[Senate Hearing 107-769]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-769
 
DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003
=======================================================================

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   on

                                S. 2778

AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF COMMERCE, JUSTICE, 
  AND STATE, THE JUDICIARY, AND RELATED AGENCIES FOR THE FISCAL YEAR 
           ENDING SEPTEMBER 30, 2003, AND FOR OTHER PURPOSES

                               __________

                         Part 1 (Pages 1-811)

                        Department of Commerce
                         Department of Justice
                          Department of State
                   Federal Communications Commission
                        Federal Trade Commission
                       Nondepartmental witnesses
                   Securities and Exchange Commission
                             The judiciary
                                   deg.

                               __________

         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

                ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina   THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            ARLEN SPECTER, Pennsylvania
TOM HARKIN, Iowa                     PETE V. DOMENICI, New Mexico
BARBARA A. MIKULSKI, Maryland        CHRISTOPHER S. BOND, Missouri
HARRY REID, Nevada                   MITCH McCONNELL, Kentucky
HERB KOHL, Wisconsin                 CONRAD BURNS, Montana
PATTY MURRAY, Washington             RICHARD C. SHELBY, Alabama
BYRON L. DORGAN, North Dakota        JUDD GREGG, New Hampshire
DIANNE FEINSTEIN, California         ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois          BEN NIGHTHORSE CAMPBELL, Colorado
TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              MIKE DeWINE, Ohio
                  Terrence E. Sauvain, Staff Director
                 Charles Kieffer, Deputy Staff Director
               Steven J. Cortese, Minority Staff Director
            Lisa Sutherland, Minority Deputy Staff Director
                                 ------                                

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

                   ERNEST F. HOLLINGS, South Carolina
DANIEL K. INOUYE, Hawaii             JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland        TED STEVENS, Alaska
PATRICK J. LEAHY, Vermont            PETE V. DOMENICI, New Mexico
HERB KOHL, Wisconsin                 MITCH McCONNELL, Kentucky
PATTY MURRAY, Washington             KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              BEN NIGHTHORSE CAMPBELL, Colorado
ROBERT C. BYRD, West Virginia
  (ex officio)
                           Professional Staff
                               Lila Helms
                           Jill Shapiro Long
                              Luke Nachbar
                               Dereck Orr
                         Jim Morhard (Minority)
                        Kevin Linskey (Minority)
                     Katherine Hennessey (Minority)

                         Administrative Support

                             Nancy Olkewicz






                            C O N T E N T S

                              ----------                              

                       Tuesday, February 26, 2002

                                                                   Page
Department of Justice: Office of the Attorney General............     1

                         Tuesday, March 5, 2002

The judiciary:
    Supreme Court of the United States...........................   131
    Federal judiciary............................................   143

                        Thursday, March 7, 2002

Federal Communications Commission................................   183
Securities and Exchange Commission...............................   225

                        Tuesday, March 12, 2002

Department of State: Office of the Secretary.....................   237

                       Wednesday, March 13, 2002

Department of Commerce: Office of the Secretary..................   307

                        Tuesday, March 19, 2002

Department of Commerce: National Oceanic and Atmospheric 
  Administra- 
  tion...........................................................   365
Federal Trade Commission.........................................   405

                       Nondepartmental Witnesses

Department of Commerce...........................................   429
Department of Justice............................................   455
Department of State..............................................   467
Related agencies.................................................   472


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003

                              ----------                              


                       TUESDAY, FEBRUARY 26, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:01 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Ernest F. Hollings (chairman) 
presiding.
    Present: Senators Hollings, Mikulski, Leahy, Kohl, Murray, 
Reed, Gregg, and Domenici.

                         DEPARTMENT OF JUSTICE

                     Office of the Attorney General

STATEMENT OF JOHN ASHCROFT, ATTORNEY GENERAL


             opening remarks of senator ernest f. hollings


    Senator Hollings. General Ashcroft, they have a vote on and 
maybe it would be better for your presentation if we run to get 
that vote and come back quickly.
    Attorney General Ashcroft. Sure.
    Senator Hollings. Let me then call the committee to order. 
There are two votes. We will at least let you present your 
statement here. It will be included in its entirety. We welcome 
you to the committee and you can highlight your statement as 
you wish or deliver it in full. I think that would be the 
better way, since we have two votes.


                   attorney general opening statement


    Attorney General Ashcroft. Mr. Chairman and members of the 
subcommittee, I am honored again to appear before this 
subcommittee to present the President's budget request for the 
Department of Justice.
    First, an overriding priority of this Department of Justice 
and of this budget is to protect America against acts of 
terrorism and to bring terrorists to justice. Since my last 
appearance before you, America and the world have been awakened 
to a new threat from an old evil, terrorism.
    I appear before you today acknowledging that September 11 
alerted us to a danger that a number of you on this 
subcommittee have labored long and hard to mitigate and to 
prevent. To the degree that we find ourselves in a position to 
respond effectively to the challenges posed by terrorism, it is 
because of your foresight.
    I appreciate the leadership of the members of this 
subcommittee in providing to the Department of Justice the 
necessary resources to meet the terrorist threat and to improve 
the Nation's border security. Your direction to develop an 
interagency counterterrorism plan, conduct preparedness 
exercises, to train and equip the Nation's first responders, 
maintain a counterterrorism fund for emergency circumstances, 
all of these things have made this a safer Nation.
    The fiscal year 2003 budget request that I present to you 
today builds upon your support and seeks to enhance further the 
Department's ability to prevent and combat terrorism, and even 
as the men and women of the Department of Justice go about the 
urgent task of protecting America from terrorism, we do so 
within a framework of justice that upholds other goals, as 
well. Indeed, our dedication to identifying, disrupting, and 
dismantling terrorist networks will help ensure the fair and 
vigorous enforcement of the law in other areas. We remain 
committed to reducing the demand and supply of illegal guns, 
enforcing the gun laws, and protecting civil rights. We 
recognize, however, the need to prioritize our commitments and 
to husband our resources. Today, more than ever, lives depend 
on the careful understanding of our responsibilities and the 
exemplary performance of our duties.
    For fiscal year 2003, the President's budget requests $30.2 
billion for the Department of Justice, $23.1 billion in 
discretionary funding and $7.1 billion for the Department's 
mandatory and fee-funded accounts. Federal law enforcement 
programs increase by 13 percent over funding enacted in the 
fiscal year 2002 Department of Justice Appropriations Act.


                    counterterrorism budget request


    The Department's fiscal year 2003 budget seeks $2 billion 
for program improvements and for ongoing activities funded in 
the fiscal year 2002 counterterrorism supplemental. Resources 
are also requested for improving immigration enforcement and 
services, enhancing Federal detention and incarceration 
capacity, reducing the availability of illegal drugs, and 
supporting proven programs aimed at reducing drug use, 
providing services for the Nation's crime victims, protecting 
civil rights, ending trafficking in human beings, providing 
streamlined resources to support State and local law 
enforcement, and defending the interests of the United States 
in legal matters.
    To help secure our Nation's borders, we are proposing 
program improvements totaling $856 million, including $59.1 
million from fee-funding for the Immigration and Naturalization 
Service. Of this amount, $734 million is dedicated to improving 
border security. We are requesting $362 million to begin a 
multi-year effort to provide a comprehensive land, sea, and air 
entry-exit system for the United States and $372 million to 
hire 570 new Border Patrol agents and additional immigration 
inspectors to improve air, sea, and land ports-of-entry 
inspections.
    As a result of the attacks of September 11, the FBI, with 
the cooperation of other Federal, State, local, and 
international law enforcement, is conducting the largest 
criminal investigation in history. In the 2002 counterterrorism 
supplemental, this subcommittee led Congress in providing much-
needed assistance to the FBI in responding to and investigating 
the terrorist attacks, and we are deeply grateful for your 
leadership in this respect. Our 2003 budget builds on this 
assistance with a request of $411.6 million, including funding 
for 263 new FBI special agents; $223 million for increased 
intelligence, surveillance, and response capabilities; $109 
million for information technology projects; and $78 million 
for enhanced personnel and information security.
    The establishment of the Joint Terrorism Task Force program 
has enhanced the FBI's ability to promote coordinated terrorism 
investigations among FBI field offices and their respective 
counterparts in Federal, State, and local law enforcement 
agencies. Our budget seeks $15.7 million to support a total of 
56 Joint Terrorism Task Forces throughout the country. That is 
one in each FBI field office.
    As accused terrorists are brought to justice in the Federal 
court system, there is an increased need for enhanced security 
measures. To support the heightened security required by the 
United States Marshals Service at the Federal courthouses, our 
budget seeks $34.7 million to close security gaps at courthouse 
facilities, with the greatest physical security deficiencies 
being addressed. Also, it seeks the resource to purchase new 
security equipment for new courthouses and for those undergoing 
significant renovation. It seeks those resources to provide 
additional security personnel for terrorist-related court 
proceedings and to provide security staffing to keep pace with 
the opening of new courthouses and the creation of new 
judgeships.
    Another critical element in our battle against the 
terrorist threat is working to develop and enhance 
interoperable databases and telecommunications systems for the 
Department's law enforcement activities. Our budget seeks $60 
million to continue narrowband investment in radio 
infrastructure for key areas such as New York and along the 
northern and southwestern borders.


                          drugs budget request


    As I mentioned earlier, our efforts to combat terrorism 
enhance enforcement of the law across the board. The heightened 
vigilance of law enforcement and the increased awareness and 
sense of responsibility of citizens spills over into more 
effective enforcement of the law in all areas and we are 
working to reduce both the demand for and the availability of 
illegal drugs. Drugs not only weaken the fabric of our society, 
but also threaten our national security.
    The Organized Crime Drug Enforcement Task Force program is 
the centerpiece of the Department of Justice's drug strategy to 
reduce the availability of drugs. That task force, OCDETF, 
combines the talent of experienced Federal agents and 
prosecutors with support from State and local law enforcement, 
thereby uniquely positioning OCDETF to conduct multiple 
coordinated investigations across the country to root out and 
eliminate all pieces of a drug organization.
    For fiscal year 2003, our budget seeks $14.8 million 
through OCDETF to provide field support for DEA's Special 
Operations Division coordinated investigations. The 
Department's fiscal year 2003 budget also seeks $13 million for 
drug abuse and crime prevention programs under the Office of 
Justice Programs. Our budget includes $52 million for the drug 
courts program, $77 million for the residential substance abuse 
treatment program, and that is a 10-percent increase in funding 
over fiscal year 2002.


                  voting and civil rights enforcement


    Essential to this republic is the freedom and privilege of 
every citizen to vote. The Federal Government has become an 
active participant in establishing rules for the conduct of 
elections on matters ranging from voter registration to 
protection against discrimination. In fiscal year 2003, the 
Department requests $400 million for a new 3-year program, and 
in the 3 years that would total $1.2 billion, for States to 
improve State and local jurisdictions' voting technologies and 
administration, including voting machines, registration 
systems, voter education, and poll worker training. This new 
program will provide States with matching grants for election 
reform, so the $1.2 billion should have the impact of a $2.4 
billion investment.
    The Department of Justice is charged with protecting the 
civil rights of all Americans. Our fiscal year 2003 budget 
seeks $3 million for the Office of the Inspector General to 
address a statutory requirement of the USA PATRIOT Act for the 
review of complaints alleging abuses of civil rights and 
liberties and to provide audit oversight of the Department's 
counterterrorism programs. Further, we request $2.8 million to 
promote effective investigation, prosecution, and response to 
hate crimes.
    Senator Hollings. General, if you could hold on there, we 
have only 2 minutes to vote.
    Attorney General Ashcroft. I understand. Thank you.
    Senator Hollings. We will be right back. The committee will 
be in recess.
    The committee will come to order. I apologize, Mr. Attorney 
General, but you are used to this. Have you completed your 
statement?
    Attorney General Ashcroft. I would like to continue with my 
statement, if I may.
    Senator Hollings. Please do.


                   other justice department requests


    Attorney General Ashcroft. Thank you, Mr. Chairman, members 
of the committee. We at the Department of Justice are committed 
to building and strengthening an immigration services system 
that is effective, that ensures integrity, and promotes a 
culture of respect. We are making good progress toward 
achieving President Bush's goal of a 6-month average processing 
time for all applications. To help ensure additional progress, 
our budget request seeks $40 million to begin implementation of 
the administration's comprehensive restructuring of the 
Immigration and Naturalization Service.
    The Department of Justice is charged with safe, secure, and 
humane confinement of detained persons awaiting trial, 
sentencing, or awaiting immigration proceedings. The need for 
Federal detention bed space has more than doubled in the last 5 
years, from 32,000 detainees in 1996 to 67,000 detainees in the 
year 2001.
    To enhance coordination, to manage the rising detainee 
population, and exercise financial control of Federal detention 
operations, which are currently the responsibility of the INS, 
the Marshals Service, and the Bureau of Prisons, the Office of 
Detention Trustee was created by Congress last year. That was a 
wise decision. As you recommended in the fiscal year 2002 
conference report, our budget proposes to consolidate the $1.4 
billion under the detention trustee to provide bed space for 
the anticipated detainee population in the custody of the 
Marshals Service and the INS.
    For the Bureau of Prisons, our fiscal year 2003 budget 
seeks $348.3 million for additional prison activations and for 
the completion of construction previously authorized by 
Congress.
    Finally, following the September 11 terrorist attacks, 
Congress passed and the President signed into law legislation 
establishing the September 11 Victims Compensation Fund of 
2001. The value of approved claims through the fund is 
estimated at $5.4 billion through 2004. Our fiscal year 2003 
budget reflects $2.7 billion in estimated victim compensation 
payments. In addition, the Department's budget includes a total 
of $41 million for the administrative costs of the fund's 
special master.
    Mr. Chairman, as you well know, September 11, 2001, changed 
our Nation, redefined the mission of the Department of Justice. 
Defending our Nation and its citizens against terrorism is our 
top priority. To fulfill this mission, we are devoting all 
resources necessary to eliminate terrorist networks, prevent 
terrorist attacks, bring to justice those who kill Americans in 
the name of murderous ideologies.
    Chairman Hollings, Senator Gregg, members of the 
subcommittee, what I have outlined for you is the principal 
focus of President Bush's fiscal year 2003 budget request for 
the Department of Justice. Our request builds upon the firm 
foundation laid by Congress in the days and weeks following 
September 11, a foundation of resolve backed by resources and 
American strength married to American purpose.
    I want to thank you for your leadership and for the 
leadership of this subcommittee both in providing the 
Department critical additional funds in the wake of the 
terrorist attacks and in supporting the work that lies ahead.
    And if I may, I would like to thank the members of your 
staff, those for whom we so rarely pause to offer public 
expressions of our gratitude, Lila Helms, Jill Shapiro Long, 
Dereck Orr of the majority staff, Jim Morhard, Kevin Linskey, 
and Katherine Hennessey of the minority staff. They all work on 
an ongoing basis with Justice officials and our staff at the 
Justice Department to enhance the safety and security of the 
Nation.

                           prepared statement

    I thank you for your facilitation of this hearing and for 
your service to the American people and I want to thank them in 
the same way. I look forward to working with you on this 
project proposal and other issues, and Mr. Chairman, I thank 
you for allowing me to make this statement.
    [The statement follows:]
                  Prepared Statement of John Ashcroft
    Mr. Chairman and Members of the Subcommittee: I am both honored and 
pleased to once again appear before the members of this Subcommittee to 
present the President's budget request for the Department of Justice. 
For fiscal year 2003, the President's budget requests $30.2 billion for 
the Department of Justice, including $23.1 billion in discretionary 
funding and $7.1 billion for the Department's mandatory and fee-funded 
accounts. Included in the total amount requested is $548 million for 
Civil Service Retirement System and Federal Employees Health Benefits 
Program costs which are currently funded centrally through the U.S. 
Office of Personnel Management. The first and overriding priority of 
this budget supports the top priority of the department: to protect 
America against acts of terrorism and to bring terrorists to justice. 
The challenges we face are complex and unprecedented.
    The Department's fiscal year 2003 budget seeks $2 billion for 
program improvements and ongoing activities funded in the fiscal year 
2002 Counterterrorism Supplemental to support our number one priority. 
Resources are also requested to address several of the Department's 
other priorities, including: improving management of immigration 
services and enforcement; enhancing federal detention and incarceration 
capacity; reducing the availability of illegal drugs and supporting 
proven programs aimed at reducing drug use; providing services for the 
Nation's crime victims; addressing civil rights; providing streamlined 
resources to support state and local law enforcement; and legal 
representation and defense of U.S. interests.
  preventing and combating terrorism, including securing the nation's 
                                 border
    In response to the heinous attacks on September 11, 2001, the full 
resources of the Department of Justice, including the Federal Bureau of 
Investigation, the Immigration and Naturalization Service, the U.S. 
Attorneys offices, the U.S. Marshals Service, the Bureau of Prisons, 
the Drug Enforcement Administration and the Office of Justice Programs, 
were deployed to investigate these crimes and to assist survivors and 
victim families. In addition, to combat the threat of terrorism, I have 
directed the Department of Justice, including all 94 U.S. Attorneys' 
offices and 56 FBI field offices, to begin implementing the USA PATRIOT 
Act that was passed overwhelmingly by Congress and signed by President 
Bush. This offensive against terrorism will enable law enforcement to 
make use of new powers in intelligence gathering, criminal procedure 
and immigration violations. With these new provisions, the fight 
against terrorism will have the full force of the law while protecting 
Constitutional civil liberties.
    The world has changed dramatically since my last appearance before 
this Subcommittee. You have been instrumental in making sure that our 
government is poised both to respond to and prevent future terrorist 
attacks. I appreciate the support of this Subcommittee and that of the 
Congress in providing the necessary resources required by the 
Department of Justice to meet the challenges presented by terrorism and 
to improve the Nation's border security. The Counterterrorism 
Supplemental appropriation passed this fiscal year provided much needed 
resources to enable the Department to both prevent future attacks and 
investigate the terrorist attacks on our country. The fiscal year 2003 
budget request that I present to you today builds upon this support and 
seeks to further enhance the Department's ability to prevent and combat 
terrorism.
Border Security
    Illegal overstays of visitors and others coming temporarily into 
the United States pose a potential risk to homeland security. Overstays 
result in approximately 40 percent of individuals remaining in this 
country illegally. Currently, our Nation does not have a reliable 
system to track the entry and exit of these individuals in order to 
determine who may have overstayed. In addition, we do not have 
sufficient ability to detect, identify and locate short-term visitors 
who may pose a security risk to the United States. In the wake of 
September 11, 2001, the need is more urgent than ever to secure the 
safety of our citizens and our homeland. To secure gaps in our Nation's 
borders, we are proposing program improvements totaling $856 million 
and $187 million for ongoing activities funded in the fiscal year 2002 
Counterterrorism Supplemental appropriation.
    In addition, this budget will support an increase of over 2,200 new 
positions for INS. This request will enable the INS to deploy 
additional enforcement personnel together with advanced, state-of-the 
art technology and systems to better prevent illegal entry into the 
country, target individuals who threaten our safety, and thereby 
undermine the security of our Nation, and assist with non-citizens 
entering and exiting the United States. Components of the Border 
Security initiative include implementing a comprehensive Entry/Exit 
system, deploying force multiplying equipment, and integrating separate 
information systems to ensure timely, accurate, and complete 
enforcement data.
    Our fiscal year 2003 budget includes a total of $380 million, of 
which $362 million is new funding, to provide initial funds for a 
multi-year effort to develop a comprehensive land, sea, and air Entry/
Exit system for the United States. The new Entry/Exit system will 
provide enhanced information technology and upgraded facilities along 
our Nation's borders. This budget also increases personnel for INS to 
carry out its enforcement mission. For fiscal year 2003, we are seeking 
$141.3 million to hire 570 new Border Patrol agents and for other 
border security related increases; which would complete the addition of 
the 5,000 agents authorized by the Illegal Immigration Reform and 
Immigrant Responsibility Act of 1996 by the end of fiscal year 2003. 
This will increase the number of Border Patrol agents to a record level 
of more than 11,000 agents, more than double the level in 1993. 
Specifically, this request includes $76.3 million to hire, train, and 
deploy an additional 570 Border Patrol agents, $25 million to re-deploy 
approximately 285 Border Patrol agents to the Northern Border, $10 
million for twin engine helicopters, $2 million for a comprehensive 
study of INS law enforcement compensation, and $28 million to enhance 
INS' ENFORCE database and processing system and add biometric 
equipment.
    INS must balance its resources between its dual responsibilities of 
facilitating legal travel across our borders--tens of millions of 
people a year cross our borders--and detecting those who should not be 
allowed to enter the United States. To facilitate achievement of these 
goals in the post-September 11th world, our budget requests $85.9 
million to enhance air, sea and land ports-of-entry inspections. These 
additional resources will enable the INS to hire, train, and deploy 700 
additional inspectors to enhance security at air and sea ports-of-entry 
and 460 inspectors to enhance border security at land ports-of-entry.
    The INS Intelligence program provides strategic and tactical 
intelligence support to INS offices enforcing the provisions of the 
Immigration and Nationality Act, and assists other federal agencies in 
addressing national security issues. INS intelligence efforts also 
support coordination of anti-smuggling/terrorism strategies with the 
FBI; completion of a U.S.-Canada bilateral common threat assessment 
among all concerned agencies on border zones' vulnerabilities; and 
increased automation in the intelligence collection and analysis 
process. The fiscal year 2003 budget includes an enhancement of 78 
positions and $10 million to expand the INS intelligence program.
    In the days following the September 11th terrorist attacks on 
America, homeland security received a new and urgent emphasis within 
the law enforcement community, including the INS. To provide the INS 
with adequate resources to meet this challenge, our budget requests $6 
million to enhance INS' participation in Joint Terrorism Task Forces 
(JTTF). JTTFs are a critical component of our coordinated law 
enforcement strategy. This funding will enable INS to enhance its 
support of the FBI's investigation into the September 11th terrorist 
attacks. These task forces conduct investigations of other foreign 
threats to national security and work cooperatively with other federal 
law enforcement and intelligence agencies, placing particular emphasis 
on disrupting and dismantling terrorist cells and supporters in the 
United States by using criminal and administrative tools.
    Our budget also seeks resources for additional legal positions to 
litigate special interest cases involving issues of terrorism, foreign 
counterintelligence, national security and other sensitive matters, 
such as cases involving human rights abuses. Special interest cases 
require multiple levels of coordination throughout the government, and 
attorneys must frequently work with other law enforcement and 
intelligence agencies both inside and outside the United States.
    To effectively combat the terrorist threat that faces our Nation, 
the INS must have a sufficient physical and information technology 
infrastructure to support and protect its employees. To support our 
facility and security needs, the fiscal year 2003 budget includes an 
increase of $145 million for construction and an additional $13 million 
and 172 positions for security upgrades. The Department's construction 
request for INS will provide for the planning, design, and construction 
of INS facilities along the border. Many of the Border Patrol and 
Inspection facilities were built prior to the 1970's and cannot 
accommodate the tremendous growth in the number of agents. The 
requested resources for physical security enhancements will allow INS 
to implement security improvements at 157 locations nationwide based on 
vulnerability to terrorist attacks and general security requirements.
    Our fiscal year 2003 budget also seeks $83.4 million and 15 
positions to expand and upgrade INS computer systems, including desktop 
computers, network servers, re-engineered data communications and 
enhanced computer security. INS data communications technology has not 
kept pace with increased demand. These resources are required to 
design, build and sustain an information technology infrastructure that 
can accommodate INS' steadily increasing workload and rapidly growing 
workforce. An additional $3.7 million is requested to fund training 
needs to expand fraudulent document training, curriculum development, 
materials and incidental expenses related to the Trafficking Victims 
Protection Act of 2000.
Enhancing the FBI's Counterterrorism Capabilities
    As a result of the events of September 11, 2001, the FBI, with the 
cooperation of other Federal, state, local and international law 
enforcement, is currently conducting one of the largest criminal 
investigations in the history of the United States. Because of the 
support of this Subcommittee and that of Congress, the FBI was provided 
$745 million in the fiscal year 2002 Counterterrorism Supplemental 
appropriation for costs to respond to and investigate the September 
11th terrorist attacks, including additional resources for Trilogy (the 
FBI's information technology upgrade program), the National 
Infrastructure Protection Center, Computer Analysis Response Teams, 
intelligence production, technical programs, and other programs. Given 
that Congress must consider myriad funding priorities, Director Mueller 
and I are very grateful for these additional resources provided to the 
Bureau. The men and women of the FBI continue to be on the front line 
of our Nation's efforts against terrorism, working in concert with 
other Federal, state and local agencies to prevent additional terrorist 
attacks and to bring to justice those who commit crimes against our 
citizens and our interests. The work of the FBI is critical to winning 
this war.
    Timely and useful intelligence is key to preventing terrorist 
attacks. The FBI's efforts to identify and neutralize terrorist 
activities require a comprehensive understanding of current and 
projected terrorist threats. In order to enhance the FBI's 
counterterrorism programs, our budget seeks $411.6 million in program 
improvements, including additional resources to enhance information 
technology projects, surveillance, intelligence, investigative and 
response capabilities, the aviation program, and security. Our budget 
also reflects $238 million in funding for ongoing activities funded in 
the fiscal year 2002 Counterterrorism Supplemental appropriation.
    For information technology critical to the FBI's efforts to combat 
the threat of terrorism, our total budget request for the FBI includes 
an increase of $109.4 million to support several new and ongoing 
projects. These resources will support projects such as the FBI's 
efforts to scan and digitally store 5 million documents related to 
terrorist groups and organizations, data management and warehousing, 
collaborative capabilities, information technology support for Legal 
Attaches, continuity of operations for FBI Headquarters and offsite 
facilities, state-of-the-art video teleconferencing capabilities and 
increased staffing and funding to support FBI mainframe data center 
upgrades. Funding is also sought to perform necessary maintenance on 
enterprise-wide legacy systems, applications and the Trilogy network.
    The FBI's Information Assurance initiative will unite security 
policies, procedures, technologies, enforcement, administration, and 
training into a comprehensive proactive program. Maintaining adequate 
system security safeguards is critical. Our budget includes $48.2 
million in additional funding for this program. Our budget also seeks 
an additional $29.9 million to enhance other security programs at the 
FBI, including funds for headquarters and field personnel, security 
training and background investigations of personnel who are granted 
access to FBI information or facilities, guard services and other 
items.
    The Department's fiscal year 2003 budget requests $61.8 million in 
additional funding to enhance the FBI's surveillance capability to 
collect evidence and intelligence. These resources will enhance both 
physical and electronic surveillance capabilities and enable automated 
sharing of information collected as electronic surveillance 
intelligence and/or evidentiary material.
    Our budget also seeks $46.1 million for the FBI's aviation program 
to fund personnel, aviation assets and operational support. Resources 
are also sought to expand several critical components of the FBI's 
overall counterterrorism program, including $31.6 million to expand the 
FBI's response capabilities, $32.3 million to provide enhanced 
technical program support, $21 million to enhance the National 
Infrastructure Protection and Computer Intrusion Program's ability to 
respond to computer intrusions and threats, $7.7 million for additional 
analytical capacity throughout the FBI, and $6.4 million for the FBI's 
Strategic Information and Operations Center and the New York field 
office's operation center.
    The establishment of the Joint Terrorism Task Force (JTTF) program 
has enhanced the FBI's ability to promote a coordinated effort among 
FBI field offices and their respective counterparts in Federal, state 
and local law enforcement agencies in connection with terrorism 
investigations. Our budget seeks $15.7 million to support a total of 56 
JTTFs throughout the country. Additional resources will fund rental 
space and renovation of offsite facilities, as well as operational 
expenses, such as state and local overtime and supplies. To continue 
support for the FBI's toll-free line for collecting tips from the 
public on suspected terrorist activities, an additional $1.5 million is 
included in our budget request.
Additional Enhancements To Counterterrorism Infrastructure
    As accused terrorists are brought to justice in the Federal Court 
system, there will be a need for enhanced security measures. The United 
States Marshals Service protects the Federal Courts and ensures the 
effective operation of the judicial system. To support the heightened 
security measures at federal courthouses as a result of the September 
11th attacks, our budget seeks $34.7 million to: (1) close security 
gaps at courthouse facilities which have the greatest physical security 
deficiencies; (2) provide security equipment for new courthouses and 
those undergoing significant renovation; (3) provide additional 
security personnel for terrorist-related court proceedings; and (4) 
provide security staffing to keep pace with the opening of new 
courthouses and the creation of new judgeships. To enhance the ability 
of the U.S. Marshals Service to participate in the FBI's Joint 
Terrorism Task Force program, we are seeking $2.4 million in fiscal 
year 2003. Nine million in additional funding also is being requested 
to provide increased security and detainee staffing along the Southwest 
Border.
    Another critical element in our battle plan against the terrorist 
threat is working to develop and enhance interoperable databases and 
telecommunications systems for the Department's law enforcement 
activities. The pooling of information resources capabilities can 
greatly increase efficiency and decrease the time involved in cases. 
For these efforts, our budget seeks $60 million to continue narrowband 
investment in radio infrastructure for key areas such as New York and 
along the Northern and Southwest borders. An increase of $23 million is 
also requested to continue the development and deployment of the Joint 
Automated Booking System and a joint fingerprinting system, that 
integrates INS' IDENT fingerprinting system with the FBI's IAFIS 
system. To support additional information and anti-terrorism physical 
security measures at the Drug Enforcement Administration, we are 
requesting $24.7 million.
    The fiscal year 2003 budget request for the Department seeks $35 
million in the Attorney General's Counterterrorism Fund to reimburse 
DEA's Special Operations Division for the cost of providing 
intelligence support to the FBI and other agencies conducting 
counterterrorism activities. This funding will complement the FBI's own 
intelligence capacity by providing additional collection and analysis 
capabilities to fight terrorists. For the Department's Office of 
Intelligence Policy and Review, $2 million is requested to address an 
anticipated increase in Foreign Intelligence Surveillance Act requests. 
The Department's budget request also includes $3 million to assess the 
vulnerability of chemical facilities.
Counterterrorism Coordination in the Department of Justice
    Consistent with Section 612 of the Department's fiscal year 2002 
Appropriations Act, the President's Budget includes a proposal to 
enhance coordination of the Department's counterterrorism efforts. Our 
proposal will consolidate this coordination effort in the Office of the 
Deputy Attorney General. The budget includes a total of $2 million to 
fund a permanent cadre of well-qualified staff to support the Deputy 
Attorney General in coordinating all Department of Justice efforts to 
protect the United States against the threat of terrorism. Under the 
proposal, I have directed the Deputy Attorney General to be the 
individual responsible for coordinating all functions of the Department 
of Justice relating to national security, particularly the Department's 
efforts to combat terrorism directed against the United States. To 
assist the Deputy Attorney General in this effort, I am also 
establishing the National Security Coordination Council (NSCC) of the 
Department of Justice, which will be directed by the Deputy Attorney 
General. The NSCC will coordinate policy, resource allocation, 
operations, long-term planning and information sharing. The NSCC will 
also be a repository of expertise and a forum through which the Deputy 
Attorney General will be prepared to represent the Department in 
interagency forums. Mr. Chairman, we are committed to working with you, 
Senator Gregg and members of the Subcommittee to strengthen the 
Department's counterterrorism programs.
                      supporting victims of crime
    The World Trade Center, Pentagon, and Pennsylvania tragedies were 
moments of indefinable horror and grief for this Nation. Although no 
amount of assistance can ever begin to compensate the surviving victims 
of the September 11th tragedies or the families and loved ones, the 
Department is committed to using the resources available to help 
victims and families of those who were physically injured or killed as 
a result of the terrorist attacks on September 11th. While we can never 
undo the damage that has been done, this fund will assist thousands of 
individuals and families in rebuilding lives that were shattered by the 
indiscriminate evil of terrorism.
    Following the September 11th terrorist attacks, Congress passed and 
the President signed into law the Air Transportation Safety and System 
Stabilization Act (Act). The Act established the September 11th Victim 
Compensation Fund of 2001 (Fund) to provide a permanent and indefinite 
appropriation for making payments on approved claims to personal 
representatives of deceased individuals and those physically injured as 
a result of the terrorist-related aircraft crashes that day. The value 
of approved claims, through 2004, is estimated at $5.4 billion. Our 
fiscal year 2003 budget reflects the $2.7 billion in estimated payments 
for Victim Compensation payments. In addition, the Department's budget 
includes a total of $41 million for the administrative costs of the 
Fund's Special Master.
    For the Department's Crime Victims Fund, we are seeking $50 million 
to fully fund the Emergency Terrorism Reserve and to provide $25 
million in additional assistance for the states. The Emergency 
Terrorism Reserve may be used by the Department to respond to incidents 
of terrorism and mass violence by providing supplemental grants to 
states for victim compensation and victim assistance and by providing 
direct compensation to victims of international terrorism occurring 
abroad.
      improving management of immigration services and enforcement
    The Administration is committed to building and strengthening an 
immigration services system that ensures integrity, provides services 
accurately and efficiently, and emphasizes a culture of respect. The 
INS is tasked with upholding this commitment and ensuring that 
resources are used effectively to manage and deliver immigration 
services. Our restructuring plan for INS will create the organizational 
structure to support the President's goal of achieving a 6-month 
average processing time for all applications. Mr. Chairman, I am 
personally committed to working with you and the Members of the 
Subcommittee on the INS restructuring proposal so that we may improve 
benefits processing and strengthen enforcement of our immigration laws. 
For fiscal year 2003, our budget request seeks $40 million to begin 
implementation of the Administration's comprehensive restructuring of 
the INS. To attain the President's goal of a six-month processing time 
for all applications, we are also seeking an additional $50.5 million 
from fee collections. An additional $1.5 million is sought to enhance 
the statistical capabilities of INS' Office of Policy and Planning and 
to expand the successful Alternatives to Detention program.
    For the Executive Office of Immigration Review, the fiscal year 
2003 budget seeks an additional $10 million, including $800,000 in 
redirected resources, to coordinate with INS initiatives, which are 
anticipated to increase the Immigration Judge caseload and the Board of 
Immigration Appeals caseload by 27,800 cases.
    managing increased federal detention and incarceration capacity
    The Department of Justice is charged with the safe, secure, and 
humane confinement of detained persons awaiting trial, sentencing, 
immigration proceedings or removal from the United States. The need for 
federal detention bed space has more than doubled in the last five 
years, from 32,000 detainees in 1996 to 67,000 detainees in 2001. This 
dramatic increase has resulted in greater dependence on state and local 
governments and private contractors to provide bed space for federal 
detainees. Currently, the INS, U.S. Marshals Service and the Bureau of 
Prisons are responsible for detaining prisoners. To enhance 
coordination, manage the rising detainee population, and exercise 
financial control and efficiency in federal detention operations, the 
Office of the Detention Trustee was created in the Department of 
Justice. For fiscal year 2003, our budget proposes to consolidate $1.4 
billion under the Detention Trustee to provide bed space for the 
anticipated detainee population in the custody of the U.S. Marshals 
Service and the INS. Our budget seeks an increase of $95.6 million for 
the Department's detention programs. Total funding includes resources 
to accommodate detention space for housing INS detainees, to house U.S. 
Marshal detainees, and to fund the increase in the oversight 
capabilities of the Office of the Detention Trustee.
    For the Bureau of Prisons, our fiscal year 2003 budget seeks $348.3 
million for additional prison activation and completion of previously 
authorized construction projects. Specifically, $206 million is 
included to continue construction of a medium security facility, a 
secure female facility, and to expand three other facilities. For 
additional prison activations and an institutional population 
adjustment, $142.3 million is included in our fiscal year 2003 budget. 
This additional funding will provide resources to activate four new 
facilities, including Federal Correctional Institution (FCI)--
Glenville, West Virginia, United States Penitentiary (USP)--Big Sandy, 
Kentucky, USP-McCreary County, Kentucky, and USP-Victorville, 
California, and to expand USP Marion, Illinois and FCI Safford, 
Arizona. These facilities will add over 5,000 critically needed beds to 
reduce overcrowding.
   reducing the availability of illegal drugs and supporting proven 
                  programs aimed at reducing drug use
    Today, more than ever, drug enforcement can play a critical role in 
protecting our national security by starving the financial base of 
criminal organizations and depriving them of the drug proceeds that may 
be used to fund terrorist activities. Drugs not only weaken the fabric 
of our society, but also threaten our national security. The recent 
attacks perpetrated on our Nation illustrate the connection between 
drug trafficking and terrorist attacks. In Afghanistan, the Taliban, 
which controlled opium production and directly taxed the drug trade, 
opened its doors to Osama Bin Laden and the al Qaeda organization. Drug 
trafficking provides terrorists a steady source of resources to finance 
their operations. Our budget includes a $17.4 million resource 
reprogramming proposal, utilizing prior year resources available to 
DEA, to implement an Afghanistan Initiative, Operation Containment, 
that will employ a multi-faceted approach to identify, target, 
investigate, disrupt and dismantle transnational heroin trafficking 
organizations in Central Asia. The established link between the 
proceeds generated from the sale of Afghan heroin and terrorist 
activities makes combating heroin production in Central Asia critical 
to the security of the United States.
    The Organized Crime Drug Enforcement Task Force (OCDETF) program is 
the centerpiece of the Department's drug strategy to reduce the 
availability of drugs. OCDETF combines the talent of experienced 
federal agents and prosecutors with support from state and local law 
enforcement, thereby uniquely positioning OCDETF to conduct multiple 
coordinated investigations across the country to root out and eliminate 
all pieces of major drug organizations. For fiscal year 2003, our 
budget seeks an increase of $14.8 million through OCDETF to provide 
field support for DEA's Special Operations Division coordinated 
investigations. This funding will enhance OCDETF's ability to conduct 
complex, multi-district investigations developed from Special 
Operations Division intelligence and coordination. These resources will 
be used by DEA and the Department's Criminal Division; and will also be 
used to fund state and local overtime.
    DEA conducts financial investigations to detect and disrupt the 
international and domestic flow of illicit money. To support these 
financial investigations and enhance regulatory and cooperative and 
public-private efforts to prevent money laundering, our fiscal year 
2003 budget proposes a program improvement of $4.1 million. For fiscal 
year 2003, we are also seeking $24.6 million for DEA's Diversion 
Control program. These resources will be used to strengthen DEA's 
enforcement capabilities to prevent, detect, and investigate the 
diversion of controlled substances, particularly OxyContin. 
Increasing abuse of OxyContin has led to an increase of 
associated criminal activity.
    The Department's fiscal year 2003 budget also seeks $13 million for 
drug abuse and crime programs under the Office of Justice Programs. 
Specifically, we are seeking $4 million to expand the Arrestee Drug 
Abuse Monitoring (ADAM) program to 10 additional sites. The ADAM 
program is the only federally funded drug use prevalence program that 
directly addresses the relationship between illicit drug use and 
criminal behavior. ADAM data assist practitioners and policy makers in 
understanding, anticipating and responding to their community's 
changing drug problems. Our budget also includes $52 million for the 
Drug Courts Program, a $2 million increase, and $77 million in funding 
for the Residential Substance Abuse Treatment Program, a 10 percent 
increase in funding over fiscal year 2002.
                         advancing civil rights
    Essential to our republic is the right of every citizen, from every 
walk of life, to be treated equally under the law. This includes every 
citizen's right to vote. The Federal Government has become an active 
participant in establishing rules for the conduct of elections on 
matters ranging from voter registration to protection against 
discrimination.
    In fiscal year 2003, the Department requests $400 million for a new 
three-year program (totaling $1.2 billion) to improve state and local 
jurisdiction's voting technologies and administration, including voting 
machines, registration systems, voter education, and poll worker 
training. This new program will provide states with matching grants for 
election reform. This proposal is consistent with the recommendations 
of the National Commission on Federal Electoral Reform headed by former 
Presidents Ford and Carter. The Office of Justice Programs (OJP) will 
have primary responsibility for administering the program, in 
consultation with the Department of Commerce's National Institute of 
Standards and Technology, which will provide expertise on voluntary 
technical standards.
    Our budget seeks $2.8 million to promote effective investigation, 
prosecution, and response to hate crimes. This amount includes $1.5 
million to study the effect of hate crime legislation by examining 6 
sites that have hate crime laws and 8 with little or no such 
legislation; and $1.3 million to develop and provide hate crimes 
awareness training and technical assistance, and to disseminate 
successful program strategies. Our fiscal year 2003 budget also seeks 
$3 million for the Office of the Inspector General to address a 
statutory requirement in the USA PATRIOT Act requiring the review of 
complaints alleging abuses of civil rights and liberties, and to 
provide audit oversight for the Department's counterterrorism programs.
              enhancing the department's legal activities
    The Department of Justice is often described as the largest law 
office in the Nation. We serve as counsel for the citizens of this 
Nation and represent them in enforcing the law in the public interest. 
For fiscal year 2003, our budget seeks $32.5 million for the Civil 
Division to increase its use of automated litigation support (ALS) 
services to successfully resolve extraordinarily large and document-
intensive cases. ALS is an indispensable method of managing millions of 
pages of documents, performing electronic discovery, executing court-
ordered trial presentation systems, and generating real-time 
transcripts. In addition, to address the burgeoning defensive docket in 
United States Attorneys Offices, our budget seeks an additional $2 
million. These resources are necessary to adequately defend the 
government from unwarranted claims and to fairly resolve meritorious 
claims. Our budget requests an additional $11 million to complete the 
third and final phase of the overall telecommunications convergence 
initiative in United States Attorneys Offices throughout the Nation: 
implementing Internet Protocol telephony. This convergence will enable 
the U.S. Attorneys to encrypt all transmissions, share resources and 
use telecommunications bandwidth more effectively, and reduce overall 
operating and maintenance by establishing a common, standardized 
telecommunications infrastructure.
    For the United States Trustee Program (USTP), we are proposing an 
additional $6.3 million from fee collections. Specifically, our budget 
requests $5.8 million to enable USTP to develop systems to more 
effectively uncover material misstatements in bankruptcy schedules and 
statements of financial affairs. An increase of $500,000 is requested 
to establish a pilot program and curriculum to provide personal 
financial management instructions.
  streamlining assistance available to state and local law enforcement
    The fiscal year 2003 budget proposes a refocusing of spending 
directed toward state and local assistance. This budget refocuses and 
redirects funding toward core Federal counterterrorism prevention and 
investigations. Between last year's appropriation and next year's 
budget proposal, discretionary spending on Federal law enforcement 
grows almost 19 percent. Meanwhile, the Administration also refocuses 
and redirects state and local assistance; although funding through the 
Department of Justice decreases, the President's budget includes new 
funding for first responder preparedness through the Federal Emergency 
Management Agency.
    For fiscal year 2003, we propose a new $800 million program, the 
Justice Assistance Grants Program (JAGP), that consolidates the Local 
Law Enforcement Block Grant (LLEBG) and the Byrne Formula Grant Program 
into a single grant program under the Community Oriented Policing 
Services (COPS) program. Consequently, we are proposing to eliminate 
the LLEBG and Byrne Programs in their current form. The consolidation 
of these two programs should result in a simplified application process 
for participating state and local governments, and greater flexibility 
for local law enforcement agencies in the use of block grant funds. 
States may use these resources for statewide initiatives, technical 
assistance and training, and support for rural jurisdictions in the 
areas of enforcement, prosecution and court programs, prevention 
programs, corrections programs and treatment programs. Local funding 
may also be used for these purposes and can be combined with funding 
from other jurisdictions to form regional projects. This program also 
includes $15 million to facilitate the USA Freedom Corps by encouraging 
citizen participation in law enforcement, community safety and 
terrorism preparedness; and $60 million for the Boys and Girls Clubs.
    Also, within COPSs, we are seeking $65.6 million in targeted 
assistance to police departments. This amount includes an increase of 
$15.6 million for the Police Corps, a scholarship and training program 
designed to improve local police response to violent crime by 
increasing the number of officers on the beat with advanced education 
and training. It also includes a total of $50 million for COPS 
Technology Grants. To improve the mechanisms for ensuring state court-
based data are properly transferred to the criminal record, we are 
seeking an additional $25 million. These resources will enhance the 
capability of the FBI's National Instant Check System to provide 
immediate feedback. Our budget also seeks an increase of $6.1 million 
to expand the Internet Crimes Against Children Task Force Program by 
establishing a regional task force in at least 40 states and expanding 
capacity-building activities through research, training and technical 
assistance.
    The fiscal year 2003 budget provides over $3.2 billion for state 
and local law enforcement grant programs. However, it also prioritizes 
scarce federal resources and includes proposed reductions and 
eliminations of some of the current grant programs. Reductions are made 
primarily in the following areas: (1) Byrne Discretionary and Formula 
grants; (2) Local Law Enforcement Block Grant; and (3) State Criminal 
Alien Assistance Program.
                       other important activities
    Our budget seeks $48.5 million to enhance several items of critical 
importance to the Department. Specifically, we are seeking $36.5 
million to enhance various FBI data management and warehousing 
techniques and to provide new administrative support and financial 
systems. Additionally, $10 million is sought to begin planning and 
initial deployment of a new Departmental Financial Management System. 
This funding will provide much needed resources to address financial 
system material weaknesses cited by the Department's auditors. For the 
FBI, our budget also seeks $867,000 for the Federal Convicted Offender 
Program to manage and type federal convicted offender DNA samples, 
purchase equipment, and fund miscellaneous expenses related to this 
effort. The DNA Analysis Backlog Elimination Act of 2000 authorizes the 
FBI to collect DNA samples from individuals convicted of qualifying 
offenses. The USA PATRIOT Act of 2001 expands the list of qualifying 
offenses to include terrorism-related offenses and other crimes of 
violence.
                               conclusion
    Chairman Hollings, Senator Gregg, Members of the Subcommittee, I 
have outlined for you today the principal focus of President Bush's 
fiscal year 2003 budget request for the Department of Justice. I look 
forward to working with you on this budget proposal and other issues.
    Thank you. I would be pleased to answer any questions you might 
have.

    Senator Hollings. I thank you, General Ashcroft, for the 
outstanding work you have been doing on counterterrorism. I 
think the committee will want to help you continue your 
progress. I want to get into a couple of things there.
    I think being hardfast on law enforcement is not 
inappropriate when the enemy has infiltrated you, you do not 
know who they are and everything else like that. You have got 
to be on the side of extreme care.

                 NEED FOR SPECIAL COUNSEL IN ENRON CASE

    Let me ask about the Enron matter now. I commend you. You 
have recused yourself, not that there is a conflict of interest 
but there could be a conflict of interest, and I understand the 
same with your chief of staff and even the U.S. Attorney's 
Office for the Southern District down there in Texas. They have 
had to set themselves aside due to all kinds of contacts.
    Now the case is in the hands of our friend Larry Thompson. 
On that score, I am worried about it for the simple reason that 
he has been deputized and continues to be the Deputy Attorney 
General in charge of counterterrorism in the Department of 
Justice, which is a full-time job. Credit goes to our 
distinguished ranking member who was there and chairman this 
time last year for having the first real full hearing of the 
entire Cabinet on counterterrorism. The fact was, on September 
11, that is what we were debating, this subcommittee's 
appropriations on counterterrorism.
    But right to the point, you do not want the Department of 
Justice to go all the way through with this case, whatever the 
result is and say, well, wait a minute, the fellow that was in 
charge, he was for 20 years working with the law office that 
represented Enron and Arthur Andersen, so he does not have a 
conflict of interest but the appearance of a conflict of 
interest is still there, just like with yourself.
    I do not see how these are not extraordinary 
circumstances--you have got chief executives committing 
suicide, you have got all the evidence being shredded over 1\1/
2\ months and everything else of that kind, all of them taking 
the Fifth Amendment and what have you. You do have 
extraordinary circumstances so you have got to use the highest 
care to make sure of the impartiality. And like I said, there 
is no use to come to the end of the investigation and then say, 
well, wait a minute, this is a gentleman who worked in that law 
office, as you well know, for some 20 years.
    There should not be the least appearance of a conflict. It 
ought to be Archibald Cox or some individual of your own 
choosing, and under the law, you can appoint a Special Counsel 
and that would end any misgiving that anybody could have about 
the final report. What is your comment?
    Attorney General Ashcroft. When presented with these 
issues, I have given my duty to carry out the responsibilities 
that have been entrusted to me very careful consideration. I 
have had a very, very careful awareness of and adherence to the 
Government-wide regulations and rules regarding conflicts of 
interest and these rules set forth various relevant factors, 
including financial and personal relationships, and any 
decision on these matters, obviously, is very fact-specific.
    Based on the careful review of the applicable laws and 
regulations that apply to all Government workers and in light 
of the totality of all the circumstances, I believe that it was 
my responsibility to recuse myself.
    Senator Hollings. Right.
    Attorney General Ashcroft. Once I recuse myself, I do not 
make further judgments about the case. I do not involve myself 
in the case.
    Senator Hollings. No, but you know your Deputy Attorney 
General intimately and you work closely together. You still do, 
I take it, I hope so, on counterterrorism. You have testified 
very strongly here this morning about the efforts made in the 
Department of Justice on counterterrorism and the officer in 
charge under the law right now is that same Larry Thompson. So, 
I mean, you recused yourself, but you are working with him 
closely.
    If you had an outside individual like an Archibald Cox that 
would be at your selection, then there would be no question. I 
just hate to see all this good work done and then an accusation 
of a conflict come at the end of the road. This thing is going 
to live with us for a long time, apparently, from the effect it 
has had on the market and you can see all the different 
happenings in different committees.
    Senator Stevens and I actually recommended a select 
committee, rather than have all this duplication. Right now, 
for example, at my Commerce Committee, we are having Mr. 
Skilling and Ms. Watkins up for the second time and they will 
probably appear four more times at least on the Senate side and 
five or six more times over on the House side.
    So I think to really get to the bottom of everything and 
save time and what have you, and on behalf of the Department of 
Justice's best interests and you, the Attorney General, I 
understand that you have recused yourself, but why do you not 
recuse Thompson?
    Attorney General Ashcroft. Further judgments about this 
matter regarding other people or myself are inappropriate once 
recused. I have recused myself and withdrawn myself from this 
matter. It is my responsibility under the Government-wide 
regulations and rules and guidance to make that judgment. Once 
I have done that, I do not deal with the matter further.
    Senator Hollings. Then we can bring up Mr. Thompson. You 
are saying that he has to deal with it, is that right? You have 
given over the Attorney General's job to Larry Thompson? You 
have still got the authority under the law.
    Attorney General Ashcroft. My responsibility----
    Senator Hollings. I hear your statement, but, I mean, you 
have still got the responsibility under the law.
    Attorney General Ashcroft. I have the responsibility in 
accordance with the Government-wide rules and regulations in 
settings where I believe the totality of the circumstances 
might provide a basis for an appearance or an actual conflict 
of interest to withdraw myself, and I have done so, and having 
withdrawn myself, I will not have further involvement in this 
matter.
    Senator Hollings. We asked that Larry Thompson appear with 
you. Why did he not?
    Attorney General Ashcroft. I am not able to answer that, 
sir. I will urge Mr. Thompson, when inquired of by the 
committee, to make himself available to the committee. We want 
to work with this committee.
    Senator Hollings. I appreciate it. Let me just get into one 
other matter, then, because I hope on the first round--I am 
delighted to see the attendance that we have--to hold ourselves 
probably to 10 minutes at the most on the first go-around.

               ANTITRUST ENFORCEMENT CLEARANCE AGREEMENT

    With respect to the Department of Justice's memorandum of 
understanding with the Federal Trade Commission that came to 
our attention last month here in January, that, in essence, as 
I see it, would change jurisdiction from the FTC to the 
Antitrust Division the media mergers and the matters of 
antitrust and Federal Trade Commission conflicts of interest 
and everything else of that kind, the public interest 
particularly. The Federal Trade Commission has a broad 
jurisdiction, intentionally so, a concurrent jurisdiction in a 
sense with the antitrust laws, but it has got a broader charge 
than the Antitrust Division in respect to the public interest 
and it can head off antitrust violations and it does not get 
into the technicality, it can get into intent and everything 
else of that kind, and has worked extremely well. Why? Why is 
that being done?
    Attorney General Ashcroft. As you have appropriately 
stated, there is concurrent jurisdiction in the Federal Trade 
Commission and the Antitrust Division of the Department of 
Justice in regard to Hart-Scott-Rodino notifications of 
proposed mergers. To negotiate on each case when it comes 
before on an ad hoc basis provides a delay in the context of a 
statute, which requires rather prompt action or else there is a 
presumption that the merger is to go forward.
    We believe that the antitrust laws and the antitrust 
enforcement are very important. Let me just say that 
competition is the basis for American productivity and success 
and we think it is an arena that needs to be safeguarded and 
the allocation and decisions made here should be merit-based 
and not driven by other considerations.
    In conferring with past leaders of the Departments, both 
the Department of Justice and the Federal Trade Commission, we 
have a letter signed by seven of them that states that it would 
be helpful to allocate these resources and to make an agreement 
to allocate these resources rather than to wait for each case 
to come up, basically, to recognize the expertise that is being 
developed in working on these cases. You mentioned, I think, 
the telecommunications and media arena.
    Senator Hollings. Right.
    Attorney General Ashcroft. Over the past 5 years, for 
example, there have been 45 such cases. They have all been 
handled by the Department of Justice and there is an expertise 
there that has been assembled in the Department of Justice to 
handle these cases. Over the course of the past 10 years, I 
think the numerics are something like 154 cases handled by the 
Department of Justice with about 22 cases handled by the FTC, 
although the FTC handled small cable merger cases in local 
areas rather than the large cases.
    It seemed to make sense that these agencies get together 
and agree that where there is an expertise that has been 
developed, we could have a kind of allocation, which is 
understood and roughly divides the work, but focuses on and 
capitalizes on the capacity and expertise of these agencies in 
resolving these issues in favor of preserving and protecting 
the competitive marketplace.
    I think that that is an important aspect of making sure 
that we have vigorous and effective antitrust enforcement, and 
it is with that in mind that this idea took shape. I think I 
have answered your specific question. I do not know that I 
should go further in explaining the concept.
    Senator Hollings. I am back to the expertise within the 
intent of Congress. You are right in what you say, but the 
intent of Congress was that they have concurrent jurisdiction 
because the Federal Trade Commission does not have to prove a 
criminal act and they have broader authority. You can have a 
monopoly and not use the monopoly to thwart or damage trade, 
for example, or competition, but you could have that monopoly 
not being exercised in the public interest and that is why the 
Federal Trade Commission looks at these things.
    We in the Congress have been working with this jurisdiction 
issue. There is the intent of Congress and now you are going to 
start legislating. You are going to take it away. Under the 
proposed memorandum of agreement, there are not going to be any 
more media cases before the Federal Trade Commission. I am 
chairman of the Commerce, Space, Science, and Transportation 
Committee. We have authorizing responsibility for the Federal 
Trade Commission and they did not come running and say, wait a 
minute, they did not ask us. They did not ask anybody in 
Congress. The consumer groups come running and tell me, they 
say, they did not ask us, and when we look into it, Mr. James 
asked Mr. Simms, his law partner, whom I take it he is going 
back to practice with when he gets through with you. That does 
not look like it is up to snuff.
    Attorney General Ashcroft. May I comment on that?
    Senator Hollings. Yes, sir, please do.
    Attorney General Ashcroft. Both the leadership of the FTC 
and the leadership of the Antitrust Division initially 
conferred with past chairmen of or past directors of their 
divisions, both Republican and Democrat, to help develop this 
list as a working arrangement to, in some ways, formalize what 
has been an informalized agreement. As you mentioned, 
telecommunications and media over the last 5 years, it is 46 
major cases at the Justice Department, none at the Federal 
Trade Commission. So this is not changing things substantially, 
it is providing a framework in which these things are done more 
promptly so that the work does.
    Now, I just wanted to indicate that the conferring was 
bipartisan and with individuals who were experienced in this 
process by both the--it is my understanding, this is what I 
have been told, I was not at any of these meetings--by both the 
Chairman of the Federal Trade Commission and his predecessors, 
both Republican and Democrat, and in the predecessors to Mr. 
James in the Antitrust Division, both Republican and Democrat, 
and seven of the previous leaders in this arena have indicated 
in a letter that they believe a concept of providing this kind 
of framework, certainly not something that would make it 
impossible to adjust. As a matter of fact, it should be a 
flexible framework.
    But this framework would help expedite our capacity to work 
in these matters and to do the work that the Congress has 
assigned, and that is the spirit in which that agreement was 
developed and I think it has the potential of being helpful 
rather than--in the 30-day clock that begins running when the 
filing is initially made, sometimes over half that time period 
has been lost because a decision has not been made which agency 
is going to pursue the matter. That makes it rather short, the 
2-week interval during which a request for documentation and 
information would be generated, and I think the idea that is 
commended by the past chairmen and directors of these 
departments and is commended by this kind of framework is that 
you get better opportunity to work immediately during the 30 
days without losing time.
    Senator Hollings. As you say, we look at the people who 
really have a direct interest and who enacted the law. I have 
been with it 35 years and with that authorizing committee, 
Federal Trade Commission, I cannot find anybody in the Congress 
that says that is a good idea. I will ask that the 
distinguished Attorney General review that very closely for us.
    Senator Gregg.

                       ATTORNEY GENERAL RECUSALS

    Senator Gregg. Thank you, Mr. Chairman.
    General Ashcroft, it was not going to be the line of 
questioning I was going to pursue, but I was interested in the 
questions that the chairman asked you regarding recusal. He may 
have a valid point. I am not familiar with Mr. Thompson or his 
background involvement here, but he may have a very legitimate 
point here.
    I am wondering, I presume that when you made your decision 
to recuse yourself, it was based on the fact that when you were 
involved in Government in another role, specifically as United 
States Senator, you may have received contributions from Enron 
or you may have voted on issues which had a direct impact on 
Enron, such as issues involving the marketability of power, is 
that correct?
    Attorney General Ashcroft. I think it is clear to say that 
the totality of circumstances surrounding my responsibilities 
and my history led me to believe that in accordance with the 
guidelines in a matter as sensitive as this matter, where there 
could be criminal prosecutions that I should----
    Senator Gregg. I think your decision was a correct one. I 
would just note that I suspect if you were to apply the 
standard you applied to yourself to the Congress, we would have 
to recuse the majority of Members of Congress.
    Attorney General Ashcroft. I have thought about that, and 
without trying to give legal advice to the Congress----
    Senator Gregg. Do not.
    Attorney General Ashcroft [continuing]. I do note that----
    Senator Gregg. It is a comment. It does not need a 
reaction.
    Attorney General Ashcroft. I just would note that I have a 
unique responsibility as Attorney General to oversee criminal 
investigations, which may, in the eyes of some and certainly in 
the calculations of others, make a difference.
    Senator Gregg. I understand the difference there.
    I wanted to follow up, though, on one of the issues 
involving terrorism, and I appreciate the courtesy you showed 
this committee in acknowledging our efforts in this area under 
the chairman's and my efforts. Other members of this committee 
have been extremely involved. Senator Mikulski has been 
extraordinarily involved in this issue.

                    TRANSFER OF NDPO AND ODP TO FEMA

    We have tried to develop a variety of different efforts to 
support the fight against terrorism and most of it was done 
before 9/11. One of the decisions we made early on was that we 
needed one-stop shopping for local and State officials to be 
able to come to the Federal Government and find out where to 
go, what to do, and how to get information and how to get 
support for their people, and we started something called the 
NDPO, which unfortunately withered on the vine at FBI because I 
do not think the FBI wanted to do it. Then the responsibility 
of NDPO was taken over by OJP.
    The question I have for you is, when a crisis occurs, and I 
asked you this question when we had our joint hearing back a 
few months ago, back 1 year ago----
    Attorney General Ashcroft. I hope I can remember my answer.
    Senator Gregg. I remember your answer, and I am sure it 
will be the same today.
    Attorney General Ashcroft. I am afraid you do.
    Senator Gregg. When a crisis occurs, who is responsible at 
the site, at the event?
    Attorney General Ashcroft. It is our understanding, and we 
believe it is the case that the FBI is responsible for crisis 
management.
    Senator Gregg. That is correct.
    Attorney General Ashcroft. For consequence management, 
which is once the site has been secured and for things like the 
investigative purposes, consequence management moves to other 
individuals.
    Senator Gregg. I guess the follow-up to that question is 
this. If the FBI is going to be on site and is under--as you 
know, this committee directed that every State develop a 
statewide domestic preparedness plan. I think we have received 
almost every State in now with a----
    Attorney General Ashcroft. We have about 46 States that 
have submitted their plans.
    Senator Gregg. And that was as a result of an initiative 
out of this committee. One of the things we wanted in that plan 
was coordination with the Federal Government, and I believe 
this is primarily accomplished through the FBI. If the FBI is 
on site, in charge, and is going to be in a command position 
over the resources that arrive once the disaster has exceeded 
local capabilities recognizing that the first group on the 
ground is going to be the first responders--the local police, 
fire, and medical--should these people not have gone through 
the Department of Justice training programs or a process which 
gave them entree into the Department of Justice versus some 
other agency?
    Attorney General Ashcroft. Well, that is--we certainly 
believe that the Department of Justice will continue to do a 
lot to train and we would expect that the nexus between our FBI 
presence in crisis management and those who are at the scene 
would be a well-developed relationship. I believe you may be 
headed toward a question about focusing some of these resources 
in another agency, and the President has made the decision that 
integrating some of those resources in FEMA would provide the 
right kind of cooperating continuity of people who work with 
first responders. There are different views on that.
    Senator Gregg. I said OJP before. I meant ODP. But the 
issue is, what is the role here of FEMA? What is the role of 
ODP? What is the role of FBI in the first responder training 
initiatives? To step back even further, again at the initiative 
of this committee, we set up five training sites, which have 
turned out to be superb. I think they are doing a superb job. 
Eighty thousand people have gone through those, first 
responders. These training centers have all been under the 
direction of ODP. How long did it take us to get those sites up 
and running and get ODP orchestrated in a way that it was able 
to effectively run people through those different training 
exercises? You were not there then, so you may not recall.
    Attorney General Ashcroft. It took some time, and I think 
that there has been great value in the training and that value 
has been understood and is appreciated. So while I support the 
administration's position of moving this matter to FEMA, I do 
not have to repudiate the fact that much of what you have done 
and what these hard-working individuals have done has been a 
great success. I think you are correct in characterizing the 
training as having been very valuable and the development of 
the plans by the States as being very constructive. So much 
work has been done that has been successful.
    Senator Gregg. I think it almost took us 2 years to get 
this thing up and running, and I am just wondering if, when we 
transfer it over to FEMA, we are going to see a significant 
disruption in their program. FEMA is not a grants organization. 
It is a response organization. It has never handled grants and 
it has never handled the management of this type of a grant 
structure. I am just wondering if you or anybody in your office 
has made an evaluation as to how much time it is going to take 
to reorganize this thing at FEMA period and what are we talking 
about in terms of a gap as a result of this transfer?
    Attorney General Ashcroft. I know that there are transition 
plans in terms of transferring the responsibilities in funding 
and it is thought that there would be a lot of transition of 
personnel and I think it is----
    Senator Gregg. They have already sent letters to people at 
Justice asking them what they are doing and when they are 
coming to FEMA, have they not?
    Attorney General Ashcroft. I have not seen such letters, 
but I understand that there is an expectation that people will 
move and that would minimize any kind of disruption. But I do 
not know of any study that has evaluated the transfer for 
purposes of finding out what kind of gaps would be developed.

                       DECISION ON FEMA TRANSFERS

    Senator Gregg. My time is about up, but let me ask you one 
last question on this because we worked very hard to get this 
working right and we have got it working right and now we are 
taking the chairs and we are moving them around the deck. Maybe 
it is going to work better as a result of it. But I have not 
necessarily been convinced of this, although I give the benefit 
of the doubt to the administration because you have got the 
final call on these and this is an issue of such significance.
    But can you give us a little background as to what 
Justice's position was in the debates leading up to this 
decision? Did you agree with the FEMA decision?
    Attorney General Ashcroft. You know, when the President 
asked me to be the Attorney General of the United States he 
asked that I advise him, but he asked that I advise him 
privately and I think it would be inappropriate for me to start 
down the road----
    Senator Gregg. Well, what advice did you give to FEMA?
    Attorney General Ashcroft. Pardon?
    Senator Gregg. What advice did you give to FEMA? I do not 
ask you for the advice you gave the President. I know that that 
is----
    Attorney General Ashcroft. In handling these issues, do the 
very best you can. This is very important.
    And now that people are focused on it--as you well know, 
very few people had your sensitivity to this issue of 
terrorism, and prior to September 11, I think we only had four 
States that had submitted plans and we had asked for plans but 
States had not made this a priority. There are others, 
obviously, now. I think the rest of the country has arrived 
where you have been for some time in understanding the urgency 
of this. So we have made a lot of progress recently and will 
continue to make progress and some of the grants are now being 
made, which I would expect to continue to be made.
    Senator Gregg. I appreciate those gracious remarks and with 
those I will certainly stop asking you questions.
    Senator Hollings. Senator Mikulski.

                        FIRST RESPONDERS FUNDING

    Senator Mikulski. Thank you very much, Mr. Chairman and 
Senator Gregg and, of course, the Attorney General.
    Senator Gregg and Mr. Chairman, as you know, I chair the 
subcommittee that funds FEMA. I, too, want to very much support 
the administration in its efforts on homeland security. I met 
with Governor Tom Ridge and Joe Allbaugh from FEMA exactly on 
this transfer. It is my position that I do not want to poach on 
this subcommittee or on the Justice Department but would hope 
there could be some type of discussion on this.
    Tomorrow, I will be holding a hearing on FEMA and its 
preparedness for the future and also this particular matter, 
because I want to be sure that FEMA is prepared, just generally 
in its consequence management responsibility, that we do the 
best job for the first responders, who are police and fire, and 
at the same time that we do not raid the money in our COPS 
program to fund the Office of Domestic Preparedness.
    Colleagues, I invite you to come to the hearing tomorrow, 
whether you are on the subcommittee or not, because, one, I 
value you, and also, Senator Gregg, when you chaired this 
committee, your leadership was really commendable on the 
counterterrorism. You did get momentum, organization, and 
money, I believe, into the ODP. So I think there is a lot of 
conversation that needs to go on with Governor Tom Ridge, with 
us, with other representatives in the administration.
    Again, my concern is, what is the best support that we can 
give to the first responders? What is the best way to do that? 
And at the same time--those are organizational issues--I am 
deeply troubled that in looking at the COPS on the beat--I will 
call it the COPS on the beat--program that there have been 
reductions in universal hiring, the schools program, the COPS 
technology, and others to move it over to ODP.
    Mr. Attorney General, am I right in that assessment? Let us 
join together here, because I am not into--before I get it, I 
think we have got a lot of talking to do, or if I get it at 
all. I am not interested in what subcommittee or in what 
agency. What I am interested in is the empowerment of the first 
responders.
    But Mr. Attorney General, in all of this talk of 
reorganization and consolidation, are we cutting the COPS 
program to fund ODP and move it over as there is a possibility 
of transition to FEMA, or have I misread the appropriations?
    Attorney General Ashcroft. I think it would be unfair to 
say that the transfer, the administration's transfer of ODP to 
FEMA is based on a cut in the COPS program. First of all, let 
me say how much I appreciate your goal-oriented approach to the 
ODP matter. Frankly, I support the administration's move and I 
think it is clear that we need to find the way that would best 
serve those first responders. You have characterized that 
wonderfully.
    Now, the COPS program has been a miraculous success. It is 
one of those things that Congress hopes will happen when it 
sets up a program. It was designed to provide funding for 
100,000 new police officers. I think funding was eventually 
provided for up to 111,000 new police officers. The police 
officers were to be funded for a period of time during which a 
local agency would have the option of understanding how 
valuable the additional police presence would be. My staff 
tells me that at the end of these police exposures as a result 
of Federal funding, 92 percent of the police forces then 
continue these officers because they have understood the value 
demonstrated by the presence of these officers in the 
community.
    Now, what is happening is that this program has succeeded--
--

                       REDUCTION OF COPS PROGRAM

    Senator Mikulski. Mr. Attorney General, I do not mean to 
interrupt you. I am not trying to be brusque. According to the 
analysis that I got, COPS is cut by almost 80 percent, ending 
the police hiring program, the COPS in school program, cutting 
the COPS technology program by two-thirds. Are those factual 
statements or has my briefing material been incorrect?
    Attorney General Ashcroft. I think what we have 
demonstrated here is that the program has succeeded in getting 
the number of cops that were anticipated and it will continue 
to pay those who have been hired until their term is finished, 
but the objective of the program having been met, there is no 
further funding for additional hirings beyond 100,000 in this 
area.

                       ROLES IN CRISIS MANAGEMENT

    Senator Mikulski. I see. I would like to switch gears now 
to an issue raised by Senator Gregg, the whole issue of who is 
in charge. In our marathon hearings of over 3 days of hearings 
in terms of our preparedness on the issue of counterterrorism, 
the issue of who is in charge came up. I think we really need 
to clarify that, Mr. Attorney General, because it is true FBI 
is crisis and FEMA is consequence, but at a local response, it 
is often the mayor and his or her local police chief or fire 
chief that are in charge at the scene. When the FBI arrives, it 
is not to manage the crisis nor the coordination of the 
agencies for evacuation, medical treatment, et cetera, it is to 
treat it as a crime scene, and that has also resulted, it 
seemed in both--well, certainly in the anthrax situation--a lot 
of bumping into each other over what was the primary 
responsibility, the management of the public health incident or 
treating it as a crime scene.
    Could you tell me, what is the FBI's role in crisis 
management or is it really to be law enforcement and to treat 
it as a crime scene, looking for evidence for future 
prosecution against these thugs, and we feel both very 
passionate about these despicable attacks, but do you see where 
I am? The mayor thinks he is in charge.
    Attorney General Ashcroft. First of all, we want to work 
cooperatively with everyone regardless of who is in charge, but 
I think it is important. You raise a very important issue, and 
I would indicate to you that perhaps of greatest importance is 
that the first thing we want to do when the FBI has a 
responsibility for crisis management is to prevent the next 
attack. Prevention is our first priority. It misstates or 
misunderstands our priority to think that prosecution is our 
first priority.
    Very frequently, events that are terrorist-related are not 
isolated. We learned that painfully in the September 11 
disaster, when, as a matter of fact, some American citizens who 
were flying on the last plane, which landed on Pennsylvania 
soil instead of Pennsylvania Avenue, they took the matter into 
their own hands.
    The first responsibility of the FBI is to learn what can be 
learned and try to determine whether there is some other part 
of this----
    Senator Mikulski. If I have got some time here, let us take 
the anthrax situation. Let us take, whether it was at Brentwood 
or whether it was here with us, the FBI arrives on the scene. 
The CDC arrives on the scene. The Capitol Police arrive on the 
scene. We are leaving the scene. A lot is going on here.
    Now, when the FBI arrived, did they evaluate, in looking at 
their situation, did they say, our job then is to prevent the 
next anthrax attack? What did the FBI do there and what did the 
FBI do in New York? Was it looking to prevention? I am sure 
there was an international alert and all of those things, but 
do you see my point? What do they do when they arrive at the 
scene?
    Attorney General Ashcroft. Well, they try to secure the 
scene and part of that securing the scene is to try and make 
sure that we do not have additional people put in jeopardy, to 
try and learn if there is additional explosives to go off, 
whether there are charges placed or other things----
    Senator Mikulski. Oh, you are in charge of the scene?
    Attorney General Ashcroft. The FBI has a crisis management 
responsibility. Until the scene is secured in that respect, the 
FBI has that responsibility.
    Senator Mikulski. Does it override a mayor and the police 
and fire chief?
    Attorney General Ashcroft. We believe that the FBI manages 
the scene during the time of crisis, and we do not override but 
we work with and help coordinate these efforts.
    Senator Mikulski. Do you see my point?
    Senator Hollings. I understand it.
    Senator Mikulski. I appreciate the Attorney General, but I 
think the FBI has a very mixed role here, and an honorable 
role, so we are not disputing that. I do believe that 
prevention, the FBI's role in prevention is absolutely 
critical. I believe its expertise in explosives and other 
things are absolutely crucial. Its international networks, et 
cetera, are crucial. But it is also my observation that it is 
the local executive and their first responders that are really 
the initial being in charge. So we need a lot to talk about, 
and Mr. Attorney General, we also look forward to talking with 
you about the FBI, its preparedness in order to protect us.
    I think my time is expired, but I really would like to 
thank my colleagues. Our hearing tomorrow is in the morning and 
we would invite you to be as vigorous as you want in the FEMA 
questioning.
    Senator Hollings. We thank you, Senator, for your 
leadership and understanding of the duplicity here.
    Senator Reed.

                  LIBERIAN DEFERRED ENFORCED DEPARTURE

    Senator Reed. Thank you very much, Mr. Chairman. Thank you, 
Mr. Attorney General.
    Let me first thank you and commend you for your treatment 
of the Liberian community in the United States. Last September, 
at the direction of the President, you extended DED, deferred 
enforced departure, for these people. We have a large 
population of Liberians in Rhode Island, and as you well know, 
for 10 years now, they have been in limbo. They came here with 
temporary protective status. That has been revoked. Now you 
have allowed them to stay. And as you are aware, I am sure, the 
last 2 weeks have seen another turn for the worse in Liberia 
with attacks on the capital and chaos.
    I would like to work for a longer-term solution so that 
every year, these people do not wait until the last hour and 
you and the President have to step in and defer their 
departure. I hope I could work with you on that, Mr. Attorney 
General, and I wonder if you might give us some comments on 
your perspective at the moment on the Liberian situation.
    Attorney General Ashcroft. First of all, let me commend you 
for your sensitivity to this problem. The compounding 
difficulties, which are a result of recent developments do not 
make the situation any easier. The current designation of the 
Liberian deferred enforced departure designation expires on 
September 29 of this year, and prior to that date, the 
Immigration and Naturalization Service must coordinate with our 
Department of Justice, with the Attorney General's office, with 
the National Security Council and the Department of State to 
determine whether or not we should further extend. I can 
imagine that it is very difficult for individuals to look down 
into the future and not know whether there is going to be an 
extension or not.
    I would be very happy to confer with you about any attempt 
that you wanted to make, and I understand that you have filed 
bills to help resolve this. I guess that another bill has been 
filed in the House. Has Congressman Kennedy done so?
    Senator Reed. That is right.
    Attorney General Ashcroft. I would be happy to confer with 
you about those measures. The situation obviously is chronic. 
It is not something that just has arisen and has gone away. It 
is a long-term situation and it is one which, if something is 
not done on the long term, we are going to have to keep dealing 
with it on an interim and short-term basis.

                        NICS--GUN SHOW LOOPHOLES

    Senator Reed. Thank you, Mr. Attorney General. Let me turn 
now to another issue with respect to the war on terrorism. 
After September 11, you sent to the Hill numerous pieces of 
legislation designed to give you the full panoply of authority 
to preempt and prevent terrorist attacks. But from my 
standpoint, there was one glaring omission and that was the 
failure to recommend the closing of the gun show loophole.
    As you well know, in many parts of this country, unless the 
State has a background check law, a private seller at a gun 
show is not forced or required to conduct any type of 
background check on a potential purchaser, and this is not just 
an academic situation. In September of last year in Detroit, 
Ali Boumelhem was convicted of illegally obtaining weapons 
which he shipped to Lebanon, apparently for the benefit of the 
Hezbollah. He was using his brother to buy weapons from a 
licensed dealer because he was a felon and could not survive a 
thorough background check. It turns out that prior to 1998, he 
would buy the weapons himself, simply lie about his felony, and 
since there was not a NICS check, he got away with it.
    In addition to that, there have been reports that last 
November, Conor Claxton, a man accused of being a member of the 
Irish Republican Army, testified in Federal court in Fort 
Lauderdale that he and his associates had gone to south Florida 
gun shows to buy thousands of dollars worth of handguns, 
rifles, and high-powered ammunition to smuggle to Northern 
Island.
    On October 30 in Texas, Mohammad Navid Asrar, a Pakistani, 
pleaded guilty to immigration charges and illegal possession of 
ammunition and authorities said that in the last 7 years, Mr. 
Asrar had bought several weapons at gun shows, including 
handguns and rifles. I do not know if he bought them from a 
licensed dealer or a private dealer to be exact. He is 
suspected to have links to al Qaeda.
    So this is not an academic exercise. As you well know, too, 
we have found in the safe houses in Afghanistan manuals that 
instruct terrorists to exploit our lax gun laws, and so I would 
hope that we could deal with this issue promptly as we have 
dealt with so many others by closing the gun show loophole in a 
comprehensive way and I wonder if you could give me your 
thoughts on that.
    Attorney General Ashcroft. First of all, I agree with you 
that we need to make sure that we keep the guns out of the 
hands of these individuals who would terrorize and disrupt our 
freedom. In the event that the Congress makes changes in that 
respect, I will enforce those changes substantially.
    I have taken steps on my own to direct better enforcement 
of our laws which prohibit the acquisition of guns by illegal 
aliens. I have directed in the NICS system that the immediate 
determination rate be improved so that we will improve our 
accuracy to ensure that prohibited persons, including 
prohibited aliens, do not receive firearms in violation of the 
law. I requested that the FBI send all non-citizen firearm 
purchase requests to the INS Law Enforcement Support Center to 
check against INS databases. The FBI expects this process to be 
fully automated by late fiscal year 2002, so sometime close to 
fall. All non-citizen checks will be delayed until all the INS 
systems are queried and the responses evaluated by the FBI so 
that we do not have people falling through the cracks. The FBI 
estimates that approximately 3 percent of the incoming call 
volume will be sent through this procedure of special checks 
with the INS. Only NICS checks for non-citizens will be 
affected by this process, not other NICS checks.
    In addition, I would cite two improvements that are made, 
not to say that others could not be made, but on June 28, I 
directed the FBI to increase to the fullest extent practicable 
the percentage of NICS checks resulting in an immediate 
response of ``proceed'' or ``deny,'' because if there is too 
much lag, it is just a ``proceed'' that comes as a result of no 
action.
    In September, the FBI implemented an enhancement to the 
NICS system, a logarithm that filters out false positive hits 
and records erroneously matched records, pardon me, erroneously 
matched to descriptive data of the purchaser against the NICS 
database. As a result, the NICS immediate determination rate 
has increased by 5 percent so that we do not have an absence of 
determination, which results in an inappropriate authorization.
    So I think this is a challenge and one that we need to work 
on and I am doing administratively what I believe we can do to 
keep the guns out of the hands of those prohibited aliens.
    Senator Reed. Mr. Attorney General, if I understand the 
system, if one was a non-citizen, approached a private seller 
at a gun show in a State without a background check, none of 
these provisions would be triggered at all?
    Attorney General Ashcroft. If the person is not a federally 
licensed vendor, you are correct.
    Senator Reed. And that is the whole purpose of the gun show 
loophole bill, to apply to these non-federally licensed 
vendors, so----
    Attorney General Ashcroft. Licensed vendors at gun shows 
are already covered.
    Senator Reed. I commend you for your enhancement of the 
licensed dealers. The hole, the vulnerability, the gap which 
this very, very astute and ruthless terrorist organization 
looked to and tried to exploit is the non-licensed dealers.
    Attorney General Ashcroft. The President supports closing, 
I believe, the gun show loophole as you describe it.
    Senator Reed. So you would support legislation that would 
close the gun show loophole?
    Attorney General Ashcroft. This administration does support 
closing the gun show loophole.
    Senator Reed. Would you send a proposal up here? I already 
have a very good proposal, but you might consider looking at 
it.
    Attorney General Ashcroft. Thank you.
    Senator Reed. Thank you, Mr. Attorney General. One more 
issue with respect to this whole area, because I believe it is 
an important one. I believe you, from your response, obviously 
understand how important it is.

                             NICS CHECKLIST

    After September 11, I met with some officials from the 
Department of Justice and the Bureau of Alcohol, Tobacco and 
Firearms. They indicated to me that immediately after September 
11, the audit log of approved gun sales was checked under the 
NICS system with the Government's terrorist watch list. That 
also was reported in the New York Times. And so it was clear 
that in the wake of the tremendous crisis, in the wake of 
looking everywhere for possible terrorists and terrorist 
attacks, these NICS records were deemed to be vitally important 
to be looked at.
    But you intervened shortly thereafter to prohibit any type 
of comparison of terrorist watch lists and NICS records. You 
indicated your interpretation of the law that such a comparison 
was not appropriate. I will disagree on that issue, but it 
raises a fundamental question.
    Again, in the space of all of these proposals to 
aggressively attack terrorism, you did not send a proposal up 
here to ask Congress to clarify the use of the NICS list in 
comparison with the terrorist watch list. Would you be in favor 
of doing that? I know Senator Schumer and I are sponsoring 
legislation to affect that or clarify the situation.
    Attorney General Ashcroft. May I just clarify a moment what 
I believe happened?
    Senator Reed. Yes, please.
    Attorney General Ashcroft. At the request of the Bureau of 
Alcohol, Tobacco and Firearms, ATF, about 180-some names were 
checked against the NICS audit log, which includes information 
about approved gun transfers. The counsel at the FBI developed 
reservations about that in light of his belief, which I believe 
to be appropriate, that the law prohibits the use of NICS 
records for anything other than auditing the NICS system with 
one exception. If in auditing the NICS system you detect a 
violation of the law, that can be referred for prosecution.
    If that law is to be changed, I believe that it will have 
to be changed statutorily. And in the event that it is changed 
statutorily, we would have continued--were it to be changed, we 
would continue on a course that had originally been started but 
was withdrawn when counsel for the FBI decided that it had not 
proceeded appropriately.
    It is my understanding that I intervened in that setting. 
It is my understanding that counsel for the FBI said, wait a 
second, we are outside the limits of our authority and we are 
in a prohibited area in accordance with the law which was 
enacted relating to NICS.
    Senator Reed. Thank you, General, for clarifying the 
situation, but as I understand the situation now, the operative 
rule is that these lists cannot be compared--the NICS list 
cannot be compared with a terror watch list. Is that the 
operative rule today, the law?
    Attorney General Ashcroft. When the NICS process is made, 
checking whether or not to issue a gun, the NICS system can 
inventory databases to find out if the individuals are 
ineligible. But any NICS record that is maintained is not 
eligible after that point for subsequent cross-reference to 
other investigative efforts.
    Senator Reed. Just a final point to clarify my 
understanding. You said in your response that the ATF had 
requested access to the NICS list to check some type of watch 
list, that you did not intervene, but that the counsel for the 
FBI intervened and stopped that process so there was no cross-
checking of lists. Am I led to believe that if----
    Attorney General Ashcroft. I think there may have been some 
cross-checking done----
    Senator Reed. Right, but it was terminated----
    Attorney General Ashcroft. It was terminated----
    Senator Reed [continuing]. Before it was complete.
    Attorney General Ashcroft. That is correct, and I would be 
corrected if my staff were to tell me that I had intervened, 
but I thought that the FBI counsel----
    Senator Reed. No. No. Mr. Attorney General, I do not want 
to leave that suggestion if it is not supported by the facts. 
The point I want to establish, I want to understand what the 
law is today because you seemed to imply in your response that 
except for the inhibitions of the FBI general counsel, this 
process would have continued, and then I thought I heard you 
say----
    Attorney General Ashcroft. No. No. I agreed with his 
judgment on the statute.
    Senator Reed. Okay.
    Attorney General Ashcroft. I need to clarify one other 
thing----
    Senator Reed. Yes, Mr. Attorney General?
    Attorney General Ashcroft [continuing]. Which my staff is 
helping me on this detail. Denials in the NICS system are 
available for----
    Senator Reed. These are the approved purchases we are 
talking about?
    Attorney General Ashcroft. It is approved purchases, and 
persons who are denied and subject to prosecution for 
attempting to purchase a gun illegally.
    Senator Reed. Again, I think our exchange at least suggests 
an ambiguity in this issue which might require legislative 
correction, and again, your support for such would be 
appreciated.
    Attorney General Ashcroft. Thank you.
    Senator Reed. Thank you very much, General.
    Senator Hollings. I am delighted to recognize our former 
chairman, Senator Domenici.

                   COUNTERTERRORISM RESPONSIBILITIES

    Senator Domenici. Thank you very much, Mr. Chairman.
    First, I want to say to the Attorney General, in this new 
war we have, the war on terrorism, you have a very big job and 
the Justice Department has a lot of responsibility. I commend 
you for the way you have handled the job so far and, hopefully, 
you will remain vigilant and things will continue to break our 
way under your leadership.
    This subcommittee has a lot to do with the success of your 
office in the war on terrorism. People talk about how we are 
going to engage America in this war, and right here at this 
table in this subcommittee, when we finally write up this 
appropriation bill, we will have a lot to do with how we are 
going to engage ourselves in this war.
    While that is going on, there are a lot of programs that 
are part of the great American ongoing scene that you have to 
fund and operate. I have at least 8 or 10 that intrigue me and 
that I am interested in, some of them having New Mexico 
impacts. I am not sure I will get them all asked. If I do not, 
I will bundle them up and submit them to you and would ask that 
you submit your answers to the committee in whatever the 
chairman says, 10 days, 2 weeks, whatever is his requirement.
    Attorney General Ashcroft. We will try and be very prompt.

                          MENTAL HEALTH COURTS

    Senator Domenici. I want to quickly cover mental health 
courts and just say to you that we are experimenting across the 
land with a very small program, $4 million, to set up mental 
health courts. It is only for misdemeanors, but I think people 
would be shocked in this country if they knew that the jails of 
our cities and counties house more mentally ill people than do 
our hospitals or institutions that we have set up in an effort 
to help the mentally ill. There are more of them in our jails, 
in our county jails, in particular, than there are in our 
hospitals, which is a rather frightening approach indicating 
that America has got some resources that it ought to put in the 
right places.
    We started with mental health courts and I would like to 
ask you if you would have your staff give you a quick briefing 
on the mental health courts and ask if you could see your way 
clear to support them. They are new. They will handle 
misdemeanor cases. What happens is the entire framework of this 
small court system, of this new mental health court program, 
gears itself to the problems of misdemeanors of mentally ill 
people. There is a special way to treat them, a certain kind of 
help that is available. I think it is a very small amount of 
funding to put up, even though you are burdened with many 
programs, to see if we cannot do better in this area. Would you 
comment on that, please?
    Attorney General Ashcroft. First of all, I am very pleased 
to ask my staff for an additional briefing on this matter. One 
of the things that is a responsibility of our judicial system 
is to try not just to punish the offender, but to prevent 
future difficulties. In remediating offenses of those who are 
mentally ill, sometimes the close supervision that comes in a 
so-called mental health court setting can be valuable. I 
appreciate your mentioning it to me and will ask for additional 
information in accordance with your request from those who are 
responsible in the Department for these issues.

                            VAWA--NEW MEXICO

    Senator Domenici. I thank you very much. Now on behalf of 
the State of New Mexico, I want to ask you--I will submit this 
narrative also so I will not have to use the time of the 
subcommittee, but New Mexico has been denied funding in its 
efforts with reference to violence against women. We have an 
office, like most States do, with reference to violence against 
women. It turns out that New Mexico's statute, which is 
supposed to enable us to receive the money, is not written 
exactly as your lawyers think it should be written. Therefore, 
New Mexico is being denied its grant because we have not met 
the statute properly and have not passed legislation that puts 
us in a position to qualify.
    I think the denial under those circumstances, especially 
since the grant was given heretofore with the same facts, it is 
more than we ought to take as a State. I would ask you if you 
would consider it a good faith effort, and if you would, give 
New Mexico a 1-year waiver so they might proceed and not lose 
the money while they get together with the State legislature 
and attempt to rectify the statutory shortcoming.
    Attorney General Ashcroft. I am aware of this unfortunate 
situation. It is my understanding that the State legislature 
recently passed domestic violence legislation necessary to 
comply, and if they have not, that is another situation. But it 
would be very pleasing to be able to rectify this, and absent 
their having done so, I will consider your request.
    Senator Domenici. I believe you will find that they have 
not rectified it.
    Attorney General Ashcroft. They have not.
    Senator Domenici. They are out of session. They do not come 
back in until a call and there will not be a call this year. I 
think we really ought not be left without the money, and if you 
would take a look into this situation, we would appreciate it.
    Attorney General Ashcroft. Thank you.

                RADIATION EXPOSURE COMPENSATION PROGRAM

    Senator Domenici. Thank you very much. You also have 
another area, just to recognize the diversity of what you do, a 
radiation exposure compensation program.
    Attorney General Ashcroft. Yes.
    Senator Domenici. Now, this is a very serious program. 
Nobody wanted it at the beginning because it cost so much money 
that subcommittees asked why they should be charged with those 
large amounts of money when the budgeteers are not giving us 
enough, nor are the appropriations chairmen giving us enough 
money. But we have, one way or another, finally set this 
program where it is sailing along. We had a very disgraceful 
situation, as you probably know, where certain recipients, 
entitlees, were walking around with IOUs in today's world, 
literally an IOU from the Federal Government saying, we ran out 
of money but we owe you as compensation under these particular 
radiation exposure statutes.
    I have a series of questions, following our attempt to set 
this program straight with an amendment that I was privileged 
to offer. I would ask you, if you can, for the record, to 
submit to us information on whether all the IOUs have been 
paid, for instance. Would you break down a category on the 
number of claims paid State by State? There are about eight or 
nine questions so that we will know that you are focusing on 
the program, and you are getting on with spending the money 
that is there.
    You should know and the Senators should know, that after 
all of this effort, we do have plenty of money because we have 
open-ended it out of frustration. Since we do not know what the 
amount is, we have said, as much money as you need to pay IOUs. 
Do you have any observations regarding the program? In any 
event, will you answer our questions so we will know the status 
of the program?
    Attorney General Ashcroft. I will answer your questions, 
Senator, and my observation is that IOUs are a one-way street. 
I do not think the Federal Government, when it comes time April 
15, likes to get an IOU from you, so when we have to pay our 
bills, we ought to give.
    I would add that the enactment of the National Defense 
Authorization Act for Fiscal Year 2002 ensures that funding 
will be available to pay the claims----
    Senator Domenici. That is right.
    Attorney General Ashcroft [continuing]. Including $172 
million in fiscal year 2002 and $143 million in fiscal year 
2003. Our estimates, we believe that these amounts will be 
sufficient to ensure that the Government actually pays the 
meritorious claims of Americans who lost their health, and in 
some cases, whose lives were lost.
    I will be happy to receive the list of specific questions 
and to make written responses to them. I think we are making 
great progress, not as a result of any great work by the 
Department, but the Congress stepped up to the plate here and 
provided a basis for us to do this in a far better way.
    Senator Domenici. I thank you very much, and I thank the 
Senators here who helped when that amendment was offered on the 
defense authorization bill and everybody supported getting the 
IOUs paid. It seemed to be a situation you would not like to go 
home and answer to your constituents. I told them I would never 
come back to their area until it was fixed. It was fixed, and I 
went back to see them.

                       SANTA TERESA PORT OF ENTRY

    IOUs have left the scene.
    I have two other questions with reference to ports of entry 
in New Mexico that I will just raise briefly with you. We have 
a little port of entry called Columbus. It desperately needs to 
be open all day and all night because it is the only port in 
that area that can handle that kind of a commercial load. We 
need somebody to look at when you are going to be able to 
provide the additional personnel needed for this port to do its 
job.
    We have a brand new port called Santa Teresa, which I am 
stating so that your staff will know of my concerns. It has a 
similar problem. It is underfunded and they have to cut back on 
their services because we do not have enough staff to keep it 
open.
    I might say to my fellow Senators, when the United States 
of America declares that we are going on alert, we all wonder, 
what does that mean? I can tell you, with reference to ports of 
entry, it means that they clamp down tremendously on those 
going through. As a result, if you do not give them more 
personnel, the lines get enormous and the backlogs get extreme 
because we are on alert and we are checking the cars and trucks 
more carefully than we would otherwise.
    But nobody recognizes the problem they have with money, and 
I am asking in this regard that you take a look. These ports 
are really doing their job with way too little money in terms 
of the personnel they need. Do you have an observation or 
comment regarding either of these two ports?
    Attorney General Ashcroft. Well, I spent some time on the 
Southwest border, particularly in the El Paso sector and over 
to Santa Teresa, which is--and we are pleased that we have that 
facility there and it is an exemplary facility and there are 
hard-working people there, but there is no question that it is 
stressed. Inspectors from the El Paso point of entry have been 
detailed to assist so that we could get to a 24-hour, 7-days-a-
week basis there at Santa Teresa. The two new positions are to 
be deployed to Santa Teresa in this fiscal year, so we hope to 
be making progress.
    You are correct that when we go on high alert, it stresses 
us and it stresses the country commercially. We came close to 
having some of our manufacturing concerns in America be 
incapable of continuing manufacturing because the part streams 
that came from Canada and Mexico to these manufacturers were 
curtailed. In a system of just-in-time inventory, you threaten 
to be unable to continue.
    So we will address these issues regarding Santa Teresa and 
Columbus, did you say?
    Senator Domenici. Columbus, yes.
    Attorney General Ashcroft. I do not remember having been to 
Columbus, and I hope that means I have not been there----
    Senator Domenici. I do not think you would have. It is a 
very small port, and if you went to the El Paso region, it is 
quite a distance, about 1 hour and 15 minutes' ride.
    Attorney General Ashcroft. I think we went to Santa Teresa, 
which has got some new facilities there----
    Senator Domenici. Brand new.
    Attorney General Ashcroft [continuing]. Very nice 
facilities. But we will work in this respect.
    Senator Domenici. Thank you very much. Thank you, Mr. 
Chairman.
    Senator Hollings. Senator Murray.
    Senator Murray. Thank you very much, Senator Hollings, for 
having this committee hearing. I really appreciate the 
opportunity to ask some important questions from the Attorney 
General. Welcome to you for being here today.
    Attorney General Ashcroft. Thank you.

             DOD PARTICIPATION IN NORTHERN BORDER SECURITY

    Senator Murray. Mr. Attorney General, last December, you 
announced that the administration would send the National Guard 
personnel to the northern border to help with border security 
issues. This is an extremely important issue to my State. 
People's lives have been impacted. The economy has been 
impacted. We have a tremendous amount of traffic going back and 
forth across the border that since September 11 has really 
halted and slowed and caused tremendous distress to those 
communities. So your announcement was extremely important and I 
really appreciate the fact that some relief is on the way. But 
more than 2 months have passed since that announcement and not 
a single Guardsman has yet been deployed to the border.
    Now, I have been working closely with Governor Ridge, the 
Department of Defense, and the Washington National Guard. 
Governor Ridge has been really good to work with. In the last 
week, he has gotten personally involved in this and I really do 
appreciate it. But it is kind of astounding to me, when our 
borders are so important, and we all understand that now, why 
it has taken 2 months for the northern border to get help and I 
wish you could explain that to us on this committee.
    Attorney General Ashcroft. Well, first of all, let me agree 
with you that we need to have the right kind of inspecting 
capacity and deployed resource on the northern border. We have 
about 5,500 miles of border with Canada and we have had fewer 
than 400 people staffing, manning that border, as opposed to 
the Southwest border, which has about 2,000 miles and we have 
had 9,000 people on the Southwest border.
    Senator Murray. We are acutely aware of that in my State.
    Attorney General Ashcroft. So we, in the midst of the 
situation, and we have had some threats regarding even 
terrorism. As you know, one individual, the millennium bomber, 
came across the northern border in your area, and fortunately, 
our sensitivity to terrorism and its potential allowed us to 
intercept that situation.
    But we were able to iron out the funding and other resource 
allocation matters with the Department of Defense and the 
memorandum of agreement, or MOA, was signed on February 15. 
About 700 Department of Defense personnel will assist and we 
should have those moving very quickly, now that the agreement 
has been signed. But the Department of Defense, obviously, is 
engaged in other very serious responsibilities and these--I 
wish we had been able at an earlier time to reach the kind of 
understandings about the deployment. We have been keenly aware 
of both threats to our security that could exist and the 
impairment to commerce that comes when you have to have a 
setting where you do not have adequate personnel.
    So we are going to have those individuals. They will be 
assisting in physical inspection of vehicles----
    Senator Murray. Do you know when they will be actually on 
the ground in our States?
    Attorney General Ashcroft. Senator, I think I have to--I 
hear that the DOD personnel are expected to be in place in 2 
weeks. I do not know if that means in Washington. I will be 
happy to try and learn specifically when we can expect that to 
happen.
    [The information follows:]

                       National Guard Deployment

    The Immigration and Naturalization Service (INS) signed a 
Memorandum of Agreement (MOA) with the Department of Defense 
(DOD) on February 15, 2002. Under this MOA, DOD will provide 
port-of-entry security, perform physical examination of 
vehicles, and manage traffic flow as well as provide limited 
air and intelligence support to assist in monitoring potential 
illegal activity along the northern border. All DOD personnel 
providing support to the Border Patrol under the MOA were on 
duty on the northern border by March 18, 2002. The support 
consists of a total of 6 aircraft with 63 pilots and crewmen. 
In addition, there are a total of 16 DOD personnel to support 
the Sector Intelligence Centers (SIC).
    One aircraft with 11 pilots and crewmen and 5 support 
personnel for the SIC are assigned for duty in Washington 
state. Mobilization of 29 DOD personnel to Washington state 
ports-of-entry (POEs) to assist Immigration Inspectors began on 
March 15, 2002. As of March 19, 2002, all 29 DOD personnel were 
on duty at POEs.

                   LIMITATIONS ON AGREEMENT WITH DOD

    Senator Murray. We would really appreciate knowing that. 
One of my concerns is that the MOAs are only for 179 days. Do 
you think that is an adequate amount of time?
    Attorney General Ashcroft. Well, we have asked for the kind 
of long-term commitment to the northern border in this budget 
request that we believe we can hire long-term professionals as 
part of INS, the Border Patrol, to undertake these 
responsibilities. We believe that is an attainable and 
achievable matter with what we believe will be the appropriate 
resourcing.
    Senator Murray. I agree with you, what we really need to do 
is to get the Customs/INS/Border Patrol agents in place and not 
just rely on the Guard, but I am concerned that 179 days will 
not be long enough, particularly when budgets here take quite a 
bit of time to get through and people need to be hired and 
trained. Will you support us on an extension of that if 179 
days proves to not----
    Attorney General Ashcroft. I will do everything I can to 
make sure that we secure the border properly, and I would be 
willing to make a request for additional help.
    Senator Murray. I appreciate that response.
    Senator Hollings. You have actually got $25 million in here 
for 285 Border Patrol agents to be transferred from the 
Southwest border to the Northwest border. I just visited the 
Border Patrol school down in----
    Senator Murray. Last year's budget did make increases. We 
need to make further increases in the budget today, but it is 
going to take a while.
    Let me ask you one other question on this. It is my 
understanding that the deployment order for the National Guard 
to the border will be conducted in accordance with Title X and 
that the Guardsmen will be deployed without any weapons. Now, 
my concern is that deploying these soldiers unarmed really 
severely limits their ability to guard the border because it 
will now fall upon the INS and the Customs Service agents to 
protect the soldiers in addition to securing the border. Is 
that how we envision the National Guard helping us and do you 
support the decision to deploy the Guard under Title X?
    Attorney General Ashcroft. Senator, the Guard is going to 
provide assistance to the immigration inspectors, examiners, 
and Border Patrol. We believe that that assistance is going to 
be very valuable in helping us carry over until we can put our 
own people there.
    I am not in a position--I do not know. I will have to just 
say, I am not sure what would be the need for or benefit to 
asking the Guard to be armed. There is a little sensitivity 
here that I think is important for us to note. The border 
between the United States and Canada is not a militarized 
border and we do not want to signal that it is and our friends 
in Canada are sensitive appropriately that we do not signal 
that we are somehow arming the border.
    So one of the reasons we want to use conventional resources 
promptly and Border Patrol and INS resources is that that, 
again, puts us back in the sense of regularity about the way we 
would enforce the border. It may be with that in mind that this 
determination has been made, but the best part of my answer was 
when I said I do not know, and I will have to try and get back 
to you.
    Senator Murray. I do appreciate that, but I think you 
should know there is a concern that we are deploying a number 
of people unarmed and it is not easy to be out there on a 
border patrol, as I think you well understand, and I think 
there is a concern that because this is under Title X that 
unarmed personnel on the border will just mean that our Border 
Patrol will have more people to protect. I would appreciate 
hearing back from you when you know that.
    Attorney General Ashcroft. Thank you.
    [The information follows:]
                       Arming the National Guard
    The position of the Department is that the National Guard personnel 
activated by the Department of Defense (DOD) to provide support to the 
Immigration and Naturalization Service (INS) on the northern border not 
be armed. The reasons for this are:
  --The DOD personnel assigned to provide aviation support to the 
        Border Patrol remain subject to DOD rules for the use of force, 
        which states that the soldiers will not be armed.
  --DOD personnel assigned to support INS will not participate in the 
        pursuit, surveillance, search, seizure, apprehension, arrest, 
        investigation, interrogation or detention of any individual; or 
        any other form of law enforcement activity.
  --DOD personnel will not be placed in a position or be required to 
        perform a task that calls for the use of force, lethal or non-
        lethal.
  --No DOD aircraft or aircrew will be required to land or conduct 
        operations in a ``hot'' zone.
  --An armed INS Border Patrol agent will be transported aboard each 
        flight of DOD aircraft.
  --An Immigration Inspector will directly supervise DOD personnel 
        while on duty at the port.
  --The 16 DOD personnel supporting the Border Patrol Sector 
        Intelligence Centers will be working in an office environment.

                     REDUCTION OF THE COPS PROGRAM

    Senator Murray. Mr. Chairman, I do not have much time yet 
and I know Senator Mikulski asked about the COPS program. Let 
me just reiterate my concern about that, as well, and the 
program cuts to that.
    We are asking a lot of our local law enforcement since 
September 11. I have received dozens and dozens of letters from 
our local law enforcement officers from all over our 
communities who are deeply concerned that they are getting a 
real double standard here, where we are asking a lot of them to 
protect citizens in situations none of them envisioned a year 
ago, and cutting the COPS program says to them that we are not 
going to stand behind our commitment to help them. So I hope 
that we can reinstate this program in our budget and that we 
can do the right thing to support the cops that are working so 
hard to protect our citizens today.
    Attorney General Ashcroft. Thank you.
    Senator Hollings. Very good. Senator Kohl.
    Senator Kohl. Thank you very much, Senator Hollings.
    Mr. Attorney General, good to see you.
    Attorney General Ashcroft. It is a pleasure to see you.

                           PROJECT CHILD SAFE

    Senator Kohl. Mr. Attorney General, in last year's CJS 
bill, we included a provision calling for the Justice 
Department to develop a safety standard for child safety locks 
and to report to Congress by January 15. This standard has not 
yet been developed, and until it is, no Federal funds can be 
spent for the distribution of safety locks. We included this 
language after the Consumer Product Safety Commission released 
a study which found that 30 of the 32 safety locks then 
available on the market could not pass the most basic safety 
tests.
    While we continue to believe that the purchase of a safety 
lock should be mandatory, we also strongly believe that the 
locks, obviously, must work. Can you tell us which experts the 
Justice Department is working with to write the report and can 
you tell us when it will be completed?
    Attorney General Ashcroft. First of all, I thank the 
Senator for this inquiry. The Office of Justice Programs has 
been working with the Consumer Product Safety Commission and 
with a group known as the American Society of Testing and 
Materials to develop the national standards for gun safety 
locks. I have been told that those standards should be 
available in the next 60 days, sometime during April of this 
year, and I would hope that that is an accurate forecast. I 
know that it was mandated by January, but they are obviously 
not here.
    Senator Kohl. So are you saying that----
    Attorney General Ashcroft. April is the projected date, and 
we are working with the Consumer Product Safety Commission and 
the American Society of Testing and Materials in the 
development of the standards.

                          SAFE EXPLOSIVES ACT

    Senator Kohl. All right. Thank you so much.
    Mr. Attorney General, as you know, Senator Hatch and I have 
introduced legislation that creates uniform Federal regulations 
for the sale or purchase and the possession of explosive 
materials. In some States today, it is easier to get enough 
explosives to take down a house than it is to buy a gun, to get 
a driver's license, or even to obtain a fishing license. The 
Safe Explosives Act that he and I authored would extend the 
same requirements currently in place for interstate purchases 
of explosives to intrastate purchases.
    Mr. Attorney General, can you tell us whether the Justice 
Department supports this legislation?
    Attorney General Ashcroft. First of all, we are in the 
process of reviewing the legislation, which I think, if I am 
not mistaken, that is the measure you submitted on February 14 
with Senator Hatch and Senator Cantwell and maybe Senator 
Schumer, I think were the parties. This certainly seems like 
the kind of objective that we ought to be able to support and I 
cannot announce a final conclusion on a study of the 
legislation at this time, but we will continue to review it and 
look forward to working with you on it. It is the kind of 
objective that we ought to be able to work together on to 
support.

                     REDUCTION OF THE COPS PROGRAM

    Senator Kohl. I know that Senator Mikulski talked about the 
COPS program and Senator Murray mentioned it herself. I do not 
want to belabor it unless there is something that you have not 
said yet with respect to that. All the indications are that the 
COPS program has been successful. As you know, it is a way in 
which we at the Federal level help to support the hiring and 
deployment of officers, which is clearly a good thing, or at 
least we all think it is a good thing. The 80 percent cut in 
funding would indicate that you all do not think it is such a 
good thing. Correct that misinterpretation if that is what it 
is that I have.
    Attorney General Ashcroft. Let me just say to you that I 
think it is a good thing. I think it has worked very well. The 
objective of the legislation was to make it possible for the 
law enforcement community in America to understand and develop 
100,000 new officers on the street. I do not know of a Federal 
program that has been more successful in that respect.
    Funding was, I think, for 111,000 eventually, and the most 
important part about that was that as the funding expired, in 
something like 92 percent of all the cases, the local law 
enforcement officials said this was a good idea. The purpose of 
the statute was to introduce us to the value of these 
additional law enforcement officers, and we are going to pick 
up that cost and continue with those officers.
    So there are two groups of people that say that this has 
been successful. One group says this has been successful. This 
is a program that worked, that achieved its objective. Now we 
can do some other things. Another group says, this is a program 
that worked. It is successful. We ought to do more of this.
    So, frankly, I think that is where we are. Certainly, the 
Department of Justice is gratified by the success of this 
program and I wish all of our programs had the 92 percent sort 
of endorsement ratio of after having been in place, that they 
were so successful that the local authorities thought they were 
willing to put up the money to continue them. That is a 
wonderful endorsement.
    The decision on the part of the administration to do some 
other things that relate to the Federal Government's 
responsibilities with the resources is not a repudiation of the 
success or value of the program, which I think everyone agrees 
is one of the most successful programs we have ever had.
    Senator Kohl. I do not know what to take of your answer, so 
I am just going to sort of leave it there. I think you are 
saying it is a great program, it has been a great success, and 
we are moving in another direction, which is okay. I mean, I 
appreciate that.
    Attorney General Ashcroft. I think that is a fair 
characterization, Senator. It accomplished its purpose. It said 
to local law enforcement, try some of these people for a period 
of time, see if they are worth it. They concluded that they 
were. It demonstrated the fact that hiring more people makes a 
difference in the quality of life and the level of crime and I 
think----
    Senator Kohl. Does it say that, in your honest judgment, we 
have reached the limit of----
    Attorney General Ashcroft. No, I think it says that----
    Senator Kohl [continuing]. The limit of what success there 
is in hiring additional law enforcement?
    Attorney General Ashcroft. I think it says that it has 
demonstrated very clearly that if you put additional resources 
into the law enforcement mix, you can improve the quality of 
life for people. That having been demonstrated, for local 
decision makers, they need to decide whether they want to put 
more resources into law enforcement or whether they feel that 
they are at the right level. The program initially was designed 
to demonstrate that concept.
    I think it is clearly and overwhelmingly understood. A 92 
percent endorsement rate backed by funding at the local level 
indicates that the law enforcement officials know and local 
decision makers know that if they want to devote additional 
resources, they can probably expect to see additional return in 
public safety.
    Senator Kohl. I thank you. I thank you, Mr. Chairman.
    Senator Hollings. I thank you.
    Senator Leahy, the chairman of our Judiciary Committee as 
well as a distinguished member of our Appropriations Committee.
    Senator Leahy. Thank you.
    Senator Hollings. Like Kato's famous couplets, you can make 
your own little laws and sit attentive to your own applause.
    Senator Leahy. I am impressed, Mr. Chairman. I really am. I 
will wait for the full translation of that. We Northerners have 
to work on that accent just a bit.
    Senator Hollings. Oh, yes. That is all right.
    Senator Leahy. I actually served with the distinguished 
Senator from South Carolina for over a quarter of a century on 
this committee.
    Attorney General Ashcroft, I apologize for not being here 
earlier. I am also the chairman of the subcommittee that 
handles foreign aid and the administration was testifying on 
the foreign aid budget and I was at that.

                           POSTCONVICTION DNA

    I will put my full statement in the record. I do appreciate 
these hearings, Mr. Chairman. I have written a number of 
letters over the past several months to the Department of 
Justice and I realize we have had some difficulty with the 
mail, but almost miraculously, within hours of this hearing, 
all these--I have been waiting for answers for several months--
they suddenly got answered.
    In fact, I received one letter I sent 6 weeks ago 
concerning the Department's decision to set aside its plans to 
offer $750,000 in grant money for postconviction DNA review 
programs. I just want to make sure I understand the answer. I 
had asked the question, does the Department intend to use 
alternative funds for postconviction testing grants? The 
response said you have asked NIJ to look into DNA initiatives. 
Is this a way of just saying we are not going to spend a dime 
on postconviction DNA testing? I realize out of a $30 billion 
budget it is $750,000, but insofar as that was specifically in 
legislation, what is going to happen?
    Attorney General Ashcroft. First of all, I agree with you 
that these hearings are valuable and they do provide a basis 
for a better service through the mail.
    My staff indicates to me that a number of your letters were 
answered very recently, and that is appropriate.
    Senator Leahy. It focuses one's attention.
    Attorney General Ashcroft. Thank you. Just to give you an 
idea, in terms of what we requested for DNA work in the next 
year's budget----
    Senator Leahy. No. No. What about the $750,000 that is 
there now?
    Attorney General Ashcroft. The $750,000, I believe, is the 
money that was allocated to assist New York in identifying 
victims that died in the World Trade Center----
    Senator Leahy. We voted tens of billions of dollars to make 
available for New York and elsewhere in post-September 11. Out 
of those billions of dollars, there was not money for that DNA 
testing, or the $20 billion that the President reassured New 
York they were getting, there was not money for that? We had to 
take it out of the postconviction DNA program? Is this just a 
nice way of saying, hey, we do not like that program, so let 
us----
    Attorney General Ashcroft. I think it is----
    Senator Leahy [continuing]. Cloak it in terrorism and say 
we are going to give it somewhere else?
    Attorney General Ashcroft. No, I do not think that is an 
accurate characterization.
    Senator Leahy. I am just asking. I am just a lawyer from a 
small town in Vermont and I do not understand how you figure it 
in the big city, but it just seems to me that out of the 
billions of dollars for post-September 11 terrorism things that 
we could have found the money there and not had to take it out 
of this program, which had been specifically authorized.
    Attorney General Ashcroft. I have asked about this and the 
answer that I have been given is this, and I believe it is the 
appropriate answer, that the Director of the National Institute 
of Justice had some concerns about the $750,000 project, about 
the methodology and the usefulness of the eventual findings 
from the proposed research project, which would have provided 
almost no funding for the actual testing of convicted offenders 
for DNA.
    Moving this resource to provide and meet these other needs, 
I think, reflects not a repudiation of the value of 
postconviction DNA studies, but it reflects the fact that this 
did not appear to be a study which was going to return the kind 
of value on postconviction DNA that was appropriate and, 
therefore, was seen as an opportunity to support the effort to 
assist the identification in the World Trade Center.
    Senator Leahy. Are we ever going to have money for 
postconviction DNA testing?
    Attorney General Ashcroft. In our proposal for this year, 
next year, pardon me, fiscal year 2003, the DNA breakout is 
convicted offender backlog reduction, which is a postconviction 
sort of thing, $15 million requested; DNA no-suspect backlog 
reduction, that is where you have DNA from the crime scene, at 
$25 million; a DNA lab improvement program, $35 million is 
requested; and DNA research and development, $5 million is 
requested. Now, all of those----
    Senator Leahy. But there is no money in between now and 
then?
    Attorney General Ashcroft. Okay, yes.
    Senator Leahy. It is a heck of a note if you are on death 
row and it comes up prior to----
    Attorney General Ashcroft. Let me go over this year's 
resources. The convicted offender backlog reduction component 
is $26 million that is available this year. The DNA no-suspect 
backlog reduction amount this year is $35 million. The DNA lab 
improvement is $35 million. And the DNA research and 
development fund is at $5 million again for this year.
    Senator Leahy. All right. Let me ask you an area where I am 
not sure I fully understand your answer, Attorney General, but 
let me do a follow-up question and hope I get the answer prior 
to our next budget hearing, or maybe we will have an 
authorizing committee hearing.

                        NORTHERN BORDER SECURITY

    I know Senator Murray asked about the northern border and 
the Justice Department budget calls for substantial increases 
in funding for border security. That is something I have called 
for for years, certainly especially since September 11. In 
fact, I included language in the PATRIOT Act authorizing 
tripling the number of Border Patrol agents, INS inspectors, 
Customs Service officers. The President's budget builds on what 
we did in the appropriations bill last year, Mr. Chairman, and 
I think that is on the right track.
    I note your budget calls for half of the new Border Patrol 
positions to be on the northern border. It is silent about the 
percentage of new INS inspector positions to be assigned to the 
northern border. Why not a similar earmark for inspectors? Are 
they needed?
    Attorney General Ashcroft. Well, let me say this, that I 
believe inspectors are needed on the northern border. We are, 
as I mentioned to Senator Murray, eager to have the assistance 
of the National Guard troops to assist us with inspections and 
other processing at the borders. We need for those borders to 
be open and working and regular and free-flowing and secure all 
at the same time.
    I have visited the northern border with that in mind and I 
was distressed in my recent visit to see people reassigned from 
the rest of the country there. So I know that filling in there 
has made it difficult across the board now.
    Senator Leahy. But General, I live an hour's drive from 
that same northern border and you could send up National Guard. 
They are not trained the way Border Patrol are. They are 
certainly not trained the way INS inspectors are. I can tell 
you right now, not from any expertise but just going to that 
border, we need INS inspectors, we need Border Patrol, both, 
not just from a security point of view but from a very 
significant economic point of view.
    Canada is our largest trading partner. Talk with your 
fellow Cabinet member, Secretary Abraham, and ask him what 
happens with Michigan, for example, if you cannot move things, 
a free-flow through. That is going to affect all the way down 
into your State of Missouri. It is not just security. We want 
people to move back and forth, plus the fact that we have a 
wonderful advantage of having a country as friendly as Canada 
next to us.
    We authorized, for example, $50 million for INS to improve 
technology for monitoring that northern border and to purchase 
additional equipment. Does your budget request money under that 
authorization? These are the things I would think we need.
    Attorney General Ashcroft. The President's budget on the 
northern border would reflect about a 148-percent increase over 
the authorized individuals from the year 2001. In particular, 
in the next year's budget, we are seeking an enhancement of 150 
individuals in inspectors on the northern border. We are----
    Senator Leahy. Are those INS?
    Attorney General Ashcroft. Yes, sir. The use of the 
National Guard is not to suggest that we think the National 
Guard has the capacity to do this with the expertise of the 
INS. It is designed to be a fill-in measure to try and help us 
in a stopgap way pending the development of the additional INS 
resources and the training and the hiring which is obviously a 
challenge.
    Senator Leahy. I would ask that you look very closely at 
that, because you and I are in agreement. It should not be the 
job of the National Guard. I have great admiration for the 
National Guard. I am the co-chairman of the Guard Caucus. But I 
want them for the things they are trained to do. They have 
helped out since September 11. Within a matter of hours, the 
Vermont National Guard was flying patrols around the clock over 
New York City, our F-16s based out of Burlington, Vermont, 
armed with sidewinders. They did that for a very long time. The 
Guard in your State of Missouri has been one that has responded 
very well. They all do.
    But we need INS inspectors, we need Customs agents, we need 
those who are trained for this very specialized thing. Just as 
we could not ask them to go out and do some of the things the 
Guard does, it is not good to have the Guard be asked to do 
that when we can put these personnel along our northern border.

                   STATE AND LOCAL ASSISTANCE GRANTS

    The administration is going to repackage a number of 
Justice Department grant programs, cutting their funding. 
Programs targeted for elimination include the State and local 
law enforcement block grants, they got $400 million, I believe 
this year; Byrne law enforcement block grants for efforts to 
improve our State and local courts, and they got, what was it, 
about $500 million this year. The plan would cut more than $1.6 
billion from the $2.5 billion appropriated this year for State 
and local law enforcement grants put into a new $800 million 
justice assistance program.
    It would be very serious, coming from a rural State. We 
rely, a lot of rural States, a lot of rural areas of large 
States rely on these grants to combat crime. They have proved 
very, very effective for State and local law enforcement 
agencies. How does this new justice assistance program, which 
results after you cut $1.6 billion out of the money we give to 
local and State law enforcement now, how does this really help?
    Attorney General Ashcroft. Well, we believe the program 
will be an effective program of assistance with the kind of 
flexibility and capacity of the recipient governments to 
enhance security. There is obviously a need for us to do some 
things federally that we have not done, and as we seek to find 
ways to have the resources to do federally, it is not as 
possible for us to be as generous as we might otherwise be with 
funding in providing assistance at the State and local level.
    Senator Leahy. But you were a Governor and you were an 
attorney general of your State. I was a State prosecutor. We 
both know that in law enforcement, most law enforcement is done 
at the State and local level and done best and our people want 
it done that way. I mean, you like to know that you can call 
your local police department or you can have your local 
district attorney respond or your sheriff or State police or 
whatever else.
    I think you may very well want to look at that, because I 
know that the Congress is going to look at the fact that do we 
really improve the safety in the small towns of Missouri or 
Vermont or South Carolina or anywhere else if we are cutting 
back on the, whether it is the Byrne grants or anything else 
that have gone to those small communities or to the States.
    I would suggest you look very closely at that because I am 
not convinced that that is going to improve law enforcement. I 
mean, we have seen crime come down every year for 8 years, but 
part of that has been because of our dramatic increase in money 
to the COPS program and other things over those 8 years to 
help.

                                TRILOGY

    One other area I would ask you to look at is an FBI 
initiative, I think it is an extremely important one, the 
Trilogy program to upgrade their information technology. The 
counterterrorism supplemental for 2002 included almost $250 
million for advanced computer equipment and software. The FBI 
has requested another $109 million in fiscal year 2003. But the 
law requires--as important as this is, the law requires you, 
that is, as head of the Justice Department, and the FBI to 
submit quarterly status reports on Trilogy. That is in the 
fiscal year 2001 law. That has not been done. Will you be able 
to start providing a current status report on Trilogy?
    Attorney General Ashcroft. Senator, I will have to get back 
to you on what the situation there is. I can----
    Senator Leahy. I know you want to follow the law. We just 
want----
    Attorney General Ashcroft. I do want to follow the law. It 
is my responsibility to enforce the law. Frankly, I want to be 
very responsive to you and to members of this committee and to 
the United States Congress. I have a great respect for the law. 
The delivery of Trilogy software has not been delayed. The 
expedited network and desktop rollout will help the FBI. Let me 
make an inquiry about the appropriate reports and let me make a 
report as promptly as I can. I will be happy to do that.
    [The information follows:]

                        Status Report on Trilogy

    The Department of Justice (DOJ) appreciates the support 
that Congress has given its Trilogy information technology 
upgrade project, and understands the oversight role that 
Congress plays in ensuring that the large amount of funding 
that it has provided is used appropriately. Indeed, Trilogy is 
one of the FBI's top priorities, and it must be managed and 
executed properly.
    The fiscal year 2001 Appropriations Act directed the FBI to 
submit quarterly status reports on the implementation of the 
Trilogy plan to the Appropriations Committees. The DOJ and FBI 
take this reporting requirement seriously and have worked 
diligently with each other and with the Office of Management 
and Budget over the last year to comply fully with this 
requirement and expedite the review process so that timely 
reports can be transmitted to Congress.
    The first quarterly report was transmitted to Congress on 
June 29, 2001. The second and third quarterly reports were 
jointly transmitted to Congress on February 26, 2002.
    The fourth report was prepared by the FBI but did not 
include the most recent information on accelerated Trilogy 
implementation. Therefore, the FBI decided to submit it with 
the fifth report to provide a more updated and accurate 
description of the Trilogy program as it currently stands. The 
fifth report reflects recent developments regarding Trilogy 
acceleration and fully explains how the program has been 
accelerated and improved to reflect the FBI's response to the 
terrorist attacks. The fourth and fifth quarterly reports were 
jointly transmitted to Congress on March 19, 2002.
    In summary, DOJ and FBI take reporting requirement 
responsibilities very seriously and remain committed to keeping 
Congress informed on the progress of the Trilogy program. At 
this time, DOJ has transmitted the first five quarterly status 
reports to Congress. The FBI is currently working on the sixth 
report.

    Attorney General Ashcroft. May I just--I may have created a 
wrong impression in response to one of the questions about 
local law enforcement in saying that, in some instances, we 
have had to allocate our resources to Federal responsibilities. 
I think, overall in the President's budget, assistance to local 
and State agencies will have a substantial increase. But as it 
related to the programs you mentioned, some of them are less 
than they were previously.
    But I would be happy to present you and I will provide an 
accounting of that, but I think it is between $1.8 and $2 
billion of overall increase for State and local law enforcement 
in the budget request this year in recognition of the point you 
are making, that law enforcement at the local and State level 
is very important to national security.
    [The information follows:]

                        State and Local Funding

    While there is a reduction and consolidation of DOJ state 
and local grant programs, the Administration proposes an 
overall increase in federal resources in fiscal year 2003 that 
are targeted to support the state and local emergency first 
responders. These federal funds are consolidated within the 
Federal Emergency Management Agency's $3.5 billion request.

                           TOBACCO LITIGATION

    Senator Leahy. How much total funding do we need to 
continue the tobacco litigation?
    Attorney General Ashcroft. We have asked in this budget for 
about $25 million----
    Senator Leahy. Is that going to be enough?
    Attorney General Ashcroft [continuing]. For this year's 
expenditures. That would be combined with perhaps other 
resources to assemble the kind of database, evidentiary 
database and the organization of the hundreds of thousands of 
documents that are necessary. We believe that is an amount that 
is appropriate to and will provide a basis for us to sustain 
the lawsuit in this year, to continue the lawsuit and to 
continue to prosecute the lawsuit vigorously.
    Senator Leahy. If it is not enough, do you have other 
sources where you can get money?
    Attorney General Ashcroft. We have sources that have been 
used previously that relate to the health care fraud and abuse 
fund. I believe that is one of the sources that have been 
tapped from other agencies that have provided available 
resources to help sustain the cost of developing the 
evidentiary basis for the trial.
    Senator Leahy. Mr. Chairman, I will put my other questions 
in the record, but I wonder if I might have the indulgence of 
the Chair to ask one more question.
    Senator Hollings. Sure, all you want. Go ahead.

                     CIVIL RIGHTS OF ARAB AMERICANS

    Senator Leahy. How about Federal civil rights enforcement? 
There were a rash of crimes against Arab and Muslim Americans 
after September 11. Some were shocking. One, a man who shot, as 
I recall, one person who was not a Muslim but he just shot him 
dead. He was a Sikh. When asked why, he said, ``Because I am an 
American.'' Well, that shames all Americans and I know you 
share my views on that and I thought President Bush's 
statements, strong statements against that kind of 
discrimination against fellow Americans was very, very good and 
I publicly praised the President for that and the Department of 
Justice for speaking out on it, too.
    Now, when you came before the Senate Judiciary Committee in 
December, you said the FBI has commenced approximately 300 
Federal criminal investigations involving post-September 11 
attacks on Arab or Muslim Americans or others based on their 
ethnicity, their actual ethnicity, or in some cases, of course, 
their perceived ethnicity.
    But you say that, to date, there have been only eight 
Federal cases resulting from approximately 300 investigations, 
so in about 97 percent, there were none. Even if you count all 
the State prosecutions, there appear to be about 60 total cases 
out of 300 investigations. Is that because there was nothing 
there or is this because of a policy determination on such hate 
crimes?
    Attorney General Ashcroft. This Justice Department and this 
administration will prosecute hate crimes vigorously whenever 
the evidence provides a basis for that kind of prosecution. I 
thank you for commending the President. His leadership was 
immediate after September 11 in visiting mosques and convening 
leaders of the Muslim faith. I personally visited mosques 
myself and----
    Senator Leahy. And I commend you for that, too.
    Attorney General Ashcroft. We have worked with local 
prosecutors in developing cases wherever that was appropriate 
and wherever that was the right course of action. The 
deplorable settings where individuals struck out, injured, 
killed individuals based on ethnic differences is intolerable. 
We have made every resource that we could possibly make 
available to help in this respect devoted to it.
    If you look carefully at the incidents, the graph of the 
incidents was that early on, there was a higher, very high--
pardon me, let me be careful about this--the incidence of 
offense was high at the early stages and went down dramatically 
as we worked in the enforcement area. We will continue to work 
with local authorities and with Ralph Boyd, the Assistant 
Attorney General for Civil Rights and the Criminal Division of 
the U.S. Attorney General's Office as well as the Criminal 
Division of the Civil Rights Division of the U.S. Attorney's 
office.
    Senator Leahy. Would you ask them, then, to give me updated 
figures on the number of complaints made, the number of 
investigations made, but then the number of prosecutions that 
resulted?
    Attorney General Ashcroft. I will be very happy to provide 
you with complete data.
    [The information follows:]

                         Hate Crimes Since 9/11

    The Federal Bureau of Investigation (FBI) initiates hate 
crime investigations based upon receipt of sufficient 
information from a source known to be reliable. Federal hate 
crime statutes require a crime to be motivated by bias and 
specify that the criminal behavior interferes with a 
``Federally protected activity.'' The ``Federally protected 
activities'' are specified in the statutes and must be present 
for a federal prosecution. Additionally, some matters labeled 
by the victims as a ``hate crime,'' are in fact ``hate 
incidents'' that do not rise to the level of a criminal act 
which fall within the FBI's civil rights jurisdiction. 
Therefore, investigations are initiated only when, after 
reviewing a complaint, it is determined that there is 
sufficient information to establish that a crime was likely 
committed and that potential federal jurisdiction exists.
    The FBI has initiated 332 hate crime investigations 
involving Arab/Muslim/Sikh-American victim individuals/
institutions since September 11, 2001. Since March 14, 2001, of 
the 332 investigations, 167 cases are ongoing and 165 have been 
closed. Additionally, approximately 85 individuals have been 
charged with state or local crimes in connection with the 
aforementioned 332 hate crime investigations.
    The United States Attorneys' Offices do not track the 
number of Arab-American victims. However, a new criminal 
program category called Hate Crimes Arising Out of Terrorist 
Attacks on the United States was created post September 11, 
2001. From its inception through March 14th, 56 criminal 
referrals have been received and 9 federal cases have been 
filed under this new category.

                        HATE CRIMES LEGISLATION

    Senator Leahy. Have you taken a position on S. 625, the 
hate crimes legislation introduced by Senator Kennedy that was 
reported out of the Judiciary Committee and was sent to the 
full Senate?
    Attorney General Ashcroft. No, we have not.
    Senator Leahy. Will you be?
    Attorney General Ashcroft. I do not know. I have not seen 
the legislation.
    Senator Leahy. We wrote to you about it. I got an answer 
back that expressed support for another bill that was 
introduced in a prior Congress. Would you be able to get me the 
Department's position on S. 625?
    Attorney General Ashcroft. We will be happy to receive your 
request and respond to it.
    [The information follows:]

                        Hate Crimes Legislation

    The Department's position on the pending hate crimes 
legislation is informed by our recent experience in responding 
to bias-motivated crimes which have unfortunately arisen in the 
wake of the tragic events of September 11. Since that date, the 
Civil Rights Division, which prosecutes bias-motivated crimes 
under several existing federal statutes, has investigated over 
300 cases of alleged discriminatory backlash against 
individuals perceived to be of Middle-Eastern origin, including 
Arab Americans, Muslim Americans, Sikh Americans, and South-
Asian Americans.
    Additionally, the Department recently indicted Darrell 
David Rice for the 1996 murder of Julianne Marie Williams and 
Laura ``Lollie'' S. Winans in the Shenandoah National Park. The 
four-count murder indictment specifically invokes a federal 
sentencing enhancement that was enacted to insure justice for 
victims of hate crimes. In this case, the federal sentencing 
enhancement provides for increased punishment if the fact 
finder at trial or, in the case of a plea of guilty or nolo 
contendere, the court at sentencing determines beyond a 
reasonable doubt that Rice intentionally selected either victim 
as the object of the offence because of the victim's actual or 
perceived gender or sexual orientation. If convicted of any of 
the charges in the indictment, Rice could face the death 
penalty.
    The Department of Justice appreciates the leadership 
Senators Kennedy and Hatch, as well as other members of 
Congress, have shown on the important issue of hate crimes. 
Your leadership is reflected in the fact that the Senate 
Judiciary Committee has now voted to send S. 625 to the full 
Senate. As your question notes, in my previous responses to the 
Committee I observed that then-Governor Bush indicated during 
the Presidential campaign that he supported Senator Hatch's 
proposed hate crimes legislation, which was introduced during 
the 106th Congress and which shares several features with S. 
625. As I explained in my earlier response, these common 
features include provision by the Attorney General of 
assistance in the investigation or prosecution of any violent 
crime that constitutes a felony and is motivated by animus 
against the victim by reason of the membership of the victim in 
a particular class or group; grants by the Attorney General to 
state and local entities to assist in the investigation and 
prosecution of such crimes; and the appropriation of $5,000,000 
for the next two fiscal years to carry out the grant program.
    As you know, S. 625 is an important proposal which would 
amend the federal criminal code in numerous significant 
respects. The Department of Justice continues to review and 
evaluate the constitutional and policy issues raised by the 
proposed amendments to the federal criminal code in S. 625. At 
the same time, we are continuing to fulfill our important 
mission of enforcing the existing laws relating to bias-
motivated crimes that fall within federal jurisdiction.

    Senator Leahy. Mr. Chairman, I appreciate this very much. 
The hate crime things worry me very much as an American. I know 
they do you. My maternal grandparents came to this country not 
speaking a word of English and I know that they faced a lot of 
prejudice because of that. Both my grandfathers were 
stonecutters in Vermont. My paternal grandfather died when my 
father was barely into his teens.
    At that time, Vermont was a far different place. My father 
used to, in looking for work, the signs were either no Irish 
need apply or no Catholics need apply. The Italian side of my 
family, again, the very same thing. I know from your own deep 
faith how abhorrent you find those days, as I do.
    But we want to make sure, all of us, whether in the 
Department of Justice, the administration, or the Congress, 
that we do not find ourselves going back to that kind of a dark 
time in our country. We have gone way beyond that in Vermont, 
fortunately. But the ability to judge people based on their 
race or religion always lurks beneath the surface and we all 
have a responsibility to make sure that this country, which is 
founded on ideals that go way beyond that, stick to those 
ideals.
    Thank you. Thank you, Mr. Chairman.
    Senator Hollings. Thank you, Senator.
    [The statement follows:]
             Prepared Statement of Senator Patrick J. Leahy
    Mr. Chairman, I join you in welcoming Attorney General Ashcroft to 
the Subcommittee today. During the past year the Justice Department has 
confronted the unprecedented and daunting challenge of protecting the 
United States against international terrorism in the wake of the 
attacks of September 11, 2001, and the subsequent anthrax attacks. The 
Justice Department, under the leadership of the Attorney General, 
deserves credit for sustaining the confidence of the American people in 
the government's ability to assure their safety.
    I want to congratulate the Attorney General and the vast array of 
law enforcement and other officials, for the completion of a peaceful 
and secure Winter Olympics. I know that the Attorney General was 
personally involved in making sure that security was strengthened for 
public events away from the Olympics facilities.
    While the Attorney General and I have not always agreed on 
particular actions, I respect the strength of his commitment. We worked 
together on the USA PATRIOT Act last year and demonstrated that the 
Congress and the Executive Branch can work together to combat terrorism 
and protect individual rights.
    Today the Attorney General seeks to describe and justify a $30.2 
billion budget request for the Department of Justice in fiscal year 
2003, which includes $539.2 million to continue on-going initiatives 
funded in the fiscal year 2002 Counterterrorism Supplemental. I support 
the Administration's decision to give high priority to combating 
terrorism, including border security. We have a duty, however, to take 
a closer look at details that may not have been considered when the 
Supplemental was adopted last year.
    In addition, just in the last day, I have received seven responses 
from the Department to outstanding requests for information about the 
activities of various Department components. These hearings are very 
useful in prompting responses, and I thank the Chairman for convening 
the hearing and the Attorney General for his attention to my questions.
                            border security
    The Justice Department's budget calls for increased spending on 
border security, and that proposal is a step in the right direction. I 
am confident that the Congress will continue on its path toward 
fulfilling the goal that we included in the USA PATRIOT Act of tripling 
the number of Border Patrol agents, INS Inspectors, and Customs Service 
officers, and I am grateful that the Administration appears supportive 
of that goal. The security of our borders is not and should not be a 
partisan issue. We must all recognize that our northern border needs to 
be made dramatically more secure, and we must be willing to provide the 
necessary funding. This budget is a good start, and I hope we do more 
to make sure that the Northern Border gets the additional personnel and 
equipment it needs.
    The Northern Border provisions added to the anti-terrorism bill, 
enacted last October, authorize a tripling of border security on the 
U.S.-Canada boundary. Efforts since then to begin implementing the 
Northern Border provisions have originated in Congress and have met 
resistance from the White House. The President's new budget plan is the 
first movement by the Administration toward those goals. The budget 
calls for a $1.2 billion increase for INS law enforcement efforts, from 
$4.1 billion in 2002 to $5.3 billion in 2003. That increase would more 
than double the number of Border Patrol agents and INS inspectors. In 
his budget, the President has also said that new hiring should focus 
particularly on the Northern Border.
    The President also proposes a $300 million increase in the Customs 
budget for staffing and technology. The President's focus on Northern 
Border needs applies here as well and this subcommittee may want to 
provide more direction to the Customs Service on where to display new 
staff.
                    federal bureau of investigation
    The Justice Department component with plans to grow most sharply is 
the Federal Bureau of Investigation. Over a two-year period the FBI 
budget will increase from $3.25 billion in fiscal year 2001 to $4.32 
billion in fiscal year 2003. The Judiciary Committee held FBI oversight 
hearings last year at which some members raised the questions about 
whether the FBI needed more money or just better management.
    Director Robert Mueller is making management reforms. He announced 
the first phase of his FBI reorganization in December. I praised his 
action as responding to the need to strengthen FBI intelligence, 
security, and information management. He and Deputy Attorney General 
Thompson are now taking a wider look at ways to streamline the FBI 
responsibilities to enable greater focus on detecting prevention and 
the investigation of terrorists. This may require a shift of certain 
types of criminals to be handled by other federal agencies and state 
law enforcement. The Judiciary Committee will hear from Mr. Mueller and 
Mr. Thomson on their plans and the realignment of criminal law 
enforcement tasks.
    One of the most important FBI initiatives is the TRILOGY program 
for upgrading the Bureau's information technology. The Counterterrorism 
Supplemental for fiscal year 2002 included $237 million for advanced 
computer equipment and software under the TRILOGY program, and the FBI 
requests another $109.4 million in fiscal year 2003 for information 
technology projects including TRILOGY. I support these investments. 
From an oversight perspective, however, I am disappointed that the 
Justice Department and the FBI have failed to submit quarterly status 
reports on TRILOGY as required in the Appropriations Act for fiscal 
year 2001. Such reports are especially important to monitor the 
effectiveness of planning and testing for new software. I urge the 
Attorney General to provide a current status report on TRILOGY to the 
Congress as soon as possible.
    Over the past seven years, the growth of the FBI's Joint Terrorism 
Task Forces (JTTF) has strengthened national counterterrorism efforts 
with full-time participation by other federal agencies and state and 
local police personnel, co-located at dedicated facilities with support 
funding in 36 FBI field offices. Director Mueller plans an increase in 
these task forces to all 56 offices, and I support this plan. After the 
September 11th attacks, you formed separate Anti-Terrorism Task Forces 
were established by the Attorney General in each U.S. Attorney's 
office. Former FBI executives have publicly raised serious concern that 
the new Task Forces would ``undermine the capabilities of the nation's 
primary agency responsible for the prevention and investigation of 
terrorist activity.'' Although a memorandum from Deputy Attorney 
General Thompson, dated October 25, 2001, indicates that FBI JTTFs 
retain primary authority for operational and investigative matters not 
related to prosecutions, the concern expressed by these former FBI 
executives about the divided responsibility for investigations through 
duplicative task forces should be addressed.
    For example, the U.S. Attorneys' Anti-Terrorism Task Forces are 
coordinating the current program for interviews of 5,000 nonresident 
aliens using state and local law enforcement personnel. The results are 
to be compiled in a new database for U.S. Attorneys being designed by 
the Justice Management Division. The development of a new database 
suggests a long-term investigative role for the U.S. Attorneys-led Task 
Forces using state and local law enforcement personnel. The potential 
for divided leadership and accountability is troubling. Moreover, it is 
not clear whether the Attorney General's Guidelines for FBI 
investigations would apply to the investigative activities of the U.S. 
Attorneys' Anti-Terrorism Task Forces. These are all questions which I 
look forward to discussing with the Attorney General.
               improving state and local law enforcement
    The Community Oriented Policing Services (``COPS'') Program has 
been a resounding success since its inception in 1994, the COPS Program 
has awarded over $7 billion in grants to law enforcement agencies, 
putting more than 114,000 new law enforcement officers on the street, 
and is credited for reducing the crime rate and getting more police 
officers on the street. I support the full funding of the program to 
keep COPS on course to fund an additional 36,000 law enforcement 
officers by the end of 2005 to help maintain communities and reduce 
crime.
    The Administration's fiscal year 2003 budget cuts COPS by almost 
$500 million. Congress appropriated $1,050,440,000 for the COPS program 
for fiscal year 2002. Enactment of this budget would mean an end to 
police hiring grants and school resource officers; and drastic 
reductions in technology, equipment, and support staff grants on which 
State and Local law enforcement agencies heavily rely. The request 
proposes to cut the Universal Hiring Program by 100 percent, cut the 
COPS in Schools program by 100 percent, and cut the COPS technology 
program by 67 percent.
    The overall budget for COPS does not increase, as the 
Administration claims. It proposes to cut more than $1.6 billion from 
the $2.5 billion appropriated for fiscal year 2002 for state and local 
law enforcement grants, and, in an accounting shift, combines what is 
left into a new $800 million Justice Assistance Grant program. The 
budget request places that new grant under the COPS account, making it 
appear as if overall COPS funds increase, when, in fact, they do not. 
The Administration merely repackages many of DOJ grant programs, and 
then cuts their funding.
    Grant programs targeted for elimination include the State and Local 
Law Enforcement Block Grants (LLEBG), which received $400 million this 
year; Byrne law enforcement block grants for efforts to improve state 
and local courts, which received $500 million for fiscal year 2002; and 
aid for states incarcerating illegal aliens, which got $565 million 
this year.
    I also support full funding of the Edward Byrne Memorial State and 
Local Law Enforcement Assistance Program to make grants to states, for 
use by states and local units of government, to improve the functioning 
of the criminal justice system, with emphasis on violent crimes and 
serious offenders, and to enforce state and local laws that establish 
offenses similar to those in the Federal Controlled Substances Act. It 
has proven to be a highly effective and widely praised grant program to 
state and local law enforcement agencies. For fiscal year 2002, 
Congress authorized $594,489,000 for the Edward Byrne Memorial State 
and Local Law Enforcement Assistance Program, of which $94,489,000 was 
for discretionary grants and $500,000,000 was for formula grants under 
this program.
    The Bureau of Justice Assistance (BJA) makes Byrne Program funds 
available through two types of grant programs: discretionary and 
formula. Discretionary funds are awarded directly to public and private 
agencies and private nonprofit organizations; formula funds are awarded 
to the states, which then make subawards to state and local units of 
government. I support maintaining the discretionary grant component of 
the program.
    The President's budget proposes to level-fund the Bulletproof Vest 
Partnership (BVP) Grant Program at $25.4 million, even though, through 
the Bulletproof Vest Partnership Grant Act of 2000, Congress authorized 
$50 million for fiscal year 2003 for the successful program that 
protects the lives of local and state law enforcement officers.
    To better protect our nation's law enforcement officers, Senator 
Campbell and I introduced the Bulletproof Vest Partnership Grant Act 
which became law in 1998. That law created a $25 million, 50 percent 
matching grant program within the Department of Justice to help state 
and local law enforcement agencies purchase body armor for fiscal years 
1999-2001. Senator Campbell and I sponsored the Bulletproof Vest 
Partnership Grant Act of 2000 to build upon the success of this program 
by doubling the annual funding to $50 million for fiscal years 2002-
2004. It improves the program by guaranteeing jurisdictions with fewer 
than 100,000 residents receive the full 50-50 matching funds because of 
the tight budgets of these smaller communities. For larger 
jurisdictions with populations at or over 100,000, the program pays up 
to 50 percent of each applicant's total vest costs, based upon any 
remaining funds. Specific funding levels for larger jurisdictions are 
determined once all applications have been submitted. Given the 
projected number of eligible jurisdictions and the limited funds 
available, the BVP already may not have sufficient funds to provide 50 
percent for applications from larger jurisdictions. The law also allows 
for the purchase of stab-proof vests to protect corrections officers 
and sheriffs who face violent criminals in close quarters in local and 
county jails. I support for the full funding of $50 million for the 
Bulletproof Vest Partnership Grant Program for fiscal year 2003.
                        protecting civil rights
    In contrast to the President's proposed budget, I support an 
increase in funding for our nation's essential civil rights enforcement 
agencies. This funding would allow the Department of Justice Civil 
Rights Division to add positions to prosecute hate crimes, deter the 
victimization of migrant workers, combat police misconduct, fight 
housing discrimination, eliminate discrimination against persons with 
disabilities, and protect fundamental opportunities. I am also 
disturbed by what could be interpreted as a shift in focus away from 
effective civil rights enforcement. Immediately after the September 11 
terrorist attacks, the President addressed the nation and reminded us 
all that racially, ethnically, and religiously motivated violence would 
not be tolerated. I commend the President for his public words on this 
critical issue. It is important that the President and Department of 
Justice match this admirable rhetoric with real enforcement and 
maintain the Department's longstanding leadership role in national 
civil rights enforcement during these difficult and eventful times.
    The President's proposed budget appears to fall short of the 
rhetoric. While that budget calls for increased funding for many 
components of the Department of Justice, these increases do not reach 
the Civil Rights Division, the chief federal body charged with actually 
enforcing U.S. civil rights laws. While I support efforts to fund 
election reform in the states and provide education on hate crimes 
enforcement to state and local authorities, these efforts are simply no 
substitute for maintaining a vibrant federal enforcement role in 
securing our most basic civil rights. These rights, all protected by 
the enforcement efforts of the Civil Rights Division, include voting, 
employment, housing, and disability rights as well as the rights of 
institutionalized persons, protection against police abuse and 
corruption, protection for victims of trafficking, and hate crimes 
enforcement.
    As one example, the problems of racial, ethnic, gender, sexual 
orientation, and religious discrimination and violence, unfortunately, 
stubbornly persist within our borders. We were reminded of these 
problems by the rash of crimes against Arab and Muslim Americans after 
the September 11 attacks. These acts, and indeed all acts of 
discrimination, cut at the very heart of what the terrorists hope to 
destroy in the United States our tolerance and our diversity. In recent 
answers to questions which you provided based upon you December 6, 
2001, appearance at the Senate Judiciary Committee, you note that the 
FBI has commenced approximately 300 federal criminal investigations 
involving post-September 11 attacks on Arab or Muslim Americans, or 
others, based upon their actual or perceived ethnicity. You indicate, 
however, that to date there have only been eight federal cases 
resulting from these approximately 300 investigations. In short, there 
has been no federal prosecution in over 97 percent of these 
investigations. I would be remiss if I did not point out this 
significant gap between the President's admirable rhetoric and the 
enforcement actions of the Justice Department since September 11 and 
ask why is it that the Department is prosecuting so few of these 
violent crimes?
    A second example where rhetoric has outstripped enforcement 
involves the protection of voting rights. During your confirmation 
hearing, you recognized that ``[v]oting is a fundamental civil right'' 
and pledged if confirmed that you would ``work aggressively and 
vigilantly to enforce federal voting rights laws.'' You assured this 
Committee that ``[i]t will be a top priority of a Bush Department of 
Justice, part of what I hope would be its legacy.'' Unfortunately, the 
President's budget request did not call for any additional resources 
for the Department's Voting Rights Section, even though there have been 
recent press reports critical of the Department's role in delaying a 
redistricting plan for congressional seats in Mississippi are 
disturbing.
                          combating cybercrime
    Technology has ushered in a new age filled with unlimited potential 
for commerce and communications. But the Internet age has also ushered 
in new challenges for federal, State and local law enforcement 
officials. These challenges were clearly evident as our nation's law 
enforcement officials investigated the recent cyber hacker attacks. 
Congress and the Administration need to work together to meet these new 
challenges while preserving the benefits of our new era.
    The Leahy-Dewine Computer Crime Enforcement Act, which authorized a 
$25 million Department of Justice grant program to help States prevent 
and prosecute computer crime, is intended to help States and local 
agencies in fighting computer crime. Grants under the bipartisan law 
may be used to provide education, training, and enforcement programs 
for local law enforcement officers and prosecutors in the rapidly 
growing field of computer criminal justice. All 50 States have now 
enacted tough computer crime control laws. They establish a firm 
groundwork for electronic commerce, and protecting this part of our 
critical infrastructure. Unfortunately, too many State and local law 
enforcement agencies are struggling to afford the high cost of training 
and forensic work needed to realize the potential of State computer 
crime statutes. I support funding for these important initiatives.
                   curbing drug trafficking and abuse
    Drug use and abuse is a contributing factor to spousal and child 
abuse, property and violent crime, the spread of AIDS, workplace and 
motor vehicle accidents, and absenteeism in the workforce. The Senate 
has already passed a version of S. 304, the Hatch-Leahy Drug Abuse 
Education, Prevention, and Treatment Act to aid States and local 
communities in their efforts to prevent and treat drug abuse. It 
establishes drug treatment grants for rural States and authorizes money 
for residential treatment centers for mothers addicted to heroin, 
methamphetamines, or other drugs. This legislation also will help 
States and communities reduce drug use in prisons through testing and 
treatment. It will fund programs designed to reduce recidivism through 
drug treatment and other services for former prisoners after release. 
In addition, this bill will reauthorize drug courts and authorize 
juvenile drug courts. Finally, the bill directs the Sentencing 
Commission to review and amend penalties for a number of drug crimes 
involving children. The bill will authorize $1.4 billion in 
appropriations over four years. I hope that the Congress will send this 
bill to the President soon and that the Justice Department will work 
with us for full funding of the programs it authorizes.
    improving forensic science services and reducing the dna backlog
    Forensic science is widely accepted as a key to effective 
administration of justice, but State crime laboratories are now 
seriously bottlenecked. Backlogs in many laboratories have impeded the 
use of new technologies, such as DNA testing, in solving cases without 
suspects and reexamining cases in which there are strong claims of 
innocence as laboratories are required to give priority status to those 
cases in which a suspect is known. Timeliness and quality concerns in 
the forensic science services threaten the administration of justice in 
the United States. Two years ago, Congress passed the Paul Coverdell 
National Forensic Sciences Improvement Act, which authorizes the 
appropriation of $134.7 million for fiscal year 2003 to improve State 
forensic science services for criminal justice purposes. Congress also 
passed the DNA Analysis Backlog Elimination Act of 2000, which 
authorizes the appropriation of $40 million for fiscal year 2003 to 
reduce the backlog of untested DNA samples in our nation's crime labs. 
I support full funding of each of these programs.

                             ENRON RECUSAL

    Senator Hollings. General Ashcroft, with respect to closure 
here on this Enron matter, you recused yourself not because you 
had a conflict of interest but there could be an appearance. 
Similarly, your chief of staff could be an appearance. All the 
U.S. Attorneys down in the Southwest District of Texas have set 
themselves aside so there could not be any appearance of a 
conflict there. Yet you try to isolate yourself from reality 
and give it to the Deputy Attorney General who has got an 
appearance of a conflict in that he is coming from the firm 
that represented both Enron and Arthur Andersen. You do not 
want to leave all that work done and still have an appearance 
of impropriety, I would think, is that not the case?
    Attorney General Ashcroft. Sir, I am from this matter 
recused, but it is my understanding that the career ethics 
officials at the Department have indicated that this is not a 
matter which would trigger additional activity. It is not a 
matter for me to handle since I am recused from this issue.
    Senator Hollings. No, you designated him. You did not 
recuse yourself from that responsibility. You designated the 
Deputy Attorney General and the law says under extraordinary 
circumstances--you can go back. We had extraordinary 
circumstances with Waco and that was all settled when the 
Attorney General then appointed our friend, Senator Danforth 
from Missouri, and he made his investigation and that ended all 
the controversy about it.
    Now you have got it all boiling up with respect to how 
powers are going to be and who has got a conflict of interest 
and everything else, so we could bring Mr. Thompson up. I am 
confident that he is an honorable individual. I know he is from 
an outstanding law firm. I think our friend General Griffin 
Bell, the former Attorney General, heads up the firm, so I have 
got no question about it. But to have him come and say, well, 
only 2 percent of the work, or only 1 percent of the work, or I 
never did any of that work, that was up on the 10th floor or 
whatever it is, does not satisfy the public feeling in 
response, because I am feeling it. I am trying to sort of 
testify before you, giving you a chance.
    We can haul him up. There is no reason to try to embarrass 
him or drive home the point. You can clear it up immediately by 
picking out an Archibald Cox or someone like that and then 
there is no more question. That is what you intended to do when 
you recused yourself. It was not to give it to somebody else 
who needed to be recused, is that not the case?
    Attorney General Ashcroft. I recused myself after carefully 
reviewing the guidelines that are provided in the Government, 
with the advice of the ethics professionals in the office, that 
for me to persist would be inappropriate. I did so without 
making any specific judgments about other individuals that 
might have the same responsibility to make evaluations, 
cooperating with the career ethics officers at the Department. 
I did not make decisions for the other individuals who recused 
themselves and obviously have not tried to make decisions for 
those to supercede the judgment of the Career Ethics Office or 
to interfere with the decision making in a matter about which I 
am recused because I do not want to be involved in a matter 
where it has been determined that I should not be involved.
    Senator Hollings. And you determined that you should not be 
involved on account of--you did not have a conflict of interest 
with Enron. It could have been an appearance due to the 
contribution they made in one of your campaigns, I think, is 
that not the case?
    Attorney General Ashcroft. Considering the totality of the 
circumstances, we decided in conjunction with the ethics 
officers that it was appropriate for me to recuse myself.
    Senator Hollings. That almost sounds like the Fifth 
Amendment these fellows are taking.
    Let us go right to the job. You have got a full-time job 
and Larry Thompson is the Deputy Attorney General in charge of 
counterterrorism. He ought not to have any other thing on his 
mind. And you are still the Attorney General. You cannot recuse 
yourself from reality. You have got to get with the program and 
make a decision. Now, if the decision is that that you have 
made and it is going to stand, so be it.

                             FEMA TRANSFERS

    Let me move to another thing that you and I are totally 
familiar with, and that is, having been Governor, we have dealt 
with disasters. Last year, I think FEMA had, of the 45 
disasters, whether they were earthquakes or hurricanes or 
tornadoes or what have you, forest fires, there was only 1 with 
respect to terrorism, or the 2 at the Pentagon and in New York 
on 9/11. We know that FEMA is now doing a heck of a good job 
from what I can understand.
    I remember way back with Hurricane Hugo, we had to sneak in 
the marines from Parris Island to help us because they could 
not come unless they were ordered to by FEMA, and similarly 
with Hurricane Andrew. I will never forget, I was on the phone 
with Governor Lawton Chiles at the time down in Florida saying, 
hurry up, they are ready to go. They are right at Fort Bragg. 
They are ready to fly in with tents, stoves, everything else, 
set up a little city down there at Homestead, and it took him 4 
or 5 days to get it through with FEMA, but we are doing a way 
better job now. We have got it straightened out and there is 
more or less a process developed for hurricanes and other 
natural disasters.
    Incidentally, since I mentioned Homestead, the first police 
that you saw on TV that night after the weather had cleared 
were police officers, 42 Spanish-speaking police officers from 
the city of Charleston with generators, water supply, and 
everything else. The police force of Homestead had been wiped 
out. Their homes had washed away and they were trying to care 
for their families. So they have helped us and we helped them 
and a culture of cooperation has developed with that regard.
    This particular subcommittee was asked to consider giving 
State and local counterterrorism programs to FEMA by Vice 
President Cheney and we considered it. However, we kept it 
under the Attorney General's Office per the PATRIOT Act, that 
was only signed on October 26, less than 4 months ago. The 
Attorney General shall make grants described in subsections (b) 
and (c) to States and units of local government to improve the 
ability of State and local law enforcement, fire department, 
and first responders to respond to and prevent acts of 
terrorism. That is the first paragraph of the PATRIOT Act on 
first responders.
    Yet the President has submitted a budget that decimates 
local law enforcement, decimates the cops on the beat, 
decimates the school resource officers, and the first 
responders. The Office of Domestic Preparedness (ODP) got $650 
million in this particular budget, 2002's budget, but for next 
year they get zero. It is my understanding that the response 
that you have received of disapproval has been bipartisan and 
unanimous from what I can learn. I have not heard anybody in 
the Congress say this is a good idea, or in law enforcement.
    We just had a hearing last week on security, seaport 
security to be exact. We had the Commissioner of Customs. We 
had the Commandant of the Coast Guard. I had two mayors of the 
two biggest cities practically in the State of South Carolina, 
and one Democratic and one Republican, and just out of 
curiosity, I said, let me ask you a question about the Office 
of Domestic Preparedness (ODP). Do you think it ought to stay 
where it is or be transferred to FEMA where ODP has developed, 
as Senator Gregg has just pointed out, a training consortium at 
Fort McClelland, Nevada, New Mexico, Texas, Louisiana, and now 
first responders across the country are getting the training 
they need. We have gotten, like you have testified, 46 plans, 
like you testified, a miraculous success.
    And you and I have been in politics a long time. We do not 
mess with something that is working just to give it to Joe 
Allbaugh who does not know anything about domestic 
preparedness. He has never been associated with it in his life, 
or anybody at FEMA. That is a non-starter as far as this 
subcommittee is concerned.
    We had not been consulted about moving ODP other than the 
testimony we had back in May, and at that time, our Republican 
chairman, Senator Gregg, was in charge and he communicated that 
with the administration. Yet you come with next year's budget 
and decimate the local law enforcement programs and transfer 
ODP.
    Incidentally, let me commend you on the new FBI Director. 
He has been working with local law enforcement. In fact, the 
first thing he said at the chiefs' conference and so forth, I 
think it was up in New York, that he was going to start working 
with them and they gave him a standing ovation. Mueller is on 
the right track and everybody prides themselves on you and the 
Attorney General and the Justice Department.
    In fact, the Republicans said, wait a minute, on this 
airline security. We want it under the Department of Justice. 
When it passed the Senate, we had passed it out of our 
committee with the Department of Transportation. They said, no 
way. We want it with the Department of Justice, and we got a 
unanimous vote, all Republicans and all Democrats. But in order 
to get stuff moving in that conference, I went back to the 
Department of Transportation.
    With ODP, within the Department of Justice, you have got 
the confidence. You have got the abilities. You have got the 
training. You have got the culture developed. You have got the 
money. We cannot say we are fighting counterterrorism when we 
are mixing up everybody in new assignments and everything else 
of that kind. In this committee's opinion, and you can see on 
both sides, there is no support whatsoever for transferring 
ODP. You are the best witness we have got that this should not 
be transferred. You testified positively about how ODP is 
working in your Department.
    I yield to you, and I want to thank you for your appearance 
here today, but I want to yield to you if you have got any 
comment.
    Attorney General Ashcroft. I am grateful for the work that 
has been done. I would again reiterate the fact that had it not 
been for this committee and the membership of this committee 
that understands the threat of terrorism, we would have been 
far less prepared and far less capable of handling this matter 
in the way that it has been handled. The chairman and Senator 
Gregg have both had an ability to foresee these needs. That is 
commendable.
    I want to thank the members of our Department that have 
done a good job. I believe they have done a good job in moving 
in this direction. But this administration has made the 
decision, and I support that decision, and I believe that we 
can make a change which will provide for excellent service. As 
Attorney General, that is my responsibility and I will do what 
I can to pursue it if that is the final outcome of this debate.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hollings. The committee is indebted to you for your 
appearance here today. It will stay open with respect to 
questions to be submitted by the members here and give you a 
reasonable time to respond.
    [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 Ernest F. Hollings
                           antitrust division
    Question. General Ashcroft, could you provide the Committee the 
number of workyears, number of FTE's, and funding levels for media 
antitrust cases handled by the Antitrust Division for each of the last 
10 years. Can you provide that same information for telecommunications 
cases?
    Answer. The requested information for media matters is provided in 
Attachment 1. The information for telecommunications cases is in 
Attachment 2.

                                                                        ATTACHMENT 1.--ANTITRUST DIVISION--MEDIA MATTERS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 1992        1993        1994        1995        1996        1997        1998        1999        2000        2001      2002 \1\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Salary......................................................    $298,889    $159,730    $346,326    $169,344    $496,152  $1,167,189  $1,685,266  $1,350,313  $1,765,304  $1,211,448    $767,062
Benefits....................................................      46,328      25,557      61,300      24,894      84,842     191,419     283,125     232,254     284,214     212,003     141,139
Travel......................................................      12,963       8,663      18,502      12,611      41,681      93,684      62,002      14,628      13,157      10,576      13,586
Rent/Comm/Util \2\..........................................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........          14
Printing....................................................  ..........         363         689  ..........       6,635       7,332      31,344      10,201  ..........       8,858         468
Services....................................................      11,876       8,987      15,059      18,833      75,881      90,869     225,002      19,026     232,348      34,845      12,686
Supplies \2\................................................  ..........  ..........  ..........  ..........  ..........       4,843  ..........  ..........  ..........  ..........          11
Equipment \2\...............................................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
                                                             -----------------------------------------------------------------------------------------------------------------------------------
      Subtotal \3\..........................................     370,056     203,300     441,876     225,682     705,191   1,555,336   2,286,739   1,626,422   2,295,023   1,477,730     934,966
Expert Witness \4\..........................................  ..........       6,091       3,181       1,723     117,809     216,784     474,542      47,143     397,961     175,743       7,271
                                                             -----------------------------------------------------------------------------------------------------------------------------------
      Total.................................................     370,056     209,391     445,057     227,405     823,000   1,772,120   2,761,281   1,673,565   2,692,984   1,653,473     942,237
                                                             ===================================================================================================================================
FTE.........................................................         5.3         2.7         5.9         2.9         9.1        20.5        25.3        19.8        26.1        18.6        12.5
Number of Staff.............................................          58          27          47          22          63         114         127         140         161         118          95
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ As of February 28, 2002.
\2\ Expenditures for Rent, Communication and Utilities, and Supplies and Equipment were allocated from general Division accounts not identified by matter and used for multiple Division matters
  irrespective of commodity area.
\3\ Antitrust Division appropriation funding.
\4\ Department of Justice Fees and Expenses of Witness Account.
 
Notes:
Consistent with information previously provided to the Senate Appropriations Subcommittee by the Federal Trade Commission, ``Media Matters'' includes enforcement actions and substantial
  investigations in the general media, Multichannel Video Programming Distribution (MVPD), radio and television sectors.
Financial, FTE and staff data is not available by commodity area for quick look preliminary investigations prior to issuance of a case number. In addition, due to incomplete time reporting by
  commodity area, employee salary and benefit values for 1996 and prior years may not be fully reflective of total effort.


                                                                  ATTACHMENT 2.--ANTITRUST DIVISION--TELECOMMUNICATIONS MATTERS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 1992        1993        1994        1995        1996        1997        1998        1999        2000        2001      2002 \1\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Salary......................................................    $163,001    $296,328    $984,682    $420,947    $305,432  $1,383,073    $977,535  $1,268,149  $1,778,268    $558,690    $130,348
Benefits....................................................      25,265      47,412     174,289      61,879      52,229     226,824     164,226     218,122     286,301      97,771      23,984
Travel......................................................       2,584       8,234      30,079      61,570       8,646      57,676      30,018       8,704      13,098       3,012  ..........
Rent/Comm/Util \2\..........................................  ..........  ..........  ..........  ..........       6,251  ..........  ..........  ..........  ..........  ..........  ..........
Printing....................................................         317  ..........         310       1,286         990  ..........         383      16,374      12,626       2,443  ..........
Services....................................................       1,619      12,828     492,965      83,084      67,518     156,770       7,373      86,447     835,199       1,302  ..........
Supplies \2\................................................  ..........          57  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
Equipment \2\...............................................  ..........  ..........  ..........  ..........  ..........       3,400  ..........  ..........  ..........  ..........  ..........
                                                             -----------------------------------------------------------------------------------------------------------------------------------
      Subtotal \3\..........................................     192,786     364,859   1,682,325     628,766     441,066   1,827,743   1,179,535   1,597,796   2,925,492     663,218     154,332
Expert Witness \4\..........................................      11,696       8,100      51,813      27,605     256,635      18,444      48,969     144,350   1,549,848      11,400  ..........
                                                             -----------------------------------------------------------------------------------------------------------------------------------
      Total.................................................     204,482     372,959   1,734,138     656,371     697,701   1,846,187   1,228,504   1,742,146   4,475,340     674,618     154,332
                                                             ===================================================================================================================================
FTE.........................................................         3.4         5.7        18.1         7.2         4.9        22.1        15.7        21.8        28.1         8.6         1.7
Number of Staff.............................................          31          45          80          43          64         102          76          89         113          78          30
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ As of February 28, 2002.
\2\ Expenditures for Rent, Communication and Utilities, and Supplies and Equipment were allocated from general Division accounts not identified by matter and used for multiple Division matters
  irrespective of commodity area.
\3\ Antitrust Division appropriation funding.
\4\ Department of Justice Fees and Expenses of Witness Account.
 
Note:
Financial, FTE and staff data is not available by commodity area for quick look preliminary investigations prior to issuance of a case number. In addition, due to incomplete time reporting by
  commodity area, employee salary and benefit values for 1996 and prior years may not be fully reflective of total effort.

                     coordination between agencies
    Question. Department of Transportation officials have been quoted 
in recent press articles saying that the United States-Mexico border 
could be open to long-haul Mexican trucking operations by June of this 
year. As you know, last year the Congress required additional safety 
measures be implemented both at the border and by the Department of 
Transportation before the Administration could open the border to long-
distance Mexican-domiciled trucks operating beyond the current 
commercial zones.
    What level of coordination has there been between the Department of 
Transportation and your agencies on establishing or increasing 
operations at the border in anticipation of this influx of Mexican 
trucks? Please describe.
    Answer. The Department of Transportation's (DOT) NAFTA Land 
Transportation Implementation Working Group includes representatives 
from the Immigration and Naturalization Service, the U.S. Customs 
Service, the Internal Revenue Service, the Department of Commerce, and 
the Department of Justice's Environment and Natural Resources Division. 
The working group has met twice to make plans for a Land Transportation 
Conference to provide information to the United States, Canadian and 
Mexican carriers. The conference will be held May 28 through 31, 2002.
    The DOT Land Transportation Standards Sub-committee (LTSS) met with 
Canadian and Mexican delegations in October 2001, to discuss issues 
relating to cross border operations including plans for an outreach 
program.
                           background checks
    Question. The United States is required by the USA PATRIOT Act to 
begin conducting criminal background checks on drivers of commercial 
motor vehicles that haul hazardous materials, yet there is no agreement 
for doing criminal background checks on Canadian and Mexican drivers 
that haul similar hazardous materials.
    Answer. The DOT Federal Motor Carrier Safety Administration (FMCSA) 
is the regulating authority for motor carriers. The FMCSA has published 
regulations in the Federal Register. Mexico-domiciled motor carriers, 
their vehicles and their drivers operating in the United States are 
subject to all of FMCSA's safety requirements. Section 350 of the DOT 
Appropriations Act prohibits Mexico-domiciled motor carriers from 
transporting hazardous materials in a placardable quantity beyond the 
border zones until the United States has completed an agreement with 
the Government of Mexico ensuring that drivers of such placardable 
quantities of hazardous materials meet substantially the same 
requirements as United States drivers carrying such materials.
    Question. Given the security concerns associated with our borders 
since September 11th, how can we justify letting these drivers into the 
United States without holding them to the same standard that United 
States drivers will be held to?
    Answer. Drivers must meet the DOT FMCSA standards. All aliens 
admitted to the United States must establish admissibility under the 
Immigration and Nationality Act (INA), and Mexican and Canadian drivers 
who are inadmissible under the grounds of inadmissibility contained in 
section 212(a) of the INA are not eligible to enter the United States, 
unless they have obtained a waiver of inadmissibility. However, there 
is no specific ground of inadmissibility under the INA prohibiting the 
entry of drivers who have not complied with FMCSA standards. A Mexican 
driver must also apply to the Department of State and be approved for a 
B-1 (visitor for business) visa to enter the United States.
    Question. What confidence do we have in the ability of the Canadian 
or Mexican governments to perform background checks on their drivers 
who haul hazardous materials on our roads? Will these background checks 
be performed to the same standards as the checks conducted on United 
States drivers?
    Answer. The Canadian government has a comprehensive criminal 
database. We are not aware of what information is available to the 
Mexican government.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                            methamphetamine
    Question. Background: The State of Hawaii, and in particular, the 
county of Hawaii, has a large and substantial problem with crystal 
methamphetamines (ice, meth, or crystal meth). As this drug spread 
across Asia, it first found a foothold in Hawaii, and then crossed the 
rest of the way, where it has quickly spread across the rest of the 
nation.
    The crystal meth problem in Hawaii has reached crisis proportions 
not only because of the inordinately high incidence of meth abuse, but 
because of the many negative ``side effects'' that arise from the 
widespread production and use of the drug. The manufacture of ice in 
both urban and rural meth labs, of course, churns out the drug itself, 
but also pollutes the environment with toxic chemical byproducts. The 
drug itself creates dangerous behaviors during and immediately after 
use, as addicts plummet from their high into depression and desperate 
craving for more of the drug. The long-term health consequences of meth 
addiction are only just beginning to be understood.
    Additionally, meth is extremely addictive, and has permeated all 
levels of society to the extent that cultures of family-based drug use 
have begun to manifest. Treatment of addiction, therefore, becomes even 
more problematic as traditional support networks, such as family and 
friends, are eroded as the high prevalence threat to the State of 
Hawaii spreads.
    With this background in mind, I would like to ask you several 
specific questions about Department of Justice (DOJ) resources 
available to combat this pernicious threat to the State of Hawaii.
    What DOJ resources are available to help in the detection and 
eradication of meth labs--particularly meth labs in remote and 
inaccessible rural areas such as those that abound in the county of 
Hawaii?
    Answer. The Drug Enforcement Administration's (DEA) methamphetamine 
strategy addresses the diversion of precursor chemicals from legitimate 
commerce into this criminal activity. DEA has vigorously pursued those 
individuals and firms, both domestic and international, which have 
supplied clandestine methamphetamine laboratories. DEA has seized tons 
of pseudoephedrine destined for methamphetamine laboratories and will 
continue to do so as part of an overall strategy.
    In 2002, approximately $70,473,000 was appropriated within the 
Office of Community Oriented Policing Services (COPS) account for state 
and local law enforcement programs to combat methamphetamine 
production, to target drug hot spots, and to remove and dispose of 
hazardous materials at clandestine methamphetamine labs. COPS 
administers these funds. Within the amount provided, the conferees 
included $20,000,000 to be reimbursed to DEA for assistance to state 
and local law enforcement for proper removal and disposal of hazardous 
materials at clandestine methamphetamine laboratories. The President 
has included $20 million to continue these efforts in fiscal year 2003.
    The Office of Justice Programs Bureau of Justice Assistance (BJA) 
also provides funding to the State of Hawaii under its Byrne Formula 
Grant Program and to the state and its counties under its Local Law 
Enforcement Block Grant (LLEBG) program. Byrne Formula awards are made 
to the State Administering Agency, the Hawaii Department of the 
Attorney General, for distribution to the 4 counties (Hawaii, Maui, 
Kauai, and Honolulu city/county). The Attorney General's Office 
advertises the availability of the funds and receives proposals from 
the police department and the four prosecutor offices. Since fiscal 
year 1999, the State Attorney General has made subgrants of:
  --$555,611 to the Kauai Police Department, the Maui Police 
        Department, the Hawaii County Police Department, the Department 
        of Land and Natural Resources, and the Honolulu Police 
        Department for the statewide narcotics task force. This funding 
        has been applied to multi-jurisdictional task force programs 
        that integrate federal, state, and local drug law enforcement 
        agencies and prosecutors for the purpose of enhancing 
        interagency coordination, exchanging intelligence, and 
        facilitating multi-jurisdictional investigations.
  --$599,738 to the Kauai Police Department, the Maui Police 
        Department, the Hawaii County Police Department, and the 
        Honolulu Police Department for programs to target the domestic 
        sources of controlled and illegal substances, such as precursor 
        chemicals, diverted pharmaceuticals, clandestine laboratories, 
        and cannabis cultivation.
    Under the Local Law Enforcement Block Grant Program:
  --$963,172 has been awarded to Honolulu, Hawaii to support community 
        prosecution and a drug court initiative, and $32,000 has been 
        awarded for the detection of clandestine labs.
  --Approximately $5,000 was provided to Maui County for a drug-court 
        initiative.
    While the Byrne Formula and LLEBG programs are not requested in the 
2003 President's budget, purposes funded therein remain eligible for 
funding under the new $800 million Justice Assistance Grant program, 
which provides grantees with a single-source funding mechanism. Byrne 
Discretionary funds are also authorized to be used for this purpose.
    Question. What DOJ resources are available for the environmental 
clean up of meth lab sites?
    Answer. Funding for the environmental clean up of meth lab sites is 
primarily available through funds made available to DEA by Congress 
through the COPS methamphetamine initiative although several 
jurisdictions are using part of their congressional earmark funds to 
accomplish this. In 2002, Congress has provided $20 million to DEA for 
such purposes. While funds may be used for these purposes under the 
Byrne Formula and LLEBG programs, this is a decision made by each state 
or local jurisdiction.
    With regard to resources for the environmental cleanup of 
clandestine drug laboratories, DEA does not currently have a contractor 
in Hawaii to perform these services. No qualified contractor(s) 
submitted a proposal when DEA requested proposals in 1997. However, DEA 
did fund one cleanup each in fiscal years 1998 and 2000. As long as 
funding is available, DEA will fund cleanups (i.e., the removal of 
chemicals and contaminated apparatus) for both DEA and state/local 
seizures of clandestine drug laboratories in Hawaii through purchase 
orders.
    Question. What DOJ resources are available for enhancing efforts to 
stop the sale of crystal meth?
    Answer. In addition to the regular staffing levels and their 
cooperation with other federal and state and local agencies, DEA has 
made four successful deployments of one of its Mobile Enforcement Teams 
(MET) to Hawaii since September 2000. As their name implies, MET teams 
are deployed to provide help in those investigations where their 
assistance will be most effective.
    Question. What DOJ resources are available for treating addiction 
to crystal meth?
    Answer. Most DOJ drug resources are focused on investigation and 
prosecution of drug violations. Federal Government resources for drug 
abuse treatment are administered by the Department of Health and Human 
Services' Substance Abuse and Mental Health Services Administration. 
Within the Department of Justice, DEA has no resources for drug 
treatment, though DEA's Demand Reduction Coordinators (DRC) and 
headquarters staff inform communities about effective treatment when 
conducting demand reduction training. In upcoming community 
mobilization training, a treatment component is included as part of the 
training.
    Within the Office of Justice Programs, Byrne Formula Grant Program 
funds may be used to develop programs to identify and meet the 
treatment needs of adult and juvenile drug and alcohol dependent 
offenders and to develop programs to demonstrate innovative approaches 
to enforcement, prosecution, and adjudication of drug offenses and 
other serious crimes. Funding may also be available through OJP's 
Residential Substance Abuse Treatment (RSAT) program for state and 
local jails, the Drug Courts program, and the Indian Alcohol and 
Substance Abuse Program, all of which provide treatment services. These 
programs primarily target populations that have been incarcerated, are 
on probation or parole, or are facing adjudication.
    Question. What DOJ resources are available to develop and implement 
innovative responses, such as the drug court program, to the crystal 
meth problem that break away from the traditional model of arrest, 
incarceration and treatment, parole, and release?
    Answer. OJP's Drug Courts Program Office is available for this 
purpose. The State of Hawaii currently has two adult drug courts in 
operation, one on the island of Oahu and the other on the island of 
Maui. The Hawaii Drug Court Program also has a Family Court component 
that works with Child Protective Services parents. The Oahu drug court 
received its first clients in January of 1996. Since that time, the 
program has admitted approximately 500 individuals, graduating nearly 
50 percent.
    Despite the fact that 90 percent of clients in the Hawaii Drug 
Court program are methamphetamine dependent, grant applications from 
Hawaii's Drug Court Program do not specifically target methamphetamine 
treatment as there is currently no single proven methodology with 
methamphetamine abusers. The Hawaii Drug Court Program uses principles 
applicable to any dependency and applies techniques and components, 
such as careful assessments, which have been demonstrated as effective 
with meth users to provide the best individualized care within the 
restrictions of its resources. The program use a comprehensive approach 
in treating drug court clients as opposed to a more targeted approach.
    DEA's demand reduction program recognizes the value of drug courts 
in helping communities deal with their drug abuse problem. DEA's new 
Integrated Drug Enforcement Assistance initiative, unveiled by DEA 
Administrator Asa Hutchinson in December 2001, will promote the 
implementation of drug courts in communities as an effective tool in 
dealing with the drug abuse issue.
    Funding under the Byrne Formula Grant Program and the Local Law 
Enforcement Grant Program is available to state and local agencies for 
innovative program responses. Between fiscal year 1999 and fiscal year 
2002, BJA provided approximately $12.34 million to the state of Hawaii 
under the Byrne Formula program. The state has elected to use $859,204 
for programs to improve operational effectiveness of courts by 
expanding prosecutorial, defender, and judicial resources, and 
implementing court delay-reduction programs.
    The RSAT Formula Grant Program assists states and units of local 
government in developing and implementing residential substance abuse 
treatment programs within state and local correctional and detention 
facilities in which prisoners are incarcerated for a period of time 
sufficient to permit substance abuse treatment. This program addresses 
the issue of substance abuse dependence and the direct link to public 
safety, crime, and victimization by providing treatment and services 
both within the institution and in the community after release. In 
2003, $77 million is requested under the President's budget, a $7 
million increase over the previous level. Since 1999, over $1.1 million 
has been provided to the State of Hawaii under this program.
    The Indian Alcohol and Substance Abuse Program targets the link 
between alcohol and substance abuse and crime in Indian Country by 
funding tribal detention and probation-based demonstration projects 
that provide services such as placing arrestees and offenders in 
detoxification centers, halfway houses, in-patient treatment 
facilities, and home detention. In 2003, $4.989 million is requested 
under the President's budget.
    Question. What DOJ resources are available for education and 
outreach programs to prevent the recruitment of new users?
    Answer. DEA's demand reduction program uses full-time DEA special 
agents as Demand Reduction Coordinators (DRCs) that work with 
communities to implement and promote drug prevention programs in a 
variety of venues. These DRCs work with community coalitions and others 
to educate community leaders, adults, youth, and businesses about the 
dangers of drug abuse. DRCs are available to communities throughout the 
United States, including Hawaii, to put on drug education programs.
    The Office of Juvenile Justice and Delinquency Prevention (OJJDP) 
administers the Drug-Free Communities Support Program through an 
interagency agreement with the Office of National Drug Control Policy 
(ONDCP). The Drug-Free Communities Support Program is designed to 
strengthen community anti-drug coalitions and reduce substance abuse 
among youth. The program seeks to enhance collaboration, cooperation, 
and coordination among all sectors and organizations within communities 
that demonstrate a long-term commitment to reducing substance abuse 
among youth. Community coalitions that receive funding through the 
Drug-Free Communities Support Program focus on a combination of drugs 
and use a multi-sector, multi-strategy approach to reducing substance 
abuse among youth. Among the strategies employed to reduce substance 
abuse among youth are information dissemination, media campaigns, 
community events, community education through a sports certification 
program, and training for youth. Currently, 463 community anti-drug 
coalitions receive Drug-Free Communities Support Program funding. 
Grantee coalitions are located in all 50 states, the District of 
Columbia, Puerto Rico, and the U.S. Virgin Islands.
    Under a BJA grant to the National Crime Prevention Council (NCPC), 
funding has been applied to education and outreach related to meth 
abuse. Through the NCPC's rapid response training and technical 
assistance unit and with DEA collaboration, BJA offers a comprehensive 
planning, training and technical assistance program covering 
enforcement, treatment, prevention, and continuing care. The states and 
local jurisdictions may also elect to use their Byrne Formula funds and 
LLEBG funds for this purpose.
    Question. What DOJ resources are available for the pre-arrest 
intervention and treatment of meth addicts?
    Answer. DEA has no resources for these activities but recognizes 
their value in dealing with the drug abuse problem. However, as stated 
previously, DEA's DRC and headquarters staff inform communities about 
effective treatment.
    Under a BJA grant to the NCPC, funding has been applied to 
education and outreach related to meth abuse. Through the NCPC's rapid 
response training and technical assistance unit and with DEA 
collaboration, BJA offers a comprehensive planning, training and 
technical assistance program covering enforcement, treatment, 
prevention, and continuing care. The states and local jurisdictions may 
also elect to use their Byrne Formula funds and LLEBG funds for this 
purpose.
    Question. What DOJ resources are available for addressing the 
crystal meth problem among juveniles and adolescents?
    Answer. As stated earlier, the vast majority of federal drug 
prevention funding is administered by HHS; the Safe Schools initiative 
within the Department of Education; and the ONDCP's national anti-drug 
media campaign.
    Within DOJ, the demand reduction program enlists full-time DRCs and 
other DEA special agents to present anti-drug abuse programs to a 
variety of audiences including youth. These might take place at schools 
or other locations such as Boys and Girls Clubs. DRCs also work closely 
with education professionals to provide training to teachers, School 
Resource Officers, etc. on drug abuse among the youth of their 
community. Presently, Hawaii is serviced by the DRC in the DEA Los 
Angeles Field Division. DEA Administrator Hutchinson's goal is to 
double the number of field special agents in the Demand Reduction 
Program and to ultimately place a DRC in every state by the end of 
fiscal year 2003.
    Funding is available for addressing the crystal meth problem among 
juveniles and adolescents through the Byrne Formula and Discretionary 
Grant Programs and through congressional earmarks for methamphetamine 
funding initiatives. State and local jurisdictions may also use LLEBG 
funding to address drug problems among the target populations listed. 
However, the bulk of OJP's available funding for addressing crystal 
meth problems among juveniles and adolescents is housed within the 
OJJDP in OJP.
    OJJDP administers the Drug-Free Communities Support Program through 
an interagency agreement with ONDCP. The Drug-Free Communities Act of 
1997 (Public Law 105-20) created the Drug-Free Communities Support 
Program. On December 14, 2001, Public Law 107-82 reauthorized the 
program through fiscal year 2007. The Drug-Free Communities Support 
Program is designed to strengthen community anti-drug coalitions and 
reduce substance abuse among youth. The program seeks to enhance 
collaboration, cooperation, and coordination among all sectors and 
organizations within communities that demonstrate a long-term 
commitment to reducing substance abuse among youth. Community 
coalitions that receive funding through the Drug-Free Communities 
Support Program focus on a combination of drugs and use a multi-sector, 
multi-strategy approach to reducing substance abuse among youth. 
Currently, 463 community anti-drug coalitions receive Drug-Free 
Communities Support Program funding. Grantee coalitions are located in 
all 50 states, the District of Columbia, Puerto Rico, and the U.S. 
Virgin Islands.
    Two grantee coalitions are located in Hawaii. The Kawaihau 
Community Leadership Coalition, with the County of Kauai as its fiscal 
agent, has received funding through the Drug-Free Communities Support 
Program since October 1, 1998. Coalition goals are to reduce substance 
abuse in the Kawaihau District and to build a community coalition 
through the objectives of increasing community information, developing 
awareness of the effects that drugs have on the community, and 
providing education to strengthen family resiliency skills. The 
coalition uses multiple approaches to reduce substance abuse among 
youth, including information dissemination, a media campaign, community 
events, community education through a sports certification program, and 
training for youth. The Ewa Beach Coalition, with the Coalition for a 
Drug-Free Hawaii as its fiscal agent, was awarded a Drug-Free Community 
Support Program grant beginning October 1, 2001. The coalition is 
focusing on decreasing risk factors (e.g., poor academic performance, 
family conflict, early initiation of problem behaviors) and increasing 
protective factors (e.g., family attachment) to reduce substance abuse 
among youth. Coalition initiatives include school-based programming, 
family strengthening and parent involvement initiatives, substance 
abuse intervention and outreach, community events, and media 
initiatives.
    OJJDP also administers the Drug Prevention Demonstration Program, 
which is funded under Title V of the Juvenile Justice and Delinquency 
Prevention Act of 1974, and which was appropriated $10.976 million in 
fiscal year 2002. This program awards discretionary grant funds to 
grantees to develop, demonstrate, and test programs to increase 
perceptions among children and youth about the unappealing aspects and 
danger of drug use. OJJDP uses these funds to demonstrate, test, and 
evaluate promising programs that address the reduction of risk factors 
and the enhancement of protective factors that affect the use of drugs 
among children and youth. Building on its work replicating the Life 
Skills Training (LST) Initiative, the program will continue to fund LST 
projects but also will be expanded to support other drug prevention 
programs that are promising for students at all grade levels. OJJDP 
also uses these funds to provide training and technical assistance to 
jurisdictions to support replication efforts. Technical assistance 
activities include conducting project readiness and needs assessments, 
developing training materials, and monitoring program implementation 
and evaluation efforts. Funding provided under OJJDP's Drug Prevention 
Demonstration Program is available for programs that address the 
crystal meth problem among juveniles and adolescents.
    OJJDP also administers the Juvenile Accountability Block Grant 
(JAIBG) Program. This program encourages accountability-based reforms 
of juvenile justice systems in states and local jurisdictions. JAIBG 
funds can be used for 12 purpose areas, including building juvenile 
detention facilities, hiring prosecutors, establishing gun and drug 
courts, improving juvenile probation programs and testing youth in the 
juvenile justice system for controlled substances such as crystal meth.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
                september 11th victim compensation fund
    Question. In the Justice Department's fiscal year 2003 Budget 
Request Highlights, the cost for the Special Master to administer the 
September 11th Victim Compensation Fund is listed as $10 million. In 
your opening statement in the Commerce, Justice, State subcommittee 
hearing on the Justice Department's fiscal year 2003 budget requests, 
however, you stated that the Department's budget includes a total of 
$41 million for the administrative costs of the Fund's Special Master. 
Please account for the discrepancies in these numbers.
    On January 17, 2002, I was joined by Senators Kennedy, Schumer and 
Clinton in writing to Special Master Kenneth Feinberg on the Interim 
Final Regulations governing the Fund. Please tell me when you expect 
these regulations to be finalized and released to the public.
    Answer. As you know, Special Master Kenneth R. Feinberg announced 
the Final Rule for the September 11 Victim Compensation Fund on March 
7, after numerous meetings with family members and other interested 
groups, along with the review of thousands of public comments over the 
past few months. A copy of the Final Rule is available at the 
Department of Justice website at ``http://www.usdoj.gov/
victimcompensation.'' MACROBUTTON HtmlResAnchor http://www.usdoj.gov/
victimcompensation.
    As for the apparent discrepancy in budget requests, $41 million is 
indeed the request for administrative costs the $10 million referred to 
in the Budget Request Highlights is the increase over the $31 million 
current services level. The $41 million will fund: additional claims 
examiners, additional Justice Department attorneys and support, the 
walk-in facilities, the hotline, hearing officers, and hearing process 
support including paralegals and space to hold hearings in locations 
where victims live.
    The claims, although smaller in number than previously anticipated, 
will be incredibly complex and require a much higher level of 
individual scrutiny. We therefore project that an increase of $10 
million beyond the annualization of $31 million will be necessary to 
meet the surge of labor-intensive claims.
                   northern border inspector earmark
    Question. I included language in the USA PATRIOT Act authorizing 
tripling the number of Border Patrol agents, the Immigration and 
Naturalization Service (INS) inspectors and Customs Service officers. 
The President's budget builds on what we did through the appropriations 
process last year, and I believe we are on the right path.
    The budget request calls for half of the new Border Patrol 
positions to be on the northern border, but is silent about the 
percentage of new INS Inspector positions to be assigned to the 
northern border. Why not include a similar northern border earmark for 
inspectors?
    Answer. The northern border has been the focus in the deployment of 
new 2002 positions. In fact, 625 (74 percent) of the 848 new 2002 land 
border inspectors have been approved for deployment to the northern 
border. In 2003, INS will deploy additional positions to the northern 
border as appropriate. The focus, however, in fiscal year 2003 will be 
to ensure that the security and integrity of the small southern border 
ports are met as well as addressing traffic management challenges. 
Additional resources will also be dedicated to address the needs for 
Dedicated Commuter Lane processing and Enrollment Centers. INS has, 
therefore, not earmarked positions for one border over another until 
deployment is imminent so that all of the operational field 
requirements can be weighed and prioritized.
          technology funding request under the usa patriot act
    Question. The USA PATRIOT Act authorized $50 million for the INS to 
improve technology for monitoring the northern border and purchase 
additional equipment for use at the border. Have you requested any 
funding in your budget under that authorization? If so, what funding 
requests fall under that authorization? If not, why not?
    Answer. The INS has requested the following technology/equipment 
under this authorization for the northern border and received the funds 
appropriated as part of the fiscal year 2002 Counterterrorism 
supplemental budget for the northern border.

