Mr. ANDERSON. Concerns have been expressed $25,000 is much too high a penalty for individual pilots and mechanics. What was your position on changing H.R. 7488 to limit the increased penalty to companies?

Mr. ONSTAD. Mr. Chairman, I think our own history which we have supplied to staff members-we have a new compilation with us this morning-indicates we have asked for far less than the statutory maximum before. If we were to have a lower civil penalty for the general aviation pilot, combined with the potential criminal violations for the kind of individual such as we documented in our testimony today, who flew, hit a car on the ground, we grounded him. He flew again, hit a car on the ground; we grounded him. He flew again. For that kind of individual, if we had a lower civil penalty combined with criminal penalties, that would be an effective deterrent.

Mr. BOND. In effect, we are saying for the small operator, the large fine is probably not an appropriate tool. Our concern with the larger numbers is clearly for the larger violations and for the deeper pocket. It reflects our enforcement philosophy we applied which differs from general aviation folks to the air carrier people who are bigger.

Mr. SNYDER. Why didn't you draft the bill that way?

Mr. ONSTAD. Well, Mr. Chairman, Mr. Snyder, sometimes-as you go on-you refine your thinking. We made a mistake when we drafted it.

There are two approaches. There are two philosophies to this kind of situation. If you look at the EPA standards for automobile emissions or for the Clean Air Act, the Congress has routinely given the Justice Department the ability to deal with offenders at their discretion throughout the range of penalties. That is one approach to drafting the bill.

We were helped in our drafting of this bill by the Justice Department, which has approved this bill. It was that kind of approach that we used.

It is possible to take a second philosophical approach which is to more narrowly hone it and circumscribe the ability of the Justice Department and ourselves to deal with the problem. That is a judgment Congress has to make.

Either approach could be done. Assuming we have criminal penalties, we could erect an effective deterrent with this lesser civil penalty.

Mr. ANDERSON. The hazardous materials statute specified the following criteria to be considered in imposing civil penalties:

The nature, circumstances, extent, and gravity of the violation committed and with respect to the person found to have committed such a violation, the degree of culpability, any history of prior offenses, ability to pay, effect on ability to continue to do business, and such other matters as justice may require.

Do you think it would be desirable to include a similar provision in the provisions of the FAA penalties?

Mr. ONSTAD. On first reaction, Mr. Chairman, I don't have any objections. I would like to ask Jonathan whether he has any history of that.

I have not tried a case under the hazardous materials statute. I wonder if he has experience that would cause us to take a different position?

Mr. Howe. No. I think the hazardous materials statute has been administered much in the same manner as ours. I am not aware of any cases that have had protracted litigation yet.

The administration of penalties under that statute is still fairly recent. We have had good success, I might add, in collecting penalties under that statute.

As you are probably aware, almost invariably the defendants in those cases are corporations or institutional in nature. Those cases are rarely litigated.

I might add one thing: The type of language that appears in the statute is almost identical to the type of language we have incorporated into our recently issued new enforcement handbook which I believe the staff has copies of.

We think we are bound just as strongly by the provisions in this handbook and we certainly have, in the past, administered our civil penalty statute in exactly that manner, one of the most important considerations being the deterrent effect, and the ability to pay. We would certainly foresee no change in the administration of this proposed legislation.

Mr. ANDERSON. I have some other questions, but I will yield to my colleagues.

Mr. Snyder?

Mr. SNYDER. Thank you, Mr. Chairman.

Mr. Onstad, you have indicated to the chairman that you see some justification for a difference between the entire general aviation community and commercial operations. Have you, in your honing and fine-tuning of your thoughts on this, given any thought to ways which would enable you to differentiate between degrees of violations?

Mr. ONSTAD. Yes, sir.

Mr. SNYDER. Such as repeated offenders? I am thinking of your instance about the fellow who hit the automobiles, or violations involving reckless disregard for the life of others; things like that. Mr. ONSTAD. We really thought more along the lines of the type of certificate an individual has.

For example, we thought along the lines of exempting or providing lower civil penalties for pilots who do not hold commercial certificates. That may be an appropriate decrease.

