[Senate Hearing 107-447]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-447
 
                          OVERSIGHT OF THE FBI
=======================================================================




                                HEARINGS

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION
                               __________

                       JUNE 20 AND JULY 18, 2001
                               __________

                          Serial No. J-107-27
                               __________

         Printed for the use of the Committee on the Judiciary










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                             WASHINGTON : 2002
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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ORRIN G. HATCH, Utah
JOSEPH R. BIDEN, Jr., Delaware       STROM THURMOND, South Carolina
HERBERT KOHL, Wisconsin              CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         ARLEN SPECTER, Pennsylvania
RUSSELL D. FEINGOLD, Wisconsin       JON KYL, Arizona
CHARLES E. SCHUMER, New York         MIKE DeWINE, Ohio
RICHARD J. DURBIN, Illinois          JEFF SESSIONS, Alabama
MARIA CANTWELL, Washington           SAM BROWNBACK, Kansas
JOHN EDWARDS, North Carolina         MITCH McCONNELL, Kentucky
       Bruce A. Cohen, Majority Chief Counsel and Staff Director
                  Sharon Prost, Minority Chief Counsel
                Makan Delrahim, Minority Staff Director










                            C O N T E N T S

                              ----------                              

                        WEDNESDAY, JUNE 20, 2001
                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Durbin, Hon. Richard J., a U.S. Senator from the State of 
  Illinois.......................................................    16
Feingold, Hon. Russell D., a U.S. Senator from the State of 
  Wisconsin......................................................    13
Feinstein, Hon. Dianne, a U.S. Senator from the State of 
  California.....................................................     8
Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.    10
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......     6
Kohl, Hon. Herbert, a U.S. Senator from the State of Wisconsin...    18
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
McConnell, Hon. Mitch, a U.S. Senator from the State of Kentucky.    60
Schumer, Hon. Charles E., a U.S. Senator from the State of New 
  York...........................................................    15

                               WITNESSES

Bromwich, Michael R., former Inspector General, Department of 
  Justice, Washington, D.C.......................................    29
Danforth, John C., former United States Senator from the State of 
  Missouri, St. Louis, Missouri..................................    19
Fine, Glenn A., Inspector General, Department of Justice, 
  Washington, D.C................................................    23
Rabkin, Norman J., Managing Director, Tax Administration and 
  Justice Issues, General Accounting Office, Washington, D.C.....    39
Webster, William, Senior Partner, Milbank, Tweed, Hadley and 
  McCoy, LLP, Washington, D.C....................................    25

                        WEDNESDAY, JULY 18, 2001
                    STATEMENTS OF COMMITTEE MEMBERS

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.    93
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......    99
Kohl, Hon. Herbert, a U.S. Senator from the State of Wisconsin...   156
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.    63

                               WITNESSES

Dies, Bob E., Assistant Director, Information Resources Division, 
  Federal Bureau of Investigation, Washington, D.C...............    77
Kelly, Raymond W., Senior Managing Director, Bear Stearns, New 
  York, New York and former Commissioner, U.S. Customs Service...    72
Kiernan, Patrick J., Supervisory Senior Resident Agent, Federal 
  Bureau of Investigation, Washington, D.C.......................   133
Perry, Frank L., Supervisory Senior Resident Agent, Federal 
  Bureau of Investigation, Washington, D.C.......................   128
Roberts, John E., Unit Chief, Office of Professional 
  Responsibility, Federal Bureau of Investigation, Washington, 
  D.C............................................................   114
Senser, Kenneth H., Acting Deputy Assistant Director, Security 
  Programs and Countermeasures, Federal Bureau of Investigation, 
  Washington, D.C................................................    83
Werner, John, Blue Sky Enterprises of North Carolina, Inc., Cary, 
  North Carolina.................................................   121
                                 ------                                

                         QUESTIONS AND ANSWERS

Questions from Senators Leahy and McConnell for Senator Danforth.   144
Questions from Senator Leahy for Norman Rabkin...................   145
Responses of John C. Danforth to questions submitted by Senators 
  Leahy and McConnell............................................   146
Responses of Norman J. Rabkin to questions submitted by Senator 
  Leahy..........................................................   148
Responses of William H. Webster to questions submitted by Senator 
  Leahy..........................................................   149

                       SUBMISSIONS FOR THE RECORD

Ashcroft, Hon. John, Attorney General of the United States, 
  memorandum, June 20, 2001......................................   152
Federal Bureau of Investigation:
    John E. Collingwood, Assistant Director, Office of Public and 
      Congressional Affairs, letter, June 20, 2001...............   153
    Louis J. Freeh, Director, memorandum, August 15, 2000........   154
Hatch, Hon. Orrin G., Major Accomplishments of FBI Director Louis 
  J. Freeh, 1993-2001, summary...................................   160
Walker, Samuel, Department of Criminal Justice, University of 
  Nebraska at Omaha, Omaha, Nebraska, statement..................   156


               OVERSIGHT: RESTORING CONFIDENCE IN THE FBI

                              ----------                              

                        WEDNESDAY, JUNE 20, 2001

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 1:05 p.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Patrick J. 
Leahy, Chairman of the Committee, presiding.
    Present: Senators Leahy, Feinstein, Feingold, Schumer, 
Durbin, Hatch, Grassley, and Sessions.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. Good afternoon. The Judiciary Committee 
will begin oversight hearings on the Federal Bureau of 
Investigation today. Oversight of the Department of Justice, of 
which the FBI is a part, is among this Committee's most 
important responsibilities, and there has never been a greater 
need for constructive oversight of the Bureau.
    The FBI has long been considered a crown jewel of law 
enforcement agencies. Unfortunately, today it has lost a lot of 
its earlier luster. Unfortunately, the image of the FBI in the 
minds of too many Americans is that this agency has become 
unmanageable, unaccountable and unreliable. Its much-vaunted 
independence has been transformed for some into an image of 
insular arrogance.
    I think this is unfortunate because of the extremely 
dedicated men and women in the Bureau, many who do work at the 
finest possible level. But we now have an historic window of 
opportunity to examine the present state of the FBI and help 
guide constructive reforms to make the Bureau more effective, 
better managed and more accountable.
    The current FBI director has announced his resignation. No 
successor has yet been named, and so this is a particularly 
appropriate time for us to take stock and think about how we 
should plan for the FBI in the 21st century, and also what 
guidance this Committee might give to the new director, whoever 
he or she may be.
    I would hope that these hearings will help the members of 
this Committee prepare for the new director's confirmation 
hearings. We had invited Director Freeh here today to thank him 
for his public service and to hear from him what his advice 
would be to his successor. I thought it would be appropriate to 
begin these hearings by acknowledging all the positive 
contributions he has made during his last 8 years. I also 
wanted to get his assessment of the problems that remain. When 
I spoke to him last week, he explained that he would not be 
able to attend.
    In recent years, we have seen case after case where the FBI 
has fallen short, and sometimes far short of the high standards 
of professionalism and integrity that we expect of our Nation's 
premier law enforcement agency.
    Last month, a veteran FBI agent was indicted for allegedly 
selling some of this country's most sensitive classified 
information to the Russians. According to the indictment, it is 
claimed spying went on for more than 15 years before the FBI 
detected the source of major security breaches and intelligence 
losses, despite numerous red flags that pointed to him. We 
learned from press reports today that just last week a support 
employee of the FBI in Las Vegas was arrested for allegedly 
selling sensitive investigative material to organized crime for 
over a year.
    In the Oklahoma City bombing case, the FBI revealed only a 
few days before the defendant was scheduled to be executed that 
it had violated its discovery obligations by failing to turn 
over thousands of pages of documents to the defense. While the 
trial judge later ruled that this violation did not undermine 
the defendant's conviction or death sentence, the trial judge 
noted that it was up to others to hold the FBI accountable for 
its conduct.
    Whatever questions the belated document production raised 
about the efficacy of the FBI, the trial judge concluded that 
the integrity of the adjudicative processes leading to the 
verdict and death penalty were sound. The judge said, ``There 
is a great deal of difference between an undisciplined 
organization and an organization that is not adequately 
controlled that can't keep track of its information. Those are 
not the questions here. We are not here for the purpose of 
trying the FBI.''
    But the Oklahoma City bombing case is only the most recent 
one in which the FBI has violated its disclosure obligations. 
In 1995, a Subcommittee of the Judiciary Committee, under the 
leadership of Senators Specter and Kohl, held hearings on the 
tragic events at Ruby Ridge. The Subcommittee report, in which 
I joined, found that the FBI had willfully and repeatedly 
failed to abide by discovery rules and had irreparably damaged 
the Government's presentation of evidence at the criminal 
trial, causing a Federal judge to impose contempt sanctions.
    We have also seen cases such as those of Wen Ho Lee, 
Richard Jewell and Tom Stewart, in which the FBI improperly 
leaked information about an ongoing criminal investigation. 
More than that, these premature leaks about suspected criminals 
may focus attention on the wrong persons and allow the real 
culprits to escape detection. We saw this after the Centennial 
Olympic Park bombing in July 1996, during the Summer Olympic 
Games. The FBI was making it very clear to the country that 
they had the right person, had him under surveillance, and so 
and so forth, and then finally acknowledged a series of 
mistakes. They had the wrong person. By then, the person they 
eventually charged had fled the area.
    Tom Stewart was paid $6 million in damages last year as a 
result of the FBI wrongfully releasing damaging information 
that he was a criminal suspect. Wen Ho Lee's suit is still 
pending. Of course, we know the amounts of money paid following 
Ruby Ridge.
    Serious questions have been raised about the FBI's use of 
informants. There have been cases in which FBI agents have 
allegedly leaked confidential law enforcement information to 
criminal informants, and then the informants use that as a way 
to flee.
    In a case in Boston, I think one of the most egregious 
matters, the FBI allegedly allowed two innocent men to spend 
decades in prison for a murder that the FBI knew had been 
committed by one of its informants. In a case in New York, an 
FBI agent allegedly leaked information in a Mafia case about 
the imminent arrest of a confidential informant's son, who then 
fled.
    Everybody on this Committee knows the tremendous things 
that the FBI has done to protect and preserve the people of 
this country and to uphold our laws. But when we see these 
kinds of failures and mistakes, it is no wonder that public 
confidence has weakened in the FBI.
    According to a recent Gallup poll, only 38 percent of 
Americans have a great deal or quite a lot of confidence in the 
FBI. Twenty-three percent of those polled had very little or no 
confidence in the FBI. Confidence in State and local police is 
substantially higher, with about 60 percent of Americans having 
a great deal or a lot of confidence.
    An erosion of public trust threatens the FBI's ability to 
perform its mission. Think of the effect it will have on judges 
and juries and people who must rely on the FBI. Think of what 
happens when FBI agents perform forensic and other critical 
work for law enforcement and we cannot trust them.
    We have allocated to the FBI millions, even billions of 
dollars in increased funding because we wanted to have it 
become one of the world's leading crime-fighting agencies. 
Simply throwing money is not enough; we must do the oversight 
necessary.
    We are not here to find ways to tear down the FBI, but to 
find ways to restore confidence in it. There are many 
irresponsible critics of the FBI who promote their conspiracy 
theories on Internet web sites and in the popular media. 
Fortunately, the great majority of American citizens have too 
much sense to believe in this.
    The FBI is a national asset, and we should help it function 
effectively. We should not overlook the brave men and women, 
many of whom put their lives on the line for us all the time, 
from the FBI. We often forget the far greater number of cases 
where the FBI does its job quietly, professionally and without 
public fanfare, as we focus on those where they don't. Any 
constructive criticism of the FBI as an institution is not 
meant in any way to disparage its agents' sacrifices on our 
country's behalf.
    Our efforts must be, and I am confident will be bipartisan. 
During the past several weeks, Senators on both sides of the 
aisle have expressed their concern about the present state of 
the FBI. They have talked about various legislative proposals 
to address the problems they have identified, both Republicans 
and Democrats have. So it is not an issue of either political 
party; it is an issue of the future security of our country.
    We have to ask ourselves, who polices the FBI? Our focus is 
the mechanisms that currently exist for overseeing the 
activities of the FBI, and we should identify any gaps there.
    We have an outstanding panel here today. Most are known to 
each member of this Committee. They all have familiarity and 
expertise with different aspects of the oversight process, and 
we will hear from them because our goal is to restore the 
luster, the effectiveness and the professionalism of this law 
enforcement agency and make it a crown jewel of not only our 
law enforcement agencies but those throughout the world.
    [The prepared statement of Senator Leahy follows:]

 Statement of Hon. Patrick J. Leahy, a U.S. Senator from the State of 
                                Vermont

    Today, the Judiciary Committee begins oversight hearings on the 
Federal Bureau of Investigation. Oversight of the Department of 
Justice, of which the FBI is a part, is among this Committee's most 
important responsibilities. There has never been a greater need for 
constructive oversight of the FBI. The FBI has long been considered the 
crown jewel of law enforcement agencies. Today, it has lost some of its 
earlier luster. Unfortunately, the image of the FBI in the minds of too 
many Americans is that this agency has become unmanageable, 
unaccountable and unreliable. Its much vaunted independence has 
transformed, for some, into an image of insular arrogance.
    We now have an historic window of opportunity to examine the 
present state of the FBI and help guide constructive reforms to make 
the Bureau effective, better managed, more accountable. The current FBI 
director has announced his resignation. No successor has not yet been 
named. This is a particularly appropriate time for us to take stock and 
think about how we should plan for the FBI of the 21st century. I would 
hope that these hearings as will help the Members of this Committee 
prepare for the new Director's confirmation hearings as well as apprise 
the nominee of the challenges that confront us all.
    We had invited Director Freeh here today to thank him for his 
public service and to hear from him what his advice would be to his 
successor. I thought that it would be appropriate to begin these 
hearings by acknowledging all the positive contributions that he has 
made during the last eight years. I also wanted to get his assessment 
of the problems that remain. He explained to me when we spoke last week 
that he was unavailable due to illness in his family. We regret that 
family illness has prevented him from joining us here this afternoon, 
and wish his family good health.
    In recent years we have seen case after case where the FBI has 
fallen short--and sometimes far short--of the high standards of 
professionalism and integrity that we expect of our nation's premier 
law enforcement agency:
         Last month, a veteran FBI agent was indicted for 
        allegedly selling some this country's most sensitive classified 
        information to the Russians. According to the indictment, his 
        alleged spying went on for more than 15 years before the FBI 
        detected the source of major security breaches and intelligence 
        losses, despite numerous ``red flags'' that pointed to the 
        defendant. According to the public complaint and indictment in 
        the case, these ``red flags'' included a 1986 wiretapped 
        conversation between the defendant and a KGB officer in the 
        Soviet embassy; the confession of a convicted American spy, 
        Earl Pitts, who warned about another ``mole'' within the FBI 
        and specifically named the defendant; the report of an FBI 
        analyst, who also warned of a ``mole'' within the FBI, but 
        whose warnings were not credited; and the defendant's own 
        suspicious financial situation and use of FBI computers.
         We learned from press reports today that last week, a 
        support employee of the FBI in Las Vegas was arrested for 
        allegedly selling sensitive investigative material to organized 
        crime for over a year.
         In the Oklahoma City bombing case, the FBI revealed 
        only a few days before tile defendant was scheduled to be 
        executed that it had violated its discovery obligations by 
        failing to turn over thousands of pages of documents to the 
        defense. While the trial judge later ruled that this violation 
        did not undermine the defendant's conviction or death sentence, 
        the trial--judge noted that it was tip to others to hold the 
        FBI accountable for--its conduct. Whatever question the belated 
        document production raised about the efficacy of the FBI, the 
        trial judge concluded that the integrity of the adjudicative 
        process leading to the verdict and death penalty were sound. He 
        said: ``there is a great deal of difference between an 
        undisciplined organization or organization that is not 
        adequately controlled or that can't keep track of its 
        information--those are not the questions here. We're not here 
        for the purpose of trying the FBI.''
         The Oklahoma City bombing case is only the most recent 
        one in which the FBI has violated its disclosure obligations. 
        In 1995, a Subcommittee of the Judiciary Committee, under the 
        leadership of Senators Specter and Kohl, held hearings oil the 
        tragic events at Ruby Ridge. The Subcommittee report, in which 
        I joined, found that the FBI had ``willfully and repeatedly 
        failed to abide by discovery rules,'' and had ``irreparably 
        damaged the government's presentation of evidence at the 
        criminal trial,'' causing a federal judge to impose contempt 
        sanctions against the government.
         We have also seen cases such as those of Wen Ho Lee, 
        Richard Jewell and Tom Stewart in which the FBI has improperly 
        leaked information about an ongoing criminal investigation. 
        This is a deeply serious issue that troubles all who are 
        concerned with protecting the integrity of our justice system 
        and the constitutional rights of our citizens. More than that, 
        these premature leaks about suspected criminals may focus 
        attention on the wrong persons and allow the real culprits to 
        escape detection, to the detriment of our public safety and 
        national security. For example, the criminal who committed the 
        Centennial Olympic Park bombing in July 1996, during the Summer 
        Olympic Games, remains at large. On occasion, these leaks 
        result in substantial verdicts against the government for which 
        we taxpayers foot the bill. Tom Stewart was paid S6 million in 
        damages last year as a result of the FBI wrongfully releasing 
        damaging information that he was a criminal suspect. Wen Ho 
        Lee's lawsuit against the government is still pending.
         Serious questions have also been raised about the 
        FBI's use of informants. There have been cases in which FBI 
        agents have allegedly leaked confidential law enforcement 
        information to criminal informants, which the informants then 
        used to commit crimes or to flee. In a case in Boston, the FBI 
        allegedly allowed two innocent men to spend decades in prison 
        for a murder that the FBI knew had been committed by one of its 
        informants. In a case in New York, an FBI agent allegedly 
        leaked information in a Mafia case about the imminent arrest of 
        the confidential informant's son, who then fled.
    This list of failures and mistakes has seriously weakened public 
confidence in the FBI. According to a recent Gallup poll, only 38 
percent of Americans have ``a great deal'' or ``quite a lot'' of 
confidence in the FBI, and 23 percent of those polled had very little 
or no confidence ill the FBI. Confidence in state and local police is 
substantially higher, with about 60 percent of Americans having ``a 
great deal'' or ``quite a lot'' of confidence in these other law--
enforcement forces. This erosion of public trust threatens the FBI's 
ability to perform its mission. Citizens who mistrust the FBI will he 
less likely to come forward and report information about criminal 
activity. Judges and jurors will be less likely to believe the 
testimony of FBI witnesses. Even innocent or minor mistakes by the FBI 
in future cases may he perceived in a sinister light that is not 
warranted. Since FBI agents perform forensic and other critical work 
for many law enforcement agencies on the federal, state and local 
levels, the repercussions of this lapse in public confidence in the FBI 
has rippled far beyond just federal criminal cases.
    To many of us in Congress, this is a particularly troubling 
situation. For years, we have almost never said no when the FBI has 
asked us for new resources. We have allocated to the FBI millions of 
dollars in increased funding because we all wanted to see it remain the 
world's leading crime-fighting agency. It should be obvious now that 
simply throwing more money at the FBI is not the answer. The time has 
come when this Committee must exercise its oversight responsibilities 
and take a hard, thorough and nonpartisan look at the FBI to determine 
what has gone wrong and what can be done to fix things.
    But as we go about this process, there are several things that we 
need to bear in mind.
    First, our purpose in holding these hearings is to find ways to 
restore confidence in the FBI, not to tear it down. There are many 
irresponsible critics of the FBI who promote their conspiracy theories 
on Internet Web sites and in the popular media. Fortunately, the great 
majority of the American people have too much common sense than to 
believe them. The FBI is a vital national asset, and we need it to 
function effectively.
    Second, we must not overlook the fact that the FBI is staffed by 
many brave, dedicated men and women who risk their lives protecting the 
interests of this country and the safety of its citizens. While we are 
constantly reminded of the cases where things have gone wrong, we often 
forget the far greater number of cases where the FBI does its job 
quietly, professionally and without public fanfare. Any constructive 
criticism of the FBI as an institution is not meant in any way to 
disparage its agents' sacrifices on our country's behalf.
    Finally, our efforts must be, and I am confident will be, 
bipartisan. Over the past several weeks, senators on both sides of the 
aisle have expressed their concern about the present state of the FBI 
and discussed various legislative proposals to address the problems 
they have identified. This is not a Democratic or Republican issue. The 
future security of our country is far too important.
    The question at the center of our first hearing is this: Who 
polices the FBI? Our focus is the mechanisms that currently exist for 
overseeing the activities of the FBI, and we intend to identify any 
gaps and problems that currently exist in FBI oversight, determine the 
status of oversight investigations that are currently underway and 
begin to formulate ways that oversight can be improved. We are 
extremely fortunate to have with us an outstanding panel of 
distinguished witnesses who have familiarity and expertise with 
different aspects of the oversight process. I look forward to hearing 
from them about how this process works now and how we can make it work 
better to ensure that mistakes are acknowledged, constructive 
recommendations for reform are adopted, and intentional misconduct is 
adequately punished. Our goal is to restore the luster, the 
effectiveness and the professionalism of the crown jewel of law 
enforcement agencies.

    Chairman Leahy. I turn to my good friend, the senior 
Senator from Utah.

