[House Hearing, 114 Congress] [From the U.S. Government Publishing Office] TIME AND ATTENDANCE ABUSE AT THE U.S. PATENT AND TRADEMARK OFFICE ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON GOVERNMENT OPERATIONS OF THE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION __________ DECEMBER 7, 2016 __________ Serial No. 114-128 __________ Printed for the use of the Committee on Oversight and Government Reform [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: http://www.fdsys.gov http://www.house.gov/reform ______ U.S. GOVERNMENT PUBLISHING OFFICE 25-007 PDF WASHINGTON : 2017 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM JASON CHAFFETZ, Utah, Chairman JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland, MICHAEL R. TURNER, Ohio Ranking Minority Member JOHN J. DUNCAN, Jr., Tennessee CAROLYN B. MALONEY, New York JIM JORDAN, Ohio ELEANOR HOLMES NORTON, District of TIM WALBERG, Michigan Columbia JUSTIN AMASH, Michigan WM. LACY CLAY, Missouri PAUL A. GOSAR, Arizona STEPHEN F. LYNCH, Massachusetts SCOTT DesJARLAIS, Tennessee JIM COOPER, Tennessee TREY GOWDY, South Carolina GERALD E. CONNOLLY, Virginia BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois CYNTHIA M. LUMMIS, Wyoming ROBIN L. KELLY, Illinois THOMAS MASSIE, Kentucky BRENDA L. LAWRENCE, Michigan MARK MEADOWS, North Carolina TED LIEU, California RON DeSANTIS, Florida BONNIE WATSON COLEMAN, New Jersey MICK MULVANEY, South Carolina STACEY E. PLASKETT, Virgin Islands KEN BUCK, Colorado MARK DeSAULNIER, California MARK WALKER, North Carolina BRENDAN F. BOYLE, Pennsylvania ROD BLUM, Iowa PETER WELCH, Vermont JODY B. HICE, Georgia MICHELLE LUJAN GRISHAM, New Mexico STEVE RUSSELL, Oklahoma EARL L. ``BUDDY'' CARTER, Georgia GLENN GROTHMAN, Wisconsin WILL HURD, Texas GARY J. PALMER, Alabama Jennifer Hemingway, Staff Director David Rapallo, Minority Staff Director Kevin Ortiz, Professional Staff Member Willie Marx, Clerk ------ Subcommittee on Government Operations MARK MEADOWS, North Carolina, Chairman JIM JORDAN, Ohio GERALD E. CONNOLLY, Virginia, TIM WALBERG, Michigan, Vice Chair Ranking Minority Member TREY GOWDY, South Carolina CAROLYN B. MALONEY, New York THOMAS MASSIE, Kentucky ELEANOR HOLMES NORTON, District of MICK MULVANEY, South Carolina Columbia KEN BUCK, Colorado WM. LACY CLAY, Missouri EARL L. ``BUDDY'' CARTER, Georgia STACEY E. PLASKETT, Virgin Islands GLENN GROTHMAN, Wisconsin STEPHEN F. LYNCH, Massachusetts C O N T E N T S ---------- Page Hearing held on December 7, 2016................................. 1 WITNESSES The Hon. Russell Slifer, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director, U.S. Patent and Trademark Office Oral Statement............................................... 3 Written Statement............................................ 5 Mr. David Smith, Acting Deputy Inspector General, U.S. Department of Commerce Oral Statement............................................... 8 Written Statement............................................ 10 Ms. Pamela Schwartz, President, Patent Office Professional Association Oral Statement............................................... 15 Written Statement............................................ 17 Mr. David Chu, Ph.D., Panel Chair, National Academy of Public Administration Oral Statement............................................... 25 Written Statement............................................ 27 APPENDIX Questions for the record, submitted by Mr. Meadows............... 58 Questions for the record, submitted by Mr. Connolly.............. 102 TIME AND ATTENDANCE ABUSE AT THE U.S. PATENT AND TRADEMARK OFFICE ---------- Wednesday, December 7, 2016 House of Representatives, Subcommittee on Government Operations, Committee on Oversight and Government Reform, Washington, D.C. The subcommittee met, pursuant to call, at 2:22 p.m., in Room 2154, Rayburn House Office Building, Hon. Mark Meadows [chairman of the subcommittee] presiding. Present: Representatives Meadows, Jordan, Carter, Grothman, Connolly, Maloney, Norton, and Clay. Also Present: Representative Hice. Mr. Meadows. The Subcommittee on Government Operations will come to order. And, without objection, the chair is authorized to declare a recess at any time. I want to thank all of you for being here. It was in August of this year that the Commerce Department's Office of Inspector General released what I would say is an alarming report detailing the potential time and attendance abuses at the U.S. Patent and Trademark Office. The OIG compared hours certified as worked by nearly 8,400 patent examiners with data such as records from either virtual private networks or computer workstation records or the like. This comparison actually allowed the OIG to assess whether or not the hours claimed by examiners were backed up by quantifiable data. The results are shocking. The OIG identified some 288,479 unsupported hours by patent examiners over a 15-month period. Now, these hours equate to $18.3 million in potential waste. 415 of the examiners covered in the analysis had 10 percent or more of unsupported hours. And, indeed, 310 of these examiners received above-average annual performance ratings and accounted for nearly 98,000 of the unsupported hours. The unsupported hours could have been helped to reduce patent application backlog, which currently stands at 540,000 or by some 15,990 cases. What is most troubling is the numbers provided by the OIG are a conservative estimate. The OIG wanted to make sure that everything was done in an appropriate manner, and actually received the benefit of the doubt when making their analysis. By some less conservative assumptions, we could push the amount of unsupported hours to be nearly twice as high as the OIG reported. And this, indeed, is unacceptable. The report comes on the heels of a previous OIG investigation into examiner A. This examiner would often leave work early to play golf, and overall, examiner A committed to at least 730 hours of time and attendance abuses. This resulted in nearly $25,500 for time not worked. And I want to add is, when we have this, it has a chilling effect on other people in the workforce. So, conveniently for examiner A, he or she resigned on the advice from the union before action could be taken against him or her. Now, when the OIG retroactively tested it's methodology for the new report on examiner A's unsupported hours, it received a similar unsupported hour total. This shows that the OIG's methodology accurately measures the unsupported hours. Now, while not necessarily widespread, the OIG's findings do show that, at the U.S. Patent and Trademark Office, internal controls for fighting time and attendance abuse are lacking. The OIG has six recommendations that would help safeguard taxpayers from fraud at that agency. They include a requirement that examiners provide their supervisors with work schedules; examiners use their ID badges to exit the agency in turnstile facilities; and all examiners log into the USPTO network during their working hours while teleworking. Now, these commonsense recommendations should be adopted now. Now, while some may argue that the total amount of unsupported hours is less than 2 percent of the total work hours logged in by patent examiners, even 1 unsupported hour is too many. The American people deserve better. And I look forward to hearing your testimony on how we can not only address this issue but make sure that we have an accountable workforce going forward. Mr. Meadows. I'm going to wait and recognize the gentleman from Virginia for his opening statements here in a few minutes. And I will hold the record open for 5 legislative days for any member who would like to submit a written statement. The chair notes that the gentleman from Georgia, Mr. Hice, will be attending today. He was here earlier. We appreciate his interest in this particular issue. He is here now. I ask unanimous consent that Representative Hice be allowed to fully participate in today's hearing. And, without objection, so ordered. In addition to that, I make a unanimous request that we enter into the record the investigative report of the U.S. Patent and Trademark Office which would actually be the IG's report, the investigative report. And, without objection, so ordered. [The information follows]: [This report can be found on The Department of Commerce website at: https://www.oig.doc.gov/oigpublications/14- 0990.pdf] Mr. Meadows. I'm pleased to actually welcome here the Honorable Russell Slifer, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director at the U.S. Patent and Trademark Office. Welcome. Mr. David Smith, acting deputy inspector general at the U.S. Department of Commerce. Welcome, Mr. Smith. Ms. Pamela Schwartz, president of the Patent Office Professional Association. Welcome, Ms. Schwartz. And Dr. David Chu, panel chair of the National Academy of Public Administration. Welcome to you all. And pursuant to committee rules, all witnesses will be sworn in before they testify. So if you would please rise and raise your right hand. Do you solemnly swear or affirm that the testimony that you're about to give will be the truth, the whole truth, and nothing but the truth? Thank you. You may be seated. Please let the record reflect that all witnesses answered in the affirmative. In order to allow time for discussion, please limit your oral testimony to 5 minutes. However, your entire written statement will be made part of the record. And so, Mr. Slifer, we'll come to you for 5 minutes. WITNESS STATEMENTS STATEMENT OF THE HONORABLE RUSSELL SLIFER Mr. Slifer. Chairman Meadows, Ranking Member Connolly, and members of the subcommittee, thank you for this opportunity to discuss the United States Patent and Trademark Office's management of employees' time and attendance. I am proud of the work that our nearly 13,000 employees, including more than 8,300 patent examiners, to help our Nation's innovators secure intellectual property rights. The overwhelming majority of these employees are hard-working, highly educated, and highly skilled professionals who perform their jobs with the utmost integrity and dedication. We take seriously any allegation of abuse in our workplace. Any abuse of time and attendance by an employee is unfair to our stakeholders who rely on our agency and to the employees who abide by the rules. It is unacceptable and will not be tolerated within the USPTO. In recent years, we have made workforce management a critical focus and have invested a significant time and effort in improving our overall management for all employees, including teleworking employees and those stationed at our physical facilities. We have taken a number of concrete steps, including requiring new training for employees and supervisors, updating policies, adding controls, and building tools for supervisors to enable our supervisors to engage and manage their employees more effectively. Today, at the USPTO, supervisors receive extensive training, and they have a variety of tools in place to help monitor employees' attendance and work levels, regardless of where the employees are working. We have addressed our workforce management issues by providing new tools, policies, and guidance. My written testimony provides more detail on our extensive efforts to