The Department of Commerce (DOC) is something of an odd mix of responsibilities. As its name indicates, DOC focuses on promoting American businesses both in the United States and overseas. The department also gathers economic and demographic data to measure the well-being of the economy, promotes US exports, enforces international trade agreements, regulates the export of sensitive goods and technologies and issues patents and trademarks. But then there are Commerce’s non-business duties, such as overseeing scientific data that helps forecast the weather and determine the health of the world’s oceans. Altogether, DOC maintains a fairly low profile in comparison to other cabinet-level departments, although that does not mean Commerce is above causing controversy, especially when it involves the census or the issuing of patents.
The Department of Commerce and Labor was created in 1903 at the direction of President Theodore Roosevelt. The combined missions of the new department didn’t last long, as officials in Washington soon realized the need to have a federal agency that was exclusively devoted to promoting American business. Roosevelt’s successor, President William Howard Taft, signed legislation in 1913 establishing a separate Department of Commerce and a Department of Labor.
President Taft left office before he could appoint the first Commerce secretary, so the duty fell to President Woodrow Wilson, who appointed manufacturing executive and politician William C. Redfield to lead Commerce. The new department consisted of the Lighthouse Service, Coast and Geodetic Survey, Steamboat Inspection Service, Census, Standards, Navigation, Fisheries, Foreign and Domestic Commerce and the Bureau of Corporations.
Since then, the Commerce Department has undergone numerous changes to its composition. For example, the Bureau of Public Roads and the Maritime Administration eventually were removed from the department, while new offices were added, including those that later evolved into the Federal Aviation Administration, the Federal Communications Commission and the Department of Transportation.
Other subsections that have been part of and continue to be part of Commerce include: the Bureau of Economic Analysis; Minority Business Development Agency; Economic Development Administration; International Trade Administration; and Bureau of Export Administration.
The Department of Commerce (DOC) focuses on promoting American business at home and abroad. The department gathers economic and demographic data to measure the health and vitality of the economy, promotes US exports, enforces international trade agreements and regulates the export of sensitive goods and technologies. Commerce also issues patents and trademarks, protects intellectual property, forecasts the weather, conducts oceanic and atmospheric research, provides stewardship over living marine resources, develops and applies technology, measurements and standards, formulates telecommunications and technology policy, fosters minority business development and promotes economic growth in distressed communities.
DOC Offices
Water and Air
National Oceanic and Atmospheric Administration
The NOAA is one of the Commerce Department’s key divisions. Through five major offices, NOAA provides scientific data for weather services, global warming research and fisheries management, among other duties. NOAA’s five subcomponents are as follows:
National Environmental Satellite, Data, and Information Service
NESDIS operates the nation’s system of weather satellites. NESDIS launches and controls satellites and collects data transmitted back to ground stations. It manages the processing, distribution and archiving of satellite data to make it available to researchers, planners, weather forecasters, the general public and others. NESDIS operates two types of satellite systems. One is a polar-orbiting environmental satellite (POES) and the other is a geostationary operational environmental satellite (GOES).
National Marine Fisheries Service
NMFS regulates commercial and recreational ocean fishing, managing marine life and their habitats in the waters three to 200 nautical miles from a US shore (an area known in maritime law as an “exclusive economic zone,” where countries have enhanced resource-exploitation rights). The agency attempts to promote the multi-billion-dollar fishing industry through sensible stewardship. This entails carefully balancing the competing interests of economics and conservation. Much of the agency’s energy is devoted to propping up dwindling catches due to pollution or overfishing. It also conducts research and coordinates conservation efforts with local authorities.
National Weather Service
The NWS provides weather, hydrologic and climate forecasts and warnings for the US, including its territories, adjacent waters and ocean areas. Data is gathered from a broad national infrastructure covering land, sea and air, including weather radar and satellites as well as from marine observation buoys and surface observation systems that assist the aviation industry. The agency collects, compiles and analyzes data, and generates outlooks, forecasts and warnings.
National Ocean Service
The NOS carries out three main activities related to navigation services, ocean resources conservation and assessment and ocean and coastal management. The office primarily collects environmental data and analyzes information about the world’s oceans. It also oversees the National Marine Sanctuary program and monitors coral reef sanctuaries. As part of its oceanic mission, NOS is responsible for overseeing the cleanup of oil and chemical spills in or near ocean waters.