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE 
                            OF UTAH

    Senator Hatch. Thank you, Chairman Leahy. I would like to 
thank you for convening this hearing.
    The Federal Bureau of Investigation, of course, is the 
preeminent law enforcement agency in the world. It plays an 
essential role in our criminal justice system, and its ability 
to investigate crimes and find out the truth is unmatched 
anywhere in the world.
    There are millions of cases that the FBI has handled. I 
think we can always single out a few where it hasn't handled 
them very well, but that is probably true of, I believe, any 
organization. It may even be true of the U.S. Senate. I doubt 
it, but you never know.
    That said, there are serious issues concerning the 
operation of the FBI that must be addressed in a thoughtful, 
substantive, and proactive way. The American people rely on the 
protections provided by the fine men and women at the FBI and 
deserve the best possible performance that the FBI can deliver.
    Unquestionably, there is always room for improvement in the 
operation of the Bureau. The FBI, in conjunction with the 
Justice Department, simply must adhere to the highest standards 
of conduct in its investigations, in its use of informants, and 
in the fulfillment of its discovery obligations.
    It is important, however, to keep the current problems at 
the FBI in perspective. The men and women of the FBI are 
dedicated professionals to whom we owe a great debt of 
gratitude. They solve difficult and important cases everyday. 
Despite the serious problems that exist, the fact remains that 
the FBI solved the Oklahoma City bombing, the World Trade 
Center bombing, and the terrorists attacks in East Africa, 
among the literally hundreds of thousands of others that do not 
get the same profile in the press.
    I might add that we don't see headlines about some of these 
great things that they do because they are not emphasized. When 
was the last time you saw a headline where the FBI stopped 
terrorist organizations in very serious attempts to spread 
biological and other types of chemical weapons, weapons of mass 
destruction? But they have.
    Chairman Leahy has expressed a desire to do a series of 
oversight hearings on the FBI. I fully support him in this 
effort and commend him for his prompt attention to this matter. 
This Committee's oversight responsibilities are an important 
element of our system of constitutional checks and balances.
    I think it needs to be emphasized that, in my opinion, the 
focus of the oversight must be to improve the FBI and prepare 
it to be even more effective in the 21st century. Confidence in 
the FBI and in the criminal justice system generally is 
necessary for our system of governmental law enforcement to 
operate effectively.
    I believe we must vigorously and constructively examine the 
current managerial issues and focus on how to build a better 
FBI. In particular, I believe we should look critically at the 
culture of the FBI and how it is or is not effectively 
integrated with the Justice Department.
    I also believe that as we proceed through this essential 
oversight process, we must continue to be careful to respect 
the existence of ongoing criminal investigations, especially 
some of these high-profile, important investigations. We have 
to be very careful to respect the existence of inspector 
general investigations and, of course, all national security 
issues.
    Our Committee is best suited to a vigorous examination and 
debate of the policy issues involved and less equipped to 
perform the intensive factual examinations already underway in 
the open criminal and IG investigations. I look forward to 
working with Chairman Leahy and other members of this Committee 
to ensure thorough oversight of the Bureau, while continuing to 
be sensitive to the investigations and national security 
concerns of some of the active matters at the Bureau.
    In the end, I believe that any constructive oversight and 
development of future reforms at the FBI must address two key 
issues: one, a permanent oversight mechanism, and two, a 
mechanism through which outside experts can bring their 
expertise and objectivity to bear on the possible solutions to 
the problems that exist at the FBI.
    As to the first issue, there are various proposals, ranging 
from improvements to the Justice Department's Inspector General 
and its ability to perform oversight at the FBI, to the 
establishment of a separate inspector general exclusively for 
the FBI. I look forward to working with my colleagues in 
evaluating these ideas, although I generally favor working 
within the Justice Department structure.
    On the second issue, I have announced that I have been 
working with Senator Schumer to develop a bipartisan, expert 
blue-ribbon commission to do a strategic, thorough review of 
the FBI and make recommendations for its improvement. I commend 
Senator Schumer for his leadership on this issue and look 
forward to working with him and our distinguished chairman, 
Senator Leahy, to see that this legislation is enacted.
    The Schumer-Hatch legislation would create a commission 
which would be able to bring outside, objective expertise to 
bear on the issues that currently challenge the FBI. The 
inspector generals are great at doing factual investigations, 
but they are not designed to do strategic, long-term 
recommendations on these important policy and managerial 
issues. The blue-ribbon commission can fill that gap. It is 
bipartisan, objective, and focused upon solutions, not 
headlines.
    I welcome our witnesses either today or in the coming days 
to provide us with their views and recommendations on improving 
this particular legislation. I welcome all of the witnesses 
here today, good people, and I look forward to hearing from 
each and every one of you. This is a distinguished panel, and I 
will work with the Chairman to constructively pursue this 
important oversight project.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you, Senator Hatch.
    We have had some good effects of just having the hearings. 
We have had one response from the Department of Justice and the 
FBI. The FBI has written a letter promising better cooperation 
with the GAO, one of the things I raised with them. The 
Attorney General has asked the Deputy Attorney General to 
conduct a comprehensive review of the FBI.
    Both of these things are welcome, and I will put that 
correspondence in the record.
    I turn to the distinguished Senator from California.

  STATEMENT OF HON. DIANNE FEINSTEIN, A U.S. SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Feinstein. Thanks very much, Mr. Chairman, and let 
me join with the Ranking Member in thanking you for holding 
these hearings.
    Mr. Chairman, I believe that every member of this 
Committee, on the Republican side and on the Democratic side, 
has a deep and abiding respect for the Federal Bureau of 
Investigation. I think we have seen time after time, under the 
most difficult of circumstances, in major criminal events, the 
energy, the creativity and the experience really prove to 
enable an arrest to be made. I think it is a very important and 
critical institution in our Government.
    However, I have noticed a couple of things, and I am not 
going to read; I am just sort of going to talk about what I 
feel. I have seen in this very professional culture a kind of 
arrogance creep, and that arrogance puts itself forward in 
different situations.
    I went through the Ruby Ridge hearings, I went through the 
Waco hearings. I saw where the Washington aspect of the FBI can 
essentially duck in a major event and the SAC takes the 
responsibility for what might happen. So I recognize that there 
is a precarious balance.
    But I have seen a few things just in the popular press that 
have really concerned me, and let me just lay out, because 
everybody knows about this, the Monica Lewinsky case, where FBI 
agents held that young woman for a long period of time without 
allowing her to have counsel, and as a product she was 
terrified. That wasn't necessary. Why do it? That is the first 
instance.
    Another instance was in the Wen Ho Lee case. I think Mr. 
Bromwich has suggested that it is almost impossible to imagine 
that such unprecedented charges, the first ever criminal 
charges under the Atomic Energy Act, would have been made if 
Mr. Lee had not been previously targeted by the FBI.
    Then there was the reported conduct during the 
interrogation of Wen Ho Lee, when he was compared to the 
Rosenbergs, and the insinuation was that if he didn't cooperate 
he would go the way of the Rosenbergs. If, in fact, that 
happened, it is not professional conduct of well-trained law 
enforcement officers, I don't believe.
    I have also seen instances of leaking information, and I 
don't think that is professional conduct either. Let me give an 
example. During the World Trade Center case, it is my 
understanding that one of the defendants, without a lawyer, set 
up a meeting with prosecutors and FBI agents to negotiate for a 
lighter sentence. At that meeting, it is reported that the 
defendant incriminated another terrorist defendant, a person 
suspected of helping bomb our embassies in Kenya and Tanzania 
who was then under arrest and awaiting trial.
    The substance of that secret meeting was then leaked 
practically verbatim to the New York Times, which ran a lengthy 
article on October 22, 1998. So, in other words, the New York 
Times ran a story about one defendant's attempt to gain a 
lighter sentence by offering uncorroborated allegations against 
another defendant, and did so while that second defendant was 
still awaiting trial. So I think disclosures like that, whether 
it is a question of management, whether it is a question of 
constant in-service training, to me are wholly improper.
    That even hit closer to home last week when a Federal judge 
ruled that a Justice Department official--and I don't know 
whether this was FBI or Justice--may have leaked information in 
the Newark Star Ledger, in violation of Federal grand jury 
secrecy rules. I would like to just quickly read from that 
opinion.
    ``In the March 6, 2000, Star Ledger article, submitted by 
Senator Torricelli, information regarding the issuance of grand 
jury subpoenas to Committee fundraisers and donors is 
attributed to a senior Justice Department official, who was 
later described as speaking on the condition of anonymity. The 
attribution clearly satisfies the second prong of the Lance 
test''--that is the test for determining whether the movant has 
made a prime facie case for showing a violation of grand jury 
secrecy rules--``because officials in the Justice Department, 
of which the task force was a part, qualify as persons covered 
by Rule 6(e)'s secrecy provisions.''
    Now, of course, we don't know who that senior official in 
the Justice Department is, but these again, I think, are things 
that show a kind of arrogance, if you will, creeping into how 
you handle individuals and how you handle case material. So I 
am going to ask some questions--all of you are very 
distinguished and very knowledgeable--about what you might do 
to handle that.
    Thanks, Mr. Chairman.
    Chairman Leahy. Thank you very much.
    Senator Grassley.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE 
                         STATE OF IOWA

    Senator Grassley. ``Restoring Confidence in the FBI'' is a 
particularly good title for this hearing because confidence is 
what truly goes to the heart of the issue that we are here to 
discuss today.
    My father taught me the FBI could do no wrong, but I think 
confidence in the FBI, particularly the presumption of 
integrity, has been shaken. There is no question that for too 
long the FBI has broken faith with the American people. The 
time for meaningful and lasting reform is now, and it is up to 
us to help the FBI regain the trust and confidence of the 
American people.
    As an advocate for FBI reform, what often gets lost in my 
comments is the respect that we must all have, and I have, for 
the thousands of men and women who are serving their country 
well as FBI employees. But the FBI management is broken, and 
this does a real disservice to the hard-working agents on the 
street.
    Now, at long last, we have consensus for reform. Reform 
should be structured around three areas: accountability, 
jurisdiction and leadership; accountability through the 
enhancement of executive and congressional oversight, 
jurisdiction through the streamlining of the FBI's 
investigative responsibilities, and leadership through the 
selection of a new director with an appetite for reform and the 
wherewithal to accomplish it.
    The issue of accountability is the most important part of 
the reform effort. The FBI is buried under a mountain of 
evidence proving that it cannot police itself. The culture 
within the FBI is so entrenched that there can be no way of 
changing it without introducing an element of independent 
oversight.
    There are many options, but at this time I believe the 
option that we should choose is to enhance the existing 
structure of the DOJ Inspector General as the more viable 
course to take. This is a position that I have been advocating 
since the FBI Crime Lab investigation in 1997.
    I am hesitant to create an entirely new inspector general 
bureaucracy in the FBI that may only serve to isolate and 
insulate the Bureau further from the rest of the law 
enforcement community. It is exactly this notion of privilege 
and separateness that helps to feed the Bureau's culture of 
arrogance.
    With regard to jurisdiction, many of you may remember the 
Webster Commission. I am pleased that Judge Webster is here. 
One of the recommendations of that commission was to expand 
jurisdiction of the FBI and that the DEA and the ATF should be 
folded into the FBI.
    Here today, sitting in the wake of the Hanssen and McVeigh 
fiascoes, it seems to me that is not a viable option. It 
couldn't be clearer that the FBI has simply become too unwieldy 
to be effectively managed. The answer to the problem at the 
Bureau will not be found in increasing its jurisdiction, nor 
will the concerns of the American people be addressed by 
creating a de facto national police force.
    The history of congressional response to the FBI's problems 
has usually been that the FBI ends up with a bigger budget, 
more program jurisdiction, and the director walks out of this 
room with a nice pat on the back. I believe that the FBI will 
become a more efficient and accountable organization through 
the narrowing of its investigative focus.
    Finally, with an opening for the Director of the FBI, this 
gives us a real opportunity. President Bush will be naming that 
new director, and that person needs to make changes. This 
person needs to change the kind of culture that places 
publicity and image before basics and fundamentals. This person 
needs to change the kind of culture that holds press 
conferences in high-profile cases before all the facts are in. 
We have seen the consequences of this approach in cases such as 
Richard Jewell, Wen Ho Lee, and the TWA 800 investigation.
    The new director needs to change the kind of culture that 
suppresses dissent and discourages independent oversight. 
Director Freeh once stated the following with regard to the 
FBI: ``We are potentially the most dangerous agency in the 
country if we are not scrutinized carefully.'' I agree, so let 
us now get down to the business of helping the FBI and its new 
director regain trust and confidence from the American people.
    [The prepared statement of Senator Grassley follows:]

Statement of Hon. Charles E. Grassley, a U.S. Senator from the State of 
                                  Iowa

    Mr. Chairman, Senator Hatch, colleagues, and distinguished guests; 
today, we highlight the issue of FBI oversight. As most of you know, I 
have been a long-time advocate of the need for enhanced FBI oversight 
and I am very pleased to be able to address this distinguished group on 
this vitally important issue.
    I would like to begin by saying that the title of today's hearing, 
``Restoring Confidence in the FBI'', is particularly appropriate 
because the word ``confidence'' is what truly goes to the heart of the 
problem we are here to discuss today. All of the public institutions in 
this country have a moral contract with the American people. This 
contract--deceptively simple in design balances the trust of the 
American people with the performance of those entrusted to their 
service. I grew up--the son of a farmer--with a whole generation of 
people believing the FBI could do no wrong. My father taught me to be 
proud of the FBI. But now that confidence--that presumption of 
integrity--has been shaken. Let there be no question, for far too long, 
the FBI has broken faith with the American people. When our public 
servants fail in their performance, then they lose the trust and 
confidence of the American people--and the moral contract is broken. 
The time for meaningful and lasting reform is now. It is up to us to 
rewrite and restore that moral contract, and to help the FBI regain the 
trust and confidence of the American people.
    As an ardent advocate of the FBI reform, what often gets lost in my 
comments is the respect that I have for the thousands of men and women 
serving their country as FBI employees. My criticisms should in no way 
minimize the great sacrifices that our honest and hardworking FBI agent 
and support personnel make every day for our country. But these men and 
women--as do the American people--need and deserve an organization that 
has integrity and credibility. The FBI management system they are 
working within is broken, and this does a real disservice to the 
hardworking agents on the street. For too long the FBI has grown 
essentially unchecked by any meaningful oversight. The result has been 
the development of a pervasive atmosphere of arrogance. This cloud of 
arrogance permeates the every day activities of the Bureau and shows 
contempt for any public or private entity that dares to question its 
motives or performance. And, perhaps more importantly, this cloud of 
arrogance also shows contempt for those within the FBI organization who 
are brave enough to sound the alarm. I sponsored the Whistleblower 
Protection Act in 1989, yet to this day, the FBI has failed to 
adequately protect FBI agents who speak up about management problems. 
Now, at long last, it appears we have a consensus for reform. We can 
agree, at least, something must be done. I would like to suggest that 
the plan for reform should be structured around three areas: 
Accountability, Jurisdiction, and Leadership. Accountability, through 
the enhancement of executive and congressional branch oversight; 
Jurisdiction, through the streamlining of the FBI's investigative 
responsibilities; and Leadership, through the selection of a new 
Director with an appetite for reform and the wherewithal to accomplish 
it.
    First, I would like to address the important issue of 
accountability. Here, I believe, is the most vital part of the reform 
effort. Let it be understood, the current system involving the FBI's 
Office of Professional Responsibility cannot be allowed to continue as 
is. The FBI is buried under a mountain of evidence proving that it 
cannot police itself. The culture within the Bureau is to stifle 
dissent and to marginalize those who would expose waste, fraud and 
abuse. Senior management places a higher value on maintaining image 
rather than rooting out wrong. This attitude is so entrenched in the 
culture of the FBI that there can be no way of changing it without 
introducing an element of independent oversight. The two most prominent 
options being discussed are to either create an independent Inspector 
General of the FBI, or to enhance the existing powers of the Inspector 
General of the Department of Justice. Either of these options would 
bring a much-needed element of oversight and accountability to the FBI 
that is not there today. But, at this time, I would argue that the 
option to enhance the existing structure of the DOJ Inspector General, 
a position I've taken since the FBI Crime-Lab investigations in 1997, 
is the more viable course to take for the following reasons. First, 
there is already a structure in place at DOJ. While some have argued 
that the size and importance of the FBI and the sensitivity of their 
operation calls for a separate IG, I would argue differently. As part 
of the Department of Justice, the FBI should be treated as such, and 
should not be accorded any special treatment. And, I am hesitant to 
create an entirely new bureaucracy that may only serve to isolate and 
insulate the Bureau further from the rest of the federal law 
enforcement community. It is exactly this notion of privilege and 
separateness that helps to feed the Bureau's culture of arrogance.
    In addition to the enhancement of the powers of the DOJ IG, I would 
advocate some additional provisions, such as: the addition of 
whistleblower protection provisions; clarification on the provisions 
for agency, departmental, and congressional notification; and 
clarification on the provisions for agency and/or departmental 
interference in IG investigations.
    Further, Congress needs to better fulfill its constitutional 
responsibility of oversight. One way this could be improved is through 
the creation of a Subcommittee within the Committee on the Judiciary 
that would be directly responsible for FBI oversight and would 
complement the reporting structure already in place.
    There has also been a proposal for an, ``FBI Review Commission'', 
which would undertake a comprehensive review of the FBI in its entirety 
and make recommendations for congressional action. I had an opportunity 
to see a draft outline of this Commission's mandate and I was very 
impressed. But I have to express some reservations about the idea for 
the following reasons.
    First, as I mentioned earlier, the time for reform is now. We 
already know what is wrong with the Bureau. If we wait eighteen months 
for a commission to make recommendations, we may very well lose the 
momentum for reform that we have right now. In this age of 24-hour news 
cycles, the public will soon lose their appetite for FBI reform, 
Congress will move on to other issues, and the FBI will continue to 
operate as before. We cannot afford to wait to make these important 
changes. Secondly, if past results are any guarantee of future 
performance, the history of FBI commissions don't inspire much 
confidence in their ability to effect change. As a matter of fact, the 
end result has usually been that the FBI ends up with a bigger budget, 
more jurisdiction, and the Director walks out with a nice pat on the 
back. However, in order to take advantage of some of the good ideas 
presented within this proposal, perhaps it would make sense to allow 
the new Inspector General entity to follow through on this study, and 
conduct a comprehensive review of the FBI as part of their initial 
directive.
    Next, I would like to address the issue of FBI jurisdiction. As 
many of you may remember, the Webster Commission on the Advancement of 
Federal Law Enforcement, convened in part due to Waco and Ruby Ridge, 
actually recommended the expansion of the FBI--that the DEA and the ATF 
should be folded into the Bureau. Here today, sitting in the wake of 
the Hanssen and McVeigh fiascos, I think even Judge Webster would have 
to admit the folly of that notion. It could not be any clearer that the 
FBI has become too big and too unwieldy to be effectively managed. The 
answer to the problems within the FBI will not be found in increasing 
their jurisdiction; nor will the concerns of the American people be 
assuaged by creating a de facto national police force. The expansionist 
philosophy of the FBI only serves to feed their culture of arrogance. 
To be sure, even though the FBI is already overburdened with 
jurisdiction, it is fiercely protective of its current turf, while 
continuing to move like the Pac Man into new areas. Yet, it has been 
proven time and again that the FBI cannot maintain effective 
partnerships with our public and private sectors. It doesn't need more 
jurisdiction, it needs less. Let the Bureau continue to operate in its 
core areas such as counter-intelligence, counter-terrorism, and 
organized crime. But, I believe the FBI will become a more efficient 
and accountable organization through narrowing its investigative focus 
and sharing its disparate jurisdictional responsibilities with other 
law enforcement agencies.
    Finally, I want to address the matter of leadership. With an 
opening for Director of the FBI comes an opportunity. President Bush 
will be naming a new Director, and that person needs to make changes. 
I've sent a letter to the President, asking him to pick a new Director 
who understands the problems with the FBI management culture and is 
committed to restoring public confidence. This person needs to change 
the kind of culture that places publicity and image before basics and 
fundamentals. This person needs to change the kind of culture that 
holds press conferences in high-profile cases before the investigation 
is complete and all the facts in. We've seen the consequence of this 
approach in celebrated cases such as with Richard Jewell, Wen Ho Lee, 
and the TWA 800 investigation. The American people deserve an FBI that 
doesn't make these kinds of mistakes. But more importantly, the 
American people deserve an agency that is honest and forthright about 
their errors. So, finally, our new Director needs to change the kind of 
culture that suppresses dissent and discourages independent oversight. 
Director Freeh once stated the following with regard to the FBI; ``We 
are potentially the most dangerous agency in the country if we are not 
scrutinized carefully.'' I couldn't agree more. So, let us now get down 
to the business of helping the FBI, and its next Director, regain the 
trust and confidence of the American people.

    Chairman Leahy. I thank the Senator from Iowa, and would 
note that he has been very consistent in looking at these 
issues over the years and has been very constructive in his 
criticism.
    The Senator from Wisconsin, Senator Feingold.

