Koskinen's Jan. 3 5:00PM Press briefing I believe that overall, Kokinen has done a better job of getting factual information out than anyone else in the government, and in my opinion he has done an excellent job the last couple of months.

There is a lot of good factual information in this briefing.

------------ President's Council on Year 2000 Conversion John Koskinen, Assistant to the President and Chair January 3, 2000 5:00 p.m.

JOHN KOSKINEN: Good afternoon. This is the announced 5:00 briefing. We will keep it brief since I know that many of you need to file, and we need to try to bring this to a close.

Subject. as I've said all along, to the normal glitches that are both a part of every day life and that we think may continue to be seen both here and abroad, I think in light of the fact that we have no information since 12:00 of any noticeable problems anywhere in the operation of financial systems, banking systems, or retail and commercial systems in the United States that we can safely say that was has been referred to as the Y2K bug has been squashed with regard to the key infrastructure systems in the United States.

We are likely to see glitches pop up here and there in the coming days and weeks, but I think they will be localized and transitory and will not pose a threat to the nation's economy. I appreciate that all of you, in many ways, have been prisoners with us here for the last four or five days. And so while we have a little more information to report I would like to announce that we are ready to release the inmates, declare victory, and while we will monitor, move on.

We have been surveying through the day a wide range of organizations to determine whether there have been any trends or systems we should be aware of. As you may remember from our earlier discussions, I have for the last year and a half had a monthly conference call with the state Y2K Coordinators across the United States in addition to the three state summits that we have had.

So at 3:00 this afternoon I spoke with 36 state government Y2K Coordinators. Of them -- we went through state-by-state  18 of the states reported that not only had they not discovered any major problems; they had no even minor glitches to report. On the other hand, the other 18 states, while also reporting they had no major system problems or any disruptions in services to report, they like the other 18 states had tested their systems this weekend and had reported a wide range of minor Y2K problems had been discovered, reviewed, repaired, corrected and the systems are now operating on a regular basis.

Minor glitches covered a wide range of issues. Several included things like licensing processes, motor vehicle division problems either in issuing renewal licenses or conducting driver's license testing. There were cosmetic date problems, printing out the wrong dates for functions. There were in couple cases off-the-shelf software problems that were being repaired by vendor patches. In one case the latest vendor patch had not been installed so the system did not function, but they obtained the latest patch and it was able to function.

And we may finally been able to find our control group. In one state, three non-mission critical systems not vital to any state operations but related to correspondence and message tracking were known to be non-Y2K compliant last fall and were replaced with alternate systems. The CIO left those systems on in operation. All three of the systems failed following the Y2K rollover and could not be used. But nonetheless I would stress that they were non-mission critical and the state had planned to replace them, which they did before the rollover. But they in fact had left them running to see what would happen and what happened was that they became unusable.

I also had a conference call this afternoon with our Senior Advisors Group, which was and is a set of senior executives who had not only their own organizations but major national associations like the Air Transport Association, the Association of Ports, the oil industry, etc. And we asked them the same thing in terms of their operations today. Had their individual operations or their individual associations or industries any noticeable problems large or small? And all we found there  again in a candid conversation  was that Ron Nubar, the chair of the International Association of Chiefs of Police, reported that in addition to his work as the head of the International Association of Chiefs of Police the only problem reported in his area was his own police department, which experienced a glitch in their computerized dispatch system. It didn't affect the operation of the system, but it pulled cases dated 1999 and not the 2000 ones when it was actually looking for information. They found that, they fixed it, and it is now moving forward.

Jim Bruele, chairman of the Airports Council International, noted that on January 1st a telephone system in his offices at his offices at the Birmingham Airport showed the date as December 32nd. It didn't affect their operations and was one of those things that he could catch. The rest of the systems worked well.

Tom Brown of the Air Transport Association reported that he had what I have and a lot of other people have, which are these wonderful little countdown clocks that people had been giving away as souvenirs. And at midnight the date on the clock rolled from 1999 to 1990. And that was the best they could do.