date. In the interest of time, I'll highlight just a few of those now. We created an IT dashboard tool to review employee-specific data to monitor examiners' production and timeliness, which can show early signs of changes in performance and potential time and abuse--time and attendance issues. We implemented a policy requiring all USPTO employees, supervisors, and full-time teleworkers to remain logged into the USPTO's IT system during working hours. We updated the overtime policy for patent examiners, emphasizing that exceeding production goals does not excuse employees from actually working claimed hours. We appreciate the work of the office of inspector general in preparing the August 2016 analysis of patent examiners' time and attendance. The findings and recommendations in the report serve as a valuable resource as we further enhance the extensive measures we have already taken to focus on time and attendance compliance among USPTO employees. We also appreciate the work of the National Academy of Public Administration for their study of our telework programs and controls. The USPTO is committed to implementing additional improvements as necessary in response to the IG's report. Because the report identified overall trends and didn't examine individual employee's cases, our team has worked to rigorously analyze the data in detail to better identify the nature of the unsupported hours. This refined analysis is helping us make tailored improvements to our overall workforce management. While the USPTO is certainly unique among Federal agencies in our ability to quantify the productivity of a majority of our employees, striking the right balance between management tools and employee productivity is a challenge faced by all employers, both public and private sector, and something that we strive to achieve in an effort to ensure the effectiveness and efficiency of our agency in order to better promote American innovation. We have and will continue to work toward ensuring proper and accurate accounting of all time and attendance. Any hour of time claimed and not worked is unacceptable. In closing, I want to underscore our continuing commitment to detect and address all cases of abuse and hold any employee who commits that abuse accountable while also strengthening our overall management and operations. As we continue to support our Nation's innovators, we know that we owe nothing less to our hard working and dedicated employees, to the stakeholders, and to the public we serve. Thank you. [Prepared statement of Mr. Slifer follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Meadows. Thank you. Mr. Smith, you're recognized for 5 minutes. STATEMENT OF DAVID SMITH Mr. Smith. Chairman Meadows, Ranking Member Connolly, and members of the subcommittee, I appreciate the opportunity to testify today. First, it is important to mention that our investigation found the vast majority of patent examiners' claimed hours were supported by evidence contained in the various records of computer activity that we examined. Our findings do not indicate this is a widespread problem, which echoes the NAPA report. Second, I would like to thank the employees at USPTO who reviewed our analysis and findings and helped us achieve the more accurate results contained in our report. It's rare that such a collaborative effort on such an investigation occurs, which is testimony to the professionalism of those employees. Even though it may not be widespread, the data establishes that claiming hours not actually worked is a problem at USPTO. An earlier OIG investigation uncovered paralegals at the Patent Trial and Appeal Board being directed by management to falsify hours over several years, and totaled more than $5 million in waste. Next, OIG reported on patent examiner A, who falsely claimed to work at least 730 hours in 2014 alone, which amounted to more than $25,000 of waste. Lastly, in August 2016, my office issued a report that identified over a 15-month period approximately 288,000 hours not supported by the data, which equates to over $18 million in potential waste. The analysis compared the time examiners asserted as computer-related work on their time sheets against four sets of data that evidenced computer work. For the hours examiners claimed but lacked any supporting data, we considered those hours to be unsupported. Our analysis included a separate 9-month period when a policy change required full-time teleworkers to be logged into the USPTO network for all the hours claimed as teleworking. Evidence of substantial abuse by some patent examiners is particularly troubling, especially considering my office analyzed the data in a light most favorable to the patent examiners. OIG assumed for examiners working on campus that all computer-related worktime claimed supported from the time of arrival until the time they left or 10 p.m., whichever occurred first, regardless of when they actually left the office. I want to emphasize again that the vast majority of patent examiners had few, if any, unsupported hours, and appeared to be working the hours certified on their time sheets. However, our approach identified 415 examiners who accounted for approximately 124,000 unsupported hours over a 15-month period. That amounted to almost 45 percent of the total unsupported hours we found. Of additional concern, approximately three-quarters of those 415 examiners received above-average performance ratings, and 30 percent of the unsupported hours for these high performers was claimed as overtime. Fifty-six of the 415 examiners averaged 24 or more unsupported hours per 80 hours of analyzed time, which equates to 3 or more days of work for every 2 weeks of analyzed time. Seventy other examiners averaged between 16 and 24 unsupported hours per 80 hours of analyzed time. Our methodology may have been actually overly generous. When we analyzed the data for examiners, we switched to a router that provided more precise indication of online activity, the OIG found that the total number of unsupported hours actually doubled. In addition, the use of a less conservative methodology for on-campus examiners, using computer logoffs and other activity to determine work stoppage, increased the total unsupported hours by an additional 327,000. The OIG recognizes that examiners could conceivably perform examiner-related work offline. However, that would mean that those examiners are working offline for the entire day without logging into the USPTO network, without logging any activity in the patent examining application, and without checking their email. However, during the initial 6-month period where there was no requirement for them to be logged on, we found almost 1,300 days in which full-time teleworking examiners had zero computer activity, not even checking their email once for 2 or more days in a row. Therefore, we recognize that it's possible on an individual basis; we believe it's just not a plausible explanation for the volume of unsupported hours. While we acknowledge the changes USPTO management has implemented in response to the previous OIG reports, there's still a lot of work yet to be done to improve internal controls over time and attendance reporting. Some of those improvements include empowering supervisors with the tools needed to enable them to properly monitor work performed by employees, a recommendation also contained in the NAPA report. In closing, we note that the OIG interpreted the exceptions to the Computer Matching and Privacy Protection Act of 1988 to prohibit pursuing criminal prosecution or civil remedies in recommending that the agency take administrative action against those examiners engaged in misconduct. In a September 13, 2016, hearing, the question was asked if the OIG report would be more accurate if the OIG had interviewed individuals. And the correct answer was yes. Therefore, if POPA and the other unions would encourage their members to voluntarily be interviewed by the OIG, we would be happy to interview the examiners to determine if any evidence exists to support their claims of hours worked. This would be done with the understanding that those results of the interviews would be made available to the USPTO to take appropriate action against any examiners found to have claimed hours where there was no actual work performed. I want to thank the subcommittee for the opportunity to testify today. And I look forward to your questions. [Prepared statement of Mr. Smith follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Meadows. Thank you, Mr. Smith. Ms. Schwartz, you're recognized for 5 minutes. STATEMENT OF PAMELA SCHWARTZ Ms. Schwartz. Chairman Meadows Ranking Member Connolly, and members of the subcommittee, thank you for inviting me to present the views of the Patent Office Professional Association, POPA, on the inspector general's report on patent examiners' time and attendance. The OIG's conclusions contradict those of the National Academy of Public Administration, which reported in 2015 that it is, quote, ``unlikely that time and attendance abuse is widespread or unique to teleworkers, and it does not appear to reflect the activity of the workforce as a whole. The USPTO has requisite procedures in place to monitor time and attendance,'' closed quote. The OIG's analysis is based on flawed methodology and faulty assumptions. Reliance on turnstile, VPN, and workstation records does not reliably capture all the work performed by the examiners. The OIG did not account for unrecorded, uncompensated overtime regularly worked by examiners to meet their production goals, which far exceeds the 2 percent unsupported time. The GAO recently issued a report on patent quality in which it concluded that 70 percent of examiners must work extra uncompensated hours to meet their required production quota. A companion GAO report found that examiners worked between 5 to 10 hours of uncompensated overtime each pay period on average. Even the OIG's report acknowledges that there were, quote, ``many days where the evidence of computer- related work activity appeared to exceed the time claimed for the day,'' closed quote. Even if a teleworker was not connected to the agency's computer system, this doesn't mean that she wasn't working. Many aspects of an examiner's job can and are routinely done offline, like working from printed application documents and studying printed copies of prior art patent and nonpatent literature. Furthermore, there was no policy requiring teleworkers to be logged into the agency's servers during all their working hours for a substantial portion of the 15 months studied. The OIG acknowledges that there was a statistically significant reduction in the number of unsupported hours following the issuance of the agency's full-time teleworker policy in February 2015. To the extent that some teleworkers did not consistently log into the agency's servers in the 9 months immediately following the issuance of the policy, it only means that they were not yet conscientious about complying with the new policy. Buried in the OIG's report on page 17, footnote 39, is this important concession that undermines the report's conclusions, quote: ``Since the OIG methodology uses VPN and workstation records to support worktime for teleworkers, this approach