[Senate Hearing 106-632]
[From the U.S. Government Publishing Office]



                                           S. Hrg. 106-632

DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2001

=======================================================================

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                                   on

                               H.R. 4690

AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF COMMERCE, JUSTICE, 
  AND STATE, THE JUDICIARY, AND RELATED AGENCIES FOR THE FISCAL YEAR 
           ENDING SEPTEMBER 30, 2001, AND FOR OTHER PURPOSES

                               __________

                         Part 1 (Pages 1-811)

                        Department of Commerce
                         Department of Justice
                          Department of State
                   Federal Communications Commission
                       Nondepartmental witnesses
                  Securities and Exchange Commission
                               __________

         Printed for the use of the Committee on Appropriations


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

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                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington             FRANK R. LAUTENBERG, New Jersey
MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
JON KYL, Arizona
                   Steven J. Cortese, Staff Director
                 Lisa Sutherland, Deputy Staff Director
               James H. English, Minority Staff Director
                                 ------                                

   Subcommittee on Commerce, Justice, and State, the Judiciary, and 
                            Related Agencies

                  JUDD GREGG, New Hampshire, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
PETE V. DOMENICI, New Mexico         DANIEL K. INOUYE, Hawaii
MITCH McCONNELL, Kentucky            FRANK R. LAUTENBERG, New Jersey
KAY BAILEY HUTCHISON, Texas          BARBARA A. MIKULSKI, Maryland
BEN NIGHTHORSE CAMPBELL, Colorado    PATRICK J. LEAHY, Vermont
                                     ROBERT C. BYRD, West Virginia
                                       (ex officio)
                           Professional Staff
                              Jim Morhard
                             Kevin Linskey
                               Paddy Link
                               Dana Quam
                              Clayton Heil
                         Lila Helms (Minority)
                         Sonia King (Minority)
                            C O N T E N T S

                              ----------                              

                      Thursday, February 24, 2000

                                                                   Page
Department of Commerce: Office of the Secretary..................     1

                       Tuesday, February 29, 2000

Department of Justice: Office of the Attorney General............    45

                        Thursday, March 2, 2000

Department of State: Secretary of State..........................   117

                         Tuesday, March 7, 2000

Department of Justice:
    Immigration and Naturalization Service.......................   183
    Federal Bureau of Investigation..............................   215
    Drug Enforcement Administration..............................   215

                        Tuesday, March 21, 2000

Federal Communications Commission................................   289
Securities and Exchange Commission...............................   323
Departmental witnesses:
    The judiciary................................................   337
    Independent agencies: The Asia Foundation....................   365
Nondepartmental witnesses:
    Department of Justice........................................   371
    Department of Commerce.......................................   398
    Department of State..........................................   421
    Independent agencies.........................................   425
  

 
DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              


                      THURSDAY, FEBRUARY 24, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 11:02 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg and Hollings.

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

STATEMENT OF HON. WILLIAM A. DALEY, SECRETARY
ACCOMPANIED BY:
        LINDA J. BILMES, CHIEF FINANCIAL OFFICER AND ASSISTANT 
            SECRETARY FOR ADMINISTRATION
        DEBORAH K. KILMER, ASSISTANT SECRETARY FOR LEGISLATIVE AND 
            INTERGOVERNMENTAL AFFAIRS
        ELLEN BLOOM, DEPUTY CHIEF OF STAFF
        BARBARA RETZLAFF, DIRECTOR, OFFICE OF BUDGET

    Senator Gregg. We will begin the hearing of the Commerce, 
Justice, and State Subcommittee.
    I understand Senator Hollings will be coming a little 
later.
    We are honored to have the Secretary of Commerce with us.
    Mr. Secretary, rather than our taking your time with 
opening statements, please proceed with your statement.


                OVERVIEW OF SECRETARY DALEY'S STATEMENT


    Secretary Daley. Thank you very much, Mr. Chairman.
    Let me say that I am very pleased to be here to present our 
Commerce Department's budget for the new fiscal year, and let 
me first thank you, Mr. Chairman, and the members of the 
subcommittee and all of your hardworking staffs for the support 
and counsel which you have all given us over the last 3 years. 
This will be our last visit together, so I look forward to 
working with the subcommittee, obviously, to make this one of 
the best ever.
    As you know, we are in the longest economic expansion in 
our Nation's history. As a result, we are in an era of 
unprecedented budget surpluses. Obviously, our goal is to try 
to continue this for many years to come, and we are requesting 
a budget that covers our everyday chores, from taking the 
Census to advancing U.S. trade and protecting our marine 
resources.
    But we are also requesting $875 million in new strategic 
investments that will help us do our jobs better and at the 
same time prepare us for the future. These investments are not 
only consistent with President Clinton's priorities, but in my 
opinion, they reflect many of the priorities of you in 
Congress.
    All told, our budget calls for $5 billion next year, which 
is down 37 percent from last year's $8.5 billion, but of 
course, the decline is because the bulk of the work of Census 
2000 will be done in the current fiscal year. I might add that 
we are on track for completing the Census on time.
    To complete the work, we are requesting $393 million in 
fiscal year 2001 for the processing and distributing of the 
data and also for closing down the hundreds of local Census 
offices. To be honest, we have prided ourselves in this 
Department for keeping the lid on our budget, and aside from 
the Census, our core budget has remained fairly constant at 
about $4 billion for the last few years.
    But the time has come to invest in the future so we can 
continue delivering high-quality services to the American 
people. In my opinion, this is a very prudent budget that, 
despite the increases, will pay dividends in the long run. I 
would like to briefly highlight some of our proposals.
    E-commerce is the growth engine of the future. We have 
never seen anything like it before. But this revolution is 
definitely not without challenges. All of us got a wake-up call 
a few weeks ago that showed how vulnerable the Internet can be 
to cyber attacks. Obviously, it is smart business to make sure 
we have tighter security so we can maintain public confidence 
in the Internet. So we are proposing $76 million to work on 
this problem.
    To fully exploit the Internet's potential, everyone needs 
to be plugged into the revolution, so we are seeking $175 
million to help narrow the digital divide and also help promote 
e-commerce. This money would be used to increase computer use 
in the home, to triple NTIA's Technology Opportunities Program, 
and also to install high-speed Internet technology in rural 
communities and in the very distressed urban areas.
    As we all know, accurate measurement of the economy is an 
absolutely vital Government function, so we are seeking $29 
million for tracking e-commerce growth and for enhancing our 
statistical infrastructure.
    We also want $54 million to promote economic development in 
our Native American communities; $28 million for minority-
serving institutions to help them educate more scientists and 
engineers; and $10 million as part of a Government-wide effort 
to revitalize communities throughout the Mississippi Delta.
    For NOAA, which makes up the lion's share of our budget, we 
are requesting nearly $2.8 billion. This includes $376 million 
in new money for protecting our environment. Much of this 
supports the President's Land Legacy Initiative, which is one 
of the greatest efforts to save natural resources since Teddy 
Roosevelt was President. So we are asking for resources to set 
up a new Cultural Impact Assistance Fund and increase the 
grants in our Coastal Zone Management Program. We are also 
requesting $60 million so we can honor our commitment to the 
1999 Pacific Salmon Agreement.
    Predicting the weather and maintaining the largest non-
military fleet of satellites in the world are our key 
priorities, so we are requesting increases in those areas.
    This will once again be another banner year for trade. We 
are requesting $72 million for these programs. Bringing China 
into the WTO obviously would help us reduce our trade deficit 
by opening many markets in China that are now closed to U.S. 
exporters. By granting China permanent normal trade relations 
and bringing them into the WTO, we would have the opportunity 
to gain better access to many markets, from agriculture to 
telecommunications.
    As a member of the WTO, China for the first time will have 
to play by global trade rules. Given the sheer volume of our 
trade with China and other nations, especially in Asia, we need 
more resources to remain effective at enforcing our trade laws 
and agreements that are already on the books. We are requesting 
$21 million for that purpose.
    To be frank, how can we expect the American people to 
support those of us who agree that more liberal trade is good 
for us if they see that we are not doing a good job at 
enforcing and policing existing agreements? We can trust our 
trading partners, but we must verify that our trade deals are 
being lived up to.
    There is also $16 million for promoting environmental 
exports and exports by small manufacturers. We are also 
proposing $30 million to help communities adjust when a plant 
closes due to trade or other economic shocks.
    The last area I would like to mention, Mr. Chairman, is 
management. Without a doubt, the number one challenge for our 
Government in the years ahead is to find ways to deliver our 
basic services more efficiently. Over the past few years, we 
have made improvements at Commerce, from producing clean 
financial statements for all of the bureaus to improving 
security. But in the 21st century, Government must be E-ready. 
For several years now, we have asked for money to rewire our 
building with optical fiber so we can be a fully digital 
Department. With fiber, our network would operate 10 times 
faster than it does today. Ten years ago, people could wait 
overnight for an urgent letter, but to get the job done for the 
taxpayers, people need the information delivered instantly to 
their computers.
    As the first Commerce Secretary of this, the Internet 
century, and if I may say, the longest-serving Commerce 
Secretary of this century, I strongly urge the subcommittee to 
provide the $6 million we need to rewire this building. I 
believe it is essential to the future effectiveness of the 
Department.
    Finally, we are requesting funds for a number of critical 
building projects, notably, NOAA and the Census Bureau.

                           PREPARED STATEMENT

    Mr. Chairman, that completes a brief outline of our 2001 
budget request. Again, it has been an honor to appear before 
your subcommittee and to engage with you and your staff, and I 
would like to thank you once again and also thank the men and 
women of the Department of Commerce for the support that they 
have given me in the last 3 years as we have gone through the 
budget process; our CFO and all the people who have worked so 
hard in our budget department not only to get me ready, but to 
get this budget put together to effectively present to you.
    Thank you, Mr. Chairman.
    [The statement follows:]
                 Prepared Statement of William A. Daley
    Good morning. I am pleased to be here to present the Commerce 
Department's budget for the new fiscal year.
    Mr. Chairman, first I want to thank you, the members of this 
Subcommittee, and all your hardworking clerks for the support and 
counsel over these past three years.
    This will be our last year together, so I look forward to working 
with the Subcommittee to make it one of the best ever.
    As you all know, we are in the middle of the longest economic 
expansion in our nation's history. As a result, we are in an era of 
unprecedented budget surpluses. And I think all of us want this to 
continue for many years to come.
    We are requesting a budget that covers our everyday chores, like 
taking the Census, advancing U.S. trade, and protecting marine 
resources. But we also are requesting $875 million in new, strategic 
investments that will help us do our job better, and prepare for the 
future.
    In my opinion, these investments are not only consistent with 
President Clinton's priorities, but they also reflect many of your 
priorities in the Congress.
    All told, our budget calls for $5 billion next year, down 37 
percent from this year's $8.5 billion budget. Of course, the decline is 
because the bulk of the work for Census 2000 is being done right now, 
in the current fiscal year. I might add that we are on track for 
completing the Census on time, which in no small measure is due to the 
support of the Congress. For that we thank you.
    To complete the work, we are requesting $393 million in fiscal year 
2001, for processing and distributing the data, and for closing down 
local census offices.
    To be honest, I have prided myself on keeping a lid on our budget. 
Of course, we have had to request substantial sums to cover the Census. 
But our core budget has remained fairly constant at about $4 billion 
for the last few years.
    But the time has come to invest in the future: for promoting 
exports and enforcing our trade laws, for delivering high quality 
services, and for helping communities adjust to economic forces.
    In my opinion, this is a very prudent budget that, despite the 
increase, will pay big dividends in the long run.
    Let me briefly highlight some of our proposals.
    First are investments for accelerating the E-Commerce Revolution. 
Obviously, E-Commerce is the growth engine of the future. We've never 
seen anything like it before. In my three years as Secretary, I have 
watched it grow from hardly a decimal point in world economic 
statistics, to what will be a trillion dollar business in a few years.
    But this revolution is not without its challenges. All of us got 
the wake up call a few weeks ago that showed how vulnerable the 
Internet is to cyber attacks. President Clinton's meeting with 
industry, and your Subcommittee hearing last week, clearly underscore 
the need for tighter Internet security. While our information economy 
is strong and resilient, we must work together with the private sector 
to develop solutions to these problems.
    Obviously, it is good business practice to do so to make sure that 
public confidence in our economy remains.
    In our budget, we are proposing $76 million to work on the problem, 
including $50 million for an institute to begin Internet security R&D. 
It will be housed at NIST and will involve the private sector.
    To fully exploit the Internet's potential, everyone needs to be 
plugged into the revolution.
    So we are seeking $175 million to help narrow the digital divide, 
and to promote E-Commerce.
    We are requesting: $50 million for NTIA to increase computer use in 
the home; a tripling in NTIA's Technology Opportunities Program to $45 
million; and $23 million for EDA to install broadband technology in 
rural communities and distressed areas, where high-speed Internet 
access is as vital as good roads and bridges.
    As we are often reminded--accurate measuring of the economy is an 
absolutely vital government function. So we are seeking $29 million for 
tracking E-Commerce growth, and for enhancing our statistical 
infrastructure.
    Next, we are seeking $54 million to promote economic development in 
our Native American communities. Turning things around for Native 
Americans is a key goal of President Clinton's New Markets program.
    We also are requesting $28 million in new funding for Minority 
Serving Institutions to help them educate more scientists and 
engineers. NOAA and NIST will administer the funding.
    Another community struggling to move ahead is the Mississippi Delta 
region, where unemployment rates are double and triple the national 
average. We are asking Congress for $10 million as part of a 
government-wide effort to revitalize this multi-state area.
    As you know, NOAA makes up the lion's share of our budget. We are 
requesting nearly $2.8 billion for NOAA.
    Let me highlight a few of the new investments we're requesting. 
There's $376 million in new money for protecting the environment. Much 
of this supports the President's Lands Legacy initiative, which is one 
of the greatest efforts to save our natural resources since Teddy 
Roosevelt was President.
    We will be working on a number of fronts. There's $100 million for 
a new Coastal Impact Assistance Fund, and a $93 million increase in 
Coastal Zone Management grants.
    Our marine resources are a top priority. Your support on this is 
extremely important as we negotiate with other nations, and work to 
protect these resources.
    We are requesting $60 million so America can continue to honor its 
commitment to the 1999 Pacific Salmon Agreement. We also want a $10 
million increase for our National Marine Sanctuaries, which is nearly 
double what we received this year.
    In other areas, we request: $12 million to expand efforts to stop 
declines in a number of endangered species; and $10 million to help 
fishermen deal with over-fished waters.
    Predicting the weather and maintaining the largest non-military 
fleet of satellites in the world are key priorities. We are seeking 
$100 million to finish modernizing the National Weather Service, and 
for maintaining our satellite systems.
    And we need $28 million as part of a multi-year effort to improve 
forecasts of El Nino, and other climate events.
    In the area of trade, we are requesting $72 million. Despite our 
past successes in expanding trade, we still have a nagging deficit. 
Obviously, one of the main reasons for that is our strong economy, and 
strong demand for imports. But in my opinion, we can do more to help 
shrink the deficit.
    Bringing China into the WTO obviously would help. A quarter of 
humanity lives in China, but many of their markets are now closed to 
exporters.
    By granting China permanent normal trade relations, we would gain 
better access to many markets . . . from agriculture to 
telecommunications. And as a member of WTO, China for the first time 
will have to play by global trade rules.
    To make sure that it does, we also are requesting $21 million to 
get more aggressive about enforcing our trade laws, and our agreements 
with other nations. Last year, we did a great job on steel dumping. But 
given the sheer volume of our exports and imports, we need more 
resources to remain effective.
    To be frank, how can we expect the American people to support us on 
trade, if they see we aren't doing a good job of policing our 
agreements?
    We can trust our trading partners, but we must verify that our 
trade deals are being lived up to. So, for the first time, we plan to 
put trade compliance people in China, Japan, and Korea. This alone will 
help with about half the trade agreement problems businesses face.
    There's $16 million, also, for promoting environmental exports, and 
exports by small manufacturers. And we are proposing $35 million to 
help communities adjust when a plant closes due to trade, or other 
economic shocks.
    The last area I want to mention is management. Without a doubt, the 
number one challenge for government in the years ahead is to deliver 
services more efficiently. One way of doing that is making government 
e-ready.
    For several years now, we have asked for money to re-wire our 
building with optical fiber, so we could become a truly Digital 
Department. With fiber, our network would operate ten times faster than 
it does today. Ten years ago people could wait overnight for an urgent 
letter. But to get the job done today, people need the information 
delivered instantly to their computers.
    As the first Commerce Secretary of the Internet Century--and the 
longest serving!--I strongly urge the subcommittee to provide the $6 
million we need to rewire the building. It is absolutely essential.
    We also are requesting funds for a number of critical building 
projects, notably for NOAA and the Census Bureau.
    We are very big on other good management practices. In the last two 
years, we have improved security for our workers, property and 
information. And for the first time, we have received clean financial 
statements from all the bureaus. And, we need to continue to implement 
PTO's reforms passed last year.
    And, finally, let me add that as part of a supplemental request, we 
now have a plan on the table to close down NTIS, which has become 
outdated by the Internet. In my opinion, our plan would maintain public 
access to the scientific and technical information NTIS distributes, 
and minimize the impact a closure would have on federal workers.
    Mr. Chairman, that completes my brief outline of our 2001 budget 
request.
    I am prepared to answer your questions.

    Senator Gregg. Thank you, Mr. Secretary.
    We have appreciated your forthrightness before this 
committee over the last couple of years and have enjoyed 
working with you. I think you may be a little premature in your 
estimation that you will not be before the committee again. 
There may be other issues that come up that we would love to 
hear from you on, and hopefully, we will have a chance to do 
so.

                  HOME INTERNET ACCESS PROGRAM (HIAP)

    I would like to focus initially on all the various 
initiatives in, for lack of a better word, the e-commerce area. 
It appears to be sort of a shotgun approach where almost every 
agency has thrown in a few million and in some cases, tens of 
millions of dollars, of requests and put ``e-commerce'' on 
them. It almost looks like it is an IPO exercise, where you 
change the company's name and put dot.com behind it and ask for 
a filing which gets you all sorts of money in the marketplace.
    What I would like to do is try to sort out what you are 
proposing here and especially sort it out in the context of 
what other agencies are doing to the extent that there is 
overlap.
    Let us begin with the home Internet access proposal which 
as I understand is $79 million of new grants for home Internet 
access along with information infrastructure grants. Maybe you 
could explain that and explain it in the context of the 
Universal Service Fund which has been set up and is funded by 
$1 billion already, which deals with schools and libraries, 
some of which spins off into this area.

                             INTENT OF HIAP

    Secretary Daley. The $50 million that we are requesting for 
the home Internet access program is intended to supply low-
income families with connections, training, and the support 
which would be necessary for full involvement in today's 
information economy.
    Senator Gregg. Let me stop you there. I heard the Vice 
President give a speech in which he said it was a new civil 
right--a new civil right--that people should have access to the 
Internet. Is that the policy of the administration, that this 
is a civil rights issue?

                             DIGITAL DIVIDE

    Secretary Daley. I think that if you look at what has 
happened with our society and this divide, what we have phrased 
the ``digital divide,'' there is no question that there is a 
growing gap between our races on the accessibility and the use 
of this extremely important technology for people's futures. 
There is no question that if you are not capable of using these 
technologies--and there are very few, if any, businesses left 
where you do not need some level of competence at the computer 
and computer skills--it is going to be very difficult to keep 
up with the rest of our economy.
    Senator Gregg. Are you planning to put physical hardware in 
homes, or are you planning to educate people?
    Secretary Daley. It is not about putting hardware into 
homes. We obviously hope that the hardware ends up in the 
homes, because the fact of the matter is that if there is--one 
thing that our digital divide study showed was not only that 
this gap is widening, but where there is accessibility, people 
will take advantage of that; whether it is in the schools, as 
the E-rate has given us now in I think 90 percent of the 
schools, or the libraries, people will take advantage of that.
    There is no question that the marketplace is moving toward 
trying to get----
    Senator Gregg. What are you going to do with the $50 
million? Are you going to put hardware in the homes?
    Secretary Daley. No. It is going to be a combination of 
working with community organizations to get training and to get 
hardware into communities. Whether it is actually put in the 
home or not, it would seem to me, Mr. Chairman, that that would 
not be a step within the program, to actually put hardware in 
the homes.
    Senator Gregg. You are going to use it to train people at 
the local community level in how to teach people?
    Secretary Daley. And have community organizations that 
can--hopefully, we can bring hardware and capabilities to them, 
so people can access through those organizations the use of 
these technologies.
    Senator Gregg. Walk me through this. I am a person of low 
income. How am I going to interface the Commerce Department's 
$50 million? How are our paths going to cross?
    Secretary Daley. We will interface within an organization 
at your community level--not with the Department coming into 
your home or coming face-to-face with you. This is a program 
that we will work with Government----
    Senator Gregg. So this is going to be a new initiative 
with, like, the CAPS agencies to go out as part of their 
initiative, which is today basically involved with nutrition 
and housing; they are now going to, in addition, have an 
Internet education portfolio?
    Secretary Daley. Many local organizations are already doing 
that. We had a digital summit and were visited by over 800 
organizations, companies and community organizations, civil 
rights organizations, which very much believed that at the very 
local level, their organizations have got to be providing for 
their people the technologies and the training. Basically, we 
will deal with those organizations.
    Senator Gregg. So this is not actually going to get to the 
low-income person. This is going to get to the bureaucracy that 
is in existence already that allegedly works with the low-
income individuals.
    Secretary Daley. Well, I would say that our goal and our 
plan would be to get this to the people and not have it lost in 
between the Department and that low-income person. That is the 
goal, and we would hopefully structure it in a way that we 
would not have that sense when the program is reviewed by you.
    Senator Gregg. This is an exploding technology. We do not 
know where it is going. There are some who would argue that 
people who have a television set today will have a computer 
tomorrow and will have Internet access tomorrow. My question is 
with this dramatic explosion in technology, which we have no 
idea where it is going to end up--we are just in the infancy 
stage of it--why do we think that the Federal Government with 
$50 million is going to be able to accomplish what the 
marketplace is probably going to accomplish on its own by 
simply creating the demand and having a technology where the 
prices are dropping so radically that it is available to most 
people anyway who have a TV? And most people in America do have 
a TV even if they are extremely low-income.
    Secretary Daley. As you say, Mr. Chairman, it may end up 
where your TV is your unit. I doubt it would be the TV that you 
and I have in our homes today.
    Senator Gregg. It probably will be, with a cable box on top 
of it.
    Secretary Daley. It may be. But it has been pretty obvious 
that in this explosion, there have been a lot of people left 
out by the private sector. And to allow that group to grow and 
to continue to be ignored by the private sector will make this 
gap and this divide that we have seen over the last couple of 
years even worse.
    Senator Gregg. Unfortunately, there are a lot of people in 
our society who are left out of a lot of different areas. I 
would start with education. We have an educational system that 
is failing a large number of people, and we do have an 
obligation to try to improve that.
    It seems to me to be the creation of a new program the 
purpose of which is to find a home in order to address a 
political statement versus a substantive problem. I do not yet 
hear that there is a program here to back this up that is going 
to do much more than just send a bunch of money out to a bunch 
of different advocacy agencies which have in some instances 
been successful, and in some instances, simply have 
bureaucratic funding mechanisms. So I have very serious 
reservations about this, but we can go on to another topic, 
because, obviously, we may have some disagreement there.
    I will turn to my ranking member for whatever statements he 
wants to make and questions he wants to ask.
    Senator Hollings. Thank you, Mr. Chairman.
    I am intrigued also by the idea of having a computer as a 
civil right. The Vice President made that statement just 
recently at Morgan State in Maryland, and said that every home 
ought to have a computer. And then we have the Secretary of 
Commerce come up here and start it.
    We believe in the schools and libraries, and we put that 
program in with respect to the Telecommunications Act of 1996, 
and we got the education feature to connect every school and 
every library across America, and we are still working on that. 
But as far as a civil right, I can take you to places in South 
Carolina that do not have indoor toilets, or telephones, or 
TVs, much less a computer. This thing could grow like Topsy.
    I will go along with the $19 million to help the small and 
medium manufacturing firms with technical assistance and e-
commerce, or the $10 million for the export initiative targeted 
at small and medium-sized manufacturers. Those kinds of things 
are fine, but the other $100 million in here for EDA and some 
other grants and whatever it is, I am going to be at the end of 
the phone ringing, saying I want one of those grants--you have 
a $1 billion program--that is a foot in the door, and I do not 
know where you stop that, to get everybody a computer and get 
it all interconnected.

                     COASTAL IMPACT ASSISTANCE FUND

    Specifically, I am mainly interested in NOAA. You are 
building up a Coastal Impact Assistance Fund, which could 
really take care of the Coastal Zone Management State grants. 
In fact, that is the part of the State grants that takes care 
of an oil spill where you have exploration. But you have $100 
million sitting around there, and then you cut the NOAA fleet. 
We have one vessel in there, and we are supposed to get another 
one, but you have eliminated that, and you have more or less 
eliminated NOAA's budget; you just leave it level-funded when 
we have over 100 lawsuits. Environmental groups are gathering 
the country around now to shut down the fisheries, and we have 
all these lawsuits backed up, and we cannot get the 
information, you cannot get the ships out there, you cannot 
back up your position. So they have enjoined them, and they are 
withholding, and what you are really doing is starting the 
Department of Commerce as a sort of grant program, leaving out 
the research and the expertise necessary for the fisheries and 
oceans programs there--as the longest-lasting Secretary of 
Commerce in this century.
    Can't we just transfer that $100 million Coastal Impact 
Assistance Fund, just sitting down and not doing any drilling, 
but the environmentalists are drilling us--they are closing 
down the fisheries. We have all of these lawsuits backed up, 
and you do not even give us the money to do the work, so we 
have an incompetent NOAA. So they say, well, let us abolish 
that anyway. Many a Secretary has come along and tried to 
abolish NOAA because they do not understand it, and they never 
really support it strongly. I see that here in this particular 
budget request.
    What is your response?
    Secretary Daley. First of all, Senator, I firmly believe 
that NOAA is an integral part of this Department. It is not a 
side thought of mine. I have spent a tremendous amount of time 
on NOAA issues and on fish issues. There is no question about 
it. I am sued repeatedly. I do not think there is an amount of 
money that you could appropriate that would slow down the 
number of lawsuits that we get, many of which are justified and 
many of which are not.

                          DELAY OF NOAA FLEET

    We have a strong effort within NOAA to repair the depletion 
of the fisheries throughout our country, and as you know it is 
from Alaska all the way down and around and back up to New 
Hampshire that we have problems with just about every fishery. 
On the issue of the fleet, we have delayed the second boat 
because of a problem on putting the procurement program 
together with the Navy, and the Navy has backed out on working 
with us on that second ship, so we have delayed, but we have 
only delayed the plans for that second ship, and we believe 
that by the fourth quarter of 2000, the award for the first 
ship will be done, and hopefully, shortly into next year, we 
will move forward on the plans. But the only reason the second 
one is delayed, Senator, is because of the difficulties we had 
with the Navy as a procurement agent; so we have had to bring 
it back in.

                              NOAA LAWSUIT

    Senator Hollings. Mr. Chairman, I would hope the committee, 
rather than starting a new, $100 million Coastal Impact 
Assistance Fund, with money just sitting around, where we do 
have these lawsuits and are we not responding to them because 
we do not have all that fisheries information--we have 
fisheries responsibilities, as you describe, around the 
continent, but we are not responding, and we need an additional 
research vessel rather than starting a new Coastal Impact 
Assistance Fund, which is the Coastal Zone Management Act's 
original intent anyway. So we have the money there, and another 
$93 million, but I just cannot see that.

                                TOURISM

    Jumping to tourism, I see $4.5 million for an--and listen 
to this one--International Trade Administration's Cultural 
Heritage Community Development Export Initiative. You have 
somebody from the Pentagon who has gotten loose in your 
Department; I can tell you that right now.
    Senator Gregg. Does that have an acronym?
    Senator Hollings. I do not know. I cannot get that many 
initials----
    Senator Gregg. ``ITRAVEL'' or ``IFLY''?
    Senator Hollings. Yes, ``ITRAVEL,'' or whatever the heck it 
is.
    I have just come from a primary, and I spent $5 million 
trying to get reelected the year before last, and I can tell 
you that Governor Bush spent $10 million in my State, because I 
had no time buys, and I did not have any mailings, plus the 
telephones, so I do not know what $4.5 million is going to do 
for trade.

             NATIONAL TECHNICAL INFORMATION SERVICE (NTIS)

    How about the Technical Information Service, NTIS--you have 
taken $4.5 million out of the Advanced Technology Program to 
close down a service that is privately rendered up in Vermont. 
We had that with the rural information band, the WIC Program. 
In Commerce years back, we had the argument with Barron's that 
if you paid $1,000 a year, you could get it privately, but we 
had too many small businesses that did not have $1,000 to 
subscribe, so we put it in, and the Technical Information 
Service has worked out extremely well. I know that with the 
Internet, everybody has advanced, but everybody, as you say in 
the early part of your request, does not have it. Small 
businesses do not have it, and many, many others do not have 
it, and they do not have the infrastructure. So it seems to me 
that rather than take it out of the Advanced Technology 
Program, we could just continue that, Mr. Chairman, rather than 
closing it down.
    Mr. Secretary, would you comment, please?
    Secretary Daley. Senator, obviously, Congress a few years 
ago changed the structure of that and the focus of it and 
directed it to be self-sufficient. It then had to become 
competitive with the private sector, which is very difficult.

           NTIS FUNCTIONS TRANSFERRED TO LIBRARY OF CONRESS

    There is no question that there is a public purpose of 
parts of the NTIS that should be and we have encouraged that 
they be taken over by another agency, primarily the Library of 
Congress if that would work. There has been a Library 
Commission that has made recommendations, and we appreciate the 
work with them, but the fact of the matter is that for that 
organization to be competitive the way Congress wanted them to 
be, they were going to be in violation of the anti-deficiency 
laws. We took the steps believing that there are functions of 
that organization that, as I say, should continue, but they 
should not necessarily continue in the Commerce Department, and 
that is why we recommended that the important functions that 
you have stated be moved to somewhere else, but that----
    Senator Hollings. To the Library of Congress, to just store 
the information there.
    Secretary Daley. Basically, that is what their function 
would be, right, because they cannot compete----
    Senator Hollings. The scholars can find it, but I do not 
believe any businessman has ever been caught over at the 
Library of Congress.
    Secretary Daley. Well, not too many of them were being 
caught at our organization when they were being charged--for 
example, Senator, if I could, the NTIS, when we did our digital 
divide report, was costing somebody, a general citizen, $20-
some if they went to NTIS to get that report, and they could go 
on the Internet and get it for nothing. That showed that their 
business plan was somewhat flawed.

                             IIP VERSUS ATP

    Senator Hollings. At the new Institute for Information 
Infrastructure Protection at NIST, Mr. Secretary, you have 
research for computer security technology. Why not at the 
Advanced Technology Program, where you have matching funds? 
This is an outright grant. You have four universities in it, 
and the probability is that rather than attracting other 
universities, they know how to make out the grant applications, 
they have the expertise, so you are just going to finance it at 
four universities and not extend it to the other universities, 
on the one hand; and on the other hand, for the industries that 
would be getting into it on a maximum basis with new 
technologies, you have that established program, the ATP, 
rather than just starting an outright grant of $100 million--
excuse me--I think it is $50 million.
    Secretary Daley. It is $50 million that we are requesting, 
Senator. We believe that NIST, with their expertise and their 
scientists actively working with the universities and with the 
private sector, can be the most efficient way to do this as 
opposed to through the ATP program. The ATP program has been 
effective, no question about it, with some long-range, high-
risk investments. We believe, based upon not only the incidents 
of 2 weeks ago, but just an overall feeling, that the security 
of our infrastructure is most important to be protected; that 
the NIST scientists and their unique relationship with the 
private sector and with universities can create a program that 
will be extremely helpful to the Government long-term. ATP, as 
we also know, has been a controversial program at times, and 
you have continued to fund it at a level that we believe is 
quite adequate. But NIST and their expertise, we believe, for 
this problem of Internet security, is uniquely qualified.

                     ELIMINATION OF TEXTILE PROGRAM

    Senator Hollings. And on the International Trade 
Administration, I see that you have eliminated the textile 
program, but you have put one in for Native Americans. I have 
worked with the Bureau of Indian Affairs and Native Americans, 
and that $22.5 million--when you start getting into that Bureau 
and take a formative program that is more needed now than ever. 
In the early days, under President Kennedy, we had to have 
hearings and a finding by the Cabinet that the particular item 
involved, before the President could take emergency action, was 
important to the national security. So the Secretary of 
Commerce, with Defense and State, Treasury and Labor, had 
Cabinet hearings and findings. In May of 1961, then President 
Kennedy put his seven-point program out, and that has worked 
extremely well until you folks came with that white tent and 
all those Republicans underneath it to ship all the industry 
down to Mexico. I have lost 33,300 textile jobs. Look at the 
Bureau of Labor Statistics--it is probably more now; that is an 
old figure. But in my little State [South Carolina], we have 
lost 33,300 textile jobs.
    Now, the only way that we can sustain an industry important 
to the national security as was found back under President 
Kennedy is with this particular cooperative research with 
private industry and the Government and the textile program. 
So, rather than eliminate that, I would hope that the $22 
million--I will talk to Senator Inouye, and I am sure he can 
help the Bureau of Indian Affairs get that moving, if that is 
really what you are interested in--but I would hope we could 
maintain the textile program.
    Do you have any comment on that?

                            NATIVE AMERICANS

    Secretary Daley. We have not eliminated our textile 
programs. On the issue of the Native Americans, Senator, as you 
know, they have had an economic situation that has been 
unparalleled with any other group of citizens, no question 
about it. As you mentioned, many of the textile workers in your 
State and other States have suffered over the last number of 
years by virtue of not only NAFTA, but by virtue of the global 
competition which has become extremely fierce in the textile 
industry. That is something that is real, and we are sensitive 
to it, and we are attempting to keep the opportunities for 
those workers in other areas, and as your State has experienced 
such an explosion in other job opportunities, quite frankly, 
that is not equalled or even matched in many other States and 
surely not on the Indian reservations. Our program with Native 
Americans is to try to address, through EDA, a horrendous 
situation where their unemployment and their economic 
opportunities are much, much less than any group of people, 
especially those in a State as vibrant as yours, even though 
that industry, no question about it, has been terribly 
challenged over the last couple of years.

                        NATIONAL TEXTILE CENTER

    Senator Hollings. Well, I will look at it again, but there 
is no provision for the National Textile Center or for the T-
squared, the one they have at NC State. You did not request any 
money there.
    I will yield, Mr. Chairman, and thank you.

                          RESCISSION CRITERIA

    Senator Gregg. I want to follow up on one of Senator 
Hollings' questions relative to NOAA. It seems to me that NOAA 
took a disproportionate hit when the 0.38 percent cut was made 
across the board, as compared, for example, to Census. I am 
wondering why, following up on Senator Hollings' concerns about 
the way the base budget of NOAA has been treated in the budget 
proposal. I also agree with his concern that the base NOAA 
budget appears to be getting short shrift here for initiatives 
which are basically grant initiatives, which I also support, 
but which I think has to be done in the context of a strong 
base budget. Why did you, in allocating that cut, hit NOAA so 
hard in comparison with the Census?
    Secretary Daley. Well, the Census took a hit of about $5 
million, as opposed to if it were straight across the board, 
they would have taken somewhere around $11 million. That, as we 
all know, is an effort which has been very controversial, one 
that we believe is moving forward, one that, however, is a 
massively difficult task to undertake and will be over at the 
end of this year, the vast majority of it, and to give them a 
hit of the extra $6 million would have been a difficult thing 
for them to take--pardon me, I have just been told that it was 
$16 million, not $11 million, and I apologize.
    We did exempt some of our most essential programs like the 
National Marine Sanctuaries Program, and we cut every other 
program except the Census by the 0.38 percent that the Congress 
indicated. It was determined that Census would have to have 
some flexibility on where to take this money. And then we cut 
the other earmarks of Congress by about 7.5 percent. There were 
a number of earmarks in NOAA, and that may be the reason why 
they took a little larger percent of hits than other bureaus; 
they have more earmarks and more programs that were 
susceptible. But we tried to exempt some of our more critical, 
as I said, programs, like National Marine Sanctuaries and 
others that we exempted. We had a policy that was really the 
same and consistent with all the other departments and other 
actions by Secretaries.
    Senator Gregg. I understand that the flexibility was given 
to you. Actually, I would have taken it out of Census. In fact, 
Census has a huge amount of money, and I suspect it is going to 
end up with more money than it needs if it does the program 
effectively; that would have been the more practical place to 
apply the cut.

                       NATIONAL SECURITY COUNCIL

    On the critical infrastructure issue, can you give us a 
little background here? It seems to me that you are basically 
being a front organization for the National Security Council. A 
lot of the money that comes to you is being funnelled back to 
the NSC, and the NSC is managing those dollars.
    My question to you is what type of control do you have over 
these dollars, which are basically under the direction of the 
NSC, which you are basically getting or desiring to get?
    Secretary Daley. First of all, we believe strongly that we 
play a unique role in this whole debate of trying to protect 
our----
    Senator Gregg. I accept that. I accept the premise that 
business would rather deal with you than with the FBI in 
developing systems for protecting infrastructure. What I do not 
accept necessarily is the idea that you should be a front 
organization for the Security Council.
    Secretary Daley. Well, I do not think we are a front 
organization for them. I think we play a unique role, no 
question about it, along with our role working closely with the 
business community. There is, no question, a national security/
law enforcement piece to this that is constant, and we all kind 
of interrelate. So I do not deny that there is a national 
security role in this----
    Senator Gregg. Who is responsible for the funds--who is 
responsible for the funds under the control of the National 
Security Council--you or Clarke [ed. Dick Clarke, National 
Coordinator for Security Infrastructure Protection and 
Counterterrorism]?
    Secretary Daley. We are.
    Senator Gregg. Who is making the decisions on how the money 
is spent?
    Secretary Daley. We make it in conjunction with Clarke.
    Ms. Bilmes. Senator, I would just say that out of our $76 
million request for CIP [Critical Infrastructure Protection] 
funding, there is only $3 million in our request which goes to 
the CIAO [Critical Infrastructure Assurance Office]. We have 
$60 million at NIST [National Institute of Standards and 
Technology], $6.3 million at NTIA [National Telecommunication 
and Information Administration] for our lead agency 
responsibilities, $2.2 million at PTO [Patent and Trademark 
Office], $4 million at NOAA [National Oceanic and Atmospheric 
Administration], and there is a $3.5 million request at BXA 
[Bureau of Export Administration], of which $3 million goes to 
the CIAO. So it is a very small portion of our request which is 
at issue here.
    Senator Gregg. Well, there is some disagreement over that, 
so what I would like to get from you, to the extent that you 
can get it to us, would be an overlay of different accounts 
that are being used in your Department which are at the 
discretion of the National Security Council--not only in your 
Department, but I would like to get it in all the departments, 
so we can get a sense of where this money ends up when we give 
it to you. Does it end up on your desk, or does it end up on 
somebody else's desk whom we have no jurisdiction over and no 
oversight control over, which is obviously our concern.
    We have a vote on, and I do not want to have you sit here 
until I come back, but there are a number of other issues which 
I do feel need some explanation, so we will send you some 
specific questions on those areas.
    I also have reservations about this IIIP [Institute for 
Information Infrastructure Protection] program, very 
significant reservations about what its directive is going to 
be, and how it is going to coordinate, and whether it is going 
to overlap with other initiatives in other agencies. I do not 
want to see us get into a situation where we are creating 
another power center on the issue of terrorism and the issue of 
cyber crime. I want to make sure everybody is coordinating 
here--that is a big concern that I have with the budget as 
presented.
    We also have other concerns with NOAA. I happen to agree 
with your idea on NTIS--although obviously, Senator Hollings 
has some reservations about it, I think you are making the 
right move there. And I am not sure where we are going with 
public broadcasting. It appears that this could be opening the 
door to a fairly sizable effort, and I would like to get some 
idea as to what is the projected cost that we are going to be 
asked to put up in order for PBS to go digital, and what is the 
contribution that we are going to get from the Corporation for 
Public Broadcasting to offset this. In other words, are we 
going it alone, or will there be some matching funds coming out 
of the Corporation for Public Broadcasting?
    Those are some of the issues, and of course, I have a 
continuing concern with ATP [Advanced Technologies Program]. 
There appears to be a fairly significant carryover in ATP, and 
I am wondering why we need any new dollars in that account, 
considering the carryover that is coming at us.

                     ADDTIONAL COMMITTEE QUESTIONS

    Those are some of the specific issues, and we will probably 
ask you to respond in writing, or perhaps you and our staff can 
go over them.
    Secretary Daley. We will cooperate quickly, Mr. Chairman, 
and we will get the answer to your question on the CIAO and the 
critical infrastructure funding to you very quickly.
    Senator Gregg. I appreciate that.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Judd Gregg

              PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM
    Question. Doesn't the request for $79.5 million in new grants for 
``Home Internet Access'' and Information Infrastructure Grants really 
duplicate what is being done through the schools and libraries program 
as well as other initiatives throughout the Government?
    Answer. Neither program duplicates other Federal initiatives. Each 
plays a unique role in addressing different aspects of the digital 
divide.

Home Internet Access
    The Home Internet Access program focuses on the issue of affordable 
access to the Internet. The goal of the program is to increase the 
number of low-income families that have access to the Internet in their 
homes. Other Federal programs do focus on the access issue, but with 
very different approaches. The E-Rate program, which is administered by 
the Schools and Libraries Division of the Universal Service 
Administrative Company, provides affordable access to advanced 
telecommunications services for all eligible schools and libraries in 
the United States. The E-Rate provides discounts on telecommunications 
services, Internet access, and internal connections. This program helps 
schoolchildren gain access to the Internet in their schools and helps 
the general public gain access through their local libraries. However, 
neither the E-Rate nor any other Federal programs attempts to increase 
the number of low-income families that can use the Internet in their 
homes.

Technology Opportunities Program
    The TOP focuses on a different aspect of the Digital Divide--the 
issue of nonprofit and public sector applications of the Internet and 
other emerging telecommunications and information technologies. Through 
TOP grants, rural and other under served communities demonstrate how to 
provide better services to their residents. TOP grantees use technology 
to help police identify suspects, to enable home-bound individuals to 
receive medical care remotely, to help sick children stay in touch with 
their classes, to help rural communities develop worker skills, and to 
help neighborhood organizations prevent urban decline.
    For example, in 1997, TOP provided funds for the Virtual Campus of 
New Hampshire to extend the delivery of online course work, counseling, 
evaluation and assessment, and training for technical positions in such 
industries as biotechnology, telecommunications, and electronics. The 
goal of the project is to apply interactive Internet technology as a 
means of extending technical education that will lead to productive 
employment for under served populations in New Hampshire. New Hampshire 
residents are able to participate in the online courses at access 
points on our college campuses and four additional pilot sites--a 
public library, a high school, a public housing complex, and a 
community outreach center. In addition to access to basic courses, 
students are able to use the Internet to interact with mentors in a 
variety of technology-based industries.
    The TOP plays a unique role by supporting demonstration projects 
that serve as national models for other communities to follow. By 
supporting, evaluating, and showcasing these projects, TOP helps all 
communities to see what is possible, what works and what doesn't. As a 
result, when those institutions invest in computers, software, local 
area networks, and Internet connections, they will be able to do so 
wisely and efficiently.
    NTIA has safeguards to ensure that the TOP does not duplicate the 
efforts of other Federal programs. Each year, the NTIA Administrator 
uses the ``avoidance of redundancy and conflicts with the initiatives 
of other Federal agencies'' as a selection factor in making final grant 
award determinations. Program staff consult with staff at approximately 
30 other Federal agencies to ensure that TOP grants do not duplicate 
any of their efforts.
    With specific reference to the E-Rate program, note that in the 
1999 fiscal year, TOP gave no grants to K-12 schools and only one grant 
to a public library. In addition, language in the TOP's fiscal year 
2000 appropriation places clear restrictions on eligible costs for 
applicants that are recipients of Universal Service Fund discounts. The 
statute provides:

          That notwithstanding any other provision of law, no entity 
        that receives telecommunications services at preferential rates 
        under section 254(h) of the Act (47 U.S.C. 254(h)) or receives 
        assistance under the regional information sharing systems grant 
        program of the Department of Justice under part M of Title I of 
        the Omnibus Crime Control and Safe Streets Act of 1968 (42 
        U.S.C. 3796h) may use funds under a grant under this heading to 
        cover any costs of the entity that would otherwise be covered 
        by such preferential rates or such assistance, as the case may 
        be.

    Finally, a 1999 GAO study confirmed that there were no instances of 
duplication among any Federal programs, including TOP, that allow 
educational institutions to use funds for technology investments.

                          EDA INTERNET ACCESS

    Question. Has the Department looked at some of the creative ways 
states are wiring their towns without a major expenditure of funds? For 
example, in some states, prison inmates have been wiring schools and 
facilities. Why should EDA be giving out grants for this purpose? 
Shouldn't this be a state and local responsibility?
    Answer. EDA is just beginning to look at some of the creative ways 
states and local governments are using to install fiber-optic cable in 
schools and other facilities. It will give full and fair consideration 
to various types of proposals that economically distressed communities 
propose for installing the necessary and appropriate infrastructure, 
including equipment, that is needed for the deployment of broadband, 
high-speed Internet access. Since EDA's program responds to local needs 
and plans, and given that the primary focus of the e-commerce 
initiative is to assist distressed communities, and thereby their 
existing businesses, industries and institutions, become more 
technologically and globally competitive, EDA anticipates that it will 
fund a broad array of creative, public-private partnerships that are 
based on locally-developed strategies and that will assure that 
America's distressed communities are connected to the Internet.
    While the wiring of schools is important, this initiative will be 
focused primarily on the external infrastructure and facilities that 
are needed beyond the walls of schools, libraries, etc., in order to 
connect the whole community, and primarily the businesses of the 
community, to the global markets of commerce and trade. Given the 
speciality of this type of construction and equipment, e.g., wireless 
technology, we anticipate that various type of systems and public/
private partnerships will be used to provide broadband deployment in a 
variety of distressed communities that EDA's program is designed to 
serve.
    Just like other types of infrastructure--water and sewer systems, 
industrial parks, highways and bridges, port facilities, skill training 
facilities--state and local governments have the primary governmental 
interest in their construction, operation and maintenance however, some 
communities, especially economically distressed communities, can't do 
it alone, they need help in financing their infrastructure systems 
because their tax base and general revenues won't support the full 
funding at the local level.

             CRITICAL INFRASTRUCTURE PROGRAM

    Question. Can you outline and defend the Department's request for 
funds in fiscal year 2001 under the Presidential Decision Directives 62 
and 63.
    Answer. Emerging threats such as weapons of mass destruction (WMD) 
and cyber attack challenge traditional concepts of national security. 
Although the Department of Defense plays a key role, the leadership for 
protecting the Nation from these asymmetric threats rests with civilian 
agencies such as the Department of Commerce, the Department of Justice, 
and the Federal Emergency Management Agency because of their 
authorities and resident expertise. A comprehensive defense demands the 
participation of many agencies, including those involved in law 
enforcement, foreign affairs, health and emergency services, and more. 
The Administration has worked to define, strengthen, and coordinate 
each agency's contribution to this effort.
    Two Presidential Decision Directives (PDDs) provide strategic 
direction. PDD-62 created a new and more systematic approach to fight 
the emerging threat of WMD, clarify and coordinate the mission of the 
U.S. agencies charged with defeating terrorism. PDD-63 called for a 
national effort to assure the security of critical infrastructures. 
Both PDDs clarify the roles and responsibilities of the many U.S. 
agencies involved in the wide range of programs necessary to defend 
against WMD and protect our infrastructure. The Administration 
developed more specific guidance for agencies in its ``Five-Year 
Interagency Counter-Terrorism Plan'' and its ``National Plan for 
Information Systems Protection'' which includes the establishment of 
the U.S. government as a model of information security, and the 
development of a public-private partnership to defend our national 
infrastructures. The PDD-63 missions are of particular concern to the 
Department of Commerce.

Presidential Decision Directive (PDD)-63
    Pursuant to the PDD-63, the Critical Infrastructure Assurance 
Office (CIAO) was established on May 22, 1998. PDD-63, titled 
``Critical Infrastructure Protection,'' directs that a National Plan 
Coordination Staff (the CIAO) be formed to coordinate the government 
and industry-wide efforts to implement the provisions of the PDD. The 
CIAO coordinates the overall effort to write the National Plan for 
Information Systems Protection (The Plan), helps agencies identify 
their dependencies on critical infrastructure, conducts coordination on 
national education and awareness efforts, and assists the national 
coordinator with legislative and public affairs. Necessary follow-on 
actions to Version 1.0 of The Plan include the overarching strategy for 
government and industry cooperation relating to protecting 
infrastructures, development of a process to identify critical 
government systems, interdependencies between government systems, and 
dependencies of government systems on private sector systems.
    The CIAO has initiated a partnership and outreach program to engage 
(1) the critical infrastructure industries as supported by the lead 
agencies, (2) the business risk management communities, (3) the 
mainstream business community (including support for the National 
Infrastructure Advisory Council), (4) state and local governments, and 
(5) selected audiences representing the general public, including 
Congressional staff education. It has also developed a methodology for 
determining which programs within an agency are critical, determining 
the interdependencies between agencies, and the dependencies of these 
programs on private sector infrastructure. This methodology worked 
successfully in a pilot program in the Department of Commerce, and will 
be conducted at other agencies in the near future. Further, the CIAO is 
sponsoring a national education and awareness program targeted toward 
increasing public understanding and participation in protection 
efforts. The focus of the program will be to better inform the public 
about vulnerabilities resulting from interdependent networks, as well 
as facilitate methodologies to enhance academic opportunities relating 
to computer ethics and information security.
    Question. Can you provide additional information about total funds 
requested by the administration throughout the Government under the 
blanket of these presidential directives? Can you point to any law that 
authorizes these activities?
    Answer. There has been much interest expressed in the overall 
Government-wide efforts to implement the mandates of PDD-62 and PDD-63. 
With respect to the latter, many Federal agencies have developed their 
own specific requirements and have submitted funding requests for 
Critical Infrastructure Protection (CIP) activities accordingly. 
Overall, funding to combat terrorism has steadily increased over the 
past four years--up 40 percent to $9.1 billion--while funding for new 
missions such as WMD preparedness and CIP has doubled in that time. The 
fiscal year 2001 Budget proposes increases for each of these areas, 
bringing WMD defense to $1.6 billion and CIP to over $2 billion. These 
funds enhance ongoing efforts and launch new initiatives to strengthen 
our ability to deter and respond to attacks. Attached is a matrix 
reflecting Government-wide CIP funding by Department.
    PDD-63 reflects a Presidential decision about how to organize the 
Executive Branch to respond to critical infrastructure protection. In 
issuing PDDs, the President relies on his constitutional authority and 
existing statutory authority. Agencies use existing authorities to 
carry out activities covered by PDD-63. This decision was validated by 
the fiscal year 1999 Omnibus Appropriations bill, Public Law 105-277, 
where Congress appropriated money for this activity.

                          FUNDING FOR CRITICAL INFRASTRUCTURE PROTECTION BY AGENCY \1\
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                          Fiscal year--
                                                ----------------------------------------------------------------
                   Department                                                                            2001
                                                 1998 Actual  1999 Actual      2000         2000     President's
                                                                             Request      Enacted       Budget
----------------------------------------------------------------------------------------------------------------
Agriculture....................................         0.70         1.22         3.10         2.51        17.89
Commerce.......................................         9.35        21.81        43.18        17.75        92.10
Education......................................         3.59         4.45         5.23         5.23         2.51
Energy.........................................         1.50         3.60        47.22        21.98        45.30
EOP............................................         0.05         0.58         0.48         0.48         0.56
EPA............................................         0.12         0.24         0.08         0.08         2.30
FEMA...........................................  ...........  ...........         0.80         0.80         1.47
GSA............................................  ...........         3.00         8.40  ...........        15.40
HHS............................................        21.85        14.39        22.11        22.11        27.60
Interior.......................................         1.29         1.60         2.65         2.65         1.83
Justice........................................        25.61        54.09        63.80        44.02        45.51
NASA...........................................        41.00        43.00        66.00        66.00        61.00
National Science Foundation....................        19.15        21.42        32.85        26.65        43.85
National Security..............................       974.56     1,185.22     1,314.94     1,402.94     1,458.91
Nuclear Regulatory Commission..................  ...........         0.20  ...........  ...........         0.25
OPM............................................  ...........  ...........        13.65         2.00         7.00
Transportation.................................        20.33        24.88        53.50        50.68        99.34
Treasury.......................................        22.91        48.89        83.22        76.22        87.03
Veterans Affairs...............................  ...........  ...........        17.33        17.33        17.39
                                                ----------------------------------------------------------------
      Grand Total..............................     1,142.00     1,428.57     1,778,54     1,759.42     2,027.25
----------------------------------------------------------------------------------------------------------------
\1\ Includes Protection of Federal Infrastructure and Assistance/Outreach to Private Sector.

                      NIST/INFRASTRUCTURE PROGRAM
    Question. Mr. Secretary, this subcommittee will once again be faced 
with an extremely tight allocation and we must make sure that in 
creating new initiatives to protect our Nation's Critical 
Infrastructure that no duplication in effort occurs. There are many 
agencies such as the FBI, NSA, CIA and others who are currently 
operating information infrastructure programs. Will this I\3\P project 
overlap any current government efforts?
    Answer. Institute for Information Infrastructure Protection (IIIP) 
will not duplicate any government information infrastructure protection 
programs. The complex, extensive problem of information infrastructure 
protection requires close cooperation and assignment of 
responsibilities among several Federal agencies, and a close 
partnership between the private sector and government. The unique role 
of the IIIP will be to fund longer-term R&D (typically 3 years to 5 
years) to develop solutions for protecting the Nation's information 
infrastructure against possible future threats, as both the 
infrastructure and the threats become more sophisticated, complex, and 
extensive.
    No other Federal agency conducts such a program. As noted in the 
President's National Plan for Information Systems Protection, ``in R&D 
and other key technical areas, neither the private sector market 
demands nor agency mission objectives fully meet the Nation's 
requirements.'' The Institute will help fill this gap by supporting R&D 
that companies and government agencies will use to develop new products 
and services to protect America's information infrastructure.
    In designing the IIIP, NIST worked closely with President's 
Committee of Advisors on Science and Technology (PCAST), Office of 
Science and Technology Policy (OSTP), National Security Council (NSC), 
and Federal agencies to ensure that IIIP's mission and role complements 
efforts in other agencies and the private sector, and fills critical 
gaps in current information infrastructure protection programs. PDD #63 
and the National Plan for Information Systems Protection clearly and 
strongly identify the need for continuing R&D to develop information 
security solutions to protect the Nation's information infrastructure 
against current and future threats: ``The Federal Government shall, 
through its research, development and procurement, encourage the 
introduction of increasingly capable methods of infrastructure 
protection.''
    PDD #63 assigns lead responsibility for coordination of R&D to 
OSTP: ``OSTP shall be responsible for coordinating research and 
development agendas and programs for the government through the 
National Science and Technology Council.'' The plan for the Institute 
was developed in consultation with OSTP and NSC to help meet the 
Nation's information infrastructure R&D needs. This plan allows I\3\P 
to meets its objectives of working effectively and productively with 
the many public an private sector organizations concerned with 
information infrastructure protection.
    The IIIP will complement the information security roles of other 
Federal agencies without duplication. For example, PDD #63 assigns DoJ/
FBI with the lead responsibility for law enforcement and internal 
security, including deterring attacks against critical infrastructures. 
The IIIP will not have any direct role in law enforcement or deterring 
attacks, but will fund R&D to develop new generations of information 
security solutions that DoJ/FBI, other agencies, and the private sector 
could use to prevent and respond to future cyber-threats.
    Question. Could you please explain how duplication will be avoided 
and how cooperation and information sharing between agencies will work?
    Answer. As stated above, NIST designed the IIIP in close 
consultation with PCAST, OSTP, NSC, and other Federal agencies to 
ensure that the new Institute will fulfill its mission without 
duplicating the work of other Federal agencies. An interagency process 
exists to coordinate existing and planned Federal agency critical 
infrastructure protection R&D. This process, which has operated for two 
years, culminates in a coordinated R&D agenda, which will be available 
to IAP to ensure that the Institute's R&D does not overlap other 
Federal agency R&D programs. And NIST will continue working closely 
with Federal agencies, private sector leaders, and the Institute to 
keep it focused on its core mission and avoid duplication of efforts.
    Sharing research results from Institute-supported projects will be 
crucial to the success of the program, and IIIP will ensure that both 
Federal agencies and the private sector are fully informed of IIIP 
information. Classified information (including descriptions of 
strategic vulnerabilities) will not be publicly shared but will be 
shared with Federal agencies and other cleared organizations as 
appropriate.
    Question. What types of standards are being discussed and how will 
establishing standards protect our critical infrastructure? What 
criteria will NIST use to determine who will receive grants from the 
Institute?

Standards
    Answer. The goal of III is not to develop standards, although III-
supported work may lead NIST and other government agencies to develop 
standards, best practices, and guidelines for both Federal and private 
sector information infrastructure protection.
    NIST has requested a separate $5 million appropriation (``C.P. 
Research and Development'') to work with the private sector on 
developing standards, measurements, best practices, and guidelines for 
various information security applications, including cryptography, 
security management, best security practices, and security of 
supervisory systems that control building environments, manufacturing, 
provision of utilities, and other tasks. The C.P. Research and 
Development initiative is not directly related to IIIP. However, it is 
likely that III-funded R&D will become the basis of new standards, best 
practices, and guidelines developed by NIST, other agencies, and the 
private sector.
    Examples are appended of the types of information security 
standards and best practices work that NIST conducts for reference. But 
such work will not be funded by IIIP.

Criteria for project selection
    Projects will be funded through merit-based competitions open to 
U.S. companies, consortia, research institutions, universities, and 
non-profit organizations. All proposals will be peer-reviewed by teams 
of information technology and security experts. Proposals will be 
evaluated on criteria including technical merit, track record of the 
proposers, fit to the mission and goals of the IIIP, and anticipated 
impact on National information security.
    The Institute will support research in areas that are identified in 
close consultation with those in the private sector who manufacture, 
own, operate, and use information technology. The research will be 
conducted by those best qualified to carry it out, whether they be in 
private companies, universities, government laboratories, or other 
research facilities. Given the close and continuing relationship with 
the private sector that the Institute will have to maintain, the 
Administration is currently engaged in intensive discussions with 
representatives from the private sector and academia on the precise 
organizational structure and operational procedures for the Institute. 
The private sector Partnership for Critical Infrastructure Security is 
also providing its recommendations.
    IIIP expects that most proposals will be funded for approximately 3 
to 5 years, with funding provided on an annual basis contingent upon 
successful yearly reviews of project progress.

      ADDENDUM: EXAMPLES OF NIST INFORMATION SECURITY STANDARDS, 
                   MEASUREMENTS, AND BEST PRACTICES.

Recent Work and Ongoing Programs--Key Examples
    Security ``Best Practice'' guidance identification, development, 
and dissemination.
    Provide guidance to other agencies on how to protect their systems 
against hackers.
    Publish guidance documents that aid industry and government in 
securing their computers.
    Identifying trends in the discovery of vulnerabilities in order to 
guide industry in the prevention of the most common types of flaws.
    Creation of a database of threats to public computer systems that 
points to appropriate countermeasures.
    Web site that provides industry and government with computer 
security information on a broad variety of subjects.

Research and Development Activities--Key Examples
    NIST has underway R&D activities designed to enhance the security 
of the Internet and the national information infrastructure in the 
following areas: network architectures that resist denial of service 
and other forms of attack; automated testing of systems and network 
elements for security flaws; and secure protocols and automated testing 
methods for both the current and the Next Generation Internet (IPSE).

The Advanced Encryption Standard (ES)
    Standardization of interfaces to efficient and secure encryption 
algorithms to protect e-commerce and government transactions.
    Securing electronic commerce activities through Public Key 
Infrastructure (P.I.) and P.I.-Enabled Applications.
    More efficient and effective methods by which to evaluate the 
security of commercial products against known and emerging threats.
    Mobile agent systems to ensure secure use in e-commerce 
applications.
    Advanced access control architectures to allow efficient and 
effective control of organizational resources.
    Use of smart cards to enable higher security in e-commerce 
applications.
    Healthcare Security Project.
    NAP Security Specification Tool Project.
    NAP Telecommunications Security Project.
    Infrastructure Development and Protection
    These activities are helping establish the security services needed 
within the broader national information infrastructure (including the 
Internet) to combat hacking and other misuse.

Government P.I. Pilots
    Validation of commercial cryptographic modules against the NIST 
Federal standard (over 100 products validated).
    Work with industry and government to promote the development of a 
private sector IT security testing program within the United States.
    FedCIRC--Development and piloting the concept and operational 
requirements for a government-wide computer incident response 
capability. Now operational under GSA Common Criteria Evaluation and 
Validation Program.

                                  ATP

    Question. ATP carried forward into fiscal year 2000 $24.5 million 
for grants it could not make in the previous fiscal year. For fiscal 
year 2001, the Department is requesting an additional $65 million for 
new grants. Mr. Secretary, what is the status of the funding provided 
in previous fiscal years earmarked for new grants?
    Answer. ATP was not able to award all of the $66 million 
appropriated for new awards in fiscal year 1999. The balance carried 
over into fiscal year 2000 and the Conference Report for the fiscal 
year 2000 appropriation provided that these funds be used for this 
fiscal year's mortgages. ATP will award $50.7 million in new awards in 
fiscal year 2000 with its fiscal year 2000 appropriation.
    Question. What confidence do you have that the additional funding 
for grants you are requesting will be expended in the fiscal year it is 
appropriated?
    Answer. The ATP has aggressively expanded its outreach program in 
fiscal year 2000 to help potential proposers, particularly small 
businesses, understand the ATP selection criteria and competition 
structure and how to write a good proposal. As a start, the ATP held 
its National Meeting in November providing several opportunities to 
learn more about these issues. It was a huge success with about 1,000 
participants. The ATP has also intensified its state outreach effort in 
fiscal year 2000, engaging the 50 governors, state technology councils, 
economic development organizations and university research parks. In 
addition, ATP has revised its outreach materials to improve their 
clarity. ATP expects to award $50.7 million of new awards in fiscal 
year 2000 and $65 million of new awarded as requested in fiscal year 
2001.

                 NATIONAL TECHNICAL INFORMATION SERVICE

    Question. Mr. Secretary, what is the status of your proposed 
legislation to cease NTIS operations? What contingency plans has the 
Department developed in the event that authorization legislation is not 
approved?
    Answer. The Department's proposed legislation has been submitted to 
Committee and Subcommittee staffs. The proposed bill has not yet been 
introduced on the floor. We are urging both the Senate and the House to 
consider passing the legislation in conjunction with our fiscal year 
2000 Supplemental Request of $4.5 million in transfer funds from NIST.
    If our proposed legislation is not approved, NTIS is mandated to 
continue its functions and activities as a fee-funded entity. Under 
this scenario, NTIS would continue to operate, but would struggle to 
remain solvent.
    Question. Mr. Secretary, it has been alleged to us that line 
offices in ITA are being assessed for funds to cover the costs of the 
agency's execution direction--despite an appropriations line item for 
that purpose--could you tell us or report back to us whether this is 
the case?
    Answer. No, this is not the case. All funds to cover the costs of 
operating ITA's executive direction function (the offices of the Under 
Secretary, Deputy Under Secretary, Public Affairs, and Legislative and 
Intergovernmental Affairs) come from ITA's executive direction line 
item appropriation.

              RESEARCH IN SUPPORT OF THE AGENCY'S PROGRAMS

    Question. The increases in the fiscal year 2001 budget are not 
supporting the basic mission of the agency or increased research in 
support of the agency's programs, for example fisheries management, a 
major problem nationwide. Can you comment on any concerns you may have 
about the failure to increase funding for NOAA's research nationwide?
    Answer. The requested funding increases for fiscal year 2001 are 
within the stated mission goals of NOAA, i.e. environmental stewardship 
and prediction. In addition, the President's budget request does 
include increases for research, particularly in climate, mariculture, 
weather research, and Sea Grant. NOAA's request for fiscal year 2001 
will begin to address some areas of critical infrastructure to enable 
research to continue in the future.

                      EMPHASIS ON FUNDING PROGRAMS

    Question. Is not there too much emphasis on funding assistance 
programs in specific areas to the detriment of other areas of the 
country?
    Answer. In order to further our environmental stewardship and 
assessment missions, NOAA strives to allocate funds in a consistent 
manner to address National and regional needs. Our fiscal year 2001 
budget seeks a balance in funding programs by dividing resources 
equitably across the country, either through a formula-based approach 
or based on specific needs in the region.
    Various assistance programs, such as the Coastal Zone Management 
Program, address the needs of the majority of eligible coastal states 
and territories (33 of the 35 coastal states and territories).
    NOAA, at times, also acts in response to natural and environmental 
disasters and directs funds to specific areas of the country. For 
example, funding is requested as emergency spending in fiscal year 2000 
to provide assistance to Connecticut, New York, Florida, North 
Carolina, Washington, Oregon, and Georgia. Assistance is necessary as a 
result of recent hurricane and declared fishery disasters. Our fiscal 
year 2001 request as well includes funds to address the outbreak of 
harmful algal blooms experienced in specific regions of the country, 
hypoxia in the Gulf of Mexico, and restoration of the South Florida 
Ecosystem.

              PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

    Question. Has the Department had discussions with the Corporation 
for Public Broadcasting (CPB) about digital conversion and how 
realistic it is to expect all stations nationwide to be broadcasting 
digitally by 2003?
    Answer. NTIA has had continuing discussions with the Corporation 
for Public Broadcasting about digital conversion. These discussions 
have addressed the system as a whole but have not addressed the status 
of individual stations. The Administration's goal and the industry's 
goals are the same; we want to ensure that all public television 
transmitters are converted to digital by fiscal year 2003. As a whole, 
the public television stations are making great efforts to meet the 
deadline. At this point, it appears that the primary obstacle to 
meeting the 2003 deadline is the raising of the hundreds of millions of 
dollars required to complete the process.
    PTFP recently received detailed digital conversion proposals from 
over 100 of the 175 public television licensees. These stations are 
requesting over $200 million in funds that would be matched by over 
$260 million in non-Federal funds. The Federal amount requested 
includes $100 million for fiscal year 2000 and the balance for future 
years. Based on industry demand for grants, we believe that if funding 
is available, public stations will be able to meet the FCC's schedule. 
Congress and the Administration must deliver the Federal share of 
funding in order to accomplish the conversion in a timely manner.
    Question. How much is the Corporation for Public Broadcasting 
funding the conversion? Is all assistance for equipment conversion 
expected to come from the PTFP program, or is CPB requesting funds to 
assist stations?
    Answer. The Administration has requesting $450 million for the 
digital conversion initiative which includes $355 million for PTFP and 
$95 million for CPB covering fiscal years 1999-2003. Funding through 
PTFP will primarily be for the basic equipment necessary to pass 
through and transmit a digital signal. The Administration envisions 
that funding through CPB will be for digital program production, 
development, and distribution. CPB has an appropriation of $10 million 
in fiscal year 2000 that requires authorization from Congress and is 
requesting $85 million for CPB over fiscal year 2001-2003 as part of 
the initiative.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

                      BEA'S E-COMMERCE INITIATIVE

    Question. Mr. Secretary, it is crucial that policymakers have the 
most accurate economic data possible. This is particularly the case for 
budgeting. We use Bureau of Economic Analysis (BEA) data for 
constructing our baseline. If this data is off, it can have an enormous 
effect on our numbers.
    Here's an example. Last year, there was a notable upward revision 
to BEA's wage and salary data. If this represents persistent under-
measurement, federal tax revenues would be understated by more than $70 
billion over the next 5 years. This is enormous.
    I'd like to close by making an observation. Yesterday, Chairman 
Greenspan said spending on economic data is one of the few types of 
spending he supports unreservedly. I concur and believe it is very 
important that BEA receives its full budget request this year--for both 
ongoing operations and its new e-commerce initiative. I believe the 
potential dividends would be enormous.
    I am concerned that BEA's data responsibilities are becoming even 
more difficult, in light of ongoing changes in our new economy. I 
understand that you have proposed an initiative to enhance BEA's 
understanding and measurement of e-commerce. Could you tell me a bit 
about this?
    Answer. In recognition of the growing complexities of the economy, 
BEA proposed a multi-year project to update and improve its statistical 
accounts. Due to budgetary constraints, BEA is behind schedule in its 
plan to update and improve its economic accounts and incorporate e-
business into them. As a first step to identifying e-business, BEA will 
update these accounts. In fiscal year 2001, BEA will develop new Gross 
Domestic Products (GDP) computer processing systems that fully 
incorporate recent e-business-related improvements in the GDP accounts. 
This will include new measures of computer software, new measures of 
electronic and other banking services, and expanded chain index 
information. These improvements will provide the infrastructure needed 
to accurately account for e-business. In addition, BEA will begin to 
address gaps in key e-business-related components of GDP, gross 
domestic income, quality-adjusted prices, and international trade, 
improving its ability to measure e-business and alleviating some of the 
serious problems plaguing the GDP and other economic accounts.

              EFFECT OF NOT FUNDING E-COMMERCE INITIATIVE

    Question. What will happen if BEA doesn't get the $3 million in e-
commerce funds it has requested for fiscal year 2001?
    Answer. In order to maintain the quality of the GDP and trade 
statistics, BEA would have no choice but to either decrease the 
frequency at which it reports updates, such as the quarterly GDP data 
that now is updated every month, or delay the collection and production 
of other data, such as foreign direct investment data for U.S. and 
foreign multinationals.

          LACK OF INCREMENTAL FUNDING FOR QUALITY IMPROVEMENTS

    Question. Since the Boskin Initiative in the early 1990's, has BEA 
received any incremental funding to allow it to maintain the quality of 
the GDP statistics in the face of the unprecedented economic growth and 
the explosion of e-commerce we've seen since then?
    Answer. No, BEA has not. Its funding has decreased in real terms 
since 1993, putting real resources this year at roughly the level 
provided in 1992. With about 70 percent of its funding going to 
personnel costs and half the remainder to computer support, BEA is now 
undergoing a hiring freeze to ward off a projected budget deficit in 
the current year.

             MAINTAINING STANDARDS WITHOUT BUDGET INCREASES

    Question. Given that BEA has experienced shrinking real budget 
resources since 1993, how can it have kept up with the impressive 
standards of the Department of Commerce as the prototype ``Digital 
Department?''
    Answer. In past years, BEA eliminated several lower-priority 
programs--including leading indicators, pollution abatement and 
control, and regional projections--and reallocated those resources to 
its core economic accounts programs. That enabled BEA to continue 
making progress, albeit at a slower pace than originally expected, in 
its plan to improve GDP and the other economic accounts. Now only its 
core programs remain. Although its web-site dissemination of GDP and 
other data is often praised, that dissemination is not at the state-of-
the-art level. For example, the massive ``benchmark revision'' release 
of updated GDP accounts in October 1999 (a once-every-5-years event) 
revealed critical weaknesses in both the estimation and dissemination 
software on which BEA relies. The $3 million budget increase for fiscal 
year 2001 is necessary for BEA to overcome these problems.

                   FUNDING FOR DATA ON GLOBAL ECONOMY

    Question. Demands of the newly globalized economy of the 1990's 
have brought the need for more economic data. For example, the IMF has 
promulgated requirements for more-detailed data on international 
capital flows; and the Bank for International Settlements is calling 
for more data on financial derivatives. Has BEA been provided funding 
to respond to those new demands?
    Answer. Although, BEA has not been provided with additional funding 
to respond to those and other calls for new data, BEA has responded by 
employing its resources to meet the request. This is not, however, a 
long term response and additional resources will be needed to continue 
this level of reporting.

                   EMERGENCY OIL AND GAS LOAN PROGRAM

    Question. Last year the Congress enacted the Emergency Oil and Gas 
Loan Guarantee Program. Applicants were given less than 6 weeks during 
the holiday season to find a bank and process a loan under the program. 
Not surprisingly, only 19 companies seeking $56 million were able to 
complete all of the necessary paper work in this short period of time.
    Does the Board intend to modify the regulations in order to attract 
applications from more small oil and gas producers and service 
companies?
    Answer. As background, the Emergency Oil and Gas Guaranteed Loan 
Program Act was signed into law on August 17, 1999. The Guarantee Loan 
Board issued the program regulations 60 days later on October 18, 1999. 
In recognition of the program's ``emergency'' designation, the Board 
established a ten-week application window which ran from October 18, 
1999 to December 30, 1999. However, when alerted by outside 
stakeholders that potential applicants needed more time, the Board 
twice extended the application deadline, first to January 31, 2000, and 
then subsequently to February 28, 2000 to allow additional applicants 
to apply. In total, the application window has been open for over four 
months. At the close of the February 28 application deadline, the Board 
had received 23 applications requesting $68.2 million.
    Specifically, in current market conditions, the Board has no 
intention of substantially modifying the program's regulations. The 
Board will, however, consider amending the regulations if market 
conditions change and additional application windows are opened. Any 
such adjustments, however, will be made in keeping with the 
Congressional mandate to provide support for sound, quality commercial 
transactions. It is the position of Board staff that the primary 
challenge for the program is not the content of the current 
regulations, it is the ability to attract qualified lending 
institutions.
    Question. Is the Board processing the applications received to date 
and when does the Board expect funding of those applications?
    Answer. All applications to the program will be reviewed and 
processed functionally at the same time. This ``batch-processing'' 
approach is set up in order to balance all applications and allocate 
guarantees based on comparative credit quality. Board staff initiated 
the review process on the applications when received and expects to 
have formal responses ready within 60-90 days of the final application 
deadline. The Board understands the urgency associated with the 
application requests and will work diligently to respond in a timely 
fashion.
    Question. Why didn't the Board process the applications received by 
the 1/31/00 deadline?
    Answer. All applications will be reviewed and processed 
functionally at the same time in order to balance all applications and 
allocate guarantees based on comparative credit quality.
    Question. Many small companies have had difficulty identifying 
banks which are interested in making smaller loans (i.e. less than $25 
million)?
    Answer. A necessary ingredient to the success of this type of 
program is the involvement of the funding party, the commercial banks. 
It became clear to Board staff early into the process that most of the 
more significant and experienced domestic-energy lending institutions 
were not interested in participating. This was due to a combination of 
declared factors, among others: the $10 million loan size limitation; 
newness of and unfamiliarity with the program (the ``fear of the 
unknown''); a reluctance to deal with any government program; the 
requirement to retain risk on a pari passu basis with the government. 
As a result, it has become very difficult for potential borrowers to 
find willing and able lenders.
    Question. Is the Board willing to simplify the process and assist 
companies in identifying participating lenders?
    Answer. Board staff has attempted to engage the energy lending bank 
market through industry meetings, face-to-face visits and liaisons 
through trade associations. Despite these ongoing efforts, there 
remains a rather clear lack of enthusiasm to participate.

              PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

    Question. Secretary Daley, I am pleased to see that the 
Administration's fiscal year 2001 budget does not again propose to 
terminate or significantly reduce funding for the Public 
Telecommunications Facilities Program (PTFP), which provides grants to 
public radio and TV stations for equipment. The PTFP program was funded 
at $15.25 million in fiscal year 1997; Congress provided $21 million 
for each of fiscal year 1998 and fiscal year 1999, and $26.5 million is 
approved for this year.
    Mr. Secretary, I have been a longtime supporter of the PTFP because 
it is an important source of funding to rural states like New Mexico. 
PTFP grants enable local broadcasting stations to provide quality 
programming to populations that are generally under served.
    The budget includes $110.1 million for PTFP for fiscal year 2001, 
an increase of $83.5 million above 2000. The request represents a 
quadrupling of the program with the significant increase to assist 
broadcasters with the purchase of digital equipment as we approach the 
2003 conversion date. The Subcommittee approved a $5.5 million increase 
for this year to assist in this conversion, but also to assist rural 
broadcasters not yet ready for conversion to digital technology. How is 
the Department implementing the Committee's guidance for this year?
    Answer. NTIA is committed to preserving the current public 
television services provided by analog stations during the transition 
to digital technology, especially those stations in rural areas. The 
program will continue to fund the replacement of obsolete equipment 
with the current appropriations. Over the past decade, however, 
broadcast technology has made an almost complete transition to digital. 
As a result, NTIA's funding of equipment to maintain current services 
almost always results in the purchase of broadcast equipment which is 
digital or digital compatible. Current technology also allows stations 
to purchase a broadcast transmitter which broadcasts both an analog and 
digital signal. Nevertheless, NTIA continues to support the purchase of 
pure analog equipment when such equipment is required to maintain 
existing broadcast service.
    NTIA's budget anticipates considerable demand for digital 
conversion projects during this fiscal year because of the mandatory 
date for conversion to digital transmission for all television 
stations. Rural stations, however, lack the large populations to raise 
the private funds necessary to convert to digital technology. The 
difficulty in obtaining matching funds for the conversion of stations 
in rural areas is being addressed by the PTFP program.
    To ensure that the needs of rural areas are satisfied, several 
grant policies for the PTFP program have been revised to assist rural 
stations and their conversion projects. For example, NTIA grant policy 
now recognizes that many small (often rural) public television stations 
will have difficulty in raising local funds for digital television 
conversion projects. Therefore, as part of the PTFP application process 
for fiscal year 2000, NTIA will permit small stations to qualify for 67 
percent Federal funding for their digital conversion projects. This 
level of Federal funding is significantly greater than the norm of 40 
percent for digital conversion projects funded by the PTFP.
    For fiscal year 2000, NTIA instituted the acceptance of multi-year 
applications for digital conversion projects. The acceptance of multi-
year applications will assist smaller public television stations who 
cannot raise the local portion of their project in a single year or who 
need more time to complete their digital conversion projects. Multi-
year applications will permit stations to spread out their digital 
conversion project over several years so they can complete their 
digital conversion projects as they raise local funds.
    NTIA is also permitting all stations to include equipment 
replacement as part of a digital conversion project. This change will 
help stations to begin their digital conversion projects through phased 
upgrade of their facilities.
    In many rural states, public television stations are operated by 
state agencies or state universities. Several state legislatures have 
appropriated funds to assist the public television stations in their 
state with their digital conversion projects. State funds often must be 
obligated by the end of the fiscal year, and NTIA has revised its 
policies so that state or local matching funds obligated during the 
current fiscal year for digital conversion will remain eligible for 
Federal funding in future phases of multi-year projects.
    NTIA also set July 1, 1999, the start of many state fiscal years, 
as the applicable date for which local funds could be expended towards 
applications submitted for the fiscal year 2000 grant cycle.
    NTIA believes that these actions will greatly assist public 
television stations serving rural areas in completing their digital 
conversion projects as well as preserving analog service during the 
transition.
    Question. How is the $26.5 million approved for this year being 
allocated?
    Answer. PTFP's grant applications were received in February and 
awards will be made in September. At this point, it is not possible to 
anticipate how the funds will be allocated. NTIA does not allocate 
grant funds, for specific types of projects, until it can review the 
applications taken as a whole and respond to station needs as contained 
in their requests. During the most recent cycle, NTIA awarded almost 80 
percent of the $21 million in fiscal year 1999 funds to television 
grants, almost all of which purchased digital equipment. The remaining 
20 percent were awarded to radio and distance learning projects.
    Question. How much of the $5.5 million increase is being devoted to 
digital conversion? Was any of this funding used to assist rural 
broadcasters not yet ready for digital conversion?
    Answer. NTIA anticipates that most of the additional $5.5 million 
will be devoted to digital conversion projects. NTIA will ensure that 
the needs of rural stations are met to preserve their analog service 
and help them begin the transition to digital service. The budget 
increase that is requested and changes to the program's fiscal year 
2000 grant round will help stations from rural areas in meeting the 
digital conversion mandate.
    Question. The budget justification documents indicate that the 
Administration expects the additional $83.5 million ``to continue . . . 
assisting broadcasters with the purchase of digital broadcasting 
equipment needed to meet the Federal mandate to convert to digital 
transmission by 2003.'' Am I correct that the Administration's budget 
supports the basic PTFP program at approximately the existing level of 
$26.5 million for the next fiscal year?
    Answer. The Administration's request for the PTFP program, both the 
base program and the additional funds, supports its traditional 
mandate--to extend public broadcasting service to unserved areas and to 
strengthen the capability of existing public radio and television 
stations--and assist stations with the rapid transition to digital 
formats called for by the 2003 time limit. Over the past decade, 
broadcast technology has made an almost complete transition to digital. 
As a result, NTIA's funding of equipment to maintain current services 
almost always results in the purchase of broadcast equipment which is 
digital or digital compatible. The additional funds are necessary to 
ensure that all stations purchase the basic equipment necessary to meet 
the Federal Communication Commission (FCC) time line for broadcasting a 
digital signal.
    Question. How much does the Administration budget assume will be 
needed for the administrative costs for the ongoing PTFP program?
    Answer. The PTFP program would require $2.5 million to adequately 
administer the grant program in fiscal year 2001 at the fiscal year 
2000 budget level. The fiscal year 2001 budget includes $4.1 million 
(less than 4 percent of the budget) to administer the PTFP grant 
program. This level of funding is required as the program expects a 
large increase (more than 80 percent) in the number of applications to 
be reviewed and in the ongoing oversight of the grants awarded.
    Question. Are those funds included in the salaries and expenses 
account for NTIA, or are they assumed to come out of the overall $25 
million provided for PTFP grants?
    Answer. Funds to administer the program are included as a separate 
line item in the appropriation for the PTFP account. In fiscal year 
2000, PTFP was appropriated $26.5 million, which included $1.8 million 
for program administration. NTIA's salaries and expenses account does 
not include funding for PTFP's administration.
    Question. The Administration again proposes that PTFP work ``in 
coordination with the Corporation for Public Broadcasting (CPB),'' on 
digital conversion. Originally, the Administration proposed that the 
digital conversion program be funded through CPB. What is the rationale 
for providing these funds through PTFP rather than the larger CPB?
    Answer. For the past several years, NTIA has worked closely with 
the CPB and other national public broadcasting organizations to assist 
public television with conversion to digital broadcasting. The 
Administration initially proposed for fiscal year 1999 that CPB manage 
the entire digital transition program. The Administration, however, 
transferred the funding for transmission equipment from CPB to PTFP in 
the fiscal year 2000 budget to ensure that grants are awarded on PTFP's 
competitive (need- and merit-based) basis rather than CPB's formula-
based allocation.
    PTFP has a proven record of assisting public broadcasters with 
facilities purchases. For over 35 years, the program has funded 
projects that extended the delivery of public telecommunications 
services to over 95 percent of the American public and strengthened the 
capabilities of existing public television and radio stations. Over the 
past six years, the PTFP program has been funding digital equipment as 
part of public television's and radio's funding requests.
    In the 2001 Budget, the Administration has retained funding for the 
digital transition program in both the PTFP and CPB budgets for fiscal 
years 2001-2003. The Administration still expects CPB and PTFP to work 
together in helping public broadcasting complete the transition.
    Question. The budget also proposes advanced appropriations of $110 
million in fiscal year 2002 and $87.5 million in fiscal year 2003 for 
the digital conversion program. Is the Administration's current 
estimated cost for public broadcasters to make the transition from 
analog to digital broadcasting the $307.6 million proposed in this 
budget, or are there other costs associated with this initiative?
    Answer. The Administration's budget for public broadcasting's 
digital conversion initiative includes $307.6 million for PTFP and 
approximately $85 million for CPB covering fiscal years 2001-2003. The 
PTFP program has been assisting stations with their digital conversion, 
and at this stage in the digital conversion process, the additional 
$392.6 million for Federal support is reasonable. The Administration's 
initiative estimates that it will cost public television stations over 
$700 million to meet the FCC's May 2003 time line to begin digital 
broadcasts. Accordingly, stations will contribute several hundred 
million dollars to match PTFP's planned funding.
    Question. Does the budget request anticipate that PTFP in making 
grants for digital conversion will include public broadcasting entities 
other than those participating in the PTFP program?
    Answer. All public television stations in the United States are 
eligible to apply to the PTFP program for Federal matching funds and we 
anticipate that, over time, all stations will use the PTFP program to 
assist with their digital conversion.
    Question. These grants have been characterized as ``competitive,'' 
but this year the budget also indicates that these grants will also 
have to be matched. What criteria does the Department plan to use in 
making these awards competitively? What is the anticipated matching 
requirement?
    Answer. The PTFP program has always been a competitive grant 
program that required matching funds from grant recipients for 
equipment replacement projects. Under its authorizing legislation (47 
U.S.C. 390-393), PTFP can award no more than 75 percent of the eligible 
project costs for equipment projects.
    The criteria that the Department of Commerce uses to make awards 
are contained in the PTFP Final Rules as published in the November 8, 
1996 Federal Register (Vol. 61., No. 218, page 57966) as supplemented 
in the fiscal year 2000 Notice of Availability of Funds published in 
the December 23, 1999 Federal Register (Vol. 64, No. 246, p. 72225). 
These documents are made available to all potential PTFP applicants 
through the Internet or by printed copy.
    The process for selecting digital conversion awards can be briefly 
summarized as follows:
  --Digital conversion applications are placed into one of three 
        priority categories based on the availability of a digital 
        public television signal or the cooperative efforts of 
        stations;
  --the applications are then reviewed by a panel of at least three 
        peer reviewers on the basis of six evaluation criteria: 
        applicant eligibility, financial and technical qualifications, 
        project objectives, urgency, and participation in the project 
        by minorities and women;
  --the program also receives input from: staff and technical 
        assessments, State Single Point of Contact offices, state 
        telecommunications agencies, a national advisory panel composed 
        of representatives of major national public broadcasting 
        organizations, and public comments; and
  --NTIA then determines awards by applying selection factors, which 
        include the panel and staff reviews, type of project, 
        priorities, whether the applicant has any current NTIA grants 
        that might affect the proposed project, geographic distribution 
        of awards, availability of funds, whether the FCC is prepared 
        to issue a required authorization and the degree to which the 
        slate of applications, taken as a whole, satisfies the programs 
        purposes as stated in the Final Rules.
    The matching requirement is based on a station's ability to raise 
local funds. In the Notice of Availability of Funds mentioned earlier 
in this answer, NTIA established a three step matching requirement for 
digital conversion projects. As part of its revisions in the PTFP 
application process for fiscal year 2000, NTIA will permit smaller 
stations, primarily in rural areas, to qualify for 67 percent Federal 
funding for their digital conversion projects if they can demonstrate 
hardship. These stations must demonstrate that annual cash revenues for 
the previous four years is less than $2 million or the project costs 
are greater than the applicant's average annual cash revenue for the 
previous four years. This level of Federal funding is significantly 
greater than the 40 percent Federal funding which will be the norm for 
digital conversion projects funded by the PTFP. NTIA will encourage 
other stations to reduce their reliance on Federal funds by awarding 
additional credit on the scores of applications that only request 
matching Federal funds of 25 percent or less. The Notice of 
Availability of Funds, however, pledges that NTIA will ensure that 
there is an acceptable balance between stations that request a 25 
percent Federal share and those requesting 40 percent or 67 percent.
                                 ______
                                 
           Questions Submitted by Senator Ernest F. Hollings
                              CENSUS 2000
    Question. Is the Commerce Department taking any steps to get 
reimbursed from the contractor who made such a grievous error, or at 
least a reduced rate?
    Answer. The Department of Commerce is not taking any direct steps 
with this incident. The Government Printing Office (GPO) is 
investigating this incident because the work was performed under a GPO 
contract issued on behalf the Department. When GPO completes its 
investigation, we fully expect the GPO will take the appropriate steps, 
which may include reducing the payments under the contract. GPO 
recently sent a letter to the contractor requesting a written 
explanation of why the defect occurred and indicated the Government may 
reduce the invoice billing.
    Question. Is there any quality control system within the federal 
procurement system to identify this contractor with this major error?
    Answer. We have been told that the GPO will take this incident and 
the results of their investigation into account in considering future 
print work awards. In a recent letter to the contractor, the GPO 
requested a written explanation of why the defect occurred and the 
steps being taken to assure that this problem will not reoccur in 
future procurements.
    Question. Will the same contractor be conducting additional 
mailings for the census in the future?
    Answer. In addition to printing the advance letter, the contractor 
did complete other Census 2000 printing work, including the 
experimental forms, the Update/Leave Short Form (Spanish) for Puerto 
Rico, the Update/Leave Short Form (English), and other language short 
forms. We have sampled these other products and no similar defects were 
found. This printer is not scheduled to do any future Census 2000 
printing.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

           DEPARTMENT OF THE INTERIOR'S MARINE RESOURCE ROLE

    Question. The Department of the Interior is continuing its efforts 
to expand its role in the conservation and management of marine 
resources. While I appreciate the additional financial resources the 
Interior Department is willing to dedicate to this effort, particularly 
in the area of coral reefs, I am concerned about Interior's efforts to 
exert exclusive jurisdiction over these resources to the exclusion of 
the Department of Commerce.
    For example, the Interior Department is urging the President to 
issue an Executive Order to extend Interior's jurisdiction around the 
Northwest Hawaiian Islands, which are part of the Northwest Hawaiian 
Islands Refuge Complex administered by the Fish and Wildlife Service, 
out to twelve miles. I understand that the Interior Department is 
considering superseding the Commerce Department's jurisdiction under 
the Magnuson-Stevens Act over fishery resources by prohibiting 
commercial fishing activities in these areas. The Interior Department's 
proposal has major implications beyond just the Northwest Hawaiian 
Islands (NWHI). Some would argue that this is the first step toward 
dismantling the National Marine Fisheries Service (NMFS). I would like 
to know the extent of your involvement in these discussions and the 
position you are taking on Interior's efforts to expand its 
jurisdiction over marine resources.
    Answer. There has been ongoing discussions in Hawaii and in 
Washington D.C. about the Interior Department's interest in extending 
management authority around the NWHI. NOAA (e.g., Magnuson-Stevens Act, 
National Marine Sanctuaries Act, and Marine Mammal Protection Act) have 
serious concerns with the concept, both because it could conflict with 
Commerce Department's exclusive fishery management jurisdiction under 
the Magnuson-Stevens Act and because the same conservation objectives 
can be achieved using the existing authorities of the Department of 
Commerce and the Management Council. Imposing an additional and 
potentially conflicting authority for managing living marine resources 
could negatively impact marine resource access and management.
    Both the Department of Commerce and the Department of the Interior 
are discussing ways to improve management of living resources in the 
NWHI. For example, the WPFMC is committed to implementing a 
comprehensive Coral Reef Ecosystem Fishery Management Plan for the 
NWHI. The plan development process has involved all interested agencies 
and constituent groups, including the U.S. Fish and Wildlife Service 
(USFWS). Imposing a different management regime under a new management 
authority at this time could seriously damage progress towards 
constituent consensus on the conservation and management of important 
resources in this area.
    Background: The Department of the Interior has responsibility for 
two National Wildlife Refuges (NWR) in the region. The Northwest 
Hawaiian Islands NWR was designated in 1909 and consists of 1,766 acres 
of emergent land and 610,148 acres of submerged lands; Midway Atoll NWR 
was established initially as an overlay refuge in 1988 to assist the 
Navy in managing its unique wildlife resources, and transferred to the 
USFWS in 1996. Midway Atoll NWR includes 1,549 acres of emergent land 
and 296,820 acres of submerged lands. A significant portion of the 
refuge submerged lands are within the 0 to 3 mile state jurisdiction. 
For the most part, the USFWS has not had fishery management expertise 
or activity in the NWHI. A limited catch and release recreational 
fishery has been allowed in the Midway Atoll NWR since tourism 
activities began there. Until recently, USFWS also had very limited 
coral reef activities in the refuges, but has recently added a coral 
reef expert to its Hawaii staff and advertised several additional 
positions.
    Under the Endangered Species Act, NMFS has responsibility in the 
NWHI for the protection of the endangered Hawaiian monk seal and 
threatened and endangered sea turtles when they are in the water as 
well as other marine mammals under the Marine Mammal Protection Act. 
Commercial and recreational fisheries are currently managed under three 
Fishery Management Plans (FMPs): the Crustacean and Lobster, 
Bottomfish, and Precious Coral. NMFS, through its Honolulu Laboratory, 
has been the main scientific presence doing coral reef and fisheries 
research in the NWHI since the formation of NOAA in the 1970s.
    While NOAA exercises fisheries management jurisdiction over 
managing living marine resources in the three to two hundred mile U.S. 
exclusive economic zone, NMFS and USFWS have collaborated 
constructively on a number of non-management related activities in the 
NWHI. A recent example is the NWHI debris clean-up which was led by 
NMFS but included significant collaboration by the State of Hawaii, 
Coast Guard, USFWS, and the Center for Marine Conservation and National 
Ocean Services (Hawaii Humpback Whale National Marine Sanctuary). NMFS, 
USFWS and other partners have proposed new joint monitoring activities 
on reefs in the NWHI in fiscal year 2001. NMFS values this 
collaborative relationship.
    The Marine Mammal Commission, the Monk Seal Recovery Team, and the 
NMFS Office of Protected Resources have identified a number of issues 
related to existing and planned fisheries that should be addressed to 
enhance the recovery of the endangered monk seal and ensure the 
continued protection of the NWHI outstanding coral reef resources. 
These include additional no-take reserve areas where fisheries are 
excluded. NMFS believes that the necessary actions could be taken by 
the Western Pacific Fishery Management Council under existing authority 
of the Magnuson-Stevens Act.

                 ENVIRONMENTAL IMPACT STATEMENT BACKLOG

    Question. I am very concerned about the National Marine Fisheries 
Service's (NMFS) backlog of Environmental Impact Statements (EIS). In 
some cases, the NMFS's failure to complete EIS's in a timely manner has 
led to court ordered closures of fishing areas, causing great economic 
hardship on domestic fishermen.
    What is the Department doing to ensure that the most critical of 
these EIS's are completed? What additional resources are needed to 
assist you with these efforts?
    Answer. Through NMFS, the Department of Commerce is working to 
complete or revise a number of Environmental Impact Studies, including 
some for Northeast scallops, west coast salmon fisheries, Alaskan 
groundfish, and in the western Pacific, along with Environmental Impact 
Studies for pelagic fish, bottom fish, crustacean fisheries, and coral 
reef ecosystems. The fiscal year 2001 request continues our current 
level of effort for these activities.

                    ECONOMIC ASSISTANCE TO FISHERMEN

    Question. What options are available to provide economic assistance 
to fishermen who are economically harmed by the closures resulting from 
NMFS's inability to complete EIS's in a timely manner?
    Answer. Under programs administered by such Federal agencies as the 
Economic Development Administration, Small Business Administration, the 
Department of Labor, impacted fishermen or communities may qualify for 
various types of economic assistance. NMFS currently does not have 
programs or funding to provide direct economic assistance to fishermen 
for losses from a fishery closure due to an incomplete or insufficient 
Environmental Impact Study.

                             SHARK FINNING

    Question. Similarly, I would like to know what options may be 
available to assist fishermen who are economically harmed by the 
Commerce Department's policies which lead to area closures or the 
prohibition of certain fishing practices, such as shark finning.
    Answer. As in the response to the previous question, there are 
Federal programs within the Economic Development Administration, Small 
Business Administration, Department of Labor, etc. that could assist 
fishermen and affected communities as a result of necessary 
prohibitions on certain types of fishing through loans, job retraining, 
community planning, or other forms of direct assistance. In addition, 
the fiscal year 2001 request includes a new $10 million Fisheries 
Assistance Fund within NOAA that is available to communities around the 
Nation. The funds would support buyouts and cooperative research and 
management.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

           EFFECT OF E-COMMERCE INITIATIVE ON SMALL BUSINESS

    Question. Secretary Daley, I understand that you have created a 
package of new initiatives which are designed to accelerate the e-
commerce revolution for our small business owners. Could you elaborate 
on how this initiative will improve the efforts of America's small 
business owners to compete in the e-commerce driven economy? Since this 
initiative covers various bureaus within the Department of Commerce, 
each bureau that is affected follows:
Census
    Answer. The e-commerce market is estimated to be worth more than 
$300 billion annually. During calendar 2000 the Census Bureau will 
publish quarterly estimates of retail sales occurring over the 
Internet. Although there are many large nationwide retailing companies 
in the United States, it is still a fact that most retailers are small 
businesses. The Census Bureau data will give small retailers a reliable 
indication of the magnitude of Internet selling, thereby helping them 
determine whether they might enter into retailing over the Internet. 
During calendar 2000, the Census Bureau will also collect data on 
Internet activities through its annual surveys of retailing, 
wholesaling, manufacturing, food and accommodations, and the services 
sector. Results of these surveys will be released in early 2001. While 
much of the attention to e-commerce has focused on business to consumer 
activity, it is widely recognized that the largest share of e-commerce 
will occur in business to business activity. The Census Bureau data 
will give small businesses benchmark measures of a broad range of e-
commerce activities. This information should help small businesses 
contemplating entering e-commerce craft strategies about how to operate 
in the Internet world.
    Census Bureau plans include a $8.5 million initiative to fund a 
comprehensive electronic business measurement program. This new program 
will keep Census economic statistics accurate and relevant, demonstrate 
to the business community and policymakers that our programs are 
responding to fundamental changes in our economy, improve the quality 
of BEA's National Income and Product Accounts, reduce business 
reporting burden by 5 percent in fiscal year 2002 and 10 percent in 
fiscal year 2003, and cut Economic Census data collection and 
processing costs by $4 million in fiscal year 2003.

Bureau of Economic Affairs
    Funding for the e-commerce initiative will enable Bureau of 
Economic Affairs (BEA) to improve and update its GDP and other economic 
accounts and to provide a more accurate and comprehensive picture of 
economic activity, including e-commerce. BEA's national, regional, and 
international accounts provide business people, as well as governments 
and households, with the essential economic information they need to 
make informed decisions. Our initiative will allow us to better monitor 
and understand the impacts of e-commerce on small businesses, thereby, 
providing government officials with the information they need to make 
better policy decisions concerning small businesses.

Minority Business Development Agency
    First, the Minority Business Development Agency (MBDA) is 
demonstrating leadership to the minority business community by using e-
business practices in its internal and external operations. Because 
MBDA has Internet and extranet capabilities, the Agency is able to 
provide both MBDA staff and the minority business community information 
resources to function more effectively. In addition, an advanced 
information technology infrastructure of hardware and software supports 
electronic communications and transactions among staff, field offices, 
grantee organizations and the public.
    MBDA also is using information technology as the primary mechanism 
for creating and distributing services to minority businesses. An e-
commerce course has been developed for minority executives. Desktop 
software is available in selected business development centers to 
provide sophisticated market research.
    E-commerce tools that are being made available to support MBDA's e-
business practices are:
  --The Phoenix-Opportunity databases which provide electronic matching 
        of minority businesses with market opportunities;
  --The Virtual Business Centers which are online one-stop information 
        sources for growth industries in aquaculture, international 
        trade, franchising and manufacturing technology;
  --The Resource Locator which uses geographic information systems 
        technology to quickly find business development organizations 
        in a local area; and
  --The Emerging Minority Marketplace, which is a series of reports, 
        maps and research tools about the fast growing minority 
        population as a lucrative market for minority firms.

Patent and Trademark Office
    The Patent and Trademark Office (PTO) supports improvements in our 
e-commerce economy, including efforts of America's small business 
owners, by offering free access to patent and trademark information via 
the PTO web site. PTO currently offers more than two terabytes of 
science and technology covering all patents issued since 1976 and more 
than 100 years of marketing creativity covering all pending, 
registered, abandoned, canceled, and expired trademarks via its web 
site. In fiscal year 2001, we will begin expanding web site offerings 
to ultimately provide additional U.S. patent text and image data from 
1790 to 1975. One of the primary benefits of this proposal is that the 
public will have access to the same data base content as patent 
examiners, thereby, giving individuals the opportunity to search for 
patent and trademark information themselves. This brings access to 
patent and trademark information closer to citizens and businesses who 
need such information to make important business and investment 
decisions to successfully compete in the global economy.

International Trade Administration
    The President's fiscal year 2001 budget for International Trade 
Administration (ITA) includes an Increasing Manufacturers Exports 
Through E-Exporting increase request totaling 12 FTE and $10,000,000. 
ITA's Trade Development (TD) and U.S. & Foreign Commercial Service 
(US&FCS) units will work together to carry out the programs included in 
this initiative.
    TD's portion of this increase will fund an outreach effort to 
Small- and Medium-Size Exporters (SMEs) to create an awareness of the 
opportunities e-commerce presents and to assist them to establish a 
web-based presence in the international marketplace. This increase will 
also underwrite e-commerce public/private partnerships under the 
umbrella of our highly successful Market Development Cooperator 
Program. Thirdly, this increase will fund the development and 
maintenance of a web site which will include a comprehensive database 
of import taxes, tariffs and other regulatory data to help U.S. 
manufacturers determine product pricing, anticipate and comply with 
foreign market entry requirements and expedite international business 
transactions.
    This increase request builds upon pilot work that has been 
undertaken within base resources. Currently, to assist SMEs to take 
advantage of e-commerce, TD is working with one of our Market 
Development Cooperator Program grantees, the Software and Information 
Industry Association, to plan domestic and international e-commerce 
outreach efforts. These joint activities will take the form of seminars 
directed at SMEs that will foster business-to-business exports using e-
commerce. Internationally, we plan to conduct a series of trade 
missions to selected markets, with e-commerce suppliers as the 
participants. These missions will be coordinated with US&FCS staff at 
the respective posts.
    TD is in the process of developing new market intelligence reports, 
including Internet use and e-commerce applications, that will review 
information technology markets in countries in Europe, Latin America, 
Asia and Southern Africa. These reports will cover key conditions 
affecting the uptake of e-commerce in overseas markets and identify the 
best e-commerce export markets for U.S. firms, particularly SMEs. The 
reports will cover issues such as national cyber laws and regulatory 
regimes, and highlight potential barriers to electronic commerce, such 
as network pricing and bandwidth issues.
    In order to help SMEs export to countries where English is not a 
native language, we are working through a contractor to host a 
multilingual web site that will have company and product profiles of 
several domestic software and telecom SMEs covered. The first languages 
will be English, German and Spanish. The site will allow foreign 
business visitors to register and then contact the companies through 
specially designated officials at the respective U.S. SMEs. This 
structure will also allow performance measures to be captured.
    ITA is also actively working on a wide range of policy issues aimed 
at ensuring that unnecessary regulatory requirements do not stifle the 
growth of e-commerce. This includes active efforts in multilateral fora 
such as the World Trade Organization (WTO), the Organization for 
Economic Cooperation and Development (OECD), Asian-Pacific Economic 
Cooperation (OPEC), the Free Trade Area of the Americas (FTAA), and on 
a bilateral basis. This policy work will benefit all U.S. firms, 
especially SMEs.
    The US&FCS budget requests will enable ITA and its units to address 
challenges facing prospective SME manufacturer exporters. The advent of 
global connectivity and e-commerce have created a new globalized 
business environment in which any company with an Internet presence is 
a potential exporter. The objectives of these projects are to reach out 
to smaller and less-experienced businesses, create an awareness of the 
export assistance resources available, and assist those firms that have 
an interest in exporting but require additional business 
sophistication. These projects use a mix of traditional and web-based 
outreach strategies to reach new clients and provide them with the 
information and international context they require, as well as basic 
``starter'' approaches to help them proceed internationally.

National Institute of Standards and Technology
    Research indicates that small businesses have not strategically 
embraced e-commerce. Over 50 percent of all supply-chain participants 
are small businesses, making it extremely important to trading partners 
that small firms be capable of using e-commerce technology. Many 
experts predict that companies will likely fail if they do not 
strategically transform their business processes to include e-commerce. 
In addition, a 1999 survey by the National Association of Manufacturers 
(NAM) revealed that although 80 percent of smaller manufacturers have a 
web site, 75 percent do not use the Internet for any direct sales. It 
also noted that over 50 percent of smaller manufacturers use the 
Internet less than 5 hours a week. This funding initiative will assist 
small manufacturers adopt e-business by doing the following:
    Manufacturing Extension Partnership (MEP) will develop and 
implement an outreach and adoption program. The MEP outreach program 
will focus on business-to-business e-commerce--the largest and fastest 
growing sector of e-commerce, expected to surpass $3 trillion annually 
by 2003.
    The principal focus of the outreach program is the addition of 
approximately 200 information technology professionals to work at MEP 
centers throughout America helping small businesses adopt e-business 
practices. These e-commerce outreach field agents will help small 
businesses learn about e-commerce opportunities and challenges, and 
provide hands-on training and assistance, utilizing both internal and 
external resources, in all aspects of e-commerce, from the basics of 
Internet communications to designing e-commerce websites to integrating 
complex information systems. The field agents will help small 
businesses understand the broad range of commercial e-business 
solutions provided by the private sector and make informed and 
appropriate choices among different private sector solution providers. 
The additional field agents will help the MEP centers provide a range 
of services through individual consultations with companies and group 
seminars and workshops.
    To expand the reach and impact of the field agents, MEP will also 
work with USDA's Extension Service and SBA on its e-commerce outreach 
program. MEP will develop, produce, and distribute at least 600,000 
copies of an e-commerce jump start kit to small businesses across the 
Nation. The jump start kit will contain fundamental information to help 
small businesses--many of them struggling with the fundamentals of 
information technology and not even having Internet access--begin the 
process of adopting e-business practices. The MEP centers, bolstered by 
additional information technology field agents, will help the small 
businesses make the next steps toward e-business success after the 
companies have become familiar with e-commerce issues through the jump 
start kits.
    MEP will also begin work on a series of e-commerce adoption kits 
providing more advanced information and e-business solutions. The 
adoption kits will be focused by industry sector, addressing the 
specific standards and interoperability issues within that sector for 
increasing levels of business-to-business e-commerce adoption, creating 
true supply chain integration.
    The combination of jump start and adoption kits for initial broad 
outreach with the hands-on help from the expanded MEP center staff 
provides a powerful combination of nationwide coverage and focused 
individual assistance.

National Telecommunications and Information Administration
    The NTIA increase of $2 million is proposed for enhancing the 
environment of broadband (wireless and wire line) technology. NTIA's 
Institute for Telecommunication Sciences will provide broadband 
technology research and standards development to the successful 
commercialization and widespread deployment of the Next Generation 
Internet (NGI)--including the economical deployment of broadband 
capabilities in rural and disadvantaged areas. While the deployment and 
operation of the NGI will be a private sector responsibility, the U.S. 
Government has a significant role in the development of the enabling 
technologies and assuring universal access. As stewards of the Federal 
spectrum allocation and experts in spectrum- and network-related 
research, NTIA must provide the tools that support the information and 
communication needs of our public education, safety and health 
officials as well as facilitate opportunities for small businesses to 
compete in the world economy. The Broadband for the Next Generation 
Internet effort will focus on improving the quality and performance of 
current services so that advanced Internet, voice, and video services 
are available for all Americans.
    In addition, NTIA's Technology Opportunities Program grants include 
model projects of how communities are using such networks to build 
economic strength and to improve their quality of life. These projects 
provide the opportunities and know-how for small businesses to flourish 
in the new economy.

                             DIGITAL DIVIDE

    Question. The number of Americans who increasingly use the Internet 
as an economic and information tool continues to increase. What steps 
is the Commerce Department taking to narrow the ``digital divide'' 
between Americans who enjoy this new and powerful medium and those who 
continue to be left out?
    Answer. The Department of Commerce's Falling Through the Net 
report, which has gained widespread attention, describes a gap that 
separates those who have access to telecommunications--through 
computers, the Internet, and other telecommunication services--and 
those who do not. It found that those who are low-income, Black and 
Hispanic, living in rural areas, and single-parent households are less 
likely to have access to the information tools that are now essential 
for finding a job, acquiring new skills, starting a small business, or 
getting lower prices for goods and services.
    The Commerce Department is committed to closing the digital divide. 
The Administration's pro-competitive policies, as advocated in 
Department of Commerce filings with the Federal Communications 
Commission, have helped to spur private investment in the 
infrastructure and new technologies and to reduce the price of 
computers and the Internet.
    The NTIA will produce the Falling Through the Net report on an 
annual basis ($400,000), so that the digital divide can be monitored 
over time. In addition, NTIA promotes ``universal access'' to the 
Internet through its Technology Opportunities Program ($45 million) and 
the Home Internet Access program ($50 million), which will assist under 
served families connect to the Internet. In addition, NTIA will work 
with U.S. industry and other public agencies to conduct research and 
establish standards to support low-cost options for deployment of 
broadband capabilities in rural and disadvantaged areas ($2 million).
    The Economic Development Administration's program ($23 million) to 
deploy broadband capabilities in distressed areas will provide public 
works grants to build the infrastructure needed to access the Internet 
in under served communities.
    These programs combined with the myriad of private sector 
initiatives are helping to close the digital divide.

                      CHINA--INTELLECTUAL PROPERTY

    Question. China may soon ascend to the World Trade Organization and 
Congress will have to decide whether to grant Permanent Normal Trade 
Relations to China. Perhaps one of the most important issues affecting 
American business will be the protection of American intellectual 
property. What strategies are in place to protect our intellectual 
property interests as we participate in the new markets of China and 
other emerging economies?
    Answer. We are already preparing for the monitoring and enforcement 
effort required to ensure China and other trading partners abide by the 
World Trade Organization (WTO) commitments in intellectual property 
protection. The President's fiscal year 2001 budget requests Congress 
to appropriate $22 million for new compliance and enforcement resources 
at the Commerce Department, Office of the U.S. Trade Representative, 
Department of Agriculture and other branches of government with 
enforcement responsibilities. China WTO compliance will be a prominent 
feature of this enhanced monitoring and enforcement effort.
    At the Commerce Department, we plan to triple Commerce's China 
office in size and to increase our Trade Compliance Center's resources 
as well. We plan to assign compliance staff to be posted in China, both 
to work with U.S. businesses and with the Chinese government. We plan 
an extensive monitoring effort of China's WTO accession protocol. For 
example, we plan to designate specific individuals in Washington and at 
our embassy in Beijing responsible for specific parts of the 
agreement--someone will be responsible for monitoring the intellectual 
property aspects of the agreement. We will work closely with United 
States Trade Representative (USTR) and the interagency process, to 
enhance participation in WTO committees in Geneva overseeing WTO 
implementation to ensure that when our monitoring effort finds 
problems, these problems can be acted upon immediately, including 
initiating WTO consultations or WTO dispute settlement as necessary. 
All these plans are contingent upon Congressional approval of this part 
of the President's budget request.
    We will involve U.S. exporters, large and small, in our monitoring 
efforts through trade associations, District Export Councils, our 
Commerce Department and SBA offices around the country, the U.S.-China 
Business Council, the American Chambers of Commerce in China, labor 
organizations, and other non-governmental organizations. We will have a 
China compliance hotline on the web. This endeavor is intended to 
identify and resolve every possible compliance violation.
    We will continue to use the full range of U.S. trade laws, 
including Special 301, to ensure that U.S. technology-based and 
creative industries are guaranteed adequate and effective intellectual 
property rights protection, and fair and equitable market access, 
worldwide. Under Special 301, the Executive Branch must identify 
annually those countries that deny adequate and effective protection 
for intellectual property rights or deny fair and equitable market 
access for persons that rely on intellectual property protection. 
Countries that have the most onerous or egregious act, policies or 
practices and those that have the greatest adverse impact (actual or 
potential) must be designated as Priority Foreign Countries. This 
year's annual review process is currently underway.
    In the past, China was identified as a Priority Foreign Country 
under Special 301, resulting in several Section 301 investigations. 
Section 301 has also been an effective tool to address unfair Chinese 
practices affecting U.S. exports of products that rely on intellectual 
property protection. Before our Intellectual Property Agreements in 
1992 and 1995 and the enforcement action in 1996, China was one of the 
world's largest producers and exporters of pirated products. Today, 
China has improved its legal framework, and has substantially 
eliminated the illegal production and export of pirated music and video 
CDs and CD-ROMS. China's active enforcement efforts continue with a 
renewed campaign initiated last fall.
    China has committed to implement the Trade Related Aspects of 
Intellectual Property Rights Agreement (TRIPS) immediately upon its 
accession to the WTO, without a transition period. TRIPS requires that 
a country make available enforcement measures and sanctions adequate to 
deter further infringing activity, thus, increasing our leverage for 
intellectual property rights enforcement.
    The United States will strengthen its enforcement capabilities 
through the multilateral nature of the WTO. The WTO will apply a 
multilateral review mechanism to monitor the implementation of all of 
China's commitments, including intellectual property protection. In 
previous disputes over Chinese compliance with agreements, notably 
those over intellectual property protection, the United States had to 
act alone. With China in the WTO, we will be able to work with 134 
other members, many of whom will be concerned about the same issues we 
raise and all of whom will have the legal right to challenge China's 
implementation practices and seek redress.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski

                             DIGITAL DIVIDE

    Question. The Commerce Department did an excellent job in showing 
that a digital divide exists in America. Your report ``Falling Through 
the Net'' showed that the digital divide is still widening--especially 
for those communities that are currently isolated or falling behind. 
For example, your report showed that 46 percent of white households own 
computers--only 25 percent of Hispanic household's own computers. What 
is the role of the Department of Commerce in ensuring that no American 
is left out or left behind in the new technologically based economy?
    Answer. The Commerce Department is committed to closing the digital 
divide. The Administration's pro-competitive policies, as advocated in 
Department of Commerce filings with the Federal Communications 
Commission, have helped to spur private investment in the 
infrastructure and new technologies and to reduce the price of 
computers and the Internet.
    The NTIA will produce the Falling Through the Net report on an 
annual basis ($400,000), so that the digital divide can be monitored 
over time. In addition, NTIA promotes ``universal access'' to the 
Internet through its Technology Opportunities Program ($45 million) and 
the Home Internet Access program ($50 million), which will assist 
underserved families connected to the Internet. In addition, NTIA will 
work with U.S. industry and other public agencies to conduct research 
and establish standards to support low-cost options for deployment of 
broadband capabilities in rural and disadvantaged areas ($2 million).
    The Economic Development Administration's program ($23 million) to 
deploy broadband capabilities in distressed areas will provide public 
works grants to build the infrastructure needed to access the Internet 
in under served communities.
    These programs combined with the myriad of private sector 
initiatives are helping to close the digital divide.
    Question. What are your priorities in the budget to achieve this 
goal?
    Answer. The Department of Commerce's priorities to achieve the goal 
of closing the digital divide include: $50 million for a public/private 
partnership grant program at the Department of Commerce to expand home 
access to computers and the Internet for low-income families; $45 
million to triple the Department of Commerce's highly successful 
Technology Opportunity Program which promotes innovative applications 
of information and communications technology for under served 
communities; $23 million through programs at the Department of 
Commerce's Economic Development Administration to accelerate private 
sector deployment of broadband networks in underserved urban and rural 
communities; $2 million at NTIA to conduct research and establish 
standards to support low-cost options for deployment of broadband 
capabilities in rural and disadvantaged areas; and $400,000 for NTIA to 
produce the Falling Through the Net survey annually to track the 
digital divide.
                                 CENSUS

    Question. The 1990 census counted only 98.4 percent of the 
population--this was the first year since 1940 in which coverage did 
not improve. The undercounting of the minority population was the 
largest ever. Those who are undercounted include: people with language 
difficulties; neighborhoods who don't trust outsiders or the 
confidentiality of the census; people who work more than one job and 
are rarely home; and non-traditional housing arrangements (extended 
families, roommates, borders, etc.). What are you doing to ensure that 
the census reaches those populations that have been undercounted in the 
past?
    Answer. In fact, the problems in 1990 were even more serious. The 
1990 Census missed about three percent of residents and double counted 
or otherwise miscounted almost 1.5 percent for a net undercount of 1.6 
percent. From the beginning of the planning process for Census 2000, 
the Census Bureau has focused on the vital importance of partnerships 
with state, local, and tribal governments, along with the crucial 
partnerships we are able to form at the community and neighborhood 
level. For Census 2000, we have designed the most robust partnership 
program in census history in order to reach out to those populations 
that are often undercounted. The Bureau has now almost 100,000 
partnerships in place including, for example, a group of school 
children in Georgia that have raised their own money to promote the 
census by renting a billboard.
    Because language is perhaps the most challenging barrier for a 
significant number of those in historically undercounted populations, 
Census 2000, questionnaires are printed in five languages in addition 
to English, is the most multi-lingual census in history. We also offer 
multi-lingual assistance for these five languages over the phone via a 
toll free number, for those people who need it. Foreign language guides 
are also available for 49 languages, and questionnaire assistance 
centers will be located in areas where we expect language to be a 
barrier to enumeration. Assistance is also available as part of the 
Telephone Questionnaire Assistance (TQA) program--an easily accessible, 
customer-friendly service that we believe will be an effective part of 
our strategy to address the undercount issue in these populations. When 
we first launched the TQA program it proved to be in higher demand than 
the Bureau had anticipated, and we did have difficulty managing the 
volume of calls. This initial difficulty has been overcome.
    In addition to unparalleled efforts in the partnership programs, we 
are instituting the first-ever paid advertising campaign for Census 
2000. This effort, designed in partnership with the advertising firm 
Young and Rubicam and its partners, includes a national media campaign 
with prime-time television (both broadcast and cable), radio and print 
media, and outdoor advertising. Through its partners, Young and Rubicam 
has also designed an advertising effort specifically targeted to 
historically undercounted populations on the national, regional, and 
local level. The local effort uses community news outlets, posters, 
flyers, and mass transit advertising. Further, Census 2000 has designed 
an early educational message targeted to hard-to-enumerate populations 
and a second national campaign designed to increase public awareness of 
the non-response follow-up operation.

                          SUITLAND FACILITIES

    Question. I would like to discuss the condition of the Census and 
NOAA facilities at the Suitland Federal Center in Maryland. The current 
condition of these building poses serious health and safety risks for 
thousands of federal employees. They are ridden with asbestos and there 
are high levels of lead in the water so that employees have to use 
bottled water for drinking and don't know if its safe for them to wash 
their hands.
    In addition, these buildings are over 60 years old and have 
received little maintenance during the past several years. Roof leaks 
and floods from old pipes are not an uncommon occurrence, and ceiling 
tiles, possibly contaminated with asbestos fall down on employees 
desks.
    As you know, the Census Bureau employs over 4,000 employees at the 
Suitland facilities and is the sixth largest employer in Prince Georges 
County. The Bureau is extremely disadvantaged by having to carry out 
its work in substandard, unhealthy conditions. Likewise, NOAA's 
National Environmental Satellite, Data, and Information Service 
(NESDIS) and its Satellite Operations Control Center, cannot complete 
their mission within these buildings.
    In fiscal year 2000, there was $3 million for NOAA to plan and 
design a new facility and report language to direct Census to come up 
with a long-range plan for its facilities. NOAA's budget for fiscal 
year 2001 includes an advance appropriation for $15 million for fiscal 
year 2002 when NOAA will be able to begin construction on the new 
facility. Census' budget for fiscal year 2001 includes $3.3 million to 
plan and design the rehabilitation of their facilities. Both NOAA and 
Census have responded separately.

                      SUITLAND FACILITIES--CENSUS

    Question. Do you agree that the current condition of the Census and 
NOAA facilities at the Suitland Center endanger the health and safety 
of the federal employees who work there?
    Answer. Current conditions at the Federal Center in Suitland, 
Maryland have deteriorated to the point that constant monitoring is 
required to be sure that employee safety and health are not endangered. 
For example:
  --Remedial action by GSA has failed to correct the contaminated water 
        sources thus, bottled water is being and will continue to be 
        provided for building occupants. Problems with the water are 
        expected to persist until the entire system is replaced.
  --Census is engaging an independent environmental firm to conduct 
        periodic air sampling in problem areas throughout the buildings 
        where antiquated ventilation systems do not provide adequate 
        air circulation resulting in numerous complaints of respiratory 
        problems. Also, microbial problems have been identified in a 
        number of areas as a result of leaking or improperly 
        functioning heating/cooling equipment.
  --Ineffective heating and cooling systems have caused extreme 
        temperatures in numerous locations resulting in employee health 
        issues. The extreme temperatures divert employee attention from 
        assigned work resulting in lost productivity. Power outages 
        often result when electric space heaters are used to provide 
        relief to areas where the heating system is inadequate.
  --The periodic rupture of water and steam pipes has caused 
        considerable flooding resulting in temporary relocation of 
        employees. The repair and cleaning of affected areas results in 
        further disruption of work and lost productivity.
  --A recent sewage pipe leak in one of the buildings could have caused 
        serious health affects from methane gas and/or bacteria from 
        waste, and pigeon infestation has been reported in a number of 
        locations within the buildings.
  --The facilities have been subject to repeated flooding during 
        rainstorms because of leaking roofs and poorly drained building 
        expansion joints. The numerous attempts to patch the roof have 
        been unsuccessful and problems will continue until the facility 
        is fully renovated and the roof replaced, not patched.

                       SUITLAND FACILITIES NOAA

    Yes, we agree the space NOAA occupies at the Suitland Federal 
Center, Federal Building No. 4 (FB) poses a significant health and 
safety concern for all Federal employees who work there. The space has 
significant asbestos problems. In addition to the asbestos concerns, 
water-testing results confirmed the presence of a harmful substance in 
the water (coliforms), thereby, warranting the use of bottled water for 
human consumption. Due to the age of the facility, numerous roof leaks 
and other building system failures constitute threats to NOAA's 
critical infrastructure activities housed in the building. DOC, NOAA 
and GSA are diligently working to assure safe utilization of the 
building until the replacement building is complete.

                      SUITLAND FACILITIES--CENSUS

    Question. Do you agree that the replacement or rehabilitation of 
these buildings should therefore be a top priority for the Department 
of Commerce?
    Answer. Yes. GSA publicly stated that remedial action to correct 
contaminated water sources has failed and that bottled water will 
remain in the buildings until such time as a new facility/water system 
is provided.
    PCBs recently were detected in machinery, just four months after a 
GSA survey indicated that the buildings had no equipment containing 
PCBs.
    While these situations are being addressed and pose no immediate 
hazard, they contribute to an overall sense of unease with the work 
environment which is shared by managers and employees.
    In addition, the necessary removal of asbestos in one of our major 
buildings has disrupted workplaces, and contributed to low morale. And 
the Asbestos Management Plan implemented by GSA to prevent further 
asbestos contamination has seriously impeded our mission by hampering 
our ability to access telecommunications wiring, install new equipment, 
and to troubleshoot.

                       SUITLAND FACILITIES--NOAA

    Yes, we agree that the replacement or rehabilitation of these 
buildings should be a top priority for the Department of Commerce. In 
fact, both NOAA and GSA have designated this new NOAA building as a 
high priority with a target completion date of fiscal year 2004. In 
addition to the obvious health and safety concerns, the operational 
requirements for the National Environmental Satellite, Data, and 
Information Service (NESDIS) are not being met. This facility is an 
impediment to all employees working for NESDIS and its Satellite 
Operations Control Center, making it difficult for them to complete 
their mission. The GSA has determined that the construction of the new 
satellite operations facility is #3 on their priority list.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
    Question. Last year, when the Department of Commerce first proposed 
closing the National Technical Information Service (NTIS), initial cost 
estimates ranged from $1.35 million to $9.1 million. Now, the 
Administration has requested $4 million in the supplemental for fiscal 
year 2000. Can you provide the Committee with an explanation of how you 
calculated this final figure? Will there be any additional funds 
required to complete the closure?
    Answer. The Administration has requested a $4.5 million 
supplemental transfer from NIST to NTIS. This figure represents the 
estimated cost of closing NTIS and transferring the collection of 
scientific and technical information to the Library of Congress, 
assuming the Department is allowed to begin the closure and transfer 
process in midyear. The later in the fiscal year that Congressional 
approval is given, the less time the Department has for placement of 
employees while minimizing reductions-in-force. Timely action is needed 
by Congress for the closure and transfer to be accomplished for $4.5 
million and be effective by October 1, 2000.
    Question. In the past, I voiced my concerns that the World News 
Connection paid subscription database service provided by NTIS competed 
directly with on-line subscription products produced by private 
companies. I oppose subsidizing a government service which competes 
directly with services provided by the private sector. However, NTIS 
also provides the Federal government with the unique service of acting 
as a clearinghouse for scientific, technical, and other business-
related materials. How do you intend to ensure that this important 
function of NTIS is preserved?
    Answer. The Department's proposal will transfer the NTIS collection 
and bibliographic database to the Library of Congress. In addition, the 
plan will ensure that Federal government agencies provide the Library 
with electronic copies of future documents as well as maintain such 
information on their own web sites for at least three years. The 
Library will be responsible for the maintenance and upkeep of the 
collection and bibliographic databases. In addition, the centralized 
Federal Depository Library System would be continued and actually 
strengthened under our plan by creating incentives for the chief 
information officers of each executive agency that produces materials 
for the scientific, technical, and engineering (STE) collections to 
notify the archivist and superintendent of documents of the 
availability of these products. The chief information officer would 
have to report to Congress on their agency's compliance with these 
requirements.
    Question. I understand that, in the absence of NTIS, Commerce will 
direct each Federal agency to post its own documents on the web for a 
period of at least three years. Many Federal agencies are already 
posting these documents. Do you have an assessment of which federal 
agencies are equipped to handle the posting of documents on its own web 
site? How do you intend to ensure that the agencies comply with this 
directive? How did you arrive at the time of only three years and how 
will individuals locate documents that have been removed after three 
years?
    Answer. The Department has not conducted an assessment of which 
Federal agencies are equipped to handle the posting of documents on its 
own web site. Under our proposal, each agency that produces STE 
information must supply that information in a timely manner to the 
Library of Congress for permanent access, and, to the extent possible, 
must provide that information through a compatible electronic format. 
In addition, each agency will make its STE information available to the 
public for at least three years through online dissemination. The 
agencies' compliance with this directive will be ensured by requiring 
that each chief information officer of each executive agency that 
produces materials for the STE collection report annually to Congress 
on his/her agency's compliance. The Library will be responsible for the 
maintenance and upkeep of the collection and, thus, would be the source 
of documents that have been removed from the web site.

                         E-COMMERCE REVOLUTION

    Question. I am pleased to see that the President's budget request 
includes a $175 million initiative to accelerate the e-commerce 
revolution. It is my understanding that part of this initiative will be 
directed towards helping small manufacturers become e-commerce ready. 
Please provide me with details on how this funding will benefit small 
manufacturers. The three bureaus that are affected have responded as 
follows:
NIST
    Answer. Research indicates that small businesses have not 
strategically embraced e-commerce. Over 50 percent of all supply-chain 
participants are small businesses, making it extremely important to 
trading partners that small firms be capable of using e-commerce 
technology. Many experts predict that companies will likely fail if 
they do not strategically transform their business processes to include 
e-commerce. A 1999 survey by the National Association of Manufacturers 
(NAM) revealed that although 80 percent of smaller manufacturers have a 
web site, 75 percent do not use the Internet for any direct sales. It 
also noted that over 50 percent of smaller manufacturers use the 
Internet less than 5 hours a week. This funding initiative will assist 
small manufacturers adopt e-business by doing the following:
  --Manufacturing Extension Partnership (MEP) will develop and 
        implement an outreach and adoption program. The MEP outreach 
        program will focus on business-to-business e-commerce--the 
        largest and fastest growing sector of e-commerce, expected to 
        surpass $3 trillion annually by 2003.
  --The principal focus of the outreach program is the addition of 
        approximately 200 information technology professionals to work 
        at MEP centers throughout America helping small businesses 
        adopt e-business practices. These e-commerce outreach field 
        agents will help small businesses learn about e-commerce 
        opportunities and challenges, and provide hands-on training and 
        assistance, utilizing both internal and external resources, in 
        all aspects of e-commerce, from the basics of Internet 
        communications to designing e-commerce websites to integrating 
        complex information systems. The field agents will help small 
        businesses understand the broad range of commercial e-business 
        solutions provided by the private sector and make informed and 
        appropriate choices among different private sector solution 
        providers. The additional field agents will help the MEP 
        centers provide a range of services through individual 
        consultations with companies and group seminars and workshops.
  --To expand the reach and impact of the field agents, MEP will also 
        work with USDA's Extension Service and the Small Business 
        Administration on their e-commerce outreach programs. MEP will 
        develop, produce, and distribute at least 600,000 copies of an 
        e-commerce jump start kit to small businesses across the 
        Nation. The jump start kit will contain fundamental information 
        to help small businesses--many of them struggling with the 
        fundamentals of information technology and not even having 
        Internet access--begin the process of adopting e-business 
        practices. The MEP centers, bolstered by additional information 
        technology field agents, will help the small businesses make 
        the next steps toward e-business success after the companies 
        have become familiar with e-commerce issues through the jump 
        start kits.
  --MEP will also begin work on a series of e-commerce adoption kits 
        providing more advanced information and e-business solutions. 
        The adoption kits will be focused by industry sector, 
        addressing the specific standards and interoperability issues 
        within that sector for increasing levels of business-to-
        business e-commerce adoption, creating true supply chain 
        integration.
  --The combination of jump start and adoption kits for initial broad 
        outreach with the hands-on help from the expanded MEP center 
        staff provides a powerful combination of nationwide coverage 
        and focused individual assistance.

Addendum: Examples of NIST information security standards, 
        measurements, and best practices

            Recent Work and Ongoing Programs--Key Examples
    Security ``Best Practice'' guidance identification, development, 
and dissemination:
  --Provide guidance to other agencies on how to protect their systems 
        against hackers
  --Publish guidance documents that aid industry and government in 
        securing their computers
  --Identifying trends in the discovery of vulnerabilities in order to 
        guide industry in the prevention of the most common types of 
        flaws
  --Creation of a database of threats to public computer systems that 
        points to appropriate countermeasures
  --Web site that provides industry and government with computer 
        security information on a broad variety of subjects

            Research and Development Activities--Key Examples
    NIST has underway R&D activities designed to enhance the security 
of the Internet and the national information infrastructure in the 
following areas:
  --System and network architectures that resist denial of service and 
        other forms of attack
  --Automated testing of systems and network elements for security 
        flaws
  --Secure protocols and automated testing methods for both the current 
        and the Next Generation Internet (IPSec)
  --The Advanced Encryption Standard (AES)
  --Standardization of interfaces to efficient and secure encryption 
        algorithms to protect e-commerce and government transactions
  --Securing electronic commerce activities through Public Key 
        Infrastructure (PKI) and PKI-Enabled Applications
  --More efficient and effective methods by which to evaluate the 
        security of commercial products against known and emerging 
        threats
  --Mobile agent systems to ensure secure use in e-commerce 
        applications
  --Advanced access control architectures to allow efficient and 
        effective control of organizational resources
  --Use of smartcards to enable higher security in e-commerce 
        applications
  --Healthcare Security Project
  --NIAP Security Specification Tool Project
  --NIAP Telecommunications Security Project

            Infrastructure Development and Protection
    These activities are helping establish the security services needed 
within the broader national information infrastructure (including the 
Internet) to combat hacking and other misuse.
  --Government PKI Pilots
  --Validation of commercial cryptographic modules against the NIST 
        Federal standard (over 100 products validated)
  --Work with industry and government to promote the development of a 
        private sector IT security testing program within the United 
        States
  --FedCIRC--Development and piloting the concept and operational 
        requirements for a government-wide computer incident response 
        capability now operational under GSA
  --Common Criteria Evaluation and Validation Program

MBDA
    MBDA's request is to expand the Phoenix Database. The Phoenix and 
Opportunity Databases electronically match minority business 
capabilities with contract and other opportunities. The Phoenix 
Database consists of minority-owned firms that register their 
capabilities online through the MBDA website. The Opportunity Database 
permits any individual or institution including small manufacturing 
centers to register procurements or other business opportunities 
online. The system will automatically match firms with opportunities 
and provide follow-up tracking. The databases became operational in 
fiscal year 1998 and are now populated with more than 40,000 firms. For 
the short history of the system, the results have been positive.
    State and local governments have many available opportunities to 
enrich the business community. MBDA is seeking the participation of 
these governments to increase the database population of registered 
opportunities and vendors. By recruiting state and local governments to 
participate, the accompanying databases containing minority vendors 
will result in the expansion of the Phoenix database by 250,000 names. 
MBDA's in-house computer program is designed to permit data entry 
personnel in MBDA's five regional offices to call and confirm 
information from these businesses and update the records with 
electronic mail addresses.
    Limited resources and the physical absence of MBDA in many parts of 
the country have necessitated a system to make accessible business 
information to the national minority business community.

International Trade Administration
    The President's fiscal year 2001 budget for ITA includes an 
Increasing Manufacturers Exports Through E-Exporting increase request 
totaling 12 FTE and $10,000,000. ITA's Trade Development (TD) and U.S. 
and Foreign Commercial Service (US&FCS) units will work together to 
carry out the programs included in this initiative.
    The US&FCS is ITA's first line of outreach to SMEs and provides 
assistance to SMEs through its network of domestic and foreign offices. 
Through the 2001 budget requests, the US&FCS is intending to both 
broaden its outreach and enhance its assistance to SMEs primarily 
through e-commerce initiatives. The US&FCS works with all SMEs and 
helps them determine if and where export opportunities exist for their 
products and/or services.
  --E-commerce is the foundation of the US&FCS request because it is a 
        genuinely new and transforming method of service delivery that 
        responds directly to the many historical and structural reasons 
        SME manufacturers do not aggressively pursue international 
        markets. These reasons include: geographic distance, travel 
        costs, additional time and cost perceived for international 
        transactions, difficulty in identifying and evaluating overseas 
        business partners, perceived risk, habitual focus on the local 
        U.S. market, and cultural barriers and differences.
  --E-commerce, is an ideal medium in which to expand services to small 
        and medium-sized businesses and increase exports. E-commerce 
        provides the needed support to the US&FCS's unique global 
        network capacity with an information technology system that 
        provides an expansive and effective client management database, 
        office automation support, and a worldwide electronic mail 
        network that links all field offices and headquarters. The 
        US&FCS website is now being upgraded to include on-line 
        ordering and delivery of products and services, automated 
        market research and trade lead distribution and easier access 
        to counseling and assistance. E-Commerce type products include:
    --a virtual trade show, E-Expo, which already has nearly 700 
            clients and has received 90,000 hits on the Internet from 
            around the world since its launch in September 1999;
    --a push technology project to push key market information to 200 
            SMEs that first provide a customize interest profile of 
            markets and sectors they wish to penetrate overseas;
    --Video Gold Keys which allow companies in different countries to 
            communicate on desktop computers. Video Gold Keys offer a 
            low cost, low risk opportunity to meet trade partners 
            overseas, a particularly critical concern for small 
            companies;
    --Webcast programs, which are broadcast over the Internet and are 
            designed to target the information needs of U.S. 
            manufacturing exporters. Webcasts can be ``on-demand'' 
            events--meaning that they are available 24 hours--7 days a 
            week for viewing by interested companies; and
    --global satellite video-conferences such as Video Market Briefs 
            and E-Commerce Export Seminars.
  --The US&FCS budget request will enable ITA and its units to address 
        challenges facing prospective SME manufacturer exporters. The 
        advent of global connectivity and e-commerce have created a new 
        globalized business environment in which any company with an 
        Internet presence is a potential exporter. The objectives of 
        these projects are to reach out to smaller and less-experienced 
        businesses, create an awareness of the export assistance 
        resources available, and assist those firms that have an 
        interest in exporting but require additional business 
        sophistication. These projects use a mix of traditional and 
        web-based outreach strategies to reach new clients and provide 
        them with the information and international context they 
        require, as well as basic ``starter'' approaches to help them 
        proceed internationally.
  --The US&FCS will host, with assistance from our partners and other 
        units within ITA, a series of conferences to promote export 
        assistance programs and services, disseminate information on 
        how e-commerce is affecting exporting and making it easier for 
        the small manufacturer to communicate knowledge of the benefits 
        of exporting (e.g., greater profits, job creation, increased 
        plant/resource utilization), and instill a global perspective 
        to SMEs.
    Our Trade Development unit will fund an outreach effort to small- 
and medium-size exporters (SMEs) to create an awareness of the 
opportunities e-commerce presents and to assist them to establish a 
web-based presence in the international marketplace. This increase will 
also underwrite e-commerce public/private partnerships under the 
umbrella of our highly successful Market Development Cooperator 
Program. Thirdly, this increase will fund the development and 
maintenance of a web site which will include a comprehensive database 
of import taxes, tariffs and other regulatory data to help U.S. 
manufacturers determine product pricing, anticipate and comply with 
foreign market entry requirements and expedite international business 
transactions.
    TD is in the process of developing new market intelligence reports, 
including Internet use and e-commerce applications, that will review 
information technology markets in countries in Europe, Latin America, 
Asia and Southern Africa. These reports will cover key conditions 
affecting the uptake of e-commerce in overseas markets and identify the 
best e-commerce export markets for U.S. firms, particularly SMEs. The 
reports will cover issues such as national cyber laws and regulatory 
regimes, and highlight potential barriers to electronic commerce, such 
as network pricing and bandwidth issues.
    In order to help SMEs export to countries where English is not a 
native language, we are working through a contractor to host a 
multilingual web site that will have company and product profiles of 
several domestic software and telecom SMEs covered. The first languages 
will be English, German and Spanish. The site will allow foreign 
business visitors to register and then contact the companies through 
specially designated officials at the respective U.S. SMEs. This 
structure will also allow performance measures to be captured.
    ITA is also actively working on a wide range of policy issues aimed 
at ensuring that unnecessary regulatory requirements do not stifle the 
growth of e-commerce. This includes active efforts in multilateral fora 
such as the WTO, the OECD, APEC, the FTAA, and on a bilateral basis. 
This policy work will benefit all U.S. firms, especially SMEs.

                          EDA INTERNET ACCESS

    Question. As part of the $175 million initiative, the 
Administration proposes to spend $23 million to deploy high speed, 
broadband Internet access in distressed urban and rural communities. 
How does the Department intend to distribute those funds among the 
states and local areas? If there is a competitive grant process, what 
will be the criteria? Does the Department have any plans to give senior 
citizen communities priority consideration for funding?
    Answer. EDA will implement the e-commerce initiative using its 
existing Public Works and Economic Development Program authority. All 
$23 million of the initiative funding will be allocated to EDA's 
regional offices, for project invitation, selection and distribution, 
using EDA's existing Public Works allocation formula. Additional 
factors such as broadband Internet access availability in rural and 
intercity areas and interest (or lack of interest) by private service 
providers may also be considered in making this allocation.
    Funding will be available to all entities eligible under EDA's 
current economic distress criteria, based on unemployment, per capita 
income, and other special need. Special emphasis, however, will be 
placed on mitigating broadband Internet access gaps as characterized by 
the ``digital divide.'' Proposals will have to arise out of a local 
planning process, including processes developed for other Federal 
programs.
    EDA headquarters will set policy for the initiative and, as part of 
its normal oversight of the regions, review projects selected to make 
sure they are appropriate for the demonstration, but we do not 
anticipate a headquarters role in the project selection process itself.
    EDA has no plans to give senior citizens priority funding 
consideration; funding prioritization will be based on existing program 
criteria (i.e., levels of economic distress) regardless of other 
demographic characteristics. EDA's programs, including the proposed e-
commerce initiative, are geared toward creating long-term economic 
development opportunities and diversified local economies.

                             DIGITAL DIVIDE

    Question. I understand that the Administration proposes to spend 
$50 million on a Home Internet Access initiative for a new grants 
program that would provide low-income individuals and families with 
access to the Internet and training. Please provide me with details on 
how the Department intends to implement this program.
    Answer. The Administration has proposed a new $50 million 
Department of Commerce pilot program to expand access to computers and 
the Internet for low-income families, and to give these families the 
skills they need to use these new Information Age tools effectively. 
The goal of the Home Internet Access Program (HIAP) is to increase the 
number of low-income families that have access to the Internet in their 
homes.
    NTIA will disburse Federal funds as competitive grants to 
intermediate organizations--non-profit entities; state, local, and 
tribal governments; and colleges and universities--to develop local 
programs for providing home-based access to families in need. The 
grants will require non-Federal matching funds.
    This new program will build on the lessons of the highly successful 
Technology Opportunities Program (TOP). In particular, the HIAP will be 
designed around two of the hallmarks of the TOP program; locally-driven 
solutions and public-private partnerships. NTIA's experience has shown 
that the most creative, innovative, and effective solutions come not 
from the Federal government, but from local communities. Therefore, 
NTIA will challenge low-income communities--both rural and urban--to 
devise solutions that best reflect their circumstances and best meet 
their needs. NTIA's experience has also shown that strong partnerships 
and broad community support are key ingredients in sustaining 
information technology projects. The HIAP will encourage community-
based partnerships and partnerships among local organizations, 
academia, and private industry. In order to demonstrate the local and 
private sector commitments, NTIA will require applicants to provide 
matching funds. In keeping with the formulas that have proven 
successful in the Public Telecommunications Facilities (PTFP) and TOP 
programs, applicants will be required to provide a 50 percent (1:1) 
match, unless extraordinary circumstances warrant a Federal share of up 
to 75 percent of the total project cost. In addition, NTIA is 
considering requiring that significant portions of the matching funds 
come from private businesses and co-payments from the individuals that 
receive home Internet access.
    The list of allowable uses for the awarded funds is still under 
discussion. As a general guideline, costs must relate to the provision 
of the hardware, software, telecommunications services, training, and 
user support necessary to provide effective and efficient Internet 
access to eligible households. NTIA will also allow grant recipients to 
expend funds on project administration, evaluation, and reporting of 
results.
    NTIA will not provide direct subsidies to individuals. Because NTIA 
will encourage communities to innovate and experiment, NTIA will not 
rule out the possibility that a grant recipient would be allowed to 
provide direct subsidies. In that event, NTIA would take the necessary 
steps to ensure that subsidies were used for the purposes of 
establishing and maintaining home Internet access.
    Finally, NTIA will use the data from the Falling Through the Net 
survey to target the program's resources and as an ongoing performance 
measurement tool. The survey data will identify the communities and 
populations most in need of assistance, initially and on an ongoing 
basis.

                    SAFE HARBOR AGREEMENT ON PRIVACY

    Question. Please provide me with details on the Administration's 
progress in reaching an agreement with the European Union on privacy 
and personal data sharing and the implications of this tentative accord 
for America's businesses. Will this agreement apply to information 
collected by Web sites? How will this agreement impact trade between 
the United States and the EU?
    Answer. The European Union (EU) Directive on data protection 
prohibits transfers of personal data to third countries such as the 
United States unless adequate privacy protection is provided. Because 
we recognized that disruptions in personal data transfers could have 
serious implications for commerce between the United States and Europe, 
we started an informal dialogue with the European Commission two years 
ago to try and bridge gaps between our different approaches to privacy 
protection. Working with the Commission, we developed the concept of 
the safe harbor, under which U.S. companies that wish to would be able 
to decide voluntarily to participate in the safe harbor and do so by 
self-certifying to the Department of Commerce.
    The U.S. Department of Commerce and European Commission have 
reached a tentative agreement on implementation of the proposed safe 
harbor. The agreement bridges the differences between the EU and U.S. 
approaches to privacy protection and ensures adequate privacy 
protection for EU citizens' personal information.
    We are still working with the European Commission to determine the 
length of the implementation period and how to properly integrate U.S. 
national privacy legislation into the safe harbor. The Department of 
Commerce has requested an adequacy finding for the Gramm, Leach, Bliley 
Act and the Fair Credit Reporting Act. The Department of Commerce is 
also consulting officials within the U.S. Government. A meeting with 
private sector and consumer groups to review the agreement was held on 
Friday, March 3, 2000. The European Commission is presently consulting 
with the Member States.

Application to Web Sites
    With the safe harbor arrangements, the Department of Commerce is 
providing guidance for companies that do business in Europe. U.S. 
Internet companies that collect information from Europe may also rely 
on this guidance. We have, however, explicitly left open the difficult 
questions raised by the Internet of jurisdiction and applicable law.

Trade Impact between the U.S. and the EU
    With the safe harbor accord we are providing industry on both sides 
of the Atlantic with the certainty and predictability that is needed to 
run their businesses. It eliminates the need for prior approval from 
the appropriate EU Member State to begin data transfers, and is 
expected to offer a simpler and lower-cost alternative to compliance 
with the Directive, which should benefit small and medium enterprises 
in particular. This accord will allow billions of dollars of trade to 
continue unimpeded by our different approaches to privacy.

                          SUBCOMMITTEE RECESS

    Senator Gregg. Our next hearing is with the Department of 
Justice on Tuesday at 10 a.m., in SD-192.
    I thank you, Mr. Secretary for your time. Have a good day.
    Secretary Daley. Thank you.
    [Whereupon, at 11:45 a.m., Tuesday, February 24, the 
subcommittee was recessed, to reconvene at 10 a.m., Tuesday, 
March 2.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              


                       TUESDAY, FEBRUARY 29, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg, Domenici, Hutchison, Campbell, 
Hollings, Lautenberg, and Mikulski.

                         DEPARTMENT OF JUSTICE

                     Office of the Attorney General

STATEMENT OF JANET RENO, ATTORNEY GENERAL

                            OPENING REMARKS

    Senator Gregg. We will start. I know that Senator Hollings 
is probably on his way. I am sure he is on his way, as are a 
number of other members who are going to participate in this 
hearing. But in order to move it along, so we do not take an 
overabundance of the Attorney General's time, I think we will 
begin.
    Rather than having opening statements, we would like to 
hear from the Attorney General.

                 ATTORNEY GENERAL RENO OPENING REMARKS

    Attorney General Reno. What I would like to do is thank 
you, both of you, and you too, Mr. Morhard. We have done an 
awful lot in 7 years, Mr. Chairman. And it has been, as I said 
2 weeks ago, an opportunity to work together, and I just 
appreciate your leadership, your constructive opposition to 
some of my ideas.
    I just think we have an extraordinary chance in this 
country, the next couple of years, and that is for once and for 
all end the culture of violence in this country. We will never 
eliminate it, but based on what we have done, I think if we 
continue we can do that. And I pledge to you, wherever I am, 
that I am going to be pursuing that effort.

                           PREPARED STATEMENT

    Senator Campbell, I just salute you for your leadership on 
Indian issues, and I hope we can work together in this session 
to make some real meaningful difference on the reservations and 
in Indian country.
    So why do you not ask me questions?
    [The statement follows:]

                    PREPARED STATEMENT OF JANET RENO

    Mr. Chairman and Members of the Subcommittee, it is a pleasure once 
again to appear before you to present the President's budget request 
for the Department of Justice.
    This is likely my last appearance before this panel. These hearings 
have been a model for the oversight process, and I want to take this 
opportunity to thank you for the partnership you have forged with me, 
the federal law enforcement community and our state, county, and local 
counterparts. We have worked together to improve our Nation's justice 
system and to address the very real crime problems that have plagued 
our neighborhoods and communities.
    Since 1993, funding for Department of Justice programs has grown by 
92 percent, including a $3 billion increase for grants to state and 
local criminal justice agencies. The overall increase in funding has 
paid for additional federal agents and prosecutors, put cops on the 
beat in our neighborhoods, expanded prison capacity, provided new 
crime-solving tools, improved technology, funded innovative approaches 
to fighting crime, worked to secure our Nation's borders, and helped to 
train and equip first responders to address the threat of terrorism.
    Your commitment to the Department and its programs has had an 
impact. For the 7th consecutive year, our crime rate has fallen--for 
every type of crime and in every region of the Nation. Our communities 
are safer than they were 7 years ago. Yet, there is still much work to 
be done and new challenges to confront. This morning I would like to 
leave you with my thoughts about the direction we must take to prepare 
for these new challenges.
    The President's fiscal year 2001 budget request recognizes the need 
for continued vigilance against crime. It includes $23.4 billion for 
the Department--an increase of $1.8 billion above fiscal year 2000--to 
combat gun violence, enhance community law enforcement, curb the cycle 
of drugs and crime, battle cybercrime, respond to the threat of 
terrorism, secure our borders, and fund new prisons.

            COUNTERTERRORISM AND FOREIGN COUNTERINTELLIGENCE

    Preventing terrorism and thwarting foreign espionage are among the 
most serious challenges facing our Nation today. The Department of 
Justice is the lead federal agency in the fight against terrorism. Your 
Subcommittee has worked with us to provide the necessary tools to 
address this threat and to ensure that the Department is able to carry 
out this very important responsibility.
    In fiscal year 2000, with your support, we established the National 
Domestic Preparedness Office (NDPO). You also provided significant 
guidance in the development of a blueprint laying out NDPO's role as a 
central coordinating office and information clearinghouse for federal 
assistance programs to state and local communities with the goal of 
integrating and streamlining government assistance. Our blueprint 
represents a deliberate, conservative effort that people will 
understand and support. You also helped us to establish the Office for 
State and Local Domestic Preparedness Support, within the Office of 
Justice Programs, and to develop a process for equipping and training 
state and local first responders to prepare them to handle a terrorist 
incident.
    The fiscal year 2001 budget request builds on the infrastructure 
that is now in place in the Department to address terrorism and 
includes a $119.6 million increase to fight terrorism and combat 
hostile intelligence activities.
    We are requesting an increase of $15 million for the 
Counterterrorism Fund, established in response to the Oklahoma City 
bombing, bringing the total 2001 request for the Fund to $25 million. 
This funding is used to address unforeseen expenses incurred in 
countering, investigating, or prosecuting terrorism; to finance reward 
payments; and to restore the operational capacities of offices damaged 
by terrorist acts.
    Our fiscal year 2001 request includes funding for some of the most 
important activities that the FBI will undertake in the future. 
Included are increases of $35.3 million for the counterterrorism/
counterintelligence activities of the FBI. Specifically, we are asking 
for $19.1 million and 138 positions to enhance the FBI's ability to 
conduct national security investigations and thwart hostile 
intelligence services operating in the United States; $3.1 million and 
55 intelligence analysts to engage in strategic intelligence analyses; 
$5 million to continue counterterrorism research and development 
related to explosives detection and forensic science; $3.5 million for 
Weapons of Mass Destruction preparedness activities, including $2.9 
million for a chem/bio helpline and hotline; $2.9 million to support 
state and local bomb technician training at the Hazardous Devices 
School at Redstone Arsenal, AL; $1.1 million to plan and provide 
security for the 2002 Winter Olympic Games to be held in Salt Lake 
City; and $600,000 to provide additional contract guard services for 3 
additional FBI field offices.
    Identifying threats to our national security is a unique federal 
responsibility, and one which the FBI must be equipped to meet. With 
your help, I am hopeful that we can come out of this appropriations 
process leaving the FBI well equipped to meet the challenges terrorism 
presents.
    Assuring that we are able to respond to threats of terrorism 
whenever and wherever they occur must include providing the FBI with 
adequate prosecutor expertise in the Criminal Division and the U.S. 
Attorneys' offices. Balance is critically important in the criminal 
justice system. The very best agent or investigator will find his 
efforts thwarted if unable to request and receive specialized legal 
support in times of crisis. I cannot stress too strongly how important 
it is that increased resources for law enforcement agencies be 
accompanied by resources for our important litigation responsibilities 
as well. Without sufficient litigation support, the system will break 
down.
    The Department's counterterrorism request also includes $185 
million for the Office of Justice Program's domestic preparedness 
efforts, an increase of $33 million. I anticipate that the President 
will direct the transfer of primary responsibility for the Nunn-Lugar-
Domenici Domestic Preparedness Program from the Department of Defense 
to the Department of Justice, effective on October 1, 2000. In 
anticipation of this transfer, we are requesting $31 million for the 
costs associated with providing first responders with classroom 
training, various levels of practical exercises, and equipment and 
training aids to prepare for nuclear, biological and chemical 
incidents. We also request $17 million for OJP's counterterrorism 
technology programs.
    We also request counterterrorism enhancements for OJP of $9 million 
for a Law Enforcement Training program; $6 million to provide technical 
assistance to state and local communities for domestic preparedness; $3 
million to expand the First Responder Equipment Acquisition program, 
and $2 million to expand operations at the Center for Domestic 
Preparedness at Fort McClellan, AL.
    We request an increase of $1 million and 10 positions for the 
Department's Office of Intelligence and Policy Review (OIPR). This 
office is responsible for reviewing all requests for surveillance or 
searches under the Foreign Intelligence Surveillance Act. FISA 
applications have grown by over 80 percent since 1992, and a 1999 
amendment to the FISA statute (50 U.S.C. 1801 et.seq.) expanded the 
types of authorized FISA applications that OIPR must review to include 
pen register and trap and trace device surveillance.
    Finally, for the Criminal Division, we seek increases of $210,000 
for the Office of Enforcement Operations to address victim assistance 
needs related to the Pan Am 103 case and provide the capacity for 
future terrorist-related victim assistance. In addition, this would 
allow the Criminal Division to keep pace with witness service demands 
and would improve its ability for special administrative measures aimed 
at isolating, for investigative purposes, those indicted and convicted 
for terrorist-related offenses.
    We are seeking $92,000 to support the Criminal Division's Terrorism 
and Violent Crime Section's work related to the Five-Year Interagency 
Counterterrorism and Technology Crime Plan, the latest update which I 
will transmit to you in the next few days. This increase will fund 1 
position to provide the coordination and planning that is necessary 
among the Department and other agencies that participate in the 
development and annual updates of the Plan.

                          COMBATTING CYPERCRIME

    The improvements in information technology and the development and 
proliferation of the Internet have expanded our horizons, literally 
putting knowledge at our fingertips and changing the way we think and 
do business. The Nation's information infrastructure--the banking 
system, the stock market, the electricity and water supply, the 
telecommunications network and critical government services--rely on 
computer networks. These systems are the foundation upon which our 
society functions; and by virtue of our growing dependence on 
computers, they are increasingly the target of criminals at home and 
abroad. As greater numbers of people develop proficiency in 
manipulating electronic data and navigating computer networks, and as 
worldwide access to the Internet continues to expand, the opportunity 
for cybercrime increases rapidly.
    Two weeks ago, Director Freeh and I came before you to discuss 
cybercrime and the recent attacks against popular on-line Internet 
sites including Yahoo, Amazon.com, ebay, E-Trade and others. As I told 
you at that time, we need a long-term coordinated strategy to deal with 
cybercrime. I will work with you to develop and implement a five-year 
plan that will focus our existing and future resources to react and 
prevent cybercrimes by forging partnerships that include sharing 
expertise, training, equipment and technology among federal, state and 
local law enforcement officials. The strategy must address the 
challenges we face, both here and abroad. The problems demand personnel 
and expertise at all levels--in both the investigative and 
prosecutorial sides--the latest cybercrime fighting equipment, and 
educating our young people and others about the responsible use of the 
Internet. And, we must accomplish this in a manner that respects and 
upholds our cherished privacy and freedoms.
    We appreciate your interest in and support for our requests to 
address cybercrime. In fiscal year 2000, you provided a total of $107.4 
million in funding for efforts underway in the Department's Criminal 
Division, the FBI, DEA, U.S. Attorneys Offices, and the Office of 
Justice Programs. We seek to establish a permanent cadre of experts 
dedicated to preventing computer crime and to prosecuting those 
responsible. In fiscal year 2001, the President's budget includes an 
additional $37 million to continue the fight against cybercrime. This 
request will serve as the baseline for future efforts. It will improve 
our capacity to address the challenges that high technology presents, 
and it will shape our ability to cope with crime in the future.
    Our 2001 request includes cybercrime increases totaling $12 million 
for the FBI--$11.4 million to expand the Computer Analysis and Response 
Teams (CART) and to further develop the Automated Computer Examination 
System (ACES), a software tool that expedites the computer forensics 
process by scanning files from seized computers to identify known 
format and executable program files; and $612,000 for personnel to 
support a joint FBI-Customs Service Intellectual Property Rights Center 
to enhance our Nation's ability to investigate and prosecute 
intellectual property rights crimes by sharing information among 
agencies.
    CART teams are the forensic investigators in a computer world. CART 
personnel provide the specialized expertise needed to extract data from 
computers and network systems, conduct forensic examinations, and 
provide on-site support to criminal investigations that require 
computers as evidence. The FBI has a total of 142 trained CART 
examiners who supported approximately 2,000 cases during 1999. By 2001, 
the requirement for forensic examinations is expected to more than 
double the number required in fiscal year 1999. To keep pace with this 
expanding workload, we seek an additional $8.6 million and 100 
additional CART examiners and $2.8 million to further develop ACES.
    For the Office of Justice Programs, the 2001 request includes 
$15.75 million, including $8.75 million to expand training initiatives 
at the National White Collar Crime Center for state and local law 
enforcement and regulatory agencies; $6 million to develop regional 
forensic computer labs; and $1 million for the Bureau of Justice 
Statistics to collect computer crime and cyber fraud statistics to 
measure the magnitude and consequences of computer crime.
    Our new initiative to develop regional forensic computer labs 
recognizes the need to establish computer expertise at the state and 
local level. It also addresses the need for training and backup 
resources so that state and local law enforcement can successfully 
conduct investigations and prosecutions of computer crimes in their 
jurisdictions. These labs will build on a concept that we have found to 
be highly successful and one which has, as its foundation, an approach 
involving partnership and information sharing among federal, national, 
state and local organizations and agencies. One model that we have for 
this new program is the Regional Computer Forensic Laboratory in San 
Diego, California. This lab brings together expertise from state and 
local representatives and government personnel, including the FBI, and 
serves as a resource for the San Diego area to solve crimes involving 
complex computer forensics.
    To ensure that there is balance within the system and adequate 
litigation resources to support our cybercrime investigations, we are 
requesting additional funding for the United States Attorneys and the 
Criminal Division.
    For the U.S. Attorneys, the fiscal year 2001 budget includes $8 
million to investigate and prosecute cybercrimes and to enable the 
vigorous prosecution of child pornography cases, including those cases 
involving the use of the Internet. The fiscal year 2001 request will 
bring total U.S. Attorneys funding availability for cybercrime to $12.7 
million.
    For the Criminal Division, we seek an additional $586,000 for the 
Computer Crime and Intellectual Property Section (CCIPS). CCIPS acts as 
a link for federal, state, local and foreign agencies seeking guidance 
on how to respond to the threat of cybercrime/cyberterrorism. In 
addition, the fiscal year 2001 budget includes $560,000 for the 
Criminal Division to stay abreast of technological changes and 
developments and to target those who use computers, computer bulletin 
board systems and computer online services to traffic in child 
pornography.
    We believe our fiscal year 2001 request provides balanced and 
responsible approaches to addressing this growing threat. The 
tremendous growth in the Internet and the interconnectivity of our 
information infrastructure means that Congress, law enforcement, 
industry and the private sector must all work together as never before. 
Computers bring the world closer together and create new bonds of 
understanding. However, they can provide criminals with tools to 
conceal their identity and greater access to those who seek to cause 
harm. Crimes perpetrated via the Internet can reach a larger and more 
accessible pool of victims which can encircle the globe. The Internet 
has made it easier for wrongdoers to find each other, to congregate, to 
socialize, and to create an online community of support and social 
reinforcement for their antisocial behaviors. We welcome your 
assistance and persistence in this battle for the future.

                         COMBATING GUN VIOLENCE

    The Department's fiscal year 2001 budget includes an increase of 
$215.9 million to continue our vigorous efforts to pursue those who 
violate our gun laws and to provide state and local law enforcement 
with assistance and technology to solve and prosecute gun crimes. 
Although gun violence has dropped, and gun prosecutions have increased, 
we must do more to stem the tide of gun violence. Every day, 89 people 
are shot and killed in America; and every year, in addition to the 
immeasurable costs of human suffering, gun violence costs the American 
people $20 billion in medical care, public service, and lost 
productivity. These costs are unacceptable.
    Those who use guns to commit crimes must be swiftly and severely 
punished. At my direction, United States Attorneys--working within 
their communities--have put together innovative plans to reduce gun 
violence. For fiscal year 2001, our budget requests an additional $14.5 
million and 163 positions for the United States Attorneys to bolster 
firearms prosecutions and to build on the successes of pilot projects 
such as Operation Ceasefire in Boston, MA and Project Exile in 
Richmond, VA. Last year, you earmarked $7.125 million for intensive 
firearms prosecution projects. I hope that this year you will provide 
additional resources to enhance our firearms prosecution projects 
throughout the country.
    Recognizing that the majority of gun prosecutions must occur at the 
state and local levels, we are requesting $190 million in new funding 
for the Community Prosecution program. We propose that $150 million of 
this increase be used to hire or redeploy 1,000 local prosecutors to 
combat gun violence through intensive local enforcement initiatives.
    In addition to punishing those who commit gun crimes, we must do 
all we can to stop gun violence before it occurs. Our 2001 budget 
includes an increase of $40 million for programs aimed at preventing 
gun violence. This includes $10 million for the Office of Justice 
Programs (OJP) to develop and test ``smart gun'' technologies; $10 
million to be made available within the Byrne Discretionary Grant 
program to support local media campaigns that help spread the word 
about gun violence; and an increase of $10 million from within current 
Juvenile Justice funding to expand innovative Partnerships to Reduce 
Juvenile Gun Violence. Also within OJP, we are requesting $10 million 
to reimburse state and local law enforcement agencies for the cost of 
destroying weapons, rather than reselling them and recouping costs. 
This is not a ``gun buyback'' program, but it will help prevent weapons 
seized or used by law enforcement from being circulated back into the 
community.
    As with fingerprints, every firearm has unique characteristics--a 
``gun print''--that can be captured, electronically stored and compared 
to other gun prints through the use of ballistics technology. 
Ballistics technology enables law enforcement to link one or more 
seemingly unrelated crimes to a single firearm. At the present time, 
both the FBI and the Bureau of Alcohol, Tobacco and Firearms (ATF) in 
the Treasury Department operate separate ballistics imaging systems, 
but an agreement has been reached to integrate these two systems, using 
the best features of each, to establish a single National Integrated 
Ballistics Information Network (NIBIN). This new system will improve 
law enforcement's ability to identify crime guns. For fiscal year 2001, 
the Department is requesting $1.4 million for the FBI to provide the 
communications infrastructure required to implement NIBIN. In addition, 
we are seeking $10 million through OJP to provide assistance to help 
state and local law enforcement input data into their ballistics 
systems and reduce their backlogs. Funding is requested in Treasury's 
budget to upgrade state and local ballistics systems.

         IMPROVING COMMUNITY LAW ENFORCEMENT

    Our 2001 budget continues the Department's commitment to improve 
community law enforcement efforts and to build closer relationships 
between law enforcement and the communities they serve.
    We seek an additional $740 million for the Community Oriented 
Policing Services (COPS) program, for a total of $1.3 billion in fiscal 
year 2001. The COPS request includes an increase of $225.3 million for 
the Public Safety and Community Policing Grants program, of which up to 
$50 million will be used to fund law enforcement officers who will work 
in police/prosecutors' offices. We have also requested $190 million, as 
I mentioned earlier, to expand funds for community and local 
prosecutors. I regard the expansion of community law enforcement to 
include community prosecutors as the single most important lynchpin of 
further crime prevention.
    We request an increase of $220 million, for a total of $350 
million, to provide state and local law enforcement with the latest 
crime fighting technologies, This includes $199 million for the Crime 
Identification Technology Assistance program; $70 million for upgrades 
to criminal history records; $50 million to improve forensic labs and 
to reduce the convicted offender DNA sample backlog; $10 million for 
crime mapping technologies; $10 million in base funding for National 
Institute of Justice's (NIJ) Technology Centers; $6 million for 
regional forensic computer labs; and $5 million for continued base 
funding for the NIJ DNA Research Development program.
    We seek $70 million for community crime prevention programs to 
address youth and school safety, including $5 million to fund a value-
based program between youth and police, $30 million for school-based 
problem solving partnerships, and $35 million for the Safe Schools/
Healthy Students program; $20 million for a police integrity training 
initiative; $5 million for a COPS police diversity recruitment 
initiative; and $5 million for citizen problem-solving academies that 
will provide citizens with tools to work collaboratively with policing 
agencies.
    The Office of Justice Programs supports a number of new, 
innovative, and exciting programs to assist communities in addressing 
crime and public safety concerns. I am particularly excited about a 
pilot project known as the Strategic Approaches to Community Safety 
Initiatives (SACSI) that is underway in five cities--Indianapolis, IN; 
Memphis, TN; New Haven, CT; Portland, OR; and Winston-Salem, NC. SACSI 
experiments with a new way of doing business that makes heavy use of 
statistical data and information analysis, boosts the U.S. Attorney's 
role as a community problem solver and uses researchers to serve as 
navigators to ensure that the crime-fighting approaches taken are 
supported by the data. In fiscal year 2001, we are requesting an 
additional $10 million to expand SACSI.
    In Indianapolis, under the SACSI umbrella, law enforcement agencies 
from the federal, state, and local levels came together with community 
groups to form the Indianapolis Violence Reduction Partnership (IVRP), 
with the goal of reducing homicides, bringing the community into the 
problem-solving process and improving communication among federal, 
state, and local law enforcement. The Indianapolis Division of the FBI, 
as a participating member of the IVRP, shares intelligence data and 
provides technical oversight to the state and local intelligence 
gathering community. The IVRP is an example of the benefits that accrue 
from SACSI projects involving cooperation, coordination, and 
collaboration between law enforcement at all levels and the community, 
as well as the importance of incorporating sound research and analysis 
into problem-solving. The IVRP team analyzed data for every homicide 
that occurred in Indianapolis and Marion County, IN in 1997 and 1998, 
identified common elements and developed a strategy that included 
community intervention with offenders on probation or parole. Initial 
results show that homicides were down 36 percent for the first 6 months 
of 1999, as compared to the same period a year earlier.
    I have visited the Indianapolis project, and I can tell you that 
the work they are doing there holds great promise for the future. SACSI 
brings community organizations and law enforcement together to create 
new, effective and lasting relationships across agencies and 
disciplines, using local data, crime control theory, street level 
information, and organizational capacities to attack problems and 
develop solutions. It is a wise investment.
    Other enhancements requested for OJP community law enforcement 
programs include $15 million for a new Building Blocks initiative to 
address delinquency and crime; an $8.5 million increase for Weed and 
Seed; $5 million earmarked for NIJ from within the Drug Courts program 
and JJ formula grants for dependency courts to address child abuse and 
neglect; $5 million for the NIJ to conduct family violence research and 
evaluation; $2 million to develop protocols and guidelines for 
investigative and forensic sciences; and $1 million to begin developing 
a new Justice Online Information Exchange system.
    For the U.S. Attorneys, we are requesting $3.98 million to support 
the operations of the D.C. Superior Court by funding investigative 
resources to augment work performed by the Metropolitan Police 
Department and $172,000 to expand the Short Term Witness Protection 
program.

                      BREAKING THE CYCLE OF DRUGS

    One of the most pressing criminal justice challenges we will face 
as a Nation in the next few years is the reentry of offenders into 
society upon their release from prison. We have nearly 2 million 
Americans incarcerated, two-thirds of them in state and federal 
prisons. This year, nearly 570,000 inmates will return to communities 
across the country. Unfortunately, many of them will return home with 
the same problems they had when they entered prison. And as a result, 
two-thirds of all returning offenders will be rearrested within three 
years of release. This is unacceptable. We must have programs in place 
to break the cycle of drug use and its consequences and to provide 
support services to help these former offenders successfully reenter 
their communities. Our fiscal year 2001 budget addresses these needs.
    Our request includes $75 million for OJP's Zero Tolerance Drug 
Supervision program. This initiative will provide discretionary grants 
to states, units of local government, Indian tribes, and state and 
local courts for comprehensive drug testing and treatment programs. Of 
the total, $25 million will be devoted to a new Offender Re-entry Grant 
program, which along with $35 million from the COPS program, will 
provide a total of $60 million to combine surveillance sanctions and 
support services in ways that afford increased protection to 
communities that experience unusually high returns of inmates.
    The re-entry grant program addresses a problem that will impact all 
of us. It will help to manage the reintegration of prisoners into 
society and to minimize public safety risks while maximizing productive 
activity. This new program includes funding for re-entry partnerships 
in our communities that enhance monitoring and follow-up and strengthen 
support systems. The program includes funding for ``re-entry courts'' 
modeled after our highly successful Drug Courts program. The re-entry 
court would oversee an offender's return to the community after release 
from prison or jail, while on probation or parole. It would use its 
authority to apply graduated sanctions and positive reinforcement in 
much the same way that drug courts do. The message of the court would 
be--work with us, stay clean, stay out of trouble, get a job, and we 
will help you in those efforts. But if you come back testing positive 
for drugs, if you commit further crimes, if you violate the conditions 
of your release, you're going to face a more serious punishment, every 
step of the way.
    Also included in the fiscal year 2001 request is funding for other 
drug prevention programs, including $20 million for the Office of 
Juvenile Justice and Delinquency Prevention's (OJJDP) Drug Prevention 
Demonstration program; $50 million for OJP's Drug Courts program, an 
increase of $10 million above last year; $5 million to expand NIJ's 
Arrestee Drug Abuse Monitoring System (ADAM); $4.5 million for OJP's 
national demonstration initiative on alcohol and crime; $4.4 million to 
evaluate OJJDP's Comprehensive Strategy for Serious Violent and Chronic 
Juvenile Offenders program; and a $2 million increase for the 
Residential Substance Abuse Treatment program, bringing the total 
available for this program to $65 million.
    In addition to its drug prevention efforts, the Department is 
requesting a total of $1.73 billion for drug enforcement activities, 
including an increase of $3.1 million and 18 positions to support DEA's 
Special Operations Division (SOD) investigations along the Southwest 
Border and to establish a money laundering/financial investigative unit 
within SOD. SOD is a multi-agency program aimed at dismantling entire 
national and international trafficking organizations. It includes 
participation from the DEA, FBI, IRS, U.S. Customs Service and the 
Criminal Division in the Justice Department.
    An increase of $389,000 and 5 positions is requested to enhance the 
Criminal Division's international drug money laundering and forfeiture 
activities and to support the increasing number of new wiretaps 
relating to narcotics enforcement arising from initiatives such as SOD.

                 ENHANCING DETENTION AND INCARCERATION

    The Department's detention and incarceration requirements continue 
to grow. In fiscal year 2001, we are requesting increases totaling $1.1 
billion to meet our detention, incarceration, and prisoner 
transportation needs.

Federal Bureau of Prisons
    As a result of tougher sentencing guidelines and mandatory minimum 
sentences, the abolition of parole, and significant increases in law 
enforcement, we have seen our federal prison population more than 
double since 1990. We project that the current population will increase 
by another 50 percent by 2007. To meet this projected demand for prison 
bedspace, for the Bureau of Prisons, we are requesting a 2001 
appropriation of $4.4 billion and advance appropriations in buildings 
and facilities for 2002 and 2003. This funding will reduce overcrowding 
and accommodate future growth, including absorption of D.C. sentenced 
felons and long-term INS detainees. The request seeks program increases 
of $874.5 million this year.
    For the Salaries and Expenses account, our increases include $80 
million and 1,404 positions to activate 4 new facilities. These 
activations are needed to address the 53 percent overcrowding rate in 
high security prisons, to house District of Columbia felons, and to add 
much needed pre-trial detention beds. In addition, we are requesting 
$13.1 million to open 6 low security facilities; $8.1 million to begin 
the initial purchase of equipment for 2 federal prison facilities 
scheduled to activate in the first half of 2002; $84.5 million and 
oversight positions for an additional 6,000 contract beds (above the 
current year 6,000 beds for long-term criminal alien detainees and D.C. 
inmates); and $7.4 million to increase inmate participation in GED, 
English proficiency, special education and vocational training 
programs.
    For BOP Buildings and Facilities, we request a total of $835.6 
million for 2001, including a program increase of $681.3 million for 
the full construction costs of 6 prisons, 2 associated with the 
absorption of INS long-term detainees, as well as the site and planning 
costs for 5 new facilities.
    I would call your attention to and ask your support for our 
proposal to provide advance appropriations for fiscal years 2002 and 
2003 to ensure that we have adequate facilities to house an expanding 
prison population. Advance funding will accelerate and bring certainty 
to our construction program. We ask that you provide an advance 
appropriation of $791 million in fiscal year 2002 to fund the 
construction costs of the 5 facilities for which we are seeking site 
and planning money in 2001. Similarly, we ask that you provide site and 
planning funding in 2002 for 5 new facilities, which would require 
advance appropriations of $535 million for construction in 2003.
    Thus, our budget request for the Buildings and Facilities 
appropriation includes a total of 17 new prisons over the next 3 fiscal 
years. Without the new prisons in this request, over-crowding will 
reach an unmanageable 94 percent in our penitentiaries and 74 percent 
in our medium security facilities by 2007. With this proposed funding, 
we estimate overcrowding will be reduced to approximately 30 percent 
system-wide.

Detention Trustee
    Our detention requirements are becoming an increasingly large 
portion of the Department's annual budget request, with funding located 
in several different appropriations accounts within the Department. In 
an effort to better manage these growing detention resources, we are 
proposing to create a Detention Trustee who will report to the Deputy 
Attorney General and be responsible for managing detention resources 
within the Department. While we have not moved detention funding from 
the various components' accounts, it is anticipated that the Detention 
Trustee would exercise oversight of detention resources and operations. 
Our budget request includes 6 positions and $26 million in the new 
Detention Trustee account; $25 million is available without limitation 
to meet unanticipated costs associated with the care, maintenance, 
detention and repatriation of illegal aliens held outside the 
continental United States.

Immigration and Naturalization Service
    The Department's request for INS Detention needs includes increases 
of $92.5 million for 1,000 additional contract beds to detain and 
remove criminal aliens. This includes 82 new juvenile beds and funding 
for transportation and to implement detention standards. Also requested 
are increases of $24.8 million for detention facility construction to 
continue the multi-year southwest border initiative at critical 
detention locations in El Paso and Port Isabel, TX; El Centro, CA; and 
to improve facilities in Florida. The proposed reauthorization of 
Section 245(i) of the Immigration and Nationality Act is expected to 
provide $37.5 million to replace one-time detention resources made 
available as part of the fiscal year 2001 appropriation, to support the 
increase in the number of juvenile detention beds, and increase the 
number of Justice Prisoner Air Transportation (JPATS) movements.

United States Marshals
    For the United States Marshals Service, our request seeks an 
increase of $64.4 million in the Federal Prisoner Detention account to 
fund costs associated with approximately 9.53 million contract jail 
days, a 8 percent increase above the 2000 level. The detainee 
population has grown considerably over the last few years due to 
significant increases in apprehensions by our growing law enforcement 
personnel in the FBI, DEA, and INS Border Patrol. In fiscal year 2001 
the average daily population is expected to reach 38,531.
    In addition to the needs of the Federal Prisoner Detention program, 
the fiscal year 2001 budget request includes increases of $35.7 million 
for the U.S. Marshals Service to handle the increased workload 
generated by staff increases in other federal law enforcement agencies, 
to provide the personnel and equipment necessary to ensure new 
courthouses and new courtrooms in existing facilities can open on 
schedule and with adequate security to handle increased prisoner 
movements and to increase security in the District of Columbia Superior 
Court cellblock.
    The work of the U.S. Marshals Service is uncontrollable in nature 
in that the organization must meet the requirements of the federal 
courts and of our federal investigators and prosecutors. The Marshals 
Service cannot control the number of threats facing our federal 
judiciary, nor can it control the number of prisoners that come into 
its custody.

Office of Justice Programs
    Funding is requested, within the Prison Grants program, for the 
Cooperative Agreement Program ($35 million) and for detention 
facilities in Indian country ($34 million).

                    ENFORCING OUR CIVIL RIGHTS LAWS

    The Justice Department is our Nation's chief enforcer of civil 
rights laws. Through the enforcement efforts of the Civil Rights 
Division, the U.S. Attorneys offices, and the FBI, the Department seeks 
to protect the civil rights and liberties guaranteed to ALL Americans.
    The fiscal year 2001 budget requests a total civil rights 
enforcement budget of $107.8 million. For the Civil Rights Division, 
alone, this represents an increase of $16 million for civil rights 
funding--19 percent more than the fiscal year 2000 enacted level of 
$82.2 million, and 41 percent more than the fiscal year 1999 enacted 
level of $69.3 million.
    This year marks the 10th anniversary of the Americans with 
Disabilities Act (ADA). The increased resources will enable the Civil 
Rights Division to fund new initiatives to further implement the ADA. 
This funding will also allow the Division to continue prosecuting 
criminal civil rights cases; promote compliance with our Nation's laws 
that prohibit discrimination in housing, lending, voting, education, 
and employment laws; protect the rights of institutionalized persons; 
and expand investigations and prosecutions of cases involving ``pattern 
or practice'' of police misconduct.
    The Community Relations Service (CRS) plays a pivotal role in civil 
rights issues through the delivery of conciliation and conflict 
resolution services. Included in the request for enhanced civil rights 
resources is an increase of $2.35 million and 30 positions (15 
conciliators and 15 administrative staff) to enable the Community 
Relations Service to deploy professional conciliators to communities 
threatened by racial tensions, community conflict, and unrest.
    Within the Office of Justice Programs, we are seeking increases 
totaling $5.9 million for programs addressing police use of force, hate 
crimes, and for statistical programs that will look at police-initiated 
traffic stops; felony case processing to determine if there is a 
disparity in the way a defendant is treated based on their race; and 
the victimization of people with disabilities.

                          SECURING OUT BORDERS

    The Immigration and Naturalization Service is charged with 
enforcing immigration laws by securing our Nation's borders from 
illegal immigration and expediting the legal flow of commerce and 
people into the United States. The fiscal year 2001 budget request for 
INS supports the immigration goals and strategies of improving customer 
service, facilitating legal immigration while deterring illegal 
immigration, and removing criminal and other illegal aliens from the 
United States. The fiscal year 2001 budget request seeks a total of 
$4.8 billion for immigration-related activities.
    For the Border Patrol, we are requesting an increase of $52 million 
to add 430 new Border Patrol agents. These new agents will bring Border 
Patrol staffing to more than 9,800 agents by the end of the fiscal 
year, representing an increase of about 147 percent over the 1993 
staffing level of 3,965 agents.
    The 2001 request recognizes the difficulties INS encountered in 
recruiting agents in a tight labor market and seeks an additional $69.9 
million for a Border Patrol and Immigration Inspector Pay Reform 
package. Of the total, $56 million is requested from appropriated 
resources, and $13.9 million will come from user fees. The initiative 
would upgrade the journeyman grade levels for the Border Patrol and 
inspectors from GS-9 to GS-11. It would also modify the overtime 
provisions for Border Patrol agents, making them eligible for Law 
Enforcement Availability Pay. We are hopeful that pay reform, coupled 
with more aggressive recruitment and hiring initiatives, will improve 
our ability to recruit and retain agents.
    Our Border Management request includes an increase of $20 million 
to support force-multiplying technology efforts by expanding the 
Integrated Surveillance Intelligence System. This technology provides 
agents with the ability to monitor the border from remote sites, thus 
increasing the efficiency and safety of our agents. In addition, $22.3 
million is requested for 269 Immigration Inspectors to staff 3 new 
ports of entry in Texas, to handle increased workload associated with 
the expedited removal process at land ports of entry, and to provide 
additional staff at international airports. The Department also plans 
to dedicate $5 million from the Assets Forfeiture Fund Super Surplus to 
continue efforts to evaluate the possible integration of INS' IDENT 
fingerprint system with the FBI's IAFIS system.
    For Border Patrol construction, we are seeking an additional $51.3 
million to construct and maintain Border Patrol stations and sector 
headquarters to accommodate the growth that has occurred in the Border 
Patrol.
    In fiscal year 1999, INS met its naturalization goal of completing 
more than 1.2 million naturalization applications, and the agency is on 
target to meet its fiscal year 2000 goal of processing 1.3 million 
applications and achieving a nationwide average processing time of 6-9 
months to naturalization.
    To support the provision of immigration services, the Department is 
proposing additional resources totaling $152.3 million. Of this amount, 
$80 million will be derived from the establishment of a new Premium 
Processing Fee that will permit business applicants to choose expedited 
processing of their applications for a $1,000 fee.
    Of the total receipts to be generated by this new fee, $25 million 
will be used to process business applications and to increase our anti-
fraud efforts, and $55 million will be deposited into a new Immigration 
Services Capital Investment Account. This new account will fund 
immigration service and benefits initiatives, targeting backlog 
reductions, through system and infrastructure upgrades. The budget also 
requests $34.8 million in appropriated resources for backlog reduction 
efforts in other immigration benefit programs and to capitalize the new 
Capital Investment Account and $37.5 million in receipts derived from 
the proposed reauthorization of Section 245(i).
    We are requesting $10.1 million to strengthen INS' financial 
management operations by hiring additional staff at INS' Burlington, VT 
Debt Management Center and the Dallas, TX Finance Center; adding staff 
to respond to increased demands at the Administrative Service Centers; 
and to address staffing requirements in the Legal Proceedings program.
    When resources are added to INS, they reverberate through other 
Justice agencies, resulting in increased workload for agencies such as 
the Executive Office for Immigration Review (EOIR) and the United 
States Attorneys who must prosecute many immigration cases. To ensure 
balance in the system, the Department is requesting enhancements for 
these agencies.
    For EOIR, our request includes an increase of $5 million to meet an 
estimated increase of 10,000 cases in its Immigration Judge caseload 
and an increase of 1,200 cases in its appellate caseload.
    For the U.S. Attorneys, we are seeking an additional $3.8 million 
and 48 positions to complement enhancements provided to INS over the 
last 4 years. The increase will permit the U.S. Attorneys to 
aggressively enforce our immigration statutes by prosecuting illegal 
aliens, including aliens who, after deportation, attempt to reenter or 
remain in the U.S. illegally; alien smugglers and smuggling 
organizations; and those who produce, distribute, or sell false 
identification.
    State and local governments are also impacted by increased federal 
immigration enforcement. The 2001 budget includes a requested increase 
of $15 million for the State Criminal Alien Assistance program (SCAAP) 
which reimburses state and local governments for the cost of 
incarcerating criminal illegal aliens. With the proposed increase, 
total funding for SCAAP in fiscal year 2001 will reach $600 million.

