to whomever has 
physical possession of the shares. The report indicated that, 
over the course of a decade, HBUS had opened over 2,000 bearer 
share accounts. At its peak, HBUS' Miami office had over 1,670 
bearer share accounts; the New York office had over 850; and 
the Los Angeles office had over 30. The Miami bearer share 
accounts alone held assets totaling an estimated $2.6 billion, 
generating annual bank revenues of $26 million. The report 
noted that multiple internal audits and regulatory examinations 
had criticized the accounts as high risk and advocated that 
HBUS either take physical custody of the shares or require the 
corporations to register the shares in the names of the 
shareholders, but HBUS bankers initially resisted. The report 
noted that, by 2011, HBUS had reduced its bearer share accounts 
to 26, while maintained a policy allowing new accounts.
    In addition to describing HBUS' poor AML controls, the 
report detailed the OCC's failure for many years to compel 
better performance. The report noted that OCC examiners 
repeatedly identified key AML deficiencies at the bank, but 
during the 6-year period from 2004 to 2010, OCC officials did 
not respond with any formal or informal enforcement actions, 
essentially allowing the bank's AML problems to fester. The 
report identified key weaknesses in the OCC's AML oversight 
efforts that contributed to the agency's tolerating the bank's 
AML problems, including treating AML deficiencies as a consumer 
compliance concern instead of a matter of safety and soundness; 
deeming AML problems to be Matters Requiring Attention by bank 
management rather than casting them as statutory violations; 
conducting narrowly focused AML examinations; and ignoring AML 
examinations that found AML problems year after year. In 2009, 
after learning of law enforcement investigations raising AML 
issues at HBUS, the OCC suddenly expanded and intensified an 
ongoing AML examination at the bank. That examination 
culminated in a September 2010 OCC supervisory letter 
identifying severe AML problems and an October 2010 Cease and 
Desist Order requiring HBUS to revamp its program.
    The report recommended that HBUS take a number of steps to 
strengthen its AML controls, including conducting due diligence 
reviews of HSBC affiliates to identify AML risks; implementing 
stronger controls to ensure the bank did not process 
transactions with prohibited persons such as terrorists, drug 
lords, and rogue regimes; closing accounts of banks linked to 
terrorist financing; overhauling its AML controls on travelers 
cheques; and banning bearer share accounts. HBUS subsequently 
implemented all but the last of these recommendations, while 
taking additional steps to strengthen its AML controls, as 
described earlier.
    The report also recommended that the OCC strengthen its AML 
oversight efforts. One recommendation was that the OCC follow 
the lead of other Federal regulators in treating AML 
deficiencies as a threat to a bank's safety and soundness, and 
lower a bank's management ratings if AML problems were not 
resolved. Another was that the OCC cite banks for statutory 
violations if they failed to meet any one of the four minimum 
statutory requirements for an effective AML program. In 
addition, the report recommended that the OCC take stronger 
action when a bank hit a threshold number of AML statutory 
violations or Matters Requiring Attention. The OCC subsequently 
implemented all of those recommendations.

D. Social Security Disability Programs: Improving the Quality of 
        Benefit Award Decisions, September 12, 2012 (Report Prepared by 
        the Minority Staff of the Permanent Subcommittee on 
        Investigations and released in conjunction with the 
        Subcommittee's hearing on September 13, 2012)

    In September 2012, the Subcommittee held a hearing, 
described earlier, examining the quality of decisions by the 
Social Security Administration (SSA) to award benefits under 
its disability programs. The hearing was based upon a 
bipartisan investigation. In connection with the hearing, the 
Subcommittee released a 132-page minority staff report that 
detailed the investigation, provided factual findings, and 
offered recommendations to address the problems identified.
    The Coburn report described how the Subcommittee obtained 
actual case files, with personal information removed, for SSA 
beneficiaries accepted into the Social Security Disability 
Insurance (SSDI) or Supplemental Security Income (SSI) program 
from three specific counties in Virginia, Alabama, and, 
Oklahoma, reflecting different levels of per capita enrollment 
in the programs. After the Subcommittee provided selection 
criteria, SSA randomly selected 300 electronic case files that 
met the criteria, 100 from each specified county. The cases 
provided a cross-section of applicants who were awarded 
disability benefits at different stages of SSA review, 
including at the initial application stage, the reconsideration 
stage, upon appeal before an administrative law judge (ALJ), 
and upon appeal before the Social Security Appeals Council. The 
report explained that the Subcommittee investigation carefully 
reviewed each case file to evaluate the decisions reached, the 
rationale used, the testimony and information provided by the 
claimant, the objective medical evidence in the file, any 
expert or physician opinions rendered, and other relevant 
evidence contained in the case files provided by SSA. The 
report noted that, by limiting its review to 300 case files 
from three counties, the Subcommittee was able to drill down 
into the specifics of each case and provide a detailed case 
study of how disability approval decisions were made, their 
weaknesses, and how they could be improved.
    The report indicated that the investigation's review of the 
300 disability case files found that more than a quarter of 
agency decisions failed to properly address insufficient, 
contradictory or incomplete evidence. The report noted that 
this finding corroborated a new 2011 internal quality review 
conducted by SSA itself, which found that, on average 
nationwide, disability decisions made at the ALJ level had 
errors or were insufficient 22 percent of the time. The three 
counties examined by the Subcommittee were in regions with even 
higher individual error rates, according to SSA, of between 23-
26 percent.
    Citing specific information from the 300 case files, the 
report presented evidence regarding procedural problems in how 
some of the cases were handled by the SSA ALJs. The report 
presented evidence, for example, that some SSA ALJs held 
perfunctory hearings lasting less than 10 minutes, misused 
testimony provided by vocational or medical experts, or failed 
to elicit hearing testimony needed to resolve conflicting 
information in a claimant's case file. In other cases, 
disability applicants, usually through their representatives, 
submitted medical evidence immediately before or on the day of 
an ALJ hearing or after the hearing's conclusion, a practice 
leading to confusion about the supporting evidence as well as 
inefficiencies in case analysis. Still another problem was 
that, in many cases before the ALJs, consultative examinations 
(CEs) submitted on behalf of either SSA or a claimant consisted 
of little more than conclusory statements with insufficient 
reference to objective medical evidence or how the CE's 
findings related to other evidence in the case file. In 
addition, in written decisions, the report found that the 
consultative examinations were either summarily dismissed or 
heavily relied upon, with little to no explanation.
    The report identified other problems with the quality of 
the written decisions awarding disability benefits. Again 
citing information from specific case files, the report 
presented evidence that, in many cases, at both the initial and 
appellate levels of review, the State-based Disability 
Determination Services (DDS) examiners and SSA ALJs issued 
decisions approving disability benefits without citing 
adequate, objective medical evidence to support the finding; 
without explaining the medical basis for the decision; without 
showing how the claimant met basic listing elements; or at 
times without taking into account or explaining contradictory 
evidence. The report described, in particular, cases in which 
the ALJ opinion failed to demonstrate how the claimant met each 
of the required criteria in the SSA's Medical Listing of 
Impairments to qualify under ``Step Three'' in the application 
process. Awards at Step Three are reserved for those with 
medical conditions SSA has determined to be severe enough to 
qualify an applicant for benefits.
    The report also found that the majority of disability 
awards reviewed by the Subcommittee at the ALJ level utilized 
SSA medical-vocational grid rules. The report observed that a 
recent SSA analysis had found that benefit awards were made 
under these grid rules at a rate of 4 to 1, compared to awards 
made due to a claimant's meeting a medical listing. The report 
presented evidence that, at times, those decisions were the 
result of a claimant's representative and the ALJ negotiating 
an award of benefits by changing the disability onset date to 
the claimant's 50th or 55th birthday. Still another problem was 
that some case files showed DDS examiners and ALJs reached 
their decisions after relying on the Department of Labor's 
outdated Dictionary of Occupational Titles (DOT), which SSA was 
in the process of replacing with a new Occupational Information 
System, to identify jobs open to claimants with limited 
disabilities. The report noted that the last major revision to 
the DOT had occurred in 1977, yet the new database was not 
expected to be ready until 2016. The report noted that, in the 
meantime, SSA disability decisionmakers would continue to rely 
on the DOT which did not reflect current labor market trends or 
jobs available in the national economy. Finally, the report 
noted that ALJ decisions had failed in some cases to adequately 
analyze the effect of factors such as obesity and drug and 
alcohol abuse on a claimant's impairment.
    The report provided a number of recommendations to 
strengthen the decisionmaking process used to award disability 
benefits. First, it recommended requiring a government 
representative at all ALJ hearings to ensure key evidence and 
issues were properly presented, to reduce instances in which 
SSA ALJs overlooked evidence indicating a claimant was not 
disabled, and to increase consistency and accountability in ALJ 
decisionmaking. The report also recommended strengthening the 
new ALJ quality review process by conducting more reviews of 
ALJ decisions during the year and developing metrics to measure 
the quality of disability decisions. To eliminate confusion, 
inefficiencies, and abuses associated with the SSA practice of 
allowing medical evidence to be submitted at any point in a 
disability case, the report recommended closing the evidentiary 
record 1 week prior to an ALJ hearing, with exceptions only for 
significant new evidence for which exclusion would be contrary 
to the public interest. The report also recommended additional 
training for ALJs on the use of SSA Medical Listings, and on 
how to analyze and address issues involving drug and alcohol 
abuse. Another recommendation was for SSA to move more quickly 
in replacing the outdated Dictionary of Occupational Titles 
with a usable Occupational Information System to ensure 
decisionmakers had accurate information about available jobs. 
The report also recommended that the SSA consult with ALJs to 
improve the usefulness of agency-funded consultative 
examinations (CEs), including by requiring an explanation of 
any significant disparity between a CE's analysis and other 
evidence in the case file. Finally, the report advocated 
reviewing the SSA's medical-vocational guidelines to determine 
if reforms are needed.

E. Federal Support For and Involvement In State and Local Fusion 
        Centers, October 3, 2012 (Report Prepared by the Majority and 
        Minority Staffs of the Permanent Subcommittee on 
        Investigations)

    In October 2012, following a 2-year investigation at the 
request of Senator Coburn, the Subcommittee released a 107-page 
bipartisan staff report finding that Federal funding provided 
by the Department of Homeland Security (DHS) to State and local 
intelligence ``fusion centers'' had not yielded significant 
useful information to support Federal counterterrorism efforts. 
Among other problems, the Coburn-Levin report showed that the 
fusion centers produced intelligence that was of uneven 
quality, was often untimely, and sometimes endangered civil 
liberties, and showed that DHS did not effectively monitor the 
use of Federal funds provided to State and local fusion 
centers, which sometimes made questionable expenditures. In 
addition, the report determined that senior DHS officials were 
aware of the problems hampering effective counterterrorism work 
with the fusion centers, but did not always inform Congress of 
the issues, nor ensure the problems were fixed in a timely 
manner.
    The report noted that, since 2003, over 70 State and local 
fusion centers, supported in part with Federal funds, had been 
created or expanded in part to strengthen U.S. intelligence 
capabilities, particularly to detect, disrupt, and respond to 
domestic terrorist activities. The report also observed that 
DHS' support for State and local fusion centers had, from the 
beginning, centered on their professed ability to strengthen 
Federal counterterrorism efforts. In addition, the report noted 
that, while fusion centers may provide valuable services in 
fields other than terrorism, such as contributing to 
traditional criminal investigations, public safety, or disaster 
response and recovery efforts, the Subcommittee investigation 
had focused on the Federal return from investing in State and 
local fusion centers using the counterterrorism objectives 
established by law and DHS.
    The report described the Subcommittee's investigative 
efforts, which included interviewing dozens of current and 
former Federal, State and local officials, reviewing more than 
a year's worth of intelligence reporting from fusions centers, 
conducting a nationwide survey of fusion centers, and examining 
thousands of pages of financial records and grant 
documentation.
    The report presented evidence, using examples taken from 
DHS intelligence reports based upon fusion center information, 
that DHS intelligence officers assigned to State and local 
fusion centers produced intelligence of uneven quality--
oftentimes shoddy, rarely timely, sometimes endangering civil 
liberties, occasionally taken from already-published public 
sources, and more often than not unrelated to terrorism. The 
report explained that, despite reviewing 610 intelligence 
reports from April 1, 2009 to April 30, 2010, the Subcommittee 
investigation could identify no fusion center reporting which 
uncovered a terrorist threat or contributed to the disruption 
of an active terrorist plot. Moreover, the report disclosed 
that nearly a third of the reports--188 out of 610--were never 
published for use within the intelligence community, often 
because they lacked useful information or potentially violated 
DHS guidelines to safeguard Americans' civil liberties or 
Privacy Act protections.
    The report further noted that DHS officials' public claims 
about fusion centers were not always accurate. It observed, for 
example, that DHS officials had asserted that some fusion 
centers existed when they did not, and had, at times, 
overstated fusion center successes. The report also revealed 
that DHS officials had initially failed to disclose an 
extensive, non-public evaluation of the State and local fusion 
centers, conducted in 2010, which had identified problems at 
both the centers and DHS. The report noted that, even when 
asked about that 2010 evaluation, DHS had avoided acknowledging 
it, initially withheld documents, and repeatedly resisted 
information requests, unnecessarily prolonging the Subcommittee 
investigation.
    Finally, the report presented evidence of problems related 
to Federal spending on State and local fusion centers. The 
report disclosed that DHS was unable to provide an accurate 
tally of how much it had granted to States and cities to 
support fusion centers over time, and instead produced 
estimates indicating that it had spent somewhere between $289 
million and $1.4 billion since 2003, broad estimates that 
differed by over $1 billion. The report showed that DHS was 
also unable to specify the amount of Federal funds provided to 
individual fusion centers. In addition, the report detailed 
evidence showing that DHS did not effectively monitor how 
Federal funds were used to strengthen fusion center 
counterterrorism efforts and often did not even track how the 
funds were ultimately spent. A review of the expenditures at 
five fusion centers found that Federal funds were used to 
purchase dozens of flat screen TVs, two sport utility vehicles, 
cell phone tracking devices, and other surveillance equipment 
unrelated to the analytical mission of fusion centers, which 
are not charged with collecting intelligence. The report noted 
that, at the same time, according to DHS assessments, the 
fusion centers making the questionable expenditures lacked 
basic intelligence capabilities.
    The report provided a number of recommendations to address 
the problems uncovered in connection with State and local 
fusion centers. They included urging Congress to revisit the 
stated purpose of providing Federal support to DHS fusion 
centers, and requiring DHS either to conform its fusion center 
efforts to match its counterterrorism statutory purpose, or 
redefine its fusion center mission. The report also recommended 
that DHS reform its intelligence reporting efforts at State and 
local fusion centers to eliminate duplication and improve 
training of DHS intelligence reporters. In the area of funding, 
the report recommended that DHS track how much money it gave to 
each fusion center, strictly align grant funding to meet 
Federal needs and reflect a fusion center's value and 
performance, and not allow Federal funds to be spent on items 
that did not directly contribute to the Federal 
counterterrorism mission. The report also recommended that the 
Program Manager for the Information Sharing Environment in the 
office of the Director of National Intelligence conduct regular 
evaluations of fusion center capabilities and performance. 
Finally, the report recommended that DHS strengthen its 
practices and guidelines to protect civil liberties, prevent 
DHS personnel from improperly collecting and retaining 
intelligence on Constitutionally protected activity, prohibit 
the retention of inappropriate and illegal reporting, and 
promptly bar poorly performing personnel from issuing domestic 
intelligence reports involving Americans.