could incorrectly determine that certain hours were unsupported if the examiners were working but did not connect to the USPTO network,'' closed quote. Even assuming that the OIG's methodology was accurate, the ostensibly unsupported hours equal only 1.6 percent of overall time, less than 8 minutes a day on average. A 98.4-percent time accounting efficiency rate demonstrates an extraordinarily high level of productivity for any employer. As a result of this extraordinary productivity, the examining corps has reduced both the backlog of unexamined patent applications as well as the average time for completing examination by 25 percent in the last 5 years. While potential amount of loss estimated by the OIG was $18 million over 15 months, the USPTO saves over $100 million a year due to its extensive telework program, including over $38 million in real estate savings. According to the USPTO, in fiscal year 2015, the 2,000 full-time teleworkers who participate in the Telework Enhancement Act pilot program were actually 6 percent more productive than other examiners in terms of annual production units, resulting in a revenue gain of over $35 million, far more than the alleged potential loss estimated by the OIG. Nonetheless, POPA is in full accord with the agency's efforts to ensure that all employees work their full 80 hours each pay period. POPA has worked with our management regularly to achieve full compliance with time and attendance requirements, and we will continue to do so. Thank you. [Prepared statement of Ms. Schwartz follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Meadows. Thank you, Ms. Schwartz. Dr. Chu, you're recognized for 5 minutes. STATEMENT OF DAVID CHU, PH.D. Mr. Chu. Thank you, Mr. Chairman. Members of the subcommittee, it is indeed a privilege to appear before you to summarize the report by the National Academy of Public Administration on the telework program of the United States Patent and Trademark Office. I should emphasize the report was undertaken in response to the issues you identified earlier in this time period, really work in the fall of 2014, the spring of 2015. I should also emphasize that I'm appearing today as a fellow of the academy and not in my position with the Institute for Defense Analyses. The National Academy effort comprised two parts, an internal controls review undertaken in partnership with Grant Thornton, an accounting firm, and a program review on the efficacy of the telework program. The conclusions of the internal controls review were generally positive in character. Several essentially small deficiencies were identified that could easily be corrected. Much of the report is focused on the program review: How well does this program actually perform? And it's our conclusion that it is a valuable program from the perspective of managing the United States Patent and Trademark Office. Indeed, it's a foundational element of its business model as we're all aware. We conclude there's no difference in productivity between those who telework and those who do not. And our further conclusion was the telework program at USPTO ought to continue. We did have a series of recommendations to strengthen the ability of the program to perform effectively. And I'd like to touch very briefly on four of those recommendations. First, we felt there should be stronger tools in the hands of supervisors with regard to their ability to manage the examiners for whom they are responsible. We did a survey of supervisors. An important minority reported that they thought they needed more instruments in order to be effective as managers. It's a very simple step and which I'm pleased to understand that the office has taken--at least up to a certain point--is requiring a presence indicator be used. And the office now requires that of full-time teleworkers. We recommend it be done for all PTO employees. It's valuable, not only for the purpose of time and attendance, but also from the perspective of encouraging a more collaborative approach to the patent process. Second, the one difference we found between the Patent and Trademark Office telework program and telework programs elsewhere, both in governmental units and the private sector, is, in most other programs, telework is emphasized as a privilege, not a right. And we thought it would be useful for the office to signal that important distinction by requiring employees to re-sign their agreements every 2 years. It's my understanding that the agency has undertaken that step. Third, we believed it was timely to begin reviewing what standards for productivity we expect by art unit. These art units differ significantly in terms of their complexity and nature of the applications. Many of these standards date back to the 1970s and have not been substantially reviewed since that time. And, again, I'm pleased to understand that that series of reviews has just started. That is not a short-term fix. It will take time to understand what kind of productivity standards should Patent and Trademark Office employees sustain. And, finally, we felt there should be more attention not just to the volume of output but the quality of the patents that are granted. Ultimately, as we all understand, the ability to protect intellectual property correctly is a foundational element for the success of the American economy. That turns on the quality of the patents that are granted. Much of our discussion is today about inputs and outputs in the terminology of the government performance community. What really counts here are, what are the outcomes? And that importantly does turn on the quality of the patents that are granted. Thank you, Mr. Chairman. I look forward to your questions. [Prepared statement of Mr. Chu follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Meadows. Thank you so much. The chair recognizes the gentleman from Virginia, Mr. Connolly, for his opening statement. Mr. Connolly. Thank you, Mr. Chairman. I thank you for holding this hearing on the penultimate day of the 114th Congress. There is no human problem that cannot be improved with another hearing. Looking at the findings in the recent Department of Commerce IG report on time and attendance issues of patent examiners at the U.S. Patent and Trademark Office--and I want to thank the IG for his report--who found that 1.6 percent of the total hours that PTO examiners claimed they worked during a 9-month period in 2015 lacked supporting computer evidence of actual work activity. The IG concluded that this could have resulted in potential waste of $8.8 million. The IG also looked at an overlapping 15-month period and concluded that the unsupported hours could have resulted in potential waste of $18 million. However, the IG has found no proof of actual misconduct in this latest report. Let me be clear about my views on time and attendance abuse. It's unacceptable. Any amount of fraud, whether it's 1.6 percent of total claimed hours cited in the IG report or twice that amount, is unacceptable if proved true. The IG found that, for about 10 percent of the hours worked by a small fraction of patent examiners, apparently no evidence of work activity from an evaluation of their computer use could be found. The IG notes that this problem was not widespread. The National Academy of Public Administration conducted a review of PTO's internal controls and came to that same conclusion. The IG's audit is valuable but incomplete. The IG's approach does not reflect any offline work done by patent examiners. The Patent Office Professional Association has already testified that many examiners routinely spend a portion of their work hours working offline, and even work overtime without claiming it. I understand that the IG has provided its data and algorithms to PTO to allow the agency to determine whether there in fact were cases of actual abuse of the agency's time and attendance policy. Another question raised by the IG's findings was whether there is a reasonable explanation for why the most unsupported time is associated with PTO's highest performing examiners. Do the findings suggest an indication of a complex managerial problem? A conflict between an examiner's production goals and time and attendance requirements? How can we resolve these conflicts to incentivize the agency's most efficient examiners to take work beyond their production goals? Lastly, I'd like to know, Mr. Chairman, as an original cosponsor of the Telework Enhancement Act of 2010, I take a special interest in PTO's telework program, which many agencies have viewed as a model. I understand some of my colleagues may suggest that the IG's report indicates a problem with PTO's telework program. But the IG's analysis does not make a comparison between teleworkers and on-campus workers. However, NAPA's 2015 study of PTO's telework program found no difference in the performance or conduct between these two groups of employees. The benefits of telework are significant. PTO's telework program has saved the agency more than $7 million during government closures, and the agency avoided more than $38 million in rent in this last fiscal year alone. In addition, there's potential for traffic congestion relief--and as somebody who represents this area, we need it-- and widespread adoption of telework policies governmentwide. I want to thank the witnesses for being here today, and thank you for your indulgence in my being here a little bit late. Thank you, Mr. Chairman. Mr. Meadows. Thank you. The chair recognizes the gentleman from Ohio, Mr. Jordan, for a series of questions. Mr. Jordan. Thank you, Mr. Chairman. Dr. Chu, what does NAPA stand for again? Mr. Chu. The NAPA report was---- Mr. Meadows. Hit your red button there. Or make it red. Mr. Chu. My apologies. That report was based on work---- Mr. Jordan. What's the organization? What's the acronym stand for? Mr. Chu. I'm sorry? Mr. Jordan. What's the acronym stand for, NAPA? What's it-- -- Mr. Chu. Oh, National Academy of Public Administration. Mr. Jordan. National Academy of--okay. And you guys did a study that reaches a different conclusion than the IG's report. Is that right? Mr. Chu. Well, our study is for a period prior to the most recent IG report. Mr. Jordan. You reached a different conclusion, different-- different--your report---- Mr. Chu. I believe the IG testified that he did not think it was widespread, time and attendance abuse. That is also--was also our conclusion. We did not see it as a widespread issue. Mr. Jordan. Well, the USPTO cites it as showing that different conclusion than the IG's report. Is that fair? Mr. Chu. I think we're all agreed that the fraction of time that is believed to be abusive is small. A goal, as I think the chairman emphasized---- Mr. Jordan. Is your report different--is your report different than the IG's report? Mr. Chu. Excuse me? Mr. Jordan. Is your report different than the IG's report? Mr. Chu. Our report is different from the IG report in the following sense: we did not do the kind of analysis the IG undertook. What we sought to do was two things: First, look at the internal controls structure. That seemed basically sound. There were some small tune ups that came out of that process. Second, look at, how well does the program as a whole work? Yes, there have been