                   FIGHTING CRIME THROUGH TECHNOLOGY

    The increased sophistication in technology has made significant 
changes and improvements in the way we work and live. Just as society 
as a whole has become dependent on new technologies, so too has law 
enforcement. When I came to the Department in 1993, I found a crumbling 
technological infrastructure, and I have worked hard to improve the 
tools available to our agents and prosecutors. We have come a long way 
in the last 7 years, but there is still much to be done.
    Our 2001 budget includes an additional $358 million for federal 
information resources management software and hardware, wiretapping 
systems, cryptology equipment, DNA collection efforts, on-going 
research and development projects and data driven crime control 
strategies.

Communications Assistance for Law Enforcement (CALEA)
    The Communications Assistance for Law Enforcement Act of 1994, 
(Public Law 103-414) authorizes the Attorney General to reimburse 
telecommunications carriers for costs associated with modifying digital 
equipment installed before January 1, 1995, in order that court-
authorized wiretaps may be performed.
    The Department has recently submitted a fiscal year 2000 
reprogramming proposing to use up to $100 million in Assets Forfeiture 
Super Surplus funds to continue reimbursing the telecommunications 
industry for certain costs associated with modifying their networks. We 
urge your support of this reprogramming. In addition, for fiscal year 
2001, we are seeking an increase of $105 million for the Department's 
CALEA activities, bringing total funding to $120 million. Recognizing 
the contribution of CALEA to national security, an additional $120 
million for CALEA is also requested in the Department of Defense.
    The budget request for the FBI in 2001 includes $2.1 million to 
test and verify the technical solutions proposed by manufacturers under 
CALEA.

Drug Enforcement Administration
    For DEA, the budget request includes technology enhancements 
totaling $57.5 million. Included within this total is $56 million and 2 
positions to continue deployment and support the operational 
requirements of DEA's primary office automation infrastructure, 
FIREBIRD; and $1.5 million to enhance the El Paso Intelligence Center's 
(EPIC) Information System. The EPIC information system distributes and 
analyzes sensitive intelligence data on worldwide drug movements and 
organizations.

Federal Bureau of Investigation
    We have made significant improvements in the FBI's automated 
systems over the last few years. In fiscal year 1999, three new 
critical information systems became operational. The National Instant 
Background Check System (NICS), used to perform automated Brady Act 
background checks for gun purchases, came on-line in November 1998. In 
July 1999, the FBI's NCIC 2000 and Integrated Automated Fingerprint 
Identification System (IAFIS) became fully operational. Despite these 
advancements, there is much that still needs to be accomplished to 
bring the FBI into the 21st Century in terms of its technology 
requirements.
    For fiscal year 2001, we are requesting a total of $104.7 million 
for FBI technology initiatives. Our request includes $40.8 million in 
new funding for the Information Sharing Initiative; $25.3 million and 4 
positions for digital collections systems; and $10 million from the 
Assets Forfeiture Fund Super Surplus to support a multi-year automated 
information initiative to store and manage lawfully collected 
electronic surveillance intelligence and evidentiary material among FBI 
field offices. In addition, $14.3 million is requested to fund the 
annual lease costs associated with the Justice Consolidated Network's 
ATM circuits. For counter encryption activities, we are seeking $7 
million to provide the tools necessary to intercept encrypted 
communications, when permitted by court order. And, we are seeking $5.3 
million and 5 positions to implement a federal offenders DNA database 
and $2 million to provide digital body recorders in all field offices.

Narrowband Communications
    Federal agencies are required by law to make more efficient use of 
their radio spectrum, the National Telecommunications and Information 
Administration in the U.S. Department of Commerce has issued 
regulations to require all federal spectrum users to narrow by one-half 
the bandwidth used to transmit radio signals. Our fiscal year 2001 
request includes an increase of $88.6 million to accelerate the 
necessary equipment upgrades to comply with the new requirements. The 
Department's narrowband communications account consolidates the needs 
of all DOJ federal law enforcement agencies to achieve efficiencies of 
scale in the acquisition of this new technology. Total funding 
requested for narrowband efforts in fiscal year 2001 is $205 million.

       PROTECTING AMERICAN INDIAN AND ALASKAN NATIVE COMMUNITIES

    The fiscal year 2001 budget includes $173.3 million to fund the 
third year of our Indian Country Law Enforcement Initiative begun with 
the support of this Subcommittee in fiscal year 1999. The request 
represents an increase of $81.8 million above the fiscal year 2000 
enacted level.
    Our Indian Country Law Enforcement Initiative will improve public 
safety for the residents of American Indian and Alaskan Native 
communities by increasing the number of law enforcement officers on 
Indian lands, providing equipment, expanding detention facilities, 
enhancing juvenile crime prevention and improving the effectiveness of 
tribal courts. While violent crime has declined nationally for the 7th 
consecutive year, it is on the rise in many Indian communities. 
American Indians are the victims of violent crimes at more than twice 
the rate of all U.S. residents.
    The Federal Government has unique law enforcement responsibilities 
in Indian communities. In order to fulfill these responsibilities and 
to fight violent crime effectively, both the Justice Department and the 
Department of the Interior's Bureau of Indian Affairs must have a full 
spectrum of criminal justice resources to promote public safety.
    For Indian Country programs within the Office of Justice Programs, 
the fiscal year 2001 budget request includes $10 million to establish a 
new Zero Tolerance and Drug Intervention program for alcohol and 
substance abuse; $15 million for the Tribal Courts program; $20 million 
for Title V Juvenile Justice incentive grants for local delinquency 
prevention to serve Indian youth by developing, enhancing, and 
supporting tribal juvenile justice systems; $8 million for a new Tribal 
Youth Mental Health and Behavior Problems Initiative; $8 million for a 
new Indian Alcohol and Substance Abuse Diversion program to develop 
strategies and services to break the cycle of alcohol and crime; $5 
million to establish Sexual Assault Nurse Examiner Units to gather 
evidence in prosecuting sexual offenders; $6 million for a Tribal 
Criminal and Civil Legal Assistance program for criminal and civil 
legal services support and for criminal and legal assistance curriculum 
development and training at tribal colleges; $34 million within the 
Prison Grants program for the construction of detention facilities; $2 
million for a new Tribal Criminal Justice Statistics Collection 
program; and $5 million for a new Police Corps program to provide 
advanced educational opportunities for police in Indian country.
    Within the COPS program, we are seeking $45 million for additional 
law enforcement officers, equipment, and training in Indian Country and 
$5 million for an Indian Country Forensics Laboratory to augment tribal 
forensic capabilities.
    For Department of Justice agencies, the Indian Country request 
includes $4.6 million for the FBI to fund 31 victim/witness coordinator 
positions in Indian Country, contracts for evidence forensic exams, and 
Safe Trails Task Force overtime costs; $4.7 million and 60 positions 
for the United States Attorneys to augment current investigative and 
prosecutorial efforts in Indian Country; and $932,000 to establish a 
permanent Office of Tribal Justice under the Associate Attorney 
General.

 LEGAL REPRESENTATION, ENFORCEMENT OF FEDERAL LAWS AND DEFENSE OF U.S. 
                               INTERESTS

    As the Department's responsibilities and caseload continue to 
expand, we are seeking additional resources to prosecute unlawful 
activities and protect the interests of the American people in court. 
As I noted earlier, balance in the criminal justice system is vitally 
important. Without adequate litigators to handle the caseload that is 
generated by increased investigative resources, our system breaks down 
and the interests of the American people are compromised.
    The fiscal year 2001 budget includes increased resources to enable 
the Department to perform its role as the Nation's litigator. 
Specifically, the request includes a program increase for the Antitrust 
Division of $20.95 million from fee revenue to provide for the hiring 
of additional staff. This is critical if merger enforcement is to keep 
up with the accelerating number and complexity of merger deals being 
proposed and the rapid technological change currently affecting 
American markets. It will also help address an increasing number of 
civil non-merger matters, and handle an expanding international 
workload, including large global criminal cartels from which the 
Division has obtained $1.4 billion in criminal fines in just the past 
two years. This additional funding will help ensure that America's 
marketplace remains the most freely competitive and innovative in the 
world.
    For the Criminal Division, we are seeking $1.2 million and 14 
positions to support the Division's fight against international crime.
    For the United States Attorneys, an increase of $5.74 million is 
requested to prepare for and defend civil lawsuits against the United 
States and to promote the effective defense of lawsuits through 
training and efficient use of resources in order to protect public 
funds and programs, policy initiatives, and statutes. Congress 
established the Judgment Fund, a permanent indefinite appropriation, to 
pay settlements and judgments against the United States. Disbursements 
from the Judgment Fund are increasing. In 1995, payments from the Fund 
totaled $300 million. By the end of 1997, nearly $1 billion was paid 
out of the Fund. The civil defensive litigation of our United States 
Attorneys helps to prevent losses from the United States Treasury and 
is a wise investment.
    For the Environment and Natural Resources Division, we are seeking 
an increase of $1.15 million and 8 attorneys to support the Division's 
efforts to defend federal programs and regulations and $988,000 to 
expand the Division's civil enforcement caseload.
    The 2001 request for the Tax Division includes increases of $2 
million to expose and attack the use of illegal tax evasion offshore 
schemes, prosecute and combat the use of illegal domestic trusts, and 
provide automated litigation tools.
    For the Office of Legal Counsel (OLC), our request includes $93,000 
and 1 position to assist OLC in its review of legal documents to 
implement Presidential decisions or transmit Presidential requests in 
emergency situations.
    The Justice Department strongly endorses the use of alternative 
dispute resolution (ADR) to resolve conflicts which reduce costly 
litigation and requests an additional $1.31 million in fiscal year 2001 
to promote the use of ADR to resolve conflicts and establish a full 
operating budget for the Office of Dispute Resolution, and to disburse 
funding to appropriate litigating components to pay ADR costs. In 
addition, we are requesting $1 million for the Fees and Expenses of 
Witnesses appropriation for ADR expenses.

                    OTHER CRIME-FIGHTING INITIATIVES

    In addition to the special initiatives that I have outlined above, 
the fiscal year 2001 request includes $86.1 million for other important 
enhancements.
    For the FBI, we are requesting $12 million and 48 positions for 
Health Care Fraud Enforcement; $6.5 million and 4 positions to provide 
essential training resources to fully utilize the FBI Academy space to 
provide technical and analytic training to agents and other 
professionals; $5 million to contract for additional linguist support 
so that investigators can analyze intelligence in foreign languages; 
$2.1 million for additional criminal confidential case funds to pay for 
costs associated with undercover operations; and $1.9 million for 
environmental and safety related construction efforts at the FBI 
Academy firing range.
    To support our United States Attorneys, the fiscal year 2001 budget 
includes enhancements of $12.1 million to provide the information 
technology equipment and staff to support large case document files, e-
mail among U.S. Attorneys' offices and other Justice Department 
components and general office automation needs; and $5 million to 
support efforts by the U.S. Attorneys to ensure the payment of child 
support to custodial parents.
    An increase of $3.9 million and 24 positions is requested to 
enhance DEA's financial and resource management oversight functions. In 
fiscal year 1999 at Congress' direction, the Department undertook a 
comprehensive budget and financial review of DEA. A report was provided 
to the Committees on Appropriations in July 1999, which recommended a 
series of management reforms to be implemented by DEA. This requested 
increase will ensure that DEA will be able to fund ongoing needs for 
their federal financial system and become fully compliant with accepted 
federal financial management practices. Similarly, we are requesting 
$1.42 million and 32 positions to provide the U.S. Marshals Service 
with the capability to improve its financial operations, increase 
financial oversight and policy compliance, and provide daily systems 
maintenance and support to its accounting system.
    In the Office of Justice Programs, we are requesting additional 
resources totaling $22.3 million for a number of important initiatives, 
including the Domestic Violence Victims' Civil Legal Assistance 
program, the Public Safety Officers Dependants Education Assistance 
program, a new International Crime Research program, a national study 
tracking the justice system's handling of domestic violence cases; an 
On-line Collection and Analysis of Information initiative to begin 
converting paper-based collections of administrative data from state 
and local units of government to an Internet-based, paperless 
collection; and to improve the management and administration of OJP and 
COPS programs.
    Finally, we are seeking an appropriation of $13.7 million to 
support the mission of the Radiation Exposure Compensation Act, which 
provides monetary compensation for specific diseases to underground 
uranium miners, persons who participated onsite in atmospheric nuclear 
tests or individuals downwind of the Nevada Test site.

                                CLOSING

    As we enter the 21st Century, criminal schemes are more technical 
and sophisticated than ever. Our response as the Nation's leader in law 
enforcement must be swift and proportionate. To ensure such a response, 
we must expand our on-going efforts to improve the performance of our 
programs and achieve the results that the American people rightfully 
expect. Soon, you will be receiving a copy of our 1999 Accountability 
Report, which includes our annual performance report. And, along with 
our budget request, I have submitted a summary performance plan for the 
entire Department that highlights the strategies, goals, indicators and 
resources we will employ to accomplish our mission in fiscal year 2001.
    Mr. Chairman, I appreciate the support you have given to me and the 
Department of Justice over the last 7 years. We have made tremendous 
progress and I am committed to working with you during the remainder of 
my tenure as Attorney General to prevent waste and duplication and 
ensure that we are using our limited federal resources in the best 
possible manner so that we improve performance, meet our very broad 
mission, and build on the progress that we have made to date.
    Thank you. I look forward to answering any questions you may have.

    Senator Gregg. That is very generous of you. We have had 
our differences, but we have also had our agreements. I have 
enjoyed working with you, Madame Attorney General. On issues 
where we have agreed I think we have made great progress. On 
issues where we have disagreed we have disagreed cordially, and 
I have appreciated that.

                 NATIONAL DOMESTIC PREPAREDNESS OFFICE

    One of the issues that we have agreed on, clearly, is 
counterterrorism, and the issue of how we address 
counterterrorism has been a priority of yours. It has been a 
priority of mine. It has been a priority of this committee, 
Senator Hollings, Senator Campbell, for 3 or 4 years now, and I 
think we have made progress.
    But in that vein, we still have a long way to go, as you 
both know. One of my concerns is about the National Domestic 
Preparedness Office, which I personally saw as being the 
opportunity to give the first responders especially a one-stop 
shopping location. In other words, if you are a State emergency 
management director, if you are a specialist in terrorism in 
New York City--which is probably not a good example, because 
they are way ahead of everybody else--but if you are a 
specialist in terrorism assigned in some other city that is not 
yet up to speed, this was to be the office where you could come 
and be given not only substantive advice but substantive 
support.
    It was also to be the office, and is to be the office, and 
I do not put it in the past, it is to be the office that 
coordinates the national effort, to a great degree, brings the 
various agencies into one central location, and allows us to 
have an effective coordinated response to our efforts first to 
get ready to respond to a terrorist event. But if the terrorist 
event occurs, to be able to handle it.
    My concern is that the office seems to be a bit adrift. In 
fact, having just been started, it does not seem to be up and 
running yet at a level of strength that it should be. I am a 
little concerned that its mission is already being diluted, and 
I would be interested in hearing your thoughts on where this is 
going.
    Attorney General Reno. First of all, fear not, I am 
absolutely, unequivocally committed to it. But you quite 
rightly raised some questions early on and you considered the 
reprogramming. You wanted us to make sure that we had heard 
from the stakeholders in the community, and the authorization 
for it was some time in coming as you satisfied yourself that 
we were going in the right direction.
    It has been 3 months now since you gave the signal. We 
followed up, as you directed, with the blueprint. And I think 
the blueprint spells out very clearly where we are and what we 
want to do.
    Senator Gregg. On that point, do you think there is any 
reason that any of the agencies, whether it is the FBI or 
anybody else, should not presume that the blueprint is still 
the managing document for the purposes of national domestic----
    Attorney General Reno. The blueprint is the managing 
document.
    Now, in that regard, you made a statement. It is the 
National Domestic Preparedness Office. And what we saw was that 
it would be a coordinator. What was the latest equipment? What 
was the best training? How could we best prepare? A one-stop 
shop so that they did not have to go different places to find 
out about different procedures, training, equipment, the latest 
developments in the whole area.
    But it was not meant to be operational in the sense of 
response in terms of the terrorist act, and we spell that out 
in the blueprint. But we are committed to it and I want to work 
with you. We have enjoyed the opportunity to work with you, and 
I had determined that reprogramming dollars, and you should get 
the reprogramming request soon, is not a trivial matter. It has 
taken more time than I had anticipated.
    Senator Gregg. I know they are not the physical responding 
agency, but they are the agency which a State would look to to 
figure out how to respond.
    Attorney General Reno. The way I see the National Domestic 
Preparedness Office is it would have every bit of information. 
Here is my overall vision of where we should be going. Every 
State should have a State emergency preparedness plan, that we 
should automate and develop a capacity to know where the 
hospitals are, where the backup hospitals are, what the key 
assets are, who the key people are, what the major 
transportation routes are, and everything that should be 
considered.
    This same organization would have the latest information 
with respect to equipment, what had become obsolete, what had 
been learned from a recent exercise, and that we would be able 
to exchange that information in an appropriately prompt manner.
    At the same time, what to do is going to depend on how 
people have planned together at the State and local level; and 
how to respond, in terms of the particular type of weapon, is 
going to depend on the facts and circumstances of the time, and 
that is going to have to be judged by the people on the ground.

                  CDC, DOD, HHS INVOLVEMENT WITH NDPO

    Senator Gregg. So far, as I understand it, neither DOD 
[Department of Defense] or HHS [Department of Health and Human 
Services], which have responsibility for a large amount of the 
chemical attack or the biological attack response capability, 
certainly CDC [Centers for Disease Control] and the chemical 
weapons specialist at the Defense Department, have not detailed 
anyone to the office.
    Attorney General Reno. As I indicated, it took some time to 
get----
    Senator Gregg. Do you expect them to detail someone?
    Attorney General Reno. I certainly do.
    Senator Gregg. And you expect those individuals to have a 
significant role? I mean, they are not going to be more than 
just low level folks? They are going to have a role in actually 
being able to carry some weight?
    Attorney General Reno. Here is what we are doing. For 
example, we met recently in New York with public health experts 
on the issue of biological weapons, because it has become clear 
from our stakeholders meetings and from meetings with first 
responders around the country, that the issue of bioterrorism 
is a singularly unique problem. We tend or had tended to link 
bio and chem together, but biological weapons present new 
issues.
    There was concern expressed and I met with the Secretary 
and her staff and CDC to develop a working relationship between 
the Bureau and HHS in terms of how we prepare to identify the 
pathogen involved if there is a biological weapon used, to 
recognize that, unlike a chemical weapon or nuclear weapon, the 
dispersion or the distribution of the weapon or the use of the 
weapon would not be known immediately, and it would begin to be 
evident in ways that it might be masked as an epidemic of some 
disease or something like that.
    These are issues that we are addressing. And as we develop 
the information, as we develop it through research and work 
with academia, this will be made available through NDPO across 
the nation in a way that can be used by all.
    Senator Gregg. I guess my question was more, have you for 
example, talked to the Secretary of Defense and the head of 
CDC, to see if they are going to send somebody over to NDPO who 
has really got some clout?
    Attorney General Reno. I have not talked to them yet, 
because I do not have the thing up and running yet.
    Senator Gregg. But you plan to? Is that the intention?
    Attorney General Reno. I do.

                             NDPO FACILITY

    Senator Gregg. And the physical location of the facility, 
where is that going to be?
    Attorney General Reno. As we were going through this 
process, and before you had authorized the NDPO, there was an 
attempt to rent space. And I think you were somewhat concerned 
by the increase in the space, and I was concerned.
    Senator Gregg. That was actually the House of 
Representatives.
    Attorney General Reno. Then I am mistaken, because I got 
word that you were concerned. At any rate, I was concerned and 
there is space at the FBI building, and I think we should use 
that first and make sure that we use the resources that we have 
as wisely as possible. And then as necessary, expand it.
    Senator Gregg. I do think it makes sense to have it linked 
to the FBI physically.
    Attorney General Reno. You have seen the situation over 
there. The more I can keep that together around the SIOC--the 
Strategic Information Operations Center.
    Senator Gregg. I think that makes a lot of sense.
    Attorney General Reno. And I am trying.
    Senator Gregg. If we can help with that, tell us.
    I have a lot of other questions but we have a lot of other 
members here, and so to give everybody an opportunity we will 
try to limit the first round of questions to 7 minutes or so.
    Senator Hollings has arrived. Do you have an opening 
statement?

                            DECLINE IN CRIME

    Senator Hollings. Madame Attorney General, what happens is 
that I have watched over the years many an Attorney General 
come and go. And for some 33, going on 34 years now, crime has 
risen, except under your administration as Attorney General. So 
I wanted to note for the record that 7\1/2\ years I think in a 
row that crime rates have fallen.
    Is that in your statement?
    Attorney General Reno. I make reference to it.
    Senator Hollings. Tell somebody you better get it and put 
it in your statement, because that is a dramatic result. There 
is no question that it is in every type of crime. And violent 
crime, in and of itself, has fallen some 24 percent. So I 
commend you for that and comment you for more or less restoring 
the integrity of the Attorney General's office.

                        CERTIFICATION OF MEXICO

    Now having given you the good government award, Attorney 
General Reno, are you going to give Mexico the good government 
award one more time? I mean, if you are, evidently you have not 
read this morning's paper. Have you got a subscription to the 
Washington Post?
    Attorney General Reno. Yes, sir. My father taught me never 
to believe everything I read in the newspaper, and he was a 
reporter for the Miami Herald for 43 years.
    Senator Hollings. I believe you believe the fellow is dead, 
do you not? The chief of police of Tijuana?
    Attorney General Reno. I do.
    Senator Hollings. David Dow, the ambassador down there, he 
said that Mexico was the headquarters for narcotrafficking 
crime in this world, just as Sicily was for the Mafia. And that 
is exactly what I am finding. Constantine, the head of the DEA, 
said last time--I am leading up, of course, to this March 
certification here in several days--please give your utmost 
attention to that and let us not play this game that we are on 
top of it because we have got a meeting down there, because 
when you meet with them you are meeting with the criminals.
    There is not any question in my mind it permeates 
everything about that government when, as they said in the 
morning paper, they take over as the chief of police they send 
you first a bag of money. And if you do not accept that, then 
they send you a bag with a gun in it.
    When is that certification due, do you know?
    Attorney General Reno. My understanding is that the 
President must make certification decisions by the first of 
March.
    Senator Hollings. Have you made a recommendation?
    Attorney General Reno. I do not discuss what I have 
recommended to the President.
    Senator Hollings. Would you recommend to me, and this 
committee then? What would you recommend about Mexico?
    Attorney General Reno. Senator, you know that if I told you 
that, then it would be in the context of what I was 
recommending or not recommending to the President and he----
    Senator Hollings. Not necessarily. We have had many a 
Cabinet officer tell us one thing and tell the President 
another.
    Attorney General Reno. Well, I try not to do that, Senator. 
Can I say something about the credit you gave me?
    Senator Hollings. Yes, ma'am.

                         DECREASED CRIME RATES

    Attorney General Reno. You were not here, and I would like 
to give you some of the credit and the committee some of the 
credit, and an awful lot of wonderful people all over this 
country. I am not sure that I should be getting good government 
awards.
    But I do think that the experience that we have had in the 
last 7 years, as I alluded to earlier with the Chairman, we 
have an extraordinary opportunity, ladies and gentleman. We can 
continue our efforts at reducing crime. We can avoid 
complacency, which is what tends to happen when crime rates go 
down. We can continue the mixture of efforts of good solid, 
fair enforcement, intervention, prevention, and aftercare and 
follow up. And we can once and for all end the culture of 
violence in this country. This country is still far too violent 
a nation.
    In the time I have remaining--I think this is the last 
hearing I will probably have before this committee but I will 
be working with you in the months remaining. I want to do 
everything I can to continue that effort and to expand it in 
Indian Country, Senator Campbell. But we have a wonderful 
opportunity because this committee has been great to work with. 
You just do it the right way.
    Senator Hollings. Well, Chairman Gregg has done an 
outstanding job and it has been a pleasure to work with him, 
and I agree with you.

                             INDIAN COUNTRY

    Let me ask you about the Bureau of Indian Affairs, because 
we just had the Secretary of Commerce up. You can tell when 
election time comes around, whoopee for the Indians. We have 
got millions over in the Commerce Department all of a sudden 
for Indians. And now we have got an $82 million increase in 
here for the Indians. That is for a total of $173 million.
    And yet you have got the Bureau of Indian Affairs, and they 
are increasing, it appears to me, for the same thing. Have you 
checked that out?
    Attorney General Reno. Yes, and I am going to tell you on 
that, Senator, that it is not election time for me. When I was 
about 10 years old, an old man walked into the yard and he was 
covered with mud. And he said I see you have two Jeeps and my 
Jeep is stuck in the mud out in the Everglades, would you come 
pull me out? And Daddy and I went and pulled him out. And he 
was a Firestone tire salesman. He had big super balloon tires 
and he knew the Everglades like the back of his hand. And he 
had the Sippy Super Suction Snakebite Kit because he had gotten 
bit so often, and he attached it to the windshield wiper.
    About 2 weeks later he called my mother and he said I have 
got a problem on the Indian reservation, babies are dying and 
sick. There is an epidemic of something and we do not know what 
it is, and they need pumps and blankets. And my mother wrote a 
story that appeared in the paper and got a lot of goods and 
medicine and the like. And the Indians have been my friends 
ever since, not just in election time. I do not even know when 
election time is, in terms of my relationship with the Indian 
community.
    And when I came to Washington, I was concerned that the 
Federal Government, historically, had not done its job with 
respect to its trust relationship in Indian Country. As violent 
crime has come down in the rest of the nation, it has not come 
down in Indian Country. And I am dedicated to doing everything 
I can to work with the Bureau of Indian Affairs, to make sure 
that we do what is right by people in Indian Country.
    When you talk about proliferation, I think the Justice 
Department, respectfully, and I do not mean to be boasting, but 
I think we know better how to do things from a Federal law 
enforcement perspective than the other agencies.
    Senator Hollings. There was a wonderful doctor named Dr. 
Arnold Schaefer from Nebraska who headed up the United States 
Department of Public Health, that did surveys. I happened to 
ask him about the hunger in America. And he said they had 
surveys in 32 countries but never in the United States.
    So we gave him 5 years and $10 million. And he came back 
and he had the report that we had 12 million hungry. And 
working on the thousands of reports that we had over the 
country to do something about it, the Nixon Administration sent 
all those reports down to the CDC, Communicable Disease Center 
in Atlanta, and told them do not communicate. That problem has 
been solved. We had hunger in the days of Christ. We are going 
to have hunger in the days when you and I are dead and gone.
    And told Dr. Schaefer not to say anything about it and he 
could get reappointed. But if he said otherwise, he was going 
to get disappointed. So he did say and he was disappointed, and 
he went up and got a special study of Indian hunger and study 
of health. He got it out of the United States Army. It is very 
interesting how this government works.
    But going into the Indian reservations, he found the chief 
cause for Indian fatality and illness and everything else was 
alcoholism and diabetes. They had nothing to do.
    I got with Senator Montoya and found out, at that 
particular time, that we were paying out $25,000 for each 
Indian. Now we have proliferated. Indians have really gotten 
conjugal here in the last 20 or 30 years because of the 
casinos. Everybody I run into in South Carolina wants to get up 
a tribe and open up a casino.
    But we have put millions and millions in there, and now you 
have got crime, and we find the millions we are paying for 
everything from education, health care, crime control, whatever 
else, on the reservation, these chiefs somehow take the money 
and it does not get down. It is like delivering lettuce by way 
of a rabbit.
    We have got to do something about Indian affairs, but I say 
Mr. Chairman, we cannot get into that. One question about the 
Border Patrol before my time is up.

                             BORDER PATROL

    Is it the case that they do not have any need for any more 
Border Patrol agents? I notice that by the request that is made 
by the INS on the Border Patrol, that they are not asking for 
any really additional Border Patrol agents. Whereas, you are 
only going to hire, in other words, 430 when Congress said hire 
1,000 new agents down there on the one hand.
    And then, as you are looking at up, Attorney General Reno, 
with respect to the pay, I had a note somewhere where they are 
going to take them from a GS-7 to a GS-11. That will give them 
more pay. But then you come around and, instead of giving 
uncontrollable overtime provision, they lose that pay. So I am 
trying to check into make sure I am giving them an increase in 
pay. We are not paying these Border Patrol agents anything, to 
really speak of. They can get a good job elsewhere. We just 
underpay and expect everything of them, to risk their lives and 
otherwise.
    Fine, let us put them up to a GS-11, but do not take away 
the overtime.
    Attorney General Reno. Senator, first with your remarks 
about Indian Country. We are going to do everything we can to 
make sure our money is well spent. And we are going to do it in 
a comprehensive way.
    And Senator, if you saw some of those young people and the 
great work that they are doing, you would be really proud. 
There is such a spirit, and what we need to do is work with 
them to fulfill our trust responsibilities. I am committed to 
doing that, and I am committed to doing it in a way that money 
is spent wisely.
    With respect to the Border Patrol, I share your commitment 
to the issues with respect to the Border Patrol, and to the 
need to enhance border security. I believe that more agents are 
needed along the border. But rather than asking just for new 
agents, the fiscal year 2001 budget request also seeks border 
technology, which enhances each agent's force along the border.
    In addition, INS is having difficulties hiring new agents 
with the economy as good as it is, and some of these isolated 
areas where they have to serve, it has been difficult. But we 
are going to continue our effort and continue to try to provide 
a balanced effort of technology and people power along the 
border.
    With respect to the issue of pay reform, we continue to 
believe that in order to make significant inroads in 
recruitment and retention, a fundamental change is required. 
Those changes include upgrades to the GS-11 level, providing 
eligibility for law enforcement availability pay and 
recruitment bonuses. I think, from all that I have heard, this 
will be the package that is, first of all, fairest, and 
secondly, competitive.
    Senator Hollings. Thank you, Mr. Chairman.
    Senator Gregg. Thank you, Senator. Senator Campbell?

                             INDIAN COUNTRY

    Senator Campbell. Thank you, Mr. Chairman.
    First of all, Attorney General Reno, as this may be the 
last time you appear before this Committee, I want to commend 
you on your years of public service.
    Anybody that runs for office, or anybody that serves in 
your capacity, has to take a lot of heat, as you probably know. 
And you have. So I wanted to thank you for those years and 
certainly the reduction of crime in America, in my view, has 
been at least partly--and a good part--related to your efforts 
and your leadership. So I want to thank you for that.
    Senator Mikulski. Senator Campbell, I want to be associated 
with those remarks. I think they were well stated, and I would 
like to be associated with them.
    Senator Campbell. Thank you.
    Let me talk maybe about Indians a little bit, since you 
mentioned it and since our ranking member also mentioned it. 
You simply cannot turn around things in a culture that has been 
in the form of a forced dependency for 130 years. If you look 
at all the numbers, as you know, Madame Attorney General, 
whether it is unemployment of 60 and 70 percent, with its high 
school dropout, death by violence, fetal alcohol syndrome, 
housing, hunger, diabetes, as you mentioned, all of those 
things. You multiply what is happening in America by anything 
from four and five up to maybe 10 times, and you get what an 
average Indian person has to live with on a reservation.
    That cannot be fixed in just a matter of days. And it 
cannot be fixed simply by providing more money without some 
very clear efficient uses of the money, particularly in self-
help programs.
    I hope I do not offend any people of color in the room, but 
I will tell you that I can take you to places in South Dakota 
where Indians are regularly called prairie niggers in the most 
vulgar sense you can imagine. And if they go to stores in some 
towns, they are followed because everybody knows they steal.
    So I have no problem at all with the emphasis you have put 
in trying to help reduce crime on Indian reservations. And I 
had a couple of questions about it, too.
    One, I sent you a letter about half a year ago. It was 
regarding a poster that had been sent to me from South Dakota 
advertising ``Indian hunting season.'' I do not know if you 
remember that or not, but it was really a mean poster. It 
talked about how you could go out and kill Indians for sport, 
how you could hunt them down like jackrabbits or coyotes or 
something of that nature.
    I received the Department response in January indicating 
you had referred that to the FBI. I was wondering, I have not 
heard anything from the FBI. Have you heard anything back at 
all from them about pursuing how that was printed and 
disseminated?
    Attorney General Reno. I have not heard back. One of the 
things that we have got to make sure that we are careful about 
is First Amendment issues. We look at all of these issues very 
carefully, and I was advised that there may be no basis for 
action.
    Senator Campbell. You mean, people can print fliers 
advocating killing somebody else under First Amendment?
    Attorney General Reno. Wait, Senator. And I said what?
    Senator Campbell. That is what I would have said.
    Attorney General Reno. I said at least we have to follow up 
to see what the facts are. So we are doing that, and I have not 
heard what the conclusion is.
    Senator Campbell. Well, when Louis Freeh [ed: Director of 
the Federal Bureau of Investigation] appears before this 
committee, I will ask him, but I did want to ask you if you had 
heard anything about it.
    Attorney General Reno. Neither of us should really comment 
on what we found or what the status is.

                         TRIBAL LAW ENFORCEMENT

    Senator Campbell. I appreciate that.
    Let me go on then to something else that Senator Hollings 
did allude to. That is the problem we have with some of the 
tribes that are on the Mexico border is that, as I understand 
it, there is much more freedom to move back and forth through 
holes in the fence on reservations than most people realize in 
America, and certainly more than any of us would support. I 
wanted to ask you about that.
    Does the Department include tribal law enforcement 
departments when you are talking about people coming across our 
borders illegally?
    Attorney General Reno. Do you mean tribal law enforcement?
    Senator Campbell. Yes. Does the Attorney General's office 
work with tribal law enforcement to try and decrease that?
    Attorney General Reno. To increase tribal law enforcement 
in dealing with illegal immigration?
    Senator Campbell. Yes.
    Attorney General Reno. I cannot point to specific 
instances, but I am sure that the Border Patrol works with 
tribal law enforcement on a regular basis. What I would like to 
do, Senator, is make sure that I have an accurate answer for 
you, in terms of what precisely we have done.
    [The information follows:]

                           TRIBAL ENFORCEMENT
    Several Indian reservations are located on or near the border with 
Mexico. Two of the tribes on these reservations, the Kickapoo Tribe in 
Texas and the Tohono O'odham Nation in Arizona, have territory adjacent 
to the border. The Blackfeet Indian Nation in Montana and the 
Akwesasne/St. Regis Reservation in upper New York State have territory 
adjacent to the border with Canada. Several other tribes are located on 
reservations near the borders but do not own land directly adjacent to 
the borders.
    Law enforcement activity conducted by Border Patrol agents on 
Indian lands is limited primarily to enforcing immigration laws. Border 
Patrol agents have authority to access, without warrant, any private 
lands located ``within a distance of twenty-five miles from any 
external boundary [of the United States] but, not dwellings for the 
purpose of patrolling the border, to prevent the illegal entry of 
aliens into the United States'' (8 U.S.C. 1357(a)(3)). The authority of 
Border Patrol agents to go onto private land without permission or 
without warrant beyond the 25-mile border area is governed by the 
Fourth Amendment rule against unreasonable searches and seizures. Those 
reservations with borders passing through them present a challenging 
working situation for our agents. Border Patrol agents enforce 
immigration law on borders intersecting Indian lands by coordinating 
and cooperating with tribal law enforcement.
    The Border Patrol has a long tradition of striving to maintain good 
working relationships with tribal authorities and tribal police 
departments. Border Patrol agents working in these areas strive to 
respect Indian lands and authority when entering onto reservations. 
Reports from the field reflect an overall cordial to good working 
relationship with their tribal counterparts. Reports from Border Patrol 
stations along the southern and northern borders indicate that the 
degree of cooperation between them and the tribal law enforcement in 
their respective areas depends largely upon the current tribal police 
chief. Tribal governments, which choose their own police chiefs, often 
dictate the kind of relationship that will be maintained with U.S. 
counterparts. The process of building these relationships is an ongoing 
and time-consuming process for Border Patrol agents. Also, other 
internal and external factors, not related to law enforcement, often 
affect this working relationship.
    In addition, Border Patrol stations near Indian reservations have 
received intelligence concerning smuggling of illegal aliens, 
narcotics, and contraband on these lands. There is growing concern over 
the amount of such smuggling. Depressed economies, diminished personal 
opportunities for residents of reservations, and the proximity to the 
border create an environment that fosters smuggling. With limited 
manpower and difficulties patrolling on some Indian lands, the Border 
Patrol faces a continuing challenge in performing its duties and 
maintaining control in these areas. The Border Patrol will continue to 
do its part in meeting the challenges caused by sensitive issues and 
situations beyond its control by continually trying to build and 
maintain solid working relationships with tribal law enforcement along 
the borders.

                   RESOLVING ISSUES IN INDIAN COUNTRY

    Senator Campbell. Okay. Well, you got into all kinds of 
things, and so did Senator Hollings, dealing with a snake bite, 
alcoholism, and everything else. But there is no question that 
the alcoholism problem on reservations is high. I know that, 
even though some of them have what are called dry reservations. 
And more people get snakebit out of bottles than they do by 
snakes unfortunately.
    When you have a depressed economy, a depressed people, and 
high alcoholism, you are going to have a lot of escapism 
through everything from violent crime to you name it, but I 
know you are aware of that.
    Attorney General Reno. But what is happening is very 
exciting because we had a group come to the Justice Department, 
at our invitation, to discuss alcohol in Indian Country and 
determine what would be the appropriate steps to take. The 
studies that they had done indicated, first of all, that it was 
not genetic or inherent. And I think everybody should 
understand that. Much of it arises from a sense of 
hopelessness. Where can they pursue job opportunities while 
living in distant reservations, being one of the factors?
    What is exciting is that when a tribe comes together, when 
it has resources, when it can deal with the issue, they are 
having some success. I think we can build on that and again, 
working together, make a difference, making sure that Senator 
Hollings is satisfied that we are not wasting money. I am very 
encouraged by what we can do and very encouraged at the spirit 
of the tribes that we have been working with.
    Senator Campbell. Well, I am concerned about it, too, and I 
am not into wasting money. But unfortunately, a lot of the 
Federal regulations make it almost impossible for tribes to be 
able to expand their opportunities, as you probably know. 
Casinos, in some cases, have done that, but only about one out 
of ten is really profitable. A number of them have already gone 
into receivership, as you probably know. The casinos surely are 
not the answer.

                            COPS IN SCHOOLS

    Let me get away from that, if I can. Let me just ask you 
about the COPS in Schools program. I introduced the legislation 
that established the COPS in Schools program. It was signed 
into law October 27, 1998 by the President. And certainly, I 
thank Chairman Gregg for really going to bat for that bill, and 
all the members of this committee who really helped with it.
    But I did want, as my last question in this round, to ask 
you how is the COPS in Schools program going? Because as you 
know, unfortunately, I introduced it before Columbine and it 
certainly did not help there. But I understand that more 
schools are availing themselves to police being resource people 
in the schools. Do you know how that is working?
    Attorney General Reno. I do not have statistics for you. 
All I have are anecdotes that it is working beautifully. When 
you have a police officer in the schools whom the kids and the 
administration and the teachers can work with, it is one of the 
most effective partnerships that can be built in a neighborhood 
or a community. And from that, so much more can come after 
school and in the evening.
    Police officers can be key in teaching kids to resolve 
conflicts without knives and guns and fists. They can become 
mentors. And they can become problem solvers. When the police 
officer is trusted in the community, people will come and give 
him tips that solve some of the more serious crimes.
    It is an excellent way, done right, to build a community 
and bring a community together, rather than split it apart.
    Senator Campbell. I would like to know if you can find the 
number, how many resource officers have been placed. I think 
this committee would appreciate that number.
    Attorney General Reno. You will get that.
    Senator Campbell. I know that not many schools were 
particularly interested before Columbine, and that a number of 
our schools in Colorado are now.
    Thank you, Mr. Chairman, I will relinquish the mike.
    [The information follows:]

             NUMBER OF RESOURCES OFFICES PLACED IN SCHOOLS
    More than 9,900 COPS officers are working to some capacity in local 
schools. More importantly, of the 2,200 full-time COPS in Schools 
officer grants funded to date, over 307 officers have been placed on 
the beat to work full-time in local schools and an additional 70 are in 
training.

                    2001 FUNDING FOR COPS IN SCHOOLS

    Senator Gregg. On that point, Madame Attorney General, we 
cannot find any funds in this budget request that came up for 
COPS in Schools. This committee funded that aggressively last 
year but there is no money in here specifically allocated for 
that. There is $80 million in a general statement for school 
violence, but that is not specifically to this account.
    Attorney General Reno. Let me check on that, Mr. Chairman, 
and understand exactly where we are at.
    More than 9,900 of the 60,000 cops that had been put on the 
streets, to date, are working in local schools.
    Senator Gregg. About one out of six is working in schools 
as volunteer time?
    Attorney General Reno. That is correct.
    [The information follows:]

    The COPS Office derives authority and funds for the COPS in Schools 
(CIS) program through the existing Universal Hiring Program. Therefore, 
within the total amount of hiring funds requested ($422,286,000) in the 
President's Budget, COPS will continue to provide grants to localities 
to hire School Resource Officers, according to the demand for these 
grants.

    Senator Gregg. Thank you. Senator Hutchison?

                             BORDER PATROL

    Senator Hutchison. Thank you, Mr. Chairman.
    Madame Attorney General, the Illegal Immigration Reform Act 
of 1996 is very clear. It states that the Attorney General, in 
each of fiscal years 1997, 1998, 1999, 2000, and 2001 shall 
increase by not less than 1,000 the number of positions for 
full-time active duty Border Patrol agents in the INS.
    This year you requested, in your budget, 1,000. But in 
fact, the President has come back with 430. In fact, in only 
one of 5 years did the President actually request 1,000 agents 
and in none of those years did you actually produce 1,000.
    I think the lack of emphasis of this Administration on 
keeping illegal activity from coming across our southern border 
is appalling. I share the view of many on this committee about 
your integrity. But the lack of emphasis on Border Patrol is a 
lapse for which we are paying dearly.
    In fact, it is estimated that $10 billion in illegal drugs 
has come across our border in the last year. One billion 
dollars was apprehended. So the other $9 billion is somewhere 
in our country.
    I want to ask you a direct question. We included an 
amendment in this appropriation bill in language that said if 
we did not hire 1,000 new Border Patrol agents, as was 
required, by June of this year that the money would be used for 
an increase in pay for non-supervisory agents serving at the 
GS-9 level to the GS-11 level. I wanted to ask you what is the 
progress of hiring this year. And do I have your commitment 
that this pay raise will be made in June if you have not 
reached the 1,000 goal?
    Attorney General Reno. First of all, let me address your 
earlier comments. I appreciate your comment about my integrity 
but I think I have just been blamed for all the drugs and the 
illegal activities. If I am responsible for it, I accept the 
responsibility.
    But I think what we have been able to do in reducing crime 
might be a good model for what we can do along the borders, 
both southern and northern. When I came into office I found an 
agency that had been sorely neglected. It did not have 
resources. It did not have cars, in some instances, for Border 
Patrol agents. It did not even have radios in some instances. 
Others did not have vests.
    We have built the Border Patrol significantly in these last 
7 years. We have reduced crime in some of the areas along the 
border, and we have tried to deal with these issues. I think it 
is important that we look at the whole history and work 
together to try to address these problems.

               BORDER PATROL PAY REFORM VERSUS PAY RAISE

    Now with respect to the issue of pay, we have proposed a 
comprehensive pay reform. I think the best way to do that is to 
work together to try to develop that. And I will commit to 
doing that, and I will commit to coming by and talking with you 
and doing everything we can to do it the right way.
    Senator Hutchison. Will you comply with the intent of 
Congress that the GS-9 level will go to GS-11 in June if you do 
not reach the 1,000?
    Attorney General Reno. I would be happy to check and see 
and come by and tell you what I can and cannot commit to.
    Senator Gregg. Senator, on that point could I just get a 
clarification? Because Senator Hollings asked the same question 
and I thought it was a good question. Are you offsetting the 
pay increase from GS-9 to GS-11 by eliminating overtime?
    Attorney General Reno. But it is starting in October. It is 
not June.
    Senator Hutchison. But Madame Attorney General, our 
provision last year said if you did not have the 1,000 by June, 
the money that would not be spent that we allocated for the 
1,000 would go for the pay raises. That is for this year. That 
is in lieu of the October effect of the 2001 budget.
    Attorney General Reno. As I have said, my understanding is 
that that is report language. What we have proposed is a 
comprehensive pay reform package. What I would like to do is 
sit down with you, go over what you propose, go over what the 
comprehensive pay reform package is, and see how we can do it 
as wisely as possible.
    Senator Hutchison. Madame Attorney General, it was report 
language. But the absolute intent of Congress was for the money 
that you could not spend that is in our budget in June, if you 
were not going to be able to spend it on hiring new agents, 
that it would immediately go to the GS-9 increase up to GS-11. 
Because we know we have retention problems with this level of 
employee.
    And we, as a Congress, directed you to do that. Why would 
you consider it necessary to wait until October when we have 
not met the 1,000 goals yet in your administration?
    Attorney General Reno. I will be happy to address it and 
get back to you and see just what should be done. And if I 
think that the pay reform package best meets the needs of 
reducing attrition, attracting the best people, maintaining the 
Border Patrol in the best way possible, I will come talk to you 
about it.
    Senator Hutchison. Madame Attorney General, obviously you 
are not going to----
    Attorney General Reno. I am not trying to be obstinate, I 
just----
    Senator Hutchison [continuing]. Keep the word today that we 
have given you clear mandates to keep. I cannot, in my wildest 
imagination, imagine what could be more important for the 
expenditure of the funds that we have allocated for hiring 
1,000 new Border Patrol agents, if that money is not going to 
be spent mid-year, that you would not take the step directed by 
Congress for you to take, which would be a bold statement that 
border control is important in this administration, when you 
have all the evidence that illegal drugs and illegal 
immigration is occurring in droves.
    I understand that you are clearly not going to give us your 
word today.
    Attorney General Reno. You do not want me to give you my 
word today because if I had given you my word, Senator, and I 
backed off on it, I would want you to really speak sharply to 
me.
    Senator Hutchison. How about giving us your word today and 
keeping it?
    Attorney General Reno. What I have found is that it is 
better not just to react, but to sit down, look at it, come 
talk to you, hear you, and then tell you what I can and cannot 
do. And then if I tell you I am going to do something, you 
ought to expect me to do it.
    Senator Hutchison. Madame Attorney General, you have been 
directed by Congress, as of October 1 of last year, that this 
is a priority, that if you did not have the hiring by June 1, 
that this is where we believe the money should go to address 
retention problems in the Border Patrol. It is not like I 
sprung this on you this morning. This has been part of the bill 
that you have been living with since last October.
    Attorney General Reno. And what I am suggesting is my 
understanding that that was report language. I would just like 
to sit down and give you my reasons for it after I have 
reviewed everything, and then try to do what I say I am going 
to do.
    Senator Hutchison. With all due respect, Madame Attorney 
General, report language is the will of Congress, and I would 
hope that you would comply with it, even if you will not agree 
to comply with it this morning.
    Attorney General Reno. Well, I am going to do my best to do 
what I think is right and I am not trying to be obstinate with 
you. I am just trying not to make snap judgments when we have 
tried to carefully think about a pay reform package.
    And Senator, I bet you do not know any other--you talk 
about a commitment to border issues. I bet you do not know any 
other Attorney General that has been to the border as much as I 
have, or who has tried to back up the Border Patrol as much as 
I have. They do a great job and we are going to do everything 
we can to give them the resources, not just on the southern 
border but the northern border, to do the job.
    Senator Hutchison. Madame Attorney General, I think the 
record of this administration is abysmal on our southern 
border. We have given you a directive for 5 years to hire 1,000 
new Border Patrol agents. And when I asked Doris Meissner if we 
were giving incentives for Spanish language proficiency, she 
said no because we have teaching classes in the INS to teach 
people basic Spanish.
    That is outrageous, when we have so many people who would 
be qualified and could hit the ground running. We did not even 
test on the border. We required people to go up to Dallas and 
Fort Worth to have the testing for Border Patrol. These are 
things that we brought up because we heard it from the base 
down on the border, where we had the most resources.
    I just have to say that I think success in meeting the 
mandate of Congress to increase Border Patrol by 5,000, when 
Barry McCaffrey says we need 20,000 and we are not halfway 
there, I do not think the record stands for itself. I do not 
think this is a surprise, you have had 6 months to comply with 
the June 1 deadline to raise the GS-9 to GS-11. And I just hope 
you will consider it.
    Senator Gregg. We are going to have to move on.
    Attorney General Reno. Senator, there are 150 percent more 
agents on board now than there were in 1993.
    Senator Hutchison. Woefully short.
    Senator Gregg. We are on to Senator Lautenberg.
    Senator Lautenberg. I am going to defer, if I may Mr. 
Chairman, for one moment that I have promised to Senator 
Mikulski.

                      REMARKS OF SENATOR MIKULSKI

    Senator Mikulski. I thank the Senator from New Jersey.
    Madame Attorney General, I have to leave to be with 
Governor Glendenning, who is hosting a meeting with all of the 
governors with the members of the Senate. But I could not leave 
today without thanking you. Thanking you for the outstanding 
job you have done as Attorney General, the service you have 
provided to the Nation, the excellent team that you have had 
working with you, and I do know that we are safer, our streets 
are stronger, our borders are stronger than when you took 
office.
    So I just wanted to take this opportunity to thank you, 
wish you Godspeed, and lots of good health.
    Attorney General Reno. Thank you very much, Senator. It has 
been a pleasure to work with you.
    Senator Gregg. Senator Lautenberg?

                     REMARKS OF SENATOR LAUTENBERG

    Senator Lautenberg. Thank you very much, Mr. Chairman.
    Attorney General Reno, I am glad to see you. You and I are 
in the senior class and we will be graduating with this term. 
It is kind of the end of our relationship at the U.S. Senate 
campus.
    I know that all of us feel that you leave having compiled 
an illustrious and distinguished record and I commend you for 
your tenacity and for your ability to get the job done. The 
statistics only serve to substantiate the views that we have of 
the job that you have done. I admire so much the fact that you 
seem so even-tempered through it all. I am not sure that if 
some of us were on that side of the table, the volume of 
response, and perhaps the acidity of the language might have 
changed. I commend you for that, as well.

                              GUN VIOLENCE

    I want to get onto a question about gun violence. In your 
statement, you point out the fact that there are still 33,000, 
approximately, gun deaths a year in this country, far, far too 
many, and especially if you compare us to other societies 
around the world. One wonders why we cannot do better there. We 
keep on thinking, at least I speak for myself here and I am 
sure for many of my colleagues, I keep thinking that we have 
seen the ultimate outrage, the ultimate assault on our families 
and our children and our sensibility. You would think that that 
would turn into a positive legislative response instead of the 
old saw that says guns do not kill, people kill. It is so trite 
and so unbelievable.
    And yet, we cannot seem to move sensible gun legislation in 
this country. The Second Amendment does not say that you can 
buy an unlimited number of guns or that you can store them any 
way you want. There are no specifics about what you have to do 
with the guns, and we have every right therefore, to adopt 
reasonable gun safety measures even if one said okay, take the 
Second Amendment as it is. But at least we are going to make 
sure that if you want to buy one of those things you have to 
have a background check.
    The thing that I have worked on so hard was closing the gun 
show loophole. Rather than for the gun lobby to come in and say 
okay, look, this is not going to hurt us. It is not going to do 
anything to diminish our love of guns or our support for gun 
ownership. Just common sense. So instead of trying to 
cooperate, the response is always negative, some ridiculous 
response that says that we want to take away everybody's gun.
    There may be some people who would like to do that, but we 
know that that is improbable, if not impossible.
    I want to ask you this. Do you hear from police officers, 
Federal law enforcement people, people who are working in the 
field, people who are out there working to enforce the law, do 
you hear from them about the gun show loophole?
    Attorney General Reno. In these last months and year, I 
have heard from a whole range of people about the gun show 
loophole, and I appreciate your leadership in trying to close 
it.
    Senator Lautenberg. I thank you. Again, I am still trying 
to fathom what it is that prevents the gun lobby from simply 
saying yes, go along with this. Why the urgency to get that gun 
immediately, especially from unlicensed dealers. You could be a 
member of the 10 most wanted list, go up to the counter, put 
your money down, and no one will ask you a question, not one 
question. With regard to the terrible tragedy at Columbine, 
Robin Anderson, recently testified before the Colorado 
legislature that she went with Klebold and Harris to a gun show 
and they looked for gun dealers who they knew would not ask 
them one question about who they were or anything like that. 
She said it was too easy to buy guns.
    What in the world can possibly be wrong with background 
checks at gun shows?
    Attorney General Reno. We have kept guns out of the hands 
of criminals through the checks that have been run. Why they 
should not be run with respect to gun show situations is beyond 
me.

                             THE BRADY LAW

    Senator Lautenberg. What do you think would happen if law 
enforcement was limited to even shorter periods for background 
checks? Let us say 24 hours to conduct criminal background 
checks on gun buyers? Would that impair their ability to run 
even the most cursory check?
    Attorney General Reno. The Brady Law now currently allows 
law enforcement up to 3 business days to complete a background 
check on a prospective gun buyer. This is very important. But 
it does not mean that all buyers have to wait 3 days.
    In fact, about 75 percent of gun buyers wait less than 3 
minutes, and 95 percent of all gun buyers have their checks 
completed in less than 2 hours. But for a very small number of 
gun buyers, about 5 percent, that 3 days can make a significant 
difference.
    Senator Lautenberg. And if we were to reduce that, because 
I have seen complaints registered by the FBI and by the BATF 
that if we were to shorten this period--as it is there are a 
number of people who escape through the loopholes now with 
shorter periods for background checks, the number of prohibited 
people getting guns would go up substantially.
    In your view, are stronger laws necessary to reduce 
juvenile crime? Are stronger gun laws necessary? Or is it 
simply a cultural thing, in your judgment?
    Attorney General Reno. I am not sure I understand.
    Senator Lautenberg. The statements that so often come out 
are that we should just enforce existing laws, we do not need 
to create more laws. Does that make sense to you?
    Attorney General Reno. Those people suggest, I think, that 
they would rather see the crime committed and then somebody 
take action, rather than trying to prevent it from happening in 
the first place. And I think sensible approaches to the 
purchase and use of guns can prevent, as we have seen what the 
Brady Law can do, can prevent guns from getting into the hands 
of people who are not lawfully entitled to have them.
    Senator Lautenberg. I close, Mr. Chairman, and thank you 
for your indulgence, with a statement about the law that I 
authored to take guns away from domestic abusers and the battle 
that we had, and the names that I was called. We have stopped 
about 33,000 people, since that law has been on the books, from 
getting guns because of spousal abuse. We have the trauma that 
a child experiences when a mother typically, or a girlfriend, 
has a gun pointed at their head.
    Thank you, Mr. Chairman.

                        BORDER PATROL PAY RAISE

    Senator Gregg. Before I turn to Senator Domenici, I would 
just like to note that I would like to work with Senator 
Hutchison, Senator Hollings, and I am sure other members of 
this committee, on this Border Patrol issue. Should there be a 
supplemental, I would think we would want to put in the 
supplemental language directing that the pay raise begins on 
June 1 and that it not be offset by the overtime issue.
    Senator Hutchison. Thank you very much, Mr. Chairman, I 
appreciate that.
    Senator Gregg. Senator Domenici?

                           RIO ARRIBA COUNTY

    Senator Domenici. Thank you, Mr. Chairman.
    Madame Attorney General, first, I want to thank you for the 
joint effort that you involved your department in with regard 
to Northern New Mexico and the black heroin scourge that 
existed in a county up there called Rio Arriba County. As a 
result of the effort, a very large arrest has taken place of 
open heroin dealers. The community is much calmer. They are 
working on some long-range plans. I just hope that whomever you 
have that is looking at that would continue to look at it and 
continue to have some cooperation with state, FBI, and other 
agencies.
    I did not bring it to you because I wanted to bring a 
county in New Mexico to get special attention, but rather it 
was a county where more deaths were occurring because of black 
tar heroin, more overdose deaths, than anyplace in America. I 
thank you for that.
    Attorney General Reno. Senator, I thank you for doing it 
because what we have learned there, as we are learning across 
the Nation, when we approach something from a comprehensive 
point of view, whether it be meth getting a toehold in a new 
community, or something such as what occurred in New Mexico, 
and go after it in terms of vigorous enforcement, but develop 
long-range plans that can address treatment issues as well. It 
can be extremely successful and I thank you for your 
leadership.

                     SOUTHWEST BORDER DRUG PROBLEM

    Senator Domenici. Madame Attorney General and fellow 
senators, I was asked by the judges from the Federal districts 
that include California, Arizona, New Mexico, and Texas, to 
attend a conference they held in Albuquerque, New Mexico. That 
conference was held because they wanted to discuss and bring to 
the public attention, and to your attention and other 
officials, that 30 percent of all of the criminal indictments 
are taking place in those four States. Of all America, because 
of the pressure on the drug pushers and the like, those four 
States are getting 30 percent of the Federal crime indictments 
and prosecutions.
    Clearly, they are not equipped, either at the court level 
in terms of sufficiency of judges, or the marshal level, or in 
incarceration on an interim basis by the Marshals Service, to 
handle such a huge caseload. The more we put pressure on, the 
more we follow the lead of Senator Hutchison and others, and 
put more people guarding our borders and making arrests, the 
more these four districts feel this inordinate pressure from 
having to try cases beyond their capacity.
    I would like very much, since you do have some extra money 
in the budget, the President asked for some, I would ask you to 
look at those four areas. It is not New Mexico specifically, 
but Arizona has a terrible problem, the Texas courts have an 
enormous problem, so does California. We need somebody looking 
at setting some priorities.
    Otherwise, what is going to happen is we are going to 
continue to put the pressure on, and then in a couple of years 
they are going to be saying they cannot try any of them, or 
they can only try 10 or 15 percent. This is a rather serious 
problem. I wonder if you know about it? And if you do, are you 
working on it? And if you do not, would you?
    Attorney General Reno. Yes, we do know about it, because we 
are the ones that have increased the filings. Alan Bersin was 
the head of the Southwest border, he was my representative down 
there, and he designed the system. So we initiated it to try to 
deal with the issues that we share a concern for.
    We have got to plan all the way down the line to do it, 
because, as we are successful in the courts, then we will see 
an increase in the prison population.
    But the other thing we have got to really focus on, as 
well, is that it is not just the Southwest border, in terms of 
illegal aliens, in terms of drug smuggling. It is the country, 
and we have got to make sure that we have got a balance, based 
on drug related crime, and crime related to illegal aliens.
    Senator Domenici. I understand that, but I just think it is 
relevant to our Nation that 30 percent of all of the criminal 
trials are occurring there. Regardless of what it ought to be, 
they are there. I do not think they have the capacity to handle 
them. I hope we will be looking at it, and I hope you will be 
looking at it.
    Attorney General Reno. We have looked at it very carefully, 
and we are trying to do everything we can.

                         INDIAN JUDICIAL SYSTEM

    Senator Domenici. Senator Campbell, I was not here when you 
spoke of the criminal justice system, or lack thereof, on 
Indian reservations. I want to tell the Attorney General, I 
went to Indian Country, in particular Navajo country, to look 
at their judicial system as part of a 2-day trip to the largest 
Indian tribe in America.
    I would challenge anybody that is concerned about Indian 
justice and the Indian courts, to go look at what the largest 
Indian tribe in America has to house its judiciary. We are 
expecting them to have a court system. We pay a little bit of 
money for a court system. It is evolving.
    Senator Hollings, if you went down there and said where 
does your Supreme Court sit and where does your District Court 
sit for jury trials, you would be absolutely amazed at the kind 
of facilities they have. They are no more symbolic of what 
justice ought to be and hold something out to people. They are 
little huts and little buildings that have been added. Jury 
trials are held in a quonset hut-type facility that, in 
America, we would immediately say that is exactly the wrong 
symbol to give about the importance of justice, to have such 
second-rate facilities.
    So I know there is more money in this year's budget for 
those kinds of things. I wonder if you would just take a look, 
as you answer some of my specific questions, at what is going 
to be done in Navajo country with reference to their court 
system, which I think is in desperate need.
    I will submit the other questions as to specifics that I 
would like to ask, about how you are allocating resources in 
the court system.
    Attorney General Reno. Thank you, and I will get back to 
you on specifics for Navajo country. But you will see, in our 
budget request, a significant increase requested for law 
enforcement in Indian Country.
    Senator Domenici. We did not get quite what we asked the 
President. We had a big meeting with him and we got less of an 
increase, but we got something like a $90 million increase for 
criminal justice.
    [The information follows:]

           IMPROVEMENTS TO JUDICIAL SYSTEM IN INDIAN COUNTRY

    There is a severe lack of resources for law enforcement in Indian 
Country. Many of the 1.9 million Indians living on or near Indian lands 
do not receive even minimal law enforcement services. Indian 
communities lack sufficient trained law enforcement personnel, have few 
adequate jails, and face chronic under-funding of their justice 
systems.
    The impact of strengthening tribal justice systems is far-reaching. 
It benefits Native Americans in Indian Country and raises the level of 
respect for their adjudicatory role with Indians, non-Indians, and 
state and Federal judges. Tribal justice systems are essential 
mechanisms for resolving civil and criminal disputes and family 
problems arising on Indian lands. Strong tribal justice systems also 
encourage the development of, and investment in, Indian land by Indians 
and non-Indians. Moreover, interaction with Federal and state judges on 
Indian issues will improve communication and coordination between 
jurisdictions, which are intimately connected, but know very little 
about each other. Informed decisions by tribal, Federal and state 
judges are essential in the delivery of justice for Indian people and 
others residing on Indian lands.
    In the 2001 President's Budget request, OJP proposes the following 
initiatives:
    Indian Tribal Courts.--In both 1999 and 2000, $5 million has been 
appropriated for the Tribal Court Program. In 2001, a $10 million 
enhancement is requested for this program, bringing the total program 
level to $15 million. This program is designed to provide resources for 
the necessary tools to sustain safer and more peaceful tribal 
communities by focusing on juvenile and family issues, as well as non-
traditional approaches to justice, enhancing the administration of 
civil and criminal justice on Indian lands, and encouraging the 
implementation of the Indian Civil Act by tribal governments. While 
promoting greater cooperation among tribal, state, and Federal justice 
systems, this program assists tribal justice systems to coordinate 
programs and services within its tribal structure with law enforcement, 
victims services, treatment providers and others. Tribal Courts also 
assists with technology development to ensure that tribal justice 
systems can communicate within the tribal and non-tribal justice 
community. Just as in other parts of the country, crime has spread on 
reservations at a rapid rate, thereby increasing the need for criminal 
adjudication in tribal courts.
    Tribal Criminal and Civil Legal Assistance.--$6 million is 
requested to develop and enhance the legal services provided to Indian 
tribes through a mix of program funds, training and technical 
assistance, and program research and evaluation. The $6 million 
requested will provide for the following:
    $4.5 million, for the Tribal Criminal and Civil Legal Assistance 
Program, will provide Indian tribes, tribal consortia, and private/non-
profits legal services organizations serving a reservation-based 
constituency resources to develop or enhance their capacity to provide 
criminal and civil assistance.
    $1 million, for discretionary grants to the 31 existing Tribal 
Colleges to create, develop and enhance a 2-year curriculum on 
paralegal studies, law advocate studies, indigenous justice systems or 
other areas directly related to criminal and civil legal assistance.
    $500,000 will support a variety of activities, such as, training 
and technical assistance, research and evaluation, and data collection.

                RADIATION EXPOSURE COMPENSATION PROGRAM

    Senator Domenici. My last question has to do with something 
way over on the other side of the spectrum, the radiation 
exposure compensation program. Believe it or not, you have a 
big hand in that also, along with all these other things we are 
talking about.
    We are being asked to put $7.2 million into the radiation 
exposure compensation trust fund. Will you just generally tell 
me, why do we need that now? Last April, I would just add, you 
finalized additional regulations under that exposure act, for 
which $21.7 million was requested by the administration. Why do 
we need this urgent amount at this point?
    Attorney General Reno. Here is what I understand. We 
project a trust fund shortfall of approximately $7.2 million, 
as noted. We requested the $21.7 million. That request assumed 
implementation of regulation changes and enactment of statutory 
changes similar to those proposed by the administration in 
1997.
    Congress appropriated $3.2 million. The $3.2 million 
appropriation plus carry forward from 1999 and interest 
provided $11.8 million in availability. Payments of about $19 
million are projected, assuming about 228 awards will be 
approved in the year 2000. The resulting shortfall is the 
estimated $7.2 million.
    The conference report accompanying the fiscal year 2000 
Appropriations Act stated that the administration has expanded 
the number of claimants, through the issuing of regulations 
when Congress has not chosen to do so through the normal 
legislative process. No additional funding is provided to cover 
the claims of the individuals provided for.
    Congress took these actions because it mistakenly assumed 
the Department of Justice modified the regulations in order to 
circumvent the legislative process. In fact, the modifications 
did not expand the program beyond Congressional boundaries, nor 
create a new category of claimant. The changes were made to 
keep the program in line with the current consensus of medical 
opinion. Congress delegated to the Attorney General the 
authority to issue regulations in Section 6 of the Radiation 
Exposure Compensation Act. Because the regulations carry the 
force and effect of law, the program cannot legally distinguish 
those claims that can only be approved under the original 
regulations, as was suggested in the act, in the report.
    Senator Domenici. I have about six more specific questions, 
but I will submit them on that issue. I will just close by 
submitting three written questions.
    We are asking questions about the Government Performance 
and Results Act of every subcommittee, because there is no use 
having put that on the books and then not get some actual 
results, in terms of objective analysis. So I have some 
questions about that, and also about the expenditures that you 
have for the first responder training program. It is easy to 
forget about, but if we have one of these national disasters, 
we will be asked what happened to the first responder program.
    So I am wondering whether you are allocating the money 
correctly, and I have a few questions on that issue.
    Attorney General Reno. Thank you, sir.
    Senator Domenici. Thank you very much, Mr. Chairman.
    Senator Gregg. Thank you, Senator.
    First responder is a big issue and this committee has tried 
to be very sensitive to that, and we certainly want to work 
with the Senator from New Mexico to make sure, if he has got 
some concerns, that we follow up on them.

                  ELIMINATION OF MAJOR GRANT PROGRAMS

    I want to address quickly here the COPS program, because 
first off, as I look at the budget as it was presented to us, 
there are some fairly significant reductions in what this 
committee has traditionally funded in order of law enforcement 
to assist local law enforcement agencies.
    For example, the local law enforcement block grant is not 
funded at all. That is a $500 million item. The juvenile 
accountability incentive block grant is not funded at all, and 
that is a $250 million item. And the State Prison Grants 
programs is funded $75 million, and that is a $686 million 
item. That means you are talking somewhere in the vicinity of 
$1.3 billion in funding that has traditionally been going to 
local agencies.
    I guess my first question is why did you eliminate those?
    Attorney General Reno. First of all, I would like to just 
take a personal moment to tell you that I am the one, perhaps 
more so than anybody else, that is not going to forget about 
first responders. I have a nephew who has been a city of Miami 
fireman for a year now, and I have seen some of the 
circumstances. And I will assure that for as long as I am here, 
I am not going to forget first responders.
    With respect to State and local, the juvenile 
accountability grants and the law enforcement block grant, what 
we have tried to do, in general terms, is react based on 
principles of federalism, recognizing--and I think most 
everybody on the committee would agree--that State and local 
law enforcement should not be dependent in a permanent way on 
the Federal Government, but that it should be able to operate 
independent and perform its functions based on State revenue 
and State resources and local resources.
    Where the Federal Government can play a very important role 
is addressing emergency situations, addressing new ideas, to 
try them out, to see if they work. Examples being the drug 
court, the COPS program, to use the monies as wisely as 
possible to ensure that we are able to evaluate what is done 
with the money and make sure that we are spending it as wisely 
as possible.

                              COPS BUDGET

    Senator Gregg. Let me stop you there. If that is the case, 
if that is the philosophy behind the cuts, then I guess my 
question is why give the COPS program a significant increase? 
The appropriated funds last year for the COPS program were $595 
million. You have asked for a $740 million increase in 
appropriated funds for the COPS program.
    The National Police Chiefs Association has made it fairly 
clear. Now we have reached the 100,000 COPS on the street last 
May, so the 100,000 commitment has been reached. You talk to 
the police chiefs, and they will say very bluntly, and in fact 
I think it is their public policy right now--I may be wrong, 
but I do not believe I am misquoting it--their public policy is 
that they do not need more officers on the street funded by the 
COPS program.
    What they need is the technology assistance and the 
capacity to get the officers already there skilled, through 
training and technology so that they can fight crime.
    So I guess my question is, if your logic is that you should 
not be undertaking local responsibility, and you view LEA [Law 
Enforcement Assistance], Byrne grants, and the prison grant 
program as local responsibility, and if you have local police 
officers saying what they want for local responsibility is 
things like LEA and Byrne, which both address the technology 
and the training issue, then why would you come forward with a 
request that significantly increases the COPS program, which is 
putting police officers on the street, which is the ultimate 
local responsibility?
    Attorney General Reno. I have been hearing from some other 
people, if you have not been hearing, that people still need 
COPS in order to address the issues.
    Senator Gregg. Is this not a local responsibility, COPS? Is 
not putting a police officer on the street the ultimate local 
responsibility, which you just said was not an appropriate 
action for us to pursue in these other accounts?
    Attorney General Reno. I think on a permanent basis. But as 
I said earlier, Senator, we have a chance to end the culture of 
violence in this country, not to let up until we really turn 
this around, not let up until we develop a capacity in this 
nation to deal with violence so that we are on the equivalent 
with most other large nations in the world, large industrial 
nations.
    We are trying to do it wisely. For Indian Country, that has 
not had an opportunity, we are trying to address the issues 
there, which go to personnel needs. For the school resource 
officers, we are trying to address that through the universal 
hiring program. We are trying to use it as wisely as we can. 
And we have also increased technology funding from $230 million 
in fiscal year 2000 to $350 million in fiscal year 2001. We are 
working with the International Association of Chiefs of Police, 
and other police organizations, to make sure that we use the 
technology as wisely as possible, to avoid duplication, to 
avoid fragmentation, and to make sure that we are linked in 
terms of communication, in terms of information exchange, and 
in terms of the capacity to use DNA for the remarkable tool 
that it is.

                INCONSISTENCY IN FUNDING GRANT PROGRAMS

    Senator Gregg. I appreciate all that, but I do not think it 
gets to the underlying question, which is there is an 
inconsistency here. Not only are you suggesting that we hire 
more police officers, above the 100,000 which were originally 
proposed, but now you are suggesting we start a community local 
prosecutor's office and we start hiring local prosecutors and 
police officers.
    And yet, at the same time, you are saying we should not be 
funding LEA, block grants, Byrne grants, and prison grants, 
which are all part of the continuum of law enforcement. There 
is a disconnect here.
    It seems to me that you are initiating something like 19 
new programs under the COPS program, the community 
investigators, prosecutors.
    Attorney General Reno. There is not a disconnect, because 
what we are trying to do is to show that the experience with 
community policing can be enhanced and that, as a project for a 
community, let us look at community prosecution. Let us see 
what we can do when a community is given enough resources in a 
focused way to see what happens when a neighborhood knows who 
its prosecutor is, knows the judge, knows the police officer, 
knows the probation officer, and works together with them in 
building trust to bring a community to a safer situation and to 
a less divisive situation.
    And I am not suggesting the Federal Government should fund 
the community police officers forever and ever, nor am I 
suggesting that they fund community prosecutors or community 
police officers. But these are examples of what we can do to 
show that something works. Or maybe it will not work and we 
scrap it.
    Senator Gregg. Let me just make this policy point. You have 
eliminated three of the major funding streams that run to the 
local police force. You have increased and created a brand new 
initiative in the area of the COPS program, not only in adding 
more cops above what was originally requested, but adding this 
community prosecutors program and 19 other programs on top of 
that.
    And at the same time, you have not funded the Border 
Patrol. The 3,000 we originally requested is now, I do not know 
how far behind you are, but you have reached maybe half of 
that. And we need more than that. We need more than the 3,000. 
And that is a Federal responsibility. Protecting our borders is 
a Federal responsibility.
    So if you are going to use your logic on LEA and Byrne and 
State prison grants, we should use it on COPS, and we should 
probably take all this money that is being proposed here, new 
program money, and put it into the Border Patrol, which is a 
Federal responsibility. We are not doing well there and fully 
fund the Federal Border Patrol. Fund them so that they are 
adequately paid. GS-11, grade 11 is not even an adequate level.
    As a result, I am thinking, and this is just something I am 
germinating. I am thinking maybe I will accept your LEA numbers 
and when the police officers come to me and complain I will 
say, hey, it is an administration decision. Maybe I will accept 
your Byrne number and when they come to me I may say, hey, this 
is the administration position. And I may even accept your 
prison grant program and when the governors come to me, who I 
am going to see in a few minutes, I will say that was the 
administration's decision.
    At the same time, I may say we are not going to do any of 
these new programs. We are going to fund the COPS program in 
the way it was supposed to be. And let us really put some 
serious money into the Border Patrol where it should be, which 
is a Federal responsibility, and follow your logic to its 
appropriate conclusion.
    Attorney General Reno. I like the way you take my logic, 
but I take it a different way. So let us look at it from the 
point of view of how we can hire the Border Patrol, how we can 
keep them, how we can train them, how we can deal with it, and 
I will work with you in every way possible to achieve that.
    Senator Gregg. Senator Hollings.

                      HIRING BORDER PATROL AGENTS

    Senator Hollings. Let me, Madame Attorney General, get this 
record clear because you indicate you intend to hire 1,800 
agents this year. Only 430 positions are for the 1,000 
authorized and funded for the year 2000. The money is there, as 
Senator Hutchison has pointed out. And 600 of those positions 
are for the positions authorized and funded back in fiscal year 
1999. So the remaining 770 positions are for attrition.
    How do you justify proposing only to hire 430 for the year 
2000 when Congress directed you to hire 1,000? I think that is 
what other senators want to know and what I would like to know.
    Attorney General Reno. What we are faced with is the fact 
that it is very difficult to find people who want to go out to 
the border, or go to lonely spots along the border, in a time 
of very low unemployment, in a time where they can find jobs in 
other places. We are constantly trying to review our recruiting 
procedure to see what can be done along those lines.
    Senator Hollings. Well, you start them off at a GS-7, at 
$28,000. That is one of the obvious reasons you cannot get 
them.
    Why they are able to hold on to any of them is this 
overtime pay, what we call administrative uncontrollable 
overtime provision. That is fine. But when you try to buck them 
up to a GS-11 and give them almost $42,000, I am told that you 
are then going to lose the law enforcement availability pay 
provisions which eliminates that overtime. In reality, they 
could actually lose money from the switch, rather than make 
more money.
    Can you look into that, or respond now? Maybe the Assistant 
[ed: Assistant Attorney General Stephen Colgate] here knows the 
actual fact, but that is what I am told, that they are going to 
end up, when it sounds better, they are going to go up to a GS-
11, they are going to be eliminating the overtime and so they 
are not going to get as much.
    Attorney General Reno. Senator, my understanding of the pay 
reform package provides not only for the upgrade to GS-11, not 
just for the availability pay, but also for a special factor 
that will adjust for the administratively uncontrollable 
overtime. I would like for Mr. Colgate to come by and show you 
just what is involved, so that you will feel comfortable with 
it.
    Senator Hollings. Well, the reality is that we are getting 
an administration some day that will put in a Marshall Plan for 
Mexico. There is not any question, Mexico is our friend, our 
neighbor, our responsibility. We have been going over the same 
drill year in and year out. They bring in these presidents and 
the American Enterprise Institute gives them the outstanding 
industrialists of the year award, and everything else like 
that, whoopee for NAFTA. And they end up as a fugitive from 
justice.
    The whole thing is crooked. Under NAFTA they are making 
less pay. We have lost jobs there. It is corporate corruption 
galore down there, as well as the crime. And so it will 
continue on. You just smooth over that 2,000 to hire enough 
Border Patrolmen until you get some basic change in the Mexican 
government down there. It is going to cost money and it is 
going to take money that I am willing to spend. But rather than 
spend it down there to finance Wall Street, because that is 
what we did when they devalued the peso, the $12 billion went 
down to Mexico and then back on up to Wall Street and they got 
no advantage or improvement from it.

                           ATTORNEY OVERTIME

    Talking about the retirement, though, in pay, we have got 
almost a cancer, I think, in these assistant U.S. attorneys. 
They have got 9,000 attorneys who have joined in a suit for 
overtime. Can you tell the assistant U.S. attorneys that they 
come for public service and not to make money?
    We Senators know how to make money. We can get out and make 
more. I have had two leave my staff in the last year, making 
$400,000 and $500,000, so we know how to go and make money. We 
get these bright young folks that come in, they get the 
experience, they are willing to try cases and everything else, 
but now we have got almost a tenure. We passed a bad law back 
in 1988 and gave them tenure and of the thousands of assistant 
U.S. attorneys, you have got a bunch of them just sitting 
around and worrying about overtime.
    We put in, under the leadership of our chairman here, a ban 
for 1 year of that overtime pay. I think we ought to make it 
permanent and maybe repeal that 1988 statute, so we will take 
away the tenure maybe.
    Senator Gregg. That makes sense. Maybe we ought to put them 
on an hourly basis and ask them to punch in and punch out, if 
that is the way they approach the job.
    Senator Hollings. Well, they are that intelligent. They 
would know how to punch in and punch out. You would not get any 
work out of them.

                        COPS IN SCHOOLS PROGRAM

    The school resource officers, Madame Attorney General, that 
came from the local experience. We found in schools, for 
example, in my backyard where we had about 800 and all kind of 
offenses and drugs and what have you, that we hired a deputy 
sheriff to go out there and teach classes. And then he 
associated in the afternoon with the athletic program. Before 
long, he became a sort of a school hero, and instead of 800 
potential violators, we had 800 potential enforcers of the law 
because all they had to do is make a motion and whatever it is, 
somebody bringing a knife on the campus that did not involve 
the student to that extent, and it worked. And we put $125 
million in it. And now you eliminate it. Why?
    Attorney General Reno. My understanding is that the COPS 
office expects to continue to fund school resource officers 
through its COPS in Schools program in the year 2001.
    Senator Hollings. Well, I am like the chairman, we will 
have to look at that one.
    Attorney General Reno. Senator, it ties in with the whole 
concept of building a community capacity to deal with crime. 
And it makes good sense. And it is the partnerships that we are 
talking about.
    Senator Hollings. Thank you.

                           ATTORNEY OVERTIME

    Attorney General Reno. Mr. Chairman, may I just say 
something? I cannot talk about the overtime litigation, but I 
can talk about the assistant United States attorneys who serve 
the people of this country. They work long hours. They care 
deeply. They are excellent lawyers. And I have not seen 
examples of many of them sitting around.
    They do a really wonderful job for this country. They are 
very special. And I cannot let this time go by without 
acknowledging the great work that they do.
    Senator Hollings. I would like to reiterate, they ought to 
get a job up here in the Senate, and know how to really work.
    Attorney General Reno. Senator, from what I have seen, I 
would praise the Senate staff in the same way.
    Senator Hollings. And they are not suing for overtime.
    Senator Gregg. Not yet.
    Attorney General Reno. You probably would not let them.
    Senator Hollings. You have got it.
    Senator Gregg. Senator Campbell.
    Senator Campbell. Mr. Chairman, now that we know how to 
really work, I wonder if I could ask Senator Hollings to send 
me a memo on where these $500,000 jobs are when I get out of 
here.

                       GROWING PRISON POPULATION

    I read with interest almost all of your testimony, Madame 
Attorney General, while our other committee people were asking 
questions. Let me start just by making a small social 
commentary you have heard me preach about before. I am sure you 
understand it, too, from reading your testimony.
    Our prison population has doubled in 10 years. In your 
testimony, in fact, you say this year 570,000 people will get 
out of prison, starting on page 19. You know as well as I do 
that twice that many will be going into prison. In fact, 
probably 70 or 72 percent of the ones that get out are going to 
go back in. A lot of it is related to drugs, and you have 
alluded to that in testimony and in private conversations, too.
    I have said this before, I do not know how we are ever 
going to reduce that cycle and reduce that supply until we get 
to what we have talked about. That is somehow we have got to 
decrease the demand. As long as the demand is there, it will 
get here some way. It will come in on boats or drop out of 
airplanes or come through underground like moles or something.
    But I am glad you appreciate that because you have 
mentioned things along that line. I think it is really a sad 
commentary, and I know that the Attorney General's office is 
not supposed to be running social programs, but I think it is 
really a sad commentary that so many communities in America 
have seen prisons as a form of economic development. We have 
them competing with each other to see where a prison is 
located. It just seems there is something wrong with that, when 
we think of America being the beacon of freedom, and yet we 
have got more people going into prisons than anyplace in the 
world, in fact.
    But I do not want to pursue that, frankly. My question had 
nothing to do with that, I just wanted to mention that in 
commentary.

                               CYBERCRIME

    In the last few weeks we have seen on the news endless 
stories about these hacking of the web-based businesses. I 
understand it has increased a great deal, by roughly 40 percent 
or so in this last year. I know you and Louis Freeh are working 
on a 5 year plan to develop some kind of program to combat 
cybercrime. Your budget this year has $37 million in it to hire 
159 prosecutors and launch 10 computer forensic labs around the 
country. I applaud you for that.
    But my question was that, you just mentioned, we are having 
so much trouble getting people in the Border Patrol, as an 
example. Is it realistic to believe that we can create and fill 
159 new positions on top of the vacancies that already exist? 
The other part of that question is what are we doing to be more 
competitive with private firms in order to be able to recruit 
the type of people that can do this highly technical work?
    Attorney General Reno. The answer is exactly what the 
chairman said at the last meeting that he called especially to 
address this issue of cybercrime. The greatest single challenge 
we face is how do we attract people who have the know-how, both 
legal and technical, to deal with the issue. The administration 
has addressed it through a scholarship program that is similar 
to ROTC. For a bachelor's degree you commit to the government 
for a certain number of years. That will be one way to do it.
    It is going to be a very difficult challenge but we are 
going to do everything we can to meet it. And I will tell you 
that this, as I told the chairman, is probably one of the most 
important issues that law enforcement will face for many, many 
years to come. How we address it now is going to influence how 
people, I think, react to the Internet. Do they have confidence 
in it? Do they believe that their privacy can be protected? Do 
they believe it will work? Do they believe that they will not 
be victims of it, as opposed to beneficiaries of it?
    We are committed to doing everything that we can, but you 
have touched on what I think is one of the most difficult 
issues of all.

                         DIFFICULTIES IN HIRING

    Senator Campbell. I applaud you and I wish you well, but I 
will tell you, when you see our bright young university 
graduates coming out, that can hire on to engineering firms, 
with the kind of skills that it takes to be a hacker for 
$50,000 and $60,000 a year, we are not going to get them to 
come into government service for $20,000 or $25,000. It is as 
simple as that.
    I think Senator Hollings has brought that up. If we are 
going to pay the best, we have got to pay the best salaries.
    Attorney General Reno. I just want to point out to you, I 
have been impressed, for example, with FBI agents that I have 
met. One was a trauma surgeon and decided to become an FBI 
agent. Another was a newscaster. People, I think, appreciate 
the opportunity to serve and to serve the people of this 
country. Fortunately, we have some wonderful people, both in 
the Bureau and in the Department of Justice, who have the know-
how and want to put it to use for the American people.
    I would like to suggest something to you all. Some people 
say to me how can you stand public service when you get cussed 
at, fussed at, and figuratively beaten around the head. This 
committee never does it to me. You kind of encourage public 
service, as far as I am concerned. You disagree with me on an 
awful lot and we agree on an awful lot.
    But if we could establish a tone where people thought that 
public service was done the way it is done in this committee, I 
think we would be a lot further down the line.
    Senator Campbell. We have a few surgeons that have given up 
their practice to come into the Senate, as you know, and the 
House, and I certainly applaud them. But when you talk about 
these youngsters, so much depends on how much they are going to 
get paid, because they have got a life to live and a family to 
feed, too, in many cases.
    I just think that you are going to have difficulty filling 
those positions unless we offer some pretty big incentives.
    Attorney General Reno. Do not let young lawyers hear you 
say that, because when I graduated from law school I could not 
find a job that paid very much money. And I was appalled at 
what my colleagues in law school were receiving when they were 
hired on Wall Street.
    Senator Campbell. If they could see you today.
    Attorney General Reno. Well, they had a reception for me 
and they said you know, we envy you the opportunity at public 
service. You understand how important and how rewarding it is.
    Senator Campbell. Thank you, Mr. Chairman.
    Senator Gregg. You certainly, Senator Campbell, touched a 
very important issue which is how do we adequately compensate 
for these technology skills that are so critical? Not only to 
law enforcement, but we see this in the Department of Commerce 
with NIST and the agencies there. These folks are in great 
demand, and we are capitalists and a market oriented society, 
and the government is going to have to react to that, and we 
are going to have to structure something.

                       PLAN COLOMBIA SUPPLEMENTAL

    My last question to you, Madame Attorney General, deals 
with this Colombia supplemental. I noticed that of the 
supplemental that is being requested for Colombia, which is a 
$1.6 billion supplemental, only something like $3 million of it 
is under the control of the law enforcement agency responsible 
for drug enforcement in this country, DEA. I guess my question 
is to what extent was DEA in the loop on this? To what extent 
was the FBI in the loop on this? If they were in the loop, why 
are they not players? Should they not be players in one of the 
most massive undertakings this country has ever considered in 
the area of trying to stop drugs in a foreign country, and the 
production of drugs, which is the responsibility of the DEA and 
the FBI to a degree?
    Attorney General Reno. I checked with Donny Marshall [ed: 
Administrator for the Drug Enforcement Administration] this 
morning to make sure that what I say accurately represents what 
he believes, and he said that he was involved and DEA was 
involved throughout the considerations. He said he supports the 
plan. He might have done it differently, but he thinks that the 
expenditures that are provided for are important. And I think 
it presents a balanced approach, balanced in terms of 
investments that have been made before and investments that 
need to be made now.
    Senator Gregg. What is DEA's role? For $3 million out of 
$1.6 billion, my sense is that it is minor, to say the least.
    Attorney General Reno. I think we need to do everything we 
can to support the Colombian national police, and he and I are 
committed to doing that. But what we have now is success in 
terms of arrests in Colombia. We need to work with Colombian 
authorities to build institutions, to ensure that once the 
arrest has been made that there are further processes in terms 
of investigation, prosecution, conviction, appropriate sentence 
served.
    The way the plan is designed is to try to achieve that.
    Senator Gregg. I would just say, looking at it as an 
observer, that if you took $1.6 billion and we were to put it 
into the Border Patrol, the DEA, and the detention capabilities 
of INS and the Bureau of Prisons, I think we would have a heck 
of a lot bigger impact on drugs coming into this country than 
what is going to happen by spending $1.6 billion to buy six 
Blackhawk helicopters to be flown around in Colombia.
    It just seems to me that it is not the most effective use 
of our resources, in light of there being a crying need which 
we have already highlighted here in the area of Border Patrol, 
DEA, which we have not really gotten into, and detention, which 
we also have not gotten into.
    Senator Hollings. Along that line, Mr. Chairman, Madame 
Attorney General, we have gotten an experience, and we have got 
to double check it and make sure. I will never forget under 
President Carter, as the First Lady Rosalynn was going to go to 
Colombia and had a little talk all prepared in Spanish and what 
have you, but they thought the piece-de resistance would be to 
send two helicopters down there to help them enforce law. I 
opposed it and opposed it and finally gave in.
    The bottom line, the two helicopters went down there and it 
went to what I guess would be their defense minister, who 
turned out to be the head of the cartel. Instead, they were 
telling us how it was going to help. We were going to have such 
big law enforcement. We were going to have those choppers, we 
could get up on the mountain, we could just end all drug 
activity in the country of Colombia.
    The fact of the matter is, we facilitated, accelerated, and 
increased the drug activity. And when you talk of helicopters, 
you have just got the country of Mexico sending them back, the 
Huey helicopters. They were too expensive to run, on the one 
hand, and they could not operate and keep them up and maintain 
them.
    So we have sent a bunch of them down there and we have got 
a lesson already learned, so we had better be awfully careful 
how we just find a problem and say put in x millions of dollars 
and that problem is solved. We do not seem to learn anything.
    Attorney General Reno. That is one of the reasons, Senator, 
that in terms of the law enforcement and administration of 
justice side of the coin, I think we have got to build it 
carefully. And that we cannot just focus on arresting people if 
we do not have the capacity to prosecute them, to get them 
convicted, and to get them imprisoned for a sentence that meets 
what they did.
    Senator Hollings. Thank you, Mr. Chairman.
    Senator Gregg. Madame Attorney General, we want to thank 
you for your courtesy over the years. It has been a pleasure to 
work with you. You have been generous in your comments, so let 
us be generous in ours also. I have personally enjoyed very 
much working with you. I think we have made tremendous strides.
    Attorney General Reno. Well, it is not over yet, Mr. 
Chairman.
    Senator Gregg. I noticed you said you did not plan to be 
here again. We may have you again.
    Attorney General Reno. If you do, it will be my pleasure.
    Senator Gregg. We have got some issues, especially the 
Border Patrol and Internet, that we might want to take up with 
you.

                     ADDITIONAL COMMITTEE QUESTIONS

    In any event, this hearing is completed but there will be 
questions submitted for the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               QUESTIONS SUBMITTED BY SENATOR JUDD GREGG

                              COPS PROGRAM

    Question. The COPS program reached its goal of putting 100,000 COPS 
on the street on May 12, 1999, and as originally authorized, the 
program is scheduled to terminate at the close of fiscal year 2000. How 
do you justify the program's continuation and expansion when its stated 
goal has been reached and violent crime rates continue to fall?
    Answer. The 21st Century Policing Initiative directs federal 
resources to the most pressing local law enforcement needs by building 
on the success of the COPS program and adding up to 50,000 additional 
officers to the street. It takes the philosophy of community policing 
to the next level. By engaging the entire community in the fight 
against crime and funding community prosecutors as well as officers, we 
are helping create an infrastructure to sustain our progress into the 
next century. Every major law enforcement group--representing labor and 
management alike--and the Conference of Mayors strongly supports the 
continued funding for the COPS program.
    With American communities safer than they have been in decades, now 
is not the time to pat ourselves on the back and go home. Crime is 
still too high. The continuation of the COPS program would serve to 
reinforce this progress by funding much-needed officers, vital 
technologies, innovative crime prevention strategies, and valuable 
training and technical assistance.
    Question. The Administration's new goal is to hire 150,000 officers 
by 2005. Can you tell me how many officers you believe would be the 
right number?
    Answer. We are focused on funding up to 50,000 additional officers 
between now and 2005. The demand for COPS grants has not diminished 
over the last 5 years, and we have no reason to expect that it will do 
so anytime soon. Just last year, over 250 law enforcement agencies 
applied for funding for the first time. There are still neighborhoods 
that have not benefited from the recent drop in crime.
    Question. Do you need authorization language for any of the new 
programs you have requested?
    Answer. All of the programs that are requested under the COPS 
appropriation in the fiscal year 2001 budget request would be 
authorized with the passage of the Administration's proposed 21st 
Century Policing Initiative bill.

                         COMMUNITY PROSECUTION

    Question. The President's budget request asks for $200 million to 
establish a Community Prosecutors Hiring Program. Within that amount 
there is $150 million to hire 1,000 community prosecutors to target 
gun-related violence in DOJ-determined ``High Gun Violence Areas.'' 
What are ``High Gun Areas'' and how will they be determined?
    Answer. Since 1999, a total of $15 million has been appropriated 
under COPS and administered by the OJP's Bureau of Justice Assistance 
(BJA) for the Community Prosecutor Program. In fiscal year 1999, $5 
million was appropriated and awards were announced for the planning, 
implementation, and enhancement of community prosecution programs 
around the country. In fiscal year 2000, $10 million was appropriated 
and will be awarded to other jurisdictions for the planning, 
implementation, and enhancement of their community prosecution 
programs.
    In fiscal year 2001, an increase of $190 million is requested to 
establish a Community and Local Gun Prosecution Initiative bringing the 
total funding level to $200 million. These funds are requested under 
COPS and will be administered by OJP. OJP proposes to make 
discretionary grants to state, local and tribal prosecutors' offices to 
increase substantially the number of prosecutors interacting directly 
with members of the community and to encourage local prosecutors to 
reorient their emphasis to tough enforcement at a community level. Of 
the total, $150 million would be used to hire 1,000 gun prosecutors for 
urban, suburban, and rural communities that are experiencing gun 
violence. These prosecutors will focus on gun-related crime. High gun 
violence areas are those areas--whether urban, suburban or rural--which 
are impacted by gun violence. OJP will reserve funds for jurisdictions 
with populations of less than 50,000.
    Question. How was it determined that 1,000 prosecutors is the right 
number?
    Answer. As a result of the Administration's successful efforts to 
put an additional 100,000 police officers in communities across the 
nation, we are experiencing an increase in the prosecutorial workload 
of the criminal justice system. This burden is largely felt in local 
communities where prosecution resources are limited. This initiative 
attempts to bridge the gap by providing additional prosecution 
personnel at the local level to encourage and facilitate community 
partnerships to address the unique local criminal problems.

            MISSING AND EXPLOITED CHILDREN'S PROGRAMS (MECP)

    Question. My first question is whether the current funds 
appropriated to the MECP are sufficient to carry out all the activities 
and programs necessary to support missing and exploited children, their 
families, and the agencies that serve this population?
    Answer. Since the Missing Children's Assistance Act was enacted in 
1984, OJJDP has maintained a national leadership role in providing 
training and technical assistance to law enforcement and other service 
providers involved on the front line in assisting missing and exploited 
children and their families. This training, for the most part, is not 
available to law enforcement practitioners through other sources. While 
current funding is sufficient to maintain existing programs, the 
significant increase in the numbers of new law enforcement officers on 
the streets today, and the critical need for informed action and 
accurate reporting of all categories of crimes against children, 
funding beyond current levels would allow the MECP to enhance current 
training and technical assistance programs to reach more law 
enforcement practitioners. It would also allow expansion of our 
training and technical assistance program into new areas.
    Question. If additional funds were appropriated to the MECP, what 
types of programs and activities would these funds support?
    Answer. Additional funds would provide for the expansion of 
existing training and technical assistance programs to the field. The 
Department currently has all training slots for fiscal year 2000 
filled. We typically have as many applicants on waiting lists as we 
have in the actual training programs. Additional funding would allow us 
to reach many more of these law enforcement practitioners.
    Second, additional funding would allow the MECP to expand program 
offerings into new training areas related to missing and exploited 
children and their families, including training for law enforcement, 
parents, prosecutors, and the judiciary on international parental 
abduction to enhance the United States' response to the recovery and 
return of these children. The MECP could conduct new research on 
missing, runaway, and throwaway children as needed, along with research 
on the growing problem of child prostitution. As many states and 
localities are adopting child fatality review teams, multi-disciplinary 
training could be conducted to assist these practitioners in 
implementing that concept. Additional funding would also assist MECP in 
increasing the number and quality of related publications and 
developing new publications in areas such as international parental 
abduction and hand guides for law enforcement on investigating child 
homicides.
    Question. What would be the cost of these activities?
    Answer. Additional funding needed for all activities would be 
approximately $5 million.
    Question. If additional funds were appropriated, would OJJDP commit 
those funds to the newly formed Child Protection Division with the 
emphasis placed upon increased training for law enforcement?
    Answer. Yes, all activities of the old MECP have already been 
consolidated into the new Child Protection Division (CPD). Any 
additional funding would be administered by that Division with an 
emphasis on state and local law enforcement needs as discussed in our 
response to the first question.

                            VOCA LEGISLATION

    Question. The Victim's of Child Abuse Act (VOCA) provides funds to 
support child abuse training programs for prosecutors and judicial 
personnel as well as funds to support children's advocacy centers. One 
constituent group that is clearly absent from the legislation is state 
and local law enforcement. Because state and local law enforcement are 
integral partners in the effective resolution of child abuse cases, 
does the Office of Juvenile Justice and Delinquency Prevention believe 
that state and local law enforcement should be included in the VOCA 
legislation?
    Answer. We believe that the training and technical assistance needs 
of state and local law enforcement could appropriately be included in 
the VOCA legislation. In cases of crimes against children, law 
enforcement responders often ``make or break'' a criminal investigation 
of the perpetrator before a prosecutor or judge is even aware of the 
case. Their initial investigative actions are key to the effective 
prosecution of the perpetrator and the protection of the child. Their 
knowledge and ability to effectively investigate crimes against 
children is at least equal to that same requirement for prosecutors and 
the judiciary.
    Question. If VOCA funds were allocated for training for state and 
local law enforcement agencies, how would these activities be used in 
relationship to the current activities that are offered by OJJDP 
through the Missing and Exploited Children's Program?
    Answer. As indicated above, the activities of the MECP have been 
consolidated, through reorganization, into the new OJJDP Child 
Protection Division. Additional funding would allow the new CPD to 
increase the number of offerings of existing training programs to state 
and local law enforcement and to enhance the overall training effort 
with the development of needed new programs.
    Question. How would OJJDP, the Missing and Exploited Children's 
Program and the Child Protection Division insure that these funds 
complemented and supported the current training and technical 
assistance programs?
    Answer. To insure that purpose is met, the Department suggests that 
language in any amendment to VOCA require that the funds be 
administered by OJJDP for the purpose of expanding and enhancing 
missing and exploited children training and technical assistance 
programs for state and local law enforcement.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

               RIO ARRIBA COUNTY BLACK TAR HEROIN PROBLEM

    Background: Attorney General Reno, I want to begin by thanking you 
for all that you have done in the last year to help address the black 
tar heroin problem in northern New Mexico.
    It was at the hearing last year that you and I first discussed this 
issue, and the record will reflect that your response to my request for 
help was immediate, comprehensive and extremely helpful. On behalf of 
the citizens of Rio Arriba County, thank you.
    Within a few weeks after our discussion here, Senator Gregg was 
generous enough to hold a field hearing on the issue in Espanola, New 
Mexico. You sent out your deputy, Laurie Robinson, who did a great job 
engaging with the state and local leaders and identifying the problems 
that the community faced in trying to address this problem. I 
understand that Ms. Robinson will soon depart her post at DOJ, and I 
wanted to relate to you how much I appreciated her help as well.
    Within months, your staff returned to New Mexico and consulted with 
state and local leaders. They formulated a comprehensive plan to 
address the problem, which emphasized community-based law enforcement, 
treatment and prevention. In this committee, we targeted prevention 
resources for the Boys and Girls Club and an after-school program in 
Rio Arriba. The State of New Mexico dedicated funds for treatment. And, 
law enforcement did a great job.
    Soon after the field hearing, federal FBI, DEA and ATF agents, 
along with state law enforcement officials, rounded up more than 50 
individuals involved in the drug trade in northern New Mexico. 
Indictments were handed down, and there have been numerous guilty pleas 
already.
    News reports out of Rio Arriba County indicate that the streets are 
quieter, the drug trade has been suppressed, and the community is on 
its way to healing itself after decades of drug abuse.
    Of course, we haven't solved the drug problem in northern New 
Mexico. I hope that you'll pledge to continue to work with me 
throughout the remainder of your time at DOJ as the need arises to 
ensure that Rio Arriba stays on the path toward reducing its drug 
problem.
    Question. I am interested in your Department's recommendation about 
a second phase of help for the county, including any follow-up 
prevention or law enforcement efforts we might undertake to make sure 
that our efforts of the past year do not go to waste.
    Answer. At the March 30, 1999, hearing in Espanola, Laurie 
Robinson, the then Assistant Attorney General of the Office of Justice 
Programs (OJP), emphasized the importance of government agencies and 
service providers collaborating with each other, working in partnership 
with the community, and embracing a balanced and coordinated approach 
to crime prevention, control and community empowerment. As a result of 
this hearing, in August 1999, a report was published that outlined a 
technical assistance action plan to support and sustain efforts to 
respond to the illicit drug and crime issues in Rio Arriba County. The 
centerpiece of this plan was the Community Health and Justice Council, 
which would provide a shared infrastructure of federal, state and 
county stakeholders in order to provide a unified response to crime and 
substance abuse problems in Rio Arriba County. In addition, OJP, in 
partnership with the Substance Abuse and Mental Health Services 
Administration, the National Institute on Drug Abuse, the National 
Institute of Corrections, and Project SEARCH, committed technical 
assistance resources. OJP also committed to fund two drug court 
extensions, regional drug free coalition building efforts, and a 
community prosecution planning project.
    Phase II of this effort is well underway. The technical assistance 
response team is scheduled to visit Rio Arriba during mid-May to 
follow-up on the recommendations outlined in the August 1999 report. 
The response team has three objectives: (1) assess the status of the 
Rio Arriba Community Health and Justice Council; (2) conduct follow-up 
interviews with key government and community stakeholders to reassess 
their commitment in efforts to address identified substance abuse 
prevention and treatment needs; and (3) track the status of several OJP 
initiatives to facilitate implementation of the report's programmatic 
and technical assistance recommendations.

                    FIRST RESPONDER TRAINING PROGRAM

    Background: The Department of Justice has requested a total of $29 
million to support the National Domestic Preparedness Consortium--$15 
million for the headquarters at Fort McClellan, Alabama, and $14 
million to be shared equally ($3.5 million each) by the four training 
partners--New Mexico Tech; the University of Texas; Louisiana State 
University; and the Nevada Test Site. Fort McClellan is again proposed 
for an increase--$2 million for the purposes of installing a computer 
system and to provide a student tracking system. The actual training 
partners are held to a freeze level, while the Administration proposes 
additional resources for technical assistance, law enforcement 
training, and research and development.
    Question. Ms. Reno, the Office of Justice Programs funds domestic 
first responder training at several sites of the Domestic Preparedness 
Consortium. Request for funding for Fort McClellan's program continue 
to increase, while more first responders are actually being trained at 
the university sites. Wouldn't the Department maximize the budget by 
providing more training at the most cost-effective sites?
    Answer. Each member of the National Domestic Preparedness 
Consortium (NDPC), along with the Office of Justice Programs' (OJP) 
other training partners, have individual strengths of critical 
importance to the emergency responder community. For example, the New 
Mexico Institute of Mining and Technology's (NMI) explosives expertise, 
and the availability of live agent training at the Center for Domestic 
Preparedness (CDP), both represent unique assets central to a robust, 
and comprehensive domestic preparedness effort. At each NDPC site, 
training is offered in the most effective and efficient manner possible 
given the unique training products provided. When judging the value of 
this training, the unique nature of members' facilities, assets, and 
training provided to the emergency responder community must be taken 
into account. In fact, the emergency responder community has 
specifically indicated the value of such individual strengths as NMI's 
explosives expertise, and the CDP's live agent training. In the same 
manner, all NDPC facilities play a unique and critical role in OJP's 
overall domestic preparedness effort.
    Question. First responder travel is a necessary expense. 
Heretofore, the Department has deducted travel expenses from funds 
appropriated to the Domestic Preparedness Consortium, instead of 
reimbursing first responders from Department of Justice funds. To 
maximize the funds spent on actual training, would it make sense for 
the Subcommittee to designate travel funds for first responder use?
    Answer. First responder travel is a necessary expense associated 
with training. These travel expenses, however, are provided for within 
the training budgets for each of the NDPC members. Student travel is 
integrated as a component of overall per student training costs. 
Separating out travel funds for all first responders being trained is 
an artificial distinction, and would have no real effect other than to 
complicate the administration of such funds, and create inefficiencies 
in the development of NDPC member budget plans. Building travel costs 
into per student training costs allows each NDPC member the flexibility 
to maximize its resources when developing training and budget plans. 
Creating a single ``first responder travel fund'' would cause each NDPC 
member to have to compete for available travel funds for its students 
with other NDPC members.
    Question. The training of first responders is a primary issue of 
readiness as the Department of Justice takes the agency lead on 
counterterrorism for the Federal Government. What has the Department 
accomplished through the First Responder training initiatives over the 
past 2 years?
    Answer. OJP's first responder training program was initiated with 
the development of the Firefighter and Emergency Medical Services 
training course in fiscal year 1997. Since that time, however, 
programmatic efforts and available funding have increased dramatically. 
Over the course of the past 2 years, OJP has developed a comprehensive, 
robust domestic preparedness program, created the Office for State and 
Local Domestic Preparedness Support (OSLDPS) to administer it, and 
organized that office and its programs based on recommendations 
obtained from the state and local emergency response community through 
a variety of needs assessments and stakeholder conferences. OSLDPS 
focuses its preparedness efforts in four functional areas: provision of 
grants to support equipment procurement, training, exercises, and 
technical assistance. OSLDPS is engaged in a continual outreach effort 
to the state and local community to elicit feedback and guidance on its 
program execution. Since 1998, OSLDPS has developed and implemented 
programs to provide $87.5 million in grants to state and local 
jurisdictions for the procurement of specialized response equipment and 
the development of state-wide strategic plans for domestic 
preparedness; organized a comprehensive training program utilizing 
existing expertise and national assets to enhance the capabilities of 
state and local jurisdictions and response agencies in responding to 
WMD terrorism; undertaken the planning of the TOPOFF exercise, a major 
national-level WMD exercise; and created a focused technical assistance 
program to respond directly to the needs of individual jurisdictions.
    Question. How many local law enforcement and fire and medical 
personnel have been trained?
    Answer. OSLDPS trains approximately 46,000 students under its 
Metropolitan Fire and Emergency Medical Services basic awareness 
training program annually. In 1999, OSLDPS trained 1,156 emergency 
responders at the CDP and 1,672 at the other NDPC institutions. 
Further, OSLDPS is working with other training providers, including but 
not limited to Pine Bluff Arsenal for the provision of equipment 
sustainment training, the National Sheriffs Association, and the 
National Guard Bureau.
    Question. What is the status of equipping these first responder 
training teams?
    Answer. A key element of OSLDPS' efforts to assist state and local 
jurisdictions in enhancing their ability to respond to WMD terrorism is 
the provision of grants for the procurement of critical emergency 
response equipment. Such equipment will enable fire departments, law 
enforcement agencies, emergency medical services, and hazardous 
materials response units to enhance their response capabilities in 
state and local jurisdictions to incidents of domestic WMD terrorism. 
Numerous needs assessments have consistently highlighted these 
jurisdictions' need for specialized equipment in order to meet the 
requirements presented by WMD incidents. In fiscal year 1998, OSLDPS 
provided $12 million in grants to 41 local jurisdictions for the 
procurement of specialized response equipment, including personal 
protective, chemical/biological detection, decontamination, and 
communications equipment. In fiscal year 1999, OSLDPS will provide an 
additional $31 million to 157 local jurisdictions, as well as $33.8 
million to the 50 states, for the procurement of such equipment. An 
additional $8 million will be provided to the 50 states for the 
development of Three-Year Statewide Strategic Domestic Preparedness 
Plans, which will guide the use of future funding. To date 
approximately 115 of the 157 local jurisdictions receiving grants in 
fiscal year 1999 have been funded under the fiscal year 1999 County and 
Municipal Domestic Preparedness Support Equipment Program.

                  LAW ENFORCEMENT IN INDIAN COUNTRY

    Question. Attorney General Reno, the Administration continues to 
focus on the law enforcement situation in Indian Country, and promotes 
cooperation between the Bureau of Indian Affairs (BIA) and the 
Department of Justice agencies. In fiscal year 1999, this Subcommittee 
provided $88.7 million through various Department of Justice programs 
to enhance law enforcement in Indian Country, and for this year another 
$91.5 million. This year, the budget includes an additional $82 million 
as part of this joint initiative with the Department of Interior and 
BIA to address public safety on Indian lands. First I'd like to turn to 
the funding for tribal courts and its implementation. The tribal courts 
have received $10 million over the past two years. How have these funds 
been allocated to tribal courts?
    Answer. In each 1999 and 2000, $5 million has been appropriated for 
the Tribal Court Program. This program, which is part of the broader 
DOJ Indian Country Law Enforcement Initiative, is designed to provide 
grant resources on a competitive basis to support the development, 
enhancement and continuing operation of tribal judicial systems. The 
goal of this program is to provide resources and assistance to tribes 
to sustain safer and more peaceful communities by focusing on juvenile 
and family issues, as well as non-traditional approaches to justice, 
enhancing the administration of civil and criminal justice on Indian 
lands, and encouraging the implementation of the Indian Civil Act by 
tribal governments.
    The 1999 Tribal Court Program plan was approved in May 1999. The 
grant solicitation process began in June 1999, and applications were 
due March 8, 2000. BJA is currently reviewing these applications and 
expects to begin awarding grants in May 2000.
    In 2000, BJA plans to award additional planning, implementation, 
and enhancement grants, as well as provide technical assistance. Tribes 
that have completed the planning process (either with BJA assistance or 
on their own) are eligible for implementation grants in 2000. Tribes 
that received 1999 planning grant will receive priority for these 
implementation grants. After Congressional approval of the 2000 plan, 
BJA anticipates soliciting applications in July/August 2000.
    Question. Congress also approved $34 million in each of 1999 and 
2000 through the State Prison Grants program to help with the addition 
of detention facilities in Indian Country. How is the Department 
expending these funds? What is the analysis of need for these 
facilities across the nation?
    Answer. The 1999 appropriation for the construction of adult and 
juvenile detention facilities in Indian Country was $34 million. In 
1999, OJP awarded the following projects on a competitive basis:

Three Affiliated Tribes of Fort Berthold (ND)...........      $2,000,000
Native Village of Barrow (AK)...........................       6,000,000
San Carlos Apache Tribe (AZ)............................       2,158,550
Confederated Tribes of the Colville Reservation (WA)....       4,579,550
Pueblo of Zuni (NM).....................................       2,334,000
Northern Cheyenne Nation (MT)...........................       3,482,629
Oglala Sioux Tribe (SD).................................       1,327,659
Rosebud Sioux Tribe (SD)................................       6,100,770
Shoshone Paiute Tribe (NV)..............................       2,862,132
Red Lake Band of Chippewa (MN)..........................         574,870
Nisqually Indians (WA)..................................         371,473
Technical Assistance....................................         900,000

    For 2000, OJP remains committed to assisting tribal governments in 
building comprehensive and effective law enforcement and public safety 
systems to provide the foundation for healthy communities. We believe 
it is critical to continue to support initiatives that were funded in 
1998 and 1999 in order to address appropriately the myriad problems 
experienced in Indian country including, but not limited to the 
following: violent crime, domestic violence, child abuse, aggravated 
assaults, and violent crime strongly correlated with alcohol abuse.
    In 2000, $34 million is available on a competitive basis and will 
be awarded as follows:
  --$24 million to tribes that demonstrate the greatest potential for 
        successful development and implementation of their 
        comprehensive crime control strategy and who have determined 
        the most appropriate facility consistent with the 
        characteristics of their offender population. Of the $24 
        million, approximately $1 million will be needed for technical 
        assistance.
  --$10 million to the Salt River Pima Maricopa Indian Community for 
        construction of an adult/juvenile facility. Salt River 
        submitted an application in response to the OJP/CPO 
        solicitation for proposals for 1999 BIA Designated Tribes, 
        however, resources were not available to fund the project 
        fully. The Attorney General has committed $10 million in 2000 
        for the construction of a facility.
    The need for culturally appropriate correctional facilities remains 
great throughout Indian Country as demonstrated by the response to the 
OJP/CPO 1999 Program Guidance and Application Kits. In 1999, OJP 
received 33 applications requesting a total of $100.3 million. Because 
of limited funding, OJP was able to fund only 6 of the 33 projects 
totaling $31.8 million. The total amount of unfunded projects in 1999 
was $68.5 million. Furthermore, BIA has done independent assessments in 
Indian Country that substantiate the need for approximately $180 
million in new construction.
    Question. The Initiative also has received $75 million to assist 
Indian tribes and pueblos with the hiring of additional law enforcement 
officers, to purchase equipment, and to train new and existing 
officers. What is the status of obligating these funds? How did the 
Department decide to implement this portion of the initiative?
    Answer. In fiscal year 1999, COPS received $35 million for the 
improvement of law enforcement capabilities on Indian lands. With that 
funding, COPS developed the Tribal Resources Grant Program (TRGP). With 
this program, the COPS Office attempted to meet the most serious needs 
of law enforcement in Indian communities through a broadened, 
comprehensive hiring program that offered a ``menu of options'' from 
salary and benefits for new police personnel to funding for law 
enforcement training and equipment for new and existing officers. This 
$35 million program focused on tribal communities, many of which have 
limited resources and are affected by high rates of crime and violence, 
and was meant to enhance law enforcement infrastructures and community 
policing efforts in these communities.
    Funding provisions under the TRGP included 3 years of salary and 
benefits for new police officers, as well as funding for law 
enforcement training and basic standard issue equipment, ranging from 
bullet-proof vests and uniforms, to firearms, portable radios and 
funding for background investigations. Funds were also available for 
law enforcement training and equipment for existing officers. Training 
included basic and specialized police training at a state academy or 
the Indian Police Academy in Artesia, N.M., as well as community 
policing, grants management, and computer training. Departments were 
also able to request funding for other types of department-wide law 
enforcement equipment and technology.
    In addition, $7.3 million of the $35 million went toward the CIRCLE 
Project which was a Department of Justice collaborative effort to 
assist Indian Tribes. It involved multiple components of the DOJ 
working together to address the equipment, training, technical 
assistance, and hiring needs of three specific tribes.
    In fiscal year 2000, COPS received $40 million for tribal 
assistance programs and will award grants under the Tribal Resources 
Grant Program 2000. This program has been designed with the same 
parameters as the fiscal year 1999 TRGP.
    The funding allocated in fiscal year 1999 has been obligated. The 
application deadline for the fiscal year 2000 program was May 5, 2000, 
and funding for fiscal year 2000 will not be obligated until all 
applications have been received.
    Question. A total of $22.5 million was approved for the Office of 
Juvenile Justice and Delinquency Prevention (OJJDP) for programs to 
combat tribal youth crime. What is the status of this program? What 
types of programs does the Department plan to fund with these dollars? 
What indication is the Department getting as to the nature of this 
problem in Indian Country and the need for resources?
    Answer. In 1999, $10 million was appropriated for OJJDP's Tribal 
Youth Program. Of this amount, 10 percent ($1 million) was used by 
OJJDP to support research, evaluation and statistics, and $200,000 to 
provide direct technical assistance and training for tribal programs. 
Additionally, $600,000 was designated to support the Comprehensive 
Indian Resources for Communities and Law Enforcement (CIRCLE) project 
and $330,000 to support the activities of the Volunteers for Tribal 
Youth (VTY) program. Through a solicitation and peer-reviewed process, 
the Tribal Youth Program (TYP) provided funds for comprehensive 
delinquency prevention, control, and juvenile justice system 
improvement for American Indian youth to 34 grantees in fiscal year 
1999 totaling approximately $7.9 million. Individual grants range from 
$75,000 to $500,000 for a 3-year project period. Federally-recognized 
tribes applied directly to OJJDP for grants. Inter-tribal coalitions 
and Alaskan Native villages were also eligible to apply. OJJDP made 
funding eligibility determinations for grantees based on the Bureau of 
Indian Affairs (BIA) tribal service populations numbers.
    In 2000, $12.5 million was appropriated for the Tribal Youth 
Program. Of this amount, 10 percent ($1.25 million) will be to support 
research, evaluation and statistics, and $250,000 to provide direct 
technical assistance and training for tribal programs. Additionally, 
$600,000 has been designated to support the CIRCLE project for a second 
year. Through another competitive solicitation process in 2000, TYP 
will provide funds for comprehensive delinquency prevention, control, 
and juvenile justice system improvement for American Indian youth. The 
same funding structure, project period and eligibility criteria will be 
used as in 1999 for TYP. A separate competitive solicitation focusing 
on mental health and delinquency for American Indian youth will also be 
issued in 2000, and will have the same funding structure, project 
period and eligibility criteria as the TYP juvenile justice program.
    Provided below are the types of tribal youth programmatic 
activities funded. A strong cultural component is tied to all of these 
activities.
  --Category I--Reduce, control, and prevent crime both by and against 
        tribal youth.--Acceptable activities include but are not 
        limited to: Identification of risk factors; community needs 
        assessments; family strengthening; truancy reduction; drop-out 
        prevention; parenting; anti-gang education for young children; 
        conflict resolution; bullying; child abuse prevention; gang 
        reduction strategies for children and youth; and youth gun 
        violence reduction.
  --Category II--Interventions for court-involved tribal youth.--
        Acceptable activities include but are not limited to: Graduated 
        sanctions; restitution; home detention, foster and shelter 
        care; community service; improved aftercare services; teen 
        courts; and mentoring.
  --Category III--Improvement to tribal juvenile justice systems.--
        Acceptable activities include but are not limited to: Training 
        for juvenile court personnel, including judges; intake 
        assessments; model tribal juvenile codes; advocacy programs; 
        gender-specific programming; probation services; and aftercare 
        programs.
  --Category IV--Prevention programs focusing on alcohol and drugs.--
        Acceptable activities include but are not limited to: Drug and 
        alcohol education; drug testing; substance abuse counseling; 
        peer counseling; family substance abuse counseling.

Nature of the Problem
    The 2.3 million American Indians and Alaska Natives in the United 
States represent just under one percent of the total population, but a 
recent nationwide Bureau of Justice Statistics (BJS) survey finds that 
American Indians are victimized by violent crime at a rate more than 
twice that of the general population. Past testimony by tribal leaders 
regarding higher rates of homicide and gang violence corroborates 
information gathered by the FBI, BIA, U.S. Attorneys, and tribal 
police. Of the 6,002 Indian country cases opened by the FBI between 
1994-97, 83 percent were either violent crimes or involved child 
physical or sexual abuse. Violent crime by juvenile offenders and 
Indian youth gangs is on the rise in many Indian communities. The 
number of Indian youth in Bureau of Prisons (BOP) custody has increased 
by 50 percent since 1994. Given the unique nature of federal 
jurisdiction in Indian country and the rise in juvenile crime, 67 
percent of the youth in the BOP's custody were American Indian, as of 
December 1998. Demographics may contribute to the problem of juvenile 
delinquency and violence in Indian country. The median age of American 
Indians is 24.2 years compared with 32.9 years for other Americans. On 
many reservations, roughly half of the population is under 18 years of 
age, again showing the need for increased attention to juveniles within 
Indian country.
    Question. Finally, would the Department please provide the 
Subcommittee with a summary of the funding proposed to be allocated 
under the Indian Law Enforcement initiative in fiscal year 2001?
    Answer. The following chart provides the requested information.

                          DEPARTMENT OF JUSTICE FISCAL YEAR 2001 PRESIDENT'S BUDGET--INDIAN COUNTRY LAW ENFORCEMENT INITIATIVE
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Component                                                              Item                                                        Request
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal Bureau of              31 pos. (victim/witness coordinators) and funds for contracts for evidence forensic exams and Safe        \1\ $4,639,000
 Investigation.                 Trails Task Force overtime.
United States Attorneys......  60 pos. (33 Assistant U.S. Attorneys, 27 support) to augment current investigative and prosecutorial       \1\ 4,699,000
                                efforts in Indian country.
Criminal Division............  1 pos. to augment analysis of Indian law enforcement issues.............................................      \1\ 70,000
Office of Justice Programs...  Drug Testing and Treatment Program for alcohol and substance abuse testing and treatment in Indian        \1\ 10,000,000
                                country.
                               Tribal Courts Program to assist tribal government in the development, enhancement, and continuing         \2\ 15,000,000
                                operation of tribal judicial systems.
                               Title V Incentive Grants for Local Delinquency Prevention to serve Indian youth by developing,            \2\ 20,000,000
                                enhancing, and supporting tribal juvenile justice systems.
                               Tribal Youth Mental Heath and Behavior Problems Initiative for youth support services to address the       \1\ 8,000,000
                                needs of native youth with mental health, behavioral, or alcohol and substance abuse problems.
                               Indian Alcohol and Substance Abuse Diversion Program to develop strategies and services to break the       \1\ 8,000,000
                                cycle of alcohol and crime.
                               Sexual Assault Nurse Examiner Units for gathering evidence for use in prosecuting sexual offenders......   \1\ 5,000,000
                               Tribal Criminal and Civil Legal Assistance Program for criminal and civil legal services support and for   \1\ 6,000,000
                                tribal colleges criminal and legal assistance curriculum development and training.
                               State Correctional Grant Program for the construction of detention facilities in Indian country.........      34,000,000
                               Tribal criminal justice statistics collection...........................................................   \1\ 2,000,000
                               Office of Tribal Justice to establish a permanent office under the Associate Attorney General...........     \1\ 932,000
                               Police Corps Program to provide advanced educational opportunities for police in Indian country.........   \1\ 5,000,000
Community Oriented Policing    Grants to Tribes for additional law enforcement officers, equipment, and training. (12 positions, 4.5     \4\ 45,000,000
 Services.                      FTE).
                               Indian Country Forensics Laboratory to augment tribal forensics capabilities............................   \1\ 5,000,000
                                                                                                                                        ----------------
      TOTAL..................  ........................................................................................................     173,340,000
(Total Increase).............  ........................................................................................................     (81,840,000)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ New.
\2\ $10 million increase.
\3\ $7.5 million increase.
\4\ $5 million increase.

                RADIATION EXPOSURE COMPENSATION PROGRAM

    Background: Last year, the Administration requested $21.7 million 
for the payment of claims under RECA with the assumption that pending 
regulations would be finalized and that Congress would enact one of the 
bills expanding the program. While the regulations did go into effect 
in April, during conference on the CJS Appropriations bill, the 
conferees approved only $3.2 million and stated in report language only 
that no additional funding was provided to cover the claims under the 
new regulations. Thus, there is now a shortfall of $7.25 million to pay 
anticipated claims in fiscal year 2000, and the Department of Justice 
estimates that fund balances will be exhausted in May or June with the 
effect that approved claims will not be paid.
    In addition, the Department tells staff that the fiscal year 2001 
budget request of $13.7 million is also insufficient to pay anticipated 
claims in the amount of $2.3 million needed.
    Question. Ms. Reno, you are aware of my longstanding interest in 
implementation of the Radiation Exposure Compensation Program, which I 
authored and for which I have sought sufficient funding to fulfill its 
purpose of compensating those who have sustained injury as a result of 
the United States open-air nuclear testing and uranium mining 
activities in the 1950s through 1970s.
    In fiscal year 2000, the Congress appropriated $2 million to 
administer the Radiation Exposure Compensation Program, and $3.2 
million for the Radiation Exposure Compensation Trust Fund from which 
payments are made. At the time, an estimated $8 million was available 
in the Fund from which to pay approved claims. Yet, my staff tells me 
there is a shortfall in the Fund to pay anticipated claims in the 
current fiscal year to the tune of $7.25 million.
    Answer. It is important to understand that it is difficult to 
predict accurately the number of awards and payments that will be made 
in a given year. The estimates depend upon a variety of factors 
including, but not limited to: (1) the number and distribution of new 
filings across the three categories of claimants, (2) the extent to 
which the applicants meets the eligibility criteria and (3) the pace at 
which applications are processed. Most of these factors are outside our 
control. Accordingly, our estimates are subject to change over time.
    Question. Will you please explain why the Radiation Exposure 
Compensation Trust Fund needs an additional $7.25 million in fiscal 
year 2000 to pay valid claims?
    Answer. The 2000 President's budget requested a $21.7 million 
appropriation for the Radiation Exposure Compensation Trust Fund. The 
request assumed: (1) implementation of regulatory changes and (2) 
enactment of statutory changes similar to those proposed by the 
Administration in 1997. The regulatory changes were implemented in 
April 1999, but no statutory changes were enacted. Congress 
appropriated $3.2 million for 2000. This appropriation, plus $8.4 
million carried forward from 1999 and estimated interest provide $11.8 
million in availability. Payments of about $19 million are projected, 
assuming about 228 awards will be approved in 2000. The resulting 
shortfall is estimated at $7.25 million.
    The 228 awards projected in 2000 are comparable to the 227 awards 
approved in 1999. The projection takes into account that the modified 
regulations will be in effect for a full year, compared to just 5 
months in 1999. In particular, awards to miners, who are most affected 
by the regulatory changes, are expected to increase from 114 in 1999 to 
130 in 2000. Awards to downwinders and onsite participants are expected 
to decline slightly.
    Question. Last April the Administration finalized additional 
regulations under the Radiation Exposure Compensation Act (RECA). Of 
the $21.7 million requested by the Administration in its fiscal year 
2000 budget, how much of the request was associated with the new 
regulations?
    How much was associated with the assumption that Congress would 
enact changes to RECA through statutory changes?
    Answer. When the 2000 President's budget was developed in January 
1999, it assumed that: (1) statutory changes would be implemented about 
April 2000, (2) regulatory changes would be implemented as soon as 
February 1999, (3) $8.3 million would be carried forward from 1999 and 
(4) interest would total $563,000. An appropriation of $21.7 was 
requested to make expected payments of $30.6 million. Of the $30.6 
million estimate, about $16 million was associated with the statutory 
changes and about $14.6 million was associated with the Program under 
the modified regulations--including a rough estimate that $3 million 
would be needed in connection with the regulatory changes.
    Question. Of your current estimates of the number of claims to be 
paid in the current fiscal year, can the Department tell the 
Subcommittee how many are associated with the changes by regulation? 
How many claims overall does the Department expect to pay in fiscal 
year 2000? In fiscal year 2001?
    Answer. When approving claims, we do not determine whether the 
claim also would have qualified under the original regulations. Thus, 
we do not have an accurate basis upon which to make an estimate of the 
number of claims paid in 2000 associated with the changes. We have made 
a rough estimate of the impact of one significant change, which revised 
the definition of ``non-smoker'' to include any uranium miner who 
ceased smoking at least 15 years prior to the diagnosis of a 
compensable disease. A review of previously denied miner claims 
indicated that about 317 miners may qualify for compensation valued at 
$31.7 million under the revised ``non-smoker'' regulation. In 1999, 
about 21 miner awards valued at $2.1 million were approved based on the 
change. The remaining 296 miners who may qualify will likely be 
processed over the next 2 to 3 years. The number in any given year will 
depend on when potential applicants choose to apply.
    As noted above, the 2000 President's budget estimated payments of 
$14.6 million in 2000, absent statutory changes. Over a year has 
elapsed since those estimates were made. Today, 2000 payments are 
estimated at $19 million (despite availability of $11.8 million). These 
estimates are considerably higher than projected in the 2000 
President's budget, as a result of several, interrelated factors:
  --Exclusive of the impact of the regulatory changes, award estimates 
        in the 2000 President's budget were extrapolated from 1998 data 
        trends. The current estimates take into account significant 
        increases from 1998 to 1999: (1) total approvals grew almost 50 
        percent, from 153 to 227; (2) awards to miners nearly doubled, 
        from 59 to 114; and (3) the overall approval rate rose from 42 
        percent to nearly 62 percent. One explanation for the higher 
        approval rate is that far more comprehensive data on miner work 
        histories is available now, compared with earlier years of the 
        Program.
  --The 2000 President's budget was based on speculation about the 
        impact of the modified regulations; we now have a 10-month 
        history. New filings have more than doubled since the changes 
        were implemented. Beforehand, an average of 22 claims were 
        filed per month in 1999. Afterwards, an average of 46 claims 
        have been filed per month. The growth was likely spurred by 
        outreach efforts surrounding the regulatory changes and 
        publicity concerning several bills to amend the Radiation 
        Exposure Compensation Act. As more and more of the new filings 
        are reviewed in 2000, it is reasonable to expect that the 
        number of claims approved in 2000 will be on par with 1999 
        approvals.
  --When the 2000 President's budget was developed, the proposed 
        regulation to amend the definition of a ``non-smoker'' was 
        expected to apply only to miners who developed primary cancer 
        of the lung. Subsequently, the final regulation was expanded to 
        also include miners who developed non-malignant respiratory 
        disease. Since the vast majority of awards to miners are based 
        on claims that document non-malignant respiratory disease, this 
        expansion portends additional approvals.
    It is unlikely that the level of approvals in 1999 and projected 
for 2000 will be sustained over the long term. Accordingly for 2001, 
awards are projected to decline by about 10 percent. Exclusive of the 
projected 2000 shortfall, payments in 2001 are estimated at $16.2 
million--although the budget pending with Congress requests $13.7 
million. We expect to approve about 205 awards, but the request level 
will cover payouts for only 170 awards. Assuming interest of about 
$200,000, we would need $16.0 million instead of the $13.7 million we 
are requesting in 2001.
    Question. Congress has appropriated more than $200 million to the 
Trust Fund established under the Radiation Exposure Compensation Act.
    How many claims has the Department approved and how much has been 
spent out of the Trust Fund to pay these claims?
    Answer. From the inception of the Program in April 1992 through 
February 2000, the Department has approved a total of 3,302 claims 
valued at over $244 million.
    Question. What is the current balance in the Trust Fund with which 
to pay claims during fiscal year 2000? When does the Department 
estimate that balances available to the Trust Fund will be exhausted 
and the federal government will no longer be able to pay claims in 
fiscal year 2000?
    Answer. Of the $11.8 million available in the Trust Fund in 2000, 
as of February 29, 2000, a total of $8.1 million had been paid out or 
had been committed for awards approved, but not yet paid. Just $3.7 
million was available to pay for awards approved in the 7 months 
remaining in the fiscal year.
    The Trust Fund could be depleted in the April to June timeframe. 
Once the Trust Fund has been exhausted, claims will continue to be 
adjudicated. Letters will be issued to qualifying claimants stating 
that, although the criteria for approval have been met, no payment can 
be made until additional funds have been appropriated.
    Question. Would you please provide the Subcommittee with updated 
information on the number of claims approved for payment from the Trust 
Fund, the average amount of the claims approved, the number of claims 
denied, and the general reason for denial of these claims?
    Answer. Through February 2000, a total of 3,302 claims were 
approved--with an average value of $73,983--and 3,500 claims were 
denied. Claims are denied if one or more of the following eligibility 
criteria are not met: disease, exposure and identification of the 
proper party to file a claim. Downwinder and onsite participant claims 
are most frequently denied for failure to establish a compensable 
disease. Most uranium miner claims are denied because documentation 
does not establish exposure to the requisite amount of radiation during 
the course of underground uranium mining employment.
    Question. For the record would you please provide the Subcommittee 
with a breakdown of the types of claims approved or disapproved 
(childhood leukemia, other downwinder, onsite participants or uranium 
miners), the number of claims currently pending and the amounts 
disbursed by type of claim paid?
    Answer. The following table lists, by category, the total value of 
the awards approved by the Radiation Exposure Compensation Program, as 
well as the number of claims and appeals received, approved, 
disapproved and pending at the end of February 2000.

                                              RADIATION EXPOSURE COMPENSATION PROGRAM APRIL 1992-APRIL 2000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         Ending/Pending
                                                          Value of    Claims   Initially   Initially    Appeals   Appeals    Appeals   -----------------
                                                           Awards    Received   Approved  Disapproved  Received  Approved  Disapproved   Claims  Appeals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Childhood Leukemia....................................   $1,100,000        41         22          19          9  ........           9   .......  .......
Other Down-winder.....................................   78,070,000     2,898      1,540       1,258        212        22         185       100        5
Onsite Participant....................................   13,431,106       983        180         738        155        15         133        65        7
Uranium Miner.........................................  151,691,500     3,269      1,422       1,623        331       101         217       224       13
                                                       -------------------------------------------------------------------------------------------------
      Total...........................................  244,292,606     7,191      3,164       3,638        707       138         544       389       25
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Question. For my use, would you please provide this same 
information specifically for claims from New Mexico, including the 
total claims received, the total claims approved, the total claims 
denied and the total claims pending?
    Answer. With respect to claims for which the primary claimant 
resides in New Mexico, the Department has approved 396 claims and 
appeals, with a total value of over $39 million. The following table 
lists, by category, the value of the awards and the number of claims 
and appeals received, approved, disapproved, and pending at the end of 
February 2000.

                                      RADIATION EXPOSURE COMPENSATION PROGRAM--NEW MEXICO APRIL 1992-FEBRUARY 2000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         Ending/Pending
                                                          Value of    Claims   Initially   Initially    Appeals   Appeals    Appeals   -----------------
                                                           Awards    Received   Approved  Disapproved  Received  Approved  Disapproved   Claims  Appeals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Childhood Leukemia....................................      $50,000         1          1  ...........  ........  ........  ...........  .......  .......
Other Down-winder.....................................      250,000        18          5          12          2  ........           2         1  .......
Onsite Participant....................................      600,000        34          7          25          6         1           5         2  .......
Uranium Miner.........................................   38,134,500     1,076        348         645        117        34          75        83        8
                                                       -------------------------------------------------------------------------------------------------
      Total...........................................   39,034,500     1,129        361         682        125        35          82        86        8
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Question. The request for the payment of claims for fiscal year 
2001 totals $13.7 million. Is this amount sufficient to pay anticipated 
claims for that year? Why didn't the Administration request the full 
amount needed to fund the Program in 2001?
    Does this assume that there will be any further changes either 
regulatory or statutory in the Radiation Exposure Compensation Program?
    How many claims are projected to be filed and processed under 
current law in the upcoming year?
    Answer. As noted above, the 2001 request, $13.7 million, is an 
estimated $2.3 million short of requirements. The Department of Justice 
prepared its 2001 budget for OMB review prior to the enactment of the 
2000 appropriation. The 2001 request was based on an ``anticipated'' 
appropriation for 2000. When the OMB budget was prepared, the House 
mark provided no new funding for the Trust Fund, identifying carryover 
of $8.3 million that would be available in 2000. The Senate mark was 
$20.3 million. The Department believed at the time that the Senate mark 
was the most likely scenario for 2000 and prepared its OMB request of 
$13.7 million based on this assumption. OMB approved the full request. 
While the Department received more funds from OMB during the appeals 
process, they were only sufficient to fund a limited number of high-
priority programs.
    The 2001 request assumes that the current RECA statute and the 
regulations as modified in April 1999 will be in effect; no further 
changes are assumed.
    The following projections are based on the current statute and 
regulations: In 2000, we estimate that about 539 claims and appeals 
will be filed and that 378 will be processed. In 2001, we estimate that 
about 365 claims and appeals will be filed and that 379 will be 
processed.
    Question. Does the Administration have any long-range estimates as 
to the number of claims that might be filed under the Radiation 
Exposure Compensation Act under current law and regulations?
    Answer. No. It is difficult to estimate with certainty the number 
of claims that might be filed under the Radiation Exposure Compensation 
Act. The difficulty is compounded because claimants who have been 
denied compensation are permitted to file up to three times. Further, 
the Department continues to work to identify potential claimants, and 
to make information about the existence of the Program readily 
available to larger numbers of Americans through outreach efforts. For 
example, last spring we sent notification of the Department of 
Justice's modified regulations to over 3,200 individuals, including 
formerly-denied claimants, advocacy groups and attorneys. In November 
1999, our website went ``on-line,'' providing information about the 
Program and making e-mail communication available to the public. This 
year alone, hundreds of individuals have visited the website.
    Interest about the Program has also been generated outside the 
Department. During January and February 2000, the Public Health 
Service's National Institute for Occupational Safety and Health (NIOSH) 
notified approximately 12,000 former uranium miners and their families 
of the results of two NIOSH mortality studies involving white and 
Navajo uranium miners. The notification letter included information 
about the Program. Finally, this summer, several staff members will 
travel to many of the affected communities to provide information about 
the Program and the regulatory changes.

   EVALUATION OF RESULTS--EXPENDITURE FOR STATE AND LOCAL ASSISTANCE

    Background: While it is clear that good evaluation information is 
difficult to obtain. Each of the tasks involved--measuring outcomes, 
ensuring the consistency and quality of the data collected, 
establishing the causal connection between outcomes and program 
activities, and separating the influence of extraneous factors--raises 
formidable technical or logistical problems that are not easily 
resolved. Thus, evaluating program impact generally requires a planned 
study and, often, considerable limited by their ability to make useful 
links between budget requests and performance goals and to clearly 
explain how programs will achieve goals. A number of the Crime Act or 
the Byrne discretionary grant awards appear to have been made only on 
the basis of supposed benefit, and little empirical data has been 
advanced to support the continuation of these programs let alone the 
expansions proposed in the 21st Policing Initiative.
    Question. In the last seven years, the DOJ has awarded billions of 
dollars for state and local assistance. Beginning with 1993's Police 
Hiring Supplement program and later the COPS program, and then 
continuing through such program examples as drug courts and violence 
against women, the development of many of these programs was permitted 
on the basis of a deference to the executive branch's initiatives. 
Nonetheless, there was a clear expectation that these programs would be 
evaluated. Consistent with this expectation, millions of dollars were 
directed to the National Institute of Justice to evaluate these 
programs.
    Of these model or experimental programs, what solid evaluation 
results can you cite that these programs did anything beyond employ 
consultants? How have results led to program modification or 
termination, or conversely were used to validate a program so as to 
lead to its replication?
    Answer. The National Institute of Justice (NIJ), in partnership 
with program offices in the Office of Justice Programs (OJP) and the 
Office of Community Oriented Policing Services (COPS), has undertaken a 
broad and varied evaluation agenda involving most program initiatives 
implemented under the 1994 Crime Act. Some of these projects, such as 
the COPS National Evaluation, comprise comprehensive evaluations of a 
major Crime Act Title. Others, such as the Drug Courts evaluation are 
narrowly focused on one part of a program office's activity. In 
addition, NIJ uses a research and evaluation strategy designed to 
capture the outcomes of criminal justice innovation by local programs 
funded through Crime Act program offices. Where possible, process 
information and preliminary findings are used to refine and modify 
Crime Act programs, and to make recommendations for future changes. A 
few examples are provided below.
    In partnership with the COPS Office, an evaluation of the Chicago 
Alternative Policing Strategy program found that, on average, citizens 
in neighborhoods where community policing was implemented improved in 
their perception of police in comparison to communities without 
community policing programs. Residents in neighborhoods with community 
policing were more optimistic about future policing trends and were 
more satisfied with police responsiveness to neighborhood problems. 
These results have been replicated in places like Aurora, Joliet, IL 
and Tempe, AZ, and have been used to make informed modifications to 
programs, and to further facilitate implementation of effective 
community policing programs across the country.
    The NIJ and COPS cooperated in funding direct analytical support to 
local police departments through the Locally-Initiated Research 
Partnership (LIRP) program. LIRP provides another example of how 
research can be used to directly inform policy and assist in policy 
development. NIJ and COPS have funded over forty partnerships between 
police departments and researchers to enhance analytic and strategic 
planning capabilities in local police departments. Working together, 
partners identify and analyze local crime issues, and develop 
strategies to effectively address identified problems. Topics 
effectively addressed in planning at the local level through the LIRP's 
program include community policing implementation, domestic violence, 
unreported crime, crime mapping and analysis, performance evaluation, 
multi-lingual capability, and the use of the Internet for police/
citizen communications.
    For instance, the partnership between the Berkeley, CA Police 
Department and the East Bay Public Safety Corridor Partnership 
developed a preliminary risk assessment tool for police to use in 
making decisions about appropriate interventions based on the risk of 
recidivism. This Domestic Violence Safety Assessment/Supplemental 
Report is used by the Berkeley Police Department in all domestic 
violence cases and assists officers in assessing whether a case needs 
special attention.
    A partnership between six sheriffs' offices in the State of Florida 
and the University of Florida trained sheriffs patrolling neighborhoods 
in communication skills; established a permanent partnership that 
allowed the members to identify needs to pursue funding; trained 
sheriffs on using research to guide practice; evaluated the impact of 
the training by interviewing citizens and provided police with a 
guidebook on effective communication practices; and set up a mechanism 
to expand the research partnership.
    In a partnership between Northeastern University and the Boston 
Police Department, police members were guided through a strategic 
planning process that resulted in the creation of 16 neighborhood teams 
to identify salient issues in their areas and develop and implement 
strategies. Benefits of the partnership included increased visibility 
of police, greater involvement by community members in controlling 
crime and disorder, and improved relationships between police and the 
community.
    In cooperation with COPS, NIJ continues to examine a wide range of 
issues pertaining to the implementation of community-oriented, and 
problem-solving policing. Research findings have been continuously 
applied since the beginning of the COPS/NIJ collaboration. For 
instance, the evaluation of the Boston Ceasefire project documented a 
way in which researchers and practitioners may work in partnership to 
develop data-informed strategies to reduce youth gun violence. Through 
this partnership the Boston group developed strategies that reduced 
homicide and victimization by 60 percent and serious gang violence in 
the targeted area became a rare event. As a result, the approach used 
in the Ceasefire Project is being replicated across the country in 
cities such as Minneapolis, MN, Baltimore, MD, Los Angeles, CA, 
Stockton, CA, Lowell, MA, Bronx, NY and High Point, NY.
    The success of this research/practitioner partnership approach has 
prompted further development of similar programs like Strategic 
Approaches to Community Safety Initiative (SACSI). Currently in five 
pilot communities, researchers are teaming with local decision makers 
and practitioners to identify and analyze local problems, develop and 
implement policies and strategies, and tailor these interventions to 
crime problems at the local level.
    The Drug Court Program Office (DCPO) also has actively encouraged 
both local drug court evaluation efforts and national research through 
the NIJ. As another example of research leading to program modification 
and innovation, research results suggest incentives to be an effective 
means of reducing drug use. Also, results from a study of the 
experimental drug treatment/drug court program in the District of 
Columbia Superior Court demonstrate that sanctions should be 
consistently and immediately applied in order to enhance their impact. 
With these findings, drug courts have implemented policies to provide 
both timely sanctions and incentives as a means reducing drug use and 
program violations.
    To further study the effectiveness of this specialized type of 
court, NIJ awarded two research grants examining 4 of the older drug 
courts in the country. First phase reports of these evaluations have 
been recently submitted and findings show specialized drug courts are 
working to reduce substance abuse. Both studies examined re-arrest 
rates of drug court participants. In Portland, OR, the median time to 
re-arrest for drug court participants was 104 days, compared to 51 days 
for those who ``never entered'' and 29 days for those who ``never 
attended'' the drug court program. In Las Vegas, NV, the median time to 
re-arrest for drug court participants was 94 days, compared to 52 days 
for their counterparts. Analysis over a 12-month period showed that re-
arrest rates are lower among drug court participants; and, drug court 
participants are rearrested later when compared to those not 
participating in the drug court (who are most often rearrested in the 
first month). Similar results were also found in a second study 
indicating that recidivism rates decline and the time to re-arrest 
increases with drug court participation. Effective program 
modifications and refinements such as these have been disseminated 
through educational and technical assistance provided by the DCPO and 
the National Association of Drug Court Professionals.
    As another example, NIJ's evaluation of the Violence Against 
Women's office funded, Services, Training, Officers, Prosecutors (STOP) 
program demonstrates the importance of a coordinated community 
response, and the impact of victims' services as a response to the 
serious problem of violence against women. Preliminary results show 
increasing numbers of women victims of violence are being served, and 
more perpetrators of domestic and sexual violence are being arrested 
and convicted as a result of STOP programming. Results from a 1999 
survey of programs indicate that the percentage of domestic violence 
victims served increased annually for 85 percent of agencies providing 
domestic violence data. Similarly, the percentage of sexual assault 
victims served increased with STOP funding for 86 percent of the 
agencies providing sexual assault data. In one program site, the U.S. 
Attorney's Office in Washington, DC increased the rate of cases charged 
and tried by 76 percent, and dramatically increased the rate of cases 
resulting in conviction by 324 percent.
    Based upon results like these, the Administration has proposed that 
Violence Against Women Act-II include provisions to promote 
collaboration, to add specific types of program activities to be 
funded, to make distribution of funds more flexible, to lengthen the 
time frame for spending STOP dollars, to expand funding to include 
sexual assault projects, to promote projects for women from under-
served communities, and to develop better data and evaluation systems 
among other recommendations.
    Because measuring and documenting the ongoing program activities 
and outputs is a priority, NIJ requires all grantees to regularly 
report on all evaluation efforts. In this way, NIJ helps to facilitate 
the continuing improvement and refinement of criminal justice practice 
and policy by striving to provide empirically-based evaluation findings 
in a timely fashion. In many cases, OJP programs are attempting to 
alter the very foundation of criminal justice practice, and these 
program efforts often require a longer time frame for adequate 
evaluation of outcomes and impact. Since these long-term outcomes are 
at least as important as short-term effects, many of these evaluations 
initiated with the Crime Act are on-going.
    NIJ recognizes that practitioners and policy-makers need up-to-date 
evaluation findings and research results. Whenever preliminary findings 
from these evaluations have become available, NIJ uses dissemination 
vehicles such as the annual research and evaluation conference, 
Research in Progress seminars, and Research Preview publications and 
lectures. In these ways, NIJ strives to inform policy-makers and 
practitioners while still preserving the integrity of the evaluation 
design and guarding against forming premature conclusions or 
promulgating findings not yet supported by the data or the design of 
the evaluation.

    GPRA--MANAGING FOR RESULTS--IS DOJ BUDGET INFORMATION CREDIBLE?

    Background: As a key element, credibility of agency performance 
information is understood through a set of best practices. To be 
credible, this set must include a clear description of how the agency 
verifies and validates performance information. We can also recognize 
credible information if an agency's plan describes data limitations, 
including actions used to compensate for poor quality or missing data, 
as well as the implications of data limitations in terms of assessing 
performance. While it is understood that developing sharp performance 
information is a difficult process, there is little excuse for lack of 
reliability of financial information. This is troubling when, for 
example, considering the problems with the stewardship of the COPS 
program and its grant awards.
    Question. The credibility of performance information remains a 
problem since agencies have: (1) offered limited indications that data 
are reliable; (2) failed to identify the actions needed to compensate 
for weak data; or (3) neglected to compensate for the impact on 
implications for decision making caused by weak performance data and 
protect against these data limits. The DOJ was one of four agencies 
that GAO has determined to have credible performance information. 
Congratulations. However, on February 4, 2000 the GAO noted that as 
required under the Chief Financial Officer's Act, the audit opinion for 
DOJ's fiscal year 1998 Financial Statement contained the following 
disclaimer from the auditor: ``The auditor does not know if the 
financial statements are reliable in all material respects.''
    Given that reliable financial information is the basis for decision 
making and oversight of performance within any agency, how troubling is 
this disclaimer? What needs to be done to insure timely, complete, 
accurate financial information?
    Answer. On March 1, 2000, GAO and OMB were notified that DOJ 
received a ``qualified opinion'' from the auditors on the fiscal year 
1999 DOJ Financial Statement. Of the 10 DOJ entities audited, 9 
received unqualified or ``clean'' opinions, while 1, the INS, received 
a qualified opinion based on difficulties supporting deferred revenue 
and intragovernmental accounts payable data. The overall qualified 
opinion means the auditors, except for the cited INS items, found that 
the DOJ financial statement presented reliably and fairly, in all 
material respects, the financial position of the Department. This was a 
significant improvement in financial data reliability over the fiscal 
year 1998 disclaimer.
    DOJ senior leadership recognizes that reliable financial data is a 
cornerstone for decision making and accurate performance measurement. 
The fiscal year 1998 disclaimer was extremely troubling, and DOJ 
components implemented aggressive and detailed corrective action plans 
to resolve the weaknesses cited in the audit. While the fiscal year 
1999 audit opinion was an improvement over fiscal year 1998, DOJ 
components will again be implementing detailed corrective action plans 
to address remaining weaknesses. These plans will be pursued 
aggressively and monitored closely by the Attorney General and senior 
component management as DOJ works towards an overall clean opinion for 
the fiscal year 2000 audit.

   GPRA--MANAGING FOR RESULTS--LINKING DOJ COMPONENT BUDGET RESOURCE 
                           REQUESTS AND GOALS

    Background: In its July, 1999 review, ``Agencies Fiscal Year 2000 
Performance Plans,'' GAO commented that most of the annual performance 
plans do not sufficiently address how agencies will use their human 
capital to achieve results. Specifically, the report charges that few 
of the plans explain how the agency will build and maintain the human 
capital necessary to achieve performance goals. Although recruitment 
and training are addressed generally by agencies, GAO concluded that 
the failure to integrate human capital planning with the systematic 
integration of mission and program planning (one of the characteristics 
of a high performance organization) is a ``very serious omission.''
    Question. Agency plans to use resources and strategies to achieve 
performance results are often limited by their ability to make useful 
links between budget requests and performance goals and to clearly 
explain how programs will achieve goals. For example, the GAO 
characterized the failure to strategically develop human capital to 
achieve results as a government-wide problem.
    What strategies has DOJ put in place to develop human capital 
necessary to achieve results?
    Answer. The fiscal year 2001 Summary Performance Plan reflects our 
efforts in the area. The plan identifies the resources dedicated to the 
achievement of each strategic and annual goal. This includes human 
capital as well as the skills those individuals require and the IT 
systems upon which they depend to achieve stated objectives and 
targets. The plan also identifies, by annual goal, the significant 
training required by not only by our staff but others including state 
and local enforcement regulators and other service providers. This 
typically includes training in areas of high risk or new technology and 
includes training in law enforcement; counter-terrorism efforts to 
respond to terrorist attacks using chemical, biological, or nuclear 
weapons, referred to as first responder training; and training in 
missing and exploited children. While these do not focus on individual 
DOJ staff development (which would be inappropriate for this document) 
they reflect our role as a federal leader in developing the human 
capital required to achieve results for these areas. Furthermore, DOJ 
conducted an informal assessment of our staffing and recruitment and 
found one area that warranted Departmental oversight; border patrol 
agents. As a result, targeted performance was developed for this area 
and is included in our plan.
    In addition, we are revising our DOJ Strategic Plan, which is due 
to the Congress in September 2000. We will be including strategies to 
address human capital development in our revised plan.

                      CASELOADS IN FEDERAL COURTS

    Question. Madam Attorney General, 2 weeks ago, I spoke to a group 
of federal judges in Albuquerque from all 4 Southwest border states--
California, Arizona, New Mexico and Texas.
    As you must be aware, our border courts are swamped--these 4 
districts handle 30 percent of the entire federal criminal caseload 
pertaining to illegal drugs and illegal immigration.
    I understand that the President's Budget requests increases for the 
U.S. Attorneys, the Marshals Service, and other resources, including 
for the federal courts.
    Does the Department have an overall plan to address these resource 
needs to be sure that the federal system can handle the increasing 
caseload that is generated by our investment in law enforcement 
personnel and equipment?
    Answer. The Department is concerned about the rising caseload in 
the border districts. We have considered these needs in developing our 
2001 budget request. For USAs, we are requesting 48 positions (27 
attorneys), 24 workyears and $3,844,000 to complement the additional 
INS resources and to address a projected increase in the number of 
immigration cases filed. The USMS is requesting $10,345,000 and 194 
positions to handle the increased court security and prisoner workload 
that will result from staffing increases in other law enforcement 
agencies. The USMS is also requesting 43 positions and $2,063,000 to 
augment staff in districts where exceptional growth in the prisoner 
population has eclipsed the growth in the USMS workforce, principally 
along the Southwest Border.
    In addition, the Department's Detention Planning Committee (DPC), 
which is chaired by the Deputy Attorney General and includes heads of 
the Department components, is responsible for the Department's 
Detention Plan. This committee meets periodically to resolve detention 
issues, and oversees the Detention Plan revisions. The DPC also directs 
various working groups that address current and future bedspace needs. 
The Detention plan calls for strengthening coordination of the law 
enforcement and prosecutorial role in detention to predict more 
accurately the impact on detention and to identify, track and assess 
bedspace needs.
    We are also requesting $1 million for the creation of a Detention 
Trustee, who will report to the Deputy Attorney General, to improve our 
detention management department-wide. The Detention Trustee will focus 
on four areas: (1) managing the $25 million we are requesting for the 
detention and removal/repatriation of illegal aliens apprehended 
outside the continental U.S.; (2) contract management for all USMS and 
INS contracted detention space; (3) financial management of USMS and 
INS detention resources; and (4) implementing detention health and 
safety standards. The Trustee will also ensure that detention needs are 
considered along with any new enforcement or prosecutorial initiatives.
    Question. For example, our federal court in Las Cruces, New Mexico 
handles 65 percent of all the federal criminal cases in New Mexico, yet 
it has no full-time sitting judge. It is also in dire need of another 
Assistant U.S. Attorney, more U.S. Marshals, and more pre-trial and 
administrative personnel.
    Will you pledge that the Department will target a significant 
portion of these additional resources to the Southwest border courts to 
help address this backlog?
    Answer. As you correctly point out, the Southwest border is the 
source of a very large percentage of our overall criminal caseload. And 
when one considers just the immigration caseload, an even larger 
majority of these cases originate along the Southwest border. In 
determining the appropriate geographical allocation of new Assistant 
United States Attorneys, we follow a very detailed, analytical process 
whereby the competing needs of all the districts are taken into account 
and the most deserving districts are selected to receive the new 
resources. Because it is important to safeguard that proven, analytical 
process, we would not want to commit at this point to a specific 
geographical allocation, before we have had the opportunity to consider 
all the facts. However, it is very likely, given the caseload numbers 
that we have mentioned, that a significant portion of the new attorney 
positions would be allocated along the Southwest border.

      BIENNIAL BUDGETING--TIME-CONSUMING NATURE OF ANNUL PROCESS

    Background: The process to produce an annual budget takes almost 3 
years: (1) nearly 1 year to put together the President's budget; (2) 
another year for Congress to legislate the budget; and (3) the final 
year to actually execute the budget. Today, an agency manager is in the 
process of working on three different annual budgets. That manager is 
executing the fiscal year 2000 budget, he is preparing testimony and 
support materials for the fiscal year 2001 budget, and he will shortly 
begin preparation on the President's fiscal year 2002 budget.
    I am very pleased to see that, for the second year in a row, the 
President's budget supports biennial budgeting and appropriating.
    Question. Can you describe the steps involved in the process for 
developing a President's budget?
    Answer. The Department of Justice develops its President's budget 
in three main parts:
    Component Request to the Department:
  --Component develops budget estimates and presents them to the 
        Attorney General
  --The component request is reviewed by the Justice Management 
        Division and recommendations are made to the Attorney General 
        and Departmental management
  --The Attorney General and Departmental management make final 
        decisions for submission to the Office of Management and Budget 
        (OMB)
    Departmental Request to OMB:
  --The Department provides budget estimates to OMB
    OMB provides a passback of approved levels the Department provides 
OMB with an appeal of the passback levels the Department policy level 
and OMB management or White House (and, if necessary, the President) 
negotiate to arrive at budget levels (President's Request) for 
submission to Congress
    President's Request to Congress:
  --The Department presents a final budget request to Congress
    Question. Congress seems to be constantly working on the budget. 
Are the agencies and OMB also constantly working on the budget?
    Answer. OMB and the Department's budget offices spend a 
considerable amount of time preparing, formulating, presenting and 
executing three budget cycles, concurrently, for most of any given 
fiscal year. At the present time, the Department is developing fiscal 
year 2002 estimates, presenting the fiscal year 2001 budget to 
Congress, and executing the fiscal year 2000 appropriation.
    The Department's program and policy offices spend the majority of 
their time implementing programs and projects passed by Congress, and 
executing the appropriated budget.
    Question. Do you think that under the current budget process there 
is a preoccupation with budget projections and resource allocation as 
opposed to actually running programs and reviewing how they are 
operating?
    Answer. Program and policy offices within the Department spend the 
majority of their time implementing programs and projects passed by 
Congress, and executing the appropriated budget. The budget offices 
provide an oversight role on all budgetary matters for the programs of 
the Department. This enables the program and policy offices to manage 
their programs, within Congressional intent and budget constraints.
    Question. Can you describe how your job as the head of a major 
cabinet department would change if we moved to a system of biennial 
budgeting and appropriations?
    Answer. The Department strongly supports reforms to improve the 
efficiency and effectiveness of the Federal Government. We believe that 
biennial budgeting offers a management tool with potential to enhance 
our performance. The primary benefit to a 2-year budget would be that 
the Department would be allowed more time to implement and manage 
projects, and provide long-range planning and oversight of programs. 
However, in order for biennial budgeting to work, Congress must afford 
agencies the flexibility to respond to changing and unforseen 
circumstances that may arise as a result of the time lag between budget 
years. Mid-cycle reviews would have to occur, with possible 
supplementals to the appropriations bill. If this process becomes too 
cumbersome with excessive negotiations and supplementals, then the time 
saved, essentially, would be lost.
                                 ______
                                 
             Questions Submitted by Senator Mitch McConnell

                           TOBACCO LITIGATION

    Question. Price increases resulting from any damage award in the 
federal lawsuit against the tobacco industry would cause a decline in 
the demand for cigarettes. Price increases resulting from the 
settlement of the state health care reimbursement suits have already 
led to a 45 percent decline in burley tobacco quota and an 18.5 percent 
decline in flue-cured tobacco quota. Have you estimated the likely 
declines in domestic tobacco quotas if the government prevails in the 
tobacco lawsuit?
    Answer. We have not prepared any such estimates. The litigation 
filed by the Federal Government--United Sates v. Philip Morris, Inc., 
et al.--was brought under the Medical Care Recovery Act (MCRA) and the 
Medicare Secondary Payer Act (MSP) to recover money spent by the 
Federal Government on smoking-related health care costs, and under the 
Racketeer Influenced and Corrupt Organizations Act (RICO) to obtain 
equitable relief, and to prevent and restrain certain unlawful conduct. 
Issues related to the effect that potential recoveries by the United 
States may have on tobacco domestic tobacco quotas are not presented by 
the case.
    That does not mean that the concerns of tobacco farmers are not 
shared by the Administration. Indeed, as the Administration has said on 
numerous occasions, it is committed to protecting tobacco farmers and 
their communities. As you know, the Administration fully supported the 
$5 billion settlement to compensate tobacco farmers, which was agreed 
to by the states and industry last year. Second, the President signed 
and supported the fiscal year 2000 Agricultural Appropriations bill, 
which provides $328 million to compensate tobacco farmers who had 
quotas reduced in 1999, and we also note that the Agricultural Risk 
Protection Act of 2000 includes $340 million for tobacco farmers in 
fiscal year 2001. And in the context of the pending litigation, the 
Administration supports legislation that would ensure that an adequate 
portion of any recovery the Department may obtain is used to ensure the 
financial security of tobacco farmers and their communities.
    Question. Have you estimated the economic and other effects on 
tobacco farmers of a government victory in this lawsuit?
    Answer. No. See response above.
    Question. Have you estimated the economic effect on communities in 
which tobacco is grown if the government prevails in the tobacco 
lawsuit?
    Answer. No. See response above.
    Question. Please provide any documents relating to your responses 
to the above questions.
    Answer. For the reasons above, the Department has not performed any 
analyses of the type that you have requested, and therefore has no 
documents responsive to this request.
    Question. The Justice Department's request for $20 million in 
fiscal year 2000 for tobacco litigation was denied. How is the 
Department funding its ongoing efforts in that litigation?
    Answer. During the appropriations process, Congress made clear that 
the Department could use existing funding sources to support its 
litigation effort, which seeks to recover billions of dollars for the 
American taxpayer. Indeed, Senator Judd Gregg, Chairman of the 
Commerce, Justice, State Appropriations Subcommittee, stated in a 
colloquy on the Senate floor on July 22, 1999:

          While the Committee was unable to provide new funding [for 
        the tobacco litigation] as the Administration requested, 
        nothing in the bill or the report language prohibits the 
        Department from using generally appropriated funds, including 
        funds from the Fees and Expenses of Witnesses Account, to 
        pursue this litigation if the Department concludes it has merit 
        under existing law.

    In the same colloquy, Senator Durbin stated:

          I think the record is eminently clear that the Department of 
        Justice has the authority to move forward on tobacco litigation 
        without any limitation whatsoever from this legislation.

    Accordingly, the Department is drawing on funding sources that it 
regularly uses to support litigation on behalf of the United States. In 
particular, the Justice Department is using base funding provided to 
the Civil Division ($1.8 million) and funds from the Health Care Fraud 
and Abuse Control account ($4 million), which are used in cases that 
seek to protect, among other things, the Medicare trust fund. 
Department funding for tobacco litigation currently planned for fiscal 
year 2000 totals $5.8 million.
    In addition, as the Department has done in other significant cases, 
we have obtained agreements from three client agencies--the Departments 
of Defense, Veterans Affairs and Health and Human Services--to 
reimburse the Department for up to $7.95 million in total. Congress 
expressly authorized such reimbursements agreements in Section 109 of 
the fiscal year 1995 Commerce, Justice, State appropriations bill, 
which stated:

          Notwithstanding 31 U.S.C. 3302 or any other law, in 
        litigation involving unusually high costs, the Department of 
        Justice may receive and retain reimbursement for salaries and 
        expenses, for fiscal year 1995 and thereafter, from any other 
        governmental component being represented in the litigation.

    DOD, VA and HHS are being represented in the cigarette litigation; 
indeed, damages recovered under the theories advanced in the litigation 
will flow in large measure directly to those Departments for the 
provision of health care. This approach is consistent with a 1998 Sense 
of the Congress, where Congress went on record to urge the Attorney 
General to pursue a federal suit to recover the costs of tobacco-
related damages from the cigarette companies. In the Transportation 
Equity Act for the 21st Century, Public Law 105-178, Congress passed 
the following language:

          It is the sense of the Congress--(1) that the Attorney 
        General or the Secretary of Veterans Affairs, as appropriate, 
        should take all steps necessary to recover from tobacco 
        companies amounts corresponding to the costs which would be 
        incurred by the Department of Veterans Affairs for treatment of 
        tobacco-related illnesses of veterans.

    Congress further expressed its view that funds recovered in such a 
suit should be used to fund VA health care for veterans made ill by 
tobacco use.
    These agency reimbursement agreements are discussed in more detail 
in the responses below. If the agency reimbursements are unavailable, 
and absent any other funds being made available, this litigation could 
not proceed.
    Question. The Justice Department has not requested any money in its 
fiscal year 2001 budget for tobacco litigation. There is, however, a 
line-item request for $4 million in the Department of Health and Human 
Services (HHS) budget in the Public Health and Social Services 
Emergency Fund. Why is this request in the HHS budget and not in the 
Justice Department budget?
    Answer. The Administration plans to spend up to $26.2 million for 
tobacco litigation in fiscal year 2001. This estimate is based on 
anticipated agency reimbursements totaling $12 million, including $4 
million from the Department of Health and Human Services (HHS), $4 
million from Department of Defense (DOD), and $4 million from the 
Department of Veterans Affairs (VA). The remaining $14.2 million will 
be funded out of the Department's base budget request which is pending 
Congressional approval and the Health Care Fraud and Abuse Control Act 
(HCFAC) Trust Fund. Specifically, $10.4 million will be allocated from 
the HCFAC, and $1.8 million will be provided from the Civil Division's 
base funds. Additionally, we estimate using up to $2 million from the 
Fees and Expenses of Witnesses appropriation to fund potential expert 
witness expenses.
    Since the enactment of Section 109, the Civil Division has depended 
heavily on agency reimbursements, particularly for high-stakes cases 
that require a substantial dedication of resources. Indeed, the 
Department has relied on this provision to obtain from client agencies 
more than $338 million for litigation that has a potential liability to 
the Federal Government of more than $36 billion, and for litigation 
that could return billions more to the Treasury of the United States. 
The reimbursements we receive fund personnel, automated litigation 
support, alternative dispute resolution, and consultant services that 
are critical to meeting discovery requirements and preparing for trial.
    In the case of the Department's litigation against the cigarette 
companies, U.S. v. Philip Morris, Inc., et al., we have received funds 
from three of the agencies on whose behalf it was brought: HHS, VA, and 
DOD. The litigation seeks to recover funds that these agencies have 
paid to cover the costs of treatment for tobacco-related illnesses 
under programs including: Medicare, the Veterans Health Administration 
(VHA), the Civilian Health and Medical Program for the VA (CHAMPVA), 
the Civilian Health and Medical Program for the Uniformed Services 
(CHAMPUS), TRICARE, and the Federal Employees Health Benefits Act 
(FEHBA).
    The Department of Justice (DOJ) consulted with these agencies 
during the development of the cigarette litigation. These agencies 
supported the filing of the suit, and continue to support the 
litigation in active cooperation with DOJ. In light of the billions of 
federal dollars spent each year on cigarette-related diseases, we 
believe that these agencies and the federal taxpayers will recoup their 
investment in this litigation many times over.
    Question. Has HHS provided any funding or support to assist in its 
prosecution of the tobacco lawsuit in fiscal year 1999 or fiscal year 
2000?
    Answer. In fiscal year 1999, HHS did not provide the DOJ with any 
funding to support the cigarette litigation. As in other litigation 
involving Medicare and other HHS programs, HHS personnel did assist the 
Department in developing the litigation, primarily by providing the 
Department with access to relevant HHS information. Whenever the 
Department of Justice litigates on behalf of an agency, we must 
necessarily work closely with agency staff who have access to relevant 
information, primarily those individuals involved in the matters at 
issue in the litigation and attorneys in agency general counsel's 
offices. In the cigarette litigation, the Department is seeking to 
recover funds expended by HHS to treat cigarette-related illnesses. As 
the agency that incurred the costs, HHS possesses the information 
needed to document these expenditures.
    In fiscal year 2000, in addition to the type of assistance outlined 
above, HHS has reimbursed the Department $2.65 million for costs 
incurred in pursuing this litigation.
    Question. If so, how has HHS provided this assistance to the 
Department of Justice? Has HHS made any direct payments to the 
Department of Justice? Have HHS personnel provided support for the 
Department of Justice? Has HHS retained outside consultants or 
contractors to provide support?
    Answer. See response above. As far as the DOJ is aware, HHS has not 
hired any outside consultants or contractors to support our litigation 
efforts.
    Question. How much has this support totaled, in time and estimated 
dollars expended?
    Answer. We have no records that would indicate the time or money 
expended by HHS personnel to assist the Department, other than the 
reimbursement payment outlined above.
    Question. Please provide a detailed breakdown of these 
expenditures.
    Answer. We estimate that we will use the entire fiscal year 2000 
reimbursement from HHS for litigation consultants. This year, these 
services will be aimed primarily at establishing an empirically-sound 
mechanism for measuring damages. Other than that, we do not have 
records that would indicate other expenditures by HHS to assist DOJ in 
this litigation.
    Question. What program items in HHS's budget were used to provide 
funds for tobacco litigation support for the Department of Justice?
    Answer. The DOJ does not have information regarding the source of 
the funds provided by HHS in support of cigarette litigation.
    Question. Are there any other funding requests for tobacco 
litigation in the Administration's budget? If so, please specify the 
specific budget(s) and the amount(s) of the request.
    Answer. There are no funding requests for cigarette litigation in 
fiscal year 2001 from any sources other than those identified in the 
response above.
    Question. The Administration requested $20 million for fiscal year 
2000 for tobacco litigation but apparently requested only $4 million 
for tobacco litigation in fiscal year 2001. Why the dramatic decrease?
    Answer. As outlined in more detail in the response above, the 
Administration's fiscal year 2001 budget request for cigarette 
litigation totals $26.2 million.
    Question. Do you plan to submit a reprogramming request for fiscal 
year 2000 for tobacco litigation?
    Answer. The Department has no plans to submit a reprogramming 
request for the cigarette litigation in fiscal year 2000.
    Question. Will the Administration seek additional funds for tobacco 
litigation in the fiscal year 2000 supplemental appropriations?
    Answer. The Department has not sought additional funds for the 
cigarette litigation in the fiscal year 2000 supplemental 
appropriation.
    Question. How much has the Department spent to date on the tobacco 
lawsuit?
    Answer. As of May 9, 2000, the Civil Division had filled 26 
positions and spent $3.9 million in connection with the cigarette 
lawsuit.
    Question. Did any of the personnel currently working on the tobacco 
lawsuit formerly work on any of the criminal investigations of the 
tobacco industry? Are they able to make use of any of the information 
gained in those investigations?
    Answer. No personnel working on the lawsuit previously worked on 
any criminal investigation of the tobacco industry. The litigation 
filed by the Department was developed without any access to information 
obtained during the course of the Department's criminal investigation 
against the tobacco industry.
    Rule 6(e) of the Federal Rules of Criminal Procedure prohibits any 
government attorney who is not involved in a grand jury proceeding from 
having access to that grand jury information absent a court order.
    Question. To date has the Department hired any consultants or 
contractors or counsel to assist the Department in the tobacco lawsuit?
    Answer. The Department has entered into contracts to assist the 
Department in the development of its litigation. Information on one of 
those contracts, a legal consulting arrangement with the law firm of 
Robins, Kaplan, Miller & Ciresi, L.L.P. (Robins, Kaplan), is outlined 
below. Because litigation is currently on-going, and the Department is 
relying on consultants to assist in the lawsuit, to provide detailed 
information on these consultant activities and expertise on the public 
records could prove damaging to the interests of the United States. 
Such information would not be available to other parties in the 
litigation.
    In addition, the presiding judge in the cigarette litigation, D.C. 
District Court Judge Gladys Kessler, has issued an order requiring the 
parties to pay for the services of a court approved neutral, whose job 
it is to assist in the development of a pre-trial case management plan. 
Information on the Department's share of the funding of this court 
approved neutral is also outlined below.
    Question. If so, please provide: the names of such consultants, 
contractors or counsel; the dates on which they were retained; the 
terms of their retention, including any caps on the compensation that 
such consultants, contractors or counsel may receive either in total or 
on an hourly basis, and the length of time they are expected to be 
retained; the specialties or expertise that each such consultant, 
contractor or counsel has, and why this specialty or expertise is 
required to enable the government to prevail in this case.
    Answer. The Department entered into a contract for legal consulting 
services with the law firm of Robins, Kaplan, Miller & Ciresi L.L.P. 
(Robins, Kaplan) to provide assistance the Department in the 
development of our potential litigation against the major cigarette 
companies. This included assistance in gathering and analyzing 
evidence, developing potential litigation strategies, and conducting 
other similar activities. The Robins, Kaplan firm represented the state 
of Minnesota and Blue Cross-Blue Shield of Minnesota in their 
litigation against the major cigarette companies.
    The contract was entered into on April 5, 1999, and ended on June 
30, 1999. Pursuant to the contract, Robins, Kaplan was compensated at 
the rate of $75 per attorney hour, substantially below the firms' 
normal billing rates. The total cost paid under this contract, which 
ended on June 30, 1999, was $50,113.34. This figure includes both 
attorney time ($28,023.75) and reimbursement of costs ($22,089.59). 
(The contract had an outside cap on total compensation of $81,670; that 
cap was not met.)
    In addition, pursuant to a court order, the DOJ and the other 
parties to the current cigarette litigation are paying for the services 
of a court approved neutral. The parties selected Donald H. Green of 
Pepper Hamilton, LLP. Retained last January, he is experienced in 
complex litigation as well as alternative dispute resolution. Mr. Green 
is assisting the parties in developing a pre-trial case management 
plan. After the pending motions have been resolved, he will likely be 
used to assist in planning the discovery phase. He is being compensated 
at $360 per hour. The Department is paying 50 percent of his hourly 
rate, or, $180 per hour.
    Question. Have any other federal agencies provided funding or 
assistance to the Department of Justice (including any legal, 
paralegal, expert or technical services or cooperation by government 
employees, contractors or others) in connection with the tobacco 
lawsuit? If so, please identify those agencies, the nature of the 
funding or assistance, and the estimated cost of providing that 
assistance.
    Answer. Yes. Discovery in the cigarette litigation is likely to 
involve the production of documents from numerous federal agencies. 
Judge Kessler has ordered the Federal Government to preserve its 
tobacco-related documents. In addition, pursuant to the informal 
discovery process ordered by Judge Kessler, the Department and the 
cigarette company defendants have begun discussions concerning the 
scope of documents that the defendants are likely to seek in discovery. 
Accordingly, federal agencies with such documents have provided 
assistance to the Department in complying with the court's order and 
preparing for discovery in the case. In addition, agencies such as 
DOD), VA, and the Office of Personnel Management (OPM), which have paid 
for the medical care of beneficiaries suffering from cigarette-related 
diseases, have assisted the Department by providing the Department 
access to information necessary to develop the case. Such assistance is 
regularly provided to the DOJ in other cases. The DOJ does not have any 
records that would indicate time expended by agency personnel on the 
litigation.
    As discussed in our response to the second question above, the HHS 
has entered a reimbursement agreement with the Civil Division which 
will fund up to $2.65 million. In addition, the DOD and VA have entered 
into agreements with the DOJ to reimburse Justice for a portion of the 
costs incurred to bring this litigation. Each agency is providing the 
Department with a reimbursement of $2.65 million. These reimbursements 
were arranged primarily to fund the fiscal year 2000 costs we estimate 
in connection with the pretrial phase of the litigation. The Division 
expects to incur significant expenses for the services of consultants 
skilled in damage assessment as well as individuals or firms possessing 
expertise in medical specialities. A portion of our Automated 
Litigation Support costs arising from discovery activities will also be 
funded through these reimbursement agreements.

                LITIGATION AGAINST FIREARM MANUFACTURERS

    Question. The Department of Housing and Urban Development has 
proposed that litigation be filed against firearm manufacturers on 
behalf of various public housing authorities. Has the Department of 
Justice engaged in any evaluation or analysis of the possibility of a 
lawsuit by the Federal Government or by any recipients of federal funds 
against firearm manufacturers?
    Answer. Following the filing by private parties of several suits 
against the gun industry, the Department of Justice, at the request of 
HUD, reviewed possible litigation against the gun industry in late 
1998.
    HUD is not filing or planning to file litigation, in its own name 
or on behalf of any agency of the Federal Government, against the 
nation's gun manufacturers to recover costs spent to address gun-
related violence in public housing. DOJ is not filing or planning to 
file such a suit on HUD's behalf.
    The Administration indicated that certain Public Housing 
Authorities (PHAs) may bring litigation against gun manufacturers. The 
PHAs are not federal entities, but are separate legal entities 
organized under state laws that can sue and be sued. For that reason, 
if the PHAs choose to sue gun manufacturers, the Justice Department 
would have no role in the litigation. Accordingly, the Justice 
Department has not expended its resources to examine the merits of such 
a suit.
    Question. How much activity--expressed in time and estimated dollar 
expenditures--has the Department of Justice devoted to possible 
litigation against the firearm manufacturers?
    Answer. As stated above, the Department has no plans to bring 
litigation against the firearms industry. As you know, the 
Administration has engaged in discussions with certain gun 
manufacturers to discuss policies the manufacturers can adopt to 
improve the safety of their products, and keep their products from 
falling into the hands of criminals, and has entered into an agreement 
with one manufacturer, Smith and Wesson. The Justice Department has 
always played a leading role in developing the Administration's views 
on gun policy, and we will continue to do so. Our contribution, 
however, has been limited to a policy role.
                                 ______
                                 
         Questions Submitted by Senator Ben Nighthorse Campbell

                      METHAMPHETAMINE TRAFFICKING

    Question. In Colorado, particularly the Western Slope and Grand 
Junction, the methamphetamine problem has been described as ``beyond 
crises.'' Can you please tell the Committee what type of resources the 
Department plans on devoting to fighting the meth problem? What are 
your plans for working with the Drug Enforcement Administration (DEA) 
to fight this problem?
    Answer. In fiscal year 2000, the Community Oriented Policing 
Service (COPS) is providing $1 million to the Rocky Mountain 
Methamphetamine Initiative in Colorado. This funding will be used for 
additional law enforcement officers and to train local and state law 
enforcement officers on the proper recognition, collection, removal, 
and destruction of methamphetamine. COPS is currently working with DEA 
and the Bureau of Justice Assistance (BJA) to administer this funding 
and provide technical assistance, if necessary.
    DEA has provided clandestine laboratory safety certification 
training to 55 state and local police officers and 18 DEA agents in the 
State of Colorado over the past 5 years. Each of these officers were 
issued over $2,000 in specialized clandestine laboratory safety 
equipment. In addition to the 55 Colorado officers who graduated from 
DEA's 1 week Clandestine Laboratory Safety Certification School, 
numerous officers have been provided annual clandestine laboratory re-
certification training. This training is mandated by the Code of 
Federal Regulations (CFR--1910.12), and allows the officers to maintain 
their current certification status. DEA will continue to provide this 
basic and re-certification training to law enforcement personnel in the 
State of Colorado, this year and in the years to come.
    DEA recently distributed $63,000 to the Denver Field Division for 
the acquisition of additional specialized clandestine laboratory safety 
equipment (i.e., air purified respirators, air monitors, nomex fire-
resistant ballistic vests, etc.) for DEA special agents and task force 
officers who participate in clandestine laboratory raids. It is 
anticipated that another $63,000 in funding for this type of safety 
equipment will also be provided to the Denver Field Division before 
September 2000. In addition, DEA recently purchased two new clandestine 
laboratory safety trucks for utilization within the Denver Field 
Division.
    The State of Colorado will also continue to benefit from programs 
specifically aimed at addressing the statewide methamphetamine 
trafficking problem. DEA's Operation Velocity and Operation Backtrack 
provide funding and investigative support to the field for 
methamphetamine investigations, clandestine laboratory investigations, 
and investigations involving rogue chemical companies that divert 
methamphetamine precursor chemicals for illegal use. Both of these 
programs are currently supporting cases in Colorado.
    Question. The DEA is planning on opening a new office in Grand 
Junction, Colorado, which will be an off-shoot of the Glenwood Springs 
office. What impact will the office have on the Western Slope of 
Colorado? How many agents should be assigned to that office?
    Answer. DEA opened a Post of Duty (POD) in Grand Junction in March 
1999, and plans have been approved to upgrade this office to a Resident 
Office. DEA currently has two special agents in the Grand Junction POD, 
which is co-located with a state and local HIDTA task force. As part of 
the Grand Junction upgrade, DEA will move four special agent positions 
from its Glenwood Springs Office (thereby reorganizing Glenwood Springs 
to a POD) to Grand Junction in an effort to address drug trafficking 
issues in the Western Slope region of Colorado more fully.
    DEA agents in Grand Junction currently participate in the 14-member 
Grand Valley Joint Task Force, which includes law enforcement officers 
from the MESA County Sheriff's Office, the Grand Junction Police 
Department, and the Colorado Highway Patrol.
    The Grand Valley Joint Task Force has investigated 28 cases, 
resulting in 247 arrests. The following case summaries exemplify the 
close collaborative relationship between DEA and state and local law 
enforcement on the Grand Valley Joint Task Force.
  --A methamphetamine case which resulted in the arrest of 25 
        defendants, the seizure of 5 pounds of methamphetamine, 1 
        kilogram of cocaine and $60,000 in cash. Further coordination 
        with the Immigration and Naturalization Service (INS) resulted 
        in the arrest of nine illegal aliens.
  --The intelligence gathered as a result of this case enabled DEA's 
        Los Angeles Field Division to initiate five Title III wiretaps, 
        resulting in the seizure of three methamphetamine laboratories. 
        These seizures were traced to an important Mexican 
        methamphetamine group working along the Southwest border, and 
        led to 7 arrests and the seizure of 41 gallons of 
        methamphetamine solution, the equivalent of 160 pounds of 
        methamphetamine.
    The addition of four special agent personnel to DEA's upgraded 
Grand Junction Resident Office will allow the agency to expand its 
investigation of major methamphetamine traffickers operating within the 
Western Slope region and increase the agency's participation in 
programs like the Grand Valley Joint Task Force.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

                DRUG TREATMENT/OFFENDER REENTRY PROGRAM

    Background: As you know, there are now more than 1.8 million people 
in our prisons and jails. A recent study indicates that at some point 
this year the population of prisoners will increase to 2 million.
    Studies also show that more than 80 percent of the prison 
population has some kind of substance abuse problem. But many prisoners 
are not being treated for their drug problem. According to the Office 
of National Drug Control Policy, only about 15 percent of all state 
inmates complete substance abuse treatment before their release. Each 
year, 500,000 offenders are released without adequate drug treatment.
    So we wind up with a cycle of drug use and crime. Prisoners who 
have not received drug treatment get back on the streets and commit 
crime.
    Madame Attorney General, the Department's budget request includes 
funding for a number of programs that will help prisoners get drug 
treatment and assist their return to society. There is $171 million in 
additional funding for drug treatment programs; $75 million for grants 
to help states and localities implement drug supervision programs; $65 
million for the Residential Substance Abuse Treatment Program; and $60 
million for an Offender Reentry Program which will fund partnerships 
between law enforcement entities and community leaders to better 
prepare communities to handle inmates reentering society.
    Question. How far will these funds go in providing drug treatment 
to all of the prisoners who need it? If 85 percent of prisoners are not 
getting drug treatment, we have a long way to go.
    Answer. Of the estimated 1.4 million offenders currently housed in 
our nation's prisons and jails, over 80 percent are substance abusers 
and, therefore, candidates for some sort of intervention. It is well 
established that the need for residential substance abuse treatment 
outpaces the Federal Government's ability to provide it--for example, 
during 2000, OJP's Residential Substance Abuse Treatment (RSAT) program 
estimates it will provide drug treatment services to 20,000 inmates. 
However, it should be noted that OJP's training and technical 
assistance activities continue to do much in the way of educating state 
and local criminal justice agencies on the value comprehensive 
substance abuse treatment, lessons learned, and best practices.
    Recent studies demonstrate that drug-dependent individuals who 
receive comprehensive treatment decrease their drug use, decrease their 
criminal behavior, increase their employment, improve their social and 
interpersonal functioning, and improve their physical health. When 
compared to substance abusers who voluntarily enter treatment, those 
coerced into treatment through the criminal justice system are just as 
likely to succeed.
    Moreover, studies suggest that, not only do treatment interventions 
work, they are cost-effective. In 1994, the RAND Corporation reported 
that drug treatment is the most cost-effective drug control 
intervention. Another 1994 study examined CALDATA, a comprehensive drug 
and alcohol treatment program in California, and concluded that for 
every dollar invested in drug treatment, taxpayers saved $7. This 
savings was attributable to decreased use of drugs and alcohol and the 
resulting reduction in costs related to crime and health care.
    One major lesson we have learned is that leveraging the coercive 
power of the criminal justice system to provide substance treatment and 
impose sanctions against the offender is effective in breaking the 
cycle of substance abuse and crime. This is evident in the success of 
OJP's Residential Substance Abuse Treatment (RSAT) program, which 
provides formula grants to states for drug testing and treatment, and 
the Drug Court program, which provides discretionary grant funding for 
planning, implementing and enhancing of state and local drug courts, 
which provide specialized drug treatment and rehabilitation for non-
violent substance abusing offenders. To help bridge the funding gap, in 
2001, OJP requests $75 million to establish the Zero Tolerance and Drug 
Intervention Initiative, which will provide discretionary grants to 
state, local and tribal governments to institute comprehensive drug 
testing and treatment programs. Local and tribal governments are 
expected to be the largest beneficiaries as very little state funding 
``flows through'' to local and tribal jails. All three of these 
programs fall under the Administration's ``Stop Drugs--Stop Crime'' 
Initiative.
    Compounding the problem, are the estimated 500,000 inmates who will 
return to communities this year. Historically, two-thirds of this 
population are rearrested for new crimes within three years. Reentry 
programs, such as the proposed $60 million Community Supervision 
Initiative: Project Reentry, would provide resources to assist in 
preparing offenders for transition from prison to the community by 
addressing critical self-sufficiency issues including substance abuse 
and mental health problems, and job readiness and placement.
    The Department continues to leverage available funding to provide 
state and locals with the necessary building blocks to implement 
comprehensive offender drug testing and treatment interventions. By 
utilizing the federal resources provided, state and local communities 
can create broad partnerships that use their combined resources to 
implement comprehensive drug treatment programs and maximize the number 
of offenders reached.
    Question. Also, can you give us some additional information on the 
Offender Reentry Program? What types of assistance will that program 
provide?
    Answer. The focus of the Offender Reentry Program is to help 
communities address the public safety challenges posed by state and 
federal prisoners returning to the community. The Initiative would 
enable states and local communities to create broad partnerships that 
will use their combined resources to provide the necessary combination 
of surveillance, sanctions, incentives, and support services to provide 
increased protection to both urban and rural communities that 
experience a high percentage of returning inmates.
    In 2001, a total of $145 million is requested for Project Reentry, 
which will be administered through a joint partnership between DOJ's 
Office of Justice Programs (OJP), the Department of Labor (DOL), and 
the Department of Health and Human Services' Substance Abuse and Mental 
Health Services Administration (SAMHSA). Of this amount, OJP would 
administer $60 million in program funding, the DOL would target $75 
million to develop a broad range of pre- and post-release job training 
and placement and other programs in the same communities, and SAMHSA 
would dedicate $10 million in substance abuse and mental health 
treatment to support these efforts.
    Central to OJP's efforts is helping communities ensure that 
offenders are prepared for their return to communities through adequate 
planning and monitoring prior to and following release in such critical 
areas as employment and substance abuse testing and treatment. Our 
efforts also focus on helping to prepare communities for returning 
offenders by supporting the analysis of reentry statistics and 
development of adequate supervision and support systems. Offender 
reentry plans would be developed at both the individual and community 
levels, and would draw upon and coordinate the resources of criminal 
justice agencies (i.e., institutional corrections, probation, parole, 
and police) as well as community resources (i.e., employment, 
treatment, family, business, and faith-based organizations).
    Specifically, OJP's $60 million would provide for the following:
    The Reentry Partnerships Initiative ($40 million) focuses on 
developing broad governmental and community partnerships to oversee the 
development and implementation of offender as well as community reentry 
plans, including the use of graduated sanctions and incentives and 
enhanced offender supervision mechanisms to keep offenders on track. 
Funding could be used to hire community safety officers--community 
corrections (probation/parole) officers--to work with offenders while 
still incarcerated and to help supervise offenders in the targeted 
neighborhoods as well as to hire case managers who would work in 
partnership with police and community leaders to develop the necessary 
support network to ensure successful transition to jobs and treatment. 
Funds could be also used for drug and alcohol testing and treatment, 
community planning and analysis, developing appropriate progress 
tracking tools, convening victims panels, and other surveillance and 
service efforts.
    The Reentry Courts Initiative ($10 million) focuses on creating 
court-based oversight programs for returning offenders that would use 
the authority of the court not only to develop and monitor offender 
reentry plans and to apply graduated sanctions and incentives, but also 
to draw in other essential partners such as community corrections, 
local law enforcement, and a full range of service providers to help 
supervise and support the offender reentry process. Patterned after 
successful drug courts, reentry courts would create judicial oversight 
of returning offenders to promote positive offender behavior.
    The Juvenile Reentry Initiative ($5 million) would help states 
develop an intensive juvenile transition support program to address the 
public safety concerns and needs of youth in custody of the juvenile 
justice system. Local juvenile justice agencies, juvenile correctional 
agencies, juvenile courts, parole agencies would work in partnership 
with community-based service providers, law enforcement agencies, and 
state and local Workforce Investment Boards to develop and implement a 
comprehensive juvenile reentry program with an emphasis on job training 
and placement services as well as educational, treatment, and family 
support.
    Research and Development ($5 million) would be used to track the 
progress of the Reentry Partnerships and Reentry Courts and to improve 
program content. NIJ would undertake a series of coordinated activities 
that will inform state and local efforts over time. NIJ would also 
sponsor research on a range of issues relating to reentry programs, 
including drug and alcohol testing and treatment outcomes, the ability 
of transition programs to prepare offenders for return to the 
community, the effects of family and community ties on job performance 
and compliance with release conditions, and the attitudes of the 
business community toward returning offenders as employees. NIJ will 
evaluate the results of this information as well as a cross section of 
the projects funded under the joint Justice/Labor/HHS initiatives. 
These results will be communicated rapidly to participating programs 
through cluster conferences, information dissemination to the field, 
and a national teleconference.