STATEMENT OF HON. RUSSELL D. FEINGOLD, A U.S. SENATOR FROM THE 
                       STATE OF WISCONSIN

    Senator Feingold. Thank you, Mr. Chairman, for calling this 
hearing. I would ask that my full statement be placed in the 
record.
    Chairman Leahy. Without objection.
    Senator Feingold. The issue of Federal Bureau of 
Investigation oversight is timely because of obviously some 
specific recent cases, but it would be significant and welcome 
at any time as an opportunity to examine the role of the FBI in 
the relationship of the U.S. Government to the American people.
    Let me join in the praise that others have indicated for so 
much of what the FBI does. I recently ran into a number of FBI 
people at the Milwaukee airport and could tell that it was a 
tough time for them, and expressed my positive feelings about 
many things that it does.
    But the most immediate reasons for this hearing are a 
series of setbacks for the FBI in recent years. Some of the 
others have been listed, but I just have to mention again the 
missing McVeigh documents, the Hanssen case, the Wen Ho Lee 
case, the years-late production of the tapes in the Birmingham 
bombing, the problems in the FBI Lab, Richard Jewell and the 
Olympic bombing, and charges of racial bias in promotions at 
the FBI are some that come to mind.
    Director Freeh is understandably not here due to important 
personal concerns. I wish he were here because he is best 
equipped to illuminate our examination of FBI oversight. I hope 
that his eventual successor is here or at least listening to 
this hearing because his successor will be in the best position 
to help us further determine what changes in FBI oversight are 
needed and to lead the FBI in embracing these changes.
    For today, the immediate objective is to understand the 
state of oversight of the FBI and to determine what changes may 
be necessary in the oversight process. In particular, I would 
like to hear from the witnesses on a few matters.
    What is the current range of oversight mechanisms to which 
the FBI is subject and the status of the various inquiries now 
underway? How did it come to pass that the FBI and DEA are not 
as immediately subject to the scrutiny of the Department of 
Justice Inspector General, as are other agencies and offices at 
the Justice Department? What is the rationale for that 
arrangement and is it justified?
    Is it fair to assume that any of the recent troubles at the 
FBI may have been caused by deficiencies in oversight of the 
Bureau? Is there anything unique to the history, culture and 
mission of the FBI that makes it less accommodating of vigorous 
oversight? Finally, how can the Senate be most constructive in 
carrying out its oversight responsibilities with respect to the 
FBI?
    I welcome the witnesses and look forward to their 
testimony.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Feingold follows:]

Statement Of Hon. Russell D. Feingold, a U.S. Senator from the State of 
                               Wisconsin

    Mr. Chairman. Thank you for calling this hearing today. The issue 
of Federal Bureau of Investigation oversight is timely because of some 
specific recent cases, but it would be significant and welcome at any 
time as an opportunity to examine the role of the FBI in the 
relationship of the United States government to the American people.
    The most immediate reasons for this hearing are a series of 
setbacks for the FBI in recent years--we have heard the list: the 
missing McVeigh documents, the Hanssen case, Los Alamos and the Wen Ho 
Lee case, the years-late production of the tapes in the Birmingham 
bombing, problems in the FBI lab, Richard Jewell and the Olympic 
bombing, charges of racial bias in promotions at the FBI.
    It's a familiar, if troubling, list, but also familiar are the 
storied successes throughout the history of the FBI, from the days of 
Prohibition era gangsters and bank robbers to the pursuit of the agents 
of our adversaries in the Cold War, to the great drug busts of recent 
decades and the continuing effort to contain organized crime and the 
threat of international terrorism. And there can be no question that 
the FBI remains an outstanding and effective law enforcement agency. 
Maybe the greatest triumph of the FBI has been the terrorist attacks 
that never happened. While the FBI over the years has had its lapses in 
respecting the civil liberties of some Americans, perhaps the greatest 
achievement of the Bureau has been that it has done so well in solving 
crime and foiling conspiracies while operating in a nation that so 
respects individual liberty.
    So there is something that at first seems incongruous about the 
recent problems we have heard, and the FBI we grew up admiring. But 
perhaps the admiration, even awe, that many have felt toward the FBI is 
related to the inadequacy that may exist in FBI oversight. Perhaps it 
accounts for the uniquely limited oversight regime to which the FBI is 
subject. Perhaps it accounts for the reality that the FBI apparently is 
seen by most of the public and perhaps some in the Bureau itself, as 
having an identity virtually separate from the Department of Justice of 
which it is a part, and remote from the authority of the Attorney 
General, to which the FBI Director and all FBI personnel ultimately 
report. Perhaps it is reflected in the occasional hesitance of Congress 
and even Presidents to question the actions of the FBI and its leaders.
    Director Freeh understandably is not here today, due to important 
personal concerns. I wish he were here, because he is best equipped to 
illuminate our examination of FBI oversight. I hope that his eventual 
successor is here, or least listening to this hearing, because his 
successor will be in the best position to help us further determine 
what changes in FBI oversight are needed, and to lead the FBI in 
embracing those changes.
    But for today, the immediate objective is to understand the state 
of oversight of the FBI and to determine what changes may be necessary 
in the oversight process. In particular, I want to hear from the 
witnesses about a few questions:

         what is the current range of oversight mechanisms to 
        which the FBI is subject and the status of the various 
        inquiries now under way;
         how did it come to pass that the FBI and DEA are not 
        as immediately subject to the scrutiny of the Department of 
        Justice Inspector General as are other agencies and offices at 
        the Justice Department. What is the rationale for that 
        arrangement? Is it justified?
         is it fair to assume that any of the recent troubles 
        at the FBI may have been caused by deficiencies in oversight of 
        the Bureau?
         is there anything unique to the history, culture and 
        mission of the FBI that make it less accommodating of vigorous 
        oversight?
         how can the Senate be most constructive in carrying 
        out its oversight responsibilities with respect to the FBI?

    I welcome our witnesses and look forward to their testimony. I may 
have further questions for them individually. Thank you Mr. Chairman.

    Chairman Leahy. Thank you.
    The Senator from New York.

 STATEMENT OF HON. CHARLES E. SCHUMER, A U.S. SENATOR FROM THE 
                       STATE OF NEW YORK

    Senator Schumer. Thank you, Mr. Chairman. I want to thank 
you for your quick and immediate leadership in holding this 
important hearing.
    I want to begin by emphasizing that I consider myself a 
longtime supporter of the FBI. It is the No. 1 law enforcement 
agency in the world. We have to make sure it stays that way. I 
have also been a supporter of my fellow New Yorker, Director 
Freeh. He has done an excellent job in many areas, particularly 
in pursuing terrorist cases and instilling integrity at all 
levels of the Bureau. But, Mr. Chairman, sometimes you owe it 
to a friend to look him in the eye and tell him the hard truth, 
and that truth is this: the FBI has made mistake after mistake 
after mistake. And many of us are wondering now if those are 
random mistakes or there is not something deeper.
    From Richard Jewell to Wen Ho Lee, from the Crime Lab to 
the McVeigh documents, from rogue informants to Robert Hanssen, 
serious questions are now dogging the FBI. Just this morning, 
there are reports that an FBI security expert sold classified 
lists of witnesses and informants to the mob and other targets 
of criminal investigation in my State of New York.
    There have been several examinations of some of the 
incidents I have mentioned over the last few years, and each 
has shed light on a particular episode and spawned particular 
suggestions, but none have looked at the whole picture. It is 
high time to step back and take a comprehensive look at the 
Bureau from top to bottom.
    Has the FBI's culture become too insular and unresponsive 
to warning signs? Has the phenomenal growth of recent years 
made it even harder to bring about change? Whatever it is, the 
public is watching and they are beginning not to like what they 
see. Poll after poll shows confidence in the FBI plummeting, 
and that is dangerous for an agency that needs the cooperation 
of average citizens, that needs to recruit informants, that 
needs to persuade judges and juries in court, an agency we all 
need to be in tip-top shape.
    So, Mr. Chairman, in order to give the FBI the thorough and 
systematic review that it badly needs, Senator Hatch and I are 
introducing the FBI Reform Commission Act today. The bill will 
set up a blue-ribbon commission of law enforcement experts to 
look at all aspects of the FBI. It will determine whether all 
the FBI really needs at this point is a tune-up or, as many 
fear, a more fundamental overhaul.
    This kind of deep and thorough oversight is very much 
needed. We don't want to look at each individual case, except 
to see whether they form a pattern of why things went wrong. 
Congress can do very good oversight into specific issues, but 
this kind of thorough, top-to-bottom review can only be done by 
a group of experts who devote their full time to it.
    You know, Mr. Chairman, when one reaches a certain age, 
your physician will tell you, instead of the annual checkup, it 
is time to look at you inside out, top to bottom, and see what 
might be wrong. It is now that time for the FBI.
    So, specifically, the blue-ribbon commission will function 
outside the FBI and will analyze the way the FBI monitors 
itself, whether outside oversight is needed, how it manages 
information and conducts investigations, and other issues. The 
commission will then recommend to the President and the 
Congress systematic reforms that are necessary. They will be 
appointees of the President and of the Majority and Minority 
Leaders of both Houses.
    As longtime friends and supporters of the FBI, Senator 
Hatch and I believe this is the best way for the Bureau to puts 
problems behind it and begin rebuilding the public trust. Every 
bureaucracy needs an in-depth, critical examination every few 
decades, and that moment has arrived for the FBI. In the end, 
finding and fixing the problems at the FBI won't just leave the 
Bureau better off, it will leave all of us better off, and we 
have to begin that process now.
    Chairman Leahy. I thank the Senator from New York. When he 
mentioned those of a certain age, I leaned over to Senator 
Hatch and I said I am not sure which one of us he is referring 
to, but I know it couldn't be Senator Hatch because he looks 
much younger.
    The Senator from Illinois.

 STATEMENT OF HON. RICHARD J. DURBIN, A U.S. SENATOR FROM THE 
                       STATE OF ILLINOIS

    Senator Durbin. Thank you very much, Mr. Chairman, and 
thanks for scheduling this hearing. It is timely, and I am glad 
we have a chance to consider the serious issue before us. 
Though not altogether pleasant, it is an important assignment.
    People have referred to the public opinion polls, and they 
are pretty clear that an organization that enjoyed universal 
respect has now come under fire and Americans have many 
questions about the leadership at the FBI. That shouldn't take 
away from the thousands of special agents and other staff 
people who literally get up every day, put on a badge and put 
their lives on the line for America, fighting terrorism and 
combatting drugs and organized crime, and the long agenda of 
responsibilities we have given to the Federal Bureau of 
Investigation.
    Yet, despite the Bureau's many accomplishments, we continue 
to see a litany of embarrassing blunders. They have been 
recounted over and over in these introductions--the loss of 
4,000 pages of critical material for the McVeigh trial, the 
situation involving Wen Ho Lee, the whole question involving 
Richard Jewell at the 1996 Atlanta Olympic Park bombing, the 
information that has come out from Boston involving FBI agents 
withholding informant reports that would have aided the defense 
of Joseph Salvati, who spent 33 years in prison for the 1965 
murder of Edward Deagan, and then on February 20 of this year 
the chilling disclosure that one of its own, Agent Robert 
Hanssen, had operated undetected within the agency as a Soviet 
mole for 15 years, or even longer.
    Are these merely coincidences? Some have noted they are 
only a handful of instances in an agency which deals with 
thousands of challenges every single day. I think that I would 
like to speak to the fact that we collectively hope that it is 
not just a matter of time before another incident of ineptness 
percolates to the surface, calling into serious doubt the 
agency's adherence to values that Director Freeh recounted when 
he was before this Committee a few years back.
    The cover story of a recent U.S. News and World Report asks 
squarely ``What Is Wrong with the FBI: Cracking the Case.'' It 
is time we get that question answered and we get our Nation's 
No. 1 investigative force's house back in order.
    What is so troubling is that the issues that we are 
addressing today didn't just materialize. Take a look at two 
headlines from Time magazine: ``The weight of the evidence: the 
case against McVeigh is strong, but the mess at the FBI and the 
babble of witnesses make it vulnerable''; and the second one: 
``The FBI: the gang that couldn't examine straight.''
    The importance of these two headlines is the fact that they 
appeared in Time magazine on April 28, 1997, 4 years before the 
disclosures which were of such great embarrassment to the FBI 
and so startling to the American people. Those headlines 4 
years ago really could have been headlines leading to today's 
hearing.
    We have known for a long time that there are things that 
need to be changed in the FBI. I think we all understand the 
legacy of J. Edgar Hoover. It was a legacy which exulted 
independence from political oversight. In fact, Mr. Hoover's 
tactics have been well documented when it came to dealing with 
Congress. He held Congress at bay because of the information 
that he had collected, but in holding the political officials 
at bay, he also held at bay political accountability, and that 
is why we are here today.
    This morning, Senator Arlen Specter and I introduced 
legislation to create a separate inspector general for the FBI. 
I notice that one of the witnesses here has characterized it a 
little differently than the way we wrote it. This inspector 
general would be under the supervision of the Attorney General, 
like the Inspector General for the rest of the Department of 
Justice.
    What we have found in our investigation is that the Hoover 
legacy and the current leaders at the FBI have created a 
fortress mentality that has really held away the type of 
oversight that we demand of every Federal agency. I don't 
believe that we can assault that fortress without putting 
someone behind the gates. That is an inspector general working 
full-time, as we have an inspector general in 57 other Federal 
agencies. If the model doesn't work here, how is it working in 
other agencies? I think it is an important question we need to 
ask and answer.
    I applaud the idea of a commission to look in depth at many 
different things that might be considered, but it is an ad hoc 
approach which will give us guidance. What we need is a person 
on the ground, in the agency, accountable to the Attorney 
General as well as to Congress, reporting on ways to make this 
agency more effective.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you very much.
    I don't see any other Senators here. I will put a statement 
by Senator Kohl in the record.
    [The prepared statement of Senator Kohl follows:]

   Statement of Hon. Herbert Kohl, a U.S. Senator from the State of 
                               Wisconsin

    A little less than six years ago, the Director of the Federal 
Bureau of Investigation appeared before the Judiciary Committee to 
address concerns about the F.B.I.'s actions during Ruby Ridge. I was 
the ranking Democrat on that important investigation. During the course 
of that inquiry, we found widespread problems within the F.B.I. and 
made a number of suggestions for reform ranging from the way the F.B.I. 
trains its snipers to the way it handles documents.
    In light of the recent problems with the McVeigh prosecution, one 
section of the report has immediate relevance:

        ``The Subcommittee is concerned that, even today, officials of 
        the FBI may not be fully cognizant of their constitutional duty 
        and statutory obligations with regard to criminal discovery. . 
        . .We expect the FBI to improve the education of its agents in 
        this regard.
        ``The Subcommittee asks the FBI to institute programs to 
        improve the quality of its response to criminal discovery 
        demands, including attention to the organization, coordination 
        and monitoring of discovery requests and responses.''
    We should be very concerned that the F.B.I. has not succeeded in 
addressing all of the concerns raised in the report almost six years 
ago. The problems were serious then, and the mishandling of documents 
in the McVeigh case demonstrates a continuing and perplexing lack of 
organization. What else is going on at the F.B.I.? How many other 
concerns have been given short shrift?
    Of course, this hearing concerns much more than the F.B.I.'s 
ability to comply with their criminal discovery responsibilities. None 
of those issues, however, is more important to public confidence in the 
F.B.I. than the agency's capacity to observe the most basic rules of 
criminal procedure. This problem potentially infects every federal 
criminal case.
    As we learned during the Ruby Ridge hearings, overseeing and 
investigating the F.B.I. is not easy. But when done well, it can be 
productive and effective. The first principle of F.B.I. oversight must 
be that our goal is to improve and respect this vital agency--not to 
attack or destroy it. F.B.I. agents are dedicated and hardworking 
individuals who have a lot to be proud of. I look forward to what can 
be done to instill public confidence in the Bureau.

    Chairman Leahy. We will leave the record open for 
statements by any other members of the Committee who couldn't 
be here.
    Gentlemen, I thank you for being patient. This is matter of 
some concern; I think the fact that, again, we have heard from 
people on both sides of the aisle who want to look into this.
    We are fortunate to have Senator John Danforth here. He is 
currently a senior partner at the St. Louis law firm of Bryan 
Cave. Senator Danforth was asked by former Attorney General 
Reno to lead an investigation into the events at the Branch 
Davidian compound in Waco. Last July, he issued an interim 
report on that.
    On a personal note, I would say that I had the pleasure of 
serving with Senator Danforth for 18 years here in the Senate. 
We joined hands on a number of issues, traveled together, did a 
number of things together, and he is one of the most respected 
people we have had in the Senate in either party.
    Glenn Fine is the current Inspector General of the 
Department of Justice. He was appointed to that office in 
December of last year. He has been with the IG's office since 
1995. Attorney General Ashcroft has commissioned Inspector 
General Fine to conduct investigations on the reasons behind 
the FBI's belated document production in the Oklahoma City 
bombing case and whether the FBI knew or should have known 
about alleged spy Robert Hanssen's espionage activities. I have 
discussed both of those issues with the Attorney General. I 
know of his concern and I know of his respect for Mr. Fine, 
which we join in.
    Our next witness would then be Judge William Webster. Judge 
Webster is currently a senior partner with the Washington law 
firm of Millbank Tweed. Judge Webster has a distinguished 
record of public service. He was a member of the Eighth Circuit 
Court of Appeals. He was director of both the FBI and the CIA, 
I think the only person who has held both of those positions. 
Most recently, in the wake of the apprehension of Robert 
Hanssen, Attorney General Ashcroft and FBI Director Freeh asked 
Judge Webster to chair a blue-ribbon commission to examine the 
Bureau's internal security procedures.
    Judge Webster is well known to all here in the Senate and 
has high regard and respect from all members of the Senate.
    Michael Bromwich is currently a litigation partner in the 
Washington and New York law offices of Fried Frank. Mr. 
Bromwich was Inspector General of the Department of Justice 
from 1994 to 1999. During his tenure, he conducted numerous 
investigations on topics ranging from the FBI Crime Lab issues 
that we have talked about earlier today, to the Aldrich Ames 
affair, to the handling of classified documents in the campaign 
finance investigation.
    Our final witness is Mr. Norman Rabkin, who is the Managing 
Director of the General Accounting Office's Office of Special 
Investigations. He has on several occasions conducted 
investigations into FBI activities.
    Senator Danforth, would you lead off, please.

  STATEMENT OF JOHN C. DANFORTH, FORMER U.S. SENATOR FROM THE 
                       STATE OF MISSOURI

    Mr. Danforth. Mr. Chairman, thank you very much.
    Mr. Chairman, I was special counsel in the Waco 
investigation, and to me one of the lessons of the Waco 
investigation is the importance of candor and openness in the 
FBI, in Government in general, and the ability to admit 
mistakes, when people make mistakes or know of mistakes, and to 
come forward and be able to talk about them and correct those 
mistakes.
    The situation before I became special counsel was this: in 
the summer of 1999 Time magazine had a poll and the poll said 
that 61 percent of the American people believed that the FBI 
started the fire at Waco. Now, when 61 percent of the American 
people believe such a dire thing as that Federal agents started 
a fire that killed some 80 people, that is a real breakdown in 
public confidence in their Government. That is why I believed 
that the Waco investigation was so important.
    We looked into some very dark charges that had been made 
against the FBI, that the FBI started the fire, that FBI agents 
fired guns into the complex when the building was on fire to 
pin people into it. In our investigation, which lasted 14 
months and cost $17 million, we proved with absolute certainty 
that these dark thoughts about the FBI were definitely not 
true. There was no real evidence to support these charges, and 
there was overwhelming evidence to prove the negative that they 
didn't happen.
    So the question is how could it be that 61 percent of the 
people of our country believed that the FBI did these things? 
What happened was this: right after the tragedy at Waco, that 
same afternoon the FBI in its statement said that no 
pyrotechnic tear gas devices were used at Waco that day. 
Subsequently, that same statement was repeated a number of 
times. It was repeated in testimony before the House by both 
Attorney General Reno and then-FBI Director Sessions.
    Sitting in the room behind both General Reno and Director 
Sessions was the commander of the Hostage Rescue Team, and this 
person was the person who gave the instructions to fire 
pyrotechnics that morning and he did not correct the witnesses.
    Now, in fact, the use of pyrotechnics that morning had 
nothing to do with the start of the fire, absolutely nothing. 
The pyrotechnics were fired 4 hours before the fire broke out 
and they were aimed at a concrete structure 75 feet away from 
the complex. So it had no effect at all, but a misstatement was 
made and nobody corrected it, including the person who gave the 
command to use the pyrotechnics.
    And it was not known until more than 6 years after the 
tragedy that pyrotechnics had been used. Then, after it became 
known, of course, the public reaction, or a lot of the public 
said, well, we have been fooled, we have been lied to; 
something happened and we didn't know about it. They suspected 
the worst. That was the story of Waco, and that is what 
triggered the breakdown in public confidence and that is what 
led to this very extensive investigation that we conducted.
    I believe that there was a lack of candor on the part of 
the FBI and on the part of the Justice Department over a period 
of 6 years. I don't think it was a cover-up of a bad act. I 
think it was basically trying to cover embarrassment. Somebody 
made a mistake in a statement, and mistakes aren't permitted 
and let's not admit to mistakes, so let's not say anything to 
set the record straight. I believe that really is the lesson of 
Waco.
    I have in my written testimony, and I could provide for the 
Committee more examples of during the course of the 
investigation where the FBI was less than forthcoming in 
providing information to my investigators. That is true, but I 
think it is also a sign of the more general problem, and that 
is that there is a lack of openness and a lack of willingness 
to say, well, we are a Bureau that makes mistakes and therefore 
we don't want anybody to look at us.
    This is not a uniform position within the Bureau. Director 
Freeh was very forthcoming in helping us, and a number of 
agents were. The Hostage Rescue Team that participated in the 
events of April 1993 were very open in describing exactly what 
happened. I think it is important to recognize that we can't 
tar everybody with a brush here. But there certainly were 
people within the FBI who were less than forthcoming, and it 
complicated our investigation and it was part of a general 
problem.
    Now, Mr. Chairman, my red light is on and I promise you I 
won't speak for more than a minute, but I do want to say this 
as we are looking at the FBI. If I am correct that the problem 
is a lack of willingness to correct mistakes and be open about 
mistakes, it is very important that we as a country do not 
create a mind set where mistakes are just intolerable and where 
they are so unforgivable that the natural reaction is I am not 
going to let you know about them.
    I think that is what happened in the Waco case. I think it 
happened right after the disaster and I think it happened 
during our investigation, where people did not want to come 
absolutely clean and where they wanted to hide the ball because 
they were afraid of being humiliated. I really believe it is 
important that we make a clear distinction between mistakes 
which all of us are going to make and we encourage people to 
come clean, and the real expose material which is the subject 
matter of a lot of hearings and a lot of investigative 
reporting.
    The FBI did not do anything that was dark at Waco, but some 
of its people were afraid to come forward with the truth for 
fear of embarrassment, and that is what created the breakdown 
in public confidence.
    [The prepared statement of Mr. Danforth follows:]

 Statement of John C. Danforth, former U.S. Senator from the State of 
                                Missouri