                        [In millions of dollars]
------------------------------------------------------------------------
 Technology/Equipment Requested for Northern
                Border Sectors                  Requested   Appropriated
------------------------------------------------------------------------
Integrated surveillance Intelligence system
 (ISIS):
    Installation of 57 sites at northern              23.6          23.6
     border sectors..........................
    Sensors..................................          8.0           8.0
    Remote video surveillance operations.....          6.0           6.0
                                              --------------------------
      ISIS Subtotal..........................         37.6          37.6
                                              ==========================
Infrared night-vision scopes.................          1.0           1.0
Single-engine helicopters....................          6.0           6.0
                                              ==========================
      Total Northern Border Technology/               44.6          44.6
       Equipment Requested...................
------------------------------------------------------------------------

    In addition, the President's fiscal year 2003 budget includes our 
further requests for technology and related equipment for the northern 
border.
  --$10 million for two twin-engine helicopters to improve border 
        access along the northern border and other critical areas where 
        high mountains, extreme weather conditions and over-water 
        operations are regularly encountered.
  --$28 million, of which approximately $5 million would be for the 
        northern border for 10-print fingerprint machines for the 
        Border Patrol and Joint Terrorism Task Force (JTTF) sites to 
        provide electronic access via livescan devices to the Federal 
        Bureau of Investigation's (FBI) IAFIS and other automated 
        databases; to integrate the 10-print livescan machines with 
        ENFORCE; to complete deployment of the ENFORCE intelligence 
        module; to increase ENFORCE external interfaces; and to provide 
        associated system training and maintenance. The northern border 
        portion of this request is not a standalone request, and could 
        not be accomplished separately from approval of the entire 
        request.
                northern border recruiting and retention
    Question. What steps is the Justice Department taking to fill 
quickly the additional Border Patrol and INS inspector positions for 
which Congress has already appropriated funds? Do you need additional 
funding for recruiting and retention? Have you found increased 
attrition among northern border personnel, who are often receiving only 
one day off a month since the terrorist attacks?
    Answer. The INS is taking a number of aggressive actions to quickly 
fill the additional Border Patrol and inspector positions appropriated 
in fiscal year 2002. These actions are coupled with actions to decrease 
the losses in the Border Patrol agent and immigration inspector 
occupations. Decreasing our losses is key to achieving our fiscal year 
2002 hiring goals.
    We are currently taking the following actions to fill the Border 
Patrol and immigration inspector positions quickly:
  --We have about 300 Border Patrol agents dedicated to the recruiting 
        mission.
  --Recruitment efforts are ongoing at colleges and universities.
  --INS has placed advertising in more than 300 newspapers, magazines 
        and Internet sites. In addition, INS is working on a number of 
        initiatives in support of marketing and ``branding'' (enhancing 
        the image of INS as an employer and promoting INS career 
        opportunities), as well as developing new recruitment 
        pamphlets, recruitment displays, and a television commercial 
        and movie trailers. INS is sponsoring radio traffic reports in 
        five markets, including Washington, D.C.
  --The recruitment announcements for both Border Patrol agents and 
        inspectors have been extended several times.
  --The INS hired 551 new Border Patrol agents by the end of February 
        2002. To hire the remaining 1,956 agents, we currently have 
        43,000 applicants (who have taken or are scheduled to take the 
        written examination) and expect to receive a total of 70,000 
        applications by the end of fiscal year 2002. We currently have 
        8,000 selectees in our hiring queue. These selectees are 
        undergoing background investigations, medical examinations and 
        drug tests.
  --The INS hired 285 new immigration inspectors by the end of February 
        2002. To hire the remaining 1,690 inspectors, we have 
        centralized the selection process at the National Hiring Center 
        in order to streamline the process as much as possible. As a 
        result, we currently have 49,600 applicants (who have taken or 
        are scheduled to take the written examination) and 4,700 
        selectees (who are currently undergoing background 
        investigations, medical examinations and drug tests) in the 
        hiring queue. About half of these selectees are from the 
        centralized selection process begun February 1.
                       postconviction dna review
    Question. The Department sent a response on February 25, 2002, to a 
letter that I sent over 6 weeks ago concerning the Department's 
decision to set aside its plans to offer $750,000 in grant money for 
post-conviction DNA review programs. In response to the simple 
question: ``Does the Department intend to use alternate funds for post-
conviction testing grants?'', the Department response said that the 
National Institute of Justice has been asked to look into DNA 
initiatives.
    Does this mean ``no?'' How is it that the Department cannot find 
$750,000 in a $30.2 billion budget to use for this important program?
    Answer. The Department is working to assist states in improving 
their overall forensic capabilities, as well as the general state of 
information and technology available to the field. In fiscal year 2002, 
the Department's National Institute of Justice (NIJ) will target $66 
million for research to make DNA identification technology more 
portable and inexpensive, enabling law enforcement in the field to 
access it more quickly and easily. Additionally, easier and quicker 
access will enable states to work more effectively in reducing the 
immense DNA sample backlog still existing across the nation. Finally, 
the availability of this new technology will make it possible for 
states to afford to conduct any post-conviction DNA testing they deem 
likely to be of significance in reviewing a conviction. However, the 
Department does not plan to undertake a national effort to promote and 
fund post-conviction DNA.
                     shift in fbi responsibilities
    Question. Director Mueller announced the first phase of his FBI 
reorganization in December, and I praised his action to strengthen FBI 
intelligence, security, and information management. He and Deputy 
Attorney General Thompson are now taking a wider look at ways to 
streamline the FBI responsibilities. This may require a shift in some 
responsibilities from the FBI to other federal and local law 
enforcement agencies in order to focus the FBI on detection, prevention 
and investigation of terrorists. In what areas do you foresee a shift 
in FBI responsibilities?
    Answer. The Director and his management team are now developing a 
comprehensive strategy to permanently shift resources to prevent and 
fight against terrorism. The FBI plans to present this strategy to the 
Department, Administration, and the Congress soon, but is still working 
to identify areas where it can redirect resources without compromising 
investigative priorities or partnerships with law enforcement and other 
government agencies. Given the elevated condition of the current 
terrorist threat to the United States, the FBI must make hard decisions 
to focus its energy and available resources on preventing additional 
terrorist acts and protecting our nation's security. At the same time, 
the FBI will continue to pursue and combat international and national 
organized crime groups and enterprises, civil rights violations, major 
white-collar crime, and serious violent crime; but at a level of effort 
consistent with resources available to support the capabilities of our 
federal, state, and local partners.
                                trilogy
    Question. One of the most important FBI initiatives is the Trilogy 
program for upgrading the Bureau's information technology. The 
Counterterrorism Supplemental for fiscal year 2002 included $237 
million for advanced computer equipment and software under the Trilogy 
program, and the FBI requests another $109.4 million in fiscal year 
2003 for information technology projects including Trilogy. These are 
important investments. From an oversight perspective, however, I am 
disappointed that the Justice Department and the FBI have failed to 
submit quarterly status reports on Trilogy as required in the 
Appropriations Act for fiscal year 2001. Such reports are especially 
important to monitor the effectiveness of planning and testing for new 
software. Will you provide a current status report on Trilogy to the 
Congress as soon as possible?
    Answer. The Department of Justice (DOJ) appreciates the support 
that Congress has given its Trilogy information technology upgrade 
project, and understands the oversight role that Congress plays in 
ensuring that the large amount of funding that it has provided is used 
appropriately. Indeed, Trilogy is one of the FBI's top priorities and 
it must be managed and executed properly.
    The fiscal year 2001 Appropriations Act directed the FBI to submit 
quarterly status reports on the implementation of the Trilogy plan to 
the Appropriations Committees. The DOJ and FBI take this reporting 
requirement seriously and have worked diligently with each other and 
with the Office of Management and Budget over the last year to comply 
with this requirement fully and expedite the review process so that 
timely reports can be transmitted to Congress.
    The first quarterly report was transmitted to Congress on June 29, 
2001. The second and third quarterly reports were jointly transmitted 
to Congress on February 26, 2002.
    The fourth report was prepared by the FBI but it did not include 
the most recent information on accelerated Trilogy implementation. 
Therefore, the FBI decided to submit it with the fifth report to 
provide a more updated and accurate description of the Trilogy program 
as it currently stands. The fifth report reflects recent developments 
regarding Trilogy acceleration and fully explains how the program has 
been accelerated and improved to reflect the FBI's response to the 
terrorist attacks. The fourth and fifth quarterly reports were jointly 
transmitted to Congress on March 19, 2002.
    In summary, DOJ and FBI take reporting requirement responsibilities 
very seriously and remain committed to keeping Congress informed on the 
progress of the Trilogy program. At this time, DOJ has transmitted the 
first five quarterly status reports to Congress. The FBI is currently 
working on the sixth report.
       joint terrorism task forces and anti-terrorism task forces
    Question. On February 26, 2002, the Department responded to my 
December 20, 2001, letter with questions about the FBI and Justice 
Department Terrorism Task Force structures. Over the past 7 years, the 
FBI's Joint Terrorism Task Forces have strengthened counterterrorism 
efforts with full-time participation by other federal agencies and 
state and local police personnel. Director Mueller plans an increase in 
these task forces to all 56 offices, and I support this plan. After the 
September 11th attacks, the Attorney General formed separate Anti-
Terrorism Task Forces in each U.S. Attorney's Office. Former FBI 
executives have publicly raised concerns that the new Task Forces would 
``undermine the capabilities of the nation's primary agency responsible 
for the prevention and investigation of terrorist activity.'' Why does 
the Department need duplicative Task Forces in the U.S. Attorneys' 
Offices?
    Answer. The Joint Terrorism Task Force (JTTF) Program and the Anti-
Terrorism Task Force (ATTF) Program are the mechanisms through which 
the Department of Justice coordinates its anti-terrorism activities. 
JTTFs are focused on investigating terrorism, while the ATTFs are 
responsible for ensuring communication and coordination at more and 
higher levels of government. The missions of these two entities are not 
duplicative.
    JTTFs are established through FBI field offices, and are designed 
for coordinated, operational investigation of terrorist activities. The 
JTTFs are composed of FBI agents and other investigators in federal, 
state, and local law enforcement agencies. All JTTF members must have 
top secret clearances, which grant them access to information that is 
developed throughout the course of an investigation.
    In response to the events of September 11, 2001, the Attorney 
General directed each United States Attorneys Office to establish an 
ATTF for broader coordination of our anti-terrorism efforts across the 
country. The ATTF's three main purposes include: (1) facilitation of 
information sharing between federal and state authorities in order to 
detect and prevent terrorist attacks; (2) coordination of local anti-
terrorism efforts within each district; and (3) serving as a standing 
organizational structure for a coordinated response to any terrorist 
incidents that might occur in the district. The membership of the ATTFs 
include federal, state, and local agencies that can contribute to local 
anti-terrorism efforts, even if they are not directly involved in 
criminal law enforcement. At present, ATTF participants need not have 
security clearances.
    Because the state and local membership of the ATTFs exceed the 
state and local departments represented on JTTFs, the ATTFs also 
provide a force-multiplier when we engage in manpower intensive 
operations. For example, we enlisted the ATTF members to search for and 
locate several thousand non-immigrant aliens in just over 30 days 
without diverting resources necessary for ongoing JTTF investigations.
    The ATTFs include the JTTFs in the federal districts where JTTFs 
exist. In those districts where a JTTF exists, the FBI retains and 
exercises primary operational authority, in coordination and 
consultation with the ATTF and the United States Attorneys Anti-
Terrorism Coordinator, over all JTTF investigative activities that are 
not related to an ongoing prosecution.
                 foreign terrorist tracking task force
    Question. The interagency Foreign Terrorist Tracking Task Force 
(FTTTF) was created in October 2001 to enhance U.S. efforts to prevent 
terrorist activity by ensuring that federal agencies coordinate their 
efforts to bar terrorists and their supporters from entering the United 
States. Please provide the charter for the Task Force and describe its 
specific functions and responsibilities. What is the level of Resources 
and funding provided by the Department to this Task Force in fiscal 
year 2002 and requested for fiscal year 2003?
    Answer. The FTTTF was created by the Attorney General pursuant to 
Homeland Security Presidential Directive-2 (HSPD-2), issued on October 
29, 2001. A copy of this document is attached (Attachment 1). HSPD-2 
directed that the FTTTF ensure that, ``to the maximum extent permitted 
by law, federal agencies coordinate programs to accomplish the 
following: (1) deny entry into the United States of aliens associated 
with, suspected of being engaged in, or supporting terrorist activity; 
and (2) locate, detain, prosecute, or deport any such aliens already 
present in the United States.''
    Since November 1, 2001, government agencies have begun designating 
personnel resources to the FTTTF. Currently, personnel are committed to 
the FTTTF from: DOJ, including FBI, INS, and the Drug Enforcement 
Administration (DEA); the Treasury Department, including the U.S. 
Customs Services; the Department of Health and Human Services, 
including the Social Security Administration; and components of the 
Department of Defense (DOD) and other members of the Intelligence 
Community. Plans are underway for additional agencies to detail 
personnel.
    The FTTTF has identified a number of specific projects which it can 
coordinate or run to fill gaps in existing government efforts relating 
to prevention of terrorist activities. For example, the FTTTF is 
pursuing projects to: (1) create a unified, cohesive lookout list; (2) 
identify foreign terrorists and their supporters who have entered or 
seek to enter the United States or its territories; and (3) detect such 
factors as violations of criminal or immigration law which would permit 
exclusion, detention or deportation of such individuals.
    In addition, the FTTTF is in the process of identifying other 
intelligence-related projects that it can support through its 
collaborative capability to co-locate data from multiple agency 
sources. In this respect, the FTTTF will not duplicate any existing 
governmental activity, but shall supplement and support existing 
functions to promote the interests of national security through 
improved information sharing.
    The Department of Justice has identified for fiscal year 2002 a 
requirement of approximately $20 million in partial year costs to 
support the FTTTF. It is anticipated that in fiscal year 2003, the 
FTTTF will require full year funding to continue operations, as well as 
some additional costs currently being supported by the DOD.
                       anti-terrorism task forces
    Question. If the U.S. Attorneys' Anti-Terrorism Task Forces request 
state or local law enforcement agencies to conduct investigative 
activities for the Justice Department, will those state or local 
investigative activities be coordinated by the FBI and subject to the 
Attorney General's guidelines for FBI investigations?
    Answer. In those districts where an FBI Joint Terrorism Task Force 
(JTTF) exists, the FBI will retain and exercise primary operational 
authority over all JTTF investigative activities. As a result, these 
investigative activities will be coordinated by the FBI and subject to 
the Attorney General's Guidelines. JTTFs are currently authorized in 47 
of the FBI's 56 field offices, and the FBI is seeking to expand the 
program to the remaining 9 field offices.
    In those instances in which there is no JTTF in a district and the 
Anti-Terrorism Task Force (ATTF) requests state or local law 
enforcement agencies to conduct investigative activities, there will be 
some coordination with the FBI in all instances, because the FBI is an 
important participant in each ATTF. The extent and nature of 
coordination with the FBI may vary with the request. For example, in 
the effort to interview non-immigrant aliens, the United States 
Attorneys were specifically directed to coordinate the assignment of 
interviews and the conducting of interviews with the FBI Special Agents 
in Charge in each district. Likewise, the extent to which state and 
local investigative activities are subject to the Attorney's General 
Guidelines may vary. If state and local agencies undertake 
investigative activities with no involvement from the FBI, the 
Guidelines will ordinarily not apply. There may be instances in which 
state and local law enforcement agencies have entered into memorandums 
of understanding with the FBI requiring that the agencies adhere to the 
Guidelines in the course of joint investigations. In such instances, 
the agencies' activities will be subject to the Guidelines.
              professional security officer career program
    Question. The FBI budget includes additional funding of $48.2 
million for Information Assurance and $29.9 million for other security 
programs. How much of these funds will be allocated to the development 
of a career security officer program? What additional funds, if any, 
would be needed to implement a robust security career program including 
security career program boards, identification of career development 
paths, ensuring opportunities for non-special agent personnel, 
providing appropriate security performance appraisals, establishing 
training and experience requirements for security management positions, 
and implementing an education and training program for FBI security 
personnel?
    Answer. The FBI's fiscal year 2003 budget request does not include 
any resources for the development of a professional security officer 
career track. The request does, however, include $2,425,000 to educate 
employees, including security officers, about security policies, 
procedures and methods. Moreover, the FBI anticipates that a workforce 
study being conducted by Resource Consultants Incorporated will assist 
in identifying the knowledge, skills, and abilities required by 
professional Security Officers and will assist in the development of a 
program outline the FBI plans to complete by the end of calendar year 
2002.
    The FBI's recently created Security Division will work with human 
resources personnel during fiscal year 2003 to expand the program 
outline into a career security program, including establishment of 
career security program review boards; identification of career 
development paths; development of critical elements for security 
performance appraisals; establishment of training and experience 
requirements for security management positions; and implementation of a 
comprehensive education and training program for all FBI security 
personnel. The FBI will be in a better position to determine what 
additional resources, if any, will be needed upon completion of program 
development.
 internet-based regional information sharing system and internet-based 
                     law enforcement online program
    Question. The Attorney General's prepared statement says that a 
``critical element in our battle plan against the terrorist threat is 
working to develop and enhance interoperable databases and 
telecommunications systems for the Department's law enforcement 
activities.'' The USA PATRIOT Act authorized the expansion of the 
Internet-based Regional Information Sharing System (RISS) funded by the 
Bureau of Justice Assistance to enhance the investigation and 
prosecution abilities of participating enforcement agencies in 
addressing multi-jurisdictional terrorist conspiracies and activities. 
The FBI has a complementary Internet-based Law Enforcement Online (LEO) 
program that provides public and private controlled multi-level access 
areas for specialized public safety organizations and disciplines. Both 
programs enable state and local governments to collaborate with federal 
agencies and with each other on counterterrorism, homeland security, 
infrastructure protection, and other law enforcement matters. Such 
Internet-based collaboration could include organizations with 
significant roles in homeland security and infrastructure protection. 
Please provide a plan with associated funding requirements for a 
unified Internet-based information architecture including RISS and LEO 
that meets the Department's needs to serve all organizations tasks that 
are necessary for coherent homeland security, infrastructure 
protection, and law enforcement efforts.
    Answer. As reflected in the Attorney General's statement on the 
subject, DOJ regards the interoperability of databases and 
telecommunications systems as a crucial aspect in thwarting terrorism. 
The Department believes that a system combining the strengths of both 
the BJA's Regional Information Sharing System (RISS) and the FBI's Law 
Enforcement Online (LEO) may provide the most effective means of 
achieving this interoperability. Such a system could provide federal 
and non-federal law enforcement agencies varying levels of access to 
information they need to perform their missions more effectively. DOJ 
is continuing study to determine the most feasible manner of combining 
the two systems. The Department is near closure on the issue and will 
be able to provide a plan soon.
    Question. The Attorney General's prepared statement says that he 
aims to establish a National Security Coordination Council (NSCC) of 
the Department of Justice. Please provide the charter for the NSCC. 
What are the specific functions of the NSCC, including its detailed 
responsibilities for policy coordination, resource allocation, 
operations, long-term planning and information sharing? What will be 
its role in foreign counterintelligence and espionage matters, in 
foreign intelligence matters beyond counterterrorism, and in matters 
handled by the Office of Intelligence Policy and Review and the Joint 
Foreign Terrorism Tracking Task Force.
    Answer. The Attorney General's memorandum dated, March 5, 2002, 
entitled, ``Establishment of the National Security Coordination 
Council'' responds to this question.
                            Office of the Attorney General,
                                     Washington, DC, March 5, 2002.
MEMORANDUM FOR HEADS OF DEPARTMENT COMPONENTS
FROM: THE ATTORNEY GENERAL
SUBJECT: Establishment of the National Security Coordination Council

    Nearly five months after the devastating terrorist attacks of 
September 11, 2001, the Department of Justice stands at the forefront 
of President Bush's efforts to secure the American homeland. Throughout 
the Department, we have made great strides toward fully deploying the 
arsenal of justice to combat terrorism, and we have done so without 
compromising our commitment to the rule of law. But there is much work 
to be done.
    The assaults on America that occurred on September 11, and the 
supreme imperative to prevent further terrorist attacks, mandate a more 
coordinated effort to combat terrorism and address other national 
security challenges, both within the Department of Justice, and in the 
Department's interaction with other law enforcement and intelligence 
agencies.
    Therefore, effective immediately, I hereby establish the National 
Security Coordination Council (NSCC) of the Department of Justice, 
which shall be chaired by the Deputy Attorney General. It shall be the 
principal mission of the NSCC to ensure a more seamless coordination of 
all functions of the Department relating to national security, 
particularly the Department's efforts to combat terrorism directed 
against the United States.
    Under the Deputy Attorney General's leadership, the Council will:
  --(1) Centralize and coordinate policy, resource allocation, 
        operations, and long-term planning of DOJ components regarding 
        counter-terrorism, counter-espionage, and other major national 
        security issues;
  --(2) Monitor the implementation of Department policy to ensure that 
        components are taking all necessary and appropriate actions to 
        prevent and disrupt the occurrence of terrorist attacks in the 
        United States;
  --(3) Provide an institutionalized Department forum for crisis 
        management;
  --(4) Promote coordination and information-sharing within the 
        Department, between DOJ and other federal agencies and 
        interagency bodies, and between DOJ and state and local law 
        enforcement authorities, to prevent, prepare for, and respond 
        to terrorist attacks within the United States;
  --(5) Frame national security issues for resolution by the Deputy 
        Attorney General or the Attorney General; and
  --(6) Ensure that positions advanced by the Deputy Attorney General 
        on behalf of DOJ at interagency meetings of the National 
        Security Council, the Homeland Security Council, and other 
        interagency forums reflect input from DOJ national security 
        components.
    In addition to the Deputy Attorney General, the NSCC's members will 
include the following Department officials with responsibility for 
national security matters: Chief of Staff to the Attorney General; FBI 
Director (with appropriate participation by the Executive Assistant 
Director for Counter-Terrorism/Counter-Intelligence); Assistant 
Attorney General, Criminal Division (with appropriate participation by 
the Terrorism and Violent Crime Section, the Office of International 
Affairs, and other Division components); Commissioner of the 
Immigration and Naturalization Service; Assistant Attorney General, 
Office of Justice Programs; and Counsel, Office of Intelligence Policy 
and Review.
    The NSCC will meet on a bi-weekly basis or more frequently as 
needed. In addition to the Deputy Attorney General and the permanent 
members listed above, other senior Department officials as well as 
senior officials from the Central Intelligence Agency and other 
government agencies--will be invited to attend NSCC meetings when 
appropriate. The NSCC will receive staff support from attorneys in the 
Office of the Deputy Attorney General with expertise in national 
security matters, and from ODAG administrative personnel. The functions 
and personnel of the Executive Office of National Security will 
henceforth be incorporated into the NSCC's operations.
    The establishment of the NSCC marks a new chapter in the Department 
of Justice's commitment to protecting the safety and well-being of the 
American people. I call upon all Department officials and employees to 
dedicate themselves to the success of this vital effort.
                      tobacco litigation resources
    Question. The President's budget seeks $25.2 million for litigation 
support in continuing the Justice Department's lawsuit against the 
tobacco industry. Department officials, however, claim that they will 
need up to $45 million in order to comply with fact and expert 
discovery requirements established by the court, and for the litigation 
team to prepare for trial, scheduled to begin in July 2003.
    What is the total funding needed to continue the tobacco 
litigation?
    If the $25 million requested in the President's budget is not 
sufficient to cover all those expenses, where are you getting the rest 
of the money? In other words, what other departments or sources will 
contribute to the costs of the tobacco litigation?
    Answer. During fiscal year 2002, current funding of $38,200,000 is 
sufficient to meet anticipated costs through September 30, 2002. 
Although most of these funds come from the Health Care Fraud and Abuse 
Control account (HCFAC), the Department will cover the $3,000,000 for 
costs of experts that are likely to testify, as well as $1,800,000 for 
a portion of the tobacco team's salaries and benefits.
    With respect to fiscal year 2003, the team will need an estimated 
$44,400,000. The funds will be needed to prepare for and undertake a 
July trial. We anticipate that fiscal year 2003 funding will likely 
come from a combination of sources, as in the past: (1) we have asked 
Congress to approve the $25,200,000 program increase sought in the 
President's budget for litigation support services that the team will 
need to build the factual support for the government; (2) we will 
continue to cover a portion of the salaries and benefits out of our 
base funds of $1,800,000, and we will continue to cover the $3,000,000 
for our testifying experts; and (3) the Department will likely seek to 
use its own HCFAC funding to meet the balance of the estimated tobacco 
litigation expenditures.
    Fiscal year 2003 will continue to be a costly year for the 
litigation. However, some costs are likely to be incurred in fiscal 
year 2004, and perhaps beyond, depending on the outcome of the trial 
and subsequent appeal decisions. Accordingly, we do not have cost 
estimates beyond fiscal year 2003.
               improving state and local law enforcement
    Question. The Administration aims to repackage a number of Justice 
Department grant programs and cut their funding. Grant programs 
targeted for elimination include the State and Local Law Enforcement 
Block Grants, which received $400 million this year; and Byrne law 
enforcement block grants for efforts to improve state and local courts, 
which received $500 million this year. The plan would cut more than 
$1.6 billion from the $2.5 billion appropriated this year for state and 
local law enforcement grants, and would combine what is left into a new 
$800 million Justice Assistance Program. Please explain how the new 
Justice Assistance Program would work, and why state and local law 
enforcement agencies would lose $1.6 billion in the repackaging 
process.
    Answer. The first and overriding priority for the Department is 
counterterrorism. This is reflected throughout our budget, which 
refocuses our resources in support of our top priority. As part of this 
refocusing, the Administration proposes reducing or eliminating several 
grant programs. This redirection within the Justice budget enables our 
law enforcement efforts to increase by 13 percent to address the threat 
posed by terrorism.
    The Justice Assistance Grants (JAG) Program is a formula grant 
program that will provide assistance to states and local governments to 
support a broad range of activities to prevent and control crime and 
improve the criminal justice system. It would replace the Edward Byrne 
Memorial Formula Grant Program and the Local Law Enforcement Block 
Grant (LLEBG) Program with a single funding mechanism that will allow 
easier administration by both grantees and the Bureau of Justice 
Assistance (BJA). The President's budget for fiscal year 2003 proposes 
this new program, funded under the Community Oriented Policing Service 
(COPS) appropriation account, at the $800 million level. This 
represents a reduction of only $195 million from the combined Byrne and 
LLEBG funding enacted in last year's CJS appropriations bill. This does 
not include the one-time, supplemental appropriation to the Byrne 
program for counterterrorism grants.
    Activities funded under the current Byrne Formula Program or LLEBG 
program would continue to be eligible for funding. Funds provided to 
states may be used for statewide initiatives, technical assistance and 
training, and support for local jurisdictions. Local jurisdictions can 
work together with other local jurisdictions to develop regional 
projects supported by their JAG funds.
    There are several advantages to the new program:
  --Simplifies and Streamlines Policies, Practices, and Procedures.--
        Along with combining funding streams for programs of similar 
        purposes, the JAG streamlines reporting requirements and 
        reduces general administrative tasks at federal, state and 
        local levels.
  --Enhances State and Local Control.--Grantees will have greater 
        flexibility to use funds, enhancing their ability to address 
        community problems with a wider variety of solutions.
  --Supports Collaboration and Communication.--The consolidation 
        encourages greater sharing of information and coordination 
        between state and local governments.
  --Promotes Best Practices.--The consolidation will enhance the 
        ability of federal, state, and local governments to exchange 
        new and successful practices.
    As reflected throughout the fiscal year 2003 President's budget, 
the primary and overarching priority for the Department is to bolster 
resources to respond more effectively to the threat of terrorism. As a 
result, the Department had to redirect existing resources from other 
program areas. Overall, the Office of Justice Programs is requesting a 
decrease of $1.651 billion from the 2002 enacted level for the State 
and Local Law Enforcement Assistance appropriation account. This 
decrease includes the proposed elimination of the Byrne formula and the 
LLEBG programs ($900 million), largely offset by the $800 million 
requested under the COPS appropriation account for the JAG.
    Other decreases requested include the proposed reduction to the 
Juvenile Accountability Incentives Block Grant program of $34.45 
million and the proposed elimination of the State Criminal Assistance 
Alien Assistance ($565 million), Tribal Prison Construction ($35.191 
million), Missing Alzheimers ($.898 million), Edward Byrne 
Discretionary Grants ($94.489 million), Cooperative Agreement ($20 
million), Victims of Trafficking ($10 million), and Motor Vehicle Theft 
Prevention programs ($1.298 million). Increases are proposed for RSAT 
(+$7 million), Drug courts (+$2 million), and technical assistance on 
hate crimes prevention (+$1.3 million). While assistance to state and 
local jurisdictions is reduced in the Department's budget, significant 
new resources are requested for state and local jurisdictions in the 
Federal Emergency Management Agency's budget of $3.5 billion.
                      civil rights and hate crimes
    Question. In connection with the Judiciary Committee's December 6, 
2001 oversight hearing and again at the February 26, 2002 Commerce, 
Justice, State Appropriations Subcommittee hearing, you were asked for 
the Department of Justice's position on S. 625, hate crimes legislation 
that was reported by the Judiciary Committee to the full Senate on July 
26, 2001. Your written response to the Judiciary Committee's prior 
questions indicated support for more limited legislation previously 
sponsored by Senator Hatch and not even introduced in this Congress, 
without expressing any views on S. 625, the pending legislation and the 
focus of the question. Again, at you more recent appearance on February 
26, 2002, you did not give a firm position on S. 625. Given your 
willingness to express a specific view on other legislation from prior 
Congresses, and the fact that S. 625 is the bill that has actually been 
reported to the full Senate, we again ask that you please provide the 
Department's views on S. 625.
    Answer. The Department's position on the pending hate crimes 
legislation is informed by our recent experience in responding to bias-
motivated crimes which have unfortunately arisen in the wake of the 
tragic events of September 11. Since that date, the Civil Rights 
Division, which prosecutes bias-motivated crimes under several existing 
federal statutes, has investigated 350 cases of alleged discriminatory 
backlash against individuals perceived to be of Middle-Eastern origin, 
including Arab Americans, Muslim Americans, Sikh Americans, and South-
Asian Americans. These cases are more specifically described in the 
next answer.
    Additionally, the Department recently indicted Darrell David Rice 
for the 1996 murder of Julianne Marie Williams and Laura ``Lollie'' S. 
Winans in the Shenandoah National Park. The four-count murder 
indictment specifically invokes a federal sentencing enhancement that 
was enacted to insure justice for victims of hate crimes. In this case, 
the federal sentencing enhancement provides for increased punishment if 
the fact finder at trial or, in the case of a plea of guilty or nolo 
contendere, the court at sentencing determines beyond a reasonable 
doubt that Rice intentionally selected either victim as the object of 
the offence because of the victim's actual or perceived gender or 
sexual orientation. If convicted of any of the charges in the 
indictment, Rice could face the death penalty.
    The Department of Justice appreciates the leadership Senators 
Kennedy and Hatch, as well as other members of Congress, have shown on 
the vital issue of hate crimes. Your leadership is reflected in the 
fact that the Senate Judiciary Committee has now voted to send S. 625 
to the full Senate. As your question notes, in my previous responses to 
the Committee I observed that then-Governor Bush indicated during the 
Presidential campaign that he supported Senator Hatch's proposed hate 
crimes legislation, which was introduced during the 106th Congress and 
which shares several features with S. 625. As I explained in my earlier 
response, these common features include provision by the Attorney 
General of assistance in the investigation or prosecution of any 
violent crime that constitutes a felony and is motivated by animus 
against the victim by reason of the membership of the victim in a 
particular class or group; grants by the Attorney General to state and 
local entities to assist in the investigation and prosecution of such 
crimes; and the appropriation of $5,000,000 for the next 2 fiscal years 
to carry out the grant program.
    As you know, S. 625 is an important proposal which would amend the 
federal criminal code in numerous significant respects. The Department 
of Justice continues to review and evaluate the constitutional and 
policy issues raised by the proposed amendments to the federal criminal 
code in S. 625. At the same time, we are continuing to fulfill our 
important mission of enforcing the existing laws relating to bias-
motivated crimes that fall within federal jurisdiction under existing 
law.
    Question. S. 625 is particularly critical now since that 
legislation would both broaden federal hate crimes jurisdiction and 
provide support for state prosecutions. You noted in your written 
responses based on your December 6, 2002 testimony and it was brought 
up again at the February 25 hearing that the FBI has commenced 
approximately 300 federal criminal investigations involving post-
September 11 attacks on Arab or Muslim Americans, or others, based upon 
their actual or perceived ethnicity. You indicate, however, that to 
date there have only been 8 federal cases resulting from these 
approximately 300 investigations. In short, there has been no federal 
prosecution in over 97 percent of these investigations. Please advise 
how many of these investigations: (a) have been closed, (b) have been 
referred to state authorities, or (c) are still being actively 
investigated by federal authorities? What criteria or factors are used 
to determine whether a case will be referred to a state or local law 
enforcement agency to handle and what, if any, is the federal role 
after such a referral?
    Answer. Since September 11, the Civil Rights Division (CRT), FBI, 
and United States Attorneys' offices have investigated over 300 alleged 
incidents involving violence or threats against individuals perceived 
to be of Middle-Eastern origin, including Arab Americans, Muslim 
Americans, Sikh Americans, and South-Asian Americans.
    Of the over 300 federal investigations that have been initiated 
since September 11, 75 of the investigations have been closed and 274 
investigations remain open. Sixty-five of the federal investigations 
have been or are being prosecuted by state and local prosecutors 
following coordination and cooperation with federal investigators and 
federal prosecutors. Although the Department of Justice does not have 
knowledge of every state and local case prosecuted since September 11, 
we have information indicating that state and local authorities are 
actively pursuing additional cases. The CRT and the United States 
Attorney's offices continue to coordinate with local prosecutors in 
instances where cases are being prosecuted locally and where there are 
also potential federal crimes that have not been charged to consider 
whether plea bargains can resolve both local and federal criminal 
liability.
    To date, federal charges have been brought in 10 cases, and the CRT 
and United States Attorneys' offices are working together to prosecute 
those cases. In those cases, the Department of Justice believed that 
there was an overriding federal interest in prosecuting an alleged 
backlash crime that could otherwise be prosecuted locally. The factors 
the Justice Department takes into account in making this determination 
are: (1) the resources of the local law enforcement agency, both legal 
and financial; (2) whether the local prosecution, if completed, 
achieved a fair and just result; (3) the potential national deterrent 
value of a federal prosecution in a given instance; and (4) whether 
other federal interests are implicated, such as the protection of 
federal government officials. After the Department has determined in a 
case of dual jurisdiction to allow state and local authorities to 
prosecute in the first instance, the Department closely monitors the 
course of the local prosecution.
                     crimes against arab americans
    Question. Immediately after the September 11 terrorist attacks, we 
were reminded of the importance of federal civil rights enforcement by 
the rash of crimes against Arab and Muslim Americans after the 
September 11 attacks. These acts, and indeed all acts of 
discrimination, cut at the very heart of what the terrorists hope to 
destroy in the United States our tolerance and our diversity. The 
budget request does not appear to match the rhetoric with the resources 
needed to maintain the Department's longstanding leadership role in 
national civil rights enforcement during these difficult times.
    In recent answers to questions which you provided based upon your 
December 6, 2001 appearance at the Senate Judiciary Committee, you note 
that the FBI has commenced approximately 300 federal criminal 
investigations involving post-September 11 attacks on Arab or Muslim 
Americans, or others, based upon their actual or perceived ethnicity. 
You indicate, however, that to date there have only been eight federal 
cases resulting from these approximately 300 investigations. In short, 
there has been no federal prosecution in over 97 percent of these 
investigations. Why is it that the Department is prosecuting so few of 
these violent crimes?
    Answer. The Department of Justice is committed to prosecuting 
vigorously the laws of the United States. Since September 11, CRT, FBI, 
and United States Attorneys' offices have investigated over 300 alleged 
incidents involving violence or threats against individuals perceived 
to be of Middle-Eastern origin, including Arab Americans, Muslim 
Americans, Sikh Americans, and South-Asian Americans.
    Of the over 300 federal investigations that have been initiated 
since September 11, 75 of the investigations have been closed and 274 
investigations remain open. Sixty-five of the federal investigations 
have been or are being prosecuted by state and local prosecutors 
following coordination and cooperation with federal investigators and 
federal prosecutors. Although the Department of Justice does not have 
knowledge of every state and local case prosecuted since September 11, 
we have information indicating that state and local authorities are 
actively pursuing additional cases. The CRT and the United States 
Attorney's offices continue to coordinate with local prosecutors in 
instances where cases are being prosecuted locally and where there are 
also potential federal crimes that have not been charged to consider 
whether plea bargains can resolve both local and federal criminal 
liability.
    To date, federal charges have been brought in 10 cases, and the CRT 
and United States Attorneys' offices are working together to prosecute 
those cases. In those cases, the Department of Justice believed that 
there was an overriding federal interest in prosecuting an alleged hate 
crime that could otherwise be prosecuted locally. The factors the 
Justice Department takes into account in making this determination are: 
(1) the resources of the local law enforcement agency, both legal and 
financial; (2) whether the local prosecution, if completed, achieved a 
fair and just result; (3) the potential national deterrent value of a 
federal prosecution in a given instance; and (4) whether other federal 
interests are implicated, such as the protection of federal government 
officials. After the Department has determined in a case of dual 
jurisdiction to allow state and local authorities to prosecute in the 
first instance, the Department closely monitors the course of the local 
prosecution.
    We are pleased to note that cooperation between federal agents and 
local law enforcement officers and between Justice Department 
prosecutors and local prosecutors has been outstanding. This is a 
testament to local law enforcement nationwide, which has shown the 
willingness to, and which has largely been given the legal and 
financial resources to, investigate and prosecute vigorously alleged 
bias-motivated crimes against individuals perceived to be of Middle-
Eastern origin, including Arab Americans, Muslim Americans, Sikh 
Americans, and South-Asian Americans. The Department is aware that, in 
rare instances, local authorities may not have the tools or the will to 
prosecute a particular bias-motivated crime fully. In those rare 
instances, the Department will be prepared to initiate federal 
proceedings, if appropriate.
    America is well-served by our partners in state and local law 
enforcement. If the post-September 11 alleged incidents of violence 
were a test of local efforts to prosecute bias-motivated crimes, local 
law enforcement passed with flying colors.
    Question. Even counting all state prosecutions, no matter how 
minor, you stated that there are less than 60 total cases out of 300 
investigations. Why is it that in 80 percent of these violent cases no 
one at all has been prosecuted in any way? How is the decision made 
whether a case will be federally prosecuted or referred to the state 
and what is the federal role after such a referral?
    Answer. The Department of Justice is committed to prosecuting 
vigorously the laws of the United States. Since September 11, CRT, FBI, 
and United States Attorneys' offices have investigated over 300 alleged 
incidents involving violence or threats against individuals perceived 
to be of Middle-Eastern origin, including Arab Americans, Muslim 
Americans, Sikh Americans, and South-Asian Americans.
    Of the over 300 federal investigations that have been initiated 
since September 11, 75 of the investigations have been closed and 274 
investigations remain open. Sixty-five of the federal investigations 
have been or are being prosecuted by state and local prosecutors 
following coordination and cooperation with federal investigators and 
federal prosecutors. Although the Department of Justice does not have 
knowledge of every state and local case prosecuted since September 11, 
we have information indicating that state and local authorities are 
actively pursuing additional cases. The CRT and the United States 
Attorney's offices continue to coordinate with local prosecutors in 
instances where cases are being prosecuted locally and where there are 
also potential federal crimes that have not been charged to consider 
whether plea bargains can resolve both local and federal criminal 
liability.
    To date, federal charges have been brought in 10 cases, and the CRT 
and United States Attorneys' offices are working together to prosecute 
those cases. In those cases, the Department of Justice believed that 
there was an overriding federal interest in prosecuting an alleged hate 
crime that could otherwise be prosecuted locally. The factors the 
Justice Department takes into account in making this determination are: 
(1) the resources of the local law enforcement agency, both legal and 
financial; (2) whether the local prosecution, if completed, achieved a 
fair and just result; (3) the potential national deterrent value of a 
federal prosecution in a given instance; and (4) whether other federal 
interests are implicated, such as the protection of Federal Government 
officials. After the Department has determined in a case of dual 
jurisdiction to allow state and local authorities to prosecute in the 
first instance, the Department closely monitors the course of the local 
prosecution.
    Many of the alleged incidents that have been investigated by the 
Department of Justice have been closed, the alleged incidents are still 
being actively investigated, the Department is coordinating with local 
prosecutors to consider whether plea bargains can resolve both local 
and federal criminal liability, or the Department has determined in 
cases of dual jurisdiction to allow state and local authorities to 
prosecute in the first instance. The Department of Justice closes 
investigations when the facts indicate that there is no prosecutable 
federal crime or when a companion state or local prosecution has 
achieved a fair and just result that requires no subsequent federal 
prosecution.
    Question. You also noted in your prior written responses to 
questions that there have been approximately 50 state or local cases 
involving hate crimes after the September 11 attacks. Are these 50 
cases included in the same 300 investigations you set forth above? 
Please provide the following information regarding each of the state 
cases to which you refer: (a) identify the state or jurisdiction in 
which each case is pending, (b) indicate whether each state charge was 
a felony or misdemeanor, and (c) provide any available information 
regarding the dispositions and the punishments received, if any.
    Answer. Of the over 300 federal investigations that have been 
initiated since September 11, 75 of the investigations have been closed 
and 274 investigations remain open. Sixty-five of the federal 
investigations have been or are being prosecuted by state and local 
prosecutors following coordination and cooperation with federal 
investigators and federal prosecutors.
    Please see Attachment 2 for the information about state and local 
prosecutions of which the Department of Justice is aware. Where the 
Department is not aware of certain requested facts pertaining to these 
state and local prosecutions, the entry is left blank.
    Question. What criteria are being employed to determine whether a 
hate crime case will be prosecuted in federal or state court? In how 
many of these state prosecutions was federal prosecution legally 
possible, but forgone in lieu of a state case?
    Answer. Since September 11, CRT, FBI, and United States Attorneys' 
offices have investigated over 300 alleged incidents involving violence 
or threats against individuals perceived to be of Middle-Eastern 
origin, including Arab Americans, Muslim Americans, Sikh Americans, and 
South-Asian Americans.
    Of the over 300 federal investigations that have been initiated 
since September 11, 75 of the investigations have been closed and 274 
investigations remain open. Sixty-five of the federal investigations 
have been or are being prosecuted by state and local prosecutors 
following coordination and cooperation with federal investigators and 
federal prosecutors. Although the Department of Justice does not have 
knowledge of every state and local case prosecuted since September 11, 
we have information indicating that state and local authorities are 
actively pursuing additional cases. The CRT and the United States 
Attorney's offices continue to coordinate with local prosecutors in 
instances where cases are being prosecuted locally and where there are 
also potential federal crimes that have not been charged to consider 
whether plea bargains can resolve both local and federal criminal 
liability.
    To date, federal charges have been brought in 10 cases, and the CRT 
and United States Attorneys' offices are working together to prosecute 
those cases. In those cases, the Department of Justice believed that 
there was an overriding federal interest in prosecuting an alleged hate 
crime that could otherwise be prosecuted locally. The factors the 
Justice Department takes into account in making this determination are: 
(1) the resources of the local law enforcement agency, both legal and 
financial; (2) whether the local prosecution, if completed, achieved a 
fair and just result; (3) the potential national deterrent value of a 
federal prosecution in a given instance; and (4) whether other federal 
interests are implicated, such as the protection of federal government 
officials. After the Department has determined in a case of dual 
jurisdiction to allow state and local authorities to prosecute in the 
first instance, the Department closely monitors the course of the local 
prosecution.
    Many of the alleged incidents that have been investigated by the 
Department of Justice have been closed, the alleged incidents are still 
being actively investigated, the Department is coordinating with local 
prosecutors to consider whether plea bargains can resolve both local 
and federal criminal liability, or the Department has determined in 
cases of dual jurisdiction to allow state and local authorities to 
prosecute in the first instance. The Department of Justice closes 
investigations when the facts indicate that there is no prosecutable 
federal crime or when a companion state or local prosecution has 
achieved a fair and just result that requires no subsequent federal 
prosecution.
    Question. The Judiciary Committee has asked the Attorney General in 
written questions for information about the process used for reviewing 
potential hate crimes cases within the Department of Justice, including 
which officials were involved and to what extent the process differs 
from the review to which other cases are subjected. Your reply simply 
provided the name of the top official with final certification 
authority in hate crimes prosecutions. In order for Congress, in both 
its oversight and legislative roles, to evaluate whether the extremely 
low federal hate crime prosecution rate is due to the narrow scope of 
the current law, policy based decisions of the Department of Justice to 
forgo federal prosecution in these cases, inadequate resources devoted 
to this problem or some other reason, a more thorough response 
describing how the review process in these cases differs from other 
criminal cases would be helpful. For this reason, please provide a more 
complete response to this question. Specifically, please advise what 
guidelines or policies, if any, are in place to ensure that these cases 
are handled appropriately? Please explain why fewer than 3 percent of 
these allegations have resulted in federal prosecution at a time when 
the President is publicly condemning such violent acts?
    Answer. The process of determining whether to initiate a 
prosecution pursuant to 18 Sec. 245 begins after FBI has investigated 
the alleged crime in coordination with CRT and United States Attorneys' 
offices. After the investigation is completed, attorneys in the 
Criminal Section of CRT deliberate with Assistant Attorney General 
Ralph F. Boyd, Jr. and other attorneys within the Office of the 
Assistant Attorney General. Per section 245(a)(1), no prosecution can 
be undertaken except upon the certification of the Attorney General, 
the Deputy Attorney General, the Associate Attorney General, or any 
Assistant Attorney General specially designated by the Attorney 
General. The Attorney General has specially designated Assistant 
Attorney General Boyd as the person who must certify that a prosecution 
under section 245 may go forward.
    With respect to the absolute number of federal prosecutions, the 
Department credits the outstanding cooperation between federal agents 
and local law enforcement officers and between Justice Department 
prosecutors and local prosecutors. This is a testament to local law 
enforcement nationwide, which has shown the willingness to, and which 
has largely been given the legal and financial resources to, vigorously 
investigate and prosecute alleged bias-motivated crimes against 
individuals perceived to be of Middle-Eastern origin, including Arab 
Americans, Muslim Americans, Sikh Americans, and South-Asian Americans. 
The Department is aware that, in rare instances, local authorities may 
not have the tools or the will to prosecute a given bias-motivated 
crime fully. In those rare instances, the Department will be prepared 
to initiate federal proceedings, if appropriate.
                     mississippi redistricting plan
    Question. The President's budget request did not call for any 
additional resources for the Department's Voting Rights Section, even 
though the recent press reports about the Department's role in blocking 
a redistricting plan for congressional seats in Mississippi are 
disturbing. During your confirmation hearing, you recognized that 
``[v]oting is a fundamental civil right'' and pledged if confirmed that 
you would ``work aggressively and vigilantly to enforce federal voting 
rights laws.'' You assured this Committee that ``[i]t will be a top 
priority of a Bush Department of Justice, part of what I hope would be 
its legacy.'' In addition, in your testimony today, you reemphasized 
the importance of the right to vote in the context of implementing 
election reform.
    Nevertheless, according to recent reports, the Department's belated 
request for additional information regarding the Mississippi 
redistricting plan proposed by elected Mississippi state legislators 
and approved by a state judge put that plan at risk of being supplanted 
by an alternative plan that is ``favorable to Republican candidates,'' 
and was ordered by what is described as ``a panel of white Republican-
appointed federal judges.'' The alternative plan may be imposed based 
not upon that plan's merits but rather based upon scheduling concerns 
stemming from the Department's foot-dragging in the matter. These 
allegations are serious and necessitate prompt responses explaining the 
Department's actions.
    Answer. The Department's request for additional information was 
sent to the Mississippi Attorney General on February 14, 2002, well 
within the statutorily-imposed 60-day deadline for making 
determinations under section 5 of the Voting Rights Act of 1965. 
Subsequently, in light of the ruling of the three-judge federal court 
that the state's plan is unconstitutional, the Department sent a 
routine ``no determination'' letter to the Mississippi Attorney General 
informing him that the Department would take no further action at this 
time. The Department of Justice has never failed to meet its 
obligations under section 5 of the Voting Rights Act of 1965 within the 
prescribed statutory time frames. In the past year, the Department has 
received over 5,000 section 5 submissions encompassing more than 15,000 
voting changes, and has never missed a deadline.
    Question. When did the Department first receive the redistricting 
plan?
    Answer. On December 26, 2001, the Mississippi Attorney General 
submitted three voting changes, including the congressional 
redistricting plan adopted by the Chancery Court for the First Judicial 
District of Hinds County, Mississippi, to the Department. The other two 
voting changes submitted for approval involved the creation of a state 
legislative committee to address redistricting and a state supreme 
court decision, on writ of mandamus, allowing a chancery court to draw 
a congressional redistricting plan.
    Question. Who within the Department was assigned the task of 
reviewing the plan, and how long did that review take?
    Answer. The Voting Section of the Civil Rights Division reviewed 
the voting changes submitted by the Mississippi Attorney General in 
accordance with its usual procedures for reviewing submissions to the 
Department pursuant to section 5 of the Voting Rights Act of 1965. On 
February 14, 2002, the Department asked the Mississippi Attorney 
General for more information concerning certain changes and advised him 
of legal concerns regarding whether the submission was final. Also on 
February 14, 2002, in an attempt to expedite the Department's decision-
making process, Assistant Attorney General Ralph F. Boyd, Jr. sent a 
letter to the Supreme Court of Mississippi, respectfully requesting the 
expedited consideration of the state court appeal. On February 19-20, 
2002, the Department received additional information from the 
Mississippi Attorney General, but the Department never received a 
response from the Supreme Court of Mississippi.
    Question. Were any memoranda or recommendations prepared by the 
Voting Rights Section in connection with the initial review of the 
redistricting plan and, if so, please provide for each memoranda: the 
date, the author, the recipients and a description of the document?
    Answer. Attorneys in the Voting Section prepared memoranda 
regarding the redistricting plan, in accordance with their usual 
procedures regarding pre-clearance matters submitted to the Department 
pursuant to section 5 of the Voting Rights Act of 1965. The Department 
has substantial confidentiality interests in such memoranda because of 
concerns that their disclosure would chill the candid internal exchange 
of information about particular law enforcement decisions. We believe 
that this confidentiality is important to ensuring the robust 
deliberations within the Department and the integrity of our decision-
making process.
    Question. On what date did career trial attorneys in the Voting 
Rights Section make any recommendations about the redistricting plan, 
and to whom did they make those recommendations?
    Answer. We appreciate your interest in the Mississippi 
redistricting plan and hope that you will appreciate the Department's 
substantial confidentiality interests in the internal deliberations 
within CRT relative to this law enforcement matter. Department 
decision-makers have long been concerned that disclosure of information 
about internal deliberations regarding particular matters would make it 
more difficult for them to obtain the candid advice and recommendations 
of their subordinates. We would like to explore other alternatives for 
accommodating your oversight interests such as through a briefing by 
Assistant Attorney General Boyd about the decisions that he made in 
this matter, as suggested in his letter of March 19, 2002.
    Question. Who reviewed the recommendations of the Voting Rights 
Section about the Mississippi redistricting plan?
    Answer. The Mississippi redistricting plan was reviewed in 
accordance with CRT's usual procedures regarding section 5 submissions 
and Assistant Attorney General Ralph F. Boyd, Jr. decided to send the 
letters, dated February 14, 2002, which requested additional 
information from the Mississippi Attorney General and sought expedited 
consideration from the Mississippi Supreme Court.
    Question. How much time passed after the career employees in the 
Voting Rights Section made initial recommendations on the Mississippi 
plan to the office of the Assistant Attorney General, Civil Rights 
Division, and the Department's questions to the State of Mississippi?
    Were any changes made in the recommendations of the Voting Rights 
Section referred to above and, if so, what were those changes?
    Did the Department take the actions initially recommended by the 
career trial attorneys in the Voting Rights Section and, if not, please 
explain how any actions taken by the Department differed from those 
initial recommendations?
    Answer. With regard to these questions, as indicated above, the 
Department has substantial confidentiality interests in its internal 
deliberations regarding law enforcement matters, because we want to 
protect the candid exchange of views, including advice and 
recommendations, that we believe is essential to the integrity of our 
decision-making processes. We would like to accommodate your oversight 
interests in the Department's decisions regarding the Mississippi 
redistricting plan in a manner that avoids these concerns. As indicated 
in his letter, March 19, 2002. Assistant Attorney General Boyd would be 
pleased to brief you at your earliest convenience about his decisions 
in this matter.
    Question. When does the Department expect make a final preclearance 
decision on the Mississippi redistricting plan now that the state's 
Attorney General has submitted answers to the Department's belated 
questions?
    Answer. On February 26, 2002, a three-judge panel sitting in the 
United States District Court for the Southern District of Mississippi 
held that the adoption of the chancery court's plan violated Article I, 
Section 4 of the United States Constitution and was, therefore, 
unconstitutional and a nullity. Requests for a stay of the District 
Court's order were denied by the United States Supreme Court. The 
Supreme Court is not expected to determine fully whether the plan is 
constitutional until its next term. In light of the District Court's 
action, the Department has not taken further action, and on April 1, 
2002 the Department sent a ``no determination'' letter to Mississippi 
notifying it of the Department's position. We will closely monitor the 
appeal in this case.
    Question. Do you believe that the Voting Rights Section is able to 
perform its statutory duties, including completion of preclearance 
reviews in a timely fashion? If so, please explain why?
    Answer. The Voting Section has sufficient resources to fulfill its 
obligations. The Section has successfully shifted some resources 
internally to accommodate the numerous voting changes enacted as a 
result of the 2000 Census. The Department of Justice has never failed 
to meet its obligations under section 5 of the Voting Rights Act of 
1965 within the prescribed statutory time frames. In the past year, the 
Department has received over 5,000 section 5 submissions, encompassing 
more than 15,000 voting changes, and has never missed a deadline.
                         civil rights division
    Question. The President's budget for the rest of the Civil Rights 
Division did not propose any of the increases recommended for the 
Department's other components. Your assurances about the Department's 
continued commitment to strong civil rights enforcement and, in 
particular, your responses to the following questions would be 
appreciated.
    Have the Department's internal priorities in civil rights 
enforcement changed in the last year?
    Answer. The Department's current civil-rights priorities include 
(in no particular order): (1) the enforcement of the Americans with 
Disabilities Act of 1990 and the implementation of the Olmstead v. L.C. 
decision; (2) the enforcement of statutes prohibiting migrant smuggling 
and human trafficking, including the Trafficking Victims Protection Act 
of 2000; (3) the investigation and prosecution of alleged incidents 
involving violence or threats against individuals perceived to be of 
Middle-Eastern origin, including Arab Americans, Muslim Americans, Sikh 
Americans, and South-Asian Americans, and the coordination of outreach 
efforts to individuals and organizations from those communities to 
provide information about government services; and (4) the enforcement 
of voting rights and the provision of resources to state and local 
governments on voting reform.
    Question. Please provide the Committee with any documents 
reflecting enforcement policies, priorities or directions to the U.S. 
Attorneys' Offices or to the Civil Rights Division.
    Answer. Please see documents in Attachment 3.
    Question. Please provide the Committee with any documents 
reflecting an evaluation over the last year of the propriety or 
correctness of any legal arguments which the Department of Justice has 
made in previous civil rights enforcement actions.
    Answer. The Department constantly evaluates the propriety and 
correctness of its legal arguments in light of evolving judicial 
precedence and the evidentiary records in particular matters. Its 
briefs and other statements of legal positions filed in law enforcement 
related litigation reflect these continuing developments. As indicated 
above, the Department has substantial confidentiality interests in 
internal documents reflecting its deliberations regarding legal 
positions in individual matters.
     tax division and environmental and natural resources division
    Question. The President's budget also calls for cuts in the 
Environmental and Natural Resources Division and the Tax Division. 
These are the Department's components responsible for enforcing the 
environmental laws and bringing cases against tax evaders. Given the 
recent tax cuts and changes over the last year in the nation's 
environmental regulatory scheme, aggressive enforcement of the 
remaining tax and environmental laws should be a priority. Please 
explain in detail how the Department plans to implement these cuts in 
the Tax Division and the ENRD?
    Answer. The request for the Tax Division includes a decrease of 
$1.1 million in salaries and expenses below the current services level, 
which equates to a reduction in 10 positions.
    The Tax Division is fully committed to the fair, vigorous, and 
uniform enforcement of the tax laws, and will continue to prosecute tax 
crimes and defend and pursue civil claims. We expect to absorb the 
requested budget decrease in part by streamlining processes, increasing 
productivity, resolving cases in a more cost-effective manner, and 
devoting more resources earlier to precedent-setting cases.
    Additionally, the President's budget includes a proposal to move 
certain tax collection due process proceedings from the United States 
District Courts to the United States Tax Court, which will relieve the 
Tax Division of the burden of handling those cases.
    Tax Division's budget for fiscal year 2000 through 2003:

                                                                 Million

Fiscal year 2000 appropriation.................................... $67.2
Fiscal year 2001 appropriation....................................  70.8
Fiscal year 2002 enacted..........................................  73.8
Fiscal year 2003 President's budget...............................  75.5

    The Environment and Natural Resources Division will be able to 
absorb the fiscal year 2003 cut of $1,085,000 and 8 positions in the 
Environmental Enforcement Section through attrition. In the past 5 
years, the Environmental Enforcement Section has had annual turnover of 
25-35 people each year. We plan to absorb this cut reduce staff by 
replacing 8 fewer staff.
    The Environment and Natural Resources Division will continue to 
bring cases to address pollution problems in the United States. The 
proposed reduction in the number of staff who handle civil enforcement 
cases is necessary so that resources can be focused on counterterrorism 
efforts.
Attachment 1.--Homeland Security Presidential Directive-2--October 29, 
                                  2001
                             Office of the Press Secretary,
                                                  October 30, 2001.
SUBJECT: Combating Terrorism Through Immigration Policies
A. National Policy
    The United States has a long and valued tradition of welcoming 
immigrants and visitors. But the attacks of September 11, 2001, showed 
that some come to the United States to commit terrorist acts, to raise 
funds for illegal terrorist activities, or to provide other support for 
terrorist operations, here and abroad. It is the policy of the United 
States to work aggressively to prevent aliens who engage in or support 
terrorist activity from entering the United States and to detain, 
prosecute, or deport any such aliens who are within the United States.
            1. Foreign Terrorist Tracking Task Force
    By November 1, 2001, the Attorney General shall create the Foreign 
Terrorist Tracking Task Force (Task Force), with assistance from the 
Secretary of State, the Director of Central Intelligence and other 
officers of the government, as appropriate. The Task Force shall ensure 
that, to the maximum extent permitted by law, Federal agencies 
coordinate programs to accomplish the following: (1) deny entry into 
the United States of aliens associated with, suspected of being engaged 
in, or supporting terrorist activity; and (2) locate, detain, 
prosecute, or deport any such aliens already present in the United 
States.
    The Attorney General shall appoint a senior official as the full-
time Director of the Task Force. The Director shall report to the 
Deputy Attorney General, serve as a Senior Advisor to the Assistant to 
the President for Homeland Security, and maintain direct liaison with 
the Commissioner of the Immigration and Naturalization Service (INS) on 
issues related to immigration and the foreign terrorist presence in the 
United States. The Director shall also consult with the Assistant 
Secretary of State for Consular Affairs on issues related to visa 
matters.
    The Task Force shall be staffed by expert personnel from the 
Department of State, the INS, the Federal Bureau of Investigation, the 
Secret Service, the Customs Service, the Intelligence Community, 
military support components, and other federal agencies as appropriate 
to accomplish the Task Force's mission.
    The Attorney General and the Director of Central Intelligence shall 
ensure, to the maximum extent permitted by law, that the Task Force has 
access to all available information necessary to perform its mission, 
and they shall request information from State and local governments, 
where appropriate.
    With the concurrence of the Attorney General and the Director of 
Central Intelligence, foreign liaison officers from cooperating 
countries shall be invited to serve as liaisons to the Task Force, 
where appropriate, to expedite investigation and data sharing.
    Other federal entities, such as the Migrant Smuggling and 
Trafficking in Persons Coordination Center and the Foreign Leads 
Development Activity, shall provide the Task Force with any relevant 
information they possess concerning aliens suspected of engaging in or 
supporting terrorist activity.
            2. Enhanced INS and Customs Enforcement Capability
    The Attorney General and the Secretary of the Treasury, assisted by 
the Director of Central Intelligence, shall immediately develop and 
implement multi-year plans to enhance the investigative and 
intelligence analysis capabilities of the INS and the Customs Service. 
The goal of this enhancement is to increase significantly efforts to 
identify, locate, detain, prosecute or deport aliens associated with, 
suspected of being engaged in, or supporting terrorist activity within 
the United States.
    The new multi-year plans should significantly increase the number 
of Customs and INS special agents assigned to Joint Terrorism Task 
Forces, as deemed appropriate by the Attorney General and the Secretary 
of the Treasury. These officers shall constitute new positions over and 
above the existing on-duty special agent forces of the two agencies.
            3. Abuse of International Student Status
    The United States benefits greatly from international students who 
study in our country. The United States government shall continue to 
foster and support international students.
    The government shall implement measures to end the abuse of student 
visas and prohibit certain international students from receiving 
education and training in sensitive areas, including areas of study 
with direct application to the development and use of weapons of mass 
destruction. The government shall also prohibit the education and 
training of foreign nationals who would use such training to harm the 
United States or its allies.
    The Secretary of State and the Attorney General, working in 
conjunction with the Secretary of Education, the Director of the Office 
of Science and Technology Policy, the Secretary of Defense, the 
Secretary of Energy, and any other departments or entities they deem 
necessary, shall develop a program to accomplish this goal. The program 
shall identify sensitive courses of study, and shall include measures 
whereby the Department of State, the Department of Justice, and United 
States academic institutions, working together, can identify 
problematic applicants for student visas and deny their applications. 
The program shall provide for tracking the status of a foreign student 
who receives a visa (to include the proposed major course of study, the 
status of the individual as a full-time student, the classes in which 
the student enrolls, and the source of the funds supporting the 
student's education). The program shall develop guidelines that may 
include control mechanisms, such as limited duration student 
immigration status, and may implement strict criteria for renewing such 
student immigration status. The program shall include guidelines for 
exempting students from countries or groups of countries from this set 
of requirements.
    In developing this new program of control, the Secretary of State, 
the Attorney General, and the Secretary of Education shall consult with 
the academic community and other interested parties. This new program 
shall be presented through the Homeland Security Council to the 
President within 60 days.
    The INS, in consultation with the Department of Education, shall 
conduct periodic reviews of all institutions certified to receive 
nonimmigrant students and exchange visitor program students. These 
reviews shall include checks for compliance with record keeping and 
reporting requirements. Failure of institutions to comply may result in 
the termination of the institution's approval to receive such students.
            4. North American Complementary Immigration Policies
    The Secretary of State, in coordination with the Secretary of the 
Treasury and the Attorney General, shall promptly initiate negotiations 
with Canada and Mexico to assure maximum possible compatibility of 
immigration, customs, and visa policies. The goal of the negotiations 
shall be to provide all involved countries the highest possible level 
of assurance that only individuals seeking entry for legitimate 
purposes enter any of the countries, while at the same time minimizing 
border restrictions that hinder legitimate trans-border commerce.
    As part of this effort, the Secretaries of State and the Treasury 
and the Attorney General shall seek to substantially increase sharing 
of immigration and customs information. They shall also seek to 
establish a shared immigration and customs control data-base with both 
countries. The Secretary of State, the Secretary of the Treasury, and 
the Attorney General shall explore existing mechanisms to accomplish 
this goal and, to the maximum extent possible, develop new methods to 
achieve optimal effectiveness and relative transparency. To the extent 
statutory provisions prevent such information sharing, the Attorney 
General and the Secretaries of State and the Treasury shall submit to 
the Director of the Office of Management and Budget proposed remedial 
legislation.
            5. Use of Advanced Technologies for Data Sharing and 
                    Enforcement Efforts
    The Director of the OSTP, in conjunction with the Attorney General 
and the Director of Central Intelligence, shall make recommendations 
about the use of advanced technology to help enforce United States 
immigration laws, to implement United States immigration programs, to 
facilitate the rapid identification of aliens who are suspected of 
engaging in or supporting terrorist activity, to deny them access to 
the United States, and to recommend ways in which existing government 
databases can be best utilized to maximize the ability of the 
government to detect, identify, locate, and apprehend potential 
terrorists in the United States. Databases from all appropriate Federal 
agencies, state and local governments, and commercial databases should 
be included in this review. The utility of advanced data mining 
software should also be addressed. To the extent that there may be 
legal barriers to such data sharing, the Director of the OSTP shall 
submit to the Director of the Office of Management and Budget proposed 
legislative remedies. The study also should make recommendations, 
propose timelines, and project budgetary requirements.
    The Director of the OSTP shall make these recommendations to the 
President through the Homeland Security Council within 60 days.
            6. Budgetary Support
    The Office of Management and Budget shall work closely with the 
Attorney General, the Secretaries of State and of the Treasury, the 
Assistant to the President for Homeland Security, and all other 
appropriate agencies to review the budgetary support and identify 
changes in legislation necessary for the implementation of this 
directive and recommend appropriate support for a multi-year program to 
provide the United States a robust capability to prevent aliens who 
engage in or support terrorist activity from entering or remaining in 
the United States or the smuggling of implements of terrorism into the 
United States. The Director of the Office of Management and Budget 
shall make an interim report through the Homeland Security Council to 
the President on the recommended program within 30 days, and shall make 
a final report through the Homeland Security Council to the President 
on the recommended program within 60 days.

                                                    George W. Bush.
   Attachment 2.--State and Local Backlash Prosecutions of Which the 
                     Department of Justice is Aware
    Location: DeQueen, Arkansas
    Charge: Criminal mischief
    Felony/Misdemeanor: Juvenile charge
    Disposition/Sentence: Conviction. Sentencing pending.

    Location: Mesa, Arizona
    Charge: Capital Murder
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: San Diego, California
    Charge: Assault
    Felony/Misdemeanor: Misdemeanor
    Disposition/Sentence: Conviction. Sentenced to 3 years probation, 
$1,000 restitution.

    Location: San Diego, California
    Charge: Threats and arson
    Felony/Misdemeanor:
    Disposition/Sentence: Dismissed

    Location: Lancaster, California
    Charge: Assault
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Conviction. Sentenced to 4 years 
incarceration.

    Location: Los Angeles, California
    Charge: Threats
    Felony/Misdemeanor:
    Disposition/Sentence: Dismissed

    Location: Moreno Valley, California
    Charge: Threats
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 120 days 
incarceration.

    Location: Bellflower, California
    Charge: Threat
    Felony/Misdemeanor: Misdemeanor
    Disposition/Sentence: Conviction

    Location: Los Angeles, California
    Charge: Threats, civil rights, and weapons charges
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Lawndale, California
    Charge: Threats
    Felony/Misdemeanor: Misdemeanor
    Disposition/Sentence: Conviction. Sentenced to 21 days 
incarceration and 3 years probation.

    Location: Sacramento, California
    Charge: Trespass
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 3 years 
incarceration

    Location: Frostproof, Florida
    Charge: Criminal mischief, throwing deadly missile into bldg.
    Felony/Misdemeanor:
    Disposition/Sentence: Prosecution terminated

    Location: Kissimmee, Florida
    Charge: Attempted arson and threats
    Felony/Misdemeanor:
    Disposition/Sentence: Dismissed

    Location: Chicago, Illinois
    Charge: Hate crime
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Conviction. Sentenced to 2 years mental 
health probation, 200 hours community service.

    Location: Palos Heights, Illinois
    Charge: Aggravated battery, use of unlawful weapon.
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Evansville, Indiana
    Charge: Criminal mischief, DUI
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Conviction

    Location: Indianapolis, Indiana
    Charge: Battery
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 65 days, 61 
suspended, 40 hours community service, $500 fine and $976 restitution.

    Location: Laurel, Maryland
    Charge: Malicious vandalism
    Felony/Misdemeanor: Misdemeanor
    Disposition/Sentence: Conviction

    Location: Boston, Massachusetts
    Charge: Assault and battery with dangerous weapon
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Fairhaven, Massachusetts
    Charge: Assault and battery
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Sommerset, Massachusetts
    Charge: Assault and explosive device
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending against 2 defendants, conviction of 
one defendant, sentenced to 1 year probation with a suspended sentence

    Location: Lincoln Park, Michigan
    Charge: First degree murder
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Minneapolis, Minnesota
    Charge: Assault and disorderly conduct
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 12 to 20 days 
incarceration, $1000 fine

    Location: St. Louis, Missouri
    Charge: Assault
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 2 years probation, 
40 hours community service.

    Location: St. Louis, Missouri
    Charge: Assault and ethnic intimidation
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Manchester, New Hampshire
    Charge: Assault motivated by hate
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Clifton, New Jersey
    Charge: Bias crime
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Hammonton, New Jersey
    Charge: Harassment
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 30 days 
incarceration, suspended sentence, $100 fine

    Location: Lower Township, New Jersey
    Charge: Criminal mischief and harassment
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction

    Location: Mantau Township, New Jersey
    Charge: Ethnic intimidation
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: West Deptford Township, New Jersey
    Charge: Assault
    Felony/Misdemeanor:
    Disposition/Sentence: Dismissed

    Location: Atlantic City, New Jersey
    Charge: Terrorist threats and harassment
    Felony/Misdemeanor
    Disposition/Sentence Pending

    Location: Huntington, New York
    Charge: Reckless endangerment and DWI
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 3 years probation

    Location: Ronkonkoma, New York
    Charge: Second degree menacing
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 30 days 
incarceration, 3 years probation

    Location: Queens, New York
    Charge: Assault and criminal mischief
    Felony/Misdemeanor:
    Disposition/Sentence: Pending against one defendant and one 
juvenile. Conviction of one defendant of harassment, sentenced to 100 
hours community service

    Location: Palermo, New York
    Charge: Arson and vandalism
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Bellerose, New York
    Charge: Trespass
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Grand Forks, North Dakota
    Charge: Aggravated assault
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Conviction. 90 days incarceration.

    Location: Parma, Ohio
    Charge: Burglary, ethnic intimidation, DUI, and vandalism
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Conviction. Sentenced to 5 years 
incarceration.

    Location: Cleveland, Ohio
    Charge: Discharging firearm
    Felony/Misdemeanor:
    Disposition/Sentence: Dismissed in connection w/plea to federal 
drug charges

    Location: Tulsa, Oklahoma
    Charge: Aggravated assault and malicious intimidation
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Norman, Oklahoma
    Charge: Assault
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Eugene, Oregon
    Charge: Harassment and intimidation
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 30 days 
incarceration, 60 months probation.

    Location: Meadville Pennsylvania
    Charge: Aggravated assault with dangerous weapon, ethnic 
intimidation
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Lower Marion, Pennsylvania
    Charge: Simple assault
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Philadelphia, Pennsylvania
    Charge: Attempted arson and risking catastrophe
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Pittsburgh, Pennsylvania
    Charge: Simple assault and ethnic intimidation
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Mesquite, Texas
    Charge: Capital murder
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Dallas, Texas
    Charge: Murder
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Dallas, Texas
    Charge: Robbery and assault with dangerous weapon
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: North Richland Hills, Texas
    Charge: Terrorist threats
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Fannett, Texas
    Charge: Felony criminal mischief
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Alexandria, Virginia
    Charge: Assault and battery
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. Sentenced to 60 days 
incarceration.

    Location: Alexandria, Virginia
    Charge: Unlawful wounding
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Dumfries, Virginia
    Charge: Assault
    Felony/Misdemeanor:
    Disposition/Sentence: Conviction. 1 defendant sentenced to 60 days 
incarceration; 1 defendant sentenced to 1 year incarceration (both 
sentences suspended).

    Location: Hampton, Virginia
    Charge: Terrorist threats
    Felony/Misdemeanor:
    Disposition/Sentence: Diversion. To be dismissed after 100 hours 
community service.

    Location: Fairfax, Virginia
    Charge: Assault and battery
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Pending

    Location: Sterling, Virginia
    Charge: Threats
    Felony/Misdemeanor:
    Disposition/Sentence: Not guilty verdict

    Location: Mountainlake Terrace, Washington
    Charge: Malicious harassment
    Felony/Misdemeanor: Felony
    Disposition/Sentence: Conviction. 1 defendant sentenced to 9 months 
incarceration; 2 juveniles detained.

    Location: Everett, Washington
    Charge: Harassment
    Felony/Misdemeanor: Misdemeanor
    Disposition/Sentence: Conviction. Sentenced to 18 days 
incarceration

    Location: Seattle, Washington
    Charge: Malicious harassment
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Seattle, Washington
    Charge: Malicious harassment
    Felony/Misdemeanor: Misdemeanor
    Disposition/Sentence: Conviction. Sentenced to 2 years probation

    Location: Seatack, Washington
    Charge: Assault
    Felony/Misdemeanor:
    Disposition/Sentence: Pending

    Location: Milwaukee, Wisconsin
    Charge: Disorderly conduct
    Felony/Misdemeanor: Misdemeanor
    Disposition/Sentence: Dismissed

    Location: Milwaukee, Wisconsin
    Charge: Disorderly conduct
    Felony/Misdemeanor: Misdemeanor
    Disposition/Sentence: Conviction. Sentenced to 10 days 
incarceration, 18 months probation, $1,000 fine.
          Attachment 3.--New Freedom Initiative--February 2001
                  foreword by president george w. bush
    My Administration is committed to tearing down the barriers to 
equality that face many of the 54 million Americans with disabilities.
    Eleven years ago the Americans with Disabilities Act (ADA) made it 
a violation of federal law to discriminate against a person with a 
disability.
    But there is much more to do. Though progress has been made in the 
last decade, too many Americans with disabilities remain trapped in 
bureaucracies of dependence, denied the tools they need to fully access 
their communities.
    The unemployment rate for Americans with disabilities hovers at 70 
percent. Home ownership rates are in the single digits. And Internet 
access for Americans with disabilities is half that of people without 
disabilities.
    I am committed to tearing down the remaining barriers to equality 
that face Americans with disabilities today. My New Freedom Initiative 
will help Americans with disabilities by increasing access to assistive 
technologies, expanding educational opportunities, increasing the 
ability of Americans with disabilities to integrate into the workforce, 
and promoting increased access into daily community life.
    I look forward to working with Congress to see these proposals 
become law.
                           executive summary
      fulfilling america's promise to americans with disabilities
    Disability is not the experience of a minority of Americans. 
Rather, it is an experience that will touch most Americans at some 
point during their lives.
    Today, there are over 54 million Americans with disabilities, a 
full 20 percent of the U.S. population. Almost half of these 
individuals have a severe disability, affecting their ability to see, 
hear, walk, or perform other basic functions of life. In addition, 
there are over 25 million family caregivers and millions more who 
provide aid and assistance to people with disabilities.
    Eleven years ago, Congress passed and President George Bush signed 
one of the most significant civil rights laws since the Civil Rights 
Act of 1964--the Americans with Disabilities Act (ADA). In doing so, 
America opened its door to a new age for people with disabilities. Two 
and a half years ago, amendments to Section 508 of the Rehabilitation 
Act of 1973 were enacted ensuring that the Federal Government would 
purchase electronic and information technology which is open and 
accessible for people with disabilities.
    Although progress has been made over the years to improve access to 
employment, public accommodations, commercial facilities, information 
technology, telecommunications services, housing, schools, and polling 
places, significant challenges remain for Americans with disabilities 
in realizing the dream of equal access to full participation in 
American society. Indeed, the Harris surveys by the National 
Organization on Disability and numerous other studies have highlighted 
these persistent obstacles.
    Americans with disabilities have a lower level of educational 
attainment than those without disabilities:
  --One out of five adults with disabilities has not graduated from 
        high school, compared to less than one of ten adults without 
        disabilities.
  --National graduation rates for students who receive special 
        education and related services have stagnated at 27 percent for 
        the past three years, while rates are 75 percent for students 
        who do not rely on special education.
    Americans with disabilities are poorer and more likely to be 
unemployed than those without disabilities:
  --In 1997, over 33 percent of adults with disabilities lived in a 
        household with an annual income of less than $15,000, compared 
        to only 12 percent of those without disabilities.
  --Unemployment rates for working-age adults with disabilities have 
        hovered at the 70 percent level for at least the past 12 years, 
        while rates are significantly lower for working-age adults 
        without disabilities.
    Too many Americans with disabilities remain outside the economic 
and social mainstream of American life:
  --71 percent of people without disabilities own homes, but fewer than 
        10 percent of those with disabilities do.
  --Computer usage and Internet access for people with disabilities is 
        half that of people without disabilities.
  --People with disabilities vote at a rate that is 20 percent below 
        voters without disabilities. In local areas, disability issues 
        seldom surface in election campaigns, and inaccessible polling 
        places often discourage citizens with disabilities from voting.
    People with disabilities want to be employed, educated, and 
participating, citizens living in the community. In today's global new 
economy, America must be able to draw on the talents and creativity of 
all its citizens.
    The Administration will work to ensure that all Americans have the 
opportunity to learn and develop skills, engage in productive work, 
choose where to live and participate in community life. The President's 
``New Freedom Initiative'' represents an important step in achieving 
these goals. It will expand research in and access to assistive and 
universally designed technologies, further integrate Americans with 
disabilities into the workforce and help remove barriers to 
participation in community life.
                               the policy
    The ``New Freedom Initiative'' is composed of the following key 
components:
Increasing Access to Assistive and Universally Designed Technologies:
    Federal Investment in Assistive Technology Research and 
Development.--The Administration will provide a major increase in the 
Rehabilitative Engineering Research Centers' budget for assistive 
technologies, create a new fund to help bring assistive technologies to 
market, and better coordinate the Federal effort in prioritizing 
immediate assistive and universally designed technology needs in the 
disability community.
    Access to Assistive Technology.--Assistive technology is often 
prohibitively expensive. In order to increase access, funding for low-
interest loan programs to purchase assistive technologies will increase 
significantly.
Expanding Educational Opportunities for Americans with Disabilities:
    Increase Funding for the Individuals with Disabilities Education 
Act (IDEA).--In return for participating in a new system of flexibility 
and accountability in the use of Federal education funds, states will 
receive an increase in IDEA funds for education at the local level and 
help in meeting the special needs of students with disabilities.
    Focus on Reading in Early Grades.--States that establish a 
comprehensive reading program for students, including those with 
disabilities, from preschool through second grade will be eligible for 
grants under President Bush's Reading First and Early Reading First 
Initiatives.
Integrating Americans with Disabilities into the Workforce:
    Expanding Telecommuting.--The Administration will provide Federal 
matching funds to states to guarantee low-interest loans for 
individuals with disabilities to purchase computers and other equipment 
necessary to telework from home. In addition, legislation will be 
proposed to make a company's contribution of computer and Internet 
access for home use by employees with disabilities a tax-free benefit.
    Swift Implementation of ``Ticket to Work''.--President Bush has 
committed to sign an order that directs the federal agency to swiftly 
implement the law giving Americans with disabilities the ability to 
choose their own support services and maintain their health benefits 
when they return to work.
    Full Enforcement of the Americans with Disabilities Act (ADA).--
Technical assistance will be provided to promote ADA compliance and to 
help small businesses hire more people with disabilities. The 
Administration will also promote the Disabled Access Credit, an 
incentive program created in 1990 to assist small businesses comply 
with the Act.
    Innovative Transportation Solutions.--Accessible transportation can 
be a particularly difficult barrier for Americans with disabilities 
entering the workforce. Funding will be provided for 10 pilot programs 
that use innovative approaches to developing transportation plans that 
serve people with disabilities. The Administration will also establish 
a competitive matching grant program to promote access to alternative 
methods of transportation through community-based and other providers.
Promoting Full Access to Community Life:
    Promote Homeownership for People with Disabilities.--Congress 
recently passed the ``American Homeownership and Economic Opportunity 
Act of 2000,'' which will permit recipients with disabilities to use up 
to a year's worth of vouchers to finance the down payment on a home. 
The Administration will work to swiftly implement the recently enacted 
law.
    Swift Implementation of the Olmstead Decision.--President Bush has 
committed to sign an order supporting the most integrated community-
based settings for individuals with disabilities, in accordance with 
the Olmstead decision.
    National Commission on Mental Health.--President Bush has committed 
to create a National Commission on Mental Health, which will study and 
make recommendations for improving America's mental health service 
delivery system, including making recommendations on the availability 
and delivery of new treatments and technologies for individuals with 
severe mental illness.
    Improving Access.--Federal matching funds will be provided annually 
to increase the accessibility of organizations that are currently 
exempt from Title III of the ADA, such as churches, mosques, 
synagogues, and civic organizations. The Administration also supports 
improving access to polling places and ballot secrecy for people with 
disabilities.
 increasing access to assistive and universally designed technologies--
                               (title i)
                                overview
    The Administration's commitment to increase access to assistive and 
universally designed technologies is based upon the principle that 
every American must have the opportunity to participate fully in 
society. In the global new economy, America must draw on the talents 
and creativity of all its citizens.
    Assistive and universally designed technologies can be a powerful 
tool for millions of Americans with disabilities, dramatically 
improving one's quality of life and ability to engage in productive 
work. New technologies are opening opportunities for even those with 
the most severe disabilities. For example, some individuals with 
quadriplegia can now operate computers by the glance of an eye. As the 
National Council on Disability (NCD) has stated, ``for Americans 
without disabilities, technology makes things easier. For Americans 
with disabilities, technology makes things possible.''
    Unfortunately, assistive and universally designed technologies are 
often prohibitively expensive. In addition, innovation is being 
hampered by insufficient Federal funding for and coordination of 
assistive technology research and development programs.
    The New Freedom Initiative will help ensure that Americans with 
disabilities can access the best technologies of today and that even 
better technologies will be available in the future. At the core of 
this effort are proposals that reinvigorate the Federal investment in 
assistive technologies; improve Federal collaboration and promote 
private-public partnerships; and increase access to this technology for 
people with disabilities.
                          summary of proposals
Increases Federal Investment in Assistive Technology Research and 
        Development:
    Rehabilitative Engineering Research Centers (RERCs) are recognized 
as conducting some of the most innovative and high impact assistive 
technology research in the Federal Government. The 15 RERCs are housed 
in universities and other non-profit institutions around the country 
and focus on a specific area of research--for example, information 
technology access, prosthetics and orthotics, and technology for 
children with orthopedic disabilities. To advance research specifically 
targeted to the disabilities community, the Administration will 
significantly increase funding for the RERCs.
Improves Coordination of the Federal Assistive Technology Research and 
        Development Program:
    There is no effective coordinating body for assistive technology 
research and development within the Federal Government. While the 
Interagency Committee on Disabilities Research (ICDR) was designed to 
coordinate the Federal effort, it has no real authority and has no 
budget. The Administration will provide new funding to the ICDR so that 
it can prioritize the immediate assistive and universally designed 
technology needs in the disability community, as well as foster 
collaborative projects between the Federal laboratories and the private 
sector.
Promotes Private-Public Partnerships:
    There are nearly 2,500 companies working to bring new assistive 
technologies to market. Many small businesses, however, cannot make the 
necessary capital investments until they have information concerning 
the market for a particular assistive technology. To help these 
businesses bring assistive technologies to market, the Administration 
will establish an ``Assistive Technology Development Fund.'' Housed 
under the ICDR, the fund will help underwrite technology demonstration, 
testing, validation and market assessment to meet specific needs of 
small businesses so that they can better serve the needs of people with 
disabilities.
Increases Access to Assistive Technology:
    Assistive technology is often prohibitively expensive. For example, 
personal computers configured with assistive technology can cost 
anywhere from $2,000 to $20,000. The Administration will significantly 
increase Federal funding for low-interest loans to purchase assistive 
technology. These grants will go to a state agency in collaboration 
with banks or non-profit groups to guarantee loans and lower interest 
rates.
 expanding educational opportunities for americans with disabilities--
                               (title ii)
                                overview
    Education is the key to independent living and a high quality of 
life. Unfortunately, one in five adults with disabilities has not 
graduated from high school, compared to less than one of ten adults 
without disabilities. The Administration will expand access to quality 
education for Americans with disabilities.
    Originally passed by Congress in 1975, the Individuals with 
Disabilities Act, or IDEA, ensures that children with disabilities 
would have a free public education that would meet their unique needs.
    The Administration will increase educational opportunity for 
children with disabilities by working with Congress to give states 
increased IDEA funds. This will help meet the needs of students with 
disabilities and free up additional resources for education at the 
local level.
                          summary of proposals
    Increases Funding for Special Education.--In return for 
participating in a new system of flexibility and accountability in the 
use of Federal education funds, states will receive an increase in IDEA 
funds for education at the local level and help in meeting the special 
needs of students with disabilities.
    Establishes the ``Reading First'' Program.--President Bush will 
increase Federal funding to students, including those with 
disabilities, by creating an incentive fund for states to teach every 
child to read by third grade. States that choose to draw from this fund 
will be required to initiate, among other requirements: a reading 
diagnostic test for students in K-2 to determine where students need 
help; a research-based reading curriculum; training for K-2 teachers in 
reading preparation; and intervention for students who are not reading 
at grade level in K-2.
    Supplements Reading First with an Early Childhood Reading 
Initiative.--States participating in the Reading First program will 
have the option to receive ``Early Reading First'' funding to implement 
research-based reading programs in existing pre-school programs and 
Head Start programs that feed into participating elementary schools. 
The purpose of this program is to illustrate on a larger scale recent 
research findings that children taught pre-reading and math skills in 
pre-school enter school ready to learn reading and mathematics.
  promoting homeownership for americans with disabilities--(title iii)
                                overview
    Homeownership has always been at the heart of the ``American 
dream.'' This past year, Congress passed the ``American Homeownership 
and Economic Opportunity Act of 2000,'' which reforms Federal rental 
assistance to give individuals who qualify the opportunity to purchase 
a home.
    Rental assistance for low-income Americans, including those with 
disabilities, is provided by a program known as Section 8 of the 
Housing Act of 1937, administered by the U.S. Department of Housing and 
Urban Development (HUD). Residents are provided Section 8 vouchers so 
that they can afford rental payments for public housing. And many of 
those Section 8 vouchers go to individuals with disabilities.
    In addition to increasing independence, homeownership also promotes 
savings. Mortgage payments, unlike rental payments, help build net 
worth because a portion of the payment goes toward building equity. In 
turn, as one's home equity increases, it becomes easier to finance 
other purchases such as a computer or further education.
                           summary of action
Implementation of the Section 8 Program to Allow Recipients to Apply 
        Their Rental Vouchers to Homeownership:
    The Administration will implement Public Law 106-569, which allows 
local Public Housing Authorities to provide recipients of Section 8 
vouchers who have disabilities with up to a year's worth of vouchers in 
a lump-sum payment to finance the down payment on a home.
 integrating americans with disabilities into the workforce--title iv 
                      (part a: promoting telework)
                                overview
    Americans with disabilities should have every freedom to pursue 
careers, integrate into the workforce, and participate as full members 
in the economic marketplace.
    The New Freedom Initiative will help tear down barriers to the 
workplace, and help promote full access and integration.
    Computer technology and the Internet have tremendous potential to 
broaden the lives and increase the independence of people with 
disabilities. Nearly half of people with disabilities say the Internet 
has significantly improved their quality of life, compared to 27 
percent of people without disabilities.
    The computer and Internet revolution has not reached as many people 
with disabilities as the population without disabilities. Only 25 
percent of people with disabilities own a computer, compared with 66 
percent of U.S. adults. And only 20 percent of people with disabilities 
have access to the Internet, compared to over 40 percent of U.S. 
adults.
    The primary barrier to wider access is cost. Computers with 
adaptive technology can cost as much as $20,000, which is prohibitively 
expensive for many individuals. And the median income of Americans with 
disabilities is far below the national average.
    The New Freedom Initiative will expand the avenue of teleworking, 
so that individuals with mobility impairments can work from their homes 
if they choose.
                          summary of proposals
    Creates the ``Access to Telework'' Fund.--Federal matching funds 
will be provided annually to states to guarantee low-income loans for 
people with disabilities to purchase equipment to telecommute from 
home.
    Makes a Company's Contribution of Computer and Internet Access for 
Home Use by Employees with Disabilities a Tax-Free Benefit.--The 
Administration will encourage businesses to give computers and Internet 
access to employees with disabilities by making it explicit that this 
provision is a tax-free benefit. By making this benefit tax free to 
employees, the proposal will encourage more employers to provide 
computer equipment and Internet access, and employees will have greater 
options to take advantage of this flexibility for teleworking. For 
individuals with disabilities, this flexibility will expand the 
universe of potential and accessible employment.
    Prohibits OSHA from Regulating ``Home Office'' Standards.--In 
November 1999, the U.S. Department of Labor's Occupational Safety and 
Health Administration (OSHA) issued an 8-page response to an employer 
inquiry asserting that it had the power to regulate home office 
standards and hold employers responsible if those standards were not 
met. This proposal would have had a chilling effect on teleworking, as 
employers would seek to avoid potential liabilities. Although OSHA has 
since withdrawn the response, it has not yet foreclosed future action. 
The proposal will amend the Occupational Safety and Health Act of 1970 
to prohibit OSHA from being applied to the home worksites of employees 
who work at home through the use of ``telephone, computer or electronic 
device.''
 integrating americans with disabilities into the workforce--(part b: 
                            ticket-to-work)
                                overview
    In 1999, Congress passed the ``Ticket-to-Work and Work Incentives 
Improvement Act,'' which will give Americans with disabilities both the 
incentive and the means to seek employment.
    As part of the New Freedom Initiative, the Administration will 
ensure the Act's swift implementation.
    Today, there are more than 7.5 million Americans with disabilities 
receiving benefits under Federal disability programs. According to a 
recent Harris Survey, conducted by the National Organization of 
Disability, 72 percent of the Americans with disabilities want to work. 
However, in part because of disincentives in Federal law, less than 1 
percent of those receiving disability benefits fully enter the 
workforce.
    Prior to the ``Ticket to Work'' law, in order to continue to 
receive disability payments and health coverage, recipients could not 
engage in any substantial work. The Ticket to Work law, however, 
provides incentives for people with disabilities to return to work by:
  --Providing Americans with disabilities with a voucher-like 
        ``ticket'' that allows them to choose their own support 
        services, including vocational education programs and 
        rehabilitation services.
  --Extending Medicare coverage for SSDI beneficiaries so they can 
        return to work without the fear of losing health benefits.
  --Expanding Medicaid eligibility categories for certain working 
        people with severe disabilities so that they can continue to 
        receive benefits after their income or condition improves.
                           summary of action
    President Bush Has Committed to Sign an Order to Support Effective 
and Swift Implementation of ``Ticket to Work''.--The order will direct 
the federal agency to continue to swiftly implement the law giving 
Americans with disabilities the ability to choose their own support 
services and to maintain their health benefits when they return to 
work.
 integrating americans with disabilities into the workforce--(part c: 
            compliance with americans with disabilities act)
                                overview
    When the Americans with Disabilities Act (ADA) was signed into law 
on July 26, 1990, it was the most far reaching law advancing access of 
individuals with disabilities, workforce integration, and independence. 
The law, signed by President George Bush, gives civil rights 
protections to individuals with disabilities that are like those 
provided to individuals on the basis of race, sex, national origin, and 
religion.
    In the eleven years since it was signed, the ADA has worked to 
guarantee equal opportunity for individuals with disabilities in 
employment, public accommodations, transportation, State and local 
government services, and telecommunications. The law has been 
especially helpful in providing access to jobs, especially in the small 
business sector, which has created two-thirds of all net new jobs since 
the early 1970s.
    To encourage small businesses to comply with the ADA, legislation 
was signed into law in 1990 to provide a credit for 50 percent of 
eligible expenses up to $5,000 a year. Such eligible expenses include 
assistive technologies. Unfortunately, many small businesses are not 
aware of this credit.
    President George W. Bush believes that the Americans with 
Disabilities Act has been an integral component of the movement toward 
full integration of individuals with disabilities but recognizes that 
there is still much more to be done. He also recognizes that to further 
integrate individuals with disabilities into the workforce, more needs 
to be done to promote ADA compliance.
                          summary of proposals
    Supports the ADA and Provides Technical Assistance to Small 
Businesses.--The President and the Attorney General will ensure full 
enforcement of the Americans with Disabilities Act by the Civil Rights 
Division of the Department of Justice. In addition, the New Freedom 
Initiative will provide resources annually for technical assistance to 
help small businesses comply with the Act, serve customers, and hire 
more people with disabilities.
    Promotes the Awareness and Utilization of Disabled Access Credit 
(DAC).--The DAC, created in 1990, is an incentive program to assist 
small businesses in complying with the ADA. DAC provides a credit for 
50 percent of eligible expenses up to $5,000 a year, including expenses 
associated with making their facilities accessible and with purchasing 
assistive technologies. Utilization of the credit has been limited 
because small businesses are often not aware of it.
              expanding transportation options--(title v)
                                overview
    Every American should have the opportunity to participate fully in 
society and engage in productive work. Unfortunately, millions of 
Americans with disabilities are locked out of the workplace because 
they are denied the tools and access necessary for success.
    Transportation can be a particularly difficult barrier to work for 
Americans with disabilities. In 1997, the Director of Project Action 
stated that ``access to transportation is often the critical factor in 
obtaining employment for the nation's 25 million transit dependent 
people with disabilities.'' Today, the lack of adequate transportation 
remains a primary barrier to work for people with disabilities: one-
third of people with disabilities report that inadequate transportation 
is a significant problem.
    Through formula grant programs and the enforcement of the ADA, the 
Federal Government has helped make our mass transit systems more 
accessible. More must be done, however, to test new transportation 
ideas and to increase access to alternate means of transportation, such 
as vans with specialty lifts, modified automobiles, and ride-share 
programs for those who cannot get to buses or other forms of mass 
transit.
    On a daily basis, many non-profit groups and businesses are working 
hard to help people with disabilities live and work independently. 
These organizations often lack the funds to get people with 
disabilities to job interviews, to job training, and to work.
    The Federal Government should support the development of innovative 
transportation initiatives and partner with local organizations to 
promote access to alternate methods of transportation.
                          summary of proposals
    Promotes innovative transportation solutions for people with 
disabilities by funding pilot programs.--The proposal provides funding 
for 10 pilot programs run by state or local governments in regional, 
urban, and rural areas. Pilot programs will be selected on the basis of 
the use of innovative approaches to developing transportation plans 
that serve people with disabilities. The Administration will work with 
Congress to evaluate the effectiveness of these pilot programs and 
encourage the expansion of successful initiatives.
    Helps create a network of alternate transportation through 
community-based and other providers.--The proposal will establish a 
competitive matching grant program to promote access to alternative 
methods of transportation. This dollar-for-dollar matching program will 
be open to community-based organizations that seek to integrate 
Americans with disabilities into the workforce. The funds will go 
toward the purchase and operation of specialty vans, assisting people 
with down payments or costs associated with accessible vehicles, and 
extending the use of existing transportation resources.
 promoting full access to community life--title vi (part a: commitment 
                        to community-based care)
                                overview
    On June 22, 1999, the Supreme Court decided Olmstead v. L.C., 
ruling that, in appropriate circumstances, the ADA requires the 
placement of persons with disabilities in a community-integrated 
setting whenever possible. The Court concluded that ``unjustified 
isolation,'' e.g., institutionalization when a doctor deems community 
treatment equally beneficial, ``is properly regarded as discrimination 
based on disability.''
    Olmstead has yet to be fully implemented. President Bush believes 
that community-based care is critically important to promoting maximum 
independence and to integrating individuals with disabilities into 
community life.
                          summary of proposals
    President Bush has Committed to Sign an Order Supporting Swift 
Implementation of the Olmstead Decision.--The order will support the 
most integrated community-based settings for individuals with 
disabilities, in accordance with the Olmstead decision. The 
Administration will pursue swift implementation in a manner that 
respects the proper roles of the Federal Government and the several 
states.
 promoting full access to community life--(part b: better coordination 
        of federal resources to address mental health problems)
                                overview
    Currently, there are numerous Federal agencies that oversee mental 
health policies, funding, laws and programs including: the Substance 
Abuse and Mental Health Services Administration, the National 
Institutes of Health, the Health Care Financing Administration, the 
Office of Personnel Management, the Social Security Administration, the 
Health Resources and Services Administration, the Department of Housing 
and Urban Development, the Department of Education, the Department of 
Justice, and the Department of Labor.
    These Federal agencies are doing valuable work, but they would be 
much more effective, efficient, and less duplicative if they were 
better coordinated.
    With coordination, the competitive advantage of each agency could 
be leveraged to provide the most needed and suitable service in the 
framework of federal efforts to address mental health.
                          summary of proposals
    President Bush Has Committed to Create a National Commission on 
Mental Health.--The National Commission will study and make 
recommendations for improving America's mental health service delivery 
system, including making recommendations on the availability and 
delivery of new treatments and technologies for individuals with severe 
mental illness.
    promoting full access to community life--(part c: access to the 
                           political process)
                                overview
    There are over 35 million voting-age persons with disabilities, but 
currently people with disabilities register to vote at a rate that is 
16 percentage points less than the rest of the population and vote at a 
rate that is 20 percent voters who have no disabilities.
    According to the National Organization on Disability, low voter 
turnout among people who are disabled is due to both accessibility 
problems at voting locations and the lack of secrecy and independence 
when voting. The most recent Federal Election Commission (FEC) report 
states that at least 20,000 of the Nation's more than 120,000 polling 
places are inaccessible to people with disabilities.
    President Bush recognizes that full integration into society must 
include access to and participation in the political process.
                          summary of proposals
    Supports Improving Accessibility to Voting for Americans with 
Disabilities.--President Bush will support improved access to polling 
places and ballot secrecy. He will work with Congress to address the 
barriers to voting for Americans with disabilities and to expanding 
suffrage for all Americans.
promoting full access to community life--(part d: access to ada-exempt 
                             organizations)
                                overview
    Title III of the Americans with Disabilities Act of 1990 opened 
countless businesses and public accommodations to people with 
disabilities by mandating that they be made accessible. For 
constitutional and other concerns, however, Title III exempts many 
civic organizations (such as Rotary and Lions Clubs) and religious 
organizations from its requirements of full access.
    Americans with disabilities should be fully integrated into their 
communities, and civic and religious organizations are vital parts of 
those communities. Too many private clubs, churches, synagogues, and 
mosques are inaccessible or unwelcoming to people with disabilities. As 
a result, people with disabilities are often unable to participate as 
fully in community or religious events.
    The National Organization on Disability has led a national effort 
to make places of worship accessible and welcoming to all Americans. 
Many organizations and congregations want to be open to all but have 
limited resources to ensure accessibility.
    Every effort should be made to ensure that Americans with 
disabilities have the opportunity to be integrated into their 
communities and welcomed into communities of faith.
                          summary of proposals
    Establishes a National Fund to Provide Matching Grants for 
Accessibility Renovations for ADA-Exempt Organizations.--To assist 
private clubs and religious organizations in making sure that their 
facilities are fully accessible and to expand access for all, the 
proposal provides annual Federal matching grants to ADA-exempt 
organizations making renovations or accommodations to improve 
accessibility. Because all ADA-exempt organizations will be eligible 
for the grants, irrespective of whether they are religious or secular, 
they would comport with the Supreme Court's test for constitutional 
neutrality.

   [From the Federal Register, June 21, 2001 (Volume 66, Number 120)]

                         Title 3--The President
                 executive order 13217 of june 18, 2001
     community-based alternatives for individuals with disabilities
    By the authority vested in me as President by the Constitution and 
the laws of the United States of America, and in order to place 
qualified individuals with disabilities in community settings whenever 
appropriate, it is hereby ordered as follows:
    Section 1. Policy. This order is issued consistent with the 
following findings and principles:
    (a) The United States is committed to community-based alternatives 
for individuals with disabilities and recognizes that such services 
advance the best interests of Americans.
    (b) The United States seeks to ensure that America's community-
based programs effectively foster independence and participation in the 
community for Americans with disabilities.
    (c) Unjustified isolation or segregation of qualified individuals 
with disabilities through institutionalization is a form of disability-
based discrimination prohibited by Title II of the Americans With 
Disabilities Act of 1990 (ADA), 42 U.S.C. 12101 et. seq. States must 
avoid disability-based discrimination unless doing so would 
fundamentally alter the nature of the service, program, or activity 
provided by the State.
    (d) In Olmstead v. L.C., 527 U.S. 581 (1999) (the ``Olmstead 
decision''), the Supreme Court construed Title II of the ADA to require 
States to place qualified individuals with mental disabilities in 
community settings, rather than in institutions, whenever treatment 
professionals determine that such placement is appropriate, the 
affected persons do not oppose such placement, and the State can 
reasonably accommodate the placement, taking into account the resources 
available to the State and the needs of others with disabilities.
    (e) The Federal Government must assist States and localities to 
implement swiftly the Olmstead decision, so as to help ensure that all 
Americans have the opportunity to live close to their families and 
friends, to live more independently, to engage in productive 
employment, and to participate in community life.
    Sec. 2. Swift Implementation of the Olmstead Decision: Agency 
Responsibilities. (a) The Attorney General, the Secretaries of Health 
and Human Services, Education, Labor, and Housing and Urban 
Development, and the Commissioner of the Social Security Administration 
shall work cooperatively to ensure that the Olmstead decision is 
implemented in a timely manner. Specifically, the designated agencies 
should work with States to help them assess their compliance with the 
Olmstead decision and the ADA in providing services to qualified 
individuals with disabilities in community-based settings, as long as 
such services are appropriate to the needs of those individuals. These 
agencies should provide technical guidance and work cooperatively with 
States to achieve the goals of Title II of the ADA, particularly where 
States have chosen to develop comprehensive, effectively working plans 
to provide services to qualified individuals with disabilities in the 
most integrated settings. These agencies should also ensure that 
existing Federal resources are used in the most effective manner to 
support the goals of the ADA. The Secretary of Health and Human 
Services shall take the lead in coordinating these efforts.
    (b) The Attorney General, the Secretaries of Health and Human 
Services, Education, Labor, and Housing and Urban Development, and the 
Commissioner of the Social Security Administration shall evaluate the 
policies, programs, statutes, and regulations of their respective 
agencies to determine whether any should be revised or modified to 
improve the availability of community-based services for qualified 
individuals with disabilities. The review shall focus on identifying 
affected populations, improving the flow of information about supports 
in the community, and removing barriers that impede opportunities for 
community placement. The review should ensure the involvement of 
consumers, advocacy organizations, providers, and relevant agency 
representatives. Each agency head should report to the President, 
through the Secretary of Health and Human Services, with the results of 
their evaluation within 120 days.
    (c) The Attorney General and the Secretary of Health and Human 
Services shall fully enforce Title II of the ADA, including 
investigating and resolving complaints filed on behalf of individuals 
who allege that they have been the victims of unjustified 
institutionalization. Whenever possible, the Department of Justice and 
the Department of Health and Human Services should work cooperatively 
with States to resolve these complaints, and should use alternative 
dispute resolution to bring these complaints to a quick and 
constructive resolution.
    (d) The agency actions directed by this order shall be done 
consistent with this Administration's budget.
    Sec. 3. Judicial Review. Nothing in this order shall affect any 
otherwise available judicial review of agency action. This order is 
intended only to improve the internal management of the Federal 
Government and does not create any right or benefit, substantive or 
procedural, enforceable at law or equity by a party against the United 
States, its agencies or instrumentalities, its officers or employees, 
or any other person.

                                                       George Bush.
THE WHITE HOUSE,
June 18, 2001.
                               Memorandum
                        U.S. Department of Justice,
              Executive Office for United States Attorneys,
                                  Washington, D.C., March 28, 2001.
TO: ALL UNITED STATES ATTORNEYS
 ALL FIRST ASSISTANT UNITED STATES ATTORNEYS
 ALL CRIMINAL CHIEFS
FROM: Mark T. Calloway, Director
SUBJECT: Guidance on New Law Concerning Trafficking in Persons
ACTION REQUIRED: Please distribute the attached prosecution guidance 
        memorandum as appropriate to your attorney staff, including 
        your Worker Exploitation Task Force Point of Contact.
DUE DATE: None. For information and distribution.
RESPOND TO: Albert N. Moskowitz
 Criminal Section Chief
 Civil Rights Division
 Telephone: (202) 514-3204

 Lou de Baca
 Involuntary Servitude and Slavery Case Coordinator
 Civil Rights Division
 Telephone: (202) 514-3204

 Thomas Burrows
 Child Exploitation and Obscenity Section Chief
 Criminal Division
 Telephone: (202) 514-5780

 Richard C. Smith
 Counsel to the Director
 Executive Office for United States Attorneys
 Telephone: (202) 514-1023
CONTACT PERSONS: Same as above.
    Yesterday, the Attorney General announced that the United States 
Department of Justice (the Department) will focus its efforts on three 
major areas to implement the newly-enacted Trafficking Victims 
Protection Act of 2000, Public Law 106-386. Those three areas are 
outreach, cooperation, and prosecution. For your review and reference, 
I am forwarding to you under cover of this memorandum a transcript of 
the Attorney General's press conference of March 27, 2001, at which he 
announced his plans to implement the new law.
    To ensure that all federal prosecutors are aware of the various 
aspects of the Trafficking Victims Protection Act of 2000, the Attorney 
General has directed that the attached memorandum, authored by the 
Civil Rights Division and the Criminal Division of the Department, be 
distributed to all United States Attorneys' Offices. The memorandum 
provides important information and guidance on the investigation and 
prosecution of criminal cases under the new law.
    I ask that you distribute copies of this memorandum to those 
Assistant United States Attorneys in your offices to whom you have 
given prosecution responsibility for these kinds of criminal cases, 
including your previously-designated Worker Exploitation Task Force 
Point of Contact. In addition, I encourage you to contact the Civil 
Rights Division, the Criminal Division, or the Executive Office for 
United States Attorneys, through the persons identified above, if you 
have any questions or comments about this important prosecution work.

Attachments as noted
cc: All United States Attorneys' Secretaries
                    Attorney General News Conference
                  worker exploitation--march 27, 2001
    ATTY GEN. ASHCROFT: Good afternoon. Thank you very much for coming. 
Nice to see you.
    This past Friday Mr. Kil-Soo Lee was arrested in American Samoa on 
a two-count federal complaint charging violations of the Trafficking 
Victims Protection Act of the year 2000. These charges are based on 
allegations that Mr. Lee held mostly female workers recruited from 
Vietnam in involuntary servitude in his garment factory by using or 
threatening force to obtain the labor or services of his victims over a 
period of nearly two years. That period of time extended from February 
1999 until December of the year 2000.
    One of my last acts as a United States Senator was to vote for a 
law which would curtail this kind of activity. That law was signed on 
October the 28th of the year 2000. This law increases the terms of 
incarceration for those involved in human trafficking crimes and 
broadens the definition of ``trafficking offenses'' to reach the subtle 
means of coercion, the techniques of holding workers in against the 
will. It's hard to believe that these crimes exist in the United States 
of America, but they do. And let me just give you some additional 
examples.
    On March the 7th a large landlord in Berkeley, California pled 
guilty to trafficking women and girls into the United States to place 
them in sexual servitude.
    On February 15th a defendant pled guilty to using cocaine, threats 
and beatings to force homeless African American men to work his 
agricultural fields in Florida. Sentencing is still pending.
    On February the 2nd a defendant was incarcerated for nine years for 
kidnapping a young woman from her family, smuggling her to the United 
States of America, and holding her and causing her to engage in sex 
acts.
    In spring of the year 2000 a defendant was incarcerated eight years 
for forcing several Thai women to work as domestic servants in Los 
Angeles.
    In spring of 1999 six defendants were incarcerated for using 
beatings, rapes and threats to force dozens of Mexican women and girls, 
some as young as 14 years old, to work in brothels in Florida and in 
the Carolinas.
    According to the congressional findings, thousands of persons, 
primarily women and children, are trafficked into the United States 
each year. Many of these women and girls are trafficked into the sex 
trade in this country. But these crimes are not limited to the sex 
industry. Victims are often forced into labor conditions in illegal 
sweatshops, in the agricultural industry and in domestic servitude.
    Our greatest challenges in identifying victims of worker 
exploitation are victims of trafficking are typically held in fear. We 
need to somehow communicate to these individuals that they can avoid 
this sense of fear, and they have an opportunity for redress. They 
rarely know how to report their crimes. And that's why I'm making the 
following announcements today, and frankly using the bully pulpit today 
to raise awareness and to let victims know how to report these crimes.
    There are three major areas where the department will focus its 
efforts to implement enforcement of this law.
    First, outreach. We must make the public aware of this problem and 
how to report it. A hotline was created last year by the National 
Worker Exploitation Task Force, and it was given temporary funding. I 
will permanently fund the hotline so that persons can report these 
crimes. The number of the hotline is 1-888-428-7581. The hotline will 
be staffed by an operator who has access to language-translation 
services, so individuals will be able to access the assistance of the 
hotline even if they are not skilled in the English language.
    In 1999, there were 27 criminal matters opened. But after the 
hotline was started in the year 2000, there were 75 criminal 
investigations opened. We will advertise the hotline using public 
service announcements, and we will distribute information on worker 
exploitation to immigrant and other communities by our involvement in 
those communities to signal to them the availability of this redress.
    I'm also initiating a community outreach program to work with local 
community groups; victims' rights organizations; immigrants' rights 
organizations; shelters and other groups. We want to inform victims of 
the protections and services that are available to them, and to 
encourage victims and others to report suspected trafficking crimes.
    In addition to this outreach effort, we need to indicate that there 
is a reason for us to have a strong effort in prosecution. The second 
step, then, of our program is educating prosecutors and other law 
enforcement officials. Today the Civil Rights Division, along with the 
Criminal Division and the Executive Office of the United States 
Attorneys, will issue the first guidance to all federal prosecutors on 
this issue. This guidance will detail the law enforcement tools 
available under the Trafficking Victims Protection Act.
    Today I am also announcing two new attorney positions in the Civil 
Rights Division, to pursue infractions of this law and these assaults 
upon the rights and dignity of these individuals. These attorneys will 
work on the outreach efforts that I have already mentioned. They will 
also help train local prosecutors and will act as a resource to make 
sure that prosecution efforts undertaken are undertaken with an 
awareness of all the resources available from the federal government.
    Number three, the third step in our strategy is the step of 
cooperation. We need cooperation among law enforcement officials at 
every effort and every level.
    The Federal Bureau of Investigation plays a critical leadership 
role in proactively identifying victims and investigating these crimes, 
and the Immigration and Naturalization Service plays a critical role on 
the front line. I am directing both the Federal Bureau of Investigation 
and the Immigration and Naturalization Service, INS, to work with the 
Civil Rights Division to explore ways to identify victims of 
trafficking and to refer these cases to the division for prosecution.
    This is a matter of serious concern. It is a matter that has been 
of concern to the elected representatives of the people in the 
Congress. They expressed themselves in terms of the need for 
enforcement in this respect in the law enacted late last year, and our 
response to that additional capability and responsibility is to 
implement this program of outreach, of prosecution, and of cooperation 
between the agencies that are required in order for this law and its 
prosecution to affect materially the rights of individuals in this 
area.
    I want to thank you for coming today. I look forward to your 
questions.
    Yes, ma'am?
    Question. Is this a new problem, a growing problem, or is it 
something that we're only just now realizing the magnitude of?
    ATTY GEN. ASHCROFT: This is a substantial problem. The litany of 
circumstances which I read to you today reflects that it is a serious 
problem and it has substantial prevalence. I can't--I don't have data 
to try and say whether or not this is a problem that is bigger now than 
it's ever been before. I just know that it's a serious problem and that 
there are the rights of--important rights of individuals that are 
seriously affected here. And we're going to take action to move against 
the infringement of those rights.
    Yes, Ma'am.
    Question. Could you go into a little more detail about what 
prosecutors need to be educated on with this law?
    ATTY GEN. ASHCROFT: Well, the law does two things, basically--the 
most recent enactment of the Congress, I should say. And I try not to 
be too professorial here, probably because I'm not an expert here, but 
the law expanded the definition of force so that a person could be 
coerced under the definitions provided for in last year's enactment in 
ways that aren't merely physical. Secondly, the penalties under the law 
were enhanced as a result of this most recent enactment. And they 
provide for penalties of up to 20 years in most cases, but in case of a 
death of one of the individuals whose rights were infringed, that could 
be as long as life in prison.
    In providing additional information to prosecutors--and obviously 
we're at a time when there will be some changes made in the prosecution 
leadership in the various U.S. Attorney's offices around the country--
we want them to be keenly aware of the fact of these expanded 
definitions because they will change the nature of prosecutions, and of 
course of the expanded penalties.
    Yes.
    Question. Can you maybe just tell about what rights people in a 
situation have when they have been brought here by force? Do they have 
the right to stay here?
    ATTY GEN. ASHCROFT: The Victims of Trafficking Act of the year 2000 
provided a special standing for those who report these violations, and 
people who called the hotline would be eligible for this standing. And 
I think it's called a T visa, which is a certain kind of temporary visa 
that provides for their ability to remain, pending the resolution of 
this matter and the potential that they be placed in a stream of 
eligible individuals for naturalization, or for normal processing in 
the course of the INS's normal work.
    It is thought to be very important.
    One of the things that's used to intimidate individuals is the 
suggestion that if you report, you'll automatically be deported. Other 
coercive tactics taken by those who have abused others have been to 
threaten either their families or those remain in other countries. And 
we wanted, by virtue of expanding this definition of the nature of 
coercion, together with the options of helping individuals with the T 
status visas, to make it easier for these violations to be reported and 
to give us the opportunity then with the reporting to have the chance 
to curtail this kind of activity.
    And this effort at enforcement picks up on what the Congress and 
the President did in October of last year to say that we want to move 
forward. We're welcoming additional information on the hotline. We're 
going to try and make sure people know about that with the outreach 
program. We've assigned additional resources for prosecution. And 
we'll, in addition to the additional resources for prosecution, issue 
the guidance protocols which make clear to individuals about this new 
option and opportunity. And, of course last but not least, we want to 
make sure that the coordination that's necessary to effective 
prosecution in this area between the investigative authorities, the 
immigration authorities and the prosecutional authorities is all there.
    Yes, sir?
    Question. I note that on your chart there, you have a Labor 
Department logo. And I also noted in the legislation that the State 
Department seemed to be the leading agency for this. Can you talk about 
how the various government agencies are working together? I guess you 
have a national task force on this now?
    ATTY GEN. ASHCROFT: Well, that would sure be apparent from the 
various--our piece of this, and that's the only thing I'm really 
qualified to talk about, is that we want to send a very clear signal 
that this is intolerable; that involuntary servitude and slavery, the 
illegal sweat shop, is not a part of the United States stands for. It 
demeans the work of those who are involved in it and undercuts the 
working capacity of those who are not involved.
    And it is important, obviously, to the labor community in the 
United Sates of America not to have substandard, illegal sweatshop 
conditions operated here. And the ability to hold people in those 
settings, not to report violations under threat or coercion, and this 
potential threat of exposure as illegal aliens, not having the right 
documentation, has been one of the means whereby there has been a 
restraint on the report of these abuses.
    Yes, Kevin?
    Question. What about the abuses overseas that's of concern to 
senators, that don't involve U.S. citizens, what can you do about that?
    ATTY GEN. ASHCROFT: Well, this is designed to focus on areas where 
we have jurisdiction to act. And I can't answer your question. I wish I 
could tell you that I had a way to make sure that there weren't any 
abuses. When people are solicited to come to the United States--I think 
what you're making reference to is they're told that there are 
opportunities here. I mean, one of the cases I believe relating to 
Alaska was that there was a recruitment of women in Russia to be part 
of what they were told would be a folk dance operation. It turned out 
not to be a folk dancing operation at all; it was something far less 
acceptable. So fraud in those kind of inducement situations I think can 
become a part of the proof of what the situation is here. But we really 
are focused on criminal activity that is involved in coercion and the 
repression of the rights of individuals in illegal settings here.
    Yes, sir?
    Question. How much new money is the Justice Department committing 
to the three steps that you mentioned?
    ATTY GEN. ASHCROFT: We won't be releasing details on our budget 
until April. But I've allocated the two additional attorneys. The 
advertising program, which has been contemplated here, is not a funded 
program on the part of government, it's a public service announcement 
program.
    Yes, sir?
    Question. On another subject, many privacy and civil liberties 
groups have questioned the Justice Department's use of the e-mail 
surveillance system, formerly known as Carnivore, now dubbed DSS-1000. 
Last year the department retained the Institute of Technology at 
Illinois to produce a report on the technological capabilities of this 
system, but there still are questions about its legality.
    I'm wondering what the administration's position on the use of 
Carnivore is, and will you continue to make use of it while this report 
of the Justice Department is still pending?
    ATTY GEN. ASHCROFT: I have not personally--the report, I believe, 
is working its way through the Justice Department at this time. I've 
not personally seen it. I have not altered in any way the ability of 
the administration to pursue its legal objectives in any kind of its 
surveillance activities.
    Yes, Mr. Sawyer?
    Question. General, on affirmative action, the Supreme Court 
yesterday agreed to revisit the Adarand case. And today there's a 
District Court decision out in Michigan on the--ruling unconstitutional 
the Michigan Law School affirmative action program, and there's a 
companion case that ruled constitutional the undergraduate case. Can 
you give us any insight and your thinking on that or where the 
department is likely to be as these cases make their way through?
    ATTY GEN. ASHCROFT: Well, this is a matter of very serious concern. 
You may remember that this came up at my confirmation hearing, and as I 
noted then, when I was a United States Senator I had a responsibility 
to consider legislation and to give my best judgment as to whether the 
legislation was constitutional and prudent.
    I voted against the reauthorization of set-asides that were at 
issue in the Adarand case because the specific language actually came 
back before the Senate, and I sided with what I believe to have been 
the Supreme Court's judgment there.
    However, I emphasized in my hearings that my responsibility as 
Attorney General, on a routine basis, might be different than 
commenting on what I thought the constitutionality of the law would be. 
My responsibility no longer allows me to oppose laws merely because I 
have a personal view that they may be imprudent or even that, in my own 
best judgment, I think they might be unconstitutional. Rather, my 
routine responsibility as Attorney General is to defend acts of 
Congress and federal regulations as long as they are in good faith and 
a good-faith defense is possible. That would be the routine 
responsibility.
    Now, the Supreme Court yesterday granted cert again in the Adarand 
case. Briefs in that case will be due for filing on the 11th day of 
June from the United States government and, as we prepare our positions 
in that case, I will consult with the Department of Transportation and 
the administration prior to fulfilling our legal responsibility in this 
particular matter. The Department of Transportation certainly retains 
the authority to reconsider its regulations, and if the Department of 
Transportation were to reformulate its regulations, that could alter 
the legal landscape significantly.
    Now, the Supreme Court's consideration of this case would provide 
important guidance to the federal government. The case provides the 
court with an opportunity to clarify how the strict scrutiny test 
applies to race-conscious federal programs. If the court strikes down 
the Transportation Department's regulations, it likely would require 
the federal government to reconsider and review or reformulate the 
numerous federal race-conscious programs. But prior to participating 
further by way of filing briefs on the 11th of June, I'll be conferring 
with the Transportation Department and the administration in this 
matter.
    Question. So that when you said earlier this month that you would 
obviously defend the Department of Transportation regulations, you 
didn't mean to imply that there wouldn't be this further discussion 
about--(inaudible)--
    ATTY GEN. ASHCROFT: I can't say that the----
    Question. Regulations?
    ATTY GEN. ASHCROFT: I can't say that the department won't make a 
decision about its regulations in the light of this grant of cert.
    Yes, ma'am.
    Question. Sir, when will the department make a decision concerning 
whether or not to allow closed circuit television for victims of--
families of the Oklahoma City bombing to watch the execution?
    ATTY GEN. ASHCROFT: The tragedy of Oklahoma City is one which 
continues, and obviously I respect the grief that the families that 
were the subject of that tragedy have endured. I have asked the Federal 
Bureau of Prisons to provide me with a plan for accommodating the needs 
and feelings of those families that would reflect also the interests of 
justice in regard to this execution. Prior to making a final decision, 
I expect to confer with members of that family group and their 
representatives as well as to receive the recommendation of the Federal 
Bureau of Prisons, and will announce our plan for accommodating and 
appropriately respecting the sensitivities of these families and the 
needs of justice.
    Question. Has that meeting been set up yet?
    ATTY GEN. ASHCROFT: I don't believe it's scheduled.
    Question. Mr. Ashcroft?
    Staff: We have time for one or two more questions.
    Question. There was a report this week that the Justice Department 
wants to seek the death penalty against Robert Hanssen; also that the 
U.S. attorney might be opposed to that matter. Has the department made 
a determination about where it intends to go with this prosecution?
    ATTY GEN. ASHCROFT: I really don't want to discuss specific cases. 
I think my predecessor was wise in telling me when she came to visit 
me, don't start discussing specific cases. Let me just say to you that 
as it relates to the death penalty, particularly in cases like national 
security cases that involve the compromise of either systems or 
information relating to the national security of the United States, 
that I believe we have to have an assessment of the national interest 
that relates to whether or not the penalty should be the ultimate 
penalty or not. And let me just clarify that a little bit if you will.
    By the national interest, I mean that there is a national interest 
in making sure that we send a signal, that we take very seriously any 
compromises of the national interest and the national security by 
individuals who would inappropriately leak information or sell 
information. But we would also take very seriously the need or 
opportunity to ascertain things important for us to know about the 
nature of what had happened that might be available to us in the 
context of a plea bargain.
    And ultimately, when we make a decision in matters like this, the 
decision will be made reflecting the national interests of the United 
States, both the national security interests reflected in terms of the 
information that's been compromised and that which hasn't been 
compromised, and the national interests reflected in sending a very 
clear signal that the United States of America does not take lightly, 
does not view without seriousness, compromises in our national security 
and the sale of national secrets.
    Yes, ma'am.
    Question. Sir, in the wake of the Hanssen case, the FBI tomorrow 
will begin an extended polygraph program. There are--some have 
mentioned or there's been a suggestion that FBI agents should also 
undergo psychological evaluations on a regular basis. Is that 
something--is that something that the Justice Department could support?
    ATTY GEN. ASHCROFT: You know, I believe that there is going to be a 
lot of healthy discussion--and I think it will come from a number of 
quarters--about how we can better secure our intelligence effort. And I 
look forward to the inspector general's report from within this 
department. Inspector General Fine is an individual of great talent, 
and I've asked him to look carefully here. I look forward to the 
contribution made by Judge Webster, who has extensive security, 
international and national security interests experience. And I look 
forward to the work of the United States Congress. In particular, I've 
dealt with Senator--the Senators on the Intelligence Committee, and I 
believe that it's--they will be a part of helping develop a strategy. 
I'm grateful for the first steps that are taken in the department, and 
particularly in the Federal Bureau of Investigation, to promote 
security. We have on a(n) interim basis begun to implement audit 
standards so that we can ascertain whether individuals have access to 
information for which they have no real use and whether their accessing 
of that information is justified and appropriate. The implementation of 
some lie detector tests that had not previously been implemented will 
be a valuable tool.
    In no way do I believe that these interim measures should in any 
way curtail the level of the inquiries that are underway in the 
Congress, by Judge Webster, or by the inspector general.
    While we should--if you could allow the analogy--take whatever sort 
of roadside measures are necessary in triage to stop whatever problems 
we might think might exist, we need the full set of x-rays, we need the 
full diagnosis, and to have a commitment to implementing, on a 
continuing basis, anything that will upgrade our capacity. So, we look 
forward to the work of these three agencies: the Congress, the 
inspector general, and Judge Webster.
    And the last thing I would do would maybe quote--oh shoot, I can't 
remember who the philosopher was, but someone said that, ``Eternal 
vigilance is the price of liberty.'' I don't think we should ever 
conclude our evaluation of whether or not there are ways for us to 
secure better what we do. This should be a constant review, especially 
in the area of national security. And so I hope we will always remain 
open to increasing our capacity to reduce and minimize the risk of 
breaches that would threaten the security of this nation.
    I thank you very much. Nice to be with you.
         Guidance on New Law Concerning Trafficking in Persons
    This memorandum provides guidance to U.S. Attorneys considering 
investigation and prosecution under the newly enacted Trafficking 
Victims Protection Act of 2000. See Public Law 106-386. This law 
creates several new crimes and sets forth new benefits, services, and 
protections for victims of severe forms of trafficking in persons. The 
Act defines ``severe forms of trafficking in persons'' as the 
recruitment, harboring, transportation, provision, or obtaining of a 
person: (1) for labor or services, through the use of force, fraud, or 
coercion for the purpose of subjection to involuntary servitude, 
peonage, debt bondage, or slavery, or (2) for the purpose of a 
commercial sex act in which such act is induced by force, fraud, or 
coercion, or in which the person induced to perform such act has not 
attained 18 years of age.
    Under the Act, those convicted of trafficking offenses may be 
imprisoned for up to 20 years and, in some instances, for life. This 
represents a significant increase over preexisting involuntary 
servitude and slavery statutes, which carried a maximum sentence of 10 
years' imprisonment.
    The interagency Worker Exploitation Task Force (WETF), which is co-
chaired by the Assistant Attorney General for Civil Rights and the 
Solicitor of the U.S. Department of Labor, is helping to coordinate 
enforcement efforts against trafficking and slavery.\1\ Criminal cases 
generally are staffed jointly by the local U.S. Attorney's office and 
the Criminal Section of the Civil Rights Division. The EOUSA point of 
contact for the WETF is Richard Smith, (202) 514-1023. The Civil Rights 
Division points of contact for the WETF are Albert N. Moskowitz, Chief 
of the Criminal Section, and Lou de Baca, the Involuntary Servitude and 
Slavery Case Coordinator, (202) 514-3204. The Criminal Division's WETF 
point of contact is Tom Burrows, Deputy Chief of the Child Exploitation 
and Obscenity Section, (202) 514-5780.
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    \1\ To learn more about the WETF (including fact sheets and an 
outreach poster) and to access a link to the text of the new 
trafficking law, please see: www.usdoj.gov/crt/crim/wetf.htm.
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    To help the Department more effectively coordinate enforcement 
efforts and data collection, U.S. Attorneys' offices should notify the 
Civil Rights Division WETF points of contact about investigations and 
prosecutions involving severe forms of trafficking in persons. In 
addition, we recommend distribution of this memorandum to AUSAs 
handling criminal civil rights, immigration, Mann Act, and OCDTEF/Asian 
Organized Crime matters. We likewise recommend distribution to victim/
witness and Law Enforcement Coordinating Committee (LECC) coordinators.
A. New Criminal Statutes
    The new criminal statutes created by the Act are codified in 
Chapter 77 of Title 18, the peonage and slavery chapter. The text of 
the new statutes is attached hereto as Appendix A. The primary 
legislative history for the new law is the Conference Report on H.R. 
3244, Victims of Trafficking and Violence Protection Act of 2000 (H.R. 
Conf. Rep. No. 106-939, 106th Cong., 146 Cong. Rec. H8855 (2000)).
    These new statutes are designed to reach the subtle means of 
coercion that traffickers often use to bind their victims in service. 
Such means include psychological coercion, trickery, and the seizure of 
documents. Preexisting slavery and peonage statutes and case law made 
it very difficult to prosecute such conduct, but the new statutes 
permit federal prosecutors to address this wider range of activities.
    There are four new criminal statutes, Sections 1589-1592. Section 
1589 creates a new crime of ``forced labor,'' which allows prosecutors 
to reach severe forms of worker exploitation that do not rise to the 
level of involuntary servitude. Section 1590 allows the prosecution of 
traffickers as principals rather than as aiders or abettors. Section 
1591 creates a new tool to combat sex trafficking of minors and sex 
trafficking by force, fraud, or coercion. Finally, Section 1592 
criminalizes the use or destruction of immigration or identification 
documents in furtherance of a trafficking scheme.
    In addition, newly-enacted Sections 1593 and 1594, which modify all 
of the Chapter 77 offenses, provide for prosecution of attempts and set 
forth forfeiture provisions and mandatory restitution measures that 
strip traffickers of any profits gained from their victims' forced 
service.
            1. Forced Labor (Section 1589)
    Section 1589 criminalizes labor or services obtained or maintained 
through forms of coercion not actionable under the standard set forth 
in United States v. Kozminski, 487 U.S. 931 (1988). Kozminski limited 
the reach of peonage and slavery statutes, 18 U.S.C. Sec. Sec. 1581-88, 
to cases in which the labor of the victim was obtained or maintained 
through force, threats of force, or threats of legal coercion.
    Section 1589(1) prohibits threats of serious harm to, or physical 
restraint against, the worker or another person. Importantly, Section 
1589(1) does not limit these threats to physical harm. It also reaches 
instances ``where traffickers threaten harm to third persons, restrain 
their victims without physical violence or injury, or threaten dire 
consequences by means other than overt violence.'' 146 Cong. Rec. at 
H8881. The relevant individual circumstances of a victim should be 
considered when determining whether a particular type or degree of harm 
or coercion is sufficient to obtain the victim's labor or services.
    Section 1589(2) prohibits the use of a scheme, plan, or pattern 
intended to cause the victim to believe that he, she or another will 
suffer serious harm or physical restraint unless he or she complies. 
Such schemes might include the use of psychological threats, ostracism, 
isolation, banishment, starvation, or threats against family members or 
property. For example, a trafficker might tell his victim, unfamiliar 
with the English language or U.S. culture, that she will be injured or 
killed if she leaves the trafficker's ``protection.'' For other 
specific examples, see 146 Cong. Rec. at H8881.
    Section 1589(3) prohibits the abuse or threatened abuse of the law 
or the legal process. Under this standard, threats to report a victim 
to the INS may be actionable. This subsection may also provide an 
alternative means of prosecuting loansharking threats that maintain 
forced labor through threats of legal action in a victim's home 
country.
            2. Trafficking with Respect to Peonage, Slavery, 
                    Involuntary Servitude, or Forced Labor (Section 
                    1590)
    Newly-enacted Section 1590 allows the prosecution as principals 
rather than aiders or abettors of those who recruit, harbor, transport, 
provide, or obtain persons for labor or services under conditions that 
violate any of the Chapter 77 offenses.
            3. Sex Trafficking of Children or by Force, Fraud, or 
                    Coercion (Section 1591)
    Section 1591 combats trafficking for sexual exploitation by 
combining features of the Mann Act and involuntary servitude statutes. 
Section 1591 makes it illegal to recruit, move, or harbor a person (or 
to benefit from such activities) knowing that the person will be caused 
to engage in commercial sex acts, where the victim is either under 18 
years of age or is subjected to the commercial sex act by force, fraud, 
or coercion. A ``commercial sex act'' is any sex act for which 
something of value is given or received.
    In light of this new statute, the Mann Act should no longer be the 
primary vehicle for sex trafficking cases. Prosecutors should continue 
to use the Mann Act for criminal sexual activity not involving 
prostitution. Because Section 1591 has not yet been tested, we 
encourage you to contact Tom Burrows in the Child Exploitation and 
Obscenity Section of the Criminal Division, (202) 514-5780, before 
charging under this statute.
                a. Interstate commerce nexus
    The jurisdictional element requires recruitment, harboring, or 
transporting in or affecting interstate commerce. This requirement 
could be met with proof such as transporting a person across a state 
line for prostitution, as in Mann Act cases. The interstate commerce 
requirement of Section 1591 may be satisfied in other ways as well, 
such as by proving that the victim was harbored in a brothel that 
bought supplies or solicited customers from other states.\2\ Note, 
however, that Section 1591 does not apply if foreign but not interstate 
commerce is involved.
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    \2\ Case law under the federal arson statute, 18 U.S.C. 
Sec. 844(i), may be helpful here to establish the jurisdictional 
element.
---------------------------------------------------------------------------
                b. Coercion and fraud for purposes of Section 1591
    Coercion can be proven by evidence of (1) actual threats of harm, 
(2) a scheme, plan or pattern intended to cause the victim to believe 
that harm would result if the commercial sexual acts were not 
performed, or (3) threats of legal repercussions against the victim 
(e.g. deportation).
    Adult victims can only support a charge under Section 1591 if they 
engaged in the commercial sexual activity through force, fraud, or 
coercion. By including fraud in this section, Congress criminalized a 
broad range of activity. For example, prosecutors may present cases 
under this statute in which a victim is fraudulently tricked into 
sexual activity, such as through a false modeling agency.
                c. Comparisons with the Mann Act
    The trafficking conduct prohibited under the new statute is in many 
ways similar to that prohibited under the Mann Act. Charging both Mann 
Act and Section 1591 for the same activity thus may raise a 
multiplicity issue. This problem might be avoided by pairing a Mann Act 
charge under Sections 2421 or 2423(a) (which do not require a showing 
of coercion) and a Section 1591 charge alleging fraud, force, or 
coercion. Each fact pattern and charging decision should be reviewed 
individually to avoid potential legal defects in the indictment.
    As to jurisdiction, Section 1591, in contrast to the Mann Act, only 
includes interstate commerce. Section 1591, therefore, should not be 
used for international trafficking unless, after the victim was brought 
to the United States, there was further movement across states in 
furtherance of the trafficking scheme. The jurisdictional element of 
Section 1591 may also be met without the border-crossing travel 
required by the Mann Act if other effects on interstate commerce can be 
proven.
    Attempts are punishable under either statute. The Mann Act 
explicitly covers attempts, while Section 1591 covers attempts by 
virtue of Section 1594(a).
    Finally, if the evidence is sufficient for using either the Mann 
Act or Section 1591, then the prosecutor may consider whether the 
higher maximum sentence under Section 1591 warrants its use.
            4. Document Servitude (Section 1592)
    An increasing number of victims are held in service not by force or 
threats but by the confiscation of (and denial of access to) actual or 
purported identification or immigration documents. Section 1592 
criminalizes the destruction or withholding of a victim's documents for 
the purpose of unlawfully maintaining the victim's labor or services. 
Because this section carries a five-year statutory maximum, it may be 
useful in plea negotiations.
                a. Direct link to trafficking statutes
    Section 1592(a)(1) prohibits the confiscation of documents in the 
course of a violation of the other trafficking laws. This subsection 
thus does not act as a stand-alone crime, but instead increases the 
overall statutory maximum sentence available to prosecutors.\3\
---------------------------------------------------------------------------
    \3\ Under the sentencing guidelines, the requirement that the 
document seizure be in the course of a violation of the more serious 
offenses may subsume the penalty for the Section 1592 violation into 
the more serious crimes.
---------------------------------------------------------------------------
    Section 1592(a)(2) prohibits the confiscation of documents with the 
intent to violate other trafficking offenses. This subsection will 
likely be helpful in negotiating plea dispositions, especially with 
cooperating co-defendants. To establish ``intent to violate,'' the 
investigation should explore whether the defendants intended the 
victims to believe that the confiscation of the documents rendered them 
incapable of leaving service. This activity may also support charges 
under Section 1589(2).
                b. Indirect link to trafficking statutes
    Section 1592(a)(3), which does not incorporate a direct link to the 
other trafficking statutes, prohibits confiscation of a document with 
the intent to prevent or restrict a victim's liberty to move or travel, 
in order to keep the victim in service. Section 1592(a)(3) applies only 
if the person was a victim of a severe form of trafficking.
            5. Miscellaneous Provisions
                a. Sentencing guidelines
    The Act directs the U.S. Sentencing Commission to consider amending 
the sentencing guidelines for offenses involving trafficking of 
persons. The Commission has already promulgated guideline amendments.
                b. Mandatory restitution
    Section 1593 provides for special restitution calculations in 
Chapter 77 offenses. Restitution is mandatory in these cases.
    Restitution should be estimated as the greater of either: (1) the 
gross income or value to the defendant of the victim's service or 
labor, or (2) the value of the victim's labor as guaranteed under the 
minimum wage and overtime guarantees of the Fair Labor Standards Act. 
In trafficking cases, restitution should also include costs incurred by 
the victim for: medical services relating to physical, psychiatric, or 
psychological care; physical and occupational therapy or 
rehabilitation; necessary transportation, temporary housing, and child 
care expenses; lost income; attorneys' fees, as well as other costs 
incurred; and any other losses suffered by the victim as a proximate 
result of the offense.
B. Victim Protections
    The new statute imposes new responsibilities on investigators and 
prosecutors who deal with victims of severe forms of trafficking. 
Detailed regulations and guidelines are forthcoming. In the interim, 
investigators and prosecutors may wish to consult the following 
individuals for assistance with short-term compliance: Camille Bennett, 
EOUSA, (202) 305-2161, or Lorna Grenadier, Victim/Witness Specialist in 
the Criminal Section of the Civil Rights Division, (202) 514-3204.
            1. Access to Benefits and Services
    The Act declares alien victims of severe trafficking eligible for 
many federally-funded victim and witness assistance programs to the 
same extent as aliens admitted to the United States as a refugee under 
Sec. 207 of the Immigration and Nationality Act. As a result, the 
Emergency Witness Assistance Program (EWAP) should not be viewed as the 
central method of securing immediate assistance for trafficking 
witnesses.
    The Department of Justice and the Department of Health and Human 
Services (HHS) are developing a certification process, as required by 
the Act, so that adult victims of severe trafficking can receive public 
assistance, medical care, housing, and other publicly available 
benefits and services, without regard to their immigration status. 
Pending further guidance, prosecutors and victim/witness coordinators 
should contact Camille Bennett, EOUSA, (202) 305-2161, or Lorna 
Grenadier, Victim/Witness Specialist in the Criminal Section of the 
Civil Rights Division, (202) 514-3204, for assistance with the interim 
certification process.
            2. Victim Protection Regulations
    The Act requires by April 26, 2001, the promulgation of regulations 
guaranteeing victims protection while in federal custody and access to 
information about their rights, authorizing victims' continued presence 
in United States, and providing mechanisms for training law enforcement 
personnel on the needs of trafficking victims. See Section 107(c), 
attached as Appendix B. In the interim, prosecutors may contact the 
District INS victim/witness coordinator to arrange for a victim's 
continued presence or for information about victim access to 
information about their rights under the new law.
            3. Visa Issues
    The new law enhances the protection offered to trafficking victims. 
It creates two new nonimmigrant classifications: a ``T'' visa for 
victims of severe forms of trafficking and (within the Violence Against 
Women Act of 2000) a ``U'' visa for an array of crimes including 
trafficking. The T visa is available to individuals who: (1) are a 
victim of a severe form of trafficking, (2) are physically present in 
the United States or a U.S. territory, (3) would suffer extreme 
hardship involving unusual and severe harm upon removal, and (4) either 
are under 15 years of age or have complied with any reasonable request 
to assist a trafficking investigation or prosecution. The parents, 
children, and spouses of victims are also eligible in certain instances 
for T visas.
    The U visa is available to a broader group of crime victims, 
including those who: (1) have suffered substantial physical or mental 
abuse due to having been a victim of trafficking; (2) possess 
information concerning the trafficking; (3) have been helpful, are 
being helpful, or are likely to be helpful to law enforcement; and (4) 
have been the victim of criminal activity.
    The INS is currently developing regulations for the new visas.
            4. Trafficking Versus Alien Smuggling Considerations
    Trafficking cases differ from most alien smuggling cases. In 
smuggling cases, the strongest witnesses are designated as material 
witnesses and the remainder of the smuggled aliens generally are 
deported. In trafficking cases, by contrast, all victims typically 
remain in the United States as potential witnesses. Indeed, some 
federal district courts have ordered that all trafficking victims be 
kept in this country, under the theory that those witnesses who are not 
likely to testify for the prosecution may be induced to become defense 
witnesses under Brady. The Civil Rights Division has developed model 
victim interview questions that help to distinguish trafficking/
servitude situations from alien smuggling cases.
    Unlike most alien smuggling cases, trafficked persons are victims 
of crime. This is a critical distinction. These victims must be treated 
in a manner consistent with the Attorney General Guidelines for Victim 
and Witness Assistance. Trafficking victims often need medical and 
other services to deal with the trauma associated with having been 
trafficked. The new Act provides immediate protection and lawful status 
as well as potential permanent immigration status to these victims so 
that they may pursue legal remedies against their traffickers while 
receiving needed services. For these reasons, the common practice in 
smuggling cases of designation and deportation is inappropriate in 
trafficking prosecutions.
                     Appendix A--Statutory Language
Title 18, United States Code, Section 1589 (Forced labor)
    Whoever knowingly provides or obtains the labor or services of a 
person--
            (1) by threats of serious harm to, or physical restraint 
        against, that person or another person;
            (2) by means of any scheme, plan, or pattern intended to 
        cause the person to believe that, if the person did not perform 
        such labor or services, that person or another person would 
        suffer serious harm or physical restraint; or
            (3) by means of the abuse or threatened abuse of law or the 
        legal process,
shall be fined under this title or imprisoned not more than 20 years, 
or both. If death results from the violation of this section, or if the 
violation includes kidnapping or an attempt to kidnap, aggravated 
sexual abuse or the attempt to commit aggravated sexual abuse, or an 
attempt to kill, the defendant shall be fined under this title or 
imprisoned for any term of years or life, or both.
Title 18, United States Code, Section 1590 (Trafficking with respect to 
        peonage, slavery, involuntary servitude, or forced labor)
    Whoever knowingly recruits, harbors, transports, provides, or 
obtains by any means, any person for labor or services in violation of 
this chapter shall be fined under this title or imprisoned not more 
than 20 years, or both. If death results from the violation of this 
section, or if the violation includes kidnapping or an attempt to 
kidnap, aggravated sexual abuse, or the attempt to commit aggravated 
sexual abuse, or an attempt to kill, the defendant shall be fined under 
this title or imprisoned for any term of years or life, or both.
Title 18, United States Code, Section 1591 (Sex trafficking of children 
        or by force, fraud or coercion)
    (a) Whoever knowingly--
            (1) in or affecting interstate commerce, recruits, entices, 
        harbors, transports, provides, or obtains by any means a 
        person; or
            (2) benefits, financially or by receiving anything of 
        value, from participation in a venture which has engaged in an 
        act described in violation of paragraph (1), knowing that 
        force, fraud, or coercion described in subsection (c)(2) will 
        be used to cause the person to engage in a commercial sex act, 
        or that the person has not attained the age of 18 years and 
        will be caused to engage in a commercial sex act, shall be 
        punished as provided in subsection (b).
    (b) The punishment for an offense under subsection (a) is--
            (1) if the offense was effected by force, fraud, or 
        coercion or if the person transported had not attained the age 
        of 14 years at the time of such offense, by a fine under this 
        title or imprisonment for any term of years or for life, or 
        both; or
            (2) if the offense was not so effected, and the person 
        transported had attained the age of 14 years but had not 
        attained the age of 18 years at the time of such offense, by a 
        fine under this title or imprisonment for not more than 20 
        years, or both.
    (c) In this section:
            (1) The term ``commercial sex act'' means any sex act, on 
        account of which anything of value is given to or received by 
        any person.
            (2) The term ``coercion'' means--
                    (A) threats of serious harm to or physical 
                restraint against any person;
                    (B) any scheme, plan, or pattern intended to cause 
                a person to believe that failure to perform an act 
                would result in serious harm to or physical restraint 
                against any person; or
                    (C) the abuse or threatened abuse of law or the 
                legal process.
            (3) The term ``venture'' means any group of 2 or more 
        individuals associated in fact, whether or not a legal entity.
Title 18, United States Code, Section 1592 (Unlawful conduct with 
        respect to documents in furtherance of trafficking, peonage, 
        slavery, involuntary servitude, or forced labor)
    (a) Whoever knowingly destroys, conceals, removes, confiscates, or 
possesses any actual or purported passport or other immigration 
document, or any other actual or purported government identification 
document, of another person--
            (1) in the course of a violation of section 1581, 1583, 
        1584, 1589, 1590, 1591, or 1594(a);
            (2) with intent to violate section 1581, 1583, 1584, 1589, 
        1590, or 1591; or
            (3) to prevent or restrict or to attempt to prevent or 
        restrict, without lawful authority, the person's liberty to 
        move or travel, in order to maintain the labor or services of 
        that person, when the person is or has been a victim of a 
        severe form of trafficking in persons, as defined in section 
        103 of the Trafficking Victims Protection Act of 2000;
shall be fined under this title or imprisoned for not more than 5 
years, or both.
    (b) Subsection (a) does not apply to the conduct of a person who is 
or has been a victim of a severe form of trafficking in persons, as 
defined in section 103 of the Trafficking Victims Protection Act of 
2000, if that conduct is caused by, or incident to, that trafficking.
Section 103 of Public Law 106-386 defines ``severe forms of trafficking 
        in persons'' as follows:
            (8) Severe forms of trafficking in persons.--The term 
        ``severe forms of trafficking in persons'' means--
                    (A) sex trafficking in which a commercial sex act 
                is induced by force, fraud, or coercion, or in which 
                the person induced to perform such act has not attained 
                18 years of age; or
                    (B) the recruitment, harboring, transportation, 
                provision, or obtaining of a person for labor or 
                services, through the use of force, fraud, or coercion 
                for the purpose of subjection to involuntary servitude, 
                peonage, debt bondage,\4\ or slavery.
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    \4\ Section 103 of Public Law 106-386 states (4) Debt bondage.--The 
term ``debt bondage'' means the status or condition of a debtor arising 
from a pledge by the debtor of his or her personal services or of those 
of a person under his or her control as a security for debt, if the 
value of those services as reasonably assessed is not applied toward 
the liquidation of the debt or the length and nature of those services 
are not respectively limited and defined.
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Title 18, United States Code, Section 1593 (Mandatory restitution)
    (a) Notwithstanding sections 3663 or 3663A, and in addition to any 
other civil or criminal penalties authorized by law, the court shall 
order restitution for any offense under this chapter.
    (b)(1) The order of restitution under this section shall direct the 
defendant to pay the victim (through the appropriate court mechanism) 
the full amount of the victim's losses, as determined by the court 
under paragraph (3) of this subsection.
    (2) An order of restitution under this section shall be issued and 
enforced in accordance with section 3664 in the same manner as an order 
under section 3663A.
    (3) As used in this subsection, the term ``full amount of the 
victim's losses'' has the same meaning as provided in section 
2259(b)(3) and shall in addition include the greater of the gross 
income or value to the defendant of the victim's services or labor or 
the value of the victim's labor as guaranteed under the minimum wage 
and overtime guarantees of the Fair Labor Standards Act (29 U.S.C. 201, 
et seq.).
    (c) As used in this section, the term ``victim'' means the 
individual harmed as a result of a crime under this chapter, including, 
in the case of a victim who is under 18 years of age, incompetent, 
incapacitated, or deceased, the legal guardian of the victim or a 
representative of the victim's estate, or another family member, or any 
other person appointed as suitable by the court, but in no event shall 
the defendant be named such representative or guardian.
Title 18, United States Code, Section 1594 (General provisions)
    (a) Whoever attempts to violate section 1581, 1583, 1584, 1589, 
1590, or 1591 shall be punishable in the same manner as a completed 
violation of that section.
    (b) The court, in imposing sentence on any person convicted of a 
violation of this chapter, shall order, in addition to any other 
sentence imposed and irrespective of any provision of State law, that 
such person shall forfeit to the United States--
            (1) such person's interest in any property, real or 
        personal, that was used or intended to be used to commit or to 
        facilitate the commission of such violation; and
            (2) any property, real or personal, constituting or derived 
        from, any proceeds that such person obtained, directly or 
        indirectly, as a result of such violation.
    (c)(1) The following shall be subject to forfeiture to the United 
States and no property right shall exist in them:
            (A) Any property, real or personal, used or intended to be 
        used to commit or to facilitate the commission of any violation 
        of this chapter.
            (B) Any property, real or personal, which constitutes or is 
        derived from proceeds traceable to any violation of this 
        chapter.
    (2) The provisions of chapter 46 of this title relating to civil 
forfeitures shall extend to any seizure or civil forfeiture under this 
subsection.
    (d) Witness Protection.--Any violation of this chapter shall be 
considered an organized criminal activity or other serious offense for 
the purposes of application of chapter 224 (relating to witness 
protection).
                     Appendix B--Victim Protections
Section 107(c), Public Law 106-386, Trafficking Victims Protection Act 
        of 2000
    Trafficking Victim Regulations.--Not later than 180 days after the 
date of enactment of this Act, the Attorney General and the Secretary 
of State shall promulgate regulations for law enforcement personnel, 
immigration officials, and Department of State officials to implement 
the following:
            (1) Protections while in custody.--Victims of severe forms 
        of trafficking, while in the custody of the Federal Government 
        and to the extent practicable, shall--
                    (A) not be detained in facilities inappropriate to 
                their status as crime victims;
                    (B) receive necessary medical care and other 
                assistance; and
                    (C) be provided protection if a victim's safety is 
                at risk or if there is danger of additional harm by 
                recapture of the victim by a trafficker, including--
                            (i) taking measures to protect trafficked 
                        persons and their family members from 
                        intimidation and threats of reprisals and 
                        reprisals from traffickers and their 
                        associates; and
                            (ii) ensuring that the names and 
                        identifying information of trafficked persons 
                        and their family members are not disclosed to 
                        the public.
            (2) Access to information.--Victims of severe forms of 
        trafficking shall have access to information about their rights 
        and translation services.
            (3) Authority to permit continued presence in the united 
        states.--Federal law enforcement officials may permit an alien 
        individual's continued presence in the United States, if after 
        an assessment, it is determined that such individual is a 
        victim of a severe form of trafficking and a potential witness 
        to such trafficking, in order to effectuate prosecution of 
        those responsible, and such officials in investigating and 
        prosecuting traffickers shall protect the safety of trafficking 
        victims, including taking measures to protect trafficked 
        persons and their family members from intimidation, threats of 
        reprisals, and reprisals from traffickers and their associates.
            (4) Training of government personnel.--Appropriate 
        personnel of the Department of State and the Department of 
        Justice shall be trained in identifying victims of severe forms 
        of trafficking and providing for the protection of such 
        victims.
                               Memorandum
                        U.S. Department of Justice,
                                     Civil Rights Division,
                                  Washington, DC, January 11, 2002.
  memorandum for heads of federal grant agencies general counsels and 
                         civil rights directors
FROM: Ralph F. Boyd, Jr., Assistant Attorney General, Civil Rights 
        Division
SUBJECT: Executive Order 13166 (Improving Access to Services for 
        Persons with Limited English Proficiency)

    I am writing to encourage agencies to expedite their work on 
limited English proficiency (LEP) guidance documents in order to be in 
a position to meet the 120-day deadline set forth in my memorandum 
dated October 26, 2001. A copy of that memorandum is attached.
Background
    On October 26, 2001, I issued a memorandum to clarify policy 
guidance issued by the Department of Justice (DOJ) entitled 
``Enforcement of Title VI of the Civil Rights Act of 1964--National 
Origin Discrimination Against Persons With Limited English 
Proficiency.'' 65 F.R. 50123 (August 16, 2000) (DOJ LEP Guidance). That 
policy guidance had been issued to set forth general principles for 
agencies to apply in developing guidance on how their recipients can 
provide meaningful access to LEP persons and, therefore, comply with 
the Title VI disparate impact regulations, as required by Executive 
Order 13166.
    The memorandum instructed agencies that had issued LEP guidance for 
their recipients pursuant to Executive Order 13166 and Title VI of the 
Civil Rights Act to notify the Department of Justice, publish a notice 
asking for public comment on the guidance documents they have issued, 
and, if necessary, clarify or modify its existing guidance. Agencies 
that had not yet published guidance documents were to submit agency-
specific guidance to the Department of Justice. Following review by the 
Department of Justice and before finalizing their guidance, the 
agencies were to obtain public comment on their proposed guidance 
documents.
Further agency action
    The Department of Justice has learned that some agencies that had 
previously published LEP guidance had obtained significant public 
comment on those materials following the original publication of that 
guidance. The Department therefore believes that it is appropriate for 
these agencies to expedite their review of their existing guidance in 
light of the comment they have already received and the Department's 
October 26 memorandum. These agencies should notify the Department of 
Justice of any need to clarify or modify existing guidance by January 
25, 2002.
    Other agencies, however, have not yet obtained significant public 
comment on their previously published guidance. These agencies should 
immediately publish a request for comment on their existing guidance 
documents. In addition, they should expedite their review of their 
existing guidance in light of the comment they will obtain and notify 
the Department of Justice of any need to clarify or modify existing 
guidance as soon as possible.
    If it is determined that an agency's existing guidance should be 
clarified or modified, that agency should seek public comment on any 
proposed revisions before making them final.
    Finally, for those agencies that have not previously published LEP 
guidance documents, I request them to expedite their drafting of LEP 
guidance documents and to submit them to the Department of Justice as 
soon as possible. Following review by the Department and before 
finalizing its guidance, each of these agencies must then publish its 
agency-specific LEP guidance documents for public comment.
    My October 26 memorandum requested that all new LEP guidance 
documents be published in final form by February 25th, 2002. Because 
many agencies have not yet submitted their guidance documents to the 
Department of Justice for review or taken steps to obtain public 
comment, I am concerned that they may have difficulty meeting this 
deadline. I thus request that all such agencies expedite their 
consideration of this matter and notify the Department regarding the 
status of their progress regarding the development of LEP guidance by 
January 22, 2002.
    The DOTs Civil Rights Division, Coordination and Review Section 
((202) 307-2222), stands ready to assist agencies in this matter.
                               Memorandum
                        U.S. Department of Justice,
                                     Civil Rights Division,
                                  Washington, DC, October 26, 2001.
 memorandum for heads of departments and agencies general counsels and 
                         civil rights directors
FROM: Ralph F. Boyd, Jr., Assistant Attorney General, Civil Rights 
        Division
SUBJECT: Executive Order 13166 (Improving Access to Services for 
        Persons with Limited English Proficiency)

    Federal agencies have recently raised several questions regarding 
the requirements of Executive Order 13166. This Memorandum responds to 
those questions. As discussed below, in view of the clarifications 
provided in this Memorandum, agencies that have issued Limited English 
Proficiency (``LEP'') guidance for their recipients pursuant to 
Executive Order 13166 and Title VI of the Civil Rights Act should, 
after notifying the Department of Justice (``DOJ''), publish a notice 
asking for public comment on the guidance documents they have issued. 
Based on the public comment it receives and this Memorandum, an agency 
may need to clarify or modify its existing guidance. Agencies that have 
not yet published guidance documents should submit agency-specific 
guidance to the Department of Justice. Following approval by the 
Department of Justice and before finalizing its guidance, each agency 
should obtain public comment on their proposed guidance documents. With 
regard to plans for federally conducted programs and activities, 
agencies should review their plans in light of the clarifications 
provided below.
Background of Executive Order 13166
    The legal basis for Executive Order 13166 is explained in policy 
guidance issued by the Department of Justice entitled ``Enforcement of 
Title VI of the Civil Rights Act of 1964--National Origin 
Discrimination Against Persons With Limited English Proficiency.'' 65 
F.R. 50123 (August 16, 2000). This ``DOJ LEP Guidance'' was referenced 
in and issued concurrently with the Executive Order.
    As the DOJ LEP Guidance details, Title VI of the Civil Rights Act 
of 1964 prohibits discrimination on the basis of race, color, or 
national origin in any program or activity receiving federal financial 
assistance. Department of Justice regulations enacted to effectuate 
this prohibition bar recipients of federal financial assistance from 
``utiliz[ing] criteria or methods of administration which have the 
effect of subjecting individuals to discrimination'' because of their 
race, color, or national origin. These regulations thus prohibit 
unjustified disparate impact on the basis of national origin.
    As applied, the regulations have been interpreted to require 
foreign language assistance in certain circumstances. For instance, 
where a San Francisco school district had a large number of non-English 
speaking students of Chinese origin, it was required to take reasonable 
steps to provide them with a meaningful opportunity to participate in 
federally funded educational programs. Lau v. Nichols, 414 U.S. 563 
(1974).\1\
---------------------------------------------------------------------------
    \1\ ``It seems obvious that the Chinese-speaking minority receive 
fewer benefits than the English-speaking majority from respondents' 
school system which denies them a meaningful opportunity to participate 
in the education program--all earmarks of the discrimination banned by 
the regulations.'' 414 U.S. at 568.
---------------------------------------------------------------------------
    The Supreme Court most recently addressed the scope of the Title VI 
disparate impact regulations in Alexander v. Sandoval, 121 S. Ct. 1511 
(2001). There, the Court held that there is no private right of action 
to enforce these regulations. It ruled that, even if the Alabama 
Department of Public Safety's policy of administering driver's license 
examinations only in English violates the Title VI regulations, a 
private party could not bring a case to enjoin Alabama's policy. Some 
have interpreted Sandoval as impliedly striking down Title VI's 
disparate impact regulations and thus that part of Executive Order 
13166 that applies to federally assisted programs and activities.\2\
---------------------------------------------------------------------------
    \2\ See Sandoval, 121 S. Ct. at 1516 n.6 (``[W]e assume for 
purposes of this decision that Sec. 602 confers the authority to 
promulgate disparate-impact regulations; . . . We cannot help 
observing, however, how strange it is to say that disparate-impact 
regulations are `inspired by, at the service of, and inseparably 
intertwined with' Sec. 601 . . . when Sec. 601 permits the very 
behavior that the regulations forbid.'').
---------------------------------------------------------------------------
    The Department of Justice disagrees. Sandoval holds principally 
that there is no private right of action to enforce the Title VI 
disparate impact regulations. It did not address the validity of those 
regulations or Executive Order 13166. Because the legal basis for 
Executive Order 13166 is the Title VI disparate impact regulations and 
because Sandoval did not invalidate those regulations, it is the 
position of the Department of Justice that the Executive Order remains 
in force.
Requirements of Executive Order 13166
    Federally Assisted Programs and Activities.--The DOJ LEP Guidance 
explains that, with respect to federally assisted programs and 
activities, Executive Order 13166 ``does not create new obligations, 
but rather, clarifies existing Title VI responsibilities.'' Its purpose 
is to clarify for federal-funds recipients the steps those recipients 
can take to avoid administering programs in a way that results in 
discrimination on the basis of national origin in violation of the 
Title VI disparate impact regulations. To this end, the Order requires 
each Federal Agency providing federal financial assistance to explain 
to recipients of federal funds their obligations under the Title VI 
disparate impact regulations.
    In developing their own LEP guidance for recipients of federal 
funds, an agency should balance the factors set forth in the DOJ LEP 
Guidance. These factors include, but are not limited to (i) the number 
or proportion of LEP individuals, (ii) the frequency of contact with 
the program, (iii) the nature and importance of the program, and (iv) 
the resources available.
    As the DOJ LEP Guidance explains, ``a factor in determining the 
reasonableness of a recipient's efforts is the number or proportion of 
people who will be excluded from the benefits or services absent 
efforts to remove language barriers.'' Similarly, the frequency of 
contact must be considered. Where the frequency and number of contacts 
is so small as to preclude any significant national origin based 
disparate impact, agencies may conclude that the Title VI disparate 
impact regulations impose no substantial LEP obligations on recipients.
    The nature and importance of the program is another factor. Where 
the denial or delay of access may have life or death implications, LEP 
services are of much greater importance than where denial of access 
results in mere inconvenience.
    Resources available and costs must likewise be weighed. A small 
recipient with limited resources may not have to take the same steps as 
a larger recipient. See DOJ LEP Guidance at 50125. Costs, too, must be 
factored into this balancing test. ``Reasonable steps'' may cease to be 
reasonable where the costs imposed substantially exceed the benefits in 
light of the factors outlined in the DOJ LEP Guidance. The DOJ LEP 
Guidance explains that a small recipient may not have to take 
substantial steps ``where contact is infrequent, where the total costs 
of providing language services is relatively high and where the program 
is not crucial to an individual's day-to-day existence.'' By contrast, 
where number and frequency of contact is high, where the total costs 
for LEP services are reasonable, and where the lack of access may have 
life and death implications, the availability of prompt LEP services 
may be critical. In these latter cases, claims based on lack of 
resources will need to be well substantiated.
    Finally, consideration of resources available naturally implicates 
the ``mix'' of LEP services required. While on-the-premise translators 
may be needed in certain circumstances, written translation, access to 
centralized translation language lines or other means may be 
appropriate in the majority of cases. The correct balance should be 
based on what is both necessary to eliminate unjustified disparate 
impact prohibited by the Title VI regulations and reasonable in light 
of the factors outlined in the DOJ LEP Guidance.
    Federally Conducted Programs and Activities.--Executive Order 13166 
also applies to federally conducted programs and activities. With 
respect to these, the Order requires each Federal Agency to prepare a 
plan to improve access to federally conducted programs and activities 
by eligible LEP persons. These plans, too, must be consistent with the 
DOJ LEP Guidance. Federal agencies should apply the same standards to 
themselves as they apply to their recipients.
Procedural considerations
    Administrative Procedure Act.--Agency action taken pursuant to 
Executive Order 13166 and the DOJ LEP Guidance may be subject to the 
Administrative Procedure Act's (``APA'') rulemaking requirements. 5 
U.S.C. Sec. 553. Although interpretive rules, general statements of 
policy, and rules of agency organization and procedure are not subject 
to section 553, courts have ruled that any final agency action that 
carries the force and effect of law must comply with section 553's 
notice and comment requirements. See Paralyzed Veterans of America v. 
D.C. Arena, 117 F.3d 579, 588 (D.C. Cir. 1997). Agencies, therefore, 
should consider whether the action they have taken or that they propose 
to take to implement Executive Order 13166 and Title VI of the Civil 
Rights Act is subject to the APA's requirements. If it is, they must 
comply with these statutory obligations. Agencies must bear in mind, 
however, that Executive Order 13166 ``does not create new obligations, 
but rather, clarifies existing Title VI responsibilities.'' 
Accordingly, agency action taken pursuant to Executive Order 13166 must 
not impose new obligations on recipients of federal funds, but should 
instead help recipients to understand their existing obligations.
    Executive Order 12866.--Agency action taken pursuant to Executive 
Order 13166 and the DOJ LEP Guidance may also be subject to 
requirements set forth in Executive Order 12866 (Regulatory Review and 
Planning, Sept. 30, 1993). That Order directs agencies to submit to the 
Office of Management and Budget for review any ``significant regulatory 
actions'' the agency wishes to take. See Sec. 6(a). Agencies, 
therefore, should consider whether the action they have taken or that 
they propose to take to implement Executive Order 13166 and Title VI of 
the Civil Rights Act is subject to Executive Order 12866's 
requirements. If it is, they should ensure that the action or proposed 
action complies with Executive Order 12866's obligations. With regard 
to federally conducted programs and activities, agencies should review 
their plans for their federally conducted programs in light of the 
clarifications below and make any necessary modifications.
Further agency action
    Existing LEP Guidance and Plans for Federally Conducted Programs 
and Activities.--Agencies that have already published LEP guidance 
pursuant to Executive Order 13166 or Title VI of the Civil Rights Act 
should obtain public comment on the guidance documents they have 
issued. Agencies should then review their existing guidance documents 
in view of public comment and for consistency with the clarifications 
provided in this Memorandum. The Justice Department's Civil Rights 
Division, Coordination and Review Section ((202) 307-2222), is 
available to assist agencies in making this determination. Should this 
review lead an agency to conclude that it is appropriate to clarify or 
modify aspects of its LEP guidance documents, it should notify the 
Department of Justice of that conclusion within 60 days from the date 
of this Memorandum. Any agency effort to clarify or modify existing LEP 
guidance should be completed within 120 days from the date of this 
Memorandum. Agencies likewise should review plans for federally 
conducted programs and activities in light of the above clarification.
    New LEP Guidance and Plans for Federally Conducted Programs and 
Activities.--Agencies that have not yet published LEP guidance pursuant 
to Executive Order 13166 and Title VI of the Civil Rights Act should 
submit to the Department of Justice, within 60 days from the date of 
this Memorandum, agency-specific recipient guidance that is consistent 
with Executive Order 13166 and the DOJ LEP Guidance, including the 
clarifications set forth in this Memorandum. In preparing their 
guidance, agencies should ensure that the action they propose to take 
is consistent with the requirements of the Administrative Procedure Act 
and Executive Order 12866. The Justice Department's Civil Rights 
Division, Coordination and Review Section, is available to assist 
agencies in preparing agency-specific guidance. Following approval by 
the Department of Justice and before finalizing its guidance, each 
agency should obtain public comment on its proposed guidance documents. 
Final agency-specific LEP guidance should be published within 120 days 
from the date of this memorandum. Agencies likewise should submit to 
the Department of Justice plans for federally conducted programs and 
activities. The Department of Justice is the central repository for 
these agency plans.
    Federally assisted programs and activities may not be administered 
in a way that violates the Title VI regulations. Each Federal Agency is 
responsible for ensuring that its agency-specific guidance outlines 
recipients' obligations under the Title VI regulations and the steps 
recipients can take to avoid violating these obligations. While 
Executive Order 13166 requires only that Federal Agencies take steps to 
eliminate recipient discrimination based on national origin prohibited 
by Title VI, each Federal Agency is encouraged to explore whether, as a 
matter of policy, additional affirmative outreach to LEP individuals is 
appropriate. Federal Agencies likewise must eliminate national origin 
discrimination in their own federally conducted programs and 
activities. The Department of Justice is available to help agencies in 
reviewing and preparing agency-specific LEP guidance and federally 
conducted plans.
                                 ______
                                 
                Questions Submitted by Senator Herb Kohl
       doj's and ftc's plan to divide antitrust responsibilities
    Question. The Justice Department and Federal Trade Commission (FTC) 
recently proposed a new plan for dividing their responsibilities over 
antitrust matters. Under this plan, certain subjects currently split 
between the agencies would be assigned only to one--for example, all 
communications and media matters would be reviewed by the Justice 
Department while all health care matters will be reviewed by the FTC. 
In addition, the timetable for resolving contests between the agencies 
over who is to review a matter will be expedited.
    Why have you proposed this new plan for dividing antitrust 
responsibilities between the Justice Department and the FTC? How will 
this improve on the current system? Please list the statutory 
differences in antitrust enforcement authority that exist between the 
Department of Justice (DOJ) and FTC and tell me why these will or will 
not make a difference.
    Answer. The Clearance Agreement addresses a longstanding problem 
with the process for assigning cases to the agencies that in some 
significant cases had impeded and delayed antitrust investigation and 
enforcement. The clearance system needed to be overhauled to arrest the 
trend toward more frequent and time-consuming clearance disputes that 
delay the initiation of investigations, and to allow the agencies to 
concentrate expertise and resources to investigate more effectively.
    DOJ's Antitrust Division (ATR) and the FTC each have jurisdiction 
to investigate many of the same types of conduct. The principal ground 
for clearance has always been to clear the matter to the agency with 
the most recent expertise in the particular product or products to be 
investigated. Over time, this clearance methodology has begun to break 
down and disagreements have arisen.
    Clearance disputes can cause significant delays in antitrust 
enforcement, divert scarce agency resources, and strain working 
relationships between the agencies. Before either agency commences or 
proceeds with an investigation, it must request clearance from the 
other agency. In the Hart-Scott-Rodino merger review process, the 
initial investigative period is limited by statute to 30 days. Each day 
that a clearance matter is unresolved is a day lost to investigation 
and enforcement. Timely clearance decisions also are important for non-
merger matters; speed is crucial to ensuring that if there is an 
antitrust violation, it is stopped promptly so consumer harm ceases.
    An analysis of clearance delays released by the FTC on February 28, 
2002, indicates that, since the beginning of fiscal year 2000, the 136 
matters in which the agencies formally contested clearance took an 
average of three and a half weeks to resolve. In another 164 matters 
during this period, clearance took more than one week to resolve, 
although no formal clearance dispute occurred. On average, these 300 
matters--24 percent of all matters for which clearance requests were 
filed during this period--imposed delays of 3 weeks. In some instances, 
clearance disputes have delayed investigations for several months. 
Whether in merger or non-merger cases, this is wasted time that could 
have been used on investigation and enforcement.
    The Clearance Agreement addresses the problems caused by delay by 
setting forth new and improved procedures to assure that case 
assignments will be made promptly so that substantive investigations 
can begin sooner. The Agreement clearly allocates to one agency or the 
other primary responsibility for certain commodities, based on the 
predominant expertise of each agency. The FTC and ATR each has 
substantial industry-specific enforcement capabilities with respect to 
certain commodities, and thus has had primary responsibility for any 
matters arising within these industry sectors. The Agreement is an 
effort to formally acknowledge those areas in which the FTC and DOJ 
already have such expertise.
    The Agreement also assigns dedicated permanent staff to carry out 
the clearance function, adopts standardized procedures and terms, and 
includes a public commitment to shorten the time period for clearing 
matters to the agencies--assuring resolution of even the most difficult 
case within 10 days. Under the terms of the Agreement, more than 80 
percent of the 300 matters referenced above would have been resolved 
within 2 business days. Importantly, the Agreement does not place any 
limit on the length of an investigation or otherwise constrain agency 
enforcement once it begins. The Agreement also promotes accountability 
by placing clearer responsibility for one agency or the other to engage 
in ``community policing'' of their assigned industry areas. It provides 
clarity to the companies, public interest groups, and the bar, who are 
a key source of antitrust complaints and investigative leads for the 
agencies.
    The Clearance Agreement does not purport to limit the jurisdiction 
of either agency. ATR and FTC have largely co-extensive authority to 
enforce the antitrust laws. The FTC has authority to enforce the 
following antitrust laws: the Clayton Act, 15 U.S.C. Sec. Sec. 12-27, 
44 (1994); 29 U.S.C. Sec. Sec. 52-53; and the FTC Act, 15 U.S.C. 
Sec. 45 (1994). In addition to its antitrust enforcement role, the FTC 
has the authority to enforce a variety of consumer protection laws.
    ATR, in turn, has exclusive Federal Governmental authority to 
enforce the Sherman Act, 15 U.S.C. Sec. Sec. 1-2 (1994), and shares 
with the FTC the federal authority to enforce the Clayton Act. ATR also 
engages in competition advocacy before other federal agencies and has 
certain statutory obligations to provide advice to federal agencies on 
competition agencies. Both agencies also review transactions that are 
subject to notification under the Hart-Scott-Rodino Act, 15 U.S.C. 
Sec. 18a, et seq.
    The FTC and ATR enforce the antitrust laws in a largely consistent 
manner. Although the FTC may not directly enforce the Sherman Act, 15 
U.S.C. Sec. Sec. 1-2 (1994), it may proceed under Section 5 of the FTC 
Act against non-criminal conduct that violates the Sherman Act. 
Moreover, occasional attempts to expand the scope of Section 5 beyond 
actions that would otherwise violate the Sherman or Clayton Acts have 
not met with success, and there is broad consensus that the FTC and the 
Sherman and Clayton Acts are functionally coterminous with respect to 
civil antitrust enforcement. There is, however, at least one 
substantive difference in the enforcement capabilities of the 
agencies--in enforcing the Sherman Act, ATR can proceed against 
antitrust violations by criminal indictment.
    The Agreement does nothing to alter ATR's criminal enforcement 
responsibilities. Nothing in the Agreement changes the fact that ATR 
handles all criminal matters for all commodities. Likewise, the FTC 
will continue to handle all consumer protection matters for all 
commodities. In sum, given the high degree of similarity in the 
substantive standards applied by the agencies, and the fact that both 
are constrained by the jurisprudence of a single federal judiciary, the 
allocation of industry sectors is unlikely to have substantive effects 
on the outcome of enforcement actions.
         title v--juvenile justice local delinquency prevention
    Question. When we created the Title V program 10 years ago, we 
intended it to be a crime prevention program that gives localities 
significant flexibility to design ways to prevent juvenile crime. 
Studies show that every dollar spent on prevention funding yields 
direct savings of $1.40 to the law enforcement and juvenile justice 
system. Unfortunately, over the years, the amount of Title V funding 
that has been earmarked for purposes other than local crime prevention 
has grown to almost two-thirds of the appropriated amount.
    To ensure that Title V continues to be used for prevention 
programs, we can either eliminate the earmarks that do not focus on 
local prevention programs or expand the pot of money available to crime 
prevention. Please tell me how you think we should address the problem 
specifically with regard to Title V.
    Answer. Title V funds requested in fiscal year 2003 will be used 
primarily for prevention purposes. The 2003 President's budget requests 
$94.791 million for Title V funding, which represents a slight increase 
of $454,000 over the 2002 enacted level. These funds will be used to 
support three programs: the School Safety Initiative ($14.967 million), 
the Tribal Youth Program ($12.472 million), and the Title V Delinquency 
Prevention Program Incentive Grants ($62.319 million). These programs 
provide a variety of prevention services to youth and their families, 
including youth development, family strengthening, tutoring, mentoring, 
health and mental health, alcohol and substance abuse prevention.
                          state court funding
    Question. In the past, the Office of Justice Programs (OJP) has 
funded initiatives aimed at improving state court systems. One such 
recent project provided training for judges, court personnel, 
prosecutors, police agencies and attorneys. The state of Wisconsin 
court system would benefit immensely from a similar program that would 
train court interpreters. In light of the increasingly diverse 
population in Wisconsin, courts are experiencing a serious shortage for 
qualified interpreters to act as translators during court proceedings.
    What are DOJ's plans to specifically address problems like this and 
to improve the quality of justice provided in our state courts?
    Answer. Funding available under a number of OJP-administered 
programs may be used to address the need for interpreters and to 
otherwise improve the effectiveness of the state courts.
  --Several grant programs awarded by the Violence Against Women Office 
        (VAWO) allow funds to be used to hire sign language and foreign 
        language interpreters to assist the deaf and non-English 
        speaking victims of domestic violence in court proceedings. 
        These programs include the Violence on College Campuses 
        Program, Legal Assistance Program and the Rural Domestic 
        Violence Program. For example, a community project funded by a 
        grant to the Morrow County District Attorney's Office in 
        Oregon, under the Rural Domestic Violence program will include 
        the hiring of certified court interpreters to assist Spanish-
        speaking victims through final case disposition. Also, services 
        provided under a Violence on College Campuses program grant to 
        Wake Forest University in North Carolina to assist sexual 
        assault and stalking victims will include sign language and 
        foreign language interpreters.
  --The Drug Courts Program Office (DCPO) provides grants to support 
        drug courts that are operational in the state courts. Drug 
        court protocols aim to improve the quality of justice dispensed 
        to drug abusing offenders by being respectful of culture and 
        language in the court and treatment delivery, while holding the 
        offender accountable. The DCPO has developed training in 
        cultural competence for operation and planning of drug courts, 
        which they will begin delivering this year.
  --The Judicial Child Abuse Training program, administered by the 
        Office of Juvenile Justice and Delinquency Prevention (OJJDP), 
        supports model technical assistance and training programs to 
        improve the court system's handling of child abuse and neglect 
        cases. OJJDP is funding 23 model courts in 20 states and the 
        District of Columbia, where judges are taking leadership roles 
        in permanency planning, by finding eligible adoptive families. 
        Each model court is making unique, court-specific changes to 
        reduce the length of time children spend in foster care and to 
        improve the timeliness and quality of judicial decision making. 
        The overall goals of the project are to disseminate 
        information, offer court improvement training programs and 
        provide technical assistance widely at the national and state 
        levels on permanency planning and on model court achievements 
        for purposes of increasing the number of dependency courts that 
        improve administrative practice in child abuse and neglect 
        cases. Culture-specific training for court personnel may be 
        funded under this program.
  --Resources available under the proposed $800 million Justice 
        Assistance Grant Program, which will fund activities currently 
        eligible under the Byrne Formula and the Local Law Enforcement 
        Block Grant programs which it replaces, and under the $215 
        million Juvenile Justice Accountability Incentive Block Grant 
        program, which provides funds to states to promote greater 
        accountability in the juvenile justice system, may also be used 
        for activities to improve the quality of state court services.
  --The 2003 budget includes $63 million (a combination of $60 million 
        from the Criminal Records Upgrade Program and $3 million from 
        the National Stalker and Domestic Violence Reduction Program) 
        to improve state criminal recordkeeping.
                       office of victims of crime
    Question. As you know, the Victims of Crime Act requires that the 
Department of Justice identify the victims of a federal crime and 
collect information on how to contact the victims or surviving family 
members. To be sure, a catastrophic terrorist incident stretches the 
Department's capabilities to satisfy this mandate. However, I was 
pleased that the Office of Victims of Crime (OVC) activated a toll-free 
number and call center by 4:00 p.m. on September 11 that provided 
victim information, crisis counseling, and referral assistance to those 
in need. And as I understand it, the information collected by this call 
center is being used to compile a comprehensive database that will 
assist DOJ in meeting its statutory obligations.
    But beyond satisfying legal requirements, it is very important that 
we support the victims of these terrorist acts--and I suspect this will 
be ongoing task for quite some time to come. That is why I am concerned 
with reports that OVC has significantly curtailed the operations of the 
call center--a service that received more than 80,000 calls in just the 
first 2 weeks alone following September 11. Such crisis counseling is 
often the first sort of victim assistance someone seeks, and we must 
ensure that it remains available at a level that will continue our 
support of terrorist victims and their families.
    Can you explain to me OVC's rationale for its decision to cut back 
the level of service offered by the call center? If not, I trust you 
will review the decision made by OVC and offer us an explanation.
    Answer. The OVC has decided to modify the level of call center 
services because states are currently providing services that are 
reducing the need for the call center. However, the call center is 
still providing information and referrals when necessary.
    The call volume was extremely high during the first 2 weeks 
following the September 11 terrorist attacks, and OVC continued to 
support the victims and their families from September 11 until November 
5, 2001. At that time, in consultations with Family Enterprise, Inc. 
(FEI) Behavioral Health (contractor operating the call center), OVC 
made the decision to cut back on the number of counselors and hours of 
operation based on call volume. The call volume ranged from an average 
daily high of 4,166 calls the week of September 11; to 630 calls from 
September 16 to 22; to 345 calls from September 23 to 29; to 212 calls 
from September 29 to October 6; to an average of 61 calls per day in 
November; to 35 calls per day in December; and to 25 calls per day in 
January 2002.
    Staffing at the call center has been cut back due to the decrease 
in the number of calls, however, the services have not changed. The 
call center staffing levels averaged 226 during the first week; 62 in 
the second week; 48 in the third week; and 45 in the fourth week. As 
the call volume began to lessen, adjustments in staffing were made. At 
the end of October, 2001, according to FEI, the call center was 
averaging 150 calls per day. They were using 8 counselors (4 per shift) 
to handle the calls, operating from 8:00 a.m. until midnight eastern 
time, Monday through Saturday. FEI indicated that there was little call 
volume after 9:00 p.m. and on weekends. Consequently, staff hours were 
modified accordingly. On weekends, FEI staff checked voice mail on an 
hourly basis and returned calls as necessary. The incoming calls were 
for financial assistance, housing, travel and referrals for crisis 
counseling.
    From September 11 to 16, the cost of staffing alone at the call 
center was approximately $559,100. From September 11 to 23, the costs 
of rent, computer leasing, etc., was $482,059. Thus, in less than 2 
weeks time, OVC expended more than $1,000,000 in support of victim 
families through the call center, operating in full activation/crisis 
mode. From September 23 to October 6, call center charges were $408,332 
and from October 7 to November 9, costs totaled $420,465. Again, the 
call center continued in full operational status to ensure that all 
victims and their family members received the maximum assistance that 
could be provided through the call center.
    The call center continues to provide telephone-based crisis support 
to victims and victim families and assessment/referral of multiple 
needs, including counseling; assessment and referral for housing/
financial resources; travel related requests; other information/
referral; and the Federal Bureau of Investigation (FBI) leads, which 
are passed to the FBI. The call center also often receives calls not 
related to September 11.
    OVC is reimbursing states to provide services, such as individual 
counseling, which provide a more personal and frequent contact for 
victims and their families. OVC awarded grants from the Antiterrorism 
Emergency Reserve in September, 2001 to New York, Pennsylvania, and 
Virginia. Pennsylvania used a portion of its funds to create a toll-
free number. Funds provided through the Department of Defense 
Appropriations Act for 2002 are supporting counseling programs in 
affected states. Pennsylvania is requesting use of these funds to 
continue its toll-free number. In addition:
  --Virginia created a toll-free number on September 11 using its own 
        funds.
  --New York created a special number for this disaster and continued 
        to use other numbers already being advertised through the 
        media.
  --New Jersey created a crisis line.
  --California used the toll-free number it already had in place for 
        the crime victim compensation program.
  --Massachusetts advertised its Massachusetts Citizens Line as its 
        toll-free number.
  --Connecticut has a toll-free number for crime victims, which was 
        used for this purpose.
  --Victims of Crime Act formula grants funds are not being used for 
        toll-free numbers. Most states used lines that were already in 
        place and funded with state dollars.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
                   law enforcement in indian country
    Question. Attorney General Ashcroft, last summer Senator Feingold 
and I initiated a dear colleague letter inviting you to visit Indian 
Country to focus on law enforcement challenges facing Native Americans. 
Thank you for your response agreeing to visit, or to send a designee. I 
realize you recently visited a tribe in New Mexico, but I hope you will 
still strongly consider visiting reservations in Washington State and 
Wisconsin.
    I must commend you for holding the U.S. Border Patrol-Native 
American Border Security Conference in January. I know of at least two 
Washington State tribes in attendance, the Lummis and the Nooksacks. I 
agree we need to foster better coordination between tribes and the 
Federal Government to protect our borders effectively. As we improve 
homeland security and fight terrorism, tribes can make crucial 
contributions to these effort. I am glad the Department of Justice 
recognizes this.
    But at the same time, I am concerned by some of the cuts to tribal 
law enforcement programs proposed in the fiscal year 2003 budget.
    Given the disproportionately high incidence of violent crime in 
Indian Country, why do you propose to cut the tribal law enforcement 
program in the Community Oriented Policing Services (COPS) program by 
$5 million, from $35 million last year to $30 million next year?
    Answer. Since September 11, 2001, the Department has reprioritized 
and shifted funding to address counter terrorism efforts. Because the 
Department understands the importance of continued funding for Indian 
Country initiatives, these programs were largely exempted from the 
proposed funding shifts. The $30 million request will fund an estimated 
114 grants that will enable many tribal law enforcement agencies to 
hire additional officers or acquire critical law enforcement equipment.
    Question. Why do you propose to cut funding for correctional 
facilities on Indian lands altogether, from $35.2 million last year to 
$0? The modest increase in the Bureau of Indian Affairs' (BIA) budget 
from correctional facilities, $3 million, hardly makes up for this 
large cut.
    Answer. The Indian Country Tribal Prison Construction Program was 
intended to alleviate the problems associated with the lack of 
institutional bed space and overcrowding resulting from large increases 
in the prison population. However, it is increasingly difficult to 
justify funding the program in light of the fact that more bed space 
has come on line while at the same time the rate of increase in the 
total number of prisoners has remained constant. According to Jails in 
Indian Country, 2000, a report by the Bureau of Justice Statistics, the 
69 Indian Country facilities are presently operating at an average 86 
percent capacity. While some individual facilities still have problems, 
the same report indicates that 17 facilities operating in Indian 
Country are expecting to increase capacity by 1,108 beds by July 2003. 
Given that Indian country facilities held 1,775 inmates at midyear 
2000, up from 1,621 at midyear 1999, there does not appear to be a 
short-term need for more beds at these facilities. In view of changing 
priorities and the emphasis on supporting counterterrorism activities, 
OJP is not requesting funds for this program in 2003.
    Question. And how do you justify flat-lining many of the other law 
enforcement programs crucial to reducing crimes against Native 
Americans, such as the Tribal Courts Grant Program ($8 million), Tribal 
Youth Initiatives ($12 million) and the Indian Alcohol and Substance 
Abuse Diversion Program ($5 million)?
    Answer. The war on terrorism has compelled the Department of 
Justice to re-examine priorities, and funding increases proposed are 
largely targeted to counterterrorism activities. As a result, many 
state and local assistance programs were either reduced or maintained 
at the fiscal year 2002 level. Because the Department understands the 
importance of continued funding for Indian Country initiatives, most of 
these programs were maintained at the fiscal year 2002 level.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                radiation exposure compensation program
    Question. The Department of Justice estimates that $111.2 million 
in Radiation Exposure Compensation Act (RECA) claims were paid in 2001 
with regular appropriations ($10.8 million) and the ``such sums as may 
be necessary'' language in the fiscal year 2001 Supplemental 
Appropriations Act. An estimated 3,828 claims were filed; 1,571 were 
approved; 57 were denied; and 727 were pending at the beginning of 
fiscal year 2001.
    Attorney General Ashcroft, I want to congratulate the Department of 
Justice for its hard work to ensure that claimants under RECA are 
receiving claims payments instead of IOUs as was the case a year ago. I 
commend the Department for aggressively implementing language I 
sponsored in the fiscal year 2001 Supplemental Appropriations Bill that 
provided ``such sums as may be necessary'' to pay RECA claims approved 
by September 30, 2001, to compensate those who sustained injury as a 
result of the United States open-air nuclear testing and uranium mining 
activities in the 1950's through 1970's.
    Will you please tell the Subcommittee how many claims were 
approved, and how many IOUs were paid, under the language included in 
the Supplemental Appropriations bill for 2001?
    Answer. The fiscal year 2001 Supplemental Appropriations Bill 
provided a total of $100,650,000 to pay meritorious claims. Of that 
amount, $30,525,000 was approved to pay 436 pending IOUs and 
$70,125,000 was approved to pay 1,177 claims adjudicated between July 
24, 2001 and September 30, 2001.
    Question. Would you please provide for the record a breakdown of 
the number of claims paid by state and by category of beneficiary?
    Answer. The following table lists the number of claims funded by 
the 2001 Supplemental, by state and by type of claim.

----------------------------------------------------------------------------------------------------------------
                                             Onsite     Uranium   Uranium      Ore        Total
                              Downwinder  Participant    Miner    Miller   Transporter   Claims    Total Awards
----------------------------------------------------------------------------------------------------------------
Alabama.....................          1   ...........         2  ........  ...........         3        $250,000
Alaska......................          2   ...........         1  ........  ...........         3        $200,000
Arizona.....................        439            4         19         1  ...........       463     $24,250,000
Arkansas....................          3   ...........         2  ........  ...........         5        $350,000
California..................         27            6          7         1  ...........        41      $2,600,000
Colorado....................         15   ...........       115        13           2        145     $13,750,000
Florida.....................          2            4          2  ........  ...........         8        $600,000
Hawaii......................          1            2   ........  ........  ...........         3        $200,000
Idaho.......................         12            1          4  ........  ...........        17      $1,075,000
Illinois....................          1            1          2  ........  ...........         4        $325,000
Indiana.....................  ..........  ...........         2  ........  ...........         2        $200,000
Kansas......................          3            2          2  ........  ...........         7        $500,000
Louisiana...................  ..........           2   ........  ........  ...........         2        $150,000
Maryland....................          2            2   ........  ........  ...........         4        $250,000
Michigan....................  ..........           2   ........  ........  ...........         2        $150,000
Minnesota                             1            2   ........         1  ...........         4        $300,000
Mississippi.................  ..........  ...........         1  ........  ...........         1        $100,000
Missouri....................          2            1          1         1  ...........         5        $375,000
Montana.....................          2   ...........  ........  ........  ...........         2        $100,000
Nebraska....................          1            1          1  ........  ...........         3        $225,000
Nevada......................        101           26          9         1  ...........       137      $8,000,000
New Hampshire...............  ..........  ...........         1  ........  ...........         1        $100,000
New Mexico..................          5            1         78        14           1         99      $9,625,000
New York....................  ..........           4   ........  ........  ...........         4        $300,000
North Carolina..............  ..........           1          2  ........  ...........         3        $275,000
Ohio........................          1            1          1         2  ...........         5        $425,000
Oklahoma....................          3   ...........         5  ........  ...........         8        $650,000
Oregon......................          9            2          2  ........  ...........        13        $800,000
Pennsylvania................          1            2   ........  ........  ...........         3        $200,000
South Carolina..............  ..........           1   ........  ........  ...........         1         $75,000
South Dakota................  ..........           1   ........  ........  ...........         1         $75,000
Tennessee...................          1   ...........         1  ........  ...........         2        $150,000
Texas.......................         10            1          2  ........  ...........        13        $775,000
Utah........................        522            7         39         8           1        577     $31,425,000
Virginia....................          1   ...........  ........  ........  ...........         1         $50,000
Washington..................          2            2          4  ........  ...........         8        $650,000
West Virginia...............  ..........  ...........         4  ........  ...........         4        $400,000
Wisconsin                     ..........  ...........         1  ........  ...........         1        $100,000
Wyoming.....................          3            1          2         1  ...........         7        $525,000
                             -----------------------------------------------------------------------------------
      Subtotal..............      1,173           80        312        43           4      1,612    $100,550,000
Canada......................  ..........  ...........  ........         1  ...........         1        $100,000
                             -----------------------------------------------------------------------------------
      TOTAL.................      1,173           80        312        44           4      1,613    $100,650,000
----------------------------------------------------------------------------------------------------------------

    Question. Have all pending IOUs been paid?
    Answer. There are currently five claims pending where individuals 
received IOU letters from the Radiation Program. Two of these claims 
are pending because the claimants are pursuing an award under the 
Energy Employees Occupational Illness Compensation Program (EEOICPA). 
As you know, acceptance of compensation under that program precludes 
recovery for onsite participants and downwinders under the Radiation 
Exposure Compensation Act (RECA). A third claim remains pending while 
the claimant considers the loss of benefits from the Department of 
Veterans Affairs should the RECA award be accepted. Finally, the last 
two claims are pending because the Radiation Program is awaiting 
receipt of acceptance forms from attorneys representing the claimants. 
With the exception of those five claims, all IOUs have been paid.
    Question. I also congratulate the President and the Department for 
proposing in the 2002 budget to make payments for claims under RECA an 
entitlement. Congress did enact as part of the Defense Authorization 
bill, my amendment to make the RECA program a mandatory program. The 
Department has $172 million to pay claims in 2002 and $143 million to 
pay claims in 2003, and additional amounts in future years.
    Will you please give the Subcommittee a status report on the 
payment of RECA claims. How many claims has the Department approved and 
how much has been spent out of the Trust Fund to pay these claims since 
the inception of RECA?
    Answer. Through March 15, 2002, a total of 5,981 claims have been 
approved, with a value of $413,597,489.
    Question. What is the average amount of the claims approved, the 
number of claims denied, and the general reason for denial of these 
claims?
    Answer. RECA award amounts are fixed by statute. Uranium workers 
(uranium miners, mill workers, ore transporters) are eligible for a 
$100,000 award; onsite participants are eligible for a $75,000 award; 
and downwinders are eligible for a $50,000 award. Due to the 
predominance of downwinder approvals, the overall average of awards is 
$69,512 over the life of the Program.
    Through March 15, 2002, the RECA Program has denied 3,906 claims. 
Claims are denied if one or more of the eligibility criteria are not 
satisfied. For example, uranium worker claims are typically denied in 
cases where the documentation does not establish that the individual 
contracted an illness specified under the law. Similarly, downwinder 
and onsite participant claims are most frequently denied where the 
records fail to establish a covered disease or the individual was 
either not present in the affected ``downwind'' area or did not 
participate in atmospheric weapons testing.
    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 received, approved, denied and pending 
through March 15, 2002.

                       RADIATION EXPOSURE COMPENSATION PROGRAM--APRIL 1992-MARCH 15, 2002
----------------------------------------------------------------------------------------------------------------
                                     Value of         Claims
                                      Awards         Received        Approved         Denied          Pending
----------------------------------------------------------------------------------------------------------------
Downwinder......................    $174,120,000           6,768           3,483           1,432           1,853
Onsite Participant..............     $23,685,989           1,469             334             838             297
Uranium Miner...................    $207,591,500           4,335           2,082           1,631             622
Uranium Miller..................      $7,100,000             229              71               4             154
Ore Transporter.................      $1,100,000              61              11               1              49
                                 -------------------------------------------------------------------------------
      TOTAL.....................    $413,597,489          12,862           5,981           3,906           2,975
----------------------------------------------------------------------------------------------------------------

    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 572 claims, with a 
total value of $55,977,799 through March 15, 2002. The following table 
lists, by category, the value of awards and the number of claims 
received, approved, denied, and pending.

                 RADIATION EXPOSURE COMPENSATION PROGRAM: NEW MEXICO--APRIL 1992-MARCH 15, 2002
----------------------------------------------------------------------------------------------------------------
                                     Value of         Claims
                                      Awards         Received        Approved         Denied          Pending
----------------------------------------------------------------------------------------------------------------
Downwinder......................        $800,000              64              16              18              30
Onsite Participant..............        $843,299              49              12              26              11
Uranium Miner...................     $52,234,500           1,395             523             660             212
Uranium Miller..................      $1,900,000              62              19               1              42
Ore Transporter.................        $200,000              10               2               0               8
                                 -------------------------------------------------------------------------------
      TOTAL.....................     $55,977,799           1,580             572             705             303
----------------------------------------------------------------------------------------------------------------

    Question. How many claims are projected to be filed and processed 
under current law in the upcoming year?
    Answer. For fiscal year 2003, we presently estimate that 2,225 
claims will be filed and 2,620 claims will be processed. It is 
impossible to precisely estimate the amount of receipts for this year 
because the data is skewed as a result of the mail suspension. The 
following chart displays the number of claims filed, by month, for 
fiscal year 2001 and the first several months of fiscal year 2002.

        RECA CLAIMS RECEIVED BY MONTH--FISCAL YEARS 2001 AND 2002
------------------------------------------------------------------------
                                                          Fiscal year--
                                                       -----------------
                                                          2001     2002
------------------------------------------------------------------------
October...............................................      188      249
November..............................................      504   \1\ 21
December..............................................      214   \1\ 25
January...............................................      200  \1\ 175
February..............................................      233      598
March.................................................      371  \2\ 156
April.................................................      315  .......
May...................................................      438  .......
June..................................................      349  .......
July..................................................      358  .......
August................................................      345  .......
September.............................................      307  .......
                                                       -----------------
      Total...........................................    3,822    1,224
------------------------------------------------------------------------
\1\ Reflects mail suspension during October 2001-January 2002.
\2\ As of March 18.

    Question. Does the Administration have any long-range estimates as 
to the number of claims that might still be filed under the Radiation 
Exposure Compensation Act under current law and regulations?
    Answer. In May 2000, the Congressional Budget Office (CBO) roughly 
estimated that about 15,600 claims might be filed under Public Law 106-
245, the Radiation Exposure Compensation Act Amendments of 2000. Since 
enactment in July 2000, nearly 5,500 claims have been filed. Using 
CBO's estimate, it is possible that an additional 10,100 claims might 
be filed over the lifetime of the current law. However, these long-
range estimates only approximately quantify the future of the Radiation 
Exposure Compensation Program. As the Department continues to educate 
the affected communities of the availability of compensation under the 
amended Act, it is possible that a larger percentage of the eligible 
claimant population could apply for compensation, thereby exceeding the 
current estimate.
                        first responder training
    Question. Attorney General Ashcroft, I support President Bush and 
the Administration 100 percent in their efforts regarding the war on 
terrorism. There is nothing more important and no higher priority for 
this country at this time in history.
    This is the first budget that incorporates homeland security into 
ongoing federal programs. As a part of that effort, the Administration 
proposes to shift the responsibility for first responder training from 
the Department of Justice to the Federal Emergency Management Agency 
(FEMA), and to significantly increase funding for these activities. I 
have some concerns about this proposal that I would like to raise with 
you today.
    Will the entire activity of first responder training be transferred 
to FEMA, or will the Department of Justice retain some aspects of this 
critically important function?
    Answer. The President's fiscal year 2003 budget proposes to 
transfer all of the training programs administered by the Office for 
Domestic Preparedness to FEMA. These include the integrated Nunn-Lugar 
training program, the Center for Domestic Preparedness at Fort 
McLellan, the Domestic Preparedness Consortium, TOPOFF, and similar 
situational training exercises. It will not affect terrorism training 
for local law enforcement provided by the FBI.
    Question. What programs and activities and associated funding and 
staff are proposed to be transferred from the Department of Justice to 
FEMA?
    Answer. The fiscal year 2003 President's budget proposes to 
transfer all the Office for Domestic Preparedness (ODP) programs, 
activities, and associated funding and staff related to planning, 
equipment, training, technical assistance, and exercises. This proposed 
transfer includes 59 current positions. The National Institute of 
Justice's (NIJ) counterterrorism research and development program will 
remain part of the Office of Justice Programs, to be funded directly by 
the NIJ instead of through ODP.
    Question. Will the shift of first responder training 
responsibilities require legislative authorization by the Congress? If 
not, what are the appropriate legal authorities the Administration 
cites as the basis for proposing and proceeding with this 
reorganization of national domestic preparedness and first responder 
training?
    Answer. FEMA is authorized currently to assume the Office of 
Domestic Preparedness' (ODP) preparedness activities. To help states 
and localities prepare for disasters, natural or man made, FEMA may 
carry out exercises, provide grants, and offer training and technical 
assistance. FEMA derives its authority from its primary disaster relief 
and assistance statute, the Stafford Act, as well as the Federal Fire 
Prevention and Control Act.
    However, to eliminate any ambiguity the Administration included 
language in the 2003 budget amendments and errata (submitted March 14) 
to clarify that FEMA will honor ODP's obligations to its contractors, 
local partners, grantees, and staff:

    ``Provided further, That, the functions authorized under section 
819 of the Antiterrorism and Effective Death Penalty Act of 1996 and 
section 1014 of Public Law 107-56, as well as such unexpended balances 
of appropriations, full-time equivalent personnel, property, and 
records as have been assigned to the Department of Justice, shall be 
transferred to the Federal Emergency Management Agency: Provided 
further, That such transfers are made pursuant to 31 U.S.C. 1531''

    Question. In light of the supposition that the Department of 
Justice has been responsible for the great majority of first responder 
training for so long, in your opinion Mr. Attorney General, do you 
think that too much of the first responder training authority has been 
relinquished by DOJ? To put it another way, how wise would you 
characterize the decision to transfer what could be considered the most 
vital aspect of Homeland Security away from the agency with the most 
experience in handling that vital function?
    Answer. In fiscal year 2003, the Administration is requesting that 
funding for ODP's counterterrorism programs be transferred to FEMA. In 
May 2001, the President stated his belief that the numerous federal 
programs offering training and assistance to state and local 
governments be ``seamlessly integrated, harmonious and comprehensive to 
maximize their effectiveness.'' This transfer supports the 
Administration's coordination and streamlining of all terrorism-related 
activities to provide greater program cohesion and efficiency. The 
Administration also believes that FEMA, through its newly created 
Office of National Preparedness (ONP), is the appropriate federal 
agency to be the single point of contact to facilitate and oversee the 
President's fiscal year 2003 $3.5 billion First Responder Initiative 
and to implement national efforts to build and expand on first 
responder training capabilities. The transfer of ODP's first responder 
training programs to FEMA will achieve greater integration, 
coordination, and effectiveness in the administration of the Federal 
Government's counterterrorism training programs.
    Question. My understanding is that the President proposed the 
transfer of first responder training from the Department of Justice to 
FEMA last May. At that time, the program totaled about $30 million for 
the National Domestic Preparedness Consortium (NDPC) and additional 
amounts for equipment and related expenses. Following the September 
11th terrorist attacks, the NDPC grew to a total of $95.7 million plus 
another $16 million for training grants and support. In total, the 
Administration plans to transfer $234.5 million in first responder 
training programs form the Department of Justice, and turn these 
programs into a $3.5 billion first responder training program in FEMA 
in fiscal year 2003.
    I will ask this same question of FEMA--would the Department of 
Justice have the capability of implementing a dramatically expanded 
first responder training program in fiscal year 2003?
    Answer. The Department of Justice could use the National Domestic 
Preparedness Consortium and its other training partners to facilitate 
some expansion in training, but dramatic growth would be constrained by 
the capacity of existing facilities and staff to deliver effective 
training. It is our understanding that FEMA will continue to support 
the Consortium in 2003, while also providing states with formula grants 
for training and examining new methods of training delivery.
    Question. Assuming that a comprehensive first responder training 
program is developed, it is clear that responding to potential attacks 
using weapons of mass destruction--chemical and biological agents, and 
even nuclear devices--requires very specialized training. In your 
opinion, are there the necessary trainers available throughout the 
country to carry out a significant first responder training program, 
specifically one that is comprehensive and coordinated to provide a 
seamless response to a disastrous attack?
    Answer. There are enough qualified trainers to meet the current 
demand for first responder weapons of mass destruction training. While 
the requested increases in training at all levels of government may 
strain this capacity in the short term, there is sufficient untapped 
expertise to carry out a larger program in the near future.
                          mental health courts
    Question. Attorney General Ashcroft, as you are aware, the fiscal 
year 2002 Commerce, Justice, State, and Judiciary Appropriations Bill 
contained $4 million for Mental Health Courts. The funding is the 
result of the America's Law Enforcement and Mental Health Project Act, 
enacted into law two years ago. The Act authorized the creation of 
Mental Health Courts with separate dockets to handle cases involving 
individuals with a mental illness.
    The specific thrust of Mental Health Courts is simply to provide an 
individual with a mental illness and charged with a misdemeanor or 
nonviolent offense the option of out-patient or in-patient mental 
health treatment as an alternative to incarceration.
    Finally, the Department of Justice estimates that sixteen percent 
of all inmates in local and state jails suffer from a mental illness 
and the American Jail Association estimates that as many as 700,000 
persons suffering from a mental illness are jailed each year.
    Do you believe Mental Health Courts can alleviate prison 
overcrowding and create greater judicial economy within our court 
systems?
    Answer. Realistically, we do not expect that mental health courts 
will alleviate prison overcrowding. However, understanding the enormous 
cost that these individuals bring to law enforcement, judicial, and 
correctional agencies when these offenders are not treated, many sites 
are looking to the local courts to try this new initiative. Many 
mentally ill/mentally impaired individuals commit crimes that require 
some type of incarceration. Further, they often are not deterred or 
coerced from further criminal activity by a series of less-punitive 
sanctions or alternatives; many simply will not comply with a court-
ordered treatment plan and may have to be returned to traditional 
processing that ends in some incarceration sentence. However, by more 
appropriate triage and response to these individuals early in their 
processing, mental health courts and the partnerships developed under 
this setting will provide this population with the best possible 
combination of accountability and treatment. In addition, these 
individuals may learn how not to become involved in criminal behaviors 
that will bring them back into the system later.
    By routing these individuals away from the traditional criminal 
court and into mental health courts, state and local governments will 
be meeting the objectives of the Law Enforcement and Mental Health 
Project Act (Public Law 106-515) and will be addressing the special 
needs of the mentally ill/mentally impaired, who have long been an 
overlooked population in the criminal justice system. The extent to 
which this is achievable on a national basis must also depend on how 
mentally ill defendants are treated in state law and state judicial 
systems.
    Jurisdictions with mental health courts should be able to make a 
smaller investment of scarce resources in the court and treatment 
process, rather than a larger investment in jail and prison systems, 
and may thus see some overall financial savings.
    Question. What steps are being taken by DOJ to distribute the $4 
million appropriated to implement America's Law Enforcement and Mental 
Health Project Act?
    Answer. The Bureau of Justice Assistance (BJA) will be guided in 
its implementation of this program by the objectives set forth in the 
Act. To date, BJA has had several meetings with the Substance Abuse and 
Mental Health Administration (SAMHSA) and the Department of Health and 
Human Services to discuss coordination of the implementation of this $4 
million appropriation. These discussions have explored potential 
collaboration on a mental health jail diversion initiative, although no 
final agreement has been reached. BJA has also had conversations with a 
number of advocacy and special interest groups representing courts, 
court administrators, consumer advocates, prosecutors, defenders, law 
schools, and other institutions, such as the Bazelon Center and the 
Council for State Governments.
    BJA convened a 3-day meeting beginning March 18, 2002 to receive 
input from the field. A final competitive solicitation for operational 
mental health court grants, which will be developed within the 
parameters of the Act, will be issued. This forum will also assist BJA 
in crafting a technical assistance strategy.
    Question. What plans does DOJ have to provide assistance to court 
systems seeking to develop and implement a Mental Health Court and does 
DOJ plan to offer continued technical assistance after the 
implementation of a Mental Health Court?
    Answer. BJA recognizes the need for technical assistance not only 
among mental health court grantees, but also among those sites that 
will implement a court without the support of direct federal funding. 
BJA anticipates a substantial investment of funds available under this 
appropriation for technical assistance and information dissemination to 
assist localities in their efforts to plan, implement, operate, and 
assess mental health court initiatives.
  black tar heroin and methamphetamine trafficking federal bureau of 
   investigation (fbi) and drug enforcement and administration (dea)
    Question. This Subcommittee has been very helpful over the past 3 
years in tackling an issue of great concern to me. That issue is the 
serious ``black tar'' heroin problem that has plagued several northern 
New Mexico counties.
    Both the FBI and DEA have cooperated with the state and local law 
enforcement officials in New Mexico to try to break the serious cycle 
of black tar heroin trafficking and use. Several major drug busts have 
been implemented in this area of New Mexico.
    Would you please give the Subcommittee the Department's assessment 
of the progress these joint law enforcement operations in breaking the 
black tar heroin rings in northern New Mexico?
    Answer. Traditionally, Northern New Mexico's primary illegal drug 
threat has been the transshipment and distribution of cocaine and black 
tar heroin. Since 1999, DEA and FBI, in cooperation with state and 
local law enforcement officials, have had three successful joint law 
enforcement operations targeting heroin trafficking organizations in 
northern New Mexico. The first two operations in 1999 and in 2000 
targeted Nayarit Mexican heroin traffickers who were distributing uncut 
black tar heroin with purity levels sometimes exceeding 70 percent. 
This high purity level led to a dramatic increase in heroin overdose 
deaths in Rio Arriba and Santa Fe counties. The 1999 investigation 
resulted in 32 federal arrests and 20 state arrests. The 2000 
investigation resulted in 13 federal arrests, mostly in New Mexico. 
Efforts in 2001 focused on finalizing the prior years' investigations 
and ensuring that the law enforcement operations had dismantled the 
Nayarit Mexican Trafficking Organizations heroin trafficking network in 
northern New Mexico. Law enforcement efforts were evidenced by a slight 
decline in the number of overdose death rates in both Rio Arriba and 
Santa Fe counties in 2000.

