At Hearing, Portman Secures Commitment from Nominee to be OMB Deputy Director to Support Bipartisan Safeguarding American Innovation Act & FAST-41

June 30, 2020 | Press Releases

WASHINGTON, DC – Today at a Homeland Security and Governmental Affairs Committee (HSGAC) hearing, U.S. Senator Rob Portman (R-OH) secured a commitment from the nominee to be the Office of Management and Budget (OMB) Deputy Director that he would support Portman’s bipartisan Safeguarding American Innovation Act and also support the Federal Permitting Improvement Steering Council created through Portman’s FAST-41 legislation.

Portman, as chair of the Permanent Subcommittee on Investigations (PSI) introduced the bipartisan Safeguarding American Innovation Act which will crack down on the theft of intellectual property at federally funded research institutions and universities by China and other foreign governments. A recent NIH investigation resulted in the resignation or firing of 54 scientists for ties to foreign governments. Portman led a year-long PSI investigation into this issue culminating in a bipartisan report and hearing that detailed how American taxpayers have been unwittingly funding the rise of China’s military and economy over the last two decades while federal agencies have done little to stop it. Starting in the late 1990s, through its “talent recruitment programs,” China began recruiting U.S.-based scientists and researchers to transfer U.S. taxpayer-funded research and IP to China for their own economic and military gain. The Safeguarding American Innovation Act  is the product of that investigation and will ensure that the federal government is taking decisive action to safeguard American innovation.

In addition, Portman highlighted the importance of making his FAST-41 legislation permanent. In 2015, Portman sponsored the Federal Permitting Improvement Act, which Congress ultimately enacted into law as Title 41 of the Fixing America’s Surface Transportation (FAST) Act. That bill, now known as FAST-41, significantly reformed the federal infrastructure permitting process while leaving environmental protections in place, and created the Permitting Council. Currently, FAST-41 will expire in 2022Senator Portman, however, has introduced legislation, the Federal Permitting Reform and Jobs Act, to lift the sunset on FAST-41, which will ensure that the Permitting Council can continue its work to make the infrastructure permitting process more efficient and reduce unnecessary delays. A more efficient permitting process supports the creation of new jobs, which will help the nation recover from the COVID-19 crisis.

Excerpts of the hearing can be found below and a video can be found here.


Portman: “Well first let me say I’m delighted, Derek, that you’re willing to continue in public service and as you know, when you came out of private service this last time, I thanked you for your willingness to serve knowing it was going to be an exciting experience, having no idea that we’d be going through what we have in terms of just these historic challenges, particularly the global pandemic. But your background and your record are needed right now, badly so I am supportive. Probably the most important part about your background in this committee is the fact that you once were a HSGAC staffer, so you know what we go through. But you’ve been in the private sector, you’ve been successful there. You’ve been in the public sector, been successful there. You actually were a Presidential Management Fellow at OMB, which you didn’t mention earlier. You also worked for a biotech startup, which I think is actually helpful right now with what’s going on with regard to COVID-19 challenges. And so I’m appreciative that you are willing to step up and based on your answers today to the questions that have been posed, obviously you have a good sense of what the deputy role is. You’re effectively doing it and that’s important too. You know we don’t have the time to bring people up to speed right now, it’s a marathon being run at a sprinter’s pace and so I appreciate your willingness to serve and I’m going to be supportive. What I will tell you is this committee always wants more and better information and as the chair of PSI, as you know, we struggle with this constantly and so I’d like your commitment today, as you have given already to Senator Peters, that you will be there to be responsive to our requests and help us to be able to do our important oversight job.”

Nominee to be OMB Deputy Director, Derek Kan: “Absolutely, Senator Portman, you have my word.”

