NOMINATION-CIVIL AERONAUTICS BOARD

WEDNESDAY, OCTOBER 21, 1981

U.S. SENATE,

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION,

Washington, D.C.

The committee met at 9:41 a.m., in room 357, Russell Senate Office Building, Hon. Nancy Landon Kassebaum presiding.

OPENING STATEMENT BY SENATOR KASSEBAUM

Senator KASSEBAUM. We will go ahead and start the hearing although there will still be some coming in, including Congressman Lowery, and I believe Senator Cannon will be here.

I will go ahead with my introductory remarks and then introduce you, Senator Hayakawa.

It is a pleasure to have the hearing and to welcome you today, Mr. McKinnon.

Mr. MCKINNON. Thank you.

Senator KASSEBAUM. If confirmed, you will be taking the helm of the CAB at an important time in its history. Although you have been asked to oversee the demise of the Federal agency, your task will not be a simple one. As the Board's functions are eliminated or transferred, your role in smoothing this transition will be crucial, I believe, in the success which early sunset will hopefully accomplish.

As you know, while most agree that early sunset is a wise policy, there are serious concerns about how the process should be accomplished. Congress will be helpful in this effort by giving the Board and DOT clear mandates as to how various economic regulatory authorities are to be eleminated or transferred.

In my work with deregulation legislation of all types-trucking, rail, banking, and airline legislation-I have frequently perceived a desire on the part of the regulatory agencies implementing these changes to move beyond the mandates of Congress.

The early sunset bill, when it takes its final form, will undoubtedly result in compromises that may not please the more avid deregulators among us. Likewise, there will be those who say certain provisions move the legislation and the industry too quickly toward deregulation. But the point to remember is that these compromises strike the balance between regulation and free enterprise that Congress has decided is appropriate for national policy.

Your job and that of the rest of the Board should be to adhere to these congressional directions. The Board should implement the policy Congress sets, not the policy it believes Congress should set. These are challenging times for the airline industry. We will work closely with you to set appropriate policy to meet this chal

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lenge. We also will watch closely to see that that policy has been implemented.

Senator Hayakawa, it is a pleasure to welcome you. You may introduce Mr. McKinnon.

STATEMENT OF HON. S. I. HAYAKAWA, U.S. SENATOR FROM CALIFORNIA

Thank you, Madam Chairman.

Madam Chairman, I am pleased to appear before you today to introduce the Reagan Administration's nominee to be a member of the Civil Aeronautics Board, Mr. Clinton Dan McKinnon of my home State of California.

As I understand it, the President intends to designate Mr. McKinnon the Chairman upon confirmation.

Mr. McKinnon is currently the owner of two radio stations in California and two television stations in Texas. In addition, he owns a music publishing firm. A man of many talents. Aside from his business involvements, Mr. McKinnon has been very active in local public service projects, earning him numerous honors and awards.

After attending elementary and secondary schools in California Mr. McKinnon attended the University of Missouri, received a bachelor of arts degree in history, political science and economics.

In 1969 he attended the Harvard Graduate School of Business. Between his undergraduate and graduate work Mr. McKinnon served as a lieutenant in the Navy, piloting rescue helicopters. I understand he achieved a record for air/sea rescues during his

career.

Mr. McKinnon has had a long career in management and a great deal of experience in aviation matters. These qualities will, I am sure, assist him in directing the orderly sunset of the Civil Aeronautics Board.

Thank you, Madam Chairman.

Senator KASSEBAUM. Thank you very much.

It is also a pleasure to welcome two California Congressmen, Congressman Lowery and Congressman Hunter. Congressman Hunter, you were here first.

STATEMENT OF HON. DUNCAN HUNTER, U.S. REPRESENTATIVE FROM CALIFORNIA

Mr. HUNTER. Thank you very much, Madam Chairman.

It is a great pleasure to be here with Senator Hayakawa and Bill Lowery, my fellow San Diegan, in presenting Dan McKinnon this morning.