abuses. Those were the product of earlier controversy that led to the NAPA report. There are anecdotes that we recommended. I'm delighted that the IG found that one of those anecdotes, the use of the presence indicator, has had some helpful effect. Mr. Jordan. All right. Thank you. Mr. Chu. You could go further in that direction, and we did so recommend. Mr. Jordan. Okay. Let me change the direction. What's the Elliot Richardson Prize? Mr. Chu. I'm sorry? Mr. Jordan. What's the Elliot Richardson Prize? Mr. Chu. It's a prize given by the academy for extraordinary public service to the United States. Mr. Jordan. Your academy. Right? NAPA? The one you just told me about. Right? Mr. Chu. Right. Mr. Jordan.Okay. And who was the recipient of last year's Elliot Richardson Prize. Mr. Chu. I don't remember who last year's recipient was. But I do remember it was Bob Gates a couple years before that. Mr. Jordan. What about the 2016? Who won the 2016 prize? Mr. Chu. I apologize. I don't recall. Mr. Jordan. Do you know what the criteria is that is used in selecting who's going to win this Elliot Richardson Prize? Mr. Chu. It is sustained excellence to the service of the United States, essentially. Mr. Jordan. Okay. And you don't know who won last this current year, 2016. Mr. Chu. I should remember, but I don't remember. Mr. Jordan. Are you on the board who selects that person? Mr. Chu. No. I do not select. Mr. Jordan. Okay. But you're here representing today NAPA. Right? Mr. Chu. I'm here as chair of the panel that did the United States Patent and Trademark Office review of the telework program. Mr. Jordan. Are you of--and you're part of NAPA, correct? Mr. Chu. I'm a fellow of NAPA. Right. Mr. Jordan. You're a fellow at NAPA, and they have this award, the Elliot Richardson Prize, and last year's winner--and you don't know who this year's winner of that prize was. Mr. Chu. I don't, sir. I'm terribly sorry. Mr. Jordan. Would it surprise you if it's the IRS Commissioner, John Koskinen? Would you be surprised that that's the guy who was selected for outstanding public achievement? Mr. Chu. I think that was--I think you're right, sir. I think they did select Mr. Koskinen. Mr. Jordan. Oh, you can remember now, right? So it was Mr. Koskinen. Mr. Chu. You refreshed my memory. Mr. Jordan. I refreshed your memory. Good. And I look at the criteria for that award and it says ``significantly advancing the public good.'' You all felt that John Koskinen significantly advanced the public good last year? Mr. Chu. That was the conclusion of the selection panel. I'm not part of that process. Mr. Jordan. Do you know who else might have been considered for last year--for this year's 2016 award? Who else may have been in the running for that? Mr. Chu. I don't, sir. Mr. Jordan. I'd be curious to see who was turned down, who was not given that award and Mr. Koskinen was selected over them. Do you understand, Dr. Chu, that Mr. Koskinen gave false statements to this very committee? Do you understand that happened? Mr. Chu. I know there's been considerable exchange between this committee and Mr. Koskinen, yes, sir. Mr. Jordan. Do you understand, when Mr. Koskinen was brought in as Commissioner of the IRS, that 422 backup tapes containing 24,000 emails were destroyed under his watch? Do you understand that fact? Or did the folks at NAPA understand that fact? I'd be curious to know. Mr. Chu. I know the public discussion between this committee---- Mr. Jordan. Do you know that he withheld information from Congress? After he learned in February, he waited 4 months before he told Congress about missing Lois Lerner emails. And you come in here and tell us your organization, which reaches different conclusions or slightly different conclusions than the inspector general, and last year, you gave the outstanding public achievement by--the achievement says significantly advancing the public good. You gave that award to John Koskinen? Mr. Chu. I didn't, sir. The---- Mr. Jordan. No, the organization. But you're representing NAPA, right? Mr. Chu. I'm a fellow of the organization. That's correct. I'm not part of the award process. I would point out---- Mr. Jordan. Do you know if John Koskinen was a contributor to NAPA? Do you know if he's given money to that organization? Mr. Chu. I don't know, sir. Mr. Jordan. Okay. Okay. All right. And you don't know who was passed over so that Mr. Koskinen could receive this outstanding public servant award last year. Mr. Chu. I'm sorry. What's this? Mr. Jordan. And you don't know who was passed over, who was not given the award, who was under consideration and not given the award so that Mr. Koskinen could---- Mr. Chu. Sir, no, I have no insight into the process. Mr. Jordan. All right. Mr. Chairman, I yield back. Mr. Meadows. The chair recognizes the gentleman from Virginia, Mr. Connolly. Mr. Connolly. Well, Mr. Chu, for a different point of view, congratulations on naming an honorable public servant, Mr. Koskinen, as your outstanding awardee last year. And no amount of innuendo or smear is going to tarnish his reputation. I've known him for a long time. And I consider him one of the most honorable public servants I've known in a long time. So I guess we're all entitled to our point of view. But I wanted you to know right away there is a different point of view. And congratulations. He deserves it. And I thank you for doing it. Mr. Smith, I'm looking at your report. And I want to be real clear. You found potential waste in roughly 1.6 percent of the time and attendance records you looked at. Is that correct? Mr. Smith. Yes, sir. That is correct. Mr. Connolly. You did not in fact document actual waste. And I'm not--I mean, it's out there potentially, but there's no dollars or cents to actual documented waste. Is that correct? Mr. Smith. Well, Mr. Connolly, as I was mentioning in my opening statement--you might have missed it--that we would be more than happy to interview these employees with POPA encouraging their employees to come be interviewed. The problem is we ran against the Computer Matching Act, which does not allow the combination of information from various computer databases to then proceed and contain any kind of disciplinary reaction. However, I would like to read for you a quote that was in one of the IP Watchdog newspapers or articles. It says: Some patent examiners have contended on IP Watchdog and attempted to explain their actions are innocent but have actually admitted to committing fraud. These patent examiners have explained that, because of their superior talents, they're capable of doing their work in a fraction of the time the office thinks it should take them to do the work. Multiple examiners have said here on IP Watchdog that if they are, for example, allocated 3 hours to do a task and can do it in 2 hours, then there's absolutely nothing wrong with them claiming all 3 hours on their timesheet. One examiner actually said that he or she is capable of doing work twice as fast, using an example where the office allocates 20 hours to complete a task, presumably an entire application, but the examiner's able to get it done in 10 hours. Of course, that examiner explained he's completely justified in claiming all 20 hours worked on his timesheet. So I have a confession here by at least one that they did fraudulently fill out their timesheet. Mr. Connolly. Well, are you contending, Mr. Smith, that that one so-called confession somehow characterizes widespread fraud within PTO? Mr. Smith. Sir, there is nowhere in our report that we use word ``widespread.'' And as I said in my opening---- Mr. Connolly. I'm asking you, sir, a question on what you just said. What conclusion are you drawing from one person, one interview? Mr. Smith. That was not one person. The author cited multiple people---- Mr. Connolly. Who admitted to fraud? Excuse me. Who admitted to fraud? Mr. Smith. Yes. Mr. Connolly. Multiple people? Mr. Smith. Multiple people. Mr. Connolly. What did you do with that? Did you refer it to legal authorities? Mr. Smith. As I mentioned, the Computer Matching Act does not allow us to go after these individuals. Now that the IP-- Empowerment Act has been passed that exempts us from the Computer Matching Act, we can now go forward under this. But for right now, our hands are tied unless the individuals want to come in voluntarily for an interview. Mr. Connolly. Well, I think one needs to be a little bit careful about drawing broad conclusions from particular incidents. None of us want to see timecard fraud. And in fact, if you uncover it, we want to see it pursued. But I am concerned that it comes to characterize an agency where it may or may not in fact be at all characteristic of normal practice. Mr. Smith. And, sir, I stated that twice in my opening statement. Mr. Connolly. Good. But you know how this works, Mr. Smith. That's not what the story will be. Mr. Smith. Sir, I can't control what people do with the facts we've reported. Mr. Connolly. No. No, I know. You have no responsibility for that. I've seen a lot of IGs take the same position as they do damage to the reputations of individuals and agencies. Mr. Slifer, do you want to comment on that, that people apparently in your organization admitted to fraud, according to Mr. Smith? Mr. Slifer. Well, thank you. I certainly can't comment on the anecdotal article in a blog that was just quoted as being evidence or admission of a particular examiner. Our examiners have a very difficult job. Our examiners have got scientific, engineering, advanced degrees and have a very difficult job to examine patent applications and understand prior art, legal arguments, and synthesize all of that data into an examination for---- Mr. Connolly. All right. All right. I got it. But you're sitting next to the acting deputy inspector general, who, through his words, is clearly making a statement about a practice, not widespread, but it's occurring, and it's fraud. That's the word he uses. I want you to respond to that. Is it in fact a big problem or a contained problem, but nonetheless a problem, from your point of view? Mr. Slifer. No. It's not a widespread problem. Mr. Connolly. I didn't say ``widespread.'' Mr. Smith corrected me properly. Their report doesn't say ``widespread,'' nor do I. I'm asking you, is it a contained problem? Is it something you're worried about? Is it something you recognize as in fact a practice that has to be addressed by these examiners who are specialized and doing difficult work? Mr. Slifer. The Patent Office takes---- Mr. Connolly. I can't hear you. Mr. Slifer. I'm sorry. The Patent Office takes any---- Mr. Connolly. I know. Yes, yes. I know; we all take it seriously. But I'm asking you to comment on what Mr. Smith said in his findings. Is that consistent with what you know about your agency? Mr. Slifer. It is not consistent---- Mr. Connolly. It is not consistent. Mr. Slifer. Yes. Mr. Connolly. Why is that? Mr. Slifer. Because I know that our examiners are working. I know, looking at their production requirements. I know, talking to our---- Mr. Connolly. Would you take issue with Mr. Smith that people, according to him, self-admitted fraud, timecard fraud? Mr. Slifer. If we had an examiner who self-admitted--that admitted to fraud, we're certainly going to---- Mr. Connolly. Well, he