    After 14 months of exhaustive investigation, costing the taxpayers 
$17 million, I am absolutely convinced that the FBI had nothing to hide 
about Waco. The FBI did not do the dark things some people suspected. 
Agents did not cause the fire that killed scores of Branch Davidians. 
Agents did not fire guns into the complex. The evidence exonerating the 
FBI is overwhelming on these points. Evidence implicating the FBI is 
non-existent.
    Yet, some FBI personnel and some Justice Department lawyers were 
not forthcoming in reporting the events at Waco, and some FBI personnel 
were not cooperative with my investigation.
    Lack of openness and candor caused and then complicated my 
investigation. And, far more important, lack of openness and candor 
undermined public confidence in government.
    On August 26, 1999, a Time magazine poll indicated that 61 percent 
of the public believed that federal law enforcement officials started 
the fire at Waco. That is what I mean by undermined public confidence 
in government. Absolutely no evidence supported this terrible belief. 
Its principal cause was lack of openness and candor by some people in 
the Justice Department and some people in the FBI.
    Beginning on the day of the fire, the FBI and the Justice 
Department insisted that no pyrotechnic tear gas rounds had been fired 
at Waco. This was an innocent but mistaken assertion. An FBI agent had 
fired three pyrotechnic rounds at a target 75 feet away from the Branch 
Davidian complex, four hours before the fire started. The firing of 
pyrotechnic tear gas rounds had no bearing on the tragedy that 
followed.
    Some FBI and Justice Department officials who knew of the 
pyrotechnic rounds were not forthcoming in setting the record straight. 
Had they come forward with the truth, there would have been no cause 
for believing there was any implication with the fire. Instead, when 
the public learned that pyrotechnics had been used and not disclosed, 
61 percent assumed the worst.
    My thoughts about why people who knew the truth didn't tell the 
truth are speculative, but I would bet a lot that I'm correct. I think 
that the motive is not to hide evil deeds, but to avoid embarrassment. 
A long standing value of the FBI is not to embarrass the FBI. Mistakes 
are embarrassing, so, rather than admit them, cover them up.
    Late in April, 1993, the Hostage Rescue Team commander who had 
authorized the use of pyrotechnics sat silently through the 
Congressional testimony of Attorney General Reno and FBI Director 
Sessions without correcting their mistaken statements suggesting that 
pyrotechnics had not been used. To have corrected the FBI's previous 
denial about pyrotechnics might have embarrassed the Bureau.
    In 1996, an FBI attorney neglected to transmit information about 
the use of pyrotechnics to a Justice Department attorney. I think that 
her negligence was an embarrassment to her, perhaps something that 
would jeopardize her career. So she began lying about her negligence to 
my investigators.
    The irony is that attempts to cover up embarrassment cause 
embarrassment to the Bureau, and destroy public confidence as well.
    It is important to keep things in perspective. Every instance of 
failure to produce records isn't a cover-up or an intentional effort to 
avoid embarrassment. In the Waco investigation, we examined 2.3 million 
pages of documents. In major cases such as Ruby Ridge, Waco and 
Oklahoma City, hundreds of FBI agents are involved, and all of them are 
generating paper. I am sure that systems for managing information can 
be improved, but I am sure that there will always be a drawer somewhere 
or a box somewhere with something in it. So I would caution against a 
standard of perfection.
    However, it was clear in the Waco investigation that at least some 
people in the FBI were cavalier or resistant in turning over evidence 
to outsiders.
    Until September, 1999, the FBI denied the existence of Forward 
Looking Infrared (FLIR) tapes containing audio evidence of the approval 
of pyrotechnics. The government did not turn them over during the 
criminal trial of surviving Branch Davidians, nor in response to a 
Congressional request in 1995, nor in response to specific FOIA 
requests from 1995 to 1997. Then, in late August, 1999, the FBI located 
at HRT headquarters a previously undisclosed FLIR tape. On September 1, 
1999, two more tapes mysteriously appeared in an FBI file cabinet. To 
say the least, the FBI was cavalier in not producing this evidence.
    Days after the tragic fire, FBI agents attempted to disable by 
gunshot a pyrotechnic projectile found at the scene. Obviously this was 
evidence that pyrotechnics had been used. One of the supervising agents 
on the scene took notes of this event; however, instead of keeping his 
note pad describing this event in his office with his other notes, he 
kept it in the attic of his home. A second supervising agent repeatedly 
and implausibly told our investigators that he had no recollection 
relating to pyrotechnic tear gas at Waco.
    It's important to recognize that FBI agents who actually 
participated in the tear gas insertion were completely forthcoming in 
describing what happened, including the use of pyrotechnics. Also, 
Attorney General Reno, Deputy Attorney General Holder and Director 
Freeh clearly called for cooperation with my investigation. Similarly, 
notwithstanding our problems with the General Counsel's office of the 
FBI, I believe that the General Counsel himself, Larry Parkinson, was 
trying to be helpful. But, while many were willing to help, others kept 
information from us.
    The FBI's Office of General Counsel was not as cooperative as its 
head. Convinced that certain individuals were withholding information 
from our investigators, we threatened to obtain a search warrant, and 
sent 11 agents and three lawyers to the Office of General Counsel to 
search its files.
    I believe that, within the FBI, there are strong pressures to 
resist divulging information to outsiders.
    Soon after I was appointed Special Counsel, my office realized that 
we would need a liaison with the FBI who would be the contact person 
for our investigation. Deputy Special Counsel Ed Dowd asked FBI 
Supervisor Special Agent John Roberts if he would be interested in this 
role, having been told by Postal Inspectors that Roberts had done an 
excellent job with the Ruby Ridge investigation. According to Dowd, 
Roberts didn't want to act as liaison, claiming that working with our 
office would hurt his career in the FBI.
    Supervisor Special Agent Patrick Kiernan, a lawyer who teaches 
ethics at the FBI Academy, became our liaison, and did an excellent 
job. Kiernan has told me that he believes that people within the FBI 
have retaliated against him for assisting my investigation, and that he 
has filed the appropriate referrals with the FBI's Office of 
Professional Responsibility.
    Whether or not the concerns of Roberts and Kiernan about their 
careers are well founded, the fact that they have those fears indicates 
to me that there is a culture within the FBI of noncooperation with 
inquiries from outside the Bureau and of protecting those within the 
Bureau from criticism.
    People have suggested several ways to improve the FBI including the 
creation of an Office of Inspector General or a Blue Ribbon Commission. 
These may be good ideas. But my own belief is that the only way to 
correct a cultural problem is to change the culture.
    This means that there must be a persistent message that the role of 
the FBI is to protect the country and the Constitution, not to protect 
the FBI from criticism, and that lack of candor and openness hurts the 
FBI and destroys public confidence as well.
    It is a message that must come from the top: from the President, 
from the Attorney General and from the Director of the FBI. It must be 
heard on the first day a new agent arrives at the FBI Academy, and it 
must be repeated every day until retirement.
    And because it is human nature for today's enthusiasms to become 
tomorrow's forgotten resolutions, it is important that Congress put in 
place a permanent system for overseeing the FBI.
    And if there is an ``old boys network'' of FBI officials who create 
and enforce a closed culture within the Bureau, it is important to 
replace these people. Otherwise, any reform would be sure to founder on 
everyday resistance from within. I would not humiliate them. I'm sure 
they believe that what they are doing is for the best. But I would 
replace them. I would give them farewell parties and effusive thanks, 
and I would send them on their way.
    Finally, it is important for all of us--Congress, the media, the 
public--to acknowledge our own responsibilities for the lack of 
openness we lament in government. When public officials fear that the 
disclosure of their mistakes would lead to personal humiliation and 
professional ruin, it is understandable if they prefer concealment to 
candor. By confusing the discovery of human error with the 
sensationalism of exposes, we help create a mentality in government 
where the first law is self-preservation.
    If we really believe that making mistakes is not as bad as hiding 
mistakes, then it is our responsibility to keep that in mind and 
express it in words.

    Chairman Leahy. Thank you very much, Senator.
    Mr. Fine.

 STATEMENT OF GLENN A. FINE, INSPECTOR GENERAL, DEPARTMENT OF 
                   JUSTICE, WASHINGTON, D.C.

    Mr. Fine. Mr. Chairman, Senator Hatch, and Members of the 
Committee on the Judiciary, I appreciate the opportunity to 
appear before the Committee this afternoon to discuss the work 
of the Department of Justice's Office of the Inspector General, 
and in particular our oversight work in the FBI.
    Let me begin by providing a brief overview of the structure 
and staffing of the OIG. The OIG was established by the 
Inspector General Act Amendments of 1988, a decade after 
inspector generals were created for many other Federal 
executive branch agencies. The OIG is an independent within the 
Department that, by statute, reports both to the Attorney 
General and to Congress.
    The OIG has a staff of approximately 360 investigators, 
auditors, inspectors, program analysts, attorneys and support 
staff. The OIG investigates criminal and administrative 
misconduct by Department employees, and conducts independent 
audits and evaluations of Department programs and financial 
statements.
    The OIG's jurisdiction to investigate misconduct in the 
Department is limited, however. When Congress created an 
Inspector General in the Department, it permitted the 
Department's Office of Professional Responsibility, known as 
DOJ OPR, as well as the FBI's Office of Professional 
Responsibility and the DEA's Office of Professional 
Responsibility, to continue to exist outside of the OIG.
    In 1994, an Attorney General order set out the respective 
authority of each office to investigate misconduct in the 
Department. In general, under this order, DOJ OPR has the 
authority to investigate misconduct of DOJ attorneys acting in 
their capacity to litigate, investigate, or provide legal 
advice. FBI OPR and DEA OPR have the authority to investigate 
allegations of misconduct by employees of their agencies. The 
OIG has the authority to investigate other allegations of 
misconduct throughout the Department and its components.
    The OIG may only undertake investigations in the FBI and 
the DEA when the Attorney General or Deputy Attorney General 
specifically authorizes us to do so in a particular case. 
During the past several years, the OIG has received such 
authority to conduct a number of investigations in the FBI. My 
written statement provides a more detailed overview of these 
investigations, which includes the FBI's performance in 
uncovering the espionage activities of former CIA Officer 
Aldrich Ames and a review of allegations of improper and 
inadequate practices in the FBI Laboratory.
    The Attorney General has recently assigned to the OIG two 
sensitive investigations relating to the FBI. The first 
concerns the alleged espionage activities of FBI employee 
Robert Hanssen. Shortly after the FBI Director announced 
Hanssen's arrest, the Senate Select Committee on Intelligence 
and the Attorney General asked the OIG to examine the 
Department's performance in the Hanssen case.
    We have assembled a 10-person team of attorneys, special 
agents, analysts and support staff, several of whom worked on 
the OIG Ames review. Our review of the Hanssen matter will 
build on our already substantial base of knowledge about the 
FBI's performance in uncovering espionage during the period of 
Ames' spying, a period that overlapped in part with when 
Hanssen allegedly was supplying classified information to the 
Soviets.
    In the Ames review, we produced a lengthy report describing 
deficiencies in the FBI's performance in determining the cause 
of the unprecedented and catastrophic losses suffered by both 
the CIA and the FBI in their Soviet intelligence programs. Our 
intention in the Hanssen investigation is to provide a 
similarly detailed report that thoroughly examines the FBI's 
performance in preventing, detecting and investigating 
Hanssen's alleged espionage.
    The second matter we are currently investigating is the 
FBI's belated production of documents in the Oklahoma City 
bombing cases. On May 11, the Attorney General asked the OIG to 
investigate the circumstances surrounding this belated 
production of documents. We immediately assembled an 
investigative team of OIG employees, consisting of 5 attorneys, 
2 special agents, 2 auditors, a paralegal and support 
personnel. The team is led by an experienced former Federal 
prosecutor who is the head of the OIG unit that conducts 
special investigations. As of this date, the team has requested 
and reviewed numerous FBI documents, and conducted more than 70 
interviews of personnel from FBI headquarters, Main Justice, 
Oklahoma City, and 6 FBI field offices.
    I do not believe it appropriate to discuss the evidence 
that OIG team is finding at this stage of the investigation. 
However, I can describe the scope of our review.
    The OIG's investigation focuses on why the documents were 
produced late, the reasons for the delay, whether the FBI acted 
in a timely fashion upon learning that the documents had not 
been produced, and any systemic problems that this matter 
reveals about the FBI's handling of discoverable documents.
    We have done a considerable amount of work in this 
investigation. However, we intend to conduct many more 
interviews. Although we do not intend to interview FBI 
personnel at all 56 FBI field offices, we intend to fully 
investigate a sample of FBI offices and survey others to 
determine what happened with the documents in those offices. We 
plan to issue a detailed report of our investigation as 
expeditiously as possible.
    Finally, I want to note one important issue that the OIG 
has been struggling with over the past several years. The 
resources provided to the OIG have not kept pace with either 
our increasing responsibilities or the Department's explosive 
growth. In fact, due to budget constraints, the OIG's workforce 
has been cut by 100 employees within the past 2 years.
    Resource limitations aside, however, the OIG has a proven 
track record of conducting high-quality, independent oversight 
of Department programs and operations. Moreover, on the limited 
number of occasions when we have received the authority, the 
OIG has produced comprehensive reports that have identified 
serious systemic weaknesses in FBI programs and provided 
constructive recommendations for improvement.
    That concludes my oral statement, Mr. Chairman, and I would 
be pleased to answer any questions.
    Chairman Leahy. Thank you, and your full statement, of 
course, will be made part of the record.
    Judge Webster.

 STATEMENT OF WILLIAM WEBSTER, SENIOR PARTNER, MILBANK, TWEED, 
            HADLEY AND MCCOY, LLP, WASHINGTON, D.C.

    Judge Webster. Thank you, Mr. Chairman. I am pleased to 
have an opportunity to be here this morning. I am not sure in 
which incarnation you wish me to speak.
    I would like to clarify one thing that may be confusing. 
Senator Grassley referred to the Webster Commission. That was a 
commission established by this Congress to conduct a 2-year 
study on the advancement of Federal law enforcement. We made 
certain recommendations at that time. I agree with Senator 
Grassley that the issue of consolidation is probably not a good 
one to advance at this level of uncertainty, but I want to say 
only in respect to that that we did so because there are now 
148 Federal agencies with law enforcement responsibilities.
    We have gone in the Federalization of crime from half a 
dozen at the founding of our country to over 3,000 Federal 
crimes, including unlawful conduct at a rodeo. There are very 
important Federal crimes, but there are also a lot of----
    Chairman Leahy. Not a big issue in Vermont, I want to say.
    Judge Webster. I am sure it isn't, Mr. Chairman.
    The FBI is now handling an inventory of 800,000 cases. It 
calls for the kind of look that we conducted and, of course, 
the kind of look that you are going to conduct.
    I would like to take just a minute out of my time to 
reminisce briefly about the circumstances when I came to office 
23 years ago. We were in the wake of the so-called ``black 
bag'' jobs, the Church Committee report, and other reviews of 
Federal law enforcement and intelligence community activities.
    I was given 68 agents to consider disciplining as a result 
of those activities, discovering in the process that in the 
wake of the Supreme Court decision in 1972, not one single 
thing was done by the Bureau or the Department of Justice to 
educate the special agents as to the change in law in regard to 
the need for warrants in domestic security cases.
    There was a lot of concern. When I was sworn in, President 
Carter took pains to say that he knew of no other organization 
that had as much impact upon public confidence in Government 
than the FBI, that when the FBI did well, people felt good 
about their Government. I think what was unwritten and unsaid 
at that point in time was that when it didn't feel good about 
the FBI, it didn't feel as good about its Government. It is 
important, I think, for management to understand that.
    There were days of so-called plausible deniability, a new 
term I learned when I came to Washington. I said you have to 
understand there is no such thing in this agency as plausible 
deniability. Only the President of the United States may claim 
plausible deniability in international affairs, and you hurt 
the director when you do not tell him that you have a problem 
so that he can assist in dealing with it. I believe that to be 
true today.
    I also remember that we will go through cycles in which two 
separate cries will seek dominance. One is leave us alone, 
don't interfere with our privacy, don't intrude. The other one 
is why don't you do something about all this crime and the 
threat of terrorism and other things. And it is the job of the 
Bureau to balance that, and I believe over time its record has 
been very good in that respect.
    I might also say two other things that I used to say more 
times than people liked to hear that each of us carries the 
reputation of the other around in his pocket. It was something 
that people needed to be reminded of when they thought about 
doing things such as Senator Danforth described. It does not 
help the agency when people do not remember the proud record 
that it has and the importance of preserving it, and the 
reputations of the very gallant men and women who stand in our 
place every day of our lives.
    Finally, one other thing and then I will proceed to what I 
think my role is today, and that is I think that the FBI has 
enjoyed a very objective disciplinary system and has never 
hesitated to discipline when disciplinary reasons were 
apparent.
    On the investigative side, the facts are developed. The 
investigator, just as the FBI does in relation to the United 
States Attorney's office, does not prosecute. He turns the 
matter over to the Office of Professional Responsibility, which 
then makes recommendations based upon an effort to be a 
consistent pattern of discipline.
    So I think you will find, regardless of what direction you 
go in respect to future oversight, that the FBI has not shrunk 
from dealing with issues of discipline; in fact, wish to have 
it.
    I see I have pushed the light too far for my own good.
    Chairman Leahy. Take whatever time you need.
    Judge Webster. Thank you. I would like to tell you a little 
bit about I have been asked to do by the Attorney General and 
Director Freeh, and that is to look into the internal security 
procedures of the Federal Bureau of Investigation in the wake 
of the Robert Hanssen case.
    I might say that Inspector General Fine and I have met on 
two occasions to make sure that we were cooperating and not 
working against each other and would appropriately share 
information that would be helpful to you and to their own 
responsibilities.
    I define our mission in this shorthand way. We are not 
investigating the Hanssen case. We will learn, we will be 
informed by what we get from the inspector general and from 
other sources. But our mission, I think, is to reduce the time 
between defection and detection. It is that simple.
    No one should be allowed to function as a traitor in the 
Federal Bureau of Investigation, much less anywhere else, for 
15 years. The problem everyone understands is that we can't 
preclude someone turning sour in the midst of his career, but 
we can make every effort to be sure that we recognize that 
change of attitude and purpose, and do so in the best possible 
way without destroying the morale and the trust and the bond 
that exists within the FBI. The FBI has accepted, for example, 
in drug testing intrusions on privacy interests for the greater 
good, the example to be set, and so on. We are looking at that 
and we are looking to see how it would be done.
    Well, what have we done and where are we? I have 
established a very excellent staff to tackle and break down the 
assignments, and I would like to just list those to you, but 
also not only mindful of the fact that a former director of the 
FBI has been asked to head this commission--incidentally, 
Director Freeh asked me to take this on even before he made the 
arrest of Robert Hanssen, subject to the approval of the 
Attorney General which came immediately afterwards.
    I have asked as an oversight commission--I don't want to 
engage them in all the work that is involved, but to look at 
what we are doing, to look at what I am doing and to tell me 
where we ought to be doing things differently, or more or less, 
and to assess our judgments.
    I have asked, and they have agreed to serve, former 
Secretary of Defense and Minority head of the Senate 
Intelligence Committee, William Cohen; former Secretary of the 
Army Clifford Alexander; former Speaker of the House Thomas 
Foley; former Trade Representative and a very distinguished 
public official, Carla Hills; Robert Fisk, former special 
prosecutor in New York; and former Attorney General Griffin 
Bell. I hope that they will insist on the level of credibility 
that will convince you that whatever we are able to come up 
with is worth listening to.
    Now, we have divided our task into four basic areas. 
Personnel security. We have a task force working on key issues, 
including the use of the polygraph, the adequacy of background 
investigations and how seriously they are taken, and means of 
indicia of defection.
    We have a task force on document security which will 
address and is addressing the collection, control, 
dissemination and destruction of classified information, 
particularly SCI and FISA information, and the adequacy of 
``need to know'' assessments. I might add that we were 
immediately given a package of all of the known rules and 
regulations in this area by the FBI upon my appointment.
    Third, organizational security. We are undertaking a 
comparison of security policies and practices in various other 
agencies, the FBI and the other intelligence community 
activities, to see what can be learned elsewhere, and the 
security, training and education areas.
    And, fourth, we have a task force on information systems 
security, and that was specifically mentioned by the Attorney 
General. We are looking at the adequacy of security protections 
for classified computer and telecommunications systems. We are 
looking at the adequacy of the audit trail capabilities, the 
implementation of automated trip wires, the detection methods, 
ways that we can have electronic librarians that will recognize 
when someone who doesn't belong in a particularly highly 
classified area is walking around.
    I have a staff now of approximately nine attorneys, headed 
by Michael Shaheen, a distinguished former head of the Office 
of Professional Responsibility at the Department of Justice. 
Most of our staff members are assigned and seconded to us from 
other agencies of Government.
    I have also asked Russell Bremer, and he has been working 
with me. He was a former general counsel at the CIA. He worked 
with me at the FBI on the 68 agent cases, and I have asked him 
to assume major responsibility on the polygraph issues and the 
use of polygraph as a vetting process, which prior to the 
Robert Hanssen case did not exist, except on an entry-level 
basis.
    I could list all of them. They are absolutely outstanding, 
and we have some 17 investigators, experts and consultants from 
other agencies of the Government and the military.
    We have made a good deal of progress. We have conducted 
many interviews. We have been meeting with the other agencies 
and with officials in the FBI, including Neil Gallagher, who 
heads the National Security Division. We have been 
coordinating, as I said, with Inspector General Fine. We have 
coordinated with the Hanssen prosecution team in order not to 
step on their work and thereby create issues of privilege, and 
so forth.
    We have briefed the Attorney General and the Deputy 
Attorney General, and we have tried to work out and are working 
out the problems that come from having the application of FACA, 
the Federal Advisory Committee Act, and its implications for us 
so that we can have our closed meetings and deal with highly 
classified information.
    Chairman Leahy. I think as you said, Judge Webster, nobody 
is shocked to find that the Russians or any other group, 
including some friendly to us, may try to get somebody to 
defect or to spy for them or provide material. What has been 
shocking to this Committee--and a number of members of this 
Committee also serve on the Intelligence Committee--what is 
shocking is why it took so long to detect them. We will be very 
anxious to see what you come up with on that.
    We will, of course, continue to ask questions here and try 
not to bump into what you are doing. I am not trying to witch-
hunt in the Bureau, but I am just trying to make sure that we 
don't have another situation like this. If somebody is leaving, 
as the press has reported, warning signals all over the place 
and doesn't get caught, I worry what we are doing about 
catching somebody who shows a little bit more finesse.
    Judge Webster. Well, we have one here. We have what I call 
a 500-year flood, and we will learn from that.
    Chairman Leahy. I hope so.
    Judge Webster. I think it would be naive to assume that we 
will never have another defection.
    Chairman Leahy. Of course, we will have more, but we can 
have better----
    Judge Webster. We can be prepared.
    Chairman Leahy. Yes. Thank you.
    Mr. Bromwich.

  STATEMENT OF MICHAEL R. BROMWICH, FORMER INSPECTOR GENERAL, 
            DEPARTMENT OF JUSTICE, WASHINGTON, D.C.