                             DEATH PENALTY

    Question. In recent years, a number of death row inmates have used 
DNA testing to prove that they were innocent. Since 1976, when capital 
punishment was reinstated, 610 people have been executed. During the 
same time, 85 people have been found innocent and were released from 
death row. They were not freed on some technicality, there were freed 
because DNA evidence proved that they did not commit the crime. So, for 
every seven executions, one innocent person has been wrongly sentenced 
to death. That is a very disturbing statistic.
    These findings have renewed concerns about the death penalty. The 
American Bar Association has called for a moratorium on executions. 
George Ryan, the Governor of Illinois, has announced a moratorium on 
executions until a study of the death penalty system in that state is 
completed.
    According to the most recent Department of Justice report, there 
are 19 prisoners facing a death sentence in the Federal Prison System. 
Are you confident that the federal death penalty system is being 
administered properly with adequate protections for defendants?
    Answer. Yes. Before a decision is made to seek the death penalty, 
the potential capital case is the subject of extensive Department 
review, which includes the evidence to support a determination of guilt 
and the aggravating and mitigating factors. In addition, federal 
capital defendants have the assistance of highly qualified and 
experienced counsel at trial and all subsequent stages of review.

CHEMICAL SAFETY INFORMATION, SITE SECURITY AND FUELS REGULATORY RELIEF 
                                  ACT

    Question. I have a question about the implementation of the 
Chemical Safety Information, Site Security and Fuels Regulatory Relief 
Act (Public Law 106-40).
    This measure was signed into law on August 5, 1999, after 
significant consultation with the Department of Justice and the 
Environmental Protection Agency. The law requires the Administration to 
prepare within 1 year regulations governing the distribution of off-
site consequence analysis information, collected pursuant to section 
112(r) of the Clean Air Act, or to allow full public access to that 
information under the Freedom of Information Act. We agreed that the 
development of those regulations would be informed by an assessment of 
the increased risk of terrorism due to Internet access to this 
information and by an interim report designed to inform Congress on the 
vulnerability of stationary sources to criminal and terrorist activity.
    The negotiators were assured by Department of Justice and 
Administration representatives that this time line could be followed 
and that the interim site security report would cost approximately 
$200,000-$500,000. Recently, however, I was informed that the necessary 
funds are more accurately $7 million and that those funds are not 
readily available. I am concerned that the interim report produced by 
August 5, 2000 may not fully discuss the site security issues 
identified in the law, and that it may instead be a scoping study for 
the final report due in 2002. Clearly this would be unacceptable. If 
there is a security threat to the nation's chemical facilities, our 
constituents would surely want us to spend no more than one year 
assessing it. I am also concerned that the regulation promulgated under 
the law may be imbalanced and possibly biased against the public's 
right to know, including more severely limiting local access to useful 
information than Congress intended.
    Does the Department agree that its responsibility under the law is 
to produce by August 5, 2000 an interim report with its findings to 
date, rather than merely to produce a scoping study for the final 
report?
    Answer. The Department of Justice agrees that the Chemical Safety 
Information, Site Security and Fuels Regulatory Relief Act (Public Law 
106-40) requires that the Department submit an interim report that 
includes, at a minimum: (a) ``the preliminary findings'' of the 3 year 
report required by section 3(a)(H)(xi)(I) of Public Law 106-40; (b) 
``the methods used to develop the findings,'' and (c) ``an explanation 
of the activities expected to occur that could cause the findings of 
the report . . . to be different than the preliminary findings.'' The 
Department intends to comply with the statute's requirements.
    Question. Exactly how much has been accomplished towards completion 
of the interim report? Has the Department identified funding, through 
reprogramming or other means, necessary to complete the interim report 
by August 5, 2000?
    Answer. The fiscal year 2000 President's budget did not request, 
nor did the fiscal year 2000 Appropriations Act contain, any funding to 
conduct the study upon which the final (3 year) and interim (1 year) 
reports must be based. The Department submitted to the Congress a 
request for reprogramming of $750,000 from the Counterterrorism Fund 
for a contractor to conduct the study. The Senate has objected to this 
proposal as an inappropriate use of the Fund. Accordingly, although the 
Department stands ready and willing to undertake the study, we are not 
able to begin it until a source of funding is identified. The 
Department is continuing its efforts to identify a source of funding 
for this study.
    Question. Has the Department designated a single accountable 
individual who will oversee completion of the interim report by August 
5, 2000?
    Answer. All three of the Department's leadership offices (i.e., the 
Office of the Attorney General, the Office of the Deputy Attorney 
General, and the Office of the Associate Attorney General) are involved 
in oversight of this project. Day-to-day oversight of the contractor 
who will perform the study and will draft the interim report will be 
the responsibility of the National Institute of Justice in the Office 
of Justice Programs.
    Question. At what stage of development is the regulation?
    Answer. The proposed regulation was published in the Federal 
Register on April 27, 2000. A public hearing was held on May 9, 2000, 
and the public comment period will extend until June 8, 2000.

                          SUBCOMMITTEE RECESS

    Senator Gregg. We will be hearing from the Secretary of 
State, Madeleine Albright, on Thursday at 9:30. Thank you very 
much.
    [Whereupon, at 11:41 a.m., Tuesday, February 29, the 
subcommittee was recessed, to reconvene at 9:30 a.m., Thursday, 
March 2.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              


                        THURSDAY, MARCH 2, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:30 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg, Stevens, Domenici, Hollings, 
Lautenberg, and Mikulski.

                          DEPARTMENT OF STATE

                           Secretary of State

STATEMENT OF HON. MADELEINE K. ALBRIGHT, SECRETARY OF 
            STATE
    Senator Gregg. We can begin the hearing. We certainly 
appreciate the fact that the Secretary has joined us today. We 
look forward to hearing her testimony on the State Department 
appropriations.
    I will skip my opening statement.
    Senator Hollings. I will skip mine.
    Senator Gregg. So we will go right to the Secretary.
    Secretary Albright. Good morning, Mr. Chairman, Senator 
Hollings.
    Over the past 7 years I have testified before you many 
times and it has always been a pleasure and I think we have 
managed to get a lot of work done together. In prior years I 
have summarized my written statement in order to allow plenty 
of time for questions but this year, with your permission, I 
will summarize my summary.

                             BUDGET REQUEST

    The President's budget request for fiscal year 2001 is 
essentially for current services, with significant increases 
only for security and U.N. peacekeeping. For State program 
accounts, we are seeking a little under $3.2 billion, primarily 
for Diplomatic and Consular Programs. This reflects our 
successful reorganization and our effort to make effective use 
of limited personnel resources. It will also enable us to 
further upgrade our communications and further improve the 
customer services provided by our Consular Affairs Bureau.
    The President's request for Embassy Security and 
Construction is a little more than $1 billion for the next year 
and $3.5 billion in advanced appropriations through 2005. These 
requests are vital and I urge you to support them.
    One of the most depressing charts I have seen shows our 
foreign building appropriations from 1983 until the present. 
There is a spike at one end to reflect the aftermath of the 
embassy bombings in Beirut and there are spikes at the other 
end reflecting the embassy bombings in Africa and our 
subsequent joint efforts to increase resources, and in between 
it is a virtual flat line.
    Together, we must ensure that such a lull never happens 
again. Fortunately, with the President's leadership and with 
your help, we have substantially accelerated the replacement 
and repair of higher-risk embassies and consulates. We have 
hired new security personnel, enhanced perimeter security, 
instituted an effective new surveillance detection program at 
most of our posts, and taken many other measures. This is good 
but not sufficient.
    As the threats against U.S. interests change, we must 
ensure our ability to meet them. And these challenges include 
not only terrorism but also organized crime, drug cartels, 
money-laundering, cybercrime, and espionage.

                                SECURITY

    In this environment, security must always be a priority and 
we must respond in a comprehensive manner to threats, both old 
and new. To this end, I will explore creating the position of 
Under Secretary of State for Security, Counterterrorism and Law 
Enforcement. In preparation, I am directing our Assistant 
Secretary for Diplomatic Security, David Carpenter, to lead a 
review of the Department's structure for addressing these 
issues and to make recommendations for a more effective 
organization. In so doing, he will consult closely with 
Ambassador Michael Sheehan, our counterterrorism coordinator, 
and other senior officials.
    Our goals, in keeping with the recommendations of the Crowe 
and Kaden panels, are to clarify lines of authority, improve 
coordination, and assure that a single high-ranking officer can 
speak for the Department on security questions.
    Senators, as you know, many of the international problems 
and threats we face require the cooperation of others. One 
means we use to secure such cooperation is through the United 
Nations and other international organizations, and I ask your 
support again this year for our CIO [Contributions to 
International Organizations] account, which pays our share of 
the costs of those organizations in which we participate.

                           U.N. PEACEKEEPING

    And I ask your backing for our fiscal year 2001 and 
emergency supplemental requests for U.N. peacekeeping. As the 
subcommittee knows, U.N. peace operations provide America with 
a vital third option between simply walking away from 
destabilizing conflicts and intervening ourselves. And this 
year we especially need your support for four relatively new 
operations.
    In the Democratic Republic of the Congo, an observer 
mission has been authorized to monitor and assist in 
implementing parts of the Lusaka cease-fire agreement. In 
Sierra Leone, the United Nations is helping to implement a 
peace agreement ending a brutal civil war. In East Timor, the 
United Nations is leading an international effort to maintain 
order, enable refugees to return and prepare the region for 
independence. And in Kosovo, the United Nations is a partner 
with KFOR in laying the groundwork for democracy based on 
increased tolerance and respect for the rule of law.
    Mr. Chairman and members of the subcommittee, I want to 
emphasize how important it is that you support the President's 
supplemental and fiscal year 2001 requests for these and other 
U.N. peace operations. The choice is stark. We can walk away 
from conflicts and suffering in Africa, the Balkans, and East 
Timor or we can do our part to address them. No one is asking 
America to bear the lion's share of the burden in any of these 
places.
    With the subcommittee's help, we have worked hard to make 
U.N. peace operations more efficient and effective and 
Ambassador Holbrooke and I are doing all we can to persuade our 
counterparts to reduce our official assessment for peacekeeping 
missions. For years we have briefed you monthly on every 
development related to these operations and the United States 
has voted for each of them. I will speak plainly. Failure to 
support this necessary funding request would reduce our 
international standing at a critical time. It would diminish 
prospects for peace and democracy in areas that have been 
ravaged by conflict and where people look to us for help. It 
would do grave damage to the instrument of U.N. peacekeeping 
and thereby place even greater pressure on our own armed 
forces. And it would undermine our diplomatic efforts to reduce 
U.S. assessments.
    So I urge you to support the President's request and help 
us to help the United Nations preserve and build peace. That is 
the right vote for our own interests and for the values our 
citizens cherish.
    Before concluding, I want the subcommittee to know that I 
enthusiastically support the bipartisan initiative now under 
way to name the State Department building in honor of former 
Senator and President Harry Truman. This is appropriate because 
the Truman name is synonymous with strong leadership and strong 
leadership is what American foreign policy is all about.

                          PREPARED STATEMENTS

    Mr. Chairman, in the weeks ahead I am sure that we will 
have differences over details, but I very much hope for your 
support and that of every member of the subcommittee for the 
fundamental objectives of our budget request. Thank you. Ready 
for questions.
    [The statements follow:]

              Prepared Statement of Madeleine K. Albright

    Good morning, Mr. Chairman and members of the Subcommittee. I am 
pleased to be here to testify on behalf of President Clinton's fiscal 
year 2001 budget request for the Department of State and related 
programs.
    Let me begin by thanking this Subcommittee for the strong 
bipartisan support we have received from you in years past for our 
operational and security requirements. Because of the terrorist threat, 
ongoing international political ferment, and the demands of new 
technology, meeting these needs is an ever-changing and growing 
challenge.
    I recognize that it may be harder back home to justify the costs of 
a new office building in Tunis or a peacekeeping mission in Kosovo, 
than a new courthouse or weather facility here in the United States. 
But this Subcommittee understands that diplomacy is often our nation's 
first line of defense, and that the personnel in our diplomatic posts 
serve our citizens broadly and well.
    Our Foreign Service, Civil Service, and Foreign Service National 
personnel contribute every day to America--through the dangers they 
help contain; the crimes they help prevent; the deals they help close; 
the rights they help protect; and the travelers they just plain help. 
They have earned our praise. They deserve our support.
    Moreover, our overseas missions host representatives from more than 
30 U.S. Government agencies, including from the Departments of Justice 
and Commerce. These facilities are home to America's team, and should 
be well-designed, modern and secure.
    This year's budget request looks to the future based on lessons 
from the past. It is primarily a current services budget, but includes 
significant increases in security and United Nations peacekeeping which 
I will discuss in detail. And it reflects recommendations contained in 
two recent reports. The first (the Crowe Report) was issued last winter 
by the Accountability Review Boards established after the 1998 Embassy 
bombings in Nairobi and Dar es Salaam, and chaired by Admiral William 
Crowe. The second (the OPAP Report) was released in November by the 
Overseas Presence Advisory Panel, chaired by Mr. Lewis Kaden.
    Three years ago, when I first testified as Secretary of State, I 
said that any framework for American leadership must include measures 
to control the threats posed by nuclear weapons and terror; to seize 
opportunities for settling regional conflicts; to maintain America as 
the hub of an expanding global economy; and to defend cherished 
principles of liberty and law.
    I said further that our key alliances and relationships were at the 
center of that framework. For these are the bonds that hold together 
the entire international system. When we are able to act cooperatively 
with other leading nations, we create a convergence of power and 
purpose that can solve problems and spur progress around the globe.
    This framework will continue to guide our foreign policy in the 
year 2000. Our priorities include an even stronger NATO, with ever more 
robust partnerships, still open to new members, developing new 
capabilities and preparing for new missions.
    We will promote a healthy, open, and growing world economy whose 
benefits are shared more widely both among and within nations, and 
where American genius and productivity receive their due.
    We will work in consultation with Congress, our allies, and others 
to respond effectively to the perils of proliferation and the promise 
of arms control.
    We will focus attention on our complex relationships with Russia 
and China, adhering to core principles, while seeking to advance common 
interests.
    We will strive with our partners to build peace in Kosovo and 
integrate all of Southeast Europe--including Serbia, when the time is 
right--into the continent's democratic mainstream.
    We will act resolutely to support peace in key regions such as the 
Middle East, Central Africa, Northern Ireland and the Aegean.
    We will continue our efforts to enhance stability on the Korean 
Peninsula and to ease tensions in South Asia.
    We will strive for even greater cooperation along our borders with 
Canada and Mexico.
    And we will work to strengthen democratic institutions worldwide, 
including in the four key countries of Colombia, Indonesia, Nigeria and 
Ukraine.
    These and other tasks may seem disparate, but each relates to our 
vision of a secure and prosperous America within an increasingly stable 
and democratic world. And each is supported by accounts that fall 
within the jurisdiction of this Subcommittee.
    Accordingly, I ask that you support the President's budget request 
in its entirety. We need every penny. And I make this request knowing 
that most of the funds I am asking for will be spent next year or 
beyond, under a new Administration. So my urging has nothing to do with 
parties or personalities; but it has everything to do with the success 
of American foreign policy, and the safety and productivity of those 
who serve America in our diplomatic posts at home and abroad.

                             STATE PROGRAMS

Diplomatic and Consular programs
    Overall, the President's fiscal year 2001 budget request for direct 
appropriations for the State Programs accounts is $3.198 billion, 
primarily for Diplomatic and Consular Programs.
    These appropriations, together with various service-related fees, 
support America's diplomatic presence at more than 250 embassies and 
other posts in more than 160 countries. These posts provide the eyes, 
ears and voice for American foreign policy in furthering a panoply of 
U.S. interests. And they serve as our nation's early warning system 
against potential crises and threats.
    Our fiscal year 2001 budget request reflects the successful 
integration of USIA and ACDA into the Department of State. I am 
extremely grateful for the leadership shown and the example set by 
Under Secretary for Management Bonnie Cohen, Senior Adviser for Arms 
Control and International Security Affairs John Holum, and Under 
Secretary for Public Diplomacy and Public Affairs Evelyn Lieberman 
throughout the restructuring process. The result is a U.S. foreign 
policy that is more effective, comprehensive and coordinated.
    At the same time, I must be frank and say that reorganization does 
not--at least in the short term--save money. On the contrary, it 
involves significant administrative costs related to equipment, 
training and the movement of offices and people. Its fundamental 
purpose is to improve the overall quality of service we provide to the 
American people.
    We already see benefits from bringing U.S. foreign policy 
professionals under one roof; integrating arms control, 
nonproliferation and public diplomacy experts into State bureaus; and 
eliminating duplication of effort. In the long run, I am sure we will 
reduce expenditures from what they would have been without 
reorganization.
    Our fiscal year 2001 request for Diplomatic and Consular Programs 
would enable us to continue operations at current levels, with small 
increases for enhanced training and improved compliance monitoring of 
labor and environmental standards. The request for Worldwide Security 
upgrades in this account is $410 million. Of this, $328 million 
reflects recurring costs associated with the security improvements 
initiated after the Africa embassy bombings. The remainder includes $66 
million for perimeter security initiatives and $16 million to hire an 
additional 162 security professionals.
    On personnel, Mr. Chairman, we are holding our own. During the past 
two years, we have been able to hire enough people to replace those who 
left, but not to recover fully from prior reductions. We appreciate the 
new positions related to security that were funded, but still find our 
personnel resources stretched very thin. And we face the challenge of 
recruiting and retaining outstanding talent in an extremely competitive 
job market. This is a serious problem, which is related to our overall 
need to provide adequate levels of compensation, benefits and working 
conditions for our people.
    Training is another area where we are trying to make up for lost 
time. I was dismayed to learn last year that a substantial number of 
our personnel taking assignments abroad were doing so without the 
requisite training. Moreover, crisis management training had been 
reduced to zero in order to save money. Under Secretary Cohen and her 
team are working hard to reverse these trends. In April, a new school 
of Management and Executive Leadership will open. Training is back up. 
And crisis management has resumed.
    Mr. Chairman, as you are aware, our Consular Affairs Bureau 
performs critical services for our mutual constituency, the American 
people. And with your help, we are continuing to improve those 
services.
    In the coming year, we will strive to further upgrade our equipment 
replacement programs, strengthen document integrity, expand public 
outreach, streamline immigrant visa processing, increase interagency 
data sharing as we move towards a more seamless border security 
program, and do even more to ensure the prompt and secure delivery of 
more than seven million U.S. passports.
    As I have pointed out before, the retention of user fees is 
absolutely critical to the success of our efforts. So I thank you again 
for legislation allowing the Department to retain Machine Readable Visa 
fees through fiscal year 2001 and to charge and retain an affidavit of 
support fee.
    I would also like to take this opportunity to urge the Congress to 
extend and even make permanent the nonimmigrant visa waiver program. 
This program has provided all the benefits I believe Congress intended, 
including increased travel, tourism and business. Last year, seventeen 
million foreign nationals from visa waiver countries contributed an 
estimated $91 billion to the U.S. economy.

Capital Investment Fund
    Our request for the Capital Investment Fund for fiscal year 2001 is 
$97 million. This amount, when combined with an estimated $63 million 
in Expedited Passport fees, will support our efforts to continue 
upgrading our information technology and communication systems. I note 
here, Mr. Chairman, that since 1997, the percentage of State Department 
employees with Internet Access has risen sharply, which means that the 
world's premier foreign policy institution is finally getting on the 
right side of the ``digital divide.'' We have also retired the last of 
our outmoded Wang classified systems and generally improved our 
information technology infrastructure.
    Our budget includes $17 million from the Capital Investment Fund to 
develop and deploy inter-agency information platforms at about 45 
overseas posts. This reflects a recommendation from OPAP and will 
create a single unclassified global communications system to serve all 
U.S. agencies with an overseas presence. The Department will set the 
standards for this platform in cooperation with other agencies, but 
each agency will be responsible for funding its own costs associated 
with the platform's use.
    Mr. Chairman, I would like to elaborate a bit on the OPAP report 
and our response to it.
    As you know, last year, I appointed a panel, chaired by Lewis 
Kaden, to review our overseas operations and build on the excellent 
work of Admiral Crowe and the Accountability Review Boards. The OPAP 
included distinguished representatives from the government and private 
sector. Its mission was to recommend criteria for the location, size 
and composition of overseas posts, taking into account factors such as 
our foreign policy goals, and our security and resource needs.
    I am indebted to Chairman Kaden and the members of his Panel for 
their hard work and for their recommendations, of which I know the 
Subcommittee is aware. I particularly welcomed the Panel's stress on 
the urgency of improving our capital plant; the importance of investing 
in human resources; and the indispensable nature of universal 
representation, which is our on-the-ground diplomatic presence around 
the world.
    I also agreed strongly with the Panel's focus on the need to assure 
stronger interagency teamwork under our Chiefs of Mission abroad and 
the President and Department of State here at home.
    At the President's request, I am directing an interagency effort to 
respond to the Panel's recommendations by assessing whether we have the 
right mix of staff at our overseas missions. We are beginning with a 
series of pilot reviews in selected posts to help us develop criteria 
for a comprehensive review. I have been in touch with my Cabinet 
colleagues on this matter, Mr. Chairman, and have urged them to engage 
actively. This project is a major part of our effort to manage 
effectively, further improve security, and produce a better team effort 
in meeting the needs of our citizens in the 21st Century.
    Before moving on, Mr. Chairman, I want to recall my testimony 
before you last year in which I said that the Department of State was 
working hard to prepare for Y2K. That turned out to be an 
understatement. We made a herculean effort. Although unique in one 
sense, Y2K was a dramatic example of the kind of technologically-
related challenge we may face repeatedly in the years ahead. And I 
think it is fair to say that the Department passed with flying colors.
    We had the job of coordinating the activities of all U.S. agencies 
overseas. We established a ``weather vane'' system to detect and try to 
prevent problems in other countries. We ran a successful worldwide test 
using the Internet prior to the event. And we were on full alert to 
respond to crises as the new Millennium dawned.
    Although some may now question whether all the preparations were 
needed, I would much rather respond to those questions than the ones I 
would be facing if we had failed to act and the worst predictions had 
come true. I believe we acted wisely and well, and I appreciate the 
resolute backing we received from this Subcommittee.
    Finally, Mr. Chairman, I want you to know that I enthusiastically 
support the bipartisan initiative now underway to name the main State 
Department building in honor of former President Harry Truman. I hope 
you will agree this honor is richly-deserved. President Truman blazed a 
trail that Administrations of both parties have since followed in 
exercising strong international leadership in defense of freedom, on 
behalf of prosperity, and in service to values of democracy and human 
rights that Americans cherish. His name is synonymous with strong 
leadership. And strong leadership is what American foreign policy is 
all about.

Embassy Security, Construction and Maintenance (ESCM)
    Our fiscal year 2001 request is $1.079 billion. This reflects our 
ongoing need to correct deficiencies and improve security in our 
overseas infrastructure.
    Mr. Chairman, I know you agree that we have a responsibility to do 
all we can to enable personnel in U.S. diplomatic missions to do their 
jobs both professionally and safely. This cannot occur on the cheap.
    One of the most depressing charts I have ever seen shows our 
foreign building appropriations from 1983 until the present. There is a 
spike at one end to reflect the embassy bombings in Beirut and the 
Inman Panel recommendations that followed. There are spikes at the 
other end reflecting the embassy bombings in Africa and the Crowe 
report and our joint efforts to increase resources. In between is a 
virtual flat line.
    Together, we must ensure that such a lull in necessary and prudent 
construction never happens again. Security is an around-the-clock, 
around-the-calendar proposition. It requires more than a short-term 
sense of urgency, but rather long-term habits of vigilance and 
preparation. We need a steady stream of resources and a good, 
comprehensive plan for investing them in the protection of our people.
    Since becoming Secretary of State, I have been constantly concerned 
with the need to protect the security of both the people who work at 
our diplomatic missions, and the classified information we handle in 
America and abroad.
    These have been among our highest priorities, and I believe we have 
made good progress. The 1998 bombings gave added urgency to our 
efforts. And the appointment of David Carpenter, a career law 
enforcement professional, as Assistant Secretary of State for 
Diplomatic Security, has helped us to intensify our security programs 
on every front.
    For example, with the help of this Subcommittee, we have 
substantially accelerated the replacement and repair of higher-risk 
embassies and consulates.
    We have hired new security personnel, whose ranks had been allowed 
to decline in earlier years for budgetary reasons.
    We have developed a global risk management plan, enhanced perimeter 
security, hired more local guards, adopted a rigorous escort policy, 
strengthened computer safeguards, provided thousands of security 
briefings, and instituted an effective new surveillance detection 
program at most of our posts. In addition, I recently asked Assistant 
Secretary Carpenter to perform a top-to-bottom review of the 
Department's security practices.
    Overall, we have made a strong start on implementing the 
recommendations of the Crowe and OPAP Reports, which focus on 
protecting those who work in our diplomatic posts.
    All this is good, but not sufficient. As the threats against U.S. 
interests change, we must ensure that the Department of State has the 
best practices and structures to meet them.
    These challenges include, but are broader, than the risk of a 
terrorist bomb. They include the full range of perils posed by 
international lawlessness, including organized crime, drug cartels, 
state and non-state sponsored terrorism, money laundering, cyber-crime, 
and espionage. Often such threats are linked, as international criminal 
gangs seek to exploit weaknesses by profiting from a combination of 
illicit activities.
    These challenges pose a substantial and increasing foreign policy 
threat. They are part of our bilateral diplomatic agenda with virtually 
every country. They are a major focus of our efforts in regional and 
global institutions. They affect the kind of work we do, the kind of 
equipment we must procure, the kind of procedures we must follow, and 
the kind of facilities we must build. They are a day-to-day 
preoccupation of mine. And they all fall under the general heading of 
security against unconventional threats.
    In this environment, it is not only prudent but essential to make 
security considerations a part of everything we do, and to deal with 
old and new threats in a more comprehensive way.
    Accordingly, I will explore creating the position of Under 
Secretary of State for Security, Counterterrorism and Law Enforcement. 
In preparation, I am directing Assistant Secretary Carpenter to lead a 
review of the Department's structure for addressing these issues and to 
make recommendations for a more effective organization. In so doing, he 
will consult closely with Mike Sheehan, our Counterterrorism 
Coordinator, and other senior officials.
    Our goal is to find the most effective way to meet the 
recommendations of the Crowe and Kaden panels that the Department 
clarify responsibilities, encourage better coordination and assure that 
a single high-ranking officer is accountable and can speak for the 
Department on security questions.
    In addition, the President is requesting $647.6 million to support 
the third year of our multi-year effort to construct secure diplomatic 
facilities. This request includes $500 million to continue our program 
of relocating posts, where necessary. These funds provide for the 
design or construction of facilities in Capetown, Damascus, Rio de 
Janeiro, Sofia and Yerevan. It will also support construction of new 
on-compound facilities for USAID in Kampala and Nairobi. Further, the 
request includes $134 million to upgrade perimeter security at other 
highly vulnerable posts.
    I will be frank, Mr. Chairman, and say that the cost of some of our 
larger projects can produce a bit of ``sticker shock.'' However, I am 
assured that the costs are justified given security demands related 
both to the kind and locations of buildings we need; the required use 
of American contractors; and our desire to build facilities that can 
support full inter-agency teams. This Subcommittee has been very 
supportive of building requests in the past. And we would, of course, 
be happy to brief you in detail on the specifics of the projects 
included in our budget for next year.
    The President is also requesting $3.35 billion in advanced 
appropriations for the years 2002-2005 to ensure a sustained multi-year 
construction program for secure new embassies and consulates. I ask 
your support for these essential requests.
    Members of the Subcommittee, given our concerns about security, it 
would be easy to overlook the non-security related infrastructure needs 
that are addressed in the fiscal year 2001 request. For example, we 
still require resources for ongoing maintenance of our facilities and 
decent housing for our colleagues overseas.
    Some of these needs can be met by the sale of existing property. 
But most cannot. This year's request reflects sound planning to match 
our most immediate needs with available resources.

Educational and Cultural Exchange Programs
    Mr. Chairman, public diplomacy advances U.S. interests by helping 
others to understand our society, culture and values.
    It can also be a very practical tool for influencing events. During 
the conflict in Kosovo, for example, our Internet Assistance Initiative 
helped us to manage data generated by the massive humanitarian effort, 
while also aiding refugees in locating loved ones who had become 
separated. More recently, we used public diplomacy to warn against a 
breakdown of the constitutional order in Ecuador.
    Since USIA merged with the Department last October, we have 
benefitted greatly from the unique skills and perspective its employees 
have brought to our foreign policy.
    In fiscal year 2001, the President is requesting $225 million for a 
key component of our public diplomacy, which is our international 
exchange activities, including the world-renowned J. William Fulbright 
Educational Exchange Program.
    This request also includes funding for the State Department's 
International Visitors Program, which has been remarkably successful at 
identifying world leaders early in their careers.
    For example, Korean President Kim Dae-jung visited in 1965 as an 
opposition parliamentarian, and has often commented on the strong, 
positive impression he formed of our country during that time. And in 
1986, a young British Parliamentarian named Anthony Blair viewed a job 
training program in West Virginia, visited a family farm in Kansas and 
studied state politics in Colorado and California.
    Other past participants in the program include Chancellor Schroeder 
of Germany, Prime Minister Jospin of France, President Kuchma of 
Ukraine, President Demirel of Turkey, President Narayanan of India, 
President Abdurrahman Wahid of Indonesia, President de la Rua of 
Argentina, Prime Minister Mocumbi of Mozambique, and both President 
Sampaio and Prime Minister Guterras of Portugal. All told, more than 
three dozen current heads of state or government are former 
participants in the International Visitors Program.

              LEADING THROUGH INTERNATIONAL ORGANIZATIONS

Contributions to International Organizations (CIO)
    Mr. Chairman, one of the realities of the modern era is that many 
of the international problems and threats we face as a nation simply 
cannot be dealt with effectively through our actions and policies 
alone. Quite often, we will need the help and cooperation of others.
    This reality was recognized more than half a century ago when our 
predecessors led in creating the United Nations and a variety of other 
international organizations in which our country now participates. Not 
all of these organizations have been as well-managed or effective as we 
would like. In a few cases, we have even withdrawn from active 
membership. But in most cases, our participation has served our 
national interests and those of our citizens.
    The CIO account provides the funds we need to meet our assessments 
to these international organizations, consistent with U.S. statutory 
restrictions. The President's request for the coming fiscal year is 
$946 million.
    In 2001, for the first time in years, we are not requesting U.N. 
arrearage payments for either the CIO or peacekeeping accounts. This 
reflects the prior appropriation of funds sufficient to fulfill the 
terms of legislation authorizing arrearage payments tied to certain 
additional U.N. reforms and changes.
    With the Department's strong support, Ambassador Holbrooke and 
Assistant Secretary Welch are working to gain support within the U.N. 
and among its members for the reforms required. It is encouraging that 
one of the conditions for releasing funds was met during the recent 
General Assembly session, when the U.S. candidate for the U.N.'s budget 
oversight panel was elected.
    As I have said in previous years, I appreciate the Subcommittee's 
support for an effective and well-managed United Nations, in which the 
United States is both leading the way and meeting its obligations. We 
have not yet fully put that combination together, but we continue to 
move in the right direction.
    The CIO account funds U.S. participation in forty-seven 
international organizations, including the U.N. These organizations 
contribute in a multitude of ways to our safety and quality of life.
    For example, in the U.N. itself, we have a security stake in the 
multilateral sanctions that help to contain and restrict Iraq's 
military options. We have a political interest in U.N. efforts to 
encourage the peaceful resolution of disputes in strategic areas such 
as the Aegean. We have a legal and moral interest in seeing that those 
who committed crimes against humanity in Rwanda and the Balkans are 
brought before the U.N. war crimes tribunal. We have a humanitarian 
interest in U.N. programs that save children, fight disease, promote 
human rights and care for refugees.
    The U.N.'s many sister organizations perform vital functions, as 
well. The International Atomic Energy Agency (IAEA) helps protect 
Americans from the dangers of nuclear proliferation.
    The World Health Organization (WHO) helps study, contain and 
prevent disease and health problems, keeping our own and other 
societies more secure. For example, WHO works with USAID to slow the 
spread of HIV/AIDS, which is causing incalculable human suffering and 
creating new obstacles to development in many countries, especially in 
Africa and South Asia.
    The Food and Agriculture Organization makes trade in agricultural 
products safer and more predictable, while its disease control programs 
protect American agriculture from massive potential losses.
    The International Labor Organization promotes respect for human 
rights and core labor standards all over the world. It is a crucial 
partner in America's effort to ensure that global trade is fair as well 
as free.
    In addition, this account funds our assessments to numerous other 
institutions, such as the North Atlantic Treaty Organization and the 
Organization of American States, which contribute to America's 
leadership and interests in key regions of the world.

International Peacekeeping Activities (CIPA)
    I also ask your support for the President's request for $738.7 
million for the CIPA Account. This is a substantial, but not 
unanticipated, increase over the current year. I can think of no other 
area of foreign policy in which our consultations are as regular and 
detailed.
    We have also learned by experience, Mr. Chairman that, by its very 
nature, fluctuations in this account will occur as peace operations 
begin, expand, build down and complete their work. This lack of 
predictability can be frustrating to budget planners, but there is 
simply no way to freeze demand for international peacekeeping, no 
responsible way to set an artificial ceiling on our financial 
contributions, and no appropriate alternative to judging our interest 
in such operations on a case by case basis.
    The funding level we are requesting for fiscal year 2001, coupled 
with our supplemental and reprogramming requests for 2000, reflect a 
level of U.N. peacekeeping activity higher than that of the most recent 
years, but far below the numbers we saw earlier in the last decade. The 
current level of just over 14,000 U.N. peacekeepers (excluding civilian 
police) compares to more than 78,000 in 1993. Next year's requested 
appropriation for CIPA compares to more than $1 billion in each of 
fiscal years 1994 and 1995.
    The record of U.N. peacekeeping is mixed. Successes in countries 
such as Namibia, El Salvador and Mozambique must be weighed against 
failures in Somalia and Rwanda. But both the United Nations and the 
United States have learned a lot during the past decade about how to 
plan, organize and manage such operations. At our insistence, the 
Security Council now exercises far greater care in authorizing 
missions, defining mandates, selecting commanders and recruiting 
troops.
    Of course, the United States does not look to U.N. peacekeeping to 
defend its vital interests, nor can we expect the U.N. to be effective 
where the decisive application of military force is required. But the 
rationale for supporting well-conceived and designed U.N. peace 
missions is compelling.
    Under the right circumstances, U.N. peacekeeping can separate 
adversaries, maintain ceasefires, enable refugees to return home, and 
create conditions under which political reconciliation may occur.
    This provides America with a vital third option between simply 
walking away from destructive and destabilizing conflicts, and 
intervening ourselves. U.N. peacekeeping enables us to influence events 
without assuming the full burden of costs and risks. It lends the 
weight of law and world opinion to causes and principles we support. 
And the more able the U.N. is to end or contain conflict, the less 
likely it is that we will have to deploy our armed forces. Currently, 
only one out of every forty U.N. military observers is an American, and 
none of the U.N. troops.
    Our CIPA request includes funds to pay our assessments for 14 U.N. 
peace operations. The majority of these are not new and are either 
level or declining in size. I would like to focus my testimony on four 
recently-initiated operations.
    The first is in the Democratic Republic of the Congo (DRC). Last 
week, the Security Council voted to approve a mission consisting of 500 
military observers and a protection and support force of about 5,000 
troops. These observers will monitor implementation of the Lusaka 
Ceasefire Agreement, assist with the disengagement of troops at certain 
locations, and help the newly-created Joint Military Commission develop 
mechanisms for further implementing the Agreement.
    The Security Council continues to insist, with our support, that 
the deployment of this force depends on the willingness of the parties 
to cooperate with it, respect its security and grant it access. It is 
encouraging that the leaders of all the nations involved in the 
conflict have welcomed the Security Council decision, and pledged their 
cooperation.
    I have described the conflict in the DRC as Africa's first world 
war. It now involves six countries and Congolese and Rwandan armed 
rebel groups. To date, compliance with the Lusaka Agreement has been 
inconsistent. And success of the U.N. peace operation is uncertain. But 
the purpose of the mission is the right one, which is to create a 
reliable monitoring mechanism so the parties can begin to overcome 
their mistrust of one another. Deployment of additional observers would 
also remove any excuse for the regime in Kinshasa not to cooperate with 
a National Dialogue aimed at resolving the DRC's internal conflicts.
    The DRC is a large country, with vast natural resources, and a 
strategic location within the heart of Africa. Without U.N. help, it 
faces the prospect of a prolonged and many-sided war that could spur a 
humanitarian disaster and possibly renewed campaigns of genocide.
    No one is asking America to solve the conflict or intervene to end 
it. The expanded U.N. mission will not even include U.S. troops. But we 
are being asked to do our part in supporting the framework for peace 
embodied in the Lusaka agreement. The cost is significant. But it is 
far less costly--in blood, treasure and to our interests--than allowing 
this war to drag on and on.
    The second operation I would like to discuss is in Sierra Leone. 
Here, the U.N. is assisting in the implementation of last July's Lome' 
Agreement to end a brutal civil war. Stability in Sierra Leone would 
contribute greatly to West Africa's social and economic prospects. But 
stability will not be possible without security, which continues to be 
threatened by rebels who have not yet fully demobilized or disarmed.
    Recent problems encountered by U.N. peacekeepers in Sierra Leone 
should not obscure the progress that has been made. The overall 
ceasefire between the Revolutionary United Front and the government has 
held. More than 11,000 combatants--a quarter of the estimated total--
have begun the disarmament process. Humanitarian groups are providing 
assistance in some areas, and we are pressing the rebels to allow these 
groups greater access to the interior. In Sierra Leone, as in the DRC, 
the U.N. recognizes it cannot impose peace. The parties must meet their 
obligations.
    Last October, I went to Sierra Leone where I met at the Murray Town 
Amputee Camp with some of the victims of the war. I was surrounded by 
women, men and mostly children, who had lost hands, arms, feet or legs 
to machetes. These are not scars that heal. And the people in the camp 
are the lucky ones, for they have survived and are receiving at least 
rudimentary care. Mr. Chairman and members of the Committee, I know if 
you had been there you would not even have to ask whether America has 
an interest in preventing more vicious fighting in Sierra Leone.
    A third U.N. mission I ask you to support is in East Timor. This is 
a region where peacekeeping lessons from the past have been applied and 
responsibilities appropriately shared. Last August, a multinational 
force led by Australia and Thailand restored order after pro-
integrationist forces reacted with violence to the passage of a 
referendum for independence. The U.N. Transition Administration was 
then assigned responsibility for overseeing recovery and working with 
the East Timorese to prepare for their new status.
    The United States has a strong political and diplomatic interest in 
seeing East Timor evolve into a viable and democratic nation. We also 
have a humanitarian interest in seeing that refugees are able to return 
safely, the missing are accounted for, and security is maintained.
    Last but not least, I urge your continued support for the U.N. 
mission in Kosovo, a mission performing an extraordinarily difficult 
but essential task. Here again, lessons from the past are being 
applied. The military heavy lifting is being handled not by the U.N., 
but rather by the NATO-led KFOR troops. The job of the U.N. mission is 
to oversee civilian administration until the people of Kosovo are able 
to assume that responsibility themselves.
    From the outset of the conflict in Kosovo last March, our goal has 
been to enable the people of this region to live peacefully, 
democratically, and without ethnic strife. A beginning has been made, 
but the legacy of authoritarianism and repression cannot be erased 
overnight.
    Further progress in Kosovo is an essential part of our overall 
strategy, in partnership with our allies, to encourage the integration 
of Southeast Europe into the continent's democratic mainstream. Nothing 
would do more than success in this effort to enhance the future 
stability of Europe, and to reduce the likelihood that American forces 
may one day again be required to face combat in this region.
    In summary, Mr. Chairman, I ask your support for our full fiscal 
year 2001 request for CIPA. I know it is tempting to try to attach more 
and more conditions to this account. But I must tell you that 
withholdings, delays, and refusals to pay for particular operations 
have a significant cumulative impact on our ability in New York to 
influence the shape and scope of these operations. Moreover, it is 
certainly not helpful to Ambassador Holbrooke in his efforts to 
persuade other countries to reduce our share of U.N. peacekeeping 
assessments to 25 percent if we are not even paying the 25 percent we 
acknowledge as our share.
    I believe this Subcommittee deserves a great deal of credit for the 
improvements in the way U.N. peacekeeping decisions are made, and 
operations planned. So I hope you can now support the important and 
improved U.N. peacekeeping program you helped to shape.

                 FISCAL YEAR 2000 SUPPLEMENTAL REQUESTS

    In addition to our fiscal year 2001 request, the President is 
seeking $624.5 million in supplemental appropriations this year to 
promote peace and stability primarily in Kosovo and Southeast Europe. 
Of this, $373.6 million is from this Subcommittee's accounts.
    The request includes $239 million from the ESCM account to fund 
secure facility and other construction in Pristina, Sarajevo and 
Tirana, and to meet other security-related construction needs.
    It includes $24 million for enhanced diplomatic, public diplomacy 
and security activity related to Kosovo and the surrounding region.
    It includes $107 million to pay additional assessments for U.N. 
peacekeeping operations, particularly in Kosovo and East Timor.
    And it includes $3.6 million to establish a Fulbright program in 
Kosovo and to expand exchanges in regional and frontline states.
    The substantive justification for most of these funds has been 
discussed above with reference to the fiscal year 2001 budget, and I 
will not repeat it here. I will stress, however, how important it is 
that these supplemental funds be approved.
    We have made it clear to our allies and partners in Europe that 
they must bear the lion's share of assistance to Kosovo and efforts to 
integrate Southeast Europe. They have agreed and have pledged far more 
than the United States has towards these goals. But stability in the 
Balkans is one of the key objectives of U.S. foreign policy at this 
point in history. We believe it is critical to realizing our vision of 
a democratic and stable Europe, where wars simply do not happen.
    Our presence in the region, in facilities that are adequate, 
accessible and secure, is indispensable if our goals are to be 
achieved. At the same time, we must meet our obligations to the U.N. 
peace missions both in Kosovo and East Timor.
    I hope we will have your support for these necessary supplemental 
funding requests.

                           CONCLUSION

    Mr. Chairman, the annual budget debate in Washington typically 
revolves around issues that relate to the appropriate role of the 
federal--as opposed to state and local--governments in such areas as 
education and health care. But since the days of Thomas Jefferson, the 
conduct of diplomacy and the protection of our national security have 
been among the Federal Government's most basic tasks.
    These are Constitutional responsibilities that simply cannot be 
delegated or privatized. It is our job, here in our nation's capital, 
to formulate plans for protecting American interests, and to come up 
with the resources to make those plans work.
    There is no question that it costs money to counter modern 
terrorists; calm regional disputes; promote America's economic 
interests; protect U.S. citizens; and spread the gospel of freedom. But 
these costs do not begin to compare to the ones we would incur if we 
stood aside while conflicts raged, terrorists struck, financial 
turbulence reigned, democracies unraveled and weapons of mass 
destruction spread unhindered around the globe.
    In the weeks and months ahead, I am sure that we will have 
differences over details. But I very much hope that we will have the 
support of every member of the Subcommittee for the fundamental 
objectives of this budget request.
    I know that you will act with America's best interests in mind. I 
feel confident that when you do, you will bear in mind both the many 
challenges in our future and the best bipartisan traditions of our 
past. And I look forward to working with you to carry the best of those 
traditions into the century ahead.
    Thank you.
                                ------                                

    Prepared Statement of Jacquelyn L. Williams-Bridgers, Inspector 
                General, Office of the Inspector General

    Mr. Chairman and Members of the Subcommittee: Thank you for 
providing me with this opportunity to submit a statement for the record 
on the fiscal year 2001 budget request of $29,502,000, for the Office 
of Inspector General (OIG). This request funds the activities of the 
OIG to include audits, investigations, and inspections of worldwide 
operations and programs of the Department of State (Department) and 
international broadcasting under the Broadcasting Board of Governors 
(BBG). I am pleased to discuss the work of my office in the context of 
OIG's strategic plan.
    I have also included with this statement a consolidated list of our 
reports and memoranda for work in fiscal year 1999. These products are 
listed under each of our four strategic goals and located in an 
appendix to this document.

                               OIG BUDGET

    The Office of the Inspector General's fiscal year 2001 budget 
request is $29,502,000, an increase of 7.7 percent over our fiscal year 
2000 enacted level of $27,382,000. This is a modest request that seeks 
funding for inflationary increases and for 10 security positions 
authorized and funded in the fiscal year 1999 Emergency Supplemental 
Appropriation, but for which funding was not included in our fiscal 
year 2000 appropriation. Our fiscal year 2001 request is only 3.5 
percent above our fiscal year 1999 enacted level, which included the 
funding for these 10 security positions.
    The major challenge facing OIG is the erosion of our funding base 
and the elimination of our fiscal year 1999 Emergency Supplemental 
Appropriation funding. The lack of adequate budgetary resources 
jeopardizes our ability to oversee and monitor the Department's use of 
over $2 billion in security funds appropriated over the past two years.
    My office has been virtually straightlined since fiscal year 1996. 
With the exception of the fiscal year 1999 Emergency Supplemental 
Appropriation funding, OIG has not received an increase to its annual 
appropriation since that time. Over the last 5 years we have absorbed 
the cost of all inflationary increases, as well as the cost of 
mandatory requirements such as Law Enforcement Assistance Pay and Chief 
Financial Officer Act audits. This has resulted in a delay or 
suspension of planned work.
    The effective erosion of our budget base could have costly 
consequences. During fiscal year 1999 OIG received $1 million in 
supplemental funding for oversight of the Department's nearly $1.5 
billion security supplemental. The Department also received an 
additional $742 million in fiscal year 2000 for more construction and 
security enhancements. While some of the Department's security 
supplemental funding will be spent over the next 5 to 8 years as new 
embassies are designed and built, less than $170,000 of OIG's 
supplemental funding remains and this will be fully expended by the end 
of fiscal year 2000. The Department is moving ahead with planning, and 
being encouraged by the Congress, to increase new embassy construction 
from two to three new chanceries at any given time to more than 30. 
Such a significant investment of the Department's resources should be 
monitored and overseen by OIG. The loss of our security supplemental 
funds, however, will make it extremely difficult for us to oversee 
adequately the expenditure of the Department's security funds.
    The $1 million we received in the fiscal year 1999 Emergency 
Supplemental Appropriation, although insignificant compared to the 
amounts appropriated for the Department, allowed OIG to expand 
substantially its program of security oversight inspections and audits. 
With these funds we were able to recruit and hire 10 senior security 
specialists and establish a new Security Enhancements Oversight 
Division to evaluate security in interim facilities and the 
construction of new embassies overseas. With other personnel funded by 
the security supplemental, we established an inspection team to conduct 
limited-scope security inspections in conjunction with our regular post 
management inspection. These inspections have identified numerous 
security vulnerabilities that would not have been identified without 
the addition of security specialists to the inspection teams.
    In addition to security inspections, we refocused OIG assets to 
conduct five audits involving the Department's tracking and use of 
security supplemental funds. Audits are in progress on two of the 
Department's highest priority security enhancement programs--the 
overseas wireless program and the surveillance detection program--which 
consume approximately $220 million of the security supplemental. 
However, fiscal year 2000 funding constraints have forced us to curtail 
and postpone some needed work.
    While the increased emphasis on physical security oversight 
commanded considerable OIG resources during fiscal year 1999, OIG also 
continued oversight work in other threat areas. We conducted broad 
fieldwork on counterintelligence awareness to identify continuing 
vulnerabilities with Foreign Service national (FSN) employee access to 
unclassified information and telecommunications systems. OIG also 
completed a comprehensive review of the Department's handling of 
classified information, an audit that raised alarms about the potential 
threats from unescorted foreign visitors to the Department well before 
the discovery of a Russian monitoring device in a seventh-floor 
conference room.
    I strongly believe that the United States Government has received 
considerable benefits resulting from the initiatives we began with the 
$1 million in security funds appropriated to OIG in fiscal year 1999. 
We will continue those initiatives in fiscal year 2000, but the lack of 
continued funding for at least the new positions funded initially with 
emergency supplemental funds has forced hard choices and has impacted 
our ability to sustain the expanded security oversight established in 
fiscal year 1999.
    We have already made hard choices in fiscal year 2000. We have 
instituted a hiring freeze and have cut back significantly on training 
and travel for our staff. We have reduced the size and number of our 
post management inspection teams, and five posts have been eliminated 
from our upcoming inspection schedule. Travel for our compliance staff 
has been curtailed, and our inspectors cut short their inspections 
during the fall inspection cycle.
    We have reduced our security audit staff, which increases the 
amount of time required to complete and limits the scope of our 
security audits. We have reduced our intelligence oversight staff, 
which limits the number of post inspections that we can support and 
limits the scope and increases the amount of time needed to conduct 
sensitive intelligence audits.
    We have deferred or cut back on the scope of some audits with high 
potential cost savings for the Department. For example, we have 
deferred reviews of the Department's overseas financial management 
system, contracting for local guard services, and the overseas purchase 
card program. We have scaled back our plans to review the FSN payroll 
system. We will be forced to cut back on our oversight program for 
Federal assistance to nongovernmental organizations (NGOs); an area 
with a long history of large amounts of questioned costs. During fiscal 
year 1999, OIG issued seven reports with questioned costs of 
approximately $9 million. We believe that, with adequate funding we 
could save the government as much as $30 million. Unfortunately, we 
cannot devote the necessary resources to this area.
    As the Department's Inspector General, I recognize the need for 
prudent government spending. Five years of what is effectively a 
straightlined budget base, however, makes it difficult for OIG to 
effectively carry out our mandated requirements. I ask that you provide 
us the modest increases included in our fiscal year 2001 budget 
request.
                 IMPROVED CONDUCT OF FOREIGN RELATIONS

    Taken as a whole, OIG activities provide a broad overview of the 
Department's effectiveness in implementation of foreign policy and use 
of the full range of diplomatic and public diplomacy tools including 
international broadcasting. Through the inspections of overseas 
missions and domestic bureaus and in-depth audits of selected issues, 
we assessed the conduct of foreign relations, particularly the skills 
and capabilities of senior management and the availability and use of 
appropriate structures, authorities, and processes. Examples of OIG 
work in this area include inspections of Embassy London and Embassy 
Dublin and reviews of Radio Marti broadcast content, the Border 
Biometrics program, and intelligence oversight.
    In the coming year, OIG will inspect and audit the effectiveness of 
policy and program formulation and implementation; intelligence 
reporting and oversight; results monitoring and assessment; and, 
mission leadership and management.

Post Management Inspections
    OIG assesses the implementation of U.S. foreign policy and the 
diplomatic readiness of Department elements through management 
inspections of all overseas posts and domestic bureaus and offices. 
Such inspections address all aspects of post operations including 
bilateral relations, executive direction and management, the conduct of 
public diplomacy, consular operations, diplomatic readiness, 
administrative support, and management controls. Additionally, our 
embassies are in a unique position as a global platform to address 
emerging public diplomacy issues. The inspections of Embassy London and 
Embassy Dublin are two such examples.
    Embassy London.--Embassy London represents a unique platform for 
projecting U.S. views to European and other regional and global 
audiences. Much is already being made of these possibilities, 
particularly in the economic and commercial sectors. More can be done, 
however, to address the emerging global agenda including environmental, 
science and technology concerns. To be effective in this role, however, 
the Department must devote greater attention to the qualifications of 
those assigned to key positions at the Embassy. Multifunctional and 
public diplomacy skill, familiarity with global issues, and experience 
in multilateral diplomacy, including NATO and the European Union, must 
be given greater weight in the assignment process.
    Embassy Dublin.--Support for the peace process in Northern Ireland 
remains the predominant U.S. concern in Ireland. The U.S. presence in 
Ireland should both reflect the importance the United States attaches 
to the relationship and be tailored to the tasks that need to be 
performed to promote the relationship the United States seeks with the 
Republic beyond the peace process. Embassy Dublin is not now prepared--
nor are preparations being made--to assume the much broader 
responsibilities associated with the future bilateral agenda. To this 
end, Embassy Dublin should conduct a missionwide review of the 
resources needed to advance U.S. interests in Ireland in the post-peace 
process era. USIS Ireland does not, however, have the resources to 
carry out its public diplomacy role effectively. Core public diplomacy 
functions are not being performed; outreach tends to be ad hoc, is not 
guided by a functioning distribution and records system, and is not 
coordinated missionwide. Without additional resources, opportunities 
will continue to be lost.

Radio Marti Broadcast Content
    Last year we reported on our examination of internal review 
practices and external oversight procedures to ensure that Radio Marti 
adheres to the Voice of America (VOA) charter, the U.S. International 
Broadcasting Act of 1994, and journalistic standards. As part of this 
review, the BBG, in consultation with OIG, contracted for a panel of 
independent journalists to evaluate a sample of 1998 Radio Marti 
broadcasts, to assess whether they adhered to VOA broadcast standards. 
The independent panelists identified problems with balance, fairness, 
objectivity, and adequate sourcing that impacted the credibility of the 
programs they reviewed particularly the live broadcasts. The panelists 
also identified problems affecting the professionalism of the 
broadcasts including packaging (e.g., intermingling news and opinion), 
presenting news stories in a confusing manner, and using poor judgment 
in the selection of stories. The independent panelists largely confined 
their comments to journalistic values and did not address the question 
of whether Radio Marti broadcasts are ``consistent with the broad 
foreign policy objectives of the United States.'' OIG recommended that 
the BBG establish policies and procedures so that future evaluations 
can assess whether the foreign policy requirements of U.S. 
international broadcasting are being met.
    This year, we can report that, in response to our recommendations, 
the BBG and the International Broadcasting Bureau (IBB) required the 
Director of the Office of Cuba Broadcasting, to set forth a specific 
plan of action to ensure that Radio Marti broadcasts meet commonly 
accepted standards of journalism and the specific requirements set 
forth in the VOA charter. For example, IBB proposed to establish a 
training program, fund focus groups to determine public response to 
programming, and plans to conduct semi-annual program reviews of Radio 
Marti. In addition, BBG's fiscal year 2000 appropriation requires it to 
submit to Congress a report on how it will respond to OIG's 
recommendations on Radio Marti by March 31, 2000. OIG is currently 
reviewing BBG's draft report and will continue to monitor compliance 
with our recommendations.

Border Biometrics Program
    Border security continues to be a key national interest goal and 
strategic foreign policy objective for the Department. As we reported 
last year, the border crossing card (BCC) is designed to be used in 
lieu of a passport and visa by Mexican nationals who travel frequently 
across the Mexican border into the United States. Over the years, the 
BCC became susceptible to counterfeiting and alteration. The Illegal 
Immigration Reform and Immigrant Responsibility Act of 1996 required 
that a biometric identifier (such as a fingerprint or handprint) be 
incorporated into any border crossing identification card. The 
Department of State and the Department of Justice, Immigration and 
Naturalization Service (INS), are working to implement the Border 
Biometrics Program, also known as the Laser Visa Program, by September 
2001.
    Our inspection of the BCC program (ISP/I-99-12) revealed many 
problems that jeopardize the timely implementation of the program and 
compromise its intent to enhance border security. While the Department 
has complied with the majority of the 13 recommendations resulting from 
that report, there are two that require assistance from Congress before 
they can be implemented. The first involves the need for supplemental 
laser visa card production by the Department. Currently, all cards are 
produced by INS facilities, which are not able to produce sufficient 
quantities required by statute. It is my understanding that the 
Department is seeking approval to fund a pilot project to produce the 
cards in Mexico City.
    The second unresolved recommendation from this inspection relates 
to the urgent need to expand and upgrade the criminal record databases 
used to adjudicate laser visas. We determined, in conjunction with our 
inspection of the BCC program, that the INS Automated Fingerprint 
Identification System (IDENT) database being used to process laser visa 
applications is of minimal value. We understand that the Department of 
Justice subsequently came to the same conclusion and now plans to phase 
out the IDENT system by merging it into the much larger Federal Bureau 
of Investigation (FBI) fingerprint database. Creating an electronic 
abstract, i.e., foreign nationals only, from this huge database for 
transfer to computer systems compatible with those being used by INS 
and the Department will be a massive undertaking. Current estimates, we 
understand, are that it will take 3 to 5 years and cost the Department 
of Justice as much as $400 million. This new, expanded biometric 
database would make it possible to begin implementing plans for issuing 
a new generation of biometric-based, smart card type nonimmigrant visas 
at all consulates abroad.

Intelligence and Law Enforcement Oversight
    Strengthening chief of mission authority over expanding embassy 
programs has been a key objective under the OIG's strategic goal. The 
importance of this OIG objective is also reflected in the number of 
recommendations to enhance ambassadorial authority made by the Overseas 
Advisory Presence Panel in November 1999. OIG's Intelligence Oversight 
Division has concentrated its efforts on improving chief of mission 
oversight and coordination of intelligence and law enforcement 
activities. In Washington, the OIG has worked closely with both State 
Department's Bureau of Intelligence and Research (INR) and members of 
the intelligence community to ensure that new ambassadors as well as 
deputy chiefs of mission are well trained in their oversight and 
coordination responsibilities. In response to OIG recommendations made 
in an earlier review of the bureau's coordination functions, INR 
significantly improved its new ambassadors' orientation program. In 
addition, INR, with strong OIG endorsement, published a handbook for 
ambassadors detailing their full responsibilities for intelligence and 
law enforcement oversight along with well-considered guidance on how to 
exercise these responsibilities.
    Our oversight reviews conducted over the past year showed that 
chiefs of mission are well versed in their responsibilities and that 
overall coordination of activities was working well. OIG made 
recommendations on how to strengthen oversight and at two missions we 
recommended that the Department clarify responsibilities where 
jurisdictions apparently overlapped. At two embassies, our 
recommendations established unambiguous chief of mission 
responsibilities for organizations that had questioned chief of mission 
oversight authority. OIG has also commended missions where the chief of 
mission's personal engagement has contributed to such coordination and 
we have promoted their activities as ``best practices.'' OIG has also 
continued its close working relationships with other Inspectors General 
working jointly on such issues.
    With the significant expansion abroad of Federal law enforcement 
activities, OIG has broadened its review of chief of mission oversight 
of law enforcement and incorporated a detailed study of these 
responsibilities in each post management inspections. While chiefs of 
mission are generally discharging their responsibilities well, some 
were less well prepared for law enforcement oversight than they were 
for intelligence oversight. OIG reviews have also revealed the need for 
law enforcement officials assigned abroad to be better trained in their 
responsibilities to the chief of mission as established in the November 
1996 memorandum of understanding between the Secretary of State and the 
Attorney General and Secretary of Treasury. We have been especially 
concerned with improving coordination of law enforcement activities at 
missions where the law enforcement official is not a resident. Two 
recent oversight reports found uncoordinated law enforcement visits had 
complicated bilateral relations and jeopardized other liaison contacts. 
The ongoing implementation of our recommendations has shown that law 
enforcement objectives can be met without jeopardizing other national 
interests.
    Details of our 19 fiscal year 1999 reviews in this area are 
summarized in OIG classified semiannual reports.

BETTER ALIGNMENT OF FISCAL AND HUMAN RESOURCES WITH U.S. FOREIGN POLICY 
                               PRIORITIES

    OIG activities supporting this strategic goal focus on the 
Department's budget and human resource allocation processes, the 
mission and bureau performance plan process, and verification and 
validation of Department performance measures. These activities draw on 
reviews of performance plans conducted in the course of inspections of 
overseas missions and domestic bureaus of the Department. In addition, 
OIG auditors include verification and validation of relevant 
performance measures in the scope of selected audits.
    In 1999, OIG work in this area has included assessments of issues 
resulting from the consolidation of the Department of State, length of 
overseas tours of duty, training and career development, staffing for 
overseas security initiatives, and continued oversight of the 
Departments' implementation of the Results Act.

Department of State Consolidation
    OIG has yet to observe any significant cost reductions or 
avoidances as a result of consolidation. Such savings may lie in the 
future, as employee attrition permits a more rational distribution of 
resources, and as economies of scale (such as may result from 
consolidated information management systems) become realities.
    OIG inspections conducted during the first quarter of fiscal year 
2000 found that it is too soon to reach definitive conclusions about 
the impact of the consolidation of the United States Information Agency 
(USIA) with the Department of State. We have observed no significant 
negative impact upon the public affairs activities at our missions 
abroad. In most cases, public diplomacy already was well integrated 
with other elements of foreign policy implementation.
    From an administrative perspective, the planning for consolidation 
was a good investment, and resulted in a smoother transition than would 
have been possible otherwise. Nevertheless, many posts were not well 
informed on matters affecting former public affairs officers (PAO). For 
example, there have been instances of confusion regarding whether 
former PAO's should retain some of the support provided previously as 
heads of agency, such as dedicated vehicles, etc. At some posts, there 
have been morale problems among FSN employees who have been moved to 
different, sometimes lower graded, positions despite ``save pay'' 
provisions. In some cases these employees believe they were not fully 
and accurately informed as to the changes in their positions resulting 
from consolidation.
    Also, we have observed exceptional instances where USIS employees 
with administrative skills, who could have been reassigned to general 
administrative duties, instead have remained in public affairs 
sections, but with fewer responsibilities. In contrast, however, some 
embassies have made very creative use of former USIS employees, e.g. 
assigning them to consular section positions where their information 
and communication skills will be used to good advantage.

Tours of Duty
    Several studies conducted by the Department and other groups have 
recommended increasing the amount of time employees spend in overseas 
assignments. As you know, OIG also reviewed and reported on the 
Department's tour-of-duty policies and practices in 1999. OIG 
recommended that the Department increase the number of 3-year tours and 
establish 4-year tours. This would enable the officers at a given post 
to maximize the experience gained in-country in their current position 
and reduce costs associated with shorter tours. The Appropriations 
Committees agreed with the OIG report and directed that the Department 
implement all of the report recommendations no later than January 1, 
2000 and report on this issue no later than January 15, 2000.
    In its March 8, 1999 comments on our draft report, the Bureau of 
Personnel stated that ``The OIG and a number of others have properly 
noted that longer tours of duty are more productive and less costly for 
the Government.'' The comments went on to note, however, that longer 
tours would increase difficulties in staffing hardship posts. In its 
February 7, 2000 response to our final report, the Bureau of Personnel 
now states that there is little if anything to be gained, either 
financially or in productivity, from longer tours. We are currently 
analyzing the Department's responses and await its final report to 
Congress on this issue. In accordance with various studies done over 
the past decade, we continue to believe that longer tours represent a 
best practice among the foreign affairs agencies and that they would 
have positive financial and productivity impacts for the Department. We 
look forward to discussing this issue with you and with the Department 
in the coming months.

Diplomatic Readiness
    Department of State leadership professes to believe in training for 
its officers and staff, but continues to ignore this important 
function. Consequently, the institution has not demonstrated a serious 
and sustained commitment to training and career development. For 
example, only recently has the Department taken tentative steps to put 
in place a strategic program that integrates work force planning with 
development requirements. Consequently, many, if not most Foreign 
Service employees perceive no relationship between training and career 
advancement (other than foreign language training) and, hence, many 
seek to avoid training and other developmental experiences as 
detrimental to their careers. Tying training firmly to promotion, 
tenure, and assignment would improve the situation dramatically. Until 
training is seen as a valued commodity, much of the State Department's 
infrastructure for training, such as its National Foreign Affairs 
Training Center (NFATC), formerly known as the Foreign Service 
Institute, will remain a valuable but underutilized resource.
    The NAFTC does an impressive job of providing training 
opportunities for those employees of the Department of State and other 
agencies who wish to take advantage of them. It is handicapped, 
however, by the lack of commitment by the Department's top management 
to training and by an employment culture that consequently does not 
value training. The inspection of NAFTC found that the training center 
had developed measurable objectives for training and had done a good 
job developing performance indicators to track progress. However, OIG 
recommended that NAFTC develop and implement a plan to obtain feedback 
from graduates and their supervisors to allow for a more complete 
baseline of customer satisfaction data. OIG noted that the training 
center was doing a commendable job in response to the consolidation, 
but that information management resources should be expanded and some 
course materials and teacher training should be updated and improved.

Staffing for Overseas Security
    The Department is making considerable progress in hiring, 
assigning, and training new security personnel. The fiscal year 1999 
Emergency Supplemental Appropriations authorized and funded 391 new 
positions to help address staffing shortages in support overseas 
security, of which 337 were in the Bureau of Diplomatic Security (DS). 
DS used innovative recruiting methods to successfully hire candidates 
from liberal arts colleges and universities to fill security officer 
and security engineer positions and to increase opportunities for 
minorities. DS has also established a new position, security 
technician, to maintain and repair technical security systems overseas. 
All DS positions have been filled, and 105 of the security positions 
have been deployed overseas. Others are in training or have domestic 
assignments supporting the overseas positions. Training for regional 
security officers has been lengthened to include training in bomb 
detection, the use of the new equipment purchased with the emergency 
supplemental funds, and new security programs such as surveillance 
detection.

Oversight of the Government Performance and Results Act of 1993
    The Government Performance and Results Act of 1993 (Results Act) 
requires that agencies set goals for program performance and measure 
results against those goals to help improve Federal programs and to 
increase accountability. As noted in OIG congressional testimonies and 
statements in early 1999, the Department's fiscal year 1999-2000 
Performance Plan represents an improvement over the previous version. 
However, as OIG and the General Accounting Office (GAO) have noted, the 
plan ``does not provide a complete performance picture for all 
strategic goals.'' The Department is currently working with Office of 
Management and Budget (OMB) to develop a plan that provides more 
complete performance information. In addition, the Department notified 
GAO in July 1999 that it does not formally prioritize its national 
interests or strategic goals, since U.S. interests and progress in any 
one part of the world at any one time may reflect a different order 
from other parts of the world.
    In the past few years, while recognizing shortcomings in its 
overall strategic planning documents, the Department has emphasized its 
development and use of post-level planning documents, known as mission 
performance plans (MPP's) as a communication and management tool. Our 
ongoing work has found that MPP's can be an important tool for improved 
communication and coordinated planning among the many agencies present 
at our embassies. However, the MPP process has lost momentum because 
headquarters is generally not using the MPP's to set priorities, 
allocate resources, or measure posts' performance. We plan to work with 
the Department's strategic planning team over the next few months to 
streamline the MPP process while keeping the positive aspects of the 
planning process and the plans themselves.
    OIG audits and inspections have also addressed the need for better 
performance information in the Department in selected areas. An audit 
on the Department's support of U.S. business abroad (99-CI-021) found 
performance measures lacking and identified areas on which performance 
goals could be based including resource statistics, output statistics, 
professional qualifications, experience and training of commercial 
officers and foreign national employees, accomplishments, and customer 
satisfaction. An OIG inspection of the Department's training center 
(ISP/I-99-16) reported that the center could obtain a more complete 
baseline of customer satisfaction data by developing and implementing a 
plan to obtain feedback from the graduates and their supervisors. An 
ongoing OIG audit of the Department's efforts to reduce trade barriers 
in the telecommunications industry has found that the strategic and 
performance plans are not effective in assessing the Department's 
progress in this area.
    The Department agreed to explore more useful telecommunications 
performance indicators relative to the strategic goal of opening 
foreign markets and to improvements in the coordination and consistency 
among the various performance planning and measurement activities. 
However, the Department also noted the difficulties of establishing 
measurements and setting universal priorities for this and other 
program areas.

  MORE EFFECTIVE, EFFICIENT, AND SECURE OPERATIONS AND INFRASTRUCTURES

    Much of our work under this strategic goal relates to the 
Department's challenge of ensuring that our personnel and facilities 
overseas are protected from harm. In addition to our regular 
operations, OIG will continue this year to provide oversight of the 
nearly $1.5 billion emergency supplemental appropriations received by 
the Department for security enhancements overseas. Examples of our work 
in this area included an interdisciplinary review of the Department's 
management of the emergency appropriations for worldwide security 
upgrades, information security worldwide, access to our diplomatic 
facilities overseas, protection of classified documents at the 
Department, the Department's program to protect foreign dignitaries and 
missions, oversight of the Moscow chancery construction, reviews of 
programs carried out by the Department through various assistance 
instruments, and real property management and maintenance.

Worldwide Security
    Ensuring the safety and security of U.S. personnel and facilities 
overseas continues to be a paramount concern for the Department. My 
office has devoted significant time and resources to overseeing the 
Department's use of emergency supplemental and other funding to enhance 
security and continues to provide recommendations to the Department to 
improve security in the immediate and long term.
    In 1999 my office established an interdisciplinary team of 
auditors, inspectors and investigators to provide more effective 
oversight of the Departments' management of the fiscal year 1999 
emergency supplemental appropriations. The objectives of our work are 
to assess the Department's management controls and systems that account 
for and manage the emergency funds, recruit and train security and 
administrative personnel, procure goods and services to enhance 
security, and evaluate the Department's efforts to strengthen physical 
security overseas including the rebuilding of Embassies Dar es Salaam 
and Nairobi.
    In the year following the bombing in East Africa, my office 
evaluated the Department's efforts to protect official Americans at 42 
embassies. As can be seen in the following chart, the lack of a 30-
meter setback is the most prevalent deficiency we found. However, 
combined with the lack of anti-ram perimeter walls and windows that 
have been sufficiently protected, a major, long-term construction 
effort is required. For those items, such as improving the local guard 
force or improving the lighting at a chancery, which the Department can 
do without constructing new chancery, actions are generally underway to 
correct the deficiency.

----------------------------------------------------------------------------------------------------------------
                                                                Adequate     Percent     Inadequate    Percent
----------------------------------------------------------------------------------------------------------------
Setback.....................................................            9           21           33           79
Perimeter Walls.............................................           13           31           28           67
Windows.....................................................           14           33           27           64
Chancery Walls..............................................           16           38           23           55
CCTV/Lighting...............................................           21           50           19           45
Compound Access Control.....................................           20           48           17           40
Vehicle Inspections.........................................           24           57           17           40
Safe Haven..................................................           24           57           16           38
Public Access Control.......................................           31           74           10           24
Local Guard Force...........................................           34           81            6           14
----------------------------------------------------------------------------------------------------------------

    The Department initially questioned the OIG's September 1998 
recommendation for a new imminent danger alarm system providing warning 
for embassy employees to ``duck and cover'' in the event of a vehicle 
bomb attack threat. The Department subsequently accepted the 
recommendation.\1\ OIG's embassy inspections contributed to more 
effective and rapid implementation of the alarms while also stressing 
the need for timely, frequent duck and cover drills, especially at 
missions lacking setback. The Department also implemented dozens of 
other OIG recommendations to minimize security vulnerabilities, details 
of which are summarized in the OIG classified Semi-Annual Report.
---------------------------------------------------------------------------
    \1\ The OIG ``duck and cover'' recommendation was included in 
Admiral William J. Crowe's ``Report of the Accountability Review Boards 
on the Embassy Bombings in Nairobi and Dar es Salaam,'' issued January 
1999.
---------------------------------------------------------------------------
    Although a program of sustained capital investment is essential to 
ensure the security of the diplomatic infrastructure in the future, 
such a program will not immediately alter the circumstances of 
personnel overseas. Even a major construction program will leave the 
majority of missions vulnerable to some threats for several years. My 
office has attempted to focus on measures that can be taken in the near 
term to reduce those vulnerabilities.
    Our work has found that while the current facilities for Embassies 
Dar es Salaam and Nairobi are more secure than at the time of the 
August 7, 1998 bombings, both embassies still faced problems at the 
time of our May 1999 security evaluation. Embassy Dar es Salaam lacked 
sufficient emergency electrical power for security systems such as 
exterior security lights, alarms, and vehicle barriers. My office 
identified the need at Embassy Nairobi to reduce the risk of exposure 
presented by the placement of large glass windows in the front of the 
interim chancery building and provide a secondary exit point from the 
compound. Subsequent to our inspections, the Department corrected the 
emergency power problem at Embassy Dar es Salaam and the large glass 
windows have been replaced at Embassy Nairobi. While these interim 
facilities are significantly more secure than the previous facilities, 
they are at best a temporary solution because they are too small to 
house all official Americans at post. New chanceries are planned for 
Nairobi and Dar es Salaam. Money has been appropriated and contracts 
have been signed. The main objective is to build new chanceries that 
meet security standards and are of adequate size to house all official 
Americans.
    We also found that the Department has established systems that are 
capable of appropriately accounting for and managing the emergency 
appropriations that are obligated and liquidated domestically. However, 
we identified several issues relating to reporting and accounting for 
the funds that we have recommended that the Department address. Our 
review of the systems in place to account for the emergency 
appropriations obligated overseas is ongoing.
    Thus far, our findings reveal that, overall, the Department has 
done many things well. The direct involvement of the Under Secretary 
for Management and the Security Oversight Board has been instrumental 
in the Department's effective use of emergency supplemental funds. This 
senior level attention has provided focus for the overseas security 
enhancements and fostered coordination among the different bureaus. Our 
first report of our findings was published in January 2000.\2\ 
Additional reports will be published as we continue our review.
---------------------------------------------------------------------------
    \2\ Office of Inspector General Status Report, ``Review of Fiscal 
Year 1999 Emergency Supplemental Appropriations,'' (00-OIG-001).
---------------------------------------------------------------------------

Information Resources and Security
    Some of the most difficult security issues to correct deal with 
information security. In many ways, improving information security may 
be a bigger challenge than improving physical security because many of 
the fixes involve the behavior of personnel. To correct identified 
vulnerabilities requires senior management leadership, technically 
qualified staff, money, and a desire to do things differently. For 
example, in our November 1999 audit report on overseas telephone system 
security, we found that the Department was spending $61 million to 
upgrade its overseas telephone systems, but was not focusing on 
improving the security aspect of the systems. Furthermore, the 
Department needs to establish plans to modernize telephone security 
overseas and request the resources needed to act on the report 
recommendations to improve telephone security and protect sensitive 
information.
    OIG has realigned its resources to focus on emerging information 
technology issues. My office has consolidated its information 
technology and security efforts and created a single Information 
Resources and Security Management Division (IRSM) in the Office of 
Audits. This division will address emerging issues of congressional 
interest in five areas: information management, telecommunications, 
information security, information technology human resources, and 
information warfare.

Access to Diplomatic Facilities Overseas
    As part of our review of DS's overall management of card access 
control systems at overseas posts, our office completed a review of the 
system in Germany and Luxembourg this last year. The system in these 
countries was intended to control access to diplomatic facilities, to 
reduce the cost to DS for the local guard program, and to provide a 
model for possible worldwide use. Recommendations were made with regard 
to vulnerabilities identified by our office.
    In November 1999, we also issued our report on the bureau's overall 
management of card access control systems at overseas posts. Several 
organizational elements of the bureau are involved in managing card 
access control systems used at U.S. posts abroad. However, no single 
office or element has been designated with lead responsibility for 
managing those systems. As a result, important policy requirements were 
not applied, or were not adequately applied, in the management of those 
systems. The bureau could significantly improve the management of card 
access control systems by: designating a single office to be primarily 
responsible for managing distinct card access system activities, 
including system planning, installation, administration, and 
maintenance; assessing the risks, costs, and benefits of using card 
access control systems before acquiring such systems; acquiring and 
using only those systems approved by the bureau; and, focusing greater 
attention on computer security aspects of those systems.

Protection of Classified Documents at State
    OIG evaluated the effectiveness of Department policies and 
procedures for protecting classified documents at the Main Department 
of State headquarters facility in Washington, D.C. Although the 
Department has programs in place to evaluate individuals' 
trustworthiness and need to handle classified information, improvements 
to enhance the level of security awareness and controls to prevent 
unauthorized disclosures are needed. The report highlighted the 
following specific problems:
  --very highly classified documents relating to intelligence reporting 
        are not safeguarded in accordance with government regulations;
  --significant numbers of foreign nationals are permitted unescorted 
        access to the Department--uncleared individuals are not always 
        escorted in areas where classified information is handled, 
        processed, stored, and discussed;
  --administrative actions taken to discipline employees are 
        ineffective in correcting poor security practices; and
  --unit security officers are not well informed about security 
        requirements and do not have the authority to enforce security 
        requirements.
    OIG recommended that the DS be designated as the organization 
responsible for protecting sensitive compartmented information (SCI) 
and that the bureau enhance physical and procedural measures required 
to safeguard such information. DS officials agreed with OIG's findings 
and recommendations. INR agreed that security policies are not being 
sufficiently enforced, but did not agree to designate DS as the 
cognizant security office for the protection of SCI. Additionally, the 
Department has since issued a notice regarding a visitor escort policy.

The Protective Services Program
    OIG evaluated the effectiveness of DS's protective services 
program. The principal focus of the audit was protection provided to 
visiting foreign dignitaries and foreign missions in the United States.
    DS has successfully defended dignitaries and missions from attack, 
and client organizations provide positive feedback on DS's performance. 
However, improvements are needed to enhance the protective services 
program to correct the following vulnerabilities:
  --DS shares its protection responsibilities with the Secret Service 
        and other law enforcement agencies, causing some operational 
        deficiencies and inconsistencies;
  --the Department has not systematically determined which foreign 
        dignitaries should receive DS protection in the United States;
  --improvements are needed in the process by which DS develops and 
        disseminates threat information to protective details;
  --the lack of defined policies and procedures caused inconsistencies 
        in the operation of some details, particularly with respect to 
        preparatory briefings and midnight shifts; and
  --effective protection was hindered by low DS staff levels excessive 
        overtime, and inadequate procedures to ensure that agents 
        assigned to protective details were capable of fulfilling all 
        responsibilities.
    OIG made recommendations to effect the needed improvements in the 
protective services program. DS and other Department officials 
generally concurred with the OIG's findings and recommendations, except 
for the recommendation to initiate legislative action to centralize all 
protection activities for foreign missions into DS.

Moscow Chancery
    The Moscow Oversight Team (MOT) provides the Inspector General, 
senior Department officials, and congressional oversight committees 
with current information on the construction of the secure chancery 
facilities in Moscow and makes timely recommendations to improve the 
security aspects and contract administration of the project. Since 
1995, MOT has made semiannual onsite evaluations of the project, 
flagging problems on which the Department could take immediate action, 
rather than letting the problems escalate. The last onsite evaluation 
took place in October 1999 and resulted in 21 recommendations 
addressing master planning for the transition to the secure chancery, 
counterintelligence, technical security programs, accreditation 
reporting, and secure warehouse operations. The Department is taking 
action to correct the deficiencies identified in the report.
    During April 2000, MOT will conduct its final evaluation of the 
secure chancery. This visit is intended to confirm that previously 
identified security deficiencies have been corrected and to ensure that 
security is not compromised during the move from the existing office 
building into the new facility. The move is currently scheduled for May 
2000. In addition, MOT will ensure that the procedures and personnel 
are in place to maintain the extensive security systems in the new 
chancery.

Broadcasting Facilities
    OIG also extended its security oversight to the BBG's engineering 
components and broadcasting networks which has resulted in 
recommendations for substantial improvements in security preparedness 
at overseas as well as domestic facilities. These recommendations have 
been endorsed by the BBG and corrective actions are under way.

Grants Management and Transfers
    The Department annually expends more than a billion dollars for a 
variety of programs carried out through assistance instruments such as 
grants, cooperative agreements, and transfers; however, it does not use 
standardized grant systems, policies, or procedures to manage these 
programs. Previous OIG audits identified insufficient monitoring and 
oversight of grantees; unauthorized, unallowable, and unsupported 
costs; internal control weaknesses; or noncompliance with applicable 
regulations associated with these awards. For example, OIG found that 
the handling of a building sale and immediate rental of that same 
building by a grantee, the Institute for International Education, did 
not comply with Office of Management and Budget (OMB) requirements, 
resulting in about $4 million in questioned rental costs over the life 
of the lease. In other cases, we questioned about $3 million when 
grantees did not properly document or use Federal funds for authorized 
purposes. In these cases, the grantees involved were the American 
Council for Learned Societies ($1.1 million), the Washington Workshops 
Foundation ($.9 million), and the Institute for International Education 
($1 million for indirect cost rates).
    The managing and monitoring of the recipients of these funds has 
become more critical because of OMB guidelines revised in 1996. As a 
result, the majority of Department's grantees are no longer required to 
have annual financial audits. Furthermore, ongoing legislative and 
other governmental initiatives will affect how the Department manages 
grants and monitors non-governmental organizations in the future. On 
November 20, 1999, for example, the President signed Public Law 106-
107, the Federal Financial Assistance Management Improvement Act, which 
requires the Department to streamline and simplify the application, 
administrative, and reporting procedures for Federal financial 
assistance programs. OIG is working with the Department to establish a 
common system, including electronic processes, wherein a non-Federal 
entity can apply for, manage, and report on the use of funding from 
multiple Federal financial assistance programs.

Improving Real Property Management and Maintenance
    A significant open OIG audit recommendation in the area of property 
resulted from our 1993 audit ``Maintenance and Repair of Buildings 
Overseas'' (3-PP-014). The audit recommends the Department develop a 
system to identify and monitor the worldwide backlog of maintenance and 
repair deficiencies, including determining an acceptable level for the 
backlog and periodically updating the backlog for corrective action 
taken, additional deficiencies identified, and improved cost estimates.
    Since 1988 the Department has reported rehabilitation and 
maintenance of real property overseas as a material weakness in the 
Federal Managers' Financial Integrity Act Report. Over OIG's stated 
objections, the Department's Management Control Steering Committee 
recently closed this weakness on the basis that all conditions had been 
met with the exception of the backlog which cannot be brought down to 
zero due to funding issues. Although significant improvements have been 
made in correcting this weakness, we believe that more needs to be 
done. The Department needs to better define what is an ``acceptable'' 
level for the backlog to rehabilitate and maintain facilities and also 
provide a baseline that will address the costs to reduce the backlog to 
an acceptable level. We believe that armed with this information the 
Department can best identify those properties that may be more prudent 
for disposal in lieu of the high costs to rehabilitate and provide 
long-term maintenance. We plan to closely monitor Department efforts in 
this area.
    As I reported in my statement to the Subcommittee last year, my 
office has continued to advise the Department of excess, underutilized, 
or obsolete real properties identified in our inspections and audits at 
overseas posts. The Department evaluated 172 properties that OIG 
categorized as excess, underutilized, or obsolete at the time of the 
inspection or audit. Of these, the Department plans to dispose of 65, 
an additional 17 warrant further study, and the remaining 90 will be 
the subject of dialogue between the Bureau of Administration's Office 
of Foreign Buildings Operations (A/FBO) and the regional bureaus. These 
reviews will be used by the Department to better manage its real 
property assets.

GREATER ADHERENCE TO FUNDAMENTAL PRINCIPLES GOVERNING PROFESSIONAL AND
                            ETHICAL CONDUCT

    OIG is mandated to prevent and detect waste, fraud, and 
mismanagement. Specific allegations or other information indicating 
possible violations of law or regulation are investigated by OIG 
special agents supported by experts from other OIG offices as 
appropriate. During fiscal year 2001, OIG continues to focus on 
promoting increased awareness of standards of conduct and 
accountability among agency and OIG employees, contractors, and other 
appropriate audiences, including representatives of foreign governments 
who have requested OIG assistance on this issue. As part of these 
efforts, results from audits, inspections, and investigations will be 
highlighted and recommendations made to reduce areas of vulnerability 
and opportunities for misconduct.
    OIG also will work proactively, in consultation with targeted 
audiences, to improve adherence to standards of accountability by 
ensuring that employees are informed of and understand the standards 
specific to their professional and ethical conduct. Accordingly, OIG 
will work with the foreign affairs agencies to improve their programs 
for educating employees on standards of accountability and fundamental 
principles governing programmatic accountability and ethical conduct.

Investigative Process
    My office makes every effort to review complaints as quickly and 
efficiently as possible. Upon receipt of a complaint or allegation 
regarding fraud, waste, abuse or mismanagement, one of the following 
actions takes place: a criminal investigation or preliminary inquiry is 
initiated; the matter is referred to management officials who have the 
authority and jurisdiction to investigate or resolve the issues; or the 
matter is filed without action because none is warranted. A preliminary 
inquiry is initiated when vague, non-specific information is received 
and a few inquiries are needed to develop more facts to justify a 
criminal investigation or resolve it. If a preliminary inquiry is 
opened, special agents have 45 days to develop that additional 
information or resolve and close the preliminary inquiry.
    If a criminal investigation is opened, special agents must present 
the facts of the case to the appropriate United States Attorney's 
Office, or other prosecuting authority, within 90 days of the case 
opening. In the event the prosecution of the case is declined, special 
agents have 45 days from the date of the declination to close the case, 
initiate civil proceedings, or commence work on administrative 
remedies. These policies and procedures were implemented in order to 
reduce the amount of time it takes to complete investigations, 
particularly those involving Department employees.
    In addition to our efforts to reduce the amount of time to complete 
employee investigations, OIG has also instituted a policy of issuing 
Case Notification Letters (CNL) to employees at the conclusion of 
investigations. Our established policy and procedure requires that at 
the conclusion of an investigation when no action is anticipated being 
brought against a subject a CNL will be forwarded directly to the 
Subject. In rare cases, when the evidence is inconclusive, a CNL may 
not be provided to the employee. At the discretion of OIG management, 
it may also be deemed appropriate to forward a CNL to Department 
officials.

Proactive Outreach Development
    The Office of Investigations is developing training for outreach 
and fraud awareness and prevention. The training will be based on 
actual cases and tailored to the particular employee group being 
addressed. Initially, two programs will be developed: one oriented to 
the needs of contracting officers with A/FBO and the other towards the 
Bureau of Financial Services (FMP) financial officials. The A/FBO 
training will cover indicators of contract fraud and will discuss 
completed criminal cases involving schemes perpetrated against the 
Department.

Visa Fraud
    Each year, millions of individuals apply for passports and visas at 
the more than 230 U.S. embassies and consulates throughout the world. 
Attempts to falsify, alter, or counterfeit U.S. visas or passports, or 
to obtain genuine documents by fraudulent means are a constant problem 
both within the United States and overseas. In 1999 a majority of work 
performed by the Office of Investigations was in visa fraud and 
passport investigations. Statistics representing all investigative 
cases opened in my office for fiscal year 1999 are indicated in the 
following table.

              FISCAL YEAR 1999 STATISTICS FOR CASES OPENED
------------------------------------------------------------------------
                                                            Percent of
             Allegation Type               No. of Cases        Cases
------------------------------------------------------------------------
Visa Fraud/Passport Fraud...............              29              39
Employee Misconduct.....................              11              15
Contract/Procurement Fraud..............               4               5
False Statements/Claims.................               8              11
Theft...................................              14              19
All Other...............................               9              12
                                         -------------------------------
      Total.............................  ..............             100
------------------------------------------------------------------------

    In 1999, the Office of Investigations, working with other U.S. law 
enforcement agencies, conducted a number of investigations that 
resulted in criminal charges against individuals and companies who were 
operating large-scale schemes to provide fraudulent U.S. visas to 
paying customers. Several of these cases have involved fraudulent H1-B 
visas, which are issued legitimately only to individuals with 
particular skills needed by a particular company in the U.S.
    One investigation determined that a foreign national living in New 
Jersey had operated a company for several years that sold fraudulent 
H1-B visas, which were then used to obtain social security cards. Most 
of the customers were foreign nationals living illegally in the U.S. 
After a jury trial, the seller was convicted of multiple felony counts 
of visa fraud and was sentenced to 55 months in prison. The seller is 
also subject to deportation after completion of the sentence.
    Another investigation developed evidence that an immigration 
consultant in California had operated companies through which she 
arranged for numerous foreign nationals to enter the United States on 
H1-B visas, based upon false certifications that they had entered into 
contracts for high-skill employment with companies in the U.S. The 
immigration consultant was indicted on felony charges of visa fraud and 
alien smuggling and was arrested. An attorney associated with the 
consultant was also charged. Disposition of these charges is pending. 
It is anticipated that there will be additional charges against other 
individuals.
    In another investigation, it was determined that individuals in 
Virginia, Florida, and Kentucky, cooperating with citizens of a Central 
European country, had conspired to obtain fraudulent visas and to 
smuggle numerous people into the United States to work on cleaning 
crews for retail stores. These workers would usually enter the country 
on tourist visas, obtained based upon false statements. Upon arrival, 
the workers were frequently provided with fraudulent H1-B visas and 
then used the visas to obtain social security cards. Several 
individuals involved in the operation of this scheme have entered 
guilty pleas to criminal charges in this case, and charges against 
others are pending. One of the higher level individuals in the 
operation, a foreign national who resided in Florida, has pleaded 
guilty to money laundering and has agreed to cooperate in providing 
evidence against others.
    Another investigation in Virginia developed evidence that foreign 
nationals residing illegally in the United States were being provided 
with fraudulent H-1B visas. The individuals were then being transported 
from the New York/New Jersey area to Social Security offices in 
Virginia in order to obtain social security cards based on the 
fraudulent visas. Five persons entered guilty pleas to criminal 
charges. Three of these individuals agreed to voluntary departure from 
the United States, while the other two agreed to provide information 
regarding the higher level organizers of this scheme.
    In addition to conducting cases involving fraudulent H-1B visas, 
the Office of Investigations also continued to pursue evidence of other 
types of visa fraud. An investigation conducted jointly with the INS 
determined that a naturalized United States citizen living in Hartford, 
Connecticut had operated a scheme to arrange marriages of convenience 
for aliens living illegally in the United States, and for others who 
wanted to come to this country. Immigrant visas were obtained based on 
documentation of these fraudulent marriages. The principal subject and 
10 other individuals were indicted on visa fraud and other charges. The 
principal subject, after entering a guilty plea, was sentenced to 5 
months in prison and a fine. Several other individuals also pleaded 
guilty and received lesser sentences.
    And, finally, in a case that developed recently, an FSN 
investigator employed by INS at an embassy in Asia was arrested on 
charges of extortion, based upon evidence that he had solicited 
payments in return for approving an asylum petition. Approval of this 
petition would lead to issuance of a visa. The subject was indicted 
subsequent to being arrested and remains in custody pending resolution 
of the charges.
    This concludes my statement. I look forward to working with your 
subcommittee in the coming months.

                                APPENDIX

     OIG REPORTS AND MEMRANDA ISSUED FOR WORK IN FISCAL YEAR 1999

           MISSION: IMPROVED IMPLEMENTATION OF FOREIGN POLICY

Improved Conduct of Foreign Relations
    Taken as a whole, OIG activities provide a broad overview of the 
Department's effectiveness in the implementation of foreign policy and 
in the use of the full range of diplomatic and public diplomacy tools 
including international broadcasting. Through the inspections of 
overseas missions and domestic bureaus, and on in-depth audits of 
selected issues, we assessed the conduct of foreign relations, 
particularly the skills and capabilities of senior management and the 
availability and use of appropriate structures, authorities, and 
processes. In the coming year, OIG will inspect and audit the 
effectiveness of policy and program formulation and implementation; 
intelligence reporting; results monitoring and assessment; and, mission 
leadership and management.
            Audits:
    Activities Supporting the International Law Enforcement Academy, 
Budapest, Hungary (99-CI-005)
    Department of State Support for U.S. Business Abroad (99-CI-021)
    International Law Enforcement Coordination and Oversight (99-CI-
027)
    Policies and Procedures for Ensuring that Radio Marti Broadcasts 
Adhere to Applicable Requirements (99-IB-010)
    Border Biometrics (Laser Visa) Program (ISP/I-99-12)
    American Council of Learned Societies Supporting the Vietnam 
Fulbright Economic Teaching Program (99-CG-026)
    Cyprus Fulbright Commission (USIA-99-CG-017)
            Post Management Inspections:
    Management Inspections of Embassies and U.S. Information Service:
  --Embassy Singapore and USIS Singapore (ISP/I-98-44)
  --Embassy Kuala Lumpur and USIS Malaysia (ISP/I-98-01)
  --Embassy Tokyo and USIS Japan (ISP/I-99-04)
  --Embassy Bujumbura and USIS Burundi (ISP/I-99-07)
  --Embassy Lilongwe and USIS Malawi (ISP/I-99-10)
  --Embassy Cairo and USIS Egypt (ISP/I-99-11)
  --Embassy Jakarta and USIS Indonesia (ISP/I-99-15 and ISP/I-99-02) 
        \3\
---------------------------------------------------------------------------
    \3\ The inspection of Embassy Jakarta, Indonesia was bifurcated due 
to political instability in the region.
---------------------------------------------------------------------------
  --Embassy Tel Aviv and USIS Israel (ISP/I-99-18)
  --Consulate General Jerusalem and USIS Jerusalem (ISP/I-99-19)
  --Embassy Kathmandu and USIS Nepal (ISP/I-99-21)
  --Embassy Colombo and USIS Sri Lanka (ISP/I-99-22)
  --Embassy New Delhi and USIS India (ISP/I-99-23)
  --Embassy Santo Domingo and USIS Dominican Republic (ISP/I-99-24)
  --Embassy London and USIS United Kingdom (ISP/I-99-27)
  --Embassy Dublin and USIS Ireland (ISP/I-99-28)
  --Embassy Bucharest and USIS Romania (ISP/I-99-29)
    Inspections of Embassies only:
  --Embassy Kampala, Uganda (ISP/I-99-05)
  --Embassy Kigali, Rwanda (ISP/I-99-06)
  --Embassy Harare, Zimbabwe (ISP/I-99-08)
  --Embassy Lusaka, Zambia (ISP/I-99-09)
  --Consulate Lyon, France (ISP/I-99-25)
    Compliance Follow-Up Reviews:
  --U.S. Mission to NATO, Brussels, Belgium (ISP/C-99-03)
  --Embassy Hanoi, Vietnam (ISP/C-99-13)
  --Embassy Rangoon and USIS Burma (ISP/C-99-14)
  --Embassy Mexico City and Constituent Posts and USIS Mexico (ISP/C-
        99-17)
  --Embassy Moscow and Constituent Posts and USIS Russia (ISP/C-99-20)
    Other Office of Inspection Reviews:
  --Management Controls for Small Embassies (ISP/I-99-26)
  --Border Biometrics Program (ISP/I-99-12)
            Inspector General Testimony and Statements for the Record:
    Testimony, Major Management Challenges for the Department, House 
Committee on Government Reform, Subcommittee on National Security, 
Veterans Affairs, and International Relations, February 25, 1999.
    Testimony, Major Management Challenges for the Department, Senate 
Committee on Foreign Relations, Subcommittee on International 
Operations, March 4, 1999.
    Statement for the Record, OIG Budget Request, House Committee on 
Appropriations, Subcommittee on Commerce, Justice, State, the 
Judiciary, and Related Agencies, March 10, 1999.

BETTER ALIGNMENT OF FISCAL AND HUMAN RESOURCES WITH U.S. FOREIGN POLICY

    OIG has built a Results Act component into selected audits, 
inspections, and security reviews to assess the performance goals and 
measures. Areas of OIG coverage included overseas security 
vulnerabilities, financial management, Y2K remediation efforts, 
telecommunications, and property management. OIG established a plan to 
review and report on the efforts of the Department and Broadcasting 
Board of Governors to develop and use performance measures and will 
verify and validate selected data sources for such measures.
    OIG work includes:
  --Review of Tours of Duty (99-SP-013)
  --Inspection of FSI (ISP/I-99-16)
  --Inspection of Consulate Lyon (ISP/I-99-25)
  --Consular Fraud Prevention Programs (99-CI-028)
    Inspector General Testimony:
  --Nonimmigrant Visa Fraud, House Committee on the Judiciary, 
        Subcommittee on Immigration and Claims, May 5, 1999.
  --Best Practices and Standards of Performance in an OIG, Council of 
        the District of Columbia, Committee on Government Operations, 
        May 19, 1999.

More Effective, Efficient, and Secure Operations and Infrastructures
    OIG security oversight inspections were expanded to include low and 
medium threat posts, in addition to those with high and critical threat 
ratings. The new division of Security Enhancements Oversight is 
reviewing the fiscal year 1999 Emergency Supplemental Appropriations. 
In addition to embassy security and Y2K preparedness, OIG post 
inspections reviewed executive direction, policy implementation, public 
diplomacy, consular operations, diplomatic readiness, and 
administrative operations. Audit reviews included export licensing 
process, law enforcement coordination, consular antifraud programs, and 
the protection of classified information at the Department. 
International broadcasting reviews included Radio Marti's adherence to 
the applicable broadcast standards.

Security Reviews:
    Review of Fiscal Year 1999 Emergency Supplemental Appropriations 
(00-OIG-001) \4\
---------------------------------------------------------------------------
    \4\ The OIG review of the fiscal year 1999 Emergency Supplemental 
Appropriations was conducted through August 31, 1999.
---------------------------------------------------------------------------
    Security at Embassies Dar es Salaam and Nairobi (SIO/E-99-50)
    Protective Services (SIO/A-99-29)
    Moscow Oversight Status Reports (SIO/M-99-31, SIO/M-99-31)
    Special Documents Program (SIO/Z-99-40)
    Card Access Control System in Germany and Luxembourg (SIO/A-99-01)
    Protection of Classified Documents at State Department Headquarters 
(SIO/A-99-46)
    Security Audit of Overseas Telephone Security Management (SIO/A-00-
01) \5\
---------------------------------------------------------------------------
    \5\ A major portion of the work that resulted in the ``Audit of 
Overseas Telephone Security Management'' was accomplished in fiscal 
year 1999.
---------------------------------------------------------------------------
    Security Inspections:
  --Embassy Nassau, The Bahamas (SIO/I-99-01)
  --Embassy Sarajevo, Bosnia-Herzegovina (SIO/I-99-17)
  --U.S. Diplomatic Posts in the Bureau of Western Hemisphere Affairs 
        (SIO/I-99-18)
  --Embassy Madrid, Spain (SIO/I-99-21)
  --Embassy London, United Kingdom (SIO/I-99-24)
  --Embassy Lisbon, Portugal (SIO/I-99-25)
  --Embassy Dublin, Ireland (SIO/I-99-26)
  --Embassy Reykjavik, Iceland (SIO/I-99-27)
  --Embassy Copenhagen, Denmark (SIO/I-99-28)
  --Embassy Zagreb, Croatia (SIO/I-99-34)
  --Embassy Kuala Lumpur, Malaysia (SIO/I-99-35)
  --Embassy Brussels, Belgium, USMEU, and NATO (SIO/I-99-36)
  --Embassy Luxembourg (SIO/I-99-37)
  --Embassy Prague, Czech Republic (SIO/I-99-41)
  --Embassy Valletta, Malta (SIO/I-99-42)
  --Radio Free Europe/Radio Liberty Prague, Czech Republic (SIO/I-99-
        43)
  --Embassy Oslo, Norway (SIO/I-99-44)
  --Embassy Stockholm, Sweden (SIO/I-99-45)
    Security Follow-Up Reviews:
  --Embassy Islamabad, Pakistan (SIO/C-99-09)
  --Embassy New Delhi, India (SIO/C-99-10)
  --Consulate General Hong Kong (SIO/C-99-19)
  --Embassy Ankara, Turkey (SIO/C-99-23)
  --Embassy Beijing, China (SIO/C-99-30)
  --Embassy Santo Domingo, Dominican Republic (SIO/C-99-51)

Year 2000 Information Management Review: \6\
---------------------------------------------------------------------------
    \6\ OIG's Y2K activities extended from fiscal year 1998 through 
fiscal year 2000.
---------------------------------------------------------------------------
    Y2K Interim Memorandum 1 (6/17/98)
    Year 2000 Interim Memorandum 2, Analysis of Key Y2K Issues (8/20/
98)
    Year 2000 Interim Memorandum 3, Analysis of Telecommunications 
Issues (10/16/98)
    Y2K Certification of USIA Systems (2/8/99)
    Y2K Readiness of Affiliates Used by International Broadcasters 
(management letter)

Inspector General Testimony and Statements for the Record concerning 
        Y2K:
    Testimony, The Year 2000 Computer Problem: Global Readiness, Senate 
Special Committee on the Y2K Technology Problem, March 5, 1999.
    Testimony, The Year 2000 Computer Problem: Global Readiness and 
International Trade, Senate Special Committee on the Year 2000 
Technology Problem, July 22, 1999.
    Testimony, The Year 2000 Computer Problem: Global Readiness, House 
Committee on International Relations, October 21, 1999.
    Statement for the Record, Year 2000 Computer Problem, House 
Committee on Ways and Means, February 24, 1999.
    Statement for the Record, The Year 2000 Computer Problem: Global 
Readiness, Senate Special Committee on the Year 2000 Technology 
Problem, October 13, 1999.

Office of Audits:
    Consular and International Programs Division:
  --Interagency Review of Export Licensing Process (99-CI-018)
  --Consular Fraud Prevention Programs (99-CI-028)
    Financial Management Division:
  --Florida Regional Center (99-FM-002)
  --U.S. Department of State's Consolidated Financial Statements (99-
        FM-003)
  --ICASS Financial Statements Fiscal Year 1997 (99-FM-004)
  --Foreign Service Retirement and Disability Fund Financial Statements 
        for Fiscal Year 1998 (99-FM-014)
  --Department of State 1997 and 1998 Principal Financial Statements 
        (99-FM-031)
  --ICASS Program's 97-98 Financial Statements (99-FM-032)
    Property Management and Procurement Division:
  --Real Property Advisory Board (99-PP-006)
  --Acceptability Review Process Within the Bureau of Diplomatic 
        Security (99-PP-030)
    Contracts and Grants Division:
  --United States Educational Foundation, Pakistan (99-CG-001)
  --National Endowment for Democracy (99-CG-007)
  --Indirect Cost Rates Proposed by the Institute of International 
        Education (USIA-99-CG-015)
  --Sale and Leaseback Arrangement Proposed by the Institute of 
        International Education (USIA-99-CG-016)
  --Review of Planning and Management of Lisbon Expo 98 (USIA-99-CG-
        019)
  --Fiscal Year 1999 Indirect Cost Rate AIT (99-CG-022)
  --Malaysian-American Commission on Educational Exchange (USIA-CG-99-
        024)
  --Claimed Costs Under USIA Awards to the Washington Workshops 
        Foundation (99-CG-025)
  --Accounting for Increased Visa Fees of the AIT (99-CG-029)
  --Nonfederal Audits of Nonprofit Institutions (various desk reviews)
    International Broadcasting Division:
  --RFE/RL Administrative Practices (99-IB-012)
  --Office of Cuba Broadcasting's Administrative Practices (99-IB-023)
    Inspector General Testimony:
  --Oversight of Security at U.S. Missions Overseas, House Committee on 
        International Relations, Subcommittee on International 
        Operations and Human Rights, March 12, 1999.
  --Export Licensing Process for Munitions and Dual-Use Commodities, 
        Senate Governmental Affairs, June 23, 1999.

GREATER ADHERENCE TO FUNDAMENTAL PRINCIPLES GOVERNING PROFESSIONAL AND
                            ETHICAL CONDUCT

    OIG is mandated to prevent and detect waste, fraud, and 
mismanagement. Specific allegations or other information indicating 
possible violations of law or regulation are investigated by OIG 
special agents supported by experts from other OIG offices as 
appropriate.
Audits:
    Report on Inquiry into Former Contractor Allegations (99-PP-008)
    Unreasonable Contractor Profit on an Asbestos Abatement Project 
(99-PP-009)
    Report on Inquiry into Contractor Allegations (99-PP-011)
    Review of Planning and Management of Lisbon Expo 98 (USIA-99-CG-
019)
    Inspector General Testimony:
    Allegations of Visa Fraud and Other Irregularities at the U.S. 
Embassy in Beijing, House Committee on Government Reform, July 22, 
1999.

                          EMBASSY CONSTRUCTION

    Senator Gregg. Thank you, Madam Secretary. Let me begin 
where you began, which is the issue of construction of 
embassies and facilities around the world where we are trying 
to respond to the various reports we have had. This committee 
has aggressively pursued a plan of trying to refurbish and 
rebuild the embassies so that we would have adequate security 
for our personnel.
    I am looking at a chart, and I suspect you do not have it. 
It is a fairly discouraging chart. It is a chart of 
construction projects which are going on in approximately 25 
different embassies around the world and the funds that have 
been provided and the funds that are still to be provided. It 
is a $1.5 billion price-tag and the average price, as I figure 
it, on these embassy construction projects is somewhere in the 
vicinity of $90 million. They range from a low of $7 million in 
Kingston, which is extremely low compared to the average, to 
the typical construction site cost. Sarajevo is at $100 
million, Sofia at $82 million, Abidjan at $86 million, Abu 
Dhabi at $54 million, Rio de Janeiro at $90 million, Sao Paulo 
at $103 million, Berlin at $150 million, Beijing at $275 
million, Seoul, South Korea at $184 million.
    These are stunning numbers, and I do not know what to do 
about them. I do not suspect that you have much that you can 
give me that will be constructive to the issues, but how can we 
be spending what amounts to about $90 million on the average 
for a physical facility in many countries where you can almost 
buy the country for that amount? In Sarajevo, $104 million; you 
must be able to buy most of downtown Sarajevo today for $104 
million.
    The numbers for the construction costs of these facilities 
are staggering. I recognize that a lot of this is driven by 
American law, which is our law, which says that you have to use 
American contractors. The security needs in Beijing, for 
example, are unique and we have had serious problems on all 
sorts of levels in Beijing in trying to build the building. 
Then the Berlin problem is that our ambassador there seems to 
have fallen down on his job rather dramatically in his ability 
to get approvals.
    Obviously, this committee is totally committed to trying to 
make sure that we address the facility needs of the State 
Department. This has been a priority of ours. But at these 
prices, we are not going to be able to address a whole lot of 
facilities.
    I have two levels of questions. Can you give us any thought 
on how we can get some control over these construction costs, 
number one? And number two, can you give us any thought as to 
whether or not we can start moving to a hub approach with some 
of these embassies so that if we are going to build a $100 
million embassy in Nairobi, that that can be used as a center 
and then we build much smaller facilities in the surrounding 
countries, which do not have as many people or as large an 
economic impact potentially on our relationship with them?
    Secretary Albright. Mr. Chairman, I agree with you. When I 
looked at these costs it was sticker shock. I mean they are 
remarkable amounts for embassies. And I have gone back to our 
folks on this to try to explain better why this happens, and 
there are a number of reasons.
    One is that we obviously have to acquire larger pieces of 
land in order to have the proper setbacks and this can be 
costly where they are in particular cities.
    Also, the security standards now on these buildings, the 
cost is phenomenal in terms of the kinds of glass you have to 
use and various things--a lot of it has to do with having 
secure buildings.
    The other, as you pointed out, are things that have to do 
with our law, that we have to use American contractors and 
U.S.-origin materials and getting them to places in sealed 
carriers so that there is no tampering with them. Every part of 
this is an expensive process.
    You and I and other members of the subcommittee, we have 
talked about the fact that we have a prime responsibility to 
make sure that our people are safe in these places, and this is 
what it amounts to. I have asked them to scrub and rescrub 
these numbers because I had the same feeling you did about it, 
and all I can tell you is that I am told that this is what it 
costs.
    I think the question we have to answer is how do we make 
sure that the buildings are the kind that Admiral Crowe says we 
have to have and that Lou Kaden and his committee say we have 
to have and be able to afford them?
    Now, on the German question, I defend Ambassador Kornblum 
on this. Part of the problem here is that we have wanted our 
embassy to be in a prime historic location near the Brandenburg 
Gate, where it is a little hard to get the proper setbacks when 
that is their main thoroughfare. So that has been one of the 
problems.
    In each of these cities there is a specific problem that 
has to be dealt with and we are very happy--happy is the wrong 
word--we will go through with you what the various costs are 
and where they are.
    On the question of hubs, the Nairobi embassy is, in fact, 
being rebuilt to serve as a regional hub so that a lot of the 
technology and things that are necessary for the support of an 
embassy in the whole region will be done out of there.
    We are also trying something different in some places which 
are American presence posts, the way Ambassador Rohatyn has 
thought up in France, where you send one or two people into a 
city where the structure for them is not that complicated, and 
yet there is an American presence primarily for business 
purposes and consular.
    I do happen to believe strongly in the concept of 
universality because while some country may not seem as 
important as another for one reason or another, ultimately it 
is important for Americans to be there. And, as you know, the 
embassy serves as a platform also for a lot of other agencies 
to serve with us.
    What I am doing now is to systematically go through the 
recommendations out of the Kaden and Crowe reports, to right-
size those embassies so that the agencies are all working 
together and we have the right mix of people in them.
    But I agree with you that the cost of the embassies is very 
high, and I think we have to keep asking ourselves why. My 
answers are the land, the security, and the fact that we must 
use American contractors and materials.
    Senator Gregg. Well, I appreciate that, and your answer was 
pretty much the answer I expected to get. I guess what I would 
like to think about is how we could put some system in place 
that would give us an independent review of the construction 
costs by people who are in the construction business. I am 
thinking of maybe setting up, or I would be interested in your 
thoughts--setting up a blue ribbon panel that would be a 
volunteer group who would be specialists in construction--
leading architects and leading construction individuals from 
across the country who do not do international construction, so 
there would not be conflicts, and have them be a platform where 
we could get an analysis of whether or not these costs are in 
the correct ballpark. I mean, we can send GAO in, I suppose, 
and ask them to look at each one of these embassies, but I am 
not sure that that is the system.
    What I am trying to think of is some systematic way--if we 
could put in some sort of system in place so that we could get 
a feel that if there is something that we do not have to do or 
some way to do this more effectively, we can do it. The big 
problem here is we have 192 embassies that we have to address 
or something like that, and at this rate of price, we are 
simply never going to get them all done. We are going to end up 
with maybe the high-priority ones being done but unfortunately, 
the targets end up being places like Abu Dhabi or someplace 
that we did not expect.
    Secretary Albright. I think it would be very useful to have 
a variety of people advising. I think the Secretary of State 
ultimately needs to have control over decision-making on this.
    Senator Gregg. Oh, absolutely.
    Secretary Albright. But I do think it would be useful. We 
have American architects designing these buildings, trying to 
make them fit into their country.
    I agree with you that we should develop some system of 
getting better advice on it.
    Senator Gregg. Well, we have this review board that looks 
at intelligence activities. It is an independent group of 
private citizens. It is done as volunteers.
    Secretary Albright. FIPIAC [President's Foreign 
Intelligence Advisory Board], yes.
    Senator Gregg. I am thinking maybe you set up a group like 
that that looks at embassy security and construction so that 
you have both the expertise on the security side and the 
expertise on the construction side. I do not want another level 
of bureaucracy that makes things take longer and increases 
costs, but I do want to have somebody we can go to and have an 
analysis done that is fair and objective as to whether these 
prices are reasonable and whether we can afford them.
    Secretary Albright. I think we should look at some 
mechanism. And if I might at this point explain why we are 
actually asking for advance appropriations on this, which I 
know is not one of your favorite activities, because I think 
that this would help us in terms of letting contracts for a 
number of buildings at the same time and to try to figure out a 
longer-range plan for them.
    So those two things together, I would be very pleased to 
work with you on.
    Senator Gregg. I am becoming more sympathetic to advance 
appropriations in this area, actually, which is something I was 
not.
    I want to talk about other issues but I want to turn to my 
colleagues and give them a chance.
    Senator Hollings. Thank you, Mr. Chairman, and I apologize 
to you and our distinguished Secretary because we have the 
hearing upstairs on the mergers of these communications folks 
and I am going to have to leave.
    But getting right to the point, the Secretary has far more 
important things to turn her attention to. What you and I ought 
to do is just start a hearing on this request and tell them to 
bring up a carpenter and whoever else it is and go down chapter 
and verse. We know about construction and we know about costs 
and we are going to have to vote for it.
    You get one of these super-duper panels, it is just like 
the super-duper panel of Inman and now we have the one of 
Crowe, and I have seen more waste as a result of it. You go 
down to Costa Rica, which should not have been a problem at 
all, but they have the Crowe protection. They have a $1 million 
wall around the facility down there and an anti-tank trap, and 
they do not have a tank in Costa Rica.
    I have seen us sell off good properties, namely Rio. I 
fought that for 20 years. We have sold off the finest facility 
in the world because, well, the capital is going up to Brasilia 
and so we sell it off. Now we are trying to build a $94 million 
one. And 200 miles further, in Sao Paulo, we are trying to 
build a $103 million one. That is not going to happen.
    So what we really need to do is you and I can set up a 
hearing and get our staff to work on it and we can clear up 
this thing because it is going way beyond these multi-million-
dollar facilities and all the things about the setbacks and 
land. We just sold off Bermuda. We had enough land there to 
take all the facilities that we needed and the residences and 
put them on that fine tract. That Bermuda installation was 
given to us practically, so we sell it and we put the 
representative there now, the consul, in a facility that we pay 
$25,000 a year rent.
    There is no continuity or grasp for policy that anybody 
could support, so I will go along with your commission, but 
that is just passing the buck. We can get at it, because we are 
going to have to vote for it right now.

                              PEACEKEEPING

    Otherwise, let us get to the peacekeeping. Madam Secretary, 
we have nine of them and we are going to add four more; is that 
right? We have peacekeeping at Golan Heights, Lebanon, Iraq, 
Kuwait, Western Sahara, Bosnia-Herzegovina, Cyprus, Haiti, 
Georgia, and Pakistan. We are going to now add Kosovo, Sierra 
Leone, East Timor, and the Congo.
    Two questions. One, there is no peace and otherwise, the 
policy. When I say there is no peace, it is obvious in certain 
places where they talk about peace that there is not any. 
Otherwise, when you get a policy in Kosovo itself, you have a 
request for a permanent facility there, like we are going to 
have partitioned, separate Kosovo. I understand the State 
Department minions heard that Senator Gregg and I were not 
going to approve it, so you have it over in foreign operations. 
A permanent facility, yet you talk of a multi-ethnic society 
under Belgrade.
    So we have a mixed policy and we are sending a signal that 
no, it is not going to be mixed; we are going to have a 
separate Kosovo.
    I could go down the list. Sierra Leone, where we have war 
criminal tribunals up in Bosnia and places of that kind and yet 
we take those who help bring about the revolt and we are trying 
to set them up down there. And when I say no peacekeeping, I 
just got the release here whereby the rebels took nearly 500 
rifles and four armored personnel from the peacekeeping Guinean 
battalion that was on its way to keep the peace.
    I mean this thing is going to get into a national debate 
and we are going to have to have a national policy. It is all 
over the lot, $100 million facilities on Inman or Crowe now. 
And otherwise coming along in Kosovo, I cannot tell what the 
policy is. Could you respond, please?
    Secretary Albright. Yes. First of all, let me just describe 
our Kosovo policy, which is that we won the war, and I think it 
is now important to win the peace, a peace in which the 
Kosovars would have self-government with a great deal of 
autonomy, leaving for later what its final status would be, and 
where there are institutions in which minority rights are 
respected.
    And what is happening through the UNMIK [ed. United Nations 
Mission in Kosovo], the U.N. peacekeeping process, is setting 
up that civilian administration, getting local police trained, 
getting schools set up, election registration, working on joint 
administrative bodies where the Serbs and the Kosovars work 
together.
    No one has worked on this will ever tell you that it is 
easy, but it is necessary. I believe that having stability in 
the Balkans is important for stability in Europe and, 
therefore, for the United States.
    The facility in Pristina is actually in your bill, but it 
is important because we are going to be moving Americans into 
that region to do difficult work for a long period of time.
    I would just like to make the following statement about 
security in the embassies. I know it is a lot of money but I 
had to go to Nairobi and Dar es Salaam and look at buildings 
that were completely destroyed and go and visit families of 
those who had died and go and visit the Kenyans in hospitals as 
a result of that. I think we have a responsibility, if we are 
going to have our people abroad, which I think is a sine qua 
non, that they are in safe and secure buildings.
    Nobody wants to make them gold-plated, and I would welcome 
you going through this, but I think we do need to understand 
that life is different and unfortunately, the beautiful 
embassies that I love that are in the middle of cities are no 
longer safe. That is the problem.
    On the other peacekeeping operations, we are living in a 
world that no longer is in tight blocks the way it was during 
the Cold War. There are conflicts everywhere. Some of them are 
of great importance to the United States because of where they 
are located geographically and some of them are because of the 
horrors that can happen in humanitarian ways. I do not know any 
American who can sit and watch people being macheted to death 
or starving or in a position where they are killing each other.
    And the peacekeeping operations are a great deal for the 
United States. They are in areas where we do not want to do it 
all by ourselves and for 25 percent of the cost, with forces 
primarily from other countries--most of these peacekeeping 
operations do not have Americans in them--I think we get a very 
good bargain.
    I believe the United States cannot turn its back on what is 
happening in Congo or in Sierra Leone or East Timor or Kosovo, 
for that matter.
    Senator Hollings. Thank you, Mr. Chairman.
    Senator Gregg. Senator Mikulski.
    Senator Mikulski. Thank you very much, Mr. Chairman.
    And Madam Secretary, I am going to welcome you to this 
hearing and just say a few--I will submit an opening statement 
for the record but first of all, I am so proud of you, and I am 
so proud of the job that you have done, and I certainly hope 
that the next President retains you as Secretary of State so we 
can continue the foreign policy leadership we have had.
    I will not turn this into a New Hampshire primary but I 
am----
    Senator Gregg. I have been through one. That was more than 
I needed.
    Senator Mikulski. I believe you have brought extraordinary 
competency and experience to your post. You understand the 
elements that transform the world. Most of all, you have put 
American values into action. You have used your communication 
skills here and abroad and you have worked tirelessly to bring 
security and peace to an ever-changing world. So I think we are 
very grateful for what you have done.
    I will not add to the embassy building discussion. I think 
cost is a factor, but so is security. You talk about Nairobi 
and your visits there and where there were the terrible attacks 
on our embassy.
    Many of the Foreign Service officers live in the State of 
Maryland and I am very conscious of their safety. We often say 
a grateful nation will never forget when we hand out our flags 
at those funerals but I feel the way we do not forget is to 
make sure it does not happen again. Make prudent use of 
taxpayer funds but know that the real security needs to be 
maintained.
    Let me go to a couple of questions in my time. First of 
all, I like this pamphlet: ``You Probably Never Think of Us.'' 
This is great. It should go everywhere, and we want to thank 
you for that.

                          WAR CRIMES TRIBUNAL

    I would like to ask a question about the issues related 
to--Senator Hollings raised the peacekeeping issues but I 
wonder if you could share with me something on the war crimes 
tribunal because one of the most important aspects is being 
able to follow up in terms of the U.S. plan to continue to give 
funds to war crimes tribunals.
    Would you share with us your thoughts on that? This is 
something that the women of the Senate have worked with Senator 
Specter and Senator Gregg and Senator Hollings on.
    Secretary Albright. Yes. First of all, I am very proud of 
the fact that when I was Ambassador to the United Nations, we 
were able to set up the war crimes tribunal. Originally it was 
set up for Yugoslavia and then widened to Rwanda. The purpose 
of it really is that in order for there to be reconciliation 
ultimately in any of these countries, it is important that 
individual guilt needs to be assigned so that the collective 
guilt can be erased.
    The tribunals themselves, I think, are operating well in 
terms of the numbers of indictees and people who have stood 
trial.
    I know that the women in the Senate have been very 
interested in this. I had formed this very strong caucus when I 
was ambassador in New York with six other women--we were known 
as the G-7--in New York and we managed to get women judges on 
the war crimes tribunal, one of whom was an American, Gabrielle 
McDonald, because so many of the crimes had been committed 
against women. When rape was finally seen as a crime of war, 
that was a very important step forward.
    So the war crimes tribunals are now working actively. 
Trials are going on. They operate in The Hague and they 
continue to need our funding. I believe they are a very new and 
important part of how the international system works. I will 
get you the exact numbers of indictees.
    Senator Mikulski. Thank you very much. I know this is 
something again that Senator Specter convened some 
conversations with the chief judge of the war crimes tribunal. 
We have really enjoyed the support of the men of the Senate as 
we have really looked at war crimes in a way that really 
reflects the brutality that is done to civilians.

                                 CYPRUS

    I want to ask another question related to policy. This is 
an issue that has been going on for many Presidents, which is 
the Cyprus question. I know when Ambassador Holbrooke took it 
on as a special envoy, we thought his significant muscular 
approach to diplomacy would help resolve this issue. And I 
wonder now--yet there is one more meeting; there is one more 
process, and yet Cyprus remains divided. I wonder what you 
think are, number one, the prospects for a settlement, and 
number two, if there is anything we should be doing to 
encourage and facilitate that.
    Secretary Albright. Well, the Cyprus issue has been with us 
for a long time and one of the peacekeeping operations is the 
one that is there, UNFICYP [United Nations force in Cyprus]. I 
think many of you have been to Cyprus and you have seen the 
island divided by the green line and on one side it looks like 
technicolor and on the other, black and white.
    At the current stage, we have gone back and forth in the 
kinds of talks that are most useful and it turns out sometimes 
muscular diplomacy is not the kind that works; sometimes it 
does. And I think that we are now involved in different kinds 
of talks, which are proximity talks, under the auspices of the 
United Nations--they just finished a set in Geneva. There is 
going to be another set of talks in May in New York. We 
continue to be facilitators in trying to get a comprehensive 
settlement.
    The United Nations and the parties have agreed not to 
engage in any public discussion about the talks and I think 
frankly that is helpful because they are moving forward. We 
support that approach and we are going to keep working with 
both parties in this.
    Senator Mikulski. Do you think we can get this done before 
the end of the Clinton Administration?
    Secretary Albright. I wish, but I cannot make a prediction 
on it because it is one that we all care about a great deal but 
it depends on how these talks go. We wanted to have 1997 be the 
year of Cyprus and this is one of those long-running 
unfortunate conflicts--but we are working hard on this, 
Senator.
    Senator Mikulski. Thank you very much. Madam Secretary, I 
could ask lots of questions. We have a vote. I am going to 
yield back any time I have in the interest of maybe 
accommodating Senator Lautenberg.
    Secretary Albright. Thank you for your kind words, Senator 
Mikulski.
    Senator Gregg. Senator Lautenberg.
    Senator Lautenberg. I, too, want to issue kind words, Madam 
Secretary. I join with Senator Mikulski in expressing my 
admiration for a job extremely well done under very difficult 
circumstances. And it is not your fault, but it seems that the 
portfolio continues to expand, both in magnitude and in 
dispersion. It does not get easier.
    One of the things that I think we are obliged to do is to 
make sure that we take care of the people that we send abroad 
to represent us, and the CJS Subcommittee funds some of the 
most important, and often overlooked, elements of the 
international affairs budget.
    The one thing we have to look at, and I really do respect 
the inquiry of the chairman, in terms of the costs for doing 
these things because I think it ought to be aired. I do not 
know that we can come to a conclusion before we really do an 
in-depth analysis, but I know one thing, that the human values, 
costs for life, the fathers, mothers, brothers, sisters that we 
send to represent us I think is not terribly different than 
those that we send to represent us on the battlefield.
    The one thing we do, and I take great pride in it, is we 
rarely, rarely send our troops anywhere without the 
infrastructure necessary to protect them, even down to the 
nutrition, you name it. And we make mistakes. These are huge, 
complicated exercises. But the intent is always to provide the 
best in terms of security that we can.
    And frankly, I have to tell you something. I do not see it 
much different with diplomatic personnel abroad. When we ask 
people--this is a great personal sacrifice in almost every 
case. People do it. They do it, I think, zealously, fully 
committed to their responsibilities, proud to represent their 
country, but it is a significant personal inconvenience--
separation from families, et cetera.
    And I think the least that we ought to do is make sure that 
we do whatever we can to protect their lives and their well-
being.
    Now, I was recently in Australia and I went through Embassy 
Row there. By the way, if anyone wants to be an ambassador, 
that is one incredible place to have to live. It is a very nice 
embassy facility. But the fact of the matter is that if you 
look at that Embassy Row and you see the countries represented 
there, a lot of these structures are what I would call 
magnificent. And if we want a bare bones American presence in 
places, I think we have to think of the consequences. We are a 
great, powerful Nation in the world but it does not mean that 
we have to throw our money away. And maybe we have to review 
our policies about what kind of companies we bring in to 
construct these facilities.
    Are there still prohibitions, Madam Secretary, against 
native personnel for nonsensitive jobs in our embassies?
    Secretary Albright. Well, we have Foreign Service nationals 
that work in our embassies who are doing a lot of different 
work. In terms of the contracting, I think we have to be 
exceptionally careful, depending upon where we are.
    Senator Lautenberg. But there are no limitations on the 
number of----
    Secretary Albright. Of Foreign Service Nationals----
    Senator Lautenberg. Yes.
    Secretary Albright. No. I mean they are some of our best 
workers.
    Senator Lautenberg. I thought that for some time we were 
really trying to shy away from employing local folk because of 
concerns about security.
    Secretary Albright. It depends on the job and the country.
    Senator Lautenberg. Well, in any event, I hope that we will 
be able, Mr. Chairman, to support these programs. All the 
questions are legitimate about cost but I remember the Moscow 
embassy and the not-so-funny joke that happened there when we 
rebuilt and we rebuilt with the same weaknesses that the 
original facility had and spent a ton of money.
    One cannot deny the threats that come from terrorist 
activity, be it against our embassies in Dar es Salaam or 
Nairobi or against important facilities and structures within 
this country, like in Oklahoma City or the Trade Center. These 
are very real threats and I do not think we dare take them 
lightly.
    So I encourage you, Madam Secretary, to continue to make 
the case as you so skillfully do, and the value of these that 
goes beyond simply and not excluding the dollars and cents side 
of the thing. So I think the case has to be made for the value 
of that impression, that marketing facility, that home, that 
structure that stands as sovereign American territory. I think 
we have to be exceptionally careful there.
    Mr. Chairman, I ask unanimous consent that my full 
statement be included in the record and I would ask simply 
this.
    [The statement follows:]

           Prepared Statement of Senator Frank R. Lautenberg

    Mr. Chairman, thank you for holding this hearing to aid our 
consideration of the fiscal year 2001 budget request for the 
State Department.
    The CJS subcommittee funds some of the most important and 
often overlooked elements of the international affairs budget:
    The costs of personnel and operations for the State 
Department and our embassies and consulates abroad, embassy 
security and construction, contributions to international 
organizations and peacekeeping, exchange programs, 
international broadcasting, and other important organizations 
such as the National Endowment for Democracy.
    The Overseas Presence Advisory Panel, in its excellent 
report, has made a number of important recommendations to 
improve State Department operations. I hope you will be able to 
assure us, Madam Secretary, that you are taking these 
recommendations seriously and will put many into practice.
    America's diplomats are truly our first line of defense, 
helping to shape the global environment, foster positive 
changes, and avert conflicts where possible. We need to ensure 
that our Foreign Service Officers are selected and trained 
well, at every stage of their careers, and have the tools and 
resources they need to function effectively.
    While I may raise questions focused on areas where I 
believe we could do better--like training, personnel 
management, and the effective use of embassy construction 
funds--I want to assure you at the outset that I believe you 
have managed the State Department well and I am inclined to 
support your budget request.
    Mr. Chairman, I look forward to hearing from the Secretary 
and engaging in a thorough consideration of the State 
Department budget request.
    Thank you.

                           KOSOVO AND BOSNIA

    Senator Lautenberg. In Kosovo, as in Bosnia, we just cannot 
seem to establish a multi-ethnic society. The violence between 
the groups is so obvious. I am concerned about escalation or 
resumption of military conflict there.
    Is there anything more you think we can do to help bring 
these people together besides simply providing security 
services?
    Secretary Albright. I will answer but can I just say one 
more thing about the diplomats? I think people have a sense 
that our diplomats are out there in striped pants at 
receptions. Basically, as I travel around, these are very hard-
working people who often live in substandard conditions. When I 
was in Moldova, our ambassador there was washing dishes in the 
bathtub.
    There are some big, fancy places that are great but there 
are an awful lot of places that are not. Our diplomats are the 
first line of defense and I really appreciate your comparing 
them to the military because I think that they deserve that 
kind of comparison and that kind of treatment. I invite people 
to come down and look at our memorial wall in the State 
Department of the number of diplomats that have died in the 
service of our country.
    On the question of Kosovo, first of all, let me talk about 
Bosnia because I think that there, there is movement toward 
increasing multi-ethnic cooperation. The various central 
institutions are working.
    And then as you know, in Croatia, they have just had 
democratic elections and chose a democratic prime minister. The 
fact that they are elected there is going to have an effect on 
Bosnia because President Tudjman supported the Bosnian Croats 
in a separatist way so that they would not be part of the 
federation. What has happened is that President Ejup Ganic and 
Prime Minister Rachanhar are talking about not supporting them 
and encouraging them to be a part of the federation, as well as 
saying that the Serbs that fled out of Croatia would be 
welcomed back. So that itself sends a very important signal.
    In Kosovo, what the civilian administrator is trying to do 
there is to create more and more of the joint kinds of 
administrative councils and start registration for elections so 
that the minorities will be respected in various areas. I think 
the word multi-ethnic is harder to talk about for Kosovo 
because the Serbs are really a minority there, so it is a 
matter of respect for minority rights.
    But I think we have to push on projects where they work 
together or schools where they learn together, and that is the 
purpose of the civilian implementation and for which we are 
asking money in the Kosovo supplemental.
    Senator Lautenberg. I will close with just a reminder. 
Whenever I hear people ask the question, ``Are we to be the 
policemen of the world?'' and ``How long will we have to be 
there?'' it is an obvious but sometimes necessary reminder that 
we are in Japan 50 years later, in Germany 50 years later, 
South Korea, 50 years later, and we are there for a reason. We 
are not there because it is fun to serve in these places that 
far away from home. It is a tough task. But we have an 
interest, a national interest, in making sure that these areas 
remain stable.
    And so it is going to be. If you are a leader, you are a 
leader. And when you have a leadership responsibility, you have 
to fill it in ways that are not always so obvious. And ours, I 
think, is to make sure that the American presence is there to 
say we are going to follow through on our commitments.
    Once again, my commendation, Madam Secretary. You and I are 
in the twilight of our careers here but I just heard Senator 
Mikulski ask you to continue. She may need the permission of 
the next President, but other than that.
    Secretary Albright. Thank you, Senator.
    Senator Domenici. Madam Secretary, it is nice to be with 
you.
    Secretary Albright. And with you, Senator.

                 INTERNATIONAL LAW ENFORCEMENT ACADEMY

    Senator Domenici. I am going to start with a couple of 
parochial issues and then move to a couple of others. First, I 
want to say to you that there is a personal frustration of 
significant magnitude between your Department, the Justice 
Department and this Senator regarding the International Law 
Enforcement Academy, called ILEA. I just want to say, you know, 
we instructed the State Department that that facility should be 
placed at the facility in Roswell, New Mexico.
    I met with Eric Holder for an hour 5 or 6 months ago and 
with people from your shop and they were going to work 
something out. I imagine they were worried about this hearing, 
so within the last couple of days they have sent me a letter. 
The letter, as I see it, did not accomplish much. It certainly 
is not acceptable. But it took 5 months for that letter and 
they are hounding my office for an answer within hours.
    Well, there is no answer other than that is not what we 
intended and that will not work. I do not expect you to tell me 
how it is going to work but I just want to remind you that we 
did struggle up here and we did suggest that it be located 
there in a complex that is surplus for all intents and 
purposes, and rather decent. I believe something has to be 
worked out, and I would just ask you one more time whether you 
and the Justice Department and Eric Holder as their negotiator 
could go back to the table and try to get us something that is 
more acceptable. I hope you would do that and I await your 
answer.
    Secretary Albright. I will try, Senator. They have really 
worked on this and I think that the proposal that they made is 
one that we thought would go toward meeting what you wanted, 
that we intend to train U.S. police for U.N. civilian police 
missions there and anticipate 500 to 700 trainees a year at a 
cost of $3 to $5 million at that place.
    But if this does not meet your----
    Senator Domenici. It does not.
    Secretary Albright. Okay.
    Senator Domenici. I would like very much to consider that 
today you are saying you will try.
    Secretary Albright. I will, sir.
    Senator Domenici. Let me just ask about one more item that 
is parochial with reference to my State and Louisiana and then 
I will move away from that.

                    ANTITERRORISM ASSISTANCE PROGRAM

    I would like to raise an issue with you that is not 
directly under the jurisdiction of this subcommittee, but I 
will not be able to ask you the question elsewhere. It has to 
do with the anti-terrorism assistance program. It has been 
extremely successful in training over 7,000 law enforcement 
security officials from over 40 countries in techniques and 
theories of combatting terrorism.
    Now, to provide the necessary logistical support and 
extensive training and the ranges that go with it, Louisiana 
State University has partnered with their Academy for Law 
Enforcement and with the New Mexico Institute of Mining and 
Technology and their expertise in terrorism. I would like to 
note that the State Department's anti-terrorism assistance 
program has benefited, from what I can tell, substantially from 
the infrastructure investments made by these institutions.
    Now, will the Department of State continue, if this program 
is needed, to take advantage of these sites for training under 
the ATAP program?
    Secretary Albright. I know that we have benefited, sir, but 
I cannot answer the question. I will get back to you on it.
    Senator Domenici. All right. And while we are at it, I will 
pose two others. What is the current training schedule? And 
another one: the subcommittee has not yet received the full 
budget request in the form of budget justification as to what 
is proposed for ATAP in the 2001 budget. I wonder if we could 
have that.
    Secretary Albright. We will get that to you.
    Senator Domenici. Thank you very much.

                   WORLD TRADE ORGANIZATION AND CHINA

    I wanted to ask a question because I have not heard your 
views yet and it is obvious around here that it is the basic 
discussion regarding the WTO [World Trade Organization] and 
China. With the white paper and the rather startling statements 
about the right to use force if necessary to bring about 
reunification in Taiwan, how do you and the President expect 
Congress to delink trade from this threatening behavior?
    Will the administration push a vote on permanent 
normalizing of the relations with China--this is the second 
question--if Europeans have not come to an agreement with 
China? Would you answer the first one first, however?
    Secretary Albright. Sure. First of all, let me--I think we 
have to separate out what it is we are trying to do with China. 
We believe that it is important to engage with them. Even 
though we disagree on a whole host of issues, they are a major 
power not only in the region but increasingly globally, and it 
is essential that we carry on a, as I have called it, a multi-
faceted relationship with them. So for national interest 
reasons, I think it is essential to deal with them.
    For economic reasons, we believe that permanent [Permanent 
Normal Trade Relations] PNTR is important. They have access to 
our market. We want to have access to theirs and we think that 
the WTO deal that was negotiated very painstakingly is good for 
U.S. exports and for our workers and for farm interests. It 
just seems fair that if they can be in our market, we should be 
in theirs.
    We believe that the timing is important to get this done 
early. And the truth is that there will at some stage be a 
European deal and I think that whoever--the way the WTO works, 
you get the best deal if you are a part of it. And we think 
that we have a good deal that the Europeans probably will not 
be able to get beyond, but we should work this on our timing, 
is the sense that I have.
    I know that a lot of people have concerns about the human 
rights issues in China. We have sponsored a resolution in the 
U.N. Human Rights Commission to condemn China and I think that 
that makes our point very clear. I also think that for those 
who care about human rights, the opening to China through trade 
and business is another way to make our points known.
    On the issue of the white paper, I think that we have made 
quite clear that the issues between Taiwan and China have to be 
resolved peacefully. Our concern over what they have said is we 
reject the use of force as far as dealing with that issue and 
we think that the Chinese statement is counterproductive to 
creating the kind of atmosphere which is necessary for cross-
strait dialogue to go forward. We have made that point quite 
clear to the Chinese.
    Senator Domenici. Let me ask, do you think the white paper 
states a position regarding Taiwan and the use of force that is 
different from China's position heretofore?
    Secretary Albright. They have basically said before that 
they want to resolve it, that they do not have a lot of time 
and they have, at various times, made clear that they have not 
given up the use of force.
    I think part of the issue here is the timing of this--it 
was difficult to determine why they did this at this time. We 
see their statement as counterproductive, but we have pressed 
them on the idea that the resolution of this has to be 
peaceful.
    Senator Domenici. I assume you have evaluated the situation 
on the Hill as being more affected by the statements in the 
last white paper regarding Taiwan than any other single issue. 
I think, from what I feel around the Senate, the Senate might 
have a stronger position toward approving PNTR. There are a few 
who would be natural to approving it under their normal trade 
positions that are not doing it, and it is because of the 
Taiwan situation.
    I assume you know that and you know that about the House.
    Secretary Albright. Yes. I think, Senator, the very 
important point here, and I know that it is hard to do, is to 
keep these issues separated. The WTO accession is, we believe, 
something that works in our favor and is worth doing for the 
national and economic interests that I have stated. And it 
brings China into the WTO rule system, allows us to bring trade 
disputes to that mechanism, and it is an advantage to us.
    It does not mean that we are not concerned about Taiwan 
and, as you know, the Taiwan Relations Act does, in fact--we 
have obligations in that, which we will continue. But I think 
for those who are trying to link these subjects, they should be 
looked at separately.
    Senator Domenici. I have a series of questions regarding 
the proposed Counterterrorism and Security Training Center. I 
will just submit those and if you would answer them, I would 
appreciate it.
    Secretary Albright. We shall do that, yes, sir.
    Senator Domenici. And then regarding the year 2000 across-
the-board reduction, albeit small, I have a series of questions 
for you to answer for the record as to what you actually did in 
effecting that across-the-board reduction on projects and 
accounts and I will detail what I would like. I hope you would 
expedite your answers.
    Secretary Albright. We shall do that.
    Senator Domenici. I note the presence of the chairman of 
the full committee and whatever other questions I have, I will 
submit for the record.
    Secretary Albright. Thank you, Senator.
    Senator Stevens. Madam Secretary, thank you very much for 
your courtesy meeting with me on other matters. I just dropped 
by to thank you for that courtesy. I have no questions right 
now.

                          USIA AND ACDA MERGER

    I do think we have some problems because of the merger of 
USIA [United States Information Agency] and ACDA [Arms Control 
and Disarmament Agency] in terms of your Department. I hope we 
can talk about that sometime. It does appear that--let me put 
it this way--it is something I do not want to get into too 
deeply right now but your Department has 18,000 employees, a 
secretary, a deputy secretary, six under secretaries, a 
counselor, 37 assistant secretaries or assistant secretary-
equivalents and 94 deputy assistant secretaries.
    Justice, that has four times the budget and seven times the 
employees, has considerably fewer people on the executive 
supervisory level than you do. I am not saying that we should 
mandate any more than a review of it, but I do think that it 
calls for review to see whether or not that structure that is 
in State now of such a top-heavy senior policy-maker group is 
warranted in view of the consolidation of those agencies with 
yours.
    It is something we should look at and not get into any kind 
of political wrangling about it, I am sure. If you add the 
additional ambassadors-at-large and special representatives, 
coordinators and special advisors to that list, it is a 
considerable number of senior executives in the system, and 
that has a lot to do with the funding problems of your 
Department, we think.
    Secretary Albright. Well, if I might say first of all, on 
USIA and ACDA coming in, it has been remarkably important and 
good because having public diplomacy as a part of our daily 
policy activities has been essential in this world of 
information exchange.
    And in terms of having ACDA inside, I think that as we talk 
about the threats that face this country, proliferation is the 
number one threat to us and I think that having ACDA central to 
the workings of the Department is essential.
    In terms of the numbers, we currently have a review process 
in place for various bureau requests for assistant secretaries 
and deputy assistant secretaries and we have an internal 
process of justification for the reasons that you have 
mentioned.
    But in terms of comparing us to the Justice Department, 
there are now, I think at this moment, 187 countries in the 
United Nations. This is a large world with many countries and 
many subdivisions and we need to have officers that are capable 
of dealing with specific countries.
    I would also state that whereas for 50 years we handled the 
world in terms of the red versus the red, white, and blue, we 
now have many countries that we must deal with individually and 
understand them better and I have a problem, frankly, that we 
often do not have enough Foreign Service officers to do the 
job.
    Then there is another whole thing that is happening. I 
think there are certain countries or certain functions where we 
have been legislated to have a special advisor or we need to 
have a special negotiator.
    So I would agree with you that in looking at charts, it 
looks like a proliferation of top people, but I would be happy 
to justify them with you because I think that we need them 
while going through our own process of review, which we are 
doing.
    Senator Stevens. I am not indicating at all that we are 
going to take any action through this committee, as far as I am 
concerned, but I do think that the management structure of the 
Department is very top-heavy in terms of the division of the 
money that you have available. I know, and we have spoken about 
this, that your Department has not had the increases it should 
have but with that management structure--the money that you do 
have available is going to the top side too much.
    I think you ought to create a process whereby the structure 
is reviewed and some of those positions are eliminated and put 
more people into the process of being Foreign Service officers 
rather than assistant secretaries. Each of those assistant 
secretaries has a separate staff and it becomes a management 
problem, I think, in terms of the money that is available.
    Again, I just raise it from the point of view of an 
examination of the departments covered by this bill. The 
division of money in your Department, the management is 
significantly different than the other two.
    But I wish you bon voyage and success in your trip.
    Secretary Albright. Thank you.

                   EMBASSY SECURITY AND CONSTRUCTION

    Senator Domenici. I have one last question.
    The President's request for embassy security and 
construction is spread out over fiscal year 2000 to fiscal year 
2005 and it totals $4.7 billion. The Crowe Report has a list of 
recommendations and it states that ``The Department should look 
specifically at reducing the number of diplomatic missions by 
establishing regional embassies.'' That is a quote from the 
report.
    While no one, including this Senator certainly, is asking 
you to dramatically cut corners with reference to security for 
our diplomats overseas. I am on your side in terms of that. If 
we are going to err, we ought to err on spending more, rather 
than less. But this report recommends that we reevaluate all 
the embassies that we have worldwide and decide which ones we 
really do need, in light of the suggestions made in the report.
    I would just ask, are there ways to reorganize some of the 
diplomatic efforts? Is that effort moving forward, since the 
receipt of the report?
    Secretary Albright. Yes and no. Let me just say this. We 
have an additional report done by Louis Kaden on overseas 
presence. That report recommends universality of representation 
and the importance of right-sizing missions in every part of 
the world.
    As you know, the embassies serve as platforms for other 
agencies abroad. The right-sizing effort is to try to make sure 
that we have the right mix of people in various embassies. And 
I am working with my Cabinet colleagues to make that happen.
    We also are looking at regional hubs that would be able to 
do a lot of the support work, technology being what it is. As 
Nairobi has been rebuilt, it is rebuilt to be a hub for East 
Africa and we are looking at cost savings in that regard.
    The other innovation that I think is most useful, that 
Ambassador Rohatyn in Paris has come up with, is to have these 
presence posts where there are one or two people; for instance, 
Lyon was the first one he came up with, so that we have some 
representation there for business purposes.
    So we are doing a review of what is the appropriate way to 
represent America in the 21st century.

                            SERVICE DELIVERY

    Senator Domenici. I would just add by way of observation, 
to the extent that your Department is service-oriented and 
there are many things beyond service that you do--service to 
people, service to institutions--the revolution that is 
occurring in the United States and the world in terms of how 
productivity has increased in the delivery of services is 
clearly known by everyone. That is one of the reasons America 
is succeeding with such sustained growth--we have high 
productivity increases in service businesses in America.
    I would just suggest that such an evaluation of the service 
delivery in the State Department might be appropriate, also. It 
may be that we are not moving ahead fast enough with new 
technology, as fast as a major international institution in 
business that has 43 offices and has to serve 26 countries I 
just suggest that we do not want the State Department to lag 
behind in terms of increasing the productivity of your workers 
through innovation.
    Secretary Albright. I thank you for that, though I have had 
some of the most fascinating discussions with people who are in 
the lead in technology, and given the way that our 
appropriations process works and getting new computers and all 
that, there is no way that we can keep up with the private 
sector. It is quite stunning. You know, we just killed our last 
Wang computer a couple of years ago.
    So this is a serious issue and one of the questions that I 
spoke with one of the CEOs of one of these amazing companies is 
whether we should not be leasing things or doing something so 
that we can stay ahead of the curve. But we are trying to use 
it. Our visa systems are automated. We have websites. We do all 
the kinds of things we can.
    Senator Mikulski pointed this out. I hope you will look at 
your book in terms of things that we are doing as a service 
department. Thank you.
    Senator Domenici. Let me just close by saying some of us 
are trying to get 2-year appropriation bills. That would help 
some. For some of the equipment we probably ought to have 5-
year budgets, but we are not going to get there. We will have a 
major argument this year and we might get 2-year appropriation 
bills and 2-year budgets, which I think add a little bit to the 
capacity to be flexible.
    Secretary Albright. Well, we are asking for some advance 
appropriations in the building part because it makes it easier 
for us to have multiple contracts and to try to buy land ahead 
of time and try to take advantage of some of this. That is the 
reason for asking for that. Thank you.
    Senator Domenici. Good luck in your trip.
    Secretary Albright. Thanks a lot.
    Senator Domenici. Thank you, Mr. Chairman.
    Senator Gregg. Thank you, Senator Domenici.
    Actually Senator Domenici and Senator Stevens asked two of 
the questions I was concerned about. So following up on this 
technology issue, we have in this committee tried to improve 
the technology capability of the agency. Maybe you can give us 
an update as to where you think you stand.
    Secretary Albright. Well, I think that we have made major 
progress on this in terms of moving things forward. We are 
working off of the recommendations of the Kaden Report, the 
OPAP [Overseas Presence Advisory Panel] Report, and trying to 
apply knowledge management at overseas posts, use of Internet 
and Internet-like technology, the development of common 
information technology platforms. We continue to work on this. 
We have made progress but we have to make more.
    I can get you--I will get Under Secretary Cohen to provide 
you with some more detailed information.

                                 E-MAIL

    Senator Gregg. What is the status of e-mail in the agency? 
Do you yet have the capacity to communicate with people out in 
the field?
    Secretary Albright. We do, but part of our problems always 
are how do you do this with classified information and how you 
keep classified and unclassified separate.
    Senator Gregg. I understand. Well, we are still very 
interested in making sure you are on the cutting edge of 
technology to the extent you can be. So if you have concerns, 
we need to know about them because I think you will find the 
committee sympathetic.
    Secretary Albright. Thank you.

                                STAFFING

    Senator Gregg. I also want to echo what Senator Stevens 
said about staffing. We looked at this huge chiefs-versus-
Indians situation and it does seem like there is an awful lot 
of chiefs and maybe not enough Indians. You probably need a lot 
more Indians, a lot more folks out there in the field than what 
you have, and a fair amount of the costs are being absorbed by 
the large overhead of the central office.
    Obviously you have responded to that but it remains a 
concern for not only the chairman of the full committee but for 
myself. Do you have anything else you want to say on that?
    Secretary Albright. I know that you have been interested 
particularly in what is purportedly my office, which it really 
is not. The Office of the Secretary, for instance, currently 
has 380 positions but only 17 of them are the ones that are 
affiliated with me specifically. The Office of the Secretary 
has increased by three since 1990.
    So part of what the numbers are that surround the Office of 
the Secretary generally is the Operations Center and the 
Secretariat. Our Operations Center is up 24 hours a day, deals 
with every single problem that the world has to deal with. We 
are getting a letter to you that goes into even greater detail 
on all of this.
    Senator Gregg. You do not see that there would be some 
advantage maybe in reducing senior staff, which as Chairman 
Stevens mentioned, is very high compared to other agencies, in 
exchange for getting more junior staff on board, people out in 
the field?
    Secretary Albright. I think frankly we need both. All I can 
tell you is that the under secretaries--I do not know which one 
you would eliminate and I am asking for a new one or exploring 
the possibility of an under secretary for security, for all the 
obvious reasons.
    And I think if you look at the list in terms of what needs 
to be done, these are people that, given the complexity of the 
issues that now are foreign policy, are highly important. I 
mean we have to deal with the proliferation and technology 
issues. We have to deal with the variety of human rights and 
global issues, such as climate control. We have to deal with 
economics on a daily basis and with political issues. We have 
to manage the department.
    So that is what the top layer is and I think the assistant 
secretaries are then assigned according to functional or 
regional bureaus.
    It is a big world with a lot of problems, and I think we 
have to make sure we have the right mix. And I do go through 
this review. We have a corporate board, so to speak, of the top 
people who are reviewing the issue of the assistant secretaries 
and the deputy assistant secretaries.
    But it is very much on our minds. I mean we are not into 
proliferation of people, but there clearly is a proliferation 
of activities and the number of things that now are part of a 
foreign policy agenda.
    Senator Gregg. That is sort of Parkinson's rule, though, 
right?
    Secretary Albright. But I think that you would not want us, 
for instance, not to be involved in negotiations on open skies 
or on hush kits or biotech food or human rights reports. I mean 
these are all issues that now are foreign policy issues in one 
form or another. We did not ask to have export licenses come 
back to the State Department but now review that on a case by 
case basis. There is a whole host of technical issues that are 
now part of foreign policy, and that takes people.
    Senator Gregg. It is possible, as Senator Mikulski 
suggested, that you may continue to be Secretary of State 
throughout this millennium but assuming you are not and 
assuming you are heading into your last year, I would be 
interested--not now but as you reflect on how the Department 
could be changed, improved, adjusted. I would be interested in 
that, structurally and operationally. It would be very useful 
to us to have that sort of reflection.
    Secretary Albright. I would like to work on that with you. 
I used to say, and I guess it was kind of presumptuous at the 
beginning of my term, to say that I was going to be the last 
Secretary of State of the 20th century. I made that and I 
actually am the first of the 21st.
    I think that what I have been working on very hard with the 
State Department is to create a department that is ready for 
the 21st century. We have gone through a lot of changes. I 
think the reorganization that we did with all of your help has 
been useful and important and we have to keep the process 
going. I mean it is not ever a done deal. So I can assure you 
that we are reviewing it and I will continue to do so.
    Senator Gregg. It was Secretary Daley who said he was the 
longest serving secretary of the 21st century.

                            TAIWAN AND CHINA

    Just one last question for my own personal thoughts and 
background. What do you see happening--and this is nothing to 
do with the operational side--what do you see happening with 
this Taiwan and China situation?
    Secretary Albright. Well, I think that it is obviously one 
that we are watching very carefully, but we have made quite 
clear to the Chinese that we expect the Taiwan situation to be 
resolved peacefully. That has been something that they had 
signed onto and that should not change.
    We have obligations under the Taiwan Relations Act. We will 
obviously continue to carry those out, and in our various 
dealings with the Chinese, which are quite extensive, make very 
clear to them that anything but a peaceful resolution of this 
issue is not acceptable.
    Senator Gregg. Well, recent comments by members of the 
Chinese government appear to be very belligerent toward Taiwan 
and even toward the United States. Do you view them that way?
    Secretary Albright. Well, I think that we have to assess 
the context in which they are being given. We obviously are 
concerned, but some of it has to do with elections in Taiwan, 
some with internal issues in China. China is a country that is 
examining its role in the world. They have had as an agenda to 
get pieces, by getting Hong Kong and Macau.
    Taiwan has been a huge issue to them. It has come up in 
every single discussion I have had with them over the years. 
They are clearly much more aggressive about saying that Taiwan 
is a part of China than they were like 4 years ago. But they 
know that the only acceptable course here is a peaceful 
reunification and it has to be through a peaceful dialogue. We 
have made that point clear.
    Senator Gregg. You do not think they would ever use force?
    Secretary Albright. They know that it would be of the 
gravest consequence to the United States.
    Senator Gregg. Did we miss an opportunity in not agreeing 
to WTO status for them a year and a half ago when the premier 
was here?
    Secretary Albright. I think that there was not an agreement 
at that stage, but there is now, and I think that we would miss 
a huge opportunity if we did not give them permanent trading 
status now because that is the way to make sure that we have 
access to their markets, that they become a part of the 
international rulemaking system.
    And while there was not a deal, we felt, last year, there 
is a very good, painstakingly negotiated deal now, and I hope 
very much that we can get permanent trading status done as soon 
as possible.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Gregg. Well, we appreciate your time, Madam 
Secretary. It is generous of you to come, and we will continue 
to work with you on these issues and enjoy that opportunity.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted by Senator Pete V. Domenici

              INTERNATIONAL LAW ENFORCEMENT ACADEMY (ILEA)

    Question. Are you aware that Congress mandated in last year's 
Foreign Operations bill that the Western Hemisphere ILEA ``shall'' be 
located at Roswell? Are you aware that this is the third year in a row 
that language was included in the Foreign Operations bill?
    Answer. I am aware of the language in the fiscal year 2000 Foreign 
Operations bill directing that the Western Hemisphere ILEA be 
established at Roswell. I am also aware that in the previous years, as 
Congress focused on the future of the deBremmond Training Center and 
location of the Western Hemisphere ILEA, non-binding language on this 
issue was included in the respective Foreign Operations bills and 
reports.
    Question. Does your Department intend to comply with the law? If 
so, when? If not, why not?
    Answer. The Department of State intends to comply fully with the 
law and has taken concrete steps toward that end. INL funded a Treasury 
assessment of remodeling deBremmond, conducted by the Office of Artesia 
Operations (OAO) on January 11, 2000. A comprehensive, although 
preliminary, report of this assessment has been forwarded to Senator 
Domenici's office. The Department currently is engaged in productive 
discussions with members of Congress and their staff regarding Senator 
Domenici's and Congressman Skeen's detailed proposal to establish an 
ILEA for the Western Hemisphere in Roswell which would rely on a 
consortium of academic institutions for technical and administrative 
support. Once an agreement is reached, the Department is prepared to 
begin work on the project immediately.
    Question. Will you examine this alternative proposal, share it with 
your staff and ask them to work with us this year in a timely manner to 
get this problem resolved?
    Answer. Department staff and principals have reviewed your proposal 
and are fully prepared to work hard to get this problem resolved. We 
believe we are in a position to establish the type of academy in 
Roswell you describe in your recent proposal. We look forward to 
hearing from you regarding our proposal to broaden the focus of the 
academy to include worldwide candidates from all ILEAs around the 
globe.
    Question. In concert with the Department of State, Louisiana State 
University (LSU) and the Louisiana State Police Academy (LSPA) have 
used discretionary funds to accomplish estate acquisition and 
construction activities designed to maintain existing facilities, and 
to meet the needs of an expanding ATA program. For example, the State 
of Louisiana has recently purchased 1,400 acres of land at a cost of 
$3.5 million for installation of ranges for the ATA program. It has 
provided land and site preparation funds for the construction of a 
specialized firing range.
    NMT has also invested its discretionary funds in the ATA program. 
It is in the process of a $5 million construction program to provide 
expanded billeting space for ATA participants. It has spent over 
$100,000 to upgrade explosives ranges, and to convert explosive ranges 
to small arms firing ranges. NMT has set aside over 5,000 acres of land 
to be available for ATA as maneuver space for ATA field training. 
Lastly, NMT has made available the extensive explosives ranges operated 
by its Energetic Materials Research and Test Center for use by the ATA 
program.
    The Department of State has also fully supported this cost sharing 
approach, and used its funds to invest heavily in the training 
infrastructure for the ATA program. At the LSPA facilities in the 
vicinity of Baton Rouge, the DOS has invested over $400,000 for the 
construction of a close combat firing facility (``shoot house''), with 
the land and site preparation costs paid for by the State of Louisiana.
    In short, the benefits by use of the Cooperative Agreement between 
the Department of State and the state organizations of Louisiana and 
New Mexico have indeed materialized. The total of the individual 
investments by each party to the ATA training infrastructure has been 
funded in a first rate training complex and training program that could 
not have been funded by a lone participant.
    The State Department Antiterrorism Assistance Program has benefited 
from substantial infrastructure investment made by these host 
institutions. Will the Department of State continue to take advantage 
of these sites for training under the ATAP program?
    Answer. ATA has financed much of the infrastructure improvements 
that have been implemented at these host institutions over more than 
ten years of program training activity. For those not directly 
financed, ATA has indirectly subsidized their construction through 
indirect cost rates and by utilizing improvements made by host 
institutions. The training site of the New Mexico Institute of Mining 
and Technology (NMT) at Socorro, NM will continue to be the exclusive 
site for ATA's presentation of the Rural Border Operations course, 
because it offers a unique rural training environment that cannot be 
replicated in the Washington, D.C. area.
    It should be noted, however, that NMT was already planning to build 
new billeting to support other training programs supported by DOD and 
the international scientific community. ATA will not be the exclusive 
beneficiary of this new construction.
    The purchase of a 1,400 acre site in Louisiana was not meant solely 
for ATA purposes. The existing training facility near Baton Rouge was 
forced to close due to encroachment of residential areas, and a new 
site had to be purchased to replace it.
    Question. What is the current training schedule?
    Answer. The detailed schedule for the balance of calendar 2000 is 
attached.
    [Clerk's Note.--The attachment was not suitable for production in 
the record.]
    Question. The Subcommittee has not yet received the State 
Department's full budget request in the form of the budget 
justification documents. What is proposed for ATAP in the fiscal year 
2001 budget?
    Answer. In fiscal year 2001, the State Department has requested a 
total of $68 million for the Anti-terrorism Assistance (ATA) program: 
$38 million for the training program and $30 million for the Center for 
Anti-terrorism and Security Training.
    Question. What is the ``Counterterrorism and Security Training 
Center?'' Is it an existing, operating facility or a proposed new 
center for the State Department?
    Answer. The Center for Anti-terrorism and Security Training, or 
CAST, is a center to be established in the Washington, D.C. area that 
will bring under one roof the majority of the State Department's Anti-
terrorism Training Assistance (ATA) programs, which train foreign 
officials at 7 different locations throughout the United States. 
Additionally, it could provide facilities at additional expense for the 
Diplomatic Security Services' (DSS) in-service training program, which 
is currently conducted at 5 locations.
    Bringing ATA and DSS training together will improve the interaction 
between DS agents and their foreign counterparts, and it will enhance 
the ability of both groups to protect more effectively U.S. personnel 
and facilities overseas. CAST is not an existing facility. The total 
cost of the CAST, depending on the site selected, will be between $30 
million to $50 million.
    Question. Where is the State Department currently conducting most 
of its training?
    Answer. The State Department provides training for foreign security 
officials in anti-terrorism methods under the Anti-terrorism Training 
Assistance program (ATA) at 7 different locations throughout the United 
States, including Georgia, Louisiana, New Mexico, Virginia, Washington, 
D.C., and Oklahoma. The Diplomatic Security Service trains U.S. 
Diplomatic Security Agents at five different locations in the 
Washington, D.C. area.
    Question. What has changed to drive the relocation of training?
    Answer. Several factors are driving the State Department's effort 
to consolidate its Anti-terrorism Training Assistance program (ATA) 
under one roof at the proposed Center for Antiterrorism and Security 
Training (CAST).
    The proliferation of terrorist groups and their increasing 
operational sophistication means the United States must increase its 
preparedness and capability to combat terrorism abroad. The core 
mission of the ATA program is to train foreign security services in 
securing U.S. personnel and embassies in host countries and in 
protecting Americans living and traveling abroad. This is our first 
line of defense against terrorism overseas.
    To meet these challenges, the State Department needs to increase 
its ATA training program from approximately 2,000 students per year to 
about 3,000 students per year. This increase will require the State 
Department to manage ATA more efficiently and effectively.
    ATA training is conducted at 7 locations throughout the United 
States. The State Department does not have first right use at any of 
the facilities where it conducts ATA training. As a result, some 
countries must wait up to two years to receive training at existing 
locations because training space and facilities are very limited.
    Training space is at or near full capacity at the 7 sites currently 
being used by ATA. DSS cannot accommodate the requirement for adding 
approximately 1,000 ATA students per year with existing facilities. 
Moreover, course costs at many of the current ATA training sites 
include overhead charges and/or tenant fees of up to 20 percent. These 
costs reduce substantially the number of students the Department can 
train each year under the ATA program.
    The Diplomatic Security Service is also stretched to capacity at 
its own in-service training facilities in the Washington D.C. area. The 
State Department therefore proposes to establish CAST in the 
Washington, D.C. area to train most ATA students and to provide DSS 
with facilities for in-service training. Training ATA students and DS 
agents at a centralized facility in the Washington area will result in 
management efficiencies and cost savings.
    CAST also will foster senior-level interaction between foreign 
security officials and U.S. counter-terrorism and law enforcement 
officials located in Washington, D.C. This interaction cannot be 
accomplished while ATA training is dispersed at seven locations 
throughout the United States outside Washington. This interaction 
builds political will and strong working relationships between U.S. and 
foreign security officials, which are crucial to deterring and 
preventing terrorist attacks, and effectively managing terrorist 
incidents.
    ATA students will also benefit from interaction with U.S. law 
enforcement agencies and military units which share responsibilities 
for securing U.S. personnel and embassies overseas. Training ATA 
students at the CAST in the Washington, D.C. area will allow foreign 
security officials to interact with Washington agencies, such as DS 
agents who are responsible for security at U.S. embassies, with Marine 
Corps Security Detachment units which guard U.S. embassies, and with 
other agencies responsible for dealing with terrorist threats abroad.
    Under ATA's current training facility locations ATA students do not 
have the opportunity to interact with U.S. law enforcement agencies, 
who are responsible, like their host-country counterparts, for securing 
U.S. personnel and embassies overseas.
    Question. Can the current providers support more training?
    Answer. Through current arrangements, additional instructors can be 
provided. However current facilities have little remaining capacity.
    The Department of Energy's Nonproliferation and National Security 
Institute (NNSI).--The temporary arrangement with DOE was made to 
alleviate a facility shortfall until a centralized training facility 
can be established.
    NMT, Socorro, NM.--The facilities at this location are adequate for 
current and future requirements.
    Question. Are you absolutely sure the current training provider(s) 
cannot provide more training capacity?
    Answer. Yes. As previously stated, our primary need is to access 
dedicated training facilities to meet our increasing training needs. 
Contractors can provide additional instructors, but existing facilities 
constrain additional training capacity.
    Question. Can you show the proposal will be cost effective by some 
cost comparison/analysis?
    Answer. Because of the combined redundancy of administrative and 
logistical support resources at the existing training facilities, it 
will be more cost effective to provide these functions at a centralized 
facility. Additionally, the maintenance and operation of a single 
facility (such as utilities, custodial, and overhead), will be more 
efficient with a consolidated facility.
    Question. Do the current site(s) have the capability to conduct 
training January-December?
    Answer. Yes, the current sites have the capability to conduct 
training year round, weather permitting.
    Question. Can the proposed site conduct training January-December?
    Answer. Yes, the proposed site will be able to conduct year-round 
training.
    Question. Have your existing training providers failed to provide 
training because of inclement weather or some other reason?
    Answer. Weather can be a problem for all locations. In our 
experience, there have been rare occasions where training has had to be 
suspended or delayed.
    Question. What is the current community infrastructure support for 
the training program i.e. community welcome, social activities, local 
community organization support, police agencies support, shopping and 
entertainment activities? Compare this with your proposed site. Can you 
assure us that community support will be enhanced by the relocation?
    Answer. ATA has experienced outstanding community support at all 
training locations. Initial contacts with the state and local community 
at the consolidated sites under consideration indicate that they are 
prepared to provide a quality support environment.
    Question. Who currently provides instruction for your courses? Who 
will provide instruction at the proposed consolidated training center? 
Are you adding Full Time Equivalents (FTEs) for the consolidation 
proposal? What will you do if the program receives funding cuts in 
three or four years?
    Answer. With the exception of the official government agencies, all 
training is conducted by contractors. No change is contemplated for the 
consolidated training center.
    Question. Can you compare salaries of support personnel for Baton 
Rouge and Socorro as compared to your proposed location?
    Answer. The majority of ATA costs for support personnel at Baton 
Rouge, LA and at Socorro, NM are based on existing contractor 
arrangements. The proposed Washington location will be supported by a 
combination of existing direct-hire Department of State employees and 
contractors. By centralizing the ATA program in the Washington area, 
the State Department will gain cost savings by eliminating the need for 
some contractor personnel and by consolidating the duties of other 
personnel. Centralization will also allow ATA to gain cost savings by 
eliminating redundant administrative costs that are the result of 
operating 7 centers nation-wide.
    Question. We understand that the Department of Justice has a 
program at Fort McClellan. Using that as a model, have you done any 
cost comparisons for your proposed site versus the existing sites? I 
would think that the bottom line for this subcommittee is to get the 
training, not just new infrastructure to maintain.
    Answer. Cost comparisons have been prepared for the Fort McClellan 
Justice Training Center ($17.9 million) and Indian Head ($23.2 
million). This comparison was conducted for training start-up costs 
only and excluded infrastructure repair costs. The Fort McClellan 
Justice Training Center (JTC) will require additional investment in 
infrastructure, which includes repair of water, plumbing, and 
electricity systems, as well as asbestos abatement and renovation of 
classrooms and dormitories. Additional capital construction costs are 
required for specialized training facilities.
    Fort McClellan's distance from Washington would prohibit 
utilization by the Diplomatic Security Service and other agencies, who 
intend to co-locate their training programs with ATA. ATA could conduct 
training at the JTC, but ATA capacity and effectiveness would be 
diminished.
    Question. In last year's Consolidated Appropriations Act for Fiscal 
Year 2000 (Public Law 106-113), the President and the Congress agreed 
to an across-the-board reduction of 0.38 percent in discretionary 
programs as part of an effort to ensure that spending in fiscal year 
2000 did not dip into the Social Security surplus. We were successful 
in that effort, but in the process the Department of State had to 
reduce program spending by $25.4 million in fiscal year 2000.
    It appears from the Administration's report on the implementation 
of the across-the-board reduction that most offices and programs within 
the Department took a part of the reduction with 60 percent coming from 
two accounts--Diplomatic and Consular programs (-$10.6 million) and the 
Contributions to International Organizations (-$4.7 million). Another 
$2.8 million was taken out of Embassy Security, Construction, and 
Maintenance.
    Madame Secretary, would you please provide the Subcommittee with 
the program, project, and activity details underlying the across-the-
board reductions in each program?
    Answer. The International Affairs budget absorbed a total 
rescission of $86 million, approximately $72 million of which was cut 
from accounts under my direct purview, including both foreign 
assistance and State Department operations. Because all of the programs 
in the International Affairs budget urgently need funding, the 0.38 
percent rescission was applied equitably to most accounts. There are a 
few exceptions where accounts/programs had been a critical part of the 
final negotiations between the White House and Congress on 
appropriations bills. These programs were exempted or protected, with 
cuts made elsewhere within an account to permit this. Those exemptions 
include: Funding for Wye implementation; U.N. arrears; Funding for 
embassy security within the buildings and State operations accounts; 
and Population funding.
    The following table reflects the distribution of the across-the-
board rescission:

                          [Dollars in millions]
------------------------------------------------------------------------
                                                    Fiscal
                                                     Year
                     ACCOUNT                         2000    Rescission
                                                   Enacted
                                                    Level
------------------------------------------------------------------------
International Organizations & Programs (IO&P)....  $183.00         0.70
Development Assistance/Child Survival/DFA........  1,943.0         8.29
                                                     0
AID Credit Programs..............................  8.50            0.01
AID Operating Expenses...........................  520.00          1.04
Inspector General (USAID)........................  25.00           0.05
Freedom Support Act (FSANIS).....................  839.00          3.19
International Disaster Assistance................  202.88          0.87
Support for Eastern European Democracy (SEED)....  535.00          2.03
Voluntary Peacekeeping Operations (PKO)..........  153.00          0.58
Economic Support Fund (ESF)......................  2,815.1        22.91
                                                     0
International Military Education & Training        50.00           0.19
 (IMET)..........................................
Foreign Military Financing (FMF).................  4,795.0         6.01
                                                     0
Nonproliferation, Anti-Terrorism, Demining &       216.60          0.82
 Related Programs (NADR).........................
Inter-American/African Foundations (appropriated   [19.40]         [.07]
 in DA)..........................................
Migration and Refugee Assistance & ERMA..........  637.50          2.42
International Narcotics and Crime................  305.00          1.16
State Programs...................................  2,903.8        10.92
                                                     3
Educational & Cultural Exchanges.................  205.00          0.85
Other State Programs.............................  63.52           0.26
Security & Maintenance of U.S. Missions..........  742.18          2.82
Contributions for International Peacekeeping       500.00          1.90
 Activities......................................
Contributions to International Organizations.....  885.20          4.70
U.N. Arrearage Payments..........................  351.00   ............
Related Appropriations (e.g., Asia Foundation,     54.38           0.23
 NED)............................................
                                                  ----------------------
      Total, Fiscal Year 2000 Appropriations.....  18,934   ............
      Total Rescission...........................  71.95          71.95
------------------------------------------------------------------------

    Question. What was the maximum reduction taken from any program, 
project or activity?
    Answer. Generally, the 0.38 percent cut was applied equitably to 
most accounts. In order to accommodate the few exempted accounts/
programs, such as Wye implementation and U.N. arrears, cuts were made 
to other programs within an account to permit this, with no account 
sustaining more than a 0.81 percent cut.
    Question. Did the Department follow the provisions of the 
Consolidated Appropriations Act that no program, project, or activity 
could be reduced by more than 15 percent?
    Answer. Yes. The rescission was applied to the overall account 
level, with no account absorbing more than a 0.81 percent cut. There 
were a few exceptions where accounts/programs were exempted or 
protected, with cuts made to other programs within an account to permit 
this. Those exemptions include: Funding for Wye Implementation; U.N. 
arrears; Funding for embassy security within the buildings and State 
operations accounts; and Population funding.
    Question. Did the Department follow the guidance of OMB that: 
reductions should be taken from the least critical funding available to 
the agency; reductions should be considered from funding above the 
President's request; no reductions should be taken that would require 
reductions-in-force (RIFs); and agencies should make targeted 
recommendations rather than across-the-board funding cuts?
    Answer. I took OMB's guidance under consideration when I decided 
how to distribute the rescission. But I did not follow every aspect of 
the guidance.
    First, I do not know of any budget accounts I would call ``least 
critical.'' All of our funding is urgently needed for pursuing a host 
of American interests, from fighting narcotraffickers to immunizing 
children, to negotiating trade agreements to benefit U.S. business.
    Second, the overall appropriation for Function 150 was less than 
the President's request. Moreover, only a very few accounts were 
increased over the President's request, and these were in areas such as 
assistance to Southeast Europe, or counternarcotics assistance, where 
funding was needed.
    For this reason, the 0.38 percent rescission was applied equitably 
to most accounts under my direct purview, including both foreign 
assistance and State Department operations. In accordance with OMB's 
guidance, we took steps to ensure that reductions in operating accounts 
would not result in RIFs of Department personnel.
    There are a few exceptions where accounts/programs were exempted or 
protected, with cuts made elsewhere within an account to permit this. 
Those exemptions include funding for Wye implementation; U.N. arrears; 
funding for embassy security within the buildings and State operations 
accounts; and population funding.

