Senate Committee on the Judiciary

Nominations Hearing for Kathryn Keneally, to be an Assistant Attorney General, and Brian C. Wimes, to be United States District Judge for the Eastern and Western Districts of Missouri

Wednesday, November 16, 2011

For video of the hearing, please click here.

I join you in welcoming the nominees before us today.   Today we will first hear from Kathryn Keneally, nominated to be Assistant Attorney General, Department of Justice.  I am pleased that Chairman Leahy and I were able to reach agreement on the timing and format for her hearing today.  I express my appreciation to the Chairman for the way we are proceeding on this nomination.

If confirmed, Ms. Keneally will head the Tax Division of the department. The Tax Division's mission is to enforce the nation's tax laws fully, fairly, and consistently, through both criminal and civil litigation.  It has a duty to ensure compliance with the tax laws, maintain public confidence in the integrity of the tax system, and promote the sound development of the law.

The Assistant Attorney General for Tax is an important and unique position.  In order to be effective, this person must have a strong command of the tax laws and maintain a strong working relationship with the Internal Revenue Service.  Given the severe debt and deficit situation facing our country, it is imperative that the IRS collect every dollar of tax that is owed to the government. I have always said that taxpayers should pay what they owe - not a penny more, not a penny less.  The Assistant Attorney General for Tax plays an important role in helping the IRS collect these taxes.

It is disappointing that we have not been able to get a qualified candidate into this position for three years.  The first nominee for this position, while qualified for any number of other legal positions, had no tax experience and was wholly unqualified for this position.  After her nomination was withdrawn in August of 2010, it took over a year for the President to submit Ms. Keneally's nomination.  In contrast to the first nominee, Ms. Keneally has significant tax experience and will hopefully be a valuable addition to the Department of Justice. I was pleased to meet with Ms. Keneally yesterday.  We had a good visit and I look forward to her testimony today.

In addition, we will be considering the nomination of Brian C. Wimes, nominated to be United States District Judge for the Eastern and Western Districts of Missouri.

I would note that we are making real progress with regard to the nominations of President Obama to the federal judiciary.   Today marks the 18^th nominations hearing held in this committee this year, and we will have heard from 70 judicial nominees.  All in all, nearly 89 percent of President Obama's judicial nominees have received a hearing.

The Senate has confirmed twenty Article III judicial nominees during the past month and a half.  We have now confirmed 58 judicial nominees in this Congress alone.  With the confirmation of two judges yesterday, over 70 percent of President Obama's nominees have been confirmed.

Kathryn Keneally is nominated to be Assistant Attorney General, Department of Justice.  After obtaining her J.D. from Fordham University in 1982, Ms. Keneally served as a law clerk for Judge Edward R. Neaher of the U.S. District Court for the Eastern District of New York.  She then worked as an associate attorney at Skadden Arps Slate Meagher & Flom from 1983 - 1985.  Her practice there consisted of complex commercial litigation and pro bono criminal defense matter. In 1985, she became an associate at Kostelanetz & Ritholz and was made a partner in 1990.  At this firm her practice included criminal tax defense, other white collar criminal defense, and tax controversy, as well as complex commercial litigation matters involving fraud, civil RICO, securities, and similar issues.

In 2000, she became a member in the firm of Owen & Davis where she primarily handled commercial litigation, as well as tax controversy and criminal tax defense.  In 2002, she joined Fulbright & Jaworski, LLC., where she is a partner.  She initially practiced commercial, tax controversy and criminal tax defense, but since 2004 has primarily handled only tax controversy and criminal tax defense.

Brian C. Wimes is nominated to be United States District Judge for the Eastern and Western Districts of Missouri.  Upon graduation from law school in 1994, Judge Wimes became an Attorney Advisor in the Litigation Branch of Federal Bureau of Prisons in Washington, D.C.  Judge Wimes represented the bureau in civil actions by inmates throughout the country.

In 1995, Judge Wimes left the bureau and became an Assistant Prosecuting Attorney for the Jackson County Prosecutor's Office in Kansas City, Missouri until 2001.  During his time there, Judge Wimes specialized in drug prosecutions.  Additionally, as Coordinator for the Drug Abatement Response Team, he supervised a staff that was focused on closing drug houses in the Jackson County area.  In 1999, Judge Wimes became the Senior Trial Attorney for the Drug Unit, prosecuting cases involving major crimes with an emphasis on drug-related homicides.

In 2001, Judge Wimes became the Drug Court Commissioner for the Court for Jackson County, Missouri.  He was appointed for two, four year terms.  Judge Wimes presided over 400 assigned cases to Drug Court, with a caseload of 120 to 150 docketed cases per week.