    Mr. Bromwich. Thank you, Mr. Chairman, Senator Hatch, 
members of the Committee. I am currently partner in the 
Washington, D.C., and New York offices of the law firm of 
Fried, Frank, Harris, Shriver and Jacobson. Before joining the 
firm in 1999, I had spent 13 of the previous 17 years in public 
service, first as a Federal prosecutor in both New York and 
Washington, and for the last 5 years, from 1994 to 1999, as the 
Inspector General for the Department of Justice.
    While I was Inspector General, the office conducted a 
number of significant reviews of the FBI, including in-depth 
investigations of the FBI Laboratory, the FBI's role in the 
Aldrich Ames affair, and the FBI's problems in handling 
classified information during the campaign finance 
investigation. I welcome the opportunity to be here today to 
testify about the important and very timely subject of 
oversight of the FBI.
    My prepared testimony reviews in some detail the history of 
the past decade relating to FBI oversight and some of the 
challenges and frustrations we at the OIG faced during my 
tenure. I am submitting that statement for the record. In this 
brief statement, I will focus on the theme of this hearing, 
which is restoring confidence in the FBI.
    These last several months, as has been noted by many of the 
members, have been extremely difficult ones for the FBI and for 
those who care about public confidence in it. In the past 
month, we have heard about an FBI that is allegedly out of 
control, fails to respect the rights of criminal suspects and 
defendants, and is characterized by a cowboy culture more 
concerned with newspaper headlines than justice. Recent polls 
have demonstrated that, and the damage to the Bureau's 
reputation.
    I think that the ``out of control'' rhetoric and 
suggestions about its culture are overstated, and in any event 
are not very helpful in understanding the dimensions of the 
problems or in arriving at solutions. For the most part, the 
men and women of the FBI have chosen careers of public service 
and committed themselves to the noble calling of Federal law 
enforcement. They do their jobs and they do them well, but the 
problems cannot be ignored or dismissed.
    I share with this Committee the view that one of the 
principal means for restoring confidence in the FBI is to 
ensure that it is subject to adequate oversight. I believe the 
principal tool for upgrading the amount and quality of 
oversight over the FBI is to strengthen the Justice 
Department's Office of the Inspector General.
    At present, its ability to perform comprehensive and 
aggressive oversight is limited by jurisdictional limitations 
and resource shortfalls. The Justice Department may not, at his 
own initiative, conduct investigations of misconduct among 
personnel at the FBI without the permission of the Attorney 
General or the Deputy Attorney General.
    I am aware of no similar limitation that exists for any 
other IG. This means that the FBI, arguably the most powerful 
agency in the Federal Government, is currently subject to less 
oversight than any other agency. A bill in the House to change 
that system in 1997, following the OIG's FBI Lab and Ames 
reports, died, and Attorney General Reno would not change the 
situation herself.
    Although my prepared testimony explains the genesis of the 
limitation on the OIG's jurisdiction in historical and 
institutional terms, it makes no sense any longer, assuming it 
ever did. Lifting the existing jurisdictional limitations will 
not cause the Justice's OIG to insert itself into sensitive 
intelligence and law enforcement activities.
    The concerns about interfering with the ability of the FBI 
to carry out its critical law enforcement and 
counterintelligence responsibilities are overblown. The IG Act 
already gives the Attorney General the authority to block any 
IG investigation or audit if he or she determines that the 
activity will interfere with an important function or activity. 
To my knowledge, that provision has been used only once, when 
Attorney General Reno and I had an honest disagreement about 
the relative importance of the OIG's crack cocaine report, on 
the one hand, and an ongoing narcotics investigation on the 
other.
    So the mechanism exists currently to block the OIG from 
taking specific actions, but there is accountability built into 
the system because Congress must be notified of the Attorney 
General's action. It does not happen under a cloak of secrecy.
    The more important issue is ensuring that the Justice OIG 
has the resources necessary to do its job. Authority without 
the resources is a ticket to frustration and failure. The OIG 
never possessed the resources necessary to meet its 
responsibilities during my tenure, and its current condition is 
far worse, after the substantial cutbacks over the past 3 
years. Congress obviously has the power and should seize the 
opportunity to remedy this serious deficiency. It is time for 
Congress to restore the strength of an agency that has been 
weakened in an arbitrary and irrational way.
    Addressing the problem of insufficient oversight over the 
FBI, two distinguished members of the Senate and this 
Committee, Senators Specter and Durbin, have proposed creating 
a separate IG for the FBI. The strength of such a proposal is 
that it recognizes the problem and suggests an institutional 
mechanism, presumably backed with sufficient funding. But I 
believe that it reaches, respectfully, the wrong conclusion.
    One problem is that it reinforces the separateness of the 
FBI. Among the problems we have seen in recent years, in my 
judgment, is an FBI that at times has been only nominally part 
of the Justice Department. While such a strategy may have been 
useful to the Bureau in some respects, it is fundamentally 
inconsistent with the appropriate role of the FBI and counter 
to its long-term interests. The creation of a separate IG for 
the FBI underscores its separateness and thus, in my judgment, 
moves in the wrong direction.
    Second, I doubt the creation of an FBI IG would address the 
crisis in public confidence that currently affects the FBI. 
Seven or 8 years ago, it was sometimes very difficult to 
persuade people that the Justice Department IG was sufficiently 
independent to perform aggressive oversight over all aspects of 
the Department, including the FBI.
    Over time, it earned legitimacy and credibility because of 
specific examples of oversight, including the investigations of 
the FBI mentioned earlier in my testimony. That same legitimacy 
would be much harder for an FBI IG to claim because it would 
have to start from scratch and it would reside within the FBI.
    Third, the creation of a separate IG for the FBI risks 
further confusing the already confused institutional 
configuration relating to FBI oversight. There also would be 
the practical and logistical difficulties of creating a brand 
new institution. Where would the personnel come from, from 
within the FBI? If so, how can Congress and the public be 
assured of its independence? If from the outside, it will takes 
months, if not years, for skilled and experienced personnel 
equal to the task to be hired. We cannot wait that long.
    And what would happen when, as is frequently the case, the 
specified piece of oversight requires the examination of not 
simply FBI personnel, but also the actions of prosecutors or 
other Justice Department personnel with whom the FBI personnel 
work? Presumably, a joint effort of the FBI IG and the Justice 
Department IG would be required. This adds coordination 
problems on top of investigations that are already 
substantively complex and difficult.
    In short, I agree with the impulse behind the proposal to 
create a separate IG for the FBI; that is, to enhance the level 
of oversight over the FBI. But I believe the fuller and more 
prompt realization of those objectives can be achieved through 
full funding of the Justice Department's OIG and through 
eliminating the current restrictions on that office's ability 
to perform oversight.
    Chairman Leahy. What you are saying, in effect, is if there 
is going to be a Justice Department IG, the IG should be for 
everybody in the Justice Department.
    Mr. Bromwich. That is exactly right, Mr. Chairman.
    Chairman Leahy. And everybody in the Justice Department 
should be treated the same, and that includes the FBI.
    Mr. Bromwich. That is exactly right.
    Chairman Leahy. Thank you.
    Mr. Bromwich. Just finishing up, in the process of doing 
the FBI Lab investigation, we learned that the FBI had long 
resisted opening itself to the entity responsible for 
accrediting crime labs throughout North America. In discussing 
this with the forensic scientists who were members of our 
investigative team, I learned unfortunately that this was part 
for the course.
    They told me that in the exchanges between personnel from 
the FBI Lab and from other labs, the FBI was there to impart 
knowledge and wisdom rather than to receive it, and the FBI did 
not act as though it had anything to learn from others. That 
attitude--some describe it as institutional arrogance--has 
deprived the FBI, of lessons to be gained from mutual exchanges 
with other law enforcement agencies and other large and complex 
organizations.
    The backwardness of the FBI's computer systems and 
recordkeeping practices are at least in part the product of 
resisting the advances in technology that swept through the 
rest of the organizational world some time ago. Although mutual 
exchanges with other institutions may not generally be regarded 
as a form of oversight, the FBI can benefit immeasurably from 
opening itself to outstanding influences of various kinds. This 
would reflect a humility and a willingness to learn from others 
that the Bureau has too often seemed to lack. Opening itself up 
will help the Bureau to overcome its debilitating insularity 
and embrace the outside world in a constructive manner.
    Mr. Chairman, that concludes my prepared testimony. I would 
be happy to answer any questions.
    [The prepared statement of Mr. Bromwich follows:]

Statement of Michael R. Bromwich, Former Inspector General, Department 
                      of Justice, Washington, D.C.