                        CHINA AND WTO MEMBERSHIP

    Question. How do you and President Clinton expect the Congress to 
delink trade from China's threatening behavior in the world?
    Answer. We cannot predict China's future behavior, but deciding in 
advance that China will inevitably be a foe is a prescription for a 
self-fulfilling prophecy. Alternatively, China's integration into 
rules-based institutions of the international community, such as the 
WTO, make it more likely that China will become a responsible member of 
the international community and play a constructive international role 
in the future.
    We appreciate the concern that many members of Congress have with 
regard to China's intentions toward Taiwan. Senior Administration 
officials, in Washington and Beijing, have reinforced our abiding 
interest in the peaceful resolution of cross-Strait differences. We 
have said that we reject the use of force or the threat of the use of 
force to resolve the Taiwan question. We have stated again our policy 
in the Taiwan Relations Act that we ``consider any effort to determine 
the future of Taiwan by other than peaceful means . . . A threat to the 
peace and security of the Western Pacific area and of grave concern to 
the United States.'' We have urged China and Taiwan to take steps that 
foster dialogue, reduce tensions and promote mutual understanding. It 
is obvious that any aggressive military move by China would have a 
devastating impact on U.S.-China trade and economic relations, in 
addition to any other consequences.
    We have also restored direct dialogue between our two militaries to 
promote better understanding of our intentions. In December, the Deputy 
Chief of China's People's Liberation Army General Staff was in 
Washington for defense consultative talks. In early March, CINCPAC 
Commander Admiral Blair visited China. We want to use the military-to-
military dialogue to ensure that there are no misperceptions of our 
intentions or our capabilities.
    We believe that we must engage with China on important issues of 
both economic security and national security. In that regard, China's 
accession to the WTO--one-way concessions opening China's markets to 
America's farmers, businesspeople and service providers--will be a 
positive development reinforcing our economic prosperity.
    Specifically, with regard to PNTR, the President submitted a bill 
to Congress on March 8 to extend normal trade relations to China on a 
permanent basis. The President will certify that when China becomes a 
WTO contracting party, ``the terms and conditions of China's accession 
to the WTO are at least equivalent to those agreed between the United 
States and China on November 15, 1999.'' We are confident that when the 
bill is considered on its merits, Congress and the American people will 
realize that it is in the interest of the United States to pass PNTR. 
Only in this way will we be able to enjoy the full benefits of China's 
accession to the WTO.
    Our broad agenda in China is designed to pursue American interests 
and to effect change there. Trade and the WTO--along with our resolute 
across-the-board engagement to ensure American security--will help 
reinforce trends toward a more open society in China.
    Question. Will the Administration push a vote on permanent normal 
trading status for China if the Europeans have not come to an agreement 
with China over its WTO membership.
    Answer. The President has stated his intention to work with the 
Congress to extend permanent normal trading status to China as soon as 
possible. The President submitted a bill to Congress on March 8 to 
extend PNTR and said he would certify that when China becomes a WTO 
contracting party, ``the terms and conditions of China's accession to 
the WTO are at least equivalent to those agreed to between the United 
States and China on November 15, 1999.'' Whatever final report is sent 
by the China Working Party Group to the WTO Council in Geneva later 
this year will therefore only improve our excellent bilateral 
agreement, which was made public on March 14. Thus, we believe when the 
bill is considered on its merits, the Congress and the American people 
will realize that it is in the interest of the United States to pass 
PNTR. Only in this way will we be able to enjoy the full benefits of 
China's accession to the WTO.
                            EMBASSY SECURITY
    Question. The President's request for Embassy Security and 
Construction is spread out over the 2000 to 2005 period and totals $4.7 
billion.
    The Crowe Report, in its list of recommendations, states ``The 
Department should look specifically at reducing the number of 
diplomatic missions by establishing regional embassies.''
    While no one is asking you to cut corners on providing security to 
our diplomatic overseas, this report clearly recommends reevaluating 
all embassies and facilities we have world wide and decide which ones 
we need.
    Are there ways to regionalize some of our diplomatic efforts?
    Answer. As a follow-on to the Accountability Review Boards chaired 
by Admiral Crowe, the Overseas Presence Advisory Panel (OPAP)--of which 
Admiral Crowe was also a member--looked at the possibility of a greater 
use of regional embassies. OPAP, however, did not itself make a 
specific recommendation on regional embassies. Instead, the panel 
concluded that ``a universal, on-the-ground overseas presence is more 
critical than ever to the nation's well-being.''
    The Department of State strongly concurs with that conclusion. As 
OPAP confirmed, policy functions are best carried out through face-to-
face interaction. We believe it is critical to retain the general 
principle of universality, except in limited circumstances.
    The Department continues to pursue the regionalization of support 
functions either overseas (e.g., the Frankfurt Regional Support Center) 
or in the United States (e.g., the Fort Lauderdale Regional Center, the 
Portsmouth National Visa Center, the Williamsburg Diversity Lottery 
Center, and the Charleston Financial Service Center).
    Question. I have been a proponent of changing our budget process in 
Washington so that we move to a two-year budget cycle. My hopes would 
be that we could concentrate more in the off-year on oversight 
activities, something that seems to be lacking as we devote more and 
more time to the appropriations process.
    How do you think biennial budgeting would affect the State 
Department and the spending and operations of the foreign affairs 
apparatus?
    Answer. I am open to exploring the adoption of biennial budgeting 
practices, and it may yield some benefits for the Department. On the 
plus side, we would gain a better sense of how much money would be 
available over a longer period of time (24 months) for managing the 
Department and our posts abroad. This would likely benefit our planning 
and management efforts.
    However, biennial budgeting would not remove the need for mid-year 
supplementals in order to respond to unanticipated contingencies. 
Supplemental requests and budget amendments have become a fact of life 
in the international affairs area, where we have very little 
contingency funding to respond to emergency opportunities and threats.
    I am more concerned about the level of resources we are 
appropriated rather than changes in the timing of when funds are 
appropriated. The biennial concept will not work unless we seek and are 
appropriated adequate and realistic funding levels for the work we know 
we must do.
                                 ______
                                 
         Questions Submitted by Senator Ben Nighthorse Campbell

            INTERNATIONAL EDUCATION AND CULTURAL EXCHANGE

    Question. The fiscal year 2001 budget proposed only $3.1 million 
for overseas advising. The fiscal year 1999 appropriated amount was 
$3.2 million, and the fiscal year 2000 estimate was only $3.07 million. 
Overseas educational advising is a network of USIA-supported offices 
where prospective foreign students interested in American higher 
education can secure information about pursuing educational 
opportunities in the United States. These centers are important 
elements of public diplomacy as they serve as gateways for ensuring a 
continued flow of students to the United States.
    As you know, other countries are competing aggressively to attract 
international students to their universities, and last year, Prime 
Minister Tony Blair made an official statement highlighting the U.K.'s 
plan to capture a larger share of the foreign student market.
    Given our nation's interest in maintaining its leading role in 
attracting foreign students to our universities and institutions, can 
you tell us why State Department-supported overseas advising centers, 
which serve as gateways for ensuring the flow of foreign students to 
the United States, are provided with only level funding?
    Answer. We share the view that overseas advising centers make a 
critical contribution by encouraging students from other countries--
often destined to become the future leaders of their countries--to 
undertake university studies in the United States. These students 
represent a major source of income to the United States; according to 
the most recent U.S. Department of Commerce figures, education is the 
fifth largest U.S. service export amounting to more than $8 billion and 
resulting in over 100,000 U.S. jobs. Even more importantly, the 
experiences of these students while they are in the United States 
inform their understanding of our country, our society, our culture, 
and our policies for the rest of their lives.
    The Administration has attached high priority to educational 
advising, and to international exchange programs in general, as a tool 
in support of the Department's conduct of international relations. 
However, with very limited resources for all international relations 
activities, we have had to set priorities. The Administration's fiscal 
year 2001 request for overseas educational advising activities will 
enable us to sustain these programs at their current levels. We hope in 
the future to have adequate resources for all of these important 
programs.
                            MIAS AND ISRAEL

    Question. Can you please provide me an update of how these efforts 
to assist Israel are proceeding?
    Answer. The United States continues to pursue every serious lead to 
ascertain the fate of IDF MIAs Zachary Baumel, Yehuda Katz and Zvi 
Feldman.
    We deeply sympathize with the pain of all the families of the 
missing soldiers and with their determination to continue the search 
for their sons. We will continue our efforts to help them.
    We are in close contact with the Israeli Government and the 
families of the MIAs to help resolve this important issue. The 
President and I have raised this issue repeatedly with officials at the 
highest levels in Syria and with senior Palestinian officials.

                        DEVELOPMENTS IN BELARUS

    Question. I remain concerned over violations of the principles of 
democracy, human rights, and the rule of law in Belarus under the 
authoritarian leadership of Aleksandr Lukashenka. The opposition in 
Belarus deserves our support as they seek to overcome the legacy of 
Communism and authoritarianism and build a democratic society. In a 
particularly disturbing development, several prominent opposition 
leaders have simply disappeared.
    Lukashenka has undertaken a series of measures designed to suppress 
Belarus's opposition. Peaceful public protests and demonstrations have 
been broken up by the authorities and independent opposition newspapers 
are under constant pressure from the government.
    Of the resources available for the NIS countries, why has the 
Department allocated so little to support those programs aimed at 
strengthening independent media, human rights, civil society, 
independent trade unions and the democratic opposition in Belarus?
    Are there funds from regional programs that the Department could 
make available this year for these purposes?
    Answer. The Administration places a high priority on democracy-
building assistance to Belarus. In fiscal year 1999, over two-thirds of 
the U.S. Government's $12.36 million Belarus assistance budget was 
devoted to such programs--over $8 million. A substantial portion of 
this assistance was provided in the form of small grants directly to 
non-governmental organizations (NGOs), independent media outlets and 
other democratically oriented organizations. The remainder supported 
capacity-building training and exchange programs in areas such as NGO 
development, political party-building and independent media.
    For fiscal year 2000, the U.S. Government's democratic and economic 
reform programs for the NIS have had to take an overall cut of $120 
million due to the under-funding of the Administration's NIS assistance 
request by 19 percent, increased earmarks, and substantial funding 
being provided for the Expanded Threat Reduction Initiative (ETRI). As 
a result, the U.S. Government's Belarus assistance budget is expected 
to decrease by approximately $4.7 million. However, we are working 
closely with U.S. NGOs and other donors to ensure that independent 
media and other advocates for democratic change in Belarus continue to 
receive the support that they so urgently need. In addition, the State 
Department's Bureau of Democracy, Human Rights and Labor is in the 
process of identifying a limited amount of its own funding from its 
Human Rights and Democracy Fund for use in Belarus.

                       ANTI-CORRUPTION INITIATIVE

    Question. Has the Department developed a strategy for advancing an 
anti-corruption initiative within the OSCE? Is the Department working 
with representatives of the business community and other interested 
NGOs to gain support for such an initiative?
    Answer. Yes, the Department has developed a strategy to advance an 
anticorruption initiative in the OSCE. The Istanbul Summit, at U.S. 
initiative, directed the Permanent Council to consider how the OSCE can 
contribute to this issue. On March 3, a strong U.S. interagency team 
gave a comprehensive presentation on the results of Vice President 
Gore's February 1999 Global Forum on Fighting Corruption to a working 
group established by the Permanent Council for this purpose. We are 
working with the present and prospective Chairmen-in-Office to assure 
that corruption issues are fully and appropriately examined in OSCE 
seminars, meetings and its Economic Forum. The Department of Commerce 
is participating actively in this initiative, and we are consulting 
with interested NGOs. A member of the board of the U.S. national 
section of Transparency International was a public member of our 
delegation to the 1999 OSCE Review Conference. Corruption is 
increasingly recognized as a significant challenge to the core purposes 
of the OSCE, and helping members to control and combat corruption is 
becoming an important continuing element of OSCE activities.
    Question. Is the U.S. working closely with the Romanian Government 
to advance an anti-corruption initiative within the OSCE framework?
    Answer. Yes. On March 28-29, Romania will host a regional forum on 
fighting corruption to be attended by 15 governments from Central, East 
and Southeast Europe. All are OSCE members, and we expect their 
regional meeting will help advance attention to corruption in the OSCE. 
The U.S. provided some funds to help Romania meet costs of this 
conference. A strong interagency working-level U.S. team will travel to 
Bucharest to observe this meeting, and Vice President Gore is sending a 
message of support. This meeting follows the February 1999 Washington 
Global Forum on Fighting Corruption, and will help prepare for the 
Second Global Forum in the Netherlands in May 2001, which the U.S. will 
cosponsor. Romania also participates in the Anti-Corruption Initiative 
of the Stability Pact, to whose development the U.S. contributed. Our 
bilateral assistance programs include significant anticorruption 
activities. As the prospective OSCE Chairman-in-Office for 2001, 
Romania has indicated that it will actively promote OSCE attention to 
problems of corruption. We will continue to consult closely with and 
support these OSCE activities on this subject.
    Question. The FBI has played an important role in promoting 
cooperation among the countries of southeastern Europe in combating 
organized crime. This is a matter that has direct implications for law 
enforcement here in the United States given the extensive network of 
organized criminal elements, including those located in that region and 
elsewhere in the OSCE region. How is the Department supporting the 
Bureau's international operations, including those in southwestern 
Europe as well as the International Law Enforcement Academy in 
Budapest?
    Answer. The FBI, at State Department request, has participated in 
U.S. interagency and international assessments of organized criminal 
activity in Bosnia and Kosovo. Such assessments add to available 
information needed to address organized crime and its effect on the 
United States. The FBI has been very supportive of our foreign policy 
goals in the region and has provided expertise in crime scenes, 
forensics, and organized crime to assist special investigations in 
Bosnia and Kosovo.
    The FBI serves as the lead U.S. agency at the International Law 
Enforcement Academy (ILEA) in Budapest and provides a special agent as 
the resident director. Since opening its doors in 1995, ILEA Budapest 
has trained over 4,500 criminal justice professionals and law 
enforcement officers from 26 countries. In addition to providing 
funding, the Department coordinate support to ILEA Budapest through an 
interagency steering group, composed of representatives from the 
Departments of State, Justice, and Treasury, to provide policy guidance 
and set program priorities. ILEA is funded by the State Department.

                             OSCE MISSIONS

    Question. Has the Department developed a strategy for closing down 
OSCE missions or are these activities turning into permanent outposts 
of the OSCE?
    Answer. The Department has introduced a proposal at the OSCE to 
establish a procedure for the orderly transformation and termination of 
missions. The OSCE Mission mandates are reviewed for extension by the 
Permanent Council every six months on average. Our goal is to focus 
attention on the review process, formalize the discussion, and ensure 
that participating States carefully evaluate whether conditions in the 
host country have improved sufficiently to warrant a change in Mission 
size or its mandate.
    In June 1999 the OSCE Mission to Ukraine was closed and replaced 
with a smaller project coordination center. More recently, the OSCE's 
Skrunda Radar project, which had successfully overseen closure of a 
highly sensitive former Soviet military installation in Latvia, was 
shut down in December 1999. The OSCE also reached consensus in March 
2000 on reducing the staffing level for the Croatia Mission from 250 to 
225, with additional reductions anticipated when further improvements 
are noted. This action was in direct response to positive declarations 
and tangible actions taken by the new Croatian government in improving 
refugee returns and expediting citizenship claims. The U.S. is now 
exploring how the OSCE can acknowledge progress made by the Baltic 
States in meeting their OSCE commitments.
    Question. Nearly a decade after the OSCE Mission to Estonia opened, 
what, if any aspects for the Mission's mandate have not been fulfilled?
    Answer. The mandate of the OSCE Mission in Estonia calls for the 
promotion of integration and better understanding between the 
communities in Estonia. The primary focus of the Mission is to evaluate 
the inclusion of the sizeable Russian-speaking minority in terms of 
citizenship, language usage, social services and employment.
    The Government of Estonia has made considerable progress in 
promoting the social integration of the Russian-speaking minority. It 
has fulfilled the thirty recommendations made by the OSCE High 
Commissioner for National Minorities, although implementing legislation 
remains outstanding in several areas, including language. A national 
social integration program has been developed but not yet promulgated. 
We believe a continued OSCE presence is required, in a modified form 
and for a limited time, to monitor implementation of these remaining 
issues, and to ensure an accurate, objective assessment of the process 
of social integration, which affects regional stability.

                  INTERNATIONAL POLICE FORCE IN KOSOVO

    Question. Are our European allies providing their share of 
resources and personnel to accomplish these and similar tasks in 
Kosovo?
    Answer. Our European partners are providing substantial 
contributions to the U.N. International Police forces.
    According to the U.N., as of March 23, European members of OSCE had 
pledged 1,645 officers (38.7 percent of the total number pledged) of 
which 1,145 had already been deployed (42.5 percent of the forces 
deployed).
    To address the lack of judges, UNMIK promulgated a regulation 2000/
6, which authorizes the appointment of international judges and 
prosecutors. UNMIK is now in the process of appointing a small number 
of international judges and prosecutors. Foreign contributions in this 
area will remain limited, as the legal experts sought need to have a 
basic knowledge of FRY law and FRY legal procedures.
    As of March 22, only two international judicial personnel were 
acting in Kosovo (one American and one Swede).
    We have urged our European partners to deploy their force more 
quickly and to consider additional support for police and judicial 
system.
    Question. Can you provide the Committee with a breakdown of 
commitments of personnel and resources for Kosovo operations by each 
NATO country and those actually provided?
    Answer. Attached is a chart describing pledges and commitments of 
NATO countries as of March 23.
    This chart is based on data provided by the U.N., which change 
quite often.

         CONTRIBUTIONS TO UNIP/KOSOVO \1\ FOR NATO MEMBER STATES
------------------------------------------------------------------------
                                                              Pledge of
            Countries                 Pledge      Current      Special
                                                  Strength    Police \1\
------------------------------------------------------------------------
Belgium..........................            5            5  ...........
Canada...........................          100           92  ...........
Czech Rep........................            6            6  ...........
Denmark..........................           20           26  ...........
France...........................           78           78  ...........
Germany..........................          420          268  ...........
Greece...........................           15  ...........  ...........
Hungary..........................           10           10  ...........
Iceland..........................            2            2  ...........
Italy............................           82           45  ...........
Luxembourg.......................  ...........  ...........  ...........
Netherlands......................           50            1  ...........
Norway...........................           25           15  ...........
Poland...........................           25            9          115
Portugal.........................           70           25  ...........
Spain............................           41           35          115
Turkey...........................           29           49  ...........
UK...............................           60           60  ...........
US...............................          550          489  ...........
------------------------------------------------------------------------
\1\ Total authorized UNIP forces is 4,718 of which 3,593 CIVP0L and
  1,225 Special Police.

              UNITED STATES-EUROPEAN UNION HUSHKIT DISPUTE

    Question. In April 1999, the European Union passed legislation that 
would introduce a number of restrictions on the use of aircraft 
equipped with ``hushkit'' noise reduction devices within the EU. This 
regulation raises several major areas of concern for the U.S.--
primarily that this initiative will undermine the International Civil 
Aviation Organizations's (ICAO) role as the premier standard-setting 
body for aviation technical and environmental matters, and that the 
proposed regulation is based on a design standard, which discriminates 
against U.S. manufacturers while it protects European aircraft.
    For over two years the U.S. has taken every possible step to 
express our concerns over this new rule, to no avail. Although they 
have agreed to delay implementation, the EU has refused to withdraw the 
regulation. Negotiations have reached an impasse.
    Are you considering an Article 84 relief petition at ICAO to 
counter unfair EU restrictions on the use of ``hushkits'' for U.S. 
civil aviation? Have you informed the EU? Where does this stand?
    Answer. Negotiations with the EU have reached an impasse. 
Therefore, the USG decided to initiate a proceeding against European 
Union member states under Article 84 of the 1944 Convention on 
International Civil Aviation (the Chicago Convention) to establish that 
the hushkit regulation violates the Convention, and to force its 
withdrawal. We filed our case with ICAO on March 14.
    We have stated to the EU and to ICAO that we are prepared to agree 
to a suspension of the Article 84 proceedings if the EU suspends 
implementation of the hushkit regulation. We are awaiting the EU's 
response.
    Our goal in filing the Article 84 case was to bring this issue back 
under the purview of ICAO, where it belongs. Noise standards should be 
negotiated multilaterally, and ICAO is the internationally recognized 
standard setting body for aviation technical and environmental matters.
    We are committed to the development of new noise standards within 
the ICAO framework and are prepared to work with the EU and other ICAO 
member states to ensure their implementation.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

                            LIBYA/PAN AM 103

    Question. Recent press reports suggest the Administration is 
considering easing U.S. sanctions against Libya. Would you agree that 
U.S. sanctions should not be eased until and unless Libya has met all 
the conditions set out in the U.N. resolution for lifting of sanctions, 
including payment?
    Answer. Consistent with U.N. Security Council resolution 1192, U.N. 
sanctions against Libya were suspended immediately upon notification by 
the U.N. Secretary General to the Security Council that the Lockerbie 
bombing suspects had arrived in the Netherlands for the purpose of 
trial before a Scottish Court in the Netherlands. Pursuant to UNSC 
Resolutions 731, 748, 883 and 1192, there are other issues that must be 
addressed before U.N. sanctions can be permanently lifted. They are: 
payment of appropriate compensation; Libyan acceptance of 
responsibility for the actions of its officials; renunciation of 
support for terrorism; and cooperation with the investigation and the 
trial.
    Along with other UNSC members, we will address the question of 
lifting U.N. sanctions in accordance with the relevant Security Council 
resolutions. Permanent lifting of the sanctions would require action by 
the Council. We believe the Libyan government can and must meet the 
requirements provided for in the relevant UNSC resolutions. If it does 
so, we would support lifting U.N. sanctions.
    U.S. unilateral sanctions are distinct from U.N. sanctions and, in 
fact, pre-date the Lockerbie bombing. They were imposed in 1986 by 
executive order under the International Emergency Economic Powers Act 
in response to an unusual and extraordinary threat to the national 
security and foreign policy of the United States posed by the policies 
and actions of the Libyan Government.
    We are not currently considering lifting U.S. unilateral sanctions. 
In order to do so, we would insist, first, that Libya comply with U.N. 
Security Council requirements, including the compensation requirement. 
In addition, we would expect Libya to cease opposition to the Middle 
East Peace Process, which would be concrete evidence that it has ended 
its support for Palestinian rejectionist groups, and stop aggravating 
African regional conflicts.
    Given Libya's history of support for terrorist activities and 
intervention outside its borders, we will proceed with caution.

                               U.N. DUES

    Question. Last year, we adopted the Helms-Biden legislation 
authorizing payment of part of our U.N. arrears. I, for one, believe 
the United Nations is critical to advancing U.S. interests and values, 
so we shouldn't continue to jeopardize our leadership there by making 
unrealistic demands. How are the conditions in the Helms-Biden 
legislation being received in New York? What progress have we made in 
meeting these requirements?
    Answer. Our most pressing Helms-Biden issue is revision of the U.N. 
assessment rate scales. We are working to mobilize the entire U.N. 
membership in an agenda for comprehensive scale reform aimed at 
creating a flatter, more objective system. Many Member States share our 
concern about the anomalies and inequities embedded in the current 
assessment methodology. Our efforts are focused on getting major 
players at the U.N. to recognize that financial responsibilities are 
part and parcel of playing a leadership role at the U.N. While certain 
of the least developed countries are not in a position to shoulder an 
additional dues burden, there are many other U.N. Members that can and 
should pay more. Our proposals address this problem in a transparent 
and fair way, and are aimed to ensure that all countries with the 
capacity to pay are contributing their fair share. Along with other 
senior Department staff, I have been raising this issue with senior 
foreign officials at every opportunity, and Ambassador Holbrooke and 
his team have been meeting with 5-6 delegations per day to explain our 
proposals and urge their support. This is complemented by a similar 
mobilization for scale reform in capitals through our embassies. Our 
message seems to be getting across, and while it is too early to 
predict the ultimate outcome, we are cautiously optimistic about 
effecting significant change to the assessment system.
    We are also making good progress on other Helms-Biden provisions. 
Last year, the U.S. regained a seat on the U.N.'s Advisory Committee on 
Administrative and Budgetary Questions, allowing us to participate 
first-hand in review and recommendations on budgetary and other 
administrative proposals. There has been progress at the U.N. on 
program evaluation, one of our major goals. We have also achieved 
critical successes in three major U.N. specialized agencies--the Food 
and Agriculture Organization, International Labor Organization, World 
Health Organization--where zero nominal growth budgets have been 
adopted, and where we are working with Member States and the 
organizations' Secretariats to move forward in the areas of internal 
oversight and program evaluation. There is more work to be done, but we 
continue to work toward implementation of these reforms which will make 
these organizations more effective and allow us to pay our arrears, and 
to do so in a way which enhances rather than erodes our relationships 
with the organizations and Member States.

            OVERSEAS PRESENCE ADVISORY PANEL RECOMMENDATIONS

    Question. The Overseas Presence Advisory Panel made a number of 
excellent recommendations. I understand the Department will soon submit 
a written report to Congress on how it is following through on those 
recommendations. I would be grateful if you could give us a preview of 
what the Department is doing, or plans to do, on the basis of the Kaden 
panel's report. In particular, what are you doing to strengthen 
training for Foreign Service Officers at every level, including 
training in personnel and resource management? What are you doing to 
ensure that we have the right number of people with the right skills 
and responsibilities--from State and other agencies--at our overseas 
posts? How are you planning to strengthen the role of Ambassadors in 
overseeing U.S. relations with host countries?
    Answer. The Department of State's March 14 report to the Congress 
describes our overall response to the OPAP report's recommendations 
(copy attached). In answer to your specific questions, we offer the 
following.
    In response to the OPAP report and other management reports written 
in recent years, State's Foreign Service Institute (FSI) has undertaken 
a number of new initiatives to ensure that employees have access to 
comprehensive leadership and management training programs throughout 
their careers. A major keystone was the creation of a new Leadership 
and Management School on October 1, 1999. This new school serves as the 
agency locus for programs covering the gamut of leadership and 
management skills for the first-time supervisor, for managing crises, 
leading teams, and managing change, to leading embassies and consulates 
overseas as Consuls General, Deputy Chiefs of Mission and Ambassadors. 
FSI also has published the Leadership and Management Training 
Continuum, which provides a blueprint for developing leadership and 
management skills, identifying which courses are appropriate for each 
career level and the Civil Service competencies and Foreign Service 
precepts they address. The Continuum has been distributed widely, both 
domestically and overseas. Management training modules also are 
incorporated in courses throughout the FSI curriculum, beginning with 
the junior officer orientation program and extending through various 
tradecraft training programs. In addition, leadership skills are 
emphasized in the DCM/Principal Officer Seminar, Ambassadorial Seminar, 
and Senior Seminar. A significant portion of our training initiatives 
are focused on mid-career personnel, preparing them for the senior 
level responsibilities they must be prepared to assume.
    State and other agencies have formed an interagency committee that 
is looking at how to implement OPAP's right-sizing recommendations. The 
committee has begun to conduct pilot programs at our missions in the 
following countries: India, France, Georgia, Jordan, Mexico, Nigeria, 
and Thailand. The purpose of the pilots is both to make recommendations 
for right-sizing these missions and to develop decision criteria that 
can be applied universally. The target date for completion of the pilot 
program exercise is June 2000. We plan to request additional funding in 
fiscal year 2002 and beyond to conduct right-sizing reviews and then 
proceed, on an interagency basis, with recommendations for right-sizing 
all agencies' staffing at all posts on the schedule proposed by OPAP: 
half within two years, and the balance in the subsequent three years.
    OPAP's recommendations on Chief of Mission authority are 
commendable objectives which the Department of State will pursue. Given 
the time required to complete interagency review, coordination, and 
clearance, however, we will defer new documentation outlining COM 
responsibility and authority until next year, when it can be carried 
out as part of the normal transition to the new administration.
 report pursuant to section 607 of the admiral james w. nance and meg 
  donovan foreign relations authorization act, fiscal years 2000 and 
2001, as enacted in the consolidated appropriations act for fiscal year 
                        2000, public law 106-113

                REPORT ON OVERSEAS PRESENCE-- MARCH 2000

Introduction
    Pursuant to section 607 of the Admiral James W. Nance and Meg 
Donovan Foreign Relations Authorization Act, Fiscal Years 2000 and 
2001, as enacted in the Consolidated Appropriations Act for Fiscal Year 
2000 (Public Law 106-113), the Department of State is providing this 
report on the results of the Department of State's review of the report 
of the Overseas Presence Advisory Panel (OPAP).
    The issues that OPAP addresses are familiar. Well before the 
report's release, the Department of State was working to adapt our 
foreign policy institutions to a new era in which the international 
political landscape has changed, security threats are unpredictable, 
many federal agencies are represented overseas, and the use of modern 
technology is essential. We have responded by undertaking an historic 
reorganization of the foreign affairs agencies, placing increased 
stress on the protection of our employees and their families, improving 
training, upgrading communications, emphasizing public diplomacy, and 
reaching out to groups--such as OPAP--for independent advice.
    The Department welcomes OPAP's emphasis on the urgency of improving 
our overseas mission infrastructure and capital plant, the importance 
of investing in human resources, and the indispensable nature of 
universal representation. We strongly agree with the Panel's focus on 
the need to ensure stronger interagency teamwork under chiefs of 
mission (COMs) abroad and the President and the Secretary of State at 
home.
    OPAP makes recommendations in eight areas: Security; Right-sizing 
America's overseas presence; Capital needs; Human resources and 
training; Information technology; Consular services; Administrative 
services; and Ambassadorial authority.
    This report outlines the Department's response in each area. It 
also provides supplemental information to address the specific elements 
required in section 607(b)(2) of the Act.
    Although this report reflects only the Department of State's views 
and actions, OPAP's recommendations affect all USG agencies operating 
overseas. Improving the effectiveness and efficiency of our overseas 
operations must be an interagency effort, and will require as well the 
support of the White House and the Congress.

Security
    OPAP fully endorses the recommendations of the Accountability 
Review Boards (ARBs) that looked at the August 1998 bombings of the 
U.S. embassies in Nairobi and Dar es Salaam. This includes the need 
worldwide for approximately $1.4 billion annually over 10 years for 
sustaining capital improvements, security upgrades, and maintenance.
    The Department of State accepted the ARB recommendations after 
their 1999 release and welcomes OPAP's endorsement of them. We continue 
to make solid progress toward full accomplishment of the ARB 
recommendations. We support OPAP's call for a ``pro-security culture,'' 
including the recognition that security is the responsibility of all 
employees from every agency and expanded security training for 
employees and their families.
    The President's fiscal year 2001 budget request for the Department 
of State seeks over one billion dollars for post security initiatives, 
including $500 million for new diplomatic facility construction (of 
which $50 million is for USAID), $200 million for additional steps to 
protect existing buildings from terrorist attack, and $344 million for 
maintaining and enhancing operational security.

Right-Sizing America's Overseas Presence
    OPAP recommends creating a process ``to right-size our overseas 
presence, reduce the size of some posts, close others, reallocate staff 
and resources, and establish new posts where needed.'' Right-sizing 
would be carried out by a new, permanent Interagency Overseas Presence 
Committee chaired by the Department of State.
    The right-sizing recommendations are a critical element in 
implementing an overarching framework to guide the allocation of 
interagency staff and resources in U.S. diplomatic and consular posts. 
The President supported these recommendations in a February 10 
statement on OPAP:

          I have asked the Secretary of State to lead a cabinet 
        committee to implement the Panel's recommendations regarding 
        rightsizing. This process will look at the full range of agency 
        staff who serve in U.S. missions abroad, and make 
        recommendations about the appropriate levels and skills with 
        which we should staff our embassies in the new century.

    In line with that, State and other agencies have formed an 
interagency committee that is looking at how to implement right-sizing. 
As of early March, the committee has begun to conduct pilot programs at 
the following posts: Amman, Jordan; Bangkok, Thailand; Lagos and Abuja, 
Nigeria; Mexico City, Mexico; New Delhi, India; Paris, France; and 
Tbilisi, Georgia.
    The purpose of the pilots is both to make recommendations for 
right-sizing these posts and to develop decision criteria that can be 
applied universally. The target date for completion of the pilot 
program exercise is June 2000. We plan to request additional funding in 
fiscal year 2002 and beyond to conduct right-sizing reviews and then 
proceed, on an interagency basis, with recommendations for right-sizing 
all agencies' staffing at all posts on the schedule proposed by OPAP: 
half within two years, and the balance in the subsequent three years.

Capital Needs
    OPAP recommends major changes in the way the U.S. Government 
builds, renovates, maintains, finances, and manages our overseas 
diplomatic facilities.
    To address the issues raised in the OPAP report, we have 
established an interagency Overseas Facilities Working Group, chaired 
by the Department of State. It will identify and implement secure 
facility solutions for our representatives overseas. The working 
group's functions are to translate right-sizing decisions into 
facilities requirements and to examine the resources needed to support 
the facilities requirements of every agency present at a mission. The 
working group will serve as a permanent body to address overseas 
facilities support needs. It will promote improved coordination and 
cooperation in planning, designing, and constructing or reconstructing 
new and rehabilitated facilities. It will also explore alternative 
financing mechanisms, including direct appropriations, capital rent, 
and the use of working capital funds.

Human Resources and Training
    OPAP's recommendations on human resources echo the results of the 
1999 ``War for Talent'' report prepared for the Department of State by 
McKinsey and Company. The Department continues to pursue a variety of 
initiatives focused on recruitment, promotion, quality of life issues, 
and training. For example, to broaden and diversify the pool of Foreign 
Service Officer candidates, we have implemented a pilot Alternate 
Examination Program; and we have revised assignment policies for new 
tandem (i.e., married couple) hires. We have adopted revised time-in-
class and time-in-service rules and new language regulations. We are 
also piloting a 360 degree performance review system to be used in the 
assignment process. To address Foreign Service spousal employment 
needs, we have negotiated 126 bilateral work agreements with other 
countries and have issued new regulations governing home-based 
businesses overseas.
    We have expanded the range of training programs. For example, we 
have established a School of Leadership and Management Training at the 
Foreign Service Institute (FSI); we have expanded ``distance learning'' 
that permits employees to receive training in the field as well as at 
FSI; we are providing foreign national employees with more professional 
training; and we are mounting an outreach program to make other 
agencies aware of the training we can offer their employees and 
families as they prepare for their overseas assignments. Further, we 
agree with OPAP that all employees and their family members--regardless 
of employing agency--must receive required security training before 
reporting to post for an overseas assignment.
    The President's fiscal year 2001 budget includes $3 million to 
support OPAP-related training initiatives. Increased training in line 
with OPAP's recommendations will require additional funding in fiscal 
year 2002 and beyond.

Information Technology
    The thrust of OPAP's information technology (IT) recommendations is 
to put all overseas USG employees from all agencies on common 
unclassified and classified computer and telecommunications platforms.
    As part of the right-sizing effort, we have established an 
Interagency Technology Subcommittee, chaired by the Department of 
State's Chief Information Officer, with membership drawn from those 
Cabinet Departments that have a significant foreign affairs presence 
overseas. The subcommittee will propose ways to apply Knowledge 
Management to facilitate the sharing of vital information at overseas 
posts, to develop a common IT platform for all agencies at overseas 
posts, and to apply Internet and Internet-like technology to support 
interagency collaboration and communication with the public. The 
subcommittee will define operations requirements, select specific 
enabling strategies, and identify the funding required to implement 
those strategies.
    In cooperation with the subcommittee, State will conduct an IT 
pilot at two posts to demonstrate how a common platform would work. We 
intend to select those two posts from among those which actively 
participate in the right-sizing effort. The President's fiscal year 
2001 budget includes $17 million in support of the recommendation for a 
common information technology platform. While the Department will 
establish the appropriate backbone for a common platform, each agency 
at post will be responsible for purchasing its own equipment.

Consular Services
    OPAP recommends increased staffing flexibility covering consular 
positions to meet surges in service demand; permanent retention by the 
Department of State of all fee-generated consular revenue, uncoupled 
from the Department's overall obligation authority; continued 
improvements in customer satisfaction; and an expanded best-practices 
program.
    We welcome OPAP's proposal that State retain all fee-generated 
consular revenue. We will discuss the OPAP fee retention recommendation 
with appropriate congressional members and committees, with a view 
toward proposing legislation in fiscal year 2002 if practicable.
    State is also studying OPAP's recommendation to transfer the 
control of consular positions overseas from the regional bureaus to the 
Bureau for Consular Affairs. This is an issue that we have previously 
considered. There are good arguments both for retaining the current 
organizational structure and for moving the positions to the control of 
Consular Affairs. We have not yet made a decision on the final 
disposition of this recommendation.
    The Bureau of Consular Affairs continues to pursue the customer 
service initiatives and the best-practices program already underway at 
the time the OPAP report was prepared. We take enormous pride in noting 
that Consular Affairs is ranked in the top quintile of customer 
satisfaction by the American public, as tracked by the National 
Partnership for Reinventing Government Review Initiative. We welcome 
OPAP's support for these efforts.

Administrative Services
    The OPAP report's recommendations on administrative services call 
for the aggressive use of technology, the regionalization of support 
functions, and a larger role for foreign national employees.
    The Department of State agrees with the thinking underlying these 
recommendations. The implementation committees looking at right-sizing, 
technology, and human resources and training will consider each of 
these recommendations as it affects their portion of the whole in the 
course of their work.

Ambassadorial Authority
    OPAP makes several recommendations related to chief of mission 
(COM) authority, including reform of the mission performance planning 
(MPP) process, an enhanced interagency role for deputy chiefs of 
mission (DCMs), and greater flexibility in the organizational structure 
of diplomatic posts.
    These are commendable objectives which the Department of State will 
pursue. Given the time required to complete interagency review, 
coordination, and clearance, we will defer new documentation outlining 
COM responsibility and authority until next year, when it can be 
carried out as part of the normal transition to the new administration.

Supplemental Information
    This section responds to section 607(b)(2) of the Foreign Relations 
Authorization Act, fiscal years 2000 and 2001, as enacted in the 
Consolidated Appropriations Act for Fiscal Year 2000 (Public Law 106-
113), which requested specific information not otherwise covered in the 
report.

        Closing diplomatic facilities for security reasons

          ``(A) Specify whether any United States diplomatic facility 
        should be closed because--(i) the facility is highly vulnerable 
        and subject to threat of terrorist attack; and (ii) adequate 
        security enhancements cannot be provided to the facility; (B) 
        in the event that closure of a diplomatic facility is required, 
        identify plans to provide secure premises for permanent use by 
        the United States diplomatic mission, whether in country or in 
        a regional United States diplomatic facility, or for temporary 
        occupancy by the mission in a facility pending acquisition of 
        new buildings.''

    The Department reviews the security situation in individual 
countries on an ongoing basis and temporarily closes posts as 
circumstances warrant. Currently operations are suspended at two U.S. 
embassies for security reasons: Mogadishu, Somalia; and Khartoum, 
Sudan. The Somalia Liaison Office and Khartoum Embassy Office operate 
out of Nairobi, Kenya.
    Immediately after the 1998 bombings in Nairobi and Dar es Salaam, 
the Secretary of State commenced a review of the security situation of 
overseas posts, requesting revised threat assessments and inviting 
recommendations on security improvements from all chiefs of mission 
worldwide. Soon thereafter, the Department formed and led interagency 
security assessment teams. Equipped with technical experts and the most 
up-to-date information, these teams were dispatched to a carefully 
selected group of our most vulnerable posts around the world to conduct 
in-depth security reviews and make specific recommendations. As a 
result, security at posts worldwide was upgraded immediately and 
operations at the embassy in Dushanbe were suspended for more than a 
year. Physical security recommendations were provided on site to 
officials at all posts visited.
    The Department used the 1998-1999 reviews, together with 
information from State regional bureaus and other sources, in its plans 
for upgrading or replacing facilities overseas. Funding was included in 
the fiscal year 1999 emergency security appropriation and the fiscal 
year 2000 budget to begin this process. As mentioned earlier, the 
President's fiscal year 2001 budget request for the Department of State 
seeks over one billion dollars for post security initiatives, including 
$500 million for new diplomatic facility construction ($50 million for 
USAID), $200 million for additional steps to protect existing buildings 
from terrorist attack, and $344 million for maintaining and enhancing 
operational security.

        Exploiting technology for staffing efficiencies

          ``Outline the potential for reduction or transfer of 
        personnel or closure of missions if technology is adequately 
        exploited for maximum efficiencies.''

    The Department has established a CIO level Interagency Technology 
Subcommittee to examine how best to exploit technology for maximum 
efficiencies, including potentially permitting the reduction or 
transfer of personnel. This subcommittee will work closely with the 
interagency right-sizing committee as it conducts its reviews of 
overseas staffing.

        Regional missions

          ``Examine the possibility of creating regional missions in 
        certain parts of the world.''

    The Department strongly concurs with the OPAP conclusion that ``a 
universal, on-the-ground overseas presence is more critical than ever 
to the nation's well-being.'' We continue to pursue the regionalization 
of support functions either overseas (e.g., the Frankfurt Regional 
Support Center) or in the United States (e.g., the Fort Lauderdale 
Regional Center, the Portsmouth National Visa Center, the Williamsburg 
Diversity Lottery Center, and the Charleston Financial Service Center). 
As OPAP confirms, however, policy functions are best carried out 
through face-to-face interaction. We believe it is critical to retain 
the general principle of universality, except in limited circumstances.

        Special Embassy Program

          ``In the case of diplomatic facilities that are part of the 
        Special Embassy Program, report on the foreign policy 
        objectives served by retaining such missions, balancing the 
        importance of these objectives against the well-being of United 
        States personnel.''

    The Special Embassy Program (SEP) is designed to permit the United 
States to maintain a limited presence in locations where policy 
priorities and resource limitations preclude the need or justification 
for a larger embassy. This is not to say our presence in these places 
is unimportant. SEP posts advance important foreign policy priorities, 
consistent with the strategic goals outlined in the International 
Affairs Strategic Plan and reflected in each post's Mission Performance 
Plan (MPP) and available resources.
    There are currently 56 SEP posts. After the demise of the USSR, it 
was the policy of the Administration to open new posts in the region 
immediately. Fourteen of the SEP posts fall into this category--places 
where we may have only three or four policy objectives (compared to the 
10 or more at most larger posts) but which are in some ways more 
critical than those at larger posts. These are not the only SEP posts 
with limited but important objectives. The SEP list includes 
Wellington, New Zealand; Reykjavik, Iceland; Luxembourg; Vientiane, 
Laos; and Doha, Qatar, for example.
    American staffing levels at SEP posts range from one position 
(Grenada) to 31 (Yerevan), with a limit of 35 U.S. Direct-Hire 
positions, including both State and other agencies. While some of the 
SEP posts are small because of the hardship and danger, many are small 
because of limited objectives. Where danger and hardship are an issue, 
tours may be unaccompanied, to minimize exposing larger numbers to 
security risks.

        American Presence Posts

          ``Examine the feasibility of opening new regional outreach 
        centers, modeled on the system used by the United States 
        Embassy in Paris, France, with each center designed to 
        operate--(i) at no additional cost to the United States 
        Government; (ii) with staff consisting of one or two Foreign 
        Service officers currently assigned to the United States 
        diplomatic mission in the country in which the center is 
        located, and (iii) in a region of the country with high gross 
        domestic product (GDP), a high density population, and a media 
        market that not only includes but extends beyond the region.''

    Since the release of the OPAP report, the Department has opened 
three more American Presence Posts (APPs) in France in addition to 
Lyon: Bordeaux, Lille, and Rennes. We also have completed the 
congressional approval process to open an APP in Toulouse. We have 
opened these posts through shifting personnel and funding from the 
Embassy in Paris, and providing for the requisite additional funding. 
Our experience to date is that the practical requirements of opening an 
APP preclude the possibility of doing so at no additional cost to the 
US Government.
    The U.S. mission in France is one of the pilot posts the 
interagency right-sizing group will look at this spring. Over time, we 
anticipate that this effort will examine candidates for APP status in 
other countries as well.

Conclusion
    The OPAP report addresses a number of serious, long-standing issues 
with how the USG operates at American embassies and consulates abroad. 
Some can be addressed in the short term. Indeed, in many cases the 
Department already had initiatives underway prior to the report's 
release. A long-term commitment of resources, however, is essential if 
we are to improve the way the U.S. Government operates overseas. The 
Department of State's commitment by itself will be insufficient. 
Achieving the changes and improvements the OPAP report proposes will 
require the active involvement of the White House, the Congress, and 
all other departments and agencies. We are confident that we have put 
in place the initial framework that will permit us, as part of the 
larger interagency and USG-wide effort, to address the full range of 
OPAP initiatives over the next several years.

    Question. It seems like every year we face a challenge for funding 
for the NED [National Endowment for Democracy]. In my view, in the 
post-cold war world, with so many nations in flux, and so many 
opportunities to foster democracy, human rights and the rule of law, we 
have more need than ever for the NED. Would you agree?
    Answer. Absolutely. The NED plays a critical role in supporting 
grass roots democracy groups around the world.
    I have been close to NED for a number of years--in the past as a 
Board member of both NED itself and of NDI. I am very familiar with the 
important work it does in carrying out its principal mandate of 
democracy-building.
    Through its four core grantees, NED is able to build upon and 
expand the linkages between these organizations and their counterparts 
overseas. Without the funding these core grantees receive from NED, 
they would be unable to carry out many of their activities overseas. 
The focus of these programs is on the democracy-building national 
interest of the United States.
    Let me also note that the core grantees contribute approximately $7 
million to the NED-funded programs they carry out.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski

    Question. What progress has been made in securing Israel's position 
in the Western European and Others Group [WEOG] and in becoming 
eligible to serve on the U.N. Security Council?
    Answer. Israel's exclusion from the U.N.'s regional group structure 
is unfair and inconsistent with the principle of sovereign equality of 
member states enshrined in the U.N. Charter. Correcting this injustice 
remains a priority for the Administration. Participation in the 
regional group structure is a critical element in any member's 
effective participation in United Nations activities. Consequently, 
Administration officials, including the President and Vice President, 
have repeatedly engaged the other members of WEOG to bring this issue 
to closure.
    Enormous progress has been made and was reported in detail recently 
to the Congress in the annual report on this issue. We have secured EU 
agreement on Israeli participation in the WEOG at the expert and 
political director levels. We now plan to coordinate in New York and 
capitals with the other WEOG members to finalize the implementing 
details that will allow Israel to assume its rightful place as a 
participant in the regional group structure. Throughout these efforts, 
we have coordinated closely with appropriate Israeli authorities and 
will continue to do so.
    We hope to bring this matter to a successful conclusion within the 
next several months and will keep the Congress informed of our 
progress.
    Question. I understand that member countries of the Western 
European and Others Group need to agree unanimously on Israel's ability 
to join the group. What is the Administration doing to address Malta's 
objection?
    Answer. Decisions within the WEOG are made by consensus. The 
Administration has made numerous interventions with all WEOG members to 
bring the issue of offering Israel temporary membership in the Group. 
The Administration was successful in its efforts with the EU and is now 
working to bring this issue to closure with the remaining WEOG members.
    Like some other WEOG members, Malta raised concerns regarding the 
need to agree on the modalities for Israel's participation as a 
temporary WEOG member. Working closely with the appropriate Israeli 
authorities, we are fully confident that mutually acceptable conditions 
will be agreed upon shortly to address those concerns.

                          SUBCOMMITTEE RECESS

    Senator Gregg. The next subcommittee hearing will be on 
March 7 at 10 a.m. We will have the FBI, DEA, and the INS.
    Secretary Albright. Thank you very much, Mr. Chairman.
    [Whereupon, at 10:50 a.m., Thursday, March 2, the 
subcommittee was recessed, to reconvene at 10 a.m., Tuesday, 
March 7.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              


                         TUESDAY, MARCH 7, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg, Stevens, Domenici, Hutchison, 
Campbell, Hollings, Inouye, and Lautenberg.
    Also present: Senator Kyl.

                         DEPARTMENT OF JUSTICE

                 IMMIGRATION AND NATURALIZATION SERVICE

STATEMENT OF DORIS MEISSNER, COMMISSIONER
    Senator Gregg. We will begin the hearing. We appreciate 
everyone's attendance. We thank Commissioner Meissner.
    I will not be doing an opening statement. Did you have an 
opening statement?
    Senator Hollings. No, thank you, Mr. Chairman.
    Senator Gregg. Then we will go directly to your statement, 
Commissioner.

                INS COMMISSONER MEISSNER'S OPENING REMARKS

    Ms. Meissner. Good morning. Thank you, Mr. Chairman, 
Senator Hollings, members of the subcommittee, for the 
opportunity to appear before you today to discuss the 
President's fiscal year 2001 budget request for the Immigration 
and Naturalization Service.
    Over the past 7 years we have forged a very productive 
partnership that has allowed us to build a more effective, more 
efficient INS. At times, we have had our differences but we 
have never lost focus on our shared goal: strengthening the 
enforcement of immigration laws at our borders and in the 
Nation's interior while improving the delivery of services to 
legal immigrants.
    It has been an honor to serve as the Commissioner of the 
Immigration Service during this time of remarkable growth and 
rapid change and to work with this committee and the Congress 
to address the challenges that have been created by this growth 
and by these changes. Together we have achieved unprecedented 
success in both enforcement and services, making today's INS 
vastly different from the agency of 7 years ago and not merely 
a bigger agency but also a better one, much, much better. That 
is because this Administration and Congress have worked 
diligently since 1993 to reverse decades of neglect that left 
the Nation's immigration system in disrepair and INS unable to 
fulfill its responsibilities to the American people.
    Our shared commitment to improving INS has been backed with 
an unparalleled influx of resources and investments that we 
have maximized by supporting the new resources with 
comprehensive, coherent strategies.
    Nowhere is this more evident than in the area of border 
management, especially along the Southwest border. The fiscal 
year 2001 budget will enable INS to solidify and continue to 
build on this foundation. Our $4.8 billion budget request is 
more than triple our 1993 funding level. It will add 1,305 new 
positions, allowing INS to grow to more than 33,100 positions 
by the end of fiscal year 2001, or almost double our size in 
1993.

                    BORDER PATROL

    Of the $532.2 billion that is requested for new initiatives 
in fiscal year 2001, more than $160 million would go to 
strengthen the Border Patrol. Nearly a third of the new 
personnel would be Border Patrol agents, whose ranks we are 
seeking to expand by 430 at a cost of $52 million. Another 
$50.3 million will support new Border Patrol construction 
requirements, while $20 million will be spent to continue 
deploying the remote video surveillance systems.
    Additionally, we are seeking $40.9 million to implement a 
comprehensive pay reform package for Border Patrol agents that 
would address salaries, overtime, and other critical 
compensation issues. We are committed to moving this package 
forward because it will both compensate current agents in a 
manner consistent with their expanded duties and enhance INS's 
ability to retain and recruit the Nation's best and brightest 
for the Border Patrol. It has the added benefit of being a 
better value than the existing pay structure, which is 
important to this committee, as well as to taxpayers.
    Under Chief Gus de la Vena's leadership, this $160 plus 
million investment in the Border Patrol will be as sound as it 
is substantial. His experience and vision have been pivotal in 
transforming the Border Patrol into not just the biggest 
uniformed Federal law enforcement agency, but also one of the 
best. This is illustrated most clearly by our record in 
restoring the rule of law to some of the most chaotic areas 
along the Southwest border.
    In 1993, there was no comprehensive plan for controlling 
our 2,000-mile frontier with Mexico. As a result, illegal 
immigrants and illicit drugs crossed the border relatively 
undeterred while legal traffic entering the country encountered 
interminable delays at ports-of-entry. We have responded by 
developing a multi-year Southwest border strategy to establish 
and maintain a border that works, one that thwarts the illegal 
entry of people and contraband while facilitating the flow of 
legal immigration and commerce.
    To support our strategy, we have been deploying record 
numbers of new personnel. By the end of the current fiscal 
year, for example, we expect to have about 9,000 Border Patrol 
agents on-board or almost 135 percent more than in 1993. We 
have backed these new agents with substantial state-of-the-art 
equipment and technology.
    Our aim was to gain control of traditional illegal 
immigration corridors along the border with Mexico, beginning 
in El Paso and San Diego. More recently, we are seeing the 
impressive results of Operation Rio Grande in South Texas and 
New Mexico, and Operation Safeguard in Arizona. During the 
first 2 years of Operation Rio Grande, apprehensions in 
Brownsville fell by more than 160 percent and the number 
continues to decline, falling another 45 percent so far this 
fiscal year.
    Operation Safeguard has produced similar results, with 
apprehensions in Nogales, once the busiest illegal crossing 
corridor in the State, falling 32 percent last year and another 
44 percent in the first quarter of this year. We are now 
focussing on the Douglas Nocho corridor, where the number of 
agents increased by nearly 25 percent in 1999.
    Effective border enforcement also includes ports-of-entry, 
where we are requesting $22.4 million to hire 269 additional 
immigration inspectors, as well as $28.9 million to institute 
pay upgrades from GS-9 to 11 for all inspectors, as well. This 
will, among other things, allow us to more fully integrate 
enforcement activities at ports-of-entry with our efforts 
between those ports. This link has been vital to the success of 
our Border Patrol strategy and it will be strengthened with the 
opening of three new ports-of-entry in Texas this year, which 
these new positions will support.
    The enforcement strategy we have been fielding extends to 
the Nation's interior, where last year we began implementing 
enforcement priorities that concentrate on removing criminal 
aliens and investigating alien-smuggling and other criminal 
violations. I look forward to working with you to refine the 
strategy further and to build a northern border strategy based 
on a foundation of interagency cooperation and bi-national 
coordination.
    We also need to further strengthen our capacity to detain 
and remove aliens who have committed serious criminal offenses. 
Since 1994, the number of criminal aliens in INS detention has 
quadrupled to more than 12,000, while the number of criminal 
aliens we have removed from the country reached 63,000 last 
year, more than double the number removed in 1994. We are 
requesting additional personnel and facilities to build on 
these successes in fiscal year 2001, as well.

                IMMIGRATION SERVICES

    With regard to immigration services, we have demonstrated 
that given the resources, we can develop effective strategies 
here too, and produce impressive results. These improvements 
have strengthened the balance that is needed between our 
service and our enforcement functions. Our top priority has 
been revitalizing the Nation's citizenship program and with 
your considerable support, we began by restoring integrity to 
the naturalization procedures.
    Then, last year, we began reducing a historically high 
application backlog. Having completed more than 1.2 million 
naturalization applications, double the number in 1998, we have 
fulfilled our commitment to cut the average processing time in 
half, reducing it from an average of 28 months to an average of 
12 months. This year we expect to cut that wait time in half 
again, returning to the standard of 6 months, where we are 
committed to stay.
    To sustain this success in naturalization and to replicate 
it in other service areas in fiscal year 2001, the budget 
proposes a new Immigration Services Capital Investment account. 
This account, separate from our Examinations Fee account, would 
mark the first time that INS would have a fund earmarked 
strictly for infrastructure improvements and reducing 
application backlogs.
    For fiscal year 2001, the $127 million provided by the 
Capital Investment account and the $807 million from our 
examinations fee account would allow us to maintain the 6-month 
processing time for naturalization applications that we expect 
to achieve this year. We would also be able to process 600,000 
adjustment of status applications, double the number we 
completed last year.
    Some of the funding for the new account would come from a 
direct appropriation and some from a proportion of the 
requested reauthorization of a permanent 245(i) adjustment of 
status program. However, the largest contribution, $55 million, 
would be generated by a newly proposed Premium Service Fee for 
business-related applications. This voluntary $1,000 fee would 
guarantee business processing within 15 days, except for 
certain complex cases, such as the EB-5s. We are confident that 
this new fee would create a win-win-win situation for all 
concerned; that is, businesses, legal immigrants and American 
taxpayers.
    Since 1993, we have witnessed the highest numerical level 
of immigration in our Nation's history and INS has faced 
extraordinary demands to modernize and grow. These demands show 
no sign of abating. Our task now is to consolidate the gains of 
the past 7 years, complete the work yet unfinished, and leave 
the Nation's immigration structure in a sound condition. I look 
forward to working with you and the Congress to achieve this.

                           PREPARED STATEMENT

    Thank you very much, Mr. Chairman, and I am happy to answer 
your and the subcommittee's questions.
    [The statement follows:]

                  Prepared Statement of Doris Meissner

                              INTRODUCTION

    Thank you Mr. Chairman, Senator Hollings, and Members of the 
Subcommittee for the opportunity to appear before you today to discuss 
the President's fiscal year 2001 budget request for the Immigration and 
Naturalization Service (INS). It's important to view this last INS 
budget request made by the Administration as building upon the 
accomplishments achieved during the last seven years. With this budget, 
the Administration will have increased INS funding by 219 percent since 
fiscal year 1993. Congress' support and their investment of resources 
have enabled INS to strengthen the Nation's immigration system--from 
how we enforce the immigration laws to how we deliver services to our 
customers.
    I would like to convey to the Subcommittee my thanks. It has been 
an honor and privilege to serve as the Commissioner of INS, and to work 
with this committee at a time of real growth and change. Our joint 
efforts have played a major part in changing the way that Americans 
think about immigration. Major corridors along our Southwest border are 
quiet as a result of our determination to stem the flow of illegal 
migration. Equally as important, the United States is welcoming 
unprecedented numbers of new, eligible immigrants to our shores to join 
us in building this great nation.
    It is critical that we continue to build on this success. The 
President's fiscal year 2001 budget request for INS continues a multi-
year border enforcement and service improvement strategy. In total, the 
fiscal year 2001 request is $4.8 billion, composed of $3.266 billion in 
appropriated accounts and $1.544 billion from fees. This budget 
represents an 11-percent ($523.2 million) increase over fiscal year 
2000 and adds 1,305 new positions, allowing INS to grow to more than 
33,100 positions by the end of fiscal year 2001. With this budget, we 
continue our commitment to improving customer service, facilitating 
legal immigration, deterring illegal immigration, and removing criminal 
and other illegal aliens from the United States.

                              ENFORCEMENT

    The Administration appreciates the support and resources Congress 
has provided during the past seven years which have enabled INS to 
expand its immigration enforcement programs.
Border Enforcement
    In the past seven years INS has achieved more in the area of border 
enforcement than had been achieved in decades. These achievements are a 
testament to the strategic approach to address the enforcement problems 
on the Southwest border. Prior to 1993, no comprehensive plan existed 
to control the 2,000-mile Southwest border. Ill-equipped Border Patrol 
agents and Inspectors were at times overwhelmed by aliens who stormed 
the border and ports-of-entry. Illegal immigrants often came freely 
into the country, undeterred by the federal officers who were charged 
with controlling their access to the United States. Additionally, legal 
traffic entering the country was subjected to interminable delays at 
ports-of-entry due to the low level of staffing at these ports.
    To bring integrity and safety to the Southwest border, we developed 
a comprehensive, multi-year strategy, based on the concept of a border 
that works; one that deters illegal migration, drug trafficking, and 
alien smuggling, while facilitating legal migration and commerce. To 
achieve the goals of this strategy, the Administration requested and 
received high levels of personnel and resources.
    The President's fiscal year 2001 budget continues to build on what 
we have achieved. It includes $164.2 million and 699 new positions to 
enhance INS' border management strategy. It strengthens enforcement 
efforts by funding 430 additional Border Patrol agents--more than 
double the fiscal year 1993 level. These additional Border Patrol 
agents will be critical to our efforts to expand integrity and safety 
to the borders, thereby improving the quality of life in border 
communities. In an environment of budget constraints and clear 
limitations, this budget reflects an increase in new agents that is 
achievable, while focusing on pay reform to enable INS to recruit and 
retain agents. The increase of 430 agents will bring the number of 
agents up to approximately 9,000, which represents a 127 percent 
increase over the fiscal year 1993 level of 3,965 agents.
    INS has worked extremely hard over the last few years to meet the 
challenges of hiring and retaining Border Patrol agents. A strong 
economy, offering opportunities in the private sector, has enticed many 
who may have considered a career in the Border Patrol. Retention is 
affected when experienced veteran Border Patrol agents leave, attracted 
by the private sector or by other opportunities in law enforcement 
offering more lucrative financial rewards. After impressive hiring 
successes in fiscal year 1997 and fiscal year 1998, averaging 1,020 net 
new agents per year, in fiscal year 1999, INS was able to hire 1,126 
new Border Patrol agents--a net increase of 369 new agents after 
attrition.
    We have taken action to address recruitment and retention problems. 
In January 2000, INS implemented a signing bonus program where new 
recruits are paid two thousand dollars upon the successful completion 
of the Border Patrol Academy training program. Through our National 
Recruitment Program (NRP) we are advertising extensively via the 
Internet, through the use of ``banner ads,'' and the placement of job 
postings on various Internet sites such as monsterboard.com, 
Jobs4Police.com, JobDirect.com and JobTrak.com. In addition, there are 
200 Border Patrol recruiters who conduct local and targeted recruitment 
in every state. These teams are responsible for attending local college 
and military recruitment fairs, conducting open houses, and placing 
local ads and public service announcements. Through the NRP, the Border 
Patrol will attend over 500 recruiting events this year.
    To recruit new agents, improve retention, and reduce attrition, the 
President's fiscal year 2001 budget proposes upgrading the journeyman 
level Border Patrol agent position from a GS-9 to a GS-11. This upgrade 
recognizes that the nature of Border Patrol work has evolved to the 
point that agents routinely use advanced technology in the performance 
of their duties, just as investigators and intelligence agents do. The 
President's fiscal year 2001 budget seeks $40.9 million to fund this 
element of pay reform for Border Patrol agents, as well as change 
overtime compensation so it is more consistent with other Federal law 
enforcement agencies.
    Border Patrol agents are assisted and made more effective by 
investments in state-of-the-art technology. Technological improvements 
have played a key role in the success of INS' enforcement and 
facilitation functions.
    The fiscal year 2001 budget requests $20 million to expand the 
deployment of Remote Video Surveillance Systems, the camera portion of 
the Integrated Surveillance Intelligence System (ISIS). The ISIS system 
extends the efficiency and effectiveness of the line-watch Border 
Patrol Agents on both the Northern and Southwestern borders. Where 
deployed, the system detects illegal aliens and drug smugglers, thus 
permitting agents to respond to incursions knowing in advance what 
awaits them. The ISIS system with night and day surveillance cameras, 
used in conjunction with ground sensors, is linked to central 
controller centers so that Border Patrol agents can be dispatched with 
more strategic information about targets. False alarms are reduced, and 
officer safety and law enforcement effectiveness are increased 
immensely. In locations in Arizona, New Mexico, and Texas, this 
technology has had a dramatic effect on border control and management 
and increases the safety of officers who must respond to incursions. 
The proposed combination of new Border Patrol agents and surveillance 
technology will permit INS to gain control over larger portions of the 
border.
    In fiscal year 2001, INS is also requesting $50.3 million to 
support new Border Patrol construction. This request will provide $41.7 
million for the construction of ten Border Patrol facilities. An 
additional $4.5 million is being requested for the planning, site 
development, and design work required for construction of seven new 
facilities in future fiscal years. The record increases in Border 
Patrol staff have far outpaced INS' ability to provide adequate 
housing. These resources will allow us to continue to address space 
requirements and accommodate the growth in Border Patrol while 
providing our staff with safe and humane facilities.
    The fiscal year 2001 budget also maintains INS' focus on 
facilitating legal immigration by funding an additional 269 Immigration 
Inspectors, a 62 percent increase over the 1993 level. As a result of 
the dual focus on enforcement and facilitation, INS has been able to 
enhance its enforcement capabilities while reducing wait times for 
those seeking to cross the border legally at ports-of-entry. The 
positions included in the President's budget will enable us to staff, 
and meet established inspection times at new international airport 
terminals that are scheduled to be fully operational during fiscal year 
2000 and fiscal year 2001. The positions will also support new port-of-
entry openings in fiscal year 2000 in Eagle Pass, Los Tomates, and 
Laredo in Texas, and ensure that INS will be sufficiently staffed for 
peak travel times in the primary inspection lanes at these new ports. 
Additionally, 28 of these positions will handle increased workload at 
land border ports related, in part, to the expedited removal process.
    The President's fiscal year 2001 budget also seeks $28.9 million 
for an upgrade for Immigration Inspectors of the journey level from GS-
9 to GS-11. This reform recognizes the increased knowledge requirements 
and enhanced authorities and responsibilities of each inspector's 
position imposed by the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996. These responsibilities include the ability 
to remove aliens attempting illegal or fraudulent entry in to the 
United States. Pay reform for Immigration Inspectors will put INS in 
the strongest position to recruit new inspectors and retain experienced 
ones.
    The border management strategy has proven that deterrence really 
works. We have implemented the strategy, corridor by corridor along the 
Southwest border--including Operation Hold the Line in El Paso, 
Operation Gatekeeper in San Diego, Operation Safeguard in Tucson, and 
Operation Rio Grande in McAllen and Laredo. Initially, these operations 
produce a higher level of apprehensions. This phenomenon is a direct 
result of the increase in agents and technology deployed. However, as 
the operation becomes fully implemented and the Border Patrol gains 
control, the deterrent in that area leads to a sharp decline in 
apprehensions. The benefits from these operations are clear: Operation 
Gatekeeper in the San Diego Sector realized a decrease in apprehensions 
from 44 percent of total apprehensions along the Southwest border in 
fiscal year 1993, to 12 percent in fiscal year 1999, a twenty-five year 
low; Operation Hold the Line in El Paso produced a decline in 
apprehensions as a percentage of the total along the Southwest border 
from 24 percent to 7 percent during this same time period. Moreover, 
our border operations have also contributed to enhancing the quality of 
life for those who live along the Southwest border, as evidenced by 
falling crime rates in Laredo, Brownsville, San Diego, and elsewhere.
    Our strategy to control the border has been extended to the McAllen 
Border Patrol Sector, the home of Operation Rio Grande. Apprehensions 
in the sector declined by 14 percent in January 2000 from those in 
January 1999, and are on target to reduce total apprehensions for 
fiscal year 2000 in the sector by 22 percent from fiscal year 1999's 
level. Projected declines in apprehensions for fiscal year 2000 from 
fiscal year 1999, at specific stations in the McAllen Sector are as 
follows: Brownsville Station, the heart of Operation Rio Grande, was 
down 46 percent for the month of January 2000, and is down 47 percent 
for the fiscal year; Port Isabel Station was down 40 percent for the 
month and 35 percent for the fiscal year; Harlingen Station achieved a 
36 percent decrease for the month and is experiencing a 35 percent 
decrease for the fiscal year; and Kingsville Station, which covers the 
Sarita Checkpoint, and which was once the busiest corridor for alien 
traffic in the McAllen Sector, was down 20 percent for the month and is 
down 31 percent for the fiscal year. At the same time, Mercedes, 
McAllen, and Rio Grande City, which are upriver from the main targeted 
area, are all showing increases in apprehensions indicating that there 
is a very noticeable shift of alien traffic due to Operation Rio 
Grande.
    Furthermore, in the McAllen Sector, apprehensions of Other Than 
Mexicans (OTMs) seem to also be decreasing. McAllen encountered 813 
OTMs in December, but only 569 in January. This number is significant 
because December has historically been a slower month than January.
    One area of concern in the McAllen Sector is in narcotics 
trafficking and interdiction. We have been making record seizures and 
are 36 percent above the value of narcotics seized in fiscal year 2000 
for the same period in fiscal year 1999, even though the number of 
cases remains almost the same. In fiscal year 1999 we realized an all 
time record year for narcotics seizures in the McAllen Sector, and it 
appears 2000 will be even higher. We remain optimistic that we can have 
an impact on the narcotic traffickers by forcing them to move out of 
the area or, preferably, change occupations.
    In June 1998, INS launched a Southwest border-wide public safety 
initiative designed to educate migrants about the severe dangers 
associated with illegal crossings and to assist those who are in 
danger. The initiative was developed in cooperation with the Mexican 
government and state and local officials in border communities. In 
fiscal year 1999, Border Patrol rescue efforts saved 1,042 persons in 
200 rescue incidents. This initiative realized a 21 percent decrease in 
drowning deaths and a 41 percent decrease in heat-related deaths when 
comparing fiscal year 1999 to fiscal year 1998.
    Under Operation Safeguard, Tucson Sector has been concentrating its 
efforts in certain targeted zones in the Douglas and Nogales areas. In 
the first quarter of fiscal year 2000, compared to the last quarter of 
fiscal year 1999, targeted zones in Nogales experienced an overall 44 
percent decrease in apprehensions. Attempted entries have also declined 
during the period in these targeted zones.
    In developing and implementing our border management strategy, we 
have always sought to integrate the activities between the ports-of-
entry with those at the ports. We recognize that facilitation of legal 
cross-border traffic of people and goods is vital to the nation's 
economy. However, these ports are also the potential entry points for 
criminals and contraband. Thus, INS seeks to work cooperatively with 
other Federal agencies, and in so doing has achieved impressive 
results.
    In fiscal year 1999, Immigration Inspectors encountered more than 
525 million applicants for entry into the United States (115 million at 
the northern land border, 319 million at the southern land border, and 
91 million at air and sea ports-of-entry). Currently, there are more 
than 4,900 Immigration Inspectors staffing America's ports-of-entry. 
More than 500 of these inspectors are located on the Northern border, 
1,485 are located at ports along the Southwest border, and 3,044 are 
located at air/sea ports throughout the United States.
    Over the last five fiscal years, the total number of people 
applying to enter the United States at its ports-of-entry has risen 
approximately 9 percent. In the course of inspecting these applicants, 
we have identified a 20 percent increase in the amount of document 
fraud. We have also increased enforcement actions, such as vehicle 
seizures 100 percent while increasing alien smuggling apprehensions at 
the ports 117.5 percent.
    In August 1998, the Attorney General and the Secretary of the 
Treasury launched the Border Coordination Initiative (BCI). The BCI is 
a comprehensive effort by Federal agencies to create seamless 
immigration and narcotics enforcement through facilitation processes at 
and between border ports of entry, from Brownsville to San Diego, over 
the next five years. Currently, the BCI involves INS and the U.S. 
Customs Service. However, during fiscal year 2000, we intend to involve 
other Federal agencies including the Coast Guard, the Department of 
Agriculture, the Federal Bureau of Investigation, and the Drug 
Enforcement Administration. In fact, the U.S. Coast Guard now has a 
full-time BCI Coordinator who is working with INS and U.S. Customs 
Service counterparts.
    None of these accomplishments would have been possible without the 
continued support of the Subcommittee.

Interior Enforcement
    Interior enforcement is an essential complement to the 
Administration's overarching immigration enforcement strategy. INS' 
formal Interior Enforcement Strategy was presented to staff of the 
Appropriations Subcommittee in January 1999. The Strategy established 
the following priorities: identify and remove criminal aliens and 
minimize recidivism; deter, dismantle and diminish smuggling or 
trafficking of aliens; respond to community reports and complaints 
about illegal immigration and build partnerships to solve local 
problems; minimize immigration benefit fraud and other document abuse; 
and block and remove employers' access to undocumented workers. And, as 
you requested, we are rewriting and resubmitting the interior 
enforcement strategy to focus on alien removals as the end outcome 
measure. We have drafted an Addendum which clarifies the Subcommittee's 
requested changes to the strategy.

Detention and Removal of Illegal Aliens
    We have enhanced our ability to identify and disrupt criminal 
enterprises that engage in egregious violations of human rights and 
immigration law and strengthened our capacity to detain and remove 
aliens who have committed serious criminal offenses. The number of 
criminal aliens in detention has quadrupled from about 3,300 in 1994 to 
more than 12,000 today, while the number of criminal aliens removed 
doubled from 30,000 in 1994 to 62,800 last year.
    The President's fiscal year 2001 budget requests $78.9 million to 
increase detention space in fiscal year 2001 by 1,000 average daily 
state and local detention bed spaces. These resources are required to 
continue to comply with the mandatory detention requirements of IIRIRA. 
The request includes 25 Deportation Officers, 67 Detention Enforcement 
Officers, and 17 support positions to sustain the 1,000 average daily 
bed spaces.
    In fiscal year 1999, INS utilized 442 high cost average daily 
juvenile bed spaces. The President's fiscal year 2001 budget requests 
$8.5 million to fund 120 critically needed juvenile detention bed 
spaces nationwide, bringing our average daily juvenile bed level to 562 
bed spaces in fiscal year 2001. These resources will also fund 
detention vehicles and other support equipment, as well as seven 
Deportation Officers, three Detention Enforcement Officers, and one 
Procurement Analyst to manage the cases, transport the detainees, and 
implement removals of these alien juveniles.
    In fiscal year 1999, INS increased its use of the Justice Prisoner 
and Alien Transportation System (JPATS) to move aliens to available 
detention space and to remove them from the United States. JPATS, 
created in 1995 by the U.S. Marshals Service and INS, is an air 
transportation system to transfer or repatriate federal prisoners and 
detainees. The President's budget for fiscal year 2001 includes $10 
million to fund an increase of more than 16,000 air movements. In 
fiscal year 1999, INS utilized 60,000 air movements to relocate, 
remove, and repatriate aliens. INS plans to increase to 72,000 
movements in fiscal year 2000 so that INS can progress toward its 
projected need of 85,000 total air movements in fiscal year 2001.
    INS has begun to implement a set of detention standards in some of 
the largest state and local facilities from which it rents detention 
beds. The President's fiscal year 2001 budget requests $8.6 million, 40 
Deportation Officers, 37 Detention Enforcement Officers, and three 
Procurement Officers to continue to implement this program into 100 
more of these state and local facilities, and maintain a minimum level 
of standards for INS detainees. Through this initiative, we will be 
able to provide the same standards to our detainees who are housed in 
State and local facilities that we provide to our detainees who are 
housed in INS facilities. Our initiative to establish and maintain a 
set of minimum services for detainees originates with a fundamental 
belief held by INS, the Department of Justice, and public interest 
groups that INS should provide a minimum of proper and humane treatment 
for its detainees.
    The President's fiscal year 2001 budget requests $8 million for 18 
Deportation Officers and 32 program specialists to improve INS' use of 
the National Crime Information Center (NCIC) system, an FBI-operated 
database used to track criminals. INS is required by the NCIC covenants 
to enter the qualifying records related to wanted criminal aliens and 
deported felons into the NCIC database and maintain the active records 
on a regular basis. With the tremendous growth in the number of records 
that qualify for entry, INS has been hard pressed to enter all of those 
records qualifying for entry within the mandated 24-hour period. 
Included in this initiative are resources for alien detention, the 
installation of NCIC terminals and connections at INS District offices, 
detention vehicles, travel costs, and alien removals. The additional 
staff that is part of the request will allow INS to better coordinate 
the daily use of NCIC, validate the quality of records, confirm the 
accuracy of the data, respond to ``hits'' on INS records in NCIC, and 
take custody, transport, detain and remove aliens apprehended by other 
law enforcement agencies.
    The request for detention facilities construction is $26.8 million. 
Of this, $10.4 million will enable INS to expand the Port Isabel SPC in 
the Rio Grande Valley with completion estimated in fiscal year 2002. An 
additional request for $9.5 million will expand the administration and 
court facilities at the Krome SPC in Miami; $.8 million is requested to 
upgrade the San Pedro SPC in Los Angeles. The request includes $4.1 
million for the planning, site development, and design work required to 
support three detention projects scheduled for future construction. 
Finally, we are requesting an additional $2 million to provide for 
repair and alterations at other existing INS detention facilities.
    The removal of criminal and other deportable aliens is the first 
priority of INS' comprehensive Interior Enforcement Strategy, and 
serves as a key performance measurement of the strategy. In fiscal year 
1999, we continued to emphasize removing deportable aliens from the 
United States, achieving 178,168 final order removals (62,838 criminal 
removals and 115,330 non-criminal removals of which 89,267 were 
expedited removals).
    INS removed a total of 19,798 criminal aliens through the 
Institutional Removal Program (IRP) in fiscal year 1999, an increase of 
approximately 46 percent over fiscal year 1998. As you know, the IRP 
involves identifying, processing, and obtaining a decision on 
deportable inmates prior to their release from Federal, state and local 
institutions. The IRP's facilitation of the prompt removal of 
deportable inmates once their criminal sentences are complete saves 
resources that would otherwise have to be used by INS to keep the 
criminal aliens in its custody through the entire legal process. INS 
also obtains orders on, and removes, an additional 4,326 criminal 
aliens within one day of release from institutions. These ``fast-
track'' and traditional IRP removals totaled 24,124 in fiscal year 
1999. Our IRP removal goal for fiscal year 2000 is 25,700 criminal 
aliens; we are well on our way to achieving this goal--during the first 
quarter of fiscal year 2000, the IRP reported 5,763 removals.
    In fiscal year 1999, we removed 10,055 criminal aliens from the 
Federal IRP (9,179 obtained their orders in pre-release hearings, 876 
received their orders within one day following release). We are now 
working with the Bureau of Prisons to increase the efficiency of the 
Federal program in order to improve the number of aliens who receive a 
final order before, or on the day after, release from Federal prison. 
Additionally, by December 31, 1999, INS had completed installation of 
15 of the 20 video teleconferencing sites approved by Congress. These 
sites are expected to play a significant role in speeding up removals.
    Additional tools used to maximize the efficiency of the IRP program 
include full use of administrative removal and reinstatement of prior 
orders of removal. These types of proceedings can be completed without 
a hearing before an Immigration Judge, reducing the time needed to 
process an alien for removal. As a result of these tools, there is an 
expectation that the average length of stay in detention will decrease 
giving INS the capacity to detain more criminal aliens.

Investigations
    I am pleased to report to the Subcommittee that INS accomplished 
higher than planned numbers of large-scale criminal cases in fiscal 
year 1999. We presented seven major inter-regional smuggling cases and 
1,967 principals for prosecution, 378 large-scale fraud cases and 636 
principles for prosecution, and 182 criminal cases against employers of 
unauthorized aliens.
    As you directed, INS established Quick Response Teams (QRT), in 
fiscal year 1999, to work with law enforcement officers at the State 
and local level in areas specifically identified as having a growing 
illegal immigration problem. QRTs are made up of special agents and 
detention enforcement officers deployed to INS District Offices and 
selected cities to coordinate detention and removal operations. The 
teams are not independent organizations within INS, but are part of the 
present organizational enforcement structure. We expect to see the 
dividends from the investment in QRTs during fiscal year 2000. Indeed, 
with the opening of the first QRT office on September 1, 1999, there 
has been a progressive increase in the number of requests for 
assistance from State and local law enforcement agencies. Additionally, 
the number of apprehensions made by QRTs has increased each month since 
September. In Savannah, Georgia, and in Raleigh-Durham, North Carolina, 
QRTs have already responded to local law enforcement calls, in separate 
incidents, leading to the arrests of two illegal aliens from Mexico who 
were each wanted there for murder; one was removed and transferred to 
Mexican custody, the other is pending removal. Additionally, at least 
three criminal cases have been accepted for prosecution including 
individuals being prosecuted for fraudulent document vending, alien 
smuggling, and re-entry after deportation of an individual with a prior 
narcotics conviction.
    As of January 31, 188 of the 200 QRT officers have been selected 
with 161 having entered on duty at their QRT locations. Four of the new 
QRT facilities have been opened with the remaining 26 in the 
construction process. All of the QRT locations are staffed by a 
sufficient number of officers, and many are responding from temporary 
office space to requests for assistance by local law enforcement 
agencies.
    The QRT training program is underway with the fifth training class 
currently in session at the Federal Law Enforcement Training Center in 
Glynco, Georgia. It is anticipated that the majority of QRT training 
classes will be completed by April with a final class for the 
outstanding selections to take place in July. There will be nine, two 
week sessions. All QRT officers will attend. Additionally, several 
officers who supervise QRTs from District offices will also attend the 
training sessions. The two-week training session contains training on 
professionalism, enforcement authorities, QRT mission and objectives, 
self-defense techniques, updated computer training, media training, and 
constitutional law.

                          IMMIGRATION SERVICES

    To sustain the efforts and successes of Immigration Services in 
fiscal year 2001, INS' budget estimates $807 million for the 
Examinations Fee Account, funded solely through the collection of fees 
from applicants. It also projects $127.3 million in a new account, the 
Immigration Services Capital Investment Account (ISCIA). With these 
resources, INS projects tentative goals of completing 1.05 million 
naturalization applications and 600,000 adjustment of status 
applications in fiscal year 2001.
    The fiscal year 2001 budget proposes a voluntary Premium Service 
Fee of $1,000 for business cases, which will guarantee a decision to 
approve, deny, or notify the petitioner that additional documentation 
or information is required within 15 days. This fee will not apply to 
complex cases such as EB-5s. This voluntary fee will provide businesses 
with an option to expedite the regular processing of business cases 
which currently take from 60 days to more than one year, depending upon 
the form type and the service office. INS is unable to meet the demand 
for expeditious service to the business community without adversely 
impacting work on relative petitions and document applications. The 
Premium Service Fee will ease this situation and enable INS to address 
both the business and immigrant communities' needs for INS service. We 
see this voluntary fee as a ``Win-Win'' solution for all concerned, 
that is, businesses, immigrants, and the American taxpayer.
    INS estimates that for fiscal year 2001, the proposed Premium 
Service Fee could generate approximately $80 million in additional 
revenue. Of the $80 million generated, about $25 million would be 
dedicated to providing both the expedited service for businesses, and 
benefit fraud deterrence. The remaining $55 million would be applied to 
backlog reduction and capital investment items, such as infrastructure 
improvements, that will benefit all of INS' customers and help reduce 
the applications backlog.
    The primary purpose for establishing the ISCIA account is to 
address ongoing infrastructure needs that are not currently covered by 
application fees. This marks the first time INS would have a dedicated 
fund, separate from the Examinations Fee Account (which is funded 
solely through application fees) that draws on other funding sources to 
pay for key service related initiatives. The ISCIA will be funded a 
total of $127.3 million from three sources. The first source would be 
$55 million from the voluntary Premium Service Fee (just discussed); 
the second source would be $34.8 million in direct appropriations; and 
the third source would be $37.5 million from the re-authorization of a 
permanent 245(i) adjustment of status program. The Administration 
estimates that the re-authorization of the 245(i) adjustment of status 
program, which provides relief for some immigrants already in the U.S., 
to be $75 million. The budget proposes that half of the 245(i) receipts 
would support immigration services with the remaining used for 
detention purposes.
    The funding in the ISCIA would be used solely for funding 
infrastructure improvements and addressing immigration benefit 
backlogs. Initiatives would include supporting systems upgrades, 
enhancing fingerprint storage and retrieval, and supplying more status 
information to customers through mechanisms such as INS' new nationwide 
toll-free information phone service.
    The resources requested for Immigration Services in the President's 
fiscal year 2001 budget will enable INS to continue to build upon its 
success in the area of services.

Naturalization
    In fiscal year 1999, INS achieved its goal of naturalizing more 
than 1.2 million new American citizens. This was a 105 percent increase 
over the number of applications completed in the previous fiscal year. 
The agency is on track to meet its fiscal year 2000 goal of completing 
1.3 million naturalization applications. If naturalization applications 
are received as projected in fiscal year 2000, INS will meet its 
commitment to cut the nationwide average application processing time 
down to six to nine months by the end of the year.
    In fiscal year 1994, INS had less than 300,000 pending 
naturalization applications and receipts totaled less than 600,000 
during the fiscal year. Over the next four years, INS received almost 
five million applications, and approached two million pending 
applications by the end of fiscal year 1998. Last year, INS reduced the 
number of pending cases by 500,000 and halved the national average 
projected processing time for naturalization cases from 28 months to 12 
months.
    During this period of tremendous growth, INS has faced the 
challenges of unprecedented increases in workload while adding staff 
and improving the integrity of the naturalization process. To meet 
these challenges, INS began to re-engineer the way it was doing 
business--one that focused on three areas: integrity and 
standardization, backlog reduction, and communication.
    Since 1997, INS has ensured the integrity of the naturalization 
process by establishing Naturalization Quality Procedures (NQP). INS 
established Quality Assurance positions in the field to institute 
quality in every District office. INS authorized 121 quality assurance 
analyst positions in fiscal year 1998, putting at least one quality 
assurance professional, who reported to both Field Operations and the 
Office of Internal Audit, in each District office.
    In fiscal year 1998 and fiscal year 1999, INS focused on improving 
the fingerprint program. INS standardized methods of making 
fingerprints thereby reducing rejection rates and turnaround times. 
INS, through the introduction of Application Support Centers (ASCs), 
collocated fingerprint offices and mobile routes and established 
fingerprint locations that are convenient to customers and provide high 
quality prints. Before ASCs, the FBI rejected up to 40 percent of the 
fingerprints submitted by INS for background checks and response times 
sometimes exceeded 60 days. In fiscal year 2000, the reject rate has 
plummeted to 5 percent and turnaround time is less than 21 days.
    INS has improved the process further by shifting preliminary review 
and processing of files to the Service Centers in order to allow 
officers more time to adjudicate cases. In this direct mail approach, 
all naturalization cases are sent first to a Service Center where 
Immigration Information Officers conduct a complete file review prior 
to shipping cases to the District offices for interviews.
    INS has also worked hard to develop an automated case tracking 
system for nationwide distribution. INS' CLAIMS-4 system, which began 
operation in some INS offices in fiscal year 1999, now allows for 
standardized case tracking of naturalization cases and is being 
installed across the Service.
    INS has been looking for new ways to achieve significant backlog 
reduction throughout fiscal year 1999 and fiscal year 2000. To achieve 
this, INS field offices and Service Centers have developed individual 
goals, plans, and accountability standards required to reduce the 
backlog of naturalization cases and now adjustment of status cases. INS 
staff increased from 1,401 adjudication and naturalization field 
positions in fiscal year 1994 to 2,517 positions in fiscal year 2000.
    Expanded contacts with its customers and the community will ensure 
INS can provide better service. INS has implemented a nationwide 
National Customer Service Center (NCSC), in Corbin, Kentucky, that 
provides 24-hour automated service and access to Customer Service 
Representatives and Immigration Information Officers Monday through 
Friday (naturalization applicants may now use the NCSC to notify INS of 
a change of address). INS has expanded its relationships with 
immigration advocates, local officials, and community-based 
organizations.
    Timely delivery of accurate information is critical to INS and was 
sorely missing in the past. In order for INS to perform its missions 
effectively, personnel must have complete and up-to-date information 
whenever an individual becomes the focus of a benefit or enforcement 
activity. INS officially dedicated a National Records Center (NRC) on 
February 25, 2000, as a part of the Immigration and Naturalization 
Services Records and Processes Improvement Design Project (RAPID). The 
NRC will help move INS' records and information delivery service and 
management into the 21st century. The NRC will benefit both INS' 
internal and external customers by improving data integrity and 
electronic database quality, consolidating and accounting for all paper 
holdings, giving customers a single place to go for files, centralizing 
records support operations, and controlling records processes and the 
maintenance of electronic data. The Center became operational and 
started receiving files from the more than 80 File Control Offices on 
November 15, 1999, and expects to take delivery of the last of the over 
20 million files, truly becoming INS' central records repository, by 
the end of fiscal year 2001.
    Finally, INS has utilized the Internet and published a guide in 
order to assist applicants with questions on the naturalization 
process. INS' naturalization website and pamphlet, ``A Guide to 
Naturalization,'' have provided accessible but comprehensive 
information on eligibility for naturalization and the application 
procedures to the public. INS now provides readily available 
information on how to apply for naturalization, an eligibility 
worksheet, and access to automated tests for history and civics. 
Customers are better served by increasing the information available and 
by eliminating the need for many applicants to stand in line at a field 
office.

Adjudications
    INS has also positioned itself to take on other immigration benefit 
caseloads, particularly adjustment-of-status (I-485) applications and 
reduce unacceptable backlogs. In fiscal year 2000, the agency plans to 
complete 500,000 adjustment of status applications--a 67 percent 
increase from the number of applications completed during the previous 
fiscal year. INS is also addressing the need to replace the several 
hundred thousand Alien Registration Receipt Cards (``green cards'') 
that will expire this year by developing new procedures to reduce INS 
field office workload and applicant wait time for replacement cards. 
INS has made great strides in achieving solid results with the 
resources provided by Congress in fiscal year 1999 and fiscal year 
2000.
    Our goal and emphasis has been to provide maximum value. We intend 
to capitalize on our successes and intensify our focus on service. 
Although many re-engineering efforts are still ``in progress,'' they 
have already brought about many qualitative improvements in the 
delivery of services. This trend will continue as re-engineering 
efforts mature.
    Re-engineering, innovation, and use of smart technology solutions 
are essential management concepts that INS has embraced to continue its 
pursuit to provide the best level of customer service. During fiscal 
year 1999, INS introduced a new Internet site to the public. The new 
site allows users to: (1) receive answers to the most frequently asked 
questions, (2) currently download most INS forms, with all of them on 
line within the next few months, (3) receive sample naturalization test 
questions, and (4) provide the latest news via immigration press 
releases. In fiscal year 1999, INS recorded 4.5 million Internet user 
interactions. In fiscal year 2000, INS is averaging 500,000 downloaded 
forms per month, and 550,000-650,000 user sessions per month at an 
average on-site time of 19 minutes per session.

                   PROFESSIONALISM AND INFRASTRUCTURE

    For fiscal year 2001, INS requests $10.1 million to continue 
improving the institutional development and infrastructure needed to 
sustain the enormous growth in the workforce over the last seven years. 
In 1993, 30 percent of our positions were ``support positions'' and 70 
percent were ``mission positions.'' Now, our ``support positions'' are 
only 24 percent of the total. We must increase support positions and 
infrastructure if we are to adequately support core missions.
    Included in this initiative is a request for 50 positions (34 
attorneys and 16 support personnel) to address understaffing in the 
Legal Proceedings Program. The program provides the full range of legal 
support for the Service, including representing INS before the 
Immigration Courts and the Board of Immigration Appeals. In addition, 
our attorneys (1) represent the Service in labor-related cases, 
including Equal Employment Opportunity, Merit Systems Protection Board, 
and Federal Labor Relations Act matters, (2) represent the Service in 
tort claims filed against the agency, (3) represent the Service in 
contested naturalization and denaturalization hearings, (4) provide 
legal assistance in the formulation and implementation of regulations, 
(5) advise and represent the Service in special interest and other 
sensitive cases, (6) issue legal opinions in novel and complex matters, 
(7) provide legal advice to the Commissioner and other INS officials, 
(8) provide training on immigration law to agency officers, and (9) 
represent the Service in employer sanctions and conveyance seizure 
litigation. The success of the Service is intrinsically tied to the 
effectiveness of its legal representation.
    The lack of a sufficient number of INS attorneys has coincided with 
a dramatic increase in both the number and the percentage of aliens 
granted relief from removal by Immigration Judges. According to 
statistics provided by EOIR, the number of aliens granted relief from 
removal increased by 414 percent between fiscal year 1994 and fiscal 
year 1999.
    INS is also requesting 60 positions to support Financial and Debt 
Management Services. Plainly put, these are positions for the people 
who pay our bills, administer bond receipts, and ensure deposits are 
promptly made and accounted for. They are essential to the 
administration of this agency and will help us improve our overall 
financial management performance, including ensuring we receive an 
unqualified audit opinion on our financial statements.
    In 1996, the Department of Justice's Management Division issued a 
report which in part stated that ``the overall decline in INS' staffing 
in almost every major administrative activity suggests a disturbingly 
weak administrative infrastructure which has been hard pressed to 
support the agency's mission effectively.'' With your help and support, 
we can begin to address this serious shortcoming.

                             RESTRUCTURING

    Over the past few years, the Administration worked in a close and 
bipartisan manner with Congress to improve INS' operations. In the same 
vein, the Administration today remains committed to addressing systemic 
problems, particularly those related to INS' dual and inter-related 
missions of service and enforcement. These systemic problems include 
competing priorities, insufficient accountability between field offices 
and headquarters, overlapping organizational relationships, and lack of 
consistent operations and policies.
    The Administration's principles for a successful restructuring are 
that immigration enforcement and service missions must have separate 
and clear lines of authority at all levels, from the field to 
headquarters, and that the immigration agency must be led by a single 
executive with the authority and resources to integrate immigration 
policy, standards, and management operations.
    This single executive, appointed by the President and confirmed by 
the Senate, is essential to maintain an appropriate balance between 
enforcement and services, while ensuring a coherent and coordinated 
national immigration policy. To be effective, this official must have 
the statutory authority and appropriate staff to direct operations and 
supervise key integration and oversight functions, such as legal 
counsel, financial management, policy, and communications.

                               CONCLUSION

    The fiscal year 2001 request will ensure INS has the personnel and 
tools needed to carry out an effective immigration strategy. I look 
forward to continuing to work with the Subcommittee. With your support, 
we can carry forward the improvements made and continue to address 
problem areas and ensure the agency's integrity. I want to work with 
you as we continue our mutual efforts to make this nation's immigration 
system the best that it can be.
    This concludes my formal statement on the fiscal year 2001 budget 
request for INS. I would be happy to answer any questions which you, 
Mr. Chairman, and Members of the Subcommittee may have.

               NATURALIZATION BACKLOG

    Senator Gregg. Thank you, Commissioner. I appreciate your 
testimony.
    You went through a little bit on the illegal alien issue 
and the citizenship issue, Citizenship USA, which was a 
disaster, as we all know, and which you have attempted to 
correct.
    I guess my question is where do we stand on the backlog? 
You did mention that briefly but give us a full explanation of 
where we stand on the backlog. And can we expect, as we go into 
this next election cycle, that we are going to see another huge 
explosion of citizens being registered without having been 
adequately vetted?
    Ms. Meissner. Well, you made reference to the procedures in 
the naturalization program. That was and continues to be our 
most important objective; that is, the integrity of the 
naturalization process, the quality assurance procedures that 
we have put into place and the continuing validation that those 
quality procedures are working.
    We have established quality assurance and integrity in 
naturalization that has been validated by outside audits three 
times, and continues to be validated by ongoing audits.
    Our efforts to reduce the backlog began last year. It is a 
2-year backlog reduction effort in naturalization. We completed 
1.2 million naturalization applications last year and reduced 
the waiting time from more than 2 years to what is now an 
average of 1 year. The second year of that backlog reduction, 
which has been supported with funding by the Congress last year 
and this year, is under way. We are on track with this year's 
naturalization production goals. Every office has a production 
plan. It is carefully monitored in connection with the proper 
procedures being used, and we expect that we will eliminate the 
backlog this year.
    Senator Gregg. My question was, are we going to see a huge 
bubble, as happened before the last presidential election, 
coming out of your office in new citizens being registered who 
have not been adequately vetted?
    Ms. Meissner. We have no expectation that there will be any 
change in the numbers from what I have presently given you. We 
have no reason to believe that there will be a bubble of 
applications. In fact, the numbers of applications being filed 
are declining. We set our production goals 2 years ago and are 
holding to those goals and have no intention to change them.
    Senator Gregg. So we can anticipate that at least in this 
presidential election we are not going to have an effort by the 
immigration agency to deliver us a large new group of citizens 
who end up being felons?
    Ms. Meissner. There will be no alteration from the plans 
that we are presently explaining to you and there will be no 
diminution in attention paid to the integrity of the 
naturalization process.
    Senator Gregg. Well, that wasn't the case during the last 
presidential election, Commissioner, and we certainly hope that 
it will not be repeated. We will take you at your word at this 
time, but we are going to monitor that very closely because we 
do not have a whole lot of confidence, quite honestly, in your 
agency on this issue.

                     CRIMINAL ILLEGAL ALIENS

    Now, I also understand, and we have experienced this a fair 
amount, that a number of people have been released from prison 
or from detention that have gone on to commit crimes--illegal 
aliens. What is the status of the illegal aliens that have been 
released from detention who have been convicted or are 
presently expected to be charged with committing crimes?
    Ms. Meissner. We are operating under mandatory detention 
requirements that were passed in the 1996 immigration law. When 
we have criminals, aliens who have committed crimes, we are 
mandated to detain them and we do detain them. Somewhere 
between 60 and 80 percent of our bed space is devoted to 
criminal aliens, in conformance with those requirements.
    We hold them until we can return them to their country. 
Those who we cannot return, and there are some from countries 
such as Vietnam, Cambodia, Laos, Cuba, where their countries 
will not take them back, we work aggressively with those 
countries to get them to accept return. In fact, we have a 
delegation right now in Southeast Asia negotiating with the 
Vietnamese to begin to accept their nationals in return.
    When we release people from detention, if they commit other 
crimes or if they are returned to their country and somehow 
manage to get back to the United States, we again would 
apprehend them, detain them. Recidivism is a problem. There is 
no question that recidivism for criminals is a problem not only 
in the immigration system; it is a problem across the board in 
law enforcement. But our first priority in enforcement away 
from the border is criminal aliens--arresting and returning 
criminal aliens. Those numbers continue at a very steep level 
of increase.
    Senator Gregg. How many criminal aliens then, just so I can 
get a sense of the numbers that we are dealing with here, have 
you released?
    Ms. Meissner. I would not be able to give you a number of 
criminal aliens that we have released. We release people only 
when they have completed their sentences, when we are returning 
them, or when they have shown that they are not a danger to the 
community or a danger of flight.
    Senator Gregg. Well, of the criminal aliens released, how 
many have been arrested again in the United States?
    Ms. Meissner. That is a number that we are analyzing right 
now. When that number is complete and that analysis is 
complete, I will be happy to provide it to you. I do not have 
it with me.
    Senator Gregg. Well, can you give us a ballpark?
    Ms. Meissner. The question is how many have committed 
crimes after we have released them?
    Senator Gregg. That is correct.
    Ms. Meissner. We have looked at a sampling in order to 
determine what the incidence of criminality of recidivism, 
repeat recidivism is, and I can get that number for you. As I 
say, I do not have it.
    What I can tell you is that we have----
    Senator Gregg. Well, are we talking 100? Are we talking 
1,000? Are we talking 5,000, 10,000, 50,000?
    Ms. Meissner. Overall in the criminal justice system, close 
to two-thirds of the people who are released from prison commit 
subsequent crimes.
    Senator Gregg. Well, not if they are illegal aliens, they 
do not. If they are illegal aliens, they are not theoretically 
released back into our culture.
    Ms. Meissner. No, they are returned to their country and we 
have, as I said, doubled the number of people, criminal aliens, 
that we have returned to their country. Our primary objective 
with criminal aliens is to return them. But it is also the case 
that some do re-enter and some commit subsequent crimes.
    Senator Gregg. And my question is what is that number? A 
small number? A large number? What are we dealing with here?
    Ms. Meissner. I think that it is a substantial number and 
it is consistent with the behavior of criminals released in 
other circumstances. In other words, the fact that one is an 
illegal alien does not substantially reduce or increase the 
possibility for subsequent criminality.
    Senator Gregg. I do not really think that is a very good 
excuse though, for the management of the individual, to be very 
honest with you. That does not seem to me to be a way to excuse 
the activity, but I will be interested in hearing what the 
number is.
    [The information follows:]

       Report on Criminal Aliens Who Commit Crimes After Release
    On February 28, 2000, the attached summary on criminal aliens 
released from detention was provided to the House Judiciary Committee 
in response to its subpoena on criminal aliens released from INS 
detention. The attached report was also provided to the Senate 
Committee on Appropriations on March 8, following the Commissioner's 
testimony before the Committee.
    Following the initial release of this summary, INS initiated a 
limited review of the physical alien files (A-files) pertaining to some 
of the aliens included in the reported population. Based on a 
preliminary review of these A-files, discrepancies between the data 
contained in the INS database and information contained in the physical 
A-files became apparent. Upon further review, it was determined that 
the methodology used to identify responsive cases from INS' databases 
may have inadvertently included non-criminal alien data in the document 
responses and analysis submitted to the committee.
    The Department has contracted with KPMG for a review of the 
methodology used in retrieving the data. On April 19, 2000, INS and 
Justice Management Division held an introductory meeting with the KPMG 
contractors assigned to the project to initiate the review. The 
project's Statement of Work provides that KPMG will: review the 
methodology that INS previously implemented in its initial data 
collection; make recommendations for improving the methodology if 
appropriate, and validate the results of any subsequent data analysis 
by the INS following the accepted methodology. Following this meeting, 
the KPMG contractors initiated their assessment of the initial 
methodology used by the INS. This review is ongoing. At this time, 
given the ongoing review of possible recommendations to improve the 
methodology, the INS cannot determine when any subsequent data run will 
be completed and when the results of the analysis will be available. 
The Department is aggressively approaching this review and hopes to 
obtain the results within 3 months. This time line, again, will be 
determined by the requirements of the methodology for the subsequent 
data analysis, which have not been recommended by KPMG at this time. 
The INS will provide monthly status reports to the Appropriations 
Committees of the House and the Senate on the KPMG review.

                                                 February 28, 2000.
   Immigration and Naturalization Service Results of House Judiciary 
     Committee Subpoena on Criminal Aliens Released from Detention
    The Department of Justice has gathered and analyzed the immigration 
and criminal records of certain groups of aliens in connection to a 
subpoena from the Committee on the Judiciary. The first group of these 
records relates to criminal aliens that were released from Immigration 
and Naturalization Service (INS) detention and either returned to the 
community or given an order of voluntary departure. The second group of 
records relates to aliens that were admitted to the United States 
through primary inspection at an airport.
    Recidivism is one of the most serious problems in enforcement. This 
exercise resulted in a 37 percent rate of recidivism for criminal 
aliens released from INS custody. While the rate varies greatly for 
specific populations, the findings from this project are in keeping 
with general recidivism rates. The INS release criteria attempt to 
minimize this risk whenever possible. The INS has increased detention 
capacity greatly over the last five years and focused efforts on 
removing criminal aliens and border enforcement. To this end, the INS 
removed approximately 245,000 criminal aliens between October 1994 and 
May 1999. In addition, we are attempting to maximize the amount and 
quality of information that an officer on the ground has to make a 
determination with regard to release, including through IDENT/IAFIS 
interconnectivity.
    The Department's response to this subpoena relied heavily on the 
Immigration and Naturalization Service and the Federal Bureau of 
Investigation (FBI). The INS worked with the Bureau of the Census to 
develop methodologies for answering questions raised by the subpoena; 
the methodologies were reviewed and approved by the General Accounting 
Office. The U.S. Customs Service assisted with data for the airport 
admissions.

Aliens released from detention
    Between October 1, 1994 and May 31, 1999 the INS had over 300,000 
criminal aliens in detention. During this period the INS released 
35,318 criminal aliens from custody. The Department and INS place the 
highest value on protecting public safety. Criminal aliens may be 
released under several conditions; including after an immigration judge 
sets bond for an alien or orders release on recognizance or 
supervision, after review of the case by INS indicates that the alien 
is not a flight risk or danger to the community and the detention space 
is needed for more serious criminals, on an order of voluntary 
departure, or because an immigration judge granted some form of relief 
to the alien or terminated the proceedings against the alien.
    A search of INS databases indicated that the INS had FBI numbers, 
indicating an arrest history, on 23,295 of the released aliens. The INS 
did not have FBI numbers on the remaining 12,023 aliens. The FBI 
produced criminal histories (rap sheets) on the aliens with FBI numbers 
who had an update on their rap sheet after the date of release from INS 
detention. Those 18,454 histories were reviewed by INS investigative 
officers who determined that 8,658 aliens were arrested for a crime 
after release from INS detention. The officers checked the histories 
for the disposition of the most serious subsequent crime. As agreed 
with the Committee, those crimes and dispositions have been classified 
into the discrete categories of violent crimes, drug-related crimes, 
and non-violent crimes. Violent crimes include homicide, assault, 
sexual assault, kidnapping, and robbery. The criminal histories often 
do not distinguish between levels of a crime, e.g., between homicide 
and attempted homicide. Assault includes crimes ranging from simple 
assault to aggravated assault with a deadly weapon.
    The following table summarizes the type of crime and the 
disposition of the case if known. Only the most serious crime is 
included in this table; some aliens had multiple charges or arrests on 
multiple dates.

----------------------------------------------------------------------------------------------------------------
                                                                     Total    Nonviolent     Drug       violent
----------------------------------------------------------------------------------------------------------------
Total arrests...................................................       8,658       4,412       2,870       1,376
                                                                 -----------------------------------------------
Convicted.......................................................       4,264       2,270       1,489         505
No disposition..................................................       4,394       2,142       1,381         871
----------------------------------------------------------------------------------------------------------------

    Since a large proportion of the rap sheets provided by the FBI did 
not include information on the disposition of the case, INS agreed to 
draw a random sample of 116 of the cases without a known disposition. 
The purpose of the sample was to develop an estimate of the number of 
convictions. The INS officers traced the records of the sampled cases 
to determine disposition. The results indicated 72 cases with 
convictions, 24 cases still pending and 20 cases with dismissals, nolle 
pros, or acquittal. Therefore an estimate of the number of convictions 
among the cases without disposition is 2,709 plus/minus 379. The 
estimate of cases still pending is 903 plus/minus 318.
    The arrest rate among the 23,295 aliens for whom the Department had 
FBI criminal histories is 37.2 percent. The number of convictions 
(including the estimate from the sample) is 6,973 plus/minus 379. The 
rate of arrest and conviction among the 23,295 aliens is 30 percent 
plus/minus 1.6 percent.
    There is considerably less information about the 12,023 aliens for 
whom the INS did not have FBI numbers. The INS drew a random sample of 
400 cases from the records of these aliens. That sample was 
investigated by the INS' Law Enforcement Support Center (LESC). Using 
name and date of birth checks, the LESC found 67 possibly responsive 
records; an arrest rate of 16.8 percent plus/minus 3.6 percent. 
However, the Department believes that this lower arrest rate is 
attributable to the uncertainty and difficulty in using only name and 
date of birth checks with this population. Therefore, the Department 
believes that the arrest and conviction rates among these aliens is the 
same as the rates among those aliens that had FBI numbers.
    The INS compiled the records of subsequent actions taken by the INS 
after the initial release from detention. Of the 8,658 aliens who were 
arrested after release, 3,396 were removed from the United States at 
least once and there were a total of 4,646 removals among these aliens 
indicating multiple removals of some aliens (2,767 aliens were first 
removed after the arrest and 629 aliens were removed before the arrest 
and had illegally reentered the United States).

Aliens admitted through primary inspection at airports
    The INS worked with the Customs Service to develop a list of the 
approximately 19 million aliens admitted through airports in fiscal 
year 1998. The list contained information on name, date of birth, and 
date of entry. Because the list was too large to investigate every 
admission, the Department and the Committee agreed that an exploratory 
sample of the admissions would be investigated. The INS drew a simple 
random sample of 10,000 aliens. The names and dates of birth of these 
aliens were processed by the FBI using a ``sounds-alike'' system for 
determining name matches. After eliminating records that did not match 
the name and date of birth exactly, the INS determined that 4 aliens 
among the 10,000 had a criminal history with convictions before and 
after entry.
    The small number of ineligible admissions uncovered by this sample 
indicates that a more complex sampling strategy would be needed to 
obtain an estimate for the entire population of admissions with a 
reasonable level of precision. The samples would need to be larger and 
they will need to be executed over long periods of time.

                     CAPITAL INVESTMENT ACCOUNT

    Senator Gregg. You mentioned that you have a new fee system 
you are going to put in place to capitalize this capital 
investment account. A capital investment account you plan to 
use for the purposes, as I understand it, of capital activity 
but also for the purposes of actual operating activity in the 
area of approving various items, such as citizenship papers and 
visas? Is that what you were going to use this for?
    Ms. Meissner. This is a proposal, in the budget, to 
recognize that processing fees, the fees that we get from 
applicants, along with capital investment are extremely 
important if we are to provide the service that is necessary.
    The capital fund would be intended primarily for capital 
investment in automation, new phone capabilities, case 
tracking, and additional service center capabilities. It would 
also be used for backlog reduction in the adjustment of status.
    Senator Gregg. You are going to fund this with a fee that 
people will have the option of paying if they want to get their 
approvals done in a more prompt way?
    Ms. Meissner. Yes, our proposal is that we would have a 
voluntary fee for business applications that, according to our 
estimates, would generate about $80 million, of which $25 
million would be put into additional staff to be able to handle 
business applications within 15 days. The remaining $55 million 
would be devoted to infrastructure so that we can accelerate 
the level of technology, automation and backlog reduction from 
what we are able to do with the current fee structure.
    Senator Gregg. So essentially you are going to tell an 
applicant that if they are willing to pay $1,000, they can get 
their application processed in 15 days but if they are not 
willing to pay $1,000, it may never reappear?
    Ms. Meissner. No, that is not correct. The premium fee 
would be along the lines of expedited service that one gets 
from Federal Express or from the Passport Office. The idea is 
to provide 2-week turnaround service for business applicants 
who are willing to pay the $1,000 and add the staff that would 
be required to do that. It would not take away from the 
attention given to the non-$1,000 payers. What it would do is 
make money available that would allow for upgrading the entire 
infrastructure of the services area of the INS's work so that 
all applicants would be able to get better service over the 
longer term.
    At the present time, we are simply unable to make the 
infrastructure improvements as quickly as we need them, from 
the fees that are paid with our applications.
    Senator Gregg. But the actual cost of doing this 15-day 
event would be about a third of what the fee is going to be.
    Ms. Meissner. That is correct. The fee would pay for the 
15-day turnaround, but would also provide a revenue source that 
would improve the processing for everybody over a 2-to 3-year 
period.
    Senator Gregg. Senator Hollings.

               NATURALIZATION BACKLOG

    Senator Hollings. Thank you, Mr. Chairman.
    Ms. Meissner, the record, having a 2-year backlog in 
naturalization is not a success. We have had a 232 percent 
increase in your budget and we were supposed, by the 
millennium--everybody kept talking about the millennium and now 
that we are here, they do not even mention it--by the 
millennium we were supposed to be rid of the backlog and we are 
still talking about a 2-year backlog.

                    BORDER PATROL

    But let me ask specifically about the Border Patrol. Now, 
we authorized 1,000 agents and I have looked at your budget 
here and you really only provide for 430. You talk the talk but 
do not walk the walk. You talk about 1,800, but 600 of the 
agents that we were supposed to have hired last year; now you 
are talking really of 1,800 but only employing 430 for this 
year, so we are substantially behind on this Border Patrol.
    And we all know up here with respect to the economy and the 
high employment, it is not as easy, but the military goes to 
the high schools. You could go to the high schools in New 
Mexico and you can get some good Spanish-speaking high school 
graduates and put them on overnight, send them to Charleston to 
the school or the school there in New Mexico. But I find that 
in the schools, the classes are cut back from 29 to 20. You are 
cutting back on the classes.
    You are talking about the great successes and how they are 
all coming on but we did that talk last year and we ended up 
600 shy. Now you are talking about 1,800 this year and really 
asking for only 430.
    What gives? Cannot we get some people employed?
    Ms. Meissner. Well, we, as you know, have had a very 
aggressive hiring program for 5 or 6 years. We met our hiring 
goals for 4 years in a row. It has been a very aggressive 
effort.
    Last year, fiscal year 1999, we faltered. We ran into a 
labor market that was very unyielding for us. As a result, we 
have made a wide series of changes that have increased our 
applicant pool substantially. We are continuing to increase the 
applicant pool. But we did fall behind last year and we need to 
make that up.
    The applicant pool is now 30 percent more than it was last 
year at this time. We have attracted between 11,000 and 12,000 
more people as qualified applicants as we have put these 
changes into place. We began in January to offer a hiring 
bonus, as well as to make some alterations in the scoring of 
our tests so that we have widened the number of eligible people 
that we can attract. We have a pay reform package proposal in 
this budget that we hope to be able to move forward with, which 
will create additional ability to retain people in the Patrol, 
as well as recruit. So this has been a major effort of very 
high priority to the Service.
    The class schedules have been filled so far but we have a 
very, very ambitious trajectory coming in the next 6 months 
that we need to be able to meet. We will do everything that we 
can.
    Senator Hollings. How can you call that an ambitious 
trajectory when you are cutting back from 29 to 20? You are 
going in the other direction. You talk about the 
aggressiveness, how you are going to bring them in at a GS-11 
rather than a GS-9, but then you cut down the overtime pay. So 
the amounts that they would get initially paid, then they cut 
back on overtime, so they are not getting any more, so that is 
not aggressive.
    Ms. Meissner. No, actually the overtime proposal that we 
are making increases the salary for the Border Patrol and it 
creates a greater amount of overtime that counts toward 
retirement than the current system. So it is a much more 
advantageous system for the GS-9s that are currently in the 
Border Patrol that are the working level.

                   CHARLESTON CASE

    Senator Hollings. Ms. Meissner, I have a question on a case 
that we had down there in Charleston. This young student at the 
College of Charleston, her mother won the immigration lottery. 
I understand your staff was informing you about it. I have been 
almost to the top, the next person under you on this particular 
case, and what happens is they win the lottery and they then 
have to apply within a year and she applied and her application 
was misplaced, lost for 3 months. The agent admitting to the 3-
month loss then asked for the expedited treatment by the INS to 
get her in under the terminal date of October 18 and that was 
totally ignored. So the agent, knowing it was lost and asking 
for expedition, which would have easily had her processed and 
admitted, instead, she got it in 18 days later and, as a 
result, now her entire family is here from the Ukraine but she 
is going to be shipped back to the Ukraine.
    In contrast, for example, her sister was in the Ukraine. 
The State Department handled it there and her sister got in. 
And through no fault of her own, she is appearing before the 
judge here and trying to explain this but she is getting no 
cooperation.
    Can you help us in this particular case?
    Ms. Meissner. I have just become aware of this case and I 
will take a look at it and I will do everything that I possibly 
can. If I could get back to you on that, I would appreciate it 
so that I can become familiar with it.
    Senator Hollings. Please get back to us. Do everything you 
can. Just correct your mistake, the department's mistake, not 
hers.
    Ms. Meissner. I do understand. I do understand the issue.
    [The information follows:]

                     STATUS OF THE CHARLESTON CASE

    There have been discussions with Senator Hollings' staff on 
this matter. The Immigration and Naturalization Service (INS) 
is currently in the process of researching this case. Once the 
case is completely researched, INS will provide the Senator's 
office with the full details of the agency's findings.

    Ms. Meissner. Senator, if I could just say though on the 
naturalization point that you made earlier, the backlog 
reduction program that we presented to the Congress was always 
a 2-year backlog reduction program for naturalization. Last 
year was the first year. We met the goals. This year is the 
second year. We intend to meet the goals this year and that 
will complete the backlog reduction. But that is what was 
always foreseen and that was what was shared with the Congress 
and the way in which the funding was provided.
    Senator Hollings. Thank you, Mr. Chairman.
    Senator Gregg. The tradition of this committee is that we 
recognize people in order of arrival, except whenever the 
chairman of the full committee is nice enough to join us and we 
recognize him upon his arrival. So I recognize the chairman.

                   MISSING PERSON

    Senator Stevens. You are very kind. I do have another 
meeting going on, and I came over specifically for one question 
and I would like to put one question, in the record.
    Ms. Meissner, I learned only yesterday about a young Upik 
person, a young man from Chukotka in Russia who was arrested in 
Nome, Alaska, while visiting relatives in Gambell. He was 
placed in an INS facility in Seattle. His name is Vladimir 
Skhaug'e. He was listed as Vladimir Schaulir. He had family in 
Gambell and corresponded with them until 1999. At that time he 
told his family he was asking for asylum. In the spring of 1999 
the family lost contact with him and was told through a lawyer 
who they contacted that he had been sent back to Russia. Since 
then, neither his family in Alaska nor his family in Russia has 
heard from him. They do not know if he was released to Russia, 
to whom he was released or if he was released at all.
    On behalf of the committee, I would like to ask for this 
family what is the status of his person? I have his number from 
the INS service. If he was sent back to Russia, when was he 
sent? To whom he was released? What authorities, that is--and 
is there is any other relevant data that may help find this 
young man? He, admittedly, came to our country illegally but it 
was because he had family in our State, and they are very 
worried about him. I would appreciate it very much if you could 
get us a reply.
    [The information follows:]

    On September 5, 1997, Mr. Skhaug'e was arrested by local 
law enforcement authorities in Nome, Alaska for public 
drunkenness. He was subsequently interviewed by INS officers. 
During that interview, it was determined that Mr. Skhaug'e had 
overstayed his visitors visa. He was subsequently charged for 
violation of Sec. 237a(1)(b) of the Immigration and Nationality 
Act. He was transferred to INS in Seattle, Washington, where he 
was presented for deportation proceedings.
    On December 9, 1997, Mr. Skhaug'e was ordered deported by 
an Immigration Judge. He appealed this decision to the Board of 
Immigration Appeals (BIA). On October 6, 1998, the BIA 
dismissed Mr. Skhaug'e's appeal and ordered him deported.
    On January 28, 1999, Mr. Skhaug'e was deported to Russia 
through the port of Anchorage, Alaska, on Aeroflot Airlines to 
Moscow (Aeroflot Flight No. 854). Since he was in possession of 
a valid passport and his medical or criminal problems were not 
sufficient to warrant counselor notification or any special 
arrangements with Russian officials, Mr. Skhaug'e was escorted 
only as far as the port-of-entry in Anchorage where he was 
placed on the flight to Russia.

    Senator Stevens. I will submit some questions for the 
record if I may.
    Senator Gregg. Certainly.
    Ms. Meissner. I will be happy to follow up on that. Thank 
you, Senator.
    Senator Gregg. Senator Campbell.

          ILLEGAL IMMIGRATION VIA COLORADO

    Senator Campbell. Thanks, Mr. Chairman.
    Madam Commissioner, it was noted with interest the 
statistics you gave, the drop in statistics in the illegal 
immigrants in Bisbee, Nogales and several other places, but my 
view is that that does not mean they are still not coming.
    The problem I think we face is when you add agents and you 
add pressure in Texas and California and Florida, they just go 
the path of least resistance, and our State is becoming one of 
the paths of least resistance.
    On January 24th a load of 17 illegal immigrants were packed 
into a van, that crashed on a lonely road in a valley in 
Colorado, killing three. Just a day after that another van 
loaded with, I believe, 22 illegal immigrants, crashed in 
Southern New Mexico, killing one. So clearly some of these 
lightly traveled roads are becoming major conduits for illegal 
immigrants.
    I know you are aware of that and you have assigned more 
agents to Colorado, but in doing so, a strange kind of 
phenomenon has started. Maybe you are already aware of it but 
your agency is going to expand in Durango, Grand Junction, and 
Glenwood Springs, Colorado. I note with interest in those 
town's newspapers that groups are forming to oppose this 
increased INS presence. I never thought I would see the day 
when people form in some kind of concerted effort, saying that 
we should not allow the INS to expand in their communities. I 
thought we were all on the same side of this and would like to 
see a reduction in illegal immigration.
    The people that are opposing the INS coming into Grand 
Junction, Durango, and Glenwood Springs seem to be in two 
factions. One is the people that need workers--the ranchers and 
the farms and small businesses and so on that cannot get 
workers at a time when there are so many jobs out there. And 
the other group, has some racial overtones. They are saying 
that we should not expand the INS because they are going to add 
more pressure just to people of Hispanic origin.
    I would like to know your thoughts on those two things that 
I had never seen before the last couple of years and also your 
intentions. Are you intent to expand the offices in those 
communities?
    Ms. Meissner. Absolutely. Those resources are very 
important and they have been needed in these areas for exactly 
the reasons that you are describing. They are seeing some 
changing patterns and we are seeing smugglers resorting to far 
more dangerous tactics, putting people at risk in rickety, 
unsafe vehicles in large numbers, and there have been too many 
of the kinds of highway disasters that you are describing. We 
need to confront that and we need to----
    Senator Campbell. Well, I am on your side on this. I think 
you ought to expand it and I appreciate you doing that, but I 
would like to know how the INS is going to react to some of 
those concerns that seem to be coming up in the communities.
    Ms. Meissner. These community concerns do arise and I think 
that it is very important that we be able to address them and 
open the kind of dialogue with communities that we have been 
very engaged in in many parts of the country. I think the 
border communities in particular understand how aggressively we 
try to keep lines of communication open.
    In this particular case with these new resources that you 
are getting in Colorado, as well as similar ones in other parts 
of the country, I think we need to clarify with local law 
enforcement and with the communities what the respective roles 
of local law enforcement and INS enforcement are, how we will 
be able to reduce criminality and abusive practices in their 
communities, what kind of cooperation we are able to give. I 
think a lot of it is dialogue and public education.
    Senator Campbell. Do you have some kind of an outreach 
program?
    Ms. Meissner. Absolutely.
    Senator Campbell. You have been through this before in 
other towns?
    Ms. Meissner. Yes, but I am glad that you raised it with 
me. I am sure that our people, locally, are aware of this but I 
will make certain that they are pursuing the outreach in the 
way that we expect.

                 INDIAN RESERVATIONS

    Senator Campbell. I would appreciate that.
    Just one other related question, too, and that is in 
Arizona and New Mexico, particularly Arizona, we have some 
Indian reservations that are right on the border, as you know. 
I have had people tell me that they pretty much go back and 
forth any time they want through holes in the fence from Mexico 
onto some of the reservation ground.
    How does your agency interact with tribal officials? In 
fact, some of them tell me that it is their relatives who go 
back and forth.
    Ms. Meissner. Well, Indian reservations are a very special 
area, as you know. I mean they are sovereign and they span the 
border, both on the United States-Mexico border and, in some 
cases, on the United States-Canadian border. We work with 
tribal officials as closely as we can. I would have to tell 
you, though, that Indian reservations tend to be a source of 
enforcement difficulty.
    Senator Campbell. Has there been an increase in the number 
of illegal aliens coming through reservation border ground?
    Ms. Meissner. Yes. And obviously Native Americans have 
specific documents that they are able to use in order to move 
back and forth. We increasingly will find ourselves having to 
work in much closer coordination with these areas as other 
parts of the border become more carefully controlled, to 
prevent this from being a weak spot.
    Senator Campbell. Thank you.
    Thank you, Mr. Chairman.
    Senator Gregg. Senator Domenici?

                 MEXICAN IMMIGRANTS

    Senator Domenici. Thank you, Mr. Chairman.
    You know, recently there has been a number of articles 
about where the immigrants from Mexico who are coming across 
our border are going, in spite of your efforts, in spite of our 
money, by the hundreds and hundreds of thousands, and it is 
most interesting.
    For those who thought they would stay over in Arizona or 
New Mexico or even Texas, what a surprise. They are found all 
over the South now. We have some communities in the Carolinas, 
in Georgia where the addition of Mexican immigrants is 
skyrocketing. The immigrants are not there by the hundreds; in 
some medium-sized communities in the South there are thousands.
    Frankly, I am not here to tell you that we know how to stop 
that, that we have some magic that we want to impose on you 
through our appropriation process. It is my guess that if the 
census were accurate, and I do not believe it will be, that we 
would find that over the last 5 or 6 years--I do not want to 
say a sieve--but I really believe there has been little impact 
on Mexican immigrants coming to the United States and finding a 
place to stay and go to work. Frankly, the employers in America 
are using them, working them, paying them, and they are sending 
huge amounts of money back to Mexico.
    I do not know when it will reach a point where it is just 
too many and too much, but it is getting close. I mean America 
has almost lost control of its borders.
    Senator Campbell. If my friend would yield just a moment, 
the accident, the wreck with the 17 illegal aliens that I 
talked about that was in Colorado, they were on their way to 
Florida. The authorities questioned them and they had come up 
through New Mexico. There was little resistance, but they were 
all heading for Florida and had jobs waiting for them on farms.
    Senator Domenici. I just want to make the point. I have 
three specific questions but, frankly, it would appear to me 
that some very, very high-level discussions between Mexico, 
even though they are sovereign and everybody acknowledges that, 
and the United States about this issue would be in order. With 
a border the size we have, there is no way the Border Patrol is 
going to keep this from happening.
    I tell you, when it comes to enforcing our laws that we 
have put on the books, all of the border agencies are having 
difficulty managing the process. I do not know why that is. 
Maybe it is just too massive a job. But you have been trying 
for a number of years to get your agency under control and 
maybe it is a little better today, maybe a lot better than it 
was 4 years ago, but any outside observation is that it has a 
long way to go in terms of just accomplishing what we want it 
to accomplish. None of us--I am not convinced that if we were 
doing it perfectly--know how to prevent massive immigration 
from Mexico, so long as they are so poor and there are so many 
opportunities in this country. It is just one of the most 
attractive human instincts that is taking place that it is hard 
for us to consider because none of us have been in that 
position.

                  DETENTION ISSUES

    Now if you want to comment on that you are welcome to, but 
I want to talk about what is happening on the border. It 
appears to me that everything on the border, from the Federal 
district courts to where the U.S. Marshals have facilities to 
incarcerate people waiting for trial are all so overloaded that 
it is almost to a situation of emergencies. I want to just talk 
about one and that has to do with how are we incarcerating the 
illegals that we arrest that are either awaiting trial or 
awaiting deportation. I would ask you if you would supply the 
committee for the record with an entire analysis of the border 
and how much capacity we have and where we are putting these 
people in jail.
    I want you to know that in my State we are not very rich 
and we do not have a lot of jobs. Still some of our rural 
counties have high unemployment and the immigrants understand 
that. They are not staying in those areas, other than for 
agriculture. They are going to your State. They are going over 
to the other States near you. They are going to Georgia. They 
are going to Colorado.
    I think we have to know who we are putting the burden on, 
what local governments we are putting the burden on for 
incarceration and jail. I am going to stay right on that, and I 
want to tell you one county in New Mexico with a community 
called Deming, the county of Luna, which is very poor. They 
spent $350,000 last year housing people for the Federal 
Government in the areas of which I am speaking.
    Now, we need some relief. We either need the government to 
build some detention facilities, or they have to reimburse 
these poor counties along the border that are housing them. You 
have $78 million in your budget for that kind of activity, to 
either reimburse and/or build some interim facilities.
    Now I think with the crisis being what it is that we need 
to know from you, and I ask the chairman if we could ask--about 
the game plan for using that $78 million. Where are you going 
to put it? Who is going to benefit? How are we going to help 
counties like Luna? I am sure there are counties and cities in 
Arizona. If we are going to appropriate that money, we need to 
know what you are going to do with it, and I would ask that you 
tell us in detail how you are going to use that on the border 
to alleviate the situation. Is that a fair question, Mr. 
Chairman?
    Senator Gregg. Absolutely.
    Senator Domenici. It may take a little time but I really 
think we ought to know, and maybe we do not have enough money 
at $78 million to do the job.
    [The information follows:]
         
            Detaining Illegals Awaiting Trial or Deportation
 
   The total Immigration and Naturalization Service (INS) Detention 
and Deportation (D&D) enacted budget for fiscal year 2000 is $878.6 
million, which is used to detain, remove, and deport aliens. Funding is 
also used to support the 18,535 average daily detention beds within the 
D&D program. The D&D program uses Service Processing Centers, contract 
facilities, joint INS/Bureau of Prisons federal facilities, and state/
local facilities to detain those aliens subject to deportation, 
exclusion or removal proceedings who are likely to abscond, or whose 
freedom at-large would clearly present a danger to public safety and 
security until they are ready for removal.
    INS is requesting $119.5 million in additional program funding for 
the D&D program in fiscal year 2001, which includes $82 million in 
appropriated funds. These resources will be used as follows:
  --$16 million to enhance the National Transportation System.--This 
        funding, including $5.6 million in the Breached Bond Detention 
        account, will fund 16,000 additional domestic and repatriation 
        Justice Prisoner and Alien Transportation System Fund (JPATS) 
        movements, thus enabling the INS to fund a total of 85,000 
        JPATS movements in fiscal year 2001.
  --$8 million to Enhance Juvenile Bed Space.--Funding of $3 million 
        will provide 11 additional full-time Juvenile Coordinators in 
        11 districts. This initiative, when fully implemented in fiscal 
        year 2002, will result in the removal of 190 additional 
        juvenile aliens supported by 38 average daily beds funded with 
        Salaries and Expenses resources. In addition, $5 million from 
        the Breached Detention account will increase the number of 
        juvenile detention beds by 82 beds in fiscal year 2001.
  --$52 million to Increase Funding for State and Local Bed Space.--
        This initiative will facilitate the removal of an additional 
        10,000 illegal aliens. It will also add 1,000 new detention 
        beds enabling INS to reach an average annual funded bed level 
        in fiscal year 2001 of 19,702.
  --$9 million for Detention Standards for Intergovernmental Service 
        Agreements (IGSAs).--Because INS is compelled to rapidly expand 
        IGSA utilization in a vast and varied number of non-Federal 
        facilities, INS cannot rely on obtaining IGSA bed space that is 
        always completely compliant with INS' detention standards. This 
        funding is requested to continue the implementation plan funded 
        in fiscal year 2000 in which the INS will administer, implement 
        and maintain detention standards with a dedicated staff and 
        funding for upgrading IGSA facilities.
  --$8 million to Improve Utilization of the National Crime Information 
        Center (NCIC).--This funding will be used to expand NCIC data 
        entry to address a serious backlog of inputting INS's Criminal 
        Alien Records into the Nationwide database. These resources 
        will also be used to improve and expedite INS capability to 
        locate aliens on the Wanted Persons File and the Deported Felon 
        File, track stolen property, and obtain criminal history 
        records.
  --$27 million to Maintain the fiscal year 2000 Detention-Bed Level.--
        The fiscal year 2000 appropriation provided a considerable 
        enhancement for the Detention program, $26 million of which was 
        funded by one-time recoveries from the Violent Crime Reduction 
        Fund. The budget request proposes the use of $27 million from 
        245(i) receipts to replace the $26 million available in fiscal 
        year 2000. Without these resources, INS would have to reduce 
        its number of detention beds by almost 1,000.
    Additionally, in the fiscal year 2001 President's Budget, the 
Office of Justice Programs is requesting $600 million for the State 
Criminal Alien Assistance Program (SCAAP). SCAAP is a payment program 
designed to provide federal assistance to states and localities for the 
costs of incarcerating certain criminal aliens who are being held as a 
result of state and/or local charges or convictions. States and 
localities with correctional facilities that incarcerate, for 72 hours 
or longer, persons accused or convicted of either a felony or 2 
misdemeanors that occurred prior to or resulted in the current custody, 
are eligible to apply for SCAAP funding.

             CAPITAL INVESTMENT ACCOUNT

    Senator Domenici. Secondly, I do want to criticize your 
national budget a little bit. You know, the President of the 
United States had the latitude to put an awful lot of new 
programs in his budget. I do not think he is going to get very 
many of them, and I am not talking about whether we will 
increase education spending; that is a different issue. The 
President has scores of brand new programs in his budget.
    Now why in the world do we have to charge businesses a 
bonus to get expedited treatment at the border, this new 
thousand dollar club? I am not for that. Frankly, I think it is 
an admission that we are not doing our job right, unless you 
can convince me that it is not. I think we ought to improve the 
entire process, not just that for a businessman who desperately 
needs it, and we ought to cut that huge waiting time down some 
way.
    Secondly, any user fees that the President puts on on the 
border and then uses in this budget seems to me you have to 
make a great case for user fees or they should not be put on. I 
mean if you have brand new programs you are starting, why do 
you not pay for the border activities of this Nation before you 
start new programs? I think it is a very simple and fundamental 
question. I know where I come down and I frankly believe I 
could convince 75 Senators that before we start new programs we 
have to beef up your programs. We have to make sure you have 
the money you need.

              BORDER PATROL RECRUITMENT

    Now on the recruitment, could I ask a question? Are you now 
recruiting, working hard to recruit people who are bilingual, 
Hispanics, Mexican-Americans who speak two languages? It would 
appear to me that if that is not a big part of it, it is a 
shame and I would be surprised if you are not doing that but I 
would like to know. Is it successful? How do you measure it? 
Would you answer that one, please?
    Ms. Meissner. Shall I go back to the first one on 
detention?
    Senator Domenici. Just answer that last one.
    Ms. Meissner. Okay. Absolutely, bilingual recruitment is 
very fruitful for us. We talked last year about doing 
recruitment closer to the border and that is among the changes 
that we have made. We are doing substantial testing now in 
border communities all along the border--Harlingen, Laredo, El 
Paso, Las Cruces, Tucson--and we are finding very substantial 
numbers of bilingual people that are applying.
    In fact, more than a third of the Border Patrol is 
Hispanic. We are the largest Hispanic employer in the Federal 
Government. Recruiting in border communities, where our work is 
well known and where there are high numbers of Hispanic 
residents, is a very productive recruitment source for us.
    Senator Hutchison. Could I interrupt for one second on that 
point?
    Senator Domenici. Certainly.
    Senator Hutchison. Are you giving bonuses for people who 
are already proficient in Spanish?
    Ms. Meissner. We do not give bonuses for people who are 
already proficient in Spanish. What we have done is changed the 
point scoring on the testing that we do for qualified 
applicants. Among the changes that we have made is that those 
who speak Spanish and have language facility now get extra 
points toward qualification for the Border Patrol, which widens 
the pool of applicants of bilingual people that is available to 
us. That is working very well.

                      DETENTION

    Senator Domenici. Thank you for that.
    Now would you go back and respond if you care to----
    Ms. Meissner. May I respond on the detention point in 
particular?
    Senator Domenici. Yes.
    Ms. Meissner. Detention has been of extreme importance to 
the INS. We began this buildup with about 6,000 detention 
spaces. We are now up to 18,000. It has been a very substantial 
growth in bed space. This budget has in it money for another 
1,000 bed spaces. And we actually house close to 300,000 people 
in those bed spaces every year because of the turn-over that 
takes place.
    Now the vast share of that growth has been in 
reimbursements to State and local facilities because we use 
State and local facilities widely throughout the Southwest. 
When we run out of space in a place like Deming and our space 
that is available to us to reimburse in New Mexico is quite 
small, we house people in El Paso and in other places in Texas 
where we have a considerable amount of space that we reimburse.
    Our needs for detention do exceed what is available, but we 
also have made very, very substantial growth. In fact, it is 
greater growth than in most of the other occupational areas of 
the Service. I will look at the Deming situation to see whether 
the proper reimbursement is taking place because we do 
reimburse regularly.

               PREMIUM PROCESSING FEE

    Ms. Meissner. Now on the business fee, all of our 
adjudications processing is based on fees that applicants pay. 
All we are suggesting here is that we have a voluntary higher 
fee in order to make capital available for infrastructure that 
will create a better base and more automated mechanism for all 
of our application processing.
    We also are asking for some appropriated funding. We are 
asking for a mix of a premium fee and appropriated funding and 
another penalty fee in order to put together the bundle of 
money that is needed to really move this agency to a modern 
processing regime. We have had such a struggle to try to put 
into place because the only source of revenue that we have had 
has been the fee money until the last 2 years when the Congress 
did appropriate money for naturalization backlog reduction. We 
can show you the results from that appropriation. We have made 
our targets and we will make them this year.

       REIMBURSING COUNTIES FOR INCARCERATIONS

    Senator Domenici. Mr. Chairman, might I make the point and 
ask both you and Senator Hollings to consider it, as we prepare 
to mark up? I really believe we ought not let the Federal 
Government impose on any county, not only on the border but 
anywhere in the country, county or city jails--we should not be 
burdening them with our incarceration needs without reimbursing 
them. When it gets to be as big a burden as it is for some of 
these counties--I mean they are giving up hope on us.
    The United States Marshals, let me tell you, they are 
having difficulty because they are the ones in charge of these 
prisoners and they are having an awful hard time because they 
do not even know where to take them sometimes. I will tell you 
there are marshals that have to drive 100 or 150 miles with 
these prisoners because we do not have facilities. I think we 
ought to pay some real attention to that because that is an 
absolutely unrealistic burden on local facilities.
    Senator Gregg. We will be happy to look at that. I would 
note to the Senator that we put a large amount of money into 
the SCAAP program. Last year I think we put $650 million in the 
SCAAP. It goes back to the States, and they can use it, 
basically, as an unfettered block grant. A lot of the States, 
unfortunately, do not use it to reimburse the local communities 
for illegal alien incarceration but rather, use it for local 
law enforcement or anything else they want to use it for.
    So maybe we should put some restrictions on the SCAAP 
money, that the first call on the SCAAP money must be to 
reimburse local communities who bear incarceration burdens as a 
result of taking illegal aliens. So we might want to put some 
restriction on the SCAAP money.
    Senator Domenici. I am willing to look at it.
    Senator Gregg. I do not know what New Mexico does, but I do 
know that California uses this essentially as a block grant and 
as a result, I am not even sure that the money ends up in the 
illegal alien account in California. I think it ends up in the 
general law enforcement account.
    Senator Domenici. Thank you.
    Senator Gregg. Senator Hutchison.

                BORDER PATROL AGENTS

    Senator Hutchison. Thank you, Mr. Chairman.
    Mr. Chairman, first and foremost I want to thank you and 
Senator Hollings for being so supportive of the efforts that we 
have made on this committee to stick to our commitment and our 
priority to increase the number of Border Patrol agents.
    The head of the drug czar's office, Barry McCaffry, has 
urged us to go toward a goal of 20,000 Border Patrol agents in 
our country. Congress has responded to that by trying to have 
1,000 new agents each year and yet we only have 7,700 Border 
Patrol agents on the Southwest border and the administration 
has requested funding for 1,000 only once since we have passed 
the law in 1997.
    Now I think that is appalling, and I know that Commissioner 
Meissner has tried to go with the 1,000, but the administration 
has come back each year with less than 1,000 and unfortunately, 
this year is one of those, where there are 430 in the Border 
Patrol agent hiring category.
    I am very concerned that in a conversation I had with the 
Attorney General last week before this committee she indicated 
that it was an option to increase the pay, the level from GS-9 
to GS-11 if we did not hire the number of Border Patrol agents, 
the 1,000, by June 1.
    I do not consider that an option. I consider it a mandate. 
The language in last year's appropriations bill was very clear. 
It was not a choice; it was a mandate. And the reason that it 
was a mandate is because this committee has had to get narrower 
and narrower in directing the administration on the issue of 
Border Patrol agents because we have tried to give general 
guidelines; we have given them money; we have done everything 
we know how to do. And finally last year we said if the money 
is not spent for more Border Patrol agents, it has to be spent 
upgrading the pay for the people who are there, because we know 
we have a retention problem. So I thank the committee for the 
support but I have to say I am very disappointed in this year's 
budget.
    I want to ask you, Commissioner Meissner, if there is any 
question that you are going to give the increases on June 1 
that are provided for in this committee's bill from last year, 
if there is any question that you are going to give those 
raises on June 1, as mandated by Congress.
    Ms. Meissner. We understand the language to be a mandate 
and we understand the language to require those upgrades if the 
hiring has not been completed to the level that the budget 
calls for.
    In this budget that the Administration has put forward, we 
have asked for the funding to cover those upgrades, so it is in 
the funding proposal for 2001. We consider it very important 
for, as you said, both retention and recruitment and in 
recognition of the complexity of the work that the Border 
Patrol carries out.
    We believe it is also extremely important that that upgrade 
be done in the context of an overall overtime reform. We 
appreciated your time in talking about this yesterday. I hope 
that we can work with you and with the committee to do both the 
upgrade and the overtime reform because that is better for the 
agents and better for the taxpayer, ultimately, if we can put 
together the entire package.
    Senator Hutchison. Well, let me say that the Attorney 
General did call me yesterday and she said it is their 
intention to comply with that language, as well. And I do not 
think we can count on some kind of supplemental that will 
change the law. Perhaps there will be one, but I do not think 
we can count on it.
    So I am going to just ask you to start looking for the best 
way to assure that those raises go into effect on June 1, as we 
have directed and as both you and the Attorney General have 
said you believe is the law that you are required to implement.
    I want to work with you on the pay reform that you 
described to me yesterday. As I understand it, it looks quite 
reasonable and I do hope that we can enact that October 1, but 
not in lieu of the June 1 relief that would give our agents the 
absolute understanding that we appreciate the hard job they are 
doing and we want them to be compensated as other law 
enforcement agents are that have similar responsibilities.
    So we will work on October 1 but not in lieu of June 1. So 
we just have to work through that in the best way that we can 
to make sure that that retention is the goal, June 1, as we put 
in the law last year.
    Secondly, I want to say I am pleased that you are now 
testing on the border, which is a suggestion that we made to 
try to increase the pool of applicants, and I am glad that that 
is working.
    I would also just ask you to look at something that we have 
talked about before and that is bonuses for Spanish language 
proficiency. I would like for you to look at whether you could 
save money for hiring Spanish teachers and put that into 
recruitment bonuses for people who are proficient in Spanish 
and might be better able to hit the ground running on the 
Border Patrol.
    And last but not least, I just want to say that Senator Kyl 
had to leave. He was here because, of course, he is very 
concerned about the increase in activity on the Arizona border. 
Half of the drugs and illegal immigrants coming into the United 
States from Mexico flow through Texas, chiefly from McAllen, 
Laredo, and Del Rio sectors. Two of Mexico's four biggest drug 
cartels--the Gulf and the Juarez cartels--operate directly 
across from communities in Texas.
    So we cannot let up. Four hundred thirty new agents is not 
enough. It is not sufficient, and I do not want to micromanage 
your agency and neither does Senator Gregg and neither does 
Senator Hollings, nor does Senator Campbell and nor does 
Senator Domenici or Senator Kyl, but we are frustrated because 
we have been very clear in the mandates. And I think the agency 
has been hampered by an administration that is putting its 
priorities elsewhere and by a lack of creativity in recruiting 
and retaining.
    So I hope that we can continue to work together because we 
are not succeeding. And as long as we have a continued influx 
of illegal immigrants, and we have just heard stories that are 
unacceptable, I would associate myself with Senator Domenici's 
remarks regarding incarceration of illegal immigrants and the 
cost to my State, just as Senator Domenici's State. It is 
unacceptable. We have got to step up to the plate with the 
Federal responsibility to have the integrity of our borders. 
That is one of the very few purely Federal responsibilities 
that we have and we are not meeting the test because we have an 
administration that is looking at other things that are not a 
Federal priority, that are State priorities.
    So I would just ask you to relay to the President and to 
the Attorney General that we want to do the Federal job that we 
are responsible to do and that is have integrity on our borders 
so that illegal drugs do not go through these cartels into all 
parts of our country and so that we get control of illegal 
immigration on our borders. We are giving you the resources to 
do it, and we just ask you to please adhere to the mandates 
that we have given this agency and go forward with 1,000 new 
Border Patrol agents and start making up for lost time in not 
putting enough front-line Border Patrol agents on our borders 
all the way across, to stop this flow of illegal activity.
    Thank you, Mr. Chairman.
    Senator Gregg. Thank you.
    We do have Director Freeh and Acting Administrator Marshall 
still to testify this morning. Are there other folks who have 
further questions?

             EQUIPMENT FOR BORDER PATROL

    I did have one point I wanted to make, Commissioner, 
following up on what Senator Hutchison just said. This 
committee last year was very specific about wanting money spent 
on new equipment for the Border Patrol. The committee has been 
informed by the chief of the Border Patrol that they do not 
intend to spend the money on the equipment that the committee 
directed them to.
    If that occurs, this committee is going to take that very 
seriously and there may be no chief of the Border Patrol 
anymore, or at least funded by this committee. But I can assure 
you that the directives of this committee in the area of 
equipment, in the area of hiring Border Patrol, in the area of 
enforcing our borders, are going to be complied with. We do 
have the final say in this exercise and the fact that this 
administration has flaunted the desire of Congress to beef up 
the Border Patrol, beef up its capability to take action on the 
border and has ignored the efforts of this Congress to try to 
increase Border Patrol activity is something that we take very 
seriously.
    So we are less than impressed with the response of the 
Border Patrol to our request.
    Ms. Meissner. Senator, could I please respond to that?
    Senator Gregg. Yes.
    Ms. Meissner. The question of technology for the Border 
Patrol is essential. Technology is absolutely essential. We 
have said from the outset that our efforts with the Border 
Patrol have to be a combination of people, equipment, and 
technology. We have asked for technology in every budget; the 
committee has been very generous in funding technology. We 
stand by that and we want to put as much money into technology 
as we possibly can.
    The earmark that the committee made last year of $22 
million for technology is an earmark that we will comply with. 
I think that the conversations that took place at the staff 
level, we were talking past each other. We need the technology, 
and we will identify the technology. We gave you a report last 
year, and we would like to update it based on more information 
that we have at the present time. I think that what we want to 
be able to do is work with you on the best kinds of technology 
and technologies that we know work and are effective. It is 
particularly important as we go into the more remote areas, 
which is the case now on the southern border and will be the 
case as we accelerate on the northern border.
    So I would hope that I could provide you with the 
understanding and the clarification, here, that our commitment 
to technology is unfailing. I have strong confidence in the 
chief's judgment on the overall direction of the Border Patrol, 
as well as the kind of technology that is helpful and that our 
agents use effectively. If we could please work together on 
this, I think that we can come up with a technology package 
that meets everybody's needs and the Congress's wishes.
    Senator Gregg. That would be good. This committee has been 
committed to funding an expansion of the Border Patrol not only 
in personnel but in detention capability and in facilities and 
in equipment, and we are totally committed to continuing to 
fund that. We intend to aggressively fund that but when we fund 
it, we do expect the money to be spent on those efforts and not 
to be put into other functions.
    So we would be happy to work with you on that and hope that 
we can reach a common purpose.
    Ms. Meissner. I hope so and I believe we will be able to. I 
appreciate that.
    Senator Gregg. Thank you.
    Senator Domenici. Mr. Chairman, could I submit two 
questions in writing?
    Senator Gregg. Certainly.
    Senator Gregg. Thank you, Commissioner.
                    Federal Bureau of Investigation

STATEMENT OF LOUIS J. FREEH, DIRECTOR

                    Drug Enforcement Administration

STATEMENT OF DONNIE R. MARSHALL, ACTING ADMINISTRATOR

                        REMARKS OF SENATOR GREGG

    Senator Gregg. We are going to turn now to and hear both 
Acting Administrator Marshall of the DEA and Director Freeh. We 
will ask them both to appear before the committee at the same 
time to expedite their time so that we do not unnecessarily 
hold them up.
    First let me welcome Administrator Marshall. This is his 
first appearance before the committee, and we appreciate his 
stepping into the shoes of Administrator Constantine. We know 
that he will continue the excellent job that has been done at 
DEA.
    Of course it is always a pleasure to have Director Freeh 
before the committee.
    Again, I have no opening statement. Do you have an opening 
statement?
    Senator Hollings. No, thank you.
    Senator Gregg. And to expedite your time, gentlemen, if you 
want to submit your statements and go to questions, that would 
be great. Or if you want to make your statements, that is fine, 
also. We will begin with you, Director Freeh.

       OPENING STATEMENT OF FBI DIRECTOR FREEH

    Mr. Freeh. Senator, I will just make a very brief statement 
with your kind invitation.
    Senator Hollings, good morning.
    My statement is well prepared. I do not want to take any of 
the committee's time to repeat it. Let me just make several 
points.

            SUPPORT OF THE FBI'S MISSION

    First of all, let me thank you, Mr. Chairman and Senator 
Hollings and this committee, for what has really been 
historical and extraordinary support for the FBI's mission. I 
know that, first-hand since September of 1993, in all the areas 
where we protect our country and the people who live here, as 
well as around the world, whether those be counterterrorism 
issues, organized crime issues, drug trafficking issues, 
pedophiles on the Internet, terrorists, or espionage, this 
committee particularly has given the FBI and the country the 
tools, the technology to make those assets force-multipliers, 
as the spies and terrorists have done with technology. And your 
particular support and attention to infrastructure issues, to 
tools and skills, to analytical capabilities has been 
absolutely outstanding and I want to just thank all the members 
of the committee for that.
    We face a lot of challenges ahead of us. After 6 1/2 years 
leading the FBI, I guess my greatest concern is not the quality 
of the people who serve our country. We have, as you know, over 
99,000 young men and women who have applied to be FBI agents 
and we are honored and delighted with that. Most of them are 
qualified to perform the job. I am glad that I was an FBI agent 
in 1975. I do not think I could get into the FBI right now. I 
would not hire me if I were applying in the competitive pool 
that we have, that we are really blessed with.
    So we are always going to have the people. We have the 
individuals dedicated to the things that are critical to 
protect our democracy and our values. I am not worried about 
that. I am worried about the technology. I continue to be 
concerned about our competency to work in the venues where we 
now work, which are computer venues, and high-tech venues. 
There are analytical worlds where we find ourselves, with 
people able to do the job but not in every case the tools and 
technology. And, as I said, I am extremely thankful to this 
committee for the support that you have given us.
    I guess my message, finishing up my sixth year is that we 
cannot fall down on the technology job, that those tools and 
skills that you have given us have a short shelf-life. 
Technology and software in some cases, as you know, gets 
rewritten every 18 months. So we cannot stop or fall down on 
the job of technology support, or tools and skills and the 
analytical and technical ability to do our job. I am very 
concerned for that and I just would make that my theme and that 
is certainly reflected in our initiatives.
    Of the eight initiatives that we asked for consideration 
for the 2001 budget, really only three of them are operational: 
counterintelligence, counterterrorism, and a violent crime 
initiative. The other five go to infrastructure, investigative 
support, technology, analytical ability, and Law Enforcement 
Services. I think that is the margin that we have to maintain 
if we are going to stay active and competent in the 21st 
century.

                           PREPARED STATEMENT

    So thank you very much and I would be pleased to answer any 
of your questions.
    Senator Gregg. Thank you, Director.
    [The statement follows:]

                  Prepared Statement of Louis J. Freeh

    Good morning, Mr. Chairman and members of the Subcommittee. Once 
again, I am pleased to discuss the fiscal year 2001 budget request for 
the Federal Bureau of Investigation (FBI). It is a privilege to be 
joined by Donnie Marshall, the Acting Administrator for the Drug 
Enforcement Administration, and Doris Meissner, the Commissioner for 
the Immigration and Naturalization Service.
    The work of the FBI, whether it is catching criminals, drug 
traffickers, terrorists, and spies; providing training, investigative 
assistance, and forensic and identification services to our law 
enforcement partners; or developing new crime-fighting technologies and 
techniques, is made possible by the strong support of this 
Subcommittee. On behalf of the men and women of the FBI, I thank you.

              OVERVIEW OF FISCAL YEAR 2001 BUDGET REQUEST

    For fiscal year 2001, the FBI is requesting a total of 
$3,280,749,000 and 25,635 permanent positions (10,752 agents) for its 
Salaries and Expenses and Construction appropriations. This request 
includes direct program increases totaling 360 new positions, including 
65 new agents, and $165,692,000 for eight budget initiatives: 
Counterintelligence; Information Collection, Management, and Analysis; 
Training; Investigative Support; Counterterrorism; Violent Crimes; 
Technology/Cyber Crimes; and Law Enforcement Services.
    In addition to direct funded resources, the fiscal year 2001 budget 
request assumes a total of 3,586 reimbursable positions (1,076 agents) 
and 3,453 workyears. For fiscal year 2001, the Administration is 
proposing to implement a user fee to pay for the costs of operating the 
National Instant Criminal Background Check System (NICS). The FBI 
estimates that the NICS program will require a total of 642 positions 
and workyears to operate, at a cost of $71,552,000, which would be 
provided by fees. This amount includes funding to implement a program 
of notifying appropriate State or local law enforcement when an 
ineligible person attempts to purchase a firearm. Under the auspices of 
the Interagency Crime and Drug Enforcement (ICDE) program, the FBI 
would be reimbursed for a total of 981 positions (592 agents) and 
$112,468,000 for FBI drug and gang-related task force investigations 
and operations. Pursuant to the Health Care Insurance Portability and 
Accountability Act of 1996, the FBI will receive $88,000,000 in fiscal 
year 2001 to fund 776 positions (445 agents) for health care fraud 
enforcement.
                          COUNTERINTELLIGENCE

    Despite the fall of the Iron Curtain and the emergence of democracy 
in many of the countries formerly under the rule of communism, the 
threat posed to U.S. national, military, and economic security from 
foreign countries remains significant. Investigations in this area have 
become more complex as the focus of foreign intelligence services have 
expanded from traditional Cold War traditional military-related targets 
to new areas, including technology, intellectual property, and economic 
activity. The FBI continues to work closely with the intelligence 
community to identify and reduce the presence of hostile intelligence 
services in the U.S. To keep pace with the changing counterintelligence 
threat to the U.S., the FBI is proposing a counterintelligence 
initiative that would provide an additional $19,115,000 and 138 
positions (63 agents) for this mission-critical area.

            INFORMATION COLLECTION, MANAGEMENT, AND ANALYSIS

    To be successful, the FBI must have the capacity for collecting, 
storing, managing, analyzing, and disseminating case and intelligence 
information on a timely basis to its own investigative personnel, as 
well as other federal, State, and local law enforcement and the 
intelligence community. Existing systems and capacities must be 
upgraded to meet increased investigative demands. New technologies also 
present opportunities for making for effective and timely use of case 
information and intelligence currently being collected. For fiscal year 
2001, the FBI is requesting a total of $74,227,000 and 74 positions to 
enhance its information collection, management, and analysis 
capacities.
    Digital Collection Systems.--Since 1968, the Congress has provided 
the FBI and other federal law enforcement agencies with authorities 
that can be used under certain conditions during investigations of 
criminal activities to conduct electronic surveillance, including the 
interception of voice and data communications. Authorities governing 
the conduct of electronic surveillance in national security 
investigations were passed by the Congress in the Foreign Intelligence 
Surveillance Act. These authorities carefully balance each citizen's 
Fourth Amendment rights under the Constitution with law enforcement's 
mission to protect national security and maintain public safety.
    For fiscal year 2001, the FBI is requesting an increase of 
$25,300,000 and four positions to begin a multi-year project for 
replacing existing analog-based collection systems in each of its 56 
field offices with new digital collection systems. The new digital 
systems will use both off-the-shelf commercial and specially-developed 
technology. Digital technology presents the means for obtaining higher 
quality and clearer recordings, which, in turn, will allow the FBI to 
improve the processing, translation, dissemination, and analysis of 
materials. New digital systems would also be compliant with digital-
based solutions being implemented by the telecommunications industry 
under the Communications Assistance for Law Enforcement Act (CALEA) of 
1994. Within a few years, analog access to conduct court-authorized 
intercepts of communications will disappear.
    Additionally, the fiscal year 2001 budget proposes an allocation of 
$10,000,000 from the Department of Justice Assets Forfeiture Fund Super 
Surplus, if available, for a multi-year initiative for storing, 
archiving, and managing lawfully collected electronic surveillance 
intelligence and evidentiary materials. This database would facilitate 
integration of electronic surveillance data with the FBI's Information 
Sharing Initiative.
    Information Sharing Initiative.--The underlying information 
technology infrastructure of the FBI is not adequate to meet either the 
present-day or near-term information technology needs and capacities of 
the FBI's criminal investigative and national security programs. To 
establish the requisite information technology infrastructure and 
develop the data processing, analysis, and dissemination capacities 
considered essential to satisfy criminal investigative and national 
security requirements, the Information Sharing Initiative strategy was 
developed.
    To date, Congress has supported the FBI by making $80,000,000 
available for investment in the Information Sharing Initiative 
strategy, including $20,000,000 in fiscal year 2000 and $60,000,000 in 
fiscal year 1999. Consistent with Congressional instructions, none of 
these funds have not been obligated. The FBI continues to consult with 
the Congress to obtain the necessary concurrence for the Information 
Sharing Initiative strategy. The fiscal year 2001 budget proposes an 
investment of $60,000,000 for the Information Sharing Initiative, 
consisting of $20,000,000 in base funding and $40,000,000 in new 
funding. Additionally, $838,000 is requested to hire 15 new computer 
specialists to support equipment installation and operations.
    Language Services.--FBI investigations are increasingly affected by 
international criminal activities and emerging criminal enterprises and 
alliances that transcend national boundaries. The FBI's success in 
preventing international crime groups from establishing criminal 
operations in the U.S., as well as investigating those criminal 
activities that do occur, depends upon the capability to translate both 
foreign language conversations recorded during court-authorized 
electronic surveillance and records, documents, and other materials 
obtained during the course of an investigation.
    In addition to employing a cadre of translators, the FBI uses the 
services of contract linguists for short-term, mission-critical 
criminal and national security investigations. Contract services are 
especially critical for supporting an increasing number of FBI cases 
involving less commonly spoken languages. The FBI has not been able to 
translate all of the recorded audio conversations and documents it has 
obtained during investigations. To provide more timely translation 
services for investigations, the fiscal year 2001 budget proposes an 
increase of $5,000,000 for contract translation services.
    Intelligence Analysts.--The FBI Strategic Plan recognizes the key 
role and importance of intelligence in each of its criminal 
investigative and national security programs. To maximize the use of 
existing intelligence resources and to develop the necessary integrated 
intelligence capacity needed for the future, the FBI recently 
consolidated criminal and national security intelligence analysts under 
the management of the Investigative Services Division at FBI 
Headquarters. An aggressive initiative to enhance FBI analytical 
capabilities, the Intelligence Capabilities for the Millennium (ICAP-
2000), is being undertaken to establish standardized core skills and 
competencies and to develop a training curriculum for analysts. In 
addition to enhancing the capabilities of existing analysts, there is a 
need for additional analysts to support investigators at the field 
level with case, or tactical, intelligence and national program 
managers at FBI Headquarters with strategic intelligence.
    To improve its analytical capabilities, the fiscal year 2001 budget 
proposes an increase of $3,089,000 to hire 55 new Intelligence Research 
Specialists (IRS) for national security investigations. Twenty eight 
(28) IRSs would be allocated to FBI field offices to assist case agents 
through the development of tactical analysis and 27 IRSs would be 
assigned to FBI Headquarters to support national program managers 
through the development of strategic analysis.

                                TRAINING

    The FBI's ability to respond to the difficult and complex 
challenges from crime, threats of terrorism, and hostile intelligence 
services, requires a well-trained workforce that possesses the skill 
sets needed to be effective in their jobs. The importance of training 
in today's law enforcement environment is further heightened by the 
rapid pace of technological change and the changing scope of the FBI's 
investigative mission. In April 1999, the FBI adopted a comprehensive 
policy for the continuing development and training of FBI employees 
that emphasizes the importance of training and continuous learning. 
Under this new policy, all FBI Agents and support employees are now 
required to obtain the equivalent of no fewer than 10 hours of 
developmental training annually, and over a 3-year period, not less 
than 50 hours of developmental training. The FBI will use traditional 
``classroom'' training at the FBI Academy, distance learning, 
specialized training from vendors, and computer-based, interactive 
technology to assist employees in satisfying this requirement. For 
fiscal year 2001, the FBI proposes increases totaling $8,395,000 for 
training programs, technology, and firearms range modernization.
    FBI Academy Training.--The FBI's primary training venue is the FBI 
Academy, located at Quantico, Virginia. With the recent opening of the 
Justice Training Center, the FBI has regained approximately 20 percent 
of the Academy's dormitory capacity that was previously allocated for 
the Drug Enforcement Administration. This equates to being able to 
provide one-week of training to an additional 7,000 FBI employees. To 
make full use of the training and dormitory capacity of the FBI 
Academy, an additional $2,800,000 is required to pay for the travel of 
7,000 additional FBI students. Without this additional funding, the FBI 
will not be able to use the FBI Academy at its full capacity level.
    Interactive Multi-media Courses.--Not all FBI training requirements 
can be satisfied with one approach to training. Rather, a combination 
of classroom, distance-learning, and computer-based, multi-media 
instruction packages are needed to meet the varying needs and schedules 
of both training programs and individual students. Technology-based 
training methods provide an opportunity to deliver training to 
employees with a high degree of effectiveness, yet at a substantial 
cost savings over traditional ``on-site'' training.
    The FBI believes interactive, multi-media technology offers the 
potential for meeting training needs in several areas, particularly 
through self-paced courses on core topics such as informant 
development, interviewing and interrogation, and case management. An 
initial CD-ROM based multi-media course, ``Interview and 
Interrogation,'' has proven very successful and has been incorporated 
into the New Agent training curriculum. The course is also used by more 
experienced field agents to refresh their knowledge and skills. The FBI 
has made copies of the course available to all federal, state, and 
local law enforcement. Funding totaling $1,500,000 is requested to 
prepare four additional interactive, multi-media courses on the topics 
of Informant Development, Basic Criminal Investigation, Leadership and 
Management, and Ethics.
    Development of Analytical Capabilities.--The FBI cannot achieve the 
goals of its strategic plan without a substantial improvement in the 
skills and expertise of its existing analytical cadre. All 
investigative program managers have cited weaknesses in analytical 
capability as a key shortfall in their ability to undertake proactive 
investigations and identify emerging groups and crime trends. To 
correct these shortfalls and assure quality analysis, all FBI analysts 
must achieve a high standard of professional skill and expertise.
    In recognition of this situation, the FBI has begun a multi-year 
initiative, the Intelligence Capabilities for the Millennium (ICAP-
2000), to overhaul the existing analytical infrastructure. The 
development and implementation of a comprehensive, standardized 
training program is a central component of this effort. For fiscal year 
2001, an increase of $1,000,000 is requested for analytical training 
programs. This funding will allow the FBI to provide analysts with 
basic training in FBI investigative programs and techniques, analytical 
thinking, briefing techniques, report writing, and critical analytical 
technologies, such as telephone analysis. Additionally, analysts would 
be afforded advanced training in specialized areas and substantive 
issues, such as money laundering, narcotics trafficking, denial and 
deception techniques, and foreign area studies, that will enhance 
individual areas of expertise and knowledge.
    Specialized Training.--FBI criminal and national security 
investigations often depend upon the use of sophisticated technical 
equipment, systems, and techniques that gather evidence of illegal 
activities and/or intelligence information on planned activities. Each 
FBI field office requires specially trained personnel--Technically 
Trained Agents and Electronic Technicians--who support the use of these 
systems and techniques during investigations and surveillances.
    The current complement of Technically Trained Agents is being 
stretched thin by both increasing operational requirements and the loss 
of experience due to recent retirements, reassignments, and promotions. 
Additionally, due to the fast-pace of changes in technology, both 
Technically Trained Agents and Electronic Technicians require an on-
going program of technical instruction. This specialized instruction is 
provided at both the Engineering Research Facility located at the FBI 
Academy and through commercial sources. An increase of four positions 
and $1,195,000 is requested in fiscal year 2001 for FBI Technically 
Trained Agents and Electronic Technicians training programs.
    FBI Academy Firearms Range Modernization.--With the support of the 
Congress, the FBI has undertaken a plan to modernize the FBI Academy 
Firearms Ranges. The existing ranges need modernization to increase 
capacity, minimize environmental impact, and improve the safety of FBI 
and Drug Enforcement Administration firearms training. With funding 
previously provided, the FBI has completed an environmental assessment, 
developed a master plan for the project, and completed architectural 
engineering and design. Remaining funding available will also allow us 
to compete a contract for construction of three 25-yard all-weather 
ranges, a stress obstacle course, and lead abatement.
    For fiscal year 2001, an increase of $1,900,000 is requested to 
continue the FBI Academy Firearms Range Modernization project. This 
funding would allow the FBI to continue lead abatement and construct an 
ammunition storage facility. This facility would replace two existing, 
makeshift storage facilities that do not comply with existing 
Department of Defense safety standards, which is a requirement due to 
the location of the ranges at the U.S. Marine Corps Base, Quantico.

                         INVESTIGATIVE SUPPORT

    The Investigative Support budget initiative address increased 
funding requirements for the daily basic operational requirements of 
field investigators and FBI Headquarters. The fiscal year 2001 budget 
proposes increases totaling $20,534,000 for four key items: 
telecommunications services, criminal case operations funds, digital 
body recorders, and program management support for implementation of 
the Communications Assistance for Law Enforcement Act (CALEA) of 1994.
    Telecommunications Services/ATM Circuits.--The FBI operates a 
telecommunications infrastructure that was designed in 1991 to support 
the Systems Network Architecture (SNA)/token ring network. This network 
currently serves over 600 separate FBI locations and has been 
maintained with few changes. This design is ill-suited to supporting 
electronic case files that, under the proposed Information Sharing 
Initiative (ISI), will include imaged documents, video/voice segments, 
and intelligence analyses. To satisfy the requirement for increased 
bandwidth for transmitting images, video, and voice, the FBI is 
migrating to the Asynchronous Transmission Mode (ATM) adopted by the 
Department's Justice Consolidated Network (J-CON).
    For fiscal year 2001, the FBI is requesting an increase of 
$14,334,000 to begin the acquisition of ATM circuits to support its 
telecommunications network. For fiscal year 2001, the FBI intends to 
provide ATM circuits for key network concentration sites, large field 
offices, FBI Headquarters, the FBI Academy, the Clarksburg, West 
Virginia, fingerprint card processing center, and larger resident 
agencies. The migration to ATM circuits is being staged with the 
implementation plan for the ISI project.
    Criminal Case Funds.--The FBI Strategic Plan recognizes the 
importance of gathering, analyzing, and disseminating intelligence and 
of focusing investigative efforts against criminal activities with a 
regional, national, or international nexus. Information supplied by 
informants and cooperating witnesses often serves as the predicate for 
these types of major, long-term investigations. Criminal organizations 
of the type, scope, and complexity investigated by the FBI have both 
the illicit wealth and intense loyalty (maintained by fear of violent 
reprisal) that frustrate traditional law enforcement investigative 
efforts. To counter this challenge, the FBI requires funding for a 
range of case operational costs, such as the lease of telephone lines 
to conduct court-authorized interceptions of communications, the rental 
of off-site space, lease of covert vehicles, witness protection 
expenses, and covert travel by undercover agents, informants, and 
cooperating witnesses.
    For fiscal year 2001, the FBI requests an increase of $2,100,000 
for criminal case operating funds and the purchase of information.
    Digital Body Recorders.--Audio recordings of conversations between 
or among subjects of a criminal investigation and informants, 
undercover agents, or cooperating witnesses often provide clear 
evidence of an individual's involvement in illegal activities. These 
recordings are made in strict compliance with existing guidelines and 
statutes. The evidence obtained from consensual-monitoring is used 
extensively in court to demonstrate the complicity of a person in a 
criminal activity. The investigative environment in which this 
investigative technique is used presents a high risk to the personal 
safety of the person wearing a recording device. New digital technology 
allows for much smaller and less conspicuous devices, as well as 
improvements in recording clarity and capacity. Additionally, digital 
devices are less susceptible to commercially-available countermeasures 
technology used by criminals to detect the presence of these devices.
    The FBI is requesting an increase of $2,000,000 to replace existing 
analog body recorder devices with newer digital devices.
    CALEA Implementation Support.--The Attorney General has delegated 
to the FBI responsibility for managing the implementation of the CALEA. 
The FBI has adopted a three-phase approach toward achieving CALEA 
compliance. Phase One consists of working with telecommunications 
manufacturers and carriers to describe law enforcement's technical 
capability and capacity-related electronic surveillance needs. Phase 
Two consists of resolving and finalizing the legal and regulatory 
issues regarding implementation. Phase Three consists of ensuring CALEA 
compliance by working with carriers as solutions are deployed, 
assisting carriers as Systems Security and Integrity rules and 
procedures are adopted, and seeking enforcement against carriers for 
noncompliance. These phases remain consistent regardless of the 
specific telecommunications technology being pursued. The FBI's current 
focus is on achieving the deployment of CALEA solutions for wireline, 
cellular and broadband Personal Communications Systems (PCS) 
technology.
    By fiscal year 2001, emerging technologies service providers of 
Enhanced Specialized Mobile Radio, two-way paging, and Mobile Satellite 
Service will have grown and possibly exceed the number of cellular and 
PCS carriers today. These technologies fall within the scope of the 
CALEA and require adherence to law enforcement technical and capacity 
requirements. The fiscal year 2001 budget request includes an 
enhancement totaling $2,100,000 for CALEA implementation support 
activities, including support for the Law Enforcement Technical Forum, 
facilities operations, and travel related to consultation, standards, 
regulatory, and solution development activities.

                            COUNTERTERRORISM

    The United States continues to face a serious, credible threat from 
terrorists both abroad and at home. The number of groups and 
individuals capable of carrying out a terrorist act has increased over 
the past several years. Of particular concern to the FBI are groups and 
individuals for which political or religious beliefs constitute 
sufficient motivation for carrying out a devastating terrorist act.
    To deal effectively with domestic and international terrorism, the 
FBI must concentrate on both prevention and response. The FBI's 
counterterrorism strategy is focused upon five inter-related elements 
to build and maintain an operational capacity for identifying, 
preventing, deterring, and investigating terrorist activities. First, 
the FBI must have the capacity to respond to acts of terrorism 
committed in the U.S. and abroad when those acts are directed against 
the U.S. government or its interests. Second, the FBI must have the 
capacity to receive, react to, and disseminate counterterrorism 
information. Third, the FBI must develop its internal capacities to 
support proactive counterterrorism programs and initiatives. Fourth, 
the FBI must have the capacity to establish and maintain sound and 
productive relationships with other domestic and foreign law 
enforcement and intelligence counterparts. Fifth, the FBI must have the 
capacity to use all of the necessary assets and capabilities of the FBI 
and other U.S. government agencies to support and initiate complex 
investigations and operations against domestic and international 
terrorists and terrorist organizations. For fiscal year 2001, the FBI 
is requesting increases totaling $13,100,000 to improve and enhance 
existing counterterrorism initiatives.
    Weapons of Mass Destruction Preparedness.--At the forefront of U.S. 
government counterterrorism planning and preparation efforts is the 
threat of chemical and biological terrorism. Internationally, there is 
credible intelligence that terrorist organizations are attempting to 
acquire a capability for weapons of mass destruction. Domestically, a 
growing number of individuals acting alone and splinter elements within 
extremist groups have obtained or attempted to develop and employ 
chemical, biological, or radiological materials. Within the spectrum of 
terrorist threats, the FBI continues to believe the actual threat of a 
chemical or biological terrorist attack to be low; however, the 
consequences of such an act could be devastating. To continue on going 
efforts to prepare for a terrorist event using weapons of mass 
destruction, the FBI is requesting an increase of $3,500,000.
    The National Domestic Preparedness Office (NDPO) was established to 
serve as the focal point for federal efforts in support of the State 
and local emergency responder community. The NDPO, which is managed by 
the FBI and is staffed by representatives from other federal agencies 
and State and local detailees, is organized around six program areas: 
planning, training, exercises, equipment/research and development, 
information sharing and outreach, and public health and medical 
services. For fiscal year 2001, an increase of $563,000 is requested by 
the FBI for NDPO principal stakeholder and functional area conferences.
    Funding is proposed in the fiscal year 2001 budget for the 
Department of Justice to assume responsibility for several activities 
currently being performed by the Department of Defense under the 
auspices of the Domestic Preparedness Program. The budget proposes that 
the NDPO assume responsibility for the Chemical and Biological Helpline 
which provides emergency responders and planners across the United 
States with information on a non-emergency basis to plan, mitigate, and 
prepare for the effects of a chemical or biological terrorist incident. 
The cost of assuming helpline operations is $731,000. Additionally, the 
Weapons of Mass Destruction Operations Unit within the Counterterrorism 
Division at FBI Headquarters would assume responsibility for the 
Chemical and Biological Hotline operated by the National Response 
Center. The hotline receives incident information and provides 
technical assistance during a suspected or actual chemical or 
biological incident. The cost of assuming hotline operations is 
$2,206,000.
    2002 Winter Olympics Preparation.--The 2002 Winter Olympic Games 
have been designated a National Special Security Event. Consistent with 
responsibilities for intelligence collection and crisis management 
contained in PDD-39 and PDD-62, the FBI is working with the United 
State Secret Service and other federal, State, and local law 
enforcement and consequence management agencies to plan for security 
and public safety issues for the 2002 Winter Olympic Games that will be 
hosted by Salt Lake City, Utah.
    For fiscal year 2001, the FBI requests increases totaling 
$1,100,000 for 2002 Winter Olympic Games preparation. This funding will 
support planned interagency training exercises, the acquisition of 
telecommunications and related equipment for a joint interagency 
operations/intelligence center, and specialized cold weather equipment.
    Hazardous Devices School.--The Hazardous Devices School is the only 
formal domestic training school for State and local law enforcement to 
learn render safe and bomb disposal operations. Located at Redstone 
Arsenal, Huntsville, Alabama, the school is managed by the FBI 
Laboratory. The Hazardous Devices School is the only location where 
bomb technicians receive basic training and certification in accordance 
with standards established by the National Bomb Squad Commanders' 
Advisory Board. After receiving initial certification, technicians are 
required to be recertified every three years.
    For fiscal year 2001, there is a need to train 1,335 students at 
the Hazardous Devices School. To provide that level of training, the 
FBI requires an increase of $2,900,000.
    Counterterrorism Research and Development.--In fiscal year 1998, 
the Congress made available $10,500,000 to the FBI under the Attorney 
General's Counterterrorism Fund to initiate several research and 
development activities, including $5,000,000 for explosives detection 
and counterterrorism projects, $2,500,000 for data exploitation 
projects, $1,000,000 for cyber training curriculum development and 
training at the FBI Academy, and $2,000,000 to establish a partnership 
with the Southwest Surety Institute.
    For fiscal year 2001, the FBI requests an increase of $5,000,000 to 
continue and expand counterterrorism research and development projects 
initiated with fiscal year 1998 funding.

                             VIOLENT CRIMES

    The focus of the Violent Crimes budget initiative for fiscal year 
2001 is on improving federal law enforcement services in Indian 
Country. Native Americans and others living in Indian Country are not 
sharing in the decline in violent crimes that is occurring in countless 
other American communities. The homicide rate in Indian Country remains 
three times greater than the national average. Crimes against children, 
including sexual and physical assaults, continue to plague Indian 
Country. Youth gangs present a threat to public safety. Drug 
trafficking is becoming a major problem. Thirty-two FBI field offices 
have some degree of investigative responsibility in Indian Country, 
ranging from exclusive jurisdiction--19 field offices--to concurrent 
federal and state jurisdiction. For fiscal year 2001, the FBI is 
requesting an increase of $4,639,000 and 31 Victim/Witness Specialists 
to improve its services to Indian Country.
    Safe Trails Task Forces.--The FBI has adapted its successful Safe 
Streets Task Force concept to maximize the use of limited FBI, local, 
tribal, and Bureau of Indian Affairs staffing to address significant 
violent crime problems in Indian Country. The first Safe Trails Task 
Force was established in 1995 by the Phoenix Field Office to work on 
the Navajo Nation in Arizona. Presently, the FBI sponsors 10 Safe 
Trails Task Forces in Gallup, New Mexico; Carson City, Nevada; Green 
Bay, Wisconsin; Flagstaff, Arizona; Monticello, Utah; Riverton, 
Wyoming; Rapid City, South Dakota; Tucson, Arizona; Phoenix, Arizona; 
and Glasgow, Utah. These task forces are staffed by 31 FBI Agents, 2 
Bureau of Indian Affairs criminal investigators, 49 tribal police 
officers, and 19 local police officers.
    In some areas, an obstacle to full-time participation by a local or 
tribal law enforcement agency is a lack of funding for overtime and 
related costs. For fiscal year 2001, the FBI requests an increase of 
$634,000 for the overtime costs of State and local law enforcement 
participation on FBI-sponsored Safe Trails Task Forces.
    Indian Country Forensic Examinations.--The investigation and 
successful prosecution of crimes committed in Indian Country depends, 
first, upon investigators identifying and collecting evidence at crime 
scenes and, second, the timely examination and analysis of evidence. To 
address a growing workload of forensic examinations resulting from 
Indian Country investigations, and to improve the timeliness of results 
of forensic examinations to investigators and prosecutors, the FBI 
entered into a contract with the Arizona Department of Public Safety 
Laboratory for the examination of evidence collected at Indian Country 
crime scenes by agents assigned to our Phoenix Field Office. This 
arrangement has proven highly effective and successful.
    For fiscal year 2001, the FBI proposes to expand this program to 
include three additional field offices--Salt Lake City, which covers 
Utah, Idaho, and Montana; Minneapolis, which covers Minnesota, South 
Dakota, and North Dakota; and Albuquerque, which covers New Mexico. The 
estimated annual cost for these three additional contracts is 
$1,405,000.
    Indian Country Victim/Witness Services.--Among the most significant 
obstacles for the FBI and other law enforcement investigating crimes in 
Indian Country is overcoming the reluctance of Native American victims 
and witnesses to cooperate in the criminal justice system. Cooperating 
with the criminal justice process can often present a hardship to 
Native American victims living in Indian Country. Victims and witnesses 
of violent crimes in the Indian Country often live long distances from 
the offices and courtrooms of government attorneys, magistrates, and 
judges, where they must appear as participants in the judicial process. 
For example, a resident of the Turtle Mountain Indian Reservation must 
travel 600 miles round-trip to testify before a Federal Grand Jury in 
Minot, North Dakota. A child sexually abused on the Fort Peck 
Reservation in Montana must be transported 350 miles to Billings for a 
medical examination and evaluation. Victim/witness services, such as 
assistance with transportation, overnight lodging, and preparation of 
impact statements for sentencing, which are readily available to many 
citizens in urban, suburban, and rural communities are not accessible 
to those living in Indian Country.
    Through its Victim/Witness Assistance Program, the FBI is working 
to build confidence and cooperation in Indian Country. Presently, the 
FBI employs four Victim/Witness Specialists who are assigned to 
resident agencies covering Indian Country. While few in number, these 
individuals are contributing in a positive way. An FBI Victim/Witness 
Specialist in Billings, Montana, has helped the U.S. Probation Office 
implement an adult and juvenile sex offender treatment program on three 
area Indian reservations. She is also assisting the Crow Sex Offender 
Registration committee draft tribal legislation to register all sex 
offenders on the reservation. Victim/witness specialists assist FBI 
Agents by assisting in arranging for medical treatment, trial 
preparation, transportation to/from trials and other proceedings, and 
securing services to which they are entitled. For fiscal year 2001, the 
FBI requests an increase of $2,600,000 to hire 31 additional Victim/
Witness Specialists for assignment to FBI Resident Agencies serving 
Indian Country.

                        TECHNOLOGY/CYBER CRIMES

    In recent years, technological advances have fundamentally changed 
the way of life in this country. Computers and networks allow millions 
of individuals to access on a daily basis a broad range of information 
services, databases, commerce, and communications capabilities that 
were previously unavailable. A combination of reduced cost for computer 
technology and increased storage capacity allows the accumulation, 
storage, and management of large amounts of information by individuals 
on personal computers and peripheral devices. Most FBI investigations, 
especially those in organized crime, drug trafficking, crimes against 
children, white-collar crime, counterintelligence, and counterterrorism 
are encountering the use of computer technology to facilitate illegal 
activities. As a result, the FBI must develop the investigative and 
forensic capacities and capabilities to deal with the use of computer 
technology by criminals and others to commit crimes or undermine 
national security.
    For fiscal year 2001, the FBI's Technology/Cyber Crimes budget 
initiative proposes increases totaling 108 positions (2 agents) and 
$18,983,000 to enhance existing capabilities in three cybercrime 
fighting areas: data forensics, counterencryption, and Intellectual 
Property Rights investigations.
    Data Forensics.--One of the fastest growing demands from 
investigators and prosecutors is for assistance by the FBI Laboratory 
Computer Analysis and Response Team (CART) program for forensic 
examination of evidence obtained from computers and computer storage 
media. The data forensic process has three distinct phases: (1) 
acquisition, which involves recognizing and seizing electronic data of 
an evidentiary value from a computer, computer storage media, or 
computer network; (2) examination, which is the process of documenting 
the evidence, then locating, identifying, and extracting the pertinent 
data; and (3) presentation, which requires the formatting of relevant 
and technical evidence for use by investigators and prosecutors.
    The FBI's capacity for performing CART examinations is not keeping 
pace with the demand for CART assistance. In fiscal year 1999, the FBI 
was only able to satisfy 1,900, or 54 percent of the 3,500 requested 
CART examinations, resulting in a backlog of 10.1 months. By fiscal 
year 2001, the FBI projects the demand for assistance will increase to 
6,000 requests. Compounding the growth in the number of requests for 
assistance is a significant increase in the amount of data to be 
examined. Recently, hard disk drives have nearly doubled in storage 
capacity annually, from 4.3 gigabytes in 1997 to 8.4 gigabytes in 1998 
to 17 gigabytes in 1999. It is expected that hard disk drives of 
between 60 and 80 gigabytes will be available by the end of 2000. As 
the capacity of storage media grows, the amount of time needed to 
perform forensic examinations also increases. Without additional CART 
examiners and data forensics examination tools, the FBI will be unable 
to provide support to field investigators and prosecutors.
    Building a CART program capacity that will be able to deal with the 
demand for data forensics will require a commitment that includes 
hiring, training, and equipping additional examiners. To initiate such 
a commitment in fiscal year 2001, the FBI is requesting $8,571,000 to 
hire, train, and equip 100 new CART examiners for assignment to field 
offices (83 positions) and the FBI Laboratory (17 positions).
    Additionally, the FBI is requesting an increase of $2,800,000 to 
continue the development of the Automated Computer Examination System 
(ACES). ACES is used by CART examiners to automatically scan and review 
personal computer files for their format and type. Computer operating 
systems and applications software are continually upgraded and modified 
by industry. Similarly, the FBI must be able to upgrade ACES to keep 
pace with these changes, otherwise, ACES will lose its value as a 
forensic technique. The FBI intends to provide ACES to all FBI field 
offices, as well as other federal, State, and local law enforcement as 
part of an effort to build data forensics capacities at all levels of 
law enforcement.
    Counterencryption.--The widespread use of digitally-based 
technologies and the expansion of computer networks incorporating 
privacy features and capabilities through the use of cryptography 
presents a significant challenge to the continued ability of law 
enforcement to use existing electronic surveillance authorities. The 
FBI is already encountering strong encryption in criminal and national 
security investigations. In 1999, 53 new investigations encountered 
encryption. The need for a law enforcement cryptanalytic capability is 
well documented in several studies, including the National Research 
Council's 1996 report entitled, ``Cryptography's Role in Securing the 
Information Society.'' The report recommends high priority be given to 
the development of technical capabilities, such as signal analysis and 
decryption, to assist law enforcement in coping with technological 
challenges.
    The Administration supports the enhancement of a centralized law 
enforcement capability within the FBI for engineering, processing, and 
decrypting lawfully intercepted digital communications and 
electronically stored information. For fiscal year 2001, the FBI 
requests an increase of $7,000,000 to further develop an initial 
operating capability that will allow law enforcement to obtain plain 
text and meet the public safety challenges posed by the criminal use of 
encryption. With this funding, the FBI intends to work with existing 
national laboratories and other government agencies to ensure all 
existing resources are used in executing processing functions. This 
approach will prevent duplication of effort. Additionally, the FBI 
plans to acquire necessary computer hardware, software tools, technical 
expertise, and services to develop capacities in four counterencryption 
program areas: (1) analytical engineering; (2) signal analysis 
research; (3) counterencryption deployment; and (4) industry-assisted 
technology transfer.
    Intellectual Property Rights.--Currently, the U.S. is the world 
leader in the development of creative, technical, and intellectual 
property. The U.S. economy is increasingly dependent on the production 
and distribution of intellectual property. Intellectual property right 
infringement includes both violations of the Economic Espionage Act as 
well as traditional copyright and trademark violations. A growing 
percentage of intellectual property right violations now have an 
Internet element. Web sites can be accessed that allow individuals to 
distribute and download pirated materials, resulting in substantial 
losses to U.S. companies that invest millions of dollars in product 
development.
    For fiscal year 2001, the FBI is requesting an increase of 8 
positions (2 agents) and $612,000 to help staff an interagency 
Intellectual Property Rights Center. The center, which is expected to 
become operational in 2000, was conceived by the FBI, Department of 
Justice, and United States Customs Service, to improve the coordination 
of intellectual property rights investigations and to enhance the 
exchange and analysis of intelligence on these types of activities. All 
government agencies having responsibility for intellectual property 
rights matters, including the Office of the U.S. Trade Representative, 
the Patent and Trademark Office, and the Copyright Office, will be 
invited to participate.

