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Public Statements

Hearing of the Senate Finance Committee

By:
Date:
Location: Washington DC

July 7, 2004 Wednesday

SECTION: CAPITOL HILL HEARING

HEADLINE: HEARING OF THE SENATE FINANCE COMMITTEE

SUBJECT: NOMINATIONS

CHAIRED BY: SENATOR CHUCK GRASSLEY (R-IA) J. RUSSELL GEORGE, TO BE INSPECTOR GENERAL FOR TAX ADMINISTRATION, U.S. DEPARTMENT OF THE TREASURY; PATRICK P. O'CARROLL, JR., TO BE INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION; TIMOTHY BITSBERGER, TO BE ASSISTANT SECRETARY OF THE TREASURY, U.S. DEPARTMENT OF THE TREASURY; PAUL JONES, TO BE MEMBER OF THE INTERNAL REVENUE SERVICE OVERSIGHT BOARD, DEPARTMENT OF THE TREASURY

LOCATION: 215 DIRKSEN SENATE OFFICE BUILDING, WASHINGTON, D.C.

BODY:

SEN. CHUCK GRASSLEY (R-IA): Good morning, everybody. We have the opportunity this morning to consider four nominations. First, we will hear from Mr. Russell George, who has been nominated by the president to serve as inspector general for Tax Administration at the Department of Treasury. Mr. George currently serves as inspector general at the Corporation for National and Community Service. Throughout his long and distinguished career in public service he has served as staff director of the House Governmental Reform Committee, Subcommittee on Government Efficiency, Financial Management, Intergovernmental Relations. He's also served in the White House during the first Bush administration.

We will then go to Patrick O'Carroll, who has been nominated to serve as inspector general of Social Security. Mr. O'Carroll currently serves as the Office of Inspector General at Social Security, and as assistant inspector general in the Office of Investigations. Mr. O'Carroll worked with me both in my capacity as Finance chair, as well as when I was chair of the Aging Committee.

We will also hear from Timothy Bitsberger, who has been nominated to the position of assistant secretary Financial Markets within the Department of Treasury. Since October 2002, Mr. Bitsberger has served as deputy assistant secretary Federal Finance at the Department of Treasury and he has great experience in financial markets, both at the Department of Treasury as well as the private sector.

Finally, we will hear from Paul Jones, who has been nominated to be a member of the IRS Oversight Board. Mr. Jones currently serves as senior vice president of Time Warner Telecom.

I would like to welcome you all to the Finance Committee hearing. And we have an opportunity to have our colleague, Senator Sununu of New Hampshire, introduce one of the nominees.

Mr. Sununu.

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SEN. GRASSLEY: Well, we thank you very much for taking time out of your busy schedule to come and introduce Mr. George. And if Senator Baucus doesn't have any questions of you, you can go and then I'll have Senator Baucus --

SEN. SUNUNU: I'm happy to answer any questions. I'm sure you'll find more substance and directness in Russell's responses, but I'm happy to answer questions as well.

SEN. GRASSLEY: Okay. And if you don't, then you go with your opening statement.

I did mine, yeah. And then we'll call the witnesses and then do that.

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SEN. GRASSLEY: Senator Baucus, you gave a very complete statement. I didn't give that long a statement and I'm glad that you did because it's important that we point out in our oversight capacity that we're concerned about who holds these positions. Wherever there is independence, whether it's in an inspector general or whether it's a member of an oversight board, all those things, I want to emphasize that there is certain amount of independence and I expect people appointed to those positions to exercise that independence in order to have the integrity of the office and the goals that Congress wanted to accomplish in setting up the office actually be performed.

Now, what we'll do is, starting with Mr. George and then Mr. O'Carroll and then Mr. Bitsberger and then Mr. Jones, we'll ask each of you to give whatever statement you want to give to us. But a longer statement would just be automatically put in the record without your asking, and we would ask you to summarize. And we would also invite you to introduce-well, let's say each of you should introduce before you speak family members that you want to be recognized and that we welcome here, and that they ought to be very proud of you for the acknowledgement of ability that your appointment represents.

So we'll start with you, Mr. George.