------------------------------------------------------------------------
                                        1999 Drug          2000 Drug
 As Reported by the New Mexico OMI   Overdose Related   Overdose Related
                                          Deaths             Deaths
------------------------------------------------------------------------
Santa Fe County...................                 15                 13
Rio Arriba County.................                 46                 39
------------------------------------------------------------------------

    During June 2001, law enforcement officials in New Mexico jointly 
determined that another multi-agency law enforcement operation 
targeting heroin traffickers was necessary in northern New Mexico. DEA 
deployed the El Paso Field Division Mobile Enforcement Team (MET) to 
Rio Arriba and Santa Fe counties in October of 2001. In conjunction 
with the Albuquerque DEA Office, the New Mexico Department of Public 
Safety, and the Bureau of Justice Assistance (BJA)--High Intensity Drug 
Trafficking Area (HIDTA) Region III Narcotics Task Force, the MET has 
identified approximately 27 targets for federal prosecution and another 
28 targets for state prosecution. Both the United States Attorney's 
Office and the First Judicial District Attorney's Office have provided 
prosecutorial oversight since this investigation started. Intelligence 
gathered during this investigation has reinforced two major issues of 
concern for law enforcement entities working in northern New Mexico:
  --Unlike the Nayarit heroin traffickers, current heroin traffickers 
        in Rio Arriba and Santa Fe counties seldom traffic only heroin. 
        Most often, these dealers traffic both heroin and cocaine, and 
        occasionally methamphetamine.
  --The New Mexico Office of the Medical Investigator (OMI) has 
        consistently reported that very few overdose deaths in northern 
        New Mexico are strictly heroin overdose. In almost every 
        overdose death, the OMI reports a mixture of multiple narcotics 
        in the victim's toxicology. These substances include heroin, 
        alcohol, cocaine, methadone, prescription drugs, and other 
        unknown substances.
  --The use of narcotics is a significant issue in northern New Mexico. 
        Two facts that support this concern are also evidenced in the 
        New Mexico OMI reports:
    --Nearly 50 percent of overdose death victims are in the 30-39 age 
            range, another 25 percent are 50 years of age or older. 
            These age ranges indicate long-term drug users and addicts 
            as opposed to youthful experimenters; and
    --Over 80 percent of overdose death victims die in their own homes 
            or the home of family member, indicating a tolerance of 
            drug use among family and peers.
      While law enforcement efforts in northern New Mexico are 
        effective and successful, law enforcement alone is not the 
        answer to this problem. Consequently, following the conclusion 
        of the current law enforcement operation in northern New 
        Mexico, DEA will send the El Paso Field Division and the 
        Albuquerque District Office Demand Reduction Coordinators to 
        northern New Mexico to provide training and information to area 
        residents. Additionally, forfeiture proceedings against real 
        property seized during the 1999 law enforcement operation have 
        recently been completed. The United States Attorney's Office 
        and DEA have agreed that the most accessible and suitable of 
        the two properties seized will be returned to the northern New 
        Mexico community. Several groups have expressed an interest in 
        using the facility for a community outreach and drug education 
        center. Meanwhile, law enforcement efforts will continue, and 
        DEA will further explore investigative techniques that will be 
        effective in this area.
    Question. An equally serious problem is methamphetamine trafficking 
and usage. I believe both the FBI and DEA have encountered this illegal 
activity in its law enforcement activities in New Mexico, including 
northern New Mexico.
    Would you please give the Subcommittee your assessment of the 
effect these joint law enforcement operations in northern New Mexico 
have had on the methamphetamine trafficking in the area?
    Answer. The methamphetamine trafficking problem throughout the 
state of New Mexico is two-fold:
  --New Mexico's remote and mountainous landscape often provides safe 
        haven to clandestine methamphetamine laboratory operators 
        throughout the state. During the late 1980's and early 1990's, 
        these clandestine laboratories decreased dramatically in 
        response to precursor control laws which seriously restricted 
        the availability of essential chemicals needed to manufacture 
        methamphetamine. However, methamphetamine manufacturers (also 
        known as ``cooks'') have continually updated and refined 
        manufacturing procedures to circumvent precursor control laws.
      The late 1990's saw the number of clandestine manufacturing 
        laboratory seizures skyrocket throughout the United States. 
        While New Mexico has not experienced this problem to the extent 
        that some Midwestern states have, these clandestine 
        laboratories have presented a new and costly challenge. During 
        the first quarter of fiscal year 2002, DEA offices in 
        Albuquerque and Las Cruces, New Mexico have seized 23 
        clandestine methamphetamine laboratories throughout the state. 
        These 23 labs represent only the clandestine laboratories to 
        which DEA agents have responded and do not include numerous 
        ``chemical clean-ups'' in which state and local law enforcement 
        authorities have seized necessary precursor chemicals even when 
        the laboratory was not operational. The majority of these 
        laboratories are small individual operations, producing 
        personal use amounts up to an ounce or two of methamphetamine 
        at a time. A total of 85 clandestine laboratories have been 
        seized in New Mexico since October 1, 2001. However, only 6 of 
        the laboratories were capable of producing multi-ounce 
        quantities of methamphetamine.
      Despite the size of these operations, responding to these 
        laboratories requires an excessive amount of agent hours and 
        resources. On average, when DEA responds to a clandestine 
        methamphetamine laboratory, the team consists of five special 
        agents and a supervisory special agent. The agents must have 
        specialized training and be accompanied by a ``Site Safety 
        Officer'' who is trained to supervise the health and 
        environmental issues that must be considered when disposing of 
        flammable, explosive, and toxic chemicals and waste products. 
        The average clean-up cost, for even a small laboratory in New 
        Mexico is between $6,000 and $15,000. In fiscal year 2002, DEA 
        has investigated and seized one clandestine laboratory in Santa 
        Fe County, two clandestine laboratories in San Juan County, and 
        one clandestine laboratory in Cibola County in northern New 
        Mexico. The largest areas for the seizure of clandestine 
        laboratories in northern New Mexico are in Bernalillo County, 
        primarily in the east mountain area, and in Valencia County, 
        the Los Lunas/Meadow Lakes area.
      Clandestine methamphetamine laboratories are an ongoing law 
        enforcement issue throughout the United States. While law 
        enforcement entities throughout New Mexico, including DEA, 
        continue conducting clandestine manufacturing investigations 
        successfully, clandestine manufacturing will be deterred. 
        However, while criminal chemists continue to develop and 
        improve their ability to circumvent new laws and regulations, 
        clandestine manufacturing will not be eliminated.
  --The second area of methamphetamine trafficking that affects New 
        Mexico is the distribution and transshipment of Mexican 
        produced methamphetamine in and through the state. During the 
        early 1990's, when the first chemical precursor control laws 
        were having a serious impact on the domestic clandestine 
        manufacture of methamphetamine, Mexican polydrug trafficking 
        organizations seized the opportunity and began large scale 
        production of methamphetamine in Mexican-based laboratories. 
        These Mexican labs are capable of producing multi-kilogram 
        quantities of methamphetamine that are smuggled across the 
        international border in the same manner as other illegal drugs. 
        New Mexico highways provide a ready corridor for transporting 
        methamphetamine into the state for distribution and 
        transshipment through New Mexico to eastern markets. Recent 
        investigations have shown that large quantities of 
        methamphetamine in New Mexico are distributed primarily in the 
        areas of Albuquerque and Farmington.
      An ongoing Albuquerque investigation has uncovered a large 
        Mexican-based organization that routinely distributes multi-
        kilogram quantities of methamphetamine in the Albuquerque area. 
        The largest seizure in this investigation has been 25 pounds. 
        The most recent cooperative methamphetamine investigation in 
        the Farmington area resulted in the delivery of 7 kilograms of 
        methamphetamine to an undercover agent. Recent interdiction 
        seizures include a highway interdiction seizure of 
        approximately 2 kilograms of methamphetamine destined for the 
        Birmingham, Alabama, and a kilogram of methamphetamine 
        interdicted from a Greyhound Bus passenger en route to Kansas 
        City, Missouri. Intelligence information obtained from these 
        investigations indicate that Mexican methamphetamine destined 
        for New Mexico, routinely crosses the United States-Mexican 
        Border, or is manufactured by Mexican-based trafficking 
        organizations within California and sent from areas such as Los 
        Angeles and/or Phoenix into or through New Mexico. Many of 
        these trafficking organizations have ties within the Mexican 
        state of Michoacan.
      On March 31, 2001, the FBI's Albuquerque Division, Gallup 
        Resident Agency, and the New Mexico Region II Narcotics Task 
        Force initiated an investigation into the seizure of 343 pounds 
        of methamphetamine from a truck stopped at the Arizona/New 
        Mexico port-of-entry of Interstate 40. The investigation 
        revealed that the driver was working for an organization based 
        in Mexicali, Mexico, which was transporting large quantities of 
        illegal drugs across the United States. The driver acquired the 
        343 pounds of methamphetamine in Calexico, California, and was 
        en route to deliver the drugs to Atlanta, Georgia. The driver 
        had previously transported 100 kilogram quantities of marijuana 
        to Atlanta, Georgia, for the same organization.
      Disturbingly, undercover investigations indicate that the Mexican 
        Nationals, who are transporting and distributing these large 
        quantities of methamphetamine, have access to a seemingly 
        unlimited supply of methamphetamine. Investigations and 
        intelligence gathering by federal, state, and local law 
        enforcement agencies are continuing in an attempt to further 
        identify and dismantle those individuals and organizations 
        operating in Mexico, Arizona, and California, that are 
        supplying New Mexico and other eastern cities.
                 staffing at santa teresa port-of-entry
    Question. Mr. Attorney General, I appreciate the work and mission 
of the United States Immigration and Naturalization Service (INS), 
especially in the face of the unique demands placed on this agency 
after the tragedy of September 11.
    As I expressed in a November 2001 letter to INS Commissioner James 
Ziglar, greatly increased traffic at New Mexico's Santa Teresa port-of-
entry has created an urgent need for additional INS inspectors to allow 
the operation of the port's two processing booths throughout the day. 
Traffic has more than doubled in the past several months compared to 
fiscal year 2001.
    The Santa Teresa port is currently operating with four INS 
inspectors, two of whom have been temporarily assigned from El Paso 
border crossings. I was pleased to learn recently that two additional 
INS personnel will be hired. However, I have been made aware that Santa 
Teresa still urgently needs an additional seven Immigration personnel 
to adequately handle increasing traffic.
    Additionally, I have learned that the Columbus port-of-entry, New 
Mexico's only 24-hour non-commercial border crossing, lacks at least 
six Immigration personnel to handle current traffic volume.
    Adequate staffing for these ports-of-entry is essential both for 
efficient commerce and for the safety and security of all parties 
involved in the flow of traffic across the border. I am concerned that 
despite my long-time role in increasing funding and personnel levels 
for the INS, New Mexico's ports-of-entry have continued to endure 
personnel shortages, experiencing no measurable benefit from these 
increased resources.
    Supplemental homeland defense funding has rightfully boosted 
resources for INS personnel, particularly along the Northern border. 
What assurance can you give me that the Southwest border, and 
particularly New Mexico's historically understaffed ports-of-entry, 
will receive personnel increases reflective of recent increased federal 
resources.
    Answer. The INS and the USCS share responsibility for operating the 
primary lane. Prior to September 11, 2001, Santa Teresa was operational 
from 6:00 a.m. until 10:00 p.m. On average, 20 cars and 52 people were 
inspected per hour. Santa Teresa has only two traffic lanes and two 
immigration inspectors on duty per shift. Immediately following the 
events of September 11, 2001, all ports were instructed to operate 
under Threat Level One requiring continuous 24-hour staffing at all 
land border ports of entry. This threat level also requires at least 2 
on-duty officers, 100 percent trunk inspection or its equivalent and 
100 percent queries for all pedestrians. Traffic seeking to avoid 
congestion at the nearby El Paso port, frequently diverts to Santa 
Teresa. The inability to accommodate the increased regular and holiday 
traffic combined with Threat Level One condition, resulted in increased 
wait times. However, in January 2002, the average wait time was 15 
minutes.
    The INS received 848 new land border inspectors in fiscal year 2002 
to enhance enforcement efforts and to reduce delays at ports of entry 
both north and south. That deployment includes 4 new positions to 
Columbus, New Mexico and 2 new positions to Santa Teresa, New Mexico. 
The INS has requested an additional 460 new land border inspectors in 
fiscal year 2003 to continue securing the ports, enhance enforcement 
and return to normal processing times. In order to accomplish that, all 
ports, regardless of their geographic location, must be adequately 
staffed to ensure that every precaution is taken when determining who 
should and who should not be admitted into the United States.
                           ins restructuring
    Question. The Immigration and Naturalization Service's mission 
involves carrying out two primary functions. One is an enforcement 
function that involves preventing aliens from entering the United 
States illegally and removing aliens who succeed in doing so. The other 
is a service function that involves providing services or benefits to 
facilitate entry, residence, employment, and naturalization of legal 
immigrants.
    Several critics have concluded that mission overload has impeded 
INS from succeeding at either of its primary functions and that the 
INS' service and enforcement functions should be separated in order to 
better administer immigration law. Consequently, there have been 
several proposals to fundamentally restructure the INS.
    I am pleased to see that the Administration and you Mr. Attorney 
General have come to recognize these problems in the past year and have 
formulated a plan that, in some ways at least, builds upon the 
separation premise I just mentioned.
    Mr. Attorney General, could you please detail your plan to 
restructure the INS that will hopefully allow it to effectively and 
efficiently administer the immigration laws?
    Secondly, can you give this committee any idea of what kind of 
financial obligation, if any, the Federal Government might have to 
undertake in order to achieve this goal or, at the very least, can you 
elaborate on how the overall funding for the INS will take shape once 
your plan is initiated?
    Answer. Two of the problems that INS continually struggles with 
under its current organizational design are: (1) competing priorities 
between its enforcement and services responsibilities; and (2) 
confusing chains of command. The creation of separate bureaus for 
enforcement and services will ensure, on one hand, improved provision 
of immigration services by staff dedicated to that function and, on the 
other an integrated law enforcement organization that can respond 
quickly to combat terrorism, human smuggling operations and illegal 
immigration activities at the border and the interior.
    The proposed organizational configuration eliminates current 
regional and district offices and creates separate area structures for 
the Bureaus of Enforcement and Immigration Services. This streamlining 
and separation will improve accountability and professionalism through 
the establishment of clearly defined chains of command staffed by 
individuals with specific expertise at all levels.
    It is estimated that the INS restructuring can be accomplished for 
approximately $70 million, $40 million of which is included in the 
Department's fiscal year 2003 request. More than half (55 percent) of 
the costs will be associated with adjustments of facilities, including 
space modifications and lease acquisition. Another 38 percent will be 
for buyouts and relocations of personnel in the field.
               violence against women new mexico funding
    Question. In fiscal year 2002, the U.S. Department of Justice (DOJ) 
did not award any grants under the ``Grants to Encourage Arrests'' 
program to New Mexico domestic violence organizations. Several of the 
New Mexico programs who had their applications denied were previously 
recipients of these grants. These organizations are now struggling to 
keep their doors open, cutting back on services that all parties, even 
the Department of Justice, agree are making a tremendous difference in 
domestic abuse cases.
    In various conversations with representatives from the Violence 
Against Women Office (VAWO), it was brought to my attention that there 
are questions about whether New Mexico law complies with the 
requirements of the grant. These questions have apparently existed in 
the past, but have not prevented the New Mexico organizations from 
receiving the grants. In an effort to ensure that this would not be a 
problem in the future, the entire New Mexico Congressional delegation 
wrote to the leadership of the New Mexico Legislature and the Governor 
to encourage them to fix the problems quickly.
    On February 12, 2002, the New Mexico House concurred with the New 
Mexico Senate, unanimously passing the legislation that will erase any 
of the doubts that might have existed.
    Because New Mexico has made a good-faith effort to remove any 
doubts that might have existed concerning the eligibility of programs 
dealing with domestic abuse, will you provide a one-year waiver to 
restore the funding that these programs desperately need?
    Answer. The Office of Justice Programs Violence Against Women 
Office (OJP/VAWO) does not have legal authority to waive statutory 
certification requirements that govern eligibility for funding under 
VAWO's Grants to Encourage Arrest Policies and Enforcement of 
Protection Orders Arrest Program (Arrest Program). [42 U.S.C. 
Sec. 3796hh relating to the Arrest Program, Id. Sec. 3796hh-1.]
    However, even if OJP/VAWO had statutory authority to grant such a 
waiver, fiscal year 2001 funding for the Arrest Program has already 
been allocated among qualified grantees.
    On February 27, 2002, the state of New Mexico received $1.1 million 
under VAWO's fiscal year 2002 STOP (Services, Training, Officers, 
Prosecutors) Violence Against Women Formula Grant Program. Funding from 
this award may be used to assist domestic violence programs in New 
Mexico.
    Question. Because the programs in New Mexico had been receiving 
funds through this program in previous years, no one in our state was 
aware that there was a problem. Therefore, the denial of funding came 
as a surprise. Would you keep me informed as the Department of Justice 
reviews the recently-passed New Mexico law to ensure that it erases all 
doubt about compliance with the DOJ requirements? Would you also make 
sure that I am made aware should something else arise that would cause 
the New Mexico programs to be denied funding?
    Answer. Every Arrest Program applicant is required, by statute, to 
submit a letter of certification. The letter of certification is not a 
Department of Justice (DOJ) requirement. The certification requirements 
are directly imposed by 42 U.S.C. Sec. 3796hh(c)(1)-(4), which 
provides:

    ``(c) Eligibility.--Eligible grantees are States, Indian tribal 
governments, State and local courts (including juvenile courts), or 
units of local government that--
            ``(1) certify that their laws or official policies--
                    ``(A) encourage or mandate arrests of domestic 
                violence offenders based on probable cause that an 
                offense has been committed; and
                    ``(B) encourage or mandate arrest of domestic 
                violence offenders who violate the terms of a valid and 
                outstanding protection order;
            ``(2) demonstrate that their laws, policies, or practices 
        and their training programs discourage dual arrests of offender 
        and victim;
            ``(3) certify that their laws, policies, or practices 
        prohibit issuance of mutual restraining orders of protection 
        except in cases where both spouses file a claim and the court 
        makes detailed findings of fact indicating that both spouses 
        acted primarily as aggressors and that neither spouse acted 
        primarily in self-defense; and
            ``(4) certify that their laws, policies, and practices do 
        not require, in connection with the prosecution of any 
        misdemeanor or felony domestic violence offense, or in 
        connection with the filing, issuance, registration, or service 
        of a protection order, or a petition for a protection order, to 
        protect a victim of domestic violence, stalking, or sexual 
        assault, that the victim bear the costs associated with the 
        filing of criminal charges against the offender, or the costs 
        associated with the filing, issuance, registration, or service 
        of a warrant, protection order, petition for a protection 
        order, or witness subpoena, whether issued inside or outside 
        the State, tribal, or local jurisdiction.''

    According to VAWO's Fiscal Year 2002 Arrest Program Application and 
Program Solicitation Guidelines (page 9), eligible applicants are 
instructed as follows:

    ``Eligible applicants must submit as part of the application a 
letter signed by the chief executive officer of the state, Indian 
tribal government, or unit of local government certifying to the 
conditions listed above [(1) to (4)]. If (4) above does not yet exist 
in the applicant jurisdiction, the state, Indian tribal government, 
state or local court, or unit of local government applying for grant 
funds must provide assurances that it will be in compliance with this 
requirement by the date on which the next session of the state 
legislature or Indian Tribal Legislature ends, or by October 28, 
2002.''

    The fiscal year 2002 Arrest Program application deadline was 
January 31, 2002. VAWO received and reviewed applications from the City 
of Albuquerque, Cibola County, Zuni Police Department, and Santa Fe 
County. Recommendations for fiscal year 2002 funding for some of the 
New Mexico applicants may be made pending final approval. Once VAWO 
makes final recommendations for Arrest applicants to receive grant 
awards, the recommendations then go through a clearance process in 
OJP's Office of the Comptroller and OJP's Office of Budget and 
Management Services. If any New Mexico application is approved for 
fiscal year 2002 Arrest Program funding, VAWO expects to announce these 
awards to the New Mexico delegation by May 1, 2002.
    OJP/VAWO does not ordinarily review state laws, practices and 
policies to provide legal advice to state officials for the purpose of 
certification of state compliance with federal statutory requirements. 
State officials/applicants need to conduct their own review and 
analysis and subsequently certify that they meet the statutory 
eligibility requirements. OJP/VAWO must rely on the state's review and 
certification to the federal statutory requirements, since OJP/VAWO 
staff are not experts on the laws, policies, and practices of each 
state and local government applicant. As a matter of policy or 
practice, OJP/VAWO does not look behind applicant letters that include 
proper signatures (of Chief Executive Officers) and complete 
certifications as specified in 42 U.S.C. Sec. 3796hh(c)(1-4) (i.e., 
certifications using the exact words provided in section 3796hh(c)(1) 
to (4)).
    However, due to the extraordinary circumstances surrounding this 
issue and at the request of the New Mexico delegation, OJP/VAWO 
reviewed the newly-passed New Mexico legislation (H.B. 242) and NMSA 
Sec. 40-13-3.1. Based on this review (as explained immediately below), 
it is not entirely clear to VAWO that the Arrest Program applicants 
from New Mexico will be able to meet certification requirements in 42 
U.S.C. Sec. 3796hh(c)(3) and (4), regarding mutual restraining orders 
and imposition of fees (respectively), as described below.
    New Mexico's new law (H.B. 242) does not address mutual restraining 
orders, and this may present an issue under certification requirement 
(3). OJP/VAWO is aware that courts in New Mexico use a ``Stipulated 
Mutual Protection Order'' form that does not meet the standard 
described in 42 U.S.C. Sec. 3796hh(c)(3). It is not clear, however, 
that New Mexico will need legislation to amend or prohibit use of this 
civil court form. For example, VAWO has received a letter from the 
Chief Justice of the New Mexico Supreme Court, stating that standard 
protection order forms are currently under review. Therefore, it is 
possible, assuming the State Supreme Court has such authority and 
chooses to exercise it, that court action to prohibit use of this form 
may enable appropriate New Mexico officials to determine that they can 
certify to the requirement in 42 U.S.C. Sec. 3796hh(c)(3). As mentioned 
above, OJP/VAWO will rely on New Mexico officials to determine when (or 
if) they may certify to this statutory requirement.
    In addition, H.B. 242 and NMSA Sec. 40-13-3.1 do not specifically 
address some of the fee issues covered by the certification requirement 
provided at 42 U.S.C. Sec. 3796hh(c)(4). The new legislation makes 
clear that, in New Mexico, an alleged victim of domestic abuse, 
stalking, or assault is not required to bear the cost of (1) filing a 
criminal charge against an alleged perpetrator of the offense; (2) the 
issuance or service of a warrant; (3) the issuance or service of a 
witness subpoena; or (4) the issuance or service of a protection order. 
Neither H.B. 242 nor NMSA Sec. 40-13-3.1 address, however, whether such 
an alleged victim might be made to bear the cost of filing or 
registering a warrant, witness subpoena, or protection order; nor does 
either law address the issue of fees for petitions for protection 
orders. Finally, neither law addresses whether fees might be charged 
with regard to filing, registering, or serving out-of-state protection 
orders. OJP/VAWO simply is unable to express an informed opinion on 
whether New Mexico can certify to requirement (4), because it is quite 
possible that other state laws, policies, or practices--of which OJP/
VAWO is unaware--may govern these issues (e.g., there may be no 
requirement under state law to file witness subpoenas or there may be 
no requirement to pay any fees for doing so); under such circumstances, 
New Mexico easily could certify to (4). To reiterate, OJP/VAWO will 
rely on state and local officials to review and analyze New Mexico 
laws, policies, and practices with respect to whether victims are 
required to bear any of these costs, as part of the certification 
process by the Chief Executive Officer for the applicant for Arrest 
Program funds.
    In an effort to assist applicants, VAWO routinely guides applicants 
to page 9 of the VAWO Arrest Program Application and Program 
Solicitation Guidelines--B. Certification of Eligibility--for sample 
language that may be included in applicant letters once the review and 
analysis of state laws, policies, and practices has been completed.
                               new mexico
    Question. The State Justice Institute (SJI) saw its funding cut 
from just over $6 million in fiscal year 2001 to $3 million in fiscal 
year 2002. While the SJI is requesting $13.55 million for fiscal year 
2003, the President is now proposing to zero this out. The Judges in 
New Mexico and the American Bar Association inform me that this has 
been a very useful program for the judiciary in New Mexico, providing 
funding for judicial education programs, court administrative 
processes, community-wide education concerning issues such as domestic 
violence, substance abuse, and services to pro se litigants.
    Are these programs that make a difference in the efficient 
administration of justice throughout the country?
    What will be the effect on the administration of justice if the 
State Justice Institute is not funded by the Federal Government?
    Answer. The State Justice Institute was established by Congress in 
1984 as a private, non-profit corporation to make grants and undertake 
other activities designed to improve the administration of justice in 
the United States. It was created as an independent agency, and is not 
funded or administered through the Department of Justice. Therefore, 
the Department has not undertaken a review of the functions of the 
State Justice Institute nor are we able to provide any views on this 
issue.
    Question. Attorney General Ashcroft, the Chief Justice of the 
United States Supreme Court, William H. Rehnquist, and the Chief 
Circuit Judge for the Tenth Circuit, Deanell Reece Tacha, have 
described the southwest border states as being in ``crisis.'' This 
description is based upon the massive number of cases that each federal 
judge currently has on his or her docket. Chief Circuit Judge Tacha 
expressed her concern about the district of New Mexico in particular. 
The district of New Mexico ranked fourth in the nation in criminal 
filings per judgeship in 2001.
    Based upon the experiences of the United States Attorney practicing 
in this district, would you agree that the judicial system in the 
district of New Mexico is in a state of crisis?
    What would help to alleviate the problems that are making the 
administration of justice so difficult?
    Answer. I am not in a position to characterize the state of the 
judicial system in the district of New Mexico. Congress, the 
Administration and the Department have placed considerable emphasis 
over the last several years on the accelerated rate of crime along the 
southwest border, especially in illegal drug and alien smuggling. This 
has led to additional allocations of law enforcement resources for the 
southwest border states in recent years. As a result of this increased 
law enforcement presence, more immigration and drug-related cases are 
being brought at all levels of the judiciary--state, local, and 
federal, alike.
    In the last few years, the federal criminal justice system across 
the entire southwest border has processed an unprecedented volume of 
new cases. This has been made possible through a combination of 
increased funding received from Congress and a focused Department 
Southwest Border strategy. Over the last several years, the Executive 
Office for the United States Attorneys has been addressing the issue of 
increased violent crime by increasing the number of attorneys and 
support staff along the southwest border. Specifically, in the District 
of New Mexico, a total of 22 attorneys and 16 support positions have 
been added since fiscal year 1997 to help manage this workload. This 
heavy workload, in turn, impacts the federal judiciary. Increased 
staffing combined with more efficient case processing procedures has 
been highly beneficial to the United States Attorneys along the 
southwest border. An increase in resources and further refinements of 
the court's case processing procedures might yield similar benefits for 
the courts.
                           scaap elimination
    Question. Mr. Attorney General, it is clear from the President' 
budget request that there is a desire to reorganize grant programs to 
states in an effort to make those programs more efficient and more 
accessible to the neediest of areas. This desire has resulted in the 
proposal to completely eliminate funding for many grant programs that 
states have come to rely upon for assistance.
    The State Criminal Alien Assistance Program (SCAAP) is just one of 
these programs that have been proposed to be eliminated. The purpose of 
this program is to reimburse some of the expenditures states make when 
they house and/or transport federal prisoners or detainees, an activity 
that is vital not only to state interests but federal interests as 
well. The two entities working together produces the best results for 
everyone. A program such as this is incredibly important in states like 
mine where there is a significant amount of human border traffic and 
the need for law enforcement is great. We cannot expect states to make 
up for federal expenditures out of their own budgets. I again make the 
point that this is only one of many programs the President has proposed 
to eliminate.
    I am aware that the President's budget request proposes a new grant 
program that consolidates many of the aforementioned grant programs but 
I am concerned that the decrease in funds and no real clear mission for 
these new grants will leave many states in the proverbial lurch with 
nowhere to turn.
    What is your opinion on this matter Mr. Attorney General and do you 
have any suggestions for the states that have come to rely on SCAAP 
funds in order to assist in an activity that is really federal in 
nature?
    Answer. One of the Department's top priorities in fiscal year 2003 
is to prevent illegal entry of non-citizens into the United States. 
SCAAP has provided reimbursement for illegal aliens incarcerated for 
state and/or local charges or convictions, but it is not intended to 
reimburse for illegal immigrants who are temporarily held in local 
jails following their arrest by federal authorities. Such detention 
costs are the responsibility of the Immigration and Naturalization 
Service. In 2003, the Department of Justice is requesting approximately 
$1.4 billion for its new Office of the Detention Trustee to provide bed 
space for the anticipated detainee population in the custody of the 
U.S. Marshals Service and the INS. The President's budget also requests 
$3.2 billion for Immigration Enforcement to stem the flow of illegal 
aliens into the United States. This represents a $764 million increase 
over the level of funding provided in 2002. We believe that this 
increase will result in a reduction of illegal immigration, which in 
turn should reduce alien criminal activity in the long term.
    In addition, DOJ is directing other resources to border states to 
help them with the costs of processing, detaining, and prosecuting drug 
cases referred from federal arrests through the proposed $50 million 
Southwest Border Prosecution Initiative. The $50 million requested in 
2003 will provide financial assistance to county and municipal 
governments in Texas, New Mexico, Arizona, and California for the costs 
associated with the handling and processing of drug cases referred from 
federal arrests. These funds may be used for hiring and training more 
prosecutors, probation officers, and court officials, court costs, 
detention costs, courtroom technology, administrative expenses, and 
indigent expense costs. Grants will be awarded based on a number of 
factors, including southwest border county caseloads for processing, 
detaining, and prosecuting drug cases referred from federal arrests.
    Question. Mr. Attorney General, as you are aware, the President's 
budget completely eliminates funding for the State Criminal Alien 
Assistance Program, a $565 million reduction from fiscal year 2002. I 
understand that the President's budget for law enforcement emphasizes 
programs that will have a tangible impact on improving homeland 
security or reducing violent crime. However, I am highly concerned 
about the impact cutting this program will have for many already-
struggling counties in New Mexico and the southwest.
    In past years, I have fought to increase SCAAP resources to relieve 
the significant burden imposed on local communities by the costs of 
detaining criminal aliens. The State of New Mexico received $1,672,821 
in fiscal year 2001 funding through this program. However, a recent 
United States-Mexico Border Counties Coalition study detailing costs 
associated with processing criminal illegal aliens estimates that New 
Mexico's three border counties spend an estimated $4.7 million annually 
on criminal justice, law enforcement and emergency medical care for 
illegal immigrants.
    According to the same study, the five state district courts in New 
Mexico's border counties are swamped with caseloads that are more than 
four times the national average. These counties' law enforcement and 
criminal justice systems are overwhelmed with illegal immigrants who 
are apprehended at the border for possession of drugs in quantities too 
small to meet the threshold established by the former U.S. Attorney for 
federal prosecution.
    Border counties are growing faster than any other region in the 
nation. At the same time, they have a lower per capita income and a 
higher percentage of people below the federal poverty level than any 
other region, making them the least able to foot the cost of services 
for criminal illegal aliens.
    In the face of burgeoning weight on border criminal justice 
systems, does the Federal Government have an obligation to assist 
states and localities with the disproportionate burden they carry in 
adjudicating criminals who have entered the United States illegally?
    Answer. As discussed above, the 2003 President's budget has 
proposed large increases to the immigration enforcement function of the 
Immigration and Naturalization Service, increases which should lead to 
a tighter border and a reduction in the numbers of illegal aliens 
states must deal with over the long term.
    The Federal Government has assisted and will continue to assist the 
border states by providing funding targeted at defraying the costs of 
adjudicating criminal aliens. To address the burden placed on southwest 
border county prosecutors, the 2003 President's budget requests $50 
million to continue the Southwest Border Prosecution Initiative.
    Originally administered by the Executive Office of U.S. Attorneys 
(EOUSA), the Southwest Border Initiative's initial purpose was to 
reimburse local district attorney offices along the southwest border 
for the costs of processing, detaining, and prosecuting drug cases 
referred from federal arrests. In 2001, $12 million was provided.
    In 2002, funding was increased to $50 million and responsibility 
for the program was transferred to OJP. The program will provide 
financial assistance to county and municipal governments in Texas, New 
Mexico, Arizona, and California for the costs associated with the 
handling and processing of drug cases referred from federal arrests. 
These funds may be used for hiring and training of prosecutors, 
probation officers, and court officials, court costs, detention costs, 
courtroom technology, administrative expenses, and indigent expense 
costs. Grants will be awarded based on a number of factors, including 
southwest border county caseloads for processing, detaining, and 
prosecuting drug cases referred from federal arrests.
    Question. Could the cost of law enforcement, criminal justice and 
emergency healthcare services for criminal illegal aliens pose a 
security risk by draining resources from local entities primarily 
tapped for homeland security, such as emergency medical technicians and 
law enforcement personnel?
    Answer. The 2003 President's budget is requesting $38 billion for 
homeland security, an $18 billion increase over the 2002 level. 
Included in the $38 billion request is $3.5 billion in assistance for 
state and local emergency responder training and equipment and 
increased funding adding 570 border patrol agents, 30,000 federal 
airport security workers, scores of air marshals and a host of other 
law enforcement personnel to deal with homeland security issues. Thus, 
it is unlikely that reductions to certain long-standing state and local 
assistance programs aimed at reducing and preventing domestic crime 
will pose a security risk.
    Question. What was the rationale for the Department of Justice 
eliminating funding to a program with direct impact on the viability of 
the law enforcement and criminal justice efforts of struggling 
localities?
    Answer. SCAAP is a payment program designed to provide federal 
funds to states and localities who incur costs for incarcerating 
certain criminal aliens held as a result of state and/or local charges 
or convictions. In 2003, the Administration proposes to eliminate SCAAP 
funding for the following reasons:
  --SCAAP does not advance the core mission of the Department of 
        Justice. Since 1995, approximately $3.45 billion has been 
        distributed to eligible state and local jurisdictions. By 
        statute, SCAAP funds are unrestricted, and recipient 
        jurisdictions may use these funds for any lawful state or local 
        purposes, not limited to correctional or even criminal justice 
        purposes. Thus, in contrast to other programs administered by 
        the Department, funds awarded under SCAAP do not directly 
        support efforts to develop the nation's capacity to prevent and 
        control crime, administer justice or assist crime victims, and 
        funds awarded are not in any way linked to overall performance 
        or evaluation data.
  --The redirection of SCAAP funds provides resources that will more 
        directly target specific crime-fighting efforts. Border states 
        (Texas, New Mexico, Arizona and California), which received a 
        large proportion of SCAAP funds, will continue to be 
        beneficiaries of the expanded Southwest Border Assistance 
        Initiative. Under OJP's Southwest Border Assistance program, 
        funds may be used for hiring and training more prosecutors, 
        probation officers, and court officials, court costs, detention 
        costs, courtroom technology, administrative expenses, and 
        indigent expense costs. Grants will be awarded based on a 
        number of factors, including southwest border county caseloads 
        for processing, detaining, and prosecuting drug cases referred 
        from federal arrests.
  --Redirecting resources from SCAAP will provide needed resources for 
        other Departmental and Administration initiatives. Funds made 
        available through the proposed elimination of SCAAP will be 
        devoted to areas such as federal counterterrorism and 
        immigration enforcement efforts. This redirection will enhance 
        DOJ's ability to meet its core mission and operational 
        priorities.

                          subcommittee recess

    Senator Hollings. We thank you very, very much, and our 
next hearing with judiciary will be next Tuesday, March 5, at 
10 a.m. in this same room. We thank you very, very much, John. 
We appreciate it.
    Attorney General Ashcroft. Thank you.
    Senator Hollings. The subcommittee will be in recess.
    [Whereupon, at 12:35 p.m., Tuesday, February 26, the 
subcommittee was recessed, to reconvene at 10 a.m., Tuesday, 
March 5.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003

                              ----------                              


                         TUESDAY, MARCH 5, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:01 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Ernest F. Hollings (chairman) 
presiding.
    Present: Senators Hollings, Reed, Gregg, and Domenici.

                             THE JUDICIARY

                   Supreme Court of the United States

STATEMENT OF HON. ANTHONY M. KENNEDY, ASSOCIATE JUSTICE
ACCOMPANIED BY:
        HON. CLARENCE THOMAS, ASSOCIATE JUSTICE
        SALLY RIDER, ADMINISTRATIVE ASSISTANT TO THE CHIEF JUSTICE
        WILLIAM SUTER, CLERK OF THE COURT
        PAMELA TALKIN, MARSHAL
        ALAN HANTMAN, ARCHITECT OF THE CAPITOL
        TONY DONNELLY, DIRECTOR OF BUDGET AND PERSONNEL

                            OPENING REMARKS

    Senator Hollings. Good morning. The subcommittee will come 
to order. We have the pleasure of welcoming Justice Kennedy and 
Justice Thomas at our hearing this morning relative to the 
Supreme Court and its budget. We welcome you both.
    Senator Gregg, do you have a comment?
    Senator Gregg. It is a pleasure to be here and have the 
Honorable Justices join us again. I notice there must have been 
a coup d'etat, because the last 3 or 4 years, Justice Souter 
was here. He appears to have been replaced.
    Justice Kennedy. We have got him busy, Senator.
    Senator Hollings. Very good. We recognize you both at this 
time and you can present your testimony before the committee. 
The full statement will be included in the record and you can 
present it or summarize it as you wish.
    Justice Kennedy. Good morning, Mr. Chairman and members of 
the committee. Justice Thomas and I bring you greetings from 
our colleagues. Thank you very much for having this hearing. I 
will just summarize my opening remarks, Mr. Chairman.
    We have with us today a number of our Court personnel and I 
will just proceed down the row so that you can identify them: 
Paul AcAdoo, who is with our Marshals Office; General William 
Suter, who is the Clerk of the Court, and who I might say runs 
the best clerk's office of any court in the country; the 
Marshal of our Court, Pamela Talkin; Tony Donnelly, who is our 
Budget and Personnel Officer, and who is well known to your 
staff. He has been working in very close cooperation with them 
and we appreciate that. Sally Rider, the Administrative 
Assistant to the Chief Justice is right behind me. We also 
have, of course, Alan Hantman, the Architect of the Capitol.
    Now, I know, Mr. Chairman, that waiting in the wings, we 
have Judge Heyburn and Ralph Mecham of the Administrative 
Office and our budget is just about 2 percent of the Courts' 
total budget, so I recognize that order of priority.
    But it is a pleasure to appear here, Mr. Chairman. You 
know, when we talk to judges from abroad in Africa and Russia 
and Asia and even in Europe, they talk about this process. They 
are fascinated with how we have established judicial 
independence. We tell them, as I say in our opening statement, 
that the tradition has been, but, of course, it is your 
constitutional responsibility and your constitutional right to 
determine the level of funding. The tradition has been you give 
some deference to us if you are satisfied we have approached 
our task in the right way and that we have been prudent and 
careful in analyzing the figures.

                          SUPREME COURT BUDGET

    Now, the budget request, because of the vagaries of the 
budgeting cycle for our major request, which is the building, 
is actually less than last year, and I would be very happy if 
we could make that the headline. As we all recognize, however, 
we are asking for an operational increase. We are asking for an 
increase of $6,288,000 on a base of $40,036,000. That is a 16 
percent increase. Two-thirds of that increase is for 
adjustments to the existing base.
    The staff did question, and I raised the same question, 
whether we should have put pay increase for our police in the 
adjustment base, but our budget officer assured us that was the 
proper thing to do. I might point out that we have lost some of 
our very best policemen to the air marshals. They are being 
paid so highly that we find it difficult to keep some of our 
very best people, but we are filling those positions.
    The increased part of our operations and expenses budget, 
quite apart from the building, is $2,268,000 and that breaks up 
really, Mr. Chairman, into two parts. One, we are asking for 14 
positions. I think four of those can be described as relating 
to the workload of the Court. We need an extra telephone 
operator, we need a case analyst in the clerk's office, and we 
need two librarians.
    Our workload is increasing. If you look at page 1.11 of the 
budget request submission, you will see that we are pushing 
toward 9,000 cases a year, and I think we will soon be at 
10,000. This means that we must support and sustain and update 
our computer function. We are computer dependent. We are 
electronic dependent in our Court. We are asking, then, for 
five positions for training and upgrading and maintaining and 
improving our computer skills. As of this point, we can barely 
keep up with what we have, but we want to go to the next level 
of learning because the committees of the Congress have always 
requested us to do that.
    We have five websites. We are heavily dependent on 
electronic information for much of the administrative work of 
the Court. Just last year, the Clerk of the Court realized how 
much time was spent in corresponding with State bar 
associations about attorney admissions and attorney 
qualifications. That usually took at least two or three letters 
each way for each attorney. They devised an electronic system, 
and I think 38 States are already on this; and it has just been 
marvelous.
    We, during the disruptions of September and October, were 
very concerned that case filings were in the mail and that they 
be protected. The post office protects the filing by the postal 
date. But we were concerned that we would just be way behind 
because we were not receiving the petition. It would be 2 
months before it would come through the mail.
    So our Clerk, I think very creatively, got hold of the 30 
or 40 biggest printers in the country, found out who had been 
printing petitions for certiorari and then contacted all the 
attorneys by e-mail and said, send us your filing by e-mail. By 
doing that, he was able to pick up 400 cases that otherwise 
would have been stalled for a couple of months. We think we 
have cured that gap, but that just shows you how we are 
dependent on information technology.
    The Clerk of the Court prepared for us a list of the hits 
on our website for just December of last year and that December 
was roughly a normal operating month. We received over 
1,200,000 hits on the computer and we had close to 150,000 net 
site sessions, where the person asks questions and gets answers 
and stays with it for a while. That is why we think this 
request is prudent; and we think it is urgent.
    The other positions, Mr. Chairman, are for our offsite 
facility. That should be up and running in April. That is where 
we are doing our mail screening. That is where we moved some of 
the hazardous functions that are now in the Court and should 
not be there for the maintenance of the Court, the woodshop, et 
cetera, and we need those positions for that offsite facility.

                         BUILDING MODERNIZATION

    Ordinarily, Mr. Chairman, as you know, it is the 
prerogative of the Architect of the Capitol to present the 
portion of our budget which pertains to buildings and grounds, 
but since there is such a substantial appropriation there, let 
me just quickly review that history.
    As you will both remember, we testified in my earlier 
tenure on this committee that we were expecting a major request 
for building improvement, and we said it could be as high as 
$20 million. The architects then found that all of the systems 
in the building had to be replaced. We had not known that. When 
we first heard figures, we heard them in the area of $170 
million and we were simply shocked and notified your staff 
immediately. We were concerned that we had given testimony it 
would be $20 million and all of a sudden we are hearing $170 
million, so we did three or four things.
    We met with the Architect of the Capitol and made it clear 
that this was not to be an elaborate, precise, historical 
reconstruction, where you match the original paint and take a 
great deal of time with that. We are respectful of the 
building, the building will look beautiful, but it is not a 
precise historical reconstruction, and that is a substantial 
cost savings.
    Second, the Architect told us that it was normal in a 
project of this size to have a peer review where other 
architects and other estimators, other engineers from the 
outside come and ask the necessary questions to make sure that 
the budgeting has been done in the appropriate way. We did that 
and we hired our own architect to make sure we were asking the 
right questions. The result was a project cost of slightly over 
$122 million. Over half of it has been appropriated. We are 
asking in this budget for the remaining appropriation of $49 
million plus.
    Mr. Chairman, we were very careful to ask whether there 
would be a cost saving if we moved out of the building and the 
answer was definitely not. The plan is to more or less work 
around us. They propose to come into each chambers only once, 
so each Justice is only disrupted one time. The construction, 
if authorized by the Congress and if the bidding process goes 
as anticipated, should begin in 2003 and we will have to live 
with our jackhammers and yours, which are across the street, 
until 2009, but we are prepared to do that. We think it is 
absolutely necessary for the building.
    We are even concerned with this timeline. We are in danger 
of a major systems failure and the electric system at any time, 
and the same with the air conditioning, but they are patching 
it together, finding parts for something that was manufactured 
a long time ago. We are the only major building on Capitol Hill 
that has not been renovated since it was built. It is 65 years 
old. In a way, I think we are maybe the victims of our own 
thrift because we have let it go for that long.
    But we think it is absolutely necessary and we very much 
appreciate the meetings we have had with you and your staff to 
explain this figure, to explain the necessity for the project, 
and we very much appreciate your recognizing the importance of 
preserving the symbolism and the real operational value of the 
Court.

                          prepared statements

    In closing, let me say that when we do go to these foreign 
countries, I am and Justice Thomas is, all of us in the 
judiciary and I am sure you in the Congress are immensely proud 
of the judiciary of the United States and we most appreciate 
your concern in examining our specific request this morning. 
Thank you.
    Senator Hollings. Very good.
    [The statements follow:]
            Prepared Statement of Justice Anthony M. Kennedy
    Mr. Chairman and Members of the Committee, Justice Thomas and I 
appreciate this opportunity to appear before your Committee to address 
the budget requirements and requests of the Supreme Court for the 
fiscal year 2003. We bring you greetings from the Chief Justice and 
from all of our colleagues at the Court.
    We have with us today Sally Rider, Administrative Assistant to the 
Chief Justice; Pamela Talkin, Marshal of the Court; William Suter, 
Clerk of the Court; and Tony Donnelly, Director of Budget and 
Personnel.
    Judicial independence as it now exists in the United States is 
still a primary objective for emerging democracies in the modern world, 
as they seek to establish enduring constitutional structures of their 
own. The same question is asked again and again in meetings in Africa, 
in the Russian Federation, in Asia, in South America, and it is this: 
What are the requisites of judicial independence? One of the points we 
stress is that judicial independence is not a single historical event 
but instead a constant, never-ending process.
    An aspect of this process which fascinates outside observers is the 
very implementation of checks and balances that we engage in this 
morning. We explain the budget process by saying that while it is the 
privilege, and the constitutional responsibility, of the Congress to 
determine the funding of the courts, tradition has it that the 
judiciary's own assessment of its needs be given some deference. In 
this respect, much depends upon the confidence you place in our 
submissions. It is our principal objective in coming before you today 
to assure you that in making our assessments, we have tried to conform 
to the highest standards of caution and prudence.
    As is customary, the Supreme Court's budget request is in two 
parts. The first is for Salaries and Expenses of the Court. The second 
is for Care of the Building and Grounds. To address what we understand 
to be the concerns of the Committee, and to allow full consideration of 
the major funding request for modernization of our building, we will be 
pleased to talk about Buildings and Grounds in much more detail than 
usual.
    Let me turn first to Salaries and Expenses. With regard to this 
portion of the Court's budget, our total fiscal year 2003 budget 
estimate is $46,324,000. This is an increase of $6,288,000, or 16 
percent, over the budget authority for the current fiscal year, 2002.
    Most of the fiscal year 2003 increase represents base adjustments--
that is, required increases in salary and benefit costs and 
inflationary increases in fixed costs. Specifically, $3,533,000 of the 
adjustment represents required increases in salary and benefit costs. 
Also, $487,000 is requested for inflationary increases in fixed costs, 
allowing us to keep up with rising costs in all of our operations. This 
results in a $4,020,000 increase to the budget base.
    We have included in the adjustments to base two items related to 
safety and security that generate unavoidable increases in costs. We 
request $871,000 to keep our police pay schedule on par with the 
Capitol Police pay schedule and to cover police overtime costs, and we 
request $237,000 for the increased cost of larger offsite warehouse 
facilities, which include an offsite mail screening facility. Both the 
police overtime and the offsite mail handling are directly related to 
the need for increased security since the terrorist attacks last 
September.
    In addition, we request $2,268,000 over base adjustments this year 
to fund fourteen positions and two program increases. Most of the 
increase, $1,911,000, is related to technological improvements in 
automation and security. During the last ten years, the Court's use of 
information technology has increased to such an extent that an 
automated system is now an essential part of every Court function. We 
rely on automated systems to docket cases; to draft and publish the 
Court's opinions; to procure equipment, books and supplies; and to pay 
bills. The automation has increased effectiveness and efficiency; but 
automated systems and equipment must be maintained and upgraded. As 
computer hackers and other wrongdoers become more sophisticated, we 
must try to stay ahead of them and maintain secure, up-to-date data 
systems. We were unsuccessful in last year's request for additional 
funds and staff to address these critical needs and as a result, our 
current resources are stretched to the limit in keeping our existing 
systems running. In previous years, this Committee has encouraged the 
Court to adopt the most modern work processes by using the latest 
technology. We ask the Committee to support our current request for 
increases in the Court's automation program in order to enable us to 
make necessary improvements. At present, our technical staff must spend 
its time maintaining existing, inadequate systems and equipment, 
leaving insufficient resources for essential improvements. Security 
concerns arising after September 11 only exacerbate the situation.
    We request four technical positions in the Court's Data Systems 
office: two PC/Network Specialists to test and deploy new equipment and 
technology, a Local Area Network/PC Security Specialist to develop and 
support Intranet/Internet applications and ensure the security of the 
Court's sensitive data, and a Programmer/Analyst to develop new 
software applications. The total cost of these four positions is 
$216,000.
    We also request $100,000 for a consulting service contract to 
upgrade the library's research inquiry database. We are requesting an 
increase of $1,550,000 to the data systems area of the Court's budget 
to fund new software and hardware technologies, to provide training, 
and to enhance computer security. The Court will take necessary steps 
to ensure cost-effective selection of data systems, and we will try to 
achieve savings wherever possible. With this authorization we intend to 
fund such activities as: upgrading equipment for Justices, Court staff 
and the Court's technology lab; engaging consultants to evaluate and 
enhance security measures; increasing automation skill levels of Court 
staff; and introducing specialized technology for security.
    The remaining $402,000, an increase to the Salaries and Expenses 
account, is to add ten positions. Seven of these we asked for in fiscal 
year 2002 but did not receive: a telephone operator to perform 
telephone console operations duties, a secretary to provide budget, 
procurement and other administrative support for the Data Systems 
Office, and five logistical support positions for our off-site 
warehouse space--which has been expanded to meet modernization needs 
and address security concerns such as offsite mail screening. The other 
three positions we wish to add are: a library technology assistant to 
support three major library systems with training and user support, a 
special collections librarian to assist in conserving the Court's rare 
books and archival records and briefs, and a case analyst to address 
the docketing of an increasing number of cases filed.
    Since we appeared before this Committee five years ago, we have 
made substantial progress in the planned modernization of the Supreme 
Court building. Our building, which is a splendid and revered symbol of 
justice in our democracy, has not been updated since it opened in 1935. 
Unlike the White House, the Capitol, and most of the government 
buildings on Capitol Hill, the Court building has had no major 
renovation. Its basic systems fail to meet modern standards. The 
heating and air conditioning, and the mechanical and electrical systems 
must be replaced. They have long outlived their expected useful lives 
and now require constant maintenance in order to avoid a catastrophic 
failure. The engineers who designed the electrical system had not heard 
of computers, faxes or copy machines. The longer we live with these 
outdated systems, the more likely we are to experience a disruptive--
and possibly dangerous--system failure.
    The full cost of this project is $122,283,000. Of that sum, the 
remaining appropriation required is $49,696,000.
    We have worked in close cooperation with the Architect of the 
Capitol, the design architects, an independent peer review panel and 
our own consulting architect in order to develop the most efficient 
plan to modernize and upgrade the building. Even prior to September 11, 
we were considering and designing upgrades to security and safety for 
building occupants and visitors.
    We received the bulk of the funding for the modernization project 
in fiscal year 2002 and we appreciate your acknowledgment of this 
necessity. This year, we seek the final portion of funding so that we 
can keep the project on budget and on schedule. Assuming that we 
receive this final funding in this fiscal year, we intend to begin 
construction just over a year from now, in June 2003.
    We are convinced that this project is essential for the continued 
safe and efficient operation of the Supreme Court. We underscore both 
the necessity of the work and its absolute urgency. Mr. Alan M. 
Hantman, Architect of the Capitol, will present a separate statement to 
the Subcommittee regarding this portion of the total budget.
    This concludes a brief summary of our request. We will be pleased 
to respond to any questions that the Members of the Committee may have.
                                 ______
                                 
                 Prepared Statement of Alan M. Hantman
    Mr. Chairman, I am pleased to submit a formal statement to present 
the budget for the care of the building and grounds of the Supreme 
Court.
    As background, the Office of the Architect of the Capitol is the 
agency responsible in the Legislative Branch for the structural and 
mechanical care, maintenance, cleaning, and operation of the buildings 
and facilities supporting the Congress, including the Capitol Power 
Plant. This responsibility extends to the Botanic Garden and the 
structural and mechanical care and maintenance of the Library of 
Congress buildings and grounds. This office also undertakes the design 
and construction of new facilities and alterations of existing 
facilities.
    For the Judicial Branch, the Architect of the Capitol, by authority 
of 40 U.S.C. 13a-13b dated May 7, 1934, is responsible for the 
structural and mechanical care of the United States Supreme Court 
building and grounds. My responsibilities do not include custodial 
care, which is under the jurisdiction of the Marshal of the Supreme 
Court and is provided for in the Court's salaries and expenses 
appropriation.
    Working with the Court, my emphasis has been on improving the 
safety and security of the personnel and building structures. The 
fiscal year 2003 request continues the efforts to improve the security 
and safety posture. In the past several fiscal years we placed four new 
security barricades in the driveways, and upgraded security cameras in 
all locations. In fiscal year 2002, we have installed bomb blast window 
film and plan to install a digital recorder by late spring to further 
increase building security surveillance options. Additionally, we've 
started work on the fire alarm system and fire pumps to improve safety. 
Although these last two projects are not proceeding as quickly as I 
would like, I'm working to complete them as soon as possible.
    I'm requesting $53,626,000 to meet the requirements of the Court 
for the care of the building and grounds in fiscal year 2003. This 
request supports three major areas: $49,696,000 for the Building 
Renovation Project, $3,687,000 to maintain current operations and 
maintenance services, and $243,000 in program changes. This request is 
$13,904,000 or 20.6 percent less than the fiscal year 2002 available 
amount of $67,530,000. The funding requested is less than that for 
fiscal year 2002 because the funds required to support the Supreme 
Court building renovation and modernization project are less than the 
amount appropriated last year.
                  building renovation and improvements
    By far, the most significant item in this budget is the funding 
requested for the modernization of the Supreme Court building. The 
Supreme Court building, unlike other buildings on Capitol Hill, has not 
been upgraded since its completion in 1935. At 67 years of age, 
virtually all of its building systems have far exceeded any reasonable 
life expectancy, and they require an aggressive daily maintenance 
schedule to continue operating. In addition, building life safety, 
security, and essential building system requirements have advanced 
greatly since 1935. It has become critical that the Supreme Court 
building is brought up to current standards, since each year that the 
project is postponed potential risks increase significantly to more 
than 400 occupants and 1,000,000 visitors a year. For example, the 
building incorporated the latest in fire resistant technology when it 
was built, but modern life safety systems, consisting of fire 
detection, fire suppression, fire alarms, and building egress, have not 
been provided since the building was completed. Also, security concerns 
were significantly different in federal facilities in 1935 than they 
are today--especially after September 11. Likewise, essential building 
systems, consisting of mechanical and electrical components, have not 
been upgraded since 1935. Virtually all systems have become obsolete 
and replacement parts are not available.
    The remainder of the funding for the building modernization has 
been requested in one lump sum in order to keep the project on time and 
to award a single construction contract. We have continued to move 
forward with the project with an eye toward awarding a construction 
contract in the spring of 2003. If we do not receive the remainder of 
the funding in this budget cycle, we are certain to face a significant 
delay in the project as well as a significant increase in the cost of 
the project. A single construction contract is important for several 
reasons: to achieve single source contractor accountability for 
integration of the components that comprise the life safety, security, 
mechanical, and electrical systems; to maximize success in the 
performance of the integrated components; to minimize damage to the 
historic building by disturbing ceilings, walls, and floors only once; 
and to minimize the disruption of court occupants during renovation. A 
single construction contract is also the most cost-effective, since 
every construction contract must bear an overhead cost to contract, 
move on and off the project site, provide tools and equipment, and 
disturb ceilings, floors, and walls.
    With the support of this Subcommittee, much progress has been made 
toward refining the scope and design for the project. The budget 
request for this project is now based upon completion of the 
preliminary design. I am pleased to report that the cost estimate for 
the modernization project remains at $122 million.
    As you may be aware, in fiscal year 1999 we engaged in an 
independent peer review of the project to objectively evaluate whether 
the scope and cost were valid. That effort took place in conjunction 
with an additional set of independent reviewers brought in by the 
Court. The review took place and the conclusions were threefold: that 
the scope was valid, that the cost was reasonable, and that the 
renovation was necessary and should not be delayed. We are now in a 
position to begin this project with the funding requested in fiscal 
year 2003.
    Currently, a total of $72,587,000 has been appropriated for the 
modernization project. In fiscal year 1998, an amount of $225,000 was 
appropriated on an annual basis to provide for a study on improvements 
and upgrades to the Supreme Court building and systems. Preliminary 
design of this project began in fiscal year 1999 with an amount of 
$1,529,000 which was maintained in the budget base in fiscal year 2000 
for continued design work, as well as an amount of $2 million for 
window upgrades. In fiscal year 2001 an amount of $3.5 million was 
provided for continued design work, and in fiscal year 2002, 
$63,804,000 was appropriated. The fiscal year 2002 amount consists of 
$33,804,000 that was appropriated within the Judiciary Appropriations 
Act, 2002, and $30,000,000 that was provided in the emergency security 
supplemental for fiscal year 2002, as part of Division B of the Defense 
Appropriations Act, 2002. This amount will allow us to continue on 
schedule. If we receive the remainder of the funding in fiscal year 
2003, construction will begin in mid-2003.
    Therefore, to attain the total amount of $122,283,000 for this 
project, it is requested that $49,696,000 of $63,804,000 made available 
in fiscal year 2002 be retained in the budget base for fiscal year 2003 
for full funding for the construction of the project.
                       operations and maintenance
    As noted above, I'm requesting $3,687,000 to maintain current 
operations and maintenance services. Costs for current operations and 
maintenance services have increased from last year by $111,000 for 
mandated pay-related costs and $159,000 for higher costs projected for 
utilities, training, exterior point and caulking, and supplies.
                            program changes
    A total increase of $243,000 is requested for program changes. An 
increase of $178,000 will support the hiring for three additional 
maintenance mechanic positions. The positions are needed to support 
significant increases for preventive maintenance for all equipment in 
the plumbing, HVAC, and electrical trade disciplines. Another $65,000 
is requested for two capital budget projects. These projects are to 
upgrade the kitchen fire suppression system ($10,000) and to replace 
the metal detectors ($55,000).
    I assure the Chairman and Members of this Subcommittee that I will 
work closely with you and the Subcommittee staff, as well as the Court 
to achieve adequate funding for the care of the building and grounds.
    Mr. Chairman, that concludes my statement and I will be pleased to 
respond to any questions that you and the Subcommittee may have.

    Senator Hollings. Justice Thomas, did you have any comment?
    Justice Thomas. Mr. Chairman, I am satisfied with what 
Justice Kennedy has said.
    Justice Kennedy. He does not always say that.
    Senator Hollings. Well, we are glad to get it on record 
here.

                            COURT AUTOMATION

    Justice Thomas. But I would like to add that the additions 
in the offsite facility as well as the technology area are 
basically built upon requests that we made last year. In order 
to keep up technologically, we have had to rob Peter to pay 
Paul, but this year, Peter is broke, too, and there is just no 
way we are going to be able to be current technologically if we 
do not make some quick changes. I am beginning to sound like a 
broken record because I remember saying that at EEOC when I was 
there, and here I am at the Court again saying the same thing.
    But we are falling behind and I think it is imperative 
that, because we are so information dependent in doing our 
jobs, in research and producing opinions and in managing the 
caseload, the docket, that we be current technologically. The 
Court was much farther behind than many institutions when I 
arrived, and it is not because of me that it has caught up 
somewhat, but during my decade on the Court, we have moved 
quite a bit, but we are still quite far behind. I think it was 
critical last year and it is even more critical now that we get 
caught up.
    So these are sort of redundant requests and they have to be 
looked at in the context of our request last year. That is all 
I have to add, Mr. Chairman.
    Senator Hollings. Very good. I am convinced that the 
committee and the Congress will take care of that technological 
need. I think at the time when Lewis Powell came to the Court 
from Richmond and he said he had a way better office over in 
Richmond than he had over here in Washington as a Supreme Court 
Justice we were far behind, word processing, computers, and 
everything else like that. Technology, of course, will save 
tremendous time and burden on the Court. There is no question 
there with respect to that, or in this Senator's opinion, with 
respect to the construction, that $49.7 million requested to 
complete funding for the Supreme Court rehabilitation project.

                              JUDGES' PAY

    There is one question, and it is in the headline in the 
morning Post, relative to pay. I think the Court did the proper 
thing with respect to not considering that issue further in the 
sense that your statement, Justice Kennedy, tradition has it 
that judiciary's own assessment of its needs be given some 
deference. It is good to have that word ``some.''
    Some in the Congress feel that the Court has had an 
attitude that tradition has it that the judiciary's own 
assessment of its needs be given deference, period. The truth 
of the matter is, on both sides of the ledger, that was not the 
tradition that prevailed with Justice Powell. In that case, the 
Court was not asking enough, and on our own, we increased at 
this particular committee level all the programs with relation 
to the technological needs.
    On the other hand, for the tradition here of the past 
several years, judges' pay has been tied to the congressional 
pay and that was made permanent in law last year. If there is 
any question still, and I am going to look at it and see, 
perhaps the judges' inclusion in that 1989 provision for COLAs 
be deleted so there is no question about it for the simple 
reason that if it were otherwise, the approach that has been 
taken by some on the Court or within the judiciary that once we 
passed a COLA in 1989, it would be unconstitutional to repeal 
that provision from there on. That would be a permanent 
increase each year, however the economy developed.
    I, for one, am not up to speed and fully read because I 
have not had an opportunity this morning. When reading that 
Post article, though, I said, wait a minute here, and this 
feeling that I expressed is within the Senate and the Congress. 
I can tell you that, because we almost had to sneak in to get 
last year's pay increase. We had to what we call fence the 
money in another budget to make sure that giving you the 
increase would not raise a point of order under a certain Rule 
28 that it had never been provided that money in either bill.
    So we are very respectful of the Court and the tremendous 
job the Court is doing. There is no question about that. You 
folks do know your needs better than any, but ordinarily 
speaking, that pay issue is tough. I happen to think Senators 
are underpaid, and I have stated that, not now, but I stated 
that 20 years ago and everything else of that kind. I have 
school board superintendents and so forth back home that are 
paid way more and do not have to keep up two homes or anything 
else like that. So we are not trying to hold the judges down, 
but we are trying to politically, I guess, get some way to 
attract just working people to public service here in the 
Congress rather than millionaires.
    Having said that, let me yield to my distinguished former 
chairman.
    Senator Gregg. Thank you, Mr. Chairman.
    It is always a pleasure to have members of the Court appear 
at this hearing. I have always felt it is a peculiar situation, 
and as a result, I have never really taken the opportunity of 
the legislative branch to be very inquisitive. I am not sure 
what our Founding Fathers had as their basic philosophy here, 
but clearly in the separation of power issue, the question of 
funding for the Court was one of the gray areas. But it does 
come from the Congress and, therefore, we do have a 
responsibility in this area, but it is still a peculiar 
symposium, in my opinion.
    I would say I want to second the chairman's comments 
relative to the decision on pay raise. I happen to have 
aggressively pursued an effort to delink the two, the court 
system and the Congress. I feel very strongly that we need to 
pay our Federal judges more in order to attract and keep 
quality people on the Federal court, especially on the district 
court level, because of the fact that we have got people with 
young families and it is very hard for them to raise those 
families compared to what they could make if they were not on 
the court. But, unfortunately, we have not been able to sell 
that to our colleagues. However, someday, hopefully, we will be 
able to sell that concept to our colleagues. But in any event, 
the authority resides with us and I think the Court's decision 
in this area was an excellent one, not that you need our 
counsel as to what your decisions are.
    We may appear before you as this committee in the future, 
as a matter of fact, and since we are not asking you any 
questions, hopefully you will not ask us any questions.
    It is with an amicus brief on an issue that affects our 
jurisdiction rather significantly.
    With that, I yield and appreciate the Justices appearing.
    Justice Kennedy. Mr. Chairman, our budget traditionally has 
not included any request for raise of salaries, and I think the 
deference that you and I referred to applies primarily to the 
resources of the judiciary rather than to the salaries.
    I did not come here prepared to make a statement about 
salaries and I am reluctant to state too much, in part because 
I fear my remarks might be inadequate to express the feeling of 
frustration and disappointment on the part of Article III 
judges throughout the United States at having been specifically 
denied four different COLAs when all other members of the 
Government, save the Congress, received it.
    The decision, I will not comment on. It stands. As you 
know, even the dissent from failure to grant certiorari is 
simply to say we think there is an issue here which should be 
heard, that there is an argument on the other side. It is not 
an indication of how even the dissenting judges would rule. 
Four different Federal judges looked at this and two thought 
that the denial of COLAs was constitutional, two thought it was 
not. That decision just will simply have to stand and it speaks 
for itself.
    I will say that from an institutional standpoint, the cloud 
of that suit has now disappeared. That suit is over. It is 
finished. It seems to me that once again, it is the absolute 
urgent responsibility of the Congress of the United States to 
address the fact that judicial salaries since 1970 compared 
with the national average of salaries, have declined in real 
dollar value 36 percent. We are losing, Mr. Chairman, judges at 
a record rate, and when you lose a judge who is eligible for 
senior status, you have to pay all his retirement, all his full 
salary anyway. But then you have to replace that judge by more 
judges, so it is not cost effective anyway.
    We have a judge, just as one example--had a judge who 
probably was among the 10 most knowledgeable people in the 
United States on class actions. He handled our asbestos 
litigation. He had computer websites. He had models for how 
attorneys intervene, et cetera. It was just like a symphony, 
the way he conducted that massive suit. We lost him. He left. 
He left because the Congress would not even grant him a cost-
of-living raise to keep his salary even.
    There are two issues on the salary, as you well know, Mr. 
Chairman. One is to keep it from eroding. The other is what the 
base level should be compared to whatever benchmark you want to 
decide, private practice or law school deans or whatever.
    The suggestion has been that there be a commission 
appointed to make a recommendation to the Congress, and if that 
is what the Congress needs to give it the necessary advice and 
guidance in this area, of course that should be done. How this 
is done is really for you to decide, but I simply would be 
remiss, although I was not prepared to make these remarks, in 
not telling you the urgency that my colleagues in the Federal 
judiciary feel on this point.
    Senator Hollings. I am glad I raised the subject, because 
your comments are well taken. Again, they can apply just to my 
crowd. I can see, as you give that one example, I can see 
Senator Nunn and Senator Bumpers and Senator Ford and Senator 
Johnson, and I can start going down a list. They just could not 
keep up two houses and everything else and really take care of 
their families like they were able to do, and therein lies our 
problem. I wish I had you in the Senate to make that argument.
    Justice Kennedy. I will come anytime, Senator.
    Senator Hollings. We will get you up more and more over 
here, because it is well taken.
    Senator Gregg.
    Senator Gregg. I obviously agree. I agree with the concern. 
I think it is very real, and as the Justice knows, this is not 
about the belief that we feel that judges are not being paid 
fairly. We know they are not being compensated adequately. It 
is about Congress. We have hitched our wagon to your star, 
regrettably, on this issue.
    Senator Hollings. Very good. We appreciate your appearance, 
both of you, here this morning.
    We will now hear the testimony on the Federal judiciary, 
Chief Judge John G. Heyburn.
    Justice Kennedy. Thank you very much, Mr. Chairman.
    Senator Hollings. Thank you very, very much.
    Justice Thomas. Thank you, Senator.
    Senator Hollings. Thank you very much, Justice Thomas.
                           Federal Judiciary

STATEMENT OF JUDGE JOHN G. HEYBURN II, CHAIRMAN, 
            COMMITTEE ON THE BUDGET OF THE JUDICIAL 
            CONFERENCE OF THE UNITED STATES
ACCOMPANIED BY:
        JUDGE M. BLANE MICHAEL, MEMBER, COMMITTEE ON THE BUDGET OF THE 
            JUDICIAL CONFERENCE OF THE UNITED STATES
        LEONIDAS RALPH MECHAM, DIRECTOR, ADMINISTRATIVE OFFICE OF THE 
            UNITED STATES COURTS, AND MEMBER, EXECUTIVE COMMITTEE OF 
            THE JUDICIAL CONFERENCE OF THE UNITED STATES

    Senator Hollings. We also have Judge Michael of the Fourth 
Circuit and Mr. Mecham from the Administrative Office of the 
Courts.
    Judge Heyburn, we will be happy to hear from you at this 
time, sir.

                            OPENING REMARKS

    Judge Heyburn. Thank you very much, Mr. Chairman, Senator 
Gregg. It is my very great pleasure to appear before a 
committee of Congress now for the sixth year and represent and 
present the judiciary's appropriation request.
    As Justice Kennedy indicated, these sessions really never 
cease to remind me of the majesty as well as the delicacy of 
our Nation's Constitution. The Founding Fathers created an 
independent judiciary to protect the rights of all of our 
citizens, to enforce the laws that you enact, and to mediate 
the disputes between ordinary citizens, States, and our 
national government. I appear before you today to share with 
you the resource requirements that we believe are necessary to 
do exactly that job that the Founding Fathers had in mind.
    I am pleased to have with me Judge Blane Michael from the 
Fourth Circuit and the great State of West Virginia, and Ralph 
Mecham, as you know, the Director of the AO from the great 
State of Utah. They will be pleased to answer any of your 
questions, as I will.
    First, I want to thank you very much for the consideration 
in the appropriation that you gave the judiciary last year and 
to also thank your staff for the cooperative way that they have 
been working with our staff in helping us to answer the 
questions that you have pertaining to our request. We believe 
that process is absolutely vital and we are here to work 
cooperatively with you.
    I look forward to answering any questions that you have 
about specific parts of our request. But before I have that 
opportunity, I want to make just a couple of comments 
emphasizing our primary commitments.
    First, we do have a commitment, and I have a commitment, to 
try to explain and give you all the information necessary to 
make as clear as possible what we are asking for and why we 
need it. For fiscal year 2003, we are asking for an additional 
$500 million, and whether you are from Washington, Kentucky, 
South Carolina, or New Hampshire, that is a lot of money. We 
recognize that, even though, of course, it is a small amount 
compared to the entire Federal budget.
    But, we believe that the increase is necessary to handle 
the judiciary's additional workload--a workload, I might add, 
that is largely uncontrollable. It is thrust upon the court in 
a variety of different ways: whether it is additional criminal 
cases; whether it is providing counsel for indigent defendants, 
who are an increasingly large percentage of those indicted for 
Federal crimes; whether it is to fund probation officers to 
take care of the increasing numbers of persons who are on 
Federal probation, or supervised release; or, whether it is 
providing for the increased security needs that we all feel 
post-9/11.
    Second, we have a commitment to the stewardship of the 
funds that you give us each year and we take that stewardship 
very, very seriously. We do that by developing staffing 
formulas that try to objectively quantify the personnel needs 
that we have. We do that by encouraging teleconferencing and 
long distance learning, as opposed to travel, for court staff 
for educational purposes. We do that by trying to redeploy the 
resources that you give us to the proper places, or the proper 
court units, as technology changes. We do that by trying to 
determine and enforce standards for court buildings so that 
they are uniform and adequate. And, we are constantly looking 
for ways that we can be better stewards of the funds that you 
give us.
    We know we do not have all the answers. In hearings such as 
this in the past, both before the House and the Senate, we hope 
that you believe we have been receptive to your ideas, because 
again, we know we are not the final answer to all the difficult 
problems that we face.
    We know the budget is tight again this year as it has been 
in the past, but we are confident that we can do a good job 
with the funds you give us. We are one of the few entities that 
actually returns funds for use in a subsequent fiscal year. In 
fact, in this budget, we have already identified $100 million 
in what we term as carryover. It is not money in hand, but we 
try to identify for you as early as possible funds which we 
believe will be saved in the course of our normal operations 
and we have already identified $100 million. That is $100 
million that you do not have to appropriate out of your fiscal 
year 2003 allocation of funds.
    So we are looking forward to working with you. As Justice 
Kennedy said, it truly is an independent judiciary that sets 
apart our country in so many ways from the rest of the world. 
As an institution, we are a pretty conservative lot, I must 
say. We do not go out and create cases or look for cases. We 
wait for the cases to be brought before us and then we decide 
them, and that is how we do justice, one case at a time. And 
hopefully, the mosaic of those cases, we can all be proud of, 
and not just the decisions we agree with. We can all disagree, 
of course, with an individual decision, but it is the way we go 
about it and the trust that we place in individual justices and 
judges and the responding trust that we receive from the public 
that makes our country so special and unique.
    We create justice in many, many ways, enforcing our laws 
for the poor and the rich, and for people of all colors. We do 
it by talking to jurors and making them feel good about their 
public service and making them understand their role. We create 
justice by sentencing criminals who are dangerous to prisons. 
We do that by working with probation and pretrial services 
officers to give people who might benefit from a second chance 
another opportunity to start on the path of a law-abiding life 
instead of one of crime and prison. We do that by safeguarding 
our freedom of religion, our freedom of speech, enforcing the 
laws against discrimination, and preserving our equal rights.

                          prepared statements

    Chairman Hollings, Senator Gregg, we present to you today 
the budget that we believe is necessary to do all those things 
and we look forward to working with you.
    [The statements follow:]
           Prepared Statement of Honorable John G. Heyburn II
                              introduction
    Chairman Hollings, Senator Gregg, and Members of the Subcommittee, 
thank you for giving me the opportunity to testify on the judiciary's 
fiscal year 2003 budget request. With me today are Judge M. Blane 
Michael, Judge of the United States Court of Appeals for the Fourth 
Circuit; and Leonidas Ralph Mecham, Director of the Administrative 
Office of the United States Courts, who is also the Secretary of the 
Judicial Conference and a member of its Executive Committee.
    Before addressing our fiscal year 2003 budget request, on behalf of 
the entire judiciary I want to express our sincere appreciation for the 
generous funding levels provided to the judiciary for fiscal year 2002. 
Faced with responding to both the need for additional resources due to 
the terrorist and anthrax attacks and continuing fiscal pressure, the 
Congress was able to provide significant resources for several of the 
judiciary's highest priorities. While we did not receive funding for 
all the new probation and pretrial services positions and clerks' 
office positions, you provided funding for a significant increase in 
the hourly rates paid to private panel attorneys representing 
defendants who cannot afford to pay for their representation; the 
judiciary's highest priority security needs; the first installment on 
the renovation of the Supreme Court building; and a COLA for judges. 
Although we did not get all the funding we requested, we are very 
grateful that you and your dedicated staff worked with us to fund our 
most pressing needs.
                            budget overview
    The judiciary's fiscal year 2003 request totals $5.2 billion, a 
10.7 percent or $507 million increase over available fiscal year 2002 
appropriations, including the emergency counterterrorism supplemental 
funding. Three quarters of this requested increase ($375 million) is 
required to continue current operations such as pay and benefit 
adjustments, inflationary adjustments, increases in GSA space rental 
costs, an increase in filled Article III judgeships, and continuation 
of the enhanced security measures taken since the terrorist and anthrax 
attacks. The remainder ($132 million) is requested for programmatic and 
workload related needs such as: additional bankruptcy court staff to 
process an all time high number of bankruptcy filings; additional 
probation staff to supervise a record number of offenders released from 
prisons and living in our communities; and an increase in district 
court staff to handle the projected growth in criminal filings as the 
number of Department of Justice prosecutors continues to grow.
    In addition to the funds requested, the judiciary has identified 
$129.8 million required to implement the Administration's proposed 
legislation to shift the full cost for selected retirement benefits for 
current employees from the Office of Personnel Management to each 
individual agency. If this legislation is enacted, the judiciary would 
require a total appropriation of $5.4 billion. A detailed explanation 
of our fiscal year 2003 request is included as an Appendix to this 
statement.
                  impact of the september 11th attacks
    An independent judiciary that all citizens trust and respect, which 
can fairly and expeditiously dispense justice and resolve citizens' 
disputes, is a fundamental tenet of our nation. The events of September 
11th, and the anthrax incidents that followed, tested the judiciary's 
ability to maintain the high quality of justice our country deserves. I 
am pleased to report that the men and women of the Third Branch came 
together in a remarkable show of pride, teamwork, and patriotism to 
make certain that the work of the judiciary continued unabated.
    In New York City, the 2nd Circuit Court of Appeals, the Court of 
International Trade, and the district and bankruptcy courts, probation 
and pretrial services offices, and federal public defender offices for 
the Southern District of New York are all located within a few blocks 
of the World Trade Center. The judiciary thankfully suffered no 
casualties as a direct result of the attacks. The attacks resulted in 
some facility damage, a disruption in court operations, ongoing air 
quality issues and exerted untold emotional stress on court employees. 
However, with the assistance of judiciary staff across the country, 
especially those in the Eastern and Northern Districts of New York, the 
District of New Jersey, and the Eastern District of Pennsylvania, these 
courts were able to continue to function. For example:
  --Pretrial services officers from New York Eastern and New Jersey 
        provided office space and telephones. They assisted in home 
        confinement/electronic monitoring by following up on alerts for 
        86 defendants. In many cases, because streets were closed to 
        vehicles and the subway was not operational, officers walked to 
        appointments with defendants.
  --The bankruptcy court, which was using the judiciary's new case 
        management/electronic filing system, was up and running within 
        hours after court executives contacted the Administrative 
        Office to receive electronic backups.
  --The 2nd Circuit Court of Appeals heard oral arguments at the 
        Association of the Bar of the City of New York while awaiting 
        permission to move back into its courthouse.
  --District Court Clerks offices' staff in the Eastern District of 
        Pennsylvania, the District of New Jersey, and the Northern 
        District of New York volunteered to travel to the Southern 
        District of New York to assist with various processing 
        functions that were delayed due to the attacks.
                     impact of the anthrax attacks
    The anthrax attacks also had a significant impact on the judiciary. 
The most dramatic was the evacuation and temporary closing of the 
Supreme Court building. The Court continued to hear arguments at the 
ceremonial courtroom in the District of Columbia E. Barrett Prettyman 
United States Courthouse. Examples of other impacts on the judiciary 
include: finding alternative ways to receive time sensitive case 
materials from prosecutors, defendants, and civil litigants without 
utilizing the U.S. mail; receiving juror qualification questionnaires 
without relying on the U.S. mail to ensure that adequate numbers of 
jurors were available to continue trials; significantly scaling back on 
the Administrative Office's use of the U.S. mail to communicate with 
the courts and relying almost exclusively on electronic communications 
via the judiciary's nationwide Data Communications Network; and 
responding to anthrax hoaxes to ensure the safety of court facilities.
                         long-term implications
    In response to the terrorist attacks, the judiciary is taking steps 
to protect against future incidents that could disrupt the operations 
of the judiciary. These steps include heightened security, the 
development of a nationwide continuity-of-operations plan, studying the 
feasibility of establishing a court operations center located outside 
of Washington, D.C., and the continued use of technology to decrease 
the courts' reliance on mail to perform routine business (i.e., the 
electronic filing of documents, electronic noticing, and processing 
juror questionnaires).
    Also in the long-term, the workload of the judiciary is expected to 
increase. As additional resources are provided to the various law 
enforcement agencies of the Department of Justice and additional 
Assistant U.S. Attorneys are hired to combat terrorism, the result will 
be continued growth in the workload of the judiciary. Any number of 
high profile trials could result from prosecutions already known or 
probable. These cases will cause increased security and defense 
expenditures. Our budget request does not specifically take into 
account these potential trials. However, we will monitor the costs of 
these proceedings so that Congress and the public can be kept informed.
                          heightened security
    Since the September 11th attacks, the judiciary has significantly 
enhanced security at judiciary facilities. The additional resources 
appropriated by Congress in the fiscal year 2002 emergency supplemental 
will enable the judiciary to maintain the level of court security 
officer (CSO) coverage recommended by the U.S. Marshals Service, 
procure upgraded X-ray machines for courthouse loading docks and 
mailrooms, create 106 new deputy marshal positions to coordinate 
security in each circuit and district, begin to address the mail 
handling and screening needs of the courts, and provide increased 
protection both for CSOs and court facilities, especially those with 
high-profile terrorist cases.
    The judiciary's budget request for Court Security totals $298 
million and will continue the current higher level of security in the 
courts for fiscal year 2003. The request is $1.4 million below our 
fiscal year 2002 spending plan and takes into account non-recurring 
funding for security systems provided in the emergency supplemental. 
Working with the U.S. Marshals Service, the judiciary will continue to 
evaluate its security needs and will keep the Committee informed of our 
requirements.
    While not part of the judiciary's budget request, the Marshals 
Service is responsible for the security of courthouses, judges, 
criminal proceedings, and the transportation and security of prisoners. 
The impact of the war on terrorism and the growing number of criminal 
cases has had a dramatic impact on the resource needs of the Marshals 
Service. The dedication and professionalism which the men and women of 
the Marshals Service have displayed since the September 11th attacks 
has been immeasurable. The judiciary appreciates that you were able to 
provide the Marshals Service with significant funding increases in 
fiscal year 2002.
    We hope that in fiscal year 2003 the Committee will be able to 
continue to provide the Marshals Service with additional staff for 
protection of the judicial process. In districts such as the Southern 
District of Florida and those along the southwest border, the number of 
defendants detained by the Marshals Service has grown dramatically in 
recent years, and additional deputy marshals are desperately needed to 
secure these potentially dangerous defendants. Additional deputy 
marshals are also needed for counterterrorism efforts associated with 
the terrorist-related cases the courts are currently hearing and 
additional cases that may be heard in the future. We encourage you to 
provide the Marshals Service the necessary resources to support their 
judicial protection responsibilities.
         impact of additional assistant u.s. attorneys (ausas)
    Over the past few years, additional resources have been provided to 
the U.S. Attorneys to increase gun prosecutions, promote school safety, 
combat cyber crime, and establish joint terrorism task forces. As the 
number of AUSAs continues to grow to address the priorities of Congress 
and the Administration, workload in the judiciary will continue to 
grow. The potential growth in criminal filings that could result from 
additional AUSAs has a far-reaching impact on the judiciary. Additional 
criminal cases brought to federal courts require additional judges to 
hear cases, court staff to administer them, pretrial services officers 
to supervise defendants released in our communities while awaiting 
trial, court-appointed counsel to represent additional defendants, and 
more probation officers to prepare presentence reports and supervise 
offenders released from prison serving their mandatory terms of 
supervised release.
                          court support staff
    The work of the judiciary is largely uncontrollable. The courts 
must handle whatever number of civil, criminal, or bankruptcy cases are 
filed, fairly and expeditiously. The judiciary cannot control the 
number and length of trials, the resulting number of jurors, and the 
number of defendants requiring representation. The courts also are 
unable to control the number of offenders serving a term of supervised 
release or defendants awaiting trial who require supervision. In order 
to ensure resources are deployed to match workload demands, the 
judiciary has developed scientifically-derived staffing formulas that 
are used to construct the budget request and allocate funding to court 
clerks' offices and probation and pretrial services offices. Each court 
program (courts of appeals, bankruptcy courts, district courts, and 
probation and pretrial services) has its own formula which takes into 
account the individual workload drivers for the functions performed by 
these offices.
    The staffing formulas were updated in the summer of 2000 after 
completion of an extensive series of analytical studies of the work 
performed in clerks' offices and probation and pretrial services 
offices. The formulas are used to determine the level of resources 
needed to allow the judiciary to provide a consistent level of service 
to the bench, bar, and the public, taking into consideration upward and 
downward changes in workload. As filings and other workload drivers 
fluctuate from year to year, the application of the formulas to 
individual court units allows for a corresponding increase or decrease 
in funding allocations. This allows the judiciary to ensure that 
resources are allocated equitably to all court units based on their 
individual workloads.
    Although the courts' workload continues to increase in fiscal year 
2002 the judiciary was unable, due to funding constraints, to fund 
fully its staffing formulas. The judiciary was able to provide some 
additional law enforcement resources only to probation and pretrial 
services offices where workload is increasing the most.
    In fiscal year 2003, the budget requests funding for 1,297 
additional FTEs to fund fully the courts' fiscal year 2002 and 2003 
workload requirements (461 FTEs for probation and pretrial services and 
836 FTEs for clerks' offices). Without sufficient staff, judicial 
processes are short-changed, civil and bankruptcy cases are delayed, 
support provided to judges and the public deteriorates, and offenders 
and defendants living in our communities are not adequately supervised.
                    probation and pretrial services
    Federal probation and pretrial services officers protect the public 
through the investigation and supervision of defendants and released 
offenders within the federal criminal justice system. A pretrial 
services officer supervises defendants awaiting trial who are released 
into our communities and provides a source of information upon which 
the court can determine conditions of release or detention while 
criminal cases are pending adjudication. To support sentence 
determinations, which require both uniformity and attention to 
individual circumstances, probation officers provide the court with 
reliable information concerning the offender, the victim, and the 
offense committed, as well as an impartial application of the 
sentencing guidelines. Probation officers supervise offenders coming 
out of federal prison who are required to serve a term of supervised 
release. Many of those under supervised release have substance abuse 
and mental health conditions.
    In order to highlight the vital role played by these dedicated 
officers, I would like to offer an example of an incident where a 
probation officer went the extra mile in preparing a presentence report 
for the judge.

    In March of 2001, a probation officer from the Northern District of 
California was assigned a presentence report of a case where the 
defendant pled guilty to Conspiracy to Bring Aliens Into the United 
States Illegally, Transportation of Minors in Foreign Commerce for 
Illegal Sexual Activity, and Subscribing to False Tax Returns. The case 
came to the attention of authorities when a minor female died of carbon 
monoxide poisoning in one of the defendant's apartment complexes. 
Further investigation revealed that this female and other minor females 
were illegal aliens who had been smuggled into the United States with 
fraudulent visas. The defendant began having sexual relations with many 
of the victims when they were as young as 11 years old.
    The probation officer left no stone unturned in preparation of the 
presentence report. She interviewed each agency involved, including the 
city attorney's office, the Immigration and Naturalization Service, the 
American Civil Liberties Union-Immigration Rights Project, the victims' 
civil attorney, the Internal Revenue Service, and the mental health 
professionals who were working with the victims. It was through these 
interviews that the probation officer determined the extent of the 
psychological injuries to the victims.
    The probation officer's presentence report to the Court recommended 
that the Court depart upward due to the extreme psychological injury to 
the victims. This upward departure was not part of the plea agreement, 
and became a point of contention at the sentencing hearing. The judge 
believed there was evidence to support this factor and agreed that an 
upward departure of two levels was warranted on that basis. The 
attorneys agreed to revise the plea agreement to include the upward 
departure. The defendant was ultimately sentenced in accordance with 
all of the factors that were presented and supported through the 
probation officer's extraordinary investigation.

    The mission of our probation and pretrial services officers is not 
only to protect the public by supervising the activities of offenders 
and providing information to the court but it is to help offenders and 
defendants get back on their feet and integrate back into our 
communities. For example:

    In the Western District of Kentucky, an offender recently released 
from prison entered the probation office and experienced an emotional 
breakdown because his proposed housing had fallen through. With the 
help of a probation officer, the offender was admitted to a Crisis 
Invention Unit where the offender lived and received emotional 
counseling for several months. While the offender was admitted, the 
probation officer helped the offender apply for Social Security 
benefits and food stamps. The officer also helped the offender secure 
an apartment, which he was able to pay for using his Social Security 
benefits. The offender is now living on his own, receiving bi-monthly 
counseling sessions, and is in total compliance with the terms of his 
release.

    These are only two examples of the dedication and commitment that 
each employee of the Third Branch brings to the job.
    In fiscal year 2001, probation and pretrial services officers 
supervised a record number of offenders and defendants (139,797) living 
in our communities. This is above the federal prisoner population and 
is projected to continue to grow in fiscal year 2002 and fiscal year 
2003 as the number of offenders released from federal prisons continues 
to increase.
    The fiscal year 2003 budget requests 461 additional probation and 
pretrial services FTEs to provide the additional staff required to 
manage this growing workload. Without the additional resources needed 
to manage their growing workloads, probation and pretrial services 
officers will be unable to maintain their high level of service to the 
community. Without adequate staffing, officers will focus most of their 
efforts supervising those persons they believe to be the most dangerous 
felons released from federal prison, while reducing the level of 
supervision over other released offenders who appear to be less 
dangerous, but may still pose a threat to the community. In addition, 
the officers would be unable to devote sufficient time to prepare 
sentencing recommendations to the court and helping struggling 
offenders in need of assistance.
                          clerks' office staff
    The fiscal year 2003 budget also requests 836 FTEs to support the 
operations of the courts. This includes 494 FTEs for bankruptcy courts 
to handle the explosive growth in bankruptcy filings. In fiscal year 
2001, bankruptcy filings were a record 1,437,354 and they are projected 
to continue to increase. The long term impact of insufficient staffing 
in bankruptcy clerks' offices will be seen in longer disposition times, 
more case management errors, and reduced level of service to the judges 
and the bar. Ultimately this will negatively affect both debtors and 
creditors.
    The request also includes 289 FTEs for district courts where the 
number of criminal defendants is projected to increase by 9 percent in 
fiscal year 2002 over fiscal year 2001. This anticipated growth in 
criminal workload reflects the projected increases in the number of 
cases the U.S. Attorneys offices will be able to prosecute given their 
recent increases in funding. Without additional staff to process this 
extra work, we can expect delays in civil filings and decreased service 
to the bench, bar, and public.
    Finally, the request includes 53 FTEs to support circuit courts of 
appeals where between fiscal year 2000 and fiscal year 2001, appeals 
increased by 5 percent.
                           defender services
    The Sixth Amendment to the U.S. Constitution provides that ``in all 
criminal prosecutions, the accused shall enjoy the right . . . to have 
the assistance of counsel for his defense.'' In enacting the Criminal 
Justice Act of 1964, Congress charged the federal judiciary with 
responsibility for providing counsel in connection with federal 
criminal prosecutions and related matters and authorized a separate 
Judiciary account the Defender Services appropriation to pay for these 
appointed counsel services.
    As is true of the Judiciary's workload generally, the demand for 
appointed counsel services is not within the Judiciary's control. Both 
the number and complexity of cases in which counsel must be appointed 
are a function of both decisions made by the Department of Justice and 
the criminal laws and related statutes enacted by the Congress.
    The substantial rate increase you provided for fiscal year 2002 
will go a long way toward ensuring that competent counsel are available 
to meet the demands. I not only want to reiterate and re-emphasize how 
much this milestone is appreciated by those of us in the Judiciary 
responsible for managing the appointed counsel process, but also to let 
you know that panel attorneys from around the country have asked that 
we convey to you directly their appreciation for what you have done. At 
a time when the world's attention is likely to be focused on our 
federal criminal justice system, we believe that this increase will 
have a meaningful, positive impact on how well that system operates.
    Excluding funding for panel attorney rate increases, we are seeking 
only a modest increase for Defender Services in fiscal year 2003 to 
cover workload growth and inflationary increases. Defender Services 
obligations are projected to grow by just 7.6 percent in fiscal year 
2003. Half of this growth is associated with the need to provide 
representation in the greater number of criminal matters that are 
expected to be filed in fiscal year 2003 than in fiscal year 2002. The 
remainder is needed to fund inflationary increases and mandatory pay 
and benefit adjustments.
          cost containment and the judiciary's budget process
    The Constitution created the judiciary as a separate and 
independent branch of government. One of the by-products of the 
distinction as a separate branch, is the judiciary's authority to 
submit its budget request to Congress through the President ``without 
change'' by the executive branch. 31 U.S.C. Sec. 1105(b).
    The judiciary takes this authority seriously. The Judicial 
Conference of the United States recognizes that the responsibility for 
budgetary oversight requires stewardship and fiscal responsibility in 
both providing for the judiciary's requirements while considering the 
needs of the nation. The Judicial Conference established a Committee on 
the Budget, of which I am the Chairman, to assemble and present to 
Congress the budget for the judicial branch. In response to a request 
from the Congress, the Judicial Conference determined that the Budget 
Committee's jurisdiction should be expanded to include an Economy 
Subcommittee responsible primarily for: (1) coordinating efforts of the 
judiciary to achieve fiscal responsibility, accountability, and 
efficiency; (2) advising the Budget Committee on development of 
fiscally responsible budget estimates; and (3) coordinating the 
development of reliable long-range budget estimates. The Budget 
Committee continues to meet each of these objectives.
    With the assistance of the professional staff at the Administrative 
Office who support the committees of the Judicial Conference, the 
Economy Subcommittee and the Budget Committee analyze and debate the 
budget requests of the various program committees of the Judicial 
Conference. After intensive review, the Budget Committee recommends a 
budget request to the Judicial Conference that balances both the 
judiciary's responsibility to request sufficient funding to effectively 
operate the courts and the judiciary's duty as stewards of the public's 
funding.
    In addition to the annual review of the budget request by the 
Budget Committee, the judiciary on a regular basis retains outside 
consultants to evaluate independently our financial and operational 
requirements and identify areas for improvements and efficiencies. 
While these studies are sometimes undertaken at Congress' behest, more 
often the judiciary itself initiates these reviews. Over the past few 
years, under the leadership of the Administrative Office, independent 
consultants have evaluated the courts' space and facilities program, 
the information technology program, the library services program, and 
the court security program. Currently, the judiciary is conducting a 
comprehensive assessment of the probation and pretrial services system. 
Upon completion of these independent program studies, the 
Administrative Office and the applicable committees of the Judicial 
Conference review the results and implement program changes to improve 
the level of service provided by the courts and make the courts more 
efficient.
    While the judiciary is working at the national level to review 
budget requests and conduct independent program reviews, we, with the 
assistance of the Administrative Office, also are working at the local 
level to ensure that the funding you provide us is spent efficiently. 
Chief judges and unit executives receive training on the financial 
responsibilities of operating their court; local court unit financial 
analysts are trained in budget and accounting; and Administrative 
Office staff conduct court audits and program assessments that help 
court managers improve the management of their resources. These efforts 
are done to ensure that every court--from the large urban courts to the 
small rural courts--is effectively managing the funding provided to the 
judiciary.
               contributions of the administrative office
    As I discussed earlier, the Administrative Office plays a pivotal 
role in the budgeting and management of the funding you provide the 
judiciary. It not only performs important administrative functions such 
as personnel, payroll, procurement, space management and planning, and 
accounting, but also provides a broad range of legal, financial, 
management, program, and information technology services to the courts. 
The Administrative Office, under the direction of the Judicial 
Conference, is the manager of change in the judiciary. This change 
includes: implementing throughout the courts modern automated systems, 
such as personnel, accounting, library services, jury management, and 
case management; and expanding the use of technologies to assist in the 
supervision of offenders and defendants.
    The Administrative Office was also instrumental in providing direct 
support to the courts to restore operations, upgrade security and 
facilitate new mail handling procedures, after the events of September 
11. The exemplary performance was commended in a letter I read from the 
Chief Judge of the Southern District of New York. He recognized the 
Administrative Office for the resource and personnel help that enabled 
the court to carry on its business while bearing the burdens of 
September 11.
    I urge the Committee to fund fully the Administrative Office's 
budget request including its modest request for eight additional FTEs. 
The Administrative Office is integral to the judiciary's ability to 
perform its work. Without the Administrative Office's support, the 
judiciary could not continue to improve its efficiency. The increase in 
funding will ensure that the Administrative Office continues to provide 
program leadership, policy guidance, and administrative support to the 
courts, and to lead the efforts for them to operate efficiently.
              contributions of the federal judicial center
    The Federal Judicial Center is the federal judiciary's education, 
training, and research arm. With Judge Smith, I thank you for last 
year's programmatic increase, the first such increase in over ten 
years, and only the second full current services increase in the same 
period. We are grateful.
    The Center is vital to our work as judges, and a main element of 
its modest 8.7 percent increase this year involves education for 
judges. I want also to recognize the Center's education for the 
employees in our clerks, probation, and pretrial offices in these 
troubled times of employee unease and uncertainty. Center management 
training, almost all of it offered by satellite and on the web, has 
never been more important and highlights the need for the three 
educational technology positions the Center requests.
    Center education is also vital to our work as judges. The Center 
seeks an increase of $500,000 to allow it to restore its basic judicial 
continuing education programs to an annual basis. Since 1999, the 
Center's reduced appropriation has meant that district, magistrate, 
bankruptcy, and appellate judges may attend one of these seminars no 
more than once every eighteen months. This cutback has been a matter of 
great concern to judges over the country. The Board of the Center took 
the unusual step of adding its own statement to supplement Judge 
Smith's justification for this increase.
    These programs provide updates on caselaw trends, on innovations in 
managing cases, and on such specialized topics as admissibility of 
scientific evidence. Furthermore, we can share notes with colleagues 
from other courts as well as with the excellent faculty that the Center 
assembles. I believe the Center's request deserves the committee's 
support and urge favorable action on the full amount.
                         judicial compensation
    Before closing, I would like to express our appreciation for 
Congress' approval of a fiscal year 2002 Employment Cost Index (ECI) 
adjustment for federal judges, members of Congress and top officials in 
the executive branch. The Judicial Conference strongly encourages 
Congress to authorize an ECI adjustment for fiscal year 2003, which 
will require a provision to waive section 140 of Public Law 97-92. 
While the law provides for a 3.1 percent increase, the President's 
Budget reduces this adjustment to a maximum 2.6 percent increase. We 
urge that Congress take action this year to avoid further salary 
erosion.
                               conclusion
    Chairman Hollings and members of the subcommittee, this concludes 
my statement. I look forward to working with you and I would be pleased 
to respond to any questions you may have.
                                Appendix
                                summary
    The fiscal year 2003 appropriation request for the Courts of 
Appeals, District Courts and Other Judicial Services totals 
$4,961,693,000, an increase of $507,705,000 over the fiscal year 2002 
available appropriations which included $82,221,000 in emergency 
supplemental funding. In addition to appropriated funds, the judiciary 
utilizes other funding sources to supplement its appropriations. 
Included in these sources of funding are fee collections, carry forward 
of fee balances from a prior year, and the use of no-year funds.
    Of the $507,705,000 increase in appropriations, 75 percent 
($382,134,000) is for adjustments to the fiscal year 2002 base 
associated with standard pay and other inflationary increases as well 
as other adjustments that will allow the courts to maintain current 
services in fiscal year 2003. The remaining 25 percent ($125,571,000) 
is needed to respond to continued increases in the courts' workload, as 
well as increased requirements for security, magistrate judges, and 
federal defender offices. 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 
the judiciary's request. A total of $4,304,243,000 is required for this 
activity. Funding totaling $287,352,000 is expected to be available 
from other sources including fee collections and carryforward balances 
to fund requirements. This leaves a direct appropriation need of 
$4,016,891,000, $409,603,000 above the fiscal year 2002 available 
appropriation which included $5,000,000 in emergency supplemental 
funding.
    Nearly 72 percent of the $409,603,000 increase ($294,157,000) is 
needed to fund adjustments to the fiscal year 2002 base for pay and 
benefits increases for courts support staff ($115,100,000), pay and 
benefits increases for judges ($9,881,000), the filling of vacant 
judgeships and increases in senior judges ($13,887,000), additional 
space rental costs ($80,784,000), additional information technology 
costs ($23,143,000), financing adjustments necessary to maintain 
current services ($39,655,000), and inflationary increases in other 
operational costs ($11,707,000).
    The remaining increases ($115,446,000) will fund 7 additional 
magistrate judges and their staff ($2,163,000) 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; 
additional court support staff ($102,727,000) to allow the courts to 
keep pace with increases in its largely uncontrollable workload; 
enhanced mail handling facilities and services ($10,000,000) to improve 
security in mail room operations; medical examinations for probation 
and pretrial services officers ($200,000); and distance learning and 
web-based training initiatives ($356,000).
                           defender services
    A total of $588,741,000 in appropriations is required for the 
Defender Services program to provide representation for indigent 
criminal defendants in fiscal year 2003. This represents an increase of 
$88,070,000 over the fiscal year 2002 enacted appropriation of 
$500,671,000.
    Most of the increase ($87,470,000) is needed for adjustments to the 
fiscal year 2002 base for inflationary and workload increases. Included 
in these adjustments is $18,087,000 for costs associated with 
maintaining the base level of representations; $30,066,000 to annualize 
the fiscal year 2002 non-capital private panel attorney rate increase 
to $90 per hour; $17,142,000 to increase private panel attorney rates 
to $113 per hour in all districts beginning April 1, 2003; and a 
$22,175,000 net increase associated with 6,300 additional 
representations projected in fiscal year 2003.
    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 us 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, an appropriation of $57,826,000 is 
required, an increase of $9,695,000 from the fiscal year 2002 enacted 
appropriation of $48,131,000. This increase funds inflationary 
adjustments ($450,000); a net decrease in projected juror days 
(-$878,000); and financing adjustment required to avoid a cessation of 
civil jury trials ($10,123,000).
                             court security
    For the Court Security program, an appropriation of $298,235,000 is 
required. This is a $337,000 increase over the fiscal year 2002 
available appropriation of $297,898,000 which included $77,221,000 in 
emergency supplemental funding.
    Adjustments to base include increases of $33,412,000 including 
standard pay, benefit, and contractual services increases 
($13,273,000); funding to annualize the costs for new deputy U.S. 
Marshals funded through the emergency supplemental ($9,800,000); 
funding to annualize 24 new court security officers (CSOs) expected to 
be brought on in fiscal year 2002 ($584,000); funding for increases 
associated with new and existing space including 10 new CSOs and 
security systems and equipment ($2,266,000); and funding for the 
cyclical replacement of existing security systems and equipment 
($7,489,000). These increases are offset by a decrease of $42,600,000 
for non-recurring costs that were funded with emergency supplemental 
appropriations in fiscal year 2002. This results in an overall net 
reduction in funding for base adjustments of $9,188,000.
    The remaining increase ($9,525,000) is for program increases. These 
include $8,656,000 for security systems and equipment enhancements, 
$550,000 for CSO and contracting officer technical representative 
training programs, and $319,000 (4 FTE) for additional judiciary-funded 
positions at the U.S. Marshals Service to improve the management of the 
Judicial Facility Security Program.
                                 ______
                                 
              Prepared Statement of Leonidas Ralph Mecham
                              introduction
    Chairman Hollings, Senator Gregg, and Members of the Subcommittee: 
I am pleased to appear before you this morning to present the fiscal 
year 2003 budget request for the Administrative Office of the United 
States Courts (AO). I appreciate this opportunity and your time.
    Let me first take a moment to thank you for your help in conference 
on the fiscal year 2002 appropriation for the AO. Your support was 
critical in allowing us to maintain our current level of service to the 
courts, and for this I am grateful. I also want to express my 
appreciation for your leadership in providing the judiciary with the 
fiscal year 2002 emergency supplemental security funding necessary to 
address some of the most pressing requirements we identified in the 
aftermath of September 11th and the anthrax exposures that followed. 
Without the assistance of this Subcommittee, we would not have received 
the additional resources to heighten mail and building security across 
the country; purchase an emergency communications backup system to 
ensure that judges and court administrators can maintain contact with 
the AO, the U.S. Marshals Service, and General Services Administration 
personnel during emergency situations; or improve the physical security 
of the Thurgood Marshall Federal Judiciary Building. Your attention to 
the needs of the judiciary, and the focus of your staff, is very much 
appreciated.
                   role of the administrative office
    Created by an Act of Congress in 1939 to eliminate the separation 
of powers issues raised by the Department of Justice's handling of the 
judiciary's administrative needs, the Administrative Office of the 
United States Courts serves as the central support agency for the 
federal court system, with key responsibility for judicial 
administration, program management, and oversight.
    As such, the AO is the focal point for judiciary communication, 
information, program leadership, and administrative reform. Our court 
administrators, accountants, systems engineers, analysts, architects, 
lawyers, statisticians, and other staff provide professional services 
to meet the needs of judges and staff working in the federal courts 
nationwide.
                  response to 2001 terrorism incidents
    Nowhere was the exemplary service and outstanding abilities of the 
Administrative Office staff more evident than in its response to the 
terrorist events of September 11, 2001. Calling upon the judiciary's 
existing disaster response group formed in 1992 after Hurricane Andrew, 
within hours of the World Trade Center attacks, we assembled an 
emergency response team to work with court staff in New York City to 
facilitate recovery of communications and computer systems and return 
the courts to normal operations as soon as possible.
    The emergency response team assisted the courts in acquiring 
cellular phones, rerouting e-mail and computer networks, resolving 
procurement issues and ensuring that employees were paid accurately and 
on time. The team also kept court employees and the public posted on 
the status of operations in New York on the judiciary's Internet site.
    The anthrax contaminations that followed soon after, and the 
ensuing mail delays, required a number of adjustments to court 
operations, including the relaxing of rules about the timeliness of and 
the means by which cases and pleadings are filed (i.e., electronic and/
or fax). The mail delays also required finding creative ways of 
ensuring that juror questionnaires were returned in a timely manner, 
guaranteeing that sufficient juror pools would be available to continue 
trials.
    In addition, the threat posed by contaminated mail required the AO 
to reduce significantly paper mailings to the courts and enhance the 
use of our nationwide Data Communications Network. The AO expanded its 
already widely used e-mail broadcast system and created a series of 
electronic mailing lists to target particular court audiences. The use 
of these broadcasts went beyond simple letter communications and 
included the distribution of documents via the judiciary's intranet. AO 
employees are continuing to rely heavily upon e-mail messages, e-mail 
broadcasts, faxes, and postings to the judiciary's intranet for 
communications with court staff. Fortunately, the judiciary's 
investment in information technology, made possible through the support 
of this Subcommittee, and the establishment of a nationwide electronic 
infrastructure, positioned us to move more quickly toward electronic 
communication solutions during this crisis.
    AO staff continued assistance by providing information to all 
courts on enhanced security, mail handling, testing for anthrax and 
responding to threats from anthrax and other biological and chemical 
agents. Information was developed and disseminated to highlight health 
and safety concerns such as: how to handle crisis benefit issues, 
including Worker's Compensation and the Employee Assistance Program; 
public health issues; and special information on how to deal with 
trauma in the work place.
    AO staff also coordinated the judiciary's request for emergency 
supplemental funds to provide for additional court security, protective 
window film, upgraded x-ray machines, an emergency communications 
system, heightened mail screening, and other perimeter security 
enhancements for the courts. Working with the Office of Management and 
Budget (OMB) we were provided $19.7 million from funds appropriated to 
the President to cover the cost of increased court security officer 
(CSO) coverage. Then, with your leadership and assistance, the 
judiciary received additional emergency security funds totaling $95.4 
million in the fiscal year 2002 emergency supplemental.
Longer-Term Implications
    As Chief Justice Rehnquist pointed out in his 2001 Year-End Report 
on the Federal Judiciary, the Administrative Office played a pivotal 
role in ensuring that the federal courts around the country have 
effective security precautions and adequate mail screening procedures 
in place. But, as the central support agency for the administration of 
the federal court system, we must now turn our attention to the long-
range planning aspects of crisis response, identify and address our 
vulnerabilities, and determine where changes in court operations are 
necessary in light of these newly recognized threats.
Offsite Court Operations Support Center
    One significant vulnerability is the location of our key 
administrative and operational support systems at the AO in Washington, 
D.C. With the encouragement of this Subcommittee, the AO currently is 
studying the feasibility of opening a court operations support center 
that would provide a separate location outside Washington, D.C. for the 
operation of systems critical to the work of the courts. The Support 
Center also would provide a location from which key personnel could 
operate in the event the Thurgood Marshall Federal Judiciary Building 
were forced to close for any reason. From a national perspective, the 
Support Center would better ensure the continuity of operations of the 
judiciary's information technology infrastructure that supports the 
day-to-day operations of the courts so that justice would continue to 
be served during any situation that might otherwise disrupt normal 
operations.
Continuity of Operations Planning
    Outside of Washington, D.C., courthouses are often the most visible 
and potentially vulnerable federal facilities. Recognizing this threat, 
an emergency preparedness function was established at the AO in 
November 2001 to allow us to better focus on crisis response, occupant 
emergency planning, and continuity of operations planning. We intend to 
develop model continuity of operation plans for use by the courts and 
the AO. The objective of these plans is to ensure the capability exists 
to continue core business functions throughout the courts, and to 
achieve an orderly recovery under all emergency situations.
Acceleration of Move to E-business
    Another vulnerability, discussed earlier, was how the routine 
business of the courts, including the filing of motions and receipt of 
juror questionnaires, was disrupted when mail service became 
unreliable. For the past several years, the judiciary has been 
progressing toward heavier use of electronic means of transacting 
business, including the move toward electronic case filings, as well as 
incorporating e-business into our voucher and bill payment operations. 
The judiciary is considering whether the move toward these systems can 
be accelerated.
Unique Issues Associated with High Threat Trials
    The terrorist threat to our nation also means that the federal 
courts are likely to be the forum for many more highly publicized and 
security-sensitive criminal proceedings. Already we know of three such 
trials upcoming--the Zacarias Moussaoui and John Walker Lindh cases in 
the Eastern District of Virginia and the Richard Reid case in 
Massachusetts. The courts face unprecedented and extraordinary 
challenges involving a wide range of issues, including security 
concerns, information technology, and furnishing closed-circuit 
broadcasts of the proceedings to victims' families. The AO is providing 
support and advice to the courts on all of these issues, as we did in 
the Oklahoma City bombing cases.
    I look forward to working with you and the Members of this 
Subcommittee as we develop more specific plans to ensure that the 
federal courts are safe and readily accessible to the public, and that 
the business of the judiciary can and will continue without disruption 
in the event of a terrorist attack, chemical or biological 
contamination, or natural disaster.
                  administrative office budget request
    The fiscal year 2003 budget request for the Administrative Office 
of the U.S. Courts is $66,912,000, representing an increase of 
$2,369,000, or 3.7 percent above fiscal year 2002 available 
appropriations. However, when the emergency supplemental funding is 
excluded, the fiscal year 2003 increase for the AO is $5,248,000, or 
8.5 percent more than the fiscal year 2002 enacted level. In addition 
to this amount, the AO's budget request identifies $3,947,000 required 
to implement the Administration's proposed legislation to shift the 
full cost of selected retirement benefits for current employees and 
health benefits for retirees from the Office of Personnel Management to 
each individual agency. If this legislation is enacted, the AO would 
require a total appropriation of $70,859,000 in fiscal year 2003.
    More than three-fourths of the requested increase for the AO, 
$4,055,000, is necessary to fund standard pay and benefit cost 
adjustments and general inflationary increases to maintain our current 
level of service to the courts. The remaining increase of $1,193,000, 
which I will describe in greater detail in a moment, is requested to 
strengthen our programmatic oversight role, enhance crisis response, 
security and safety programs, and allow us to fund an increase in the 
transit subsidy benefit for AO employees.
Transit Subsidy
    Pursuant to the Transportation Equity Act for the 21st Century 
(Public Law 105-78), the AO implemented a transit subsidy benefit for 
its employees within available funding in fiscal year 2000. The benefit 
is currently $60 per month with a participation rate of approximately 
50 percent. Executive Order No. 13150 provided for an increase in the 
allowable benefit to $100 per month in January 2002.
    The already limited parking available in and around the Thurgood 
Marshall Federal Judiciary Building has been reduced by the loss of 
parking spaces at Union Station due to security considerations. 
Further, the planned construction of Station Place has eliminated a 
commercial parking lot immediately behind the AO building where many of 
our employees parked. This, coupled with the continuing increase in 
traffic congestion in the Washington, D.C. area, has increased AO 
employee interest in the transit subsidy program. The requested program 
increase of $400,000 will allow us to increase the benefit for AO 
employees to the authorized level of $100 per month and cover the cost 
of an anticipated increase in the participation rate to 60 percent.
AO Staff Support of the Courts
    An increase of $793,000 is requested to provide eight additional 
FTE for program oversight. Continuing to develop new programs and 
systems while supporting a court system whose proportional growth far 
outpaces that of the AO is a daunting task. The staffing level in the 
AO has remained approximately the same over the last six years, while 
court staffing has grown by 15 percent during the same time period.
    To make the most efficient use of the resources provided the AO, 
each vacancy that occurs is evaluated and used to fulfill our highest 
priority needs. However, because sufficient resources must be committed 
to core functions such as payroll, personnel, and financial management, 
and to provide support to the committees of the Judicial Conference, 
program oversight functions are in serious need of additional 
resources. The eight additional FTE we are requesting will enable the 
AO to perform more adequately its audit, review, and assessment 
responsibilities and, as I have detailed in my testimony, the tragic 
events of last fall highlight the need for new resources to staff 
adequately our crisis response, security, and safety programs in 
support of the courts.
                  responsibilities and accomplishments
    As I mentioned earlier, the Administrative Office has key 
responsibility for judicial administration, program management, and 
oversight. It supports the Judicial Conference in determining judiciary 
policies, and develops new methods, systems, and programs for 
conducting the business of the federal courts. The AO also assists the 
courts in implementing better management practices, developing and 
supporting innovative technologies that enhance the operations of the 
courts, and collecting and analyzing statistics on the business of the 
federal courts for planning and determining resource needs.
    It assists the courts in program management, addressing areas such 
as case management, jury administration, defender services, court 
interpreting services, and court reporting. One of our major areas of 
support is probation and pretrial services. In fiscal year 2001, the AO 
assisted the probation and pretrial services offices in supervising a 
record number of offenders and defendants (139,797) living in our 
community at an average cost of $11 per day. This is above the federal 
prison population (120,827), which has an average inmate cost of $55 
per day. The AO also provides financial management services to the 
judiciary including budget formulation, execution, and accounting; and 
personnel and payroll support for 32,000 judiciary employees. It 
supports the facilities and security needs of over 800 facilities 
housing judiciary operations, and conducts audits and reviews to ensure 
the continued quality and integrity of federal court operations.
    Throughout 2001, the AO excelled in its day-to-day 
responsibilities. Let me take a moment to highlight several areas.
Financial Stewardship
    Working with the courts to ensure the efficient and effective use 
of resources is a key AO function. We recognize that it is imperative 
that we do all in our power to ensure that the monies appropriated to 
the judiciary are utilized prudently; assets and resources are 
protected from loss, waste, or abuse; operations are efficient and 
effective; financial reports are accurate and reliable; and business 
practices comply with applicable laws and regulations.
    In fiscal year 2001, the AO undertook an initiative to assist chief 
judges and court unit executives in carrying out their fiscal 
stewardship and management oversight responsibilities. Current 
delegations of authority and other financial controls were reviewed to 
ensure they are documented, up-to-date, and clearly defined. The AO 
also worked to ensure that judges and court managers are provided with 
tools to assist them in their oversight responsibilities. To do this, 
the AO convened a group of judges and court executives to develop 
improved management oversight and stewardship training programs and 
guidance. Seminars for chief district and bankruptcy judges were 
delivered, a Handbook on Management Oversight and Stewardship for chief 
judges and unit executives was published, and a companion educational 
program for court unit executives is being prepared. In addition, a 
task force on internal controls is working to develop a model internal 
control plan for the courts.
Automation
    In the area of automated systems, one of our largest initiatives in 
recent years is the Case Management/Electronic Case Files (CM/ECF) 
project, which permits courts to receive documents over the Internet 
and maintain electronic case filings. We began national roll-out of CM/
ECF in the bankruptcy courts last March and will begin implementation 
in the district courts this spring. More than 12,000 attorneys have 
already filed documents electronically and, in 2001 alone, over 50,000 
people signed up for PACER (Public Access to Court Electronic Records), 
which facilitates all electronic public access to court data, including 
CM/ECF. This new system will save considerable court resources while 
also significantly improving public access to federal court records.
    Also during 2001, AO staff began delivering the Probation and 
Pretrial Services Automated Case Tracking System-Electronic Case 
Management (PACTS-ECM) system to the courts. It is a comprehensive 
system designed to help probation and pretrial services officers by 
making offender case information more easily accessible. The system 
electronically generates, stores, and retrieves investigation and 
supervision case information, and provides digital images of offenders. 
It also will have remote capabilities to allow officer access while in 
the field. The PACTS-ECM system will be an invaluable resource as the 
number of offenders released from Federal prison who are serving terms 
of supervised release escalates.
    Our Bankruptcy Noticing Center had a record-setting year, producing 
and mailing 84 million notices. By electronically retrieving data from 
court case management systems, it generated paper notices at a fraction 
of the time and cost that it would have taken if produced by local 
courts. The work is performed under contract and managed by AO staff. 
This program has saved the judiciary almost $23 million since 1993. We 
are continuing to work with the bankruptcy community to move to an 
electronic noticing system to avoid postage costs.
    And, as detailed in our Report on the Jury System in Federal 
Courts, prepared at the Subcommittee's request and delivered on 
February 1, 2002, the judiciary has also nearly completed implementing 
an electronic Jury Management System that streamlines jury 
administration. At the end of fiscal year 2001, 74 of the 94 district 
courts were using the system, with complete deployment expected by June 
2002.
    In addition to leading the development and installation of these 
automated systems, the AO has managed the installation of modern audio/
visual technologies in new, renovated, and existing courtrooms across 
the nation. These technologies have proved to be useful tools for video 
evidence presentation, video conferencing for presentation of 
testimony, and electronic record-taking.
Policy Guidance
    The AO also provides the courts with policy guidance and direction. 
For example, with the enactment of the DNA Analysis Backlog Elimination 
Act of 2000, probation officers are required to collect DNA samples for 
certain federal offenders. The AO worked with the Department of Justice 
and the Federal Bureau of Investigation (FBI) to determine the type of 
samples required and the qualifying offenses. The AO then distributed 
procedures to all probation offices on how to determine which offenders 
require DNA collection, what steps to take to make the collection, and 
how to pay for the collection. The AO also aired an educational 
broadcast on the Federal Judicial Television Network on the probation 
officers' role in DNA collection and sent the courts instructional 
videos produced by the FBI. Because of the in-depth instruction on this 
new program, DNA collection by probation officers can be done 
consistently across the country to meet the goals of the Congress in 
collecting DNA from violent offenders.
    Another example is the assistance the AO continues to provide 
district courts in implementing the Civil Justice Reform Act to ensure 
the just, speedy and inexpensive resolution of civil disputes. Working 
with a number of judges, the Administrative Office and the Federal 
Judicial Center drafted the Civil Litigation Management Manual. The 
manual, which has now been approved by the Judicial Conference and sent 
to all district and magistrate judges, presents a compendium of 
litigation management and cost and delay reduction techniques that will 
assist courts in achieving a high level of case management efficiency.
                               conclusion
    Mr. Chairman, Members of the Subcommittee, I hope I have provided 
you with a better understanding and appreciation for the wide array of 
responsibilities vested in the AO and the seriousness with which we 
undertake them. 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 are personnel at the AO 
who must quickly master the subject area and render expert advice.
    I am proud of our record of accomplishment and service to the 
courts and the American public. And, as I stated earlier, nowhere were 
the capabilities of the dedicated AO staff more evident than in the 
hours, days, and weeks that followed the terrorist attacks of September 
11, 2001. You can count on my efforts to see that this level of service 
not only continues but also improves through the active oversight and 
stewardship of the resources you have entrusted to us. I ask your 
support in accomplishing this by granting the modest increase the AO is 
seeking for fiscal year 2003.
    Thank you for giving me the opportunity to be here today. I would 
be pleased to answer any questions you may have.
                                 ______
                                 
  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 administration and enforcement of the 
customs and international trade laws of the United States.
    The Court's budget request for fiscal year 2003 is $13,777,000, 
which is $674,000 or approximately 5.1 percent over the fiscal year 
2002 enacted appropriation. This request will enable the Court to 
maintain current services and provide for standard pay and other 
inflationary adjustments to base. The Court is not requesting any 
program increases. I would like to specifically point out that for 
eight consecutive years the Court's requested increases have been held 
to below 6 percent.
    Since the Court is located in Manhattan, New York City, less than 
half a mile away from ``ground zero,'' the events of September 11, 2001 
have had a direct impact upon the operations of the Court. On September 
11th, the Courthouse was evacuated and remained closed for five 
business days. Because the Court is a national court, the majority of 
its case filings are received via the U.S. Postal Service. Since there 
were no mail deliveries for some time after September 11th, the Court 
experienced a backlog in receiving and processing its filings. The 
Court's telephone system was disrupted for a number of months and only 
became fully operational in December 2001. The Court lost its 
connection to the Judiciary's Data Communications Network (DCN), 
thereby affecting the Court's ability to send and receive external e-
mail and its capability to record obligations and expenditures in the 
Judiciary's Central Accounting System. Smoke from ``ground zero'' 
filtered through the ventilation system forcing GSA to shut all fans 
that provide and circulate air throughout the Courthouse. Public 
transportation to and from the Courthouse was disrupted for a period of 
time, and continues to be problematic in several areas, thus impacting 
the ability of some of those who work at and have business before the 
Court to reach the Courthouse.
    During the period following the September 11th tragedy, the entire 
Court staff worked feverishly to ensure that the services of the Court 
continued and that the needs of the Court family, bar and public were 
met. The staff developed and implemented alternative methods of 
connecting to the DCN and arranged to have the accounting data input 
into the Judiciary's Central Accounting System. Court staff also worked 
closely with GSA to ensure the physical and environmental integrity of 
the Courthouse and to obtain cell phones to address our 
telecommunications needs. Due to the staff's dedication and team 
approach to problem solving, the obstacles encountered after September 
11th were handled effectively.
    The Court's fiscal year 2003 request includes funds to pay for 
increased GSA space rental and building related services costs. The 
requested amount, $276,000, includes funds to pay the Court's pro rata 
share of operating and maintaining improvements in the security systems 
for the perimeter of the Courthouse and Federal Civic Center, 
implemented in fiscal year 2002 as a result of the tragic events of 
September 11, 2001.
    In accordance with its Long Range Plan, the Court, in fiscal year 
2003, remains committed to ensuring that the Court's technology 
infrastructure will support its short and long term needs, thereby 
permitting the Court to operate efficiently and effectively. To this 
end, the Court's request includes funds for continuing the internal and 
external implementation of the Court's Case Management/Electronic Case 
Files (CM/ECF) System and the related file tracking, and scanning and 
indexing solutions. Additionally, there are funds in the request for 
several ongoing projects, specifically: (1) the Court's Internet and 
Intranet Web servers that facilitate the external and internal sharing 
of Court information; (2) the online library automation system that 
enables the Judges and Court staff to search electronically for books 
and resource materials in the Court's Information Resource Center's 
collection; (3) a networked records management and tracking system for 
all case records; (4) the Court's new phone system, with unified 
messaging capability, that enables the Court to address its current and 
future telecommunications needs; and (5) the cyclical maintenance of 
Court facilities and the replacement of certain furniture with 
ergonomic designs that will help to minimize the risk of injury to 
Court personnel.
    The Court's fiscal year 2003 request will enable the Court to 
expand its in-house training programs in the utilization of automation 
and technology. Additionally, this request will support the Court's 
effort in the education and training of Judges and Court staff by 
ensuring the continuation of the Court's interactive training 
environment that enables Judges and staff to view and participate in 
training programs broadcast through the Federal Judicial Training 
Network.
    Lastly, the fiscal year 2003 request also includes funds for the 
support and maintenance of security system upgrades implemented by the 
Court in fiscal years 1999 through 2002.
    The Court's commitment to fulfill its mission through the use of 
technology will enable it to enhance the delivery of services to the 
Court family, bar and public.
    I would like to reaffirm that the Court 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 Hon. Fern M. Smith, Director, Federal Judicial 
                                 Center
    Mr. Chairman, members of the subcommittee: Thank you for allowing 
me the opportunity to submit a statement in support of the Federal 
Judicial Center's annual request for appropriations. This is the third 
request I have submitted since becoming Director of the Center in 1999. 
I have been a U.S. district judge since 1988.
    First I want to thank you for the 7.5 percent increase in our 2002 
appropriation. It is our first program increase, and our second full 
current services adjustments increase, in more than ten years. The 
seven new positions will be of great assistance in our efforts to 
provide the federal courts effective distance education.
    This statement summarizes our 2003 request and, like last year's, 
provides you a brief accounting of some of the Center's major 
activities, in particular: Helping the courts deal with the effects of 
September 11; promoting the fair and efficient disposition of 
litigation; assessing court administration practices; assisting the 
judiciaries of foreign countries; and improving the Center workplace.
                              2003 request
    The requested 2003 appropriation of $21,885,000 represents an 8.7 
percent increase to provide adjustments to base and modest program 
enhancements: a return to a shorter cycle of recurring education and 
training programs for federal judges and three new automation 
positions.
    The Center's statutory Board, which the Chief Justice chairs, 
unanimously approved the request before you today. The Board regards 
the funds for more timely education for federal judges to be 
sufficiently pressing that it prepared its own brief statement in 
support of that portion of the request (the statement is included on 
the next page).
Judicial education and training programs ($500,000)
    Center educational programs last year reached almost 50,000 
participants, the great majority of them non-judge employees who 
participated in satellite broadcasts and other forms of distance 
education. In most respects, distance education has been a great 
success.
    For federal judges, the Center provides education in several forms, 
such as manuals on scientific evidence, satellite broadcasts about the 
USA Patriot Act, and small seminars or workshops to orient newly 
appointed judges to their new responsibilities or provide experienced 
judges assistance in specific areas, such as mediation or intellectual 
property law.
    Periodic, general continuing education programs for circuit judges, 
district judges, magistrate judges, and bankruptcy judges are a 
fundamental element of our education for judges. These programs are our 
opportunity to assist judges on a variety of subjects, including 
updating them on the caselaw interpreting frequently litigated 
statutes, describing new techniques of case management, and reviewing 
the ethics requirements that govern judges. Moreover, these programs 
present opportunities for judges to learn from their colleagues as well 
as from the faculty we assemble and to share innovations that have 
proven successful and those that have not.
    Until 1999, a judge could attend one of our general continuing 
education programs once a year. In 1999, we shifted to an 18-month 
cycle as our appropriation declined and because we thought that 
distance education could compensate for longer intervals between 
programs.
    That decision has provoked considerable commentary from judges 
across the country to their colleagues on the Center Board and to the 
staff of the Center. Based on our analysis, we have concluded that 
effective third branch education requires restoring these programs to 
their original 12-month cycle. Below is the statement of the Board of 
the Center, which explains the importance it attaches to this request.
         statement of the board of the federal judicial center
                       approved february 8, 2002
    At a telephone conference meeting on October 22, 2002, the Board 
approved the Center's 2003 appropriations request for submission to 
Congress. This year as every year, we scrutinized the request to be 
certain it is responsible and seeks no more than is necessary for the 
Center to do its job.
    This year's request includes $500,000 to restore the Center's 
ability to offer each federal judge the opportunity to attend a three-
day general continuing education program once a year. Typically, the 
Board does not burden Congress with direct communications about the 
Center's appropriation, relying instead on the Center director for that 
task. The special importance of restoring these programs to an annual 
basis merits an exception to that practice.
    Of all the comments we receive from other judges about the Center's 
work, none is as frequent and widespread as the need to make these 
programs available on an annual basis. The Center's general continuing 
education programs are the core of its educational effort for judges. 
They are essential to helping judges meet the challenges of rapid 
change, increasing complexity, and growing numbers in the cases before 
them.
    We remain committed to the use of non-travel alternatives for third 
branch education. The staffs of the courts receive almost all of their 
education through this medium. Judges, however, need the additional 
opportunity for reflective, interactive discussions with colleagues 
about common problems and often-sensitive concerns, and need that 
opportunity more frequently than twice every three years.
    We appreciate your consideration of this special need.
                the board of the federal judicial center
                        The Chief Justice, Chair
    Judge Stanley Marcus, U.S. Court of Appeals for the Eleventh 
Circuit, Miami, Florida
    Judge Pauline Newman, U.S. Court of Appeals for Federal Circuit, 
Washington, D.C.
    Judge Robert Bryan, U.S. District Court for the Western District of 
Washington, Tacoma
    Chief Judge Jean Hamilton, U.S. District Court for the Eastern 
District of Missouri, St. Louis
    Judge William Yohn, U.S. District Court for the Eastern District of 
Pennsylvania, Philadelphia
    Magistrate Judge Robert Collings, U.S. District Court, District of 
Massachusetts, Boston
    Chief Judge Robert Hershner, U.S. Bankruptcy Court, Middle District 
of Georgia
    Leonidas Ralph Mecham, Director, Administrative Office of the 
United States Courts, Washington, D.C.
    As the Board statement makes clear, this request in no way signals 
the Center's retreat from distance education. Our travel budget, with 
this request, would still be more than $1,000,000 below our travel 
budget in 1995.
    A chart we provided in last year's statement shows that 10 years 
ago, Center educational programs reached slightly over 10,000 
participants, less than half of them through travel-based programs. Our 
programs now reach almost 50,000 participants a year, but the number of 
participants in our travel-based programs has actually decreased. We 
want to continue to exploit cost-effective, non-travel, asynchronous 
learning for the employees of the courts and for judges to the degree 
it is effective.
    At the same time, we recognize, as do other distance learning 
proponents, that some face-to-face educational opportunities are 
essential, especially for those with responsibilities such as those of 
federal judges. Heavy caseloads and the isolation inherent in 
performing judicial duties limit opportunities for judges to meet in a 
detached atmosphere and discuss the nuances of changing precedents and 
case management techniques. The judge's job is becoming more 
complicated. Supreme Court decisions, for example, impose on district 
judges significant new obligations to evaluate the scientific merit of 
proposed expert testimony and to evaluate patent claims. This new 
judicial role requires a greater understanding of science and of how to 
manage such cases efficiently. These are not subjects or procedures 
that lend themselves to learning solely by computer or video screen.
Three additional positions to enhance the Center's use of distance 
        education technologies ($192,000)
    These three positions are needed to support the Center's long-
standing and increasing reliance on distance education technologies 
that I described above. Last year, 90 percent of the roughly 50,000 
participants in Center programs, and in local training events using 
Center services, used distance education technologies, including but 
not limited to the Federal Judicial Television Network, which the 
Center began operating in April 1998. Since fiscal 1998, the Center has 
been requesting 10 additional positions (video, multimedia, and 
automation specialists). With the funds provided in 2002, we plan to 
hire: 2 software engineers to exploit the Web to its full potential, 
especially as we learn more about interactive computer-based training; 
1 automation security officer; 1 additional employee for system 
maintenance; 1 television assistant for the Media Production Unit; 1 
judicial education specialist; and 1 assistant to our Web master.
    Our present plan for the three positions we seek in 2003 is to hire 
two additional software engineers and one computer-training 
technologist to analyze user needs in the development of projects.
                     center services and activities
    Please permit me to describe, as I did last year, some of the 
Center's current activities, as a means of accounting to you for our 
stewardship of the funds you provide for the Center.
Helping the courts deal with the effects of September 11
    The Center's programs for court leaders and managers continually 
stress the need for effective leadership. These programs became all the 
more timely now that all federal courts are on security alert with the 
rest of the country.
    Court leaders and managers must be prepared to deal with safety and 
with the apprehensions and tensions of court employees, as well as 
jurors, witnesses and others who visit our courts. The Center has a 
variety of resources, and is developing some new ones, to assist 
courts. We are also producing several Federal Judicial Television 
Network broadcasts, including a new safety series, begun in December, 
for probation and pretrial services officers, and several broadcasts 
for court managers and court staff for leading in and coping with 
extraordinary circumstances. Cyber crime and cyber terrorism are the 
focus of the next program in our ``special needs offenders'' series for 
probation and pretrial services officers. Our conference for chief 
district judges next month will emphasize leadership, and we will offer 
another round of seminars based on President Lincoln's leadership in 
times of crisis. The forthcoming revised edition of our Deskbook for 
Chief Judges of U.S. District Courts has a chapter on leadership, 
conceived before September 11 but particularly timely now.
    We are also helping the courts understand the new legal environment 
created in the wake of the terrorist attacks. Our two most recent 
national workshops for district judges included sessions titled 
``Domestic Courts in an Interconnected World'' and last month we 
broadcast ``Terrorism and the Law: The U.S.A. Patriot Act and Military 
Commissions,'' a balanced program of analysis by law professors, 
Justice Department officials, and legislative staff members about the 
new law and about the possible relationships between military tribunals 
and the work of federal courts.
    We have also been sensitive to the greater anxiety and need for 
information of the employees in the Thurgood Marshall building and have 
instituted a ``September 11'' lecture series, presenting a program once 
a month on subjects ranging from ``living in times of crisis'' to the 
nature of Islam.
Promoting the fair and efficient disposition of litigation
    I described last year our diverse offerings to help judges honor 
their responsibility to dispose of cases fairly, quickly, and 
inexpensively. This is the major theme of our initial orientation 
seminars for newly appointed judges, and we provide judges an extensive 
array of manuals and sourcebooks about case-management techniques. 
Recent additions include
  --Manual on Recurring Problems in Criminal Trials, Fifth Edition;
  --Guide to Judicial Management of Cases in ADR, which helps judges 
        use alternative forms of dispute resolution in appropriate 
        cases to provide more effective, less costly, and more timely 
        justice--The Center for Public Resources, a leading nonprofit 
        organization promoting the use of ADR, especially in commercial 
        disputes, awarded the Guide its best book award for 2001;
  --Effective Uses of Courtroom Technology, A Judge's Guide to Pretrial 
        and Trial, which we produced in cooperation with the 
        nonpartisan National Institute for Trial Advocacy, helps judges 
        understand the new technologies that counsel use and to manage 
        cases involving them--in fact, a federal judge, faced recently 
        with the question of whether a civil defendant unnecessarily 
        ran up production costs by printing out 3 million pages of 
        paper cited our Courtroom Technology Guide several times for 
        the proposition that the parties should have met and conferred 
        on electronic discovery procedures at the outset of the case;
  --Redistricting Litigation: An Overview of Legal, Statistical, and 
        Case-Management Issues, which will provide judges facing the 
        wave of litigation this year with a resource to understand the 
        statutory and caselaw framework for redistricting litigation, 
        the statistical evidence commonly offered in such cases, and 
        the vagaries of managing the three-judge district courts 
        convened to hear them; and
  --the Judicial Conference's Civil Litigation Management Manual, 
        produced pursuant to a legislative mandate with the assistance 
        of Center staff in cooperation with the Administrative Office.
Assessing court administration practices
    An important part of the Center's statutory mandate is ``to conduct 
research and study of the operation'' of the federal courts. Often that 
research leads directly to educational manuals such as those described 
above.
    The 28 research projects we are currently conducting for Judicial 
Conference committees or the courts themselves include assessment of 
three ADR programs, the impact on litigation costs of discovery 
involving electronic documents, and the special needs of Native 
American offenders under federal court supervision. We also developed 
``plain language'' class action notices as models for attorneys to ease 
confusion in litigation and help everyday citizens understand the legal 
documents sent to them in regard to class actions.
    At the request of the chair and ranking member of the House 
Judiciary Subcommittee on Courts, the Internet and Intellectual 
Property, we are conducting an analysis of public orders of chief 
circuit judges' handling of complaints filed pursuant to 28 U.S.C. 
Sec. 372(c).
Assisting the judiciaries of foreign countries
    In the last twelve months, the Center has provided briefings about 
the U.S. judicial system to 394 judges and legal officials from 35 
countries.
    We also provided more substantial assistance, in the form either of 
specific in-country technical assistance or seminars held here in the 
United States. I should emphasize, as I did last year, that our 
briefings as well as our more extensive projects for foreign 
judiciaries are not funded from the Center's appropriation. We provide 
this assistance at the request of either U.S. government agencies or 
foreign institutions, which fund the travel, lodging, and subsistence.
  --Puerto Rico's Interamerican Center for the Administration of 
        Justice and Public Policy has begun its programming. As 
        discussed at last year's hearings, we have worked with faculty 
        members of the University of Puerto Rico Law School to help 
        establish the Interamerican Center and design its curriculum 
        and services to teach Latin-American judges how to function 
        under new criminal procedure codes.
  --A public defender seminar and observational experiences that we 
        developed with the law school at American University, and seven 
        U.S. federal defender offices, provided Venezuelan chief public 
        defenders with management skills and techniques to help ensure 
        effective representation for defendants in the Venezuelan 
        criminal courts.
  --An exchange program in India in which an American delegation, 
        headed by two members of the U.S. Supreme Court, met with the 
        Indian Supreme Court, other judges, and members of the Indian 
        bar, about alternative dispute resolution, case management, and 
        judicial training. I was pleased to be included in the 
        delegation and am anticipating a visit by members of the Indian 
        courts to the United States this year.
  --Assistance to the Russian Academy of Justice, the Russian 
        Federation's counterpart to the Federal Judicial Center. 
        Academy officials spent a week at the Center and then three 
        Center officials traveled to Moscow to provide on-site 
        technical assistance.
  --The Center provided major assistance to the exchange program 
        involving the Mexican Supreme Court and an American delegation 
        headed by Chief Justice Rehnquist. The exchange occurred 
        shortly after the September 11 attacks. I and the Center's 
        deputy director were members of the U.S. delegation. As a 
        follow-on, we hope to arrange a seminar in Washington on 
        judicial education techniques requested of us by officials of 
        Mexico's Instituto de la Judicatura Federal.
  --Center staff helped Argentina's federal and provincial judiciaries 
        improve their judicial education capabilities.
  --The Center is working with the judiciary of Thailand on the 
        development of effective case-management procedures and a 
        court-annexed alternative dispute resolution program.
    We have also provided assistance to the growing number of federal 
judges whose dockets include problems in transnational litigation, such 
as service of process, discovery in foreign countries, and disputes 
over choice of law or jurisdiction. Our research suggests that at least 
a third of federal judges face such matters on an occasional basis or 
more often. That proportion will surely grow. This year we published 
International Insolvency, a treatise primarily for bankruptcy judges 
with cases that include international parties, issues, or implications.
Improving the Center workplace
    Finally, I should mention developments affecting Center employees. 
The Center's statute gives it somewhat greater flexibility in personnel 
matters than many federal agencies. For example, we adopted a broad 
paybanding system in 1993 and implemented a revised system last year 
after we concluded that our initial paybands were too broad to allow 
effective position classification.
    We have had policies in place prior to 1990 permitting flextime for 
all employees and, since 1994, allowing employees to choose a 
compressed work schedule. All of our employees use flextime and about 
46 percent are on compressed work schedules.
    In 1997 we established a telecommuting policy applicable to all 
Center employees, subject to managers' discretion. I have to say in 
candor that the number of employees who telecommute regularly is 
currently only 10 employees or about 7 percent of our present staff. 
Partly that is because it is not practical to do some Center jobs--such 
as video production at home. We also make telecommuting available to 
employees on a case-by-case basis, as the needs present themselves. We 
believe, however, that we may be able to do more in this regard. Last 
year I appointed a broad-based employee committee to review the full 
range of our personnel policies and make recommendations to me. The 
committee has reported, and we are currently reviewing the 
recommendations and determining how best to adjust our policies to 
further our ability to give the taxpayers their due while providing 
employees flexible work schedules and workplace options. We know that 
the latter often contributes to the former.
    To encourage employee use of public transportation, we offer our 
employees a transportation subsidy and are looking into increasing the 
amount from $30 to $60 per month.
    Our employees are also eligible to participate in a number of 
supplemental benefits programs, such as: pretax health insurance 
premium payments, flexible spending accounts to fund health care, child 
care, and commuter costs (beyond those covered by the subsidy noted 
above), and a long-term care insurance program. We are grateful to the 
AO for developing these innovative policies.
    Mr. Chairman, I appreciate this opportunity to explain our 
budgetary needs for the next fiscal year and to describe some of the 
Center's work and its effect on the work of the courts.
                                 ______
                                 
Prepared Statement of Diana E. Murphy, Chair, United States Sentencing 
                               Commission
                              introduction
    Mr. Chairman, members of the Subcommittee, thank you for the 
opportunity to submit a statement in support of the United States 
Sentencing Commission's appropriation request for fiscal year 2003. The 
Sentencing Commission is an independent agency within the judicial 
branch that seeks to respond to national crime and social problems with 
effective sentencing guidelines. Our work is intended to serve both the 
statutory purposes of sentencing and the needs of communities, victims, 
and families affected by crime and the release of offenders. I 
currently serve as chair of this important agency.
    Our substantial workload each year includes developing guideline 
amendments, analyzing sentencing in federal cases, responding to 
Congressional directives, and providing information and training on 
guideline application. This year, however, we join with the rest of the 
nation in diverting resources from our other critical responsibilities 
to address the pressing concerns presented by international and 
domestic terrorism, achieving homeland security, and preventing 
corporate crime. Even before September 11, the Commission was concerned 
about penalties for terrorism offenses, and on May 1, 2001, we sent 
amendments to Congress that substantially increased penalties for 
nuclear, chemical, and biological weapon offenses. These penalty 
increases became effective November 1, 2001, less than two months after 
the September 11 terrorist attacks, and terrorism is again on our 2002 
agenda as we work to implement the USA PATRIOT Act, Public Law 107-56.
    After a long period with no commissioners, the Commission was 
reborn with the appointment of a full complement of seven voting 
commissioners on November 15, 1999. During the period when there were 
no commissioners, the Commission's budget was dramatically cut and 
staff levels dropped by approximately 20 percent. The new Commission 
nevertheless was able to make progress clearing the backlog of 
legislative directives that had accumulated during the prolonged 
absence of commissioners because of extensive background work staff had 
been able to prepare when there were no other ongoing Commission 
activities. This helped us accomplish a productive first amendment 
cycle, but in the next cycle in fiscal year 2001 we became painfully 
aware of how much our needs surpassed the staffing level we could 
afford. This realization then affected our appropriation request for 
fiscal year 2002.
    In a relatively short period since our appointments, the Commission 
has completely cleared the backlog of legislative directives, and 
Congress has without exception accepted all of the Commission's 
amendments. These many amendments have implemented new legislation, 
modified existing guidelines, and resolved circuit court conflicts of 
guideline interpretation. We have worked hard and made substantial 
progress, promulgating amendments covering sexual offenses against 
children, human trafficking and peonage, intellectual property 
infringement, identity theft, counterfeiting, money laundering, 
immigration offenses, and ecstasy and methamphetamine offenses, among 
many others. We would not have been able to accomplish this work if 
Congress had not responded to our fiscal year 2001 and 2002 requests to 
begin restoring our appropriation to permit us to restaff. We are still 
below the level we need, however.
    The Commission has also received feedback from other sources which 
recognizes the quality of our work. The economic crime package passed 
by the Commission has just been described by Professor Frank Bowman in 
the Indiana Law Review as ``a milestone in the history of the Federal 
Sentencing Guidelines.'' Roughly twenty percent of defendants sentenced 
under the Guidelines have committed economic crimes. This package marks 
the first time in the history of the guidelines that the Commission has 
thoroughly rewritten the guidelines governing a major crime category. 
According to Professor Bowman, ``the economic crime package is the 
first federal sentencing reform initiative in the guidelines era to 
have been conducted in the public eye from its inception'' and is a 
product of the Commission's now ``more open and deliberative process.'' 
These guidelines significantly increase penalties for offenses 
involving high dollar losses, and provide more discretion to judges in 
sentencing defendants who caused or intended relatively low losses. We 
expect that judges and other guideline users will find sentencing of 
economic crimes easier and more just as a result. In addition, new 
information available this year shows the wisdom of our ecstasy 
amendment, which was criticized by many as too harsh when promulgated.
    This amendment cycle, the Commission is working on many important 
issues, including terrorism, corporate crime and organizational 
compliance, drug policy, and Native American issues. We also are 
developing amendments to ensure that all forms of sex trafficking are 
covered by the guidelines and to protect our cultural heritage and 
national treasures, particularly in this time of heightened danger. We 
remain constrained by inadequate resources, however. We continue to 
feel the effects of the appropriation setback before our arrival and 
are simply unable to do the job Congress gave us in the Sentencing 
Reform Act with our current staffing level. The Commission requests an 
appropriation of $13,200,000 for fiscal year 2003 to enable us to hire 
six positions necessary for us to carry out our statutory duties.
    New policy initiatives continue to be identified by the Commission, 
and new crime legislation continues to flow from Congress, the most 
recent being the USA PATRIOT Act. In response to this important 
legislation, we expect to submit to Congress on May 1, 2002 a complex 
multipart amendment that will incorporate the new federal criminal 
offenses and increased statutory maximum penalties created by the Act 
into the guidelines. We recognize, however, that our work in this 
area--like Congress's--will be of an ongoing nature. Rest assured that 
the Commission stands ready to assist Congress in any way that our 
resources permit.
    The Commission has recently formed an ad hoc advisory committee to 
study and make recommendations regarding sentencing guidelines for 
corporations and other organizations, particularly on making compliance 
programs more effective. The organizational guidelines created by the 
Commission have spawned complementary efforts by a number of regulatory 
and law enforcement authorities and have led to compliance programs 
across the country to prevent and detect criminal conduct. The 
organizational guidelines have been in place for over a decade, 
however, and suggestions have been made as to how they might be 
strengthened. The fifteen person advisory committee is made up of 
distinguished and experienced individuals, and we expect this group's 
contribution to be particularly timely and important in light of recent 
developments involving Enron and Global Crossing. It will first meet 
this month, and the Commission expects to begin considering the 
committee's recommendations in fiscal year 2003.
    In fiscal year 2003, the Commission will continue its assessment of 
how well the guidelines are meeting the goals of the Sentencing Reform 
Act as they reach their 15th anniversary and have been applied to more 
than over half a million federal offenders. The purpose of this effort 
is to give Congress the information necessary to evaluate whether the 
guidelines are fulfilling legislative intent. We are studying the need 
to ensure that federal prisons are being used most effectively to 
incapacitate offenders with extensive criminal histories and high 
recidivism rates. We are also examining whether quantity should play as 
large a role in drug sentencing as opposed to other measures of an 
offender's culpability and role in the offense. These projects require 
staffing and research costs, but we believe Congress and the public 
will find value in the results.
    The Commission is also forming an ad hoc advisory committee to 
study the impact of the Federal sentencing guidelines on Native 
Americans. In June 2001, the Commission held a public hearing in Rapid 
City, South Dakota, on issues relating to application of the guidelines 
to Native Americans. In response to the testimony (placed on the 
Commission website), we conducted three intensive training sessions in 
South Dakota in fiscal year 2002 to teach local attorneys, other 
counselors, and probation officers about use of the guidelines. We hope 
to expand this training to include other states with significant Native 
American populations. The type of intensive training involved and the 
complexities of managing a meaningful advisory process on Native 
American issues will require significant resources in fiscal year 2003.
    Congress also has increasingly turned to the Commission for expert 
advice on sentencing policy. For example, several leading members of 
Congress have requested that the Commission examine the current federal 
penalties for drug offenses, specifically crack cocaine and powder 
cocaine. The Commission is conducting an intensive project which 
involves analyzing the court documents for 1,600 cocaine offense cases 
sentenced in fiscal year 2000--representing approximately 20 percent of 
all Federal cocaine offenses that year. This endeavor involves tracking 
important variables such as the offender's function in the offense, the 
geographic scope of the offense, and the presence of certain 
aggravating factors, including weapon involvement and bodily injury. We 
plan to report the results of that project in the near future. The 
Commission is scheduled to conduct a similar study for other major drug 
types in the near future and, depending on our resources, results of 
those studies could be available to lawmakers in fiscal year 2003. In 
addition, the Commission has been monitoring the increased prevalence 
of abuse of the pain killer Oxycontin and related congressional 
hearings and plans to study whether the guideline penalties for 
offenses involving the drug are appropriate.
    In fiscal year 2003, the Commission must also struggle to handle 
the continuing surge in the number of cases sentenced under the 
guidelines, for it is required under the Sentencing Reform Act to 
collect the data and analyze these cases. 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. We 
currently are funded and equipped to process approximately 40,000 cases 
annually, but for the past four years there have been well over 50,000 
cases each year. The projected caseload in fiscal year 2002 is 67,000, 
and there is reason to believe it will be considerably higher in fiscal 
year 2003.
    This appropriation request continues to build on the progress made 
over the past few years, gradually reestablishing the staffing levels 
necessary to support a fully functioning Commission.
                          resources requested
    The Commission's appropriation request for fiscal year 2003 is 
$13,200,000. We understand increases are generally hard to justify and 
that the war on terrorism is costly, but the Commission continues to 
struggle as a result of budget constraints and prior staffing 
reductions and we are playing our role on national problems. Staff 
resources have become increasingly stretched as the agency must analyze 
the surge of case filings, develop a significantly increased number of 
proposed guideline amendments each year, and respond to more directives 
and requests from Congress and training needs. The Commission asks that 
Congress approve its request for $13,200,000 in fiscal year 2003 to 
enable the Commission to meet these increased demands and to continue 
to improve its services.
                             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: (a) to establish and maintain a 
national guideline system for federal sentencing policies and 
practices; and (b) to serve as an expert agency and leading authority 
on federal sentencing matters.
    In fulfilling these basic requirements, the Commission annually 
issues a sentencing guidelines manual that delineates penalty levels 
for all federal offenses. In addition to encompassing all federal 
offenses, the guidelines manual incorporates amendments approved by the 
Commission for newly enacted crime legislation passed by Congress. The 
guidelines manual is used by prosecutors, defense counsel, and 
probation officers in making sentencing recommendations to the court. 
Federal district judges must use the guidelines manual when imposing a 
sentence, and it must also be relied upon by all federal appellate 
judges and the justices of the United States Supreme Court when 
reviewing the imposed penalties. Since the first manual went into 
effect on November 1, 1987, over half a million defendants have been 
sentenced under the guideline system.
    In fulfilling the second component of its ongoing mission, i.e., to 
serve as an expert agency and leading authority on federal sentencing 
matters, the Commission was given continuing statutory responsibility 
and authority in many areas, including ensuring that sentencing 
policies and practices provide certainty and fairness, that they avoid 
unwarranted sentencing disparities while maintaining enough flexibility 
for individualized sentences when those are warranted, and that they 
reflect advancements in our knowledge of human behavior as it relates 
to the criminal justice process.\1\
---------------------------------------------------------------------------
    \1\ For a complete list of the Commission's responsibilities under 
the Sentencing Reform Act, see Appendix A.
---------------------------------------------------------------------------
Demonstrated Accomplishments Following Increased Funding
    The work of the Commission generally is determined by three 
sources: (1) legislative directives by Congress and new crime 
legislation; (2) resolution of conflicting interpretations of 
sentencing guidelines among the circuit courts of appeals; and (3) 
internal priorities that are set by the commissioners following an 
annual solicitation published in the Federal Register. Due to the 
extended absence of voting commissioners, the current Commission 
focused most of its resources the last two amendment cycles addressing 
the significant backlog of legislation. As a result of the Commission's 
diligent work in this area, there are no outstanding congressional 
directives awaiting Commission action. These legislative matters 
covered a wide range of criminal conduct of great concern to Congress 
and members of the federal criminal justice system:
    Nuclear, Biological, and Chemical Weapons.--In response to the 
Chemical Weapons Implementation Act of 1998, and a sense of Congress 
expressed in the National Defense Authorization Act for Fiscal Year 
1997, in April 2001, the Commission significantly increased penalties 
for offenses involving the importing and exporting of nuclear, 
biological, and chemical weapons. This amendment became effective 
November 1, 2001.
    Human Trafficking.--In response to an emergency directive contained 
in the Victims of Trafficking and Violence Protection Act of 2000, in 
February 2001, the Commission amended the guidelines applicable to 
peonage, involuntary servitude, slave trade offenses, and possession, 
transfer, and sale of false immigration documents in furtherance of 
such human trafficking to reflect the heinous nature of these offenses. 
The amendment accounts for new offenses and increased statutory maxima 
created by the Act. The Commission currently is considering further 
changes to address more adequately sex trafficking of children by 
force, fraud or coercion in violation of 18 U.S.C. Sec. 1591. This 
amendment also addressed adequate penalties for criminal violations of 
the Fair Labor Standards Act and the Migrant and Seasonal Agricultural 
Worker Protection Act.
    Protection of Children.--In response to a directive contained in 
the Protection of Children from Sexual Predators Act of 1998, in April 
2000, the Commission amended the guidelines pertaining to certain 
sexual abuse offenses and distribution of child pornography to provide, 
among other things, enhancements 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. In April 2001, 
the Commission provided additional increased penalties for violations 
of chapter 117 of title 18 and for sexual offenses against children 
that involve a pattern of activity.
    Stalking.--In response to a directive contained in the Victims of 
Trafficking and Violence Protection Act of 2000, in April 2001, the 
Commission increased penalties for certain stalking and domestic 
violence offenses.
    Identity Theft.--In response to a directive contained in the 
Identity Theft and Assumption Deterrence Act of 1998, in April 2000, 
the Commission added to the fraud guideline a sentencing enhancement 
for violations of 18 U.S.C. Sec. 1028 (relating to fraud in connection 
with identification documents).
    Ecstasy.--In response to an emergency directive in the Ecstasy 
Anti-Proliferation Act of 2000, in March 2001, the Commission 
significantly increased penalties for the manufacture, importation, or 
trafficking of ecstasy and other ``club drugs'' so that they are 
comparable to penalties for other major drugs of abuse.
    Intellectual Property Offenses.--In response to an emergency 
directive contained in the No Electronic Theft (``NET'') Act of 1997, 
in April 2000, the Commission made comprehensive changes to the 
copyright and trademark infringement guideline to more adequately 
account for the harm caused by these offenses.
    Telemarketing Fraud.--In response to a directive contained in the 
Telemarketing Fraud Prevention Act of 1998, in April 2000, the 
Commission promulgated a permanent amendment that provides 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.
    Telephone Cloning.--In response to a directive contained in the 
Wireless Telephone Protection Act of 1998, in April 2000, the 
Commission added a sentencing enhancement to the fraud guideline for 
these offenses.
    Methamphetamine and Amphetamine Trafficking.--In response to the 
Methamphetamine Trafficking Penalty Enhancement Act of 1998, and 
emergency directives in the Methamphetamine Anti-Proliferation Act of 
2000, the Commission has amended the guideline's drug quantity table to 
conform to new mandatory minimum sentences and significantly increase 
penalties for a given drug quantity, added severe sentencing 
enhancements for methamphetamine and amphetamine manufacturing that 
creates a substantial risk of harm to human life, the environment, 
minors, and incompetents, increased the penalties for amphetamine 
offenses such that they are identical to the penalties for 
methamphetamine offenses, and increased the penalties for offenses 
involving certain precursors of methamphetamine.
    Firearms Offenses.--In response to Public Law 105-386, which 
amended 18 U.S.C. Sec. 924(c) to create a tiered system of mandatory 
minimums and presumed maxima in cases in which a firearm is involved in 
a crime of violence or drug trafficking offense, in April 2000, the 
Commission promulgated an amendment which incorporated the new tiered 
sentencing scheme into the guideline pertaining to violations of 
section 924(c). In addition, in April 2001, the Commission added a 
sentencing enhancement for offenses involving more than 100 firearms. 
The Commission currently is considering a proposed amendment that would 
improve the operation of the career offender guideline in the context 
of section 924(c) offenses.
    College Scholarship Fraud.--In response to a directive contained in 
the College Scholarship Fraud Prevention Act of 2000, in April 2001, 
the Commission broadened an existing enhancement to specifically cover 
offenses involving fraud or misrepresentation in connection with the 
obtaining or providing of information to consumers regarding college 
scholarships, loans, and grants.
Commissioners Complete Longstanding Policy Work
    The Commission also has worked hard to address several policy 
initiatives that at different points in time have been supported by 
various constituents, including the Department of Justice and the 
Committee on Criminal Law of the United States Judicial Conference. In 
April 2001, the Commission passed amendments that addressed the 
following important substantive areas:
    Economic Crime Guidelines.--After a number of years of data 
collection, analyses, public comment, and public hearings, the 
Commission passed a comprehensive economic crime package that, among 
other things, provides significantly increased penalties for mid and 
high level fraud, theft, and tax offenses involving moderate and large 
monetary losses, consolidated the theft, fraud, and property 
destruction guidelines, and clarified the definition of loss to include 
all reasonably foreseeable harms. Our work in this area was extensive. 
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. In addition, in October 
2000, the Commission sponsored a two day National Symposium on Federal 
Sentencing Policy for Economic Crimes and New Technology Offenses at 
the George Mason University School of Law. The symposium was attended 
by approximately 150 judges, prosecutors, defense attorneys, and 
academicians and provided valuable input on the proposed package.
    Money Laundering.--Closely related to the economic crimes package, 
the Commission worked with the Department of Justice to develop a 
revision to the money laundering guidelines that more accurately 
captures the seriousness of the money laundering offense conduct. The 
new guideline structure ties the penalties for money laundering 
penalties more closely to the penalties for the underlying offense that 
generated the criminally derived proceeds, distinguishes between 
offenders who launder funds derived from their own criminal conduct as 
opposed to those offenders who launder funds for others, and provides 
significant sentencing enhancements for aggravating money laundering 
conduct. The amendment is the culmination of several years work of on 
this area.
    Counterfeiting.--In response to recommendations from the Department 
of Treasury, in April 2001, the Commission voted to provide increased 
penalties for (1) manufacturers of large amounts of counterfeit 
currency and (2) offenders who possess counterfeiting paper similar to 
the distinctive paper used by the United States, or a feature or devise 
essentially identical to a distinctive counterfeit deterrent used by 
the United States. This amendment to the counterfeiting guideline 
addresses recent changes in how counterfeit currency is produced. 
Because of the advent of new and inexpensive technology, such as laser 
printers, and the availability of illegal copies of currency on the 
Internet, offenders now generally print counterfeit currency on an ``as 
needed'' basis, with no substantial accumulation of inventory. Thus, an 
alternative mechanism to achieve increased sentences was needed for 
this class of offenders.
    Safety Valve.--In order to ensure that federal prison space is used 
to punish serious offenders, in April 2001, the Commission voted to 
expand the applicability of the two level reduction for non-violent, 
first time drug offenders who meet the safety valve criteria set forth 
at 18 U.S.C. Sec. 3553(f)(1)-(5) to defendants who currently receive a 
sentence below five years.
    Illegal Reentry.--In response to difficulties experienced by 
prosecutors with large caseloads and concerns raised by judges, 
probation officers, and defense attorneys along the southwest border, 
in April 2001, the Commission voted to amend the guideline pertaining 
to illegal reentry to provide a more graduated sentencing enhancement 
for offenders with prior aggravated felony convictions. The amendment 
reserves the most serious sentencing increase for the most dangerous 
offenders and may result in a reduction in the departure rate for such 
offenses.
Personnel Needed to Meet Other Statutory Duties
    Human resource needs of the agency continue to 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. In order to become a fully 
functional agency that performs all of its statutory functions in an 
exemplary manner, the Commission needs adequate resources, particularly 
in the following areas:
            Commission Contending with Sharp Increase in Caseload
    In fiscal year 2001, the Commission received court documents for 
more than 67,000 cases sentenced under the Sentencing Reform Act 
between October 1, 2000, and September 30, 2001. The Commission's 
organizational structure and physical facilities, however, are designed 
and funded to handle only 40,000 cases per year.
    For each case received, 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. This data is vital to the 
Commission's deliberations when modifying the guidelines to adjust 
federal sentencing policy in a timely manner. Yet due to staff 
vacancies, the Commission even now has a backlog of 20,000 cases that 
have not yet been processed. The Commission is studying ways to 
streamline our work process and achieve efficiencies, perhaps by 
receiving court documents by electronic means. Unless additional staff 
are hired, however, the Commission will be unable to code data on each 
case sentenced under the guidelines and will be forced to rely on less 
reliable statistical sampling to guide its sentencing policy 
development and to advise Congress on crime policy. Our work depends on 
this critical information.
            Increased Inquiries from Congress for Commission Expertise
    The Sentencing Reform Act gives the Commission the responsibility 
to advise Congress about sentencing and related criminal justice 
issues. To fulfill this responsibility, the Commission continues to 
provide members of Congress and their staffs with timely and valuable 
sentencing related information and analyses. Commission staff have 
recently responded to requests from Congressional staff for 
comprehensive briefings on current data and research concerning crack 
and powder cocaine. Now that the Commission has a full complement of 
commissioners, Congress is once again turning to the Commission for 
advice on sentencing policy, a development that the Commission 
enthusiastically welcomes.
    In addition to congressional inquiries such as the request 
regarding crack cocaine and powder cocaine penalties noted above, the 
Congress often asks the Commission to provide expert testimony at 
congressional hearings. For example, on March 21, 2001, I testified 
before the Senate Caucus on International Narcotics Control about 
changes made to the Federal sentencing guidelines for ecstasy 
trafficking, in response to the Ecstasy Anti-Proliferation Act of 2000, 
Public Law 106-310. I highlighted the harmful pharmacological and 
physiological effects of ecstasy, its trafficking pattern, and use of 
ecstasy by minors, as well as the significant impact on sentences for 
serious traffickers of ecstasy under the amendment.
    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 and how it may impact the guidelines, explanations of 
guideline operation, technical assistance in drafting legislation, and 
Commission publications and resource materials.
            Research and Information Dissemination
    The Commission is rebuilding its research staff in order to analyze 
sentencing patterns and practices, respond to inquiries about the 
effectiveness of sentencing policies, and assess thoroughly the impact 
of proposed guideline amendments and new sentencing related 
legislation. The Commission's research staff, for example, has taken 
the lead in conducting an intensive coding project on Federal cocaine 
offenses that we hope to have completed soon. The research staff will 
be tasked with the same role for a similar project for other major drug 
types that the Commission plans to conduct during fiscal year 2003, 
resources permitting.
    The research staff also leads the recidivism study the Commission 
has undertaken as part of the 15 year assessment of the guidelines. 
When the study is complete, the resulting database would provide the 
most comprehensive and sophisticated profile of the criminal histories 
of Federal criminal offenders and their rates and patterns of 
recidivism. The recidivism study is being accomplished through 
cooperative efforts with the Federal Bureau of Investigation, the 
Federal Bureau of Prisons, the United States Parole Commission, the 
Administrative Office of the United States Courts, with research grants 
anticipated from the National Institute of Justice. Following its 
statutory directive to monitor the guidelines to insure that they are 
meeting the purposes of sentencing required by Congress, the Commission 
is undertaking this valuable endeavor that will require significant 
staff resources.
    The Commission also continues to advance its statutorily directed 
research and information dissemination through presentations of 
analyses at numerous sentencing policy symposia, including the annual 
meeting of the American Society of Criminology. In fiscal year 2002, 
Commission staff made presentations on, among other things, Federal 
drug sentencing policy and drug trafficking trends, sexual predator 
offenses, and immigration offenses.
    The agency annually publishes an updated Guidelines Manual and an 
Annual Report and accompanying Sourcebook of Federal Sentencing 
Statistics, which contains statistical charts, tables, and analyses on 
sentencing pattern and practices gathered from the agency's extensive 
database. The Commission's sentencing database includes information on 
sentences imposed for every single district in the country. The 
Commission also publishes an annual Guide to Publications and Resources 
and continues to add a variety of publications and sentencing data to 
its award winning Internet web site.
            Increased Training Needs for Larger Federal Criminal 
                    Justice System
    Over the last several years, as Congress has devoted increased 
resources to law enforcement, the number of federal judges, 
prosecutors, probation officers, and defense attorneys who require 
training and assistance on how to use the guidelines has increased 
accordingly. The Sentencing Reform Act requires the Commission to 
provide guideline training, in part because training promotes 
uniformity in guideline application and thereby reduces sentencing 
disparity, both goals of the Act.
    Commission staff provided training on the sentencing guidelines in 
2001 to more than 2,500 individuals at approximately 50 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. Each 
year the Commission cosponsors a National Sentencing Seminar to train 
hundreds of probation officers, prosecutors, and defense attorneys on 
guideline application. The program is so popular that we must turn away 
people due to the high volume of interest. Commission also play a major 
role preparing for and participating in the biennial National 
Sentencing Institute sponsored by the Federal Judicial Center and 
attended by a large number of Federal judges. Also, as noted above, in 
fiscal year 2002, the Commission conducted three days of intensive 
training in South Dakota as we embarked on a push to improve guideline 
training in and around Indian County. In fiscal year 2003, we hope to 
expand those efforts to reach other areas of the nation with large 
Native American populations, such as Arizona and New Mexico.
    The Commission also maintains a telephone HelpLine service to 
answer guideline application inquiries from federal judges, probation 
officers, prosecuting and defense attorneys, and law clerks. To expand 
the availability and cost efficiency 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 programming on sentencing related issues. 
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. 
However, 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.
    As a result of its leadership in the corporate compliance area, 
Commissioners and staff are regularly invited to share their expertise. 
The Commission and the Ethics Officer Association (EOA) jointly sponsor 
a series of regional forums about implementing the organizational 
guidelines. The Commission also regularly addresses national and 
regional compliance organizations and responds to numerous inquiries on 
the organizational sentencing guidelines and compliance issues. 
Interest and inquiries come from governmental agencies, corporations, 
industry coalitions, nongovernmental organizations, and academic 
institutions, both within the United States and overseas.
Commissioners Face Large Number of Circuit Conflicts
    In addition to its other work, the Commission has primary 
responsibility to resolve conflicts in court interpretation of the 
guidelines. See Braxton v. United States 500 U.S. 344 (1991). There are 
presently more than 40 conflicts between circuit courts, many of which 
accrued during the absence of voting commissioners.
    The Commission has made significant progress in reducing the number 
of outstanding circuit conflicts. In fiscal year 2000, the Commission 
promulgated amendments that resolved five circuit conflicts, and in 
fiscal year 2001 another nineteen. Among the conflicts resolved last 
year are: (i) whether admissions made by the defendant during a guilty 
plea can be considered ``stipulations'' for purposes of Sec. 1B1.2(a); 
(ii) whether the enhancement in the aggravated assault guideline for 
use of a dangerous weapon during such an assault is impermissible 
double counting if the weapon used was not inherently dangerous; (iii) 
whether the enhancement in the fraud guideline for misrepresenting that 
one acts on behalf of a charitable, educational, religious, or 
political organization, or a governmental agency applies to a defendant 
who works for the entity but diverts benefits; and (iv) whether a 
reduction for mitigating role is precluded in the case of a single 
defendant drug courier whose base offense level is determined by the 
quantity personally handled.
    The Commission intends to continue resolving circuit conflicts in 
the process of dealing with other policy work. In addition to 
monitoring case law to identify circuit conflicts, the Commission 
continues to follow cases interpreting New Jersey v. Apprendi, 120 S. 
Ct. 2348 (2000) (other than the fact of a prior conviction, any fact 
that increases a penalty for a crime above the statutory maximum must 
be submitted to a jury and proved beyond a reasonable doubt) to assess 
its potential impact on the guidelines.
                               summation
    The Commission has worked very hard with limited resources to clear 
the significant backlog of crime legislation that await implementation, 
long standing policy initiatives that need completion, and circuit 
conflicts that require resolution. With the necessary resources, in 
fiscal year 2003 the Commission expects to continue work in important 
policy areas such as terrorism offenses, corporate misconduct, the 
impact of the guidelines on Native Americans, calibrating criminal 
history to account for the risk of recidivism, and drug penalties that 
account for the culpability of the offender. We cannot undertake a 
policy agenda of any real significance without appropriate staff 
levels, however, given the large increase in our caseload and the many 
demands on us in working for an effective, certain, and fair sentencing 
system.
                 Appendix A: Statutory Responsibilities
    The responsibilities of the United States Sentencing Commission 
under the Sentencing Reform Act are:
  --ensuring that sentencing policies and practices provide certainty 
        and fairness, that they avoid unwarranted sentencing 
        disparities while maintaining enough flexibility for 
        individualized sentences when those are warranted, and that 
        they reflect advancements in our knowledge of human behavior as 
        it relates to the criminal justice process;
  --developing means to measure the effectiveness of sentencing, penal, 
        and correctional practices in meeting the purposes of 
        sentencing;
  --monitoring the performance of probation officers regarding 
        sentencing recommendations, including application of the 
        guidelines;
  --issuing instructions to probation officers concerning the 
        application of the guidelines;
  --establishing a research and development program within the 
        Commission to serve as a clearinghouse and information center 
        for information on Federal sentencing practices;
  --consulting with federal courts, departments, and agencies in 
        developing, maintaining, and coordinating sound sentencing 
        practices;
  --systematically collecting data from studies, research, and the 
        empirical experience of public and private agencies concerning 
        the sentencing process;
  --publishing data concerning the sentencing process;
  --systematically collecting and disseminating information concerning 
        sentences actually imposed on more than 61,000 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);
  --systematically collecting and disseminating information regarding 
        the effectiveness of sentences imposed;
  --conducting seminars and workshops around the country to provide 
        continuing studies for people engaged in the sentencing field;
  --conducting periodic training programs for judicial and probation 
        personnel and other persons connected with the sentencing 
        process;
  --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;
  --holding hearings and calling witnesses to assist the Commission in 
        the exercise of its powers and duties;
  --recommending any changes in prison facilities that may be necessary 
        because of the sentencing guidelines; and
  --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.
                                 ______
                                 
Prepared Statement of Haldane Robert Mayer, Chief Judge, U.S. 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 2003 budget request.
    Our 2003 budget request totals $21,893,000. This is an increase of 
$2,548,000 over the 2002 approved appropriation of $19,345,000. Thirty-
one percent of the requested increase, $799,000, is for mandatory, 
uncontrollable increases in costs. The remaining increase of $1,749,000 
is for funding of additional positions and other program increases.
                     request for program increases
    A total of $1,749,000 for program increases is requested. The 
breakdown and further justification for each amount follows. The 
justifications for the program increases are separated into three 
categories: staffing; renovations; and technology advancements.
Two New Staff Positions
    The court requests $209,000 to cover the cost of two new positions 
for nine months in fiscal year 2003. The positions requested are for a 
Deputy to our Circuit Executive position ($130,000) and a Computer 
Security Specialist ($79,000).
    The position of Deputy to the Circuit Executive has become 
necessary to assist the Circuit Executive with the variety of duties 
assigned to that office. The Deputy would act in the absence of the 
Circuit Executive as well as assist in overseeing the offices that 
operate under the direction of the Circuit Executive.
    We also request funding to hire a full-time permanent position 
entitled Information Technology Specialist. Upon completion of a formal 
security review and assessment of the court's electronic information 
system, the National Security Agency concluded that the court should 
hire an Information Technology Specialist. This person would monitor 
and protect the security of the court's information system. The 
Information Technology Specialist would insure that all electronic 
communications and information in judges' chambers and staff offices 
are protected and secure from compromise or unlawful release.
Courtroom Renovations
    The court is again requesting $900,000 to begin the long-overdue 
renovations of our courtrooms to bring them up to 21st Century security 
and technology standards to benefit the judges, attorneys, and 
litigants. There have been no upgrades to our courtrooms, with the 
exception of new carpet, since the opening of the courthouse in 1967.
    We requested this amount in our 2001 and 2002 budget requests. We 
have taken our request to GSA with no favorable response. It would be 
impossible to reprogram current appropriated funds to renovate the 
courtrooms without reducing our staffing levels or cutting back on the 
funding for other necessary items such as IT equipment and lawbooks.
Improvements in the Court's Courtroom and Courthouse Computer 
        Technology and Security
    We request $640,000 for program advancements in the area of 
technology in the courtrooms, judges' chambers, and staff offices: 
$150,000 of this amount is to upgrade the court's e-mail system in 
order to be a part of the new judiciary-wide e-mail system now being 
implemented nationwide.
    The Judicial Conference of the United States recognized that 
courtroom technologies are a necessary and integral part of courtrooms. 
Based on those findings and the fact that the Administrative Office of 
the U.S. Courts (AO) currently is implementing this program in courts 
across the country, the court is requesting funding to upgrade the 
courtroom technology in one of our courtrooms. The figure of $215,000 
was provided to the court by the AO based on its experience to date 
with upgrading courtrooms. Not only would this benefit the Judiciary 
and the court, it would be a benefit to counsel and litigants. One 
phase of this new technology will give counsel the opportunity to argue 
a case offsite while connected to the courtroom as if the attorney were 
in the courthouse, thus cutting expenses for the litigant.
    We request $205,000 to develop and augment a disaster recovery plan 
for the court's electronic data system. In the event of a major 
disaster, it will be necessary to access the court's computer network 
from a remote site as well as locally. This amount is a one-time cost 
estimate to put this recovery system in place.
    The National Security Agency performed a study of court security 
and recommends improved computer security hardware and software to 
assist in the detection and prevention of electronic computer attacks 
and intrusions to the court's computer network. The cost of upgrading 
the security of the court's computer system is $70,000.
    I would be pleased, Mr. Chairman, to answer any questions the 
Committee may have or to meet with the Committee members or staff about 
our budget requests. Thank you.

                      PANEL ATTORNEY RATE INCREASE

    Senator Hollings. Judge, that is the key, working with us 
and particularly our staffs here because we have got a good 
bipartisan staff that works on these issues. We will not have 
any difficulty. In fact, I had a chance last evening to go over 
each one of these items and I find them, generally speaking, in 
good order except for when you include an adjustment to the 
base here on a defender services pay increase. You jump that up 
from $90 an hour to $113 an hour for panel attorneys.
    Judge Heyburn. Right.
    Senator Hollings. What is the justification for that, sir?
    Judge Heyburn. Well, I think there are two separate issues 
here. We have talked with this committee and the House, as 
well, about the need to increase the panel attorney rate and we 
were very, very gratified last year when you increased the 
hourly rate paid to private attorneys who represent indigent 
defendants in Federal court. You raised the rate from $75 in 
court--it was even lower in some places--and $60 out of court, 
to $90 an hour in and out of court, which is a wonderful 
achievement and tremendously appreciated.
    We had requested $113 an hour, and at the time we put 
together this budget, we had not learned of the results of your 
final conference action last year. So the recommendation of the 
Judicial Conference and our committee still stands at $113 an 
hour as what we believe is necessary to make up for, I believe 
it was, 15 years where there was no rate increase.
    But you have raised the question, and it is a very 
legitimate and proper one, now that the rate has been raised to 
$90 an hour. We do not know, of course, what impact that rate 
is going to have on the system as a whole because the rate does 
not go into effect until May. We know it is going to be 
positive. We still believe that the rate needs to be raised to 
$113, but it is quite possible that the $90 rate will have a 
tremendously beneficial impact.

                 RATE INCREASE AS AN ADJUSTMENT TO BASE

    As to the second issue, whether or not the request for $113 
should be categorized as an adjustment to base, I think you 
raise a very good question. I think an argument could just as 
well be made that this is a program increase rather than an 
adjustment to base. We include it as an adjustment to base 
because the CJA statute provides for annual inflationary 
adjustments and that's what the $113 rate represents. So we 
considered it like a pay increase, which we consider an 
adjustment to base. However, I think it is fair enough for you 
to characterize it as a program increase as well. I think it is 
certainly a gray area in terms of how you want to categorize it 
in the budget process and I think you raise a good point.
    Senator Hollings. Thank you, sir.
    Senator Gregg.

                        COST OF TERRORISM TRIALS

    Senator Gregg. Yes, Judge. I am wondering, and maybe you 
can get some of your colleagues to comment on this, have you 
done an estimate as to how much it will cost us in additional 
funds if we have to run another trial along the lines of what 
we did for the first World Trade Center bombing? If we bring 
the September 11 terrorists back here and put them through a 
criminal justice process, I presume the costs are going to be 
staggering. Do you have a reserve fund for that? Have you tried 
to anticipate some of these additional costs of trying these 
terrorists in the United States?
    Judge Heyburn. In our budget request that we present to you 
today, the possibility of these very expensive trials is not 
included. We recognize that they may occur, but the estimates 
for defense costs and other associated related costs of 
security and the like are based upon the experience that we are 
now having in 2002. So the estimate, the way we present our 
budget, is based on the actual 2002 numbers, not a projection 
of what may happen.
    Senator Gregg. So you do not have like a reserve fund, 
which is reasonable----
    Judge Heyburn. If there was a significant expense in 2003 
for a trial such as that, we would simply have to redeploy our 
resources, and if we have a carryover, perhaps those funds 
could be used. But it is not specifically a part of our budget.
    Senator Gregg. Would you expect to submit a supplemental to 
us, then, if that were the case?
    Judge Heyburn. In the past, for instance, Oklahoma City, 
the associated trial costs were significant. There was quite a 
bit of comment from both the Senate and the House about the 
expense of defending those persons with private lawyers at 
Federal expense. I do not know the exact amount, although it 
was considerably less than the prosecution's expense. But, we 
could get that to you. I know it was in the millions of 
dollars. We did not ask for a supplemental on that occasion. It 
would have to be a fairly extraordinary expense before we 
would, I think, come in with a supplemental.
    [The information follows:]

Summary of Funds Expended for the Representation and Defense of Timothy 
J. McVeigh from Arrest through Sentencing

Attorneys...............................................      $6,741,015
Attorney Support Staff, Housing, and Security...........       1,467,947
Investigators...........................................       1,976,583
Expert and Consulting Services..........................       3,053,405
Travel..................................................         541,885
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................      13,780,835

                OFF-SITE COURT OPERATIONS SUPPORT CENTER

    Senator Gregg. The Administrative Office building over here 
is a pretty pricey place, very nice, has wonderful trees 
inside. Of course, coming from New Hampshire, we are wondering 
why the trees are not outside rather than inside, but that is a 
technical point.
    It would seem that most of the functions of that office 
could be done somewhere outside of the District and that the 
security issues raised by 9/11 might imply that it might be 
better to do those outside of the District. Are you taking a 
look at moving the Administrative Offices outside the District 
and then freeing up that space for utilization for departments 
or agencies which might have to, by their nature, be here in 
Washington?
    Mr. Mecham. Do you want me to respond to that?
    Judge Heyburn. Yes.
    Mr. Mecham. Pursuant to direction from your committee, we 
are looking at the necessity for some offsite space to meet 
emergency needs. One of the things we discovered from 9/11 and 
the anthrax situation is that we had inadequate communications. 
We could not communicate with the Southern District of New 
York, which was virtually paralyzed, and we realized that we 
are terribly vulnerable. We could be in a position, if the 
building were destroyed or otherwise put out of action, where 
we could not pay the judges, the court staff, or the jurors. 
Our entire communication system could break down.
    However, through your good help, we have a data 
communications network now that links all courts and judges 
throughout the United States. So, we applauded your request and 
are busily engaged in endeavoring to comply with a plan for 
certain offsite functions.

                          RELOCATION OF THE AO

    With respect to moving the AO, the AO is the principal 
administrative office function for the entire Federal 
judiciary. The functions we perform must be done centrally. We 
have substantially decentralized much of what we used to do 
here. Starting in 1990, I urged strongly that substantial 
functions be delegated out to the courts, which they were, and 
I think we have struck a nice balance.
    In the meantime, the courts have grown over the last 6 
years by about 15 percent. Our staff has stayed essentially 
flat because we had decentralized substantial activities. But 
we still must have a central communication system. You cannot 
run that in 92 different courts.
    Senator Gregg. Yes, but my point is, it does not need to be 
in the District of Columbia.
    Mr. Mecham. I think it would be very important to have it 
here. The Chief Justice is our boss. If you want to put us 
1,000 miles away from our boss, that is something you could do. 
I mean, you have that right, but I would not urge that you do 
that. Many of our functions relate to the General Services 
Administration. We work with them on buildings and grounds and 
the planning of buildings. We work closely with the U.S. 
Marshals Service. It is very important that we be linked to 
them. We also support the Judicial Conference of the United 
States, the policy making organization which is headquartered 
here in Washington. They will be meeting here next week under 
the direction of the Chief Justice.
    Senator Gregg. So you are saying, basically, you think you 
need to be in the District of Columbia?
    Mr. Mecham. I would say very strongly that the AO needs to 
be.
    Senator Gregg. Rather than in South Carolina or----
    Mr. Mecham. Or New Hampshire, even, perhaps New Mexico.
    Judge Heyburn. We would love to be in South Carolina.
    Judge Michael. West Virginia.
    Judge Heyburn. We like West Virginia.
    Judge Michael. Very open spaces.
    Mr. Mecham. I personally would like to move it to Salt 
Lake, now that the Olympics are over, and have it out there. 
But, I do not think it would be very practical, Senator, in all 
candor, and I tell you that as somebody on the way out the 
door, not coming in the door.
    Senator Gregg. That was my point. I wanted to get that 
information. But you are setting up the emergency--you are 
going to get us some papers on how you are going to be able to 
handle an emergency that might shut down your----
    Mr. Mecham. We shall, and thanks for asking us to do that.
    Senator Hollings. Senator Domenici.

        SERVICES FOR THE MENTALLY ILL WITHIN THE JUDICIAL SYSTEM

    Senator Domenici. Thank you, Mr. Chairman. Two parochial 
questions and one general one. Let me take the general one 
first.
    I have a great concern for the mentally ill and the courts 
and the mentally ill and the prisons and jails. It is a 
startling reality that in the United States, there are more 
seriously mentally ill people in jails--county and city jails 
across the land--than there are in all of the hospitals and 
institutions that we have that try to take care of them. At the 
national level, non-Federal, we are doing some work with mental 
health courts with a very small amount of money, thanks to the 
Congress, and they get to be experts at how to handle the 
mentally ill that are coming before them.
    I hope we can develop a lot more expertise and do a better 
job across the board, but what does the Federal Government and 
the judicial system that we call the Federal system, what do 
they do with reference to mentally ill defendants or people 
that are accused? What is the process? Is there any way that 
was built in to help them and to treat them differently?
    Judge Heyburn. I can answer that in a couple of ways. 
Number one, and just in terms of the facts and figures, I think 
partly with your urging and the urging of others in Congress, 
we have dramatically increased the attention and funding for 
the U.S. Probation and Pretrial Services System for services to 
mentally ill persons who are within the judicial system. I 
think the resources that are devoted to that have increased 50 
percent over the last couple of years.
    From personal experience as a district judge, we from time 
to time come into contact with defendants who have serious 
mental illness, whether it is a question of their mental 
capacity to stand trial or some other mental problem. My 
experience with the Federal health system has been a very 
positive one. They are professional, and at least as far as 
Kentucky is concerned, the hospitals that we can send these 
people to are within a reasonable proximity.
    They do a good job, and these are very, very difficult 
problems when you have a person who has committed perhaps a 
serious crime and yet is now--and may have been at the time--
under some mental incapacity and is incapable of standing 
trial. It is a difficult problem for a judge and it is also, of 
course, difficult for the psychiatrist involved.
    I have been very impressed with the ability of the medical 
services, which are not directly under our control, of course, 
to respond to our particular needs. But, I do not know if that 
is the general experience around the country.
    Mr. Mecham. Could I just add one thing to that?
    Judge Heyburn. Please.
    Mr. Mecham. One of our responsibilities here in Washington 
is to provide administrative support for Federal probation and 
pretrial services throughout the country.
    Senator Domenici. Right.
    Mr. Mecham. Judge Heyburn is a chief judge and he has a 
chief probation officer and a chief pretrial services officer, 
as do all the courts. There were about 8,700 offenders and 
defendants, or about 6 percent of the 140,000 under 
supervision, that received mental health treatment in fiscal 
year 2001 at a cost of $8.4 million. It is an expanding thing, 
I regret to say, but yet it is important to do and we are doing 
our part and we are grateful for the support that this 
committee has provided that enables us to do that. As Judge 
Heyburn pointed out, we have had a 50 percent increase in 
mental health expenditures during the last 2 years.
    I should point out, Senator, that we actually supervise 
more people through the probation system, about 140,000, than 
there are in the Federal penitentiaries, about 129,000, and we 
do it at a cost of about $11 per person and the Federal 
penitentiary is about $55. So we are a bargain for you.
    Senator Domenici. If you could do them all and we would not 
need any prisons, that would be fine, but it does not work that 
way.
    Mr. Mecham. We would probably have to build some prisons to 
put them in.
    Senator Domenici. Let me, Mr. Chairman, just take a moment 
and exchange here with you and for the record some facts with 
reference to the mentally ill and the court system and the jail 
system.
    Actually, more and more medicines are being developed that 
help even the most severely mentally ill--schizophrenics, manic 
depressives, et cetera, but those drugs, in order to be 
effective, are new, they are experimental, and they are very 
expensive. One of the problems that we have, whether it is in a 
county jail or a city jail or a State jail, is that there is 
not enough money to provide the medication that is necessary to 
inhibit the hallucinations with which a schizophrenic attempts 
to live.
    Do we have any such problem with reference to the 
availability of resources for medicine, medication, or would 
that be under somebody else, Mr. Mecham? Do you have any way of 
telling us about that, Judge?

                    MEDICATIONS FOR THE MENTALLY ILL

    Judge Heyburn. I think there is, again, from my own 
experience as a district judge, there is always a problem. The 
problem that is least controllable for us is when a defendant 
is incarcerated prior to trial. At that point in time, even 
though they are under the supervision of the Marshals Service, 
they are usually placed in a State facility, a State jail, a 
county jail for that temporary period of time, and on those 
occasions and during that limited period of time, it is more 
difficult for us to ensure that they get the proper medicines 
that they need, and it comes up more often than we would like.
    Now, when they are actually under Federal supervision, that 
is not in direct custody but under supervised release, under 
home detention, then they are more directly under the 
supervision of the Probation Office and their ability to get 
the proper medicines is improved as I think the people are much 
more attentive.
    But as you can imagine, with thousands of county jails 
around the country where Federal prisoners may be held for 
short times in custody, the quality control, if you will, is 
just simply not the same as when they are in the Federal 
system.
    Senator Domenici. I found out about it today, and I am 
going to try to do something to see if we cannot put some 
resources into making sure that medicines are available. At 
least we can do that much.

                STATUS OF LAS CRUCES FEDERAL COURTHOUSE

    I have two quick questions about New Mexico. First, I do 
not think I have to state the background facts with reference 
to New Mexico as a border State and the city of Las Cruces, 
which is on the border, and from which the District of New 
Mexico is now trying two-thirds of their criminal cases. I 
believe we fit the definition of a district in crisis. I would 
like to ask, with reference to Las Cruces which is a city about 
220 miles from Albuquerque and on the border, about the need 
for a new courthouse. It is desperately needed. What is the 
status of the courthouse?
    Mr. Mecham. Through your good efforts, Senator, the Fiscal 
Year 2002 Treasury and General Government Appropriations Act 
included $4.1 million for design of the Las Cruces courthouse. 
Construction is going to cost about $46 million and it is 
scheduled under the judiciary's 5-year prioritized plan, which 
obviously you have to agree to or disagree with for next year. 
It is the seventh item under the 2004 list. It will not be 
ready for construction in 2003 and therefore was not considered 
for our 2003 prioritized list. We were directed by Congress to 
develop priorities. It was a painful process, but we did it.
    So it depends a lot, Senator, on whether or not we can fund 
the projects for 2003. The President only recommended one-
fourth of what we need to cover the buildings that are in 
fiscal year 2003, so if we go down the priority list, if a lot 
of those are delayed, then that is going to push the Las Cruces 
project farther down in 2004.
    Senator Domenici. Thank you very much.

                  ADDITIONAL JUDGESHIP FOR NEW MEXICO

    There is a bill working its way through conference which 
would provide an additional Article III judgeship for New 
Mexico, which the judges there have indicated they would like 
to house in the city of Las Cruces, county of Dona Ana, where 
this enormous build-up of cases is occurring. Could I ask, 
based upon your knowledge, would you agree that New Mexico 
should have an additional Article III judge if we are going to 
have some border judges in a bill which is in conference?
    Mr. Mecham. Not only do we agree, we strongly support it. 
It is part of legislation which we have submitted to Congress, 
which regrettably has not been introduced. We would like to see 
54 new judges, but there is a particularly acute need in the 
border States, as you point out, including New Mexico, which 
has six district judgeships but has a 681 weighted case filing. 
We ask for a new judge at 430. Your judges are working hard and 
their health is being compromised in at least one case that I 
know of. We strongly support an additional Article III 
judgeship for New Mexico.
    The Senate has not passed a judgeship authorization bill 
since 1990, even though the workload has gone up. Mercifully, 
your committee, however, has taken the lead to authorize 10 in 
1999 and 9 in 2000, and I noticed that the Senate, just before 
you adjourned last year, had put 9 judges in the Department of 
Justice authorization bill. Unfortunately, it does not include 
New Mexico.
    Senator Domenici. I understand.
    Mr. Mecham. It includes five for the Southern District of 
California, two for Texas, two for North Carolina, all of which 
are acutely needed, but New Mexico is not in there. I would 
hope you would talk to the conferees, Senator----
    Senator Domenici. We are.
    Mr. Mecham [continuing]. In support of New Mexico and maybe 
some of these other judgeships.
    Senator Domenici. That is why we asked you, so we can go 
there and tell them that you agree.
    Mr. Mecham. We agree 100 percent.
    Senator Domenici. Thank you very much, Mr. Chairman.
    Senator Hollings. Thank you. Senator Reed, you are such a 
quiet and polite Senator, I did not----
    Senator Reed. I want to apologize. There is a hearing in 
Armed Services with respect to the CINCs from the Pacific and 
SOUTHCOM and Korea, so I apologize and I have no questions at 
this time.
    Mr. Mecham. Senator, can I just make one comment while 
Senator Reed is here?
    Senator Hollings. Certainly.