                   V. Requested and Sponsored Reports

    In connection with its investigations, the Subcommittee 
makes extensive use of the resources and expertise of the 
Government Accountability Office (GAO), the Offices of 
Inspectors General (OIGs) at various Federal agencies, and 
other entities. During the 112th Congress, the Subcommittee 
requested a number of reports and studies on issues of 
importance. Several of these reports have already been 
described in connection with Subcommittee hearings. Several 
additional reports that were of particular interest, and that 
were not covered by Subcommittee hearings, are the following.

A. Tax Administration: IRS's Information Exchanges with Other Countries 
        Could Be Improved through Better Performance Information (GAO-
        11-730), September 9, 2011

    For over a decade, the Subcommittee has conducted 
investigations into various aspects of offshore tax abuses 
which are estimated to cost the U.S. treasury at least $100 
billion in unpaid taxes each year. Subcommittee investigations 
have included examining the difficulties often encountered by 
the IRS in obtaining information from offshore tax havens with 
secrecy laws. In September 2011, in response to a bipartisan 
request from Subcommittee Chairman Levin and Ranking Minority 
Member Coburn, GAO prepared a report examining the current 
status of U.S. tax information exchange arrangements with other 
countries, including the number and types of tax treaties and 
agreements in effect, the volume of information exchange 
activity, and the amount of time taken to process information 
requests. The GAO report disclosed that the IRS had a mixed 
record on using international tax agreements to combat offshore 
tax abuse. On the positive side, the GAO report disclosed for 
the first time that the IRS had established automatic 
information exchange arrangements with 25 countries and, in 
2010, used those arrangements to obtain over 2 million data 
items on U.S. taxpayers with offshore income. Aside from that 
automatic information exchange, however, the GAO report also 
disclosed that the IRS initiated only a couple hundred specific 
requests for taxpayer information per year from other 
countries.
    The GAO report explained that, in response to the trillions 
of dollars in cross-border financial activity, U.S. and other 
tax authorities around the world had established mechanisms to 
exchange information with each other to administer and enforce 
compliance with their respective tax laws. To study those 
arrangements, GAO collected information on existing U.S. tax 
information exchange agreements, analyzed IRS data on 
information exchanges, and interviewed program officials and 
the users of exchanged information.
    The GAO report determined that, as of April 30, 2011, the 
United States had in force 143 tax treaties, tax information 
exchange agreements, or mutual legal assistance treaties 
including tax provisions with 90 foreign jurisdictions. The 
report provided a list and the key features of each of those 
agreements. GAO determined that, while the agreements had many 
similar features, the specifics of each information exchange 
were unique to the legal and administrative arrangements agreed 
to by the United States and each signatory jurisdiction.
    To analyze the information exchanges under the agreements, 
GAO reviewed 5 years of data supplied by the IRS division of 
Exchange of Information and Overseas Operations on tax 
information requests initiated and completed between 2006 and 
2010. GAO explained that tax information exchange partners may 
choose to provide information to each other on a regular basis, 
through what is referred to as an automatic exchange of 
information. The GAO report found that in 2010 alone, as a 
result of automatic data exchange arrangements with 25 foreign 
jurisdictions, the IRS received about 2.1 million data items 
from those countries, while providing about 2.5 million data 
items to them. GAO reported that the automatic information 
exchanges typically provided data on wages, interest, 
dividends, or other forms of income paid to persons from a 
specified country.
    GAO also reviewed one-time only tax information requests 
made by either the IRS to another country, referred to as 
outgoing requests, or by a foreign country to the IRS, referred 
to as incoming requests. The number of those outgoing and 
incoming requests was relatively small compared to the number 
of data exchanges taking place on an automated basis. Over the 
5-year period from 2006 to 2010, GAO found that the IRS 
initiated a total of about 900 tax information requests to 
other countries, ranging from a low of 165 to a high of 236 
requests made in a single year. GAO noted that each request 
could have referred to one or multiple taxpayers. GAO's figures 
indicated that, on average over the 5-years, the IRS sent less 
than one specific request for taxpayer information per day to a 
foreign country.
    During the same 5-year period, GAO found that, outside of 
the automated process, foreign jurisdictions made a total of 
about 4,200 specific tax information requests to the IRS, 
resulting in more than four times as many incoming as outgoing 
requests. GAO's figures indicated that, on average over the 5-
year period, the 90 jurisdictions collectively made about 840 
requests per year, or less than 3 requests per day to the 
United States.
    GAO also reported that, of the 900 outgoing requests and 
4,200 incoming requests, 711 involved a single foreign 
jurisdiction, which was not named in the report due to IRS 
confidentiality rules. GAO also noted that the request activity 
was concentrated among a small group of countries, with the ten 
most active countries making roughly 68 percent of the outgoing 
and incoming requests. Those ten countries were also not named 
due to IRS confidentiality rules.
    The GAO report determined that, over the 5-year period, 
foreign jurisdictions made about 300 spontaneous disclosures of 
taxpayer information to the IRS per year, meaning the 
information was provided outside of any automatic or specific 
request process. GAO reported that the IRS made about 10 
spontaneous disclosures of taxpayer information per year to 
other countries. GAO stated those numbers fluctuated widely by 
year.
    In addition to analyzing the number of requests, GAO 
examined how long it took to complete work on the requests. 
Overall, GAO found that most requests took between 50 and 200 
days to complete, although some took much less time and others 
much longer. GAO also found that, on average, the IRS was 17 
percent faster than other countries in completing requests. GAO 
also analyzed the types of information requested, finding that 
corporate records, tax return data, bank records, public 
records, and third-party interviews were the most frequently 
requested.
    One key issue that the Subcommittee asked GAO to examine 
was the extent to which international requests for tax 
information were required to include the names of specific 
taxpayers. GAO reported that, as a general rule, the IRS and 
its tax information exchange partners did not make or respond 
to information requests lacking specific taxpayer names or 
other specific taxpayer identifiers, such as account numbers. 
GAO also reported that the United States had made a recent 
policy change to support information requests that identify a 
specific group of persons under investigation. GAO reported 
that, in January 2011, the United States changed its standard 
tax information exchange agreement to provide that an 
information request was adequate if it contained ``the identity 
of the person or [an] ascertainable group or category of 
persons under examination or investigation.'' GAO noted that 
the United States was working with other nations to adopt a 
similar approach in the internationally accepted model tax 
information exchange agreement.
    The GAO report also commented on the IRS data collection 
efforts with respect to its tax information exchanges with 
foreign jurisdictions. GAO observed that the IRS did not 
consistently collect or analyze performance data, such as the 
type of information requested, whether the information was 
collected successfully, or the views of staff about the 
usefulness of the information received or the effectiveness of 
the process for obtaining it. GAO noted that collecting this 
information could help program managers assess how well the IRS 
is managing the information exchange process, and how to 
strengthen it.
    To improve IRS tax information exchange arrangements, GAO 
recommended that the IRS identify, assemble, and analyze key 
performance data to improve the information exchange program. 
GAO recommended that the IRS collect on a routine basis 
consistent and accurate data on specific tax information 
exchange cases, as well as feedback from program users. The 
report indicated that the IRS concurred with GAO's 
recommendations.

B. Crop Insurance: Savings Would Result from Program Changes and 
        Greater Use of Data Mining (GAO-12-256), March 13, 2012

    In the 111th Congress, the Subcommittee conducted an 
investigation into excessive speculation in U.S. wheat markets, 
which touched in part on the functioning of the Federal crop 
insurance program. In March 2012, in response to a request from 
Subcommittee Ranking Minority Member Coburn, GAO issued a 
report examining ways to reduce Federal crop insurance costs. 
Program costs include subsidies that pay for part of farmers' 
insurance premiums. According to the Congressional Budget 
Office, for fiscal years 2013 through 2022, Federal crop 
insurance program costs--primarily premium subsidies--will 
average $8.9 billion annually. The GAO report determined that, 
if a limit of $40,000 had been applied to individual farmers' 
crop insurance premium subsidies, as it is for other farm 
programs, the Federal Government would have saved up to $1 
billion in crop insurance program costs in 2011. GAO also 
determined that, if premium subsidies had been reduced by 10 
percentage points for all farmers participating in the program, 
as recent studies had proposed, the Federal Government would 
have saved about $1.2 billion in 2011. In addition, GAO 
determined that additional cost savings could be achieved 
through greater use of data mining efforts to prevent and 
detect waste, fraud and abuse in the program.
    The U.S. Department of Agriculture (USDA) administers the 
Federal crop insurance program with private insurance 
companies. In 2011, the program provided about $113 billion in 
Federal crop insurance coverage for over 1 million policies. To 
conduct its study, GAO analyzed USDA data, reviewed economic 
studies, and interviewed USDA officials.
    The GAO report explained that, to analyze possible cost 
savings from limiting premium subsidies, it selected $40,000 as 
an example of a potential subsidy limit on individual farmer 
crop insurance premium subsidies, because it is the limit for 
direct payments, which provide fixed annual payments to farmers 
based on a farm's crop production history. GAO determined that 
if such a limit had been applied in 2011, it would have 
affected up to 3.9 percent of all participating farmers, who 
accounted for about one-third of all premium subsidies and were 
primarily associated with large farms. For example, one of 
those farmers insured crops in eight counties and received 
about $1.3 million in premium subsidies. In addition, GAO 
determined that if premium subsidies been reduced by 10 
percentage points for all farmers participating in the program, 
as recent studies proposed, the Federal Government would have 
saved about $1.2 billion in 2011. GAO also cautioned that a 
decision to limit or reduce premium subsidies would raise other 
considerations, such as the potential effect on the financial 
condition of large farms and on program participation.
    On the issue of whether cost savings could be achieved 
through greater use of data mining tools, the GAO report noted 
that USDA had already been using data mining tools to prevent 
and detect fraud, waste, and abuse in the crop insurance 
program, whether perpetrated by farmers, insurance agents, or 
adjusters, since 2001. GAO explained, for example, that past 
cases had revealed that some farmers were found to have 
harvested a high-yielding crop, hid its sale, and then reported 
a loss to receive an insurance payment. To prevent and detect 
those and other frauds, GAO explained that USDA's Risk 
Management Agency (RMA), which is responsible for overseeing 
the integrity of the crop insurance program, used data mining 
to identify farmers who had received claim payments that were 
higher or more frequent than others in the same area. USDA then 
informed the identified farmers that at least one of their 
fields would be inspected during the coming growing season to 
evaluate the crop. RMA officials told GAO that this action had 
substantially reduced total claims.
    GAO opined that the USDA had not maximized its use of the 
data mining tools, however, largely because of competing 
compliance review priorities. GAO determined, for example, that 
the value of RMA's identifying suspect farmers may have been 
reduced by the fact that USDA's Farm Service Agency (FSA)--
which conducts field inspections for RMA--did not complete all 
such inspections, and neither FSA nor RMA had a process to 
ensure that the results of all inspections were accurately 
reported. GAO noted, for example, that RMA did not obtain field 
inspection results for about 20 percent of identified farmers 
in 2009, and 28 percent in 2010. As a result, not all of the 
farmers RMA identified were subject to a review, increasing the 
likelihood that fraud, waste, or abuse occurred without 
detection.
    GAO determined that not all field inspections were 
completed, in part because FSA State offices were not required 
to monitor the completion of such inspections. In addition, RMA 
generally did not provide insurance companies with FSA 
inspection results when crops were found to be in good 
condition, although USDA's Inspector General had reported this 
information might be important for followup. Furthermore, RMA 
had not directed insurance companies to review the results of 
all completed FSA field inspections before paying claims filed 
after inspections showed a crop was in good condition. As a 
result, GAO found that insurance companies might not have 
information that could help identify claims that should be 
denied.
    To reduce crop insurance program costs, GAO recommended 
that Congress consider limiting premium subsidies for 
individual farmers, reducing subsidies for all farmers, or 
both. GAO also recommended that USDA encourage the completion 
of field inspections to reduce instances of waste, fraud and 
abuse in the crop insurance program. GAO indicated in the 
report that USDA agreed with encouraging the completion of 
field inspections, but not with placing limits on premium 
subsidies. GAO indicated in response that, when farm income was 
approaching record high levels at the same time the Nation 
faced severe fiscal problems, limiting premium subsidies was an 
appropriate area for consideration.