Office of Oceanic and Atmospheric Research
OAR studies different aspects of the environment in an effort to understand, protect and predict climate variability, water resources and the world’s different ecosystems. The office’s three main research areas cover climate, bodies of water (i.e. oceans, great lakes) and weather and air quality. In 2007 OAR won the Nobel Peace Prize for its work with the Intergovernmental Panel on Climate Change and former Vice President Al Gore in distributing information about global warming. This work stood in contrast to the position of the Bush administration which has resisted the idea of global warming.
Numbers
Census Bureau
In addition to carrying out annual surveys, the Census Bureau conducts a decennial census (every 10 years). The census is used to determine the number of each state’s congressional representatives and electoral votes, as well as the allocation of federal tax dollars. Census data directly affect how more than $200 billion per year in federal and state funding is allocated to local, state and tribal governments. The data are vital to other planning decisions, such as emergency preparedness and disaster recovery.
Bureau of Economic Analysis
BEA is responsible for collecting data, conducting research and analysis and publishing statistics. The Census Bureau collects much of the raw data which the Bureau of Economic Analysis then interprets. The statistics produced by the BEA are used by government, business and the public to track the nation’s economic performance. The figures that the BEA is most known for are the Gross Domestic Product (GDP), the US economy’s ranking among other economies and trade balance. Many government agencies, businesses and individuals make decisions based on the figures the BEA publishes.
National Institute of Standards and Technology
NIST is charged with advancing measurement science, standards and technology for everything from nutrition to time and national security. The institute fuels US technological innovation and progress through research and development in four key areas of focus: biotechnology, nanotechnology, information technology and advanced manufacturing. Headquartered in Gaithersburg, Maryland, with laboratories in Boulder, Colorado, NIST is home to one of the world’s most accurate atomic clocks, which serves as the source of the nation’s official time.
Patents, Trademarks and Licenses
Patent and Trademark Office
PTO is responsible for processing patent and trademark applications. Patents are a type of constitutionally sanctioned property right granted to inventors for exclusive development and deployment of their discoveries. PTO has long been criticized for long waiting times, inefficiency and granting patents for unjustifiably ridiculous “inventions.” Although the office only grants patents and trademarks valid in the US, its issue of US-company patents for genetic modifications of biotechnology in foreign countries makes it susceptible to criticism of facilitating biopiracy and makes it part of a larger debate over international intellectual property.
Bureau of Industry and Security
BIS grants licenses for the export of sensitive goods and technologies while balancing commercial interests against those of national security. The bureau also enforces sanctions and embargoes, works with other countries on export controls, monitors the health of the domestic defense industry and promotes US trade interests abroad. BIS has a range of responsibilities relating to the interaction between industry and security. Since the Sept. 11 terrorist attacks, emphasis has been placed on restricting the export of technologies that could be used to create weapons of mass destruction.
Helping Business
National Telecommunications and Information Administration
NTIA advises the president and works with other Executive Branch agencies to develop the administration’s domestic and foreign telecommunications policy. The agency is responsible for managing federal use of radio frequencies that includes significant military and intelligence use. NTIA regulations and policies affect common technologies such as cell phones, the Internet, public radio and television, wireless technology and airplane travel. The agency both assigns frequencies to federal agencies and works with the Federal Communications Commission. NTIA also carries out telecommunications and engineering research, develops new technologies, resolves technical issues for the federal government and private sector and develops policy for the government communications satellite system. The agency administers grants in the telecommunications and information sector and promotes deregulated telecommunications policies abroad.
International Trade Association
ITA is responsible for promoting and protecting US industry interests in international trade through various research, policymaking and enforcement activities. ITA focuses on unfair trade practices and so-called “dumping” of goods, which leads to investigations by the association into whether merchandise is sold in the US at less than fair value. In the interest of US industry, the ITA imposes “countervailance” duties to offset the effects of subsidies granted to foreign manufacturers by their governments.
ITA also oversees the Iraq Investment and Reconstruction Task Force, which helps American companies participate in the economic rebuilding of Iraq. The task force and its web site serve as clearinghouses of information for US companies interested in Iraq. The task force works closely with other federal government agencies and international organizations to provide companies with the latest information on the commercial environment in Iraq and potential reconstruction business opportunities.
National Technical Information Service
The NTIS serves as a public clearinghouse for scientific and business information primarily acquired through government-funded research. According to the agency’s web site, the NTIS maintains some 3 million publications in more than 350 subject areas, with many documents created after 1997 available for download. It currently receives no appropriations from the federal government, covering expenses by charging fees for most products and services.
