Good morning and welcome to the Subcommittee on General Oversight's hearing on the Resolution Trust Corporation's implementation of the management reforms of the RTC Completion Act of 1993 and its amendments to the Minority- and Women-Owned Business Program. Today's hearing is very important to me as well as other members of this subcommittee and the full banking committee. I, along with many of my colleagues on this committee, have heard from individuals nationwide who, in too many instances, have consistently encountered difficulty when attempting to conduct business with the RTC. As a government corporation established to dispose of and manage the assets of failed savings and loans, it is imperative that all individuals receive equal opportunity to participate in this process.

While this financial crisis cost the taxpayer billions of dollars, it also created a

variety of financial opportunities for related businesses, regardless of race, ethnicity or gender. Yet, it has been widely reported that there are too many examples of only "insiders" being able to secure viable deals with the RTC. Other examples of flagrant abuse and misuse of power by RTC personnel as reported to this subcommittee, I believe, can be attributed to a lack of responsible oversight and management, from the top, of those individuals responsible for executing these directives.

I want to state for the record that I am somewhat dismayed that here we are one year and $10 billion later and we still do not have a chief executive officer who will be accountable to this Congress and the American taxpayer in directing the RTC to abide by the law. How can we expect to see the long-overdue results we need to see in the MWOB program under these circumstances. Yet I am certain that you, as representatives of the RTC, are prepared today to dazzle this subcommittee with stellar numbers reflecting record achievements when I have proof to the contrary. It is unfortunate that Mr. Altman could not be here with us today, but he has assured me that Jack Ryan, the permanent deputy chief executive officer will respond in full to the subcommittee's questions and be accountable for the RTC's policies outlined today.

Toward that end, there are specific areas that the subcommittee will be targeting this morning and will continue to monitor carefully until the RTC completes its task. Specifically, we will focus on the progress the RTC is making in advancing its management reforms agenda. I am including these concerns in my opening statement because I want to make it absolutely clear that these are the areas of greatest importance to me and other members of this subcommittee and the banking committee.

I want to know what the RTC is doing to maximize the use of minority-and womenowned businesses; to increase opportunities for small investors; to promote and guarantee

adequate competition and fair and consistent treatment of offerors; to ensure that contracting policies and procedures require the purchase of sound, cost-effective services; to ensure that contracts are adequately planned, including clear assessment of services needed, cost estimations and scope of work definitions; to ensure that all policies and procedures are followed in the solicitation, selection and awarding of contracts; and last, but not least in importance, to provide the training and necessary oversight to guarantee that all RTC program and field offices understand the Minority and Women's Program requirements and incorporate them into their daily operations.

I have read the status report of the RTC Completion Act Management Reforms Section 3(a) and am requesting a copy of the forthcoming directive regarding the Contracting Policy and Procedures Revision due to be finalized this month. Further, I would like to know what affirmative actions the RTC has taken under the revised minority preference in acquisition statutes to increase the participation of minority acquirers in the resolution of failed thrifts; and I would like to review in advance the new Minority Resolution Preference Guidelines to ensure that they reflect the intent of the RTC Completion Act and, in fact, maximize MWOB participation. Much to my dismay, the RTC issued guidelines on January 10, 1994 which were immediately rescinded as "not complete nor fully reflective" of RTC's implementation plans. This flawed guidance was provided to potential minority acquirers and caused serious concern. Even more distressing is the issuance of the Directive on Minority Preference in Resolutions dated February 28, 1994 that I received a copy of yesterday, which followed the RTC's solicitation of bids nationwide without this directive available or in place. This is not good. Please know that if there is some confusion as to what Congress meant when it adopted this language, we will be more than willing to help you interpret the statute in a clear, concise manner.

Also, I along with other members of this subcommittee will be monitoring very carefully the RTC's complete implementation of the 10 management reforms. We do not intend, however, to allow the RTC to continue working in such a haphazard and inconsistent manner. Time is of the essence here, and since this is Congress' last opportunity to ensure the RTC is operating in a safe, sound and equitable manner, I must stress the importance of consistent policy and guidelines and the implementation of reasonable mechanisms to ensure this. Therefore, this subcommittee is requesting a monthly status report on the implementation of all 1993 management reforms and the specific details of the sale of each of the remaining 63 institutions. I want an analysis of all bids and awards included in the documentation for these institutions. This subcommittee will be carefully monitoring the effectiveness of the implementation of the reforms and the efforts made by the senior Treasury and RTC executives to make certain that those charged with the task of implementing these reforms on a day-to-day basis are doing so as was intended by law.

The RTC is scheduled to terminate its operations on December 31, 1995 and the window of opportunity for minority-and women-owned businesses is closing. Last March 23rd, I was pleased to welcome Roger Altman as Interim Chief Executive Officer of the RTC. At that time, I thought that I made it very clear in my opening statement that "there has to be a commitment to minority, women and small business participation from the top down for the RTC to function in accordance with law". Further, I believed that the new Administration needed time to implement these changes particularly as it relates to diversity within the RTC. However, here we are one year later and the RTC appears to be operating in a "business-as-usual atmosphere" without fear of reprisal. This must stop and the RTC must increase contracting opportunities for MWOBS and MWOLFS in the management and disposition of RTC's remaining assets, in business and legal service contracts, asset purchases (including investor funds), and the acquisition of thrift

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institutions. As chairman of the subcommittee, I believe that there is a direct correlation between effective implementation of these rules and increased opportunities for all qualified contractors and acquirers. It is imperative that those at the top recognize that we will be unable to successfully implement reforms in these final months unless we integrate and diversify the RTC's work force, particularly those positions charged with impacting policy and performance. This subcommittee will also continue to monitor the employment practices of this agency as it considers its transition into the FDIC.

At this time I would like to welcome our witnesses and hear from other members who wish to be recognized at this time for opening statements.

Today's witnesses are: John Ryan, Deputy Chief Executive Officer of the Resolution Trust Corporation; Johnnie B. Booker, Vice-President and Director of Minority and Women's Program, Resolution Trust Corporation; J. Paul Ramey, Vice President and Director of Resolutions, Resolution Trust Corporation; and Ellen Kulka, Senior Vice President and General Counsel of the Resolution Trust Corporation.

If for some reason, I am unable to have all of my questions answered by the RTC this morning, I will submit them in writing and would like your assurance that they will be responded to in a timely manner.