[Senate Hearing 107-]
[From the U.S. Government Publishing Office]
S. Hrg. 107- 459
NOMINATIONS OF: J. JOSEPH GRANDMAISON
KENNETH M. DONOHUE, SR., DIANE L. TOMB
AND VICKERS B. MEADOWS
=======================================================================
HEARINGS
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
ON
NOMINATIONS OF:
J. JOSEPH GRANDMAISON, OF NEW HAMPSHIRE, TO BE A MEMBER
OF THE BOARD OF DIRECTORS OF THE EXPORT-IMPORT BANK
OF THE UNITED STATES
__________
KENNETH M. DONOHUE, SR., OF VIRGINIA, TO BE INSPECTOR GENERAL OF THE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
__________
DIANE L. TOMB, OF VIRGINIA, TO BE ASSISTANT SECRETARY
OF PUBLIC AFFAIRS, U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
__________
VICKERS B. MEADOWS, OF VIRGINIA, TO BE ASSISTANT SECRETARY
FOR ADMINISTRATION, U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
__________
DECEMBER 6 AND 18, 2001
__________
Printed for the use of the Committee on Banking, Housing, and Urban
Affairs
U.S. GOVERNMENT PRINTING OFFICE
79-782 WASHINGTON : 2002
________________________________________________________________________
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
PAUL S. SARBANES, Maryland, Chairman
CHRISTOPHER J. DODD, Connecticut PHIL GRAMM, Texas
TIM JOHNSON, South Dakota RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York WAYNE ALLARD, Colorado
EVAN BAYH, Indiana MICHAEL B. ENZI, Wyoming
ZELL MILLER, Georgia CHUCK HAGEL, Nebraska
THOMAS R. CARPER, Delaware RICK SANTORUM, Pennsylvania
DEBBIE STABENOW, Michigan JIM BUNNING, Kentucky
JON S. CORZINE, New Jersey MIKE CRAPO, Idaho
DANIEL K. AKAKA, Hawaii JOHN ENSIGN, Nevada
Steven B. Harris, Staff Director and Chief Counsel
Wayne A. Abernathy, Republican Staff Director
Martin J. Gruenberg, Senior Counsel
Jonathan Miller, Professional Staff
Brian J. Gross, Republican Deputy Staff Director and Counsel
Melody H. Fennel, Republican Professional Staff Member
Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator
George E. Whittle, Editor
(ii)
C O N T E N T S
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THURSDAY, DECEMBER 6, 2001
Page
Opening statement of Chairman Sarbanes........................... 1
Opening statements, comments, or prepared statements of:
Senator Reed................................................. 2
Senator Miller............................................... 2
Senator Allard............................................... 2
Prepared statement....................................... 21
NOMINEES
J. Joseph Grandmaison, of New Hampshire, to be a Member of the
Board of Directors of the Export-Import Bank of the United
States......................................................... 3
Biographical sketch of nominee............................... 22
Kenneth M. Donohue, Sr., of Virginia, to be Inspector General of
the U.S. Department of Housing and Urban Development........... 9
Biographical sketch of nominee............................... 32
Additional Material Supplied for the Record
Miscellaneous information........................................ 38
----------
TUESDAY, DECEMBER 18, 2001
Opening statement of Chairman Sarbanes........................... 55
Opening statements, comments, or prepared statements of:
Senator Gramm................................................ 57
Senator Reed................................................. 57
WITNESS
Rob Portman, a U.S. Representative in Congress from the State of
Ohio........................................................... 55
NOMINEES
Diane L. Tomb, of Virginia, to be Assistant Secretary of Public
Affairs, U.S. Department of Housing and Urban Development...... 57
Prepared statement........................................... 65
Biographical sketch of nominee............................... 66
Vickers B. Meadows, of Virginia, to be Assistant Secretary for
Administration, U.S. Department of Housing and Urban
Development.................................................... 59
Biographical sketch of nominee............................... 70
NOMINATIONS OF:
J. JOSEPH GRANDMAISON
OF NEW HAMPSHIRE, TO BE A MEMBER
OF THE BOARD OF DIRECTORS OF
THE EXPORT-IMPORT BANK OF THE
UNITED STATES
AND
KENNETH M. DONOHUE, SR.
OF VIRGINIA, TO BE INSPECTOR GENERAL
OF THE U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT
----------
THURSDAY, DECEMBER 6, 2001
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 10:05 a.m., in room SD-538 of the
Dirksen Senate Office Building, Senator Paul S. Sarbanes
(Chairman of the Committee) presiding.
OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES
Chairman Sarbanes. The Committee will come to order.
We are here this morning holding nomination hearings on two
nominees-- Joseph Grandmaison of New Hampshire, to be a Member
of the Board of Directors of the Export-Import Bank of the
United States, and Kenneth Donohue of Virginia, to be Inspector
General of the Department of Housing and Urban Development.
Since you are in two entirely different bureaucratic
universes, I think we will take you one at a time instead of as
a panel. And we will start with Mr. Grandmaison.
The most relevant thing to note is that he has literally
just finished serving as the Director of the U.S. Trade and
Development Agency, where he was for 7\1/2\ years, I think the
longest term of service of any Director of the TDA.
The TDA funds feasibility studies and provides other
assistance to U.S. companies seeking to become involved in the
planning stages of infrastructure and industrial projects in
middle-income and developing countries.
In carrying out that work, of course, the TDA works closely
with large and small U.S. exporters, with U.S. financial
institutions, works closely actually with the Export-Import
Bank, Overseas Private Investment Corporation, OPIC, the
Commerce Department, and other Federal agencies, all involved
in export promotion.
In addition, under Mr. Grandmaison's leadership, the TDA
was an important member and strong advocate in the Trade
Promotion Coordinating Committee, which was established by law
by this Committee. Since leaving the TDA earlier this year, Mr.
Grandmaison has served as an international trade consultant.
Now, obviously, this experience is highly relevant to the
work of the Export-Import Bank. It is my view that Mr.
Grandmaison's experience and his demonstrated ability in this--
and I have not gone all the way back through his resume. I do
note that at one point, he worked for the Commerce Department
as a Federal Co-Chairman of the New England Regional
Commission, whose membership included the New England
Governors.
He has had a range of experience that is highly relevant, I
think, to the work of the Export-Import Bank. We want to get
the Bank up to full strength. We have one other nominee to be a
Member of the Export-Import Bank whose hearing has been held,
Eduardo Aguirre of Texas. And so, if we can move forward with
that nomination and this one, we will be able to bring the
Export-Import Bank up to full strength. All five members of the
Bank will then have been nominated and confirmed.
Senator Reed, do you have an opening statement?
COMMENTS OF SENATOR JACK REED
Senator Reed. Thank you, Mr. Chairman.
I just want to recognize Mr. Grandmaison, who is an active
and very distinguished member of the New England community.
I am pleased to see you here, sir, and I wish you well.
Chairman Sarbanes. Senator Miller.
COMMENTS OF SENATOR ZELL MILLER
Senator Miller. No, Mr. Chairman, I do not have an opening
statement. I just want to thank you for holding this hearing
and to welcome today's nominees.
Chairman Sarbanes. You do not want to get in on this New
England community thing here?
[Laughter.]
Senator Reed. We have to stick together. We do not have a
lot of territory.
[Laughter.]
Chairman Sarbanes. He is from southern New England, maybe.
[Laughter.]
Senator Reed. You all are right about that, Mr. Chairman.
[Laughter.]
Chairman Sarbanes. Senator Allard has joined us. I am
pleased to see that. Do you have an opening statement?
COMMENTS OF SENATOR WAYNE ALLARD
Senator Allard. Yes, Mr. Chairman, thank you. I would like
to thank you for holding this hearing. Our witnesses today are
both nominated to key positions under the Committee's
jurisdictions. I am pleased that the Chairman has moved to fill
the vacancies.
Of course, I would like to welcome Ken Donohue to the
Banking Committee. Mr. Donohue is nominated to be the Inspector
General for the Department of Housing and Urban Development. I
believe that this is one of the most important positions at
HUD. It is critical that we have an Inspector General in place
to help ensure that we continue to see progress on management
reform.
As the Ranking Member, of the Subcommittee on Housing and
Transportation, I have seen firsthand how helpful the reports
of an Inspector General can be. The Inspector General acts as
the eyes and ears of the Congress and is expert at routing out
fraud, waste, and abuse.
I believe that Mr. Donohue's background will serve him well
in his new position. He has extensive experience in criminal
investigative matters, and he is a certified fraud examiner.
We have an obligation to both the taxpayers and to those
who utilize HUD's programs to ensure that the money is well
spent. Mr. Donohue understands this obligation, and I look
forward to the opportunity to work with him.
I would also like to welcome Mr. Joe Grandmaison to the
Banking Committee. He is nominated to be a Member of the Board
of Directors of the Export-Import Bank.
Thank you, Mr. Chairman.
Chairman Sarbanes. Thank you.
Mr. Grandmaison, it is our standard procedure to ask
witnesses to testify under oath at their nomination hearings.
If you would please stand and take the oath.
Do you swear or affirm that the testimony that you are
about to give is the truth, the whole truth, and nothing but
the truth, so help you God?
Mr. Grandmaison. I do.
Chairman Sarbanes. Do you agree to appear and testify
before any duly-constituted committee of the U.S. Senate?
Mr. Grandmaison. I do.
Chairman Sarbanes. Thank you very much. We would be very
happy to hear your statement.