                        LAW ENFORCEMENT SERVICES

    For fiscal year 2001, the FBI is requesting an increase of 5 
positions and $6,699,000 for its Law Enforcement Services budget 
initiative.
    Federal Convicted DNA Offender Database.--All 50 states have 
enacted legislation that requires blood samples to be taken from felons 
convicted of various qualifying offenses. DNA profiles from these blood 
samples are entered into the Combined DNA Identification System 
(CODIS). Presently, individuals convicted of comparable offenses in 
federal courts, military courts, and the District of Columbia are not 
required to submit blood samples. Consequently, these populations of 
violent criminals who may be released back into our communities, 
including those convicted of sexual assaults against children, are not 
in the CODIS. As a result, when a law enforcement agency compares DNA 
recovered at a crime scene against CODIS, the database will not contain 
samples from persons who may be logical suspects because DNA profiles 
from federal, military, and District of Columbia offenders are not 
available.
    Funding totaling $5,335,000 and 5 positions are requested to 
implement the Federal Convicted Offenders DNA Database, which was 
authorized by the Anti-Terrorism and Effective Death Penalty Act of 
1996. Implementation of this database requires clarifying legislative 
authority, which has been submitted to the Congress by the Department 
of Justice. This funding would allow the collection and processing of 
DNA samples from an estimated 20,000 individuals currently incarcerated 
after being convicted in federal, military, and District of Columbia 
courts of qualifying offenses.
    National Integrated Ballistics Identification Network (NIBIN).--In 
December 1999, the FBI and the Bureau of Alcohol, Tobacco, and Firearms 
(BATF) entered into a Memorandum of Understanding for joint agency 
implementation of the NIBIN, a single federal ballistics imaging 
system. NIBIN will combine the best features of the BATF Integrated 
Bullet Identification System and the FBI DRUGFIRE system. Under the 
provisions of the agreement, the FBI is responsible for the nationwide 
NIBIN communications network and connectivity between system sites and 
the national network. BATF is responsible for NIBIN hardware and 
software development and installation, training, security, maintenance, 
user protocols and support, and quality control. This joint, integrated 
approach to ballistic imaging will benefit all federal, state, and 
local law enforcement agencies by ending the competition between 
systems and providing law enforcement with enhanced crime-fighting 
technology from the FBI and BATF.
    Under the agreement, BATF will replace existing DRUGFIRE systems, 
subject to the availability of funds. BATF plans to replace 10 DRUGFIRE 
units in 2000, 73 in 2001, and 68 in 2002. During the transition 
period, the FBI will continue to support DRUGFIRE systems not yet 
replaced and NIBIN communications requirements. For fiscal year 2001, 
the FBI requests an increase of $1,364,000 for NIBIN connectivity. The 
FBI is using its existing nationwide Criminal Justice Information 
Services--Wide Area Network (CJIS-WAN) as the communications backbone 
for NIBIN.

                 RELATED DEPARTMENTAL FUNDING REQUESTS

    Mr. Chairman, I would like to highlight several requests for 
funding included within other Department of Justice programs that are 
considered important to FBI initiatives and programs.
    Telecommunications Carrier Compliance Fund.--Within the General 
Administration appropriation, a total of $120,000,000 is proposed for 
the Telecommunications Carrier Compliance Fund (TCCF). These funds, 
along with another $120,000,000 proposed by the Administration under 
the Department of Defense, will support ongoing efforts to implement 
the Communications Assistance for Law Enforcement Act of 1994 (CALEA).
    In September 1999, the FBI, Department of Justice, Ameritech 
Services, Inc., and Nortel Networks, Inc. entered into the first 
software right-to-use license agreement covering one wireline switching 
platform. Additionally, a license fee for three other switching 
platforms was agreed to by Nortel Networks. Under the right-to-use 
agreement, Nortel Networks will grant a CALEA software license to other 
carriers at no charge for all switches of the same platform type 
installed or deployed before January 1, 1995. The FBI and the 
Department of Justice have reached an informal agreement, subject to 
the availability of funds, with AG Communications, Lucent Technologies, 
Motorola, and Siemens relative to nationwide right-to-use licenses. 
When considered cumulatively, the switching platforms of these five 
manufacturers account for approximately 90 percent of the historic 
lawfully-authorized electronic surveillance activity conducted by 
federal, state, and local law enforcement.
    State and Local Bomb Technician Equipment.--Within the funding 
proposed for the Office of Justice Programs (OJP), $10,000,000 is 
included to continue an FBI Laboratory-managed program of equipping 
State and local bomb technicians. Congress provided a similar amount 
for this program in the fiscal year 2000 appropriation. In fiscal year 
1999, the Department of Justice provided $25,000,000 from the Working 
Capital Fund for the effort. Continuation of funding for this program 
will ensure State and local bomb squads are properly equipped to deal 
traditional improvised and explosive devices, as well as the initial 
response to devices that may be used by terrorists or others to release 
chemical or biological agents. This initiative compliments the State 
and local bomb technician training and accreditation program that the 
FBI Laboratory provides at the Hazardous Devices School, Redstone 
Arsenal, Alabama.
    Grants for NIBIN, DNA Backlog Reduction, and Regional Data Forensic 
Laboratories.--Also, requested under Community Oriented Policing 
Services (COPS) program is $10,000,000 for grants to reduce the backlog 
of ballistic evidence in state and local agencies for entry into the 
NIBIN system, $15,000,000 for grants to reduce the backlog of DNA 
profiles for entry into the FBI's national CODIS database, and 
$6,000,000 for grants to establish regional data forensic laboratories. 
These proposals are related to several on-going FBI Laboratory 
initiatives for improving State and local crime-fighting and forensic 
capabilities.
                         LEGISLATIVE PROPOSALS

    Mr. Chairman, the fiscal year 2001 budget requests includes two 
general provisions proposed by the FBI, including: danger pay authority 
and foreign cooperative agreement authority.
    Danger Pay.--Section 109 would extend to the FBI the same authority 
that the Drug Enforcement Administration (DEA) currently enjoys for 
authorizing danger pay for personnel assigned to high risk overseas 
locations. For the FBI, this is both a pay equity issue for FBI Agent 
assigned to DEA Country Offices and a recognition of the increased 
threat facing FBI personnel performing extraterritorial investigations 
in foreign locations due to our counterterrorism responsibilities. At 
times, FBI personnel are deployed to overseas locations where, due to 
the nature of our work, they face a threat or hostile environment that 
does not always extend to all members of the United States diplomatic 
team in a particular country. This authority would allow me to address 
those situations. This authority has been requested by the 
Administration in each of the past three budgets.
    Foreign Cooperative Agreements.--Section 110 would allow the FBI to 
credit to its appropriation funding that is received from friendly 
foreign governments for that country's share of joint, cooperative 
projects with the FBI. This authority would facilitate projects with 
friendly foreign governments, especially in support of our national 
security mission. The authority was first proposed by the 
Administration last year, was adopted by the House, but did not make 
its way into the final Conference bill.

                                SUMMARY

    Mr. Chairman, the budget proposed for the FBI for fiscal year 2001 
addresses several of the critical resource needs identified through our 
Strategic Planning process. These important investments will allow the 
FBI to meet the investigative and technological challenges we face as 
the FBI enters the 21st Century. These investments will also enable us 
to develop the core competencies that will allow us to be successful in 
investigating crimes, protecting national security, developing and 
sharing technical and forensic expertise, and working better with our 
State, local, and international law enforcement partners.
    Congress, and this Subcommittee in particular, has been extremely 
generous of its financial support for the FBI over the past several 
years. Our successes in the field, whether they be preventing 
pedophiles from luring children over the Internet, to bringing 
terrorists from foreign lands back to the U.S. to stand trial for their 
actions, to protecting our nation's critical infrastructure from cyber 
attacks, to fostering greater cooperation with foreign law enforcement 
through new Legal Attache Offices, were made possible because of your 
support for the FBI. As we look forward to fiscal year 2001, I am 
hopeful that we can continue to depend upon your support.
    Again, I thank you for this opportunity to appear before the 
Subcommittee.

          STATEMENT OF ACTING ADMINISTRATOR DONNIE R. MARSHALL

    Senator Gregg. Administrator?
    Mr. Marshall. Mr. Chairman, Senator Hollings, committee 
members, thank you very much for the opportunity to appear 
here. This is my first budget hearing before this committee. As 
you know, I have been nominated for the position of 
Administrator and I will be attending Senate confirmation 
hearings, so I hope that it will not be my last appearance 
before this committee.
    I want to thank the committee, as Director Freeh did, for 
your support. We have had some outstanding successes over the 
years in DEA and I know that those successes would not have 
been possible without the support of this committee and each 
and every one of the members here.

              DRUG TRAFFICKING PATTERNS

    As I assume the leadership of DEA, I want to ensure that 
DEA maintains and enhances our effectiveness as the only drug 
law enforcement agency that focusses solely on the drug 
problem. In so doing, I want to ensure that DEA is in a 
position to undertake a greater degree of intelligence-driven 
targeting, and that we maintain our ability to adapt to the 
changing drug trafficking patterns in this country. One of the 
trends that I would like to discuss very briefly is the 
changing pattern of drug trafficking in this country.
    We see that the organizations that control the drug 
trafficking into our country are too often headquartered 
outside the United States, beyond the reach, traditional reach, 
at least, of U.S. law enforcement. They have to have operatives 
in this country and they do send operatives into each and every 
city, town, community in this country in order to import their 
drugs and their violence.
    One particular change that we have seen in a recent study--
actually DEA has noticed this trend for a couple of years now 
and it is confirmed now by a recent study by the Center on 
Addiction and Substance Abuse at Columbia University--is the 
invasion of drugs into smaller and medium-sized cities across 
this country.
    The CASA study showed that drugs are just as available in 
small towns today in America as they are in larger towns and it 
also showed that eighth-graders, in particular those in rural 
America, are 79 percent more likely to use methamphetamine, 75 
percent more likely to use crack cocaine, 52 percent more 
likely to use cocaine, and 26 percent more likely to use 
marijuana than their big-city eighth-grade peers.
    Now what this means is that DEA has to also adapt to these 
changing demographics in order to have the maximum impact on 
the criminal organizations that are operating in this country. 
And in order to ensure that adaptability, one of the first 
things that I did upon assuming the position as Acting 
Administrator was to begin to establish a 5-year strategic 
plan, which would allow us to readily adapt to changing 
situations, which would allow us to institute greater 
intelligence-driven targeting, which would allow us to target 
the leadership of all these organizations and which would allow 
us to most effectively use our limited resources to 
investigate, indict, arrest, and convict the leaders of these 
organizations.
    In my complete written statement for the record I have 
outlined a number of successes that we have had in the last 
couple of years. I hope that the committee members will have a 
few minutes to review those successes. I will not go into them 
in the interest of time.

                 BUDGET INITIATIVES

    We have three budget initiatives in our request this year. 
The first is the Intelligence Initiative and that is in keeping 
with my goal and my desire to conduct greater intelligence-
based targeting of the major drug trafficking organizations. 
The second initiative is our Domestic Enforcement Initiative 
and I think that will go a long way toward allowing us to 
better tactically attack the drug-trafficking organizations, 
particularly with regard to the Southwest border and with 
regard to financial investigations. And finally, the third 
initiative that we have submitted is an Infrastructure 
Initiative. A good portion of that goes to enhance our Firebird 
system, which is basically the carrier for all of our 
intelligence systems and our administrative information 
systems.

                 PREPARED STATEMENT

    I hope that we can get the support of the committee on 
those initiatives and again I want to thank you for your past 
support. In the interest of time I will conclude my formal 
statement and we can move to questions and answers if it 
pleases the committee.
    [The statement follows:]

                Prepared Statement of Donnie R. Marshall

    Mr. Chairman, Members of the Subcommittee: I appreciate the 
opportunity to appear before you today to discuss the fiscal year 2001 
budget request of the Drug Enforcement Administration (DEA). Before 
providing the committee with an overview of our agency operations and 
summary of our fiscal year 2001 budget request, I would like to take 
this time to express my sincere gratitude for the ongoing support of 
this Subcommittee and entire U.S. Senate. Without your support, DEA 
could not continue to effectively meet the growing challenges posed by 
increasingly sophisticated and dangerous international drug trafficking 
organizations which operate with impunity throughout the global 
community. Your ongoing efforts work to send a message to these 
traffickers that their assault on the citizens of this nation will not 
be taken lightly and that we will continue to fight to ensure that our 
streets remain safe for generations to come.

                          MISSION AND APPROACH

    The mission of the Drug Enforcement Administration (DEA) is to 
enforce the Controlled Substances laws and regulations of the United 
States and to bring to the criminal and civil justice system those 
organizations involved in the growing, manufacturing and/or 
distribution of controlled substances destined for the United States. 
The DEA also recommends and supports non-enforcement programs aimed at 
reducing the availability of illicit controlled substances on both 
domestic and international markets. To accomplish this mission, DEA 
works with international, federal, and state and local law enforcement 
partners to target and immobilize the organizations of major drug 
traffickers operating at all levels of the drug trade.
    Because DEA is the only single-mission federal agency dedicated to 
drug law enforcement, the agency has, over the years, developed the 
ability to direct resources and manpower to identify, target and 
dismantle drug organizations headquartered overseas and within the 
United States. DEA's strategy to successfully accomplish these goals is 
straightforward, requiring that the agency's resources and manpower be 
focused on all three levels of the drug trade: the international, 
national/regional and local levels. Each of these categories represents 
a critical aspect of the drug continuum which affects communities 
across the nation.
    The 9,000 dedicated men and women of the DEA are committed to 
improving the quality of life of the citizens of the United States. The 
agency directs and supports investigations against the highest levels 
of the international drug trade, their surrogates operating within the 
United States, and those traffickers whose violence and criminal 
activities destabilize towns and cities across the country. These 
investigations are intelligence-driven and frequently involve the 
cooperative efforts of numerous other law enforcement organizations.
    DEA's strategy to successfully impact drug trafficking at all 
levels of operation is flexible and reflects the constantly-changing 
nature of the drug trade. In concert with the Department of Justice and 
the Office of National Drug Control Policy (ONDCP), DEA has crafted an 
innovative and effective program to keep pace with developments and 
shifts in the drug trafficking spectrum and bring both national and 
international drug traffickers to justice.

              DRUG TRAFFICKING THREAT TO THE UNITED STATES

    The heads of the most powerful drug trafficking organizations 
impacting the United States today are based in Mexico and Colombia. 
Believing they are safe from the U.S. justice system, they tightly 
control their operations by directing a large number of surrogates who 
carry out orders on U.S. soil. These operatives are responsible for the 
vast majority of the cocaine, heroin, methamphetamine and marijuana 
trafficking taking place in U.S. communities. Surrogates answering to 
drug lords based in Mexico also produce methamphetamine, both in that 
nation and in the U.S., particularly in California. These producers and 
traffickers are responsible for over 75 percent of the methamphetamine 
that is available in U.S. communities today.
    Traffickers based in Mexico pose a significant threat to the United 
States because of their power, influence and dominant status in the 
drug trade. Where at one time traffickers from Colombia controlled the 
vast majority of cocaine trafficking, traffickers from Mexico today are 
responsible for transporting cocaine into and throughout U.S. markets. 
The heads of organizations based in Colombia rely almost entirely on 
traffickers from Mexico to transport and distribute cocaine while they 
direct operations from the safety of their headquarters in Cali or 
Bogota. In one recent case entitled Operation Millennium, the director 
of a powerful Colombian organization wrongly believed that by 
distancing himself from his organization's U.S. operations, he would 
make himself immune from indictment.
    The major organizations based in Mexico--the Arellano-Felix 
organization, the Amezcua Contreras brothers, the Amado Carillo Fuentes 
group and the Caro Quintero organization--all have a demonstrable 
negative impact on the United States. The leaders of these groups are 
routinely indicted in U.S. judicial districts for drug trafficking 
offenses committed on U.S. soil.
    In recent years, these traffickers have become more prominent in 
the drug trafficking trade within the U.S. They are responsible for 
manufacturing methamphetamine in Mexico and California and trafficking 
it to cities such as Des Moines, Boise, Atlanta and Salt Lake City. 
Major organizations based in Colombia and Mexico also rely on 
surrogates from Mexico to move multi-ton quantities of cocaine across 
the United States, including locations on the East Coast.
    While traffickers from Mexico have a direct impact on drug 
trafficking trends in the United States, it is important to note that 
many major traffickers are still operating from Colombia where the 
cocaine and heroin trade are centered. The large-scale production of 
Colombian heroin has created major U.S. markets for this high quality 
product. In 1998, the latest year for which we have statistics, South 
American heroin comprised 62 percent of the heroin seized by federal 
authorities and analyzed by DEA's Special Testing and Research 
Laboratory. Cocaine production has also increased dramatically since 
1994, and it is possible that Colombian cocaine yield may be as much as 
three times that of previous estimates.
    None of the major drug traffickers headquartered overseas could 
operate without the assistance of national and regional drug 
trafficking organizations which are responsible for trafficking huge 
quantities of drugs into U.S. communities. These organizations are 
comprised of a network of operatives who transport, store and 
distribute drugs throughout the United States and whose activities are 
directed by drug lords based in foreign countries. In many cases, 
national and regional drug trafficking organizations are comprised of 
numerous cells whose directors are responsible for specific tasks such 
as communications, financial matters and/or logistics. These cell heads 
are sent to the United States for a period of time to carry out the 
business mandates of the top drug lords and are given specific tasks to 
accomplish. The national and regional drug syndicates have infiltrated 
many states and communities, bringing with them the crime and violence 
once limited to major urban areas. A survey of recent DEA 
investigations revealed that over 400 investigations stemming from 
Operations Reciprocity and Limelight involved drug traffickers from 
foreign countries who had set up operations in various cities across 
the United States.
    Local violent drug trafficking organizations also operate across 
the United States and are responsible for eroding the quality of life 
in many American communities. Previously centered in major urban areas, 
violent drug trafficking groups are now part of the landscape in 
smaller cities and rural areas. Fueled in large part by methamphetamine 
production and trafficking, violent drug trafficking organizations are 
now affecting the crime rates in smaller cities such as Spokane, 
Washington and Cedar Rapids, Iowa. While these local, violent groups 
appear to be unrelated to the large international drug trafficking 
organizations headquartered overseas, it is important to note that all 
of the cocaine and heroin that is trafficked by these groups is 
produced overseas and transported to the United States for eventual 
distribution on the local level.

            DRUG ABUSE IN AMERICA-- THE CHANGING DEMOGRAPHICS

    Although drug abuse among young people increased significantly over 
the past decade, recent statistics indicate that this trend may be 
stabilizing. Even with this positive trend, there continues to be 
sobering news brought to our attention daily regarding the state of 
drug use in smaller cities and rural areas, fueled by the proliferation 
of methamphetamine production and trafficking, and the increased 
availability of cheap, high-purity heroin from Colombia.
    Although there has been a decrease in violent crime in major cities 
due to vigorous law enforcement efforts, similar reductions in the 
violent crime rates of smaller cities, suburban and rural areas have 
not been realized. In fact, many smaller cities are now confronting the 
same problems that larger urban areas faced a decade ago. While 1998 
violent crime rates decreased (-9.5 percent) in cities having 
populations between 250,000 and 999,999, significantly smaller 
decreases took place in suburban counties (-5 percent) and rural areas 
(-2 percent). Between 1997 and 1998, violent crime rates actually 
increased in a number of mid-sized communities.
    A recent reported released by the Center on Addiction and Substance 
Abuse at Columbia University (CASA), indicates that eighth graders 
living in rural America are 79 percent more likely than their urban 
counterparts to use amphetamines, including methamphetamine. They are 
also 75 percent more likely to use crack cocaine, 52 percent more 
likely to use cocaine and 26 percent more likely to smoke marijuana 
than young people in major urban locations.
    The report also states that according to recent surveys, it is as 
easy for young people in rural areas and small cities to obtain drugs 
as it is for their urban counterparts. Additionally, from 1990 to 1998, 
smaller cities experienced significantly more drug violations than 
larger cities; for instance, cities with populations of 25,000 to 
50,000 people had three times as many drug violations as larger cities. 
In cities with fewer than 10,000 residents, the level of drug 
violations was six times higher than that found in larger cities.
    The media has reported the tragic results of increased drug use in 
cities like Plano, Texas Orlando, Florida and Elkton, Maryland. Smaller 
cities are generally unable to meet the demands for social services and 
treatment placed on them when a methamphetamine or heroin epidemic 
hits. Additionally, law enforcement agencies are often unprepared to 
address the full range of issues associated with methamphetamine lab 
cleanups and investigations.
    In the end, all three facets of the drug trafficking trade--the 
international, national/regional and local levels--are interrelated and 
interdependent. As these different echelons of the drug trade in each 
of these levels work together, it is essential that our nation's the 
law enforcement response address all three of these levels 
simultaneously.

                             DEA'S STRATEGY

    In order to meet the enormous challenges posed by internationally-
based narcotics traffickers and their surrogates within the United 
States, DEA has developed an effective five-year strategic plan which 
makes use of the agency's unique skills and limited resources to 
achieve the maximum impact against international, national/regional and 
local drug traffickers through the use of intelligence-driven 
investigations.
    DEA's strategy takes into account the current drug trafficking 
situation affecting the United States and identifies the 
characteristics and vulnerabilities of all three levels of the drug 
trade, responding to each of these levels simultaneously:
    International Targets.--This category is comprised of trafficking 
organizations based in foreign countries that are the primary source of 
supply for their surrogates within the U.S. Through DEA's International 
Operations program and the efforts of the agency's Special Operations 
Division (SOD) and numerous field divisions throughout the country, DEA 
effectively targets these organizations and their members.
    National/Regional Targets.--These organizations operate 
domestically throughout the United States and are responsible for 
distributing drugs from international and domestic sources to U.S. 
communities. In many cases, these groups report directly to major drug 
lords overseas. They also operate on a national or regional basis, 
supplying several markets. The vast majority of DEA's cases fall into 
this category and investigations against members of these organizations 
are generated and supported by every DEA office in the United States.
    Local Initiatives.--Criminal organizations operating at the local 
level generally deal in smaller quantities of drugs and are responsible 
for providing these drugs to users within the United States. Through 
local enforcement initiatives such as the Mobile Enforcement Team (MET) 
program, DEA works with state and local counterparts to identify and 
immobilize these organizations and to arrest the most violent members 
of these groups.
    Using this strategy, DEA has successfully targeted significant 
traffickers and organizations in each of these categories. Over the 
past several years, major cases tied to each of these categories have 
resulted in the arrest of thousands of major violators.
International targets
    Operation Millennium.--Less than one month after the successful 
conclusion of Operation Impunity, an operation aimed at the highest 
level of the drug trade operating within the U.S., an important 
international law enforcement operation made headlines. Operation 
Millennium, a one-year operation designed to dismantle a Colombian-
based transportation consortium believed to be responsible for 
supplying between 20 and 30 tons of cocaine per month to the United 
States and Europe, resulted in the arrest of more than 30 drug 
traffickers and money launderers, including alleged high-profile 
trafficker Alejandro Bernal Madrigal, and Fabio Ochoa. The operation 
also resulted in the seizure of over 13,000 kilograms of cocaine. 
Critical to the success of the operation was the unprecedented level of 
cooperation between DEA, the Colombian National Police, the Fiscal 
General of the Republic of Columbia, the U.S. Attorney's Office in 
Miami and the Justice Department's Criminal Division.
    Operation Juno.--Initiated after the seizure of approximately 386 
kilograms of liquid cocaine concealed in a shipment of frozen fish 
destined for the United States, Operation Juno, which began in 
September 1996 and concluded in August 1999, was unique in that for the 
first time in drug enforcement history, the U.S. government set up an 
undercover brokerage firm to aid in intercepting drug dollars destined 
for the Colombian black market. Operation Juno resulted in over 40 
arrests, the seizure of $10.0 million and warrants against 59 bank 
accounts at 34 U.S. banks and 282 accounts at 52 foreign banks. Monies 
in these targeted accounts were believed to total another $16.0 
million. The investigation also resulted in the seizure of 3,601 
kilograms of cocaine and 106 grams of hashish oil.
    Operation Columbus.--Concluding in October 1999, Operation Columbus 
was a multi-national, regional enforcement effort involving Colombia, 
Venezuela and Panama, and the island nations of the Caribbean. This 
operation focused on air, land and maritime interdiction, eradication 
and clandestine airstrip denial. The final arrest and seizure 
statistics for Operation Columbus were unprecedented for this region, 
resulting in more than 1,290 arrests, as well as the seizure of 900 
kilograms of cocaine and nine kilograms of heroin. Over 38 weapons, 26 
vehicles, 27 vessels, three laboratories and one aircraft were also 
seized. In addition, 1,097 metric tons of marijuana were eradicated. In 
the end, Operation Columbus struck a solid blow against the operations 
of Caribbean-based drug trafficking groups.
National/regional targets
    Operation Impunity.--This two-year international investigation 
concluded in September, 1999, and resulted in the arrest of 109 
individuals, including three major drug trafficking cell heads, linked 
to the Mexican-based Amado Carillo Fuentes organization. The operation 
was coordinated by DEA's Special Operations Division (SOD) which headed 
a combined investigative center involving the DEA, U.S. Customs 
Service, FBI and IRS. Besides substantially hindering the trafficking 
organization's ability to move cocaine and other drugs into, and 
around, the United States, Operation Impunity succeeded in seizing 
$19.0 million in U.S. currency, another $7.0 million in assets and well 
over 12,434 kilograms of cocaine and 4,800 pounds of marijuana.
    Operation Heartland.--Beginning in October 1997, this investigation 
targeted the Martin Chavez Organization, a multi-pound methamphetamine 
and marijuana importation and distribution operation that was 
responsible for transporting marijuana and methamphetamine from Mexico 
into the United States via the Juarez/El Paso, Texas corridor to the 
Oklahoma City, Oklahoma area. Over the next several years the scope of 
this investigation spread to include DEA offices in Fresno 
(California), El Paso (Texas), Dallas (Texas) and Des Moines (Iowa). 
Information obtained as a result of the investigation resulted in the 
seizure of 47 pounds of methamphetamine, 525 pounds of precursor 
chemicals, 1,378 pounds of marijuana, $47,500 in U.S. currency and the 
arrest of 22 individuals. Additional indictments were anticipated, 
including one for Chavez--currently a fugitive.
    Mario Ibarra Sanchez Investigation.--The Mario Ibarra Sanchez 
Organization was in charge of transporting and distributing large 
quantities of methamphetamine, amphetamine, heroin and cocaine for 
trafficking organizations operating in both Mexico and the United 
States. On November 11, 1998, DEA conducted an investigation, in 
conjunction with several state and local law enforcement agencies, that 
resulted in the issuance of nine federal search warrants and 10 federal 
arrest warrants against members of the Sanchez organization. Those 
arrested included the cell leader and a significant methamphetamine 
laboratory operator based in Mexico. The investigation ultimately 
resulted in the seizure of 65.5 pounds of methamphetamine, 30.4 pounds 
of black tar heroin, 106.3 pounds of amphetamine, 154.0 pounds of 
cocaine and $156,600 in U.S. currency.
    Omaha, Nebraska RET Deployment.--In September 1999, the Des Moines 
Regional Enforcement Team (RET) deployed to Omaha, Nebraska to assist 
in a methamphetamine investigation. A court-authorized wire intercept 
was initiated on two cellular telephones utilized by the targeted 
organization. As a result of these efforts, the Omaha District Office, 
along with the Des Moines RET, identified individuals in Juarez, 
Mexico; El Paso, Texas; and Los Angeles, California, who were directly 
linked with the transshipment of cocaine, marijuana and methamphetamine 
to Omaha, Nebraska, for distribution purposes. On October 20, 1999, a 
Federal Grand Jury in Omaha, Nebraska indicted 19 individuals, 17 of 
whom were arrested. This indictment included the arrest of the primary 
targets, along with others, effectively dismantling the targeted 
organization in Omaha. Additionally, this investigation resulted in the 
seizure of six kilograms of cocaine; one pound of methamphetamine; 200 
pounds of marijuana; and, $22,000 in U.S. currency. Evidence gathered 
during the intercept of telephones utilized by the targeted 
organization continues to be exploited for use in investigations in 
California, Texas, Nebraska, and Mexico.
    Operation Trinity.--In October 1997, DEA, FBI, Customs and DOJ 
initiated Special Enforcement Operation Trinity, a joint strategy 
designed to target the primary domestic trafficking organizations that 
are controlled by criminal leaders in Colombia, Mexico and the 
Dominican Republic. The primary phase of Operation Trinity concluded on 
September 25, 1998; no new investigations were accepted after July 
1998. At this time 220 cases were still active. Preliminary figures for 
all Operation Trinity investigations include over 1,260 arrests, with 
drug seizures totaling 12.8 metric tons of cocaine, 63,370 lbs. of 
marijuana, 3,178 lbs. of methamphetamine, 127 lbs. of heroin, 108 lbs. 
amphetamine and over 137,600 pseudoephedrine tablets. Asset seizures 
from the case total over $59.2 million in U.S. currency, $1.2 million 
in assets and 132 vehicles.
    Operation META.--Operation META, which concluded in December 1997, 
targeted a major U.S. methamphetamine-trafficking organization that was 
supplied by the Amezcua-Contrera group from Mexico. This investigation 
combined the efforts of DEA, FBI, other federal agencies and state and 
local agencies from 17 U.S. cities in nine different states. It 
resulted in the arrest of 121 members of the trafficking ring and the 
seizure of 133 pounds of methamphetamine, 1,765 pounds of marijuana and 
1,100 kilograms of cocaine. During the META raids, agents discovered 
and dismantled three methamphetamine labs that were each capable of 
producing more than 300 pounds of methamphetamine at a time. Operation 
META seizures were especially important because they alerted the law 
enforcement community to the growing methamphetamine problem in the 
United States.
    Southern Frontier.--In recent years, DEA has undertaken several 
successful operations in support of the agency's Southern Frontier 
Initiative. Operation Zorro II, Operation Reciprocity and Operation 
Limelight, each of which relied extensively on numerous court-ordered 
wiretaps that were coordinated and monitored by area law enforcement, 
collectively resulted in the arrest of 156 individuals and the seizure 
of over 22,000 kilograms of illegal drugs and over $35.0 million.
Local initiatives
    Mobile Enforcement Team Program.--As a response to the overwhelming 
problem of drug related violent crime which has plagued communities and 
neighborhoods across the United States, DEA's Mobile Enforcement Team 
(MET) program was created in early 1995 as a means of dismantling drug 
organizations by securing the conviction and incarceration of those 
individuals dealing drugs and causing violence in these communities. 
Recent examples of MET program successes include the following:
  --Phoenix, Arizona.--From July 1998 until March 1999 the Phoenix 
        Field Division MET worked closely with the Northern Arizona 
        Street Crimes Task Force in targeting the Colimas and Costillo 
        drug-trafficking organizations. The Colimas organization was 
        responsible for supplying street-level dealers with multiple-
        pound quantities of methamphetamine. The Costillo organization, 
        a polydrug trafficking group, had a reputation for extreme 
        violence; some of its members had criminal histories, which 
        included armed robberies, home invasions, assault, sex crimes, 
        and child abuse. Using confidential sources, the MET was able 
        to successfully infiltrate these two organizations and severely 
        disrupt their operations. The nine month deployment, resulted 
        in the seizure of seven operational and three dismantled 
        methamphetamine labs, 44 grams of heroin, 22 pounds of 
        marijuana, 500 dosage units of LSD, 40 weapons, 18 motor 
        vehicles, and $16,292 in U.S. currency. In addition, The MET 
        secured 86 arrests, including the arrests of two primary 
        targets: Jose Francisco Colimas and Ricardo ``Duke'' Castillo.
  --Brownwood, Texas.--At the request of local police, DEA's Dallas 
        Division MET deployed to Brownwood, Texas from October 1998 to 
        March 1999 in an effort to combat narcotics-related violence 
        problems within this community. The five month deployment 
        resulted in 22 federal indictments and 19 state arrest 
        warrants. The initial sweep resulted in 38 arrests (20 federal 
        and 18 state). In response to the operation, the Brownwood 
        District Attorney stated, ``This DEA MET deployment was 
        significant in getting important drug dealers off the street 
        and making a major impact in the community. This is a perfect 
        example of what happens when all parties cooperate and 
        collaborate towards a common goal.''
  --Warren, Ohio.--At the request of the local police chief, DEA's 
        Detroit Division MET deployed to Warren, Ohio from January to 
        May 1999 in an effort to target a significant increase of crack 
        cocaine trafficking and related violence within this community. 
        The primary deployment targets were members of a violent drug 
        distribution organization operating in Warren. This five month 
        deployment resulted in the arrest of 16 individuals (11 
        arrested on state charges that include mandatory sentences upon 
        conviction); the execution of six search warrants; and, the 
        seizure of 650 grams of crack cocaine. In addition, $8,100 in 
        U.S. currency was seized, along with nine weapons including two 
        semi-automated handguns with laser sights and seven rifles. In 
        addition, the primary targets of this deployment were also 
        arrested.

                    FISCAL YEAR 2001 BUDGET REQUEST

    In an effort to support DEA's evolving drug strategy through both 
ongoing and developing agency operations, in fiscal year 2001 we are 
requesting additional programmatic resources through three primary 
budget initiatives: our Domestic Drug Enforcement Initiative, 
Intelligence Initiative, and Infrastructure initiative.
    Funding requested through DEA's Enforcement Initiative includes 18 
positions (11 Special Agents) and $3.1 million for the agency's Special 
Operations Division. SOD-coordinated investigations enable DEA and its 
drug law enforcement counterparts to attack the command and control 
infrastructures of major drug trafficking organizations at their most 
vulnerable point--their lines of communication. In order for these 
organizations to operate effectively within the global community, 
extensive coordination and communication between all echelons of their 
operations is required. DEA's main weapon in thwarting the 
communications infrastructures of these organizations is the use of 
Title III wiretap investigations. As DEA addresses emerging drug 
threats, requests for Title IIIs and intelligence assistance are 
expected to increase dramatically. In order to meet these requests, DEA 
requires additional resources for SOD investigations along the 
Southwest Border and for SOD's Financial Investigations program. 
Enhancements requested for fiscal year 2001 include nine positions (six 
Special Agents) and $1.671 million to coordinate additional multi-
division Title III investigations along the Southwest border and nine 
positions (five Special Agents) and $1.429 million to establish a Money 
Laundering and Financial Investigations Section within SOD, providing 
DEA with national oversight and coordination on Title III money 
laundering investigations.
    DEA requests a total of $1.5 million through the agency's 
Intelligence Initiative. Intelligence driven investigations represent 
the best means of quickly and efficiently targeting, investigating and 
dismantling major drug trafficking organizations. Our Intelligence 
Initiative focuses exclusively on providing DEA's intelligence program 
with the tools necessary to address all facets of the agency's 
investigative requirements. Further development of DEA's drug 
intelligence and information sharing capabilities is vital to efforts 
to maximize federal, state, and local anti-drug assets. The resources 
requested through this initiative will provide DEA with additional 
support for drug intelligence operations through further development of 
DEA's El Paso Intelligence Center Information System (EIS). This 
system, which collects, distributes and analyzes reported data on 
worldwide drug trafficking trends and drug organization operations, is 
critical in the facilitation of information sharing with other federal, 
state and local law enforcement agencies.
    Finally, DEA requests a total of 26 positions and $59.957 million 
through the agency's Infrastructure Initiative. DEA's dynamic 
enforcement and intelligence missions continue to place great demands 
on the agency's key operational support programs. As such, critical 
investments in technology for projects such as the agency's FIREBIRD 
office automation system and financial management system are essential 
to the successful performance of drug law enforcement. In fiscal year 
2001 DEA is requesting two positions and $55.908 million to fully 
support the Operations and Maintenance (O&M) and Technology Renewal 
requirements of the agency's FIREBIRD office automation system and 24 
positions and $3.957 million to enhance the agency's financial and 
resource management oversight capacity. Without these additional 
resources, DEA will not be able to continue to effectively provide 
necessary support for the growing number of Special Agents, 
Intelligence Specialists and Task Force Officers working actively to 
identify, target and dismantle drug trafficking organizations around 
the globe.
    This concludes my presentation of DEA's fiscal year 2001 budget 
request. I would be happy at this time to take any questions the 
Committee Members may have regarding DEA operations, programs or 
requested budget enhancements.

               METHAMPHETAMINE REQUEST

    Senator Gregg. Yes, thank you, Administrator. I appreciate 
that.
    In looking over your budget specifically, I notice there 
was not a request for methamphetamine initiatives, which has 
been a fairly high priority of this committee and, I thought, 
of the agency over the last few years.
    When you submitted your request to OMB, was there a 
methamphetamine request in there?
    Mr. Marshall. Senator, we have enjoyed, with your support, 
funding increases in methamphetamine issues over the last 
several budget years, and this year we did submit a request for 
an additional, I believe it was 187 positions and $43.7 million 
to target methamphetamine issues in this country, to provide 
clandestine laboratory clean-up, and training to other law 
enforcement agencies. The Department of Justice supported this 
request and submitted it to OMB.
    Senator Gregg. How many was that?
    Mr. Marshall. 187 positions, 108 special agent positions, 
$43.7 million.
    Senator Gregg. And that was eliminated by OMB, I presume?
    Mr. Marshall. That is my assumption, sir.

          FUNDING FOR OTHER DEA INITIATIVES

    Senator Gregg. I have to tell you, I looked at your budget 
and I said something is missing here. What other requests of 
significance were eliminated?
    Mr. Marshall. Well, DOJ approved a heroin initiative and 
money-laundering initiative, a Special Operations Division 
initiative, a bit larger initiative on our infrastructure and 
our intelligence and I would be able to submit all of the 
details of those for the record if you would like.
    Senator Gregg. I would appreciate that. What would be the 
appropriate amount that was involved in those accounts?
    Mr. Marshall. It looks like one initiative was on the order 
of $75 million, another initiative on the order of $32 million, 
and another on the order of $76 million.
    Senator Gregg. These were all for the purposes of fighting 
the drug war?
    Mr. Marshall. Yes, they were.
    [The information follows:]

              DEA FISCAL YEAR 2001 UNFUNDED BUDGET REQUEST

Total Enhancement Request
    513 positions (248 special agents) and $185,257,661.
    Includes items requested in DEA's fiscal year 2001 OMB budget 
request as well as selected items from DEA's fiscal year 2001 
Congressional request.
    None of the individual items requested in this document should be 
provided to DEA if it would require a reduction to the agency's 
existing base program resources.
Initiative I: Strategic Domestic Enforcement
    Total includes: 412 positions (242 special agents) and $75,839,464 
to implement DEA's Strategic Domestic Enforcement Initiative, a 
comprehensive, multi-faceted enforcement approach designed specifically 
to combat the surrogates of major drug trafficking organizations 
operating within the U.S. and their command and control centers based 
throughout the world.
  --187 positions (108 special agents) and $43,706,839 to 
        comprehensively target methamphetamine production and 
        trafficking organizations operating in the United States. 
        Resources will be used to increase DEA's investigative 
        capabilities, enhance training efforts and provide the funding 
        necessary to safeguard America's communities from the potential 
        health and environmental threats posed by clandestine 
        laboratories.
      Total includes: 169 positions (104 special agents) and 
        $17,807,392 to enhance domestic methamphetamine enforcement 
        efforts; 10 positions and $21,845,000 for clandestine 
        laboratory cleanup; and 8 positions (4 special agents) and 
        $4,054,447 to enhance DEA's clandestine laboratory training 
        program.
  --85 positions (50 special agents) and $8,852,274 to combat drug 
        trafficking organizations operating along the United States' 
        Southern Frontier, including the Southwest Border and the 
        Caribbean Corridor.
  --85 positions (51 special agents) and $8,930,029 to target major 
        heroin trafficking organizations operating in the United States 
        and fund the completion of DEA's five year heroin enforcement 
        plan.
  --32 positions (20 special agents) and $3,385,454 to strengthen DEA's 
        program management functions and field enforcement capabilities 
        in the field of drug related financial investigations and money 
        laundering. The request will fund the establishment of two 
        Regional Financial Investigations Groups (RFIG's) based in New 
        York and Los Angeles.
  --23 positions (13 special agents) and $10,964,868 to support DEA's 
        Special Operations Division (SOD) operations.\1\
---------------------------------------------------------------------------
    \1\ A total of 18 positions (11 special agents) and $3.1 million is 
provided for SOD in the President's fiscal year 2001 budget submission. 
The remaining SOD program requirement is 23 positions and $10.965 
million.
---------------------------------------------------------------------------
      Total includes: 4 positions (3 special agents) and $926,336 for 
        SOD related methamphetamine enforcement efforts; 7 positions (4 
        special agents) and $1,094,509 for SOD related Latin America 
        and Caribbean enforcement efforts; 9 positions (6 special 
        agents) and $1,351,885 for SOD related Europe and Asia 
        enforcement efforts; and 3 positions and $7,592,138 to provide 
        critical linguist support of Title III investigations through 
        the Interagency Crime and Drug Enforcement (ICDE) program.
Initiative II: Intelligence
    Total includes 76 positions (44 Intelligence Specialists) and 
$32,778,627 to provide vital investigative support in identifying, 
developing, and exploiting the information and intelligence necessary 
to enhance the effectiveness of drug law enforcement.
  --10 positions (3 special agents; 5 Intelligence Specialists) and 
        $4,937,000 to develop an Academy for Drug Intelligence (ADI) 
        that will provide criminal and drug intelligence analytical 
        training to federal law enforcement agencies and where 
        appropriate, state, local and foreign agencies.
  --2 positions and $12,371,866 to accelerate the installation of DEA's 
        MERLIN intelligence system into the agency's remaining domestic 
        division, district and resident offices.\2\
---------------------------------------------------------------------------
    \2\ $2.0 million of this total is requested by DEA for MERLIN in 
its revised Plan Colombia submission.
---------------------------------------------------------------------------
  --5 positions (4 Intelligence Specialists) and $6,447,785 to enhance 
        DEA's Narcotics Enforcement Data Retrieval System (NEDRS) 
        project in support of the agency's Special Operations 
        Division.\3\
---------------------------------------------------------------------------
    \3\ $2.5 million of this total is requested by DEA for NEDRS in its 
revised Plan Colombia submission.
---------------------------------------------------------------------------
  --54 positions (40 Intelligence Specialists) and $5,314,311 to 
        provide dedicated intelligence staff and support to High 
        Intensity Drug Trafficking Areas (HIDTA), which are playing a 
        major role in interagency drug law enforcement cooperation 
        throughout the United States.
  --$600,000 to meet expanded federal, state and local participation in 
        DEA's National Drug Pointer Index (NDPIX) information 
        system.\4\
---------------------------------------------------------------------------
    \4\ If the requested $600,000 for NDPIX is provided, DEA asks that 
this funding be recurred in the outyears.
---------------------------------------------------------------------------
  --$1,800,000 to operate, maintain and enhance DEA's El Paso 
        Intelligence Center's (EPIC) Information System (EIS).\5\
---------------------------------------------------------------------------
    \5\ A total of $1.5 million is provided for EPIC EIS in the 
President's fiscal year 2001 budget request for DEA. The remaining EIS 
program requirement is $1.8 million. DEA asks that if provided, this 
funding recur in the outyears.
---------------------------------------------------------------------------
  --$750,000 to continue the conversion of DEA's investigative records 
        to an electronic format by the end of 2001, thereby allowing 
        direct, desktop access to the agency's complete investigative 
        records.
  --5 positions and $557,665 to expand DEA's Computer Forensics 
        Program, working to heighten DEA's intelligence collection and 
        case support activities and allow the agency to better identify 
        and target major drug violators.
Initiative III: Infrastructure
    Total includes 25 positions (14 Technical/Clerical) and $76,639,570 
to provided critical support to DEA's enforcement operations.
  --4 positions and $30,100,000 to achieve full deployment of DEA's 
        FIREBIRD office automation system by the end of CY 2001 and 
        establish sufficient infrastructure funding to support the 
        system at expanded levels.\6\
---------------------------------------------------------------------------
    \6\ A total of 2 positions and $56.0 million is requested for DEA's 
FIREBIRD system in the fiscal year 2001 President's budget request. 
DEA's remaining FIREBIRD program deployment requirement is 4 positions 
and $30.1 million.
---------------------------------------------------------------------------
  --$16,000,000 to address DEA's Permanent Change of Station (PCS) 
        requirements.
  --$10,500,000 for the purchase of a twin-engine plane for DEA's 
        Mexico City Country Office and a twin-engine helicopter to 
        support DEA operations in the Bahamas.
  --15 positions (3 special agents) and $1,477,294 to enhance DEA 
        training programs and infrastructure at the newly completed 
        Justice Training Center at Quantico, Virginia.
  --$3,878,000 to enhance DEA's laboratory equipment base and refresh 
        the agency's equipment inventory in line with accepted industry 
        standards.
  --4 positions and $1,403,732 to fully implement an Automated 
        Fingerprint Identification System (AFIS) in DEA's field drug 
        laboratories.
  --2 positions and $13,380,544 to enhance DEA's Personnel Security 
        Section to ensure compliance with all of the agency's 
        background investigation requirements.

                COLOMBIA SUPPLEMENTAL

    Senator Gregg. In the proposal that came to us, the 
Colombia supplemental, which was a $1.6 billion initiative, the 
purpose of which was to send helicopters to Colombia and do 
other things within Colombia to eradicate drug activity, I 
noticed that the DEA role in that was about $3 million. Is that 
right?
    Mr. Marshall. By my count it is something on the order of 
between $5 and 6 million.
    Senator Gregg. Of the $1.6 billion?
    Mr. Marshall. Yes, sir.
    Senator Gregg. I guess the question arises, and you may not 
want to answer this but I would be interested if you do and I 
understand if you do not, but as the premier drug-fighting 
agency, as the people primarily charged with the portfolio of 
addressing fighting drugs, how can you have an initiative where 
we are going to spend $1.6 billion and end up with your agency 
representing less than one-half of 1 percent of the dollars 
being spent?
    Mr. Marshall. Well, there are some other funding items in 
this plan for the Department of Justice and I understand that 
about $40 million is going to the Department of Justice. Those 
are for such things as multilateral investigations, 
prosecutors, victim witness programs, and training for the 
judiciary. We are currently discussing with the Department of 
Justice how DEA can access some of that money.
    We did get, I think, the couple of main things that we 
wanted in this bill, and that was to support our intelligence 
operations, targeting operations in the country of Colombia 
with the Colombian National Police. I do support Plan Colombia. 
I do recognize that the Colombian National Police in our 
bilateral investigations with them have been a critical 
component of our successes overseas. They have been wonderful 
allies and we need to continue to support them and we have to 
find ways to continue to work these multilateral 
investigations.
    So I would hope that in the future we could find ways to 
enhance our relationship even more, beyond the $40 million that 
is in Justice appropriation for Colombia.
    Senator Gregg. I understand that but I am just thinking in 
the order of priorities. It appears that about $200 million of 
the requests which you prioritize for fighting drugs did not 
come forward. And yet we received a $1.6 billion supplemental 
for fighting drugs in Colombia and most of that is going to 
flow to some defense contractor, who is going to sell them some 
helicopters. From my standpoint I am not sure we get the return 
that we get when we give your agency the support it needs; for 
example, methamphetamines, which is something that is a really 
high priority for States like Missouri and Colorado, and I 
suspect New Mexico. The problem has not really gotten as severe 
in the Northeast as it has in the West, and it is certainly 
significant.
    Senator Hollings?
    Senator Hollings. Can I question both of them?
    Senator Gregg. Yes.

             DRUG TRAFFICKING IN MEXICO

    Senator Hollings. Mr. Marshall, that is the main thing. Are 
drugs on the increase or decrease in Mexico?
    Mr. Marshall. Well, I think that right now the traffic 
through Mexico accounts for the vast majority of drugs coming 
into this country from foreign sources. I would have to say 
that it is on the increase at this point.
    Senator Hollings. Well, bless you. I backed Constantine and 
now I would be delighted to back you because I think you speak 
the truth. It just amazed me that the administration at the 
first of this month certified Mexico on the decrease, that they 
are fully cooperating with the United States, and Constantine 
just told the New York Times we know who the leaders of the 
cartel are and everything else, but we cannot get any 
cooperation to bring them to justice. They shoot or kill the 
chief of police at Tijuana. We are digging up bodies over there 
at Juarez and Matamares and other places. It just gets worse 
and worse and yet we keep certifying it as a wonderful thing.
    This place here in Washington is Alice in Wonderland. We 
call a deficit a surplus. Thirty years we have said that Taiwan 
was not sovereign but a part of China. Now we threaten to 
defend it as sovereign. The freedom to buy an office is the 
freedom of speech and a deficit is a surplus and an increase is 
a decrease, according to the White House.

                FBI-CIA COORDINATION

    Mr. Freeh, let me ask you about the coordination that you 
have with George Tenet and the CIA because I have investigated 
on the Hoover Commission both the FBI and the Central 
Intelligence Agency and they were extreme competitors, jealous, 
arresting each other, spending a lot of time, money and agents 
spying on each other to get the case first and everything else 
like that.
    That is why I sort of hesitate going over to Prague, Seoul, 
Santo Domingo, Nairobi, Amman, and Bucharest. Do you have a 
good working relationship with the Central Intelligence Agency?
    Mr. Freeh. Senator, we have an excellent relationship not 
just on the director-to-director level but on the institutional 
and operational levels. You are absolutely right. That is not a 
historical phenomenon. In fact, it is a recent development, I 
would say within the last 5 or 6 years. I cannot think of 
better cooperation.
    If I could go into some details, perhaps not at this 
session, but talk about some of the operations which have been 
directed against subjects like Usama Bin Laden and Kasi--who 
was brought back to the United States for the murder of CIA 
employees. During the recent events over the millennial period, 
the FBI and the CIA operated in lock-step around the world, to 
the benefit of our country and our friends. We are very, very 
pleased with that and I do not think you will find a better 
relationship institutionally or individually.
    We have a lot of FBI officials who are over at the CIA in 
key decision-making positions. George Tenet has some of his 
senior officers at the FBI with line authority in 
counterterrorism programs. We have a regular series of liaisons 
and coordinations between our chiefs of station overseas and 
our legal attaches. The chiefs of station will tell you that 
they need the legal attaches presence to supplement their 
mission, which is one mission, the mission of protecting the 
country. I do not think you will find that coordination working 
better in terms of fugitive cases, preventing cases in terms of 
terrorism, finding people, bringing them back here, and sharing 
information. I am very pleased with the relationship.
    Senator Hollings. It is a practical problem because those 
who are willing to give us information in that world are not 
necessarily Sunday school teachers. If you have a terrorist who 
has given us information, who rules? Do you arrest him, get 
him, or do we keep getting the information from the terrorist?
    Mr. Freeh. With respect to terrorism, the first objective 
is to prevent an act of terrorism, and second, to apprehend and 
bring the individual back. We have brought back people like 
Shirosaki, who committed crimes against the United States 
nearly 15 years ago. We have brought back 12 major terrorism 
fugitives into the United States in the last 4 years so they 
can be prosecuted here. It is our primary objective to find 
them, bring them back here and have them taken to a court of 
justice.

            CRIME PROBLEM IN SOUTH KOREA

    Senator Hollings. Do you have terrorists or Mafia activity 
out of Seoul, Korea? I see some of the places there that I 
understand, but I am rather surprised that you have that kind 
of activity coming out of Seoul, Korea that would require a 
legate.
    Mr. Freeh. We have several cases, cases around the United 
States where Korean-Americans and Korean nationals are involved 
in organized criminal enterprises. That is not a new 
phenomenon. We have a huge amount of economic crime and fraud, 
which has connections between Korea and the United States. 
There is a very strong overlap of jurisdictional interest in 
not only organized crime areas but white collar crime areas--
fraud areas, and smuggling, including the smuggling of drugs 
and narcotics, which Mr. Marshall could talk about. So there 
are a lot of things that occupy us together.
    Just to go back to your earlier question about the 
necessity for agents overseas, there are only 113 FBI agents 
overseas. That is to cover literally the world. And the return 
the United States gets on that investment is immense. In fact, 
just in today's papers you will see two stories. One is the 
successful result of an FBI investigation in Thailand which 
located a fugitive, a man who had been convicted over 10 years 
ago for two rapes in the State of Minnesota, arrested because 
of the FBI's presence and activities overseas, and who will be 
brought back to serve the rest of his sentence.
    Also, in the People's Republic of China, arrests were made 
as a direct result of the FBI activity of people who are 
charged with the murder of five people in Boston several years 
ago.
    So this is the kind of reach and capacity that the FBI's 
very small presence gives us overseas.
    [Subsequent to the hearing, the following clarification was 
provided:]

                    CLARIFICATION ON AGENTS OVERSEAS

    The FBI currently has 35 active Legal Attache offices 
overseas on every continent except Antarctica. These offices 
are within our U.S. embassies. As of March 16, 2000, the 35 
offices were staffed by 154 FBI employees, of which 90 are 
agents.
    In a March 29, 2000, letter to the Hill, the FBI proposed a 
reprogramming/reallocation of resources to increase the Legal 
Attache presence overseas to 186 FBI employees, of which 112 
would be agents.

    Senator Hollings. Thank you very much.
    Thank you, Mr. Chairman.

            FBI LABORATORY MODERNIZATION

    Senator Gregg. Senator Domenici.
    Senator Domenici. Thank you, Mr. Chairman.
    Director Freeh, I want to commend you on a couple of things 
that have been accomplished in the last few years; one, the 
modernization of your crime laboratory with the new director 
that, incidentally, you personally chose. For those who wonder 
what kind of a person the FBI chose to be the director of their 
crime laboratory and turn it around and put it back where it is 
world renown, he chose a former director of Los Alamos National 
Laboratory, a physicist.
    Senator Hollings. Oh, I thought it was a Chinaman.
    Senator Domenici. No, a physicist, and he has done a great 
job and, frankly, it is just the right kind of work for him. I 
never did look at him that way but they did in terms of his 
great scientific prowess and organizational ability. I think he 
has been a real asset, and I assume you think your laboratory 
is doing much better, right?
    Mr. Freeh. It is, Senator, thanks to him and the support we 
have gotten here. The accreditation was very important but his 
scientific leadership, which we have never had before in 90 
years, is really well felt.

        HEROIN PROBLEM IN NORTHERN NEW MEXICO

    Senator Domenici. To both of you I want to thank you for 
some work you did, your predecessor did and the FBI did, along 
with other Justice Department people, in a very poor county in 
my State named Rio Arriba County where we were leading the 
United States by far in per capita overdose deaths from black 
tar heroin. Up in this poor part of New Mexico black tar heroin 
had almost taken over. There were families involved in it for 
two or three generations and the overdose deaths in our 
hospitals were the highest in America. A real effort was put 
forth jointly and 50 people were arrested. They are all, many 
of them, pleading guilty day by day, and we could not have done 
that if you had not indicated an interest after we called it to 
your attention.
    I am sure things are still going on there because the 
communities are getting a lot more interested in positive 
things so I want to, on the record, thank the Federal 
Government. That effort was a good one. Both of you told your 
groups to get involved, they did and did a great job. Thank you 
for that.
    I want to submit some questions to you with reference to 
counterterrorism and some other things. I do not want to ask 
them now but I am sure that you and your people will answer 
them and we will read them.

           NATIONAL LABORATORY PROTECTION

    I want to focus just a minute on Wen Ho Lee from a 
different perspective. The Wen Ho Lee situation and the entire 
evaluation of the laboratory system, the nuclear weapons 
laboratory system that ended up with the indictment of Wen Ho 
Lee clearly indicated that the FBI offices that are close to 
the laboratories of Los Alamos and Sandia, two of the biggest, 
that those FBI offices were very undermanned for a long period 
of time. As a matter of fact, much of the resources were turned 
to drugs instead of anti-terrorism and crime in the 
laboratories.
    Now you recognized that during the investigation and 
without details, could you assure us that you have fixed that 
situation? I mean if you are going to police an institution 
that has great American secrets that, if stolen, could be 
dangerous, you have to be in a position to do that at Los 
Alamos, Sandia, and Lawrence Livermore National Laboratories, I 
would assume. I assume you have come to that conclusion and are 
doing something about it?
    Mr. Freeh. Yes, Senator, we have come to that conclusion 
and we are doing something about it. In addition to the 60 
agents which this committee, directed to be allocated to the 
major national laboratories, particularly the weapons 
laboratories, that has been done. Those people are present. 
They also have the analytical support necessary, both in the 
field and headquarters, to support that effort.
    The other response, which is perhaps more important in 
terms of long-term significance is the counterintelligence 
structures within the Department of Energy and the 
laboratories, which I think by everybody's concession were 
fairly well broken for some period of time, despite many 
efforts, including your own, to build that up over many, many 
years.
    The counterintelligence structures now within the 
Department of Energy, we are very, very pleased to not only 
observe them but to participate with them. A lot of the 
counterintelligence officers, including Mr. Curran, who is the 
departmental director, are former FBI counterintelligence 
specialists. The resources and the organization that have been 
put into that structure, we think are very, very formidable.
    The other changes that you and your colleagues have made 
with respect to the organization of the department I think are 
also part and parcel of strengthening not only 
counterintelligence capabilities but preventing compromises.
    We ask for in the 2001 budget an increase, one of the few 
personnel increases we do ask for, is in the area of 
counterintelligence--personnel, analytical ability, technology. 
All of that will be applied and as long as we all pay attention 
to that situation, it will not fall again into disrepair.
    Senator Domenici. Thank you very much.
    Thank you, Mr. Chairman. I will submit the other questions.

             IMPROVING THE BORDER PATROL

    Senator Gregg. Senator Hutchison.
    Senator Hutchison. Thank you, Mr. Chairman.
    I would like to ask both of you if you believe that the 
Border Patrol and the DEA and the FBI are working together in 
an optimal way in sharing information and in coordinating, 
where necessary. Clearly, Border Patrol is supposed to be for 
illegal immigration control but because that is so often the 
same operation that includes illegal drugs, it has become a 
dual function. But the question is have they been able to 
undertake the dual function effectively in your opinion? And if 
not, or even if so, how could that be improved?
    Mr. Marshall. From the DEA standpoint, I think for the most 
part they have been able to undertake the dual function 
effectively. And the reason I believe that is, is because we 
have had an onging dialogue with the Border Patrol in terms of 
what our working relationship should be and who handles what 
particular issues. When they make a seizure of drugs, we have 
agreements worked out for when DEA pursues the investigation, 
when the case should be referred to Customs or when, the Border 
Patrol themselves actually handle the initial investigation.
    In some cases we have actually exchanged personnel and co-
located our offices. I believe that what we have done is 
provide a broad framework on how we generally interact between 
the two agencies. We also have given our, Special Agents in 
Charge for DEA the leeway to adapt those guidelines as 
necessary. And I think for the most part we do have a very 
productive, workable relationship.
    Senator Hutchison. So you are saying that there are not 
jurisdictional problems, but are there also ways that there 
could be a more effective use of both agencies?
    Mr. Marshall. Well, I think, when you are talking about two 
large organizations like this, that there is always room for 
improvement but from my perspective, I believe the relationship 
is working very well.

       CREATION OF BORDER PATROL ENFORCEMENT ORGANIZATION

    Senator Hutchison. Well, let me just say this. Some of us 
have talked--Certainly Senator Gregg has been very creative in 
this area but we have talked about whether there should be a 
Border Patrol enforcement organization where instead of having 
two different agencies--the DEA and the Border Patrol--that 
there would be one enforcement agency that would combine the 
functions.
    Do you have any opinion about whether that would be more 
effective or if it would create problems that we are not 
seeing?
    Mr. Marshall. Well, it may fix some coordination problems. 
My impression would be that it may fix coordination problems 
particularly between the Border Patrol and Customs. It also may 
create other problems.
    Again I think on balance, we have an effective working 
relationship with both of these agencies and we believe that we 
are able to get through most of these problems fairly easily.

              IDENT-IAFIS INTERGRATION

    Senator Hutchison. Director Freeh, I know that FBI is less 
front-line in this area but I know there is coordination with 
information. Do you have any views on whether there could be a 
more effective Border Patrol agency in some way coordinating 
better or perhaps creating a different agency?
    Mr. Freeh. You know, I think there are certainly some 
significant things we can do under existing structures and 
jurisdiction to improve the overall efficiency and capability 
of the government. I mean one aspect is fingerprint 
identification, which this committee has paid particular 
attention to. INS has an IDENT system which is distinctly 
different than the FBI's IAFIS system. Remarkably, these two 
systems grew up at the same time.
    We are now in the process, under this committee's 
directive, to study the integration of those two systems so the 
two-finger identification, which is done by a Border Patrol 
agent, can have some relevance to the 34 million prints that we 
have in our IFIS database. That connection is not currently 
available within the Department of Justice. We are looking at 
that now. There are four studies that are being done at a cost 
of $5 million and we are confident that integration can be 
made. That will be an extraordinary improvement in our ability 
to protect the borders of the country and determine who should 
come in and who should not come into the United States.
    Also, there are a lot of things we can do under existing 
structures, short of combining and reforming agencies, which, 
in my experience, is very disruptive.
    Senator Hutchison. Combining is very disruptive?
    Mr. Freeh. Yes, combining two separate agencies would be, I 
think, very disruptive.
    Senator Hutchison. And you think trying to work within the 
structures we have now and doing the things that you have just 
said are being done is the better approach than to try to have 
one single more enforcement-oriented agency?
    Mr. Freeh. Yes, that would be my recommendation.
    Senator Hutchison. Thank you, Mr. Chairman.
    Senator Gregg. Senator Lautenberg.

             REDUCING THE CRIME AND VIOLENCE RATES

    Senator Lautenberg. Thanks, Mr. Chairman.
    My apologies for not having been here to hear the testimony 
of these widely respected witnesses. I commend you, including 
Ms. Meissner, for the job that has been done in getting the 
crime rate down to the lowest point since 1973. The violent 
crime is at its lowest rate since 1993. The murder rate is down 
25 percent since 1993.
    Director Freeh, you and I have a soft spot for New Jersey, 
this is not to suggest that you put more resources into New 
Jersey, but I know the people at the agency there and they are 
very cooperative, they work hard and diligently. There is a 
project under way now, as I am sure you know with the BATF to 
get a common file on ballistics information.
    So I think that everybody deserves a measure of credit for 
having reduced the crime and violence rate.

                   GUN SHOW CHECKS

    There is one loophole, however, that you and I have 
discussed and you know very well that I have been an advocate 
of closing the gun show loophole, which permits unlicensed 
dealers to sell guns without background checks. If Usama-Bin-
Laden got into the country, he could go up to one of those 
dealers and buy a gun and would not get asked a question. No 
one would be checking his background or anything like that. 
That is how outrageous it is.
    As a matter of fact, I was reminded by my staff this 
morning of an incident that is going around right now that the 
NRA has accused me of wanting to shut down gun shows. They took 
it, they said, from a transcript of a press conference we had 
on denying children access to guns in the household. We watched 
the transcript today and it is very specific. It says ``Close 
the gunshow loophole.'' In their memo, their bulletin is out 
there saying Lautenberg wants to close gun shows. So they are 
always ready to distort these things to make a point.
    And I would ask you this. You are aware that we have 
prevented some 470,000 people from getting guns under Brady. 
And you know that I was the author of the law to prevent guns 
from falling into the hands of domestic spousal abusers. That 
domestic violence gun ban has prevented 33,000 abusers from 
getting guns.
    So Director Freeh, what might be the effect of having this 
gun show loophole that permits people to buy guns, no questions 
asked. Recently we heard the testimony of Robin Anderson, the 
young woman who in Colorado appeared before the legislature 
there and testified that she went around with Harris and 
Klebold, the two fellows who committed the murders. She said 
she helped them go around a gun show to find gun dealers that 
would not ask any questions.
    Can you tell us if you see an effect of having this loose 
purchase of guns in terms of our trying to fight crime and cut 
down on violence?
    Mr. Freeh. Senator, my very strong view is that the more 
information, the more authorized information we are allowed to 
have in that database, the better job we are going to do 
protecting people. You cite the instant check background system 
which this committee has funded. Of the 11 million checks, 
100,000 were disallowed. Not only are there over 3,000 
violators of domestic violence orders; there are over 2,700 
fugitives.
    So obviously the more information in that database, the 
better job we will have protecting people. It is like the 
Federal DNA database, which is one of our requests for the next 
year. We would like to include in there--we need authorization 
from the Congress, in addition to some funding--we would like 
to include in there 20,000 convicted felons in the Federal 
system who relate, in some cases, directly to our crimes 
against children program. We would like to have them in the 
database. Not having them in the database is a huge deficit in 
terms of our ability to protect people.
    Senator Lautenberg. Is it not also true that the FBI, with 
regard to background checks, has released some data that say 
that some people escaped being prohibited from getting guns 
because there was not sufficient time to check their 
background?
    Mr. Freeh. I think the figures show more than several cases 
in that category.
    Senator Lautenberg. Last year it was something like 1,100, 
wasn't it?
    Mr. Freeh. I can get you the numbers but it is a 
significant number.
    [The information follows:]
                           Firearm Retrievals
    Transactions exceeding the three business day time limit were 
caused by the lack of arrest dispositions being available in the 
automated state criminal history records. During the period November 
30, 1998, through February 23, 2000, there were 4,683 occasions where 
information was received after the three business days demonstrating a 
purchaser was prohibited, and it was determined that the firearm had 
been transferred to the purchaser, thus necessitating local law 
enforcement or BATF having to retrieve the firearm(s) from the 
person(s) purchasing the firearms.
    The FBI, through Point of Contact conferences, Advisory Policy 
Board meetings, Clerk of Court conferences, and letters to state 
representatives hold discussions to stress the importance of states 
keeping complete and updated criminal records to provide to the 
National Instant Criminal Background Check System (NICS). Based on the 
first year of operation, it is clear that the ability of the NICS to 
stop prohibited persons from acquiring firearms would be improved by: 
More time to complete checks when records are not electronically 
available; a means to help states with the cost of performing as a 
Point of Contact state; a means to assist state courts with the costs 
of seeking disposition information; and additional funds for National 
Criminal History Improvement Program to improve NICS ability to obtain 
final disposition information.
    When the FBI determines that Federal Firearms Licensee (FFL) has 
already transferred the firearm to an individual determined by the NICS 
to be a prohibited person, the FBI notifies both the BATF and local law 
enforcement where the firearm was sold (or where the purchaser lives, 
if different), that a prohibited person received a firearm.

               USER FEE FOR GUN CHECKS

    Senator Lautenberg. Another thing that has come up; that is 
the question of whether or not people who go through the 
national instant checking system should not have to pay a fee 
for that process. I very much favor it. There are 11 million 
requests. Is that 11 million requests a year or that have gone 
on since----
    Mr. Freeh. Since it was inaugurated.
    Senator Lautenberg. Since the system was established. And I 
know that if you want to apply for a license, fishing license, 
et cetera, you pay a fee.
    Mr. Chairman, I think we ought to be recovering some of the 
costs that these users put upon us. I do not know whether you 
discussed that in your testimony but if you have, then we will 
not hold the rest of the committee, but if you have not, would 
you give me a comment on that, please?
    Mr. Freeh. Certainly. The system requires funding next year 
of approximately $72 million, which includes the 642 employees 
who work exclusively on these background checks. The 
administration's proposal, of course, again asks for a user 
fee. I really do not have a strong position on that. What we 
need in the FBI is the funding and the funding source is a 
matter, certainly, within the decision-making of the Congress 
and the Administration. I pay license fees for licenses in 
several States, including New Jersey, and that is a commonly 
accepted method to raise appropriate revenues for enforcement 
purposes. But I really do not have a view on it. We just 
certainly would hate to see this program not get funded, given 
the remarkable success that it has had.

                GUN RETRIEVAL NOTICES

    Senator Lautenberg. I did not place enough reliance on my 
staff because as I look down here I see that between November 
30, 1998 and June 15, 1999, the FBI failed to block about 1,700 
gun sales to prohibited purchasers--criminals--because it did 
not have enough time to conduct the background checks. So the 
FBI then had to issue gun retrieval notices and law enforcement 
people had to try to track down the weapons that these people 
had bought through an insufficient system.

                WAR CRIMES ASSISTANCE

    Director Freeh, the FBI has contributed considerable 
expertise in forensic medicine to support investigations from 
U.N. War Crimes Tribunals in former Yugoslavia and people 
travel to Bosnia and Kosovo to help identify and preserve 
evidence of war crimes and crimes against humanity.
    Now, that is an important role for the FBI in helping to 
achieve justice. How can we assure that the agency is ready to 
support the existing war crimes tribunals for Yugoslavia, 
Rwanda, and similar investigations in other parts of the world? 
Is that a responsibility that we can take and complete?
    Mr. Freeh. It is a very grave responsibility and I think, 
of the many decisions I have made in almost 7 years, that was 
probably one of the ones that I am most proud of. We sent, as 
you very graciously described, two enforcement teams to Kosovo, 
approximately 60 personnel per team, to work under absolutely 
horrific conditions. In fact, we were the largest team 
representing all of the countries that did contribute some 
resources. Our team went there and on two separate occasions 
did, in the words of the chief prosecutor, Carla del Timbel, an 
absolutely extraordinary job identifying dozens of victims, 
excavating sites. In one particular case, the agents excavated 
a well where 18 members of a family ranging from 2 years of age 
to 90 years of age were murdered and thrown in. We received 
reimbursement for all of those activities from the State 
Department, except for our personnel costs.
    I think the United States needs to have that capability. I 
think we should be available and anxious to supply that type of 
very unique forensic experience whenever required. We do not 
need and have not asked for a particular funding source for 
that but I would ask for leave of the committee, as we did 
before we made these deployments, to allow us to undertake 
those missions where requested. I cannot think of anything more 
important for the FBI to do.
    Senator Lautenberg. Thank you very much.
    Mr. Chairman, I would ask unanimous consent to put my full 
opening statement in the record.
    Senator Gregg. Certainly.
    [The statement follows:]

           Prepared Statement of Senator Frank R. Lautenberg

    I want to thank Director Freeh, Commissioner Meissner, and 
Acting Administrator Marshall for appearing before the 
Subcommittee today.
    Each of our witnesses has important crime-fighting 
responsibilities, and I want to commend them for their 
respective roles in helping to make our streets safer. The 
overall crime rate is the lowest it has been since 1973. 
Violent crime is down 27 percent since 1993.
    The murder rate is down more than 25 percent since 1993. In 
my home state of New Jersey, crime is at its lowest level since 
1972. The hard work of our FBI, DEA, and Border Patrol agents 
has made a significant difference, and we appreciate your 
leadership on that front.
    Of course, there is still much work to be done. I am 
particularly concerned about the gun violence that continues to 
take a terrible toll on our nation. Every year, more than 
30,000 people are killed. Each day, the lives of 13 children 
are cut short by gun fire.
    The situation would be much worse without the National 
Instant Criminal Background Check System (NICS) which helps to 
keep guns out of the wrong hands. Since it went into effect in 
1994, the Brady law has stopped more than 470,000 criminals and 
other prohibited purchasers from getting guns.
    That number includes 33,000 domestic violence abusers who 
were prevented from getting guns as a result of the Domestic 
Violence Gun Ban I authored. Director Freeh and all of the FBI 
agents who work so hard on that system deserve our thanks.
    We should support the NICS system by allowing the FBI to 
charge a user fee. There is no reason why American taxpayers 
should subsidize gun ownership. If you want to buy a gun, you 
should bear the cost of showing that you are legally permitted 
to own it.
    Drug-trafficking also continues to be a major problem. 
Cocaine, heroin, marijuana, and methamphetamine flow too easily 
into our country, particularly across the Mexican border. 
Coordinated efforts between your agencies and state and local 
law enforcement, such as the Southwest Border Initiative, are a 
good step forward in trying to stop drug-trafficking.
    And there are other challenges we must grapple with in the 
21st century. We must continue to be vigilant against terrorism 
both domestic and international.
    Additionally, advances in computer technology have made all 
of our lives easier, but have also provided new opportunities 
for criminals. We need to provide appropriate resources so that 
law enforcement can keep pace with cyber-criminals.
    On the issue of immigration, I am proud of our country's 
legacy as a land of opportunity and sanctuary for people around 
the world. Certainly, we need to have immigration policies that 
provide an orderly system for people coming to the United 
States, but our policies should always be guided by compassion 
so that we do not cause additional hardship for families who 
are already in desperate circumstances.
    Again, I thank Director Freeh, Commissioner Meissner, and 
Acting Administrator Marshall for appearing before us today. I 
look forward to hearing about their budget requests for fiscal 
year 2001, and discussing those requests during the question 
and answer period.

    Senator Gregg. Did you have further questions?
    Senator Lautenberg. No.

             NATIONAL DOMESTIC PREPAREDNESS OFFICE

    Senator Gregg. When can we expect to get the reprogramming 
for the NDPO?
    Mr. Freeh. We should have it at the Department of Justice, 
I am told, within a week, Senator, and up here immediately 
after that, as soon as it clears through OMB [the Office of 
Management and Budget].
    [The information follows:]

    The National Domestic Preparedness Office reprogramming was 
submitted to Congress on March 31, 2000.

    Senator Gregg. What is the status of the State and local 
advisory groups?
    Mr. Freeh. The State and Local Group Advisory has not been 
fully constituted or assembled. It is being done now as we 
speak, now that the NDPO has the authorization to proceed, and 
I hope to have that up as quickly as possible. It is a critical 
element obviously to that function being credible.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Gregg. Well, as you know, it is very important and, 
hopefully, it can be done as soon as possible.
    Mr. Freeh. I pledge to do it as quickly as I can.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Judd Gregg

                           USER FEE INCREASE

    Question. Once again the Administration is requesting a $2.00 fee 
increase in the Immigration User Fee. Congress rejected the same 
request last year because the INS failed to provide the justification.
    Can you provide the justification that would warrant an increase?
    Answer. In March 1997, the INS Office of Budget conducted a 
comprehensive review of the Immigration User Fee Account (IUFA) to 
develop and utilize a more consistent and reliable cost accounting 
methodology for determining the adequacy of the current fee. The study 
found that the current user fee of $6.00 was adequate to cover costs 
through fiscal year 1998, but because of increasing costs, from the 
Illegal Immigration Reform and Immigrant Responsibility Act of 1996 
mandates among them (such as expedited removals and automated entry/
exit control system), the revenues collected (new receipts) in fiscal 
year 1999 were not sufficient to cover all of its operating costs. 
Carry forward funding from fiscal year 1998 was used to make up for the 
shortfall in funding.
    To recover a portion of the increasing IUFA costs, the 
Administration proposed to lift the User Fee exemption from cruise ship 
passengers. In fact, the Administration first proposed lifting the 
exemption in fiscal year 1995. Fiscal year 2000 Congressional action 
did not remove the exemption for cruise ship passengers, which 
translated into costs of approximately $20 million without any 
offsetting cruise ship receipts for every year the exemption remains in 
effect.
    Fiscal year 1999 Conference action permanently transferred $29.5 
million in requirements from base Salaries and Expenses funding to the 
IUFA. The combined impact of not lifting the cruise fee exemption and 
transfer of the $29.5 million over two years has adversely affected 
INS' ability to cover its base operations. As a result, INS has been 
forced to cover its IUFA operating costs by relying on carry forward 
revenue. Relying on carry forward revenue in fiscal year 1998 and 
fiscal year 1999 creates a very cautious spending environment for the 
IUFA in fiscal year 2000 and establishes deficits in the outyears.
    Question. What are the costs associated with the Inspection process 
that warrant a $2.00 increase?
    Answer. The fiscal year 2000 financial plan for the User Fee 
Account is predicated upon a reprogramming notification that is 
currently pending. The reprogramming requests an increase from the 
fiscal year 2000 IUFA authorized level of $446,151,000 to $487,000,000, 
representing an increase of $40,849,000 or 1.1 percent over the fiscal 
year 1999 budget. With the reprogramming of these funds, INS will 
temporarily preempt a potentially severe reduction in airport-related 
services in fiscal year 2000. Even with the approval of the fiscal year 
2000 Immigration User Fee Reprogramming, Immigration User Fee program 
costs will continue to far exceed new revenues. During fiscal year 
2000, prior year carry forward funds will be almost depleted, leaving 
an estimated $4,889,000 to carry forward into fiscal year 2001. This is 
insufficient to cover services that the INS must provide for fees 
already collected. Hence, in fiscal year 2001 and beyond, the solvency 
of the account will be in jeopardy.
    The fiscal year 2001 budget request includes language that would 
increase the current Immigration User Fee for air passengers (and 
transoceanic cruise passengers) by $2.00, to $8.00, and would lift the 
cruise ship exemption (affecting nearly 99 percent of cruise fee 
passengers) and institute a $8.00 cruise ship fee. The cruise fee would 
be collected from passengers whose journey originates in Mexico, 
Canada, the United States, a territory or possession of the United 
States, or any adjacent island to the United States. The proposed 
cruise ship fee would not apply to immigration inspection at designated 
ports-of-entry of passengers arriving by Great Lakes international 
ferries or Great Lakes vessels on the Great Lakes and connecting 
waterways, when operating on a regular schedule. Revenue from both of 
these fee increases is assumed in the fiscal year 2001 President's 
budget request.
    In fiscal year 2001, a total budget of $529,103,000 is requested 
for the Immigration User Fee Account (IUFA). This spending level 
includes two enhancements: (1) upgrading of the journey grade of 
Immigration Inspector positions from GS-9 to GS-11 and (2) hiring of 
154 new Immigration Inspectors to staff the opening of new 
international airport terminals including a new terminal at San 
Francisco.
    Without an increase in the fee and elimination of the cruise ship 
exemption, INS may be forced to reduce services in fiscal year 2001. 
The likely result of this service reduction would be longer waiting 
times at airports and an inability to carry out certain airport-related 
initiatives in the Inspections, Detention and Deportation, Intelligence 
and Data and Communication Programs.
    Question. INS has virtually the same process for air passengers 
that it had in 1987 when the fee was first established.
    Rather than ask for a fee increase, what actions has INS taken to 
redesign its work process or to reduce the costs of your operation?
    Answer. The inspection process has been updated and modernized 
through the use of technology that allows for facilitation of bona fide 
travelers and identification of malafide travelers. Advance Passenger 
Information is being used by Passenger Analysis Units to screen 
passengers in advance of their arrival thus allowing for the increased 
identification and apprehension of immigration violators and recidivist 
travelers and the facilitation of bona fide travelers. This initiative 
has been undertaken with the cooperation of the airline industry. 
Regrettably, neither the quantity nor quality of the data currently 
provided is sufficient to allow radical redesign of the present process 
without introducing unacceptable risks to national security.
    The cost of developing, refining and implementing new technology 
for facilitation of travel has exceeded the monies generated from the 
current user fee. Expansion of international airports has necessitated 
an increase in staff and use of technology to maintain the current 
level of services.
    Question. INS has suggested that the increase in passenger volumes 
will increase the need for additional program funding. Why? If 
passenger volumes are increasing, then, as a matter of course, 
shouldn't the amount of money paid in the form of user fees increase in 
direct correlation?
    Answer. Despite a projected increase in passenger volumes, the 
additional revenue will not be sufficient for the INS to recover the 
cost of statutorily-mandated User Fee activities. Two factors are 
responsible for this situation.
    Increasing passenger volumes affect both sides of the revenue and 
expenses equation. Rising passenger volumes also contribute to higher 
cost requirements. More passengers will mean that a greater number of 
inspectors will be needed as well as higher overtime requirements to 
maintain existing processing standards. Higher passengers volumes may 
also mean a greater number of passengers who might have to be detained, 
and these detention costs are very costly to the account.
    In addition, the account is required to fund services for which no 
revenue is generated. The current user fee of $6.00 continues to offset 
the costs required to inspect millions of cruise and air passengers 
that are presently exempt from paying the user fee. Resources are 
expended to conduct these inspections which would otherwise generate 
additional revenue to help offset the costs attributed to the workload. 
In addition, costs have been transferred from the Salaries and Expenses 
account--$29.5 million was shifted to the User Fee Account in fiscal 
year 1999 alone.
    The IUFA has relied on carry forward amounts for the past three 
fiscal years to cover its base operations, it is expected that severe 
program reductions are imminent. For these reasons, INS requests an 
IUFA fee increase for air passengers of $2.00, to $8.00, and requests 
that the cruise ship exemption be lifted and replaced with legislative 
language that would institute a $8.00 cruise ship fee.
    Question. INS has proposed to reduce services at ports of entry if 
their User Fee increase request is not granted. Air carriers collect, 
collate and transmit data required by the INS on an increasing 
percentage of passengers arriving in the United States on behalf of the 
INS. Airports provide facilities at no costs to the inspecting 
agencies. The airlines and the airports supplement INS staff at ports 
of entry with personnel to direct and control passenger traffic, 
provide translation services and law enforcement security for the 
federal inspection facilities. These are costs directly borne by the 
airline industry.
    Why does the INS seek to penalize the airline industry, when it 
should be seeking to work in partnership to develop better, faster and 
safer ways of inspecting individuals entering the United States?
    Answer. The INS seeks to work with the airline industry, not to 
penalize it, both to facilitate legitimate travel and to address fraud 
and other abuses. We have established a Carrier Affairs Office to 
provide training to the industry, we have entered into Memoranda of 
Understanding to mitigate fines, and we work in partnership with the 
industry in many joint working groups.
    The INS has no immediate plans to reduce inspection services, 
however the current fee will soon be unable to keep pace with the costs 
incurred in performing inspections services at the nation's air and sea 
facilities. Congress has noted in recent comments on the INS account 
that it faces a crisis due to costs exceeding receipts, the recurring 
use of carryover to meet annual requirements, and the inability to 
satisfy long-term resource requirements. Lacking an adjustment in the 
existing fee level, the unfavorable balance between revenues and 
operational demands will eventually result in degradation of airport 
services. Impact on INS operations may include: reduction in the 
ability to meet the Congressionally-mandated 45-minute wait time; 
inability to staff newly-constructed airport facilities; reduced INS 
participation in anti-smuggling operations; and reduced INS/United 
States Customs Service enforcement work on Passenger Analysis Units and 
the scripted Advance Passenger Information project to intercept 
criminal aliens.
    Question. Many suggestions have been made by the airline industry 
to improve the efficiency and effectiveness of current INS procedures 
to avoid the need to increase the User Fee. These include (1) reviewing 
the current pre-clearance and pre-inspection programs to analyze their 
impact on staffing efficiencies; (2) allowing domestic blocking of 
certain low-risk international flights which would relieve the impact 
of traffic at ``peak'' times; (3) reviewing existing program and 
regulations requiring the collection and transmission of passenger data 
to explore opportunities to further automate existing programs such as 
the Advance Passenger Information System (APIS) and INSPASS; and (4) 
combining border management initiatives to reduce the number of 
personnel required to maintain an effective border management program, 
including cross training, shared data opportunities and the exploration 
of risk based inspection procedures.
    Has INS considered any of these suggestions in reviewing their 
budget for this year? If not, why not?
    Answer. (1) The use of pre-clearance and pre-inspection processes 
has limited utility. Internal INS reviews have indicated that these 
procedures are not cost effective in all instances. Additionally, 
establishment of new locations to conduct such operations is subject to 
agreement on the part of host countries to allow U.S. law enforcement 
activity in their territory and agreement with affected airports to 
make adequate facilities available. Both of these conditions have 
created barriers to the expansion of this program.
    (2) The systematic bypassing of Federal Inspection Service (FIS) 
agencies by airlines by allowing domestic blocking of certain flights 
would be an open invitation to fraud and smuggling. The INS experience 
has indicated that organized smuggling groups are very adept at 
adapting their operations to perceived weaknesses in the INS and other 
FIS agency screening processes. A clear example of this was seen in the 
1990's when large numbers of passengers with no documents arrived at 
certain U.S. airports where inadequate detention facilities were 
available.
    (3) The INS realizes that the airline industry supports the APIS 
and INSPASS systems. We are conducting a thorough review of the current 
procedures in place. Once this review is complete, we will be in a 
better position to consider other procedures and the future of the 
program.
    (4) The INS is working closely with other FIS agencies and with the 
Federal Aviation Authority, the U.S. Coast Guard, and other groups to 
ensure that there is a seamless and efficient process for travelers as 
they enter the United States while maintaining the security of our 
borders. Data is already shared among FIS agencies and additional 
opportunities to coordinate our operations more closely are constantly 
being explored through initiatives such as Port Quality Improvement 
Committees and Passenger Analysis Units.

                                INSPASS

    Question. INSPASS was first implemented in 1993--seven years ago. 
Five years later, according to the INS Internet site, INS processed 
222,000 people through it, or less than one-third of 1 percent of 
arriving passengers.
    Is this true?
    Answer. Yes. INSPASS is still a pilot program. Although popular 
with the industry, the INS is still addressing a number of important 
issues, some of which were identified by the Department of Justice's 
Office of the Inspector General in its draft report of July 1999. More 
importantly, the INS is conducting a full review of the role of 
automated inspections in general and INSPASS in particular to determine 
whether these processes offer cost effective alternatives to 
traditional staffed inspections.
    Question. In the February 16, 2000, Federal Register notice on the 
status of the Immigration User Fee Account, INS suggested that INSPASS 
was a measure that was being used to expedite the inspection process. 
Where the program is in place, the expedited service is working well. 
Yet INS is asking once again for over 150 more airport inspectors and 
requesting to increase inspector pay by $29 million, but no where does 
INS say that they are going to make things easier, faster, or better 
for the traveling public, especially returning US citizens.
    If this is true, why has INS under-funded the program for the last 
several years?
    Why are no expansions of this program included in this year's 
budget request?
    If INSPASS is not the right technology, is INS developing something 
new? If not, why not?
    Is there a reason why Congress shouldn't mandate the installation 
of INSPASS units at all U.S. airports?
    Answer. For the past 2 years, the INS has been considering an 
INSPASS regulation that would charge a fee to cover funding if this 
process becomes part of our standard operating procedure at airports. 
This would fund the program in part. In addition, in 1999 the 
Department of Justice Office of Inspector General (OIG), as a 
consequence of its recent audit, recommended the INS not expand the 
INSPASS to additional locations until significant and expensive 
revisions could be made in the enrollment and validation system 
components. More recently, a complete analysis of system benefits and 
costs has been undertaken so that a better-informed decision may be 
made.
    The INS recognizes that current INSPASS technology may no longer be 
the right technology but the INS does not have the funding available to 
leverage newer technology. A congressional mandate requiring 
installation of INSPASS systems at all major airports would not be 
helpful without the appropriation of funds to develop an alternative 
technology for use in the INSPASS process and the appropriation of 
funds for deployment of the systems after development has been 
completed.
    Question. Back in November 1998, the airline industry was told that 
Honolulu, Seattle and Dulles were the next sites to be developed. To 
date, only Dulles has come on line--even though the equipment has been 
bought for Honolulu and Seattle.
    It is now March 2000. What is the delay in having the program 
installed at Honolulu and Seattle?
    What about future sites that were originally promised, such as 
Dallas/Ft. Worth, Newark and Houston?
    Answer. For fiscal year 2000, INS does not have the necessary 
funding to support and maintain the systems at Honolulu and Seattle and 
to concurrently address the OIG's recommendations on improvement and 
enhancement of the system before expansion. Currently, there are no 
plans to expand to additional sites; until the INS has completed its 
assessment of the INSPASS concept and current technology; until 
adequate funding has been identified; and until the INS has fully 
complied with the OIG's recommendations.

                          SERVICE ENHANCEMENTS

    Question. Most airlines today provide INS with Advance Passenger 
Information data.
    How does INS use this information to aid the processing of 
passengers?
    Why is INS the only Federal Inspection Agency still requiring a 
primary inspection or examination for every passenger entering the 
United States?--despite the Advance Passenger Information provided by 
the airline?
    Answer. The provision of data to the INS and other Federal 
Inspection Agencies itself does not address fraud, counterfeiting, 
misrepresentation, false claims or the use of documents by look-alikes. 
Examining every arriving passenger at primary inspection points to 
ensure proper documentation and review of travel documents for 
imposters and possible fraud is necessary to maintain the security of 
the United States and prevent the entry of terrorists and others who 
are inadmissible by statute.
    The information is used to expedite the processing of bona fide air 
travelers substantially by eliminating the need for an inspector to 
perform a full primary computer query and as an enforcement tool by 
providing ports-of-entry with advance notification of arriving 
passengers who are the subjects of lookouts.
    The INS, by agreement with the other FIS agencies, conducts the 
initial primary inspection for all agencies. This allows both the U.S. 
Customs service and the Animal and Plant Health Inspection Service to 
employ alternative inspection processes to achieve their missions.
    Question. The INS intercepts only about one maleficent claim to 
U.S. citizenship for about every 10,000 passengers examined.
    What is INS doing to accelerate U.S. citizen clearance?
    Does INS measure clearance times for U.S. citizens only--and, if 
not, why not?
    Answer. The INS has experimented with Accelerated Citizen 
Examination (ACE), an oral declaration of citizenship by U.S. citizens 
on selected arriving flights. This has been useful but lacks an 
adequate mechanism to address risks fully. Also, passport readers have 
been installed at the major airports and returning U.S. citizens with 
passports and lawful permanent residents with resident cards are 
processed quickly. Additionally, the INS has experimented with fully 
automated inspections using the INSPASS process that is used mostly by 
U.S. citizens.
    Clearance times are collected at each site and are used to 
determine staffing levels at each location. INS is mandated to clear 
all flights within 45 minutes, and those flights that are participants 
in the API program are being cleared within 30 minutes. During the 
first two quarters of fiscal year 1999, 97.1 percent of all flights 
were cleared within the required 45 minutes.
    Question. Many airlines today use electronic tickets and self-
service devices (SSD's) to enable passengers to complete the check-in 
process without having to see an agent.
    Is INS looking at similar technology for processing frequent 
flyers?
    Answer. The INS Passenger Accelerated Service System (INSPASS) is 
an automated system that can significantly reduce immigration 
inspection processing time for authorized travelers. INSPASS combines 
automation with a hand geometry biometric image to validate the claimed 
identity of an individual. Eligible frequent travelers may enroll in 
the program at any INSPASS enrollment office.
    Arriving at a port-of-entry, the traveler proceeds to an INSPASS 
inspection queue. There, the person inserts a card issued to them at 
enrollment to an INSPASS kiosk, similar to automated bank teller 
devices. Responding to messages on the kiosk's touch-screen display, 
travelers are prompted to enter their flight number (certain persons 
only) and to place their hand on a hand geometry reader. Screen prompts 
are used to achieve correct alignment of the hand with the hand reader. 
The kiosk software automatically compares the live scan of the 
traveler's hand geometry biometric to the image captured at enrollment. 
If the traveler's identity is validated by this comparison, an I-94/
receipt of his inspection is printed by the kiosk that directs the 
traveler to proceed to U.S. Customs inspection. If this check is not 
successful, a screen message refers the traveler to an immigration 
inspector in a nearby inspection booth. Processing time of 15 to 20 
seconds are typical, and times as low as 11 seconds have been observed 
at existing INSPASS kiosks.
    Automated inspection kiosks are not staffed. There are presently 
over 45,000 active participants. More than 300,000 admissions have been 
made at INSPASS kiosks since 1995. Immigration inspectors have 
conducted more than 10,000 compliance checks of INSPASS admitted 
persons with no fraud found.
    INSPASS is operational at nine international airports: Detroit, Los 
Angeles, Miami, Newark, New York City (JFK), San Francisco, Washington, 
D.C. (Dulles), Toronto, and Vancouver.

                                STAFFING

    Question. INS uses a Work Analysis Model (WAM) to allocate 
inspector staffing.
    Are all airports staffed at the same percentage of the WAM?
    Answer. INS attempts to maintain all airports at roughly the same 
percentage of the WAM. However, yearly traffic growth or decreases at 
some airports can significantly alter the percentages from one year to 
the next. Another factor, which impacts on our ability to maintain 
equitable percentages, is the availability of new staff. If we do not 
receive airport staffing increases, we are not able to maintain an 
equitable staffing percentage at airports that are experiencing 
substantial growth. Therefore, airports may be roughly be staffed at 
the same percentage in one year and not in the next, due to the above 
mentioned factors.
    Question. How does INS ensure that all airports have their fair 
share of inspector staff?
    Answer. We use the Workforce Analysis Model (WAM) to assist us in 
the deployment of new resources. The model attempts to move all ports 
as close to the service-wide percentage as possible.
    Question. What percentage of all airports inspectors are part-time 
during the summer peak?
    Answer. The use of part-time inspectors, that is, the use of other 
than permanent fully-trained professional officers as inspectors, is 
problematic for the INS. This practice developed before the 
introduction of user fees as an expedient to meet the need for staffing 
when air traffic growth was outstripping the ability of the INS to 
address this growth through the normal budgetary process. This practice 
has continued at a small number of airports and seaports to address 
unique circumstances, including minor increases in traffic during 
certain high travel periods. Currently the INS has approximately 300 
part-time inspectors available to work out of a total user fee funded 
workforce of 3,084.
    Question. What is INS doing to maximize the use of part-time 
inspectors to cover high volume periods?
    Answer. The INS is considering whether it truly serves the best 
interests of the traveling public, the airline industry, and the nation 
to continue relying on less than fully-trained professional officers to 
deliver critical inspection services. Though an analysis of use 
patterns we have determined that the greatest use of part-time 
inspectors occurs at locations where traffic volume doesn't fully 
warrant the use of full time inspectors, for example, at locations 
where flights are not scheduled on a daily basis. We are trying to 
identify how to meet the staffing needs of these locations in an 
efficient manner without the undue reliance on part-time officers.
                                 ______
                                 
               Question Submitted by Senator Ted Stevens

              ANCHORAGE DISTRICT OFFICE EXPANSION PROJECT

    Question. I am told that the Immigration and Naturalization Service 
has experienced an explosion in growth over the past few years and that 
many of INS' physical locations are inadequate for the needs of the 
districts. In my state, the owner of the building the INS uses in 
Anchorage has been holding space vacant for an INS expansion for 2 
years. The INS currently occupies the 1st and 3rd floors while the 2nd 
floor remains vacant. The owner of the property has been loyal to the 
INS and appreciates their commitment to Alaska, however, she cannot be 
expected to hold an entire floor of her building vacant while INS 
headquarters sits on the district's request for additional space. It 
hinders the INS' ability to do their jobs effectively in Alaska and it 
is causing a financial hardship on a local property owner who is 
committed to working with INS.
    What is the INS doing to address the problem of inadequate spacing 
and physical resources for those Districts that have had significant 
growth recently and when can we expect INS to approve the space request 
for the Anchorage Office so that we can put this property owner's 
uncertainties aside?
    Answer. Since fiscal year 1996, the Immigration and Naturalization 
Service has experienced a dramatic increase in hiring. This increase 
has generated a significant increase in office space requirements. 
Currently, there are over 120 space actions in the Lease Acquisition 
Program, requiring over $136 million to complete. The INS has developed 
a priority list for all space requirements, based on various criteria. 
The Anchorage District Office expansion project is included on this 
unfunded priority list. Based on current funding levels, it is expected 
that the Anchorage District Office expansion project will be initiated 
in fiscal year 2003.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

          OPERATION AND MAINTENANCE CENTER FOR INS ISIS SYSTEM

    Question. Director Meissner, the Administration has proposed $38 
million in the President's budget for continued procurement and 
deployment of the Integrated Surveillance Intelligence System (ISIS).
    This force multiplying technology has been helpful in deterring 
illegal border crossings and has increased the safety of Border Patrol 
officers who respond to these crossing incidents.
    I understand that this $38 million request will fund the deployment 
of approximately 100 new ISIS sites along the border.
    What is the current state of the ISIS system along the southwest 
border?
    Answer. The Remote Video System (RVS) component of the Integrated 
Surveillance Intelligence System (ISIS) began initial deployment in 
May, 1998. To date, 91 RVS sites have been deployed operationally, 8 of 
which are located in New Mexico, 38 in Arizona, 44 in Texas, and 1 in 
California.
    Question. Does the INS have the resources it needs to continue 
deployment of this system?
    Answer. There are sufficient resources to proceed with 
approximately 60 more ISIS RVS installations during fiscal year 2000. 
We have a multi-year deployment plan, however the number of deployments 
in fiscal year 2001 and beyond is contingent upon future funding 
levels. As the ISIS system grows, a greater amount of its funding must 
be devoted to operations and maintenance, therefore, the requested 
funding is critical for the continued growth of the system.
    Question. When do you expect that the ISIS system will be completed 
along the southwest border?
    Answer. Based on site locations defined during the initial 1996 RVS 
Requirements Survey, a preliminary estimate of 353 RVS were identified 
for the southwest border. Of these, 91 RVS installations have been 
completed to date. Dependent upon the level of funding received, it is 
anticipated that the remaining 262 sites will be installed by the end 
of fiscal year 2003. It is noteworthy that wherever RVS systems have 
been deployed and become operational, sector requirements for RVS sites 
have changed significantly. As the word of the success of the RVS 
systems spreads, more requirements for systems are identified. For 
example, one southwest sector indicated an increase from an initial 
number of 75 sites to 330 sites. In order to update and formalize these 
requests, a new RVS survey will be implemented in third quarter of 
fiscal year 2000 to establish a new requirements baseline.
    Question. Would the INS benefit from a centralized Operations and 
Maintenance Center for this system in the southwest?
    Answer. Due to increased funding since 1996, U.S. Border Patrol 
inventories of infrared camera, night vision, sensor, and other types 
of equipment have grown substantially. This equipment is utilized to 
effectively monitor the integrity of U.S./Mexican and U.S./Canadian 
national boundaries for purposes of border control. The increase in 
magnitude of new equipment and the influx of new technology mandates 
the establishment of an optimal operational maintenance schedule for 
these systems. Presently, Operation and Maintenance (O&M) for ISIS RVS 
systems is being accomplished primarily through the use of contract 
personnel. U.S. Border Patrol technical personnel at facilities in the 
San Diego and El Paso sectors perform infrared camera maintenance. 
Analysis indicates that a better, more cost effective maintenance 
posture can be attained with the establishment of a single consolidated 
center to respond to and service the entire southwest border rapidly 
and efficiently.
    The establishment of an O&M Center would mean an immediate release 
of presently assigned facility personnel back into the U.S. Border 
Patrol technician pool. In addition, there will be an improvement in 
maintenance operations and control, and establishment of a single 
repair depot for infrared and thermal cameras, low light Color Cameras, 
Night Vision devices, Sensors, and Microwave communications equipment. 
Also, a Calibration and Standards Center, which is not presently 
available, could be established.
    The O&M Center will reduce repair turnaround time for IR cameras 
from 3 months to only days, will allow Mobile Technical Units to be 
deployed to augment the support personnel and assist the sectors as 
designated and for emergency situations. (These Mobile Technical Units 
are fully equipped assistance vehicles manned by engineering and 
technical personnel.) This O&M Center will also serve as: 24 hour ISIS 
Help Desk Center; Training and Testing Center for INS and U.S. Border 
Patrol agents and technical personnel; Replacement Facility for 
equipment storage and staging that would negate the need for each 
sector to order from many different vendors; Data Collection and 
Reporting Facility enabling centralized collation of equipment repair 
histories and maintenance information; and, Consolidated Inventory 
Tracking and Records Keeping Center for the U.S. Border Patrol.
    With establishment of the O&M Center centralized O&M funding will 
occur. This mechanism will allow streamlining of maintenance funding 
processes and provide clear audit trails for U.S. Border Patrol 
technical programs. It will allow economies of scale cost savings and 
benefits for U.S. Border Patrol maintenance programs and will serve as 
a Center of Excellence facility for the Department of Justice.
    Question. How is the system maintained currently?
    Answer. The ISIS system is currently being maintained primarily by 
contract personnel employed by International Microwave Corporation, the 
primary vendor and installer, and with the use of extended warranties. 
U.S. Border Patrol technical personnel have received training to 
provide lower echelon maintenance on the system, as well.
    Question. How much would a centralized O&M facility cost?
    Answer. Initial costs for startup of a centralized maintenance 
facility are estimated to be in the $1.5 to $2.5 million range. Follow 
up costs, once the Center is fully equipped and operational, and is 
performing the functions and activities outlined and delineated above, 
are estimated to be approximately $7 million per year.
    At present, O&M for ISIS RVS systems is accomplished primarily 
through the use of contract personnel. Although a training program to 
ensure in-house maintenance competency for U.S. Border Patrol technical 
personnel has been established, the increase in magnitude of new 
electronics equipment to assist the U.S. Border Patrol in its border 
control mission, coupled with the overall shortage of available 
technical support personnel, clearly indicates a need to augment the 
technical work force through the use of contract personnel. 
Additionally, two separate maintenance facilities, both manned by 
scarce U.S. Border Patrol technical support personnel, are being 
utilized to maintain the Border Patrol's Infrared camera inventory. 
Consolidation of these three functions into a single O&M Center, 
centrally located to best service the southwest border, would benefit 
INS by the immediate release of the technical personnel back to U.S. 
Border Patrol, cessation of duplicate activities, release of the 
existing facilities, an increase in the types and classes of technical 
services and maintenance activities able to be provided to the U.S. 
Border Patrol, and cost savings enabled by avoiding duplication of 
efforts.
    Question. How does the Border Patrol monitor ISIS sites to 
determine when repairs are needed?
    Answer. A 24-Hour ISIS Help Desk has been established to respond to 
calls for repairs and other types of assistance required by the U.S. 
Border Patrol to maintain operational status. U.S. Border Patrol 
personnel familiar with ISIS equipment are trained to operate it, log 
any equipment malfunction or failure, and notify the ISIS Help Desk 
directly or through their appropriate chain of command. Once noted, an 
analysis and appropriate response is made. This response could range 
from simple telephonic assistance to assignment of technical or 
engineering personnel to effect repairs.

         DETERMINING RESOURCE NEEDS FOR DEPORTATION PROCEEDINGS

    Background: In its January 2000 options review, GAO recommended 
that INS consider developing a workload analysis model to help the INS 
determine resource needs for completing IHPs on all eligible aliens, 
and giving priority to completing the IHPs for aliens serving 
aggravated felonies.
    GAO estimates that hundreds of those releasees were serious felons, 
who should have been placed in removal proceedings while in prison and 
taken into INS custody upon release. Some of these releasees were 
subsequently rearrested for new crimes, including felonies.
    GAO concluded that even when INS determined that an alien was 
potentially deportable and should be placed into removal proceedings, 
INS did not complete the IHP for at least half of such cases in each 
year. As a result this failure to complete the IHP before prison 
release, INS incurred substantial avoidable detention costs estimated 
at $40 million annually.
    Question. The INS' Institutional Hearing Program (IHP), now called 
Institutional Removal Program, is the main vehicle used by the 
Department of Justice for placing aliens who are incarcerated in state 
and federal prisons into deportation proceedings so that they can be 
deported expeditiously upon release from prison. GAO has determined 
that, during 6-month periods in 1995 and 1997, INS failed to identify 
nearly 2,000 potentially deportable aliens before they completed their 
prison sentences, resulting in their release into communities across 
the United States before their risk to public safety was determined. 
This also has resulted in substantial detention costs that could have 
been avoided.
    What strategies has INS put in place to resolve the IHP failure?
    Answer. As noted in the question, the first data collection period 
that the General Accounting Office (GAO) used to evaluate the 
Institutional Removal Program (IRP) was January through June 1995. This 
was five years ago, before INS had even implemented most of the 
enhanced IRPs. The more recent data collection period was three years 
ago, January through June 1997. Although most of the enhanced IRPs were 
in place at that time, we were not seeing the full benefits because 
inmates processed up front were, for the most part, still serving their 
sentences. Since that time, INS has made significant improvements in 
the IRP.
    One major strategy employed by INS to improve the IRP focused on 
elimination of an interview backlog. The backlog consisted primarily of 
inmates who were already in prison serving sentences when enhanced IRPs 
were implemented, and who were not, therefore, interviewed by INS at 
intake. Backlogs in the major state IRPs were eliminated last year.
    We have also improved our work measures to reflect the work done in 
the IRP more accurately. In addition to the traditional IRP removals 
(aliens who received an order of removal while incarcerated), we now 
count criminals whose removal was ordered on the day of, or the day 
after release from incarceration. The IRP removal statistics shown 
below are indicative of the improvements we have made.

------------------------------------------------------------------------
                                                              Order w/in
                                                Order Prior    1 Day of
                                                 to Release    Release
------------------------------------------------------------------------
Fiscal year:
    1998 IRP Removals.........................       13,545        1,345
    1999 IRP Removals.........................       19,842        4,335
    2000 IRP Removals (4 months)..............        6,814        1,559
------------------------------------------------------------------------


                   LAW ENFORCEMENT IN INDIAN COUNTRY

    Question. How much of the proposed $82 million increase in Indian 
law enforcement funding will go to the FBI?
    Answer. The FBI is requesting $4.639 million for Safe Trails Task 
Force overtime, contracts for forensic exams and 31 victim witness 
specialists.
    Question. Two of the FBI initiatives--the Safe Trails Task Forces 
and the Victim Witness services have been key to your efforts in Indian 
Country. What have the 10 Safe Trails Task Forces accomplished in the 2 
years they have been operating in Indian Country (one is in Gallup, New 
Mexico)?
    Answer. The first Safe Trails Task Force (STTF) was implemented in 
the Flagstaff Resident Agency of the Phoenix Field Office to work on 
the Navajo Nation in Arizona in 1994. Currently there are 11 STTFs 
based in Gallup, NM; Carson City, NV; Green Bay, WI; Rapid City, SD; 
Phoenix, AZ; Flagstaff, AZ; Tucson, AZ; Monticello, UT; Glasgow, MT; 
Lander, WY; and Bend, OR.
    These STTFs have successfully obtained numerous indictments and 
convictions in Indian Country (IC). The following chart details the 
1999 accomplishments of the eight STTFs that were operating during the 
entire year. Not included are task forces started during 1999, which do 
not have full-year statistics.

----------------------------------------------------------------------------------------------------------------
                                                                       1999
                                                                    Information     1999 Arrest        1999
                     Location of Task Force                             and         and Locates     Convictions
                                                                    Indictments
----------------------------------------------------------------------------------------------------------------
Gallup, NM......................................................              57              58              49
Carson City, NV.................................................              12              10               4
Green Bay, WI...................................................               9              10               4
Rapid City, SD..................................................               2               2               1
Flagstaff, AZ...................................................              71              87              28
Tucson, AZ......................................................               7              20              12
Monticello, UT..................................................               6             155               9
Glasgow, MT.....................................................               7               2               7
                                                                 -----------------------------------------------
      TOTALS....................................................             171             344             145
----------------------------------------------------------------------------------------------------------------

    The STTFs have allowed law enforcement agencies in IC to avoid 
duplication and thereby maximize the use of limited FBI, tribal and 
Bureau of Indian Affairs (BIA) personnel resources to investigate 
significant IC violent crime problems of mutual concern and 
responsibility. The STTFs ensure that violent crime cases in IC are 
approached in a shared and cooperative effort in spite of complex 
jurisdictional issues inherent in IC. The STTFs also enable tribal 
criminal investigators to learn FBI investigative practices that can be 
applied in non-STTF matters.
    Question. What will the FBI accomplish with the $4.6 million and 31 
Victim Witness Specialists that you have requested in the fiscal year 
2001 budget? Is this a key part of the federal effort to enhance law 
enforcement in Indian Country? Why?
    Answer. The $4,639,000 will be used by the FBI to contract forensic 
examinations for Indian Country (IC) in 3 more states ($1,405,000), 
hire and train 31 Victim Witness Specialists (VWS) who will be assigned 
to IC Resident Agencies (RAs) ($2,600,000) and provide overtime for 
state, local and tribal police officers assigned to Safe Trails Task 
Forces (STTFs) ($634,000). These are all key parts of the federal 
effort to enhance law enforcement in IC.
    The FBI has criminal jurisdiction in IC for major crimes under the 
IC Crimes Act (18 U.S.C. 1152), the IC Major Crimes Act (18 U.S.C. 
1153) and the Assimilative Crimes Act (18 U.S.C. 13). Thirty-two FBI 
field offices have some degree of investigative responsibility in IC, 
ranging from exclusive federal jurisdiction--19 field offices--to 
concurrent federal and state jurisdiction. The Violent Crime Control 
and Law Enforcement Act of 1994 expanded federal criminal jurisdiction 
in IC in such areas as guns, violent juveniles, drugs and domestic 
violence. Because of the FBI's unique responsibility in IC, 
enhancements are key to improving federal law enforcement's efforts in 
IC.
    Contract Forensic Exams.--Violent crime cases for which the FBI has 
jurisdiction in IC (e.g., murder, aggravated assault and sexual assault 
of adults and children) involve biological evidence requiring forensic 
examinations, the results of which are often needed before arrests are 
made and indictments obtained. The FBI Laboratory cannot currently 
provide timely turnaround for forensic examinations of evidence from IC 
violent crime cases. At times this results in IC cases being dismissed 
because of the Speedy Trial Act. Although the Laboratory's cadre of 
qualified examiners is expanding, it will likely remain insufficient to 
provide acceptable turnaround time for all IC cases until at least 
2002.
    As a result, many FBI IC field offices send evidence to either 
commercial or state laboratories for examination. The FBI entered into 
a contract with the Arizona Department of Public Safety (AZ DPS) in 
April 1998 for examinations of IC cases for the Phoenix field office. 
This contract was necessary because the state legislature had ordered 
the laboratory to stop performing examinations in federal cases without 
payment for services.
    The additional funding will allow the FBI to enter into contracts 
with state labs to examine IC forensic evidence for Minneapolis, 
Albuquerque and Salt Lake City field offices. Phoenix and these 3 field 
offices cover 77 percent of the FBI's work in IC. With these contracts, 
the FBI will be able to ensure a uniform level of forensic service that 
meets Speedy Trial Act requirements for its major IC offices.
    Victim Witness Specialists.--FBI special agents currently provide 
victim witness services in IC. However, because their primary 
responsibility is to conduct investigations, they rarely can provide 
more than minimal assistance. Because of this, the FBI requests 31 VWS 
for its Victim Witness Assistance (VWA) Program to work in 26 RAs to 
better address the needs of the victims of violent crime in IC. For 
most of IC, federal law enforcement is the only protection that victims 
have from violent crime. Violent crime rates in IC are significantly 
higher than in the rest of society. Since sexual/physical abuse of 
children is one of the largest crime problems in IC, a high percentage 
of the victims in IC are children. Many children in IC are either 
victims of, or witnesses to, the most horrible violent crimes 
imaginable--homicides, rapes and aggravated assaults. Due to severe 
alcoholism in IC, many victims suffer from fetal alcohol syndrome or 
other serious mental health needs. They also live in the most 
impoverished conditions in the United States. As a group, residents in 
IC also have one of the lowest education levels in the United States. 
As a result, these victims and witnesses need help to understand the 
judicial process and to be available for court proceedings.
    Many families in IC reside away from population centers and do not 
have reliable means of transportation to travel the lengthy distances 
to the offices and courtrooms of government attorneys, magistrates and 
judges in which they must appear as participants in the judicial 
process. Currently, the agents provide the transportation. The VWSs 
will be able to provide this service, allowing the agent to spend more 
time on investigations.
    Other duties of a VWS in IC include, but are not limited to, social 
service referrals, providing transportation to medical facilities, and 
emotional support follow-up. In most cases, the VWS assists the link 
between the FBI and the United States Attorney's Office.
    A VWS can also enhance the FBI's ability to communicate and develop 
rapport with the Native American community. With a trained VWS, the FBI 
has the ability to bridge the gap between the social, legal and 
investigative issues relevant to Native Americans. With 31 VWSs 
assigned to IC RAs, a Native American victim will have more information 
about the investigation and the overall legal process.
    Safe Trails Task Force.--STTFs are key to federal efforts to ensure 
that violent crimes in IC are approached in a shared and cooperative 
effort, in spite of complex jurisdictional issues inherent in IC. When 
tribal or BIA officers work together with FBI agents in STTFs, all 
parties benefit tremendously. The FBI agents receive credibility and 
legitimacy on the reservation, because they are in an STTF with Native 
American officers. The FBI agents are more effective and safer in IC 
when they work with tribal/BIA officers on STTFs because they can 
benefit from the Native American officer's knowledge of the local 
community and culture. The tribal and BIA officers benefit because they 
learn FBI investigative techniques and procedures. Because tribal, BIA, 
and FBI investigators all grow professionally from the STTFs and STTFs 
maximize the use of limited resources, the STTFs serve to enhance law 
enforcement services in IC.
    However, in some areas of IC, an obstacle to the full-time 
participation of tribal law enforcement officers on STTFs is the lack 
of tribal financial resources to pay overtime to its investigators. For 
some tribal law enforcement agencies, diverting limited financial 
resources to pay overtime to a full-time STTF participant decreases the 
resources available to the agency to provide other necessary policing 
services to the tribal community it serves. In order for the FBI and 
tribal law enforcement agencies to take advantage of pooling limited 
personnel resources, funding to pay overtime for tribal criminal 
investigators to participate full-time on the STTFs is critical.
    Question. A third component of the FBI program in Indian Country is 
support of forensic examinations. The request of $1.4 million would add 
three additional field offices, including one in Albuquerque. What have 
these offices contributed to improving law enforcement in Indian 
Country?
    Answer. The $1,405,000 request would allow the FBI to contract with 
accredited state and local laboratories to conduct forensic 
examinations for Indian Country (IC) cases from the FBI's Minneapolis, 
Salt Lake City and Albuquerque field offices. The FBI already has a 
contract with the Arizona Department of Public Safety Laboratory to 
conduct forensic examinations for IC cases from the FBI's Phoenix field 
office, which is the FBI's second largest IC field office.
    The Minneapolis, Salt Lake City and Albuquerque field offices are, 
respectively, the FBI's first, third and fourth largest IC field 
offices. Together, they accounted for 61 percent of the FBI's IC cases 
opened between fiscal year 1994 and fiscal year 1999. Out of a total of 
8,620 FBI IC cases opened between fiscal year 1994 and fiscal year 
1999, Minneapolis opened 3,032 cases (35 percent); Salt Lake City 
opened 1,285 cases (15 percent) and Albuquerque opened 952 cases (11 
percent). If the Phoenix field office is included, these 4 field 
offices opened 77 percent of the FBI's IC cases during this time 
period. Because these 4 field offices do the majority of the FBI's 
investigations in IC, they are in the greatest need of contracts for 
forensic services in order to comply with Speedy Trial Act requirements 
and provide adequate service for IC.
    With respect to improving law enforcement in Indian Country, the 
Minneapolis, Salt Lake City and Albuquerque field offices operate Safe 
Trails Task Forces (STTFs). These STTFs have been successful in 
maximizing the use of limited FBI, tribal, Bureau of Indian Affairs 
(BIA) and local personnel and resources to target violent felonies in 
IC.
    Additionally, the Minneapolis, Salt Lake City and Albuquerque field 
offices sponsor training for tribal, BIA and local officers working in 
IC. These classes include Law Enforcement Safety and Survival, Crime 
Scene Processing, Crimes Against Children, Basic Death Investigations, 
and Advanced Death Investigations.
    All three field offices have increased personnel resources 
dedicated to IC investigations. Between 1997 and 1999, the FBI's 
Minneapolis field office added 12 agents while the Salt Lake City and 
Albuquerque field offices each added 9 agents to IC work.
    The Salt Lake City Division hired two victim witness specialist 
with funding from the Department of Justice's Office for Victims of 
Crime. These specialists provide victim witness assistance on Indian 
reservations in southern Utah and south-central Montana.
    Question. Finally, would the Department please provide the 
Subcommittee with a summary of the funding proposed to be allocated 
under the Indian Law Enforcement Initiative in fiscal year 2001?
    Answer. Homicide and violent crime rates on Indian lands are 
rising, even as crime rates in the rest of the country fall. The fiscal 
year 2001 budget proposes an additional $82 million to fund public 
safety programs on Indian land. The money is to be used to increase the 
number of fully trained and equipped police officers in Indian country; 
improve the quality of the criminal justice system, including courts 
and detention facilities; enhance substance abuse programs; and combat 
tribal youth crime. Budget highlights include:

Office of Justice Programs
    $10,000,000 for OJP's Indian Tribal Courts Program, bringing total 
funding to $15 million. This increase will fund many new grants to 
plan, maintain, and enhance tribal courts.
    $10,000,000 for the tribal portion of OJP's Zero Tolerance Drug 
Supervision Program. This initiative will provide discretionary grants 
to tribes for comprehensive drug testing and treatment programs and to 
implement graduated sanctions for individuals within the criminal 
justice system.
    $8,000,000 for an Indian Alcohol and Substance Abuse Diversion 
Program. Of this amount, $6.5 million will be used for grants to 
support tribal detention or probation-based projects to divert 
offenders who abuse alcohol and drugs to detoxification and halfway 
houses. Currently, many tribal criminal justice systems have minimal 
referral services available for court-mandated activities. The 
remaining funding will be used for training, technical assistance, 
research, evaluation, and data collection efforts.
    $8,000,000 to provide 57 Indian tribes with resources to develop or 
enhance programs to address tribal youth with mental health, 
behavioral, or alcohol and substance abuse problems. Additional funds 
will pay for a variety of training, technical assistance, research, 
evaluation, and data collection efforts.
    $6,000,000 for Tribal Criminal and Civil Legal Assistance. Of this 
total, $4.5 million will be used to provide Indian tribes, tribal 
consortia, and private/non-profit legal service organizations serving a 
reservation-based constituency with the resources to develop or enhance 
their capacity to provide criminal and civil legal assistance. Another 
$1 million will be used to provide discretionary grants to the 31 
existing Tribal Colleges to create, develop and enhance a two-year 
curriculum on paralegal studies, law advocate studies, indigenous 
justice systems or other areas directly related to criminal and civil 
legal assistance. The remaining funding will be used for training, 
technical assistance, research, evaluation, and data collection 
efforts.
    $5,000,000 to fund sexual assault nurse examiner (SANE) units in 
Indian Country, which will gather the evidence necessary for 
prosecuting sexual offenders. This funding will be used for a pilot 
project that would establish SANE units at 10 tribal sites.
    $2,000,000 to conduct a national census of tribal criminal justice 
agencies and related statistical activities. These efforts will offer a 
systematic understanding of how criminal matters are adjudicated and 
disposed of on Native American lands.
    $12,500,000 for Title V Incentive Grants for Local Delinquency 
Prevention (an increase of $7.5 million) and the Police Corps Program 
(an additional $5 million). These funds will support tribal juvenile 
justice systems and will provide additional training for tribal police 
officers.

Community Oriented Policing Services
    $5,000,000 for funding, training, and equipping additional Tribal 
uniformed officers (for a total of $45 million).
    $5,000,000 for grants to tribal authorities to improve their 
general forensic capabilities. This is part of the COPS request for 
crime fighting through technology.

United States Attorneys
    $4,699,000 and 60 positions (33 attorneys) to support innovative, 
community-based strategies aimed at reducing overall violent crime, 
violent gangs, and juvenile crime on Indian reservations.

Federal Bureau of Investigation
    $2,600,000 to hire and equip 31 Victim Witness Specialists (VWS) 
who would be assigned to resident agencies on or near Indian Country. 
The specialists will identify and assist all victims and witnesses of 
federal crimes in which the FBI is the primary investigative agency.
    $1,405,000 for contracts with 3 accredited, full-service state 
crime laboratories to conduct forensic exams on Indian Country evidence 
gathered in the Minneapolis, Albuquerque and Salt Lake City field 
offices, which have accounted for 61 percent of Indian Country cases in 
the past 5 years.
    634,000 for overtime for tribal, state and local full time non-
federal law enforcement officers on 10 to 12 Safe Trails Task Forces 
(STTFs). In many areas, a significant obstacle to participating on 
STTFs is the limited budgetary resources of tribal agencies to 
compensate officers for overtime.

General Administration
    $932,000 and 8 positions within the Office of the Associate 
Attorney General (OASG) to institutionalize the Office of Tribal 
Justice (OTJ) as an integral, ongoing component of the Department. The 
Justice Department has significant responsibilities towards Indian 
Country, supporting the development of strong tribal law enforcement, 
tribal courts, and institutions of self-government.
Criminal Division
    $70,000 and 1 position to assist the Criminal Division in 
continuing its role in developing the Presidential Initiative to 
Improve Law Enforcement in Indian Country and to ensure that the 
Justice Department will have an effective voice in law enforcement and 
policy matters in Indian Country.

                  COUNTERTERRORISM TECHNOLOGY R&D--FBI

    Question. Director Freeh, in your testimony on page 12 you 
highlight the $10.5 million Congress appropriated in the fiscal year 
1998 Commerce, Justice, State, and the Judiciary Appropriations bill to 
initiate several counterterrorism research and development programs, 
including a partnership with the Southwest Surety Institute. The fiscal 
year 2001 budget includes a requested increase of $5 million to 
continue and expand these projects.
    Director Freeh, can you provide the Subcommittee with a status 
report on what the FBI has accomplished through its counterterrorism 
R&D program which the Congress funded at $10.5 million in fiscal year 
1998?
    Answer. The 1998 Justice Appropriations Act provided the FBI with 
$10.5 million from the Attorney General's Counterterrorism (CT) Fund 
for counterterrorism research and development (R&D). The funding was 
applied to the following programs:
  --$2 million was designated for a cooperative agreement with the 
        Southwest Surety Institute (SSI) for the development and 
        delivery of training courses to degree students and for 
        counterterrorism-related operational and support services at 
        consortium institutions. Under this agreement, 12 task-orders 
        were agreed to between the FBI and SSI. SSI either has 
        completed or is scheduled to complete all of these projects by 
        September 2000.
  --$5 million was allocated for explosives detection/forensic science. 
        The FBI initiated 17 CT R&D projects with the Department of 
        Energy (DOE) and 11 CT projects with industry and academia in a 
        variety of explosives detection and forensic science areas. 
        Please see the attached chart, Status of FBI Laboratory 
        Counterterrorism Research and Development Projects, for a 
        summary of the counterterrorism projects that were funded with 
        1998 CT Fund resources.
  --$2.5 million was used for the development of data exploitation 
        tools. The FBI utilized $1.3 million to develop the Automated 
        Computer Examination System (ACES). ACES provides a 
        standardized computer evidence tool to scan thousands of files 
        for identification of known format and executable program 
        files. As of March 1999, ACES development was completed and FBI 
        examiners began training with the system. The remaining $1.2 
        million was utilized to develop systems and techniques for 
        conducting Title III and Title 50 interceptions on computer 
        networks.
  --$1 million was designated for developing training programs to 
        provide investigators in the FBI and other federal, state, and 
        local law enforcement personnel, with the training and 
        expertise needed to detect and prevent computer intrusions. 
        Funding is being utilized to secure the assistance of industry 
        and academic experts to design and help deliver these programs, 
        and for expenses associated with the training sessions.
    Question. What initiatives currently underway does the FBI plan to 
continue if Congress approves the $5 million requested to continue and 
expand these projects?
    Answer. The FBI would like to begin Phase II efforts for the 
following R&D projects that were initially funded in 1998: Explosives 
Damage to Metal; Handheld Explosives Detector; Standoff Explosives 
Detection by Microwaves; 3-D Imaging and Ranging; Serial Number 
Restoration; Trace Botanical Analysis; Statistical Treatment of Class 
Evidence; Institutional Knowledge Preservation; Fluorescent Superglue; 
Mitochondrial DNA Sequencing; and Facial Reconstruction. Please see the 
attached chart for additional information on these projects.

                   STATUS OF FBI LABORATORY COUNTERTERRORISM RESEARCH AND DEVELOPMENT PROJECTS
                                             [As of April 25, 2000]
----------------------------------------------------------------------------------------------------------------
                                                                                       Deliverable
            Project                          Description of Deliverables                   Due         Status
----------------------------------------------------------------------------------------------------------------
MANPADS Expert Forensic Sys-    Integrated Resource Database and Investigator's Guide-       4/99   Delivered.
 tem.                              lines.
Handheld Ion Mobility           Handheld Ion Mobility Explosives Detector............        4/99   Delivered.
 Spectrometer.
Explosives Damage to Metals...  Metallographic Examination Procedures for Explosives         9/99   Delivered.
                                 De-  bris.
Standoff Explosives Detection   Proof of Principle Microwave-Based Explosives                1/00   Delivered.
 by Microwaves.                  Detector.
3-D Imaging and Ranging.......  Handheld Crime Scene 3-D Measurement and Imaging             1/01   On-Target.
                                 System.
Serial Number Restoration.....  Metallographic Non-Destructive S/N Recovery Methods..        9/99   Delivered.
Elemental Profiling of Metals   Laser Ablation ICP/MS Metal Fragment Analysis                9/00   On-Target.
 as Evidence.                    Procedures.
Statistical Treatment of Class  Enhanced ``Match'' Criteria Statistical Procedures...        6/00   On-Target.
 Evidence.
Enhanced Trace Evidence         Fiber Dye Identification Methods by Capillary Electro-       6/00   On-Target.
 Discrimination.                   phoresis.
Small Robotic Vehicle           Small Haz-Mat Crime Scene Robotic Vehicle............        9/99   Delivered.
 Evaluation.
Solid Phase Micro Extraction..  Solid Phase Micro Extraction Field Test Kit and              4/99   Delivered.
                                 Procedures.
Trace Botanical Identification  Grass Stain ID using Hypervariable Chloroplast DNA...        9/00   On-Target.
Degradation of Drugs in         Identify Post-Mortem Drug/Formaldehyde Reactions.....        9/00   On-Target.
 Embalmed Tissue.
Automation of MtDNA...........  Laboratory Robotics for Automated MtDNA Analysis.....        3/00   Delivered.
Crime Scene Reconstruction....  3-D Video Crime Scene Documentation Software.........        6/00   On-Target.
Active Thermography for S/N     Thermal Imaging Equipment for Serial Number                  5/00   On-Target.
 Restoration.                    Restoration.
Veterinary Science Resources..  Compilation of National Veterinary Resources.........        9/99   Delivered.
Institutional Knowledge         Subject Matter Expert-Tacit Knowledge Preservation...        6/00   On-Target.
 Preservation.
Vulnerability Attacks Research  Study of Vulnerability Attacks.......................        3/00   Delivered.
Rapid DNA Profile               Raman Spectral Database of Hazardous Materials.......        6/00   On-Target.
 Identification.
Sem X-Ray Spectral Database...  SEM X-Ray Spectral/Digital Image Database Software...       12/99   Delivered.
Raman Spectral Database.......  Raman Spectral Database of Hazardous Materials.......       12/99   Delivered.
Development of Distance         Crime Scene Management Web-Based Training............        2/00   Delivered.
 Learning Modules.
Latent Fingerprints in Blood..  Chemical and Spectral Enhancement of Bloody Latents..       12/99   Delivered.
Flourescent Cyanoacrylates....  Polymerization Studies and Colored Superglue.........        9/99   Delivered.
Database of 5,000 MtDNA         Database of 5,000 MtDNA Samples......................        9/00   On-Target.
 Sequence.
Facial Reconstruction.........  Computerized Facial Reconstruction Software..........        6/00   On-Target.
First Responder Web-based       Contaminated Individuals/Evidence Handling...........        1/00   Delivered.
 Training.
----------------------------------------------------------------------------------------------------------------

    Question. What are the new areas of R&D that will be addressed with 
the $5 million in appropriations?
    Answer. If the $5 million is appropriated in fiscal year 2001, the 
FBI would initiate new projects in the following areas:
    Polymer Sensors for Explosives.--A private industry R&D initiative 
has discovered that the ability of polymers to fluoresce is inhibited 
in the presence of an explosive molecule. To date, this effect occurs 
on polymers when in the presence of as few as one explosive molecule 
among a trillion other molecules (i.e., one part-per trillion 
sensitivity). This R&D effort would pursue forensic and law enforcement 
uses of the technology.
    Explosives Yield Computer Modeling from Observed Physical Damage.--
During the development of explosives to be manufactured, current 
engineering computer models predict explosive damage to materials 
surrounding their detonation based upon a known explosive charge. When 
investigating the terrorist or criminal use of explosives, computer 
models that can predict the explosive charge based upon the damage to 
materials surrounding the detonation are needed. This effort may 
address this need and be suitable for inclusion in existing Technical 
Support Working Group (TSWG) efforts.
    Soil Profiling by Molecular Technology.--The forensic 
identification of soil may be enhanced through the identification and 
characterization of the molecular deoxyribonucleic acid (DNA) present 
from plant, insect, or animal life even if the soil has been exposed to 
biological or chemical warfare agents. This project would further 
examine this theory.
    Field Instrument Evaluation.--The Department of Energy has 
developed portable analytical instrument technology for use in the 
analysis of hazardous materials at crime scenes. This project would 
further identify, adapt and modify such instrument needs for the law 
enforcement community. Examples of items to be evaluated include the 
ability to conduct hand held molecular DNA analysis and portable gas 
chromatography.
    Robotic Vehicle Enhancements.--Phase I of this effort delivered a 
small ``Rattler'' robotic vehicle. Phase II of this project would be a 
related, but new effort to enhance the sensor, mobility and 
manipulative capabilities of small robotic vehicle(s). This project 
would focus on vehicles developed by the Sandia National Laboratory for 
the survey, sensing and collection of physical evidence from hazardous 
crime scenes.
    Digital Image Evidence Authentication.--The FBI's Questioned 
Documents Unit (QDU) currently incurs a $500 per day cost to develop 
forensic images on 70 mm film. The QDU would prefer to replace its film 
images with digital images, but the proper authentication of digital 
images or recovered digital data requires precise protocols and 
rigorous storage requirements in order to authenticate they have not 
been tampered with. This effort would explore digital watermarking and 
steganography as means to authenticate digital photographs.
    Spectral Characterization of Toners and Ink.--This project would 
develop a valid procedure for the spectral comparisons of colored 
toners and inks used to produce forgeries of secure documents.
    Taggant Development.--The tagging, tracing and marking of documents 
and other valuable items is often a challenge in certain special 
operations. This project would examine two private industry R&D 
initiatives, which have developed new chemicals to deal with this 
problem. The first initiative uses compounds know as upconverting 
phosphors to mark inks, toners, papers, chemicals, and even explosives 
for later identification. These compounds require simple, but specific 
detection methods. The second initiative proposes to develop a series 
of photoreactive dye-polymers, which can be incorporated into paper or 
the toner of ink cartridges and can change spectroscopic properties if 
exposed to the bright light of laser scanner or photocopy machines.
    Automated Forgery Detection.--This effort would provide for 
testing, evaluation, analysis, and a report on technologies available 
for automated forgery detection of ransom and bank robbery notes.
    Computer-Aided Hair Microscopy.--The microscopic comparisons of 
hair samples require considerable experience and is time consuming. As 
an analysis aid, this project would explore digital video capture and 
microscopic video image comparison methods in order to reduce the 
number of non-matched hair specimens.
    Robotic Manipulator Arms.--This effort would develop robotic 
tactile manipulator arms and 3-D visions systems. The FBI accepted 
delivery of prototype robotic platforms designed by the U.S. Military 
in 1998 and a small robot from Sandia National Laboratory in 1999 for 
testing hazardous crime scene materials. Though the robots offer 
maneuverability with precise control, light-weight tactile manipulator 
arms (like those developed for tele-surgery) are needed for this task. 
The development of 3-D vision systems would enable the robot operator 
to work at a safe distance from the crime scene without experiencing 
vision deficits.
    Daubert/Frye Database.--This project would develop an automated 
means of collecting, storing, and evaluating data related to 
traditional class evidence (hairs, fibers, toolmarks, etc.) for court 
cases. The forensic association (matching) of traditional class 
evidence is increasingly being challenged due to recent judicial 
rulings.
    National Automotive Image Database.--This project would examine the 
potential to connect a search engine to an auto image warehouse to 
assist law enforcement in enhancing witness descriptions when 
developing automobile identifications. The Wieck Corporation operates 
an image warehouse in support of the automotive industry and provides 
vehicle images to trade publications and the media.
    DNA Chip Design Evaluation.--The Massachusetts Institute of 
Technology proposes to evaluate the design criteria necessary for the 
adaption of commercial micro-DNA technology for forensic applications 
in decreasing the time required for sequencing mitochondrial DNA 
(mtDNA) and analyzing molecular DNA samples.
    3-D Facial Modeling from 2-D Photos.--The recognition of 
individuals in 2-D photos, surveillance, or video tapes may be enhanced 
through the use of 3-D facial reconstruction from the 2-D image. This 
Phase I effort would explore and demonstrate a number of techniques for 
this 3-D image.
    Automation of DNA Processing.--This project would enhance, improve 
and extend an unattended, automated, robotic method for the analysis of 
mtDNA and molecular DNA. Automation of DNA analysis would assist in the 
rapid, high priority efforts to identify victims of terrorist events.
    Question. Do you anticipate utilizing the expertise of the 
Southwest Surety Institute in the second round of funding for these R&D 
Activities?
    Answer. The cooperative agreement entered into between the FBI and 
SSI is a task-order contract that is valid for a 5-year period, 1998-
2003. The FBI continues to work with SSI to identify additional task-
orders suited to the expertise of the consortium and, subject to the 
availability of funding, will draw upon the resources and capabilities 
of SSI.
    The selection of initial R&D projects in 1998 was based upon 
responses to a broad agency announcement issued by the FBI Laboratory. 
None of these initial projects were tasked to the SSI. Many of the 
projects proposed for funding under the $5 million request would 
continue work started by national laboratories and other entities. New 
projects proposed were selected from among those submitted in response 
to the 1998 broad agency announcement and will be based upon specific 
proposals from national laboratories and other entities.

             FBI DEVELOPMENT OF DOMESTIC TERRORISM DIVISION

    Background: The development of terrorism as a major threat and the 
need to meet it with increased funding and personnel has provided a 
solid budgetary base for the Bureau that promises to continue 
developing. While it is reasonable to consider such incidents as 
Oklahoma City and the 1996 Atlanta Olympic games as domestic terrorism, 
the Bureau has used this rationale to take over the investigations of 
scores of crimes that are just that--crimes--with no hint of a greater 
plot for domestic violence. Meanwhile, the Bureau's failure with 
respect to the investigation of Chinese spying on the nation's nuclear 
labs or its insistence--despite significant evidence to the contrary--
that TWA Flight 800 was a terrorist incident rather than a mechanical 
failure, gives pause to the idea that we should continue to endorse the 
Bureau's expansion of the Division, or even its reorganization into 
``spy-catching and domestic terrorism'' functions. As Dan Thomasson 
wrote (11/17/99-W. Times): ``The concern in law enforcement . . . is 
that a large number of agents now will have nothing more to do than to 
seek out potential terrorism and deal with it no matter under whose bed 
they believe they have found it.'' The FBI must provide parameters to 
define the problem and appropriate actions; otherwise, permitting the 
Bureau to justify anything it does under the guise of preventing it is 
too sweeping a concession of power.
    Question. In November, the FBI announced that it would separate the 
functions of counterintelligence and anti-terrorism, placing each under 
an assistant director who would first report to the Bureau's deputy 
director and then to you--the Director. Missing from the announcement 
was a useful definition of what constitutes domestic terrorism. This 
permits the Bureau to now enter into any case, no matter how small, and 
in practical terms means that hundreds of agents can now enter into any 
number of crime scenes that once belonged to a variety of agencies. 
Worse, this could create circumstances in which the Bureau's agents, in 
the name of counter-domestic terrorism, poke into the activities of any 
organization deemed subversive, no matter how innocuous it really was.
    What constitutes the Bureau's definition of domestic terrorism? Has 
the Bureau established clear guidelines about the decision was made to 
into a case it has deemed one of domestic terrorism?
    Answer. The FBI defines terrorism as ``. . . the unlawful use of 
force or violence against persons or property to intimidate or coerce a 
government, the civilian population, or any segment thereof, in 
furtherance of political or social objectives.'' The FBI further 
categorizes terrorism as either domestic or international, depending on 
the origin, base, and objectives of the terrorist organization. In this 
context, domestic terrorism is the unlawful use, or threatened use, of 
force or violence by a group or individual based and operating entirely 
within the United States or Puerto Rico without foreign direction and 
whose acts are directed at elements of the U.S. Government or its 
population, in the furtherance of political or social goals.
    Effective March 1, 1973, jurisdictional guidelines were adopted by 
the Attorney General and published in the United States Attorney's 
Bulletin on April 13, 1973 governing investigations of violations of 
the federal explosives control statute found in Title 18, Sections 841-
848. These guidelines clarified jurisdiction for the FBI, the Bureau of 
Alcohol, Tobacco and Firearms, and the U.S. Postal Inspection Service. 
The guidelines state that the FBI will exercise primary jurisdiction 
over all Section 844 violations perpetrated by terrorist/revolutionary 
groups or individuals unless otherwise directed by the Department of 
Justice.
    In connection with the execution of investigative activities, the 
FBI refers to these existing guidelines to govern decisions to initiate 
investigations of domestic terrorists and to manage crisis incidents 
involving terrorist attacks. These guidelines provide guidance for all 
investigations by the FBI of crimes and crime-related activities. This 
means that all white collar, drug, violent crime, organized crime and 
domestic security/terrorism investigations must conform to these 
guidelines, while investigations involving foreign counterintelligence 
and international terrorism matters are subject to separate guidelines. 
Specifically, the Attorney General's Guidelines on General Crimes, 
Racketeering Enterprise and Domestic Security/Terrorism Investigations 
serve as a means to ensure that FBI investigations are performed with 
care to protect individual rights and confined to matters of legitimate 
law enforcement interest.

                        FIRST RESPONDER TRAINING

    Background: Director Freeh, I continue to believe that our federal 
law enforcement agencies must push to train as many first responders as 
we can. These are our local law enforcement, fire, and emergency 
medical personnel who are likely to be first on the scene of a 
terrorist attack.
    As the lead agency for counter-terrorism efforts by the Federal 
Government, you are critical to the coordination of our federal efforts 
in this regard. I am most familiar with the Nunn-Lugar-Domenici program 
which is training state and local responders in 120 major cities, and 
the National Domestic Preparedness Consortium headquartered at Fort 
McClellan, Alabama, which is working with training partners to expand 
this effort to other cities and towns.
    Question. Could you provide the Subcommittee with your assessment 
of federal efforts to prepare state and local law enforcement and 
emergency personnel to respond to potential terrorist attacks?
    Answer. Significant accomplishments have been made with respect to 
preparing state and local law enforcement and emergency personnel to 
respond to potential terrorist attacks. The FBI, in conjunction with 
other federal agencies such as the Department of Defense, Federal 
Emergency Management Agency, the Justice Department's Office of Justice 
Programs, and others, will continue to provide state and local 
emergency personnel with the resources necessary to fully prepare and 
respond to terrorist attacks.
    The Hazardous Devices School (HDS), managed by the FBI's Bomb Data 
Center, is the only formal domestic training school for state and local 
law enforcement to learn safe and effective bomb disposal operations. 
The purpose of the HDS is to prepare civilian public safety bomb 
technicians to locate, identify, render safe, and dispose of improvised 
hazardous devices, including those containing explosives, incendiary 
materials and materials classified as weapons of mass destruction 
(WMD). In 1998, 838 state and local bomb technicians were trained, 
along with 1,467 in 1999. The HDS anticipates training over 1,450 state 
and local bomb technicians in 2000.
    In addition, the Interagency Board for Equipment Standardization 
and Interoperability, which is co-chaired by the FBI and Department of 
Defense, and staffed and supported by federal, state and local 
emergency responders, has created, and annually updates, a standardized 
equipment list to assist responders in determining what type of 
equipment is needed to adequately prepare for and respond to WMD 
incidents.
    Question. How many local law enforcement and fire and medical 
personnel have been trained?
    Answer. Since 1997, the Office of State and Local Domestic 
Preparedness Support (OSLDPS), Office of Justice Programs (OJP), which 
is the lead federal agency for providing training to civilian emergency 
responders, has trained approximately 45,000 students under its 
Metropolitan Fire and Emergency Medical Services basic awareness 
training program. Additionally, since 1998, OSLDPS has trained nearly 
5,000 emergency responders at the National Domestic Preparedness 
Consortium institutions. Of this total, approximately 2,125 have been 
trained at the Center for Domestic Preparedness CDP, 1,720 at Texas 
A&M, 520 at New Mexico Tech, 275 at Louisiana State University, and 270 
at the Nevada Test Site. Further, OSLDPS is working with other training 
providers, including but not limited to, Pine Bluff Arsenal for the 
provision of equipment sustaining training, the National Sheriffs' 
Association, and the National Guard Bureau.
    Training the nation's public safety bomb technicians at the 
Hazardous Devices School (HDS) is one of the FBI's priorities. In 1998, 
we trained 838 state and local bomb technicians, 1,467 in 1999, and we 
plan to train over 1,450 in 2000. The FBI has been able to increase the 
output of HDS, hire more instructors, provide additional courses 
(including the Weapons of Mass Destruction course), and provide 
equipment to bomb technicians upon their certification through funding 
provided by Congress since 1998. Our future training is dependent upon 
continued support of the HDS. The FBI's $2.9 million request for the 
HDS would provide permanent base funding to replace one-time 
enhancements from the Attorney General's Working Capital and 
Counterterrorism Funds.
    Question. An important part of readiness is not only the training 
but the equipping of these forces. What has the Federal Government 
achieved with regard to equipping these teams with the tools they need 
to respond to a variety of potential attacks?
    Answer. Through the OSLDPS' Equipment Grant Program, state and 
local jurisdictions have been provided with federal funds to equip 
emergency response teams with the equipment necessary to respond to a 
WMD incident. In addition, as touched upon above, the Interagency Board 
for Equipment Standardization and Interoperability has created and 
annually updates a standardized equipment list to assist responders in 
determining what type of equipment is needed to prepare adequately for 
and respond to WMD incidents. Such equipment will enable fire 
departments, law enforcement agencies, emergency medical services, and 
hazardous materials response units to enhance their response 
capabilities in state and local jurisdictions to incidents of domestic 
WMD terrorism. Numerous needs assessments have consistently highlighted 
these jurisdictions' need for specialized equipment in order to meet 
the requirements presented by WMD incidents. In fiscal year 1998, 
OSLDPS provided $12 million in grants to 41 local jurisdictions for the 
procurement of specialized equipment, including personal protective, 
chemical/biological detection, decontamination, and communications 
equipment. In fiscal year 1999, OSLDPS provided an additional $31 
million to 157 local jurisdictions, as well as $33.8 million to the 50 
states, for the procurement of equipment. A further $8 million will be 
provided to the 50 states for the development of Three-Year Statewide 
Strategic Domestic Preparedness Plans, which will guide the use of 
future funding.
    Last year, the FBI was provided a one time increase of $25 million 
through the Working Capital Fund to equip state and local bomb 
technicians. To date, $22,038,371 has been obligated to purchase SRS-5 
Search Suits [$5,927,200], X-Ray equipment [$9,289,852], multi-gas and 
lower limit detectors [$4,400,000], computers and printers 
[$1,200,000], and CABO-LE databases and upgrades [$1,221,319] for each 
certified bomb squad across the country.
    The suits are utilized to provide balanced protection for personnel 
performing improvised explosive device searches as well as chemical/
biological explosives hazards. The detectors are useful in identifying 
low vapor pressure and highly volatile, toxic organic compounds such as 
nerve agents and pesticide residues. Portable X-Rays provide real-time, 
in-place diagnostic examinations of suspected explosive devices. The 
computers and databases will allow all accredited bomb squads access to 
Law Enforcement On-Line to discuss specific problems, receive law 
enforcement updates, and access to the FBI's Bomb Data Center 
publications and statistics on-line. The databases serve as a CD-ROM 
format reference tool for chemical and biological warfare and terrorist 
threats.
    Question. What is the Department doing to fully utilize existing 
facilities and expertise in First Responder Training for Weapons of 
Mass Destruction?
    Answer. The FBI continues to use the Hazardous Devices School, 
which is located on Redstone Arsenal, Huntsville, AL, to train state 
and local bomb technicians. The facilities were originally used to 
store supplies for the Army, however, when the FBI took over bomb-
related training for civilians in 1971, the Army allowed the FBI to use 
those facilities for classroom training. The FBI uses the facilities 
while reimbursing the Army for overhead and maintenance costs.
    In addition, the Office of Justice Programs is utilizing existing 
training institutions through the National Domestic Preparedness 
Consortium (NDPC) to provide a range of WMD training courses to state 
and local emergency responders. NDPC members include Louisiana State 
university, New Mexico Institute of Mining and Technology, Texas A&M 
University, Nevada Test Site, and the Center for Domestic Preparedness. 
Training courses include direct delivery awareness level training for 
law enforcement and fire and Emergency Medical Services personnel, to 
advanced-level specialized courses taught at the Consortium sites 
involving the use of live chemical agents, explosive materials, and 
other unique training assets.
    Question. What more should the Federal Government be doing to 
prepare for potential terrorist incidents? Does the Administration's 
cybercrime initiative address this issue?
    Answer. The recent terrorist interdictions in Washington State, and 
Vermont, as well as events in Jordan, Pakistan, and other countries, 
underscore the continued vulnerability of the United States to 
terrorism, both at home and abroad. This continuing threat, as well as 
the events surrounding the millennial period, has indicated areas in 
which the FBI's counterterrorism capabilities must be improved. 
Specifically, these needs include:
  --Strengthening FBI international and domestic law enforcement 
        partnerships.
  --Closing the technology gap that exists between terrorists and law 
        enforcement agencies by improving the FBI's capacity to provide 
        technical support to counterterrorism investigations requiring 
        court-approved interception of communications. The FBI must 
        also expand and accelerate its conduct of counterterrorism-
        related research and development projects.
  --Improving FBI intelligence collection, analysis, and dissemination 
        capabilities by enhancing its translation capacities and the 
        FBI's ability to process applications for surveillance and 
        searches authorized by the Foreign Intelligence Surveillance 
        Act. Training for intelligence analysts is also needed to 
        enhance case-level tactical analysis for investigators. 
        Moreover, the FBI's corps of trained surveillance specialists 
        must be expanded so that more field offices have an organic 
        capacity to monitor the activities of terrorists.
  --Strengthening the FBI's operational capabilities by ensuring that 
        agents are adequately equipped to address Olympic safety, 
        security, and critical incident response requirements. Finally, 
        as the FBI has been targeted by terrorist threats, several 
        field office locations require additional guard services to 
        ensure the existence of a safe work environment for all FBI 
        employees.
    The FBI's 2001 cybercrime initiative as presented in the 
President's 2001 budget submission addresses this issue. In the 2001 
cybercrime initiative, the FBI requests 100 positions (83 field and 17 
FBIHQ) and $11,371,000 for the Computer Analysis Response Team. In 
addition, the FBI requests $7,000,000 for counter-encryption 
technology. These enhancements are designed to help the FBI deal with 
the current and future projected backlog of computer forensic 
examinations, and to counter the use of encryption by criminals and 
terrorists to conceal evidence of criminal communications and 
information. Since timely computer investigations provide significant 
information pertinent to critical national security investigations, and 
since the Attorney General's Five-Year Counterterrorism and Technology 
Crime Plan identified the development of decryption capability to 
facilitate the use of evidence in court as a top requirement, it is 
clear that the President's 2001 cybercrime initiative does take 
significant steps to improve our nation's capability to respond to and 
investigate terrorist incidents.

               RIO ARRIBA COUNTY BLACK TAR HEROIN PROBLEM

    Background: Judge Freeh, Mr. Marshall--I want to begin by thanking 
you for all that you and your agencies have done in the last year to 
help address the black tar heroin problem in northern New Mexico.
    Judge Freeh, you and I discussed this issue privately last year, 
and the record will reflect that your response to my request for help 
was immediate, comprehensive and extremely helpful. On behalf of the 
citizens of Rio Arriba Country, thank you.
    Mr Marshall, your predecessor, Tom Constantine, was equally 
responsive. I am sure that in your work as the Deputy Administrator, 
you were aware of the problem in new Mexico as well.
    Soon after the field hearing Senator Gregg held in Espanola, New 
Mexico on this issue last year, federal FBI, DEA and ATF agents, along 
with state law enforcement officials, rounded up more than 50 
individuals involved in the drug trade in northern New Mexico. 
Indictments were handed down, and there have been numerous guilty 
pleas.
    News reports out of Rio Arriba County indicate that the streets are 
quieter, the drug trade has been suppressed, and the community is on 
its way to healing itself after decades of drug abuse.
    Of course, we haven't solved the drug problem in northern New 
Mexico. I hope that you'll pledge to continue to work with me 
throughout the remainder of your tenures to ensure that Rio Arriba 
stays on the path toward reducing its drug problem.
    Question. I am interested in your recommendations about a second 
phase of help for the county, including any follow-up enforcement ideas 
to make sure that our efforts of the past year do not go to waste.
    Answer. The FBI and DEA remain committed to addressing the drug 
problem in Northern New Mexico through joint sophisticated and 
comprehensive investigations with state and local authorities. A 
continued commitment to combine resources of federal, state and local 
agencies is critical to achieving long-term success in addressing the 
larger organized crime and drug problem in Northern New Mexico, 
including Arriba County.
    Currently, the FBI, DEA and state and local law enforcement are 
involved in two projects. The first effort focuses on a metropolitan 
area serving as a trans-shipment point for heroin being smuggled by the 
Naryit Mexico trafficking organization. The second effort centers on 
another Northern New Mexico locale, like Rio Arriba, where both heroin 
and cocaine trafficking and consumption are an entrenched crime 
problem.
    Intelligence efforts will continue to monitor any resurgence of 
drug activity in Rio Arriba and all counties in New Mexico. Through the 
continued collection, analysis and dissemination of criminal 
intelligence, all law enforcement agencies will be able to better 
assess and monitor the drug trafficking patterns. The exploitation of 
criminal intelligence among all agencies will allow investigators the 
ability to devise and employ efforts to combat any detected upsurge of 
heroin trafficking.
    DEA is currently researching the feasibility of deploying the El 
Paso Field Division Mobile Enforcement Team (MET) into Rio Arriba 
County. The MET would put approximately 10 DEA agents, plus state and 
local officers in the area for a concentrated 60-day period. During 
that time, the MET would target, disrupt and/or dismantle a specific 
drug organization responsible for the distribution of heroin in Rio 
Arriba County. This response will send the message to traffickers and 
citizens that DEA will remain vigilant in Rio Arriba County.
    The El Paso Field Division also will send the Division Demand 
Reduction Coordinator and Training Officer into Rio Arriba County to 
determine how DEA can be most effective in reducing the demand for 
narcotics and helping local citizens cope with the continuing effects 
of drug abuse and addiction. DEA has scheduled a Basic Drug 
Investigation School for state and local officers. This school will be 
held in New Mexico during the third quarter of 2000, and approximately 
10 state and local officers from the Northern New Mexico Region have 
been invited to attend. In an effort to better serve the area of 
Northern New Mexico, DEA is exploring the feasibility of stationing two 
Special Agents in Santa Fe, New Mexico.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

                     FBI TRACKING OF JEWELRY THEFT

    Background: You received three letters from jewelers in Hawaii 
expressing concern about this growing trend. A letter was sent to the 
Director on February 3, to request information on the federal efforts 
to protect this industry. A response has not yet been received. This is 
an effort to bring this issue of concern to your constituents to the 
Director's attention.
    Question. This fall, a number of national publications published 
articles about the growing trend of increased robberies and violence 
committed against retail jewelers and traveling jewelry salespeople. 
According to reports, there are criminal gangs who threaten this 
industry. It is my understanding that the average loss in this type of 
crime is $355,000. Is your agency tracking these crimes?
    Answer. In 1992, the FBI developed the Jewelry and Gem (JAG) 
initiative to combat the increasingly violent victimization of jewelry 
retailers and traveling salespersons. As part of this initiative, the 
FBI's Major Theft/Transportation Crimes Unit (MT/TCU) established a 
computerized JAG database of jewelry thefts/robberies as reported to 
the FBI by its field offices, law enforcement agencies and the jewelry 
industry. Since jewelry theft gangs travel throughout the United States 
to locate and victimize retail stores and traveling salespersons, the 
database was developed to assist law enforcement in linking seemingly 
disparate crimes involving similar modus operandi and suspect 
descriptions. Through this database, located at FBI Headquarters, the 
FBI collects and analyzes reports of jewelry thefts nationwide and 
disseminates information to federal, state and local law enforcement 
agencies to assist in their investigations. The JAG database is also 
used to calculate yearly jewelry theft statistics produced by the FBI.
    In analyzing jewelry theft data from the past few years, the FBI 
has not observed a significant change in either the frequency or 
character of crimes committed against ``on-premises'' jewelry 
retailers. This is consistent with crime data compiled by jewelry 
industry security representatives which show no significant change in 
the number of jewelry retail robberies from 1998 to 1999, nor the 
percentages of robberies involving physical contact or injury. 
Moreover, according to industry statistics, there was a decrease in 
dollar losses associated with on-premises retail thefts/robberies from 
1997 to 1999 ($117.5 million to $57.6 million).
    In contrast, over the past few years, there have been substantial 
increases nationwide in both the frequency and levels of violence 
associated with thefts/robberies of traveling salespersons, 
particularly in metropolitan Los Angeles, Chicago and Miami. Jewelry 
industry statistics show a 35 percent increase in the number of ``off-
premises'' thefts/robberies of traveling salespersons nationwide from 
1998 to 1999 (240 reported cases to 323), with a dollar loss increase 
during this period from $32.6 million to $61.5 million. In 1999, the 
average loss sustained by traveling salesperson victims was $358,307. 
Significantly, FBI data show that, for all incidents involving 
traveling salespersons, there was a 30 percent increase in the level of 
violence from 1998 to 1999.
    Generally, the character of criminality against traveling 
salespersons has changed over the past few years from a distraction/
larceny modus operandi to a violent, confrontational style that often 
involves sophisticated surveillance, multiple armed subjects and 
physical assault. These crimes are believed by the FBI to be almost 
exclusively committed by organized South American Theft Groups, often 
composed of illegal aliens using false identification.

               FBI EFFORTS TO COMBAT THIS CRIMINALITY

    Question. Can you describe for me your efforts to combat this 
growing trend?
    Answer. In addition to creation of the JAG database, which the FBI 
recently demonstrated at the International Association of Chiefs of 
Police Conference in Charlotte, North Carolina, the FBI maintains 
regular and close contact with the Jewelers' Security Alliance (JSA) 
and other industry representatives. Together with the JSA, the FBI has 
periodically sponsored regional conferences and training specifically 
related to jewelry theft investigations, including strategy and 
coordination conferences of law enforcement agencies investigating 
particular jewelry theft groups. Further, the FBI conducts regular in-
service training for special agents and local investigators involved in 
major theft matters, with particular blocks of instruction on jewelry 
and fine art theft.
    Consistent with its Major Theft National Investigative Strategy, 
the FBI has established a multi-agency Safe Streets-style Task Force 
concentrating on jewelry theft in Los Angeles, the metropolitan area 
that has experienced the highest number of jewelry thefts/robberies and 
incidence of violent confrontations. Ad hoc task forces are developing 
in other FBI field offices to address this problem.

                   VICTIM WITNESS ASSISTANCE PROGRAM

    Background: The FBI's Victim Witness Assistance Program was 
established to ensure FBI conformity with the federal victims rights 
law. The addition of 31 trained victim and witness specialists (VWSs) 
will enable the FBI to increase the type and quality of services 
provided and give the FBI the ability to bridge the gap between the 
social, legal and investigative issues relevant to Native Americans who 
are not accustomed to participation in the federal judicial system.
    The Federal Government is primarily responsible for investigating 
major crimes in Indian Country. Last year the Bureau of Justice 
Statistics issued a disturbing report that the rate of violent 
victimizations among American Indians aged 12 or older was more than 
twice the rate for the entire nation.
    With 31 VWSs assigned to Indian Country, more Native American 
victims will have more information about the investigation and the 
overall legal process. Liaison within reservations communities would be 
strengthened, cases presented for prosecution would be much stronger 
and the entire judicial system would perform more effectively as a 
result of the involvement of trained VWSs.
    In addition, the 31 VWSs would allow for agent time that is 
currently being used to provide victim and witness assistance to be 
returned to investigative work. For instance, many families in Indian 
Country reside away from population centers and do not have reliable 
means of transportation to travel lengthy distances to participate in 
events that require victim or witness attendance. Currently, in most 
instances, it is the FBI agents who provide the transportation. The VWS 
is capable of providing these services, thus allowing the FBI agents to 
focus their attention on conducting other investigations.
    Question. You have requested funding for 31 victim witness 
specialists (VWSs) for the FBI's Victim Witness Assistance Program 
pursuant to the Indian Country Law Enforcement Initiative. Why is there 
a special need in Indian Country?
    Answer. Unlike urban centers, Indian Country (IC) presents a 
situation where high levels of poverty, a lack of public transportation 
and extreme rural isolation converge. The result is victims and 
witnesses of violent crime in IC rarely have reliable transportation 
and often live long distances from the offices and courtrooms of the 
government attorneys, magistrates and judges in which they must appear 
as participants in the judicial process. FBI special agents have 
traditionally provided transportation. It is not unusual for an agent 
working in the Minot, ND, Resident Agency (RA) to travel more than 700 
miles round trip to transport a victim of a crime on the Turtle 
Mountain Indian Reservation to Fargo, ND, to testify before the grand 
jury. A child sexually abused on the Ft. Peck Reservation in Montana 
must be transported 350 miles to Billings for a medical examination and 
evaluation necessitating making arrangements for an overnight stay, 
lodging and meals--logistics which seem insurmountable to a parent or 
care giver who does not often leave the reservation. As a result, it is 
the agents who have been providing the transportation and making the 
lodging arrangements.
    IC is a unique part of the United States. Cultural differences such 
as IC residents being unfamiliar with the operations of a bank and thus 
unable to cash a reimbursement check for witness expenses are not 
unusual. The VWS provide a bridge between victims or/and witnesses and 
the predominate cultures surrounding the reservations.
    The intent of the recent Presidential Initiative for the 
enhancement of law enforcement in IC was to increase the delivery of 
law enforcement services in IC. As more investigative matters are 
initiated with the addition of law enforcement resources, greater 
numbers of victims and witnesses also become part of the process. It is 
critical that the proper personnel, both investigative and victim 
witness, are in place to accomplish the goals of the Presidential 
Initiative. In addressing the need for additional investigative 
resources, a greater need for victim witness resources has naturally 
been created.
    The FBI currently has 4 VWSs assigned to Indian Country, two of 
whom are funded through DOJ's Office of Victims Crime. These VWSs have 
helped the FBI in its commitment to overcome IC mistrust of the Federal 
Government through the building of positive relationships. The VWS in 
the Billings, MT, Resident Agency, represents the FBI at Crow and 
Northern Cheyenne Child Protective Team meetings, and is an active 
member of the Crow Sex Offender Registration committee. Because of her 
work, the Native American community is beginning to view the FBI as 
having not only an investigative function but expressing a genuine 
concern for the victims.

             HIGH INTENSITY DRUG TRAFFICKING AREAS PROGRAM

    Background: Hawaii was designated a High Intensity Drug Trafficking 
Area (HIDTA) last June. Given the obvious problem of drug use in Hawaii 
that lead to this designation, this question is designed to bring the 
drug problem in Hawaii to the attention of your colleagues on the 
Subcommittee. Your wish list will include a request for funds to fight 
clandestine methamphetamine labs in Hawaii. Despite this HIDTA 
designation, a grant request from Hawaii for Byrne Discretionary grants 
to fight clandestine labs was rejected.
    Question. The Office of National Drug Control Policy has designated 
31 areas as HIDTAs where federal, state and local agencies are working 
together to reduce the harmful impact of drug trafficking. Can you 
share with the Subcommittee your thoughts on the effectiveness of this 
program and DEA's role in this effort?
    Answer. The mission of the HIDTA program is to reduce drug 
trafficking activities in the most critical drug trafficking areas of 
the country, thereby lessening the impact of these areas on other 
regions of the country. The HIDTA program strengthens America's drug 
control efforts by intensifying the impact of drug control agencies 
through the development of partnerships between federal, state and 
local drug control agencies in designated regions and by creating 
effective systems for them to synchronize their efforts.
    Since the original designation of 5 High Intensity Drug Trafficking 
Areas in 1990, the HIDTA program has expanded to 31 areas of the 
country, including 5 partnerships along the Southwest Border. The Drug 
Enforcement Administration (DEA) has traditionally played a critical 
role in the success of the HIDTA program and will continue to do so in 
the future. To date, DEA has over 280 Special Agent positions dedicated 
to the HIDTA program.
    The 31 established HIDTAs act as a significant force multiplier for 
drug law enforcement efforts across the United States. In recent 
months, DEA and the FBI have been working with ONDCP to develop 
policies and guidelines to standardize the mission, functions, 
management, and infrastructure of the individual HIDTA intelligence 
components.
    DEA does not currently provide intelligence analytical support for 
the HIDTA program. However, the agency has developed plans for the 
addition of DEA intelligence personnel to HIDTA Intelligence Centers by 
fiscal year 2002. The addition of these personnel will work to bring an 
interconnected national intelligence network to the HIDTA's as well as 
effective DEA intelligence programs to support HIDTA efforts. With an 
infusion of DEA intelligence analytical resources, guidance, and 
experience, the HIDTA intelligence program will become part of the 
nationwide effort to develop effective mechanisms for the collection 
and sharing of intelligence information, which can be applied in the 
enforcement arena.
    Question. Last June, Honolulu, Hawaii was designated a High 
Intensity Drug Trafficking Area. Has there been a significant reduction 
in drug related crime since this designation? What has been done since 
the HIDTA designation to combat this problem? What can you recommend be 
done to improve the effectiveness of this program?
    Answer. On June 15, 1999, the Hawaii HIDTA was formally approved 
and provided partial funding through the fiscal year 1999 
appropriation. According to ONDCP, first year expenses for HIDTAs are 
largely associated with programmatic administrative start-up costs, 
with little emphasis placed on operational results. This being the 
case, it is too early to comment upon the Hawaii HIDTA's effectiveness 
and/or any reduction in area drug related crime. Statistics from 
established HIDTAs throughout the United States have historically 
indicated a reduction in drug related crimes following implementation 
of HIDTA programs.
    ONDCP reports that with the resources thus far provided for the 
Hawaii HIDTA, a Hawaii HIDTA Director has been hired; Budget, 
Intelligence and Facilities Subcommittees have been established; 
liaison has been established with other HIDTAs on the West Coast by 
visiting several existing HIDTAs in order to gain insight on proper and 
successful management techniques; an updated drug threat assessment has 
been conducted enabling the identification of current drug trafficking 
trends and organizations; joint training on the latest drug 
interdiction techniques, technology, and legal issues is being 
conducted with all participating HIDTA law enforcement agencies; and 
acquisition of a Hawaii Airport Task Force site at or near the Honolulu 
International Airport, in conjunction with the Hawaii HIDTA, is in 
process.

      ENFORCEMENT OF THE ILLEGAL IMMIGRATION REFORM AND IMMIGRANT 
                           RESPONSIBILITY ACT

    Question. In last Sunday's Washington Post, there was an article 
about the enforcement of the Illegal Immigration Reform and Immigrant 
Responsibility Act. I would like to submit the article for the record. 
The article examines an unintended consequence of our immigration 
reform efforts whereby children adopted from other countries by 
American families are being deported to the countries of their births 
because of criminal convictions that occurred when the adopted children 
are adults. These individuals who are eligible for naturalization are 
being deported to countries where they have no relatives and often have 
no language skills.
    I am concerned by this article and would like to better understand 
the extent of this problem. How many children were admitted to the 
United States for the purpose of adoption last year? How many legal 
permanent residents were deported last year who had been admitted into 
the United States for the purpose of adoption?
    Answer. During fiscal years 1997 and 1998, 12,596 and 14,867 
orphans were adopted abroad respectively. The INS does not track the 
number of people deported for criminal convictions who were originally 
admitted to the United States as adopted orphans.
    Question. I would also like to know whether the INS tracks children 
admitted to this country for adoption and to what extent the INS 
encourages parents to naturalize their adopted children?
    Answer. The INS does not track the activities of children admitted 
to this country for adoption. The INS does publish information 
regarding the naturalization process in a publication called ``A Guide 
to Naturalization.'' The information is also available on the INS' web 
site. INS is also very active in holding special naturalization 
ceremonies for adopted children such as the ceremonies held by the 
Buffalo District Office near the Fourth of July each year.
    Question. I would also like to ask you about the proposed rule 
1991-99 which would authorize the collection of fees by private 
organizations for fees levied to fund the INS student-tracking system. 
I know that a request has been made to delay implementation of this 
regulation until the Congress can act to remove this requirement. If 
you are not disposed to delay the implementation, what support services 
do you intend to provide to the private groups charged with collecting 
government fees?
    Answer. The INS recognizes that proposed rule 1991-99 has raised 
serious concerns in the academic and exchange program communities. As 
you know, section 641(e) of the Illegal Immigration Reform and 
Immigrant Responsibility Act of 1996 provides that ``an approved 
institution of higher education and a designated exchange visitor 
program'' collect and remit the proposed fee to the Attorney General. 
The proposed rule follows the statutory language and recognizes these 
two groups of institutions as designated fee collectors. The INS 
believes that the most effective way to address the concerns raised by 
some Members and the regulated community is through a legislative 
amendment. In order to facilitate this effort, the INS and the 
Department of State are working jointly to finalize suggested 
amendments to the statutory language. The concerns of the Members, as 
well as those of the educational institutions, will be taken into 
consideration as INS drafts the amendment.
    The INS seeks to provide a rule that best serves all those affected 
in the most reasonable manner. Until the INS has achieved that goal, 
and anticipating congressional action on this issue, the INS will 
suspend the publication schedule for the final rule.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski

      EXTERNAL AUDIT OF ADMINISTRATIVE AND OPERATIONAL PERFORMANCE

    Question. Has the INS had an external audit of administrative and 
operational performance during your tenure? If so, please submit an 
executive summary of the findings (by date) stating what you learned 
and the actions you have taken. If not, why not and what have your 
internal analysis demonstrated?
    Answer. Both the Department of Justice's Office of Inspector 
General (OIG) and the General Accounting Office (GAO) have conducted 
reviews and audits of administrative and operational performance of 
INS. In total, they have issued over 100 final reports relating to the 
INS. The OIG's reports included 691 recommendations, of which 111 
remain open. The GAO reports contained 88 recommendations, of which 26 
are open. The materials related to these reports are very voluminous. 
Therefore, we have attached a list of the final reports and ongoing 
reviews. We have also included a discussion of the highlights of the 
reviews that are of high interest to the agency. Should there be 
particular interest on any of the reports, we would be pleased to 
supply further information on any of the materials.

                  Office of Inspector General Reviews
    Since January 1991, the OIG has issued 101 final reports relating 
to INS. These final reports contained over 694 recommendations of which 
INS has taken the necessary action to close 559. The OIG's coverage has 
been extensive, and has covered several administrative functions and 
many INS programs. The OIG currently has 10 ongoing audits or 
inspections within the Service.
    The INS Collection of Fees at Land Border Ports of Entry: The OIG 
initiated this audit because of two separate OIG investigations into 
the theft of fee monies at land Ports of Entry had identified 
significant discrepancies in the management controls over fee 
collections. The February 2000 audit confirmed that controls and 
procedures currently in place allow opportunities for loss or theft of 
fee monies without detection at each step in the fee collection 
process. Consequently, INS managers could not determine the total 
amount of fees that should have been collected based on the 
applications processed.
    Voluntary Departure: Ineffective Enforcement and Lack of Sufficient 
Controls Hamper the Process: The OIG conducted an assessment in July 
1999, on how INS district officers and the Executive Office for 
Immigration Review immigration judges implement voluntary departure. 
The OIG report found weaknesses in conducting criminal history checks, 
tracking alien departures, and overall enforcement of voluntary 
departure orders.
    Fingerprint and Biographical Check Services Provided by the Federal 
Bureau of Investigation (FBI) to the Immigration and Naturalization 
Service: The OIG reported in March 1999, that INS did not reconcile 
payments against its requests for fingerprint and name checks conducted 
by the FBI. This occurred because INS had no system to track and 
account for all of the fingerprint and biographical check requests 
submitted to, or the results received from, the FBI. As a result, 
during fiscal year 1996 and fiscal year 1997, INS paid approximately $7 
million for unclassifiable and duplicate fingerprint cards, processed 
incomplete or inaccurate fingerprint checks for thousands of INS 
applicants, and did not detect a potential FBI underbilling of 
approximately $800,000. For name checks, the audit identified 
approximately $220,000 that INS incurred unnecessarily for duplicate 
requests. However, the audits also identified over $230,000 for 
services rendered by the FBI but not charged to the INS. This latter 
amount is offset by about $563,000 of charges not supported adequately 
by the FBI.
    Follow-up Review INS Management of Automation Programs: The OIG 
reported in March 1998, that INS has not managed its automation program 
adequately. As a result, the OIG initiated a follow-up review. The July 
1999 report determined that INS still did not manage its automation 
programs adequately during fiscal years 1995 to 1997. Specifically, (1) 
estimated completion dates for some automation projects had been 
delayed without explanations for the delays, (2) costs continued to 
spiral upward with no justification for how the funds are spent, and 
(3) projects were nearing completion with no assurance they will meet 
performance and functional requirements.

                   OFFICE OF INSPECTOR GENERAL REPORTS
------------------------------------------------------------------------
                                                          No. of    No.
  Date             Report Title             Rept. No.      Recs    Open
------------------------------------------------------------------------
02/18/00 Border Patrol Efforts Along   I-2000-04......       2       1
          the Northern Border
02/10/00 The Immigration and           00-05..........      12      11
          Naturalization Service
          Collection of Fees at Land
          Border Ports of Entry
10/14/99 Year 200 Efforts at the       00-01..........       4       0
          Immigration and
          Naturalization Service
09/29/99 Inspection of Cruise Ship     I-99-13........       0       0
          Exemption
09/23/99 INS Annual Financial          99-27..........      25      18
          Statement Fiscal Year 1998
08/30/99 INS and Executive Office of   99-23..........       4       1
          Immigration Review
          Affirmative Action Program
08/08/99 Follow-up Review; INS         99-19..........      17      14
          Management of the
          Automation Programs
05/14/99 Non-Tax Delinquent Debt in    99-16..........       1       0
          the DOJ Performed at the
          Request of the PCIE
04/12/99 INS' Selection of Advanced    99-08..........       2       2
          Card Technology
03/31/99 Fingerprint and Biological    99-13..........       5       5
          Check Service Provided by
          the FBI and the INS
03/31/99 Inspection Memorandum         I-99-04........       0       0
          Report: Review Contract COW-
          6-C-0038 of the Vera
          Institute of Justice
03/31/99 The Potential Fraud and the   I-99-10........       3       0
          INS' Efforts to Reduce the
          Risks of the Visa Wavier
          Pilot Program
03/31/99 Voluntary Departure:          I-99-09........       5       5
          Ineffective Enforcement and
          Lack of Sufficient Controls
          Hamper the Process
03/31/99 INS' Timeliness in            99-10..........      11       9
          Inspecting Passengers
          Arriving at U.S. Airports
03/01/99 Sale and Leaseback of         99-07..........       2       1
          Detention Facilities
02/12/99 Accuracy of Adjudications     99-03..........       3       1
          and Naturalization Data in
          the Performance Analysis
          System of the INS
09/30/98 Naturalization Fingerprint    I-98-27........       0       0
          Process
09/22/98 Inspection of Border Patrol   I-98-20........      10       1
          Drug Interdiction
          Activities on the Southwest
          Border
09/14/98 Asset Forfeiture Program      98-24..........       0       0
          Management Letter Report
          Fiscal Year 1997
09/14/98 Asset Forfeiture Program      98-23..........       0       0
          Management Letter Report
          Fiscal Year 1996
09/14/98 Immigration and               98-22..........      29       6
          Naturalization Service
          Annual Financial Statement
          Fiscal Year 1997
09/01/98 The Department of Justice's   98-28..........       0       0
          Joint Automated Booking
          System Laboratory
08/11/98 Follow-up Inspection of the   I-98-18........       6       2
          Management of Delivery
          Bonds in the INS
07/31/98 The Immigration and           I-98-19........       1       1
          Naturalization Service's
          Customer Management
          Information System (CMIS)
07/07/98 Controls Over Certificates    I-98-14........       8       3
          of Naturalization (Phase
          II)
05/29/98 Property Management and       98-14..........       1       0
          Financial Statements
03/31/98 Inspection of Immigration     I-98-07........       3       1
          Officer Training
03/31/98 INS Refugees, Asylum and      98-11..........       5       0
          Parole System
03/25/98 INS Management of Automation  98-09..........      12       0
          Programs
03/24/98 Review of the INS' Automated  I-98-10........       8       1
          Biometric Identification
          System
02/19/98 Controls Over Certificates    I-98-02........       5       0
          of Naturalization (Phase I)
01/26/98 Asset Forfeiture Program      98-03..........       1       0
          Management Letter Report
          Fiscal Year 1995
12/12/97 Ammunition Storage at INS     I-98-05........       2       0
          Facilities
08/01/97 INS Annual Financial          97-22A.........      23       5
          Statement Fiscal Year 1996
05/09/97 Immigration User Fee          97-17..........       3       0
          Remittances
09/30/97 Violent Crime Reduction       97-15B.........       6       0
          Trust Fund Management
          Letter Report Fiscal Year
          1995
03/31/97 Violent Crime Reduction       97-15A.........      13       0
          Trust Fund Annual Financial
          Statement Fiscal Year 1995
03/01/97 INS's Workforce Analysis      97-10..........       7       5
          Model
09/04/97 Monitoring of Nonimmigrant    I-97-08........       4       4
          Overstays
01/28/97 Administratively              97-09..........       4       2
          Uncontrollable Overtime
          (AUO) in DOJ
01/07/97 Contracting for Detention     97-05..........       3       0
          Space
01/07/97 INS Replacement of Resident   97-06..........       6       0
          Alien Identify Cards
01/03/97 Fuel Purchases by BOP, FBI,   97-03..........       1       0
          and INS
01/02/97 Selected Financial            97-04..........       4       3
          Transactions for Operation
          Alliance INS Imprest Fund,
          El Paso, Texas
    9/96 Status of Immigration and     96-22..........       0       0
          Naturalization Service's
          Financial Management
          Corrective Action Plan as
          of June, 30, 1996
09/30/96 INS Document Fraud Records    I-96-09........       1       0
          Corrections
08/19/96 American Express Charge Card  I-96-10........       0       0
          Use in DOJ
08/16/96 INS Border Patrol Management  96-20..........       8       0
          of Aviation Operations
05/31/96 Inspection of Efforts to      I-96-08........       4       0
          Combat the Harboring and
          Employment of Illegal
          Aliens in Sweatshops
05/28/96 INS Forecasting for the Fee   96-13..........       7       0
          Accounts
03/29/96 Inspection of DOJ Drug Free   I-96-07........       4       0
          Work Place
03/29/96 Inspection of INS'            I-96-03........       5       2
          Deportation of Aliens After
          Final Orders Have Been
          Changed
    2/96 Status of Immigration and     96-04..........       0       0
          naturalization Service's
          Financial Management
          Corrective Action Plan as
          of September 30, 1995
10/17/95 Inspection of the Influx of   I-96-01........       0       0
          New Personnel
09/27/95 Inspection of the INS         I-95-09........       3       0
          Background Reinvestigation
          Program
09/26/95 INS Select Enforcement        95-30..........       7       1
          Activities
08/18/95 Administration of             I-94-01........       0       0
          Disciplinary Action in INS
09/15/95 Organized Crime Drug          95-31..........       0       0
          Enforcement Task Force
          Operations in DOJ
07/27/95 INS Operations Jobs Pilot     95-25..........       4       0
06/30/95 Inspection of the Systematic  I-92-20........      10       0
          Alien Verification for
          Entitlements Program (SAVE)
          in INS
03/30/95 Procurement Activities for    95-12..........       7       0
          the US Border Patrol Air
          Operations
03/30/95 Cash Collections at           95-10..........       7       0
          Districts and Ports in INS
03/30/95 INS Passenger Accelerated     95-08..........       9       0
          Service System Pilot
          Program
11/28/94 Audit of INS Breached Bond    95-3A..........       5       0
          Detention Fund Annual
          Financial Statement for
          Fiscal Year 1993
11/28/94 INS Fee Accounts and          95-2B..........      31       0
          Breached Bond Detention
          Fund Management Letter
          Report for Fiscal Year 1993
11/28/94 Audit of INS Fee Accounts     95-2A..........      13       0
          Annual Financial Statement
          Report for Fiscal Year 1993
10/25/94 Process for Imposing Visa     I-93-15........       4       0
          Fines in INS
08/12/94 Accounts Receivable of the    94-30..........       4       0
          INS Fee Accounts
06/23/94 INS Employment Authorization  I-94-07........      10       0
          Document Program
06/02/94 Fee Related Contract          94-24..........       0       0
          Activities in INS
05/27/94 Case Hearing Process in the   I-93-03........       0       0
          Executive Office of
          Immigration Review
04/26/94 INS Collection of Carrier     94-22..........       5       0
          Fees
04/15/94 Ammunition Purchases by DOJ   I-93-04........       2       0
          Bureaus
04/11/94 INS Enroute Inspections       94-19..........       8       1
03/31/94 INS' National Automated       I-93-08........      11       0
          Immigration Lookout System
          II
02/16/94 Alien Fingerprint             I-93-13........       2       0
          Requirements in the INS
10/27/93 INS Fee Accounts Annual       93-01A.........      16       0
          Financial Statement Report
          Fiscal Year 1991
09/30/93 Inspection of the Management  I-92-25........      21       0
          of Delivery Bonds in the
          INS
09/30/93 INS Preinspection of US       93-16..........       3       0
          Bound Travelers Program
09/30/93 Land Border Inspection Fee    I-93-02........       0       0
          Program
09/29/93 Injury and Disability         I-92-23........       0       0
          Compensation Program within
          the DOJ
09/23/93 Cash Collections at Service   93-20..........      16       0
          Centers in the INS
09/17/93 Fee Accounts Management       93-14B.........      11       0
          Letter Report Fiscal Year
          1992
09/01/93 Computer Risk Analysis and    93-17..........       5       0
          Contingency Planning
07/27/93 Immigration Services and      93-15..........       4       0
          Special Benefits for Which
          Fees Have not Been
          Established
06/29/93 INS Fee Accounts Annual       93-14A.........      14       0
          Financial Statement Fiscal
          Year 1992
04/22/93 Controls over Funds and       I-92-26........      12       0
          Valuables of Aliens
03/31/93 Database Controls at INS      93-11..........       6       0
03/31/93 Transit Without Visa Program  I-92-27........       6       0
          in INS
03/26/93 Procurement Activities        93-08..........      24       4
01/26/93 Inspection of Detention       I-92-18........       5       0
          Facilities in INS
12/21/92 Controls Over established     93-03..........       6       0
          User Fee Accounts in the
          INS
12/10/92 INS Fee Accounts Management   93-01B.........      11       0
          Letter Report Fiscal Year
          1991
07/31/92 Security of Controlled        I-91-13........       2       0
          Documents and Stamps at INS
01/31/92 Overtime in the INS           92-1...........       5       0
          Inspection Program
12/23/91 Employee Assistance Program   I-92-02........       2       1
          within DOJ
03/29/91 Value Engineering Program in  91-08..........       7       0
          the DOJ
09/23/91 Immigration and               91-15..........      27       0
          Naturalization Firearms
          Policy
09/17/91 Training for Inspectors in    I-91-15........       7       0
          INS
07/17/91 Security of Controlled        I-91-13........       2       0
          Documents and Stamps in INS
02/25/91 INS Phoenix District          I-91-07........      13       0
02/05/91 Fiscal Year 1989 INS          91-05..........      13       0
          Financial Closeout
01/07/91 INS Blaine Sector             I-91-06........      21       0
                                                       -----------------
               Total Recommendations   ...............     691     111
------------------------------------------------------------------------

                        OIG REVIEWS IN PROGRESS
OIG Draft Reports
    Audit of I-94 Computer Security. Announcement Date: 4/08/99. Draft 
Date: 5/11/00.
    Inspection--Review of Automated Inspection Systems (SENTRI). 
Announcement Date: 8/30/98. Draft Date: 4/14/00.
Ongoing OIG Reviews
    Audit of Property Management II. Announcement Date: 3/05/99.
    Audit of the Immigration and Naturalization Service Institutional 
Removal Program. Announcement Date: 3/25/99.
    Audit of Deferred Inspections at Airports. Announcement Date: 6/1/
99.
    Audit of the Immigration and Naturalization Service's Pre-clearance 
Operations. Announcement Date: 6/1/99.
    Audit of the Immigration and Naturalization Service's Airport 
Detention Facilities. Announcement Date: 6/1/99.
    Audit of Fiscal Year 1999 Annual Financial Statement of the DOJ. 
Announcement Date: 6/9/99.
    Inspection of the Immigration and Naturalization Service's 
Inspection Activities at Sea Ports-of-Entry. Announcement Date: 6/22/
99.
    Inspection of the Carrier Affairs Program. Announcement Date: 6/22/
99.
    Follow-up Inspection of Influx of New Personnel. Announcement Date: 
11/16/99.
    Inspection--INS' Document Fraud Records corrections (Follow-up). 
Announcement Date: 3/08/00.
    Inspection--INS' Anti-Smuggling Units. Announcement Date: 4/25/00.
    Inspection--Retrofitting of Border Patrol Vehicles (Bastrop, TX). 
Announcement Date: Supplemental to Follow-up Inspection of Influx of 
New Personnel.
Fiscal year 2000 OIG Workplan
    Audit of Cash Collections Within the DOJ.
    Audit of INS/Department of State Data-share Project.
    Fiscal Year 1999 Financial Statement Audits.
    Audit of INS Management of Privatization.
    Audit of INS Procurement Management.
    Inspection of INS' Complaint Process.
    Inspection of Transit Without Visa Program (Follow-up).
    Inspection of Treatment of Children Held in INS Custody.