gave one example, but he claims there were more than one. Mr. Slifer. I'm not aware of any. Mr. Connolly. Thank you. Mr. Meadows. I thank the gentleman. The chair recognizes himself for a series of questions. Mr. Slifer, let me come to you, because I find this fascinating. You're saying that you do not have a problem, in spite of what the inspector general's report suggests, that you do not have a problem. That's your sworn testimony here today? Mr. Slifer. It is. Mr. Meadows. With 400--in at least 400 different cases, you don't have a problem? Mr. Slifer. The data that the inspector general looked at-- -- Mr. Meadows. That's not my question. You just testified that you do not have a problem. Is that your sworn testimony here today? Because I'm going to drill down on it if that's your sworn testimony. Mr. Slifer. It is. Mr. Meadows. So what you're suggesting, there is no time and abuse problems with regards to reporting? Mr. Slifer. I did not say there's no time and abuse problems. We have disciplined 30 people. Mr. Meadows. So how many people have you let go? Mr. Slifer. We have either---- Mr. Meadows. Because of this. Mr. Slifer. We're not---- Mr. Meadows. I know the answer. You go ahead. I mean, how many people have you let go because of this? Mr. Slifer. Because of the inspector general report? Mr. Meadows. Yes. Mr. Slifer. Zero. Mr. Meadows. Yes. That's the answer. Mr. Slifer. We're not allowed---- Mr. Meadows. So how are you taking it seriously? So what other kind of punishment have--here's my problem, is I go to Federal agencies, and I find that we have some of the greatest Federal workers, truly, in not only just in the public sector but in the private sector. And so you've got over 8,000 great employees, and you've got 400 or so who are taking advantage of the system and perhaps giving a bad report because--and actually giving a bad taste to teleworking, which I don't know that that is a hypothesis that I would support, because of the 400 that don't log in. Are you suggesting that it's okay to not log into their computer for 2 days and actually they're doing work? Because according to Mr. Smith, he said, even if they checked their email in a 2-day period, he'd give them the benefit of the doubt. So do you think that you can actually do your work without checking an email or actually going--do you think you can actually do that for 48 hours and actually be working, Mr. Slifer? Mr. Slifer. The nature of the examination process, yes, there can be. Mr. Meadows. For 2 days? Mr. Slifer. Yes. Is that the best practice? No. And we instituted a change---- Mr. Meadows. So have you implemented all the recommendations there that the IG---- Mr. Slifer. In the current report? Mr. Meadows. --recommended? Have you implemented all of those? Mr. Slifer. I'd be happy to walk through them with you, each one. Mr. Meadows. Just yes or no. Have you implemented all of them? Mr. Slifer. We have addressed each one, and we are close to implementing all of them. Mr. Meadows. When will you be done with implementing all of the recommendations? Mr. Slifer. There is a significant capital investment in some of the requirements. Our budget is not at this---- Mr. Meadows. So you're saying this is a cashflow problem. Mr. Slifer. I'm not saying it's a cashflow, but some are multimillion dollar investments. Mr. Meadows. Okay. Because I'm going to allow you a little bit of flexibility here. But let me tell you the trouble that I have with some of your testimony. I read the report. And what I find in the report is, is there is no logical conclusion that you could come to, other than someone is gaming the system. There is no explanation for it. And what I'm going to do is, in support of the 8,000 good employees that you have, I'm not going to let the 300 or 400 get by with it. Do you follow me? And neither should you. Are you going to hold everybody accountable to the same standard? Because what I saw was that you gave bonuses, significant bonuses, to some of the people that actually were perhaps the most troublesome in this report. Would you agree with that, that you gave them above-average performance review and bonuses? Mr. Slifer. Some of the individuals identified in the top by the inspector general did both receive bonuses and have---- Mr. Meadows. So what kind of message of giving a bonus and good reviews to someone who does not act the way that the other 8,000 would act, what kind of message does that send to the good employees? Mr. Slifer. Well, I would prefer to dig into the data and find out exactly why there's a difference between the digital-- -- Mr. Meadows. I would prefer that you dig into the data too, Mr. Slifer, but it doesn't look like you're digging into it. Mr. Slifer. Well, we have been for several months working on this. Mr. Meadows. But you've fired no one. And what other disciplinary actions have you had? Mr. Slifer. I'm not allowed to fire anybody as a result of this. Mr. Meadows. What other--we have already established that you fired no one. What other disciplinary actions have you had? Mr. Slifer. We have actually disciplined and terminated 30 of the individuals listed in the top 300. But that was done independent of the inspector general's report. Mr. Meadows. So you fired them for another reason. Mr. Slifer. No. We had fired them independent of the report. Our internal controls had already identified those individuals before the report was published. Mr. Meadows. So now you can't have it both ways, Mr. Slifer. Your testimony was that you didn't have a problem. And now you're saying that you do have a problem, that you got rid of 30 people. So which is it? Do you have a problem, or you don't have a problem? Mr. Slifer. Sir, 30 out of---- Mr. Meadows. Because 30 people may have a grievance that you fired them for no problem. Do you follow me? Mr. Slifer. I understand that any agency of our size will have individuals that need to be disciplined. And we have policies and procedures to address that. I don't believe that it is systemic, as identified by NAPA and agreed to---- Mr. Meadows. I'm saying it's systemic within 400-plus employees that the inspector general's report pointed out. I'm not saying the other 8,000. In fact, I give them great rewards for what they're doing. And if they're watching right now, let me just tell you, I'm telling them that I've got their back. I'm looking forward to whistleblowers telling me about other issues. And if they'll call, I promise you I will personally follow up on it because it's apparent that you're not willing to do that. Mr. Slifer. I disagree. The agency has taken substantial steps and continues. We don't take this lightly ourselves. But I will---- Mr. Meadows. Okay. You don't take it lightly. So help me reconcile the two parts of testimony. You don't take it lightly, but you don't have a problem. So which is it? Because you just in the last 6 minutes you said you don't have a problem and now you're saying you don't take it lightly. So which is it? Mr. Slifer. I believe my testimony is that we don't take it lightly, while we recognize that there's always going to be individuals in an agency of 13,000 who don't follow our rules, don't follow our procedures, that are going to require discipline. We take it seriously, and we discipline those individuals. Mr. Meadows. So you do have a problem. All right. I'll recognize the gentlewoman from the District of Columbia, Ms. Norton. Ms. Norton. Thank you, Mr. Chairman. This is an important hearing because, of course, abuse of time and attendance is always unacceptable, whatever the amount. The amount here seems low, but it's worthy of some oversight. I do have to say something about what the chairman indicated. He wondered whether or not anyone had been let go because of the IG report. Of course, you cannot be let go because of a report, even of an IG. Under civil service law, it's an accusation, and you'd have to go through the process for independent substantiation. That is the law so that, of course, we do have to understand when you can take action and when you cannot, and of course, you couldn't take it, whatever the outcome of this report. And I also have to say, Mr. Chairman, that I was amazed in the wake of the recent report not to impeach Mr. Koskinen, that that issue would be raised in an effort to relitigate it at this hearing. There has just been an overwhelming vote. There was a privilege resolution on the floor to impeach Mr. Koskinen based on the findings, I might add, of this committee and overwhelmingly voted to send it back to committee, to the Judiciary Committee, which, of course, kills it. You can't kill some things. They just refuse to die. And if I may say, for the record, if Mr. Koskinen was given a reward, it probably had to do with the fact that he has been called in time and again by Democratic and Republican Presidents to straighten out troubled agencies, just as he was summoned to straighten out the IRS. And I'm sorry I had to take some of my time for that. It seemed to me that those two issues deserved a response. What intrigued me about Mr. Smith's report was the number of those with the best annual ratings who had these time and attendance issues. I think 81 percent of the unsupported hours, if I have the record correct---- Mr. Smith. Forty-three percent of the hours, ma'am. Ms. Norton. Forty-three percent? Mr. Smith. Yes, ma'am. Ms. Norton. Thank you. Now, Mr. Smith, your testimony, your report says: The existence of highly rated examiners with large unsupported regular and overtime hours indicates that these examiners are likely exceeding their performance goals in less than the time allotted. I had staff get me your testimony, and they brought me your printed testimony. I appreciate it. And on page 3, because my first question was, when was the last time these performance goals were looked at? How timely is the data on which we are relying? And here I am quoting from your report on perhaps the most important recommendation: We recommended that the USPTO reevaluate its examiner production goals for each group of examiners and revise them to the extent necessary. And here's the operative sentence: Production goals were last set by art unit, as it is called, in 1976, and much has changed since then. I'm astonished. We're working off of goals that--when I wasn't even thinking of coming to Congress. Could this account for why so many of the highest performers--in fact, I must ask, what makes you a high performer? How are you even judged--who are high performers if 43 percent of the hours were from these high performers, how are they evaluated? Mr. Smith. I'd have to defer that to PTO, ma'am. It's a management issue. Mr. Slifer. I'd be happy to address that. While the time that is allocated for an examiner to spend examining an application based on either the technology or their seniority and experience hasn't been fully reviewed since the 1970s, we are undertaking that massive project right now. But the performance goals for each individual have been adjusted, and we have looked at it over the course of even the last couple of years to set those standards. And the GAO recently came out with a study that indicated that 70 percent of our employees don't have enough time to reach the production goals that they