Nomination of Joe M. Allbaugh
for Director of the
Federal Emergency Management Agency

The following document contains the typewritten answer provided to the Senate Government Oversight Committee by Joe M. Allbaugh, as transcribed by Democrats.com.

Pre-Hearing Questions 

Bush-Cheney Transition
1800 G Street Northwest
Washington DC 20270
202-513-7400
February 5, 2001

I. Nomination Process and Conflicts of Interest

5. There have been allegations in the press that, during your tenure as Governor Bush's Chief of Staff, you were involved in one or more meetings at which representatives of Service Corporation International (SCI), a Texas-based funeral home company, and representatives of the Texas Funeral Services Commission (TFSC) were present. The allegations include claims that TFSC staff members were pressured during the meeting(s) and in conversations afterward to terminate an ongoing investigation into SCI. Please explain to the Committee your involvement in these meetings and subsequent conversations and provide your response to these allegations.

Allbaugh: I was present at one meeting attended by representatives of both the Texas Funeral Service Commission (TFSC) and Service Corporation International (SCI). I attended two other meetings, each with just a single TFSC representative. I never pressured anyone, including TFSC staff members, to terminate an investigation of SCI or any other company.

On May 19, 1998, Texas state senator John Whitmire (a Democrat) invited me to a meeting he had arranged between senior representatives of Service Corporation International, on the one hand, and Chairman Charles "Dick" McNeil and Executive Director Eliza May of the Texas Funeral Services Commission, on the other, and four or five others. I recall that Senator Whitmire was incensed that the TFSC had engaged in what his constituent Robert Waltrip (chairman of SCI) considered to be TFSC's overly aggressive tactics in investigating alleged improprieties by SCI affiliates. In particular, Senator Whitmire was outraged at an unannounced "raid" on Good Friday morning, the previous month, during which investigators demanded immediate production of what Mr. Waltrip considered to be an extraordinary amount of documents from a number of SCI affiliates (and perhaps other companies) in the Dallas area. I recall that the dispute between SCI (on behalf of whom Senator Whitmire spoke) and the TFSC in that meeting was over the extent and manner of the production of documents demanded by the TFSC, and the identity and description of the desired documents, but not about the existence of the investigation itself. Most of the dialogue in that meeting was among Senator Whitmire, Mr. Waltrip, and Chairman McNeil. The meeting concluded when I asked TFSC's general counsel to provide a list that afternoon of the documents TFSC required, and indicated I would provide that list to Senator Whitmire's staff immediately thereafter. I did so, and the parties soon resolved their dispute over this issue.

I viewed my participation in this meeting as that of a facilitator to resolve this dispute over production of documents, and nothing more. It is my belief that Senator Whitmire, SCI, and the TFSC representatives also viewed my participation in this meeting as merely that of a facilitator. Indeed, both principal camps to the dispute were seeking the assistance of the governor's office perform that role. Moreover, the only reason he meeting was held in my office is that I did not have time to attend it at the location established by Senator Whitmire, so I offered them the benefit of my office that morning as the only option allowing me to attend.

I recall having only two other meetings with any TFSC representatives on this topic; each meeting involved just one TFSC representative. It is my recollection that I met Executive Director May in August of 1998 - after the TFSC had reviewed the documents provided by SCI and had announced its $450,000 fine against SCI - to inquire about the facts behind the press reports associated with these developments. Possibly a month later, Chairman McNeil came by my office at his request to report on the status of the matter. Each of these meetings was brief and inconsequential from my perspective. Neither at these meetings nor at any other meeting, nor in any conversation, did I pressure any TFSC representatives to stop any investigation. In fact, by the time of my August meeting with Ms. May, the TFSC had announced its fine against SCI.

TFSC was the principal regulator of Texas funeral services, and was an agency independent of control from the governor's office. The only relationship between the governor's office and the TFSC was in the appointment of commissioners to multi-year terms of office. By state law, the governor could remove commissioners only for three statutory reasons: neglect of duty, incompetence, and fraud or dishonest conduct. Moreover, I am not aware of any mechanism by which the governor's office could affect the employment of TFSC staff. Thus, there is no means under Texas law that would have permitted me to pressure the commission (in that or any meeting) to take any action. In any case, I had no desire to affect the investigation adversely, and I did not exert any such pressure. 

The reported allegations referenced in your question are not grounded in fact, nor are they credible.

I both recognize and support the role of regulatory agencies to ensure that rules governing the conduct of regulated industry are followed. I viewed my role in this matter as consistent with that objective. So, even though the governor's office had no power or authority to compel action by either the TFSC or SCI, I accepted the invitation to help facilitate resolution of their dispute over the TFSC's demand for SCI records.