                      NEW FEDERAL DEFENDER OFFICE

    Mr. Mecham. Chief Judge Torres has complimented Senator 
Reed to me and said what a great job he did in supporting a new 
defender office in Providence. He phoned me to say that Senator 
Reed had already called him to tell him your committee has 
approved it and I just want you to know your judges approve of 
your good work, Senator.
    Senator Reed. I know I came here for some reason.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hollings. Very good. Judge Heyburn, we thank you 
and your associates here this morning. Thank you very much.
    Judge Heyburn. Thank you very much for allowing us to be 
here.
    [The following questions were not asked at the hearing, but 
were submitted to the judiciary for response subsequent to the 
hearing:]
            Questions Submitted by Senator Patrick J. Leahy
        junkets/efforts to lobby the judiciary through seminars
    Question. A number of groups and individuals, including Senator 
Feingold, have expressed concerns about the practice of sitting judges 
attending resorts for educational seminars bankrolled by corporations 
and other groups interested in shaping and influencing the development 
of law in ways that would benefit those who fund such seminars, for 
example in the area of environmental law or takings law. The Chief 
Justice has defended privately funded judicial education seminars.
    Nevertheless, I would like to ask each of you whether you have any 
concerns about the appearance of impropriety created by the attendance 
of federal judges at educational seminars funded by private groups, 
including groups that may have interests in the outcome of federal 
litigation?
    Answer. Several ethical guidelines bear on the question whether a 
judge may properly attend a private educational seminar. Judges are 
under a statutory duty by virtue of 28 U.S.C. Sec. 455(a) and (b)(1) to 
disqualify themselves from any case in which they have a ``personal 
bias or prejudice concerning a party'' or otherwise where their 
``impartiality might reasonably be questioned.'' See also Canon 3C of 
the Code of Conduct for United States Judges. Specific advice about 
attending private seminars is contained in Advisory Opinion No. 67, 
issued by the Judicial Conference Committee on Codes of Conduct. 
Additionally, the Judicial Conference Gift Regulations and Canon 5C(4) 
of the Code of Conduct for United States Judges permit judges to accept 
reimbursement of expenses to attend law-related activities.
    The advice contained in Advisory Opinion No. 67 sets out three key 
principles: (1) whether the sponsor of the seminar is involved (or 
likely to be involved) in litigation before the judge; (2) whether the 
source of funding for the seminar is involved (or likely to be 
involved) in litigation before the judge; and (3) whether the subject 
matter of the seminar relates to the litigation in which the sponsor or 
funding source is involved. The opinion advises judges that it would be 
improper to participate in seminars organized by non-governmental 
entities if the sponsor or funding source is involved or likely to 
become involved in litigation and the topics covered in the seminar are 
related to the subject matter of such litigation. The opinion also 
observes:

    ``The education of judges in various academic disciplines serves 
the public interest. That a lecture or seminar may emphasize a 
particular viewpoint or school of thought does not in itself preclude a 
judge from attending. Judges are continually exposed to competing views 
and arguments and are trained to weigh them.''

    The analysis in Advisory Opinion No. 67 was endorsed in the most 
recent federal circuit decision to review this subject, Aguinda v. 
Texaco, Inc., 241 F.3d 194 (2d Cir. 2001). That decision specifically 
addressed the question of funding and support for private educational 
seminars. The court ruled that a party's ``indirect and minor funding 
role'' in a seminar, coupled with the lack of connection between the 
litigation and the seminar, did not render a judge's attendance at the 
seminar improper. As the court observed, ``[n]o reasonable person would 
believe that expense-paid attendance at such [private seminar] events 
would cause a judge to be partial, or to appear so, in litigation 
involving a minor donor--whether a party or counsel to a party--to a 
bar association, law school, or program administering a particular 
seminar.''
    Over the years, judges have benefitted from educational programs 
offered by bar associations, universities, law schools, nonprofit 
foundations, and other private organizations. It is difficult to 
determine in the abstract whether a judge's attendance at a particular 
private seminar will give rise to impartiality concerns. Specific 
information about the sponsor of the seminar, the source of funding, 
their involvement in litigation, the content of the seminar, and the 
judge's relationship to such litigation all bear on the question 
whether a judge's participation is proper or improper. Additionally, 
judges who properly attend a seminar may later find it necessary to 
consider recusal if a case appears on their docket involving the 
sponsor or source of funding. These factors require consideration on an 
individual basis.
    Question. In what ways do you think that the financial disclosure 
process could be improved to provide for more complete disclosure of 
the costs of attendance at such seminars, whether paid for directly by 
the private group as a ``gift'' or paid for by the judge and then 
``reimbursed'' by the private group?
    Answer. The disclosure requirements set forth in section 
102(a)(2)(B) of the Ethics in Government Act of 1978 (5 U.S.C. app. 
Sec. 102(a)(2)(B)) are quite adequate for reporting reimbursements. 
Each filer is required to report the source, location, date, and nature 
of expenses reimbursed by the source. For judges, conflict of interest 
recusal is based on the identity of the source and not the cost of such 
reimbursement.
    Question. Would you agree that it would be beneficial for financial 
disclosure statements--after any redactions authorized by the Judicial 
Conference Committee on Financial Disclosure in accord with the 
statute--or financial conflicts (investments) lists to be posted at the 
court houses where the judges sit?
    Answer. Financial disclosure statements do not necessarily provide 
an accurate statement of a judge's financial holdings for recusal 
monitoring purposes because of the delay inherent in filing the reports 
(due May 15) and the time period covered (preceding calendar year). 
Thus, the listing of assets in a report is already at least four-and-a-
half months old when filed and may not accurately reflect a judge's 
financial holdings on the day of case assignment or trial. In addition, 
the reports are both over- and under-inclusive, in that they require 
judges to list interests that are not disqualifying (e.g., bonds), and 
they fail to require disclosure of interests that are disqualifying 
(e.g., stock holdings under $1,000).
    At the March 1999 meeting, the Judicial Conference of the United 
States considered whether it should encourage all courts to maintain 
recusal lists in the courthouse. After reviewing the appropriate 
Committees' recommendations and discussion, the Conference agreed that 
the better course of action was to continue to support the efforts of 
the Committees on Codes of Conduct and Financial Disclosure to educate 
and inform judges of their responsibilities under 28 U.S.C. Sec. 455, 
the Code of Conduct for United States Judges, and the financial 
disclosure provisions of the Ethics in Government Act of 1978. Recently 
the Chief Justice of the United States has referred the issue of 
posting recusal lists in the courthouse to the appropriate committees 
of the Conference for further consideration. This referral was in 
response to a letter from Representatives Howard Coble and Howard L. 
Berman of the Subcommittee on Courts, the Internet, and Intellectual 
property of the House Judiciary Committee concerning hearings held in 
November 2001 that touched on this issue.
    Question. In recent testimony a judicial nominee noted that he now 
believes the better practice would be not to attend expense-paid 
seminars unless he knew who was providing the funding to the group 
sponsoring the seminar so that he could make a better informed judgment 
about possible conflicts and the appearance of impropriety. What do you 
think about that suggestion and should it be incorporated in a 
guideline or rule for federal judges?
    Answer. This issue is addressed in current published ethics 
guidance. Advisory Opinion No. 67, discussed above in response to an 
earlier questions, advises that, if there is a reasonable question 
concerning the propriety of a judge's participation in an educational 
seminar, the judge should take steps to satisfy himself or herself that 
there is no impropriety. Similar guidance appears in Aguinda v. Texaco, 
Inc., 241 F. 3d 194 (2d Cir. 2001), which states:

    ``Presentations at bar association meetings or law schools may well 
relate to particularized issues, and recusal should be considered 
seriously, but on a case-by-case basis. Judges should be wary of 
attending presentations involving litigation that is before them or 
likely to come before them without at the very least assuring 
themselves that parties or counsel to the litigation are not funding or 
controlling the presentation.''
                          tracking civil cases
    Question. Some have noted that fewer civil cases are going to trial 
in federal courts these days as more cases are disposed of by motion or 
settlement. Does the Administrative Office or do the circuits have a 
process for determining whether judges are being slow or derelict in 
their responsibilities in timely considering motions?
    Answer. The Civil Justice Reform Act of 1990 (CJRA) requires the 
Director of the Administrative Office of the United States Courts to 
prepare a semiannual report for every U.S. district and magistrate 
judge, showing all motions pending before that judge for more than six 
months, all bench trials that have remained undecided for more than six 
months, and all civil cases pending for more than three years. Pursuant 
to that law, these reports are delivered to the Senate and House 
Judiciary Committees every six months. In addition, the Judicial 
Conference's Committee on Court Administration and Case Management, 
which has jurisdiction over the policies relating to the CJRA, has 
instituted a procedure to identify and assist courts that may be 
experiencing case processing problems.
    Question. All too often litigants complain that judges delay 
considering timely motions for summary judgment until the eve of trial, 
after the parties have gone to considerable expense for preparing for 
trial. Sometimes, we have heard, motions are pending for years and 
then, when new judges are confirmed to the court, such cases and their 
old motions are transferred to the new judges, resulting in even more 
delay. The Administrative Office and the courts have very good 
procedures for tracking how criminal cases are handled under the Speedy 
Trial Act. There seems to be precious little accountability, 
comparatively, regarding how speedily civil cases are handled.
    What additional measures of accountability might we build into our 
civil justice system to provide the public with more information about 
how promptly civil cases and motions are considered?
    Answer. As noted above, the Administrative Office, pursuant to the 
CJRA and the policy of the Judicial Conference, biannually publishes 
and provides to Congress a comprehensive and specific report on the 
status of each federal district and magistrate judge's docket. 
Individual judge and district reports, which contain more detail, are 
also available in the clerk's office in each district. In addition, 
each circuit executive's office maintains copies of their respective 
districts' CJRA reports. It is not uncommon for the local press to pick 
up this information and publish a story about the rankings of the 
judges in their districts.
    However, the vast majority of federal district courts dispose of 
their cases in relatively short order. The median time from filing to 
disposition for civil cases in district courts is approximately nine 
months--a figure that has remained fairly constant, never exceeding ten 
months, over the past 15 years.
    Question. Could a computerized tracking system be designed, or 
could the system that tracks the criminal cases be adapted, to provide 
such information about the time it takes for courts to dispose of 
certain types of motions and civil cases?
    Answer. For the past three years, the CJRA report discussed above 
has been primarily prepared by an automated program, the Integrated 
Case Management System/CJRA Statistical Reporting Program (ICMS/CJRA). 
As a result, all pending motions, bench trials, three-year old cases, 
Social Security cases, and bankruptcy appeals are being reported in a 
standard and consistent fashion. The implementation of this automated 
processing system has promoted a highly accurate and well-documented 
analysis of the pending civil caseload for each district and magistrate 
judge.

                          subcommittee recess

    Senator Hollings. The subcommittee will be in recess.
    [Whereupon, at 10:56 a.m., Tuesday, March 5, 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 2003

                              ----------                              


                        THURSDAY, MARCH 7, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:02 a.m., in room SR-253, Russell 
Senate Office Building, Hon. Ernest F. Hollings (chairman) 
presiding.
    Present: Senators Hollings, Gregg, and Stevens.

                   FEDERAL COMMUNICATIONS COMMISSION

STATEMENT OF MICHAEL K. POWELL, CHAIRMAN

                           prepared statement

    Senator Hollings. The committee will come to order, and we 
are pleased this morning in our appropriations oversight to 
welcome Mr. Michael Powell, the Chairman of the Federal 
Communications Commission. Mr. Powell, we would be delighted to 
hear from you, sir.
    Mr. Powell. Thank you, Mr. Chairman, Senator Gregg. It is 
my understanding that you are interested in getting into some 
of the policy issues, and in deference to your wishes, I would 
ask that my full testimony be presented into the record.
    Senator Hollings. It will be included, and you can 
summarize it as you wish.
    [The statement follows:]
                Prepared Statement of Michael K. Powell
    Mr. Chairman, Ranking Minority Member, and Members of the 
Subcommittee, I appreciate this opportunity to appear before you today 
to provide you with a report of our work conducted during the past 
calendar year and to discuss the Federal Communications Commission's 
(``FCC'') fiscal year 2003 Budget.
    Less than nine months ago, I appeared before this Subcommittee for 
the first time and made a personal commitment to effectuate fundamental 
change within the Commission. I guaranteed that the Commission, as an 
institution, would complete a thorough self-examination and develop a 
reform plan designed to make the FCC a more responsive, efficient and 
effective agency, capable of facing the technological and economic 
opportunities and challenges of the new millennium. The Commission 
delivered on this promise and sent you a reprogramming request for its 
reorganization six months later. We appreciate your rapid consent to 
our request.
    I also pledged to enhance the Commission's independent technical 
and engineering expertise. The Commission dedicated resources to 
recruiting, training and retaining a solid technology-oriented 
workforce under our ``Excellence in Engineering'' Program. We have 
hired 18 mid- and senior-level and five entry-level engineers. We 
instituted training programs to keep current and future engineers up to 
date in their profession. And, we have improved the environment for 
engineers by purchasing equipment to facilitate the spectrum management 
process, and to upgrade the Columbia, Maryland Laboratory's testing 
capabilities. Our on-going efforts in this regard, coupled with the 
Agency's ``FCC University'' and ``Excellence in Economic Analysis'' 
initiatives, hopefully will preserve our existing wealth of FCC staff 
knowledge and expertise and enhance and extend that collective 
knowledge into the new millennium.
    When I last appeared before this Subcommittee, I pledged to make 
the Commission a model of solid management techniques and performance. 
As such, the Commission moved forward to continue to streamline agency 
processes and procedures, automate agency processes, provide improved 
access to agency information, and modernize its information technology 
infrastructure. During our January 2002 Open Agenda Meeting, the 
Commission's staff delivered with statistics showing substantial 
improvement in backlog reduction levels and other management 
benchmarks.
    Finally, I also vowed that the Commission would use the remainder 
of its fiscal year 2001 and expected fiscal year 2002 funds to 
implement its statutory mandates and serve as a constructive and fair 
independent agency, cognizant of the intent of Congress and dedicated 
to serving the public interest and consumer welfare. I am confident 
that the Commission has met all of these commitments and, in doing so, 
has achieved significantly higher levels of customer benefit and policy 
and management performance.
    The Commission has made these achievements, however, against the 
backdrop of tragic and dramatic national events. The events of 
September 11, 2001, provided us all with an important lesson in the 
significance of the FCC's portfolio. We know now that our society has 
developed more than just an appetite for communications services--
America is dependent upon these services in times of crisis and in 
times of peace. A strong and competitive communications network is 
essential to a healthy economy and our nation depends on both, whether 
to bolster its ability to defend itself, or to communicate in times of 
normalcy.
    Last year, this Subcommittee initially provided the Commission with 
full funding, plus additional resources for the ``Excellence in 
Engineering'' Program. Although our final funding was slightly less 
than originally requested, I am appreciative of this Subcommittee's 
efforts to ensure that we had adequate resources to achieve our goals 
and effectuate significant intra-agency reform efforts. For fiscal year 
2003, the Commission is requesting $278,092,000, of which $268,327,000 
will be dedicated toward our operational requirements.
    This year, you have my personal pledge to continue driving forward 
in a patient and deliberate manner--to handle the expected and the 
unexpected, from homeland and internal security to biennial reviews, an 
expected influx of Section 271 long-distance applications, and pending 
major merger reviews, just to name a few. The Commission intends to use 
its expected funding to continue its campaign to upgrade the Agency's 
facilities, as well as to initiate and complete critical rulemakings. 
The present request is the minimum amount necessary to continue to 
capitalize our past successes and to carry us through the immense 
challenges of the next fiscal year. Already, fiscal year 2002 has been 
marked by a tidal wave of expected and unexpected events and policy and 
regulatory issues. I expect fiscal year 2003 to be at least as 
opportune and challenging.
            fiscal year 2002: maximizing available resources
    It is fitting that we have this hearing on March 7th, a day marked 
by important historical milestones for the telecommunications industry. 
On this day in 1876, Alexander Graham Bell received a patent for the 
telephone. Fifty years later on the same day, the first successful 
transatlantic radio-telephone conversation took place between London 
and New York. In retrospect, 50 years seems like a very long period of 
time between these achievements. Today, we develop new communications 
products and services at a more rapid speed then ever before, in an 
exponential fashion that makes science fiction a matter of science fact 
within just a handful of years. Looking forward, that makes for policy 
and management opportunities, as well as hurdles and challenges.
    As a consequence, the Commission continues to capitalize on its 
well-established core competencies, especially honed over the past six 
years, to eliminate barriers to entry in domestic communications 
markets; to deregulate where appropriate to promote competition; to 
vigorously enforce Commission rules so that corporate entities compete 
fairly; and, to promote competition in international communications 
markets. Moreover, the Commission continues to build upon the 
cornerstone principles of the public interest and general consumer 
welfare to promote access for all Americans to communications service, 
and to promote heightened consumer education and information.
    The Commission must stay abreast of technological advances and be 
prepared to face the future before the future arrives. To do so, the 
Commission needs funding to improve its use of internal technology and 
to develop a highly trained workforce to evaluate communications 
industry trends. Last year when I appeared before you, I discussed the 
Commission's critical need to upgrade its infrastructure. I also 
emphasized our efforts to re-evaluate the Agency and develop a business 
plan to reform its organizational structure. A well-funded 
infrastructure and an efficient organizational structure are 
intrinsically linked. The overall ability of the Commission to function 
as an institution is dependent upon the quality of both. When I last 
testified, we already had made strides toward upgrading information 
technology and technological resources. Six months after my testimony, 
I sent you a report outlining a significant internal reorganization of 
the Commission.
    The foundation for the Commission's reorganization rests on the 
shoulders of its staff--a diverse and committed group of people 
dedicated to utilizing resources to maximum capacity and rebuilding a 
trim, well-focused organization that meets the needs of America's 
communications industries and their consumers. The reform and 
reorganization of the Commission is built along four specific concepts: 
(1) a clear substantive policy vision; (2) a pointed emphasis on 
management; (3) an extensive training and development program; and (4) 
organizational restructuring. The implementation of each of these 
concepts exemplifies how the Commission utilized its financial 
resources during the past year, and explains our plans for additional 
funding in fiscal year 2003.
A Clear Policy Vision
    I enumerated above a set of policy and management imperatives that 
will extend the Commission's mission, evolve its operational 
strategies, and drive further the culture of efficient, effective and 
responsive performance. First, we articulated a clear policy vision. 
The Commission's staff also evaluated our activities in these 
identified issue areas and tied the highlighted policies to the reform 
of the Commission as an institution. We initially specified several 
areas for policy-making emphasis: broadband deployment, competition 
policy, spectrum policy, building a foundation for media ownership 
regulation, digital television transition, and homeland security. 
Although these issues sometimes overlap, their individual significance 
guides our dedication of resources in the regulatory arena.
            Broadband
    Recently, I noted that one of the FCC's central policymaking 
focuses is, and should be, the promotion of efficient, widespread 
deployment of broadband infrastructure. Recognizing the importance of 
broadband deployment--a topic of conversation that is extensively 
discussed here on Capitol Hill, as well as at the Commission, Wall 
Street, and Main Street--the Commission is taking a concerted, 
comprehensive approach to bring regulatory clarity to what is, at best, 
a murky and confusing policy area. To that end, the Commission has 
committed significant resources to consider and initiate several 
proceedings that pointedly address broadband issues. Of course, our 
actions in this area will first and foremost be grounded in the Act, 
taking into account the statutory objectives of competition, universal 
service, and consumer protection.
    It is important to emphasize that while we have committed 
significant resources to initiating or completing various rulemakings, 
the legal and regulatory issues implicated here have yet to be 
resolved. But they must be resolved if we collectively intend to 
facilitate the ubiquitous availability of broadband to all Americans. 
The Commission welcomes the input of all Americans in our deliberative 
process--especially the opinions of the Members of this Subcommittee 
and Congress as a whole--as we proceed in developing a regulatory 
framework for successful broadband deployment.
            Competition Policy
    Competition is a fundamental and guiding statutory principle under 
the Telecommunications Act of 1996. It is the root from which most of 
our other policy areas grow. Under my leadership, the Commission has 
been outspoken in its support for competition, both inter- and intra-
modal. More significantly, however, our actions have backed up our 
words.
    Positive rules to promote competitive entry are meaningless without 
a credible enforcement effort to back them up. Therefore, we have made 
enforcement the cornerstone of our competition policy. As you will 
recall, last year we called on Congress to increase dramatically the 
forfeiture amount allowed under the statute. While we eagerly await the 
fulfillment of this request, we have vigorously enforced our rules that 
serve to promote competition. In addition, in contemplating our 
competition policy, we recognized that ensuring that competitors have 
access to those network elements that are necessary to provide 
competing telecommunications services is only half the battle. Indeed, 
the competitive local exchange carrier (``CLEC'') community told us 
that to be useful, network elements must be provisioned in a timely 
manner. In response to provisioning concerns, we launched two Notice of 
Proposed Rulemakings on performance standards. Through these 
proceedings, we have embarked on an effort to simplify performance 
levels and standards to both clarify obligations and to allow for a 
mechanism for swift enforcement when those levels and standards are 
compromised.
    Moreover, the Commission has been vigilant in its review of Section 
271 applications. Since passage of the 1996 Act, the Commission has 
denied as many Section 271 applications (this includes situations where 
the application has been withdrawn, an effective denial) as it has 
granted. In 2001, despite the fact that the roadmap for approval has 
been drawn, two Section 271 applications involving three states were 
withdrawn, demonstrating the Commission's continued determination in 
ensuring the competitive checklist is met and local markets are open 
for competition. Furthermore, the Commission has begun a second 
analytical look at the regulatory implementation of the Act, through 
our Triennial Review of Unbundled Network Elements Requirements NPRM, 
that takes account of market experiences to determine which of our 
regulations are working to provide a competitive environment for 
consumers and which are not.
            Spectrum Policy
    The Commission's first assigned task in 1934 was to manage the 
spectrum. The same basic principles articulated then continue to exist 
today. The Commission has an obligation to ensure that spectrum, an 
important and precious resource, is used in a wisely manner that 
ensures the broadest public benefit and meets urgent public needs.
    The Commission has acted decisively--utilizing our staff and the 
spectrum auctions process to follow Congress' mandate that we work 
toward the rapid deployment of spectrum. During the past few months, we 
have reallocated the spectrum used for channels 52-59, designated the 
4.9 GHz band for public safety purposes, and authorized the use of 
spectrum for Ultra-Wideband technology. In a major rulemaking completed 
on December 28, 2001, the Commission reallocated 27 MHz of spectrum 
transferred from the Federal Government. This spectrum will permit the 
initiation of new and flexible services--for example, in the fixed 
satellite service, fixed mobile service, telemetry, and low power 
radio. In addition, the Commission has experimented with innovative 
methods for licensing that encourage private band management within the 
confines of existing statutory guidelines.
            Media Ownership Foundation
    The time has come to rebuild the factual foundations that support a 
contemporary regulatory regime for media ownership regulations. 
Although the media landscape has changed dramatically since the 
initiation of many of the Commission's ownership regulations, the 
longstanding goals of diversity, competition, and localism remain 
paramount.
    As you are aware, the U.S. Court of Appeals for the D.C. Circuit 
recently vacated some of the Commission's broadcast ownership rules, 
and has remanded others for our reconsideration. At the heart of the 
court's concern is the ability of the Commission to justify these 
restrictions in light of the dynamic changes in today's marketplace.
    Long before the recent court decision, however, I expressed concern 
about the quality of the record the Commission relied on in reaching 
media ownership decisions. In an effort to shore up this area, I 
announced the creation of a Media Ownership Working Group on October 
29, 2001. This working group is tasked with developing a solid factual 
and analytical foundation for media ownership regulation. Moreover, 
they are working to provide an empirical and analytical basis for the 
Commission to ensure that our regulatory regime in this area actually 
serves to meet the goals of diversity, localism, and competition in the 
media marketplace.
    It is important to note, however, that the D.C. Circuit's recent 
decision found that the Act compels the Commission to review the full 
panoply of media ownership regulations every two years and to repeal 
these regulations unless the Commission makes an affirmative finding 
that the rules are necessary to serve the public interest. To address 
the court's criticism that we lack a factual foundation for our 
ownership rules, we must expend a meaningful amount of resources to 
improve the evidence before us. We cannot afford to sit back and hope 
the public submits all the information we need to make good decisions. 
We must be proactive in deciding what questions need to be answered, 
and then to go out and answer them. That is what I have set up the 
Media Ownership Working Group to do.
    We then need to apply those factual findings to our media ownership 
rules and determine if the rules as written truly promote competition, 
diversity and localism, or whether today's media market requires 
different approaches. I welcome that challenge and would simply note 
that overhauling our knowledge base on media ownership and then re-
initializing it every two years hence will require a significant 
commitment of resources.
    In addition to appointing specific FCC personnel to gather 
empirical information, the Commission has launched a comprehensive 
examination of rules on multiple ownership of local radio stations and 
set interim policies to resolve pending radio transfer applications. 
The Commission also, as recommended by the prior Commission, initiated 
a proceeding to review the newspaper-broadcast cross-ownership rule. 
The Commission also began a rulemaking on cable ownership rules last 
year. In addition, the Commission has proposed new equal employment 
opportunity rules for broadcast and cable. I believe that by next year, 
with the proper allocation of resources within the Commission, I will 
be able to report on significant beneficial progress in this area.
            Digital Television Transition
    While broadband deployment and the inherent competitive issues 
involved rank as the most important communications issues facing 
America, the economic by-products of digital television (``DTV'') are 
equally important in scope and stature. Television is, after all, a 
central part of our society and provides our citizenry with essential 
information and entertainment. Consequently, the DTV transition and its 
economic and regulatory implications maintain an important place in the 
Commission's overall policy-making efforts. In October 2001, I 
announced the creation of a Digital Television Task Force. This task 
force will review the ongoing transition to DTV, and make 
recommendations to the Commission concerning priorities to facilitate 
the transition and promote the rapid recovery of broadcast spectrum for 
other uses. In addition to making recommendations for agency action, 
the Task Force has been facilitating discussions with the various 
industries that are largely responsible for the transition.
            Homeland Security
    In response to the events of September 11, 2001, the Commission 
established a Homeland Security Policy Council (``HSPC''). The 
formation of the HSPC and its work involves the use of significant 
resources in an area that we did not consider for budgetary purposes 
during the fiscal year 2002 appropriations process. Like other 
agencies, we are using our current pool of Full-Time Employees 
(``FTEs'') to cope with the events of September 11, 2001, and we are 
demanding more of them in handling their regular workload along with 
new tasks.
    HSPC is assigned to handle overlapping security issues and respond 
to specific mission objectives. First, the mission of this group is to 
assist the Commission in evaluating and strengthening measures for 
protecting U.S. telecommunications, broadcast and other communications 
infrastructure and facilities from further terrorist attacks. Second, 
HSPC assists the Commission in ensuring rapid restoration of U.S. 
telecommunications, broadcast, and other communications infrastructure 
and facilities after disruption by a terrorist threat or attack. Third, 
HSPC assists the Commission in ensuring that public safety, public 
health, and other emergency and defense personnel have effective 
communications services available to them in the immediate aftermath of 
any terrorist attack within the United States.
Emphasis on Management
    As an outgrowth of the Commission's self-examination and reform, 
the Commission has placed a new emphasis on the management of available 
resources and the creation of tools designed to enhance the operation 
of the bureaus. We asked all managers to review their internal 
processes and develop real solutions to existing problems. Specified 
management initiatives include: (1) backlog reduction; (2) better use 
of technology, including a re-designed Internet site; (3) improved 
productivity; and (4) consolidated and simplified licensing systems.
    At our January 2002 Open Agenda Meeting, most Bureau and Office 
Chiefs reported on their reduction in regulatory backlogs--a matter 
that has dogged the Commission. We have posted these statistics on the 
Commission's Internet site (), so that our progress 
in this area is evident to the industry. One major highlight in this 
area is the Wireless Telecommunications Bureau. In 1998, they had a 
13.12 percent backlog of applications pending for more then a year. By 
December 2001, that percentage had dropped to 0.24 percent. Likewise, 
the International Bureau managed to achieve a 55 percent reduction in 
pending applications for Review and Petitions for Reconsideration, as 
well as a 56 percent reduction in the number of existing non-routine 
applications and a 25 percent reduction in existing satellite space 
station applications.
    This past year, the Commission's management maximized improved 
information technology resources to increase responsiveness to 
consumers. The FCC's redesigned Internet site is part of our management 
plan to make the Agency more responsive and transparent. We average 
approximately 265,000 hits on a daily basis, and we were ranked third 
overall among federal agencies for Internet site design. At the end of 
November 2001, the Commission launched a new FCC search engine to 
improve its Internet site.
    In addition to a general managerial emphasis on outreach, the 
Commission's staff leadership is tasked with improving bureau 
productivity. For instance, the Commission instituted comprehensive 
accounting and reporting reform for incumbent local exchange carriers. 
And, in an effort to reach out to our core constituencies, the bureaus 
have all undertaken efforts designed to consolidate and simplify 
licensing systems. The Commission has proposed new procedures to 
increase the efficiency of satellite licensing procedures. The 
Commission also has proposed a uniform system for filing informal 
complaints. This particular change would promote efficiency and 
predictability for consumers and service providers.
Training and Development
    The Commission's long-term policy objectives require a highly 
trained staff capable of adapting to technological change and industry 
trends. Accordingly, the Commission has instituted a range of training 
and technical initiatives: (1) the ``FCC University''; (2) the 
``Excellence in Engineering'' Program to recruit engineers and improve 
their physical resources; and (3) recruitment and retainment of 
economic experts, or the so-called ``Excellence in Economic Analysis'' 
Program.
    Already we have instituted internal training programs in a variety 
of areas and brought outside experts in to train our staff in various 
disciplines. The most successful element of this program so far, 
however, is the FCC's ``Excellence in Engineering'' Program, initiated 
during the previous fiscal year and continued with funds in our fiscal 
year 2002 appropriation. Already we have hired 18 mid- and senior-level 
and five entry-level engineers in open FTE positions. We have 
instituted a special training program to educate and retain our 
technological experts. We have dedicated a substantial portion of our 
funding to improving the physical infrastructure used by the engineers 
for testing and other purposes. At the Columbia, Maryland Laboratory, 
we have purchased five new spectrum analyzers and three new signal 
generators to enhance our ability to adequately measure emissions. As a 
result of these improvements, we now have the capability to take 
measurements at 110 GHz instead of the outdated 30 GHz level. We also 
have dedicated financial resources toward the purchase of equipment 
designed to measure cellular phone radiation.
Restructuring
    Although managerial goals and engineering equipment are essential 
components of an efficient agency dedicated to high-tech matters, the 
key to ensuring a well-functioning agency is to create an 
organizational backdrop that maximizes human and technological 
resources. On January 17, 2002, the Commission sent the cornerstone of 
its improvement plan to this Committee--a Section 605 Report detailing 
the reorganization of the Commission. We are in the initial stages of 
implementing that reorganization. The Commission's plan is more then a 
simple retooling of an old agency--it represents an important step in 
streamlining the Commission. Although there will be no initial 
budgetary impact from the restructuring, we expect that in years to 
come, the streamlining approach taken here will pay dividends in 
efficiency and good management. I have attached to my written testimony 
a copy of the proposed organizational chart for the Commission.
    We intend to dedicate the bulk of our human resources to continue 
to move forward in these areas, to make the Agency responsive to 
consumer and industry demands and to facilitate telecommunications 
growth and deployment. The best way to accomplish this goal is to 
ensure adequate funding to purchase necessary equipment, improve our 
information technology capabilities, and hire and retain trained 
technical personnel capable of assisting the Commission in its 
decision-making process.
            fiscal year 2003: continuing a year of progress
    It is important to note that all of the reform and restructuring 
efforts started in fiscal year 2001 continue to be limited by the 
available discretionary funding in fiscal year 2002. Currently, 69 
percent of the fiscal year 2002 appropriation is earmarked for salaries 
and benefits. Additionally, 29 percent will cover non-discretionary 
cost increases related to rent and supplies. That amount leaves the 
Commission with two percent of its total appropriation to implement 
reform--streamline operations, enhance technical and economic 
expertise, oversee spectrum management, and provide funds for 
resolution of ongoing enforcement issues such as cramming/slamming. For 
this reason, focussing on improving the funding picture in the future--
i.e., fiscal year 2003--is especially important.
    The $268,327,000 in operational costs requested by the Commission 
for fiscal year 2003 is the bare minimum needed to allow us to continue 
the progress made during the past year. In order to achieve our goals, 
and stay abreast of telecommunications developments, the Commission 
must keep ahead of changes in technology, economics, and the law. 
Accordingly, we are requesting $15,066,000 for critical programmatic 
initiatives. An additional $8,190,000 would be dedicated toward 
uncontrollable cost increases related to salaries, benefits, and 
inflationary cost increases for rent and supplies. The Administration's 
request of $9,765,000 for retirement costs brings the total Commission 
fiscal year 2003 budget to $278,092,000. The fiscal year 2003 
regulatory fee offset for the Commission would be 89 percent of the 
proposed fiscal year 2003 budget, making our direct appropriation 
request from this committee 9.5 percent over our total fiscal year 
budget, or 13.5 percent with the pension costs included.
    From the perspective of funding Commission objectives, the critical 
segment of the overall budget is the $15,066,000 dedicated to 
programmatic initiatives. Of that amount, $4,986,000 will be dedicated 
toward Commission employee training, enforcement, and spectrum 
management initiatives. Due to national security needs identified since 
September 11, 2001, the Commission also will spend $1,000,000 to 
improve internal security and support other security efforts. The 
remainder of these funds, $9,080,000, will improve information 
technology critical to supporting program performance initiatives. With 
these funds, the Commission will improve existing systems to ensure 
compliance with Government-wide standards pertaining to system 
security, accessibility, and financial management.
    In addition to the policy objectives and reform outlined in my 
testimony, our specific objectives for this funding include:
  --Continued expansion of electronic filing and other initiatives to 
        enhance public access and expedite Commission policy decision-
        making;
  --Improved technical and economic expertise of staff;
  --Life-cycle replacement of technical monitoring and testing 
        equipment;
  --Ongoing infrastructure improvements to Columbia laboratory 
        facility;
  --Expeditious and effective response to public requests for 
        assistance and information;
  --Enhancement of information technology infrastructure to make it 
        responsive to changes in the industry; and,
  --Enable the FCC to improve its homeland security posture.
    One of the Commission's main objectives during the next year is to 
maintain a safe and secure working environment for the FCC's employees 
and visitors who frequent the Commission. As with most other agencies, 
the Commission has faced the fallout from September 11, 2001, with 
unanticipated costs. This year we must provide enhancements to a 
variety of activities and programs, including on-site physical 
security; relocation and processing of mail at multiple off-site 
locations; and systems upgrades to ensure that our information 
technology infrastructure has adequate cyber-security safeguards. 
Although we have $1,000,000 specifically set-aside for these projects 
in fiscal year 2003, the Commission also has requested the use of 
excess regulatory fees collected in previous years for fiscal year 2002 
security needs. In addition to receiving full funding, we would 
appreciate a favorable decision related to this request.
    Without adequate support, we will be required to eliminate some of 
the Commission's programmatic initiatives, or cut back on the 
implementation of individual programs. I believe that I already have 
made the hard choices necessary to operate the Commission on as tight a 
budget as practicable. As I outlined in the first part of my testimony, 
the infrastructure and manpower initiatives are interconnected to the 
general health of the agency and the completion of its core mission.
                               conclusion
    The Federal Communications Commission has been using, and continues 
to use responsibly its financial resources to meet the needs of a 
dynamic regulatory, economic, and technological environment. This past 
calendar year, the Commission's staff has handled a new workload based 
on national exigencies, worked toward improving overall agency 
management, and initiated a restructuring process designed to ensure 
that the Commission of today is prepared for the regulatory mission of 
tomorrow. The Commission's budget request is a reflection of an 
imperative need. We have trimmed the fat and focused all available 
resources to follow through on much needed rulemaking matters, reform 
and restructuring, and other essential programmatic needs. I 
respectfully request that this Subcommittee grant the Commission its 
full funding request for fiscal year 2003.
    Thank you. I would be happy to answer any questions this 
Subcommittee may have.


                           SUMMARY STATEMENT

    Mr. Powell. Thank you. I would like to read a brief 
statement concerning the Commission's fiscal year 2003 
appropriations request.
    It is fitting that we have this hearing on March 7, a day 
marked by important historical milestones for the 
telecommunications industry. On this day in 1876, Alexander 
Graham Bell received a patent for the telephone. Fifty years 
later, on the same day, the first successful transatlantic 
radiotelephone conversation took place between London and New 
York. In retrospect, 50 years seems like a very long period of 
time between these achievements. Today, we develop new 
communications products and services at a more rapid speed than 
ever before, in an exponential fashion that makes science 
fiction a matter of science fact within just a handful of 
years.
    Less than 9 months ago, I appeared before this subcommittee 
for the first time and made a personal commitment to effectuate 
fundamental change within the Commission. I guaranteed that the 
Commission as an institution would complete a thorough self-
examination and develop a reform plan designed to make the FCC 
more responsive, efficient, effective, and capable of facing 
the technological and economic opportunities and challenges of 
the new millennium. And, as always, to do so in a fashion that 
always attempts to protect consumer welfare and the public 
interest.
    I believe that the Commission delivered on this promise. We 
sent you a reprogramming request for the FCC's reorganization 6 
months later, in January 2002, and we deeply appreciate the 
chairman's rapid consent to our request.
    I also pledged to enhance the Commission's independent 
technical and engineering expertise. The Commission dedicated 
resources to recruiting, training, and retaining a solid 
technology-oriented workforce under our Excellence in 
Engineering Program. We have, I am happy to report, hired 18 
mid- and senior-level engineers and five entry-level engineers 
this year, more than the FCC has hired in nearly 20 years. We 
instituted training programs to keep current and future 
engineers up to date in their profession. And, we have improved 
the environment for engineers by purchasing equipment to 
facilitate the spectrum management process and to upgrade the 
Columbia, Maryland, laboratory's testing capabilities. Our 
ongoing efforts in this regard, coupled with the agency's FCC 
University and Excellence in Economic Analysis initiatives, 
hopefully will preserve our existing wealth of FCC staff 
knowledge and expertise and enhance and extend that collective 
knowledge into the new millennium.
    When I first appeared before this subcommittee, I pledged 
to make the Commission a model of solid management practices. 
As such, the Commission moved forward to continue to streamline 
agency processes and procedures, automate agency processes, 
provide improved access to agency information, and modernize 
its information technology infrastructure. During our January 
2002 Open Agenda Meeting, the Commission's staff delivered--
with statistics showing substantial improvement in backlog 
reduction levels and other management benchmarks.
    Finally, I also vowed that the Commission would use the 
remainder of its fiscal year 2001 and expected fiscal year 2002 
funds to implement its statutory mandates. In this regard, the 
Commission has demonstrated during the past calendar year a 
continuation of steadfast commitment to its regulatory purpose. 
The fundamental mission of the Commission, as a constructive 
and fair independent agency, is to implement the Communications 
Act of 1934, as amended, in a manner that promotes competition, 
innovation, deregulation, and the availability of high-quality 
communications services for all Americans. I am confident the 
Commission has met this and the rest of our commitments and, in 
doing so, has achieved significantly higher levels of policy 
and management performance.
    The Commission has made these achievements, however, 
against the backdrop of tragic and dramatic national events. 
The events of September 11, 2001 provided us with an important 
lesson in the significance of the FCC's portfolios and the 
networks that it oversees. We know now that our society has 
developed more than just an appetite for communications 
services. America is heavily dependent on these services in 
times of crisis and in times of peace. A strong and competitive 
communications network is essential to a healthy economy, and 
our Nation depends on both, whether to bolster its ability to 
defend itself or to communicate in times of normalcy.
    I am unwavering in my commitment to implement the long-term 
business plan outlined in my full written statement. To 
effectuate our stated goals, however, the FCC has requested 
$278 million and 1,975 FTEs for fiscal year 2003. This request 
includes $9.8 million to fund the administration's Government-
wide proposal to fully fund retirement costs in each agency's 
budget.
    The Commission's requested operating costs are $268.3 
million. These operational costs requested by the Commission 
for fiscal year 2003 are the bare minimum needed to allow us to 
continue the progress made during the past year. In order to 
achieve our goals and stay abreast of telecommunications 
developments, the Commission must keep ahead of changes in 
technology, economics, and the law. Accordingly, we are 
requesting $15 million for critical programmatic initiatives. 
An additional $8 million would be dedicated toward 
uncontrollable cost increases related to salaries, benefits, 
and inflationary cost increases for rent and supplies. The 
administration's request of $9.8 million for the retirement 
costs brings the total budget to $278,092,000. The fiscal year 
2003 regulatory fee offset for the Commission would be 89 
percent of the proposed fiscal year 2003 budget, making our 
direct appropriation request from this committee a 9.5 percent 
increase over total fiscal year budget last year, or 13.5 
percent if you include the administration's pension costs.
    From the perspective of funding Commission objectives, the 
critical segment of the overall budget is the $15 million 
dedicated to these initiatives. Of that amount, $4.9 million 
will be dedicated toward Commission employee training, 
enforcement initiatives, and spectrum management initiatives. 
Due to national security needs identified on September 11th, 
the Commission will also spend $1 million to improve internal 
security and support other security efforts. The remainder of 
these funds, $9 million, will include information technology 
critical to supporting program performance initiatives. With 
these funds, the Commission will improve existing systems to 
ensure compliance with Government-wide standards pertaining to 
security, accessibility, and financial management.
    This year, Senators, you have my personal pledge to 
continue driving forward in a patient and deliberate manner--to 
handle the expected and the unexpected, from homeland and 
internal security to biennial reviews and an expected influx of 
271 long-distance applications, as well as pending major merger 
reviews, just to name a few.
    The Commission intends to use its expected funding to 
continue its campaign to upgrade the facilities, as well as to 
initiate and complete critical rulemakings.
    The present request is the minimum amount necessary to 
continue to capitalize our past success and to carry us through 
the immense challenges of the next fiscal year. Already, fiscal 
year 2002 has been marked by a tidal wave of expected and 
unexpected events and policy and regulatory issues. I expect 
fiscal year 2003 to be at least as opportune and challenging.
    For that reason, I respectfully request that this 
subcommittee grant the Commission its full funding request for 
fiscal year 2003. I thank you for your indulgence, and I am 
happy to answer any questions the subcommittee might have.
    Senator Hollings. Chairman Powell, we have no doubt about 
your management abilities. When you state you are going to 
drive forward and take care of all these challenges, however, 
you need to understand that as the Chairman of the FCC all you 
need to do is to take care of the laws that we pass. And you 
have just that responsibility. Instead, you seem to abandon 
that responsibility and assign it to the market. And you stated 
just 10 days ago, ``My religion is the market.'' You don't care 
about these regulations. You don't care about the law or what 
Congress sets down. Working for the public interest, you have 
to have the attitude to look out for the public interest, and 
you say the public interest is about as empty a vessel as you 
can accord a regulatory agency. That is the fundamental. That 
is the misgiving I have of your administration over there. It 
just is amazing to me you just pell-mell down the road and seem 
to not care at all. I think you would be a wonderful executive 
vice president of a chamber of commerce, but not a Chairman of 
a regulatory commission at the Government level. Are you happy 
in your job?
    Mr. Powell. Extremely.
    Senator Hollings. And you do think that your religion is 
the market? Is that right?
    Mr. Powell. I don't recall ever saying that, but----
    Senator Hollings. Well, you were quoted in USA Today just 
on February 25, and the other quote I used was from the 
American Bar Association, specifically the submission that you 
made with regard to NextWave. I am reading to you the law. This 
bothers me because we have got an important appeal by the 
Federal Communications Commission before the United States 
Supreme Court, and it is disturbing that perhaps the Commission 
won't make an authoritative kind of appeal.

                        1934 COMMUNICATIONS ACT

    You are talking with all that history and Ma Bell and 
everything. Let's go back 68 years ago to the 1934 
Communications Act. Let me read from the Act. ``It is the 
purpose of this Act''--I am reading Section 301. ``It is the 
purpose of this Act, among other things, to maintain the 
control of the United States''--that is the word, ``control,'' 
not the distribution and taking care of all the new challenges 
and everything else that you might think of but, rather, the 
congressional control that has been assigned to you--``the 
control of the United States over all the channels of radio 
transmission and to provide for the use of such channels, but 
not the ownership thereof''--``not the ownership thereof''--
``by persons or limited periods of time under licenses granted 
by Federal authority, and no such license shall be construed to 
create any right beyond the terms, conditions, and the periods 
of the license.''
    Yet you were going along with the market. A good 
arrangement and everything else, like it had absolutely nothing 
to do with that. Do you think that is the law?
    Mr. Powell. I absolutely think it is the law. I also think 
that the law indicates that there are benefits and market 
economics for the public interest.
    Senator Hollings. What is that?
    Mr. Powell. I think that the law also recognizes that the 
use of market forces can be concomitant with the public 
interest.
    Senator Hollings. But there is no public interest feature 
to that particular categorical provision, is there?
    Mr. Powell. Certainly there----
    Senator Hollings. You think, in other words, that with the 
public interest you can amend that law?
    Mr. Powell. No, sir. But I think that the public interest 
confers on the Commission a duty and obligation to implement 
the statute where there are ambiguities and to look for the 
mechanisms using regulatory tools, including uses for fostering 
competitive market economics, that will enhance overall the 
consumer welfare.
    I could also quote provisions of the statute that speak in 
those terms.
    Senator Hollings. That is a wonderful statement for a 
chamber of commerce executive, but being the Chairman of the 
regulatory body, where in there is there any discrepancy or 
vagueness or anything else like that? I don't know how to 
categorically state it more. In other words, assuming we lose 
the case--I have thought about that, and if we lose the case, I 
don't know how to state it better here when it says ``the 
control of the United States over all the channels'' and 
``provide for the use of those channels, but not the ownership 
thereof.''

                             NEXTWAVE CASE

    Now, you wanted to vest the ownership in the NextWave case 
into the bankrupt agency, and it could have no ownership 
whatsoever. They only had a license, and the license was 
automatically revoked under the terms of the auction. Where was 
all that at the big hearing you had and the big brief you had 
and the testimony you gave over on the House side?
    Mr. Powell. I think it was there. Senator, I am the one who 
sought certiorari from the----
    Senator Hollings. You did what, sir?
    Mr. Powell. I am the individual who sought certiorari in 
the Supreme Court on the NextWave matter. I am the one who 
argued for it vociferously, was quite pleased to see it 
granted. If you will recall, you called me last summer on 
vacation, and we discussed this matter, and I committed to you 
the continued pursuit of the litigation.
    Senator Hollings. But you ran in both directions. You 
pursued the litigation, but you got rid of the litigation in a 
deal that would vest ownership.
    Mr. Powell. That is not accurate. Nothing in the deal led 
to the termination of the Supreme Court case. I absolutely 
insisted that any effort to try to settle the matter would not 
moot the Supreme Court case. Nothing in that agreement did so.
    Senator Hollings. Well, I can see we have just got a 
fundamental difference of opinion, but I was pleased this 
morning when I saw the article by the most conservative of 
conservative writers, William Safire, ``The Urge to Converge,'' 
with ``the round-heeled Michael Powell steering the Federal 
Communications Commission toward terminal fecklessness.''
    I don't say that to hurt your feelings and all, but I am 
trying to denote there is a disturbing sense in the Congress, 
your particular administration, particularly now that we have 
got this hiatus going on relative to the deregulation of the 
Bell Companies. They have veritably voted it in the Tauzin-
Dingell bill over on the House side, and we will be considering 
it here, have a hearing on the 20th with Mr. Tauzin himself. 
But it seems like you are trying to get with the notices you 
have given for the Commission on hearings in this regard, you 
are trying to outdo the Congress before we can get to that or 
before even Tauzin can get to it.
    Mr. Powell. I don't think so. The broadband item that I 
think you are making reference to has a very fundamental 
difference from anything being considered by the Congress. I 
think as you point out, the Commission can only do what it can 
within the context of the law. The Commission cannot change the 
law. The Congress is free to modify the statute itself. We are 
not. And I do not generally agree with some of the 
characterizations put forth in media that the item is the 
functional equivalent of currently pending legislation in 
Congress. I think that we have stated for many, many months, 
long before the heated aspects of this particular legislation, 
that there were areas that presented important regulatory 
questions.
    We have a number of courts around the country have 
criticized the Commission for not clarifying the regulatory 
classification of these new emerging services, and I think it 
would be irresponsible for us to continue to leave those 
questions unanswered in the context of the increasing growth of 
new Internet access services.
    Senator Hollings. Senator Gregg.
    Senator Gregg. Thank you, Mr. Chairman.
    To continue this discussion, I do find it ironic that 
members of the other side of the aisle are suddenly outraged 
that there may be someone who they perceive as pursuing 
regulatory overreach. It was the philosophy, it appears to me, 
of the other side of the aisle during the prior administration 
for there to be dramatic overreach by the regulatory agencies. 
But I don't see your agency doing that, anyway, so I don't 
think it is necessary to defend you on that turf.

                          TAUZIN-DINGELL BILL

    I do have some questions, however. I would be interested in 
your giving us your analysis of the Tauzin-Dingell bill.
    Mr. Powell. I think I am enough of a politician not to do 
too much of that.
    The best that I can say is that I think the Tauzin-Dingell 
bill, to the extent that I understand it--and I would have to 
confess that I am not intimately aware of its most recent 
details--is an effort to modify the statute itself with respect 
to specific limitations and regulations, in an effort to 
dramatically stimulate and in some cases require the deployment 
of new and advanced infrastructure and architecture.
    I do not have an opinion about whether those sweeping 
efforts are meritorious or compelled by the market conditions. 
I think that we can, at the Commission, make substantial 
progress in clarifying the regulatory environment and 
introducing incentives to stimulate broadband deployment that 
will be meaningful and will have consumer benefits even within 
the context of the statute unchanged by legislation.
    Senator Gregg. Well, you sort of initiate something here 
which is called--it has actually been referred to as a national 
broadband policy in the FCC. How do you see that staying within 
the context of the present law?
    Mr. Powell. I think that the present law was quite 
thoughtful in at least being anticipatory of these kinds of 
changes. For example, one only needs to look at the preamble to 
the 1996 Act to find support for those objectives: ``an act to 
promote competition and reduce regulation in order to secure 
lower prices and higher-quality service for American telecom 
consumers, and encourage the rapid deployment of telecom 
technologies.''
    Under Section 706, we are tasked with encouraging the 
``deployment on a reasonable and timely basis of advanced 
telecommunications capabilities to all Americans'' utilizing 
regulatory methods that remove barriers to infrastructure 
investment.
    We believe that one of the central things the Commission 
needs to do in this space is to clarify the regulatory 
classifications of new and emerging services that have 
characteristics of different definitions, not our definitions, 
but those that exist in the statute.
    The statute covers multiple classes of communications and 
attaches different regulatory treatment to each one. If you are 
a cable service provider, certain regulatory obligations exist, 
certain do not. The statute defines information service 
providers; certain obligations apply to them, certain do not. 
And, it defines telecommunications carriers, in the same way.
    When we begin to have convergence and new services entering 
the space with new characteristics, questions arise as to which 
proper classification should be applied to them, and then 
subsequently, what are the consequences for regulatory policies 
and concerns?
    This item is designed to be responsive to that first 
question principally. How should we classify under the 
statute's definition these new emerging broadband services? And 
I think just as importantly, which I think often is omitted in 
the anxiety expressed in press reports, the Commission tees up 
ways to protect all types of regulatory policies and concerns 
that are implicated by that definition.
    So I think we are operating within the statute because we 
are trying to figure out which of the statute's classifications 
govern which service. It is our duty to figure out which 
provisions of the statute we continue to apply and how they 
would continue to apply. I would conclude by emphasizing, that 
if there are problems, including market power and anti-
competitive and access concerns--the Commission also has 
extensive power that Congress conferred to it in 1934 under 
Title I. In fact, the Commission has regulated access terms and 
conditions of information services for the better part of two 
decades, using its Title I authority, and has been upheld by 
the courts in doing so.
    To the extent that there are categories of services that 
will not have specific Title II attached to them, we will have 
Title I authority to exercise in order to protect important 
governmental interests.
    Senator Gregg. Well, trying to reduce that to a simple 
statement, what happens last mile?
    Mr. Powell. What happens last mile?
    Senator Gregg. Yes.
    Mr. Powell. The last mile is the most important part of 
broadband deployment. A number of things can happen 
increasingly because that last-mile loop, depending on its 
construction, may be capable of doing any number of things at 
the same time.
    One of the things I think Congress thought about is 
focusing on the services being provided and not the nature of 
the technology underlying it. So what will start to happen, if 
we continue in this direction, is we will begin to try to 
classify regulatory treatment, not by the nature of the 
technology that is that last mile, but the nature of what 
services are being offered over it.
    For example, when America Online or Earth Link or Juno or 
any number of the major ISPs offer high-speed Internet access 
service over that infrastructure, they are being regulated as 
information services, and they are doing so in a much less 
regulated way than the provision of telecommunications services 
over that.
    So what happens is greater granularity on regulatory 
treatment, depending less on the architecture and more on the 
nature of the services being provided.
    Senator Gregg. Does that mean you are going to end up 
asking them to share the last mile?
    Mr. Powell. Yes. I think that to some degree they have to 
share the last mile, and I think that part is faithful to the 
statute as well.
    Section 251 compels access to those unbundled elements for 
particular kinds of services that still will have to be 
available.
    If there are questions about other types of services that 
do not have those obligations attached to them, our computer 
inquiry decisions--sorry to use more historical regulatory 
approaches--continue to affix to those services, and they, at 
least for the moment, will have to be provided on an unbundled 
basis as well.
    Senator Gregg. I know I don't have all the time in the 
world. I would like to pursue this into the long-distance 
question.
    Senator Hollings. Go right ahead.
    Senator Gregg. But let me switch and go on to a question 
which is more parochial and more to my own interests, which is 
the NextWave issue that the chairman raised.
    This committee has kept its finger in the dike on that 
issue through a number of Congresses, and then was replaced by 
the court system and by the FCC carrying the ball on this 
question. But that risk here is somewhere in the vicinity, 
depending on whose estimate, of $12 to $16 billion of what I 
believe are taxpayers' moneys.

                       OWNERSHIP OF THE SPECTRUM

    And my question is: When the FCC files its briefs, what 
will be the theory of the brief, if you are willing to disclose 
them at this time? And will it be based on the belief that the 
ownership of the spectrum is a taxpayer asset?
    Mr. Powell. Absolutely. The Commission, I think, has fought 
this long consistently on that principle, the belief that we 
are not another creditor in bankruptcy, and that no property 
rights attach to spectrum in auctions. I do not even think that 
is a disputable proposition under the statute, which expressly 
states that there are no property interest or ownership 
interest rights in the spectrum.
    The difficulty in the context of auctions is we have been 
treated by the court systems as a creditor and subject to the 
bankruptcy limitations thereof. I thought very strongly that 
the D.C. Circuit opinion was wrong. I thought it was wrong 
because I think it denied the regime that Congress established 
for the allocation of public spectrum and the Commission's 
rights under that statutory provision to reclaim its property, 
the property of the public, when a person defaults on the terms 
and conditions established for its permissive use.
    I always have believed a license automatically cancelled. 
Everything that we have done has preserved that principle. So 
even in the context of the Supreme Court case--and you can see 
some of this in our cert petition that was granted--we argue 
quite strongly that the D.C. Circuit failed to provide the 
appropriate deference with regard to the telecommunications 
policies of the United States and that the Bankruptcy Code 
should not be interpreted as in conflict with that.
    Hopefully that got the court's attention, and hopefully 
that will be the basis of reversal of the D.C. Circuit's 
decision.
    Senator Gregg. Well, I certainly hope so, too, and I 
believe that the Congress has a legitimate interest here, too, 
as the protector of the taxpayers' rights here. And I hope we 
will file an amicus brief on behalf of your position.
    One last question, and then I would yield my time. The 
Northpoint issue. I just don't understand why it has taken so 
long to get a decision, number one; and, number two, I don't 
understand why you would have to go back to auction since, as I 
understand it, the technology is only--it is agreed that the 
spectrum can be shared, and the technology is understood to 
exist, and there is only one group that met the requirements of 
filing necessary. So why aren't we just making a decision on 
this thing and moving forward?
    Mr. Powell. Well, I do not really want to offer any 
excuses. I had hoped the Commission would be done with this at 
the end of last year. It has failed to do so. I think that is 
unfortunate.
    I would say that we did put an item on the floor in 
November. I personally have voted for the item. I am awaiting 
the votes of some of my colleagues who are continuing to 
wrestle with particular questions. I continue to urge them to 
do so expeditiously.
    Regrettably, it is not appropriate for me to talk 
specifically about the merits of pending issues, including 
whether to auction or not to auction, which, candidly, have not 
been resolved until there has been a majority conclusion as to 
those questions.
    I continue to hope and push hard for a decision, and I 
would still like to characterize it as imminent. I would love 
to talk to you in more detail, perhaps privately or in a 
context consistent with our ex parte rules, about the specific 
merits of the pending claims, but I am not permitted to do so 
in this forum.
    Senator Gregg. I appreciate that. Thank you.
    Senator Hollings. Senator Stevens.
    Senator Stevens. Well, thank you very much.

                         UNIVERSAL SERVICE FUND

    Mr. Chairman, I commend your notice of inquiry on ways to 
finance the Universal Service Fund. I am a little worried about 
that, as we have talked about privately. I do think that the 
fund was created originally to assure that rural America could 
keep up with continuing developments as far as 
telecommunications is concerned, and now the major drains on 
the fund are for the inner-city applications of the E-Rate.
    There is a proposal pending to increase the fund by $500 
million to provide additional resources to schools and 
libraries, and that is, again, inner-city money. It is coming 
down at an enormous rate.
    Can you tell me, what do you see for the future of 
universal service under these circumstances?
    Mr. Powell. Well, as we have discussed, I think the 
Commission, too, shares some of your concerns, and indeed it 
has initiated a number of proceedings to begin to explore 
perhaps modifications to the collection and contribution regime 
in order to ensure, as the statute requires, the preservation 
and advancement of the objectives as well as their sufficiency.
    I also think that the Commission has been somewhat bold and 
willing to start to entertain whether the threats to the 
universal service program are sufficient to begin to justify us 
to consider exercising the discretionary authority that you 
gave us to extend contribution obligations to carriers that are 
not specifically telecommunication carriers but use 
telecommunications.
    Heretofore, we have never done that, and it may not yet be 
warranted. But it seems to me that under Section 254(d) the 
Congress anticipated that possibility and gave us discretionary 
authority to extend the pool of people that contribute in order 
to protect their sufficiency.
    Indeed, in the broadband item, as controversial as it may 
be, more ink is dedicated substantively to the questions about 
universal service than any other subject in the item. Indeed, 
we openly ask questions about to what degree universal service 
will be impacted by the rise of advanced services and whether 
some honest consideration of whether the extension of 
contributions is warranted.
    We did not reach any conclusions, but we did put those 
important questions on the table, and, I would note, over some 
dissent. That is an area in which I think that we have one of 
our most sacred regulatory obligations. I think we will 
continue to push for new and creative ways to allow that 
program and the objectives to continue to flourish.
    I also think one of the values of the promotions of some of 
the newer and advanced technologies is they have enormous cost 
benefits, many of them. In many ways they have the potential 
for solving parts of our universal service anxieties by virtue 
of their much more efficient infrastructure and architecture. 
So I think in some ways a pro-new-technology approach is also a 
pro-universal service approach in that we at least see the 
possibilities through getting companies to migrate to more 
advanced architectures to lower the cost of the provision of 
those services, which has always been the problem for rural 
America and places like Alaska.
    As you know and since you fought so hard for DBS services, 
providing video components to the State of Alaska was vital. 
Through the use of new technology, it allowed it to lower the 
traditional costs associated with having to wire such a large 
region.
    So those are the major things we are doing, and we do share 
some of your concerns.
    Senator Stevens. But you are proposing new rules for 
broadband, as I understand it, and I think that those two have 
a real impact on the continuing expansion of the demand on 
universal service. But I have got to tell you, when I look at 
some of the places up our way which have never had 
communications services before and are now getting 
communications services for schools, libraries, and health 
facilities. However, they are not getting it in the rest of the 
city or village at all, and I wonder seriously about the 
policies we have set to extend so much money to the inner 
cities while we still have many places in the country with no 
service at all, except for the schools, libraries, and health 
facilities in those communities. We are leaving a lot of people 
behind. There is a line of thinking now that considers the E-
Rate connection to a small area pipe. If that pipe isn't full, 
they think maybe they can lease that pipe out to someone else. 
We are seeing the fudging the concept of E-Rate in order to 
extend service to those that are left behind. I think we ought 
to be right up front and admit that we have got to have two 
funds: one for rural America and one for the inner city. Right 
now, this is just a way to take money from the rural fund and 
put it into areas where the Congress has not provided enough 
money to assist the inner core cities for schools. I have heard 
of portions of schools actually being rebuilt with the E-Rates 
in inner cities.
    I don't want to belabor it, but I do hope that in the 
future universal service remains one of the really predominant 
goals of the Commission to assure that rural America keeps up 
with the rest of the country as we progress.
    You did comment on Senator Gregg's question about the 
Supreme Court case on NextWave and the position of--I don't 
know if we are going to file an amicus brief or not, but what 
about the problem of the delay? The further the delay extends, 
the less merit there is to whatever the Court decides. If it 
agrees with you, it is going to go back to the bankruptcy 
court, and we will start all over again getting a decision. It 
will be appealed right back up through the chain again. 
Meanwhile, the money is sitting there, and the spectrum is tied 
up, which is vital, really, to the recovery of the whole 
industry.
    Have you given thought to asking us to find some way to 
resolve this issue, as we almost did last year with the 
approval of some mechanism that would bring about a settlement 
so this matter could be resolved within the industry itself 
with your approval?
    Mr. Powell. Yes, sir. As we have asked, I think repeatedly, 
for any number of years--and I am looking at three members who 
have been extremely supportive of our efforts to try to avoid 
this problem with the law and change it--I still think that the 
public interest is served in some ways if Congress altered the 
law and made the modification, because if they could do that, I 
believe that we could get the spectrum into use much more 
expeditiously.
    I believe 100 percent in my case, and I believe I have the 
opportunity to win it. I also know it is going to come at a 
huge cost because I cannot do anything about the extraordinary 
delay that will be a consequence of it.
    This case is not likely to be argued until next term. At 
best, we are going to have a decision in January 2003, perhaps 
as late as June 2003. There were very critical issues that the 
D.C. Circuit did not decide because it thought their order took 
care of everything, so I would anticipate even if we won, we 
will be remanded to the D.C. Circuit for resolution of those 
issues. Even when we get through that, we are in bankruptcy 
court again for the allocation of rights under the statute.
    I think that one of the reasons I did, somewhat reluctantly 
but willingly, accept an effort to try to settle the case 
previously was because I think the public's interest is not 
exclusively in the money that it would provide; it is also in 
having spectrum put to productive use. While I believed in the 
case, I believed that it would cost the consumer the ability to 
make use of that spectrum for a very long time, perhaps 2 and 3 
years more.
    We only have two options, though. I agree with Senator 
Hollings. First and foremost, this legal principle has to be 
rectified, and I do not think there is any real opportunity for 
a good, productive resolution of the claims without being 
assured that this component is completed. And there are only 
two ways, either our continued pursuit of the case or an act by 
the Congress that removes that risk for future auctions and 
would allow us to pursue other options to get the public its 
money and the public its spectrum.
    But we are committed to the long course of the case if that 
is the preference of this institution.
    Senator Stevens. I am still committed to try and work it 
out so that spectrum can be put into use. I remember too well 
the meeting we had that indicated the status of our industry 
and the global economy of telecommunications is severely 
limited because of the availability of spectrum right here at 
home. I really think we should do something about it.
    Let me shift gears, though. When the World Trade Towers 
came down, KNET, the public station, went down and it has not 
been able to go back up. It tried to get other providers like 
satellites to help them, but that was refused.

                     EMERGENCY BROADCAST PLATFORMS

    Do you have the authority to require other platforms or 
carriers to broadcast signals in times of emergency and post-
emergency periods? And if you don't, do you think Congress 
should give that to you?
    Mr. Powell. That is a good question. I do not know the full 
range of that. To some extent, the answer is partly yes in 
advance because the cable companies, for example, under the 
must-carry obligations carried them. For example, in New York, 
we lost a lot of broadcast stations initially, but a lot of 
consumers still had access to that local broadcast feed over 
the cable architecture which they were watching as opposed to 
over the air. That was a benefit.
    I would have to look specifically at questions like whether 
we have the authority to direct broadcast satellite carriage, 
although Congress has required must-carry there as well, and 
that is progressing.
    The Commission recognized this concern. We have long had 
Federal advisory committees that helped us with these network 
security emergency issues in the phone system. We recognized 
that we did not have the functional equivalent in the broadcast 
or communications, news types of system. One of the things we 
have just announced is that we are creating a companion to the 
telephone service's system called NRIC. We are creating a 
network reliability group to focus on media issues in times of 
emergency and looking for ways to develop mutual assistance 
planning so that if there was critical news and information 
that was not available because of an outage, there would be 
perhaps some effort to shift coverage and responsibility.
    A number of other major cable channels fortunately also 
were willing to convert capacity to broadcast signals. For 
example, the Viacom properties that covered--they normally 
carry things like MTV and other of their cable programs, 
switched to the local broadcast feed for coverage in the New 
York City area.
    We are looking for ways to make that not coincidental and 
gratuitous, but hopefully a little more planned for and 
anticipated.
    Senator Stevens. Well, I hope you will notify this 
committee--and there is also the Commerce Committee--if there 
is something that we need to do to extend your powers in order 
to meet those emergency situations.

                           DIGITAL CONVERSION

    My last question, Mr. Chairman, pertains to digital 
conversion. The public and commercial broadcasters in my area 
of Alaska, Anchorage, have developed a plan to allow them to 
meet digital conversion deadlines by providing full service to 
the vast geographic area in the Anchorage area. Because of our 
unique geographic conditions, it will require the use of two 
towers, and both digital and analog spectrum.
    Now, we were told yesterday--Mr. Stewart has indicated the 
Commission may not have legal authority to approve this plan. 
We think this is a crisis for our area, and we would like to 
move forward as rapidly as possible. I would appreciate it if 
you would contact your people and see if there is a change in 
the law that is required in order to approve this rather unique 
partnership that has been formed in our State with public and 
commercial broadcasters. It ought to be a model for the rest of 
the country, but I am disturbed to learn that what they have 
worked on now may be beyond your legal authority, and I would 
appreciate it very much if you would look at it and give us a 
report on it. I don't expect an answer now, but I would 
appreciate it very much because I think they have worked very 
hard and have got a format now that allows conversion for 
public and digital broadcasters at a much lower cost and within 
the time frame anticipated by Congress. And it would be 
difficult for us to wait for Congress to act in the future if 
that is the case.
    Mr. Powell. We will get you at least an answer on where we 
think the legal authority exists very quickly.
    Senator Stevens. Thank you for your patience, Mr. Chairman.
    Senator Hollings. Thank you, Senator.

                       VIEW ON ABOLISHING THE FCC

    Chairman Powell, reference has been made to a political 
view of your regulatory commission, and I readily acknowledge 
that there is the view that we ought to just abolish the FCC. 
In fact, you referred to Section 251 of the Tauzin-Dingell bill 
that abolishes your oversight responsibility. You, the FCC, and 
the State Commission under Section 4(a) no longer will have 
authority over the access to the Bell monopolies. But be that 
as it may, I want to emphasize, since you brought in the 
history of the thing, that you do not advocate abandoning your 
regulatory authority to the market. We know what market forces 
do to communications. Back in 1912, when Sarnoff got on top of 
the Wanamaker Building, and the Titanic sank, everybody got 
into wireless, and by the mid-1920s, the communications 
industry begged Herbert Hoover, then-Secretary of Commerce, to 
please regulate us because everybody was using all the same 
frequencies, and there was nothing but a jamming. Nobody could 
hear anybody. So that resulted in the 1934 Act.
    Otherwise, I think of the loss the day before yesterday of 
a distinguished chairman here, Howard Cannon, who chaired the 
Commerce Committee. We had the airline deregulation, and we 
thought it wise that, by gosh, there would be no question that 
we would not only deregulate, we got rid of the deregulatory 
entity, namely, the Civil Aeronautics Board. And there have 
been bankruptcies and takeovers, in fact, regulated European 
takeovers of the unregulated American airlines, many of them 
facing bankruptcy. And you will get the wiseacres who will come 
up and say deregulation is fine. But it has ruined the airline 
industry.
    Knowing that, in 1996, we did not do away with the so-
called CAB, namely, you, the Federal Communications Commission. 
We wanted a regulatory body to oversee in a deliberate way 
total deregulation. Now, of course, the bottleneck in it is the 
Bell companies that lied. They begged and begged and begged. I 
know, because I helped write that thing, and I met with Jim 
Cullen from Bell Atlantic that represented all seven of the 
monopoly Bells, and it was a 4-year hiatus getting that bill 
out. And at all times they said we want to get into long 
distance, we want to get into long distance, by gosh, 
deregulate us, we want to compete, we want to compete. We 
passed the 1996 Act, and instead of competing, they combined. 
And that is exactly what is written about in the New York 
Times, merger mania that seemingly is approved again and again 
by the Commission. And so we have just got bigger monopolies, 
and if it continues, we will be back to AT&T. And regarding Ma 
Bell, if we can't get it done in the Congress, we will have to 
get a Federal judge.
    That is what goes through a lot of minds here in the 
Congress. You can look at that debate over on the House side. 
They have got me, you know, I am adamantly against it, and how 
much I am a big friend of AT&T. I told the head of AT&T just 
last week, Mr. Armstrong, I said, You know, I know intimately 
the Bell South crowd down in South Carolina. I can't name who 
represents you down there in South Carolina. I have gotten 
contributions from both.
    But I do have a feel for the wonderful Federal 
Communications Commission. I have been working with it now for 
over 35 years, since we started, and to see it just go pell-
mell down the road with these statements made that the market 
is your religion and you don't know where in the world can 
anybody discern or find a public interest, that is about as 
nebulous as anything. And then the rulings that we have, it is 
hard to play catch-up ball over here at the congressional level 
with your administration of the Federal Communications 
Commission.
    We don't want to cut you short on money. We will give you 
all the money because you have got many, many questions before 
you. But just mind you me, we are passing the rules and 
regulations and the policies, and it is your responsibility to 
administer those regulations and those policies, not the 
market. That is why we have got you. There are some who want to 
get rid of you, and in part that is what Tauzin-Dingell does. 
That is what bothers me. AT&T and Bell South don't want to get 
rid of you. I have got a lot of friends in Bell South. I would 
like to get one of their retirement policies and get on their 
board.
    Mr. Powell. Me, too.
    Senator Hollings. They are in 22 countries. They are very 
competitive, and I have followed them, and they are making 
money. I don't know why their stock is down. If they ever get 
this monopoly expanded, it will go through the ceiling. You buy 
some. Call me and we will both buy it.
    But let's look at this thing objectively. Competition does 
count, and we have got a dynamic, competitive situation all 
over communications, save 93 percent of that last line into the 
home and business, is still by those Bell monopolies. They 
squatted in the middle of the road. They questioned the 
constitutionality of the act. They have taken us through a 
legal gymnast of a 6-year period, and we are not getting 
anything done. And if they go forward, they have gotten so bold 
now with Tauzin-Dingell that they have got no idea of 
deregulating or competing.

                     ADDITIONAL COMMITTEE QUESTIONS

    We appreciate your appearance this morning.
    Mr. Powell. Thank you, Senator.
    Senator Hollings. Thank you very much.
    [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 Ernest F. Hollings
    Question. As stated, in its broadband NPRM, the FCC concluded that 
broadband Internet access service is an information service, and the 
transmission component of the service is telecommunications, rather 
than telecommunications services. If the FCC concluded that the 
transmission component is not a telecommunications service would that 
mean that competitors would not be able to obtain unbundled network 
elements (consistent with the requirements of section 251) in order to 
provide DSL or broadband service? Under what authority could the FCC 
impose such requirements for DSL service?
    Answer. Although the Commission will decide this issue through 
statutory interpretation in our Broadband NPRM proceeding, 
classification of the transmission aspect of an information service as 
``telecommunications'' would not preclude competitors from obtaining 
unbundled network elements. For example, one possible reading of 
Section 251(c)(3) of the 1996 Act is that the availability of elements 
turns on whether the competitor offers a ``telecommunications 
service.'' Thus, competitors who choose to offer DSL separate from 
Internet access could, under this one possible reading, obtain network 
elements to provision that offering. As I have stated, however, the 
Commission will resolve this issue in the Broadband NPRM proceeding.
    The Broadband NPRM seeks to develop a robust and comprehensive 
record on the obligations that providers of wireline broadband Internet 
access service, including the incumbent LECs, may face under the Act if 
we adopt the tentative conclusions that your question references. In 
particular, the Commission, in the Broadband NPRM, asked several 
questions regarding the implications and interplay between the 
tentative conclusion that wireline broadband Internet access service is 
an information service and the obligations in section 251, including 
the unbundling obligations. The Commission will, of course, implement 
and enforce the law, including unbundling of the local loop for 
telephone service, regardless of its ultimate conclusion with respect 
to the classification of wireline broadband Internet access service. 
Moreover, the Commission has authority pursuant to Title I of the Act 
to impose access obligations for the provision of services falling 
within Title I. Indeed, the Commission exercised this authority in the 
Computer Inquiries proceedings, which initially recognized distinctions 
between telecommunications and information services. My hope is that 
the record on these questions will inform our understanding and help 
shape future Commission policy regarding the ability of competitors to 
obtain unbundled network elements for broadband services.
    Question. If CLECs and ISPs are unable to obtain Bell facilities in 
order to provide broadband service, would this allow the ILECs to 
leverage their existing local monopolies into the broadband and 
Internet business and residential markets? If so, how would this result 
be consistent with the competitive requirements of the 1996 Act, and 
the FCC's own longstanding precedent in the Computer II and Computer 
III cases?
    Answer. At the outset, I would note that ILECs' ability to leverage 
their market power in local telephony would be constrained by the 
presence and growth of other broadband providers, such as cable modem 
service providers. For example, cable modem providers enjoy a marked 
lead over ILEC broadband DSL providers in terms of buildout and 
subscribers, particularly in the residential markets. With such real 
broadband alternatives available to consumers, ILECs will risk losing 
subscribers to cable if they attempt to exercise market power.
    That said, the Commission's mandate under the 1996 Act is to 
encourage robust competition among various communications providers. We 
are therefore examining the regulatory requirements that should apply 
to the provision of broadband services so that we can preserve and 
encourage opportunities for broadband competition in light of the 
ILECs' position in the local exchange market. The Broadband NPRM seeks 
comment on whether the Computer Inquiry requirements, which provide for 
access to Bell facilities based on assumptions shaped largely by 
certain service and market characteristics that were prevalent decades 
before passage of the 1996 Act, should be modified or eliminated for 
the nascent broadband market. Notably, we have not reached any 
conclusions, tentative or otherwise, on whether to require access to 
Bell facilities to provide broadband Internet access service.
    We are conducting the Broadband NPRM in conjunction with the 
Incumbent LEC Broadband Notice in which we are examining the 
competitive characteristics of the domestic broadband 
telecommunications services market and the appropriate regulatory 
framework that should apply to the incumbent LEC provision of these 
services. We recognize that the findings related to market power that 
we may make in that proceeding can inform our decision in the Broadband 
NPRM. Specifically, to the extent that the Commission finds there is 
sufficient competition in the broadband telecommunications services 
market to warrant modification of some or all of the Computer Inquiry 
requirements, but not enough competition to warrant complete 
deregulation, we will consider alternative requirements.
    Question. Could you share views as to how the FCC's broadband NPRM 
will impact existing CLECs and ISPs seeking access to incumbent 
networks in the market? In answering this question please explain your 
view as to the NPRM's impact on market certainty, private capital's 
flow to competitors, and your view as to the future financial viability 
of competitors in light of the NPRM.
    Answer. The NPRM has no immediate impact because it only serves to 
initiate a rulemaking and does not change existing Commission rules or 
precedent. Rather, the NPRM expressly seeks comment on the implications 
of the classification of Internet access as an information service on 
key legal and policy objectives, such as unbundling, access and 
universal service obligations. One of my primary goals, however, is to 
provide as much regulatory certainty and clarity as possible in order 
to promote investment and innovation in broadband-capable networks and, 
in turn, investment and innovation in the services and applications 
that will ride over those networks. Therefore, a main focus of our 
pending proceedings is to ensure clarity, certainty, and predictability 
in the rules governing local competition and broadband. Furthermore, it 
is worth mentioning that, in some instances, capital has been flowing 
to some CLECs who are building their own facilities.
    While these are difficult questions, I firmly believe that we must 
answer them now in order to provide market certainty and flow of 
capital. Only with these answers will incumbents and competitors know 
what to expect and be able to make prudent decisions to build and enter 
new broadband markets. We can encourage capital flow to competitors by 
minimizing regulatory costs and uncertainty in our rules governing 
broadband and engaging in swift enforcement when those rules are 
compromised. While I realize that recent economic conditions have made 
it difficult to compete, I believe that creating a regulatory 
environment in which competitors can access the incumbents' networks 
through certain and established mechanisms, even if they are market-
based arrangements, will encourage investors.
    Question. Currently the FCC has a number of proceedings that 
address issues such as whether RBOCs should be declared nondominant in 
the provision of broadband services, whether RBOCs should no longer 
have to provide high capacity unbundled network elements, and whether 
RBOC broadband services and facilities used to provide Internet access 
should be reclassified as information services. Do you intend in these 
proceedings to reduce a state commission's authority to implement or 
enforce the Telecommunications Act of 1996 or to take away the 
authority of state commissions to promote competition for local 
telecommunication services? Would these proceedings impact state 
commissions ability to protect consumers in any way?
    Could these proceedings promote duopoly competition as opposed to 
multiple competitors across multiple platforms? Would these proceedings 
result in de facto duopoly markets even if that is not your intent?
    Answer. Our state partners play a key role in promoting competition 
and protecting consumer interests. On these issues we share the same 
goal as our state colleagues to ensure that our policies afford 
consumers high-quality, innovative services provided in a robustly 
competitive market. Moreover, because of the importance of the state 
role, we expressly sought comment in the proceedings you reference, on 
state views concerning broadband deployment. We also recognized that 
states bring particular knowledge of their local competitive landscapes 
and consumer concerns. We look forward to input from our state 
colleagues on these issues.
    Our intent in these proceedings is to create consumer benefits 
through increased competition. That competition will come, as it has to 
date, in many forms, including competition between and among different 
broadband delivery platforms (intermodal competition). In our Triennial 
Review proceeding to update incumbent LECs' unbundling obligations, for 
example, we will continue to require unbundling as Congress directed in 
section 251 and will tailor incumbent LECs' unbundling obligations to 
where competitors are actually impaired without access to the 
incumbents' networks. We therefore expect intramodal competition 
through access to the incumbents' networks to continue to be a viable 
option for some competitors. In combination with the growth in 
intramodal competition through new wireline facilities construction, 
and the growth in intermodal competition from cable, wireless, 
satellite, and fixed wireless providers, the possibility of duopoly is 
remote.
    Question. The Telecommunications Act of 1996 promoted both inter-
modal and intra-modal competition. Intra-modal competition is affected 
by the ability of CLECs to use unbundled loops and other pieces of the 
ILEC networks to provide services to customers. Do you believe the FCC 
should continue a policy of promoting and enforcing both modes of 
competition equally?
    Answer. Yes. The Commission's responsibility is to interpret and 
execute the Telecommunications Act in a manner that is faithful to 
Congress's intent and promotes the public interest. Thus, the 
Commission is statutorily bound to require incumbents to permit both 
facilities-based and non-facilities-based entry. Moreover, faithful to 
this statutory mandate, the Commission has implemented regulations that 
provide competitors with unbundling and resale rights consistent with 
market-opening provisions of the Act. At the same time, the Commission 
has previously recognized that only through the promotion of 
facilities-based competition, which creates greater opportunity for 
innovation and price differentiation, will sustainable competition take 
root in the marketplace. So long as the Commission continues to find 
that competitors are impaired without access to the incumbents' 
networks, then the Commission will enforce unbundling rules on the 
incumbents, thus promoting intramodal competition. Our overall 
objective, however, is not to pick winners or losers, but to encourage 
competition in order to deliver benefits to consumers.
    Question. Setting aside rural and underserved areas, would you 
agree that low consumer demand for broadband services is a greater 
obstacle to widespread broadband adoption than the pace of broadband 
deployment?
    Answer. No. Widespread consumer adoption of broadband requires both 
availability and demand. With respect to availability, the Commission 
recently concluded its third inquiry concerning the availability of 
advanced telecommunications capability in the United States. Although 
the Report focused on the availability of advanced services capability, 
we acknowledged the important relationship between demand and 
deployment and recognized that subscription rates may influence 
business and investment decisions. The Report indicates that high-speed 
subscribers were reported in 78 percent of the zip codes in the United 
States and 7 percent of American households subscribe to high-speed 
services. But it remains unclear whether subscribers throughout these 
zip codes, particularly in residential areas, generally have any choice 
in broadband infrastructure providers. Thus, in keeping with the Act's 
mandate that we encourage deployment ``to all Americans,'' we must 
continue to find new ways to promote broadband infrastructure 
investment.
    Demand can be a useful measure of consumers' appetite for certain 
broadband applications, or their willingness to pay for broadband 
services. Nevertheless, I am hesitant to speculate about the meaning of 
adoption rates at this time. Indeed, the broadband market is continuing 
to develop, and many questions remain as to what broadband services 
consumers will value. At this early stage, I believe that it is 
important to ensure that the market takes its cues from consumers, and 
that market participants should be given the opportunity to resolve 
challenges of matching supply to demand through relative marketplace 
advantages in areas such as marketing, service and innovation.
    Question. On November 8, 2001, in conjunction with the FCC's Notice 
of Proposed Rulemaking, Performance Measures and Standards for 
Unbundled Network Elements and Interconnection et al., CC Docket Nos. 
01-318 et al. you made the statement:

    ``This Notice acknowledges what has been apparent for some time: 
that facilities-based competition is the mode of market entry most 
likely to foster simultaneously and sustainably the Act's mandates of 
competition, deregulation and innovation.''

    On February 27, the FCC released data on the status of competition 
in the local telephone market. The report cited a growth rate of 16 
percent in the CLEC market during the first six months of 2001. In 
terms of how the service is provided, CLEC's reported: 33 percent of 
lines were served using their own facilities; 23 percent by reselling 
ILEC services; and 44 percent by using unbundled network elements.
    In light of the fact that almost half of the total competition is 
provisioned through UNEs, and given the reluctance of capital markets 
to advance funding for facilities-based construction, do you believe 
that facilities-based competition is most likely mode to bring about 
competition in the local telephone market?
    Answer. We believe that facilities-based competition holds the most 
promise, in the long run, for sustained competition and the consumer 
benefits that competition brings. Facilities-based competition creates 
greater opportunity for innovation and price differentiation. The 
Commission has also been clear, however, that with respect to 
facilities-based entry, we seek to promote entry not only by fully 
facilities-based carriers, but by those facilities-based carriers that 
purchase UNEs, such as the local loop, as well. Indeed, investment in 
facilities also furthers public safety and infrastructure development 
goals, which have become increasingly important since the events of 
September 11th. At the same time as we implement the Act's mandate to 
make unbundled network elements and resale options available to CLECs, 
I am encouraged by the fact that even during the first six months of 
2001, the number of customers served by CLEC-owned lines actually grew 
by 11 percent. That being said, our pending proceedings do not--and 
could not consistent with the statutory framework--contemplate 
eliminating unbundled access to incumbent facilities for competitors 
seeking to provide telecommunications services.
    Question. Can the FCC realistically hope to meet the burden imposed 
by the Fox case of showing, every two years, the necessity of retaining 
your broadcast ownership and many other telecommunications rules? If 
not, will the Commission seek further review of the D.C. Circuit's 
decision, or should Congress act to revise the biennial review 
provisions included in the 1996 Telecommunications Act?
    Answer. Section 202(h) of the Telecommunications Act of 1996 
requires the Commission to review its media ownership rules biennially 
to determine if these ``rules are necessary in the public interest as 
the result of competition.'' The statute also states that once the 
agency makes the determination, it must ``repeal or modify any 
regulation it determines to be no longer in the public interest.'' In 
Fox Television Stations, a three-judge panel of the D.C. Circuit 
addressed the Commission's 1998 and 2000 determinations not to repeal 
or modify the national television broadcast ownership rule (NTSO) or 
the cable-broadcast ownership rule (CBCO). The Commission had argued 
that its determination was appropriate because the rules continue to 
serve the public interest. The Fox court held, however, that, in order 
to retain the rules, the Commission was required to show not only that 
that the rules serve the public interest, but rather that they remain 
``necessary'' to serve the public interest. The court also held that 
the Commission failed to satisfy that standard. See Fox Television 
Stations v. FCC, 280 F.3d 1027, 1042 (D.C. Cir. 2002) (``Commission has 
no valid reason to think the NTSO Rule is necessary to safeguard 
competition.''). Specifically, under the Court's interpretation of the 
statute, the Commission must review and prove, every two years after 
any rule's promulgation, each media ownership rule is ``necessary'' to 
serve the public interest. The Commission respectfully disagrees with 
the court's decision. As required by federal regulations (28 C.F.R. 
0.20), the Commission is discussing with the United States Department 
of Justice and the Office of the Solicitor General the possibility of 
appealing. If a decision is made not to seek further review of the 
court's ruling, or if the government seeks further review and the Fox 
decision is not reversed, then the Commission will be bound by the 
court's decision unless the Congress revises the biennial review 
statute to clarify that the statute does not impose a higher burden on 
the Commission than that already required for agency rulemaking, i.e., 
the rule must not be arbitrary or capricious.
    Question. Because the D.C. Circuit vacated the cable/broadcast 
cross-ownership rule without giving the Commission a chance to 
reconsider its significance in the digital age, does the Commission 
plan to challenge the Court's order to repeal the cross-ownership rule?
    Answer. As an initial matter, the D.C. Circuit ruling in Fox 
permits the Commission to reissue the cable/broadcast cross-ownership 
rule if it can justify the rule. See Fox Television Stations v. FCC, 
280 F.3d 1027, 1052 (D.C. Cir. 2002) (``[i]f the agency wants to re-
promulgate the Rule and is able to justify doing so, it presumably can 
require any entity then in violation of the Rule to divest either its 
broadcast station or its cable system in any market where it owns 
both.''). The court vacated the CBCO rule because it doubted that the 
Commission would be able to justify the re-issuance of the rule. The 
Commission is also discussing with the United States Department of 
Justice and the Office of the Solicitor General the possibility of 
seeking further review of the Fox court's decision to vacate the CBCO 
rule.
    Question. Please detail for Committee the specific steps taken by 
your media ownership working group to examine consolidation in the 
media marketplace. Please detail what steps are planned to conduct 
detailed, objective analysis of media consolidation and its impact on 
diversity of ownership, diversity of viewpoints, and on localism. Do 
your analyses plan to include research conducted by retained outside 
market experts, economists, and academics capable of performing the 
significant objective market research necessary?
    Answer. I am committed to improving the factual record on which the 
Commission addresses media ownership issues. Although I am confident 
that the public will submit insightful, factual information about the 
media market in our ownership rulemakings, I took the step of 
establishing the media ownership working group to improve our 
collective understanding of the media market. At this point, I 
anticipate that the group will focus its work on three areas:
    1. How do consumers experience the media? It is essential that the 
Commission put the consumer at the center of our media ownership 
policymaking. We can do that only if we have a better understanding of 
how Americans use the various media options available to them. For 
instance, I would like to know the extent to which various media 
outlets might be substitutes for one another. Existing Commission 
ownership rules make assumptions about how consumers substitute among 
media, but we need better data about the nature of that behavior to 
ensure that our current rules are based on today's market reality. I 
expect the ownership group will address these questions both by 
studying past consumer usage of different media as well as conducting 
an actual survey of consumer attitudes.
    2. How has the media landscape changed over time? We understand 
that growth in electronic media options at the national level has 
expanded dramatically, but Americans experience media at the local 
level, not the national level. Therefore, we need to ask questions such 
as ``What did the media world look like to a resident of a particular 
market in 1960 versus today? How do those changes compare to the 
changes experienced by a resident of another market between 1960 and 
today?'' Data such as these will give us valuable context for 
addressing our media ownership questions.
    3. How do media market structures affect output? We intend to take 
advantage of past rule changes and waivers of our ownership rules to 
study whether certain market structures affect competition, diversity 
and localism. For example, I would like to know the extent to which 
broadcast-newspaper combinations affect viewpoint diversity and 
competition, as well as any other benefits or costs they have produced. 
Since there are a number of grandfathered broadcast-newspaper 
combinations, we will study how they affect the realization of our 
policy goals.
    Finally, Commission economists and attorneys and outside experts 
will perform the media ownership working group's research and analysis. 
I have full confidence that all the contributors to the media ownership 
group have the expertise and objectivity to perform the analysis that 
the Commission requires.
    Question. You've had a DTV Task Force in place since last year. 
Tell us what steps the FCC plans to take, and when, to move the 
transition to digital television forward?
    Answer. In October 2001, I announced the formation of a Digital 
Television Task Force at the FCC. The Task Force is a cross-Bureau, 
cross-disciplinary group that has several functions, including: (1) 
helping to coordinate and establish priorities for the Commission's DTV 
efforts; (2) bringing outside parties together to attempt to resolve 
important issues that may be impeding the transition; and (3) providing 
a single point of contact for outside parties on DTV matters. More 
broadly, the Task Force reflects my commitment to doing everything we 
can to move the DTV transition forward for consumers and to recover 
spectrum for other uses such as public safety and advanced wireless 
services. At the same time, I believe we need to recognize that the 
success of the transition depends in no small measure on consumer 
demand for services and purchase of equipment over which the FCC has no 
direct control.
    During the past several months, the Task Force and other Commission 
staff have taken proactive steps in several areas, including the DTV 
build-out, cable compatibility and copy protection. Regarding the 
build-out, for instance, we temporarily deferred some of our regulatory 
requirements to make it less expensive for broadcasters to get on the 
air with a digital signal. On cable compatibility and copy protection, 
the Task Force has held several meetings with the consumer electronics 
industry, cable, content producers, and others, in an attempt to work 
through some of the difficult issues that may be hindering the 
transition. While much work remains, I'm encouraged by the results thus 
far. We plan to stay actively involved in these issues to ensure that 
progress continues.
    We also have several ongoing proceedings at the Commission related 
to the DTV transition e.g., DTV must-carry, mandatory DTV tuners and 
labeling for ``cable ready'' DTV sets--that I hope to act on as 
expeditiously as possible. Most immediately, we are conducting a close 
staff examination of the approximately 850 extension requests filed by 
commercial broadcasters seeking relief from the upcoming May 1, 2002 
build-out deadline. We will work with those broadcasters that have 
demonstrated a legitimate need for an extension, to help them get on 
the air with a digital signal as soon as possible.
    In addition, I anticipate that we will initiate at least two other 
proceedings in the coming months to move the DTV transition forward. 
First, I plan to ask the Commission to begin a proceeding to develop 
rules for low-power stations and TV translators to make the transition 
to digital. These stations play an important role in our broadcast 
system, and we need to begin the process of helping them make the 
transition to digital. Second, we will begin our next periodic review 
of the progress of the conversion to digital television, a review that 
the Commission undertakes every two years to ensure that progress on 
the transition continues and that any potential sources of delay within 
our purview are eliminated.
    In sum, I am committed to doing what we can to promote a smooth and 
expeditious DTV transition for the American public, and I look forward 
to working with the Committee as the transition continues to progress.
    Question. Last fall, the FCC received a petition proposing to open 
the 70 and 80 GHz frequencies for commercial ``gigabit broadband'' use 
and setting forth spectrum license rules that would expedite such use. 
What is the Commission's schedule for beginning and completing the 
rulemaking?
    Answer. On September 10, 2001, Loea Communications Corporation 
filed a petition requesting the commencement of a rulemaking proceeding 
to adopt service rules governing the licensing and point-to-point use 
of the 71.0-76.0 GHz and 81.0-86.0 GHz (70-80 GHz) spectrum bands. The 
Commission promptly sought comment on Loea's Petition. The period for 
filing comments to Loea's Petition ended on November 13, 2001. 
Commission staff is currently analyzing the comments received and the 
technical issues involved in establishing service rules for this 
spectrum, which is shared with the government.
    The Commission expects to initiate a formal proceeding on Loea's 
Petition during the second quarter of 2002. Licensing the 70-80 GHz 
band will require consideration of a number of intricate issues; thus 
it is difficult at this time to predict a completion date for the 
rulemaking. In particular, the shared aspect of the spectrum (between 
government and non-government) will require careful coordination of 
this proceeding with the National Telecommunications and Information 
Administration.
    Question. What efforts are being made by the FCC to follow 
Congress' directive under section 222 of the Act to ensure that 
wireless location information cannot be used by carriers without the 
prior consent of a wireless subscriber? Does the Act provide the FCC 
with sufficient authority to similarly limit the re-disclosure of 
wireless location information by third parties or must Congress provide 
future legislative authority?
    Answer. The statutory amendments to section 222 of the Act 
addressing privacy of wireless location information became effective on 
October 26, 1999, and telecommunications carriers are bound by those 
requirements. Carriers are aware of the requirements and, to our 
knowledge, the carriers are following them. Indeed, in November 2000, 
the Cellular Telecommunications and Internet Association (CTIA) filed a 
petition for rulemaking seeking adoption of certain privacy principles 
pursuant to the wireless location information provisions of section 
222. The Commission issued a Public Notice on March 16, 2001, 
requesting comment on the petition. The record has now closed and the 
Commission is analyzing the comments and reply comments that were 
received.
    As to the breadth of the statute, by their terms, the wireless 
location information provisions, as part of the overall statutory 
scheme of section 222, apply only to telecommunications carriers. The 
terms of the provisions do not expressly address non-carriers and, 
thus, the privacy limitations imposed on carriers' use or disclosure of 
wireless location information would not appear to be directly 
applicable to third parties' use or disclosure of such information. A 
number of parties have raised the issue of third-party disclosure of 
location information in the context of the CTIA petition for 
rulemaking, however. Thus, this issue is before the Commission for 
consideration.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
    Question. The FCC recently concluded that broadband service is 
being deployed in a timely manner. I also understand that broadband has 
achieved 10 percent penetration in 4 years and that compares favorably 
with the adoption rates for other consumer technologies such as PCs (10 
percent in 4 years), CD players (10 percent in 4.5 years), cell phones 
(10 percent in 8 years), VCRs (10 percent in 10 years), and color TVs 
(10 percent in 12 years). The Congress may need to work to make sure 
that broadband is deployed in rural or underserved areas. However, 
deregulation of ILECs won't solve this problem. Therefore, in light of 
this, why has the FCC proposed in its Broadband rulemaking proceeding 
to take action so drastic that it would undermine competition under the 
guise of deploying broadband service.
    Answer. I agree that the penetration and deployment rates for 
broadband have been encouraging as we recently announced in our 706 
Report to Congress. These facts alone, however, do not establish that 
the Commission has achieved the broadband deployment goals that 
Congress set forth in the Act. Section 706 mandates that the Commission 
promote the deployment of broadband to all Americans using tools such 
as regulatory forbearance and the removal of barriers to infrastructure 
investment. To satisfy this mandate, we must facilitate the deployment 
of at least one and preferably multiple broadband infrastructures 
throughout the Nation. At the same time, we must safeguard the ability 
of competitors to use the incumbent telephone company network to 
provide telecommunications services, as prescribed by the Act. By 
clarifying the regulatory classifications and treatment of wireline 
broadband Internet access service, I believe that we will improve the 
environment for competition by providing both incumbents and 
competitors with the certainty they need to make decisions to build and 
deploy broadband. I also believe that to the extent that our final 
rules remove regulatory barriers to deployment, we will remain faithful 
to the Congress' directive to ``preserve the vibrant and competitive 
free market that presently exists for the Internet and other 
interactive computer services, unfettered by Federal and State 
regulation.'' In addition, by clearly defining and developing the rules 
under which broadband services will be regulated, the Commission will 
allow for a more stable environment for the investment needed to build 
broadband-capable networks. By providing regulatory clarity in this 
area, the Commission will serve to lower the risks associated with 
investing in these networks, which in turn should help spur the 
deployment of broadband-capable networks to all Americans and provide 
for an environment that promotes investment and innovation in broadband 
services and applications.
    Question. In October of last year, the Commission granted waivers 
submitted to the six largest wireless carriers from the FCC's ``E911'' 
rules. These rules would require that wireless carriers make certain 
information available to public safety entities in order to help 
pinpoint the location of wireless callers. In adopting these waivers, 
the FCC required each of the six carriers to comply with specific 
implementation schedules with enforceable, interim benchmarks that 
would ensure the timely, nationwide rollout of E911 services by 2005. 
Today, not five months later, three of the six carriers have already 
filed additional waivers and a fourth (Nextel) has no need to file a 
waiver yet, because its first benchmark will not occur until the end of 
this year. Given these developments, is the Commission committed to 
aggressively enforcing these rules and to looking disfavorably upon 
further waivers?
    Answer. The Commission is committed to having Phase II of E911 
deployed as soon as possible, and to pursuing aggressive enforcement 
action where necessary and appropriate. As the Commission acknowledged 
when it first adopted the E911 requirements, the implementation of 
wireless E911 is very complicated. Wireless location technology did not 
exist at the time of the original mandate, and has developed 
differently than originally predicted. Adding to the complexity of the 
problem is that Phase II deployment requires coordinated action by the 
CMRS carriers, their vendors, the incumbent local exchange carriers, 
and local public safety entities. In light of these complications, the 
Commission recognized that, in some situations, individual carriers 
might have to seek relief from certain of the requirements.
    In September 2000 and October 2001, the Commission granted 
individualized waivers to the six large nationwide wireless carriers 
AT&T, Cingular, Nextel, Sprint, Verizon, and VoiceStream conditioned 
upon adherence to detailed E911 Phase II compliance plans proposed by 
each carrier. The orders granting these waivers sent a clear message to 
carriers that there will be penalties if they fail to comply with the 
rollout schedules contained in their plans. Further, the orders signal 
that the Commission will look disfavorably upon any requests for 
further relief, indicating that they will not be entertained absent 
``extraordinary circumstances.''
    The Commission has already referred two carriers to the Enforcement 
Bureau regarding their TDMA markets, and we will not hesitate to make 
more referrals to ensure that E911 capability is implemented as quickly 
as possible. It should be noted that while certain of the nationwide 
carriers have again requested additional time, others appear to be on 
track to meet their benchmarks. We applaud the efforts of these 
carriers in leading the way in deployment of this lifesaving 
technology.
    Question. It has been just over four years since the Commission 
released a Notice of Proposed Rulemaking on updating its rules for the 
Direct Broadcast Satellite (``DBS'') Service. Since the NPRM was 
issued, a vast consolidation has occurred among DBS licensees. In 
addition, after years of waiting, DBS licensees have only recently 
begun providing DBS programming packages to consumers in Alaska and 
Hawaii. Unfortunately, much of the subscriber packages are not 
comparable with the programming that is available to consumers in the 
mainland 48 states and are not competitive with cable television 
services in Hawaii.
    The 1998 NPRM proposed to improve the FCC's geographic service 
requirements in order to ensure that consumers in Alaska and Hawaii are 
provided with comparable multichannel video programming opportunities 
as consumers in the rest of the United States. Unfortunately, the 
Commission has not yet released an order in the proceeding resolving 
the issue. Recognizing the importance of comparable multichannel video 
programming opportunities for residents in Alaska and Hawaii, when does 
the Commission estimate it will be able to release an order concluding 
this long-pending proceeding?
    Answer. The Commission is in the process of completing its DBS 
rulemaking that addresses service to Alaska and Hawaii, among other 
issues. We expect to release an order in the near future. In the 
process of our consideration, Commission staff has carefully reviewed 
the numerous ex parte filings of the State of Hawaii and we share the 
state's concern that its citizens, as well as those of Alaska, receive 
DBS service. According to recent filings, Hawaii is receiving DBS 
service but with fewer channels than are available to mainland 
consumers. We note that the Commission has undertaken several efforts 
over the years to facilitate joint discussions with government 
representatives from the States of Hawaii and Alaska and the two DBS 
licensees, and that thereafter, offerings of DBS service in those 
states improved.
    Question. Media consolidation is of great concern to me. I have 
been troubled by some of your comments that ownership caps are based on 
``romantic notions.'' Although the level of consolidation in the media 
industry in the marketplace today may not rise to the level of a 
violation of our antitrust laws, it nonetheless may have an adverse 
impact on such public interest objectives as diversity of ownership, 
diversity of voices, and localism. Will you work to honor these public 
interest objectives?
    Answer. I remain fully committed to a media market that is not only 
robustly competitive but that is serves the Commission's longstanding 
goals of localism and diversity. Our framework for achieving these 
goals will give significant attention to how consumers actually use the 
media so that our ownership policies truly reflect the realities of 
today's media environment. Our framework also will consider how 
existing regulations affect the continued economic viability of media 
outlets such as local broadcast television stations and broadcast 
television networks. I continue to have concerns about how some of our 
rules affect the financial health of broadcasters, especially in small 
and medium sized markets and television networks.
    With respect to our policy goals of promoting competition, 
diversity and localism, our challenge is to develop a method of 
analysis that fairly reflects all of these objectives. There are well-
settled metrics for assessing how certain market structures promote or 
diminish competition in economic markets, including media markets. But 
far less thought has been given to how various market structures affect 
``viewpoints'' and ``localism.'' I intend to bring a closer scrutiny to 
these concepts so that we have real-world evidence to inform our media 
ownership decisions.
    Question. What steps are being taken by the FCC to identify and 
clear new spectrum that can be used by the CMRS industry to provide 3G 
broadband services? What if any obstacles must Congress address to help 
facilitate this process?
    Answer. Due to the increased growth of wireless mobile services and 
requests for additional spectrum to support 3G, or advanced wireless 
services, the Commission initiated a rulemaking proceeding seeking 
public comment on potential frequency bands for 3G wireless systems, as 
well as potential frequency bands for relocating incumbent spectrum 
users. In addition to the ongoing Commission rulemaking proceeding, and 
because some of the spectrum that may be allocated for 3G wireless 
systems is currently allocated for federal government use, last 
October, FCC staff and the National Telecommunications and Information 
Agency (NTIA) began a joint interagency staff-level effort to examine 
and develop possible spectrum options for 3G wireless systems. This 
effort is also evaluating the potential for sharing between 3G wireless 
systems and current spectrum users, as well as reviewing possible 
options for relocation spectrum.
    FCC staff are focusing on a 60 MHz block of spectrum--from 2,110-
2,170 MHz--that is currently allocated for commercial use, and the 
executive branch agencies are focusing on a 60 MHz block of spectrum--
from 1,710-1,770 MHz--that is currently allocated for federal 
government users, most notably the U.S. Department of Defense. 
Importantly, the U.S. Congress has already facilitated this process and 
has previously mandated that 45 MHz of spectrum be transferred to the 
commercial sector from the federal sector--from 1,710-1,755 MHz. Thus, 
one of the principal focuses of the interagency staff working group is 
to determine the feasibility of whether an additional 15 MHz of 
spectrum--from 1,755-1,770 MHz--can be made available for commercial 3G 
wireless systems. The U.S. Department of Defense currently operates 
over these frequencies.
    This interagency effort is scheduled to be completed in late spring 
of this year. The result of this assessment will be considered, along 
with all of the other information in the public record, in the ongoing 
Commission rulemaking proceeding relating to 3G services. Because there 
is existing consumer demand for these services, the Commission will 
strive for an expeditious resolution of these spectrum issues.
    However, because reaching careful and complete decisions as to 
appropriate spectrum for 3G services is of considerable significance to 
the economy and the national security of the United States, I do have 
graver concerns about the current statutory auction deadline of 
September 30, 2002, established by the Balanced Budget Act of 1997. 
While the FCC, NTIA, and other federal agencies have worked diligently 
since October 2000 to identify appropriate 3G spectrum, and much 
progress has been accomplished toward completing this joint interagency 
effort to select the 3G bands by late Spring 2002, it is becoming 
increasingly clear that the original timeframe contemplated for auction 
of 3G spectrum is not consistent with our obligations to act in the 
best interests of national security and sound spectrum management.
    The Administration has already suggested the need for legislation 
that would shift the statutory auction deadlines from September 30, 
2002 to September 30, 2004. As the Secretary of Commerce wrote to 
Congress, ``[w]hile the Federal Government is committed to identifying 
spectrum for 3G services as expeditiously as possible, the current 
statutory auction deadline affecting certain of the bands under 
consideration does not provide sufficient time to conclude the 
identification process and conduct an auction before September 30, 
2002.'' I note further that the President's fiscal year 2003 budget 
plan endorsed moving the auction deadline to September 30, 2004. 
Congress' support for flexibility and relief from the auction dates 
would be appreciated.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski
    Question. Access to high-speed Internet connections is crucial to 
consumers and communities in today's economy. High speed connections to 
the Internet can provide a lifeline to small business, schools and 
hospitals and can help communities prosper and grow in the Information 
Age.
    It is my understanding that the FCC has been grappling with a 
solution--how big a fund, who should pay in and who should receive 
payouts since the enactment of the Telecommunications Act of 1996.
    Can you tell me what you are doing to address the issue of 
universal service as it applies to the Internet to ensure that 
residential and business customers, as well as rural and urban, have 
service and a choice about to who serves them?
    Answer. I agree that widespread deployment of broadband 
infrastructure has become the central communications policy objective 
of our day. The Commission is acting to remove barriers to deployment 
and investment and minimize the cost of bringing service to consumers 
by minimizing regulatory costs. In doing so, the Commission is actively 
working to promote broadband availability throughout the Nation over 
multiple technical platforms.
    As shown by our recent report to Congress, advanced services are 
being deployed by wireline carriers, cable providers and satellite 
operators in a reasonable and timely manner. We believe that by 
promoting the development and deployment of broadband services over 
multiple platforms, competition in the provision of these services can 
thrive, and thereby ensure that the needs and demands of the consuming 
public are met. I assure you that I am committed to preserving and 
advancing universal service and encouraging the ubiquitous availability 
of broadband to all Americans.
    We are examining how to accomplish these goals through a variety of 
vehicles, including our recent examination of the classification of 
wireline broadband Internet access and our on-going examination of the 
way in which universal service contributions are collected. I am 
confident that all of these actions taken together will continue to 
ensure that broadband services are deployed throughout the nation.
    Question. What effect has more choice had on prices for broadband 
services? In areas of the country where consumers have less choice in 
providers, are prices generally higher or lower for those services as 
compared to areas that have more competition?
    Answer. The Commission does have some data on the national range of 
prices for broadband services. We do know that for basic ADSL services, 
monthly charges range from $45 to $59, and installation charges range 
from free to $250. Free installation generally requires that customers 
install premises equipment themselves. For cable services, monthly 
charges range from $45 to $60. On the other hand, Starband, one of only 
two major satellite providers, charges a monthly fee of $70. Starband's 
customers also buy an equipment package that retails for $499. The 
standard installation charge for that equipment starts at $199. This 
data suggests that customers whose only option is satellite are paying 
more on a monthly basis for broadband services and are also paying one-
time fees that are at least as costly as those charged by other 
providers.
    That said, both the cable television and telephone industries 
appear to price their high-speed Internet access services (cable modem 
service and DSL respectively) largely in a uniform manner across 
markets independent of whether or not the other service is available in 
a particular market. For example, cable operators typically price cable 
modem service at between $45-$50/month across their markets. Likewise, 
Verizon, for example offers four price points for it's DSL service 
($49.95, $59.95, $69.95, and $79.95) depending upon data speed and 
other features independent of whether a local area has cable modem 
service. Some cable operators and DSL providers have ``specials'' 
including free modems, free first month(s), or lower prices for the 
first several months of service. These marketing specials appear to be 
more frequent now that both cable modem service and DSL are more widely 
available and perceived by consumers to be competitors.
    Question. Would you please describe the status of the CLEC industry 
today? Are there more or fewer competitive providers than there were 
three years ago? Please give specific numbers, if possible.
    Answer. Although we do not collect data on the number of CLECs 
providing service per se, we do measure the CLEC industry by the number 
of access lines served by competitors. The Commission's most recent 
statistics on the CLEC industry reflect data from June 30, 2001 and 
show a 16 percent growth in CLEC market size during the first six 
months of 2001. This builds on top of a 63 percent increase in the six 
months ending December 2000. I recognize that recent economic 
conditions have made it difficult to compete in the telecommunications 
sector and that a number of CLECs have exited the market. The FCC is 
absolutely committed to doing what it can to stimulate competition in a 
manner that comports with the statute and with market dynamics. We are 
therefore taking a number of actions that CLECs have requested to 
improve their ability to provide service. Specifically, we have 
strengthened enforcement of our local competition rules, initiated 
rulemakings on performance measurements for unbundled network elements 
and special access services that incumbent LECs provide to CLECs, and 
we have been working with the Local State Government Advisory Committee 
to improve access to rights-of-way.
    Question. Is the availability of investment capital a major part of 
the problem facing the CLEC industry today?
    Answer. Yes. Capital is less available to the CLEC industry today 
than it has been. Although the Commission cannot be guided by reacting 
to short-term fluctuations in the capital markets, one of our primary 
goals is to provide as much regulatory certainty as possible in order 
to promote investor confidence. Therefore, a main focus of our pending 
proceedings is to ensure clarity, certainty, and predictability in the 
rules governing local competition and broadband. Furthermore, it is 
worth mentioning that, in some instances, capital has been flowing to 
some CLECs who are building their own facilities. In addition, cable 
telephony providers are competing with ILECs without relying on 
incumbent network facilities. Indeed, even in the first six months of 
2001, the number of customer lines served by CLEC-owned facilities grew 
by 11 percent.
    Question. It is my understanding that the FCC has recently 
initiated three major proceedings Docket 01-338, which is considering 
whether to eliminate high capacity Unbundled Network Elements; Docket 
01-337, which is considering whether the Bell companies should be 
declared non-dominant in the provision of broadband services and 
facilities; and Docket 02-33, which is considering whether the Bell 
companies' broadband services and facilities used to provide Internet 
Access should be reclassified and removed from the regulations that 
apply to telecommunications services. All three of these proceedings 
are considering fundamental changes to the rules and regulations that 
govern the provision of broadband services to consumers.
    What effect will these proceedings have on consumers of broadband 
services who are currently served by competitive carriers who rely upon 
access to unbundled network elements at TELRIC prices? Will these 
consumers be able to continue receiving services if the Commission 
decides to eliminate some unbundled network elements or decides to 
change the pricing structure?
    Answer. The Commission launched the three proceedings you have 
referenced to consider in a unified way, the appropriate legal and 
policy framework for broadband services. The goal of these proceedings 
is not to reduce consumer choice but to ensure a robustly competitive 
market for broadband services generally. Ultimately, when the 
Commission reaches its conclusions in these proceedings, it will 
consider whether the interests of consumers not individual competitors 
are served.
    Clearly, one of our primary goals is for consumers to have the 
opportunity to access broadband services from a variety of sources. Our 
Triennial Review (Docket No. 01-33) evaluation of the incumbent LECs' 
wholesale obligations to make their facilities available to competitive 
LECs for the provision of broadband services is designed to evaluate 
these rules, first adopted in 1996, in light of the six years of real 
market experience we have gained. This proceeding was scheduled to take 
place at this time to ensure that our unbundling rules keep pace with 
market realities. Integral to our unbundling analysis is whether viable 
alternatives to the incumbent network are available to competitors to 
serve their customers. If we were to determine that certain elements 
were no longer unbundled, it would be based, in part, on our assessment 
of available viable alternatives. Through these alternatives, consumers 
would be able to continue to receive services from competitors.
    The second proceeding you reference (Docket No. 01-337) would have 
no effect on the availability and pricing of network elements used by 
competitors to provide service.
    In the Broadband NPRM, Docket No. 02-33, which examines the 
appropriate classification of broadband Internet access services under 
the Act, the Commission also asks many questions about the appropriate 
approach to providing competitive broadband providers with access to 
the incumbent LECs' networks to provide services. We look forward to 
vigorous comment and analysis on this issue in the record.
                                 ______
                                 
                Questions Submitted by Senator Herb Kohl
    Question. The FCC's 1997 Benchmark Order continues to be effective 
in driving down U.S. carriers' international settlement charges and 
prices to U.S. consumers. However, there are two areas that need 
attention.
    First, I understand that foreign carriers are beginning to charge 
higher prices for completing calls from the United States to mobile 
phones overseas. With the growth of mobile phone usage worldwide, this 
new factor could undo the positive impact of the Benchmark Order. What 
could the FCC do to work with foreign regulators and carriers to lower 
these charges that are raising U.S. consumer prices?
    Second, even with full implementation of the Benchmark Order, 
settlement rates will remain at levels that are above cost. In some 
instances, these high rates create profit incentives for scam operators 
to devise schemes that lure American consumers to unknowingly place 
international calls. In any event, these settlement rates are certainly 
above the levels that we consider reasonable for call termination in 
the domestic marketplace.
    Is it time to update the Benchmark Order, and beyond that, what 
other steps can the Commission take to ensure that U.S. carriers and 
consumers are not paying too much for international calling?
    Answer. Foreign regulatory authorities are concerned that 
termination rates on mobile networks may be too high and thus, 
adversely impact consumers. At the same time, the Commission is 
continuing to look at ways to achieve lower consumer rates for 
international calls. Through continued enforcement of the benchmarks 
policy and interaction with foreign regulators and multilateral 
organizations, the Commission can reinforce the importance of lower 
accounting rates to U.S. and foreign consumers and carriers. Thus, the 
FCC is determined to continue discussions with our regulatory 
counterparts overseas. In these discussions, we will note the impact on 
U.S. consumers when international calls are completed on mobile 
networks and share our experiences with respect to mobile termination 
in the United States. Termination rates on mobile networks in the 
United States are often lower than similar rates in foreign markets.
    Pursuant to the policies the Commission set forth in its Benchmarks 
Order, there remains one additional round of foreign routes (countries 
with a teledensity that is less than 1) for which carriers must 
negotiate benchmark-compliant agreements for traffic beginning January 
1, 2003. In addition to the benchmarks policy, market forces, bypass, 
and refiling of traffic continue to place pressures on foreign carriers 
to lower their accounting rates to and below the benchmark rates. The 
trend toward lower accounting rates is benefiting U.S. consumers 
through lower average consumer calling prices, as accounting rates are 
the major cost component in international calling prices. Currently, 
over 90 percent of the minutes for U.S.-international traffic are being 
settled at or below the benchmark rate.
    Question. You may recall that I asked you last year what the FCC 
could do to bring more competition to the set top box market, and to 
ensure that set top boxes are available for purchase at retail stores 
so that consumers have another choice besides renting them from cable 
operators. A year has passed, and very little has changed.
    To be sure, the National Cable Television Association has published 
the OpenCable Application Platform (OCAP) specification, and this is an 
important first step. However, absent implementation of this 
specification in the next generation of digital set top boxes and cable 
ready televisions, or even a commitment from the cable industry to use 
this standard in their own equipment, I fear a retail market employing 
the OpenCable standard will not develop.
    Moreover, the Pod-Host Interface License Agreement (PHILA) is also 
crucial to the creation of a viable competitive market. Even if we 
could immediately resolve the standards-related difficulties posed by 
the adoption of the OpenCable specification, competitive devices would 
not be able to connect to digital cable systems without first signing 
PHILA. To make matters worse, the FCC has not yet published PHILA for 
public comment a process that is essential to create digital ready 
products that will work on cable systems across the country.
    So again I ask the question: what can the FCC do to both bring more 
competition to the set top box market and ensure the creation of a 
digital cable ready consumer electronics product market? Also, why 
hasn't the FCC published PHILA for public comment? Absent a compelling 
reason, this is an act I trust the FCC will take as soon as possible.
    How important is it to the development of a competitive set top box 
market that the cable companies adhere to the OCAP specification in the 
same manner as a competitive set top box manufacturer?
    Do you believe the FCC has the jurisdiction to require device 
manufacturers to respond to a ``broadcast flag'' that would prevent 
redistribution of free over-the-air digital broadcasting to the 
Internet?
    Answer. The Commission continues to work with the relevant 
industries to develop retail set-top boxes and digital television sets 
that can be interconnected with cable television systems. Pursuant to 
Section 629 of the Telecommunications Act of 1996, the Commission 
adopted rules in 1998 to create a regulatory framework that would allow 
for the manufacture of such devices while adequately protecting the 
security of cable operators' systems and services. In September 2000, 
the Commission issued a Further Notice of Proposed Rulemaking and 
Declaratory Ruling. The Further Notice sought comment on three areas: 
(i) whether OpenCable, the cable industry's initiative for set-top box 
and television receiver interconnection specifications, adequately 
represents the full range of interested parties and delivered 
specifications that allow consumer electronics manufacturers to build 
competitive devices for purchase at retail; (ii) whether the Commission 
should revise the January 1, 2005 phase-out of the provision by cable 
operators of set-top boxes with integrated security; and (iii) any 
obstacles to the development of commercial availability or other 
factors ``impeding or affecting achievement of the goals of Section 
629.'' The Declaratory Ruling aspect of that Order is discussed below. 
The pleading cycle in the Further Notice is complete and the Commission 
anticipates that a Second Report and Order resolving these issues will 
be issued in the near future.
    The successful achievement of a competitive retail market for set-
top boxes and digital cable ready television sets involves a confluence 
of market sectors, and the resolution of issues, which, in many cases, 
the Commission has less-than-clear jurisdiction, as well as the 
development of numerous complex and interrelated technical 
specifications. For example, the following specifications developed in 
conjunction with the retail availability of set-top boxes and digital 
television receivers that can be interconnected with cable television 
systems have been adopted as ANSI or SCTE standards: Modulation and 
Compression Standards; Network Interface; POD-Host Interface; Pod-Host 
Copy Protection; Digital Transmission Content Protection (``DTCP''); 
Digital Visual Interface (``DVI'') output with High Bandwidth Digital 
Content Protection (``HDCP''); and IEEE 1394.
    In addition, CableLabs has recently published the OpenCable 
Application Platform Specification (``OCAP'') version 1.0. CableLabs 
has stated that reducing the OCAP specification to a finalized standard 
is its number one priority. Although not without difficulties, given 
the number of parties and the conflicting interests involved, progress 
has been made towards resolving the standards issues. The Commission 
continues to monitor these developments and assist, where it can, to 
further progress in this area.
    Another recent development is the NCTA proposal to make digital-
only set-top boxes available at retail as soon as possible. NCTA 
asserts that its plan addresses retailer's major concerns about 
competing with ``superior'' set-tops leased from a cable operator 
because the devices at retail are identical to the boxes available from 
a cable operator. NCTA maintains that its proposal also eliminates 
objections related to the PHILA license because no license is necessary 
with an integrated box. Finally, NCTA states that its proposal also 
substantially addresses portability concerns through its buy-back 
component. While NCTA's proposal will not lead to the manufacturing 
freedom and open cable architecture envisioned by Section 629, it could 
serve as a first step in establishing a set-top retail presence and 
should acquaint consumers with the concept of obtaining their set-top 
box from sources other than their cable provider.
    Finally, it is also important to remember that, although the 
Commission has established a regulatory framework, the availability of 
competitive set-top boxes is also dependent upon other factors, some of 
which are largely outside of the Commission's control. Significantly, 
for example, there continue to be sharp and unresolved differences 
between the cable and retail industries on what business model is most 
appropriate for the manufacture and sale of competitive set-top boxes.
Content Protection/PHILA
    The development of a comprehensive mechanism to protect digital 
content from unauthorized uses, such as retransmission over the 
Internet, also has proven to be difficult. It was in this context that 
the Commission issued its Declaratory Ruling in September 2000. The 
Declaratory Ruling addressed the narrow issue of whether technology 
licenses, such as the Dynamic Feedback Arrangement Scrambling Technique 
(``DFAST'') license, now called the POD-Host Interface License 
Agreement (``PHILA''), requiring copy protection measures to be located 
within a set-top box are consistent with the Commission's navigation 
devices rules. The Declaratory Ruling found that some measure of anti-
copying encryption in both the POD module and the host device to 
protect a gap where digital data would otherwise be available ``in the 
clear'' and accessible for digital copying is consistent with the 
intent of the rules. The Commission clearly stated that:

    ``. . . we do not intend this declaratory ruling to signal that any 
terms or technology associated with such licenses and designated as 
necessary for copy protection purposes are consistent with our rules. 
We believe, however, that such issues are best resolved if specific 
concerns involving finalized licenses that implicate our navigation 
devices rules are presented to the Commission.''

    The Declaratory Ruling also required CableLabs to submit to the 
Commission a report on the status of the DFAST/PHILA license, including 
a final version of a completed license agreement. CableLabs submitted 
its report and a draft final license to the Commission in December 
2000. This draft license has been available to the public since that 
time. To date, no formal complaints have been filed with the 
Commission. The Commission recently requested and received for 
evaluation an updated version of the PHILA. This version, which appears 
to differ only slightly from the December 2000 license, was submitted 
with a request for confidentiality. The Commission is currently 
evaluating the merits of the confidentiality request. Should the 
Commission deny the request for confidentiality, it would then consider 
whether to put the PHILA out for public comment.
    The Commission is keenly aware that content protection is central 
to all facets of the digital transition, including the retail 
availability of set-top boxes. We continue to work with interested 
parties in the digital transition to encourage them to forge a 
resolution on content protection matters that is fair to consumers, 
program distributors, and content owners alike.
Cable Reliance on OCAP
    Our rules as currently constituted do not require cable operators 
to adhere to the OCAP specification. As noted above, eight large cable 
MSOs have committed to support OCAP on their systems. In addition, our 
rules require that, after January 1, 2005, cable operators are 
prohibited from deploying new set-tops that contain integrated 
security, i.e., cable operators must rely on the POD and POD-Host 
interface to decrypt scrambled programming. In this atmosphere, it 
appears more likely that cable MSOs may voluntarily rely on an OCAP-
based system for these nonintegrated devices. Such reliance, however, 
is not mandated. Cable operators could use a proprietary system that 
operates in conjunction with the POD and POD-Host interface but it 
would be expected that these set-tops would function no better or worse 
than competitive set-top boxes obtained at retail. On the other hand, 
competitive manufacturers have advantages that may be unavailable to 
cable operators. Manufacturers have the ability to combine OCAP-reliant 
navigation devices with other consumer electronic products, such as 
television receivers, DVD players, digital video recorders, and home 
theater systems, or combine all into a simple product. This may be 
highly desirable to consumers, as was the case with cable ready analog 
television receivers. Moreover, competitive set-top manufacturers are 
equally free to develop new applications that will operate with or in 
conjunction with the OCAP platform that will differentiate their 
product from devices available from cable operators.
    Undoubtedly, requiring cable operators to adhere to OCAP in exactly 
the same manner as competitive manufacturers would create the most 
level playing field possible. At the same time, such a regime is not 
consonant with the intent in which the Commission implemented Section 
629. Our rules were specifically crafted so as not to freeze in place 
technology. In the Navigation Devices Order, the Commission stated that 
permitting the development of a commonly used interface specification 
``. . . is a rather loose and flexible requirement which we believe, 
however, may provide the involved parties sufficient guidance to 
proceed while not creating barriers to the types of change and 
technical advance that the Section 624A [Consumer Electronics Equipment 
Compatibility] amendments sought to protect.'' Requiring cable 
operators to move in ``lockstep'' with competitive manufacturers may 
have the ultimate effect of impeding competition by stifling innovation 
and leading to one ``vanilla'' set-top box. The flexibility inherent in 
our rules will provide the cable operator with the freedom to test new 
service offerings that may not initially conform to the OCAP standard 
or any other existing standard. Any successful service could then be 
included in an existing or newly created OpenCable standard for 
inclusion in newer models of competitive set-top boxes.
    Finally, with respect to the Commission's authority to require 
devices to respond to a ``broadcast flag,'' there is no statute that 
explicitly grants the Commission jurisdiction to impose such a 
requirement. The best argument that could be made is that the 
Commission could invoke its ancillary jurisdiction to impose such a 
requirement in order to effectuate the Commission's responsibilities to 
promote DTV services and to ensure the viability of a free over-the-air 
system of broadcasting. However, such an argument likely would be 
challenged in court, and it would be difficult to defend without 
explicit statutory authority.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
    Question. In its recently issued Broadband Initiative, the FCC 
proposes to deregulate the provision of advanced services by incumbent 
local exchange carriers, based partly on the presence of competition 
from cable and satellite service providers.
    How will the FCC promote the provision of broadband via satellite? 
Will satellite systems be viable competitors to future ILEC advanced 
service providers?
    Answer. Currently, satellite providers are offering high-speed Ku-
band broadband service to residential and business customers on long-
distance and last-mile bases in the United States. The number of 
satellite broadband providers and subscribers is expected to grow. The 
FCC has now authorized sixteen companies in two rounds of application 
processing to provide fixed-satellite service in the Ka-band. A couple 
of those licensees plan to launch their first Ka-band satellites as 
early as 2003. Many of the Ka-band licensees propose to provide via 
satellite a wide variety of broadband interactive, direct-to-home and 
digital services to all areas of the United States, including 
underserved and rural areas, and around the world. With the development 
of Ka-band systems, we anticipate that satellite systems will be viable 
competitors to ILECs and cable systems, particularly in areas where 
terrestrial services cannot easily provide broadband service.
    Question. A number of global and domestic satellite providers--
among them ICO--are betting their business on providing satellite 
services at broadband speeds to both urban and rural users. They're 
seeking FCC approval for flexible spectrum use in order to do this.
    What is the status of these proceedings?
    Answer. On August 17, 2001, the Commission released a Notice of 
Proposed Rulemaking to consider whether to grant flexibility in 
delivery of communications by mobile satellite service operators. The 
proceeding was initiated in part to consider proposals by New ICO 
Global Communications and Mobile Satellite Ventures Subsidiary LLC to 
integrate ancillary terrestrial components with their networks using 
their assigned satellite spectrum. Comments on the proposals were due 
on October 22, 2001, and reply comments were due on November 13, 2001. 
On March 6, 2002, the International Bureau released a public notice 
seeking limited technical comment on specific issues raised in the 
proceeding. Comments on the Technical Public Notice are due on March 
22, 2002.
    The record in this proceeding now exceeds 1,700 pages. The 
Commission staff is currently in the process of reviewing and analyzing 
comments from the industry on the Commission's proposals and analyzing 
the possibilities for providing spectrum flexibility in the mobile 
satellite service bands. The Commission staff will begin reviewing the 
additional technical comments as soon as they are filed.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
    Question. You told NARUC that, ``We need to keep incentives alive 
that encourage investment in alternate platforms (such as cable, 
wireless, and satellite) and push entrepreneurs to find creative ways 
to bypass incumbents and get into the home'' (10/25/01). I voted for 
the Telecommunications Act of 1996, which envisioned intramodal 
competition as well. What are you doing to promote competition over the 
local loop?
    Answer. We take very seriously our obligations to carry out the 
unbundling provisions of the Telecommunications Act, and have found in 
both unbundling proceedings to date that competitors are impaired 
without access to the local loop. We have also recently initiated two 
proceedings, the UNE Performance Measurements and Special Access 
Performance Measurements proceedings, to explore ways to measure how 
well incumbents are performing their unbundling obligations, including 
provisioning the local loop, and how we could use those measures to 
enforce incumbents' obligations. The Commission has been aggressive 
about using our current enforcement authority to ensure that carriers 
comply with their statutory obligations. Finally, the Commission 
proactively monitors ILEC compliance with section 271. The Commission's 
Enforcement Bureau identifies and monitors section 271 compliance risk 
areas, coordinates with state public service commissions, and meets 
with competing carriers and other parties to hear allegations of 271 
violations.
    Question. New Mexico has a number of rural areas and tribal 
regions. How can we best ensure that broadband reaches these people? If 
you see USF as part of the solution, are you concerned that data 
deregulation would reduce the amount of funding available for universal 
service support?
    Answer. I understand your concern regarding the availability of 
advanced services in rural and tribal areas in New Mexico. You should 
be assured of my commitment to providing the appropriate regulatory 
framework that will help promote the deployment of broadband services 
to all Americans, especially those living in more remote regions of our 
nation.
    You will be interested to know that during the Commission's recent 
inquiry concerning the availability of advanced telecommunications 
capability, the Commission found that there has been promising growth 
in the availability of broadband services in rural and tribal areas. 
Specifically, between December 1999 and June 2001 the reporting of 
high-speed subscribership increased from 19.9 percent to 36.8 percent 
for the least densely populated zip codes. Additionally, the reporting 
of high-speed services in tribal areas increased from 49 percent to 
71.3 percent.
    Despite the encouraging progress in rural and tribal areas, I agree 
that it is important to consider closely the unique challenges to 
providing broadband services in more rural areas of our nation. Indeed, 
market trends in rural areas appear to be in a period of transition, 
and service providers are working hard to establish viable business 
plans that will make the successful deployment of broadband services in 
rural areas economically feasible. Recent trends in technology are also 
especially promising for rural areas. For example, service providers 
recently deployed a two-way platform for satellite high-speed services 
in all 50 states. In addition, various DSL extensions products have 
been developed that may bring consumers, especially those in low-
density areas, within range for DSL services.
    The second part of your question raises an important issue. Section 
254(d) of the Communications Act requires all telecommunications 
carriers that provide interstate telecommunications services to 
contribute to universal service. Because information service providers 
are not telecommunications carriers, they are not currently required to 
contribute directly to support universal service. Section 254(d), 
however, gives the Commission discretion to require providers of 
interstate telecommunications to contribute if the public interest so 
requires. Cognizant of this discretionary authority, we devoted 
substantial attention in the recent Broadband NPRM to the question of 
how to sustain universal service in an evolving communications market.
    I assure you that I am committed to preserving and advancing the 
universal service goals set forth in the Act. We are examining 
universal service issues through a variety of vehicles, including our 
on-going examination of the way in which universal service 
contributions are collected. I am confident that all of these actions 
taken together will continue to ensure specific, predictable, and 
sufficient support mechanisms.
                                 ______
                                 
          Questions Submitted by Senator Kay Bailey Hutchison
    Question. Please describe your broadband vision and new regulatory 
policy paradigm. In addition, please share your timeframe objective for 
establishing a national, technology-neutral broadband policy.
    Answer. I, and the full Commission, have articulated the principles 
and goals for our national broadband policy most recently in the 
Broadband NPRM and in the Cable Modem Declaratory Ruling. First and 
foremost, we emphasized that the Commission's broadband policy will be 
guided by, and grounded in, the Communications Act. I, therefore, view 
the Communications Act, and its mandate to both encourage robust 
competition among various communications providers and preserve and 
advance universal service, to be the foundation of the Commission's 
broadband policy.
    In addition, the Commission is guided by several other principles 
and goals. Specifically, our primary policy goal is to ``encourage the 
ubiquitous availability of broadband to all Americans.'' Section 706 of 
the Telecommunications Act of 1996 charges the Commission with 
``encourag[ing] the deployment on a reasonable and timely basis of 
advanced telecommunications capability to all Americans'' by 
``regulatory forbearance, measures that promote competition . . ., or 
other regulating methods that remove barriers to infrastructure 
investment.'' Moreover, consistent with section 230(b)(2) of the Act, 
we seek ``to preserve the vibrant and competitive free market that 
presently exists for the Internet and other interactive computer 
services, unfettered by Federal or State regulation.''
    As your reference to a technology-neutral policy also suggests, the 
Commission's broadband policy will recognize that broadband is evolving 
across multiple electronic platforms as traditional wireless, cable, 
satellite and wireline providers have made substantial investments in 
broadband capable infrastructures. We believe that by promoting the 
development and deployment of multiple platforms, broadband competition 
can thrive and the needs and demands of consumers can be met. As we 
commit to preserving opportunities for broadband competition, we must 
be cautious not to embed particular technologies, and instead, create a 
rational and consistent framework for the regulation of competing 
services that are provided via different technologies and network 
architectures. Finally, we believe that broadband services should exist 
in a minimal regulatory environment that promotes investment and 
innovation in a competitive market. We recognize that substantial 
investment is required to build out the networks that will support 
future broadband capabilities and applications. Therefore, our policy 
and regulatory framework will work to foster this investment by 
limiting regulatory uncertainty and unnecessary or unduly burdensome 
regulatory costs.
    With regard to a timeframe objective, we have several proceedings 
pending that are part of our effort to establish a national broadband 
policy. Specifically, the Broadband NPRM focuses on the appropriate 
legal and policy framework for broadband access to the Internet over 
domestic wireline facilities. We have already issued the Cable Modem 
Declaratory Ruling, which also contains an NPRM seeking comment on the 
regulatory implications of our finding that cable modem service is an 
information service. In the Incumbent LEC Broadband Notice, we are 
examining whether incumbent LECs that are dominant in the provision of 
traditional local exchange and exchange access service should also be 
considered dominant when they provide broadband telecommunications 
services. In the Triennial UNE Review Notice, we address, among other 
things, the incumbent LECs' wholesale obligations under section 251 of 
the Act to make their facilities available as unbundled network 
elements to competitive LECs for the provision of broadband services. 
Depending on resource constraints and the need to satisfy any statutory 
deadlines or mandates, we hope to resolve some, if not most, of these 
issues by the end of the year.
    Question. In its current broadband rulemakings, will the FCC 
consider the extent to which regulation may increase a broadband 
facility provider's infrastructure and operational costs and the 
potential impact on the price consumers' pay for broadband services?
    Answer. In all of the proceedings the Commission has initiated to 
establish a national broadband policy, we have focused on the need to 
create a minimal regulatory environment for such services. One of our 
primary goals is to provide as much regulatory certainty and clarity as 
possible in order to promote investment and innovation in facilities 
and in turn, investment and innovation in the services and applications 
that will be delivered to consumers via those networks. I fully intend, 
therefore, to consider the costs and benefits of all of our broadband 
regulations and their impact on all existing and potential providers of 
broadband services. Moreover, I believe that in creating a clear regime 
for broadband regulation we will provide the certainty necessary for 
the markets to make the investment decisions that will fund further 
deployment and provision of broadband services.
    In particular, the Triennial Review of Unbundled Network Element 
Obligations proceeding is intended to develop a comprehensive record on 
how changes in the marketplace, technology and other factors have 
affected whether competitors are impaired without access to such 
elements. It is our hope that by examining the real world experience of 
incumbents, new entrants, cable operators, and wireless service 
providers that we will be able to more accurately gauge the impact, 
including costs, of our unbundling rules. For example, as it did in the 
UNE Remand Order, the Commission has specifically asked for comment on 
how to assess the impact of our unbundling requirements on carriers' 
incentives to invest in facilities and to further deploy broadband 
services. We also acknowledge that there may be significant tension 
between our duties under the Communications Act to promote competition 
in opening the local exchange bottleneck and to promote continued 
investment in bringing broadband services to America. We seek, 
therefore, to identify and adopt regulatory requirements that preserve 
and encourage opportunities for facilities-based competition, maximize 
incentives for further infrastructure deployment, and minimize the 
regulatory costs on providers of broadband services.
    We also note that in the Broadband NPRM, the Commission is 
considering specifically the costs and benefits associated with any 
requirements that it might impose on broadband facilities providers to 
allow competitive providers to access their infrastructure. As part of 
this inquiry, we have asked parties to comment on the costs and 
benefits associated with both the Commission's existing access 
regulations as well as alternative market-based approaches to broadband 
regulation.
    Finally, we recognize that the price consumers are charged for 
retail broadband services is subject not only to the costs of providing 
that service, but by the degree of competitive alternatives available 
to that consumer. In view of our section 706 mandate to promote the 
deployment of broadband to all Americans, our aim is to further this 
goal by fostering the deployment of at least one and preferably 
multiple broadband infrastructures throughout the Nation.
    Question. I understand the FCC has recently contemplated revision 
to the current universal service funding mechanism. How has competition 
and technological advances changed the traditional funding regime? What 
changes and/or revisions to the funding mechanism is the FCC 
considering? Please explain the various funding alternatives and the 
pros and cons of each. Also, how does the FCC intend to address the 
recent Court remand related to Qwest v. FCC?
    Answer. In 1997, the Commission adopted a system under which 
telecommunications providers contribute to universal service based on 
their interstate end-user telecommunications revenues. As you note, 
since that time, the telecommunications marketplace has changed rapidly 
and technologies have evolved. For example, customers are migrating 
from traditional wireline telephone services to new products and 
services, such as mobile wireless services, bundled service offerings, 
and/or services utilizing broadband platforms, for which interstate 
telecommunications revenues may be difficult to identify. Other changes 
include Regional Bell Operating Company entry into the long distance 
market and related price competition. These trends may erode the 
contribution base over time and may lead to regulatory uncertainty and 
marketplace distortions.
    In light of these trends, the Commission began a proceeding to 
revisit its universal service contribution methodology in May 2001. 
Commenters representing all segments of the industry, consumer groups, 
and state regulatory bodies submitted a range of innovative ideas and 
proposals for reforming the current system. In February 2002, the 
Commission requested additional comment on a specific industry proposal 
to replace the existing, revenue-based assessment mechanism with one 
based on the number and capacity of connections provided to a public 
network. The Commission also invited commenters to present any further 
arguments or data regarding proposals to modify the existing revenue-
based system. We look forward to a lively discussion on these issues 
from industry and consumers groups, among others.
    Under the industry proposal, wireless and wireline carriers would 
contribute $1 per month for each physical connection provided to 
residential customers. Contributions for business connections would be 
based on the maximum available capacity, or bandwidth, of the 
connection. The proponents of this proposal argue that, because the 
number of connections historically has been more stable than interstate 
revenues, a connection-based system would provide a more stable funding 
source for universal service as technologies evolve. They also argue 
that a connection-based system also would eliminate some of the 
complexity involved with charges that carriers often pass-through to 
their customers and would simplify contributor reporting obligations by 
eliminating distinctions between interstate and intrastate revenues, or 
telecommunications and non-telecommunications revenues.
    Other proposals seek to address specific concerns regarding the 
existing revenue-based system. For example, some have proposed looking 
at projected revenue to address the concern that basing contributions 
on historical revenue data benefits new entrants and contributors with 
increasing assessable revenues, while disadvantaging contributors with 
declining revenues. Other proposals include assessing collected instead 
of billed revenues to account for uncollectibles. Opponents of these 
proposals assert they would increase the complexity and decrease the 
stability of universal service contributions.
    Of course, modifying the Commission's contribution methodology 
would potentially require a transition period for carriers to adjust to 
changed reporting requirements and may result in a shifting of 
contribution obligations among different industry segments. The 
Commission is actively considering these and other alternative 
proposals regarding whether and how to change the way carriers 
currently contribute to universal service.
    In response to your last question, the Commission intends to 
address the remand in Qwest v. FCC with an order following 
recommendations from the Federal-State Joint Board on Universal Service 
(Joint Board). Because the Joint Board previously considered many of 
the issues remanded by the court, we concluded that further Joint Board 
input would be beneficial. Accordingly, we referred these issues to the 
Joint Board and requested a recommended decision by August 15, 2002.
                   SECURITIES AND EXCHANGE COMMISSION

STATEMENT OF HARVEY L. PITT, CHAIRMAN

                           prepared statement

    Senator Hollings. The committee will next hear from Harvey 
L. Pitt, the Chairman of the Securities and Exchange 
Commission.
    Chairman Pitt, the committee welcomes you, and we would be 
delighted to receive your statement at this time in its 
entirety, if you wish, or you can file it and highlight it, as 
you wish.
    Mr. Pitt. Well, thank you, Mr. Chairman, and Senator Gregg. 
I would ask that my full statement be included in the record, 
and I have a few opening remarks, if that is okay.
    Senator Hollings. Yes, sir.
    [The statement follows:]
                  Prepared Statement of Harvey L. Pitt
    Chairman Hollings, Senator Gregg, and Members of the Subcommittee: 
Thank you for the opportunity to testify before you today on behalf of 
the Securities and Exchange Commission regarding the President's fiscal 
2003 budget request. This is the first time I have appeared before this 
Subcommittee, and I want to begin by expressing my gratitude, and that 
of the entire SEC, for the tremendous bipartisan support this 
Subcommittee has given the Commission over the years. I look forward to 
continuing this strong and positive working relationship.
    The past year has tested the mettle and resiliency of our country, 
our markets, and the investing public's confidence. At a time when the 
complexity of our financial markets continues to grow unabated, and the 
number of Americans who participate in them is steadily increasing, the 
Commission must ensure that its traditional high standards are not 
compromised. The goal of the SEC is to ensure that our financial 
markets are transparent and fair to all investors, and to do so, we 
must make certain that the public is adequately informed about 
investing and that corporate America provides the disclosure investors 
need to make fully informed decisions based on sound and reliable 
information. An integral part of our investor protection efforts is the 
SEC's aggressive law enforcement program, which protects investors from 
fraudulent and unfair practices. Given this backdrop, it is therefore 
critical that the SEC have the resources it needs to fulfill its 
multiple missions.
    I was privileged to spend the first ten years of my career as a 
lawyer at the SEC. When I returned there last fall, 23 years later, I 
had hoped to have the opportunity to perform an in-depth review of the 
Commission's operations, effectiveness, and resource needs prior to 
beginning the fiscal 2003 budget process. With the events of September 
11th, the destruction of our Northeast Regional Office, and the recent 
bankruptcy of Enron, I have not had this chance. Yet all of these 
events have demonstrated just how critical the Nation's capital markets 
are to national security, and the essential role of the SEC.
                             funding level
    The President's budget requests an appropriation of $466.9 million 
for the Commission in fiscal 2003. This amount excludes $13 million 
that would be provided to the SEC to fund the Administration's 
retirement accrual proposal, if enacted. The 2003 appropriation request 
is therefore approximately 6.6 percent more than our fiscal 2002 budget 
of $437.9 million.\1\
---------------------------------------------------------------------------
    \1\ In fiscal 2002, the Commission also received a supplemental 
appropriation of $20.7 million to cover some of the costs associated 
with rebuilding our Northeast Regional Office and increasing security 
agency-wide.
---------------------------------------------------------------------------
    This proposed funding level provides the SEC with a ``zero-growth'' 
budget in that it provides no new staff and only modest amounts for the 
SEC's e-government and information technology initiatives, 
telecommunications systems, and security enhancements. The Commission 
has not received a staffing increase in the last two years, despite the 
additional responsibilities we have received as a result of enactment 
of the Commodity Futures Modernization Act and the Gramm-Leach-Bliley 
financial services modernization act. If the SEC remains at its current 
staffing level, the agency will be required to continue to divert 
resources from other program areas to meet our enforcement needs and to 
address the additional initiatives we are undertaking to improve 
financial reporting and disclosure.
                               pay parity
    Although the Commission requested full funding for ``pay parity'' 
in fiscal 2003, as authorized by the ``Investor and Capital Markets Fee 
Relief Act'' (Public Law 107-123), enacted this January, the 
Administration's proposed funding level provides no new money to 
implement this vitally important program. We estimate that an 
additional $76 million is needed to provide pay parity for the agency 
in fiscal 2003.\2\ At this critical time for the Nation's financial 
markets, the SEC must be able to keep our most experienced, talented, 
valuable and productive employees. The only way I believe we can do 
that is to provide staff with pay parity at levels comparable to those 
with whom they regularly work at the other federal financial regulatory 
agencies.
---------------------------------------------------------------------------
    \2\ In fiscal 2001, the Commission received approval and funding to 
implement ``special pay'' to help begin addressing our recruitment and 
attrition problems. In fiscal 2002, we also received funding to 
continue special pay. The appropriation proposal for fiscal 2003 
provides $19 million to fund special pay. We estimate that an 
additional $76 million is needed to fund pay parity for fiscal 2003.
---------------------------------------------------------------------------
    Since the Senate confirmed me this past August, pay parity has been 
and remains my highest budget priority. In making this funding request, 
I am grateful to have bipartisan backing from the Chairman and Ranking 
Member of the SEC's Senate oversight body, the Committee on Banking, 
Housing and Urban Affairs. Notably, in the past month, Chairman Paul 
Sarbanes and Senator Phil Gramm both have called for full funding of 
pay parity. Chairman Sarbanes and Senator Gramm have pointed out that 
this is a crucial time in the development and strategic future 
direction of our capital markets. The SEC cannot afford to continue 
suffering the staffing crisis it has endured for the past decade at 
such an important juncture. Pay parity provides benefits we truly need 
to meet the increasing regulatory challenges we face.
    If we receive funding for pay parity, I want to assure you that the 
SEC intends to make responsible increases in staff salaries and 
benefits to ensure the appropriate use of merit and performance-based 
principles. Our $76 million cost estimate represents a conservative 
approach that is lower than the amount that we believe would be 
required to match what several of the banking agencies currently 
provide. A fully implemented system identical to the FDIC model, for 
example, could easily cost more than $100 million. We do not intend to 
provide large-scale, across-the-board increases. Instead, we intend to 
base our system on the intent of Congress and begin a modest, 
considered approach to pay parity that we can assess responsibly before 
including additional benefits. Merit will be an integral component of 
any program we put in place.
    However, I want to make emphatically clear that failure to fund pay 
parity now would only exacerbate the problems that the legislation 
passed by Congress last December was intended to cure. By raising 
expectations and hopes in anticipation of finally achieving pay parity, 
I believe we will face even greater employee losses and suffer greater 
irreparable harm to morale if pay parity is not funded in fiscal 2003, 
and thereafter. Even if we can cobble together a pay parity program for 
the remainder of this fiscal year, which OMB has said it would support, 
the threat of either terminating the program in fiscal 2003 or 
terminating approximately 700 employees--the number we estimate would 
have to be cut from the agency to continue the program--would cripple 
many of the projects we have underway, which are important for the 
protection of investors and Americans whose retirement accounts are 
invested in the securities of public companies.
    So, if there is one message I can leave with you today, it is: 
Please, please fully fund pay parity for the SEC in fiscal 2003.
                       additional staffing needs
    Because of recent events, we need to restore full confidence in our 
capital markets, and I believe we cannot do that without additional 
personnel. Accordingly, in addition to requesting additional funds 
needed to implement pay parity, I am requesting that the 2003 staffing 
level be increased by 100 positions to meet our immediate resource 
needs. Although I intend to make a strategic, agency-wide assessment of 
resource needs over the next several months in preparation for the 
fiscal 2004 budget, with the goal of identifying efficiencies that we 
can introduce, I have been able to identify some immediate needs that I 
hope this Subcommittee will consider funding in fiscal 2003. These 100 
positions would allow us to add:
  --35 accountants and lawyers in the Division of Enforcement to deal 
        with the increasing workload from financial fraud and reporting 
        cases. To give you a sense of scale of this increasing 
        workload, consider that over the first two months of this year, 
        the Division of Enforcement has opened 49 cases investigating 
        financial fraud and reporting, compared to 18 cases that were 
        opened over the same time period last year.
  --30 professional staff, including accountants and lawyers, in the 
        Division of Corporation Finance to expand, improve and expedite 
        our review of periodic filings. Our Division of Corporation 
        Finance has undertaken to monitor the annual reports submitted 
        by all Fortune 500 companies that file periodic reports with 
        the Commission in 2002. This new initiative, which we announced 
        in December, significantly expands the Division's review of 
        financial and non-financial disclosures made by public 
        companies.
  --35 accountants, lawyers, and other professionals in the other 
        divisions--including the Office of Chief Accountant--to deal 
        with new programmatic needs and policy.
    Under a pay parity system, this increased staffing level will 
require an additional $15 million to our budget request. These are the 
minimum staffing levels I believe we require to deal with our immediate 
post-Enron needs. I will be examining closely our need for resources 
throughout the agency and expect that our 2004 budget request, even 
with identified efficiencies, may reflect other increases, particularly 
in our examination program to meet our goals for timely and frequent 
on-site exams of investment companies and advisers, broker-dealers, and 
the exchanges. The remainder of my testimony addresses initiatives we 
are undertaking in the areas of enforcement, corporate disclosure and 
accounting, investor education and technology.
                         real-time enforcement
    One of our major new initiatives--``real-time'' enforcement--is an 
important component of our fiscal 2003 budget. Our goal is to provide 
quicker, and more effective, protection for investors, and better 
oversight of the markets with our limited enforcement resources. As 
recent experience has reinforced, the SEC must resolve cases and 
investigations before investors' funds vanish forever; that means we 
must act more quickly, both in identifying violations and taking prompt 
corrective action to protect investors. Faster enforcement can help 
prevent continued fleecing of public investors and dissipation of 
assets, and will promote investor confidence in the integrity of our 
markets. As a result, you will see us moving faster to obtain temporary 
restraining orders, freezes of assets, and appointment of court 
monitors to oversee enterprises that commit, or used to commit, 
securities fraud. These efforts necessarily require resources, the most 
important of which is appropriate staffing. An immediate staffing 
increase of 35 accountants and lawyers in our Division of Enforcement, 
which I have already outlined, would strengthen our real-time 
enforcement program, especially in the area of financial fraud and 
reporting cases, which involve complex and time-consuming 
investigations.
                       disclosure and accounting
    Recent events also have underscored the need for public companies 
to have a strong commitment to full disclosure, accounting and 
compliance with all regulatory regimes to which their companies are 
subject. In his State of the Union Address, the President appropriately 
demanded ``stricter accounting standards and tougher disclosure 
requirements.'' He also stated that he wants corporate America to ``be 
made more accountable to employees and shareholders and held to the 
highest standard of conduct.'' The SEC shares and embraces these 
principles, and I am firmly committed to making them a reality.
    Recently, we announced our intention to propose changes in 
corporate disclosure rules as the first in a series of steps designed 
to improve our financial reporting and disclosure system. The proposed 
rules would require companies to report additional critical information 
on a current basis and in a complete manner, such as transactions by 
company insiders, critical accounting policies, and changes in rating 
agency decisions. They also would expedite the filing of existing 
periodic reports. While these proposed rules would only be a first 
step, they will provide the most dramatic and significant improvements 
in our disclosure system in at least two decades, and they can be 
implemented quickly while other, more sweeping proposals are 
considered. During the remainder of 2002, we anticipate proposing 
further comprehensive reform proposals covering financial reporting and 
disclosure requirements, accounting standard setting, regulation of the 
auditing process and profession and corporate governance. These 
initiatives include the following:
  --A ``current'' disclosure system.--Investors need current 
        information, not just periodic disclosures. We want investors 
        to have an accurate and current view of the posture of their 
        company, as seen through the eyes of management. Public 
        companies should be required to make affirmative disclosures of 
        unquestionably material information in real time, including 
        providing updates to prior disclosures.
  --Public company disclosure of significant current ``trend'' and 
        ``evaluative'' data.--Providing current trend and evaluative 
        data would enable investors to assess a company's evolving 
        financial posture. This information, upon which corporate 
        executives and bankers already base critical decisions, can be 
        presented without confusing or misleading investors, 
        prejudicing legitimate corporate interests or exposing 
        companies to unfair assertions of liability.
  --Clear and informative financial statements.--Investors, and 
        employees concerned with preserving and increasing their 
        savings and retirement funds, deserve comprehensive financial 
        reports they can easily and quickly interpret and understand.
  --Conscientious identification and assessment of critical accounting 
        principles.--Public companies should be required to identify 
        the most critical accounting principles upon which a company's 
        financial status depends, and which involve the most complex, 
        subjective, or ambiguous assessments. Investors should be told, 
        concisely and clearly, how these principles are applied, and 
        should be informed about a range of possible effects in 
        differing applications of these principles.
  --More meaningful investor protection by audit committees.--Audit 
        committees must be proactive, not merely reactive, to ensure 
        the quality and integrity of corporate financial reports. 
        Especially critical is the need to improve interaction between 
        audit committee members and senior management and outside 
        auditors. Audit committees must understand why critical 
        accounting principles were chosen, how they were applied, and 
        have a basis to believe the end result fairly presents the 
        company's actual status.
  --Effective oversight of those who audit public companies.--We are 
        firmly committed to taking a lead role in assuring that the 
        accounting profession functions properly, expeditiously and in 
        the public interest. To that end, we are addressing how best to 
        restructure the regulatory system that governs the accounting 
        profession. We envision a regulatory body that will assume 
        responsibility for auditor and accountant discipline and 
        quality control. A substantial majority of its members would be 
        unaffiliated with the accounting profession, and the oversight 
        body would be funded not by the accounting profession but from 
        the private sector.
  --Ensuring those entrusted with the important public responsibility 
        of auditing public companies are single-minded in their 
        devotion to the public interest, and not subject to conflicts 
        that might confuse or divert them.--Those who perform audits 
        must be truly independent and in particular must not be subject 
        to the conflict of increasing their own compensation at the 
        risk of ensuring the public's protection. Their fidelity to the 
        cause of full, fair and understandable financial reporting must 
        be ironclad and unequivocal.
    These are just some of the initiatives that we are working on, both 
on our own and together with Congress, the President's Working Group, 
investor groups and other SEC constituents to improve corporate 
disclosure and accounting. These initiatives, if done properly and 
responsibly, will require additional resources to plan and implement, 
if we are to keep up with our existing, on-going responsibilities at 
the same time.
    Regrettably, at this time, I cannot give you even an estimate of 
those costs. As I stated at the outset of my testimony, I plan to 
conduct a top-to-bottom review of the way the Commission currently 
allocates its resources, with the intention of making better use of our 
existing resources. But, in light of the events of the past six months, 
I think it is foreseeable that the SEC will require additional funding 
to implement improvements to our corporate disclosure and accounting 
systems.
                           investor education
    Even with our shift toward real-time enforcement and our current 
efforts to improve financial disclosure, the first line of defense 
against fraud is always an educated investor. The Commission works with 
numerous public and private organizations to foster investor 
educational programs. Our staff gives presentations to countless 
schools, religious organizations, and investor clubs, explaining basic 
investing concepts and answering questions. We also host ``Investor 
Town Meetings'' across the United States, that bring together industry, 
federal, and local government officials to educate investors on basic 
financial concepts. And this spring we will host our first ``Investor's 
Summit,'' to discuss policies and proposals that impact them. We want 
to give all Americans an opportunity and an avenue to weigh in on the 
broad policy objectives that ultimately could impact their ability to 
send their children to college or retire comfortably. We plan to use 
the Internet to broadcast the summit so that anyone can participate. We 
also are asking people to write us and call us so that we can hear the 
broadest possible range of viewpoints. We want to hear the concerns and 
aspirations of America's investors.
                         information technology
    Like the rest of the government, our needs in the area of 
information technology continue to increase. Given the critical and 
increasing role of technology in the financial markets, the President's 
budget requests $4.0 million to fund the SEC's e-government 
initiatives. This is an area where the Commission needs to improve, 
both internally and externally. Technology is constantly altering the 
landscape of our markets, and SEC staff must have the necessary tools 
at their disposal to successfully meet the increasing demands that we 
face. In particular, funds proposed for fiscal 2003 will allow the SEC 
to get better and more timely enforcement information from the markets, 
enhance our intrusion detection capabilities, and meet the President's 
security requirements for information technology. These initiatives are 
a small, but important, first step toward meeting the Commission's 
technology needs.
    With the advent of alternative trading systems that have grown from 
only a handful to over 60 today, and as a result of the Internet, the 
SEC also must consider what effect our regulatory actions and decisions 
have on the industry's use of technology. To respond to this need, we 
are seeking a Chief Technology Officer to provide the Commission with 
the technical expertise and advice necessary to improve the 
Commission's oversight of the markets. On February 4, 2002, I sent you 
a reprogramming request that lays out in detail the proposed activities 
of this office. Generally, this office will be responsible for ensuring 
that the SEC's regulatory, disclosure, examination, and law enforcement 
programs are implemented with the benefit of a state of the art 
understanding of technology. Through this process, the agency can be 
confident that what we implement or approve is technologically sound 
and cost effective to the private sector.
                           funding structure
    Last, I would be remiss if I did not take this chance to thank you 
for your support in helping enact the fee reduction/pay parity 
legislation that I discussed earlier in my testimony. This new law is 
extremely important to the SEC and the securities industry, which has 
consistently supported both fee reduction and pay parity. The new 
legislation not only reduces potential excess fees paid by investors 
and provides authority for pay parity for the Commission's staff, but 
also provides the SEC with a stable, long-term funding structure, which 
is consistent with the original fee structure implemented to fund the 
SEC.
    Under the fee reduction/pay parity legislation, the Commission is 
slated to collect a total of $1.33 billion in offsetting collections in 
fiscal 2003, $180 million more than this year's estimate. Even after 
funding pay parity and the additional positions described above, the 
Commission will still collect $772 million more in fees than its fiscal 
2003 budget request.
    The fee reduction/pay parity legislation requires the Commission to 
adjust fee rates on a periodic basis after consulting with the 
Congressional Budget Office and the Office of Management and Budget. 
While the fee rates are going to be higher than anticipated in the 
short term, due to changes in the economy and declines in market 
indices since CBO developed its original dollar volume estimates over a 
year ago, we firmly believe that over the longer term the fee reduction 
legislation will provide the investing public with the benefits and 
security it was designed to provide, in addition to benefiting the 
Commission and this Committee by providing a stable, long-term funding 
source.
                               conclusion
    In conclusion, I want to observe that the SEC currently oversees 
our nation's securities markets with a modest staff and limited 
resources, operating in conjunction with the states and self-regulatory 
organizations. This cooperative structure enables the Commission to 
leverage its resources to fulfill its mission, but leverage can only go 
so far. Without knowing exactly where and how many, I can say with 
certainty that the SEC needs more staff; that is why I have recommended 
an immediate fiscal 2003 increase of 100 key professional staff and 
will be making a more thorough, agency-wide assessment over the next 
several months.
    The SEC regulates industries and markets that have grown 
enormously, in both size and complexity. The Commission currently 
oversees an estimated 8,000 brokerage firms employing nearly 700,000 
brokers; 7,500 investment advisers with approximately $20 trillion in 
assets under management; 34,000 investment company portfolios; and over 
17,000 reporting companies. The Commission also has oversight 
responsibilities for nine registered securities exchanges, the National 
Association of Securities Dealers, the National Futures Association, 13 
registered clearing agencies, and the Municipal Securities Rulemaking 
Board.
    I take quite seriously my stewardship responsibilities and the Oath 
of Office I took regarding the Commission and its resource needs. I 
hope that we can work together to make sure that the SEC has sufficient 
resources to ensure that our markets remain the envy of the world and 
are as fair and transparent to all investors as we can possibly make 
them. Thank you for the opportunity to testify today. I am pleased to 
respond to any questions the Subcommittee may have.

                            OPENING REMARKS

    Mr. Pitt. Let me say first that I appreciate the 
opportunity to testify on fiscal year 2003 appropriations for 
the Securities and Exchange Commission. This is my first 
appearance before this subcommittee since I became SEC Chairman 
6 months ago. I want to express my gratitude and that of the 
entire SEC for the bipartisan support this subcommittee and its 
staff have given the Commission over the years. And I look 
forward to continuing the strong and positive working 
relationship.
    The events of the past 6 months have tested the mettle and 
resiliency of our country, our capital markets, and the 
Securities and Exchange Commission. At the same time, they have 
put the investing public's confidence in our capital markets to 
a severe test. September 11th and the Enron tragedy demonstrate 
how critical the Nation's capital markets are to national 
security and economic growth.
    Because the agency I am privileged to chair is integral to 
the success of our capital markets, it is vital that the SEC 
have the resources it needs to fulfill its multiple missions. 
We need these resources even more if we are to restore the 
public's full confidence in our capital markets.
    The President's budget for fiscal year 2003 requests an 
appropriation of nearly $467 million for the Commission. It is 
clear to me from recent events, including the program the 
President is announcing this morning to improve and strengthen 
the duties of those whose conduct is at the core of our 
securities markets, that the SEC critically needs to receive 
additional money in fiscal year 2003 to fully fund pay parity 
and that we should be authorized to add additional staff to 
address some pressing immediate needs.

                  JUSTIFICATION FOR FUNDING PAY PARITY

    Let me address pay parity first. The Investor and Capital 
Markets Fee Relief Act, enacted this January, authorized pay 
parity for the employees of the Securities and Exchange 
Commission. Our Commission has been subject to extremely high 
attrition, with the principal reason being the fact that our 
employees earn substantially less than their counterparts in 
the other financial service regulatory agencies, not to mention 
the private sector.
    The OMB-proposed funding level, $467 million, did not 
provide any money to implement pay parity, a disappointment to 
our most valued employees. We estimate that an additional $76 
million is needed to provide for a modest implementation of pay 
parity for the agency in fiscal year 2003.
    At this critical time to the Nation's financial markets, we 
must rely on our most experienced, talented, valuable, and 
productive employees. The only way to do that is for us to be 
able to provide our staff with pay parity at levels comparable 
to those received by colleagues with whom they regularly work 
at the other Federal financial regulatory agencies.
    If we receive funding for pay parity, I can assure you that 
the Commission intends to make responsible increases in staff 
salaries and benefits, with a significant component of the 
increases subject to true merit pay.

                       INCREASED STAFFING REQUEST

    In addition to the absence of funds to implement pay 
parity, we were originally given a no-growth budget, which 
means that we were not going to add any new personnel. Indeed, 
under current funding levels for 2002, we are effectively 
precluded from hiring any new personnel. I do not believe that 
the solution to every problem starts and ends with larger and 
more expensive Government. I am committed to doing a thorough 
review of our deployment of personnel to see whether and how we 
can effectuate meaningful efficiencies.
    But the events of 9/11 and the tragedy of Enron have made 
any contemplative review of our needs impossible. Given the 
enormous surge in our enforcement activities, the desire to do 
a better job than has been done previously in reviewing public 
company filings and overseeing a restructured accounting 
profession, even before looking for efficiencies, I must 
request that SEC staffing be increased by 100 positions in 
fiscal year 2003. These are the minimum staffing levels I 
believe we require to deal with our immediate post-Enron needs.
    Under a pay parity system, this increased staffing level 
would require an additional $15 million. This additional staff 
will start helping us meet our immediate enforcement needs as 
well as address initiatives we are undertaking to improve 
financial reporting and disclosure.
    I might add that the Commission has not received a staffing 
increase in the last 2 years, despite additional 
responsibilities the agency has received as a result of the 
Commodity Futures Modernization Act and the Gramm-Leach-Bliley 
Financial Services Modernization Act.
    A staffing increase is even more critical in light of 
recent events. I am very happy to be able to say that yesterday 
I spoke with OMB Director Daniels, who advised me that OMB is 
receptive to our request for additional staff and will work 
with us to meet our resource needs.
    In the coming months, I will be examining closely our need 
for resources throughout the agency in preparation for the 
fiscal year 2004 budget, with the goal of identifying 
efficiencies we can employ. However, given current events, it 
is very likely that we will have to come back and ask for 
resources over and above what I have requested here today.
    If there is one message that I can leave you with today, it 
is, please, please, fully fund pay parity for the SEC in fiscal 
year 2003.
    I thank you for this opportunity to testify, and I look 
forward to trying to respond to any questions the subcommittee 
may have.

              SEC STAFFING LEVELS AND COMMISSION WORKLOAD

    Senator Hollings. Well, I thank you for talking to Mitch 
Daniels. I noticed in the morning's paper that evidently the 
head of the Corps of Engineers didn't, and he is gone. You ask 
for $76 million more in your statement than OMB gave for pay 
parity, and $15 million more for increased staff. Let the 
record show that this subcommittee approved yesterday the 
reprogramming request of $24 million to pay for pay parity this 
fiscal year.
    Yes, I will agree, and I take it my distinguished colleague 
will also, on both pay parity and the additional personnel, 
because we received the GAO report that came out yesterday 
which states that over the last decade corporate filings have 
increased 60 percent, and related review staff has only 
increased by 29 percent. The number of complaints and inquiries 
received increased by 100 percent while the staff dedicated to 
investigate complaints and other matters increased by only 16 
percent. Thereby the imbalance between workload and resources 
has resulted in the Securities and Exchange Commission taking 
longer to process filings, issue guidance, and review 
applications. These delays could affect industry competition 
and efficiency.
    And the imbalance between workload and resources has raised 
concerns that the Securities and Exchange Commission cannot 
properly carry out its enforcement role. The number of cases 
pending as of the end of the year increased 77 percent from 
1991 to 2000.
    So those are the two things that concern me, Chairman Pitt, 
and I wanted to make sure that we support your agency's efforts 
because we know the Securities and Exchange Commission 
generally is highly respected and is working around the clock, 
and it is Congress who has tried to give even more than the 
President asks for every year, more than OMB would allow. So I 
am glad you have ironed out these issues with the Office of 
Management and Budget.
    Senator Gregg.
    Senator Gregg. Mr. Chairman, I want to second your 
comments. I think they are right on point, and I appreciate the 
Chairman testifying today about the needs of the SEC.
    This committee has been sensitive to that need for a long 
time. We fought the battle for pay parity. It was a fight that 
required us to go up the hill a number of times. It was 
successful. Now it needs to be funded. There is no question 
about that. And I appreciate the chairman's commitment to do 
that.
    The additional personnel is also obvious in the present 
climate. I hate for us to have to work late until the next 
appropriations cycle. I would hope that we could put all this 
in the supplemental, and since you have already signed on Mr. 
Daniels, I would hope that you would have signed him on for 
that exercise also. But, in any event, I will certainly support 
the chairman in however he wants to pursue this funding, and 
aggressively pursue it, because we all understand that the 
cornerstone of our capital markets is transparency and the 
integrity of the numbers, and that comes down to the SEC's 
disciplining of the marketplace and the accounting firms that 
are responsible for producing those numbers. And if we don't 
have strong capital markets, we don't have a strong economy and 
we don't have prosperity because we don't have creation of 
economic activity and jobs.
    So you could argue that the essence of our prosperity 
starts with having a strong SEC. So we certainly want to 
support you in this effort.

            PRESIDENT'S PROPOSED APPROACH TO ADDRESS ISSUES

    I would be interested to hear your analysis of the 
President's proposal relative to the new responsibilities that 
they are suggesting that the operating officers and executive 
officers of corporations have, almost putting them in a 
fiduciary position, if not actually putting them in a fiduciary 
position. Do you feel that is an appropriate step?
    Mr. Pitt. I think our President has laid out this morning a 
very serious and substantive and thoughtful approach to the 
problems that we are seeing or have been witnessing. I think 
that one of the concomitant factors with the President's 
proposals is that we intend to sit down and analyze those 
proposals and move just as quickly as we can to implement those 
elements of the proposal that are within our power to 
implement. And I believe most of them are within our power and 
we will be anxious to bring them to fruition and reality.
    I think that what he has outlined is sort of a tripartite 
approach to the problems we have witnessed. The first is to 
improve the functioning and dedication and loyalty of corporate 
offices and executives and directors to the investing public, 
who are, after all, the true owners of every corporation.

                    GREATER RESPONSIBILITIES ON CEOS

    This proposal that the President has put forth would place 
greater responsibility on chief executive officers, and one of 
the things that runs throughout the President's announced 
program is the fact that people who think that they can get by 
or get away with mere technical compliance, and aren't truly 
committed to the functions their offices require them to serve, 
will be sorely disappointed.
    In terms of our own enforcement efforts, we intend to make 
that a reality, and we will start as soon as we can looking at 
companies where executives have profited from illusory or sham 
earnings that ultimately get restated, where the shareholders 
wind up holding an empty bag and the executives walk away with 
millions and millions of dollars. We will go into court, and we 
will seek the return of those moneys to the corporation and 
those investors, as the President has suggested.

                    IMPROVING THE DISCLOSURE SYSTEM

    The second prong of the President's proposal addresses the 
disclosure process in general. Here I think we have the 
unfortunate occurrence of a statute which is almost 70 years 
old and has not been revitalized in most of that time frame in 
terms of its disclosure obligations. So it is approaching many 
of the issues today the way they were approached in 1934 when 
we didn't have the kind of technology and communications that 
we have today.
    In my view, many of the problems which the Enron situation 
have evidenced have been evident for 5 to 10 years, and they 
have not been dealt with. It is our intention and the President 
has made it clear that he expects of us that we will, in fact, 
turn our attention to that. We need to improve the disclosure 
system not so that shareholders are just given detail on detail 
on detail, many of which, at least speaking for myself when I 
read corporate filings, appear to me to be designed to avoid 
liability rather than being designed to inform.
    We have a very committed approach to revitalizing 
disclosure in this country and giving shareholders the same 
view of the companies they own as the people who manage and run 
those corporations.

                REVIEW AND REFORM OF ACCOUNTING INDUSTRY

    And his final area, which is quite significant, is dealing 
with the accounting profession. The accounting profession has 
very noble origins in this country, and it performs an 
incredibly important public service. At some point it is 
required, I guess, that we step back and make sure that 
everyone in the profession and everyone who depends on the 
profession is assured that the profession is acting in the 
public interest and not self-interest.
    I believe that we have the capacity and we have the 
inclination and the commitment to develop a strong private 
sector regulatory system that will provide, for the first time, 
meaningful regulation of the accounting profession from outside 
the profession, which is what the President has suggested.
    In addition, we will seek to reform the way in which 
accounting standards are articulated, and we will seek to 
provide for shareholders not just the protection of the law, 
not just the avoidance of illegal acts, but the establishment 
of the highest ethical and competence standards which will be 
enforced by a truly independent body that will have the 
authority to make certain that individual accountants and 
entire accounting firms live up to their public 
responsibilities.

                         NEW LEGISLATIVE NEEDS

    Senator Gregg. To what extent are you going to need 
legislative action to pursue those three goals?
    Mr. Pitt. I am sorry, sir?
    Senator Gregg. To what extent are you going to need 
legislative action to pursue those three goals?
    Mr. Pitt. I do not believe that we need legislative action 
to pursue those. We have been working closely in both Houses of 
Congress and on both sides of the aisle to lend our expertise 
because we understand that some Members of Congress believe 
that legislation is the appropriate way to go, and I have made 
clear that we will work to support whatever Congress believes 
is the appropriate approach.
    But I think the needs we have are pressing, and I believe 
it is imperative that we not spend excessive amounts of time 
worrying about how this will be done, but instead work together 
to try and get it done. And so we are in the process of 
soliciting views from the public. We will put out some 
proposals which we will discuss with Congress and our oversight 
committees before we ever put them out, and we will work with 
the Congress to come up with a package that I think lives up to 
the President's challenge.
    Senator Gregg. Thank you.

                 EFFECTIVENESS OF REGULATORY PROTECTION

    Senator Hollings. Chairman Pitt, your testimony is strongly 
supportive of regulatory protection outside the industry. We 
see in Business Week and other headlines that the regulatory 
protection that you have considered so far is weak: SEC 
prescribes weak cures for accounting industry's ills. I think 
there are three authorizing bills that are being discussed 
today, however, they wouldn't tell me the cost because they are 
having their own news conferences while you and I are 
testifying. I will look into these proposals, once made public, 
because this subcommittee of appropriations will have to 
respond to the authorization levels based on what is worked 
out.
    But, mind you me, the problems we see are not due to a lack 
of laws. The chief executives and those in charge are all 
coming up to Congress either taking the Fifth Amendment or they 
can't remember anything. But, of course there is no law to make 
everybody remember. It is very, very unfortunate because there 
has been a sort of weak operation all the way around with 
respect to the accountants also being the consultants, as you 
have already indicated in some of the comments that you have 
made. So that has got to be corrected, and it has got to be--
and I would emphasize that, too--regulated outside the industry 
and supported by fees. We want to make sure that whatever 
regulatory body is created is not beholden to industry, and is 
therefore fully supported by fees.

                          subcommittee recess

    Chairman Pitt, we thank you for your appearance here. The 
subcommittee record will stay open for any further questions. 
Thank you very much.
    Mr. Pitt. Thank you.
    [Whereupon, at 11:16 a.m., Thursday, 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 2003

                              ----------                              


                        TUESDAY, MARCH 12, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Ernest F. Hollings (chairman) 
presiding.
    Present: Senators Hollings, Inouye, Mikulski, Leahy, Reed, 
Gregg, Domenici, and Campbell.

                          DEPARTMENT OF STATE

                        Office of the Secretary

STATEMENT OF HON. COLIN L. POWELL, SECRETARY OF STATE

                           prepared statement

    Senator Hollings. Welcome, and we appreciate very much your 
appearance here this morning because you have more places to be 
than most any. We will be glad to receive your statement in its 
entirety at this time or you can highlight it, as you wish. It 
will be made part of the record.
    Secretary Powell. Thank you, Mr. Chairman.
    [The statement follows:]
                 Prepared Statement of Colin L. Powell
    Mr. Chairman, members of the subcommittee, I am pleased to appear 
before you to testify in support of President Bush's budget request for 
fiscal year 2003.
    Let me say at the outset, Mr. Chairman, before I go into the 
specifics of the budget request for the State Department and Related 
Agencies, that President Bush has two overriding objectives that our 
foreign policy must serve before all else. These two objectives are to 
win the war on terrorism and to protect Americans at home and abroad. 
This Administration will not be deterred from accomplishing these 
objectives. I have no doubt that this subcommittee and the Congress 
feel the same way. As you will see when I address the details of the 
budget request, a sizeable part is related to accomplishing these two 
objectives.
    As many of you will recall, at my first budget testimony to this 
committee last May, I told you that what I was asking for at that time 
was really just the first fiscal step in our efforts to align both the 
organization for and the conduct of America's foreign relations with 
the dictates and demands of the modern world.
    And I told you that as Secretary of State, I really wear two hats. 
By law, I am the principal foreign policy advisor to the President of 
the United States. But I am also the leader, the manager, the CEO of 
the Department of State, and I take that role and that charge very, 
very seriously. And to be successful in both roles, I have to make sure 
that the Department is properly organized, equipped and manned to 
conduct America's foreign policy, as well as formulate good foreign 
policy in the name of the President and the American people.
    And you heard my testimony as CEO and you responded, and we are 
grateful.
    Because of your understanding and generosity, we have made 
significant progress. We will make even more in fiscal year 2003.
    The President's discretionary request for the Department of State 
and Related Agencies for fiscal year 2003 International Affairs is $8.1 
billion. These dollars will allow us to:
  --Continue initiatives to recruit, hire, train, and deploy the right 
        work force. The budget request includes $100 million for the 
        next step in the hiring process we began last year. With these 
        dollars, we will be able to bring on board 399 more foreign 
        affairs professionals and be well on our way to repairing the 
        large gap created in our personnel structure and, thus, the 
        strain put on our people by almost a decade of too few hires, 
        an inability to train properly, and hundreds of unfilled 
        positions. By fiscal year 2004, we hope to have completed our 
        multi-year hiring effort with respect to overseas staffing--to 
        include establishing the training pool I described to you last 
        year that is so important if we are to allow our people to 
        complete the training we feel is needed for them to do their 
        jobs. Next March, I will be back up here briefing you on the 
        results of our domestic staffing review.
  --Continue to upgrade and enhance our worldwide security readiness--
        even more important in light of our success in disrupting and 
        damaging the al-Qaida terrorist network. The budget request 
        includes $553 million that builds on the funding provided from 
        the Emergency Response Fund for the increased hiring of 
        security agents and for counterterrorism programs.
  --Continue to upgrade the security of our overseas facilities. The 
        budget request includes over $1.3 billion to improve physical 
        security, correct serious deficiencies that still exist, and 
        provide for security-driven construction of new facilities at 
        high-risk posts around the world. Mr. Chairman, we are right-
        sizing, shaping up and bringing smarter management practices to 
        our overseas buildings program, as I told you we would do last 
        year. The first change we made was to put retired General Chuck 
        Williams in charge and give him assistant secretary equivalent 
        rank. Now, his Overseas Building Operations (OBO) has developed 
        the Department's first long-range plan, which projects our 
        major facility requirements over a five-year period.
      The OBO is using best practices from industry, new embassy 
        templates, and strong leadership to lower costs, increase 
        quality, and decrease construction time.
      As I told you last year, one of our goals is to reduce the 
        average cost to build an embassy. I believe we are well on the 
        way to doing that.
      And General Williams is making all of our facilities, overseas 
        and stateside, more secure. By the end of fiscal year 2002, 
        over two-thirds of our overseas posts should reach minimal 
        security standards, meaning secure doors, windows, and 
        perimeters.
      We are also making progress in efforts to provide new facilities 
        that are fully secure, with 13 major capital projects in design 
        or construction, another eight expected to begin this fiscal 
        year, and nine more in fiscal year 2003.
  --Continue our program to provide state-of-the-art information 
        technology to our people everywhere. Because of your support in 
        fiscal year 2002, we are well on the way to doing this. We have 
        an aggressive deployment schedule for our unclassified system 
        which will provide desktop Internet access to over 30,000 State 
        users worldwide in fiscal year 2003 using fiscal year 2002 
        funds. And we are deploying our classified connectivity program 
        over the next two years. We have included $177 million in the 
        Capital Investment Fund for IT requirements. Combined with $86 
        million in estimated Expedited Passport Fees, a total of $263 
        million will be available for our information technology and 
        communications systems initiatives. Our goal is to put the 
        Internet in the service of diplomacy and we are well on the way 
        to accomplishing it.
  --Continue to meet our obligations to international organizations--
        also important as we pursue the war on terrorism to its end. 
        The budget request includes $891.4 million to fund U.S. 
        assessments to 43 international organizations, active 
        membership of which furthers U.S. economic, political, 
        security, social, and cultural interests.
  --Continue to meet our obligations to international peacekeeping 
        activities. The budget request includes $726 million to pay our 
        projected United Nations peacekeeping assessments--all the more 
        important as we seek to avoid increasing even further our U.N. 
        arrearages. And, Mr. Chairman, I ask for your help in getting 
        the cap on our assessments lifted so that we can eventually 
        eliminate all our arrearages. These peacekeeping activities 
        allow us to leverage our political, military, and financial 
        assets through the authority of the United Nations Security 
        Council and the participation of other countries in providing 
        funds and peacekeepers for conflicts worldwide.
  --Continue and also enhance an aggressive effort to eliminate support 
        for terrorists and thus deny them safe haven through our 
        ongoing public diplomacy activities, our educational and 
        cultural exchange programs, and international broadcasting. The 
        budget request includes $287 million for public diplomacy, 
        including information and cultural programs carried out by 
        overseas missions and supported by public diplomacy personnel 
        in our regional and functional bureaus. These resources help to 
        educate the international public on the war against terrorism 
        and America's commitment to peace and prosperity for all 
        nations. The budget request also includes $247 million for 
        educational and cultural exchange programs that build mutual 
        understanding and develop friendly relations between America 
        and the peoples of the world. These activities help build the 
        trust, confidence, and international cooperation necessary to 
        sustain and advance the full range of our interests. Such 
        activities have gained a new sense of urgency and importance 
        since the brutal attacks of September. We need to teach more 
        about America to the world. We need to show people who we are 
        and what we stand for, and these programs do just that. 
        Moreover, the budget request includes almost $518 million for 
        International Broadcasting, of which $60 million is for the war 
        on terrorism to continue increased media broadcasts to 
        Afghanistan and the surrounding countries and throughout the 
        Middle East. These international broadcasts help inform local 
        public opinion about the true nature of al-Qaida and the 
        purposes of the war on terrorism, building support for the 
        coalition's global campaign.
    Mr. Chairman, on the subject of public diplomacy let me expand my 
remarks.
    The terrorist attacks of September 11 underscored the urgency of 
implementing an effective public diplomacy campaign. Those who abet 
terror by spreading distortion and hate and inciting others, take full 
advantage of the global news cycle. We must also use that cycle. Since 
September 11, there have been over 2,000 media appearances by State 
Department officials. Our continuous presence in Arabic and regional 
media by officials with language and media skills, has been 
unprecedented. Our international information website on terror is now 
online in seven languages. Internet search engines show it is the 
hottest page on the topic. Our 25-page color publication, ``The Network 
of Terrorism'', is now available in 30 languages with many different 
adaptations, including a full insert in the Arabic edition of Newsweek. 
``Right content, right format, right audience, right now'' describes 
our strategic aim in seeing that U.S. policies are explained and placed 
in the proper context in the minds of foreign audiences.
    I also serve, ex officio, as a member of the Broadcasting Board of 
Governors, the agency that oversees the efforts of Voice of America and 
Radio Free Europe/Radio Liberty to broadcast our message into South 
Central Asia and the Middle East. With the support of the Congress, our 
broadcasting has increased dramatically since September 11. We have 
almost doubled the number of broadcast hours to areas that have been 
the breeding grounds of terrorists. The dollars we have requested for 
international broadcasting will help sustain these key efforts through 
the next fiscal year.
    Mr. Chairman, we are working closely right now with OMB to examine 
our overall requirements. We believe that there are valid fiscal year 
2002 needs that cannot wait until fiscal year 2003. The Administration 
will bring the specific details of this supplemental request to the 
Congress in the near future. We have not quite finished our review at 
this point, but it should not take much longer.
    Mr. Chairman, all of these State Department and Related Agencies 
programs and initiatives are critical to the conduct of America's 
foreign policy. Some of you know my feelings about the importance to 
the success of any enterprise of having the right people in the right 
places. If I had to put one of these priorities at the pinnacle of our 
management efforts, it would be our hiring efforts. We must sustain the 
strong recruiting program we began last year--with your support and the 
support of the Congress as a whole.
    Last year, in new hires for the Foreign Service, we made great 
strides. We doubled the number of candidates for the Foreign Service 
Written Examination--and this year we will give the exam twice instead 
of just once. Moreover, our new recruits better reflect the diversity 
of our country with nearly 17 percent of those who passed last 
September's written exam being members of minority groups. For example, 
we tripled the number of African-Americans and doubled the number of 
Latino-Americans.
    We have also improved Civil Service recruitment by creating new 
web-based recruiting tools and by vigorously asserting the truth. The 
truth, Mr. Chairman, that we are a team at State and that the Foreign 
Service and the Civil Service are each very important team members. 
Both are vital to our mission. And now both know it.
    Another improvement is that once we identify the best people we 
bring them on more quickly--a great boon to hiring the best. For 
Foreign Service recruits, for instance, we have reduced the time from 
written exam to entry into service from 27 months to less than a year. 
We are going to reduce it even further.
    We are also working with OMB to create extensive new performance 
measures to ensure that the people we hire remain the best throughout 
their careers.
    Mr. Chairman, all of these activities have improved morale at the 
State Department. Our people see things happening, things that enhance 
their quality of life, their security, their ability to do their jobs. 
Things like our interim childcare center at the National Foreign 
Affairs Training Center. It opened on September 4 and can handle a full 
complement of 30 infants and toddlers.
    This idea of teamwork, this idea of family and the quality of life 
that must always nourish it even in the remotest station, is uppermost 
in our minds at the Department. While we concentrate on the nation's 
foreign affairs we must also focus on taking care of those Americans 
who conduct it, as well as the many thousands of Foreign Service 
Nationals who help us across the globe.
    These are an extraordinary group of people, Mr. Chairman. For 
example, our sixty Afghan employees in Kabul worked diligently to 
maintain and protect our facilities throughout the 13 years the Embassy 
was closed. They worked at considerable personal risk and often went 
months without getting paid. They even repaired the chancery roof when 
it was damaged by a rocket attack. This is the sort of diligence and 
loyalty that is typical of our outstanding Foreign Service Nationals.
    Our whole team at State is vital to mission accomplishment--Foreign 
Service, Civil Service, and Foreign Service Nationals. The dollars you 
helped to provide us last year allowed us to make our team more 
cohesive and more effective. We want to continue that process.
    Mr. Chairman, one message that the tragic events of September 11th 
and the days that followed have made very clear is that American 
leadership in international affairs is critical. Out on the front lines 
of diplomacy, we want a first-class offense for America. As a soldier, 
I can tell you that quality people with high morale, combined with 
superb training and adequate resources, are the key to a first-class 
offense.
    So as the State Department's CEO, let me thank you again for what 
you have done to help us create such a first-class offense--and I want 
to ask you to continue your excellent support so we can finish the job 
of bringing the Department of State and the conduct of America's 
foreign policy into the 21st century. I ask for your important support 
in full committee and in the Senate as a whole, both for the $8.1 
billion we are requesting for the Department and related agencies and 
for the $16.1 billion we are requesting for foreign operations. In 
addition, I ask for your help with whatever supplemental request we 
present in the near future. With your help, and the help of the whole 
Congress, we will continue the progress we have already begun.
    Thank you and I will be pleased to take your questions.

    Senator Hollings. Go ahead. You are on.
    Secretary Powell. Well, thank you for that very effusive 
and long introduction. It is a great pleasure----
    Senator Hollings. Yes, siree.

                 OPENING STATEMENT OF SECRETARY POWELL

    Secretary Powell. This is my seventh hearing in the course 
of hearings this year, and I appreciate the opportunity to get 
right into it.
    Mr. Chairman, it is a pleasure to once again be before the 
committee, and thank you for accepting my testimony in its 
fullness and making it a part of the record. I would like to 
give an abbreviated statement and then get right to your 
questions.
    As many of you will recall, at my first budget testimony to 
this committee last May, I told you that what I was asking for 
at that time was really just the first fiscal step in our 
efforts to align the organization for the conduct of America's 
foreign policy, with the dictates and the demands of the modern 
world and that there were more fiscal steps to come.
    I told you that, as Secretary of State, I really wear two 
hats. By law, I am the principal foreign policy advisor to the 
President of the United States, but I am also the leader, the 
manager, the CEO of the Department of State, and I take that 
role and that charge very, very seriously. To be successful in 
both roles, I have to make sure that the Department is properly 
organized, equipped, and manned to conduct America's foreign 
policy, as well as to formulate good foreign policy in the name 
of the President and in the name of the American people.
    You heard my testimony last May, and you responded, and we 
are grateful. Because of your understanding and the generosity 
of the Congress, we have made significant progress, and now I 
am here to tell you about the second fiscal step, so we can 
continue to make progress in fiscal year 2003.
    The President's discretionary request for the Department of 
State and related agencies for fiscal year 2003 is $8.1 
billion. These dollars will allow us to continue initiatives to 
recruit, hire, train and deploy the right workforce.
    The budget request includes $100 million for the next step 
in the hiring process we began last year. With these dollars, 
we will be able to bring on board into the Department 399 more 
foreign affairs professionals, as well as other technical 
experts, and be well on our way to repairing a large gap in our 
personnel structure. This gap has put enormous strain on our 
people as they have had to deal with a decade of too few hires, 
an inability to train properly, and hundreds of unfilled 
positions.
    By fiscal year 2004, we hope to have completed our multi-
year effort with respect to overseas staffing to include 
establishing the training pool I described to you last year. 
The training pool is important so we have some flexibility in 
the system to send people to school without keeping them out of 
jobs they need to be doing, a ``schools account,'' so to speak, 
and next March, I will be back up here briefing you on the 
results of our domestic staffing review.
    In addition to getting more people on board, we will 
continue to upgrade and enhance our worldwide security 
readiness, even more important in light of our success in 
disrupting and damaging the al Qaeda terrorist network. The 
budget request includes $553 million for worldwide security 
upgrades. It builds on the funding provided from the emergency 
response fund for the increased hiring of security agents and 
for counterterrorism programs.
    We will also continue to upgrade the security of our 
overseas facilities. The budget request includes over $1.3 
billion to improve physical security, correct serious 
deficiencies that still exist, and provide for security-driven 
construction of new facilities at high-risk posts around the 
world.
    Mr. Chairman, we are right-sizing, shaping up, and bringing 
smarter management practices to our overseas building program, 
as I told you we would do last year. The first change we made, 
as you well know, sir, and members of the committee, was to put 
retired Major General Chuck Williams in charge and give him 
Assistant Secretary-equivalent rank and a more direct reporting 
chain up to the top. Now his Office of Overseas Building 
Operations has developed the Department's first long-range 
master plan, which projects our major facility requirements 
over a 5-year period.
    Mr. Chairman, I know that General Williams briefed you in 
mid-February. He told you how the OBO is using best practices 
from industry, new Embassy templates, and strong leadership to 
lower costs, increase quality, and decrease construction time. 
Those are not just words. We are actually seeing results 
against those standards.
    As I told you last year, one of our goals is to reduce the 
average cost to build an Embassy, and I believe we are well on 
our way to doing that.
    General Williams is making all of our facilities overseas 
more secure. By the end of fiscal year 2002, over two-thirds of 
our overseas posts should reach minimal security standards, 
meaning secure doors, windows, and perimeters. We are also 
making progress in efforts to provide new facilities that are 
fully secure, with 13 major capital projects in design or 
construction, another 8 expected to begin this fiscal year, and 
9 more in fiscal year 2003.
    With this budget, Mr. Chairman, we will also be able to 
continue our program to provide state-of-the-art information 
technology to our people everywhere. Because of your support in 
2002, we are well on our way to doing this. We have an 
aggressive deployment schedule for our unclassified system 
which will provide desktop Internet access to over 30,000 State 
users worldwide in fiscal year 2003, using fiscal year 2002 
funds. I am determined to see this happen. I am determined to 
use the power of the Information Technology Revolution to serve 
America's foreign policy interests.
    When President Bush gave his State of the Union address a 
few weeks ago, as the last word was coming out of the 
President's mouth, it was being translated into six different 
languages, being broadcast around the world, and being 
downloaded over the Internet at all of our Embassies. Thirty 
minutes after completion of the speech, transcripts of the 
speech in seven different languages were being downloaded over 
the Internet at our Embassies all around the world.
    It is that speed, that agility, that quickness of response, 
that we have to get throughout the Department, not just in 
delivering speeches, but in communicating with each other, 
connecting with one another, responding to the 24-hour-a-day 
news cycle that we now have, and making sure that we are on the 
cutting edge of diplomacy. We are the front line, the offensive 
line, of our foreign policy efforts around the world.
    We have included $177 million in the Capital Investment 
Fund for IT requirements. Combined with the $86 million in 
estimated expedited passport fees, we will have a total of $263 
million for our IT initiatives. Our goal, as I said, is to put 
the Internet fully in the service of diplomacy.
    Mr. Chairman, we want to continue to meet our obligations 
to international organizations--also more important as we 
pursue the war on terrorism to its end. We are very proud of 
the work that has been done by our coalition partners in this 
campaign against terrorism. You saw it yesterday, when the 
President was speaking to all of those Ambassadors on stage 
representing the coalition, and the three Ambassadors who spoke 
so movingly of how they were with us in this campaign.
    We have to be with them as well in the international 
activities that we have committed ourselves to. So the budget 
request includes $891 million to fund U.S. assessments to 43 
international organizations. Our active membership in these 
organizations furthers U.S. economic, political, security, 
social, and cultural interests. We also want to continue to 
meet our obligations to international peacekeeping activities.
    The budget request includes $726 million to pay our 
projected United Nations peacekeeping assessments--all the more 
important as we seek to avoid increasing even further our U.N. 
arrearages. Mr. Chairman, I ask for your help in lifting the 
cap on our peacekeeping assessments so that we can eventually 
eliminate all of our arrearages and not let them continue to 
build up. These peacekeeping activities allow us to leverage 
our political, military, and financial assets through the 
authority of the United Nations Security Council and the 
participation of other countries in providing funds and 
peacekeepers for conflicts worldwide.
    We will also continue and enhance an aggressive effort to 
eliminate support for terrorists and thus deny them safe haven 
through our ongoing public diplomacy efforts, our educational 
and cultural exchange programs and through international 
broadcasting. The budget request includes $287 million for 
public diplomacy, including information and cultural programs 
carried out by our overseas missions and supported by public 
diplomacy personnel in our regional and functional bureaus.
    These resources help to educate the international public on 
the war on terrorism and America's commitment to peace and 
prosperity for all nations. As we have seen in recent weeks and 
months, Mr. Chairman, we have not been doing a good enough job 
in taking our case to the people of the world, and we are going 
to do a better job. Our new Under Secretary for Public 
Diplomacy, Charlotte Beers, comes with great experience from 
the civilian world in marketing, getting a message out, and 
moving a product out. We have got a great message. We have got 
a great product, the humanitarian values upon which this Nation 
is founded. We have got to do a better job of reaching out.
    The budget request also includes $247 million for 
educational and cultural exchanges, where we take people from 
other lands, bring them here, let them go to our schools, and 
let them participate in activities with our families and with 
our communities. Then they return home and take those values 
back with them. It is a long-term investment in a better 
future.
    These activities help build the trust, confidence, and 
international cooperation necessary to sustain and advance the 
full range of our interests. Such activities have gained a new 
sense of urgency and importance since the brutal attacks of 
September 11th. We need to teach more about America to the 
world. We need to show people who we are and what we stand for, 
and these programs do just that.
    Moreover, the budget request includes almost $518 million 
for international broadcasting, of which $60 million is for the 
war on terrorism to continue increased media broadcasts to 
Afghanistan, the surrounding countries and throughout the 
Middle East. These international broadcasts help inform local 
public opinion about the true nature of al Qaeda and the 
purposes of the war on terrorism, building support for the 
coalition's global campaign.
    Let me just say a bit more about public diplomacy. These 
attacks underscore the urgency of implementing this public 
diplomacy campaign in the Middle East. Since September 11th, 
over 2,000 media appearances have taken place by State 
Department officials. Our continuous presence in Arabic and 
regional media is necessary, and we are determined to do more 
of it.
    We are looking for unusual ways of getting our word out. My 
staff said to me, ``Well, why do you not go on MTV and speak to 
the MTV audience, 17 to 25 years of age all around the world, 
33 different MTV channels that touch something like 146 
countries?'' And so I did it, and they gave me an hour to go on 
and talk to young people assembled in six different locations 
around the world, as well as in the studio.
    I was here in Washington and went for 60 minutes, and it 
was going well, so they did it for 90 minutes--90 straight, 
uninterrupted minutes talking to 346 million households in 146 
countries through 33 MTV stations, and we talked about 
everything. Kids are not like adults. They will ask you what is 
on their minds. They will call it out. They will take you to 
account, and they do not want to hear ``snowy'' answers. It is 
the kind of exposure our officials should be doing more and 
more of.
    Now I happened to make news in an area that I had not 
intended to make news. Be that as it may.
    Senator Hollings. You have been explaining it to the adults 
back here ever since, I think.
    Secretary Powell. But, nevertheless, as you know, I do not 
step back 1 inch from what I said because it was the right 
thing for those young people to hear around the world. But they 
also heard about the American value system. They also heard why 
we are not the Satan of the world; we are the protector of the 
world. They also heard that America, over the last 10 years, 
has rescued Muslims in Kuwait, rescued Muslims in Kosovo, and 
rescued Muslims in Afghanistan. We go to no nation to take 
land. We go to no nation to oppress people, and that is a 
message they need to hear as well.
    So it is those kinds of opportunities we are seeking in the 
Department that take us out of the old tried and true methods 
into new methods and new ways of communicating, without 
abandoning the tried and the true.
    The budget requests I have just outlined for you deals with 
our overall requirements for fiscal year 2003. There are also 
some valid requirements that we have in fiscal year 2002 that 
cannot wait for fiscal year 2003. And so as you might well 
imagine, we are working with OMB on a supplemental request that 
will be coming to the Congress in due course, and the specific 
details are not yet available.
    Mr. Chairman, all of these State Department and related 
agency programs and initiatives are critical to the conduct of 
America's foreign policy. Some of you know my feelings about 
the importance of putting the right people in the right place 
at the right time, and that remains my number one objective 
with respect to the management of the Department--bring new 
people in.
    We had a two-fold increase, 100-percent increase, in the 
number of people applying for the Foreign Service exam last 
September, three times as many minorities as ever before. We 
will bring in more minorities in this next tranche of 
youngsters coming into the Department than ever before, and we 
are going to keep doing that until we have a State Department 
that is fully staffed with people who are well motivated, 
morale is high, and a State Department which looks like all of 
America. That is our greatest strength, that of diversity, and 
I want that diversity to be reflected throughout the State 
Department, so we can be an example to the rest of the world.
    Mr. Chairman, I want to close by thanking you and the 
members of the committee and, frankly, the entire Congress, for 
the support that you have provided to me and to the Department 
during my first year of service as Secretary of State. I hope 
that we will continue to enjoy your strong support, and I hope 
that you will continue to reward our stewardship of the 
Department. Stewardship means a lot to us. We want to take care 
of the people entrusted to our care, make sure we are 
accomplishing what the American people want us to accomplish, 
and make sure that we are good stewards of the resources 
provided to us by the American people through their Congress.
    Thank you, Mr. Chairman.