Helping the Poor and Minorities
Economic Development Administration
EDA provides grants to poor communities in order to create new employment and stimulate industry and commercial growth. Much of EDA assistance is aimed at rural and urban areas of the U.S that are experiencing high unemployment, low-income or other types of severe economic distress. EDA’s three key investment programs focus on expanding and upgrading physical infrastructure, designing strategies to diversify local economies and supporting research of leading economic development practices.
Minority Business Development Agency
MBDA funds minority resource and development centers throughout the country to assist entrepreneurs/business owners with business plans, marketing, management and technical assistance and financial planning. MBDA’s six regional offices dispense technical advice and information to a network of more than 100 local business development centers around the country, located in areas with the highest concentration of minority populations and the largest number of minority businesses. Ethnic groups designated eligible for MBDA assistance include Native Americans, Asian Americans, African Americans, Hispanics and Pacific Islanders.
The Department of Commerce spent more than $14 billion on private contractors from 2000 to 2008. The money was distributed among 37,053 contractors that provided many different kinds of goods and services. The Commerce Department’s biggest expenditure was on computer and telecommunications equipment ($1.3 billion).
The section of the department that spent the most on contractors was the National Oceanic and Atmospheric Administration ($5.7 billion), followed by the Patent and Trademark Office ($3.1 billion), the Bureau of the Census ($2.7 billion) and the National Institute of Standards and Technology ($1.4 billion).
The top 10 recipients of Commerce contracts included three of the country’s largest defense contractors (Lockheed Martin, Northrup Grumman and Raytheon):
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Reed Elsevier Group $712,425,050
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Harris Corporation $353,962,346
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Lockheed Martin $350,609,110
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Northrop Grumman $329,820,590
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IBM $284,531,712
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Raytheon $272,297,197
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Wyle Information Systems $247,101,213
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Veritas Capital Fund II $234,866,973
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Diversified Technology & Services of Virginia $221,146,298
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Noblis $206,311,248
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Examples of Commerce contracts
IBM was awarded a $120 million contract to help consumers make the transition from analog televisions to digital once TV broadcasters beginning transmitting digital signals in 2009. IBM will provide services for the Digital-to-Analog Converter Box Coupon Program through its business partners, Corporate Lodging Consultants, Epiq Systems and Ketchum. Services provided consist of consumer education; coupon distribution to consumers and retail store participation; and financial processing to reimburse retailers as well as maintain records to prevent waste, fraud and abuse.
Commerce Renews Internet Contract
The Commerce Department in 2006 renewed its contract with the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit that oversees key technical matters governing how computers communicate over the Internet. The decision effectively maintains the United States’ monopoly over key aspects of the Internet.
ICANN has been the source of controversy since its beginning in 1998. Many countries, Iran, Saudi Arabia, Brazil and members of the European Union have called for phasing out the Commerce Department’s oversight of Internet protocols in favor of some new system that would increase international input.
ICANN coordinates the root zone of the domain name system and allocates IP address spaces—functions that are crucial to the stability of the Internet. The new contract runs until 2011.
ICANN grew out of a clandestine meeting in Cambridge, MA, in 1998. Critics in the past have accused it of lacking transparency in its operations and moving sluggishly to approve new top-level domain names. More recently, Capitol Hill politicians and advocacy groups have criticized the organization for agreeing to what amounts to a perpetual contract with VeriSign to run the .com registry, which some say would result in unnecessary price hikes and a veritable monopoly.
Census Bureau Short on Cash
The Commerce Department and the Bush administration have come under severe criticism from lawmakers and others over their failure to prepare the government for the next census in 2010.
In 2007, the Census Bureau struggled to receive sufficient funding to prepare for 2010 because the administration failed to exempt it from a zero-increase budget plan for most federal offices. As a result, the bureau had to revise key aspects of its so-called “dress rehearsal” which was scheduled for 2008 and tests every detail of the census taking process. Tests of the bureau’s plans and procedures for counting people on military bases were at risk of being eliminated.
Furthermore, the Census Bureau reported to Congress that it had failed to develop a reliable hand-held computer system for census takers to use when counting Americans for the 2010 census. The technological failure came after nearly four years of work and almost $600 million in expenditures, and it meant the bureau would have to once again rely on a paper system to carry out the census.