STATEMENT OF J. JOSEPH GRANDMAISON
OF NEW HAMPSHIRE, TO BE A MEMBER OF THE
BOARD OF DIRECTORS OF THE EXPORT-IMPORT BANK
OF THE UNITED STATES
Mr. Grandmaison. Mr. Chairman, Members of the Senate, I am
honored to appear before you as the President's nominee to
become a Director at the Export-Import Bank of the United
States.
I am deeply appreciative to President Bush for giving me
the unexpected opportunity to continue in public service. I am
also most appreciative to Majority Leader Daschle, to you,
Senator Sarbanes, and to my friend, Senator Dodd, for their
support of my nomination. My promise to the President and to
each Member of this Committee is that, if confirmed, I will
serve with the same dedication, zeal, and purposefulness as I
have in my previous Government service.
When I was first asked whether I would be interested in
possible service on the Ex-Im Bank Board, my first thought was
how perfect that would be to use my 7-plus years of experience
as Director of the Trade and Development Agency. Not only is
Ex-Im Bank TDA's sister trade finance agency, along with the
Overseas Private Investment Corporation, OPIC, TDA's success is
inextricably linked to Ex-Im Bank. In fact, about a third of
the exports facilitated by TDA feasibility studies are financed
by the Bank.
To have the chance to bring my experience and enthusiasm to
Ex-Im Bank; to assist in strengthening our U.S. economy; and to
help create and preserve jobs here at home is a singular and
special personal and professional opportunity. And U.S. jobs
are what it is all about at the Bank.
Last year, Ex-Im Bank financed or insured over $15 billion
of U.S. exports. In today's competitive international market,
often it is whoever provides the financing that gets the
business. American companies need to be assured they can depend
on their Government as their partner in further growing their
company's share of the worldwide market. Ex-Im Bank will
continue and, with the Administration's and Congress' support,
will further strengthen that partnership.
If confirmed, I will have the opportunity and honor to join
the President, the Congress, Ex-Im Bank's Chairman John Robson,
and his colleagues at the Bank, in serving our Nation's
interest.
I would welcome that opportunity and ask for your support.
Thank you.
Chairman Sarbanes. Thank you very much.
You have been nominated to serve a term that expires in
January 2005. Is it your intention to serve the full length of
that term?
Mr. Grandmaison. Yes, it is, Senator.
Chairman Sarbanes. While you were at TDA, you served as a
Member of the Trade Promotion Coordinating Committee. What is
your view of the work of the Coordinating Committee, and how
important do you think it is to the U.S. export effort?
Mr. Grandmaison. I believe it is very important, Senator.
Among other things, what it does is it sends a message
throughout the operating bureaucracies of each of the member
agencies that they are supposed to be working together.
I was pleased when I learned of Secretary Evans' commitment
to a renewed TPCC. Obviously, it is leadership that is
necessary and having the new Secretary of Commerce fulfill that
role is going to be exciting.
Also, as you know, Mr. Robson, as President of the Ex-Im
Bank, serves as Vice Chair at the TPCC. And if called upon, I
would obviously do whatever he asked of me to help further
those relationships among agencies.
Chairman Sarbanes. I am interested in your view about the
tied-aid credit fund, whereby we seek to match credit terms
offered by other foreign export credit agencies. What is your
view of the need for the fund and how it should be utilized?
Mr. Grandmaison. Senator, the fund is terribly important as
a tool. In many ways, what it does is it helps us fulfill the
broader Government policy, our Government's policy, relative to
concessional financing, having it available to use. Now it is
an even better tool if, when called upon for very specific
reasons, it is actually put into play.
I think one has to use it wisely. I think one has to be
conscious of the overall Government policy relative to
concessional financing. But, again, as a constructive mechanism
to help us fulfill and assist our companies in being
competitive, it is very important.
Chairman Sarbanes. What do you understand the overall
Government policy toward concessional financing to be?
Mr. Grandmaison. Well, as I understand it, Senator, it is
that concessional financing should not be granted and that the
market should prevail. And that is an exemplary matter of
public policy. Many of our competitors observe and abide by the
OECD rules. Others perhaps often work at the margin. That is
where having the ability to use the tied-aid fund I would think
comes into play.
Actually, I think it is our perception that the use of the
tied-aid fund, or its potential use, has been very helpful in
getting the OECD to adopt limitations and restrictions on the
use of concessional financing by its member nations.
Chairman Sarbanes. I would like to explore with you the
issue of market windows, the government-sponsored enterprises
used by foreign countries, Canada and Germany are two leading
examples, to provide subsidized export credits outside of the
requirements of the OECD arrangement on export credits. Do you
have any view on how serious this problem is and how the United
States should respond to it?
Mr. Grandmaison. Senator, it is my understanding that the
threat of it becoming serious is there. Now, we do not as yet
know that for a fact. Therefore, at this point in time, what
would appear to make most common sense and business sense is to
continue to track and to identify what are the transactions
that are falling into that classification when it comes to our
competitors who are using market windows to, if you will,
expand what they consider to be their horizons.
Chairman Sarbanes. Well, I see that my time is almost
expired. I will yield to Senator Allard.
Senator Allard. Thank you, Mr. Chairman.
As I think I indicated to you in our previous
conversations, I have been working to establish an Office of
the Inspector General at the Export-Import Bank. Do you support
establishing an IG at the Bank?
Mr. Grandmaison. Senator, you expressed to me your belief
that whoever becomes a Director at the Bank must walk in with
an open mind. And I promised you that I would do so.
I share your belief in the accountability factor, in always
keeping in mind that it is taxpayer money that the Bank is
using. And should that become the case, you have my commitment
that I will do everything possible to make it work
successfully.
Senator Allard. In our conversation, you also mentioned
that the relationship of conflicts is less productive for both
offices. I just want to make it clear that you would pledge to
strive for a productive and coordinated relationship, if we
should have the inspector general, with the inspector general.
Is that right?
Mr. Grandmaison. Yes, sir.
Senator Allard. Thank you. Mr. Chairman, I yield my time.
Chairman Sarbanes. Senator Reed.
Senator Reed. Thank you very much, Mr. Chairman.
And thank you, Mr. Grandmaison, for your willingness to
come forward again and serve this country. You have a very
distinguished career, both as a businessman and also as a civic
leader, and we thank you for that.
One of the criticisms that we hear about Government all the
time is that it has to be run more like a business. This agency
seems to be one of those agencies that can and should run a lot
like a business, a financial institution. And some criticism I
have heard is that there is not either the resources or the
ability to leverage the private sector to help out in your
mission. Could you comment upon that as you go forward?
Mr. Grandmaison. Senator, I agree with the philosophy that
there are many things in Government that should be run more
like a business and there are business practices that can be
adopted. But I would add that one has to also keep in mind that
there are public policy issues and that it is not a business in
the normal use of the word.
The cooperation between the Ex-Im Bank and its clients, the
American business community, has to be a partnership. And ever-
increasingly, you see where U.S. companies would prefer that it
would be a level playing field overseas in every sense of the
word so that they would not have to come to us with their
business.
Often that is just not as practical as one would hope,
particularly when it comes to small businesses. Those are the
ones that have the most difficult time maximizing
opportunities.
Senator Reed. I think, Mr. Grandmaison, coming from our
part of the country, most of our businesses are small
businesses. It is encumbent upon Ex-Im Bank to, I think, more
aggressively reach out to indicate to businesses what you are
able to provide for them in terms of assistance, and I hope you
can do that. In terms of not only reaching out to your
potential clients, but also being part of a larger, sort of
financial support to the export business.
Some criticism I have had is that there is not that, you
know, your mission and you pursue it, but sometimes Ex-Im Bank
does not look to see if they can bring other banking
institutions in to do deals that will use some of your credits
with some other straight financing.
And I wonder if you might have a comment or just simply
store that away for reference as you go forward.
Mr. Grandmaison. What I would like to do is choose the
storing it away, Senator.
Senator Reed. That is fine. That is fine.
Mr. Grandmaison. I am not that well acquainted with it. But
I assure you that I will become better informed.
Senator Reed. Well, since we are confirmed automatic
expertise in everything by virtue of where we sit, I will
accept that response very gratefully.
[Laughter.]
But one further point, and it goes back I think also to the
issue that you mentioned in your initial response. I believe
that the agency needs to do a lot more of getting the message
down to the small businesses of America--north, south, east,
and west--who now increasingly depend upon the export market
for their livelihood and survival going forward. That would
require resources. It might require different programmatics
that you do not have at the moment. And again, I would urge you
to let us know if you feel that there is something that we
should do in terms of trying for additional resources,
additional programmatic responsibilities, or discretion.
I wish you well, and thank you for your service to the
country.
Chairman Sarbanes. Good. Thank you, Senator Reed.
Senator Miller.
Senator Miller. Thank you, Mr. Chairman. And thank you,
sir, for continuing to serve in the arena.
I know that you believe that TDA's success is very much
linked to Ex-Im Bank's, and I believe that also. And I would be
interested if you would care to elaborate a little on how you
see the working relationship between the Ex-Im Bank and TDA and
the other sister agencies, and how you think that could be
improved and how you intend to go about that.
Mr. Grandmaison. Well, thank you for that question,
Senator, because it is an area I have a deep dedication toward,
if you will.
One of the frustrations is that often you run into problems
when you ask agencies to cooperate with one another. What I
learned at TDA, to be quite honest with you, is perhaps because
of how small it is, there was a tendency that you began with
the recognition that you could reach into other agencies, that
all the expertise was not on the same floor within your agency,
so that you aggressively went out and worked with agencies,
whether it be the FAA or FEMA or whoever, and called upon that
expertise to help you.