MR. J. RUSSELL GEORGE: Thank you, Mr. Chairman. At the outset I'd like to introduce both my mother and father, who traveled from New York to be with me today. And I would also like to just say to them thank you for --

SEN. GRASSLEY: Thank you for standing.

MR. GEORGE: -- instilling in me the values that afforded me this opportunity. I love them very much.

SEN. GRASSLEY: Thank you very much. Now Mr. --

And congratulations to you as parents.

Mr. O'Carroll.
MR. PATRICK P. O'CARROLL: Thank you, Mr. Chairman. At this time I'd like to introduce my wife, Elaine O'Carroll, who has been with me for the last 24 years and has stuck with me through thick and thin.

SEN. GRASSLEY: Very good.

Mr. Bitsberger.

MR. TIMOTHY BITSBERGER: Thank you, Mr. Chairman. I'd like to introduce my wife Cheryl (ph), the mother of our four-year-old twins.

Thank you.

SEN. GRASSLEY: Thank you.

And now you --

SEN. BAUCUS: How old are your twins?

SEN. GRASSLEY: Yes, four.

SEN. BAUCUS: Four.

SEN. GRASSLEY: Now, Mr. Jones.

MR. PAUL JONES: Mr. Chairman, thank you. I'd like to introduce my wife Ruth of six years, who's behind me and has stood behind me faithfully and I thank her for that.

SEN. BAUCUS: That reminds me. This reminds me, this is probably inappropriate. I was at an event not long ago, Mr. Chairman, where a man was honored. He said, "Behind every successful man there's a surprised wife."

(Laughter.)

I don't think she's surprised.

SEN. GRASSLEY: Now, Mr. George-we're going to go through all of the opening statements.

So, Mr. George, would you start out?

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SEN. GRASSLEY: Thank you, Mr. George.

Now Mr. O'Carroll.

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SEN. GRASSLEY: Thank you.

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SEN. GRASSLEY: Mr. Bitsberger, thank you.
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SEN. GRASSLEY: Thank you. Now we have three routine questions that we will ask each one of you to respond to. First, is there anything that you're aware of in your background that might present a conflict of interest with the duties of the office to which you have been nominated?

Mr. George?

MR. GEORGE: No, Mr. Chairman.

SEN. GRASSLEY: Mr. O'Carroll?

MR. O'CARROLL: No, Mr. Chairman.

SEN. GRASSLEY: Mr. Bitsberger?

MR. BITSBERGER: No, Mr. Chairman.

SEN. GRASSLEY: And, Mr. Jones?

MR. JONES: No, Mr. Chairman.

SEN. GRASSLEY: Thank you. Second, do you know of any reason, personal or otherwise, that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you have been nominated?

MR. GEORGE: No, sir.

MR. O'CARROLL: No, Mr. Chairman.

MR. BITSBERGER: No, Mr. Chairman.

MR. JONES: No, Mr. Chairman.

SEN. GRASSLEY: Thank you. And, third, do you agree without reservation to respond to any reasonable summonses to appear and testify before any duly constituted committee of Congress if you're confirmed?

MR. GEORGE: I do, Mr. Chairman.

MR. O'CARROLL: Yes, Mr. Chairman.

MR. BITSBERGER: Yes, Mr. Chairman.

MR. JONES: Yes, Mr. Chairman.

SEN. GRASSLEY: And before I forget it, before I ask questions and Senator Baucus asks questions, one of the things that's very important for Senator Baucus and I to-and my moving your nominations is if other members of the committee primarily, but even any member of the Senate, that has asked you for answers to questions and they haven't been responded to, we don't like to go ahead, only under unusual circumstances, until those are responded to. So it would help you and the Senate's consideration of your nomination if you get answers to those questions.

Mr. George, you've been nominated for an extremely important position, as I and Senator Baucus have already indicated. The position, that I was personally involved in creating-the statue creating the office required, quote, "Demonstrated ability to lead large and complex organizations." In reviewing your background, you certainly have some fine accomplishments but I'm concerned about your ability to lead a large organization. So I would ask you to respond to your capabilities of doing that.

