TOPICS > Politics

Congressional Lightening Rod: Secretary of Energy Hazel O’Leary

June 13, 1996 at 12:00 AM EDT


JIM LEHRER: Now to the two senior members of the House subcommittee that conducted today’s hearing: Republican Joe Barton of Texas, chairman of the Oversight and Investigation Subcommittee of the House Commerce Committee and the Subcommittee’s ranking Democrat, Ron Klink of Pennsylvania. Congressman Barton, do you believe Secretary O’Leary did something seriously wrong?

REP. JOE BARTON, (R) Texas: (Capitol Hill) I think there is ample evidence to suspect that she did–if she not personally, that people under her direct responsibility did some things that, that should not have been done and that are possibly illegal, and I want to emphasize possibly because this is a draft inspector general report and the secretary, herself, today took direct issue with some of the most serious facts that are alleged to have occurred.

JIM LEHRER: Is the problem here that she went on these trade missions in the first place, or that the trade missions were not properly carried out, or the funds were mishandled or whatever? Where do you come down on that basic question?

REP. BARTON: I come down that these trade missions by her own admission were grossly mismanaged and that there was no accountability until after the fact and that there are still hundreds of thousands of dollars that are not accounted for and many of the recommendations that were made as long as a year and a half ago are only now being implemented to prevent abuses, what happened in the past from occurring in the future.

JIM LEHRER: Just to clear up any, any ambiguity on this, has there been a suggestion or allegation that the mishandling was done out of malice, in other words, that somebody ripped off the money, or that somebody stole the money or, or anything like that, or it was just bad management or what? Characterize it for me.

REP. BARTON: Well, there are three different issues. One is a particular account that has $35,000. More money was spent than was in that account. If, in fact, that was knowing and willful, that’s a criminal violation.


REP. BARTON: There is, is the effort on per diem expenses that are paid on a daily basis. Of the two hundred and twenty-three travel vouchers that were audited on per diem, two hundred and twenty-two were improperly done. That may or may not be knowing and willful. Then there is a case in some cases the Department collected funds or had funds collected to pay for some of these expenses that were not allowed by law, and that, if it was knowing and willful, is a violation of something called the Miscellaneous Receipts Act. I don’t personally think the Secretary of Energy knowingly and willfully tried to violate federal law, but obviously some things were done that even she admits should not have been done.

JIM LEHRER: But to my–my simple question, that–the other question–is there an allegation here that somebody stole money from the federal government, some employee of the Energy Department stole some money?

REP. BARTON: There is not an allegation that someone knowingly stole money, no, sir.

JIM LEHRER: All right. Congressman Klink, what’s your overview of this as to what, who did something wrong and how serious was it?

REP. RON KLINK, (D) Pennsylvania: (Capitol Hill) The overview is that we, we–if we’re the police department, we brought in the suspect, the suspect has confessed, and now we’re trying to beat them into retracting their confession. There is no doubt that, No. 1, there was some mismanagement of these trips. The Secretary has admitted to that. She has said that she accepts the 29 recommendations of the IG and has started to implement all of those recommendations. But she also told us, as did the businesses who went along on those trips, that there literally are hundreds of millions, if not billions of dollars’ worth of American business that are going to be done as the result of this.

Sec. O’Leary was in the process of inventing the wheel. We did not have in the past a Secretary of Energy who went with American companies overseas to seek out this business. Other nations have done this. In the Far East, the trips that were taken–there is a trillion dollar future energy market that dwarfs the size of growth of the energy market here in North America. If we get–for every billion dollars’ worth of business these American companies get, they will create 17,000 jobs here in the United States.

Those people who work on those jobs will pay taxes to the federal government. All of the allegations that Chairman Barton has talked about with the per diem, with the possibility of moving money from an entertainment, from some other fund to the entertainment fund to feed the people who were on this trip amounts to about 50,000 dollars. Now $50,000, when we’re talking about literally billions of dollars’ worth of business, is very trite, and then you’re taking eight months of this committee. You are dragging these industries back in before this committee, and they said–one of the industries said to us, you know, I’ve spent half as much time defending the fact that I went on this trip with Hazel O’Leary as I did spending to go on this business and getting $750 million worth of business that my company got while we were on this trip.

JIM LEHRER: So what’s going on, Congressman Klink?