What the TPCC does is it sends the message, as I said,
right straight through that agency, cooperation is supposed to
be the order of the day. And cooperation is even more important
when it comes to the three sister trade finance agencies--that
the heads of the three agencies, if you will, actually like one
another, that they are open to suggestions from one another--
and that as often as possible and practical, they meet to find
ways to work together, particularly on Senator Reed's point
relative to marketing the agencies domestically.
So that is where you can be far more effective, if you go
in and conduct a training session in Atlanta utilizing all
three agencies together, so that the attendees get a full view
of the type of U.S. Government export services that are
available to them.
It is less so sometimes on the projects because, to a great
extent, that is controlled by the applicant, the person that
you are actually assisting. But especially on the marketing
side, you can maximize your time and your cost, resource-wise,
by working together. And quite honestly, that is one of the
more rewarding aspects of being involved in this particular
field.
Senator Miller. Thank you. That is what I wanted to hear. I
wish you well.
I do not have anything else, Mr. Chairman.
Mr. Grandmaison. Thank you, Senator.
Chairman Sarbanes. Do you have a view on how important the
support for small business on the part of Ex-Im Bank should be?
Mr. Grandmaison. I believe that 90 percent of the
transactions that Ex-Im Bank in authorized fiscal year 2001
were with small business. Now the only way that comes about is
through aggressive marketing and is through taking your
product, if you will, your services, and being able to explain
to people how they can make use of it quickly.
Now part of the explanation as to why Ex-Im Bank has been
that successful, I would respectfully suggest, is because of
the oversight by Congress that has continually underlined that
it be a priority of the agency.
The truth is that it is often easier to work with large
companies. It is not as rewarding, however. It does not feel as
good. It is not as satisfying as when you work with a small
company and help them break into the international market and
we get that sale.
So it is a combination of both. But what it takes more than
anything else is discipline, discipline and maintaining it as a
priority and not forgetting that that is what you are being
paid to do.
Chairman Sarbanes. Senator Allard.
Senator Allard. I have no further questions, Mr. Chairman.
Thank you.
Chairman Sarbanes. Thank you very much. We appreciate your
coming before the Committee.
Mr. Grandmaison. Thank you, Senators.
Chairman Sarbanes. Mr. Donohue, if you would come on up and
take a place at the table.
[Pause.]
Our second nominee that we will be considering this morning
is Kenneth Donohue, who has been nominated to be the Inspector
General for the Department of Housing and Urban Development.
Mr. Donohue had a long and distinguished career in the
Secret Service from 1969 to 1990. He then worked for the
Resolution Trust Corporation as an Assistant Director for
Investigations. And when he left Government service just a few
years ago, he started his own security firm.
If confirmed, Mr. Donohue will be taking the helm of an
office that, according to many observers, including the GAO,
has experienced some significant troubles. For example, the
IG's office ran a program called Operation Safe Home, which, of
course, raised important questions about whether the Office of
Inspector General should be in the business of running a
program at all, whether that is not a basic conflict with their
fundamental role.
The GAO found significant problems with the IG's accounting
for the Safe Home fund. In fact, the Congress has now
eliminated that program from the IG's purview.
We have been fortunate, and I want to express my
appreciation to David Williams, who is the Inspector General at
Treasury for Tax Enforcement, and who has been doing double-
duty by serving as Acting IG at HUD. He has been doing two jobs
at the same time and, by all accounts, he has been doing them
very well. And I want to express publicly the Committee's
appreciation to David Williams for undertaking this
responsibility.
He is a very highly regarded Inspector General amongst what
I guess one could term the inspector general corps.
Senator Allard, do you have an opening statement?
Senator Allard. I do not, no. I included my comments in my
previous statement.
Chairman Sarbanes. Does anyone else?
[No response.]
Mr. Donohue, if you would stand, I want to administer the
oath.
Do you swear or affirm that the testimony that you are
about to give is the truth, the whole truth, and nothing but
the truth, so help you God?
Mr. Donohue. I do.
Chairman Sarbanes. Do you agree to appear and testify
before any duly-constituted committee of the U.S. Senate?
Mr. Donohue. I do.
Chairman Sarbanes. Thank you very much, sir. Please take a
seat and we would be happy to receive your statement.
STATEMENT OF KENNETH M. DONOHUE, SR.
OF VIRGINIA, TO BE INSPECTOR GENERAL OF THE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Mr. Donohue. Thank you, Chairman Sarbanes.
Before proceeding further, Mr. Chairman, please allow me
the pleasure to introduce the members of my family that are
with me here today.
First, let me introduce my wife, Kathleen, who currently
works at the State Department and raised our wonderful sons
while I was traveling the world. Without her support and love,
I would not be here today.
Next is my eldest son, Kenneth Martin, who is a military
veteran and currently a Police Officer with the U.S. Mint.
Timothy Patrick is a Special Agent with the U.S. Secret
Service. And finally, my son, Brian Richard, who is a die-hard
Hokie of Virginia Tech and now a finance person with a
worldwide computer corporation.
I have been blessed with this family that has made many
untold sacrifices for me over the years. I am very proud and
love them very much.
You can gather by their names that I am of Irish ancestry
and I can assure you that my foreign-born parents would be
pleased to see their youngest son sitting before this
distinguished group of U.S. Senators.
As a child of immigrants--raised in a borough of New York--
I know that when my parents sought their dream in America, they
found opportunity in the city. That opportunity must continue
for others less fortunate.
I am deeply grateful to President Bush and Secretary
Martinez for according me the honor of this nomination and, if
confirmed, I will serve in this position with enthusiasm and
humility.
Chairman Sarbanes and Members of this Committee, I thank
you for your willingness to schedule this hearing given the
stress of other business during these very difficult times for
our country.
During my 21 years of Federal law enforcement with the U.S.
Secret Service, I have testified hundreds of times in Federal
court and before grand juries relating to criminal
investigations. First and foremost, I was taught that a good
witness should be brief and to the point.
Members of the Committee, I sit before you with admiration
to you for your service to the citizens of this country. The
potential opportunity to work with you in the future is an
enormous privilege and responsibility.
I can assure you that I am up to the challenge.
In my previous role as Section Chief of a headquarters
staff for the Office of Investigations at the Resolution Trust
Corporation, the RTC, and later as the Assistant Director, I
spearheaded our efforts and successful outcome of working with
the other related regulatory and Federal law enforcement
agencies from both the Department of Justice and the Department
of the Treasury.
When I arrived at the RTC in 1980, we had very few
employees assigned to investigations. Those numbers would later
grow to approximately 500 staff members located throughout 16
field offices that I indirectly supervised through four
regional directors.
By 1996, with a Congressional sunset mandate, we
successfully closed these offices and I returned to the Federal
Deposit Insurance Corporation. As a member of the national bank
fraud working group, we collectively addressed and reported our
efforts to Congress on the investigation of the failed savings
and loans.
This past governmental experience is not only relevant to
my prospective position at the Department of Housing and Urban
Development, but will prove to be extremely valuable in
performing the duties of Inspector General, if I am confirmed.
My past 5 years have been in the private sector consulting
on law enforcement and investigative issues. This also provides
a strong foundation for the task that lies ahead, if I am
confirmed. For example, I recently completed a multiyear
contract with a classified program at the Central Intelligence
Agency that interrelated with U.S. corporations.
I have learned firsthand that the corporate world, even
though guarded at times toward the Federal Government, has
enormous respect for those Government agencies that are
responsive to the will and concerns of the American people.
I am aware that HUD has been designated as high risk by the
General Accounting Office and criticized by its former
Inspector General. If confirmed, I pledge to you and our
citizens that I will be a strong manager and my office will
commit to the task of aggressively investigating waste, fraud,
and abuse. I intend to recruit the best talent to this office
and set the highest standards.
I will work with Secretary Martinez in achieving the shared
goal of eliminating fraud, waste, and abuse, and ensure that
taxpayer dollars go to the programs intended. I will do this
while jealously guarding the independence of the office of
Inspector General.
If confirmed, I will maintain an open and forthright
dialogue with both the Secretary and the Congress during my
tenure.
This I pledge and this I promise.
Finally, I enjoy a close relationship with many other
current Inspector Generals, and I will seek their advice and
counsel.
In this regard, I want to acknowledge and to thank the
current Inspector General for the Treasury Tax Administration,
Mr. David Williams, who has also served for the past 6 months
as the Acting Inspector General at HUD.
Thank you for the opportunity to appear before you this
morning. I stand ready to answer any questions you may have.
Chairman Sarbanes. Thank you very much, sir.
Let me just say at the outset that I think you are going
into a very challenging position that is not only the range of
activities in which HUD is engaged and the interaction it has
with both State and local governments and with the private
sector that require an active Inspector General's office, but
also at least some of us are very troubled by reports we have
received in terms of the functioning of the Inspector General's
office at HUD in recent years. I would like to explore that
with you a bit.
You have been, I take it, over at HUD now as a consultant
for how long a period of time?
Mr. Donohue. Four or five weeks, Senator.
Chairman Sarbanes. First of all, the previous Inspector
General had her own press operation. There was actually a press
operation in the Inspector General's office. Do you regard this
as an appropriate function for an Office of Inspector General?
Mr. Donohue. Senator, I see no need for a press office in
the Office of the Inspector General. I will address matters
that come to my attention from the press. In most cases, I
would suspect when they involve the work that we do, it will be
collectively done between ourselves and the Department of
Justice and we will respond to those accordingly. But I see no
reason to have such a press program in the Office of the
Inspector General.
Chairman Sarbanes. I think David Williams closed it down,
did he not, when he went over there?
Mr. Donohue. I am not aware of that, Senator.