                               PERSONNEL

    Senator Hollings. Thank you, Mr. Secretary. The committee 
thanks you for your stewardship. There is no question that the 
morale is up in the Department of State. I just recently 
traveled with the intelligence group to Brussels, Berlin, 
Leipzig, Prague, Budapest, Vienna, London, and otherwise. I 
credit you with the morale that has improved materially in the 
Department of State, and I say that advisedly because I have 
been doing this job now 35 years.
    Otherwise, on talking about personnel, you gave us a good 
man on property. Who handles the personnel?
    Secretary Powell. We have a number of people. The person 
directly in charge of personnel----
    Senator Hollings. Can you not give me a General Williams 
that I can talk to?
    Secretary Powell. Yes, Ruth Davis is the Director General 
of the Foreign Service and our Director of Human Resources. She 
is a Career Ambassador of the Foreign Service, and she has day-
to-day management responsibility for our personnel system. You 
can also speak to the Under Secretary of Management, Mr. Grant 
Green, who works with Ambassador Davis, but if you ever have a 
personnel question, please feel free to come directly to me or 
to Deputy Secretary Armitage because we are the top personnel 
managers of the Department. There is not a day that goes by we 
do not talk about people.
    Senator Hollings. The question is then, you know, we 
supported the 749 additional positions last year. I want to 
support the request for 631 this year. On the other hand, 
checking there in Germany, we have 590 State Department 
personnel in Germany. That is a lot of people.
    Secretary Powell. We have a lot of people----
    Senator Hollings. And----
    Secretary Powell. Yes, sir?
    Senator Hollings. And 390 down in Mexico, 374 in Japan, 381 
in Vietnam, and I know Saigon or Ho Chi Minh City well, and up 
at Hanoi, I have been there, but what are we going to do with 
almost 400 people in Vietnam? I mean, they have not gotten back 
yet? We did not leave them there, did we?
    Secretary Powell. No, these are new hires. They brought me 
home some years ago.
    Senator Hollings. Yes, sir.
    Secretary Powell. We are constantly reviewing the overseas 
presence of each one of our missions. In some of our missions, 
our more complicated missions, such as Germany, and France, and 
the United Kingdom, we have a variety of programs that have to 
be managed and supervised and a lot of new activities taking 
place: FBI activities, legal assistance activities, and a lot 
of economic consular activities that might not have been there 
in the past. So these have all grown.
    Senator Hollings. I know you are the landlord for all of 
those, but we are talking just about State Department 
personnel.
    Secretary Powell. Well, there has also been an increase in 
the security requirements in a lot of these places.
    Senator Hollings. Right.
    Secretary Powell. But with any one of them, I would be more 
than pleased to sit with you or members of your staff, Mr. 
Chairman, and justify them, and if I cannot justify them, let 
us cut them.

                   VICTIMS OF TERRORISM COMPENSATION

    Senator Hollings. Looking over the personnel, an item came 
to our attention last year with a case with respect to the 
Iranian hostages and working with the Department of State on 
the House side we said, in language in the bill itself, that 
what we needed was a comprehensive and equitable solution that 
would provide an appropriate level of compensation for all U.S. 
victims of terrorism. We have got to look out for our people. 
We were thinking about not only Nairobi, and Dar es Salaam, the 
U.S.S. Cole, but specifically sort of the beginning of it, in a 
sense, in a way the most egregious in this Senator's opinion, 
was in Tehran, the 444 days there. The court was ready to act, 
and we were ready to act, but then we said let us get a 
comprehensive plan submitted by the Department of State in this 
budget request, and we do not have it.
    What are your comments?
    Secretary Powell. We have developed a comprehensive plan 
for victims of terrorism, and we submitted our plan to OMB and 
to the White House, but they have not completed their review of 
the plan in time for submission with the budget. But, yes, we 
took your guidance and direction very much to heart, and a plan 
has been prepared. I am sure that as soon as OMB has completed 
its review of it, it will be forwarded to the Congress. Whether 
it will be in time for action on this bill or in this session, 
I do not know, but I will certainly try to find out.
    Senator Hollings. That is good, and I do appreciate the 
fact that you recognize that bill language because I think the 
lawyer, maybe it was not for the Department of State, the 
Attorney General's office said, ``Well, that was only report 
language that we put in, and that was not law, and therefore it 
ought to be ignored,'' but it is not your position that it be 
ignored.
    Secretary Powell. I always follow the law and listen to 
report guidance.
    Senator Hollings. With respect to--yes, sir?
    Senator Gregg. That is one of those ``snowy'' answers.
    Secretary Powell. But accurate.
    [The information follows:]

    As Secretary Powell indicated at the hearing on March 12, 
the State Department responded immediately to the provision in 
the Fiscal Year 2002 Commerce, Justice, State Appropriations 
Act, and crafted draft legislation establishing a comprehensive 
federal program to compensate U.S. victims of international 
terrorism. This draft legislation was submitted in December, 
2001 to the Office of Management and Budget for inter-agency 
review and clearance. Departmental representatives have had 
several discussions with OMB and the White House concerning the 
proposal. We are hopeful that the inter-agency review will be 
completed shortly, and that the Administration will submit a 
legislative proposal to the Congress this session.

                         FACILITY IN MADAGASCAR

    Senator Hollings. With respect to facilities, let me 
mention Madagascar. Just write it down there because I have got 
a good source that they have had discord, some violence, and 
the facility that we have in the capital of Antananarivo is not 
secure, and it ought to be double-checked. I mentioned it to 
General Williams, but you sent him out of town this morning.
    Secretary Powell. We keep him on the road, sir.
    Senator Hollings. Yes, I was looking forward to seeing him, 
though, and see if he had an answer on it, but you can find out 
for the committee.
    Secretary Powell. Yes.
    [The information follows:]

    Secretary Powell has asked me to respond further to your 
inquiry made during the March 12, 2002 hearing regarding 
security at our embassy in Antananarivo, Madagascar. We 
appreciate the opportunity to provide updated information on 
the Department's $600,000 effort to enhance security at Embassy 
Antananarivo, Madagascar.
    Our chancery in Antananarivo is overcrowded but habitable. 
Like many of our existing embassies, it lacks proper security 
setback and is located on a busy and crowded downtown street. 
In light of recent developments, the Department has moved the 
planned design and construction of a New Office Building from 
fiscal year 2007 to fiscal year 2006. In the interim, the 
Department continues to provide substantial security upgrades 
to support our facilities in Antananarivo.
    After the embassy bombings in East Africa in 1998, many 
security enhancements were made to Embassy Antananarivo and 
continue today. Immediately after the bombings, $290,000 was 
made available for forced entry/ballistic resistant (FE/BR) 
doors; shatter resistant window film (SRWF); jersey barriers; 
anti-ram drop arm vehicle barriers; and related shipping and 
installation costs. Since then, an additional $305,000 was 
provided to purchase and install three hydraulic anti-ram 
vehicle barriers and three FE/BR-rated guard booths to replace 
the non-rated locally constructed units.
    Within our resource constraints, the Department continues 
to be vigilant in providing safe and secure facilities for our 
overseas employees. Using our business case approach, we 
continue to pursue ways to not only cut costs, but also to 
expedite the improved security posture of our embassies.

                          EMBASSY CONSTRUCTION

    Senator Hollings. In construction, we have a list of 
several facilities that really go up, up and away as to the 
cost. For example, down in Panama City, we were looking at that 
carefully, and we had a list that in Panama City, for example, 
$145 million. I know you, Mr. Secretary, and I know me, that is 
expensive. You know, Kazakhstan, I do not want to make the 
smart remark that I thought you could buy these places for that 
much, much less just build a building, but Kazakhstan, $92 
million.
    Look at those and have General Williams look. I do not know 
how you would spend $145 million in Panama City.
    Secretary Powell. General Williams is looking at all of 
these, and his report to me was that he thinks in our first 
year he has been able to reduce the overall cost of these 
facilities by some 20 percent. He is taking a particular look 
at some of the very, very expensive ones that we found when we 
came in last year, such as in Beijing, and he has been able to 
reduce the cost.
    One of the problems with our facilities is that they are 
done to rather high standards. You just do not go into 
Kazakhstan and throw up a cinder-block building. In many cases, 
our facilities are done with equipment, materials, and workers 
that are brought in from the United States; the security 
requirements drive the cost as well. And so it is not quite the 
same as just building an average office building in those 
cities. They are rather unique facilities, and that drives the 
cost considerably.
    Senator Hollings. You know, you have personnel in trailers 
in Kiev and several other places around, that has to be looked 
at because we want to look out, as you do, for your personnel, 
and why have the State Department personnel in trailers and 
then down in Panama, $145 million buildings, that kind of 
thing. We are looking at that very closely.

                          BERLIN EMBASSY SITE

    With respect to the Berlin situation, right there in the 
city next to the Brandenburg Gate, it is only a 3-acre 
proposition, and there are streets on three sides, but it is 
right next to an apartment building, the wall there. Of course, 
General Williams said he can make the wall as secure as he can 
make it, but is that secure enough where somebody cannot just 
``rent'' terrorists and come into the apartment building that 
confronts it and just blow up our wall too? I mean, if that is 
the case, what I am getting at is then why the 100-foot setback 
requirement of security? See what I am saying?
    Secretary Powell. Yes, sir. I am very familiar with the 
Berlin site. I have been there myself and have seen it and 
looked at it. I have spent a lot of time looking at the maps, 
looking at aerial photographs, and I recognize that there is 
some additional danger associated with that condominium next 
door, but I believe we have minimized that danger. It is 
perhaps the safest square anywhere in Christendom, when you 
consider that the United States Embassy, the British Embassy, 
the French Embassy, the Russian Embassy, and the head of the 
German Government are all located right there.
    I thought the symbolic, absolute symbolic necessity of the 
United States being in the heart of Berlin, in the heart of 
Germany, with our friends and allies and with the German 
Government, was so important that we could deal with whatever 
additional, slight additional, threat that might be presented 
by the location of the condominium.
    After General Williams went and made an in-depth analysis 
of it as well, I felt rather comfortable in approving it and 
making some waivers. The German Government and the Berlin 
police authorities have been especially forthcoming in requests 
we have made to them with respect to the routing of traffic.

                        MUSLIM CENTER IN VIENNA

    Senator Hollings. I want to limit myself, and we are not 
going to use the clock. I appreciate the wonderful attendance 
we have here this morning. There is one other thing, Secretary 
Powell, I wish you would look at. When I was in Vienna talking 
to the Chancellor, they have an ongoing relationship with the 
Muslim world, in the sense that they have got a Muslim-
Christian center. He talks to the Ayatollah Khomeini once a 
week at least and more.
    I have the feeling terrorist martyrs are being created 
faster than I can get rid of them, and we cannot invade every 
land. That goes to the peacekeeping thing. We had 13, and now 
we are adding Georgia, and Afghanistan, and we are adding the 
Philippines, and we are adding Yemen, and we cannot just use a 
military response. We have to get, as you indicated in your 
statement, a better relationship and understanding of the 
United States.
    The East-West Center in Hawaii has worked extremely well, 
the North-South Center in Miami has worked extremely well. Look 
into that and let us see if we cannot put some money there and 
get a sort of civilian-type or State Department, diplomatic-
type endeavor like an East-West Center for the Muslim world 
there in Vienna.
    We have got one that is ongoing, and he was pretty proud of 
it and indicated that we ought to give it greater support. It 
sounded good to me, and I would like to have your comment.
    Secretary Powell. I will take a look at it, Mr. Chairman.
    Senator Hollings. Thank you very much.
    [The information follows:]

    I am writing to follow up on your proposal at the March 12 
hearing to consider supporting a center for the Muslim world in 
Vienna, along the lines of the East-West Center in Hawaii, to 
deal with Muslim cultural issues and to foster a better 
relationship and understanding of the United States. The East-
West Center is a highly respected institution, and we have been 
pleased to work with them for over forty years in the effort to 
build stronger ties and cooperation between the United States 
and the Asia-Pacific region.
    We appreciate your interest in expanded educational and 
cultural exchanges with the Muslim world. The Department of 
State's Bureau of Educational and Cultural Affairs has a wide 
range of existing programs to engage Muslim audiences in all 
world regions. Since last fall, we have increased the number of 
Fulbright scholarships, professional exchanges, and cultural 
programs with the region. We are also developing thematic 
initiatives involving media, young people, Afghan women, and 
other critical groups.
    We believe that the most effective approach to reaching the 
Muslim world is to build on the proven successes of Fulbright 
and other Bureau exchanges, while at the same time refining our 
methods to reach broader, deeper, and more diverse audiences. 
We plan to implement most of our programs through grant awards 
to qualified U.S. non-profit organizations, in order to 
maximize the involvement of the American exchanges community, 
which is strongly committed to improving our relations with the 
region. These programs will primarily take place either in the 
United States or in the countries of the Muslim world, and will 
provide a ``total immersion'' experience that maximizes 
learning about the other culture.
    While we applaud the initiative of the Austrian Chancellor 
in developing a Muslim-Christian Center, we believe that U.S. 
interests can best be served by supporting a range of American 
institutions to carry out specific exchange activities, 
allowing us the flexibility to work with those best suited to 
conduct particular projects.
    We would be pleased to discuss further our educational and 
cultural programs for the Muslim world or to provide additional 
information. Thank you again for your support for these 
important activities.

                      WINNING THE WAR ON TERRORISM

    Senator Gregg.
    Senator Gregg. Thank you, Mr. Chairman. We appreciate your 
being here, Mr. Secretary, and I want to begin by 
congratulating you for the extraordinary job you and the 
administration are doing in building the coalition to fight 
terrorism.
    I had the opportunity to participate in yesterday's 
ceremony, and it was extremely impressive, to say the least. It 
looked like there were over 100 members of the foreign 
delegation there supporting our coalition and expressing a 
commitment to fighting on behalf of civilization against forces 
which essentially want to bring down civilization. So I 
congratulate you for what I think is an exceptional job.
    I am interested both on a philosophical level and on a 
practical level. There has been some representation that 
catching bin Laden is the defining moment as to whether we win 
this effort or not. I am not sure that it is, but I am 
interested in hearing what you believe is the defining moment. 
How do we get our hands around a movement which appears to be 
based in a culture, and a religion, and a perversion of that 
religion, regrettably, for those who follow this terrorist 
movement? Where do you see the light at the end of the tunnel?
    Secretary Powell. With respect to al Qaeda, I think we have 
struck a very serious blow with what we did in Afghanistan. I 
mean, he cannot really function in Afghanistan any longer. Even 
though there are some al Qaeda members and Taliban members 
remaining in the country looking to make trouble, I think that 
it is a controllable, manageable situation.
    We have hit them in other places in the world, and more and 
more nations are making it inhospitable for al Qaeda or its 
cells to be located in those countries, to try to do financial 
transactions in those countries, or to avoid the police or 
avoid intelligence services in countries around the world.
    As Senator Hollings mentioned a few moments ago, in some 
countries, we have gone beyond that, and we are going to help 
them go after al Qaeda-oriented cells, such as in Yemen or in 
the Philippines or in Georgia. But in these instances, we are 
not planning to send U.S. troops in there to stay. What we are 
doing is using our military forces for something they are so 
good at, training others to do the job, so that the Georgians 
can deal with their threats, so that the Filipinos can deal 
with their threats, so the Yemenese can deal with their 
threats.
    I do not think a day will ever come when somebody can come 
up to you and say, ``Well, it is over. There is no longer a 
terrorist threat facing the United States or its friends and 
allies, and we have gotten rid of every last al Qaeda 
individual or cell in the world.'' They will keep trying. It is 
a false religion that they are practicing. They are hiding 
behind their religion, as you indicated, Senator Gregg.
    But I do think that we can reach a point where we can be 
less fearful of their ability to strike at us. We are doing a 
much better job than we had been doing in the past with respect 
to tearing up their networks, understanding how they operate, 
going after them through intelligence efforts, as well as 
through law-enforcement efforts, through counterintelligence 
efforts, through protecting our borders and through homeland 
security activities. Therefore, we are making it a lot harder 
for them to do their evil work, and by so doing, we are 
bringing more security to our society.
    So things are going to get better, but at the same time, 
there will continue to be dangers, dangers that I think we are 
up to the task of dealing with.

                TERRORIST TRAINING CAMPS IN AFGHANISTAN

    Senator Gregg. Do you have an estimate of how many people 
went through those terrorist training camps in Afghanistan?
    Secretary Powell. The number is in the thousands. I have 
seen a variety of estimates. I would say the numbers are in the 
tens of thousands. How many of them left those training camps 
and are card-carrying terrorists who are meaning us ill or how 
many of them went back into their societies and may be 
disgruntled, but are not participating in any activities that 
may be harmful to us? That is a question that I cannot answer, 
nor do I think anybody else can.

                       STATE AND INS COORDINATION

    Senator Gregg. In that area, to get specific, we have got 
an issue of people coming into our country, which we obviously 
want. We want to remain an open society, which allows people to 
visit us regularly, especially people who are coming here to 
learn.
    I am wondering what sort of progress you, in a joint effort 
with the INS, are making, number one, in getting your houses 
coordinated, and number two in the area of biometric 
identification for people applying for visas?
    Secretary Powell. We are working very closely with the INS, 
with Customs Service, with Governor Ridge and his efforts, and 
I think we are making considerable progress. We have a lot of 
work going on with the Canadians and the Mexicans because those 
were sources of easy access to the United States previously. We 
are going to do a better job of controlling our borders, and 
this will be a subject of President Bush's discussions with 
President Fox in Mexico next week.
    We are doing a better job rationalizing our databases so 
that when somebody first surfaces at an American Embassy or an 
American consulate office somewhere overseas and applies for a 
visa, that information comes back and is not just held in State 
Department channels. It goes everywhere to see whether anybody 
has information on this person.
    We tried a new technique during the Olympics in Salt Lake 
City that showed considerable promise that we are getting on 
top of this issue of how to make all of our databases talk to 
one another.
    With respect to biometrics, we are looking at that and 
seeing how best to integrate that into our passport system and 
into our other identification systems. One way we are going to 
be looking at it, frankly, is with some of the detainees we 
have. They are going to be ``biometricked.'' So, for any of 
those we are unable to hold, we will always be able to track 
these people in the future. If they ever try to get back into 
our country, we will know a great deal about them, and that 
should give us some experience with respect to the use of 
biometric measures and biometric identification techniques.

                        BIOMETRIC IDENTIFICATION

    Senator Gregg. Is it reasonable to ask that we have 
biometric identification for someone who is visiting our 
country as a student, a card or something, whether it is a 
fingerprint or retinal scan, and also to track where they are 
using that identification?
    Secretary Powell. I do not think it is unreasonable to ask 
people coming into the country to give us a reliable measure of 
their identification of who they are. I am not sure I am yet 
persuaded what the best way to do that is, whether it is with 
just fingerprints and photographs or whether it is a visual 
scan or other biometric techniques that are being looked at.
    It is much more difficult once they are in the country, and 
as you know, there are hundreds of thousands of people in the 
country that we can no longer track. Unless they surface 
somewhere and identify themselves either through a biometric 
measure or some other measure, they can just stay within the 
country and be very hard to find because we do not have the 
means to do it. It is essentially a local law enforcement 
problem and beyond the capacity of the INS to track everybody 
within the country.
    But these are the kinds of issues that Governor Ridge is 
working on under his homeland security charter, and I know that 
the Attorney General is hard at work at it as well because, at 
that point, it is not a State Department problem, but an INS 
and Homeland Security problem. How do we keep track of those 
people who have entered our country under acceptable, legal 
documentation, and how do we make sure that they do not 
overstay their welcome, and they do not overstay their 
documentation? How do we find them, how do we locate them, how 
do we deal with them, how do we get them out of the country, or 
how do we revalidate their entry documents? It is an issue of 
high priority for the administration.

                       PEACEKEEPING IN THE CONGO

    Senator Gregg. On the subject of the Congo peacekeeping 
mission, former Ambassador Holbrook laid out what we would 
require before the United States would support the peacekeeping 
mission to the Congo. I am wondering what the policy of the 
State Department is, whether the Holbrook understanding is 
still the position of the State Department.
    Secretary Powell. Which understanding are you referring to, 
sir?
    Senator Gregg. He basically set out a series of conditions 
for when we would support the Congo peacekeeping mission.
    Secretary Powell. Our principal participation is through 
financing, and as you know, the amount we are asking for has 
gone up considerably over the last couple of years because the 
U.N. peacekeeping force is actually now being deployed and 
growing in number. But we have no plans, at the moment, to 
deploy any U.S. troops into DROC peacekeeping activities.
    Senator Gregg. Do we have plans not to give them money 
unless it is being done pursuant to the policy which we 
outlined? My point here is that we were funding, in Sierra 
Leone, for a number of years a program which was facilitating 
the RUF, terrorists, through the United Nations. Now that has 
been adjusted, and there is progress being made in Sierra 
Leone. I do not want the same thing to happen in the Congo. I 
do not want to see us end up funding a mission which is not 
consistent with U.S. policy.
    Secretary Powell. I think you are quite correct, Senator, 
and you can be sure that the money that we will provide to the 
United Nations for this peacekeeping effort will be consistent 
with our policies. We are in touch with President Kabila and 
other individuals in the region, trying to get the peace 
process moving along. I have met with President Kabila on two 
occasions, and Secretary General Annan and I discuss the Congo 
on a regular basis. They understand that we are looking for 
progress that will protect human rights, and end illicit 
trading in people and commodities such as diamonds. So we 
remain committed to those kinds of principles as we provide the 
peacekeeping monies needed to put in place the force that will 
provide some hope for this country.
    Senator Gregg. I hope you will take a hard look at it 
because I think we are heading down the wrong road again.
    [The information follows:]

    Secretary Powell has asked me to follow up with you on his 
response to your question at the March 12 CJS Hearing about the 
U.N. Mission in the Democratic Republic of the Congo (MONUC). 
In your question, you asked if the Administration continues to 
follow the policy laid down by former U.N. Ambassador Holbrooke 
when the U.N. expanded its mission in the Congo in February 
2000.
    The conditions outlined at that time by former Ambassador 
Holbrooke for the successful deployment of MONUC generally have 
been met since early 2001: Combatants withdrew in the first 
half of 2001 to lines specified in the Kampala and Harare 
Disengagement Plans of April and December of 2000, 
respectively. A cease-fire has generally held since January of 
2001, and the signatories of the cease-fire agreement have 
permitted MONUC access to areas under their control.
    While recent fighting at Moliro and occasional obstruction 
of MONUC deployment by the Rally for Congolese Democracy's Goma 
faction have caused concern, we expect that all parties to the 
Lusaka Agreement will continue to respect its provisions. 
MONUC's continuation remains conditioned on their doing so.
    In your question you express concern that MONUC may stray 
from its original purposes outlined in its mandate, which the 
U.S. supported. We are working closely with the U.N. to make 
sure that MONUC carries out the tasks assigned to it by the 
Security Council, with the goal of bringing this terrible war 
to an end. We do not see MONUC as an open-ended commitment. Any 
decision to support changes in the mission's mandate or size 
will, of course, be notified to Congress.

                       OVERSEAS BUILDINGS PROGRAM

    Senator Gregg. I want to reinforce what the chairman said 
about buildings. I know we have all talked about this. This is 
an ongoing issue with this committee and I appreciate your 
bringing on General Williams who is doing such a good job 
there, but the fact is the price tag is not going down.
    I am interested in knowing whether there is not some 
structural change we need to make. In other words, do we have 
to use, for every building, the same standards of American 
labor, American parts, and American facilities. Or are there 
some places like Panama, for example, which is in this 
hemisphere, where we could possibly build it for less by not 
having the stricture of levels of conditions relative to 
construction that we have today.
    Secretary Powell. I am sure that that is the case, Senator, 
but I think we have tried to be faithful to the guidance we 
have received from the Congress and the work that was done by 
previous commissions that looked into Embassy security, Admiral 
Crowe's work, and Admiral Inman's work. We have to be sensitive 
to the very practical considerations that if we find a problem 
in one of our Embassies with respect to security, there will be 
a big investigation, and the questions will be: why did you 
allow local artisans or workers to do this when you knew it 
could be a compromising situation?
    So we are always trying to find the right balance between 
those things that we really have to do ourselves, with American 
contractors and equipment that are subject totally to our 
control, with perhaps a fence or other work arounds that can 
still permit work to be done at an Embassy very efficiently at 
the local level.
    I think General Williams understands that this has to be 
looked at with a very, very skeptical eye to try to get the 
costs down. The costs are significant. I cannot deny that fact, 
but I think that Chuck Williams has done a pretty good job of 
reducing the overall costs and continues to look for ways to do 
that; templating, using standard furnaces, and heaters, and 
standardizing windows and all of the other things that are used 
in civilian construction to try to minimize cost-growth 
escalation and get the overall costs down.

                  FIVE-YEAR EMBASSY CONSTRUCTION PLAN

    Senator Gregg. Thank you. I appreciate that answer.
    My last question in this area goes to you say you are going 
to have this 5-year Embassy construction plan. Are you going to 
build that around the model that you used at DOD, where you 
tied it to your money or is it going to be irrelevant?
    Secretary Powell. Well, that is not the way I did it in 
DOD, Senator.
    Senator Gregg. There was theoretically a cash-flow stream 
that it was tied to.
    Secretary Powell. I do not know all of the assumptions that 
General Williams has in it, but the guidance he has is to put 
together a plan that represents some sense of reality of what 
is likely to be the out-year funding stream. But to do what I 
think we need to do around the world, with our facilities, and 
to represent the American people well, to protect our people 
who are out there, to make sure that their quality of life and 
their quality of workplace are adequate, and to make sure they 
are secure, is going to take a significant amount of money for 
a fairly extended period of time.
    We have got a lot of work that needs to be done, as 
evidenced by the fact that we still see trailers, and we still 
see other things that are desperately in need of repair. It was 
a lot easier before the cold war ended, when we did not require 
the same kind of presence in all of the countries that we now 
require presence in, places such as Vietnam. So it is going to 
be a long-term proposition, but I know that General Williams is 
trying to do it in not just a completely ``blue sky'' fashion, 
where his work and the master plan bears no reality to the 
likely resources that will be available.
    Senator Gregg. This committee is very strongly committed to 
rebuilding the facilities and the technology capabilities of 
the Department, but we would like it to be in the context of 
a----
    Secretary Powell. I hope that in your review of the master 
plan, and it was done so that you could see what we are doing, 
but I hope that you will be critical of it, constructively and 
destructively, as the case might be. I need your help. I need 
your guidance. I need your sense of what the possible is, what 
the achievable is.
    Senator Gregg. Thank you.
    Thank you, Mr. Chairman.
    Senator Hollings. Thank you.
    My list shows Leahy, Campbell, Reed, Mikulski, Inouye, 
Domenici.
    Senator Leahy.

                          EMBASSY CONSTRUCTION

    Senator Leahy. Thank you very much, Mr. Chairman.
    To follow up on what my friend and neighbor from New 
Hampshire was saying on the construction of buildings, there 
are ways it could be done very well. I am very impressed with 
the Embassy we have in Ottawa. Here we were given a choice 
location, as the Canadians were on Pennsylvania Avenue, and we 
utilized it very well to build a modern building surrounded by 
architecturally beautiful, old, significantly historical 
buildings, used a lot of Canadian materials, sensitive to the 
wishes of the people, and came out with something very 
beautiful. When you compare that with the horrible, ugly, 
disgraceful, eyesore of our Embassy in London, for example, 
something that makes about as much sense as putting a garbage 
truck in the middle of a Rolls Royce parking lot, the one in 
Ottawa is very good.
    I am glad to see you here, Mr. Secretary, because you have 
been a voice of reason and balance in not only this 
administration, but each administration you have served in, and 
you are going to be before our Subcommittee on Foreign 
Operations, so I will not go into too much on that.

                             BUDGET ISSUES

    Just on some of the budgetary things, I think it is great 
you have selected Lorne Craner to head up the Bureau for 
Democracy, and Human Rights and Labor. I hope we can give them 
an adequate budget. That budget has been sort of ignored by 
administrations in both parties for 25 years. Even though there 
is a modest increase requested this year, we actually need 
more.

                             CURRENT EVENTS

    Colombia, I hope you are looking at very closely. We all 
want to help Colombia. We want to help President Pastrana 
before he leaves, but as we rush to expand our presence there, 
I hope we are extremely careful what we are doing so that we do 
not end up doing more harm than good and something that not 
only this administration, but subsequent administrations, will 
have to deal with.
    I know you are going to accompany the President to the 
United Nations Conference on Financing for Development to be 
held in Monterrey, Mexico, next week. I am glad you are going. 
I am glad the President is going. I am very disappointed that 
the administration continues to oppose the plan put forth by 
the British, after all, our closest ally on the war on 
terrorism, for industrialized countries to significantly 
increase spending on foreign aid.
    There is a huge shift, a bipartisan shift, in the Congress 
and a willingness to spend money on foreign aid, above and 
beyond what you are going to request for Afghanistan, and I 
hope the administration will make a request for more, as a 
nation as rich and powerful as we are, it is in our security's 
best interests to have democracies around the world. Certainly, 
it is also in our moral best interests to help eradicate 
disease and to do all of the things necessary.
    I am glad General Zinni is going back to the Middle East. 
Some would feel a pox on both the sides there, and of course we 
cannot do that. We need to do more to condemn and discourage 
the Palestinian suicide attacks which are targeted at innocent 
civilians and locations to cause death, but at the same time, 
we cannot ignore the Israelis using high-powered U.S. military 
equipment, including F-16s and Apache helicopters to strike at 
targets in densely populated civilian areas, and we end up 
getting blamed for that.

                          FOREIGN AID FUNDING

    Let me ask you on the funding for foreign aid. The 
President has said we will defeat the terrorists by destroying 
their networks wherever they are found. We will defeat the 
terrorists by building an enduring prosperity that promises 
more opportunity and better lives for all of the world's 
people. I completely agree with the President on that.
    I would also say that 41 Senators are now on record 
supporting an increase in foreign aid. That is more than at any 
time I can remember in my 27 years here.
    You recently testified that the idea of doubling foreign 
aid is not a bad idea, and you would like to triple it. When 
are we going to follow up? The rhetoric is all in the right 
place. We are going to add $48 billion for the Defense 
Department. I am sure they can use it, but foreign aid is also 
about national security. If we spend less than 1 percent of our 
budget to build democratic allies and promote market economies 
around the world, that is nowhere near enough. Can we not do 
better?
    Secretary Powell. Senator Leahy, I would like to do a lot 
better, and I have testified last year and this year that I am 
pleased the President was able to find increases in both years 
for our foreign assistance accounts. The need is much greater, 
and I hope that we will be seeing additional help in the 
supplemental request for fiscal year 2002. The President, I, 
and my other colleagues in the administration are already hard 
at work seeing how much better we can do for fiscal year 2004.
    I think this year, in light of the new demands that were 
placed on the budget by the recession that we are now coming 
out of, the fact that a surplus has turned into a deficit, the 
fact that the military needed a big infusion to deal with the 
campaign against terror, and the new demands placed on the 
budget by homeland security, I am pleased that we were able to 
get an increase. But would I like to see more? Yes. Will I be 
arguing for more? Yes.
    The specific number that our British colleagues had put 
down, a doubling of foreign aid as a percentage of GDP, was a 
bit more than we could sign on to. We are looking at other ways 
of doing it, whether it be by development assistance or grant 
aid or other techniques and methods that might be more 
appropriate.
    At the end of the day, what we really need in most of these 
countries is trade, even more so than aid, and I spend a lot of 
my time talking to them about what they have to do to change 
their societies, not just to draw more aid, but really to 
create conditions that draw trade.

           U.S. LONG-TERM COMMITMENT TO DEVELOPING COUNTRIES

    Senator Leahy. Of course, they have to do more, but there 
also has to be a long-term commitment on our part. I mean, 
trade by itself is not going to do away with river blindness 
and is not, by itself, going to help with the AIDS epidemic in 
Africa. It is not going to help in countries where our children 
cannot go to school, especially girls cannot. Boys might be 
able to if there are schools, but girls cannot. All of those 
things and microenterprise, which would take a relatively small 
amount--we sometimes can go very hard on the big-ticket item, 
but I look at the areas. I mean, one example we use I am very 
proud of the War Victims Fund, and I appreciate the fact that 
my Republican colleagues renamed it the Leahy War Victims Fund. 
That is something that touched me more than just about anything 
here. We spend money on that for land mine victims. I will not 
go into the issue of land mine banning, but one of the things I 
found in one place we went, my wife is a nurse, and she is 
helping to care for a little boy in one of these countries in 
one of the land mine victim hospitals, badly crippled. When 
they were bathing the little boy, she said, but there are no 
scars on him. No, it is from polio. In this case, they could 
not get the polio vaccine to the village because of the land 
mines around it, but there are whole areas where there is no 
vaccine.
    Now you are now a grandfather, as am I. Your grandchildren, 
when the pediatrician says, ``And this is the day you get your 
polio vaccine,'' of course, you just mark it down and do it. 
You take it for granted. When you and I were youngsters, 
swimming pools and everything else would close because it was 
polio season. We do not have to worry about that. This is 
something we could eradicate. Tuberculosis could be eradicated. 
A third of all of the tuberculosis cases we see here in this 
country come from abroad. We could eradicate that, but it is 
going to take a long-term and fairly expensive up-front 
commitment. The long-term aspects are great.
    I mention that, Mr. Secretary, and I know I preach to the 
converted, but it is going to take money, and it is going to 
take a lot more money than we have, and ultimately the amounts 
of money that we have to spend, and none of us begrudge the 
money we have to spend to defend against terrorism, maybe some 
of that would not be necessary if we did more at the front end.
    Secretary Powell. I totally agree with you, Senator, and I 
will continue to make that case within the administration. The 
President, I think, has been generous in the first two budget 
submissions, and I hope he will be able to do even more in the 
supplemental and in the next year's budget submission. I do 
also appreciate the fact that there seems to be a growing 
understanding within the Congress of the importance of this 
account, and I am very pleased that it is bipartisan and in 
both bodies.
    Senator Leahy. Senator McConnell and I have worked very 
hard, as you know, and worked together to do that in our 
Appropriations Subcommittee. I have asked a number of other 
questions that, as we have a vote coming up, I will submit for 
the record.

                         SITUATION IN COLOMBIA

    Secretary Powell. If I may say a word on Colombia. With the 
end of the safe havens, of course, the Colombians have come to 
us with new requests, increased intelligence sharing and other 
support we might be able to provide them. They are not asking 
for U.S. troops, nor do I see U.S. troops going to Colombia, 
but we do believe we should help this democracy that is being 
threatened by narco-traffickers and terrorists. Therefore, we 
will be sending up, in the not-too-distant future, language 
which would give us greater flexibility with respect to the 
kind of support we can provide, while at the same time being 
very, very mindful of human rights, particularly other 
legislation named for you dealing with human rights. We will 
not, in any way, do anything that would undercut our commitment 
to making sure that as we support Colombia, we hold them to the 
highest standards of human rights performance on the part of 
their military and their police forces.
    Senator Leahy. I have a lot of questions on that. The 
Colombians have talked to me at length about what they request. 
I have not heard anything from the administration about what 
they are hearing, and I know that you are all very busy, but if 
you can turn somebody loose to possibly, I have a listed 
telephone number.
    Secretary Powell. It is mostly intelligence, and as you 
know, we have a proposal on the pipeline security.
    Senator Leahy. I read in the paper, but some of this may 
end up coming before my committee, if somebody could take the 
time to see what the Colombians have and let me know what they 
think about it. I am always happy to hear from you.
    Secretary Powell. Thank you, sir.
    Senator Leahy. Thank you.
    Senator Inouye [presiding]. Senator Campbell.
    Senator Campbell. Thank you, Mr. Chairman.
    I understand we are going to vote in just a few minutes, so 
I would ask unanimous consent to put my complete statement in 
the record.
    Senator Hollings. Without objection.
    [The statement follows:]
         Prepared Statement of Senator Ben Nighthorse Campbell
    Mr. Chairman, I appreciate this opportunity to make a few brief 
remarks this morning drawing on my work as Chairman of the Helsinki 
Commission. The Organization for Security and Cooperation in Europe 
(OSCE) can serve as a valuable tool for promoting human rights and 
democratic development and advancing U.S. interests in the expansive 
OSCE region, covering 55 countries.
    In the aftermath of the terrorist attacks of September 11, it is 
crucial that we redouble our efforts to advance the fundamental 
principles of democracy, human rights and the rule of law throughout 
the OSCE region even as we pursue practical cooperation aimed at 
rooting out terrorism.
    During my chairmanship, the Commission has paid increasing 
attention to the multidimensional threats posed by corruption and 
international crime as well as the strong nexus between them and 
terrorism.
    The OSCE provides an excellent framework for advancing these vital 
and complementary objectives. My hope is that ``Operation Enduring 
Freedom'' will bring enduring freedom to people throughout the OSCE 
area, including those in the five nations of Central Asia.
    Erosion of our common commitment to human rights would only lead to 
greater instability, not less. It is essential that we communicate to 
every corner of the world, the U.S. commitment to the preservation of 
democracy and human rights. To do otherwise would imperil the very 
values and principles which terrorists seek to destroy. Paying lip 
service to human rights will not suffice.
    I note that the President of Uzbekistan is in Washington today and 
will be interested in Secretary Powell's assessment of the state of 
human rights and democracy in that country. A decade after Uzbekistan 
joined the OSCE, the gap between word and deed in these areas remains 
enormous.
    Egregious human rights violations continue in Chechnya as 
international attention is directed elsewhere and Russian officials 
attempt to clamp down further on journalists who attempt to report on 
developments in that war torn region of Russia.
    I am also concerned over continued repression in the Republic of 
Belarus the last surviving dictatorship in Europe. Fundamentally flawed 
presidential and parliamentary elections there leave that country 
without legitimate leadership and have led to its self-imposed 
isolation.
    Finally, there are important parliamentary elections coming up in 
Ukraine later this month. I have introduced a resolution urging the 
Government of Ukraine to ensure a democratic, transparent, and fair 
election process leading up to those elections. Congressional interest 
in the elections, and, for that matter, U.S. interest, is because an 
independent, secured, democratic, economically stable Ukraine is 
important, and we want to encourage Ukraine in realizing its own goal 
of integration into Europe.
    Thank you, Mr. Chairman. I look forward to the testimony and 
comments from Secretary Powell.

                            ROLE OF THE OSCE

    Senator Campbell. And I would ask the Secretary if he would 
answer some of the questions I am going to pose in writing 
because we are going to simply run out of time.
    I would tell, Mr. Secretary, I was happy to hear you talk 
about the war effort in national security, the war effort on 
terrorism and the multidimensions of it. You alluded to the 
cultural, the educational, the public information and the 
diplomatic efforts that need to be made, and I absolutely 
agree. It seems to me if we do not redouble our efforts to 
advance fundamental principles of democracy and the rule of 
law, we are just destined to fight more battles on the battle 
fields, whether it is one country or another.
    I am particularly interested in one area that I am involved 
in, and that is the OSCE. I am sure you are familiar with that. 
If you go anywhere in Europe, almost everybody knows what the 
OSCE is. They talk about it in the United States, and everybody 
kind of goes blank. Apparently, we are not doing a very good 
job of telling the people of the importance of the OSCE, but 
you know as well as I do that it is.
    Let me ask you about it in particular. As you know, there 
are 55 member nations and a number of observer nations too. 
Some of the observers have suggested that the human rights 
situation in some countries, such as Turkmenistan and several 
others, is so bad that they ought to be suspended from the 
OSCE, the way Yugoslavia was in 1992.
    I would ask you if there is a point where the OSCE does not 
play a constructive role or, to the contrary, is it used 
inadvertently by some brutal regimes to give them some 
legitimacy?
    Secretary Powell. The OSCE does a fine job, and I certainly 
know what the organization is and what it does and have worked 
with it for many years. I am sure there are nations whose human 
rights performance we do not approve of that might well be 
trying to use the OSCE to give them some legitimacy or cover. I 
would rather provide an answer for the record as to whether or 
not the rules, regulations, and basic principles, which govern 
the OSCE, should be looked at to see whether these nations 
should or should not be suspended, and which ones.
    Senator Campbell. I appreciate that, if you would answer 
that to your best ability in writing.
    [The information follows:]

    The OSCE has not relaxed its human rights expectations for 
the Central Asian republics or other participating states. 
Through its missions in Central Asia, the Permanent Council in 
Vienna, and around the world, the OSCE continues to raise the 
issue of ongoing human rights abuses and lack of democratic 
institutions in the region. It is therefore important for the 
OSCE to continue to engage these countries. The process of 
having OSCE participating states remind each other of their 
commitments, complemented by recommendations for improvements, 
is essential to building a more democratic, prosperous, and 
secure future for the region.
    In the case of Turkmenistan and several other Central Asian 
states, it is through its engagement in the region that the 
OSCE is able to improve faltering human rights and foster 
democratic development, while at the same time addressing 
urgent security, environmental and economic needs.
    We do believe that suspending participation in the OSCE 
should always remain an option should a government commit 
egregious human rights violations, such as those of the former 
regime in Yugoslavia. However, this option should be weighed 
carefully against the costs of disengaging a country from the 
OSCE process.
    The OSCE continues to be an important forum to discuss 
human rights issues and promote steps toward democracy in 
Central Asia and elsewhere. There is still a need to address 
human rights along with security interests. In order to combat 
terrorism and defeat extremist insurgencies in the region, we 
need to encourage the development of democratic governments 
that respect human rights.

                         OSCE AND HUMAN RIGHTS

    Senator Campbell. Russia, along with a small number of 
former Soviet states have complained that the OSCE is 
unbalanced, that we put too much emphasis on the human 
dimension. Those countries have also complained about that 
there is too much attention focused on former Communist 
countries that were once part of the Soviet Union. Do you think 
there is any merit to that?
    Secretary Powell. No, I think it is quite appropriate that 
the OSCE should focus on human rights. All of these various 
organizations flow back to the Helsinki Final Act on the Rights 
of Men and Women, something President Ford signed back in the 
mid-seventies, and it was a remarkable occasion and document 
when he signed it. There was quite a disagreement as to whether 
he should, but he did. And by aligning the United States for 
human rights, that essentially, I think, helped bring down the 
Soviet Union because they could not ignore this international 
standard of human rights performance that was put in front of 
them to deal with. We should continue to do that.
    Some of the former republics of the Soviet Union do not 
have good human rights records, and I am meeting with the 
leaders of Uzbekistan today. They have been very supportive of 
our efforts during the war. President Karimov has been a solid 
coalition partner, but, at the same time, there are problems 
with respect to human rights in Uzbekistan, and we will not 
shrink from discussing them with the president of Uzbekistan.
    If I could draw your attention to our annual Human Rights 
Report, which we issued last week, you will see a very long 
section on each one of these republics. We call it the way it 
is. Even though we need their cooperation and security in other 
areas, we believe it is in their interests for us not to hold 
back on human rights problems that they have. If they really 
want to be a participating nation in the 21st century in a 
coalition that rests on democracy, human rights, free-market 
activity, and if they want assistance from the United States, 
development assistance or economic assistance, then they have 
to move in this direction. We are not shrinking from that 
standard, and we are not holding back.

                     UNITED STATES-RUSSIA RELATIONS

    Senator Campbell. I appreciate that answer. Uzbekistan is 
one of the countries that has the sort of mixed approaches, 
where they are allied with us, and yet their human rights 
violations are renowned. Also, Russia itself, we now have some 
people that are going to be going into Georgia, and I 
understand, that Russia does not agree with that. They look at 
us with the view that they are fighting terrorists in Chechnya, 
and yet we are condemning what they are doing in Chechnya while 
we are fighting terrorists too.
    I know it is terribly complicated. I just want to tell you 
that I understand that and wish you well in trying to find a 
solution.
    Secretary Powell. It is very complicated. In the case of 
our willingness to help the Georgian Armed Forces become more 
proficient to deal with terrorists in the Pankisi Gorge, even 
though some Russian officials said they were not happy with 
that, President Putin understands it and appreciates the fact 
that we are working with President Shevardnaze. So it is one of 
those cases where we have a common goal, and that is to defeat 
terrorism.
    Throughout Central Asia, people said the Russians will not 
let you do things in Tajikistan, Turkmenistan, Uzbekistan, and 
Kazakhstan. But quite the contrary, they are cooperating with 
us because it is a common enemy. It is not the United States 
versus Russia, but it is the United States and Russia working 
against terrorism, fundamentalism, smuggling, drug running, all 
of those things that are a greater threat to Russia than they 
are to us.
    So we have found new ways to cooperate that would have been 
unthinkable 2 years ago.
    Senator Campbell. I am glad you mentioned the drug 
component, too, because the fact is that some of the terrorists 
finance their activities through drug sales.
    Secretary Powell. Yes, sir.

                   POLICE TRAINING IN OSCE COUNTRIES

    Senator Campbell. Let me ask just one final one so I can 
leave a little time for my colleagues before we go vote, and 
that is on the police activities. I visited the police academy 
in Kosovo some time ago, and I know that in Serbia and 
Macedonia there are some efforts to developing police training. 
I think it is very effective, frankly.
    I just want to know about the State Department. Are you 
considering efforts to support expanding police training 
activities in the OSCE countries?
    Secretary Powell. Yes. The real solution to many of the 
problems that exist is inadequate police forces, police forces 
that are not up to the kinds of standards we would expect here 
in the United States, particularly in places like Bosnia, and 
Macedonia, and Kosovo. So, yes, we are looking, and we are 
working with the Justice Department and other organizations, 
including international police organizations, to do everything 
we can to stand up more competent police forces in OSCE and 
other nations.
    Senator Campbell. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Senator Inouye. Thank you.
    Senator Reed.

                LIBERIAN IMMIGRANTS IN THE UNITED STATES

    Senator Reed. Thank you, Mr. Secretary, for your testimony 
today, and let me also thank you for your understanding and 
sensitivity with respect to the Liberian population here in the 
United States.
    As you know, for more than a decade, we have had a 
significant number of Liberians here, first, under temporary 
protective status and now under DED, and it is an annual rite 
where they face the process of deportation. I thank you, and 
the Attorney General last year, you extended DED once again, 
but I believe it is time now for some type of permanent 
solution, and I would like to work with you and the Attorney 
General to, this year, avoid the last-minute reprieve and give 
these good people a sense of permanency here in the United 
States that they want.
    Secretary Powell. I am pleased to look at it, Senator.
    Senator Reed. Thank you, Mr. Secretary.
    [The information follows:]

    We recognize that many Liberians have lived in the United 
States with temporary protection from removal for an extended 
period of time. As you know, only the Congress has the 
authority to grant lawful permanent resident status to this 
group. We will be exploring with the Immigration and 
Naturalization Service and others in the Administration whether 
there is an appropriate way to address this issue.

                              ARMS CONTROL

    Senator Reed. Mr. Secretary, last weekend the Los Angeles 
Times described the Nuclear Posture Review, which represents a 
profound shift I think in our thinking about arms control and 
will complicate your job immensely as you go about the world 
trying to explain it and defend it.
    From the reports in the Los Angeles Times, the indication 
is that we are beginning to target countries like Libya and 
Syria who, to my knowledge, do not possess nuclear weapons, 
that we are at least suggesting the preemptive use of nuclear 
weapons, that we are preparing to develop new classes of 
weapons which would penetrate deep underground, and this raises 
quite a few questions. I must say, as an aside, one of the 
subtexts in the discussion of the ABM Treaty has been the 
immorality of using nuclear weapons as a balance of terror, but 
it seems that such moral objections did not infuse this Nuclear 
Posture Review.
    But getting to the more specific points. It seems to me 
that we are turning away from what was our traditional approach 
to arms control, which was a very deliberate, concerted, 
consistent effort to limit the use of nuclear weapons, not to 
expand their use.
    Second, with the discovery of these new targets, it seems 
to me that the hope of many sides that we could reduce the 
number of warheads and launches might be frustrated by the 
simple increase in targets in these different countries.
    Finally, the proposal or discussion to develop new classes 
of nuclear weapons raises the issue of nuclear testing. Why do 
you not comment in general on these issues and specifically 
whether you would anticipate that we would begin to test 
nuclear weapons to develop this new class of systems.
    Secretary Powell. With pleasure, Senator.
    Senator Reed. Thank you, Mr. Secretary.
    Secretary Powell. After reading the articles over the 
weekend and the continued commentary today, I had to go back 
and read the report again because the articles did not comport 
with my understanding of the report.
    Let me answer it this way: When I was Chairman of the Joint 
Chiefs of Staff, the first day I took over, October 1, 1989, we 
had 29,000 nuclear weapons in our operational inventory. I was 
responsible to the President and the American people as to how 
they might be used. Now, some 13 years later, that number is 
well, well under 10,000. We have removed from our operational 
inventory two-thirds of the weapons that were there when I was 
Chairman.
    We have gone from a situation where we had day-to-day alert 
targeting on specific targets all over the Soviet Union and 
other nations of the Warsaw Pact, to a situation today where 
not a single country in the world is on a day-to-day target 
list. We are working with the Russians for further reductions. 
We have said in this report, the Nuclear Posture Review, that 
we do not really view Russia as an enemy the way we used to 
view Russia as an enemy, and therefore, we can make even more 
significant reductions in our nuclear forces.
    The President has gone so far as to say, ``Look, President 
Putin, we do not even need a treaty for this because I am going 
down whether you are or not. I do not need as many nuclear 
weapons as we used to have.''
    So, quite the contrary, the philosophy of President Bush, 
the philosophy of this administration, is to continue driving 
down the number of nuclear weapons.
    I was pleased to be the Chairman of the Joint Chiefs of 
Staff in 1991, or early 1992--the year escapes me as I get 
older, Senator Reed. I will have to go back and check my 
records--but when I went to the President of the United States 
with my boss, Secretary of Defense Cheney, and said to former 
President Bush, ``We no longer need any nuclear weapons in the 
Army. They are all gone. The marines have gotten rid of theirs. 
We no longer need any tactical nuclear weapons in the United 
States Navy. They are all gone. We still have the ballistic 
missiles in the Navy. And we need many fewer nuclear weapons in 
the Air Force.''
    And so, frankly, we have gone down significantly, and we 
will continue to go down. That is point one. So, even though 
traditional arms control has changed, the drive to reduce the 
number of nuclear weapons has not changed; it is accelerating, 
even in the absence of traditional arms control kinds of 
negotiations.
    With respect to reports that somehow we are thinking of 
preemptively going after somebody, or that, in one editorial I 
read this morning, we have lowered the nuclear threshold, we 
have done no such thing. There is no way to read that document 
and come to the conclusion that the United States will be more 
likely or will more quickly go to the use of nuclear weapons. 
Quite the contrary. We have now an overwhelming conventional 
non-nuclear capacity, even greater than it was 10 years ago.
    The discrepancy in conventional capability between the 
United States and any other nation or combination of nations is 
greater than it was 10 years ago. So we are not fools. We are 
not going to suddenly say let us more quickly go to nuclear 
weapons, when we have such conventional capability.
    What we have done in this report, quite sensibly, is to say 
the American President has to have all of the options that are 
available to him, alive and well, and thought through. And so 
when we look at the dangers that are out there and when we look 
at nations that might be developing weapons of mass 
destruction, it is prudent, commonsensical, and good thinking, 
politically and militarily, to consider these nations and to 
consider what range of options the President should have.
    Nuclear weapons have not gone away from the face of the 
Earth. I wish they were. I wish there was not a single nuclear 
weapon in the world, but there are. I am pleased to have been 
part of several administrations that have driven the number 
down. I do not know if I will still be around when they are all 
gone, but I hope they will be some day. But as long as we do 
have nuclear weapons and as long as there are nations that 
continue to move in this direction, the security of the 
American people, the security of our Nation, and the security 
of our friends requires us to think the unthinkable.
    But nothing in this Nuclear Posture Review seems to me to 
represent a major departure in thinking from previous 
administrations, in terms of continuing to go down and 
continuing to find new ways of stability in our strategic 
framework. That is why we are so committed to missile defense. 
Missile defense does not kill a single individual. Missile 
defense protects people from offensive weapons of the kind we 
are trying to get rid of. It is offensive weapons we are trying 
to get rid of that kill people.
    With respect to the development of new nuclear weapons, we 
are examining whether or not, within our inventory, 
improvements can be made or there are new things which we 
should be looking at that are sensible. But in looking this 
over the weekend, after the stories broke, the report I have 
from the Pentagon states just that, we are looking at it. There 
is no new design out there or new nuclear weapon about to be 
commissioned into production that would require testing. We 
remain committed to a moratorium on testing. Even though we are 
not in the CTBT, the President remains committed to a 
moratorium on testing.
    So there is no testing breakout coming. There is no new 
escalation in the kinds and types of nuclear weapons we wish to 
have. There is no change in the threshold that people like to 
talk about. There is no more intention to preempt than there 
might have been in some previous administration. What we are 
doing is taking a look at the world that is out there right 
now. And for those nations that are developing these kinds of 
weapons of mass destruction, it does not seem to us to be a bad 
thing for them to look out from their little countries and 
their little capitals and see a United States that has a full 
range of options and an American President that has a full 
range of options available to him to deter, in the first 
instance, and to defend the United States of America, the 
American people, our way of life and our friends and allies.
    Senator Reed. Thank you, Mr. Secretary. The thoughtfulness 
and thoroughness of your answer suggests the seriousness of 
this topic, and I suspect this will not be the last exchange 
you have with the Congress----
    Secretary Powell. I am sure not.
    Senator Reed [continuing]. Nor your fellow foreign 
ministers around the globe. This is a very important issue.

                       MISSILE DEFENSE AND RUSSIA

    Secretary Powell. It is, and I can assure you, for example, 
my Russian colleague, Foreign Minister Ivanov and I, we discuss 
this constantly. Sergei Ivanov, the Russian Minister of 
Defense, is in town today to have similar discussions with 
Secretary Rumsfeld. The Russians want the reductions to be 
legally binding. We have agreed to that because they felt it 
was so important because they wanted predictability about the 
future. Who knows who the next President is going to be in 
Russia and in the United States, so let us put it in 
international law. We understand that. But the President, while 
willing to do this, is just as willing to say, and has said 
across the table to President Putin, in my presence more than 
once, ``Mr. President, we are no longer enemies. You have what 
you think you need to protect yourselves, and we will have what 
we think we need to protect ourselves, and we are going down. I 
am cutting. So, if you want to cut, fine.''
    President Putin said, ``Yes, I want to cut, but I really 
need predictability in the future. Therefore, let us make it 
legally binding.''
    ``If that is what you need, we will try to accommodate you, 
but we are going down anyway.''
    Senator Reed. Thank you, Mr. Secretary.
    Senator Hollings [presiding]. Thank you.
    Senator Inouye.

                       CONSULTATION WITH CONGRESS

    Senator Inouye. Thank you very much, Mr. Secretary. It is 
always a pleasure to be in your company and to listen to your 
testimony, either as Chairman of the Joint Chiefs or Chairman 
of America's Promise or Secretary of State.
    As you may recall, Mr. Secretary, several years ago a few 
Members of Congress received calls from the White House to 
report to the Cabinet room to meet with the President on a 
special problem, and we gathered early in the morning the 
following morning, and we, when the President called the 
meeting to order, his announcement was very simple. ``At this 
moment, our troops are landing on the Island of Grenada.''
    I can tell you that not all of us were advised of this 
military action. However, Grenada was a small island country, 
weak, and so very few Members of Congress took any note of 
that. But since 9/11, our front pages, magazine covers have 
been filled with attacking Iraq, attacking Yemen, attacking 
Somalia. My question is, if this country is seriously 
considering attacking one of these countries, I would hope that 
the Congress of the United States would be brought into and at 
least consulted or discussed, carry on a dialogue, get our 
views, because I would hate to see another repetition of 
Grenada, and Grenada is not Iraq.
    Do you have any thoughts on that?
    Secretary Powell. Yes, I do, Senator. I remember Grenada as 
well. It was a sudden crisis that suddenly sprung on the scene 
over a terrible weekend that also included the weekend of the 
Beirut bombing, as you will recall, back in 1983. It just was 
something that had to be done quickly, and nobody could even 
find Grenada on most maps without a little bit of coaching at 
that time. And so President Reagan was faced with an immediate 
crisis, and because of problems of operational security, he 
found it necessary to bring Congress in just as the invasion 
and operation were taking place.
    With respect to the current situation we are in, the 
President has no plans on his desk and no recommendations from 
his national security advisors to undertake military action 
against any country. In a couple of the ones you mentioned, 
say, Yemen, it is not a matter of sending armed forces into 
combat in those countries but a question of the Armed Forces of 
the United States assisting the governments of those countries 
in dealing with the threats they are facing from terrorist 
activities that have found haven in those countries.

                          U.S. POLICY ON IRAQ

    With respect to Iraq, our policy remains as it has been for 
some time. One, we are working in a multilateral organization, 
the United Nations, to make sure that Iraq abides by the 
conditions of the end of the gulf war, saying you cannot 
develop weapons of mass destruction, and inspectors, a U.N. 
inspection team, will determine whether you are or you are not. 
Iraq, apparently, has once again refused, rather strongly in 
recent days, to allow the inspectors back in. Therefore, the 
sanctions must remain, and the Oil-for-Food program must 
control roughly 80 percent of the money that goes to the Iraqi 
regime, so we know what they are spending it on.
    But the United States also believes that the Iraqi people, 
the region, and the world would be better off if that regime 
were changed, if it were no longer there. We are in 
consultation with our friends and allies, and the President 
speaks to Members of Congress, the leaders of the Congress, on 
a regular basis as to what his thinking is. But he has made no 
decisions with respect to any changes in the way we are 
approaching this problem.
    We examine our options, we work with Iraqi opposition 
groups to see how they can be made more effective, and as you 
know, I consult on a regular basis with my foreign minister 
colleagues around the world. Vice President Cheney is on a trip 
now to talk about many things, including the Middle East peace 
process, energy plans, energy programs, and the campaign 
against terrorism, and I am sure in the course of his 10 nation 
visit, he will also talk about the problem associated with 
Iraq, as well as Iran's situation, their support for terrorist 
activities, and their efforts to develop a nuclear capability. 
But I am sure the President understands, I know he understands, 
that Congress is terribly interested in this issue, and he will 
continue his discussions and consultations with the leadership.
    Senator Inouye. Thank you very much.
    Mr. Chairman, I have questions I would like to submit, 
questions such as--they are regional types, Mr. Secretary.
    Secretary Powell. Yes, sir.
    Senator Inouye. East-West Center, Coral Bed ecosystem, 
Pacific Northwest long line fishing, that type.
    Secretary Powell. Yes, sir.
    Senator Inouye. So, if I may----
    Secretary Powell. By all means, sir.
    Senator Hollings. Very good.
    Mr. Secretary, Senator Domenici has definitely some 
questions, and he is racing back right now, but you can see 
from the tone of questioning and the concern that maybe Ms. 
Charlotte Beers, is she Deputy Secretary? You ought to assign 
her not necessarily to get the American message of freedom and 
individual rights and peace out to the world around, but get 
her over to the Defense Department that you headed up and 
coordinate the administration's message because you get this 
``axis of evil,'' and then the next thing you know we have the 
threat of limited nuclear attacks, adding two more countries to 
the ``axis of evil.'' Then there are all these questions about 
what is going on, and you have to explain to a committee, to 
all people, to us, the Congress, that there is no change in 
nuclear disposition or use or whatever it is.
    But right to the point, tell Karl Rove to cool it. I know 
he is trying to keep the war fires burning until November, but 
that is not helping you out at all. How can you get diplomacy 
in State, and friends, and influence, and bring about peace?

                         SITUATION IN COLOMBIA

    Incidently, Colombia, we went down there last year, and the 
Government itself had not seemed to make up its mind to get rid 
of the FARC and everybody else occupying that area down there. 
They were trying to modulate more peace, and draw lines, and 
everything else. It reminded me of the time, with Ben Gurion 
and the early Prime Minister behind him, they had a boatload of 
weaponry coming in, and--Menachem Begin--and Ben Gurion had 
already agreed with the United Nations to withhold any kind of 
military activity, being recognized as a country, and he had to 
of course call Begin down on that boatload of arms that he 
continued to use on the premise he said that in a country there 
can be only one military force, and that has got to be in the 
hands of the Government.
    Similarly, down there in Colombia tell them or maybe you 
can get Pastrana to Israel and Sharon to Colombia. Maybe that 
swap would really get us going somewhere.
    I see you do not want to comment, but----
    Secretary Powell. No, sir.

                   EXPANSION OF THE WAR ON TERRORISM

    Senator Hollings. Well, you get down there, you get the 
training. I thought I was back in Vietnam. We had the colonels 
get all around the table and give us all a briefing. We are 
ready to go, and we are moving there and everything else like 
that. Then there is Georgias where we have just trainees, but 
sometimes the trainers accompany the trainees, and then they 
come under fire, and then they get engaged, and then we have to 
send in reinforcements, the same old Vietnam situation.
    So as we get into the Philippines, and Yemen or Georgia and 
these other places, you are a product of it. You understand it 
better than any, and let us watch it as closely as you possibly 
can.
    Secretary Powell. We certainly will, Mr. Chairman, and I do 
not think the models there really compare back to Vietnam.
    The FARC is a terrorist organization, and the ELN is a 
terrorist organization. They can damage Colombia's democracy. 
They cannot really destroy the nation or take it over, but they 
cause a great deal of disturbance throughout the society with 
their terrorist acts, with their acts of violence, and with 
their connection to narco-trafficking. I think it is very 
reasonable for us to help them. There is no request for United 
States military troops, even as trainers accompanying advisers 
and the kind of problem you mentioned. I am very aware of that 
and very sensitive to it because I was one of them some 40 
years ago this year. So we are very sensitive to that.
    I also think that is the case in the Philippines, where the 
Abu Sayyaf group, with its al Qaeda connections, cannot bring 
down or overtake the Government of the Philippines. But it is a 
threat to the democracy of the Philippines, and therefore it is 
quite legitimate for us to assist those nations. But neither 
nation has indicated they want U.S. troops to come in, and I do 
not think we will slide down that slope.
    Senator Hollings. Very good.
    Senator Domenici.
    Senator Domenici. Thank you very much, Mr. Chairman.
    Mr. Secretary, it is good to see you.
    Secretary Powell. Good to see you, sir.

                  MICRO LENDING PROGRAM IN AFGHANISTAN

    Senator Domenici. I want to open with the idea that I have 
raised with you on one occasion on the telephone and put it on 
the record here.
    You know, obviously, for Afghanistan to stabilize, at some 
point people are going to have to be in business, big business, 
little business, many businesses. I wonder if you would 
consider doing some evaluation as to whether the micro lending 
that has been successful in underdeveloped countries might be 
suitable in Afghanistan. Micro lending has turned into a hugely 
successful banking operation, but it is not really banking. It 
is just fundamentally that you do not have to worry about 
security, you do not have to worry about checking people's 
credit.
    What you do is lend them small amounts, $100, $300, $500, 
for a particular little business that they have got. The 
relationship is kind of personal with the lender. We found 
across the land and, in fact, in the United States, micro 
lending is about as secure as any kind of lending around. Those 
kinds of enterprises pay their bills.
    I would think that, while we are busy worrying about from 
where the other kind of financing is going to come, that we 
might do well to experiment with micro lending for the Afghani 
people. In the United States, I might say in some of our 
States, women, as part of the initial setting up of women's 
business advocacy groups, have taken on micro lending to get 
started and found it to be hugely successful. The dollar amount 
here is higher. I think we tried it in Mexico with success. I 
wonder if you could comment on it, and then later we will talk 
with the chairman and ranking member about doing something to 
authorize it.
    Secretary Powell. I think micro lending is a great idea. I 
have had some experience with it. Before I came back into 
Government, I made a trip to India, and I went into one of the 
poorest neighborhoods in Mumbai. I saw what some women had been 
able to do with micro lending programs in their community and 
how they were saving the profits that they were already making 
in order to pay back the micro lending facility. In the local 
community, a micro lending facility had been set up. And so it 
is a good way to get people back into business, back into 
commerce.
    As Chairman Karzai, the Interim Authority head in Kabul, 
said to me when I was there, ``Afghanistan will not be 
successful until we are generating our own revenue, and until 
our economy starts to work, we will not be successful. We do 
not want aid. We want our own economy functioning. We want to 
support ourselves. We do not want aid. We want investment.'' 
Micro lending certainly lends itself to that.
    I think we will need a little more time to see the country 
stabilize a bit more and to have greater confidence in the 
banking and financial system, in order to support any kind of 
lending, to include micro lending. But I certainly would 
encourage anything that moves us in that direction, Senator.
    Senator Domenici. Mr. Chairman, I wonder if we might 
explore this with your staff. I do not know if it needs 
specific authorization. I do not think so. I think it could be 
part of our foreign aid provision in this or another bill. I, 
personally, would hope that I could get your support. That 
would make it for sure, and I think it is worthy of us starting 
that.
    Senator Hollings. If you have it, we will work on it, and 
get Secretary Powell's approval here of our language.
    Senator Domenici. Very good.
    Senator Hollings. Good.
    [The information follows:]

    As Secretary Powell indicated on March 12, he is a strong 
supporter of microfinance, especially as Afghanistan 
stabilizes. The U.S. Agency for International Development 
(USAID) is currently exploring both the multilateral and 
bilateral options available to us for supporting a microfinance 
development program in Afghanistan.
    On the multilateral front, USAID is working closely with 
the Consultative Group to Assist the Poorest (CGAP), a 
consortium of 28 donors housed in the World Bank, to establish 
a common framework for the development of an Afghan 
microfinance sector. USAID, which partially finances CGAP, is 
working with the consortium to undertake a national 
microfinance framework review planned for May 2002. USAID has 
publicly indicated its willingness to co-host a donor meeting 
to discuss the review findings.
    As this longer-term strategy unfolds, USAID is also 
examining possible shorter-term bilateral investment options. 
Choices will not be easy. Strict interpretations of Islamic law 
with respect to interest earnings, the level of indebtedness of 
rural Afghan families, and the limited capacity of local 
microfinance organizations represent unique challenges that 
USAID will have to take into account. One option USAID is 
considering is the creation of a nongovernmental organization 
competitive grants program to support microfinance start-up 
activities.

              INTERNATIONAL LAW ENFORCEMENT ACADEMY [ILEA]

    Senator Domenici. Mr. Secretary, on a parochial note, we 
have a law enforcement academy in Roswell, New Mexico, that is 
known as ILEA, I-L-E-A, facilities. I have a few questions 
about where that program is going, but I wanted to share with 
you that the initiation of this program in Roswell, New Mexico, 
went extremely well.
    Secretary Powell. Yes.
    Senator Domenici. That the first group of foreigners that 
came were from a very poor country, and they were very, very 
impressed that the United States would take this opportunity to 
help them with law enforcement, the appreciation of it and the 
fundamentals. I would like to make sure that because our 
emphasis seems to be moving in other directions, either toward 
the drug war or against terrorism, that we will not shirk this 
because this is fundamental training. None of the other kinds 
of law enforcement are going to work if we shirk this one.
    Would you mind looking into this and answering in the 
record as to what your position is, what the State Department's 
position is on ILEA's?
    Secretary Powell. I would be delighted to, sir. I am very 
familiar with the facility. I have even seen some tapes of the 
facility. It looks like a very professionally run organization.
    Senator Domenici. I am going to put about 10 questions in 
the record because it is getting late.
    [The information follows:]

    The Department, through the Bureau for International 
Narcotics and Law Enforcement Affairs, intends to continue its 
support for the ILEAs. These institutions are recognized as key 
elements in the international response to drug trafficking and 
other criminal activity.
    Now more than ever, the Academies will play a significant 
global role in combating not only criminality, but the 
terrorist elements who often use criminal enterprises to 
accomplish their goals.

                      VISA AND PASSPORT ACTIVITIES

    Senator Domenici. I just wanted to take one last issue and 
talk with you about it.
    You know the visa and passport activities of your 
Department are very, very important. We all know how important 
it is because our constituents probably talk to us about visa 
situations as much as any other foreign policy issue because 
passports take too long to process or they get mixed up. So we 
all get a taste of it in a pretty good way, and I just want to 
comment that visa fraud and the whole issue is very important 
in the war on terrorism. I would hope that there is a real 
effort to work your innovations and improvements into what the 
other Departments have to do with reference to border 
functioning.
    Are you going to be working together, with reference to the 
implementation?
    Secretary Powell. Yes, I must say the events of 9/11 have 
made it clear that a higher level of coordination and 
cooperation between the various Departments is needed. 
Assistant Secretary Mary Ryan, who heads Consular Affairs for 
us and deals with all of these kinds of issues, is working 
closely with INS and others as part of the homeland security 
work of Governor Ridge.
    Senator Domenici. The rest of my questions will be 
submitted in writing to be answered whenever the chairman sets 
the time.

                         FUTURE OF AFGHANISTAN

    I just want to close where I should have begun, by 
complimenting you on the effort of the President, the Secretary 
of Defense, yourself and all of those who are part of America's 
most, most successful effort to combat terrorism. I leave you 
with one question that you might answer for us.
    In Afghanistan, what do you see as the next step in 
governance there based upon your experience and knowing the 
people? When this very interim situation is up, what do you 
think the next governance----
    Secretary Powell. I am very pleased at how well the Interim 
Authority has done. It has certainly got a lot of work ahead of 
it, but when you consider where we were a couple of months ago, 
wondering if we could ever get this thing started, I think 
Chairman Karzai is off to a great start. The next thing that 
will happen is later this spring, when there will be a grand 
assembly and another government will be selected, and then in 2 
years' time, there will be an election. All of that seems to be 
progressing rather well, with the assistance of the United 
Nations.
    Chairman Karzai's real challenge now is to make sure that 
he can put in place a national army and a police force to 
guarantee security throughout the country and tamp down the 
ambitions of various warlords, so that it does not go back to 
old Afghanistan, but new Afghanistan.
    And then I think one of the biggest challenges they are 
going to have, Senator, is just putting in place some of the 
fundamental administrative systems and processes that we take 
for granted. The ability to write a government check does not 
exist yet, and neither does the ability to talk to one another 
from office to office, or to communicate with computers. Unless 
you have these basic administrative systems down, it is hard to 
run a country in the 21st century. That is going to be a major 
challenge for him, as will be putting in place a cabinet and 
sub-cabinet-level government that will represent competent 
people, committed people, educated people, so we do not get 
into the business of cronyism or paying off one warlord with a 
position and another warlord with a position. It is those basic 
administrative systems, noncorrupt and transparent, that will 
allow this government to start to act like a government.
    Senator Domenici. Might I follow up with one comment?
    Senator Hollings. Surely. Go ahead.

                               CAPITALISM

    Senator Domenici. Mr. Secretary, I am a bit concerned. We 
all learned up here over the past decade to say that what we 
really were proud of was that the world was moving toward 
democracy, toward freedom, and then we always added and toward 
free enterprise or capitalism. So we were saying the world is 
now moving toward capitalism as a form of economic policy, and 
freedom, and liberty and democracy as the underpinning.
    There seems to have grown up here a group of Americans who 
do not agree with the capitalism part of this because they talk 
about it being too big, and the corporations have taken over. 
On the other hand, in some of these countries their banking 
system failed after they were well along and left some very bad 
connotations about whether capitalism will work to move a 
country from a very poor and underdeveloped stage on through to 
growth and prosperity.
    Does it concern you that there have been some failures that 
are very visible to the world? And, if so, what do we do about 
underpinning those governments more? Do we involve ourself more 
in their basic economic policies so they will not make mistakes 
like Mexico made. Had they not been as strong and had such a 
powerful neighbor, their mistake would have taken the country 
down.
    Secretary Powell. I think capitalism still remains the 
model of choice. Nothing else really works effectively in the 
21st century. Globalization is here to stay. Whether people 
like it or not, it is an integrated world. We have seen 
countries such as China and Russia moving in this direction 
because it works for them. They have accumulated a level of 
wealth they could have never dreamed of previously.
    Have there been failures? Have there been mistakes? Yes, 
when you look at the Asian financial crisis of, say, 5 or 6 
years ago, and when you look at what happened in Mexico. But it 
is interesting; the system adjusted and learned from those 
early errors, those early catastrophes, the Russian bankruptcy 
of the middle 1990s. People have learned, so that when we now 
have crises, let us say in Argentina and some challenges in 
Turkey, contagion is not as big a problem as it was 5 or 8 
years ago. People have learned how to deal with this.
    Even with a system as advanced and developed as ours, we 
have demonstrated rather vividly in recent months that we can 
still have catastrophic failures that are unimaginable. But 
they happen. And what people have to learn is that capitalism 
means risk. Capitalism means the destruction of organizations 
that are no longer relevant or are no longer responding to the 
market or have been run ineptly. As long as you understand that 
capitalism is constructive, but it also has a necessary 
destructive element to it, then I think we can keep the world 
moving in the right direction.
    Senator Domenici. Thank you very much.
    Thank you, Mr. Chairman.

                                 MEXICO

    Senator Hollings. Now, when we get into, well, let us say, 
first, Mexico, at the time, Mr. Secretary, when we were getting 
into NAFTA, we had a wonderful witness. He was on the 
satellite. His name was Vicente Fox, and he was attesting, 
along with other witnesses from Mexico City, what we really 
needed was a sort of common-market, rather than a free-market, 
approach. ``Over here capitalism, Senator, is very good if you 
have got an open-market market, you have got a respected 
judiciary, you have got labor rights,'' and you can go right on 
down the list.
    And we found in Europe that you could not have that, under 
the free-market approach, so the European community taxed 
themselves for 5 years to the tune of $5 billion before they 
allowed Greece and Portugal into the common market. Instead we 
use the free market. I am for free market. I voted for free 
trade with North America because we have the same standard of 
living between Canada and the United States, not so with 
Mexico.
    And so when you begin to talk of capitalism, we have got to 
help Mr. Fox out down there on the one hand. I had asked last 
year, and maybe you can answer, about the coordination perhaps 
of establishing an FBI school down there, because they would 
not allow it before, but if we can train their law enforcement, 
and he is trying to beef it up, Jorge Castanedo, the Foreign 
Minister, is ready to go. See if you can do that, and otherwise 
work out a little Marshall Plan for Mexico. Because all we did 
in NAFTA was send down $12 billion, and it went through the 
banks. Now they owe it to Deutsche Bank, and the money went 
back up to Wall Street, and nothing happened, and he is having 
a heck of a struggle happening, bringing it into capitalism and 
all of those things. So we can help with law enforcement.
    But if you really want to take our neighbor and not worry 
about Yemen or what might be happening down in East Timor, I am 
worried about what is happening in Mexico, and I would like to 
see this fellow succeed, but he needs help, not just meetings 
and headlines. We have got to start making some headway.
    I would vote tomorrow morning or this afternoon for a $12 
billion Marshall Plan for Mexico and just have the stated 
things that must be developed and must occur before the money, 
in increments, is divvied up, otherwise, see, I speak feelingly 
because I have lost 50,900 textile jobs to Mexico already since 
NAFTA passed. In other words, as Senator Domenici and Senator 
Hollings stated, before you open up Powell Manufacturing, you 
have got to have a minimum wage, clean air, clean water, Social 
Security, Medicare, Medicaid, plant closing notice, parental 
leave, safe work in place, safe machinery, OSHA. I can keep 
going down the list, but you can go for 58 cents an hour and 
none of that.
    And so if your competition moves, you have got to go or you 
are going out of business, and they are all Republican anyway, 
Secretary Powell, so I am not too worried about them.

                     GLOBALIZATION AND COMPETITION

    But they are all gone now. We have lost 670-some-thousand 
jobs in steel, and what you have is the enemy within. They have 
moved, Senator Domenici, their production, these 
multinationals. They call it globalization, globalization, and 
people have got to realize it, and understand, and we have got 
to live with it whether they like it or not. Well, they are 
moving their manufacturing into protectionism of Mexico, 
Malaysia, Japan, Korea, China. You are guaranteed a profit when 
you go to China. Oh, yes, sir. Yes. They are moving their 
production to protectionism, and they are babbling at me free 
trade, free trade, fast track, fast track.
    Do not worry about all of that. Let us get into the real 
world of the so-called globalization and competition. The only 
way you are going to remove these barriers is to raise a 
barrier and then remove them both. I mean, we are all for the 
Marshall Plan, and capitalism has defeated communism because we 
gave away a good bit of our production, there is no question, 
but as has been stated long ago, our security is like a three-
legged stool, your values, unquestioned; your defense, 
unquestioned; but your economic security has been fractured 
over the past 50 years. And as hard as you can work, we are 
going out of business unless we begin to compete on capitalism.
    Senator Domenici. Mr. Chairman, I raised the issue, and I 
certainly stayed to make sure that I heard your views.
    Senator Hollings. Yes.
    Senator Domenici. I think you know that I would not agree 
with all of them, clearly, but I would say that when the 
Mexican banks had their problems, it was quite obvious that the 
United States could not be part of helping a country and then 
have no standards, with reference to their banks, of the kinds 
of things that everybody knows you would have to have in order 
to maintain viability.
    I understand that after that event some work was done 
jointly by the United States private sector and the Government 
to establish some new kinds of rules, like transparency, which 
obviously means that they cannot hide so many of the 
transactions and/or relationships of the bank from individuals, 
businesses and the international markets, and a few other basic 
principles.
    I think it would be interesting and, perhaps without 
burdening you all too much in your response, maybe you might 
furnish us with a little summary of what the United States has 
done with reference to the changes that we expect as part of 
the capitalist systems that we help because there is more than 
just transparency.
    You remember this situation. I think you were out of 
Government during that period; is that correct?
    Secretary Powell. Yes, I believe that is correct.
    Senator Domenici. I think so. Well, in any event, would you 
do that for us?
    Secretary Powell. We will take a look at it. I have people 
who are competent to do that.
    Senator Domenici. Thank you.
    [The information follows:]

    The United States, led by the Department of the Treasury, 
has strongly supported International Monetary Fund (IMF) 
initiatives to strengthen surveillance and crisis prevention 
measures. With U.S. government support, the IMF and World Bank 
initiated the Financial Sector Assessment Program in 1999 to 
assess members' financial systems and the regulatory and legal 
framework underlying their operations. The results are 
incorporated into the IMF's reviews of national economies.
    Spearheaded by the Asian financial crisis, the IMF's 
standards and codes initiative promotes the development and 
dissemination of codes of good practice in the financial 
sector. Reports on the Observance of Standards and Codes 
(ROSCs) summarize the extent to which countries observe 
international norms in a number of areas crucial to the health 
of financial systems. Reports are used for official 
discussions, as well as for risk assessment by rating agencies 
and the private sector.
    The United States has supported efforts to improve dialogue 
among market participants, the International Financial 
Institutions, and sovereign governments. In June, 2001, the IMF 
created an International Capital Markets Department as part of 
an initiative to strengthen the international financial 
architecture. The Department serves as a liaison with the 
private sector and enables the IMF to conduct more effective 
surveillance.
    At the urging of the United States and its G-7 partners, 
the Financial Stability Forum (FSF) was established in 1999 to 
improve cooperation in financial surveillance and supervision. 
The FSF is comprised of finance ministry and regulatory 
officials, as well as International Financial Institutions and 
international banking representatives. The FSF encourages 
implementation of measures to improve the health of financial 
systems, including improved disclosure practices, deposit 
insurance programs, accounting standards, and counter-party 
risk management.
    The Basel Committee on Banking Supervision is playing a 
fundamental role in strengthening the safety and soundness of 
the international banking system. Chaired by New York Federal 
Reserve President William McDonough, the Committee is revising 
the Basel Capital Accord to redefine minimum capital 
requirements, improve supervisory review standards of internal 
bank assessment processes, and ensure effective disclosure 
standards to encourage sound banking practices.
    The Committee on Banking Supervision and the Bank for 
International Settlements jointly created the Financial 
Stability Institute in 1999 to help bank supervisors improve 
financial systems worldwide. The Institute organizes seminars, 
regional workshops, and informational programs on bank 
supervision issues. Upcoming seminars in Muscat, Khartoum, 
Lusaka, Bangkok, and Vilnius are indicative of the worldwide 
scope of its efforts to improve banking standards.
    Finally, the United States is working on a bilateral basis, 
where appropriate, to address areas of concern. The Treasury 
Department's technical assistance team and USAID's banking and 
capital market reform team have worked with governments in 
Asia, Eastern Europe, South America, Africa, and the Middle 
East on a wide range of bank reform issues.
    An appropriate financial policy framework facilitates the 
mobilization of capital and is a critical condition for stable 
economic growth. As the United States works with its partners 
to promote the spread of market-based economies, efforts to 
strengthen the financial and banking sectors will remain a 
priority.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hollings. Mr. Secretary, we are lucky to have you, 
and the record will stay open for the questions by the members 
who got disrupted here by the rollcall. But thank you very, 
very much.
    [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 Daniel K. Inouye
                     hawaiian-based fishing fleets
    Question. Longline vessels operating out of Hawaii are banned, by 
judicial order, from swordfish fisheries in the Pacific Ocean due to 
the unintended bycatch of endangered turtles. Foreign fleets, however, 
are allowed to fish in the same waters our domestic fishing fleet is 
prohibited from utilizing. The foreign fleets have been able to take 
advantage of the unmet demand in the U.S. swordfish market caused by 
the swordfish fishing ban placed on Hawaii-based longliners. The 
foreign fleets are able to freely export their swordfish catch to the 
United States, although they are believed to have higher sea turtle 
interaction rates and to inflict greater levels of harm than the 
Hawaii-based fishing fleet. What meaningful measures is the State 
Department taking to address this problem?
    Answer. The issue of addressing the bycatch of sea turtles in 
longline fisheries in the world's oceans is both challenging and 
complex. As noted in the Department's report to Congress earlier this 
year, the Department of State has been working closely with the 
National Marine Fisheries Service (NMFS) to understand how technical 
solutions might be implemented in a practical, verifiable, and 
enforceable manner throughout the fisheries, where longline and sea 
turtle interactions occur. Once such technical gear or management 
solutions have been developed and demonstrated to be effective for 
long-term resolution of this problem, the Departments of Commerce and 
State will look for ways in which such a solution could be implemented 
throughout the world's fleets.
    In the meantime, the Department and NMFS will work to bring U.S. 
concerns about sea turtle bycatch in pelagic longline fisheries to the 
attention of other countries and entities engaged in these fisheries, 
as well as the relevant international fisheries bodies, including the 
International Commission for the Conservation of Atlantic Tunas 
(ICCAT), the Inter-American Tropical Tuna Commission (IATTC), the soon-
to-be-established Western and Central Pacific Fisheries Commission 
(WCPFC), the APEC Fisheries Working Group, and others. Through these 
contacts, we will seek both information relating to the nature and 
extent of sea turtle bycatch (which to date is incomplete for all 
fisheries and fleets involved), as well as consideration of any 
appropriate mitigative management measures.
    One area where the United States will make particular efforts is in 
the Asia-Pacific Economic Cooperation forum (APEC). The United States 
has the position of lead shepherd in the Fisheries Working Group (FWG) 
of APEC, and NOAA Administrator Lautenbacher will attend the APEC 
Oceans Ministerial on behalf of the United States in April 2002. The 
Department is also working with the Western Pacific Fisheries 
Management Council on preparations for the second International 
Fisheries Forum (IFF 2), which will address sea turtle and seabird 
bycatch issues. IFF 2 is tentatively scheduled to be held in November 
2002 in Honolulu.
                             net fragments
    Question. Nets from Russian, Asian and U.S. trawling vessels, which 
are lost or discarded, float around the North Pacific Ocean and 
ultimately wash up in the Northwestern Hawaiian Islands. These net 
fragments trap and drown or injure endangered Hawaiian monk seals and 
severely damage the unique coral reef ecosystem of the Northwestern 
Hawaiian Islands, which accounts for approximately 70 percent of all 
coral reefs in U.S. waters. What has the Department of State done to 
work with other nations to identify the sources of these derelict net 
fragments and to minimize the volume of derelict net fragments in the 
Pacific Ocean?
    Answer. The Department of State recognizes the magnitude of the 
current problem in Hawaii and is seeking ways to raise awareness of the 
issue in the international arena and to engage in a productive dialogue 
with other nations. To this end, the Department of State participated 
in the International Marine Debris Conference, held in Honolulu, HI in 
August 2000, and plans to submit an Asian Pacific Economic Cooperation 
(APEC) proposal to the APEC Fisheries Working Group designed to create 
a dialogue between all stakeholders, in accordance with priorities of 
the APEC Osaka Action Agenda. The proposal outlines an outreach seminar 
that would (1) provide participants with technical and scientific 
information on the problem of derelict fishing gear and related debris 
and its impacts, particularly the oceanographic variables that 
exacerbate the problem in the Pacific, in order to highlight the 
economic, financial, environmental, and marine hazard aspects of the 
problem; (2) provide a forum to examine ways in which derelict fishing 
gear and related debris actually occurs and allow policy-makers, 
industry leaders, and fishermen to exchange best practices and 
practical experience to explore possible options to minimize net and 
gear loss; (3) provide the opportunity to review regulatory and 
infrastructure mechanisms pertinent to gear loss or disposal to 
determine the international policy and legal frameworks that are in 
place, if any, to address disposal or accidental loss and identify 
potential forums and mechanisms to address this issue; and (4) identify 
potential gaps or obstacles to mitigating gear loss and ways to ensure 
proper disposal.
 convention on the elimination of all forms of discrimination against 
                             women (cedaw)
    Question. On March 8, 2002, the world celebrated International 
Women's Day. You attended an event in honor of International Women's 
Day and pledged to continue to advocate the rights of women throughout 
the world. In furtherance of women's rights in 1979, the United Nations 
General Assembly adopted the Convention on the Elimination of All Forms 
of Discrimination Against Women which was ratified in 1981. More than 
160 countries have ratified this important treaty, but the United 
States remained only a signatory to the treaty since 1980. Does your 
pledge to advocate for women's rights include advocating for the 
ratification by the United States of the Convention on the Elimination 
of All Forms of Discrimination Against Women and what steps have you 
taken toward that end?
    Answer. The Administration is very supportive of women's equality. 
Women and men must be able to exercise and enjoy their human rights and 
fundamental freedoms on a basis of equality and without discrimination.
    The Convention on the Elimination of All Forms of Discrimination 
Against Women (CEDAW) is in category three of the Administration's 
treaty priority list. That is the category of treaties the 
Administration believes are generally desirable and should be approved. 
We will need to fully assess the implications of ratification on 
domestic law. Not only must we review the package of reservations, 
understandings, and declarations submitted to the Senate in 1994, but 
we must also update the legal analysis that was submitted at that time.
                            public diplomacy
    Question. How can State better carry out its Public Diplomacy since 
September 11? Do you view the Public Diplomacy mission differently 
because of September 11?
    Are you integrating your Public Diplomacy efforts with DOD and the 
Broadcasting Board of Governors?
    Answer. No other event in our history demonstrates the tragic 
consequences of misperceptions of the United States, its values, and 
its society more than the September 11 attacks.
    Well before September 11, I committed the Department to a program 
to develop an aggressive, effective Public Diplomacy program. I asked 
Charlotte Beers, one of the most dynamic and recognized advertising 
executives in the United States, to become Under Secretary for Public 
Diplomacy and Public Affairs, I fought to ensure that Public Diplomacy 
resources were increased after twelve years of continuous reductions.
    The nature and challenges of Public Diplomacy have not changed 
since September 11, but their urgency has increased geometrically. We 
are engaged as much in a struggle of ideas and values as we are in a 
war against terrorism. We must reach out to wider, broader, and younger 
audiences throughout the world and in particular, in Muslim majority 
nations. We must convince them that the democratic and open values that 
we offer and espouse are a road map to a peaceful and prosperous 
future.
    As resources and personnel allow, we are addressing these critical 
issues. The Bureau of Educational and Cultural Exchanges has developed 
specific programs to work closely with Muslim majority states to create 
new exchange programs, develop modern and objective curricula in these 
regions, and increase exposure of young professionals and educators to 
the United States. The Office of International Information Programs has 
created numerous outreach materials, creative websites, and speaker 
programs to bring our message to millions. Public Affairs (PA) has done 
a tremendous job with its Foreign Press Centers in Washington, New 
York, and Los Angeles. Its television Co-Operative programs with 
foreign broadcasters have changed the vision many have of the United 
States since September 11. All of these initiatives have been executed 
by the outstanding work of our Embassies abroad.
    Under Secretary Beers is working with the White House and other 
agencies, as well as private and public institutions, to develop 
approaches that will allow the United States to enter a broader 
dialogue with crucial audiences in critical regions. We coordinate 
regularly with Defense, the NSC, and other agencies to develop a 
cogent, coherent message from the United States to foreign audiences. 
We believe a formal structure is needed, however, and are working with 
the White House and the NSC to establish an appropriate mechanism.
    I am a member of the Broadcasting Board of Governors and take an 
active and close interest in its program. Under Secretary Beers is my 
representative to the Board. She and her staff are in daily contact 
with the Board, the broadcasting services (VOA, RFE/RFL and Radio Free 
Europe), and the International Broadcasting Board (IBB).
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski
                              afghan women
    Question. Afghanistan cannot rebuild without the participation of 
its women. Last year, I joined with Senator Hutchison and the other 
women of the Senate in introducing the Afghan Women and Children Relief 
Act. That legislation, signed into law last December, authorized 
education and healthcare assistance to women and children in 
Afghanistan and Afghan refugees.
    What are we doing to help the women and children of Afghanistan 
overcome decades of war and Taliban oppression?
    What programs are underway and what funds have been dedicated to 
implement the Afghan Women and Children Relief Act?
    What has this effort accomplished so far in education? in 
healthcare?
    Are we working with Afghan and international NGOs to provide this 
aid?
    Answer. The worldwide advancement of women's issues is not only in 
keeping with deeply held values of the American people; it is strongly 
in our national interest as well. Peace, prosperity, and stable 
governance cannot exist in the long term in societies where women are 
denied basic human rights and dignities. The United States opposed the 
Taliban's treatment of women for years. The war on terrorism and the 
overthrow of al-Qaida and Taliban forces in Afghanistan have given the 
women of Afghanistan an unique and unanticipated opportunity to reclaim 
their futures. The Bonn agreement signed by Afghan representatives last 
December underscores the centrality of democratic principles and human 
rights in its provisional arrangements, including the protection of the 
rights of women.
    Our delegation to the Commission on the Status of Women sponsored a 
Resolution on women in Afghanistan, cosponsored by 46 other countries, 
welcoming the positive steps the Afghan government has taken to include 
women in the recovery and reconstruction process, but also urging that 
this progress continue and expand. Since the Taliban's defeat, the 
situation of Afghan women has greatly improved. Women are now able to 
travel more freely in the cities, they are beginning to return to work, 
and schools for boys and girls have just reopened. Women now are 
receiving health care deprived to them for years.
    The United States has contributed significant assistance to the AIA 
and the Women's Ministry, contributing $4 million to the UNDP 
Afghanistan Interim Authority Fund (AIAF) to cover the Interim 
Administration's start-up costs for all Afghan ministries.
    With the strong encouragement of the United States, two women were 
appointed to the Afghan Interim Authority: Sima Samar, Vice Chair and 
Minister of Women's Affairs, and Suhaila Siddiq, Minister of Public 
Health. In addition, three women have been appointed to the 21 member 
Commission organizing the Emergency Loya Jirga. Today, Afghan women and 
men are working together as political decision-makers, recovery 
planners, program implementers, opinion leaders, and community 
organizers.
    The Women's Ministry and its Minister, Dr. Sima Samar, now have a 
rehabilitated office space, in a building that once housed the Women's 
Institute. I am happy to give a detailed breakdown of U.S. assistance 
to the Women's Ministry. A percentage of our contribution to the UNDP 
Afghan Interim Authority Fund provided the Ministry of Women's Affairs 
with 2 computers, a satellite phone, office furniture and supplies, and 
a vehicle. It also helped rehabilitate the Ministry's offices and 
assisted in the preparation of the payrolls so that its staff can be 
paid.
    In addition to providing funds for the Women's Ministry through the 
UNDP, the United States has contributed directly to the Ministry's 
refurbishment through the Agency for International Development (AID). 
AID has provided $64,000 towards the renovation of the building, 
including office equipment and technical advisers. Minister Samar is 
now working out of the building. In a meeting on February 19 with U.S. 
Charge Ryan Crocker, Minister Samar noted her pleasure that Women's 
Affairs is the first ministry in the AIA to receive a grant from the 
United States government. Significant renovations were completed by 
March 8, in time to host ceremonial meetings in Kabul on the occasion 
of International Women's Day. Furthermore, I am informed that the 
Government of Belgium has just put $500,000 into the AIA Fund, 
earmarked for the Women's Ministry. The Administration, together with 
the international community, will continue to consider requests for 
assistance from all the Ministries of the Interim Authority.
    Consistent with the provisions of the 2001 Afghan Women and 
Children Relief Act, the United States has provided funds for education 
and health. A significant amount of these funds have been channeled 
through NGOs. On March 23, schools for girls reopened for the first 
time in many years. Many girls and boys entered the classroom for the 
first time.
    To assist in the opening of schools, the United States spent $6.9 
million for almost 10 million Dari and Pashto textbooks for science, 
math, and reading to grades 1-12 and 4,000 teacher-training kits. Five 
million of these books arrived in time for the March 23 opening of 
schools. Working with Vital Voices, an NGO, we have sent fabric and 
sewing machines so that Afghan women can make uniforms for girls to 
wear at school. $200,000 has been obligated to send teams of teacher 
trainers and educators to develop curricula. The United States has also 
provided funds and staff to support UNICEF's vaccination campaign, 
targeting 2.26 million boys and girls. In addition, we have contributed 
$68,000 towards the refurbishment of the women's dormitory at the 
University of Kabul, which will allow women to remain on campus, in a 
secure environment.
    The Department of Labor has approved $1.5 million to assess women's 
skills and provide vocational training to women and $300,000 for 
training and start up wages for women working on the girls' uniforms 
project. USAID is providing $5 million to support the Ministry of 
Health and expand health services nationwide, including maternal and 
child health care services, using local and international NGO partners 
on the ground. American boys and girls, through the Fund for Afghan 
Children, have contributed over $4 million--dollar bill by dollar 
bill--to pay for food, shelter, clothing, healthcare, and toys for 
Afghan boys and girls.
    The Administration has forwarded a request to Congress for 
supplemental funds which would provide additional programs to assist 
women, both directly and indirectly, including for the following:
Education:
    The United States is encouraging education through support for food 
distribution programs. If supplemental funds are approved, children who 
attend school regularly will not only receive meals during the school 
day, but also will receive take-home rations for good attendance. These 
funds will also ensure that the Afghan government will be able to pay 
teachers from the UNDP Afghan Interim Authority Fund. If approved, 
funds would facilitate Fulbright program exchanges to provide 
scholarships for students and exchanges for educators and 
administrators; to partner U.S. colleges and universities with their 
Afghan counterparts; and for English language training. In addition, 
there would be funding for NGOs for education, including encouraging 
literacy.
Health:
    Supplemental funds would enable the Department of State, USAID and 
the Department of Health and Human Services, to assist in restoring 
primary health care services, including maternal health and child care 
services, and train health care providers to ensure that Afghan women--
who have one of the highest maternal mortality rates in the world--once 
again have access to child-birth services and maternal care. Funds 
would also provide for the rehabilitation and integration of land mine 
victims, for polio vaccinations; and for training in nutrition 
surveillance and education.
Economic Participation:
    These funds would allow us to continue and expand a program in 
which we send wheat to bakeries run by widows. These bakeries help feed 
a quarter of Kabul's population. If additional funding is approved, 
funds would be used to provide access to micro-credit; finance small 
women-led businesses; provide vocational training for the disabled, 
including women; assess women's needs and provide women with management 
skills.
Political Participation:
    If Congress approves this request, funds will be available to 
strengthen women's political leadership skills, and to provide training 
in conflict resolution and women's advocacy.
Refugees:
    From fiscal year 2001 through March 1, 2002 we have spent $92.7 
million for Afghan refugees in Pakistan and elsewhere: to build NGO 
capacity, to support female education, provide drought relief, health 
care, including maternal health care, and provide nutrition, water and 
sanitation, mine awareness, civic programs, and teacher training. In 
addition, $52 million will be used to facilitate the repatriation and 
reintegration of refugees and internally displaced persons, and many of 
the programs listed above will be replicated in Afghanistan.
United States-Afghan Women's Council:
    Some of these funds would be used to leverage private support for 
projects which would be undertaken by the United States-Afghan Women's 
Council. The Council will facilitate partnerships between United States 
and Afghan institutions and will mobilize private resources to advance 
women's interests. Initially, the Council will focus on education and 
health programs and micro-credit for women, and encourage women's 
participation in the political and economic sectors.
                peacekeeping and security in afghanistan
    Question. The people of Afghanistan need security to overcome 
decades of war and oppression. Training and equipping Afghan forces--
which tend to be regional and factional and undependable in their 
loyalties--may contribute to the problem rather than solving it. 
Interim Afghan Administration Chairman Hamid Karzai has sought 
increased international forces to provide security as his country 
recovers from decades of war and Taliban rule. Why has the United 
States resisted Karzai's calls for an expanded international security 
presence, even though other nations are prepared to take the lead in 
this peacekeeping mission?
    Answer. There are at least three reasons for the USG's decision not 
to support ISAF expansion at this time. First, information from U.S. 
military and intelligence sources indicates that there is not currently 
a need to expand the international security presence in Afghanistan.
    Second, it is important to realize that the United States and its 
coalition allies already have a military presence in several locations 
around the country, including at least a small detachment in every 
major city. In the course of conducting their primary missions, the 
presence of these forces has a secondary, stabilizing, effect on 
regional security. Thus, to expand ISAF to these same areas would be in 
many ways redundant, and potentially even disruptive to co-located OEF 
forces.
    Third, other nations have not expressed any willingness to lead an 
expanded ISAF peacekeeping mission. Turkey is the most obvious 
candidate to take over ISAF command from the British, having indicated 
its interest in this role several months ago. Nevertheless, the Turkish 
government has yet to make a definitive decision to command ISAF. One 
of the legitimate issues weighing on Turkish deliberations is concern 
over the possible geographic expansion of the mission. To address these 
concerns, we have assured the Turks that their commitment would be only 
to Kabul.
    Question. Why has the United States opposed making the 
International Security Assistance Force (ISAF) a United Nations 
peacekeeping operation? Who is paying for it, since it's not an 
assessed U.N. peacekeeping operation?
    Answer. In order to prosecute the war on terrorism with the 
greatest possible efficiency and success, the USG believes that CENTCOM 
should have operational authority over ISAF for the purpose of de-
conflicting ISAF and OEF operations in Afghanistan. The USG believes it 
would have been very difficult for the U.N. to place a peacekeeping 
operation under U.S. authority in this manner. Therefore, the USG 
favored establishing ISAF as a non-U.N. force. Other key U.S. allies 
agreed with this reasoning.
    The current participants in ISAF are operating on a self-financing 
basis. A U.N. trust fund has been established, however, to accept 
contributions that would pay the operational costs of any future 
participants who cannot finance themselves.
    Question. How will we help Afghanistan's leaders overcome tribal 
conflicts between Afghan forces which appear to be a primary threat to 
stability and security in Afghanistan?
    Answer. The USG is helping Afghanistan's leadership address the 
security problem posed by tribal conflict in several ways. First, we 
are acting on the President's commitment to help the Afghans build a 
new military that will be loyal to the central government. U.S. forces 
will begin training the first elements of a new Afghan army in about a 
month. As it grows in size, equipment, and proficiency, this force will 
enable the Afghan government to broker and enforce the resolution of 
tribal conflicts from a position of strength.
    A second related initiative is the financial support we are giving 
to demobilization programs. These plans, which are being developed by 
the U.N.'s International Organization for Migration (IOM), will combine 
education, training, job creation, and other benefits to encourage the 
soldiers in tribal armies to return to civilian life. This will reduce 
the potential for violent conflict between tribal leaders.
    Third, the United States, along with many other members of the 
international community, is channeling financial assistance to the 
Afghan central government. This support strengthens Afghan government 
ministries, enhances the country's capacity to manage its own internal 
affairs, and gives the central authorities added financial influence 
over regional leaders.
    Finally, the United States supports the Afghan national leadership 
through political and diplomatic means. The USG has given high profile 
public support to members of the Afghan central government in its 
diplomatic exchanges, and insists upon the political prerogatives of 
central administration officials over regional leaders. These actions 
enhance the influence that Afghanistan's national leaders wield over 
tribal power brokers and strengthen the government's hand in cases of 
tribal conflict.
                      nuclear posture review (npr)
    Question. The contents of the Nuclear Posture Review, provided to 
Congress January 8, have recently become public.
    Why does the list of target countries include Russia, which 
President Bush says is now our friend?
    Answer. You are correct that Russia is no longer our adversary, as 
President Bush has stated on numerous occasions. For the first time, 
the NPR reflects that we are no longer in the Cold War. The NPR directs 
a major shift in strategic policy: the United States will no longer 
plan, size, or sustain its forces as though Russia presented merely a 
smaller version of the threat posed by the former Soviet Union. The NPR 
makes it clear that treating Russia as if it were the Soviet Union is 
inconsistent with today's realities and the desire to develop a new 
strategic relationship. Characterizing Russia as a ``potential'' 
contingency is a significant step toward a more cooperative 
relationship while still recognizing that the United States still has 
concerns with Russia and its formidable nuclear forces and uncharted 
future. While the NPR deems conflict with Russia extremely unlikely in 
the foreseeable future, it is also true that Russia is the only other 
country in the world with nuclear force levels comparable to that of 
the United States. Prudent planning dictates that we take that fact 
into account in the event of currently unforeseen changes in political 
circumstances in Russia.
    Question. How would we react if Russia decided to put nuclear 
warheads taken out of service into storage rather than destroying them?
    Answer. In essence, this is what we and Russia both did when 
implementing the INF and START Treaties, since INF and START did not 
seek to require destruction of the nuclear payloads on INF and START 
missiles. It is important to note that no arms control agreement 
between the United States and Russia has ever called for the 
destruction of warheads or limits on either nation's nuclear 
stockpiles. Beyond that, the United States and Russia have vastly 
different practices when handling nuclear warheads. The United States 
has no weapons production capability and must rely on its stockpile to 
respond to potential contingency and to maintain its forces, i.e., to 
provide insurance against a problem of safety and reliability of an 
entire class of warheads.
    Russia, on the hand, has a large, active production complex and 
builds nuclear warheads to replace those that have reached the end of 
their relatively shorter service life. Russia has thousands of warheads 
that are currently in storage, and a large number of them awaiting 
elimination. In fact, the United States is assisting Russia in 
strengthening the security of its nuclear weapon storage sites.
    Question. Why does the list of target countries include states 
which we do not believe have nuclear weapons?
    Answer. It is important to note that the NPR is not a targeting 
document, nor does it provide operational guidance on nuclear targeting 
or planning. What the NPR does, however, is shift the planning of 
America's strategic forces from a threat-based to a capabilities-based 
approach. In light of terrorists or rogue states armed with weapons of 
mass destruction, whether they be nuclear, chemical, or biological, we 
will need a range of capabilities to assure friends and foes alike of 
U.S. resolve. The new U.S. strategic posture will consist of nuclear 
and nonnuclear offensive systems, active and passive defenses, and a 
revitalized defense infrastructure. U.S. forces must pose a credible 
deterrent to potential adversaries who have access to modern military 
technology, including NBC weapons and the means to deliver them. Also, 
while this NPR focuses more sharply on WMD threats posed by rogue 
states than have past reviews, the record is clear that past 
Administrations have recognized the need for deterrence to apply to 
such states.
    Question. Are we really treating nuclear weapons--normally 
considered weapons of mass destruction--as just another form of 
conventional warfare? Don't you think it's important to maintain a 
clear dividing line between conventional weapons and nuclear weapons?
    Answer. Political leaders and military planners alike understand 
nuclear weapons to be qualitatively different from conventional 
weapons. By outlining a defense strategy that increases the role of 
advanced conventional strike forces, missile defenses, and intelligence 
capabilities, the NPR places emphasis on alternatives to relying upon 
nuclear weapons alone for deterrence. It is designed to provide the 
President with a broad array of options to address a wide range of 
contingencies, and paved the way to his decision to deeply reduce the 
number of operationally deployed U.S. strategic nuclear weapons.
    Question. The Nuclear Posture Review talks about the possibility of 
using nuclear weapons ``in the event of surprising military 
developments.'' What does that mean?
    Answer. The NPR deals with planning our future strategic forces and 
their capabilities. It is not a targeting document, nor does it provide 
operational guidance on possible nuclear use. Thus, the section of the 
NPR to which you refer is discussion about the contingencies against 
which we must maintain nuclear capabilities. Its point is to emphasize 
the uncertainties of today's world by underlining that some dangers are 
immediate and well-recognized; some are plausible, but not immediate; 
and some are unpredicted, but ones that could arise suddenly. The 
conclusion drawn by that section is that present capabilities need to 
be maintained against immediate dangers, along with a small margin in 
the event of a surprise development. However, dangers that do not pose 
an immediate threat do not require immediate capabilities, and 
therefore would require only a responsive capability to augment the 
operational force over a period of weeks, months or years. This 
approach allowed the NPR to lower the size of our operational 
requirements and supported the President's goal of reducing our nuclear 
requirements to the lowest possible level consistent with our needs.
    Question. What is Administration policy on first use of nuclear 
weapons? Wouldn't the development of new, smaller nuclear weapons 
suggest a readiness to use them in conventional conflicts?
    Answer. The long-standing policy of the United States has not 
changed regarding the first use of nuclear weapons. There has been no 
change in U.S. negative assurances policy toward non-nuclear weapon 
states to the NPT. The United States will do whatever is necessary to 
defend America, our forces abroad, as well as our friends and allies. 
While the NPR does direct attention to deficiencies in our nuclear 
warhead infrastructure, the NPR does not call for the development of 
new nuclear weapons design.
    Question. How would the United States react if other countries--
like Russia or China--would adopt a similar policy, with the United 
States on its list of targets?
    Answer. The question assumes that Russia and China are on a United 
States ``list of targets.'' As the Administration has made clear, we, 
like our predecessors, do not target any country on a day-to-day basis. 
The NPR focuses U.S. nuclear force planning requirements on needed 
capabilities for deterrence and defense rather than on assumptions 
about specific threat countries.
    Obviously, Russia and China have, for many years, possessed the 
forces and, we assume, other technical capabilities needed to strike 
the United States with strategic nuclear weapons. Nonetheless, 
regardless of whether the United States is targeted by other countries, 
the conclusions of the NPR remain valid. What is important, as 
President Bush has made clear, is that his Administration will pursue 
policies that reflect today's world and that put behind us the hostile 
relationships based on mutual assured destruction of the Cold War.
    Question. Won't this Nuclear Posture Review hinder cooperation 
among member states to prevent non-state actors--terrorist groups like 
Al Qaida--from acquiring and using weapons of mass destruction?
    Answer. We believe that the four goals of the NPR will help ensure 
that such a scenario will not happen, The goals of the NPR are to: (1) 
assure allies and friends of our continued cooperation in maintaining 
our military commitments; (2) dissuade adversaries that could threaten 
U.S. interests; (3) deter threats against the United States and its 
allies; and (4) defeat any adversary and defend against attack should 
deterrence fail. We view these goals as completely complementary with 
and mutually supportive of diplomatic, political and other coalition 
efforts to prevent or dissuade states or terrorist entities from 
acquiring or using WMD.
                          peacekeeping funding
    Question. The fiscal year 2003 budget request significantly reduces 
funds for U.N. Peacekeeping.
    In the present international environment, does it make sense to 
assume that there will be no new U.N. peacekeeping operation in fiscal 
year 2003?
    Is it realistic to assume to predict that all but 2 ongoing 
operations will be reduced in size and cost?
    If these assumptions prove unrealistic, will the Administration 
block U.N. Security Council authorization for new or expanded 
peacekeeping operations? Or will you seek emergency supplemental 
appropriations?
    Answer. We believe it is realistic that costs will decrease from 
fiscal year 2002 to fiscal year 2003. UNMIBH (Bosnia) is projected to 
be completed with fiscal year 2002 funding, while UNTAET (East Timor) 
and UNAMSIL (Sierra Leone) are projected to downsize in fiscal year 
2003. Further, the U.N. peacekeeping assessment rate for the United 
States will decrease by a small amount and we estimate that there will 
be small increases in efficiency.
    We have not attempted to project all possible new missions that 
could come along or ones that suddenly and unexpectedly begin to 
significantly expand. Should these things occur, we would notify 
Congress.
                     resynchronization of u.n. dues
    Question. The United States always pays its United Nations dues 
late. This delay is reflected as U.S. arrears to the U.N., which have 
contributed to opposition to U.S. positions.
    Last year, this Subcommittee--thanks to Chairman Hollings' 
leadership--provided the funds for the United States to resynchronize 
payment of dues with the U.N.'s calendar assessment schedule. 
Unfortunately, we were not able to sustain that funding in Conference.
    Wouldn't it help achieve a better relationship with the U.N. and 
other member states for the United States to pay its dues on time?
    Why doesn't the budget request include any funds toward dues 
resynchronization?
    Answer. We believe we would achieve a better relationship with the 
U.N. and other member states were we to pay our assessments to the U.N. 
on time. The same holds true for the eight other fully deferred 
organizations. Our budget request does not include funds to 
resynchronize our payments as that would add over $600 million to our 
request. For the U.N. alone it would cost some $280 million in fiscal 
year 2003 to reverse the deferred payment. We hope to address this 
situation in a future budget.
                 united nations population fund (unfpa)
    Question. The United Nations Population Fund provides critical 
family planning assistance. Could you assure us that the Administration 
will contribute to the United Nations Population Fund (UNFPA) the full 
$34 million allocated by Congress in the fiscal year 2002 Foreign 
Operations bill? Why has this been delayed?
    Answer. The Administration continues to broadly support the work of 
UNFPA and specifically, its response to the emergency needs of 
vulnerable populations, such as in Afghanistan. However, we remain 
mindful of our obligations under the Kemp-Kasten amendment to the 
annual Foreign Operations, Export Financing and Related Programs 
Appropriations Act. This legislation provides that no U.S. funds can go 
to an organization that supports or participates in the management of a 
program of coercive abortion or involuntary sterilization.
    In light of recent allegations of the Fund's complicity in coercive 
family planning practices in China, the Administration is reviewing the 
issue of UNFPA funding. While we are aware of UNFPA's response to these 
allegations that it is not involved in coercive practices and is, in 
fact, supporting a program that stresses the importance of voluntarism 
and non-coercion, it is incumbent upon us to review the allegations. 
The State Department is expediting the launch of an assessment team to 
China to look into the matter.
                        arabic voice of america
    Question. Arab Public Opinion about the United States is often 
rooted in beliefs learned from biased and inaccurate press reports. We 
need to stop broadcasts, which incite violence, replace hate with 
reliable, unbiased information, and provide a forum to formally present 
U.S. policy directly to the people.
    How do you plan to improve our communication with the Arab world?
    What progress has been made in expanding and improving Arabic VOA 
broadcasts?
    Could you assure the Committee that dedicated VOA personnel in 
Washington won't lose their jobs as Arabic VOA broadcasts are 
strengthened?
    Answer. Well before September 11, we recognized that we had lost 
crucial audiences in Arab and many Muslim majority states. The 
Department began working last year to rebuild outreach programs and 
avenues to these audiences. Since September 11, this program has become 
even more critical.
    U.S. officials and experts appear on Arab media with greater 
frequency; we have extended our public diplomacy outreach programs 
throughout the Arab world, often with impressive results. The 
Department is preparing to launch expanded scholarship, professional 
training, and other exchange initiatives, and we are increasing our 
public diplomacy budgets and personnel in the Middle East to the extent 
that resources allow.
    We have carried out extensive research into attitudes and 
perceptions in the Middle East and other Muslim majority states, such 
as Indonesia. We are engaged in a major effort to understand how the 
United States is perceived and what steps we must take to moderate 
attitudes and convey an objective vision of American values and 
society. Under Secretary of State for Public Affairs and Public 
Diplomacy, Charlotte Beers, is working with the White House and other 
agencies, as well as public and private institutions, to develop 
approaches that will allow the United States to establish a wider 
dialogue with younger, broader audiences.
    VOA Arabic service has done well since September 11. It expanded 
broadcasts to eleven hours per day and brought our message to millions. 
However, transmission difficulties and format constraints limit its 
audience. The Department has supported the new format, AM and FM 
transmitted, Middle East Radio Network (MERN) now undergoing trials. We 
believe that the MERN can be an instrument that will reach the broader, 
younger audience that is crucial to our current and future 
relationships in the region.
    Regarding the establishment of the MERN and the future employment 
status of current VOA Arabic service employees, it is beyond my mandate 
to give the Committee a final assessment of these concerns. I know that 
VOA Director Robert Reilly has taken energetic steps to address these 
anxieties.
               funding for the fight against global aids
    Question. Last year, the President pledged a $200 million ``down 
payment'' to the global fight against AIDS. In the meantime, AIDS has 
surpassed malaria as the leading cause of death in sub-Saharan Africa, 
and it kills many times more people than Africa's armed conflicts. 
UNAIDS estimate that in the last year, 3.4 million new HIV infections 
have occurred. Why has President Bush not proposed a greater increase 
in funding for the fight against Global AIDS?
    Answer. The United States is the global leader in the fight against 
HIV/AIDS. In fiscal year 2002, the Bush Administration will dedicate 
nearly $1 billion to the international fight against HIV/AIDS, roughly 
one-third of all international spending against the disease. This does 
not include the amount dedicated to domestic research and development 
programs, programs that have direct benefits for the international 
community in the form of new drugs and other medical and scientific 
advances. The fiscal year 2003 budget request of $1.1 billion 
represents a 53.9 percent increase over fiscal year 2001 spending on 
international AIDS.
    The majority of these funds are channeled through bilateral 
programs. President Bush pledged $200 million and Congress appropriated 
an additional $100 million for the new Global Fund to Fight AIDS, 
Tuberculosis and Malaria. This represents over a third of the funds 
pledged for 2001-2002 and demonstrates U.S. leadership in the global 
fight against these diseases. President Bush has requested an 
additional $200 million for the Fund in his fiscal year 2003 Budget, 
bringing the total U.S. pledge to $500 million. In a speech to the 
Inter-American Development bank in March 2002, President Bush said that 
he will work with Congress to increase the U.S. commitment to the Fund 
as it finalizes its organization, develops a strategy, and shows 
success.
    Question. How do you expect the international community to come up 
with the $10 billion or even $20 billion per year public health experts 
estimate addressing HIV/AIDS, malaria and TB will cost if the United 
States doesn't contribute its share?
    Answer. While there have been varying estimates about the amount 
needed to address HIV/AIDS, malaria and TB, there has never been an 
expectation that the Global Fund to Fight AIDS, Tuberculosis and 
Malaria would represent the only funding mechanism. Most estimates 
assess the need for increased global spending, which includes resources 
from both developing and developed countries. Much help will continue 
to flow through already existing bilateral and multilateral mechanisms. 
The Fund is uniquely placed to leverage further contributions, 
including those from the private sector.
                             global hunger
    Question. The U.N. Food and Agriculture Organization estimates that 
815 million people, mostly in developing countries, suffer from hunger 
and malnutrition. 24,000 people die each day of hunger-related causes. 
Yet the Administration's budget request effectively reduces the total 
amount of food aid America will provide. Why are we cutting back in our 
fight against global hunger?
    Do you believe there is a reduced need for U.S. food aid, as one 
Administration official recently suggested?
    Answer. Reducing hunger around the world is one of this 
Administration's priorities, and the President is in fact proposing 
increases in key resources to meet this objective. The Administration's 
fiscal year 2003 request for food aid appropriations of $1.345 billion 
under Public Law 480, both Titles I and II, constitutes a $225 million 
increase over the fiscal year 2002 level of $1.120 billion. This 
increase will help offset a large decline in section 416(b) surplus 
food resources, which are unappropriated allocations, and 
inconsistently available historically. This shift toward a more 
sustainable, on-budget allocation of food aid resources, which Public 
Law 480 represents, and away from the commodity surplus driven 
alternative of section 416(b), will help ensure that the United States 
continues to do its part in meeting global needs for food aid.
    The United States consistently provides about 50 percent of food 
aid worldwide, far more than any other donor. The Administration 
remains committed to maintaining U.S. leadership in supplying food aid 
to vulnerable people. The Administration is proposing to adjust the 
delivery of international food aid programs. This plan will: (1) 
improve feeding effectiveness; (2) reform administration and reduce 
duplication; and (3) ensure more reliable food aid by reducing the 
year-to-year reliance on surplus commodities. Reducing the reliance on 
surplus U.S. commodities will increase the predictability of supply for 
hungry populations overseas and non-profit organizations that serve 
them. The fiscal year 2003 President's budget reflects a Public Law 480 
Title II discretionary funding request of $1.185 billion, $335 million 
greater than the original fiscal year 2002 enacted level. This will 
help offset decreased mandatory programs. The U.S. Department of 
Agriculture's (USDA) Bill Emerson Trust will be used to provide food 
aid if dire emergency needs.exceed programmed resources.
    USAID is also working to combat hunger and malnutrition through new 
agriculture and nutrition strategies. Policy reforms and agricultural 
research, including research in biotechnology, new information 
technologies, increased international trade and investments in 
sustainable agriculture, sound environmental management, along with 
better focused mother and child health and nutrition programming, 
present hope for addressing food problems worldwide. A continued 
emphasis on conflict prevention will also help to alleviate one of the 
principal causes of growing food insecurity.
    USAID has committed $30 million in fiscal year 2001 funds to launch 
``Quick Start'' programs in Africa designed to boost agricultural 
development immediately. The fiscal year 2003 USAID Congressional 
budget justification, in recognition of the role that acute hunger and 
malnutrition play in exacerbating individual suffering and impeding 
economic development, calls for increasing agricultural development 
funds by 29 percent. Funding for agricultural development in the 
Development Assistance (DA) account alone is projected to rise to 
$260.5 million from $200.4 million in fiscal year 2002, as part of a 
proposed ten percent increase in the overall development assistance 
budget to $2.74 billion in fiscal year 2003.
    USAID is also pursuing a more aggressive strategy to expand basic 
education. Development Assistance funding for basic education will 
increase from $103 million in fiscal year 2001 and $150 million in 
fiscal year 2002 to $165 million in fiscal year 2003. These efforts, 
focused in large part on youth, will equip people with better farm 
skills and enable them to market their produce, earning higher incomes, 
and thereby reducing poverty and hunger.

             BREAKDOWN OF TITLES I AND II OF PUBLIC LAW 480
                        [In millions of dollars]
------------------------------------------------------------------------
                                                             Fiscal year
                                  Fiscal year    Increase/       2003
                                      2002       decrease      request
------------------------------------------------------------------------
Title I.........................        175.0        (15.0)        160.0
Title II........................        850.0        335.0       1,185.0
                                 ---------------------------------------
      Total.....................  \1\ 1,120.0        225.0       1,345.0
------------------------------------------------------------------------
\1\ Includes $95 million from Emergency Response Fund Supplemental.

                            nato enlargement
    Question. The security and stability of the Baltic region is vital 
to the peace of Europe and the transatlantic community. Security and 
stability in the region is best achieved through Baltic membership in 
NATO. What progress are you making in building support among our NATO 
allies to reach consensus in inviting the Baltic States and other 
qualified countries to join NATO at the summit later this year?
    Answer. Our goal is to build a strong Allied consensus on specific 
candidates by Prague. The President has stated that he believes all of 
Europe's new democracies, from the Baltics to the Black Sea, should 
have the same chance to join the institutions of Europe as the older 
democracies.
    All Allies support further enlargement and a broad consensus is 
forming behind President Bush's vision of the most robust round 
possible, for all aspirants that are ready to assume the 
responsibilities of membership. We have encouraged Allies not to 
advocate specific candidates until we can develop an agreed Alliance 
consensus. Under Secretary Grossman will be travelling to many NATO 
capitals in Europe from April 15-19 to consult further on a common 
Allied approach to the upcoming Prague NATO summit. Enlargement will be 
a key focus of this trip.
    Allies have agreed that the question of ``who'' should be invited 
should not be addressed until after the May ministerial at Reykjavik. 
Instead, we are seeking to keep aspirant countries focused on meeting 
their reform goals through the Membership Action Plan and avoid early 
and conflicting commitments among Allies. The Baltic states have made 
impressive progress in their preparations for membership, and we have 
urged them to intensify these efforts to ensure their candidacies are 
as strong as they can be when decisions are made on new members next 
fall.
                                 cyprus
    Question. Last year, you told the Foreign Minister of Cyprus that 
the United States will also ``remain engaged in efforts to facilitate a 
just and lasting settlement of the Cyprus issue.'' Other than 
supporting the U.N. talks, how are we remaining engaged on this 
critical human rights issue? What are the prospects?
    Answer. We strongly believe that the current direct talks between 
the leaders on the island, which began on January 16 under the auspices 
of the U.N., are the best chance in a long time to reach a solution to 
the Cyprus problem. The prospects for success depend primarily upon the 
efforts of the two parties. Achieving a just and comprehensive 
settlement is the only way to resolve this longstanding issue, and 
therefore, we are focussed on providing diplomatic support to the 
direct talks on a number of fronts.
    First, we have strongly supported the U.N. Secretary General's Good 
Offices Mission, and its efforts to achieve a comprehensive settlement, 
through numerous U.N. Security Council (UNSC) resolutions and press 
statements.
    Second, through our Ambassador on the island, Donald K. Bandler, we 
are reiterating directly to the leaders and their delegations to the 
talks our support of the talks, and the importance of seizing this 
opportunity to reach a settlement.
    Third, through our Special Cyprus Coordinator Thomas G. Weston, we 
are reinforcing with the leaders on the island and the Governments of 
Greece and Turkey our interest in the success of the ongoing 
negotiations.
    Fourth, and also through our Special Cyprus Coordinator, we are 
working with the European Union and its member states to ensure that 
Cyprus's EU accession continues to be an incentive to a comprehensive 
settlement.
    Should a settlement be achieved, we would work with USAID to ensure 
that program activities funded by $15 million in fiscal year 2002 
Economic Support Funds support implementation of a settlement.
                            embassy security
    Question. The Department of State has stepped up security in our 
embassies and received security supplemental funds for security last 
year. This year's request includes $1.3 billion for fiscal year 2003 
embassy security measures.
    How will the State Department use these funds to ensure that we 
protect our men and women serving our country at embassies and 
consulates around the world?
    Answer. The key objectives of the original 1999-2000 Emergency 
Security Appropriation (ESA) were to quickly improve the security of 
our threatened embassies and consulates and to begin the longer-term 
objective of replacing those facilities that cannot be made adequately 
secure.
    The Department's fiscal year 2003 request of $1.3 billion includes 
$755.0 million in the Embassy Security Construction and Maintenance 
(ESCM) appropriation and $553.0 million in the Diplomatic and Consular 
Programs (D&CP) appropriation.
    The ESCM request includes $608.6 million in capital security 
funding for the design and/or construction of the next tranche of the 
most urgent, security-driven projects. The fiscal year 2003 projects 
will be chosen from among a list of potential projects that include: 
Astana, Kazakhstan (dependent on Congressional support to open a 
diplomatic office); Athens, Greece; Bamako, Mali; Beijing, China; 
Bridgetown, Barbados; Frankfurt, Germany; Harare, Zimbabwe; Kingston, 
Jamaica; Moscow, Russia; and Tirana, Albania. The $608.6 million also 
includes funding to acquire additional sites for which design and/or 
construction will begin in the outyears.
    The ESCM request also includes $146.5 million for compound security 
upgrades that include the construction of critical perimeter security 
projects and the installation of forced entry/ballistic resistant roof 
hatches, vault doors, and power-assisted vehicle barriers.
    While specific security measures vary by post, the $553.0 million 
in the D&CP appropriation will be used to continue activities designed 
to:
  --Enhance physical security at U.S. Missions with additional barriers 
        and reinforced perimeter walls;
  --Install closed circuit TV cameras and video recording equipment;
  --Provide bomb detection equipment, armored vehicles, walk through 
        metal detectors, and x-ray equipment;
  --Fund access card control systems and shatter resistant window film;
  --Install additional alarm and public address systems to alert 
        personnel to impending emergency situations;
  --Facilitate mandatory inspections of all vehicles entering U.S. 
        diplomatic facilities;
  --Increase host government security presence and support to our 
        facilities worldwide;
  --Field aggressive surveillance detection programs at almost all of 
        our diplomatic posts;
  --Expand training in the areas of Anti-Terrorism Assistance; 
        Diplomatic Security Special Agents and Regional Security 
        Officers; and crisis management;
  --Continue a chemical biological weapons countermeasures program 
        based upon education, training, and equipment;
  --Strengthen our working relationship with the intelligence 
        community;
  --Fund, hire, and train new Diplomatic Security special agents, 
        security engineers, security technicians, diplomatic couriers, 
        security officers, and civil servants.
    Fiscal year 2003 is the third year of the Department's multi-year 
plan to complete technical and physical security upgrades for stronger 
perimeter and compound security at our embassies and consulates 
worldwide. Additionally, armored vehicles, technical surveillance, and 
countermeasures equipment, which were sent out to the field following 
the East Africa bombings, need maintenance and eventual replacement.
    The U.S. Agency for International Development is requesting $82 
million in its fiscal year 2003 budget request for construction of 
collocated USAID facilities. Their request is contained in the fiscal 
year 2003 Foreign Operations budget request.
           compensation to victims of international terrorism
    Question. Victims of the September 11 attacks on America--at the 
World Trade Center, at the Pentagon, and on the flight which went down 
in Pennsylvania--will receive compensation allocated by a Special 
Master under legislation passed last year.
    Do you believe the American victims of the Embassy bombings in Dar 
Es Salaam, Tanzania and Nairobi, Kenya--victims of the same terrorist 
group, most of whom were serving their country--deserve similar 
treatment?
    Answer. The Administration is looking very closely at the entire 
issue of terrorism victims' compensation. Consistent with section 626 
of the fiscal year 2002 Commerce Justice, State Appropriations Act, the 
State Department has developed a draft legislative proposal to 
compensate all U.S. victims of international terrorism, including those 
who were killed or injured in the East Africa bombings. This draft 
proposal was submitted in November to the Office of Management and 
Budget for inter-agency review and clearance. Department 
representatives have had several discussions with OMB and the White 
House concerning the proposal. We are hopeful that the inter-agency 
review will be completed shortly and that the Administration will 
submit a legislative proposal to the Congress this session.
   center for antiterrorism and security training (cast) at aberdeen 
                          proving ground (apg)
    Question. What are the benefits of establishing CAST for the 
training of Diplomatic Security officers and for the Antiterrorism 
Training Assistance (ATA) programs?
    Could you explain to the Committee the advantages of the Aberdeen 
Proving Ground site selected for the establishment of CAST?
    Would it contribute to our efforts to secure international 
cooperation against terrorism if the establishment of CAST at Aberdeen 
Proving Ground could be accelerated?
    Answer. Antiterrorism and security training is conducted at seven 
separate training locations nationwide, often using ad-hoc 
arrangements. The CAST would greatly help meet the demands for 
facilities to train additional foreign security officials required to 
counter the increased terrorist threat. Currently, some training 
courses are delayed for months because of a shortage of appropriate 
facilities. Additionally, the concept maximizes resource use by 
alternate scheduling of antiterrorism training and agent training at 
the same facility. The proximity to Washington, D.C. will permit use of 
presenters from multiple agencies and disciplines and trainee access to 
multiple resources in the area, which will pay additional dividends.
    The CAST will provide a state-of-the art facility, replacing 
inadequate or antiquated facilities; for example, it will include all 
weather small arms ranges; ``long gun'' ranges, tactical urban mock-up 
training facilities for counter-assault training; commercial aircraft/
mock airport facilities; defensive/protective driving tracks; 
explosives demolition ranges; maritime security training, and chem-bio 
training facilities.
    The events of September 11 further expanded the focus of 
Antiterrorism Training Assistance (ATA) outreach to newly identified 
frontline nations and added course offerings in specific areas dealing 
with countering and responding to terrorist incidents. Presently ATA 
trains about 3,000 foreign law enforcement professionals annually. When 
fully operational, the CAST will accommodate as many as 7,000 foreign 
counterparts. The Department is making every effort to accelerate the 
CAST to contribute to our effort in preparing and securing 
international cooperation against terrorism.
    CAST will require a variety of dedicated training facilities, 
including as an example, munitions disposal training, large caliber 
weapons training, and defensive driving. Life-safety issues, as well as 
community residents' concerns, preclude such training being conducted 
near residential areas. The Aberdeen Proving Ground provides an 
environment and a footprint which will accommodate each of the 
program's requirements. Further, the APG has an existing infrastructure 
that would help bring CAST on line more quickly, as the Department 
moves to meet requests for training.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
                  colombia: human rights certification
    Question. Can you assure me that you will personally satisfy 
yourself that these conditions--the intent of our law--have been met, 
and that these human rights problems are being addressed far more 
effectively than they have been to date?
    Answer. Yes. As the legislation requires, I will personally review 
the conditions for certification. I have not yet made the certification 
that the Colombian Armed Forces have met the human rights conditions 
set forth in Section 567(a) of the Kenneth M. Ludden Foreign 
Operations, Export Financing, and Related Programs Appropriations Act, 
2002 (Public Law 107-115) (FOAA).
    The Department of State is now evaluating the information it has 
received on this subject, including data from human rights 
organizations which have been consulted by both the Department and our 
Embassy in Bogota, in order to provide a recommendation in the near 
future to me for my determination. The importance with which we view 
the question of human rights in Colombia is reflected in the recent 
travel to Colombia of Deputy Assistant Secretary Struble of the Western 
Hemisphere Affairs Bureau and Deputy Assistant Secretary Carpenter of 
the Bureau of Democracy, Human Rights and Labor for seeking additional 
information and discussing our concerns with senior leaders of the 
Colombian government and military.
    If I determine and report to Congress that the conditions 
established in the legislation have been met, based on the information 
presently under review, that report will also provide the background 
and justification upon which we would base such a determination.
    Human rights are and will remain central to our bilateral relations 
with Colombia. We will continue to engage the Government of Colombia on 
concrete measures it should take to improve its human rights 
performance, particularly the human rights record of the Colombian 
Armed Forces.
                              middle east
    Question. At a hearing in the Foreign Operations Subcommittee last 
week, I asked Assistant Secretary Lorne Craner about Israel's use of 
U.S. military equipment.
    According to the State Department's human rights report, Israeli 
and Palestinian security forces have committed ``numerous serious human 
rights abuses.''
    I sent several letters to our Embassy in Israel asking if they had 
determined if these types of incidents involved units of security 
forces that received aid from the United States. I also asked the 
Embassy what steps have been taken to ensure that our aid is used 
consistent with the Leahy human rights law.
    Other than one reply that essentially said ``we're looking into it 
and we'll get back to you'', I have not received an answer to my 
letters. Since then, the situation has become far worse. I would 
appreciate your help in getting a response to my inquiries.
    It is my understanding that we do not provide any aid to the 
Palestinian Authority. Are you confident that the Leahy law is applied 
properly with respect to our military aid to Israel?
    Answer. President Bush and I have publicly criticized certain 
actions of the Israeli security forces. The 2001 Country Reports on 
Human Rights Practices notes ``numerous serious human rights abuses'' 
perpetuated by Israeli security forces during the year.
    We share the goal of the Leahy Amendment to hold foreign security 
forces and governments accountable to international human rights 
standards. Our goal is to carry out security and other foreign 
assistance programs in a manner consistent with human rights standards. 
Embassy Tel Aviv has been operating under standing instructions to 
monitor possible human rights violations by Israelis and Palestinians 
and to report back daily to the State Department. For preparation of 
the annual human rights reports, the Embassy also reports information 
on alleged violations of human rights to the Department.
    In writing, the Department instructs posts worldwide on procedures 
to ensure appropriate compliance with the Leahy Amendment. We currently 
are in the process of updating and reviewing this standing guidance on 
implementation of the Leahy Amendment for posts worldwide, including 
ensuring that the procedures used serve the goals of transparency and 
accountability with respect to U.S. assistance to foreign security 
forces. Updated guidance will be sent to posts worldwide, including 
Embassy Tel Aviv, upon completion of the update and review process. The 
Department would be willing to brief you or your staff on these 
procedures once they are in place.
                                 serbia
    Question. March 31st is the deadline for Serbia to meet conditions 
in our law on compliance with the War Crimes Tribunal.
    Last year at this time, they arrested Milosevic. Since then, very 
little has happened. According to the Hague prosecutor, they are 
falling short in just about every respect. I know you care about this, 
but I don't want anyone to be surprised. We are not going to support 
continued aid to Serbia if they do not turn over these indicted war 
criminals and give the prosecutors access to documents and other 
evidence.
    A couple of weeks ago Senator McConnell and I sent Prime Minister 
Djindjic and President Kostunica a letter, spelling out what we believe 
to be the minimum that needs to happen to comply with our law. You 
should have a copy, and if you have not seen it I will get one to you. 
I hope you will used every bit of leverage and influence you have to 
impress upon these two leaders what needs to be done. Can you comment 
on where this stands?
    Answer. Although there has been progress over the past year in each 
of the areas required for certification, I have not yet made a decision 
on whether or not to certify Serbia under section 584. We have 
repeatedly made clear to Yugoslav and Serbian authorities that they 
have an international obligation to fully cooperate with ICTY and that 
the USG expects actions to meet those obligations.
    We will continue to press for full cooperation and to urge our 
European allies to look closely at the FRY's continuing record on these 
issues, including ICTY cooperation, as they consider Council of Europe 
membership, as well as Partnerships for Peace (PfP) membership.
                                 ______
                                 
               Questions Submitted by Senator Judd Gregg
                          general state issues
    Question. Mr. Secretary, with all the advance in technology--
particularly in the area of communications--have you considered whether 
certain core State functions could be brought back to Washington from 
our embassies abroad?
    Answer. The Department of State relies heavily on centralizing a 
variety of administrative, consular, and some policy functions (e.g., 
Labor Attaches, science hubs) in the United States. Technology plays a 
critical role in this effort.
    We have the following U.S. regional centers:
  --The Fort Lauderdale Regional Center provides support services to 
        U.S. posts throughout the Western Hemisphere.
  --The National Visa Center in Portsmouth, New Hampshire and the 
        Kentucky Consular Center in Williamsburg, Kentucky both perform 
        a variety of consular work traditionally carried out at 
        individual posts.
  --The Charleston Financial Service Center is in the process of 
        assuming functions for European and African posts formerly 
        carried out at our Financial Service Center in Paris.
  --The Department will also begin in early April to shift routine 
        passport production from overseas posts to U.S. domestic 
        passport agencies in order to take advantage of the high 
        security passport photodigitization process installed here in 
        the United States.
    When relocation to the United States is not feasible, USG agencies 
(including State) use many embassies and consulates, such as Frankfurt 
and Hong Kong, as regional platforms for their activities.
    Even with advances in technology, there is still no substitute for 
face-to-face interaction with host governments and publics. State 
continues to support the principle of universality, under which the 
U.S. Government maintains an on the-ground presence in virtually all 
nations with which we have diplomatic relations.
    Question. The fiscal year 2003 budget contains an estimated $3.3 
billion for ``substantive'' foreign affairs activities such as policy 
formulation, diplomatic relations, public diplomacy, consular 
relations, and support of multilateral diplomacy. Approximately $4.4 
billion is for such things as embassy construction, diplomatic 
security, IT infrastructure, travel, and rent--all of which support the 
Department's foreign affairs mission. Secretary Powell, how do you 
justify spending more for the support of our foreign affairs activities 
than we do on the actual conduct of foreign policy?
    Once you have achieved your goals for improving State's 
infrastructure (facilities, IT, etc.) do you expect the numbers to flip 
back?
    Answer. The funding identified is only part of the total budget 
used to conduct the nation's foreign policy. The total fiscal year 2003 
International Affairs budget request is $25.4 billion, including over 
$16 billion for the Foreign Operations appropriations. To effectively 
carry out its foreign policy mission, the Department must have adequate 
staffing, technology, and secure facilities, as well as adequate 
foreign assistance funding. Building an embassy in a foreign country, 
for example, is as much a part of the conduct of foreign policy as is 
concluding a treaty, negotiating a peace agreement, or providing 
humanitarian aid. In fact, our overseas presence is at the very heart 
of our foreign policy, from ensuring the safety and security of 
American citizens overseas to carrying out the daily routine of 
diplomacy. The operations, maintenance, and security costs of our 
overseas presence is difficult to predict; for example, who could have 
forecast in 1987 the fall of the Soviet Union and the sudden rush onto 
the world scene of ``new'' countries with which the United States 
needed to establish diplomatic relations. At OBO, however, we have 
developed for the first time a master plan for embassy construction 
that will help us manage those particular costs. I cannot assure you 
that the current total of funds we need for our daily operations and 
for supporting the conduct of our foreign policy will decrease over 
time. I can assure you, however, that we will be wise stewards of the 
dollars entrusted to us by the American people.
                          embassy construction
    Question. What impact has 9/11 had on the way the Office of 
Overseas Buildings Operations approaches designing and building 
embassies abroad?
    Answer. Following the Africa bombings in 1998, the Department, in 
concert with other Foreign Affairs Agencies, embarked on an intense, 
successful, and continuing effort to review and revise overseas 
security standards and determine what new standards might be needed, 
including preventive measures for chemical or biological attacks. The 
tragedy of 9/11 confirmed that we were already going in the right 
direction regarding strengthening and/or relocating our facilities to 
provide the best security that is reasonably possible for our employees 
at posts abroad. We are making a determined effort to accelerate these 
processes in light of 9/11 and other recent events.
    Question. Do you think the lessons of 9/11 were that we need to 
build more heavily fortified embassies? Or do you believe that 9/11 
demonstrated that we simply cannot build buildings that are 100 percent 
secure and must therefore look to mitigate the threat in other ways 
(such as better deterrence and prevention)?
    Answer. While neither the World Trade Center nor the Pentagon was 
designed to the same physical security standards as our embassies 
abroad, they were designed to withstand what was considered a 
reasonable expectation of survivability following significant 
structural damage. The stresses upon these buildings on 9/11 were 
greater than they could withstand. The U.S. Government's efforts should 
continue to focus on better deterrence and prevention, as well as 
improved-design and construction technologies, to reduce the impact of 
terrorist events. The most urgent need is simply to get our people out 
of buildings that do not come close to meeting any reasonable safety 
and security standards. Using best practices, Standard Embassy Designs, 
and business case analyses, the Department's Bureau of Overseas 
Buildings operations is accelerating its mission to provide safe, 
secure, and functional facilities for our diplomatic and consular posts 
around the world. Use of these initiatives reduces the time that our 
employees would otherwise be in less secure facilities. The 
Department's short and medium-term implementation of physical and 
technical security enhancements, as well as our long-term capital 
building design and construction efforts, significantly improve the 
security and safety of our employees abroad.
                      diplomatic hiring initiative
    Question. Mr. Secretary, last year this Committee provided the 
Department $107 million to hire 360 new employees above attrition. This 
year you have requested another $100 million to hire 399 more people. 
Next year you will ask for another 399 new employees.
    Could you please give us an update on how this process is going? 
How many people have been hired so far? How will new employees be 
allocated among the different bureaus and sections? Has 9/11 altered 
decisions concerning where these new employees will be placed?
    Will the right-sizing of our posts abroad continue despite this 
surge in hiring? Do these two processes (Diplomatic Readiness Hiring 
Initiatives and Right-Sizing) conflict with one another?
    Answer.
Recruitment Progress:
    Our recruitment and hiring effort thus far has been very 
successful.
  --We had 13,000 takers of the Foreign Service Written Exam in 
        September--a sixty-three percent increase over last year.
  --For fiscal year 2002, we have already signed-up 344 new junior 
        officers out of our target of 483, which includes Diplomatic 
        Readiness hiring and attrition hiring.
  --We have reduced the average time to enter the Foreign Service from 
        22 months to 10 months.
  --We are taking a hard look at our Civil Service hiring process to 
        make it more efficient.
  --We are using targeted hiring programs in the Civil Service to meet 
        anticipated skill needs effectively, including hiring employees 
        in groups so they can be available more quickly and hiring into 
        training programs that will grow talent from within.
Position Allocation:
    As we allocate new positions, we are directing them in the first 
instance to our overseas needs--to meet requirements now being 
neglected due to lack of adequate staffing. We are also creating new 
training positions so that we can build our capacity, ensuring our 
employees have the needed training, to meet the challenges of 21st 
century diplomacy.
    The majority of the 360 new positions for fiscal year 2002 were 
used to begin to address overseas staffing deficiencies documented in 
our Overseas Staffing Model (OSM) and to meet Foreign Service training 
needs.
    For fiscal year 2003, the request for 399 new positions will allow 
the Department to continue to close training and staffing gaps and 
bring us another step closer to the full staffing required to meet the 
nation's diplomatic requirements. These new positions will be in 
Foreign Service Generalist, Foreign Service Specialist, and Civil 
Service categories, as determined by our planning models and foreign 
policy requirements.
    To determine specific allocation of those new positions by bureau 
and post, we assessed their human resource requests during our annual 
planning and budgeting process. This process culminates in a review by 
the Deputy Secretary and Under Secretary for Management who then set 
priorities and approve allocations.
    Because those policy priorities can change, we do adjust throughout 
the year. Post 9/11, we did revise our plans and direct more resources 
to counter-terrorism and border security.
Right-Sizing:
    With regard to rightsizing the USG presence, the State Department 
is only part of the equation. As you know, the U.S. Government's entire 
overseas presence includes staff from over 30 agencies. As part of the 
planning process, each mission's review of its functions and staff 
takes into account all agencies at the mission.
    The Office of Management and Budget is currently undertaking a 
comprehensive government-wide rightsizing study, and we are working 
with them.
    As we determine the optimum allocation of our human resources, we 
use models, such as the Overseas Staffing Model, to develop baseline 
staffing levels. We are also developing a domestic staffing model.
    We use these and other workforce planning tools as part of our 
overall strategic planning and resource review process to determine 
staffing. In this regard, we can ``rightsize'' the Department's 
staffing.
    The Diplomatic Readiness Initiative was the result of that review 
process. It is a three-year plan to increase staffing levels in light 
of the assessed need. Therefore, the Diplomatic Readiness Initiative is 
in fact part of our effort to ensure we have the right staffing 
overseas to meet our mission.
                    border security/consular affairs
    Question. Mr. Secretary, how has the Consular Affairs Mission 
changed since the events of 9/11? Would you agree that the mission your 
consular officers perform is vital to our national security? What are 
the pros and cons of the Department's policy of requiring new Foreign 
Service Officers to serve their first tour in Consular Affairs? Do you 
think this policy has contributed to creating a culture at State where 
CA officers are second class citizens? Do you agree that Consular 
Affairs is a sufficiently important component of the Department's 
mission that it should be staffed by career FSOs, rather than by 
novices?
    Answer. The Bureau of Consular Affairs (CA) has been guided before 
and after the tragic events of 9/11 by two complementary goals: 
ensuring the security of our borders, while at the same time developing 
and implementing state-of-the-art technology to facilitate travel. 
Consular officers in the field are the outermost ring of the U.S. 
border security system. We have been continually engaged in efforts to 
design, deploy, and improve the systems and tools they need to help 
flag terrorists and criminals among visa applicants. Our Consular 
Mission has not changed and, in fact, September 11 has served to 
emphasize the importance of our core Consular functions to ensuring 
national security.
    The Department does not have a policy that new Foreign Service 
Officers (FSOs) must serve their first tour in a consular position. 
Rather, it is the policy of the Bureau of Human Resources in the State 
Department that all FSOs, regardless of career track, perform a minimum 
of one year of consular service during their first two assignments as 
junior officers. Some do this on their first assignment and some on 
their second.
    This policy enables the Department to meet its worldwide statutory 
responsibilities, while at the same time giving these untenured 
officers a diversity of experiences and the opportunity to demonstrate 
their skills in a variety of State Department functions. While serving 
in a consular capacity and under the mentorship of seasoned consuls and 
senior FSOs throughout our Missions, these officers have an opportunity 
to interface with large numbers of the host country population, make 
decisions quickly, manage staffs of host country national employees, 
work on a team within an Embassy or Consulate, hone language skills, 
master immigration and citizenship law, protect the security of the 
United States by selective visa issuance, and protect U.S. citizens 
abroad.
    A consular assignment provides all officers, regardless of career 
track, a foundation for understanding the consular function and its 
role in meeting core U.S. responsibilities abroad. Such service is 
extremely useful to all officers, as they assume greater 
responsibilities in their careers as Foreign Service officers. 
Accordingly, I do not agree that our assignment policy has contributed 
to a Department culture wherein consular officers are considered second 
class citizens. To the contrary, as the vast majority of the FSO corps 
has served in a consular position at some point in their careers, there 
is a greater understanding across the Foreign Service of the consular 
role in foreign policy.
    Question. Can we do a better job of screening student visa 
applications without causing significant delays--delays which may lead 
foreign students to choose not to study in the United States?
    Answer. The U.S. government can do a better job of screening 
students.
    The Immigration and Naturalization Service (INS) is currently 
working on the development and deployment of SEVIS (Student and 
Exchange Visitor System). I am optimistic that SEVIS will assist the 
Federal government in strengthening the current process for issuing 
student and exchange visas. We are actively participating with our 
colleagues from the Immigration and Naturalization Service, as well as 
the academic community, in the design and development of SEVIS, 
designed to convert what was largely a manual, paper-process to a 
modern automated system.
    I believe that the Department's process for adjudicating student 
visa applications is appropriate and expeditious. Consular officers 
evaluate student visa applications according to the criteria 
established by U.S. immigration law. The most pertinent elements are 
the credibility of applicants' plans to study in the United States and 
whether they have adequate financial means. As further required under 
U.S. law, the officer also determines whether a student visa applicant 
has a residence abroad which he or she has no intention of abandoning, 
and intends to depart from the United States upon completion of the 
course of study.
    All visa cases, including student and exchange visas, are processed 
using automated systems, which prompt a name check through the 
Department of State's centralized lookout system (CLASS). A consular 
officer must review all hits before a case can be approved for 
printing, and there is no override to this feature. In addition, the 
Department has in place special headquarters clearance procedures for 
visa applicants, including students from countries of concern, such as 
those on the state sponsors of terrorism list, as well as applicants 
whose planned travel raises concerns about unauthorized access to 
sensitive technologies. In these cases, clearance from Washington is 
required before the visa may be issued.
    In the vast majority of cases, i.e. those applicants whose names 
are not in our lookout system and whose academic or research interests 
raise no technology transfer or other security concerns, this name 
check procedure causes virtually no delay in the adjudication of visa 
applications. We issued approximately 560,000 student and exchange 
visas in fiscal year 2001; there is no indication that our adjudication 
requirements inhibited the number of student visa applicants.
                    department's long-range it plan
    Question. Mr. Secretary, your progress in upgrading your IT systems 
is impressive. Now that two major projects are well underway, what is 
your long-range plan for State in the area of Information Technology?
    Answer. Our Classified Connectivity Program (CCP) and OpenNet Plus 
are underway--on schedule and on budget. We are on the eve of piloting 
a program in India and Mexico to improve collaboration among agencies. 
We are also working on a proposal to replace a potpourri of messaging 
systems, including replacing a legacy cable system of WWII vintage with 
a single integrated messaging system that will substantially improve 
the way we communicate.
    We are not satisfied with catching up to others in this high-tech 
world. Our goal is to move ahead, reconfirming State's position as the 
lead Foreign Affairs agency, setting an example for the rest of 
government, indeed, setting the standard for the international 
community in its conduct of diplomacy.
    The technology we are deploying must satisfy three standards: 
smart, simple, and secure. Our vision is a single computer at every 
desk and mobile connectivity for every contingency--with full access to 
all information required for the effective conduct of diplomacy.
    Our new tools of diplomacy will allow full engagement in the 
networked world of the 21st century and full recognition that the 
fundamental requirements of diplomacy, one of which is that the best 
people be supported by the most reliable technology, will not change.
                         peacekeeping--general
    Question. The fiscal year 1997 State Department Appropriations bill 
required the Secretary to notify Congress 15 days before the United 
States voted to establish or expand a peacekeeping operation. Mr. 
Secretary, do you believe Congress should have a more formal role in 
the decisions leading up to Security Council votes that pertain to 
peacekeeping? Wouldn't this lessen the need for ``holds'' in order to 
effect positive change in these missions?
    Answer. The Department of State continues to comply with the 
requirements of 22 USCA 287b(e)(5)(A) to notify Congress 15 days before 
the United States votes in the Security Council to establish a new U.N. 
peacekeeping mission, expand the authorized force strength of an 
existing mission, or add significant additional or significantly 
different functions to a U.N. peacekeeping operation.
    Well in advance of this formal notification, which includes a 
critical review of major aspects of such operations, the Department 
engages in an extensive process of consultation with Congress on U.N. 
peacekeeping, including monthly ``Round-the-World'' briefings for this 
and other Congressional committees and quarterly and annual reports on 
U.S. contributions to U.N. peacekeeping operations. The monthly 
briefings, in particular, provide a unique opportunity for the 
Department to indicate early developments and trends and for Congress 
to comment at an early stage.
    Question. Secretary Powell, it is estimated that our campaign to 
liberate Afghanistan cost $2 billion, with continuing costs of $200 
million per month. Britain is to be commended for its role in both the 
military campaign and the ensuing Security Assistance Force. Do you 
agree, however, that the peacekeeping function should be left largely 
to our allies, particularly our other European allies?
    Answer. We should commend all the members of the coalition for 
their commitment and their contribution to the military, diplomatic, 
and economic facets of the Global War on Terrorism. There are 
compelling reasons why the United States has chosen not to participate 
directly in the International Security Assistance Force (ISAF) 
peacekeeping mission in Afghanistan. Chief among these, obviously, is 
that it has allowed us to focus on the war against the Taliban and al 
Qaida, as well as on potential threats in other locations related to 
the Global War on Terrorism. Our allies understand and support this 
focus, as demonstrated by the many generous offers of assistance, which 
enable us to maintain that focus. The direct participation of allied 
military forces in ISAF has helped to promote stability in Afghanistan 
and to solidify allied public support for coalition efforts. Another 
reason for supporting our allies' prominent role in ISAF is the unique 
qualifications that many of them bring to peacekeeping. All the current 
ISAF participants are nations that have taken part--and in most cases 
are still taking part--in the multiple Balkans peacekeeping missions of 
the last ten years. Several ISAF troop contributors have peacekeeping 
experience that stretches back several decades and are putting that 
experience to good use in helping to secure a brighter future for 
Afghanistan.
                 u.n. peacekeeping mission in the congo
    Question. Former United States-U.N. Ambassador Richard Holbrooke 
set preconditions for U.S. support of U.N. intervention in the Congo. 
These included withdrawal of combatants to the lines established in the 
Lusaka accord, absolute cessation of hostilities, and free access to 
all areas for U.N. observers. Is this still U.S. policy? If so, will 
the United States apply these conditions to the eventual vote by the 
Security Council to raise the troop level from its current level of 
5,500? If the preconditions are not met, will the United States vote 
against raising the troop level?
    Answer. The conditions set by former Ambassador Holbrooke for U.S. 
support of the U.N. Organization Mission in the Democratic Republic of 
the Congo (MONUC) have been generally met: the combatants have 
withdrawn to the agreed disengagement lines; the cease-fire has held, 
with a few exceptions, since early 2001; and Lusaka Agreement 
signatories have permitted MONUC access to areas under their control. 
The United States has made it clear that its support of MONUC's 
operations in the Congo will require the continued observance of the 
cease-fire by all parties and free access to all areas for U.N. 
observers. In addition, before we could support an increase in MONUC's 
troop level, we would have to be convinced that this would further U.S. 
goals that include achieving the Lusaka Agreement's objective of 
withdrawal of foreign forces and the disarmament and demobilization of 
the armed groups.
    Question. Should the Organization of African Unity or some other 
honest broker host an international conference with the express purpose 
of redrawing colonial borders in Central Africa to create smaller but 
more militarily, politically, economically, and socially viable States? 
Lacking any real history of, or meaningful prerequisites for, 
representative government, what makes you believe that a country as 
large, diverse, and underdeveloped as the Congo can ever achieve 
democratic self-governance? What other than partition can free the 
Congolese people from the twin plagues of rebel warlords and resource-
hungry neighbors?
    Answer. The Organization of African Unity (OAU) supports the 
principle of inviolability of colonial borders throughout the African 
continent. It would be up to the people of the Congo, working as they 
see fit with their neighbors and the OAU, to consider whether redrawing 
their boundaries can be an effective way to address their problems.
    I firmly believe that the Congolese people can achieve democratic 
self-governance within the present boundaries of the Congo. To expect 
less would be to grossly underestimate their love for their country and 
their desire for freedom.
    Question. Why aren't we pursuing controls on the export of ``col-
tan'' (short for columbite-tantalite, an ore rich in the element 
tantalum) when it is known that col-tan is bankrolling the Rwandan-
backed Rally for Congolese Democracy (RCD)? Is this the next Conflict 
Diamonds?
    Answer. Last December, the U.N. Security Council discussed the 
November 13 Addendum to the Report of the Panel of Experts on the 
Illegal Exploitation of the Natural Resources of the Democratic 
Republic of the Congo. We did not support the panel's recommendation 
for a moratorium on the purchase of specific commodities in the Congo, 
including col-tan. We believe such a moratorium would be unenforceable 
and thus would weaken the credibility of the U.N. Security Council's 
efforts to end the illegal exploitation of the Congo's resources.
    We supported the continuation of the panel for up to six months to 
provide for a follow-up to the report, including ways to address the 
exploitation of col-tan in the Congo. We urged all governments to 
cooperate fully with the panel.
                        u.n.-capital master plan
    Question. Mr. Secretary, what in your view is the purpose of having 
a task force oversee U.S. participation in the U.N. renovation?
    Have you heard some of the U.N. ideas about how they might fund 
this project, and do they alarm you?
    How can we guarantee that the renovation of the U.N. building, and 
thus the creation of more ``desk space,'' will not quickly be followed 
by requests to enlarge the U.N. bureaucracy?
    Answer. The task force would bring together personnel from the 
Department of State and other U.S. government agencies, with the 
necessary expertise in construction and financial management, to ensure 
that U.S. interests are met. We believe such oversight is essential in 
a project of the potential magnitude of the U.N.'s Capital Master Plan.
    The U.N. currently is preparing updated proposals regarding all 
aspects of the Capital Master Plan, including funding options. As the 
proposals have not yet been issued, it is premature to speculate on 
what these may contain. Moreover, all proposals will be subject to 
negotiation among the U.N. member states. The funding issue will be key 
in this process. We expect all factors will be considered, including 
private sector and voluntary funding.
    The U.S. remains committed to budget discipline in the U.N. We will 
continue to adhere to this approach, irrespective of the current 
initiative to renovate the aging U.N. headquarters complex and bring it 
up to modern standard in terms of safety, security, and energy 
efficiency. As noted previously by the General Accounting Office, the 
buildings comprising the U.N. headquarters complex have exceeded their 
economic life expectancy. They are energy inefficient and no longer 
conform to current safety, fire and building codes, or to requirements 
regarding U.N. security.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                     international law enforcement
    Question. While these International Law Enforcement Academies have 
been recognized as a useful tool in the war against drugs, don't these 
organizations also lend themselves to the war against terrorism as the 
United States secures its borders and seeks members of terrorist 
organizations in other countries?
    Answer. The ILEAs play a significant role in combating not only 
crime, but also terrorism and those who often use criminal enterprises 
to accomplish their goals. Many of the advanced investigative skills 
foreign law enforcement officials learn at the ILEAs are also 
applicable to conducting effective counter-terrorism investigations and 
operations. In light of the events of September 11 and the connection 
between terrorism and drug trafficking articulated by the President, 
the Department's Bureau of International Narcotics and Law Enforcement 
Affairs and Coordinator for Counterterrorism, as well as other U.S. 
Government agencies represented on the ILEA Steering Group, will be 
developing ways to include additional antiterrorism courses in the ILEA 
curriculum.
    Question. I was concerned to see that the overall budget for the 
International Narcotics Control and Law Enforcement activity, excluding 
appropriations from the Emergency Response Fund, is reduced from a net 
$217 million in fiscal year 2002 to $198 million in the fiscal year 
2003 budget request. This represents a reduction of $19 million, or 8.8 
percent. What is the rationale for reducing this type of bilateral 
assistance that has the potential to further contribute to our war 
against terrorism?
    Answer. We agree that our counternarcotics and anticrime programs 
have been very successful in combating drug trafficking and other 
transnational crimes, and we expect them to continue to be successful. 
While the initial fiscal year 2002 appropriation for International 
Narcotics Control and Law Enforcement (INCLE) was $217 million, we have 
made the difficult choice to transfer $20 million to the Andean 
Counterdrug Initiative, as authorized by Congress, to provide 
sufficient funding for our programs in that very important region (the 
actual ACI appropriation was $105 million less than our request, a 14 
percent reduction). That transfer brings the actual fiscal year 2002 
program level for INCLE to $197 million, a $28 million increase over 
the comparable fiscal year 2001 level. Therefore, our fiscal year 2003 
request is a straight line from fiscal year 2002. At this level, there 
is sufficient funding to carry out our programs.
    Question. Are the existing ILEAs, including the most recently 
established ILEA in Roswell, New Mexico, supported at their existing 
funding levels in the fiscal year 2003 budget request?
    Answer. Yes. The funding will remain constant.
    Question. Is it not true that funding for the ILEA in Budapest came 
in part from funding for two initiatives that is now drying up? Is the 
Department making up for those funding resources in its crime control 
budget, or is the program essentially being asked to absorb these 
costs?
    Answer. ILEA Budapest has been financed by FREEDOM Support Act 
(FSA) and Support to East European Democracy (SEED) funds. The FSA and 
SEED funding may eventually be reduced in fiscal year 2003 or beyond, 
but any shortfalls will be made up from the International Narcotics 
Control and Law Enforcement (INCLE) Crime account.
         center for anti-terrorism and security training (cast)
    Question. How does the proposed new Center for Anti-Terrorism and 
Security Training relate to the current State Department Anti-Terrorism 
Assistance [ATA] program?
    Answer. Over the last 17 years, the Department's ATA program, 
managed by the Bureau of Diplomatic Security, has provided 
antiterrorism training to over 28,000 foreign law enforcement 
personnel. The events of September 11 underscored the need to increase 
such training for those who partner with us to protect American 
interests overseas. The attacks have also resulted in a mandate to 
increase both the amount of training and the topics addressed. In the 
current environment, the capacity to provide enhanced training on a 
larger scale is limited by existing facilities and technology, often 
relying on ad-hoc arrangements with other organizations which have 
their own increased training needs. CAST provides a remedy for both by 
providing a forward leaning approach and state-of-the art facility.
    The Department's role in countering terrorism abroad requires that 
the Anti-Terrorism Training Assistance (ATA) program add further course 
offerings in specific areas dealing with countering and responding to 
terrorist incidents. These skills are an integral part of the total 
package required for foreign law enforcement personnel to effectively 
prevent and respond to terrorist incidents. Additional training 
capacity would also reduce the risks for Americans working or visiting 
abroad.
    Question. Does the Department intend to fully utilize its current 
training partners to carry out the expanded ATAP [ATA] program?
    Answer. Yes, the existing training facilities are at full capacity 
and will not allow for expansion of the Anti-Terrorism Assistance (ATA) 
program. Therefore, the continued use of specialized facilities, which 
provide unique training environments such as desert and maritime 
training, remains critical to the training mission. The desert border 
patrol training will continue to utilize the facility in Socorro, New 
Mexico. The pipeline security training and certain maritime training 
will continue to utilize facilities connected with the Louisiana State 
Police Academy in Baton Rouge, Louisiana. As evolving training demands 
are recognized, additional partnering needs will be identified and 
integrated.
    Question. How will the Anti-Terrorism Assistance [ATA] program be 
integrated with the new Center for Anti-Terrorism and Security 
Training?
    Answer. The Anti-Terrorism Assistance (ATA) program consists of a 
number of related activities, the majority of which involve U.S.-based 
training, consultation, and program reviews for foreign law enforcement 
personnel. While substantially improving our ability to train 
Diplomatic Security agents, CAST will also help meet increased training 
mandates and improve functional law enforcement related training for 
mid-level and senior-level foreign officials. The concept and planning 
model will allow for a seamless integration of that training, while 
accommodating significantly increased requests for training by front 
line nations. ATA now trains about 3,000 foreign law enforcement 
professionals annually. The CAST facility, when fully operational, will 
accommodate as many as 7,000 foreign trainees per year.
                   international monetary fund (imf)
    Question. International Monetary Fund bailouts and Clinton 
Administration foreign policy aims arguably distorted financial crises 
affecting East Asia and Russia.
    Mr. Secretary, can you tell us what role you and the Department are 
playing, in consultation with the Treasury Department, in reviewing 
United States policy with regard to the role of the IMF in countries 
with chronic fiscal problem, such as those we've seen and continue to 
grapple with in Argentina?
    Answer. This Administration has worked to make the IMF more 
consistently associated with success. The IMF is making progress in 
narrowing the focus of its work. New country programs reflect sharper 
concentration on key areas and a prioritization of measures necessary 
for reforms to succeed. This is a welcome change. A broader review of 
the conditions attached to IMF lending continues. As part of this 
review, the United States is emphasizing the need for the IMF to be 
selective in providing financial support. The IMF needs, in short, to 
demonstrate a greater willingness to focus its support on countries 
doing the most to help themselves, and to decline to finance cases in 
which a country is not prepared to take the steps required to achieve 
credible reforms and a sustainable growth path. We convey the same 
message to those countries seeking IMF assistance.
    Question. What do you expect will be the outcome of the IMF quota 
review that, according to the IMF's Articles of Agreement, must be 
completed by January 2003?
    Answer. The United States believes the liquidity position of the 
IMF is sufficiently strong at this time. Therefore, we do not expect 
the current review to result in any quota increase.
                         management challenges
    Question. As you know, the President's 2003 budget emphasized 
performance-based budgeting--the first time this has been done. As part 
of his management agenda, the Office of Management and Budget 
identified five government-wide initiatives and ranked each department. 
Unfortunately, the State Department failed to receive a passing grade. 
What is your plan to meet the high standards set by the President?
    Answer. I am personally and professionally committed to moving the 
Department from a ``red'' score (meaning failure) to ``green'' (meaning 
success) on all five elements of the President's Management Agenda 
(PMA). We have completed and begun to implement credible plans for two 
of those five elements (Financial Management and E-Government). As a 
result, our current score of the ``work in progress'' on those elements 
has moved from ``red'' to ``yellow''. We take the President's 
Management Agenda very seriously, and all of my senior managers at the 
Department share my commitment to getting to ``green'' in the most 
effective way possible.
    Question. In previous years, the State Department has been unable 
to clearly state the relationship between some key outcomes and 
strategies and indicators in its annual performance report. The 
Department has been unable to establish connections between its actions 
and the success or failure of key outcomes. Given that the nature of 
the State Department's mission makes it difficult to avoid either 
having very broad key outcomes that are not addressed sufficiently by 
the indicators; what role should the Department's annual performance 
report, as mandated under GPRA, serve in helping the Congress determine 
if the State Department is meeting its goals?
    Answer. Because of the complex, long-term nature of the goals of 
the Department of State, and because the environment is unpredictable 
and subject to sudden change, we believe that a clear focus on results, 
and what it takes to achieve them, is critical to our success.
    The Department's 2001 Performance Report reflects the progress we 
are making in communicating the relevance of our goals and how they 
address critical strategic issues facing the country. Much credit goes 
to an improved process that introduced a goal team for each of the 
Department's strategic goals.
    By strengthening the linkage between goals and resources, we 
believe that our plans, reports, and results will be enhanced. To 
accomplish this, we intend to have our goal teams identify 
interdependencies among goals and define specific intermediate outcomes 
that will lead to progress toward positive long-term outcomes. Senior 
Policy and Management reviews chaired by the Deputy Secretary of State 
are also designed to improve the Bureau and Mission Performance Plan 
processes.
    Such measures will provide both the Department and the Congress a 
clearer understanding of the relationship between funding and results.
    Given the size of our plan and report documents at this time, we 
will strongly encourage our goal teams' use of summaries and graphics 
to better communicate the core logic to external stakeholders and the 
public.
    Question. If Congress passed the President's Management Agenda, how 
would operations of the State Department improve?
    Answer. At this time, the Administration has no plans to introduce 
legislation incorporating the President's Management Agenda (PMA). The 
Administration believes that the best way to implement this agenda is 
within the Executive branch and under the guidance of the Office of 
Management and Budget. Consequently, we can make adjustments as 
necessary between the general, over-arching goals of the PMA and the 
particular policies, programs and activities of each individual agency.
                              foreign aid
    Question. I understand that OMB will be sending us a supplemental 
request in the near future and that it will include additional aid for 
Afghanistan, Colombia, and the Central Asian Republics.
    (1) Is that correct? If so, how much of the supplemental will be 
for the 150 function?
    (2) Which 150 programs will be affected?
    (3) Will it include any additional countries or 150 items?
    Answer. We are working with OMB to put together an emergency 
supplemental package to support the war on terrorism and the front-line 
states.
    No final decisions have been made on requirements and funding 
levels.
    We will provide further details as soon as the request has been 
developed.
                        funding for afghanistan
    Question. As you know, the annual budget cycle is not always well-
equipped to deal with long-term needs. Each year's immediate priorities 
tend to overshadow continuing problems that require sustained reforms. 
What can be done to ensure that funding for Afghanistan for the out-
years is secured now, before Afghanistan slips from the headlines?
    Answer. We know that there will be substantial requirements for 
reconstruction and redevelopment in Afghanistan. We will use 
supplemental funding to address Afghanistan's immediate needs.
    Our annual budget requests for the out-years will respond to future 
requirements and reflect the commitment of the United States to assist 
Afghanistan.
    As the President has said, we will not walk away from that 
commitment.
                           biennial budgeting
    Question. How do you think biennial budgeting would affect the 
State Department and the spending and operations of the foreign affairs 
apparatus?
    Answer. The concept of biennial budgets is worth thinking about. On 
the plus side, we would gain a better sense of how much money would be 
available over a longer period for managing the Department and our 
posts abroad. Our planning would benefit.
    However, this idea would not remove the need for periodic 
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 emerging opportunities and threats.
    This idea will not work unless we seek and are appropriated 
adequate and realistic funding levels for the work we know we must do.
    I am open to discussing further any proposal you may have that will 
provide us the resources we need to support the conduct of diplomatic 
relations and U.S. foreign policy.
                  capitalism and the developing world
    Question. In the aftermath of the Asian Financial Crisis, the 
Economic Report of the President indicated that net private sectors 
capital flows to the emerging markets declined more than 90 percent 
between 1997 and 2000. Since then countries like Argentina and 
Indonesia have been mired in recession and political discord. Perhaps 
understandably, the citizens of these countries view American style 
capitalism with skepticism.
    What can be done to improve our nation's image among the citizens 
of the developing world and how can we better promote the idea that 
free markets improve standards of living and strengthen democratic 
institutions?
    Answer. The United States, led by the Department of Treasury, has 
strongly supported International Monetary Fund initiatives to 
strengthen surveillance and crisis prevention measures. With U.S. 
government support, the IMF and World Bank initiated the Financial 
Sector Assessment Program in 1999 to assess members' financial systems 
and the regulatory and legal framework underlying their operation. The 
results are incorporated into the IMF's reviews of national economies.
    Spearheaded by the Asian financial crisis, the IMF's standards and 
codes initiative promotes the development and dissemination of codes of 
good practice in the financial sector. Reports on the Observance of 
Standards and Codes (ROSCs) summarize the extent to which countries 
observe international norms in a number of areas crucial to the health 
of financial systems. Reports are used for official discussions, as 
well as for risk management by rating agencies and the private sector.
    The United States has supported efforts to improve dialogue among 
market participants, the International Financial Institutions, and 
sovereign governments. In June, 2001, the IMF created an International 
Capital Markets Department as part of an initiative to strengthen the 
international financial architecture. The Department serves as a 
liaison with the private sector and enables the IMF to conduct more 
effective surveillance.
    At the urging of the United States and its G-7 partners, the 
Financial Stability Forum (FSF) was established in 1999 to improve 
cooperation in financial surveillance and supervision. The FSF is 
comprised of finance ministry and regulatory official, as well as 
International Financial Institution and international banking 
representatives. The FSF encourages implementation of measures to 
improve the health of financial systems, including improved disclosure 
practices, deposit insurance programs, accounting standards, and 
improving counter-party risk management.
    The Basel Committee on Banking Supervision is playing a fundamental 
role in strengthening the safety and soundness of the international 
banking system. Chaired by New York Federal Reserve President William 
McDonough, the Committee is revising the Basel Capital Accord to 
redefine minimum capital requirements, improve supervisory review 
standards of internal bank assessment processes, and ensure effective 
disclosure standards to encourage sound banking practices.
    The Committee on Banking Supervision and the Bank for International 
Settlements jointly created the Financial Stability Institute in 1999 
to help bank supervisors improve financial systems worldwide. The 
Institute organizes seminars, regional workshops, and informational 
programs on bank supervision issues. Upcoming seminars in Muscat, 
Khartoum, Lusaka, Bangkok, and Vilnius are indicative of the worldwide 
scope of its efforts to improve banking standards.
    Finally, the United States is working on a bilateral basis, where 
appropriate, to address areas of concern. The Department of Treasury's 
technical assistance team and USAID's banking and capital market reform 
team have worked with governments in Asia, Eastern Europe, South 
America, Africa, and the Middle East on a wide range of bank reform 
issues.
    An appropriate financial policy framework facilitates the 
mobilization of capital and is a critical condition for economic 
growth. As the United States works with its partners to promote the 
spread of market-based economies, efforts to strengthen the financial 
and banking sectors will remain a priority.
                            visa procedures
    Question. The State Department has a very considerable role in the 
war on terrorism in its role of issuing visas throughout the world 
thereby enabling foreign nationals to come to our country. Since 9/11 
has there been any significant change in the number of visas issued or 
any review or change in the procedures for issuing visas?
    Answer. In the immediate aftermath of September 11, nonimmigrant 
visa activity declined by as much as 25 percent, compared to the same 
period the year before, although actual rates varied from one part of 
the world to another.
    While the overall procedure employed for issuing visas remains 
basically the same, we are working continually to enhance the 
information available to consular officers when they adjudicate a visa 
application. In January, in cooperation with law enforcement and 
intelligence agencies, we implemented a supplemental nonimmigrant visa 
application form designed to elicit information that would prompt a 
more intense review of certain applications for national security 
reasons. The Bureau of Consular Affairs continues to push hard for 
increased data-sharing with other agencies that may possess derogatory 
information on potential visa applicants, so that information is 
included in our worldwide CLASS visa lookout system and thus available 
to our consular officers as they consider applications. Our robust visa 
system is only as good as the information entered into it. Thus, it is 
absolutely essential that the law enforcement and intelligence 
community provide us with the necessary information. In addition, the 
review process for potentially problematic visa applications has 
lengthened as we attempt to obtain relevant input from any and all 
interested agencies in specific cases.
                        visa and passport fraud
    Question. One of the most important ways in which the State 
Department contributes to the war on terrorism is through its role as 
issuer of visas and passports, which of course, takes place on a global 
basis. It is my understanding the State Department issues approximately 
7 million passports and between 7 and 8 million visas each year. It is 
also my understanding that there are only 215 domestically based agents 
in the Criminal Investigations Division of the Bureau of Diplomatic 
Security who investigate visa and passport fraud. These 215 agents 
spend a small fraction of their time (perhaps one-third) on visa and 
passport fraud investigations since they also must respond to the needs 
of VIP's and other security matters. Overseas there are approximately 
405 agents who deal with security and in case of these agents even more 
demands are placed on their time, leaving maybe 10 percent of their 
time to investigate visa and passport fraud. Thus, by my calculations 
we have only 90 people across the globe working full-time on visa and 
passport fraud. Now I realize that Diplomatic Security intends to 
recruit, train, clear and set-up approximately an additional 186 
Diplomatic Security agents. Still do you believe that the State 
Department's efforts in going after visa and passport fraud are 
adequate?
    Answer. The Department continues to make the best possible use of 
available resources for this purpose. Passport and visa fraud 
investigations are a critical component of our national security. The 
Bureaus of Diplomatic Security (DS) and Consular Affairs (CA) take this 
responsibility seriously and work together domestically and abroad to 
protect our borders. Let me explain their complementary roles in border 
security.
    All consular and passport officers conduct limited investigations 
to detect and prevent fraud in the regular course of their work. 
Passport agencies and consular sections also have a designated Fraud 
Prevention Manager, who is responsible for training line officers and 
investigating potential fraud cases. Passport agencies and many 
embassies have full-time, mid-level officers in these jobs. Overseas 
Consular Sections with lower levels of fraud have part-time officers. 
Consular Sections also have locally hired staff with full-time fraud 
investigation responsibilities.
    Passport and Visa fraud investigations are typically begun by the 
adjudicating officers, who note any anomalies in the cases they 
receive, and refer them to the Fraud Prevention Manager (FPM) at the 
overseas post or at the passport agency. FPMs often conduct preliminary 
investigations to determine whether there is fraud involved in the 
case. Fraudulent U.S. passport applications are passed by CA to DS for 
criminal investigation. Visa fraud that appears to involve 
sophisticated or organized fraud, or falsification of foreign passports 
or other government documents, are passed to DS for criminal 
investigation and coordination with foreign police as appropriate. DS 
also investigates many allegations of passport and visa fraud received 
from outside sources. A large majority of all DS agents worldwide are 
engaged in criminal investigations to some extent, although few are 
committed full time to this mission.
    DS and CA work to satisfy different but complimentary interests, 
while increasing the number of staff to pursue the mission of border 
security. For example, DS is aggressively expanding the number of 
agents committed to passport and visa fraud investigations globally. In 
partnership with Consular Affairs, we are fully committed to increasing 
our critical contribution to U.S. border security. The additional 
special agent positions authorized by Congress under the Emergency 
Response Fund (ERF) following September 11, coupled with additional 
agent positions approved by the Congress in fiscal year 2002, will 
allow DS to better address its visa and passport fraud workload. DS is 
also adopting new methodologies relating to the investigative program, 
in order to ensure that we are maximizing existing investigative 
resources.
    Question. If additional resources had been provided to hire and 
train additional agents to investigate visa and passport fraud, would 
9/11 have happened?
    Answer. Any impact that additional agents may have had on the 
events of September 11 is at best speculative. Those events served to 
validate the need for a variety of enhancements and the retooling of 
others. Aggressive visa and passport investigative efforts add to the 
ability to protect American interests, both domestically and abroad. 
The key to preventing future attacks includes, but is not limited to, 
additional resources, exploiting technology, information sharing, and 
improved interagency cooperation. The Department requires accurate and 
timely intelligence-sharing throughout the intelligence and law 
enforcement communities to expand and improve the ability to prevent 
violations, as well as to respond to criminal activity. It is important 
to remember that the ability to impact the problem depends on cross-
cutting efforts by multiple agencies.
    Question. Can you explain to me the jurisdiction of the State 
Department as opposed to the Department of Justice and the FBI with 
respect to the investigation of visa and passport fraud? Is there 
overlap or duplication? Is there adequate coordination between these 
departments?
    Answer. The Department's Bureau of Diplomatic Security (DS) 
jurisdiction, under Title 22 USC, Sections 2709 and 4802, is specific 
to illegal passport or visa issuance or use. DS is not a border 
interdiction agency. Its primary focus is supporting the integrity of 
the U.S. passport and visa documents and issuance processes. The Bureau 
of Diplomatic Security also investigates the fraudulent use of foreign 
passports to enter the United States if the circumstances indicate that 
terrorism or other significant criminal activity may be involved.
    Passport fraud usually is not an end in itself, but rather a 
facilitating or predicate crime committed by those seeking to carry out 
other criminal acts. When other criminal activity is indicated, DS 
coordinates with the appropriate Federal, state, or local U.S. law 
enforcement agency with primary statutory jurisdiction for the 
offense(s). DS investigative efforts, targeting the passport or visa 
fraud, are of significant value in the investigation of the other 
underlying criminal activity. Thus, these investigations are often 
multi-agency efforts.
    While interagency cooperation regarding fraud investigations 
exists, there is a continuing need for greater information sharing 
between the law enforcement community and the Department of State, in 
order to expand and improve our efforts to prevent and respond to 
fraud.
    DS' primary focus in passport and visa fraud is on individual cases 
supporting the integrity of U.S. passport and visa documents:
  --Fraudulent applications;
  --Misuse and sale; alterations and counterfeiting (normally document 
        vendor rings rather than individuals);
  --Visa ``fixers'' operating near missions overseas. Vendors of feeder 
        documents for U.S. passports within the United States;
  --Employee malfeasance (U.S. or foreign national employees).
    Cases identified as possibly involving threats to U.S. national 
security interests are treated as highest priority and are immediately 
coordinated with the U.S. agency with the lead for those crimes. In 
those circumstances, DS continues its investigation of the passport and 
visa fraud as part of a joint, multi-agency investigation and in strict 
coordination with the other agency having the lead for the underlying 
criminal activity.
    DOJ/INS Role.--Although this is not an all-inclusive listing of INS 
responsibilities, the Department interacts closely with INS in the 
following capacities concerning passport and visa fraud: Border 
control/interdiction; control of Alien Arrival and Departure from 
United States; alien smuggling in general; visa fraud based on 
fraudulent petitions filed from within the United States; immigrant 
visas.
    DS often conducts visa fraud investigations in close coordination 
with INS and has taken the lead role in some major cases. For example, 
DS led a multi-agency investigation centered in Los Angeles that 
targeted visa and passport fraud activities of the Iranian terrorist 
organization MEK. That case led to numerous arrests in several states 
and overseas, dismantled a network that was funneling illicit funds to 
the terrorist organization, and resulted in the first U.S. conviction 
of an individual for providing material support to a terrorist 
organization. There is potential for some overlap in domestic portions 
of these investigations, but we have not found this to be a significant 
problem, either in volume of cases or determining which agency should 
have the lead. It should be noted that some redundancies provide a 
safety net, helping to ensure that cases are not missed.
    FBI Role.--The FBI normally focuses on the underlying criminal 
activity, rather than the passport or visa fraud. Obviously, FBI is the 
lead agency in investigation of terrorism, organized crime, money 
laundering, and other serious criminal activity that often involves the 
use of fraudulent international travel documents. DS often works 
jointly with the FBI in cases that also involve passport and visa 
fraud, conducting those parts of the investigations and also conducting 
other substantial leads on behalf of the FBI in other countries where 
the FBI is not present. DS agents assigned to the various Joint 
Terrorism Task Forces (JTTFs) have the lead role for passport and visa 
fraud investigations associated with terrorist activity and work 
closely with the FBI and the cognizant U.S. attorney's office.
                     youth in developing countries
    Question. Could you share with us your vision of how U.S. foreign 
policy can address the challenges and opportunities facing youth in 
developing countries?
    Answer. Even before the urgency pressed upon us by September 11th, 
the Department has been working to offer hope to youth in developing 
countries. Our development efforts have been focused on improving 
education, economic opportunity, and political security for the rapidly 
expanding young population in developing countries. On March 14, 
President Bush outlined a major new vision for development and 
announced the United States would increase its core economic 
development assistance to 50 percent above current levels over three 
years, reaching a $5 billion increase over projected levels in fiscal 
year 2006 and beyond. This new ``Compact for Development,'' which 
proposes creating a separate development assistance account called the 
Millennium Challenge Account, supports countries that are willing to 
commit to sound policies and to fight poverty effectively. We know that 
a major source of tension and discontent in many countries stems from 
the growing ranks of educated youth without the corresponding 
opportunities for gainful employment. Our economic development programs 
therefore must have job generation as a major objective. At the same 
time, our public diplomacy efforts--especially educational and cultural 
exchanges--have been reaching out to youth through programs that engage 
both teachers and students. With new programs focused on educating 
youth in Muslim majority countries, we heighten international social 
and cultural understanding and enhance long-term international problem 
solving. Combined, these new efforts will help build the trust, 
confidence and international cooperation necessary to sustain and 
advance the full range of our interests.
                              u.n. reforms
    Question. What reforms still need to be instituted at the U.N.?
    Answer. The U.N. already has implemented virtually all of the 
Helms-Biden Tranche Three reform requirements, e.g., the United States 
has a seat on the Advisory Committee on Administrative and Budgetary 
Questions (ACABQ); the U.N. has implemented a personnel evaluation 
system; it has instituted an appropriate code of conduct, etc. We are 
working closely with the U.N. to ensure that they meet the remaining 
conditions, such as GAO access to U.N. financial data, and expect to 
reach a satisfactory conclusion very soon. Assuming that the State 
Department Authorization bill is passed with the requested amendments 
to the Helms-Biden legislation, we believe we will be in a position 
this summer to recommend that the Secretary certify that all the U.N. 
reforms requirements have been met.
    Question. How close is the State Department to certifying the 
reforms in U.N. agencies that are preconditions for payment of the last 
installment of U.S. funds?
    Answer. All of the relevant agencies (U.N., World Health 
Organization, International Labor Organization, and Food and 
Agriculture Organization) have made significant progress toward fully 
implementing the required reforms outlined in the ``Helms-Biden'' 
legislation, and we continue to work closely with them. We hope that, 
if the pending State Department Authorization bill is passed with the 
requested amendments to the Helms-Biden legislation, we will be in a 
position to certify this summer that the agencies have met the 
conditions for payment of the last installment (Tranche III).
                                 ______
                                 
         Questions Submitted by Senator Ben Nighthorse Campbell
                     corruption/international crime
    Question. Over the past several years the Helsinki Commission, 
which I chair, has paid increasing attention to the multidimensional 
threats posed by corruption and international crime. There is an 
obvious nexus between corruption, international crime and terrorism. I 
have proposed that a special meeting of Ministers of Justice be 
convened to explore ways to enhance cooperation among the 55 countries 
of the Organization for Security and Cooperation in Europe (OSCE).
    Would you support such an initiative and what are some areas that 
should be given priority attention?
    Answer. The United States is a strong advocate of OSCE efforts to 
combat corruption. Corruption distorts the operation of free markets, 
impairs economic stability and growth, jeopardizes privatization and 
economic restructuring, impedes foreign investment, and undermines free 
and fair competition. Corruption is an impediment to development and 
democracy. Although we do not see a need for a Justice of Ministers 
meeting at this time, we will keep your suggestion under review and be 
prepared to reconsider it if circumstances warrant.
    Combating corruption and the international crime it facilitates in 
the OSCE region remains a top priority for the United States. The OSCE 
has implemented several programs aimed at combating corruption and 
supporting good governance. For example, in December 2001, the OSCE and 
Department of State Funded ABA/CEELI (American Bar Association Central 
and Eastern European Law Initiative) worked together to support 
Montenegro's Anti-Corruption Commission to draft a public official 
conflicts of interest law. OSCE and ABA/CEELI also worked with the 
Commission to initiate a public forum process to engage civil society 
in the development of this law. We continue to look for new 
opportunities to expand these good governance programs throughout the 
region. We support the OSCE's current arrangement to combat crime and 
corruption and encourage rapid implementation of OSCE efforts against 
terrorism.
               southeast european cooperative initiative
    Question. The Southeast European Cooperative Initiative--SECI--was 
conceived and promoted by the United States in an effort to foster 
regional cooperation, among twelve countries from the Balkan region, 
through task forces on narcotics, human trafficking, commercial fraud 
and other criminal activities affecting American interests. I 
understand that the United States is providing important leadership in 
the SECI initiative.
    Please describe some of the Department's ongoing work within the 
SECI framework and the potential benefits derived from U.S. 
participation.
    Answer. The Department of State has provided diplomatic and 
material support (through the SEED program) for the formation of the 
SECI Center to Combat Transnational Crime in Bucharest, Romania. In the 
wake of September 11, the SECI Center established a working group on 
anti-terrorism.
    We very much support the efforts of the countries of Southeast 
Europe to work together to combat criminal activity and believe that 
the Center, in its first full year of activity, has made important 
contributions to combating criminal activity across national borders. 
U.S. assistance to the Center began with assistance for the drafting of 
administrative and legal protocols necessary to the establishment of 
the Center. The United States provided computers and technical advisors 
from the FBI, DEA, USCS, and the INS to work with the Center in the 
creation of national task forces coordinating with the SECI Regional 
Center in Bucharest. These task forces target specific criminal 
networks, including those that smuggle cigarettes, which cause a 
significant loss of revenue for the countries of the region. For the 
past several months, the Department has supported these task forces by 
having U.S. officers provide on-site advice and guidance in Albania, 
Macedonia, Bulgaria, Bosnia, Serbia, and Romania.
    The SECI Center to Combat Transnational Crime has initially 
concentrated its work in three areas: customs fraud, trafficking in 
human beings, and narcotics smuggling. Due to information exchanges 
through the Center and coordination on cases through its task forces, 
there have been recent seizures of over one-half million cartons of 
counterfeit cigarettes by the commercial fraud task force; the 
narcotics task force has not only seized thousands of pounds of 
narcotics, but there have been successful cross-border prosecutions and 
several arrests and charges filed against businessmen and government 
officials. The human trafficking effort has created awareness of the 
problem in each of the SECI countries, which has resulted in numerous 
arrests of significant organized crime figures and government officials 
engaged in the sale of humans for sexual and labor exploitation.
                      human rights in central asia
    Question. Some observers have suggested that the human rights 
situation in some countries, such as Turkmenistan is so bad that they 
should be suspended from the OSCE, the way Yugoslavia was in 1992.
    Is there a point where the OSCE no longer plays a constructive role 
and, on the contrary, inadvertently lends a veneer of legitimacy to a 
brutal regime?
    How do you plan to address the deteriorating respect for human 
rights in Central Asia, especially in light of the reluctance of the 
Central Asian governments to cooperate with the OSCE on these issues?
    Answer. The OSCE has not relaxed its human rights expectations for 
the Central Asian republics; through its missions in Central Asia and 
the Permanent Council in Vienna, the OSCE continues to raise the issue 
of ongoing human rights abuses and lack of democratic institutions in 
the region. It is therefore important for the OSCE to continue to 
engage these countries. The process of having OSCE member states remind 
each other of their commitments, complemented by recommendations for 
improvements, is essential to building a more democratic, prosperous, 
and secure future for the region.
    In the case of Turkmenistan and several other Central Asian states, 
the OSCE is able, through engagement in the region, to improve 
faltering human rights and foster democratic development, while at the 
same time addressing urgent security, environmental and economic needs. 
Serious human rights abuses exist in Turkmenistan; however, they are 
not the kind of gross abuses (including widespread torture and 
genocide) that prompted the removal of Serbia from the OSCE. Our human 
rights and religious freedom reports provide a detailed picture of the 
situation in Turkmenistan. The OSCE continues to be an important forum 
to discuss human rights issues and promote steps toward democracy in 
Central Asia.
    We do believe that suspending participation in the OSCE should 
always remain an option should a government commit egregious human 
rights violations such as those of the former regime in Yugoslavia. 
However, this option should be weighed carefully against the 
opportunity costs of disengaging a country from the OSCE process.
    The deepened United States-Central Asia security relationship does 
not mean that we will cease our efforts to impress upon the governments 
of these countries that Central Asia's long-term stability and security 
depends on economic and political reform, particularly in the areas of 
combating corruption and respecting the rule of law and basic human 
rights. Rather, it offers opportunities for a deeper, more effective 
dialogue. Even modest reforms in these areas can build the foundation 
for more significant change in the long run. We continue to raise human 
rights issues at the highest levels of these governments and are in the 
process of expanding programming that promotes the basic elements of 
democracy and a vibrant civil society.
                              russia: osce
    Question. Russia, along with a small number of other former Soviet 
states, have complained that the OSCE is ``unbalanced,'' placing too 
great an emphasis on the human dimension. These countries have also 
complained that there is too much attention focused on formerly 
communist countries.
    Do you think there is any merit to this concern?
    Is the United States working to encourage Moscow to seek a 
political solution to the conflict in Chechnya?
    Answer. Respect for human rights, democracy, and the rule of law is 
an integral element of the OSCE and is fundamental to establishing 
enduring security across the OSCE region. We will not weaken support 
for human dimension matters, but we also will not neglect the economic 
and political military dimensions that are part of OSCE's comprehensive 
approach to security. We strongly support the OSCE, and we have 
discussed Russian concerns about the organization. However, we do not 
want to impinge on OSCE's flexibility, its consensus-based approach, 
its commitment to human rights, or other principles laid out in the 
Founding Document. We will continue to engage with the Russian 
Federation on the importance of all dimensions to ensuring stability 
and countering trans-border threats to security. U.S. Ambassador to the 
OSCE Minikes will meet with senior Russian officials in Moscow on March 
14-15 to discuss how we can cooperate more effectively. We will follow 
up on these discussions in Vienna.
    Regarding the conflict in Chechnya, our objectives have not changed 
since September 11. We continue to encourage Moscow to seek a political 
settlement, provide accountability for human rights violations and 
atrocities, and allow access for humanitarian assistance groups. We, in 
the Department, along with other senior U.S. officials, regularly 
engage the leaders of the Russian Government on these issues. While we 
appreciate Russian assistance in the campaign against terrorism and 
have noted some elements in Chechnya that have ties to international 
terrorist organizations, we have urged the Russian Government to take 
the necessary steps to address the situation in Chechnya and bring 
about an end to the conflict.
                      trafficking in human beings
    Question. Is the Department incorporating special programs on 
trafficking into its international law enforcement training?
    Answer. We are finalizing a new anti-trafficking in persons 
curriculum that will be targeted at mid-level police officers. We 
currently support a specific course on trafficking in women and 
children targeted at prosecutors and investigators. Trafficking in 
persons is also incorporated into our violence against women and 
children, and immigration training programs for mid-level law 
enforcement officers, prosecutors, and immigration officials. These 
various programs are implemented by the Department of Justice, Federal 
Bureau of Investigations, U.S. Immigration and Naturalization Service, 
and U.S. Customs Service.
    Question. Does the Department have the resources needed to combat 
this growing phenomenon that targets women and children, including the 
estimated 50,000 who have been trafficked into the United States?
    Answer. We appreciate continued congressional support to ensure 
that we are able to combat effectively trafficking in persons at the 
international level. The Office to Monitor and Combat Trafficking in 
Persons recently established a process with the regional and functional 
bureaus to review all anti-trafficking in persons proposals submitted 
to the State Department. We are currently reviewing these proposals to 
determine whether we have sufficient resources to fund those requests 
identified for further consideration.
                                policing
    Question. Is the Department considering supporting efforts to 
expand OSCE police training to other OSCE countries?
    Answer. The United States has supported OSCE's efforts to expand 
police training to other OSCE countries, on a case-by-case basis. The 
Kosovo Police Service School is proving to be an exportable model for 
efforts to train new ethnic minority, primarily ethnic Albanian, police 
recruits in Southern Serbia and Macedonia. The Framework Agreement, 
signed on August 13, 2001 in Macedonia, committed the parties to 
ensuring that the police services will generally reflect the 
composition and distribution of the population of Macedonia by 2004. 
The Framework Agreement called for the hiring and training of 1,000 new 
minority police officers by July 2003. To this end, the OSCE, the 
European Union, and the United States were invited by the parties to 
increase training and assistance programs for police. As of March 2002, 
107 minority recruits have graduated training. Under a similar model in 
Southern Serbia, OSCE has trained Serb, Roma, and Albanian police 
cadets in southern Serbia to deploy in the villages in the Presevo 
Valley region.

                          subcommittee recess

    Senator Hollings. The subcommittee will be in recess until 
10:30 tomorrow morning with the Secretary of Commerce.
    [Whereupon, at 11:49 a.m., Tuesday, March 12, the 
subcommittee was recessed, to reconvene at 10:30 a.m., 
Wednesday, March 13.]

