That completes my oral remarks, Mr. Chairman. I would hope that my full testimony could be submitted for the record.

Mr. DUNCAN. Your full testimony shall be placed in the record, Mr. Hall, and we'll get to questions shortly after we hear from some other witnesses.

The next witness will be Ms. Mary Schiavo, who is the Inspector General for the Department of Transportation.

Ms. Schiavo, would you stand and raise your right hand, please, and be sworn?

[Witness sworn.]

Mr. DUNCAN. Thank you very much for being with us today. You may begin your testimony.

Ms. SCHIAVO. Thank you, Mr. Chairman. Good morning. I appreciate the opportunity to be here.

With your permission, I will submit the full statement of the Office of the Inspector General for the record. I know that time is limited.

Mr. DUNCAN. The full statement will be placed in the record.

Ms. SCHIAVO. I want to do that because after the opening statements here today, I believe there are a few other things that need to be said that are not in my statement, and I feel compelled to respond to them.

In answering the question of what is wrong at the FAA, at least for myself and my office, we only have to go back through the history of what I have been doing for 51⁄2 years.

Starting in 1991, we were addressing these very same issues. We were asking what is wrong with FAA inspections. We came up with a virtual laundry list of things that were wrong.

We had a hearing. Many distinguished Members of Congress made some important points and asked some important things of the FAA. There were promises made and promises not kept. This is back in 1991-totally different leadership, totally different administration, but the problems go on.

We found problems in safety oversight, problems in maintenance, problems in repair stations, problems in foreign-manufactured parts. That was an interesting study, as the FAA is supposed to conduct surveillance over the manufacture of foreign aircraft parts. When we started that study the FAA said, "You got us. We do not do it." Bogus parts-we all know I have had a big program to combat bogus parts. When my office first got in bogus parts, the FAA actively-I have a letter in writing. This was back, again, in the previous Administration from the then administrator of the FAA saying to the Secretary, "Get the IG out of bogus parts. The airlines do not need it right now because it will cost them money.” Since then I am pleased to report we have approximately 150 convictions, and we have done a lot to clean out bogus parts, but we had to start that initiative without the active support of the management of the FAA, even though in every instance-and kudos to those inspectors out there and to those brave men and women who have come forward to Senator Cohen, have resorted, I might add, to calling me at my home because they are so afraid of the FAA, and have come forward to tell the truth about it.

It was the inspectors that were with us in every step of the way. In every single prosecution we brought, we could not have made a bogus parts case without the FAA inspectors in the field.

But something goes wrong as you are going up the chain of command, and the something that goes wrong appears to be judgment somewhere along the way.

So bad is this problem that earlier this year I sent a memo to the head of the FAA saying, "From all of our work and from the things that we have seen, we believe that there is a culture of unaccountability at the FAA.”

We found that in things where common sense-I mean, you do not have to be a safety engineer, you do not even have to be a bureaucrat to figure out that some things are really wrong.

For example, we had a whole string of reports such as the buyouts that the Government approved to get the ranks of the Government down and to shrink the size of Government. The FAA was using them, and some of the people were coming right back, in one instance the next day.

We had problems over their management of things like move money, of what has come to be known as the "free travel perk," and that is where they ask the airlines for a quarter of a million tickets a year for training, and they were using them for the vacation.

So not just in one area in inspection and safety oversight, but in many areas we found there was simply no accountability.

We will not even begin to get in the problems that were uncovered with the replacement of the air traffic control system, which, of course, the original one, AAS, eventually had to be scrapped and basically started over.

Finding after finding we have come up with in my office, not through one Administration, but through two, three-through several Secretaries, through several administrators. Yet, we got two answers every time we found problems: one, "Well, safety has not been compromised."

One thing we found in preparing for Senator Cohen's bogus parts hearings is that the FAA did not have a definition of what safety is and when it is compromised. It turned out it was when one or two people say it is, and that was the definition.

"Yes," they said, "but there has never been a major crash." That is how they earned the nickname "The Tombstone Agency."