Chairman Sarbanes. Operation Safe Home, which has now been
eliminated in the Fiscal Year 2002 HUD Appropriation Bill, I
just want to ask you about it so that we get some sense of how
you would go at the Inspector General's job.
Robert Murphy, General Counsel of the General Accounting
Office, in a letter to Representative Walsh on the House side,
August a year ago, raised concerns about the OIG taking
responsibility for running a program. Murphy wrote to Walsh:
We--meaning the GAO--are concerned about the impact the IG's
exercise of such programmatic authority may have on the IG's
personal and organizational independence. The letter went on to
point out the conflict of interest that this situation could
pose to the Office of Inspector General.
Now the previous Inspector General disagreed with those
conclusions, and I am interested in your view about the
appropriateness of the Inspector General's office itself
actually running a program. Do you have any view on that
question?
Mr. Donohue. Yes, Senator. I have been briefed about the
program. My understanding is that this program has been phased
out by Congress. I am also aware that they are moving forward
with regard to resolving the cases that they may have and hope
to have those resolved and transferred to the respective
Federal and State agencies by the end of March of next year.
I read the GAO report and I do find issue with the notion
of having an operational component such as this within the IG's
office. It seems to me that the IG's office must have total
uninvolved oversight of programs within the agency itself.
Chairman Sarbanes. Its job is to review the conduct of
programs by others, not to actually run programs itself, which
of course raises the question, if it does that, who reviews the
operation of those programs if the agency which is supposed to
be doing the review is running the program?
The GAO earlier this year released a report on Operation
Safe Home and found that the IG's office at HUD diverted some
$3.9 million from normal operations to pay the salaries and
expenses for that program. In addition, the report found that
of the $37.5 million in funding allocated to the Safe Home task
forces, 50 percent remained unspent and 25 percent remained
unobligated. Do you know the present status of the unobligated
and unspent funds?
Mr. Donohue. Senator, I do not. I need to look at the
expenditure. I am aware what the intention is, and my intention
would be to--Congress has seen fit to continue the budget for
this coming year and to reallocate those resources, I believe,
to programs that best serve HUD. And that is, programs such as
predatory lending and flipping tactics that have gone on
nationwide.
Chairman Sarbanes. Finally, let me just close out this
issue. My time is running out here.
Besides the questions about conflict in management of the
Operation Safe Home program, we have had called to our
attention a memorandum from an IG special agent to the prior
Inspector General, who was the special agent in charge, saying
that the IG agents must be instilled with a combat mindset and
a certain degree of ruthlessness.
The memo goes on to say that the civilized mindset of many
agents in the field will have to change. It must be replaced by
the fighting man's requisite ruthlessness. This means that our
agents may very well have to rip the mortal coil off a 10-year-
old kid or light up a woman, end of quote.
Now the thrust of this memo was trying to say, well, you
know, we are doing this Operation Safe Home. This is a
dangerous business and our agents really have to sort of be up
to it, which is a very important point that needs to be
registered on the agents.
On the other hand, this may underscore why Operation Safe
Home should not be done by the IG. That kind of work should be
done, it seems to me, increasingly by well-trained professional
law enforcement people who gear up to do exactly that kind of
activity and go through a very severe training program in that
regard. Are you at all familiar with this issue?
Mr. Donohue. I am a bit, Senator. And I can assure you that
what you refer to as cowboy tactics will not be tolerated.
I had the privilege of working for an agency that at one
moment, agents would be involved in sensitive investigations
and the next minute involved in the protection of the President
of the United States. The notion of presenting a professional,
thorough, committed organization that can do the task at hand
and that I believe the Inspector General is charged to do is
what their task will be.
If it involves training, training will be administered. But
they will apply their wares in the audit and investigations
area specifically to the true task that I see the IG has
responsibility over.
Chairman Sarbanes. Senator Allard.
Senator Allard. Thank you, Mr. Chairman.
It is no secret that I have been a strong advocate of the
Government Performance and Results Act, or simply some people
refer to it as the Results Act. This is an Act that requires
the Government agencies to create strategic plans based on
outcomes rather than processes. And these are measurable, which
is very key to outcomes as you set out some goals where you can
measure whether there is success or failure. Are you familiar
with the Results Act?
Mr. Donohue. Yes, in a way I am, Senator.
Senator Allard. Part of the responsibility that I view of
the Inspector General is to make sure that there is adequate
oversight on the programs and that the agency is following
through with what Congress intended. Will you work to ensure
that HUD utilizes this tool?
Mr. Donohue. Yes, I will.
Senator Allard. I understand you have been working at HUD
as a consultant for about 3 or 4 months. Is that correct?
Mr. Donohue. It seems like 5 weeks. It might very well be 6
or 7 weeks, I believe, after September 11.
Chairman Sarbanes. It seems like a lifetime sometimes.
[Laughter.]
Senator Allard. Apparently, you have been assessing
security issues at the agency. What has been your role in this
assessment?
Mr. Donohue. Yes, Senator. Thank you for the question.
I was asked to come over by the Deputy Secretary following
the September 11 events. I have an expertise in security. My
objective was to first bring together the HUD components that
have a direct involvement in the security requirements.
We have done that and created a working group. We have
addressed emergency evacuation plans. And probably best of all
is that I have had the opportunity to go out to various
colleagues at the Veterans Administration, Department of Labor,
and Justice, to team-up with them, and with some of their
concepts and notions, to ultimately ensure a safe environment
for the employees at HUD.
It is being proposed, that we will have people with
expertise going out to the field sites, which I believe is 85
sites, to look at their needs, their requirements, and to come
back and make those recommendations to an executive group to
implement those programs, where applicable.
One thing, I am also proud of, is that I had asked Mr.
Williams in the Inspector General's office to create an
Incident Assessment Center. Think of it as a command post where
employees can go, call up, address concerns, such as EAP
matters, but particularly concerns of anthrax scares and the
like.
They have become a central repository to be able to guide
those people through the appropriate address and to report to
911 or Federal protective service.
So it has worked effectively. They will create an office of
security, permanent office of security, to address these
matters following this terrible tragedy.
Senator Allard. Apparently, you think that this is very
important. Can you discuss why you think this is so important,
security at HUD?
Mr. Donohue. Senator, following September 11, as you I am
sure you will agree, is that employees were frightened. The
focus at HUD with regard to security had not existed and, for
the most part, the requirement did not necessarily exist.
I think that the need for this is great. I think the
Secretary, the Deputy Secretary have truly recognized the need.
One of the by-products, is that I have had a chance to work
with the senior staff and get to know them. As far as getting
them to know how I am and they are, and I think realizing that
this new job will require my need for independence and
objective response.
I think it has proven favorable as well.
Senator Allard. You have an extensive background in
investigations. I think it would help this Committee if you
could elaborate on your history and describe how this would tie
in to your work as Inspector General.
Mr. Donohue. Senator, I can identify with these agents. I
was a field agent for many years with the U.S. Secret Service.
I interviewed, I collected evidence and maintained that
evidence and worked closely with the Department of Justice. I
was fortunate, based on my ability, to be a Section Chief on
occasions in the U.S. Secret Service, where I managed agents to
perform fraud and forgery and counterfeit investigations.
I think I was a good manager.
I would later go on to the Resolution Trust Corporation.
When I got there, it was a very small organization. I was asked
to be a Section Chief and then asked later to be promoted to
the Assistant Director level.
That was a remarkable task because the agency had really
not existed before. So, I had to create programs. I had to
create programs like an Asset Search Program to address the
need for due diligence and how much of value it was to pursue
some of these wrongdoers in civil litigation.
I had to be responsible for the training of the personnel.
Many of the personnel had come out of the failed institutions,
but many came out of an investigative background, and paired
them up. We had to train them, train them in criminal
investigations, train them on civil fraud investigations.
The focus was to deal with the respective offices, to work
closely with the Department of Justice and the FBI to further
these cases along. That represented a community of probably
400-plus employees which would later be downsized and, by
Congressional mandate, terminated as was the RTC.
I returned to the FDIC and transferred what restitution
collections we had back to try and pursue those cases.
In 1997, as a result of the downsizing of the FDIC, I left
and went in to the private industry.
Senator Allard. Mr. Chairman, I have just one more
question.
Chairman Sarbanes. Sure. Go ahead.
Senator Allard. And then I will be finished.
Chairman Sarbanes. Yes.
Senator Allard. Have you thought about how you may apply
the Results Act to the Inspector General's office? You have a
separate entity out here and if you are going to ask of
everybody else how you put in measurable results and maybe
discuss that a little bit in your own Inspector General's
operation.
Mr. Donohue. Senator, that is a very good question. I think
I became sensitive to the results-based programs, after I left
the Government and went into private industry for the past 5
years. I came quickly to find out that your work better be of
top quality or you do not get paid.
So the notion of basing my resources, basing it on
performance, it seems to me, and will be, hopefully, the
benchmark. I know it is going to take some work. Dave Williams
and I both share the same sentiments.
I think it is a practical way to do it. This is taxpayers'
dollars, which I am very sensitive to. And I hope to have a
strategic plan in place shortly into my term, if I am
confirmed. I do see it as very important. I will make it
important in my program.
Senator Allard. Thank you, Mr. Chairman.
Chairman Sarbanes. Thank you, Senator Allard.
Senator Reed.
Senator Reed. Thank you very much, Mr. Chairman.
Welcome, Mr. Donohue, and good luck.
Your discussion of security issues, that is the current
assignment you have as a consultant to the Department. Is that
correct?
Mr. Donohue. That is right.
Senator Reed. Looking at security. To what extent do you
believe that will be an important part of your role as the IG?
Is it discrete, different functions?