 
DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003

                              ----------                              


                       WEDNESDAY, MARCH 13, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:28 a.m., in room SD-116, Dirksen 
Senate Office Building, Hon. Ernest F. Hollings (chairman) 
presiding.
    Present: Senators Hollings, Leahy, Kohl, Murray, Reed, 
Gregg, Stevens, and Domenici.

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

STATEMENT OF HON. DONALD L. EVANS, SECRETARY OF 
            COMMERCE

                           prepared statement

    Senator Hollings. We welcome you. The committee will please 
come to order. We welcome Secretary Evans and we have your 
statement in its entirety. It is made a part of the record and 
you can highlight it as you wish.
    [The statement follows:]
                 Prepared Statement of Donald L. Evans
    Thank you for the opportunity to appear before you to present the 
Department of Commerce's fiscal year 2003 budget request. Our focus, 
first and foremost, is funding the core mission of the Department and 
its bureaus, but as you all know, the tragic events of September 11th 
forever changed our Nation. The Administration faces even greater 
challenges now than when I came before you to present the fiscal year 
2002 budget. The President is committed to fighting and winning the war 
on terrorism, while at the same time harnessing the resources of the 
federal government to protect the lives and safety of all Americans. I 
hope to fully utilize the resources of the Department of Commerce to 
not only provide for the physical security of the Nation, but also to 
work with other agencies and the private sector to promote economic 
security. The President's budget request proposes increases only in 
those areas that are critical to strengthening the core services and 
products provided by the Department of Commerce.
    Our fiscal year 2003 budget request focuses on themes outlined by 
the President in his State of the Union address. Our total request of 
$5.3 billion represents a $107 million increase over fiscal year 2002. 
In addition to adjustments-to-base, our request supports the 
Administration's homeland security and economic revitalization 
priorities and continues our commitment to fund important work of the 
Department to provide infrastructure for technological innovation and 
to observe and manage the Nation's oceanic and atmospheric environment.
                           homeland security
    The fiscal year 2003 President's Budget includes more than $50 
million in increases for new homeland defense activities in the 
Department of Commerce. Included in this increase is $20 million for 
homeland security and critical infrastructure protection activities at 
the Bureau of Export Administration (BXA). BXA seeks to advance U.S. 
national security and foreign policy interests by regulating exports of 
critical goods and technologies that could be used to damage those 
interests, while furthering the growth of legitimate U.S. exporters to 
maintain our economic leadership. Budget increases in fiscal year 2003 
strengthen BXA activities that thwart the global spread of dual-use 
goods and technologies that can be used in biological, chemical, and 
nuclear weapons of mass destruction. To reduce the risk of 
proliferation, beginning in fiscal year 2003, BXA will devote $5.4 
million of this amount to post attaches in several countries abroad 
(including China, Russia, the United Arab Emirates, and Egypt); send 
additional export enforcement agents overseas on temporary assignments; 
and open two new field offices in the critical port cities of Seattle 
and Houston.
    Homeland security investments will also be made in the National 
Oceanic and Atmospheric Administration (NOAA), the Technology 
Administration (TA), and in central departmental management offices. 
NOAA's request includes a $23.1 million increase to enhance response 
capabilities and improve internal safety and preparedness by addressing 
vulnerabilities in weather and satellite systems and provide important 
hydrographic survey data around key ports in the Gulf of Mexico. The 
National Institute of Standards and Technology (NIST), part of TA, will 
continue to devote base resources to fund scientific research on 
chemical, biological, radiological, nuclear, and explosive threat 
detection and remediation; information security; air transport safety; 
and the safety of building structures and occupants. An increase of $5 
million will support the critical and urgent needs in structural fire 
protection and operational guidance for first responders and provide 
advanced measurements and standards to accelerate critical technologies 
that enhance the effective detection, prevention, response, and 
recovery management of natural and manmade disasters. A $2 million 
increase is requested for the Department Chief Information Officer to 
insure the protection of our nation's critical economic and 
environmental information systems.
                   economic information and framework
    The Commerce budget proposes to strengthen core economic activities 
in areas such as statistical programs and international trade 
compliance. The Bureau of Economic Analysis (BEA) supplies the nation's 
key economic statistics, including gross domestic product (GDP), which 
are crucial ingredients for business and government decision making. A 
program increase of $11 million will enable BEA to improve the 
statistical processing systems for its economic data, accelerate the 
release of major economic estimates, and incorporate new international 
economic data classification systems. Also, the Department has begun 
providing new quarterly estimates for the tourism industry and more 
accurate GDP estimates for ``new economy'' products such as local area 
networks.
    This budget includes a $247 million increase for the Bureau of the 
Census to significantly improve the breadth and quality of the 
information it collects and provides to the country by producing better 
measures of trade statistics, improved measurement of services in the 
new economy, and a new measurement of the impact of electronic business 
on the economy. The Department will also undertake an effort to 
significantly reengineer the 2010 Census. As a major part of this work, 
Census will launch the American Community Survey, which will provide 
detailed demographic data on an annual basis, rather than just every 
ten years. During fiscal year 2003, an increase of $33.7 million will 
fully fund data collection for two other cyclical censuses, the 
Economic Census and the Census of Governments.
    The International Trade Administration (ITA) is responsible for 
assisting the growth of export businesses, enforcing U.S. trade laws 
and agreements, and improving access to overseas markets by identifying 
and pressing for the removal of trade barriers. Among other program 
changes, the fiscal year 2003 budget proposes a program increase of $13 
million for trade compliance efforts in the areas of antidumping and 
countervailing duty activities, multilateral trade negotiations, and 
foreign trade barrier analysis. This increase includes $2.3 million to 
organize a domestic education campaign for U.S. firms on compliance 
issues and to place additional staff overseas in major markets with 
compliance problems. The President's Request also seeks an additional 
$2.6 million to open new offices in Senegal, Botswana, Tanzania, 
Mozambique, and Cameroon; reopen the Algeria office; and increase 
staffing in Ghana.
    A reduction of $16 million for the Economic Development 
Administration (EDA) will bring resources in line with congressionally 
authorized levels and program needs. EDA helps communities across the 
nation create economic opportunity by promoting a favorable business 
environment to attract private capital investments and high-wage jobs, 
principally through infrastructure investments and capacity building. 
While the fiscal year 2003 budget streamlines EDA programs, an increase 
of $2.5 million is requested for Trade Adjustment Assistance to firms, 
which provide technical assistance to U.S. manufacturers injured by 
increased imports. The Administration wants to ensure that sufficient 
funds are available through the Trade Adjustment Assistance program to 
help businesses that have been adversely affected by international 
trade.
    The Minority Business Development Administration (MBDA) is 
transitioning from an administrative agency to an entrepreneurial 
organization. MBDA is reorganizing, re-training current employees, and 
hiring expertise driven by entrepreneurship and innovation. MBDA's 
Reorganization Plan will reduce the number of supervisory layers, the 
time it takes to make decisions, and the distance between decision-
makers and citizens. MBDA will provide minority business development 
services, through its Minority Business Information Portal and local 
Business Development Centers.
         providing infrastructure for technological innovation
    The fiscal year 2003 budget strengthens key Commerce programs that 
provide the infrastructure that enables U.S. businesses to maintain 
their technological edge in world markets. Increased funding is 
requested for the laboratories of TA/NIST to work with industry to 
develop and promote measurement standards that support technological 
innovation. TA/NIST laboratories specialize in electronics, 
manufacturing engineering, chemical science, physics, materials 
science, building and fire research, and information technology. The 
fiscal year 2003 budget proposes an increase of $50 million to allow 
the Advanced Measurement Laboratory, a new facility designed to meet 
state-of-the-art research requirements, to become fully operational and 
fund relocation expenses. The budget also includes an increase of $17 
million for critically needed structural improvements at TA/NIST's 
Boulder, Colorado, facilities.
    Consistent with the Administration's emphasis on shifting resources 
to reflect changing needs, the fiscal year 2003 budget also proposes to 
significantly reduce federal funding for the Manufacturing Extension 
Partnership (MEP) program. MEP's original legislative design called for 
a phase-out of federal funds to each center after six years, with the 
goal of making each center self-sufficient. The fiscal year 2003 budget 
would return the program to its original design. The budget also 
proposes funding the Advanced Technology Program (ATP) at $107 million 
and proposes reforms designed to improve the program. These reforms 
would increase university participation, limit large companies' 
participation, and institute a cost recoupment element.
    The budget strengthens the spectrum management capabilities of the 
National Telecommunications and Information Administration by proposing 
$3.3 million to begin the process of spectrum management reform and to 
upgrade its radio quiet zone test facility in Colorado. The budget also 
proposes to terminate the Technology Opportunities Program. With the 
expansion of the Internet and related technologies into all sectors of 
society, the Administration believes federal subsidies are no longer 
justified to prove the usefulness of such technologies.
    The fiscal year 2003 budget proposes an increase of $237 million 
for the U.S. Patent and Trademark Office (USPTO) to address the 
agency's growing workload in the area of intellectual property. This 
budget increase represents a 21 percent change from last year's level 
and will allow the USPTO to initiate a five-year plan to enhance the 
quality of products and services and improve timeliness of patent 
application processing.
observing and managing the nation's oceanic and atmospheric environment
    And, finally the President's budget proposes a total budget request 
of $3.2 billion to strengthen key programs of the Department's largest 
and most diverse bureau, the National Oceanic and Atmospheric 
Administration (NOAA). This includes an addition of $84.3 million to 
improve extreme weather warnings and forecasts. The continuity of 
NOAA's satellites and severe weather forecasts is critical to meeting 
our 21st Century mission, and increases are proposed for satellite data 
and systems, weather research and supercomputing, and improved flood 
and river forecasts. An increase of $36.2 million is requested to 
improve NOAA's climate services, of which $18 million is for the 
Administration's Climate Change Research Initiative (CCRI), a multi-
agency effort to study areas of scientific uncertainty and to identify 
priority areas where investments can make a difference. The increase 
will allow NOAA to advance climate-modeling capabilities at the 
Geophysical Fluid Dynamics Laboratory; to develop a climate observing 
system; and to create partnerships to measure pollutant emissions, 
aerosols, and ozone.
    An increase of $90.9 million is requested to modernize NOAA's 
fisheries management to improve fisheries management in areas such as 
stock assessments, to procure a second Fisheries Research Vessel, to 
build a national fishery observer program, to better fulfill statutory 
and regulatory authorities, and to implement the National Environmental 
Policy Act (NEPA). As part of the Administration's energy policy 
initiative for fiscal year 2003, NOAA requests an increase of $8.7 
million for an energy initiative; of which $6.1 million is for an 
energy pilot program to provide more accurate temperature and 
precipitation forecasts and additional river forecast products to help 
the energy sector improve electrical load forecasting and hydropower 
management. Based on industry estimates, this investment will result in 
savings of $10 to $30 million annually in the pilot region after the 
second year of the demonstration. Expanding the pilot nation-wide could 
generate savings of over $1 billion per year. Funding for the energy 
initiative will help to establish and implement a streamlined energy 
permit review process (executed by the National Marine Fisheries 
Service) and institute energy costs savings measures at NOAA 
facilities.
    The Administration also proposes to transfer the National Sea Grant 
College program from NOAA to the National Science Foundation (NSF) in 
fiscal year 2003. Funding of $57 million is requested by NSF for this 
program. However, NOAA's budget continues to have primary 
responsibility for key ocean and coastal programs, including funding 
for ocean exploration, coastal zone management, coral reef, and marine 
sanctuaries programs.
    NOAH also requests an increase of $52.9 million to invest in its 
people and infrastructure. Investments in scientific and technical 
capacity, as well as facilities and equipment, are essential for NOAA 
to have a well-functioning agency. The budget request includes funding 
for essential facilities upgrades, maintenance of aircraft and ships, 
recruitment and training of NOAA Corps officers, and security of 
information technology systems.
    As I previously stated, this budget request for the Department of 
Commerce has been carefully crafted to focus on the core functions the 
American people rely on from this agency. We will focus on promoting 
innovation, entrepreneurship and exports, while spreading opportunity 
to all Americans and ensuring responsible stewardship of our natural 
resources.

                   OPENING REMARKS BY SECRETARY EVANS

    Secretary Evans. Thank you, Mr. Chairman. Are you ready for 
me to proceed?
    Senator Hollings. Please do.
    Secretary Evans. I will be happy to. Let me just highlight 
my written statement, and I would like to do that by saying to 
you, Mr. Chairman and Senator Gregg and other members of the 
committee that I am pleased to be here to present the 
President's fiscal year 2003 budget request for my Department, 
the Department of Commerce. This budget was carefully crafted 
and it reflects the core assumptions of the Commerce 
Department. These include promoting innovation, 
entrepreneurship and exports, and increasing knowledge and good 
stewardship of the natural environment.
    It also reflects the urgent needs of these challenging 
times. It targets the diverse components of the Department 
toward three great national goals: Winning the war on 
terrorism, protecting our homeland, and strengthening our 
economic security.
    For example, additional funds are requested for the Bureau 
of Export Administration to help halt the spread of weapons of 
mass destruction and combat terrorism. We are also proposing an 
increase for the National Institute of Standards and 
Technology. These world-class labs have more than 75 projects 
underway that support law enforcement, military operations, 
emergency service personnel, information security, and homeland 
security. NIST also will continue to research new ways to 
detect potential threats posed by chemical, biological, 
radiological, nuclear and explosive agents.
    On the economic security front, we are asking for more 
funds for the U.S. Patent and Trademark Office. America's 
competitiveness depends on innovation. We need to be able to 
process patent applications more quickly. To continue improving 
tracking our Nation's key economic statistics, including the 
gross domestic product, we are also asking for additional funds 
for the Bureau of Economic Analysis.
    As you know, business and Government decision makers need 
accurate and timely information, and America's exporters need 
to know they have a level playing field, so we are proposing an 
increase for our International Trade Administration to 
strengthen trade compliance efforts.
    To help communities, businesses, and workers transition to 
the 21st century economy, our 2003 budget also reflects 
streamlined Economic Development Administration programs, 
including additional monies for trade adjustment assistance.
    Our NOAA budget also demonstrates the Department's 
commitment to homeland and economic security. Predicting the 
weather and managing our ocean resources are critical services 
that further public safety and support economic activity. We 
are requesting additional funds for several important projects, 
including fixing vulnerabilities in weather and satellite 
systems so we can always depend on them; a research vessel to 
enable us to do a better job of monitoring fish stocks; survey 
data to enhance the safety of mariners, passengers, and the 
national economy. About 95 percent of America's non-NAFTA trade 
moves through the marine transportation system. Any disruption 
in the flow of goods would immediately effect our economy. And 
also, modernizing NOAA's fisheries to rebuild stocks and 
protect endangered species. Finally, climate change research to 
identify areas where can make a difference.
    And finally, let me say this Commerce budget reflects a 
careful, professional analysis of all Department programs and 
sets priorities for our resources in a post-9/11 world. I look 
forward to hearing your comments, Mr. Chairman and others, and 
I will be pleased to answer any questions that you might have, 
Mr. Chairman.

                      ADVANCED TECHNOLOGY PROGRAM

    Senator Hollings. Very good. You talked about increasing 
the National Institute of Standards and Technology and yet you 
literally choke off, so to speak, the Advanced Technology 
Program. We had the funding level for this program at one time 
up to over $110 million. It has been a political difference. 
The distinguished former chairman and I compromised at $60 
million, but you are not even expending the $60 million. What 
gets me is that is sort of benign neglect. That is what 
Moynihan used to say about the black population when he was 
working for Nixon.
    In other words, if you do not even ask for and solicit 
during the first and second quarters, like has occurred already 
this fiscal year, we are into the third quarter and no 
solicitation at all for the grants, if you do not solicit in 
the first and second quarters, obviously, you are not going to 
be prepared to award in the third and fourth. What do you have 
to say about that?
    Secretary Evans. Well, Mr. Chairman, I have to say we were 
behind and we should catch up. I would like to think that we 
have demonstrated our commitment to this important program and 
the 2003 budget by requesting an amount of $108 million in our 
2003 budget as opposed to our request in our 2002 budget of $13 
million.
    Senator Hollings. Yes.
    Secretary Evans. As I have mentioned before, I have felt 
like there were important reforms we should at least offer or 
recommend. Those reforms deal with letting universities lead 
these important projects. That had not been provided before. I 
think a good part of these projects belong on university 
campuses led by universities and so we have offered that 
reform. We are also offering the reform that the largest 
corporations will not lead these projects. It will restrict 
them to being partners with smaller firms.
    And then finally, there are other pieces of the reforms. I 
think the other one of significance is, in fact, a specific 
project is indeed a success, that the American people should 
share in some of that success being delivered back to the 
United States Government in the form of a royalty or whatever 
it might be called, but that is only in the instance of a 
success. We could say that the taxpayers' money went to invest 
in a project that turned out to be successful, a commercial 
success, and if it is a commercial success, I believe that the 
American taxpayer at least ought to have the opportunity to 
share in part of that.
    In a way, quite frankly, Mr. Chairman, I thought it could 
well be a way to fund the program on a long-term basis, but 
that would take some time. It is not going to happen in year 
one or year two, but if you have a system like that where part 
of the successes went back to the program it would fund the 
program over a long period of time.
    So, yes, we are behind in our awards of 2002. We should do 
everything we can to catch up and accelerate that and I think 
the 2003 budget demonstrates a good faith effort on our part to 
continue to look for ways to strengthen the program and 
maintain funding.
    Senator Hollings. One more time, by way of emphasis, this 
started almost 20 years ago down in your native Texas, in 
Houston, and has developed the superconductor. I think there 
were three of them there at Houston that won the Nobel Prizes, 
but the Japanese won the profits. They have correlated some 21 
entities and started producing it. We looked and said, wait a 
minute. All of this research, we begged, begged, begged the 
Government for research and still are, and fortunately so. 
However, we do not commercialize it, we do not realize in the 
globalization. I am a lot like Al Gore. I invented 
globalization.
    Secretary Evans. Congratulations.
    Senator Hollings. I tried my best and got in a plane back 
in 1960 and we went to all the countries in Latin America, all 
the ones in Europe. I have got 118 German industries now.
    But on that particular score, we really wanted to try to be 
helpful and immediately the charge was, that this was going to 
be pork and you all are just trying to give that money to 
industry and get some votes and what have you. Senator 
Danforth, then chairman, and I reconciled all of this and the 
one particular requirement of reconciliation was that I could 
not call up and get grants. The Secretary could not get the 
grants. The President could not get them. It was on a 
competitive basis after being vetted by the National Academy of 
Engineering.
    Now, I understand Deputy Secretary Bodman is leaning 
towards trying to make those awards himself. Have you 
understood this to be the case?
    Secretary Evans. No, I have not, Mr. Chairman.

              MANUFACTURING EXTENSION PARTNERSHIP PROGRAM

    Senator Hollings. Well, watch him. We have got the 
Manufacturing Extension Partnership Program. Now, we worry 
about that. You eliminate $95 million and that really 
revitalizes the economy and helps small business and everything 
else like that. They cannot buy the consultants. All big 
industry, even big government now, has consultants.
    I will never forget sometime back, I went down to one 
lumber company and they had not only rearranged their entire 
flow of materials to come in for increased productivity, but 
their ISO, their International Standards Organization. You and 
I talk exports, exports, exports, make them comply with 
exports, and now we cut out the $95 million. What about that?
    Secretary Evans. Well, Mr. Chairman, it is a period of very 
difficult choices, I would say that to you.
    Senator Hollings. This is the easy one, but we've got some 
difficult ones.
    Secretary Evans. Right.
    Senator Hollings. Have you ever heard of abortion? I have 
been debating that for 35 years. We still have it, and I can go 
on and on. I can give you some real hard choices, but this one 
works.
    Secretary Evans. Well----
    Senator Hollings. And everybody is happy with it except 
maybe Mr. Daniels at OMB, from what I understand.
    Secretary Evans. No. I guess what I would say, Mr. 
Chairman, is that I know when the program was founded in 1988, 
the plan was to allow this Federal support to be some seed 
money to help start up these centers across America. The 
initial plan was for the Federal funding to match State and 
local and private funding to get these centers up and going. 
After a 6-year period, then the centers, if they are successful 
centers, would move forward on their own without Federal 
support.
    So we think that is a reasonable model. I have looked at 
the program and have seen the many successes across America and 
do believe that there is a Federal role to play in helping 
start these centers across America. I think if they show the 
success and they are delivering the product, the results and 
the performance, that after a period of time, then they ought 
to be able to stand on their own through local support, State 
support, private support, and collection of fees, and maybe 
even again just a concept of you do not pay anything on the 
front end, but yes, indeed, if you see some efficiencies from 
the process or some results from this process, maybe there is a 
fee that you return back to the program after you receive the 
service.
    We do have underway an effort to look at just that concept. 
Is there a way to privatize this or to bring more private 
funding into it?
    So you are right. We have cut it back to some $13 million. 
That is continuing funding of a couple of these centers that 
have not yet been in business for 6 years and to fund central 
administration and coordination of the program and the 
development and dissemination of products and services to MEP 
centers. The budget proposes that we would eliminate funding of 
those programs that have been underway and are successful for 
more than 6 years.
    Senator Hollings. Well, if the proof of the pudding is in 
the eating, we have proven the success of it. Sometimes we 
verbalize it that way. Sometimes we say it is a pilot program 
to see whether it works, but it is working and still very, very 
much needed, and those who are working ought really to be 
supported because the States are literally strapped. We are 
$190 billion in the red. No State can get even $190,000 in the 
red, extending ports and slap you down and then you cannot 
finance your highways, your schools, and all of the States are 
way behind. They are into the technical training and everything 
else of that kind in order to attract the industry and develop 
it.
    They are into really a vigorous competition. When the 
Mercedes went down to Alabama, we had almost a $100 million 
package with different things that the State was willing to do, 
but Alabama put in $300 and some million. Mercedes required the 
purchase of some 1,000, 2,000 Mercedes school buses and that 
kind of thing.
    My point is that the States are in there and really sort of 
playing catch up where we can at the Federal level and really 
helping, and this is one program that really works.
    I love the attendance here. Let me ask just a couple of 
other questions. You emphasized the university participation, 
Mr. Secretary. On NOAA's Sea Grant program, they want to put it 
in the National Science Foundation with no State matching 
grants. There will be no university or extension program or 
outreach. There will be no university partnerships. You cannot 
go in two different directions at the same time. Get whoever 
who made the sea grant decision and give him weekend leave or, 
give him the part, the letter. You know what I mean; get 
somebody else.
    I want them to follow the Evans policy.
    Secretary Evans. Well, as you look across big government, 
you are always looking for ways that make it more efficient and 
more effective and the decision was made that the program would 
be more effective and the National Science Foundation could 
more effectively deliver this program. So let us take a number 
of the science programs that are across Government and 
consolidate them into the National Science Foundation. The Sea 
Grant program was one of those that they decided to move over 
where it is. NOAA's research is primarily applied research.

       NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

    Senator Hollings. NTIA, National Telecommunications and 
Information Administration, Larry Irving--I do not know who is 
over there now--did an outstanding job with small communities, 
bringing them up to speed. They do not have the wherewithal to 
get their health care, communications, and their education, 
public safety, social services, and everything out of a 
moderate $16 million, and the program is eliminated. It is 
working and if we do not help those rural areas, I know our 
Vice President one day went over, got enthused about it, and 
said that the Internet was, what did he call it, a civil right? 
Yes, a civil right. I told him I was still trying to get 
toilets in South Carolina, much less the Internet.
    Toilets would be a civil right if that is the way it was. 
We could not finance it. He had the program up to $45, $50 
million, but this is just a modest $16 million. What is your 
comment on this?
    Secretary Evans. Well, I agree with you, chairman, it is a 
modest $16 million. It does not mean we really could get the 
job done and will not get the job done and you need to get the 
job done. It is too important not to. That is why in the 
President's budget he put $700 million in the education budget 
that is specifically focused on this very issue. It is why he 
put some $600 million in the Department of Justice budget 
focused on this very issue, to get the kinds of technology to 
these various law enforcement agencies and fire departments, et 
cetera, in small communities across this country.
    Sixteen million dollars or $20 million, which has kind of 
been the average funding at TOPs for the last 10 years, will 
not get it done. It was started at a time when very few people 
were on the Internet. Computers were not in very many schools 
yet across the country. In the last 10 years, there has been an 
explosion of computers in schools, of computers in homes of 
Americans. We released a report called ``A Nation Online,'' and 
it shows that 54 percent of the people in America now are 
connected to the Internet. It shows that 94 percent of the 
children 5 to 17 years old have access to computers.
    So it is happening in a big way out there and I would say 
the TOPs program just does not do the job. It did the job in 
the beginning. The initial purpose was to bring awareness to 
communities as to what technology could do for them in 
developing their communities and providing information, and now 
it is just a much, much bigger issue than that.
    I know in the President's budget, also, there is $100 
million in the agriculture budget that is directed at getting 
technology, computers, Internet, to rural America, which is 
critically important. Listen, this is a huge issue and TOPs was 
a good program in the early 1990s to begin to make these small 
communities more aware of it, but we have moved way past TOPs. 
This is a serious issue that requires serious commitment and I 
think the President's budget clearly demonstrates that serious 
commitment of over $1.5 billion that is focused on this issue.
    The other thing I would add, chairman, is that in the last 
4 or 5 years, the private sector has moved into this in a big, 
big way. There are all kinds of private foundations now set up 
all across America that have centers that focus on this issue. 
I went to one myself called Oaktech, which is in a little Boys 
and Girls Club here in Washington, DC, where you have the 
children coming into the Boys and Girls Club and learning the 
computers and how they work and that is happening all across 
America.
    So while the TOPs, I thought probably did serve a good 
purpose in the beginning, I think we have moved way, way past 
TOP.
    Senator Hollings. Senator Gregg.

                      ADVANCED TECHNOLOGY PROGRAM

    Senator Gregg. Thank you, Mr. Chairman. We have been 
through the ATP discussion so many times. Let me simply say 
that I think we got a little too generous in the accounts for 
ATP, but we have had that discussion before.

                               SEA GRANT

    A couple questions. I want to join with the chairman's 
concern about Sea Grant. I have talked to you privately about 
this. I think this is one of those ideas that comes from 
somebody who knows nothing about what NOAA does, maybe a little 
bit about what NSF does, but does not appreciate the 
significance of sea grant to the NOAA program. NOAA may be 
applied, but the fact that they have sea grant gives them the 
access to this basic research.
    I used to be on the committee that had jurisdiction over 
NSF--in fact, I still am, I guess, on the authorizing side--but 
the NSF does not even have a directorate for oceans. NOAA's 
name contains the word oceans. The mood over there is to move 
departments around with nothing more than, I think, academic 
reasons, not substantive reasons. So I would hope that this 
would be put in Circular 86 at some point. Certainly, this 
committee will strongly oppose this effort.
    I have a couple of questions in addition to the chairman's. 
We have heard that those who tried to get access to the 
material from the World Trade Center site in order to conduct 
structural assignments encountered resistance from FEMA. NIST 
has the primary responsibility in this area. FEMA basically 
refused to grant access to the material, and even though they 
pleaded aggressively, they were not able to get it.
    I am interested to know what the status of that unfortunate 
turf war is and how NIST is going to pursue the structural 
review it has been tasked with.

             NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

    Secretary Evans. Well, Senator, I continue to be briefed on 
this and I cannot tell you that I know the absolute answer to 
that question yet, but I do know that, unfortunately, much of 
this steel has been recycled and is not available. We have been 
very disappointed in the number of samples so far that we have 
been able to actually get our hands on.
    I am not sure of the details of how the materials were 
handled and who is responsible but we do certainly have some 
steel samples that are available to NIST. The available samples 
should be very helpful in an investigation.
    Senator Gregg. Only a systematic failure could allow this 
to happen, in the consequence management area, which this 
committee has spent a lot of time focusing on. It would seem 
that there should be in place a structure which allows an 
agency like NIST, which has a legitimate role in reviewing the 
issue of how these buildings came down so that we could put out 
specs for architectural design and avoid this in the future, 
that they should have been incorporated. They certainly should 
not have been excluded by one of the other agencies that had 
primary jurisdiction over consequence management.
    I am wondering, one, how systematically this broke down, 
and two, what is the system that is being put in place so that 
it hopefully will never happen again, I mean, a structure to 
resolve this----
    Secretary Evans. Right. Senator, I am going to have to get 
back to you with the specific answer, and indeed I will, of 
course, as to exactly when it broke down and why it broke down 
and also respond to your request, which is the right one, which 
is what are we going to do to make sure it does not happen 
again. I am not aware of, right now, exactly what the time line 
was.
    We may have been denied access, or if, in fact, we even 
were, we may have requested late and that is just something 
that I am going to have to take a hard look at and I will 
certainly get back to you.
    [The information follows:]

                  NIST Activities Since September 11th

    FEMA and the American Society of Civil Engineers made trips 
to New York City in October 2001, and made arrangements to set 
aside some of the steel for the investigation. Although some of 
it was subsequently misplaced, most of the marked samples have 
now been sent to the NIST site in Gaithersburg, Maryland. NIST 
and FEMA are currently working together to find a way to 
initiate the investigation.
    Of the steel that was marked for transport to NIST, most 
was later brought to NIST. However, some of it did not make it 
here and is believed to have been included with the steel sent 
for recycling by mistake.
    NIST and FEMA signed a Memorandum of Understanding (MOU) on 
March 29, 2002, that establishes a framework for NIST to serve 
as a research resource for FEMA in the areas of fire, disaster 
prevention, and homeland security. As part of this MOU, FEMA 
and NIST will establish a quick deployment mechanism that may 
be activated when both the Administrator of FEMA and the 
Director of NIST determine a need for a NIST response to 
extreme events.
    NIST has been working since the events of September 11 as 
part of the FEMA-funded Building Performance Assessment Team 
(BPAT) study. NIST was not denied access to the site and/or 
relevant information and was not late in making requests to be 
involved. As a result of the recently-signed MOU between FEMA 
and NIST described above, a framework of cooperation has now 
been established for any future disasters.

                    BUREAU OF EXPORT ADMINISTRATION

    Senator Gregg. Another issue that involves preparation for 
terrorism, the Bureau of Export Administration, they are asking 
for additional attaches overseas.
    Secretary Evans. Correct.
    Senator Gregg. I think this committee, or at least I, was 
under the impression that the State Department Bureau of 
Verification--I think that is the title of it--had 
responsibility for reviewing whether or not these dual-use 
products ended were being used for inappropriate activity. I 
guess my question is, who is doing what here? I mean, does 
State have a role here? Are your roles overlapped? Is there----
    Secretary Evans. We certainly----
    Senator Gregg [continuing]. Some understanding as to who is 
doing what?
    Secretary Evans. There is certainly coordination between 
our two Departments, but we certainly feel a strong 
responsibility for regulating the export of dual-purpose 
products, the export of legitimate products, and the high-tech 
products that might be used around the world. So there is 
coordination between the two, but I would say to you, we feel 
that the responsibility of providing the licenses for these 
dual-export products, and for making sure that we do not have 
illegal transshipments around the world, are two of the central 
reasons for opening up offices, as you have mentioned, around 
the world. We have opened up in Beijing and China and Singapore 
and India and UAE and Egypt, I think are the main ones.
    Senator Gregg. Should we expect that the State Department 
will tell us that their Bureau of Verification is no longer 
undertaking this effort?
    Secretary Evans. I am not sure what they will tell you. I 
feel a pretty good sense of our responsibility for licensing 
products that might be considered dual-use kind of products 
around the world.
    Senator Gregg. Is it possible that we could get from 
Commerce and from State a memorandum of understanding as to how 
these two agencies are going to interact?
    Secretary Evans. Sure. You bet.
    Senator Gregg. We have to know that there is not going to 
be duplication.
    Secretary Evans. Sure. I would be happy to, Senator.
    Senator Gregg. Thank you. Thank you, Mr. Chairman.
    Senator Hollings. Thank you.
    Senator Kohl had questions about the Manufacturing 
Extension Partnership Program and he had another commitment and 
had to leave, so we will leave the record open for his and any 
other Senator's questions.
    Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman. I would like to put 
my statement in the record, and I have some additional 
questions.
    Senator Hollings. It will be included.
    [The statement follows:]

             Prepared Statement of Senator Patrick J. Leahy

    Mr. Chairman, thank you for calling this hearing today on 
the Department of Commerce budget request for fiscal year 2003. 
I would like to thank Secretary Evans for coming before this 
Subcommittee to discuss the President's request.
    President Bush has sent Congress a $2.13 trillion budget 
that would provide billions of dollars in new spending for two 
top priorities--the war on terrorism and homeland security--but 
would squeeze much of the budget for domestic programs. While 
he has properly emphasized the need to combat terrorism, the 
President's domestic agenda is riddled with many opportunistic 
cuts, motivated by ideology and special interests, that will 
hurt America's economic recovery. I am very concerned that we 
will no longer be able to adequately support essential economic 
investment programs in this country if Congress accepts the 
President's budget request. His severe under-funding of many 
worthwhile small business and economic development programs is 
a glaring example.
    The Manufacturing Extension Partnership (MEP) program was 
authorized in 1989 to help manufacturers, especially the 
nation's small manufacturers, adopt new technologies, processes 
and business practices to be more competitive on the world-wide 
market. The MEP network now consists of over 2,000 
professionals, working out of more than 400 offices in all 50 
states to provide direct advice and assistance to 
manufacturers. While Congress appropriated $106.5 million for 
the MEP program last year, the President has requested only $13 
million for the program in the coming year, a drastic cut that 
would essentially mean the end of the program.
    MEP is one of the most successful federal-state 
partnerships in government. It is a cost-effective, private-
public partnership that helps American manufacturers modernize 
to compete in the demanding global marketplace. It has helped 
thousands of small manufacturers--who employ 11.5 million 
people, or two-thirds of all manufacturing employment in the 
United States--increase sales and earnings and decrease 
materials and costs. Since these small manufacturers are the 
major suppliers for larger manufacturers, they are a major 
component of the national economy. We must do all we can to 
ensure their long-term survival and health.
    If MEP were to end, the Vermont Manufacturing Extension 
Center, and other centers all around the country, would be 
crippled in their ability to serve the ever-increasing needs of 
small- and medium-size manufacturers. During these uneasy 
economic times, we should be expanding our efforts to help 
businesses stay afloat instead of cutting them. I support full 
funding for the MEP program at the authorized level of $110 
million and hope Congress will do the right thing and properly 
invest this and other economic development programs this year.
    The President repeatedly called for an economic stimulus 
package to jumpstart the economy. And Congress heeded that 
called last week by a bipartisan stimulus plan by overwhelming 
margins. We all know the need is out there to forge ahead with 
our economic growth. Now is certainly not the time to cut these 
businesses off and tell them to sink or swim on their own.
    Thank you again, Mr. Chairman, for holding this important 
hearing. I look forward to working with you and Secretary Evans 
to ensure that the needs of our nation's businesses are met in 
next year's Department of Commerce budget.

    Senator Leahy. Mr. Secretary, it is good to see you again.
    Secretary Evans. Thank you, Senator.

              MANUFACTURING EXTENSION PARTNERSHIP PROGRAM

    Senator Leahy. We appreciate you coming over to the 
Internet Caucus event we had the other day and appreciate your 
kind note afterward. It is something that we will continue to 
work on.
    You and I have discussed it a couple of times already and 
obviously you know my concern about rural areas. That can be 
rural areas of Texas or rural areas of Vermont. I often joke 
that I sit up at my farmhouse in Vermont, out there on a dirt 
road and I have got my computer and I am in my jeans and my 
sweatshirt, and if I could have two things, broadband there and 
the ability to vote by phone, I do not think I would ever 
leave.
    I do not have either, but at least give me one of those. 
For one, we would have to probably change the Constitution, but 
for the other one, we could do.
    I look at the budget, the $2.13 trillion budget, which is 
amazing because I remember the debate when I first came here 
about a $300 billion budget, but we have some major problems, 
the war on terrorism, and the President has been very 
supportive on that, and homeland security. I do not, however, 
categorize security as our only domestic priority.
    I look at the Manufacturing Extension Partnership Program. 
We authorized it 11 or 12 years ago, Mr. Chairman--I think it 
was 1988--to help manufacturers, especially small 
manufacturers, develop new technologies and processes and 
business practices so they could be competitive worldwide doing 
the things that they might not be able to do in their own small 
business, but with this help, they can.
    We appropriate $106 million, actually $106.5 million, for 
the program last year. MEP now has 2,000 professionals in all 
50 States. But after we appropriated that $106.5 million, the 
President cut it in his budget to $13 million this year.
    I find that matter somewhat troubling, Mr. Secretary. We 
have all kinds of businesses in our State of Vermont. We have 
IBM with 6,000 employees that makes the fastest, most advanced 
chip in the world. We have a lot of very small businesses, 
small manufacturers developing advanced products and everything 
else, but they are small. A private partnership like this, that 
the business community supports it, workers support it, the 
State supports it, why cut it so much?
    Secretary Evans. Senator, I go back to what I said earlier. 
I think it is just the philosophical position that the Federal 
Government had an important role to play in getting these 
programs started. As was stated in its initial mission 
statement, the core purpose was to provide funding for a 6-year 
period to give these centers time to get up and running, and 
beyond that period should be self-sustainable through private 
funding, State funding, local funding, or fees, and fees could 
be on the front end or the back end. If someone goes and 
receives a service that they deem to be helpful or useful and, 
in fact, increases the profits of that small business or that 
small manufacturer, it seems reasonable that maybe you might 
share some of that back with the center that helped you 
increase your profits.
    I think it is just the philosophical position of the 
original stated purpose of the MEP program was a sound one and 
it was an appropriate role for the Federal Government to play 
and that the ongoing funding that we have proposed in the 2003 
budget reflects that.
    Senator Leahy. Mr. Secretary, if I might----
    Secretary Evans. Sure.
    Senator Leahy [continuing]. I would be able to accept that 
if we are talking about these companies that have benefitted by 
it just competing within their States, such as the companies 
that are in Texas are just competing within Texas or Vermont is 
competing within Vermont. But more and more, these companies 
are part of our worldwide economy. U.S. security, it is not 
just our military, it is also our economy. We have a large 
balance of payment deficit. We have got to export more, and a 
lot of these small companies are the ones that develop the 
ability to export.
    I would hope, and we are going to be debating it within 
this committee, of course, but I wish the administration would 
go back and look at that again because I really think that 
there is a national interest involved here, one that helps us 
as a Nation. Not just my State of Vermont, not just New 
Hampshire or South Carolina or Washington State or Rhode 
Island, but the country as a whole benefits from the ability to 
become more efficient, the ability to produce and innovate, and 
the ability to export. Our economic ability to face the rest of 
the world is extremely important.
    For the same reason, I would hope that you look again at 
cutting the National Telecommunications and Information 
Administration. If we do not do something to close the digital 
divide--and I know there has been some discussion here--if you 
do not, then rural America is going to be cut out.
    I will try to state this very carefully, but in a 
discussion recently within the administration, there was some 
discussion about a particular program that is in Vermont and 
doing great because it has a national security implication. 
Now, fortunately it was in Vermont and dispersed from other 
aspects of the program. I realize that is terribly vague, but 
you will hopefully understand what I am talking about. But this 
Vermont company is crippled by the fact that they are in an 
area where they do not have broadband. In order to track the 
engineers, they need faster Internet connections to create 
something that is vital to our national security.
    There are a lot of things that could be in a lot of rural 
areas. We can disperse a lot of our abilities throughout the 
Nation, which has a security aspect to it.
    Also, more importantly, we cannot tell our children, if you 
are in a rural school, then you do not have the advantages you 
might have in an urban center as we go into the digital age.

                   INFORMATION INFRASTRUCTURE GRANTS

    Secretary Evans. I agree with you, Senator. I think we are 
headed in the same direction. I do not think there is any issue 
that is more important. There are many as important, but the 
deployment of broadband across America, for national security 
reasons, economic security reasons, homeland security reasons, 
health reasons, I mean, this country should be headed in that 
direction and we are. Again, you refer to the TOPs program. I 
agree that we need to close the digital divide as fast as we 
can and I would say to you that $20 million in the TOPs program 
just does not even begin to scratch the surface. What you need 
is big commitments like have been presented in the budget, $700 
million in the Department of Education and $600 million--and we 
have already gone through the numbers.
    I think we are headed in the same direction. I am as 
anxious as you are to make sure that every American is 
connected.
    Senator Leahy. We may keep in touch on that, Mr. 
Secretary----
    Secretary Evans. Sure.
    Senator Leahy [continuing]. And take a look at my 
statement.
    Secretary Evans. I sure will. I sure will, absolutely.
    Senator Leahy. Thank you, Mr. Chairman.
    Senator Hollings. Senator Domenici.
    Senator Domenici. Thank you very much, Mr. Chairman.
    Mr. Secretary, it is good to be with you.
    Secretary Evans. Thank you, sir.

                      BUREAU OF ECONOMIC ANALYSIS

    Senator Domenici. I want to just share quickly an 
experience with the committee and with you and then I want to 
ask you a couple of questions about the Bureau of Economic 
Analysis and the control you have over entities that collect 
data on which we act here.
    Mr. Chairman, I was up in northern New Mexico, at an 
isolated little town named Mora, went to church and then had a 
meeting there at the little restaurant with maybe 30 people. 
This was about 3 years ago. I then sat down and asked, ``what 
do you want to talk about?'' Would you believe that if you 
would have asked me to write down the six issues that might 
have been discussed in Mora, I would have been wrong because 
what they really wanted to know way up there was when will we 
be able to have computers in our homes for our kids? Now, this 
is about an 80 percent Hispanic part of New Mexico.
    I want to tell you, since that time, we have spent almost 3 
years working with the State of New Mexico to try to find out 
how well or how not so well rural areas were serviced by things 
like the underground lines, fiber optics and the like, that 
make rural areas as capable of handling computers and high-tech 
kinds of businesses as a large city or town. That is what is 
going to make rural America have more paychecks, is when 
companies recognize that for the computer age, they can be in a 
little town and do their business. You can have an engineering 
firm that does all its business via the computer. They could be 
situated in a little town of 8,000 people if they like it 
there.
    So I think whatever programs you have that move in a 
direction of helping rural America get the basic infrastructure 
that is needed to lift the small community into the area of 
having the capacity to handle the modern day computer-type 
activities is probably as important a job as you can do. These 
are the highways of the future, not the paved highways. The 
highways are how much computer capacity do you have in little 
towns, big towns.
    Having said that, I came today to congratulate you and your 
Department and the President on something that is in the budget 
and that was prompted because I read, and now I have been told 
that it is correct, that as we came out of this recession, mild 
as it was, that in the first quarter coming out of the 
recession, the productivity of the United States was measured 
as an increase of 5.5 percent. Did you see that?
    Secretary Evans. I did.
    Senator Domenici. Now, that is unheard of. Most of the 
time, when you are coming out of a recession, Mr. Chairman, 
your productivity is zero or negative. The fact that it is 5.5 
percent permits some people to say that something very 
different is at work in this American economy. Nobody yet says 
what it is, but I concur. Something very different is 
happening.
    Or, we do not know how to measure productivity and we are 
measuring it improperly. I have a hunch that we do not know how 
to measure productivity properly, but I do not have a hunch 
that the 5.5 percent is wrong. I do not know that much. But 
sometimes we forget to put money into your budget for you to 
handle the various analytical functions that are yours.
    I understand that with reference to the Bureau of Economic 
Analysis and the Bureau of the Census, you are asking for more 
money for each one of those, and I want to say as one Member of 
the Senate, I want to help you with the maximum amount you need 
for the professional work of this kind of fact finding for the 
United States. I understand that you may have a new e-mail 
program that you want to add. Do I understand that correctly? 
Could you share that with us?
    Secretary Evans. Senator, I am not sure that I know the e-
mail program that you are referring to. We are continuing to 
pour a lot of money into our information technology within the 
Department of Commerce. You highlight a very important part of 
our budget, which is it is hard to make good decisions if you 
do not have good information and good facts, and so we have 
added a substantial amount to the Bureau of Economic Analysis 
as well as the Bureau of the Census----
    Senator Domenici. You do not have a new approach to BEA's 
understanding and measurement of e-business?
    Secretary Evans. Oh, e-business.
    Senator Domenici. E-business.
    Secretary Evans. I am sorry. E-business, yes, absolutely, 
we do.
    Senator Domenici. What is it?
    Secretary Evans. We are going to measure e-business in this 
economy and we are going to also measure the service component 
of this economy. In the past, Senator, when you look at the GDP 
numbers, we look at the manufacturing sector, we look at the 
mining sector, but not the service sector. We all know what a 
large part of this economy the service sector is now. So we are 
also committing funds to measure that very important segment of 
the economy.
    But yes, on e-business, we think it is vitally important 
that we have good, accurate information as to how much 
information----
    Senator Domenici. Do you have money to do this program?
    Secretary Evans. Yes, sir.
    Senator Domenici. It was within your base----
    Secretary Evans. Yes, sir.
    Senator Domenici. Mr. Chairman, thank you very much for 
recognizing me, and I might say to you in all the work that you 
do in the Commerce Committee and Budget Committee, I think you 
share with me how important it is that productivity be measured 
correctly.
    Senator Hollings. Exactly.
    Senator Domenici. It is actually the force that drove us 
for the 10 years in a recovery and will drive us again, and 
something is different out there. It may be new kinds of 
businesses that are changing productivity. Surely, productivity 
was very, very high throughout the entire 10 years of the 
recovery, and now it is almost in a booming stage which means 
people do not lose money in their paychecks during the 
recession. Paychecks may still go up----
    Secretary Evans. Right.
    Senator Domenici [continuing]. Even when you are having a 
recession. It is very interesting.
    Thank you, Mr. Chairman.
    Senator Hollings. Thank you very much.
    Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman. Mr. 
Secretary, welcome. It is good to have you here again.
    Secretary Evans. Thank you.

                   INFORMATION INFRASTRUCTURE GRANTS

    Senator Murray. We appreciate your being here. Obviously, 
all of us are concerned about homeland security and the war on 
terrorism, but we are particularly concerned about your budget, 
what you do on investment in our economy. My home State of 
Washington has an unemployment rate that is still over 8 
percent and we are hurting very badly right now. We are second 
only to Oregon in terms of unemployment rates and the 
adjustments that you have are extremely important to us as we 
try to come out of this recession. I am glad to hear the rest 
of the country has, but we are really hurting.
    I wanted to just second what the chairman and Senator Leahy 
said about the TOPs program, the Technology Opportunities 
Program. I know that you think it is a small amount of money, 
but it has made a tremendous difference and needs to continue 
to make a tremendous difference in our rural communities who 
are the hardest to reach. They are the ones that everybody else 
gets taken care of, then we cut the programs and then our most 
rural communities, furthest, hardest to reach, are left out in 
the cold, and I do think that program makes a difference, Mr. 
Chairman. I hope to work with you to restore the funds for 
that.
    I also want to echo the chairman's concerns about the Sea 
Grant program. It is a very important program in my home State 
of Washington. It has been at the University of Washington 
under the Office of Marine Environmental Resource program since 
1968. It does an awful lot of really good work, and we are 
concerned changing who administers it will change some of the 
functions and important things that are going on in terms of 
research at the University of Washington, so Mr. Chairman, we 
will continue on that, too.
    I do have a couple questions for you today. One of them has 
to do with your proposal to create a new Bureau of Export 
Administration field office in Seattle. Can you talk about 
that? I think you have an increase in the Bureau of Export 
Administration's budget that includes an office in Seattle. 
Could you talk a little bit about what you see with that?
    Secretary Evans. Well, only that we are adding two offices 
domestically. One is Seattle. One is Houston. Again, part of 
our homeland security, national security initiative is to make 
sure that we are doing everything we can to work at the ports 
and deal with the issues of products, goods that may be moving 
out of this country for the wrong kind of reason.
    We had a recent case in the Port of New York where we found 
some individuals trying to ship some night vision equipment to 
the Hezbollah, and so it is clear that our ports are areas 
where these products may tend to leave our country and we 
thought it was important to make sure we had the facilities in 
place, the resources in place to watch that and enforce our 
ports.
    Senator Murray. How do you see that impacting the flow of 
trade between Washington State and other countries?
    Secretary Evans. I do not see it impacting it at all. I 
just see it as an enforcement office. It is there to make sure 
we are enforcing our laws. But I do not see it impacting the 
flow negatively or positively.
    Senator Murray. Okay. Can you give me a quick update on 
where we are with the softwood lumber dispute with Canada? I 
know it is a really complex issue, but can you just tell us 
where you see it right now?
    Secretary Evans. Sure, just ongoing dialogue on the 
theories that both sides are sitting down in good faith to talk 
through some very, very difficult issues. I think, one, it is 
safe to say that the discussion has progressed farther than 
ever before in terms of dealing with this decades-old issue. 
Everybody is facing a March 21 final determination date, and so 
that is kind of a hard date that everybody is working against. 
I am going to remain optimistic.
    Senator Murray. There are a lot of issues involved in this, 
and I know you know them. I just wanted to bring to your 
attention the plight of one business in my State. It is Lindall 
Cedar Homes. They manufacture pre-fabricated homes and they are 
the only pre-fabricated home manufacturer that may be subject 
to duties imposed on Canadian lumber. That would put them at a 
huge disadvantage in the Nation and I hope that we can work 
with you to see if we can get an exclusion for them. It will 
have an impact on several hundred people, businesses, an 
important one for the region. As I said, we have an 
unemployment problem now. We do not need to add to it. It is a 
good business and we want to keep them, so I would like to work 
with you as you reach that date to see if we can get an 
exclusion for them.
    Secretary Evans. Very good, Senator.
    Senator Murray. Thank you.
    Senator Hollings. Thank you.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman, and 
welcome, Mr. Secretary.
    Secretary Evans. Thank you, Senator.

             NORTHEAST ECONOMIC DEVELOPMENT REPRESENTATIVE

    Senator Reed. Thank you for being here this morning.
    The Economic Development Agency is a vital player up in New 
England. They have been very helpful in my home State of Rhode 
Island and adjoining States. We have worked with them in very 
innovative and very successful programs.
    I understand that there is no EDA New England office 
director appointed yet and that all of the business is being 
forwarded to Philadelphia, the super-regional office. Is that 
type of some reorganization or policy change?
    Secretary Evans. Senator, I am not sure, to tell you the 
truth. I will have to get back with your office or with you and 
I will certainly do that.
    Senator Reed. Thank you, sir.
    [The information follows:]

             Northeast Economic Development Representative

    The Economic Development Administration does not have 
office directors for individual states or regions. EDA does 
have economic development representatives located around the 
country that act as the agency's primary point of contact. EDA 
is committed to providing the highest level of service to all 
of its customers and stakeholders. While EDA has a long history 
of outstanding service to its customers, we strive to 
continuously improve operations to leverage our limited 
resources to the greatest extent possible.
    Toward this end, EDA is undertaking a number of initiatives 
to transform itself into a results-oriented agency. These 
management improvement efforts will align the workforce with 
organizational goals, eliminate redundancy and confusion, align 
competencies with activities, and will deploy resources to best 
serve the needs of communities.
    EDA has six regional offices located in Philadelphia, PA, 
Atlanta, GA, Chicago, IL, Austin, TX, Denver, CO and Seattle, 
WA. EDA also has a limited number of staff members, Economic 
Development Representatives who report to the Regional Office 
Director, and usually, although not always, work in one-man 
offices located in a number of different locales throughout the 
country. As management improvement efforts progress, EDA will 
continue to manage its human resources by assessing the 
competing needs of the agency and making decisions that fit 
within the constraints of its budget.
    EDA understands the importance of an effective EDA presence 
in New England and places a high degree of importance on 
maintaining the level of service and technical assistance this 
region has historically received. EDA is committed to taking 
the appropriate measures to continue its excellent level of 
service and assistance in the New England area.

                         EDA PROGRAM REDUCTION

    Senator Reed. I will also note that the EDA's budget is 
being streamlined by $16 million, which in a creative way is 
the change. Can you talk about the reduction in EDA, the 
proposed reduction, because it is a very valuable agency.
    Secretary Evans. Oh, it is. Again, Senator, it is 
priorities. There are a lot of tough choices to make. We are at 
war, and so we are doing the best we think we can to optimize 
the allocation of the resources that we have. When it comes to 
EDA, I think we have a terrific team of people. We still have a 
substantial amount of money in the budget, $350 million, and 
what I would say is that I think the focus of EDA has been 
changing over the last few years. Where there was a serious 
focus on base closures for a relatively long period of time 
that required a substantial amount of effort and a substantial 
amount of funding, the need is not there, as we saw in the 
1990s.
    I think we are moving much more toward community 
rebuilding, trade adjustment assistance. We have added $2.5 
million within the EDA budget to trade adjustment assistance. 
So the focus is starting to move away from base closure, 
rebuilding, and economic development to community development, 
community infrastructure, communities particularly that have 
been impacted by opening up trade around the world. We all know 
some of the industries that are dealing with a difficult period 
because of trade and so this program will be part of helping 
that, the transitioning economy by supporting and helping local 
communities.
    So there is still a substantial amount of money in the 
budget. There is a stronger focus toward trade adjustment 
assistance and communities that are dealing with trade-related 
issues.

                      TRADE ADJUSTMENT ASSISTANCE

    Senator Reed. Thank you, Mr. Secretary. You have actually 
anticipated my next question, which is the trade adjustment 
assistance budget, and as you know, it is an increase of $2.5 
million. I understand, however, that the Department's original 
request was for $5 million. I appreciate the increase, but I 
think it goes also to the issue of free trade and also the 
issue of fast track authority.
    We all recognize, and we take different positions on this, 
but I think we all recognize that any major change in our trade 
policy forces disruptions in local communities. In the long 
run, we might be better off, but in the short run, there are a 
lot of people who are disadvantaged. It very well may be that, 
as we go forward, we may need even more than $2.5 million in 
the trade adjustment account, and I would hope that you would 
be sensitive to that.
    In my part of the country, we have a lot of industries, 
manufacturing particularly, that are holding on against stiff 
competition, and when we change the trade laws, the competition 
gets even fiercer. So this trade adjustment is very important. 
It has been increased, but I would suggest it might even go up 
even further.
    Secretary Evans. Thank you, Senator. We will be sensitive 
to it. It is a big issue. I am not sure that the programs of 
the 20th century fit the programs of the 21st century, and we 
are certainly looking very hard at this whole trade adjustment 
assistance area.
    Senator Reed. Let me conclude by adding my comments in 
support of the Technology Opportunities Program that has been 
highlighted by many of my colleagues. It is an important 
program and your efforts in this regard will be appreciated, 
also. Thank you, Mr. Secretary.
    Secretary Evans. Thank you, Senator. I appreciate it.

                   INTERNATIONAL TRADE ADMINISTRATION

    Senator Hollings. Mr. Secretary, Senator Stevens left 
momentarily but will be right back.
    When you are talking about EDA, my understanding is now 
that there is an emphasis in the administration, in your 
administration, of higher profile projects rather than 
community needs. We just got where highways 301 and Interstate 
26 intersected and we extended the sewer line. We saved about a 
dozen businesses out there and we saved over 100 and some jobs. 
Greenville is a higher profile area and they have got 
industries after industries and you can always assist in 
getting those industries. But you go higher profile in the 
little rural areas with economic development. The 
administration wants economic development, not higher profile. 
Look at that from the----
    Secretary Evans. I sure will, Mr. Chairman.
    Senator Hollings. Another thing. When Senator Domenici was 
asking about the productivity, you have got to have an industry 
to produce in order to measure productivity. We have lost 
50,900 textile jobs alone. Do you think that you could come 
down there for a meeting, that you could then get President 
Bush to campaign for me like he did for Senator Domenici?
    Secretary Evans. Mr. Chairman, I always love coming to your 
State. I have been down there a few times and I look forward to 
coming back to your State and talking to the fine people of 
South Carolina.
    Senator Hollings. We have got to do something on that 
productivity. I mean, there is no question. Trying to bring us 
into the reality of what trade is doing, because we are in the 
hands of the Philistines. These producing ones are now moving 
their production from the free trade United States to the 
protected trade of Malaysia or Mexico or China. We can go right 
on down, but you move them all into protectionism and then they 
shout at me, free trade creates jobs, but it creates jobs in 
China, not in the United States. I am losing them faster than I 
can possibly produce them.
    On that particular score, see if you cannot do statistical 
studies to find out exactly the consumption of America 
represented in imports. We had, back in the 1970s, we had 
testimony that the figure was about 41 percent. I know it is 
over 50 percent.
    I am looking, and the clothing in this room, a good two-
thirds is imported of the clothing. The shoes on the floor in 
this room, 86 percent of the shoes are imported. So we can get 
by without shoes and clothing. What else do you expect them to 
make?
    My trouble is, they are making the shoes, the clothing, the 
airplanes, the computers, everything. Now, that is the kind of 
competition, and you have got to have a manufacturing capacity 
in order to have a strong economy. See if we can get that 
measured. Do you remember one hearing we had originally last 
year and you said you were going to work on that for us?
    Secretary Evans. Yes. I know the import statistic number is 
we import about 13 percent of our gross domestic pre-product. I 
know that number, and we continue to do what we can to do a 
better job of delivering more accurate information, more timely 
information. This is one area where we have specific focus 
because I have been troubled that it takes so long to release 
the information on imports. I have always wondered why we have 
to wait some 60 to 75 days after the end of the quarter before 
we can release the information, the data.
    So it is something we continue to put a lot of emphasis on, 
Mr. Chairman. The last time I looked at the import number, 
though, it reflected about 13 percent of our GDP.
    Senator Hollings. On this, and I will yield to Senator 
Stevens, you have got a tremendous resource. People do not 
realize what they have over there in the old Bureau of 
Standards. One of the best defense projects was a RAMP, Rapid 
Acquisition of Manufactured Parts. We are in the gulf and a 23-
year-old destroyer breaks down on a part. They do not make it 
anymore and have not made it for the last 15 years or whatever, 
and then it just languishes there in the gulf 1 month, 2 
months, whatever it is before they can finally wire back, get 
it measured up, everything else like that.
    Now what we do is we computerize. That came out of the 
Department of Commerce, not DOFA. Senator Stevens is heading up 
DOFA all the time, and I work with him. Now, they computerize 
the actual parts for all defense, the aircraft and the Navy. We 
are trying to get the Army into it. It has not worked. But if 
that part breaks down now, we can just go to the computerized 
thing, punch it out on this thing, and you have got it within 3 
or 4 days.
    Election reform standards, all these machines and chads and 
everything else like that, I can tell you from being in the 
game for years, we have got to get some kind of standard that 
is acceptable, and NIST, your Department would be extremely 
helpful. I do not believe it was provided in the election 
reform bill, but can you please work on that and see if you 
cannot get the Department working to use some of its monies to 
try to get us an election machine standard or something, 
because if we are going to mandate nationally, then there ought 
to be an accepted machine, because these fellows come around 
and sell to local entities on any kind of little gadget and 
then the thing is broken and election day is over with. Can you 
help us?
    Secretary Evans. Sure. Absolutely. We will be glad to take 
a look at that, Mr. Chairman, and see what it would take to 
bring a recommendation to you.
    Senator Hollings. Senator Stevens.
    Senator Stevens. Thank you. Mr. Secretary, it is nice to 
see you.
    Secretary Evans. Chairman, it is nice to see you.

                            MARINE RESEARCH

    Senator Stevens. I am full of good news for you this 
morning. Our State has the highest unemployment rate. It is not 
quite the highest, but if you count the people who have left 
the State to go somewhere else to find a job because they 
cannot live on unemployment we have the highest. I think your 
people are doing some good things for us, trying to create 
long-term jobs, the Ketchikan shipyards, the operation from EDA 
is very good, and we are making major investments in marine 
research.
    I thought maybe I might invite you up for a little part of 
the first class fishing 101 this summer.
    Secretary Evans. I need it.
    Senator Stevens. I will show you some of the things that 
you are doing that far away, so that would be a good time. The 
chairman can tell you about that.

                        VESSEL MONITORING SYSTEM

    We would like to have you come up and see what you are 
doing, and particularly in the marine research, and I am very 
serious. The money that we made available for research on 
stellar sea lions is the most that any country has ever spent 
on really developing science, real science, on what is causing 
the decline of one of the great creatures of the sea. We are 
very pleased with how your people are handling that. It may not 
produce all the results I would like to see, but I think they 
are going after true scientific research in a way that will 
demonstrate that we may find a way to protect some of those 
mammals without destroying our basic industry.
    Half of the people in our State who have income derive a 
substantial portion of that income from fishing. It is one of 
the mainstays of our economy. In a period when we do not have 
oil and gas exploration, the mines are closed down, the timber 
operation is down, the one thing that is really sustaining our 
State today is fishing. Again, I think what EPA is looking at 
are long-term activities.
    I have just three real questions, if I may. We are 
concerned about the implementation of the vessel monitoring 
system and the ground fish fleet. We would like to know what 
you might be able to do to help us defray the cost for small 
fishing vessels to comply with the requirements for vessel 
monitoring systems.
    Secretary Evans. Well, we will take a look at it, Senator. 
I do not know what the cost is exactly per vessel. I do not 
know what we have in our budget, if anything, for that, but we 
will take a hard look at it. I know the cost pressure that that 
whole industry is under there and so one thing we do not want 
to do is be adding additional burdens to them.
    Senator Stevens. Compliance is so essential to the safety 
of other vessels, we think actually you ought to give them to 
people who cannot afford them, and I hope you will look at 
that.
    Secretary Evans. Okay, we will.
    Senator Stevens. Another question, the people in Fairbanks 
are concerned about the Gilmore Creek tracking station. This 
station may not proceed, or may not survive, I take it, in the 
new satellite tracking concept, particularly one that is being 
developed in Norway. It is my feeling that we should have at 
least one active station on American soil. We ought not to be 
dependent totally on foreign information to track our own 
satellites.
    Secretary Evans. I agree with that, Senator. I am not aware 
of an effort to shut it down. I agree with you. I think we 
ought to have one on American soil.
    Senator Stevens. It is the last one, and if we get a 
chance, if you come up, I would like to have you take a look at 
that.
    Secretary Evans. I sure will.

                            STELLAR SEA LION

    Senator Stevens. It is very interesting.
    Again, and lastly on still this stellar sea lion problem, 
do you have a problem producing another biological opinion this 
summer? I am not sure that the science will be ready for that, 
but I do hope that we can keep a close watch on that process 
and if some mechanism to extend the time until we all have the 
answers that that research will bring us will help, I think we 
ought to ask Congress to consider that. That is a court ordered 
deadline, as I understand it, for the biological opinion, and 
the time frame is too tight, I think, to finish the research 
that we funded. We funded a total of $80 million on that study.
    Secretary Evans. Right.
    Senator Stevens. I think it would be a travesty to have the 
burden on the Department to prepare the opinion before the 
results are in from the study. I would urge you to just watch 
that for us, because I think if the last biological opinion had 
been implemented, it would have shut down half the fishing 
fleet.
    Secretary Evans. We will keep a close watch on it. I was 
briefed on it about 1 week ago and people have been encouraged 
with the progress and the facts that have been collected, but 
obviously they did not feel like we are ready yet, and so we 
will continue to watch it very closely.
    Senator Stevens. Just one last comment. I got a report the 
other day, we have several of them down at Seward, where people 
are watching them. We now have television out on the rocks 
where they rest and rear their young pups. They are actually 
getting to the point where they are so familiar with these sea 
lions that they are giving them names. We are actually now 
going to start tagging some. One of them, a young pup, was 
tagged in Seward, and within 1 year, it ended up out in Kiska 
Island at the end of the chain. That is 1,200 miles in the 
first year of life.
    Secretary Evans. The first year? Wow.
    Senator Stevens. It is great science. It really is.
    Senator Hollings. Is that one named Ted?
    Senator Stevens. I will give the one that survives the name 
of Ted.
    Senator Hollings. We have got a name for one of Alaska's 
sea lions here in Washington. Thank you.
    Senator Stevens. Thank you.

                            BUREAU OF CENSUS

    Senator Hollings. Finally, on the census, we had a GAO 
study, Ted, on this one, and you think they cut out a little 
$10 billion here and a little $5 billion there and ruin all the 
rural programs and everything else and then come with a census 
budget of $5 billion more. You all have gotten to be like tax-
and-spend Democrats. I mean, how do you justify $5 billion more 
for a census in 2010? The one in 2000 was $6.4 billion, I 
think.
    Secretary Evans. Right. Correct.
    Senator Hollings [continuing]. And now you have got $11.4 
billion requested?
    Secretary Evans. Right.
    Senator Hollings. And GAO talks about your accounting 
divisions there in the Bureau of the Census?
    Secretary Evans. Right. Senator, obviously, we are focused 
on the planning, the work that is going to be necessary to 
develop the most accurate possible census that we can deliver 
to this country in the year 2010. We learned a lot from 2000, 
and 2000 happened to wind up being the most accurate census 
ever by far, but can we do better? Yes, we can do better.
    One of the ways we feel like we can do better is by 
implementing some programs like the American Community Survey 
that will provide to this country census-type data every year, 
not every 10 years, but every year, and what that can do for 
local municipalities and counties and States can be fairly 
dramatic, because when you are able to provide census-related 
data every year, then States and local governments and 
communities can do a better job in distributing the resources 
that they distribute to the population.
    It may be flu shots. It may be polio vaccine. It may be 
dollars. I am not sure what it might be. But you will have not 
just a 2010 census, but this will provide important information 
every year so we can do a more effective job across America of 
allocating again the scarce resources that we have.
    Senator Hollings. But $5 billion more?
    Secretary Evans. Of course, some of it, Mr. Chairman, is 
inflation. I do not know how much of that is inflation, but a 
big chunk of it is inflation, I can assure you of that. Over a 
10-year period, it does not take much inflation to double the 
cost of something in nominal terms.
    Senator Hollings. Well, look at that GAO report----
    Secretary Evans. We will.
    Senator Hollings [continuing]. On the finding they have had 
on the accounting over there.
    Secretary Evans. We sure will, Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hollings. We thank you very, very much for your 
appearance here today.
    Secretary Evans. Thank you.
    [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 Ernest F. Hollings
                      advanced technology program
    Question. The Advanced Technology Program (ATP) is an industry-led, 
competitive, and cost-shared program to help the United States develop 
the next generation of breakthrough technologies in advance of its 
foreign competitors. For fiscal year 2002, the Department of Commerce 
has $60.7 million available for new ATP grants. The Department has not 
yet issued a solicitation for new ATP grant applications.
    When do you anticipate that you will issue the solicitation asking 
companies to apply for fiscal year 2002 ATP grants?
    Answer. A Federal Register Notice was issued on April 18, 2002, 
soliciting grant applications.
    Question. According to fiscal year 2003 Budget proposal, the 
Department of Commerce intends to carry over $34 million in ATP funds 
from fiscal year 2002 to fiscal year 2003.
    Why is this? Do you have a plan in place to spend the entire $60.7 
million that Congress has given you for new ATP grants in fiscal year 
2002? If not, do you intend to send up a reprogramming for the $35 
million you intend to carry over?
    Answer. The President's budget request for the ATP will allow the 
program to meet all its current obligations in funding on-going work, 
and also will allow the program to fund approximately 35 new projects 
in fiscal year 2002 and fiscal year 2003.
    Question. As you and I have discussed, Secretary Evans, the ATP 
selection process has always been merit based. No Senator, or 
Secretary, or Deputy Secretary has picked which projects will be funded 
and which will not. Instead, the final decision has been removed from 
politics and left with a career official.
    Can you assure me that this process will remain merit-based and 
will not be influenced by your Department's political appointees?
    Answer. ATP has and will continue to comply with the selection 
process stipulated in its regulations (15 CFR part 295) as it has in 
the past. ATP has a rigorous competitive peer-review process that 
removes any potential bias. Potential projects are evaluated on both 
technical and business merits. ATP will ensure that this rigorous 
review process is continued when it selects future awards.
              manufacturing extension partnership program
    Question. Manufacturing creates growth for our nation: wealth in 
the form of economic growth, increased jobs, and robust trade. The 
United States' manufacturing strength is built on the backbone of more 
than 350,000 small manufacturers that account for over one-half of the 
value of total U.S. production. These firms employ 11.4 million 
Americans--more than two-thirds of the manufacturing workforce. Yet, 
despite the critical role that small manufacturers play in U.S. 
economy, the productivity gap between small manufacturers and their 
larger counterparts continues to grow. This disparity causes concern 
because expertise in technology will only become a bigger factor in the 
success of small companies.
    One of the President's stated priorities for the fiscal year 2003 
budget is to ``revitalize the economy and create jobs.'' Yet, your 
fiscal year 2003 budget sunsets the Federal share of MEP centers which 
assist our nation's vital small and medium sized manufacturers to stay 
competitive. In 2000, small manufacturers reported $1.3 billion of new 
or retained sales and more than 14,000 jobs saved as a result of the 
MEP.
    How does cutting the funding for MEP support the President's 
priority of revitalizing the economy and saving jobs? Isn't this move 
counterproductive when the nation is in a recession that threatens 
high-paying manufacturing jobs?
    Answer. MEP has been a successful program and demand for its 
services continues to increase. However, given that this Nation is 
fighting a war against terrorism, difficult choices have to be made in 
terms of priorities within the Federal budget. We believe that many MEP 
centers will continue to exist in the absence of Federal funding. As a 
result, small businesses will continue to receive the expertise and 
assistance from the centers. This continued assistance will help small 
manufacturers remain competitive and continue their crucial role in the 
Nation's economy. To offset the loss of Federal funding, centers could 
increase fee receipts. Given the centers' success in improving 
productivity and efficiency, assessing fees for service should be the 
direction in which the program heads. The benefits to small firms 
seeking MEP assistance, such as improved productivity and efficiency, 
should outweigh the cost of the fees. Also, large manufacturers that 
depend on smaller companies may also wish to provide support to MEP 
centers to ensure the continuing success of their smaller suppliers.
                       election reform standards
    Question. The House-passed election reform bill and the Senate 
version of election reform both call for NIST to have a role in 
assisting to develop election machine standards.
    Have you prepared a request for such funding? What is such an 
effort likely to cost?
    Answer. In the House version (H.R. 3295, Ney-Hoyer bill), NIST 
estimates the cost to support the functions as described in the bill to 
be between $7.5 and $10 million per year. In the Senate version (S. 
565), the costs have not been determined. In S. 565, NIST would be a 
consultant to the Office of Election Administration of the Federal 
Election Commission. The level of assistance by NIST to the Office of 
Election Administration is not detailed in S. 565. Under the House 
bill, NIST would play an integral role vis-a-vis the Office of Election 
Administration. NIST costs could be much less than the House version 
but the Conference bill will determine NIST's role.
                    world trade center investigation
    Question. It is my understanding that NIST will have a significant 
role in examining the collapse of the World Trade Centers.
    Have you identified funding for this effort? Should we expect a 
supplemental request in this regard?
    Answer. NIST is planning to conduct an independent, comprehensive, 
NIST-led technical investigation of the building construction, 
integrity of the materials used, and all the technical conditions that 
combined to cause the World Trade Center (WTC) collapses. This 
technical investigation will be funded by a reimbursable agreement with 
the Federal Emergency Management Agency (FEMA), using funding requested 
by FEMA in the fiscal year 2002 supplemental.
                     cost of 2010 decennial census
    Question. Please explain why we are faced with a 2010 Decennial 
Census that will cost approximately $5 billion more than the 2000 
Decennial Census.
    Answer. Some of this increase is attributable to inflation, but 
there are other factors as well. The population is expected to increase 
by approximately 10 percent. In addition, we have observed over several 
decades that for a number of reasons it becomes more difficult to 
enumerate the population during each decennial census:
  --The population is becoming increasingly diverse.
  --Households are more complex.
  --It is increasingly difficult to develop a workforce with the skills 
        necessary to conduct the enumeration.
  --People are more reluctant to cooperate with the government, and 
        with the enumerators asking for interviews.
    Consequently, each decennial census becomes more expensive and more 
difficult to implement. If we do not make fundamental changes in our 
methodology, our current best estimate is that the cost of the 2010 
Census will increase by $5 billion broken down as follows:
  --$2,833 million--Due to inflation (as estimated by the fiscal year 
        2001 President's budget for ``Federal Civilian Pay'' index and 
        GDP inflator for procurements).
  --$994 million--Because we expect that enumerators will process fewer 
        cases per hour. As noted above, this process has been a steady 
        trend for several decades.
  --$532 million--Due to enumerator pay increases needed to hire 
        temporary employees in a tight labor market. We anticipate, 
        based on research and experience related to Census 2000, 
        needing to pay our field staff 90 percent of the prevailing 
        wage rate in the areas where they work.
  --$320 million--Increase in Field workload--Housing units will 
        increase by 10 percent, Group Quarters by 12 percent, and we 
        will need 51 additional local census offices.
  --$148 million--Due to inflation in information technology contract 
        costs, which are estimated to be 2 percent above the federal 
        inflation rate.
  --$40 Million--Due to an increase in the data capture workload of 10 
        percent due to population growth.
    Even at this great cost, repeating the old design would be 
extremely risky and would result in inferior data to that collected by 
the reengineered design. Opportunities do exist to reduce risk, reduce 
full cycle costs, and improve accuracy for the 2010 Census by 
fundamentally reengineering the process. The advantages and savings 
associated with reengineering have been presented in the Potential Life 
Cycle Savings for the 2010 Census document provided to the Congress in 
April of 2001. The President's fiscal year 2003 budget request reflects 
the intent to reengineer the decennial census process.
               census bureau financial accounting systems
    Question. A recent GAO report pointed to significant flaws in the 
financial accounting system at the Bureau of the Census. What can this 
Committee do to assure that such problems are alleviated?
    Answer. Several of the management recommendations in the GAO report 
(``2000 Census: Analysis of Fiscal Year 2000 Budget and Internal 
Control Weaknesses at the U.S. Census Bureau''--GAO-02-30) address 
improvements to the Bureau's financial accounting systems. We are 
currently acting on these recommendations. This answer addresses all 
but three of those recommendations. The three not addressed by this 
answer dealt with current financial activities, rather than financial 
accounting systems.
Recommendation #3: Instruct accounting personnel to follow the written 
        policy for establishing accruals and proper cutoff for goods 
        and services received at year end.
    The Finance Division and Accenture contractors conducted staff 
training on September 13, 2001, on the estimated accrual process to 
ensure proper recordation of accrual transactions at year-end. As 
changes to accounting personnel occur, the Finance Division will 
continue to educate new personnel and provide refresher training to 
existing personnel, as needed.
    The Finance Division also has set up an internal audit review 
process to review the following:
  --Year-end accrual policies and procedures.
  --Year-end Estimated Accrual forms submitted from divisions.
  --Match subsequent disbursements with year-end accruals.
  --Actual vendor invoices to determine period of performance.
    The Census Bureau considers this recommendation closed.
Recommendation #4: Post accounting adjustments to subsidiary records in 
        a timely manner.
    We have implemented our new Commerce Administrative Management 
System (CAMS) closing program, which gives us the needed ability to 
track year-end adjustments in multiple periods. It has the capability 
to distinguish our year-end adjustments from the adjustments entered 
after the initial FACTS II submission and audit adjustments, which has 
caused discrepancies between Treasury and Office of Management and 
Budget records. All year-end adjustments have been entered into the 
financial system for fiscal year 2001. We have completed the validation 
of the year-end trial balance and closing entries. The final close 
process, which sets all financial system modules for fiscal year 2001 
to close, establish ending balances, and carry-forward balances, was 
completed on March 29, 2002. This new closing program will enable the 
Census Bureau to close our financial records on schedule.
    Implementation date: March 29, 2002--Completed.
Recommendation #5: Complete efforts to modify the Bureau's financial 
        systems to produce usable accounts payable and undelivered 
        orders subsidiary reports by vendor, close out thousands of 
        completed transactions with small balances, and archive all 
        completed transactions.
    The data clean-up is a continuing effort for all Undelivered Orders 
and Accounts Payable accounts to purge all remaining unmatched 
transactions, which were converted from our legacy system to CAMS. The 
data clean-up converts unmatched transactions by determining related 
transactions and populating the fields used in document matching with 
common matching values. These transactions have no impact on our 
financial balances. The Census Bureau plans to complete this data 
clean-up effort by July 2002.
    Targeted completion date: July 31, 2002.
    However, Census is working in conjunction with the Department is 
reviewing the existing archiving capability in CAMS, and to provide 
additional requirements for a comprehensive, JFMIP compliant approach 
to provide archiving and retrieval capability. The requirements 
documentation should be completed this fiscal year, with implementation 
targeted for fiscal year 2003.
Recommendation #6: Amend policies and procedures, which will require 
        supervisors to closely review employees time charges and 
        project codes to ensure more accurate project costs for 
        salaries and benefits.
    As part of the census planning process for the 2004 Census Test, 
the Census Bureau is reviewing policies and procedures related to the 
completion of payroll documents and supervisory review and approval of 
those documents and will amend them as appropriate. We know that with a 
large, short-term intermittent staff, it is difficult to train them 
adequately in proper charging of hours and other expenses. We will look 
for ways to improve training and to stress the use of proper task codes 
and project numbers for the various field operations. We also will work 
on supervisors' training and procedures for the review and approval of 
payroll documents to improve the accuracy of reporting. We will develop 
supervisory checklists, which can be used during the review of payroll 
forms to simply make more accurate that proper task codes and project 
numbers are being used for the various operations.
    Another aspect of our procedures that we feel impacts the accuracy 
of costs is the appointing of field staff into the proper position. In 
Census 2000, we created the Crew Leader Assistant, that was established 
late in the census process and was paid at the same rate as the 
enumerator. We know that in many offices, people that worked as Crew 
Leader Assistants were originally hired as enumerators and were not 
officially converted into the Crew Leader Assistant position. This 
resulted in their hours and expenses being reported as enumerators and 
had an adverse impact on cost reports and productivity. We plan to 
establish all positions in a more timely manner in the future and to 
develop procedures that ensure staff is hired into the proper position. 
It is extremely important that hours and expenses for production and 
nonproduction staff are reported accurately. Policies and procedures to 
ensure this occurs will be instituted when hiring is initiated for the 
2004 Test.
    Target Implementation Date: Procedures will be revised and amended 
as appropriate and will be implemented when hiring and training are 
initiated for the 2004 Test, which should be in the summer of 2003.
                  2010 decennial census--cost savings
    Question. Is there any cost savings to the 2010 Census associated 
with conducting the American Community Survey?
    Answer. Yes. Repeating the design used for Census 2000 would be 
costly, extremely risky and would result in inferior data to that 
collected by the reengineered design. Fundamentally reengineering the 
process would reduce risk, reduce full cycle costs, and improve 
accuracy for the 2010 Census. The American Community Survey (ACS) is a 
critical component to successfully reengineering the design.
    The advantages and savings associated with reengineering the 
decennial census process have been presented in the Potential Life 
Cycle Savings for the 2010 Census document provided to the Congress in 
April of 2001. The President's fiscal year 2003 budget request reflects 
the intent to reengineer the decennial census process.
    The reengineered 2010 Census, including ACS as a critical 
component, consists of three highly integrated activities designed to 
meet the following four goals: Improve the relevance and timeliness of 
census long form data, reduce operational risk, improve the accuracy of 
census coverage, and Contain costs.
    The ACS is fundamental to this strategy. It sits alongside the 
other two components of our plan to reengineer the decennial census: 
(1) improving the inventory of all known living quarters and ensuring 
that they are accurately located on our census maps (MAF/TIGER 
enhancement), and (2) our program of early planning, development and 
testing designed to completely restructure the management and conduct 
of a short form only census in 2010.
    ACS will provide more timely and relevant data to communities 
throughout the decade. Moreover, the cost of conducting a short form 
only census will be reduced later in the decade because the elimination 
of the long form from the decennial census, coupled with MAF/TIGER 
enhancements, will dramatically reduce the workload for enumerators in 
the field. Field staff will be working with more accurate maps and 
address lists. There will be fewer households to visit because a short 
form only census will have a higher response rate. We anticipate a 
higher response rate because ever since the inception of the short 
form, we have consistently experienced a higher response rate on short 
form questionnaires than on long form questionnaires. For example, in 
census 2000 the response rate for the short form questionnaires was 
66.4 percent while the corresponding response rate for the long form 
questionnaires was 53.9 percent. We also expect savings because 
enumerators will not be required to follow up on unanswered long form 
questionnaires--a process that is time consuming and costly. Finally, 
staffing also will be reduced at headquarters because we will not be 
required to conduct the following operations for the development of the 
long form since they will be carried out by the ACS program:
  --Content testing and development
  --Questionnaire design
  --Data collection methods--development and implementation
  --Edit, coding and imputation--development and implementation
  --Sample design
  --Estimation and variance development and computation
  --Product development
  --Data tabulation and review
  --Data dissemination
    The results of this work will mean that the overall cost of 
conducting the 2010 Census, including MAF/TIGER enhancements, ACS, and 
early planning and development for 2010, will be reduced. In addition, 
the persistent problem of a huge spike in the funding needs for the 
census occurring in the census year will be dramatically reduced. 
However, making these changes in Census 2010 will require an increased 
investment earlier in the decade as compared with the Census 2000 
cycle. Additional resources are needed in the early years because 
decennial census operations must be completely restructured to take 
full advantage of ACS and MAF/TIGER enhancements. But this increase is 
more than offset by the significant reductions later in the decade 
described above.
                           cost of maf/tiger
    Question. What is the total projected cost to the 2010 Census for 
the MAF/TIGER geographic database system?
    Answer. The full cycle cost (through 2012) for enhancing the MAF/
TIGER database is $535 million. An improved MAF/TIGER database allows 
us to adopt the technology necessary to fully utilize GPS equipped hand 
held mobile computing devices to find, interview, and update data on 
people and their housing units for the short form only census. This 
innovation alone means that we can dramatically reduce field 
infrastructure costs because we can substantially reduce the use of 
paper maps and virtually eliminate the use of paper assignment sheets, 
along with the staff and space required to handle that paper. In 
addition, the enhanced system will utilize commercial off-the-shelf 
software allowing for an open, flexible, and integrated system that 
makes it easier to update maps and address lists. This will allow us to 
take advantage of geographic partnership programs in which address and 
map update information from state, local, and tribal governments can be 
used more effectively. The result will be a substantial increase in the 
accuracy of our address list and maps. Consequently, the cost of MAF/
TIGER enhancement will be more than offset by savings and efficiencies 
in 2010 Census operations.
    Repeating the design used for Census 2000 would be costly, 
extremely risky and would result in inferior data to that collected by 
the reengineered design. Fundamentally reengineering the process would 
reduce risk, reduce full cycle costs, and improve accuracy for the 2010 
Census. The MAF/TIGER enhancement program is a critical component to 
successfully reengineering the design. The advantages and savings 
associated with reengineering the decennial census process have been 
presented in the Potential Life Cycle Savings for the 2010 Census 
document provided to the Congress in April of 2001. The President's 
fiscal year 2003 budget request reflects the intent to reengineer the 
decennial census process.
                        eda investment criteria
    Question. Pursuant to the Public Works and Economic Development Act 
of 1965, as amended by the Economic Development Administration Reform 
Act of 1998, EDA provides grants to ``alleviate conditions of 
substantial and persistent unemployment and underemployment in 
economically distressed areas and regions.'' In the last year, the 
Economic Development Administration has altered its grant-making 
strategy by awarding infrastructure and business development grants for 
projects that are high profile and create lucrative jobs that pay wages 
higher than the average county rate.
    In April of 1999, prior to this change in policy, EDA provided a 
grant ($1.5 million) to the City and County of Orangeburg, South 
Carolina for a sewer project to serve seven commercial businesses at 
the intersection of Interstate 26 and Highway 301. The project saved 65 
jobs and created 42 new jobs. Since the time of the award, a 400 acre 
industrial park has been attracted to the area. Approximately 100 jobs 
have been created in the park and that number is anticipated to reach 
over 700 jobs when the park reaches its capacity. In addition, tens of 
millions of dollars in private investment have been funneled in the 
area. Under the current criteria a similar project would not be funded 
by EDA.
    Has EDA recently switched its grant-making focus from distressed 
communities to so-called ``higher profile'' projects?
    Under what authority does EDA propose to shift the focus of its 
infrastructure and business development grants?
    Can you provide the Committee with a list of ``high priority'' 
projects that have or are proposed to receive funding?
    Answer. Based on the project described, it is not accurate to 
assume that such an investment would not be made by EDA today. In fact, 
the project you described is the type of project that can fundamentally 
change the economic fortunes of a region, and the type of investment 
that results in substantial higher wage, higher skill jobs and private 
sector investments that are consistent with EDA's mission.
    EDA has not changed its focus from distressed communities to 
``higher profile'' projects. Consequently, EDA does not compile a list 
of ``high priority'' projects. EDA remains committed to its core 
mission, articulated in its authorizing legislation, which states in 
part that ``the goal of Federal economic development activities should 
be to work in partnership with local, regional, and State public and 
private organizations to support the development of private sector 
businesses and jobs in distressed communities.''
    EDA is not shifting the focus of its infrastructure and business 
development grants. EDA's Investment Policy Guidelines are merely a 
clarification of the evaluation criteria in EDA's longstanding 
regulations. The guidelines promote investment decisions based on 
outcomes such as value-added employment and private sector investment; 
however, application of the guidelines is relative to each proposal 
since every project is different in how it addresses the unique needs 
of the area it benefits. The investment policy guidelines will lead to 
investments that are proactive in nature, look beyond the immediate 
economic horizon, anticipate economic change, and enhance regional 
competitiveness in distressed communities, both rural and urban. The 
Investment Policy Guidelines help ensure that distressed communities 
receive the most impact from EDA investments and that taxpayers' funds 
are spent in a thoughtful manner with long lasting impact.
                        noaa's sea grant program
    Question. I see little sense in moving Sea Grant from the 
Department of Commerce to the National Science Foundation. Please 
explain the rationale behind this proposal.
    Answer. The proposal is a result of a review of Federal science 
programs that the Office of Management and Budget (OMB) conducted and 
is consistent with the President's Management Agenda. Under the 
proposal, the Sea Grant program would be administered as an NSF/NOAA 
partnership. The transfer is part of a wider Administration effort to 
promote competitive funding of scientific research and to capitalize on 
the demonstrated excellence of the NSF and its program management.
                   ita textile and manufacturing jobs
    Question. Since NAFTA, the textile and apparel industry in the 
United States and in South Carolina, we have seen a massive decline in 
jobs. In South Carolina, we have lost approximately 50,900 jobs. 
Nationally, we have lost nearly 700,000 jobs.
    What is the Administration doing to halt this decline and to create 
textile and apparel jobs in this country?
    Answer. The economic crisis in the textile industry is of great 
concern to this Administration. I and other senior Commerce Department 
officials, including Under Secretary Aldonas and Assistant Secretary 
Lash have traveled to major textile producing states to learn first 
hand about the industry's problems and to consult with the industry on 
formulating solutions.
    We are taking steps to ensure that our textile industry can compete 
in global markets. We place a high priority on enforcing our existing 
trade agreements on textiles and apparel and will closely monitor 
foreign textile trade barriers.
    We are committed to leveling the playing field for the textile 
industry internationally. To accomplish this, the President and I 
established a high level interagency Textiles Working Group. At the 
direction of the President and I, the Working Group has begun to 
address such issues as:
  --aggressively pursuing the opening of foreign markets to U.S. 
        textile and apparel products in any future trade agreement;
  --ensuring compliance with existing agreements on textiles and 
        apparel and closely monitoring foreign textile trade barriers;
  --implementing the WTO Agreement on Textiles and Clothing, including 
        maintaining the current schedule for, not accelerating, the 
        elimination of existing quotas;
  --strengthening U.S. enforcement efforts to combat illegal textile 
        transshipment;
  --facilitating utilization of trade preference programs with the 
        Caribbean Basin and Africa, in order to expand exports of U.S. 
        fiber, yarn and fabric to these regions;
  --achieving re-authorization of improved trade adjustment assistance 
        programs;
  --ensuring full access to trade remedy laws for the textile industry, 
        consistent with international rights and obligations; and
  --examining the prospects for economic diversification in the textile 
        sector.
  --Additionally, the Working Group has established a Subgroup on 
        Compliance and Enforcement that is reaching out to domestic 
        industry to identify and address market access and compliance 
        problems.
  --Members of the Subgroup are meeting regularly with other U.S. 
        Government agencies and representatives of U.S. industry to 
        support work on textiles market access and compliance issues.
  --As a result of our compliance efforts, we are examining several 
        issues including marking and labeling requirements, new 
        prohibitive tariffs exceeding WTO bound rates, copying of 
        textile designs, fee and taxes assessed in addition to customs 
        duties, among other issues.
  --We will pursue these issues vigorously and will continue our 
        efforts in the future. We will be equally vigilant regarding 
        access to overseas markets when textile restraints under the 
        WTO expire in 2005.
                           manufacturing jobs
    Question. Job loss in the manufacturing sector over the last year 
has been extraordinary. Since the end of 2000, the United States has 
lost over 1.5 million of these jobs.
    Are creating manufacturing jobs a priority of the Administration? 
What will you do to assist in the creation of these sorts of jobs?
    Answer. Job creation in all sectors is a priority of this 
Administration. The economy's weak performance since mid-2000 has 
contributed to an increase in the unemployment rate to 5\1/2\ percent 
from a low of about 4 percent. Real GDP advanced a small 0.5 percent 
during 2001 (fourth quarter to fourth quarter), despite growing 1.7 
percent at an annual rate in the fourth quarter. The 2001 performance 
reflected a downshift in the growth rate of consumer spending, a sharp 
downturn in business fixed investment, the liquidation of business 
inventories, weak economic growth in many foreign economies, and the 
economic impact of September 11th terrorist attacks. Businesses 
achieved strong productivity growth in 2001 by cutting back employment. 
Recent data including consumer spending, industrial production, and 
shipments of nondefense capital goods in February suggest that the 
economy is emerging from its mild recession.
    Continued momentum in consumer spending and a recovery in 
investment spending are key to a sustained recovery and to employment 
growth. Total employment rose 66,000 in February, after declining 1.4 
million between March and January. With demand improving, employment 
should continue to rise. Contributing to improving economic conditions 
has been the Administration's tax cut and the Federal Reserve's 
reductions in short term interest rates. Lower taxes and lower interest 
rates supported consumer spending and housing activity in the second 
half of last year and early 2002. These policies helped to make this 
recession the mildest on record, and helped to contain the losses in 
employment.
                      patent and trademark office
    Question. Is the 5-year operating plan for PTO that was submitted 
as part of the President's fiscal year 2003 Budget Request the final 
version of the 5-year operating plan, which PTO was tasked to write 
under the fiscal year 2002 CJS Appropriations Act Conference Report?
    Answer. The five-year Business Plan that was drafted last year and 
submitted in our fiscal year 2003 budget request is in response to the 
fiscal year 2002 CJS Appropriations Act Conference Report. As 
presented, it is a traditional response to attack increasing pendency, 
and it would stem the dangerous tide of rising pendency that began in 
the early 1990s. However, like any business seeking dynamic ways to 
improve, the business plan submitted is not set in stone.
    As you may be aware, newly installed USPTO Director Jim Rogan was 
not a party to the drafting of the submitted plan, although he assures 
me that it represents an important first step toward achieving quality 
and timeliness improvements. He has also begun an aggressive review of 
the USPTO to identify innovative and possibly nontraditional ways to 
improve quality and reduce pendency. This process includes a thorough 
top-to-bottom review of USPTO spending to ensure that resources are 
fully devoted to mission critical tasks and a comprehensive analysis of 
how the USPTO and applicants conduct business.
    Question. Has a compelling link ever been drawn between reduced 
patent pendency and increased numbers of FTE at the PTO?
    Answer. Yes, there is a demonstrated and verified link between 
reduced patent pendency and increased numbers of patent examiner FTEs. 
While increased hiring is not the only solution to the USPTO pendency 
challenges, increasing the number of patent examiners is vital to 
addressing the growing numbers of applications filed and the inventory 
of pending applications. Patent pendency is primarily a function of the 
number of applications filed, the number of patent examiner staff 
available, and the ever-increasing complexity of the applications. 
Pendency rises when the rate of application filings grows faster than 
the rate and the ability of staffing levels to absorb them.
    Looking back in history, the USPTO faced nearly identical 
challenges in the 1980's. The USPTO, at that time, implemented an 
aggressive plan to reduce overall pendency to 18 months by increasing 
its examining staff. In the years 1980 to 1990, filings grew by 56 
percent. During that same period, examiner staff grew by 107 percent 
and pendency was lowered from 22.6 months to 18.3 months. In addition 
to bringing pendency down, a backlog of more than 80,000 applications 
that had built up prior to the increased hiring was cleared.
    Conversely in the 1990's, filings grew at a greater rate than staff 
and pendency increased. In the years 1990 through 2000, filings grew by 
79 percent. Examining staff grew by 71 percent and pendency increased 
from 18.3 months to 25 months. Also during this period, there was a 
dramatic increase in the filing of biotechnology and electrical arts 
applications--some of the most complex applications handled by the 
USPTO. This increase in the complexity of applications resulted in a 
significant increase in the time spent per application. In addition to 
the dramatic increase in pendency during the 1990's, the office has 
accumulated a backlog of nearly 332,000 applications. This backlog will 
negatively affect pendency both today and in the future.
                ntia's technology opportunities program
    Question. Mr. Secretary, your Department seems to be at odds over 
whether or not the Technology Opportunities Program (TOP) has fulfilled 
its mission. According to the Departments' own ``Budget in Brief'', the 
TOP grants have demonstrated the use of advanced telecommunications 
technologies to enhance the delivery of social services, such as 
education, health care, and public safety. Surely these missions have 
not been accomplished. Could you explain the rationale behind the 
decision to eliminate the TOP grants?
    Answer. The TOP program, established in 1994, has been a valuable 
program for generating awareness of how advanced telecommunication 
technologies can enhance the delivery of social services. But, in light 
of higher priorities, this awareness-generating program did not make 
the cut in this year's budget.
    The Administration does view that government has an important role 
to play in fostering the use of advanced telecommunication technologies 
to provide important social benefits. However, rather than funding a 
limited, general awareness program, the Administration has proposed 
funding specific, proven uses of advanced telecommunication 
technologies in amounts designed to make a difference. For example:
  --Within the Department of Education, $700 million was appropriated 
        in fiscal year 2002 for Educational Technology State Grants and 
        continues in the President's Budget request for fiscal year 
        2003 at $700 million. It is targeted toward high poverty school 
        districts to better integrate technology into the classroom for 
        improved student achievement.
  --The Department of Agriculture Distance Learning and Telemedicine 
        Program (DLT) is requesting $27 million for grants and the 
        authority to make $130 million in loans. The Broadband and 
        Pilot Program within the DLT Program will finance the 
        installation of broadband transmission capacity (i.e. the 
        necessary fiber optic cable capacity needed in order to provide 
        enhanced services such as Internet or high-speed modems) to and 
        through rural communities. The DLT Program finances equipment 
        for schools, libraries and hospitals to connect to the 
        Internet.
  --The Justice Department is requesting $50 million for the Law 
        Enforcement Technology grant program for State and local law 
        enforcement; $60 million for states and localities to 
        computerize and interconnect their crime and court records; as 
        well as $800 million for the Justice Assistance Grant Program, 
        a significant portion of which will go towards the acquisition 
        of communications and information technology for law 
        enforcement.
  --Housing and Urban Development is requesting $20 million for the 
        Neighborhood Networks Program. It supports the establishment 
        and operation of computer centers that bring job training and 
        life long learning to residents of public housing.
    The Administration believes that these Federal programs, combined 
with the tremendous work being done in the private sector by corporate 
and private foundations, are a more effective mechanism for extending 
the benefits of advanced telecommunication technologies to all 
Americans.
                                 ______
                                 
                Questions Submitted by Senator Herb Kohl
              manufacturing extension partnership program
    Question. I was disappointed to see that the Administration's 
proposed budget would cut the Manufacturing Extension Partnership 
Program by $93 million, from $106 million to $13 million. This is a 
dramatic cut for a program which is unique in that it targets small 
manufacturers. Although the original model for this program was that 
licensing technology from federal labs would pay for the assistance the 
program provides to small manufacturers, this has not happened. The 
reality is that small manufacturers are not in the position to use the 
latest technology from federal labs. Rather, this program provides 
significant training assistance to small manufacturers across the 
nation, and in my state of Wisconsin, by helping level the playing 
field as they compete with low-cost foreign suppliers.
    There have been many studies of the Manufacturing Extension 
Partnership Program over the years. One that has special importance, I 
believe, is the 2001 study by Nexus Associates which indicates that a 
conservative estimate of the return on investment of MEP Program 
dollars is at least 4 to 1. Did the Commerce Department look at this 
study before you made your decision to cut the MEP Program?
    Answer. There have been numerous studies that point to the fact 
that MEP is a successful program. However, given that this Nation is 
fighting a war against terrorism, difficult choices have to be made in 
terms of priorities within the Federal budget. Unfortunately, every 
program cannot be funded. In the fiscal year 2003 President's budget 
request, MEP was funded at $12.9 million to fund two centers that are 
less than six years old and to administer the program and develop 
products and services for centers.
    Question. Many large U.S. manufacturers are under tremendous 
pressure to purchase from low-cost foreign suppliers that have low 
labor costs or governmental support to capture business or both. As we 
have seen in Wisconsin, the Manufacturing Extension Partnership Program 
is one program that has been successful in giving these large companies 
a reason to keep purchasing from small U.S. manufacturers because it 
has helped make their suppliers more competitive.
    If the Manufacturing Extension Partnership Program were to go away, 
and I fear that it will if the cut you are proposing holds, what does 
the Administration propose to do to help U.S. suppliers keep business 
and jobs in this country?
    Answer. Since approximately two-thirds of their funding comes from 
state and local organizations and from fees for service, we believe 
that many MEP centers will continue to operate without Federal funding. 
As a result, small businesses will continue to receive the expertise 
and assistance from the centers, which will keep them competitive. MEP 
has been a successful program and demand for its services continues to 
increase. To offset the loss of Federal funding, centers could increase 
fees receipts. Given the centers' success in improving productivity and 
efficiency, assessing fees for service should be the direction in which 
the program heads. The benefits to small firms seeking MEP assistance, 
such as improved productivity and efficiency, should outweigh the cost 
of the fees. Large manufacturers that depend on smaller companies may 
also wish to provide support to MEP centers to ensure the continuing 
success of their smaller suppliers.
    Question. What do you believe is the appropriate role for 
government in helping small businesses compete?
    Answer. The Federal government should ensure that small businesses 
have the resources needed to be competitive. In the case of MEP, the 
Federal government's role was to help start these MEP centers across 
the United States with the goal of helping small manufacturers improve 
their competitiveness. MEP's initial mission was to provide start-up 
funding to centers for a six year period with the assumption that after 
six years the centers would be up and running and could operate using 
funds from sources such as private funding, state funding, local 
funding and fees.
                                 ______
                                 
               Questions Submitted by Senator Judd Gregg
            commerce administrative management system (cams)
    Question. Mr. Secretary, have you reviewed the status of the 
Commerce Administrative Management System (CAMS)? Are you satisfied 
with the progress that has been made on this project? What are you 
doing to assure that CAMS will be delivered on time, within budget and 
to specifications?
    Answer. I am aware of the status of CAMS and the schedule for its 
full implementation throughout the Department. I am also aware of the 
statutory requirements in the Chief Financial Officers (CFO) Act of 
1990 for integrated financial systems, as well as the need to provide 
managers within the Department timely, accurate financial data. 
Implementation of CAMS is critical to meeting both of these 
requirements. Separate reviews conducted within the last three years by 
Booz Allen Hamilton and the Department of Commerce's Inspector General 
agree that the Department would not gain by switching to another 
software package. In addition, while OMB gave the Department a ``red'' 
on the President's Management Scorecard for financial management 
because of our lack of an integrated financial system, we received a 
``green'' in the same category on its planning/progress scorecard. This 
is based on the progress we are making to achieve that goal.
    As far as our level of satisfaction where progress has been made, I 
do not believe any manager should be satisfied with the progress of a 
project that has been underway for seven years, and is still not 
completed. However, I do believe that we now have a sound plan for 
completing this project, and the support of the senior managers in our 
bureaus to achieve that goal. And, with the Congress' support, that 
goal will be met in fiscal year 2003. In spite of a $3 million 
reduction in its CAMS budget, NOAA is working closely with the 
Department to complete their implementation this fiscal year, giving us 
control over federal funds not possible in the current 30-year-old 
system. NIST has begun their conversion and will be the final component 
to bring CAMS online in fiscal year 2003, assuming the Congress 
appropriates the funds necessary to finish this project.
    There have been a number of lessons learned in this project which 
we are utilizing to successfully complete the project and better manage 
our financial information. We have also examined other financial 
systems implementations throughout the government to learn from their 
experiences, as well. Unfortunately, we have found our experience is 
not unique. Virtually every department or agency that has integrated 
multiple legacy systems in their component organizations into a single 
system of record has encountered significant delays and cost overruns. 
In the Department of Commerce, there were 36 separate major interfaces 
to address, and countless ``cuff systems.''
    One of the major reasons we believe CAMS is now on target is the 
close coordination between the bureaus and the Department's team 
managing the overall implementation. The initial approach was very 
decentralized and resulted in little oversight of the bureaus' 
implementation budgets and, too often, customized software to meet 
bureau requirements. Every bureau budget for CAMS is reviewed by the 
Department CFO's office, which has responsibility for ensuring our 
schedule is maintained and the product delivered meets all external and 
management requirements. In addition, finance officers from throughout 
the Department determine a standard approach to financial processes 
such as year-end closing and reporting, which is then implemented.
    The CAMS Executive Board, consisting of the CFOs from the bureaus 
using or implementing CAMS, recommends overall policy to the CFO and 
reviews any major software changes. The only major bureaus scheduled to 
implement CAMS who are not already on the system are NOAA and NIST. The 
Deputy CFO and his staff meet with NOAA management at least biweekly to 
discuss programmatic and budget issues. The technical staffs meet 
weekly, to ensure the schedule is met. The $3 million reduction in 
NOAA's appropriation for CAMS will impede our ability to provide the 
systems capability to eliminate some manual activity this year, but we 
are confident we will complete the system and comply with OMB Circular 
A-127 on schedule.
    A similar approach to completing the final bureau implementation at 
NIST is being utilized. Our completion of this project and CAMS overall 
is contingent on Congressional approval of the Department's 
appropriation for CAMS.
    Question. Your budget request includes $41.93 for CAMS in fiscal 
year 2003. Does the budget include funding for separate information 
technology systems at the EDA, the MBDA, the BXA, and the ESA? If so, 
why are these systems not tied into CAMS? What other information 
technology systems within the Department of Commerce are not tied to 
CAMS and what is their status?
    Answer. The bureaus you identify do not maintain their own 
financial management systems. They are all cross-serviced by other 
bureaus utilizing, or implementing, CAMS. All but BXA are supported by 
NIST, which converted to CAMS for those bureaus it cross-serviced in 
fiscal year 2001, though NIST itself is scheduled to implement CAMS in 
fiscal year 2003. BXA is supported by NOAA, which will complete its 
implementation of CAMS in fiscal year 2002. The $41.93 million does 
include the costs for support provided to those bureaus.
    The budgets for the bureaus listed, along with all the Commerce 
bureaus, include funding for separate information technology systems, 
most of which, since they are not directly linked to the financial 
systems, are not tied to CAMS. The Department has an Information 
Technology Investment Review Board whose purpose is to: review the 
business case for any enterprise system development initiative in the 
Department; determine if an adequate capital asset plan is in place; 
evaluate the soundness of the technical design and implementation 
strategy; review the acquisition plan; and ensure that the appropriate 
ties to the CAMS financial system have been considered and planned. In 
the case of CSTARS, the Department's acquisition management system, the 
Board reviewed and approved the business case for CSTARS after they 
were presented with a plan for integrating CSTARS with CAMS. In fact, 
the Office of Financial Management and the Office of Acquisition 
Management have successfully collaborated on the design of an interface 
between the two systems. Any other enterprise system in the Department 
that generates data with a financial impact is required to go through 
this same process with the Investment Review Board.
    The majority of the information technology systems in Commerce are 
not directly linked to the financial system. These include 
infrastructure and mission or program-specific systems that do not have 
a financial component and therefore do not have to tie to CAMS. These 
other information technology systems support the wide range of programs 
in the Department, including the following:
  --Census and Surveys
  --Advanced Short Term Warning and Forecast Services
  --Implement Seasonal to Interannual Climate Forecast
  --Predict and Access to Decadal to Centennial Change
  --Promote Safe Navigation
  --Build Sustainable Fisheries and Recover Protected Species
  --Sustain Healthy Coasts
  --Enforce U.S. Trade Laws
  --BEA Statistical Estimation
  --Export Control
  --Measurement and Standards Laboratories
  --Advanced Technology Program
  --Manufacturing Extension Partnership
  --Radio Spectrum Assignments
  --Digital Department
  --Grant Processing and Management
  --IT Infrastructure and Office Automation Support to all program 
        areas.
                           homeland security
    Question. Mr. Secretary, could you discuss the evaluative process 
the Bureau of Export Administration undertook to determine why and 
where attaches were needed?
    Answer. In its evaluative process, the Bureau of Export 
Administration (BXA) focused on placing attaches in countries where the 
Bureau had the greatest concerns of illegal diversions of dual-use 
items to weapons of mass destruction (WMD) programs or for WMD 
capabilities. The countries identified were China, Russia, the United 
Arab Emirates (UAE), India, Singapore, and Egypt:
  --The attache in Beijing would be responsible for conducting end-use 
        checks on U.S. commodities and technologies exported to North 
        and Central China. Ensuring that these items are not diverted 
        to unauthorized military or other end uses is particularly 
        critical in this region, which is the major production area for 
        the People's Liberation Army (PLA) and China's military-
        industrial complex.
  --The attache in Shanghai would focus on performing end-use checks in 
        South and West China. With significant commercial centers and 
        transportation hubs, this large region poses significant risks 
        of diversion.
  --Russia's physical proximity to and close commercial relationships 
        with countries of proliferation concern such as Iran, Iraq, and 
        India make Russia a critical country in which to post an 
        attache.
  --The UAE is a major transshipment point for U.S. products going to 
        Iran, Iraq, and Pakistan. Front companies are set up in the UAE 
        specifically to move advanced technology to the WMD projects of 
        those countries. An attache on the ground is important to 
        monitor developments, gather information, and perform end-use 
        visits.
  --The attache in India would monitor WMD programs in the South Asia 
        region and, through end-use visits, seek to prevent diversions 
        to those programs.
  --The attache in Singapore would monitor transshipments through 
        Singapore, which is the largest port in the world, and would 
        work within Southeast Asia to halt the transfer of strategic 
        products to WMD programs or uses.
  --Egypt's physical proximity and close commercial relationships with 
        the Sudan and Libya make it a transshipment risk. The attache 
        in Egypt would more closely monitor possible transshipments to 
        these countries. The attache also would perform end-use checks 
        in Malta and Cyprus, which are other key transshipment ports in 
        the region.
    Question. Prior to this year, who was responsible for conducting 
export monitoring and enforcement in Russia, the United Arab Emirates, 
India, and Singapore?
    Answer. In March 2001, BXA placed an export control attache in 
Moscow. This attache is responsible for conducting end-use checks, 
advising the embassy on dual-use export control issues, and working 
with the Russian government and local industry on export control 
issues. The Department of Commerce's Foreign Commercial Service 
officers, supplemented by special agents from BXA's Office of Export 
Enforcement (OEE) who travel overseas as part of the OEE Safeguards 
Program, are responsible for conducting export monitoring for the UAE, 
India, and Singapore.
    Question. Why is this receiving attention only now?
    Answer. Since, BXA has been conducting its statutorily-mandated 
mission of seeking to prevent illegal diversion of controlled items in 
or through these countries for many years. BXA efforts have intensified 
as the likelihood that dual-use commodities and technologies could be 
illegally diverted to weapons of mass destruction projects has 
increased and because of the growing importance of the countries 
identified above as transfer points for sensitive Commerce-licensed 
goods. BXA increased its Safeguards visits (composed of OEE special 
agents) to these countries and received temporary funding for our 
attache in Moscow from the State Department.
    Question. Does BXA's mission for export enforcement overlap with 
the mission of the Department of State's Bureau of Verification and 
Compliance? If so, in what way do they overlap and how do you expect to 
resolve this jurisdictional issue?
    Answer. There are only two agencies with statutorily-mandated 
responsibilities for verifying the end use of U.S. exports--the State 
Department and the Commerce Department. The State Department and 
Commerce Department have clearly delineated roles in the export control 
process. State licenses and verifies the end-use of munitions articles, 
while Commerce licenses and verifies the end-use of dual-use items 
(i.e., items having both a military and a commercial use).
    The Commerce Department established an end-use verification program 
in the early 1970s to conduct end-use verifications on certain products 
exported under Commerce-issued licenses or licence exceptions provided 
for in the Export Administration Regulations. These end-use checks are 
carried out by the Commerce Department's Foreign Commercial Service 
officer posted at the U.S. embassy in the destination country, or by 
Safeguards teams comprised of special agents from BXA's Office of 
Export Enforcement.
    The State Department has established the Blue Lantern program, 
based on the Commerce program, to conduct end-use verifications on 
munitions exports. Those munitions are licensed for export by the State 
Department, and the Customs Service has exclusive enforcement authority 
for any related violations. This program is carried out by designated 
State Department or Treasury Department employees assigned to the U.S. 
embassy in the destination country. Each embassy must designate a Blue 
Lantern coordinator each year. Embassies typically choose either an 
economics officer, political officer, or the Customs Service attache 
for this position.
    Accordingly, there is no overlap in the end-use verification 
programs conducted by the Departments of Commerce and State. 
Transactions are regulated either by Commerce or State. The nature of 
the items regulated by each differs fundamentally.
                   critical infrastructure protection
    Question. What criteria are used to evaluate CIAO and how regularly 
is this office evaluated?
    Answer. The Critical Infrastructure Assurance Office (CIAO) is 
reviewed annually on the basis of two performance goals. The first 
performance goal involves engendering awareness among the owners and 
operators of the nation's critical infrastructures (both private sector 
and state/local governments) on the need to secure their assets, 
systems, and networks against deliberate physical and cyber attacks. 
The CIAO is evaluated on the basis of how well it carries out its 
responsibilities for promoting national outreach, education, and 
awareness, and for coordinating the preparation of an integrated 
national strategy for critical infrastructure assurance.
  --National Outreach, Education, and Awareness.--The challenge of a 
        national outreach and awareness effort is to present a 
        compelling business case for corporate action. The primary 
        focus of the CIAO's effort is on the nation's critical 
        infrastructure industries (e.g., information and 
        communications, banking and finance, transportation, energy, 
        and water supply), and particularly the corporate boards and 
        chief executive officers who ultimately are responsible for 
        setting company policy and allocating company resources. The 
        basic message conveyed is that critical infrastructure 
        assurance is a matter of sound corporate governance and prudent 
        risk management. Senior management is responsible for securing 
        corporate assets--including information and information 
        systems. Corporate boards are accountable, as part of their 
        fiduciary duties, to provide effective oversight of the 
        development and implementation of appropriate infrastructure 
        security policies and best practices.
      In addition to infrastructure owners and operators, the CIAO's 
        awareness and outreach efforts target other influential 
        stakeholders in the economy. The risk management community--
        including the audit and insurance professions--is particularly 
        effective in raising matters of corporate governance and 
        accountability with corporate boards and senior management. In 
        addition, the investment community is increasingly interested 
        in how information security practices affect shareholder 
        value--a concern of vital interest to corporate boards and 
        management.
  --National Strategy.--A national strategy for critical infrastructure 
        assurance developed jointly between government and industry is 
        essential to developing a consensus about respective roles and 
        responsibilities. A national strategy also will help to 
        establish a basis for proposing legislative and public policy 
        reforms where such reforms are needed to advance national 
        policy on critical infrastructure assurance.
    The development of a national strategy will not be an end in 
itself, but part of an ongoing process in which government and industry 
will continue to modify and refine their efforts at critical 
infrastructure assurance, adjust to new circumstances, and update the 
national strategy as appropriate. A particular focus of this strategy 
will be on cyberspace security. The White House has assigned the task 
of coordinating the development and final integration of this strategy 
to the CIAO. The Administration's strategy will be completed during 
2002, with updates and revisions expected during 2003.
    The second performance goal for the CIAO involves assisting 
civilian federal departments and agencies in analyzing their 
dependencies on critical infrastructures to assure the delivery of 
federal government services that are essential to the nation's 
security, economy, or the health and safety of its citizens. To carry 
out this mission, the CIAO developed ``Project Matrix,'' a program 
designed to identify and characterize accurately the assets and 
associated infrastructure dependencies and interdependencies that the 
U.S. Government requires to fulfill its most critical responsibilities 
to the nation. These are deemed ``critical'' because their 
incapacitation could jeopardize the nation's security, seriously 
disrupt the functioning of the national economy, or adversely affect 
the health or safety of large segments of the American public. Project 
Matrix involves a three-step process in which each civilian federal 
department and agency identifies: (i) its critical assets; (ii) other 
federal government assets, systems, and networks on which those 
critical assets depend; and (iii) all associated dependencies on 
privately owned and operated critical infrastructures.
    Question. What function does CIAO perform that no other agency 
does?
    Answer. The CIAO performs a number of essential, non-duplicative 
functions in connection with the Administration's overall critical 
infrastructure protection efforts. Under Executive Order 13231 (the 
Order), issued on October 18, 2001 and entitled ``Critical 
Infrastructure Protection in the Information Age,'' the CIAO supports 
the newly created President's Critical Infrastructure Protection Board 
(the Board). The Board was created to coordinate federal efforts and 
programs relating to the protection of information systems and networks 
essential to the operation of the nation's critical infrastructures. In 
carrying out its responsibilities, the Board fully coordinates its 
efforts and programs with the Assistant to the President for Homeland 
Security.
    Under the Order, the CIAO also supports the activities of the 
National Infrastructure Advisory Council (NIAC). The NIAC will be 
composed of thirty senior executives from private industry, academia, 
and state and local governments who will advise the President on 
matters relating to the security of information systems for critical 
infrastructures that support other sectors of the economy, including 
banking and finance, transportation, energy, manufacturing, and 
emergency government services.
    The CIAO also will administer a new program--the Homeland Security 
Information Technology and Evaluation Program--to assess federal 
information systems and methods of acquiring and distributing 
information to improve data sharing among federal agencies for 
emergency response, law enforcement, intelligence, border security, and 
immigration. The program office established in CIAO will propose 
methods to improve information sharing among federal agencies and state 
and local governments. The CIAO will work closely with and take direct 
guidance from the Office of Homeland Security and the Office of 
Management and the Budget to ensure consistency with the 
Administration's overall homeland security policy.
    In addition to these responsibilities, the CIAO will continue to 
perform its national outreach and awareness efforts, its coordination 
of the national strategy for critical infrastructure assurance, and its 
efforts to assess federal agency dependencies via Project Matrix as set 
forth in detail above. These functions remain essential to carrying out 
the Administration's policy for homeland security and critical 
infrastructure protection and are not performed by any other agency.
    Question. Does CIAO's work overlap with the FBI's National 
Infrastructure Protection Center or any other Federal agencies or 
offices?
    Answer. No. The CIAO and the National Infrastructure Protection 
Center (NIPC) do very different things. While both organizations engage 
in industry outreach, their efforts are complementary rather than 
duplicative. The CIAO focuses on raising national awareness of critical 
infrastructure assurance issues across industry sectors, influencing 
corporate information assurance policy, promoting market solutions for 
greater cyber security, and addressing legislative and legal issues 
that potentially undermine business incentives to maximize voluntary 
efforts at securing critical infrastructures. NIPC seeks to encourage 
private industry to share information about cyber vulnerabilities and 
incidents so that it can assist companies in preventing specific types 
of attacks and investigating such attacks when they occur. Both efforts 
are required elements of overall critical infrastructure assurance 
policy.
    Question. Since it was established in fiscal year 1999, we have 
appropriated a total of $20.5 million for CIAO. What is the argument 
for continuing--and this year expanding--CIAO?
    Answer. The argument for continuing the CIAO is that the office 
continues to play an essential role in advancing the Administration's 
critical infrastructure protection efforts. The specific roles and 
functions that justify the office's continued operation--including 
promoting national awareness and outreach on critical infrastructure 
assurance issues, coordinating the development of the national strategy 
for critical infrastructure protection, analyzing federal asset 
dependencies through Project Matrix, supporting the work of the 
President's Critical Infrastructure Protection Board and the National 
Infrastructure Advisory Council, and administering the Homeland 
Security Information Technology and Evaluation Program--are described 
in detail above.
    Question. As I understand it, CIAO's original purpose was to liaise 
with the private sector to ensure that inattention to critical 
infrastructure protection did not provide opportunities to those who 
seek to cause damage to our Nation's physical or economic security. 
Now, CIAO has become a policy-making office with responsibility, 
according to the fiscal year 2003 budget request, for coordinating with 
the Office of Homeland Security, conducting a study of other agencies' 
information systems, and developing models for improved information-
sharing among agencies. From whence does CIAO derive its authority to 
undertake these initiatives, many of which will require intimate 
involvement with our Nation's law enforcement agencies? Is this not an 
example of mission creep at its worst?
    Answer. The CIAO always has served as an interagency policy-
coordinating office; it has never been nor seeks to be a policy-making 
office. As discussed above, the CIAO serves a number of functions in 
addition to promoting national public-private awareness and outreach. 
The CIAO will administer the Homeland Security Information Technology 
and Evaluation program, working closely with the Office of Homeland 
Security and the Office of Management and the Budget. Assigning this 
program to the CIAO is not an example of mission creep. Three 
particular attributes made the CIAO a good choice for this program. 
First, the CIAO is an interagency office that already has demonstrated 
effectiveness in crossing agency boundaries to achieve broad program 
goals and recommend actions to policy officials for improved program 
performance within the agencies. Second, the CIAO has extensive 
experience in analyzing critical federal government functions and 
systems under the highly successful Project Matrix program. The CIAO 
knows how to manage and leverage expertise within the federal 
government and from the private sector to achieve specific programmatic 
outcomes. Third, and perhaps most important, Commerce and the CIAO have 
no vested interest in the outcome of any decisions on implementation of 
recommendations. Implementation of any recommendations proposed by the 
program office within the CIAO will fall on the relevant lead agencies. 
Locating the program office in the CIAO was one way to ensure 
institutional neutrality in the development and evaluation of various 
policy options. Housing this program office in the CIAO will not result 
in the program office becoming ``operational.'' Any recommendations 
that are made by the program office will be reviewed by an interagency 
Information Integration Management Review Board, led by a Deputy 
National Security Advisor, and will be carried out by the relevant 
department or agency.
    Question. Mr. Secretary, are you aware of the important work the 
Dartmouth Institute for Security and Technology Studies in this area 
(critical infrastructure protection)? Two years ago, I helped get this 
program off the ground. Its mission is to study and develop 
technologies addressing counter-terrorism, especially counter-cyber 
terrorism. Its core research program studies threats to electronic 
information infrastructure systems and technologies, and seeks 
appropriate and effective technological preparedness, response and 
recovery actions, as well as training and information needs. This 
program has enormous potential--Dartmouth has the ability to draw upon 
some of the best minds in the country. I would ask you to look at how 
the Department of Commerce (specifically CIAO and NIST) can integrate 
and coordinate its efforts with the work being done at ISTS.
    Answer. The Dartmouth Institute for Security and Technology Studies 
(ISTS) is the Executive Agent for the Institute for Information 
Infrastructure Protection (I\3\P), funded through the National 
Institute of Standards and Technology (NIST). The CIAO has been 
involved with that initiative to develop a national R&D agenda. At the 
request of the Special Advisor to the President for Cyberspace 
Security, the first scheduled I\3\P meeting will be in the Washington, 
D.C. area on April 15-16, 2002, to allow for coordination between I\3\P 
and the President's Critical Infrastructure Protection Board. The 
Director of the CIAO will participate in that meeting.
    The CIAO also has been working closely with the ISTS through the 
National Institute of Justice (NIJ). Recently, NIJ has reviewed and 
approved a proposal from ISTS for investigative research for 
infrastructure assurance. CIAO is represented on the NIJ review board 
and has been fully engaged in the ISTS review and approval process. 
(NIST is also represented on the review board.)
    Mr. Vatis (Director, Dartmouth ISTS) has invited CIAO officials to 
New Hampshire for a visit of the ISTS facility and that visit should 
take place in the next several months. The purpose of the visit is two 
fold: (1) to see the facilities and capabilities first-hand; and (2) to 
discuss how we may partner in the future on many of these important 
issues.
    With regards to NIST, NIST has met with ISTS representatives on a 
number of occasions to discuss our mutual programs so as to both avoid 
duplication and also to explore areas of mutual cooperation. NIST has, 
in fact, been invited by the National Institute of Justice to review 
on-going and proposed ISTS work items. We intend to continue to do so.
         national institute for standards and technology (nist)
                           homeland security
    Question. How is NIST currently supporting Federal efforts to 
combat terrorism?
    Answer. NIST has for many years provided measurements, standards, 
data, and technical advice to help Federal, state, and local agencies 
and the private sector protect U.S. citizens from terrorist and 
military threats, natural disasters, and other types of security 
threats. NIST's broad expertise in measurement science and technology 
supports current and future homeland security applications and 
research. For example, NIST provides standards to ensure accurate 
forensic DNA analysis, develops computer security standards with the 
private sector, provides tools to analyze building fires and collapses, 
develops measurements and standards to support chemical, biological, 
radiological, nuclear and explosive (CBRNE) threat detection, and 
provides a broad range of support for many other security activities. 
NIST's Office of Law Enforcement Standards (OLES) works with Federal 
agencies to develop standards, test methods, and procedures for 
evaluation technologies used by the public safety and criminal justice 
communities, which includes law enforcement, corrections, forensic 
science, the fire service, and emergency responders. OLES work focuses 
on the areas of public safety communications standards, detection and 
inspection systems, chemical detection, forensic sciences, weapons and 
personal protective systems, and critical incident technologies.
    Since immediately following the September 11 attacks, NIST experts 
have been working with Federal, state, and local government agencies 
and the private sector to help mitigate the effects of the attack and 
learn how to prepare against possible future attacks. For example, NIST 
building and fire experts have worked on teams probing the causes of 
the collapse of the World Trade Center towers and the damage to the 
Pentagon. NIST scientists provided expert advice on DNA analysis to 
identify remains of terrorist victims. Following the anthrax attacks, 
NIST experts have worked with the U.S. Postal Service and other Federal 
agencies to ensure that commercial radiation facilities can be used to 
sanitize mail potentially contaminated with anthrax and/or other 
biological bacteria. NIST scientists have also worked with Federal 
officials to model the transport of anthrax bacteria through the Hart 
Senate Office Building to better understand how to best decontaminate 
that facility.
    NIST is conducting more that 75 ongoing and newly initiated 
research and standards development projects to support law enforcement, 
military operations, emergency services, airport and building security, 
cyber security, and research into future security technologies. Because 
much of NIST's work builds general measurement and standards 
capabilities that are applicable to a wide range of applications in 
addition to homeland security, it is difficult to accurately report the 
resources devoted to homeland security. NIST estimates at least a $40 
million current investment in measurements and standards work directly 
or indirectly related to homeland security.
    Question. Mr. Secretary, with regard to NIST's investigation into 
the collapse of the World Trade Center towers, it has been brought to 
my attention that the engineers who were on-site in the first days 
following the attack pleaded with FEMA to save some key pieces of the 
destroyed structure for research purposes. Their requests were ignored, 
and much of the wreckage is no longer available for study. So, my 
question for you is: What is NIST going to study? Is any field research 
going to be done, or is this largely going to be a theoretical study 
using computer models?
    Answer. The primary objectives of the independent and comprehensive 
NIST-led technical investigation of the WTC disaster are to:
  --Determine technically, why and how the World Trade Center buildings 
        collapsed following the airplane impacts.
  --Determine why the injuries and fatalities were so high or low 
        depending on location, including all technical aspects of fire 
        protection, response, evacuation, and occupant behavior and 
        emergency response.
  --Determine whether or not state-of-the-art procedures and practices 
        were used in the design, construction, operation, and 
        maintenance of the World Trade Center buildings.
  --Determine whether there are new technologies or procedures that 
        should be employed in the future to reduce the potential risks 
        of such a collapse.
  --Identify building and fire codes, standards, and practices that 
        warrant revision.
    NIST will ensure a totally independent technical investigation both 
in planning and conducting the investigation and in publishing its 
findings and recommendations. The technical issues are highly complex, 
unique, and subtle. The focus of the investigation will be on creating 
new technical and/or scientific knowledge. The technical work will be 
thorough, deliberate and rigorous. The results will be objective and 
unbiased. NIST will provide timely and open public disclosure within 
legal bounds on the progress of the investigation. NIST will make no 
findings of fault or responsibility. It will make no determination as 
to behavior or negligence of any individual or organization.
    The technical approach of the NIST investigation will include the 
following phases:
  --Data Collection: inputs from the Port Authority of New York and New 
        Jersey (PANYNJ) and local authorities; building and fire 
        protection design, plans, and specifications; construction, 
        maintenance, operation records, building renovations and 
        upgrades; video and photographic data; field data; interviews; 
        emergency response records including audio communications; and 
        other records.
  --Analysis and Comparison of Building and Fire Codes: analysis and 
        comparisons of codes and standards then and now, and 
        specifications used for WTC buildings.
  --Identification of Technical Issues and Major Hypotheses Requiring 
        Investigation: opportunity for public input (e.g., open forum; 
        website; Federal Register notice); convene expert panels to 
        solicit input (experts in structural and fire protection 
        engineering; experts in construction, maintenance, operation 
        and emergency response procedures of tall buildings); findings 
        and recommendations of FEMA-funded study; analyze inputs and 
        establish priorities; review and approval by independent 
        Technical Review Panel.
  --Collection and Analysis of Forensic Evidence: structural steel, 
        material specimens and other forensic evidence to the extent 
        they have been collect or are otherwise available; 
        metallurgical and mechanical analysis.
  --Modeling, Simulation, and Scenario Analysis: aircraft impact on 
        structures and estimate damages to interior and core structure 
        and residual capacities; role of jet fuel and building contents 
        in resulting fire; fire dynamics and smoke movement; thermal 
        effect on structures and the effect of fireproofing; structural 
        response under fire and the effect of connections, flooring 
        system, core and exterior columns, and the overall structural 
        system; occupant behavior and response including influence of 
        communications and barriers to egress; evacuation issues 
        including egress, analysis of control/fire panels, emergency 
        response, and communications; analysis of fire protection 
        system design and vulnerability; and analysis of structural 
        collapse mechanisms including evaluation of system 
        vulnerability to progressive collapse and fires, scenario 
        analysis to test hypothesis and address technical issues, and 
        establishing bounds for probably technical causes.
  --Testing to Demonstrate Scenarios and Failure Mechanisms: small and 
        some real-scale re-creation tests to provide additional data 
        and verify simulation predictions, especially effect of fires 
        (e.g., use and adequacy of standard fire ratings, behavior of 
        connections and assemblies).
  --Preparation of Interim and Final Reports: review and approval by 
        specially appointed and independent Technical Review Panel; 
        dissemination via published reports, web, and media.
  --Presentation of Findings and Technical Recommendations: building 
        and fire safety communities and including appropriate codes and 
        standards and professional practice organizations, and the 
        media.
                       world trade center towers
    Question. Mr. Secretary, with regard to NIST's investigation into 
the collapse of the World Trade Center towers, it has been brought to 
my attention that the engineers who were on-site in the first days 
following the attack pleaded with FEMA to save some key pieces of the 
destroyed structure for research purposes. Their requests were ignored, 
and much of the wreckage is no longer available for study. So, my 
question for you is: What is NIST going to study? Is any field research 
going to be done, or is this largely going to be a theoretical study 
using computer models?
    Answer. The primary objectives of the independent and comprehensive 
NIST-led technical investigation of the WTC disaster are to:
  --Determine technically, why and how the World Trade Center buildings 
        collapsed following the airplane impacts.
  --Determine why the injuries and fatalities were so high or low 
        depending on location, including all technical aspects of fire 
        protection, response, evacuation, and occupant behavior and 
        emergency response.
  --Determine whether or not state-of-the-art procedures and practices 
        were used in the design, construction, operation, and 
        maintenance of the World Trade Center buildings.
  --Determine whether there are new technologies or procedures that 
        should be employed in the future to reduce the potential risks 
        of such a collapse.
  --Identify building and fire codes, standards, and practices that 
        warrant revision NIST will ensure a totally independent 
        technical investigation both in planning and conducting the 
        investigation and in publishing its findings and 
        recommendations. The technical issues are highly complex, 
        unique, and subtle. The focus of the investigation will be on 
        creating new technical and/or scientific knowledge. The 
        technical work will be thorough, deliberate and rigorous. The 
        results will be objective and unbiased. NIST will provide 
        timely and open public disclosure within legal bounds on the 
        progress of the investigation. NIST will make no findings of 
        fault or responsibility. It will make no determination as to 
        behavior or negligence of any individual or organization.
    The technical approach of the NIST investigation will include the 
following phases:
  --Data Collection: inputs from the Port Authority of New York and New 
        Jersey (PANYNJ) and local authorities; building and fire 
        protection design, plans, and specifications; construction, 
        maintenance, operation records, building renovations and 
        upgrades; video and photographic data; field data; interviews; 
        emergency response records including audio communications; and 
        other records.
  --Analysis and Comparison of Building and Fire Codes: analysis and 
        comparisons of codes and standards then and now, and 
        specifications used for WTC buildings.
  --Identification of Technical Issues and Major Hypotheses Requiring 
        Investigation: opportunity for public input (e.g., open forum; 
        website; Federal Register notice); convene expert panels to 
        solicit input (experts in structural and fire protection 
        engineering; experts in construction, maintenance, operation 
        and emergency response procedures of tall buildings); findings 
        and recommendations of FEMA-funded study; analyze inputs and 
        establish priorities; review and approval by independent 
        Technical Review Panel.
  --Collection and Analysis of Forensic Evidence: structural steel, 
        material specimens and other forensic evidence to the extent 
        they have been collect or are otherwise available; 
        metallurgical and mechanical analysis. By testing the material 
        samples that are available, we believe we can make limited 
        determinations on the quality of steel and the maximum 
        temperatures reached by the steel. These determinations would 
        be valid for the samples actually tested and to the extent that 
        those samples are representative of steel used elsewhere in the 
        buildings. In addition, the field observations already made by 
        the ASCE team have enabled them to draw useful inferences on 
        the possible mechanisms of structural failure.
  --Modeling, Simulation, and Scenario Analysis: aircraft impact on 
        structures and estimate damages to interior and core structure 
        and residual capacities; role of jet fuel and building contents 
        in resulting fire; fire dynamics and smoke movement; thermal 
        effect on structures and the effect of fireproofing; structural 
        response under fire and the effect of connections, flooring 
        system, core and exterior columns, and the overall structural 
        system; occupant behavior and response including influence of 
        communications and barriers to egress; evacuation issues 
        including egress, analysis of control/fire panels, emergency 
        response, and communications; analysis of fire protection 
        system design and vulnerability; and analysis of structural 
        collapse mechanisms including evaluation of system 
        vulnerability to progressive collapse and fires, scenario 
        analysis to test hypothesis and address technical issues, and 
        establishing bounds for probably technical causes.
  --Testing to Demonstrate Scenarios and Failure Mechanisms: small and 
        some real-scale re-creation tests to provide additional data 
        and verify simulation predictions, especially effect of fires 
        (e.g., use and adequacy of standard fire ratings, behavior of 
        connections and assemblies).
  --Preparation of Interim and Final Reports: review and approval by 
        specially appointed and independent Technical Review Panel; 
        dissemination via published reports, web, and media.
  --Presentation of Findings and Technical Recommendations: building 
        and fire safety communities and including appropriate codes and 
        standards and professional practice organizations, and the 
        media.
                   patent and trademark office (pto)
    Question. How is a 21 percent increase for the Patent and Trademark 
Office justified? What evidence do you have that higher funding levels 
will necessarily lead to improved turnaround rates on pending patents 
and trademarks?
    Answer. As the importance of intellectual property assets has 
increased in society, so too has the USPTO's workload. In fiscal year 
2001, patent filings increased 11.2 percent above fiscal year 2000's 
level. Since 1996, patent filings are up over 70 percent and these 
levels of growth are expected to continue for the next several years. 
Trademark filings in fiscal year 2001, while down 21 percent, were 
still the second highest level ever and follow two consecutive years of 
27 percent increases. In recent years, the USPTO budget has not been 
increased relative to this dramatic growth in its workload.
    Without adequate and sustained funding, we cannot reduce pendency 
in the short term or invest in business process changes that will allow 
us to better manage workloads in the future. Patent and trademark 
processing and pendency times are highly dependent on the number of 
applications filed, existing pending inventories, and staffing levels 
specific skills. Successive years of insufficient funding relative to 
workloads have contributed to staffing levels that were woefully 
inadequate to keep up with new filings. As a result, pendency increased 
well beyond established goals.
    Trademark pendency to first office action dropped below our goal of 
three months and reached its lowest level in thirteen years in 2001. 
This accomplishment was achieved as a result of declining application 
filings, a greater reliance on electronic communications and systems, 
and a larger and more productive examination staff. Our request for 
2003, to complete the process redesign of the trademark operation by 
delivering a fully electronic workflow, represents the final investment 
in our successful integration of automated systems and processes that 
will allow us to manage more filings with fewer staff by relying on 
electronic filing and communications. Trademarks will use $18.1 million 
of the 21 percent increase to complete its process redesign and deliver 
a fully electronic trademark workflow by 2004. This e-Government 
initiative represents an investment in the future ability of the USPTO 
to create a process that will enable us to handle fluctuations in 
trademark filings with more predictable results and reduce our 
dependence on ever increasing budget requests and staffing relative to 
workloads.
    The Patent Business has been experiencing double-digit growth rates 
as high as 12 percent annually for a number of years. Patent 
applications are estimated to increase by 10 percent from fiscal year 
2003 through fiscal year 2007. The majority of these applications are 
in the high technology fields. Patents must have the flexibility to 
hire additional examiners who have the industry specific knowledge to 
examine these complex applications. The Patent Business is also fully 
aware of customer concerns about increasing pendency. To address this 
problem, the Patent Business plans on hiring 950 patent examiners in 
fiscal year 2003 and for several years thereafter. Hiring these 
examiners will allow us to begin turning the corner on pendency in 
fiscal year 2004. Without sufficient and sustained funding to hire 
additional examiner staff, the USPTO will be unable to maintain a 
pendency level that is acceptable to our customers.
    Question. In the fiscal year 2002 Commerce appropriations bill, the 
PTO was directed to develop a five-year plan. We understand that this 
plan was debuted in the PTO's fiscal year 2003 budget request. How 
heavily were you involved in the preparation of this plan? What is your 
opinion of it?
    Answer. The five-year Business Plan that was submitted as the 
fiscal year 2003 budget request is in response to the fiscal year 2002 
CJS Appropriations Act Conference Report. The plan establishes goals 
for timeliness and quality for patent and trademark processing. The 
USPTO kept both the Deputy Secretary and myself informed of their 
planning process. While I believe the Business Plan represents a start 
toward achieving quality and timeliness improvements, I support USPTO 
Director Jim Rogan's efforts to seek innovative ways to achieve even 
greater pendency and quality improvements than those identified in the 
Business Plan.
    Question. What progress has PTO made towards a paperless patent 
application process? Is this a priority for you?
    Answer. Implementing paperless patent application processing at the 
USPTO is of the highest priority. We have recently initiated an 
automation initiative, called Tools for Electronic Application 
Management (TEAM), that will establish the infrastructure required to 
support the electronic processing of patent applications while 
retaining the essential legal and business processes that protect the 
intellectual property rights of the applicants. The TEAM program will 
support the entire patent application process beginning with 
application authoring, through the Electronic Filing System (EFS), and 
proceeding through to electronic publishing and records archival.
    The TEAM program will also integrate individual automated 
information systems, both existing and to be developed, to achieve the 
appropriate legal replication of the current paper-based patent 
business process. The electronic patent application process must 
support statutory regulations promulgated by Congress, as codified 
under Title 35 of the United States Code (35 U.S.C.), both as they 
presently exist and as they may become enacted in the future. 
Additionally, the electronic patent application process must be 
commensurate with USPTO's rules and interpretations of the statutory 
regulations, as published within Title 37 of the Code of Federal 
Regulations (37 C.F.R.). TEAM will be implemented in phased releases 
with full implementation scheduled for September 2006.
    To accomplish the goal of patent application electronic filing, the 
USPTO plans to gradually transfer the responsibility of developing and 
maintaining electronic application authoring and submission tools to 
the private sector. To this end, the USPTO has issued a Request For 
Agreement (RFA) to private sector vendors, reviewed responses, and is 
the final stages of solidifying contractual arrangements. It is 
envisioned that working with these vendors will allow the USPTO to take 
advantage of their established customer base, marketing techniques, and 
current tools, which they plan to adapt to promote electronic filing. 
These are clearly important advantages to reach the electronic filing 
rate needed to support the Return On Investment (ROI) for both the EFS 
and TEAM programs. The use of products developed by multiple RFA 
vendors provides additional adaptability and flexibility that is 
believed to be essential to achieving that goal.
    The USPTO is also continuing to explore a number of creative 
approaches to further encourage electronic filing. However, serious 
review of current policies and laws affecting USPTO business practices 
must be conducted in order to provide incentives to USPTO customers to 
file electronically and enable the internal end-to-end electronic 
processing of patent applications.
               fundamental change at bureau of the census
    Question. Mr. Secretary, would you agree that fundamental change is 
needed at the Bureau of the Census?
    Answer. Even though we just completed the most successful decennial 
census ever undertaken by the Census Bureau, we believe the process of 
conducting the decennial census needs to be fundamentally changed for 
2010. Census 2000 was an operational and data quality success: all 
operations were completed on time and within overall budget; overall 
coverage was improved; and differential coverage was improved for all 
minority groups and children. However, Census 2000 was conducted with 
high cost and at great risk. In 2010 the job will be more complex. We 
project that to repeat the Census 2000 design in 2010 would cost about 
$11.7 billion. Even at this great cost, repeating the old design would 
be extremely risky and would result in inferior data to that collected 
by the reengineered design.
    Opportunities exist to reduce risk, reduce full cycle costs, and 
improve accuracy for the 2010 Census. To take advantage of these 
activities, the Census Bureau must have adequate resources in place 
early in the decade for 2010 planning, development and testing. The 
strategy for re-engineered 2010 census features three key components 
that allow for improved testing, simplified data collection, and better 
information at less cost.
  --To increase enumerator efficiency, facilitate identification of 
        duplicate addresses and reduce field work, the Census Bureau 
        will enhance the geographic database and associated address 
        list (referred to as MAF/TIGER) by replacing the internally 
        developed system with one that uses Global Positioning 
        Technology and satellite mapping imagery or aerial photography 
        to update and improved the address information gathered for 
        Census 2000.
  --The American Community Survey which has been designed to sample 3 
        million households per year by county nationwide is expected to 
        provide more timely accurate data by replacing the decennial 
        system.
  --Early and comprehensive planning, development, and testing that 
        allows the Census Bureau to more efficiently reengineer the 
        process for taking the 2010 Census, particularly in the area of 
        field data collection, by taking advantage of the opportunities 
        afforded by an enhanced geographic system, and only short-form 
        data collection activities.
    These components are heavily integrated and interdependent. They 
can be thought of in the same way one envisions a 3-legged stool. They 
build on Census 2000 data collection efforts, as well as build on and 
complement one another.
    Savings in the overall cost and gains in accuracy for Census 2010 
can be realized only if there is adequate funding early in the decade 
to examine, develop, and test these opportunities.
              cost effectiveness of 2010 decennial census
    Question. How can we ensure that the next census is done in the 
most cost-effective way possible?
    Answer. The reengineered 2010 Census is based on a strategy 
designed to meet the following four goals: Improve the relevance and 
timeliness of census long form data, reduce operational risk, improve 
the accuracy of census coverage, and contain costs.
    To achieve each of these, including our goal to conduct the most 
cost-effective census possible, we have developed a three-pronged 
approach based on the following components:
  --The American Community Survey--which will provide more timely and 
        relevant data to communities throughout the decade and allow us 
        to conduct a short-form only census in 2010.
  --MAF/TIGER enhancement--which will improve our inventory of all 
        known living quarters, ensure that they are accurately located 
        on our census maps, and utilize commercial off-the-shelf 
        software allowing for an open, flexible, and integrated system 
        that makes it easier to update maps and address lists. 
        Commercial software will greatly facilitate our work with 
        geographic partnership programs as we incorporate address and 
        map update information from state, local, and tribal 
        governments.
  --2010 planning--A program of early planning, development and testing 
        designed to take advantage of these innovations and completely 
        restructure the management and conduct of a short form only 
        census in 2010. This will result in a 2010 Census that will 
        realize savings in excess of the additional costs associated 
        with conducting the ACS, implementing the MAF/TIGER 
        enhancements program, and early planning, development and 
        testing for the 2010 Census. Specifically,
  --The workload for enumerators in the field will be reduced because 
        they will be working with more accurate maps and address lists, 
        there will be fewer households to visit because a short form 
        only census will have a higher response rate, and they will not 
        be required to follow up on unanswered long form 
        questionnaires--a process that has been time consuming and 
        costly.
  --Staffing will be reduced at headquarters because we will not be 
        required to design, test and implement operations to 
        disseminate long form questionnaires and capture long form 
        data.
  --MAF/TIGER enhancements will enable us to fully utilize GPS equipped 
        hand held mobile computing devices to find, interview, and 
        update data on people and their housing units for the short-
        form only census. This innovation alone means that we can 
        dramatically reduce field infrastructure costs because we can 
        substantially reduce the use of paper maps and virtually 
        eliminate the use of paper assignment sheets, along with a 
        portion of the staff and space required to handle that paper. 
        While the costs for these MAF/TIGER enhancements would offset 
        some of these savings, the overall savings would exceed the 
        MAF/TIGER costs. Our full cycle analysis looks at the total 
        costs for ACS, MAF/TIGER and early planning for the 2010 
        Census. The total costs for full implementation are less than 
        the total costs for repeating Census 2000 in 2010. These net 
        savings would be realized even after paying for the full ACS, 
        MAF/TIGER, and early planning, testing and development 
        programs.
  --Planning, development and testing for 2010 operations also includes 
        a number of cost-saving initiatives, including targeting a 2nd 
        mailing of the questionnaires, which will increase the response 
        rate, taking advantage of electronic communications such as the 
        internet and telephone to deliver questionnaires and capture 
        data, and targeting our address list update operations to 
        improve the address list in the areas that need it most.
    The results of this work will mean that the overall cost of 
conducing the 2010 Census, including MAF/TIGER enhancements, ACS, and 
early planning and development for 2010, will be reduced. In addition, 
the persistent problem of a huge spike in the funding needs for the 
census occurring in the census year will be dramatically reduced. 
However, making these changes in Census 2010 will require an increased 
investment earlier in the decade as compared with the Census 2000 
cycle. Additional resources are needed in the early years because 
decennial census operations must be completely restructured to take 
full advantage of ACS and MAF/TIGER enhancements. But this increase is 
more than offset by the significant reductions later in the decade 
described above.
               census bureau's internal operating system
    Question. What is being done to rehabilitate the Census Bureau's 
internal operating system?
    Answer. Several of the management recommendations in the GAO report 
(``2000 Census: Analysis of Fiscal Year 2000 Budget and Internal 
Control Weaknesses at the U.S. Census Bureau''--GAO-02-30) address 
improvements to the Bureau's financial accounting systems. We are 
currently acting on these recommendations. This answer addresses all 
but three of those recommendations. The three not addressed by this 
answer dealt with current financial activities, rather than financial 
accounting systems.
Recommendation #3: Instruct accounting personnel to follow the written 
        policy for establishing accruals and proper cutoff for goods 
        and services received at year end.
    The Finance Division and Accenture contractors conducted staff 
training on September 13, 2001, on the estimated accrual process to 
ensure proper recordation of accrual transactions at year-end. As 
changes to accounting personnel occur, the Finance Division will 
continue to educate new personnel and provide refresher training to 
existing personnel, as needed.
    The Finance Division also has set up an internal audit review 
process to review the following:
  --Year-end accrual policies and procedures.
  --Year-end Estimated Accrual forms submitted from divisions.
  --Match subsequent disbursements with year-end accruals.
  --Actual vendor invoices to determine period of performance.
    The Census Bureau considers this recommendation closed.
Recommendation #4: Post accounting adjustments to subsidiary records in 
        a timely manner.
    We have implemented our new Commerce Administrative Management 
System (CAMS) closing program, which gives us the needed ability to 
track year-end adjustments in multiple periods. It has the capability 
to distinguish our year-end adjustments from the adjustments entered 
after the initial FACTS II submission and audit adjustments, which has 
caused discrepancies between Treasury and Office of Management and 
Budget records. All year-end adjustments have been entered into the 
financial system for fiscal year 2001. We have completed the validation 
of the year-end trial balance and closing entries. The final close 
process, which sets all financial system modules for fiscal year 2001 
to close, establish ending balances, and carry-forward balances, was 
completed on March 29, 2002. This new closing program will enable the 
Census Bureau to close our financial records on schedule.
    Implementation date: March 29, 2002--Completed.
Recommendation #5: Complete efforts to modify the Bureau's financial 
        systems to produce usable accounts payable and undelivered 
        orders subsidiary reports by vendor, close out thousands of 
        completed transactions with small balances, and archive all 
        completed transactions.
    The data clean-up is a continuing effort for all Undelivered Orders 
and Accounts Payable accounts to purge all remaining unmatched 
transactions, which were converted from our legacy system to CAMS. The 
data clean-up converts unmatched transactions by determining related 
transactions and populating the fields used in document matching with 
common matching values. These transactions have no impact on our 
financial balances. The Census Bureau plans to complete this data 
clean-up effort by July 2002.
    Targeted completion date: July 31, 2002.
    However, Census is working in conjunction with the Department is 
reviewing the existing archiving capability in CAMS, and to provide 
additional requirements for a comprehensive, JFMIP compliant approach 
to provide archiving and retrieval capability. The requirements 
documentation should be completed this fiscal year, with implementation 
targeted for fiscal year 2003.
Recommendation #6: Amend policies and procedures, which will require 
        supervisors to closely review employees time charges and 
        project codes to ensure more accurate project costs for 
        salaries and benefits.
    As part of the census planning process for the 2004 Census Test, 
the Census Bureau is reviewing policies and procedures related to the 
completion of payroll documents and supervisory review and approval of 
those documents and will amend them as appropriate. We know that with a 
large, short-term intermittent staff, it is difficult to train them 
adequately in proper charging of hours and other expenses. We will look 
for ways to improve training and to stress the use of proper task codes 
and project numbers for the various field operations. We also will work 
on supervisors' training and procedures for the review and approval of 
payroll documents in hopes that accuracy of reporting can be improved. 
We also will develop supervisory checklists, which can be used during 
the review of payroll forms to ensure that proper task codes and 
project numbers are being used for the various operations.
    Another aspect of our procedures that we feel impacts the accuracy 
of costs is the appointing of field staff into the proper position. In 
Census 2000, we created a new position, the Crew Leader Assistant, that 
was established late in the census process and was paid at the same 
rate as the enumerator. We know that in many offices, people that 
worked as Crew Leader Assistants were originally hired as enumerators 
and were not officially converted into the Crew Leader Assistant 
position. This resulted in their hours and expenses being reported as 
enumerators and had an adverse impact on cost reports and productivity. 
We plan to establish all positions in a more timely manner in the 
future and to develop procedures that ensure staff is hired into the 
proper position. It is extremely important that hours and expenses for 
production and nonproduction staff are reported accurately. Policies 
and procedures to ensure this occurs will be instituted when hiring is 
initiated for the 2004 Test.
    Target Implementation Date: Procedures will be revised and amended 
as appropriate and will be implemented when hiring and training are 
initiated for the 2004 Test, which should be in the summer of 2003.
                            softwood lumber
    Question. Mr. Secretary are you aware of the softwood lumber issue, 
and can you give us a status report on the countervailing and 
antidumping investigation?
    Answer. As you may know, on Friday, March 22, 2002, the Department 
announced our findings in these investigations. We found that Canada 
was subsidizing their lumber at 19.34 percent. We also found that 
Canadian companies sold their product below market value at an average 
of about 10 percent. We will, nonetheless, continue to pursue a lasting 
solution to the softwood lumber issue--one that encourages market-based 
reforms of provincial forestry practices in Canada.
    Question. Are you aware of the particular problem that some loggers 
and landowners in New England have had, which is that a dumping tax 
was, in effect, imposed on U.S. lumber that is shipped to Canada for 
processing?
    Answer. I am very much aware of this situation and understand the 
hardship that these duties can have on our loggers and landowners in 
New England and other U.S. states. For this and other reasons, we have 
excluded 20 Canadian companies from the duties; a number of which were 
Quebec border mills based on our findings that these Canadian companies 
were not subsidized.
    Question. Is there going to be any opportunity for these companies 
[logger and landowners in New England] to present their case and thus 
rectify this situation?
    Answer. We are looking into all administrative procedures under the 
law that will allow us to address this issue. My staff will continue to 
work closely with your staff and those from Senators Snowe and Collins' 
office, as well as the U.S. industry, to find ways to make sure that 
the timber suppliers in the United States have the opportunity to be 
heard and have their concerns addressed.
              noaa--transfer of national sea grant program
    Question. Mr. Secretary, do you support the transfer of Sea Grant 
to the National Science Foundation?
    Answer. I support the President's Budget Request that proposes to 
transfer Sea Grant to the National Science Foundation. The proposal is 
a result of a review of Federal science programs that the Office of 
Management and Budget (OMB) conducted and is consistent with the 
President's Management Agenda. Under the proposal, the Sea Grant 
program would be administered as an NSF/NOAA partnership. The transfer 
is part of a wider Administration effort to promote competitive funding 
of scientific research and to capitalize on the demonstrated excellence 
of the NSF and its program management.
    Question. If we keep this program at Commerce, will you continue to 
execute it as you have in the past?
    Answer. At this time, we have not considered any changes to the 
program. Should the program remain within the Department of Commerce, 
we will work with Congress and the Administration to make any changes 
that may be appropriate.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                      bureau of economic analysis
    Question. Mr. Secretary, it is crucial that policymakers have the 
most accurate economic data possible. This is particularly the case for 
budgeting. We use BEA data for constructing our baseline, and it is a 
foundation for most fiscal policy making by the Administration and the 
Congress.
    I am pleased to see the President request additional funding to 
improve our economic statistics through both the Bureau of the Census 
for which $23.6 million is requested, and through the BEA for which 
$10.7 million is requested.
    I am especially 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-business. Could you explain to 
the Subcommittee why this initiative is so important?
    Answer. The rapid change in the U.S. economy has challenged BEA to 
keep its statistics as accurate and reliable as possible. Until 
recently, BEA was unable to implement a number of initiatives that 
sought to incorporate these significant changes in our economy. Recent 
budget increases, including President Bush's request for fiscal year 
2003, were important in getting BEA statistics back on track. Measuring 
e-business and the new economy has been part of these recent 
improvements.
    Why is measuring e-business important? Measuring the impact of e-
business and other high-tech sectors of the economy is critical to 
reducing the size of the revisions of GDP and the national accounts 
which contributed to large corrections in budget forecasts. The 
Congressional Budget Office (CBO), in The Budget and Economic Outlook, 
Fiscal Years 2001-2012, estimated that roughly 40 percent of the change 
in the budget outlook over the next ten years, or $1.6 trillion, was 
due to changes in economic and technical assumptions. A major 
contributor to the changes in CBO assumptions were BEA's revisions in 
the level and trend growth of GDP, incomes, and productivity. A large 
share of the GDP revisions were related to inadequacies in the data 
available to BEA on key products such as software and other high-tech 
sectors. Funding to develop more adequate source data will help reduce 
these revisions and the resulting corrections in budget forecasts.
    Question. Previous administrations and the Congress have been 
working toward the goal of better economic estimates since the Boskin 
initiative in the 1980's. Could you provide the Subcommittee with 
information on what funding has been provided over the past ten years 
for these initiatives and a brief statement on what has been 
accomplished thus far?
    Answer. BEA made a number of important changes to improve economic 
statistics as a result of the Boskin Commission recommendations of 
1990-1991. Chain indexes were introduced into the national accounts; 
improved measures of productivity, output and prices were incorporated; 
estimates of GDP by industry were dramatically improved; and better 
measures of foreign and U.S. investments were developed. Funding levels 
for the early 1990s are shown in the attached tables from the General 
Accounting Office's July 1995 report Economic Statistics: Status Report 
on the Initiative to Improve Economic Statistics.
    BEA's efforts to fully implement most of the Boskin Commission 
recommendations were hampered by budget shortfalls in the second half 
of the 1990's. From fiscal year 1994-fiscal year 2000, BEA received no 
funding increases to provide for data improvement initiatives. Today, 
BEA again is able to address some of the issues raised by Chairman 
Boskin in the early 1990s. Budget increases in fiscal year 2001 and 
fiscal year 2002 have allowed BEA to develop measures of the new 
economy and close important gaps in coverage of GDP. President Bush's 
budget request for fiscal year 2003 also allows BEA to address specific 
recommendations made by the Boskin Commission such as improving the 
timeliness of important economic indicators such as international trade 
and GDP by Industry. Fiscal year 2003 initiatives at the Census Bureau 
to improve coverage of the service sectors and better measure e-
business and high-technology sectors are critical to further 
improvements to the GDP. Despite current budget increases, a number of 
recommendations still remain to be address. (See Attachment A)
    Question. Should Congress provide the requested funding in fiscal 
year 2003, what is the outlook for additional enhancements in the next 
two to three years?
    Answer. Funding for fiscal year 2003 will help BEA achieve the 
challenges put forth by Secretary Evans to generate more timely 
economic statistics and meet international statistical obligations. 
Working closely with its data users, BEA developed a Five-Year 
Strategic Plan which calls for a number of important improvements over 
the next five years to a broad range of economic measures. The summary 
table below lays out highlights of the Plan for the next two to three 
years.

----------------------------------------------------------------------------------------------------------------
            BEA Accounts                                   Future Strategic Plan Priorities
----------------------------------------------------------------------------------------------------------------
National............................  Utilize ``real-time'' data in estimates to more quickly and accurately
                                       measure price changes
                                      Improve timeliness of GDP and NIPA release
                                      Reduce GDP revisions by developing improved source data for under measured
                                       sectors such as software and biomedicine
International.......................  Develop better measures for financial transactions and holdings that now
                                       bypass international capital reporting systems
                                      Conduct research on alternative methods of measuring U.S. balance of
                                       payments
Industry............................  Improve timeliness and accuracy of capital flow data to allow users to
                                       determine where industries invest (i.e., high tech investments)
                                      Develop employment tables to measure employment impacts by industry
                                      Provide increased industry detail in input-output tables
Regional............................  Improve accuracy and timeliness of state, local, metropolitan and regional
                                       estimates
                                      Develop state-level estimates of public and private investment flows
                                      Develop regional price indices to measure across-region price differences
Management Agenda...................  Develop strategies to hire and retain staff and plan for the anticipated
                                       wave of senior manager retirements
                                      Increase usability and data content of BEA website
                                      Expand electronic data collection systems
----------------------------------------------------------------------------------------------------------------

              manufacturing extension partnership program
    Question. Secretary Evans, I know that the Administration has to 
make tough decisions in its budget deliberations. In some years, budget 
proposals have gone so far as to do away with the entire Department of 
Commerce, and yet it is still here. I am concerned, however, about the 
Administration's proposal to essentially eliminate funding for the 
Manufacturing Extension Partnership program within the National 
Institute of Standards and Technology (NIST). The Manufacturing 
Extension Partnership Program is currently funded at $106.5 million, 
and the 2003 request is for $12.9 million to phase out the program.
    Mr. Secretary, I have to tell you that the Manufacturing Extension 
Partnership Program has done extremely good work in New Mexico, and I 
have heard from dozens of my constituents in favor of continuing 
funding for the program at $110 million in 2003.
    What has the Manufacturing Extension Partnership Program achieved 
during the past six years of funding? Has it met the purpose for which 
it was established--to assist small businesses and manufacturers gain 
access to technologies, resources, and technical expertise that they 
might not have in-house and make them more competitive?
    Answer. MEP has been a successful program and demand for its 
services continues to grow. Over the last six years MEP has had a 
significant impact on small manufacturers performance. MEP has provided 
direct assistance to small manufacturers for their business operations, 
including process improvement, implementing quality management systems, 
implementing business systems, marketing development, plant layout, 
environmental studies, electronic commerce, and other areas of best 
practices to improve productivity and competitiveness. In fiscal year 
2000, MEP clients surveyed reported that MEP services resulted in: Over 
25,000 jobs created or retained; $2.3 billion in sales impact; cost 
savings of over $480 million; and increased investments of over $870 
million.
    Question. I know that this program works through a nationwide 
network of manufacturing extension centers, which are linked to state, 
university, and private sources of technical expertise. It is somewhat 
modeled on the extremely successful agriculture extension model. How 
much does the Manufacturing Extension Partnership Program leverage in 
terms of non-federal investments annually?
    Answer. Typically, centers receive one-third of their funding from 
the Federal government. From fiscal year 1989 through fiscal year 2002 
(estimated), the Federal investment in MEP centers is approximately 
$806 million. One-third of the remaining two-thirds of center support 
comes from state and local organizations, and the other third comes 
from fees for services.
    Question. With this kind of success and broad support in the 
private sector, what is the Administration's rationale for phasing out 
this program?
    Answer. We are a nation at war against terrorism and difficult 
choices have to be made in terms of priorities within the Federal 
budget. Unfortunately, every program cannot be funded. MEP has been a 
successful program and demand for its services continues to increase. 
We believe that many MEP centers will continue to exist in the absence 
of Federal funding, and as a result, small businesses will continue to 
receive the expertise and assistance from the centers. To offset the 
loss of Federal funding, centers could increase fees receipts. Given 
the centers' success in improving productivity and efficiency, 
assessing fees for service should be the direction in which the program 
heads. The benefits to small firms seeking MEP assistance, such as 
improved productivity and efficiency, should outweigh the cost of the 
fees. Also, large manufacturers that depend on smaller companies may 
also wish to provide support to MEP centers to ensure the continuing 
success of their smaller suppliers.
              public telecommunications facilities program
    Question. Secretary Evans, I am pleased to see that the 
Administration's fiscal year 2003 budget continues to support the 
Public Telecommunications Facilities Program (PTFP), which provides 
grants to public radio and TV stations for equipment. The PTFP program 
has had its ups and downs over the year, and has even been proposed for 
termination. From $15.25 million in fiscal year 1997, and over the past 
several years, this Subcommittee has elevated funding to the current 
$51.7 million in fiscal year 2002--$43.5 million plus a supplemental of 
$8.25 million.
    Mr. Secretary, I have been a longtime supporter of the Public 
Telecommunications Facilities Program 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 $43.6 million for PTFP for fiscal year 2003, 
essentially level funding minus the supplemental. My local broadcasters 
have been in to request significant additional federal support as the 
statutory deadline for converting to digital equipment approaches in 
2003. The broadcasters' funding request is $110 million for fiscal year 
2003. How much of the $43.6 million requested does the Administration 
envision going toward assisting broadcasters with the purchase of 
digital equipment as we approach the 2003 conversion date?
    Answer. During the recent fiscal year 2001 grant round, NTIA 
awarded almost $35 million for digital conversion grants out of a total 
of $42 million awarded through the program. We expect to award 
approximately this level of funding for digital television conversion 
projects from the $43.6 million requested in fiscal year 2003.
    Question. For the past several years, Congress has worked to 
augment the PTFP budgets to support the conversion to digital 
equipment. How much has the PTFP program provided for this purpose? 
Could you provide the Subcommittee with a breakdown of the amounts 
provided and the grantees funded for this purpose for the past five 
years?
    Answer. Over the past four years (fiscal year 1998-2001) that NTIA 
has funded the digital conversion of public television facilities, the 
program has awarded over $60 million for digital conversion projects to 
grantees in 42 states. These Federal funds have been matched by the 
recipients with almost $95 million in non-Federal funds. Attached is a 
breakdown of the grant awards (Attachment B). Grants for fiscal year 
2002 will be announced in September.
    Question. The Congress has provided some digital conversion funding 
through the Corporation for Public Broadcasting (CPB), and in fact, the 
private and public sectors will be providing two-thirds of the total 
cost of digital conversion, and the federal government one-third of the 
cost. Do the Department and the PTFP program work closely with the 
Corporation of Public Broadcasting as this conversion project proceeds? 
How is this effort being coordinated?
    Answer. NTIA is working closely with CPB. The two grant programs 
have coordinated their grant timetables and plan to stagger funding 
decisions. To ensure that NTIA and CPB do not duplicate funding for 
stations, the programs will exchange equipment lists of applicants and 
meet as necessary to review funding decisions.

                                                           ATTACHMENT A.--APPENDIX II--ECONOMICS STATISTICS INITIATIVE RECOMMENDATIONS
                                                                                     [Dollars in Thousands]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                             Funding for fiscal
                                                                                                                                                        Responsible agency      year 1990-94
         GAO's 7 Areas                   38 ESI Recommendations                 1990 Recommendations \1\                1991 Recommendations \2\                \3\        ---------------------
                                                                                                                                                                            Requested   Received
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
National Income and Product      Indirect estimation methods...........  Explore alternative methods for         Use indirect estimation methods to     BEA...............  \4\ $3,20  \4\ 1,700
 Accounts statistics                                                      estimating constant dollar output.      close data gaps; methods include                                  0
 recommendations.                                                                                                 price measurement of high-tech
                                                                                                                  goods, measurement of certain
                                                                                                                  services, and improved deflation of
                                                                                                                  purchases by state and local
                                                                                                                  governments.
                                 Input-output tables...................  Expedite the compilation of input-      Reduce by 2 years the lag in           BEA...............    ( \4\ )    ( \4\ )
                                                                          output data.                            benchmark and annual input-output
                                                                                                                  tables.
                                 Construction-methodology..............  Complete ongoing methodological and     .....................................  BEA...............    ( \4\ )    ( \4\ )
                                                                          data collection improvements and
                                                                          incorporate these in the 1990 GNP.
                                 System of national accounts...........  Revise the U.S. national income and     Develop modernized and extended        BEA...............      5,700      1,200
                                                                          product accounts to be consistent       national economic accounts that
                                                                          with the major components of the        follow the United Nations revised
                                                                          United Nations system of national       system of national accounts.
                                                                          accounts, which are used by most of     Features are to include (1) an
                                                                          the major industrialized nations of     integrated set of current and
                                                                          the world.                              capital accounts that include both
                                                                                                                  financial and nonfinancial
                                                                                                                  transactions and (2) satellite
                                                                                                                  accounts.
                                 Inflation adjustments.................  Add supplementary series to the         .....................................  BEA...............          0          0
                                                                          national income and product accounts
                                                                          that separate the real and inflation
                                                                          components of the return to capital.
                                                                          Currently this is done only with the
                                                                          corporate profits series.
                                 Purchased services....................  Accelerate and rearrange timetable for  Provide data for improved assessment   Census............      3,492          0
                                                                          service sector improvements.            of the sources of economic growth
                                                                                                                  and structural change by industry.
                                 Corporate financial data..............  Accelerate and rearrange timetable for  Provide greater precision in           Census............      4,970          0
                                                                          service sector improvements.            estimates by industry and more
                                                                                                                  comprehensive data by asset size.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Price measurement statistics     Service prices........................  Accelerate the BLS programs to expand   Conduct research to develop measures   BLS...............      7,241      5,685
 recommendations.                                                         and improve producer, consumer, and     of output for the service sector.
                                                                          international price indexes to
                                                                          measure service prices more
                                                                          accurately.
                                 Separation of quality and inflation     ......................................  Separate quality and inflation         BLS...............      3,479      2,309
                                  changes.                                                                        changes in price data.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Labor market statistics          Employment cost index.................  Expand and seasonally adjust the        .....................................  BLS...............      1,700      1,700
 recommendations.                                                         employment cost index.
                                 Coverage of payroll employment          Continue BLS and Census efforts to      Add 110 service producing industries   BLS...............      8,948      7,458
                                  estimates.                              improve and modernize the current       to the payroll survey.
                                                                          population survey and the current
                                                                          employment statistics program.
                                 Accuracy of payroll employment          Continue BLS and Census efforts to      Improve accuracy of estimates of       BLS...............     13,294     13,794
                                  estimates.                              improve and modernize the current       payroll employment.
                                                                          population survey and the current
                                                                          employment statistics program.
                                 Business establishment data--Census     Explore ways for Census to share its    .....................................  Census............        400          0
                                  and BEA.                                establishment data with BEA, for use                                          BEA...............          0          0
                                                                          in improving the national accounts.
                                 Construction-coverage.................  ......................................  Improve coverage and accuracy of       Census............      3,900  .........
                                                                                                                  construction statistics.
                                 Investment and saving.................  Accelerate work to improve measures of  .....................................  Federal Reserve...    ( \5\ )    ( \5\ )
                                                                          investment and saving and to the                                              BEA...............          0          0
                                                                          extent possible reconcile differences                                         Census............        900        638
                                                                          between the various measures of
                                                                          saving.
                                 Flow of funds.........................  Improve the collection, coverage, and   .....................................  Federal Reserve...    ( \5\ )    ( \5\ )
                                                                          processing procedures for the
                                                                          financial flow data in the Federal
                                                                          Reserve Board flow of funds accounts.
                                 Annual investment survey..............  Undertake the proposed annual           .....................................  Census............      2,000      2,000
                                                                          investment survey at the Census
                                                                          Bureau.
                                 Data gaps.............................  ......................................  Use administrative records, support    BEA...............      4,700          0
                                                                                                                  new surveys, support extensions to
                                                                                                                  existing surveys, and conduct
                                                                                                                  research to close data gaps.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Service sector statistics        Service sector surveys................  Accelerate and rearrange timetable for  Increase detail and coverage of        Census............      7,116      1,400
 recommendations.                                                         service sector improvements.            service sector in Census' annual
                                                                                                                  survey of services and periodic
                                                                                                                  census of service industries.
                                 Automated data collection for current   Continue BLS and Census efforts to      Incorporate automated data collection  BLS...............      5,000      3,510
                                  population survey.                      improve and modernize the current       techniques to improve the current
                                                                          population survey and the current       population survey.
                                                                          employment statistics program.
                                 Reconciliation of employment estimates  Continue BLS efforts to reconcile and   .....................................  BLS...............          0          0
                                                                          reduce discrepancies between the
                                                                          employment series arising from the
                                                                          household and the establishment
                                                                          surveys.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Income and poverty statistics    Poverty thresholds....................  Begin research on developing a new      .....................................  Census............          0          0
 recommendations.                                                         benchmark estimate of poverty
                                                                          appropriate to prices, consumption
                                                                          patterns, and family composition in
                                                                          the 1990s.
                                 Experimental estimates of income and    Continue publication of the             .....................................  Census............          0          0
                                  poverty.                                experimental estimates of real family
                                                                          income and poverty.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
International transactions       Trade in services.....................  Accelerate improvements in estimates    Undertake surveys of bank and nonbank  BEA...............  \6\ 7,600  \6\ 3,100
 statistics recommendations.                                              of trade in services.                   financial institutions' noninterest
                                                                                                                  service income and improve BEA's
                                                                                                                  survey of international trade in
                                                                                                                  other services.
                                 International investment and capital    Estimate direct investment using        Improve coverage of capital flows and  BEA...............    ( \6\ )    ( \6\ )
                                  flows.                                  market values or replacement cost       investment income and reduce the
                                                                          rather than historical cost and         large statistical discrepancy in the
                                                                          address problems with the measurement   international payments accounts.
                                                                          of international portfolio investment
                                                                          and other capital flows.
                                 Reconciliation of import and export     Extend efforts to reconcile import and  .....................................  Census............  \7\ 1,400      \7\ 0
                                  data.                                   export data to Mexico, the European
                                                                          Community, South Korea, and Japan.
                                 Automation of export and import data..  Continue work to increase automation    .....................................  Census............    ( \7\ )    ( \7\ )
                                                                          of export and import data collection.
                                 Merchandise exports model.............  ......................................  Develop a model to adjust for          Census............    ( \7\ )    ( \7\ )
                                                                                                                  understatements of exports and other
                                                                                                                  improvements in the measurement of
                                                                                                                  exports.
                                 Access to trade data..................  Increase the ease of access to trade    .....................................  Census............    ( \7\ )    ( \7\ )
                                                                          data.
                                 International guidelines for economic   ......................................  Develop modernized and extended        BEA...............      1,000          0
                                  accounts.                                                                       international economic accounts that
                                                                                                                  follow the International Monetary
                                                                                                                  Fund guidelines. Features are to
                                                                                                                  include (1) an integrated set of
                                                                                                                  current and capital accounts,
                                                                                                                  including balance sheets and (2) new
                                                                                                                  detail in several significant areas.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Systemwide statistics            Survey of Income and Program            Explore the possibility of carefully    .....................................  Census............          0          0
 recommendations.                 Participation.                          linking the data from the Survey of
                                                                          Income and Program Participation to
                                                                          administrative records, while taking
                                                                          great care to safeguard
                                                                          confidentiality.
                                 Standard industrial classification....  ......................................  Ensure that the standard industrial    BEA...............          0          0
                                                                                                                  classification system can keep track  Census............        100        100
                                                                                                                  of emerging industries and develop
                                                                                                                  methods to keep up with rapid
                                                                                                                  changes occurring across all
                                                                                                                  industries.
                                 Farm lists............................  ......................................  Develop a more complete and accurate   NASS..............      4,800      2,250
                                                                                                                  farm list for the 1992 Census of
                                                                                                                  Agriculture.
                                 Business establishment lists--Census    ......................................  Improve business establishment lists   BLS...............      1,900        500
                                  and BLS.                                                                        by reconciling BLS and Census lists   Census............          0          0
                                                                                                                  of business establishments.
                                 Cooperation...........................  Increase cooperation between the        .....................................  BEA...............          0          0
                                                                          statistical establishment and                                                 BLS...............          0          0
                                                                          academic researchers.                                                         Census............          0          0
                                 Mandatory v. voluntary surveys........  Consider the efficacy of mandatory      .....................................  Census............          0          0
                                                                          versus voluntary surveys.
                                 Data duplication......................  Continue work toward the goal of        Prepare legislation to provide a       OMB...............          0          0
                                                                          eliminating unnecessary duplication,    standardized mechanism for limited
                                                                          but avoid the loss of unique and        sharing of confidential information
                                                                          important alternative data.             solely for statistical purposes.
                                 Center for survey methods.............  ......................................  Create a center for survey methods to  NSF...............      2,100      2,100
                                                                                                                  improve the talents and skills of
                                                                                                                  the existing federal statistical
                                                                                                                  workforce and attract highly
                                                                                                                  qualified entrants.
                                                                                                                                                                           ---------------------
      Total....................  ......................................  ......................................  .....................................  ..................  \8\ 94,94     49,444
                                                                                                                                                                                    0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The 1990 recommendations are quoted directly from a prepared statement for Michael J. Boskin, Chairperson of the Council of Economic Advisers at a hearing before the Joint Economic
  Committee, U.S. Congress, March 1, 1990.
\2\ The 1991 recommendations are paraphrased by GAO from a February 14, 1991, Council of Economic Advisers announcement.
\3\ Information is recorded for each responsible agency for recommendations with multiple responsible agencies.
\4\ BEA combined these three recommendations into one budget request to increase funding to stop the deterioration in the quality of the national economic accounts.
\5\ Federal Reserve funds are not included here since it does not receive appropriated funds from Congress.
\6\ BEA combined these two recommendations into one budget request to improve balance of payments and international investment data.
\7\ Census combined these four recommendations into one budget request to improve foreign trade statistics.
\8\ Total request includes $14,047,000 in reinstated requests, which means an agency requested funding more than once when the funding was not received in prior years.
 
Note: GAO's 7 areas and the 38 ESI recommendations are our categorizations of the Economics Statistics Initiative recommendations that were in the 1990 and 1991 CEA releases.


                       ATTACHMENT B.--PTFP DIGITAL TELEVISION CONVERSION GRANTS 1998-2001
----------------------------------------------------------------------------------------------------------------
                                                                                          Total Project
               Grantee                            City/State              Federal Award       Cost         Year
----------------------------------------------------------------------------------------------------------------
Alaska Public Telecommunications.....  Anchorage, AK...................        $701,073      $1,046,378     2001
Alabama ETV Commission...............  Birmingham, AL..................       1,070,884       2,677,210     2001
Alabama ETV Commission...............  Birmingham, AL..................         870,800       2,177,000     2000
Alabama ETV Commission...............  Birmingham, AL..................         810,667       1,621,334     1999
Alabama ETV Commission...............  Birmingham, AL..................         374,701         749,403     1998
Arizona State University.............  Tempe, AZ.......................       1,028,450       2,056,900     1999
The University of Arizona............  Tucson, AZ......................         671,962       1,679,905     2001
Redwood Empire Public TV, Inc........  Eureka, CA......................         494,769         743,025     2001
Valley Public Television, Inc........  Fresno, CA......................         193,884         484,712     2001
Community TV of Southern California..  Los Angeles, CA.................         861,607       1,723,215     1999
KVIE, Inc............................  Sacramento, CA..................         711,780       1,779,451     2001
San Diego State Univ. Foundation.....  San Diego, CA...................         610,111       1,220,222     1999
San Diego State Univ. Foundation.....  San Diego, CA...................         475,152         950,305     1998
KQED, Inc............................  San Francisco, CA...............         850,176       1,700,352     1998
Front Range Educ. Media Corp.........  Denver, CO......................         379,374         758,748     2001
Connecticut Public Broadcasting, Inc.  Hartford, CT....................         317,524         793,812     2001
Connecticut Public Broadcasting, Inc.  Hartford, CT....................         552,282       1,380,705     2000
Coastal Educational Broadcasters.....  Daytona Beach, FL...............         807,687       3,230,750     2001
Pensacola Junior College.............  Pensacola, FL...................         675,000       1,250,585     1999
Florida W. Coast Pub. Brdcstg., Inc..  Tampa, FL.......................         121,600         304,000     2001
Florida W. Coast Pub. Brdcstg., Inc..  Tampa, FL.......................         704,691       1,761,726     2000
Georgia Pub. Telecom. Commission.....  Atlanta, GA.....................         933,539       3,734,155     2001
Georgia Pub. Telecom. Commission.....  Atlanta, GA.....................         222,500         890,000     2000
Hawaii Public Television Found.......  Honolulu, HI....................         746,792       2,075,000     2001
Iowa Public Broadcasting Board.......  Johnston, IA....................         350,237       1,400,950     2000
Idaho Public Television..............  Boise, ID.......................         881,031       3,524,123     2001
Idaho Public Television..............  Boise, ID.......................         473,402       1,893,610     2000
Idaho Public Television..............  Boise, ID.......................         668,574         891,433     1998
Southern Illinois University.........  Carbondale, IL..................         599,437       2,397,750     2001
Window to the World Communications...  Chicago, IL.....................         909,574       1,819,148     2000
Washburn University of Topeka........  Topeka, KS......................         522,376       1,305,940     2001
Washburn University of Topeka........  Topeka, KS......................         125,000         250,000     1999
Kentucky Authority for ETV...........  Lexington, KY...................         365,807       1,877,727     2001
Louisiana ETV Authority..............  Baton Rouge, LA.................         434,007       1,736,030     2001
Louisiana ETV Authority..............  Baton Rouge, LA.................         548,755       2,195,020     2000
Educational Brdcstg. Found., Inc.....  New Orleans, LA.................         863,120       2,157,800     2001
Maine Public Broadcasting Corp.......  Bangor, ME......................         681,375       2,725,500     2001
Maine Public Broadcasting Corp.......  Bangor, ME......................         256,250       1,025,000     2000
Detroit ETV Foundation...............  Detroit, MI.....................         486,257         972,515     1999
University of Michigan...............  Flint, MI.......................         683,236       1,708,090     2001
Central Michigan University..........  Mt. Pleasant, MI................         530,200       1,325,500     2001
Delta College........................  University Center, MI...........         349,067         520,995     2001
Delta College........................  University Center, MI...........         636,500         950,000     2000
Northern Minnesota PTV, Inc..........  Bemidji, MN.....................         934,611       1,394,942     2001
Twin Cities Public Television, Inc...  St. Paul, MN....................         679,278       1,358,557     1999
Public Television 19, Inc............  Kansas City, MO.................         291,488         728,722     2000
Southwest Missouri State Univ........  Springfield, MO.................         613,587       1,227,174     2001
St. Louis Regional E&PTV Comm........  St. Louis, MO...................         299,164       1,196,656     2000
Central Missouri State University....  Warrensburg, MO.................         775,540       3,401,495     2001
Mississippi Authority for ETV........  Jackson, MS.....................       1,800,000       4,537,400     2001
Montana State University.............  Bozeman, MT.....................         723,860         965,147     2001
Prairie Public Broadcasting, Inc.....  Fargo, ND.......................         359,587         536,698     2001
Prairie Public Broadcasting, Inc.....  Fargo, ND.......................         916,696       1,368,203     2001
Prairie Public Broadcasting, Inc.....  Fargo, ND.......................       1,141,302       1,521,736     2000
Prairie Public Broadcasting, Inc.....  Fargo, ND.......................         939,635       1,252,847     1999
Nebraska Educ. Telecom. Comm.........  Lincoln, NE.....................       1,500,000       3,840,122     2001
Nebraska Educ. Telecom. Comm.........  Lincoln, NE.....................       1,200,000       3,186,060     2000
New Jersey Pub. Brdcstg. Authority...  Trenton, NJ.....................         622,575       2,490,300     2001
New Jersey Pub. Brdcstg. Authority...  Trenton, NJ.....................         608,262       1,216,525     1999
University of New Mexico.............  Albuquerque, NM.................         871,799       1,644,905     2001
University of New Mexico.............  Albuquerque, NM.................       1,200,000       2,274,974     2000
Clark County School District.........  Las Vegas, NV...................         429,405       1,073,514     2000
Channel 5 Public Broadcasting, Inc...  Reno, NV........................         392,562       1,570,248     2001
WSKG Public Telecom. Council.........  Vestal, NY......................         663,576       1,658,940     2001
Greater Dayton PTV, Inc..............  Dayton, OH......................         705,542       1,763,856     2001
Northeastern ETV of Ohio, Inc........  Kent, OH........................         210,113         525,284     2000
Oklahoma ETV Authority...............  Oklahoma City, OK...............         241,111         482,222     1998
Oklahoma ETV Authority...............  Oklahoma City, OK...............       1,110,702       4,442,807     2001
Oregon Public Broadcasting...........  Portland, OR....................         501,416       1,253,540     2001
Oregon Public Broadcasting...........  Portland, OR....................         642,020       1,605,050     2000
WHYY, Inc............................  Philadelphia, PA................         221,661         554,154     2001
Pennsylvania State University........  University Park, PA.............         586,357       1,465,893     2001
Pennsylvania State University........  University Park, PA.............       1,246,422       3,116,057     2000
South Carolina ETV Commission........  Columbia, SC....................       1,499,551       5,998,206     2001
South Dakota Educ. Telecom...........  Vermillion, SD..................         996,453       1,660,755     2001
East Tennessee Pub. Telecom. Corp....  Knoxville, TN...................         178,656         446,640     2001
Mid-South Pub. Comm. Found...........  Memphis, TN.....................         766,635       1,916,587     2001
Nashville Public Television..........  Nashville, TN...................         184,640         461,600     2001
WDCN Public Television Corporation...  Nashville, TN...................         154,110         385,275     2000
North Texas Public Brdcstg., Inc.....  Dallas, TX......................         500,000       1,175,580     1999
North Texas Public Brdcstg., Inc.....  Dallas, TX......................         475,487         950,974     1998
El Paso PTV Foundation, Inc,.........  El Paso, TX.....................         203,325         271,100     2001
University of Utah...................  Salt Lake City, UT..............         384,775       1,539,100     2000
Public Broadcasting Service..........  Alexandria, VA..................         981,420       2,453,550     2001
Greater Wash. Educ. Telcom. Assoc....  Arlington, VA...................         156,250         312,500     1998
Shenandoah Valley ETV Corp...........  Harrisonburg, VA................         427,078       1,067,697     2001
Shenandoah Valley ETV Corp...........  Harrisonburg, VA................         464,948       1,162,369     2000
Hampton Roads Ed.Telecom. Assoc......  Norfolk, VA.....................         472,191       1,180,477     2000
Vermont ETV, Inc.....................  Colchester, VT..................         636,388       1,590,971     2001
Washington State University..........  Pullman, WA.....................         312,420         781,051     2001
KCTS Television......................  Seattle, WA.....................         967,400       1,934,801     1998
Spokane School District #81..........  Spokane, WA.....................         539,138       1,347,844     2001
Wisconsin Educ. Comm. Board..........  Madison, WI.....................       1,048,841       4,195,258     2001
University of Wisconsin System.......  Madison, WI.....................         473,831       1,895,326     2000
West Virginia Educ. Brdcstg.           Charleston, WV..................         574,654       1,436,636     2001
 Authority.
                                                                        --------------------------------
      TOTAL..........................  ................................      60,377,645     155,284,349
----------------------------------------------------------------------------------------------------------------

                          subcommittee recess

    Senator Hollings. We will meet next on Tuesday, March 19, 
to hear NOAA, the Small Business Administration, and the 
Federal Trade Commission.
    Secretary Evans. Wonderful. We are looking forward to that. 
Thank you, chairman.
    Senator Hollings. The subcommittee will be in recess.
    [Whereupon, at 11:40 a.m., Wednesday, March 13, the 
subcommittee was recessed, to reconvene at 10 a.m., Tuesday, 
March 19.]

 
DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2003

                              ----------                              


                        TUESDAY, MARCH 19, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Ernest F. Hollings (chairman) 
presiding.
    Present: Senators Hollings, Reed, Gregg, Stevens, and 
Domenici.