have. We understand that, on a bell curve of individuals, we'll have some that have the ability to understand the data, synthesize it, produce their work product faster than others. We still expect them to finish their full 80 hours. We expect them to put in all of their time, whether they've completed that or not. We even have an incentive program to incentivize them to produce additional work product for the agency to help us reduce our backlog in pendency, which I'm happy to say, over the course of the last 6 years, has dropped from over 700,000 cases to the 500,000 we have now. Ms. Norton. So are these performers moving on to take on additional work? Mr. Slifer. That is what---- Ms. Norton. These best annual performers---- Mr. Slifer. Yes. Ms. Norton. Who apparently have some of the poor ratings time and attendance ratings. Mr. Slifer. I want to be careful and I believe---- Mr. Meadows. The gentlewoman's time is expired, but please do answer the question. Mr. Slifer. The inspector general is looking at digital data, security data, security entering our building, security entering our IT, and looking at that to see if it provides a verification of an examiner's timecards that they filled out. Where there's a mismatch, there's a question because there's no way at that point to verify whether an examiner was or wasn't working. We have looked at that data and looked at other data in the agency, and I can say that, of some of those individuals that are highlighted, I can show that they worked Monday through Thursday, 10 hours a day but entered 8 hours a day on their timesheet, showing that they did not work on Friday, when, in fact, they worked the full 40 hours that week. So I know that the data is not 100 percent accurate as a verification of the veracity of the timesheet, and that's something that the agency is digging into so that we can make changes, not only reminding our employees of their requirements to abide by filling out the timesheet properly, putting in their full 80 hours, but narrowing up the gap between that data and their timesheet so that we can more accurately identify any areas in the agency where we do have time fraud, instead of losing it in a large analysis like this. Thank you. Mr. Meadows. I thank the gentlewoman. The chair recognizes the gentleman from Wisconsin, Mr. Grothman. Mr. Grothman. Sure. A couple questions for Mr. Smith. First of all, the information here says we have 415 patent examiners responsible for 93--or 43 percent of the unsupported hours. But I want you to talk a little bit about the methodology as to whether you think that's a hard number or what it takes to be considered, I guess, not showing up. If I come in and I stand there for 5 minutes and document that I'm there for 5 minutes a day and then I go out golfing for the day, how do you record that? Mr. Smith. We did not take an overly harsh look at the time records that were or the time periods that the employees actually claimed. If an employee swiped in and said they were there for 8 hours, then we gave them credit for 8 hours. If we were to take a more harsher view and go back and look at actual computer time spent, some type of activity on their computer, it would increase the number of unsupported hours for the on- campus employees by 327,000 unsupported hours. The PTO requires their employees to only swipe out between 10 p.m. And 5:30 a.m., so the employee could go in, swipe his badge, claim 8 hours, not even turn on his computer at all, not even do any work. He could be another examiner A. Mr. Grothman. So this just means that you were basically in the building, not working? Mr. Smith. Yes, that is correct. Mr. Grothman. And only in the building for 5 or 10 minutes. Mr. Smith. But yet I affirmatively charged 8 hours, saying I was working on my computer. Mr. Grothman. And even then, if you checked that, could they be hardworking at their computer playing video games or something? Mr. Smith. Potentially. Mr. Grothman. Okay. Wow, it's shocking, shocking, shocking, shocking. Well, I don't know. I guess it confirms what a lot of people think about the Washington, D.C., work ethic for some people. We'll give you a question here. Now, how many of these people have been prosecuted, even under your relatively low standards? I realize you have time constraints yourself. Under the relatively low standards that you're laying out here, how many have been prosecuted? Mr. Smith. We have presented these time and attendance cases to U.S. Attorney's Office in the past, and they have declined because they say they have to actually go hour by hour and prove that the employee was not physically working, and that's a bit of a burden for them, so they deadline all the T&A cases we present to them. So the answer to your question: none. Mr. Grothman. If I had to just put a dollar amount, say on when some of the guys or gals don't show up, you know, you'd have to know how many hours they're not showing up, assuming they're working when they're in, but how many hours they're not showing up and what their salary is. Can you guess on some of the most egregious cases over the last few years how much they're taking the government for? Mr. Smith. We found that examiner A was taking the government, on a conservative estimate, for $25,000 just in 2014 alone. And the total of these 415 individuals we figured was about $18 million just in pay and benefits. Mr. Grothman. Wow, I remember back home sometimes people would be caught stealing, some public officials, and they wound up going to prison for years. So how many of these that you mention of the golden 415 we have here, how many have been subject to administrative action? Mr. Smith. I would have to defer that to PTO, sir. Mr. Grothman. Okay. But nobody prosecuted. Why not? Can you tell us, are there any proposals out there that you're aware of floating through Congress that may do something to improve the environment a little bit? Mr. Smith. Yes, sir. As I mentioned earlier, we got word that both the House and the Senate have approved the IG Empowerment Act, which exempts the IGs from the Computer Matching Act so that if we were to do this exercise again, we would be able to turn that information over to the agency to take administrative discipline. Mr. Grothman. Do you have any reason why we wouldn't pass that bill? Mr. Smith. I don't currently see any reason. CIGI is in full support of that bill. However, I do understand there is a hold on that right now. Mr. Grothman. Okay--do we know who's putting the hold on it? Mr. Smith. I don't recall the person's name, sir. Mr. Grothman. Okay. We should talk about that a little bit and see who that is. Well, I have a little bit of time left, only a few seconds, and I know how much Chairman Meadows covets these seconds. So I yield them back to him. Mr. Meadows. I thank the gentleman from Wisconsin. The chair recognizes the gentleman from Georgia for 5 minutes. Mr. Hice. Thank you, Mr. Chairman. Ms. Schwartz, how long have you worked at the USPTO? Ms. Schwartz. Thirty-four years. Mr. Hice. Thirty-four years. That's a long time. Your current pay grade, you're GS-14, ballpark $150,000? Ms. Schwartz. Yes. Mr. Hice. Okay. It's my understanding that your particular area of expertise is as a patent examiner for chemical engineering patents. Is that correct? Ms. Schwartz. Yes. But for full disclosure, as president of the union, I have worked for the union for several years without patent examining. Mr. Hice. Okay. So how long have you been doing that? Ms. Schwartz. This is not going to be accurate. I'm going to say approximately 8 years. Mr. Hice. Approximately 8 years. So, as an individual to be looking after chemical engineering patents, you've not been doing that for 8 years? Ms. Schwartz. For approximately 8 years, yes. Mr. Hice. Okay. So you're on official time. Is that correct? Ms. Schwartz. Yes. Mr. Hice. So official time means you were hired to work with patents and chemical engineering patents, but instead of doing the job for which you were hired, you're doing union work. Is that correct? Ms. Schwartz. I'm doing union work. That's correct. Mr. Hice. Okay. But that's not what you were hired to do. You were hired as a chemical engineer patent examiner? Ms. Schwartz. Yes. Mr. Hice. Okay. So the American people are paying you to do something that you were not hired to do. Was anyone hired in your place to do the work that you're not doing? Ms. Schwartz. I can't tell---- Mr. Hice. Mr. Slifer, was anyone hired? Do you know? Mr. Slifer. I left private industry 2 years ago, so I can't speak to what happened 8 years ago. Mr. Hice. What's happening now? Has anyone been hired to do the job that Ms. Schwartz was hired to do that she's not doing? Mr. Slifer. I don't believe I can speak directly to that, but---- Mr. Hice. Do you know how many people are doing official time who were hired to work at the Patent Office but they're doing union work? Mr. Slifer. I do not, but I would be happy to---- Mr. Hice. Would it surprise you that there's 154 such individuals? Mr. Slifer. Again, I wasn't aware of how many. Mr. Hice. It would seem to me that being entrusted with the good faith of the American taxpayer, that you would have an understanding of how many people have been hired to do work that they're not doing. This just absolutely is astounding to me, Ms. Schwartz, that you are hired to work with folks seeking a patent, but you're not doing that. So the American people are subsidizing union work and paying you $150,000 to do union activity rather than to do the work you are hired to do. Ms. Schwartz. Congressman, a lot of the work I do is assisting the agency in implementing its---- Mr. Hice. But that is not what you were hired to do. You were not hired to do union work. Ms. Schwartz. I am assisting the agency in meeting its mission by assisting them in developing and implementing programs. For example, last year---- Mr. Hice. How many clients have you worked with in the last 8 years? Ms. Schwartz. I'm sorry? Mr. Hice. How many people who are seeking a chemical engineering patent have you worked with? Ms. Schwartz. None in the last 8 years. Mr. Hice. But that's what you were hired to do. So I'm really curious about your daily schedule. What do you do on a daily basis? Ms. Schwartz. On a daily basis, I deal with a number of different issues. Many of them are assisting the agency in developing and implementing programs to meet the mission of reducing pendency and increasing quality. Over the last year, my organization has reached many agreements to help the agency with its---- Mr. Hice. That's fine, Ms. Schwartz, and I'm glad your agency is doing it. I'm not attacking your union, nor am I attacking your union work. The problem I have is that you are using the time that the American taxpayer paid you to do as a patent examiner, and you're doing zero of that. You've done none of that in 8 years, and instead, you've been doing union work on the time that the taxpayers have asked you to be a patent examiner. You can do your union work, just not during this. I would like, I'm really curious about your daily schedule. I would like for you to provide this committee with a copy of your daily schedule, just your work hours--not interested in your personal time--but what you do from your