Mr. Donohue. No, Senator. My intention is, if I am
confirmed, that the security responsibility will stay behind
and transfer on to a newly created Director of Security
position. I see no role with respect to the Inspector General
other than oversight.
Senator Reed. Thank you, Mr. Donohue. One other question.
In your analysis, do you have a bottom-line number of how much
money you believe that HUD needs to fully protect itself and
its employees?
Mr. Donohue. I am sorry, Senator. It is a bit premature. We
are just about ready to send some experts out to the field.
There has been vulnerability assessments returned
previously from the field. But these people are not experts. I
think we are going to have to have a hands-on. That is my
recommendation and I suspect that will--hopefully, conclude
itself. It begins January 2 and will wrap itself up sometime in
mid-June.
Senator Reed. Good. You have a very difficult job ahead of
you, if you are confirmed by the Senate. In some respects, you
are responsible for very little. In fact, I concur with the
feeling expressed by the Chairman that the programmatic
responsibilities of the IG should be close to zero. But, then,
again, you are responsible for everything because if something
goes wrong in the Department, it could have been avoided by an
effective IG.
You are an advisor to the Secretary, but you are also
charged with telling the Secretary some difficult truths at
times. You have to be perceived as someone who is open to
everyone in the organization, from the entry-level clerk to the
senior assistant if they feel that something is wrong in the
Department.
You have to be a colleague of the Secretary, give, in this
case, Mr. Martinez, good advice. But at some time, you might be
compelled publicly to communicate with the Congress and the
larger public.
I come to this appreciation not so much from looking at
civilian departments, but from spending some time in the Army.
Do you disagree with any of those characteristics of your
job?
Mr. Donohue. Absolutely not, Senator.
Senator Reed. And you are prepared to do all those things?
Mr. Donohue. I am, Senator. I have no hidden agenda, and I
will tell things as they are. I have had the opportunity to
meet with the Secretary. He has indicated to me, and I have no
reason to question his support, for independent investigations
and audits with regard to the Inspector General, and has also
indicated a willingness to implement such recommendations on a
timely basis.
Senator Reed. Good. It strikes me that a great deal of your
responsibilities will be looking at essentially financial
transactions--housing programs and whether funds have been used
appropriately, either by members of the administration or by
developers out in the country, in the cities, doing their work.
Do you feel that your background has prepared you for that? I
know you were at the RTC. Can you comment a bit about your
ability to manage people who have financial expertise?
Mr. Donohue. I understand. Senator, there is no question
that my strong side is investigations. I truly have a strong
sensitivity to the audit work. When I was in the U.S. Secret
Service, when we had requirements of that sort involving
financial reviews, we would call upon those agencies that had
audit experience.
At the Resolution Trust Corporation, we had components with
audit programs within the General Counsel's office. We would
hire that kind of expertise.
I found that the outcomes of my investigations and
recommendations were based on good audit review, and in a
timely way good reporting.
I do have a great deal of appreciation for that and I will
place that as the focus of my term, if confirmed.
Senator Reed. Part of your role, too, is to, again,
maintain this very delicate balance between being a colleague
and being a watchdog without one consuming the other.
I am sure there are examples of IG's that were so
collegial, that nothing got looked at. And then there are
examples that we have seen of IG's that were such watchdogs,
that they could not effectively communicate with their
colleagues, could not effectively do anything because they
became paralyzed in sort of personal, in some cases, acrimony.
Again, there is no formula for this or right answer, but I
would feel comfortable if you could appreciate that very
difficult balance.
Mr. Donohue. I do, Senator.
Senator Reed. Then, finally, too, you are going into an
organization, and Senator Sarbanes, the Chairman, has alluded
to certain issues, programmatic facts, some of the very
harrowing description of ripping the mortal coil of a 10-year-
old, et cetera, some of the ongoing controversy. One, do you
have an assessment at this point of the morale of the
organization; and two, do you go into that organization with a
very specific agenda to improve the morale? And I do not know
what the morale is. I am just asking you.
Mr. Donohue. Yes, Senator. I do have some thoughts.
First of all, I want to assure you that the senior staff
that I select, and I will have that opportunity, will be the
absolute best and qualified for that position. I demand that
and I insist upon that.
As to the agency itself, I think I must ensure the fact
that the audit and investigations staff are working
collectively, I was told by Mr. Williams, that the housing
fraud initiative is an example. They have worked together
collectively and have been very successful. I will encourage
that cooperation.
I do believe that there has been some communications
issues. We have had an Acting IG since June. If I am confirmed,
I will instill a professional policy and leadership of that
program to ensure that issues of this type will not happen, to
the best of my ability.
Senator Reed. Thank you very much, Mr. Donohue.
Mr. Donohue. Thank you, Senator.
Chairman Sarbanes. Mr. Donohue, I would like to pursue some
personnel issues with you because I think the challenge is just
enormous. And a number of personnel issues have arisen at the
OIG at HUD in recent years.
The Boston Globe, in February of this year, had a headline,
and I will read briefly from the article: ``Black Agent Claims
Retaliation At HUD. Latest Suit Seeks To Block Job Transfer.''
The agency that is supposed to root out crime in Federal
housing programs is being accused of institutional racism
carried out by an Inspector General who allegedly has ignored
wrong-doing by white executives while retaliating against black
agents who speak out about bias.
This is a suit that was brought by the highest-ranked black
agent in the Inspector General's office, saying he was being
sidelined into a new position as punishment for his suit
against Gaffney. He brought suit saying that she had recruited
and installed as her top investigator a white man with no law
enforcement background instead of him. He then brought suit
that she was then taking retaliation against him.
The Black Caucus in the House became very energized about
this issue, the NAACP, and the National Organization of Black
Law Enforcement Executives.
In the end, he received quite a substantial settlement from
the Government to resolve this dispute about the prior
Inspector General's conduct. This was not the only racial bias
issue that had been raised at the OIG under Ms. Gaffney.
So, I want to ask you first, just your own commitment to a
working environment that is an open and tolerant one. Are you
familiar with these various episodes taking place within the
IG's office? Have they been brought to your attention in your
preparation to take over this job?
Mr. Donohue. No, they have not, Senator Sarbanes. However,
I am familiar with what you just referenced from several
Washington Post articles, I believe, in May of this past year,
and prior to Ms. Gaffney's departure from HUD, which involved
the lawsuit of a senior staff member within the Inspector
General's office.
My response, Senator, is that I will not tolerate racist
behavior. I will not tolerate sexual harassment. That is
something that I will not accept. The advancement of my
personnel or my appointments will be based solely on their
capability and the knowledge of the job at hand. I assure you
that I will advise my senior staff that this is unacceptable
and that this will not happen, to the best of my ability.
Chairman Sarbanes. We are very concerned about what has
been going on down there.
Actually, Ms. Gaffney earlier this year wrote a memo
outlining disciplinary action against OIG's employees, driving
Government vehicles after drinking, misusing Government
computers for personal reasons, including downloading sexually
explicit material, altering the price of merchandise,
mishandling and misuse of firearms, misuse of Government
property. These are all things that she enumerated were going
on within her office. I think virtually all of the senior staff
down there either resigned or were forced out or took
retirement. It is pretty vacant at the top ranks, is it not,
down at the OIG's office at HUD?
Mr. Donohue. Yes, sir, it is.
Chairman Sarbanes. Of course, that gives you a real
opportunity to bring in some top-notch people who won't fool
around.
We had brought to our attention an affidavit filed by one
employee. I do not know if you have seen it. We are going to
refer it over to you, about engaging in sexual intercourse in
the office, all the rest of that. I do not know what kind of
hijinks were going on down there in the IG's office. So, you
have a Herculean task to clean out the stables.
Mr. Donohue. According to Mr. Williams, Senator, they
realize and know that a new person is coming into this
position. It has become rather clear to them, and it will
become clear to them as I come on, that this behavior will not
be acceptable and tolerated and will be dealt with very quickly
and effectively.
Chairman Sarbanes. Well, there is a strong feeling that her
favorites were not punished and the ones that were not her
favorites were punished, even though they engaged in the same
conduct, that sort of double-standard, which I do not think any
good administrator can have taking place within their
organization.
I really commend to you the idea of reviewing all of this
wrong-doing to make sure that the right decisions were made.
That thing has to be set back in the proper order. And I think
that is one of the major initial challenges that will confront
you.
I am not aware, and I do not know if you are, of other IG
offices that seem to have had such extensive personnel
problems.
Mr. Donohue. Nor am I, Senator.
Chairman Sarbanes. Let me just ask. I was curious about one
question. Do you know how other Inspector Generals handle
personnel decisions regarding disciplinary actions within their
office? In other words, the IG goes in and reviews the people
in the Department. So if you get allegations of this sort
taking place, the IG becomes an agency that reviews that. But
how do we get a review of the IG's office if this sort of thing
is going on? Do you have any thoughts on that?
Mr. Donohue. I do, Senator. What I am accustomed to, and my
notion supports this, is to have--call it an Office of
Inspection or Special Investigations, that will target matters
of this type.
It seems to me, Senator, that the IG, like all Federal and
State law enforcement agencies, must be above reproach. They
must set the standard with regard to the agencies. How can they
possibly go back and conduct investigations of HUD
organizations and not be able to stand up to the same scrutiny?
So, I believe Mr. Williams has begun that process. I will
install an Office of Inspection that will target such matters,
and, prevent them from happening. But when they do, they will
go to that matter directly and respond back to me for rapid
action.
Chairman Sarbanes. Have you had any conversations with Mr.
Williams as to whether he could remain available to you to
consult with and counsel with as you move into your
responsibilities?