                         DEPARTMENT OF COMMERCE

            National Oceanic and Atmospheric Administration

STATEMENT OF CONRAD C. LAUTENBACHER, JR., VICE ADMIRAL, 
            U.S. NAVY (Ret.), UNDER SECRETARY OF 
            COMMERCE FOR OCEANS AND ATMOSPHERE

                           prepared statement

    Senator Hollings. The committee will come to order. We 
welcome Admiral Lautenbacher, the Administrator of the National 
Oceanic and Atmospheric Administration. Admiral, we appreciate 
your appearance here. We have your statement. It will be 
included in its entirety in the record and you can summarize it 
or deliver it as you wish.
    [The statement follows:]
           Prepared Statement of Conrad C. Lautenbacher, Jr.
    Thank you, Mr. Chairman, and members of the Committee, for this 
opportunity to testify on the President's fiscal year 2003 Budget 
Request for the National Oceanic and Atmospheric Administration (NOAA).
    Let me begin by saying that this budget supports and enhances the 
goals of the President and the Department of Commerce. NOAA has 
established itself as one of the world's premier scientific and 
environmental agencies. We are an agency that deals with environmental 
change. We are an agency whose products form a critical part of the 
daily decisions made by Americans across the Nation and have economic 
impacts which affect our Nation's Gross Domestic Product. From our 
climate predictions that impact farming and financial decisions, to our 
hydrological products that affect public utilities and energy 
consumption, NOAA is a critical part of our Nation's economic security.
    We are experts in climate, with its cooling and warming trends. We 
are an agency that manages fluctuating fisheries and marine mammal 
populations. We observe, forecast and warn the public about the rapidly 
changing atmosphere and especially severe weather. We monitor currents 
and tides, and beach erosion. We survey the ocean bottom and provide 
mariners with products to maintain safe navigation. We operate the 
Nation's most important constellation of earth--observing satellites. 
Lastly, we provide all this knowledge and exploration to citizens 
everywhere, especially to schools and young people across our Nation 
through our website www.noaa.gov. We provide this as a result of our 
mission to advance environmental assessment, environmental prediction, 
and natural resource stewardship for our great Nation.
    This budget supports products that are essential for decision 
makers in every part of our economy. NOAA's budget will continue to 
fund products that assist in protecting the health and safety of this 
Nation's citizens from both routine and severe environmental changes. 
This budget supports our research, science and services from the local 
weather forecast offices around the Nation to our Fisheries Research 
Vessels that ensure sustainable stocks of our Nation's fisheries. It 
provides for technology infusion and critical infrastructure protection 
to reduce single points of failure for our satellite and weather 
prediction programs; continues our special partnerships with 
universities, states, and local governments around the Nation; and 
invests in education and human resources. This budget also supports our 
vast infrastructure, which will allow NOAA to continue its mission in 
years to come.
    In a period of strongly competing Presidential priorities for our 
national defense, and economic security, the President's fiscal year 
2003 Budget Request for NOAA is $3,330.5 million in total budget 
authority, and represents a decrease of $45.4 million below the fiscal 
year 2002 enacted level. Within this funding level, NOAA proposes 
essential realignments that allow for a total of $148.8 million in 
program increases, and $129.0 million in base adjustments. NOAA's 
request highlights critical areas such as People and Infrastructure, 
Improving Extreme Weather Warnings and Forecasts, Climate Services, 
Modernization of NOAA Fisheries, and other key NOAA programs such as 
Energy, Homeland Security, Ocean Exploration, and Coastal Conservation.
      people and infrastructure: $129.0 million adjustment-to-base
    NOAA's people and infrastructure are at the heart of what NOAA is 
and does. From our hurricane research center in Miami, FL to NOAA's 
weather service office in Barrow, AK, these are the underlying and 
interconnecting threads that hold NOAA and its programs together. 
Investments in NOAA's scientific and technical workforce as well as 
NOAA's facilities and equipment is essential for us to carry out our 
mission into the 21st Century. ``People and Infrastructure'' is about 
investing in the future, and about maintaining NOAA's infrastructure 
that has been built over the last thirty-one years.
            improving extreme weather warnings and forecasts
    Critical to meeting our 21st Century mission is the continuity of 
NOAA's Satellites and Severe Weather Forecasts. There are few things 
that the Federal Government does that are as critical as issuing severe 
storm warnings and protecting the life and safety of Americans. Listed 
below is NOAA's request for this $84.3 million endeavor.
    Tornado Severe Storm Research.--NOAA requests a total of $1.0 
million to develop new technologies for forecasting and detecting 
tornadoes and other forms of severe weather, and to disseminate this 
information to emergency managers, the media, and the general public 
for appropriate action. This new technology has the potential to 
significantly extend lead times for tornadoes and other forms of severe 
and hazardous weather. Coupled with advanced decision support systems, 
tornado lead times may double from 10 to 22 minutes using this 
technology. The bottom line is that this investment will help save 
lives.
    U.S. Weather Research Program (USWRP).--NOAA requests an increase 
of $1.0 million for a total of $3.8 million to transition research and 
development into operations in order to reach a USWRP goal of improving 
forecasts of inland heavy precipitation associated with hurricane 
landfalls. This increase will be used to address the improvement of the 
forecasts of heavy and frequent, flood-producing rains associated with 
hurricanes and tropical storms as they move inland.
    Weather & Air Quality Research Laboratories.--NOAA requests an 
increase of $4.2 million for a total of $48.1 million to recapitalize 
the laboratories that conduct weather and air quality research, which 
includes funding for ongoing operational scientific activities to 
continue operation of the Wind Profiler Network and NOAA's Space 
Weather Program.
    Advanced Hydrological Prediction Service (AHPS).--NOAA requests an 
increase of $4.7 million for a total of $6.2 million to accelerate 
nationwide implementation of improved flood and river forecasts 
services in the Northeast, Middle Atlantic, and Southeast regions of 
the United States, including the states of: New Hampshire, Vermont, 
Virginia, North Carolina, and South Carolina. As implemented, AHPS 
will: (1) produce new information with better predictions of river 
height and flood potential to reduce loss of life and property; (2) 
deliver high resolution, visually oriented products to provide partners 
and customers with valuable information for life decisions; (3) refresh 
aging hydrologic forecasting infrastructure to support rapid infusion 
of scientific advances; and (4) leverage NOAA's investments in 
observational systems and atmospheric models to enhance accuracy and 
resolution of river forecasts.
    Weather & Climate Supercomputing.--NOAA requests an increase of 
$6.2 million for a total of $21.2 million to continue operations and 
maintenance of the current National Weather Service (NWS) 
supercomputer, and to transition the next generation weather and 
climate supercomputing system into operations. The NWS supercomputer is 
the foundation for all NWS weather and climate forecasts. Operational 
transition of the next generation supercomputer will enable the NWS to 
improve the resolution and forecast accuracy of the prediction models.
    Radiosonde Replacement.--NOAA requests an increase of $2.0 million 
for a total of $7.0 million to continue replacing and modernizing the 
upper air radiosonde network. The radiosonde network provides critical 
upper air observations which are a vital component of all weather 
forecast models. The current network is obsolete and nearing collapse, 
risking widespread loss of data within the next two to three years.
    Aviation Weather.--NOAA requests a total of $2.5 million to 
initiate a 7-year plan to help improve U.S. aviation safety and 
economic efficiencies by providing state-of-the-art weather observation 
and forecast products responsive to aviation user needs. Weather 
accounts for over 70 percent of all air traffic delays, which results 
in greater expenditures by both airline customers and the airlines. In 
addition, an average of 200 general aviation pilot fatalities per year 
are caused by weather-related accidents across the United States. This 
initiative will provide a means for the NWS to improve its aviation 
weather forecast services through 3 major components which include: (1) 
increasing the number and quality of aviation weather observations; (2) 
transitioning successful applied research efforts to operational 
products; and (3) developing and implementing new training programs for 
forecasters, pilots, and controllers. This initiative has the goal of a 
10 percent reduction in National Airspace System weather-related air 
traffic delays, which would save $600 million annually in potential 
economic losses, and reduce general aviation weather related fatalities 
by 25 percent, or 50 lives annually.
    Huntsville, AL Weather Forecast Office.--NOAA requests a total of 
$1.4 million to pay for recurring operations and maintenance costs at 
the new Huntsville, Alabama Weather Forecast Office (WFO). The 
Huntsville WFO was established in fiscal year 2002 at the University of 
Alabama at Huntsville. The $1.4 million requested will provide for NWS 
employee salaries, facilities rent and maintenance, and operational 
equipment and supplies to operate and maintain weather forecast and 
warning services in the Huntsville area.
    Polar Orbiting Systems.--NOAA requests a net increase of $64.3 
million for Polar Orbiting Systems, which are comprised of NOAA Polar 
K-N and the National Polar Operational Earth Satellite System. The net 
increase requested is described as follows:
  --NOAA Polar K-N'.--NOAA requests a decrease of $15.6 million for a 
        total of $122.9 million for the NOAA Polar K-N'. The Polar K-N 
        program is completing major procurement items and therefore 
        does not need to continue the funding levels of previous years.
  --National Polar-orbiting Operational Environmental Satellite System 
        (NPOESS).--NOAA requests an increase of $79.9 million for a 
        total request of $237.3 million for the continuation of the 
        tri-agency NPOESS program that will replace the NOAA POES 
        program after completion of the current NOAA K-N' series of 
        satellites. This request represents NOAA's share of the 
        converged NOAA/DOD/NASA program. In fiscal year 2003, funds 
        will be required to continue the development and production of 
        the NPOESS instruments, including the Visible Infrared Image 
        Radiometer, the Conical Microwave Imager Sounder, the Cross-
        track Infrared Sounder, the Ozone, Mapping and Profiler Suite, 
        the Global Positioning System Occultation Sensor, and the Space 
        Environmental Sensing Suite. The continued development of these 
        instruments is critical for their timely and cost effective 
        delivery to replace both the Defense Meteorological Satellite 
        Program (DMSP) and the NOAA POES spacecraft when needed.
  --Geostationary Operational Environmental Satellite (GOES).--NOAA 
        requests a decrease of $35.1 million for a total request of 
        $227.4 million to support continued post launch requirements 
        for GOES I-M; the continued procurement of the GOES-N series 
        satellites, instruments, ground systems, and systems support 
        necessary to maintain continuity of Geostationary operations; 
        and planning and development for the GOES-R series of 
        satellites and instruments. This decrease represents a program 
        change resulting from the successful launch of GOES M, and the 
        continued success of the GOES I-M series.
    Earth Observing System Data Archive & Access System Enhancement.--
NOAA requests a total of $3.0 million to ensure that NOAA can fully 
utilize the vast amounts of new satellite-based environmental data 
becoming available, process and distribute that data in a variety of 
formats, provide stewardship for the data, and make the data accessible 
to users in a variety of economic, research, government, and public 
sectors.
    Joint Center for Data Assimilation.--NOAA requests an increase of 
$2.6 million for a total of $3.4 million for the Joint Center for 
Satellite Data Assimilation. NWS, the Office of Atmospheric Research 
(OAR), and NASA also provide funding as partners in this coordinated 
national effort to more fully realize the potential of the vast 
quantities of new satellite data that are becoming available.
    Coastal Ocean Remote Sensing.--NOAA requests a total of $6.0 
million to develop and deploy a prototype high-resolution imaging 
sensor to meet long-standing NOAA requirements. This initiative will 
allow NOAA to work with NASA to develop conceptual design and 
capabilities of this instrument, which will continuously monitor 
coastal ocean areas for harmful algae blooms, coral reef deterioration, 
pollution changes, fisheries management, and navigation. This 
instrument will provide continuous, high resolution monitoring in 
unprecedented detail of terrestrial features such as vegetation 
changes, flooding, wild fires, volcanic eruptions, and ash cloud 
transport.
    Satellite Command & Data Acquisition (CDA) Facility.--NOAA requests 
an increase of $1.0 million for a total of $4.6 million to continue the 
Satellite CDA Infrastructure program. Improved facilities reduce the 
risk of outages and service disruptions caused by failure of the 
supporting buildings, facilities, and infrastructure. This program 
minimizes the risk of spacecraft loss and data loss and allows NOAA to 
continue supporting worldwide requirements for critical operational 
satellite data and services.
    Satellite Command and Control.--NOAA requests an increase of $4.4 
million for a total of $34.8 million for satellite command and control. 
This investment supports the operations of the NOAA satellite systems, 
the ingesting and processing of satellite data, and the development of 
new product applications required for continuity of operations. NOAA 
provides satellite command and control services on a 24 hours per day, 
365 days per year schedule. Two critical components of this initiative 
are:
  --Protecting Critical Satellite Control Facilities.--NOAA requests 
        $0.3 million to enhance security at the satellite Command and 
        Data Acquisition ground stations by upgrading and expanding 
        security lighting.
  --Satellite Command and Data Acquisition Station Operations.--NOAA 
        requests $2.2 million for the operation of the polar Satellite 
        Command and Data Acquisition (CDA) ground station. NOAA will 
        use these funds to obtain the appropriate technical, 
        management, and administrative contractor support to operate 
        and maintain the acquisition and throughput of data from NOAA 
        and DOD polar-orbiting satellites to NOAA's Satellite 
        Operations Control Center, and to National Weather Centers.
    Product Processing and Distribution.--NOAA requests an increase of 
$6.7 million for a total of $27.7 million to process and analyze data 
from NOAA, DOD, and other Earth-observing satellites; supply data, 
interpretations, and consulting services to users; and operate and 
maintain the Search and Rescue mission control center. This includes 
supplying satellite data that makes up approximately 85 percent of the 
data used in NWS numerical weather prediction models. NOAA will use the 
requested program increase to support the following two mission 
critical functions:
  --Reducing the Risk to Continuity of Critical Operations.--NOAA 
        requests a program increase of $3.1 million to expand on-site 
        maintenance and staffing levels to ensure that all critical 
        functions are performed. This ensures vital and timely 
        information to customers and staff during times of peak 
        workload.
  --Improved Support for Weather and Hazards.--NOAA requests a program 
        increase of $2.0 million to automate wild fire detection 
        algorithms to speed up the delivery of information to 
        customers, to integrate the information into geographic 
        information systems for detailed location information, and to 
        integrate new fire detection sensors from non-NOAA satellites.
    G-IV Instrumentation.--NOAA requests a total of $8.4 million to 
begin upgrading instrumentation aboard the G-IV aircraft. Improvements 
in NOAA's Gulfstream IV aircraft's remote-sensing systems will enhance 
NOAA's hurricane-reconnaissance capability. New technology will use 
remote sensors to develop 3-dimensional profiles of hurricanes from 
45,000 feet down to the surface and would provide forecasters with 
unprecedented real-time information on size and intensity. In addition, 
radar-composite maps will provide critical rainfall information that is 
crucial to forecasters and to the emergency management community for 
preparedness and evacuations.
                            climate services
    NOAA maintains a balanced program of focused research, large-scale 
observational programs, modeling on seasonal-centennial time scales, 
and data management. In addition to its responsibilities in weather 
prediction, NOAA has pioneered in the research and operational 
prediction of climate variability associated with the El Nino Southern 
Oscillation (ENSO). With agency and international partners, NOAA has 
also been a leader in the assessments of climate change, stratospheric 
ozone depletion, and the global carbon cycle. Our confidence in our 
recent El Nino prediction is based upon a suite of robust observing 
systems that are a critical component in any forecast.
    The agency-wide Climate Services activity represents a partnership 
that allows NOAA to facilitate the transition of research observing and 
data systems, and knowledge into operational systems and products. 
During recent years, there has been a growing demand from emergency 
managers, the private sector, the research community, and decision-
makers in the United States and international governmental agencies for 
timely data and information about climate variability, climate change, 
and trends in extreme weather events. The economic and social need for 
continuous, reliable climate data and longer-range climate forecasts 
has been clearly demonstrated. NOAA's Climate Services Initiative 
responds to these needs. The following efforts will be supported by 
this initiative:
    Climate Change Research Initiative.--On February 14, 2002, 
President Bush announced the Clear Skies and Global Climate Change 
initiatives. The Clear Skies plan aims to cut power plant emissions of 
three pollutants (nitrogen oxides, sulfur dioxide, and mercury) by 70 
percent. The new Global Climate Change initiative seeks to reduce 
greenhouse gas intensity by 18 percent over the next decade. The 
President's proposal supports vital climate change research and ensures 
that America's workers and citizens of the developing world are not 
unfairly penalized. NOAA's expertise will be extremely important in the 
area of climate research. NOAA, along with NASA, Department of Energy, 
National Science Foundation, and the Department of Agriculture will 
implement a multi-agency Climate Change Research Initiative totaling 
$40 million. The following sections detail NOAA's $18.0 million request 
to address key priorities of the CCRI.
  --Climate Modeling Center.--NOAA requests $5.0 million to establish a 
        climate modeling center at Princeton, New Jersey. This center 
        will focus on model product generation for research, assessment 
        and policy applications. NOAA has played a central role in 
        climate research, pioneering stratospheric modeling, seasonal 
        forecasting, ocean modeling and data assimilation, and 
        hurricane modeling. This core research capability will be 
        enhanced to enable product generation and policy related 
        research.
  --Global Climate Atmospheric Observing System.--NOAA requests $4.0 
        million to work with other countries to reestablish the 
        benchmark upper-air network. NOAA will emphasize data sparse 
        areas, and place new Global Atmosphere Watch stations in 
        priority sites to measure pollutant emissions, aerosols, and 
        ozone, in specific regions.
  --Global Ocean Observing System.--NOAA requests $4.0 million to work 
        towards the establishment of an ocean observing system that can 
        accurately document climate scale changes in ocean heat, 
        carbon, and sea level changes.
  --Aerosols-Climate Interactions.--NOAA requests $2.0 million to 
        contribute to the interagency National Aerosol-Climate 
        Interactions Program (joint partnership with NASA, DOE, NSF) 
        currently under development. Specifically, NOAA will establish 
        new and augment existing in-situ monitoring sites and conduct 
        focused field campaigns to establish aerosol chemical and 
        radiative properties.
  --Carbon Monitoring.--NOAA requests $2.0 million to augment carbon 
        monitoring capabilities in North America as well as 
        observations of globally relevant parameters in key under-
        sampled oceanic and continental regions around the globe.
  --Regional Integrated Science Assessments Program.--NOAA requests 
        $1.0 million for the Regional Integrated Science Assessments 
        Program (RISA). Working with the National Science Foundation 
        (NSF), NOAA will augment its research capability in assessing 
        climate change impacts vulnerability by utilizing the research 
        on ``Decision Making in the Face of Uncertainties'' in the 
        framework of the RISA programs, e.g. Pacific Northwest.
    Arctic Research.--NOAA requests a total of $2.0 million in support 
of the Study of Environmental Arctic Change (SEARCH) to improve 
monitoring of the elements of the Arctic environment. NOAA's SEARCH 
activities are part of a coordinated interagency and international 
program, begun in response to evidence of an alarming rate of 
environmental change occurring in the Arctic. The SEARCH initiative 
will substantially increase understanding of long-term trends in 
temperature, precipitation and storminess across the United States, 
with potential improvements in forecasting and planning for energy 
needs, growth seasons, hazardous storm seasons and water resources.
    University-National Oceanographic Laboratory System (UNOLS).--NOAA 
requests a total of $2.5 million to outsource with UNOLS and other 
sources for ships in the Pacific to support long-time series research 
for Fisheries-Oceanographic Coordination Investigations (FOCI), VENTS, 
Oregon/Washington Groundfish Habitat and maintenance of the Tsunami 
moorings in the Gulf of Alaska and Pacific Ocean. The increase will 
enable NOAA to continue to meet research requirements in the Pacific 
Ocean, Gulf of Alaska, and Bering Sea utilizing time aboard UNOLS and 
other vessels.
    Climate Monitoring and Ocean Observations.--NOAA requests an 
increase of $5.4 million for a total of $54.6 million to recapitalize 
the laboratories that conduct climate research, which includes $0.6 
million for purchasing equipment and improving the scientific 
activities that contribute to the long-term observing systems that 
directly support the President's CCRI initiative. These observing 
systems are the Global Ocean Observing System (GOOS); the Global Air 
Sampling Network and a gas network at four baseline observatories, and 
at Niwot Ridge, CO; and the Tropical Atmosphere Ocean (TAO) array which 
is the cornerstone of the El Nino/Southern Oscillation (ENSO) Observing 
System and other ocean observing systems.
    NOAA requests an increase of $8.3 million for a total of $36.6 
million for the Archive, Access, and Assessment programs working in 
Climate Services. This continued investment will be used for the 
following activities:
  --Regional Climate Services & Assessments.--To develop an improved 
        climate data and information delivery service. This will allow 
        NOAA to improve national, regional and state linkages and make 
        national, regional, state, and local weather and climate 
        observing systems and data bases more accessible.
  --Next Generation Environmental Information.--To develop a new 
        generation of World Wide Web accessible climate information and 
        statistics for primary use by the energy sector of our economy. 
        This funding will allow NOAA to overhaul the current methods 
        and procedures for computing climate information such as 
        heating and cooling degree days, heat indices, wind chills, 
        freezing degree days, and other related statistics with the 
        goal of making this information more appropriate and timely for 
        business decision-making and strategic planning purposes.
  --World Ocean Database.--This investment will be used to update the 
        World Ocean Database to include new sources of data and to put 
        in place the analytical and data management infrastructure 
        needed to transition this activity from the current research 
        mode to a sustained, operational service mode.
  --Extending America's Climate Record.--NOAA will use the funds to 
        gather key paleoclimatic records to fill gaps; reconstruct 
        climate records during pre-instrumental periods; and produce 
        blended data sets that integrate instrumental, historical, and 
        paleoclimatic data into a holistic climate record.
  --Solar X-ray Imager Archive.--NOAA will use the SXI archive to 
        derive new products to help reduce the effects of extreme space 
        weather events on telecommunications satellites, electrical 
        power services, and health risks to astronauts.
                    modernization of noaa fisheries
    The fiscal year 2003 President's Budget Request for NOAA, invests 
in core programs needed for our National Marine Fisheries Service 
(NMFS) to meet its mission to manage fisheries, rebuild stocks, and 
protect endangered species such as sea turtles and whales. NMFS 
modernization funds will be allocated to ensure that existing statutory 
and regulatory requirements are met for fisheries and protected species 
management programs (including the Magnuson-Stevens Act, National 
Environmental Protection Act, Endangered Species Act, Marine Mammal 
Protection Act, and other statutory requirements). This budget request 
continues NOAA's effort to modernize NOAA's Fisheries. The 
Modernization of NMFS encompasses a long-term commitment to improve the 
NMFS structure, processes, and business approaches. In addition to this 
budget request, the Administration will propose that any 
reauthorization of the Magnuson-Stevens Fisheries Conservation and 
Management Act include authority for fishing quota systems within 
regional fisheries, including transferable quotas, where appropriate. 
This initiative focuses on improving NMFS' science, management, and 
enforcement programs and begins to rebuild its aging infrastructure. 
These improvements will result in measurable progress in the biological 
and economic sustainability of fisheries and protected resources. To 
continue this modernization program, NOAA's fiscal year 2003 
President's Budget Request includes the following program investments 
in Science, Management, and Enforcement.
Science: $74.8 Million Increase
    Fisheries Research Vessel.--NOAA requests an increase of $45.5 
million for a total of $50.9 million for NOAA's second Fisheries 
Research Vessel (FRV2). This vessel will replace the 39-year old 
ALBATROSS IV in the North Atlantic. Costs of maintaining the aging 
ALBATROSS IV for the five years needed to construct the replacement FRV 
and to allow side-by-side missions for calibration purposes are 
escalating. Moreover, replacing the aging fleet is required to provide 
research platforms capable of meeting increasingly sophisticated data 
requirements for marine resource management.
    Modernize Annual Stock Assessments.--NOAA requests an increase of 
$9.9 million to modernize annual stock assessments. Funding will allow 
NMFS to conform to new national stock assessment standards of data 
quality, assessment frequency, and advanced modeling. An increase of 
$5.1 million is requested to provide for the recruitment and training 
of stock assessment biologists and supporting staff to produce annual 
stock assessments that meet the new standard for Federally managed 
stocks. This request would also add an increment of 260 Fisheries 
vessel/charter days at sea toward the balance of 3,000 days identified 
in the NOAA Fisheries Data Acquisition Plan at a cost of $2.4 million. 
The initiative includes $0.9 million for advanced sampling 
technologies. This element targets improvements and innovative uses of 
existing technologies, including the application of new and advanced 
sampling systems and approaches. Also, included in this request is $1.5 
million to enhance fisheries oceanography studies, principally, the 
Fisheries and the Environment program (FATE).
    Endangered Species Act Sea Turtle Research.--NOAA requests an 
increase of $2.0 million for a total of $6.5 million to continue the 
recovery of highly endangered sea turtles. Of the $2.0 million 
increase, $1.4 million is to provide the necessary research to recover 
highly endangered marine turtles. This program is designed to help us 
collect information on biology and habitats and share that information 
with other range countries. The remaining $0.6 million is requested to 
implement management strategies to reverse population declines, 
implementation of multi-lateral international agreements, and building 
capacity through domestic and international educational and outreach 
programs.
    Columbia River Biological Opinion (BiOp) Implementation.--NOAA 
requests an increase of $12.0 million to provide for the research, 
monitoring, and evaluation (RM&E) necessary to continue implementation 
of measures included in the Columbia River Biological Opinion. The RM&E 
program will provide the scientific information necessary to assess 
whether BiOp performance measures are being achieved at 2003, 2005, and 
2008 check-ins. This funding also provides for the research needed to 
address key uncertainties identified in the BiOp in the areas of 
estuary and near-shore ocean survival, delayed effects related to dam 
passage, and the effects of hatchery programs on the productivity of 
naturally spawning fish.
    Recovery of Endangered Large Whales.--NOAA requests an increase of 
$1.0 million to provide resources to scientifically determine whether 
two key endangered whales--humpbacks and bowheads--have recovered and 
are candidates for delisting. This information will enable NOAA to 
detect changes in the status of large whales and prevent any long-term 
irreversible damage to these populations.
    Socioeconomics.--NOAA requests an increase of $1.5 million for a 
total of $4.0 million to support the on-going development of a multi-
year comprehensive social sciences program to support NMFS policy 
decisions. The approach is 3-tiered, augmenting the integral components 
of a successful social sciences program that includes staffing ($0.6 
million and 7 FTE); data collection ($0.5 million); and research 
activities ($0.4 million). In combination, the funding will be used to 
continue addressing shortcomings in economic and social assessments of 
policy alternatives by improving the economic and social science staff 
capability, and initiation of data and applied research programs.
    National Observer Program.--NOAA requests an increase of $2.9 
million for a total of $17.0 million for the National Observer Program. 
Funding will be used to expand the collection of high quality fisheries 
and environmental data from commercial and recreational fishing vessels 
to assess impacts on marine resources and fishing communities and to 
monitor compliance with marine resource laws and regulations. This 
request will primarily provide for approximately 4,000 observer sea 
days spread over 11 fisheries, most of which are currently unobserved.
Management: $6.4 Million Increase
    NMFS National Environmental Policy Act (NEPA) Implementation.--NOAA 
requests an increase of $3.0 million for a total of $8.0 million to 
continue striving to enhance its management of the NEPA process. This 
funding will provide NMFS with the necessary resources to continue to 
support agency-wide NEPA activities and will allow NMFS to strengthen 
its decision-making and documentation process to more fully take 
advantage of the decision making tools provided by NEPA.
    Regional Fishery Management Councils.--NOAA requests an increase of 
$1.9 million for a total of $16.0 million for the Regional Fishery 
Management Councils. This request will provide needed resources for the 
Councils to respond to increased workload in developing, implementing, 
and supporting management measures to eliminate overfishing and rebuild 
overfished stocks; identify and protect essential fish habitats; reduce 
fisheries' bycatch to the maximum extent practicable; minimize the 
impacts of fishing regulations on fishing communities; and to implement 
programs that result from the next reauthorization of the Sustainable 
Fisheries Act. These results will be achieved through the development 
of amendments to and creation of new Fishery Management Plans and 
regulations and corresponding and supporting international management 
measures to control fishing activities.
    Statutory and Regulatory Requirements.--NOAA requests an increase 
of $1.5 million to provide for thorough, complete, and timely 
environmental and economic analyses to NOAA customers and for its 
recovery programs. Funds will support personnel in all NMFS regions, 
science centers and headquarters to conduct required data gathering, 
analysis, and document preparation to assess the impacts of human 
activities that affect protected species. These include the range of 
Federal actions, including management of marine fisheries. This funding 
will also support assessments of the environmental and socioeconomic 
impacts, costs and benefits of implementing conservation programs for 
protected species.
Enforcement: $9.7 Million Increase
    Enforcement and Surveillance.--NOAA requests an increase of $4.3 
million for a total of $39.3 million to expand and modernize NMFS' 
fisheries and protected species enforcement programs. These programs 
include Alaska and west coast groundfish enforcement, protected species 
enforcement, state and local partnerships, specialized Magnuson-Stevens 
investigatory functions, community oriented policing and problem 
solving, and swordfish/Patagonian toothfish import investigations.
    Vessel Management System (VMS).--NOAA requests an increase of $5.4 
million for a total of $7.4 million for additional support and 
continued modernization and expansion of the vessel management system 
(VMS) program. These resources will create a program which will monitor 
approximately 1,500 vessels and is readily expandible. VMS technology 
is an invaluable tool for modern fisheries management. It provides 
outstanding compliance without intrusive at-sea boardings, enhances 
safety at sea, and provides new tools to managers for real time catch 
reporting.
                        other key noaa programs
    NOAA is constantly pursuing areas where the expertise of our 
researchers, scientists, and staff can contribute to solving problems. 
Therefore, NOAA has other key programs that respond to these 
challenges. They are Energy, Homeland Security, Ocean Exploration, and 
Coastal Conservation.
                                 energy
    Energy Initiative.--NOAA requests a total of $6.1 million to 
implement a pilot program that will provide more accurate temperature 
and precipitation forecasts, and additional river forecast products to 
help the energy industry improve electrical load forecasting and 
hydropower facility management. Based on industry estimates, this 
investment will result in savings of $10 to $30 million annually in the 
pilot region after the second year of the demonstration. Expanding the 
pilot nation-wide could generate savings of over $1 billion per year.
    Energy Permit Rapid Response.--NOAA requests a total of $2.0 
million to support the establishment and implementation of a 
streamlined energy permit review process. This proposal responds to an 
Executive Order directing Federal agencies to expedite permits and 
coordinate Federal, state, and local actions needed for energy-related 
project approvals on a national basis and in an environmentally sound 
manner. The goal of this request is to reduce, by 25 percent, the time 
required to adjust the permits of licensed energy projects/facilities. 
Currently, re-licensing of existing facilities takes 6-10 years. It is 
anticipated that the combination of regular re-licensing and permit 
adjustments to implement the new National Energy Policy will result in 
thousands of new actions for NOAA nationally.
    Energy Management.--NOAA requests a total of $0.6 million for 
Energy Management. The requested funds will be used to reduce NOAA's 
facility operating costs through actively pursuing energy commodities 
at competitive prices, identifying and implementing energy savings 
opportunities and applying renewable energy technologies and 
sustainable designs at NOAA-managed facilities. Many of the equipment 
retrofits that are a part of energy management have enabled facilities 
to recover their costs in less than five years.
                           homeland security
    On September 11, 2001, the Nation experienced an unprecedented 
attack on the World Trade Center and the Pentagon. NOAA immediately 
implemented its agency-wide Incident Response Plan, and was able to 
rapidly deploy critical assets, capabilities, and expertise to support 
response and recovery efforts. NOAA personnel in weather offices, 
satellite and remote sensing teams, hazardous materials units, marine 
transportation and geodesy offices, and fisheries enforcement teams 
provided a wide range of products and services.
    NOAA's response to the September 11 attacks was rapid and focused. 
However, the attack fundamentally altered the context of NOAA's 
incident response planning. The threats resulting from attacks on the 
nation may be different in nature, and larger in scale and scope. Thus, 
NOAA's Homeland Security efforts are focused on enhancing its response 
capabilities and improving internal safety and preparedness. NOAA is 
working quickly to improve its ability to coordinate emergency 
response, to evaluate its existing capabilities, and to identify 
products and services that will meet the challenge of new response 
realities. NOAA's Homeland Security activities are dedicated to 
advancing the coordinated efforts within the Department of Commerce, 
the Office of Homeland Security and assisting NOAA's many federal, 
state, and local partners.
    In fiscal year 2003, funding is requested to address the most 
immediately recognized areas of programmatic vulnerabilities to ensure 
the continuity of the most critical of NOAA's services and information 
products in the event of natural or man-made emergencies.
    Vessel Lease/Time Charter.--NOAA requests an increase of $9.9 
million for a Vessel Lease/Time Charter. In fiscal year 2003, NOAA will 
continue assisting DOD in mapping and charting key port areas. NOAA 
will initiate a vessel time charter to expand its hydrographic 
surveying capacity. While having the capability to operate throughout 
America's Exclusive Economic Zone (EEZ), initial emphasis during fiscal 
year 2003 will be in the Gulf of Mexico. Ninety-five percent of 
America's non-NAFTA economic trade moves through the marine 
transportation system. Any interruption in the flow of goods through 
our nation's marine transport system yields immediate and dire impact 
to the national economy. Four of the top seven port areas are found on 
the Gulf of Mexico, including: (1) New Orleans and South Louisiana, (2) 
Houston/Galveston, (3) Port Arthur, TX and Lake Charles, LA; and (4) 
Corpus Christi, TX. The combination of high traffic, hazardous cargos 
and vessels operating close to the ocean bottom make waterways and 
ports particularly vulnerable to terrorist activities including those 
utilizing low technology mines. Requested funding provides critical 
survey data to directly enhance safety of mariners, passengers, and the 
national economy from threats both natural or human in origin.
    NESDIS Single Point of Failure.--NOAA requests a total increase of 
$2.8 million to provide backup capability for all critical satellite 
products and services. This effort supports the continuity of critical 
operational satellite products and services during a catastrophic 
outage. In fiscal year 2003, NOAA will begin the first phase of 
hardware, software, and telecommunications purchases; and perform 
initial testing of all capabilities for this backup system. The 
requested funding also supports installing additional communications 
links to connect the backup location to the NOAA Science Center in Camp 
Springs, Maryland.
    Satellite Facilities Security.--NOAA requests a total of $2.3 
million, an increase of $0.3 million, to maintain enhanced security at 
the satellite Command and Data Acquisition ground stations. NOAA 
requires these funds to enhance the systems that protect these 
stations, reducing the risk to satellites and ground systems due to 
breaches in security. These satellite stations represent the backbone 
of the ground systems that support NOAA spacecraft programs-commanding, 
controlling, and acquiring data from on orbit satellites with an 
estimated value of $4.5 billion.
    NWS Gateway Critical Infrastructure Protection.--NOAA requests a 
total of $3.0 million for the National Weather Service 
Telecommunications Gateway Backup (NWSTG). During fiscal year 2003, 
this funding will enable the NWS to complete the establishment of the 
NWSTG facility. After scheduled deployment in early fiscal year 2004, 
the continued funding level of $3.0 million will cover recurring costs 
for NWSTG backup communications, system software licenses, systems 
operations and maintenance support, facility rent, and cyclical 
technology refreshment. This will ensure uninterrupted delivery of 
critical meteorological data necessary for the protection of life and 
property, and the economic well being of the Nation.
    Weather & Climate Supercomputing Backup.--NOAA requests a total of 
$7.2 million to implement an operational backup system for the NWS 
weather and climate supercomputer. The NWS weather and climate 
supercomputer is a critical component of NOAA's mission and is 
currently a single point of failure as the entire system is located in 
a single facility. Many of the data, products and services provided by 
and through the Central Computer System (CCS) directly contribute to 
the issuance of life saving NWS watches and warnings to the public. The 
NWS weather and climate supercomputing backup system is a critical part 
of DOC's Homeland Security Initiative and NOAA's comprehensive business 
continuity plan, designed to support uninterrupted data and product 
delivery to NOAA customers. The National Center for Environmental 
Prediction's (NCEP) CCS is currently the only computer system within 
NOAA capable of running highly complicated forecasting models in the 
required operational (regimented) mode. During fiscal year 2003 the NWS 
will acquire the necessary backup system hardware capability, conduct 
site selection, and begin installation.
    Commercial Remote Sensing Licensing.--NOAA requests a total of $1.2 
million for the Commercial Remote Sensing Licensing and Enforcement 
Program to ensure the timely review and processing of satellite license 
applications. This NOAA investment will support staff engaged in the 
review of commercial remote sensing licensing applications. NOAA will 
also support monitoring and compliance activities, which include the 
review of licensee quarterly reports, on-site inspections, audits, and 
license violation enforcement. The funds requested in fiscal year 2003 
will also support implementation of shutter control over commercial 
systems to ensure that our Nation can respond to commercial remote 
sensing security issues in national security and foreign policy crisis 
situations.
                       ocean and coastal programs
    NOAA requests a total of $14.2 million for Ocean Exploration, this 
includes a small amount for adjustments-to-base. This program seeks to 
increase our national understanding of ocean systems and processes 
through partnerships in nine major voyages of discovery in fiscal year 
2003. Ocean Exploration is investment in undersea exploration, 
research, and technology in both the deep ocean and areas of special 
concern, such as the U.S. Exclusive Economic Zone (EEZ), and National 
Marine Sanctuaries (NMS).
    NOAA's coastal conservation activities total $348.5 million, and 
are central to accomplishing the mission of environmental monitoring, 
and underscore a commitment to coastal, estuarine, and marine 
ecosystems. NOAA's activities include Coastal Zone Management; Marine 
Sanctuaries, Estuarine Research Reserves, and Marine Protected Areas; 
Coral Reefs, Habitat, and Other Coastal Conservation & Restoration 
Programs; and Pacific Salmon recovery Fund and Treaty. Many of these 
programs receive adjustments-to-base, and there is an increase for 
Cooperative Conservation and Recovery with States. NOAA requests a 
total of $1.0 million for Cooperative Conservation and Recovery with 
States to provide funds to state partners under the Endangered Species 
Act Section 6 cooperative conservation program. These agreements will 
provide the means for states and local communities to undertake local 
initiatives in the management and recovery of ESA-listed and candidate 
species by providing the legal authority to make the decisions about 
how best to protect species at risk of extinction. The agreements would 
provide funding on a matching basis to accomplish conservation 
activities. Funding provided to the states would support local 
researchers, non-governmental organizations and volunteers to 
accomplish monitoring, restoration, science and conservation 
activities.
                      financial management in noaa
    NOAA will continue to improve its core financial management 
responsibilities in order to meet the future needs of NOAA and its 
stakeholders. NOAA has placed a high priority on the proper execution 
and accounting of its resources. Key budgetary and financial management 
improvements are centered around three key areas: (1) Improved Funds 
Control and Execution through Automation; (2) Improved Budget 
Structure; and (3) Improved Outreach and Communications.
Improved Funds Control and Execution through Automation
    Included in the fiscal year 2003 request is $16.1 million for 
NOAA's share of the Commerce Administrative Management System (CAMS). 
CAMS will contribute to improved financial management in a number of 
significant ways, primarily by accounting for NOAA's expenditures and 
maintaining NOAA's clean audit opinion. While NOAA has made significant 
efforts to retain its clean audit opinion for a third consecutive year, 
it has done so with inefficient manual, error-prone business processes 
that are labor-intensive. Without significant amounts of overtime and 
creative manual resource tracking, NOAA's accounting details would be 
non-existent. CAMS will provide financial managers with on-line, real-
time, and accurate financial information and will enable NOAA and DOC 
to meet statutory obligations under the Federal Managers' Financial 
Integrity Act (FMFIA) and the Chief Financial Officers Act (CFO Act).
Improved Budget Structure
    In the fiscal year 2003 budget, legislation is requested to 
establish a Business Management Fund (BMF) for corporate centralized 
services in NOAA. For decades, NOAA has managed its centralized 
services through a funding mechanism supported in its current financial 
management system, FIMA, known as indirect costs. The process by which 
funds were collected and distributed to support centralized services 
was convoluted at best, and fraught with inconsistencies. Three years 
ago, NOAA began a comprehensive effort to review its corporate funding 
methodologies and work toward moving its headquarters management fund 
into a business-like environment. A number of improvements have been 
realized already, including stability in corporate charges for three 
years in a row, returning unspent corporate costs, and reporting to 
customers the status of funds mid-year and at year-end. However, to 
complete this effort of truly realizing a business fund operation, NOAA 
requires legislation. No current legislation exists for NOAA to operate 
this fund, particularly after FIMA is replaced by CAMS. Once 
legislation is secured, NOAA will begin to develop budgetary 
documentation with the same rigor and reporting as required with 
appropriated funds. Already underway, in support of this effort is 
NOAA's initiative to implement Activity Based Costing (ABC) across all 
of the Office of Finance and Administration's key business lines. ABC 
studies are being completed to compute costs for services such as human 
resources, grants, and eventually all other support services. The end 
result of these studies will be the ability to charge customers a fee 
for services, based on actual and estimated usage, and by the specific 
services required. This will replace the flat rate, off-the-top 
methodology employed today and will allow charges to be tailored to 
line offices' specific requirements. NOAA is committed to bringing its 
corporate services up to 21st century standards, and the flexibility of 
a business management fund is a cornerstone of our plan.
    Over the past several years, NOAA has been working to respond to 
Congressional concerns regarding its budget structure. NOAA, in 
conjunction with both Congressional and Administration assistance, 
recently restructured the budget during the fiscal year 2002 
Appropriations process. However, this effort is just a beginning, and 
NOAA will continue to work with Congress to ensure that our budget is 
adapted to Congressional reporting needs and concerns. For example, in 
the fiscal year 2003 budget, NOAA has added additional specialty tables 
that will allow Congress to track budgetary initiatives that cross 
multiple programs and/or NOAA Line Offices, and NOAA has enhanced its 
base narratives to be more descriptive. Also, in support of flexible 
budgetary reporting, NOAA is developing a budget database that moves 
its tracking tables from the current lotus driven environment to a 
database environment. This will allow for more accurate tracking, 
quicker response to inquires, and allow for greater flexibility in 
preparing budgetary charts in response to Congressional and 
Administrative inquires. In conjunction with OMB, NOAA has developed a 
simplified tracking table that clearly indicates NOAA's primary mission 
areas.
    Finally, NOAA began an effort to conduct a position and FTE 
management review. This effort began in fiscal year 2002 and was 
adopted during the fiscal year 2002 appropriations process. The fiscal 
year 2002 efforts focused developing an accurate baseline of FTEs based 
on actual usage. The baseline was completed and has been implemented. 
In fiscal year 2003, NOAA's efforts will focus on ensuring that the 
positions associated with this new baseline are aligned properly with 
program requirements.
                               sea grant
    I would also like to explain the Administration's proposal to 
transfer funding for the Sea Grant College Program to the National 
Science Foundation (NSF). The Sea Grant program plays an important role 
in marine and coastal research and is a cost-effective way to address 
new problems in marine research management. Under the Administration's 
proposal, the current Sea Grant structure would be replaced with a 
university-based coastal and ocean program modeled after the NSF 
centers, with input from researchers, educators and practitioners, 
through workshops. NSF will retain the Sea Grant College designation 
for qualified centers. The program will be open to all public and 
private institutions of higher education through a fully competitive 
process. NSF also has a lower matching requirement, so state and local 
funds will be freed up to address outreach and extension needs of local 
communities. NOAA will have a strong role in setting research 
objectives for the program. To ensure the program transfer does not 
adversely affect current awardees, NSF will transfer funds to NOAA to 
support the current award commitments through the duration of their 
grant period.
    Several studies of the Sea Grant Program have noted its 
effectiveness, as well as its problems. In 1994, the National Research 
Council (NRC) found that NOAA's Sea Grant Program has played a 
significant role in U.S. marine science, education, and outreach. The 
review's recommendations included better defining the roles of the 
National Sea Grant Office, the Sea Grant College programs, and the Sea 
Grant Review Panel, and streamlining the proposal review and program 
evaluation processes. Many of the recommendations of the NRC report 
have been adopted by the program and were also incorporated in the 1998 
Amendments to the National Sea Grant College Program Act. In a November 
2000 study, entitled ``A Mandate to Engage Coastal Users,'' a committee 
led by Dr. John Byrne of Oregon State University and the Kellogg 
Commission indicated Sea Grant has been effective in facilitating the 
Nation's sustainable development of coastal resources by helping 
citizens make better informed and wiser decisions. Twenty-two of the 30 
state Sea Grant Programs have undergone performance evaluations by 
teams of outside reviewers and Sea Grant peers. Sixteen were graded 
``excellent'' in achieving significant results. A program was graded 
``excellent'' if it produced significant results, connected Sea Grant 
with users, and was not found to need improvement in areas such as 
long-range planning and management. Sea Grant's 1999 Hammer Award-
winning program in seafood safety training and the national marina 
management effort are examples of other successful national programs. 
Through the years, a number of successful partnerships have been 
established between NOAA and the National Science Foundation (NSF), 
such as the Teacher-at-Sea Program, our partnerships with NSF on the 
U.S. Global Change Research Program and the U.S. Weather Research 
Program, as well as the Study of Environmental Arctic Change (SEARCH) 
program. And, NSF supports some applied research programs, such as the 
Small Business Innovation Research and Technology Transfer programs.
                               conclusion
    NOAA's fiscal year 2003 Budget request invests in people, climate, 
energy, homeland security, infrastructure, and high priority research, 
science, and services. This budget maintains NOAA on its course to 
realize its full potential as this nation's premier environmental 
science agency. NOAA is also doing its part to exercise fiscal 
responsibility as stewards of the Nation's trust as well as America's 
coastal and ocean resources. And, in the same way that NOAA is 
responsible for assessing the Nation's climate, we are responsible for 
assessing and improving our management capabilities. NOAA will continue 
to respond to key customers and stakeholders, and will continue to 
leverage its programs and investments by developing those associations 
that most efficiently and economically leverage resources and talent, 
and that most effectively provide the means for successfully meeting 
mission requirements. Thank you for the opportunity to present NOAA's 
fiscal year 2003 budget.

             OPENING STATEMENT BY VICE ADMIRAL LAUTENBACHER

    Admiral Lautenbacher. Thank you, Senator Hollings. It is a 
great pleasure and privilege to be here with you this morning. 
I appreciate the opportunity to answer questions and to support 
our budget request for fiscal year 2003. If I could just take 2 
or 3 minutes to summarize the highlights, I will be very brief, 
sir.
    I want to thank the committee for their support of NOAA 
over the years. This support has been very important to our 
country and to our organization and we appreciate that and we 
look forward to working with you during this budget cycle as we 
have in previous years.
    The budget this year is a total of $3.3 billion that we are 
requesting. This is roughly level with last year's request. It 
is a budget that maintains the services and critical products 
and support that NOAA provides for our country. There are 
several high-priority items that I would like to emphasize.
    First of all, it is our emphasis and request for people. We 
are asking for the funds to ensure that pay raises and 
maintenance of our corps of scientists and experts in all 
areas, from weather to fisheries management to ecosystem 
development, that that base of people be maintained in their 
current condition. We believe that that is very important for 
the country and our organization. That is our number one 
priority, sir.
    We also have a number of small initiatives in this budget 
which I think are very important to us, small in a sense in 
terms of the larger budget picture, but I wanted to mention 
several of them. It is the continuation and the development of 
our NPOESS satellite system. This is a joint program with the 
Department of Defense. It is on track and on schedule. There is 
an extra $63 million in that line, in our satellite line, which 
allows for the normal development of this program. The NPOESS 
satellite will replace our polar orbiting satellite system 
starting in 2008.
    We have also requested funds for a second fisheries 
research and survey vessel. Recapitalization of our survey 
fleet, in fact, our entire fleet, is a very important issue. We 
believe this is deserving of your support, sir.
    We also have money in there for increasing our fisheries 
surveys, to improve our management of sustainable fisheries. We 
believe that increase is important to maintain our knowledge, 
increase our knowledge, and for prudent management of our 
fisheries.
    We also have an increase of about $9 million for 
enforcement issues regarding fisheries. We think that moving to 
technology innovations like vessel monitoring system on our 
vessels will provide high-tech solutions and will help our 
observer problem. This will ensure fair enforcement across the 
board and will go a long way toward improving our management.
    We have also taken steps to improve our internal management 
of NOAA budgets. We are asking for a business management fund 
authority this year which will allow us to use activity-based 
costing, be much more aware and cognizant of the types of 
internal costs it takes for providing central services, such as 
HR and human resource management and budget management.
    We also have organized our budget in accordance with 
directives of Congress, hopefully to make it easier for 
everybody to understand and to help us as we deliberate for the 
future.
    Again, thank you very much to all the members of this 
committee for their support and help for our great organization 
and I look forward to answering your questions, sir. Thank you.
    Senator Hollings. Admiral, we appreciate it very much and 
we are all working for the good of the order.
    Just one observation, that somehow, somewhere, sometime, 
this administration might sober up and settle down. For one, 
they seem to act like the administration is not the execution 
of the laws and policies of the Congress, but what they think 
ought to be done. Wonderful. We have had many administrations 
come up and request of us, why do we not change this, do this, 
do that, and everything else of that kind. And we do it, three 
readings in the House, three in the Senate.
    Now, we just had the Attorney General testify. He came with 
a wild idea to take COPS on the beat, law enforcement at the 
local level, which has got a stellar record now for the past 10 
years, since we put in this community policing, and send it 
over to FEMA where they do not know anything about law 
enforcement and are not supposed to know anything about law 
enforcement.
    You read in the morning paper where they want to take 
Customs, which is working good, and put it over in the Border 
Patrol and INS and Justice told me it would be vice-versa. 
There is no reason to jumble it up. Border Patrol is working. 
Customs is working. Parts of the INS are working. It is just 
you have got to get somebody in there to tell the congressional 
callers to bug off. What happens is where you have got local 
enforcement with respect to the immigration, a Congressman will 
call and tell the head of the INS that their agents are out of 
hand and everything else because they are enforcing the law 
that Congress passed. Let us get with the program and 
understand what has been happening. These industries are flying 
in from Guatemala and elsewhere illegals to do the work, and so 
when we go to enforce it.

                 TRANSFER OF SEA GRANT COLLEGE PROGRAM

    Now, we start with your Department. Out of the blue, to the 
National Science Foundation gets the sea grant program. Nobody 
heard about it. I have been here for a few years, since its 
initiation in the very beginning of NOAA. If you move sea 
grant, you lose your State extension programs, you lose your 
student educational programs at the universities and everything 
else of that kind, just send it over to the National Science 
Foundation. Was that your suggestion?
    Admiral Lautenbacher. No, sir. This occurred before I came 
into my current position.
    Senator Hollings. Did you----
    Admiral Lautenbacher. I am a strong supporter of the sea 
grant program and I believe the administration wants to see the 
sea grant program continue, as well, sir.
    Senator Hollings. But where do they want it, because they 
have eliminated the $62 million for the sea grant program. That 
is why I am asking the question.
    Admiral Lautenbacher. Yes, sir. There are a number of pros 
and cons on the management of the sea grant program. The 
administration looked at it this year and looked at the heavy 
component that it has in common with research management and 
felt that our four-star research organization, NSF, could do a 
better job in terms of managing the bulk of that program. That 
is one pro which was looked upon as a very positive effort for 
this program. The decision was made, along with several other 
programs that had significant research components, to move them 
into NSF. It was part of a larger package, Senator.
    Senator Hollings. Well, I understand that is about as good 
of an answer as you can give, but the ocean exploration 
initiative by our ranking member and myself, has now been 
recognized by the administration. The only trouble is, it is 
unfunded at the level of $14 million. You have got space at $14 
billion. The ocean is seven-tenths of the Earth's surface, 95 
percent unexplored, and $14 million. That will handle one 
research project in one part of this seven-tenths of the 
Earth's surface. So let us see if we cannot do even better on 
that.

                      NMFS LITIGATION CASE BACKLOG

    On the other hand, let us look more particularly at your 
fisheries. We had, long before your coming, some cases and we 
noticed in the middle of the 1990s we only had 15 cases, but 
then it got up to 100, and we put some money into it and now 
they have got 150 active cases there in the fisheries. The 
National Marine Fisheries is asking for an additional 115 
positions, but none of it going to the litigation problems. 
Why?
    Admiral Lautenbacher. We have about $3 million for 
improvements in the NEPA process and another $1.5 million in 
regulatory increases. Our NEPA program is essentially handled 
by all of the various parts of the NMFS organization that deal 
with these types of cases.
    We are putting more resources into it. I am also conducting 
an internal review of all of NOAA management processes right 
now. I am hoping that at the end of this, that we will find 
better ways of managing our business. I am not a fan of having 
all of these court cases, as you know, sir, and I am looking 
for ways to improve that, as well.
    We do have a modest down payment for improvements in our 
NEPA process in this budget and I look forward to doing more in 
the future.
    Senator Hollings. Admiral, the year before last, a 
fisheries case held up the entire Government. We could not 
finalize our budget. We could not finalize and adjourn for 
Christmas until that fishery case was disposed of, and the 
distinguished member of the panel up here is more familiar with 
it than myself, but these fisheries cases, let us get on top of 
them and get them out of the way.
    Admiral Lautenbacher. Yes, sir.
    Senator Hollings. Senator Gregg.
    Senator Gregg. Thank you, Mr. Chairman.

                   NATIONAL SEA GRANT COLLEGE PROGRAM

    I want to associate myself with your concerns about the sea 
grant program. It is my view that NOAA is the proper agency to 
continue to manage the sea grant program. NOAA is the leading 
oceanographic research entity, it is the most advanced agency 
in the world as far as ocean issues are concerned, and although 
sea grant is theoretically basic research, NOAA does a great 
deal of basic research as well as applied research and it makes 
no sense at all to move it over to NSF. I would hope that the 
chairman would accept an amendment from myself, or maybe the 
chairman or the ranking member of the full committee, which 
would make it clear that sea grant is a NOAA operation when we 
get to markup.

                   FISHING RESTRICTIONS IN NORTHEAST

    On another issue, the fish issue, in New England, we have a 
very serious situation. We just had a ruling by a Federal judge 
here in Washington which potentially not only shuts down our 
fisheries for commercial fishermen, but ironically shuts it 
down for pleasure fishermen and charter boats, which makes 
virtually no sense at all. We recognize the fish stock is a 
huge question and a huge problem for us on the Grand Banks and 
in the Gulf of Maine, and I am sure my friend from Rhode Island 
appreciates this problem as much as I do, but this appears to 
be an overreaching, especially when it applies to private 
fishing that is of a recreational nature and to charter boats, 
which are popular things for people to do with their kids and 
for school groups to take, to go out and learn about the ocean, 
if nothing else.
    So I am interested in getting your thoughts on where this 
is going to go and where we are going to end up.
    Admiral Lautenbacher. Well, we are in a difficult position 
because the courts have taken the case. We are in a position of 
being accused of not doing enough to support the laws of the 
land in sustainable fisheries. We are still working to mediate 
with the parties involved to see if we cannot reach a more 
acceptable solution that balances the needs of both the 
environmental community and economic interests.
    The matter is not finished yet, by a long shot. I 
understand your concerns. I am keeping myself involved with 
this. Bill Hogarth has been personally involved with this 
continuously for the last couple of months now. We will 
continue to work to try to balance these interests. It is a 
very difficult issue. We are not done yet. So I am hoping that 
we can reach a better solution than we have right now.
    Senator Gregg. Are you in active negotiations with 
different parties, including the Conservation Law Foundation in 
Boston, which is the basic energizer of the position that you 
did not go far enough in your original proposals?
    Admiral Lautenbacher. I have not had an update in the last 
couple of days on the negotiations, but we have been in contact 
with them over the past several weeks, let me say that, and I 
will get you a better update and up-to-the-minute accounting 
for that, Senator.
    [The information follows:]

        Status of Negotiations With Conservation Law Foundation

    A number of the parties involved in the New England 
Groundfish case have reached a settlement agreement. Parties 
involved in the agreement are: the Conservation Law Foundation, 
NOAA/NMFS, the State of Maine, the Commonwealth of 
Massachusetts, the State of New Hampshire, the State of Rhode 
Island, the Associated Fisheries of Maine, the City of 
Portland, the City of New Bedford, the Trawlers Survival Fund, 
Paul Parker, Craig Pendleton, the Northwest Atlantic Marine 
Alliance, the Stonington Fisheries Alliance, the Saco Bay 
Alliance, and the Cape Cod Commercial Hook Fishermen's 
Association. The court was notified of this settlement 
agreement on Monday, April 15, 2002. Any parties that have not 
agreed to the settlement had until noon on Friday, April 19, 
2002 to respond to the settlement. NOAA is now waiting to hear 
from the Judge if the settlement agreement is accepted by the 
Court.

    Senator Gregg. Well, it is a huge issue for us in New 
England and how we resolve it is going to have a major impact 
on a lot of families and, really, a lot of fisherman and just 
the character of the region. I do not know if you ever read the 
little book called ``Cod.'' It is worth reading, though. It is 
about how the cod basically founded America.
    That was the theme of the book.
    Senator Hollings. Before Al Gore?
    Senator Gregg. Yes, it is an incredible little book. It may 
overstate the case, but it definitely makes the case that the 
culture of New England is tied to the cod.
    I also want to thank Deputy Administrator Gudes for coming 
to New Hampshire yesterday. I am glad he got out before the 
snowstorm. We appreciate his support and his attention to the 
concerns of our university and to the exciting things that are 
happening up there with NOAA, so thank you very much.
    Senator Hollings. Senator Stevens.
    Senator Stevens. Thank you very much. Good morning, 
Admiral.
    Admiral Lautenbacher. Good morning.

                    ADDRESSING GLOBAL CLIMATE CHANGE

    Senator Stevens. As you know, I have spoken often about the 
changes that are taking place in Alaska because of the impact 
of global climate change. I am not sure I am an advocate of 
global warming because Antarctica is getting colder and the 
Arctic is getting warmer, but in any event, our forests 
definitely are moving further north. Permafrost is melting. We 
have several villages along the Arctic coast that have been 
inundated in the summertime because of high water. In four of 
them, the only means of access or egress is by the air and 
their strips were underwater for about 1 month last summer.
    The National Science Foundation committed $30 million for 
the SEARCH program, it is called the Study of Environmental 
Arctic Change, to study climate change. You have $149 million 
for climate change research. Can you tell me, how does that fit 
in with what the NSF is doing? Are you going to be involved at 
all in the Arctic research to determine what is going on or how 
we can understand what is going on in the Arctic?
    Admiral Lautenbacher. We have put in an increment. I admit 
it is a very small one, but it is an increment for $2.5 million 
to join with NSF in the SEARCH program that you just talked 
about. We also are looking at plans for our ocean observing 
system, to include, obviously, observing posts and sensors that 
would include the Arctic and the Antarctic. The poles are 
obviously bellwethers of what is happening in the atmosphere 
and our whole environment in terms of climate.
    It is very important to me personally to learn more about 
it and to get better observations and better models. I am 
hoping that we will be able to put more effort into this in the 
future, but I think it is recognized within NOAA. We are adding 
money in this year's budget to help with this research.
    Senator Stevens. For $2.5 million, you get about a couple 
of weeks' computer time, Admiral.
    Admiral Lautenbacher. Yes, sir.
    Senator Stevens. I really hope that you can find some way 
to pick up that pace. When I was chairman of the committee, we 
went down to Antarctica to look at the change down there and I 
will never forget walking down into the American station, and 
as I walked down, about 40 feet down a slope, I asked the 
person in charge why they had decided to build the Antarctic 
station under the ice and he said, ``You do not understand. 
This was the surface of the ice when we came here.'' They have 
got a buildup, a tremendous buildup of ice down there. The 
continent may well break up because of the pressure of it, and 
we are losing the ice.
    I do not think $2.5 million will cut it, Admiral. I hope 
that you will find some way to join in a robust study with the 
National Science Foundation to try and tell us if there is any 
indication that that change is brought about by any activity of 
man. If it is not, then we had better get ready for a real 
change in the globe if it proceeds at the rate it is going 
right now.

                           NOAA SOLE SOURCING

    On another subject, last week, I was pleased to see that 
the Commerce Department pulled back a grant, $97,000, approved 
by the Marine Sanctuary Office of NOAA. It was sole-sourced to 
an entity, as a matter of fact, I call it a radical 
environmental entity, to study marine sanctuaries.
    I have two questions for you. How come NOAA is sole-
sourcing money for purposes such as that, and why is it that we 
even need to go outside of Government to get people to study 
the marine sanctuaries? I thought you had an ample number of 
employees that NOAA could have done that job. Can you tell us 
why?
    In addition to that, I might tell you that there is a 
provision in the 1980 Alaska National Interest Lands Act that 
prohibits additional withdrawals in Alaska. That covers the 
oceans as well as the land, because of the battle we had at 
that time. I am sure you know that Glacier Bay has lands that 
the Federal Government claims, notwithstanding the Tidelands 
Act, in the 3-mile limit off our shore. Outside of those areas 
where Congress created such a sanctuary, however, you have no 
authority in the 3-mile limit to create sanctuaries without 
State approval, and yet this contract, as I understand it, was 
to study additional areas off our State, having this 
environmental organization make those studies. Can you tell me 
why?
    Admiral Lautenbacher. Well, first of all, I was unaware 
that this contract was in place, having only been here a couple 
of months. As soon as I found out about it, it was no longer in 
place. I am not a big fan of sole source and I think any sole-
source contracts need to be reviewed at a much higher level 
than this one was reviewed at, so we have taken care of that 
problem.
    Now, why did that happen? I have been informed that the 
folks that were doing this felt that the technical ability of 
the people involved in this organization were of sufficient 
value in terms of being able to mediate and bring people 
together to a table and to discuss issues, they had a success 
which was considered a bellwether in that type of work and they 
were trying to capitalize on it. So it was not done with any, I 
think, negative purposes. But be that as it may, it is not in 
place any longer and we will not do business that way within 
NOAA, sir.
    Senator Stevens. Well, I have a problem with the Government 
contracting with an advocacy group, that is known as an 
advocacy group, to make scientific studies.
    Admiral Lautenbacher. I have trouble with that, too, 
Senator.

                   NATIONAL SEA GRANT COLLEGE PROGRAM

    Senator Stevens. Let me go back to what the chairman and 
Senator Gregg said about sea grant. We are constantly besieged 
in this committee by the administration and others saying that 
we are appropriating monies for items that were not authorized 
by law. NOAA is authorized by law to conduct the sea grant 
program. It is a specific law.
    Could you tell me, did you have any attorneys or your 
general counsel's opinion that you have the authority not to 
ask for money for sea grant? If sea grant is going to get 
money, it should be according to the law that authorized it, 
which makes the sea grant a portion of your agency and of your 
Department. Yet I am told that the request shifts sea grant 
over to NSF. That amounts to a reorganization of the Government 
by budget request.
    Admiral Lautenbacher. The budget request reflects the 
administration's decision to consolidate the national sea grant 
college program and the research programs into the National 
Science Foundation.
    Senator Stevens. We are having too many fights around here 
about prerogatives, but there is one prerogative. That is a law 
that was signed. The distinguished chairman and I helped to 
create the sea grant program and we know where it should be and 
where the money should be requested to go, and yet now it is 
over at NSF. We support NSF entirely, but that was not the 
understanding of who was going to run the sea grant program and 
the law says it is NOAA. I would urge you to go back and ask 
your general counsel about that before we go any further, 
because I think this is going to end up in your Department, 
notwithstanding the budget.
    Admiral Lautenbacher. I understand, Senator. Thank you.
    Senator Stevens. Thank you, Mr. Chairman.
    Senator Hollings. Thank you very much, Senator Stevens.
    Senator Reed.
    Senator Reed. Thank you, Mr. Chairman, and thank you, 
Admiral. Let me, too, underscore what my colleagues have said 
about the proposed transfer of sea grant functions from NOAA to 
NSF. The University of Rhode Island is a major participant in 
the sea grant program and it has been a very effective and a 
very, I think, productive relationship with NOAA and I would 
hate to see that cease, so you can add me to the list.

                       GROUNDFISHING IN NORTHEAST

    Let me also touch upon an issue that Senator Gregg raised 
and that is the issue of groundfishing in the Northeast. The 
National Marine Fisheries Service, as you know, has been 
attempting to balance the demands of restocking groundfish with 
the need to allow fishermen to fish and it is a very difficult 
issue. Now, it is involved in court proceedings. But let me ask 
one aspect of this situation.
    There are proposals to buy out some of the groundfishing 
licenses and operations. The concern I have, and I wonder if 
you might address it, is that that could force fishing activity 
to other species. In Rhode Island, we have been way ahead of 
the curve in going after underutilized species and become 
somewhat successful. So I wonder if you are gauging the impact 
of buying out the groundfish permits, the impact on other 
species. Could you comment, Admiral?
    Admiral Lautenbacher. Yes. We have had a number of attempts 
at the buy-out process over the years. My understanding, after 
looking at the history, is that we have not done very well in 
terms of setting up a program which makes sense. You end up 
taking care of one small piece and then you end up creating 
problems somewhere else.
    Everyone that works for me is aware of that, and as we are 
looking at the potential of how to do this, that will be taken 
into account because we do not want to exacerbate the issue 
with other species or other parts of the New England regional 
or any part of our country, for that matter. So I am well aware 
of it and I will not support any buy-out program that does 
damage or has the potential to do damage in other parts of our 
fisheries.
    Senator Reed. Thank you, Admiral.
    One other issue. When I talk to the fishing operators in 
Rhode Island, and we have an extensive fleet at Galilee and 
other parts of Naragansett Bay, they complain that a lot of 
policy is being made with scanty information, that the type of 
information that is necessary for sound policy of following 
fish populations, projecting fish populations, is not there.

                     NMFS ANNUAL STOCK ASSESSMENTS

    Last year, the administration requested $15 million for the 
National Marine Fisheries Service to expand annual stock 
assessments. I think the need, as I understand it, is close to 
probably $25 million. Your request this year is $12 million. 
The committee has responded in the past, but probably not 
aggressively enough. Can you comment about the resources for 
information gathering, stock assessment, et cetera?
    Admiral Lautenbacher. The resources for stock assessments 
are still inadequate. We have an increase in this year's 
budget, based on the total levels of resources that we had and 
priorities to meet. We added money to this area. I would like 
to improve the validity and the extent of our information on 
fishery stocks. We are not to the levels we need to be. We have 
come a long way, however, and I think some of the data that we 
are taking is really very good, but it needs to be expanded. We 
have a number of stocks that are not covered as well as they 
should be.
    Senator Reed. It strikes me, too, that sometimes the 
litigation problems might result, in some respect, from this 
poor information, that decisions are made and then later easily 
questioned because the intervenors, the petitioners can point 
to poor analysis. That at least gets them past the summary 
judgment.
    So I think your comment would be appreciated, that this 
might in the longer run help you make decisions that are less 
likely to be challenged in court, is that your sense?
    Admiral Lautenbacher. Yes, sir, I believe that. I think 
another big part of our problem is process. We do not follow 
our processes very well in NEPA, which was brought up by 
Senator Hollings. So we have those two issues to deal with, 
yes, sir.
    Senator Reed. Thank you, Admiral. Thank you, Mr. Chairman.
    Senator Hollings. Admiral, two things in thanking you. On 
that climate change initiative, I think, overall, with respect 
to the Government, we appropriate some $4.5 billion. In NOAA, 
you have only $110 million of the $4.5 million, and I am 
looking and finding a majority of that money is over there in 
Energy, and it is just political appointments over there and 
they use it politically. They were into the CAFE standards 
adversely just recently on last week's debate and everything 
else. It is sort of frustrating that you are given the 
responsibility and you are limited in money, and then politics 
holds you so that you cannot develop a good policy in global 
climate change protocols.
    Remember when you get a chance at the higher levels of 
Government mentioning this so that we start straightening that 
out, and otherwise, watch that Kennedy fund.
    Admiral Lautenbacher. Yes, sir.
    Senator Hollings. We only get $4.5 million and one big $5 
million grant was given to a good colleague of ours to get a 
vote with respect to trade promotion authority. Let us bring 
back--you are of high integrity, so let us get some integrity 
back into the Kennedy program.
    Are there any further questions?
    [No response.]
    Senator Hollings. We thank you very, very much for what you 
are doing over there. We are lucky to get you.
    Senator Gregg. Let me just echo that. We are very 
appreciative of your taking this job on. It is a superb agency 
and we look forward to continuing to strongly support it.

                     ADDITIONAL COMMITTEE QUESTIONS

    Admiral Lautenbacher. Senator Hollings, thank you and the 
distinguished members of the committee very much. It has been a 
pleasure to be here today. I look forward to working with you. 
Thank you, gentlemen.
    Senator Hollings. Thank you.
    [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
                  noaa organization and administration
    Question. Admiral, is the National Oceanic and Atmospheric 
Administration (NOAA) organized appropriately to successfully fulfill 
its mission? Do you think NOAA headquarters is organized and staffed 
appropriately to analyze and transfer information up and down the chain 
of command accurately and efficiently? If not, how would you change 
things?
    Answer. As I have only been on board at NOAA for a few months, I 
haven't determined if NOAA is organized appropriately to successfully 
fulfill its mission. As I mentioned during the hearing, I am conducting 
an internal review of all of NOAA management processes. I hope that at 
the end of this review, I will be able to better assess NOAA's 
organizational structure and implement changes if necessary.
    Question. Please provide an organizational chart of NOAA 
headquarters broken out to the lowest level of organization. For each 
box include the office's budget in fiscal year 2002 dollars, and the 
number and description of the various positions (include all positions: 
FTE, detail, contractor, fellow, or otherwise). Additionally, in a 
table format please provide the same information for years fiscal year 
1998 through fiscal year 2003. (Use the President's budget for 2003.)
    Answer. See attached organizational chart and Attachment A for the 
NOAA headquarters breakouts for fiscal years 1998-2003.



 NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION UNDER SECERTARY AND ASSOCIATED OFFICES HISTORICAL FTE, DETAILEES, CONTRACTORS AND BUDGETS, FISCAL YEAR
                                                                        1998-2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Fiscal Year 1998 Actual         Fiscal Year 1999 Actual         Fiscal Year 2000 Actual
                                                         -----------------------------------------------------------------------------------------------
                                                           FTE   Detail   Cont   Dollars   FTE   Detail   Cont   Dollars   FTE   Detail   Cont   Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undersecertary's Office.................................     13  ......  .....     3,265     14  ......  .....     3,439     10  ......  .....     2,381
Dep. Undersecertary's Office............................      5       6  .....       294      5       6  .....       255      7       6  .....       418
Chief Scientist.........................................      4  ......  .....     1,197      4  ......  .....     1,092      4       1  .....       722
Public & Constitutient Affairs..........................     37  ......  .....     3,897     37  ......  .....     3,575     35       6  .....     4,530
Policy & Strategic Planning.............................     10  ......  .....     1,004     16  ......  .....     1,018     10       5  .....     1,008
Sustainable Dev. & Intergov. Affairs....................      9  ......  .....     1,368     10  ......  .....     1,574     11  ......  .....     1,472
Legislative Afairs......................................     20  ......  .....     1,561     21  ......  .....     1,649     21  ......  .....     1,724
International Affairs...................................      8  ......  .....       906      9  ......  .....       752      8  ......  .....       856
General Counsel.........................................    103  ......  .....     7,625    110  ......  .....     7,765    110  ......  .....     8,555
Federal Coordinator for Meteorology.....................  .....  ......  .....  ........     13  ......  .....  ........     10  ......  .....  ........
Military Affairs........................................  .....  ......  .....  ........  .....  ......  .....  ........  .....  ......  .....  ........
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................    209       6  .....    21,117    239       6  .....    21,119    226      18  .....    21,666
--------------------------------------------------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Fiscal Year 2001 Actual        Fiscal Year 2002 Enacted      Fiscal Year 2003 President's
                                                         ----------------------------------------------------------------             Budget
                                                                                                                         -------------------------------
                                                           FTE   Detail   Cont   Dollars   FTE   Detail   Cont   Dollars   FTE   Detail   Cont   Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undersecertary's Office.................................     12  ......  .....     2,392     13  ......  .....     2,349     13  ......  .....     3,076
Dep. Undersecertary's Office............................      8       8      1       750      4       6      1       569      4       6  .....       703
Chief Scientist.........................................      4  ......  .....       578      5  ......      2       500      5  ......      2       639
Public & Constitutient Affairs..........................     36       5  .....     3,560     36  ......      3     3,570     36  ......      3     4,209
Policy & Strategic Planning.............................     10  ......  .....       916     10       3  .....       913     10       3  .....     1,080
Sustainable Dev. & Intergov. Affairs....................     10  ......  .....     1,031     11  ......  .....     1,074     11  ......  .....     1,328
Legislative Afairs......................................     21  ......  .....     1,711     21       1  .....     1,707     21       1  .....     1,875
International Affairs...................................      9  ......  .....       718     10  ......  .....       761     10  ......  .....       846
General Counsel.........................................    110  ......  .....     9,275    112  ......      3     9,547    112  ......      3    10,734
Federal Coordinator for Meteorology.....................     11  ......  .....  ........     10       2      2       833     10       2      2       902
Military Affairs........................................  .....  ......  .....  ........  .....  ......  .....  ........  .....  ......  .....  ........
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................    231      13      1    20,931    232      12     11    21,823    232      12     10    25,392
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: NOAA doesn't maintain historical records of contract employees as they are hired on an as needed basis.

                         noaa energy initiative
    Question. In your House Hearing, you claimed that the energy 
initiative in the Northeast was ``not logical''. Please explain. 
Additionally, please explain why it makes sense to initiate a pilot 
program in one region and terminate that program before it is taken 
operational, in order to initiate a similar operational program in 
another region. Have the two energy programs initiated in fiscal year 
2002 been well-received by the community? Are these programs 
successful? What level of funding would be required to take the two 
energy programs in the northeast operational? Which NOAA programs would 
be most appropriate to receive these funds to make these programs 
operational?
    Answer. NOAA responds to the energy needs of society by pursuing 
research, development and implementation of programs that will lead to 
better weather and climate forecasts, safer and more efficient energy 
transportation and expedite energy permitting. The Northeast pilot 
program begun in fiscal year 2002 was a research program designed to 
evaluate the potential use of air quality and improved temperature 
forecasts to increase the efficiency of energy, production, 
dispatching, and distribution. The funding will support research and 
development of an innovative temperature and air quality forecast 
systems during fiscal year 2002. An external economic evaluation of the 
program will produce a final report in fiscal year 2003, and will be 
the basis for further studies of the use of environmental information 
in the energy sector in the Northeast.
    The Energy Security Program requested in fiscal year 2003 is an 
operational program that will be used to improve the accuracy and 
reliability of forecast models of hydrology (e.g., precipitation and 
water flow), weather and climate conditions. Improvements in the 
forecast models will be used to increase the efficiency of energy 
production, dispatching and distribution. The focus of this program is 
the Southeastern United States where unlike the Northeast, there is 
greater reliance on hydropower and an opportunity to test and evaluate 
potential improvements in river flow forecasts that will improve the 
efficiency of water management and hydropower generation. Air Quality 
forecasting studies will not be conducted in this program. The 
preliminary results of the fiscal year 2002 pilot program will help 
determine the appropriate implementation of the observing network in 
the Southeast.
    Additionally, the southeast was identified through NOAA's internal 
process as the target region. The decision was based on both need and 
opportunity as expressed by industry stakeholders nationwide who were 
consulted in the development of the pilot program. The information 
gained from conducting the fiscal year 2002 pilot program will benefit 
the fiscal year 2003 program and is applicable to all regions of the 
country. The long-term goal is to expand the program nationwide.
    The programs for fiscal year 2002 have been well-received by the 
research community. However, it is too early to determine the level of 
success of the programs because the operating plan was finalized 
recently and research has just begun.
    An evaluation of the funding levels required to take the fiscal 
year 2002 pilot program operational has not been completed. The results 
of this evaluation will help us determine the scope of future costs 
required to make the pilot operational and to expand the program beyond 
the pilot region. NOAA's Energy Security Program is a collaborative 
effort between Office of Atmospheric Research (OAR) and National 
Weather Service (NWS). This program is coordinated by OAR, and NOAA's 
fiscal year 2003 President's Budget requests funding in the amount of 
$6.1 million in fiscal year 2003 for OAR to coordinate this program.
                     new england groundfish lawsuit
    Question. As you know, a lawsuit filed by the Conservation Law 
Foundation and others found that the Department of Commerce and the 
National Oceanic and Atmospheric Administration violated federal laws 
when they failed to prevent overfishing and bycatch in the New England 
groundfish fisheries. The U.S. District Court is currently reviewing 
options for a remedy. Did you include an analysis of the social and 
economic consequences of the remedy you provided to the court? Why or 
why not? Is it true that if your proposed remedy is accepted, the 
average income of New Hampshire's fisherman could be cut by almost 45 
percent? If your remedy or a more aggressive remedy is ordered by the 
court, what will you do to ensure that the fishing industry remains a 
vital industry in New Hampshire?
    Answer. On March 1, 2002, the National Marine Fisheries Service 
(NMFS) proposed to the Court, on behalf of the Secretary, to bring the 
Northeast Multispecies Fishery Management Plan (FMP) into full 
compliance with the Sustainable Fisheries Act, the Magnuson-Stevens 
Fishery Conservation and Management Act (Magnuson-Stevens Act) and all 
other applicable law as quickly as possible by way of three separate 
actions: a Secretarial interim action under authority of section 305(c) 
of the Magnuson-Stevens Act, to be implemented by May 1, 2002, which 
would be effective for 180 days; a Secretarial amendment to the FMP, 
under authority of section 304(e) of the Magnuson-Stevens Act, to be 
implemented before the Secretarial interim action expires in October 
2002; and Amendment 13 to the Northeast Multispecies FMP, to be 
completed by NMFS and the New England Fishery Management Council and 
implemented by August 2003.
    The Secretarial interim action, the first part of this approach, 
will put in place important measures to reduce overfishing on major 
groundfish stocks in the Northeast, particularly for Gulf of Maine 
(GOM) cod, and will monitor and assess bycatch. NMFS has prepared an 
Environmental Assessment for this action, as required by the National 
Environmental Policy Act (NEPA), which analyzes the expected 
biological, social, and economic impacts of a range of alternatives. 
The remedy proposed to the Court on March 1, 2002, did not contain the 
analysis in the Environmental Assessment, because the Environmental 
Assessment was still under revision. A summary of the economic and 
social impacts of the interim action was provided to the Court in a 
Declaration by Pat Kurkul filed on April 1, 2002.
    The analysis indicates that for the preferred alternative, the 
relative distribution of impacts is greatest for New Hampshire vessels, 
with 50 percent of all New Hampshire vessels having an estimated loss 
in gross fishing income of 21.4 percent or greater. One-quarter of all 
New Hampshire vessels would lose at least one-third of vessel income, 
and 10 percent of vessels would lose 43.6 percent of their May-October 
fishing income. The estimated adverse impacts on Maine and 
Massachusetts vessels were comparatively lower than they were for New 
Hampshire vessels, but they are significant just the same, especially 
considering the fact that there are twice as many Maine vessels than 
New Hampshire vessels, and Massachusetts vessels outnumber New 
Hampshire vessels by more than 8:1. Thus, while New Hampshire vessels 
fare relatively worse than Maine and Massachusetts vessels, the overall 
impact on the state of New Hampshire is likely to be less than that on 
Maine and Massachusetts. Across all of these states, 84 vessels will 
have an estimated loss in May-October income of at least 30 percent or 
greater. Under the Non-Preferred Alternative, which relies on expanded 
area closures in the GOM to achieve the necessary mortality objectives 
for GOM cod, New Hampshire vessels would be more adversely affected at 
all percentiles (except the 90th) than they would be under the 
Preferred Alternative.
    Depending on what the Court orders for May 1, 2002, the Agency 
will, provided the Court allows, develop and analyze a range of 
alternatives, as has been done for the interim action, to determine 
what alternative meets the goals and objectives of the Court Order and 
that has the least social and economic impacts to the fishing industry. 
Given the outcome of this lawsuit, it is likely that the adverse short-
term impacts will be felt broadly across the Northeast and across all 
industry sectors. We will do everything possible to spread the impacts 
fairly and to ensure that the benefits that accrue from rebuilt stocks 
will also be shared equitably.
    Question. The National Oceanic and Atmospheric Administration 
submitted the agency's proposed remedy for the New England groundfish 
violations to the court in early March. Weeks later, the agency 
announced new scientific findings regarding the fisheries in question. 
Why didn't the agency conclude its scientific investigation and 
announce its findings prior to the submission of their remedy to the 
court? Will these new scientific conclusions undermine the credibility 
of the agency's proposed remedy? Does the public announcement of these 
new findings on the day all comments are due to the court, undermine 
the ability of the intervening parties to consider the best available 
science when submitting their comments to the court?
    Answer. The reevaluation of the biological reference points 
(biomass at maximum sustainable yield (Bmsy), fishing mortality at 
maximum sustainable yield (Fmsy)) for all of the groundfish stocks 
regulated under Amendment 9 was deemed necessary to provide information 
to the New England Fishery Management Council (Council) for preparation 
of Amendment 13 to the Fishery Management Plan. It was based on a 
reevaluation of biological reference points for the GOM cod stock, 
completed in the spring and summer of 2001. In re-evaluating the Bmsy 
and Fmsy values for that stock (33rd Stock Assessment Workshop (SAW), 
September 2001), the peer review scientific panel noted that the 
biological reference points for the GOM cod stock contained in 
Amendment 9 were inappropriately estimated, using incorrect models. The 
33rd SAW proposed new revised values of Bmsy and Fmsy based on models 
deemed to be more scientifically valid. The revised values of Bmsy and 
Fmsy reported by the 33rd SAW for GOM cod are essentially the same as 
those proposed in a final report entitled the ``Working Group on Re-
Evaluation of Biological Reference Points for New England Groundfish'', 
prepared by a scientific working group in which NMFS' scientists met 
with outside scientists on February 12-14, 2002.
    Since many of the stocks regulated under Amendment 9 suffered from 
the use of inappropriately estimated biological reference points 
calculated by the age-aggregated biomass dynamics model, when age-
structured models were more scientifically valid, scientists undertook 
a thorough but expedited reassessment of reference points in order to 
provide the Council with needed information so it could expedite the 
development of Amendment 13. Biological reference points are routinely 
updated in stock assessments of various fisheries, and the Sustainable 
Fisheries Act permits the revised values of Bmsy and Fmsy to be 
substituted, when appropriate, without requiring revised Fishery 
Management Plan amendments.
    Because the revised values of Bmsy and Fmsy reported by the 33rd 
SAW for GOM cod are essentially the same as those proposed in the final 
report on the re-evaluation of biological reference points produced by 
the scientific working group, the interim action and the Secretarial 
amendment, the first and second part of the three-part remedy proposed 
to the Court, incorporate these new scientific findings for GOM cod 
and, thus, propose to implement measures to move rebuilding of this 
stock in the right direction.
    Unfortunately, it was impossible to provide the public with the 
final report of the revised biological reference points for the 
remaining groundfish stocks well in advance of March 1 due to the time-
consuming task of updating this science, developing the final report 
and allowing scientists outside the Northeast region an opportunity to 
review and comment on the report. However, a summary of the report was 
presented to the Council at its March 19-21, 2002, meeting, at which 
the public was present.
                            role of science
    Question. What is the future of science within the National Oceanic 
and Atmospheric Administration? Should the science be consolidated or 
distributed throughout the agency? Currently, the science supporting 
the National Weather Service and the National Environmental Satellite, 
Data and Information Service is based in the Office of Oceanic and 
Atmospheric Research, while the science supporting the National Ocean 
Service and the National Marine Fisheries Service is based within those 
line offices. Does this make sense? What is the rationalization for 
this structure?
    Answer. The current distribution of scientific functions within 
NOAA is based on a series of historical decisions made over many years. 
NOAA is currently conducting a rigorous internal program review to 
determine if NOAA, as currently organized, is best positioned to 
accomplish its missions successfully and efficiently now, and in the 
future. The role and distribution of science activities is an important 
part of this review, and while it is still ongoing, it would be 
premature to speculate on the future direction of science within NOAA. 
Results of this review will be available at the end of May 2002.
                   national sea grant college program
    Question. Why did the Administration transfer Sea Grant to the 
National Science Foundation?
    Answer. This proposal is a result of a review of Federal science 
programs that the Office of Management and Budget (OMB) conducted and 
is consistent with the President's Management Agenda. The transfer is 
part of a wider Administration effort to promote competitive funding of 
scientific research and to capitalize on the demonstrated excellence of 
the NSF and its program management.
    Question. What will happen to the state Sea Grant programs if the 
transfer is allowed?
    Answer. Should the transfer occur, the states will have to 
determine and set their individual priorities and determine how much 
funding to provide to their Sea Grant programs. The Administration is 
not capable of determining whether each state would choose to continue 
funding Sea Grant programs if the transfer occurs.
    Question. Is the National Science Foundation equipped to carry out 
the outreach and extension mission of the Sea Grant program?
    Answer. If the transfer occurs, it would be NSF's decision as to 
how to allocate the $57 million proposed for Sea Grant in the 
President's budget. NOAA and NSF will coordinate in identifying 
research priorities. If the transfer occurs, the NSF program will not 
be designed to support the Sea Grant Marine Advisory Service functions, 
as it is currently operated. However, it will support outreach 
activities for K-12, graduate, and undergraduate education.
    Question. Under what authority is the Department of Commerce 
allowed to transfer the Sea Grant program to the National Science 
Foundation?
    Answer. The Administration has requested the transfer through the 
fiscal year 2003 budget request, and recognizes that Congress must 
approve the transfer for it to occur. The Administrations' position is 
that NSF needs no additional statutory authority to manage a new Marine 
Science Program.
                                 ______
                                 
           Questions Submitted by Senator Ernest F. Hollings
                   noaa's national sea grant program
    Question. The $62 million Sea Grant program is slated for 
termination under NOAA and reconstitution under the National Science 
Foundation. Under the National Science Foundation (NSF), Sea Grant 
would lose its university partnerships and its extension program. Why 
are you proposing to eliminate the successful Sea Grant College 
Program?
    Answer. The proposal is a result of a review of Federal science 
programs that the Administration conducted and is consistent with the 
President's Management Agenda. Under the proposal, the Sea Grant 
program would be administered as an NSF/NOAA partnership. The transfer 
is part of a wider Administration effort to promote competitive funding 
of scientific research and to capitalize on the demonstrated excellence 
of the NSF and its program management.
                             nmfs lawsuits
    Question. Litigation against the National Marine Fisheries Service 
(NMFS) has increased steeply to the point where there are 150 active 
cases this year. To improve NMFS's ability to manage its regulatory 
cases the Committee has provided $42 million in the past two years. 
NMFS has only one person responsible for administering this program. In 
its fiscal year 2003 budget request, NMFS asks for an additional 115 
positions, none of which are to work on the litigation problems.
    Clarification: As of May 3, 2002, the NMFS has 103 open cases--a 
number of those cases are old cases, where the court has ruled but 
still retains jurisdiction, so we keep them on our litigation database 
(they are open cases in the legal sense but not necessarily active 
cases). Also included in the list of 103 are cases where the court has 
ruled, but the time for appeal has not expired.
    What is NOAA doing with the National Environmental Policy Act 
funding that the Committee has provided?
    Answer. Of the fiscal year 2001 and 2002 appropriated NEPA funds 
totaling $42.0 million, approximately $26.0 million were grants. The 
amount for grants included $5.7 million divided among the eight 
Regional Fishery Management Councils. Of the remaining amount, $11.9 
million was provided for in-house research and management activities 
and $4.1 million were contracts. Please see the following table for 
distribution of the $42.0 million.

------------------------------------------------------------------------
 NEPA--Funding by Programs,
    Projects, Activities       In-house  Contracts    Grants     Total
------------------------------------------------------------------------
Alaska--Impact on Ocean
 Climate Shifts--Steller Sea
 Lion:
    Fiscal year 2001........  .........  .........     $6,000     $6,000
    Fiscal year 2002........  .........  .........     $6,000     $6,000
                             -------------------------------------------
      Subtotal..............  .........  .........    $12,000    $12,000
                             ===========================================
Alaska--Predator/Prey
 Relationships--Steller Sea
 Lion:
    Fiscal year 2001........  .........  .........     $2,000     $2,000
    Fiscal year 2002........  .........  .........     $2,000     $2,000
                             -------------------------------------------
      Subtotal..............  .........  .........     $4,000     $4,000
                             ===========================================
Alaska--Steller Sea Lion/
 Pollock Research--N.
 Pacific Council:
    Fiscal year 2001........  .........  .........     $2,000     $2,000
    Fiscal year 2002........  .........  .........     $2,000     $2,000
                             -------------------------------------------
      Subtotal..............  .........  .........     $4,000     $4,000
                             ===========================================
NEPA--NMFS:
    Fiscal year 2001........     $1,809     $1,999     $4,192     $8,000
    Fiscal year 2002........     $3,480  .........     $1,520     $5,000
                             -------------------------------------------
      Subtotal..............     $5,289     $1,999     $5,712    $13,000
                             ===========================================
NEPA--Hawaiian sea turtles:
    Fiscal year 2001........         $0         $0         $0         $0
    Fiscal year 2002........     $2,605       $225       $170     $3,000
                             -------------------------------------------
      Subtotal..............     $2,605       $225       $170     $3,000
                             ===========================================
Hawaii Sea Turtle Research--
 Data Collection:
    Fiscal year 2001........     $2,017       $932        $50     $3,000
    Fiscal year 2002........     $2,018       $933        $50     $3,000
                             -------------------------------------------
      Subtotal..............     $4,035     $1,865       $100     $6,000
                             ===========================================
      Total--NEPA Funding...    $11,929     $4,089    $25,982    $42,000
------------------------------------------------------------------------

    Funding for NMFS-NEPA ($13 million total for fiscal year 2001 and 
fiscal year 2002) to support the following activities:
  --Preparation of priority Environmental Impact Statements (EIS) that 
        were outdated or insufficiently comprehensive, including 
        essential fish habitat concerns. Many of these were the subject 
        of litigation.
  --Data and analytical support for those efforts both in the regional 
        offices and at the Councils to support NEPA compliance.
  --Implement our regulatory streamlining project (regulatory process), 
        an initiative to improve the efficiency and effectiveness of 
        NMFS' regulatory process. Regulatory streamlining plan has 
        multiple components including placing NEPA coordinators in 
        regional offices and HQ, providing support to councils for data 
        and staff for NEPA, development of national training programs, 
        enhancing the use of electronic systems for permitting and rule 
        making.
            Fiscal year 2001--$8.0 million (In-house/contract/grants 
                    \1\)
---------------------------------------------------------------------------
    \1\ $1,120,000 of the $8.0 million was divided among the Regional 
Fishery Management Councils.
---------------------------------------------------------------------------
    Overall, this funding was used to address the following NEPA 
related issues:
  --Environmental Impact Study (EIS) on the groundfish fisheries off 
        Alaska and for programmatic EISs on the crab, scallop, and 
        salmon FMPs inclusive of essential fish habitat (EFH) 
        alternatives.
  --Comprehensive programmatic EIS on west coast groundfish fisheries 
        inclusive of EFH.
    EISs on Fishery Management Plans were:
  --Western Pacific Regional Fishery Management Council (RFMC): 
        pelagic, coral reef ecosystem, bottomfish.
  --Caribbean RFMC: EIS will be written to support an EFH amendment to 
        the FMPs for Spiny Lobster, Coral Reef Resources, Queen Conch, 
        and Reef, to supplement the EISs for the Spiny Lobster and Reef 
        Fish FMPs.
  --Gulf RFMC: EIS will be written to support a generic EFH amendment 
        to the FMPs for Coastal Migratory Pelagics, Coral Reefs, Red 
        Drum, Reef Fish, Spiny Lobster, and Stone Crabs FMPs.
  --South Atlantic RFMC: To supplement the EISs for the Snapper-Grouper 
        and Shrimp FMPs and to write an EIS on Marine Protected Areas.
  --Comprehensive programmatic EISs (inclusive of EFH) in New England 
        for amendment 10 to the scallop FMP and amendment 13 to the 
        multispecies FMP.
  --EIS to address EFH for monkfish, herring, and salmon.
            Fiscal year 2002--$5.0 million (In-house/contract/grants 
                    \2\)
---------------------------------------------------------------------------
    \2\ $1.5 million of the $5 million was divided among the Regional 
Fishery Management Councils.
---------------------------------------------------------------------------
    Of the remaining $3.5 million:
  --$800,000--To begin hiring the fiscal year 2003 full staff of: 6 
        NEPA coordinators (1 HQ, 5 Region); 23 regional support staff 
        for various analyses and document management capabilities in 
        Councils, regional offices and centers; and Paralegal support 
        may also be hired to support regional offices.
  --$30,000 for training in fiscal year 2002.
  --$2.7 million will be spent on the following NEPA related 
        activities:
    --There are 2 EIS for the West Coast groundfish; one EFH and one 
            programmatic EIS. Continue work started in fiscal year 2001 
            on programmatic EIS for west coast groundfish, inclusive of 
            EIS in fiscal year 2002, including contracts for data 
            analysis and science needs.
    --EIS for coral reef FMP was completed and bottomfish almost 
            completed with 2001 funds; crustacean FMP is on hold 
            waiting for information on fishery status. Work with 2002 
            funds will complete bottomfish and update the pelagics EIS 
            for seabirds and begin a new EIS process for a new squid 
            fishery to determine if pelagics plan should be amended to 
            include this fishery, and lastly work on MHLS and South 
            Pacific tuna convention requirements.
    Question. For fiscal year 2003, the National Marine Fisheries 
Service requests 115 new positions. None of these are for paralegals to 
manage case files and enforcement of schedules. Why?
    Answer. After consultation and coordination with NMFS Regional 
Offices on staffing requirements, NMFS is considering hiring paralegals 
to support our litigation activities and will keep the Congress 
informed.
    Question. NMFS does not keep a data base of litigation wins and 
losses and the reasons for the outcomes. It has also failed to report 
progress on management of regulatory issues such as standardized 
formats, assigning paralegals to manage case files and enforcement of 
schedules. In addition, NMFS has not created a regulatory calendar of 
expected regulatory actions. Such a calendar could be available over 
the Internet so that all interested parties could anticipate regulatory 
actions of interest to them. This would also establish a published 
regulatory schedule. Why haven't you implemented such improvements?
    Answer. NOAA General Counsel does maintain a database that tracks 
open and closed cases. However, this database does not enable NMFS to 
respond in a timely way to the numerous queries about litigation. As a 
result, NOAA General Counsel and NMFS have undertaken a joint project 
to develop a searchable database. This searchable database will enable 
agency personnel to access information via the internal website about 
open and closed cases and recent court decisions.
    The Federal government has published the Semi-Annual Unified Agenda 
of Federal Regulatory and De-Regulatory Action (Unified Agenda) and the 
Annual Regulatory Plan. The Regulatory Plan contains the most important 
significant regulatory actions that each agency reasonably expects to 
issue in the current fiscal year or thereafter. The Unified Agenda is 
published twice each year in the Federal Register and contains a 
compilation of the rules planned, in process, and completed for each 
department or agency.
    All NMFS regulatory actions are included in the NOAA portion of the 
Department of Commerce Unified Agenda available on the Internet at: 
http://ciir.cs.umass.edu/ua/info.html. Most rules and regulations are 
also available through the NMFS website.
    Question. There are thirteen layers of review within NOAA of each 
regulatory decision. There is further review in the Department of 
Commerce and OMB. Are you working on streamlining this process?
    Answer. Although the Kammer Report notes thirteen bullets under the 
Rulemaking Process, these represent the different stages in the 
development of a Fishery Management Plan (FMP), not thirteen layers of 
review for a single action. This process is designed to ensure adequate 
opportunity for public participation in the regulatory process. In some 
cases, multiple reviews are noted. However, these reviews are often 
conducted concurrently; they are not necessarily redundant since the 
various offices noted have different functions.
    Under its Regulatory Streamlining Project, NMFS is carefully 
considering such concurrent reviews. We have identified certain cases 
where we can eliminate layers of review without sacrificing the quality 
of the final product.
    To bring about some of these changes, NMFS plans to implement a 
number of measures to ensure the necessary infrastructure is in place 
to support streamlined review processes such as:
  --Update the ``Operational Guidelines for the Fishery Management Plan 
        Process'' to incorporate changes in agency procedure (last 
        revised 5/1/97).
  --Develop an internet-based guide for agency and Council staff 
        containing checklists and examples of required documentation 
        for all actions.
  --Adopt mandatory standards for document contents and format to 
        ensure that decision documents address all pertinent issues and 
        adhere to a basic level of national consistency.
  --Assign regulatory review experts in each region to provide drafting 
        assistance and quality control review for all regulations and 
        associated documents.
  --Conduct appropriate training to ensure that regional experts are 
        fully conversant with Federal Register document requirements, 
        compliance with all legal requirements, etc.
  --Establish a quality assurance protocol to monitor whether agency 
        fishery management decisions are adhering to all applicable 
        requirements.
  --Expand use of the internet to enhance the regulatory process 
        through electronic rulemaking.
                         northern right whales
    Question. There are only 300 Northern right whales left in the 
world and each year several of them are killed by being entangled in 
fishing gear or by being run over by ships.
    Biologists have been able to tag Steller sea lions, bluefin tunas 
and Great White sharks, but NMFS claims that Northern right whales 
cannot be tagged. Is this true? Please explain.
    Answer. North Atlantic right whales can be tagged in a variety of 
ways. There have been numerous short-term (1-2 day) successful 
attachments of time-depth recorders, VHF (very high frequency) radio 
tags, and acoustic (underwater transmitter) tags attached to the 
animals using suction cups. Right whales have also been tagged using 
implantable VHF and satellite-linked radio tags.
    In the last two decades of tagging work involving a number of large 
whale species in many locations, the main problem with transmitter 
technology has been attachment methods inasmuch as the tags (even those 
implanted into the tissue) tend to slough off the animal or migrate out 
as a foreign body would. In this regard, the challenges with attachment 
to a whale are different from those species listed in the question. For 
example, in seals and sea lion transmitter studies, the devices are 
glued to the fur or pelage with little impact.
    Nonetheless, a number of successful transmitter studies have been 
conducted. Fourteen implantable VHF tags were successfully attached to 
right whales by Goodyear in the late 1980s. More recently a right whale 
cow was tagged on January 20, 1999, approximately 30 nmi east of 
Fernandina Beach, Florida. The whale and her calf were tracked 
continuously for 44 hours, when tracking was abandoned due to bad 
weather. The pair was relocated on January 25, 1999 and tracked 
continuously for an additional 96 hours.
    Between 1988 and 1997, 41 satellite tags were attached to right 
whales. All tags were implantable. A reliable tag did not result, as 
most instruments failed within a few weeks of the initial deployment. 
In 2000, NMFS provided funds for Oregon State University researcher Dr. 
Bruce Mate and colleagues to conduct satellite tagging studies of right 
whales in the Bay of Fundy. In summer 2000, Dr. Mate successfully 
tagged 16 whales. The study was generally successful, but not all 
transmitters worked. Transmitters sent signals for up to 130 days with 
one transmitter broadcasting during a migration from the Bay of Fundy 
to the coast of South Carolina. It was believed that the antennae on 
the other tags were rubbed off during whale-to-whale contact or contact 
with the sea floor. As a result of the partial success in 2000, Dr. 
Mate continued his studies in 2001 using southern right whales off of 
South Africa. Deployments there appeared to be more successful, and 
NMFS hopes to continue support for Dr. Mate's work on North Atlantic 
right whales in United States and Canadian waters. As a cautionary 
note, there has been much concern expressed over the physiological and 
medical impacts of implantable tags. In response to this concern, 
particularly since right whales are a highly endangered species, NMFS 
has evaluated the tagged whales. Swellings have been noted at the site 
of tag implantation suggesting the tags were creating serious 
infections which could be compromising the health of the whales. Whales 
tagged by Dr. Mate in 2000 were observed during 2001 with follow-up 
photo-studies to track the progress of the wounds. Swellings were 
noted, but there was no evidence of long-term effects.
                    global climate change initiative
    Question. NOAA has budgeted for an $18 million Climate Change 
Initiative. This is part of the President's $40 million multi-agency 
Climate Change Initiative. The overall Federal Climate Change budget is 
$4.5 billion.
    NOAA's fiscal year 2003 Budget request for Global Climate Change 
research and policy is $114 million. What is NOAA's role in the $4.5 
billion federal Global Climate Change research and policy program?
    Answer. NOAA has participated in the government-wide U.S. Global 
Change Research Program (USGCRP) and funds climate research on all the 
elements of the program. These focus areas are: atmospheric 
composition, changes in ecosystems, global carbon cycle, human 
dimensions, climate variability and change, and the global water cycle. 
In support of its mission of environmental monitoring and prediction, 
NOAA plays a lead role in the government in maintaining observing 
systems, providing operational forecast products, and maintaining 
environmental data bases and data distribution systems.
    Question. The budget request proposes a $700 million increase for 
global climate change funding, yet NOAA is asking only for an $18 
million increase. Why isn't NOAA playing a larger role in the global 
climate change arena?
    Answer. Of the approximately $700 million increase in climate 
change funding, $555 million is related to tax incentives for clean 
energy technologies like renewable energy, hybrid and fuel cell 
vehicles, and the conversion of landfill gas to fuel. Increases in 
climate change science, international climate change assistance, and 
certain climate-related energy programs account for the remainder of 
the $700 million increase.
    NOAA is a major participant in the Climate Change Research 
Initiative (CCRI), which was developed through an interagency process. 
The total fiscal year 2003 request in the President's budget for CCRI 
is $40 million. NOAA's request is $18 million, which is 45 percent of 
the government-wide CCRI increase request. The total request breaks 
down according to the following:
    Reduce uncertainties in climate science:
  --Develop reliable representation of the global and regional climatic 
        forcing by atmospheric aerosols: $4 million (NOAA: $2 million, 
        NASA: $1 million, and NSF: $1 million)
  --Inventory carbon and model sources and sinks: $15 million (NSF: $9 
        million, NOAA: $2 million, DOE: $3 million, and USDA: $1 
        million)
  --Climate Modeling Center: $5 million at NOAA
    Support policy and management decisions:
  --Tools for risk management under uncertainty: $6 million (NSF: $5 
        million and NOAA: $1 million)
  --Atmospheric observations: $4 million at NOAA
  --Oceanographic observations: $4 million at NOAA
  --Satellite observations: $2 million at NASA
    Question. What are your plans for spending the $18 million increase 
you requested for global climate change research in your fiscal year 
2003 budget request?
    Answer. The $18 million will be spent according to the following 
plans:
  --$5 million will be used to establish a Climate Modeling Center 
        within NOAA Research's Geophysical Fluid Dynamics Laboratory to 
        provide a suite of climate products for decision support by 
        policy makers.
  --$8 million will used to support the Global Climate Observing 
        System:
    --$4 million will be used in conjunction with the World 
            Meteorological Organization system of Observing Networks. 
            Working with other developed countries following the 
            President's June 11, 2001, speech, NOAA will reestablish 
            the benchmark upper-air network, emphasizing data sparse 
            areas, and place new equipment in priority sites to measure 
            pollutant emissions, aerosol, and ozone.
    --$4 million will be used to contribute to the establishment of an 
            ocean observing system that can accurately document climate 
            scale changes in ocean heat, carbon, and sea level changes, 
            improving fields of sea surface temperature and surface 
            fluxes.
  --$2 million will be used for an intensive North American study of 
        carbon monitoring.
  --$2 million will be used to allow NOAA to contribute to the 
        interagency National Aerosol-Climate Interactions Program 
        (joint with NASA, DOE, DOI) that is presently under 
        development. The work will focus on the establishment of new 
        and augmentation of existing monitoring sites, and efforts to 
        establish distribution trends and assess the radiation 
        properties of aerosols, which are small particulates in the 
        atmosphere.
  --$1 million will go towards work with the National Science 
        Foundation to apply the research on decision-making in the face 
        of uncertainties, within the framework of existing Regional 
        Integrated Science Assessment (RISA) programs.
              national estuarine research reserve program
    Question. There are 25 National Estuarine Research Reserves (NERRs) 
in the United States; two of them, North Inlet/Winyah Bay and ACE Basin 
are in South Carolina.
    Do you have a backlog of land acquisition and construction needs 
for the NERRs sites?
    Answer. Yes. In addition to the five year projection of reserve 
acquisition and construction projects shown below, NOAA's Office of 
Ocean and Coastal Resource Management has contracted to have a land 
acquisition strategy prepared. The report will document land 
acquisition needs of the reserves system. A draft report is scheduled 
for completion in June 2002. A facilities plan for the sites was 
prepared in 1998, but needs to be updated.
    There are 25 existing National Estuarine Research Reserves with two 
more in the development stage (San Francisco Bay, California and St. 
Lawrence River, New York). NERRS allocations are done in a 
collaborative workshop involving all the NERRS sites and the NOAA 
national program office. The working group determines the split among 
sites, adjusting the split to account for specific needs of each site, 
and accounting for national, system-wide needs.
    See Attachment B for a proposed list of priority projects for 
fiscal year 2003-fiscal year 2007:

                                                                                          ATTACHMENT B
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year
                  Reserves                                                         Projects                                          2003         2004         2005         2006         2007
                                                                                                                                  Proposals    Proposals    Proposals    Proposals    Proposals
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ACE Basin, SC...............................  Land acquisition.................................................................  ...........   $2,750,000   $2,500,000   $2,500,000  ...........
Apalachicola, FL............................  Reserve Visitor Center Renovation/Expansion......................................     $477,000  ...........  ...........  ...........  ...........
Ches. Bay, MD...............................  Acquire Monie Bay parcel.........................................................  ...........  ...........  ...........     $200,000  ...........
Elkhorn Slough, CA..........................  Office and Public Meeting Area Expansion.........................................     $665,000  ...........  ...........  ...........  ...........
                                              Outdoor Classroom/Field Lab......................................................  ...........  ...........     $100,000  ...........  ...........
                                              Parcel A-adjoining reserve.......................................................     $200,000  ...........  ...........  ...........  ...........
                                              Parcel B-adjoining reserve.......................................................     $450,000  ...........  ...........  ...........  ...........
                                              Parcel C-adjoining reserve.......................................................  ...........     $500,000  ...........  ...........  ...........
                                              Parcel D-adjoining reserve.......................................................  ...........     $800,000  ...........  ...........  ...........
Deleware, DE................................  Reserve Headquarters addition....................................................     $400,000  ...........  ...........  ...........  ...........
Grand Bay, MS...............................  Phase II Construction Admin Offices, Ed & Outreach Facility......................     $800,000  ...........  ...........  ...........  ...........
Great Bay, NH...............................  Facilities.......................................................................     $200,000  ...........  ...........  ...........  ...........
GTM, FL.....................................  Facility construction: Guana River State Park Facility...........................     $500,000     $500,000  ...........  ...........  ...........
                                              Facility construction: Complete Environmental Educ. Cntr.........................     $200,000  ...........  ...........  ...........  ...........
                                              Facility construction: Marineland Facility.......................................  ...........     $250,000     $250,000  ...........  ...........
                                              Future Land Acquisition..........................................................  ...........     $300,000     $200,000  ...........  ...........
Jacques Cousteau, NJ........................  Dry labs, cupola enhancement.....................................................     $185,000  ...........  ...........  ...........  ...........
North Carolina, NC..........................  Research/educational facilities..................................................     $300,000     $200,000  ...........   $2,000,000  ...........
North Inlet/Winyah Bay, SC..................  Education kiosks and signs.......................................................      $25,000  ...........  ...........  ...........  ...........
                                              Education Center construction....................................................     $770,000  ...........  ...........  ...........  ...........
                                              Cottages for visiting researchers and educators..................................  ...........     $450,000  ...........  ...........  ...........
Padilla Bay, WA.............................  Acquire farmland next to bay (700 acres).........................................     $500,000  ...........  ...........  ...........  ...........
                                              Exhibits in renovated aquaria/display room.......................................     $450,000  ...........  ...........  ...........  ...........
Rookery Bay, FL.............................  Expanded vehicle parking Phase V.................................................     $150,000  ...........  ...........  ...........  ...........
                                              Planning and design: research dormitory Phase VI.................................  ...........     $200,000  ...........  ...........  ...........
                                              Construction and research dormitory Phase VII....................................  ...........  ...........     $700,000  ...........  ...........
Sapelo, GA..................................  Construction boat house, dock facility for research vessels, and educational          $100,000  ...........     $100,000  ...........  ...........
                                               exhibits.
                                              Water quality research lab.......................................................     $500,000  ...........  ...........  ...........  ...........
South Slough, OR............................  Acquire Indian Pt. uplands and tidelands.........................................  ...........  ...........  ...........     $914,600  ...........
                                              Phase II interpretive center renovations exhibit construction....................     $250,000  ...........  ...........  ...........  ...........
                                              Phase II interpretive center renovations observation tower and...................  ...........     $264,000  ...........  ...........  ...........
                                              Road repair and North Creek Trail Loop...........................................      $75,000  ...........  ...........  ...........  ...........
                                              Parking lot expansion............................................................  ...........  ...........      $50,000  ...........  ...........
                                              Acquire Empire Tidelands (33 acres)..............................................  ...........  ...........  ...........     $100,000  ...........
                                              Coastal Environmental Learning Center (acq. plan, proj. mgmt.)...................     $100,000      $40,000  ...........  ...........  ...........
                                              Acquire Joe Ney Uplands (100 acres)..............................................     $100,000  ...........  ...........  ...........  ...........
                                              Acquire Hayward Creek Uplands (200 acres)........................................  ...........  ...........     $500,000  ...........  ...........
                                              Acquire Hidden Creek Headquarters (30 acres).....................................  ...........  ...........     $130,000  ...........  ...........
                                              Acquire Wasson Creek Watershed...................................................  ...........  ...........   $1,000,000  ...........  ...........
                                              Acquire Elliot Creek Headwaters..................................................  ...........  ...........   $1,100,000  ...........  ...........
                                              Acquire Small Tract Willing Sellers..............................................  ...........     $150,000     $350,000  ...........  ...........
                                              Trail System--Historic Jed Smith Expedition Trail................................      $50,000      $60,000  ...........  ...........  ...........
                                              Trail System--boat shelter.......................................................  ...........  ...........      $35,000  ...........  ...........
                                              Admin Office in Charleston property acquisition..................................     $100,000  ...........  ...........  ...........  ...........
                                              Admin Office in Charleston planning and design...................................      $50,000  ...........  ...........  ...........  ...........
                                              Admin Office in Charleston construction..........................................  ...........     $330,000  ...........  ...........  ...........
                                              CELC site restoration demolition.................................................  ...........  ...........      $50,000  ...........  ...........
                                              CELC parking area and landscaping................................................  ...........  ...........      $10,000  ...........  ...........
                                              CELC reuse existing building.....................................................  ...........      $25,000       $5,000  ...........  ...........
Tijuana River, CA...........................  Border Field State Park Interpretive Center......................................     $256,000  ...........  ...........  ...........  ...........
                                              Acquire 20 acre parcel...........................................................     $170,000  ...........  ...........  ...........  ...........
Waquoit Bay, MA                               Land acquisition.................................................................     $200,000  ...........  ...........  ...........  ...........
Weeks Bay, AL...............................  Land acquisition (2000 acres)....................................................   $1,039,000   $2,181,000   $1,210,000   $1,588,600   $1,000,000
                                              Wetland restoration construction.................................................     $250,000  ...........  ...........  ...........  ...........
                                              Construction needs: equip. storage and workshop bldg.............................  ...........  ...........     $150,000  ...........  ...........
                                              Construction needs: equip. storage and workshop bldg.............................  ...........  ...........  ...........     $150,000  ...........
                                              Construction needs: bike-hike trail/boardwalk....................................     $100,000  ...........  ...........  ...........  ...........
                                              Construction needs: coastal initiative training center...........................  ...........   $1,000,000   $1,000,000  ...........  ...........
Wells, ME...................................  Land acquisition.................................................................     $400,000  ...........  ...........  ...........  ...........
Wells, ME...................................  Dormitory........................................................................  ...........  ...........     $560,000  ...........  ...........
                                                                                                                                ----------------------------------------------------------------
      SUBTOTAL, ALLOCATED FUNDS.............  .................................................................................  $10,012,000  $10,000,000  $10,000,000   $7,453,200   $1,000,000
                                                                                                                                ================================================================
UNALLOCATED FUNDS...........................  .................................................................................           $0           $0           $0   $2,546,800   $9,000,000
                                                                                                                                ================================================================
      TOTAL.................................  .................................................................................  $10,012,000  $10,000,000  $10,000,000  $10,000,000  $10,000,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
This projection was updated in fiscal year 2001--however, the fiscal year 2005-fiscal year 2007 figures are not complete.

    Question. Could you provide the Committee with a list of staffing 
needs throughout the NERRs network?
    Answer. With the substantial increases in reserve funding for 
grants over the last three years, staffing levels at reserve sites has 
improved. All personnel at the NERRS sites are state employees, not 
Federal employees. At this point, most reserves have the core staff--a 
manager, research coordinator, and education coordinator. In addition, 
increased funding has allowed many reserves to add a water quality 
monitoring technician, Coastal Training Program coordinator, and part-
time geographic information technician. Approximately half of the 
reserves also have stewardship coordinators. These positions are funded 
with either state or Federal funds, depending on the site. In general, 
limitations in the ability of the NERRS sites to add staff have been a 
function of a lack of ability to obtain a state funding match or tight 
state FTE ceilings, rather than a shortage of Federal funding for the 
sites. A few sites have been inhibited from adding staff because of 
these state budget and FTE restrictions.
    For NOAA, recent increases in the CZMA Program Administration line 
item have allowed the Estuarine Reserves Division to add much needed 
staff. These staff provide critical support to the reserves and help 
NOAA advance system-wide initiatives.
                       saltonstall/kennedy funds
    Question. Within the past five years, the highest amount of new 
budget authority generated by the Saltonstall/Kennedy program has been 
$4.8 million. The average grant level has been approximately $125,000. 
$11 million was made available for fiscal year 2002. You recently 
issued a $5 million grant to the State of Maine to help the Atlantic 
Salmon Aquaculture Industry. This single grant is more than the entire 
program level in fiscal year 2001 and more than $4.5 million more than 
any other single grant the program has ever issued.
    Clarification: NOAA has not issued a $5 million grant to the State 
of Maine to help the Atlantic Salmon aquaculture industry. For the 
fiscal year 2002 S-K Program, NOAA has reserved $5 million for projects 
addressing Atlantic Salmon aquaculture (Priority A) which will study 
the possible negative impacts of cultured Atlantic salmon on endangered 
wild stocks. Concern about such impacts threatens the viability of the 
Atlantic salmon aquaculture industry. The remaining funds are 
available, in no predetermined allocation, for projects addressing five 
other funding priorities, B-F (see below). The S-K Request for 
Proposals was published in the Federal Register on May 14, 2002. 
Proposals must be submitted by COB July 15, 2002.
    The S-K Program, which NMFS administers, provides financial 
assistance on a competitive basis for research and development projects 
to benefit the U.S. fishing industry. Grants or cooperative agreements 
are awarded to selected applicants for a maximum of 18 months. Eligible 
applicants include individuals, universities, state and local 
government agencies, Indian tribes, businesses, and non-profit 
organizations.
    All applications to the S-K Program must address one of the six 
published priorities, and will be subject to the requirements of the 
competition, including eligibility, submission deadline, and review 
process. Proposals found to have merit will be recommended for funding. 
Although we do not specify a minimum or maximum requested funding 
amount, we do not expect to make just one award with the $5 million.
    If we do not receive enough applications that meet the established 
requirements, to use the entire $5 million reserved for Priority A, 
NOAA will carry over the remainder to address this Atlantic Salmon 
priority in our fiscal year 2003 competition.
    Question. Why did you not alert the Appropriations Committee to the 
fact that Saltonstall/Kennedy fund receipts were substantially higher 
in 2001?
    Answer. Saltonstall-Kennedy funds are derived from a transfer from 
the Department of Agriculture to NOAA from duties on imported fisheries 
products. An amount equal to 30 percent of these duties is made 
available to NOAA and, subject to appropriation, is available to carry 
out the purposes of the American Fisheries Promotion Act (AFPA). These 
duties are tabulated on a calendar year basis and therefore the 
estimated transfer amount from the U.S. Department of Agriculture is 
not known until early summer, well after the President's Budget Request 
goes to the Congress.
    Question. Did the Administration issue this grant through the 
Secretarial review process established by Congress in the Saltonstall-
Kennedy Act? Please provide a copy of both the grant application and 
all documentation of the Secretary's review and approval.
    Answer. A grant has not been issued and NMFS expects that the $5 
million will fund multiple grants versus one. Atlantic Salmon is one of 
the 6 priorities within the Saltonstall-Kennedy solicitation and 
proposed projects will be reviewed based on the established criteria 
for all grants approved for funding from the S-K program. Below are 
descriptions of all priorities.
A. Atlantic Salmon Aquaculture Considering the Endangered Species 
        Status of Atlantic Salmon
    Promote the continued development of the Atlantic salmon 
aquaculture industry, by minimizing the potential for negative impacts 
on wild Atlantic salmon, which is listed as endangered under the ESA. 
Acceptable activities include the development and testing of: More 
secure cages to reduce farmed fish escapement; brood stock strains that 
grow more quickly, better resist disease, or pose less genetic threat 
to North Atlantic wild salmon stocks; improved marks or tags to trace 
potential escapes of farmed fish; vaccines or other methods to prevent 
the spread of disease between farmed fish and wild fish; and improved 
methods to monitor sea cage integrity and farmed fish disease.
B. Fishing Capacity Reduction under section 312(b)-(e) of the Magnuson-
        Stevens Act
    Promote the reduction of excess harvesting capacity in appropriate 
fisheries by analyses and evaluations that prepare the proponents of 
buybacks financed by NMFS loans under Title XI of the Merchant Marine 
Act to consider, plan for, organize, justify, support, and effect 
financed buybacks. (See 50 CFR part 600.1000, et seq. for framework 
rules governing buybacks; see section I.I. for electronic address of 
rules.) Acceptable activities include, but are not limited to:
      1. Analyzing cost/benefit to determine a fishery's potential for 
        financed buyback, including:
        a. Establishing the type of financed buyback (i.e., permit only 
            or permit and vessel buyback) that reduces the maximum 
            capacity at the least cost in the least amount of time;
        b. Knowledgeably estimating various capacity ranges in a 
            fishery that could be bought back at various cost ranges;
        c. Evaluating harvesters' pre-buyback cost-income, how various 
            buyback capacity/cost ranges could change post-buyback 
            cost-income, the prospective ability of post-buyback 
            harvesters to pay the estimated fees to service the buyback 
            loan, and the benefits to them of doing so; and
        d. Assuming the fishery's FMP already prohibits new entrants to 
            the fishery, establishing the scope and possible content of 
            appropriate FMP amendments that might first be required to 
            effectively and permanently resolve latent capacity in that 
            fishery prior to buyback, and to prevent post-buyback 
            vessel upgrading or other circumstances from replacing the 
            capacity that a buyback removes.
      2. Evaluating detailed means and methods for industry buyback 
        proponents in the fishery to efficiently and effectively:
        a. Survey potential referendum voters (each permit holder in 
            the buyback fishery) to establish the prospective degree of 
            interest in, and support for, a financed buyback in that 
            fishery, and
        b. Prepare a successful financed buyback application and 
            business plan (see 50 CFR 600.1003).
    In addition to the above, responsible proponents of financed 
buybacks in individual fisheries may also submit proposals to prepare 
actual financed buyback applications and business plans for that 
fishery.
C. Conservation Engineering
    (1) Reduce or eliminate adverse interactions between fishing 
operations and non-targeted, protected, or prohibited species, 
including the inadvertent take, capture, or destruction of such 
species. These include juvenile or sublegal-sized fish and shellfish, 
females of certain crabs, fish listed under the ESA, marine turtles, 
seabirds, or marine mammals.
    (2) Improve the survivability of fish discarded or intentionally 
released and of protected species released in fishing operations.
    (3) Reduce or eliminate impacts of fishing activity on EFH that 
adversely affect the sustainability of the fishery.
D. Optimum Utilization of Harvested Resources under Federal or State 
        Management
    (1) Reduce or eliminate factors such as diseases, human health 
hazards, and quality problems that limit the utilization of fish and 
their products in the United States and abroad.
    (2) Increase public knowledge of the safe handling and use of fish 
and their products.
    (3) Develop usable products from economic discards (defined in the 
Magnuson-Stevens Act as ``fish which are the target of a fishery, but 
which are not retained because they are of an undesirable size, sex, or 
quality, or for other economic reasons''), underutilized species, and 
byproducts of processing.
    (4) Facilitate industry cooperation and outreach to promote and 
enhance marketability of regional U.S. fishery products.
                           energy initiative
    Question. The President's fiscal year 2003 budget for NOAA includes 
an initiative to ``assist the operations of the U.S. energy sector'' at 
a cost of an additional $8.7 million. This increase is comprised of:
  --$6.1 million to implement a National Weather Service pilot program 
        that will provide more accurate forecast products to help the 
        energy industry improve electrical load forecasting and 
        hydropower facility management--a nationwide program cost is 
        estimated at $100 million;
  --$2.0 million to support the establishment and implementation of a 
        streamlined hydropower permit review process at NMFS; and
  --$550,000 for ``energy management''--which includes ``pursuing 
        energy commodities at competitive prices,'' among other things.
    Question. The National Weather Service's mandate is to protect life 
and property, and National Marine Fisheries Service is charged with 
conserving our marine resources. Nowhere do I see in NOAA's mandates 
the responsibility of saving the energy industry money--well, at least 
that's not NOAA's charge.
    Answer. NOAA believes that one of its roles is to support the U.S. 
economy as part of the Department of Commerce. Our mission statement 
states our commitment to ensure sustainable economic opportunities, and 
the NWS Organic Act, 15 U.S.C. 313, states that NOAA, ``. . . shall 
have the charge of the forecasting of the weather, the issuance of 
storm warnings, the display of weather and flood signals for the 
benefit of agriculture, commerce, navigation, . . .''. By improving 
certain basic services that the National Weather Service already 
provides (e.g., daily temperature forecasts), NOAA will provide 
information that can improve efficiency in the energy sector which can 
in turn benefit the economy. There are significant potential savings 
that can be realized by the general public through lower energy prices 
if the industry makes better use of environmental information.
    In addition, there are numerous benefits to wise energy management 
beyond cost savings. For example, the potential exists to reduce excess 
greenhouse gas emissions by providing the necessary data that will 
enable more accurate electrical load forecasts and reduce excess 
electrical energy generation. In addition, brownouts and blackouts can 
be avoided completely if the Nation's electrical needs are better 
forecast. Thus, while the energy sector is one beneficiary, improved 
daily temperature forecasts and improved river forecasts benefit 
multiple sectors of the economy and the public, including agriculture, 
water resource management, water transportation, and others. The $6.1 
million initiative will address these issues.
    The $2.0 million proposal is to expedite permits and coordinate 
Federal, State, and local actions needed for energy-related project 
approvals on a national basis. The goal is to reduce, by 25 percent, 
the time required to adjust the permits of licensed energy projects/
facilities. Currently, re-licensing of existing facilities takes 6-10 
years.
    The $550,000 request will be used to identify and implement energy 
savings opportunities and apply renewable energy technologies and 
sustainable designs at NOAA-managed facilities. NOAA manages over 500 
facilities across the United States.
    Question. Whose idea was this?
    Answer. The original idea for the NOAA Energy Initiative resulted 
from the Department of Commerce input to the Administration's Energy 
Task Force report released in April 2001. In addition, a survey of and 
meetings with industry executives have validated the benefits of 
improved weather information to forecast energy needs.
    Question. Can you explain to me how the use of an additional $8.7 
million of taxpayer dollars for the Energy Sector benefits our citizens 
more than the critical life-saving services government should provide--
like coastal hazards warnings, transportation advisories, or improving 
hurricane and tornado prediction?
    Answer. The fiscal year 2003 energy initiative, in the Southeast, 
for $6.1 million, provides energy related benefits to citizens, one of 
which is energy management. There are numerous benefits of wise energy 
management beyond cost savings, including the potential to save lives 
with improved temperature forecasts and improved air-quality. U.S. 
citizens depend on a stable energy supply. Blackouts and brownouts 
disrupt commerce and place many citizens' lives at risk (e.g., air 
conditioning failures, heating failures). Heat is the number one 
weather-related cause of death. Improving daily temperature forecasts 
will help to improve heat-related advisories and forecasts. The risk of 
heat-related death can be minimized through more effective use of 
environmental forecasts.
    The remaining $2.6 million funds a $2.0 million request for 
streamlining the energy-permit process, which responds to an Executive 
Order directing federal agencies to expedite permits needed for energy 
related project approval, and $0.55 million for energy management to 
reduce NOAA's facility operating costs through actively pursuing energy 
commodities at competitive prices, identifying and implementing energy 
savings opportunities, and applying renewable energy technologies and 
sustainable designs at NOAA-managed facilities.
    Question. Your budget documents ``savings'' from the better 
forecasts at $1 billion per year--if a $100 million nationwide program 
were instituted. Based on what we have learned from the last year's 
energy ``crisis'', those sound like savings to the power producers. Do 
you know that these savings will be passed on to the consumer?
    Answer. The potential does exist to transfer savings to the 
consumers but we do not know the extent of these savings. With 
increasing deregulation of the energy industry, consumers are realizing 
the actual costs of energy production and the savings associated with 
increased efficiency. NOAA aims to ensure that the best environmental 
information is available to all sectors of the economy and to the 
public.
    Question. I understand you did one of these ``pilot projects'' in 
New Hampshire--are you still funding that? Why would you stop funding 
that, and start a new one?
    Answer. NOAA, as a result of Congressional action, is funding a 
pilot project in New England with a focus on improving the daily 
temperature and air quality forecasts for the region. The initial data-
gathering phase will be completed by September 2002. A competitive 
contract is being let to conduct an independent, peer-reviewed 
assessment of the expected improvements in forecasting and their 
benefits to energy efficiency. The Modernized Cooperative Observing 
Program instrument network installed during fiscal year 2002 for this 
project will remain operational thereafter with operation and 
maintenance costs supported through the National Weather Service.
    While Congress was conferring about the fiscal year 2002 budget, 
NOAA simultaneously developed through the fiscal year 2003 budget 
formulation process a separate energy pilot study focusing on the 
Southeast. The Southeast was identified through NOAA's internal process 
as the target region. The decision was based on both need and 
opportunity as expressed by industry stakeholders nationwide who were 
consulted in the development of the pilot program. This region was also 
chosen because there is a greater reliance on hydropower and an 
opportunity to test and evaluate potential improvements in river flow 
forecasts. The information gained from conducting the fiscal year 2002 
pilot program will benefit the fiscal year 2003 program and is 
applicable to all regions of the country. The long-term goal is to 
expand the program nationwide.
                          international issues
    Question. The United States has some of the strictest marine 
protection laws in the world. It is important that NOAA and the 
Department of State continue to pursue international agreements in 
order to level the playing field. With respect to regulation of 
shrimpers, Congress in 1990 enacted Section 609 of Public Law 101-162, 
which restricts the import of shrimp harvested in a way that harms sea 
turtles. Under this law, nations must be certified as having a 
regulatory program to protect sea turtles in their shrimp trawl 
fisheries that is comparable to the U.S. program in order to obtain 
access to U.S. shrimp markets. Evidence observed during an inspection 
by the National Marine Fisheries Service (NMFS) at the port of 
Mazatlan, Mexico, November 13-16, 2001 revealed serious compliance and 
enforcement issues with respect to the use of Turtle Excluder Devices 
(TEDs). A follow-up inspection took place during the week of March 4, 
2002.
    Back in November of last year, NMFS found serious compliance and 
enforcement problems in Mexico with respect to shrimpers' use of Turtle 
Excluder Devices, or ``TEDs''. Admiral, such TED violations in Mexico 
come at a time when NMFS is considering a rule that would impose more 
stringent regulations on U.S. shrimpers. I understand that a new team 
was recently in Mexico to inspect the situation down there.
    Answer. Yes, you are correct. A team consisting of NMFS and 
Department of State personnel conducted inspections from early to the 
middle of March, 2002, in several ports of Mexico--Tampico, Ciudad del 
Carmen, Campeche, Guaymas, and Mazatlan.
    Question. Did the inspection team find improvements in Mexico? If 
not, does the Administration plan to decertify Mexico, and block 
imports of shrimp?
    Answer. While a few problems were observed on some vessels, in 
general the inspection team found that the Government of Mexico has 
taken actions to improve its enforcement program since the November 
inspection. The team noted that it is important for Mexico to increase 
or, at a minimum, maintain TED enforcement activity at sea and 
dockside. To help ensure that this occurs, NMFS, with assistance from 
the Department of State, has organized a fishery enforcement training 
workshop for Mexican fishery enforcement personnel. The Mexican Navy 
will be included in the training to assist Mexico's General Bureau of 
Fishery and Marine Resource Inspection and Oversight (PROFEPA) to 
accomplish higher TED compliance. The preliminary determination is that 
Mexico's sea turtle protection program for its commercial fisheries is 
currently effective and meets the requirements for certification.
    Question. On a broader note, what is the Administration doing to 
ensure that foreign fishing fleets are held to the same standards as 
the U.S. fleet, such as negotiating an international agreement to 
prohibit the practice of shark finning, or to prevent marine debris 
that ends up on U.S. shores?
    Answer. Our efforts to conserve and manage sharks go back many 
years and are detailed in our February 1, 2002, ``Report to Congress 
Pursuant to the Shark Finning Prohibition Act of 2000 (Public Law 106-
557),'' a copy of which is enclosed. The Shark Finning Prohibition Act 
calls for a multiplicity of actions to the taken by the Administration, 
including the collection of information on the incidence of finning as 
well as seeking an end to the practice. Clearly, these actions must be 
carried out in a logical sequence, and our Report explains how we will 
do this. In addition, working closely with the Department of State, 
before the end of May 2002, we will carry out a worldwide program of 
diplomatic demarches that will include our message regarding the 
requirements of: (1) the Shark Finning Prohibition Act and (2) the 
International Plan of Action for the Conservation and Management of 
Sharks of the Food and Agriculture Organization of the United Nations. 
These demarches will go to appropriate coastal countries and regional 
fisheries management organizations worldwide.
    NMFS has consulted, under the Endangered Species Act, with many 
federal agencies on their activities that are likely to result in 
adverse effects to endangered sea turtles as a result of marine 
pollution and plastics. For example, through a consultation with the 
Air Force on Search and Rescue Training in the Gulf of Mexico, NMFS 
required the Air Force to collect as many lightsticks, a major source 
of marine plastic debris, as possible after completion of an exercise 
and properly dispose all plastic wrappings associated with the 
lightsticks. NMFS also required the Mineral Management Service to 
condition permits issued to oil companies to require collection and 
removal of flotsam resulting from explosive or mechanical rig removals. 
The Commerce Department's National Oceanic and Atmospheric 
Administration (NOAA), including NMFS' staff, joined forces with the 
Ocean Conservancy, U.S. Coast Guard, Fish and Wildlife Service, and the 
Hawaii Sea Grant program in a major ocean debris removal campaign in 
the northwestern Hawaiian Islands where derelict fishing gear and trash 
threaten marine turtles and other living marine resources. NOAA 
deployed three chartered commercial vessels, and to date more than 120 
tons of nets and derelict gear have been recovered. NMFS recognizes 
that marine debris is a serious threat to the recovery of marine 
turtles and will continue to address this threat through consultations 
with federal agencies and collaborative efforts such as those conducted 
in the northwestern Hawaiian Islands.
                        FEDERAL TRADE COMMISSION

STATEMENT OF TIMOTHY J. MURIS, CHAIRMAN

                           SUMMARY STATEMENT

    Senator Hollings. We next have the Federal Trade 
Commission. We welcome you, Chairman Muris, and we would 
appreciate your statement at this time, which will be included 
in full. You can highlight it or deliver it as you wish.
    Mr. Muris. Thank you very much, Mr. Chairman. As your 
letter requested, let me just briefly summarize my testimony. I 
appreciate the opportunity to appear before you today in 
support of our fiscal year 2003 appropriations request.
    Let me start by expressing my sincere thanks to the 
subcommittee and in particular to you, Mr. Chairman and Senator 
Gregg, for your strong support of the FTC in both antitrust and 
consumer protection. As you know, the FTC is the only Federal 
agency that has jurisdiction over both consumer protection and 
antitrust in broad areas of the economy. With credit to our 
excellent and dedicated staff, the FTC's record of protecting 
American consumers is impressive. We will continue to build on 
the successes of my predecessors.
    The most important word in understanding what we are doing 
at the FTC, I believe, is continuity with the past. We will 
continue to address competition and consumer protection issues 
with the same expertise and commitment as was the case under 
Bob Pitofsky.
    To accomplish our mission in fiscal year 2003, the FTC 
requests $176,599,000 and 1,074 FTE. Funding at this level 
would allow us to further our record of solid accomplishment on 
behalf of American consumers. A few highlights, I think, reveal 
the benefit of our role.
    In consumer protection, fighting fraud, especially on the 
Internet, remains a key priority. For example, we have cracked 
down on the sale of bogus bioterrorism-related products that 
sprung up after September 11. We sent 121 warning letters to 
Internet marketers of these products and most sites have 
eliminated their suspect claims. We targeted the most egregious 
of the remaining marketers for law enforcement action. Last 
month, we announced settlements with the marketers of a home 
test kit for anthrax and an online seller of a purported 
anthrax treatment product.
    We also have moved aggressively against diet deceptive 
claims about supplements on the Internet. We have taken action 
against fraud involving our telemarketing sales rule. Last 
fall, we achieved a settlement of over $8 million involving the 
pernicious practice of companies that had the consumer's credit 
card information, called the consumer, and did not tell them 
they had the information. Yesterday, we announced a $39 million 
order in a telemarketing sales case.
    We are planning many more cases on fraud, both online and 
off. We are increasing our efforts to have career fraudsters 
put in jail, and we are spending more money on the growing 
problem of cross-border fraud.
    We have also, Mr. Chairman, turned much greater attention 
to the issue of privacy, and we propose to do more in the 
future. We have recently proposed amendments to our 
telemarketing sales rule, including a national ``do not call'' 
list, and a proposal to deal with the pre-acquired account 
information that I mentioned.
    We have begun law enforcement in a new area with our Eli 
Lilly case involving promises of security made by companies. In 
that case, Eli Lilly inadvertently sent an e-mail with 600 e-
mail addresses of individuals taking Prozac. They had promised 
to keep the information confidential. They had promised, in our 
opinion, to take reasonable steps for security and they did 
not. We accordingly achieved a consent agreement.
    We have also, for the first time, systematically begun to 
attack deceptive spam with a series of cases we brought last 
month and we have several more in the pipeline.
    We also, as requested by this committee, are continuing to 
monitor the marketing of violent media to children. We issued 
our third report last December and have another one coming this 
summer.
    On the antitrust side, despite the decline in the merger 
wave, we are still pursuing many cases. This fiscal year alone, 
the FTC has taken action in 10 cases. In non-merger antitrust, 
we have doubled our number of investigations. The 
pharmaceutical area is a particularly important area. We have 
what I call a first and second generation of cases and 
investigations.
    The first generation involves agreements between branded 
products and generic products to keep the generic products off 
the market. The Commission has brought three such cases.
    The second generation involves unilateral actions by 
branded companies to keep generic competition off the market. 
These cases, I think, promise enormous benefits for consumers. 
We recently were successful in an amicus brief that we filed 
involving the unilateral action where a branded company had 
tried to manipulate the FDA process to keep a generic off the 
market. The District Court in New York accepted our analysis 
and rejected the branded company's arguments. We are pursuing 
many other cases in health care at all levels of health care 
competition. We have a consent agreement that we will announce 
soon. Also, as former Chairman Bob Pitofsky suggested to me, we 
are holding hearings to explore the complex relationship 
between intellectual property and antitrust.
    Mr. Chairman, let me briefly address the issue that has 
attracted much attention lately, which is this so-called 
clearance agreement with the Department of Justice's Antitrust 
Division. First, we are grateful that you have confidence in 
the FTC and want us to do more. In more than 50 years of 
clearance process agreements, no Member of Congress has ever 
taken such close interest in the process.
    The reality, Mr. Chairman, is that we have two antitrust 
agencies enforcing the same antitrust law with the exact same 
standard. The law, however, states that only one agency can 
investigate a specific merger. Because of that, the agencies 
have agreed for decades that neither will proceed with an 
investigation unless one first clears the investigation to the 
other.
    This process worked well up until the 1990s. In the 1980s, 
for example, there were only, on average, about 10 disputes a 
year. Since then, however, there have been more than 80 
disputes per year. There have been delays in the last 2 years 
of 3 weeks or more in one-quarter of the cases for which 
clearance was sought. When I arrived at the FTC last summer, 
there was a case where both agencies wanted to investigate and 
they had fought for over 1 year over who would do it. In that 1 
year, neither could investigate. Bob Pitofsky and Joel Klein 
tried to fix this problem, but they could not agree on a 
solution.
    Now, I know there is concern about media mergers, but I 
want to make clear that the new clearance agreement does not 
affect which agency will do media mergers. Even without the new 
agreement, the Antitrust Division would have done media 
mergers. If we had not signed a new agreement, disputes would 
be governed by the 1993 agreement. That agreement said that the 
primary grounds for resolving clearance disputes is experience 
within the last 5 years.
    In media, the DOJ has a lot of experience and the FTC has 
very little. There are only two major FTC cases in the last 
several years. One is Turner-Time Warner, which is now outside 
the 5-year window contained in the 1993 agreement. The other is 
AOL-Time Warner. In that case, the clearance was so hotly 
contested that Chairman Pitofsky promised that if the FTC could 
do the deal, then the FTC would not count the experience in 
AOL-Time Warner in future clearance disputes. Now, even if we 
were to count AOL-Time Warner, in the last 5 years, the FTC has 
done only one major media deal and the Department of Justice 
has done six.
    The clearance agreement did do something different. It 
publicly announced in detail for the first time how the process 
would work. A secret process has become transparent. I believe 
this is a good Government initiative that will avoid investing 
resources in fighting with the DOJ. In fact, our predecessors, 
Joel Klein and Bob Pitofsky, wrote us a letter saying exactly 
that.

                           prepared statement

    In summary, Mr. Chairman, I believe the role of the FTC is 
vital for consumers. I believe we do good work and I hope that 
you approve our full budget request. Thank you.
    [The statement follows:]
                 Prepared Statement of Timothy J. Muris
                              introduction
    Mr. Chairman, I am Timothy J. Muris, Chairman of the Federal Trade 
Commission. I am pleased to appear before the Subcommittee today to 
testify in support of the FTC's fiscal year 2003 Appropriation 
request.\1\
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    \1\ The written statement represents the views of the Federal Trade 
Commission. My oral presentation and responses are my own and do not 
necessarily reflect the views of the Commission or of any other 
Commissioner.
---------------------------------------------------------------------------
    The FTC is the only federal agency with both consumer protection 
and competition jurisdiction in broad sectors of the economy.\2\ We 
enforce laws that prohibit business practices that are anticompetitive, 
deceptive, or unfair to consumers, as well as promote informed consumer 
choice and public understanding of the competitive process. The work of 
the FTC is critical in protecting and strengthening free and open 
markets in the United States.
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    \2\ The FTC has broad law enforcement responsibilities under the 
Federal Trade Commission Act, 15 U.S.C. Sec. 41 et seq. With certain 
exceptions, the statute provides the agency with jurisdiction over 
nearly every sector of the economy. Certain entities, such as 
depository institutions and common carriers, as well as at the business 
of insurance, are wholly or partially exempt from FTC jurisdiction. In 
addition to the FTC Act, the FTC has enforcement responsibilities under 
more than 40 additional statutes and more than 30 rules governing 
specific industries and practices.
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    The FTC's record is impressive. The agency has fulfilled its 
mission of protecting American consumers by pursuing an aggressive law 
enforcement program during rapid changes in the marketplace--the past 
decade saw the largest merger wave in history, the rapid growth of 
technology, and the increasing globalization of the economy. Through 
the efforts of a dedicated and professional staff, the FTC has 
shouldered an increasing workload despite only modest increases in 
resources. I would like to thank the Chairman and members of the 
Subcommittee for their continued support of the Commission's mission.
    The guiding word at the FTC is ``continuity.'' The agency continues 
aggressively to pursue law enforcement initiatives, launch consumer and 
business education campaigns, and organize forums to study and 
understand the changing marketplace, just as we have done for several 
years. We will continue to address competition and consumer protection 
issues in the evolving economy with the same expertise and commitment 
as before.
    Our competition mission continues to reflect the following widely 
shared consensus: (1) the purpose of antitrust is to protect consumers; 
(2) the mainstays of antitrust enforcement are horizontal cases--cases 
involving the business relations and activities of competitors; (3) in 
light of recent judicial decisions and economic learning, appropriate 
monopolization and vertical cases are an important part of the 
antitrust agenda; and (4) case selection should be guided by sound 
economic and legal analysis, and made with careful attention to the 
facts. The FTC is primarily a law enforcement agency, and we will 
continue aggressive enforcement of the antitrust laws within the 
agency's jurisdiction. The FTC is also an independent expert agency and 
a deliberative body, and is thus well suited to studying an evolving 
marketplace and developing antitrust policy--we will continue to hold 
public hearings, conduct studies, and issue reports to Congress and the 
public.
    Similarly, there is widespread agreement on how the FTC best 
carries out its consumer protection mission. Twenty years ago, the FTC 
shifted its emphasis toward more aggressive enforcement of the basic 
laws of consumer protection. The staple of our consumer protection 
mission is to identify and fight fraud and deception. The FTC monitors 
trends and developing issues in the marketplace to determine the most 
effective use of its resources. The FTC has become the national leader 
in consumer protection and partners with other law enforcement agencies 
at the federal, state, local, and international levels to maximize 
benefits for consumers.
    To accomplish our mission in fiscal year 2003, the FTC requests 
$176,599,000 and 1,074 FTE. These figures represent an increase over 
the current year of $20,617,000, but no additional FTE. Almost 25 
percent of the requested dollar increase would be devoted to comply 
with proposed legislation requiring all federal agencies to begin 
funding directly certain retirement and health benefits. Funding at the 
requested level would allow the FTC to build on a record of solid 
achievement on behalf of American consumers.
    During fiscal year 2003, the FTC will address significant law 
enforcement and policy issues throughout the economy, devoting the 
major portion of its resources to those areas in which the agency can 
provide the greatest benefits to consumers. This testimony in support 
of our fiscal year 2003 appropriation highlights program priorities in 
the FTC's two missions. In the Consumer Protection Mission, we discuss 
Privacy; Internet Law Enforcement; Health, Safety, and Economic Injury; 
Media Violence, Gambling, and Children; Globalization; and Consumer 
Outreach. In the Maintaining Competition Mission, we discuss Merger 
Enforcement; Streamlining the Merger Review Process; Nonmerger 
Enforcement; Targeting Resources for Consumer Impact; and Outreach 
Efforts. The testimony concludes with a brief summary of the FTC's 
fiscal year 2003 appropriation request.
                      consumer protection mission
Privacy
    During fiscal year 2003, the FTC intends to devote significant 
resources to privacy protection. Consumers are deeply concerned about 
the privacy of their personal information, both online and offline. 
Although privacy concerns have been heightened by the rapid development 
of the Internet, they are by no means limited to the cyberworld. 
Consumers can be harmed as much by the thief who steals credit card 
information from a mailbox or dumpster as by the one who steals that 
information from a Web site. Of course, the nature of Internet 
technology may raise its own special set of issues.
    The FTC currently enforces a number of laws that address consumers' 
privacy,\3\ and intends to increase substantially the resources 
dedicated to privacy protection. Our initiatives in this area attempt 
to reduce the serious consequences that can result from the misuse of 
personal information and fall into three major categories: vigorous 
enforcement of existing laws, additional rulemaking, and continued 
consumer and business education.
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    \3\ See, e.g., Federal Trade Commission Act, 15 U.S.C. Sec. 41 et 
seq. (prohibiting deceptive or unfair acts or practices, including 
violations of stated privacy policies); Fair Credit Reporting Act, 15 
U.S.C. Sec. 1681 et seq. (addressing the accuracy, dissemination, and 
integrity of consumer reports); Telemarketing and Consumer Fraud and 
Abuse Prevention Act, 15 U.S.C. Sec. 6101 et seq. (including the 
Telemarketing Sales Rule, 16 C.F.R. Part 310) (prohibiting 
telemarketers from calling at odd hours, engaging in harassing patterns 
of calls, and failing to disclose the identity of the seller and 
purpose of the call); Children's Online Privacy Protection Act, 15 
U.S.C. Sec. 6501 et seq. (prohibiting the collection of personally 
identifiable information from young children without their parents' 
consent); Identify Theft and Assumption Deterrence Act of 1998, 18 
U.S.C. Sec. 1028 (directing the FTC to collect identity theft 
complaints, refer them to the appropriate credit bureaus and law 
enforcement agencies, and provide victim assistance); Gramm-Leach-
Bliley Act, 15 U.S.C. Sec. 6801 et seq. (requiring financial 
institutions to provide notices to consumers and allowing consumers 
(with some exceptions) to choose whether their financial institutions 
may share their information with third parties).
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            Privacy Law Enforcement
    The FTC will pursue law enforcement efforts in the following areas:
  --Enforcing privacy promises, focusing on cases involving sensitive 
        information, transfers of information as part of a bankruptcy 
        proceeding, and the failure of companies to meet commitments 
        made under the Safe Harbor Program to comply with the European 
        Commission's Directive on Data Protection.\4\ For example, in 
        January 2002, the FTC accepted a consent order with Eli Lilly & 
        Company to resolve allegations that Lilly violated the FTC Act. 
        According to the complaint, Lilly claimed that it employed 
        measures appropriate under the circumstances to protect the 
        confidentiality of personal information obtained from consumers 
        who visited its Prozac.com Web site, when in fact it did 
        not.\5\
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    \4\ The European Commission's Directive on Data Protection became 
effective in October 1998, and prohibits the transfer of personal data 
to non-European Union nations that do not meet the European 
``adequacy'' standard for privacy protection. To bridge different 
privacy approaches between the United States and the EU, and to provide 
a streamlined means for U.S. organizations to comply with the 
Directive, the U.S. Department of Commerce, in consultation with the 
European Commission, developed a ``Safe Harbor'' framework, which was 
approved by the EU in July 2000. Companies that self-certify to the 
Department of Commerce that they comply with the Safe Harbor Principles 
may be deemed by the EU to provide ``adequate'' privacy protection 
under the EU Directive. The FTC will give priority to referrals of non-
compliance with safe harbor principles from EU Member States. See 
Department of Commerce's Safe Harbor Website, www.export.gov/
safeharbor.
    \5\Eli Lilly & Co., No. 012-3214 (Jan. 18, 2002) (consent agreement 
accepted subject to public comment).
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  --Enforcing the Children's Online Privacy Protection Act (COPPA),\6\ 
        which prohibits the collection of personally identifiable 
        information from young children without their parents' consent. 
        Since 2001, the Commission has brought a number of COPPA 
        enforcement actions resulting in more than $100,000 in civil 
        penalties.\7\
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    \6\ 15 U.S.C. Sec. 6501 et seq.
    \7\ United States v. American Pop Corn Co., No. C02-4008DEO (N.D. 
Ia., Feb. 28, 2002) (consent decree); United States v. Lisa Frank, 
Inc., No. 01-1516-A (E.D. Va., Oct. 3, 2001) (consent decree); United 
States v. Looksmart, Ltd., No. 01-606-A (E.D. Va., Apr. 23, 2001) 
(consent decree); United States v. Bigmailbox.com, Inc., No. 01-605-A 
(E.D. Va., Apr. 23, 2001) (consent decree); United States v. Monarch 
Servs., Inc., No. AMD 01 CV 1165 (D. Md., Apr. 20, 2001) (consent 
decree).
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  --Bringing actions against fraudulent or deceptive spammers. In 
        February of this year, the Commission launched a crackdown on 
        deceptive junk email, or ``spam,'' and announced six 
        settlements with seven defendants who allegedly continued to 
        send deceptive chain email after being warned that the chain 
        email scheme was illegal.\8\ The FTC maintains a special 
        electronic mailbox, [email protected], to which Internet customers 
        can forward spam. This database currently receives 10,000 new 
        pieces of spam every day. We will continue to use this mailbox 
        to identify targets for law enforcement action.
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    \8\ FTC v. Boivin, No. 8:02-CV-77-T-26 MSS (M.D. Fla., Jan. 15, 
2002) (consent decree); FTC v. Estenson, No. A3-02-10 (DND, Feb. 5, 
2002) (consent decree); FTC v. Larsen, No. 8:02-CV-76-T-26MAP (M.D. 
Fla., Jan. 16, 2002) (consent decree); FTC v. Lutheran, No. 02 CV 0095 
K (RAB) (S.D. Cal., Jan. 18, 2002) (consent decree); FTC v. Va, No. 02-
60062-Civ-Zloch (S.D. Fla., Jan. 18, 2002) (consent decree); FTC v. 
Pacheco, No. 02-CV-31L (D.R.I., Jan. 22, 2002) (consent decree).
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  --Challenging ``pretexting,'' the practice of fraudulently obtaining 
        personal financial information, often by calling banks under 
        the pretense of being a customer. Earlier this month, the 
        Commission announced settlements in three federal district 
        court actions against information brokers who allegedly engaged 
        in illegal pretexting.\9\
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    \9\ ``Information Brokers Settle FTC Charges,'' FTC Press Release 
(Mar. 8, 2002), available at <>.
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  --Enforcing the privacy protections of the Fair Credit Reporting 
        Act,\10\ which ensures the integrity and accuracy of consumer 
        credit reports and limits the disclosure of such information to 
        entities that have ``permissible purposes'' to use the 
        information.
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    \10\ 15 U.S.C. Sec. 1681 et seq.
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            Privacy Rulemaking
    The Commission is engaged in the following rulemaking activities:
  --Considering proposed amendments to the Telemarketing Sale Rule,\11\ 
        which were announced in January 2002.\12\ Among other things, 
        the proposed amendments would create a national do-not-call 
        list to allow consumers to make one call to remove their names 
        from telemarketing lists. The proposed amendments also would 
        address the misuse of ``pre-acquired account information,'' 
        lists of names and credit card account numbers of potential 
        customers. Misuses include billing consumers who believed they 
        were simply accepting a free trial, or billing consumers for 
        products or services that they did not purchase.
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    \11\ See Telemarketing Sales Rule, 16 C.F.R. Part 310.
    \12\ 67 Fed. Reg. 4492 (Jan. 30, 2002).
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  --Completing the current rulemaking on safeguarding consumers' 
        financial information pursuant to the Gramm-Leach-Bliley 
        Act.\13\
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    \13\ The Gramm-Leach-Bliley Act, 15 U.S.C. Sec. Sec. 6801(b) and 
6805(b), requires the FTC to issue a rule establishing appropriate 
standard for safeguards to ensure the security, confidentiality, and 
integrity of customer records and information.
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            Privacy- and Security-Related Consumer and Business 
                    Education and Outreach
    The agency will continue to conduct workshops and other educational 
activities:
  --Training law enforcement officials about identity theft. On March 
        14, 2002, the FTC, the U.S. Secret Service, and the Department 
        of Justice kicked off a series of training seminars to provide 
        local and state law enforcement officers with practical tools 
        to enhance their efforts to combat identity theft.\14\
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    \14\ See Identity Theft and Assumption Deterrence Act of 1998, 18 
U.S.C. Sec. 1028. This Act makes the FTC a central clearinghouse for 
identity theft complaints. Under the Act, the FTC is required to log 
and acknowledge such complaints, provide victims with relevant 
information, and refer their complaints to appropriate entities (e.g., 
the major consumer reporting agencies and other law enforcement 
agencies).
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  --Collecting information about identity theft with the FTC's new ID 
        Theft Affidavit. In February 2002, the FTC joined with several 
        companies and privacy organizations to make available a 
        universal identity theft affidavit that victims of identity 
        theft can submit to creditors. This form will help victims 
        recoup their losses and restore their legitimate credit records 
        more quickly.
  --Continuing to explore and monitor the privacy implications of new 
        and emerging technologies through workshops, reports, and other 
        public meetings. Earlier this month, the FTC released a summary 
        and update of the proceedings of a workshop sponsored by the 
        Commission titled, ``The Mobile Wireless Web, Data Services, 
        and Beyond: Emerging Technologies and Consumer Issues.'' \15\ 
        On May 20-21, 2002, the FTC will host a two-day public workshop 
        to explore issues related to the security of consumers' 
        computers and the personal information stored in them or in 
        company databases.\16\
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    \15\ The report is available at <>.
    \16\ See ``FTC to Host Public Workshop on Consumer Information 
Security,'' FTC Press Release, available at <>.
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Internet law enforcement
    The FTC will continue aggressively to monitor the Internet to 
ferret out frauds and schemes. Since 1994, the early days of the 
Internet, the FTC has brought 222 Internet-related law enforcement 
actions against 688 defendants, stopping consumer injury estimated at 
more than $2.1 billion. These cases often pose novel challenges: 
tracking anonymous fraud artists, unraveling complex technological 
schemes, and responding at lightning speed to frauds moving just as 
rapidly.
    A growing number of these high tech schemes exploit the design and 
architecture of the Internet. A recent example is FTC v. Zuccarini, 
C.A. No. 01-CV-4854 (E.D. Pa., filed Sept. 25, 2001), in which the 
defendant allegedly used more than 5,000 copycat Web addresses to 
hijack surfers from their intended destinations to one of his Web 
sites, hold them captive, and pelt them with a barrage of ads, some of 
them pornographic. According to the FTC's complaint, the defendant was 
able to divert consumers who misspelled addresses of popular legitimate 
sites because he had registered multiple misspelled variations of those 
sites. Once he had lured consumers to his sites, the defendant 
``mousetrapped'' them by disabling their browsers' ``back'' and 
``exit'' commands. At the FTC's request, the court enjoined the 
defendant from continuing these activities. The FTC will seek an order 
requiring the defendant to disgorge as much as $1 million in ill-gotten 
gains.
    As in past years, the FTC's Internet fraud campaign is combating 
scams that jump from news headlines--this year, scams that have 
appeared since September 11th. The FTC, working with 30 State Attorneys 
General, the New York Better Business Bureau, the California Department 
of Health, the FDA, and other federal agencies identified more than 200 
Web sites pitching products to protect against, detect, or treat 
illnesses caused by biological or chemical agents, including anthrax. 
These products, most of them bogus or ineffective, include herbal 
remedies for anthrax, air filters, gas masks, and do-it-yourself kits 
to test mail for anthrax. After identifying these Web sites, the FTC 
sent warning letters to the operators of 121 sites, and published two 
consumer alerts to warn the public that fraudsters follow the headlines 
and tailor their offers to prey upon the public's latest fears. As of 
March 1, 2002, 62 percent of those warned had dropped the troubling 
claims from their Web sites, and the FTC continues to monitor the 
remainder of the Web sites. The FTC brought two law enforcement actions 
against the operators of Web sites engaging in more egregious 
practices. In one case, the FTC obtained a federal court order 
prohibiting a marketer from selling anthrax home test kits.\17\ In 
second, the FTC has issued a consent order prohibiting a vendor from 
making anthrax cure claims for a colloidal silver product.\18\ Because 
the Internet transcends national boundaries, future cases increasingly 
will involve cross-border scams. During the past fiscal year, the FTC, 
other federal agencies, state agencies and foreign agencies from nine 
countries participated in ``Operation Top Ten Dot Cons.'' Through this 
sweep, the largest in FTC history, the FTC and its partners filed 209 
actions around the world attacking the top 10 Internet scams, as 
identified by data received in our consumer complaint database.\19\
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    \17\ FTC v. Vital Living Products, Inc., Civ. No. 3:02CV74-MU 
(W.D.N.C., proposed consent decree filed with court, Feb. 25, 2002).
    \18\ Kris A. Pletschke, C-4040 (Feb. 22, 2002) (consent order).
    \19\ The top 10 targeted frauds were: Internet Auction Fraud, 
Internet Service Provider Schemes, Internet Web Site Design/Promotions 
(Web Cramming, Internet Information and Adult Services), Credit Card 
Cramming, Multi-level Marketing/Pyramid Schemes, Business Opportunities 
and Work-At-Home Scams, Investment Schemes and Get-Rich-Quick Schemes, 
Travel/Vacation Fraud, Telephone/Pay-Per-Call Solicitation Frauds 
(including modem dialers and videotext), and Health Care Frauds.
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Health, safety, and economic injury
    The Commission also will continue to bring law enforcement actions 
in cases involving consumers' health and safety, and in cases resulting 
in significant economic injury. Just two weeks ago, for example, the 
Commission announced consent agreements in cases challenging allegedly 
deceptive advertising claims that, as a good source of calcium, Wonder 
Bread helps children's minds work better and helps children remember 
things.\20\ In a recent case involving significant economic injury, the 
Commission announced that a group of ``buying clubs'' had agreed to pay 
$9 million to settle charges by the FTC and State Attorneys General. 
The defendants were charged with misleading consumers into accepting 
trial buying club memberships and obtaining consumers' credit card 
account numbers without the consumers' knowledge or authorization from 
telemarketers pitching the buying clubs. Consumers then were enrolled 
in the clubs and charged up to $96 in yearly membership fees.\21\
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    \20\ Interstate Bakeries Corp., File No. 012 3182 I (consent 
agreement accepted subject to public comment, Mar. 6, 2002); Campbell 
Mithun LLC, File No. 012 3182 (consent agreement accepted subject to 
public comment, Mar. 6, 2002).
    \21\ FTC v. Ira Smolev, No. 01-8922-Civ-Zloch (S.D. Fla., consent 
decree entered as to all except two defendants, Nov. 28, 2001).
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    In addition, last month the FTC obtained a stipulated preliminary 
injunction in a federal district court action against the promoters of 
``Miss Cleo'' psychic services.\22\ The FTC's complaint alleges that 
the defendants misrepresented the cost of services both in advertising 
and during the provision of the services, billed for services that were 
never purchased, and engaged in deceptive collection practices, among 
other things. The FTC estimates that the defendants billed consumers at 
least $360 million in connection with this alleged scheme.
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    \22\ FTC v. Access Resource Services, Inc., No. 02-60226 Civ. Gold 
(S.D. Fla., stipulated preliminary injunction entered Feb. 20, 2002).
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Media violence, gambling, and children
    The FTC is continuing to monitor violent media directed toward 
children, and appreciates the leadership of Senators Hollings, McCain, 
Gregg, and other Subcommittee members on this issue. In a September 
2000 report, the agency reported that the entertainment industry 
targeted advertising and promotion of violent video games, movies, and 
music to children.\23\ We received requests from Congress to take a 
variety of steps to follow up on this report. In particular, this 
Subcommittee requested that the FTC continue its efforts in child 
protection through three related initiatives: consumer research and 
workshops, an underage shopper retail compliance survey, and marketing 
and data collection.\24\
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    \23\ Federal Trade Commission, Marketing Violent Entertainment to 
Children: A Review of Self-Regulation and Industry Practices in the 
Motion Picture, Music Recording & Electronic Game Industries (Sept. 
2000), available at <>.
    \24\ Conf. Rpt. on H.R. 2500 (fiscal year 2002 appropriations), H. 
Rep. No. 278, 107th Cong., 1st Sess. 162 (Nov. 9, 2001).
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    In response to these requests, in April 2001 the FTC released a 
follow-up report outlining improvements in the movie and electronic 
game industries but finding no appreciable change in the music 
industry's target marketing practices.\25\ The agency released a second 
follow-up report in December 2001, finding that the movie and 
electronic game industries had made continued improvements. The 
December 2001 report also found that the music industry had made some 
progress in disclosing parental advisory label information in its 
advertising, but the Commission's review of advertising placement 
showed that the music industry had not altered its marketing practices 
since the September 2000 report.\26\ The December report also described 
the results of a second underage shopper retail compliance survey. The 
FTC will release a third follow-up report in June 2002. In addition, as 
requested by this Subcommittee, the Commission's staff is conducting 
research on appropriate consumer education messages for parents. The 
Commission is also working to respond to the language in last year's 
appropriations bill regarding the marketing of on-line gambling sites 
to children. We will be reporting our findings and announcing a 
consumer education initiative in the near future.
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    \25\ Federal Trade Commission, Marketing Violent Entertainment to 
Children: A Six-Month Follow-Up Review of Industry Practices in the 
Motion Picture, Music Recording & Electronic Game Industries (April 
2001), available at <>.
    \26\ Federal Trade Commission, Marketing Violent Entertainment to 
Children: A One-Year Follow-Up Review of Industry Practices in the 
Motion Picture, Music Recording & Electronic Game Industries (Dec. 
2001), available at <>.
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Globalization
    The FTC will continue to respond to the challenges created by the 
increasingly global marketplace. First, the FTC will participate in 
international efforts to craft policies and self-regulatory programs to 
protect consumers. Second, we will build new international partnerships 
to tackle cross-border fraud through information sharing and 
coordinated law enforcement. An example is the FTC's participation in 
the International Marketing Supervision Network (IMSN), a network of 
consumer protection and fair trade organizations from more than two 
dozen countries. The IMSN identifies worldwide enforcement issues, 
facilitates the sharing of information about cross-border commercial 
activities affecting consumer interests, and encourages international 
cooperation among law enforcement agencies. Another example is 
econsumer.gov, a joint effort by the United States and fifteen other 
countries to gather and share cross-border e-commerce complaints.
    Third, to meet the challenge of identifying critical consumer 
issues in the global marketplace, the FTC plans to continue to use its 
Consumer Information System, a consumer complaint database, to identify 
and target the most serious consumer problems. By sharing fraud 
complaints with a broad group of law enforcement partners through the 
secure Consumer Sentinel Web site, the FTC enhances the effectiveness 
of law enforcement agencies across the United States, Canada, and 
Australia. The FTC also will continue training enforcement officials on 
how to bring cases involving new technologies. Since fiscal year 2001, 
the FTC has educated more than 1,750 law enforcement personnel from 
more than 20 countries, 38 states, 23 U.S. federal agencies, and 19 
Canadian agencies on use of the fraud database.
Consumer outreach
    Just as consumer outreach is a key component of the FTC's efforts 
to protect consumers' privacy, the FTC will continue to place great 
emphasis on consumer outreach involving fraud and deception. Our 
consumer education programs provide two key benefits. First, they 
inform consumers of their rights under various consumer protection 
laws. Second, they give consumers the information they need to identify 
and avoid fraud and deception in the marketplace. In fiscal year 2002, 
the FTC will use national and local media, state and local government 
agencies, business and consumer groups, and the ftc.gov and 
consumer.gov Web sites to reach millions of consumers across the 
country. The FTC also will continue to reach consumers through its 
Consumer Response Center and the hundreds of consumer protection 
organizations that distribute FTC materials and provide links to the 
FTC Web site. In fiscal year 2001, the FTC issued 77 publications, 
distributed more than 5.4 million print publications, and logged more 
than 9.6 million accesses of its publications on the ftc.gov Web site. 
The FTC also will continue to host workshops to highlight the FTC's 
activities and resources for Congressional district office staff. By 
July of this year, the FTC will have held workshops in each of its 
regional offices for all Congressional district offices.
                    maintaining competition mission
Merger enforcement
    Merger enforcement will continue as a major focus of the 
competition agenda for fiscal year 2003. Stopping mergers that lessen 
competition ensures that consumers will have the benefit of lower 
prices and greater choice in their selections of goods and services. 
The recently revised Hart-Scott-Rodino Act (``HSR'') \27\ filing 
threshold, coupled with economic conditions during the last fiscal 
year, reduced the number of reportable filings by approximately two-
thirds from their peak. Reported mergers, however, continue to increase 
in scope, complexity, and size. In fiscal year 2001 alone, the total 
value of all reported mergers was over $1 trillion. Large, multifaceted 
transactions--the ones still subject to HSR--are the ones most likely 
to raise antitrust issues, and typically involve a number of separate 
product and geographic markets, each requiring analysis.\28\ Further, 
mergers in high tech markets require careful analysis, because new 
technical issues continue to emerge.
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    \27\ 15 U.S.C. Sec. 18a, as amended, Pub. L. No. 106-553; 114 Stat. 
2762 (2000).
    \28\ For example, the FTC's settlement agreement in Chevron Corp./
Texaco Inc., No. C-4023 (Jan. 2, 2002) (consent order), provided for 
relief in (1) retail gasoline markets in numerous metropolitan areas in 
various parts of the country, including Alaska and Hawaii, the western 
United States (including Arizona, Idaho, Nevada, New Mexico, Oregon, 
Utah, Washington, and Wyoming), and the southern United States 
(including Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, 
North Carolina, Oklahoma, Tennessee, Texas, Virginia, and West 
Virginia); (2) marketing of CARB gasoline in California; (3) refining 
and bulk supply of CARB gasoline for sale in California; (4) refining 
and bulk supply of gasoline and jet fuel in the Pacific Northwest; (5) 
the bulk supply of RFG II gasoline into St. Louis; (6) terminaling of 
gasoline and other light petroleum products in several metropolitan 
areas in Arizona, California, Mississippi, and Texas, and on four 
Hawaiian islands; (7) transportation of crude oil from California's San 
Joaquin Valley; (8) transportation of crude oil in the eastern Gulf of 
Mexico; (9) pipeline transportation of natural gas in the Central Gulf 
of Mexico; (10) natural gas fractionating in Texas; and (11) marketing 
of general aviation gasoline in 14 states (Alaska, Alabama, Arizona, 
California, Florida, Georgia, Idaho, Louisiana, Mississippi, Nevada, 
Oregon, Tennessee, Utah, and Washington).
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    We will devote resources to searching for mergers that are no 
longer subject to premerger reporting requirements under HSR, but that 
could be anticompetitive. While the revised HSR filing threshold 
eliminated the reporting requirement for smaller mergers, it did not 
change the substantive standard of legality under section 7 of the 
Clayton Act.\29\ The agency will be alert to smaller mergers that could 
harm consumers by substantially lessening competition. Since the fiscal 
year began, the FTC has opened investigations into mergers that were 
not reportable under the HSR Act, and has issued an administrative 
complaint challenging one merger that fell below the amended HSR 
threshold.\30\
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    \29\ 15 U.S.C. Sec. 18.
    \30\ MSC.Software Corp., No. D-9299 (complaint issued Oct. 10, 
2001) (alleging that a dominant supplier of a popular type of advanced 
computer-aided engineering software acquired its only two competitors).
---------------------------------------------------------------------------
    Litigation to challenge anticompetitive mergers requires 
significant resources. While the FTC resolves most merger cases through 
settlement (this fiscal year we have obtained settlements of ten 
administrative or court complaints),\31\ it is sometimes necessary to 
litigate challenges to certain proposed or consummated mergers. Since 
the fiscal year began, the Commission has authorized the staff to file 
complaints in five merger cases, three of which are in litigation \32\ 
and two of which have settled.\33\ The FTC must have the resources and 
expertise needed to support effective challenges in complex and high-
stakes cases to protect consumers from higher prices, limited choices, 
and thwarted innovation.
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    \31\ This fiscal year, the Commission has issued final consent 
orders in the following eight merger cases: Ina-Holding Schaeffler KG/
FAG Kugelgischer Georg Schafer AG, No. C-4033 (Feb. 15, 2002); Nestle 
Holdings, Inc./Ralston Purina Co., No. C-4028 (Feb. 8, 2002); Diageo 
p.l.c./Vivendi Universal S.A., No. C-4032, (Feb. 8, 2002); Chevron 
Corp./Texaco Inc., No. C-4023 (Jan. 2, 2002); Valero Energy Corp./
Ultramar Diamond Shamrock Corp., No. C-4031 (Feb. 19, 2002); 
Koninklijke Ahold N.V./Bruno's Supermarkets, Inc., No. C-4027 (Jan. 16, 
2002); Metso Oyj/Svedala Industri AB, No. C-4024 (Oct. 23, 2001); 
Airgas, No. C-4029 (Dec. 18, 2001). On March 7, 2002, the Commission 
accepted subject to public comment a settlement in the matter of 
Deutsche Gelatine-Fabriken Stoess AG/Goodman Fielder Ltd., File No. 
011-0117. In addition, the Commission obtained a consent decree in the 
matter of Hearst's acquisition of J.B.Laughery. FTC v. The Hearst 
Trust, No. 1:01CV00734 (D.D.C., Dec. 18, 2001).
    \32\ MSC. Software, supra n. 30; Chicago Bridge Iron Co., Inc., 
Dkt. No. 9300 (complaint issued Oct. 25, 2001); Libbey, Inc./Newell 
Rubbermaid, Inc., No. 1:02CV00060 (D.D.C., complaint filed Jan. 14, 
2002).
    \33\ Diageo/Vivendi and Deutsche Gelatine-Fabriken Stoess/Goodman 
Fielder, supra n. 31.
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Streamlining the merger review process
    The FTC has been working with the Antitrust Division at the 
Department of Justice to establish procedures to make the HSR merger 
review process more efficient and transparent. The FTC has focused on 
several areas for streamlining, including:
  --Electronic Premerger Filing.--As part of an overall movement to 
        make government more accessible electronically, the FTC, 
        working with DOJ, will accelerate its efforts in fiscal year 
        2003 to develop an electronic system for filing HSR premerger 
        notifications. E-filing will reduce filing burdens for 
        businesses and government and create a valuable database of 
        information on merger transactions to inform future policy 
        deliberations.
  --Burden Reduction in Investigations.--The agencies have taken steps 
        to reduce the burden in document productions responsive to 
        requests for additional information under the HSR Act (``second 
        requests''). In response to legislation amending the HSR 
        Act,\34\ the FTC amended its rules of practice to incorporate 
        new procedures. The rule requires Bureau of Competition staff 
        to schedule conferences to discuss the scope of a second 
        request with the parties and also establishes a procedure for 
        the General Counsel to review the request and rule promptly on 
        any remaining unresolved issues.\35\ Measures adopted include a 
        process for seeking modifications or clarifications of second 
        requests, and expedited senior-level internal review of 
        disagreements between merging parties and agency staff; 
        streamlined internal procedures to eliminate unnecessary 
        burdens and undue delays; and implementation of a systematic 
        management status check on the progress of negotiations on 
        second request modifications. In addition, we recently have 
        announced that agency staff will participate in a series of 
        discussions with the bar and other interested parties to elicit 
        suggestions on further improvements to the second request 
        process, and to provide information on our investigation 
        procedures.
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    \34\ 15 U.S.C. Sec. 18a, as amended, Pub. L. No. 106-553; 114 Stat. 
2762 (2000).
    \35\ 16 CFR Sec. 2.20. To date, two appeals have been filed under 
this procedure; both have been completed.
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  --Improved FTC/DOJ Clearance Process.--The achievement of an 
        efficient division of work between the two federal antitrust 
        enforcement agencies has occupied the energies of the 
        Department of Justice and the FTC since the Commission began 
        operating in March 1915. For many years, the two agencies have 
        allocated matters mainly on the basis of their relative 
        expertise. For the most part, this arrangement has worked 
        smoothly. In the last decade, however, the convergence of 
        industries increasingly has blurred the lines between the 
        agencies' historical areas of responsibility. Consequently, 
        clearance disputes have become both more common and, in the 
        case of major clearance disputes, more contentious.\36\ On 
        average, from 1982 through 1989, 10 clearance disputes arose 
        each year. In contrast, between 1990 and 2001, the annual 
        number of contested matters has equaled or exceeded 45, and in 
        three years exceeded 100. On average, 83 clearance disputes 
        occurred annually during this period.
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    \36\ Perhaps the most notable example of industry convergence and 
resulting clearance disputes concerns electricity and natural gas. 
Historically, electricity matters have been handled by the DOJ, and 
natural gas matters have been handled by the FTC. Convergence of these 
industries has led to contentious clearance disputes. Each merger of an 
electricity company and a natural gas company has been hotly contested 
by the agencies. Disputes over these convergence mergers have accounted 
for approximately 10 percent of all clearance disputes since the 
beginning of fiscal year 2000. Moreover, to resolve clearance disputes 
generally, it became increasingly necessary to employ conditions--such 
as Chairman Pitofsky's agreement that, in return for receiving 
clearance to investigate the matter, the FTC would not cite its 
expertise in AOL/Time Warner as a source of expertise in future 
clearance disputes.
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  --These disputes result in significant delays. Delays averaging three 
        weeks occurred in 24 percent of the matters on which either 
        agency sought clearance from the beginning of fiscal year 2000 
        through January 28, 2002. Cumulatively, these investigations 
        were delayed by 4,521 business days--more than 17 years. During 
        this time, neither agency could investigate potentially serious 
        allegations of illegal behavior.\37\ Recognizing the severity 
        of the problem, FTC Chairman Robert Pitofsky and Assistant 
        Attorney General Joel Klein attempted to negotiate a global 
        clearance agreement for over a year, but could not reach 
        consensus.
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    \37\ The number of disputes has decreased somewhat recently, 
particularly since Chairman Muris and Charles James assumed office last 
summer and resolved a clearance dispute that had lasted for more than a 
year. In effect, they declared a cease-fire in the clearance war while 
attempting to negotiate a peaceful settlement. In any event, the 
Commission believes that its scarce resources should be spent on 
investigating allegations of misconduct, and in developing appropriate 
expertise, rather than in fighting with the Antitrust Division. 
Moreover, the recent decline in clearance disputes may reflect the 
recent decline in merger filings. Changing market conditions could lead 
to an increase in merger filings and, consequently, an increase in 
clearance disputes.
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  --Consistent with his authority,\38\ Chairman Muris negotiated a new 
        clearance agreement with Assistant Attorney General for 
        Antitrust Charles James.\39\ The new agreement will allocate 
        matters between the two agencies more efficiently, rationally, 
        and predictably. This agreement allocates primary areas of 
        responsibility for antitrust enforcement on an industry-wide 
        basis, and implements expedited clearance dispute resolution 
        procedures. The new agreement will enhance the quality of 
        antitrust enforcement, and will benefit businesses, consumers, 
        and taxpayers.\40\ Moreover, an agreement that allocates 
        primary areas of enforcement responsibility enjoys overwhelming 
        support within the antitrust and business communities.\41\ The 
        clearance agreement requires that the agency heads review the 
        allocation of industries in four years to determine whether the 
        goal of efficiently and rationally allocating competition 
        matters is being achieved.
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    \38\ See Statement of Commissioners Orson Swindle and Thomas B. 
Leary on the Memorandum of Agreement Concerning Clearance Procedures 
for Investigations (Jan. 18, 2002) (stating that ``We are not troubled 
by the process by which the Agreement was fashioned. Not only was 
negotiation of the Agreement with Assistant Attorney General James the 
prerogative of Chairman Muris; it was also simply the most effective 
way to get the job done. Historically, the agencies employed a 
procedure for dealing with clearance issues that was based on a case-
by-case approach, with the Chairman and the Assistant Attorney General 
making the ultimate decision when necessary (with little or no 
involvement by other Commissioners). This long course of interagency 
discussion and negotiation then established `precedent' for allocating 
antitrust review responsibilities between the agencies--a kind of 
`private law' for the kinds of matters that the Agreement was designed 
to describe publicly. It is proper that the agency heads were the ones 
to devise a new arrangement that would have injected greater efficiency 
and clarity into the allocating system--a system in which the Chairman, 
and not other Commissioners, will continue to have operational 
responsibilities.''), available at <>.
    \39\ See Memorandum of Agreement Between the Federal Trade 
Commission and the Antitrust Division of the United States Department 
of Justice Concerning Clearance Procedures for Investigations, 
available at <>.
    \40\ See Statement of Commissioners Orson Swindle and Thomas B. 
Leary on the Memorandum of Agreement Concerning Clearance Procedures 
for Investigations (Jan. 18, 2002), supra n.38; ``FTC Releases 
Antitrust Clearance Process Documents,'' FTC Press Release (Feb. 27, 
2002), available at <>; 
and ``FTC and DOJ Announce New Clearance Procedures for Antitrust 
Matters,'' FTC Press Release (Mar. 5, 2002), available at <>.
    \41\ See Letter from Robert Pitofsky, et al. to Timothy J. Muris 
and Charles A. James (Feb. 4, 2002), available at <>; Letter from Roxane C. Busey, 
Chair, Section of Antitrust Law, American Bar Association, to Timothy 
J. Muris and Charles A. James (Jan. 23, 2002), available at <>; and Letter from the 
Business Roundtable, the National Association of Manufacturers, and the 
U.S. Chamber of Commerce to Timothy J. Muris (Feb. 25, 2002), available 
at <>. Of course, 
most of the signatories to these three letters did not possess detailed 
knowledge of the recent, industry-specific expertise of the FTC and the 
DOJ. Accordingly, they could not, and did not, opine on specific 
allocations between the FTC and the DOJ. Some consumer groups, however, 
have expressed concerns about the agreement. See Jeffrey Chester, 
Center for Digital Democracy, ``FTC-DOJ Clearance Agreement Will Hurt 
Consumers,'' available at <>; Letter from Andrew Jay Schwartzman, President and 
CEO, Media Access Project, to Senator Ernest F. Hollings (Jan. 22, 
2002), available at <>.
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  --In response to concerns about the agreement expressed by the 
        Chairman of this Subcommittee, the agencies have provided 
        information on clearance procedures, the historical allocation 
        of matters, and clearance delays. We will, of course, provide 
        any additional information that the Subcommittee desires.
Nonmerger enforcement
    The FTC will continue the trend, begun last year, to devote more 
resources to nonmerger enforcement. In fiscal year 2001, the agency 
opened 56 nonmerger investigations, more than double the number of such 
investigations begun in the previous year, when deadline-sensitive HSR 
merger investigations siphoned away resources allocated for nonmerger 
work. Thus far in fiscal year 2002, the agency has opened 15 nonmerger 
investigations. The major focus of our nonmerger work will concern 
activities among competitors, reflecting the broad consensus in 
antitrust policy that horizontal arrangements that fix prices or 
restrict output are the ones most likely to harm consumers.
    Efforts in this area are producing benefits for consumers. Just 
last month, the FTC settled litigation against American Home Products 
(AHP) to resolve charges that Schering-Plough Corporation (Schering) 
illegally agreed to pay AHP millions of dollars in exchange for AHP's 
agreement to delay introduction of a generic potassium chloride 
supplement, which would have competed with Schering's branded K-Dur 20, 
used to treat patients with low potassium, which can lead to cardiac 
problems.\42\ In another recent matter, the agency achieved a 
settlement with one defendant in a price-fixing case last fiscal year, 
and is presently in litigation with the other defendant.\43\
---------------------------------------------------------------------------
    \42\ American Home Products Corporation, Dkt. No. 9297 (consent 
agreement accepted subject to public comment, Feb. 19, 2002). 
Complaints against Schering and Upsher-Smith are currently before an 
FTC administrative law judge. Schering-Plough Corporation, Upsher-Smith 
Laboratories, Inc., Dkt. No. 9297 (complaints filed Apr. 2, 2001).
    \43\ In September of 2001, the FTC entered into a consent agreement 
with Warner Communications to resolve charges that Warner and Polygram 
illegally agreed to fix prices for audio and video products featuring 
``The Three Tenors.'' Warner Communications, Inc., No. C-4025 (Sept. 
17, 2001) (consent order). The case against Vivendi Universal S.A., the 
successor corporation to Polygram, is currently before an FTC 
administrative law judge, Dkt. No. 9298.
---------------------------------------------------------------------------
    The settlement with AHP marks the third instance in which the FTC 
has reached a settlement with generic or branded drug manufacturers 
regarding alleged anticompetitive conduct designed to delay generic 
entry.\44\ A major portion of the American health care dollar purchases 
prescription drugs, and we will continue our efforts to prevent firms 
from engaging in anticompetitive practices that raise drug prices. In 
particular, we will strive to ensure that anticompetitive practices do 
not delay market entry of generic drugs, which cost less than name-
brand pharmaceuticals. We will seek to ensure that protections provided 
to drug innovators under the Hatch-Waxman Act are not abused to the 
detriment of consumers. As you know, Hatch-Waxman was designed to 
increase the flow of new pharmaceuticals into the marketplace by 
carefully balancing two public policy objectives: encouraging vigorous 
competition from generic drugs, while maintaining incentives to invest 
in the development of innovator drugs.
---------------------------------------------------------------------------
    \44\ The other two cases are Abbott/Geneva (Abbott Laboratories, 
No. C-3945 (May 22, 2000), and Geneva Pharmaceuticals, Inc., No. C-3946 
(May 22, 2000) (consent orders)) and Hoechst Marion Roussel, Inc./Andrx 
Corp., No. C-9293 (May 11, 2001) (consent order).
---------------------------------------------------------------------------
    In addition to agreements between makers of brand-name drugs and 
makers of generics, under which the generic entrant is essentially paid 
not to compete, the FTC continues to investigate unilateral conduct by 
branded manufacturers designed to forestall competition. For example, 
some branded manufacturers list additional patents in the FDA's 
``Orange Book,'' often shortly before their original patents expire, 
which sets the stage for launching patent infringement suits against 
generic drug firms poised to enter the market. Under Hatch-Waxman, such 
litigation triggers an automatic 30-month stay on FDA approval of the 
generic drug. If the listings do not meet statutory and regulatory 
requirements, their inclusion in the Orange Book may constitute 
unlawful restraints on competition.\45\
---------------------------------------------------------------------------
    \45\ The FTC recently filed an amicus brief in the In Re Buspirone 
Patent Litigation that addresses some of these issues. The Buspirone 
litigation concerns whether Bristol-Myers Squibb Company (``BMS'') 
violated Section 2 of the Sherman Act by making false filings with the 
U.S. Food and Drug Administration that caused BMS's newly issued patent 
to be wrongfully listed in the FDA's Orange Book in order to block 
generic competition to its branded drug, BuSpar. BMS argued that a 
claim based on its allegedly improper filing of a patent in the FDA's 
Orange Book could not proceed because its actions were entitled to 
immunity under the Noerr-Pennington doctrine. The Noerr doctrine 
immunizes genuine petitioning activity directed at persuading 
government bodies to adopt a particular course of action. In its brief, 
the Commission argued that Orange Book filings, even when made 
properly, are decidedly not ``petitions.'' Rather, they are mechanical, 
informational filings that do not trigger any exercise of legal or 
discretionary judgment by the FDA and do not call for any agency 
decision-making. FDA's role in receiving and publishing Orange Book 
information is simply ministerial. As such, Orange Book filings are 
akin to tariff filings, which have consistently been held not to 
constitute immunized Noerr petitioning. The district court recently 
issued a decision on a motion to dismiss in this case that accepted the 
arguments made by the Commission and squarely held that Orange Book 
filings are not petitioning under Noerr. In Re Buspirone Patent 
Litigation, MDL Dkt. No. 1410, 2002 U.S. Dist. LEXIS 2625, (S.D.N.Y., 
motion to dismiss granted in part and denied in part, Feb. 14, 2002). 
The Commission's amicus brief is available at <>.
---------------------------------------------------------------------------
    To uncover whether strategies such as these are isolated examples 
or represent patterns of anticompetitive conduct, the Commission has 
undertaken a study, as requested by Representative Henry Waxman, to 
provide a more complete picture of how generic competition has 
developed under the Hatch-Waxman Act. The Commission has issued nearly 
100 orders to innovator and generic drug companies to obtain documents 
related to the issues identified through investigations and to identify 
any other anticompetitive strategies that may exploit certain Hatch-
Waxman provisions. The facts obtained through this study may provide a 
basis for policy recommendations in this area.
Targeting resources for consumer impact
    In both its merger and nonmerger programs, the FTC will continue to 
focus competition resources in sectors of the economy that have a 
substantial impact on consumers' wallets. Because of the important cost 
implications for consumers, one critical area is health care. Health 
related products and services account for over 13 percent of gross 
domestic product, up from 10.9 percent in 1988.\46\ In addition to 
preserving opportunities for generic drugs to compete, the FTC's 
enforcement agenda also includes agreements among doctors and other 
health professionals to restrict competition, codes of conduct 
containing anticompetitive provisions, and mergers of hospitals and 
suppliers of health care products.
---------------------------------------------------------------------------
    \46\ Katharine Levit et al., ``Inflation Spurs Health Spending in 
2000,'' 21 Health Affairs 172 (Jan-Feb 2002).
---------------------------------------------------------------------------
    Another critical sector is energy. Representing a significant 
portion of the total U.S. economic output, energy is a vital input to 
virtually all parts of the economy. The FTC has garnered considerable 
experience with energy issues over the past two decades, investigating 
numerous oil mergers and bringing cases in appropriate instances. 
Recently, the FTC obtained two significant settlements to prevent loss 
of competition resulting from the Chevron/Texaco \47\ and Valero/
Ultramar Diamond \48\ mergers.\49\ To understand current issues 
involving energy markets, the agency has recently announced that we 
will hold a second public conference to examine factors that affect 
prices of refined petroleum products in the United States. The agency 
held a preliminary conference on the subject last fiscal year. In 
addition, the FTC will continue to investigate pricing behavior, where 
appropriate, in energy markets. In just the past year, we investigated 
various price spikes or pricing anomalies in petroleum products. Staff 
also investigated the gasoline price spikes in the aftermath of the 
September 11th terrorist attacks. Thus far, we have found no evidence 
of collusive activity in violation of the antitrust laws. Commission 
investigations nonetheless both have a deterrent effect on wrongdoing 
and provide the basis for action when anticompetitive practices have 
occurred.
---------------------------------------------------------------------------
    \47\ Chevron Corp./Texaco Inc., No. C-4023 (Jan. 2, 2002) (consent 
order).
    \48\ Valero Energy Corp./Ultramar Diamond Shamrock Corp., No. C-
4031 (Feb. 19, 2002) (consent order).
    \49\ Additionally, in recent years, the agency has achieved 
significant settlements, requiring divestitures of oil fields, 
refineries, pipelines, and gas stations to prevent loss of competition 
resulting from the Exxon/Mobil and BP/ARCO mergers. Exxon Corp./Mobil 
Corp., No. C-3907 (January 26, 2001) (consent order) and BP Amoco 
p.l.c./Atlantic Richfield Co., No. C-3938 (Aug. 29. 2000) (consent 
order).
---------------------------------------------------------------------------
    Yet another sector of the economy involves high tech industries. 
Our economy increasingly has become more knowledge-based; for some 
companies, patent portfolios represent far more valuable assets than 
manufacturing or other physical facilities. Thus, an increasing number 
of the FTC's competition matters require the application of antitrust 
law to conduct relating to intellectual property. Both antitrust and 
intellectual property law share the common purposes of promoting 
innovation and enhancing consumer welfare. On occasion, however, there 
have been tensions in how to manage the intersection between the 
doctrines, as well as questions about how best to spur innovation 
through competition and intellectual property law and policy. The FTC 
and DOJ currently are holding a series of hearings on competition and 
intellectual property law and policy to help understand the interplay 
between intellectual property and antitrust law.\50\ Issues to be 
addressed in the hearings include standard-setting, cross-licensing and 
patent pools, unilateral refusals to deal, proliferation of patents, 
and the changing scope of patents. In addition to the hearings, we 
continue to pursue antitrust investigations involving issues concerning 
intellectual property.
---------------------------------------------------------------------------
    \50\ See ``FTC/DOJ Hearings to Highlight Further Business and 
Economic Perspectives on Competition and Intellectual Property 
Policy,'' FTC Press Release (Mar. 12, 2002), available at <>; ``FTC/DOJ Hearings to 
Highlight Business and Economic Perspectives on Competition and 
Intellectual Property Policy,'' FTC Press Release (Feb. 15, 2002), at 
<>; ``FTC/DOJ Hearings to 
Focus on the Implications of Competition and Patent Law and Policy,'' 
FTC Press Release (Jan. 30, 2002), at <>; ``Muris Announces Plans for Intellectual Property 
Hearings,'' FTC Press Release (Nov. 15, 2001), at <>.
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Outreach efforts
    The FTC will continue competition outreach to various 
constituencies during fiscal year 2003. Among these efforts, the agency 
strives to increase understanding and awareness of important emerging 
industries and issues, such as business-to-business (B2B) and business-
to-consumer (B2C) electronic commerce. The FTC also increases awareness 
of antitrust law through guidance to the business community; outreach 
efforts to Federal, state and local agencies, business groups, and 
consumers; the development and publication of antitrust guidelines and 
policy statements; speeches; and publications. The agency will assess 
the need for additional workshops, and whether its ongoing outreach 
efforts effectively target audiences and address critical issues in the 
marketplace.
                   needed resources--fiscal year 2003
    To accomplish our mission in fiscal year 2003, the FTC requests 
$176,509,000 and 1,074 FTE. The increase of $20,527,000 over fiscal 
year 2002 includes:
  --$7,352,000 for base expenses (including pay raises, non-pay 
        inflation, increased rental of space, and increased Consumer 
        Response Center contract costs);
  --$5,000,000 for expenses related to generating a National Do-Not-
        Call List to protect consumers' privacy;
  --$3,265,000 for systems support and the increased physical security 
        for staff; and
  --$4,910,000 to comply with proposed legislation (to require agencies 
        to pay the full Government share of accruing costs of 
        retirement for current CSRS employees and post-retirement 
        health benefits).
    The FTC's fiscal year 2003 budget request is calculated based on 
using two sources of offsetting collections: an estimated $173,509,000 
from HSR Premerger Filing Fees and an estimated $3,000,000 from a new 
Do-Not-Call fee. The HSR fee estimate is based on a three-tiered filing 
rate structure mandated by Congress, with an effective date of February 
1, 2001. The new Do-Not-Call fee would be assessed, collected, and used 
to cover the costs of developing, implementing, and maintaining a 
national database of telephone numbers of consumers who choose not to 
receive telephone solicitations from telemarketers. This new fee 
structure will be subject to notice and comment as part of a rulemaking 
process.
    Mr. Chairman, the FTC appreciates your past support and that of 
this Subcommittee. I would be happy to answer any questions that you 
and other Members may have about the FTC's budget request and programs.

    Senator Hollings. Mr. Chairman, let us, like we have in the 
law, what we call a demurrer, where we assume everything you 
say is very true, you still do not state a cause of action. 
Wherein do you think you get the authority to change the 
authorizing statute?
    Mr. Muris. Mr. Chairman, I do not believe we have changed 
any authority. The----
    Senator Hollings. Oh, yes, you have. You just testified to 
it.
    Mr. Muris. Well, but----
    Senator Hollings. You said, look, we have to check one with 
the other and we are going to stop all that checking one with 
the other and so we are just going to have an understanding 
that we are not going to have any check on it and the Justice 
Department will have the check.
    Mr. Muris. No, sir, I do not think that is what we have 
done. What we have done is to explain that the clearance 
process, which has gone on for decades, has been based on 
experience. We have taken that experience and, for the first 
time, told the world this is what the experience means. The 
clearance agreement specifies which cases will be done by DOJ 
and which will be done by FTC.
    The DOJ has the experience in media. Even if we had never 
entered the agreement, the DOJ would still do the media cases. 
Under the clearance process we have to clear agreements with 
each other. Under the law only one agency can investigate a 
merger. We must have a process to make that determination.
    Senator Hollings. Then we can change that law, but we 
cannot abandon the public interest envisioned in the Federal 
Trade Commission. You have the authority over anticompetitive, 
deceptive, unfair trade practices, protecting consumers, public 
interest for general authority with respect to protecting the 
public interest, not necessarily the violation of an antitrust 
law. It could be anticompetitive, it could be deceptive, it 
could be unfair, but not in violation of antitrust, and so you 
have got to look at it.
    You are right, and that was the one point being checked 
out. We would have more confidence in what you have just said. 
On the one hand, we see here that the release with respect to 
the American Bar Association, speaking at the American Bar 
Association conference in Washington, Jones, Day, Reavis, and 
Pogue partner Joe Simms said that the FTC pushed for merger 
conditions that had nothing to do with any real antitrust 
violations. He did not talk about just one person to review and 
investigate it, not Joe Simms. He said, look, I am pushing for 
merger conditions that had nothing to do with any real 
antitrust violations.
    He also contended that the agency based its open access and 
interactive TV conditions on almost entirely unsupported 
theoretical claims that the new AOL-Time Warner colossus 
already controlled high-speed data, ITV and instant messaging 
markets and would move quickly to crush the competition in 
them. And so he sat about changing it and we have a headline in 
the Wall Street Journal, ``Lawyer's Ties Questioned in AOL 
Accord,'' nothing about this one agency investigating, mind 
you.
    I quote, ``An attorney general representing Time Warner 
helped write a controversial agreement between two agencies, 
dividing antitrust enforcement that steers future AOL merger 
reviews to the Justice Department Antitrust Division headed by 
one of his former law partners. Joe Simms, an antitrust expert 
and partner in Jones, Day, Reavis, and Pogue here was solicited 
by the Federal Trade Commission and Justice Department on how 
the two agencies should divide responsibility.'' I understand 
James is the man doing the soliciting, his former law partner--
``how the two agencies should divide responsibility for 
antitrust reviews.'' Mr. Simms had represented AOL against the 
Federal Trade Commission in its 2000 review of the merger with 
Time Warner and continues to represent the company.
    That is just outrageous. We do not talk about one reviewing 
and everything. I have been up here with the Federal Trade 
Commission for 35 years, never heard of what you just related 
in your testimony. We know what happened. I can tell you here 
and now, Mr. Chairman, that we know how to act. I studied my 
humility under Mendell Rivers down there and when he was over 
there in charge of Armed Services.
    So it is not authorized by law. If you think the problem is 
as you have stated it, the proper thing to do is not to go to a 
losing attorney with his former law partner and rewrite 
memorandums of understanding. Even if they had merit, we would 
not believe it. That is totally improper.
    What we will have to do is, by gosh, just come here and 
just cut that budget around so that we get their attention, 
whether we do away with the political positions, repeal 605, 
reprogramming authority to your Federal Trade Commission, or 
actually I am studying to see whether or not legally we can cut 
the pay. Sometimes when you cut pay, you get their final 
attention. But this idea, this administration has run amuck. We 
come up here, and to take the COPS program that is working and 
put it over to a relief agency, FEMA. We take the sea grant 
that you have just heard about and put it over into research 
that has nothing to do with education and so forth and the 
culture that we have developed there.
    We take the Border Patrol and everything else and how that 
is going to be jumbled up, I do not know, but the IMF has got a 
problem with the Immigration and Naturalization Service, so we 
have that lined up. Customs is working well. The Border Patrol 
is working well. But they are either going to bring Customs to 
Justice or put it all over to Customs, and they do all of this 
without even talking to the people who have been working in 
these disciplines, specifically you in the Federal Trade 
Commission. You just got there. We have been there a long, long 
time, and we have got to authorize it in committee and no one 
has mentioned any of this problem to us at the authorizing 
committee level, period.
    If you care to comment, we would be delighted to hear it.
    Mr. Muris. Yes, sir, Mr. Chairman. Mr. Chairman, I first 
started as a staff attorney at the Federal Trade Commission 28 
years ago. This is the fourth job I have had at the Federal 
Trade Commission. I have watched the deterioration of the 
clearance process to where, when I arrived, we had a matter 
that had been going on for over 1 year. I probably spent 2 full 
days, not in doing the public's business, but in trying to 
fight with the Antitrust Division over which one of us would do 
the public's business. I think it is better if we do not fight 
and if we investigate anticompetitive conduct. But let me 
respond to a few of your specific comments.
    There is nothing that prevents us, to the extent we have 
jurisdiction, and there are some areas where jurisdiction is 
weak, from investigating deceptive or unfair practices beyond 
the antitrust laws of any media company. The law that was 
involved in AOL-Time Warner is Section 7 of the Clayton Act. It 
is an antitrust law. Both agencies apply the exact same law and 
the exact same standard. I think Joe Sims was having sour 
grapes because he did not like Bob Pitofsky's interpretation of 
Section 7. But the Commission did not say that it was applying 
anything other than Section 7. And Section 7(a), which is an 
accompaniment to Section 7, requires that only one agency 
engage in these detailed investigations of mergers. It is the 
law.
    Two more points, one on Joe Sims. If Joe Sims was really 
interested in his pocketbook, he would have recommended that 
matters be sent to the FTC, not to the DOJ, because his former 
partner is recused from matters for 2 years. I was an ``of 
counsel'' to a law firm, and I know that law firm has lost 
business before the FTC because of my recusal.
    Finally, I do not understand how we could have violated 
reprogramming in this media matter area because with or without 
this agreement, the Department of Justice has much more 
experience than we do, and would do media mergers.
    Senator Hollings. Most respectfully, you have had 28 years, 
I have had 35 years, and perhaps we ought to assign you to the 
CIA because you have kept what you have pointed out top secret. 
I am also chairman of the authorizing committee and never heard 
what you just stated. So the procedure in Government is for 
this particular Appropriations Committee to appropriate in 
accordance with authority, not memorandums of understanding, 
and with that in mind, we will act accordingly, I can tell you 
that, if you folks go forward with a so-called memorandum of 
understanding.
    Senator Reed.
    Senator Reed. Thank you, Mr. Chairman, and thank you, 
Commissioner. As we have discussed previously, I have also 
concerns about the allocation of these different functions. You 
return again and again to the issue of experience, and I ask 
these questions not rhetorically but for information.
    It seems to me that Mr. Pitofsky's sort of aside that he 
would not count the experience of the AOL-Time Warner merger is 
irrelevant. In fact, the FTC was involved in that, probably one 
of the more complicated and one of the largest merger 
applications in the media companies, embracing not just one 
media but several, the Internet, television, you name it, they 
have got it there, I think. So I think if the benchmark is 
experience, certainly FTC is not without experience.
    And just again, for information, the six other cases that 
you referred to the DOJ, either for the record or now, could 
you tell us, what were those cases that the DOJ has on their 
side for experience?
    Mr. Muris. Well, there is AT&T's acquisition of Media One, 
AT&T's acquisition of TCI. There is the Primestar acquisition 
of DBS and MCI. They are currently reviewing Echostar-DirecTV. 
They are also looking at another major matter involving the 
same sets of issues.
    Part of our problem, Senator, is a lot of these issues 
arrive at the intersection of telephones and cable. They 
involve issues about broadband access and how to regulate that. 
We do not have jurisdiction over common carriers at the FTC. I 
think we should have jurisdiction. I have recommended that. But 
because we do not have jurisdiction over common carriers, the 
Justice Department Antitrust Division for decades has done 
these sorts of cases. It was the Antitrust Division that broke 
up AT&T. If you look just on a simple experience basis, they 
have done much more.
    We do have experience, but because the law requires the two 
of us to agree somehow, I am in the position of all past 
chairmen and heads of the Antitrust Division of honoring past 
promises. I agree that Chairman Pitofsky's promise does not 
seem to make a lot of sense, but the process had become so 
confrontational and fractious that those were the sorts of 
promises needed to keep the system going.
    No chairman who I have known would violate a promise like 
that of his predecessor, and I feel that I cannot violate it, 
either. But even if I did, the Antitrust Division has a lot 
more experience.
    Obviously, if the Congress wants to change the way media 
and telecom have been handled and give it to the FTC, we would 
love to be able to do that. But we have two antitrust agencies 
enforcing one statute, in this case, in terms of mergers, and 
because the law says only one of us can do it, we have to come 
to some sort of an agreement.
    Senator Reed. I will defer to the chairman in his 
understanding of the law and, indeed, the debate between the 
two of you. But I would note that, apparently, there are some 
other matters that you have looked into under mergers, Time 
Warner-Bell South 2001, the preliminary Section 7 
investigation. Is that something that FTC pursued?
    Mr. Muris. The rules for clearance are that only 
substantial investigations count. The FTC has only two 
substantial investigations. One was a very small deal involving 
so-called cable overbuild, where the Commission had a sensible 
case. It was small. It brought relief to several thousand cable 
subscribers. Preliminary investigations under the 1993 
clearance agreement are not significant and do not count.
    Senator Reed. It just, again, it seems to me that if there 
is statutory interpretation, that I will not opine on because I 
do not have the expertise, but if the touchstone is experience, 
I think, one, the FTC has it. Two, you can get it if you need 
it. So I do not know how you resolve this, but this issue 
continues to be of concern to me.

                         GENERIC DRUG INDUSTRY

    Let me turn to an unrelated point, and that is that the FTC 
is currently examining the competition of the generic drug 
industry under the Hatch-Waxman Act.
    Mr. Muris. Yes.
    Senator Reed. In the pilot study, you filed a citizen's 
petition with the FDA seeking guidance on the types of patents 
that can and cannot be appropriately listed in their so-called 
Orange Book. Could you give us an idea of the status of that 
investigation and have you received any response back from the 
FTC?
    Mr. Muris. We have been in discussions with the FDA, 
Senator. The FDA held a hearing, actually, on generic questions 
of Hatch-Waxman. I quite frankly think that no person who has 
been at the FTC is probably going to be more aggressive in 
pursuing those Orange Book investigations than we will be under 
my chairmanship. I think there is an enormous stake here for 
consumers. We put a lot of resources into it. We had great 
success with our BuSpar brief, which involved this issue, and 
we are hoping that the FDA, quite frankly, rules in that 
citizens' petition and we have been encouraging them to do so.

                             TELEMARKETING

    Senator Reed. I commend you and the FTC for your proposal 
for the ``no call'' list, if you will, for telemarketing 
salespeople. That is one of the most annoying practices. If I 
took a poll in Rhode Island, it might be the only issue where 
you get 100 percent agreement.
    I would just ask whether you are prepared for the demand. I 
noted today in the Washington Post there was an article, ``FTC 
Anti-Telemarketing List Would Face Heavy Demand Based on the 
Experience in Missouri and Other Jurisdictions.'' Do you have 
the resources and the infrastructure to, I think, deal with 
this tsunami that is coming when people discover they can get 
their names off these lists?
    Mr. Muris. That is an excellent question, Senator, and we 
are at the mercy of the committee. We will need more money to 
do this. We can charge a fee for the lists, but we cannot spend 
the money unless the Congress allows us to spend the money. So 
we, in fact, have asked for that additional authority from you 
and we hope that you give it to us.
    Senator Reed. But that will not delay the imposition of 
this procedure?
    Mr. Muris. No. We are still in a rulemaking procedure. We 
obviously have not made final decisions yet, nor have I, but 
under the timetable that we are on, if Congress passes, and I 
assume because this is an election year you all will pass 
appropriations bills sometime by early in the next fiscal year, 
and that will give us enough time.
    Senator Reed. Thank you, Commissioner. Thank you, Mr. 
Chairman.
    Senator Hollings. Thank you very much.