And I mention these not to regale you with minor glitches but to note that these are major organizations and people representing systems that have spent hundreds of millions of dollars in many cases and they have tested over the weekend and have worked hard to make their systems function. And as noted in the state case, where 18 of the states did find minor glitches. But those were minor glitches after the expenditure of a lot of money to make sure they had no major glitches. And the minor glitches were all fixed.

We have asked the Small Business Administration (SBA) who has been surveying small businesses, again, we had a relatively small sample, but they have had a handful of cases. One small trucking firm that could not access any of its accounting information. And in order to be Y2K-compliant it needed an upgraded software package. The computer being used is too old to absorb the package so there is a need for new piece of hardware. So the SBA is working with that person to see whether or not the company qualifies for the SBA loan program, which was passed by Congress and which the SBA stresses is available to small businesses who have Y2K glitches and need loans like this trucking company to deal with them.

The Education Department has tested all of its systems. Its loan systems are up and operating. It has tested those and checked them with a number of major universities and there were no glitches or problems found at all.

Surveys have been done on a random basis of school districts and colleges to see if there are any difficulties. No difficulties have been reported. The systems are reported up and running, although we are not in those surveys searching for the same kind of anecdotal information we've been collecting from states and others.

The Postal Service is up and running. As reported, there have been no operational problems. A small number of automated retail scales displayed the January 1, 2000 date when they started this morning on January 3rd. The date is easily corrected. It doesn't affect the operation of the equipment, but in a few cases people are going to have receipts that say January 1, 2000 rather than January 3, 2000, although otherwise services won't be affected.

In transportation, a cargo discharge-monitoring computer at a West Coast port went offline when activated yesterday on January 2nd to transfer cargo. A computer support team got the system back on line in two hours and it is now operating normally. We are still investigating whether that was Y2K-related or not, although we have had no other reports in other ports and there was no impact on services there.

HUD in terms of reviewing its systems, including the Federal Housing Administration, has found that there are two minor problems. And there is a third system, the Single Family Insurance System, which experienced a Y2K error that prevented users from terminating FHA mortgages. The system has been repaired, re-tested, and released to production, but while it was in difficulty you could not electronically terminate one of the FHA mortgages. As you know, there are thousands of those extant.

In the food supply area, we have no glitches. The U.S. Department of Agriculture's marketing service reports that operations in the major commodity markets -- and we've talked about financial markets but we monitor the commodity markets for beef, cotton, dairy and other products  are reopened and are operating normally. The ports handling agricultural commodities were closed over the holiday but they have opened subsequently and are reporting normal movement of products and no transportation problems in those ports.

So, again, subject to any significant developments, our present plan is to continue our 24-hour monitoring through tonight with a reduced presence on the night shift tonight. Tomorrow and through the rest of the week we will operate day shifts only. We will maintain a core group of staff at the Information Coordination Center through the end of the month to monitor any issues that arise in a mode that will receive reports only on an exception basis. And again we expect that there will be exceptions, but we do not expect that they will accumulate in such a way as to be an issue of national impact or importance, but we do feel it is important to monitor those and receive those reports.

In terms of future briefings from the ICC, we will advise you if we determine if those are appropriate. We do not intend to brief tomorrow, so this is the last in this series of briefings we started when we opened the ICC. We may hold a briefing at the end of this week or the beginning of next week to provide you with an update of how things have gone if there are any new developments. We will not do that just simply to tell you that nothing new of any significance has happened. But as we accumulate these reports from around the world and by Friday or Monday if there is enough that gives us some indication of ongoing issues that need to be addressed we will provide those to you.

So let me conclude by noting that thousands of people have worked obviously countless hours here and around the world on the Y2K issue. They spent many nights and weekends in dedicated efforts to protect the nation's infrastructure. And while our job is not entirely done, I think we all owe them a debt of gratitude.

I would like to particularly recognize and thank all of those in the federal government and in the agencies who worked hard to ensure that the systems met what was viewed as an insurmountable task. And I would remind you that any number of people, in fact most people, concluded 18 months ago that the government would never meet that task. We would never be where we are today up and operating with no interference with any service that the American public relies upon. We've had 400 volunteers working around the clock here in the Information Coordination Center. They did that voluntarily, gave up the weekend as you all have and performed I think a terrific service.

