[Note: Nominee responded and the information is contained in the committee's executive files.] 6. Do you agree to provide to the committee any written opinions provided by the General Counsel of the agency to which you are nominated and by the Attorney General's office concerning potential conflicts of interest or any legal impediments to your serving in this position? [Note: Nominee responded and the information is contained in the committee's executive files.] PART D-LEGAL MATTERS 1. Have you ever been disciplined or cited for a breach of ethics for unprofessional conduct by, or been the subject of a complaint to any court, administrative agency, professional association, disciplinary committee, or other professional group? If so, provide details. [Note: Nominee responded and the information is contained in the committee's executive files.] 2. Have you ever been investigated, arrested, charged or held by any Federal, State, or other law enforcement authority for violation of any Federal, State, county or municipal law, regulation or ordinance, other than a minor traffic offense? If so, provide details. [Note: Nominee responded and the information is contained in the committee's executive files.] 3. Have you or any business of which you are or were an officer ever been involved as a party in interest in any administrative agency proceeding or civil litigation? If so, provide details. [Note: Nominee responded and the information is contained in the committee's executive files.] 4. Have you ever been convicted (including a plea of guilty or nolo contendere) of any criminal violation other than a minor traffic offense? [Note: Nominee responded and the information is contained in the committee's executive files.] 5. Please advise the committee of any additional information, favorable or unfavorable, which you feel should be considered in connection with your nomination. [Note: Nominee responded and the information is contained in the committee's executive files.] PART E-FOREIGN AFFILIATIONS 1. Have you or your spouse ever represented in any capacity (e.g., employee, attorney, business, or political adviser or consultant), with or without compensation, a foreign government or an entity controlled by foreign government? If so, please fully describe such relationship. [Note: Nominee responded and the information is contained in the committee's executive files.] 2. If you or your spouse has ever been formally associated with a law, accounting, public relations firm or other service organization, have any of your or your spouse's associates represented, in any capacity, with or without compensation, a foreign government or an entity controlled by a foreign government? If so, please fully describe such relationship. [Note: Nominee responded and the information is contained in the committee's executive files.] 3. During the past ten years have you or your spouse received any compensation from, or been involved in any financial or business transactions with, a foreign government or an entity controlled by a foreign government? If so, please furnish details. [Note: Nominee responded and the information is contained in the committee's executive files.] 4. Have you or your spouse ever registered under the foreign Agents Registration Act? If so, please furnish details. [Note: Nominee responded and the information is contained in the committee's executive files.] PART F-FINANCIAL DATA All information requested under this heading must be provided for yourself, your spouse, and your dependents. 1. Describe the terms of any beneficial trust or blind trust of which you, your spouse, or your dependents may be a beneficiary. In the case of a blind trust, provide the name of the trustee(s) and a copy of the trust agreement. [Note: Nominee responded and the information is contained in the committee's executive files.] 2. Provide a description of any fiduciary responsibility or power of attorney which you hold for or on behalf of any other person. [Note: Nominee responded and the information is contained in the committee's executive files.] 3. List sources, amounts and dates of all anticipated receipts from deferred income arrangements, stock options, executory contracts and other future benefits which you expect to derive from current or previous business relationships, professional services and firm memberships, employers, clients and customers. [Note: Nominee responded and the information is contained in the committee's executive files.] 4. Have you filed a Federal income tax return for each of the past 10 years? If not, please explain. [Note: Nominee responded and the information is contained in the committee's executive files.] 5. Have your taxes always been paid on time? [Note: Nominee responded and the information is contained in the committee's executive files.] 6. Were all your taxes, Federal, State, and local, current (filed and paid) as of the date of your nomination? [Note: Nominee responded and the information is contained in the committee's executive files.] 7. Has the Internal Revenue Service ever audited your Federal tax return? If so, what resulted from the audit? [Note: Nominee responded and the information is contained in the committee's executive files.] 8. Have any tax liens, either Federal, State, or local, been filed against you or against any real property or personal property which you own either individually, jointly, or in partnership? [Note: Nominee responded and the information is contained in the committee's executive files.] (The committee may require that copies of your Federal income tax returns be provided to the committee. These documents will be made available only to Senators and the staff designated by the chairman. They will not be available for public inspection.) SIGNATURE AND DATE I hereby state that I have read and signed the foregoing Statement on Biographical and Financial Information and that the information provided therein is, to the best of my knowledge, current, accurate, and complete. This 15th day of July, 1987. JOHN J. WELCH, JR. Senator LEVIN. Okay. Mr. Welch, do you have an opening statement? STATEMENT OF JOHN J. WELCH, JR., SENIOR VICE PRESIDENT, PROGRAM DEVELOPMENT, LTV AEROSPACE AND DEFENSE CO. Mr. WELCH. Mr. Chairman, I have no prepared statement. I just want to say that I am certainly honored to be here as the President's nominee for Assisant Secretary of the Air Force in the acquisition community. The positive support that I have had so far, from the Secretary of the Air Force, Mr. Aldridge, and the Chief of Staff, General Welch, is certainly an added compliment. I am aware of your tight schedule today, so I do not have a statement. I would say that, as you noted, I have been in this business for 36 plus years, which is about two-thirds of my life now in research, development, test, and acquisition. It is kind of an emotional moment for me to be here. But I would assure you that I realize the trust and the commitment that is required, if the Senate sees fit to confirm me. I am prepared to answer your questions. Senator LEVIN. Thank you. And again, I welcome and