After serving as the Drug Court Commissioner for Jackson, Judge Wimes was appointed by then-Governor Matt Blunt to serve as the Circuit Court Judge for the 16th Judicial District, Jackson County, Missouri.  He was appointed in 2007, and was retained in the 2008 election cycle.

As a Circuit Court Judge, Judge Wimes has presided over approximately twenty-nine criminal trials that have gone to judgment and twenty-five civil trials that have done the same. From 2008 to 2009, Judge Wimes was assigned to the Family Court Division and heard over 500 domestic cases to judgment as well.

Again, I welcome the nominees, their family members and guests.  I look forward to the testimony.

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WASHINGTON -- Sen. Chuck Grassley of Iowa, co-chairman of the Senate Caucus on International Narcotics Control, today said House and Senate appropriators are restoring funding for Defense Department international counternarcotics programs.  Grassley, along with Sen. Dianne Feinstein, caucus chairman, had urged appropriators to restore the funding, which lapsed Oct. 1.

"The funding lapse was worrisome," Grassley said.  "It put counternarcotics efforts at risk of losing momentum and backsliding on progress in hotbed areas.  It's a relief that for the safety and security of the United States, funding for U.S. counternarcotics programs abroad will be restored very soon."

The appropriators' language restoring the funding is available here, p. 280.  Letters from Grassley and Feinstein to try to restore funding are available here, here and here.

Good Government 101:  Public's Right to Know

by U.S. Senator Chuck Grassley

A bit of wisdom attributed to a 16th century philosopher has nearly become cliché' in today's 21^st century information age:  Knowledge is power.

The Internet and widespread, user-friendly technology allow people from around the world to mobilize, communicate and share unfiltered information and ideas like never before.  Going digital has revolutionized consumer behavior, the global economy and the public's expectations for information.

The public's right to know dates back to America's founders whose advocacy and altruism planted the seeds of our republic that would create a lasting government created of, by and for the people.

James Madison, hailed as the father of the U.S. Constitution, served as the primary architect of our system of checks and balances and embraced the rights of the individual, saying, "Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives."

Representing Iowans in the U.S. Senate, I have championed the public's right to know and to protect freedom of information.

Meeting with Iowans in each of Iowa's 99 counties at least once every year for the past three decades helps keep me accountable to the people who elect me to public office.  Keeping in touch with constituents - whether it's face-to-face or by e-mail, with traditional news outlets or via social media - helps me to uphold the public trust.

What's more, I take seriously my oath of office to uphold the Constitution.  As an elected caretaker of our representative democracy, I work to nurture and cultivate the freedoms and responsibilities of all Americans.

Transparency, openness, accessibility and accountability are non-negotiable cornerstones of good government that build faith in the three branches of the federal government.  Bureaucratic stonewalling and judicial over-reaching foster cynicism and distrust that harm public confidence.  In turn, this damages the government's ability to effectively serve its citizens and, for example, could lead to an erosion of voluntary tax compliance.

From City Hall, to the Statehouse, to Capitol Hill, the taxpaying public has a vested interest in the people's business.  Taxpayers deserve scrupulous stewardship of their tax dollars and assurance that our system of checks and balances is working to root out waste, fraud and abuse and to protect the integrity of the rule of law.

That's why I have worked year after year to keep the people's business open for public consumption.  Most recently, that includes my ongoing oversight of the:

• Department of Justice's "Fast and Furious" gun walking fiasco that allowed the illegal sale of thousands of weapons to flow to Mexico;
• Department of Health and Human Service's decision to shut down a public website with information on malpractice cases involving thousands of the nation's doctors;
• Federal Communications Commission and its attempt to block information from members of Congress and the public about a fast-tracked licensing agreement for a politically-connected applicant;
• Securities and Exchange Commission's missteps in its mission to protect investor confidence and the integrity of capital markets, including my efforts to support whistleblowers, tighten the revolving door between investment firms and regulatory and law enforcement, and to protect record-keeping relevant to investigations of wrongdoing on Wall Street.

The public's right to know is a fundamental liberty of citizenship.  So whether it's protecting watchdogs and whistleblowers or clearing out bureaucratic cobwebs with stronger sunshine laws, I'm working in Washington to promote access to government information.  The taxpaying public pays the bills, and the taxpaying public deserves to know how its government operates.

As James Madison wrote, "Those who expect to reap the blessings of freedom must undergo the fatigue of supporting it."  That's why I'm committed to encourage, enable and engage the public to, as Madison also said, "arm themselves with the power which knowledge gives."

Q&A on the Deficit Reduction Committee

with U.S. Senator Chuck Grassley

Q:        What exactly is the deficit reduction committee in Congress, and under what authority was it created?