C. Medicaid: Providers in Three States with Unpaid Federal Taxes 
        Received Over $6 Billion in Medicaid Reimbursements (GAO-12-
        857), July 27, 2012

    Since 2004, the Subcommittee has conducted an ongoing 
investigation and series of hearings examining Federal 
contractors that receive taxpayer funds in payment for their 
work, but nevertheless fail to pay their taxes. In 2007, a 
Subcommittee hearing focused on the problem with respect to tax 
delinquent Medicaid providers who are paid in part with Federal 
funds. The 2007 hearing featured a GAO report which disclosed, 
in a review of just seven States, that nearly 30,000 Medicaid 
providers, including doctors, nursing homes, and other medical 
providers, owed unpaid taxes collectively totaling more than $1 
billion. In July 2012, in response to a bipartisan request from 
Subcommittee Chairman Levin and Ranking Minority Member Coburn, 
Finance Committee Chairman Max Baucus and Ranking Minority 
Member Orrin Hatch, and Judiciary Committee Ranking Minority 
Member Charles Grassley, GAO again examined Medicaid providers 
with unpaid taxes, this time in the context of the American 
Recovery and Reinvestment Act of 2009 (ARRA) which had 
increased the Federal share of Medicaid funding provided to the 
States. The GAO report disclosed that about 7,000 Medicaid 
providers in three States, Florida, New York, and Texas, 
received a total of about $6.6 billion in Medicaid 
reimbursements in 2009, while owing over $790 million in unpaid 
Federal taxes.
    Federal law does not currently prohibit health care 
providers with tax debt from enrolling in Medicaid. To 
determine the magnitude of unpaid taxes owed by Medicaid 
providers who received ARRA funding, GAO compared Medicaid 
reimbursement information from the three States to known IRS 
tax debts as of September 30, 2009. The three States were among 
those that received the largest portion of ARRA's increased 
Federal funding of Medicaid.
    The GAO report determined that about 7,000 Medicaid 
providers in the three selected States owed approximately $791 
million in unpaid Federal taxes from calendar year 2009 or 
earlier. GAO also determined that those tax delinquents 
represented about 5.6 percent of all Medicaid providers 
reimbursed by the selected States during 2009. In addition, GAO 
calculated that the 7,000 Medicaid providers with unpaid taxes 
received a total of about $6.6 billion in Medicaid 
reimbursements during 2009, including both ARRA and other 
sources of Medicaid funds. GAO cautioned that the amount of 
unpaid Federal taxes GAO identified was likely understated 
because Internal Revenue Service (IRS) taxpayer data reflected 
only the amount of unpaid taxes either reported on a tax return 
or assessed by IRS through enforcement; it did not include 
entities that did not file tax returns or underreported their 
income.
    The GAO report provided additional detail about 40 
individual Medicaid providers from the three selected States, 
each of whom had at least $100,000 in Federal tax debt. GAO 
determined that those 40 Medicaid providers received a total of 
about $235 million in Medicaid reimbursements (including ARRA 
funds) in 2009, while owing unpaid Federal taxes of about $26 
million through 2010. The amount of unpaid taxes ranged from 
about $100,000 to over $6 million per provider. GAO also 
disclosed that IRS records indicated that two of the providers 
were or had previously been under criminal investigation, and 
that one provider had been caught participating in a medical 
billing fraud.
    The GAO report explained that in the case of most Federal 
contractors with unpaid taxes, the IRS had the authority to 
seize or ``levy'' all or a portion of any Federal payment made 
to them, to satisfy their tax debt and, in some instances, was 
authorized to use an automated process to continuously levy any 
Federal payments made to those delinquent taxpayers. GAO also 
explained that Medicaid reimbursements had never actually been 
subject to a continuous levy, because the IRS had determined 
that Medicaid reimbursements did not qualify as Federal 
payments, since they also included State funds. If the Federal 
levy process could be used, the GAO report estimated that the 
IRS could have collected between $22 million and $330 million 
in the selected States in 2009, from the tax delinquent 
Medicaid providers. States contacted by GAO, however, expressed 
concerns about using continuous levies, given the challenges 
they already encounter with processing one-time IRS levies. The 
States described, for example, problems with reaching IRS 
revenue officers and with the IRS sending levy notices to the 
wrong address.
    To recover funds from Medicaid providers with unpaid taxes, 
GAO recommended that the IRS explore opportunities to enhance 
collection efforts, including through the use of continuous 
levies. The report indicated that the IRS agreed with GAO's 
recommendation.

D. Income Security: Overlapping Disability and Unemployment Benefits 
        Should be Evaluated for Potential Savings (GAO-12-764), July 
        31, 2012

    Since 2009, the Subcommittee has conducted an ongoing 
investigation into waste, fraud, and abuse in Federal 
disability programs. In July 2012, in response to a bipartisan 
request from Subcommittee Chairman Levin and Ranking Minority 
Member Coburn, as well as from Chairman Tom Carper and Ranking 
Minority Member Scott Brown of the Subcommittee on Federal 
Financial Management, Government Information, Federal Services 
and International Security, GAO examined the interaction of 
Federal Disability Insurance (DI) payments which are intended 
to support disabled persons incapable of working at a full-time 
job, and State-operated Unemployment Insurance (UI) payments, 
which are intended to support persons who are ready and willing 
to work. The GAO report disclosed that, in Fiscal Year 2010, 
117,000 individuals received concurrent DI and UI payments 
totaling more than $850 million, and that, under existing 
program authority, such concurrent payment were allowable in 
certain circumstances.
    Both the disability and unemployment insurance programs are 
paid for by money deducted from worker paychecks and sent to DI 
and UI trust funds. The GAO report explained that DI payments 
were made available to workers who were unable to engage in 
``substantial gainful activity,'' due to disabling physical or 
mental impairments. In contrast, UI payments were designed to 
provide temporary cash benefits to eligible workers able to 
work but involuntarily unemployed. The GAO report explained 
that both the DI and UI trust funds faced serious fiscal 
sustainability challenges, which could be relieved in part if 
overlapping DI and UI payments were reduced.
    GAO was asked to determine the extent to which individuals 
across the country received DI and UI benefits concurrently. To 
do so, GAO matched State unemployment files with Social 
Security Administration (SSA) disability files for Fiscal Year 
2010. GAO determined that only a small fraction of the program 
beneficiaries received dual benefits from both programs. In 
Fiscal Year 2010, 10 million individuals received disability 
benefits totaling $122 billion, while 11 million individuals 
received unemployment benefits totaling $156 billion. GAO found 
that individuals receiving benefits from both programs 
accounted for one-third of 1-percent of the benefits paid, 
creating an overlap of substantially less than 1 percent, but 
even that small overlap involved payments totaling $281 million 
from the disability program and $575 million from the 
unemployment insurance program, for a total of $850 million. 
GAO also identified one individual who had received over 
$62,000 in overlapping benefits in a year.
    GAO cautioned that, under certain circumstances, 
individuals may be eligible for concurrent benefit payments due 
to differences in DI and UI eligibility requirements. 
Disability insurance is available to workers who are unable to 
perform ``substantial gainful activity'' due to physical or 
mental impairments expected to last at least 12 months or 
result in death. Regulations have generally defined 
``substantial gainful activity'' to mean an individual with the 
ability to earn an average of over $1,000 a month for a 
calendar year. Put another way, a person whose disability 
prevents them from earning over $1,000 a month is still 
eligible to receive disability benefits even if they perform 
some part-time work. If a disabled person has a part-time job, 
loses that job, and collects unemployment insurance, no Federal 
law currently requires a reduction of their disability payments 
due to their receipt of unemployment benefits.
    State-run unemployment insurance programs temporarily and 
partially replace lost earnings for workers who have lost their 
job through no fault of their own. To collect benefits, an 
individual must be able to perform suitable work when offered. 
While all unemployment insurance programs must conform to broad 
Federal guidelines, specific program eligibility is set on a 
State by State basis and varies widely. The GAO report did not 
identify any State that prohibited the payment of unemployment 
benefits to a person already receiving disability insurance, 
and reported that at least 10 States had enacted laws providing 
that no worker may be considered ineligible for UI benefits due 
to illness or disability occurring after the worker filed a UI 
claim. The result was that States generally allowed a disabled 
person who lost a part-time job to collect unemployment 
benefits, provided that UI deductions had been taken from their 
paychecks. GAO also explained that, while SSA must reduce DI 
benefits for individuals receiving certain other government 
disability benefits, such as worker's compensation, no Federal 
law required or authorized an automatic elimination of 
overlapping DI and UI benefits. The GAO report noted that, as a 
result, neither SSA nor DOL had any procedures to identify 
overlapping payments.
    GAO indicated that reducing or eliminating overlapping 
payments could offer substantial savings to DI and UI programs, 
but noted that actual savings were difficult to estimate since 
the potential costs of establishing mechanisms to do so were 
not readily available. GAO recommended that DOL and SSA work 
together to evaluate overlapping DI and UI cash benefit 
payments and take appropriate action to stop any improper 
payments. GAO also recommended that the agencies evaluate the 
fiscal sustainability of the DI and UI trust funds. GAO 
indicated that DOL and SSA agreed with both recommendations.

E. Border Security: Additional Actions Needed to Strengthen CBP Efforts 
        to Mitigate Risk of Employee Corruption and Misconduct (GAO-13-
        59), December 4, 2012