clock-in official time for the last 6 months. Will you provide that for us? Ms. Schwartz. I will try to provide that. Mr. Hice. When can we expect to have that calendar? Ms. Schwartz. I can probably provide this--I'm going to have to--I can probably provide this in a reasonable time, but I can't assure that everything on this--I have a calendar that I keep. I can't assure that everything on it is accurate, and it won't have hour by hour because there are hours that are open that I have not written down every activity during those-- -- Mr. Hice. But everything that you have written down, I would like to have submitted to this committee for the last 6 months. Ms. Schwartz. I will do that. Mr. Hice. Thank you very much. And, Mr. Chairman, I yield back. Mr. Meadows. I thank the gentleman. And we are going to go into our second round of questioning at this point, and so we will recognize the gentleman from Ohio for 5 minutes. Mr. Jordan. Thank you, Mr. Chairman. It seems to me if you could summarize, Mr. Smith does his investigation and finds there are folks cheating the timecard, 415 of them to be exact, accounting for 43 percent of total unsupported hours. Mr. Slifer says that is not a problem because it wasn't everyone. And Ms. Schwartz agrees with him and cites the report done by Dr. Chu, a report that he co- authored and a report produced by an organization that this year gave its top public servant prize to a guy who was censured by this committee. Now if that's not a story line, I don't know what is. I mean, think about that. Think about that. Top public servant, they're citing as evidence that it's not a problem; cheating the timecard is not a problem. They're citing the NAPA report as evidence to support their claim it's not a problem, even though it was 43 percent of all unsupported hours, even though it was 415 individuals. They said an organization that gave an award to a guy who was censured by this very committee as support for their position. I just find this--if you wonder why people have had it with Washington, D.C., just look at that. Look at the fact pattern in front of us, Mr. Chairman. So I appreciate you having this hearing. One other question if I could for you, Dr. Chu. Are you a fellow at the organization at NAPA? Mr. Chu. Yes, I'm a fellow. Mr. Jordan. And who nominates people for consideration for the Eliot L. Richardson Prize? Mr. Chu. I don't know, sir. Mr. Jordan. It's my understanding that fellows nominate them, nominate those individuals who are considered by the organization to receive this prestigious award. You didn't nominate him? Mr. Chu. No, sir, I did not. Mr. Jordan. Do you know who did? Mr. Chu. I don't, sir. Mr. Jordan. Again, Mr. Chairman, I just find this remarkable. People cheating the timecard, 415 of them, almost half of all unsupported hours that accounts for. Mr. Slifer tells you in your round of questioning ``not a big deal because it wasn't everybody.'' And Ms. Schwartz says we're going to rely on this NAPA report co-authored by Dr. Chu, this report by an organization that gives its most prestigious award to a guy who's been censured by the very committee now looking at this issue. I think it's important that we had this hearing. I appreciate the chairman's indulgence. I yield back. Mr. Meadows. The chair recognizes the gentlewoman from the District of Columbia for 5 minutes. Ms. Norton. Thank you, Mr. Chairman. And one more clarification. When it comes to the use of official time by union representatives, like Ms. Schwartz, it's not a gift to the union. It's not a gift to the worker. If, in fact, these matters, which, of course, are recognized in our country, once there has been an election and a union has been certified and grievances are filed, if, in fact, these matters were not processed during official time, then they would have to be done, sir, during overtime, which would mean overtime to the government for all of those involved. So this is a carefully worked-out matter. Once you recognize that, in our country, there still is a right and certainly in Federal agencies to elect a union and to process grievances. I want to get further into the bottom of this matter involving--what is it?--43 percent of the hours from the best performers because that doesn't seem to belong together, that you found that the most unsupported work that the inspector general found was being claimed by what had otherwise been declared the most efficient workers. That just doesn't jibe. They don't fit together. And, of course, raises questions, I raised some of them about the way in which the Patent Office measures and rewards its workforce. Dr. Chu, do these highly efficient examiners have enough incentive, do you believe, to take on additional work beyond their productive goals? I'd ask that of Mr. Slifer as well? Are there enough incentives to take on additional work beyond their production goals? Mr. Chu. As Mr. Slifer has testified, the office does have a set of incentives to encourage staff members to produce more than is normal and uses those as a judgment for its award program. Ms. Norton. Mr. Slifer, what needs to be done about production incentives to encourage more output by patent examiners? Mr. Slifer. If I may, there's an interesting question to be asked when you look at the high performers that are on the list, and the first assumption is that they're not actually working. The other assumption can be that one reason those individuals are able to be such high producers is that they're putting in the extra effort. They're taking documents home. They're working on their--just like I take home a briefing book every weekend, individuals have different work habits, and they're putting in extra effort. Our incentive program that you're asking about has actually saved the agency over 1.1 million examiner hours a year. It's the equivalent of over 800 additional examiners that we would have to hire to meet the same production. So we do have incentives, and it is paying dividends for the agency without having to hire close to additional 1,500 additional examiners a year, and it provides us the flexibility when filing may drop, the revenue for the agency may, so that we can adjust our workforce without either having to hire more or fire more. So I am comfortable that our incentive program does incentivize those individuals who are capable of producing more work during their work hours to go ahead and produce more. Ms. Norton. So do you believe that your production goals, your production targets rather, and time and attendance requirements get the most work effort out of the patent examiners? Mr. Slifer. We work hard to optimize the balance between those, including the investment we are making over the last 2 years and improving quality at the agency. The quality of the time the examiners are spending, the incentives that we put in place to get them to work harder, not only in quantity but the quality and the timeliness of their work, are working in harmony, and we are always tweaking it and trying to find ways to improve it. The inspector general's report and recommendations are very informative for us in helping us focus on additional improvements in areas that he's highlighted. Ms. Norton. There seems to be some suggestion that the system in use discourages highly efficient and effective workers rather than incentivizes them. I'm trying to resolve this tension between time and attendance and production records so it doesn't look like we're punishing some of the most efficient members of our Federal workforce. Mr. Slifer. It is a concern of mine to jump to the conclusion that unsupported hours looking at digital data equates to work that wasn't done. That's why we're digging in as an agency and trying to answer the question of, why is there a mismatch between digital data and the certified time records? When we look at production records for these individuals, the quality and the quantity of what they're producing doesn't point to the same result, and we want to get to the bottom of this so that third parties that are looking at our certified time and questioning whether our employees are actually working when they say they are and producing what they say they are is accurate so that we can resolve the question of whether we have any systemic problems or whether we have individual issues that any agency would have with individuals. So we are digging deeper and continue to work on this and have taken the recommendations to heart and will work with that and the inspector general to make improvements going forward. Ms. Norton. Mr. Chairman, I do want to thank you, but I do want to indicate that the indication of a systemic problem comes from these figures showing the best performers have the worst data. That has to be explained. Contraindicated, not what you'd expect as you look at the Federal workforce, and I hope we can get to the bottom of that dilemma. Thank you very much, Mr. Chairman. Mr. Meadows. I thank the gentlewoman. And so the best performers, according to what matrix? Their supervisor? Mr. Slifer. It's not just their supervisors. We have multiple levels of review for the work products that examiners provide. We do do audits. We do do quality checks, so it's not simply---- Mr. Meadows. Okay. So here's I guess my--I was in the business world for a long time. If you did not change your goals and perspective since the 1970s, as my good friend from the District of Columbia mentioned, you've got a problem. Do you realize, in the 1970s, cutting-edge technology was a Texas Instrument little tiny computer that did nothing? Do you realize DOS was just being developed as an operating system? Do you realize that computers the way that we have it, we have got more computing power in my iPhone today than we had in a mainframe computer at that particular point, and yet you're saying your goals and objectives haven't changed since the 1970s? Do you not see a problem with that? Mr. Slifer. As an electrical engineer who grew up through that time period, understand, I want to try to clarify if given a moment. Mr. Meadows. You're an engineer? Mr. Slifer. I am. Mr. Meadows. I love engineers because they've always got a matrix. What performance matrix would an engineer put forth in terms of helping the gentlewoman and I figure out this whole problem of productivity? Is there a rule matrix there, or is it just some guess on who the best performers are? Do you have a real matrix? Mr. Slifer. There are matrix, and with regard to the production requirement that hasn't been adjusted, shall we say, since the 1970s, the question is, how much time does it take an examiner in a particular art, let's say pacemakers, to read an application provided by the applicant, understand the invention, study the claims, do a prior art search for that particular invention, understand the art from their search, and apply it, and apply the laws to determine whether an application should be changed? A lot has changed over this time, including the accessibility using computers, the efficiencies of that. Mr. Meadows. So we would assume that, because on those efficiencies, that we would have a greater output from the 1970s, wouldn't we? Mr. Slifer. The only flaw to that assumption would be that we also have billions of additional pieces of