Mr. Donohue. Mr. Williams and I have not only become
colleagues, but also good friends.
Chairman Sarbanes. I understand that because Mr. Williams
has indicated to us that you have established a good working
relationship. We value that opinion very highly because we
have, as I indicated earlier, a very high regard for Mr.
Williams.
Mr. Donohue. Also, there seems to be, what I have found, a
collegiality among the Inspector Generals throughout and within
the PCIE program. I have met them. Senator, I hope to call upon
them for ideas, suggestions, and possibly mimic some of their
programs that have effectively worked. I am a very open-minded
person and I would look upon them, and Dave Williams has
indicated a willingness to do that as we go along.
Chairman Sarbanes. I think that is a very constructive
attitude on your part as you move into these important
responsibilities.
Also, the General Counsel at the Department, Dick Hauser,
who we think is quite able, has also indicated his willingness
to work in an effort to clean up this IG's office.
Let me touch on one other issue.
We have received reports that the previous OIG undertook an
extensive effort to develop an information tracking system
separate and apart from the rest of HUD. The system was to be
called the OIG Audit Support Investigative System--OASIS.
Apparently, the system was in development for over 2 years at a
cost of $4 to $5 million. The system was never put on line.
Have you had a chance to become acquainted with this failed
effort?
Mr. Donohue. Senator, I have not.
Chairman Sarbanes. If you could take a look at that, I
think it would be important to do that. It is my understanding
that the OIG continued to contract out its IT function, rather
than use HUD's existing system, even though using HUD's system
would have been considerably cheaper.
It sounds like the IT systems at the IG's office are a
mess. I commend that to you. In fact, I think after you have a
reasonable period of time to try to straighten out the office,
we might want to have a hearing just to see where things are.
You would have a chance to review things very carefully and put
in an action program in order to correct a lot of these
deficiencies.
There was a constant clash going on between the IG and the
previous Secretary at HUD. That was attributed to personality
clashes and so forth and so on. But it seems that what happened
is that in the furor of the personality clash, not enough
attention was being paid really to the workings of the IG's
office--on personnel, on information technology, of this whole
range of issues that we have touched upon here.
You have a double-challenge, it seems to me. First is to
get the IG's office itself into shape. And the other, of
course, and the real responsibility of the IG's office, is to
supervise, to review, and to oversee the workings and the
programs in the Department.
You should not have to do the first, but that is the
situation that has been left to you, unfortunately, although I
think that David Williams has been addressing at least some of
those issues.
I have no further questions.
Senator Allard.
Senator Allard. No further questions, Mr. Chairman.
Chairman Sarbanes. Well, thank you very much, sir.
Mr. Donohue. Thank you, Senator.
Chairman Sarbanes. We appreciate your appearance before the
Committee, and we are also very pleased to welcome your family
that is here with you today.
The hearing stands adjourned.
[Whereupon, at 11:12 a.m., the hearing was adjourned.]
[Prepared statement, biographical sketches of nominees, and
additional material supplied for the record follow:]
PREPARED STATEMENT OF SENATOR WAYNE ALLARD
I would like to thank Chairman Sarbanes for holding this hearing.
Our witnesses today are both nominated to key positions under the
Committee's jurisdictions, and I am pleased that the Chairman has moved
to fill the vacancies.
First, I would like to welcome Ken Donohue to the Banking
Committee. Mr. Donohue is nominated to be the Inspector General for the
Department of Housing and Urban Development. I believe that this is one
of the most important positions at HUD. It is critical that we have an
Inspector General in place to help ensure that we continue to see
progress on management reform.
As the Ranking Member, of the Subcommittee on Housing and
Transportation, I have seen firsthand how helpful the reports of an
Inspector General can be. The Inspector General acts as the eyes and
ears of the Congress and is expert at rooting out fraud, waste, and
abuse.
I believe that Mr. Donohue's background will serve him well in his
new position. He has extensive experience in criminal and investigative
matters, and he is a certified fraud examiner.
We have an obligation to both the taxpayers and those who utilize
HUD programs to ensure that money is well spent. Mr. Donohue
understands this obligation, and I look forward to the opportunity to
work with him.
I would also like to welcome Mr. Joe Grandmaison to the Banking
Committee. He is nominated to be a Member of the Export-Import Bank's
Board of Directors.
The Banking Committee has spent a good deal of time this year
working on the reauthorization of the Export-Import Bank. During this
work I have raised several concerns. First, I would like to see the
Bank increase its small business work. Although I am pleased that the
Bank does a significant volume of its deals with small business, I
would like to see the dollar value of those deals increase. I sponsored
an amendment to increase the small business goals, and I was pleased to
have it accepted by the Committee.
My second amendment concerned establishing an Office of the
Inspector General at the Bank. As my previous comments have indicated,
I strongly believe in accountability and in good government. The
Export-Import Bank is the only Government agency offering direct loans
and loan guarantees that does not have an Inspector General. I believe
that an Inspector General will give the Bank greater credibility and
will bolster the work that they do to oversee themselves. I am hopeful
that Mr. Grandmaison can be helpful as we continue to work to resolve
this matter.
I look forward to hearing from our witnesses today. I am very
hopeful that the Committee will be able to schedule a markup quickly so
that these nominees can be confirmed by the Senate before we complete
our business for the year.
NOMINATIONS OF:
DIANE L. TOMB, OF VIRGINIA
TO BE ASSISTANT SECRETARY OF
PUBLIC AFFAIRS, U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
AND
VICKERS B. MEADOWS, OF VIRGINIA
TO BE ASSISTANT SECRETARY FOR
ADMINISTRATION, U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
----------
TUESDAY, DECEMBER 18, 2001
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 2:50 p.m., in room SD-538 of the
Dirksen Senate Office Building, Senator Paul S. Sarbanes
(Chairman of the Committee) presiding.
OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES
Chairman Sarbanes. The Committee will come to order.
I am sorry that we were delayed in getting the hearing
started. I think before I make my opening statement and turn to
Senator Gramm, other Members of the Committee, and swear in the
witnesses, I will turn to Congressman Portman because I know
that he may well have some conflicting obligations over on the
House side, and we very much appreciate his coming today. Why
don't you go ahead. We will be happy to hear from you.
STATEMENT OF ROB PORTMAN
A U.S. REPRESENTATIVE IN CONGRESS FROM
THE STATE OF OHIO
Representative Portman. Mr. Chairman, thank you very much
for the privilege of being able to be here this afternoon to
talk a little bit about my former colleague, Diane Tomb.
Senator Gramm, good to see you again. Thank you for having
me. Senator Reed, good afternoon.
Diane has been nominated for the position of Assistant
Secretary of Housing and Urban Development for Public Affairs.
She has a strong background in housing matters. Her most recent
position is as Senior Vice President for Communications at the
Fannie Mae Foundation, which had her overseeing efforts to
educate the public about affordable housing and homebuying
processes. They are the biggest housing foundation in America
and she received good experience there.
In addition to that, she has a lot of experience in public
affairs, having worked prior to Fannie Mae as the Director in
the public affairs practice at the Washington office of
Burston, Marstellar.
I got to know her in the Bush Administration a few years
ago, the first Bush Administration, where I was in legislative
affairs and she was in the press office. We worked on a number
of projects together and I was always impressed with her work
ethic, her creativity, her approach to problems, and her
effectiveness.
She is a person who gets things done and has the kind of
strong character with that background that I think would be
appropriate for this very important position.
She also cares a lot about housing. We talked a little bit
before the hearing, Mr. Chairman, about some of her efforts at
Fannie Mae and some of her objectives at HUD.
I think that she would be a great asset, not just to the
Bush Administration, but also to this Committee, frankly, and
to the House Committee, to promote issues that we all care
about in terms of availability of housing.
She is the person who has the kind of background skills
that I think we should encourage in terms of public service.
I am delighted she is interested in reentering public
service, and I urge that she be given favorable treatment by
this distinguished panel, and go on to be able to serve
President George W. Bush.
I thank you again, Mr. Chairman, for allowing me to be able
to be here this afternoon.
Chairman Sarbanes. Thank you very much for coming. We
appreciate it. I know that you have to excuse yourself, but
thank you.
Representative Portman. Thank you, sir.
Chairman Sarbanes. This afternoon, the Committee meets in
order to consider the nominations of Diane Tomb, the nominee to
be the Assistant Secretary for Public Affairs, and Vickers
Meadows, the nominee for the position of Assistant Secretary
for Administration, both at the Department of Housing and Urban
Development.
Secretary Martinez spoke to us about his desire to try to
get his people into place before this Congress concludes, and
so, we have scheduled this hearing on rather short notice in
order to try to respond to the Secretary's request. In fact,
these nominations came to us only recently, and we are very
willing to try to assist the Secretary in his efforts to get
his team into place. I want to thank my colleagues for their
response in that regard.
Diane Tomb has had extensive experience in the field of
public relations, most recently, as Congressman Portman
indicated, as Senior Vice President for Communications at the
Fannie Mae Foundation. Prior to that, she was a Vice President
and Director for Burston Marstellar, and has held a number of
positions in the public affairs field.
Vickers Meadows--another Texan, I might observe, to my
colleagues--was in charge of administration in the office of
then-Governor Bush in Texas. She's originally, though, from
Alexandria, Virginia, and she's had previous work in the White
House. In fact, she has been working in White House management
for the first part of this year.
So, we are very pleased to have both nominees before us.
Senator Gramm, I yield to you for any statement.
COMMENTS OF SENATOR PHIL GRAMM
Senator Gramm. Mr. Chairman, first of all, let me thank you
for holding this timely hearing. There are various complaints
raised about whether or not we are moving fast enough on
nominees, and some chairmen perhaps are subject to the
complaint that we are not. But none of that would apply to you,
and I want to thank you very much.