    Over the years, the Subcommittee has conducted 
investigations into border security issues and corruption 
issues. In December 2012, in response to a request from 
Subcommittee Ranking Minority Member Coburn as well as 
Congressman Michael McCaul, Chairman of the Subcommittee on 
Oversight, Investigations, and Management of the House 
Committee on Homeland Security, GAO prepared a report examining 
efforts by the U.S. Customs and Border Protection (CBP), a 
component of the Department of Homeland Security, to combat 
corruption and ensure the integrity of the CBP workforce.
    CBP is responsible for securing U.S. borders and 
facilitating legal travel and trade. CBP employees have been 
targeted by drug-trafficking and other transnational criminal 
organizations offering bribes to facilitate the illicit 
transport of drugs, aliens, and other contraband across U.S. 
borders, particularly in the southwest. CBP's Office of 
Internal Affairs (IA) is responsible for promoting the 
integrity of CBP's workforce, programs, and operations. Other 
CBP components are responsible for implementing IA integrity 
initiatives. GAO was asked to examine data on arrests of and 
allegations against CBP employees for corruption or misconduct; 
CBP's implementation of integrity-related controls; and CBP's 
strategy to combat corruption. To conduct its study, GAO 
analyzed arrest and allegation data, reviewed integrity-related 
policies and procedures, and interviewed CBP officials in 
headquarters and at four locations along the southwest border.
    The GAO report determined that CBP data indicated that 
arrests of CBP employees for corruption-related activities 
since Fiscal Year 2005 accounted for less than 1 percent of 
CBP's entire workforce per fiscal year. GAO determined that the 
majority of arrests of CBP employees, from Fiscal Year 2005 
through Fiscal Year 2012, were related to misconduct, 
identifying 2,170 reported incidents of arrests for such 
misconduct as domestic violence or driving under the influence. 
GAO also determined that a total of 144 current or former CBP 
employees had been arrested or indicted for corruption-related 
activities, such as the smuggling of aliens and drugs, of whom 
125 had been convicted as of October 2012. In addition, GAO 
determined that the majority of allegations against CBP 
employees since Fiscal Year 2006 occurred at locations along 
the southwest border. GAO reported that CBP officials indicated 
they were concerned about the negative impact that those cases 
had on agency-wide integrity.
    The GAO report also described CBP's integrity-related 
controls. GAO explained that CBP employed screening tools to 
mitigate the risk of employee corruption and misconduct for 
both applicants--using such tools as background investigations 
and polygraph examinations--and incumbent CBP officers and 
Border Patrol agents--using such tools as random drug tests and 
periodic reinvestigations. GAO reported, however, that CBP's 
Office of Internal Affairs (IA) did not have a mechanism to 
maintain and track data on which of its screening tools 
provided information used to determine which applicants were 
not suitable for hire. GAO indicated that maintaining and 
tracking such data was consistent with internal control 
standards and could better position CBP IA to gauge the 
relative effectiveness of its screening tools.
    GAO also reported that CBP IA was considering requiring 
periodic polygraphs for incumbent officers and agents; however, 
it had not yet fully assessed the feasibility of expanding the 
program. GAO explained that CBP had not yet fully assessed, for 
example, the costs of implementing polygraph examinations on 
incumbent officers and agents, including the costs for 
additional supervisors and adjudicators, or assessed the 
tradeoffs among periodic tests at various frequencies. GAO 
indicated that a feasibility assessment of program expansion 
could better position CBP to determine whether and how to best 
achieve its goal of strengthening integrity-related controls 
for officers and agents. GAO noted further that CBP IA had not 
consistently conducted monthly quality assurance reviews of its 
adjudications since 2008, as required by internal policies, to 
help ensure that adjudicators are following procedures in 
evaluating the results of the preemployment and periodic 
background investigations. GAO reported that CBP IA officials 
indicated they had performed some of the required checks since 
2008, but could not provide data on how many checks were 
conducted. GAO reported that, without these quality assurance 
checks, it was difficult for CBP IA to determine the extent to 
which deficiencies, if any, existed in the adjudication 
process.
    The GAO report determined that CBP did not have in place an 
integrity strategy, as called for in its Fiscal Year 2009-2014 
Strategic Plan. GAO reported that, during the course of the 
review, CBP IA began drafting a strategy, but CBP IA's 
Assistant Commissioner indicated that the agency had not yet 
set target timelines for completing or implementing the 
strategy. GAO reported that the Assistant Commissioner also 
stated that there had been significant cultural resistance 
among some CBP components to acknowledging CBP IA's authority 
to oversee all integrity-related activities. GAO indicated that 
setting target timelines would be consistent with program 
management standards and could help CBP monitor progress made 
toward the development and implementation of an agency-wide 
integrity strategy.
    The GAO report recommended, among other measures, that CBP 
track and maintain data on sources of information used to 
determine which applicants were unsuitable for hire, assess the 
feasibility of expanding the polygraph program to incumbent 
officers and agents, consistently conduct quality assurance 
reviews, and set timelines for completing and implementing a 
comprehensive integrity strategy. The report indicated that DHS 
concurred with the recommendations and reported taking steps to 
address them.
 AD HOC SUBCOMMITTEE ON DISASTER RECOVERY AND INTERGOVERNMENTAL AFFAIRS


                   Chairman: Mark L. Pryor, Chairman


                   Ranking Minority Member: Rand Paul


                              I. HEARINGS


1. Gulf Coast Recovery: An Examination of Claims and Social Services in 
        the Aftermath of the Deepwater Horizon Oil Spill--January 27, 
        2011

    The purpose of the hearing was to measure human recovery 
from the oil spill by highlighting progress made, work 
remaining, and any deficiencies in the current processes 
designed to make Gulf coast residents whole again. The Gulf 
Coast Claims Facility (GCCF) was working with nearly 500,000 
individuals and businesses to replace lost wages and revenue, 
while BP and NGOs are attempting to provide for unmet needs 
like feeding and utility assistance, case management, and 
mental health services. This hearing was intended to continue a 
constructive dialogue between the Federal and State 
governments, GCCF, BP, and NGOs involved in providing claims 
assistance and social services, and to present critiques, which 
will hopefully spur greater coordination and a more streamlined 
and cohesive effort.
    Witnesses: Kenneth R. Feinberg, Administrator, Gulf Coast 
Claims Facility; Craig Bennett, Director, National Pollution 
Funds Center, U.S. Coast Guard; Ve Nguyen, Member, United 
Louisiana Vietnamese American Fisherfolks; Rear Admiral Eric B. 
Broderick, D.D.S., M.P.H., Deputy Administrator, Substance 
Abuse and Mental Health Services Administration, U.S. 
Department of Health and Human Services; Albert L. Keller, 
Executive Vice President, Gulf Coast Restoration Organization, 
BP America's Gulf Coast Restoration Organization; Tom Costanza, 
Executive Director, Office of Justice and Peace, Catholic 
Charities Archdiocese of New Orleans; and Lori R. West, Gulf 
Region Director of International Relief and Development and 
Current Chair of South Mississippi Voluntary Organizations 
Active in Disaster.

2. Preventing Improperly Paid Federal Assistance in the Aftermath of 
        Disasters--March 17, 2011

    Witnesses: Elizabeth Zimmerman, Deputy Associate 
Administrator, Office of Response and Recovery, Federal 
Emergency Management Agency, U.S. Department of Homeland 
Security; Michael A. Chodos, Deputy General Counsel, U.S. Small 
Business Administration; Peggy Gustafson, Inspector General, 
U.S. Small Business Administration; and Matt Jadacki, Assistant 
Inspector General, Emergency Management Oversight, Office of 
Inspector General, U.S. Department of Homeland Security.
    The purpose of this hearing was to examine the factors that 
influence improper payments in Federal agencies' disaster 
assistance programs and the ability of agencies to identify 
improper payments and recoup funds from recipients of 
assistance. The hearing examined how agencies with a role in 
disaster response and recovery are improving their abilities to 
better track funds, identify improper payments, and implement 
plans to recoup funds. The Subcommittee discussed whether 
current standards for identification and recoupment of payments 
are adequate.
    Ms. Zimmerman addressed FEMA's plans for recouping $643 
million in improper disaster assistance payments as identified 
by a DHS OIG report issued in December 2010. Mr. Chodos 
discussed the SBA's methods for determining victim eligibility 
for disaster assistance, as well as the methods used to 
determine the amount and type of assistance. Ms. Gustafson 
described the audit report issued by SBA OIG on February 10, 
2011, titled ``Processing of Insurance Recovery Checks at the 
Disaster Loan Servicing Centers.'' She also highlighted the 
findings and recommendations of this audit regarding the SBA's 
protocols for processing insurance checks, identifying improper 
payments and recovering duplicate benefits. Mr. Jadacki 
addressed the December 2010 advisory report conducted by DHS 
OIG, which addressed recoupment of improper disaster assistance 
payments. He also testified on the factors contributing to the 
improper payments, how the improperly paid funds were 
identified, and OIG's recommendations for recouping these 
funds.

3. Exploring Drug Gangs' Ever-Evolving Tactics to Penetrate the Border 
        and the Federal Government's Ability to Stop Them--March 31, 
        2011

    Witnesses: Donna Bucella, Assistant Commissioner, Office of 
Intelligence and Operations, U.S. Customs and Border 
Protection, U.S. Department of Homeland Security; James A. 
Dinkins, Executive Associate Director, U.S. Immigration and 
Customs Enforcement, U.S. Department of Homeland Security; 
Thomas H. Harrigan, Assistant Administrator and Chief of 
Operations, Drug Enforcement Administration, U.S. Department of 
Justice; Frances Flener, Arkansas State Drug Director; L. Kent 
Bitsko, Executive Director, Nevada High Intensity Drug 
Trafficking Area
    The purpose of this hearing was to examine the new methods 
being employed by drug trafficking organizations (DTOs) to 
penetrate the southwest border of the United States, and 
efforts of the Department of Homeland Security (DHS) and other 
law enforcement agencies to stop them. Mexican DTOs are 
continuing to strengthen their relationships with U.S-based 
gangs for the purpose of expanding their influence over 
domestic drug distribution. Recent articles have detailed newer 
and more creative methods of smuggling drugs, weapons, and 
people across the border. These methods include using fake 
border patrol and Mexican law enforcement or military vehicles.
    All of the witnesses testified on the variety of new 
methods and their organizations' ongoing efforts to counter 
them. Each witness addressed cooperative efforts between their 
organization and other law enforcement entities on the Federal, 
State, and local levels with responsibility in this area.

4. Understanding the Power of Social Media as a Communications Tool in 
        the Aftermath of Disasters--May 5, 2011

    Witnesses: Hon. W. Craig Fugate, Administrator, Federal 
Emergency Management Agency, U.S. Department of Homeland 
Security; Renee Preslar, Public Information Officer, Arkansas 
Department of Emergency Management; Suzy DeFrancis, Chief 
Public Affairs Officer, American Red Cross; Shona L. Brown, 
Senior Vice President, Google.org; and Heather Blanchard, Co-
Founder, CrisisCommons
    The purpose of this hearing was to explore ways the Federal 
Government can work with social media companies to collect and 
distribute critical information in the wake of disasters. Over 
the past 5 years, the use of social media has increased 
dramatically. The use of social media outlets to post real-time 
video and photographic footage, updates on individuals' 
whereabouts and conditions, and firsthand commentary on the 
impact of a given disaster are all examples of how these tools 
are establishing a completely new form of global communication.
    All of the witnesses discussed ways their organization 
works with social media companies to fully utilize and 
distribute critical information. Additionally, they assessed 
the Federal Government's role in facilitating these 
partnerships and provided suggestions for better utilization of 
the public sector's tools.

5. Border Corruption: Assessing Customs and Border Protection and the 
        Department of Homeland Security Inspector General's Office 
        Collaboration in the Fight to Prevent Corruption--June 9, 2011

    Witnesses: Hon. Alan D. Bersin, Commissioner, U.S. Customs 
and Border Protection, U.S. Department of Homeland Security, 
and Charles K. Edwards, Acting Inspector General, U.S. 
Department of Homeland Security
    The purpose of this hearing was to discuss CBP's efforts to 
detect and eliminate corruption within the agency. The hearing 
was a follow up to a March 2010 hearing when the Subcommittee 
heard from Federal officials regarding corruption issues within 
CBP and other border agencies. Many of the cases appeared to be 
tied to deliberate efforts by drug trade organizations to 
corrupt law enforcement personnel and other relevant Federal 
and State employees in order to improve their ability to 
counter increasingly effective border control measures taken by 
the United States.
    Both witnesses discussed the stated role of CBP in 
monitoring, investigating, and disciplining CBP agents 
suspected of corrupt or other problematic activities. 
Additionally, the witnesses addressed the role of CBP Office of 
Internal Affairs (CBPIA) in contrast to the role of DHS IG in 
detecting and investigating corruption. Lastly, they testified 
about the problems between CBPIA and DHS OIG in detail and 
provided information on solutions that are underway to clarify 
each entity's role, and make their efforts more collaborative.

6. 2011 Spring Storms: Picking Up the Pieces and Building Back 
        Stronger--July 19, 2011

    Witnesses: Hon. Richard Serino, Deputy Administrator, 
Federal Emergency Management Agency, U.S. Department of 
Homeland Security; Hon. Christopher Masingill, Federal Co-
Chairman, Delta Regional Authority; David Maxwell, Director, 
Arkansas Department of Emergency Management; Thomas M. ``Mike'' 
Womack, Executive Director, Mississippi Emergency Management 
Agency; and Brian ``Rob'' O'Brian, III, President, Joplin Area 
Chamber of Commerce, Missouri.
    The purpose of this hearing was to examine response and 
recovery efforts in the aftermath of this spring's tornadoes, 
storms and floods in the South. The Subcommittee assessed the 
progress being made in recovering from these disasters and 
identified ongoing challenges and lessons learned in the 
recovery effort. The Subcommittee examined the impact of these 
disasters on affected communities and economies and heard from 
State and local witnesses about specific ongoing recovery 
needs. The hearing also focused on preparedness and mitigation 
efforts at the Federal, State and local levels to prevent 
repetitive losses in future disasters.
    Deputy Administrator Serino discussed FEMA's progress in 
responding to and recovering from major disasters along with 
addressing whether the current Federal disaster response and 
recovery framework has the necessary flexibility to meet the 
unique recovery needs of the impacted regions. Mr. Maxwell 
testified about his experience in responding to and recovering 
from the tornadoes, storms, and floods that have impacted 
Arkansas over the past several months. Mr. Womack addressed his 
experience in responding to and recovering from the storms and 
floods that have impacted Mississippi over the past several 
months. Mr. O'Brian described the impact of the May 22, 2011 
tornado on Joplin's communities, small businesses, and key 
local and regional economies.