prior art that are now readily available, so the examiner now, while maybe more efficient in extracting that data, has much more data to-- -- Mr. Meadows. Okay. That is valid. I'll give you that one. So let me come back to you, Ms. Schwartz, to quote the Washington Post. And by the way, I want to give them a shout out because they've done some good work on this. I don't know that they're watching today, but to quote them: ``The Patent and Trademark Office has an unusually close relationship with its unions. Under its labor contracts, the agency does not require employees who work from home to log into their computers if they do telework full-time. It allows them to take up to 24 hours to respond to a call or email from their boss.'' It really only requires poor performers to give a work schedule. So you were mentioning how you spend 100 percent of your time helping the agency implement things to make it more efficient. Is that correct? Did I understand you correct? Ms. Schwartz. Not 100 percent of my time, but---- Mr. Meadows. But a lot of your time? Ms. Schwartz. A big portion of my time, yes. Mr. Meadows. So would you be willing to work with the agency on this strengthening of time and attendance requirements for its examiners? Ms. Schwartz. Yes. Mr. Meadows. So would you be willing to require all people to give their schedule to their supervisors? Ms. Schwartz. We would have to look at it terms of what the agency is asking for. Mr. Meadows. What do you mean? You're willing to give your schedule to us. Why would you not give a schedule--I can tell you that my scheduler knows almost every minute of where I am, and so do you not think that that would be a reasonable request, is to have the schedule given to their supervisors? Ms. Schwartz. It depends on what the requirements are for doing it. It's something we're willing to discuss and---- Mr. Meadows. It's not the question. What is it--you say it depends. Depends on what, on how you feel on that given day, or what does it depend on? Ms. Schwartz. We would like to look at what it is they're actually asking for with respect to their work. Mr. Meadows. Their work schedule. Is it a ridiculous request to ask a supervisor to have access to a work schedule for someone who works for them? Ms. Schwartz. Are we talking about a minute-by-minute schedule? Because then we have a concern that employees are going to have to spend a lot of time---- Mr. Meadows. I'm not asking them for a ``5-minute, I'm going to go get a cup of coffee.'' What I am saying is a real work schedule that they're accountable to that provides a good basis for where they are while they're working. Is that a reasonable request? Ms. Schwartz. It sounds like a reasonable request, yes. Mr. Meadows. Okay. So, since it's a reasonable request to you and me and since you're committed to making sure that the agency works well, is that something as the head of POPA, that you're willing to advocate on behalf, could that be an action item that we have coming out of this hearing that we're going to get the work schedules given to supervisors of all those people who do work? Ms. Schwartz. We're willing to work with the agency on what they ask. Mr. Meadows. Yes or no. Are you willing to do that or not? I mean, it's a pretty simple question. Ms. Schwartz. I would need to see the details of what we're being asked to---- Mr. Meadows. Okay. Well, let me give you some details. How about a work schedule, between 8 and 5, if that's when they work, or between 10 and 7, if that's when they work, and saying that they're working on this case for this many hours and this case for this many hours or a full case for the full-time and that they took an hour off for lunch and whatever the appropriate breaks. I mean, is there any kind of a schedule that they keep? Ms. Schwartz. Not the kind of schedule you're talking about where they need to provide which applications they're working on. Mr. Meadows. So they could give us a schedule that says I was not golfing? Is that what you're telling me? Ms. Schwartz. They could give a schedule of---- Mr. Meadows. The American people don't understand this, Ms. Schwartz. What they've seen is they've seen 400-plus people that an IG says has not actually accounted for their time according to computer and other logouts. We have got Mr. Slifer who says he's working on it, but he's not really sure what it is, and we have got you who says there's really not a problem, according to your written testimony and your oral testimony, and you're basing that on what? Ms. Schwartz. The IG report---- Mr. Meadows. I didn't ask about the IG. You're basing, your assumption based on what, that you don't have a problem? Ms. Schwartz. I didn't represent that we don't have a problem---- Mr. Meadows. So you do agree that we have some waste, fraud, and abuse with regards to time and attendance? Ms. Schwartz. There can always be improvements in time and attendance. Mr. Meadows. Do we have a problem with time and attendance reporting with some of your union employees? Yes or no? Ms. Schwartz. Are you asking if there are any employees for which there is an issue? Mr. Meadows. Sure. Let me give you a softball. Are there any employees that have a problem? Ms. Schwartz. I don't have personal knowledge of any right now, but we received proposals with evidence that---- Mr. Meadows. Ms. Schwartz, so let me be a little bit more direct. Is it true when we found examiner A with a problem, is it true that your organization encouraged them to retire so that they couldn't have any kind of backlash or, quote, ``mark'' on their record? Did you recommend that to examiner A, you or anybody within your organization? Ms. Schwartz. Examiner A came to us and after discussing the issue with examiner A, it seemed that there was going to be significant evidence, which there was in the OIG report, about examiner A. And according to the way government protocol works, we suggested if examiner A wanted to keep their OPF cleaner, that examiner A could resign. Mr. Meadows. So answer the question. Did you recommend to examiner A that they resign in order to make it look better on their record? Ms. Schwartz. On their OPF, yes. Mr. Meadows. Do you think the American people would have a problem with that? Ms. Schwartz. I'm not sure. This employee should not have been working for the agency so having the employee resign was appropriate. There's no doubt that there was wrongdoing and losing---- Mr. Meadows. Having them resign and face the consequences-- and not face the consequences is not appropriate, Ms. Schwartz. Because here's the whole thing is, you had them resign so that the IG or anybody else investigating it couldn't follow that because they had resigned. You know this. You know it well. Was that not the motivation? Ms. Schwartz. The motivation was--the decision was the employee's decision. We were---- Mr. Meadows. But you advised the employee. Ms. Schwartz. We advised the employee that their OPF would have less information in it if they resigned. Mr. Meadows. Mr. Slifer, is that something that you would recommend to the 30 people that you've taken action against? Mr. Slifer. From the agency's perspective, Chairman, we seek out to find the individuals that are taking advantage of their fellow employees and the agency and seek to discipline those individuals. Mr. Meadows. And you've disciplined, you said either terminated or disciplined 30 people. Is that correct? Mr. Slifer. That's correct. Mr. Meadows. And you will send to this committee a breakdown of who those 30 people are and what kind of disciplinary actions? Mr. Slifer. I'm not sure by law if I'm allowed to. If I am, I certainly will. Mr. Meadows. Well, we'll keep it confidential. And I can tell you from an oversight standpoint, here's what we need to see. So what you're saying is not based on an IG report, but based on your own internal investigation, you let 30 people go? Mr. Slifer. I'm not sure of the discipline for each of the 30. I know it ranges anywhere from the whole suite of discipline up to termination. Mr. Meadows. All right. So how many other people are under investigation out of the 400? Mr. Slifer. I'm not sure at this moment sitting here what the nature of---- Mr. Meadows. More than 10? Mr. Slifer. I can't speculate. I believe the inspector general and our internal investigation teams would have a better---- Mr. Meadows. All right. Will you get to this committee the number of people that are currently under investigation, internal investigation? Mr. Slifer. We will. Mr. Meadows. All right. So, Ms. Schwartz, do I have your sworn testimony here today that you will be supportive of efforts to discipline anyone who has taken advantage of the situation, because in my mind, it's the other 8,000 good employees that we're not being fair to. Are you willing to work in a way that actually promotes some kind of disciplinary action? Ms. Schwartz. I'm not sure what POPA can do to support disciplinary action. Mr. Meadows. So it's your sworn testimony here today that you think that anybody that is not performing properly or are falsifying records, that they shouldn't be punished? Ms. Schwartz. We believe if people are falsifying records and the agency has the evidence of that and takes action against them, that that's appropriate. Mr. Meadows. So you would support their termination if they were falsifying records? Ms. Schwartz. If that's what the agency proposed to do and it was the appropriate level of discipline. Mr. Meadows. You added the little caveat on the end of that, and that wasn't the question. If they falsified records, are you willing to support their termination? Ms. Schwartz. Are we talking about falsifying their time and attendance? I would need clarification on that. Mr. Meadows. So it's okay to falsify some records, just not time and attendance? Ms. Schwartz. It's not necessarily okay, but it's possible that you could falsify some records and the correct discipline level would not be termination. Mr. Meadows. Okay. Valid. So if they falsified time and attendance records, would you support their termination? Ms. Schwartz. Once again, if it was the appropriate level of discipline---- Mr. Meadows. If they falsified more than 8 hours, would you support their termination? Ms. Schwartz. I don't---- Mr. Meadows. Give me a number then, Ms. Schwartz. I'm not going to keep guessing. What is appropriate? Ms. Schwartz. I don't have information on the correct number here. Mr. Meadows. Well, you're the expert witness. Ms. Schwartz. Well, we would want to be following the factors that are normally considered in making a determination of the correct---- Mr. Meadows. I'm asking, from a union perspective, what would you support? Because I don't want to get sideways with you. Ms. Schwartz. I don't have the information here. I would have to go back and look. Mr. Meadows. So, within 30 days, can you get the information back to this committee? Ms. Schwartz. Yes. Mr. Meadows. Seeing that there is no further business before the committee, I want to thank each of our witnesses for being here today, and this subcommittee stands adjourned. [Whereupon, at 3:55 p.m., the subcommittee was adjourned.] APPENDIX ---------- Material Submitted for the Hearing Record [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [all]