A:        Last summer, Congress passed the Budget Control Act of 2011.  The law made it possible for the federal government to borrow more money, avoiding possible default on debt, and authorized the formation of a Joint Select Committee on Deficit Reduction.  Twelve members of Congress - six Democrats and six Republicans - were named by party leaders to the Joint Committee, and two of them are designated as co-chairs.  Committee members are charged with presenting a ten-year proposal for at least $1.2 trillion in deficit reduction by November 23.  Both the Senate and the House are supposed to vote on the Joint Committee's legislative package by December 23.  If the Joint Committee doesn't agree on deficit reduction legislation or it is not enacted, then an automatic spending reduction process would be triggered beginning in January 2013.  These automatic reductions would be divided evenly between defense and non-defense spending.  The way that the Budget Control Act restricts amendments and limits time for debate is unusual.  I'm an advocate for regular order where standing committees develop responsible policy and legislative proposals in their areas of jurisdiction.  And, I voted against the Budget Control Act because the spending reductions weren't proportional to the massive fiscal challenges we face.  But, Article I, Section 5 of the Constitution gives to both the Senate and House the power to "determine the Rules of its proceedings," and the Budget Control Act was adopted by Congress and signed into law by the President on August 2, 2011.

Q:        Can Congress unravel the law if the Joint Committee isn't successful, preventing the automatic deficit reduction from taking effect?

A:        As the director of the Congressional Budget Office recently said, "Any Congress can reverse the actions of a previous Congress."  At the same time, there is tremendous pressure to begin reversing unsustainable growth in the federal debt and deficits.  In 2009, for the first time ever, the deficit was more than $1 trillion.  From 1946 to 2008, budget deficits averaged 1.7 percent of the gross domestic product and exceeded five percent only three times.  From 2009 to 2011, budget deficits will average 9.4 percent of the gross domestic product.  The federal debt held by the public has grown from 40 percent of the gross domestic product in 2008 to an estimated 69 percent of the gross domestic product in 2011.  The fact that Congress can vote to abandon plans put in place for spending restraint - and, too often, either has unraveled budget controls or never adopted them in the first place - makes the case for a constitutional requirement for a balanced budget.  I'm a co-sponsor of legislation that would establish a balanced budget amendment to the Constitution.  The last time the Senate voted on a balanced budget amendment was in March 1997, when the nation's debt was less than half of what it is today.  The resolution failed by one vote.  A balanced budget amendment passed the House of Representatives in 1995.  Both the Senate and the House of Representatives must vote on a balanced budget amendment this year, sometime before December 31, thanks to a requirement in the Budget Control Act.

Q:        Don't tax increases need to be part of the solution for reducing deficits and debt?

A:        Fiscal discipline and economic growth need to be the top priorities for deficit and debt reduction.  Unchecked government spending will further threaten economic opportunity with higher debt and higher taxes.  It might be one thing if tax increases actually were used to reduce the deficit, but that's not what happens.  Since World War II, every new dollar in tax increases has resulted in Congress' spending $1.17.  Raising taxes has been a license for Congress to spend even more.  And, every dollar spent by Congress is a dollar taken out of the economy, and higher taxes leave fewer resources for the private sector to make investments, expand production, and create sustainable jobs.  The work of the Joint Select Committee on Deficit Reduction should stay focused on reducing spending, not on finding ways to increase revenue to fuel excessive government spending.  In addition to supporting reforms to entitlement spending to make sure valued programs are available to future generations of Americans and sustainable for taxpayers, I've submitted specific recommendations to the Joint Committee for spending reductions totaling hundreds of millions to even billions of dollars from administrative restructuring, reduction of duplicative  and overlapping programs, and unnecessary and wasteful programs under the authority and jurisdiction of the Senate Committee on the Judiciary, where I serve as Ranking Member.  I also made recommendations to the Joint Committee for my bipartisan legislation that would save $4.8 billion in federal government spending on prescription drugs, including through Medicare and Medicaid, by stopping deals between name-brand and generic drug makers that keep less expensive drugs off the market.  I've urged the Joint Committee to adopt caps on farm payments, for a savings of $1.5 billion, and backed a goal of saving $23 billion in spending from programs that fall under the jurisdiction of the Senate Committee on Agriculture.  The bottom line is that Washington doesn't have a revenue problem, it has a spending problem.

Judiciary Committee Leaders Press USTR to Hold Russia Accountable on IP Issues during WTO Accession Discussions

WASHINGTON - Leaders of the House and Senate Judiciary Committees are pressing U.S. Trade Representative Ron Kirk to make sure that as Russia attempts to gain membership into the World Trade Organization, adequate focus is paid to its obligations to protect and enforce intellectual property rights.