7. Accountability at FEMA: Is Quality Job #1?--October 20, 2011

    Witnesses: Hon. Richard Serino, Deputy Administrator, 
Federal Emergency Management Agency, U.S. Department of 
Homeland Security; Matt Jadacki, Assistant Inspector General, 
Emergency Management Oversight, Office of Inspector General, 
U.S. Department of Homeland Security; Hon. Maurice McTigue, 
Vice President and Distinguished Visiting Scholar, The Mercatus 
Center, George Mason University; and Craig Killough, Vice 
President, Project Management Institute.
    The purpose of this hearing was to examine front-end 
quality controls and business practices at FEMA that reduce 
errors, mitigate waste, fraud, and abuse, and ensure greater 
efficiency in the agency's disaster response and recovery 
activities. The Subcommittee assessed FEMA's efforts to and 
challenges in prioritizing and improving internal management 
controls across the agency. The Subcommittee also examined best 
practices already in use by other Federal agencies and analyzed 
how these could be applied in FEMA programs. This hearing was a 
follow-up to a March 2011 Subcommittee hearing on FEMA's 
efforts to recoup $643 million in improperly paid disaster 
assistance in the aftermath of Hurricanes Katrina and Rita. The 
recoupment hearing raised concerns about the agency's internal 
controls, specifically regarding its ability to identify and 
prevent the errors that resulted in unnecessary and wasteful 
overpayments.
    Deputy Administrator Serino discussed steps FEMA took to 
improve accountability and performance in its disaster-related 
programs; the agency's efforts to emphasize the prevention of 
waste, fraud, and abuse in these programs; and the 
incorporation of lessons learned from past disasters. Mr. 
Jadacki summarized the DHS Inspector General's recent audits 
and analyses of FEMA's disaster-related programs. He also 
discussed his annual assessment of FEMA management challenges 
and the extent to which FEMA is emphasizing the prevention of 
waste, fraud and abuse in these programs, especially on the 
front end of its disaster assistance processes and programs. 
Mr. McTigue and Mr. Killough both assessed FEMA's ability to 
improve accountability and performance in its disaster related 
programs, based on their past analyses of the agency. They also 
discussed their perspectives on improving program management 
efficiency and effectiveness.

8. Joint Hearing with the Subcommittee on Oversight of Government 
        Management, the Federal Workforce, and the District of 
        Columbia: From Earthquakes to Terrorist Attacks: Is the 
        National Capital Region Prepared for the Next Disaster?--
        December 7, 2012

    Witnesses: Steward D. Beckham, Director, Office of National 
Capital Region Coordination, Federal Emergency Management 
Agency, U.S. Department of Homeland Security; Dean S. Hunter, 
Deputy Director, Facilities, Security, and Contracting, U.S. 
Office of Personnel Management; William O. Jenkins, 
Jr.,Director, Homeland Security and Justice Team, U.S. 
Government Accountability Office; Richard Muth, Executive 
Director, Maryland Emergency Management Agency, State of 
Maryland; Hon. Terrie L. Suit, Secretary of Veterans Affairs 
and Homeland Security, Commonwealth of Virginia; Paul A. 
Quander, Jr., Deputy Mayor for Public Safety and Justice, 
District of Columbia
    The purpose of this hearing was to examine the preparedness 
of the National Capital Region (NRC) to respond to both natural 
and manmade disasters. The hearing looked specifically at NCR 
strategic planning, communication capabilities among key 
stakeholders, and areas to improve efficiencies and 
effectiveness in leadership, coordination, and decisionmaking 
authority in a crisis.
    Mr. Beckham discussed the role of the ONCRC and steps it 
has taken to fulfill this role and steps the Department has and 
is taking to effectively coordinate and communicate with key 
stakeholders relating to emergency preparedness and response 
for the NCR. Mr. Hunter addressed OPM's DC area dismissal and 
closure policies for severe weather situations or emergencies, 
including the soon-to-be released revised policy as well as 
guidance for specific severe weather situations and 
emergencies, to the Federal workforce. Mr. Jenkins spoke on the 
preliminary assessment of the NCR's 2010 Homeland Security 
Strategic Plan and ways to strengthen the plan. Mr. Muth, Ms. 
Suit, and Mr. Quander all discussed the efforts their State has 
taken to effectively coordinate and communicate with NCR 
stakeholders relating to emergency preparedness and response 
for the NCR. Those three witnesses also addressed steps their 
States are taking to participate in NCR strategic planning, 
training, and exercises.

                            II. LEGISLATION

    (1) S.477--Government Excess Prevention Act of 2011--
Directs the Director of the Office of Management and Budget 
(OMB) to coordinate with federal agencies to: (1) determine 
which government publications could be published on government 
websites and devise a strategy to reduce government printing 
costs over the 10-year period beginning with Fiscal Year 2012, 
(2) issue on OMB's public website the results of a cost-benefit 
analysis for monitoring government printing, and (3) establish 
guidelines on employee printing and for disclosing the cost of 
printing government publications.
    Imposes limitations on government travel and subsistence 
expenses, except for expenses incurred for threatened law 
enforcement personnel and for other expenses related to 
national security or public safety.
    Rescinds in Fiscal Year 2011 20% of the funding for the 
acquisition of new vehicles for the Federal fleet by the 
General Services Administration (GSA). Imposes limitations on 
such funding in Fiscal Year 2012 and subsequent fiscal years.
    On March 3, 2011 it was referred to Senate committee and 
was read twice and referred to the Committee on Homeland 
Security and Governmental Affairs.
    (2) S. 479--Federal Real Property Disposal Enhancement Act 
of 2011--Requires the Administrator of the General Services 
Administration (GSA) to: (1) issue guidance for federal agency 
real property plans, including recommendations on how to 
identify and dispose of excess properties, evaluate disposal 
costs and benefits, and prioritize disposal decisions based on 
agency missions and anticipated future need for holdings; (2) 
report to specified congressional committees annually for five 
years after 2011 on agency efforts to reduce their real 
property assets; and (3) assist agencies in the identification 
and disposal of excess real property. Sets forth agency duties 
with respect to its properties, including maintaining adequate 
inventory controls and reporting excess property to the 
Administrator.
    Includes among the amounts the Administrator is authorized 
to obligate from proceeds from the disposition of excess real 
property: (1) amounts to pay the costs related to identifying 
and preparing properties to be reported excess by another 
agency; and (2) amounts to pay the costs associated with the 
reversion, custody, and disposal of reverted real property. 
Revises requirements for federal agency retention of proceeds 
from the transfer or sale of excess real property.
    Provides that requirements under the McKinney Vento 
Homeless Assistance Act for the use of public buildings and 
real property to assist the homeless shall not apply in Fiscal 
Year 2012 and Fiscal Year 2013 to certain non-excess federal 
buildings or real property selected for demolition.
    On March 3, 2011 it was referred to Senate committee and 
was read twice and referred to the Committee on Homeland 
Security and Governmental Affairs.
    (3) S. 792--Disaster Assistance Recoupment Fairness Act of 
2011--Disaster Assistance Recoupment Fairness Act of 2011--
Authorizes the Administrator of the Federal Emergency 
Management Agency (FEMA) to waive a debt owed to the United 
States relating to federal assistance provided under the Robert 
T. Stafford Disaster Relief and Emergency Assistance Act to 
individuals and households in relation to a major disaster 
declared by the President during the period of August 28, 2005-
December 31, 2010, if: (1) such assistance was distributed 
based on an error by FEMA, (2) there was no fault on behalf of 
the debtor, and (3) the collection of the debt would be against 
equity and good conscience. Prohibits the Administrator from 
waiving such a debt that involves fraud, the presentation of a 
false claim, or misrepresentation by the debtor or any party 
having an interest in the claim.
    Directs the Inspector General of the Department of Homeland 
Security (DHS), at 3-month intervals until 18 months after this 
Act's enactment, to submit a report that assesses the cost-
effectiveness of FEMA's efforts to recoup improper payments 
under the individuals and households program under such Act.
    On July 31, 2012 it was placed on Senate Legislative 
Calendar under General Orders. Calendar No. 478.
    (4) S. 568--Strengthening Community Safety Act of 2011--
Strengthening Community Safety Act of 2011--Amends the Homeland 
Security Act of 2002 to authorize the Administrator of the 
Federal Emergency Management Agency (FEMA) to make a grant to 
an eligible first responder agency for the additional costs 
incurred as a direct result of one or more of its employees who 
are reservists being placed on active duty. Defines ``eligible 
first responder agency'' as one for which the cost of personnel 
has increased by not less than 5% as a direct result of such 
employees being placed on active duty and which is not a for-
profit organization.
    Prohibits the Administrator from making a grant for costs 
relating to an employee being placed on active duty if federal 
funds are used for that employee's pay or benefits. Limits the 
total amount of grants made to an eligible first responder 
agency in any fiscal year to $100,000. Terminates the 
Administrator's authority to make grants three years after this 
Act's enactment.
    Authorizes the use of grant funds for: (1) pay or benefits 
for an individual hired to replace such an employee that are in 
addition to any pay and benefits that would have been provided 
to the deployed employee, (2) overtime expenses for an 
individual who performs tasks that would have been performed by 
such an employee, and (3) the costs associated with filling a 
vacancy created by an employee being placed on active duty. 
Allows a recipient to use grant funds to cover expenses 
incurred beginning 90 days before deployment until the date the 
employee returns to fully paid employment status.
    Amends the Implementing Recommendations of the 9/11 
Commission Act of 2007 to reduce funding for Fiscal Year 2011 
for grants to private operators providing transportation by an 
over-the-road bus for security improvements.
    On March 14, 2011 it was referred to Senate committee and 
was read twice and referred to the Committee on Homeland 
Security and Governmental Affairs.
    (5) S. 1418--Emergency Managements Assistance Compact of 
2011--Amends the Post-Katrina Emergency Management Reform Act 
of 2006 to authorize the use of Emergency Management Compact 
grants to: (1) educate emergency response providers by offering 
training materials and courses relating to the Compact; (2) 
conduct exercises regarding deployments under the Compact and 
related procedures; (3) establish a system for tracking 
resources deployed under the Compact; and (4) conduct after-
action assessments, prepare reports, and carry out 
recommendations in response to large-scale activations, as 
determined appropriate by Compact administrators.
    Authorizes appropriations for Compact grants for Fiscal 
Year 2012-Fiscal Year 2016.
    On July 26, 2011 it was referred to Senate committee and 
read twice and referred to the Committee on Homeland Security 
and Governmental Affairs.

                            III. GAO REPORTS

    (1) GAO-11-839--Hurricanes Katrina and Rita: Temporary 
Emergency Impact Aid Provided Education Support for Displaced 
Students--09/07/2011.
    (2) GAO-11-605--Social Media: Federal Agencies Need 
Politics and Procedures for Managing and Protecting Information 
They Access and Disseminate--06/28/2011.
        ACTIVITIES OF THE SUBCOMMITTEE ON CONTRACTING OVERSIGHT


                   Chairman: Claire McCaskill (D-MO)


              Ranking Minority Member: Rob Portman (R-OH)


                              I. AUTHORITY

    The Subcommittee on Contracting Oversight has broad 
oversight authority over all aspects of Federal contracting. 
The Subcommittee was created as an Ad Hoc Subcommittee for a 
limited term to expire at the conclusion of the 112th Congress.

                              II. ACTIVITY

    During the 112th Congress, the Subcommittee on Contracting 
Oversight held 10 hearings or roundtables, authorized 24 
investigations, and introduced, or joined as original co-
sponsor, 9 related pieces of legislation.
    The following is a summary of the activities of the 
Subcommittee organized by topic.

                           A. Accountability

    The Subcommittee continued its activities to bolster 
accountability for Federal contractors.

1. Investigation: Contracts Registered at Thomes Avenue, Cheyenne, 
        Wyoming

    On September 21, 2011, Chairman McCaskill sent letters to 
Federal contractors registered at 2170 Thomes Avenue in 
Cheyenne, Wyoming. The Subcommittee received information that 
the address served as the corporate address of more than 2,000 
companies, some of which appear to be shell companies used to 
obscure the identity of their beneficial owners. Specifically, 
the letters requested that the companies provide information 
regarding their principle place of business, their U.S. and 
foreign locations, and the names of all individuals and 
companies with actual or effective ownership or control of the 
company, in addition to their decision to list 2710 Thomes 
Avenue as their business in a Federal Government contracting 
database.

2. Investigation: General Services Administration (GSA) Bonuses

    On April 10, 2012, Chairman McCaskill sent a letter to the 
Acting Administrator of the General Services Administration 
(GSA) requesting information about the management and oversight 
of contracts by GSA's public buildings service. The GSA 
Inspector General issued a report on April 2, 2012 which found 
that the agency spent more than $822,000 to plan and hold a 
conference for approximately 300 GSA employees in Las Vegas, 
Nevada, and called GSA's spending ``excessive and wasteful.'' 
On April 6, 2012, the Inspector General released a second 
report finding that GSA spent more than $430,000 on an employee 
incentive program in violation of regulations. Individuals 
named in both reports received substantial cash bonuses for 
their performance in 2010 and 2011.
    Based on these findings, Chairman McCaskill asked GSA to 
provide information about the names and amount of bonuses 
received by GSA officials referenced in the Inspector General's 
reports. The information provided in GSA's response revealed 
that from 2008 through May 2012, the agency awarded 
approximately $1.1 million in bonuses to 84 individuals who 
were the subjects of investigation by the Inspector General. On 
May 23, 2012, Chairman McCaskill sent a letter to the Director 
of the Office of Personnel Management to provide information 
regarding the total number and amount of all bonuses awarded at 
each Federal agency from 2008 to 2011.