And to top things off, Commerce Secretary Carlos Gutierrez told lawmakers that the agency would need up to an additional $232 million in funding to ramp up systems to accommodate the paper count, including new forms, instructions and training materials and redesigned management and logistical support. To cover the increase, Commerce proposed cutting other programs—including those that the White House tried to kill or reduce in 2008 but which were rescued by Congress. Those programs included the National Institute of Standards and Technology, marine sanctuaries, pollution control, Chesapeake Bay restoration, and economic development grants for Appalachia.
Can the Patent Office Set Its Own Rules?
After years of complaints regarding backlogged patent applications, cramped resources and alleged abuse of the system, the US Patent and Trademark Office (PTO) introduced a new set of rules to the patent application process. PTO claimed the rules would prevent abuse and allow for a more effective review process, while critics countered that the rules would unfairly inhibit innovators seeking patents. In August 2007 an inventor sued the agency, claiming that the agency’s proposed rules regarding continued applications (those re-filed after a rejection) would cause him to lose potential right to inventions that result from his original work. The case was later joined by pharmaceutical giant GlaxoSmithKline.
In October 2007 the US District Court for the Eastern District of Virginia ruled against the PTO and issued a preliminary injunction stopping the office from implementing its new rules. Then in late March 2008, the court threw out the PTO rules, saying the office had overstepped its authority. PTO leadership was still deciding whether to appeal the decision.
Pro-Rule Making
The PTO maintains that the proposed changes will prevent abuses of the system and help address the massive backlog (the agency reportedly received more than 467,000 applications in 2007, about 30% of which were continuations—ending in a backlog of about 760,000 applications). Legal scholars have argued that pharmaceutical companies take advantage of the system, submitting applications before drugs have been thoroughly researched in order to hold competitors at bay.
Anti-Rule Making
The patent process for the biotech industry is inherently different from others, according to industry proponents, because the discovery and development process require a different time frame. That is, drugs cannot be changed after an application is submitted, but information - as from clinical trials - may be added along the way to provide supporting evidence. Applications are usually approved based on lab data. For competitive reasons, the biotech industry will often submit applications before the completion of clinical trials, which “prove” the drug’s curative powers and ensure its approval. In the years it takes to complete most clinical trials, competitors can move in on the discovery. Unlimited claims and continuations have allowed drug companies to protect discoveries and secure patents for a wide range of clinical applications for the same drug.
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Founded: 1903
Annual Budget: $6.8 billion
Employees: 38,000
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Department of Commerce
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President Barack Obama’s third choice for Secretary of Commerce, Gary Locke was confirmed by the Senate on March 24, 2009. Locke is one of the Democratic Party’s biggest advocates for free trade—and someone whose political career appeared dead and buried following a rash of death threats and hate mail that came in response to Locke’s last appearance on the national stage.
Born on January 21, 1950, in Seattle, Locke is a third-generation Chinese-American. His great-grandfather came to America in the late 1800s, working in California, before returning to his family in China. His grandfather, Suey “Gim” Locke, arriving in the United States as a teenager at the turn of the century, took a job as a houseboy in Olympia, just blocks from the Washington State Capitol. The family he worked for taught him English in exchange for work, and he moved on to become head chef at Seattle’s Virginia Mason Hospital.
His father, James, raised in China, was the first to settle permanently in America, owning a restaurant in Seattle’s Pike Place Market and later, a corner grocery in the Queen Anne Hill neighborhood. A near-fatal shooting of his father in a stick-up later helped to prod Locke into public life.
Locke was the second of five children of James and Julie Locke, who was born in Hong Kong. While growing up, Locke spent his first five years in Seattle’s Yesler Terrace, a public housing project for families of World War II veterans that was the nation’s first racially integrated housing project. At home, the family spoke Taishanese, a sub-dialect of Cantonesee, and Locke did not learn to speak English until he entered kindergarten. He worked in his father’s grocery store and participated in the Boy Scouts and Eagle Scouts. He graduated with honors from Seattle’s Franklin High School in 1968.
Locke attended Yale University, which required him to hold several part-time jobs and receive financial aid and scholarships. He earned a bachelor’s degree in political science in 1972 and a law degree from the Boston University School of Law in 1975. At Boston, he met his first wife, Diane Wong. The couple divorced after four years.