Now, that is not a very polite name for our Nation's premier air safety agency, but I did not make that up. That has been their nickname for some time-not just this Administration, but for several Administrations.

Our safety agency is called "The Tombstone Agency." Why? Because they wait for major loss of life before they will make a safety change.

Now, is this a resources issue? Heaven knows everybody wants more safety oversight and more inspectors, and every Government agency believes that they need more people. I am sure that the FAA is no different, and there are several areas where, in our work in the Office of Inspector General we have said, "Give the FAA more resources." But let us look at ValuJet.

They conducted almost 5,000 inspections before the crash-5,000 inspections. Would more money and more inspectors have changed

it? And only after the crash and, I might add, after the public scrutiny, after the media started digging, and after some whistleblowers came forward was there action.

ValuJet is kind of a microcosm for the problems that we have uncovered at the FAA-inspections, maintenance, contractors-that has been an important issue and problem, contracted-out maintenance. We have reported numbers of problems which we found studying bogus parts-for example, repair stations had bogus parts anywhere in numbers from 45 to 95 percent, depending where you got the parts.

A lot of people ask me what caused my office and myself to come forward and start questioning the oversight of ValuJet back in February, and it seems kind of simple: they had five incidents in a very short period of time.

They had one incident which one official at the FAA told me was impossible to actually occur-an uncontained engine failure. I have a memo where they said, when we were working bogus parts cases, that if an engine explodes the housing will contain it and you will not have shrapnel flying through the fuselage of an airplane ripping people apart. It would not happen. Of course, a month after the bogus parts hearing, exactly that happened to ValuJet.

But the last straw was a blizzard. In that blizzard the planes were grounded, nobody could go anyplace, we could not go anyplace. In D.C. you could not get two blocks. Everybody remembers that. But one jet took off-one. The pilot of this particular company decided he or she was going. It was ValuJet. Again, it belies a judgment issue.

By the way, the same thing happened yesterday, for any of those of you who are curious. In the midst of all the tornadoes, etc., one carrier chose to take off.

The problem on judgment boils down to many things, but in one particular case something I have been arguing since 1991—it boils down to, among other things, the dual mandate. You can not have the Nation's safety agency having responsibility for promoting aviation and for regulating safety.

Now, I know you will tell me that whenever you pass a regulation OMB takes a cut on what the financial impact will be on the industry. We all know that. I have worked in other departments. I have worked in departments that pass regulations and do safety such as safety of our workers and miners. That could not take a second seat to safety of aviation. But they do not have that as part of their mission.

Sure, they consider what the financial impact is, but they do not do it every day.

In response to disasters and death, they do not cite, "But we have to promote aviation."

So it is going to take more than simply deleting promoting aviation from their mandate. That is a simple word fix. It is going to take a culture change, and it is going to take a change in judgment-how you look at problems, what you do when the NTSB tell you it is time to change.

You can not just say, "Well, we will do it like we always do but, 'wink-wink,' we do not have that job any more.”

The problem with the judgment in the culture is so ingrained. I am going to cite another example from some of our bogus parts battles, and that was when-again, this was back in 1991 or 1992. The Secretary was so concerned about the problem that we had a briefing of the Secretary and all the senior staff, and the head of the FAA walked out of the briefing. Maybe he had a good reason. I do not know. But after that he sent a letter saying, “Shut it down. Shut down the investigations of the bogus parts because we have got to promote aviation." I have it in writing.

Now we hear that the truth is scaring the public. Well, again, that is what you would expect if your job is promoting aviation. You would treat the public like poor dupes who have to be kept in the dark about the facts, but this is the United States of America and that is not how we operate.

Time and time again we have made recommendations, as has the NTSB, and we have also seen incidents, but we get the same answer, "It does not affect safety," or, "There has not been a major crash." When I was first invited to this hearing-this will probably come as a surprise to the Members, but this is what I was told by staff, who are going to remain nameless to protect them, but I was told that the purpose of the hearing was to take a major hunk out of my hide for my statements concerning ValuJet and other things. I find that very interesting. I find that very interesting because, unless certain people blew the whistle, I wonder where we would be today. Would all the truth have come out? Would all of these things have come out about ValuJet? Would all of these memo that have dribbled out one at a time-the 7th, the 14th, the 20th, the May 3 memo-we have had to get them piece by piece as brave individuals within the FAA have told the truth.