                   GENERAL ACCOUNTING OFFICE REVIEWS

    In January 1991, the General Accounting Office issued its report, 
Immigration Management: Strong Leadership and Management Reforms Needed 
to Address Serious Problems. Since then, GAO has published 98 
subsequent reports related to immigration policy, operational matters, 
and management issues. Twenty-six of these reports contained 
recommendations for corrective actions, most of which are being or have 
been implemented.
    Since January 1, 1995, the GAO has increased its coverage of INS 
operations. Major GAO reports issued during the past year have focused 
on the Attorney General's strategy to deter illegal entry into the 
U.S., Southwest Border strategy enforcement activities, employee 
corruption on the Southwest Border, and INS initiatives to increase the 
number of new Border Patrol agents, as directed by the Illegal 
Immigration Reform and Immigration Responsibility Act of 1996.
    Fourteen GAO reviews of INS activities are in progress, including a 
review of the processing of aliens' applications and petitions for 
immigration benefits, information technology practices, the H1-B non-
immigrant visa program, alien smuggling, and the admissions of aliens 
who may be eligible to be granted asylum.
    INS Management: Follow-up on Selected Problems [GAO/GGD-97-132]. 
This report continues GAO's previous analyses on INS management issues. 
In 1991, GAO reported that INS was experiencing severe management 
problems in a variety of areas. The 1997 report concluded that, 
although INS had made progress in addressing some management problems, 
many management issues still required attention. Specifically, the GAO 
pointed out that INS employees needed clear guidance on implementing 
the immigration laws by issuing updated policies and procedures manuals 
and by establishing clear channels of communication within the INS 
organizational structure. The report also noted that INS had selected a 
new financial management system without focusing first on conducting an 
analysis of its business processes.
    Since the issuance of that report, INS has made considerable 
progress in addressing GAO's' concerns. An Office of Restructuring, 
established in the Office of the Commissioner in response to both 
Administration and Congressional initiatives, is addressing among other 
issues, these GAO concerns. With regard to the new financial system, 
the INS has continued to refine system implementation plans in a way 
that mitigates risks and implements the system in an incremental 
manner. In July 1999, the INS developed a revised implementation plan 
that extends the planning horizon out to fiscal year 2001.
    Southwest Border Strategy Enforcement Activities. The report states 
that INS is continuing to implement the Southwest border strategy by 
allocating additional personnel, increasing the time Border Patrol 
agents spend on border enforcement activities, and attempting to 
identify the appropriate quality and mix of technology and personnel 
needed to control the border. The report also states that data on the 
interim effects of the strategy continue to be limited. Finally, the 
GAO reiterates the recommendation in its original review of the 
Southwest border strategy \1\--that a comprehensive and systematic 
evaluation of the strategy would help provide information about its 
effectiveness. This follow-up report concludes that the studies funded 
by INS are too limited at this time to make a comprehensive and 
systematic evaluation of the strategy's effectiveness.
---------------------------------------------------------------------------
    \1\ Illegal Immigration: Southwest Border Strategy Results 
Inconclusive; More Evaluation Needed, GGD 98-21, December 1997.
---------------------------------------------------------------------------
    Illegal Aliens: Significant Obstacles to Reducing Unauthorized 
Alien Employment Exist. This report is the second of six planned 
reports on the Attorney General's strategy to deter illegal entry into 
the U.S. and focuses on employment issues related to unauthorized 
aliens. The report concludes that the INS faces significant obstacles 
to reducing unauthorized alien employment because the process can be 
circumvented or easily thwarted by fraud. The GAO made two 
recommendations to the INS relating to outreach programs for employers 
and clarifying the criteria for opening investigations suspected of 
criminal activities.
    Border Patrol Hiring: Despite Recent Initiatives, Fiscal Year 1999 
Hiring Goal Was Not Met. This report points out that INS initiatives to 
increase the number of new Border Patrol agents as legislatively 
mandated did not meet the overall goal of increasing agents on board by 
not less than 1,000 in each fiscal year from 1997 through 2001. The 
report notes that although the recruitment program yielded increases in 
fiscal years 1997 and 1998, the increase of only 369 agents in fiscal 
year 1999 caused the Service to experience a net hiring shortfall for 
the three-year period ending September 30, 1999. The report included 
one recommendation for the Department suggesting that the INS survey 
why applicants are withdrawing from the hiring process at key junctures 
late in that process.

                           GAO REPORTS ON INS
------------------------------------------------------------------------
                                                          No. of    No.
  Date           Report Title              Rept. No.       Recs    Open
------------------------------------------------------------------------
12/17/99 Border Patrol Hiring:      GGD-00-39.........       1       1
          Despite Recent
          Initiatives, Fiscal Year
          1999 Hiring Goal Was Not
          Met
10/19/99 Immigration Benefits:      GGD-00-25R........  ......  ......
          Second Report Required
          by the Haitian Refugee
          Immigration Fairness Act
          of 1998
07/30/99 Aviation: Issues           RCED-99-219.......       0       0
          Associated with the
          Theft of Stock Used to
          Create Airline Tickets
06/23/99 Welfare Reform: Public     HEHS-99-102.......       0       0
          Assistance Benefits
          Provided to Recently
          Naturalized Citizens
06/07/99 Crime Technology: Federal  GGD-99-101........       0       0
          Assistance to State and
          Local law Enforcement
05/10/99 Illegal Immigration:       GGD-99-44.........       0       0
          Status of Southwest
          Border Strategy
          Implementation
04/21/99 Immigration Benefits:      GGD-99-92R........       0       0
          Applications for
          Adjustment of Status
          Under the Haitian
          Refugee Immigration
          Fairness Act of 1998
04/14/99 Acquisition Reform:        NSIAD-99-93-R.....       0       0
          Review of Selected Best-
          Value Contracts
04/02/99 Illegal Aliens:            GGD-99-33.........       2       1
          Significant Obstacles to
          Reducing Unauthorized
          Alien Employment Exist
03/30/99 Drug Control: INS and      GGD-99-31.........       4       4
          Customs Can Do More to
          Prevent Drug-Related
          Employee Corruption
03/26/99 Visa Issuance: Issues      NSIAD-99-67.......       0       0
          Concerning the Religious
          Worker Visa Program
03/24/99 INS Budget: Overhiring     AIMD-99-129.......       0       0
          and Decline in Revenues
          Have Created Fiscal
          Stress
12/31/98 Child Support              AIMD-99-43R.......       0       0
          Enforcement: Issues in
          Establishing an Instant
          Check System for Child
          Support Orders
10/16/98 Criminal Aliens: INS'      GGD-99-3..........       0       0
          Efforts to Remove
          Imprisoned Aliens
          Continue to Need
          Improvement
09/30/98 Firearm Safety Locks:      GGD-98-201........       0       0
          Federal Agency
          Implementation of the
          Presidential Directive
09/10/98 H-2A Agricultural          HEHS-98-236R......       0       0
          Guestworker Program:
          Experiences of
          Individual Vidalia Onion
          Growers
09/28/98 INS User Fee Revisions:    GGD-98-197........       1       1
          INS Complied with
          Guidance but Could Make
          Improvement
09/03/98 Drug Control: Information  GGD-98-188........       0       0
          on High Intensity Drug
          Trafficking Areas
          Program
07/22/98 Immigration Statistics:    GGD-98-155........       0       0
          Guidance on Producing
          Information on the U.S.
          Resident Foreign-Born
06/30/98 Federal User Fees: Some    GGD-98-161........       0       0
          Agencies Do Not Comply
          with Review Requirements
06/09/98 Immigration Statistics:    GGD-98-164........       5       5
          Information Gaps,
          Quality Issues Limit
          Utility of Federal Data
          to Policymakers
06/09/98 Immigration Statistics:    GGD-98-119........       0       0
          Status of the
          Implementation of
          National Academy of
          Sciences'
          Recommendations
05/28/98 Assessment of              GGD-98-131R.......       0       0
          Contractor's Review of
          INS' Analysis of a
          Random Sample of
          Recently Naturalized
          Aliens
03/31/98 Financial Audit: 1997      ..................  ......  ......
          Consolidated Financial
          Statements of the United
          States Government
01/19/98 Budget Issues: Inventory   OGC-98-23.........       0       0
          of Accounts with
          Spending Authority and
          Permanent
          Appropriations, 1996
12/11/97 Illegal Immigration:       GGD-98-21.........       1       1
          Southwest Border
          Strategy Results
          Inconclusive; More
          Evaluation Needed
12/01/97 H-2A Agricultural Worker   HEHS-98-20........       1       1
          Certification Program
11/19/97 Illegal Aliens: Extent of  HEHS-98-30........       0       0
          Welfare Benefits
          Received on Behalf of
          U.S. Citizen Children
11/05/97 Customs and Border         GGD-98-20.........       0       0
          Patrol: Resources Needed
          for Reopening Rail Line
          from Mexico-U.S. Border
          into the United States
09/30/97 Customs Service:           GGD-97-173........       0       0
          Information on Southwest
          Border Drug Enforcement
          Operations
09/30/97 Departments of Justice     GGD-97-19R........       0       0
          and Treasury's Pre-
          Seizure Planning and
          Seized Business
          Management
09/30/97 Federal Labor Relations:   GGD-97-182R.......       0       0
          Survey of Official Time
          Used for Union
          Activities
07/22/97 INS Management: Follow-up  GGD-97-132........       7       4
          on Selected Problems
07/17/97 INS Employment             GGD-97-136R.......       0       0
          Verification Pilot
          Project
07/15/97 Criminal Aliens: INS'      T-GGD-97-154......       6       4
          Efforts to Identify and
          Remove Imprisoned Aliens
          Need to be Improved
06/30/97 Relocation Travel:         GGD-97-119........       0       0
          Numbers and Costs
          Reported by Federal
          Organizations for Fiscal
          Year 1991-Fiscal Year
          1995
06/27/97 Subscriptions and News     GGD-97-99.........       0       0
          Clippings: Expenditures
          and Related Information
          Reported by Federal
          Organizations
06/16/97 Internet and Electronic    GGD-97-86.........       0       0
          Dial-up Bulletin Boards:
          Information Reported by
          Federal Organizations
06/04/97 INS Criminal Record        GGD-97-118R.......       0       0
          Verification:
          Information on Process
          for Citizenship
          Applicants
05/22/97 Hong Kong's Reversion to   NSIAD-97-149......       0       0
          China: Effective
          Monitoring Critical to
          Assess U.S.
          Nonproliferation Risks
05/20/97 Alien Applications:        GGD-97-47.........       6       6
          Processing Differences
          Exist Among INS Field
          Units
05/01/97 Multilateral               NSIAD-97-42.......       0       0
          Organizations: U.S.
          Contributions to
          International
          Organizations for Fiscal
          Year 1993-Fiscal Year
          1995
04/11/97 U.S. Currency: Treasury's  NSIAD-97-04.......       0       0
          Plans to Study Genuine
          and Counterfeit U.S.
          Currency Abroad
03/10/97 Hispanic Employment Best   GGD-97-46R........       0       0
          Practices
01/06/97 Foreign Physicians:        HEHS-97-26........       0       0
          Exchange Visitor Program
          Becoming Major Route to
          Practicing in U.S.
          Underserved Areas
10/21/96 Vietnamese Asylum          NSIAD-97-12.......       0       0
          Seekers: Refugee
          Screening Procedures
          Under the Comprehensive
          Plan of Action
03/14/96 Border Patrol: Staffing    GGD-96-65.........       0       0
          and Enforcement
          Activities
02/26/96 Federal Fugitives: More    GGD-96-64.........       3       0
          Timely Entry on National
          wanted Person File is
          Needed
12/11/95 INS' Efforts to Develop    AIMD-96-26R.......       6       0
          and Implement an
          Information Technology
          Investment Strategy
11/29/95 INS Border Crossing Cards  GGD-96-25R........       0       0
09/26/95 Illegal Immigration: INS   PEMD-95-20........       1       1
          Overstay Estimation
          Methods Need Improvement
09/18/95 Cuba: US Response to the   NSIAD-95-211......       0       0
          1994 Cuban Migration
          Crisis
08/21/95 Law Enforcement Support    AIMD-95-147.......       7       0
          Center: Name Based
          Systems Limit Ability to
          Identify Arrested Aliens
07/25/95 Illegal Aliens: National   HEHS-95-133.......       0       0
          Net Cost Estimates Vary
          Widely
06/08/95 INS: Information on        GGD-95-162FS......       0       0
          Aliens Applying for
          Permanent Resident
          Status
05/02/95 Federal Fugitive           GGD-95-75.........       0       0
          Apprehension: Agencies
          Taking Action to Improve
          Coordination and
          Cooperation
03/10/95 Border Control: Revised    T-GGD-95-92.......       0       0
          Strategy is Showing Some
          Positive Results
03/07/95 Information Integrity:     T-AIMD-95-99......       0       0
          Using Technology to
          Determine Eligibility to
          Work and Receive
          Benefits
02/08/95 INS: Update of Management  T-GGD-95-82.......       0       0
          Problems and Program
          Issues
02/02/95 Welfare Reform:            HEHS-95-58........       0       0
          Implication of Proposals
          on Legal Immigrant's
          Bene-  fits
10/05/94 INS: Management Problems   T-GGD-95-11.......       0       0
          and Program Issues
11/28/94 Illegal Aliens: Assessing  HEHS-95-22........       0       0
          Estimates of Final
          Burden on California
12/29/94 Border Control: Revised    GGD-95-30.........       0       0
          Strategy is Showing Some
          Positive Results
12/22/94 INS Fingerprinting of      GGD-95-40.........       2       0
          Aliens: Efforts to
          Ensure Authenticity of
          Aliens' Fingerprints
11/27/94 Equal Employment           T-GGD-95-41.......       0       0
          Opportunity: INS' Equal
          Employment Opportunity
          Program
07/07/94 INS Drug Task Force        GGD-94-143........       0       0
          Activity: Agencies
          Supportive of INS
          Efforts
05/11/94 Nonimmigrant Visas: Use    NSAID-94-147......       0       0
          of Visas by Alien
          Artists, Entertainers,
          and Athletes
04/12/94 INS User Fees: INS         GGD-94-101........       2       1
          Working to Improve
          Management of User Fee
          Accounts
12/10/93 Border Management: Dual    T-GGD-94-34.......       0       0
          Management Structure at
          Entry Ports Should End
10/05/93 INS' EEO Progress in DC/   GGD-94-10R........       0       0
          LA
09/29/93 Benefits for Illegal       T-HRD-93-33.......       0       0
          Aliens: Some Program
          Costs Increasing, but
          Total Cost Unknown
08/05/93 Illegal Aliens: Despite    PEMD-93-25........       6       2
          Data Limitations,
          Current Methods Provide
          Better Population
          Estimates
07/15/93 Assessing EEO Progress at  GGD-93-54R........       0       0
          INS
06/30/93 Immigration Enforcement:   T-GGD-93-39.......       0       0
          Problems in Controlling
          the Flow of Illegal
          Aliens
06/30/93 Customs Service and INS:   GGD-93-111........       1       0
          Dual Management
          Structure for Border
          Inspections Should be
          Ended
06/16/93 INS Corrective Action      GGD-93-46R........       0       0
          Against Special Agents
05/17/93 Information on Black       GGD-93-44R........       0       0
          Employment at INS
04/26/93 Intercountry Adoption:     NSIAD-93-83.......       6       0
          Procedures are
          Reasonable, but
          Sometimes Inefficiently
          Administered
03/30/93 Immigration Issues:        T-GGD-93-18.......       0       0
          Making Needed Policy and
          Management Decisions on
          Immigration Issues
10/26/92 Nonimmigrant Visas:        NSIAD-93-6........       0       0
          Requirement Affecting
          Artists, Entertainers,
          and Athletes
08/05/92 Border Patrol: Southwest   T-GGD-92-66.......       0       0
          Border Enforcement
          Affected by Mission
          Expansion and Budget
06/25/92 Immigration Control:       GGD-92-85.........       1       0
          Immigration Policies
          Affect INS Detention
          Efforts
04/28/92 Immigration and the Labor  PEMD-92-17........       0       0
          Market: Nonimmigrant
          Alien Workers in the
          United States
04/09/92 Refugees: US Processing    T-NSIAD-92-25.....       0       0
          of Haitian Asylum
          Seekers
04/08/92 US Customs Service:        T-GGD-92-29.......       0       0
          Concerns About
          Coordination and
          Inspection Staffing on
          the Southwest Border
04/03/92 IRCA-Related               T-GGD-92-21.......       0       0
          Discrimination: Actions
          Have Been Taken to
          Address IRCA-Related
          Discrimination, But More
          is Needed
01/23/92 Immigration Control: The   GGD-92-20.........       0       0
          Central Address File
          Needs to be More
          Accurate
01/10/92 Immigrant in Indiana:      GGD-92-32FS.......       0       0
          Northwest Indiana
          Compared to Other Parts
          of the State
11/27/91 U.S.-Mexico Trade: Survey  NSIAD-92-56.......       0       0
          of U.S. Border
          Infrastructure Needs
09/23/91 Refugee-Related Issues in  T-NSIAD-91-35.....       0       0
          Turkey and the Soviet
          Union
07/11/91 Soviet Refugees:           NSIAD-91-245......       0       0
          Processing and
          Admittance to the United
          States has Improved
07/10/91 Efforts to Improve         T-NSIAD-91-42.....       0       0
          Reception of Foreign
          Visitors at U.S.
          Airports
06/24/91 Immigration Management:    T-GGD-91-48.......       0       0
          Actions Being Taken, But
          Problems Re-  main
05/16/91 U.S.-Mexico Trade:         NSIAD-91-228......       0       0
          Concerns About the
          Adequacy of the Border
04/24/91 Immigration Management:    T-GGD-91-23.......       0       0
          Strong Leadership and
          Management Reforms
          Needed to Address
          Serious Problems
03/28/91 Border Patrol: Southwest   GGD-91-72BR.......       0       0
          Border Enforcement
          Affected by Mission
          Expansion and Budget
03/21/91 Refugee Assistance: U.S.   NSIAD-91-137......       0       0
          Contributors for the
          1980s
03/08/91 International Trade:       NSIAD-91-6........       0       0
          Easing Foreign Visitors'
          Arrivals at U.S.
          Airports
01/24/91 Financial Management: INS  AFMD-91-20........       0       0
          Lacks Accountability and
          Controls Over its
          Resources
01/23/91 Immigration Management:    GGD-91-28.........      15       0
          Strong Leadership and
          Management Reforms
          Needed to Address
          Serious Problems
12/11/90 Drug Interdiction:         GGD-91-10.........       0       0
          Funding Continues to
          Increase but Program
          Effectiveness is Unknown
09/27/90 Information Management:    IMTEC-90-75.......       3       0
          Immigration and
          Naturalization Service
          Lacks Ready Access to
          Essential Data
08/06/90 Immigration Services: INS  GGD-90-98.........       0       0
          Resources and Services
          in the Miami Dis-  trict
07/18/90 Foreign Visitor            T-NSIAD-90-56.....       0       0
          Facilitation
06/27/90 IRCA Anti-Discrimination   T-GGD-90-51.......       0       0
          Amendments of 1990
06/27/90 Federal Appropriation for  T-HRD-90-43.......       0       0
          State Legalization
          Impact Assistance Grants
05/25/90 Criminal Aliens: Prison    GGD-90-79.........       0       0
          Deportation Hearings
          Include Opportunities to
          Contest Deportation
05/09/90 Soviet Refugees:           NSIAD-90-158......       1       0
          Processing and
          Admittance to the United
          States
04/11/90 Refugee Program: The       NSIAD-90-137......       0       0
          Orderly Departure from
          Vietnam
03/30/90 Immigration Reform:        T-GGD-90-31.......       0       0
          Employer Sanctions and
          the Question of
          Discrimination
03/29/90 Immigration Reform:        GGD-90-62.........       0       0
          Employer Sanctions and
          the Question of
          Discrimination
                                                       -----------------
               Total                ..................      88      26
------------------------------------------------------------------------


                        GAO REVIEWS IN PROGRESS

GAO Draft Reports
    U.S. Mexico Border: Better Planning, Coordination Needed to Handle 
Growing Commercial Traffic (711420). Announcement Date: 11/5/98. 
Ongoing GAO Reviews.
    Software Change Control Process (511685). Announcement Date: 2/4/00 
(entrance not yet held).
    Use of the MD 600N Helicopter as a Patrol Aircraft by the San Diego 
Border Patrol (1836421). Announcement Date: 2/1/00.
    Haitian Refugee and Immigration Fairness Act of 1998 (3rd review) 
(183637). Announcement Date: 1/21/00.
    INS' Processing of Aliens' Applications & Petitions for Immigration 
Benefits (183640). Announcement Date: 12/3/99.
    Enforcement of Legal Provisions Relating to Tax-Motivated 
Expatriation (268910). Announcement Date: 12/6/99.
    Federal Agencies' Training Programs (410506). Announcement Date: 
11/19/99.
    INS' Information Technology Practices (511176). Announcement Date: 
11/10/99.
    Efforts of Commonwealth of Northern Mariana Islands to Improve 
Immigration and Customs Procedures (182082). Announcement Date: 9/21/
99.
    H1-B Nonimmigrant Visa Program (205503). Announcement Date: 8/31/
99.
    INS Fee Deposit Practices(183636). Announcement Date: 8/30/99.
    Alien Smuggling (183630). Announcement Date: 5/13/99.
    Extent to which Federal Funds and Other Federal Resources Were Used 
to Support the Olympic Games in Los Angeles, Atlanta, and are planned 
for Salt Lake City (240348). Announcement Date: 3/16/99.
    Admissions of Aliens Who May Be Eligible to Be Granted Asylum 
(183628). Announcement Date: 2/25/99.
    Admissions of Aliens Who May Be Eligible to Be Granted Asylum 
(183627). Announcement Date: 2/25/99.

                        NATURALIZATION BACKLOGS

    Question. What is the current backlog of cases at the Vermont 
Service Center? Please specifically state the number with an analysis 
of the backlog by center.
    Answer. A table of data \2\ listing the total volume of cases 
currently pending at all of the service centers is attached. This table 
also breaks out by service center the volume of cases currently pending 
for the major benefit programs, including Applications to Adjust Status 
(Form I-485), Immigrant Petitions for Alien Workers (Form I-140), 
Petitions for Alien Relatives (Form I-130), Petitions for Non-immigrant 
Workers (Form I-129), and Applications for Naturalization (Form N-400).
---------------------------------------------------------------------------
    \2\ Performance Analysis System data through the end of March, the 
most recent data available.
---------------------------------------------------------------------------
    Question. What is the current backlog of cases at other service 
centers?
    Answer. Information on pending case volumes for all service centers 
is contained in the attached data table.
    Question. What are the average processing times at the Vermont 
Service Center?
    Answer. For applications and petitions that are processed to 
completion at the service centers, the filing date of the oldest 
pending application or petition is listed in the attached data table. 
Naturalization applications are filed with the service centers but 
processed to completion at the district offices after interviews. The 
projected processing time for naturalization applications is listed by 
district office in a separate table.
    Question. What has been the growth of petitions filed with the INS 
Service Centers in the past 7 years? Provide the number of petitions, 
by type, by center, in each year.
    Answer. The attached data table lists the volume of applications 
and petitions received at the service centers in total and for the 
major benefit programs for fiscal year 1993 through fiscal year 2000 to 
date.

                                                   SERVICE CENTER WIDE GROWTH IN RECEIPTS--MARCH 2000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               Pending as      Oldest                                               Fiscal Year
                                of March    Application  -----------------------------------------------------------------------------------------------
                                  2000      or Petition     2000TD       1999        1998        1997        1996        1995        1994        1993
--------------------------------------------------------------------------------------------------------------------------------------------------------
Servicewide:
    Total Applications.......   2,337,507  .............   1,901,775   3,795,701   3,457,507   3,299,213   2,845,555   2,298,766   2,278,110   2,224,300
    I-485 (All)..............     334,513  .............     164,304     201,917     127,134     120,370      38,592      29,498      24,215      60,016
    I-140....................      57,738  .............      42,842      78,786      67,319      68,580      60,621      50,947      46,156      49,898
    I-130....................     389,762  .............     217,895     370,535     568,936     612,961     544,047     507,465     564,793     636,576
    I-129....................     110,083  .............     369,737     494,210     375,082     301,731     260,266     263,062     292,318     252,235
    N-400....................     622,914  .............     199,315     724,989     594,568     629,773     442,608       1,308       2,849      10,635
California SC:
    Total Applications.......     828,576  .............     437,133   1,084,950     960,550     977,225     802,787     593,710     579,770     564,911
    I-485 (All)..............      30,957  Dec. 1998....      13,315      13,882      19,298      20,327           1          23         918      10,601
    I-140....................      26,416  Apr. 1999....      10,227      22,190      14,370      16,208      14,074      12,206      11,935      14,521
    I-130....................     178,846  Jan. 1998....      70,864     124,352     203,394     207,868     171,516     172,043     187,709     228,449
    I-129....................      36,159  Feb. 2000....      82,298     112,752      73,165      62,348      60,737      62,394      67,285      48,879
    N-400....................     193,135  .............      63,229     274,568     210,924     226,021     140,982           0           0           0
Nebraska SC:
    Total Applications.......     543,957  .............     517,243     847,494     762,908     645,098     556,772     546,537     536,794     491,885
    I-485 (All)..............     189,650  Aug. 1998....      83,053      87,271      21,761      13,790           0           4         879      11,572
    I-140....................      10,449  July 1999....       7,407      13,283      11,457      13,262      13,550      14,307      13,087      11,831
    I-130....................      57,186  Jan. 1999....      43,036      59,966      90,209      84,525      69,540      69,077      75,412      77,706
    I-129....................      16,488  Feb. 2000....      56,815      89,783      70,274      62,277      59,462      80,334      87,441      76,241
    N-400....................     107,752  .............      36,267     111,702      83,449      67,553      37,014       1,308       2,849      10,635
Texas SC:
    Total Applications.......     344,208  .............     428,918     821,665     704,461     684,109     569,044     485,439     431,519     485,716
    I-485 (All)..............      39,936  Dec. 1998....      37,979      59,370      42,647      45,213      25,109      17,502      10,612      13,941
    I-140....................         552  Jan. 2000....       8,616      13,194      13,683      12,540       7,576       2,732         127         471
    I-130....................      65,721  Dec. 1997....      43,752      80,594     116,739     139,612     108,936     125,269     119,461     141,202
    I-129....................      15,228  Feb. 2000....     100,204      94,820      66,940      43,652      25,833       7,541          67       1,516
    N-400....................     127,674  .............      40,342     135,533      92,365     124,978     107,875           0           0           0
Vermont SC:
    Total Applications.......     620,766  .............     518,481   1,041,592   1,029,588     992,781     916,952     673,080     730,027     681,788
    I-485 (All)..............      73,970  Sep. 1998....      29,957      41,394      43,428      41,040      13,482      11,969      11,806      23,902
    I-140....................      20,321  Sep. 1999....      16,592      30,119      27,809      26,570      25,421      21,702      21,007      23,075
    I-130....................      88,009  Jan. 1999....      60,243     105,623     158,594     180,956     194,055     141,076     182,211     189,219
    I-129....................      42,208  Feb. 2000....     130,420     196,855     164,703     133,454     114,234     112,793     137,525     125,599
    N-400....................     194,353  .............      59,477     203,186     207,830     211,221     156,737           0           0           0
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                      PROJECTED PROCESSING TIME--MARCH 2000
----------------------------------------------------------------------------------------------------------------
                                                                                    I-485s
                                                             ---------------------------------------------------
                                                               Total for    Average of
                          District                               Last 3       Last 3                  Projected
                                                                 Months       Months      Pending     Processing
                                                              Completions  Completions                   Time
----------------------------------------------------------------------------------------------------------------
Central Region:
    Chicago.................................................        5,114        1,705       47,317           28
    Dallas..................................................        3,151        1,050       26,931           26
    Denver..................................................        1,470          490        8,400           17
    El Paso.................................................        1,501          500       15,132           30
    Helena..................................................          232           77        1,369           18
    Harlingen...............................................        1,114          371       12,288           33
    Houston.................................................        1,580          527       43,857           83
    Kansas..................................................        1,904          635        3,547            6
    Omaha...................................................          348          116        4,797           41
    San Antonio.............................................        1,306          435       10,447           24
    St. Paul................................................          737          246        2,568           10
Eastern Region:
    Atlanta.................................................        3,240        1,080       21,851           20
    Baltimore...............................................        1,919          640        2,999            5
    Boston..................................................        6,512        2,171       14,458            7
    Buffalo.................................................          910          303        1,272            4
    Cleveland...............................................          877          292        4,344           15
    Detroit.................................................        1,681          560        5,520           10
    Miami...................................................       11,193        3,731       48,698           13
    Newark..................................................        5,083        1,694       26,028           15
    New Orleans.............................................        1,569          523        8,793           17
    New York City...........................................       12,110        4,037       86,280           21
    Philadelphia............................................        2,193          731        5,568            8
    Portland, ME............................................          321          107          264            2
    San Juan................................................          596          199        4,244           21
    Washington, DC..........................................        1,148          383       12,661           33
Western Region:
    Anchorage...............................................          169           56          229            4
    Hawaii..................................................          645          215        1,099            5
    Los Angeles.............................................       20,578        6,859      110,560           16
    Phoenix.................................................        2,966          989       30,502           31
    Portland, OR............................................        1,859          620        4,773            8
    Seattle.................................................        1,991          664        5,002            8
    San Francisco...........................................       10,687        3,562       70,736           20
    San Diego...............................................        2,913          971       26,884           28
                                                             ---------------------------------------------------
      Servicewide Total \1\.................................      137,916       45,972    1,003,931           22
----------------------------------------------------------------------------------------------------------------
\1\ Servicewide totals include Service Center data.


                                      PROJECTED PROCESSING TIME--MARCH 2000
----------------------------------------------------------------------------------------------------------------
                                                                 I-485 Comps for the Last 3 Mos          I-485
                REGION                       DISTRICT     -------------------------------------------- Pending 3/
                                                            1/1/2000   2/1/2000   3/1/2000     Sum       1/2000
----------------------------------------------------------------------------------------------------------------
COR...................................  CHI..............      1,509      1,800      1,805      5,114     47,317
COR...................................  DAL..............        960        976      1,215      3,151     26,931
COR...................................  DEN..............        412        437        621      1,470      8,400
COR...................................  ELP..............        298        520        683      1,501     15,132
COR...................................  HEL..............         58         72        102        232      1,369
COR...................................  HLG..............        404        413        297      1,114     12,288
COR...................................  HOU..............        554        461        565      1,580     43,857
COR...................................  KAN..............        576        544        784      1,904      3,547
COR...................................  OMA..............         87        136        125        348      4,797
COR...................................  SNA..............        592        351        363      1,306     10,447
COR...................................  SPM..............        287        233        217        737      2,568
EOR...................................  ATL..............        847      1,132      1,261      3,240     21,851
EOR...................................  BAL..............        523        664        732      1,919      2,999
EOR...................................  BOS..............      2,362      2,333      1,817      6,512     14,458
EOR...................................  BUF..............        257        343        310        910      1,272
EOR...................................  CLE..............        449        265        163        877      4,344
EOR...................................  DET..............        508        357        816      1,681      5,520
EOR...................................  MIA..............      2,283      3,946      4,964     11,193     48,698
EOR...................................  NEW..............      1,556      1,699      1,828      5,083     26,028
EOR...................................  NOL..............        229        761        579      1,569      8,793
EOR...................................  NYC..............      2,352      4,511      5,247     12,110     86,280
EOR...................................  PHI..............        818        690        685      2,193      5,568
EOR...................................  POM..............         50        169        102        321        264
EOR...................................  SAJ..............        114        165        317        596      4,244
EOR...................................  WAS..............        456        274        418      1,148     12,661
WOR...................................  ANC..............         89         62         18        169        229
WOR...................................  HHW..............        242        218        185        645      1,099
WOR...................................  LOS..............      6,228      7,459      6,891     20,578    110,560
WOR...................................  PHO..............        899        889      1,178      2,966     30,502
WOR...................................  POO..............        594        647        618      1,859      4,773
WOR...................................  SEA..............        725        640        626      1,991      5,002
WOR...................................  SFR..............      3,401      3,214      4,072     10,687     70,736
WOR...................................  SND..............        975        934      1,004      2,913     26,884
                                       -------------------------------------------------------------------------
      Total...........................  .................  .........  .........     40,608  .........    669,418
                                       =========================================================================
                                                              I-485 Comps at SC
                                       ---------------------------------------------------------------
COW...................................  ESC..............        407      1,029      1,817      3,253
COW...................................  NSC..............        683      1,713      3,135      5,531
COW...................................  SSC..............      5,652      6,039      6,896     18,587
COW...................................  WSC..............        185        299        444        928
                                       -------------------------------------------------------------------------
      Subtotal........................  .................  .........  .........     12,292  .........
                                       =========================================================================
      Total...........................  .................  .........  .........     52,900  .........
----------------------------------------------------------------------------------------------------------------


                           I-485 PENDING AT SC
------------------------------------------------------------------------
              RDATE                   REGION       DISTRICT      Expr1
------------------------------------------------------------------------
01-Mar-00........................  COW.........  ESC.........     73,970
01-Mar-00........................  COW.........  NSC.........    189,650
01-Mar-00........................  COW.........  SSC.........     39,936
01-Mar-00........................  COW.........  WSC.........     30,957
                                  --------------------------------------
      Subtotal...................  ............  ............    334,513
                                  ======================================
      Total......................  ............  ............  1,003,931
------------------------------------------------------------------------

N-400s Projected Processing Time--March 2000

                               [In months]

                                                               Projected
                                                              Processing
        District                                                    Time

Central Region:
    Chicago.......................................................    18
    Dallas........................................................    12
    Denver........................................................    11
    El Paso.......................................................    11
    Helena........................................................     8
    Harlingen.....................................................    11
    Houston.......................................................    21
    Kansas........................................................     9
    Omaha.........................................................    20
    San Antonio...................................................     8
    St. Paul......................................................    10
Eastern Region:
    Atlanta.......................................................    13
    Baltimore.....................................................     6
    Boston........................................................    10
    Buffalo.......................................................     7
    Cleveland.....................................................    18
    Detroit.......................................................    16
    Miami.........................................................    18
    Newark........................................................    12
    New Orleans...................................................    14
    New York City.................................................    11
    Philadelphia..................................................    12
    Portland, ME..................................................    20
    San Juan......................................................     9
    Washington, DC................................................    11
Western Region:
    Anchorage.....................................................    13
    Hawaii........................................................     8
    Los Angeles...................................................    10
    Phoenix.......................................................    14
    Portland, OR..................................................    11
    Seattle.......................................................     7
    San Francisco.................................................    15
    San Diego.....................................................    11
                                                                  ______
      Servicewide Total \1\.......................................    12

\1\ Servicewide totals include Service Center data.

Note: Projected Processing Time: Projected processing times are computed 
based on the current level of pending applications and the average level 
of completions during the last 3 months. This measure may not correlate 
to future waiting times actually experienced by applicants since 
projected processing times are computed based on past completion levels, 
and do not consider the effect of planned improvements on completions. 
Projected processing times may vary significantly from month to month 
and from the average waiting time.

                                      PROJECTED PROCESSING TIME--MARCH 2000
----------------------------------------------------------------------------------------------------------------
                                                                 N-400 Comps for the Last 3 mos          N-400
                REGION                       DISTRICT     -------------------------------------------- Pending 3/
                                                            1/1/2000   2/1/2000   3/1/2000     Sum       1/2000
----------------------------------------------------------------------------------------------------------------
COR...................................  CHI..............      3,645      4,291      5,690     13,626     79,600
COR...................................  DAL..............      3,760      1,720      1,734      7,214     28,460
COR...................................  DEN..............      1,026        883        850      2,759     10,006
COR...................................  ELP..............      1,494      1,168      1,511      4,173     14,892
COR...................................  HEL..............        205         99        124        428      1,176
COR...................................  HLG..............        773        783      1,994      3,550     13,148
COR...................................  HOU..............      2,642      2,580      2,297      7,519     53,330
COR...................................  KAN..............        451        914        602      1,967      5,924
COR...................................  OMA..............         50        233        348        631      4,156
COR...................................  SNA..............      1,434        742      1,759      3,935     10,937
COR...................................  SPM..............        299        686        765      1,750      5,584
EOR...................................  ATL..............      1,974      2,344      2,630      6,948     29,119
EOR...................................  BAL..............      1,270      1,488      1,980      4,738      9,297
EOR...................................  BOS..............      3,538      3,844      1,930      9,312     30,332
EOR...................................  BUF..............        459        663        775      1,897      4,199
EOR...................................  CLE..............        383        372        476      1,231      7,217
EOR...................................  DET..............        955      1,280        528      2,763     14,837
EOR...................................  MIA..............      6,927      3,446      5,071     15,444     93,042
EOR...................................  NEW..............      4,330      5,076      6,540     15,946     65,702
EOR...................................  NOL..............        645        740        688      2,073     10,014
EOR...................................  NYC..............     20,512     17,782     18,000     56,294    201,873
EOR...................................  PHI..............      1,006        990      1,601      3,597     14,152
EOR...................................  POM..............         27         42         27         96        644
EOR...................................  SAJ..............        126        440        233        799      2,376
EOR...................................  WAS..............      1,092      1,347      1,766      4,205     15,278
WOR...................................  ANC..............         60         99         72        231        986
WOR...................................  HHW..............        663        419        310      1,392      3,801
WOR...................................  LOS..............      5,991     24,706     33,144     63,841    204,717
WOR...................................  PHO..............      1,799      2,072      2,141      6,012     28,061
WOR...................................  POO..............        676        701        609      1,986      6,967
WOR...................................  SEA..............      1,501      1,505      1,535      4,541     11,172
WOR...................................  SFR..............      8,939      9,534     11,888     30,361    149,868
WOR...................................  SND..............      2,390      2,435      2,888      7,713     29,152
                                       -------------------------------------------------------------------------
      Total...........................  .................  .........  .........  .........  .........  1,160,019
                                       =========================================================================
                                                       N-400 Comps for Last 3 Mos at SC
                                       ----------------------------------------------------------------
COW...................................  ESC..............          0          0          0          0
COW...................................  NSC..............          1         40          1         42
COW...................................  SSC..............          0          0          0          0
COW...................................  WSC..............          0          0          0          0
                                       -------------------------------------------------------------------------
      Total...........................  .................  .........  .........  .........         42
----------------------------------------------------------------------------------------------------------------


                           N-400 PENDING AT SC
------------------------------------------------------------------------
                 REGION                         DISTRICT        3/1/2000
------------------------------------------------------------------------
COW.....................................  ESC................         41
COW.....................................  NSC................     10,173
COW.....................................  SSC................          0
COW.....................................  WSC................          0
                                         -------------------------------
      Total.............................  ...................     10,214
                                         ===============================
      Total.............................  ...................     10,214
------------------------------------------------------------------------


                 INFORMATION TECHNOLOGY INFRASTRUCTURE

    Question. Have you (INS) performed a systems analysis to identify 
what operating and administrative procedures and equipment each office 
needs?
    Answer. From an information technology (IT) standpoint, INS has 
conducted systems analyses of office automation requirements at each 
site worldwide. Between 1995 and 1998, INS accomplished the Technology 
Infrastructure Project (TIP). During this project we established state-
of-the-art office automation capabilities and network connectivity for 
INS employees at over 800 INS locations worldwide. IT infrastructure 
covers the gamut of IT capability from the personal computer on the 
employee's desk through the servers, routers, local area network (LAN), 
and the wide area network (WAN).
    The TIP process consisted of close coordination with the 
appropriate personnel at each site and completion of the following 
steps:
  --Initial Information Gathering.--A questionnaire was sent to each 
        site that collected information including the number of people 
        at the site, the number of floors the site covered, and the IT 
        equipment currently in use. The questionnaire also identified 
        user needs, network upgrades and any mission-critical system in 
        use.
  --Pre-Site Survey.--The information provided in the questionnaire was 
        then given to a pre-site survey team that visited the site and 
        did an onsite physical security assessment and a 
        telecommunications assessment. The team also identified any 
        physical building issues, and remodeling and furniture 
        requirements. From this information, a site-specific 
        Implementation Plan was developed that included LAN and cable 
        plant design, facilities requirements, application 
        requirements, office automation requirements, a training plan, 
        and a post-deployment support plan.
  --Acquisition & Logistics.--With the information provided in the 
        Implementation Plan, an Acquisition Plan was developed and 
        resulted in procurement of the equipment, communications, and 
        support services required for installation.
  --Site Preparation and Modification.--Furniture and space 
        modifications were accomplished to include installation of 
        additional electric outlets, completion of environmental 
        control modifications, completion of structural or building 
        modifications for cable plant, ordering and installation of 
        locally controlled communications lines, and resolution of 
        security issues.
  --Cable Plant Installation.--The cabling components were installed.
  --Hardware and Software Integration.--Servers and workstations were 
        configured to site-specific requirements to include user IDs, 
        work groups, print queues, communications capabilities, and 
        windows configuration. The equipment was tested to ensure 
        component interoperability, software interoperability, and LAN/
        remote access communication capability. In addition, a guide 
        was drafted for the local system administrator that provides 
        complete information on the equipment and system installed. 
        Additionally, all equipment was recorded in the INS Asset 
        Management Information System.
  --Hardware and Software Installation.--Upon arrival onsite, the 
        installation team reviewed and tested the cable plant 
        installation, received shipments from the Integration and Test 
        facility, completed setup of the training facility, installed 
        and tested computer room components, upgraded equipment, 
        installed and tested workstations and printers, migrated or 
        rehosted office automation applications and text and data 
        files, updated the Implementation Plan and the inventory, 
        completed acceptance testing, and determined disposition of 
        excess equipment. Post-installation documentation was also 
        completed during this phase.
    Upon completion of the TIP initiative, INS instituted a very 
similar process for deployment of mission and business-related 
applications used service-wide. We work closely with application 
developers to identify the effect that deployment of the application 
will have on the infrastructure. We test each application to assess the 
impact it will have on workstations and servers, and the impact of the 
additional traffic on the LAN and WAN. We also identify system upgrades 
that will be required to support the application. At that point, we 
begin coordination with the sites to which the application will be 
deployed and follow a process very closely aligned with the TIP process 
to accomplish deployment of the application.
    And finally, in order to keep INS in step with the extraordinarily 
dynamic information technology industry, we have instituted a 
``refresh'' initiative that, once again, mirrors the TIP process. This 
initiative focuses on upgrading the sites with the oldest 
infrastructure so they can be fully integrated with the newer 
technology being deployed not only by the program offices to support 
newer applications, but also as part of the Modular program that 
provides workstations and infrastructure support for the increasing INS 
employee population.

                          TECHNOLOGY INTEGRATE

    Question. What is the agency's plan to update and integrate the 
technology throughout the agency? What is the time line for this plan?
    Answer. INS recognizes the need to upgrade immediately and 
eventually replace CLAIMS 3, the main case management system in use at 
the four service centers for all but naturalization applications. The 
Immigration Services Division (ISD) is finalizing a 3-step process to 
upgrade and integrate its technology. This initiative also includes 
analysis of office equipment requirements.
    In the first phase of this process, ISD installed new file servers 
at the service centers to improve and standardize the operation of 
CLAIMS 3 at all four centers in August 1999. ISD is currently in the 
process of upgrading these servers to ensure peek performance and 
upgrading the CLAIMS 3 software.
    In the second phase of this process, ISD has conducted an 
infrastructure study of technology at the service centers. The purpose 
of this study was to identify standard system configurations for the 
four service centers, including cabling, servers, software, hardware, 
and printer needs. This study was completed in mid-April 2000, and 
identified approximately $11.5 million in replacement costs.
    In the final phase of this process, ISD has begun to plan 
development of a replacement case management system for deployment to 
all service centers and district offices. This project is expected to 
take 3 to 5 years to implement.
    In addition to the initiative to upgrade and replace CLAIMS 3, INS 
is near the end of its effort to deploy CLAIMS 4, the replacement case 
management system. CLAIMS 4 tracks only naturalization applications, 
and currently does not integrate this function with any other case 
management system. INS began converting all offices to CLAIMS 4 in 
fiscal year 1998. CLAIMS 4 has already been deployed to all four 
service centers, and will be deployed to all district offices but the 
Los Angeles District by the end of fiscal year 2000. ISD expects to 
complete deployment of CLAIMS 4 to the Los Angeles District Office by 
December 2000.

                          SUBCOMMITTEE RECESS

    Senator Gregg. Thank you, gentlemen. We appreciate your 
time.
    Mr. Freeh. Thank you, Mr. Chairman.
    Senator Gregg. We appreciate your efforts.
    [Whereupon, at 11:58 a.m., Tuesday, March 7, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              


                        TUESDAY, MARCH 21, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room S-146, the 
Capitol, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg and Stevens.

                   FEDERAL COMMUNICATIONS COMMISSION

STATEMENT OF WILLIAM E. KENNARD, CHAIRMAN
ACCOMPANIED BY ANDREW FISHEL, DIRECTOR, OFFICE OF THE MANAGING DIRECTOR

    Senator Gregg. I think we are all set to get started here, 
and we welcome the Chairman of the FCC. It is always a pleasure 
to have him before the committee.
    I am going to forego opening statements and, Chairman, you 
are welcome to say whatever you wish.
    Mr. Kennard. Thank you very much, Mr. Chairman. As always, 
it is a pleasure to appear before you and before this 
committee. I very much appreciate this opportunity to present 
for you today the FCC's fiscal year 2001 budget proposal.
    I wanted to outline a summary of our budget estimates and 
give you an update on the activities of the Commission, 
particularly with regard to the implementation of the 
Telecommunications Act of 1996. I will also present you with a 
clear picture of our accomplishments during the past year and 
what we anticipate our agenda to be for the next year.
    The last time I appeared before this committee, as you may 
recall, I presented you with a blueprint for the FCC for the 
21st century, and I also want to present you today with a 
report card, if you will, on my efforts to implement that 
blueprint.
    But before I discuss those items in detail, I wanted to 
take a moment and thank you and this subcommittee for the 
support that you have given the FCC during my tenure as 
Chairman. You, in particular, Mr. Chairman, have been very, 
very supportive of our mission. You have a great understanding 
of the role of the FCC in this changing telecommunications 
environment and, frankly, the importance of the sector to our 
economic growth. And so I wanted to emphasize how much we 
appreciate your support of our agency.
    We are very much involved in a transitional period in 
telecommunications today. We are transitioning the agency from 
an era of monopoly regulation to an era of competition. It has 
been a very exciting undertaking, and we are well on our way to 
making that transition.
    I would like to briefly outline our funding needs for the 
next fiscal year. We are not requesting funds for any 
additional staff at the FCC. Our staffing levels have remained 
constant throughout my tenure. We are requesting a 2001 budget 
of $237,188,000. That includes FTEs to be funded from both the 
direct appropriations and our auctions resources. That amount, 
$237 million, represents a $27 million increase over the fiscal 
year 2000 appropriation. That is a 13 percent increase. Most of 
that is attributable to uncontrollable cost increases, and when 
you break it down, most of the increase is attributable to 
rent, salary, and increases for our information technologies 
program.
    Most of those funds will come from regulatory fees. The 
total amount to be collected from regulatory fees would 
increase from approximately $185 million in fiscal year 2000 to 
$200 million in fiscal year 2001.
    As you are aware, the FCC also has requested authorization 
to use $5.8 million in excess regulatory fees from previous 
years to support our fiscal year 2000 information technology 
needs.
    Now I would like to give you a brief update on the FCC's 
activities and what is happening in the marketplace generally. 
We have worked very, very hard during my tenure to implement 
the Telecommunications Act of 1996. The Act has played an 
important role in helping us transition to a more competitive 
marketplace. Congress gave us some very important tools to make 
that transition.
    On the fourth anniversary of the Act, in February of this 
year, I presented a report on the telecommunications sector, 
which I would like you to have. Basically, it surveys what is 
happening in each of the areas of the telecom sector, and as 
you will see in that report, all of the economic indicators are 
way up. We are seeing tremendous growth in every sector of this 
business. We have seen just in the last year to 18 months the 
``.com'' explosion as Americans wake up to the power of the 
Internet in their lives. And it is very interesting when you 
look back at the period of time when the 1996 Act was being 
debated and written in 1995. Another seminal event happened 
that year, and that was the decision by the National Science 
Foundation to allow commercial use of the Internet. And those 
two events taken together--the passage of the Act and the 
privatization, if you will, of the Internet--really is 
responsible for this explosion in competition and technology.
    We are now entering what I believe to be a very, very 
exciting period as we move into the broad band Internet age, as 
people want more and more high-speed access to the Internet.
    When I woke up this morning, I was listening to WTOP radio, 
and I heard an advertisement for high-speed Internet access, 
and it was sort of interesting to me to hear terms that were so 
arcane and inside our little world here in the Beltway like DSL 
and T1 lines being advertised and entering the public lexicon. 
And I think that that really shows how much change we have seen 
just in the last 5 years or so.
    The next challenge, of course, is to get to a point when 
people are not talking about bandwidth per se; that is, that 
when Americans have so much bandwidth in their lives that it 
becomes just as commonplace as the dial tone or a 110-volt 
electric outlet. And that is really our goal, to keep this 
investment pouring into our networks, both wireless and 
wireline, so that Americans have as much bandwidth as they 
need, and at the same time, of course, making sure that those 
networks are built out ubiquitously so that people in rural 
areas and in inner-city areas get access. We also must ensure 
that there is a safety-net, universal service, so no one is 
left behind.
    I am pleased to report that this year many of the 
uncertainties surrounding the implementation of our Act has 
settled down. The courts have settled most of the 
jurisdictional challenges to our implementation of the Act, and 
we are really moving into a period now where a lot of 
investment is flowing. This year is going to be an exciting 
year for wireless. The Internet will move to a wireless 
platform this year as more and more people access the Internet 
over little networked wireless devices like Palm Pilots. That 
in my view will democratize the Internet and make it accessible 
to more and more people at higher speeds. So that is going to 
be exciting, but it also creates a great responsibility on our 
agency to manage the spectrum so that there is sufficient 
bandwidth available for those wireless devices.
    I also wanted to give you today a report card on the 
implementation of our strategic plan which I presented to you 1 
year ago. This basically gives a status report on our progress 
in meeting the challenges that we set out for ourselves in that 
strategic plan.

                           PREPARED STATEMENT

    So, again, Mr. Chairman, I am delighted to appear before 
you today and give you this status report, and, again, thank 
you for your continuing support of the agency and its mission.
    [The statement follows:]
                Prepared Statement of William E. Kennard
    Mr. Chairman, Ranking Member, and members of the CJSJ Subcommittee, 
I appreciate this opportunity to appear before you today to discuss the 
Federal Communications Commission's (FCC) fiscal year 2001 Budget. 
Today I will provide you with a summary of our fiscal year 2001 Budget 
Estimates, discuss the ongoing changes initiated by the 
Telecommunications Act of 1996, and present you with a clear picture of 
our accomplishments during the past year, our agenda for the current 
year, and outline plans for the future. At this time, I would also like 
to announce that I am releasing today my Report Card on Implementation 
of the Draft Strategic Plan--``A New FCC for the 21st Century.''

                       PARTNERSHIP FOR THE FUTURE

    Before I discuss our budget and goals with specificity, I would 
like to take a moment to thank this Subcommittee for its support during 
my tenure as Chairman of the FCC. Because of your efforts and the 
outstanding work of your staff, the FCC has been able to forge ahead 
with its efforts to upgrade its facilities and improve its ability to 
serve the public. I recognize that in the past you have supported 
funding for the FCC that exceeds even the Administration's requests. 
Your determination to provide sufficient funding demonstrates a special 
commitment to America's future. Let me emphasize that I share this 
commitment.
    We stand together on the front step of the third millennium--ready 
to venture up and swing open the door to our future. If the past is 
prologue, this next century will see accelerating and phenomenal 
change. Just as our ancestors living at the turn of the last century 
could never have imagined zooming along a vast array of super concrete 
byways and computer highways, we have not yet begun to imagine the 
achievements of our descendants.
    We all play a critical role in determining what new goals will 
benefit our children and our children's children. Communications 
technology is the engine of their century. It is the basis for fueling 
the economy, encouraging invention and bringing the world closer 
together. We all want our legacy to be one of investment in this 
future. We all want to be remembered for giving the next generation an 
edge in the future.
    The Federal Communications Commission is poised to assume its role 
as market facilitator in building the infrastructure of the future. Our 
primary mission is to promote competition in communications, protect 
consumers, and support access for every American to existing and 
advanced communications services.
    In five years, we expect the U.S. telecommunications markets to be 
characterized predominately by vigorous competition that will greatly 
reduce the need for direct regulation. The advent of Internet-based and 
other new technology driven communications services will continue to 
erode the traditional regulatory distinctions between different sectors 
of the telecommunications industry.
    Congress gave us the Telecommunications Act of 1996, and in doing 
so, cemented a partnership for establishing a new pro-competitive, 
deregulatory model for communications policy. Now it is time to 
reassess our core policy functions, structure and processes, and fund 
the changes that will shape our future. New competitors and 
technological innovation currently are transforming telecommunications 
markets. History has shown that markets that have been highly 
monopolistic often do not naturally become fully competitive. History 
also has shown that domestic markets that have been protected from 
foreign competition do not naturally become open to global competition.
    As I said, the past is prologue. Nevertheless, we can always alter 
the remainder of any story and create our own future. We must work 
together to promote competition, open markets, and increase 
technological innovation. We must continue to protect and empower 
consumers as they navigate the new world of telecommunications. 
Together we can achieve the twin goals of the 1996 Act: a fully 
competitive marketplace and access for every American to current and 
future advanced communications services.
    Pursuing these strategic objectives will require the identification 
of clear goals and the continued execution of my Draft Strategic Plan, 
``A New FCC for the 21st Century.'' As we accomplish our transition 
goals, we will set the stage for a competitive environment in which 
communications markets look and function like other competitive 
industries. We turn to you for your support again this year to help us 
continue to transform our agency, adapt to new and emerging 
technologies, and ensure that future generations will benefit equally 
from these changes.

       AN AFFORDABLE FUTURE: THE FISCAL YEAR 2001 BUDGET REQUEST

    The FCC as we know it today will be very different both in 
structure and mission as we evolve to meet the challenges of the 
future. Increased automation and efficiency will enable the FCC to 
streamline its licensing activities, accelerate the decision making 
process, and allow the public faster and easier access to information. 
The FCC will be a ``one-stop, digital shop'' where form filing and 
document-location are easy and instantaneous. The FCC will continue 
consolidation along functional lines so that its structure is more 
consistent with convergence.
    In order to follow through on this agenda, the FCC will require a 
fiscal year 2001 budget of $237,188,000 and a staff ceiling of 1,975 
full-time equivalent (FTEs). This includes FTEs to be funded from 
appropriations and auctions resources. These numbers reflect a total 
increase of $27,188,000 or approximately 13 percent over the fiscal 
year 2000 Appropriation. Uncontrollable cost increases to fund proposed 
government-wide pay raises, rent increases and other inflationary 
increases constitute 47 percent of the total requested increase in 
funds. Specifically, our request includes $6.8 million for mandatory 
salary and benefit increases, $5.1 million for increases Rent and 
Operating Fees, and $.9 million for Consumer Price Index adjustments in 
contract services.
    Programmatic increases to accomplish the Commission's comprehensive 
information technology strategic plan initiatives comprise the 
remaining portion of the requested funds for fiscal year 2001. This 
amounts to $14.4 million for information technology (IT) enhancements. 
Since the automation enhancements will directly benefit the industry 
served by the Commission, this increase should be paid for by an 
increase in regulatory fees. Approximately 80 percent of the requested 
IT funding increase will be used for maintenance and life cycle 
replacement of our existing systems. The remaining 20 percent or $3 
million will be used to promote competition through better tracking of 
consumer issues and complaints and better manage the use of the 
nation's airwaves in the public interest. Without adequate automation 
funding, the Commission will be unable to carry out its basic functions 
of awarding licenses to applicants for communications services, 
overseeing the implementation of new services for the public, and 
reviewing and updating existing rules and regulations. In view of the 
importance of these services to the economy of the United States, this 
investment in technology is critical.
    The total amount to be collected from regulatory fees would 
increase from $185,754,000 in fiscal year 2000 to $200,146,000 in 
fiscal year 2001. As you are aware, the FCC also has requested 
authorization to use $5.8 million in excess regulatory fees from 
previous years to support our fiscal year 2000 IT needs.

             PAST ACCOMPLISHMENTS BUILD A SUCCESSFUL FUTURE

    The telecommunications industry in the United States is, to date, a 
great success story. We have worked hard to implement the 1996 Act and 
effectuate the changes necessitated by a continually evolving 
marketplace. We have promoted competition across converging 
technologies and throughout the telecommunications marketplace.
    When I began my tenure as Chairman, we had to finish writing new 
rules to comply with the 1996 Act and the Supreme Court still had to 
pass on major sections of the law. Reports of the 1996 Act's premature 
death were rampant. Persistence paid off. We worked together to 
properly implement the 1996 Act, and with your support, we managed to 
make the telecommunications marketplace more viable and better equipped 
to face the future.
    As a result, the world is not the same as it was in 1996. The 
telecommunications industry has grown since then, creating 230,000 new 
jobs and generating $57 billion more revenues. Revenues in 
communications services, which include all telephone services, radio, 
cable and broadcast television, and certain other services, have grown 
by $7 billion from 1996-1998, a growth of 17 percent in real terms. 
That figure does not include the rapid growth in sales of 
communications equipment--telephone headsets, central office switching 
equipment, etc.--where revenues have grown $26 billion, 24 percent, 
between 1997 and 1999. With the growth in output, employment in the 
communications equipment and services industries has grown by $.2 
million during the past four years.
    During the past year, the FCC's staff has strived to implement 
common sense rules and programs to enhance the industry's growth, and 
defend those rules already in place. From wireless auctions to 
broadcasting and international, our staff has handled more applications 
and more public participation in telecommunications issues than ever 
before. Our aggressive implementation of the 1996 Act is generating new 
classes of competitors, new industries and lower prices.

Making a More Competitive Environment
    Our most important work has been in realizing the goals of the 1996 
Act to achieve competition and universal access to new services. To 
that end, we adopted rules and initiated rulemakings to eliminate 
barriers to entry in domestic telecommunications markets. The FCC 
implemented the local competition provisions of the 1996 Act, 
including: (1) revised unbundling rules in response to the Supreme 
Court remand in Iowa Utilities Board; (2) strengthened collocation 
rules; and (3) pricing flexibility which also included a Notice of 
Proposed Rulemaking on whether competitive local exchange carrier 
access rates should be regulated. We also expect to complete action on 
two Access Reform Proceedings during the second quarter of this year.
    The FCC approved Bell Atlantic's application under section 271 of 
the 1996 Act to provide long distance service in New York after 
determining that New York's local service markets are open to 
competition. During the past month, the FCC negotiated a consent decree 
to address Bell Atlantic's problems processing its competitors' orders. 
This enforcement action promotes local competition by ensuring that 
consumers will have additional choices and lower rates through expanded 
local competition.
    We also initiated proceedings to gather information on (1) the 
status of deployment of advanced telecommunications capabilities; and 
(2) the deployment of broadband facilities and the development of local 
competition. The FCC's staff forged ahead with determined speed to 
complete rulemakings on advanced services in the areas of loops, LATAs, 
DSL resale, and line sharing.
    Benefits to consumers in the long distance and local phone markets 
are an important achievement and priority. Domestic long-distance rates 
dropped nearly 56 percent in real terms since 1984, saving consumers 
about $200 billion. Some companies are offering services for as low as 
five cents per minute.
    On the international front, we are less than two years into the 
implementation of the WTO Agreement and the FCC's August 1997 
Benchmarks Order and we have already started to see dramatic results. 
These policies have increased liberalization, privatization, and 
competition, which have led to significantly lower international 
accounting rates. In turn, that has led to lower international calling 
rates. In 1996, the year just prior to Benchmarks and the WTO, the 
average price of an international long distance call originating from 
the United States was 74 cents per minute. By 1998, it fell by 25 
percent to 55 cents per minute, and finally to the current average of 
less than 55 cents per minute. By the time that Benchmarks is fully 
implemented in 2003, we expect to see much deeper reductions in 
international calling rates. Moreover, prices on competitive routes 
have fallen even more dramatically. For example, rates on the U.S.-U.K. 
route are as low as 10 cents per minute.
    Sometimes success is measured not so much by what we do, as what we 
decide not to do. The FCC's ``hands-off'' policy toward the Internet 
has helped fuel tremendous growth in this industry. Over 40 percent of 
American households have Internet access. In 1998, the U.S. Internet 
economy was a $633 billion market, accounting for nearly 8 percent of 
the nation's economy and 4.8 million jobs. Electronic commerce, which 
will be 90 percent business-to-business, is projected to be a trillion-
dollar activity in the next three to five years.

Accessible Services for All Americans
    We want everyone to have a piece of the Internet's potential, which 
is why we have established a framework and funding mechanism for 
ensuring that all of our country's schools and libraries are connected 
and that rural health care has access to information technology. We 
also have worked to ensure that those individuals living on Native 
American lands will likewise reap the benefits of this new technology.
    When the FCC's staff was not busy passing and implementing rules 
that would enhance the delivery of telecommunications services to the 
public or upgrading our systems and eliminating backlogs, we were 
working with Congress to study cutting edge issues like rural broadband 
rollout. We participated with rural Senators in two special hearings, 
here in Washington and in North Dakota, to study rural broadband 
rollout technologies and encourage their implementation throughout the 
United States.
    We also convened the Federal-State Joint Conference on Advanced 
Telecommunications Services (Joint Conference) on October 8, 1999, to 
further the vision of section 706 of the Telecommunications Act of 
1996. Patterned on a resolution by the National Association of 
Regulatory Utility Commissioners (NARUC), the Joint Conference joins 
federal and state forces to encourage the deployment of advanced 
telecommunications services to all Americans.

Safeguarding the Integrity of the Auctions Process
    One of our most important accomplishments during the past year is 
the judicial recognition of the integrity of the auctions process in 
the NextWave case. The Second Circuit has demonstrated that the 
application of common sense--the very same common sense displayed by 
this Subcommittee and the Senate Budget Committee--ensures that the 
auctions process will be a workable method for licensing the spectrum 
in the future.
    I cannot emphasize enough the importance of the Second Circuit's 
holding in this case. Auctions will play an especially critical role in 
ensuring that sufficient spectrum is available to meet the needs of the 
growing digital economy. We have witnessed an explosion of 
telecommunications services since auctions began. In 1993, there were 
15 million wireless phones in America. Today, there are 80 million. We 
have seen subscribership increase four-fold and the average wireless 
bill drop by 40 percent during this period. Moreover, wireless is 
taking over parts of the Internet. Already we are able to use portable 
devices like laptops and Palm Pilots to accomplish tasks that once 
required us to remain hooked to a hard line tether. Wireless represents 
mobility and access for new groups of people.
    Over the past six years we have completed 24 auctions with over 
1,800 qualified bidders participating. Most of these bidders were 
qualified and worked hard to bring service to the public. 
Unfortunately, there are those who tried to obtain the spectrum and 
then not pay a fair price for it. If we want to build upon our past 
auctions successes; we have to ensure that the system is fair and 
predictable. That is why I support using the legislative process to 
prevent future abuses of the auctions system. I commend this 
Subcommittee for its past efforts in this regard and I respectfully 
request that you again consider language that would prevent bankrupt 
licenses from using the bankruptcy court to shirk their obligations to 
the American taxpayer.

Addressing the Influx of Transactions
    The increasing number of licensees and changing market forces have 
dramatically increased the number of transfer/assignment applications 
processed at the Commission. Some bureaus have experienced extreme 
growth in the number of applications processed during the past four 
years and most of the bureaus saw a significant increase in the number 
of applications processed. The Wireless Telecommunications Bureau 
approved 23,889 license transfers in 1996. In 1999, this number jumped 
to 40,879. The Mass Media Bureau's Audio Division processed 3,869 
license transfer applications in 1996 and 4,951 in 1999. In the last 
year prior to passage of the 1996 Act, Audio Services only processed 
1,866 transfer and assignments.
    Most of these transfers have been processed quickly and 
efficiently, with little fanfare. Recently, the FCC has been faced with 
the challenge of how to facilitate the review of major transactions 
while ensuring that the public interest is met in an era of increasing 
consolidation and convergence. Some have been more complex and 
deserving of a hard look to protect the interests of the American 
consumer--SBC/Ameritech, MCI/Worldcom, Airtouch/Vodafone, Direct TV/
Primestar--all of these mergers consumed Commission resources, but were 
worth the careful study. In the end, our job is to protect the consumer 
and under the 1996 Act that you passed, promote competition. We would 
be remiss in our duty to you and the American public if we did not 
expend the time and effort that it takes to ensure that these mergers 
comply with our statutes and rules.
    Responding to congressional calls for improving the system for 
handling mergers, I directed FCC General Counsel Christopher Wright to 
assess the Commission's merger review process, and hire appropriate 
staff for addressing concerns raised by the crush of applications and 
their growing complexity. The result is a Transactions Team, which has 
already initiated the process for improving the way that we handle 
mergers. The Transaction Team has moved fast to address the concerns of 
the public, licensees and Members of the House and Senate. Already, the 
Transactions Team has identified areas of concern and moved to find 
workable policy solutions. They are working to ensure that our merger 
review process is transparent, efficient and predictable. They have 
established a web page and held a public forum on March 1, 2000.
    Improving licensing processing--whether for transfers and 
assignments or applications for service--has been a key ingredient of 
our work during the past year. We are nearing completion on the 
implementation of a Universal Licensing System that provides 
streamlined electronic filing capabilities for most wireless services. 
Now potential licensees can obtain their applications and a wide range 
of other forms over the Internet, and file them back within minutes.
    Electronic filing capabilities also are available in the other 
bureaus as well: Common Carrier, International, and Mass Media. All 
routine common carrier Local Access Transport Area modifications are 
now immediately placed on public notice and are accessible 
electronically through the Commission's Digital Index. We also 
implemented an electronic tariff filing system that permits incumbent 
ILECs to submit federal tariffs and associated documents via the 
Internet.

Meeting Daily Challenges with Innovative Solutions
    The need for a fast response to increased use of telecommunications 
services means that the FCC must find new and innovative solutions to a 
broad range of problems. For instance, just last week, the Commission 
released new rules to confront the issue of the rapid telephone number 
consumption by allocating telephone numbers in a more efficient, 
predictable and orderly fashion. Competition in telecommunications 
markets is partially dependent upon fair and impartial access by all 
telecommunications carriers to telephone numbers. After careful study, 
we adopted new policies to reduce the need for new area codes, avoiding 
the inconvenience, costs and confusion associated with changes in area 
codes for consumers and businesses.
    While our work during the past year is too voluminous to print here 
in detail, I would like to highlight a few special projects. In the 
past year, the FCC has:
  --Technology Advisory Council.--Established as a means by which a 
        diverse array of recognized technical experts selected from a 
        variety of interests such as industry, academia, government, 
        citizens groups, etc. can provide advice to the FCC on 
        innovation in the communications industry.
  --Public Safety.--National Coordinating Committee, CALEA, and E911: 
        ensured that our public safety and law enforcement bodies had 
        the tools necessary to ensure our safety throughout the 
        country.
  --Assistance to other Nations.--Set out in great detail the way our 
        country's telecommunications system is regulated and made this 
        available to other countries that are in the process of 
        establishing independent telecommunications systems.
  --Helped Disabled Americans.--Adopted rules to ensure access for 
        persons with disabilities under Section 255, and increased 
        access to the communications network by the 54 million 
        Americans with disabilities.
  --Restructuring of FCC.--Redesigned the Commission to establish two 
        new ``one-stop-shopping'' bureaus--Enforcement and Consumer 
        Information Bureaus--rather than having their responsibilities 
        spread throughout the Commission.
  --Y2K.--With the determined coordination of Commissioner Michael K. 
        Powell, the FCC assisted the rest of the country in ringing in 
        the new millennium free of computer glitches and ready to 
        correct any that did occur.

                           BACK TO THE FUTURE

    We have worked hard in the past year to bring the Commission into 
the present, and our pace will not slacken during the current year. I 
am releasing today a Report on the Implementation of the Draft 
Strategic Plan that we submitted to Congress in August 1999. My goals 
were to create a model agency for the digital age, promote competition 
in all communications markets, promote opportunities for all Americans 
to benefit from the communications revolution, and manage the 
electromagnetic spectrum in the public interest. Since introducing the 
plan, we have met with a wide range of interested parties to 
effectively gauge the response to our goals. We spoke with experts from 
academia, consumers, industry representatives, state and local 
government representatives and many of your staffs to discuss the 
future and our mutual goals. My first priority in the coming year is to 
continue keeping the promises outlined in the Strategic Plan.
    Be assured that we will continue to move toward a digital agency--a 
user-friendly and electronic environment where consumers and licensees 
alike feel comfortable communicating directly with the agency via 
online services or old-fashioned phone calls. This goal is our first 
one in our Implementation Report Card, and I know that success in this 
area is a certain sign that we are using our funding wisely and 
appropriately.
    Our aspirations for the future do not end there, because we are, 
after all, an agency dedicated to serving the public in a variety of 
ways. We have a wide range of futuristic goals in our Report Card, and 
I intend to work hard to follow through on the report's promises. Let 
me plot out what I call the ABC's of our current goals for the year.
    First, ``access.'' The E-Rate program is bringing its second 
successful year to a close, and now provides connectivity for one 
million public school classrooms. This program is a down payment on our 
children's futures, and on the skills needed to keep our high-tech 
economy going. One of my highest priorities is to funding E-rate 
program to wire the nation's rural and urban schools and libraries to 
the Internet. I want to continue promoting access to the digital tools 
and services for the 54 million Americans with disabilities [video 
description, TTY Access, TRS]. This year, the Commission adopted EO 
rules to help shatter glass ceilings and pave the way for the 
employment of more women and minorities at radio and television 
stations. The Commission also has issued a Notice of Inquiry on the 
public interest obligations of digital television licensees. We hope 
that this Notice will initiate a national dialogue on how America's 
broadcasters can best serve the public in the transition to digital 
television.
    Second, ``broadband rollout.'' The Commission will continue its 
active role in speeding the delivery of high-speed Internet access to 
every business and home in America. We will take all necessary steps to 
keep the nation's broadband infrastructure open to competition. We will 
track the deployment of broadband in the marketplace to maximize the 
use of this new technology. We will auction new spectrum to bring 
innovative services to the marketplace and the wireless web to 
consumers.
    As part of the broadband rollout, The 706 Joint Conference is 
holding six field hearings in coming months to gather information on 
the status of deployment of advanced telecommunications capability to 
all Americans. These field hearings will focus on two goals in 
particular. First, the Joint Conference will seek information on to 
what extent data is available at the state level on the status of 
deployment of advanced services. Second, the Joint Conference will seek 
examples of ``best practices'' of successful deployment in communities. 
Some communities have found creative ways to bring high speed Internet 
access to areas that were previously underserved. For example, a 
community may speed deployment by bringing many potential users of 
advanced services together, thereby aggregating demand to increase 
their buying power. A compilation of creative efforts, or best 
practices, will provide guidance to communities in other states to 
speed deployment of advanced services.
    We have set up Federal-State Joint Conference field hearings in a 
variety of locations: Anchorage Alaska on April 12, 2000; South Sioux 
City, Nebraska on April 19, 2000; Lowell, Massachusetts on May 22, 
2000; Miami, Florida on June 9, 2000; and Cheyenne, Wyoming on June 23, 
2000. When I think about these locations, I cannot somehow think about 
the convergence of the past, present and future of our country. It is 
somehow fitting that Lowell, Massachusetts, which saw the advent of the 
industrial revolution, will host a field hearing to discuss the future 
of telecommunications technology.
    Finally, let me address the ``C'' in my ABC's, ``competition.'' 
This Subcommittee has my commitment to continue working toward full and 
open competition. I will encourage the protection of consumers by 
giving them the information they need to navigate an increasingly 
complex telecommunications marketplace. I personally will review the 
findings of the Transaction Team to ensure that all mergers now pending 
and filed in the future will receive fast, efficient and flexible 
handling. We will make DTV compatible with the nation's cable networks. 
We will reform access charges to make more equitable phone billing and 
pricing practices. We will promote competition in local and long-
distance markets that will give consumers lower rates, better services, 
and more choices.

                               CONCLUSION

    Together, and with full funding of our request, we will work toward 
implementing the Strategic Plan--``A New FCC for the 21st Century'' to 
create a faster, flatter, more functional agency in an era of 
convergence. I appreciate your support for making this plan a reality, 
and also for supporting our request to use excess regulatory fees from 
past years to meet this year's IT needs. It is time to transform the 
FCC into a paperless, electronic agency. More importantly, it is time 
to ensure that the future includes providing access to communications 
services to all Americans. I believe that we share the same concerns 
and goals about the future. Together, we can ensure that our third 
millennium telecommunications infrastructure is a proud legacy.










    Senator Gregg. Thank you, Mr. Chairman. I appreciate your 
testimony and appreciate the work you have been doing and your 
Commission has been doing in this really incredibly important 
area for America's future. You represent the cutting edge of 
the prosperity of our Nation, obviously, and our capacity to be 
successful as a Nation is in large part going to be defined by 
our success in technologies which you oversee. I strongly 
support your efforts to minimize regulation of the Internet. I 
think that has been a very appropriate approach.
    There are, however, some issues that I just want to take up 
with you. First is your resource situation. Do you have enough 
resources to do the job at the FCC? Is your budget request that 
you sent to us adequate? Did OMB [Office of Management and 
Budget] reduce it in any way that you felt was inappropriate? 
And if so, tell us.

                         EXCESS REGULATORY FEES

    Mr. Kennard. Well, from where I sit, we can always use more 
resources. Our major challenge right now--and this is something 
that you have been quite supportive of--is our efforts to get 
funds released from excess regulatory fees that we have 
collected. As you are probably aware, in prior years we 
collected about $5.8 million in excess regulatory fees, which 
we were anticipating being able to use for this fiscal year. 
And, of course, you were very supportive in allowing us to 
reprogram those fees, but we have some discussions ongoing with 
the House to see if we can get those funds released.
    Looking forward to 2001, we believe that the amount of 
money that we are requesting will be appropriate. It will be a 
stretch, particularly given the anticipated filing of a number 
of applications by the Bell companies to get into long distance 
this coming year, and also with increased numbers of merger 
applications. But I believe we can make do.

                       TECHNICAL STAFFING LEVELS

    Senator Gregg. How about staffing? Are you finding it 
difficult to maintain technical staff, as some of our other 
agencies are? Or are you not finding that to be a problem as a 
result of the pay levels?
    Mr. Kennard. It is very difficult. It is particularly 
difficult for the FCC because some years ago we were able to 
attract lawyers and economists and engineers who could easily 
double or triple their salaries by going into the private 
sector. Now they are getting offers to go into the private 
sector and not just double or triple their salaries. They are 
being offered stock options to make them multimillionaires. And 
it is very difficult to compete in that economy.
    Senator Gregg. Is there anything this committee can do to 
assist you in that area?
    Mr. Kennard. Well, we have certainly watched with great 
interest the efforts of Chairman Levitt of the SEC to try to 
address this problem, and I would be very pleased to have a 
discussion with you about how we might stem the outflow of 
staff into the private sector by being able to pay them more.
    Senator Gregg. Well, we are interested in pursuing those 
avenues. I feel strongly that our Federal regulatory agencies, 
which are technically oriented such as yours, need to have 
staff that are technically capable. If you have staff that 
don't understand the technologies that they are supposed to 
regulate, you end up with a problem.
    Mr. Kennard. We would be delighted to have some further 
discussions with you on that.
    Senator Gregg. We sure would be open to that.

                            C-BLOCK LICENSES

    There are a number of issues which this committee has paid 
some attention to, one of which is the spectrum auction issue 
and the C-block specifically. Can you give us a brief summary 
of where that stands?
    Mr. Kennard. Certainly. We are still involved in attempting 
to allow the FCC to re-auction the C-block licenses that are 
currently in the bankruptcy court. We are awaiting a decision 
by the Second Circuit Court of Appeals which hopefully will 
allow us to proceed with a re-auction of the C-block licenses 
in the summer.
    Again, I want to tell you how much we appreciate the 
support that you have given us in this effort, the opportunity 
to appear before you in the Senate Finance Committee a few 
months ago, and also the work of your staff in supporting our 
efforts to be able to reclaim these licenses that rightfully 
belong to the American public and have them re-auctioned. It is 
very, very important.
    Senator Gregg. Just to put this in perspective, the company 
that originally won this bid agreed to pay $4.3 billion. Is 
that correct?
    Mr. Kennard. Yes.
    Senator Gregg. And that company then paid approximately 
$500 million as a down payment?
    Mr. Kennard. That is correct.
    Senator Gregg. And then it filed bankruptcy.
    Mr. Kennard. Yes.
    Senator Gregg. And in the bankruptcy, its creditors and as 
part of its reorganization plan, it alleged it should own the 
spectrum which it had won with the bid without further funds 
being paid.
    Mr. Kennard. That is correct.
    Senator Gregg. So instead of $4.3 billion, the attempt was 
to buy the spectrum for $500 million.
    Mr. Kennard. An additional $500 million, right. They were 
seeking to have the bankruptcy court write down--in effect, 
write down their debt to a total of about $1 billion.
    Senator Gregg. Then the bankruptcy court, on appeal, it was 
determined that the FCC and the American taxpayer owned the 
spectrum, and that it was not an asset of the bankruptcy court 
or of the bankruptcy estate, correct?
    Mr. Kennard. That is right.
    Senator Gregg. So now it is back in your hands under the 
decision of--was it the Second Circuit?
    Mr. Kennard. Yes. Actually, the bankruptcy court. The 
determination of the bankruptcy court was appealed to the 
Second Circuit, and the Second Circuit affirmed the FCC's 
regulatory authority to reclaim the licenses after the default.
    Senator Gregg. Which is reasonably logical since it is the 
taxpayers' asset, and I don't believe any private citizen has 
the right to take the assets of the Government.
    Mr. Kennard. Exactly right.
    Senator Gregg. I mean, that is almost black letter law, as 
I recall. You can't have adverse possession against the 
Government or bankruptcy possession against the Government.
    So presently the taxpayers own it, and as I understand it, 
there has been a request to stay the auction again by the 
original bankrupt estate, correct?
    Mr. Kennard. Yes, that is right. The company called 
NextWave, which is what I call the bankrupt licensee, is still 
fighting our efforts to reclaim the licenses in the Second 
Circuit. They have gone back to the bankruptcy court where they 
have been able to get favorable rulings, and the bankruptcy 
judge stayed our July auction.
    We went to the Second Circuit. The Second Circuit allowed 
us to go forward and prepare for the July auction pending the 
outcome of a Writ of Mandamus, which is still pending before 
the Second Circuit. We hope to get a ruling soon.
    But it is really important that we go ahead with this July 
auction, not just because of what is happening just in the C-
block and the ability to reclaim for the American taxpayer the 
value of those licenses but, more importantly, for the auction 
process. It is very important that when people come before the 
FCC and promise to pay for a license that belongs to the 
Federal Government that they pay. Otherwise, that license 
should be reclaimed. It belongs to the American public.
    Senator Gregg. Now, I understand that the bankrupt estate, 
NextWave, has offered, at least publicly through advertising, 
to pay the full $4.3 billion now. However, if it goes back to 
auction, would you presume that $4.3 billion would be the price 
that the American taxpayers would get for this?
    Mr. Kennard. I expect that the American taxpayers would get 
significantly more than that in a re-auction, and I base that 
on a couple of things.
    One, over the pending months of this bankruptcy proceeding, 
another company known as NexTel, not to be confused with 
NextWave, was prepared to make a hostile tender offer for 
NextWave, to buy its principal asset, which is the licenses, 
and was prepared to pay $8 billion for those licenses.
    We have also seen some reports out of Wall Street from 
analysts who follow the wireless industry that have estimated 
that in a re-auction these licenses would be sold for anywhere 
from $6 to $10 billion. So we think that the money, which would 
be a windfall to NextWave if they were able to retain these 
licenses, rightfully belongs to the American public.
    Senator Gregg. So we are talking here about somewhere 
between $2 and $5 billion that the taxpayer would lose if 
NextWave was allowed to come in and pay its original price, 
which it was unwilling to pay to begin with and went into 
bankruptcy court to try to reduce to $1 billion.
    Mr. Kennard. That is correct.
    Senator Gregg. So we are not talking small change.
    Mr. Kennard. No. This is real money.
    Senator Gregg. This is real money and significant amounts 
of dollars, obviously. So when we see an ad in the newspaper 
that says that they are willing to pay $4.3 billion and that 
that is great generosity on their part, what they are really 
saying is they are willing to come in and pay $4.3 billion, 
turn it around and make maybe a $4 billion profit.
    Mr. Kennard. That is correct.
    Senator Gregg. All at the expense of the taxpayer.
    Mr. Kennard. Correct.

                              SPECTRUM CAP

    Senator Gregg. Now, in the auctioning of spectrum, there is 
this issue of designated entities and the spectrum cap. Do you 
anticipate that the FCC will take any action to grant waivers 
in the area of the cap or spectrum capacity?
    Mr. Kennard. It is hard for me to say at this point. We 
have a number of petitions before us seeking waivers of the 
spectrum cap and also waiver of the designated entity rule, and 
I really haven't decided yet. I want to study the record and 
talk to a number of people both inside and outside the agency 
before I make a determination.
    Senator Gregg. Wouldn't it increase considerably the number 
of bidders participating if neither of those limitations were 
in place?
    Mr. Kennard. That is probably true, but we would have to 
balance that against the statutory mandate in Section 309(j) of 
the Act which gives us auction authority to ensure that there 
are opportunities for participation by small businesses. So it 
is going to be a balancing act that we are going to have to 
look at.
    Senator Gregg. When we are talking these dollars, we are 
really not talking small business, are we?
    Mr. Kennard. No, and that is going to be one of the 
considerations, clearly.
    Senator Gregg. You were talking about----
    Mr. Kennard. I think we are talking smaller versus larger. 
I think that is where it breaks out.
    Senator Gregg. You know, when you get over $1 billion, I am 
not sure--small business is something in New Hampshire. When 
you are over $1 billion, you are not dealing with many 
companies in New Hampshire.
    Mr. Kennard. Well, we hope to have some bidders from New 
Hampshire as well, Mr. Chairman.

                       LOW-POWER FM RADIO SERVICE

    Senator Gregg. If you do, it will be interesting.
    The low-power license issue--National Public Radio, I see, 
has put in a complaint about this question, which is 
interesting. As you know, I personally have some concerns about 
this. Maybe you could tell us your thoughts on this.
    Mr. Kennard. Certainly. Well, Senator, first of all, the 
goal of having a low-power FM radio service is to meet the 
tremendous demand by nonprofit organizations to access the 
airwaves and speak to their communities, and there has been a 
huge outpouring of interest in this rulemaking from churches, 
from schools, from universities, from governments.
    We believe that a low-power FM radio service can be 
accommodated without causing harmful interference, and we have 
watched the debate closely here in the Congress and, of course, 
before the FCC, and, frankly, there has been a lot of 
misinformation that is swirling around this issue--
misinformation by incumbent broadcasters who are creating all 
sorts of horror stories that low-power FM is going to create 
lots of destructive interference.
    We at the FCC are charged by you with policing the airwaves 
against interference, and during my tenure as Chairman, I have 
shut down more pirate radio stations operating illegally than 
any Chairman in history. So I have a record of and a commitment 
to making sure that there is not harmful interference on the 
airwaves. We have an expert engineering staff. We have done the 
studies. We have determined that we can have a low-power FM 
service without causing destructive interference.
    Now, it may cost some additional competition to incumbents, 
but based on the Telecom Act, competition is a good thing. We 
ought to have more voices over the airwaves. So I would invite 
the opportunity to meet with you and your staff and present to 
you our technical studies so that we can demonstrate that low-
power FM is not going to create the sort of interference 
nightmare that some of the incumbents have been saying.
    And having practiced before the FCC 12 years before I came 
to the FCC almost 7 years ago, I have seen a history of 
incumbents trying to frustrate the introduction of new voices 
and new technologies. And if we buy into these arguments that 
we should never have more voices on the airwaves, we will be 
playing into the same scare tactics, the same fears that were 
brought to the FCC to try to stop cable television in the 1970s 
and even to stop the direct broadcast satellite industry in the 
1980s and 1990s.
    Nobody wants competition in their backyard, but these are 
small, nonprofit groups. They are not even going to be 
competing for advertising revenues. So this should not be seen 
as a threat to the incumbent commercial broadcast industry. 
This should be seen as a complement.
    And I am aware of the concerns of National Public Radio. I 
have met with their president, and NPR, of all organizations, 
they understand the need for more nonprofit voices on the 
airwaves. And we will try to assure them that this service is 
not going to create destructive interference to their members. 
And I am confident that we can do that, and I would like the 
opportunity to try to convince you as well.
    Senator Gregg. We are joined by the chairman of the 
committee.
    Senator Stevens. Good morning.
    Mr. Kennard. Good morning, Mr. Chairman.
    Senator Gregg. Does the chairman want to ask some 
questions?
    Senator Stevens. Go right ahead.

                                MERGERS

    Senator Gregg. What is the status of monitoring mergers 
that might affect the Internet? Are you doing anything in that 
area such as MCI, Sprint?
    Mr. Kennard. Yes, that particular merger is still pending 
before us. That is not a merger per se that I would say affects 
the Internet. It really has to do with the merger of two long-
distance companies and whether that merger is in the public 
interest. And we are in the midst of developing a record on 
that and will probably be deciding soon.
    Senator Gregg. Mr. Chairman?
    Senator Stevens. Thank you. I am sorry to be a little late 
and to have missed your statement, Mr. Chairman.
    Senator Gregg. That is quite all right.
    Senator Stevens. I had to attend a little convention that 
is meeting here.

                           UNIVERSAL SERVICE

    You and I have had talks about universal service.
    Senator Gregg. Yes.
    Senator Stevens. And you know how I feel about those funds, 
that they are ratepayer funds. That concept really was 
developed following an initiative of Senator Inouye and myself 
when we tried to find some way to average the costs of 
telephone service to Alaska and Hawaii. But the interstate rate 
pool came out, and it really was a system that was developed by 
the carriers to provide ubiquitous service, and it worked.
    I was surprised to find that there is a growing feeling 
that these funds should be deposited in the Treasury. That 
would be the same as calling them a tax. They have not been a 
tax, and I think we have all opposed such a tax. As a matter of 
fact, if that happens, we set such a precedent that we are 
liable to have to start taxing the Internet and a lot of other 
things and none of us wants that. I think we want to find some 
way to work out an arrangement so that we can have support from 
whoever provides telephony for the service to those areas which 
cannot really afford it. I have talked to Steve Case [chairman 
of AOL] and Mr. Levin [chairman of Time Warner] had a meeting 
at the Commerce Committee. They agreed, and they are willing to 
work on such a concept for all developing communications.
    But what do you believe? Do you believe these should go in 
the Treasury? Do you think they were tax monies?
    Mr. Kennard. No, I don't. As you point out, universal 
service has been very successful for our country, vital to our 
telephone networks, and for decades it has been administered by 
a non-Federal entity, the National Exchange Carriers 
Association, through a system of inter-carrier transfers with 
the funds being held outside the Treasury. And that system has 
worked very well for our country for decades.
    I think the confusion arose after the enactment of the 1996 
Act when the Office of Management and Budget included the 
universal service fund as part of the United States budget as 
Federal funds. We are working closely with the Congressional 
Budget Office and OMB and Treasury to try to get a 
clarification on this because we feel that the system has 
worked well for decades as classifying these as non-Federal 
funds. We hope that Treasury and OMB will confirm to us, 
notwithstanding this confusion in the 1996 Act, that the fund 
can continue to be administered in the present manner as non-
Federal funds outside of the Treasury.
    Senator Stevens. Well, I think all of us from rural areas 
would applaud you on that stand. I hope that we get a decision 
from them that makes sense. I want you to know I stand ready to 
take whatever action is necessary to preserve the independence 
of that fund because I think that is the only way it can work. 
It is a business judgment of what is needed and not a tax that 
could ever be increased and diverted off into other areas.
    Now, we had some disagreement about what happened in terms 
of the schools and libraries, but that has worked, and it 
really hasn't expanded the demand. I think we have sort of 
buried our hatchet on that one. We believe it was necessary, 
and it is now something totally ingrained in the system. But to 
have it become a tax and be treated as a tax, it will affect 
the conduct of this committee in many ways if it continues.
    Mr. Kennard. Well, you would be a very powerful ally in 
this effort, Mr. Chairman, and I would appreciate your help on 
this.
    Senator Stevens. I would be pleased to help in any way that 
you think we can help, and I know I speak for Senator Inouye, 
too. Our States have benefited from this concept, and we are 
now in the 21st century with everyone else. We want to go ahead 
with everybody else. And I was really pleased to have the 
commitment of AOL/Time Warner that they would work with us and 
make certain that this concept would not be lost with whatever 
develops in the future.

                          SECTION 271 PETITION

    This is not really my bailiwick, necessarily, but you have 
put fines now on Bell Atlantic for the failure to comply with 
your decision regarding their 271 petition, as I understand it. 
This was for failing to switch local customers to their 
competitors in New York, as I understand it.
    Mr. Kennard. Yes, sir.
    Senator Stevens. Were those actions that led to the fines 
pending before the 271 petition was approved?
    Mr. Kennard. No. This was an issue that arose shortly after 
the filing--the grant of the 271 application. We had been 
monitoring throughout the pendency of the application the way 
that Bell Atlantic had established a system to cut over lines 
and to provide lines for DSL. And the action that we took 
recently was a recognition that the platform for provisioning 
these lines to competitors was not as stable as we would like. 
And so we imposed some fines for the inability of Bell Atlantic 
to get into compliance on time, and we are monitoring them 
closely to make sure that this platform stabilizes. If it 
doesn't stabilize, then more action may be warranted.
    Senator Stevens. Well, I understand the Department of 
Justice has raised concerns about SBC in the Texas region, and 
they have, I believe, an application pending. Don't you think 
that should be a condition of the granting of the 271 petition 
to comply with the 1996 Act before they get the 271 approved?
    Mr. Kennard. Well, I assure you, Mr. Chairman, that the FCC 
is not going to grant a 271 application unless we can be 
assured that the market is open and competitors have meaningful 
access to compete. And, of course, that is what we are 
grappling with right now with the SBC application to determine 
whether that record demonstrates that SBC has sufficiently 
opened its market to competitors. We haven't made a decision 
yet.
    Senator Stevens. I am pleased to hear you say that. I hear 
people criticizing the 1996 Act all the time, but I think it is 
working.
    Mr. Kennard. So do I.
    Senator Stevens. And I think that the way it works is 
through effective enforcement, and so I congratulate you.

                       LOW-POWER READING SERVICES

    I was visited the other day by members of the blind 
community from my State, and they had some questions about the 
low-power FM issue. Are you conducting tests to see that the 
low-power reading services that are made available to the blind 
and visually impaired are not interfered with by local signals?
    Mr. Kennard. Well, before authorizing the low-power FM 
service, our engineers conducted tests. There were also tests 
submitted in the record, and the FCC was able to determine, 
before voting on that new service, that it would not cause 
harmful interference to any incumbent service, including the 
radio reading service.
    Senator Stevens. Well, it is my understanding they are 
going to use low-power for their reading services and that they 
feel that they are being interfered. But, in any event, I hope 
that you are looking into that. I am hearing from public radio 
they don't really like the low power. Is there a conflict 
coming there that we don't understand?
    Mr. Kennard. I believe that there is a lot of fear because 
this is a new service, and I am confident, though, that once 
these stations are licensed and people actually begin living 
with them in their communities, a lot of this fear will 
dissipate.
    We have had low-power stations in this country in the past, 
and we know that they can co-exist with full-power stations. 
This is not a new experimental technology. We have been living 
with the FM band for many, many years in this country. Now, we 
know how those signals propagate. We know how low-power 
stations operate. And I am confident that once these stations 
get licensed and people start to listen to them and enjoy them, 
they will realize that they can co-exist in harmony with other 
stations.
    Senator Stevens. How are they themselves going to be 
monitored so that they don't interfere with existing signals?
    Mr. Kennard. They will be monitored like any other 
broadcaster. They will have a license, and they will have to 
operate consistent with the parameters of their license; and if 
they don't, they will have to----
    Senator Stevens. But you have to have a listening post 
within the parameter of their low power, and I understand that 
is not going to be possible.
    Mr. Kennard. To have--I am sorry, sir.
    Senator Stevens. You have to have a listening post within 
the parameters of the low power to know whether they are 
interfering, don't you?
    Mr. Kennard. No, they will be operated just like the full-
power FM stations. They will have a license. They will have to 
operate within their licensed parameters, and if they don't, 
then it is an enforcement issue. And the FCC has field offices 
that periodically monitor different radio markets to make sure 
that everyone is abiding by the rules, and they will be treated 
just the same as full-power stations.
    Senator Stevens. My last question. I know that Senator 
Gregg has got a bill on that, as a matter of fact, dealing with 
low power.
    Senator Gregg. Yes. We have discussed it.
    Senator Stevens. You have already. Sorry for coming in 
late.
    Senator Gregg. No. It is good to go over it again.

                         CROSS-OWNERSHIP RULES

    Senator Stevens. This last one is sort of a strange one to 
bring up with you in some ways, but I come from a State that 
almost all of its local newspapers have now been acquired by 
people who live outside of our State, and much of the over-the-
air media, cable media, is still owned by local people.
    As the newspapers started to fail, I believe that the 
cross-ownership ban led to their demise as a local influence 
because they were sold off. I don't know if you saw this 
enormous article in the Wall Street Journal about the cross-
ownership ban.
    Mr. Kennard. Yes, I did see that.
    Senator Stevens. I understand that you are proceeding with 
rulemaking on this. Is that correct?
    Mr. Kennard. Well, we have----
    Senator Stevens. Cross-ownership.
    Mr. Kennard. We have existing cross-ownership rules, and 
under the Telecom Act, we are required to review those rules 
every 2 years, and we are in the process now of reviewing all 
of our ownership rules in that context.
    Senator Stevens. Well, I urge you to go to rural America 
and review it. I think it has always been reviewed in the 
megapolis areas where there are enormous newspapers and 
enormous chains. It is my feeling that local newspapers have 
gone practically underground because they did not have the 
ability to move out and have cross-ownership in their area. 
There is still a deep feeling, as the article points out, by 
some Members of Congress against it. But as we see what has 
developed as we get into more and more competition within the 
media, no one could have dreamed of what we have got now. The 
people who have the local cable television or radio stations 
have a great interest in having another outlet for their 
capabilities, and there is a savings to be had in merging the 
newsrooms of local TV and the local newspaper. I think this 
cross-ownership ban has hurt rural America. I would urge you to 
really get some people to study that so that we can see if you 
can't modify it in the megapolis areas, or at least give some 
leeway in rural America so that we can have the continued local 
ownership of these things. You know, it is a strange thing when 
you start losing the page in the papers that covers Boy Scouts 
and Girl Scouts and other things. All everybody ever reads is 
the bad news from the rest of the world instead of the good 
news from home. We would very much like to see some leeway or 
local ownership in rural America if it cannot be modified as a 
whole.
    Mr. Kennard. We will certainly look at that, Senator.
    Senator Stevens. It is nice to see you, and I want to 
extend to you and the chairman of the subcommittee another 
invitation to come up and conduct a little marine research this 
year.
    Mr. Kennard. It would be delightful. Thank you very much.
    Senator Stevens. Thank you very much.
    Senator Gregg. Thank you, Mr. Chairman.
    Mr. Kennard. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Gregg. Thank you. Get us some ideas, if you have 
some, on the staffing.
    Mr. Kennard. We certainly will.
    [The following questions were not asked at the hearing, but 
were submitted to the Commission for response subsequent to the 
hearing:]

               Question Submitted by Senator Ted Stevens

    Question. More and more of my colleagues are talking about your 
review of mergers or imposing a time limit on your ability to review 
them. What are you doing to address these concerns? What pending 
mergers do you have that have been reviewed for over six months and 
when can we expect them to be resolved?
    Answer. In the years since passage of the 1996 Amendments to the 
Communications Act, there has been a substantial increase in the number 
of mergers among companies holding licenses or authorizations issued by 
the FCC. The FCC must approve the transfers of these licenses and 
authorizations under the public interest standard set forth in the 
statute. In response to the increased burden of more numerous 
applications, the importance of the FCC's review to implementing the 
purposes of the Communications Act, and concerns expressed by Congress, 
applicants, and the public, the FCC has taken several steps to explain 
and improve its process for reviewing applications and requests 
relating to mergers.
  --At the direction of the Chairman, a Transactions Team has been 
        established within the Office of General Counsel with the 
        responsibility to ensure that the agency's review process 
        relating to proposed mergers is efficient, consistent, 
        transparent, and predictable.
  --The Team collected information within the agency, met with members 
        of the Communications and Antitrust Bar and with 
        representatives of public interest groups, and held a Public 
        Forum on March 1, 2000, during which it presented and asked for 
        comment on proposals to make the process more transparent and 
        speedy while maintaining fairness and ensuring sound results.
  --Those steps include a proposed timeline for reviewing merger-
        related applications that identifies the stages and mechanics 
        of the review process and is calculated to complete processing 
        in even the most complex cases within 180 days of public notice 
        of the application, as long as applicants provide the necessary 
        information and do not substantially revise the application at 
        a late stage.
  --The Transaction Team also established a site on the world wide web 
        that contains more detailed information on its purpose, 
        activities, and proposals and through which the public can 
        obtain specific information on the status and progress of 
        applications related to specific major mergers. The Transaction 
        Team site may be reached easily from the FCC home page at 
        http://www.fcc.gov.
  --Comments on the proposals were due March 28, 2000, and are 
        currently being reviewed.
  --Web pages applying the proposed timeline to specific mergers have 
        been established for two major recent proposed mergers--
        MCIWorldcomm/Sprint and AOL/TimeWarner as examples and 
        experiments.
  --The Transactions Team is also taking steps to facilitate 
        coordination among the various Bureaus at the Commission that 
        have jurisdiction over different types of licenses and 
        authorities that may be involved in a single transaction, and 
        to increase coordination and minimize with other governmental 
        agencies (primarily the Department of Justice and the Federal 
        Trade Commission) that have jurisdiction over the transactions 
        under the antitrust laws.
  --As to implementation, many of these steps can be taken without the 
        need for or delay associated with formal rulemakings, and are 
        being implemented, at least on an experimental basis, as soon 
        as practical with respect to pending transactions, to the 
        extent that they appear to provide greater efficiency, 
        transparency, and predictability. The Transaction Team expects 
        to provide constant information on its progress on its web 
        page, and will periodically provide reports and public notices 
        of significant changes or revisions. After appropriate 
        experience has been gained, a rulemaking may be considered to 
        implement changes that have proved valuable and successful.
    The mergers with related applications that have currently been 
pending before the FCC for more than six months generally involve 
special circumstances, and the Commission expects to address them 
expeditiously. For example, applications related to the proposed merger 
of Bell Atlantic and GTE, although originally filed in late 1998, were 
put on hold at the request of the applicants until the end of January, 
2000, so that the applicants could develop a proposal to bring the 
transaction into compliance with Section 271 of the Communications Act. 
The January proposal has since itself been revised and is currently 
being discussed by the applicants, the Commission, and other parties in 
an effort to resolve these issues. Applications relating to the 
proposed merger of AT&T and Media One, which were originally filed in 
July of 1999, were substantially revised in late November, 1999. 
Applications relating to the proposed Sullivan Broadcasting Co. Inc./
Sinclair Broadcasting Group, Inc. merger pending before the Video 
Services Division of the Mass Media Bureau were substantially modified 
in November, 1999, upon the effective date of new agency rules, and are 
heavily contested.
    Applications relating to a significant number of proposed 
transactions (approximately 25) involving holders of radio station 
licenses have been pending for over six months. The proposed mergers to 
which these applications relate generally would significantly increase 
concentration in local radio markets and present special problems 
arising from a combination of the relaxation of absolute numerical 
limits on ownership in the 1996 Act and the Commission's definition of 
the ``market'' in these situations. These levels of concentration raise 
concern about competition and diversity, and several of these 
transactions are under investigation by the Department of Justice. The 
FCC has devoted substantial time to address the underlying issues and 
anticipates taking action to address these issues within the next two 
months. In the meantime, the Commission is undertaking to address and 
resolve, to the extent it can, the circumstances of particular cases 
that have been pending for an extended time.
                                 ______
                                 
           Questions Submitted by Senator Ernest F. Hollings

    Question. The FCC recently determined that the local phone market 
in New York is open to competition and granted Bell Atlantic authority 
to enter the long distance market in New York. Since that time, Bell 
Atlantic has entered a consent decree with the FCC agreeing to pay 
fines because it has not been able to provide service to its 
competitors as required under section 271. What actions can the FCC 
take to ensure that Bell Companies do not provide substandard service 
after obtaining section 271 authority? What processes does the FCC have 
in place that will allow it to effectively enforce its section 271 
orders? While the FCC has used fines as an enforcement tool, what other 
enforcement tools are at the FCC's disposal to ensure quick compliance 
with section 271?
    Answer. The Commission has various options available to it to 
ensure that Bell Operating Companies (``BOC'' or ``BOCs'') maintain the 
openness of their local markets to competition following the 
Commission's grant of authority to provide in-region interLATA service 
under section 271 of the Communications Act of 1934, as amended. The 
Commission is committed to aggressive, fair and rapid enforcement of 
the post-entry requirements using all means at its disposal. As the 
Commission previously stated in authorizing Bell Atlantic's section 271 
application, ``[s]wift and effective post-approval enforcement of 
section 271's requirements . . . is essential to achieve Congress's 
goal of maintaining conditions conducive to achieving durable 
competition in local markets.'' \1\
---------------------------------------------------------------------------
    \1\ Application by Bell Atlantic New York for Authorization Under 
Section 271 of the Communications Act To Provide In-Region, InterLATA 
Service in the State of New York, CC Docket No. 99-295, Memorandum 
Opinion and Order, FCC 99-404, (December 22, 1999), at para. 446 (Bell 
Atlantic New York 271 Order), appeal pending sub nom. AT&T Corp. v. FCC 
(D.C. Cir. filed Dec. 27, 1999) (No. 99-1538).
---------------------------------------------------------------------------
    Section 271 includes specific language allowing the Commission to 
take enforcement action to ensure that a BOC continues to comply with 
the requirements of section 271 following Commission approval. The 
Commission is authorized to take such action if, at any time after 
approval of the application, the Commission determines that a BOC ``has 
ceased to meet any of the conditions required for such approval.'' \2\ 
After ``notice and an opportunity for hearing,'' the Commission may: 
(i) issue an order to such company to correct the deficiency; (ii) 
impose a penalty on such company pursuant to title V; or (iii) suspend 
or revoke such approval. The Commission has determined that section 
271's hearing requirement does not require formal, trial-type 
evidentiary proceedings before an administrative law judge.\3\ Rather, 
the Commission has stated that a paper proceeding is sufficient to 
satisfy this requirement.
---------------------------------------------------------------------------
    \2\ 47 U.S.C. Sec.  271(d)(6)(A).
    \3\ Bell Atlantic New York 271 Order at para. 450.
---------------------------------------------------------------------------
    The strongest enforcement mechanism available to the Commission is 
found in section 271(d)(6)(A)(iii), which authorizes the Commission to 
suspend or revoke section 271 approval. If the Commission determines 
that a BOC has ceased to meet any of the market opening conditions 
specified in section 271, the Commission could elect to issue a 
``stand-still'' order prohibiting the BOC from enrolling additional 
subscribers for its interLATA service and from all marketing and 
promotion of interLATA service. Such a stand-still order would 
effectively freeze the BOC's interLATA subscriber base as of the date 
of the order and could remain in effect until such time as the record 
is sufficiently clear that the BOC has fully corrected the problem. In 
extreme cases, it also could revoke the BOC's authority to provide 
interLATA service altogether.
    Additionally, the Commission may assess forfeitures against non-
compliant BOCs in accordance with section 271(d)(6)(A)(ii). Such a 
penalty would be assessed by the Commission pursuant to Title V of the 
Communications Act. Section 503(b)(1)(B) allows the Commission to 
assess a forfeiture penalty against any person who has willfully or 
repeatedly failed to comply with any of the provisions of the 
Communications Act or any rule, regulation or order issued by the 
Commission. The Commission, upon determining that this type of 
enforcement action is warranted, could elect to issue a notice of 
apparent liability to the allegedly non-compliant BOC and allow the BOC 
to respond in writing, in accordance with section 503(b)(4), or conduct 
a formal forfeiture hearing before an administrative law judge in 
accordance with section 503(b)(3). The amount of any such forfeiture 
penalty is limited by section 503(b)(2)(B) which provides that a common 
carrier may be liable for a forfeiture penalty not to exceed $100,000 
for each violation or each day for a continuing violation, except that 
the total forfeiture amount for a continuing violation shall not exceed 
$1,000,000.\4\
---------------------------------------------------------------------------
    \4\ Due to inflation adjustments, the maximum for each violation or 
each day for a continuing violation is now $110,000 and the maximum 
total forfeiture amount for a continuing violation shall not exceed 
$1.1 million.
---------------------------------------------------------------------------
    A third section 271 enforcement avenue available to the Commission 
allows the Commission to issue an order requiring a non-compliant BOC 
to correct any deficiencies pursuant to section 271(d)(6)(A)(i).
    In addition to its section 271(d)(6) enforcement powers, the 
Commission continues to have its pre-existing enforcement powers, 
including its authority under sections 206-209 of the Communications 
Act. For example, the Commission maintains the ability to resolve 
formal complaints filed by competitors affected by the allegedly non-
compliant BOC's actions and, among other things, to award damages if 
warranted. Pursuant to section 271(d)(6)(B), the Commission is required 
to review formal complaints properly alleging section 271 violations 
within 90 days.
    In order to evaluate the post-grant performance of BOCs that have 
received section 271 authorization, as well as to initiate or recommend 
enforcement action where appropriate, the Commission's Enforcement 
Bureau has established a section 271 enforcement team. The primary 
functions of the team are: (1) to review complaints and other 
information from interested persons regarding post-grant 
``backsliding'' by BOCs whose applications are approved; (2) to 
undertake or recommend swift and effective enforcement action where 
appropriate; and (3) to act as the point of contact within the 
Commission for persons wishing to provide information regarding 
possible ``backsliding'' by BOCs. The team is headed by the Deputy 
Chief of the Enforcement Bureau and includes senior attorneys and 
auditors from the Enforcement Bureau as well as the Common Carrier 
Bureau.
    One of the core objectives of section 271 as well as the entirety 
of the Telecommunications Act of 1996 is to increase significantly the 
competition in the local telephone markets. The Commission has various 
mechanisms available to it to ensure that the BOCs, after gaining 
section 271 approval, maintain the openness of their local service 
markets. The Commission is committed to the vigorous and efficient 
enforcement of the conditions of the BOC entry into the interLATA 
market and will not hesitate to utilize the tools at its disposal to 
accomplish this objective.
    Question. In Congress, we have heard from a number of licensees who 
are frustrated by the amount of time it takes the FCC to conclude its 
review of mergers. What is the FCC doing to ensure greater transparency 
and efficiency in its merger review process? When will the FCC 
implement its proposed merger review guidelines? What if any mergers 
have been pending before the FCC for more than 6 months?
    Answer. In the years since passage of the 1996 Amendments to the 
Communications Act, there has been a substantial increase in the number 
of mergers among companies holding licenses or authorizations issued by 
the FCC. The FCC must approve the transfers of these licenses and 
authorizations under the public interest standard set forth in the 
statute. In response to the increased burden of more numerous 
applications, the importance of the FCC's review to implementing the 
purposes of the Communications Act, and concerns expressed by Congress, 
applicants, and the public, the FCC has taken several steps to explain 
and improve its process for reviewing applications and requests 
relating to mergers.
  --At the direction of the Chairman, a Transactions Team has been 
        established within the Office of General Counsel with the 
        responsibility to ensure that the agency's review process 
        relating to proposed mergers is efficient, consistent, 
        transparent, and predictable.
  --The Team collected information within the agency, met with members 
        of the Communications and Antitrust Bar and with 
        representatives of public interest groups, and held a Public 
        Forum on March 1, 2000, during which it presented and asked for 
        comment on proposals to make the process more transparent and 
        speedy while maintaining fairness and ensuring sound results.
  --Those steps include a proposed timeline for reviewing merger-
        related applications that identifies the stages and mechanics 
        of the review process and is calculated to complete processing 
        in even the most complex cases within 180 days of public notice 
        of the application, as long as applicants provide the necessary 
        information and do not substantially revise the application at 
        a late stage.
  --The Transaction Team also established a site on the world wide web 
        that contains more detailed information on its purpose, 
        activities, and proposals and through which the public can 
        obtain specific information on the status and progress of 
        applications related to specific major mergers. The Transaction 
        Team site may be reached easily from the FCC home page at 
        http://www.fcc.gov.
  --Comments on the proposals were due March 28, 2000, and are 
        currently being reviewed.
  --Web pages applying the proposed timeline to specific mergers have 
        been established for two major recent proposed mergers--
        MCIWorldcomm/Sprint and AOL/TimeWarner as examples and 
        experiments.
  --The Transactions Team is also taking steps to facilitate 
        coordination among the various Bureaus at the Commission that 
        have jurisdiction over different types of licenses and 
        authorities that may be involved in a single transaction, and 
        to increase coordination and minimize with other governmental 
        agencies (primarily the Department of Justice and the Federal 
        Trade Commission) that have jurisdiction over the transactions 
        under the antitrust laws.
  --As to implementation, many of these steps can be taken without the 
        need for or delay associated with formal rulemakings, and are 
        being implemented, at least on an experimental basis, as soon 
        as practical with respect to pending transactions, to the 
        extent that they appear to provide greater efficiency, 
        transparency, and predictability. The Transaction Team expects 
        to provide constant information on its progress on its web 
        page, and will periodically provide reports and public notices 
        of significant changes or revisions. After appropriate 
        experience has been gained, a rulemaking may be considered to 
        implement changes that have proved valuable and successful.
    The mergers with related applications that have currently been 
pending before the FCC for more than six months generally involve 
special circumstances, and the Commission expects to address them 
expeditiously. For example, applications related to the proposed merger 
of Bell Atlantic and GTE, although originally filed in late 1998, were 
put on hold at the request of the applicants until the end of January, 
2000, so that the applicants could develop a proposal to bring the 
transaction into compliance with Section 271 of the Communications Act. 
The January proposal has since itself been revised and is currently 
being discussed by the applicants, the Commission, and other parties in 
an effort to resolve these issues. Applications relating to the 
proposed merger of AT&T and Media One, which were originally filed in 
July of 1999, were substantially revised in late November, 1999. 
Applications relating to the proposed Sullivan Broadcasting Co. Inc./
Sinclair Broadcasting Group, Inc. merger pending before the Video 
Services Division of the Mass Media Bureau were substantially modified 
in November, 1999, upon the effective date of new agency rules, and are 
heavily contested.
    Applications relating to a significant number of proposed 
transactions (approximately 25) involving holders of radio station 
licenses have been pending for over six months. The proposed mergers to 
which these applications relate generally would significantly increase 
concentration in local radio markets and present special problems 
arising from a combination of the relaxation of absolute numerical 
limits on ownership in the 1996 Act and the Commission's definition of 
the ``market'' in these situations. These levels of concentration raise 
concern about competition and diversity, and several of these 
transactions are under investigation by the Department of Justice. The 
FCC has devoted substantial time to address the underlying issues and 
anticipates taking action to address these issues within the next two 
months. In the meantime, the Commission is undertaking to address and 
resolve, to the extent it can, the circumstances of particular cases 
that have been pending for an extended time.
    Question. In the merger review context, there have been legislative 
proposals to curtail the FCC's public interest review authority. I am a 
strong supporter of the FCC's public interest authority. In your 
opinion, why is it important that the FCC maintain its public interest 
authority?
    Answer. The FCC's authority and responsibility to review 
applications related to proposed mergers under the public interest 
standard is particularly important in the context of today's 
communications industry. Since the 1996 Act, the industries licensed by 
the FCC have experienced a wave of consolidation that is unprecedented, 
at least since AT&T constructed its monopoly position in the early 
development of telephone service that led to decades of regulation. The 
FCC provides the only forum in which applications related to these 
mergers (which have generated a substantial amount of interest and 
comment from the public) can be reviewed in the context of a public 
proceeding, governed by the Administrative Procedure Act, with a 
written decision explaining the results.
    The public interest standard applied by the FCC in its review has a 
long pedigree as a useful and flexible device for such review. Although 
flexible, the standard is not without content. To the contrary, the 
FCC's recent decisions in major merger cases have tied the standard to 
the provisions of the Communications Act and the agency's regulations 
implementing that Act. The standard is not limited to remedying 
specific violations of the Commission's existing rules, however, and 
this provides important flexibility. Innovation in these industries is 
occurring at a frantic pace. Businesses and markets are changing 
rapidly as new technologies replace old and brush aside old models. 
This innovation is both the product and the source of healthy 
competition, which allows the agency to reduce and avoid direct 
government regulation. But the threat posed by innovation to existing 
firms can create strong incentives to take defensive steps to block 
competition or raise barriers to innovation or market entry. Mergers 
can both promote efficiency and competition and make defensive actions 
easier. The public interest standard allows the FCC in a public 
proceeding to examine the impacts of proposed mergers, and determine 
whether the merger will promote or endanger the goals of the 
Communications Act. Those goals include not only enhancing (not merely 
preserving) competition, but also maintaining diversity and encouraging 
the rapid and broad deployment of new technologies to all Americans. 
The advantages of a flexible public interest standard anchored in the 
express policies of the Communications Act over fixed rules that often 
require years to propose and adopt are readily apparent in the rapidly 
changing environment of today's communications industries. It is 
difficult enough to keep up with challenges of rapid change today even 
with the public interest standard. Without this standard, efforts to 
protect and preserve the goals of the 1996 Communications Act in an era 
of rapid consolidation would be severely impaired.
    Question. Many countries made WTO commitments to open their 
telecommunications markets to foreign competition. But several 
countries appear to be having difficulty fully implementing their WTO 
commitment. For example, U.S. carriers recently highlighted 
implementation problems with Mexico, Canada, South Africa, Peru, and 
Japan. What steps have the FCC affirmatively taken to enforce open 
markets abroad? Please provide specific examples of problems, 
solutions, and resulting behavior.
    Answer. The FCC has a unique role to play in the process of 
ensuring that foreign markets are open to U.S. telecommunications 
companies, as many countries look to the FCC as a model independent 
regulator and to the FCC's regulations as models for the introduction 
of competition into telecommunications markets. The FCC's activity in 
promoting competition in other countries generally falls into two 
categories: (1) engaging in discussions with and providing technical 
assistance to foreign telecommunications regulatory bodies; and (2) 
providing input for U.S. government comments in select critical 
proceedings of foreign telecommunications regulatory bodies.
    The FCC has extensive and regular contact with telecommunications 
regulators and other government officials around the world. These 
contacts take the form of formal bilateral meetings, informal talks and 
side discussions at various international meetings. Through its 
International Visitors Program, the FCC has hosted approximately 400 
officials from 100 countries in 1999 alone. These contacts provide the 
FCC an opportunity to offer technical assistance to countries seeking 
to introduce competitive reforms as well as to urge the resolution of 
specific problems. We highlight below FCC efforts to establish contacts 
and address competitive concerns in the specific countries about which 
you inquire.

Mexico
    The FCC has a long-standing working relationship with the Mexican 
telecommunications regular, Comision Federal de Telecomunicaciones 
(Cofetel), characterized by ongoing discussions on a variety of issues 
of concern to the United States, including: establishing cost-oriented 
interconnection rates; issuing regulations to allow resale in Mexico; 
preventing anti-competitive actions by the dominant carrier, Telmex; 
issuing dominant carrier regulations that would apply to Telmex; and 
creating a transparent, nondiscriminatory universal service program.
    Chairman Kennard discussed these issues with his Mexican 
counterpart, Mr. Jorge Nicolin, the Chairman of Cofetel, during a 
recent visit to the United States by Mr. Nicolin. Chairman Kennard also 
expressed concerns with Mexican policies to Mr. Nicolin's predecessor 
and to the Chairman of Telmex, Mr. Carlos Slim Helu. Chairman Kennard 
recently participated in a panel at the recent Latin American 
Telecommunications Summit (LATS) on interconnection at which Mexican 
regulators were present. FCC staff have had frequent contact with their 
counterparts at Cofetel, including meetings in July 1999 that focused 
on universal service issues. At that meeting, an FCC expert presented 
U.S. concerns with Mexico's universal service program. Adoption of a 
non-discriminatory, transparent universal service program is critical 
to Mexico's plans to adopt cost-oriented interconnection rates. In 
addition, FCC staff have frequent contact with Cofetel staff at various 
meetings of the regional organization, Inter-American 
Telecommunications Commission (CITEL).
    Cofetel has taken some important steps towards addressing concerns 
raised by the FCC, although much work remains to be done. On March 28, 
2000, Cofetel announced that they would be issuing dominant carrier 
regulations that will apply to Telmex, the former monopoly provider of 
telecommunications services in Mexico. CITEL, under the direction of 
FCC staff working as a rapporteur, has adopted ``best practice'' 
guidelines for interconnection. These CITEL best practice guidelines 
provide valuable and influential guidance to countries throughout Latin 
America, including Mexico, on an issue of critical importance to 
promoting competition.

Germany
    The FCC has frequently engaged the German telecommunications 
regulator, Regulierungsbehoerde fur Telekommunikation und Post (RegTP), 
in discussions on issues of concern to the United States regarding the 
German telecommunications regulatory framework, including: excessive 
licensing fees; the transparency of cost data; and controlling the 
anti-competitive billing and collection practices of the dominant 
carrier, Deutsche Telekom.
    Chairman Kennard raised these issues in a meeting with Chairman 
Scheurle of RegTP in September 1999. FCC experts also held two days of 
tutorials for RegTP in April 1999 on a variety of topics of concern to 
new entrants. In November 1999, an FCC economist worked with RegTP 
staff on cost modeling issues and the use of protective orders to 
safeguard proprietary data while still providing opportunity for public 
scrutiny and comment. In March 2000, the U.S. government, with FCC 
participation, held bilateral negotiations with RegTP and the German 
Ministry of Economics. FCC staff have also met with officials from 
Deutsche Telekom (DT), the former monopoly provider of 
telecommunications services, to discuss issues of competition, resale, 
interconnection and regulatory transparency. The FCC has also engaged 
the European Commission on competition issues in Germany and elsewhere 
in Europe. Finally, the FCC coordinated the submission of U.S. 
government comments in the 1999 EU Communications Review as well as the 
EU consultation on unbundled local access.
    RegTP has issued a number of important pro-competitive decisions 
addressing such issues as number portability (April 1998), pre-
selection (June 1998), interconnection pricing (May 1999) and leased 
lines (September 1999). In February 1999, RegTP required a one-third 
reduction in the rates charged by Deutsche Telekom for competitors to 
use DT's unbundled local loop connections. In December 1999, RegTP 
announced a nearly 25 percent decrease in interconnection rates and 
expressed plans to lower further interconnection rates this year. In 
March 2000, RegTP announced that they will be reviewing and, if 
appropriate, adjusting their high licensing fees. Finally, the European 
Commission is closely reviewing German telecommunications regulatory 
policy and may recommend changes this year.

Canada
    AT&T has recently raised concerns regarding the universal service 
funding obligation on competitive long distance carriers in Canada. The 
Canadian telecommunications regulator, the Canadian Radio-television 
and Telecommunications Commission (CRTC), denied a petition from AT&T 
and others requesting that the methodology used to determine universal 
service obligation be modified. This issue is presently pending on 
appeal before the Canadian Cabinet. CRTC also has indicated that it 
plans to review the methodology in the near future. The FCC assisted 
the Office of the United States Trade Representative (USTR) in drafting 
a letter to the CRTC raising potential concerns with the Canadian 
universal service program. The FCC and USTR are closely monitoring the 
ongoing CRTC and Cabinet review of the universal service program and 
based on the results of this review, will determine whether additional 
action is warranted.
    In addition to cooperating with USTR to address concerns about 
Canada's universal service program, the FCC has met with Canadian 
officials on a number of occasions to discuss competition issues. The 
most recent of these meetings was in September 1999, when Chairman 
Kennard and senior staff met with senior officials of the CRTC to 
discuss a broad range of telecommunications issues and to promote 
cooperation between the two commissions.

South Africa
    The FCC has long had a close working relationship with the South 
African Telecommunications Regulatory Authority (SATRA). To formalize 
that relationship, Chairman Kennard signed a work plan with SATRA in 
August 1999, in which the FCC agreed to provide SATRA technical 
assistance in matters of telecommunications regulatory policy. On 
several occasions since, FCC staff have met with key officials from 
Telkom South Africa, the Independent Broadcasting Authority and the 
South African Department of Communications to discuss a wide range of 
issues, including telecommunications regulation, broadcast regulation, 
satellite issues, spectrum allocation, numbering and competition 
policy.
    AT&T has recently raised the concern that Telkom, the dominant 
carrier in South Africa, refuses to provision circuits to AT&T, in 
violation of a SATRA directive. FCC staff have participated in several 
videoconferences with South African government officials in an effort 
to resolve this situation. In addition, FCC staff will provide input 
into the submission of U.S. Government comments in the current SATRA 
regulatory proceeding that could contribute to a resolution of this 
issue.

Peru
    Bell South has recently raised a concern with the high level of 
local interconnection rates charged by the dominant carrier, Telefonica 
de Peru. The FCC has worked with the Peruvian telecommunications 
regulator, Organismo Supervisor de Inversion Privada en 
Telecomunicaciones (OSIPTEL) since its inception on a series of issues 
relating to the introduction of competition. With the introduction of 
full competition in Peruvian telecommunications late last year, OSIPTEL 
must now ensure that interconnection rates are cost-based. OSIPTEL is 
looking to the FCC for guidance in meeting this obligation. In 
addition, Chairman Kennard recently signed a work plan with OSIPTEL in 
March 2000, in which the FCC agreed to provide OSIPTEL technical 
assistance in telecommunications regulatory policy matters.
    At the recent meeting of the Latin American Telecommunications 
Summit (LATS), Chairman Kennard met with Chairman Kunigami of OSIPTEL 
as well as other top Peruvian officials to discuss the Bell South 
complaint. Kennard also held an in-depth seminar with one quarter of 
the staff of OSIPTEL on issues relating to interconnection and the 
establishment of an independent, effective regulator. We are hopeful 
that our ongoing dialogue with key individuals at OSIPTEL will result 
in a reduction in interconnection costs in that market. FCC staff have 
recently met with Peruvian officials to discuss tariff regulation, 
market entry and competition issues, benchmark issues and international 
simple resale (ISR).

Japan
    The FCC has had numerous regulator-to-regulator discussions with 
the Japanese Ministry of Posts and Telecommunications (MPT) on a broad 
range of regulatory issues of key concern to the United States, 
including dominant carrier regulation, interconnection, universal 
service and competition policy. The FCC has also met with 
representatives from Keidanren, a major Japanese business organization 
which advises MPT, to discuss issues such as regulatory independence 
and safeguards against anti-competitive behavior. Recently, a major 
focus of talks has been on the high interconnection rates in Japan of 
the dominant carrier, Nippon Telegraph and Telephone (NTT). The FCC 
participated in recent deregulatory talks with Japan, hosted by USTR. 
Interconnection issues were a major topic of those talks.
    Japan recently committed to reducing its interconnection fees to a 
cost-oriented level by 2003. The FCC will continue to engage its 
counterparts at MPT on interconnection issues and other competition 
policy concerns.

Israel
    Through a series of bilateral meetings, the FCC urged the Israeli 
government to end a discriminatory policy that imposes a higher access 
fee on international calls to and from the United States. Recently, 
Israel committed in a letter to the United States to eliminate this 
discriminatory practice by December 31, 2001.
    Question. Tribune recently announced plans to purchase the Los 
Angeles Times Mirror. This acquisition if approved, will result in 
Tribune owning television stations and newspaper properties in the same 
market in violation of the FCC's broadcast newspaper crossownership 
rules. The integrity of the broadcast crossownership rules will be 
undermined by this merger if the FCC does not act to ensure that the 
merger complies with its broadcast-crossownership rules. The FCC 
adopted its newspaper cross ownership rule in 1975 and the rule was 
upheld by the Supreme Court in 1978. I have been a strong supporter of 
this rule because it ensures that the public receives diverse 
information by preventing major media outlets from being owned by the 
same entity. I believe the FCC should implement its cross ownership 
rule with respect to the Tribune-Times Mirror merger and correct the 
procedural rule that suggests that the FCC wait until a renewal 
application is filed prior to considering the issue.
    Please advise me of what steps you intend to take to deal with this 
problem so that the substance of the cross-ownership rule will not be 
undermined by the FCC's oversight with respect to properly updating its 
procedural rules. When will the FCC conclude a proceeding to bring the 
Tribune-Times Mirror merger into compliance with its broadcast-
newspaper cross ownership rules and close the procedural loop hole in 
its rules?
    Answer. In the Second Report and Order in Docket 18110, 50 FCC 2d 
1046 (1975), the Commission stated that the newspaper/broadcast cross-
ownership rule it was adopting in that proceeding would apply to new 
ownership patterns however created, whether by initial application and 
construction or by acquisition. In cases where a daily newspaper was 
acquiring a local broadcast station, the Commission would be able to 
act promptly with regard to the prohibited combination as part of its 
consideration of the assignment application that would have to be filed 
by the newspaper's owner and the seller of the broadcast property. 
However, because the Commission does not regulate newspapers, it would 
have no similar opportunity to assess the merits of the proposed merger 
in cases where the broadcast licensee was purchasing a local daily 
newspaper. Accordingly, in the Second Report and Order the Commission 
determined that if a broadcast station licensee were to purchase one or 
more daily newspapers in the same market, it would be required to 
dispose of its stations there within 1 year or by the time of its next 
renewal date, whichever is longer. If the newspaper is purchased less 
than a year from the expiration of the license, the Commission 
continued, the renewal application may be filed, but it will be 
deferred pending the sale of the station, if necessary, until the year 
has expired. At the time this provision was adopted the license period 
for broadcast stations was three years. Accordingly, in cases where the 
broadcast licensee acquired a local daily newspaper, it would have at 
the least one year in which to divest or, at most, three years.
    Subsequently, however, Section 307(c) of the Communications Act was 
amended to extend the license term for broadcast stations to eight 
years. The Commission, to date, has not changed its retention policy 
with regard to broadcast stations' acquisitions of local newspapers to 
take into account this expanded license term. The Tribune/Times Mirror 
merger demonstrates that this policy is in need of review. Under the 
existing policy, Tribune will be able to maintain at least three local 
newspaper/broadcast combinations--combinations which our rules provide 
are contrary to the public interest--until the relevant broadcast 
station licenses come up for renewal in six or seven years. If the 
newspaper/broadcast cross-ownership provision is to remain a vital part 
of our ownership rules, it seems clear that the extended period of 
common ownership now permitted as a result of unrelated changes to 
broadcasters' license terms should be remedied. Accordingly, I intend 
to discuss with my colleagues what action might be appropriate to 
address this anomaly.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

    Question. I would like to commend the FCC for generally supporting 
the important universal service mandates found in Section 254(g). The 
Commission's continued adherence to these statutory mandates is vital 
to ensure that all Americans--including those in noncontinguous or 
remote areas--benefit from increased competition in the provision of 
interexchange telecommunications services. What is the status of 
proceedings dealing with the rate integration mandates of Section 
254(g)?
    Answer. The Commission's commitment to principles of geographic 
rate averaging and rate integration is reflected in orders dating from 
at least 1972. Congress codified these principles for the first time in 
1996 by amending the Communications Act of 1934 to include section 
254(g). The Commission promulgated rules to implement section 254(g) in 
its August 1996 First Report and Order on geographic rate averaging and 
rate integration. Under these rules, carriers generally are obligated 
to use the same basic rate structures and to offer the same general 
calling plans to all of their customers for interstate long-distance 
services, regardless of the U.S. state, territory, or possession in 
which the customers are located, or whether they are in rural or urban 
areas. Thus, interstate long-distance calls of similar distance, 
duration, and time of day should cost the same for all of a carrier's 
customers. Carriers accomplish this by ``averaging'' their interstate 
long-distance rates between low-cost (often urban) areas and high-cost 
(often rural) areas, and by ``integrating'' off-shore points such as 
Hawaii, Alaska, Puerto Rico, and the Virgin Islands into their domestic 
rate schedules.
    Because the Commission had implemented a geographic rate averaging 
and rate integration policy through its orders before the 1996 Act, 
carriers already were obligated to provide averaged and integrated 
rates in all states, Puerto Rico, and the U.S. Virgin Islands at the 
time of the August 1996 order. In light of Congress' codification of 
the policy, however, the Commission began with the August 1996 order to 
ensure that all U.S. territories and possessions with more than de 
minimis amounts of telecommunications traffic were rate integrated. The 
Commission has determined that no further steps are required to ensure 
implementation of rate integration for U.S. territories or possessions 
other than Guam, the Northern Marianas, and American Samoa. Although 
rate integration is not yet fully implemented in Guam and the Northern 
Marianas, the Commission observed in a July 1997 order that subscribers 
already were enjoying substantially lower rates than they experienced 
prior to the 1996 order. The Commission's efforts to integrate American 
Samoa require it to address a variety of issues, including: (1) 
privatization of the government run telephone company and its division 
into separate local and long-distance entities; (2) provision of equal 
access arrangements to interstate long-distance providers; (3) 
participation of American Samoa in the North American Numbering Plan; 
and (4) inclusion of the local telephone company in the National 
Exchange Carrier Association (NECA). American Samoa's rates were fully 
integrated into the NECA tariffs as of July 1, 1999.
    In construing section 254(g), the Commission has held that that a 
carrier must integrate its rates for a particular service across all 
its affiliates. The Commission also has held that rate integration now 
applies to all interstate, interexchange services, including those 
offered by satellite and Cellular Mobile Radio Service (CMRS) 
providers. In October 1997, the Commission stayed the affiliate rule as 
applied to CMRS carriers, and in April 1999 the Commission sought 
comment on how to implement the rate integration requirement for CMRS. 
The Commission intends to issue an order addressing these issues in 
August 2000. In the meantime, a challenge to the Commission's 
conclusion that rate integration applies to CMRS providers is pending 
before the United States Court of Appeals for the D.C. Circuit, with 
argument scheduled for April 2000. Also at issue in the appeal is 
application of the affiliate rule to wireline carriers.
    Question. In the context of the FCC's efforts to reform the 
interstate access charge system, the possible geographic deaveraging of 
interexchange rates charged to end-users has been raised. What steps do 
you contemplate to assure that any reform of the interstate access 
charge system will not undermine Section 254(g)'s geographic averaging 
requirements or lead to unreasonable disparities in the interexchange 
rates charged to consumers in urban areas and those in remote or non-
contiguous areas?
    Answer. The Commission is currently considering adoption of a 
proposal made by a coalition of local and long-distance companies (the 
``CALLS proposal'') that would permit local telephone companies to 
deaverage the flat monthly subscriber line charge (SLC) paid by end 
users on a limited basis. Nothing in the CALLS proposal permits 
interexchange carriers to charge higher rates to customers in rural or 
high cost areas, as prohibited by section 254(g). Further, the CALLS 
proposal would place absolute caps on the SLC and expand universal 
service giving all carriers, including competitive carriers, explicit 
interstate universal service support for providing service in higher 
cost areas. According to proponents of the CALLS proposal, the SLC caps 
and the expanded explicit universal service support would help to 
assure that consumers in rural, insular and high cost areas continue to 
have access to telecommunications and information services that are 
reasonably comparable to those services provided in urban areas, and at 
reasonably comparable rates. The Commission will keep universal service 
principles in the forefront in evaluating the CALLS proposal.
    Question. I would like to commend the Commission for its attention 
to the need for securing DBS and DTH service for Hawaii, 
notwithstanding that the process has not gone as swiftly as was 
expected. It is my understanding that the Commission's rules and 
rulings require DBS operators such as EchoStar and DirecTV to provide 
DBS service to the State of Hawaii. For example, the rules obligate 
EchoStar and DirecTV to serve Hawaii from their newer orbital positions 
and satellites that were authorized after January 1996. Would you 
advise the Committee when the Commission expects its licensed DBS 
operators to actually begin providing service to the State; what 
actions the Commission [is] considering to ensure that this service is 
initiated expeditiously; and what steps are contemplated to assure that 
the State of Hawaii receives DBS and DTH (Direct-To-Home) services like 
those received in the Continental United States, as these services 
evolve?
    Answer. The Commission recognizes the importance of establishing 
DBS as a competitor to cable in the multi-channel video programming 
distribution market in the state of Hawaii and has worked hard to 
ensure that DBS service providers include Hawaii in their service 
plans. By way of background, in the 1995 Revision of the Rules and 
Policies for the Direct Broadcast Satellite Service, Report & Order, 11 
FCC Rcd 9712 (1995) (DBS Auction Order), the Commission adopted 
geographic service obligations for the state of Hawaii which require 
DBS licensees licensed after January 19, 1996 to provide service to 
Hawaii as well as Alaska upon commencement of operations, where 
technically feasible. In its DBS Auction Order, the Commission found 
that service to the state of Hawaii is technically feasible from the 
110 deg. W.L. and 119 deg. W.L. orbital locations (both of which can 
provide full CONUS coverage) and that all four western DBS orbital 
positions (148, 157, 166 and 175 degrees W.L.) offer appropriate 
platforms for such service. In 1998, the Commission initiated a Notice 
of Proposed Rulemaking addressing the DBS rules and, among other 
things, requested comment on its geographic service rules.\5\
---------------------------------------------------------------------------
    \5\ In the Matter of Policies and Rules for the Direct Broadcast 
Satellite Service, Notice of Proposed Rulemaking, 13 FCC Rcd 6907 para. 
34 (1998).
---------------------------------------------------------------------------
    Specifically, we asked if there are other steps the Commission 
should take to ensure delivery of service to Hawaii and Alaska. This 
proceeding is still pending. Additionally, the International Bureau has 
had discussions with representatives from the states of Hawaii and 
Alaska and other interested parties concerning this issue. The 
International Bureau met EchoStar in late April 2000. Additionally, the 
International Bureau will meet DIRECTV and representatives of Hawaii 
and Alaska in June 2000 to discuss the issues involved and to determine 
the actual extent of DBS service to these states.
    Based on our current information, the following describes our 
understanding of DBS service provided in Hawaii. EchoStar Satellite 
Corporation, which operates the DISH Network, is authorized to provide 
service from the 110 deg., 119 deg., and 148 deg. orbit locations and 
currently has satellites at the first two locations. DIRECTV is 
authorized to provide service from the 119 deg. W.L., 110 deg. W.L. and 
101 deg. W.L. orbit locations. EchoStar filed a letter on December 17, 
1999, informing the Commission of its plans to provide service to 
Alaska and Hawaii from its satellites located at 110 deg. W.L. and 
119 deg. W.L. The Commission put this filing on public notice and has 
received comments. In its letter, EchoStar states that the EchoStar 5 
satellite that was launched in September 1999, has recently commenced 
partial operations after undergoing successful in-orbit testing and 
that EchoStar is in the process of bringing its full capacity on line. 
EchoStar states that Hawaii will have at least fifty video channels in 
addition to targeted local channel offerings provided from this 
satellite located at 110 deg. W.L. EchoStar was granted temporary 
authority to move its EchoStar 4 satellite to 119 deg. W.L. where 
EchoStar asserts that it will enable residents of Hawaii to receive 
enhanced service from that location. EchoStar states that from the 
119 deg. W.L. location it will be able to provide more than 60 channels 
of core cable type programming to Hawaii and Alaska. EchoStar states 
that it also intends to serve Hawaii from its 148 deg. W.L. orbit 
position when it launches a new satellite to that location. EchoStar's 
original plans to serve the State of Hawaii from 148 deg. were delayed 
due to technical problems as described in its request for declaratory 
ruling. According to DIRECTV, it expects to serve Hawaii in the near 
future but has not announced a specific date.
    The Commission is committed to ensuring that DBS providers serve 
the states of Hawaii and Alaska. To that end Commission staff is 
working on a number of projects to meet this objective. The staff will 
carefully consider all comments filed in the EchoStar proceeding, the 
Notice of Proposed Rulemaking, and the outcome of the meetings with 
representatives of Hawaii and Alaska and DBS operators to determine 
whether DBS providers are meeting their geographic service obligation.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

    Question. I believe that we must do all we can to address the 
digital divide between those of us who enjoy the benefits of electronic 
commerce, and those who remain outside of these opportunities. 
Specifically, I would like to know how many schools the E-Rate program 
has connected to the Internet over the past year and what impact the 
Internet has had on students?
    Answer. In Internet Access in U.S. Public Schools and Classrooms 
1994-99, the National Center for Education Statistics (NCES) estimates 
that, between October 1998 and October 1999, approximately 5,752 public 
schools gained access to the Internet. According to NCES, 89 percent of 
all public schools, or approximately 85,322 public schools, had at 
least one connection to the Internet in 1998. By 1999, 95 percent of 
all public schools, or approximately 91,074 schools, had gained access 
to the Internet, a 6 percent net increase. The NCES report also notes 
that some 300,000 classrooms were newly connected to the Internet 
during this same time period. While not all of these gains are 
attributable to the schools and libraries universal service support 
mechanism (also known as the E-Rate), I must observe that over $2 
billion has been disbursed to public schools for internal connections 
purposes in the program's first two funding years (November 1998 to 
June 2000).
    For evidence of the effect Internet connections have had on 
students, I draw your attention to a publication produced by the 
Education and Library Networks Coalition (EdLiNC), entitled E-Rate: 
Connecting Kids & Communities to the Future. This publication contains 
numerous stories of communities that have benefited from the program. 
In Aniak, Alaska, for example, the Kuspuk School District has been able 
to wire all of its school buildings and install satellite-based 
Internet connections at every school as a result of the $41,000 in 
first year funding that it received through the E-Rate program. Thus, 
the Yupik Eskimo children residing in the district's eight villages, 
none of which are accessible by road, can now utilize the Internet's 
resources. Another example comes from the Houston Independent School 
District, which received $19.6 million in E-Rate funding in the 
program's first year. Houston ISD used this funding to help develop a 
network for its various campuses and create an exchange of information 
between local schools in math and science. A final example comes from 
New Jersey, where the Atlantic County Library System received $100,000 
in E-Rate funding to connect half of the county's public and private 
schools and 20 libraries with flat-rate access to the Internet.
    Question. Chairman Kennard, you are aware that Congress continues 
to debate the merits of Permanent Normal Trade Relations for China. The 
President has identified PNTR as key to creating opportunities for 
American businesses and American workers. I would like for you to 
comment on the potential impact PTNR will have on the American 
telecommunications industry. For example, how will PNTR and the WTO 
legal framework protect the intellectual property interests of the 
American telecommunications industry?
    Answer. You have asked for my comments on the potential impact that 
granting ``permanent normal trade relations'' (PNTR) to China would 
have on the U.S. telecom industry. As I'm not an expert on trade 
matters, I rely on my colleagues William Daley and Charlene Barshefsky 
to comment on the general issue of PNTR and China. I can tell you that 
experts at the FCC have looked at the deal that USTR negotiated with 
China and believe that it offers significant commitments in the areas 
of value-added and basic services. With regard to the issue of IPR, 
about which you have specifically asked, I must confess that it is not 
an area in which the FCC has expertise. I believe it would be more 
appropriate to address your question to the Patent and Trademark Office 
(PTO) or to USTR.
    Question. Access to telecommunications opportunities are a 
cornerstone of your tenure at the FCC. Low-power FM radio and broadcast 
EEO rules attempt to increase the accessibility Americans have to the 
airwaves or to the industry. Could you evaluate the FCC's progress thus 
far on these two initiatives?
    Answer. The Commission has made great progress in authorizing a new 
LPFM service and implementing its new EEO rule. On January 20, 2000, 
the Commission issued a Report and Order authorizing two new classes of 
noncommercial LPFM service designed to serve very localized 
communities. The new rules adopted by the Commission limit LPFM to LP 
100, with power from 50-100 watts and a service radius of about 3.5 
miles; and LP10, with power from 1-10 watts and a service radius of 
about 1 to 2 miles. The rules impose station separation requirements 
between new LPFM and existing radio stations on co-, first and second 
adjacent and intermediate frequency (IF) channels. The Commission opted 
not to impose third adjacent channel separation requirements because 
the engineering data and tests in the proceeding demonstrated that 100 
watt LPFM service will not cause unacceptable levels of interference to 
existing radio stations separated by three channels. A 20-kilometer 
buffer has been added to the separations for protecting co-channel and 
first adjacent channel full-service stations. This buffer will provide 
increased protection and flexibility for existing and subsequently 
upgraded full-power FM radio facilities. Eligibility for new LPFM 
facilities is limited to noncommercial entities. The Report and Order 
stated that a noncommercial service will be the best way to bring 
additional diversity to broadcasting and serve local community needs in 
a focused manner with LPFM service.
  --With respect to the licensing process for LPFM, on March 17, 2000, 
        the Mass Media Bureau announced that 100 watt LPFM applications 
        will be accepted in a five-stage national filing window. A copy 
        of the Public Notice is attached. Further information on LPFM 
        may be easily obtained from the FCC home page at http://
        www.fcc.gov. The fifty states, the District of Columbia, and 
        the remaining jurisdictions have been divided into five groups, 
        and all LPFM applicants proposing to locate transmitters in a 
        particular state or jurisdiction must file in the five-day 
        filing window for that state or jurisdiction. The order in 
        which the five different groups will be opened for applications 
        was determined on March 27, 2000 by lottery. The first group 
        consists of Alaska, California, District of Columbia, Georgia, 
        Indiana, Louisiana, Maine, Mariana Islands, Maryland, Oklahoma, 
        Rhode Island, and Utah. A copy of that Public Notice listing 
        the states and jurisdictions comprising each group and the 
        order in which the groups were placed by the lottery is 
        attached. The Commission expects to issue a Public Notice 
        announcing the first five-day filing window for the first group 
        of states and jurisdictions at the end of April, thirty days 
        before the first day of the filing window, which will be at the 
        end of May. For additional information, please refer to http://
        www.fcc.gov.
    With respect to EEO, on January 20, 2000, the Commission adopted 
new equal employment opportunity (EEO) rules that reaffirm the 
Commission's long-standing anti-discrimination rule and require broad 
outreach to all qualified job candidates for positions at radio, 
television and cable companies. The Report and Order prohibits 
discrimination on the basis of race, religion, color, national origin 
or gender. The effective date for the new EEO rules is expected to be 
April 17, 2000, assuming that the Commission receives by that date OMB 
approval for the information collection requirements contained in the 
rules. The new rules respond to the D.C. Circuit Court of Appeals 
decision in 1998 in Lutheran Church Missouri Synod v. FCC (Lutheran 
Church), which held that certain aspects of the Commission's previous 
broadcast EEO outreach requirements were unconstitutional.
    The new rules require broadcast licensees and cable entities to 
widely disseminate information about job openings to all segments of 
the community to ensure that all qualified applicants, including 
minorities and women, have sufficient opportunities to compete for 
jobs. The new rules do not require broadcasters to hire any particular 
applicant. The Commission also amended its EEO rules applicable to 
cable entities, including multichannel video programming distributors, 
to conform them, as much as possible, to the broadcast EEO rule.
    The Report and Order gives a broadcaster significant flexibility in 
designing its EEO program. Broadcasters may implement two supplemental 
recruitment measures: (1) sending job vacancy announcements to 
recruitment organizations that request them; and (2) selecting from a 
menu of non-vacancy specific outreach approaches, such as job fairs, 
internship programs, and interaction with educational and community 
groups. Alternatively, if a broadcaster or cable entity believes it can 
accomplish broad outreach without these supplemental recruitment 
measures, it may design its own outreach program and must maintain 
records concerning the recruitment sources, race, ethnicity and gender 
of applicants so it can monitor the effectiveness of its outreach 
efforts. The Report and Order continues to allow religious broadcasters 
to establish religious belief or affiliation as a job qualification for 
all station employees.
    As in the past, broadcast stations with fewer than five full-time 
employees and cable entities with fewer than six full-time employees 
will not be required to demonstrate compliance with the EEO program 
requirements. However, all other broadcasters must place an annual EEO 
report in their public file detailing their outreach efforts and must 
file a Statement of Compliance every second, fourth and sixth year of 
the license term certifying compliance with the EEO rule. In addition, 
all television stations and radio stations with more than 10 full-time 
employees must submit their annual EEO reports to the Commission midway 
through the license term and at renewal. At these times, the Commission 
will review the station's outreach efforts. Cable entities will be 
required to submit their annual EEO public file reports as part of the 
supplemental information required by statute to be filed every five 
years.
    The Commission also reinstated the requirement that broadcasters 
file annual employment reports, which was suspended by the Commission 
following the Lutheran Church decision and retained the requirement 
that cable entities file annual employment reports. The Commission will 
use the information in the annual employment reports only to monitor 
industry employment trends and prepare reports to Congress.
                                 ______
                                 
                Public Notice--DA 00-621, March 17, 2000

   FCC ANNOUNCES FIVE-STAGE NATIONAL FILING WINDOW FOR LOW POWER FM 
                     BROADCAST STATION APPLICATIONS

    The Mass Media Bureau announces the establishment of a five-stage 
national filing window for 100 watt low power FM (LPFM) applications. 
The five-stage filing window approach is designed to ensure the 
expeditious implementation of the LPFM service and to promote the 
efficient use of Commission resources.
    The FCC has divided the fifty states, the District of Columbia, 
Puerto Rico and the remaining jurisdictions into five groups, each 
comprised of ten states and at least one other jurisdiction. All LPFM 
applications proposing to locate transmitters in a particular state or 
jurisdiction must file in the filing window for that state or 
jurisdiction. Applicants in states and jurisdictions in each of the 
five groups will be permitted to file LPFM applications during a 
designated five-day filing window.
    The five groups are as follows:
    I: Connecticut, Illinois, Kansas, Michigan, Minnesota, Mississippi, 
Nevada, New Hampshire, Puerto Rico, Virginia, Wyoming.
    II: American Samoa, Colorado, Delaware, Hawaii, Idaho, Missouri, 
New York, Ohio, South Carolina, South Dakota, Wisconsin.
    III: Alabama, Arkansas, Guam, Kentucky, Massachusetts, Montana, 
Nebraska, New Mexico, North Carolina, Pennsylvania, Washington.
    IV: Arizona, Florida, Iowa, New Jersey, North Dakota, Oregon, 
Tennessee, Texas, U.S. Virgin Islands, Vermont, West Virginia.
    V: Alaska, California, District of Columbia, Georgia, Indiana, 
Louisiana, Maine, Mariana Islands, Maryland, Oklahoma, Rhode Island, 
Utah.
    On March 27, 2000, the FCC will select through a random process the 
first application group. The selection will be held on March 27, 2000 
at 10:00 a.m. in the Commission Meeting Room, 445 12th St. S.W., Room 
TW-C305.
    The dates of the first filing window will be announced by Public 
Notice at least 30 days prior to the first day of the window.
    The order of the filing windows in which the four subsequent 
groups' applications will be accepted will also be determined on March 
27, 2000. Tentatively, filing windows will follow each other at three-
month intervals. However, the Bureau may reduce or increase the amount 
of time between filing windows as we gain experience with this new 
service and filing approach. The dates of the four subsequent filing 
windows will be announced by Public Notice at least 30 days prior to 
the first day of each window.
    The composition of each group is designed to ensure the equitable 
distribution of LPFM station licenses in three ways. First, every part 
of the country is represented in each group. Every state or 
jurisdiction will have a one in five chance of being selected for the 
first filing window. Second, each group is balanced by market size in 
that each group contains several of the top fifteen markets. Finally, 
all of the states in each group are separated geographically, thus 
eliminating the potential for conflicting proposals across state lines.

                                   By the Chief, Mass Media Bureau.
                                 ______
                                 
                                  NEWS
                                                    March 27, 2000.
 FCC LOTTERY TODAY DETERMINES ORDER FOR ACCEPTING APPLICATIONS FOR LOW 
                    POWER FM RADIO STATION LICENSES

 ACTUAL DATES OF FILING WINDOWS TO BE ANNOUNCED IN LATER PUBLIC NOTICE

    Washington, DC--The FCC today held its low power FM lottery to 
determine the order in which it will accept applications for this new 
radio service.
    The lottery determined that the applicants from the following group 
of states will be the first to be accepted: Alaska, California, 
District of Columbia, Georgia, Indiana, Louisiana, Maine, Mariana 
Islands, Maryland, Oklahoma, Rhode Island, Utah.
    The Commission will take applications during a five-day filing 
window that will be announced in a subsequent Public Notice to be 
issued at the end of April, 30 days prior to the first day of the 
filing window, which will be at the end of May.
    As he kicked-off the lottery process, FCC Chairman William E. 
Kennard, said, ``Today we begin a process that offers access to the 
airwaves to many Americans--such as members of schools, churches, 
minority groups, public safety agencies, volunteer fire departments and 
other local community groups. I look forward to the FCC's soon 
receiving applications from many groups that, through these short-
range, low power radio stations, will have a voice to serve their local 
communities.''
    Commissioner Gloria Tristani said, ``My grandfather, the late U.S. 
Senator Dennis Chavez, taught me that one of the most important things 
we can do as public servants is to give a voice to the voiceless. 
That's why low power radio is so important.''
    The Commission will be accepting applications in five groups. 
Evenly divided within those five groups are the 50 states, as well as 
U.S. possessions and territories.
    The following is the order, also determined by lottery today, for 
processing applications from applicants in the remaining state groups:
    No. 2.--Connecticut, Illinois, Kansas, Michigan, Minnesota, 
Mississippi, Nevada, New Hampshire, Puerto Rico, Virginia, Wyoming. 
(Public Notice July 2000; filing window: August 2000).
    No. 3.--American Samoa, Colorado, Delaware, Hawaii, Idaho, 
Missouri, New York, Ohio, South Carolina, South Dakota, Wisconsin 
(Public Notice October 2000; filing window: November 2000).
    No. 4.--Arizona, Florida, Iowa, New Jersey, North Dakota, Oregon, 
Tennessee, Texas, U.S. Virgin Islands, Vermont, West Virginia (Public 
Notice January 2001; filing window: February 2001).
    No. 5.--Alabama, Arkansas, Guam, Kentucky, Massachusetts, Montana, 
Nebraska, New Mexico, North Carolina, Pennsylvania, Washington (Public 
Notice April 2001; filing window: May 2001).
    The actual dates for the filing windows in each state grouping will 
be announced in subsequent Public Notices.
                   SECURITIES AND EXCHANGE COMMISSION

STATEMENT OF ARTHUR LEVITT, CHAIRMAN
ACCOMPANIED BY JAMES M. McCONNELL, EXECUTIVE DIRECTOR

                              INTRODUCTION

    Senator Gregg. Mr. Chairman, we welcome you to the 
committee. We will forego opening statements on our part, and 
you tell us what you wish.

                            OPENING REMARKS

    Mr. Levitt. Just briefly, we face today a confluence of 
extraordinary forces, market growth, and the development of 
online trading, market structural changes which provide 
enormous challenges for the Commission. We believe that the 
increased funding in the President's budget will give us the 
kinds of resources we need in a number of areas, including 
disclosure operations, examinations, and technical 
infrastructure.
    There are really two areas that dominate the Commission's 
agenda: the impact of the Internet, which is evolving today, 
and the extraordinary losses in terms of personnel that the 
Commission is experiencing. It is bad enough to lose them to 
the private sector, but we are losing them to other financial 
regulatory agencies. And at this time, when we have merged 
these functions, it becomes particularly difficult for our 
people who must work closely with the Fed and the Comptroller's 
Office and other financial regulators to see staff there 
earning more money, and the consequence of that is we are 
losing staff to them.

                           PREPARED STATEMENT

    With respect to Internet fraud, we see new kinds of 
fraudulent schemes emerging. We are asking for a minimal amount 
more than this year; the $12.5 million we received in fiscal 
year 2000 was a very important first step. We hope to use our 
resources effectively. So aside from fixed costs in our IT 
program, we are requesting a small increase in Internet 
funding. In general, this is the thrust of what we are about, 
and I would be glad to answer any questions that you might 
have.
    [The statement follows:]

                  Prepared Statement of Arthur Levitt

    Chairman Gregg, Ranking Member Hollings, and Members of the 
Subcommittee: I appreciate this opportunity to testify in support of 
the Securities and Exchange Commission's (SEC or Commission) fiscal 
2001 budget. When I spoke before you last year, I described a market 
environment that was characterized by unprecedented volume, tremendous 
growth, increasing complexity, and globalization. I also indicated that 
the SEC would need multi-year increases in budget and staffing to meet 
these demands. These same forces and the increasing use of new 
technologies continue to dominate our markets and needs today.
    Recent advances now permit a variety and combination of services 
that blur the distinction between markets, intermediaries, and service 
providers. Electronic Communication Networks (ECNs) are challenging 
traditional trading floors. The nation's stock exchanges are 
considering shedding their long-held membership status. Online trading 
is empowering retail investors. Institutional trading has increased the 
demand for greater liquidity, anonymity, and even new trading venues. 
Market participants are demanding more: twenty-four hour trading, 
immediate execution of orders, and lower costs.
    It is against this backdrop that the President's fiscal 2001 budget 
request seeks an appropriation for the SEC of $422.8 million, 12 
percent above the Commission's fiscal 2000 spending level of $377 
million. This $422.8 million request will fund 3,037 staff years, an 
increase of 77 staff years (2.6 percent) over our current staffing 
levels. Our funding request covers $15.6 million in mandatory and 
inflationary expenses, $15 million to reinstitute special pay 
authority, $10 million for information systems, and $5.2 million for 
new staff. Additional staffing for our law enforcement activities will 
better enable us to detect and take action against fraudulent 
securities activity on the Internet and other online information 
services, as well as respond to continued growth and change in 
electronic forms of communication.
    Assuming we are able to retain the necessary staff in fiscal 2001, 
this request will provide the Commission with the resources necessary 
to responsibly fulfill our mission of protecting investors and 
maintaining our markets' integrity. In particular, it will allow the 
Commission to:
  --continue combatting fraudulent conduct on the Internet;
  --provide effective oversight of the increasingly complex activities 
        of regulated entities, including examining on-line and day 
        trading activities;
  --further implement a formal inspection cycle program of the 
        increasing number of alternative trading systems;
  --continue focusing on financial accounting frauds, earnings 
        management practices, and developments in domestic and 
        international accounting, independence, and auditing matters;
  --meet the anticipated workload stemming from the increasing number 
        of mergers resulting from the convergence of the gas and 
        electric markets and the globalization of the utility industry;
  --update and improve prospectus requirements for variable insurance 
        products;
  --develop a tailored disclosure document for unit investment trusts; 
        and
  --strengthen its technological infrastructure to support the agency 
        in its three most rapidly growing areas: electronic forms, 
        document and records management, and market data and analysis 
        tools.
    In requesting the funding to support these activities, however, I 
must focus on two specific areas that are dominating the Commission's 
agenda: the Internet and our inability to retain qualified staff. 
Without bringing these factors into our discussion of the SEC's budget 
needs, I believe we would fail to give a clear picture of how we plan 
to meet the challenges that lie ahead, including protecting investors 
and maintaining the integrity of our markets.

                     THE CHALLENGES OF THE INTERNET

    The Internet is having a profound effect on the way investors 
participate in the capital markets and on the Commission. By the end of 
this year, there will be nearly 5.5 million domestic online brokerage 
accounts \1\, with 20 million expected by 2003.\2\ During the first 
quarter of 1999, nearly one in six equity trades was placed through 
online brokerage accounts. For retail investors, the percentage of 
trades executed via the Internet is even higher. A November 1999 report 
by SEC Commissioner Laura S. Unger notes that more than one in three 
trades by retail investors are effected online.\3\ These numbers will 
only increase as a greater percentage of investors avail themselves of 
the economies of online trading.
---------------------------------------------------------------------------
    \1\ See Adam Zagorin, Taking Stock Scams Offline, Time Magazine, 
March 13, 2000.
    \2\ See Rebecca Bickman, What now? The growth in online investing 
heralds all sorts of changes in the near future, Wall St. Journal, June 
14, 1999.
    \3\ See ONLINE BROKERAGE: KEEPING APACE OF CYBERSPACE, Report of 
Laura S. Unger, Commissioner, U.S. Securities and Exchange Commission, 
November 1999. This Report is available online at http://www.sec.gov/
oursite/wotsacro.htm.
---------------------------------------------------------------------------
    Moreover, the Internet has changed the way investment research is 
conducted. The Internet affords retail investors easy access to all 
kinds of information, both fact (real-time stock quotes, SEC filings, 
and corporate news releases) and opinion (newsgroup or message board 
postings, Internet mailing lists, analysts' reports, website 
discussions, and chat rooms). Entire Internet communities--some with 
their own celebrity spokespersons--have grown up around particular 
industries, technologies or issuers, providing an incubator for 
investment ideas, and a forum for competing viewpoints. One of the most 
popular Internet message board services, for example, has over 13.2 
million investment-related messages available for its patrons' 
viewing.\4\
---------------------------------------------------------------------------
    \4\ See http://www.siliconinvestor.com (viewed March 14, 2000).
---------------------------------------------------------------------------

                     INTERNET AND SECURITIES FRAUD

    While the Internet has brought significant benefits to investors, 
it also has created significant dangers for the unwary. The Internet, 
coupled with the greatest bull market in history, has brought millions 
of relative novices to the markets, while also providing simple, 
effective, and anonymous ways for unscrupulous people to defraud them. 
A single mass e-mail, or ``spam,'' sent through the click of a mouse, 
can more easily and cheaply reach investors than hundreds of cold calls 
from an old-fashioned boiler room. The use of digital media also can 
lend fraudulent material an air of credibility. Someone with a home 
computer and knowledge of computer graphics can create an attractive, 
professional-looking website, rivaling that of a Fortune 500 company.
    In the earliest days of the Commission's Internet fraud program, 
the frauds that prevailed online were simply electronic versions of 
scams that had long been conducted through paper newsletters, mass 
organizational meetings, and orchestrated telephone solicitations. 
Principal among these were: stock manipulations, offerings frauds, and 
illegal touts. We continue to witness these scams, particularly 
manipulation, with too great a frequency on the Internet. For example, 
on March 2, 2000 the Commission brought a settled manipulation case 
against several Washington, D.C. area law students. We allege that one 
of the students created a website that he used to drive up the short-
term price of four stocks. According to the complaint, the student 
inflated the short-term price for each stock by as much as 700 percent. 
By trading in advance of his stock recommendations, the student 
generated over $345,000 in total profits for himself, his mother, three 
of his law school classmates, and two of his friends.
    As the Internet has evolved, however, so too has Internet fraud. 
New fraudulent schemes have begun to emerge, such as: momentum trading 
websites, day trading recommendation websites, recommendation scalping, 
imposter message board frauds, and messages that appear to be 
misdirected. These scams often result in sizable investors losses. One 
purported pyramid scheme offered through the Internet, for example, 
raised more than $150 million from over 155,000 investors before the 
Commission shut it down. In another action, a popular online stock 
touter, whom the Commission recently charged with improperly trading 
ahead of his stock recommendations to the detriment of his subscribers, 
maintained a website with 3,800 paying members.

                              SEC APPROACH

    The Commission's ongoing program to fight Internet securities law 
violations is a team effort, in which every Division and Office plays a 
significant part. Since it is charged with uncovering, investigating 
and litigating Internet cases, however, the lead role in combatting 
online fraud is played by the Division of Enforcement. The SEC brought 
its first Internet enforcement action in 1995. While the amount of any 
fraud is impossible to quantify with precision, based on our 
surveillance and the number of complaints we receive, Internet 
securities fraud is on the rise. To date, the Commission has filed 
approximately 120 Internet actions--most in the last two years--
alleging securities law violations by hundreds of persons and entities.
    In July 1998, as a result of the Internet's growing importance and 
the rising incidence of Internet fraud, a formal Office of Internet 
Enforcement (``OIE'') was created within the Enforcement Division. OIE 
began serving primarily as a coordinator of the Commission's Internet 
program and as a liaison with other regulatory and criminal law 
enforcement agencies at the federal, state, and local levels.
    Between the spring of 1999 and the present, OIE has grown from 
three to 13 attorneys, with experience and expertise in a wide variety 
of areas pertinent to Internet enforcement. OIE's current functions 
include:
  --identifying areas for surveillance and conducting surveillance,
  --analyzing the complaints we receive from our online Enforcement 
        Complaint Center (``ECC''),
  --formulating investigative procedures,
  --coordinating Internet initiatives,
  --conducting staff and outside law enforcement training,
  --engaging in special projects,
  --ensuring staff compliance with federal communications privacy 
        statutes and applicable laws, and
  --working on Internet matters for the entire Commission.
    Alongside OIE is the so-called ``Cyberforce''--approximately 240 
Commission attorneys, accountants, and investigators nationwide--whose 
purpose is to conduct regular Internet surveillance. Cyberforce members 
dedicate a portion of their work week to surfing the Internet, 
developing leads for potential enforcement cases. The Cyberforce also 
participates in coordinated surveillance projects both within the SEC 
and with other federal agencies, such as the law enforcement ``surf 
days'' orchestrated over the past three years by the Federal Trade 
Commission.

                        COMMITTEE RESPONSIVENESS

    With the vital support of this Committee and Chairman Gregg, the 
Commission has made immediate strides in its Internet initiatives. In 
November 1999, the Commission received a fiscal 2000 appropriation that 
provided an additional $7 million over our request which supplemented a 
reprogramming of an additional $5.5 million specifically to combat 
Internet fraud. These funds are being spent both to augment the staff 
investigating online securities law violations and otherwise studying 
aspects of the electronic marketplace, and to supplement and improve 
the technological systems that support those staff members. Already the 
Commission has turned these dollars into tangible additions to its 
Internet program. We have created 92 positions for our Internet fraud 
program with these funds. Seventy-five of these positions have been 
assigned to our Division of Enforcement and 17 have been assigned to 
aid other offices and divisions in their Internet-related efforts. In 
addition, staff currently is evaluating contractor proposals to provide 
technological assistance in our surveillance of the Internet, in 
response to a request for proposals that we issued in January.
    Most of the new Enforcement staff will spend all of their time 
investigating and prosecuting Internet fraud. Among these 75 positions, 
23 have been allocated to our headquarters in Washington, D.C. and the 
remaining 52 positions to our regional offices throughout the country. 
The 17 positions allocated to the other divisions and offices will be 
used for a variety of purposes, including bolstering our inspections 
and examinations of regulated entities operating online, developing 
policies for the securities industry's use of the Internet, and 
furthering investor education and assistance. These additional 
resources no doubt better equip us to prosecute Internet-related 
securities fraud and keep the Internet safe for investors.
    As the Commission enters the new millennium, profound changes are 
drastically reshaping the securities industry, and compelling the 
agency to reassess traditional approaches to its mission of investor 
protection. In order to fulfill that mission, the SEC must be forward-
looking, strive to anticipate issues and challenges, and welcome new 
ideas and new strategies for meeting those challenges. The $12.5 
million we received in fiscal 2000 for combatting Internet fraud was a 
critical first step in this direction. We intend to build on our past 
achievements, refine those practices that continue to serve us well, 
and introduce new methods that will make us even more responsive to 
changes in law and technology. Equally important, we intend to work 
responsibly with the resources we have been given. For this reason, 
aside from fixed costs and our information technology program, we have 
requested only a minimal increase above our fiscal 2000 level to fund 
our Internet activities in fiscal 2001. We also are requesting only a 
small increase in Internet funding because we cannot do more without 
being able to retain and recruit staff, which brings me to the second 
issue we would like to discuss today.

                            STAFFING CRISIS

    The SEC is in the midst of a serious staffing crisis. On February 
24, I wrote a letter to you, Committee Chairman Stevens, Ranking Member 
Byrd, and the Congressional leadership alerting you to our inability to 
retain staff. This problem goes to the very heart of the agency's 
ability to oversee the nation's growing securities markets and to 
protect America's savers and investors. In the last two years, the 
Commission has lost 25 percent of its attorneys, accountants, and 
examiners. (In fiscal 1999, we lost 13.5 percent of our attorneys, 16.8 
percent of our accountants, and 9.9 percent of our examiners.) Our 
overall attrition rate was 13 percent--nearly twice the government-wide 
average, and our largest regional office alone lost a devastating 20 
percent of its attorney workforce.
    The Commission is losing staff before they become fully productive 
because we cannot pay them enough. In a world where first-year 
associates are routinely making six-figure salaries in Washington, D.C. 
law firms, the salaries the SEC can provide simply are not competitive 
to attract and retain a sufficient number of talented professionals to 
reduce high turnover, let alone to fill open positions. While we fully 
recognize that the SEC cannot match the higher salaries offered by 
brokerages, law firms, self-regulatory organizations, and other 
securities-related businesses, something needs to be done to narrow the 
pay gap and reduce the turnover problems we face.\5\ Practically every 
day at least one of my senior managers comes to me expressing his or 
her frustration in not being able to keep tomorrow's leaders.
---------------------------------------------------------------------------
    \5\ The Commission recently contracted for a study comparing the 
significant disparity between SEC salaries and what the private sector 
offers for the same line of work. We would be happy to share the 
results of that study if you think it would be helpful in highlighting 
the magnitude of our problems.
---------------------------------------------------------------------------

                        EFFECT ON THE COMMISSION

    Our current level of turnover and inability to attract qualified 
staff is threatening our ability to oversee the nation's securities 
markets and to respond in a timely manner to the changing events and 
innovations in our markets by:
  --hampering our ability to bring cases to trial and disrupting the 
        continuity we need when pursuing cases;
  --hindering us from responding to changing markets in a timely 
        fashion, including through targeted de-regulatory efforts;
  --limiting our institutional memory, which is a crucial component of 
        our long-term effectiveness as a regulator; and
  --lowering employee morale, which in turn reinforces the staffing 
        crisis.
    We also become less productive. SEC staff work hard and well to 
handle the Commission's increasing, and increasingly complex, workload. 
The time that our managers and senior staff can devote to this workload 
is, however, reduced by the time it takes to recruit and train new 
staff. The SEC conservatively estimates that it takes approximately two 
years for new staff to become fully productive. During this period, new 
staff are actually a drag on the efficiency of the agency because they 
are still moving up the learning curve. If these staff leave just as 
they become fully productive to the agency, we do not recover our 
substantial investment in training them. That is a loss not only for 
us, but also for the investing public and our markets.

                           RETENTION EFFORTS

    Over the past several years the Commission has explored virtually 
every available approach to keeping staff longer. In 1992, we 
petitioned and received from the Office of Personnel Management the 
authority to pay the majority of our attorneys and accountants 
approximately 10 percent above their base pay. While special pay was a 
step in the right direction, it proved to be a short-term solution. 
This is because staff that receive special pay do not receive the 
government-wide locality increase each year, which means that their 
special pay becomes less valuable over time (it is now almost entirely 
superseded by locality pay) and hence becomes less effective as a 
retention tool. In addition to our special pay authority, which the 
President's fiscal 2001 budget requests the funds to reinstate, the 
Commission has used retention allowances and economist special pay to 
help alleviate our retention problem. While all of these tools have 
proved somewhat effective when targeted to specific staff and 
situations, we believe they are incapable of providing the broad relief 
that we need to combat the Commission's losses and treat all staff 
fairly.

                              RECRUITMENT

    The SEC also is facing a problem recruiting attorneys and 
accountants. We have used recruitment bonuses where possible, but have 
not met with much success. A typical first-year associate in a top-tier 
New York or Washington D.C. law firm makes at least double the salary 
of a comparable staff attorney at the SEC. The costs of three years of 
law school leave most graduates entering the job market with 
significant amounts of student loan debt. It is not difficult to 
understand why the private sector looks so appealing.
    Our problem is even worse for accountants, who need to be 
experienced when they walk in the door. This is of particular concern 
in an era where financial fraud and earnings management has been on the 
rise. Experienced accountants are difficult to find and expensive to 
hire because their ability to analyze complex financial statements is 
highly prized. We do not have the luxury, if you can call it that, of 
being able to take someone directly out of school. The Commission has 
attempted to ameliorate this problem by developing an ``in-service'' 
placement program that allows certain Securities Compliance Examiners 
to be reassigned as accountants if they meet specific criteria, but 
even this effort has fallen short. In fact, last year only 46 percent 
of our available accountant positions were filled. The Commission needs 
the ability not only to keep staff longer, but also to bring them to 
the Commission in the first place.

                   PARITY WITH THE BANKING REGULATORS

    Another real concern the Commission has about staff salaries is the 
effect of the landmark Gramm-Leach-Bliley Act of 1999 (``GLBA''). By 
allowing securities firms, banks, and insurance companies to affiliate 
with one another, GLBA requires increased coordination of activities 
among all the financial regulators. Even more so than in the past, 
Commission staff will work side-by-side with their counterparts from 
the banking regulatory agencies, like the Federal Reserve, the Office 
of the Comptroller of the Currency, and the Federal Deposit Insurance 
Corporation (``FDIC''). However, we cannot match the salaries that 
these regulators pay.
    Since all of the federal banking regulators are exempted from the 
standard government-wide pay schedule established under the civil 
service laws, they are able to provide their staffs with appreciably 
more in compensation and benefits than we can. While the maximum salary 
for a second-year attorney at the SEC, for example, is $66,000, an FDIC 
attorney with similar levels of experience, technical skills, and 
responsibilities can be paid as much as $91,000. This is a significant 
drain on morale. It is difficult to explain to SEC staff why they 
should not be paid at similar levels, especially when they are 
conducting similar oversight, regulatory, and examination activities. 
It is one thing for staff to make salary comparisons with the private 
sector, but quite another for them to see their government counterparts 
making anywhere from 24 to 39 percent more than they are. Moreover, the 
Commission has already seen several staff leave to take positions with 
these agencies, primarily because of pay. Unless we are put on equal 
footing, this trend will continue and most likely intensify.
    Given the complexities of our markets and the new business 
affiliations we are likely to see, the SEC believes it is most 
beneficial to have all the financial regulators working together from 
the same starting point. Towards that end, the Commission believes that 
providing our staff with pay comparable to the banking regulatory 
agencies would significantly help in extending the tenures of key 
employees and help the Commission attract sufficient staff in the first 
place.

                        THE AGENCY AND ITS STAFF

    The SEC should be a place where highly motivated people come to 
perform public service and hone their skills, both before entering the 
private sector and after a stint in the private sector. Such career 
paths speak highly of the Commission's professionalism and the 
industry's regard for the agency and its staff. However, the Commission 
should be able to keep staff for a minimum of three to five years 
before they leave, and show existing staff how much their efforts are 
valued. The SEC can ill afford to have its future walk out the door. 
Moreover, we need to ensure that the Commission has the staffing 
resources to meet the significant regulatory challenges that lie ahead 
as technology in general, and the Internet in particular, continue to 
re-shape our markets.

                      PROPOSALS TO PROVIDE RELIEF

    The President's fiscal 2001 budget request includes $15 million to 
reinstitute 10 percent special pay for certain attorneys and 
accountants. As I stated before, we previously had this authority and 
used it in conjunction with recruitment bonuses, retention allowances, 
and other retention tools. However, we do not believe that bringing 
back special pay will be sufficient to resolve our staffing problem. A 
legislative solution that would provide the Commission with the same 
pay authority as the banking agencies is vital. I have been discussing 
our need for pay relief with the Banking Committee and the 
Administration. I hope we can all work together to attract and keep the 
best possible professionals at the SEC. I cannot emphasize too strongly 
the importance of this issue as it relates to our mission of protecting 
investors and ensuring market integrity.

                               CONCLUSION

    The Commission applauds the support that this Committee has given 
us to respond to the changing face and form of our nation's securities 
markets. Our fiscal 2001 request for $422.8 million will go a long way 
toward enabling the Commission to fulfill its mission of protecting 
investors and maintaining the integrity of our markets as they continue 
to dramatically change. In addition, we are dedicated to making the 
Internet a safe medium for investors and are grateful for the support 
that this Committee has given us in helping pursue this objective. At 
this time, our most significant challenge is to ensure that the 
Commission maintains the skills, abilities, and expertise necessary to 
address the tremendous and competing demands presented by the industry 
with which we work. For this reason, we look forward to working with 
you to obtain the fiscal 2001 funding level we need and the pay 
authority essential to keeping the people necessary to fulfill our 
mission of keeping our nation's securities markets the safest, fairest, 
and most liquid in the world.

                             internet fraud

    Senator Stevens. I have got to get back.
    Senator Gregg. Go ahead.
    Senator Stevens. May I just ask one question? That is, how 
much of this is allocated to Internet fraud? I think we are all 
hearing more and more about that.
    Mr. McConnell. We have a total in the year 2000 of $12.5 
million, and new money was added. That is in our base for 2001. 
But that is only sort of the tip of the iceberg. We have about 
200 staff people or more that are working on Internet cases.
    Mr. Levitt. And a special division within the Enforcement 
Division that does nothing but Internet cases. That has grown 
from just a handful to approximately 14 full-time employees.
    Senator Stevens. Is it well known that you have some remedy 
for people who may be injured, that you will investigate it and 
bring some of those people to justice?
    Mr. Levitt. I think we have brought 170 Internet-related 
cases, so that I think word is getting out there. I can't say 
that we can convince the public that we have total control of 
this because we are experimenting with new kinds of 
technologies to surveil the Internet. Our people are gaining 
experience, but there is so much of it out there that the best 
way to approach it, we believe, is to try to identify the kinds 
of cases that represent the greatest amount of fraud and bring 
them and publicize them aggressively.
    Senator Stevens. Do you think this is the kind of thing 
that compels a beef up of the Better Business Bureaus at the 
local level? I don't know anyone out my way who is watching 
fraud. I don't think our local district attorneys and only 
fraud enforcement people have the capability to keep track of 
Internet fraud.
    Mr. Levitt. We see the greatest amount of interest and help 
in this coming from the State securities regulators. They are 
beginning to focus on this aggressively, and working with them 
we feel is a very constructive way of helping the public.
    Senator Stevens. I have to get out of here, but keep us 
informed. We are on the Commerce Committee together. I think we 
would like to get involved in that. Internet fraud is going to 
get bigger and bigger because there are just too many people 
who really don't know too much about computers trying to get 
into the Internet business. We are very interested in that.
    Thank you very much, Mr. Chairman.

                RESOURCES FOR INTERNET FRAUD ENFORCEMENT

    Senator Gregg. Thank you, Mr. Chairman.
    Let me reinforce the chairman's comments. As far as I am 
concerned--and I am sure this whole committee is concerned--we 
want to give you all the resources you need in order to 
adequately address the Internet, or anything else you have to 
address. In my opinion, resources should not be an issue with 
your agency, not only because you generate a huge amount of 
fees, which means you are running a fairly considerable surplus 
with the Treasury, but second because, as we have discussed 
before, the integrity of the capital markets is critical to the 
prosperity of this Nation. So you tell us what you need, and we 
will try to meet those requests.

                        PAY PARITY FOR SEC STAFF

    Mr. Levitt. I really appreciate your continuing support of 
this effort. Our greatest, our most compelling need at this 
point is the ability to get pay parity for our employees, and 
it has been so frustrating in terms of the way the process 
works. We have to bring on board not just this committee but 
also the House Commerce Committee, also the White House, and 
meanwhile we have employees watching every bit of testimony, 
every nuance of staff members in these different agencies that 
impact this decision. And in the meantime, they are being 
seduced by offers from other financial regulators as well as 
from the private sector.
    Senator Gregg. Well, it is my understanding that we are 
going to have in our bill a package that your agency is 
developing to address pay parity. We are just going to put it 
in the bill and appropriate and authorize around that.
    I don't think you are going to have any problems on the 
Senate side on this issue. Maybe there are issues on the House 
side. Maybe there are issues at the White House. As far as I am 
concerned, this is critical. We may use your package as a 
demonstration because there are other agencies similar to 
yours, such as the FCC, that have the same problem.
    We have tried to address a different approach with the FBI, 
for example. They have very serious problems over there with 
keeping technology personnel.

              SEC'S FISCAL YEAR 2001 BUDGET REQUEST TO OMB

    The chairman asked you about Internet fraud. You have 
obviously got a division that is up and running. When you put 
your request into OMB, was there any adjustment of the request 
in this area, or are you getting what you think you need?
    Mr. McConnell. They reduced it slightly to accommodate the 
special pay rate increase. They reduced the staffing slightly 
to accommodate that. But it was by and large as we requested.
    Senator Gregg. Maybe you could get us the numbers that you 
are actually requesting.

                     ELECTRONIC MARKET DEVELOPMENT

    Do you expect the New York Stock Exchange and the NASDAQ to 
merge? If so, what does that mean?
    Mr. Levitt. I don't see the likelihood of that occurring in 
the short term. The NASDAQ appears intent with going ahead with 
their private placement. If you asked me to look ahead over the 
course of the next 5 years, I think it is a distinct 
possibility that major U.S. markets, in an effort to combat 
what I believe would be growing electronic markets all over the 
world, will very seriously consider formal affiliations of one 
kind or another, in my judgment.
    Senator Gregg. Do we need any securities law restructuring 
to address this electronic market development?
    Mr. Levitt. I think the market itself will bring about 
these changes. I am just hopeful that the kind of arcane 
governance structure that our two major markets employ with 
using--needing membership votes, with an ownership structure 
that in many instances is not even in the industry, I hope that 
they can be persuaded that they have to reinvent themselves to 
compete against profit-making enterprises that can adjust to 
change with greater flexibility and shorter time frames. If 
they don't, I think there is a real chance that our major 
markets could lose a substantial part of their order flow to 
new electronic markets and new exchanges that are developing 
all over the world.
    Senator Gregg. Would you give me an example of an 
electronic exchange that you see represents a potential out-
year threat?
    Mr. Levitt. Well, I think some of the electronic markets 
that are applying to us for exchange privileges--Archipelago is 
one. There are three electronic markets that want to become 
exchanges here in this country. There are some springing up in 
Europe. We read today in the paper about three major European 
markets that will be restructured as for-profit operations. 
Frankly, I think the for-profit model is far better able to 
compete than the membership model. They are focusing on the 
right things. They are allowing market forces to operate in a 
way which will stimulate competition and innovation. And I wish 
our markets could think and operate in that fashion. It is very 
difficult.
    Senator Gregg. This won't affect registration, will it?
    Mr. Levitt. I don't think so. I think that that is a 
different issue. Registration will be impacted by accounting 
rules, whether we are able to embrace and harmonize the 
accounting rules which will enable more companies and foreign 
domains that have different accounting structures to list on 
U.S. exchanges. We are doing everything we can to force that to 
happen.

                  THE INTERNET AND FILING REQUIREMENTS

    Senator Gregg. To what extent is the Internet being used as 
a disclosure vehicle in the area of filing requirements with 
the SEC?
    Mr. Levitt. I think the Internet on balance is an 
enormously positive vehicle to inform investors, to provide 
information of all kinds to enable companies to use it to raise 
capital themselves. We are going to see more of that, used as a 
trading device where customers can develop their own 
strategies. Our own EDGAR system will enable companies to file 
for offerings.
    On the other side, of course, it provides a vehicle for 
fraud, and, in my judgment, the best way to arm American 
investors is not necessarily to think that regulation alone can 
do that, but to try and educate investors to be wary of the 
dangers of this, and, in a market as heated as our present 
market is and where investors are becoming much more emotional 
than intellectual about their decisions, that task is a huge 
task.

          INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS

    Senator Gregg. Is there a formally structured international 
relationship between the various securities and exchange 
commissions around the world, the key ones, Hong Kong and 
Europe?
    Mr. Levitt. There is a formal organization called IOSCO, 
the International Organization of Securities Commissions, which 
over the years has become more and more like a United Nations. 
Because of that, we have formed an organization or an informal 
gathering of Tokyo, the United Kingdom, Germany, Italy, France, 
and Hong Kong that meets generally on a quarterly basis. What 
is really important about that is that if there is a systemic 
problem that develops anyplace in the world, I know that I can 
trust my Hong Kong counterpart and my Tokyo counterpart knows 
that he can trust me, and that exchange of information is about 
the best thing we can do to protect against systemic problems. 
That is going on, and I think it is a very effective protection 
for not just our markets but for the globalized markets that 
have developed.

                             DECIMALIZATION

    Senator Gregg. How successful have the exchanges been in 
getting ready for a cyber event of a terrorist type?
    Mr. Levitt. Well, a major cyber event coming down the pike 
is decimalization, and I think the industry, having come 
through the year 2000 successfully, is probably going to be 
ready for the July target date. The NASD [National Association 
of Securities Dealers, Incorporated] has asked us to delay that 
because of the unprecedented volume they are experiencing. The 
New York Stock Exchange has told us that they probably will be 
ready. I think it would be confusing to American markets to 
allow one of them to convert to decimals and the other not, so 
we are in the process now of surveying the markets to determine 
when all of them will be ready to move to decimalization, which 
I think is a critically important factor to be accomplished as 
quickly as possible. It would save American investors money.