I have a brief statement for the committee that I would like to offer into the record.

I would like to direct my comments to several points that I think are pertinent. Dan has excellent credentials in managing people and business, and he has built one of the most successful and largest businesses in San Diego.

He is also in a business that is very heavily regulated. As you know, the communications industry is heavily regulated, and I think this has prepared him well for the regulatory environment that he is going to find in this job.

I also like the fact that Dan has extensive experience in aviation, especially from his military background. As Senator Hayakawa pointed out he saved 62 American lives in his career as a pilot. He has an extensive background in aviation, and yet with his business ties his background is independent of the aviation industry, which I think is important.

I would like to point out one other thing, speaking as a member of the House Armed Services Committee. Dan has regularly updated himself, and I know this personally, and kept himself fully briefed concerning our defense posture, and particularly our military airlift posture. This is important because of the proposals that have been made to complement our military airlift perhaps with some of our domestic airlift from the civilian sector. I think that is an area that is important for him to be expert in, and he is. He regularly briefs himself with our committee on the posture of our defense airlift.

I would like to conclude by saying that Dan has tremendous integrity. We respect him greatly. I am not experienced in the search of applicants for this type of a job, but I don't think you could possibly find a better applicant anywhere, and we heartily recommend his approval by this body.

Thank you.

[The statement follows:]

STATEMENT OF HON. DUNCAN HUNTER, U.S. REPRESENTATIVE FROM CALIFORNIA

Madame Chairman, I appreciate the opportunity to testify before the Committee today concerning the qualifications of Dan McKinnon to serve as chairman of the Civil Aeronautics Board.

The name McKinnon means much to San Diegans. Dan's father served in Congress nearly three decades ago, and the nominee has distinguished himself in service to the community for decades.

The Committee is aware, I'm sure, of Dan McKinnon's exemplary military record. Serving three years in the late 1950s in the Navy's Helicopter Utility Squadron in San Diego, McKinnon was responsible for the rescue of 62 American lives throughout the Pacific.

McKinnon's experience in aviation spans his entire life. However, it is a background characterized by independence from the aviation industry-a key consideration for those in this body who believe strongly in the separation of interests. Finally, I would like to offer a personal note about the nominee. In my years of knowing him, he has always impressed me as a man with an ability to understand and dissect complex issues. He is not one who dabbles in superfluous action. Dan McKinnon_will provide the kind of independent, reasonsed leadership that the Executive Branch needs in order to serve the public interest.

I heartily recommend the approval of this body for the nomination of Dan McKinnon. Thank you.

Senator KASSEBAUM. Thank you very much, Congressman Hunter.

STATEMENT OF HON. BILL LOWERY, U.S. REPRESENTATIVE FROM CALIFORNIA

Mr. LOWERY. Thank you, Senator.

It is indeed a pleasure for me to be here and introduce to the committee, Dan McKinnon, a constituent and good friend.

Senator Hayakawa and my colleague, Duncan Hunter, have outlined much of Dan's background by way of his resumé. Let me say that Dan is an outstanding leader in San Diego and has been for many, many years. We have worked together on a number of projects. One that immediately comes to my mind is Dan serving as

chairman of my city council election some years ago, and we have been adversaries a time or two, most notably in a primary election in 1980 for the Congress.

He is truly an individual that has the qualifications, the capabilities, and the background this administration is looking for, particularly in some difficult times ahead of phasing out an agency.

Dan has more licenses in the sky than most people I know, from flying gliders to helicopters to high performance military jet aircraft.

He is an excellent choice for the administration. I do hope this committee will recommend his nomination to the full Senate. Senator KASSEBAUM. Thank you very much. I appreciate both of you being here and adding to this hearing.

Mr. McKinnon.

STATEMENT OF CLINTON DAN MCKINNON

Mr. MCKINNON. I just wish I could leave now after all those kind words.

I have no statements, Senator Kassebaum. I am prepared to answer any questions you might have on my qualifications to serve on the Civil Aeronautics Board.