                     B. Alaska Native Corporations

    The Subcommittee continued its oversight of Alaska Native 
Corporations. On September 16, 2011, Chairman McCaskill 
requested by letter that the National Aeronautics and Space 
Administration (NASA) initiate a formal review of a 
noncompetitive contract to Arctic Slope Corporation Research 
and Technical Solutions (ASRC) to perform required technical 
support and engineering studies. The letter specifically 
requested that the agency review that (1) NASA decided to award 
the contract as a noncompetitive letter contract even though an 
acquisition plan was in place over a month prior to award, (2) 
the contract was awarded as a cost-plus-fixed-fee type contract 
despite having 10 years of cost history, and (3) NASA staff 
considered the past performance of the company when deciding to 
award the contract, a practice forbidden under the Federal 
Acquisition Regulation. NASA staff stated that ASRC assured 
NASA officials that incumbent personnel for ASRC Management 
Services, a subsidiary of ASRC and the previous contract 
holder, would perform the new contract awarded to ASRC.

                      C. Administration Oversight

    The Subcommittee continued its oversight of the Obama 
Administration's management and oversight of Federal 
contracting activities.

1. Investigation: Federal Contracting Databases

    On January 31, 2011, Chairman McCaskill sent a letter to 
the Comptroller General of the Government Accountability Office 
(GAO) to request a review of the Integrated Acquisition 
Environment (IAE). GAO issued its final report (GAO-12-429) in 
March 2012. GAO found that although GSA had made some progress 
in developing the system, the costs had increased significantly 
and the development schedule has been delayed by almost 2 
years.
    On July 15, 2011, Chairman McCaskill sent a letter to the 
Administrator of the Office of Federal Procurement Policy to 
request information regarding the Federal Awardee Performance 
Integrity and Information System (FAPIIS). FAPIIS improves the 
transparency and accountability of the Federal procurement 
process by creating a single, searchable database of contractor 
misconduct. However, FAPIIS may have a system limitation which 
could prevent it from functioning properly, causing FAPIIS to 
fail to be in compliance with its legal requirements. The 
Subcommittee met with the Office of Federal Procurement Policy 
staff and determined appropriate next steps.

2. Investigation: Office of Information Programs and Services

    On December 6, 2012, Chairman McCaskill sent a letter to 
the Under Secretary for Management for the State Department 
requesting information regarding the State Department's 
procedures for responding to congressional requests. In 
September 2012, the State Department Office of Inspector 
General released a report raising serious concerns about the 
management of the Office of Information Programs and Services 
that impeded IPS's ability to carry out its responsibilities in 
an efficient and effective manner. The letter specifically 
requested information about the agency's progress in addressing 
the problems raised in the report, and also how problems 
associated with records management have impacted the agency's 
ability to respond to public and congressional requests for 
information.

3. Investigation: Air Traffic Controller Optimum Training Solution 
        (ATCOTS) Contract

    On June 22, 2012, Chairman McCaskill sent a letter to the 
Acting Administrator of FAA to request information regarding 
the Air Traffic Controller Optimum Training Solution (ATCOTS) 
contract. In September 2008, the FAA awarded the ATCOTS 
contract to Raytheon to train new and existing air traffic 
controllers and to help the FAA improve controller training. 
However, problems were found in the contract for the ATCOTS 
contract, including significant cost overruns, poor procurement 
practices, and lack of effective contract oversight. Because of 
these cost overruns, the FAA may have planned to exercise the 
first 3-year option period earlier than anticipated, without 
addressing need to update cost estimates, define training 
requirements, and develop and implement appropriate performance 
measure. Chairman McCaskill asked the agency to provide 
information regarding the future of the ATCOTS contract, as 
well as information regarding the award and incentive fees 
received by Raytheon under the ATCOTS contract. The 
Subcommittee met with FAA staff and Raytheon staff and 
determined appropriate next steps.

4. Investigation: Space and Naval Warfare Systems Command (SPAWAR)

    On December 7, 2012, Chairman McCaskill sent a letter to 
the Chief of Naval Operations for the U.S. Navy regarding the 
Space and Naval Warfare Systems Command (SPAWAR), which 
provides contract management and oversight services to numerous 
Department of Defense Agencies, requesting information 
regarding whether SPAWAR was carrying out its management 
obligations in a manner consistent with Federal procurement 
standards and the best interests of the taxpayer. Chairman 
McCaskill received information that SPAWAR had a record of 
inadequate performance for Service Academy Medical Exams, and a 
second contract for a Defense Department Medical Examination 
Review Board (MERB) database was behind schedule. The letter 
specifically requested information related to SSC Lant 
Inspector General's report on the Smart/Jones building project 
and all reports, audits and investigations relating to SPAAR's 
contract management for the last 2 years.

5. Investigation: Lifeline

    On February 13, 2012, Chairman McCaskill sent a letter to 
the Chairman of the Federal Communications Commission (FCC) to 
request information about contracts related to Lifeline, the 
program that provides discounted landline services to qualified 
low-income customers. Specifically, the letter asked for 
information about the number, value, and scope of agreements 
between the FCC and program administrators as well as eligible 
telecommunications carriers.

                        D. Afghanistan and Iraq

    The Subcommittee held two hearings and continued its 
ongoing oversight of contracts in Iraq and Afghanistan. The 
hearings focused on the management and oversight of 
reconstruction contracts in Afghanistan and proposed 
legislation to improve contracting in contingencies.

1. Afghanistan Reconstruction Contracts: Lessons Learned and Ongoing 
        Problems (June 30, 2011)

    Witnesses: Larry D. Walker, President, The Louis Berger 
Group, Inc.; Wahid Hakki, Chief Executive Officer, Contrack 
International, Inc.; William M. Solis, Director, Defense 
Capabilities and Management, Government Accountability Office 
(GAO); David S. Sedney, Deputy Assistant Secretary of Defense 
for Afghanistan, Pakistan and Central Asia, Office of the 
Assistance Secretary of Defense for Asian and Pacific Security 
Affairs, Defense Department; Kim D. Denver, Deputy Assistant 
Secretary of the Army for Procurement, U.S. Army; J. Alexander 
Thier, Assistant to the Administrator and Director, Office of 
Afghanistan and Pakistan Affairs, U.S. Agency for International 
Development (USAID).
    Overview: The hearing assessed the management and oversight 
of reconstruction contracts in Afghanistan. In particular, the 
hearing focused on the extent to which Defense Department and 
USAID have incorporated and institutionalized the lessons 
learned since the beginning of the wars in Afghanistan and 
Iraq. The hearing also provided an opportunity to review 
findings from GAO regarding Defense Department's management and 
oversight of reconstruction contracts. This hearing was the 
fifth in a planned series of hearings covering actual and 
potential waste, fraud, and abuse in Afghanistan contracts.

1. The Comprehensive Contingency Contracting Reform Act of 2012 (S. 
        2139) (April 17, 2012)

    Witnesses: Senator Jim Webb (D-VA); Richard T. Ginman, 
Director, Defense Procurement and Acquisition Policy, 
Department of Defense (Defense Department); Hon. Patrick F. 
Kennedy, Under Secretary for Management, Department of State 
(DOS); Angelique M. Crumbly, Acting Assistant to the 
Administrator, Bureau for Management, U.S. Agency for 
International Development (USAID); Lynne M. Halbrooks, Acting 
Inspector General, Defense Department; Harold W. Geisel, Deputy 
Inspector General, DOS; Michael Carroll, Acting Inspector 
General, USAID.
    Overview: The hearing reviewed the Comprehensive 
Contingency Contracting Reform Act of 2012 (S. 2139). The 
hearing examined how S. 2139 remedies systemic problems in 
contingency contracting. The hearing also provided an 
opportunity to discuss what additional steps, if any, may be 
required to fully address findings in prior hearings and 
investigations by the Commission, Congress, and others 
regarding contracting in overseas military contingencies.

2. Investigation: U.S. Embassy Guard Contracts

    The Subcommittee continued its ongoing investigation of 
contracts for guard services at U.S. embassies. On March 14, 
2011, Chairman McCaskill sent a letter to the Deputy Inspector 
General of the Department of State requesting information 
regarding the State Department's award of contracts for guard 
services at U.S. embassies, including the U.S. Embassy in 
Kabul, Afghanistan.
    On February 10, 2012, Chairman McCaskill sent a letter to 
the Under Secretary for Management at the State Department 
requesting additional information regarding the award, 
management, and oversight of the World Protective Services 
contract for security services in high-risk areas.

3. Investigation: LOGCAP IV Contract

    The Subcommittee continued its oversight of the Defense 
Department's Logistics Civil Augmentation Program (LOGCAP) 
contract for logistics and base operations support. On June 24, 
2011, Chairman McCaskill sent a letter to the Secretary of 
Defense to request information regarding the Department of 
Defense's upcoming award of a new task order for base life 
support services to support the Department of State in Iraq 
under the LOGCAP IV contract. Chairman McCaskill raised 
concerns regarding the Defense Department's management and 
oversight of the LOGCAP contract in Iraq, particularly in light 
of the upcoming transition of some responsibilities to the 
State Department.

4. Investigation: Justice Sector Support Program (JSSP)

    On June 24, 2011, Chairman McCaskill sent a letter to the 
Under Secretary for Management at the State Department to 
request information regarding the Justice Sector Support 
Program (JSSP) contract, awarded to Pacific Architects and 
Engineers, a former subsidiary of Lockheed Martin, from 
solicitation until October 1, 2010. Chairman McCaskill sent a 
second letter on September 16, 2011.

5. Investigation: Special Inspector General for Afghanistan 
        Reconstruction (SIGAR)

    On July 22, 2011, Chairman McCaskill sent letters to the 
Secretary of Defense, Secretary of State, and the Ambassador to 
Afghanistan regarding the response of the Department of Defense 
(Defense Department), the Department of State (State 
Department), and the Embassy to a 2011 audit report from the 
Special Inspector General for Afghanistan Reconstruction 
(SIGAR). The report, titled, ``Limited Interagency Coordination 
and Insufficient Controls over U.S Funds in Afghanistan Hamper 
U.S. Efforts to Develop the Afghan Financial Sector and 
Safeguard U.S. Cash,'' found that U.S. agencies' continued 
failure to coordinate their actions has hampered efforts to 
assist the Afghan government and Afghanistan's central bank, Da 
Afghanistan Bank. Chairman McCaskill's letter requested 
information on how the Defense Department, State Department, 
and the Embassy intend to improve interagency coordination and 
accountability.

6. Investigation: Contracts for Afghan National Policy Training

    On October 22, 2012, Chairman McCaskill sent a letter to 
the Secretary of the Army requesting information related to 
Army contracts for police training in Afghanistan. The letter 
followed reports that former employees of Jorge Scientific, an 
Army contractor, engaged in frequent abuse of alcohol and drugs 
in Kabul, at times with the involvement of Army personnel 
responsible for contract oversight. Jorge also allegedly 
submitted false paperwork to the government to enable employees 
to obtain and carry weapons without proper authorization. The 
letter requested information regarding (1) the number, type, 
value, and obligations to date of contracts held by Jorge 
Scientific Corporation, (2) evaluation or audits of the 
contractor's performance, (3) the number, qualifications, and 
locations of the contracting officers' representatives and 
other personnel responsible for conducting oversight of Jorge 
Scientific contract(s) in Afghanistan, (4) Army policies and 
procedures related to the acquisition and use of firearms, 
grenades, and other weapons by contractors in Afghanistan, and 
(5) other Army police training contracts in Afghanistan.

                     E. Arlington National Cemetery

    The Subcommittee held one hearing and continued its 
oversight related to Arlington National Cemetery. The hearing 
focused on the mismanagement of contracts at Arlington National 
Cemetery.

1. Contract Management at Arlington National Cemetery (January 25, 
        2012)

    Witnesses: Lieutenant Gen. Peter M. Vangjel, Inspector 
General, Army; Brian J. Lepore, Director, Defense Capabilities 
and Management, GAO; Belva M. Martin, Director, Acquisition and 
Sourcing Management, Government Accountability Office (GAO); 
Kathryn A. Condon, Executive Director, Army National Cemeteries 
Program
    Overview: On January 25, 2012, the Subcommittee held its 
second hearing to examine the mismanagement of contracts at 
Arlington National Cemetery. The Subcommittee's first hearing, 
in July 2010, followed a June 2010 report by the Army Inspector 
General that found problems with hundreds of graves at 
Arlington, including unmarked or improperly marked graves, 
mishandling of cremated remains, and incorrect information in 
the Cemetery's records about whether graves were occupied. At 
the Subcommittee's July 2010 hearing, the Subcommittee released 
information showing that the problems with graves at Arlington 
could have been far more extensive than the Army or anyone else 
had previously acknowledged. The documents and information 
obtained by the Subcommittee suggested that 4,900 to 6,600 
graves may have been unmarked, improperly marked, or mislabeled 
on the Cemetery's maps.
    The hearing examined what progress has been made to improve 
the management and oversight of contracts at Arlington since 
the Subcommittee's July 2010 hearing. The hearing also reviewed 
the findings of new reports issued by the Army and the 
Government Accountability Office as required under Public Law 
111-339, a law introduced by Chairman McCaskill and signed into 
law on December 22, 2010.