I never understood as I used to watch as we all do sports events  Super Bowls and the rest of that  when at the end they scrolled down and list all the technical support I thought "Well that's nice but why do they do that?" But those of you who shared this briefing center with us understand the importance of what has been a glitch-free performance here in the Coordination Center.

So, to say thanks, the ICC has been established, designed and run by General Peter Kind, a retired General of the Army. The media center here has been directed by Brian Kilgallen. Our Director of Communication as all of you know is Jack Gribben. My Deputy Janet Abrams has briefed with you before. The briefing room studio staff has been headed by Lieutenant Commander-Select Bill Travis of the U.S. Coast Guard. The technical consultant has been Steve Coon. And there are a number of engineers, cameramen, audio and video switching people who have provided flawless service. In particular, our graphics work has been done by Petty Officer Chris Rose of the U.S. Coast Guard and I mention him because these are his graphics. We spent a lot of time thinking about what ought to be done and we're delighted that a Petty Officer in the Coast Guard came up with what has been, we think ,a wonderful conclusion.

So as I say we view this, not only in the federal government, not only in the state and local governments but the private sector around the world, as a great accomplishment, meeting what I continue to believe is the most significant management challenge the world has faced in 50 years. The fact that we met it well and that it has appeared to be to those looking at it from the outside relatively easy does not detract from the magnitude and should not detract from the magnitude of their effort.

We thank all of them for the work that they have done and for the continual monitoring that they will do and for the repairs quickly and efficiently they will make to fix the glitches that will inevitably appear. And I thank all of you for spending this time with us and being as patient as you have been as we have jointly monitored the movement of the world into the millennium.

And with that, I'd be happy to take a few questions, recognizing that I know you have time limits.

QUESTION: Friday I remember you talking about degradation of services over time. And this was a concern for you nationally but even more so internationally. Which leads me to ask is that less of a concern now? Are you being somewhat premature in scaling back your operations this early?

KOSKINEN: It has never been a concern for us nationally. We have felt that the quality and depth of the work and the infrastructure in the United States and our ability to catch either minor or even more significant glitches early in the monitoring and operational systems in the infrastructure here meant that we did not expect any degradation of service and have not seen any here. We think that to the extent that this is a risk it is a risk in developing countries.

To the extent that we are now into January 3rd here, moving into January 4th in the rest of the world, without any apparent -- and I say apparent because again we are not getting detailed reports  degradation of service gives us increased confidence that those systems may not have any serious problems.

But again our reason for beginning to scale back here is that it is clear that the developed countries of the world  our major economic partners  have done very well. There are no indications of any problems yet that would rise to a level that would have a potentially adverse impact on the American economy, the American public, or the basic national security interests or other interests of the United States.

So we have all along maintained that that was our expectation in all of our reports in the last six months. And we've noted that if there were risks they would be in developing countries. We've also noted upon fairly detailed analysis that, even if those risks now appear in several of the smaller developing countries, the reason we are not concerned about that from the standpoint of the U.S. economy is that they do not have the potential of affecting or even making a noticeable impact on the economy. Because again we trade primarily with the large developed countries that are no longer at risk we feel.

So at this juncture we will be continuing to monitor on a daily basis for the rest of this week with the ICC up and operating in a full mode in terms of being able to receive reports. And we will receive and accept reports thereafter. But again we're now at a point where if there is in a particular country  whether it be in Africa, Asia, the newly independent states  where they have a serious problem this is not a response mechanism.

The ICC has been an information collection mechanism focused on dealing as we have with information from around the world, around the country, around all of the government. To the extent there is now a serious problem in any particular area, the normal government agencies that deal with that at the federal level will respond and handle it. So that we are moving out of risk that we would have multiple issues going on at one time where the coordination of the information and the coordination of potential federal response was critical.