Chairman Sarbanes. Thank you.
Senator Gramm. It seems to me, Mr. Chairman, we have two
people before us that have extensive experience in the
Department of Transportation, the Department of Commerce, and
various parts of the White House, the Executive Branch of
Government. I believe they are eminently qualified and I again
want to thank you for this timely hearing.
Chairman Sarbanes. Thank you.
Senator Reed.
COMMENTS OF SENATOR JACK REED
Senator Reed. Thank you, Mr. Chairman.
Mr. Chairman, I want to thank you for expeditiously holding
this hearing. I also want to congratulate the nominees before
us today. I do not have an opening statement.
Chairman Sarbanes. It is the practice of this Committee to
place nominees under oath. So, I would ask you both to stand so
that I can administer the oath.
Do you swear or affirm that the testimony that you are
about to give is the truth, the whole truth, and nothing but
the truth, so help you God?
Ms. Meadows. I do.
Ms. Tomb. I do.
Chairman Sarbanes. Do you agree to appear and testify
before any duly-constituted committee of the U.S. Senate?
Ms. Meadows. I do.
Ms. Tomb. I do.
Chairman Sarbanes. Thank you very much. Please take your
seats and we would be happy to hear from you.
Ms. Tomb, why don't we start with you, and then we will go
to Ms. Meadows.
STATEMENT OF DIANE L. TOMB, OF VIRGINIA
TO BE ASSISTANT SECRETARY OF PUBLIC AFFAIRS
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Ms. Tomb. Thank you, sir.
Chairman Sarbanes, Ranking Member Gramm, and distinguished
Committee Members, it is a privilege to appear before you today
as the nominee for Assistant Secretary for Public Affairs for
the U.S. Department of Housing and Urban Development. And thank
you, Congressman Portman, for your kind introduction.
I am honored that Secretary Martinez and President Bush
have nominated me to serve in this position, and, sir, I would
like to thank you again for taking this time out of your busy
schedule. I appreciate your going forward with this.
I would like to introduce my parents, my husband, and my
in-laws who are here with me today, sitting behind me. Paul and
Beth Tomb, my husband, Mark Tomb, and my parents, Sally and
Tony Leneghan. They came down from Philadelphia this morning by
train. The timing worked very well for us.
Chairman Sarbanes. We are very pleased to have them here.
Ms. Tomb. My children are not here today. I thought I would
spare you all two year-olds running around wildly, but I would
like to acknowledge my daughter, Emma, and my son, Shane,
because they are a big part of our lives as well.
My parents came to this country from Ireland in 1959, in
search of opportunities. They chose America on my behalf and I
cannot be more grateful for that choice than I am today.
The U.S. Department of Housing and Urban Development's core
mission is to help families find decent, affordable housing and
to find solutions to community development challenges in
America. Creating opportunities for all Americans to become
homeowners is a fundamental component of HUD's mission.
Of course, the other issues considering affordability,
availability, and educating people on predatory lending
practices and other things, are other areas that HUD focuses
on.
The Public Affairs Office at HUD plays a very essential
role in educating and in informing the public about HUD's
initiatives. If confirmed, I look forward to keeping the media
and all interested parties informed on HUD's work. I believe an
informed public is crucial to the democratic process and leads
to better policymaking from which we all benefit.
My career has been centered around communications, most
often and most rewardingly, on public education campaigns. I
have spent the last 4 years developing ways to communicate the
importance of homeownership and demonstrating how owning a home
is a gateway to opportunity and improvement for individuals,
families, and communities. It is an honor to continue to focus
on these important issues at HUD, if confirmed.
Work in the realm of housing becomes a lot more personal
when we remember that it all boils down not to numbers and
reports, but to a real and unmistakable impact on the lives of
individuals, families, and kids. At the end of the day, HUD
exists for one reason only--to make life better for people.
There is, of course, much more on the agenda, and I hope
you will see fit to approve my appointment so that I might
contribute to this work.
With your approval, my role will be to keep the public
informed of this agenda, as directed by the Administration.
Thank you again for this opportunity to address you today.
This concludes my testimony. I am prepared to answer any
questions or comments you may have.
Chairman Sarbanes. Thank you very much.
Ms. Meadows.
STATEMENT OF VICKERS B. MEADOWS, OF VIRGINIA
TO BE ASSISTANT SECRETARY FOR ADMINISTRATION
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Ms. Meadows. Chairman Sarbanes, Senator Gramm, and
distinguished Members of the Committee, thank you for inviting
me here today.
I would like to introduce my husband, James Meadows, behind
me, whose support I very much appreciate.
It is an honor to be nominated for the position of
Assistant Secretary for Administration at the U.S. Department
of Housing and Urban Development. I am very grateful for the
confidence that President Bush and Secretary Martinez place in
me.
My experience in administration spans over 20 years. I have
served in an administrative management position for over 10
years in the following organizations: The Office of the Vice
President; the Office of the Executive Secretary at the U.S.
Department of Transportation; and the Office of the Governor of
the State of Texas. My experience in administrative services
and management provide a solid foundation for the Assistant
Secretary for Administration position at HUD.
I am committed to the responsibilities and challenges that
come with this position. Under Secretary Martinez's leadership
and, if confirmed, I am confident that we will move the HUD
organization to a more efficient and effective operation.
Thank you again for the opportunity to appear before you
today. Your time and your consideration are appreciated.
Chairman Sarbanes. Thank you very much. I am going to yield
to Senator Gramm. He has a conflicting engagement and before he
goes, I want him to have an opportunity.
Senator Gramm. Mr. Chairman, thank you, as always, for your
kindness. We appreciate your holding this hearing.
I intend to support both our nominees. We have a lot of
work to do at HUD. I think we are all impressed with our new
Secretary. I think this Committee is very open to ways we can
improve on our programs to try to help people have decent
housing and to maximize the number of people who can have their
own home.
I do not have any questions and again, I want to thank you,
Mr. Chairman.
Chairman Sarbanes. Thank you.
Ms. Tomb, your work at the Fannie Mae Foundation, I know
that the Foundation has done a lot of work on the homeless
situation. I wondered whether you were involved in that aspect
of the Foundation's work?
Ms. Tomb. Yes, sir. Actually, serving the homeless and
identifying ways to come up with solutions to the homeless
problem is one of the top priorities of the Fannie Mae
Foundation.
I personally was responsible for the Help the Homeless
Walk, which is done here in Washington every year. Every year
we have increased--this year I think was the highest. I wasn't
personally involved because I had already left the Foundation
by November. But we worked on this throughout the year, and we
had more than 40,000 individuals, young folks, as well as folks
like myself, who are much older, involved.
I believe last year we raised $5 million and the goal this
year was $6 million, which is the largest effort across the
country to help the homeless.
I think that one of the most impressive things of the Help
the Homeless effort is that 98 percent of that money goes to
nonprofits here in Washington. So the Fannie Mae Foundation
covers all of the administrative costs and all the money raised
goes directly to the nonprofits. There are over 150 service
providers in the metropolitan area.
Chairman Sarbanes. It is a terrific program. Do you think
that the homeless problem is as much of a priority at HUD as it
is at the Fannie Mae Foundation? Or if it is not, do you think
you could help make it so?
Ms. Tomb. If confirmed, sir, I will do my best to address
the issues as they arise.
Chairman Sarbanes. I think there is a real opportunity
there. Do you have any thoughts about this continuum of care
with respect to the homeless, a sort of comprehensive approach
to the homeless problems? Do you have any sense about that
question?
Ms. Tomb. Again, sir, if confirmed, I will do my best to be
up to speed on that issue.
Chairman Sarbanes. Yes.
Ms. Tomb. From what I know from my background, it is
obviously something that needs to be addressed. I think there
are lots of different approaches that would be effective.
Again, if confirmed at the Department of Housing and Urban
Development, we will be able to approach that problem.
Chairman Sarbanes. Ms. Meadows, the GAO has done a number
of recent studies on issues that would actually involve the
administration to HUD. Actually, they did two studies late this
year on problems with the information systems at HUD. Have you
had a chance to be briefed by the GAO about these studies or
about the problems that they have identified?
Ms. Meadows. No, sir, I have not. But I look forward to the
opportunity. I realize that there are important issues with
regard to IT and Federal agencies, and I, if confirmed, will
make that a top priority at Housing and Urban Development.
Chairman Sarbanes. What is your perception of the current
state of affairs with respect to administration at HUD? Do you
have any sense of that?
Ms. Meadows. Well, I am in the process of ascertaining the
state of affairs. I have been on board as a consultant for a
week and am learning as quickly as I can. But I feel that, if
confirmed for this position, I will have a better opportunity
to get in and assess the strengths and weaknesses and will get
to work on fixing what needs to get fixed.
Chairman Sarbanes. Of course, at one time GAO labelled HUD
a high-risk agency. They have removed that rating. To what
extent do you perceive HUD as still being in the high-risk
status in terms of the operations of the Department?
Ms. Meadows. I do not know the answer to that and I really
do not want to speculate on that until I have an opportunity to
get in and again assess the situation. I haven't had any reason
to think there are any crises at this time.
Chairman Sarbanes. Senator Reed.
Senator Reed. Thank you very much, Mr. Chairman.
Welcome, ladies, and thank you for your testimony.