    Mr. Chairman, Senator Hatch, members of the Committee:
    I am currently a partner in the Washington D. C. and New York 
offices of the law firm of Fried, Frank, Harris, Shriver & Jacobson. 
Before joining the firm in September 1999, I spent 13 of the previous 
17 years in public service, first as a federal prosecutor in New York 
and Washington, and for the last five years, from 1994 to 1999, as the 
Inspector General (IG) of the Department of Justice. During the time I 
served as Inspector General, the Office of the Inspector General (OIG) 
conducted a number of significant reviews of the FBI, including in-
depth investigations of the FBI Laboratory, the FBI's role in the 
Aldrich Ames affair, and the FBI's problems in handling classified 
information in the campaign finance investigation. I am pleased to be 
here to testify about the important and timely subject of oversight 
over the FBI.
    I think it might be most useful for me to address some of the 
recent historical issues relating to FBI oversight. First, I will 
describe the state of oversight over the FBI and the institutional 
configuration relating to such oversight when I arrived at the 
Department at the end of 1993. Second, I will describe the experiences 
- the challenges and frustrations - I experienced during my five-year 
tenure as IG as they relate to FBI oversight. Third, I will describe 
what I view as the central oversight issues that need to be considered 
by this Committee, including the recent proposal to create a new and 
separate inspector general within the FBI. I should add that my review 
of the events described in this statement is based on my best 
recollection rather than on any comprehensive review of the relevant 
documents.
                             I. Background
    The Inspector General Act of 1978 (IG Act) established inspectors 
general in cabinet level agencies and many independent agencies, 
accelerating a movement to create independent audit, program 
evaluation, and investigative agencies in the executive branch and 
continuing a trend that had begun in the early 1970s. A number of 
agencies, including the Treasury and Justice Departments, were not 
included in the 1978 law. Although there were multiple reasons for the 
omission of the Justice Department from the scope of the original 
Inspector General Act, the principal arguments were that the Justice 
Department already had an internal affairs-type entity the Office of 
Professional Responsibility (OPR), which had been established by 
Attorney General Levi in the mid-1970s--and that there were separation 
of powers-related concerns about putting an independent inspector 
general, with reporting responsibilities to the Congress, in the 
department headed by the Attorney General (AG), the nation's chief law 
enforcement officer. For these reasons and others, the Justice 
Department OIG was not created until 1988, when Congress passed the 
Inspector General Act Amendments of 1988.
    The Justice OIG was set up through the consolidation and 
amalgamation of elements of the Justice Department, including units and 
personnel drawn from the DEA, the Marshals Service, the Immigration and 
Naturalization Service (INS), the Bureau of Prisons, and the Justice 
Management Division. The Justice Department OIG opened its doors in the 
spring of 1989 with an acting inspector general. The Senate confirmed 
the first Justice Department inspector general in the latter part of 
1990.
    The legislation that created the OIG provided it with audit and 
program review authority that was virtually unlimited, including over 
the FBI. In practice, as I learned when I arrived, the FBI made life 
both difficult and unpleasant for OIG personnel engaged in work 
involving the FBI. Because doing work in the FBI was so timeconsuming 
and frustrating, because there was a general lack of cooperation from 
FBI personnel, and because OIG personnel were more knowledgeable about 
other components of the Department than about the FBI, the OIG did 
fewer audits and less program evaluation work in the FBI than I would 
have liked. OIG professionals turned their attention to parts of the 
Justice Department where they could do their jobs more effectively and 
have something to show for it.
    As to investigations, the scope of the OIG's investigative 
authority over FBI personnel and DEA personnel was controversial and 
confusing almost from the outset. In addition to the OIG and OPR, there 
were the two other internal affairs arms in the FBI and DEA-FBI-OPR and 
DEA-OPR--whose existence was left undisturbed by the statute and by the 
creation of the OIG. The statute suggested a particular division of 
responsibilities, although the combination of the statute and the 
legislative history made clear that the Attorney General retained 
substantial discretion in allocating matters within this institutional 
hodgepodge. Because the statute made the scope of the OIG's 
investigative jurisdiction uncertain, there was need for some form of 
clarification. In 1992, the Deputy Attorney General issued an order to 
clarify matters. The order, known as the Terwilliger Order, generally 
gave the jurisdiction over attorneys and law enforcement personnel to 
the Justice Department's OPR, even though it lacked the manpower to do 
a credible job in that regard. This did nothing to solve the problem, 
but it served to diminish the stature of the OIG within the Justice 
Department.
    One factor in this early history that helps explain the failure to 
provide any investigative oversight over the FBI was the general 
hostility of the Department, including the FBI, towards the creation of 
the OIG and the seeming desire to marginalize it. This was reflected in 
what I found when I arrived at the Department in late 1993--that the 
OIG had not been fully accepted by the rest of the Department in the 
first four years of its existence. This was not attributable to any 
deficiencies on the part of the OIG but, instead, was the result of 
what appeared to be an attempt to marginalize it. Nor was the notion 
taken seriously that the OIG could conduct investigations into 
significant matters involving complex law enforcement and national 
security issues.
    When the possibility of my becoming the Justice Department's 
Inspector General was initially raised with me, the then-Deputy 
Attorney General stressed his concern about the ability of the 
Department to conduct major, credible internal investigations into 
matters of substantial significance. The initial investigations into 
Ruby Ridge and Waco had been completed, and both he and the Attorney 
General appeared to be dissatisfied with the ad hoc methods and 
mechanisms used to conduct these inquiries. One of my mandates was to 
create a credible investigative vehicle within the OIG.
    When the Deputy Attorney and Attorney General originally recruited 
me to become the Inspector General, in mid-1993, it was on the 
understanding that the OIG and OPR were to be merged. However, before 
Attorney General Reno could make a decision on the merger that had been 
proposed by the Deputy, members of this Committee made clear that it 
would not move ahead with my confirmation if the merger went forward. 
In that context, Attorney General Reno declined to approve the merger. 
I was confirmed as IG in June 1994.
                    II. FBI Oversight from 1994-1999
    One of the first issues that needed to be addressed, once I became 
IG, was to clarify the respective jurisdictions of the various internal 
affairs offices. The process, which took several months, culminated in 
the Attorney General's jurisdictional order, signed by Attorney General 
Reno, in November 1994. The main issue to be resolved was determining 
which cases would be worked by the Justice Department's OPR and which 
by the OIG. Providing the OIG with meaningful investigative oversight 
over the FBI and DEA did not figure as a matter of serious debate; it 
was clear that the FBI and DEA opposed it and that the Department's 
leadership was not willing to impose it. Sorting out the jurisdictional 
boundaries between the OIG and the Justice Department's OPR was a more 
pressing and practical issue.
    Attorney General Reno's jurisdictional order established that the 
Justice Department's OPR was responsible for investigating allegations 
against lawyers prosecutors and others--acting in their capacity as 
lawyers. This established OPR's core function as its sole function--
investigating allegations against lawyers, such as grand jury abuse, 
abuse of the discovery process, other alleged unethical conduct in the 
course of litigation and in trials, and similar types of matters. The 
FBI and DEA internal OPRs were accorded primary responsibility for 
investigating allegations of misconduct against personnel in their 
respective agencies. The OIG was responsible for investigating 
everything else, which was a substantial expansion of its previous 
investigative jurisdiction. The jurisdictional order provided that the 
OIG could conduct an investigation of FBI or DEA personnel only with 
the consent of the Attorney General or the Deputy Attorney General.
    In the absence of such consent, the OIG had no authority to conduct 
investigations as opposed to audits or program reviews--in the FBI or 
DEA. This imposed a limitation on the jurisdiction of the OIG that, to 
the best of my knowledge, did not exist with respect to any other 
inspector general in the federal government. This privileged and 
protected status reflected the FBI's clout within the Justice 
Department--DEA always appeared to be a free rider in these 
discussions, benefiting from the special protection the FBI sought for 
itself--and served to limit the scope of the OIG's oversight over the 
FBI.\1\ It became clear tome that, in order to expand the OIG's 
oversight jurisdiction over the FBI, we would have to first demonstrate 
our ability to do investigations of complex law enforcement and 
intelligence matters.
---------------------------------------------------------------------------
    \1\ The jurisdictional order required the FBI-OPR and DEA-OPR to 
provide information on its misconduct investigations to the OIG on a 
regular basis to enable the OIG to make informed decisions on whether 
to request authority to investigate specific matters. No such reporting 
took place until this Committee conducted hearings into the Ruby Ridge 
matter and inquired about the compliance of the FBI and DEA with the 
reporting provisions of the jurisdictional order. Almost immediately, 
the Deputy Attorney General ordered the FBI and DEA to comply with the 
terms of the order and information began to be supplied. Although the 
quality of the information originally provided left much to be desired, 
the FBI and DEA worked over time to supply the necessary information in 
a usable and understandable format.
---------------------------------------------------------------------------
                                a. ames
    In November 1994, the House Permanent Select Committee on 
Intelligence (HPSCI) filed a report of its inquiry into the Aldrich 
Ames affair. One of its recommendations was that the OIG conduct an 
inquiry into the FBI's role in the affair analogous to the review 
previously conducted by the CIA OIG. As we sought to assemble a team to 
conduct the investigation, we learned that the FBI was trying to 
convince the chairman of HPSCI and the top staff members to permit the 
FBI to review its own conduct, foreclosing the OIG's review. The FBI 
told staffers that I was uninterested in conducting the review, and was 
unable to do so, and was close to reaching an agreement with the 
Committee that would have permitted the FBI to review its own conduct. 
The staffers appeared shocked when they learned that the FBI had wholly 
misrepresented my attitude towards conducting the review. Our belated 
discovery of the FBI's attempts to block the OIG's review and 
discussions with the HPSCI staff served to get the project back on 
track.
    Ultimately, we produced a detailed account of the FBI's efforts 
over a seven-year period to determine the source of the enormous 
intelligence losses caused by Ames. Once the FBI reconciled itself to 
the fact that the OIG would be doing the review, we generally got good 
cooperation from the FBI in providing personnel to assist with the 
project, in producing documents, and in making witnesses available. I 
have little doubt that we were able to bring a degree of independence 
and objectivity to the review that would have been beyond the capacity 
of any review conducted by the FBI itself. Although the head of the 
Bureau's National Security Division publicly dismissed the report upon 
its release as containing nothing new and nothing that the FBI had not 
already figured out on its own, we were subsequently told by 
Congressional staffers that the report's recommendations had been 
extremely useful in monitoring the Bureau's progress in addressing some 
of the deficiencies that had been noted. And, when the alleged 
activities of Robert Hanssen were reported earlier this year, the 
Bureau publicly stated that it had implemented the recommendations 
contained in that 1997 report.
                               b. fbi lab
    Probably the most well-known example of investigative oversight we 
conducted during my tenure as IG was our investigation of the FBI 
Laboratory. After conducting a preliminary inquiry into allegations of 
misconduct and shoddy and unscientific work in the FBI Laboratory, we 
expanded the review into a full-scale investigation in the fall of 
1995. At the time, FBI-OPR was handling some of the allegations made by 
a scientist within the FBI Lab, and the OIG was handling others. When 
some of the allegations became public, it became clear that the 
credibility of the investigative results turned on their being done by 
an entity outside the FBI. For this reason, I went to the Deputy 
Attorney General and sought, under the jurisdictional order, to assume 
responsibility for reviewing the allegations then being reviewed by 
FBI-OPR. The Deputy Attorney General asked that I meet with the FBI 
Director to see whether he objected to our assuming total 
responsibility. I did so in early August 1995, and Director Freeh 
raised no objection.
    After an eighteen-month long investigation, we issued a lengthy 
report in April 1997 supporting many of the allegations of poor 
scientific practices and substandard work being performed in the three 
sections of the Lab we examined closely. We rejected some of the most 
far-reaching allegations that had been made, including allegations of 
perjury, obstruction of justice, and suppression of exculpatory 
evidence. We made 40 recommendations, all of which were accepted by the 
FBI. In addition, during the course of our review, we strongly 
recommended that a world-class scientist be named to head the Lab 
rather than an agent, as had been the case previously, and as the 
Bureau was intending to do again. Following the intervention of the 
Attorney General, the Bureau conducted an extensive search and 
appointed a well-known and highly-respected scientist to head the Lab.
                   c. campaign finance investigation
    In September 1997, it was disclosed that the FBI Director and the 
Attorney General had not been properly briefed on classified 
information collected by the FBI that suggested involvement of the 
Chinese government in the 1996 presidential election. The AG and the 
FBI Director turned to the FBI initially to examine the problem; the 
OIG was not consulted. At the end of November 1997, the AG learned of 
additional problems of the same kind. At that point, she advised the 
FBI that she was asking us to investigate the matter; she did so over 
the Director's objections.
    In July 1999, the OIG issued a highly classified report and an 
unclassified executive summary containing its findings and 
recommendations. The findings and recommendations included both matters 
relating specifically to the structure and function of the campaign 
finance investigation and relating to more general systemic problems. 
In the category of systemic problems, the investigation found major 
defects with the manner in which the FBI's computer systems were used. 
Most of these were management and operational problems, rather than 
purely technical issues. For example, the investigation found that 
agents had too much discretion in entering investigative information, 
thus risking the failure to enter significant data into the system; 
that agents and other personnel using the computer systems were 
insufficiently trained in using the systems properly; and that, as a 
result, the ability to retrieve relevant information was significantly 
impaired. We have apparently seen some of the bitter fuits of these 
computer system management problems in the McVei documents matter, 
although we need to await the results of the current Inspector 
General's investigation to determine how much of the explanation is 
attributable to computer problems and how much to other factors.
                            d. other matters
    In addition to the matters summarized above, there were other FBI 
oversight matters that arose during my tenure that raised questions 
about the appropriate body to perform the oversight. In connection with 
allegations relating to the Ruby Ridge matter, the allegations against 
high-ranking executives at the FBI were sent to the Justice 
Department's OPR, rather than to the OIG. OPR began its review without 
the OIG's knowledge, even though the OIG was better equipped, in my 
judgment, to conduct the investigation because it has its own 
complement of law enforcement personnel and therefore does not need to 
rely entirely on assistance from the FBI, as has been the case with 
OPR. When the issue was raised with top Department management, they 
said it was too late to unscramble the egg. The same general sequence 
explained OPR's role in the Richard Jewell matter.
    Arguably, both of these matters were within the jurisdiction of 
FBI-OPR because the allegations were focused on FBI personnel. And, 
arguably, FBI-OPR was prudent in calling for assistance. The 
institutional problem was that Justice's OPR had long been considered 
by people in the Department and the FBI as having something other than 
an arm's length relationship with the FBI. In part, this has been 
because, on matters of major significance, including those matters 
involving investigations of FBI personnel, OPR has tended to rely 
heavily on FBI personnel to provide investigative support because it 
lacks its own staff of non-lawyer investigators. On matters of such 
great importance, in order to ensure public confidence in the oversight 
of the FBI, and the confidence of FBI personnel themselves in the 
independence and objectivity of the review, the oversight needs to be 
performed by an entity that is not closely identified with the FBI.
    Two other matters that arose during my tenure are worth noting, in 
which the jurisdictional restrictions on the OIG resulted in important 
oversight over the FBI being conducted by other entities. In the summer 
of 1997, allegations arose about FBI misconduct in the context of a 
major organized crime case in Boston. These allegations included the 
alleged willingness of FBI agents to permit organized crime figures, 
because of their status as FBI informants, to commit murder and other 
crimes of violence against other persons involved in organized crime 
activities. I approached the then-acting Deputy Attorney General about 
allowing the OIG to assume responsibility for the review. The request 
was denied.
    Second, in the spring of 1999, the Wen Ho Lee case had begun to 
collapse and there were calls from Congress and the media for a full 
internal investigation of the activities of both FBI personnel and 
Justice Department lawyers. At the time, the OIG was struggling with 
major budget problems. Even so, I went to the Deputy Attorney General 
and requested that the OIG conduct the review. For reasons that were 
not fully explained, the Deputy said that the OIG had not been 
considered for conducting the review. Ultimately, we were advised that, 
because of the budget problems the OIG was experiencing at the time, we 
were thought not to be capable of undertaking the review. That decision 
had been made without any consultation with us whatsoever. Although the 
Department asked a very capable and competent prosecutor to conduct the 
review, that is beside the point. As an institutional and oversight 
matter, it turned back the clock to the ad hoc world of 1992-93, where 
oversight solutions were developed on the fly with little regard for 
establishing continuity and stability in the oversight of the FBI.
                           e. resource issues
    Oversight requires resources--both the right people and sufficient 
funding. During my tenure, our attempts to change the mix of personnel 
to conduct more complex pieces of oversight over the FBI ran aground 
because of lack of funding.
    My experience has been that the type of oversight reflected in the 
FBI Lab, Ames, and campaign finance oversight investigation requires a 
mix of lawyers, investigators, and other personnel. When I arrived at 
the OIG, it was ill equipped to conduct such oversight. Of the 
approximately 400 people on board at the time, there were only a 
handful of lawyers, none of whom had any prosecutorial or investigative 
experience. In fact, the current Inspector General, Mr. Fine, was the 
first lawyer I hired specifically to do this kind of complex oversight 
work. My efforts over the years to build up this capability in any 
substantial way were only partly successful; even after the reports on 
the Ames and FBI Lab matters were completed in early 1997, I was unable 
to get the Attorney General and Deputy Attorney General to approve 
enhanced funding for this purpose. Their approach was to try to get us 
to enlist personnel detailed from other parts of the Department, most 
notably the U.S. Attorney's Offices and the Criminal Division, rather 
than augment the OIG's funding. Sometimes this solution worked well; 
sometimes it did not. In any event, I did not view it then--and I do 
not view it now--as a sustainable solution over the long term. The OIG 
needs to have its own personnel available to conduct oversight of 
complex matters. To date, because of budgetary issues, caused during my 
tenure by the failure of the Justice Department, OMB, and the Congress 
to provide adequate funding, this has not been the case. We were able 
to build up this capability to some extent, but not nearly to the 
extent that the workload required.
    This general long-term structural and funding problem took a more 
ominous turn starting in the second half of 1998. At that time, 
staffers on the Senate Appropriations Subcommittee suddenly, and 
without any warning, took strong exception to a funding mechanism that 
had been used continuously since 1992. They were able to do so without 
any evident concern for the impact their actions would have on the 
oversight capacities of the OIG, much less on the personnel within the 
organization. I was never able to determine the real motivation for the 
attacks on the OIG, but the bitter and unfortunate result was a 
substantial degradation in the ability of the OIG to conduct oversight 
over the FBI and the rest of the Department. For the better part of my 
last year as IG, the energies of top management in the OIG were heavily 
devoted to staving off draconian budget cuts, rather than focusing 
exclusively on the OIG's oversight function. At one time, the OIG was 
threatened with budget cuts that would have resulted in close to a 50% 
cut in personnel. Although the worst cuts were avoided, the damage to 
the OIG was severe. The OIG is still dealing with the debilitating 
effects of that episode.
    III. Restoring Confidence in the FBI through Stronger Oversight
    These last several months have been extremely difficult for the FBI 
and for those who care about public confidence in the FBI. This should 
include all of us. When it was disclosed just over a month ago that 
thousands of pages of documents generated in the Oklahoma City bombing 
investigation had not previously been provided to prosecutors and 
defense counsel, it was simply the most recent in a string of major 
embarrassments for the FBI. The failure to produce the documents in the 
McVeigh case, just days before his scheduled execution, was only the 
most recent setback for the Bureau, adding to a list that, since the 
beginning of this year alone, includes the following: disclosures of 
the 15-20-year-long espionage activities of Robert Hanssen; the failure 
to disclose tape recordings in the Birmingham church bombing case to 
the Alabama state attorney general; and the Boston man wrongfully 
imprisoned for 30 years because FBI agents were apparently more 
interested in protecting an informant than in freeing an innocent man.
    In the past month, we have heard about an FBI that is allegedly out 
of control, fails to respect the rights of criminal suspects and 
defendants, and is characterized by a ``cowboy culture'' more concerned 
with newspaper headlines than justice. Recent polls have demonstrated 
that the FBI's public reputation has been seriously damaged: for 
example, a Washington Post/ABC poll published shortly after the 
disclosure relating to the McVeigh documents showed that a bare 
majority of the American public--53% said it has a favorable impression 
of the FBI, down 30 points from six years ago. I think the ``out of 
control'' rhetoric and suggestions that the FBI is characterized by a 
``cowboy culture'' are overstated and in any event may not be very 
helpful in understanding the dimensions of the problems or in arriving 
at solutions. But the problems cannot be ignored or dismissed.
    If there is any unifying theme to these failures, it appears to be 
a failure of basic supervision, management, and oversight. For example, 
the McVeigh document debacle seems to have been a combined failure of 
computer systems and inadequate management attention, at the 
headquarters and field office level, to the fundamental task of 
collecting and retrieving investigative materials. The failure to 
detect and limit the alleged Hanssen spying spree appears to be a 
combination of inadequate internal controls on access to highly 
classified information and the failure adequately to screen and monitor 
FBI personnel. Definitive judgments on these matters, as well as the 
others, will have to await the investigations now in process, but, in 
the meantime, the FBI will have to push ahead and address its various 
management and organizational challenges.
                      a. choice of a new director
    With Director Freeh having announced his intention to resign as 
Director, and expected to leave office shortly, President Bush has the 
important task of choosing his successor. President Bush need not--and 
in my view probably should not--adhere to the recent model of selecting 
the new director from the federal judiciary. Indeed, the kind of 
managerial experience and expertise most needed at the FBI is unlikely 
to be found there. It is, of course, vital that the next FBI Director, 
like Judge Webster, be a person whose personal and professional ethics 
are beyond reproach. But that is not enough to ensure that the FBI 
Director will be able to address adequately the substantial management 
and organizational challenges he or she will face and the critical task 
of rebuilding the Bureau's morale, which is at a low ebb.
    It is, however, critical that the principle embodied in the 
selection of federal judges be followed: the selection must avoid even 
the suggestion of partisanship. The next director should be selected--
and the Senate should exercise its advise and consent function--based 
on whether the nominee has the right mix of law enforcement and 
managerial experience to handle the complex challenges of the FBI. The 
FBI does not need a super cop at its helm, nor can it easily absorb 
someone who has been selected for reasons other than his or her law 
enforcement and management credentials. And, the nominee needs to 
understand and accept the legitimacy of external oversight--both 
Congressional oversight and executive branch oversight.
                   b. proposal for a separate fbi ig
    There is general agreement that the FBI needs stronger oversight 
and that the current system of oversight, which places primary 
responsibility on FBI-OPR, as well as on the Inspections Division of 
the FBI, has not been adequate. Addressing this problem, two 
distinguished members of this Committee--Senators Specter and Durbin--
have proposed creating a separate IG for the FBI in order to create an 
institution specifically devoted to FBI oversight. The strength of such 
a proposal is that it recognizes the problem and suggests an 
institutional mechanism--presumably backed with the promise of 
sufficient funding. But I believe that it reaches the wrong 
institutional conclusion.
    Among the problems we have seen in recent years, in my judgment, is 
an FBI that at times has been only nominally part of the Justice 
Department. While such a strategy may well have won larger budgets for 
the FBI, it is fundamentally inconsistent with the appropriate role of 
the FBI, and counter to its long-term interests. The creation of a 
separate IG for the FBI that underscores its separateness moves in the 
wrong direction. For most of our history, concerns about the FBI's 
becoming a national police force have been countered by the assurance 
that it is under the control of the Justice Department and the Attorney 
General. A separate FBI IG who reports jointly to the FBI Director and 
the Congress, rather than to the Attorney General, would undermine the 
principle that the FBI is apart of the Justice Department.
    Second, I doubt the creation of an FBI IG would address the crisis 
in public confidence that currently affects the FBI. As difficult as it 
sometimes has been to persuade people that the Justice Department IG is 
sufficiently independent to perform aggressive oversight over all 
aspects of the Department, including the FBI, it has earned legitimacy 
and credibility over the twelve years of its existence with specific 
pieces of oversight, including the investigations of the FBI described 
earlier in my testimony. That same legitimacy would be much harder for 
an FBI IG to claim because it would reside within the FBI and the IG 
would report to the FBI Director as well as Congress, rather than to 
the Attorney General. Nor would having the FBI IG report to the 
Attorney General solve this problem.
    Third, the models for the proposal, I believe, are the CIA OIG and 
the OIG for Tax Administration, which, I believe, is the only other IG 
created within an agency where an IG already exists. Both cases are 
very different from the situation facing Congress in dealing with the 
FBI and, therefore, do not constitute a persuasive precedent for 
creating a separate IG for the FBI. The creation of a statutory IG at 
the CIA was designed to strengthen the oversight at that agency and 
give the IG recourse to Congress if CIA management failed to address 
significant issues. Before the creation of the IG, there was no other 
independent oversight mechanism, such as exists within the Justice 
Department's OIG, to perform such oversight. The non-statutory CIA IG 
was considered to be without significant clout and was not taken 
seriously within the Agency.
    In the case of the IG for Tax Administration, it was created in an 
environment in which the Treasury IG had exercised no meaningful 
oversight over the IRS and shown neither the interest nor the ability 
to do so. Indeed, to be blunt, the Treasury OIG at that time was a 
largely dysfunctional agency that had shown little or no ability to 
carry out its oversight functions over the law enforcement components 
of the Treasury--Customs, ATF, and the Secret Service--and whose IG was 
ultimately investigated by the Permanent Subcommittee on Investigations 
and left office under a cloud.
    In short, I do not believe that the experience of either the CIA IG 
or the Tax Administration IG supports the creation of a separate FBI 
IG. Moreover, the creation of yet another institutional entity 
responsible for FBI oversight risks heightening the institutional 
confusion that already exists over which agencies have what FBI 
oversight responsibilities. There also would be the practical and 
logistical difficulties of creating an institution from scratch. Where 
would the personnel come from? From within the FBI? If so, how can 
Congress and the public be assured of its independence? If from the 
outside, it will take months if not years for skilled and experienced 
personnel equal to the task to be hired. Although I agree with the 
impulse behind the proposal to create a separate IG for the FBI--to 
enhance the level of oversight over the FBI--I believe the fuller and 
more prompt realization of its objectives can be achieved through full 
funding of the Justice Department's OIG and through the elimination of 
the current restrictions on its ability to perform oversight over the 
FBI.
              c. strengthening the justice department oig
    As I mentioned earlier, the Justice Department Inspector General 
may not, at his own initiative, conduct investigations of misconduct 
among personnel at the FBI without the permission of the Attorney 
General or the Deputy General. I am aware of no similar limitation that 
exists for any other Inspector General. This means that the FBI--
arguably the most powerful agency in the federal government--is 
currently subject to less oversight than any other agency. A bill in 
the House to change that system in 1997 following the OIG's FBI 
Laboratory and Ames reports--died, and Attorney General Reno would not 
change the situation herself. Although I have explained the genesis of 
the limitation on the OIG's jurisdiction, it makes no sense any longer, 
assuming it ever did.
    There are no reasonable grounds for concern that lifting the 
existing jurisdictional limitation will cause the Justice OIG to insert 
itself into sensitive intelligence and law enforcement matters, thus 
interfering with the ability of the FBI to carry out its critical law 
enforcement and counterintelligence responsibilities. The IG Act 
already gives the Attorney General the authority to block an IG 
investigation or audit if he determines that the activity will 
interfere with an important function or activity. To my knowledge, that 
provision has been used only once--when Attorney General Reno and I had 
an honest disagreement about the relative importance of the OIG's CIA 
crack cocaine report weighed against an ongoing narcotics investigation 
that she felt would be impaired if the report had been publicly 
released immediately upon completion. Accordingly, the mechanism exists 
to block the OIG from taking specific actions that may be viewed as 
potentially harmful, but there is accountability built into the system: 
the Attorney General's action must be the subject of a notification to 
Congress.
    The more important issue is ensuring that the Justice OIG has the 
resources necessary to do its job. Authority without the resources is a 
ticket to frustration and failure. The OIG never possessed the 
resources necessary to meet its responsibilities during my tenure, and 
its current condition is far worse after the substantial cutbacks over 
the past three years, during which its staffing levels dropped more 
than 20% during a period in which the Department's growth continued to 
be vigorous. Congress obviously has the power--and should seize the 
opportunity--to remedy this serious deficiency. It is time for the 
Congress to restore the strength of an agency weakened in an arbitrary 
and irrational way.
                d. opening the fbi to outside influences
    In the process of doing the FBI Laboratory investigation, we 
learned that the FBI had long resisted opening itself to the entity 
responsible for accrediting crime laboratories throughout North 
America. In discussing this with the forensic scientists who were 
members of the investigative team, I learned that this was par for the 
course--that in the exchanges between personnel from the FBI Lab and 
from other labs, the FBI was there to impart knowledge and wisdom, 
rather than to receive it.
    That attitude--some describe it as institutional arrogance--has 
deprived the FBI of the benefits and lessons to be gained from mutual 
exchanges with other law enforcement agencies and other large and 
complex organizations. The backwardness of the FBI's computer system 
and record keeping practices, now so painfully highlighted in the 
McVeigh case, is at least in part the product of resisting the advances 
in technology that swept through the rest of the organizational world 
some time ago. Although mutual exchanges with other institutions may 
not generally be regarded as a form of oversight, the FBI can benefit 
immeasurably from opening itself to outside influences of various 
kinds. This will help the FBI to overcome its debilitating insularity 
and embrace the outside world in a constructive manner.
    That concludes my prepared testimony. I am happy to answer any 
questions you may have at this time.

    Chairman Leahy. Thank you very much.
    Mr. Rabkin.

     STATEMENT OF NORMAN J. RABKIN, MANAGING DIRECTOR, TAX 
 ADMINISTRATION AND JUSTICE ISSUES, GENERAL ACCOUNTING OFFICE, 
                        WASHINGTON, D.C.

    Mr. Rabkin. Mr. Chairman, Senator Hatch, members of the 
Committee, I am pleased to be here today to discuss the GAO 
access to the FBI's data, documents and personnel. I would like 
to briefly describe the nature of the work we do at the FBI, 
talk about our general authority for access at any Federal 
agency, and then relate some of our recent experiences with the 
FBI.
    As you probably know, GAO is the investigative arm of the 
Congress. This means that we respond to your requests for 
audits, evaluations and investigations of Federal activities. 
Our mission is to support the Congress in meeting its 
constitutional responsibilities and to help improve the 
performance and accountability of the Federal Government for 
the benefit of the American people. To effectively carry out 
that mission, we need the cooperation and support of the 
Federal agencies and other organizations that we review.
    We have issued about 50 products concerning the FBI over 
the past 5 years or so. About 10 of these products focus 
specifically on the FBI. The rest include the FBI as one of 
several agencies that we have reviewed.
    Congress has given us broad authority to access the FBI's 
data, documents and personnel in order to conduct our work. 
This is the same authority we rely on to perform our work at 
all Federal agencies. We also have specific authority to 
enforce our access.
    While things go smoothly on occasion, on many other 
occasions our access at the FBI has been difficult, resulting 
in us having to follow cumbersome procedures to meet with 
Bureau officials and to get basic information about their 
programs and activities.
    The types of recent access problems fall into several 
categories. The first is delay in receiving documents that we 
have requested and arranging meetings with FBI officials. For 
example, the Chairman of the Senate Governmental Affairs 
Committee recently asked us to review the FBI's foreign 
counterintelligence investigations. Specifically, we looked at 
the FBI's coordination of information it obtained with other 
components within the Justice Department, most notably the 
Criminal Division. Although this is a very sensitive subject, 
our work focused on policies and procedures and the FBI's 
adherence to them, not on the decisions regarding the 
investigations or the intelligence they produced.
    At the start of our work, we submitted a written list of 
questions to the FBI concerning intelligence coordination. It 
took almost 4 months for the FBI to respond to our request. 
During that time, our staff contacted FBI officials at least 15 
times to inquire about the status of their response.
    Setting up meetings with FBI officials can also be a 
lengthy process. While the FBI has told us that its goal is to 
organize these meetings within 2 weeks, the elapsed time from 
meeting request to actual meeting for 3 of the 4 meetings on a 
current job took from 35 to 124 days. In the worst case, when 
the meeting finally took place the FBI sent substitutes for the 
official who was originally expected to attend the meeting.
    Another problem we incur relates to the quality of the 
documentation the FBI provides. On a recent job we did for the 
Chairman and Ranking Member of this Committee's Subcommittee on 
Technology, Terrorism, and Government Information, we 
encountered numerous occasions in which the FBI was only able 
to provide us unsigned and undated print-outs of documents we 
requested, rather than the final signed versions. This 
presented problems for ensuring that the information 
represented the official position of the FBI and when that 
position became effective.
    While infrequent, in some cases the FBI has denied access 
to the information we have requested. For the most part, the 
information we have requested has been no more sensitive than 
the information we routinely receive from other agencies during 
our work.
    For example, for our work related to Federal teams that 
respond to chemical, biological, radiological and nuclear 
terrorist incidents, the FBI refused to provide us with 
information on the missions, budget and resources of its 
response teams. The FBI said that providing that information to 
us would jeopardize the teams' operational security, even 
though the information was unclassified. Although we could have 
acted to enforce our request for this information, we discussed 
it with our client and decided to drop the FBI from the scope 
of our review.
    We have had some assignments involving the FBI in which 
access was not a problem. For example, during our recent review 
of Federal funding for the Los Angeles, Atlanta and Salt Lake 
City Olympic Games, our request for information about the types 
of projects and the activities that the FBI was funding was 
answered in a timely and cooperative way.
    In summary, the FBI's reluctance to consistently honor our 
statutory rights of access has forced us to expend significant 
energy and resources. The FBI has also limited our ability to 
respond to our clients, the congressional Committees and 
Members of Congress, in a timely and efficient way.
    We recognize that the FBI's responsibility to investigate 
criminal activity carries with it a set of imperatives that 
limit its discretion to disseminate certain types of 
information in order to protect the rights of the accused and 
the integrity of the investigative process. We believe, 
however, that these imperatives do not exempt the FBI from 
congressional oversight. The FBI can and should provide a much 
wider range of information about its activities to the Congress 
and to us.
    I might add that we met yesterday with the Assistant 
Director of the FBI for Public and congressional Affairs. We 
discussed the nature of our concerns with them again. We have 
met with them in the past, and this morning he sent me the 
letter that the Chairman introduced into the record, agreeing 
to change procedures that should make our access better.
    Chairman Leahy. Purely coincidental with the holding of 
this hearing or the day of this hearing, I am sure. That is my 
statement, Mr. Rabkin. I am not going to hang that one on you.
    Mr. Rabkin. Mr. Chairman, there are many areas where we can 
make a contribution to improving the FBI's activities and its 
management of them. We look forward to working with this 
Committee and others to help make the FBI as effective and 
efficient an agency as it can be.
    That completes my oral statement, Mr. Chairman.
    [The prepared statement of Mr. Rabkin follows:]

 Statement of Norman J. Rabkin, Managing Director, Tax Administration 
  and Justice Issues, U.S. General Accounting Office, Washington, D.C.

