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August 3, 1994 - Part 1
(10:30:29) Senator DODD. Now the law required that a confirmed individual assume that responsibility. As of the date when Mr. Casey left, the previous Administration's appointee, there were only two people who had been confirmed by the U.S. Senate that could have assumed that responsibility. One was yourself, as Secretary of the Treasury, and the other was Mr. Altman. Secretary BENTSEN. That is correct. Senator DODD. Now maybe some other Cabinet officer at Labor, but, I mean, I do not know of anyone who is suggesting that that job would go there. Secretary BENTSEN. Right. Senator DODD. So I wonder if you might share with us what should be done. I realize that it is right for you to indicate you would like to think about this, and I asked Mr. Altman yesterday and the Treasury might send some recommendations to this Committee. One of the constructive things we might do is address that piece, I guess it was FIRREA, as to how we might modify the law and avoid the kind of inherent Catch- 22 situation that led to a lot of the problems that have resulted in these hearings and the questions that have been raised. I would ask you this morning if you might just comment generally on that particular legislative or statutory mess we have ourselves created. Secretary BENTSEN. Let me do that, Senator. Let me also supplement the answer to Senator Gramm insofar as those things taking place within the White House that involved answers on the RTC. I had built a wall to be sure that I did not get involved in those things. The legal interpretation of the responsibility of the Chairman of the Oversight Board is that you not intervene in case specifics, and I wanted to be sure that that did not happen to me. Now to get to your point, Senator, you are absolutely right. As we interpreted the law, it had to be someone who was a Presidential appointee who had been confirmed by the Senate. And logic was that you tried to use someone that had a background in finance, and there were only two of us in that capacity, that had been confirmed by the Senate. And that was myself and Deputy Secretary Altman. He had a background in finance. He had a background in management. And I asked him to do that, to take that position. No one really wanted that job. Senator DODD. In fact, you could have left it vacant, I suppose, but I am not sure that would have been a responsible decision. Secretary BENTSEN. Well I do not see how we-we had to have somebody over there in charge. And so he took it. 18 And that was under the Vacancy Act. And it really should be amended. I think both you and Senator Gramm have made the point that that should not happen again. I think you are right on that, and we will work on legislation we would recommend to you for your consideration to see it does not happen again. Now we did get an amendment in there, as I recall, on the Resolution Trust legislation that provided for a deputy in that situation. Senator DODD. That is correct. The Chairman has informed me of this, and I think it is called for under the Completion Act of 1993. Some of this may have been already addressed, and so I appreciate your response and I appreciate the Chairman's pointing that out that some of this has already apparently been addressed, but you made another point which I think also is worth noting, There is a piece in The Washington Post this morning written by Lloyd Cutler entitled "A Heads Up History." Mr. Chairman, I might just ask unanimous consent that that be included in the record. [No response.] The CHAIRMAN. Without objection, so ordered. Senator DODD. Because I think the Secretary has pointed to another problem here that we have identified in a referral from the RTC in this matter, and that is at what point is a legitimate government function triggered that conversations between people of different agencies can talk to one another. Today, we are discussing the Resolution Trust Corporation, the Treasury and the White House, but there are referrals made from, virtually every other Cabinet agency to the Justice Department. There are circumstances completely different from the ones we are talking about here that would need to have some sort of clarification as to how you draw that white line.