Let us turn our attention for a minute to the May 2 report. This report to me is just astonishing, not because what is in it, because the FAA spins data all the time. They have piles of data. We asked for a data tape a few weeks ago. There was so much data on the tape our computers ran all night, and we have big computers. Our computers ran all night and they never did get through this data spin.

But this May report is interesting because there were people on television citing from this May report about how safe and how equally safe-all carriers are equally safe, and how safe ValuJet is. On the very cover of this report it warns that ValuJet-and, by the way, one airline, I might add, that has a rate about-I have not figured it out, but roughly four times that of ValuJet, is cited in this report.

It was only days later that the rest of the facts of that report dribbled out, but we had it in our hands. What was I to do? Sit by and allow false implications to go forward? I do not think so. Now, what about accident predictions? Sure, I have mentioned the accident predictions because now is the time to act. I do not think we wait on crashes. I do not think we wait on body counts. And I do not think we wait on bloodshed. Frankly, I am horrified by the ValuJet crash, and I think we all should be horrified.

But about that safety prediction, which I have been criticized for mentioning publicly, you know, this safety prediction has been floating around the Department for several years. I was at a meet

ing years ago when the FAA said that they predicted by some time after the turn of the century the rates would go up astronomically, but nothing was allowed to be told to the public.

Boeing came up with the same study. Yet, when I mentioned it, it is scaring the public. Well, let me tell you something: the FAA administrator actually made this in a statement, "A recent study by Boeing projects that, given the forecast growth in air travel, if worldwide aviation maintains the same level of safety that it has for the past 5 years, by the year 2013 we can expect to lose one aircraft worldwide every 8 days."

You know what? That is worse than what I thought. I thought it was something like between a week to 15 days. One every 8 days. And yet, that was talked about in the industry, it was talked about in the Department, but, "wink-wink," boy, we can not tell the public.

This is the United States. Of course we can tell the public. We work in the sunshine. Our documents are subject to the Freedom of Information Act. And why should not the public not know? Why should the public not have known about ValuJet's record back on May 2 when this report came out? I will bet a few people would not have been on that plane.

Now, let us look at the NTSB record. The NTSB, God bless them, has an amazing and, in many respects, awful job to do. For years they have been making recommendations-life-saving recommendations. And they make recommendations to many people, but they also make recommendations to the FAA and about the FAA.

I have mentioned that, and I have mentioned that because I am upset that the FAA has been cited as a cause or contributing factor in 241 accidents involving 131 fatal accidents with 970 fatalities from the period 1983 to 1995.

Ladies and gentlemen, these are not my statistics. They come from the National Transportation Safety Board. Again, that bespeaks a problem with our national safety agency.

So, again, you can complain about telling the public the facts, or you can complain about speaking with two voices. Frankly, in the light of blatantly untrue statements, I see no choice but to speak the correct statements, so I do not know how we can remedy that, or about scaring the public, or about taking a hunk for what we report and what we find, but we report, and as long as it is possible for us to do it, we will continue to find the problems and report the facts.

I am not a safety expert. I am a lawyer. I am a prosecutor. I am a bureaucrat. I am a Government investigator. Many people have criticized that I'm not in the FAA. That is absolutely right. But many times we have forced changes through investigations, criminal prosecutions, and through approximately 1,000 convictions and $5 billion of findings over the last 5 years.

It has taken often, I am sorry to say, criminal prosecution to force action. Who has been our ally in the criminal prosecution? We do not go to court. We are just the investigators. We are like a tiny, little, minuscule FBI-the Department of Justice.

The U.S. Department of Justice has been our ally in many, many of these cases and has taken things like bogus parts and run with the ball.