    I am pleased to be here today to discuss our recent experiences 
with the Federal Bureau of Investigation (FBI) related to access to the 
data., documents, and personnel that we have requested in doing our 
audit work for the Congress. Concern about access to records and people 
at the FBI is not a new topic for us. Indeed, in July 1991 we testified 
on access problems that we had at the Justice Department, most of which 
involved the FBI. Although Congress has not asked us to do a 
significant body of work at the FBI, we believe that there are many 
areas where we can make a contribution to improving the agency's 
activities and its management of them.
    Let me start by outlining our statutory right of access to agency 
records, including those at the FBI, and follow with some examples from 
our recent experience. Most of these examples are related to specific 
access problems. I also want to note some positive experiences as well, 
because although not the norm, we want to present a fair picture.
    In summary, the Congress has given us broad authority to access the 
FBI's data, documents, and personnel in order to conduct our audits, 
evaluations, and investigations. This is the same authority we rely on 
to perform our work at all federal agencies. While things go smoothly 
on occasion, on many other occasions our access at the FBI has been 
difficult, resulting in us having to follow cumbersome procedures to 
meet with Bureau officials and get basic information about their 
programs and activities. We have had access issues in a number of 
agencies over the years. However, across law enforcement-related 
agencies, FBI access issues have been the most- sustained and 
intractable.
                               Background
    Over the past 5 years, we have issued about 50 products that 
include information related to the FBI's operations and activities. In 
only about 10 cases, however, has the FBI been the focus of this work. 
For example, our report on the National Infrastructure Protection 
Center (NIPC), located within the FBI, describes its progress in 
developing national capabilities for analyzing cyber threats and 
vulnerability data and issuing warnings, enhancing its capabilities for 
responding to cyber attacks, and establishing information-sharing 
relationships with government and private-sector entities.\1\ More 
often, our work includes the FBI as one of multiple agencies that are 
the subject of a given review. For example, last year we reviewed 
security protection for agency officials and the FBI was but one of 30 
agencies that we covered.
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    \1\ NIPC was established in 1998 as an outgrowth of the FBI's 
Computer Investigations and Infrastructure Assessment Center and is 
located in the FBI's Counterterrorism Division. The NIPC director and 
most of the analysts are FBI staff. Other staff are detailees from 
other federal agencies and from international partners such as Canada.
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    When we initiate work with federal agencies we formally notify key 
officials about the planned review and meet with them to discuss the 
objectives of our work. At that meeting we try to determine which 
agency officials we should interview and what documents or data the 
agency has that may pertain to our work. At the FBI (and at other 
agencies), a designated liaison acts as our contact for arranging 
meetings and access to documents. With few exceptions, we work through 
the FBI liaison rather than contacting FBI officials directly.
    In the course of our work across almost all federal agencies, we 
routinely receive large amounts of information, some of it highly 
sensitive. We are careful to guard the security of this information in 
a manner that meets or exceeds the safety standards established by the 
source agencies. We have an excellent record in relation to 
safeguarding sensitive and classified information.
                    GAO's Statutory Access Authority
    We have broad statutory right of access to agency records in order 
to conduct audits and evaluations. Under 31 U.S.C. 716(a), federal 
agencies are required to give us ``information about the duties, 
powers, activities, organization, and financial transactions of the 
agency.'' This statute applies to federal agencies, including those 
performing law enforcement functions (such as the FBI), and does not 
exempt law enforcement information from our access authority. If 
agencies do not make this information available in a reasonable time, 
we have the authority to demand access. We do this by sending the head 
of the agency a letter stating our authority and our reasons for 
needing the information. The agency has 20 days to respond, after which 
the Comptroller General may file a report with the President, the 
Director of the Office of Management and Budget (OMB), the head of the 
agency, and the Congress. If the agency still has not granted us access 
within another 20 days, the Comptroller General can bring suit in 
federal district court unless (a) the records relate to activities the 
President has designated as foreign intelligence or counter-
intelligence activities, (b) the records are specifically exempt from 
disclosure by statute, or (c) the President or the OMB Director 
certifies that the information being requested is covered by one of two 
exemptions listed in the Freedom of Information Act (FOIA),\2\ and that 
disclosure reasonably could be expected to impair substantially the 
operations of the government. (See 31 U.S.C. 716(d).)
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    \2\ The two relevant F01A exemptions are exemptions 5 and 7. 
Exemption 5 (contained in 5 U.S.C. 552(b)(5)) exempts from public 
disclosure inter-agency or intra-agency memorandums or letters which 
would not be available by law to a party other than an agency in 
litigation with the agency. Exemption 7 (contained in 5 U.S. C. 
552(b)(7)) exempts from public disclosure records or information 
compiled for law enforcement purposes, but only to the extent that the 
production of such law enforcement records or information (A) could 
reasonably be expected to interfere with enforcement proceedings; (B) 
would deprive a person of a right to a fair trial or an impartial 
adjudication; (C) could reasonably be expected to constitute an 
unwarranted invasion of personal privacy; (D) could reasonably be 
expected to disclose the identity of a confidential source. . .; (E) 
would disclose techniques and procedures for law enforcement 
investigations or prosecutions or would disclose guidelines for law 
enforcement investigations or prosecutions if such disclosure could 
reasonably be expected to risk circumvention of the law; or (F) could 
reasonably be expected to endanger the life or physical safety of any 
individual.
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    In the past, we issued a demand letter to the FBI requiring it to 
provide us with information in accordance with our statutory authority. 
In that instance the FBI ultimately complied with our request. However, 
the use of our statutory enforcement authorities can be adversarial and 
timeconsuming. We prefer to work out arrangements that will serve us 
well in all our work with the FBI and, therefore, enable us to respond 
promptly and completely to congressional requests.
    In that spirit, in March 2000 we met with FBI officials to discuss 
numerous specific access issues and to try to work out more efficient 
arrangements to complete our work. At that meeting, and in a subsequent 
letter from the Assistant Director of the FBI's Office of Public and 
Congressional Affairs, the FBI pledged to do a better job in providing 
us access to records and people. As you will see from the recent 
examples cited in this testimony, our access problems have not been 
resolved.
             Multiple Types of Access Problems with the FBI
    The types of recent access problems fall into several categories 
and sometimes overlap. One of our greatest problems is delay. This 
relates to both receiving documents that we have requested and 
arranging meetings with FBI officials. We have experienced significant 
delay in an engagement we are just finishing - a review requested by 
Senator Fred Thompson when he was the chairman of the Senate 
Governmental Affairs Conunittee. The focus of that review is the FBI's 
coordination of foreign counterintelligence investigations, where 
criminal violations are implicated, with other components within the 
Justice Department, most notably the Criminal Division. Although this 
is a very sensitive subject, our work focused on coordination policies 
and procedures and the FBI's adherence to them, not on the decisions 
regarding the investigations or the intelligence they produced. A work 
log maintained for this job indicates that 112 days elapsed from when a 
written list of questions was delivered to the FBI to the delivery of 
its response.\3\ During this almost 4-month period, we contacted the 
FBI at least 15 times to inquire about the status of the response.
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    \3\ Due to our experience on FBI reviews, we have urged our staff 
to keep detailed records of their requests for data or meetings, the 
FBI's responses to those requests, and subsequent contacts when the 
agency does not respond in a timely manner.
---------------------------------------------------------------------------
    In another case, we experienced delays in receiving documentation 
for our work requested by Rep. Christopher Shays, Chairman of the House 
Government Reform Subcommittee on National Security, Veterans' Affairs, 
and International Relations, and Rep. Ike Skelton, Ranking Minority 
Member of the House Committee on Armed Services. The request concerned 
coordination between the FBI and several other federal agencies. The 
issue again was very sensitive, and the report was classified. 
Beginning in May 1999, we had asked the FBI to produce documents 
showing administrative guidance it had issued on these activities, the 
process by which these activities were approved, the timing and 
duration of specific activities, and evidence of interagency 
coordination. FBI officials told us they would locate and gather the 
documents for us. In December 1999, after senior GAO executives 
intervened, the FBI provided us a minimal and incomplete summary--not 
copies of original documents. In February 2000--9 months after our 
initial request--FBI officials told us they had no documentation or 
other records on the activities.
    In other examples, we experienced delays in receiving documents 
related to our work on reports entitled, Gun Control: Implementation of 
the National Instant Criminal Background Check System and Combating 
Terrorism: Federal Agencies' Efforts to Implement National Policy and 
Strategy, among others. Needless to say, these delays affected our 
ability to do our work efficiently and adversely affected our ability 
to provide timely information and advice to the Congress by postponing 
the issuance of our reports.
    Setting up meetings with FBI officials can also be a lengthy 
process. While the FBI has told us that its goal is to organize 
meetings within 2 weeks, elapsed time from meeting request to actual 
meeting for 3 of the 4 meetings on a current job took 35 days, 41 days 
and 124 days. In the last case, when the meeting finally took place, 
the FBI sent substitutes for the official who was originally expected 
to attend the meeting. In these cases and in many more, the failure of 
the then FBI liaison and the liaison's superiors to return telephone 
calls concerning the status of our request added to our frustration and 
inefficiency.
    Another problem relates to the quality of documentation the FBI 
provides. In our recent work related to the NIPC, requested by Senator 
Jon Kyl, then Chairman, and Senator Dianne Feinstein, then Ranking 
Member, of the Subcommittee on Technology, Terrorism, and Government 
Information, we encountered numerous occasions in which the FBI was 
only able to provide us with unsigned and undated printouts of 
documents we requested rather than final signed versions. Another case 
related to our work that resulted in the classified report mentioned 
earlier. The FBI sent us an ``unofficial'' document without letterhead, 
signature, date, or cover letter. This presents problems for ensuring 
that the information represents the official position of the agency and 
when the position became effective.
    FBI officials in some cases have not been forthcoming with the 
types of details that would provide a richer picture of the issues we 
are auditing. In the case of our NIPC work, the FBI gave us a great 
deal of detailed information, much of which reflected favorably on its 
program, after receiving a draft of our report. Had this information 
been provided earlier when we originally asked for it--we could have 
done a more efficient job in conducting our audit work and drafting our 
initial report.
    While infrequent, in some cases the FBI has denied us access to the 
information we have requested. For the most part, the information 
requested has been no more sensitive than information we routinely 
receive from other agencies during our work. For example, for our work 
related to federal teams that respond to chemical, biological, 
radiological, and nuclear terrorist incidents (requested by Rep. Ike 
Skelton, the Ranking Minority Member of the House Armed Services 
Committee), the FBI refused to provide us with information on the 
missions, budget, and resources of its response teams. The FBI said 
that providing the information to us would jeopardize the teams' 
operational security, even though the information was unclassified. 
Although we could have acted to enforce our request for this 
information through the statutory mechanisms described earlier, we 
decided to drop the FBI from the scope of our review. We needed to 
provide our client a composite picture of all federal agencies involved 
in this effort (we reported on 8 such agencies) and did not want to 
delay our report waiting for information from one agency.
               No Access Problems in Some Recent Reviews
    We have had some assignments involving the FBI in which access was 
not problematic. For a review of federal funding of the Los Angeles, 
Atlanta, and Salt Lake City Olympic Games, for example, a request for 
information about the types of projects and activities the FBI was 
funding was answered in a timely and cooperative manner. Similarly, 
information for a review of computer security expenditures was provided 
with only minimal delays. Finally, although there were some delays in 
scheduling meetings and gaining access to documents, work on improving 
counterterrorism operations was not significantly delayed because other 
tasks could be completed while waiting for the requested information. 
Our staff on this assignment did not consider access a problem.
    Although our examples of reviews that encountered access problems 
span a large number of assignments, in these assignments as well there 
are examples of good cooperation in providing information. The team 
working on the NIPC engagement, for example, found that field agents 
provided detailed and useful information when they were interviewed and 
that access improved during our review. We also note that for one 
meeting on our current foreign counterintelligence coordination 
assignment, a meeting was held the day after it was requested.
                              Conclusions
    While over time we have experienced access-to-records problems at 
different federal agencies, our experience at the FBI is by far our 
most contentious among law enforcement agencies. The FBI's reluctance 
to consistently honor our statutory rights of access has forced us to 
expend significant energy and resources. The FBI has also limited our 
ability to respond to our clients--congressional Committees and 
individual Members of Congress--in a timely and efficient way.
    We recognize that the FBI's responsibility to investigate criminal 
activity carries with it a set of imperatives that limits its 
discretion to disseminate certain types of information, to protect the 
rights of the accused and the integrity of the investigative process. 
We believe, however, that these imperatives do not exempt the FBI from 
congressional oversight. The FBI can and should provide a much wider 
range of information about its activities to the Congress and to us.
    A partially informed Congress cannot provide adequate oversight, 
balance competing interests fairly, resolve issues effectively, or 
deliberate soundly.
    Mr. Chairman, this concludes my prepared statement. I would be 
pleased to answer any questions you may have.