2. Investigation: Arlington National Cemetery Contract Management

    On March 31, 2011, Chairman McCaskill sent a letter to the 
Secretary of the Army to express serious concerns regarding 
reports of errors in burial records and at gravesites at 
Arlington National Cemetery. The letter requested information 
regarding (1) the number of gravesites examined, (2) the number 
of gravesites determined to be incorrectly identified, labeled, 
or occupied and the methodology used to make that 
determination, (3) the number of families contacted regarding 
problems with gravesites and the number who have requested that 
the gravesites be physically examined, (4) the procedures for 
contracting family members regarding actual or potential 
problems with gravesites and how these procedures have been 
implemented and/or changed since July 2010, and (5) the extent 
to which the Army will be able to correctly identify all 
gravesites by the end of the year and the estimated costs and 
time required to complete an examination of gravesites.

                           F. Contract Audits

    The Subcommittee held a hearing which focused on how 
Federal agencies use contract audits to detect and present 
waste, fraud, and abuse in government contracts.

1. Improving Federal Contract Auditing (February 1, 2011)

    Witnesses: Thomas P. Skelly, Acting Chief Financial 
Officer, U.S. Department of Education (DOE); Ingrid Kolb, 
Director, Office of Management, Office of Deputy Secretary, 
DOE; Hon. Brian Miller, Inspector General, GSA; Patrick J. 
Fitzgerald, Director, Defense Contract Audit Agency, Defense 
Department; Jeanette M. Franzel, Managing Director, Financial 
Management and Assurance, GAO; E. Sanderson Hoe, Partner, 
McKenna, Long and Aldrige, on behalf of the U.S. Chamber of 
Commerce; Nick Schwellenbach, Director of Investigations, 
Project On Government Oversight.
    Overview: The hearing examined how Federal agencies use 
contract audits to detect and prevent waste, fraud, and abuse 
in government contracts. In particular, the hearing reviewed 
the findings of the Subcommittee's ongoing investigation of the 
type and number of contract audits at Federal agencies. The 
hearing also examined the role played by the Defense Contract 
Audit Agency (DCAA) in performing contract audits for agencies 
other than the Defense Department.

                          G. Counternarcotics

    On June 7, 2011, the Subcommittee released a report, New 
Information about Counternarcotics in Latin America, which 
analyzed State Department and Defense Department spending on 
contracts to supply counternarcotics assistance to governments 
in Latin America. The report reviewed counternarcotics contract 
spending over a 5 year period focusing primarily on eight 
countries: Mexico, Columbia, Peru, Bolivia, Ecuador, Haiti, 
Guatemala, and the Dominican Republic.
    To assess the extent to which the Federal Government relies 
on contractors to carry out counternarcotics programs, Chairman 
McCaskill and then-Ranking Member Robert Bennett sent a letter 
in February 2010 requesting information and documents regarding 
counternarcotics contracts awarded by the State Department and 
Defense Department. The report was compiled using State 
Department and Defense Department data sent in response to the 
letter, as well as information received at the Subcommittee's 
May 2010 hearing on counternarcotics contracts.
    The report found that from 2005 to 2009, the majority of 
counternarcotics contracts in Latin America went to only five 
contractors, and the State Department and Defense Department 
spent nearly $2 billion on counternarcotics contracts in 
Columbia alone from 2005 to 2009. In addition, the report 
revealed that more than half (52%) of counternarcotics contract 
dollars during this time period were spend to acquire goods and 
services related to aircraft, used for drug location and 
eradication. The report also found that neither the State 
Department nor the Defense Department has adequate systems in 
place to track counternarcotics contract data.

                       H. Food Service Management

    The Subcommittee held one hearing and initiated one 
investigation related to food service management. The 
Subcommittee's oversight focused on whether food service 
management contractors are withholding rebates, discounts, and 
credits which should be passed through to the Federal 
Government.

1. Food Service Management Contracts: Are Contractors Overcharging the 
        Government? (October 5, 2011)

    Witnesses: Hon. Phyllis K. Fong, Inspector General, 
Department of Agriculture, and Chair, Council of the Inspectors 
General on Integrity and Efficiency; John F. Carroll, Assistant 
Attorney General, Office of the Attorney General of the State 
of New York; Charles Tiefer, Professor of Law, University of 
Baltimore School of Law, and Former Commissioner, Commission on 
Wartime Contracting in Iraq and Afghanistan.
    Overview: The Federal Government spends billions of dollars 
every year on contracts for food service management at military 
installations and bases, hospitals, and government buildings as 
well as through the Federal school lunch program. The purpose 
of the hearing was to examine whether food service management 
contractors are withholding rebates, discounts, and credits 
which should be passed through to the Federal Government. The 
hearing reviewed examples of this practice and assessed steps 
taken by agencies to ensure that contractors are in compliance 
with rebate requirements. The hearing also addressed the need 
for increased transparency, oversight, and accountability.

2. Investigation: Food Service Management Contracts

    On October 7, 2011, Chairman McCaskill sent letters to the 
Secretary of Veterans Affairs, Secretary of the Interior, 
Secretary of Agriculture, Secretary of Defense, the Secretary 
of Transportation, the Secretary of Homeland Security, 
Secretary of Health and Human Services, and Secretary of State, 
as well as the Attorney General, the Director of the Court 
Services and Offender Supervision Agency, the Administrator for 
the National Aeronautics and Space Administration, the 
Administrator for the General Services Administration, and the 
Administrator for the Agency for International Development to 
request more information regarding procurement, management, and 
oversight of food service management contracts and vendor 
rebate practices. In addition, Chairman McCaskill sent letters 
to holders of government food service contracts to request more 
information about the contracts. The letters were sent to 
address the issues raised at the Subcommittee's October 5, 2011 
hearing on food service management contracts.
    On December 4, 2012, Chairman McCaskill sent a letter to 
the Acting Director of the Office of Management and Budget to 
request a review food service contracts and assess any needed 
changes to law or regulation to achieve the most efficient, 
effective, and transparent use of taxpayer dollars spent 
through food service contracts.

                           I. Iran Sanctions

    On April 8, 2011, Chairman McCaskill sent a letter to the 
Secretary of Defense to request additional information 
regarding the Department's efforts to ensure the contractor KGL 
is in compliance with the Iran Sanctions Act, as well as 
information regarding its efforts to determine whether KGL is 
currently involved in any business interests with entities 
designated by the Treasury Department as engaged in activities 
related to the proliferation of weapons of mass destruction. 
The Subcommittee has repeatedly raised concerns about Defense 
Department contracts with KGL, including, but not limited to, 
its responsibility as a contractor based on KGL's conduct 
relating to the death of Lieutenant Colonel Dominic ``Rocky'' 
Baragona, who was killed in Safwan, Iraq, when his vehicle was 
struck by a truck being driven by a KGL employee, while KGL 
held a contract with the U.S. Army to deliver supplies to Iraq.
    On May 30, 2011, Chairman McCaskill received a letter from 
the Defense Department stating that, after the agency reviewed 
the Central Contractor Registration System, the Excluded 
Parties Listing System, the Federal Awardee Performance and 
Integrity Information System, the Past Performance of 
Information Retrieval System, and the Specially Designated 
Nationals and Blocks Persons List, KGL Holding has not violated 
U.S. law, and is thus eligible to hold defense contracts.
    On April 8, 2011, Chairman McCaskill sent a letter to the 
Comptroller General to request that GAO review Federal 
agencies' compliance with Section 102(b) of the Comprehensive 
Iran Sanctions, Accountability, and Divestment Act of 2010 
(CISADA). Section 102(b) of CISADA amended the Iran Sanctions 
Act of 1996 (ISA) to require prospective government contractors 
to certify that neither they nor their affiliates were engaged 
in sanctioned activity in Iran. The letter requested that the 
GAO assess (1) agency and contractor compliance with the 
certification, (2) how many reports of false certifications 
have been investigated by agencies, (3) the outcomes of these 
investigations, (4) how many contractors have been suspended or 
debarred for engaging in sanctioned activity in Iran, (5) how 
many waivers of certification have been requested and how many 
granted, and (6) the extent to which agencies and contractors 
are applying the CISADA requirements to subcontractors.

                              J. Medicare

    The Subcommittee continued its oversight of contracts 
relating to Medicare. On March 1, 2011, Chairman McCaskill, 
Senator Baucus, and Senator Carper sent a letter to the 
Inspector General of the Department of Health and Human 
Services to express potential conflicts of interest among the 
private-sector contractors that perform most of the payment, 
administration, and oversight functions of Medicare. For 
example, a survey of contractors regarding problems with the 
Medicare program identified several relationships between key 
Medicare contractors that raise questions about possible 
conflicts of interest, or at the very least, might present the 
appearance of a conflict of interest, between the companies 
responsible for approving and processing reimbursement claims, 
and those hired by the Federal Government to ensure claims are 
paid correctly. The letter urged the Inspector General to 
conduct a review of the contractors and their subsidiary 
relationships to identify possible conflicts of interest.

                          K. Public Relations

    The Subcommittee initiated an investigation and held one 
hearing related to contracts for public relations services.

1. Examination of Public Relations Contracts at the General Services 
        Administration's Heartland Region (March 1, 2011)

    Witnesses: Hon. Brian Miller, Inspector General, General 
Services Administration (GSA); Hon. Martha Johnson, 
Administrator, GSA; Robert Peck, Commissioner, Public Buildings 
Service, GSA; Mary Ruwwe, Regional Commissioner (Heartland 
Region), Public Buildings Service, GSA.
    Overview: The hearing examined contracts for public 
relations services at GSA and other Federal agencies. In 
particular, the hearing reviewed findings from GSA Office of 
Inspector General's February 19, 2011 audit memorandum 
regarding contracts valued at $235,000 that were awarded to 
Jane Mobley Associates, Inc. (JMA) to assist GSA with 
responding to media and government agency investigations 
related to the environmental and health concerns at the 
Bannister Federal Complex in Kansas City. The hearing also 
reviewed the results of the Subcommittee's ongoing 
investigation into the JMA contract.

2. Investigation: Public Relations Contracts

    On February 17, 2010, Chairman McCaskill sent a letter to 
the Administrator of GSA requesting information for a briefing 
for Subcommittee staff regarding bonuses and ratings for GSA 
officials associated with the award of contracts for public 
relations services at GSA's Bannister Federal Complex in Kansas 
City.
    On November 12, 2010, Chairman McCaskill sent a second 
letter to the Administrator of GSA requesting information 
regarding (1) contracts awarded by GSA for public relations, 
advertising, or similar services, and (2) the complete contract 
file for one contract assisting GSA with the ``impending crisis 
event'' caused by media probes and government investigations of 
the Bannister Federal Complex in Kansas City.
    On May 9, 2011, Chairman McCaskill sent a letter to GSA 
requesting a response regarding issues raised in Inspector 
General Miller's statement at the Subcommittee's March 1, 2011 
hearing, which noted several inconsistencies in Regional 
Commissioner Ruwwe's statements.
    On February 28, 2012, Chairman McCaskill and Ranking Member 
Portman sent letters to the Secretary of Labor, Secretary of 
Education, Secretary of Agriculture, Secretary of Health and 
Human Services, Secretary of Defense, and Secretary of Housing 
and Urban Affairs, as well as the Attorney General, the 
Chairman of the National Labor Relations Board, the Director of 
the Consumer Financial Protection Bureau, the Administrator of 
the Environmental Protection Agency, and the Chairman of the 
Consumer Product Safety Commission to request information about 
the agencies' contracts for public relations, publicity, 
advertising, communications, or similar services.

                           L. Small Business

    The Subcommittee held one hearing to examine the ways in 
which large businesses are obtaining and performing contracts 
intended to be performed by small businesses.

1. Small Business Contracts: How Oversight Failures and Regulatory 
        Loopholes Allow Large Businesses to Get and Keep Small Business 
        Contracts (July 26, 2011)

    Witnesses: Joseph G. Jordan, Associate Administrator, 
Office of Government Contracting and Business Development, 
Small Business Administration (SBA); Mauricio P. Vera, Chair, 
Federal Office of Small and Disadvantaged Business Utilization 
Council and Director, Office of Small and Disadvantaged 
Business Utilization, U.S. Agency for International Development 
(USAID); Mindy Connolly, Ph.D., Chief Acquisition Officer, 
General Services Administration (GSA).
    Overview: The hearing examined the ways in which large 
businesses are obtaining and performing small business 
contracts. Since 2005, the Inspector General of SBA has listed 
as one of the agency's top management challenges the fact that 
large firms are obtaining small business contracts and agencies 
are counting contracts performed by large businesses toward 
their small business goals. According to the Inspector General, 
many contract awards recorded as going to small businesses are 
actually performed by large businesses. The hearing also 
assessed the steps taken by the SBA to improve their oversight 
in this area and the reasons why the SBA and other agencies 
have failed to implement the Inspector General's 
recommendations. The hearing also examined what legislative and 
regulatory steps may be necessary to address these issues.