                          prepared statements

    I would like to include in the record written statements 
submitted by FTC Commissioner Mozelle W. Thompson and FTC 
Commissioner Sheila F. Anthony.
    [The statements follow:]
Prepared Statement of Mozelle W. Thompson, Commissioner, Federal Trade 
                               Commission
    Today, the Commission has voted to approve testimony before the 
Senate Commerce, Justice, State and the Judiciary Subcommittee of the 
Appropriations Committee. Although I concur with most of this 
testimony, I am compelled to dissent from the discussion of the 
recently executed agreement between the Assistant Attorney General for 
Antitrust Charles James and Chairman Timothy Muris. I have previously 
expressed my concern about the Agreement which, among other things, 
seeks to allocate to each agency exclusive jurisdiction over certain 
merger reviews and other antitrust investigations.\1\ I am unable to 
concur because of those concerns and my concern that the testimony's 
description of the facts and circumstances supporting the Agreement is 
misleading in several ways.
---------------------------------------------------------------------------
    \1\ See Statements of Mozelle W. Thompson, January 18, 2002 and 
March 5, 2002.
---------------------------------------------------------------------------
    First, the testimony overstates the necessity for the Agreement by 
claiming that ``major clearance disputes have become both more common 
and more contentious.'' \2\ While I continue to support an inter-agency 
agreement that would streamline our clearance process, I believe that 
our clearance history shows that the total number of clearance contests 
between the two agencies has actually decreased 28 percent from 81 to 
65 to 58 beginning in fiscal year 1999 and continuing through 2000 and 
2001.\3\ And more significantly, the agencies have improved the speed 
of granting clearances. This fact is demonstrated by the increased 
percentage of clearance requests cleared in 2001 compared to 1999 for 
three different time periods: 21 percent (in 1999) improved to 41 
percent (in 2001) for investigation requests cleared within 6 business 
days; 53 percent improved to 63 percent for clearance resolved within 9 
business days; and 90 percent improved to 94 percent for clearance 
resolved within 15 business days.
---------------------------------------------------------------------------
    \2\ Testimony at pages 13-14.
    \3\ As we approach the halfway point in fiscal year 2002, the 
agencies have contested clearance for only 18 matters.
---------------------------------------------------------------------------
    Perhaps more impressive than these facts is the fact that between 
1995 and 2001 only a handful--one percent--of clearance requests were 
not resolved within 20 business days. Accordingly, while there may be 
room for clearance process improvement, the testimony may misrepresent 
the nature of clearance contests because the simple fact is that the 
antitrust agencies have already improved the clearance process 
substantially over recent years. Morever, it is unclear whether 
reallocating industries from one agency to the other is necessary to 
achieve greater efficiencies.\4\
---------------------------------------------------------------------------
    \4\ Interestingly, the clearance testimony also implies that the 
convergence of certain technology and economic sectors has 
significantly increased clearance disputes and that allocating 
industries is needed to improve the clearance process. There is no 
evidence to show that drawing new industry lines will avoid future 
disputes when a product involved in a merger review or other 
investigation falls between any two assigned industries.
---------------------------------------------------------------------------
    Additionally, the Commission's clearance testimony omits important 
information about the process that led to the creation of the 
Agreement. For example, the testimony cites the January 18, 2002 
Statement of Commissioners Orson Swindle and Thomas B. Leary for the 
proposition that the Chairman has authority to unilaterally effect 
administrative changes. But the testimony fails to note that this 
Commission has never voted to deem clearance matters administrative,\5\ 
nor has it voted to approve the Agreement or the process which led to 
its creation--including the empaneling of a non-public advisory panel 
consisting of private antitrust attorneys. Similarly, the testimony 
cites letters from the ABA Antitrust Section, former agency officials, 
and the business community as supporting the Agreement. However, the 
testimony fails to state that while the authors of those letters 
supported improved clearance procedures, they did not approve the 
substance of the James/Muris Agreement or the process by which it was 
reached.\6\
---------------------------------------------------------------------------
    \5\ I doubt whether altering the Commission's concurrent 
enforcement responsibilities under Section 5 of the Federal Trade 
Commission Act or affecting the use of our exclusive powers under 
Section 6 of the Act, can be characterized as merely administrative. 
Nor would I concur that the negotiation of the Agreement is an 
appropriate subject for the ``private lawmaking'' it embodies. Also, I 
have not been provided with any information that would enable me to 
measure the budgetary ramifications of altering the Commission's 
responsibilities under the Agreement.
    \6\ See, e.g., Letter to Charles A. James and Timothy J. Muris from 
Roxane C. Busey, Chair, Section of Antitrust Law (January 23, 2002) 
(``The Section supports the concept of such an agreement--without 
commenting on the specifics of the particular allocation agreement, 
which we have not seen, or the particular process by which it was 
reached.''); Letter to Charles A. James and Timothy J. Muris from 
Robert Pitofsky, et al. (February 4, 2002) (A letter drafted by private 
attorney Joe Sims for signature by former agency officials states: 
``[The signatories take] no position on whether the assignments and 
reassignments in the draft proposal are appropriate . . . .'' See also 
Letter to Timothy Muris from The Business Roundtable, the National 
Association of Manufacturers, and the U.S. Chamber of Commerce 
(February 25, 2002) (Letter from business groups did not endorse the 
Agreement process and stated that the business groups believed it did 
not matter which agency reviewed particular matters). The fact that 
outside parties have expressed support for the concept of a procedural 
clearance agreement absent consideration of allocating industries casts 
doubt upon the necessity for an agreement as sweeping in scope as the 
one signed by Chairman Muris and AAG James.
---------------------------------------------------------------------------
    For all of these reasons, I am concerned that an important portion 
of the Commission's testimony--the clearance discussion--is misleading 
and falls short of what this Subcommittee and the public deserve to 
know. Accordingly, I respectfully dissent from the clearance portion of 
the testimony.
                                 ______
                                 
 Prepared Statement of Sheila F. Anthony, Commissioner, Federal Trade 
                               Commission
    I support the Commission's testimony before this Subcommittee, 
except that part which discusses the clearance procedures for merger 
investigations. While ``streamlining the merger review process'' is a 
laudable goal that deserves our attention, I am not convinced that the 
approach agreed to by Chairman Muris and Assistant Attorney General 
Charles James fully maximizes the unique makeup, experience, and 
institutional assets of the Commission.\1\
---------------------------------------------------------------------------
    \1\ See Statement of Commissioner Sheila F. Anthony on the 
Memorandum of Agreement Concerning Clearance Procedures for 
Investigations (Jan. 18, 2002), available at http://www.ftc.gov/opa/
2002/01/ftcdojsa.htm for further discussion.
---------------------------------------------------------------------------

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hollings. Senator Domenici has some questions that 
will be submitted for your response.
    [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 Pete V. Domenici
    Question. Why do you think it would be good government to repeal 
the common carrier exemption and allow the FTC to review the practices 
of such firms?
    Answer. The FTC does not have jurisdiction over ``common carriers 
subject to the Acts to regulate commerce'' (15 U.S.C. Sec. 45(a)(2)), 
including common carriers subject to the Communications Act of 1934 (15 
U.S.C. Sec. 44). When Congress originally exempted common carriers from 
FTC oversight, the telecommunications industry was controlled by a 
single, large telecommunications company subject to tight government 
regulation. The industry has undergone dramatic changes, however, since 
it was deregulated. Numerous telecommunication companies now offer an 
ever widening array of services and engage in fierce competition, 
sometimes resulting in deceptive advertising and marketing schemes. 
Because of the common carrier exemption, consumers in a very important 
segment of the economy telecommunications do not benefit from ordinary 
FTC action against deceptive and unfair marketing, advertising, and 
billing. Because the FTC, the primary agency responsible for consumer 
protection matters, does not have jurisdiction over telecommunications 
common carriers, consumers are not receiving the full benefit of the 
FTC's expertise and the agency is not being used to its fullest 
potential.
    Repealing the exemption would have a secondary benefit. The FTC has 
jurisdiction over charges on the phone bill that are not related to the 
transmission of telecommunications. We have been effective in attacking 
telephone bill ``cramming'' the placement of unauthorized charges for 
non-telecommunications services on consumer's phone bills. Acting as a 
common carrier with respect to some activities should not shield an 
entity from the FTC Act with respect to non-common carrier activities. 
Some ``cramming'' defendants try to cloak themselves with common 
carrier status, or claim immunity from the FTC Act based on common 
carrier activities unrelated to the practices at issue. While this 
defense has not been successful to date, countering the defense has 
proven expensive and time-consuming. Furthermore, there is the risk 
that a court could find that the FTC does not have jurisdiction over 
such defendants, thereby laying a foundation for fraudulent 
telemarketers and others to register as common carriers to shield 
themselves from FTC enforcement. In addition, repealing the exemption 
would permit the FTC to investigate and challenge the activities of all 
of the participants involved in a deceptive telecommunications-related 
scheme.
    Question. What authorities and what resources would you need to do 
the job of evaluating media competition issues?
    Answer. Prior to the execution of the new clearance agreement, the 
Department of Justice's Antitrust Division (DOJ) had handled the vast 
majority of media mergers based on its greater experience in the area. 
Much of this experience was accumulated because the DOJ has exclusive 
jurisdiction over anticompetitive practices by telecommunications 
common carriers, and those companies are becoming increasingly 
prominent in the media area. Without full jurisdiction over 
telecommunications common carriers, it remains inherently difficult for 
the FTC to garner the necessary level of experience within the broader 
media context to be able to prevail in a clearance dispute over a media 
merger with the DOJ. If Congress believes that the FTC should have full 
authority to investigate telecommunications matters, including media 
mergers, then a first step could be to repeal the common carrier 
exemption that prohibits the FTC from pursuing anticompetitive 
practices of telecommunications common carriers.
    Question. How much time has been spent fighting with the Department 
of Justice over who would review each merger or case involving issues 
of competition?
    Answer. Under the U.S. antitrust laws, both the FTC and the DOJ 
have jurisdiction to review proposed mergers as well as other 
competition matters. For mergers, 15 U.S.C. Sec. 18a provides that only 
one of the two agencies can conduct a detailed antitrust investigation. 
Therefore, it is necessary for the agencies to determine which one will 
review a specific matter to avoid duplication. Since 1948, the agencies 
have agreed that neither would proceed with an investigation until one 
agency ``cleared'' the matter to the other agency. This decision has 
been based primarily on one agency's greater expertise in a certain 
industry.
    Until recently, this process worked fairly well. From 1982 through 
1989, for example, there were only about 10 clearance disputes each 
year. However, as traditional industry boundaries have become blurred 
in the current high tech economy, this system has resulted in 
significant clearance delays as each agency argues for the ability to 
handle a specific matter. Subsequently, from 1990 through 2001, there 
has been an average of 83 clearance disputes per year. Delays averaging 
three weeks occurred in 24 percent of the matters on which clearance 
was sought from the beginning of fiscal year 2000 through January 28, 
2002. Cumulatively, these investigations were delayed by 4,521 business 
days more than 17 years. As an example of the system at its worst, when 
I arrived at the FTC last summer, one investigation had been delayed 
over a year because neither agency would ``clear'' it to the other.
    Question. How does the new ``clearance'' procedure meet the needs 
of the private sector and of consumers?
    Answer. The new clearance agreement will eliminate almost all of 
the delays of the previous system and will provide the public with a 
transparent understanding of how industries will be allocated. Instead 
of wasting time and resources on clearance disputes, the agencies will 
be able to devote that time to reviewing proposed transactions for 
possible anticompetitive consequences. In addition to the allocation of 
industries, the clearance agreement also improves the overall 
transparency of the process and institutes specific procedures for 
possible disputes. The agreement sets forth expedited time frames for 
review, provides for the development of a Clearance Manual that will be 
posted on each agency's Web site, and establishes a dispute process 
involving a Neutral Evaluator for clearance resolution all of which 
make the process more effective and efficient for the agencies, 
consumers and businesses.
    Question. What benefits accrue to the operation of the government 
under the new ``clearance'' procedures?
    Answer. The new clearance agreement represents good government. 
Because both agencies have jurisdiction to review proposed mergers 
while only one agency can actually conduct an antitrust investigation 
of the merger, the clearance agreement eliminates much of the conflict 
and inefficiencies in the previous system. In recent years, the 
clearance process had become more contentious as the convergence of 
industries blurred bright lines between industry boundaries. As each 
agency vied for clearance over particular matters in these converging 
industries, both the level of tension that developed between the 
agencies' staff and the delays associated with the prolonged process 
increased. The new agreement will significantly reduce the occurrence 
of clearance disputes through a clear delineation of industries and the 
establishment of a formal process for resolving any clearance issues. 
These policies will enhance the previous system by reducing the 
inefficiencies associated with the ensuing delays and virtually 
eliminating the possibility of protracted disputes between staff on 
clearance issues.
    The new agreement will remedy another inefficiency of the old 
process: division of matters even within a given industry between 
agencies based on historical experience with particular industry 
segments. Prior to the new agreement, one agency could not study the 
full array of related matters in some industries, and thereby maximize 
the breadth and depth of its expertise. It is not sound public policy 
for one agency to investigate cars, for example, while the other agency 
investigates trucks, or for one agency to investigate electricity 
mergers, while the other handles all other energy matters. The new 
clearance agreement allows for expertise in one industry to be 
developed as fully as possible by avoiding historical allocations to 
the agencies that divided different segments of the same industry. For 
example, the old allocations that divided cars from trucks, and divided 
electricity from other energy matters, will no longer be followed under 
the new agreement.
    Question. I understand that a request for an advisory opinion has 
been filed with the FTC seeking its guidance on advertising by a 
smokeless tobacco manufacturer that its products are a reduced risk 
alternative to smoking cigarettes. What steps will the Commission 
follow in reaching a determination on the advisory opinion request?
    Answer. The Federal Trade Commission received a request for an 
advisory opinion from the U.S. Smokeless Tobacco Company (``USSTC'') 
regarding the acceptability of communicating in advertising that 
smokeless tobacco products generally are considered to be a 
significantly reduced risk alternative as compared to cigarette 
smoking. The Commission has placed USSTC's request on the public 
record, along with letters received from the Campaign for Tobacco-Free 
Kids, the American Academy of Otolaryngology Head and Neck Surgery, 
Inc., and the California Department of Health Services, urging the 
Commission to deny the request. Commission staff is reviewing the 
request and supporting materials submitted by USSTC and is consulting 
with the federal government's science-based public health agencies. 
Following this review, the Commission will make a determination as to 
an appropriate response to USSTC's request.

                         CONCLUSION OF HEARINGS

    Senator Hollings. The subcommittee will be in recess, 
subject to the call of the Chair.
    [Whereupon, at 10:58 a.m., Tuesday, March 19, the hearings 
were concluded, and 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 2003

                              ----------                              

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

                       NONDEPARTMENTAL 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 2003 budget request for 
programs within the subcommittee's jurisdiction.]
                         DEPARTMENT OF COMMERCE

              Prepared Statement of The Ocean Conservancy

    The Ocean Conservancy is pleased to share its views regarding the 
marine conservation programs in the National Oceanic and Atmospheric 
Administration's (NOAA) budget and the Department of State, and 
requests that this statement be included in the official record for the 
fiscal year 2003 Commerce, Justice, State, and the Judiciary 
Appropriations bill.
    The Ocean Conservancy (TOC) strives to be the world's foremost 
advocate for the oceans. Through science-based advocacy, research, and 
public education, we inform, inspire, and empower people to speak and 
act for the oceans. TOC is the largest and oldest nonprofit 
conservation organization dedicated solely to protecting the marine 
environment. Headquartered in Washington D.C., TOC has regional offices 
in Alaska, California, Florida, and Maine. TOC can not overstate the 
importance of this subcommittee to advance marine conservation and 
greatly appreciates the funding provided in fiscal year 2002. While TOC 
recognizes the subcommittee has many difficult choices to make this 
year, we urge you to continue to make ocean conservation a top 
priority.
                          department of state
    Implementation of the Inter-American Convention for the Protection 
of Sea Turtles (IAC).--The IAC, the first international treaty 
dedicated to sea turtle protection and conservation, was ratified by 
the United States in 2000. To date, eight nations, including Brazil, 
Costa Rica, Ecuador, Honduras, Mexico, the Netherlands, and Peru have 
ratified the IAC, and Costa Rica will host the first meeting of the 
Parties in August 2002. TOC requests $100,000 (within the International 
Fisheries Commission program account) in fiscal year 2003 for the State 
Department to assist the independent Secretariat and maintain the 
leadership of the United States on this treaty.
            national oceanic and atmospheric administration
Conservation Spending Category
    In October of 2000, Congress established the Land Conservation, 
Preservation, and Infrastructure Improvement Fund (LCPIIF) to provide 
increased support for conservation activities. The fund dedicates an 
additional $480 million in the fiscal year 2003 budget, above fiscal 
year 2000, for critical coastal conservation activities within NOAA. 
TOC strongly encourages the subcommittee to make full use of this 
funding to provide additional support for high priority coastal 
conservation initiatives, as outlined below.
Coral Reef Conservation
    Coral reefs are known as ``the rainforests of the sea,'' and are 
among the most complex and diverse ecosystems on earth. Coral reefs 
provide habitat to almost one third of marine fish species, serve as 
barriers to protect coastal areas, and provide an estimated $3 billion 
annually in economic benefits to the country from tourism and 
recreational fishing. Coral reefs are also extremely fragile and face 
serious threats from overutilizaiton and pollution around the world.
    NOAA serves on the successful Interagency Coral Reef Task Force and 
is responsible for implementing the National Action Plan to Conserve 
Coral Reefs. TOC appreciates this subcommittee's past support of NOAA's 
coral reef activities and requests $30.2 million in fiscal year 2003 to 
support critical monitoring, mapping, and restoration activities, 
especially those identified as priorities by the Task Force. This $2 
million increase above the Administration's request should be directed 
to the Coral Reef Conservation Fund established by the Coral Reef 
Conservation Act of 2000 (Public Law 106-562) to leverage an additional 
$2 to $4 million in public-private partnerships for on-the-ground coral 
reef conservation activities in the United States and its territories.
                         national ocean service
National Marine Sanctuary Program
    TOC requests the subcommittee provide $37.6 million for sanctuary 
operations, $2 million above the Administration's request. Our nation's 
13 sanctuaries encompass almost 18,000 square miles of our most 
significant marine resources. This increase is critical to reducing 
staffing shortages and supporting conservation, community outreach, 
research, and education programs, and updating sanctuary management 
plans as required by law. TOC also supports the Administration's 
request of $10 million for construction, particularly for interpretive 
facilities to educate the general public about the role of the federal 
government in managing our nation's ocean and coastal resources.
Marine Protected Areas
    TOC greatly appreciates this subcommittee's support of NOAA's 
marine protected areas (MPAs) initiative in fiscal year 2002 and 
requests $5 million in fiscal year 2003. This increase will allow NOAA 
to work more effectively with federal and state agencies and other 
partners to acquire data for the ongoing MPA inventory and support the 
forthcoming Marine Protected Areas Advisory Committee and its science 
advisory panel. In addition, this increase will allow NOAA to better 
assist stakeholders, including regional fishery management councils, 
states, and others by providing technical assistance and research to 
determine how best to design and implement MPAs.
Nonpoint Source Pollution
    Nonpoint source pollution, or polluted runoff, continues to be the 
nation's largest source of water pollution. Last year there were over 
11,000 closings and advisories at U.S. beaches. TOC greatly appreciates 
the subcommittee's support of $10 million in fiscal year 2002 to help 
states address polluted runoff and requests $25 million in fiscal year 
2003. This will enable coastal states and territories with approved 
nonpoint plans to make continued progress in implementing their 
priority actions.
                   national marine fisheries service
Expand Fisheries Stock Assessments
    The status of 78 percent of commercially-caught ocean fish 
populations is unknown due in large part to lack of funding for basic 
research and regular stock assessments. It is essential that we develop 
a better understanding of the status of our fish populations. Even with 
the Administration's request of $11.9 million, the NMFS still would 
lack the funding necessary to conduct nearly a quarter of its research 
days-at-sea. TOC urges the subcommittee to expand funding for stock 
assessments to $25 million in fiscal year 2003 to reduce this deficit.
Fisheries Observers
    Along with stock assessments, reliable, objective information about 
how many fish are being caught, directly and as bycatch, is crucial to 
responsible management of our fish populations. Observers are a key 
means of collecting such information, yet current coverage is limited. 
TOC requests $25 million for fisheries observers in fiscal year 2003, 
$8 million above the Administration's request. TOC encourages the 
subcommittee to strengthen and establish the following observer 
programs.
            National Observer Program
    While encouraged by the Administration's proposal for expanding the 
national observer program to $4 million, TOC believes this funding is 
still inadequate and recommends additional support for NMFS to meet its 
national observer needs.
            West Coast Observers
    TOC appreciates the subcommittee's funding of $4 million for West 
Coast Observers in fiscal year 2002 and urges the subcommittee to 
reject the Administration's proposed cut and increase funding to $7.2 
million in fiscal year 2003.
            Gulf of Mexico Shrimp Fishery
    The shrimp fishery is believed to be the largest fishery in the 
Gulf of Mexico. Efforts to monitor the effort and catch are limited, 
and available data indicates that, Gulf-wide, an average of 80 percent 
of the catch by weight is bycatch, which include juvenile red snapper 
as well as sea turtles. TOC requests dedicated funding to establish an 
observer program to help managers better understand the region's 
fishery and better enforce the use of turtle excluder devices, which 
are required year-round in most shrimp trawl nets.
            Gulf of Mexico Longline Fishery
    Longlines capture a variety of ocean wildlife besides the reef fish 
they target, including marine birds, sea turtles and soft corals. 
Little reliable information is available on catch and effort for 
longline vessels in the federal waters of the Gulf. An observer program 
for this fishery would provide valuable information, facilitating 
science-based management decisions. TOC requests that the subcommittee 
identify and appropriate the necessary funds to establish this observer 
program.
            Atlantic Coast Gillnet Fishery
    In response to the more than 100 bottlenose dolphin mortalities in 
the gillnet fishery off North Carolina (over four times allowable 
levels), the Atlantic Bottlenose Take Reduction Team was established in 
2001. TOC urges the subcommittee to appropriate $3 million to establish 
an observer program for this fishery and support the efforts of the 
take reduction team to reduce dolphin mortalities.
Enforcement and Surveillance
    In addition to better data, enforcement of our fishery management 
laws is critical. Unfortunately, enforcement has not kept pace with 
need, and has in fact dropped dramatically since the attacks of 
September 11th. TOC urges the subcommittee to address this shortfall so 
that our fisheries management laws can be better enforced. We request 
$46.9 million in fiscal year 2003, $11 million above the 
Administration's request, to hire more officers.
    Within these funds, TOC requests $12.4 million, $5 million above 
the Administration's request, for expanding the Vessel Monitoring 
System (VMS) program. VMS, a satellite-based fishery enforcement 
system, has the ability to provide real-time catch reporting throughout 
a number of different fisheries. This increase would allow for 
establishment and implementation of the VMS systems and place a VMS 
transponders onboard many of the estimated 10,000 boats in the U.S. 
commercial fishing fleet. VMS programs enhance data collection and 
safety at sea and can be beneficial to fisherman by allowing them to 
fish right up until a quota is reached. Finally, with VMS system is 
benificial to fishermen because it allows them in many fisheries to 
fish right up to the day the fishery is closed. Currently, some 
fisheries require boats to be tied up at dock when the announcement is 
made. with VMS systems, officials can tell when a fishing vessel is 
fishing in closed areas, or is fishing beyond the end of a regulated 
fishing season. This funding is one of The Ocean Conservancy's highest 
priorities.
Marine Mammal Protection Act
    TOC believes the lack of adequate resources has severely hampered 
NMFS's ability to effectively implement the MMPA and requests $38 
million in fiscal year 2003, the amount authorized under the MMPA. This 
increase is necessary to fund top priority studies identified by the 
marine mammal take reduction teams: to design and implement fishery 
management plans that will not endanger marine mammals; conduct 
research on population trends, health, and demographics; and to carry 
out education and enforcement programs. It would also allow health 
assessment and research into the causes of strandings and die-offs and 
identification of mitigation measures to prevent such deaths in the 
future. TOC also asks that report language be included to direct NMFS 
to undertake research to develop reflective netting in the gillnet 
fishery to reduce harbor porpoise mortality.
Essential Fish Habitat
    Protecting essential fish habitat (EFH) is key to ensuring healthy 
fish populations in the future. Given the need to better understand the 
impacts of fishing and other activities on these habitats, and the need 
to more fully comply with the Sustainable Fisheries Act requirement to 
minimize impacts to those habitats, TOC believes that increased funding 
is crucial. TOC greatly appreciates this subcommittee's increased 
support of EFH in fiscal year 2002 and requests $12.5 million in fiscal 
year 2003.
Marine Debris Removal
    Derelict fishing gear and other marine debris has the potential to 
damage and kill coral and other marine animals, including the highly 
endangered Hawaiian monk seal. The NMFS marine debris removal program 
in the Northwestern Hawaiian Islands was successful in removing 110 
tons of derelict fishing gear in 2001. Studies show that debris 
continues to accumulate, indicating the need for further funding of $3 
million for removal of marine debris.
Atlantic Coast Cooperative Statistics Program
    TOC greatly appreciates the subcommittee's support of $2 million in 
fiscal year 2002 for the Atlantic Coast Cooperative Statistics Program. 
This unique cooperative state and federal fisheries data collection 
program encompasses all marine fisheries sectors on the Atlantic Coast, 
including recreational anglers, charter and headboat operators, 
commercial fishermen and seafood processors/dealers. It has allowed 
resource managers from 15 states to develop a plan to cooperatively 
collect, manage and disseminate fishery statistics for the Atlantic 
coast. We request $3 million in fiscal year 2003 so that this program 
can be expanded and better implemented along the East Coast, thereby 
helping to ensure that data collection methods are more consistent and 
reliable.
Endangered Species
    NMFS bears significant responsibility for administering the 
Endangered Species Act with respect to marine and anadromous species. 
NMFS is responsible not only for the recovery of already-listed species 
such as Northern Atlantic Right Whales (see below), Steller sea lions, 
and all species of sea turtles found in U.S. waters, but also for 
responding to petitions to list species, such as smalltooth sawfish, 
bocaccio rockfish, and green sturgeon. TOC is concerned about NMFS's 
ability to meet its responsibilities under the ESA, including 
responding to listing petitions in a timely fashion, consulting with 
federal agencies on proposed actions that may affect listed species and 
designated critical habitat, and coordinating up-to-date recovery 
planning and activities to ensure that the nation's most vulnerable 
marine species can progress towards full recovery. TOC urges the 
subcommittee to substantially increase NMFS's ESA funding to meet its 
fiscal year 2003 demands.
            North Atlantic Right Whales
    With approximately only 300 North Atlantic Right Whales remaining, 
funding is needed to improve our understanding of right whales and to 
develop fishing technologies to reduce entanglements. TOC thanks the 
subcommittee for its past support and requests $7 million in funding in 
fiscal year 2003.
National Invasive Species Act
    Nonindigenous species infestations degrade natural resources of 
virtually every U.S. waterway and coastal area. Free of natural 
predators, alien species which become established in our waters often 
out-compete native organisms, destroy habitat and alter physical/
chemical conditions in our coastal waters. Invasive species are 
regarded as a leading cause of diminished biodiversity and cost our 
economy millions of dollars each year. The leading vector of 
unintentional introductions of aquatic pest species is the discharge of 
ballast water by oceangoing vessels.
    The National Invasive Species Act (Public Law 104-332) coordinates 
federal efforts to prevent and combat the spread of invasive species 
through the interagency Aquatic Nuisance Species Task Force, which is 
co-led by NOAA and the Fish and Wildlife Service (FWS). Under the Act, 
NOAA is authorized at $7.5 million to help implement the Aquatic 
Nuisance Species Program and work with the FWS and the Coast Guard to 
develop and demonstrate environmentally sound ballast water treatment 
technologies. TOC appreciates this subcommittee's support of $6 million 
in fiscal year 2002 and, consistent with the National Research 
Council's recommendations on ballast water, urges you to reject the 
Administration's 87 percent proposed cut and fully fund the program at 
$7.5 million.
Highly Migratory Shark Fisheries Research Program
    This effective multi-regional collaborative effort conducts 
research on shark and ray populations in the Gulf of Mexico, the 
Atlantic, and the Pacific. Information developed from this program has 
provided critical information for assessing the status of shark 
populations and their management. TOC greatly appreciates the 
subcommittee's support for the program in fiscal year 2002, urges the 
subcommittee to reject the Administration's proposed cut, and requests 
an increase in funding to $1.95 million.
Pacific Highly Migratory Species Research
    TOC also supports funding for Pacific Highly Migratory Species 
Research, but believes the Administration's request of $0.75 million is 
inadequate. Funding for stock assessments and biological studies, as 
well as improving bycatch mitigation techniques for these fisheries, 
are critical for the long-term health of the fishery. TOC requests $1.5 
million in fiscal year 2003, with $0.5 million to be specifically 
dedicated to completion of the Pacific Fishery Management Council's 
Highly Migratory Species Fishery Management Plan.
Marine Mammal Commission
    TOC requests that the subcommittee support the Marine Mammal 
Commission at its authorized level of $1.75 million in fiscal year 
2003.
    These programs are of the utmost importance to the stewardship of 
the nation's living marine resources. We greatly appreciate your 
support for these programs in the past and look forward to continued, 
responsible funding for these programs in fiscal year 2003. Thank you 
for considering our requests.
                                 ______
                                 

              Prepared Statement of The Nature Conservancy

    The Nature Conservancy is escalating its focus on freshwater, 
coastal, and marine conservation by establishing Freshwater and Marine 
Initiatives that will employ the science, partnerships, ecosystem 
approach, and site-based conservation that has worked throughout our 
fifty-year history. These initiatives will strengthen the work that we 
are engaging in with partners to develop a ``conservation blueprint'' 
identifying the places that, if conserved, will collectively protect 
the nation's plants, animals, and natural communities for the long-
term. Several NOAA programs have been, or will be successful at 
conserving many places identified by our blueprint.
                        coastal zone management
    This unique federal-state-territorial partnership created under the 
Coastal Zone Management Act (CZMA) serves to protect, restore, and 
responsibly develop the nation's coastal communities and resources 
along 95,000 miles of shoreline. State and territorial CZM programs 
link national objectives with implementation and stewardship at the 
local level. Through a review of federal activities and permits, they 
also integrate resource protection and economic development activities 
with state coastal management plans. Increased funding for this program 
in fiscal year 2003 ($80 million Grants to States; $7 million Program 
Administration; $15 million Non-Point Pollution Implementation Grants) 
would advance protection of coastal, ocean, and Great Lakes species and 
their habitats; maintain natural shorelines; and enhance scientific 
research and education, while allowing for certain economic growth. 
This funding would also improve coordination and government efficiency. 
Finally, we also urge that the $2 million cap on state grants be 
eliminated so that all states can share equitably in funding increases.
               national estuarine research reserve system
    Authorized as part of the Coastal Zone Management Act (CZMA), the 
twenty-five ``living laboratories'' making up the National Estuarine 
Research Reserve System (NERRS) require funding ($18 million for 
operations; $15 million for Procurement, Acquisition, and Construction) 
appropriate to the importance of estuaries to critical habitat and 
coastal economies. Adequate funding for the NERRS will permit 
individual reserves to better implement strong management, research, 
education, and stewardship activities within surrounding communities, 
and acquire key tracts of land and conservation easements that buffer 
development impacts. This funding would also facilitate implementation 
of system-wide monitoring and coastal training programs, and would 
enable expansion in order for the system to represent the suite of 
biogeographic regions that together comprise our nation's coastlines.
                      national marine sanctuaries
    The Nature Conservancy supports the President's funding request for 
the National Marine Sanctuary (NMS) program ($36 million for Program 
Administration; $10 million for Procurement, Acquisition & 
Construction). This funding would extend volunteer programs, provide 
for additional monitoring, and would fulfill a national plan for public 
outreach. It would also enable new investments in science needed to 
better manage complex issues surrounding sanctuaries. Finally, 
additional funding will enable implementation of revised and more 
detailed management plans. Eight sanctuaries are currently undergoing 
management plan reviews.
    The Conservancy is currently working with the Monterey Bay NMS to 
determine overlapping goals and opportunities for collaboration as the 
sanctuary reviews its management plan. However, our most extensive 
experience has been with the Florida Keys NMS where their management 
plan, developed in cooperation with the state of Florida and an 
Advisory Council, is being implemented. The Florida Keys NMS management 
plan has shown promising results as it focuses on education and 
outreach, enforcement, research and monitoring, and zoning. It also 
addresses significant issues facing the health of the Florida Keys 
ecosystem such as water quality, sewage treatment, live-aboards, 
hazardous spills, and pesticides.
                coastal and estuarine land conservation
    The Coastal and Estuarine Land Conservation Program (CELCP) was 
authorized by Congress as part of the Commerce, Justice, State, and 
Judiciary Appropriations Act of 2002. In its first year, this new 
program directed $15.8 million to coastal and estuarine areas with 
significant conservation, recreation, ecological, historical, or 
aesthetic value that are threatened by conversion from their natural 
state to other uses.
    Nowhere in the nation are threats such as sprawl, habitat loss, and 
fragmentation more significant than along our nation's coasts. That is 
why a program providing grants that allow for land acquisition as a 
conservation strategy serves as an important addition to federal 
efforts focused on protecting valuable habitat for the long-term. As a 
result, the Conservancy supports a significant increase in funding ($60 
million) for the CELCP in fiscal year 2003. We also urge the adoption 
of guidelines that will allow organizations like the Conservancy to 
qualify for funding in order to forward CELCP goals across the nation. 
The development and land use pressures along the coasts and Great Lakes 
are immense, and they are projected to accelerate in the next ten 
years. If we do not act aggressively now, we may lose that opportunity 
forever.
                          habitat restoration
    The Nature Conservancy strongly supports NOAA's coastal habitat 
restoration efforts, and recommends funding levels of $18 million for 
Fishery Habitat Restoration. Most of this funding would ensure the 
continued success of NOAA's Community-based Restoration Program (CRP). 
This funding level would enable the CRP to direct more money to local 
communities for the restoration of vital habitats. Additionally, it 
would increase the geographic scope and rate at which it can encourage 
community ownership and restoration of critical and rapidly dwindling 
habitat. This program has not only leveraged up to $10 for every 
federal dollar invested at more than 500 projects, but has also 
leveraged a conservation ethic across the nation. As a national 
partner, the Conservancy has experienced first hand how the CRP 
inspires local efforts to conduct on-the-ground restoration of 
freshwater, coastal, and marine habitat. Since 2000, we have already 
directed $1 million to community-based projects in Florida, New York, 
Connecticut, North Carolina, Delaware, Virginia, California, and Texas. 
With two years remaining in our national partnership, we are excited 
about what lies ahead.
                            salmon recovery
    The Conservancy considers salmon conservation a critical aspect of 
our work in the Pacific Northwest, Alaska, and the Northeast. Given the 
complex life history of this keystone species--migrating hundreds of 
miles past forests and farms, cities and dams, from fresh to saltwater 
during their lifecycle--successful salmon conservation requires action 
across a broad landscape.
    History has demonstrated that money spent on habitat restoration 
and recovery could have been used more effectively and at less cost to 
the taxpayer if applied at a landscape-scale before systems were 
altered and degraded. However, habitat destruction, reduced 
streamflows, pollution, passage impediments, and overharvest have 
already played a role in the decline of salmon stocks. That is why 
generous funding to conserve and recover salmon in the Pacific 
Northwest and Alaska ($200 million for the Pacific Coastal Salmon 
Recovery Fund; $55 million for NMFS Agency Funding for Pacific Salmon 
Recovery), and in the Northeast ($30 million for an equivalent Atlantic 
Coastal Salmon Recovery Fund), is now critically needed.
    In the Pacific Northwest and Alaska, the Pacific Coastal Salmon 
Recovery Fund has enabled states and tribes to support local efforts to 
evaluate, protect, and restore key habitat while enhancing local 
economies. NMFS Agency funding enhances that support with scientific 
research and monitoring, and by spurring new cooperative efforts. In 
the Northeast, a significant amount of collaborative work among federal 
agencies, industry, private landowners, and other stakeholders has 
begun. However, a lack of comparable funding and capacity has hindered 
efforts in this region from addressing mounting stresses on dwindling 
salmon stocks. The time is right to establish a similar approach and 
complementary funding for USFWS and NMFS.
                         marine protected areas
    Marine protected areas (MPAs) are proven tools for rebuilding and 
sustaining fisheries, recovering threatened and endangered species, and 
providing recreational opportunities. The Conservancy has learned this 
first hand through work with scientists, community members, 
international governments, and federal agencies to establish MPAs in 
places such as the Florida Keys, the Exuma Cays Land and Sea Park in 
the Bahamas, and Kimbe Bay in Papua New Guinea. It is time to reserve 
more of these places for future generations, just as the nation has 
done on land with national parks and refuges, national forests, and 
other managed areas.
    The Conservancy recommends that $5 million be appropriated for MPAs 
so that NOAA can continue working with federal and state agencies and 
other partners to assess MPA design and effectiveness as a management 
tool that protects biodiversity while permitting use of the nation's 
valuable marine resources. Increased funding would also expedite 
information collection and collaborative efforts required for 
completion of the first nationwide inventory of MPAs. Additional funds 
would be employed to improve coordination and information sharing at 
regional and national levels; support training and technical assistance 
for communities, users, management agencies, and others; and increase 
public involvement through the MPA web site.
                        coral reef conservation
    The Nature Conservancy supports the President's budget for 
activities that benefit coral reefs ($16 million for NOS; $11 million 
for NMFS; $700,000 for NESDIS; $500,000 for OAR). This funding would be 
used to advance priorities identified by the U.S. Coral Reef Task Force 
including comprehensive mapping and monitoring of coral reefs, research 
into ecological processes upon which reefs depend, integration of human 
activities, and public education. With such funding, this 
scientifically-based effort will protect and restore coral reefs in the 
United States and its territories. It will serve as a model in 
intergovernmental coordination and coral reef protection for similar 
initiatives around the world.
    While NOAA's activities, guided by the Task Force, have made great 
strides in coral reef conservation, the Conservancy would like to see 
more funding dedicated to addressing this issue at an international 
scale. The combined effects of global climate change and human 
activities have led coral reef ecosystem health to decline severely all 
over the world in recent decades. It is now critical to take action 
before the tragedy becomes irreversible. Successful conservation of 
coral reefs will involve a broad-scale, global, and long-term 
commitment. The Conservancy has been working throughout the world with 
governmental and non-governmental partners to protect these fragile 
systems. We hope that NOAA funds dedicated to coral reefs in the future 
will be made more available for public-private partnerships at the 
international level.
                     estuarine restoration program
    The Estuary Restoration Act of 2000 created this program with the 
goal of restoring one million acres of estuary habitat by 2010. Subject 
to annual appropriations by Congress, the legislation authorized $275 
million over five years dedicated to public-private partnerships 
reversing the deterioration of estuaries through restoration of 
degraded habitat.
    The U.S. Army Corps of Engineers has primary jurisdiction over this 
program, and would receive the bulk of any funding. However, no funds 
have been appropriated to date. If funded, the program would encourage 
the restoration of estuarine habitats through enhanced coordination of 
Federal and non-Federal efforts, and through financing of innovative 
local, state, and regional projects focused on restoring healthy 
ecosystems that support wildlife, fish and shellfish; improve surface 
and groundwater quality, quantity, and flood control; and provide 
recreation. In hopes that the program will receive full funding in 
fiscal year 2003, the Conservancy urges that $1.2 million be 
appropriated to NOAA for their duties related to this program.
                               conclusion
    Thank you for the opportunity to submit these remarks. Conserving 
freshwater, coastal, and marine habitat is challenging and requires a 
variety of innovative strategies at every level. 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 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.
                   current research efforts by yrdfa
    In the fiscal year 2000, 2001, 2002 budget Congress authorized a 
$500,000 appropriation to YRDFA for ``habitat restoration, monitoring 
projects, stock assessments and bycatch research.'' YRDFA's previous 
and current research plans for the years 2000--2004 are divided into 
seven objectives:
  --Objective I.--Stock origins, migration patterns and marine 
        productivity of Bering Sea Chinook salmon,
  --Objective II.--Habitat restoration of Yukon River drainage salmon 
        streams,
  --Objective III.--Stock restoration through instream incubation 
        technology,
  --Objective IV.--Chinook smolt productivity and out-migration 
        analysis,
  --Objective V.--Coho salmon spawning surveys,
  --Objective VI.--Capacity building of local residents in salmon 
        research,
  --Objective VII.--Program reporting and coordination with other 
        research agencies.
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 has involved 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.
    Anticipated results include: identification of trawl salmon bycatch 
into broad regional stock groupings that will enable managers to adjust 
trawl fishing effort to avoid stocks that are having conservation 
problems, improved understanding of migration patterns and marine 
productivity of Bering Sea chinook that will enable managers to better 
forecast returns of adult chinook salmon and to assess impacts of 
changing ocean conditions on Chinook stocks.
Habitat restoration of Yukon River drainage salmon streams
    Efforts are focusing on improving access of chinook and chum salmon 
to spawning and rearing areas currently impeded due to historical 
mining activity. Methods will 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.
    To maximize the effectiveness of research funding, YRDFA is 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.
Coho salmon spawning surveys
    Identified in the 1998 Yukon River Comprehensive Salmon Management 
Plan as an important research need, very little is known about coho 
salmon spawning in the Yukon River. YRDFA staff is working with state 
and federal fisheries research staff to design effective survey 
methodology for learning more about the distribution and abundance of 
coho salmon spawning. Survey efforts will be planned to maximize 
usefulness to managers and be directed toward those areas (tributary 
streams) identified through traditional knowledge and sport fishing 
reports to support spawning coho. Field surveys will be led by YRDFA 
biologists and technicians hired from local villages.
Capacity building of local residents in salmon research
    Building capacity among village organizations and individuals to 
participate in and eventually develop salmon research projects presents 
a valuable opportunity for collaboration among resource users, local 
and regional groups, biologists, and managers.
    YRDFA is planning two capacity building seminars in appropriate 
regional centers along the river--using local projects as examples--
with hopes of promoting increased involvement in current research and 
encouraging future efforts. Funds would be used for lodging, meals, 
transportation, stipend for students, travel costs for some 
instructors, as well as for YRDFA administration, staff and travel 
costs. Such activities would strengthen communication among 
stakeholders and lead to improved salmon management on the Yukon River.
Research & management policy monitoring
    YRDFA is committed to disseminating knowledge gained through its 
research activities to affected communities. Recognizing that 
communication among villages in rural Alaska can be challenging, 
through newsletters, meetings and other outreach media, YRDFA will 
distribute reports in a timely manner. Similarly, YRDFA staff will 
continue to reach out to others involved in Yukon River fisheries 
management--keeping abreast of what other groups and agencies are 
working on and sharing its research with others.
    Monitoring management and regulatory actions will enable YRDFA to 
contribute its knowledge to the process of adaptive management wherein 
lessons learned through research and the management process are 
incorporated into new management measures. This will create a feedback 
information loop so that the effects of regulations can be monitored 
and if necessary changed to be more effective.
    Tasks accomplished or in progress with the fiscal year 2001 and 
fiscal year 2002 funds are as follows:
  --A report on ``Ocean Distribution and Migration of Yukon River 
        Chinook Salmon''
  --Restoration of salmon habitat on Ruby Creek in the lower Chatanika 
        River
  --A Report on ``Feasibility Testing of In-Stream (Streamside) 
        Incubation Technology''
  --Habitat restoration opportunity surveys of Minook and Birch Creeks
  --Salmon egg incubation opportunity surveys in Tanana River 
        tributaries
  --Installation of an egg incubation feasibility test on the Chatanika 
        River
  --Out-migrating salmon smolt survival studies in Tanana and Koyukuk 
        River tributaries
  --New salmon smolt survival studies in the Andreafski River tributary
  --New coho salmon spawning surveys in the Anvik River tributary.
                        fiscal year 2003 request
    For fiscal year 2003 the YRDFA requests a reauthorization of 
$500,000 in funding. If these funds were received YRDFA would be able 
to:

Budget request breakdown

                                                             Fiscal year
                                                            2003 request

YRDFA staff and field researchers.............................  $150,000
Marine productivity assessment................................    30,000
By-catch analysis and reduction...............................    20,000
Smolt survival studies........................................   100,000
Coho salmon escapement monitoring.............................    50,000
Salmon research education for villagers.......................    50,000
Habitat monitoring and restoration............................    50,000
Traditional Knowledge Research................................    50,000
                    --------------------------------------------------------------
                    ____________________________________________________

      TOTAL...................................................   500,000
                           closing statement
    Our funding requests propose to conduct research and educational 
efforts aims that will 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 an Executive Agreement between 
the two countries.
    Our research program will aid significantly in the management of 
this resource and the continuation of fishing families and communities 
in rural Alaska. Thank you for this opportunity to submit written 
testimony.
                                 ______
                                 
    Prepared Statement of the Northwest Indian Fisheries Commission
    Mr. Chairman, and Honorable Members of the Committee, I am Billy 
Frank, Jr., Chairman of the Northwest Indian Fisheries Commission 
(NWIFC). On behalf of our twenty member tribes I would like to thank 
you for the opportunity to offer written testimony concerning the 
Department of Commerce and Department of State fiscal year 2003 
appropriations that pertain to Pacific Salmon Recovery funding needs.
           summary of fiscal year 2003 appropriations request
    We would like to ensure that the following items be included in the 
fiscal year 2003 appropriations:
Department of Commerce
    $110 million for the Pacific Coastal Salmon Recovery Fund 
Initiative, with a set aside of $15 million to affected tribes for 
their management responsibilities. A specific allocation of the set 
aside for the Northwest Indian Fisheries Commission of $9 million is 
requested.
    $20 million for the Pacific Salmon Agreement's Restoration and 
Enhancement Funds consistent with the 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 Tribal/NMFS ESA Task Force.
Department of State
    $309,000 additional funding for implementation of Pacific Salmon 
Agreement.
    $20 million for Pacific Salmon Agreement's Restoration and 
Enhancement Funds consistent with the treaty annexes.
                              introduction
    Twenty-seven 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 altered the legal, 
political, social and economic institutions of the State of Washington, 
and have also fostered a nationwide quest for tribal self-determination 
and self-governance led in part by the Northwest tribal leadership.
    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. We are efficient and effective, but we have significant unmet 
needs, and the management obligations are many. New and highly 
difficult complexities abound, many of which have been precipitated by 
the demands of the Endangered Species Act.
    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 resulted 
in significant changes to harvest, hatchery, and habitat practices for 
the region and its inhabitants.
    Tribes are affected by this federal process. As fishers, the 
listings raise serious questions about the status of the stocks and 
poses a threat to the opportunity for these individuals to continue to 
harvest salmon, a treaty secured resource. As governments, the ESA 
process now places enormous bureaucratic demands upon the tribes as co-
managers of the resource. In addition, the tribes are working hard to 
provide much needed technical and policy leadership to protect and 
recover Puget Sound salmon. Continued and expanded tribal funding is 
essential to address endless issues raised by the ESA and to fulfill 
the tribes' unwavering commitment to salmon recovery.
    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. To our knowledge, never before has 
a resource--in this case, salmon--been both secured to tribes by 
treaties and regulated by the federal government under the ESA. The 
relationship raises vexing issues relating to the federal government's 
fiduciary responsibilities to the tribes in the context of the ESA. As 
the federal agency charged with implementing the ESA for salmon, NMFS 
requires additional funding to properly discharge their trust 
responsibilities to the tribes. Furthermore, the tribes require funding 
to ensure the federal-tribal trust relationship is properly discharged. 
As a result, 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 ESA in the context of 
tribal treaties.
 $110 million for the pacific coastal salmon recovery within the lands 
            legacy program with $15 million tribal set aside
    Tribes have been 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. We wish to support a funding level of $110 million 
for the Pacific Coastal Salmon Recovery Initiative.
    For many years, the tribes have sounded alarms about the declining 
status of the salmon resource. Tribes have actively participated in the 
implementation of the Northwest Forest Plan and have also worked 
diligently to implement the Pacific Salmon Treaty. Locally, tribes have 
linked 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. All of these 
efforts require a consistent source of funding that allows tribes to 
actively work salmon restoration efforts. That is why a continued set 
aside for the tribes is essential. We support $15 million set aside for 
the Pacific Coastal tribes for salmon restoration work. We also seek a 
specific allocation of $9 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, which includes not only harvest and hatchery management 
activities, but also habitat protection. 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.
    Each tribe has an existing fisheries management program, and will 
utilize its program as a base for salmon recovery efforts. Fiscal year 
2002 funds have 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 provide leadership and scientific direction in various 
salmon restoration projects and efforts that are under way within the 
region and individual watersheds.
    A coordinated tribal effort is necessary on a variety of 
``statewide'' and ``regional'' issues. Using the expanded capacity 
described above, tribes and their policy and technical staff will be 
able to increase the time and effort dedicated toward developing salmon 
conservation and recovery planning processes that are essential to 
salmon restoration.
    One of these new efforts--the Shared Strategy for Recovery of Puget 
Sound Salmon--is an example of the leadership the tribes are providing 
in salmon recovery. Working with state, federal, and local government 
leaders, and former EPA Administrator William Ruckleshaus, the tribes 
are developing salmon recovery goals for each Puget Sound watershed and 
identifying means to achieve those goals. This is an exciting new 
initiative that promises much needed direction, coordination, and 
strategic planning to the region's salmon recovery challenges. But 
without additional funding, the tribes' ability to participate in and 
properly manage this growing initiative will be impaired.
    In addition, 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 continue work to 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 the 
Coastal Salmon Recovery 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 1999 Pacific Salmon Agreement. This agreement 
resulted in an increase of fisheries management demands on the Pacific 
Salmon Commission. We support the U.S. Section's recommendations for 
the Commerce and State Departments' budgets, which includes increasing 
the State Department's funding level by $309,000 to address their 
increased responsibilities.
    The tribes also support the congressional appropriations of a 
funding package of $40 million for fiscal year 2003 for the two 
Restoration and Enhancement Funds. We are appreciative of the continued 
support by Congress to fulfill this obligation of the 1999 Pacific 
Salmon Agreement. This authorization represents the final installment 
for this agreement. These monies will be handled as an endowment and 
administered by the Pacific Salmon Commission for habitat, stock 
enhancement, science and salmon management initiatives in both 
countries.
    These funds are essential in order to implement the Agreement. 
Clearly, there have been very significant harvest reductions taken by 
all parties involved as a result of this new Agreement. Unfortunately, 
harvest reductions alone will not bring back the salmon. The new 
Restoration and Enhancement Funds will provide long term funding 
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 million per year for the next decade.
                               conclusion
    We strongly urge the Committee to provide $110 million in funding 
for Pacific Coastal Salmon Recovery. We ask the Committee to support 
the use of $15 million of these funds for use by the Pacific Coastal 
Tribes. Language directing $9 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. 
$530,000 is needed to fund a tribal/NMFS ESA Task Force.
    The new Pacific Salmon Agreement requires $40 million during fiscal 
year 2003 to fully fund the Restoration and Enhancement Funds. $309,000 
in new funding is needed for State Department implementation of the 
Pacific Salmon Treaty Agreement. A new initiative to support tribal 
fisheries 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 Airports Council International--North America 
           and the American Association of Airport Executives

    On behalf of Airports Council International--North America (ACI-NA) 
and the American Association of Airport Executives (AAAE) we appreciate 
the opportunity to offer the views of the airport community regarding 
the fiscal year 2003 Departments of Commerce, Justice, and State, the 
Judiciary, and Related Agencies Appropriations bill. ACI-NA represents 
local, regional and state governing bodies that own and operate 
commercial airports in the United States and Canada. AAAE is the 
world's largest professional organization representing the men and 
women who manage primary, commercial service, reliever and general 
aviation airports.
    We would like to begin by thanking Chairman Hollings, Ranking 
Member Gregg and all those who served on the Subcommittee last year for 
the leadership they provided on H.R. 2500, the fiscal year 2002 
Commerce-Justice-State Appropriations bill. Because of your efforts, 
that bill included a provision to allow the Immigration and 
Naturalization Service (INS) to charge cruise line passengers who enter 
the United States a $3 inspection fee and increase the fee on airline 
passengers from $6 to $7.
    Like many on this Subcommittee, ACI-NA and AAAE made the case that 
the INS needs additional inspectors and equipment to meet the increased 
demand for inspection services at congested international airports. One 
of our top priorities was convincing Congress to lift the current 
cruise line exemption as a way to pay for additional inspectors at 
international airports. That is why we were pleased that the fiscal 
year 2002 Commerce-Justice-State Appropriations bill lifted the cruise 
line exemption and included report language stating that the user fee 
increase should be used, in part, to hire additional inspectors at new 
and existing airport terminals as well as at high growth terminals.
    Additional Inspectors.--This year, AAAE and ACI-NA strongly urge 
this Subcommittee to approve funding for the INS to deploy additional 
inspectors at air ports-of-entry. Prior to the tragedies that occurred 
on September 11, INS officials expected the new user fees would 
generate as much as $100 million per year. At that level, revenue from 
the fees would allow the INS to hire 283 new inspectors at airports. 
The fees would also allow the INS to hire 60 inspectors to expand the 
INS/U.S. Customs Service passenger analysis units at airports to 
analyze traveler information in advance of plane arrivals.
    Because of the temporary decline in passengers that occurred after 
the terrorist attacks, the new inspection fee will not generate as much 
revenue as previously expected. That is why AAAE and ACI-NA strongly 
support a provision in the Administration's fiscal year 2002 
Supplemental Appropriations Request that would provide $35 million to 
the INS to enable the agency to fully implement increased air and sea 
port initiatives.
    The Administration's fiscal year 2003 budget request includes $85.5 
million to hire, train and deploy 1,160 additional Immigration 
inspectors. We see this as a step in the right direction. Under the 
Administration's proposal, INS would deploy some 615 inspectors to 
international airports, 460 to land border ports, and 65 to seaports. 
Approximately $362 million would also be used to fund a multi-year 
effort to provide a comprehensive land, sea, and air entry/exit system 
for the United States. INS expects to meet traffic management goals of 
processing 79 percent of commercial airline passengers within 30 
minutes.
    Since September 11th, the INS and U.S. Customs suspended all 
international-to-international (ITI) transit, progressive clearance, 
technical fuel stops and the use of in-transit lounges placing an even 
greater strain on both agencies. Consequently, inspectors from both 
agencies were required to inspect international passengers who they 
were not previously required to inspect--either because those 
passengers were traveling to another foreign country or because they 
would be inspected at another destination in the United States. In 
either case, before September 11, those passengers were required to 
remain in sterile in-transit lounges until boarding their next flight.
    In November of last year, the INS and U.S. Customs allowed ITI to 
resume under new and strict criteria. For instance, carriers were 
required to provide 100 percent Advanced Passenger Information prior to 
the aircraft's arrival. Moreover, both INS and U.S. Customs inspectors 
could require all passengers, crew and baggage to be inspected.
    Last week, the INS announced that it would be modifying the ITI 
transit procedures and reinstating progressive clearance, again under 
new and strict criteria. Carriers will now be allowed, under certain 
circumstances, to present their ITI and progressive passengers to INS 
inspectors at INS-approved in-transit lounges. While these new 
procedures may help speed up the inspection process for those 
particular passengers, they will require the INS and U.S. Customs 
Service to deploy more inspectors at air ports-of-entry.
    The number of passengers that the INS and U.S. Customs will be 
required to inspect is also increasing because more international 
passengers are traveling to the United States. The FAA predicts that 
international passengers will increase slightly this year and increase 
by 6.8 percent in calendar year 2003. The FAA also predicts that the 
number of passengers traveling between the United States and the rest 
of the world will increase from approximately 131 million passengers in 
calendar year 2001 to approximately 226 million by 2013.
    45-Minute Clearance Time.--Considering that 30-minute goal, we are 
surprised and disappointed that INS is proposing to eliminate the 45-
minute clearance time for the inspections of passengers arriving on 
international flights. Under current law, the INS is required to 
inspect passengers who arrive in the United States on scheduled airline 
flights within 45 minutes of their presentation for inspection. 
Airports around the country fear that eliminating the 45-minute 
clearance time will reduce the pressure on INS to deploy enough 
inspectors and new technology at international airports to enhance 
security and process passengers in a thorough and timely manner.
    Repeatedly, Congress has given INS the resources and information it 
needs to inspect passengers. As we mentioned previously, Congress 
increased the INS inspection fee on airline passengers from $6 to $7 so 
the agency can deploy more inspectors at international airports. 
Moreover, the aviation security bill that Congress passed last year 
requires airlines to submit detailed passenger information including 
passport and visa numbers to the U.S. Customs Service--which shares 
that information with INS--before an aircraft even lands in the United 
States.
    The report accompanying the House version of the fiscal year 2002 
Commerce-Justice-State Appropriations bill stated that a number of 
airports around the country are short of inspections personnel and that 
it ``expects that this fee increase will enable the INS to meet 
increasing staffing demands and meet the mandated 45 minute inspection 
timeframe at all airports.'' With additional funding, additional 
inspectors and additional passenger information, we agree that the INS 
should be capable of meeting the 45-minute clearance time that Congress 
created ten years ago.
    A lot has changed since then, and continuing to improve security is 
now more important than ever. Airports realize that there will be 
passengers who raise red flags with the INS and who will require 
additional inspections. INS inspectors should focus on those passengers 
and take as much time as they need to inspect them. Airports understand 
that it may be necessary to eliminate the 45-minute clearance time for 
those passengers who are identified by immigration officers as 
requiring secondary inspections.
    Again, however, airports fear that eliminating the time limit for 
all passengers--including those who do not require a secondary 
inspection--will reduce the pressure on the INS to deploy enough 
inspectors and new technology at international airports. Congress has 
given INS additional funding, additional inspectors and additional 
passenger information in the past. It should continue to require the 
agency to use those valuable resources to enhance security at 
international airports and process passengers in a thorough and timely 
manner. We encourage the Subcommittee to include language in the fiscal 
year 2003 Commerce-Justice-State Appropriations bill that will require 
the INS to inspect passengers within 45 minutes unless they are 
identified by immigration officers as requiring secondary inspections.
    Automated Technologies.--In addition deploying an adequate number 
of inspectors and being held to a firm 45-minute clearance time, INS 
needs to introduce automated technologies and risk-based analysis tools 
into its inspections process. These mechanisms will improve customer 
service, assist inspectors in their duties and allow INS to process 
most passengers within 45 minutes.
    In the report accompanying the fiscal year 2002 Commerce-Justice-
State Appropriations bill, the user fees increases will allow the INS 
to invest funds in its automated entry/exit system that tracks alien 
arrivals and departures at airports. It will also allow the agency to 
upgrade the National Automated Inspection Lookout System and deploy 
additional Live Scan Devices that can send electronic fingerprints to 
the Federal Bureau of Investigations. We hope this Subcommittee will 
include funding in the fiscal year 2003 Commerce-Justice-State spending 
bill to allow INS to improve the inspection system by using new 
technology.
    Toward that goal, ACI-NA and AAAE urge Congress to appropriate 
funds for the INS to conduct research and development on technologies 
that will enhance the inspections process. Technologies that should be 
given strong consideration include so-called ``smart credentials'' and 
biometrics. These are tools that airports are urging the newly created 
Transportation Security Administration (TSA) to use to identify 
domestic passengers at airports.
    Airports would like to assist INS on ``smart credentials,'' and we 
think the agency should coordinate its research and development and 
future activity on this initiative with stakeholders including airports 
and airlines. Moreover, we think Congress should direct INS to 
coordinate this activity with TSA and the Department of Transportation. 
INS coordination with those two transportation agencies is vital to 
ensuring that smart credentials can be used efficiently to satisfy the 
requirements of multiple government interests.
    Recruitment, Training and Retention.--In addition to hiring more 
inspectors and using better technology, INS needs to do a better job of 
recruiting, training and retaining the inspectors it already has. ACI-
NA and AAAE urge Congress to appropriate the necessary funds to ensure 
that the INS can improve the recruitment, training, retention of its 
inspectors. While mindful that a small percentage of individuals 
entering the United States may pose a risk, INS must continue to train 
and enhance the customer service mission of inspectors. Foreign 
visitors and tourists are vital to sustaining the nation's economy.
    Enhanced recruitment and training efforts must also be accompanied 
by competitive salaries for INS inspectors. The average entry-level 
annual salary for an INS inspector is under $23,000. That puts INS 
inspectors at the bottom of the pay scale for similar inspectors in 
other agencies. The average entry-level salary for a U.S. Department of 
Agriculture Animal and Plant Health inspector is $34,000 per year. 
Screeners hired by TSA are expected to make up to $35,400 per year. Law 
enforcement officers hired by TSA are expected to make at $45,000 and 
above per year.
    It is imperative that the INS provide a more competitive salary 
package and allow for upward mobility within the inspections program. 
This mobility allows more individuals to enter the Service with a 
career-oriented focus and reduces the possibility that other federal 
agencies will hire individuals trained by INS. INS suffers annual 
financial losses due to individuals leaving the inspections program 
after completion of training. A large number of individuals leaving the 
program are hired by other federal agencies that pay better wages.
    Chairman Hollings, Ranking Member Gregg and Members of the 
Subcommittee, thank you again for your assistance last year and for 
inviting us to submit our testimony on the fiscal year 2003 Commerce, 
Justice, State appropriations bill. All of us at ACI-NA and AAAE look 
forward to working with you during the 107th Congress as you continue 
to work to improve the inspection process and security at airports 
around the country.
                                 ______
                                 

              Prepared Statement of National Public Radio

                              introduction
    Thank you Chairman Hollings and Senator Gregg for giving National 
Public Radio and its hundreds of member stations the opportunity to 
submit written testimony for the record in support of the Public 
Telecommunications Facilities Program (PTFP) and its fiscal year 2003 
appropriation. This year, public broadcasting is requesting that $110 
million be allocated to PTFP. This level of funding will ensure that 
there is sufficient money available to help public broadcasters in 
their conversion to digital audio broadcasting and to maintain and 
expand service.
                                  ptfp
    PTFP is a competitive matching grant program to help public 
broadcasters, state and local governments, and Indian tribes construct 
facilities to bring educational and cultural programs to the public. 
Run by the National Telecommunications and Information Administration 
(NTIA) under the Department of Commerce, this program provides 
financial assistance to stations for capital projects such as replacing 
outdated hardware, purchasing new equipment to expand service to 
unserved areas, and converting to digital technology. It is the only 
capital grant program available to public broadcasters, many of whom 
are constrained in their ability to finance capital expenditures. 
Stations cannot pass their costs on to their listeners, and most cannot 
take out loans for such projects, especially those in rural areas. The 
matching-grant structure of PTFP allows public radio stations to 
leverage funding from local government and private entities while 
providing the money needed to help defray the high costs of capital 
projects.
    The demand for PTFP funding far exceeds the amount of funds 
available. In fiscal 2001, there were 246 applications requesting a 
total of $120 million in funding through PTFP--88 from public radio 
stations and 111 from public television stations--yet only $42 million 
were available. Of those applications, only 105 were awarded money.
    Unfortunately, budget constraints have limited the amount of funds 
available for PTFP grants. Appropriations for the program in fiscal 
year 2002 increased only slightly from fiscal year 2001. Funding PTFP 
at $110 million this year will help to meet the demand for this small, 
but important program, which will help many stations with their 
transition to digital radio as well as help them expand coverage to 
unserved areas.
                        digital radio conversion
    Public radio will soon begin the process of converting to digital 
audio broadcasting. Stations are preparing to upgrade their equipment 
and digitize their programming in anticipation of the Federal 
Communication Commission's impending decision on the creation of a 
digital FM radio standard.\1\ Once the Commission issues its final rule 
later this summer, public radio broadcasters will begin the expensive 
process of converting to a digital format, which is currently estimated 
to cost about $116 million. That amount is solely for the cost of 
transmission and does not include the cost of digitizing production.
---------------------------------------------------------------------------
    \1\ Industry testing is currently occurring on AM-IBOC technology.
---------------------------------------------------------------------------
    Digital radio is expected to transform the radio industry and allow 
it to compete on equal footing with other digitized media. Digital 
technology will allow stations to broadcast near CD quality sound free 
of interference to listeners, as well as help utilize spectrum more 
efficiently. Developed by the industry, In-Band, On-Channel (IBOC) 
technology will allow stations to simultaneously broadcast their analog 
and digital signals using their existing analog AM and FM frequency. 
Unlike television stations, radio stations will not require additional 
spectrum to convert to a digital format.
    In addition to providing near CD quality sound and the efficient 
use of spectrum, digital radio will afford new service opportunities. 
IBOC technology has the potential to provide important new public 
interest programming such as:
  --Assisted-living services, such as radio reading services for the 
        print-impaired and radio captioning;
  --Public safety services such as weather alerts, traffic safety, and 
        national security notifications;
  --Foreign language programming; and
  --Audio-on-demand
    Digital radio will also enable new functions such as the ability to 
search program formats, scan selective programming, and read music 
lyrics and song titles.
    PTFP will play an important role in the public radio system's 
conversion to digital radio technology. Once a FM IBOC standard is 
adopted, many stations will quickly begin the process of converting, 
which will involve high capital costs. PTFP funding will help public 
radio stations finance their projects as well as leverage vital funding 
from other sources.
                             expand service
    NTIA has established a priority system for issuing PTFP awards. 
Stations expanding service to new areas have the top priority in the 
selection process followed by equipment replacement for stations that 
are the only public radio station in a community (level 2), stations 
upgrading their transmitter (level 3), and finally, stations replacing 
equipment (level 4).
    Expansion of public broadcasting to unserved areas is PTFP's first 
priority when issuing grants. For more than 35 years, the program has 
played a major role in the development and expansion of public radio 
throughout the country. Today, more than 90 percent of the American 
public can listen to a public radio station in their community.
    In fiscal year 2001, PTFP awarded eight grants to extend public 
radio signals to over 300,000 unserved individuals. Areas benefiting 
from these awards include Lakeport, California; Lake Okoboji, Iowa; 
Fergus Falls, Minnesota; Altus, Oklahoma; Pelham, North Carolina; rural 
areas east of Charlotte, North Carolina, and 12 interior Alaska 
villages.
                            maintain service
    Maintaining service is also one of PTFP's main priorities. In 
fiscal year 2001, the program awarded 28 grants to help stations 
replace basic equipment. For example, in 2001 PTFP awarded Ohio State 
University $149,491 to replace the 63-year-old broadcast tower and 
concrete base supports of WOSU, which serves approximately six million 
people in the greater Columbus, Ohio area, and to purchase EAS 
emergency warning equipment for the four repeaters of WOSU-FM, which 
serve a population of roughly 1.6 million individuals.
    PTFP also funds the radio reading service for the blind and 
descriptive video services for the disabled. Last year, the Nevada 
Public Radio Corporation was awarded $47,926 to extend the Radio 
Reading Service of KNPR, 89.3 MHz, in Las Vegas, to Reno/Carson City, 
Elko, Ely, and Tonopah, Nevada by acquiring subcarrier generators, STL 
interfaces, an audio-vault, audio receivers, satellite receivers, and 
SCA receivers. The project will provide new radio reading service to an 
estimated 15,000 visually handicapped listeners in the state.
                               conclusion
    For 35 years, PTFP has played a major role in the development of 
public broadcasting throughout the United States. Through the 
assistance the program provides, public radio has grown considerably 
and now reaches just over 90 percent of the U.S. population. That 
funding is even more important now than ever before.
    NPR thanks the Subcommittee for allowing written statements to be 
submitted for the record, and for its long-standing support of public 
broadcasting.
    NPR is a private, nonprofit corporation that produces and 
distributes award-winning programming such as Morning Edition, All 
Things Considered, Performance Today, and Car Talk. NPR is also a 
membership organization. NPR member stations are independent entities 
licensed to a variety of nonprofit organizations, local communities, 
colleges, universities, and other institutions. Public radio stations 
independently select and produce community appropriate programming that 
best serve their listening areas.
                                 ______
                                 

           Prepared Statement of the National Audubon Society

    On behalf of the National Audubon Society and our one million 
members and supporters, we appreciate the opportunity to submit 
testimony regarding funding priorities for the fiscal year 2003 budget 
of the National Marine Fisheries Service (NMFS), and the National Ocean 
Service (NOS). The mission of the National Audubon Society is to 
conserve and restore natural ecosystems, focusing on birds and other 
wildlife and their habitat for the benefit of humanity and the earth's 
biological diversity. Audubon's Living Oceans Program is dedicated to 
protecting and restoring the living communities and special places of 
the seas for fish, seabirds, and other marine life and for the benefit 
of humankind
    To adequately execute their mandates, NMFS and NOS need additional 
monies over those provided in fiscal year 2002. Below is a detailed 
list of those programs Audubon sees as critical funding priorities 
within these agencies, accompanied by what Audubon views as minimum 
necessary appropriations levels at the current time.
                   national marine fisheries service
Science
            Expand Annual Stock Assessments
    The Administration has requested $11.9 million for expanding annual 
stock assessments. This represents an increase of $9.9 million over 
fiscal year 2002 enacted levels. While this level of funding would 
represent an important step in the right direction, it falls well short 
of what is actually needed to improve the science upon which management 
should be based. Accurate stock assessments are the foundation of 
proper management of fishery resources. Without them, rational 
management of fish populations is not possible. With that 
understanding, it is unacceptable that the status of 78 percent of fish 
stocks in U.S. waters remains unknown largely because of inadequate 
funding.
    The Administration's plan to dedicate just $2.4 million toward at-
sea research days is inadequate. This level of funding will purchase 
only 260 at-sea research days, reducing the annual deficit to 1,573 
research days, based on recommendations made in NMFS' Stock Assessment 
Improvement plan. The Committee should, at a minimum, appropriate funds 
adequate to eliminate fully half of the annual research days deficit 
($8.5 million). Audubon supports the $5.1 million increase intended to 
provide for the recruitment and training of stock assessment biologists 
and staff to produce annual stock assessments.
    Recognizing the shortcoming with regard to days-at-sea research 
dollars and noting that the fiscal year 2002 appropriation fell $14.7 
million below the Administration's request, Audubon urges the Congress 
to allocate $18.0 million toward improving stock assessments. Such an 
allocation would demonstrate a commitment toward more informed science-
based management of our nation's fish populations.
            Highly Migratory Shark Fisheries Research Program
    Audubon strongly urges restoration of funding for the Highly 
Migratory Shark Fisheries Research Program. In fiscal year 2002 the 
Administration requested $1 million for this program and Congress 
appropriated $1.5 million. However, in the Administration's fiscal year 
2003 request the program was zeroed out. An effective multi-regional 
collaborative effort, this program conducts fisheries relevant research 
on shark and ray populations in the Gulf of Mexico, Atlantic, and 
Pacific Oceans. The information developed from this program provides 
data that are critical for assessing the status of shark populations 
and management activities. Audubon urges the Committee not only to 
restore funding to this program, but to increase it to $1.95 million 
for fiscal year 2003.
            Pacific Highly Migratory Species Research
    The Administration's request of $750,000 for Pacific highly 
migratory is inadequate. Funding for stock assessments and biological 
studies, as well as improving bycatch mitigation techniques for these 
fisheries, are critical for the long-term health of the fishery. Of 
vital importance to improving management of these species in both the 
near and long-term is the completion of the Pacific Fishery Management 
Council's Highly Migratory Species Fishery Management Plan. To 
guarantee the timely completion of this plan, Audubon proposes that 
appropriations for Pacific highly migratory species research be raised 
to $1.5 million with $500,000 of these appropriations specifically 
dedicated to completion of the Pacific Fishery Management Council's 
plan. These monies should be used, in part, to fund the work necessary 
to make maximum sustainable yield determinations for bigeye and pelagic 
thresher sharks.
            Bluefin Tuna Tagging
    The Administration's request of $850,000 for bluefin tuna research 
is below the level needed to conduct appropriate and necessary 
scientific research. Audubon strongly urges the Congress to appropriate 
$1.15 million and ensure that these research dollars be evenly 
distributed between Stanford University's Hopkins Marine Station and 
the New England Aquarium. The Stanford University research team has 
traditionally led the field in Atlantic bluefin tuna research and their 
expertise should be not be forfeited. In fiscal year 2001 all federal 
bluefin tuna research dollars were allocated to the New England 
Aquarium without explanation or warning, jeopardizing the continuation 
of Stanford University's Atlantic bluefin tuna research program. 
Audubon suggests that $150,000 should be dedicated toward the current 
NMFS program to determine if there is a discrete spawning ground for 
bluefin tuna in the Gulf of Mexico.
            Sea Turtle Research
    Audubon supports the Administration's request of $6.5 million for 
Endangered Species Act Sea Turtle Research, which represents an 
increase of $2.0 million over the fiscal year 2002 enacted levels. With 
sea turtles threatened or endangered on both coasts, it is critical to 
develop information to better recover these animals and to implement 
identified management strategies to reverse declining population 
trends.
            Fisheries Research Vessel
    Audubon supports the Administration's request of an additional 
$45.5 million over fiscal year 2002 enacted levels for the purpose of 
constructing a second NOAA fisheries research vessel. As research 
vessels around the country age, it is critical to give NOAA the 
capacity to continue fisheries research so as not to disrupt time-
series data streams. The new vessel will provide NOAA with the 
capability to continue current research programs and better meet data 
gathering needs in the future.
            Essential Fish Habitat
    The additional $1.5 million within NMFS' $4.8 million base for 
designation and protection of essential fish habitat (EFH)--those 
waters and substrate on which fish depend--is inadequate. The 
Sustainable Fisheries Act of 1996 gave NMFS a clear mandate to identify 
and conserve essential fish habitat. While progress has been made in 
identification of EFH, too little has been done to protect these 
habitats. Audubon recommends that the Congress allocate $11.0 million 
to further refine EFH designations and to take action to conserve EFH.
            Fisheries Oceanography
    The Administration requested $1.0 million for fisheries 
oceanography for fiscal year 2003. This sum is equal to fiscal year 
2002 enacted dollars but $1.0 million less than the Administration's 
fiscal year 2002 request of $2.0 million. Audubon supports dedicating 
$2.0 million for fisheries oceanography as per the Administration's 
fiscal year 2002 request. It is critical to further our understanding 
of how long-term environmental factors affect fish stocks through 
continuing research and development new tools and techniques as 
increasing pressure is brought to bear on fish stocks.
            Horseshoe Crab and Migratory Shorebird Survival Research 
                    Funding
    Audubon urges the Committee to provide $700,000 in fiscal year 2003 
to establish the Horseshoe Crab Population Dynamics Research Program. 
This proposal builds on the recent action by the Commerce Department to 
create a horseshoe crab sanctuary off of the mouth of Delaware Bay. 
This proposed public-private partnership between the Atlantic States 
Marine Fisheries Committee and the Virginia Polytechnic Institute and 
State University's Horseshoe Crab Research Center is critical to 
monitoring the status of declining horseshoe crab populations, 
determining the impact of coastal habitat degradation on them, and 
protecting endangered migratory shorebirds that are dependent on 
horseshoe crabs as a primary food source during migration. The Delaware 
Department of Natural Resources and Environmental Control is also an 
important partner in the research process. Funding is sought through 
the Atlantic States Marine Fisheries Commission, with 100 percent of 
the funds to be passed to the researchers.
Management
            Fishery Observers
    The administration's request of $16.95 million for fisheries 
observer programs represents a modest but inadequate increase of $2.85 
million for fishery observer programs. Because of fiscal constraints, 
observer coverage levels in some fisheries, such as the Atlantic 
pelagic longline fishery, have been below levels mandated by 
international agreements that the United States are a party to, as well 
as below levels dictated by biological opinions issued under the 
authority of the Endangered Species Act. To ensure that observer 
coverage occurs at a statistically reliable level within all areas 
fished, at levels mandated by international agreements and biological 
opinions issued under the ESA, Congress must provide additional money 
to NMFS for fishery observers. Audubon recommends an increase to $25 
million ($11.4 million above fiscal year 2002 enacted levels) to ensure 
that adequate observer programs are implemented without further delay.
            Regional Fishery Management Councils
    The Administration has requested $16.0 million for the Regional 
Fishery Management Council system, which represents an increase of $1.8 
million over the fiscal year 2002 enacted level. Audubon is supportive 
of the proposed increase, however we note that this level of 
appropriations falls short of what is needed to support the work load 
of the eight regional councils. The regional council system is in need 
of significant reform. Needed changes include a more balanced 
distribution of seats between representatives of the commercial, 
recreational, and public interest in marine conservation--currently 
there is only one representative of the conservation community serving 
on the eight councils in aggregate--and more stringent regulations 
regarding recusal of council members from votes where they have a 
financial interest. Nevertheless, Audubon recognizes that despite the 
present Council system's serious flaws, it is under-funded and 
recommends that the Congress increase appropriations to $20.5 million 
for fiscal year 2003. This level of funding represents the aggregate 
fiscal year 2002 request of the eight councils plus $1.5 million to 
close the shortfall stemming from enacted fiscal year 2002 monies. This 
higher level of funding more accurately reflects the appropriations 
necessary for the councils to fully execute their responsibilities.
            International Fisheries Commissions
    The Administration's request of $400,000 for international 
fisheries commission work is insufficient and represents an increase of 
just $1,000 over fiscal year 2002 enacted levels. Fishing vessels of 
many nations are ranging further afield on the oceans to find fish 
every year. The importance of international cooperation in managing 
highly migratory and transboundary species has never been more 
important and the difficulty never greater. Budgetary constraints limit 
the role U.S. scientists play in working on issues of critical 
importance to the United States and the various commissions of which 
the United States is a party. Furthermore, U.S. delegations are often 
understaffed because of travel budget constraints. Audubon urges the 
Congress to allocate an additional $100,000 which will allow a more 
appropriate level of commitment of U.S. resources to international 
negotiations.
            Enforcement and Surveillance
    The Administration's overall request of $50.9 million for 
enforcement and surveillance appropriations represents an important 
commitment toward reigning in illegal fishing activities which 
undermine conservation and management measures established by the NMFS. 
The request represents an increase of $9.6 million over fiscal year 
2002 enacted levels, however, it still falls short of what is needed to 
allow for effective enforcement of current fisheries regulations.
    Vessel Monitoring System (VMS).--VMS is an indispensable satellite 
based fishery monitoring and enforcement tool. Given the increased use 
of large-scale fishery area closures it is the only viable mechanism to 
monitor compliance with time-area closures. Enforcement/monitoring 
alternatives to VMS would be immensely more costly and include 100 
percent observer coverage in some fisheries and the procurement of 
significant numbers of additional enforcement personnel, aircraft and 
ships to patrol area closures. VMS also provides the added benefit of 
improving fisheries management by providing refined real-time data 
regarding spatial and temporal distribution of fishing effort. Within 
the Enforcement and Surveillance account, we are encouraged to see the 
proposed increase to $7.4 million for vessel monitoring systems (VMS). 
This represents an increase of $5.4 million over fiscal year 2002 
enacted levels, and will allow coverage of roughly 1,500 vessels. 
Nevertheless, the coverage afforded by these new dollars would be 
substantially below what is needed on a nationwide basis. An increase 
of $10.4 million over fiscal year 2002 enacted levels to $12.4 million 
is necessary to ensure VMS coverage for a noticeable portion of the 
U.S. commercial fishing vessels.
            Pacific Coastal Salmon Recovery
    The Administration's request of $90 million for the Pacific Coastal 
Salmon Recovery represents a $20 million decrease from fiscal year 2002 
enacted levels. This level is insufficient to adequately execute the 
wide range of activities needed including habitat restoration and 
protection, research, monitoring and evaluation, and salmon recovery 
planning. Audubon recommends that the Committee restore funding to 
fiscal year 2002 enacted levels ($110 million) and that these restored 
funds be dedicated toward establishing a comprehensive regional 
monitoring program. Without a comprehensive region-wide system in place 
it will be impossible to full evaluate the effects of recovery efforts.
            Energy Permit Rapid Response
    The Administration's request of $2.0 million and 13 fulltime 
equivalents (FTE) to support establishment of a streamlined energy 
permit review process for energy related project approvals represents 
an inappropriate diversion of badly needed funds from priority 
programs. Many departments within NMFS are badly under-funded and 
understaffed and unable to meet existing mandates. The diversion of 
this significant amount of money and personnel to expedite energy 
permit review when the agency is unable to meet its current mandates is 
unacceptable. Audubon recommends redirecting these monies toward 
resource management or data collection programs.
National Ocean Service
            Marine Protected Areas Program
    The administration has requested $3 million for the Marine 
Protected Areas (MPA) Program, which represents status quo with regard 
to fiscal year 2002 enacted and requested levels. This amount is 
insufficient and proposes an additional $3.4 million in funding for 
fiscal year 2003, resulting in an aggregate of $6.4 million for the NOS 
MPA program. Of this, we recommend that $1.4 million be dedicated to 
the West Coast marine reserves initiative with $1.0 million going to 
the National MPA Center for natural and social science work and $.4 
million earmarked for the Pacific Council to conduct stakeholder work. 
Preparation of a supporting framework for collaboration between the 
stakeholders, as well as execution of the first comprehensive inventory 
and assessment of existing MPAs in U.S. waters are critical to the 
success of the program and cannot be adequately carried out without 
additional monies beyond those proposed by the Administration.
            Coral Reefs Coral Reef Conservation
    Audubon recommends that the Congress supplement the 
Administration's request of $30.2 million for coral reef conservation 
by an additional $2.0 million. Support for continued monitoring, 
mapping and restoration activities, especially those identified by the 
Interagency Coral Reef Taskforce are critical. Audubon suggests that 
the new monies be directed to the Coral Reef Conservation Fund as 
established under the Coral Reef Conservation Act of 2000. This program 
leverages additional money through public-private partnerships for on-
the-ground coral reef conservation activities.
            National Marine Sanctuaries Program
    Audubon supports the Administration's fiscal year 2003 request of 
$10 million for construction of facilities to educate the public about 
the ocean and the importance of special places in the sea as well to 
reduce the operations and maintenance backlog. The Administration's 
request of $35.6 million for sanctuary operations is below what is 
needed to inventory natural and cultural resources, maintain facilities 
and equipment, and effectively implement and enforce management plans. 
Audubon recommends that the subcommittee provide an additional $2.0 
million over the Administration's request ($37.6 million) for sanctuary 
operations.
    Mr. Chairman and Members of the Committee, thank you for providing 
Audubon the opportunity to comment on funding priorities for the 
National Marine Fisheries Service and the National Ocean Service. I 
understand that it is a large agenda, but the problems facing America's 
marine resources are significant. We look forward to working with you 
to secure a legacy of living oceans for future generations.
                                 ______
                                 

               Prepared Statement of the American Rivers

    This year, American Rivers was joined by over 600 local, regional 
and national conservation organizations \1\ from all 50 states in 
calling for significantly increased funding for the following programs 
in the Commerce, Justice, State and the Judiciary (CJS) Appropriations 
bill. I urge that these requests be incorporated in the CJS 
Appropriations bill for fiscal year 2003.
---------------------------------------------------------------------------
    \1\ These groups have endorsed ``The River Budget 2003'', a report 
of national funding priorities for local river conservation. A list of 
groups endorsing the River Budget can be viewed at http://
www.americanrivers.org/riverbudget/default.htm.
---------------------------------------------------------------------------
         federal salmon plan for the columbia and snake rivers
    Several Members of Congress from the Northwest, as well as the 
Administration, have pledged to work to restore twelve Endangered 
Species Act listed stocks of Snake and Columbia river salmon without 
partially removing the lower four Snake River dams. Congress can help 
honor that commitment by funding the necessary salmon recovery 
measures. More than a year since the release of the 2000 Federal Salmon 
Plan for the Columbia and Snake rivers, federal agencies have failed to 
fulfill three-quarters of its requirements.
    The Salmon Plan relies primarily on improving tributary and estuary 
habitat and reforming hatchery and harvest practices. While most 
fisheries scientists and conservationists believe that partial removal 
of the lower Snake River dams must be the cornerstone of a larger 
strategy to recover Snake River salmon, many elements of the Salmon 
Plan are also necessary to achieve salmon recovery.
    If the Salmon Plan's non-breach recovery package is not funded and 
implemented, or if these actions do not yield the needed biological 
benefit for Snake River stocks, the plan contemplates seeking 
congressional authorization--as soon as next year--to partially remove 
the four lower Snake River dams.
    So far, Salmon Plan implementation has fallen well behind schedule, 
due in part to inadequate federal funding. Full funding for fiscal year 
2003 will require $455.4 million distributed among nine different 
federal agencies through four different appropriations bills. The CJS 
Appropriations bill governs funding for the National Marine Fisheries 
Service (NMFS), which is charged with pursuing and administering the 
Salmon Plan's crucial science and monitoring activities, as well as 
implementing hatchery and harvest reform measures. The administration 
has proposed increasing the NMFS budget for Columbia River salmon by 
nearly 50 percent this year, to $36.6 million. While this increase 
would be helpful, internal NMFS estimates call for funding NMFS 
Columbia Basin salmon programs at nearly twice the level proposed by 
the Administration. To ensure full development of the scientific 
standards, reforms, and restoration activities required by the Federal 
Salmon Plan, Congress should fund NMFS Columbia Basin salmon programs 
at $69.8 million.
                  pacific coastal salmon recovery fund
    Pacific salmon are a national treasure with enormous economic, 
cultural, and environmental significance in the Pacific states of 
Washington, Oregon, California, Idaho, and Alaska. A century ago, 
salmon were an anchor of the region's economy. Unfortunately, past and 
present mismanagement of our rivers, lands, and salmon fisheries have 
caused populations of salmon to decline dramatically over the past 
century, and 26 runs of Pacific salmon and steelhead are now listed 
under the Endangered Species Act.
    One important program aimed at restoring imperiled runs of chinook, 
coho, sockeye, and chum salmon, as well as steelhead trout, is the 
Pacific Coastal Salmon Recovery Fund, funded through the National 
Oceanic and Atmospheric Administration. For the past three years, this 
program has provided much-needed assistance to state, local, and tribal 
governments in Washington, Oregon, California, and Alaska for salmon 
recovery projects. This year we urge Congress to make the State of 
Idaho and Snake River salmon and steelhead eligible to benefit from 
this program as well.
    By substantially increasing funding for the Pacific Coastal Salmon 
Recovery Fund in fiscal year 2003, Congress can help preserve this 
economically, culturally, and ecologically valuable resource and help 
the Northwest states and local communities to adopt and embrace the 
measures needed to restore Pacific salmon and steelhead. Restoring 
salmon will also allow the United States to satisfy treaty obligations 
with Northwest Indian tribes and Canada.
    We urge Congress to fund the Pacific Coastal Salmon Recovery Fund 
at $200 million.
                     fisheries habitat restoration
    The fisheries habitat provided by estuaries and coastal wetlands 
serves many essential functions for communities across the nation. 
Eighty to 90 percent of all recreational fish catch and 75 percent of 
all commercial harvest depends upon healthy coastal and estuarine 
habitats. More than half the coastal wetlands in the lower 48 states 
have been lost, and almost 40 percent of estuarine habitat has been 
impaired by damming and diverting countless rivers and streams.
    The Fisheries Habitat Restoration program, funded through the 
National Oceanic and Atmospheric Administration (NOAA) Restoration 
Center, reaches out to local constituencies to accomplish on-the-
ground, community-based projects to restore estuaries and coastal 
habitats. Partnerships and local involvement are fundamental to the 
success of this program. Partners typically match federal dollars 1:1 
and leverage those dollars up to 10 times more through state and local 
participation. To date, the program has funded 179 projects in 25 
states, promoting fishery habitat restoration in coastal areas with a 
grassroots, bottom-up approach.
    We urge Congress to provide the NOAA Fisheries Habitat Restoration 
Program with $18,000,000 to help more communities restore and protect 
and restore the health of their estuaries and coastal habitats.
                         hydropower relicensing
    The National Marine Fisheries Service (NMFS) would greatly benefit 
from additional funding to address the growing number of hydropower 
dams that need renewal of their operating licenses from the Federal 
Energy Regulatory Commission (FERC). Under the Federal Power Act, NMFS 
plays a role in setting license conditions to protect and conserve 
anadromous (sea-run) fisheries such as Pacific and Atlantic salmon, 
steelhead and sea-run cutthroat trout, and shad. Licenses are nearing 
expiration at hundreds of dams around the country, and workloads are 
increasing for NMFS and other resource agencies. Increasing NMFS's 
limited hydropower relicensing budget would help ensure a more 
efficient licensing process, benefit the hydropower industry, and 
further efforts to protect and restore our nation's anadromous 
fisheries. Congress should provide NMFS with a $2 million increase to 
its Habitat Conservation line item specifically for hydropower 
relicensing.
                                 ______
                                 

   Prepared Statement of the National Recreation and Park Association

    The National Recreation and Park Association appreciates the 
opportunity to comment on programs administered by the departments of 
Commerce, Justice, and State. As the largest single provider of non-
school recreation services in the country, public park and recreation 
entities offer youth in underserved communities, including individuals 
with disabilities, expansive opportunities to engage in positive, 
enriching activities, learning, and community service. Collectively, 
recreation services are provided at over 80,000 sites by a combination 
of professionally and technically trained staff supplemented by 
volunteers. In many jurisdictions public parks and recreation 
coordinate services with law enforcement agencies, schools, and social 
services agencies, resulting in effective prevention and crime 
reduction.
    With this background in mind, the Association urges the 
Subcommittee to consider the following.
                            recommendations
    Reinstatement of authorized funds for the Technology Opportunities 
Program within the Department of Commerce. The digital divide remains a 
serious impediment to communications and learning for millions of 
Americans. Increasingly, but only in small increments, youth and adults 
are gaining access to these technologies and services at local public 
park and recreation sites that also serve as community technology 
centers. Through these opportunities individuals are developing skills 
required for employment and living in the 21st Century.
    Inclusion of public parks and recreation as local eligible agencies 
to receive Justice Assistance Grant (JAG) program funds. The 
Administration proposed that the JAG program replace the Byrne Formula 
Grant Program and the Local Law Enforcement Block Grant program. The 
Administration also proposed that $15 million of JAG funds be set aside 
to support citizen volunteer programs to improve communities' terrorism 
preparedness. Public park and recreation agencies are already 
coordinating disaster preparedness activities, including terrorism 
preparedness. Public park and recreation agencies also coordinate youth 
programs within public housing communities. The Local Law Enforcement 
Block Grant (LLEBG) program of fiscal year 2002 included an earmark of 
$60 million for Boys and Girls clubs in public housing communities. Yet 
public recreation centers run by local governments in these same 
communities are not eligible for these funds. Public recreation and 
park services are typically more far-reaching then individual private 
groups. Thus, they are extremely effective at improving protective 
factors for youth and play a pivotal role in crime prevention. Public 
services are typically jurisdiction-wide including services to 
individuals in public housing communities. The subcommittee should 
specifically reference public agencies as being just as instrumental as 
Boys and Girls clubs in reducing crime and improving youth development 
in public housing communities. We ask the Subcommittee to include 
public recreation and park agencies as eligible entities to receive JAG 
or LLEBG funds.
    An increase in funding for the Juvenile Justice and Delinquency 
Prevention Title V program to $130 million. The Subcommittee reported 
this level of funding for fiscal year 2002. This year, with three 
earmarks of $32 million, only $63 million of Title V funds are actually 
available for the core prevention activities, including public 
recreation, authorized by the Juvenile Justice and Delinquency 
Prevention Act of 1973.
    An increase in Title IID Gang Prevention and Intervention funds to 
$20 million would bolster prevention efforts nationwide. For each youth 
diverted from incarceration, the government saves approximately $43,000 
each year. Prevention services are fully cost-effective; they assist 
youth in developing individual capacities and ability to contribute to 
society.
    Restoration of funds for the Juvenile Accountability Incentive 
Block Grants (JAIBG) program from $215 million to $250 million. The 
Administration's proposed use of these funds includes an earmark of $75 
million for Project Child Safe trigger locks, leaving only $235 million 
for other activities. Legislation reported in the 107th Congress would 
authorize the utilization of JAIBG funds to establish accountability-
based programs that reduce recidivism. Graduated sanctions would 
include: counseling, restitution, community service, or supervised 
probation. Park and recreation agencies already work with law 
enforcement officials to develop accountability-based programs and 
graduated sanctions for youth offenders.
                 perspectives on programs and services
    Youth offenders are four times more likely than non-offending youth 
to commit suicide. Former Surgeon General David Satcher, M.D. observed 
that up to two-thirds of youth in the juvenile justice system actually 
suffer from mental health problems. Higher levels of physical activity 
are associated with lower levels of mental health among young people, 
including anxiety, depression and stress. Research suggests that 
adolescents are also less likely to use substances, including tobacco, 
if they participate in physical activity programs that incorporate life 
skills (not boot camps). The more time youth spend being highly active, 
the greater their self-efficacy and self-esteem are found to be.
    Public park and recreation services emphasize active recreation and 
the contributions of youth to communities through service-learning 
projects and youth advisory committees/councils. Often park and 
recreation agencies collaborate with law enforcement and social service 
agencies. Programs of this type empower youth and frequently spur the 
development of community-wide plans to address developmental, 
vocational, and academic needs of youth as well as their needs for 
health resources.
    Researchers for the 2002 National Research Council's Community 
Programs to Promote Youth Development study assert that workforce 
development programs help youth avoid substance abuse, adolescent 
pregnancy, school failure, and delinquency. Park and recreation-
sponsored workforce development programs, based on proven practices, 
provide urban youth with opportunities to connect with caring adults, 
to develop job skills, and to contribute to their communities. But 
these programs need to include technology skills in order to help youth 
leave poverty through employment; thus the Technology Opportunities 
Program is critical.
    The Parks and Recreation Department of McAllen, Texas, for example, 
operate a computer center in collaboration with the Public Library 
Department. These agencies work together to make classes in a variety 
of ``computer use topics'' available throughout the year to underserved 
populations. Also in Texas, the Austin Park and Recreation Department 
hosts a computer technology center where underserved youth use the 
technologies available to make films about their lives. At a library 
outreach/computer center in North Aurora, Colorado, Parks and 
Recreation for People sponsored a ``Teen Library Corps'' (TLC) to help 
users on the computers, and assist customers with library card 
applications. In addition, the park and recreation department in Taos, 
New Mexico works with a local non-profit, La Plaza Telecommunity, to 
make computers with Internet access available for both adult and youth 
use. These programs are extremely popular and illustrate innovations 
that could be expanded with the help of the Technology Opportunities 
Program. The skills individuals learn at community technology centers 
will enable them to be more competitive for technology based private 
and public sector jobs.
    With the assistance of federally sponsored delinquency prevention 
and technology programs, public park and recreation agencies, staff, 
and civic leaders can strengthen their collective commitment to 
creative, results-oriented programs for underserved communities. The 
Subcommittee can help youth that have access to vital community 
resources to become productive citizens.
    National Recreation and Park Association contacts: Erica Shane 
Hamilton, Policy Associate and Barry Tindall, Director of Public 
Policy, 202/887-0290, [email protected].
                                 ______
                                 
     Prepared Statement of The Humane Society of the United States
    As the largest animal protection organization in the country, we 
appreciate the opportunity to provide testimony to the Appropriation 
Subcommittee on Commerce, Justice, State, and the Judiciary on fiscal 
year 2003 funding items of great importance to The Humane Society of 
the United States and its more than 7 million supporters nationwide.
Protection For Right Whales
    Right whales are arguably the most endangered whale species in U.S. 
jurisdiction. The Scientific Committee of the International Whaling 
Commission has acknowledged the need for urgent action to reduce human-
related causes of mortality in right whales--specifically ship strikes 
and entanglement in fishing gear. The HSUS supports the need for 
additional research and action to protect this fragile species. We 
request $1 million to be allocated to the Department of Transportation 
for the purpose of developing and implementing regulations that would 
either shift shipping lanes to areas with less risk to right whales or 
slow ship speeds through areas in which right whales are known to 
congregate. We ask that $1.5 million be directed to the Department of 
Commerce, National Marine Fisheries Service, for the purpose of 
establishing cooperative enforcement agreements with the States of 
Florida, Georgia, Rhode Island, Massachusetts and Maine. Providing 
funds to assist states in enforcing fishery compliance with federally 
mandated risk reduction measures is important to assuring that 
projected risk reductions are realized. In addition, $2 million should 
be directed to fund research into additional risk reduction measures 
that can be used by commercial fisheries. This money is for several 
purposes including: funding a workshop that would incorporate 
engineering and technical expertise from outside the normal sphere of 
fishery technology to help generate innovative ideas for modifying 
fishing gear; further development of modeling that can help predict 
right whale aggregations; funding of field trials and implementation of 
promising technological developments; and additional aerial surveys of 
the mid-Atlantic right whale migratory corridor.
Protection For Bottlenose Dolphins
    The HSUS also requests that $1.5 million be added to the Department 
of Commerce, National Marine Fisheries Service budget for the purpose 
of expanding research on bottlenose dolphins in the mid-Atlantic. These 
monies would fund expanded survey efforts to estimate population 
abundance, increase biopsy sampling and telemetry efforts to further 
refine understanding of stock boundaries; and to fund additional 
experiments with innovative fishing gear to reduce risk of 
entanglement.
    An additional $1 million should be directed to the National Marine 
Fishery Service to increase the level of coverage of marine mammal 
fishery observers or alternate platforms for quantifying mortality 
levels resulting from interactions with fishing gear.
    We need more and better information if we are going to be 
successful is saving these magnificent animals.
    Thank you in advance for your consideration of our views and we 
would be pleased to talk with you or your staff about our 
recommendations.
                                 ______
                                 

Prepared Statement of the International Research Institute for Climate 
                               Prediction

    Mr. Chairman, thank you for this opportunity to submit testimony 
for the Subcommittee's consideration concerning the fiscal year 2003 
Appropriations Bill for the Office of Global Programs within NOAA/
Department of Commerce.
    Columbia University's Earth Institute houses the International 
Research Institute for Climate Prediction, (IRI), located at the 
Lamont-Doherty Campus of Columbia University. The IRI was selected 
through an intense, competitive process in 1994 by NOAA (1) to produce 
long range, seasonal to interannual forecasts based on major climate 
events such as El Nino, and (2) to develop experimental climate models 
for improvement of climate forecasting and predictions on a global and 
regional scale. NOAA last year extended the original five-year 
agreement to include additional long- range goals and research targets.
    The requests in this statement represent the generic need for the 
maintaining ongoing programs and additional resources needed for NOAA 
and its extramural research collaborators to advance the science and 
accuracy of climate and weather forecasting.
                                summary
    The components of this statement are:
    (1) Maximum support for the Office of Global Programs, funded at a 
minimum at the fiscal year 2003 request level of $72.835 million;
    (2) Funding of $20 million for a Supercomputer to be shared by 
universities/institutions for high end climate modeling and research;
    (3) Funding of $20 million for a Supercomputer for NOAA to be used 
as a backup for National Weather Service and other NOAA forecasting 
purposes, including research.
                     maximum support for ogp budget
    This Committee has supported full funding of the budget request of 
the OGP through the past several appropriations acts. Built in to the 
OGP budget request are the ongoing research initiatives of several 
multiyear efforts, such as the IRI. To maintain continuity and the 
essential research core of NOAA's multi-tiered agenda, assurance of 
continuity and a stable base of funding are paramount. All of NOAA's 
intramural and extramural research initiatives have been determined and 
planned by nonpartisan, scientific experts whose goals have been to 
improve the science, accuracy and lead-time of long range climate 
forecasts, and to improve regional warning systems through down-scale 
modeling from IRI global forecasts.
    The importance of maintaining and sustaining this comprehensive, 
integrated and balanced approach to understanding our climate system 
will permit improved and longer lead time forecasting. This in turn 
will allow better planning for the effects of climate forced events, 
resulting in saved lives, minimized property losses, and improved 
planning in resource allocation and crop planting.
    This request is for maximum funding for NOAA's OGP activities. At a 
minimum, the level for consideration should begin with the fiscal year 
2003 request level of $72.835 million.
                        high end supercomputing
    Current climate modeling in the United States is limited by 
computer capacity.
    The Japanese and European advances in climate modeling and 
forecasting have been enabled through the availability of government 
funded and provided Supercomputers. U.S. climatologists have now 
reached the capacity of currently utilized computer systems in the 
high-end tasks associated with water and atmospheric modeling. The 
ability to process massive amounts of data can be only achieved through 
the acquisition of vector analysis Supercomputers. Vector analysis 
Supercomputers are capable of managing and analyzing large databases, 
such as those involved in multiple climate modeling on a worldwide 
scale.
    Vector analysis computers were not available to U.S. government-
funded institutions until recently, when Cray gained the U.S. marketing 
rights for NEC (Japanese manufactured) vector analysis Supercomputers. 
The current United States approach, using Massive Parallel Processing 
(MPP) technology, cannot process the whole of computer modeling tasks 
associated with water and atmospheric data on a global scale. The 
inherent limitations of the MPP computer architecture cannot embrace 
the data as one complex set of variables and adequately process the 
multiple paths and variables associated with global modeling.
    Generically, scientists acknowledge that the facility must be 
located apart and distinctly separate from NOAA's ongoing computer 
functions, due to the need for a dedicated Supercomputer specifically 
configured for high-end climate and modeling and research. A shared 
computer with NOAA for NOAA's use, whether part-time or back up, does 
not provide the capability and sustained processing power needed for 
the demands associated with high-end climate modeling. This request for 
$20 million in fiscal year 2003 is for a computer to be competitively 
bid and awarded, and for institutions, like the IRI, to have access for 
sharing the use of Supercomputing capacity.
                 national weather service supercomputer
    There is widespread recognition among the extramural research 
community for the necessity of improved capacity and backup among 
computers for the National Weather Service. There is also a recognized 
and documented need in NOAA for a backup computer for the NWS. Last 
year's shutdown of NOAA's main computer, and subsequent loss of 
forecasting ability, left the NWS unable to provide the services upon 
which U.S. citizens, state and local governments, and private industry 
have come to rely. The necessity of a backup is clear, and in times of 
non-use as a backup, NOAA's internal research demands for this capacity 
exist. This statement concerning NOAA's needs represents consensus 
among the extramural community for additional resources and 
Supercomputer capacity for NOAA and the NWS.
    Thank you for this opportunity to present and articulate the needs 
and request for climate modeling and research in the United States.
                                 ______
                                 
                         DEPARTMENT OF JUSTICE

    Prepared Statement of the National Congress of American Indians

    On behalf of the National Congress of American Indians (NCAI) and 
its more than 200 member tribal nations, we are pleased to have the 
opportunity to present written testimony on fiscal year 2003 
appropriations for Commerce-Justice-State.
    The tragic events of September 11 brought forth the strength and 
the determination of our nation to survive in the face of adversity. It 
is this same spirit that has carried Indian Country through years of 
annihilation and termination. It is this same spirit that has propelled 
Indian Nations forward into an era of self-determination. And it is in 
this same spirit of resolve that Indian Nations come before Congress to 
talk about honoring the federal government's treaty obligations and 
trust responsibilities throughout the fiscal year 2003 budget process.
    The federal trust responsibility represents the legal obligation 
made by the U.S. government to Indian tribes when their lands were 
ceded to the United States. This obligation is codified in numerous 
treaties, statutes, Presidential directives, judicial opinions, and 
international doctrines. It can be divided into three general areas--
protection of Indian trust lands; protection of tribal self-governance; 
and provision of basic social, medical, and educational services for 
tribal members.
    NCAI realizes that Congress must make difficult budget choices this 
year. As elected officials, tribal leaders certainly understand the 
competing priorities that members of Congress must weigh over the 
coming months. However, the fact that the federal government has a 
solemn responsibility to address the serious needs facing Indian 
Country remains unchanged, whatever the economic or political climate 
may be. We at NCAI urge you to make a strong commitment to meeting the 
federal trust obligation by fully funding those programs that are vital 
to the creation of vibrant Indian Nations. Such a commitment, coupled 
with continued efforts to strengthen tribal governments and to uphold 
the government-to-government relationship, will truly make a difference 
in helping us to create stable, diversified, and healthy economies in 
Indian Country.
    NCAI's statement focuses on our key areas of concern surrounding 
the President's budget request. Of course, there are numerous other 
programs and initiatives within the Commerce-Justice-State 
appropriations bill that are important to American Indians and Alaska 
Natives. Attached to this testimony is a breakdown of key programs for 
which we urge your support at the highest possible funding level as the 
appropriations process moves forward.
                             public safety
    More than 200 police departments, ranging from tiny departments 
with only two or three officers to those with more than 200 officers, 
help to maintain public safety in Indian Country. According to a recent 
Justice Department \1\ study, the typical Indian Country police 
department has no more than three and as few as one officer patrolling 
an area the size of the state of Delaware.
---------------------------------------------------------------------------
    \1\ U.S. Department of Justice, Office of Justice Programs, 
National Institute of Justice, Policing on American Indian 
Reservations, September 2001.
---------------------------------------------------------------------------
    The same study found that inadequate funding is ``an important 
obstacle to good policing in Indian Country.'' According to DOJ, the 
appropriate police coverage comparison may be between tribal 
departments and communities with similar crime problems. Because the 
violent crime rate in Indian Country is more than double the national 
average, we should compare our police coverage with large urban areas 
with high violent crime rates. According to the Bureau of Justice 
Statistics, cities like Baltimore, Detroit, and Washington have high 
police-to-citizen ratios of 3.9 to 6.6 officers per 1,000 residents. On 
the other hand, virtually no tribal police department has more than 2 
officers per thousand residents.
    We can certainly point to the lack of an adequate police presence 
as a contributing factor to the crime rate that plagues many of our 
communities. The Bureau of Justice Statistics has just released 
findings that the violent crime rate for American Indians and Alaska 
Natives is twice as high as the rate reported by Hispanics and Whites 
and one and one-half times that of African-Americans.
    Another contributing factor is our extremely limited jails space in 
which to house adult and juvenile offenders. According to the Bureau of 
Justice Statistics, tribal jail capacity exceeded 118 percent in 2000, 
an increase of seven percent from the previous year.
    Given that the Justice Department itself just published a study 
that justifies the need to increase resources for Indian Country law 
enforcement, it is astounding to see that our law enforcement programs 
actually took a $40 million direct hit in the fiscal year 2003 budget 
request. The budget would eliminate all $35 million in tribal jail 
construction funding and would cut $5 million in tribal law enforcement 
personnel funds. We strongly oppose these cuts, and request an increase 
to the fiscal year 2002 funding levels for Indian Country law 
enforcement programs.
                          economic development
    The Census Bureau's Poverty in the United States for 2000 showed 
that American Indians and Alaska Natives remain at the bottom of the 
economic ladder--with 25.9 percent of our population falling below the 
poverty line. This compares to an 11.9 percent poverty rate for all 
races combined. Today, unemployment rates in Indian Country are the 
highest in the nation, sometimes topping 50 percent. The development of 
new and diverse businesses in Indian Country is one cornerstone of 
self-sufficiency.
    Many economic development programs that assist tribes would be cut 
or eliminated in the budget. The request for the Small Business 
Administration would eliminate One Stop Capital Shops, Micro-Loan 
Technical Assistance, New Markets Venture Capital, and BusinessLINC. 
The Administration also failed to request any funding whatsoever to 
establish the Office of Native American Business Development, as 
authorized in the Native American Business Development, Trade 
Promotion, and Tourism Act of 2000.
    Furthermore, programs designed to help tribes close the ``dial-tone 
divide'' and improve the telecommunications infrastructures in their 
communities are eliminated outright or severely reduced in the 
President's budget. Nowhere is the lack of telecommunications 
infrastructure more apparent than in Indian Country. According to 
Commerce Department statistics, nearly forty percent of rural Native 
American households lack basic telephone service, and less than ten 
percent have a personal computer or any kind of access to the Internet.
    Since 1994, the Technology Opportunities Program (TOP) has helped 
to improve the technology infrastructure in American Indian and Alaska 
Native communities. In fiscal year 2002, a record $4.23 million was 
provided to projects directly benefiting Indian Country. These grants, 
combined with contributions from the private sector and state and local 
organizations, extend the benefits of advanced telecommunications 
technologies to underserved communities.
    Reducing or eliminating economic development tools for Indian 
Country is unthinkable in the face of the compelling needs that exist. 
NCAI has approved numerous resolutions \2\ calling for increased 
support of economic development programs within the Small Business 
Administration and Department of Commerce, and we urge that these 
programs and others that are designed to promote tribal community 
development be fully funded.
---------------------------------------------------------------------------
    \2\ See attached resolutions SPO-01-019, SPO-01-020, SPO-01-022, 
SPO-01-024.
---------------------------------------------------------------------------
                               conclusion
    Thank you for this opportunity to present written testimony 
regarding Commerce-Justice-State appropriations programs that benefit 
Indian Country. The National Congress of American Indians calls upon 
Congress to fulfill the federal government's fiduciary duty to American 
Indians and Alaska Native people. This responsibility should never be 
compromised or diminished because of any political agenda or budget cut 
scenario. Tribes throughout the nation relinquished their lands and in 
return received a trust obligation, and we ask that Congress maintain 
this solemn obligation to Indian Country and continue to assist tribal 
governments as we build strong, diverse, and healthy nations for our 
people.
 Attachment A.--Commerce-Justice-State Appropriations Benefiting Tribes
                         department of commerce
    The budget request for the Commerce Department is approximately 
$5.2 billion, $14 million less than the estimate for the current year. 
Like last year, the Administration has proposed elimination of the 
Technology Opportunities Program, which in fiscal year 2001 provided 
$4.2 million in competitive grants to tribes and tribal organizations 
for the purpose of expanding telecommunications and technology in their 
communities. No funds were requested to establish the Office of Native 
American Business Development, as authorized in the Native American 
Business Development, Trade Promotion, and Tourism Act of 2000.

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year     Fiscal year     Fiscal year
                            Commerce                               2001 enacted    2002 enacted    2003 request
----------------------------------------------------------------------------------------------------------------
Economic Development Administration.............................           412.0           335.0           317.2
Minority Business Development Agency............................            27.0            28.4            29.8
Public Telecommunications Facilities............................            43.5            43.5            43.6
Technology Opportunities Program................................            43.5            15.5  ..............
----------------------------------------------------------------------------------------------------------------

    NCAI Resolution #SPO-01-020--Supports a $300 million increase to 
the Economic Development Administration in fiscal year 2003 to support 
increased financial assistance to tribal economic and development and 
planning projects, including tribal manufacturing.
    NCAI Resolution #SPO-01-022--Supports funding for the Office of 
Native American Business Development.
    Department of Justice Indian Country law enforcement programs took 
a hit in the fiscal year 2003 DOJ request, with the Administration 
proposing to eliminate all $35 million in tribal jail construction 
funding and to cut $5 million in tribal law enforcement personnel 
funds.

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year     Fiscal year     Fiscal year
                               DOJ                                 2001 enacted    2002 enacted    2003 request
----------------------------------------------------------------------------------------------------------------
U.S. Attorneys..................................................            5.00  ..............  ..............
Jail Construction...............................................           33.93           35.19  ..............
Tribal Courts...................................................            7.98            7.98            7.98
Alcohol and Substance Abuse.....................................            4.99            4.99            4.99
Juvenile Justice \1\............................................           12.47           12.47           12.47
Law Enforcement Personnel (COPS Grants) \2\.....................           40.00           35.00           30.00
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2002 Juvenile Justice Funds also can be used for prevention activities focusing on alcohol and
  drugs.
\2\ As in previous years, fiscal year 2002 law enforcement personnel funds can be used for equipment and
  training.

                     small business administration
    The fiscal year 2003 request for the SBA is $798 million, down from 
$1.1 billion in fiscal year 2002 spending. While funding for Small 
Business Development Centers would rise under the President's proposal, 
many other programs that assist tribes would be eliminated.

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year     Fiscal year     Fiscal year
                               SBA                                 2001 enacted    2002 enacted    2003 request
----------------------------------------------------------------------------------------------------------------
Small Business Development Centers..............................              88              88             161
One Stop Capital Shops..........................................               3  ..............  ..............
Micro-Loan Technical Assistance.................................              20              18  ..............
New Markets Venture Capital.....................................              37  ..............  ..............
BusinessLINC....................................................               7               2  ..............
----------------------------------------------------------------------------------------------------------------

    NCAI Resolution #SPO-01-019--Support $25 million for SBA Office of 
Native American Affairs in fiscal year 2003 to provide training and 
technical assistance and to develop and expand Tribal Business 
Information Centers.
    NCAI Resolution #SPO-01-024--Supports $750,000 in fiscal year 2003 
to the SBA Office of Women-Owned Businesses to establish an American 
Indian, Alaska Native, and Native Hawaiian Women Entrepreneur Outreach 
and Technical Assistance Pilot Project.
                                 ______
                                 
 Prepared Statement of the Middle Atlantic-Great Lakes Organized Crime 
                        Law Enforcement Network
    The Regional Information Sharing Systems (RISS) Program 
respectfully requests that Congress, as authorized in the USA PATRIOT 
ACT of 2001 (Public Law 107-56) appropriate for fiscal year 2003, $50 
million to continue their support in combating drug trafficking and 
organized crime.
    These funds will enable RISS to continue its mandate of assisting 
law enforcement in identifying, targeting, prosecuting, and removing 
criminal conspirators involved in terrorism activity, drug trafficking, 
organized criminal activity, criminal gangs, and violent crime that 
span multijurisdictional boundaries. Funds will allow RISS to continue 
to support the investigation and prosecution efforts of almost 6,000 
local, state, and federal law enforcement member agencies across the 
nation comprising 675,000 sworn law enforcement personnel.
    Through funding from Congress, RISS has implemented and operates 
the only secure Web-based nationwide network--called riss.net--for 
communications and sharing of criminal intelligence by local, state, 
and federal law enforcement agencies. Funds will allow RISS to upgrade 
the technology infrastructure and resources to support increased use 
and reliance on the system by member law enforcement agencies and 
support the integration of other systems connected to riss.net for 
information sharing and communication. Using Virtual Private Network 
technology, the law enforcement users access the public Internet from 
their desktop and have a secure connection over the private riss.net 
intranet to all RISS criminal intelligence databases and resources. 
RISS member law enforcement agencies accessed riss.net an average of 
3.6 million times per month during fiscal year 2001. Riss.net is a 
proven, highly effective system that improves the quality of criminal 
intelligence information available and puts it in the hands of the law 
enforcement officers to make key decisions at critical points in their 
investigation and prosecution efforts.
    The Office of Justice Programs (OJP), Regional Information Sharing 
Systems (RISS) is a federally funded program comprised of six regional 
intelligence centers. The six centers provide criminal information 
exchange and other related operational support services to local, 
state, and federal law enforcement agencies located in all fifty 
states, the District of Columbia, U.S. territories, Canada, England, 
and Australia. These centers are:
  --Middle Atlantic-Great Lakes Organized Crime Law Enforcement Network 
        (MAGLOCLEN): Delaware, District of Columbia, Indiana, Maryland, 
        Michigan, Pennsylvania, Ohio, New Jersey, and New York, as well 
        as Canada and England.
  --Mid-States Organized Crime Information Center (MOCIC): Illinois, 
        Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, 
        South Dakota, and Wisconsin, as well as Canada.
  --New England State Police Information Network (NESPIN): Connecticut, 
        Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont, 
        as well as Canada.
  --Regional Organized Crime Information Center (ROCIC): Alabama, 
        Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, 
        North Carolina, Oklahoma, South Carolina, Tennessee, Texas, 
        Virginia, and West Virginia, as well as Puerto Rico and the 
        U.S. Virgin Islands.
  --Rocky Mountain Information Network (RMIN): Arizona, Colorado, 
        Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming, as well 
        as Canada.
  --Western States Information Network (WSIN): Alaska, California, 
        Hawaii, Oregon, and Washington, as well as Canada, Guam, and 
        Australia.
    Since the September 11th attacks, the idea of putting the right 
information in the right hands has been offered as a solution to the 
war on terrorism. Because of this, information technology will play a 
key role. The RISS secure Intranet; a proven, trusted law enforcement-
sharing network will play a vital role in responding to terrorist 
activity.
    RISS is also a force multiplier in responding to increased violent 
criminal activity by street gangs, drug traffickers, sophisticated 
cyber criminals, and emerging criminal groups that require a 
cooperative effort by local, state, and federal law enforcement. There 
is a rising presence of organized and mobile narcotics crime, 
distinguished by increases in drug-related emergency room incidents, 
increases in drug purities (especially heroin, methamphetamine, 
ecstasy, cocaine, GHB, and marijuana), and increasing communications 
sophistication by the criminal networks. Interagency cooperation has 
proven to be the best method to combat the increasing criminal activity 
in these areas. The RISS centers are filling law enforcement's need for 
rapid, but controlled sharing of information and intelligence 
pertaining to known or suspected drug traffickers and criminals. 
Congress funded the RISS Program to address this need as evidenced by 
its authorization in the Anti-Drug Abuse Act of 1988 and the USA 
PATRIOT ACT of 2001.
    The success of RISS has been acknowledged and vigorously endorsed 
by the International Association of Chiefs of Police (IACP), as well as 
other national law enforcement groups such as the National Sheriff's 
Association (NSA) and the National Fraternal Order of Police (NFOP). 
These groups have seen the value of this congressional program to law 
enforcement nationally and have worked with the National Association of 
Attorneys General (NAAG), the National District Attorneys Association 
(NDAA), and the National Criminal Justice Association (NCJA) to further 
strengthen the awareness of RISS. In fact, the National Association of 
Attorneys General passed a resolution calling for full funding for RISS 
and increased funding for the Bureau of Justice Assistance (BJA).
    According to the Executive Working Group for Federal-State-Local 
Prosecutorial Relations, in its publication titled, Toward a Drug Free 
America: A Nationwide Blueprint for State and Local Drug Control 
Strategies, ``Each state should develop a computerized capacity to 
store, collate, and retrieve intelligence and historical information 
concerning drug offenders. Before initiating new computer projects, 
each state should take advantage of existing computerized information 
exchange and pointer systems, such as the Regional Information Sharing 
Systems (RISS). Each state should actively participate in multi-state, 
regional, and national information networking projects.''
    RISS is operating current state-of-the-art technical capabilities 
and systems architecture that allow local, state, and federal law 
enforcement member agencies to interact electronically with one another 
in a secure environment. The RISS system has built-in accountability 
and security. The RISS secure intranet (riss.net) protects information 
through use of encryption, smart cards, Internet protocol security 
standards, and firewalls to prevent unauthorized access. The RISS 
system is governed by the operating principles and security and privacy 
standards of 28 CFR Part 23 (Criminal Intelligence Systems Operating 
Policies). The technical architecture adopted by RISS requires proper 
authorization to access information, but also provides flexibility in 
the levels of electronic access assigned to individual users based on 
security and need-to-know issues. Riss.net supports secure e-mail and 
is easily accessible using the Internet. This type of system and 
architecture is referenced and recommended in the General Counterdrug 
Intelligence Plan (GCIP).
    The GCIP promotes federal, state, local, and tribal law enforcement 
information sharing, and leveraging resources and existing cooperative 
mechanisms. RISS fully supports the GCIP and the following initiatives 
are underway related to action items in the Plan. RISS has entered into 
a partnership with the High Intensity Drug Trafficking Areas (HIDTA) to 
electronically connect all of the HIDTAs to riss.net for communications 
and information sharing. Currently 13 HIDTAs are electronically 
connected as nodes to riss.net and RISS is working to complete the 
connection of the remaining HIDTAs. Seven state agencies are currently 
connected as nodes on riss.net with an additional ten states pending 
connection. The National Drug Intelligence Center (NDIC) is a member of 
RISS and uses the RISS network as a communications mechanism for 
publishing counterdrug intelligence products to federal, state, and 
local law enforcement members. RISS and the El Paso Intelligence Center 
(EPIC) officials entered into a partnership and have electronically 
connected EPIC as a node to riss.net to capture clandestine laboratory 
seizure data from RISS state and local law enforcement member agencies. 
Riss.net has also been recommended by Attorney General Ashcroft as the 
communications link to the ninety-three U.S. Attorney's offices for 
instant communication regarding terrorist activities. RISS needs funds 
to purchase hardware and software to support and integrate these 
systems that improve the accessibility to critical criminal 
intelligence for law enforcement agencies throughout the country.
    RISS continues to promote interagency investigations by improving 
capabilities for member agencies to quickly and easily access RISS 
databases by expanding the enrollment of member agencies for access to 
riss.net through distribution of security hardware and software. Web 
browser technology has been implemented for use by member agencies in 
accessing the RISS intelligence database pointer system and the RISS 
National Gang Database. At the direction of Congress, dial-up (800) 
access capability to the RISS secure intranet will be provided for 
member agencies in geographic areas where access to Internet Service 
Providers is not available. Funds are required to increase the 
distribution of security hardware and software to additional RISS 
member agencies that need electronic access to riss.net.
    In fiscal year 2002, Congress invested $28.3 million in the RISS 
Program. During the past 5 fiscal year funding cycles and up to the 
current time, RISS has furnished case specific support to hundreds of 
local and state police, as well as sheriff departments. These 
investigations have had an unrivaled impact on the local jurisdictions 
of main street America, the grass roots of law enforcement in the 
nation. During this same time period, RISS implemented the secure 
intranet providing Web-based access for communications and information 
sharing to almost 6,000 law enforcement agencies nationwide--a network 
which is now electronically linked to 13 HIDTAs, seven state law 
enforcement systems, and the EPIC Clandestine Laboratory Seizure 
System. The Southwest Border States Anti-Drug Information System 
(SWBSADIS) initiative encompassing the states of Arizona, California, 
New Mexico, and Texas is also integrated with riss.net. RISS is 
currently working to connect the Bureau of Land Management, Department 
of Interior, NW3C, and FINCen to riss.net as nodes. To support this 
increased need to integrate other systems and the increased demand for 
RISS services, RISS is requesting an increase in funding to $50 million 
for fiscal year 2003.
    In view of today's increasing demands on federal, state, and local 
law enforcement budgets, requests for RISS services have risen. The 
Institute for Intergovernmental Research (IIR) report on the RISS 
Program showed that as of December 31, 2001, the number of criminal 
subjects maintained in the RISSIntel intelligence databases for all 
centers combined was 882,679 with 159,035 new subjects being added in 
2001. The combined databases of all six RISS centers also maintained 
data on 1,491,827 locations, vehicles, weapons, and telephone numbers 
for a grand total of 2,374,506 data entries available for search. For 
the twelve-month period January through December 2001, the total number 
of inquiries by law enforcement member agencies to the RISSIntel 
database for all six regional intelligence centers combined was 
618,262. These inquiries resulted in hits or information to assist law 
enforcement agencies in their criminal cases. All RISS centers combined 
delivered 11,169 analytical products to member agencies in support of 
their investigation and prosecution efforts in 2001.
    This support of law enforcement has had a dramatic impact on the 
success of their investigations. Over the three-year period 1999-2001, 
RISS generated a return by member agencies that resulted in 11,772 
arrests, seizure of narcotics valued over $242 million, seizure of 
almost $15 million in currency, and recovery or seizure of property 
valued at over $24 million. In addition, almost $4 million was seized 
through RICO civil procedures. In the 21-year period since 1980 when 
the Program was fully implemented, the RISS Program has assisted its 
member agencies with their investigations. Results of these 
investigations have amounted to over $12.6 billion in recoveries at a 
total cost that approximates 2.52 percent of that amount, or a $40 
return for every dollar spent.
    RISS is continuing initiatives with the Federal Bureau of 
Investigation and with the Bureau of Alcohol, Tobacco and Firearms, 
U.S. Department of the Treasury to assist in their efforts to 
facilitate the exchange of criminal intelligence with state and local 
law enforcement. RISS continues to work with federal and state 
corrections departments to strengthen cooperation and information 
sharing with the law enforcement community, and to maintain a national 
prison gang database to identify prison gang criminal activity, both 
within and outside the prison environment. We have established a 
working relationship with gang investigators across the nation to 
identify and maintain information on violent street gangs, as well as 
their membership, organization structure, migration trends, and their 
propensity for violence.
    RISS has also assisted the Office of Juvenile Justice and 
Delinquency Prevention, and continues to work with federal, state, and 
local agencies in their efforts to combat the menace of drugs on our 
street, and the growing influence of youth gangs in the distribution 
and sale of drugs.
    The Bureau of Justice Assistance administers the RISS Program and 
has established guidelines for provision of services to member 
agencies. The RISS regional intelligence centers are subject to 
oversight, monitoring, and auditing by the U.S. Congress, the General 
Accounting Office, a federally funded program evaluation office; the 
U.S. Department of Justice, Bureau of Justice Assistance; and local 
government units. The Intelligence Systems Policy Review Board also 
monitors the RISS centers for 28 CFR Part 23 compliance. This 28 CFR 
Part 23 regulation places stricter controls on the RISS intelligence 
sharing function than those placed on federal, state, or local 
agencies. Evaluation of RISS center operation has been very positive.
    Full funding of the RISS Program is necessary in order to permit 
membership growth and improve service capabilities to the membership 
nationwide. In the past five years, RISS membership has increased 25 
percent to almost 6,000 local, state, and federal law enforcement 
agencies at present. It is respectfully requested that the Congress 
fully fund the RISS Program as a line item in the congressional budget, 
in the requested amount of $50 million.
    We are grateful for this opportunity to provide the committee with 
this testimony and appreciate the support this committee has 
continuously provided to the RISS Program.
                                 ______
                                 
 Prepared Statement of the National, Coordinated Law-Related Education 
                                Program
    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). The National, Coordinated Law-Related Education Program 
received an appropriations earmark for fiscal year 2002 in the amount 
of $1.9 million.\1\ The need for the Program continues to substantially 
exceed the Program's resources. Accordingly, for fiscal year 2003, the 
National, Coordinated Law-Related Education Program respectfully 
requests the Subcommittee's appropriations support at a level of $2.4 
million. In addition to helping LRE to meet the increasing demands on 
the Program, this increased funding level would also (1) allow the 
Program to increase its funding to state LRE programs; and (2) make 
expansion of the Program possible in three critical areas including 
teaching students about terrorism; youth offender reentry programs; and 
school safety.
---------------------------------------------------------------------------
    \1\ Ten percent of the fiscal year 2002 earmark will be set aside 
for an independent evaluation of the Program as required by the 
Conference Report accompanying the fiscal year 2002 appropriations act 
for the Departments of Commerce, Justice, and State, the Judiciary and 
Related Agencies.
---------------------------------------------------------------------------
 lre/youth for justice--helping young people to identify and implement 
                         solutions to violence
    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 urban, suburban 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 2002, 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.
  the national, coordinated law-related education program is a vital, 
                         cost-effective 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 Division for 
Public Education; 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 the nationwide program.
    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. This program:
  --Involves young people in identifying and implementing solutions to 
        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;
  --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 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 to the LRE field. For example, LRE has posted a 
planning guide for its Youth Summits on the Internet as well as free 
competition mock trials and descriptions of and contact information for 
state LRE programs.
    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. Each Spring, thousands of 
young people from both the school and juvenile justice settings gather 
with public officials to participate in Youth Summits designed to help 
develop public policy to help prevent 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 also reaches juvenile offenders in 
halfway houses, detention centers, and other non-school settings.
      expansion of the national program is critical in three areas
    The National, Coordinated Law-Related Education Program has 
identified three areas in which expansion of the National Program is 
critical. In addition to allowing the Program to increase its funding 
to state LRE programs, funding at the $2.4 million level would make 
expansion in the following three areas possible: (1) teaching students 
about terrorism; (2) youth offender reentry programs; and (3) school 
safety.
    Teaching Students About Terrorism.--The expanded program would 
allow state centers to link with homeland security efforts. 
Specifically, the National Coordinated Law-Related Education Program 
would use the national network of statewide LRE centers to provide 
specially developed educational materials for teaching students about 
terrorism, including the constitutional powers of the executive and 
legislative branches in dealing with war and foreign affairs. In 
addition, specially developed educational materials would also address 
the role of the judicial branch in analyzing the tension between the 
compelling need to protect against terrorism while, at the same time, 
protecting individuals' civil liberties.
    Youth Offender Reentry Programs.--Additional funding for fiscal 
year 2003 would allow Youth for Justice to expand its pilot efforts to 
add cutting-edge life skills and civic participation educational 
components to youth offender reentry programs being promoted by the 
U.S. Department of Justice around the country. As part of the 
Department of Justice's efforts to strengthen reentry programs, Youth 
for Justice would customize lesson plans for use in reentry programs in 
correctional settings as well as in community-based settings.
    Increased Focus on School Safety.--The Program also plans to 
increase its focus on school safety through special training for school 
resource officers and other school officials as well as through a 
partnership with the National Resource Center for Safe Schools.
           assistance to state law-related education programs
    Assistance from the National, Coordinated Law-Related Education 
Program continues to enhance state Law-Related Education programs. For 
example--
    South Carolina.--In South Carolina, students participate in mock 
trials, mock congressional hearings through the We the People Program, 
and learn conflict resolution skills from teachers who receive training 
through LRE. In May 2000, the South Carolina Bar hosted the 17th Annual 
National High School Mock Trial Championships in Columbia. In July 
2002, the South Carolina Bar will host the Southeastern Regional We the 
People Summer Institute for classroom teachers. The LRE Division of the 
South Carolina Bar also enjoys collaborative efforts with such groups 
as the South Carolina Department of Education, the South Carolina 
Council for Social Studies, the South Carolina Middle School 
Association, the South Carolina Department of Juvenile Justice, the 
South Carolina Association of School Resource Officers/State 
Association of Crime Prevention Officers, and the South Carolina 
Criminal Justice Academy.
    Hawaii.--The LRE program in Hawaii provides training and funds for 
several education projects in Hawaii's public and private schools 
including We the People, Project Citizen, and Kids Voting Hawaii. This 
year's LRE support allowed the Hawaii State Judiciary and non-profit 
Hawaii Friends of Civic and Law-Related Education to continue Parents 
and the Law (PAL), a project providing legal information to at-risk 
parents at every public high school teen parenting class in the state, 
as well as several juvenile detention facilities, adult corrections 
settings, and social service agencies.
    New Hampshire.--The LRE program in New Hampshire operates statewide 
and helps thousands of young people throughout the state each year to 
appreciate our democracy and participate in our democracy as law-
abiding, effective citizens. The LRE program in New Hampshire has a 
busy 2002 schedule. The Nashua High School team won the statewide We 
the People competition in January, and the mock trial competition was 
held in early April. Both winning teams will participate in the 
national competitions. The Lawyer in Every School project is well 
underway for the first week of May.
    Colorado.--In Colorado, over 300 teachers attended the 2001 annual 
public-private partnership conference--the largest number in the past 
sixteen years. The conference theme, Balancing Liberty and Security, 
provided an opportunity for teachers to renew their commitment to teach 
about our democratic institutions in the wake of the terrorist attack 
on the United States. In addition, in May, for the eighth year in a 
row, at-risk youth from Colorado schools will participate in a Colorado 
Project Citizen Showcase where they meet with federal, state, and local 
policymakers to present youth perspectives on policy issues that impact 
their lives. Hundreds of students participate in this youth-empowering 
program.
            evaluations and studies 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 the 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 review of the research in Law-Related Education and related 
        fields conducted by Dr. Jeffery W. Cornett (April 1997) 
        concludes that LRE programs have a positive effect on student 
        knowledge about law and legal processes, and about individual 
        rights and responsibilities. Research studies indicate that 
        effective LRE programs have improved juveniles' attitudes 
        toward the justice system and toward authorities.
  --In January 2001, Caliber Associates, the Office of Juvenile Justice 
        and Delinquency Prevention's evaluation contractor, analyzed 
        Law-Related Education in terms of programs proven to be 
        effective in delinquency prevention and intervention. The 
        results of this study demonstrate the promise of Law-Related 
        Education with respect to delinquency prevention and 
        intervention.
                               conclusion
    The National, Coordinated Law-Related Education Program has a 
unique and remarkable record of achievement and continued support is 
crucial for the following reasons:
    First, congressional support for Law-Related Education is vital to 
its survival.
    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 state coordinating organizations.
    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 $2.4 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
    The Membership Group of SEARCH submits this testimony seeking 
appropriation support for our National Technical Assistance and 
Training Program in the fiscal year 2003 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 2002 
in the amount of $2.0 million. For the reasons described below, we 
respectfully submit this testimony to request funding at the $4.0 
million level for fiscal year 2003.
    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 helps state and local agencies work 
more efficiently and effectively through the use of advanced 
information technology, and it also creates the foundation for a 
national information infrastructure for justice systems.
    SEARCH continues to experience steady growth in demand for the 
program. We are also experiencing a marked increase in the complexity 
of these efforts, as many involve multiple agencies or jurisdictions 
and an increase in the amount of time spent on research and site 
visits--often as many as four visits per assistance effort. 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, the Local Law Enforcement Block Grants 
Program, the COPS Technology Grant Program and the Crime Identification 
Technology Act, which have provided seed money for justice information 
systems automation and integration.
    Also impacting the continued 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. 
The need to share information quickly has dramatically escalated as a 
result of the terrorist attacks of September 11, 2001. Criminal justice 
agencies need to share information in order for the system of justice 
to function, and for purposes of national security. These agencies are 
now confronted with an urgency to exchange information that they have 
not previously experienced. The need to capture, analyze and share 
information among federal, state and local justice agencies (and other 
government agencies involved in homeland security efforts) has never 
been more evident or more important.
    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 Benefits all States
    SEARCH provides technical assistance via written correspondence, 
telephone consultaions, electronic mail, an Internet Website and onsite 
visits to agencies nationwide (including assistance focusing on 
statewide or regional justice integration efforts), as well as 
assistance provided at our National Criminal Justice Computer 
Laboratory and Training Center in Sacramento, California. SEARCH is 
responsive to technical assistance requests from every state, assisting 
agencies from all branches of government (state, county, city, 
regional) and providing guidance to every discipline in the justice 
system, including law enforcement, courts, prosecution, probation, 
parole, corrections and other case management agencies.
    Integrated systems assistance typically involves being onsite to 
help a state or region establish an automated justice information 
system, or evaluate and plan for multiagency integration of existing 
systems. These efforts are typically significant and complex, can 
involve multiple agencies and site visits, and deal with issues with 
far-reaching impact on state and local governments. SEARCH is currently 
providing such long-term assistance to agencies in Colorado, Hawaii, 
Kentucky, Texas, Washington and Wisconsin, among others.
    In the past year, SEARCH has provided hundreds of technical 
assistance efforts via telephone, letter and email; thousands of 
Internet-based assistance efforts; and dozens of technical assistance 
efforts provided onsite at justice agencies or at our Sacramento 
facility. In fiscal year 2003, as mentioned earlier, we expect those 
numbers to increase dramatically as demand for our technical assistance 
services rises.
National Training Program Can Help Justice Agencies Enhance Their 
        Information-sharing Capabilities, Which is Vitally Important to 
        Homeland Security
    In light of the terrorist attacks of last September 11, it is 
critical that state and local criminal justice agencies be able to use 
information technology in the fight against terrorism and, in 
particular, to share information with federal, state and local agencies 
with homeland security responsibilities. The nature of the technical 
assistance requests that SEARCH receives is expected to broaden and 
involve problems associated with the automated sharing of information 
related to: The deployment and support of first responders; the 
prediction of terrorist activity; and the identification and 
investigation of individual terrorists or terrorist groups.
    Agencies needing information from state and local criminal justice 
agencies include, for example, the White House Office of Homeland 
Security and state and local offices of homeland security and defense; 
the Federal Emergency Management Agency and state and local offices of 
emergency preparedness; the Immigration and Naturalization Service; and 
the U.S. Department of Transportation and its Transportation Security 
Administration.
    SEARCH's request for a funding increase of $2.0 million over its 
fiscal year 2002 earmark would allow the National Technical Assistance 
and Training Program to meet approximately 40 additional technical 
assistance requests.
National Training Program Continues to be Responsive to Cybercrime 
        Threats
    SEARCH continues to help the nation's law enforcement agencies 
combat the escalating problem of computer crime by training and 
equipping them with the skills needed to investigate cybercrime, make 
arrests and prosecute offenders. Since its inception, SEARCH's National 
Technical Assistance and Training Program has trained more than 31,000 
criminal justice officials from every state in the use of computers and 
other information technologies. In fiscal year 2002, SEARCH will train 
more than 3,000 state and local criminal justice officials across the 
nation, both at agencies and at our National Criminal Justice Computer 
Laboratory and Training Center in Sacramento. SEARCH has implemented a 
Mobile Training Center, which uses laptops and other mobile equipment, 
to provide training at more sites nationally.
    Training courses focus on providing investigators with critical 
operational skills, knowledge and techniques that will have a real-
world impact, enabling them to gain a technological edge over the new 
breed of criminals who use computer technology to commit crimes such as 
fraud, theft and the online sexual exploitation of children. SEARCH's 
training courses, which range from one day to two weeks in length, 
include: The Investigation of Computer Crime; The Seizure and 
Examination of Microcomputers; Basic Local Area Network Investigations; 
Introduction to Internet Crime Investigations; Advanced Internet 
Investigations; and The Investigation of On-line Child Exploitation.
    To help our trainees keep pace with the ever-changing environment 
of cybercrime, SEARCH has developed two new courses, which will debut 
in 2002: Digital Media Analysis and The Investigation of Online Child 
Exploitation II. We are also beginning development of an Advanced 
Computer Forensics course, which we expect to debut in 2003. In the 
past year, among those attending SEARCH training were staff from 
justice agencies in Alaska, Colorado, Hawaii, Kentucky, Maryland, New 
Hampshire, New Mexico, Rhode Island, South Carolina, Texas, Vermont, 
Washington and Wisconsin.
Selected Examples of Assistance
    The following illustrates just a few examples of SEARCH technical 
assistance and training efforts in the past year and the broad range of 
agencies served.
    South Carolina.--A team of justice officials, including 
representatives of the South Carolina Judicial Department and 
Department of Corrections, attended SEARCH training on integrated 
justice information systems (IJIS) issues, such as strategic planning; 
developing governance structures; funding, leadership and management 
strategies; and technology standards. SEARCH also provided hardware and 
Internet connectivity training to prosecutors from throughout the state 
at a ``cybersleuth'' seminar presented at the National Advocacy Center 
on the University of South Carolina campus in Columbia. SEARCH also 
assisted a local prosecutor's office on legal issues involving computer 
forensics.
    Hawaii.--SEARCH is providing assistance to a statewide justice 
integration effort spearheaded by the Department of the Attorney 
General. SEARCH is helping the state with integration planning; setting 
vision, mission, goals and objectives for the integration initiative; 
and determining operational requirements. In another statewide effort, 
SEARCH is assisting the Department regarding strategic planning for and 
integration of the state's Juvenile Justice Information System. SEARCH 
also assisted the Kauai Police Department with the acquisition of a 
computer-aided dispatch/record management system (CAD/RMS), helping to 
draft a Request for Proposal and functional specifications. Officials 
of the Hawaii County Police Department attended SEARCH training on The 
Investigation of Online Child Exploitation, a weeklong course that 
provides law enforcement investigators and support staff with the 
skills needed to conduct proactive Internet investigations involving 
child exploitation. In addition, this very week, April 29-May 3, 2002, 
SEARCH trained 22 justice officials onsite in Hilo, Hawaii, in The 
Investigation of Computer Crime, which teaches how to investigate high-
technology theft and computer-related crime.
    Vermont.--In a statewide effort, SEARCH provided onsite integration 
assistance to the Vermont Department of Public Safety (DPS) regarding a 
strategic direction for its integrated CAD/RMS used by nearly all local 
law enforcement agencies in the state. A 12-member team of justice 
officials, representing the state DPS, Department of Corrections (DOC), 
Office of Court Administration, Supreme Court and Office of the Chief 
Information Officer, among others, attended SEARCH training on IJIS 
issues, including emerging trends in biometric technologies for 
identification, identity verification and secure access/authorization 
for physical and data security, and critical success factors and the 
risk management strategies employed by project leaders in integration 
initiatives. SEARCH also assisted the Burlington Police Department on 
issues related to computer forensics issues and CAD/RMS/mobile 
computing system acquisition. In addition, officers of the Rutland 
Police Department attended SEARCH training on The Investigation of 
Computer Crime.
    New Hampshire.--A team of 14 justice officials, representing such 
agencies as the Office of the Attorney General, the state DPS, the 
Administrative Office of the Courts, the State Police, State 
Legislature and DOC, attended SEARCH training on IJIS issues, such as 
performance metrics, security technologies, techniques for undertaking 
regional integration efforts, procurement, outsourcing, Web-based 
justice applications and IT project management strategies. Over a dozen 
officers from New Hampshire police and sheriff's departments also 
attended a weeklong SEARCH training session on The Investigation of 
Computer Crime, held in Concord. In addition, SEARCH assisted the New 
London Police Department regarding the setup of a computer forensics 
laboratory.
    Colorado.--Colorado has benefited from a number of SEARCH technical 
assistance and training efforts. For example, SEARCH is helping the 
state work toward integration planning in an initiative that involves 
the State Judicial Branch, Department of Human Services' Division of 
Youth Corrections, Department of Public Safety's Bureau of 
Investigation, Department of Corrections and the Colorado District 
Attorneys' Council. SEARCH also helped the Colorado Bureau of 
Investigation and the Arvada County Sheriff's Office with computer 
forensics issues; the Colorado State University Police Department with 
computer crime investigation materials and best practices for law 
enforcement investigative training; the Greeley Police Department on 
setting up a computer forensics laboratory; and the Colorado District 
Attorneys Council regarding the future of court information technology. 
Colorado agencies also benefited from SEARCH training: the Aurora 
Police Department attended SEARCH training on Introduction to Internet 
Crime Investigations, which teaches investigators the basic techniques 
for successfully cracking cases involving crimes committed using the 
Internet. Officials from the 18th Judicial District Attorney's Office 
attended an intensive, two-week course on Advanced Internet 
Investigations, which teaches investigators how to investigate crimes 
online and track intruders. In addition, representatives of the 
Colorado State University Police, Arvada Police Department and Weld 
County Sheriff's Office attended SEARCH training on The Investigation 
of 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 Technical Bulletins that identify and 
evaluate information systems and technologies that have existing or 
potential application in criminal justice management. SEARCH also 
offers an online resource, the Integrated Justice Information Systems 
Website (www.search.org/integration), which features state and local 
profiles of justice integration efforts, including links to information 
on governance structures, funding, technical overviews, project 
documents and more, as well as links to useful integration 
publications, articles and other resources. SEARCH's Website received 
an average of 12,350 hits per day in 2001.
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 
provide fiscal year 2003 funding of SEARCH's National Technical 
Assistance and Training Program at the $4.0 million level. Supporting 
state and local criminal justice agencies' information systems and 
their ability to share information is a matter of public safety and 
national security. The National Technical Assistance and Training 
Program can help state and local law enforcement agencies meet those 
expectations. We thank you, Mr. Chairman, the members of your 
Subcommittee and the Subcommittee staff for your continued support.
                                 ______
                                 
                          DEPARTMENT OF STATE
 Prepared Statement of the Alliance for International Educational and 
                           Cultural Exchange
Introduction
    The Alliance for International Educational and Cultural Exchange 
appreciates the opportunity to submit testimony in support of the 
educational and cultural exchange programs administered by the 
Department of State.
    The Alliance is the leading policy voice of the United States 
exchange community, and has worked closely with the subcommittee on 
exchange issues. We note with gratitude the subcommittee's role in 
increasing exchange appropriations in recent years.
    The Alliance comprises 65 nongovernmental organizations, with 
nearly 7,500 staff and 1.25 million volunteers throughout the United 
States. Through its members, the Alliance supports the international 
interests of 3,300 American institutions of higher education.
    With grassroots networks reaching all 50 states, Alliance members 
help advance the United States national interest by putting a human 
face on American foreign policy, transmitting American values, 
fostering economic ties with rapidly developing overseas markets, and 
assisting individuals with the development of critical foreign 
language, cross-cultural, and area studies expertise. Our members also 
leverage considerable private resources--in cash and in kind--in 
support of these critical programs.
    By engaging a very broad array of American individuals and 
institutions in the conduct of our foreign affairs, exchange programs 
build both enhanced understanding and a web of productive contacts 
between Americans and the rest of the world.
    Two years ago, German Chancellor Gerhard Schroeder described his 
experience as an International Visitor in an on-air interview with a 
Berlin news anchor. Schroeder described himself as a young politician 
with a vague but fashionable anti-American bias, and recounted that his 
trip to the United States as an International Visitor altered his 
views. ``This is one of the most intelligent ways of giving young 
politicians a positive attitude about America,'' Schroeder said.
Our request
    As a nation, we need to provide more opportunities for emerging 
leaders around the world to experience first-hand our society, our 
values, and our people. The Alliance therefore urges the subcommittee 
to provide substantial increases in funding for exchange programs. 
While appropriations for these programs have moved up in recent years, 
this account still lags well behind its historic levels in constant 
dollars due to the deep cuts of the mid-nineties. Coupled with the 
increases in fixed program costs such as airfare and accommodation 
costs, reduced appropriations have resulted in significantly diminished 
participant levels in programs consistently cited by our embassies as 
one of their most effective means of advancing U.S. policy interests.
    While the need for increased funding is worldwide, increased 
exchanges with the Islamic world are particularly critical as we pursue 
the war on terrorism. To defeat terrorism, the United States will need 
more than the might and skill of our armed forces. To ultimately defeat 
terrorism, we must also engage the Muslim world in the realm of ideas, 
values, and beliefs.
    No previous foreign affairs crisis has been so deeply rooted in 
cultural misunderstanding. One of the lessons of September 11 is that 
we have not done an adequate job of explaining ourselves, our culture, 
and our values to the Muslim world. Doing so will require a sustained, 
serious effort if we are to succeed in our quest for lasting peace and 
security, stable bilateral relationships, and an end to terrorism. We 
believe that significant new funding is needed for an Islamic Exchange 
Initiative, designed to broaden the range of meaningful relationships 
based on shared interests with current and emerging leaders and key 
institutions in Muslim countries.
    Given the broad arc of countries we will need to engage, stretching 
from Africa to Southeast Asia, and the importance and urgency of the 
task, we urge the subcommittee to appropriate $95 million for this 
purpose. Including a modest but important increase in worldwide 
exchange funds, we propose an fiscal year 2003 level for State 
Department exchange programs of $345 million.
    In the Islamic world, we envision this initiative engaging the full 
range of programs and activities managed by the Bureau of Educational 
and Cultural Affairs: Fulbright and Humphrey exchanges that will 
stimulate broader cultural understanding, joint research and teaching, 
and foster positive relationships with a new generation of leaders; 
university affiliations targeted toward key fields such as mass media 
and economic development; International Visitor and other citizen 
exchange programs designed to bring emerging leaders into significant 
and direct contact with their professional counterparts and the daily 
substance of American life; youth and teacher exchanges and enhanced 
English teaching programs, all designed to bring larger numbers of 
young people a direct and accurate picture of our society, based on 
personal experience rather than vicious stereotyping.
    The need for an intensive new focus on the Islamic world is great, 
but it should not distract us from the importance of maintaining and 
increasing our public diplomacy and exchange activity elsewhere in the 
world. As we engage in what promises to be a lengthy and difficult 
struggle against terrorism, we will benefit greatly from the support 
and participation of our friends and allies around the world. We must 
not neglect these important relationships, or succumb to the temptation 
to shift resources from other regions of the world to meet our needs in 
Islamic countries. Should we do so, we will not find resources adequate 
to the task at hand, and we will lessen our engagement with other 
crucial regions of the world at a time when we can ill afford to do so.
    In considering worldwide exchanges, in addition to the valuable 
programs already cited in the context of the Islamic initiative, we 
particularly wish to draw the subcommittee's attention to the 
importance of overseas advising and the Gilman scholarship program. Our 
advising centers, funded at slightly more than $3 million annually, 
struggle with minimal resources to provide comprehensive, unbiased 
information to prospective students. The foreign students in the United 
States provide an enormous foreign policy asset--the opportunity to 
educate the next generation of world leaders--and they contribute to a 
trade surplus estimated at $12 billion. Other countries--notably the 
United Kingdom, Australia, Canada, Germany, and Japan--recognize the 
policy and economic benefits of foreign students and are making serious 
and successful efforts to erode our market share. We encourage the 
subcommittee to increase funding for our advising centers.
    The Gilman scholarship program has been a remarkable success in its 
first year, with many more qualified applicants than available grants. 
This program, which provides modest funding to allow American students 
with financial need to study abroad, directly addresses a critical 
national need. We need to develop more American expertise with key 
countries, cultures, and languages, and the Gilman program expands the 
pool of students with the means to study abroad. The program has 
increased study abroad numbers, and the diversity of participants and 
locations, coupled with its performance to date, deserves a funding 
increase.
    We also ask that the subcommittee include in its report language 
support for the creation of a national policy on international 
education. Such a policy would place appropriate priority on government 
and private efforts to prepare Americans to succeed in a rapidly 
globalizing world. It would include several elements: strengthening 
American capacity to develop specialists in foreign languages, area 
studies, and international business studies; building a broader 
international knowledge base among American non-specialists whose work 
has international dimensions; increasing the number of Americans 
studying abroad and encouraging more of our students to study in non-
traditional locations; developing a more effective strategy for foreign 
student recruitment; and strengthening exchange programs at all levels. 
In the last session of Congress, the Senate unanimously passed a 
resolution introduced by Senators Lugar and Kerry calling for a 
national policy on international education. A similar resolution has 
been introduced in the House.
    Mr. Chairman, the Alliance appreciates the opportunity to submit 
its views to the subcommittee, and looks forward to working with you, 
your colleagues, and staff to maximize the contributions that exchange 
programs make to our foreign affairs. We would be happy to provide 
additional information, or to respond to any questions that you might 
have.
                                 ______
                                 
     Prepared Statement of the American Foreign Service Association
    Mr. Chairman and Members of the Subcommittee, on behalf of the 
American Foreign Service Association (AFSA) and the 23,000 active-duty 
and retired members of the Foreign Service that AFSA represents, I wish 
to thank you for the continuing opportunity to share our views with you 
regarding the funding of the Department of State and its programs. As 
we have said in previous years, and it continues to be true, the 
decisions that you and your colleagues in Congress make directly affect 
our professional and personal lives as we serve our nation abroad, 
therefore we have a direct interest in your work.
    Let me state from the beginning that we are fully supportive of the 
Administration's 2003 request, but we also believe it should be 
considered as the floor and not the ceiling for fiscal year 2003 
appropriations. We believe that more should have been proposed in the 
funding of the Department of State and its programs. We appreciate the 
difficult spending constraints facing the Subcommittee as it does its 
important work. We acknowledge that yours is not an easy task.
    But we would emphasize that national security is one of the 
principle, non-delegatable functions of the federal government and that 
diplomats, their programs, and the State Department are as critical to 
our national security structure as are the soldier, the smart bomb, and 
the Pentagon. As we well know, international problems can quickly 
become domestic problems. Diplomacy is on the front lines addressing 
these problems before they reach our shores. As is true for the Defense 
Department, to achieve our national security tasks, the Department of 
State and its programs require adequate resources.
    AFSA fully agrees with Secretary of State Powell when he said on 
March 7, 2002:

    ``I think it is important, and part of my responsibility, and the 
responsibility of * * * all the Members of Congress, to make the case 
to the American people that if we are going to live in the kind of 
world we all want to live in, if we are going to want to see our values 
adopted by more and more nations--not because they are American values, 
but because they are universal values--it is important that we give our 
diplomatic efforts the support that they deserve through significant 
increases in the 150 Account.''

    Last year, with the support of the Congress, the Secretary of State 
began the difficult work of rebuilding the infrastructure of our 
country's foreign affairs apparatus. At that time, he said that its 
deterioration has become a ``major impediment to the conduct of 
American foreign policy.'' As you know, the State Department's request 
for fiscal year 2003 is a continuation of these efforts in terms of 
people, technology, and security.
    People.--The availability of resources determines whether we have 
the talent, tools, and work environment necessary to effectively 
represent and protect this nation. It affects the recruitment of 
talented young people to this profession. It affects how thinly we are 
stretched in manning the 250 posts and missions in which we serve 
around the world, and it affects how well we are trained to do our 
jobs. Funding also affects the quality of life for our families as they 
accompany us around the world.
    In the 1990s, insufficient funding created a shortfall of over 
1,100+ overseas personnel. This staffing shortage strained the Foreign 
Service in its ability to fully represent and advance the national 
security interests of our nation. It reduced the amount of training 
that our people could take because it forced both the Department and 
individuals to choose between leaving positions vacant while personnel 
took the necessary training or sending the person to post without 
training. And the personnel shortfall adversely affected Foreign 
Service morale as people were constantly being asked to do more with 
less, even while they and their families often served in hardship and 
dangerous locations.
    In order to fill this shortfall, the Department is requesting 
sufficient funds to recruit, hire, train and deploy 399 new foreign 
affairs and 186 new security professionals above attrition. AFSA fully 
supports the Secretary in this rebuilding effort and urges this 
Subcommittee and the Senate to provide the necessary resources 
requested. We also urge that next year, the request continue to be 
supported so that we can continue and complete this three-year 
rebuilding effort.
    There is one area that we would ask be addressed in the Committee's 
report accompanying CJS appropriations bill. Last year, when the 
Department explained its request in the Budget in Brief for Fiscal Year 
2002, amounts in the personnel account were identified to address 
concerns about morale, recruitment and retention of Foreign Service 
personnel. For instance, the Administration proposed to allocate funds 
to continue a pilot program in Mexico for increased spousal employment 
and possibly expand it worldwide. Although unmentioned in the 
Administration's fiscal year 2003 request, these proposals are still 
important initiatives, and we urge the Committee to encourage the 
Department to continue and expand these programs.
    Finally, Mr. Chairman, as the ``Voice of the Foreign Service,'' 
there is one more issue that we believe needs to be discussed. We 
understand that the Department and the Office of Personnel Management 
are seeking to correct inequities arising from the fact that Foreign 
Service personnel lose their locality pay adjustments when they serve 
abroad. AFSA strongly endorses these efforts to convince the Office of 
Management and Budget to support implementation of an overseas 
comparability adjustment based upon D.C. area locality pay. There is a 
huge financial disincentive to serve abroad because of the loss of 
locality pay. Since allowances and differentials do not count in 
determining retirement annuities, the annuities of our members who 
retire following an overseas assignment are computed at a lower level 
than D.C.-posted counterparts. This affects our annuities in terms of 
both the formula for computation and the amount that can be contributed 
into the Thrift Savings Plan (TSP). Further, since allowances and 
differentials are computed as percentages of base pay, their value can 
be lost or seriously decreased when compared to what our D.C.-posted 
counterpart is receiving in base pay plus locality pay. Thus, 
compensation for serving in a hardship or danger post is decreased when 
compared to what we could earn by serving in Washington. There was a 
time when the difference was minor. Today, when we serve abroad, we 
take an 11.43 percent cut in salary and possible TSP contribution 
levels. There is no authorization for this program as of yet. We ask 
that when it is requested, the Subcommittee give favorable 
consideration to the idea of an overseas comparability pay adjustment 
for Foreign Service personnel posted abroad
    Technology.--Mr. Chairman, AFSA receives monthly briefings from the 
Department on its progress in improving its information and 
telecommunications system. More importantly, we get reports from our 
members in the field when things go wrong. As an independent voice, 
AFSA is pleased to report to you that we are satisfied with the 
Department's progress to date in bringing the Department and its people 
into the 21st century telecommunications world. Funding requested in 
fiscal year 2003 will allow this needed progress to continue.
    Security.--For the second year in a row, the Department has 
requested $1.3 billion for worldwide embassy security funding. This is 
generally at the annual level recommended by the Overseas Presence 
Advisory Panel (OPAP) and the Accountability Review Boards established 
to investigate the 1998 East Africa embassy bombings. The 
recommendation for this funding was $13-$14 billion over ten years. 
When the work started, fully 80 percent of our posts and missions did 
not meet minimum Departmental security standards. Today, about 60 
percent meet the minimum standards but need major improvements.
    What concerns us, however, is that while the overall request for 
personnel, software, equipment, and ``bricks and mortar'' work reaches 
the $1.3 billion level, the request for the ``bricks and mortar'' 
portion is $61 million below amounts appropriated in fiscal year 2002. 
It seems to us that since the Department was able to utilize the full 
$815.9 million appropriated last year, the request should have been at 
a similar level to continue improvements to the physical situation of 
our posts and missions. We ask that the Senators consider increasing 
the request for this part of the ``Worldwide Security Upgrades'' from 
$755 million to last year's level of $815.9 million.
    Mr. Chairman, in the area of security, there is one concern to 
which we wish to draw the Subcommittee's attention. When both the 
Accountability Review Board and the Overseas Presence Advisory Panel 
made their recommendations, the emphasis was placed on protecting 
government facilities abroad from future terrorist attacks. There was 
always concern, though a generally unspoken concern that, as we 
``hardened'' our missions, terrorists would go after Americans, and 
particularly representatives of the U.S. government, in ``softer'' 
targets. The recent terrorist bombing of the church in Islamabad that 
killed a member of the embassy staff and her teenage daughter puts a 
harsh light on that concern. We believe the concept of embassy security 
needs to be expanded to encompass the embassy community. In part, AFSA 
believes that this will entail the continued hiring of security 
professionals and funding to move from a protective, defensive posture 
to a more aggressive preventive approach to security. We encourage the 
Subcommittee to join AFSA in engaging the Department in identifying 
practical solutions to the expanded threat to Americans and to American 
personnel abroad.
    A reinvigorated foreign service.--Finally, Mr. Chairman, there is 
one more area that we would like to share with the Subcommittee that is 
not part of the Administration's request, but surely impacts upon the 
success of U.S. diplomacy. As vital as increased funding is for people, 
technology, and security, AFSA believes that funding by itself will not 
guarantee that the Foreign Service possesses the attributes needed to 
best serve the President, the Congress, and the American people in 
meeting the challenges of the 21st Century. AFSA believes that the 
Foreign Service will also need to develop new skills and a new 
organizational culture.
    In the past, AFSA worked with the Congress in supporting 
legislation that mandated the Department to do workforce planning 
(Public Law 106-113). We also supported Congressional provisions 
requiring the Department to report on management training for Foreign 
Service personnel and to report on the assignment of language trained 
personnel to language designated positions. Assuring the continued high 
quality of this nation's Foreign Service has been a continuing concern 
to AFSA as it has been to the Congress.
    Since July 2001, AFSA has been working with the Director General of 
the Foreign Service in developing reforms to the Foreign Service 
personnel system. To date, we have reached agreement on over a dozen 
reforms, including:
    1. Establishing leadership and management training requirements 
that employees must meet by key stages of their career. These 
requirements will be enforced by promotion precepts that will deny 
promotions to those who have not taken the required training.
    2. Enforce rules governing ``worldwide availability'' so that 
Foreign Service members do not extend in Washington or certain posts 
abroad for unusual lengths of time.
    3. Increase the separation of unsatisfactory performers by having 
the Director General meet with members of the Commissioning and Tenure 
Boards at the State Department to reinforce with them their duty to 
identify unsatisfactory performers. AFSA alerted the Department to the 
fact that, while between 3.5 percent and 7.9 percent of career 
candidates were denied tenure during the mid-1990s, less than 1 percent 
were denied tenure in 1998 and 1999.
    4. To change the organizational cultures of the Foreign Service, we 
have come to agreement on several issues such as putting added weight 
on demonstrated leadership, managerial ability, and good interpersonal 
skills when selecting personnel to be assigned to Deputy Chief of 
Mission (DCM) and other senior positions.
    5. The Director General accepted AFSA's proposal to modernize the 
core precepts for promotion in the Foreign Service to provide 
additional incentives for employees to perform in accordance with the 
management principles enunciated by Secretary Powell and his management 
team. The changes promote the career advancement of those employees who 
exhibit the skills, outlooks, and abilities needed in our new century. 
For example, the revised precepts put new emphasis on operational 
effectiveness, intellectual integrity, customer service, teamwork, and 
leadership and management skills. In so doing, they signal disapproval 
of the risk-averse, form-over-substance modes of behavior that are ill 
suited for actively advancing American interests in the 21st Century.
    Conclusion.--Mr. Chairman, AFSA agrees with Secretary Powell when 
he said that events on and since the tragic day of September 11 have 
made it clear ``that American leadership in international affairs is 
critical'' and that ``out on the front lines of diplomacy, we want a 
first-class offense for America.'' We agree with him that ``quality 
people with high morale, combined with superb training and adequate 
resources, are the key to a first-class offense.''
    Operating accounts do count. The funds requested for fiscal year 
2003 and the Supplemental Request that has recently been forwarded, 
help provide the minimum necessary resources that will allow the 
Department and the Foreign Service to continue its rebuilding of the 
Foreign Affairs infrastructure to meet the challenges of this new 
century. It has been less than three years since the Overseas Presence 
Advisory Panel (OPAP), chaired by Louis Kaden of Wall Street, and 
composed of diplomats, representatives of labor and business, and 
educators reported that:

    ``Insecure and decrepit facilities, obsolete information 
technology, outdated human resources practices, and out-molded 
management and fiscal tools threaten to cripple America's overseas 
presence. We recognize that except for the security threats, none of 
these individual problems is a pressing emergency. Still, as with any 
complex system, if many of the parts of America's overseas presence are 
not working properly, the system may fail. The Panel fears that our 
overseas presence is perilously close to the point of system failure.''

    Mr. Chairman, under the leadership of Secretary of State Powell 
working with Congress, we are pulling back from that ``point of system 
failure.'' We need to stay the course and so we urge that, at a 
minimum, the full $7.5 billion Administration request for the 
Department of State as well as the funding requested in the 
Supplemental be provided. In the end, those funds address the needs of 
diplomacy as it stand on America's front lines serving her and 
protecting our national interests.
                                 ______
                                 
                            RELATED AGENCIES
                 Prepared Statement of Steven A. Ludsin
    I have dealt with the U.S. Small Business Administration for almost 
10 years and I was a contractor with the agency for a year and a half 
with negotiations stemming from those contracts covering at least 3 
years. I have concluded that the agency is an anachronism that should 
be reorganized or abolished and funding should be drastically cut.
    The U.S. Small Business Administration, the federal agency mandated 
by Congress to aid, counsel, assist and protect the interests of small 
business has become obsolete. Aside from the government guarantees for 
loan programs and advocating small business procurement protection, the 
agency is out of touch with our times. I had the simple idea of selling 
the SBA's real estate collateral for defaulted small business loans on 
the Bloomberg. The resistance was overwhelming and the staff is so 
committed to the status quo, they cannot adapt to the changed economic 
environment since the 1950's. It is as if they are in a time warp, 
forever stuck in a post World War II mentality.
    After law school, I began my investment banking career in 1976 and 
Michael R. Bloomberg was one of the partners in charge of my 
department. In 1985 I purchased a home from foreclosure in East 
Hampton, NY. I began to pursue the concept of selling foreclosures on 
computers soon after I purchased the home. I tried to get a Small 
Business Investment Research grant from the Department of Commerce in 
1987 but I was turned down. When the S&L bailout began in 1989, I 
brought the idea of electronic marketing on the Bloomberg to the RTC, 
the agency in charge of the bailout, but I could not get a contract.
    Undaunted I persisted and received a good audience with Erskine B. 
Bowles, former SBA Administrator and Chief of Staff of the White House. 
In 1993 he was the Administrator of the U.S. Small Business 
Administration.
    I convinced the SBA to give me a pilot program in 1994 to sell the 
real estate collateral on the Bloomberg. After enduring the frustration 
of the contract renewal process, I managed to get the contract renewed 
in June 1995. Battling the SBA was a full time job; they sapped my 
financial resources and the results led to an endless litigation 
process.
    I had to use the Freedom of Information Act to get the appraisals 
of the properties the SBA hired me to sell because they insisted on 
charging $10,250 for the processing fee which was discretionary. The 
SBA decided I was a commercial requester so I had to pay the fees. I 
challenged the decision in the Federal Courts in New York and actually 
presented my own oral argument before the Second Circuit Court of 
Appeals. The 3-judge panel told me I was at the top of the list of 
attorneys who have appeared on their own behalf, but the Appeals Court 
held that the SBA could charge me the fee because my contract goals 
were not in the public interest. So even though I was selling federal 
assets and disseminating the information world wide on the Bloomberg, I 
had to pay the SBA the FOIA fee.
    I was able to get the appraisals without charge and present them to 
investors by displaying the photos and descriptions and scanning the 
full appraisals using my own scanner. I finally received bids from 2 
major investment banks but after 2 years into the second contract 
beginning in June 1995, the SBA had forgotten to tell me that they 
would need consent of the lending banks to sell the assets in bulk 
which was my goal under the contract. There was a breach of contract 
claim before the General Services Board of Contract Appeals. The claim 
was for $1.2 to $2.4 million for providing buyers ready, willing and 
able. The lawsuit was settled. I have characterized the experience as 
``econocide'', the purposeful destruction of an entrepreneur's 
financial security. The experience moved me to write a book, ``Roadkill 
on the Information Highway'' published by iUniverse.com.
    I share this account of my struggle because it is a microcosm of 
the cultural rift of the private sector and our federal government. 
Ironically the SBA is selling $10 billion of assets over the coming 
years. How could they seriously believe the private sector would 
participate if the agency doesn't understand the marketplace and 
thwarts any innovation at every turn?
    Although the experience I had is anecdotal, there is a need to put 
a stop to the obfuscation that the SBA uses to justify its existence. 
They are eager to hide behind the FOIA laws in order to retard 
progress. For example, in May 2001, I requested the information about 
the real estate assets still available from the field offices. The knee 
jerk reaction was to force the field offices to direct the inquiry to 
the headquarters and invoke the FOIA law. This creates delay and 
obstacles to purchasing the assets. Similarly, when I sent emails to 
the staff asking what their responsibilities were, most responded by 
directing me to the SBA website.
    Why do you need to pay staff to direct inquiries to the website? 
Why do we pay over $500 million annually to maintain the illusion that 
the SBA will provide funds for small business, when the real decisions 
are made by the banking and venture capital community? The days of 
window dressing must end. I have always supported private-public 
partnerships, but in the case of the SBA, there is no real capability 
to partner. The agency should be reorganized and the guarantee 
component should be reassigned to the Department of Commerce or the 
Department of the Treasury.
    I am grateful for the opportunity to become part of the public 
testimony advocating severe cuts to an agency that has outlived its 
usefulness. Former SBA Administrator Philip Lader commented that the 
SBA was no longer your father's Oldsmobile. Even General Motors retired 
the Oldsmobile. Its time to let go of the propagandistic illusions that 
the SBA furthers the interests of small business. It should be 
abolished.
                                 ______
                                 
               Prepared Statement of The Asia Foundation
    Thank you for the opportunity to submit testimony, supporting The 
Asia Foundation's fiscal year 2003 budget request.
    Mr. Chairman, I would like to present The Asia Foundation's 
programs and our future plans to address 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.
    The Administration has endorsed the work of The Asia Foundation by 
requesting an appropriation of $9.44 million for fiscal year 2003. 
While we appreciate that support, we respectfully hope the Congress 
will add to our funding, given the unparalleled new challenges facing 
the Asia region. As you know, The Asia Foundation implements programs 
that improve governance and legal reform, protect human rights, promote 
economic reform and encourage peaceful, cooperative regional and 
international relations. In the post-September 11 period, it is clear 
that in the war on terrorism, it is more important than ever to address 
its root causes of persistent poverty, lack of opportunity and loss of 
faith in local leaders and institutions. It is critical to strengthen 
institutions of governance, advance the rule of law and promote 
stability. This also means creating economic opportunity, broadening 
and improving education systems and other public services and 
protecting the rights of women and children.
                                overview
    Let me put the Foundation's work into context. The post-September 
11 period presents challenges to political stability, economic growth, 
and America's relations in the Asia region. Afghanistan requires 
continuing donor attention in response to humanitarian needs, and to 
ensure security and stability for the current interim government, the 
Loya Jirga process, and the new government. Other countries in the 
region, including countries with larger Muslim populations such as 
Pakistan, face significant challenges to democratic development, peace 
and stability.
    Asia continues to face complex regional security challenges: on the 
Korean peninsula and the India-Pakistan border, China-Taiwan cross-
straits relations, and in Afghanistan. Despite some recovery from the 
1997 crisis, economic stagnation continues in Japan, the world's second 
largest economy, and economic uncertainty exists in South and Southeast 
Asia economies. Political instability in Indonesia, extremism in the 
southern Philippines, and internal conflicts in Sri Lanka and Nepal 
also threaten regional stability and impede economic development. Human 
rights abuses and questions of impunity continue. Even though women in 
Asia have made gains, in many places they are still subject to economic 
and political inequities and, in the worst cases, they are victims of 
trafficking and abuse. We have seen reductions in United States 
presence in Asia over the past few years, due to budgetary and other 
circumstances, particularly signaled by a decline of public diplomacy 
efforts.
    In our view, the new circumstances we face in Asia highlight the 
importance and value of the Foundation's programs. There are few 
American organizations with the operating experience, relationships and 
access enjoyed by The Asia Foundation in the region. For nearly 50 
years, the Foundation has operated programs throughout Asia to support 
reform-minded government and non-governmental institutions and 
individuals.
                     the asia foundation's mission
    The Asia Foundation's core objectives are central to United States 
interests in the Asia-Pacific region.
  --Democracy, human rights and the rule of law: developing and 
        strengthening democratic institutions and encouraging an 
        active, informed and responsible non-governmental sector; 
        advancing the rule of law; and building institutions to uphold 
        and protect human rights, including women's rights and 
        opportunity;
  --Open Trade and Investment: Supporting open trade, investment and 
        economic policy reform at the regional and national levels;
  --Peaceful and Stable Regional Relations: Promoting regional 
        discussions on security cooperation, regional economic policy, 
        law and human rights.
    In the past, this Committee has encouraged the Foundation's grant 
making role, and we remain faithful to that mission. The Foundation's 
hallmark is to make sequential grants to steadily build and strengthen 
institutions, develop leadership and advance policy reforms in 
countries in the region. Foundation assistance supports training, 
technical assistance, and seed funding for new, local organizations--
all aimed at promoting reform, building Asian capacity and 
strengthening relations with United States institutions. Foundation 
grantees can be found in every sector in Asia, leaders of government 
and industry and at the grass roots level, in the increasingly diverse 
civil society of Asia. Notably, the current Afghanistan Ministers of 
Higher Education Sharief Fayez and Women's Affairs Sima Simar are 
former grantees who have asked the Foundation for immediate assistance 
in education and training, including re-starting the Books for Asia 
program, the Foundation's long standing program that has distributed 
millions of books to Asia since 1954.
    The urgency of the political and security needs in Asia, 
particularly given the instability in South Asia since September 11, 
have increased the need for experienced American actors in the region. 
The experiences in countries such as Korea, the Philippines, Thailand 
and Taiwan, where democratic and economic transitions are well 
underway, represent, in part, the return on investment the Foundation 
has made, over time, in support of individuals and institutions 
committed to reform.
                                programs
    The Asia Foundation's programs in Asia strengthen formal 
institutions of governance--including constitutional frameworks, the 
legislative branch and the judiciary--and develop more effective civil 
society organizations, the protection of human rights and the 
development of law and effective legal systems. The Foundation's 
programs also increase economic reform and open trade. Its 
international relations programs reflect a unique capacity to promote 
increased understanding of different foreign policy perspectives to 
complement more formal diplomatic efforts that advance American 
economic and security interests in the region.
    Legislative development.--The Foundation has contributed to the 
development of legislatures in 16 countries in Asia through technical 
assistance, training members and staff, facilitating interaction with 
the nongovernmental sector and developing parliamentary capacity to 
review budgets and other executive functions in Thailand, Taiwan, South 
Korea, Mongolia, the Philippines and Indonesia. The Foundation was the 
only American organization to provide technical assistance to the 
Constituent Assembly in East Timor in the recently completed 
constitutional drafting process, providing international experts and 
support for the East Timorese People's Constitutional Working Group.
    Civil society.--The Foundation is the single largest supporters of 
the non-governmental sector in the Asian countries in which we operate. 
The Foundation builds the capacity of organizations, encourages public 
participation and works to improve the regulatory environment for NGOs. 
In Pakistan, the Foundation supports community based organizations that 
provide education services in areas where none exist, through public-
private partnerships, particularly in the economically poor Northwest 
Frontier Province (NWFP). Continued education and advocacy efforts in 
Nepal are supported that focus on addressing the dire problem of the 
trafficking of women and children. Many programs focus on western 
Nepal, under the greatest risk from the growing Maoist insurgency in 
that part of the country. The Foundation has been the largest supporter 
of human rights, environmental and research and policy NGOs in 
Cambodia.
    Human rights.--The Foundation's human rights programs promote the 
protection and advancement of human rights as an important priority. 
Through its support of nongovernmental and governmental human rights 
efforts at the local, regional and national levels, the Foundation's 
programs focus on human rights education and the development of 
monitoring groups, forensic training to investigate past abuses, media 
training, guides on international human rights standards, conflict 
reporting for journalists, programs to reduce trafficking and violence 
against women, and alternative dispute resolution programs in conflict 
areas. The Foundation supports moderate Muslim organizations in 
Indonesia, Pakistan and in Mindanao in the Philippines to encourage 
programs that promote moderate views, religious tolerance, peace, 
conflict management and the rights of women under Islam, including the 
use of Islamic scriptures to support messages of peace and non-
violence. The Foundation gives special attention to the troubled areas 
of Indonesia through support for local human rights efforts in Aceh, 
Papua and most recently, the Maluku Islands. Programs include increased 
media campaigns through radio and television by moderate groups to 
promote pluralism and tolerance in conflict prone areas and the 
utilization of mosque youth networks to educate and strengthen networks 
for democracy and pluralistic Islam.
    Legal reform.--In China, the Foundation has supported 
administrative law reform efforts in China to limit the arbitrary power 
of officials and create greater scope for citizen participation and 
redress. With China's entry into the WTO, the Foundation has embarked 
on a training program for provincial and municipal legal affairs 
offices to promote understanding of the complexities of WTO compliance 
related to uniform treatment, legal transparency and consistency. 
Foundation programs also support legal aid services and popular legal 
education to bring the benefits of legal reform directly to China's 
citizens, including migrant women populations in the new economic zones 
of Southern China. In Nepal, the Foundation has started a legal reform 
program for the courts, through training programs in mediation, 
establishment of legal information systems, and development of programs 
with watchdog citizens' groups to raise awareness of corruption and 
misconduct.
    Economic growth and opportunity.--Small and medium enterprise 
reform is a vital engine of growth, providing employment and 
opportunity for millions throughout the region. The Foundation's 
programs help to improve the environment for small business growth in 
Indonesia, Bangladesh, Thailand and the Philippines by removing policy 
barriers and regulatory red tape, reducing corruption, and providing a 
voice for small entrepreneurs through support for business associations 
and business-government dialogue. The Foundation funds efforts to 
improve corporate governance in Korea, China, Japan and the 
Philippines, and supports open trade and investment in the region 
through assistance to the Pacific Economic Cooperation Council (PECC) 
and the Asia-Pacific Economic Cooperation (APEC) process.
    International relations.--The Foundation continues to invest in the 
development of young leaders, for example through support for 
diplomatic training in United States universities for Chinese foreign 
affairs staff, and fellowships for Vietnamese, Mongolian and for the 
first time, a young Indian diplomat. Programs also include support for 
the Council for Security Cooperation in the Asia Pacific (CSCAP), 
training programs in compliance with trade agreements and WTO for 
Chinese and Vietnamese officials and track II programs on cross-straits 
relations an d Northeast Asian security.
                               conclusion
    As the preceding examples of our work emphasize, the Foundation is 
a field-based organization that supports projects in Asia that aim at 
building the capacity of Asian institutions and supporting reform 
efforts, while at the same time, maintaining close links with the U.S. 
foreign policy community. Working through 14 offices in the Asia 
region, including in China, Hong Kong and Taiwan, with newly 
established project offices in East Timor and Afghanistan, the 
Foundation provides vital support to local economic and political 
reform efforts.
    The Foundation is first and foremost a grant making organization. 
The Foundation has consistently received national recognition for its 
efficient grant-to-operating expense ratio, reflecting its commitment 
to maximizing the impact of its programs in Asia, while keeping 
expenses low. We are not a research organization or an academic 
institution, nor are we Washington based. We work on the ground in Asia 
as an accepted, trusted partner and supporter of Asian reform efforts 
that simultaneously support and reinforce American political, economic 
and security interests. We also partner in our programs with American 
and international public and private organizations to leverage our 
resources, and make investments pay off. Our partnership with The 
Richard & Rhoda Goldman Fund to support Agency Coordinating Body for 
Afghan Relief (ACBAR), an Afghan donor coordination organization, and 
PARSA, which supports projects for women in Afghanistan, is but one 
example.
    Public funding is essential to our mission for many reasons. While 
the Foundation has made gains in expanding private funding, the 
flexibility and reliability that public funding lends to the 
Foundation's efforts are critical. As an organization committed to 
United States 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 USAID funds for which the 
Foundation competes) and do not replace public funding, either in scale 
or flexibility. Moreover, the flexibility afforded by U.S. government 
appropriated funds enables the Foundation to respond quickly to fast-
breaking developments and program opportunities, as demonstrated by our 
programs related to the referendum in East Timor in 2001 and most 
recently, needs identified by the Afghan Interim Administration and the 
United Nations in Afghanistan related to the upcoming Loya Jirga 
process.
    As you and your colleagues know, budget constraints resulted in 
significant reductions in the Foundation's annual appropriation in 
fiscal year 1996. The requested $9.44 million for fiscal year 2003 is 
below the $15 million annual appropriation for the Foundation during 
the decade prior to 1996. The $15 million level has been authorized 
consistently by the Congressional authorizers in recent years. We have 
worked hard to manage our budget, reduce staff and expenditures, 
increase our efficiency and diversify our funding sources. We have 
struggled to maintain our regional presence through our offices in 
Asia, although budget cuts did force closure of the Malaysia office in 
1996, and ensured that the maximum possible amount of appropriated 
funds are dedicated to on-the-ground programs. Nevertheless, this 
constrained level of funding has limited the Foundation's ability to 
respond to needs in the region.
    In closing, Mr. Chairman, I believe that at this critical time in 
United States-Asia relations we have the opportunity and the obligation 
to demonstrate America's strong commitment to working with Asian 
leaders to assure the security and well being of the people of Asia. 
Now more than ever, The Asia Foundation's programs represent a positive 
American response to the challenges facing Asia today, contributing to 
the development of stable societies and advancing the interests of the 
United States in the region. At a time of rapid change and uncertainty, 
additional funding would enable the Foundation to expand its role and 
its programs to help meet these challenges.
    Thank you.

 
       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Airports Council International--North America, prepared statement   441
Alliance for International Educational and Cultural Exchange, 
  prepared statement.............................................   467
American Association of Airport Executives, prepared statement...   441
American Foreign Service Association, prepared statement.........   469
American Rivers, prepared statement..............................   450
Anthony, Sheila F., Commissioner, Federal Trade Commission, 
  prepared statement.............................................   425
Ashcroft, John, Attorney General, Office of the Attorney General, 
  Department of Justice..........................................     1
    Opening statement............................................     1
    Prepared statement...........................................     6

Campbell, Senator Ben Nighthorse, U.S. Senator from Colorado:
    Prepared statement...........................................   259
    Questions submitted by.......................................   303
Carman, Gregory W., Chief Judge, United States Court of 
  International Trade, Federal judiciary, the judiciary, prepared 
  statement......................................................   158

Domenici, Senator Pete V., U.S. Senator from New Mexico, 
  questions submitted by........................114, 220, 296, 354, 425
Donnelly, Tony, Director of Budget and Personnel, Supreme Court 
  of the United States, the judiciary............................   131

Evans, Hon. Donald L., Secretary of Commerce, Office of the 
  Secretary, Department of Commerce..............................   307
    Opening remarks..............................................   310
    Prepared statement...........................................   307

Gregg, Senator Judd, U.S. Senator from New Hampshire, questions 
  submitted by............................................290, 341, 385

Hantman, Alan, Architect of the Capitol..........................   131
    Prepared statement...........................................   136
Heyburn, Judge John G., II, Chairman, Committee on the Budget of 
  the Judicial Conference of the United States, Federal 
  judiciary, the judiciary.......................................   143
    Prepared statement...........................................   145
Hollings, Senator Ernest F., U.S. Senator from South Carolina:
    Opening remarks..............................................     1
    Questions submitted by............................54, 206, 332, 391
Hutchison, Senator Kay Bailey, U.S. Senator from Texas, questions 
  submitted by...................................................   221

Inouye, Senator Daniel K., U.S. Senator from Hawaii, questions 
  submitted by.............................................57, 211, 276
International Research Institute for Climate Prediction, prepared 
  statement......................................................   453

Kennedy, Hon. Anthony M., Associate Justice, Supreme Court of the 
  United States, the judiciary...................................   131
    Prepared statement...........................................   134
Kohl, Senator Herb, U.S. Senator from Wisconsin, questions 
  submitted by............................................110, 216, 340

Lautenbacher, Conrad C., Jr., Vice Admiral, U.S. Navy (Ret.), 
  Under Secretary of Commerce for Oceans and Atmosphere, National 
  Oceanic and Atmospheric Administration, Department of Commerce.   365
    Opening statement............................................   376
    Prepared statement...........................................   365
Leahy, Senator Patrick J., U.S. Senator from Vermont:
    Prepared statementsI6046, 318................................
    Questions submitted byI6062, 179, 288........................
Ludsin, Steven A., prepared statement............................   472

Mayer, Haldane Robert, Chief Judge, U.S. Court of Appeals for the 
  Federal Circuit, Federal judiciary, the judiciary, prepared 
  statement......................................................   171
Mecham, Leonidas Ralph, Director, Administrative Office of the 
  United States Courts, and member, Executive Committee of the 
  Judicial Conference of the United States, Federal judiciary, 
  the judiciary..................................................   143
    Prepared statement...........................................   153
Michael, Judge M. Blane, member, Committee on the Budget of the 
  Judicial Conference of the United States, Federal judiciary, 
  the judiciary..................................................   143
Middle Atlantic-Great Lakes Organized Crime Law Enforcement 
  Network, prepared statement....................................   458
Mikulski, Senator Barbara A., U.S. Senator from Maryland, 
  questions submitted byI60214, 278..............................
Muris, Timothy J., Chairman, Federal Trade Commission............   405
    Prepared statement...........................................   407
Murphy, Diana E., Chair, United States Sentencing Commission, 
  prepared statement.............................................   163
Murray, Senator Patty, U.S. Senator from Washington, questions 
  submitted byI60113, 219........................................

National Audubon Society, prepared statement.....................   446
National Congress of American Indians, prepared statement........   455
National Public Radio, prepared statement........................   444
National Recreation and Park Association, prepared statement.....   451
National, Coordinated Law-Related Education Program, prepared 
  statement......................................................   461
Northwest Indian Fisheries Commission, prepared statement........   438

Pitt, Harvey L., Chairman, Securities and Exchange Commission....   225
    Prepared statement...........................................   225
Powell, Hon. Colin L., Secretary of State, Office of the 
  Secretary, Department of State.................................   237
    Opening statement............................................   240
    Prepared statement...........................................   237
Powell, Michael K., Chairman, Federal Communications Commission..   183
    Prepared statement...........................................   183

Rider, Sally, Administrative Assistant to the Chief Justice, 
  Supreme Court of the United States, the judiciary..............   131

Smith, Hon. Fern M., Director, Federal Judicial Center, Federal 
  judiciary, the judiciary, prepared statement...................   159
Suter, William, Clerk of the Court, Supreme Court of the United 
  States, the judiciary..........................................   131

Talkin, Pamela, Marshal, Supreme Court of the United States, the 
  judiciary......................................................   131
The Asia Foundation, prepared statement..........................   473
The Humane Society of the United States, prepared statement......   453
The National Consortium for Justice Information and Statistics, 
  prepared statement.............................................   464
The Nature Conservancy, prepared statement.......................   433
The Ocean Conservancy, prepared statement........................   429
Thomas, Hon. Clarence, Associate Justice, Supreme Court of the 
  United States, the judiciary...................................   131
Thompson, Mozelle W., Commissioner, Federal Trade Commission, 
  prepared statement.............................................   423

Yukon River Drainage Fisheries Association, prepared statement...   436

 
                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF COMMERCE

            National Oceanic and Atmospheric Administration

                                                                   Page

Additional committee questions...................................   385
Climate services.................................................   369
Conservation Law Foundation, status of negotiations with.........   380
Energy...........................................................   372
    Initiative...................................................   402
Financial management in NOAA.....................................   374
Fishing restrictions in Northeast................................   380
Global climate change:
    Addressing...................................................   381
    Initiative...................................................   394
Groundfishing in Northeast.......................................   383
Homeland security................................................   373
International issues.............................................   403
National Estuarine Research Reserve Program......................   395
National sea grant college programI60375, 379, 383, 390, 391.....
    Transfer of..................................................   378
New England groundfish lawsuit...................................   388
NMFS:
    Annual stock assessments.....................................   384
    Lawsuits.....................................................   391
    Litigation case backlog......................................   379
NOAA:
    Energy initiative............................................   388
    Fisheries, modernization of..................................   370
    Organization and administration..............................   385
    Sole sourcing................................................   382
Northern right whales............................................   394
Ocean and coastal programs.......................................   374
Other key NOAA programs..........................................   372
People and infrastructure: $129.0 million adjustment-to-base.....   366
Saltonstall/Kennedy funds........................................   400
Science, role of.................................................   390
Weather warnings and forecasts, improving extreme................   366

                        Office of the Secretary

Additional committee questions...................................   331
Advanced Technology ProgramI60311, 316, 332......................
Bureau of Economic AnalysisI60321, 354...........................
Bureau of Export Administration..................................   317
Bureau of the Census.............................................   331
    Financial accounting systems.................................   334
    Fundamental change at........................................   351
    Internal operating system....................................   352
Commerce administrative management system (CAMS).................   341
Critical infrastructure protection...............................   344
Economic information and framework...............................   308
EDA:
    Investment criteria..........................................   336
    Program reduction............................................   326
Election reform standards........................................   333
Homeland securityI60308, 342, 346................................
Information infrastructure grantsI60321, 323.....................
International Trade Administration...............................   327
    Textile and manufacturing jobs...............................   337
MAF/TIGER, cost of...............................................   336
Manufacturing Extension Partnership ProgramI60313, 319, 332, 340, 
  356............................................................
Manufacturing jobs...............................................   338
Marine research..................................................   329
National Institute for Standards and Technology (NIST)I60316, 346
    Activities since September 11th..............................   317
National Telecommunications and Information Administration.......   315
    Technology Opportunities Program.............................   339
NOAA:
    Sea Grant Program............................................   337
        Transfer of National.....................................   354
Northeast economic development representative....................   325
Oceanic and atmospheric environment, observing and managing the 
  Nation's.......................................................   309
Patent and Trademark Office (PTO)I60338, 349.....................
Public Telecommunications Facilities Program.....................   356
Sea grant........................................................   316
Softwood lumber..................................................   354
Stellar sea lion.................................................   330
Technological innovation, providing infrastructure for...........   309
Trade adjustment assistance......................................   326
2010 decennial census:
    Cost effectiveness of........................................   351
    Cost of......................................................   333
    Cost savings.................................................   335
Vessel monitoring system.........................................   329
World Trade Center:
    Investigation................................................   333
    Towers.......................................................   348

                         DEPARTMENT OF JUSTICE

                     Office of the Attorney General

Additional committee questions...................................    54
Agreement with DOD, limitations on...............................    34
Anti-terrorism task forces.......................................    66
Antitrust Division...............................................    54
Antitrust:
    Enforcement clearance agreement..............................    15
    Responsibilities, DOJ's and FTC's plan to divide.............   110
Attorney General recusals........................................    18
Background checks................................................    57
Black tar heroin and methamphetamine trafficking Federal Bureau 
  of Investigation (FBI) and Drug Enforcement and Administration 
  (DEA)..........................................................   120
Border security..................................................    47
Civil rights:
    Advancing....................................................    11
    And hate crimes..............................................    70
    Of Arab Americans............................................    44
    Protecting...................................................    49
Civil Rights Division............................................    76
Coordination between agencies....................................    57
COPS program, reduction ofI6022, 35, 37..........................
Counterterrorism:
    Budget request...............................................     2
    Responsibilities.............................................    28
Crime:
    Against Arab Americans.......................................    71
    Supporting victims of........................................    10
Crisis management, roles in......................................    22
Cybercrime, combating............................................    50
Detention and incarceration capacity, managing increased Federal.    10
Drug trafficking and abuse, curbing..............................    50
Drugs budget request.............................................     3
Enron case:
    Need for special counsel in..................................    13
    Recusal......................................................    51
Federal Bureau of Investigation..................................    47
    Shift in responsibilities....................................    64
FEMA transfers...................................................    52
    Decision on..................................................    20
First responder training.........................................   117
First responders funding.........................................    21
Foreign terrorist tracking task force............................    66
Forensic science services and reducing the DNA backlog, improving    50
Hate crimes:
    Legislation..................................................    45
    Since 9/11...................................................    45
Illegal drugs, reducing the availability of and supporting proven 
  programs aimed at reducing drug use............................    11
Immigration services and enforcement, improving management of....    10
INS restructuring................................................   123
Internet-based regional information sharing system and Internet-
  based Law Enforcement Online Program...........................    67
Joint terrorism task forces and anti-terrorism task forces.......    65
Justice Department requests, other...............................     4
Law enforcement:
    Improving State and localI6048, 69...........................
    In Indian country............................................   113
Legal activities, enhancing the Department's.....................    12
Liberian deferred enforced departure.............................    24
Mental health courtsI6029, 119...................................
Methamphetamine..................................................    57
Mississippi redistricting plan...................................    74
National Guard:
    Arming the...................................................    35
    Deployment...................................................    33
NDPO and ODP to FEMA, transfer of................................    18
New Mexico.......................................................   126
NICS:
    Checklist....................................................    27
    Gun show loopholes...........................................    25
Northern border:
    Inspector earmark............................................    62
    Recruiting and retention.....................................    63
    Security.....................................................    40
        DOD participation in.....................................    32
Office of Victims of Crime.......................................   112
Other important activities.......................................    13
Postconviction DNA...............................................    38
    Review.......................................................    64
Preventing and combating terrorism, including securing the 
  Nation's border................................................     6
Professional Security Officer Career Program.....................    67
Project Child Safe...............................................    36
Radiation exposure compensation programI6030, 114................
Safe Explosives Act..............................................    36
Santa Teresa Port of Entry.......................................    31
    Staffing at..................................................   122
SCAAP elimination................................................   127
September 11th Victim Compensation Fund..........................    62
State and local:
    Assistance grants............................................    41
    Funding......................................................    43
    Law enforcement, streamlining assistance available to........    12
State court funding..............................................   111
Tax Division and Environmental and Natural Resources Division....    77
Title V--Juvenile Justice Local Delinquency Prevention...........   111
Tobacco litigation...............................................    43
    Resources....................................................    69
TrilogyI6042, 64.................................................
    Status report on.............................................    42
USA PATRIOT Act, technology funding request under the............    62
VAWA--New Mexico.................................................    29
Violence against women New Mexico funding........................   124
Voting and civil rights enforcement..............................     4

                          DEPARTMENT OF STATE

                        Office of the Secretary

Additional committee questions...................................   275
Afghan women.....................................................   278
Afghanistan:
    Funding for..................................................   298
    Future of....................................................   271
    Micro lending program in.....................................   269
    Peacekeeping and security in.................................   280
    Terrorist training camps in..................................   251
AIDS, funding for the fight against global.......................   284
Arabic Voice of America..........................................   283
Arms control.....................................................   263
Berlin Embassy site..............................................   248
Biennial budgeting...............................................   298
Biometric identification.........................................   252
Border security/consular affairs.................................   292
Budget issues....................................................   255
Capitalism.......................................................   272
    And the developing world.....................................   299
Center for Antiterrorism and Security Training (CAST) at Aberdeen 
  Proving Ground (APG)I60288, 296................................
Colombia:
    Human rights certification...................................   288
    Situation inI60258, 268......................................
Congo, peacekeeping in the.......................................   252
Congress, consultation with......................................   266
Convention on the Elimination of All Forms of Discrimination 
  Against Women (CEDAW)..........................................   277
Corruption/international crime...................................   303
Current events...................................................   256
Cyprus...........................................................   286
Department's long-range IT plan..................................   293
Diplomatic hiring initiative.....................................   291
Embassy:
    ConstructionI60248, 255, 291.................................
    Five-year construction plan..................................   254
    Security.....................................................   287
Foreign aid......................................................   298
    Funding......................................................   256
General State issues.............................................   290
Global hunger....................................................   285
Globalization and competition....................................   274
Hawaiian-based fishing fleets....................................   276
Human rights in Central Asia.....................................   304
International law enforcement....................................   296
International Law Enforcement Academy [ILEA].....................   270
International Monetary Fund (IMF)................................   297
Liberian immigrants in the United States.........................   262
Madagascar, facility in..........................................   247
Management challenges............................................   297
Mexico...........................................................   273
Middle East......................................................   289
Missile defense and Russia.......................................   265
Muslim Center in Vienna..........................................   249
NATO enlargement.................................................   286
Net fragments....................................................   276
Nuclear Posture Review (NPR).....................................   281
OSCE:
    And human rights.............................................   260
    Countries, police training in................................   262
    Role of the..................................................   259
Overseas buildings program.......................................   253
Peacekeeping:
    Funding......................................................   283
    General......................................................   294
Personnel........................................................   245
Policing.........................................................   305
Public diplomacy.................................................   277
Russia: OSCE.....................................................   304
Serbia...........................................................   289
Southeast European Cooperative Initiative........................   303
State and INS coordination.......................................   251
Terrorism:
    Compensation to victims of international.....................   287
    Expansion of the war on......................................   268
    Victims of compensation......................................   246
    Winning the war on...........................................   250
Trafficking in human beings......................................   305
United Nations:
    Capital master plan..........................................   295
    Dues, resynchronization of...................................   283
    Peacekeeping mission in the Congo............................   294
    Population Fund (UNFPA)......................................   283
    Reforms......................................................   302
United States:
    Long-term commitment to developing countries.................   257
    Policy on Iraq...............................................   266
    Russia relations.............................................   261
Visa:
    And passport activities......................................   271
    And passport fraud...........................................   300
    Procedures...................................................   300
Youth in developing countries....................................   302

                   FEDERAL COMMUNICATIONS COMMISSION

Additional committee questions...................................   206
Digital conversion...............................................   203
Emergency broadcast platforms....................................   203
FCC, view on abolishing the......................................   204
Fiscal year:
    2002: maximizing available resources.........................   184
    2003: continuing a year of progress..........................   188
NextWave case....................................................   195
1934 Communications Act..........................................   195
Spectrum, ownership of the.......................................   199
Summary statement................................................   192
Tauzin-Dingell bill..............................................   197
Universal service fund...........................................   200

                        FEDERAL TRADE COMMISSION

Additional committee questions...................................   425
Competition mission, maintaining.................................   413
Consumer protection mission......................................   409
Generic drug industry............................................   422
Needed resources--fiscal year 2003...............................   418
Summary statement................................................   405
Telemarketing....................................................   423

                   SECURITIES AND EXCHANGE COMMISSION

Accounting industry, review and reform of........................   234
CEOs, greater responsibilities on................................   233
Disclosure and accounting........................................   227
Disclosure system, improving the.................................   234
Funding:
    Level........................................................   225
    Structure....................................................   229
Information technology...........................................   229
Investor education...............................................   229
New legislative needs............................................   234
Opening remarks..................................................   230
Pay parity.......................................................   226
    Justification for funding....................................   231
President's proposed approach to address issues..................   233
Real-time enforcement............................................   227
Regulatory protection, effectiveness of..........................   235
Staffing:
    Additional needs.............................................   227
    Increased request............................................   231
    SEC levels and Commission workload...........................   232

                             THE JUDICIARY

                           Federal Judiciary

Additional committee questions...................................   179
Administrative Office:
    Budget request...............................................   155
    Contributions of the.........................................   150
    Relocation of the............................................   175
    Role of the..................................................   153
Anthrax attacks, impact of the...................................   146
Assistant U.S. Attorneys (AUSAs) impact of additional............   147
Budget overview..................................................   145
Civil cases, tracking............................................   181
Clerks' office staff.............................................   149
Cost containment and the judiciary's budget process..............   150
Court support staff..............................................   147
Defender services................................................   149
Federal Judicial Center, contributions of the....................   151
Judicial compensation............................................   151
Junkets/efforts to lobby the judiciary through seminars..........   179
Las Cruces Federal courthouse, status of.........................   178
Long-term implications...........................................   146
Mentally ill:
    Medications for the..........................................   177
    Services for the within the judicial system..................   176
New Federal defender office......................................   179
New Mexico, additional judgeship for.............................   178
Off-site court operations support center.........................   174
Panel attorney rate increase.....................................   172
Probation and pretrial services..................................   148
Program increases, request for...................................   172
Rate increase as an adjustment to base...........................   173
Resources requested..............................................   165
Responsibilities and accomplishments.............................   156
Security, heightened.............................................   147
September 11th attacks, impact of the............................   146
Terrorism trials, cost of........................................   173
2001 terrorism incidents, response to............................   153
2003 request.....................................................   159

                   Supreme Court of the United States

Building modernization...........................................   133
Building renovation and improvements.............................   137
Court automation.................................................   138
Judges' pay......................................................   139
Operations and maintenance.......................................   138
Program changes..................................................   138
Supreme Court budget.............................................   132

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