As I say we've stopped today the teleconferencing, secured video networking with the major federal agencies  Defense, State, us, intelligence agencies, Energy and others  who might have had to deploy resources and make decisions about how to respond. Because there have not been multiple  in fact there have not been any  requests for assistance. To the extent that there may be some in the future, they will come in the normal paths, whether it's through the State Department or the Defense Department or others, and they will be responded to and handled by those agencies. So at this juncture there is not a need past the end of this week for the Information Coordination Center in terms of being here on an around-the-clock basis or even on a fully staffed basis. Until the end of February where we will monitor for that rollover period to see whether there are suddenly any new issues there. Again I would stress that we do not expect that, but again I would stress that no one can guarantee that.

QUESTION: Have you heard anything from banks? Are they getting ready to send back the cash that they had on hand, the extra money?

KOSKINEN: My understanding is that in some cases that cash is being transferred back, because there has been no unusual demand for the cash. But that is a logistical issue that the Federal Reserve Board and others will handle. All of it won't move at the same time. Some of it as I say may stay in place and simply be drawn upon, as cash would normally be distributed in those areas. But where there are large holdings of it that won't be needed in the short-term it will probably then be returned. But I don't what the schedule is. That is really the Federal Reserve Board's responsibility.

QUESTION: Can you tell us what state it was that didn't update its three non-critical systems and maybe what kind of systems they were?

KOSKINEN: The systems were an appointment system, a mail monitoring, correspondence-monitoring system, and I don't know what the third was. And I told the states since they were non-mission critical and they had already replaced them that I wouldn't send the entire national press down to the governor's office saying "How did those systems go?" But it was interesting and they did it really not for the benefit of all of us but because they thought it would be interesting to see what happened with those systems. And what was striking to them was the systems simply stopped and become unusable. Now they were not mission-critical, but they had replaced them anyway. But they were an interesting example of what happens with systems that have failures. And we've talked about a number of systems here and they've been remediated, but they were in some cases systems that caused important systems not to function even if only for a few minutes.

QUESTION: So they had replacement systems in place before the rollover date?

KOSKINEN: Yes, before the rollover. These were the last systems they worried about. They decided that they were older systems. They didn't want to upgrade them in the sense of putting patches in. They basically decided they would replace those systems. But they decided that since they were there they would see what happened because they were replacing them late in the year. I hadn't known they had done that, but when we went through the list of states looking for any issues that they had, serious or otherwise, they said that they had actually run these systems and were struck by the fact that they actually did just stop and were unable to operate.

QUESTION: There are 400 people now here. You say you will be decreasing the staff down to 200?

KOSKINEN: There are 400, 200 in each 12-hour shift. So we're now downsizing. The night shift will have a smaller staff tonight. I'm not sure, but it will probably be in the range of 80-100 tonight and this will be the last night we have a night shift. Tomorrow we will have the full 200 people on the day shift, maybe a little less than that  maybe 160  on the day shift from 9:00-5:00. And then on Wednesday, Thursday and Friday, that number will shrink to a smaller number, probably in the range of 100-120 for the rest of this week. But then thereafter we'll draw the system down to a core staff of about 30, the people who basically designed and have been operating the system when we were not in this monitoring mode. And that group of 30 will be here to run and maintain the system, receive exception reports and manage the gear-up again then on February 28th.

Well again I thank you all for your patience. And I've been delighted to watch with you what as I say again has been a wonderful success. Good night.

End

-- FactFinder (FactFinder@bzn.com), January 04, 2000

Answers

On the other hand, things could really start getting busy around there, but for me the ICC was a PR front, to put a happy face on the whole event. The real bunker is probably up on Mount Weather, VA. I don't think they can juggle any more balls and figure that they managed to keep up the ruse for three days, now send everyone home, declaring victory. Personally, I think things are just starting to warm up, and they want the press out of the way. We'll have a briefing if we need too.

-- let's be frank (candor@mindspring.com), January 04, 2000.

yep kosherkin is the man of the hour....wanna bet he is not in some nice little tropical island a few days or weeks from now....immune from lawsuits and igcognito?

-- Kyle (midtnbuddy@aol.com), January 04, 2000.

Fact (Is it OK to use your first name?),

I agree. Koskinen has been ridiculed, insulted, denigrated and inpugned for no reason except that he represents the "gubmint." Yet he has continued to provide consistent, and as far as I can determine, absolutely correct information.