Congress itself has differentiated under the Airline Deregulation Act between commercial service carrying passengers and freight, where you want the highest degree of safety, which by its own implications suggests there can be lesser degrees of safety throughout the rest of the system.

Perhaps the more appropriate way to handle this is to tie it to the kind of service or the kind of function which the individual is performing.

Mr. SNYDER. Are you in the process of giving us a revised draft of legislation that would incorporate your new thoughts now that you have fine-tuned your ideas?

Mr. ONSTAD. What I would hope we can do, sir, we have had extensive discussions with the staff over the last 2 weeks. I think

they have rightly pointed out the number of concerns which you have and which the chairman has. What we would like to do is have the opportunity to work with the staff a little more, to refine the bill, and perhaps come and present it to you, the chairman, and the rest of the members of the committee as a draft proposal. Mr. SNYDER. We would like to see what you have, or what you come up with as soon as possible. Any new thoughts, obviously, could be the subject of additional hearings and our time is getting short.

Mr. BOND. We are conscious of that. It takes time to clear everything through all the bureaucracy of the administration, any administration.

Mr. SNYDER. This one, more particularly.

You said that, Mr. Bond. I want you to understand that. We are going to get it down. We will be reading that in the coming months out loud.

Mr. BOND. I am speaking of all administrations. In any case, as part of the markup process, we would be happy to react to changes the committee might want to make as well.

Mr. SNYDER. Mr. Bond, you went at great length in your testimony to indicate that the commercial airlines probably were weighing the $1,000 potential maximum fine against the revenue generated on a particular flight.

In one instance I think it was a $1,000 fine vis-a-vis $8,600 or some such in revenue. Based upon that kind of example-you did it on the 747 where the revenue was more-you indicated that you felt like the thinking of the air carrier, and those making the decision, was that the fine was so small in comparison to the revenue that you generated that they decided to go ahead and fly the plane, even though they knew they had been caught already. Mr. BOND. They knew they had done something wrong. I am not sure in all cases they had been caught.

Mr. SNYDER. When we look at your example, bottom of page eight, top of page nine, about letting the people on who had imbibed a little too much of the juice from my State, you indicate there that it is just the PR, but if you carried that same rationale over, the price of the ticket they would lose versus the $1,000 fine if, in fact, the monetary consideration was the only thing, they wouldn't let those drunks on, would they?

You are talking probably about maybe a $100, $200 ticket versus a $1,000 fine, a 5-to-1 ratio which is about the same thing you say they would fly the $8,000 flight for.

Mr. BOND. I think our testimony here in part reflects the discussions we have had with the flight attendants' union which has told us that attempts to get drunk people off their airplanes are met with some resistance, in some cases by management who don't want to lose the revenue from that one ticket even.

Of course, there is hardly a ticket you can think of that is worth $1,000.

Mr. SNYDER. It looks to me like if you carry the same rationale over that they will be flying a flight they will make $8,000 on, and take $1,000 fine, they wouldn't take the $1,000 fine versus $100, $200 ticket.

Mr. BOND. That is right.

Mr. ONSTAD. Mr. Snyder, if I could, the man who handled those 10 cases is sitting behind me. That is Dan Peterson, who holds the certificate of United Airlines in his region. He is sitting in the room. We would be glad to let you discuss that with him.

Mr. SNYDER. We have a lot of questions. I will be more than pleased to ask unanimous consent that you be permitted to expand on that answer and include the other gentleman's remarks in the record.

Mr. ANDERSON. If there is no objection, so ordered.

[The information follows:]

FAA SUBMISSION

There are a variety of circumstances which may prompt an airline to permit an intoxicated person to board an aircraft, notwithstanding the fact that the revenue from an individual ticket would probably be less than a possible $1,000 fine. For one thing, the person who appears intoxicated may be accompanied by several other persons. Thus, by refusing boarding the airline may lose revenue from several tickets. We expect that more prevalent, though, is a mixture of public relations and economics. A person who is refused boarding by a particular airline may refuse to fly that airline again. Also, though a $1,000 fine is possible for permitting an intoxicated person to board, reality is that the FAA will probably not learn of that violation unless a disturbance is subsequently caused by that person. Therefore, an airline runs the risk of immediate and future revenue loss from refusing to board an intoxicated individual while incurring only the possibility of a fine by permitting the individual to board the aircraft.