In a letter to the Trade Representative, House and Senate Judiciary Committee Chairmen Lamar Smith and Patrick Leahy and Ranking Members John Conyers and Chuck Grassley expressed concerns that Russia continues to have gaps and lapses in its protection of intellectual property rights.

"There are a number of significant concerns with respect to the denial of adequate and effective IPR protection, or the denial of equitable market access for persons that rely on IPR protection, in Russia," the Judiciary Committee leaders wrote.

The members added, "The Government of Russia must demonstrate via transparent, substantive and prompt actions its commitment to adhere fully to the obligations it will assume as a future member of the WTO.  Not only is the credibility of the rules-based system of international trade at stake, but should Russia fail to conform to its obligations in a thorough and timely manner, the adverse consequences for U.S. innovators and their workers will continue to be significant."

The text of the letter to Kirk is below.  A signed copy of the letter can be found here.

November 9, 2011

Ambassador Ron Kirk

United States Trade Representative

Office of the United States Trade Representative

600 17^th Street, NW

Washington, DC 20508

Dear Ambassador Kirk:

We are writing to express our serious concerns over continuing gaps and lapses in the protection and enforcement of intellectual property rights (IPR) by the Government of Russia, even as the negotiations regarding Russia's accession to the World Trade Organization (WTO) are moving forward.  A high standard accession package will be essential before both Houses of Congress can consider a vote to remove Russia from Title IV of the Trade Act of 1974, which is necessary for the United States to enjoy the full benefits of Russian membership in the WTO.

According to the most recent annual report on the global state of IPR protection and enforcement prepared by your office pursuant to section 182 of the Trade Act of 1974, as amended, there are a number of significant concerns with respect to the denial of adequate and effective IPR protection, or the denial of equitable market access for persons that rely on IPR protection, in Russia.

Specific examples cited include : widespread counterfeiting and piracy of hard goods; storage of pirated CDs and DVDs on several government-controlled military-industrial sites; gaps in Russian law and enforcement efforts with respect to piracy over the Internet; varying levels of enforcement among regions; and, indications of selective enforcement.  Even when initial enforcement efforts are conducted in a sustained and vigorous manner, your report notes that prosecutions and convictions do not necessarily follow.

With respect to gaps in Russian law, your report states that it is the position of the United States to urge Russia to enact online infringement legislation that addresses all forms of piracy over the Internet and provides for the swift removal of infringing content.  In addition, your report encourages Russia to enact legislation establishing a specialized IPR court and calls for Russia's enforcement officials to increase the number of IPR-related investigations, as well as for Russian prosecutors to seek deterrent penalties in judicial proceedings.  Because of these and other ongoing concerns, Russia remains on the "Priority Watch List" for 2011, which identifies countries with the most onerous or egregious IPR policies, acts, or practices that have the greatest adverse impact on relevant products of the United States.

Separately, the recent report to Congress of the Office of the National Counterintelligence Executive identifies Russian cyber-espionage as a dangerous threat to our economy and national security.  Specifically, the report warns that "[f]oreign economic collection and industrial espionage against the United States represent significant and growing threats to the nation's prosperity and security," and that "[e]conomic espionage inflicts costs on companies that range from loss of unique intellectual property to outlays for remediation  . . . ."

This report further finds that "Moscow's highly capable intelligence services are using [human intelligence], cyber, and other operations to collect economic information and technology to support Russia's economic development and security," and that "the governments of China and Russia will remain aggressive and capable collectors of sensitive U.S. economic information and technologies, particularly in cyberspace."

We acknowledge that important progress has been made since 2006, when the United States and Russia reached a bilateral agreement on IPR protection and enforcement in Russia.  Yet, the findings in these reports raise serious questions about the intention and commitment of the Russian Government to abide by and enforce the obligations it will assume as a member of the WTO, particularly with respect to the Agreement on Trade-Related Aspects of Intellectual Property Rights.

In our view, the questions and concerns raised by these reports must be addressed.  The Government of Russia must demonstrate via transparent, substantive and prompt actions its commitment to adhere fully to the obligations it will assume as a future member of the WTO.  Not only is the credibility of the rules-based system of international trade at stake, but should Russia fail to conform to its obligations in a thorough and timely manner, the adverse consequences for U.S. innovators and their workers will continue to be significant.

In addition, we expect that you will continue to consult the House and Senate Judiciary Committees as future developments warrant; such ongoing consultations will be particularly valuable in the event that Congress considers legislation to authorize termination of the provisions of title IV of the Trade Act of 1974 with respect to Russia.

Sincerely,

_____________________________  ______________________________

Lamar Smith                          Patrick Leahy

Chairman                       Chairman

House Committee on the Judiciary                      Senate Committee on the Judiciary

______________________________ ______________________________

John Conyers, Jr.                            Charles Grassley

Ranking Member                         Ranking Member