REP. KLINK: Well, you know, believe it or not, yes, Virginia, it is election year. And I’m not saying that Chairman Barton is the one who’s responsible for this. I think he’s trying to get to the bottom of what he sees and what I agree were some mismanagement at the Department of Energy–we agree to that. We agree that someone in the Department of Energy, if, not indeed, the Secretary, herself, were ill-prepared to run these kinds of trips. Now I think that we could do this in a lot less costly manner. We could do it in a lot less public manner.

The fact that there have been allegations made first of all by some of the members on the majority side that there was no benefit to these American firms and they–we had a document that was submitted on April 24th here which used a lot of quotes taken out of context. And then there were–we used today at today’s hearing the word “criminal,” and we read about statutes. If this Secretary has, indeed, done nothing that is illegal–and I don’t think that she has done anything illegal, perhaps bad management, how does this Secretary get her good name back? How does the United States Government not become the laughing stock of other governments like Germany, like Great Britain, like Canada, like Japan, who have been conducting government and private companies working together for many years that have been cleaning our clock at capturing these markets?

JIM LEHRER: Congressman Barton, what about that point, that whatever mismanagement there may have been, they were worth it in terms of the business they generated for the United States?

REP. BARTON: Well, Congressman Klink is certainly right that some benefits did accrue, not the original inflated benefits that the Secretary claimed, that there is some benefit to this. Our position, my position is, we want these trade missions to be done properly, and I would like to point out that even as we speak today, there is at least $600,000 still in what are call suspended accounts at the Department, and the Department of Energy in, in attempting to determine who actually went on the trips literally within the Department could not determine from their own records who had even traveled on these trips. So this–we want these trade missions to continue because they do benefit the American people, but we don’t want them to continue without significant management reforms actually being implemented and accounting procedures actually being put in place, and the rules that are already in place for international travel by federal employees being honored and followed.

JIM LEHRER: Congressman Barton, some of your colleagues, Republican colleagues in the House, have called for the resignation or the firing of Secretary O’Leary. In fact, one said it’s time for Hazel O’Leary to go. How do you feel about that?

REP. BARTON: I think the Secretary of Energy serves at the pleasure of the President, in this case President Clinton. As long as she has his confidence, she should continue to be Secretary of Energy. I think the jury is still out on whether these reforms are being implemented, and, as the Secretary, herself, pointed out today, she has appointed the deputy general counsel to the Department to investigate some of the more serious allegations about possible criminal violations, and I wouldn’t be prepared to take a personal position on her resignation until we know the results of that particular investigation.

JIM LEHRER: Congressman Klink, should she go?

REP. KLINK: Well, listen, let me just–rather than accepting the fact that one of us may be partisan, let me tell you that Robert Hart, the president and CEO of Coastal Power Company, said partially as a result of these trade missions, Coastal Power has placed one power plant operation in China and is currently constructing four more in China, one in Pakistan. Wayne Rogers of Synergics Energy Company said from where we sit at Synergics, it’s our opinion that we’re going to do a minimum of $350 million in U.S. business as a result of these trips. Ken Kerris, the president and CEO of Zona Corporation said that they’re going to do millions of dollars, so the first time we’ve had a secretary in the 20-year history of this Department that has worked with corporations to bring this business to this country. No, she should stay. She’s the best we’ve ever had.

JIM LEHRER: So what happens now, Congressman Barton?

REP. BARTON: Well, we have to, uh, sift through the hearing record today and determine what, if any, future action the committee needs to take or the subcommittee. I am not convinced based on her testimony today that she is a good manager. By her own admission, she said she is a hands-on manager for policy but not for, for general day-to-day management of the Department. This is a $15 billion agency.


REP. BARTON: So I’m going to sit down and one thing I definitely will do is touch base with the inspector general in the Department because the Secretary today took direct issue with some of what were presented in the inspector general’s draft report as facts.

JIM LEHRER: Congressman Klink, do you think this thing is over now, should be over now?

REP. KLINK: Well, I don’t understand when you, when you have agreement–Chairman Barton thinks that the Department was run poorly and that there were bad management practices. I agree with him. I think most of the Democrats–in fact, probably all of the Democrats in the subcommittee agree. In fact, the Secretary of Energy agrees and is willing to work with us. We can continue oversight in a less costly and a more subtle fashion that we don’t embarrass our own country–that we don’t embarrass our own country, that we embarrass the corporations that have take part in this, and we can take care of whatever problems have occurred. So I don’t understand why at this point we don’t accept victory and quit trying to snatch defeat from the jaws of victory.

JIM LEHRER: Okay. Gentlemen, thank you both very much.

REP. BARTON: Thank you.