After finishing college, Locke worked as a deputy prosecutor in King County, WA, until 1980. He then served as a legislative attorney and telephone company manager before winning a race in 1982 for a South Seattle district in Washington’s House of Representatives. During his tenure in the state legislature, he served on the House Judiciary and Appropriations Committees, including five years as chairman of Appropriations. Although he often played the role of the arch-partisan, delivering stinging attacks on Republicans, he was known less as a liberal and more as a technocrat. Critics complained that he could be a difficult and at times slippery negotiator. You can pass all the laws you want,” he once said, “but if you don’t have the money, the laws don’t mean squat.”
In 1993, Locke made history by becoming the first Chinese-American to be elected King County’s County Executive, defeating incumbent Tim Hill.
The following year, on October 15, 1994, Locke married his second wife, Mona Lee, a former television reporter for the NBC affiliate KING–TV in Seattle. The Lockes went on to have three children: Emily Nicole, Dylan James, and Madeline Lee.
In 1996, Locke won the Democratic primary and general election for governor, becoming the first Chinese-American governor in US history. In December 1997, Locke’s political committee was fined a maximum $2,500 by state regulators after it admitted breaking campaign finance laws during two out-of-state fundraisers in 1996.
Locke was briefly linked to a scandal over foreign contributions to President Bill Clinton’s 1996 presidential campaign. In July 1998, he gave a deposition to the House Committee on Government Reform and Oversight about his relationships with questioned Clinton donors. But the committee later said the deposition produced no evidence that Locke knowingly accepted illegal campaign donations. Locke denied any wrongdoing, and he subsequently returned some checks tied to people implicated in the fundraising scandal, including $750 from John Huang. The former Commerce Department official was the Democratic Party's chief fundraiser for the Asian-American population in the 1996 elections, and he became one of the central figures in the national Democratic Party fundraising scandal.
In March 1998, state investigators cleared Locke of wrongdoing following complaints that he unlawfully took $10,000 in campaign contributions from members of a Buddhist church.
Locke easily won re-election in 2000. But serving as governor got a lot tougher the following year, as Democrats criticized Locke for embracing the Republican Party’s no-new-taxes approach to dealing with Washington’s budget crisis in 2001. Among his spending cuts were layoffs for thousands of state employees, reductions in health coverage, freezes on most state employees’ pay, and funding cuts for nursing homes and programs for the developmentally disabled. In his final budget, Locke suspended two voter-passed, pro-school initiatives, while cutting state education funding. That same state budget, though, had record-high allocations for construction projects.
Locke’s tough fiscal policies almost resulted in a primary challenge by Democrats in 2004, but former state Supreme Court Justice Phil Talmadge ended his campaign early for health reasons.
Nationally, Locke’s moderate political portfolio won attention from Democrats in Washington, DC, who saw him as a rising star. He was chosen to give his party’s response to President George W. Bush’s 2003 State of the Union address—a move that resulted in death threats and hate mail being targeted at Locke and his family. That same year, a member of an extreme right-wing group was arrested for plotting to assassinate Locke.
Locke surprised many in his state when he announced in 2003 that he would not seek a third term as governor. Some analysts suspected the ugly response from his State of the Union rebuttal pushed Locke out of politics.
After leaving office, Locke became a partner in the Seattle office of international law firm Davis Wright Tremaine LLP, in their China and governmental-relations practice groups.
During the 2008 Democratic presidential primary, Locke was a supporter of Hillary Clinton, serving as co-chairman of her campaign in Washington.
Locke’s nomination for commerce secretary was not entirely embraced by those on the left. The Nation opined that “Locke has long been one of the Democratic Party’s most ardent advocates for free trade agreements that get high marks from multinational corporations but are condemned by human rights groups and labor, farm and environmental organizations.”
If confirmed as Secretary of Commerce, Locke would become the first Chinese-American to hold the post, and the third Asian-American in Obama’s cabinet, joining Energy Secretary Steven Chu and Veteran Affairs Secretary Eric Shinseki.
Locke’s affiliations and memberships include serving as chair of the Democratic Governors Association (2003), a board member of Digital Learning Commons (2003–present), the Fred Hutchinson Cancer Research Center (2005–present), Key Technology Inc. (2008–present), Safeco, Inc. (2005–present), Seattle Art Museum (2006–present), and a member of Committee of 100, a group of prominent Chinese-Americans who promote links between the United States and “greater China,” which includes China, Taiwan and Hong Kong.
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