Portman: “There are a number of projects I’ve talked to you about in the context of our conversation on this nomination and one is the Safeguarding American Innovation Act. I see Senator Hassan is on and others who are cosponsors of this legislation.  But it basically says we’ve got to stop China from taking our innovation, our research, in some cases our intellectual property that they then patent and it’s been going on for 20 years. And the only way to do it effectively, we thought, was to give OMB a significant role here because there’s so many agencies and departments involved including NIH, the National Science Foundation, including the Department of Energy and others and so  we established this Federal Research Security Council at the Office of Management and Budget to include representatives from all these federal science agencies, of course, but also the Intelligence Committee and the notion is that we would take what’s already been started at the Office of Science and Technology, which is in the White House, and really super charge with the authorities of the Office of Management and Budget. The job would be to coordinate all the grant-making agencies to share information for the first time about grantees, look at the national security risk of some research, modernize the federal grant making process and develop a uniform grant application. By the way, the agencies are looking for this. They’re actually supportive of it knowing that we’ve got a huge, huge challenge and NIH just, as an example, fired, effectively 54 scientists. 54. About 90 percent of whom, by the way, had ties to China. This just happened in the last couple of weeks and we see case after case of these arrests being made and what’s happened is, really been very helpful to China and very harmful to us in terms of our economy and our military. So I appreciate your already having reviewed this legislation, first do you support the legislation and second, should the legislation become law, do you commit to supporting the establishment of the Federal Research Security Council quickly?”

Mr. Kan: “Absolutely, Senator Portman, thank you for flagging this very important issue. I have taken a close look at the proposed legislation. One of the great sections of the proposed legislation that you and Senator Hassan have introduced is Section 11 on federal grant application fraud. It gives us the tools we need to really prosecute the issue, you’ve surfaced that. Developing R&D and then exporting it to countries that may not be friendly is a major problem. We currently don’t have some of the tools to be able to prosecute that, however the legislation you proposed really provides us with some of those tools to pursue those and shut off some of those liabilities.

Portman:  “Thank you, and I should say that Senator Carper at the Permanent Subcommittee was my partner in the investigation and also is the co-author of legislation and it is a bipartisan bill and it’s really a non-partisan issue and one we’re going to need your help to be able to ensure that we are better organized in our own federal government. There’s a lot of finger-pointing at China, some of it very deserved, but really to me our first job is to get our own house in order and it is amazing how naïve we have been and how we have been so lax to permit this to be able to happen.

“On federal infrastructure we’re talking about a new COVID-19 bill that might have some significant funding for infrastructure. I think there are actually some great opportunities there including filling in the state coffers because they have less gas tax and yet a lot of shovel-ready, merit-based projects that we could help on. Others have talked about the need for more infrastructure spending in other areas, like fiber optic cable for broadband, particularly expansion in rural areas. The problem we have with a lot of this stuff is permitting and the federal permitting process has gotten out of hand over the years. We still rank something like 26 in the world in terms of our ability to green light a project and so infrastructure dollars globally don’t tend to come to United States. What has really helped is this infrastructure permitting council. The OMB is responsible for housing this council. It includes all the different departments and agencies that have to do with permitting. We finally have a good executive director there, well we finally have an executive director that has actually been appointed. The acting director did the best that she could, but finally we have somebody there permanently. And we’re making some progress. Do you commit to supporting the Permitting Council’s work as deputy at OMB because that will be one of your responsibilities? And do you have any suggestions on how we can bring more transparency, accountability and efficiency to the permitting process going forward?”

Mr. Kan: “Absolutely thank you for your leadership on this. A lot of the permitting advances we have made are largely because of FAST-41 in which you were a key player in that.  At DOT the permitting dashboard and  the management of the permitting dashboard was a responsibility of mine and so I managed a team that managed the permitting dashboard. I think one of the important aspects of the FPISC is making sure that we incorporate all of the types of permitting that exist. We don’t have full coverage. I think one of the types of projects that we should also consider are projects that aren’t simply mining, transportation, infrastructure projects but are there other projects out there in which we should broaden the scope of FPISC to ensure that if you have a permit for a specific task, you can use that permit for other projects as well so I look forward to working with you, this is such an important issue and frankly a very cost efficient way to accelerate infrastructure in this country.”

Portman: “Well thank you my time is up, I will just say you’re right about FPISC, we do have legislation to expand it to other areas. It’s worked. It’s saved over a $1 billion, think about that. It has saved over $1 billion of otherwise wasted money, much of it taxpayer funded and it is not short circuited the process. In other words, we still have the NEPA reviews and so on. It’s been bipartisan, Senator McCaskill and I were the original authors but it’s one where we need to get rid of the sunset, keep it in place, and make sure it expands to more and more projects because it really works to save money and I’m sure we’re going to put more federal money into infrastructure, let’s be sure that dollar can be stretched as far as possible by having sensible permitting. Thank you Mr. Chairman, and good luck Derek.”