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August 3, 1994 - Part 1
(10:40:52) If someone could hand this to the Secretary? [Pause.] 20 This redacted schedule suggests that on Thursday, February 3, at 11:50, Roger Altman and Jean Hanson met with you. Do you have any recollection, or does that freshen your memory as to what might have happened at that occasion? Secretary BENTSEN. No, it does not, Senator. I have shown you something of my meetings, my schedules, and it does not. Senator BOND. Thank you. I can understand that meetings that long ago may not come quickly back to mind, even when you had a busy schedule. But speaking of the Inspector General and the OGE report, there is something that concerned me. Last night, we learned that Mr. Altman read and used the transcript of the IG's interview in preparation for his testimony, and also that Mr. Cutler had been presented copies, more than a week or so ago, of these IG reports. Do you know why these transcripts were released to the witnesses before they were called to testify before this Committee? Secretary BENTSEN. Yes, I certainly do. In the sworn depositions that were sent to Mr. Cutler, he had asked for those to help him in his preparation before the Congress in his testimony. He had a very short time span in which to accomplish that, And I thought that he deserved that to be able to do a good job of it, and that the Congress deserved that kind of information. So it is also, let me state, someone here said that these things are a bit like a trial hearing. I am no trial lawyer so I am no authority in that regard. But it is my understanding that once you have these sworn depositions, that they can then be exchanged and others can look at it, with the idea of giving the more complete facts as to what happened. It is not something that is kept in secret, it is not something that is sprung a surprise, a gotcha; it is more informational. And that is what we were trying to do. Now let me say, further, that I asked the IG about the propriety of it to be sure of that regard. And it was also my understanding that he thought he had completed his questioning of witnesses, and that after he had done this, that then the Office of Government Ethics then asked for one more witness to be deposed, and that was done. And that was the Comptroller of the Currency, Gene Ludwig. And that that did not impinge on the other witnesses' depositions. Senator BOND. Mr. Chairman, my time is up. I thank the Secretary. I was under the impression that the IG interviews were to be kept confidential until they were all released at once. Even though this is not a trial, we all know that if memories are shaky, or if in the instance where there is perhaps something that needs to be dealt with, having access to somebody else's testimony before you give your testimony may enable you to tailor the facts. So that is a little troubling to me.
August 3, 1994 - Part 2
(11:00:02)(tape #10077 begins) (11:03:12)(tape #10076 ends) (11:11:42) Hearing resumes: The CHAIRMAN. The Committee will resume. I want to say for the record that Senator Sasser was in the middle of his time period-well he has just returned. Let me just give Senator Sasser a minute to get seated and get his materials ready. If the timing clerk would restore the remainder of Senator Sasser's time after he has caught his breath here, we will go ahead and finish with Senator Sasser and then we will rotate over to the Republican side. Senator Sasser. Senator SASSER. Thank you, Mr. Chairman. Mr. Secretary, I am fascinated by the statement that you made to George Stephanopoulos arguing in favor of "lancing this boil." Some of the things you learn just by living, and I think sometimes if you are a smart person and have an open mind you will acquire wisdom over the years. This may have been a very wise suggestion that you made to George Stephanopoulos. I think it was. But my question comes: How would you lance this boil? I was talking to a very prominent constituent of mine last evening who unfortunately for him is a C-SPAN junkie. He watches everything we do on television here, and he was making the point. He says, this reminds me of "The Dance of the Seven Veils." After the last-the veils are taken off one after another, and finally to our chagrin we find when the last veil falls there is nothing there. Now my question to you is: How do you lance this boil here that has been pestering this White House, and has been in and out of the news now for 2 years? The CHAIRMAN. The Committee will resume. I want to say for the record that Senator Sasser was in the middle of his time period-well he has just returned. Let me just give Senator Sasser a minute to get seated and get his materials ready. If the timing clerk would restore the remainder of Senator Sasser's time after he has caught his breath here, we will go ahead and finish with Senator Sasser and then we will rotate over to the Republican side. Senator Sasser. Senator SASSER. Thank you, Mr. Chairman. Mr. Secretary, I am fascinated by the statement that you made to George Stephanopoulos arguing in favor of "lancing this boil." Some of the things you learn just by living, and I think sometimes if you are a smart person and have an open mind you will acquire wisdom over the years. This may have been a very wise suggestion that you made to George Stephanopoulos. I think it was. But my question comes: How would you lance this boil? I was talking to a very prominent constituent of mine last evening who unfortunately for him is a C-SPAN junkie. He watches everything we do on television here, and he was making the point. He says, this reminds me of "The Dance of the Seven Veils." After the last-the veils are taken off one after another, and finally to our chagrin we find when the last veil falls there is nothing there. Now my question to you is: How do you lance this boil here that has been pestering this White House, and has been in and out of the news now for 2 years?
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