I listened in on the state Y2K conference call yesterday. We're one of the states reporting glitches, although minor ones at this point. It's important to note that none of the state Y2K coordinators thinks we're out of the woods yet. We're still testing systems, and only beginning to do weekly, monthly, and quarterly reports (batch processing, per Cory Hamasaki). We don't think we can declare total victory until sometime in March.

However, the lights are still on all over the world, contrary to what Jim Lord and Mr. CEO said. (In fact three of the electrical power "glitches" that were reported on this forum were power lines that were shorted out by mylar balloons. The glitch in Texas was caused by a drunk taking out a power pole. All of these things happened because of end-of-the-year celebrations, so I guess you could call them Y2K-related, LOL.)

There are no spectacular chemical plant failures, contrary to what Paula Gordon and Ed Yourdon feared. The failure rate, in fact, has followed exactly the path we found in our university hospitals. Nothing has been catastrophic; failures are mostly date logging or display.

There have been no "down hole" oil well failures as far as we can determine, contrary to what several self-proclaimed experts predicted. We've seen no major failures at refineries. (But no doubt a massive number of minor failures are being "covered up", LOL.)

In short, what Koskinen said in his briefing is precisely what we've observed at the state level. It's what the world is seeing, as evidenced by the surge in speculative stocks on the NASDAQ. And it's almost exactly opposite of what has been predicted by, for instance, Gary North, Infomagic, and others.

Infomagic stated that the coverup of Y2K is so thorough that it will take historians a century to unmask it. Doesn't that strike anyone as a little odd? The Great Depression or the Viet Nam war couldn't be hidden. So how are all these massive, cascading Y2K failures being disguised? And how will they remain disguised for a hundred years unless they're so small that they don't attract anyone's attention?

Infomagic (Or Mr. CEO or Paula Gordon or Paul Milne or Russ Kelly or ...) vs Koskinen: Who are you going to believe? Whose track record is better?

-- Nicholas Osborn (nicholas.osborn@dir.state.tx.us), January 04, 2000.

"Infomagic (Or Mr. CEO or Paula Gordon or Paul Milne or Russ Kelly or ...) vs Koskinen: Who are you going to believe? Whose track record is better?"

Infomagic is a seriously wacked individual.

Mr. CEO was credible, just wrong.

Paula Gordon was misguided by the French.

Milne.....well, his agenda is transparent.

Russ Kelly was proactive in fixing the problem, but never a doomer.

-- Buster (BustrCollins@aol.com), January 04, 2000.

What confuses me is the performance of the "control" systems that failed. If this were the case, many of those "non-critical" systems that were unremediated and all those business that chose to "fof" would, likely, be experiencing similar failure problems. I don't see that. Things are too calm and orderly.

In my own case, I fired up an old 386 running on windows 3.1 with original bios and no patches whatever, and it had not one problem.

-- anon (anon@anon.calm), January 04, 2000.

Nicolas; I am pleased to see that one at my 'patron-state' shows the courage to step out into the light and be counted. Good for you, Sir!

I think the Fed has found a nice place to pop off. Last night as I was traveling home it occured to me that the mood is high. The Fed looks good right now and right now is a GOOD time to declare a victory. All governments seem to be doing that at this moment. No doubt because they actually believe there will be no impact to the economy, he said, cynical tongue firmly couched in his cheek.

This is the TIME to declare victory and get out of the game. It is that simple. There is really only one hurdle left, thank God. That hurdle is the interaction of many trivial errors across multiple systems. The .gov, indeed Dale Way himself, has managed to ensure that any problems will be the fault of businesses and their applications and not because it happened on their watch. We do note, however; with slight chagrin, the SELF REPORTING and the fact that businesses can't be sued over Y2K. What a nice plum to have for the business community and software industry.

I believe Kosky, Way, and yes, Yourdon may actually have gotten it right. We have observed the tip of the berg and it doesn't look all that bad. The .gov and business have worked things out quite nicely for one another. Victory is being declared and there will be nobody to blame because Y2K is going to be a non-event, whether is actually is or not.

Yep, we have them right where they want us. :)

-- Michael Erskine (Osiris@urbanna.net), January 04, 2000.