                   SEC PREPAREDNESS FOR CYBER ATTACKS

    Senator Gregg. How about the potential for a cyber attack 
which was meant to disrupt the exchanges, a terrorist type of 
attack?
    Mr. Levitt. All of the exchanges have security programs and 
backups. Some use so-called tiger teams to test for 
vulnerability. I believe that more work has to be done, but I 
think that, having run one of those institutions myself, I know 
that they are focusing resources on that and developing 
backups, which I think is critically important.
    Senator Gregg. Are they coordinating with the cyber 
infrastructure efforts that are going forward on the Government 
level, such as the FBI?
    Mr. Levitt. Yes. Yes, they are.
    Senator Gregg. So that is a coordinated effort?
    Mr. Levitt. Yes.

                               SECTION 31

    Senator Gregg. Is there anything you want to tell us about 
Section 31, or should we just omit that?
    Mr. Levitt. Well, the various recommendations on Section 31 
have to run the gamut, as you know, of getting through this 
committee and through administration approval and trying to 
coordinate with the bill that Senator Gramm has introduced and 
the bill that will emerge from the House Commerce Committee.
    We are trying to be sensitive to all of the concerns that 
various parties have as this bill plays out, so we are not 
waving a flag at this point, not charging ahead. We are trying 
to work with all elements and trying to preserve pay parity, 
which appears to be an element of all proposals.

                           CONCLUDING REMARKS

    Senator Gregg. Anything else?
    Mr. Levitt. Just to express my deepest and most sincere 
appreciation for your sensitivity and your understanding and 
your willingness to focus on the needs of American markets and 
investors.
    Senator Gregg. Well, you do a wonderful job for us, and we 
appreciate it. And you have a superb agency, and we want to 
make sure it stays that way. So whatever we can do to help, we 
are willing to put our oar in the water.
    Mr. Levitt. Thank you very much.
    Senator Gregg. Thank you, Mr. Chairman.
    [The following questions were not asked at the hearing, but 
were submitted to the Commission for response subsequent to the 
hearing:]

           Questions Submitted by Senator Frank R. Lautenberg

    Question. Mr. Chairman, the Internet has revolutionized the way 
Americans invest in our capital markets. Over the past year, 
traditional brokerages have transformed their businesses from telephone 
consultations between brokers and investors to online investing where 
the mouse and the computer modem have become the method for trade. What 
steps have you taken to reassure online investors that they will be 
protected from dishonest brokerages and fraudulent trading operations?
    Answer. The brokerage industry clearly has embraced digital 
technology. A November 1999 report by Commissioner Laura S. Unger 
estimated that over 160 brokerage firms offered their customers the 
ability to trade securities online; \1\ Internet experts have predicted 
that half of all retail trades will be executed online by the end of 
next year.\2\ The Commission generally views the evolution of the 
brokerage industry and its adoption of new technology as positive 
developments, providing investors greater, more cost-effective access 
to the capital markets. The Commission is mindful, however, that the 
ease of access offered by online trading creates potential dangers for 
novice investors. The Commission is working diligently to keep apace of 
the ongoing changes in the industry, and to protect investors from 
these pitfalls.
---------------------------------------------------------------------------
    \1\ See ONLINE BROKERAGE: KEEPING APACE OF CYBERSPACE, Report of 
Commissioner Laura S. Unger of the Securities and Exchange Commission, 
November 1999, at pp. 3-4 (citing research of CS First Boston and U.S. 
Bancorp Piper Jaffray).
    \2\ Ibid. n. 4 at p. 125 (citing research of Forrester Research, 
Inc.).
---------------------------------------------------------------------------
    As a part of this effort, we have taken steps to gather information 
about online brokerage firms and their practices. Between April and 
June of 1999, the Commission's Office of Compliance Inspections and 
Examinations (OCIE) conducted 38 special-purpose examinations of online 
brokerage firms. At the time of this sweep, the 38 firms represented 
about 25 percent of the online brokerage industry. The staff selected 
for examination a cross-section of the industry, including major 
brokerage houses and small boutique firms. These examinations gave the 
staff a comprehensive picture of how online firms operate and the 
problems they and the investors who use them face. The examinations 
also enabled the Commission's staff to identify areas of potential 
regulatory concern.
    Similarly, from October 1998 through September 1999, OCIE conducted 
an examination sweep of 47 registered broker-dealers providing day-
trading facilities to the public. Findings from this day-trading sweep 
are published in the Commission's ``Report of Examinations of Day-
Trading Broker-Dealers,'' dated February 25, 2000, which was recently 
presented to the Senate Permanent Subcommittee on Investigations by 
OCIE's Director Lori Richards. While the day-trading sweep did not 
reveal widespread fraud,\3\ examiners found some indications of 
significant regulatory violations that warranted referrals to the 
Commission's Enforcement Division. These referrals related to potential 
net capital, margin and lending disclosure violations, and have already 
resulted in several enforcement actions, including actions against All-
Tech Direct and Investment Street Company. The cease-and-desist 
proceedings against these two day-trading firms charged violations of 
federal margin lending provisions.\4\
---------------------------------------------------------------------------
    \3\ ``Report of Examinations of Day-Trading Broker-Dealers,'' 
Office of Compliance Inspections and Examinations, U.S. Securities and 
Exchange Commission, February 25, 2000 at p.2.
    \4\ In the Matter of All-Tech Direct, Inc., et al., Admin. Proc. 
File No. 3-10150 (February 22, 2000); In the Matter of Investment 
Street Company, et al., Admin. Proc. File No. 3-10151 (February 22, 
2000).
---------------------------------------------------------------------------
    In addition to identifying regulatory violations, we also have 
detected fraud in the form of false advertising. Certain firms have 
overstated the successes their clients have enjoyed, in an effort to 
entice new clients to trade through them. Last month, the Commission 
filed and settled civil fraud charges against David A. Rudnick and his 
company, DynamicDaytrader.com, an Internet website that provided real-
time stock recommendations to day-traders on a subscription basis. The 
Commission's complaint alleged that Rudnick and his company violated 
the antifraud provisions of the federal securities laws by, among other 
things, posting significantly inflated claims of investment returns on 
stocks the site recommended. The Commission obtained an injunction 
against further violations of the antifraud provisions by Rudnick and 
his company, as well as disgorgement of $40,107 in subscriber 
membership fees plus prejudgment interest and a $15,000 civil monetary 
penalty against Rudnick's company. We think this case, and others like 
it, sends a strong message that the Enforcement Division will take 
quick and decisive action to halt activities intended to deceive online 
investors.
    The Commission's Enforcement Division continues to monitor, 
investigate and, where appropriate, prosecute perpetrators of all types 
of online investment fraud, including frauds perpetrated by individuals 
and entities outside of established firm structures. For example, the 
Commission recently sued a group of individuals who reaped illegal 
profits by improperly trading in advance of online recommendations.\5\ 
Through statements published on the stock recommendation site Fast-
Trades.com, the defendants manipulated the price of several featured 
securities, leaving investors with serious losses. The Commission in 
settlement obtained a final judgment permanently enjoining the scheme's 
principal architect from further manipulative conduct, and a cease and 
desist order barring four other defendants from future violations of 
the federal antifraud provisions.\6\
---------------------------------------------------------------------------
    \5\ SEC v. Douglas W. Colt, Civil Action No. 1:00CV00423 (D.D.C. 
March 2, 2000).
    \6\ In the Matter of Kenneth Terrell, et al., Admin. Proc. File No. 
3-10154 (March 2, 2000).
---------------------------------------------------------------------------
    As I have often said, the best defense against this kind of online 
fraud is a well-educated investor. Consequently, we have enlisted our 
Office of Investor Education and Assistance in an agency-wide effort to 
spread the word on the risks presented by online investing. The SEC's 
popular Internet website \7\ contains a wealth of information on this 
topic.\8\ In addition, we have incorporated discussions of day-trading 
and online trading into the numerous Investor Town Meetings at which 
members of my staff and I discuss investment topics with the public. 
One such meeting recently was held online, giving everyone with a 
computer the opportunity to attend and hear the Commission's cautionary 
discussion of the potential dangers of Internet investing. Ultimately, 
the best way to protect online investors is by helping to educate them, 
and we continue to work aggressively toward that goal.
---------------------------------------------------------------------------
    \7\ http://www.sec.gov.
    \8\ The Commission's website contains a number of useful resources 
for investors seeking to educate themselves about the benefits and 
hazards of online trading. Among these are transcripts of talks by 
Chairman Arthur Levitt, Jr. concerning ``Plain Talk About On-line 
Investing'' (May 1999) and ``On-line Trading'' (January 1999) (both 
available through the Enforcement Division's web page of Internet-
related announcements, http://www.sec.gov/enforce/intrela.htm), as well 
as the Office of Investor Education and Assistance's informative web 
page concerning ``The Internet and Online Trading,'' available at 
http://www.sec.gov/consumer/jneton.htm (updated September 30, 1999).
---------------------------------------------------------------------------
    In summary, the Commission intends to keep abreast of the latest 
innovations in electronic brokerage, to monitor firms that conduct 
online operations, to assess the risks presented to investors and, 
where regulatory or enforcement action is warranted, to move decisively 
to address wrongdoing.
    Question. Over the past year, several organizations and Wall Street 
have made an effort to increase access to capital for minority owned 
businesses and financial services firms. What efforts do you think will 
be most effective at increasing opportunities for minorities in the 
securities industry?
    Answer. The SEC believes that the primary key to increasing 
opportunities for minorities in the securities industry is education; 
in particular, promoting the benefits of investing and careers in the 
securities industry. Towards this end, the Commission has pushed Wall 
Street firms to mentor students, increase recruitment activity at 
colleges and universities with large minority enrollments, increase 
business activity with minority owned firms, and provide financial 
services in under serviced areas. The Commission intends to keep this 
issue in the forefront and develop new initiatives to attract 
minorities to the securities industry.

                          SUBCOMMITTEE RECESS

    Senator Gregg. If there is nothing further, the 
subcommittee will stand in recess.
    [Whereupon, at 10:58 a.m., Tuesday, March 21, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

                         DEPARTMENTAL WITNESSES

    [The following testimonies were received by the 
Subcommittee on Commerce, Justice, and State, the Judiciary, 
and Related Agencies for inclusion in the record. The submitted 
materials relate to the fiscal year 2001 budget request for 
programs within the subcommittee's jurisdiction.]

                             THE JUDICIARY

 Prepared Statement of John G. Heyburn, II, Chairman, Committee on the 
            Budget, Judicial Conference of the United States

                              INTRODUCTION

    Mr. Chairman and Members of the Subcommittee, I want to thank you 
for giving me the opportunity to testify on the judiciary's fiscal year 
2001 budget request. It is a pleasure to return for my fourth 
appearance before you and the other members of the subcommittee.
    With me today are Judge Robert C. Broomfield of the United States 
District Court for the District of Arizona, who is also a member of the 
Budget Committee; Leonidas Ralph Mecham, Director of the Administrative 
Office of the United States Courts, and a member of the Judicial 
Conference Executive Committee; and Judge Fern Smith, the Director of 
the Federal Judicial Center, who is appearing before you for the first 
time. Last year the Chief Justice and Board of the Federal Judicial 
Center selected her to succeed Judge Zobel as Center Director. Judge 
Smith has been a federal district judge since 1988.
    Before addressing our fiscal year 2001 request, I would like to 
first express my sincere appreciation to you, Mr. Chairman, the Members 
of the Subcommittee, and your dedicated staff, for the thoughtful 
consideration you have given the judiciary's budget requests and other 
needs throughout the year.

                            BUDGET OVERVIEW

    The judiciary's fiscal year 2001 budget is a very modest request 
considering rising caseloads. We request a $363 million increase in 
obligations, or 8.5 percent over the fiscal year 2000 level. The 
majority of the request ($258 million or 6.0 percent) funds base 
adjustments to continue current operations. The remainder ($105 million 
or 2.5 percent) would provide some additional resources to courts 
experiencing workload increases, especially those on the southwest 
border, which are in a crisis situation. A detailed explanation of our 
fiscal year 2001 request is included as an Appendix.
    The courts have experienced a dramatic increase in overall 
workload, particularly in the criminal area over the last four years.
  --Criminal filings increased 28 percent;
  --Criminal defendants filed increased 23 percent;
  --Criminal Justice Act representations increased 21 percent;
  --Pretrial services reports to the courts increased 24 percent; and
  --Offenders under supervised release increased by 12 percent.
    However, as the following chart indicates, because of funding 
constraints, funded court support staff required to handle this 
tremendous growth in workload has actually declined during this period. 
At a time when Congress continues to provide more resources to the 
Department of Justice, overall funded court staff are declining by 3 
percent from 20,732 work units in fiscal year 1998 to 20,092 in fiscal 
year 2000. For fiscal year 2001, we are asking Congress to provide for 
a funded court support staffing level of 21,681. This is only 5 percent 
above fiscal year 1998 funded levels, a very modest increase when 
compared to the 28 percent increase in criminal filings. The majority 
of the staffing increase is for probation and pretrial services 
officers to handle the growing criminal workload, especially on the 
southwest border.

[GRAPHIC OMITTED]

                        SOUTHWEST BORDER CRISIS

    We need additional funding for all courts experiencing growing 
workloads. Those funds are most needed along the southwest border. The 
districts of Arizona, California Southern, New Mexico, Texas Western, 
and Texas Southern have experienced an explosion of criminal workload 
over the past few years. These increases are attributed to increases in 
law enforcement resources at the border. Over the last five years, the 
number of border patrol agents increased by 99 percent; INS agents, 93 
percent; and DEA agents, 155 percent.
    Not surprisingly during that time period, the criminal caseload in 
the five border districts, mostly drug and immigration cases, has 
exploded, increasing by 122 percent. Criminal case filings in these 
border courts, as a percentage of total criminal cases filed, have 
steadily increased each year from 16 percent of the national total, to 
the current level of 27 percent. As the following chart indicates, 
total criminal case filings in the five border courts have more than 
doubled, from 7,280 to 16,180.

[GRAPHIC OMITTED]


    The workload on the southwest border is directly affected by 
increases in the resources of the Department of Justice (DOJ). For 
fiscal year 2001, DOJ has requested even more FBI, DEA, and INS 
personnel, as well as a 3 percent increase in U.S. Attorney staff. Even 
if Congress provides DOJ with no additional increases in personnel, the 
workload will still remain at extraordinarily high levels in the courts 
along the border.
    Because of limited funding availability, overall funded staffing 
levels declined in the last two years. Nevertheless the Judicial 
Conference took unprecedented steps to recognize the dramatic and 
disproportionate increase in workload along the southwest border. For 
the past two years, we have made across-the-board cuts to nationwide 
court allotments in order to provide some immediate, albeit partial, 
relief to these five border districts and other courts with 
extraordinary workload growth.
    These staff increases for the border districts were not without 
cost. During the period when funded staff for the southwest border 
courts grew by 11 percent, the remaining courts throughout the country 
had to operate with a 4 percent reduction in funded staff. I would note 
that total workload outside the southwest border was not declining--
there was a 12 percent increase in criminal caseload during this time. 
Some districts experienced much more dramatic increases. For example, 
criminal filings in Utah increased 84 percent, Illinois Southern 
increased 82 percent, Iowa increased 49 percent and Kentucky Eastern 
increased 33 percent. Our judicial system cannot continue to operate 
effectively by ``robbing Peter to pay Paul'', particularly where doing 
so does not fully address Paul's needs.
    Over the past several years the Congress has chosen to make 
enforcement of our drug and immigration laws a high priority. The law 
enforcement personnel you have funded are doing their jobs as evidenced 
by the explosion in the criminal caseload. We now have an imbalance in 
the system that only Congress can address.
    The long-term solution is to fully fund the judiciary's modest 
budget request for fiscal year 2001. Under our system of distributing 
funds to the courts according to work measurement formulas, a fully 
funded budget will direct available resources to the southwest border 
courts, which are experiencing the greatest workload growth. This will 
allow courts to staff up to a level that will:
  --allow probation and pretrial services officers to adequately 
        supervise federal offenders and defendants, including 
        conducting substance abuse screening, and prepare thorough 
        reports that form the basis for federal sentencing. Along the 
        southwest border, probation officers have reduced their 
        supervision of criminal felons released from prison in order to 
        write the presentence reports required for criminal trials. 
        Presentence defendants are being supervised by telephone rather 
        than personal visits because of the crushing workload.
  --decide civil and bankruptcy cases in a more timely manner. In civil 
        cases there has been a 12 percent increase in the median time 
        from filing to disposition over the last few years.
  --avoid delays that result in increased costs for private citizens 
        and the government.

U.S. Marshals
    Another serious problem along the southwest border is the shortage 
of deputy U.S. marshals and detention space. While these resources are 
not part of our budget request, we know that the Department of Justice 
is requesting a modest eight percent increase for the Marshals Service 
and a 13.8 percent increase for federal prisoner detention. I would ask 
that you give that request every consideration.
    We are concerned about the level of security on the southwest 
border. In many instances you will find a group of 10 or 12 prisoners 
being escorted into a courtroom by 1 or 2 deputy marshals. This is a 
tragedy waiting to happen. The marshals in these districts must be 
provided additional resources.
    In addition, the lack of adequate space is creating considerable 
problems for the marshals, our probation and pretrial services 
officers, and federal defenders. The lack of space is resulting in the 
release of some individuals awaiting trial who might otherwise be 
detained. This jeopardizes public safety. Those who are detained are 
often placed in facilities hundreds of miles away, creating access 
problems for attorneys and security and transportation problems for the 
marshals. Additional detention space, closer to the courts, is sorely 
needed.

                           DEFENDER SERVICES

    Resource needs in defender services are directly related to 
criminal filings and dramatic workload increases, especially along the 
southwest border, apply to this account as well. The defender services 
appropriation fiscal year 2001 requested increase of 9 percent in 
obligations is consistent with the 9 percent increase requested in the 
salaries and expenses account.
    In addition to the $16 million in inflationary increases for 
salaries and expenses, a $10 million net increase is needed to handle a 
workload increase of 3,700 representations. This increase is partially 
offset by a projected reduction in the average annual cost-per-
representation due to a change in the overall case mix, which will 
result from a higher number of less expensive immigration cases.
    A critical component of the defender services request is $11 
million to increase the hourly rates paid to private panel attorneys 
from $70 per hour for in-court time and $50 per hour for out-of-court 
time to $75 per hour for both in and out-of-court time. This $75 per 
hour rate was authorized fourteen years ago. While we appreciate the $5 
per hour rate increase that Congress approved for fiscal year 2000, it 
is only the second such increase in fifteen years. Despite your good 
efforts, I am compelled to point out that the current rates still do 
not even cover average overhead costs for a lawyer.
    The urgent need for this rate increase is evidenced by the 
statement of Chief Justice William H. Rehnquist, who for the second 
year in a row, is raising the issue in his Year-End Report on the 
Federal Judiciary. In the 1999 Year-End Report, the Chief Justice 
states, ``Inadequate compensation for panel attorneys is seriously 
hampering the ability of courts to recruit and retain qualified panel 
attorneys to provide effective representation.'' The Chief Justice ``* 
* * respectfully ask(s) Congress to make adequate compensation for 
panel attorneys a high priority, and to fund the Defender Services 
appropriation at a level sufficient to pay the $75 rate.'' I am here to 
emphasize that request.

                             COURT SECURITY

    Providing adequate security for all citizens who enter courthouses 
is of utmost concern to the judiciary. The fiscal year 2001 request 
includes a seven percent increase for court security. In addition to 
inflationary increases, $2.3 million is requested for 72 additional 
court security officers, primarily for new or renovated facilities; 
$2.3 million is requested to replace outdated security systems and 
equipment; and $3.9 million is requested for the first year of a four-
year program to acquire narrowband capable digital radios, as mandated 
by the National Telecommunications and Information Administration 
Organization Act.

                            COST CONTAINMENT

    As you know, Mr. Chairman and members of the subcommittee, the 
judiciary takes very seriously its responsibilities to use the 
resources Congress provides in the most efficient manner possible. For 
the last several years we have undertaken a judiciary-wide effort to 
find ways of doing more with less. The Optimal Utilization of Judicial 
Resources Report that we sent to your subcommittee in February is a 
compilation of our initiatives. I would just like to summarize some of 
the major efforts we have underway.
  --The use of technology has contributed significantly to the 
        judiciary's ability to do more with less. The judiciary is 
        following a multi-year plan to equip courtrooms with a variety 
        of technologies, which can result in reduced trial time and 
        lower litigation costs. The distance learning program continues 
        to expand through the use of the Federal Judicial Television 
        Network and video conferencing technology.
  --Containing rent costs of court facilities remains one of the 
        judiciary's highest administrative priorities. A comprehensive 
        management assessment of its space and facilities program 
        should be completed later this year. This independent review 
        will evaluate the effectiveness and efficiency of the 
        judiciary's facilities program and make recommendations for 
        future facilities planning, budgeting, and management.
  --In September, the judiciary completed a year-long study of the use 
        of judicial officer resources. The study identified ways to 
        improve management of available resources that might mitigate 
        future requests for additional Article III judgeships. The 
        recommendations include sharing information among courts and 
        chief judges, more effective use of visiting judges, and 
        providing assistance to courts with particularly high 
        workloads.

               CONTRIBUTIONS OF THE ADMINISTRATIVE OFFICE

    The work of the Administrative Office of the United States Courts 
is critical to the judiciary's functioning effectively. The Director of 
the Administrative Office serves as the chief administrative officer 
for the federal courts. The agency provides a broad range of 
management, program, and administrative services to the courts. It 
supports the Judicial Conference of the United States and its network 
of committees in determining judiciary policies, and it implements 
those policies on behalf of the Conference.
    An important Administrative Office responsibility is supporting, 
coordinating, and implementing the Judicial Conference's numerous 
efforts to reduce costs and manage resources most efficiently. The 
various cost containment efforts I just summarized, as well as all of 
those listed in the Optimal Utilization Report, are only possible 
because of the efforts of the Administrative Office. Without the 
Administrative Office, the savings and cost avoidance initiatives of 
the judiciary would not have materialized.
    In the interest of continuous service improvement, the 
Administrative Office is currently conducting or overseeing, in 
connection with Judicial Conference committees, an unprecedented number 
of strategic studies of judiciary programs and operations. In addition 
to the space study mentioned previously, an expert consulting firm is 
considering the future information technology needs of the courts, how 
the judiciary can take advantage of new technologies to meet these 
needs, and how the judiciary can best organize and manage resources to 
carry out its information technology program.
    An independent study of the court security program will consider 
whether there are ways to provide adequate security to the judiciary 
more efficiently or effectively, and outside experts will conduct a 
strategic assessment of the probation and pretrial services system to 
make recommendations to ensure the future quality and success of these 
important programs. Work measurement studies have been completed 
recently and the results are being used to develop new staffing 
formulas for the appellate, district, and bankruptcy courts, as well as 
probation and pretrial services offices.
    The fiscal year 2001 budget request for the Administrative Office 
is a seven percent increase in obligations over this year, less than 
what is requested for the courts. In addition to inflationary 
increases, $1.4 million is requested to bring the Administrative Office 
back to the level of service funded in fiscal year 1999. In order to 
devote as many resources as possible to continue staffing at the level 
necessary to support the courts, last year the Administrative Office 
took sizeable cuts in critical non-personnel programs. Funding is 
needed for deferred contractual services in support of core 
Administrative Office financial and information technology systems, 
such as the Central Accounting System and Data Communications Network. 
In addition, staffing will be restored to provide the courts with 
technical assistance in the probation, pretrial services, and court 
administration programs. These staff will assist the courts in 
improving program operations.
    I urge the Committee to fully fund the Administrative Office's 
budget request. The Administrative Office is not a ``Washington 
headquarters'' agency. It is integral to the judiciary's ability to do 
its core work. The judiciary could not continue to function effectively 
without the support provided by the Administrative Office. A very 
modest increase in funding for the Administrative Office will ensure 
that the Administrative Office can continue to provide program 
leadership and administrative support to the courts, and lead efforts 
for the courts to operate efficiently.

                        FEDERAL JUDICIAL CENTER

    In 1999, the Center provided education to over 37,000 in the 
judicial system, and over 90 percent of them used no travel funds. I 
want to recommend strongly that the Subcommittee approve full funding 
of the Center request. It is only 7.8 percent over the 2000 level and, 
if granted, would put the Center only slightly over its high-water mark 
early in the 1990s. The request is limited to the normal adjustments to 
the base budget except that the Center is not even requesting 
inflationary adjustments for travel, and for eight positions to help 
provide education through the Federal Judicial Television Network, 
which the Center manages for the entire judicial branch, and through 
the judicial branch's intranet, the J-Net.
    The work that the Center does is absolutely essential to the 
judicial system and to the public. The Center's expertise was key to 
the success of the recent conference of federal judges along the 
Mexican border to search for solutions to the crisis in their courts. 
We count on the Center to keep us informed of statutory developments, 
and how the appellate courts are interpreting statutes, such as those 
governing prisoner litigation.
    The Center, as Judge Smith can explain, is working closely with the 
U.S. Sentencing Commission to avoid duplication of effort while keeping 
judges and probation officers informed about guideline developments, 
including through jointly sponsored satellite broadcasts. As we get 
more cases with complicated scientific and technical evidence, we rely 
on the Center to provide us the tools we need to help manage this 
litigation.
    Finally, the Center has long been a leader in helping courts adopt 
less expensive alternatives to traditional litigation when appropriate, 
and is using its alternative dispute resolution expertise to help 
implement the 1998 Alternative Dispute Resolution Act.

                         SENTENCING COMMISSION

    Because the U.S. Sentencing Commission is not testifying before the 
subcommittee, I would like to say a few words in support of its 
appropriation request. You may recall that throughout the 
appropriations process for fiscal year 2000, there was substantial 
uncertainty as to the financial requirements of the Commission because 
there was a complete absence of voting commissioners. As a result, the 
Commission's budget was reduced to $8,468,000 for fiscal year 2000, an 
11 percent decrease from fiscal year 1999 and the lowest appropriation 
for the agency since fiscal year 1994. As I am sure you know, a full 
complement of seven voting commissioners was appointed in November 
1999, and the agency is fully operational once again.
    The new commissioners face an extraordinarily heavy workload due to 
the extended absence of commissioners. During that period a significant 
backlog of crime and sentencing related legislation accumulated that 
must be addressed by the Commission. These items cover a wide range of 
criminal conduct of great concern to Congress and others, including 
intellectual property infringement, sexual offenses against children, 
firearms offenses, crimes committed by electronic means, and 
methamphetamine trafficking offenses. The newly minted Commission has 
made addressing these items its first priority, however it is severely 
hampered by staffing shortages that have gone unaddressed. A de facto 
hiring freeze instituted during the absence of commissioners, coupled 
with the agency's normal attrition rate, has reduced the current 
staffing levels by 20 percent from that of fiscal year 1998.
    With this background in mind, the Commission requests funding of 
$10,600,000 for fiscal year 2001, the same as requested last year. The 
Commission requests adequate funding merely to restore its staffing and 
operations back to a level that approximates fiscal year 1998, the last 
year in which it had a fully functioning Commission. Without these 
additional resources, the Commission and its staff will be unable to 
respond adequately to all of its statutory responsibilities.

                              JUDGES' COLA

    I wanted to touch very briefly on the issue of cost of living 
adjustments (COLA) because I know it is one that will be addressed by 
the congressional leadership. We are grateful that Congress approved a 
COLA for 2000 for Members of Congress, senior executive branch 
officials, and judges. The Judicial Conference strongly endorsed a COLA 
for 2000 and continues to support one for 2001. We are hopeful that 
Congress will allow the mechanisms of the 1989 Ethics Reform Act to 
work, and that all top government officials will be provided a COLA in 
fiscal year 2001.
    It is important that such a pay adjustment be allowed to occur. The 
judiciary is deeply concerned about the growing disparity in pay 
between the federal and private sectors. Recent media reports indicate 
that on the east and west coasts, top law school graduates can almost 
immediately earn salaries comparable to the pay of members of Congress 
and district judges, and that many lawyers no more than several years 
out of law school can find jobs with successful law firms at salaries 
higher than the Speaker of the House and Chief Justice. The upward 
trajectory of associates' salaries reflects increasing competition 
among businesses for the best and the brightest. This past fall, the 
Congressional Budget Office concluded that the pay and benefits of 
members of Congress, judges, cabinet officers, and members of the 
Senior Executive Service are less generous than those of executives at 
large and medium sized private firms. If the pay gap between the 
federal government and other employers continues to widen, the 
judiciary and the political branches may find that they are unable to 
compete for the most talented individuals.

                           CERTIFYING OFFICER

    There is one final issue I would like to address before concluding 
my remarks. It is not a funding issue, but rather a substantive issue 
that affects the way the judiciary manages its resources. In our budget 
request, we have included as a general provision, statutory language 
that provides court personnel the authority to manage their fiduciary 
responsibilities in the same way as the Executive Branch.
    Under current law the clerk of the district court, as disbursing 
officer, is personally liable for the propriety of payments made for 
all the court units in the judiciary. However, since the district clerk 
is the only person now liable for the propriety of payments, all 
paperwork for all payments must be forwarded to the district clerk. 
This is very inefficient. With the legislative change that we are 
proposing, other key officials in the courts can become certifying 
officers. This is necessary because with budget decentralization and 
the new accounting system that is being implemented nationwide, each 
court unit head (e.g., bankruptcy clerk, chief probation officer, 
circuit librarian) will have the ability to make his or her own 
payments. These officials would certify and be held liable for payments 
being proper in their respective offices, just as the district clerk is 
now. This authority will eliminate a substantial volume of paperwork 
that otherwise has to be forwarded to the district clerk for each 
payment.

                               CONCLUSION

    Mr. Chairman and members of the subcommittee, this concludes my 
statement. I would be pleased to respond to any questions you may have.

                                Appendix

                                SUMMARY

    The fiscal year 2001 appropriation request for the Courts of 
Appeals, District Courts and Other Judicial Services totals 
$4,217,821,000, an increase of $452,075,000 over our fiscal year 2000 
appropriation level. In addition to appropriated funds, the judiciary 
utilizes other funding sources to supplement our appropriations. 
Included in these sources of funding are fee collections, carry forward 
of fee balances from prior years, and the use of no-year funds. When 
all sources of funds are considered, the increase in obligations for 
fiscal year 2001 is only $355,878,000 or 8.7 percent.
    Of the $355,878,000 increase in obligations, 72 percent 
($256,922,000) is adjustments to the fiscal year 2000 base primarily 
associated with inflation, pay increases and GSA rental payment 
increases. The remaining 28 percent ($98,956,000) is needed to respond 
to increased to requirements for security, magistrate judges, federal 
defender offices, and to fund additional court staff required to 
process growing workload. The request for the principal programs are 
summarized below.

                         SALARIES AND EXPENSES

    The salaries and expenses of circuit, district, and bankruptcy 
courts and probation and pretrial services offices account for most of 
our request. A total of $3,712,374,000 is required for this activity, 
$306,535,000 over fiscal year 2000 estimated obligations. Funding 
totaling $211,078,000 is expected to be available from other sources 
including fee collections and carry forward balances to offset the S&E 
requirement. This leaves an appropriation need of $3,501,296,000, of 
which $2,602,000 is to be derived from the Vaccine Injury Trust Fund.
    Over 71 percent of the $306,535,000 increase ($216,644,000) is 
needed to fund adjustments to the fiscal year 2000 base for pay 
increases for courts support staff ($118,967,000); pay increases for 
judicial officers ($22,414,000); GSA space rental costs ($63,216,000); 
inflationary increases for operating costs ($10,718,000); information 
technology increases ($13,062,000); and reductions in non-recurring 
costs (-$11,733,000).
    The remaining 29 percent ($89,891,000) will fund 9 additional 
magistrate judges and their staff ($3,764,000); 1,255 FTEs to return 
court staffing to fiscal year 1999 service levels ($82,670,000); and 
space alterations required to install courtroom technologies 
($3,457,000). The additional magistrate judges are needed to provide an 
effective, yet less costly, way of providing help to Article III judges 
to handle the growing volume of civil and criminal cases facing the 
courts. The additional court staff will allow the courts, particularly 
probation and pretrial offices, to process the courts' growing 
workload. The alteration funds will allow courtroom technologies 
equipment to be installed in existing courtrooms.

                           DEFENDER SERVICES

    A total of $444,068,000 is required for the Defender Services 
program to provide representation for indigent criminal defendants in 
fiscal year 2001. Of this amount, $440,351,000 is requested in direct 
appropriations, and $3,717,000 is expected to carry forward from fiscal 
year 2000. The total requirements for fiscal year 2001 are $37,086,000 
or nine percent over the fiscal year 2000 projected obligations of 
$406,982,000.
    Most of the increase ($36,486,000) is needed for adjustments to the 
fiscal year 2000 base for inflationary and workload increases. Included 
in these adjustments is an increase of the non-capital hourly panel 
attorney rate to $75 for all districts beginning April 1, 2001. Also 
included is a $9,700,000 net increase associated with a workload 
increase of 3,700 additional representations in fiscal year 2001.
    The remaining increase ($600,000) will fund the start up costs of 
two new federal defender organizations. The Congress and the Judicial 
Conference have urged the judiciary to establish more federal defender 
organizations as an alternative to using panel attorneys in districts 
where this would be appropriate.

                    FEES OF JURORS AND COMMISSIONERS

    For the Fees of Jurors program, a total of $60,821,000 is required. 
The total requirement for fiscal year 2001 is $2,179,000 lower than the 
estimated fiscal year 2000 obligations. This reduction is the result of 
a projected decrease in juror days.

                             COURT SECURITY

    For the Court Security program, a total of $215,353,000 is 
required. This is a $14,436,000 increase over estimated fiscal year 
2000 obligations. Adjustments to base include increases of $5,971,000 
for inflationary and contractual cost increases; funding to annualize 
the costs for 120 new court security officers (CSOs) partially funded 
in fiscal year 2000; increased hourly rate payable to CSOs; and a 
reduction for non-recurring fiscal year 2000 equipment expenditures.
    The remaining increase of $8,465,000 includes funding 72 additional 
CSOs to provide a security presence in existing, new and renovated 
facilities housing a full-time judicial officer ($2,267,000); providing 
narrowband capable digital radios ($3,910,000); and upgrading security 
systems and equipment at probation and pretrial offices ($2,288,000).
                                 ______
                                 
 Prepared Statement of Leonidas Ralph Mecham, Director, Administrative 
                       Office of the U.S. Courts

                              INTRODUCTION

    Mr. Chairman and Members of the Subcommittee, it is an honor to 
once again testify before you on the budget requirements for the 
Administrative Office of the U.S. Courts (AO). Chairman Gregg, it has 
been a privilege to work with you, Mr. Hollings and all of the members 
of this subcommittee.
    I would like to take a moment to recognize the excellent staff work 
you receive on this subcommittee. While your staff does keep us on our 
toes, their questions and suggestions are always well thought out, 
appropriate and appreciated. I believe we have benefitted from their 
scrutiny and hopefully the budget products we have developed in turn 
have assisted you as well.
    I would also like to thank you for your efforts to provide an 
increase to the AO for fiscal year 2000. Although modest in size, given 
the fiscal difficulties that you faced last year we fared much better 
than many agencies and for that I am appreciative. I know 
administrative functions are easy targets in times of fiscal 
constraint. The fact that you saw fit to increase the budget of the AO 
indicates that you recognize that our role is vital to the operations 
of the entire judiciary.

                            60TH ANNIVERSARY

    1999 marked the 60th anniversary of the AO and gave us an 
opportunity to reflect on how the role of the AO has changed over this 
relatively brief period of time in our history. From its beginnings 
where it provided services to a population of approximately 2,500 to 
one that now numbers more than 30,000, the AO stands beside the courts 
to provide necessary resources and program support to fulfill its 
critical mission. Sixty years after its origin, the AO has become a 
model for foreign judicial systems wishing to establish their own 
administrative support system.
    The AO was created in 1939 to eliminate the separation of power 
issues raised by the Department of Justice's handling the judiciary's 
administrative needs. Sixty years later, judicial independence and 
service continues to be the guiding principles that govern and 
influence AO operations. Whether launching a new accounting system or 
developing the latest spending plan, we remain focused on ensuring that 
the judiciary is equipped to perform its proper and necessary role in 
our system of government.

                  ADMINISTRATIVE OFFICE BUDGET REQUEST

    The AO's request for fiscal year 2001 totals $71,350,00 in direct 
obligations. This represents an increase of $4,924,000 or approximately 
7 percent over anticipated fiscal year 2000 direct obligations. The 
AO's budget request for fiscal year 2001 essentially provides for 
current services with modest increases to restore AO operations to its 
fiscal year 1999 levels. This is consistent with the funding request 
for the courts and will allow the AO to keep up with its ever 
increasing workload. Eighty percent of the requested increase is 
necessary to fund uncontrollable adjustments to base such as pay and 
benefit increases and inflationary changes. Although we are grateful 
that you were able to provide the AO a modest increase for fiscal year 
2000, the increase was not sufficient to fully fund program operations 
at their continuing service level.
    Much of the increase requested will be devoted to improving the 
services provided to the courts. We will provide more technical support 
to probation and pretrial services programs, court administration 
programs, and the development of automated systems which support court 
administrative functions. We will focus on conducting program and 
efficiency reviews that will assist the courts in areas such as 
securing witness protection materials; electronic monitoring; creating 
pretrial services offices in the courts; developing new case management 
programs and systems; improving financial management; and developing 
strengthened contracting procedures and regulations.

                            SOUTHWEST BORDER

    The AO's role in the judiciary does not stop at administrative 
support. We are affected by everything that impacts the courts. For 
example, the tremendous workload increase in districts along the 
southwest border that you have been hearing so much about, and will 
continue to hear much about, has also had an impact on the AO's 
workload. It falls on the AO to try to stay ahead of the curve and 
assess and--to the extent we can--lessen the havoc created in the 
courts. No office within the AO is immune from involvement. Our 
Statistics Division must make a special effort to keep track of the new 
U.S. attorneys that are added to the border districts so that they can 
predict how many additional cases will be brought and when we should 
expect to see them. The people in finance must carefully review the 
judiciary's financial situation and develop a way to provide these 
areas with financial resources to assist with the crisis while at the 
same time balancing the needs of the other 89 judicial districts, most 
of whom are also seeing workload increases. Our court services section 
has had to come up with ways to help in the short term by developing 
and managing a system that would allow judiciary staff from other 
districts to take short-term assignments in these districts to ease 
some of the workload burden while it tries to find long-term solutions. 
And our judges program has come up with ways to assist the judges by 
taking advantage of technology and having judges in other districts 
handle some cases through videoconferencing or through visiting 
arrangements.
    This is just an example of how the AO must be responsive to 
judiciary concerns. It is an agency-wide effort, but it drains 
resources from what is already a staff that is stretched very thin from 
years of increasing workload without commensurate increases in staff.

                          AO RESPONSIBILITIES

    One of the primary responsibilities of the AO is to provide staff 
support and counsel to the judicial conference and its committees. In 
addition, the AO provides a broad range of legislative, legal, 
management, administrative, and program support services for the 
federal courts. We are responsible for collecting data and preparing 
over 100 different statistical tables. In addition to developing the 
judiciary's budget request and national financial plan we assist almost 
400 court units with developing and executing their individual spending 
plans. We process all personnel and payroll actions--almost 400,000 in 
1999 alone--and manage the benefit program for over 30,000 judiciary 
employees. We are engaged in several major studies designed to improve 
court operations. We are responsible for all national automation 
applications and manage the development of new ones, which may number 
15 or more at any one time. We inform, educate and audit the courts on 
judicial conference policies and other operating procedures.
    I am fortunate to have a staff of hardworking people who are 
dedicated to the role of the judiciary in our system of government. 
However, we do all of the work I mention, and a tremendous amount more, 
with a modest amount of people. The consequence is that a vast amount 
of knowledge on specific judiciary topics is vested, in many cases, in 
only one individual. This situation keeps us holding our breath and 
hoping retirements or lucrative offers from outside the AO do not rob 
the AO of its knowledge base. This point is made clear in the following 
chart, which shows how the AO's resources, both funding and staffing, 
have been declining for the past three years, with our 2001 request 
reflecting a 10 year low.

[GRAPHIC OMITTED]


    The AO continues to be a model of efficiency, when compared to 
other administrative support organizations. AO staffing as a percentage 
of judiciary staffing is less than 3 percent, while the staff in the 
Department of Justice's Management and Administration accounts 
represents more than 5 percent of DOJ total staff.

                           ACCOMPLISHMENTS

    For the past several years, the funding received by the judiciary 
has not allowed the courts to grow to the level required to keep pace 
with their increasing workload. Because of this, the AO has been 
increasingly called upon to help in developing new systems and programs 
for the courts that will allow them to continue to provide quality 
services in spite of the fact that workload increases faster than 
resources. The AO is continuing to work at improving services to the 
courts and to the public.
    The federal judiciary accomplishes its constitutional mission with 
a small portion of the nation's budget and resources, less than two-
tenths of 1 percent. Increasingly tight funding demands have required 
the AO to make more efficient use of existing resources. By taking 
advantage of new technologies, improving communication, and placing 
increased emphasis on long range planning and budgeting, the AO 
continues to be innovative in providing support services to the 
judiciary. I would like to take a few minutes to describe some of our 
accomplishments as well as some ongoing activities and efficiency 
efforts that the AO has coordinated. Additional examples of our economy 
and efficiency efforts is contained in our annual report entitled 
``Optimal Utilization of Judicial Resources.''

Resource Management
    The constrained funding the judiciary has experienced over the past 
several years has strengthened our resolve to take a longer-term view 
of our resource needs and to consider the future impact of today's 
financial and programmatic decisions. The AO is spearheading a number 
of initiatives that focus on ensuring that our future programs achieve 
the judiciary's goals in a cost-effective way.
    Long-Range Planning and Budgeting.--The AO has been working with 
Judicial Conference committees to strengthen the connections between 
program planning and budgeting to identify strategic planning issues, 
and to analyze their future impact on the Judiciary's mission, 
operations, and resource needs. In February 1999, the Conference's 
Executive Committee established a new long-range planning group, made 
up of Conference committee chairs, to consider planning needs and 
issues. The group meets semi-annually. Topics covered in the 1999 
sessions included assessing past and future trends in the judiciary's 
workload, budget, and personnel.
    AO staff are assisting the Conference committees with identifying 
strategic issues and identifying and analyzing possible courses of 
action in order to recommend new approaches and policies. Strategic 
issues will be addressed within the context of the judiciary's core 
values and mission in addition to considering economy and efficiency.
    Work Measurement Initiative.--For twenty years, funding needs for 
court support staff have been determined based upon staffing formulas. 
These formulas provide an objective means to consider workload factors, 
such as the number of cases filed, and equitably determine the amount 
of staff funding needed in each district. While the current formulas, 
which were developed in the early 1990s, have worked very well in 
determining the staffing resource increases or decreases needed from 
year to year, they have become outdated and do not address the impact 
changing times have had on staffing needs.
    Under the overall leadership of the Judicial Conference Committee 
on Judicial Resources, the AO is updating the formulas. New staffing 
formulas for allotting funds to the courts are being developed that 
will reflect new work requirements, the impact of technology, and 
changes in work processes that have been implemented in recent years. 
After the new formulas are completed, work changes and resource 
requirements will continue to be studied so that formulas can be 
revised regularly to reflect new work or operational changes.
    Financial Management Improvement Program (FMIP).--In 1999, the AO 
introduced the FMIP. This program is aimed at: elevating the overall 
financial skills level of AO and court personnel; providing an ongoing 
training program for the courts in appropriations law, budget 
decentralization, and internal controls; designing financial process 
improvements and assisting the courts in implementing them; modernized 
automated financial systems such as our new accounting system and the 
Criminal Justice Act payment system replacement; and, updating and 
maintaining financial policies contained in the Guide to Judiciary 
Policies and Procedures.

Major Studies
    The AO is committed to developing, refining, and providing the best 
possible support to court programs. Agency staff were engaged in 
several major studies in 1999 aimed at improving court operations. 
Although the studies themselves are being performed by outside 
contractors, a lot of AO staff resources are required in the 
development and awarding of the contract, as well as providing 
information to and working as a liaison between the contractors and the 
courts. I am confident that the results of these studies will be better 
service to the courts and the taxpayers.
    Space and Facilities.--In 1999, the AO contracted with Ernst & 
Young to conduct a comprehensive program and management assessment of 
the judiciary's space and facilities program. The main purpose of this 
study is to evaluate and develop recommendations on the effectiveness 
and efficiency of the space and facilities program. The study will 
address: organizational relationships, roles and authorities; long-
range planning process; courtroom needs; U.S. court design guidelines; 
facilities management policies; and, funding and budget mechanisms. 
Ernst & Young will recommend strategies for achieving program 
objectives, improving processes, and containing costs.
    Probation and Pretrial Services.--The AO has received proposals 
from a number of outside contractors in our efforts to conduct a 
comprehensive assessment of the probation and pretrial services system. 
The assessment will address a number of important issues raised by a 
confluence of increasing responsibilities, changing federal criminal 
populations, and constrained budgets. The broadest issue is whether 
there are ways to accomplish the system mission more effectively 
through changes in functions, policies, management systems, processes, 
organization, assignment of responsibilities, resources, operational 
approaches, statutes, or regulations.
    Information Technology Program.--The AO also is involved in a study 
to assist the judiciary's rapidly expanding information technology 
program. The assessment will focus on: the judiciary's short and long-
range information technology needs and objectives; projected changes 
and enhancements in information technology in the marketplace and how 
best to position the judiciary's information technology program to take 
advantage of new technologies to meet current and future requirements; 
and, alternatives for organizing and managing resources to carry out 
the judiciary's information technology program effectively.
    Court Security.--Meeting the security needs of the judiciary is a 
vital but increasingly costly requirement. Although it comprises 
slightly less than 5 percent of total judiciary expenditures, court 
security has been the fastest growing component of the judiciary's 
budget. The AO contracted for an independent assessment of how security 
services are provided to the judiciary. The study will review: exterior 
and interior physical security of federal courthouses and multi-tenant 
facilities; the need for after-hours or 24-hour security coverage; 
courtroom security during civil and criminal proceedings; the court 
security officer program, including contract administration, staffing 
formulas, and wage determination procedures; alternative approaches of 
providing guard services; and the need for background checks on 
judiciary employees.
    The proposed study will determine if there are alternative ways to 
provide adequate security to the judiciary more efficiently and more 
effectively.
    Training Needs.--In 1998, the AO, Federal Judicial Center and U.S. 
Sentencing Commission jointly contracted with a private consulting firm 
to assess training needs for the judiciary and AO employees. The 
contractor is analyzing, documenting and prioritizing training needs, 
and it is preparing a training plan that will serve as a road map for 
the development of future training programs. The final training plan 
and a comprehensive report will be presented to the Committee on 
Judicial Resources for consideration in June 2000. This is the first 
comprehensive study of training needs undertaken by the judiciary.

Communication Improvement--Use of Technology
    As court responsibilities and caseload expand, the growth rate of 
the AO has not kept pace with the judiciary as a whole. This has forced 
us to identify creative and at times non-traditional approaches to work 
and to strengthen existing lines of communication with the courts and 
the public through a variety of media, as well as reaching out through 
informational and training programs.
    J-Net.--For internal communications, the judiciary uses an 
``intranet''. The AO maintains a site on this intranet, called the ``J-
Net'', which is helping to achieve savings in paper and postage costs 
as it disseminates greater amounts of information in place of paper 
documents. The site is visited more than 5,000 times weekly by 
judiciary employees looking for reports, statistics, manuals, and other 
documents. More than 140 court units now have some type of information 
published on the J-Net, which was redesigned in 1999 to provide easier 
access to court information.
    Internet.--The AO manages and coordinates policies and procedures 
related to Internet access. Dissemination of court information to the 
public via the Internet saves time and money. Many courts receive fewer 
calls regarding office hours, directions to the court house, and 
questions concerning local rules. The judiciary also uses the Internet 
for research and acquisition activities. The AO also maintains an 
Internet site which contains statistical information, proposed changes 
to the federal rules, employment information and more.
    FJTN--Training and Education.--The Federal Judicial Television 
Network (FJTN) is the judiciary's nationwide broadcast network. The 
FJTN currently broadcasts to approximately 270 court locations and will 
eventually be available in 285 locations. The FJTN became an integral 
part of the judiciary's training efforts in 1999 through its distance-
learning programs. One of the greatest benefits of the network is the 
ability to reach a multitude of sites. Live broadcasts also are using 
``push-to-talk'' capability, which allows viewers to ask questions 
during the broadcast.
    AO staff are converting training programs traditionally offered in 
a classroom setting to a format using the television network. The FJTN 
has allowed the AO to deliver high-quality training programs to a 
larger audience at reduced costs compared to traditional classroom 
instruction. The AO now broadcasts over 80 hours of live and taped 
educational and information programming per month to sites throughout 
the judiciary. Our partners, the Federal Judicial Center and the U.S. 
Sentencing Commission, combine to broadcast an additional 50 hours per 
month. Recent programs that have been broadcast include: Federal 
Retirement Benefits for Court Personnel; Security for Judiciary 
Computer Users; Introduction to Case Management and Electronic Case 
Filing; and Pretrial Services Investigations and Reports Training.

                               CONCLUSION

    Mr. Chairman and members of the subcommittee, I hope I have met my 
goal of impressing on you the wide array of responsibilities vested in 
the AO. Our role goes far beyond administrative support. Although we 
are not a headquarters office, we must be knowledgeable of all of the 
judiciary's operations. For every issue that affects the judiciary, 
every new piece of legislation that expands federal jurisdiction, every 
Administration initiative that impacts federal law enforcement, every 
congressional request for information, there is some person at the AO 
who must quickly master the subject and render expert advice. I am 
proud of our record of accomplishment and service to the courts and the 
American public. I plan on doing everything in my power to continue not 
only to this by granting the modest increase I am seeking for fiscal 
year 2001.
                                 ______
                                 
 Prepared Statement of Hon. Fern M. Smith, Director, Federal Judicial 
                                 Center

    Mr. Chairman and Members of the Subcommittee: My name is Fern 
Smith. I have been a U.S. district judge since 1988 and director of the 
Federal Judicial Center since July 1999, following my selection by the 
Center Board to succeed Judge Rya Zobel.
    The Center is grateful for the 1.2 percent increase it received 
this year, especially in light of the tight circumstances confronting 
you.
    This statement summarizes our 2001 request and then describes our 
work in these areas:
    1. Using distance learning technology to provide education to the 
federal courts.
    2. Helping the southwestern border courts and other courts develop 
education to attack critical problems.
    3. Helping judges implement statutes on prisoner litigation and 
other matters.
    4. Analyses of federal court structure and procedures.
    5. Cooperation and coordination with the U.S. Sentencing 
Commission.
    6. Education and research to implement ADR programs.
    7. Helping courts manage complex scientific and technical lawsuits 
and other aspects of modern federal litigation.

            2001 REQUEST: TO ENHANCE EDUCATIONAL TECHNOLOGY

    We request an appropriation of $19,337,000, a 7.5 percent increase 
in obligations for adjustments to base and for eight automation and 
video positions in order to expand the reach of our training programs 
through greater use of educational technology. Granting the full 7.5 
percent increase would produce a 2001 appropriation just 2 percent over 
the Center's 1992 appropriation, the highest granted to date. The eight 
positions we request are the same positions that Judge Zobel sought 
last year. I have reviewed the request closely to assure myself that 
the request is responsible and well-grounded.\1\
---------------------------------------------------------------------------
    \1\ The Center's 2001 request was unanimously approved by the 
Center Board, which the Chief Justice chairs. I have also discussed our 
request with the Judicial Conference's Committee on the Budget, the 
Administrative Office, and with the Sentencing Commission. A joint 
Judicial Center-Administrative Office committee was created several 
years ago to coordinate plans and avoid duplication or even its 
appearance.
---------------------------------------------------------------------------
    We request no increase in travel funds--no programmatic increase 
and not even the standard inflationary increase. We anticipate Center 
travel spending in 2000 to be 40 percent, or $2.1 million, less than in 
1995. Likewise, the number of participants in our travel-based programs 
continues to decrease--by roughly a third since 1995.
    Although our spending for travel-based education has declined 
sharply, our training population is increasing. FTEs in the courts have 
increased by 15 percent since 1995, and the courts are seeking funds in 
2001 for 1,255 additional, much needed court staff. Personnel hired 
pursuant to these requests, particularly the almost 700 probation and 
pretrial services officers, will need FJC orientation training and then 
continuing education throughout their careers. Furthermore, as 
explained throughout my statement, the courts' training needs are 
themselves becoming more complex because the work of the courts is 
becoming more complex.
    We are thoroughly committed to distance education for the great 
bulk of our training: Over 90 percent of the participants in Center 
training use little or no travel. But distance education still requires 
resources, including personnel sufficient to do the job.
    Four of the eight positions we request are to rebuild our video 
staff, which operates the Federal Judicial Television Network (the 
FJTN) and produces educational videos. The FJTN began broadcasting in 
1998; last year it broadcast over 1,400 hours. The Center video staff 
operates the FJTN teletraining studio, which we built, programs the 
transmission to the satellite uplink, and produces and disseminates the 
monthly broadcast schedule. We manage the network not just for Center 
broadcasts (including those we produce with the Sentencing Commission) 
but also for those of the Administrative Office, allowing operational 
efficiencies and saving resources elsewhere in the judicial branch.
    However, even with the major responsibility of running the network 
for the third branch, our video staff must continue to design, film, 
and edit the educational videos that increasingly make up parts of the 
Center's FJTN broadcasts. It must also continue to produce videos 
essential for our judicial orientation programs and for court use in 
local educational seminars.
    Operating the network and continuing to produce educational videos 
have imposed a serious strain because we have been able to increase our 
video staff only by one and a half positions, extracted from other 
personnel sources. Four additional positions will allow us to update 
our judicial orientation videos, some of which are almost ten years 
old, meet demands for additional videos, and consider broadening the 
FJTN broadcast day to accommodate the western time zones.
    We also request four positions to expand other Center technology-
based educational services. Satellite broadcasts, while important, are 
only one of the non-travel education technologies now used for 
education in both government and business. The four automation 
positions we request will let us expand the number of on-line computer 
conferences we provide the courts, place more interactive training 
tools on the J-Net (the federal judiciary's internal intranet), convert 
to the web our training tutorials that are now on CD-ROM and computer 
disc, and develop inventory, ordering, and distribution services for 
Center educational publications and videocassettes.

                     CENTER SERVICES AND ACTIVITIES

    To help put our request in perspective, the rest of my statement 
describes the range of Center services and activities, all of which 
promote a more efficient and effective federal court system. By way of 
overview, in the 1999 calendar year, the Center
  --provided 906 educational programs for more than 37,000 federal 
        judge and court staff participants, either directly or through 
        Center educational materials used in courses arranged by 
        individual courts and taught by court employees. These are 
        employees the Center has trained to lead the courses in 
        addition to their regular duties. The great majority of this 
        education and training involved little or no travel.
  --completed, primarily for committees of the U.S. Judicial 
        Conference, 23 major research and evaluation projects, 
        continued work on 31 others, and responded to many other 
        requests for short-term research assistance.
  --produced or updated 53 educational programs for live or videotaped 
        satellite broadcast or distribution on videocassette.
  --broadcast more than 1,400 hours of educational and informational 
        programs from the Center and from the Administrative Office 
        over the FJTN.
  --completed 8 curriculum packages and training guides.
  --answered some 2,000 information requests from judges, court staff, 
        and others.
  --hosted seminars or briefings for almost 430 judges and officials 
        from some 70 countries.
    A more detailed discussion of our activities follows.

Using distance learning technology to provide education to the federal 
        courts
    In 1999, over 90 percent of the participants in Center-sponsored 
educational programs, and in locally sponsored training events that 
employ Center materials and services, used distance education methods, 
including satellite broadcasts. Distance education saves time and money 
while meeting proliferating education and training needs throughout the 
courts. Asynchronous distance education--that is, education available 
on demand from the Web or videocassette--provides education when the 
judge or court employee needs it to help resolve a new and special 
problem. As these educational needs become more diverse, and as judges 
and staff become ever busier, the importance and cost effectiveness of 
web-based training, manuals, and various forms of video education 
becomes all the more apparent. We use numerous needs assessment methods 
to determine how distance education can increase federal court 
productivity and efficiency.
            Federal Judicial Television Network
    The FJTN has been operating for almost two years from Center-
operated studios, in the Thurgood Marshall Building, that now broadcast 
to over 270 federal court locations that the Administrative Office has 
equipped with satellite antennas. The quality of FJTN operations 
testifies to the skill of the Center video staff, especially given the 
strain I described above. The Center's reputation has spread outside 
the judicial branch. Representatives from the private and public sector 
(most recently the Justice Department) have visited the Center's FJTN 
operations to learn how to develop similar satellite networks.
    This month we will broadcast nine new programs and eight programs 
that were broadcast in earlier months. These programs will be 
rebroadcast several times during the month so that judges and court 
staff can use them at times that suit their schedules.
    The Center's programming on the FJTN enhances the knowledge and 
skills of court personnel on subjects that are difficult to accommodate 
through traditional methods, at least in the large numbers broadcast 
technology allows for. Center programs have helped many probation and 
pretrial services officers learn basic occupational Spanish, learn how 
to reduce the risk of recidivism by channeling defendants and offenders 
to education and employment opportunities, and learn how to deal with 
substance-abusing defendants and offenders by understanding the 
scientific bases for dependency and their ramifications. One program, 
for example, featured Dr. Alan Leschner of the National Institute on 
Drug Abuse describing Advances in Drug Abuse and Addiction Research. An 
annual FJTN orientation for new federal law clerks provides them 
consistent, nation-wide instruction on their ethical responsibilities 
and teaches them economy in drafting. Most of these programs are 
interactive, allowing users to participate in the programs through the 
``Push-to-Talk'' microphone technology, as well as through faxes and 
call-ins.
    Center FJTN broadcasts also help local court managers use training 
effectively. Recent broadcasts have provided managers information on 
how to use the concept of ``competencies'' in human resource management 
and court training and how to use ``structured on-the-job training'' 
techniques.
    The Center broadcasts its FJTN video magazine Court to Court 
several times a year to inform court managers of economies devised by 
colleagues around the country. Court to Court was a finalist in the 
national ``Telly Awards'' competition for non-network video programs, 
as was a Center program that explains judicial procedures to court 
interpreters.
    We are replacing anecdotal information with better estimates of the 
viewership of FJTN programs--original broadcasts, rebroadcasts, and 
those that court personnel tape for later viewing. Since July, we have 
conducted a sophisticated viewership study designed by Center survey 
research experts using randomly selected samples of FJTN downlink 
sites. This project will yield data to help determine the FJTN's most 
economical uses. Once the project has yielded sufficient data to merit 
reporting, we will gladly make them available.
            Videoconferencing
    The Center also makes extensive use of two-way videoconferencing 
for meetings and for training programs for small numbers of 
participants. Since 1998, Center personnel have managed over 100 
videoconferences for the Center and a like number for the 
Administrative Office. The Sentencing Commission has also used this 
service, as have some federal courts.
            Web-based education
    The Center is using its website extensively to provide education 
and information to the courts and to promote access to our resources by 
the general public. In September 1998, the Center, in collaboration 
with the Administrative Office, produced the first web-based 
interactive tutorial for the judicial branch. It helps court staff 
prepare reimbursable work authorizations (RWAs) for facilities 
renovation, repair, and building services. It is a multipart 
application with an on-line self-testing tutorial on all aspects of 
creating and managing an RWA as well as tools to create, file, and 
archive them. We had earlier developed a tutorial to teach court 
personnel the rules of civil procedure, and now also have a more 
extensive tutorial on the bankruptcy rules. In addition, through its 
website the Center sponsors moderated on-line computer conferences--a 
form of asynchronous distance education--that participants join from 
their desks. We have sponsored 52 such conferences since 1997.
    FJTN broadcast schedules, program descriptions, and written 
materials for some programs are available on-line, often weeks before 
they are available in print. Many Center publications and other 
educational products are on line.
    We have recently redesigned our website to make it the most 
complete and accessible research and educational resource available to 
federal court personnel. Training specialists in courts throughout the 
country can use this site to take advantage of the experiences of their 
colleagues in other courts and circuits. The site identifies trainers 
in other courts who have dealt with particular problems and allows 
users to pose questions to them, view other courts' training events 
databases, and obtain electronic copies of resource materials that 
others have developed. An operations exchange group lets managers and 
employees pose or answer questions or locate resources about court 
operational issues.
    For the public, the Center's Internet site includes 50 Center 
publications. Last month we opened our Federal Judicial History 
website, which the Center developed pursuant to its statutory mandate 
to conduct and encourage programs on the history of the federal courts. 
This electronic reference source about the development of the federal 
judicial system is the most comprehensive such resource available in 
any form, providing users ready answers to many of the most frequently 
asked questions about the history of the federal courts. The 
biographical database of federal judges is the first complete list of 
life-tenured judges who have served since 1789; its query feature 
yields answers to many questions about those who have served on the 
federal bench and about the changes in the make up of the federal 
judiciary over its 200 year history and in more recent times. The 
Landmark Judicial Legislation section includes 21 of the most important 
statutes determining the organization and administration of the 
judiciary, with essays describing congressional deliberations. The site 
also lists all chairmen of the Senate and House Judiciary Committees 
since 1813.
            Training products for in-court use
    The Center makes available over 50 self-study guides, computer-
assisted instructional programs, and ``training packages'' that it has 
designed for court managers to use in building training into their 
human resource programs. In 1999, over 15,500 participants in locally 
sponsored programs used these resources, in-district with no or minimal 
travel. A few examples of the subjects available for local court 
education are:
  --a video-based program to help clerk's office personnel understand 
        how to assist lawyers and the public without giving advice of a 
        legal nature;
  --programs to help court managers and staff increase productivity 
        through modern business practices of process improvement, 
        quality service, and team-based management;
  --training packages with desk references to help probation and 
        pretrial services officers make financial sanction 
        recommendations and work with mentally-disturbed defendants and 
        offenders;
  --a computer-assisted training program on a Center-developed 
        statistical model that helps probation officers determine the 
        likelihood of recidivism during an offender's term of 
        supervision.
Helping the southwestern border courts and other courts develop 
        education to attack critical problems
    The Center provides judges and court managers the education and 
training resources they need to develop their own knowledge and skills 
in critical problem areas, as well as develop the knowledge and skills 
of the court staff that report to them. The Center works regularly with 
numerous advisory committees and ad hoc planning groups to determine 
what judges and court personnel need and to provide training programs, 
curriculum packages, video broadcasts and cassettes, and on-line 
services that meet those needs in the most cost effective manner. Here 
are some specific examples:
            The Southwest Border Conference
    Illegal immigration and drug importation have created a crisis in 
federal courts along the Mexican border in the Fifth, Ninth, and Tenth 
Circuits. Last May, Fifth Circuit Chief Judge Carolyn King asked the 
Center to help design a workshop where federal judges in her circuit 
could learn from each other techniques to cope with the extraordinary 
crush of litigation and to discuss candidly the costs and benefits of 
various measures that judges have developed. The workshop was expanded 
to include the border district judges in the Ninth and Tenth Circuits 
and held last month in Albuquerque, with a keynote address by Senator 
Domenici. As one judge put it, this meeting let ``the frontline 
soldiers in our war on border crime'' share ideas on how to deal, and 
how not to deal, with the changing contours of border court problems.
    This workshop was a coordinated effort by the judicial branch. The 
Administrative Office arranged funding, and Center education experts 
worked with the planning committees of judges of the three circuits to 
design a program of maximum benefit, based on our experience in 
designing all manner of practical educational exchanges for judges that 
save the courts both time and money.
            Electronic case filing
    As courts convert from paper to electronic filing, they must 
prepare the bar for this change. At the request of one of the courts 
that is preparing to receive filings electronically, the Center 
developed on-line tutorial, in collaboration with that court, to show 
attorneys how to file pleadings and other case-related materials 
electronically. We are developing a similar tutorial in collaboration 
with a bankruptcy court. Both tutorials will be available as templates 
for other district and bankruptcy courts.
            Helping bankruptcy courts' public information functions
    Many people who seek to use the bankruptcy process are unfamiliar 
with it, especially those not represented by counsel. Bankruptcy 
clerical personnel face substantial burdens in answering the questions 
posed by these potential users, many of whom do not speak English. To 
help the bankruptcy courts' clerical personnel, the Center is creating 
a combined video-print information package in English and other major 
languages that each bankruptcy court may use to provide much of the 
information that the court staff would otherwise have to provide on a 
person-by-person basis.

Helping judges implement statutes on prisoner litigation and other 
        matters
    Educational programs are needed to help judges and court staff stay 
abreast of both the responsibilities that Congress gives them and the 
evolution of case law interpreting that legislation.
            Criminal cases and prisoner litigation
    The 1996 Prison Litigation Reform Act and Anti-Terrorism and 
Effective Death Penalty Act created new requirements for federal judges 
in reviewing lawsuits filed by prisoners objecting to the conditions of 
their confinement as well as habeas corpus petitions filed by prisoners 
seeking review of their convictions. Also, Congress has authorized the 
death penalty for a growing number of federal crimes, which has created 
a complex set of procedural challenges to ensure a trial that is fair 
both to the government and the defendant.
    Starting with a pre-FJTN, 1996 satellite broadcast, the Center has 
made a major effort to help judges and court staff with the effective 
management of prisoner civil rights, habeas corpus and death penalty 
litigation. For example:
  --Nine Center programs last year for district and magistrate judges 
        included a total of over 30 hours of instruction and analysis 
        about the two 1996 statutes and related subjects. And at the 
        request of the Third Circuit, the Center conducted a two-day 
        program devoted entirely to capital habeas cases in the 
        circuit; in addition to federal judges, nearly 200 prosecutors, 
        defense counsel, and state judges attended at no cost to the 
        Center.
  --The Center also broadcast an FJTN update on the Prison Litigation 
        Reform Act, with special emphasis on sections governing 
        exhaustion of remedies, filing fees and costs, termination and 
        stays of prospective relief, attorney's fees, physical injury 
        requirement, three strikes provisions and screening 
        requirements.
  --Later this year, the Center will release, probably through its 
        website, the first part of a two-part resource guide for judges 
        on managing death penalty litigation. Part 1 deals with federal 
        prosecutions; part 2 provides guidance on federal habeas review 
        of state death penalty cases. Both will help judges manage the 
        costs of death penalty litigation.
      Early this summer the Center will broadcast a two part program 
        for federal judges on managing federal death penalty cases, 
        tapes of which will serve as ready references for judges 
        assigned such cases.
      These efforts build on the death penalty litigation clearinghouse 
        that the Center has maintained for several years, through which 
        federal judges assigned death penalty cases may obtain copies 
        of pretrial orders, jury charges, and other documents developed 
        by judges who have handled these cases, along with audio and 
        videotapes of Center educational programs.
  --We have assisted the Administrative Office in evaluating the 
        Judicial Conference's Criminal Justice Act supervising attorney 
        pilot project to help courts manage CJA responsibilities. Next 
        year, the Center will present to the relevant committees of the 
        Judicial Conference our analysis of this project's impact.
    The Center's Manual on Recurring Problems in Criminal Trials, now 
in its fourth edition, is a standard reference work for judges on the 
appellate case law governing criminal proceedings. It is heavily used 
for training federal prosecutors as well. The Justice Department has 
printed 7,000 copies of the 4th edition and distributes it in its 
classes.
            Other case law updates on the FJTN
    The Center uses the FJTN and traditional judicial seminars to keep 
judges informed about new appellate case law, knowledge that is 
essential for an efficient judicial system. Each July, our FJTN review 
of the U.S. Supreme Court term alerts judges and their clerks to the 
decisions most likely to affect federal judges' daily works. Last month 
we broadcast our first bankruptcy law update, which followed an earlier 
FJTN program on agricultural bankruptcies and regional FJTN circuit 
bankruptcy law reviews.

Analyses of federal court structure and procedure
    Center research analyzes the impact of statutory and rules 
provisions to help the courts, Judicial Conference committees, and in 
some cases Congress, determine whether to consider alternative 
approaches.
    The Center works closely with the Judicial Conference Standing 
Committee on the Rules of Practice and Procedure, and with the four 
Advisory Committees, to analyze the operation of the rules and help the 
committees determine where amendments may be needed to promote more 
efficient and fair litigation. Recent analyses included studies of 
document-production burdens, an analysis of district and appellate 
practices that require disclosure of financial interests of parties in 
federal cases, and a study of five states' court procedures for court-
ordered mental examinations of defendants in capital cases. We will 
soon present information on the use of special masters in complex civil 
litigation to the Judicial Conference's Advisory Civil Rules Committee.
    The Center completed an evaluation of digital audio recording 
technology for the Court Administration and Case Management Committee, 
a technology now approved by the Conference as a method for taking the 
official court record.
    The Center will release this year a source book of case-management 
procedures used in the thirteen federal appellate courts, in response 
to the observation in the judicial branch's Long Range Plan that ``the 
processes by which appeals are actually decided in each circuit are 
generally not well known, and they have not been sufficiently 
studied.'' A conference of chief circuit judges and circuit executives, 
arranged by the Center and held last week in connection with the 
meeting of the Judicial Conference, allowed exchange of information 
about chief circuit judges' court and circuit management practices. 
This conference was similar in purpose to the conferences that the 
Center regularly presents for chief district judges and chief 
bankruptcy judges.
            Ninth Circuit structure
    The Center provided research and analysis for the statutory 
Commission on Structural Alternatives for the Federal Courts of 
Appeals. The commission presented its legislative recommendations late 
in 1998 for changes in the Court of Appeals for the Ninth Circuit and 
in appellate structure generally. This year, the Center published the 
Commission's working papers so that Congress and other interested 
parties can readily review the underlying Judicial Center data, and 
other materials, with which the Commission worked and that helped shape 
its recommendations.

Cooperation and coordination with the U.S. Sentencing Commission
    Congress, in creating the Sentencing Commission, directed it to 
work with the Center to avoid duplication of effort in training and 
research. Commission representatives have long been an integral part of 
the faculty for our orientation programs for new federal judges and 
probation officers. We have worked with the Commission, the Judicial 
Conference Criminal Law Committee and its staff, and the U.S. Bureau of 
Prisons, to arrange periodic sentencing policy institutes as one means 
for the Commission to get the views and experiences of federal judges 
about the guidelines, which they apply on a daily basis. To help the 
Commission use the FJTN to broaden its educational reach, the Center 
has included Commission components in its own broadcasts, including 
Perspectives, the Center's periodic FJTN educational news magazine for 
probation and pretrial services officers.
    Shortly after the new commissioners were sworn in this year, the 
commission chair, Judge Diana Murphy, Commissioner John Steer, and top 
commission staff met with top management of the Center to ensure 
continued close coordination. Earlier this month, the FJTN broadcast 
the first of three joint Center-Commission programs on the Sentencing 
Guidelines. Sentencing and Guidelines: Departure Analysis explained 
statutes, decisions, and guidelines provisions concerning departures, 
provided a ``departure roadmap'' of the Supreme Court's case law 
departure analysis, and presented hypothetical fact patterns to 
illustrate upward and downward departures within the Guidelines. The 
Center and Commission will continue their FJTN partnership and explore 
additional uses of the FJTN, as well as use of the videoconferencing 
equipment for informal hearings.

Education and research to implement ADR programs
    The 1998 Alternative Dispute Resolution Act directs each federal 
district court to provide alternative dispute resolution (ADR) to every 
civil litigant. Since the late 1970s the Center has played the leading 
role in helping federal courts implement mediation, arbitration, and 
other alternative methods to reduce the time and cost of litigation and 
to improve the process. Recent examples include our sourcebooks on ADR 
in district and appellate courts, which tell federal courts how other 
courts are using ADR techniques, and analyses of several trial and 
appellate level ADR methods. The Center also provides judicial 
education in alternative dispute resolution techniques to federal trial 
judges, and this year agreed to make future mediation training programs 
we provide for U.S. magistrate judges available to the Court of Federal 
Claims special masters who adjudicate claims under the statutory 
National Vaccine Injury Compensation Program.
    Given the 1998 ADR Act's call for the Center to help in 
implementing the statute, shortly after passage we broadcast an FJTN 
program to familiarize courts with the Act and its requirements. Last 
December, we presented a conference for the statutorily required ADR 
administrator in each district court. Because of the Center's 
reputation in the ADR area, the highly regarded Hewlitt Foundation, 
which has long promoted alternative means of resolving disputes, 
provided the funds for this conference through a donation to the 
statutory Federal Judicial Center Foundation.
    To further help the courts in implementing the 1998 Alternative 
Dispute Resolution Act, the Center will publish a guide for judges to 
help them select and manage cases in ADR.

Helping courts manage complex scientific and technical lawsuits and 
        other aspects of modern federal litigation
    Orienting new judges to their roles and responsibilities is a core 
Center function. For a federal judge, however, learning is a continual 
process. Rapid changes in science and technology, in particular, are 
affecting the courts' work.
            Judicial education about science and technology
    The Supreme Court, in Daubert v. Merrell Dow Pharmaceuticals (1993) 
and its progeny, and Markman v. Westview Instruments, Inc. (1996), has 
greatly expanded federal judges' responsibility to assess the 
reliability of scientific evidence offered in federal litigation, 
including but not limited to patent cases. Judicial education in these 
areas is often most effective when judges meet face to face with 
faculty and colleagues, as they did at Center programs last year on 
intellectual property and on developments in human genetics and other 
scientific topics.
    Distance education, however, is also important in this kind of 
education. Thus, the Center is publishing this year the second edition 
of its Reference Manual on Scientific Evidence (with a Foreword by 
Justice Stephen Breyer). The Manual, which will be available on our 
Website (and to private publishers) to facilitate access by attorneys, 
will help bench and bar deal with scientific and technical evidence 
efficiently and effectively.
    We are also working with the Board of Editors of the Center's 
Manual on Complex Litigation to produce a fourth edition of this 
standard reference work. The new edition will take account, among other 
things, of the changes created by recent case law and other 
developments in class actions and mass tort litigation. A basis for 
this work is the three expansive analyses of the mass torts phenomenon 
that the Center provided the Judicial Conference's Advisory Committee 
on Civil Rules and its Working Group on Mass Torts. These analyses 
formed a large part of the materials in the Working Group's report to 
the Chief Justice.
    Private publishers, of course, may produce their own versions of 
Center publications for sale to the public and the bar. The Center 
encourages these sales, along with sales through the Government 
Printing Office, because pretrial and trial proceedings are likely to 
be more efficient when bench and bar have access to the same basic 
reference material. One of the leading legal publishers recently 
reported that the top ten titles that it sells to federal agencies 
include its editions of the Center's Manual for Complex Litigation and 
Reference Manual for Scientific Evidence.
    Finally, later this year we will broadcast a six part series on 
science in the courtroom. The first three parts will deal with the 
scientific principles of DNA research and their application in patent 
cases. The second three parts will be about toxicology and epidemiology 
and their application in mass tort cases.
            Court-appointed experts
    At the request of the American Association for the Advancement of 
Science, the Center is evaluating the Association's demonstration 
project that provides the names of scientists and other professionals 
to serve as court-appointed experts. To help the Judicial Conference 
evaluate the results of funds it provided for a national panel of 
court-appointed scientists in the national breast implant litigation, 
the Center has recently completed a detailed analysis of the process 
and suggestions for improving it.
            Assessing the effect of technology on the litigation 
                    process
    Technology increasingly pervades the work of the federal courts. 
Two Center projects are helping the courts adapt to these changes. One 
project involves how the pretrial discovery process copes with 
information stored in electronic records, many in archaic and 
unreadable formats. The Center is documenting the extent of this 
problem, so that the Rules Committees can consider whether rules 
changes are in order.
    A second project covers the increasing use by attorneys of computer 
simulations, video depositions, and other technology for presenting 
evidence. Recognizing the Center's reputation with federal judges, the 
not-for-profit National Institute for Trial Advocacy (NITA) offered in 
January to work with the Center to prepare, for Center dissemination, a 
manual for judges describing various courtroom technologies and 
identifying how to permit their use in ways that are consistent with 
fairness and efficient case management. (NITA, headquartered at Notre 
Dame Law School, was founded almost thirty years ago by judges and 
litigators to promote ethics, candor, civility, and judicial economy in 
litigation.) This manual is part of a larger Center project to identify 
how electronic evidence technologies are used and to examine whether 
the current procedural and evidence rules are adequate to handle this 
development. It will join some ten other Center manuals that provide 
judges ready reference for problems that confront them.
            Education about international and foreign law and 
                    management of transnational litigation
    The Center, pursuant to statute, has long provided briefings and 
occasional seminars for judges of foreign countries on United States 
law and practice. (Center appropriations are not used for the direct 
costs of these programs.) Foreign interest in U.S. legal institutions 
is a product of the globalization of law, commerce, and crime, as is 
the specific interest of many foreign judges in creating an agency like 
the Federal Judicial Center.
    By the same token, and at a growing pace, events outside our 
borders are influencing litigation in federal courts, and such 
influence will grow. For example, treaties to which the United States 
is a signatory are part of the body of law that federal judges apply. 
As U.S. treaty obligations grow, judges will need to know about them. 
Additionally, the globalization of both commerce and crime brings 
foreign parties and agents into federal litigation. These entities will 
have varying levels of familiarity with, and willingness to embrace, 
federal judicial procedural rules and norms. Litigation over 
intellectual property is only one example of this development. Judges 
also report increasing difficulty in gaining access to evidence and 
witnesses on foreign soil.
    These challenges of transnational litigation, however, will not 
affect federal courts uniformly. Judges will vary considerably in their 
need for education to manage and decide cases involving foreign parties 
and extra-territorial law. As with other new problems, however, when 
they need help, they will need it quickly--not once a seminar is 
scheduled. This is another area in which educational technology will 
help us meet varying judicial education needs. The Center is exploring 
how to adapt its growing familiarity with asynchronous judicial 
education to provide individual judges education to deal effectively 
with transnational litigation at the time the need arises.
    Mr. Chairman and Members of the Committee: Thank you again for your 
continued support of the Center and your encouragement for our 
development of the full range of educational technologies. You have 
played an important role in helping the personnel of the federal courts 
stay current in a rapidly changing world. I would be pleased to try to 
answer any questions you may have, either during the hearing or by 
written submission.
                                 ______
                                 
Prepared Statement of Haldane Robert Mayer, Chief Judge, United States 
                Court of Appeals for the Federal Circuit

    Mr. Chairman, I am pleased to submit my statement to the Committee 
for this court's fiscal year 2001 budget request.
    Our 2001 budget request totals $19,533,000. This is an increase of 
$2,688,000 over the 2000 approved appropriation of $16,845,000. Forty 
one percent of the requested increase, $1,089,000, is for mandatory, 
uncontrollable increases in costs. The remaining increase of $1,656,000 
is for funding of additional positions and renovation of our 
courtrooms.

Request for Program Increases
    $1,656,000 of our fiscal year 2001 request would cover the costs of 
five statutorily authorized positions for technical assistants for the 
court's legal staff, four additional positions for the office of the 
Clerk of Court, and funding to upgrade the Federal Circuit courtrooms. 
Further justification for these increases follows.
    Funding for Five Technical Assistants ($600,000).--The court is 
requesting five technical assistants in addition to the three now 
working in the Office of the Senior Technical Assistant and the 
positions provided in our fiscal year 2000 budget. Under the provisions 
of 28 U.S.C. Sec. 715(d) the court may appoint technical assistants 
equal to the number of judges in regular active service. The five 
technical assistants requested here, plus those currently on board, 
will give the court one technical assistant for each active judge 
position.
    The technical assistants do research and assist the court and all 
of its judges in addressing technical aspects of appeals, maintaining 
consistency in precedential opinions, and otherwise fulfilling the 
court's mission. Technical assistants must have not only a law degree 
but also a background in science or engineering because of the 
significant number of highly technical intellectual property appeals 
handled by the court. This court has exclusive jurisdiction over patent 
appeals from district courts and the Patent and Trademark Office. These 
appeals often are most difficult and time consuming, and involve 
complex issues at the forefront of biotechnology, computer engineering, 
pharmacology, and other areas of science and engineering.
    Funding for additional positions in the office of the Clerk of 
Court ($156,000).--The court also is requesting funds to hire four 
full-time positions in the Clerk's Office. These positions are needed 
to keep pace with the court's growing jurisdiction and increasing 
caseload. There is now only one secretary in the Clerk's Office. 
Another secretary position is needed to assist the chief deputy clerks 
and to insure that secretarial functions for the entire office, now 
exclusively provided by the secretary to the Clerk, are available 
whenever required. A systems manager position is needed because the 
complexity of the Clerk's database management system has grown beyond 
the competence of the nontechnical staff to maintain as extra duties. 
Two deputy clerk positions are needed, one position for a calendar/
deputy clerk to alleviate the calendar functions now performed by the 
chief deputy clerk as an extra duty, and one position for a records 
manager to develop a records management system now required to keep 
pace with the large increase in the permanent records which the court 
has accumulated since its creation, and which must be maintained and 
preserved.
    Funding for Courtroom Renovations ($900,000).--The court is 
requesting $900,000 for use to update the three Federal Circuit 
courtrooms. This courthouse opened in 1967. With the exception of 
replacement carpet, there have been no renovations or upgrades 
performed in our courtrooms.
    The funding will be used to update courtrooms, furniture, renovate 
counsel rooms, and upgrade the security of the Judges' benches. Funds 
also will be used to improve electronic capabilities in the three 
courtrooms. The courtrooms' lighting fixtures require upgrading and 
modernization, and the courtrooms need to be rewired for computer use, 
modern recording equipment, and improved technology. This is a one-time 
cost and would be reflected as a nonrecurring expense in our 2002 
budget request.
    I would be pleased, Mr. Chairman, to answer any questions the 
Committee may have or to meet with Committee members or staff about our 
budget requests.
                                 ______
                                 
  Prepared Statement of Gregory W. Carman, Chief Judge, United States 
                      Court of International Trade

    Mr. Chairman, Members of the Committee: Thank you for allowing me 
this opportunity to submit this statement on behalf of the United 
States Court of International Trade, which is a national trial-level 
federal court established under Article III of the Constitution with 
exclusive nationwide jurisdiction over civil actions pertaining to 
matters arising out of the customs and international trade laws.
    The Court's budget request for fiscal year 2001 is $12,506,000, 
which is $535,000 or approximately 4.5 percent more than the 
$11,971,000 provided for in the fiscal year 2000 appropriation. The 
request will enable the Court to maintain current services and provide 
funds for pay adjustments for judicial officers and court personnel, 
and inflationary increases in travel costs, rent, postage, contract 
rates, supplies, equipment, services, telephone usage and acquisition 
of law books.
    I would like to specifically point out that the Court is only 
requesting, as it has for over five years, standard inflationary 
adjustments to base. The Court has relied on vacancies and savings from 
its conservative approach to spending to provide for implementation of 
important new initiatives, including technological upgrades.
    The Court's fiscal year 2001 request includes funds for finalizing 
and supporting the reorganization plan of the Case Management Section 
that was initially developed and implemented in fiscal year 2000. The 
reorganization specifically addresses three goals of the Court's Long 
Range Plan: ensuring that the judges, members of the bar and the public 
are provided with quality assistance by the staff; increasing 
efficiency and reducing opportunities for delay in case processing and 
management; and implementing the Case Management and Electronic Case 
Files System (CM/ECF) of the Administrative Office of the United States 
Courts. To this end, the fiscal year 2001 request includes funds for 
filling vacant positions and for maintaining and supporting several 
projects from fiscal year 2000, specifically: a networked record 
management and tracking system for all case records; a new switched 10/
100/1000mbps LAN infrastructure network; video conferencing; and a new 
laser system that allows for more reliable and faster access to the 
DCN. The fiscal year 2001 request also includes funds for the support 
and maintenance of the Court's security system upgrades, implemented in 
fiscal years 1999 and 2000.
    In fiscal year 1996, the Court made the decision to deposit funds 
into the Judiciary Information Technology Fund (JITF) to address the 
long-term technology needs of the Court and to establish a viable 
network infrastructure. Funds were deposited into the JITF in fiscal 
years 1996, 1997, 1998 and 1999.
    In fiscal year 1999, the Court developed a five-year plan to 
support the Court's future needs and to harness technology to enhance 
its services to the Court family, the bar and the public. The plan 
includes several new projects: the implementation of the Administrative 
Office's Case Management and Electronic Case Files System (CM/ECF) that 
will create a seamless electronic environment by combining an 
integrated case management system with electronic filing, document 
imaging and scanning; the replacement of the Court's present CD-ROM 
tower, which is used for legal research, with a higher capacity model; 
the replacement of older category 3 wire with enhanced category 5 wire 
and the installation of additional data tap runs for public access 
terminals; the design and acquisition of a new phone system that will 
improve and expand the Court's telecommunications system; the 
implementation of a Court Intranet Web server to facilitate sharing of 
Court information and expand in-house training in the utilization of 
automation and technology; and the acquisition of an automated 
comprehensive management software package for library acquisitions, 
cataloging and circulation. The Court anticipates that these systems 
will be fully operational by the end of fiscal year 2004. The 
continuation of fiscal year 2000 projects and the implementation of 
these new initiatives will enable the Court to continue to build its 
needed infrastructure and operate efficiently and effectively in the 
21st Century.
    I would like to reaffirm that the Court has always been 
conservative in its appropriation requests and will continue, as it has 
in the past, to conserve its financial resources through sound and 
prudent personnel and fiscal management practices.
    The Court's ``General Statement and Information'' and 
``Justification of Changes,'' which provide more detailed descriptions 
of each line item adjustment, were submitted previously.
    If the Committee requires any additional information, we will be 
pleased to submit it.
                                 ______
                                 
Prepared Statement of Diana E. Murphy, Chair, United States Sentencing 
                               Commission

                              INTRODUCTION

    Mr. Chairman, members of the Committee, thank you for the 
opportunity to submit a statement on behalf of the United States 
Sentencing Commission's fiscal year 2001 appropriation request. As you 
know, on November 15, 1999, a full complement of seven voting 
commissioners was appointed to the Commission, and I am proud to serve 
as Chair of this important agency. We take our new responsibilities so 
seriously that we met the day after our appointment in Washington, 
D.C., for two days and adopted a very ambitious agenda we hope to 
accomplish this amendment cycle.
    As a group, we bring a great deal of experience and several 
different perspectives to our new job. We look forward to strengthening 
the good working relationship with Congress and others in the federal 
criminal justice community. Among the seven voting and two non-voting 
members of the Commission, five of us are federal judges, three of us 
have prosecutorial experience, two of us have criminal defense 
experience, two of us formerly were police officers, several of us have 
had prior experience working as congressional staff, and one of us has 
spent a number of years as general counsel for the Commission.
    Our appointment ended an extended and unprecedented period of more 
than a year, during which time the Commission was without any voting 
commissioners. Unfortunately, these vacancies have had the effect of 
significantly decreased appropriations for the Commission and have 
created staffing shortages that have gone unaddressed. During the 
appropriations process for fiscal year 2000, there was substantial 
uncertainty as to the requirements for the Commission due to the 
commissioner vacancies. As a result, the Commission's budget was 
reduced to $8,468,000 for fiscal year 2000, an 11 percent decrease from 
fiscal year 1999 and the lowest appropriation for the agency since 
fiscal year 1994.
    Regrettably, the cutback comes at a time when the agency bears an 
extraordinarily heavy workload due to the extended absence of 
commissioners and the many legislative directives that await Commission 
implementation. During that period, of course, the Commission could not 
fulfill its most important ongoing statutory responsibility under the 
Sentencing Reform Act, that is, to update and promulgate amendments to 
the sentencing guidelines for federal offenders. As a result, a 
significant backlog of crime and sentencing related legislation has 
accumulated that must be addressed by the new Commission.
    In light of the circumstances we face, the Commission requests an 
appropriation of $10,600,000 for fiscal year 2001, the same as 
requested last year. This funding level is the bare minimum necessary 
to enable the Commission to restore staff levels to that of fiscal year 
1998, the last year the agency had a fully functional Commission in 
place, and to fulfill all of our many statutory responsibilities. 
Without an adequate budget, we cannot effectuate the will of Congress 
as expressed in a number of important legislative items that await 
Commission implementation. Since our November 15, 1999, appointment, we 
have undertaken a very full agenda in this abbreviated amendment cycle, 
addressing many legislative directives and circuit conflicts in 
guideline interpretation. We are hard at work and hope that Congress 
will reaffirm its belief in the mission of the Commission and its 
confidence in us by restoring the Commission's funding to an adequate 
level.

                          RESOURCES REQUESTED

    The Commission's budget request is for $10,600,000. The Commission 
now has 20 percent less staff than in fiscal year 1998, and nearly 70 
percent of the requested increase ($1,487,000) is for restoration of 
personnel. More than 30 percent of the requested increase ($595,000) 
would fund adjustments needed to pay employees to continue current 
operations; these are mandatory adjustments in salaries and benefits 
and slight inflationary increases ($78,000) in some non-personnel 
expense categories.
    The amount needed to restore our ability to function effectively is 
made up of ``Adjustments to Base.''
  --$595,000 is requested for pay and benefit cost adjustments
  --$78,000 is requested for inflationary increases for non-personnel 
        operating expenses
  --$1,487,000 is requested for restoration of personnel
  --($28,000) for one less compensable day.
    The requested amount is an increase of $2,132,000 from the 
Commission's fiscal year 2000 appropriation, but that appropriation was 
an anomaly from previous years and came at a time when the Commission 
had no voting commissioners. In terms of total obligations, the agency 
has a funding level of $9,553,000 for fiscal year 2000 by combining the 
appropriations with remaining carryover money earmarked for this fiscal 
year. Compared to this figure, the fiscal year 2001 request represents 
an increase of only $1,047,000 (approximately 11 percent) over 
resources available in fiscal year 2000.

                             JUSTIFICATION

Sentencing Reform Act Requirements
    The Commission was created under the Sentencing Reform Act of 1984 
as a permanent, independent agency within the judicial branch. Congress 
gave the Commission a dual mission. The most urgent at the time was to 
establish federal sentencing policies and practices that (i) serve four 
purposes of sentencing: just punishment, adequate deterrence, 
protection of the public from further criminal conduct, and 
rehabilitation of offenders; (ii) provide certainty and fairness in 
sentencing; and (iii) avoid unwarranted sentencing disparities among 
similarly situated offenders.
    The Commission was organized in October 1985, and in just 18 
months, established the first comprehensive set of determinate 
sentencing guidelines ever created for the federal judicial system. The 
federal sentencing guidelines became effective on November 1, 1987, for 
offenses occurring on or after that date, and since their 
implementation have been used to sentence more than 400,000 defendants. 
The Commission believes that the federal sentencing guidelines have 
advanced the goals of Congress as expressed in the Act by providing 
certain, fair, and markedly more uniform punishment for similar 
offenders, which in turn has strengthened the ability of the criminal 
justice system to combat crime.
    The Sentencing Reform Act also assigned to the Commission another 
mission critical to the federal criminal justice system: to serve as an 
expert agency on federal sentencing matters. To fulfill this ongoing 
mission, the Commission was given continuing responsibility and 
authority in many areas, including--
    (1) establishing sentencing policies and practices that assure that 
the purposes of sentencing are met, that provide certainty and fairness 
in meeting those purposes of sentencing, that avoid unwarranted 
sentencing disparities while maintaining enough flexibility for 
individualized sentences when those are warranted, and that reflect 
advancements in our knowledge of human behavior as it relates to the 
criminal justice process;
    (2) developing means to measure the effectiveness of sentencing, 
penal, and correctional practices in meeting the purposes of 
sentencing;
    (3) promulgating and updating sentencing guidelines for federal 
offenders;
    (4) monitoring the performance of probation officers regarding 
sentencing recommendations, including application of the guidelines;
    (5) issuing instructions to probation officers concerning the 
application of the guidelines;
    (6) establishing a research and development program within the 
Commission to serve as a clearinghouse and information center for 
information on Federal sentencing practices;
    (7) consulting with federal courts, departments, and agencies in 
developing, maintaining, and coordinating sound sentencing practices;
    (8) systematically collecting data from studies, research, and the 
empirical experience of public and private agencies concerning the 
sentencing process;
    (9) publishing data concerning the sentencing process;
    (10) systematically collecting and disseminating information 
concerning sentences actually imposed on more than 55,000 cases 
sentenced in the Federal district courts each year (and on about 1,000 
appellate decisions on sentencing) and the relationship of those 
sentences to the factors judges are required to consider under 18 
U.S.C. Sec. 3553(a);
    (11) systematically collecting and disseminating information 
regarding the effectiveness of sentences imposed;
    (12) conducting seminars and workshops around the country to 
provide continuing studies for people engaged in the sentencing field;
    (13) conducting periodic training programs for judicial and 
probation personnel and other persons connected with the sentencing 
process;
    (14) studying the feasibility of developing guidelines for juvenile 
offenders;
    (15) making recommendations to Congress on changes that might be 
made to statutes relating to sentencing, penal, and correctional 
matters that would help to carry out effective, humane, and rational 
sentencing policy;
    (16) holding hearings and calling witnesses to assist the 
Commission in the exercise of its powers and duties;
    (17) recommending any changes in prison facilities that may be 
necessary because of the sentencing guidelines; and
    (18) performing any other functions necessary to permit federal 
courts and others in the federal criminal justice system to meet their 
responsibilities in the sentencing area.

Newly Appointed Commissioners Face Critical Backlog of Legislation
    Although the Commission staff was able to carry out many of these 
important statutory duties during the extended absence of voting 
commissioners, the agency could not amend the sentencing guidelines to 
implement recently enacted crime and sentencing-related legislation. As 
a result, the newly appointed Commission faces a significant backlog of 
legislation that waits review and implementation by the agency. The 
newly minted Commission has made addressing these items its first 
priority for the current guideline amendment cycle, which ends May 1, 
2000.
    The legislative matters that await Commission action cover a wide 
range of criminal conduct that is of great concern to Congress and 
other members of the federal criminal justice system:
  --Intellectual Property Offenses.--In response to the No Electronic 
        Theft (``NET'') Act of 1997, the Commission released a staff 
        report on the NET Act and recently requested and received 
        public comment on three alternative proposals that would amend 
        the copyright and trademark infringement guideline to ensure 
        that the guideline is sufficiently stringent to deter such 
        offenses and that it provides for consideration of the retail 
        value of the infringed item. The Commission continues to 
        analyze and develop possible amendments to the guideline and, 
        pursuant to the Digital Theft Deterrence and Copyright Damages 
        Improvement Act of 1999, must promulgate a temporary emergency 
        amendment in response to the NET Act by April 6, 2000.
  --Telemarketing Fraud.--In response to the Telemarketing Fraud 
        Prevention Act of 1998, the Commission promulgated temporary 
        amendments to the guidelines that provide for three separate 
        sentencing enhancements for fraud offenses that involve mass 
        marketing, a large number of vulnerable victims, and the use of 
        sophisticated means to carry out the offense. The Commission 
        must review and repromulgate the emergency amendments as 
        permanent amendments by May 1, 2000, or they will expire by 
        November 2000.
  --Telephone Cloning.--In response to the Wireless Telephone 
        Protection Act of 1998, the Commission recently released a 
        staff report on cell telephone cloning and requested public 
        comment on proposed options for amending the guidelines to 
        provide an appropriate penalty for these offenses.
  --Identity Theft.--In response to the Identity Theft and Assumption 
        Deterrence Act of 1998, the Commission recently released a 
        staff report on identity theft and requested public comment on 
        amending the guidelines to provide an appropriate penalty for 
        each offense under 18 U.S.C. Sec. 1028 (relating to fraud in 
        connection with identification documents).
  --Protection of Children.--In response to the Protection of Children 
        from Sexual Predators Act of 1998 and certain provisions of the 
        Omnibus Consolidated and Emergency Supplemental Appropriations 
        Act of 1998, the Commission has recently released a staff 
        report on sexual offenses against children and requested public 
        comment on a number of options for amendments to the guidelines 
        pertaining to certain sexual abuse offenses and distribution of 
        child pornography. Possible amendments being considered include 
        an enhancement for use of a computer in connection with a 
        sexual abuse offense against a minor and misrepresentation of 
        an offender's identity in connection with such an offense.
  --Methamphetamine Trafficking.--Although the Methamphetamine 
        Trafficking Penalty Enhancement Act of 1998 contains no 
        directive to the Commission, the Commission recently released a 
        staff report on methamphetamine trafficking and requested 
        public comment on an amendment to the guidelines' drug quantity 
        table that would account for the increased penalties for 
        manufacturing, importing, or trafficking in methamphetamine 
        imposed by the Act. The Act reduced by one-half the quantity of 
        methamphetamine required to trigger various mandatory minimum 
        sentences in the drug statutes.
  --Firearms Offenses.--In Public Law 105-386, Congress amended 18 
        U.S.C. Sec. 924(c) to create a tiered system of sentencing 
        enhancements, (each with a mandatory minimum and presumed 
        maximum) in cases in which a firearm is involved in a crime of 
        violence or drug trafficking offense. The pertinent minimum 
        sentence in that tiered system is dependent on whether the 
        firearm was possessed, brandished, or discharged. The Act also 
        changed the statutory definition of ``brandish.'' These 
        legislative changes will require a number of amendments to the 
        guidelines, including amendments that incorporate the tiered 
        statutory sentencing scheme into the guideline pertaining to 
        Section 924(c). In response to this new legislation, the 
        Commission recently released a staff report on firearms 
        offenses and requested public comment on a number of proposals 
        for amending the guidelines. The Commission also is undertaking 
        a longer term comprehensive examination of the firearms and 
        explosives guidelines to make them more internally consistent 
        with other similar guideline provisions and to generally 
        improve their operation.
    Circuit Conflicts.--In addition to these legislative items, a large 
number of conflicts among the United States Circuit Courts of Appeal 
regarding interpretation of the guidelines accrued during the absence 
of voting commissioners. In Braxton v. United States, 500 U.S. 344 
(1991), the United States Supreme Court unanimously acknowledged that 
the Commission has the initial and primary task of eliminating 
conflicts among the circuit courts with respect to statutory 
interpretation of the guidelines. Accordingly, the Commission has set 
addressing a limited number of the most significant conflicts as 
another priority for the current guideline amendment cycle.
    This amendment cycle the Commission is working on circuit conflicts 
regarding (i) the circumstances for which a court may downward depart 
from the sentencing guideline range for aberrant behavior; (ii) whether 
the enhanced penalties in Sec. 2D1.2 (Drug Offenses Occurring Near 
Protected Locations or Involving Underage or Pregnant Individuals) 
apply only when the defendant is convicted of an offense referenced in 
that guideline or, alternatively, whenever a defendant's relevant 
conduct included drug sales in a protected location or involving a 
protected individual; (iii) whether the enhancement in the fraud 
guideline for violation of a judicial or administrative order, 
injunction, decree, or process applies to falsely completing bankruptcy 
schedules and forms; (iv) whether sentencing courts may consider post-
conviction rehabilitation while in prison or on probation as a basis 
for downward departure at resentencing following an appeal; and (v) 
whether a court can base an upward departure on conduct that was 
dismissed or uncharged as part of a plea agreement.
    Other Crime Legislation.--In fiscal year 2001, in addition to 
completing any carryover items from the items listed above, the 
Commission hopes to expand its policy development to include responding 
to other crime legislation pertaining to nuclear, chemical, and 
biological weapons, specifically the Chemical Weapons Implementation 
Act of 1998, and the sense of Congress expressed in the National 
Defense Authorization Act for Fiscal Year 1997. The Commission is 
planning to conduct a comprehensive review of the guidelines pertaining 
to importing and exporting nuclear, biological, and chemical weapons to 
determine whether any amendments to the guidelines are warranted. The 
Commission hopes to complete this work in 2001.
    Economic Crime Guidelines.--Also in fiscal year 2001, the 
Commission hopes to complete a comprehensive reassessment of the 
economic crime guidelines that was begun by the last Commission. 
Economic offenses account for more than a quarter of all the cases 
sentenced in the United States federal district courts. The prior 
Commission had received from the Federal Judiciary and the Department 
of Justice testimony and survey results that indicated that the 
sentences for these offenses were inadequate to punish appropriately 
defendants in cases in which the monetary loss was substantial. After 
approximately one year of data collection, analyses, public comment, 
and public hearings, the Commission developed a comprehensive 
``economic crime package'' designed to revise the loss tables for 
fraud, theft, and tax offenses in order to impose higher sentences for 
offenses involving moderate and large monetary losses. Related 
amendments would consolidate the theft, fraud, and property destruction 
guidelines and clarify the definition of loss for selected economic 
crimes. Working in conjunction with the Criminal Law Committee of the 
Judicial Conference, the Commission conducted a field test of the 
proposed loss definition by surveying federal judges and probation 
officers and applying the new definition to actual cases. Among the 
findings from the field test, more than 80 percent of the judges stated 
that the proposed loss definition produced results that were more 
appropriate than the current definition.
    The Commission expects that the groups interested in the economic 
crime package (e.g., the Department of Justice, the Criminal Law 
Committee of the Judicial Conference, and the American Bar Association) 
will renew their recommendations that this package be a top priority 
for 2001. Accordingly, the Commission has planned an Economic Crimes 
Symposium in October 2000 to further advance sentencing policy 
development and knowledge with respect to economic crimes.

Restoration of Personnel Needed to Meet Statutory Duties
    Fulfilling all of the agency's responsibilities has been extremely 
difficult recently because of the absence of voting commissioners for 
more than one year, which has had the unfortunate effect of decreased 
appropriations and have created staffing shortages that have gone 
unaddressed. Beginning in the first month of fiscal year 1999, the 
Commission was without any voting commissioners and this status 
continued through the first quarter of fiscal year 2000. In 
anticipation of a significant reduction in funding as a result of this 
unfortunate status, and the uncertainty about when the vacancies would 
be filled, the Acting Staff Director for the Commission determined it 
prudent to institute a de facto hiring freeze. The hiring freeze, 
coupled with the agency's normal attrition rate, has reduced the 
current staffing levels from that of fiscal year 1998 by twenty 
percent.
    The Commission has coped with the austere budget and staffing 
shortages in large part by extending deadlines for policy development 
projects beyond the annual guideline amendment cycle ordinarily used by 
the Commission to timely implement crime legislation. In so doing, the 
Commission has been able to maintain its routine training, research, 
monitoring, and publications schedule throughout the year. However, 
this was a short-term measure that was made possible only by the 
anomaly of not having any voting commissioners for more than one year. 
Now that a full complement of commissioners is in place, policy 
development deadlines can no longer be prolonged and, in fact, must be 
shortened in order to address the backlog described above in a timely 
manner.
    While the commissioners work to reduce the backlog of unimplemented 
crime legislation and to consider the policy development reports 
prepared by staff, the human resource needs of the agency will increase 
as the routine annual amendment cycle is reestablished, new policy 
initiatives are identified by the reconstituted Commission, and new 
crime legislation is enacted by Congress. Indeed, there is pending 
legislation relating to juvenile justice, firearms offenses, and 
certain drug offenses, which, if enacted, would require significant 
Commission resources to implement. In order to become a fully 
functional agency that performs all of its statutory functions in an 
exemplary manner, a restoration of personnel is necessary, particularly 
in the following areas:

Reestablishment of Statutorily Required Research and Monitoring 
        Functions
    The Commission maintains a comprehensive, computerized data 
collection system which forms the basis for its clearinghouse of 
federal sentencing information. This comprehensive database is the 
basis for the Commission's monitoring and evaluation of guidelines 
application, for many of its research projects, and for responding to 
the hundreds of data requests received from Congress and other criminal 
justice entities each year.
    In fiscal year 1999, the Commission received court documents for 
more than 55,000 cases sentenced under the Sentencing Reform Act 
between October 1, 1998, and September 30, 1999. For each case, the 
Commission extracts and enters into its comprehensive database more 
than 260 pieces of information, including case identifiers, sentence 
imposed, demographic information, statutory information, the complete 
range of court guideline application decisions, and departure 
information.
    The Commission also tracks final opinions and orders, both 
published and unpublished, in federal criminal appeals. The Commission 
gathered information on more than 6,000 appellate court cases in fiscal 
year 1998 and now has an appeals dataset containing information on more 
than 38,000 appeals. Information captured in this database includes 
district, circuit, dates of appeal and opinion, legal issues, and the 
court's disposition. The appeals database informs the Commission 
regarding the frequency with which specific guideline issues are 
appealed, informs Congress and the criminal justice community about 
court action related to the guidelines, and enables the Commission to 
identify and, where appropriate, resolve circuit conflicts pertaining 
to application of the guidelines.
    The Commission continues to see a substantial increase in the 
number of cases sent to the agency that must be entered into its 
comprehensive database. The current data entry organizational structure 
and physical facilities were designed to accommodate approximately 
35,000 to 45,000 cases annually. However, for the past three years, the 
agency has received more than 50,000 case files, with a projected 
caseload of 56,000 for fiscal year 2001. Funding for three vacant data 
entry positions is requested to process these cases. In addition, the 
Commission requests funding to fill a key vacancy, the Chief Data 
Quality Analyst position, and to provide for an additional junior Data 
Quality Analyst position, in order to preserve the integrity of its 
comprehensive database.
    The Commission continues to advance its statutorily directed 
research and information dissemination. Each year since the inception 
of the guidelines, the Commission has published an updated Guidelines 
Manual and an Annual Report and accompanying Sourcebook of Federal 
Sentencing Statistics which serve to inform and advance knowledge of 
sentencing in the criminal justice community. In recent years, the 
Commission launched two new publications, Guide to Publications and 
Resources and The Year in Review, and continued to add a variety of 
publications and sentencing data to its popular Internet web site.
    Working with the American Society of Criminology, the Commission 
recently prepared and presented a number of research papers on 
important topics of current interest such as federal and state 
counterfeiting offenses in the computer age, federal sentencing 
practices for immigration offenses, prison verus alternative 
confinement, and the effects on federal sentencing of the changing mix 
of policies, crimes, and criminals. Commission staff have identified a 
number of future research projects that for consideration, including an 
analysis of sentence proportionality under the guidelines, the violent 
offense guidelines, the effectiveness of criminal history assessment 
within the guidelines, classifying offender function in drug 
trafficking offenses, patterns in offender recidivism under the 
guidelines, and the effectiveness of offender incapacitation under the 
guidelines.
    The ability of the Commission to continue its important research, 
however, is imperiled by a depletion of its research staff. During this 
recent period of attrition, a significant portion of the intermediate 
tier of researchers and all of the lower tier research associates left 
the agency. Thus, the Commission requests funding to fill three 
Research Associate and three Junior Research Associate positions, as 
well as the critical position of Director of Research. Without the 
funding necessary to fill these key positions, the agency's ability to 
critically analyze sentencing patterns and practices, to respond to 
inquiries about the effectiveness of sentencing policies, and to assess 
the impact of proposed guideline amendments and new sentencing related 
legislation will be severely limited.

Maintaining the Agency's Statutory Commitment to Sentencing Education
    The Commission continues its commitment to providing high quality 
training and assistance to judges, prosecutors, probation officers, and 
defense attorneys as required by the Sentencing Reform Act. In 1999, 
Commission staff provided training on the sentencing guidelines to more 
than 2,500 individuals at 47 training programs across the country, 
including ongoing programs sponsored by the Commission, the Federal 
Judicial Center, the Department of Justice, the American Bar 
Association, and other criminal justice agencies. The Commission also 
maintains a telephone HelpLine service to answer case-specific 
guideline application inquiries from federal judges, probation 
officers, prosecuting and defense attorneys, and law clerks. The 
Commission responds to approximately 250 such inquiries each month. If 
the Commission is not provided sufficient funding to restore personnel 
in other areas of the agency, its quality of training will suffer 
because its training staff may have to be utilized for more pressing 
projects as they arise.
    To further expand the availability of training and information 
sharing, the Commission has joined the Federal Judicial Center and the 
Administrative Office of the U.S. Courts in launching a satellite 
television network to provide cutting-edge programming on sentencing-
related issues to an even broader audience. The Commission makes a 
regular contribution to a news series for probation and pretrial 
services designed to update officers on important information regarding 
the Commission and its activities. In 2001, the Commission plans to 
increase its involvement in the delivery of training via the television 
network as a cost-effective means of supplementing its existing 
training efforts.
    As part of its efforts to reach out to organizations that are not 
yet familiar with the organizational sentencing guidelines' emphasis on 
compliance, self-policing, and crime reporting, the Commission and the 
Ethics Officer Association (EOA) in 1999 jointly sponsored a series of 
day-long regional forums about implementing these guidelines. The EOA 
is a non-profit peer organization comprising ethics and compliance 
officer representatives of for-profit and non-profit organizations. Its 
primary objective is to share ``best practices'' for ethics and 
compliance programs among members through peer-to-peer networking, 
library services, and educational efforts. The Commission tentatively 
has scheduled an Organizational/Corporate Guidelines Symposium in 
October 2001 to advance further its efforts in this important area.

Informing Congress
    Each year the Commission also informs Congress's legislative 
deliberations by responding to hundreds of congressional requests for 
assistance. These inquiries, both written and oral, include requests 
for federal sentencing and criminal justice data, analyses of proposed 
legislation, explanations of guideline operation, technical assistance 
in drafting legislation, and Commission publications and resource 
materials.
    With a full complement of new commissioners in place, the agency 
expects its overall activity will intensify, and requests from Congress 
and the public will greatly increase. As a result, the Commission needs 
to improve its congressional liaison activities and requests two 
positions for this effort.

Rebuilding Administrative Support
    Beginning in fiscal year 1996, the Commission began a long range 
software upgrade to the automation system used to maintain its 
sentencing database. This work is substantially complete. During the 
recent period of attrition, however, the agency's lead programmer 
retired, leaving a contractual relationship with Oracle Corporation as 
the only guard against a systems failure. If a major failure should 
occur, it would cause a work stoppage involving approximately 30 data 
entry employees, possibly over an extended period of time. Therefore, 
the agency requests funding to hire an automation technician/programmer 
as well as a lower level database administrator to maintain the new 
system.
    Also as part of its statutory duty to serve as a clearinghouse of 
sentencing related information, the Commission maintains a highly 
specialized collection of sentencing related literature that has been 
built up over the past ten years. That important collection has gone 
unattended (other than by intermittent temporary services) since the 
the agency's librarian and assistant librarian resigned during the 
period with no commissioners. The agency requests funding to fill these 
two positions in order to maintain the integrity of its collection.
    Other administrative positions that require filling include a 
support position shared by two offices, the Legislative and Public 
Affairs Offices, and a personnel specialist in the Human Resources 
Office.
    Filling all of these requested positions would not require revising 
the Commission's full time equivalency ceiling of 108 employees. 
Rather, the Commission merely seeks the restoration of funds for 
currently existing but vacant positions.

                               SUMMATION

    In sum, the Commission is asking for sufficient funding so that we 
can perform our many statutory obligations and fulfill our important 
role in combating crime by maintaining an effective, certain, and fair 
sentencing system.
                                 ______
                                 
                          INDEPENDENT AGENCIES

                          THE ASIA FOUNDATION

           Prepared Statement of William P. Fuller, President

    Mr. Chairman: Thank you for the opportunity to submit testimony 
supporting The Asia Foundation's fiscal year 2001 budget request. The 
Foundation is grateful for the support that the Congress and this 
Committee have provided over the years.
    I appreciate the opportunity to outline The Asia Foundation's 
programs and our future plans to meet the challenges and opportunities 
facing Asia. We believe that our programs demonstrate how a small, 
independent organization can advance American interests in the Asia-
Pacific region.
    We are pleased that the Administration has endorsed the work of The 
Asia Foundation by requesting an appropriation of $10 million for 
fiscal year 2001. This modest increase would enable the Foundation to 
resume program activities that were reduced as a result of the 
substantial budget cuts which the Foundation sustained beginning in 
fiscal year 1996. Most importantly, the increase would enable the 
Foundation to expand its support to Asian organizations that are 
positioned to play key roles in regional democratic and economic reform 
efforts.

                                OVERVIEW

    Let me put the work of the Foundation into context. Asia is the 
most rapidly changing region in the world, and one in which the U.S. 
has a diverse range of political, economic and security interests. As 
the region recovers from the recent economic crisis, continued 
governance reforms and the establishment of predictable legal systems 
are essential for sustained growth and open trade and investment. At 
the same time, the region faces increased security concerns, including 
tension on the Korean Peninsula; the possibility of conflict between 
India and Pakistan; strained relations between China and Taiwan; and 
the potential for domestic instability in Pakistan and Indonesia. The 
dramatic emergence of democracy in Indonesia, constitutional reform 
efforts in Thailand, and the recent election in Taiwan underline the 
opportunities and challenges facing those who support democracy.
    We believe that The Asia Foundation, building on its 46 years of 
on-the-ground experience, is well positioned to advance U.S. interests 
in a complex and dynamically evolving region. In the recently enacted 
State Department bill, The Asia Foundation was authorized to be funded 
at a level of $15 million for fiscal year 2001. This action was a vote 
of confidence in the Foundation's performance and underlines the 
magnitude of needs and opportunities facing the region.
    In the past the Committee has praised and encouraged the 
Foundation's grantmaking role and we remain faithful to that mission. 
We make strategic, sequential grants to steadily build the capacity of 
key institutions, develop leaders, and move critical policies forward. 
Foundation assistance supports training, consultancies, technical 
assistance, and seed funding for new organizations--all aimed at 
promoting reform, enhancing Asian capacity, and strengthening relations 
with U.S. institutions.
    No other American nonprofit organization working in Asia can match 
the Foundation's years of on-the-ground experience and breadth of 
contacts. The democratic development processes underway in several 
countries in Asia--including Thailand, the Philippines, Korea, Taiwan, 
and most recently Indonesia--is in part the fruit of the investments 
that the Foundation has made over time in support of individuals and 
institutions committed to reform. Democratic leaders who benefitted 
from Asia Foundation grants in earlier years include the President of 
Indonesia, the newly-elected Vice President of Taiwan, the Korean 
Ambassador to the U.S. (also a former Prime Minister of Korea), and the 
Speaker of the Mongolian Parliament.
    the asia foundation's unique contribution: the indonesia example
    An example of the value of The Asia Foundation's sustained 
involvement in the region is Indonesia. The Foundation is acknowledged 
by both the Administration and many members of Congress as the leading 
American organization presently active in Indonesia. Over the years the 
Foundation has supported hundreds of nongovernmental organizations 
(NGOs), formal government institutions, and future leaders. With the 
fall of President Suharto, the Foundation was ready to immediately 
undertake activities to address the needs of new reformers in 
government. Program activities included support for the design and 
implementation of a massive voter education campaign prior to the 
parliamentary election; assistance to large Muslim organizations and 
coalition groups for inter-ethnic and inter-faith programs that aim to 
avert community conflict, and support for human rights and legal aid 
organizations.
    Many of the investments made in human resource development over the 
years have proved particularly important. These include relationships 
established with President Abdurrahman Wahid and Attorney General 
Marzuki Darusman--both former Foundation grantees. The Foundation's 
Representative, a specialist on Indonesia and Islam, served as a 
resource to the U.S. government as plans were shaped to provide support 
to Indonesia through USAID and other agencies.
    But it was its appropriated funding that made it possible for the 
Foundation to quickly initiate programs supporting democratic reforms 
and to provide support for conflict resolution in troubled areas such 
as Aceh and Irian Jaya; for human rights and legal aid in East Timor 
prior to and following the referendum; and for important seed grant 
funding for new NGOs in a rapidly changing political environment. The 
following examples of Foundation program support for key Indonesian 
organizations provide a sense of the scale of its election programs and 
its capacity to deliver. The Foundation supported
  --training and development of the largest contingent of domestic 
        election monitors--over 123,000 in 26 provinces;
  --the creation of a national network of 200 NGOs, including Islamic 
        and other religious organizations, which helped provide voter 
        education information to the public; and
  --the publication of 23 million voter education booklets and 
        leaflets; production of 2,000 radio and television broadcasts, 
        and the design and distribution of over 500,000 training 
        manuals for election monitors.
    These programs reached an estimated 115 million voters and were 
credited with contributing to a free and fair election.
    Looking ahead, the Foundation's program plans for Indonesia include 
an increased focus on law and legal reform as areas of critical 
importance to national political and economic development. In addition, 
the Foundation will continue to support efforts to reform policies 
affecting small and medium-scale enterprise development, the sector of 
the Indonesian economy that is so vital for employment. The Foundation 
will also continue to support human rights and conflict resolution in 
troubled areas of the country.

                 THE ASIA FOUNDATION'S CORE OBJECTIVES

    As illustrated by the preceding examples of Asia Foundation 
investment and program impact in Indonesia, the Foundation's overall 
core objectives are central to U.S. interests in the Asia-Pacific 
region. The Foundation's priorities remain consistent:
  --Democracy, Human Rights and the Rule of Law.--Strengthening 
        democratic institutions and encouraging the development of an 
        active and informed non-governmental sector; advancing the rule 
        of law; and upholding fundamental rights, including protection 
        of women.
  --Open Trade and Investment.--Supporting open trade, investment, and 
        economic policy reform at the regional and national levels;
  --International Relations.--Promoting regional and international 
        dialogue on security, regional economic policy, and 
        environmental and human rights issues aimed toward more 
        cooperative relations in the region.
    The following examples illustrate the ways in which Foundation 
programming in key areas contributes to sustainable impact and the 
advancement of U.S. interests in the region.

Democracy and Human Rights
    The Asia Foundation has supported the development of democratic 
institutions and civil society and efforts to advance public 
understanding and enforcement of human rights. For example:
  --The Foundation has contributed to the development of parliaments in 
        16 countries in Asia through technical assistance, training 
        members and staff, facilitating interaction with the 
        nongovernmental sector, and developing parliamentary capacity 
        to scrutinize budget proposals and other executive functions in 
        Thailand, Mongolia, and Indonesia.
  --The Foundation is the single largest supporter of the 
        nongovernmental sector in all of the Asian countries in which 
        we operate. In the last five years, we have supported over 
        1,000 local NGOs to make essential contributions to a vibrant 
        civil society and to encourage public participation, 
        transparency, and accountability in the policymaking process. 
        Foundation support has contributed to the establishment of new 
        NGOs that have quickly made a mark, such as Thailand's Women 
        and the Constitution Network, which played a critical role in 
        ensuring that the new Thai Constitution included provisions for 
        increased public participation in rights enforcement and public 
        policy making. It has also contributed to the formation of an 
        NGO network in Pakistan, which includes over 50 community based 
        organizations that mobilize citizens to improve governance and 
        social service delivery.
  --With the trend toward devolution of political and administrative 
        powers to the sub-national level, local governance and 
        decentralization programs are a priority for the Foundation. 
        Examples of Foundation support include training and public 
        education on village elections in China; improvements in the 
        capacity of local elected officials in Indonesia to conduct 
        budget analysis and draft legislation on taxation and revenue 
        generation; and strengthening the role and accountability of 
        locally elected bodies in Bangladesh in financial management, 
        public accounting, and community needs assessment.
  --The Foundation has supported the development of human rights 
        organizations throughout the region. Examples include human 
        rights awareness, education, and monitoring programs in 
        Indonesia, Cambodia, Thailand, the Philippines, and Sri Lanka. 
        Foundation support for the regional Working Group for the 
        Establishment of an ASEAN Human Rights Mechanism promotes 
        public dialogue on the importance of establishing regional 
        standards and institutional mechanisms to promote and protect 
        human rights.
    With a $10 million appropriation, the Foundation would strengthen 
and expand its programs in local governance and human rights. New local 
governance initiatives would include training for village council 
members in Cambodia; fiscal management training for provincial and 
local assemblies in Indonesia; devolution programs and public hearings 
on decentralization in Pakistan; and reform efforts which aim to 
improve the transparency, accountability, and responsiveness of public 
institutions in Korea. Additional funding would also allow the 
Foundation to expand its human rights programming, including the 
development of more effective human rights education methodologies and 
increased collaboration among human rights organizations at the 
regional level.

Law
    In a recent speech at a conference on ``Democracy and the Rule of 
Law in a Changing World Order'' at the Library of Congress, Senator 
Orrin Hatch urged: ``As we support programs developing the legal 
institutions necessary for the rule of law . . . [w]e must have the 
foresight to commit the time and resources necessary to achieve these 
ends.'' He praised The Asia Foundation for its contribution to this 
effort and for the value of its sustained presence on the ground in 
Asia: ``For example, The Asia Foundation is America's preeminent non-
governmental organization in this field. With support from Congress, it 
has established on-the-ground programs necessary to nurture rule of law 
institutions throughout Asia.''
    The Asia Foundation is committed to the development of sound and 
predictable legal systems. Foundation grants and technical assistance 
support improved judicial administration, legal education and 
professional development, community legal assistance programs, 
alternative dispute resolution, and law reform. The following examples 
illustrate the scope of Foundation legal programming:
  --In China, where the government faces increased external and 
        internal pressure to reform the legal system and adopt 
        international compliance standards, the Foundation was one of 
        the earliest supporters of legal reform efforts. Since 1998, 
        the Foundation has supported Chinese efforts to improve the 
        performance of local government institutions and processes by 
        regularizing administrative procedures and creating greater 
        scope for citizen participation and redress. Other programs 
        target the grassroots and policy levels to work toward more 
        responsive administrative regulations, and support efforts to 
        develop laws and regulatory provisions for the delivery of 
        legal aid and popular legal education.
  --In the Philippines the Foundation has supported a variety of legal 
        and judicial reform efforts. We presently support the efforts 
        of alternative law groups to monitor and report on judicial 
        performance, undertake legal advocacy on juvenile justice, 
        conduct family court reform studies and alternative dispute 
        resolution, and promote the continued development of public 
        interest law.
  --With Foundation support, the Ministry of Justice in Sri Lanka has 
        established community-based Mediation Boards that operate in 
        most districts of the country. The Boards hear over 100,000 
        cases per year. Mediation has proven time and cost effective, 
        helping to reduce pressure on an overburdened formal court 
        system.
    In the coming year the Foundation plans to promote law reform 
efforts in Indonesia through support to the new National Law 
Commission, the Consortium for National Legal Reform, and other public 
and private institutions established under the new government. A $10 
million appropriation will enable the Foundation to expand its legal 
program initiatives in other parts of the region, including 
implementation of constitutional reforms in Thailand; enterprise and 
other commercial law reforms in Vietnam, and legal literacy in 
Bangladesh, Cambodia, China, Indonesia, Mongolia, Pakistan, the 
Philippines, Sri Lanka, Thailand, and Vietnam. The Foundation also 
plans to expand its regional counter-corruption activities.

Open Trade and Investment
    The Asia Foundation's economic programs support the development of 
policies and institutions needed for open trade and investment. In 
particular, they help address the political and governance factors that 
contributed to the regional economic crisis.
  --In Indonesia, Foundation support enabled the Jakarta Stock Exchange 
        to launch a corporate governance program to toughen financial 
        disclosure requirements for listed companies.
  --Foundation support for policy reforms affecting Indonesia's small 
        and medium enterprise (SME) sector in Indonesia includes 
        unprecedented participation by SME owners in discussion of 
        regulatory and other problems in fourteen provinces; studies of 
        the costs and distortions imposed by levies, licenses and fees; 
        and provision of information about credit.
  --In the Philippines, the Foundation supported two milestone 
        activities in the field of information technology: a study on 
        the challenges facing partnerships between Philippine and 
        American high-tech firms; and a widely-distributed policy 
        publication ``Breaking Barriers: Liberalizing the Philippine 
        Information Technology Industry.''
  --In Cambodia, a Foundation program helped women market vendors in 
        Phnom Penh to obtain small loans and more effectively engage 
        with local regulatory authorities in reducing intimidation and 
        collection of arbitrary fees and improving sanitary and other 
        working conditions in the crowded markets.
  --The Foundation also supported regional organizations such as APEC 
        and the private sector Pacific Economic Cooperation Council 
        (PECC) that are committed to open trade. For example, in 
        cooperation with PECC the Foundation supported workshops on 
        regional economic monitoring; training in banking supervision 
        for central bank officials in cooperation with the San 
        Francisco Federal Reserve Bank and other institutions in the 
        region; and studies on the role of competition policy and 
        corporate governance.
    Programs plans for fiscal year 2001 include a series of roundtable 
discussions and studies in Vietnam on measures to speed up Vietnam's 
economic development and economic integration; expansion of SME policy 
reform initiatives in Indonesia, Bangladesh, Sri Lanka, and Korea; and 
cooperation with China's Development Research Council on law reforms 
that will facilitate more rapid development of new enterprises. The 
latter is expected to cover improvements in corporate governance, 
accountability and transparency, and better legal protection of 
property rights.

International Relations
    The Asia Foundation's programs in international relations reflect 
the unique capacity of the Foundation to promote increased 
understanding of different cultural and foreign policy perspectives 
through regional and international dialogue. Foundation programs 
advance and complement more formal diplomatic efforts in the fields of 
democratization, human rights, regional economic policy, and security 
concerns, and help to strengthen human resources and institutional 
capacity in the field of foreign policy. For example:
  --In cooperation with the Asia Center at Harvard University, the 
        Foundation supports a series of trilateral meetings in Japan, 
        and China. The meetings promote greater mutual understanding of 
        regional security issues among participating nations.
  --The Foundation supports fellowships for mid-level officials of 
        China's Ministry of Foreign Affairs to study at the Fletcher 
        School of Law and Diplomacy, the Johns Hopkins School of 
        Advanced International Studies (SAIS).
  --The Foundation will continue its support for the Council for 
        Security Cooperation in the Asia Pacific (CSCAP) as a useful 
        vehicle for Track Two dialogue on evolving regional security 
        structure.
  --As part of its support for regional human rights initiatives, the 
        Foundation will continue to host annual meetings of an informal 
        working group of human rights practitioners. The meetings 
        provide an opportunity for participants to explore common 
        issues such as impunity and to develop plans for the use of 
        information technology to facilitate exchange between human 
        rights organizations and promote regional advocacy initiatives.
  --Through its ``America's Role in Asia Project,'' the Foundation is 
        bringing together a diverse group of distinguished American and 
        Asian foreign policy specialists to consider America's future 
        role in the Asia-Pacific region.
    In the coming year, the Foundation hopes to undertake several 
activities. These include a fresh program of support for U.S.-China 
dialogue and exchange programs; cross-straits exchanges to promote 
greater dialogue and mutual understanding between China and Taiwan; a 
bilateral conference to discuss the future of the U.S.-Indonesia 
relationship since the installation of the new government in Jakarta; 
and meetings in Seoul between U.S. and South Korean officials on 
policies concerning the Korean Peninsula. With a $10 million 
appropriation, the Foundation will expand regional and sub-regional 
activities focusing on security, economics, and human rights issues.

                               CONCLUSION

    As the preceding examples of our work emphasize, the Foundation is 
a field organization that supports local Asian groups and projects, 
while at the same time maintaining close links with the U.S. foreign 
policy community. Working through 13 offices in the Asia Pacific 
region, including China, Hong Kong, and Taiwan, the Foundation 
strengthens the capacity of local institutions and supports reform 
efforts. Through our offices, we identify and establish relationships 
with creative, reform-minded individuals who seek to advance the same 
goals and interests to which we are committed.
    The Foundation is first and foremost a grant-making organization. 
We are efficient, maintain a low overhead, and ensure that the majority 
of our resources are dedicated to financial and technical support 
projects in Asia. We are not a research organization or academic 
institution, nor are we Washington based.
    An appropriation of $10 million will allow the Foundation to 
undertake programs to address key development challenges and 
opportunities. Public funding is essential to our mission for many 
reasons. While the Foundation remains committed to expanding private 
funding, the flexibility and reliability that public funding lends to 
the Foundation's efforts is critical. As an organization committed to 
American interests in Asia, we can only be successful if potential 
private donors understand that the U.S. government continues to support 
our efforts in the region.
    Furthermore, private funding is almost always tied to specific 
projects (as are the USAID funds for which the Foundation competes) and 
does not replace public funding, either in scale or flexibility. The 
Foundation does not solicit or accept private funds that might 
compromise our fundamental commitment to support U.S. interests in 
Asia. Moreover, the flexibility afforded by U.S. government 
appropriated funds enables the Foundation to quickly respond to fast-
breaking developments and program opportunities, as demonstrated by our 
1999 support for electoral and other democratization initiatives in 
Indonesia. It also enables the Foundation to work in countries such as 
China and Pakistan that are of high priority to the U.S. but where 
USAID and other official U.S. assistance agencies do not operate. The 
Asia Foundation continues to be a model of public-private partnership 
and a resource which complements official foreign policy efforts.
    In closing, Mr. Chairman, I have cited a few examples of the many 
Asia Foundation program activities that we consider central to U.S. 
economic, security, and other interests in a region of vital importance 
that will continue to experience change in the years ahead. We believe 
that our programs merit a $10 million appropriation for fiscal year 
2001, consistent with the President's request.
    As you and your colleagues know, budget constraints have resulted 
in significant reductions in the Foundation's annual appropriation 
since fiscal year 1996 and the Foundation has received static funding 
for the last three years. Even the requested level of $10 million is 
below the $15 million the Foundation was appropriated for a decade 
prior to fiscal year 1996. We have worked hard to manage our budget, 
reduce staff and expenditures, and increase our efficiency, as well as 
to diversify our funding sources. We have maintained our regional 
presence through our 13 offices in Asia, and ensured that the maximum 
possible amount of appropriated funds are dedicated to on-the-ground 
program activities. Nevertheless, this constrained level of funding has 
precluded the Foundation from meeting the needs faced in the region as 
described. Additional funding is necessary. I assure you that if the 
Congress appropriates the full $10 million request, the Asia Foundation 
will use those funds efficiently and effectively in undertaking the 
critical program activities that I have described.

                       NONDEPARTMENTAL WITNESSES

                         DEPARTMENT OF JUSTICE

 Prepared Statement of the National, Coordinated Law-Related Education 
                                Program

    Dear Mr. Chairman: I am Lee Arbetman, the Coordinator of the 
National, Coordinated Law-Related Education Program. I am submitting 
this testimony on behalf of Youth for Justice, the National, 
Coordinated Law-Related Education Program (LRE). We respectfully 
request the Subcommittee's appropriations support for fiscal year 2001 
at a level of $1.9 million, the same level of funding that LRE received 
for fiscal year 2000.
    LRE/Youth for Justice is committed to involving young people in 
each state directly in identifying and implementing solutions to this 
nation's epidemic of violence. The program's approach is to teach young 
people about the law so that they can lead their lives within the law. 
In the last decade, the National Program has reached millions of at-
risk children and trained thousands of teachers, juvenile justice 
counselors and law enforcement officials.
    Law-Related Education, despite its name, has nothing whatsoever to 
do with legal or pre-legal training. The National, Coordinated Law-
Related Education Program has a proven record of success in juvenile 
delinquency and violence prevention. Law-related lessons reach at-risk 
children and juvenile offenders in school and juvenile justice settings 
in both urban and rural environments. Youth for Justice meets its goals 
by developing and maintaining strong, viable LRE centers in each state. 
The National Program leverages a tiny federal investment, $1.9 million 
in fiscal year 2000, many times over in private sector and state and 
local money and in in-kind support from the criminal justice and 
juvenile justice communities.
    The program has two components. The first component of the program 
is Intervention. This part of the program operates primarily in various 
kinds of juvenile justice facilities. In settings ranging from 
detention centers to training schools and after-care, Law-Related 
Education Programs help youth develop problem-solving, conflict 
resolution, and communication skills in the context of engaging lessons 
that focus on personal responsibility.
    The second component, Prevention, operates primarily in elementary 
and secondary schools. When you visit a school involved in this 
program, you are very likely to see a teacher, a judge, a lawyer, the 
town's police chief, a law student or a probation officer working with 
a class of students. In some of the best Youth for Justice classrooms, 
police officers co-teach with classroom teachers on a daily basis.
    Your home state of New Hampshire continues to be a national leader 
in adopting Law-Related Education for use as both a prevention and 
intervention program. Approximately 12,000 students and 140 teachers 
benefited from LRE's 1999 Fall Conference. In 1999, 250 attorneys and 
judges visited 20,000 students in 208 schools throughout the state as 
part of the Lawyer in Every School program. In addition, forty-one 
teams of students competed in the expanded 1999 New Hampshire Mock 
Trial Competition.
    Through the State of Hawaii's association with the National 
Program, the Hawaii State Judiciary and non-profit Hawaii Friends of 
Civic and Law-Related Education have expanded Parents and the Law 
(PAL), a program providing legal information to teen and at-risk 
parents. Last year, PAL reached over 450 at-risk parents at twenty-
seven sites including schools, corrections settings, and social service 
agencies. Assistance from the National, Coordinated LRE Program will 
also benefit the state's efforts to curb youth violence in school 
settings. Through program funding, the Hawaii State Judiciary staff 
have received training and materials to implement a three-part 
curriculum devised to stem violence and hate speech in Hawaii's public 
and private schools.
    The State of Kentucky is another national leader in the adoption of 
LRE programs. During the last fiscal year, approximately 89,500 
juveniles from the Kentucky juvenile justice system and the Kentucky 
school system participated in LRE programs. Of the approximately 46,000 
juveniles entering the Kentucky juvenile justice system during the last 
fiscal year, half of those juveniles participated in Law-Related 
Education programs. In addition, every judicial district in Kentucky 
has a fully operational LRE court diversion program.
    South Carolina continues to build upon its already extensive LRE 
program. For example, South Carolina worked with the Governor's 
Community Youth Councils to introduce the idea of using LRE programs in 
non-traditional settings including after-school programs. South 
Carolina also hosted a statewide safe schools conference and plans to 
hold its next Youth Summit in April. High school students attending the 
Youth Summit will focus on a variety of issues such as school violence, 
hate crimes, and teen suicide. South Carolina also plans to expand its 
regional middle school mock trial competitions and will host this 
year's National High School Mock Trial Championships.
    On December 3, 1999, Vermont held another successful Youth Summit 
at the Vermont Law School in South Royalton, with more than 100 
students and teachers participating. Presenters included many 
professors and students from the Law School. The interactive topics 
included Drafting Curfew Laws and the Fourth Amendment.
    Mr. Chairman, thanks to the continued commitment of this 
Subcommittee, Youth for Justice, the National, Coordinated Law-Related 
Education Program has built a vital, cost effective program serving the 
needs of youth throughout our nation. This program:
  --Involves young people in every state in identifying and 
        implementing solutions to the nation's epidemic of violence;
  --Promotes research-based educational programs that strive for safe, 
        disciplined and drug-free schools and communities;
  --Teaches young people acceptable ways to resolve conflicts;
  --Fosters constructive attitudes towards authority figures, such as 
        parents, teachers and police officers;
  --Provides young people with meaningful opportunities to serve their 
        communities;
  --Promotes understanding of and reasoned commitment to the rule of 
        law along with tolerance for varied points of view in a free 
        and diverse society; and
  --Helps young people understand the democratic process and develop 
        the critical thinking, decision-making, and problem solving 
        skills to enable their full participation in that process.
    LRE/Youth for Justice uses technology as a cost-effective way to 
expand its reach by providing up-to-date information to the LRE field. 
For example, LRE has posted a planning guide for its Youth Summits on 
the World Wide Web as well as free competition mock trials. The 
National LRE Program also provides technical assistance to state LRE 
centers to demonstrate how they can use technology to link teachers and 
community volunteers throughout the state.
    Youth for Justice is committed to providing leadership in the 
national effort to stop the outrage of violence committed by and 
perpetrated against this nation's youth. We have the capacity to 
involve young people directly in helping to identify and implement 
solutions. With the support of Congress, Youth for Justice is 
refocusing all programs to reflect the nation's growing concern about 
violence committed by and against young people in our schools and 
communities.
  --Law-Related Education focuses on violence prevention. Last Spring, 
        thousands of young people from both the school and juvenile 
        justice settings again gathered with public officials to 
        participate in Youth Summits designed to help develop public 
        policy to help prevent violence by and against youth. During 
        this fifth season of summits, thousands of young people are 
        taking a close look at the problem of violence by and against 
        youth.
  --Law-Related Education is an extraordinarily effective prevention 
        program, but it is also an extraordinarily effective 
        intervention program--Law-Related Education reaches juvenile 
        offenders in school settings as well as halfway houses, 
        detention centers, and other non-school settings.
  --While Law-Related Education targets at-risk children, it does so 
        not just in urban settings but also in suburban and rural 
        environments.

               THE NATIONAL LAW-RELATED EDUCATION PROGRAM

    The National, Coordinated Law-Related Education Program is 
comprised of five not-for-profit corporations, each of which is 
recognized nationally and internationally as a leader in the field of 
law and civic education: The American Bar Association's Special 
Committee on Youth Education for Citizenship; the Center for Civic 
Education; the Constitutional Rights Foundation; Street Law, Inc.; and 
the Phi Alpha Delta Public Service Center. By combining their expertise 
and experience as teachers, school administrators, juvenile justice 
professionals, attorneys and professors, these five organizations have 
successfully administered a nationwide program in which they have:
  --Established and maintained an effective network of delinquency 
        prevention law and citizenship projects in all fifty states, 
        the District of Columbia and Puerto Rico, so that accurate 
        information and effective materials can be efficiently 
        distributed and widely used without costly replication of 
        research and development efforts;
  --Provided training and technical assistance to the state projects in 
        this network so that federal funding effectively leverages 
        public and private funding appropriate to each state;
  --Established innovative law and citizenship programs for at-risk 
        youth in urban, rural and suburban communities;
  --Developed and field-tested quality, research-based curricular 
        materials for children--kindergarten through grade twelve--in 
        public and private schools, juvenile detention centers, after-
        school programs and court-related diversion programs;
  --Organized special initiatives on violence prevention, drug 
        prevention, juvenile justice and urban education, publishing 
        materials and sponsoring training events nationwide; and
  --Mobilized thousands of volunteers with expertise in law, public 
        policy, drug and alcohol abuse prevention, juvenile justice and 
        other areas.
    We at the National, Coordinated Law-Related Education Program 
acknowledge with pride the participation of dozens of organizations and 
thousands of individuals from the education, legal, law enforcement, 
judicial and juvenile justice organizations. The Program has had 
assistance from the executive branch and strong bipartisan support in 
Congress for the outstanding delinquency prevention programs and 
materials it has developed and implemented.
    In addition, it is a particular source of satisfaction to note that 
similar partnerships have been developed in most of the states 
participating in this network. A small amount of federal support has 
provided the impetus to attract funding from local organizations, 
agencies and foundations as well as large numbers of volunteer hours. 
One important goal of this Program is to continue to provide the 
support and technical assistance necessary to enable all of the states 
to build their own public/private partnership networks, effectively 
leveraging a small amount of federal assistance to build strong, well-
funded local and state programs.

                  EVALUATIONS OF LAW-RELATED EDUCATION

    For the past two decades, researchers have consistently reported 
that law-related curricula and instruction make a positive impact on 
youth, when compared with traditional approaches to teaching and 
learning law, civics and government.
    The Office of Juvenile Justice and Delinquency Prevention has noted 
that evaluations of Law-Related Education Program have been 
``encouraging . . . confirming the previous findings that such 
education serves as a significant deterrent to delinquent behavior''. 
Eighth Analysis and Evaluation of Federal Juvenile Delinquency 
Programs, U.S. Department of Justice, OJJDP, p. 60 (1985). The Twelfth 
Analysis and Evaluation of Federal Juvenile Delinquency Programs 
published in 1988 similarly states, ``[A] national study suggests that 
Law-Related Education, when properly implemented, can reduce the 
tendency to engage in delinquent behavior.''
    A 1993 study of a Law-Related Education diversion alternative in 
Kentucky's Designated Court Worker Program showed both improved 
perceptions of the police and a low recidivism rate (10.5 percent after 
one year).
    A review of the research in Law-Related Education and related 
fields (including scholarly papers, dissertations, journal articles and 
book chapters) conducted by Dr. Jeffery W. Cornett and published on 
April 1, 1997 in monograph form concludes that LRE programs have a 
positive effect on student knowledge about law and legal processes, and 
about individual rights and responsibilities. In addition, the report 
concludes that there is evidence that LRE programs have a positive 
influence on student attitudes and behavior. Research studies indicate 
that effective LRE programs have improved juveniles' attitudes toward 
the justice system and toward authorities. Research findings also 
indicate a link between particular LRE programs and youth who, as a 
result of Law-Related Education, exhibit more law-abiding behavior and 
commit fewer delinquent acts.
    In 1998, the National, Coordinated Law-Related Education Program 
released impact data from demonstration programs in Los Angeles, 
Chicago and Washington, D.C. showing the positive effect that Law-
Related Education can have on the highest at-risk youth. This data was 
the culmination of a three-year effort to test the impact of Law-
Related Education on at-risk youth in the most challenging 
environments.
    In Santa Clara, California, the Fresh Lifelines for Youth (FLY) 
program, which incorporates Law-Related Education, Mentoring, and 
Social Needs Assessment, has been found to have a significant impact on 
the behaviors of at-risk youth. At-risk youth, ages 12-17, are referred 
to the program by a probation officer, juvenile court, school 
officials, or a neighborhood accountability board. The program strives 
to improve knowledge, problem-solving skills, attitudes, and behaviors. 
A recent evaluation of forty FLY participants found that the 
participants' negative behaviors decreased by 75 percent while their 
positive behaviors increased by 32 percent. Participants' skills 
regarding problem solving, critical thinking, and managing conflict 
also significantly improved.
    The National Program has a unique and remarkable record of 
achievement. Continued support for the National, Coordinated Law-
Related Education Program is crucial for the following reasons:
  --First, without congressional support it is clear that Law-Related 
        Education will die.
  --Second, the federal government and, in particular, the Congress, 
        has made a substantial investment over more than a decade in 
        the creation of a National, Coordinated Law-Related Education 
        network and infrastructure including coordinating organizations 
        in every state.
  --Third, only a national program will undertake national initiatives 
        that benefit the entire country, such as national training; 
        national technical assistance; state financial assistance; new 
        program and curriculum development such as Law-Related 
        Education's highly successful and acclaimed Youth Summits; and 
        the replication of successful state programs and the avoidance 
        of unsuccessful pilot programs.
  --Fourth, federal money is seed money used to sustain a national 
        program which raises approximately seven times the federal 
        support through state legislative support, private donations 
        and in-kind support.
    For all of these reasons, the National, Coordinated Law-Related 
Education Program is seeking earmark support at the $1.9 million level.
    We thank you, Mr. Chairman and the members of this Subcommittee, 
for your support over all these many years and we ask for your 
continued support.
                                 ______
                                 
 Prepared Statement of the National Consortium for Justice Information 
                             and Statistics

    Dear Chairman Gregg: The Membership Group of SEARCH submits this 
testimony seeking appropriation support for our National Technical 
Assistance and Training Program in the fiscal year 2001 Byrne 
discretionary program appropriation for the Bureau of Justice 
Assistance (BJA), U.S. Department of Justice (DOJ). The National 
Technical Assistance and Training Program received an appropriations 
earmark in fiscal year 2000 in the amount of $1.5 million. We 
respectfully submit this testimony to request funding at the $2 million 
level for fiscal year 2001.
    SEARCH is a nonprofit criminal justice organization governed by a 
Membership Group comprised of one gubernatorial appointee from each of 
the 50 states, the District of Columbia, Puerto Rico and the U.S. 
Virgin Islands. For over 30 years, we have dedicated our efforts to 
assisting state and local justice agencies combat crime and administer 
justice through the effective and responsible use of information and 
identification technologies.
    SEARCH's National Technical Assistance and Training Program 
provides no-cost assistance to all components of the state and local 
criminal justice system with respect to the development, operation, 
improvement and/or integration of all types of justice information 
systems. This significant program not only helps state and local 
agencies work more efficiently and effectively through the use of 
advanced information technology, but it also creates the foundation for 
a national information infrastructure for justice systems.
    SEARCH is experiencing an explosive growth in demand for the 
program. In 1999, we provided a 30 percent increase in the number of 
technical assistance efforts as compared to 1998. We expect to 
experience at least an additional 30 percent increase in technical 
assistance provided in 2000. There are a number of reasons for this 
demand, including the success of grant programs such as the Edward 
Byrne Memorial State and Local Law Enforcement Assistance Program and 
the Local Law Enforcement Block Grants Program, which have provided 
seed money for justice information systems automation and integration. 
Also impacting the demand for SEARCH technical assistance and training 
services is the critical need of the nation's criminal justice agencies 
to share complete and accurate information quickly, which is manifested 
in their efforts to integrate and connect justice information systems.
    We want to commend BJA and its fine, professional staff. Working in 
partnership with SEARCH, BJA has provided strong, national leadership 
to create opportunities for information systems training and technical 
assistance for state and local criminal justice officials.

Technical Assistance Program
    SEARCH provides technical assistance via written correspondence, 
telephone consultations, electronic mail, and/or through an Internet 
Web site, and when the needs of agencies require, SEARCH provides 
technical assistance on-site or at our National Criminal Justice 
Computer Laboratory and Training Center in Sacramento, California.
            In-house Technical Assistance
    Under fiscal year 2000 funding, SEARCH will respond to hundreds of 
telephone calls and emails requesting assistance. The nature and scope 
of in-house technical assistance varies considerably, but can involve 
the following: providing technical consultations on the planning, 
implementation or operation of automated systems, such as network 
configurations, software installations and technical innovations; 
conducting in-depth research; making referrals to appropriate resource 
providers; and answering questions on a wide range of justice 
automation topics.
    SEARCH has also taken advantage of the Internet to expand the reach 
of its technical assistance program. SEARCH's Web sites are 
specifically designed so that justice agencies can immediately access 
information on a variety of technical issues related to justice 
information management. The Web sites offer virtual libraries of 
information to justice practitioners, including published articles, 
documents and white papers; references to other justice agencies using 
particular technologies; interactive discussion forums where 
practitioners can share information with peers and experts; databases 
of technology acquisition documents such as requests for proposals; and 
links to other justice technology resources and information.
            On-site Technical Assistance
    The Technical Assistance Program also provides on-site assistance 
to agencies throughout the nation that are predominantly nonautomated 
or lagging in automation, or that have special automation needs. Since 
the program's inception, SEARCH has provided technical assistance to 
scores of agencies in every state, representing all components of the 
criminal justice system. The majority of technical assistance is 
completed within one month, consists of site visit(s) by staff, and 
concludes with the issuance of a formal report setting forth findings 
and recommendations.
            Selected Examples of Assistance
    The following illustrates just a few examples of SEARCH technical 
assistance in the past year and the broad range of agencies receiving 
assistance.
    New Hampshire.--SEARCH provided input on and review of software 
applications under consideration by Cheshire County as part of its 
plans to upgrade its jail information management system. The county had 
called the system review meeting in part to explore the possibility of 
participating in a joint jail management system procurement. 
Representatives of Merrimack and Belknap counties also participated in 
the meeting. In addition, SEARCH reviewed the request for proposals 
(RFP) prepared by the Cheshire County House of Correction for a new 
automated system. This activity was a follow-up to technical assistance 
SEARCH provided earlier in 1999 to the New Hampshire Administrative 
Office of the Courts and State Police on a project to integrate the 
information systems of all criminal justice system participants in the 
state.
    Alaska.--SEARCH helped the State Department of Public Safety by 
reviewing its summary needs assessment document--which addresses a 
migration plan for the Department's law enforcement and repository 
applications--and issuing a report of findings and recommendations. 
SEARCH also helped the University of Alaska-Fairbanks with forensic 
computer issues and the Anchorage Police Department with identifying 
users on a multiuser, multichannel Internet chat network.
    Colorado.--At the request of the Board of Executive Directors of 
the Colorado Bureau of Investigation (CBI), SEARCH conducted several 
site visits to assess the current information technology status of CBI. 
Staff is helping the CBI design a series of management reports to 
assess critical performance measures of key systems and resources. 
Staff also conducted a preliminary assessment of the CBI fingerprint 
identification capability in order to assist CBI in achieving greater 
efficiency in this area. Staff also assisted the Denver District 
Attorney's Office on cybercrime issues relating to on-line fraud and 
tracking email and Internet addresses.
    Hawaii.--SEARCH worked with the Hawaii Criminal Justice Data Center 
in the Attorney General's Office to assist in organizing for statewide 
integrated systems development. The long-term integration effort will 
include the systems used by state and local courts, corrections, law 
enforcement, prosecution, probation, parole and community supervision 
agencies. SEARCH provided recommendations regarding general planning 
issues and approaches.
    Kentucky.--SEARCH is working with state agencies in Kentucky on 
planning for statewide integrated justice information systems. At the 
request of Kentucky's Chief Information Officer and state justice 
officials, SEARCH met with the Uniform Criminal Justice Information 
System Committee to develop the concept for statewide integrated 
justice systems and is establishing project ``next steps.'' At the 
local level, SEARCH provided information to the Jefferson County and 
Louisville police departments regarding their efforts to plan for a new 
records management information system that is integrated between the 
departments and with other city and county agencies. Staff also 
provided guidance to the State Police on Internet crime investigation 
issues.
    Maryland.--The Baltimore Criminal Justice Coordinating Council has 
sought SEARCH's assistance in efforts to develop a strategic plan for 
integrated information systems.
    New Jersey.--SEARCH visited the Millville Police Department to 
assist in its efforts to upgrade hardware and software, implement 
mobile computing, upgrade radio systems, integrate a crime mapping 
system, and tie into the state Automated Fingerprint Identification 
System (AFIS). SEARCH made recommendations for improvement, and helped 
the Department define the scope of and objectives for the project. As 
part of a long-term assistance project, SEARCH is also working with the 
New Jersey Department of Law and Public Safety on a major systems 
design, development and implementation plan. SEARCH has reviewed an 
RFP, and will assist in developing a formal business plan, reviewing 
technical documentation and automation solutions, and reviewing--and 
making recommendations on--network security plans. In other assistance, 
SEARCH helped the Rockland County Sheriff's Department with software 
issues, and provided information on hard drives to the New Jersey State 
Enforcement Board.
    New Mexico.--SEARCH is a member of an Office of Justice Programs 
(OJP) ``Technical Assistance Response Team'' for Rio Arriba County. OJP 
is working to create an infrastructure to support a ``balanced and 
comprehensive approach to reduce substance abuse and control associated 
crime'' in this target area. SEARCH is scheduling site visits to the 
justice agencies in the jurisdiction as part of an expected long-term 
technical assistance effort. In addition, SEARCH is working with the 
Bernalillo County Metropolitan Criminal Justice Coordinating Council on 
its effort to integrate justice systems within the county and the City 
of Albuquerque, as well as integrating those local systems with state 
and federal justice agencies. SEARCH also assisted the New Mexico 
Attorney General's Office with an Internet fraud case and provided 
information on federal justice funding legislation to representatives 
of the University of New Mexico Justice Information Sharing Project.
    South Carolina.--The State Law Enforcement Division, which is 
interested in establishing a computer crime analysis unit, contacted 
SEARCH for assistance. SEARCH provided the agency with assistance 
regarding task force and laboratory operations, software requirements 
and other issues involved in setting up such a unit. SEARCH also helped 
the agency by reviewing specifications for forensic computers and 
providing advice on hard drive issues.
    Texas.--SEARCH made several site visits to Tarrant County as part 
of an effort to integrate justice information within the county, 
regionally and with state justice systems. SEARCH also helped the El 
Paso County Sheriff's Department with hard drive issues; the El Paso 
County District Attorney's Office with hard drive and email trace 
information for a child pornography case; the FBI's Houston Field 
Office with tracing an Internet Provider address; and the state with 
issues related to local-to-state AFIS connectivity. In an upcoming 
assistance, SEARCH will assist with developing a strategic plan for 
migrating the Harris County integrated justice information systems to a 
Web-based system.
    Vermont.--In an upcoming weeklong site visit, law enforcement 
investigators in Vermont will attend SEARCH's ``The Investigation of 
Computer Crime'' training course, which is designed to provide 
participants with an understanding of computer technology, its 
application to criminal endeavors, and the issues associated with 
investigating computer crimes. In addition, representatives of Vermont 
State law enforcement, corrections and court agencies, and an 
organization representing local prosecutors and sheriffs, received 
SEARCH training on strategies for successfully planning and 
implementing integrated justice information systems.
            Integration Technical Assistance
    There is a pressing need to provide more extensive, long-term 
assistance to states and/or agencies within states to address the 
technically complex and sophisticated planning, design and 
implementation issues associated with developing integrated or 
consolidated information systems within and between justice agencies; 
and to assist these jurisdictions in developing state-, county- or 
citywide plans for justice information systems and technology and 
criminal records improvements. In response, SEARCH provides a limited 
number of agencies with technical support for extended periods of time, 
including multiple on-site visits, research and, oftentimes, 
complementary training sessions. During such a project, SEARCH often 
works with a variety of justice agencies, including police departments, 
courts, and prosecutor, probation, parole, corrections and other case 
management agencies.
    This type of on-site assistance typically involves helping a state 
or agency establish an automated justice information system; evaluate 
and plan for statewide integration of existing systems; or enhance, 
expand or implement a computerized criminal history repository program. 
SEARCH is providing such long-term technical assistance to agencies in 
Arizona, Arkansas, California, Iowa, Massachusetts, Michigan, 
Minnesota, Montana, Nebraska, North Carolina, Virginia and Wisconsin 
and, as previously noted, in New Hampshire, Hawaii, Kentucky and Texas. 
In fiscal year 2001, SEARCH expects to provide on-site technical 
assistance to more than 40 justice agencies.

National Training Program
    Since its inception, SEARCH's National Technical Assistance and 
Training Program has trained more than 22,500 criminal justice 
officials from every state in the use of computers and other 
information technologies. In fiscal year 2000, SEARCH will train more 
than 2,000 state and local criminal justice officials across the 
nation, both on-site at agencies and at SEARCH's National Criminal 
Justice Computer Laboratory and Training Center in Sacramento, 
California. In Spring 2000, SEARCH will implement a mobile training 
center that uses a variety of laptops and other mobile equipment to 
provide our training at more sites nationally.
    Training courses focus on the development, use and implementation 
of information technology in justice agencies, including investigating 
computer crime; techniques for seizing and examining microcomputers as 
evidence; and conducting Internet crime investigations (both basic and 
advanced courses). During fiscal year 2000, SEARCH also developed two 
new courses: The Investigation of On-line Child Exploitation and Basic 
Local Area Network Investigation.
    Staff from justice agencies in Alaska, Colorado, Hawaii, Maryland, 
New Hampshire, New Jersey, South Carolina and Texas were among those 
who attended our training this fiscal year. SEARCH conducted our 
``Investigation of Computer Crime'' course in a number of states, 
including Colorado, and is scheduled to do so this Spring in Texas and 
Vermont. In addition, in fiscal year 2000, SEARCH held a first-of-its-
kind combined technical assistance/training exercise for attendees of 
our ``Advanced Internet Investigations'' course. During the exercise, 
attendees undertook a full penetration attack to test the security of a 
large state automated justice system.

National Cybercrime Training Partnership
    During the past four years, the Computer Crime Unit of the DOJ, in 
conjunction with the National White Collar Crime Center, has conducted 
a federal-level project to define how to best train and equip the 
nation's criminal justice investigators and prosecutors to deal with 
computer crime. The organizing agencies invited SEARCH and other key 
justice agency training organizations to participate in a series of 
meetings to discuss the mission and functional objectives of computer 
crime training for state and local justice practitioners. The 
Partnership continues to identify needs; develop new, advanced training 
courses; and set standards for national justice training courses in the 
area of curbing computer crime.

Technical Assistance and Training Program Materials
    SEARCH's National Technical Assistance and Training Program also 
includes the preparation, publication and national dissemination of 
materials and reports that assist criminal justice agencies in 
acquiring and using computers and other information technology. For 
example, SEARCH publishes quarterly Technical Bulletins that identify 
and evaluate information systems and technologies that have existing or 
potential application in criminal justice management.

Conclusion
    Without question, federal support for the National Technical 
Assistance and Training Program makes a vital contribution to the war 
on crime. For a modest federal investment, leveraged many times over by 
state and local funds, a critical contribution is made to the ability 
of state and local criminal justice agencies to provide--and to share--
timely, accurate and compatible information for use in apprehending, 
prosecuting and sentencing offenders.
    Accordingly, we respectfully request that the Subcommittee act to 
ensure fiscal year 2001 funding of SEARCH's National Technical 
Assistance and Training Program. We thank you, Mr. Chairman, the 
members of your Subcommittee and the Subcommittee staff for your 
continued support.
                                 ______
                                 
   Prepared Statement of the National Recreation and Park Association

    Dear Mr. Chairman: We write to share the views of the National 
Recreation and Park Association on selected fiscal year 2001 
appropriations for the U.S. Department of Justice. We respectfully 
request that this statement be included in the record.
    The National Recreation and Park Association is a not-for-profit 
organization of some 25,000 citizens, professionals and public and 
private institutions involved primarily with public park and recreation 
systems and services. These individuals and agencies provide an array 
of prevention and intervention discretionary time activities for 
children and youth from all backgrounds and circumstances, including 
and especially those in high-risk environments. Many recreation 
services also emphasize specialized programs that focus on gang and 
substance abuse prevention, development of employment skills, and 
tutoring and mentoring, in addition to traditional recreation programs. 
Because of their multidisciplinary, community-based approach, 
recreation services reach many individuals often alienated from other 
settings or providers.
    The Department of Justice, particularly the Office of Juvenile 
Justice and Delinquency Prevention (OJJDP), administers several 
authorities that could potentially aid local park and recreation agency 
efforts to deter youth from behaviors or circumstances that put them at 
risk. Local park and recreation agencies, whose principal mission is 
creative programming during non-school hours and vacation periods, are 
generally eligible for OJJDP funds and use Title II B and Title V 
grants to provide recreation-as-prevention programs. With the 
reauthorization of the Juvenile Justice and Delinquency Prevention Act 
still undetermined, the continued availability of these funds through 
the appropriations process is critical.

                            RECOMMENDATIONS

    While local public park and recreation services are supported 
principally by local general funds, many public recreation-as-
prevention programs are stronger today because of activities aided by 
federal and state funds. We urge increased national investment in 
public community-based crime prevention efforts that positively engage 
children and youth.
    Because the JJDPA has expired, ``authority'' for funds and setting 
of priorities rests principally with the respective appropriating 
committees. This process appears to encourage the practice of 
earmarking funds for specific organizations or projects, at least some 
of which have narrow impact and serve a limited number of youth. 
Earmarked funding for the Office of Juvenile Justice and Delinquency 
Prevention escalated from $18 million in fiscal year 1999 to some $38 
million in fiscal year 2000. This practice makes it increasingly 
difficult to fund the most innovative programs, which would likely be 
discovered in an open competitive process. The department and OJJDP 
should be given discretion to support projects with the highest 
probability of success. Assistance should be sufficiently flexible to 
allow states and localities to address conditions specific to their 
environments. We encourage the Subcommittee to give priority to 
competitive funding for effective and innovative youth development and 
prevention initiatives.
    The President's budget request for fiscal year 2001 includes $272 
million for juvenile justice programs, including level funding for 
Title II B formula grants to the states--$89 million--and for Title V 
incentive grants for local delinquency prevention programs--$95 
million. We urge the Subcommittee to consider additional funds for 
prevention and formula grants to reflect the growing understanding that 
prevention is a key element of a balanced approach to reduce crime. 
Fiscal year 2001 appropriations for discretionary grants and formula 
grants should be commensurate with documented needs. As with 
reauthorization, funding for prevention programs should be given 
priority and not diminished in favor of punitive programs and 
initiatives. We recommend that the Congress invest at least $250 
million in Title V programs.
    Furthermore, programs funded by public fiscal resources should be 
available principally through competitive public processes with local 
recipients having the authority to pass through funds to private 
providers when the scope and quality of services will be enhanced and 
when service efficiencies will result. Increasingly, it seems, the 
appropriations process provides direct appropriation of public 
resources to certain private entities. We urge the Subcommittee to 
reconsider this practice, emphasizing instead public services and 
public-private partnerships. Public recreation agencies are among the 
most aggressive of all local service providers in terms of outreach and 
collaboration, and the enclosed publication, Promise and Progress: 
Recreation and Police Partnerships for Youth, highlights several local 
actions that illustrate this point.

                    WHY INVEST IN PUBLIC RECREATION?

    Recreation-as-prevention programs should be considered central 
components of crime prevention strategies. Public recreation 
professionals and citizen volunteers are on the front lines, with over 
85,000 public park and recreation sites in some 5,000 municipal and 
county systems, and another 20,000 state and interstate sites.
    Public recreation services typically focus on the age cohort most 
prone to crime--youth ages 10 to 17--during the hours when crime 
peaks--between 3 and 8 p.m. The services and sites counter the combined 
impact of boredom and the too-frequent absence of positive, caring role 
models. They are effective alternatives to more costly actions 
typically associated with adjudication and incarceration, and often 
lead to many positive secondary benefits (i.e. health promotion, 
community building and social development). Notwithstanding this record 
of achievement, many public programs cannot be expanded or go unfunded 
because of financial constraints. In these situations, federal 
assistance and support are critical.
    The following examples illustrate how principally local and state 
public funds have been invested in resources and services yielding 
direct community benefits.
  --In Bowling Green, Kentucky, the Parker Bennett Community Center has 
        partnered with the local housing authority to serve high-risk 
        youth ages 6-16. Students at Parker Bennett Elementary School 
        who have participated in the community center's supervised 
        programs have increased their state aptitude (KERA) scores 45 
        percent.
  --In 1997, the recidivism rate for all of the diversion programs 
        offered through the Phoenix, Arizona, Parks, Recreation and 
        Library Department's At Risk Youth Division was 14.2 percent 
        (six months) and 22.4 percent (one year). Program 
        administrators anticipate further reductions with changes to 
        the city's recreation-based Curfew Diversion Program.
  --In 1993, the City of Charlotte and Mecklenburg County, North 
        Carolina, Park and Recreation Department developed an array of 
        programs and activities for people who reside in various 
        shelters and others referred from Travelers Aid. Since July 
        1993, more than 9,000 people have participated in the programs 
        and activities, 30 percent of who have been children.
  --In Cincinnati, Ohio, city and federal officials directly attribute 
        a 24 percent drop in the number of criminal incidents to the 
        Winton Hills late-evening recreation initiative.
  --Project PRIDE in Santa Ana, California, supplements education and 
        human services with traditional recreation activities to 
        ``teach young people the skills they need to remain gang free, 
        drug free and in school.'' City administrators estimate the 
        annual cost per person at $41.67, based on an average of 12,000 
        participants in five programs.
  --Some 8-10 youth each month are diverted from the juvenile court 
        system through the Street Outreach Program in Olympia, 
        Washington. The success of the program relies heavily on the 
        public recreation agency's staff.
  --The KIDCO Program in Tucson, Arizona, responds to the growing 
        number of ``latchkey'' kids. It serves over 3,000 children and 
        youth and has recently contributed to a 52 percent decrease in 
        reported crime.
    We believe our recommendations are sound and well within the 
nation's fiscal capacity to address. I have asked Barry Tindall, 
director of Public Policy, and Heather Sidwell, policy associate, to be 
available to you to provide additional information or to answer 
questions. Both may be reached at 202/887-0290.
                                 ______
                                 
         Prepared Statement of the City of Gainesville, Florida

    Mr. Chairman: On behalf of the City of Gainesville, Florida, I 
appreciate the opportunity to present this written testimony to you 
today. The City of Gainesville is seeking federal funds in the fiscal 
year 2001 Commerce, Justice, State and Judiciary Appropriations bill to 
assist with an innovative Joint Communications Technology Project the 
City is undertaking to improve public safety.

Joint Communications Technology Project
    The City of Gainesville is seeking $5.4 million for a joint 
communications technology project to enhance public safety. The goal of 
this effort is to facilitate communication between our urban area 
public safety agencies through the use of system-wide communications 
software and technology upgrades. The City and Alachua County have 
initiated a joint communications system for the future. The impact for 
the entire region is considerable, since this county serves as the 
regional center for much of rural north Florida's medical care, 
disaster management, and criminal justice services.
    The agencies involved in this project are: Alachua County 
Government (14 internal user agencies), Alachua County Sheriff 
(includes Corrections Facility and Civil Division); Cities of 
Gainesville (8 internal user agencies), Archer, Newberry, High Springs, 
Alachua, LaCrosse, Waldo, Melrose, Hawthorne, and Micanopy; School 
Board of Alachua County, Santa Fe Community College, University of 
Florida, Gainesville-Alachua County Airport Authority, Gainesville 
Regional Transit and Gainesville Regional Utilities (electric, gas, 
water, wastewater, telecommunications).
    To continue the Joint Communications Technology Initiative to the 
next step requires the purchase of enhanced software and new equipment. 
The urban area public safety agencies will need the following:
  --Mobile Lap Top Computers/Data Terminals for urban area public 
        safety agencies ($4.8 Million)
  --Crash Reporting Software for urban area law enforcement agencies 
        ($120,000)
  --System-Wide Communications Software ($200,000)
  --Geographical Information System (GIS) Software and WEB Software 
        ($280,000).
    In order to meet the needs of our urban area public safety 
agencies, a three-phase project is proposed.
            Phase I
    During this phase the agencies would purchase sufficient lap top 
computers for installation in each operational vehicle. Included with 
the purchase of the lap tops will be a mount for installation, 
installation cost, a wireless communication device, and network system 
software. Additionally, the Gainesville Police Department will initiate 
a new WEB page in preparation for mapping software for the Internet. 
The goals of Phase I will be to (1) Equip all public safety vehicles 
with lap tops that can communicate with the department's communication 
software, (2) Establish an in-office GIS system, (3) Create a mapping 
resource to be used by management to effectively deploy resources.
            Phase II
    During this phase the urban area law enforcement agencies would 
purchase additional software and conduct extensive training to use the 
mobile lap tops to write police incident and crash reports. The goals 
of this phase will be to add the second use of report writing to the 
utilization of the lap top computers and to incorporate additional 
``data layers'' from partner agencies into the GIS system.
            Phase III
    During this phase the law enforcement agencies would purchase 
additional GIS software to allow the mobile lap tops the capability to 
enter and use the GIS information provided by the multiple user 
agencies. Also during this phase, we would develop a method of 
displaying the appropriate GIS information (Crime Maps) over the 
Internet for use by other governmental agencies and the public.
    The need for the addition of lap top computers to this system is 
partially driven by the Federal Government's ``re-farming'' of radio 
frequencies through the Federal Communications Commission. Due to this 
``re-farming'' and the high cost of radios, law enforcement agencies 
will no longer have radios mounted in department vehicles. Radios 
``mounted'' in vehicles traditionally have a much higher wattage output 
and therefore are more reliable and robust than portable radios. 
Additionally, portable radios can be lost or damaged during emergency 
incidents. This creates a critical need for an alternative means for 
officers to be able to communicate with the dispatch center. Mobile lap 
top computers with the additional communication and software components 
can become the secondary means of communication utilizing the 
infrastructure currently being developed for the Alachua County Joint 
Communication Center.
    The use of lap top computers can fulfill the critical need for a 
second communication device, and at the same time help accomplish 
several other public safety objectives, including in-car computer aided 
dispatch, automated report writing and the use of a GIS (Crime Mapping, 
etc.).

Result #1 Mobile Computer Aided Dispatch
    Utilizing lap top computers as in-car computer aided dispatch 
terminals significantly increases public safety officers' 
communications ability. Computers used in this manner can perform many 
important tasks.
    First, the computers can send and receive information between the 
officer and the dispatcher, including calls for service. Non-emergency 
calls are forwarded from the dispatcher to the appropriate unit without 
the need to transmit the information verbally over the radio, thus 
saving ``air-time'' for use in emergency situations. This also improves 
the reliability of the information communicated and virtually prevents 
the need for the information to be repeated. This also decreases the 
need for additional dispatchers even when the number of calls for 
service increases.
    Secondly, officers and supervisors can find the location of other 
officers and check on their current status. This eliminates the need 
for officers to request this information from a dispatcher and gives 
all members of the agency a complete picture of the availability of 
officers for calls for service. Officers can also refer to information 
about calls that have not yet been dispatched in addition to 
information regarding previous calls for service.
    Third, officers can communicate vehicle-to-vehicle. The computers 
can be used to send messages from one officer to another. This also 
eliminates the need for officers to waste ``air-time'' for less 
important transfer of information.
    Fourth, law enforcement officers can conduct FCIC/NCIC checks on 
wanted persons and stolen vehicles without having to tie up a 
dispatcher. This allows officers to check a large number of persons and 
vehicles, which will significantly increase the number of people who 
are arrested for warrants and the number of recovered stolen vehicles. 
A single dispatcher can only handle 1 request at a time, while the 
computer system, can handle numerous request all at the same time.

Result #2 Mobile Automated Report Writing
    Area law enforcement officers currently hand write law enforcement 
reports that are manually filed. A small portion of that report is then 
entered into a computer database at some later date. This method of 
capturing the information for reports is antiquated and causes a number 
of problems.
    Problem #1.--The time lapse between when a report is started and 
the time that is entered into the computer makes the information less 
useful than it would be if it were immediately entered. This time lapse 
prevents any practical analysis of the information to be used for 
effective management of resources.
    Problem #2.--The information in a report can only be retrieved by 
removing the report from a file folder. Record's personnel spend an 
enormous amount of time copying, retrieving and re-filing reports. In 
fact, copies of each report that is generated by law enforcement 
personnel must be made for other parts of the department, including 
crime analysis, detectives, intake, etc. before the report can even be 
filed. Reports must also be copied for other agencies including the 
State Attorney's Office, the Public Defender and private attorneys. 
Reports are also generated for private citizens and law enforcement 
personnel who are going to court. Whenever a copy of a report is 
requested, a records technician must hand search for the report, copy 
it, and then return the report to the file. Normally the entire report 
is copied and forwarded, even if the person only needed a specific 
portion of the report. This time spent on requesting reports and 
completing those requests is a wasted resource. Once filed, electronic 
reports could be forwarded to anyone electronically and could be 
printed by any department member anywhere in the department.
    Problem #3.--The amount of storage space required to house all of 
the completed law enforcement reports is immense. As a result, for 
example, reports are only kept at the police department for 3 years. 
The reports are then removed from the file one at time by a records 
technician. The reports are then re-filed in a new folder and 
transported to a storage warehouse. Any report over three years old, 
must be retrieved from a storage company warehouse. This storage 
company is located several miles from the police department and must be 
accessed several times a month, further wasting valuable resources. 
Electronically filed reports take up virtually no space at all and can 
be electronically backed up for security purposes and stored on some 
form of optical disk. This would eliminate the need for an entire room 
to store reports.
    Problem #4.--Handwritten reports that require duplicate information 
must each be completed one at a time. Electronic reports can be created 
that will take the captured data and fill in the data on subsequent or 
additional report forms. Therefore when a person is arrested an officer 
would only be required to enter the suspect's personal information 1 
time. Today, an officer might be required to enter the information on 
several report forms, including the original report, a sworn affidavit, 
a vehicle tow sheet, a forfeiture request, an ATF firearms report, etc. 
Thus filing the reports electronically would save the officers 
significant time needed to complete a report.
    Problem #5.--Many handwritten reports are nearly illegible and have 
numerous spelling and grammatical errors. Some of the current report 
forms are also 4 or 5-part NCR paper. Usually only the first one or two 
copies of the NCR forms are legible. Filing reports electronically 
would drastically reduce the number of spelling and grammatical errors, 
it would allow officers to easily correct errors in reports, and it 
would eliminate the need for NCR paper.

Result #3 Geographical Information System (GIS)
    For years Law Enforcement Agencies have tracked crime using pin 
maps to geographically show where crimes were occurring. This method of 
tracking crime has become impractical and too time-consuming for all 
but the smallest of law enforcement agencies. The advent of 
computerized geographical information programs, like ``ArcView'' has 
enabled law enforcement agencies to return to the pin map method of 
displaying crime patterns, but in a much more effective manner. 
Additionally, mapping programs can contain several hundred data layers 
that can be utilized by numerous public and private agencies. The 
following objectives are examples of how a GIS system will enable us to 
use the information immediately entered on mobile lap top computers.
  --Electronic Pin Maps.--Once a GIS system is established, all reports 
        that are generated will be mapped in several formats. Maps will 
        be generated for calls for service. This enables agencies to 
        properly decide where to deploy their limited resources. 
        Electronic pin maps also can be made time sensitive as well as 
        location sensitive. Officers working various shifts can 
        identify hot spots by time and location. A hot spot during the 
        day, may not be a hot spot at night, or visa versa. Additional 
        maps can be generated for UCR (Unified Crime Reports) crimes, 
        Crime Analysis identified crimes, and calls verified by Florida 
        State Statutes. Information that is not immediately available 
        is of little or no use when it is entered at a later date.
  --Management of Resources Utilizing Computer Statistics.--Many law 
        enforcement agencies have begun to use a method of management 
        which utilizes crime data. Law Enforcement supervisors are 
        being held accountable for the level or increase in crime in 
        their assigned geographical area. The Gainesville Police 
        Department has begun the process of dividing the City into 
        districts. Each District Commander will be held responsible for 
        the criminal activity and the utilization of resources in that 
        geographical area. GIS information will be used to manage the 
        department's limited resources.
  --WEB Mapping.--Sharing the information gathered in an effective 
        manner is another key component to this process. Many of the 
        Law Enforcement Agencies in Alachua County currently have a WEB 
        site on the Internet. In the future, crime maps developed by 
        the GIS system will be used to display maps over the Internet. 
        Maps will be made available to other law enforcement and 
        governmental agencies and the public at large.
  --Integration with other Agencies.--In order for a geographical 
        information system to be truly effective, it requires the 
        cooperation of several agencies. GIS systems with hundreds of 
        layers of data can be a useful tool for all the cooperative 
        agencies. Law Enforcement personnel will be able to view maps 
        and aerial or satellite photographs of any given area of the 
        city. Crime data and analyses can be placed on top of those 
        maps and/or photographs at specified points that will be 
        available to all users. Law enforcement personnel will provide 
        numerous layers of data to the system and will in return be 
        able to access the layers from other agencies. Alachua County 
        already has begun the process of developing a GIS and the 
        Gainesville Police Department is currently working with the 
        University of Florida to develop a method of converting data to 
        a format used by ``ArcView''.
    In closing, federal support is critical for this initiative. It is 
our hope that the Subcommittee will give our request every 
consideration throughout the fiscal year 2001 appropriations process.
                                 ______
                                 
   Prepared Statement of the Alachua County Board of Commissioners, 
                        Alachua County, Florida

    Mr. Chairman: Thank you for allowing the Alachua County Board of 
Commissioners to present written testimony before your Subcommittee 
regarding the County's Comprehensive Management of Drug-Involved 
Offenders Initiative. Alachua County is seeking $2.5 million to develop 
a comprehensive, coordinated approach to the management of substance-
abusing and addicted offenders in the community.
    The County's Public Safety Coordinating Council which convenes 
regularly to address ways to manage the local jail population, 
anticipates that in the next few years, Alachua County, like many other 
communities, will be faced with the need for additional jail space. 
Prior to building costly jail beds, Alachua County would like to fully 
realize all possible alternatives.
    A comprehensive plan to manage substance involved offenders is an 
innovate approach that could prove to be an effective keystone to 
alleviating jail overcrowding by reducing recidivism rates and the 
incidence of drug-related crime. Current treatment sources are 
inadequate to meet the needs of this population. This pilot project 
includes a cost-benefit analysis to compare the long-term benefit of a 
comprehensive treatment model versus an incarceration/incapacitation 
model. The impact for the entire region is considerable since the 
County serves as the regional center for much of north Florida's 
medical care and criminal justice services.
    Alachua County has many advantages which makes it an ideal site for 
this pilot program. The County has long served as a model and a 
resource for criminal justice alternative programs in the State of 
Florida. Many Florida pretrial release and alternative sentencing 
programs consulted with Alachua County's Court Services Department as 
they developed similar services for their counties. The Alachua County 
Drug Court was one of the first 25 Drug Courts in the nation and has 
also served as a model for their Florida Drug Courts. Court Services 
Department staff are active in state-wide organizations that provide a 
network to exchange information and share innovations. Alachua County 
was also recognized as a leader by the Florida State Legislature's 
Advisory Council on Intergovernmental Affairs in its 1993 report, 
Intergovernmental Relations in Local Jail Finance and Management in 
Florida--A Comprehensive Report. Further, the community linkages in 
Alachua County and the array of programs provided under one umbrella in 
Alachua Court Community Services Department provide a unique 
opportunity to demonstrate the impact of a comprehensive effort.
    Alachua County has supported innovative alternative methods of 
managing offenders for almost 25 years. The County currently funds a 
Department of Court Services which includes a comprehensive array of 
alternatives including: Pretrial Services; County Probation; Community 
Service; Drug Court; Work Release Facility; and A Residential Treatment 
Program for Drug Addicts.
    In fiscal year 1999, these programs completed more than 7,700 pre-
trial release investigations, monitored more than 1,000 defendants on 
pre-trial release, supervised 1,100 probationers and coordinated more 
than 3,500 cases where community service work has been required by the 
Court. In addition, the Drug Court will treat and monitor 100 addicted 
offenders per day, the Work Release Program will house 50 sentenced 
offenders and/or pretrial defendants per day. Metamorphosis, the 
County's residential treatment program, will serve 17 volunteer and 
court ordered addicts each day in a therapeutic community.
    In addition to the Court Services programs, Alachua County had 280 
individuals being supervised by the Florida Department of Corrections 
on drug offender probation during fiscal year 1998. A ``snap shot'' of 
individuals arrested in a one-month period between July 1998 and August 
1998, shows that 36 percent of the 231 felony defendants who were not 
released at first appearance were in custody in Alachua county on drug 
related charges.
    A coordinated continuum of services targeting substance abusing 
offenders across the criminal justice spectrum would further reduce the 
incidence of drug-related crime throughout the County. The program will 
include continuing judicial supervision of nonviolent offenders with 
substance abuse problems and administration of sanctions and services 
including: (1) mandatory drug testing during any period of supervised 
release or probation; (2) substance abuse treatment; (3) probation or 
supervised release which could include prosecution, confinement, or 
incarceration for noncompliance with the program's requirements; and 
(4) offender management and aftercare services to prevent relapse, such 
as vocational job training, job placement and housing placement.
    The County has an existing array of programs which could serve as 
the framework of a comprehensive system. There is strong support for 
alternative programs within the judiciary and from other local criminal 
justice officials. The County also has a long-standing history of 
cooperation among agencies. In addition, the University of Florida is 
located in the community and could serve as a partner in evaluating the 
success of this program. The expected benefits are national, and could 
hopefully be replicated at reasonable cost.
    We hope that your Subcommittee will find Alachua County's 
Comprehensive Management of Drug-Involved Offenders Initiative worthy 
of your support. Thank you for your consideration.
                                 ______
                                 
         Prepared Statement of the City of Miami Beach, Florida

    Mr. Chairman: Thank you for giving the City of Miami Beach the 
opportunity to submit testimony before your subcommittee regarding a 
critical law enforcement technology initiative. The Miami Beach Police 
Department is seeking federal funding in order to acquire available 
technology for the purpose of providing a significant enhancement in 
the delivery of public safety services to the community. The unique 
status of the City of Miami Beach as an international destination has 
taxed the Miami Beach Police Department's ability to provide public 
safety services to residents and visitors utilizing the typical funding 
sources available to a medium sized municipality. Funding assistance 
would be utilized to acquire the following technology:
  --Equip every officer in the field with wireless enabled laptop 
        computers. Officers would have immediate access to both 
        strategic and tactical crime analysis enabling them to provide 
        directed community based policing services to residents. 
        Enhanced communications would also enable a coordinated 
        tactical deployment and response to disaster and other 
        emergency events. The efficiency of field officers would be 
        significantly improved providing residents and visitors with 
        increased public safety services.
  --Develop and acquire the infrastructure necessary to provide real-
        time, online public access to crime reports, crime statistics, 
        crime maps and other such information to residents in order to 
        develop a closer partnership and a coordinated community-police 
        response to crime at the neighborhood level.
  --Develop the local infrastructure to provide enhanced two-way crime/
        suspect analysis and information exchange with law enforcement 
        agencies throughout the State of Florida utilizing the existing 
        statewide Criminal Justice Network (CJNET). With the 
        acquisition of this capability, the ability of criminals to 
        successfully victimize residents and avoid detection by 
        crossing jurisdictional boundaries will be significantly 
        reduced.
    The City is seeking $1 million in federal support through the 
fiscal year 2001 Justice Appropriations Bill, under its COPS Technology 
Assistance account, Office of Justice Assistance account, or any other 
program account within the Department of Justice that might be 
appropriate for funding this project.
    We hope you will find this critically important project worthy of 
your support.
    Thank you for your consideration.
                                 ______
                                 
          Prepared Statement of the City of Newark, New Jersey

                NEWARK SPORTS AND ENTERTAINMENT PROJECT

    Mr. Chairman and members of the Subcommittee, thank you for giving 
us the opportunity to submit testimony about a project under your 
jurisdiction that is critical to the people of Newark, New Jersey. 
Newark is truly at a crossroads: we are a City with all of the problems 
of many major urban centers, but we are also a City with vast 
potential. We have begun to turn the corner--there is a renewed 
vitality and sense of optimism in Newark.
    A major economic development initiative that will create a 
professional sports and entertainment complex in downtown Newark is 
being planned by a consortium of private businesses, nonprofit 
representatives and the City administration. As this new economic 
development initiative is evolving from preliminary to concrete plans, 
there is a unique opportunity for an important downtown facility linked 
to a key transit hub. The synergy of a major occupant that is committed 
to investment in community development and opportunities for upgrading 
the center city retail and economic environment makes this an 
attractive and singular proposal.
    This project will use the attraction of a major league sports 
franchise to locate a state-of-the-art arena as a key cornerstone for 
development. The mission of this project is to harness the momentum 
initiated by the successful 1997 opening of the acclaimed New Jersey 
Performing Arts Center (NJPAC), and 1999 opening of Newark's minor 
league baseball stadium, and create a vibrant, state of the art sports 
and entertainment district in downtown Newark. It will be a catalyst to 
the evolving creation of a vibrant downtown corridor--as development 
continues with strong anchors, integrating several elements. These 
include NJPAC, the Gateway complex of modern office buildings, the 
refurbished Newark Penn Station, a waterfront development along the 
Passaic River which is under construction by the U.S. Army Corps of 
Engineers, and a minor league baseball stadium where the Newark Bears 
began to play last summer. A new light rail system is in final design, 
and will ultimately be the spine along which these projects are 
arrayed.
    The Newark Sports and Entertainment Center master plan includes 
development of approximately 1.4 million square feet of office space. 
The preliminary plan consists of a covered multi-purpose sports arena 
with 19,000 seats, ancillary parking, a new television production and 
broadcast complex, up to 2 million square feet of new commercial and 
retail space, including hospitality facilities. The sports and 
entertainment center will provide superior access to a broad customer 
base, create sizable, measurable, bankable fiscal benefits for the 
taxpayers of New Jersey, and will, consistent with the commitment of 
the New Jersey State Plan, ``steer development from environmentally 
sensitive zones and back into urban areas.'' As the project creates a 
destination location--which will create new incremental spending--it 
will help to revitalize New Jersey's oldest and largest city and 
establish a new sports paradigm linking professional athletes to the 
youth of the state.
    The Newark Sports and Entertainment Center is expected to draw 
nearly two million people to the city each year. The estimate includes 
those attending sporting events, family entertainment shows like the 
circus, concerts and other attractions. In addition, the development of 
the Newark Sports and Entertainment Center will act as a catalyst to 
the increased demand for and opening of restaurants, shops, hotels and 
small service businesses that meet the needs of patrons. Local 
corporations, small businesses, city residents, and local employees are 
expected to benefit from the Newark Sports and Entertainment Center 
through improved quality of life, better entertainment and retail 
options for is current workforce, and improved job opportunities. 
Although the direct and indirect employment to be gained from this 
project is still the subject of further analysis, it can safely be 
estimated that at least 5,000 jobs in construction, ancillary services 
and direct employment will be created.
    A unique aspect and public benefit of this project is the 
establishment of a foundation to benefit inner-city youth in New 
Jersey. Community Youth Organization (CYO) has been formed by the 
largest investor in the ownership group of the NJ Nets. CYO will be a 
partner in the profits of the team, and is committed to investing its 
profits in children, people and businesses in Newark. This significant 
contribution responds to a documented need for activities that help at 
risk youth. The NJ Nets already sponsor a wide variety of community 
programs, including the Sprite Junior Nets League, Kids Stuff, 
basketball-court renovation programs, and a host of other charitable 
and holiday events. The proposed sports and entertainment center will 
likely include educational forums as well as television studios 
available for youth tours and programs.
    The total population of the region in a 25-mile radius of Newark--
excluding New York--is 5,088,656, and includes New Jersey's five most 
populous cities. In an approximate 10 mile radius of Newark, the 
population is 2.1 million with a median family income of $54,683. This 
contrasts with Newark's population of 265,000 and median income of half 
that of residents in the 10 mile radius.
    Currently approximately 100,000 workers are located in Newark. A 
recent survey of Newark's mid-day population found 266,000 local 
residents, 52,000 non-resident workers and 24,000 non-resident 
students. The six colleges and universities in the city have over 
45,000 students and faculty. Newark is also home to major corporations, 
including Prudential Insurance, Continental Airlines, Blue Cross/Blue 
Shield of NJ and Public Service Electric and Gas. This concentration of 
people with discretionary income for entertainment and dining will be 
encouraged to use this significant purchasing power in the City of 
Newark.
    Fully one-quarter of the population of the country either lives 
within, or is easily accessible to Newark. We are only 8 miles west of 
New York City, within 100 miles of Philadelphia, and only a four hour 
drive or 1 hour flight away from Boston and Washington. Our location is 
enhanced by ready access to transportation connections, via rail, sea, 
air and nine major interstate and state highways. Newark's Penn 
Station, a stop on the Northeast Corridor for Amtrak as well as New 
Jersey Transit trains and buses from throughout the State, is only a 
short walk from the proposed sports and entertainment complex. There is 
an additional rapid and inexpensive rail connection to New York City 
via the train system known as the PATH. Newark International Airport, 
the ninth largest airport in the U.S. and one of the fastest growing in 
the country, serving 31 million passengers each year. It is now 
extremely close to downtown via automobile or bus, and will soon be 
directly accessible by a rail connection to the airport monorail 
system.
    Newark, however, also suffers from an unusually high number of tax 
exempt properties as the host community for the aforementioned large 
publicly operated facilities including six colleges, public hospitals, 
a major airport, ocean cargo handling and major water and waste 
management operations. The dearth of ratables has posed and hardship of 
the residents and homeowners of Newark. The city will immediately 
benefit by the presence of the Newark Sports and Entertainment Center, 
as it will pay property taxes on land that is currently city-owned or 
underutilized.
    The ownership group for a major league sports franchise has 
indicated the ability to contribute approximately $200 million of 
private funds toward the anticipated $300 million project cost. The gap 
in financing will be filled with a combination of tax-exempt revenue 
bonds (subject to debt limits), user fees and grants related to the job 
generating abilities and economic development potential of the project. 
The City plans to use proceeds from parking and hotel taxes to 
subsidize the project.
    Public funds are expected to be utilized for site acquisition and 
off-site infrastructure improvements. The project area includes a large 
tract of vacant land and underutilized buildings which is under 
consideration for declaration as an ``Area in need of Redevelopment'' 
under the Redevelopment statutes of the State of New Jersey. This 
Committee's endorsement of an allocation of $15 million in funding 
through the Economic Development Administration for site acquisition 
and project construction is respectfully requested.
    The consideration of this committee is deeply appreciated. Newark, 
New Jersey is looking forward to your support of this exciting project 
and its innovative partnership.
                                 ______
                                 
         Prepared Statement of the City of Gainesville, Florida

    Mr. Chairman: On behalf of the City of Gainesville, Florida, I 
appreciate the opportunity to present this written testimony to you 
today. The City of Gainesville is seeking federal funds in the fiscal 
year 2001 Commerce, Justice, State and Judiciary Appropriations bill to 
assist with the following innovative projects the City is undertaking: 
(1) an East Side Community Recreational Facility for recreational and 
other programs and services to serve at-risk youth and their families 
and a substantial population of low income citizens in the surrounding 
area; and (2) the Depot Avenue Project to enable economic redevelopment 
in a downtown setting, including also improving stormwater treatment, 
developing park facilities, enhancing alternative transportation and 
restoring an urban wetland.