I do thank the Senator from my State, Senator Hayakawa, and my two fellow Congressmen, who are my representatives, one right in my district, and another has the adjacent district, for being here today.

Senator KASSEBAUM. We appreciate their being here too.

I promise you, with your aviation background, I won't ask you what you think of AWACS. You are probably the only one at this point who hasn't been asked officially.

Do you believe, Mr. McKinnon, that deregulation has progressed smoothly enough to allow the Board to accelerate on its own the pace of relinquishing regulation responsibility?

Mr. MCKINNON. Yes, Ma'am, I do. I believe it has. Because those functions which are going to phase out at sunset, it seems to me it would be wise to phase out gradually rather than when the lights go out at CAB. That would save a whole lot of adjustment that the industry would have to make all at once in sorting out those things at the actual time the CAB sunsets. So I think it is wise that they do phase out what can be prior to the actual closing date.

Senator KASSEBAUM. Have you had enough time to study the organization at CAB to give some thought to changes in staff that you would envision and how you would assume they would be absorbed or transferred to other areas?

Mr. MCKINNON. Yes, ma'am. You know, when you live in another part of the country you hear all the stories about Washington and bureaucrats and all types of stories. I have really been impressed with the caliber and the quality of the staff at the Civil Aeronautics Board.

From my personal viewpoint, I think it would be wise to have the best possible people in the job, and it looks like they have some very fine people down there, and I am not coming in to shake up the tree, so to speak, and bringing in a whole new group of people. We want to do the best job possible, and I think having the best people on the job is going to be the way to do it.

Senator KASSEBAUM. So you would envision retaining most of the staff?

Mr. MCKINNON. Right, without coming in with a lot of changes. Senator KASSEBAUM. Without substantial changes?

Mr. MCKINNON. Yes, ma'am. As far as transferring, it seems to me they have a very fine program oriented toward the gradual phaseout of the CAB and it is well organized and what is going to go over to the Department of Transportation is pretty well thought out. There are still some decisions to be made, but they have got a good line on it right now.

Senator KASSEBAUM. Last month, at the request of the President, the Board postponed implementation of the IATA, the International Air Transportation Association, show-cause proceeding. What are your views about this case, recognizing that you, obviously, have not had a lot of time perhaps to analyze it or are reluctant to discuss it at this time? But I believe it is a very important question regarding international aviation policy.

Mr. MCKINNON. I have not made any decisions on that. I have studied it. Like the issues that come before you in the Senate, it is a very complex issue and there are a lot of viewpoints on it. I know I will have to make a decision on it. When I get all the facts together I feel I will be in a position to make a decision on the show-cause order.

I generally do favor competition and believe that bilateral negotiations are perhaps the best way to solve international problems for our airlines and other countries' airlines.

Senator KASSEBAUM. Well, as sunset approaches, what role do you envision for international negotiations? How do you envision that being handled?

Mr. MCKINNON. Well, as I mentioned, I believe that bilateral negotiations are probably the best way to handle aviation problems between different countries and I would do everything I could to serve the interests of the United States.

Senator KASSEBAUM. On a country-by-country basis?

Mr. MCKINNON. Yes, ma' am. I think with multilateral negotiations it would be very difficult to get everybody to agree on the same issues at the same time.

Senator KASSEBAUM. Senator Cannon, do you have any questions you would like to ask?

Senator CANNON. Thank you very much, Madam Chairman.

Mr. McKinnon, in response to the committee's written questions asking you why you are qualified to be CAB Chairman you stated as your first reason, "I share the same philosophies as President Reagan." Therefore, one of my very important questions is, have you every believed or do you now believe that ketchup is a vegetable?

Mr. MCKINNON. I think I would have to study that, Senator. Senator CANNON. Well, you know the administration took that position with respect to the school lunches, although I understand they have changed it now. But I know that our airline food is already full of strange and mysterious ingredients and I thought we ought to know what your position is on that.

Do you believe that the decision in 1978 to deregulate the airlines was a correct decision?

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