Ms. Tomb, following along on the theme that Senator
Sarbanes set, and that is, part of your job is to--the right
term might be or might not be--defend the Department. But one
of your reforms I think is to try to focus attention on the
housing issues that Americans confront today. Many of us feel
that there is a real crisis in housing in terms of
affordability, accessibility, that not only affects where one
lives, but also if one can be an effective student in school if
you are a child and on and on and on. And so, I would ask
simply, is it your intention not only to defend the Department,
but also to illuminate the issues of housing in this country?
Ms. Tomb. Thank you, sir. If confirmed, I think it is
important that all of those issues become top priority for
everyone. And so, one of my goals will be, again, if confirmed,
sir, to communicate the importance of housing and community
development and how it affects all aspects of people's lives.
Senator Reed. Thank you.
Ms. Meadows, what do you believe are the biggest challenges
you face? Again, Senator Sarbanes, I think set the context very
well. This is an agency that has been criticized routinely by
GAO. This is an agency that has been beaten about the head and
shoulders by many in the Senate and the House, sometimes I
think as an after-the-fact justification for not putting enough
money into housing programs in this country. But, nevertheless,
as you contemplate taking this role, what are the key
challenges you see in terms of the administration of HUD?
Ms. Meadows. Well, I see going in and looking at the
policies and procedures and the systems. It is a big agency.
Making the Department more accountable for the systems, the
procurement, the IT, the internal infrastructure, making sure
that there are accountability measures in place, that there are
performance measures in place with outcomes, and ensuring that
the program offices have the resources they need to get their
jobs done.
Senator Reed. What are the important procurement issues
that are facing the Department, since I believe that that will
be part of your responsibilities?
Ms. Meadows. If confirmed, that will be one of my top
priorities, to look at the procurement processes, and the IT
processes. I have not had the opportunity to get in and really
assess the strengths and weaknesses of the different programs.
But that will be a top priority for me if I am confirmed.
Senator Reed. In your prior experience, and you have
administrative experience as indicated in your resume, how many
people generally were you supervising? What was the size of the
agencies? I know that the Department of Transportation is
significant. Is that comparable to your responsibilities at
HUD, in your view?
Ms. Meadows. No, the staff was not as big in the Office of
the Executive Secretary. We certainly had responsibility to
provide support for all of the offices within the U.S.
Department of Transportation. I have a similar function here.
If confirmed, my responsibility will be to provide resources to
all the offices.
It is a larger staff but I certainly won't be responsible
for each individual one. They have managers and supervisors. I
see the Assistant Secretary for Administration having five or
six direct reporters who will have large staffs and have the
expertise and have been there a long time and I will rely on
that.
Senator Reed. Well, you are entering into this position at
a time when the agency has improved. That is clear. GAO has
taken them off their--whatever the proper term.
Ms. Meadows. High risk.
Senator Reed. Their high-risk agency list. And your goal is
not only to keep them off that list, but also to improve the
performance of the agency dramatically because, ultimately, it
is about spending resources wisely on housing, not on
administration. So, you have that task.
I wish you well.
Ms. Meadows. Under Secretary Martinez's leadership, I think
we will leave it better off than we found it.
Senator Reed. I hope so. We are going to try to make sure
that happens, in our own meager way.
Finally, Ms. Tomb, I am just intrigued. Where do your
parents come from in Ireland?
Ms. Tomb. They are sitting right here behind me. They are
from County Mayo in the western part of Ireland.
Senator Reed. County Mayo. Well, that alone is commendable.
Ms. Tomb. Yes, I know.
[Laughter.]
Senator Reed. Thank you, Mr. Chairman.
Ms. Tomb. Thank you, sir.
Chairman Sarbanes. Ms. Meadows, I want to pursue this
procurement issue which Senator Reed raised.
One of the reasons HUD received this high-risk rating from
the GAO was the poor oversight of procurement. Now to deal with
that, or in response to that, Secretary Cuomo hired a Chief
Procurement Officer. But he had that officer report directly to
him or the Deputy Secretary. So they, in effect, elevated the
Procurement Officer in an effort to sort of clear up that
problem. The National Academy of Public Administration said
this change was a key reason for improvement in the procurement
in the Department.
Now HUD has restructured the Office of Administration so
that the Chief Procurement Officer will report to the Assistant
Secretary instead of directly to the Secretary. And I guess
there is some concern about what will happen to procurement
reform under this arrangement.
I do note that apparently, the Chief Procurement Officer at
HUD who was the one who sort of did the improvements that
received this favorable or laudatory comment from the National
Academy of Public Administration, has retired. So what is your
thinking on this procurement issue?
Ms. Meadows. I think procurement is a very important part
of any Federal agency's functions. I certainly am not well
versed on the procurement situation at HUD at this point in
time. I do not really want to speculate on whether that was
good or bad.
I was a procurement officer years ago. I understand the
importance of procurement and I can assure you that I will be
spending a lot of time making sure that the procurement reforms
that are in place are still intact.
Chairman Sarbanes. I guess your immediate challenge will be
to get a new procurement officer.
Ms. Meadows. Yes, sir. There are some procedures in place,
or there are candidates, I understand, that have been brought
forward. But I have not been part of that process.
Chairman Sarbanes. It is a tremendous challenge. We have
had a lot of difficulty with HUD and its administration over
the years. As Senator Reed has pointed out, it is an issue in
which this Committee has interested itself, almost by
necessity. It is an issue that obviously we will be monitoring
closely as we proceed ahead.
But it is a very large agency and, unfortunately, it has
had these problems, so serious at one point that they received
this high-risk designation, which not all that many--thank
goodness--agencies--well, I was going to say achieve, but I
guess a better way to put it would be sink to or something of
that sort.
We are very concerned about the operations of HUD.
Ms. Tomb, the only other thing I want to raise with you is
many of these HUD programs are very complex. You have probably
seen that from your work at Fannie Mae, with the Foundation.
I think some thought needs to be given as to how the
Department communicates with the general public about what it
is trying to do and how it is trying to do it.
I think the public does not fully understand the importance
of the work and exactly how HUD is going about and trying to
accomplish its objectives. And presumably, that is a matter
that will fall under your jurisdiction. Have you had any chance
to talk with the Secretary about that?
Ms. Tomb. I have not had a chance to talk to him directly
about that, sir. But in the interview process, it was
definitely something that came up. He was very concerned about
the perception, in many cases, rightfully so, that exists.
If confirmed, one of the first things I would like to do is
really work with the current staff there to come up with some
techniques and some alternative uses of the resources we have
to communicate to those who we interact with most, and that
would be the consumers.
With my background I feel I can bring a lot from the public
education campaigns that I have worked on. For instance, we did
one on educating people on the importance of credit,
particularly in the low- to moderate-income. There were some
cultural differences in how people approach credit and
understanding that if you pay your bills late, even if they are
late, that there still are some adverse effects of that.
So, I believe, if given the opportunity, that I will make
it a priority to really be thoughtful about how do we educate
people on the importance of HUD and the work that we are doing,
and try to overcome the public perception that exists of HUD,
and to talk about the good work that we will be doing.
Chairman Sarbanes. Thank you.
Senator Reed, any further questions?
Senator Reed. No, Mr. Chairman. Thank you.
Chairman Sarbanes. Thank you both very much for appearing
before the Committee.
The hearing stands adjourned.
[Whereupon, at 3:17 p.m., the hearing was adjourned.]
[Prepared statements and biographical sketches of the
nominees supplied for the record follow:]
PREPARED STATEMENT OF DIANE LENEGHAN TOMB
Assistant Secretary of Public Affairs-Designate
U.S. Department of Housing and Urban Development
December 18, 2001
Mr. Chairman, Senator Gramm, and distinguished Senators, it is a
privilege to appear before you today as the nominee for Assistant
Secretary of Public Affairs for the U.S. Department of Housing and
Urban Development. And thank you Congressman Portman for your kind
introduction.
I am honored that Secretary Martinez and President Bush nominated
me to serve in this position, and that you are taking the time to
consider my nomination.
Joining me are my husband, parents, and in-laws. As proud as I am
to be here, they are pretty excited, too.
My parents came to this country from Ireland in 1959 in search of
opportunities. My parents chose America on my behalf. I could not be
more grateful for that choice than I am today.
The U.S. Department of Housing and Urban Development's core mission
is to help families find affordable, decent housing and to find
solutions to the housing and community development challenges in
America. Creating opportunities for all Americans to become homeowners
is a fundamental component of HUD's mission.
The Public Affairs Office at HUD plays an essential role in
educating the public about HUD's initiatives. If confirmed, I look
forward to keeping the media and all interested parties informed on
HUD's work. I believe an informed public is crucial to the democratic
process and leads to better policymaking.
My career has been centered on communications, and most often on
public education campaigns. As the Senior Vice President of
Communications at the Fannie Mae Foundation, I have spent the last 4
years developing ways to communicate the importance of homeownership
and demonstrating how owning a home is a gateway to opportunity and
improvement for individuals, families, and communities. It is an honor
to continue to focus on these important issues.
America is now in a renaissance of homeownership. More than 70
million families own their own home. This is as high as that number has
ever been, and it encourages us to spread the opportunity to even more
people. In particular, I look forward to being a part of HUD's effort
to reach out to America's minority communities that do not yet share in
the same high level of homeownership. Secretary Martinez has asserted
that one of HUD's top priorities will be just that, and that it will be
worth the effort.
Work in the realm of housing becomes a lot more personal when we
remember that it all boils down not to numbers and reports, but to a
real and unmistakable impact on the lives of individuals, families, and
kids. At the end of the day, HUD exists for one reason only: To make
life better for people.
With your approval, my role will be to keep the public informed of
this agenda as directed by the Administration.
Thank you again for this opportunity to address you today. This
concludes my testimony. I am prepared to answer any questions or
comments you may have.