congratulate you and your family. Mr. Welch, I know you are familiar with the Packard Commission recommendations and the legislation last year, which followed those recommendations, all of which affect the acquisition system within the Department of Defense. The legislation envisioned a streamlined management structure, and established the Office of Under Secretary of Defense for Acquisition to establish and oversee that structure. Could you describe for us your understanding of the legislation and the role that you envision for yourself under that legislation? Mr. WELCH. I can address that from an Air Force standpoint, I delivered yesterday to the committee a job description of the position of Assistant Secretary for Acquisition. I believe that, one, it is a streamlined system that pulls the total acquisition system into the one office, which was addressed both in the Packard Commission and in legislation. I believe that the efforts that I have been able to observe in the short time that I have been with the Air Force that they have completed the streamlining study, have streamlined procedures that are going into place, and in fact have made their first move toward a real integration of the Secretariat and the military air staff contribution to acquisition. I would say that what I have observed so far, they are addressing themselves to it expeditiously. And people can see some movement in that direction that will continue. Senator LEVIN. Is it your understanding that the new Under Secretary of Defense for Acquisition can direct acquisition actions by the Air Force? Mr. WELCH. As I understand the situation, that in matters of acquisition, the new Under Secretary of Defense is the senior official. And as such, his position, with respect to the Secretary of the Air Force, is in fact directive. Senator LEVIN. When Secretary Lehman was Secretary of the Navy, he eliminated some of the layers of bureaucracy by eliminating the Naval Materiel Command. The Air Force, on the other hand, has maintained its counterpart, the Air Force Systems Command. I am just wondering now how we could have the streamlined acquisition envisioned by the Packard Report, as long as that Systems Command remains. Do you believe that maintaining the Systems Command is consistent with the streamlining? Mr. WELCH. Well, I certainly have not been participating close enough to make detailed comments. But I would say, in looking at the Air Force, that it has an acquisition career field which is, I think, both an encouragement of the Senate and an encouragement in the Packard Commission. And with the Systems Command support to that acquisition process, they have created a career field, military and civilian, which, is admired by the other services and has, in fact, made a specific contribution to acquisition. So it would seem to me that the Systems Command is an integral function of the acquisition system. I could not comment on the Navy. Senator LEVIN. You might take a look at what the Navy did and what the Air Force is doing and 6 months from now let us know why the Navy is going in one direction and the Air Force in the other, and whether you think it is appropriate. There may be good reasons for going in different directions. But take a look at that, if you would. Mr. WELCH. I would certainly do that, from acquisition. I will not comment on the Navy direction, but will on the Air Force direction. Senator LEVIN. No, no. I would not want you to have to comment on the Navy, just review what you might learn from their program. We have had a lot of testimony that we are producing equipment at very inefficient production rates. And as a matter of fact, we just heard this Wednesday, I believe, very compelling testimony that we are structurally disarming, because of our inefficient production rates. I am wondering whether you have any proposals or any thoughts that might help improve production rates for Air Force systems, whether you think we ought to be starting fewer systems, whether we ought to be terminating systems. Do you have any thoughts on how we could have more efficient production rates in the Air Force? Mr. WELCH. I can only comment, really, from my industrial experience. I have not seen sufficient Air Force procedures yet. But there certainly is an economic rate at which one can produce systems. But perhaps the stability over several years, where one can plan to produce, and then produce at some reasonable quantity, I would think that both the rate and the stability of the plans would be the most significant things that could be addressed. Senator LEVIN. Do you believe that the planning process that we engage in tends to start us down the road with more programs than we are able to afford? And if so, how would you change that planning process? Mr. WELCH. Well, it would be an observation at this time. But I think again the proper word is some stability to the plan. It is one thing to set levels and affordability levels. But for people to be able to plan over some reasonable period of time, and expect to achieve those resources to support that plan, it would seem to be it is more volatile at the present time than one could hope to respond to. Senator LEVIN. My final question, do you have any particular priorities for yourself in this office? Mr. WELCH. Well, from what I can see, over the past year the Air Force has started to set itself even higher goals in terms of acquisition, including time and cost and quality, reaching out in terms of operational tasks. I would try to find the way to support that activity, and do it, frankly, faster and at a lower cost, would be the priorities I would see that should be out in front of us. Senator LEVIN. Senator McCain. Senator MCCAIN. I have no questions, Mr. Chairman. I have had the opportunity of knowing Mr. Welch for quite a few years. He enjoys an outstanding reputation in the defense community. And I have every confidence that he will do a fine job. Senator LEVIN. We all congratulate you and your family, and hope that this can move speedily to the floor. And you are excused. Thank you. There may be some questions from other members for the record. We are hoping to vote on your nomination next week and send it to the floor. We do not know how long it will take then, but we hope it can move expeditiously. And again, our congratulations to you. Mr. WELCH. Thank you, Mr. Chairman. Senator LEVIN. Thank you. [Discussion off the record.] Senator LEVIN. Apparently by tradition, we are supposed to ask you whether or not you will testify, if called to testify before this committee, or any of its subcommittees. Will you be willing to do that? Mr. WELCH. Yes, Mr., Chairman. I would be willing to do that. Senator LEVIN. Thank you. Now you can really go. [Laughter.] We just wanted to scare you a little bit. [Laughter.] [Whereupon, at 9 a.m., the hearing was adjourned.] [The nomination of John J. Welch, Jr. was reported to the Senate by Senator Sam Nunn on October 20, 1987, with the recommendation that the nomination be confirmed. The nomination was confirmed by the Senate on October 23, 1987.] |