                    M. Traumatic Brain Injury (TBI)

    The Subcommittee initiated an investigation related to 
traumatic brain injury (TBI), which focused on TRICARE's 
contracts to study the effectiveness of cognitive 
rehabilitation therapy for the treatment of traumatic brain 
injury.
    On January 19, 2011, Chairman McCaskill sent a letter to 
the Secretary of Defense requesting information regarding 
TRICARE's contracts to study the effectiveness of cognitive 
rehabilitation therapy for the treatment of traumatic brain 
injury. The Defense Department relied on studies conducted by 
ECRI in 2009 and 2007, which found a lack of scientific 
consensus about the effectiveness of Cognitive Rehabilitation 
Therapy (CRT) in treating mild TBI, to deny TRICARE coverage. 
However, reports by Pro Publica and National Public Radio have 
questioned the validity of the ECRI study, raising significant 
questions regarding the Department's award and management of 
the contract with ECRI.
    On October 18, 2011, Chairman McCaskill sent a letter to 
the Secretary of the Department of Health and Human Services, 
the Secretary of Veterans Affairs, and the Secretary of 
Education requesting information as to how each agency intends 
to work with the Department of Defense to implement a 
recommendation made by the Institute of Medicine, which 
recommended that the Defense Department convene a conference to 
achieve consensus as to a definition for cognitive 
rehabilitation therapy. The lack of a consistent definition for 
CRT contributes to the lack of clear conclusive evidence as to 
its effectiveness.
    Chairman McCaskill sent a follow up letter on December 14, 
2011, to the Secretary of Defense requesting information 
regarding the Army's use of the Automatic Neuropsychological 
Assessment Metric (ANAM), including information about Defense 
Department contracts to administer the test. On April 20, 2012, 
Chairman McCaskill sent a letter to the Secretary of the Army 
to request a copy of the Army's report about the ANAM test.

                              N. Veterans

    The Subcommittee held one hearing to examine contractor 
employment of veterans.

1. Veterans Employment and Government Contractors (June 5, 2012)

    Witnesses: Theodore L. (Ted) Daywalt, President and Chief 
Executive Officer, VetJobs; Spencer Kympton, Chief Operating 
Officer, The Mission Continues; Ramsey Sulayman, Legislative 
Associate, Iraq and Afghanistan Veterans of America; Pamela 
Hardy, Senior Manager, Diversity and Inclusion Team; Sally 
Sullivan, Executive Vice President, ManTech International 
Corporation.
    Overview: Following the Subcommittee's June 5, 2012 hearing 
on contractor employment of veterans, Chairman McCaskill 
released four spreadsheets of data provided by government 
contractors in the VETS-100 and VETS-100A forms for 2009 and 
VETS-100 and VETS-100A for 2010. The data has been redacted to 
remove personal information.

                           O. Whistleblowers

    The Subcommittee held a hearing to review the Non-Federal 
Employee Whistleblower Protection Act, a bill that was 
introduced by Senator McCaskill to bolster whistleblower 
protections for government contractors and other non-Federal 
employees.

1. Whistleblower Protections for Government Contractors (December 6, 
        2011)

    Witnesses: Hon. Peggy E. Gustafson, Inspector General, 
Small Business Administration (SBA); Marguerite C. Garrison, 
Deputy Inspector General for Administrative Investigations, 
Department of Defense (Defense Department); Dr. Walter L. 
Tamosaitis, URS Corporation and Former Research and Technology 
Manager, Waste Treatment Project, Hanford Nuclear Site; Angela 
Canterbury, Director of Public Policy, Project on Government 
Oversight.
    Overview: The hearing reviewed the Non-Federal Employee 
Whistleblower Protection Act, a bill that was introduced by 
Chairman McCaskill to bolster whistleblower protections for 
government contractors and other non-Federal employees. The 
hearing also reviewed whether current whistleblower protections 
for contractors working under Defense Department and Recovery 
Act contracts have been effective in encouraging reports of 
waste, fraud, and abuse. It also examined whether these 
protections have had any adverse impact on the efficiency and 
effectiveness of government acquisition and procurement. 
Finally, the hearing explored what additional legislation may 
be needed to encourage and protect contractor whistleblowers in 
the disclosure of waste, fraud, and abuse of taxpayer dollars.

                            III. LEGISLATION

    The Subcommittee on Contracting Oversight does not have 
legislative authority. However, the Subcommittee's 
investigations and hearings have revealed the need for changes 
to existing law. During the 112th Congress, Chairman McCaskill 
introduced the following legislative proposals in her capacity 
as a Senator.

A. Comprehensive Contingency Contracting Reform Act of 2012

    On February 29, 2012, Chairman McCaskill introduced as S. 
2136, which was later reintroduced on June 12, 2012 as S. 3286. 
Substantial portions of the bill, called The Comprehensive 
Contingency Contracting Reform Act of 2012, became law as part 
of the Fiscal Year 2013 National Defense Authorization Act 
(NDAA), P.L. 112-239, Sections 802, 841-53, 861, 1219, and 
1273.
    The wartime contracting portion implements comprehensive 
reform in the awarding, execution, and oversight of contingency 
contracts across government, so that the management of these 
contracts is more transparent. The NDAA also includes 
provisions which would reform acquisition policy and 
management, require new structures for agency management and 
accountability, requirements implement new sustainability 
requirements for capital projects, and require coordinated 
oversight from agency Inspectors General.

B. Lieutenant Colonel Dominic ``Rocky'' Baragona Justice for American 
        Heroes Harmed by Contractors Act (S. 235)

    On January 31, 2011, Chairman McCaskill, along with co-
sponsors Senator Casey, Senator Collins, Senator Nelson, 
Senator Rubio, and Senator Whitehouse, introduced S. 235, 
Lieutenant Colonel Dominic ``Rocky'' Baragona Justice for 
American Heroes Harmed by Contractors Act. The bill requires 
foreign entities that enter into contracts over $5 million with 
the United States to consent to personal jurisdiction in civil 
suits involving serious bodily injury, rape, or sexual assault 
for actions arising out of the performance of the contract. The 
bill also amends the Federal Acquisition Regulation to give 
agencies and departments the explicit authority to suspend or 
debar foreign contractors for evasion of service of process or 
for failing to appear in court to answer the covered actions in 
the bill. On January 31, 2011, the bill was referred to the 
Committee on Homeland Security and Governmental Affairs.

C. Non-Federal Employee Whistleblower Protection Act of 2011 (S. 241)

    On January 31, 2011, Chairman McCaskill introduced S. 241, 
the Non-Federal Employee Whistleblower Protection Act of 2011, 
with Senator Tester and Senator Webb joining as cosponsors. The 
bill prohibits an employee of any non-Federal employer 
receiving covered funds from being discharged, demoted, or 
discriminated against as a reprisal for initiating or 
participating in any proceeding related to the misuse of 
Federal funds, for reasonably opposing the misuse of Federal 
funds, or for disclosing to specified Federal agencies or 
officials information that the employee reasonably believes is 
evidence of (1) gross mismanagement of an agency contract or 
grant relating to covered funds, (2) a gross waste of covered 
funds, (3) a substantial and specific danger to public health 
or safety, or an abuse of authority related to the 
implementation or use of covered funds, or (4) a violation of a 
law, rule, or regulation related to an agency contract, 
subcontract, or grant relating to covered funds. The bill 
establishes a presumption that a reprisal has occurred if a 
complainant demonstrates that a whistleblower disclosure was a 
contributing factor in the reprisal.
    Substantial portions of the Non-Federal Employee 
Whistleblower Protection Act of 2011 became law as part of the 
fiscal 2013 National Defense Authorization Act (NDAA), P.L. 
112-239.

D. Government Accountability Office Improvement Act of 2011 (S. 237)

    On January 31, 2011, Chairman McCaskill introduced S. 237, 
Government Accountability Office Improvement Act of 2011, with 
Senator Collins and Senator Lieberman joining as cosponsors. 
The bill authorizes the GAO Comptroller General to (1) obtain 
Federal agency records required to discharge his or her duties, 
including by bringing civil actions under this Act, (2) make 
and retain copies of agency records, and (3) administer oaths 
when investigating fraud or Federal employee misconduct. 
Further, the bill requires the GAO to prescribe policies and 
procedures to protect proprietary or trade secret information 
obtained pursuant to the bill from public disclosure. The bill 
would also require the GAO to notify a congressional committee 
or Member of Congress when an agency has not provided 
information requested by the GAO relating to a request by that 
committee or Member within 30 days. In addition, under the 
bill's provisions, agencies must submit statements on actions 
taken or planned in response to GAO recommendations to be 
submitted to congressional committees with jurisdiction over 
the relevant agency program or activity as well as to the GAO. 
On April 24, 2012, the bill was placed on the Senate 
Legislative Calendar.

E. Whistleblower Protection Enhancement Act of 2012 (S. 743)

    On April 6, 2011, Senator Akaka, with Chairman McCaskill, 
Senator Begich, Senator Cardin, Senator Carper, Senator 
Collins, Senator Coons, Senator Grassley, Senator Harkin, 
Senator Landrieu, Senator Leahy, Senator Levin, Senator 
Lieberman, Senator Pryor, and Senator Tester, introduced S. 
743, the Whistleblower Protection Enhancement Act of 2011. The 
bill was signed into law by President Obama as P.L. 112-199 on 
November 27, 2012. The Act amends current whistleblower 
protections in Federal personnel law to extend such protections 
to the disclosure of any legal violation.

F. Federal Acquisition Institute Improvement Act of 2011 (S. 762)

    On April 7, 2011, Senator Collins introduced S. 762, the 
Federal Acquisition Institute Improvement Act of 2011, which 
Chairman McCaskill co-sponsored along with Senator Akaka and 
Senator Brown. The bill amends the National Defense 
Authorization Act for Fiscal Year 2008 to provide that the 
Associate Administrator for Acquisition Workforce Programs 
shall (1) be chosen on the basis of demonstrated knowledge and 
expertise in acquisition, human capital, and management, (2) be 
located in the Office of Federal Procurement Policy, and (3) 
implement acquisition workforce programs. Further, the bill 
establishes a Federal Acquisition Institute (FAI) and outlines 
its purposes relating to the development of a professional 
acquisition workforce. On June 9, 2011, the bill was placed on 
the Senate Legislative Calendar after being referred to the 
Committee on Homeland Security and Governmental Affairs.

G. Acquisition Workforce Improvement Act of 2011 (S. 761)

    On April 7, 2011, Senator Collins introduced S. 761, the 
Acquisition Workforce Improvement Act of 2011. Chairman 
McCaskill, along with Senator Akaka, joined as an original 
cosponsor of the bill. The bill would amend the Office of 
Federal Procurement Policy Act to direct the Administrator of 
the Office of Federal Procurement Policy (OFPP) to establish a 
government-wide acquisition management fellows program for the 
purpose of investing in the long-term improvement and sustained 
excellence of the Federal acquisition workforce. The program 
would (1) develop a new generation of acquisition leaders with 
government-wide perspective, skills, and experience, (2) 
recruit individuals with the outstanding academic merit, 
ethical value, business acumen, and leadership skills to meet 
the government's acquisition needs, and (3) offer opportunities 
for advancement, competitive compensation, and leadership 
opportunities. The program must consist of one academic year of 
full-time, on-campus training followed by two years of on-the-
job and part-time training toward a Master's or equivalent 
graduate degree in related fields. The bill was referred to the 
Committee on Homeland Security and Governmental Affairs.

H. Congressional Whistleblower Protection Act of 2011 (S. 586)

    On March 15, 2011, S. 586, the Congressional Whistleblower 
Protection Act of 2011, sponsored by Senator Grassley and 
cosponsored by Chairman McCaskill, was introduced. The bill 
would amend the Congressional Accountability Act of 1995 to 
apply to whistleblower rights and protections to legislative 
branch employees, including GAO and Library of Congress 
employees. The remedies for violations of these rights would be 
the same if awarded with respect to a prohibited Federal 
personnel practice in the executive branch. On the same day it 
was introduced, the bill was referred to the Committee on 
Homeland Security and Governmental Affairs.

I. Independent Task and Delivery Order Review Extension Act of 2011 (S. 
        498)

    Chairman McCaskill, with Senator Collins and Senator 
Portman, co-sponsored S. 498, Independent Task and Delivery 
Order Review Extension Act of 2011, introduced by Senator 
Lieberman on March 7, 2011. The bill would extend through 
September 30, 2016 (1) the authority for a bid protest of a 
task or delivery order contract valued in excess of $10 
million, and (2) the exclusive jurisdiction of the Comptroller 
General over such protests. In addition, the bill would 
prohibit the authorization of appropriations for the specific 
purpose of processing bid protests, and requires all such 
protests to be processed using the existing resources of GAO 
and executive agencies. The bill was passed unanimously in the 
Senate on May 12, 2011, and held at the desk in the House on 
May 13, 2011.