East Side Community Recreation Center Project
    The City of Gainesville is seeking a funding strategy for a multi-
purpose community-based recreational facility on the east side of our 
city. The site for this project is in one of our highest poverty and 
minority-populated areas. Once completed, the center will provide a 
wide range of programs and opportunities to at-risk youth and their 
families. It will also provide needed facilities and services for the 
substantial population of low-income elderly in this area of our 
community, as well as to all our community.
    This is a public/private initiative estimated to cost $2.2 million. 
Funding has been received or pledged in the amount of $1.5 million. The 
initiative is being led by a grassroots partnership of business 
leaders, community leaders, professionals and interested/concerned 
citizens who have organized themselves as the East Gainesville Park 
Development Group.
    The public agencies involved in this effort include the City of 
Gainesville, Alachua County, the School Board of Alachua County, and 
the University of Florida. So far, the project has received 
considerable financial support or pledges from the City, the County, 
and private individuals. The University of Florida has pledged to 
provide coaches and mentors. Additionally, the School Board of Alachua 
County has expressed an interest in this facility to help meet its own 
recreational facility shortfalls.
    The plan for this project is based on the need to provide 
recreational facilities for families and on the desire to provide our 
youth with such advantages as leadership skills, team participation 
skills, and computer skills as well as opportunities to participate in 
physical and mental exercise, arts and crafts, and social activities, 
and to receive mentoring and after school tutoring. The educational 
component will include after school tutoring sessions, computer, anger 
management, life skills, and teen parenting and pregnancy prevention 
classes. Parental involvement will be encouraged for all activities.
    The facility will be sited on a 36-acre parcel of land zoned for 
park use. The site amenities will include a multipurpose building 
(estimated at 6,500 square footage in area), serving as a learning 
resource center and community center. The facility will house the 
computer lab with computers promised by IBM, and rooms for after school 
homework and tutoring. Accommodations for indoor recreational and 
cultural programs will also be provided. The active outdoor amenities 
will include an interactive water fountain play area, playground and 
tot lot, picnic areas, two softball fields, two soccer/football fields, 
three basketball courts, one-quarter mile track, three-quarter mile 
jogging/fitness trail, one-quarter mile interpretive nature boardwalk 
and a concession facility. The City of Gainesville will own and operate 
the park and improvements.

Depot Avenue Project
    The Depot Avenue Project is intended to enable economic 
redevelopment in a downtown setting, to extend park facilities, to 
support alternative transportation, to improve stormwater treatment, 
and to restore a small urban wetland in Gainesville. Funding for this 
project are being pursued on several fronts. Gainesville is working in 
partnership with the U.S. Environmental Protection Agency through the 
Brownfield Pilot Program and the Sustainable Communities Program; the 
U.S. Housing and Urban Development Agency through the EDI Program; the 
Florida Department of Environmental Protection through the Brownfield 
Pilot Program; the Florida Communities Trust through the Preservation 
2000 Program; the Florida Department of Transportation through the 
Transportation Enhancement Program; the St. Johns River Water 
Management District for technical support; the City of Gainesville's 
Regional Utilities contamination cleanup program; and the City of 
Gainesville's Stormwater Management Utility Program.
    The project includes:
    Depot Avenue.--The reconstruction of approximately two miles of 
Depot Avenue from SR 331 to US 441. The project is intended to address 
current safety and capacity issues and includes the construction of two 
travel lanes, turn lanes, curbs, sidewalks and landscaped medians. 
Depot Avenue is located adjacent to the existing Depot Avenue Rail-
Trail, which is an 8 foot wide asphalt trail. It alternately connects 
residential areas, commercial areas, and industrial land uses along its 
length. The redesign of the road will address these varying conditions 
and will also provide for the involvement of the neighborhood residents 
it serves.
    Depot Avenue traverses Gainesville from west to east, approximately 
one-half mile south of, and parallel to, SR 26 (University Avenue). Its 
western terminus is at the eastern edge of the campus of the University 
of Florida and its associated student housing development, and its 
eastern terminus is at SR 331 in Southeast Gainesville. It skirts the 
southern edge of downtown Gainesville at its mid-point, and its 
intersection with SR 329 (Main Street) is considered to be the southern 
``gateway'' to Downtown. (Estimated cost is $4 million.)
    Transportation Center.--The City of Gainesville's RTS 
Transportation Center is located on the north side of Depot Avenue 
directly south of the core of Downtown Gainesville. The Transportation 
Center is a multi-modal transportation hub for the Regional Transit 
System, Greyhound, Amtrak and the Bicycle Commuter Facility. (Estimated 
cost is $3 million. Partial funding, $1.2 million has been provided by 
the Federal Transit Agency. Therefore, the City is seeking $1.8 million 
to complete this project.)
    Historic Depot.--On the south side of Depot Avenue across from the 
Transportation Center is the Old Gainesville Depot, which has been 
recently acquired by the City for restoration. The Old Gainesville 
Depot was built in 1907, and was placed on the National Register of 
Historic Places in 1996. The City of Gainesville was founded as a rail 
hub linking Fernandina Beach on the east coast of Florida to Cedar Key 
on the west coast in the mid-1800's and uses a train symbol as its 
official seal. (Fully funded through state and local sources.)
    Stormwater Park.--The City's proposed 22-acre Stormwater Park will 
serve as the stormwater management facility for the Depot Avenue 
Project as well as a large portion of the central downtown area. This 
facility will remove existing contamination, provide for full treatment 
of stormwater to the property owners in the service area and eliminate 
the need for future redevelopment in the central area to provide on-
site stormwater treatment facilities. Additionally, the stormwater 
basin is envisioned to provide treatment for some of the underground 
petroleum plumes that exist in the area. (Total estimated cost is $10 
million for construction. Land acquisition is being jointly funded by 
the Florida Communities Trust and the City of Gainesville. Design 
services are jointly funded by the U.S. EPA, Florida DEP and the City 
of Gainesville. Partial funding is available from the City's stormwater 
utility and the Florida Department of Transportation.)
    In closing, federal support is critical for each of these 
initiatives. It is our hope that the Subcommittee will give our 
requests every consideration throughout the fiscal year 2001 
appropriations process.
                                 ______
                                 
      Prepared Statement of the American Public Power Association

    The American Public Power Association (APPA) is the national 
service organization representing the interests of over 2,000 municipal 
and other state and locally owned utilities throughout the United 
States. Collectively, public power utilities deliver electric energy to 
one of every seven U.S. electric consumers (about 45 million people), 
serving some of the nation's largest cities. The majority of APPA's 
member systems are located in small and medium-sized communities in 
every state except Hawaii.
    We appreciate the opportunity to submit this testimony in support 
of fiscal year 2001 appropriations for the Federal Trade Commission and 
the Antitrust Division of Justice.
    The electric power industry is in the midst of sweeping and 
dramatic change, with a record number of proposed mergers, increasing 
significantly in the last two to three years. The industry experienced 
little competition in the past, except for franchise competition 
between investor-owned utilities (IOUs) on the one hand and publicly 
and cooperatively owned utilities on the other. During this 
transitional period--as this important, closely regulated industry 
moves towards increased competition--sufficient resources are necessary 
so that the two federal antitrust agencies can adequately perform 
merger assessments.
    The Department of Justice Antitrust Division and the Federal Trade 
Commission play a critical advisory role along with the Federal Energy 
Regulatory Commission (FERC) with respect to antitrust monitoring and 
enforcement in the electric utility industry.
    Important lessons have been learned through the deregulatory 
experiences of the airlines, cable, and telecommunications industries. 
As the electric power industry begins the transition from regulation to 
competition, those lessons must inform the policies and process that 
will guide, and ultimately determine, the structure of a deregulated 
electric power industry. There is no need to start at the bottom of the 
deregulation learning curve, or to repeat the mistakes made in other 
industries.
    Mergers among electric utilities are likely to have a profound 
effect on the development of competition in the electric industry. In 
fact, because utility mergers will determine the basic structure of the 
electric power industry, they actually have the potential to define (or 
preclude the development of) the competitive landscape. The recent wave 
of electric utility mergers certainly will increase concentration in 
the industry, as the number of firms that are legally and practically 
capable of providing electric service declines through consolidation. 
Largely for the same reasons, the structural impacts of such mergers 
will likely be permanent. What is not known is whether mergers of 
incumbent electric utilities and/or other wholesale power suppliers, 
collectively or individually, are on balance procompetitive or 
anticompetitive. Specifically, there are a number of unknowns about 
electric utility mergers:
  --Whether an increase in concentration will produce associated 
        efficiencies;
  --Whether any efficiencies that do result will be passed on to 
        consumers in the form of lower electric rates, or instead be 
        passed on to shareholders, or used to build diversified 
        empires;
  --Whether an increase in concentration will simply serve to fortify 
        existing market power to exclude new entrants, drive out new 
        entrants through price competition and mergers, purchase 
        existing competitors, or gouge consumers.
    As the mixed deregulatory experiences of other industries 
demonstrate, these are not questions that can be accurately answered in 
the absence of actual market data. The pressure placed on DOJ's 
Antitrust Division and the FTC will be enormous as we search for the 
answers to these and many more questions.
    We are at a critical juncture in the history of our antitrust laws. 
After a full generation of decline, antitrust enforcement is making a 
comeback. In response to the unprecedented wave of mergers that has 
overtaken the U.S. economy in the last few years, the Administration 
recently proposed substantial increases in the budget of the Justice 
Department's Antitrust Division and the Federal Trade Commission. The 
restructuring of many industries, the concurrent revolution in 
international trade and international competition policy, and the 
emergence of serious competitive problems in the evolving high tech 
industries have also made the task of antitrust enforcement more 
challenging and requiring a larger commitment of resources. Robert 
Pitofski, Federal Trade Commission Chairman, recently pointed out 
during a speech to a group of antitrust lawyers, that with the business 
community's request for a level of restructuring never asked for 
before, his department has seen a tripling of FTC merger reviews.
    Moreover, the wave of mergers has made antitrust enforcement a 
great bargain for the public. Since funding for the Antitrust Division 
and FTC comes out of a special fund consisting of fees paid by 
companies applying for merger approval, antitrust enforcement pays for 
itself. Under the Administration's budget proposal, no money comes from 
the General Fund of the Treasury. In addition, criminal and civil 
penalties attained by the agencies bring millions of dollars into the 
Treasury, and consumers are saved untold millions by the agencies' 
successes in promoting and maintaining competition.
    APPA supports the Administration's fiscal year 2001 budget request 
of $134 million for the Antitrust Division, an increase of $25 million 
over the fiscal year 2000 funding level, and $166 million for the 
Federal Trade Commission, an increase of $40 million or nearly 35 
percent over fiscal year 2000 requested levels.
    We urge you to approve the Administration request.
                                 ______
                                 
          Prepared Statement of the City of Newark, New Jersey

    Mr. Chairman and members of the Subcommittee: Thank you for giving 
me the opportunity to submit testimony about a project under your 
jurisdiction which is critical to the people of Newark, New Jersey. 
Newark is truly at a crossroads: we are a City with all of the problems 
of many major urban centers, but we are also a City with vast 
potential. We have begun to turn the corner--there is a renewed 
vitality and sense of optimism in Newark. But we are also still ravaged 
by the problems associated with the illegal drug trade.
    The Newark Police Department has developed an innovative program, 
called Operation NITRO--Narcotics Interdiction To Reduce Open-air Drug 
Markets--to address the complex issues associated with the sale of 
drugs and their effect on the City of Newark. It is a narcotics 
enforcement augmentation program designed to improve the quality of 
life by reducing the incidence of illegal drug trafficking through 
aggressive anti-crime operations. A supplemental federal allocation of 
$2 million is respectfully requested to meet the specialized facility 
and equipment needs for the ambitious and important project summarized 
herein.
    It is well established that drugs drive crime! The COMSTAT 
process--Newark's computerized statistical tool--has revealed that an 
estimated 80 percent of the crime in Newark is drug related. The 
communities' primary issues are the open street sales, violence 
associated with the drug trade, and the proliferation of weapons and 
their use by drug enforcers during street robberies. Inherent in the 
drug trade is the violent nature of the criminal element associated 
with trafficking. A significant portion of the drug traffickers have 
been identified as having violent criminal histories, and most have 
previously failed to appear in court to answer for their crimes. The 
single most significant impact law enforcement can have toward reducing 
the illegal drug trade is through a sustained presence; dismantling 
criminal enterprises by targeting the infrastructure and profit 
associated with drugs.
    Operation NITRO is a concentrated effort designed to address long-
term operations through collaborative strategies with identified 
outcomes and interim measures. It is a Department element composed of 
carefully selected and specially trained police officers and 
supervisors using covert, non-traditional means to suppress drug-
related street crime. The synergy of enforcement and apprehension 
operations will result in a valuable, encouraging and worthwhile 
contribution to public safety.
    Elements include proactive street-level narcotics enforcement; 
search warrants for mid and upper-level drug trafficking networks; 
asset seizure through civil enforcement; neighborhood problem solving 
through community interaction; special drug courts to provide 
differential treatment for offenders; enhanced involvement from the 
corrections community to enforce probation and parole violations, and 
high visibility fear reduction. These efforts will produce a 
synergistic effect in dealing with persistent offenders by effecting 
arrests, empowering residents, seizing assets, and controlling the 
environment conducive to crime. The citizens of Newark will be 
reassured that crime control and quality of life are paramount issues 
for the Newark Police Department.
    The enforcement segment consists of non-uniformed officers being 
placed into areas where the incidence of narcotics trafficking is 
greatest. Teams of officers will conduct stakeouts, surveillance, buy/
bust operations, search warrants, and street-level enforcement tactics. 
The apprehension segment consists of teams of uniformed officers 
stabilizing neighborhoods by conducting follow-up operations in 
response to intelligence and leads garnered from outside sources, 
arresting persons wanted on outstanding warrants, and community 
empowerment via focus groups and neighborhood interaction.
    Each of these tactics will be used in response to particular crime/
victim/location patterns. The primary source of information will come 
from the community, bolstered by crime and quality of life data 
supplied the Performance/Crime Analysis Unit to the COMSTAT process. 
Secondary sources will be outside agencies (e.g., Essex County 
Prosecutor's Office, FBI Fugitive Task Force, other law enforcement 
agencies) and informants. Each will provide specific, detailed data on 
the types of crimes and perpetrators sought. The primary goal will be 
to reduce the incidence of drug-related street crime through the 
effectuation of quality arrests.
    The elements of Operation NITRO combine to formulate a cohesive 
plan, which takes into account the range of Police staffing, 
facilities, equipment, and outreach needs. Detailed plans have been 
devised for:
  --Organization and Administration.--The administrative structure and 
        organizational placement, including staffing levels.
  --Deployment and Tactics.--Deployment strategies and street tactics, 
        also, the integral nature of Crime Analysis and the data 
        supplied via COMSTAT.
  --Confrontation and Arrest.--Guidelines for confrontations between 
        NITRO personnel and uniformed members of the Department. 
        Emphasis will be placed on plainclothes recognition, quick 
        identification and the actions to be taken by both the 
        challenging officer and the challenged officer.
  --Facilities and Equipment.--The physical location and equipment 
        needs of the program.
  --Special Considerations.--The methods for maintaining integrity of 
        team members, and legal issues will be explored, including the 
        issue of entrapment. Also, program advertising and public 
        support.
  --Implementation.--A project time line depicting implementation and 
        milestones.
    NITRO will perform two primary functions: plainclothes street 
surveillance of identified hot spots, and uniformed operations. 
Officers can assume disguises to adapt to the landscape in order to 
provide themselves with the anonymity and freedom of movement to pursue 
identified or suspected drug dealers undetected, and maintain watch 
unnoticed at probable crime locations. These tactics are designed to 
result not only in quality arrests but also in the interruption of drug 
transactions and the prevention of injury to citizens. Care must be 
taken, however, to avoid the hazards inherent in this type of work.
    Two or three modules will generally be assigned to high-incidence 
neighborhoods within the four commands. Target Zones (TZ) will be 
established based upon the crime analysis data. All operations will 
take place within the TZ under the direction of the module supervisor. 
Specific deployment tactics will further be determined by the scope of 
the problem in an identified neighborhood. The success of each 
operation depends, to a great deal, on the imagination and 
resourcefulness of the module personnel. When a narcotics operation is 
put in effect, each module will have a minimum of eight members. All 
members will be encouraged to use their skills in their apprehension 
efforts, but are reminded to use only those tactics which would be 
considered constitutionally legal. Considerable classroom instruction 
and role playing should be conducted on entrapment and other 
constitutional issues. Careful planning, adequate communication, proper 
role playing and an efficient back up team are also required. Though 
potentially hazardous, these operations are a most rewarding means of 
apprehending street criminals and reducing the incidence of crime.
    An emerging concept that should be employed to produce lasting 
solutions is a crime control feature known as crime prevention through 
environmental design (CPTED). CPTED principles employ engineers and 
urban planners to permanently alter the landscape in an effort to 
redesign a neighborhood. Such measures include rerouting traffic, 
establishing flow control (one-way streets), permanently curbing 
streets and vacations. Preliminary discussions have taken place with 
the Department of Engineering who have been very cooperative in 
assisting the Police Department with this endeavor.
    The element of plainclothes surveillance requires officers who are 
highly skilled in the art of observing suspicious or out-of-the-
ordinary circumstances. Surveillance tactics are instituted once 
observations of this sort are made, and may last anywhere from a few 
minutes to several hours. Similarly, buy/bust operations, reverse 
operations and long-term undercover operations necessitate patience and 
the investment of time if the results are to be productive. Training in 
surveillance will be conducted to provide officers with the proper 
skills for conducting these delicate matters. This approach will 
increase the likelihood of arrest, the probability of prosecution for a 
felony, the chance of a felony conviction, and the length of the term 
for those sentenced.
    In an effort to fulfill their objective of effecting high quality 
arrests while maintaining a low injury rate, NITRO will promulgate 
guidelines for confrontation and arrest. The primary focus is to 
prevent injuries arising from narcotics operations, and mistaken 
identity issues. Because of the size, diversity, and youthful nature of 
the Department, many experienced officers and inexperienced officers 
are unfamiliar with each other. Since safety is paramount, the need to 
quickly identify plainclothes personnel cannot be overstated. As part 
of the required training, a series of safety precautions will be 
discussed to alleviate most of the problems associated with 
confrontations.
    There are two special considerations of the utmost importance to 
NITRO administrators: legal defensibility of operations and integrity. 
The primary legal concern for the Police Department is the legal 
defense of entrapment. If procedures excessively lure or seduce 
suspects in their conduct as decoys, an apprehended criminal may have 
the defense of entrapment. In brief, entrapment will be a valid defense 
where criminal intent in the mind of the accused was implanted there by 
the officer, and where active police conduct encouraged the crime. The 
NITRO Task Force will provide extensive training, literature, and role 
playing to avoid these mishaps. Detailed tactical guidelines will be 
promulgated as part of the operating procedures governing the unit.
    As with any plainclothes police operation, the susceptibility of 
corruptive practices by officers and supervisors is possible. Operation 
NITRO will pride itself on being corruption-free with a reputation for 
bribery arrests. NITRO administrative personnel will set the 
perspective for the team by personal example. A great deal of energy 
will be channeled into integrity control, and ethics will be the major 
thrust for the integrity campaign. NITRO will constantly be on guard to 
prevent its members from participating in shakedowns, abusing their 
authority, engaging in brutality, using racial/ethnic slurs while 
effecting arrests, and other illegal or improper practices. Complaints 
will be monitored and RAMS reports will be generated quarterly to audit 
the team.
    While the plans for a corruption-free environment are ambitious 
they are not meant to unduly restrict the effectiveness of the team by 
creating paranoia in personnel. Nor are they meant to curtail the 
activities or initiative of creative officers. The element of 
undercover integrity testing is an option that should be discussed at 
length with the Police Director and the Division Commander of Internal 
Affairs.
    Advertising and public support for any Police Department initiative 
are critical to the program's success. The Newark Police Department 
will publicize Operation NITRO through radio and cable TV public 
service announcements, handouts and posters placed throughout the city 
in all police Districts, public and private schools, public libraries 
and at community meetings. The Citizen's Police Academy will be 
utilized to promote this initiative by focusing upon direct contact 
with the community. The advertising campaign will augment the 
establishment of Community Advisory Councils (CAC). CAC's are intended 
to foster a cooperative and positive police/community partnership. 
Working together, the police and the community will design strategies 
specific to local neighborhoods and create a no-tolerance attitude 
towards illegal drug activity.
    The assistance of this committee in enabling the implementation of 
this comprehensive project will be deeply appreciated by the citizens 
of Newark, New Jersey. The improvement of the quality of life in our 
neighborhoods which will be brought about by Project NITRO will aid in 
the renaissance of our City. We thank you for your consideration.
                                 ______
                                 
       Immigration and Naturalization Service, Federal Bureau of 
           Investigation, and Drug Enforcement Administration

    Prepared Statement of the National Border Patrol Council of the 
              American Federation of Government Employees

    The National Border Patrol Council, representing approximately 
9,000 employees, appreciates the opportunity to present its views 
concerning appropriations for the U.S. Border Patrol for the 
forthcoming fiscal year.

                        NEW BORDER PATROL AGENTS

    Illegal immigration remains out of control, and is a serious 
concern for most Americans. Unfortunately, the Administration's budget 
proposal for fiscal year 2001 fails to take this problem seriously, 
requesting only 430 additional Border Patrol Agent positions, even 
though the Illegal Immigration Reform and Immigrant Responsibility Act 
of 1996 mandated the addition of 1,000 new agents for next fiscal year. 
The National Border Patrol Council urges that the full complement of 
new Border Patrol agent positions be funded.

                               PAY REFORM

    The Administration's pay reform package consists of four major 
parts: (1) Upgrading the Border Patrol journeyman agent grade from 
General Schedule (GS) grade 9 to grade 11; (2) replacing the current 
overtime system, Administratively Uncontrollable Overtime, with Law 
Enforcement Availability overtime, and the elimination of Fair Labor 
Standards Act overtime; (3) Paying Special Salary Rates to all Border 
Patrol agents in General Schedule grades 5 through 11 to supposedly 
offset the loss of FLSA overtime; and (4) paying a $2,000 hiring bonus 
to new Border Patrol agents.
    The National Border Patrol Council supports upgrading the 
journeyman pay level for Border Patrol agents. Currently, only about 
one-third of the workforce is at the GS-11 level. Although the average 
agent currently achieves this level within three years after entering 
on duty, this time frame would be longer if attrition were not as high 
and if fewer new agents were being hired. The proposed accelerated and 
automatic promotion process should enhance retention. Serious 
consideration should also be given to upgrading other critical 
occupations within the Border Patrol, such as Detention Enforcement 
Officers and Law Enforcement Communications Assistants.
    The payment of a hiring bonus is also supported by the National 
Border Patrol Council, although it believes that the I&NS should 
exercise the authority granted under 5 U.S.C. Sec. 5754 to pay 
retention allowances of up to 25 percent of base pay to existing 
employees, who are leaving the Border Patrol at an alarming rate.
    The National Border Patrol Council strongly opposes the overtime 
provisions of the Administration's pay reform proposal, which would 
increase the overtime hours and reduce the overtime earnings of all 
Border Patrol law enforcement personnel, greatly exacerbating an 
already unacceptably high attrition rate. Although labeled as ``pay 
reform,'' certain provisions of the Administration's proposal represent 
a giant step backward, removing deserving employees from the coverage 
of the Fair Labor Standards Act and causing them to work more overtime 
hours for less pay. Although the proposal is being promoted as a 
benefit for such employees by placing their overtime pay on par with 
that of criminal investigators, it fails to mention that the provisions 
would not grant basic pay parity, leaving Border Patrol agents one to 
two grades ($7,777 to $16,659 per year) behind criminal investigators, 
and Detention Enforcement Officers even farther behind.
    The current Administratively Uncontrollable Overtime (AUO) system 
is designed to compensate Border Patrol employees for all unscheduled 
overtime hours worked, and is paid at a rate of 25 percent of basic pay 
(assuming an employee averages 9 or more hours of AUO per week). This 
is augmented by Fair Labor Standards Act (FLSA) overtime, which roughly 
makes up the difference between the 25 percent and time and one-half. 
Overtime payments under the FLSA help reduce incentives for agencies to 
force employees to work large amounts of overtime by requiring them to 
fairly compensate employees for all overtime hours worked. The proposed 
Law Enforcement Availability (LEA) overtime is also 25 percent of basic 
pay, and is designed to compensate employees for 2 hours of overtime 
per day, but provides absolutely no compensation for hours in excess of 
that amount. Under LEA, all overtime hours that are not scheduled in 
advance of the administrative workweek are considered unscheduled 
overtime. Unlike AUO, LEA allows agencies to schedule overtime that is 
within their administrative control. Even those overtime hours that are 
scheduled in advance of the administrative workweek under LEA are paid 
at a rate far below time and one-half, as such overtime payments are 
limited by statute at time and one-half the rate of a GS-10 step 1 
(unless it would cause the employee to be compensated at less than 
their hourly rate of pay, in which case they are compensated at their 
hourly rate.) For employees receiving AUO, FLSA roughly makes up the 
difference between this amount and true time and one-half.
    The proposed Special Salary Rate of about 10 percent would only 
result in parity with the current compensation of employees if they 
work 10 or fewer hours of overtime per week. Employees who work more 
than 10 hours of overtime per week would receive less money than they 
currently receive for working such hours. Most Border Patrol law 
enforcement personnel in fact currently work more than 10 hours of 
overtime per week. It is also important to note that the Special Salary 
Rates would not apply to GS-12 Border Patrol pilots or to Detention 
Enforcement Officers at any pay grade. These employees would receive 
thousands of dollars less each year, yet would be required to work more 
overtime hours.
    Furthermore, unless the Attorney General raises the Special Salary 
Rates every year by an amount equal to the locality increases received 
by other employees, Border Patrol employees receiving such pay would 
lose money, as employees can only receive the greater of a Special 
Salary Rate or locality pay increase, but not both. In light of the 
fact that the I&NS and Attorney General have failed and refused to 
provide a foreign language bonus of 5 percent to Border Patrol 
employees since the passage of the Federal Law Enforcement Pay Reform 
Act of 1990, it is highly unlikely that the Attorney General would 
provide annual Special Salary Rate increases.
    It can readily be seen that the proposed overtime compensation 
system would provide a major incentive to managers to force employees 
to work large amounts of overtime. In fact, since the passage of the 
original LEA statute, Criminal Investigators assigned to the Border 
Patrol have seen a marked increase in the number of overtime hours they 
actually work, in addition to countless hours they are required to be 
available for work.

                     FOREIGN LANGUAGE DIFFERENTIALS

    Although the Federal Law Enforcement Pay Reform Act of 1990 (Public 
Law 101-105) authorized agencies to pay a foreign language differential 
of up to five percent of basic pay to any law enforcement officer who 
possesses and makes substantial use of one or more foreign languages in 
the performance of official duties, the I&NS continues to refuse to pay 
its employees for such skills. It should therefore be compelled to 
include such payments in its budget. Foreign language award payments 
should be directed to be included with regular salary payments on a bi-
weekly basis in order to ensure that the money is not diverted to other 
purposes.

                          DISCIPLINARY ACTIONS

    The provision authorizing and directing the Attorney General to 
impose disciplinary action pursuant to policies and procedures 
applicable to employees of the Federal Bureau of Investigation for 
certain violations should not be applied to bargaining unit employees, 
who are covered under the Civil Service Reform Act of 1978. In this 
regard, it is noteworthy that the I&NS' proposed implementation of such 
policy for the current fiscal year excludes members of the Senior 
Executive Service, the very group whose actions gave rise to this 
language. Moreover, the proposed implementation also defines 
``department leadership'' to include all members of the Senior 
Executive Service within the I&NS, which includes numerous field 
managers.

                   TRANSFER OF FUNDS BETWEEN PROGRAMS

    The proposal to allow the Attorney General to transfer funds 
between the ``Enforcement and Border Affairs'' and ``Citizenship and 
Benefits, Immigration Support and Program Direction'' programs is ill-
advised, and should be eliminated.

                          OVERTIME LIMITATIONS

    The National Border Patrol Council supports the proposal to leave 
the annual overtime cap at $30,000, but allow for exceptions in 
circumstances where the Commissioner determines that enforcing the 
overtime cap would harm enforcement or service activities.

                                VEHICLES

    The National Border Patrol Council also supports the proposal to 
allow the use of funds without limitation (within the limits of the 
Enforcement and Border Affairs appropriation) for equipping, 
maintaining, and making improvements to the infrastructure and the 
purchase of vehicles for police-type use.

                               FACILITIES

    The $51 million proposed for construction, repair, renovation and 
maintenance of Border Patrol facilities is inadequate, as many of the 
existing facilities were only designed to accommodate a fraction of the 
employees currently assigned to such offices.

                       PERCENTAGE OF SUPERVISORS

    The I&NS continues to ignore the recommendation of the National 
Performance Review to reduce by half the percentage of its employees 
who are supervisors, and intends to expend significant amounts of money 
hiring large numbers of additional supervisors. This wasteful plan will 
considerably decrease the number of personnel available to actually 
enforce our nation's immigration laws. Accordingly, the I&NS should be 
directed to comply with the aforementioned recommendation.
                                 ______
                                 
    Prepared Statement of Local 511, Professional Employees of the 
 Immigration and Naturalization Service of the American Federation of 
                          Government Employees

                         PRELIMINARY STATEMENT

    Local 511, professional employees of the Immigration and 
Naturalization Service (INS), American Federation of Government 
Employees (AFGE), respectfully requests that Congress provide an 
additional appropriation in the amount of $10 million to upgrade the 
salaries of the INS attorneys and fund the INS attorney payroll 
budgetary shortfall occasioned by insufficient funding of established 
attorney positions.

            NECESSITY FOR AN ADDITIONAL SALARY APPROPRIATION

    It is imperative that the INS attorneys secure long overdue and 
well-deserved salary increases because it has become very difficult for 
the INS to attract and retain attorneys qualified with the requisite 
specialized knowledge to effectuate Congressional mandates and to 
handle the ever-increasing complexity of the immigration laws and 
process. Each year, the INS loses out on qualified employee candidates 
to the private sector, other Federal agencies and other legal divisions 
within the Department of Justice, primarily because of the discrepancy 
between INS salaries and the salaries paid to attorneys by such sector, 
agency and/or division. On average, the INS is compelled to offer both 
entry level and experienced attorney positions to about three 
candidates before the position is filled. Clearly, this evidences the 
fact that the candidates deemed to be the most qualified by the INS are 
seeking positions elsewhere. Further, the INS continuously loses its 
most experienced, well-trained personnel, the attorneys most able and 
effective in handling the sophisticated litigation envisioned by much 
of the recent legislation. The INS, Office of General Counsel, has 
approximately 500 attorneys. In the last nine years, approximately 316 
out of the 500 attorneys resigned from the INS. Statistically, this 
represents almost 65 percent of the agency's legal team. The long-term 
effect of such a high attrition rate on the agency's effectiveness in 
fulfilling its mission is incalculable.
    Over the last four years, there have been sweeping changes in 
Immigration Law. A salary increase for INS attorneys is a necessary 
corollary to the substantially increased knowledge requirements and 
responsibilities required of INS attorneys in the enforcement of such 
new legislation. The increase is essential as incentive to attract and 
retain qualified, competent attorneys specializing in Immigration Law, 
experienced in the more sophisticated Immigration Law enforcement, so 
as to enable the Service to implement the comprehensive immigration 
reforms set forth in the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996, as well as the Congressional mandates 
enunciated in other related immigration laws.

                               BACKGROUND

What we do
    INS attorneys provide a full range of legal support, including core 
responsibilities for representing INS before the Immigration Courts and 
the Board of Immigration Appeals (BIA). INS attorneys support expanded 
enforcement activities, increased arrests, criminal alien removal 
programs, Institutional Removal Programs, anti-smuggling efforts, 
conveyance seizures, expedited removal proceedings and mandatory 
detention and removal of illegal aliens. The attorneys also 
administratively impose civil liabilities upon employers who employ 
unauthorized, illegal aliens in the United States.
    In addition to these core responsibilities, INS attorneys handle 
sensitive ``special interest'' litigation. Special interest litigation 
involves cases that are brought to the attention of INS Headquarters 
through a request for the initiation of proceedings by the FBI or other 
law enforcement agencies. There are several different types of cases 
within the special interest immigration category including: (1) 
``terrorist'' cases or other cases in which the law enforcement agency 
desires to have the alien removed from the United States such as when 
the alien is a fugitive from another country; (2) ``national security'' 
cases as defined under the Immigration and Nationality Act (INA); (3) 
``terrorist-related'' cases, where the alien is not charged with being 
a terrorist but is believed to be involved in terrorist activity; and 
(4) ``high profile'' cases which are cases that are likely to generate 
national media or congressional attention such as the Elian Gonzalez 
case. INS attorneys handling these cases are specially trained and 
often, require upgraded (Top Secret) security clearance because of 
their use of classified information. Of significance, is the fact that 
they coordinate their litigation with other law enforcement agencies 
and branches of the Government so as to assist in the removal of aliens 
that are believed to be involved in terrorist activity, national 
security issues and/or crimes committed in other countries. This type 
of litigation benefits not only the individual law enforcement agencies 
but the United States on a national level as well.
    Another major category of cases now handled by INS attorneys, are 
Federal denaturalization cases. In appropriate instances, INS attorneys 
prepare and institute proceedings in the United States District Courts 
to seek the denaturalization of citizens who obtained their very 
precious naturalized citizenship and corresponding benefits through 
illegal procurement or procurement by willful concealment or 
misrepresentation of a material fact. The INS attorneys handling these 
cases work in conjunction with the United States Attorney's Offices and 
the Office of Immigration Litigation, from whom they receive very 
specialized training.
    In recent years, Congress has changed the face of Immigration Law. 
In 1996 alone, the Immigration Laws were changed twice in the form of 
the Antiterrorist and Effective Death Penalty Act of 1996 and, again, 
as the Illegal Immigration Reform and Immigrant Responsibility Act of 
1996. By the adoption of this legislation, Congress sought to protect 
and secure our borders against the flow of illegal immigration and the 
accompanying problems such as crime, drug trafficking, alien smuggling 
and increased demand on social services and local law enforcement 
agencies.
    In addition to increased Border Patrol personnel, the law also 
provided for stepped up enforcement by INS attorneys, more 
specifically, new provisions were enacted regarding the removal of 
illegal immigrants--especially the criminal aliens--already in the 
country as well as to speed the removal of illegal immigrants who 
arrive at our airports and streamline the process for deporting those 
who are apprehended. Due to Congressional emphasis on lowering crime, 
lowering the cost of imprisoning illegal immigrants and providing 
greater public safety, INS attorneys involved in the prosecution and 
enforcement of immigration laws, are now required to have specialized 
knowledge in state and Federal criminal laws, as well.
    Furthermore, Congress has recently enacted legislation such as the 
Nicaraguan Adjustment and Central American Relief Act of 1997, which 
together with the amended Federal Regulations to Article 3 of the 
United Nations Convention against Torture and Other Forms of Cruel, 
Inhuman or Degrading Treatment or Punishment and stepped up assertion 
of the International Religious Freedom Act, have served to further 
expand the role of INS attorneys in the removal of illegal immigrants 
as well as the need for specialized, sophisticated knowledge of 
Immigration and other related areas of the law.

Pay discrepancy
    The U.S. Army Manpower Analysis Agency recently completed a 
comprehensive review and documented the inadequate staffing needs in 
part, of the INS attorneys, in a 600-page report. The resources 
provided by Congress provide funding and positions for only a portion 
of the total documented attorneys needed to accomplish the task.
    In addition to the amounts contained in the INS budget to remedy 
the serious understaffing of the Legal Proceedings Program, an 
additional appropriation is sought to upgrade the salaries of the INS 
attorneys. This appropriation is essential to provide competitive 
salaries in order to attract and retain qualified, competent attorneys 
specializing in Immigration Law, so as to enable the Service to 
implement the comprehensive immigration reforms set forth in the new 
and increasingly complex immigration laws.
    In the Office of General Counsel, INS, there are only two SES 
positions. The remainder of the approximately 500 attorneys positions 
fall within the GS-905 category and are paid salaries within the GS-11 
through GS-15 range. Shockingly, the average INS attorney salary is 
Grade 14, Step 3, or $70,381. Even more shocking is the fact that the 
General Counsel Budget only provides funding for attorneys at an 
average of Grade 14, Step 1, or $65,983. This causes a significant 
annual payroll budgetary shortfall in the amount of approximately $4 
million (for which part of the requested additional appropriation is 
sought).
    The INS attorney salaries are not competitive with salaries in the 
private sector, other Federal agencies and/or divisions within the 
Justice Department, and/or with the United States Attorney's Offices. 
That the INS attorney salaries are not comparable to the private 
immigration bar, is evident from the Equal Access to Justice Act, 28 
U.S.C. Section 2412. Private attorneys who handle immigration 
proceedings, in appropriate cases, are awarded fees in the amount of 
approximately $134.31 per hour or $279,000 per year based upon their 
``specialized knowledge''. ($125.00 per hour statutory cap adjusted by 
the current Consumer Price Index for urban consumers as of October 
1999, to $134.31 per hour.) This rate may be adjusted upward for those 
attorneys deemed to possess ``even more specialized knowledge''. Thus, 
the INS attorney salaries that average about $70,381 are well below the 
market rate of their counterparts in the private bar.
    The salaries of INS attorneys, particularly, non-supervisory senior 
attorneys are also not comparable to that of other Federal agency 
attorneys such as experienced BIA Attorney-Advisors or the United 
States Trustees, who are funded for and average salaries in the GS-15 
range. The salary range for GS-15 for 2000, is $77,614 through 
$100,897, this is well above the average INS attorney salary. 
Similarly, the INS salaries are below the other senior litigation 
positions within other divisions of the Justice Department as well. The 
salary range for attorney positions in the following Department of 
Justice Divisions are funded for and average within the GS-15 range: 
Anti-trust; Criminal; Civil; Civil Rights; Environment and Natural 
Resources and the Tax Division.
    Finally, the United States Attorneys and Assistant United States 
Attorneys, who are not paid on the GS Scale, also make substantially 
more money than INS attorneys. The United States Attorneys are paid on 
their own pay scale that ranged for 2000 to a maximum of $122,400. It 
should be noted that INS attorneys assist the United States Attorney's 
Offices by preparing litigation reports and, in some instances, by 
sitting second chair in the United States District Court immigration 
litigation cases. In addition, INS attorneys are now handling much of 
the work traditionally handled by the Assistant United States Attorneys 
in the area of judicial denaturalization. A few years ago, there was 
some consideration given to shifting INS attorneys to the United States 
Attorney's pay scale. However, to date, no initiatives have been made 
in this regard.

                               CONCLUSION

    On Monday, February 7, 2000, the Administration released the 
proposed budget of the United States Government for fiscal year 2001. 
The proposed budget included a request for pay reform to upgrade the 
salaries of Border Patrol and Inspections, in acknowledgment of 
increased knowledge requirements and enhanced responsibilities. This 
same rationale would easily support pay reform for the INS attorneys, 
who along with their other aforesaid duties, advise and assist the 
Border Patrol and Inspections units.
    Accordingly, for all these reasons, we respectfully request that 
Congress provide an additional appropriation in the amount of at least 
$10 million to upgrade the salary of INS attorneys and fund the INS 
Attorney payroll budgetary shortfall. The details of any enabling 
legislation could be addressed between us at a later, mutually 
convenient date.
    Mr. Chairman, we look forward to working with you and the other 
members of the subcommittee on fiscal year 2001 CJS Appropriations 
Bill. If you have any questions, please feel free to contact the Local 
511, c/o Janice Montana, Chair, Salary Committee, by telephone at 973-
645-3091 or in writing at 76 B Troy Drive, Springfield, New Jersey 
07081.
                                 ______
                                 
   Prepared Statement of the National Immigration and Naturalization 
      Service Council, American Federation of Government Employees

    On behalf of the members of the American Federation of Government 
Employees, and its National Immigration & Naturalization Service 
Council, and on behalf of my 16,000 colleagues in the Immigration and 
Naturalization Service (I&NS) I would like to thank you for scheduling 
this hearing. I am pleased to be able to provide testimony regarding 
the proposed fiscal year 2001 budget for the Immigration & 
Naturalization Service.
    INS' law enforcement and service responsibilities continue to grow 
more complex. The Service continues to process ever more quickly the 
increasing numbers of applicants for admission to the United States. We 
have reduced backlogs and adjudicated more applications for benefits 
under the Immigration & Nationality Act, and we arrest and deport more 
criminal aliens, and make more drug seizures every year. We perform all 
these missions in an environment growing ever more dangerous and 
contentious with a workforce that is not growing as fast as the 
workload it faces. Despite these facts the men and women of the I&NS 
care deeply for the country they serve and the mission they are charged 
to perform.
    We have a number of concerns regarding the Administration's budget 
proposal for the I&NS. We believe that insufficient resources are 
directed toward enforcement of the I&NA in the interior and at the 
ports of entry, and that additional Inspectors need to be hired to 
insure Inspector safety especially on the land borders where officers 
are frequently forced to work alone.
    We are also concerned because the Administration seeks no 
additional funding for its interior enforcement programs. Interior 
enforcement is the Service's red headed stepchild. INS is presently 
filling only one of every two vacancies in its Investigations Program. 
The Administration seems to see no need for additional Investigations 
resources. The Administration also proposes no increases in resources 
for its Deportation Program. The Administration is proposing steps to 
address its inability to hire sufficient Border Patrol Agents. We 
applaud those actions. But the need for increased staff does not end at 
the border. We must remember Immigration enforcement does not end at 
the Border, and effective enforcement and service programs demand that 
sufficient support personnel also be hired. We also believe that 
additional adjudicators needed to be hired to continue to eliminate 
backlogs in the adjudications programs and insure the appropriate care 
is taken in the exercise of the Service's adjudications functions.
    I&NS faces great difficulty in filling certain positions, 
particularly in the Border Patrol. Similarly, I&NS Inspections is not 
properly graded and many Inspectors seek positions in other branches of 
the Service. The Administration is now attempting to address pay 
disparities and while we fully support the Administration's proposal to 
provide funding to increase the full performance grade level for 
Immigration Inspectors and Border Patrol Agents to GS-11 we have 
concerns regarding certain aspects of the Service's other Pay Reform 
Proposals. We have analyzed the agency's other pay reform proposals as 
they will impact Border Patrol Agents, Pilots, Deportation Officers and 
Detention and Deportation Officers and we find that they are flawed. We 
oppose the Administration's overtime pay reform proposals. While the 
grade related proposals improve pay for entry level Border Patrol 
Agents and Inspectors the overtime related proposals will decrease pay 
for more senior pilots, deportation officers and Border Patrol Agents. 
Cutting the pay of senior officers will not make these occupations more 
attractive.
    The loss of income will average some $4,500 for Deportation 
Officers and Detention and Deportation Officers, who I represent, for 
example. The negative impact on other officers will be similar or 
greater. Clearly, the Administration's ``pay reform'' proposals need to 
be reworked lest they totally demoralize INS' law enforcement 
workforce. It makes no sense to offer some employees a hiring bonus 
while cutting compensation for overtime others are required to work as 
a result of staffing shortages.
    We know that the Congress is concerned about improving morale and 
training for all of INS' officers and in improving INS overall 
effectiveness. Nonetheless we believe it counterproductive to reduce 
compensation provided employees because they are required to work 
overtime. The administration's proposals to change the way employees 
are compensated for overtime work amount to nothing more than asking 
them to work more hours for less money.
    One important aspect of pay reform not addressed in the 
Administration's budget proposal is the law enforcement officer status 
of Immigration Inspectors. In addition to the pay reform proposal for 
Immigration Inspectors now proposed by the Administration, we urge the 
Committee to support extension of law enforcement retirement coverage 
to Immigration Inspectors, as part of Inspections Pay Reform.. A 
proposal now pending before the Congress would accomplish this.
    Briefly, H.R. 1228 would expand the provisions of Section 8336(c), 
Title 5, U.S. Code to cover Immigration Inspectors. The hazardous duty 
retirement provisions of that statute provide that officers working in 
certain occupations may retire at age 50 with twenty years of service 
under the Civil Service Retirement System, or at any age after 25 years 
of service if they are covered under the Federal Employee Retirement 
System. The early retirement provisions are intended to promote the 
maintenance of a young and vigorous workforce in the covered 
occupations. Employees covered under the statute contribute toward 
their pensions at rates higher than do non law enforcement employees. 
The law also provides for mandatory retirement at age 57 for employees 
who have completed twenty years of covered law enforcement service. 
Real pay reform for INS Inspectors must address both pay and retirement 
issues, as the Administration itself now recognizes.
    Thank you for this opportunity to submit this testimony for the 
record.
                                 ______
                                 
                         DEPARTMENT OF COMMERCE

 Prepared Statement of the American Indian Higher Education Consortium

                              INTRODUCTION

    Mr. Chairman and Members of the Subcommittee, on behalf of this 
nation's 32 American Indian Tribal Colleges, which comprise the 
American Indian Higher Education Consortium (AIHEC), we thank you for 
the opportunity to share our fiscal year 2001 funding requests 
regarding the United States Departments of Commerce, Justice and State.
    Under the Department of Commerce programs, we will address five 
specific areas:
  --We request that the Subcommittee fully support the President's 
        Budget Request of $45 million for the Technology Opportunities 
        Program (TOP) to help in narrowing the Digital Divide in Indian 
        Country.
  --We request that some funding for the New Markets initiative be 
        specifically directed to the Tribal Colleges to complete a 
        five-year technology infrastructure strategic plan with a 
        detailed cost assessment. This critical step in planning will 
        allow the Tribal Colleges to further address the much-needed 
        economic development issues of tribal communities.
  --We strongly urge support of a new $28 million program designed to 
        build math, science and technology capacity at Tribal Colleges 
        and other Minority Serving Institutions.
  --We urge Subcommittee to support the Economic Development 
        Administration's efforts to address the chronic unemployment 
        and poverty in our reservation communities and to include 
        report language that would foster partnerships between the EDA 
        and the Tribal Colleges.
  --We request support and expansion of the Internal Trade 
        Administration (ITA) initiative to help Native Americans enter 
        new markets and increase cultural heritage tourism as part of 
        their communities' economic development plans. Tribal Colleges 
        often serve as the tribal archive and community centers and are 
        a logical catalyst for attaining the economic development goals 
        of both the ITA and tribal communities.
    Under the Department of Justice programs, we request that the 
Subcommittee fully support and build upon the President's budget 
recommendation of $1 million for a Tribal College Law Enforcement 
Training Initiative. This program would support training for law 
enforcement curricula--especially important to the Tribal Colleges due 
to the high rate of crime on American Indian reservations. 
Specifically, we request that this project be increased to a level of 
$5 million.
    This statement will cover two areas: First, it will provide some 
background on the Tribal Colleges and second, it will provide 
justifications for the above funding requests.

                     BACKGROUND ON TRIBAL COLLEGES

    In the 1960s, dismal statistics concerning the American Indian 
experience in education brought tribal leaders to the realization that 
only through local, culturally-based education could many American 
Indians succeed in higher education and help bring desperately needed 
economic development to their isolated and underserved communities. The 
Tribal College movement began more than 30 years ago as a very sound 
and well thought-out solution to this problem. In the late 1960s and 
early 1970s, the first Tribal Colleges were chartered by their 
respective tribal governments, to be governed by boards of local tribal 
people. These first colleges were started, with little money and a lot 
of determination, in abandoned and even condemned government buildings 
and old trailers, using three-legged desks, wood crates for shelves and 
typewriters with missing keys. In 1972, the first six fledgling 
tribally-controlled institutions came together to form the American 
Indian Higher Education Consortium. Today, AIHEC is a cooperatively 
sponsored effort and integral support network for 32 member 
institutions in the United States and one in Canada.
    Tribal Colleges and Universities now serve more than 25,000 
students from more than 250 federally recognized tribes and are located 
in 12 states. Tribal Colleges offer primarily two-year degrees, with 
some colleges offering four-year and graduate degrees. Together, the 
colleges represent the most significant development in American Indian 
education history, promoting achievement among students who would 
otherwise never know educational success. All of the Tribal Colleges 
are fully accredited, with the exception of four institutions that are 
accreditation candidates.
    Despite our successes, Tribal Colleges remain the most poorly 
funded institutions of higher education in this country, and although 
conditions at some have improved substantially, many of the colleges 
still operate in trailers, cast-off buildings, and facilities with 
crumbling foundations, substandard and exposed wiring and leaking 
roofs. In spite of such a fragile existence, Tribal Colleges are 
bringing advanced technology to Native communities and partnering with 
high technology firms to build an American Indian information 
technology workforce. For example, Dine College, serving the Navajo 
Nation in Arizona and New Mexico, has joined Coconino Community College 
and Grey Hills High School in a partnership with IBM to develop, 
prepare, and retain an American Indian workforce in jobs related to the 
high tech/computer industry. But programs such as this represent only a 
first step. In response to a recent query from the Senate Indian 
Affairs Committee, AIHEC surveyed the Tribal Colleges to determine the 
status of technology infrastructure at the nation's Tribal Colleges. 
The results revealed that the 21 responding colleges estimated a cost 
of $4,650,000 to be brought up to speed with current technology. 
Expanding this average indicates that the 32 colleges in the United 
States would require a minimum of $8,000,000 to be brought safely into 
the first phase of the new technology era.
    Our core operations funding, which is authorized under the 
Tribally-Controlled College or University Assistance Act and funded 
through the Department of Interior appropriations bill, remains grossly 
inadequate. Despite an increase in our appropriation of $4 million in 
fiscal year 2000, the Tribal Colleges' appropriation of $3,433 per 
Indian student (ISC) is dramatically less than the average per student 
revenue of mainstream two-year institutions and falls far short of the 
authorized level of funding currently $6,000 per Indian student. In 
addition, due to the location of the majority of Tribal Colleges on 
federal trust territory, states have no obligation and in most cases, 
do not fund the Tribal Colleges. In fact, most states do not even fund 
the institutions for the non-Indian students who attend our colleges. 
The non-Indian enrollment at the Tribal Colleges is approximately 20 
percent.
    Tribal Colleges serve as a vehicle to accomplish what centuries of 
paternalism and outside experimentation have failed to do: We are 
enabling American Indians to succeed and regain self-sufficiency. 
Paramount to achieving this goal are the innovative teaching 
philosophies of the Tribal Colleges, and the fact that our graduates 
live and work on the reservations and impact others by giving back to 
their communities serving as role models and leaders. This ``ripple 
effect'' can be seen in increased community pride, the increased 
importance of succeeding in elementary and secondary school, and in 
Tribal College graduates implementing creative and effective solutions 
for their communities' problems. Today, approximately one in five 
American Indians live on a reservation. Past federal policies of 
relocation and neglect of these trust territories have left once proud 
Indian communities in abject poverty. The logical alternative to this 
lose-lose situation is demonstrated by the Tribal Colleges. Through the 
Tribal Colleges and Universities American Indian communities are being 
effectively developed, residents can move off the welfare rolls and 
into gainful employment, lowering taxes for all Americans while 
providing critical services to these historically under served areas. 
It would be tragic not to expand the modest investment in, and 
capitalize on, the human resources that will help open new avenues of 
economic development specifically through enhancing Digital Opportunity 
and thereby narrowing the Digital Divide.

                             JUSTIFICATIONS

    Given the needs outlined above and the reality of an ever-expanding 
Digital Divide, the Tribal Colleges request support for the following 
programs and initiatives within the Department of Commerce.
    Technology Opportunities Program (TOP).--We urge you to support the 
proposed $45 million funding level for the Technology Opportunities 
Program (TOP). This program is designed to promote access and the 
necessary infrastructure to bring high tech opportunity to all 
Americans. The TOP program is ideally suited to helping the Tribal 
Colleges meet the needs of their isolated rural communities through 
innovative technology. Lac Courte Oreilles Ojibwa Community College 
(LCOOCC) in Hayward, Wisconsin, plans to submit an exciting TOP 
proposal this year on behalf of several Tribal Colleges. LCOOCC 
proposes upgrading the existing satellite link system to a 
supercomputing grid that would create a wide area network for as many 
as 12 Tribal Colleges, initially. Students, faculty and staff at these 
colleges would be able to access software and the Internet on a high 
performance T1 line. The success of this promising proposal to bring 
high tech capability to Indian Country depends in part on the Tribal 
Colleges' ability to fully participate in programs such as TOP. A 
substantial barrier to full participation is matching requirements. We 
request report language in the appropriations bill that would waive the 
program's matching requirement for the Tribal Colleges.
    New Markets Initiative.--In 1999, the Department of Health and 
Human Services (DHHS) funded an initial assessment of the current 
technology capacity at the Tribal Colleges and Universities. The 
results of the study, released last September, were eye opening. Nearly 
one-third of the Tribal Colleges were found not to be Y2K ready. The 
results also clearly identified critical areas of technology 
infrastructure enhancement as a top priority.
    Funding for a Tribal College--New Markets Initiative would assist 
the Tribal Colleges turning the Digital Divide into ``Digital 
Opportunity'' for the isolated communities where most colleges are 
located. To begin accomplishing this goal, our institutions would 
engage in a two-step process. The first step would be the development 
of a comprehensive 5-year technology infrastructure plan and cost 
assessment of its implementation, which began last year with the DHHS 
Y2K study. The second step would focus on convening a national, high-
level meeting of public and private sector organizations interested in 
promoting Internet connectivity for Indian Country. Participants would 
include private industry, foundations, federal agencies and other 
partners who could assist Tribal Colleges in securing funds from a wide 
array of sources to bring digital opportunity and economic development 
to Indian Country. We urge the Subcommittee to direct the Department of 
Commerce to work with the President's Board of Advisors on Tribal 
Colleges and Universities to convene this important meeting.
    This process of partnering with the private sector is already 
underway at some Tribal Colleges. For example, Salish Kootenai College 
(SKC) in Pablo, Montana has an ``Internet access partnership'' with 
BigSky Net, a regional Internet provider. Under the agreement, SKC 
permits BigSky Net to house Internet server equipment on its campus, 
and in return, SKC students and faculty get unlimited Internet access 
at no cost (except for a monthly T-1 data connection fee from Pablo to 
Kalispell, Montana). Additional funding would enable more Tribal 
Colleges to participate in such programs and partnerships, further 
enhancing our efforts to meet the goals of our collective missions: to 
bring higher education and economic development to tribal communities.
    Building Math, Science and Technology Capacity at the Tribal 
Colleges and other Minority Serving Institutions.--The Commerce 
Department is proposing a program to spur the interest of minority 
students in the field of science critical to the mission of the 
National Oceanic and Atmospheric Administration (NOAA) and the National 
Institute of Standards and Technology (NIST). We urge you to support 
the full funding of this $28 million program designated for Minority 
Serving Institutions.
    Economic Development Administration (EDA).--The EDA is charged with 
providing assistance to economically distressed areas and regions to 
alleviate conditions of ongoing unemployment and underemployment. 
Contributing to the economic development of American Indian 
reservations is an essential goal of the Tribal Colleges. We strongly 
support the commitment of the EDA to strengthen its efforts to assist 
American Indian tribes by providing capacity building and developing 
finance and infrastructure projects needed to enable our communities to 
be more effective and competitive in economic development efforts, as 
stated in the fiscal year 2001 budget recommendation sent to Congress. 
We request report language that will expand this program to include 
partnerships with Tribal Colleges to enable our institutions to further 
address the chronic unemployment and poverty that plague reservation 
communities.
    International Trade Administration (ITA).--The ITA has targeted 
Native American Economic Development as a priority in fiscal year 2001. 
The ITA intends to assist Native Americans in their efforts to use 
cultural heritage tourism as part of economic and community development 
plans. The Tribal Colleges are currently pursuing partnerships with 
USDA, US-AID, Interior and the private sector to bolster international 
programs, tourism, trade, and outreach to other indigenous peoples. For 
example, Haskell Indian National University, Lawrence Kansas, recently 
received a partnership grant from US-AID to work in the Altai (Siberia) 
region of Russia. The Native American economic development program of 
ITA could partner with the Tribal Colleges to enhance the work that has 
already been started by the Tribal Colleges.
    Department of Justice--Office of Tribal Justice.--Tribal Colleges 
play an intricate part in the education system that supports tribal 
justice on Indian reservations. Nearly one-third of the Tribal Colleges 
currently offer justice related programs. The President's budget 
recommends $1 million to support tribal law enforcement and law related 
education and training at the Tribal Colleges. We urge the Subcommittee 
to build upon this recommended level and create a $5 million Tribal 
College Law-Related Education Initiative.
    Existing nationally certified law enforcement programs at Tribal 
Colleges, such as United Tribes Technical College in Bismarck, North 
Dakota, offer specialized curriculum that provides a stronger 
educational foundation and promotes a heightened sense of awareness. 
These curricula require students to take courses in psychology and 
sociology and classes in administration. One model program is at Fond 
du Lac Tribal and Community College in Cloquet, Minnesota, that offers 
both Associate of Applied Science and Associate of Science degrees in 
Law Enforcement. The Fond du Lac programs can be completed in two years 
and incorporate direct field experience and a multicultural environment 
into its coursework better preparing graduates for working in the 
field.
    We believe that the additional funding to the Tribal Colleges for 
tribal law enforcement and law-related education and training will 
allow our institutions to continue and expand on-going programs of 
training better law enforcers, legal personnel, court and judicial 
staff, and tribal government officials in a manner that meets state and 
national standards while, addressing important and unique cultural 
needs.

                               CONCLUSION

    In light of the justifications presented in this statement and the 
overwhelming evidence that without an insurgence of educational and 
technology centered opportunity the Digital Divide will widen in rural 
America, we urge the Subcommittee to increase funding for Tribal 
Colleges to help bring economic development to Indian Country. 
Fulfillment of AIHEC's fiscal year 2001 request will strengthen the 
mission of our colleges and the enormous, positive impact our 
institutions have on our communities and will help ensure that we are 
able to properly educate and prepare thousands of American Indians for 
the workforce of the 21st century. Without Tribal Colleges to serve as 
the means for moving from welfare to work, much of the reform 
accomplished by the Congress will fail throughout Indian Country. As 
demonstrated in these remarks, Tribal Colleges have been extremely 
responsible with the federal support they have received in the last 19 
years. It is important that the Federal Government now capitalize on 
its investment. As the 1997 Carnegie Report on Tribal Colleges stated, 
``Now, as strongly as ever, we repeat our conviction that Tribal 
Colleges deserve continued support. Their value has been proven, but 
their vision is not yet fulfilled'' (Native American Colleges: Progress 
and Prospects, Carnegie Foundation for the Advancement of Teaching, 
1997). Our institutions have proven themselves to be a sound federal 
investment, and we ask for your continued support.
    Thank you.
                                 ______
                                 
   Prepared Statement of the Alachua County Board of Commissioners, 
                        Alachua County, Florida

    Mr. Chairman: Thank you for allowing the Alachua County Board of 
Commissioners to present written testimony before your Subcommittee 
regarding a major economic initiative for which the County seeks your 
support under the Department of Commerce Economic Development 
Administration.
    Alachua County is seeking federal funds to assist with expanding 
its collaborative neighborhood revitalization program. This 
collaborative program includes the Alachua County Community Services 
Department, Office of Code Enforcement, Alachua County Sheriff and 
Alachua County School Board. The Alachua County Commission requests 
$2.3 million in federal funding to expand this successful 
revitalization model to other neighborhoods. The process would include 
additional community needs assessments, increased educational, training 
and job readiness opportunities, mobilization of community resources 
and community empowerment for sustainability of neighborhoods 
throughout Alachua County. The funding will also support additional 
Sheriff's deputies at a level needed to provide adequate and intensive 
law enforcement, and community policing activities to the expanded 
Partner areas. Following is a background on this initiative.
    In 1993, the Sheriff's Office made a request to the Board of County 
Commissioners for assistance due to the spiraling crime rate in 
southwest Alachua County. The Sheriff's Office reported that 57 percent 
of its 911 calls came from an area that had only 3.2 percent of the 
population. This area was identified as consisting of the five 
following neighborhoods: Clayton Estates, Majestic Oaks, Tower Oaks, 
Cedar Ridge and Sugarfoot. In addition to the disproportionately high 
crime rate, it was determined that there were inadequate community 
services, a high percentage of absentee landlords, a lack of concern by 
most residents, in concert with the physical appearance of the 
neighborhoods steadily deteriorating.
    In fiscal year 1994, the Alachua County Commission provided funding 
for a Program Manager to staff the Partner's for a Productive Community 
(PPC) Program. The PPC was launched as a strategic planning effort 
based on three goals: to establish neighborhood-based services, to 
develop public/private partnerships and to focus on prevention. The 
success of this project depended upon the coordinated efforts of the 
Sheriff's Office, the Courts and the Department of Community Services. 
The objectives of the Sheriff's Office were to reduce the number of 
calls from the area and to develop trusting relationships with the 
residents interested in improving their community. The objectives of 
the Courts were to help with the swift prosecution of cases brought 
forth and to increase personnel in key areas. The objectives of the 
Department of Community Services through a Program Manager were to 
develop and implement a needs assessment, to assess social services 
needs in accordance with the results of the assessment, to develop a 
community council comprised of owners, tenants and property managers. 
This project would be a multi-agency strategy to stabilize, revitalize 
and sustain these five neighborhoods.
Community Improvements
    Since fiscal year 1995 accomplishments include: free community day 
care for 75 children, 30 community day care slots, eight in-home day 
care slots, establishment of a medical clinic provided by the Alachua 
County Health Department, the creation of 30 new jobs by the Early 
Progress Center, reduction in 911 calls from 57 percent to 14 percent 
of total calls, the overall increase in property values for four of the 
five neighborhoods. The provision of seasonal recreation programs for 
children in the targeted communities by the Y.M.C.A. In 1996 the PPC 
received the National Association of Counties' Achievement Award in 
recognition for distinguished and innovative contributions to improving 
and promoting county government. Additionally, an award was received 
from the League of Women Voters for outstanding community service.
    New activities include community forums on landlord and tenants 
issues, welfare reform and subjects determined to be germane in the 
effort to educate and revitalize this community. Steps have been taken 
to establish 4-H Clubs in the communities to provide positive learning 
and character building experiences for youth. It is also being proposed 
to implement adult literacy classes, computer training, General 
Education Diploma preparatory training and a One Stop Program to 
provide employment opportunities. A community health fair was conducted 
with numerous agencies involved in providing immunizations for area 
children as well as the dissemination of information on health and 
safety issues. Three major and three mini neighborhood cleanups were 
completed. Through diligent efforts of the Office of Codes Enforcement, 
Alachua County government has reduced the number of abandoned and 
vandalized buildings from five to two.
    The sustaining factor within this community is the formally 
organized Partner's for a Productive Community Council. The Council is 
the guiding force that deals with issues and determines unmet needs. It 
has become incorporated and has received a donation of space (estimated 
to be worth $5,000.00 per year) which will house the organization as 
well as the Center for Community Services.
    Finally, in December 1999, Alachua County received Official 
Recognition (OR) from the Executive Office of Weed and Seed for two of 
the neighborhoods being served by the Partners for Productive 
Communities Program. There is no funding associated with this 
recognition. This OR will further strengthen the long-term efforts to 
improve the quality of life in these neighborhoods.
    We hope that the Subcommittee will find this critically important 
project worthy of your support. Thank you for your consideration.
                                 ______
                                 
   Prepared Statement of the American Society of Mechanical Engineers

    Mr. Chairman and Members of the Subcommittee: The National 
Institute of Standards and Technology (NIST) Task Force of the Council 
of Engineering, and the Council on Codes and Standards, of the American 
Society of Mechanical Engineers (ASME International), is pleased to 
have this opportunity to provide written testimony on the fiscal year 
2001 NIST budget request.
    ASME is the premier organization for promoting the art, science and 
practice of mechanical engineering in the world. It conducts one of the 
world's largest technical publishing operations, holds some 30 
technical conferences and 200 professional development courses each 
year, and sets many industrial and manufacturing standards. This 
testimony represents the considered judgment of the ASME NIST Task 
Force and the Council on Codes and Standards, and is not necessarily a 
position of ASME as a whole.
    Mechanical engineers have a long-standing professional interest in 
the engineering, technology, development, and innovation that influence 
the economic well being of the nation. The ASME NIST Task Force and the 
Council on Codes and Standards have worked with NIST and thus recognize 
NIST as one of the key government agencies that contributes to the 
development and application of technology.
    ASME has long supported the mission of NIST, which is to promote 
U.S. economic growth by working with industry to develop and apply 
technologies across a broad spectrum of areas appropriate for the 
civilian industrial sector, and to develop and maintain world class 
capabilities in metrology and standards. NIST's technical programs are 
unique because they foster government and industry cooperation through 
cost-sharing partnerships that create long-term investments based on 
engineering and technology. These programs are aimed at providing the 
technical support necessary to our nation's future economic health.

Measurement and Standards
    The fiscal year 2001 budget request would provide $332.3 million 
for the Measurement and Standards Laboratories, a 17 percent increase 
over the current fiscal year. The Task Force supports this increase. 
The laboratories provide U.S. industry with critical technical 
information through their work in developing new measurement methods, 
testing techniques, data evaluation, and standards. NIST laboratories 
also serve as the U.S. reference point for measurements with 
counterpart organizations throughout the world. The fiscal year 2001 
appropriation for the Measurement and Standards Laboratories will 
support further development of critical measurement technologies, 
methods, and services needed by the U.S. to promote technological 
progress, improve products and services, and enhance international 
competitiveness.
    The Department of Commerce, working through NIST, continues to 
provide essential support to the private sector's efforts to assist 
federal agencies in meeting the provisions of The Technology Transfer 
and Advancement Act of 1995 (Public Law 104-113), which requires the 
federal government to use private sector voluntary consensus standards. 
In some cases, this has proven to be a challenging enterprise for both 
the standards development organizations and the federal agencies. 
Although the process of converting from government standards to 
voluntary consensus standards is well underway, we continue to look to 
NIST and the congressional oversight committees to encourage this 
effort and to monitor the progress made to date.
    The ASME continues to support NIST's efforts to elevate U.S. 
participation in the international standards development process. Such 
efforts must include continuing support for U.S. representation on the 
international standards bodies (ISO and IEC). Without adequate 
representation on these bodies, the nation's trade interests will be 
severely compromised.
    For the laboratories to continue developing and providing the 
state-of-the-art measurements that underpin U.S. industrial 
performance, NIST requires facilities that will enable it to deliver 
the best possible measurement system. The Task Force supports the 
request of $35.9 million for the critical repair, maintenance, and 
safety upgrades at NIST's facilities in Maryland and Colorado.

Extramural Programs
    The fiscal year 2001 budget request would provide $339 million for 
NIST's Extramural programs. These programs are true public/private 
partnerships that require cost sharing by the private sector and focus 
on investments that are expected to provide broad-based benefits to the 
economy. These on-going programs, the Advanced Technology Program (ATP) 
and the Manufacturing Extension Partnership (MEP), are merit-based, and 
closely evaluated. The Task Force believes that the ATP and MEP are 
good for the nation's economic well being and the health of the U.S. 
science, engineering, and technology enterprise. The ATP provides cost-
shared funding to industry for high-risk research and development 
projects with potentially broad-based economic benefits for the United 
States. The Task Force supports the President's request for $175.5 
million in fiscal year 2001 for ATP to promote industry's ability to 
undertake technologically challenging initiatives that have broad 
economic promise. When combined with anticipated carryover and prior 
year recoveries, the request will permit approximately $65 million for 
new awards in fiscal year 2001.
    The ASME NIST Task Force also supports the $114.1 million request 
for the MEP, which will permit NIST to continue providing the federal 
share of funding needed to support an existing network of centers 
serving smaller manufacturers in all 50 states, the District of 
Columbia, and Puerto Rico. With its fiscal year 2001 base funding, MEP 
will work to increase the capabilities and effectiveness of MEP 
centers, collect and evaluate performance and impact data, and further 
develop the electronic networking and information capabilities of the 
MEP system to strengthen communications.
    Cooperative technology programs such as the ATP and MEP have been 
catalysts in bringing government, industry, and universities together 
to enhance the economic competitiveness of the nation. These programs 
are needed to improve the transfer of new discoveries in science and 
engineering to innovative technologies, global quality practice, and 
profitable manufacturing capabilities on the shop floor.

New Initiatives
    The fiscal year 2001 NIST budget request also contains a number of 
initiatives that recognize the nation's economy is being driven in 
large part by recent advances in information technology (IT), which 
today provides an essential foundation for the nation's economic growth 
and national security. However, this critical IT infrastructure could 
leave the nation vulnerable to disruptions caused by natural disasters, 
human error, equipment failures, and purposeful attacks.
    The fiscal year 2001 NIST budget request reflects NIST's 
participation in the recently launched National Plan for Information 
Systems Protection. The Task Force supports the budget request for $60 
million in new funding to protect the nation's critical information 
infrastructure. Of the total amount, $50 million would be allocated to 
fund the launching of the Institute for Information Infrastructure 
Protection (I\3\P), a public-private partnership program to support 
research and technology development to protect critical information and 
telecommunications infrastructures from attack or other failures. An 
additional $5 million would allow NIST to develop new measurements, 
standards, test methods and guidelines to better protect IT elements of 
the nation's critical infrastructures (e.g., security engineering and 
system architecture, advanced cryptography through a Critical 
Infrastructure Protection (CIP) Research and Development effort). The 
remaining $5 million would enable NIST to strengthen the security of 
federal computer systems to resist attempted cyber-terrorism and to 
recover from security breaches and to make that expertise available to 
other federal agencies through the formation of a CIP Expert Review 
Team.
    Current forecasts indicate that business-to-business e-commerce 
transactions will continue to grow rapidly. This trend will have broad 
economic impact by lowering production costs and raising productivity 
throughout the economy. Businesses are increasingly using e-commerce 
for a wide range of critical processes throughout the supply chain. The 
continued growth of these practices will require new infrastructural 
tools and capabilities. The Task Force supports the request for $14 
million in new funding to collaborate with the private sector to build 
the new infrastructure for an e-commerce economy.
    The Task Force also supports the request for $46.3 million to 
expand the technology horizon through the development and measurements 
and standards needed to promote active pursuit of long-range 
opportunities to ensure that the U.S. economy will benefit from the 
next major wave of technological advances. This budget proposal would 
fund initiatives in nanotechnology and combinatorial science, two areas 
with bright prospects for rapid progress and the potential to deliver 
significant returns to the U.S. industrial and national economies.
    The fiscal year 2001 NIST budget request also includes $15.5 
million to fund a three-pronged approach to increase the number of 
highly skilled scientists and engineers through increased partnerships 
with minority-serving institutions and expansion of the NIST/National 
Research Council Postdoctoral Research Fellowship Program. The Task 
Force supports this effort to provide a continuous supply of technical 
expertise and well-trained people that are vital to the continued 
success of a national economy driven by high-tech successes.
    Thank you for your consideration of our views on the fiscal year 
2001 NIST budget request.
                                 ______
                                 
   Letter From Kevin Klose, President and CEO, National Public Radio
                                                 February 24, 2000.
The Honorable Judd Gregg,
Chairman, Commerce-Justice-State Subcommittee, Senate Appropriations 
        Committee, 146A Capitol Building, Washington, DC.
    Dear Chairman Gregg: Thank you for the opportunity to comment on a 
fiscal year 2001 appropriation for the Public Telecommunications 
Facilities Program (PTFP) at the National Telecommunications and 
Information Administration (NTIA), part of the U.S. Commerce 
Department. On behalf of National Public Radio (NPR) and the hundreds 
of public radio stations it represents, I respectfully submit this 
letter and attached statement for the hearing record.
    Each week, nearly 20 million Americans listen to the programming 
offered by public radio stations. Since its founding exactly 30 years 
ago this week, NPR and its Member stations have become an indispensable 
source of news, information, cultural and educational programming in 
this country. Critical to the success of public radio is the PTFP 
program.
    With sufficient resources, public radio stations nationwide will be 
able to enhance their technical infrastructure, thus enabling stations 
to better serve the American public. Furthermore, as public 
broadcasting expands into the digital universe, NPR and its Member 
stations are eager to work with you to encourage the continued growth 
and survival of public radio and television. But without active support 
by Subcommittee Members, those resources may remain beyond the grasp of 
our Member stations. The time for reinvestment in public broadcasting 
is now.
    Public broadcasters support the Administration's request for a $110 
million federal appropriation for PTFP. This recommendation is further 
outlined in the attached supporting statement.
    Public broadcasters seek a fiscal year 2001 $110 million PTFP 
funding level to maintain and expand existing service. PTFP support is 
essential to the vital role public stations play in their communities. 
PTFP is a matching grants program for public broadcasting stations, 
radio reading services for the blind and other non-profit 
telecommunications entities. All PTFP dollars go directly to local 
stations, assisting them in the purchase of equipment to extend their 
signals into un-served and under-served areas, replacement of outmoded 
equipment and upgrade of facilities. It is an excellent public-private 
partnership.
    Public broadcasters urge the Subcommittee to appropriate $110 
million to PTFP for the conversion to digital broadcasting. Public 
broadcasting faces a daunting challenge in its conversion to digital 
technology. The estimated cost to the entire public broadcasting 
industry is $1.7 billion. Public radio stations are facing an estimated 
$70 million in digital broadcast-related costs: an estimated $11 
million to help stations defray tower dislocation costs and maintain 
analog broadcasts and $60 million to assist in public radio's own 
conversion to digital transmission standards.
    With additional funding for PTFP, public broadcasters nationwide 
will be supported in their efforts to sustain local programming, 
encourage community discourse, and present ideas while adapting to the 
rapidly evolving digital world. Public radio is one of the best sources 
of local programming in light of the consolidation in the radio 
marketplace.
    Again, thank you for your long-standing commitment to our nation's 
public broadcasters and the citizens and communities they serve.
            Sincerely,
                                               Kevin Klose,
                                                 President and CEO.

            Prepared Statement of the National Public Radio

                              INTRODUCTION

    NPR is a private, non-profit corporation that produces and 
distributes award-winning programming such as Morning 
Edition, All Things Considered, Performance 
Today, Car Talk and Jazz Profiles. NPR is 
also a membership organization comprised of noncommercial, educational 
radio stations that are locally licensed and controlled. Moreover, 
Member stations design their own formats--combining locally produced 
programming with offerings from NPR and other programming sources. Each 
station's format is crafted to provide the best service for its 
respective community.
    Thank you for the opportunity to comment on the Public 
Telecommunications Facilities Program (PTFP). PTFP distributes federal 
grants to public stations that must be matched by the local community. 
Congress has invested in the construction and upgrade of local public 
broadcast facilities through PTFP since 1962 and it is the only capital 
grants program for public broadcasting stations. The fundamental 
element underlying federal support is the importance Americans place on 
public broadcasting programming and services.

            PUBLIC BROADCASTING ACCOMPLISHMENTS THROUGH PTFP

    The Program Links Rural & Un-served Areas With the Greater 
Community.--PTFP especially benefits rural areas and states like 
Kentucky, Alaska, New Mexico and Colorado where topography or sheer 
size makes it difficult for people to receive a public radio signal. 
Translator/booster facilities, or auxiliary broadcast facilities, 
typically serve sparsely populated areas that often lack a sufficient 
economic base to support a full service station. These facilities are 
usually established only as a result of the community's desire to 
receive first or additional public radio service, and are funded 
through federal and/or state grants or as a result of modest capital 
campaigns funded by the future listeners. In rural and other under-
served areas, with relatively fewer radio and television signals 
available, translators have a heightened meaning to public radio 
listeners.
    According to the Commerce Department, the 1998 and 1999 grants to 
public radio stations included projects expanding American's access to 
public radio to more than 628,000 people who presently do not receive 
any such signal. Communities to receive a first public radio service 
because of the 1999 grants include Cape May, New Jersey; Jackpot, 
Nevada; and Mojave, California.
    For instance, KNAU-FM in Flagstaff, Arizona and the Grand Canyon 
Association (a private, nonprofit group dedicated to providing 
information about the Grand Canyon) received a 1999 PTFP grant to bring 
service to Grand Canyon, Arizona. A 3,000-watt station will be 
established, capable of producing local programming. The new station 
will cover an 8,000 square mile area, including part of a Native 
American reservation, and bring public radio service to 4,300 permanent 
residents and nearly five million visitors each year. The community 
does not have the economic base to support a full station. The 3,000-
watt station will bring the outside world to Grand Canyon via KNAU-FM, 
as well as provide an outlet for local programming.
    PTFP Will Permit Replacement of Translators with Full Powered 
Origination Service.--As expressed by the Subcommittee and the 
Congress, there is a need to better serve rural and other under-served 
areas as well as un-served communities. PTFP funding can assist 
stations in converting their secondary translator/booster facilities to 
primary full powered facilities capable of local producing programming. 
As a result of these upgrades, rural and under-served communities will 
be able both to receive and to produce locally responsive programming.
    PTFP Assists in Maintaining and Upgrading the Existing 
Infrastructure.--Sustaining the public broadcasting system is a key 
PTFP goal, and the replacement of aging, obsolete equipment is a 
critical concern for stations. Public radio is in need of continued 
financial support because the infrastructure is aging and in many cases 
obsolete. Much of the equipment is old and must be replaced. 
Unfortunately, much of the equipment is so old that replacement parts 
are no longer available. For instance, public radio station KCAW-FM in 
Sitka, Alaska, received a 1999 grant for $29,700 to replace a failing 
18-year old transmitter. The typical life-span of a transmitter is 12-
15 years.
    Similarly, KRWG-FM in Las Cruces, New Mexico received a 1999 grant 
for nearly $14,000 to replace an old, worn-out studio-to-transmitter 
link (STL) and audio processor with a digital STL and compatible 
digital processor. The grant will allow KRWG-FM to continue serving 
approximately 263,000 people.
    A $27,895 PTFP grant will enable New Hampshire Public Radio to 
improve the broadcast quality of the state network by replacing the 
obsolete and failing transmitter at repeater station WEVH-FM in 
Hanover. The project will also replace recording and playback equipment 
at WEVO-FM in Concord. New Hampshire Public Radio serves a population 
of over 900,000 people.
    The PTFP program also support radio reading services that help 
combat the isolation of blind and elderly disabled people nationally. 
The radio reading services predominantly rely on public radio's FM 
subcarrier channels. In 1999, a grant was made to extend the service 
area of the Iowa Radio Reading Information Service (IRRIS) in Des 
Moines, Iowa. The project will acquire satellite up-link and down-link 
equipment to enable IRRIS to provide its service to Iowa City, Cedar 
Falls, and Sioux City, Iowa. The grant will also purchase a supply of 
the special receivers needed by the visually handicapped in those 
communities to utilize the service. About 1,000 visually handicapped 
people will receive service in the added communities.
    A significant increase in the PTFP appropriation is necessary to 
enable public radio to meet the challenges posed by an aging 
infrastructure and expanding service to un-served and under-served 
areas.

                           DIGITAL CONVERSION

    Today's new technology will soon become tomorrow's standard 
operating equipment. Public radio and television can realize its future 
through the assistance of a $110 million PTFP appropriation. In fact, 
this increase in federal support through PTFP will greatly enhance the 
success of local stations to attract state and private funders 
necessary to convert radio and television stations to a digital 
standard.
    Public Radio's Digital Future.--Digital radio transmission 
technology promises to deliver compact-disc-quality sound free of 
interference to listeners. Digital production and transmission 
conversion will enable public radio stations to produce and deliver 
programming using a far more efficient process than exists today. It 
may allow listeners and users to experience a variety of new services 
such as the ability to search program formats, scan selective programs 
as well as read music lyrics and song titles.
    The FCC has initiated a rulemaking to permit public comment on the 
various digital radio standards being proposed. The frontrunner 
standard in the U.S. is In-Band, On-Channel (IBOC). This conversion is 
expected to take place in the near future.
    Public radio stations are already converting their production 
facilities to digital because analog equipment and parts are being 
phased out in the radio industry. Digitizing stations increases 
operational efficiency and decreases operating costs. For instance, 
WKYU-FM in Bowling Green, Kentucky has four personal computer-based 
digital workstations, digital editors and DAT machines. The digital 
workstations allow for a more efficient and money-saving process to 
edit programming.
    Also, PTFP funding for digital production equipment mean that 
stations will not have to rely as heavily on real-time evening, weekend 
and overnight staff. Stations can eliminate the need to purchase and 
store audio-tape. In sum, these efficiencies are realized through PTFP.
    PTFP Will Ameliorate Impact Of DTV Transition On Public Radio.--
Public radio stations face significant challenges and opportunities 
afforded by the digital revolution. A federal mandate directing 
television stations to convert to digital will affect public radio 
stations as well.
    Nearly 40 percent of NPR member stations lease space on television-
owned towers. As television stations convert to digital, they are 
adding new digital transmitting antennas to their existing towers that 
enable them to launch digital broadcasts. Meanwhile, television is also 
required to maintain their existing transmission equipment on towers so 
as to continue an analog service. In many cases, the additional 
television equipment will force public radio stations off shared 
towers.
    DTV-related costs to radio are estimated to exceed $11 million. In 
large part, the actual costs will depend on the actions of other 
commercial and public television and radio stations. Nevertheless, PTFP 
grants act as critical catalysts, helping stations raise the matching 
funds from their communities to pay for new towers and other capital 
needs.
    Public Television Must Meet A Year 2003 Digital Deadline.--Public 
television is currently making the transition to digital television 
(DTV). It is a daunting challenge to meet the congressionally mandated 
conversion to DTV by 2003. The stakes are high for public television: 
any station that does not make the conversion deadline will be forced 
to surrender its license--essentially to go off the air. PTFP will 
assist television in its digital conversion.

                               CONCLUSION

    A $110 million PTFP appropriation is critical to public 
broadcasting and its listeners. Public radio needs Subcommittee 
Members' support for PTFP to address the myriad analog and digital 
needs of both public radio and television. Again, your support will 
ensure that PTFP is adequately prepared to meet present and future 
challenges.
                                 ______
                                 
             Prepared Statement of the University of Miami

    Mr. Chairman, I thank you and the Members of the Subcommittee for 
this opportunity to submit a statement for the Record on behalf of my 
colleagues at the University of Miami and its Rosenstiel School of 
Marine and Atmospheric Science.
    Founded in 1925, the University of Miami is the largest private 
research university in the Southeastern United States and the youngest 
of 23 private research universities in the nation that operate both law 
and medical schools. Through its 14 colleges and schools, 1,915 faculty 
instruct 13,715 students in more than 110 areas of undergraduate study 
and 162 disciplines for graduate study.
    The Rosenstiel School is recognized as one of the premier academic 
oceanographic research facilities in the world and ranked among the top 
six nationally (by number of faculty, funded research volume, and 
graduate program size). Located on a 16-acre tract on Virginia Key in 
Miami's Biscayne Bay, the Rosenstiel School provides the only 
subtropical marine research facility in the continental United States, 
and is adjacent to and coordinates daily with the national NOAA lab and 
research facility.
    The Rosenstiel School because of its unique location--the Gulf 
Stream is immediately offshore; just to the south lies a vast expanse 
of the only living coral reef off the shores of the continental United 
States; and just to the east the Florida-Bahamas Carbonate Platform--is 
a unique resource for the nation, as well as for Florida and the 
southeast region.
    There are close to 100 recognized scientists, researchers, and 
educators at the Rosenstiel School who collaborate closely with other 
Florida institutions and whose distinct expertise is vital in 
addressing critical national, regional, and Florida natural, 
environmental, and climatic challenges.
    First, Mr. Chairman, I salute you and the Committee for your 
continuing leadership and commitment to programs especially helpful to 
Florida. Everyone in Florida applauds your continuing interest and 
support for the South Florida ecosystem project, for NOAA's investment 
in ocean observation and coastal zone monitoring, and for NOAA's 
improved forecast capability for severe storm and hurricane landfall. 
Respectively, these projects seem to be leading to a new understanding 
of the Everglades-Florida Bay relationship and health, improving the 
health and safety of Florida's coastal communities, and improving 
NOAA's general forecasting capability.
    Also, Mr. Chairman, your and the Committee's interest in projects 
seeking to improve our understanding of coral reef habitats as well as 
the health of coral reef communities is having a dramatic impact on 
South Florida's tropical reef system and is especially noteworthy.
    The Rosenstiel School of Marine and Atmospheric Science has long 
been recognized as a major national research institute focusing on the 
living coral reef as a unique and critical national and international 
resource, critical to the vitality and health of the marine life and 
coastal marine environment of Florida and the southeast. Florida's 
coral reefs are the only living coral reefs off the continental United 
States. The environmental, climatic, and man-made challenges to and 
stress on these precious resources are extensive. To preserve and 
protect our reefs requires the organization and coordination of the 
broadest range of talent and resources.
    The Rosenstiel School has committed to a major investment of its 
resources and seeks to enlist a broad range of Florida, regional, and 
national expertise to coordinate the most advanced and productive 
research that will ensure the protection of living coral reefs. The 
Rosenstiel School is seeking to continue and expand its National Center 
for Atlantic and Caribbean Coral Reef Research begun in fiscal year 
1999, a parallel to the Hawaii-based and focused effort. Together, 
these centers will provide a balanced, focused, critical scientific 
mass brought to bear on these precious, unique, and vanishing natural 
resources.
    Coral reefs are the only ecosystems on Earth constructed entirely 
by the secretions of a complex assembly of marine animals and plants. 
They are economically important resources for humans as sources of 
food, medicinals, building materials, and coastal protection. They are 
especially invaluable, in our increasingly crowded world, for the 
spiritual relief they provide the millions of people that journey to 
visit them each year. Unfortunately, changes in water quality due to 
coastal development, environmental changes potentially related to 
global climate change, and over-exploitation of coral reef fisheries 
resources, are contributing to world-wide coral reef deterioration at 
an alarming pace, especially in the Caribbean region. U.S. coral reefs 
in Florida are down-stream of the entire Caribbean coral reef system, 
and are thus dependent on Caribbean reefs for larval recruits and 
maintenance of fisheries stocks. Florida reefs could also be affected 
by pollutants released into marine waters by other nations in the 
region, and from our own rivers via discharges into the Gulf of Mexico.
    The National Center seeks to coordinate U.S. coral reef policy and 
research, and assemble major national and international initiatives 
pertaining to coral reefs. The Center fosters organization and 
collaboration within the U.S. scientific community, leads the 
development of a new level of understanding of the processes and 
environmental conditions necessary for the establishment, survival, and 
sustainable use of coral reef ecosystems for the public. The initial 
focus is on problems faced by coral reefs in Florida and U.S. 
possessions in the Caribbean region (Puerto Rico and the U.S. Virgin 
Islands), and also to coordinate these efforts with those of coral reef 
researchers within the Caribbean region, in recognition of the 
importance of larger scale relationships between coral reef systems 
within the Inter-America Seas.
    This Center invites nation-wide participation of scientists with 
expertise in coral reef research, and involves scientists from related 
disciplines. In addition, scientists from Federal and State agencies 
with coral reef research interests, such as the NOAA Florida Keys 
National Marine Sanctuary, EPA, and USGS are anticipated to 
participate. The specific functions of the National Center for Atlantic 
and Caribbean Coral Reef Research are:
  --To identify major gaps in our knowledge of coral reef function that 
        impair our ability to conserve and manage coral reefs, and to 
        provide leadership in organizing the scientific community to 
        develop research initiatives to close these gaps;
  --To work with agency and legislative representatives, as well as 
        private sources, to develop the funding basis needed to execute 
        the research initiatives;
  --To interact with managers at the local to national levels, in order 
        to facilitate the transfer of information from the scientific 
        to the managerial communities;
  --To provide accurate, but non-technical, syntheses of information to 
        the public so that they can be better informed about important 
        management issues about coral reefs.
    We seek to continue the effort to establish a targeted and broadly 
constructed southeastern regional focus that can parallel and 
complement the well-funded and structured approach the Congress has 
established in the state of Hawaii. The long-term implementation 
strategy would involve all of the core Florida institutions and 
agencies already working, along with the Rosenstiel School, on one or 
more components of the overall reef challenge.
    For fiscal year 2001, we seek $3.5 million through NOAA for the 
National Center for Atlantic and Caribbean Coral Reef Research housed 
at the University of Miami Rosenstiel School of Marine and Atmospheric 
Science. Joined by colleagues at Nova University in Fort Lauderdale on 
the Atlantic coast, and at the University of South Florida in Tampa on 
the Gulf coast, this public-private enterprise will bring together in 
an unprecedented way multi-disciplinary research from across Florida to 
study this important aspect of our state and region. The effort 
represents an investment for the future health and well being of the 
economically and esthetically beautiful tropical reef system.
    Mr. Chairman, we understand fully what a difficult year this will 
be for you and the Committee. However, we hope that you can and will 
accede to our request to support the National Center for Atlantic and 
Caribbean Coral Reef Research. The results of the Center's work will 
make important contributions to the national effort to save our 
endangered coral reef communities.
    Thank you.
                                 ______
                                 
              Prepared Statement of The Nature Conservancy

    Mr. Chairman, I appreciate the opportunity to submit testimony on 
the fiscal year 2001 budget for the National Oceanic and Atmospheric 
Administration (NOAA).
    The Nature Conservancy is an international, non-profit organization 
dedicated to conserving biological diversity. Our mission is to 
preserve the plants, animals, and natural communities that represent 
the diversity of life on Earth by protecting the lands and waters they 
need to survive. We have more than a million individual members, more 
than 1,500 corporate members, and programs in every state and in 20 
nations. We have protected more than 11 million acres within the United 
States and Canada, and have helped local partner organizations preserve 
millions more overseas. Additionally, we own the largest private system 
of nature preserves in the world.
    Since 1950, The Nature Conservancy has maintained a strong focus on 
land-based habitats. However, in the past decade, we have recognized 
the gap created in our mission by not focusing on critically important 
and productive marine habitats, particularly shallow-water habitats 
such as estuaries, coral reefs, mangroves, and seagrass beds that are 
heavily affected by human activities. We are aware that coastal areas 
and oceans contain biodiversity rivaling tropical rain forests. Yet as 
a nation we have focused little attention on their conservation.
    As a result, The Nature Conservancy is escalating its focus on 
near-shore marine sites using the sound science, strong public and 
private partnerships, ecosystem approach, and site-based conservation 
that has proven effective throughout our fifty-year history of working 
on the land. We are cooperating with public and private partners to 
develop a ``conservation blueprint'' that will identify the terrestrial 
and marine sites, at several scales, that if conserved will protect the 
nation's full array of plants, animals, and natural communities for the 
long-term.
    Several NOAA programs have proven especially successful at 
combining effective management, good science, and community involvement 
to achieve tangible and lasting conservation results. These programs 
will also facilitate the process of conserving many sites identified by 
the Conservancy's conservation blueprint. These programs include: 
National Estuarine Research Reserve System, National Marine 
Sanctuaries, Habitat Restoration, Coral Reef Conservation, and Salmon 
Recovery.

National Estuarine Research Reserve System
    National Estuarine Research Reserves exist in Alabama, Alaska, 
California, Delaware, Florida, Georgia, Maine, Massachusetts, Maryland, 
Mississippi, New Hampshire, New York, New Jersey, North Carolina, Ohio, 
Oregon, Rhode Island, South Carolina, Texas, Virginia, Washington, and 
Puerto Rico. These twenty-five ``living laboratories'' have achieved 
success on a modest budget. However, National Estuarine Research 
Reserve System (NERRS) funding levels have not kept up with needs 
created by additional sites, acres, and responsibilities.
    Appropriate funding for the NERRS ($12 million for operation; $8 
million for procurement, acquisition, and construction) will ensure 
that the system continues to receive national-level coordination and 
vision. It will also permit reserves to implement baseline management, 
research, education, and stewardship activities within surrounding 
communities; acquire land and conservation easements to buffer impacts 
of development; and expand the number of sites in the future. Finally, 
the funding will enable each reserve to update ecological profiles, 
establish graduate fellowships, and provide technical training to 
coastal decision-makers.
    As manager of more than 1,300 preserves across the nation, we 
appreciate and support the request to increase NERRS funding to 
strengthen management, improve research, and increase community 
involvement. Estuaries serve as ``nature's water treatment system,'' 
providing flood control, storm damage protection, recreation, and 
habitat for species to spawn, nurse and live. The Conservancy is 
actively working in several reserves from Great Bay in New Hampshire to 
Apalachicola Bay in Florida and Kachemak Bay in Alaska. We know first 
hand that the NERRS has successfully implemented science programs to 
inform communities about how coastal ecosystems function, how humans 
affect them, and methods for improving their condition.

National Marine Sanctuaries
    The Nature Conservancy supports NOAA's request for $35 million to 
fund the National Marine Sanctuary Program. The $10 million increase in 
funding would build upon baseline operational improvements made at 
sanctuaries over the past several years--and would guarantee continuity 
and enhancement of the program's successful educational, community 
outreach, research and monitoring, cultural resource management, and 
resource damage response efforts. Additional funding would also expand 
enforcement and technical capacity. Management plans could be updated 
and science programs would be improved at existing sanctuaries, and 
``new frontiers'' in the deep ocean would be explored. Finally, part of 
the increase would fund a nationwide study to better understand the 
socioeconomic importance of marine sanctuaries.
    National Marine Sanctuaries embody some of the world's most diverse 
and extraordinary ecosystems. The twelve sanctuaries established since 
1972 protect 18,000 square miles of ocean waters. They aid in the 
recovery of endangered marine animals; increase knowledge of the ocean 
through research; and enlarge a stewardship ethic among citizens. Where 
appropriate, uses such as recreation, commercial fishing, and shipping 
are also often encouraged.
    The Conservancy's most extensive experience with this program has 
been with the Florida Keys National Marine Sanctuary, established to 
stem threats to the ecological health of the coral reef ecosystem. In 
cooperation with the state of Florida and an Advisory Council 
(representatives from commercial and recreational fishing; the dive and 
boating industries; public interest organizations; scientific and 
educational organizations; and the public) the Sanctuary developed and 
is implementing a comprehensive management plan. The plan focuses on 
solutions for problems related to stormwater runoff, inadequate sewage 
treatment, marinas, live-aboards, landfills, hazardous spills, and 
pesticides. In just two years, it is showing promising results.

Habitat Restoration
    Coastal ecosystems are powerful drivers of the United States 
economy, with more than 180 million people visiting the coasts 
annually. Tourism, recreation, fishing, and other industries require 
healthy coastal habitats and clean waters. Yet harmful algal blooms, 
polluted beaches and waters, contaminated shellfish beds, and diseased 
coral reefs are signs that human activities are degrading valuable 
coastal resources.
    The Nature Conservancy strongly supports NOAA's coastal habitat 
restoration and conservation efforts. $4 million for Fishery Habitat 
Restoration would ensure continued work with communities, in 
partnership with public and private organizations, to restore vital 
coastal habitats including wetlands, salt marshes, seagrass beds, 
mangroves, anadromous fish spawning areas, and coastal rivers. Much of 
the $2 million increase in funding would strengthen NOAA's Community-
Based Restoration Program that together with national partners, has 
reached out and funded local habitat restoration projects that are 
developed, implemented, monitored, and maintained by communities. This 
program not only has leveraged funds through national-level 
partnerships, but has also leveraged a conservation ethic across the 
nation.
    Additionally, $11.8 million for Habitat Conservation would ensure 
the NOAA Restoration Center's continued effectiveness at restoring 
estuaries, anadromous fish habitat, and other natural resources injured 
by human activity and hazardous materials. The Center has also advanced 
the science and technology of coastal habitat restoration and 
transferred it to the public and private sectors. The additional 
funding of $1.9 million would enable the Center to implement more 
restoration; increase and improve technical assistance to stakeholders; 
develop duplicable ``best practices''; improve monitoring; and meet a 
growing demand for habitat restoration nationwide.

Coral Reef Conservation
    Coral reef ecosystem health has declined severely all over the 
world in recent decades. The combined effects of global climate changes 
and human activities have put coral reefs at great risk. Now is a 
critical time for taking action to protect the world's coral reefs 
before the tragedy becomes irreversible. As a result, the Conservancy's 
programs in the Florida Keys, the United States Virgin Islands, and 
other Caribbean Basin and Pacific Islands have been working actively 
with governmental and non-governmental partners to protect these 
fragile systems.
    The Nature Conservancy supports the critical and time sensitive 
activities that a $10 million increase in funding for coral reefs would 
enable. These activities are also supported by the United States Coral 
Reef Task Force (22 federal agencies, Governors of 7 states, 
territories, or commonwealths with coral reef responsibility, and many 
non-governmental organizations) and include comprehensive mapping and 
monitoring of coral reefs; research into ecological processes upon 
which reefs depend; expansion and strengthening of federal, state, and 
territorial coral reef Marine Protected areas and no-take ecological 
reserves; regulation of coral reef species trade; enhanced 
international activities; integration of human activities; and public 
education.
    The Nature Conservancy strongly supports implementation of the 
National Action Plan for Coral Reef Conservation. If funded adequately, 
this comprehensive scientifically-based program will protect and 
restore coral reefs in the United States and its territories. It will 
also serve as a model in coral reef protection as well as in 
intergovernmental coordination, and will set an example for promoting 
similar initiatives in the rest of the world.

Salmon Recovery
    Because salmon travel from the sea to a stream's headwaters--
passing cities, developments, farms, and forests before they spawn and 
die--focusing on what they need to survive forces us to take on a 
landscape approach that benefits many other species dependent upon 
cool, clear water. This approach also helps forests and free-flowing 
rivers that prevent flooding, clean the air and water, stop erosion, 
and provide places to hike, fish, and experience nature.
    Habitat destruction, over-appropriation of water rights, pollution, 
stream blockages from hydropower and other developments, and over-
harvesting have all played a role in the precipitous decline of many 
salmon species from historic levels. Adequate funding to conserve and 
recover salmon ($55.4 million for Endangered Species Act Recovery 
Planning; $100 million for the Pacific Coastal Salmon Recovery Program; 
$60 million for the Pacific Salmon Agreement) would further critical 
scientific research and monitoring, spur new partnerships and 
cooperative efforts, enable more recovery plans, and enforce 
protections under the Endangered Species Act. It would also create 
significant opportunities for the states, local and tribal authorities, 
and private landowners to accelerate protection efforts.
    Finally, history has demonstrated that vast amounts of money can be 
spent on restoration and recovery of habitat that could have been 
protected at significantly less cost to the taxpayer, and with better 
environmental results, before the systems were altered and degraded. It 
is time to make tough choices about where fish can be successfully 
recovered, but it is even more important to focus on functioning 
systems with healthy habitats and salmon populations. These decisions 
should be based on the existing watershed analyses and plans, and 
connected to the priorities emerging from NOAA's essential fish habitat 
work.

Conclusion
    Thank you for the opportunity to submit these remarks. Conservation 
of coastal waters is challenging. Many marine habitats cannot be 
purchased and set aside for conservation. Instead, we must conserve, 
restore, and acquire critical coastal areas; research stresses to 
systems; improve water quality; maintain freshwater inflows; and 
sustainably manage marine resources and habitat. The Nature Conservancy 
looks forward to working with NOAA, other federal agencies, state and 
local governments, non-governmental organizations, and the private 
sector to ensure the long-term protection and sustainable use of our 
productive and diverse coastal waters.
                                 ______
                                 
 Prepared Statement of the California Industry and Government Central 
                California Ozone Study (CCOS) Coalition

    Mr. Chairman and Members of the Subcommittee: On behalf of the 
California Industry and Government Central California Ozone Study 
(CCOS) Coalition, we are pleased to submit this statement for the 
record in support of our fiscal year 2001 funding request of $250,000 
from the National Oceanic and Atmospheric Administration (NOAA) for 
CCOS as part of a Federal match for the $8.6 million already 
contributed by California State and local agencies and the private 
sector. NOAA is currently under contract for approximately $700,000 to 
use state-of-science instrumentation to measure surface and aloft winds 
and temperatures. This request will partially replace funding already 
spent for NOAA's participation in CCOS.
    Ozone and particulate matter standards in most of central 
California are frequently exceeded. In 2003, the U.S. Environmental 
Protection Agency (U.S. EPA) will require that California submit SIPs 
to for the recently promulgated, national, 8-hour ozone standard. It is 
expected that such SIPs will be required for the San Francisco Bay 
Area, the Sacramento Valley, the San Joaquin Valley, and the Mountain 
Counties Air Basins. Photochemical air quality modeling will be 
necessary to prepare SIPs that are acceptable to the U.S. EPA.
    Central California Ozone Study (CCOS) is designed to enable central 
California to meet Clean Air Act requirements for ozone State 
Implementation Plans (SIPs) as well as advance fundamental science for 
use nationwide. The CCOS field measurement program will be conducted in 
the summer of 2000 in conjunction with the California Regional PM10/
PM2.5 Air Quality Study (CRPAQS), a major study of the origin, nature, 
and extent of excessive levels of fine particles in central California. 
CCOS includes an ozone field study, a deposition study, data analysis, 
modeling performance evaluations, and a retrospective look at previous 
SIP modeling. The CCOS study area extends over central and most of 
northern California. The goal of the CCOS is to better understand the 
nature of the ozone problem across the region, providing a strong 
scientific foundation for preparing the next round of State and Federal 
attainment plans. The study includes six main components:
  --Developing the design of the field study (task already underway)
  --Conducting an intensive field monitoring study, scheduled for June 
        1 to September 30, 2000
  --Developing an emission inventory to support modeling
  --Developing and evaluating a photochemical model for the region
  --Designing and conducting a deposition field study
  --Evaluating emission control strategies for the next ozone 
        attainment plans.
    CCOS is directed by Policy and Technical Committees consisting of 
representatives from Federal, State and local governments, as well as 
private industry. These committees, which managed the San Joaquin 
Valley Ozone Study and are currently managing the California Regional 
Particulate Air Quality Study, are landmark examples of collaborative 
environmental management. The proven methods and established teamwork 
provide a solid foundation for CCOS. The sponsors of CCOS, representing 
state, local government and industry, have contributed approximately 
$8.6 million for the field study. In addition, CCOS sponsors will 
provide $4 million of in-kind support. The Policy Committee is 
continuing to seek additional funding ($9.0 million) for a future 
deposition study, data analysis, and modeling. California is an ideal 
natural laboratory for studies that address these issues, given the 
scale and diversity of the various ground surfaces in the region 
(crops, woodlands, forests, urban and suburban areas).
    There is a national need to address national data gaps and 
California should not bear the entire cost of the addressing these 
gaps. National data gaps include issues relating to the integration of 
particulate matter and ozone control strategies. The CCOS field study 
will take place concurrently with the California Regional Particulate 
Matter Study--previously jointly funded through Federal, State, local 
and private sector funds. Thus, CCOS is timed to enable leveraging of 
the efforts for the particulate matter study. Some equipment and 
personnel can serve dual functions so that CCOS is very cost-effective. 
From a technical standpoint, carrying out both studies concurrently is 
a unique opportunity to address the integration of particulate matter 
and ozone control efforts. CCOS will also be cost-effective since it 
builds on other successful efforts including the 1990 San Joaquin 
Valley Ozone Study. To effectively address these issues requires 
federal assistance, and CCOS provides a mechanism by which California 
pays half the cost of work that the federal government should pursue.
    For fiscal year 2001, our Coalition is seeking funding of $250,000 
from the National Oceanic and Atmospheric Administration (NOAA). 
Extensive meteorological data collected as part of the field study can 
be used by NOAA to improve its meteorological forecasting abilities. 
CCOS will provide a new database to evaluate the U.S. western boundary 
conditions of weather forecasting models. Meteorological data will be 
collected in both an ozone field study and an atmospheric deposition 
study. In addition, CCOS includes atmospheric airflow research. Data 
will be collected on sea breeze circulation, nocturnal jets and eddies, 
airflow bifurcation, convergence and divergence zones, up-slope and 
down-slope flow, and up-valley and down-valley air flows. This research 
will provide fundamental data needed to understand air flows over 
complex terrain and has national applicability.
    Thank you very much for your consideration of our request.
                                 ______
                                 
    Prepared Statement of the Northwest Indian Fisheries Commission

    Mr. Chairman, and Honorable Senators of the Committee, I am Billy 
Frank, Jr., Chairman of the Northwest Indian Fisheries Commission 
(NWIFC) and on behalf of our member tribes I would like to thank you 
for the opportunity to offer written testimony concerning the 
Department of Commerce fiscal year 2001 appropriations that pertain to 
Pacific Salmon Recovery funding needs.

           SUMMARY OF FISCAL YEAR 2001 APPROPRIATIONS REQUEST

    In general, the Northwest Indian Fisheries Commission supports the 
Administration's appropriation request presently before the 
Subcommittee. We also support additional clarification language by the 
Committee pertaining to several issues. Specifically, we support the 
following:
  --$100 Million for the Pacific Coastal Salmon Recovery Program in the 
        Lands Legacy Initiative, with a set-aside of 10 percent ($10 
        million) to affected tribes for their management 
        responsibilities. A specific allocation of the set aside for 
        the Northwest Indian Fisheries Commission of $8 million is 
        requested.
  -- $60 Million for the Pacific Salmon Agreement consistent with the 
        recently signed treaty annexes.
  --$3 Million for a Displaced Tribal Fishers Program.
  --Support Additional ESA Program Funding to National Marine Fisheries 
        Service (NMFS) and Earmark $530,000 for National Marine 
        Fisheries Service and Tribal/NMFS ESA Task force.

                              INTRODUCTION

    Twenty-six years ago, the U.S. v. Washington case was decided by 
the federal court system. This decision, respecting the treaty rights 
of our member tribes, propelled major changes in fisheries management 
in the Pacific Northwest. These changes have not only fundamentally 
altered the legal, political, social and economic institutions of the 
State of Washington, but have also fostered a nationwide quest for 
tribal self-determination and self-governance led in part by the 
Northwest tribal leadership. These parameters affect both the way 
tribes perform fisheries management, as well as how we approach the 
federal system during the budget appropriations and legislative 
processes.

             TRIBAL PROGRAMS ARE ORGANIZED BUT UNDERFUNDED

    We have made great strides in institutionalizing tribal management 
consistent with tribal values, treaty rights and federal court 
decisions. We have developed great professional capabilities and policy 
respect as we proceed through the various processes. We are efficient 
and effective, but we have significant unmet needs. While we have 
efficiently organized our tasks and have assigned responsibilities 
between the tribal community to extend our collective efforts, the 
management obligations are many. New and highly difficult complexities 
abound, many have been precipitated by the demands of the Endangered 
Species Act.

   RECENT ENDANGERED SPECIES ACT SALMON LISTINGS HAVE SIGNIFICANTLY 
         AFFECTED TRIBES AND NORTHWEST MARINE FISHERIES SERVICE

    In late February, 1999, a number of species of Pacific Salmon were 
``listed'' by the National Marine Fisheries Service as ``threatened'' 
under the terms of the Endangered Species Act (ESA). This ESA listing 
process has triggered a cascading chain of events, which have or will 
result in significant changes to harvest, hatchery, and habitat 
practices for the region and its inhabitants.
    Tribes will be affected by this federal process. As fishers, the 
listing raises serious questions about the status of the stocks and 
poses a threat to the opportunity for these individuals to continue to 
harvest this salmon, a treaty secured resource. As governments, the ESA 
process now places inordinate demands upon the tribes as co-managers of 
the resource. Biological Reviews, Listing Decisions, Conferencing, 
Assessments, Opinions, Consultation, and Recovery Planning are just a 
few of the series of loops tribes will now be forced to participate in 
just to ensure their treaty protected fisheries. The tribes harvest 
opportunities and management certainty have been placed into severe 
jeopardy by these actions. Continued and expanded tribal funding to 
fulfill these federal mandates is essential.
    Additional funding is also needed for the National Marine Fisheries 
Service so that they can actively participate in the many ESA functions 
that exist in the Pacific Northwest. NMFS is the key Federal agency 
charged with implementing the Act and requires additional funding to 
properly discharge their trust responsibilities to the tribes. We would 
like the Subcommittee to earmark $530,000 for a Tribal/NMFS ESA Task 
Force that brings tribal and NMFS technical and policy representatives 
together to implement the Act and trust responsibilities.
    It is partly for these reasons that the tribes have worked very 
hard over the years to bring about positive and effective change in 
resource management. Unfortunately, events have overtaken tribal 
efforts, and new obligations are upon us.

 $100 MILLION FOR THE PACIFIC COASTAL SALMON RECOVERY WITHIN THE LANDS 
    LEGACY PROGRAM WITH A 10 PERCENT ($10 MILLION) TRIBAL SET ASIDE

    Tribes were greatly appreciative of the Committee's efforts to 
include Pacific Coastal Salmon Recovery funding in last year's 
appropriation. We have long advocated for such a concerted partnership 
approach between federal, state, local and tribal governments to save 
the Pacific Salmon.
    This year we are happy to support the Administration's funding 
request of $100 million to continue this effort through the Lands 
Legacy Initiative.
    For many years, the tribes have sounded alarms about the declining 
status of the salmon resource caused in part by past state and federal 
policies. Tribes have actively participated in the implementation of 
the Northwest Forest Plan. Tribes have also worked diligently with the 
federal and state governments in implementing the Pacific Salmon Treaty 
and other conservation efforts. In local processes, tribes have begun 
to link their work with county and city governments to develop 
watershed recovery strategies. Connections between tribes and private 
interests, including the timber industry, environmental community, and 
volunteer organizations are in place, and expanding regularly. But for 
all of these efforts, tribes are in need of additional financial 
resources. Tribes need a consistent source of funding that allows them 
to actively work salmon restoration efforts. That is why a continued 
set aside for the tribes is essential. We support a 10 percent, or $10 
million, set aside for the Pacific Coastal tribes for salmon 
restoration work. We also seek a specific allocation of $8 million from 
this amount for the Northwest Indian Fisheries Commission for the work 
described below.
    As noted earlier, treaty tribes in western Washington have court-
affirmed fisheries co-management authority and responsibility for 
salmon. This co-management relationship is well defined and 
institutionalized and has been recognized in harvest and hatchery 
management activities for many years. These same courts have recognized 
that without healthy habitat for salmon, the treaty right would not be 
fulfilled. This collection of rights places the tribes in a principal 
management role with the State of Washington to ensure that the salmon 
resource is managed wisely for the benefit of all.
    This obligation for sound resource management weighs heavily on the 
tribes as more than three-quarters of the state is affected by several 
Endangered Species Act (ESA) listings, with many of the remaining areas 
experiencing declining levels of many salmon species. Salmon recovery 
will affect every resident of the state.
    For tribes to take on these additional efforts and 
responsibilities, it is essential that we have adequate funding to fill 
new technical and policy positions. What follows is a general summary 
of tribal needs. Because the salmon recovery efforts vary greatly 
between watersheds, tribal needs also vary from one another. However, 
additional tribal funding needs for capacity enhancement and technical 
analysis can generally fit into the following categories. These 
include:
  --Infrastructure and Capacity for Policy and Planning
  --Technical Assistance, Regional Coordination, and Integration.

   TRIBAL INVOLVEMENT IN SALMON RECOVERY IS ESSENTIAL, BUT REQUIRES 
                     INCREASED MANAGEMENT CAPACITY

    Each tribe has an existing fisheries management program, and will 
utilize its program as a base for salmon recovery efforts. Fiscal year 
2000 budget funding has increased each tribe's ability to engage in 
salmon restoration activities and programs. This increased capacity has 
enabled the tribes to dedicate necessary staff and policy attention to 
work through various reviews, listings, consultations, rule 
developments, and conservation planning processes that have already 
begun as the National Marine Fisheries Service moves forward with legal 
requirements under the Endangered Species Act. Moreover, this 
infrastructure has also provided the tribes with additional 
capabilities to work through the various salmon restoration projects 
and activities that are under way within the region, which are detailed 
more fully in the ``Regional Integration and Technical Assistance'' 
section that follows.

    TRIBES WILL BRING TOGETHER REGIONAL INTERESTS THROUGH TECHNICAL 
    ASSISTANCE, COORDINATION, AND INTEGRATION THAT SUPPORTS SALMON 
                              RESTORATION

    A coordinated tribal effort is necessary on a variety of 
``statewide'' and ``regional'' issues facing the tribes and the State 
of Washington. Using the expanded capacity described above, tribes and 
their policy and technical staff will dedicate time and effort toward 
developing salmon conservation and recovery planning processes that are 
essential to salmon restoration.
    Tribes, along with the State of Washington, will develop 
comprehensive species management plans for coastal river systems, Puget 
Sound chinook, Hood Canal summer chum, and Lake Ozette sockeye salmon. 
They will also work on conservation concerns for coho salmon, which in 
some areas are listed by NMFS as a ``candidate'' species for potential 
listing in the future.
    Tribes will develop new hatchery genetic guidelines, stock 
productivity models, fishery guidelines and standards for local salmon 
recovery. Tribes will update the Salmon and Steelhead Stock Inventory 
(SASSI) and will complete the Salmon and Steelhead Habitat Inventory 
and Assessment Project (SSHIAP). These two data systems integrate stock 
status and habitat information, essential knowledge for effective 
salmon restoration and protection activities. SSHIAP is also an 
essential component for long-term habitat monitoring programs, 
including that of the recently enhanced forest practices program.
    To make these activities complete, however, requires coordination 
and integration of the tasks at a number of levels. In some cases, 
special studies and assessments must be done. In other cases, regional 
and/or case-area-wide coordination must occur to ensure project 
completion.
    This broad array of activities will allow the maximum flexibility 
for locally driven processes to determine which activities are most 
important for each watershed. This is essential as the current status 
of habitat inventories, wild stock assessments and hatchery impacts in 
each watershed are highly variable.
    The following is a partial list of salmon restoration projects and 
activities that may be conducted:
  --Watershed assessments, including habitat conditions, in-stream flow 
        studies, water quality and quantity analysis pertaining to 
        salmon productivity;
  --Develop/design projects to address limiting factors;
  --Compliance monitoring for regulatory components of salmon recovery;
  --Habitat monitoring;
  --Stock monitoring; and,
  --Adaptive management monitoring, research, assessment and 
        application.
    It must be recognized that tribes also anticipate accessing various 
funds that are available to state governments for active watershed 
restoration and protection projects. These funds would come from monies 
provided by the subcommittee to state governments. In many cases, 
tribes will be in the best position to protect and preserve habitat 
through the purchase of riparian habitat. In other cases, tribes will 
have the best expertise and infrastructure in place to effectively 
complete restoration projects.

           PACIFIC SALMON AGREEMENT REQUIRES FURTHER FUNDING

    Many new demands have been placed on the United States and Canada 
as a result of the new 1999 Pacific Salmon Agreement. The 
Administration has proposed a funding package of $60 million for fiscal 
year 2001 for two endowment funds and to support a License Buyback 
Program. The two endowment funds, partially funded in fiscal year 2000, 
will be administered by the Pacific Salmon Commission for habitat, 
stock enhancement, science and salmon management initiatives in both 
countries. The License Buyback Program will be used by the State of 
Washington to reduce fishing licenses and gear targeting sockeye 
salmon.
    These funds are essential in order to implement the Agreement. 
Clearly, there have been very significant harvest reductions taken by 
the tribes as a result of this new Agreement. Unfortunately, harvest 
reductions alone will not bring back the salmon. These new funds will 
provide resources to the two countries to target a multitude of 
recovery efforts that are complimentary to the harvest reductions.

TRIBAL FISHERS BEAR A HUGE BURDEN, AND FUNDS SHOULD BE FOUND TO SUPPORT 
                   THEM WHILE SALMON RECOVERY OCCURS

    Tribes are very concerned about our displaced fishers. Unemployment 
rates on some reservations, which depend heavily on salmon fisheries 
now seriously curtailed due to low stock abundance, are as high as 80 
percent. We would like the Committee to consider an extension of the 
successful federal ``Jobs In the Woods'' Initiative of the Northwest 
Forest Plan which utilized unemployed loggers. This program could be 
expanded for specific inclusion of tribal fishers. New funds for 
``fishers support'' should also be found to ensure that tribal fishers 
could continue to make boat payments and leases during these low 
abundance periods. These funds could be earmarked from within the 
existing Department of Commerce budget, so long as they become 
available to the Tribal Fishers. It is expected that this program would 
cost about $3.0 million per year for the next decade.

                               CONCLUSION

    We strongly urge the Committee to provide $100 million in funding 
for Pacific Salmon Recovery through the Lands Legacy Initiative. We ask 
the Committee to support the use of $10 million of these funds for use 
by the Pacific Coastal Tribes. Language directing $8 million of these 
funds to the Northwest Indian Fisheries Commission will enable us to 
actively engage in all phases of salmon recovery efforts in western 
Washington. These monies would be carefully managed to ensure results 
and accountability.
    The new Pacific Salmon Agreement requires $60 million during fiscal 
year 2001 to build up the endowment funds and to buyback gear and 
vessel licenses. A new initiative to support displaced tribal fishers 
and ameliorate their financial burden will cost $3 million.
    We thank you for your consideration of our request. We are 
available to answer any questions.
                                 ______
                                 
   Prepared Statement of the University Corporation for Atmospheric 
                                Research

    On behalf of the University Corporation for Atmospheric Research 
(UCAR) and the university community involved in weather and climate 
research and related education, training and support activities, I 
submit this written testimony for the record of the U.S. Senate 
Committee on Appropriations, Subcommittee on Commerce, Justice, State, 
The Judiciary and Related Agencies.
    This year UCAR, a university membership consortium composed of 63 
North American institutions that grant the Ph.D. in atmospheric, 
oceanic, and related sciences, celebrates its fortieth anniversary of 
scientific discovery and university partnerships. The UCAR mission is 
to support, enhance, and extend the capabilities of the university 
community, nationally and internationally; to understand the behavior 
of the atmosphere and related systems and the global environment; and 
to foster the transfer of knowledge and technology for the betterment 
of life on earth. UCAR is a non-profit, Colorado-based corporation that 
manages and operates the National Center for Atmospheric Research 
(NCAR) and the UCAR Office of Programs (UOP). It is supported by the 
National Science Foundation (NSF) and other federal agencies including 
the National Oceanic and Atmospheric Administration (NOAA), the 
National Aeronautics and Space Administration (NASA), the Department of 
Energy (DOE), the Environmental Protection Agency (EPA), the Department 
of Defense (DOD), and the Federal Aviation Administration (FAA). In 
addition to its member universities, UCAR has formal relationships with 
approximately 100 additional undergraduate and graduate schools 
including several historically black and minority-serving institutions 
and 38 international universities and laboratories.
    On behalf of this country's atmospheric sciences community, we urge 
the Committee to support the overall proposed budget of $2.90 billion 
for the National Oceanic and Atmospheric Administration (NOAA) for 
fiscal year 2001. This is an increase of $446 million over fiscal year 
2000. The activities of NOAA provide a comprehensive approach to 
understanding the atmospheric and oceanic systems of the earth and to 
implementation of programs that save American lives, money and 
property. The weather and climate data collected by NOAA satellites, 
ships, ocean buoys, aircraft, and other instrumentation provide the 
foundation on which atmospheric sciences research is based. Support of 
this agency should be maintained at the highest possible levels during 
this era of rapid scientific discovery and intense, global economic 
competition. Within NOAA, we would like to comment on the following 
specific programs:

National Weather Service (NWS)
    We urge the Committee to support the overall proposed amount of 
$710.2 million for NWS for fiscal year 2001. This is an increase of 
$53.2 million over fiscal year 2000. The work of the NWS protects life 
and property, enhances the national economy, and provides a national 
information database and infrastructure used extensively by the 
university community for research purposes. The proposed fiscal year 
2001 budget enables the NWS to continue to make available critical 
weather and climate-related data, to improve weather prediction 
accuracy and warning lead times and to work to decrease weather related 
fatalities.
            Advanced Hydrologic Prediction System (AHPS)
    Within the NWS Operations and Research budget, we urge the 
Committee to support the proposed fiscal year 2001 amount of $1.0 
million for continued national implementation of AHPS. This is a slight 
increase over fiscal year 2000. AHPS is a real time modeling and data 
analysis system that will significantly improve flood forecasting and 
water management in flood-prone areas such as the Mississippi and Ohio 
River Basins. This system will save lives and property by providing 
river stage forecasts one-to-two months in advance, a great improvement 
on the several days advance notice now available.
            Advanced Weather Interactive Processing System (AWIPS)
    Under NWS Systems Acquisition in the Operations, Research and 
Facilities (ORF) account, we urge the Committee to support the proposed 
fiscal year 2001 amount of $38.6 million for AWIPS Operations and 
Maintenance. This is a $6.6 million increase over fiscal year 2000 that 
will provide operations and maintenance for the fully deployed network 
of 152 AWIPS systems. This interactive computer system, the cornerstone 
of the recently completed NWS modernization and restructuring, 
integrates for the first time all meteorological and hydrological data, 
and all satellite and radar data. AWIPS is a critical source of data 
for the research community and enables the NWS to issue far more 
effective weather warnings and forecasts in a very efficient manner. 
Under NWS Systems Acquisition in the Procurement, Acquisition and 
Construction (PAC) account, we urge the Committee to support the 
proposed fiscal year 2001 amount of $17.3 million for AWIPS. This is a 
$1.36 million increase over fiscal year 2000 to continue development of 
AWIPS software. When integrated with NEXRAD Product Improvement 
technology, this new software will allow NWS forecasters to extend 
tornado warning lead time from an average of 11 minutes to 16 minutes 
and improve the accuracy of severe storm forecasts by over 20 percent.
            Radiosonde Replacement Network
    We urge the Committee to support the fiscal year 2001 request of $7 
million for replacement and modernization of the upper air radiosonde 
network. This represents a very slight increase over fiscal year 2000 
funding to support a network that provides critical upper air 
observations that are the principal data source for all weather 
forecasts and for much research. Funding will allow the NWS to replace 
antiquated computers, continue software development, and procure 
critical surface instruments.
            Co-Operative Observer Network
    We urge the Committee to support the requested increase of $2.3 
million in fiscal year 2001 to sustain and modernize the volunteer 
operated Cooperative Observer Network. The network's 11,000 weather 
observation sites are used to maintain the country's climate record and 
to provide data to NWS local field offices and to university 
laboratories. In a recent report, the National Research Council 
recommended taking immediate steps to modernize this ailing, critical 
network. We look forward to seeing progress on this task during the 
next five years.
            National Centers for Environmental Prediction (NCEP)
    NCEP is comprised of nine centers within the NWS, all working 
together toward the common goal of using data for weather predictions 
and seasonal forecasts in order to save lives, protect property, and 
create economic opportunity. Weather Service field offices, other 
government agencies, research universities, and private meteorological 
services rely on NCEP's products. Many of the forecasts that reach the 
public via media outlets originate at NCEP. In recent years, the 
centers have been supported inadequately. Funding comes primarily from 
the NWS ORF account under Central Forecast Guidance, with a sizable 
percentage from Atmospheric and Hydrological Research. Both of these 
lines have recommended increases for fiscal year 2001. We urge the 
Committee to support NCEP at the highest possible levels through 
support for the Central Forecast Guidance request of $38 million and 
the Atmospheric and Hydrological Research request of $3.07 million.

Office of Oceanic and Atmospheric Research (OAR)
    We urge the Committee to support the OAR PAC account request of $11 
million which is an increase of $6.0 million over fiscal year 2000. 
This increase will provide additional infrastructure to advance climate 
and weather forecast modeling, to improve access to space-based and 
ground-based data holdings, and to create a system to efficiently 
manage high volumes of global change data critical to the scientific 
community.
    However, we believe that the OAR activities supported by the ORF 
account are inadequately funded and urge the Committee to increase 
funding to $317.8 million from the current request of $307.8 million 
for the ORF account. OAR supports a world-class network of scientists 
and environmental research laboratories as well as partnerships with 
academia and the private sector in order to provide the sound science 
upon which decision makers can frame effective regulations to solve 
environmental problems. It conducts the research and technology 
development necessary to improve NOAA's weather and climate services, 
solar-terrestrial forecasts, and marine services. During the past 10 
years, the purchasing power of the OAR labs has decreased by 
approximately 50 percent as costs associated with inflation and 
technological advances have far outpaced funds allocated. The fiscal 
year 2001 request level continues this trend with only a 2.1 percent 
increase over the fiscal year 2000 Revised Enacted Amount of $301.4 
million. Erosion of the research base has occurred at a time when 
society's demand and economic need for the OAR labs' information 
services have increased dramatically in such areas as predictions of El 
Nino/La Nina events, tropical storm intensity, flooding and drought. To 
realize the full OAR potential benefit to society, additional funding 
of $10 million should be allocated in fiscal year 2001 to support OAR's 
critical mission of conducting the scientific research, environmental 
studies, and technology development needed to broaden our understanding 
of Earth's environmental systems. Some of OAR's most important research 
efforts conducted with universities include the following:
            U.S. Weather Research Program (USWRP)
    The USWRP, an interagency program authorized by Congress in 1992, 
was first mentioned in NOAA's budget in fiscal year 2000. Although the 
request of $2 million for fiscal year 2001 represents an increase of 
100 percent over fiscal year 2000, it falls far short of the $12.5 
million recommended in the Congressionally mandated implementation 
plan. The USWRP research community is poised to make significant gains 
in prediction capabilities regarding heavy precipitation and hurricane 
landfall location and intensity, the disaster relief savings of which 
would be many times the initial research cost investment, not to 
mention the value of lives saved. Last fall's hurricane season, with 
hundreds of miles of coastline needlessly evacuated and lives lost to 
poorly predicted inland flooding, demonstrates clearly the need for 
additional research as does the very costly missed forecast for this 
January's east coast snow storm. We urge the Committee to provide the 
USWRP with at least $4.5 million for fiscal year 2001. This is $2.5 
million above the requested amount of $2 million for fiscal year 2001.
    Since the USWRP is an interagency program the goals of which 
advance the NOAA mission, we would suggest that NOAA take the lead in 
collaborating with the National Science Foundation (NSF), the National 
Aeronautics and Space Administration (NASA), and the Department of 
Defense (DOD) to ensure appropriate support from these agencies.
            Climate Observations and Services Initiative
    This new line item will provide $28.0 million to meet the growing 
demand for timely data and information about climate variability, 
climate change and trends in severe weather events. Based on 
recommendations from recent National Research Council reports, this 
initiative will allow repair of deteriorating data and observational 
systems as well as support new observations and infrastructure. We urge 
the Committee to support the fiscal year 2001 recommended funding of 
$28.0 million, $24.0 million of which is within the OAR ORF account, 
for the new Climate Observations and Services Initiative.
            Climate and Global Change Program
    We urge the Committee to support the $67.1 million proposed budget 
for Climate and Global Change, a small increase over the fiscal year 
2000 budget. This program is an integral part of the interagency U.S. 
Global Change Research Program (USGCRP) and addresses an important 
aspect of global change--understanding the global climate system. The 
increase of $493,000 will be used to improve the regional specificity 
and detail of climate forecasts, essential progress to advancing our 
understanding of the Earth's climate.

National Environmental Satellite, Data and Information Service (NESDIS)
    For several years we have been concerned about the proposed level 
of funding in the NESDIS ORF budget. This ORF account is divided into 
support for the Satellite Observing Systems and the Environmental Data 
Management Systems. The Satellite Observing Systems provide services in 
designing, developing, and operating civilian satellite systems for the 
purpose of observing ocean, and atmospheric conditions and the sun. 
These are observational tools critical to improving our knowledge of 
the complex environmental systems in which we live. The rich data 
collected by these systems is then acquired, processed, analyzed, 
archived and disseminated through the Environmental Data Management 
Systems to commerce, industry, agriculture, science and engineering, 
the general public, and government at all levels. While the Satellite 
Systems function collects data, the Data Management Systems function 
makes those data useful and available. Both sides of the equation are 
of equal importance, but we feel that funding for the data management 
side is continuing to erode.
    Funding for the Environmental Data Management Systems line is 
proposed to decrease from $52.3 million in fiscal year 2000 to the 
requested $44.7 million. Within the NESDIS ORF account, we urge the 
Committee to support Satellite Observing Systems at the requested $63.4 
million (up from $52.3 million in fiscal year 2000) and we urge the 
Committee to increase Environmental Data Management Systems funding 
from the requested $44.7 million (down $7.5 million from fiscal year 
2000) to an amount that accounts for inflation and shores up 
insufficient base funding in order to allow adequate care of a very 
important national database.

Minority Serving Institutions
    We urge the Committee to support the requested $17.0 million to 
fund NOAA-wide educational training relationships through partnerships 
with a consortium of Minority Serving Institutions (MSIs). This program 
is budgeted within NOAA's Program Support ORF account. In order to have 
a productive scientific workforce now and in future years, the pool of 
qualified applicants must be as diverse as the population at large. 
Under-representation of minorities in earth science disciplines is a 
serious issue that must be addressed by multiple programs across 
multiple agencies and institutions. We believe that NOAA's Minority 
Serving Institutions initiative should be fully funded for the current 
and future benefit of the entire scientific community and the country.
    On behalf of UCAR, I want to thank the Committee for the important 
work you do for U.S. scientific research, education, and training. We 
appreciate your attention to the recommendations of our community 
concerning the fiscal year 2001 budget.
                                 ______
                                 
  Prepared Statement of the Yukon River Drainage Fisheries Association

                                ABSTRACT

    The Yukon River Drainage Fisheries Association (YRDFA) requests a 
reauthorization of a $500,000 appropriation to the YRDFA for salmon 
habitat and stock restoration projects, to conduct research on the 
marine bycatch of salmon and to assess salmon productivity in the 
marine environment. Funds would be transferred to the YRDFA through a 
National Oceanographic and Atmospheric Administration/National Marine 
Fisheries Service grant.

                    YRDFA'S CURRENT RESEARCH EFFORTS

    In the fiscal year 2000 budget Congress authorized a $500,000 
appropriation to YRDFA for ``habitat restoration, monitoring projects, 
stock assessments and bycatch research.'' YRDFA is currently developing 
the final list of projects to be carried out with this appropriation 
and finalizing grant award paperwork with the National Marine Fisheries 
Service. YRDFA's current research plans for the year 2000 are divided 
into four objectives:
  --Stock origins, migration patterns and marine productivity of Bering 
        Sea chinook salmon
  --Habitat restoration of Yukon River drainage salmon streams
  --Stock restoration through instream incubation technology
  --Chinook smolt productivity analysis and outmigration.

Stock origins, migration patterns and marine productivity of Bering Sea 
        chinook
    Analysis is focusing on scales from chinook collected by observers 
in the Bering Sea trawl fisheries from 1997-1999. The first year of the 
study would involve processing observer program samples, getting 
baseline scales from agencies, digitizing baseline scales, and 
developing and testing classification models. The second would focus on 
digitizing and analysis of observer program samples and report writing. 
Chinook data from NPAFC high seas cruises and other sources will also 
be examined.
    Anticipated primary results are: identification of trawl salmon 
bycatch into broad regional stock groupings, e.g.: western Alaska, 
central Alaska, southeast Alaska/British Columbia that will enable 
managers to adjust trawl fishing effort to avoid stocks that are having 
conservation problems. Likely secondary results are improved 
understanding of migration patterns and marine productivity (i.e., 
ocean survival rates) of Bering Sea chinook that will enable managers 
to better forecast returns of adult chinook salmon and to assess 
impacts of changing ocean conditions (temperature, food supply, etc.) 
on chinook stocks.

Habitat restoration of Yukon River drainage salmon streams
    Efforts will focus on improving access of chinook and chum salmon 
to spawning and rearing areas currently impeded due to historical 
mining activity. Methods would include realignment and regarding of 
stream channels, streambank reclamation, floodplain modification, 
construction of fish habitat structures and enhancement of fish passage 
to access spawning and rearing habitat. Likely project locations 
include Sourdough, Ruby, Faith and Hope Creeks, the Birch Creek 
watershed and the Minook Creek watershed. As part of this effort YRDFA 
will also work with local miners--many of who still have active claims 
in these areas--to educate them on the importance of protecting and 
restoring fisheries habitat.

Stock restoration through instream incubation technology
    Habitat restoration activities such as those described above as 
well as USFWS and BLM efforts to build an access channel around the FE 
dam (Davidson Ditch) on the Chatanika River will open up new areas for 
salmon. In some cases, however, salmon spawning in these areas would 
benefit from a ``jump-start'' through the use of instream egg 
incubation boxes to greatly improve winter egg-fry survival rates. 
YRDFA will also survey other road-connected streams for possible 
installation of incubation boxes to serve as demonstration projects and 
feasibility tests. Additional streams to be surveyed include the 
Nenana, Delta, Chena, Salcha and Goodpaster.

Chinook smolt productivity analysis and outmigration
    Trapping of juvenile chinook near the Chena River flood control dam 
and other streams will enable us to gain a better understanding of 
their overall health and to collect baseline data which will enable 
fishery managers to make better forecasts of salmon returns in future 
years. While the database on the number of adult spawners has been 
steadily improving since 1994, little data is available, other than 
that collected by USGS, on egg-to-fry survival rates and general health 
of smolt and juvenile salmon. In addition to the Chena River YRDFA will 
attempt to survey select index streams in different sections of the 
drainage such as the lower Yukon and the Koyukuk River.
    So as to maximize the effectiveness of research dollars YRDFA will 
be working closely with various agencies and researchers. Cooperating 
entities include the Alaska Department of Fish & Game, the U.S. Fish 
and Wildlife Service, the Bureau of Land Management, the U.S. 
Geological Service and the University of Washington, School of 
Fisheries.

                        FISCAL YEAR 2001 REQUEST

    For fiscal year 2001 the YRDFA requests a reauthorization of 
$500,000 in funding. If these funds were received YRDFA would be able 
to:
  --restore additional habitat and expand salmon restoration efforts in 
        the upper Yukon and Tanana drainages especially in the Tofty 
        mining area. Every spawning ground restored would help to 
        reclaim the biological and genetic diversity of Yukon salmon 
        stocks. As with the fiscal year 2000 appropriation YRDFA will 
        be working closely with the Bureau of Land Management and the 
        Alaska Department of Fish & Game, Habitat Division.
  --analyze chinook bycatch data from the 2000-2002 fishing seasons. 
        These data, when coupled with the 1997-1999 data currently 
        under analysis, will enable managers to structure groundfish 
        fisheries to avoid salmon stocks of concern.
  --better predict future returns of salmon through analysis of inter-
        annual growth of juvenile salmon and analysis of marine 
        productivity. YRDFA will examine ocean conditions (temperature, 
        food supply, etc) and correlate these conditions with 
        indicators of the at-sea survival rates of salmon.
    Budget estimates for this request if fully funded are as follows: 
YRDFA staff support--$120,000, Habitat and stock restoration--$100,000, 
Chinook bycatch analysis--$130,000; Marine productivity assessment--
$150,000.

                           CLOSING STATEMENT

    In summation our research funding request aims to fill information 
gaps not addressed by current agency research plans. Yukon River salmon 
are a vital resource to more than 14,000 Alaska residents in 42 
different communities. The annual wholesale value of the commercial 
salmon fishing industry approaches $10,000,000. Yukon River chinook and 
fall chum salmon also spawn in Canada and are currently the subject of 
negotiations between the two countries.
    Our research program will aid significantly in the management of 
this resource. Thank you for this opportunity to submit written 
testimony.
                                 ______
                                 
                          DEPARTMENT OF STATE

               Prepared Statement of New York University

    Thank you for allowing New York University (NYU) to submit 
testimony on behalf of the International Center for Democratic Public 
Service. NYU is requesting $5 million for the technological and 
communications facilities to link its training and resources to public 
servants in other nations.
    Through its Robert F. Wagner Graduate School for Public Service, 
NYU has established itself as the leader in training international 
public servants for democratic public service. The Wagner School, 
working with leaders of international NGOs and U.N. officials, has 
implemented a unique new program that provides focused and practical 
education and training for managers of international development, 
advocacy and relief programs. The list of countries where we already 
have had in impact include: Ukraine, Georgia, Mozambique, Slovak 
Republic, Astonia, Romania, Latvia and Lithuania. The University is now 
looking to centralize and focus its efforts in this area by 
establishing a new International Center for Democratic Public Service.
    As a first phase, the University has identified a technology/
communications hub as central to the goal of linking public servants 
throughout the globe to the faculty and resources of NYU. The goal is 
access to the full range of distance learning technologies including 
digital televideo and data transmission, satellite communications, and 
internet services, including video for faculty and students. To reach 
its goal, NYU will reach out to both private and public sources for 
funding and will draw on other sectors of the University, such as law 
and business.
    We hope you will find this project worthy of your support.
                                 ______
                                 
             Prepared Statement of the University of Miami

    Mr. Chairman and Members of the Subcommittee, I appreciate the 
opportunity to present this testimony and to seek your support in 
fiscal year 2001 for two projects at the University of Miami. First, a 
timely and new initiative, the Cuba Transition Project in the Institute 
for Cuban and Cuban-American Studies and, next, continuing support for 
a unique national resource, the Dante B. Fascell North-South Center.
The Cuba Transition Project
    The University of Miami is poised to play an important role in a 
Cuba transition because of its location, programs, material and human 
resources, language capability, and historical association with Cuba. 
The Institute for Cuban and Cuban-American Studies is the coordinating 
body for all University activities on Cuba. It manages the Cuba On Line 
database, the only database of historical and contemporary information 
on Cuba and is the secretariat of the Association for the Study of the 
Cuban Economy (ASCE), which brings together the most highly qualified 
economists worldwide studying the island.
    The Cuba Transition Project is designed to provide policy makers, 
analysts, and others with accurate information, incisive analysis, and 
practical policy recommendations. The Cuba Transition Project is 
designed to be adaptable to the constantly changing circumstances of 
Cuba reality and of U.S.-Cuban relations. Its work can be divided into 
five major areas: (1) research; (2) task forces; (3) study groups; (4) 
publications; and (5) professional development and education. Through 
the Institute for Cuban and Cuban-American Studies, the Project will 
include offices for research, facilities for conducting briefings and 
seminars, a website that will include a searchable database, and a 
distance learning component.
    The Project's programs will be clustered in three phases: pre-
transition, transition, post-transition. The emphasis during the first 
phase is on current conditions, critical issue areas, planning, and 
emergency aid. Programs are addressed primarily by Project researchers, 
task forces, study groups, and publications. Programs and briefings are 
directed primarily at congressional staff, officials, policy makers, 
analysts at multi-lateral and international agencies, and non-
governmental organizations. Programs related to the transition phase 
combine the analytical work of the first phase with the practical 
necessities of an ongoing process of political, economic, and social 
transition. The target audience of the programs will eventually 
incorporate individuals resident on the island involved in the issue 
areas that the are focus of the Project. The main focus during the 
post-transition period will be on professional education, retraining, 
academic exchange, and distance learning. The basic mission of the 
Project remains the same during the three-step program: aiding and 
accelerating the transition from a centrally planned economy and 
communist party-state control to a free-market democracy.
    For fiscal year 2001 we seek $10 million from the Subcommittee 
through the Department of State to establish, develop and implement the 
Cuba Transition Project at the Institute for Cuban and Cuban-American 
Studies at the University of Miami

The Dante B. Fascell North-South Center
    Next, we seek your continued support for the Dante B. Fascell 
North-South Center. As you know, the Center has long enjoyed bicameral 
and bipartisan support and in fiscal year 2001 as in past years, from 
the Administration. The Fascell Center's mission is to promote better 
relations and to serve as a catalyst for change among the United 
States, Canada, and the nations of Latin America and the Caribbean. My 
colleagues there conduct programs of research, public outreach, 
education, training, and cooperative study. It publishes and 
disseminates policy-relevant information on the Americas. The programs 
and activities also foster linkages among academic and research 
institutions, NGOs, governmental institutions both civilian and 
military, and philanthropic and private sectors throughout the 
Americas.
    We are convinced that such a mission is fundamental to the national 
interest. Informed and balanced analysis and improved understanding of 
our neighbors in the Western Hemisphere provide us great opportunities 
to enhance our economy, expand our jobs, and learn of risks before they 
reach threatening proportions. The United States has long equated 
stability in the region with its own security interest. The maintenance 
of that stability today requires a sophisticated partnership among the 
countries of the Hemisphere. It also demands continually new approaches 
in U.S. policy.
    Fulfilling a singular role in inter-American affairs, the Center's 
programs produce nonpartisan, policy-relevant analysis and discussion 
of key issues directly affecting the lives and well being of U.S. 
citizens. Unlike partisan institutes and advocacy groups, the Center 
engages vital inter-American issues such as trade, investment, 
competitiveness, security, corruption, civil-military relations, 
institutional reform, drug trafficking, immigration, and the 
environment from the perspective of the public good. Unlike academic 
institutions, the Center devotes its efforts toward publishing 
accessible and relevant analyses for diverse audiences, including 
legislators, government officials, NGOs, and the private sector. Our 
goal is to find viable solutions to the problems confronting the 
nations of the Western Hemisphere.
    The Center is a reflection of the belief that the nation benefits 
when the great issues of the Western Hemisphere are analyzed and 
debated by private sector and nongovernmental groups under the auspices 
of a neutral forum. Governments cannot successfully convoke and 
organize nongovernmental opinion, and academic institutions have a 
different mandate. As a respected, independent, public policy 
institution--fully cognizant of the special responsibilities attached 
to its federal funding--the Center has served this function 
successfully. It is crucial that business people, professionals, and 
nongovernmental organizations have a trusted, nonpartisan policy center 
that can assist them in exchanging opinions and bringing their views to 
the attention of policymakers.
    The North-South Center's activities are rooted in democratic 
values, transparent, efficient and effective government, market-driven 
economic prosperity, environmentally sustainable development, and 
social justice. Recent events have made the Center's work and the 
values it promotes all the more relevant to the American people. While 
maintaining a commitment to its core mission and shared values, the 
Center is also responding to new threats and opportunities. With its 
wide array of linkages with government, business, labor and other civil 
society actors in the Americas, the Center is actively engaged in 
developing partnerships and new approaches to tackling the complex 
problems remaining before the region.
    The Center receives financial contributions from a variety of 
government agencies, private foundations, corporations and individual 
donors. Such contributions are directed toward specific programs and 
projects, and do not normally cover core operations and overhead costs. 
Congressional appropriations for core staff and operations allow the 
Center to fulfill its congressional mandate while supporting efforts to 
increase funding from other sources. Over the past year, the Center has 
been making appropriate responses to an independent evaluation of its 
programs and operations completed in November 1998. In addition to the 
refocusing of research and outreach projects into areas with greater 
potential for private funding, the Center is also engaged in the 
development of an international advisory board.

Advancing Market Reforms and Democratic Development
    In the Latin American and Caribbean context, one key set of 
problems is clustered around the question of how to advance and deepen 
market reforms, while assuring that citizens share broadly in their 
benefits and are cushioned from the harshest effects of the 
accompanying adjustment process. Center researchers engage these 
concerns through ongoing research and policy analysis of trade and 
economic integration (Free Trade Area of the Americas), studies on 
addressing poverty and inequality through enhanced human capital 
accumulation and institutional reforms, empirical studies of sectoral 
performance (e.g., textiles, tourism), surveys of shifts in corporate 
strategies, and examination of the effects of restructuring on patterns 
of migration and immigration. A second set of problems relates to 
weaknesses and flaws in the region's democracies. Chief among these are 
weaknesses in political representation, failures in the rule of law, 
and unresolved issues in civil-military relations. The Center will 
continue to address these through research on civil society 
participation and the role of political parties, analysis of judicial 
reform, and study of the lingering influence of the military in domains 
beyond those typical of civilian-led democracies. This last area is 
further embedded in the Center's overall work on inter-American 
security issues, which includes narcotrafficking. A third set of issues 
relates to environmental concerns and their integration into a broader 
vision of sustainable development. Here, the Center pursues program 
activities that look into the means of achieving environmentally 
sustainable trade and ways of instituting new regimes of environmental 
law. The Center will also continue to contribute to the framing of new 
understandings of the linkage between environmental stresses and human 
security.

Building Human and Institutional Capacity
    One of the most pressing challenges facing Latin American and 
Caribbean countries is the development of human resources and 
institutions capable of maximizing the benefits of free markets and 
democracy. The shift toward market incentives requires the development 
of the corresponding capacity to provide the regulatory mechanisms and 
public information functions necessary for avoiding market failures and 
suboptimal service delivery. To contribute toward this need, 
collaborative practical training and education seminars in capacity 
building will be a central focus of the North-South Center. These 
activities address such areas as new public-private partnerships in 
social services, the enhancement of consumer safety and standards, the 
strengthening of laws related to environmental stewardship, and human 
resource training in telecommunications, banking, port management, and 
public security. The Center's collaborative endeavors in capacity-
building also serve to extend and deepen its ties with local 
institutions and organizations throughout Latin America and the 
Caribbean that work in these professional fields and issue-areas. 
Building on the successes of these projects in 1999, the Center plans 
to expand into new areas (including telecommunications, energy and 
banking regulation) in order to develop human resources and 
institutions in support of free markets and democracy.

The New Public Diplomacy
    The Dante B. Fascell North-South Center conceives of and implements 
its outreach programs in the context of a clear recognition of the 
growing significance of strengthening civil societies throughout the 
hemisphere. As a consequence, the Center will continue its role as a 
facilitator and catalyst for public dialogue, actively seeking to bring 
together civil society organizations, including representatives from 
the private sector, to generate ideas and offer recommendations that 
both enhance the agenda of policy options for public officials and 
deepen the level of democratic participation in the policy process. 
Having developed a widely recognized track record of significant 
contributions to the Summit of the Americas process since its inception 
in Miami in 1994, the Center will continue to seek out expertise from 
civil society to monitor and evaluate the implementation of Summit 
commitments in advance of the Summit of the Americas III in Canada in 
2001. Similarly, the Center will continue its series of Diplomatic-
Private Sector Roundtables in Washington, which provide a forum for 
frank discussion of emerging and high-priority policy issues.
    The publications of the Dante B. Fascell North-South Center Press 
serve as the most effective and enduring means of disseminating the 
research results and policy recommendations produced by the Center. The 
Press produces a focused set of publications, including peer-reviewed 
books, the North-South Agenda Papers, North-South Issues Reports, 
North-South Update (a short policy brief issued biweekly to government 
officials and key policy analysts), and timely white papers aimed to 
provide input to the Summit of the Americas process. The Press ensures 
that all Center books, papers, policy briefs, and reports adhere to the 
highest standards of quality, style, and accessibility. In 2001, the 
Dante B. Fascell North-South Center will seek to increase the number of 
its publications appearing in Spanish and Portuguese.

Today's Agenda of New Opportunities and Lingering Problems
    Mr. Chairman, the interdependence between our neighbors in the 
Western Hemisphere affects the daily lives of our citizens more than 
any other region of the world. More Americans fly south to Latin 
America and the Caribbean each year than to either Europe or Asia. 
Policy decisions on such inter-American concerns as immigration, drug 
trafficking, and transborder pollution have immediate impacts on the 
quality of life of U.S. citizens. Trade with Latin America and the 
Caribbean will soon surpass that of Europe and Japan combined. The 
financial stability of countries like Mexico and Brazil has significant 
ripple effects in global markets and far-reaching implications for U.S. 
exporters. The North-South Center engages these issues by providing 
ideas, analysis, and policy options that will support our nation's 
interests.
    There are many reasons to be optimistic about the region's future. 
The nations of the hemisphere have made remarkable progress in recent 
years in terms of market reform and democratic governance. Inflation is 
down, trade and investment are up, and free and fair elections have 
become the order of the day in most countries. Yet, many of the nations 
of the Western Hemisphere are still burdened by enduring historical 
legacies, and many societies are still negotiating the difficult 
passage from old problems to new paths of development. Latin America 
remains the region of the world with the greatest gap between rich and 
poor and the tension between intractable poverty and steady but modest 
growth presents a constant challenge for the hemisphere's governments 
and political leaders. In the past year, this has been particularly 
true in the Andean nations, where a problematic constitutional reform 
process has taken place in Venezuela; concerns have been raised about 
abuses by the executive in Peru; a disturbing, albeit limited, coup has 
occurred in Ecuador; and the effort to halt the drug trade and bring 
about reconciliation in Colombia has taken on dramatic proportions. All 
of these developments are indications of how tenuous the progress to 
date in the region can be. For fiscal year 2001, we seek $1.75 million, 
the continuation funding requested by the Administration.
    Mr. Chairman, we recognize that this will be another difficult 
year. However, we hope that you and your colleagues on the Subcommittee 
will find it possible to support these two important initiatives that 
deal with issues of crucial importance to U.S. citizens, the Cuba 
Transition Project and the Dante B. Fascell North-South Center.
                                 ______
                                 
                          INDEPENDENT AGENCIES

  Prepared Statement of the Upper Mississippi River Basin Association

    The Upper Mississippi River Basin Association (UMRBA) is the 
organization created 19 years ago by the Governors of Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating 
the five states' river-related programs and policies and for 
collaborating with federal agencies on regional issues. As such, the 
UMRBA has an interest in the budget of the Maritime Administration.
    Of particular concern to the UMRBA is funding for MARAD Operations. 
The President's fiscal year 2001 budget proposal includes approximately 
$32 million for this account. Among other things, the MARAD Operations 
budget supports research and development efforts, which help advance 
ship design, construction, and operations. For example, MARAD funding 
has been used to support the design of prototype mooring buoys used on 
the Upper Mississippi River. Such buoys allow tows to tie up safely 
while awaiting lockage, thus avoiding environmental damage that might 
be caused by mooring to the shoreline. Funding for research and 
development efforts such as these is critical to the safety and 
efficiency of commercial navigation on this nation's inland waterway 
system.
    In addition, the MARAD Operations account supports MARAD field 
offices on the inland waterway system, such as the office located in 
St. Louis, Missouri. The St. Louis office is situated at the confluence 
of the Mississippi, Missouri, and Illinois Rivers, on which move much 
of the Midwestern grain destined for international markets. Such field 
offices are essential for MARAD to maintain its involvement in an 
increasingly wide variety of interagency and interstate river 
management issues.
    The UMRBA supports adequate funding for the Maritime 
Administration's Operations account.
                                 ______
                                 
   Prepared Statement of the Lovelace Respiratory Research Institute

    It is proposed that the Small Business Administration support the 
start-up operational costs of a technology-based incubator in 
Albuquerque, New Mexico to assist in the attraction, admission, 
incubation and graduation of technology based companies that create new 
and better jobs for New Mexicans.

The Business Technology Group
    In the fall of 1997, Dr. Robert Rubin, CEO and President of the 
Lovelace Respiratory Research Institute (LRRI) convened a broad 
coalition of community leaders, representing the core Central New 
Mexico business and educational institutions. The subject of the 
meeting was to consider ways to help improve the future economic 
stability of the area, given the change of focus to the national 
laboratories, which form a critical economic base for the area. The 
outcome was the formation of a new technology based incubator to 
attract companies to New Mexico, and assist the formation of companies 
to commercialize technology coming from the national laboratories, the 
University of New Mexico (UNM) and LRRI.
    LRRI and UNM merged its incubator (Albuquerque Technology 
Incubator), along with other private efforts to incubate companies, 
into the Business Technology Group (BTG). The initial steps to form BTG 
continued throughout 1998, and DOE through its Office of Community 
Worker Transition, provided $100,000 as initial funding to assist in 
the formation of BTG.
    The initial founder's intentions proved to be well founded. BTG has 
accomplished in its first year, what most similar incubators accomplish 
in their fourth or fifth year of operation. The BTG aim and strategies 
are working. BTG has forty-one technology-based companies housed in its 
three campus locations. There are approximately five others waiting for 
consideration to join BTG. This initial cadre of companies forms the 
critical mass for graduating successful technology based companies that 
provide New Mexicans with new and better jobs.
    One problem does continue to exist.
    There is an urgent need to provide a small and effective staff that 
will better utilize volunteer services to support the incubatee 
companies and to build an infrastructure of services to accelerate the 
growth of these start-up companies.

Current Status
    BTG's ability to provide superior technical facilities and 
equipment makes it nationally competitive to attract high potential 
technology based entrepreneurs. BTG's founders formed a public/private 
venture, providing the following non-cash inducements for companies to 
join BTG:
  --Created 120,000-sq. ft. of subsidized superior laboratory and 
        manufacturing space and 35,000-sq. ft. of office space with 
        total annual savings to incubatees amounting to $104,800.
  --Immediate access to office equipment, furnishings and superior 
        laboratory equipment valued at $450,000 and use of umbrella 
        coverage under existing regulatory permits: Machine shops, 
        large storage areas and high-bay working areas; Animal care for 
        scientific studies; Radiation control and chemical waste 
        treatment facilities; and Electrical and wet laboratory 
        facilities.
  --Annually, over 5,000 volunteer hours, which at the rate of $50 per 
        hour amounts to $250,000 of professional, administrative and 
        technical assistance.
  --Currently, total private non-cash contributions approach $840,000 
        per year.
  --BTG companies currently provide 200 technology-based jobs.
    In conclusion, the BTG concept is working. It is at a critical 
stage for growth into a long-term viable institution that plays a 
critical role in the development and diversification of New Mexico's 
economy. New Mexico is a wonderful place in which to live. Its economy 
is below national averages in most or all indicators. BTG is working to 
improve this economic condition. We request $400,000 in start-up 
funding to bring stability to BTG. Mr. Chairman, and members of the 
Committee, we respectfully thank you for your consideration of our 
request.
                                 ______
                                 
         Prepared Statement of the Investment Company Institute

    The Investment Company Institute\1\ appreciates this opportunity to 
submit testimony to the Subcommittee in support of the fiscal year 2001 
Appropriations request for the Securities and Exchange Commission 
(SEC). The Institute would like to commend the Subcommittee for its 
past efforts to assure adequate resources for the SEC.
---------------------------------------------------------------------------
    \1\ The Investment Company Institute is the national association of 
the American investment company industry. Its membership includes 8,021 
open-end investment companies (``mutual funds''), 496 closed-end 
investment companies and 8 sponsors of unit investment trusts. Its 
mutual fund members have assets of about $6.728 trillion, accounting 
for approximately 95 percent of total industry assets, and over 78.7 
million individual shareholders. Many of the Institute's investment 
adviser members render investment advice to both investment companies 
and other clients. In addition, the Institute's membership includes 402 
associate members which render investment management services 
exclusively to non-investment company clients. A substantial portion of 
the total assets managed by registered investment advisers are managed 
by these Institute members and associate members.
---------------------------------------------------------------------------
    Mutual funds are an integral part of the U.S. economy and have 
become one of America's primary savings and investment vehicles. More 
than 78 million investors in over 48 million U.S. households own mutual 
fund shares today and, since 1990, the percentage of U.S. retirement 
assets held in mutual funds has more than tripled. Moreover, most 
mutual fund investors are ordinary Americans; the median household 
income of fund shareholders is $55,000. These millions of average 
Americans deserve continued vigilant regulatory oversight of mutual 
funds. For this reason, sufficient funding of the SEC should be a 
priority. The Institute urges Congress to provide appropriations at a 
level sufficient to ensure the SEC's ability to fulfill its regulatory 
mandate.
    The Administration's fiscal year 2001 budget proposes SEC funding 
at a level of $422.8 million. The Institute supports this level of 
funding to sustain the SEC's operations, especially those of the 
Division of Investment Management, which regulates the mutual fund 
industry. While we are also pleased that the fee rate for registration 
statements and other filings pursuant to Section 6(b) of the Securities 
Act of 1933 has decreased in accordance with the National Securities 
Market Improvement Act of 1996, we remain concerned that SEC fees will 
generate revenues significantly in excess of that required to fund SEC 
operations. In the current fiscal year, for example, it is anticipated 
that Section 6(b) fees will generate revenues of more than one billion 
dollars, while the SEC's budget is $367 million. The Institute has 
supported and will continue to support adequate financial resources to 
provide effective regulatory oversight of mutual funds, but we also 
believe that the fees should be reflective of their intended purpose, 
that is, to offset the costs associated with the activities of the SEC.
    Adequate financial resources are essential for the SEC to continue 
its effective regulatory oversight of the securities markets and to 
carry out important investor protection and awareness initiatives. Such 
resources will enable the SEC to complete its many important 
initiatives, which include, among other things, finalizing significant 
rule proposals on fund governance issues, developing new rules for 
mutual fund advertising, and addressing disclosure of after-tax 
returns.
    The SEC will also be conducting routine and special inspections of 
investment advisers and fund companies, continuing its review of fund 
prospectuses and fund profiles under the new disclosure rules, and 
responding to projected increases in the number of interpretive 
requests, shareholder letters, and exemptive relief requests submitted 
by investment management participants.
    Moreover, the SEC will address significant equity market structure 
issues, such as decimalization, concerns over market fragmentation and 
after-hours trading, and will respond to the many challenges new 
developments in technology will bring. Finally, the SEC will continue 
its ongoing investor education initiatives.
    These initiatives will benefit the millions of Americans invested 
in mutual funds and are integral to fulfilling the SEC's mission of 
protecting investors and maintaining the integrity and the efficiency 
of the nation's securities markets.
    Equally important to having adequate financial resources to fulfill 
these initiatives is the SEC's ability to maintain adequate staffing 
resources. To this end, we believe that it is essential that the SEC be 
able to combat the high attrition rate of its professional staff, 
which, over the last two years, has resulted in a loss of 25 percent of 
its attorneys, accountants and examiners. Accordingly, we support the 
SEC's retention initiative, which would raise staff compensation to 
levels comparable with the banking regulatory agencies. We believe the 
proposed increases would go far in raising employee morale, thus 
enhancing the SEC's recruitment and retention efforts. Attracting and 
retaining qualified staff obviously are necessary in order for the SEC 
to fulfill its mandate.
    We appreciate your consideration of our views.


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Alachua County Board of Commissioners, Alachua County, Florida, 
  prepared statements..........................................383, 401
Albright, Hon. Madeleine K., Secretary of State, Department of 
  State..........................................................   117
    Prepared statement...........................................   119
American Indian Higher Education Consortium, prepared statement..   398
American Public Power Association, prepared statement............   388
American Society of Mechanical Engineers, prepared statement.....   402

Bilmes, Linda J., Chief Financial Officer and Assistant Secretary 
  for Administration, Office of the Secretary, Department of 
  Commerce.......................................................     1
Bloom, Ellen, Deputy Chief of Staff, Office of the Secretary, 
  Department of Commerce.........................................     1

California Industry and Government Central California Ozone Study 
  (CCOS) Coalition, prepared statement...........................   412
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
  questions submitted by.......................................110, 170
Carman, Gregory W., Chief Judge, United States Court of 
  International Trade, the judiciary, prepared statement.........   358
City of Gainesville, Florida, prepared statements..............380, 386
City of Miami Beach, Florida, prepared statement.................   384
City of Newark, New Jersey, prepared statements................384, 389

Daley, Hon. William A., Secretary, Office of the Secretary, 
  Department of Commerce.........................................     1
    Prepared statement...........................................     4
Domenici, Hon. Pete V., U.S. Senator from New Mexico, questions 
  submitted by.........................................23, 90, 163, 253

Fishel, Andrew, Director, Office of the Managing Director, 
  Federal Communications Commission..............................   289
Freeh, Louis J., Director, Federal Bureau of Investigation, 
  Department of Justice..........................................   215
    Prepared statement...........................................   216
Fuller, William P., President, The Asia Foundation, prepared 
  statement......................................................   365

Gregg, Hon. Judd, U.S. Senator from New Hampshire, questions 
  submitted by..............................................15, 88, 248

Heyburn, John G., II, Chairman, Committee on the Budget, Judicial 
  Conference of the United States, the judiciary, prepared 
  statement......................................................   337
Hollings, Hon. Ernest F., U.S. Senator from South Carolina, 
  questions submitted by........................................28, 309

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, questions 
  submitted by.............................................28, 267, 315
Investment Company Institute, prepared statement.................   426

Kennard, William E., Chairman, Federal Communications Commission.   289
    Prepared statement...........................................   291
Kilmer, Deborah K., Assistant Secretary for Legislative and 
  Intergovernmental Affairs, Office of the Secretary, Department 
  of Commerce....................................................     1
Klose, Kevin, President and CEO, National Public Radio, letter 
  from...........................................................   404

Lautenberg, Hon. Frank R., U.S. Senator from New Jersey..........    72
    Prepared statements........................................153, 246
    Questions submitted by.......................30, 111, 174, 318, 333
Leahy, Hon. Patrick J., U.S. Senator from Vermont, questions 
  submitted by...................................................    38
Levitt, Arthur, Chairman, Securities and Exchange Commission.....   323
    Prepared statement...........................................   323
Local 511, Professional Employees of the Immigration and 
  Naturalization Service of the American Federation of Government 
  Employees, prepared statement..................................   394
Lovelace Respiratory Research Institute, prepared statement......   425

Marshall, Donnie R., Acting Administrator, Drug Enforcement 
  Administration, Department of Justice........................215, 227
    Prepared statement...........................................   228
Mayer, Haldane Robert, Chief Judge, United States Court of 
  Appeals for the Federal Circuit, the judiciary, prepared 
  statement......................................................   357
McConnell, James M., Executive Director, Securities and Exchange 
  Commission.....................................................   323
McConnell, Hon. Mitch, U.S. Senator from Kentucky, questions 
  submitted by...................................................   105
Mecham, Leonidas Ralph, Director, Administrative Office of the 
  U.S. Courts, the judiciary, prepared statement.................   344
Meissner, Doris, Commissioner, Immigration and Naturalization 
  Service, Department of Justice.................................   183
    Prepared statement...........................................   186
Mikulski, Hon. Barbara A., U.S. Senator from Maryland............    72
    Questions submitted by.................................35, 181, 271
Murphy, Diana E., Chair, United States Sentencing Commission, the 
  judiciary, prepared statement..................................   359

National Border Patrol Council of the American Federation of 
  Government Employees, prepared statement.......................   391
National Consortium for Justice Information and Statistics, 
  prepared statement.............................................   374
National Immigration and Naturalization Service Council, American 
  Federation of Government Employees, prepared statement.........   396
National Public Radio, prepared statement........................   405
National Recreation and Park Association, prepared statement.....   378
National, Coordinated Law-Related Education Program, prepared 
  statement......................................................   371
New York University, prepared statement..........................   421
Northwest Indian Fisheries Commission, prepared statement........   413

Reno, Janet, Attorney General, Office of the Attorney General, 
  Department of Justice..........................................    45
    Prepared statement...........................................    46
Retzlaff, Barbara, Director, Office of Budget, Office of the 
  Secretary, Department of Commerce..............................     1

Smith, Hon. Fern M., Director, Federal Judicial Center, the 
  judiciary, prepared statement..................................   349
Stevens, Hon. Ted, U.S. Senator from Alaska, question submitted 
  by...........................................................253, 308

The Nature Conservancy, prepared statement.......................   409

University Corporation for Atmospheric Research, prepared 
  statement......................................................   416
University of Miami, prepared statements.......................407, 421
Upper Mississippi River Basin Association, prepared statement....   425

Williams-Bridgers, Jacquelyn L., Inspector General, Office of the 
  Inspector General, prepared statement..........................   128

Yukon River Drainage Fisheries Association, prepared statement...   419


                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

                                                                   Page
Additional committee questions...................................    15
ATP..............................................................    21
Census...........................................................    35
Census 2000......................................................    28
China--intellectual property.....................................    34
Coastal impact assistance fund...................................     9
Critical infrastructure program..................................    17
Department of the Interior's marine resource role................    28
Digital divide............................................6, 33, 35, 42
E-commerce:
    Initiative:
        BEA's....................................................    23
        Effect of not funding....................................    23
        Effect of on small business..............................    30
    Revolution...................................................    38
EDA Internet access..............................................16, 42
Emergency Oil and Gas Loan Program...............................    24
Environmental impact statement backlog...........................    29
Fishermen, economic assistance to................................    30
Global economy, funding for data on..............................    24
Home Internet Access Program (HIAP)..............................     6
    Intent of....................................................     6
IIP versus ATP...................................................    11
Incremental funding for quality improvements, lack of............    23
National Security Council........................................    14
National Technical Information Service (NTIS)....................10, 21
    Functions transferred to Library of Congress.................    11
National Textile Center..........................................    13
Native Americans.................................................    12
NIST/infrastructure program......................................    18
NOAA:
    Delay of fleet...............................................     9
    Lawsuit......................................................    10
    Programs, emphasis on funding................................    22
    Research in support of the agency's programs.................    21
Overview of Secretary Daley's statement..........................     1
Public Telecommunications Facilities Program.................15, 22, 25
Rescission criteria..............................................    13
Safe harbor agreement on privacy.................................    43
Shark finning....................................................    30
Standards, maintaining without budget increases..................    23
Suitland facilities..............................................    36
    Census.......................................................36, 37
    NOAA.........................................................    37
Textile Program, elimination of..................................    12
Tourism..........................................................    10

                         DEPARTMENT OF JUSTICE

                    Drug Enforcement Administration

Additional committee questions...................................   248
Border Patrol:
    Enforcement Organization, creation of........................   242
    Improving the................................................   241
Budget initiatives...............................................   228
Budget request:
    DEA fiscal year 2001 unfunded................................   235
    Fiscal year 2001.............................................   233
Colombia supplemental............................................   237
DEA:
    Initiatives, funding for other...............................   235
    Strategy.....................................................   230
Drug abuse in America--the changing demographics.................   230
Drug trafficking:
    Patterns.....................................................   227
    Threat to the United States..................................   229
High Intensity Drug Trafficking Areas Program....................   269
Methamphetamine request..........................................   234
Mexico, drug trafficking in......................................   238
Mission and approach.............................................   228

                    Federal Bureau of Investigation

Additional committee questions...................................   248
Agents overseas, clarification on................................   240
Budget request, overview of fiscal year 2001.....................   217
Counterintelligence..............................................   217
Counterterrorism.................................................   221
    Technology R&D--FBI..........................................   259
Crime and violence rates, reducing the...........................   243
FBI:
    Development of Domestic Terrorism Division...................   263
    Jewelry theft:
        Tracking of..............................................   267
        Efforts to combat this criminality.......................   268
    Laboratory modernization.....................................   240
    Mission, support of the......................................   215
FBI-CIA coordination.............................................   238
Firearm retrievals...............................................   245
First responder training.........................................   264
Gun:
    Retrieval notices............................................   246
    Show checks..................................................   243
    User fee for checks..........................................   245
Heroin problem in northern New Mexico............................   240
High Intensity Drug Trafficking Areas Program....................   269
IDENT-IAFIS intergration.........................................   242
Indian Country, law enforcement in...............................   256
Information collection, management, and analysis.................   217
Investigative support............................................   220
Law enforcement services.........................................   225
Legislative proposals............................................   226
National Domestic Preparedness Office............................   247
National laboratory protection...................................   241
Related departmental funding requests............................   225
Rio Arriba County black tar heroin problem.......................   266
South Korea, crime problem in....................................   239
Technology/cyber crimes..........................................   223
Training.........................................................   218
Victim Witness Assistance Program................................   268
Violent crimes...................................................   222
War crimes assistance............................................   246

                 Immigration and Naturalization Service

Administrative and operational performance, external audit of....   271
Anchorage district office expansion project......................   253
Border Patrol..................................................184, 201
    Agents.......................................................   211
    Equipment for................................................   213
    Recruitment..................................................   209
Capital investment account.....................................200, 208
Charleston case..................................................   202
    Status of the................................................   203
Criminal illegal aliens..........................................   196
    Immigration and Naturalization Service results of House 
      Judiciary Committee subpoena on criminal aliens released 
      from detention.............................................   198
    Report on Criminal Aliens Who Commit Crimes After Release....   198
Deportation proceedings, determining resource needs for..........   255
Detaining illegals awaiting trial or deportation.................   207
Detention........................................................   209
    Issues.......................................................   207
Enforcement......................................................   187
Illegal Immigration Reform and Immigrant Responsibility Act, 
  enforcement of the.............................................   270
Illegal immigration via Colorado.................................   204
Immigration services...........................................185, 192
Incarcerations, reimbursing counties for.........................   210
Indian reservations..............................................   205
Information technology infrastructure............................   285
INS ISIS system, operation and maintenance center for............   253
INSPASS..........................................................   250
Mexican immigrants...............................................   206
Missing person...................................................   203
Naturalization backlog....................................195, 201, 279
Premium processing fee...........................................   210
Professionalism and infrastructure...............................   194
Restructuring....................................................   195
Service enhancements.............................................   251
Staffing.........................................................   252
Technology integrate.............................................   286
User fee increase................................................   248

                     Office of the Attorney General

Additional committee questions...................................    88
American Indian and Alaskan Native communities, protecting.......    56
Attorney overtime................................................    83
Biennial budgeting--time-consuming nature of annual process......   104
Border Patrol....................................................64, 69
    Hiring agents................................................    81
    Pay raise....................................................    74
    Pay reform versus pay raise..................................    70
Borders, securing our............................................    53
Caseloads in Federal courts......................................   104
CDC, DOD, HHS involvement with NDPO..............................    60
Chemical Safety Information, Site Security and Fuels Regulatory 
  Relief Act.....................................................   114
Civil rights laws, enforcing our.................................    53
Community prosecution............................................    88
COPS Program.....................................................    88
    Budget.......................................................    79
    In schools program...........................................68, 83
    In schools, 2001 funding for.................................    69
Counterterrorism and foreign counterintelligence.................    46
Crime:
    Decline in...................................................    61
    Decreased rates..............................................    62
    Through technology, fighting.................................    55
Crime-fighting initiatives, other................................    57
Cybercrime.......................................................    84
    Combating....................................................    47
Death penalty....................................................   113
Detention and incarceration, enhancing...........................    52
Drug treatment/Offender Reentry Program..........................   111
Drugs, breaking the cycle of.....................................    51
Evaluation of results--expenditures for State and local 
  assistance.....................................................   100
Firearm manufacturers, litigation against........................   110
First Responder Training Program.................................    91
GPRA:
    Managing for results:
        Is DOJ budget information credible?......................   102
        Linking DOJ component budget resource requests and goals.   103
Grant programs:
    Elimination of major.........................................    79
    Inconsistency in funding.....................................    80
Gun violence.....................................................    73
    Combating....................................................    49
Hiring, difficulties in..........................................    85
Indian Country...................................................62, 65
    Improvements to judicial system in...........................    77
    Law enforcement in...........................................    93
    Resolving issues in..........................................    67
Indian judicial system...........................................    76
Law enforcement, improving community.............................    50
Legal representation, enforcement of Federal laws and defense of 
  U.S. interests.................................................    56
Methamphetamine trafficking......................................   110
Mexico, certification of.........................................    61
Missing and exploited children's programs (MECP).................    89
National Domestic Preparedness Office............................    58
    Facility.....................................................    60
Plan Colombia supplemental.......................................    86
Prison population, growing.......................................    84
Radiation exposure compensation program..........................77, 97
Resources officers placed in schools, number of..................    68
Rio Arriba County................................................    75
    Black tar heroin problem.....................................    90
Southwest border drug problem....................................    75
The Brady law....................................................    74
Tobacco litigation...............................................   105
Tribal enforcement...............................................    66
Tribal law enforcement...........................................    66
VOCA legislation.................................................    90

                          DEPARTMENT OF STATE

                           Secretary of State

Additional committee questions...................................   163
Anti-corruption initiative.......................................   171
Antiterrorism assistance program.................................   155
Belarus, developments in.........................................   171
Budget request...................................................   117
China and WTO membership.........................................   168
Cyprus...........................................................   150
E-mail...........................................................   161
Embassy:
    Construction.................................................   144
    Security.....................................................   169
        And construction.........................................   159
Foreign relations, improved conduct of...........................   130
International educational and cultural exchange..................   170
International Law Enforcement Academy..........................154, 163
International organizations, leading through.....................   124
Kosovo:
    And Bosnia...................................................   153
    International police force in................................   173
Libya/Pan Am 103.................................................   174
MIAs and Israel..................................................   171
More effective, efficient, and secure operations and 
  infrastructures................................................   134
OIG budget.......................................................   128
OSCE missions....................................................   172
Overseas Presence Advisory Panel recommendations.................   175
Peacekeeping.....................................................   148
Professional and ethical conduct, greater adherence to 
  fundamental principles governing...............................   138
Security.........................................................   118
Service delivery.................................................   159
Staffing.........................................................   161
State programs...................................................   121
Supplemental requests, fiscal year 2000..........................   127
Taiwan and China.................................................   162
U.N.:
    Dues.........................................................   175
    Peacekeeping.................................................   118
U.S. foreign policy priorities, better alignment of fiscal and 
  human resources with...........................................   132
United States-European Union hushkit dispute.....................   174
USIA and ACDA merger.............................................   157
War crimes tribunal..............................................   150
World Trade Organization and China...............................   156

                   FEDERAL COMMUNICATIONS COMMISSION

Additional committee questions...................................   308
An affordable future: The fiscal year 2001 budget request........   292
Back to the future...............................................   296
C-block licenses.................................................   300
Cross-ownership rules............................................   307
Excess regulatory fees...........................................   299
FM radio service, low-power......................................   302
Low-power reading services.......................................   306
Mergers..........................................................   303
Partnership for the future.......................................   291
Past accomplishments build a successful future...................   293
Section 271 petition.............................................   305
Spectrum cap.....................................................   302
Technical staffing levels........................................   299
Universal service................................................   304

                   SECURITIES AND EXCHANGE COMMISSION

Banking regulators, parity with the..............................   328
Commission, effect on the........................................   327
Committee responsiveness.........................................   326
Decimalization...................................................   332
Electronic market development....................................   330
International organization of securities commissions.............   332
Internet:
    And filing requirements......................................   331
    And securities fraud.........................................   325
    Fraud........................................................   329
    Resources for fraud enforcement..............................   329
    The challenges of the........................................   324
Introduction.....................................................   323
Opening remarks..................................................   323
Proposals to provide relief......................................   328
Recruitment......................................................   327
Retention efforts................................................   327
SEC:
    Approach.....................................................   325
    Fiscal year 2001 budget request to OMB.......................   330
    Preparedness for cyber attacks...............................   332
    Staff, pay parity for........................................   330
Section 31.......................................................   333
Staffing crisis..................................................   326
The agency and its staff.........................................   328

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