Mr. SNYDER. Mr. Bond, I think the Chairman alluded to thisyou said:

It is apparent to anyone who looks at our past record of civil penalties that we have typically accepted less than the currently authorized maximum civil penalty. If you are not already maximizing the use of the law that you have, why do you need greater civil penalties?

Mr. BOND. We don't intend to ask in every case for the full amount of the $25,000. We intend to ask for it where it is appropriate.

The bulk of the cases are obviously going to be less than $25,000. Probably less than $1,000 in most cases. Where the problem is, it is not that we are constrained for asking for what is appropriate if it is less than $1,000. We are constrained from asking for more. That is the purpose of our bill. That is the thrust here.

Mr. SNYDER. Is it likely the imposition of criminal penalties will result in the drying up of information to the FAA because of the privilege of self-incrimination?

Mr. BOND. I most certainly think not. I have heard arguments put in various ways from our friends in the air carrier and other parts of the industry. That is if you penalize us, the good old record of cooperation-

Mr. SNYDER. I am not talking about cooperation. I am talking about the constitutional prohibition or protection, whatever you want to call it, against a person incriminating themselves. They would then be protected and you could not get them for not reporting because of the provision against self-incrimination.

I am talking about the criminal side.

Talk to your lawyer?

Mr. ONSTAD. Mr. Snyder, the standard is knowing and willful violations, so that to prove a knowing and willful violation, unless

the guy just 'fesses up, you have to have a third party source, if you will.

So in that instance you would have corroborating evidence of the knowing and willful.

For example, he talks to somebody else and he says, "I am going to do it anyway."

That is a normal, standard criminal prosecution type situation. Therefore, the information would be available to the FAA, sir. Mr. SNYDER. The third party who is privy to it?

Mr. ONSTAD. Yes, sir.

Mr. BOND. I can't tell you exactly what the Justice Department would say about something like that. I know what we would say. That is that confession is good for the soul. We are a new testament agency in most cases. We believe that people can be perfected and if they tell us what has gone wrong, then our tendency to impose heavy fines and other remedies is less than if they conceal it. We can quickly get to the bottom of it, promptly.

I think the chance of getting in trouble is less if they tell us, rather than more. In fact, our record supports that.

Mr. SNYDER. The only thing is, by law they are protected from incriminating themselves. The NTSB testimony we will hear later indicates it may—I say may, not will-hurt accident investigations. Mr. ONSTAD. I just don't see it in light of the knowing and willful provision of the statute we proposed.

Mr. HowE. I might add there is a specific legal mechanism available for that which we have used in the past which is also available to the NTSB.

As you know, under the Omnibus Crime Control Act, the Justice Department has the ability, and we have discussed this with them many times, to grant immunity from prosecution on a case by case basis in the event that there is a concern about the possibility of a fifth amendment problem.

The Attorney General can grant immunity to the individual from prosecution.

We can, therefore-if the needs of safety are particularly significant we can get that information notwithstanding the fifth amendment.

Mr. SNYDER. Are you going to give the Miranda warning?

Mr. HowE. No, sir, you would not have to. With the grant of immunity-

Mr. SNYDER. Without a grant of immunity? When a third party reveals it?

Mr. Howe. If the Miranda warning were appropriate, it would be given, I am sure.

Mr. SNYDER. Do you favor giving the NTSB administrative law judge increased flexibility by allowing him to decide, rather than the FAA, whether a violator should be given a civil penalty or have his certificate suspended?

Mr. ONSTAD. No, I don't think we do, sir.

Mr. SNYDER. Do you favor getting the NTSB involved in civil penalty cases just as they are in certificate actions because of their considerable expertise in aviation?

Mr. ONSTAD. Up to the $10,000 limit, we think they have the capability to handle it.