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SEN. GRASSLEY: Mr. George, I'm concerned about voices within the administration, and these aren't a whole lot different than in the previous administration, that would like to have IGs generally, not just the position you're being appointed to, in the business of assisting management and putting on the backburner the role of looking for waste, fraud and abuse. I'm troubled by such an approach in any administration for several reasons. First, if the IG isn't looking for waste, fraud and abuse, no one else will be. And second, if you don't know what the problems are in terms of waste, fraud and abuse, it's hard to know what management reforms are needed.

So I would ask for your views on this. And I am comforted by the fact that you did work for a person by the name of Congressman Horn, now retired, who I had a chance to work with on several things that were wrong in the Defense Department. And so I think that his attitude is good and if you worked with him and you have that same attitude towards seeking out waste, fraud and abuse within your agency, you have a good background for that. But I'd still like to have your response.

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SEN. GRASSLEY: Mr. Jones, I'd like to make one point to you and ask one question. My point-and this is equally appropriate for the two inspector general nominees that we have before us-is that I expect you to be independent. Senator Baucus has made that point, I've made it two or three times. You're not to be a cheerleader or an echo for management. The role of the oversight is exactly that, oversight. It's not called the Advocacy Board.

That said, what do you see as your top priorities when you're working on the IRS Oversight Board?

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SEN. GRASSLEY: I'm going to go to Senator Baucus now.
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SEN. GRASSLEY: Well, we have another senator who's come, the senator from Arkansas.

Before I call on her, Mr. Bitsberger, I hope that you won't feel less important if I don't ask you any questions. And I'm going to submit three questions to Mr. O'Carroll for response in writing.

Senator Lincoln.

SEN. BLANCHE LINCOLN (D-AR): Thank you, Mr. Chairman.

SEN. GRASSLEY: And then be mindful of the fact that Senator Baucus has a couple more questions.

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SEN. GRASSLEY: I'm sorry?

SEN. LINCOLN: I'd just like to submit the correspondence for the record, if I may?

SEN. GRASSLEY: Yes, you may do that.

SEN. LINCOLN: Thank you. Yesterday, more than a year after my very first letter, there was an article in the Washington Post-some of you all may have read it-which states, and I'll quote, "The statistics show that the foreign and international investors account for the entire increase in privately owned Treasury securities since President Bush has taken office." I mean, the alarming amount of debt that we're seeing that the Treasury is now holding. So I'd like to submit that article for the record as well, Mr. Chairman, if I might.

SEN. GRASSLEY: (Off mike.)

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SEN. GRASSLEY: Let me back up what the senator just said. There is an institutional problem, not just in your department but throughout all of government, not to give any more information that need to be done, but never give all the information you know in the first letter, hoping you never get a second letter back. And you've just got to realize that some of us are not going to give up until we get the answers we want, unless there's no answer to be given. But we find ourselves mostly, by most people in your position and probably people below you that you don't even know about, that are-really don't want to give Congress the information that the constitutional responsibility oversight requires us to ask if we're going to earn our money, and that we receive.

Go ahead.

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SEN. GRASSLEY: (Off mike.) If you didn't hear me, Senator Baucus is going to have some questions so we'll wait for him to come back.

Thank you, Senator Lincoln.

SEN. GRASSLEY: One of the questions I was going to ask you, Mr. O'Carroll, that I was going to submit in writing is to have you comment on the several issues that you've identified, significant management issues facing the Social Security Administration like improper payments, management of the disability process, integrity protection, critical infrastructure protection, and others. In terms of solutions, I'd like to have you identify the single most critical step that can be taken by the Social Security Administration to improve each of the management problems identified by your office, assuming there's one that's common to all of them?

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SEN. GRASSLEY: Okay. I'll still send you a couple more questions for answer in writing. Now I turn to Senator Baucus.
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SEN. GRASSLEY: I presume what you want to do is --

SEN. BAUCUS: Get an assessment of how things worked out.

SEN. GRASSLEY: Yeah, compared to the original record.

SEN. BAUCUS: Exactly.

SEN. GRASSLEY: Well, listen, we congratulate each of you and hope that all the requirements that the Senate needs to get you confirmed can be done very quickly and that you do a very good job in the position you've been appointed to, and that's how we approach your nomination. Thank you all very much. Meeting adjourned.

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