    Chairman Leahy. Thank you very much.
    Well, let's look at the situation we have. We hear in many 
ways the same story that we hear from a lot of different fronts 
that the FBI can make it difficult and unpleasant if you have 
an outside organization conducting review and oversight. They 
did answer quickly in the area where obviously they are being 
asked by the appropriations Committees how much extra money 
they want for Atlanta.
    Mr. Bromwich talks about when he was the Justice Department 
IG that personnel from his office found doing work they were 
authorized by statute to do ``time-consuming and frustrating 
because there was a general lack of cooperation from FBI 
personnel.'' Of course, Mr. Rabkin talks about their efforts to 
fulfill congressional requests for oversight of the FBI are 
made difficult due to resistance at the FBI.
    Senator Danforth, who served as special counsel appointed 
by former Attorney General Reno, said that, in his view, there 
are strong pressures to resist divulging information to 
outsiders. Even though he carried the writ of the Attorney 
General, he had to threaten a search warrant to get documents 
from the FBI.
    Now, this seems to run through a lot of the areas and seems 
to be part of an FBI culture. I would have liked to have heard 
directly from FBI Director Freeh, but as I had stated before, 
he is unavailable. But I also think back to what Judge Webster 
said, that he told them about plausible deniability, that there 
was no such thing and hiding for one hurts them all, and that 
instead they should be very open, the director and others, so 
that problems can be corrected.
    Senator Danforth, in your testimony you also said that FBI 
agents who assist these outside investigators find that it is 
not a very good career move within the FBI. I am talking about 
the culture. You talked about a supervisory agent who did an 
excellent job helping to serve as liaison during your Waco 
investigation, but he felt that he was retaliated against 
because of it. Another supervisory FBI agent declined to work 
with your office because he thought that it would hurt his FBI 
career. Now, these are supervisory levels; this is not some 
junior agent who is just out of the academy and wondering where 
he or she is going to be assigned first.
    Do you think that the current whistleblower protections 
that we now have for FBI agents are adequate, or do we need 
better?
    I know Senator Grassley would be most interested in the 
answer to that, too.
    Mr. Danforth. These are two current cases, Mr. Chairman, of 
people within the FBI who believed that cooperating with a 
special counsel looking into even what turned out to be 
innocent acts in the FBI were not good career moves.
    The first was the FBI supervisory special agent who ran the 
investigation of Ruby Ridge. My deputy approached this person 
early in our investigation and asked if he would be interested 
in serving as our liaison with the FBI to facilitate getting 
records, and so forth, from the Bureau, and he said that he 
thought that it would be very damaging to his career.
    We had a really excellent person named Patrick Kiernan who 
did serve as our liaison, and he has said to me that he 
believes that just working with us and facilitating the work of 
the special counsel's office was something that was damaging to 
him in his career in the FBI.
    I believe that this is part of a culture. I don't think it 
is universally shared within the FBI, but I think that it is 
there, the idea that the FBI is not there to be investigated, 
it is there to do the investigation, and that anybody who is 
participating in anything that could result in any criticism of 
the FBI is in jeopardy for doing that. To me, this is the 
essence of the problem.
    Chairman Leahy. Well, I tend to agree with you. If you are 
not willing to admit or bring to light mistakes, you are just 
condemned really to repeat the mistakes.
    I might ask Mr. Fine and Mr. Bromwich--I will start with 
Mr. Fine, then Mr. Bromwich--have you found in your experience 
that FBI agents come to you with complaints?
    Mr. Fine. Yes, they do. Under the new whistleblower 
regulations that apply to the FBI, we are charged, along with 
the Department's Office of Professional Responsibility, with 
investigating claims of whistleblower retaliation, claims by 
FBI agents that they were retaliated against because of 
disclosure of waste, fraud or abuse within the FBI.
    It is very difficult to prove those whistleblower 
retaliations. It is very hard to find a smoking gun, but we do 
find the same claims that Senator Danforth alluded to that FBI 
agents who are charged with investigating others in the FBI 
believe it is not a career-enhancing move, and believe that it 
is not helpful to them to expose FBI superiors or the FBI to 
the same searching scrutiny that you would expect of 
investigators investigating outsiders.
    In my view, that is a reason to have an outside entity who 
is not dependent upon the people whom they are investigating 
come in and investigate the FBI. It is understandable that 
agents within the FBI who are charged with investigating 
misconduct of the FBI might hesitate to do so, might feel that 
this will not redound to their benefit. I believe that you need 
outside, independent, dedicated people who are solely given the 
responsibility to investigate and not have to rely upon the 
people that are investigating for advancement or promotion to 
do that work.
    Chairman Leahy. Are you referring to having the Justice 
Department IG be the one to conduct the role, unhampered, 
unhindered, as they would anywhere else within the Department 
of Justice?
    Mr. Fine. Yes, I believe that would be the appropriate way 
to go. We are not dependent upon the FBI. We have career people 
whose sole job it is to provide oversight, and I think that is 
a better mechanism than having an entity within the FBI or 
people who are rotating through this office to do that kind of 
outside oversight.
    Chairman Leahy. Mr. Bromwich, do you feel that same way?
    Mr. Bromwich. I feel the same way. Let me just provide one 
anecdotal example that is important to what Senator Danforth 
said. In connection with our review of the Ames matter, 
starting in early 1995, I recall us having a very difficult 
time getting FBI agents with substantial counterintelligence 
experience detailed to us, because they didn't want to come 
over because they did not view it as a career-enhancing move.
    Then once on the team, there was a great reluctance on 
their part to reach conclusions that were critical of the FBI. 
And then as the final underscoring of that, when the report was 
released the FBI personnel who were assigned to my office and 
under the supervision of people in my office declined to have 
their names on the report, even though everyone else who worked 
on the project were. That, to me, strongly suggested that they 
were unwilling to fully participate in a report that was, in 
the end, quite critical of the FBI.
    Chairman Leahy. Thank you.
    Senator Feinstein.
    Senator Feinstein. Thanks, Mr. Chairman. I am just going to 
ask two questions, and I want to use my time wisely.
    Mr. Bromwich, I have read many of your reports. I have a 
great respect for your integrity. You write in the New York 
Times--I guess it is an op ed piece--``The FBI needs a 
manager.'' Let me quote one thing.
    ``The FBI needs greater external oversight. congressional 
oversight is crucial, but it is episodic and fitful.'' I think 
we would all agree with that. ``The executive branch ensures 
central, continuing monitoring of its departments and agencies 
through its inspectors general, but the FBI has been largely 
exempt from the system. The Justice Department's Inspector 
General may not conduct investigations of misconduct among 
personnel at the FBI without the permission of the Attorney 
General or the Deputy Attorney General. The FBI, arguably the 
most powerful agency in the Federal Government, is thus subject 
to less oversight than any other agency.'' That is a compelling 
statement to me.
    What is the history behind this that the IG cannot inspect 
any member of the Department without the specific approval of 
either the director or the assistant director?
    Mr. Bromwich. It is a complicated history. I try to go into 
it in some depth in my prepared statement, but basically the 
Justice Department did not want an inspector general for 10 
years. The original batch of IGs were created through 
legislation in 1978. It took 10 years for the Justice 
Department to get its own, and during that period there was, it 
is my understanding, fairly substantial resistance to bringing 
an IG in.
    One of the complaining parties was the FBI, such that when 
there was the statute passed in 1988 creating the Justice IG, a 
series of compromises were reached in the legislation and then 
implementing the legislation that really stripped the Justice 
IG of the responsibility for doing misconduct investigations in 
the FBI.
    Senator Feinstein. What you are saying is that is unique in 
the Federal Government?
    Mr. Bromwich. So far as I am aware, it is unique.
    Senator Feinstein. In your professional judgment, would it 
be helpful if we were to amend the Code in that regard?
    Mr. Bromwich. Extremely helpful, and I think it is the 
right thing to do.
    Senator Feinstein. Thank you very much. Now, let me go to 
one other aspect, and that is the Wen Ho Lee case. In my view, 
when you file 59 charges against a person and you hold them in 
solitary confinement for 9 months, you ought to have something 
substantial to back it up with. And then to simply throw out 
all the charges, except a charge that was commonly performed, 
and that is downloading from your computer--I have had people 
come in and tell me who worked at that facility that that has 
been done by at least 100 people that they know of. I get very 
curious as to what was really going on there.
    What do you think was, and why do you believe that Wen Ho 
Lee was targeted?
    Mr. Bromwich. I don't really know what went on there. As I 
indicate in my statement, my agency did not investigate that 
matter. Indeed, we sought to investigate and we were not 
permitted to. There has been a Justice Department investigation 
of that matter, handled by a very senior Assistant United 
States Attorney from the Eastern District of Virginia, and I 
think that his conclusions are obviously worth taking 
seriously. The op ed piece that I think you are referring to is 
one that I wrote just based on newspaper information and some 
knowledge of the way these kinds of cases work.
    Senator Feinstein. So you are backing away?
    Mr. Bromwich. No, I am not backing away. I think that in 
this case there was a tremendous amount of political pressure 
that was placed both on the Justice Department and the FBI, 
generated in part by scares about the Chinese trying to take 
over the 1996 election. Unfortunately, I think law enforcement 
agencies and sometimes the Justice Department are not very good 
at resisting that kind of pressure, and I think that is 
probably what happened here.
    Senator Feinstein. You write, again, in the New York Times, 
and I quoted it earlier, that it is almost impossible to 
imagine that such unprecedented charges, the first ever 
criminal charges under the Atomic Energy Act, would have been 
made if Mr. Lee had not been previously targeted. ``The 
Government's claim that it wanted to solve the mystery of what 
happened to the information is not compelling. Criminal charges 
are rarely brought to solve mysteries, and as the judge pointed 
out, the Government has yet to explain why Mr. Lee's offers 
before his arrest to explain the missing tapes were not 
sufficient to meet the Government's legitimate concerns.'' To 
me, those are very significant words coming from an IG who is 
going to use words very carefully.
    Mr. Bromwich. I fully subscribe to what I said then, 
Senator. I found it a very disturbing case, and disturbing in 
the way that both the Justice Department and the FBI handled 
it.
    Senator Feinstein. Does anyone on the panel have any 
comment on this point, because this is rather fundamental to 
the mission of an agency when you hold somebody for 9 months in 
solitary confinement and then drop all the charges, unless 
there was a targeting. And that concerns me very deeply, if 
that were to be found to be the case.
    Mr. Webster, I see you sort of moving around.
    Judge Webster. Senator, I am tempted to make a comment, and 
I think I made some reference to it earlier. The FBI does not 
charge; the United States Attorney and the Department of 
Justice charge. They make the decision whether to prosecute or 
not, and they make the decision whether to reduce the charges 
or dismiss them.
    So I think it would not be accurate to say that the FBI 
influenced the elimination of those. They may have expressed a 
desire, as I found always the case both here and on the 
intelligence side, at CIA, of wanting to know as much as 
possible about someone who was believed to be committing acts 
of espionage, how much damage they had done to whom and why, 
and who were other people who might have been involved. They 
are not always fortunate enough to get that information, but I 
believe it is a natural desire on their part. I found it true 
in the military; let them go, just make sure we know what 
damage they did.
    So I think there may be some area of questionable 
testimony, matters of what kind for which the FBI would be 
accountable and which may have influenced the decision to 
settle for a lesser charge, in the hope of cooperation, rather 
than have a case that might not be won.
    Senator Feinstein. Does anyone have any comment on that?
    As I understand it, the FBI essentially went public with a 
number of comments on the subject, particularly on the issue of 
wiretaps, which the Attorney General had refused to do and was 
later proven, I think, to be correct. So I mean I as a 
policymaker would deduce that the FBI had a substantial stake 
in this case and throwing out, Mr. Webster, all of the charges, 
except for downloading information. That is a stunning 
turnaround.
    Judge Webster. I agree, but I don't think it was the FBI's 
decision.
    Senator Feinstein. To turn around?
    Judge Webster. The FBI had no authority to drop anything. 
This was a Department decision.
    Senator Feinstein. All right. Does anybody have any further 
comment on that?
    If not, then I think my time is up.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you, and we will follow up on this 
because, Mr. Bromwich, you raised a very good point. In Mr. 
Bromwich's testimony he had said the problem he was having 
after he was asked to review the Wen Ho Lee case and how he was 
stopped, but we will go into that in another round.
    Senator Sessions was here earlier and we are glad to have 
him back.
    Senator Sessions. Thank you, Mr. Chairman.
    Senator Danforth, I appreciate your summary remarks. I 
think that reflects what so many of us who love and respect the 
FBI feel about its strengths and its weaknesses. Without doubt, 
there is no large agency in the world that can compare to it, 
in my view, in terms of integrity and hard work and ability. 
But I do sense, in 15 years as a Federal prosecutor working 
with the FBI daily, that they do tend to not want to admit 
error, and that compounds problems and it is not a healthy 
attitude.
    Director Webster, you have been there as judge and director 
of the FBI. Do you think that this perception that I think is 
widely held among Federal prosecutors that the FBI is too 
reluctant to admit errors is an institutional problem that 
needs to be rooted out, and if so, how can we do it?
    Judge Webster. It is a fair question, Senator Sessions. I 
could also add that I worked with the FBI as a Federal 
prosecutor when I was U.S. Attorney. One of the things I always 
found was that special agents tell the truth. Now, with 11,000 
agents, somebody is going to breach that.
    Senator Sessions. I would agree with that. They tell the 
truth.
    Judge Webster. On the witness stand, they tell the truth; 
good or bad, they tell the truth. The question you are asking 
me is if the news is bad, are they necessarily going to tell 
it? And I don't ascribe that to any current reality of career 
destruction by telling we have got a problem.
    It was my experience that I received the most heat and had 
the most difficulty in 9 years that I can remember in 
situations in which things that should have been brought to my 
attention didn't get there, not because it was illegal, but 
because someone made the judgment that it wasn't important 
enough.
    The Cispis case, which you may remember, was a painful 
thing for me because I was leaving the FBI to go to the CIA and 
didn't know anything about the inquiry into a group of 
religious leaders allegedly assisting a terrorist group in El 
Salvador. The man at the desk was following Attorney General 
Levi's guidelines and did not have to report it upstream.
    Because we train the FBI not to be politically or 
partisanly oriented, he just didn't see that investigating or 
at least running name checks on 100 or so clerics was going to 
be a matter of public concern. So he didn't tell anybody about 
it, and because he didn't tell anybody about it, I never heard 
about it. That is a condition that I think needs to be worked 
on all the time. They made the judgment.
    In the McVeigh case, I am going to speculate a little here 
because there is a commission, I believe, that is going to look 
into this and come out with it. But we do know thus far that a 
Federal judge took a look at it and a court of appeals took a 
look at the material and decided it had nothing to do with the 
guilt or innocence of Mr. McVeigh.
    What I suspect is that with the vast amount of information 
being collected--the most investigated case in our history, I 
understand--people in field offices looked at some of the 
anonymous letters, the newspaper clippings, the contributions 
of psychics, and put that somewhere else because it wasn't 
Brady material, it didn't have to do with guilt or innocence, 
and they were filing that way.
    Senator Sessions. They decided to do that?
    Judge Webster. They decided to do that. A prosecutor later 
decided he was going to go beyond Brady, so he asked for 
everything. They were in the midst of converting their entire 
computer system at that point, and they asked for it from 
headquarters 5 or 6 times urgently to get everything out there.
    I used to say be careful what you tell the Congress, 
because only at the FBI and only in the CIA are things never 
lost forever. I can think of a lot of agencies in Government 
where you could safely say we have no such records because they 
will never find them. But sooner or later, in the FBI or CIA 
they will come to light. And when they do, my experience has 
been they have been honest about it; they have been 
forthcoming. Here they are; they came in at the last minute, 
but they came, and they did not affect guilt or innocence.
    I make no excuse for it because it slopped over and clouded 
one of the most important, successful investigations in 
American history--little bits and pieces of a truck traced to a 
rental agency identifying the people responsible in a very 
short period of time, but millions of pieces of paper came in.
    We have to face the fact that at the FBI the culture is, as 
I see it, that we can do anything within our jurisdiction. We 
will go anywhere and do anything we are asked to do. That is 
different from a number of other agencies, and they are proud 
of that. That accounted in some measured for new technology for 
which they were not adequately prepared to address the issues.
    I remember bringing in two people from the outside to 
address our computerization back 20 years ago. They did a fine 
job, but as you know, technology is moving so fast that you 
really have to stay up with it. Congress was not in a 
particular hurry to keep renewing the technology every 2 or 3 
years, the way it is done in industry, and they are living with 
equipment that was behind the times with people who were 
managing it who were behind the times.
    Technology at the labs--they should have, in retrospect, 
been bringing people in from the outside to be sure that they 
had the benefit of modern technology, not relying on their own 
resources, as good as they might have been. Those are areas for 
scrutiny, and I think that in the light of things that have 
happened changes will come. They are already coming in the wake 
of the Hanssen case, I am glad to see.
    But I don't think it has to do with the character and 
credibility of the men and women who serve there or their 
willingness to tell the truth. Sometimes, they made a judgment 
that these things aren't important. They should be careful 
about making judgments like that.
    Senator Sessions. Well, I am glad you answered it that way 
because you are correct. Some agent in some office gets a 
teletype to send in all things related to a certain case, and 
two things can happen. It gets lost, it never really gets 
there, it doesn't get produced or the computer doesn't work, 
or, second, somebody can look at it and say what I have doesn't 
make any difference, and throws it away. This isn't 
discoverable evidence; some lawyer told me this isn't Brady 
material, I don't have to produce it, and just not do it. The 
combination of those things sometimes causes a problem.
    I know when I tried a multi-district case, there was always 
a lot of paranoia about do we have all the documents from all 
the outlying offices. I learned to specifically ask, because 
you would too often find that they had given you everything in 
the local office, but not the leads that had been run around 
the country. People don't realize how easy it is to make those 
mistakes, in a big bureaucracy how these things can happen.
    But I do think there is a bit of a problem. I don't know if 
it comes back from the Hoover days, which has a lot of the 
great strengths of the FBI, whether it comes from their 
intelligence mission, counter-espionage mission that they have. 
But there is a bit there that I think when it comes to trying 
public cases in the United States district courts of America, 
they need to be more open and more forthcoming, and I think the 
leadership needs to require that.
    I have taken too much time.
    Chairman Leahy. That is all right. I think I find myself in 
a great deal of agreement with what the Senator from Alabama is 
saying and I appreciate him doing that.
    Senator Sessions. Does that make you nervous?
    [Laughter.]
    Chairman Leahy. Probably not half as nervous as it is 
making your caucus. They are terrified they might lose another 
one. I am sorry. Maybe it is because I was born in Vermont, 
that slipped out.
    Senator Schumer.
    Senator Schumer. Thank you. I want to thank our five 
witnesses for their fine testimony and every one of you for 
your service to this Government and to this country.
    I am trying here--and as you can see, the focus I have 
taken is not the specific individual cases which many of you 
have talked about, but what is the deeper thread. And I guess I 
would ask each of the witnesses or any of the witnesses who 
wishes to respond, although I would ask them to be brief 
because the time is so limited, do you think there is a deeper 
thread behind all of these different issues?
    Admittedly, these are all complicated cases where, as 
Senator Sessions said, it is easy to make mistakes. But it just 
seems there are too many of them; there are more of them these 
days than there used to be. I will tell you what the average 
citizen thinks. They think if there are mistakes in the high-
profile cases where there should have been extra care, imagine 
what is going on in the low-profile cases where there was 
probably a little less scrutiny and a little less supervision 
from the top.
    The second question I have is do you think that an agency 
that has to be nimble and sort of lean, somehow this agency has 
gotten too large? It is almost impossible to expect the FBI, 
say, when Judge Webster was there, which was probably half the 
size--is that fair to say--to be as good now.
    I will just tell you one little story which bothered me. I 
have a friend who is in a prosecutorial office in New York 
City, top level, one of the best prosecutors in the city. This 
is in a city office, and this person said to me that they would 
rather have now a New York City police detective on a case than 
an FBI agent. Even though the FBI agent was a more qualified 
person, there were so many places that that person had to check 
and so many bureaucratic loopholes that they had to go through 
that they couldn't be as effective on the case as they used to 
be, which I found kind of surprising.
    So let me ask first the two inspectors general what they 
think and then maybe go to Mr. Danforth and then Judge Webster.
    Mr. Fine. Senator Schumer, I do think it is an issue and a 
problem. It is a management problem, in my view. In many of the 
smaller cases, you have agents who know the details of the 
case, know all of what is in the files and can go by the seat 
of their pants without a computer system or a management system 
that you need in the high-profile, the extensive, the extended 
cases that you are getting in the FBI, such as in the Oklahoma 
City bombing case.
    I also believe it is an important issue about attending to 
the details and document management and the discovery 
obligations that to some extent has not been the focus of 
attention the way it should be within the FBI. The glamorous 
part of the job is to investigate, to catch the criminal. But 
an equally important part of the job is to ensure that the 
documents are produced, the discovery obligations are attended 
to. And I believe that the focus of the FBI has sometimes not 
been directed in that way the way it should.
    I do believe it is also important for the FBI to open 
itself up to outside influences, outside people. I believe the 
FBI has done some good things by bringing in outsiders to bring 
new ways of operating to the FBI, both in the FBI Laboratory in 
response to our report, bringing in outside scientists rather 
than an examiner who rose through the ranks of the FBI, and 
also in the Information Technology Division. They have a new 
director there from IBM who I believe is doing good things.
    So I believe it is important for the FBI to bring in 
outside influences, outside people, and open itself up to 
outside scrutiny.
    Senator Schumer. They are not doing enough of that now.
    Mr. Fine. They need to do more of it.
    Senator Schumer. I would ask the others what they think of 
the idea of the commission that Senator Hatch and I have talked 
about, and any suggestions as to how it should be structured.
    Mr. Bromwich. I agree with you, Senator Schumer, that every 
agency could use that kind of top-to-bottom inspection at least 
every few decades. I think that with all of the public problems 
that the FBI has had in recent days, this is as good a time as 
any.
    I think we shouldn't strain to find common threads 
everywhere in all of these problems, but I do agree with Mr. 
Fine that there are some management and supervision issues that 
do run through some of these cases. For example, we found in 
the Lab that complaints about the way preparation of scientific 
reports were handled were not handled by supervisors in the 
Lab. They were ignored, they were swept under the rug, and the 
problem became far worse. As Senator Grassley recalls, I am 
sure, it became really a cancer in the Lab.
    I also agree that the FBI in the information technology 
area, in the Lab and elsewhere, needs to open itself up. 
Director Freeh did the right thing in bringing in a world-class 
scientist to head the Lab after the IG's investigation. But 
originally they were proposing three agent candidates from 
within the FBI and were really following the course of business 
as usual.
    I think it is very important that when a major piece of 
oversight work is done like the Ames review of the FBI Lab 
review that the Congress can have confidence that the top 
management of the FBI simply doesn't agree with the 
recommendations in a perfunctory way, but that it has been a 
bit of a wake-up call and that they have actually changed their 
practices. I think Congress can be helpful in that regard.
    As to the issue of whether they are too large or not, they 
probably are, but I think with the right people in terms of 
managers and the right systems I think it can function, and 
function well, and restore some of the lustre to its reputation 
that it may have lost in recent months.
    Senator Schumer. Senator Danforth?
    Mr. Danforth. Senator Schumer, first let me say that----
    Senator Schumer. And I just want to thank you for your 
great work on Waco. It was a true national service.
    Mr. Danforth. Well, thank you very much.
    Senator, I don't think any agency, or human being for that 
matter, no matter how small it becomes, is ever going to be 
mistake-free. We examined in our investigation 2.3 million 
pages of documents. We had 15 people who did nothing but look 
at documents. My guess is in Oklahoma City there were many more 
documents than that, and they were probably produced by 
hundreds, if not thousands, of FBI agents. Therefore, the fact 
that, say, 4,000 or whatever the number was were missing, that 
to me is to be expected. I think there is always going to be a 
box somewhere that people come up with.
    I think that it is a mistake to have a standard of absolute 
perfection with respect to mistakes because I think if we do 
that and every mistake is investigated, then that is to say 
cover up your mistakes because you are going to be in big 
trouble if you make them.
    I do believe that there are people within the FBI who don't 
want anybody to believe they make mistakes, and I think that 
that was the story of Waco. Instead of coming forward 
initially--and if they had done that, everybody would have 
said, OK, fine, thanks for explaining it--they didn't come 
forward.
    I further believe that during our investigation there were 
people within the FBI who just plain didn't want to cooperate 
with us. I think it was a small fraction, but I think that they 
were some pretty well-placed people. We had difficulties with 
the general counsel's office, not with the general counsel 
himself, Larry Parkinson. We think he was cooperative. But we 
did have problems with them. They were not producing everything 
to us. We at one point had to threaten a search warrant, and we 
had to send 3 lawyers and 11 postal inspectors to the FBI to 
look for documents on our own because we didn't have any 
confidence in them.
    So I think I agree with what Senator Sessions said. I don't 
think it is quite as benign as Bill Webster said. I think that 
there are a lot of mistakes, but I think that there is a 
culture in the FBI, somewhere in the FBI, to keep this from 
coming out in the public.
    I believe that the most important reform is to change that 
culture, and I don't think there is any easy way to do it. I 
think oversight from this Committee on a systemic basis, not 
just every now and then, is very, very important. I believe 
that the President of the United States, the Attorney General, 
and the Director of the FBI have got to make it clear to every 
agent from day one at the FBI academy that there are worse 
things than making mistakes, and the worst thing is not being 
forward about making that mistake.
    Senator Schumer. My time is up. Thank you. I appreciate it.
    Chairman Leahy. Senator Grassley.
    Senator Grassley. Thank you all very much for your 
testimony on this very important issue. It is very timely to 
have a hearing like this, as the administration is selecting a 
new director.
    I am going to start with Mr. Bromwich. I want to ask the 
question and then I want to give some backup. This would be 
asking you for suggestions of what could be done to better 
address the issue of whistleblower protection within the FBI.
    I ask this because you remember the name of Dr. Fred 
Whitehurst. He was, I think, the highest-profile whistleblower 
that I have ever had go to an IG. He suffered attacks, not only 
retaliation from his FBI colleagues, but also from you as well.
    You were recently quoted as saying that you now wish your 
report had made it clearer that Whitehurst deserves full credit 
for exposing serious misconduct. So I believe we can learn 
something from your reflection of 4 or 5 years on that.
    Mr. Bromwich. Thank you very much for saying that, Senator 
Grassley.
    It is true that Dr. Whitehurst was the principal source of 
allegations for our FBI Lab investigation, and it is true that 
in retrospect I think we were perceived as being too critical 
of him rather than commending him sufficiently for the service 
he performed.
    We did it the way we did it because we held him to the same 
standard as all of the examiners against whom he made 
allegations, and against that standard he fell short in many 
respects because many of his allegations were not supported by 
the evidence.
    But what concerned me and what led me to say what I said 
was I think that we were perceived as more critical of him and 
not sufficiently appreciative of the service he rendered by 
bringing his allegations forward. And there is no doubt that 
but for his persistence in bringing the allegations again and 
again and again over a long period of time within the FBI and 
finally to the IG's office that the reforms that have 
subsequently been made in the FBI Lab would not have been made, 
and he deserves credit for that.
    All of the details of the current Whistleblower Act are 
ones that I am not deeply familiar with, but my impression, 
Senator Grassley, is it is still too complicated and too 
indirect for FBI whistleblowers on a range of allegations of 
misconduct to bring those directly to the inspector general 
rather than jumping through hoops before they have to do so.
    So I think that would need to be examined to determine 
whether there are still too many barriers that interfere with 
the ability of FBI employees who believe they have knowledge of 
wrongdoing to bring those forward to an entity outside the FBI.
    Senator Grassley. I want to pick your brain on increasing 
the authority of the Department of Justice Inspector General 
and more on mechanics. What do you propose should happen to the 
FBI's Office of Professional Responsibility, and what 
structural changes would you recommend within the Justice IG in 
terms of personnel and organization to deal effectively with 
the new responsibilities, if it would take any new 
responsibilities?
    Mr. Bromwich. Let me take a quick pass at that, but I think 
Mr. Fine is currently thinking about that issue as well.
    I think that just as has been the case with many other 
Justice Department components where there are still internal 
affairs arms that handle the non-criminal and less serious 
matters, there would still be an important function to be 
served either by FBI OPR or by some other entity. In other 
words, I don't think it would need to be eliminated from 
existence. And, in fact, I don't think that would be a good 
idea.
    But I think that all criminal matters and all 
administrative misconduct allegations at a certain level of 
employee or above should, by rights, sort of go first to the 
inspector general's office, and it ought to be up to that 
office to refer things back to the FBI.
    Again, we are not writing on a clean slate here. That is 
exactly the sort of system that has existed with respect to the 
internal affairs arms in other Justice Department components 
that have law enforcement functions--the Marshals Service, the 
Immigration Service, the Bureau of Prisons, and so forth. It is 
only the FBI and the DEA that have had this special status that 
allows them to have primary jurisdiction over misconduct 
matters relating to personnel in those agencies. I think it is 
a two-tiered system, it is an unequal system, and it is a bad 
system.
    Senator Grassley. Do you have something you want to add to 
that?
    Mr. Fine. Yes, Senator Grassley. I agree with Mr. Bromwich. 
I believe that the relationship of the IG at the Department of 
Justice and the FBI OPR should be similar to the relationship 
that the IG has with other entities in the Department.
    I believe FBI OPR can and should investigate and deal with 
discipline of line agents for certain matters. But on criminal 
matters and high-level administrative misconduct or sensitive, 
high-profile matters, the Department of Justice IG should have 
the authority and the resources to be able to investigate those 
matters.
    Senator Grassley. Let me have 15 minutes to--or 15 seconds 
to----
    Chairman Leahy. I was about to get Senator Durbin's name 
plate on the side of my head on that one, but go ahead.
    [Laughter.]
    Senator Grassley. Several of the speakers made reference to 
my use of the words ``cowboy culture.'' Recently, I did that, 
but I also first did that in 1997 when we were involved with 
the FBI crime lab problems and Mr. Bromwich's own 
investigations of them. At that particular time, we were 
dealing with this organization that attempted to thwart an 
independent investigation, launched its own sham investigation, 
and then attempted to discredit and destroy the careers of 
their own respected scientists who brought these problems to 
light. On top of all the other cases where there is evidence of 
screw-up, in most of these the real foul-ups within the FBI 
occurred after the initial mistakes were revealed.
    I can't help but continue to use the words ``cowboy 
culture'' when the fundamentals of the FBI are being forgotten, 
and those fundamentals are that when their agents seek the 
truth and let the truth convict, they do a good job. But it is 
in these other cases where they try to interfere with that 
process that they have created a problem for themselves.
    Thank you.
    Chairman Leahy. I agree, and the Senator from Iowa has been 
consistent in these concerns for as long as I have been on this 
Committee.
    The Senator from Illinois.
    Senator Durbin. Thank you, Mr. Chairman. I would like to 
say, although I believe that a separate inspector general for 
the FBI is the appropriate thing to do, I would like to at 
least put a word of defense in here because some question my 
conclusion.
    Mr. Bromwich has said that he believes that changes within 
the law and within the OIG could make a difference. That is 
possible. It could be an approach that is equally effective, 
maybe more so. I am not sure.
    Here is my misgiving: when you take a look at the budgetary 
figures for the Department of Justice between 1993 and the year 
2000, it is fairly overwhelming. The size of the Department of 
Justice increased from an $11.2 billion budget to $21 billion. 
The workforce at the Department of Justice went up from 98,000 
to 130,000 in that period of time.
    The FBI increased dramatically in size, from $2.1 billion 
to $3.6 billion, a 70-percent increase in their budget. In the 
same period of time, the OIG budget went up 18 percent. That's 
DOJ, 90 percent; FBI, 70 percent, OIG budget, 18 percent. And 
then when you look at the actual people working in OIG, it 
decreased by 15 percent.
    So while the number of employees that the OIG had 
jurisdiction over increased by 32,000, the number of watchdogs 
in the inspector general's office decreased by 15 percent. I 
would have to check to make sure, but it is hard for me to 
believe that Congress did that alone. My guess is that the 
administration and the Attorney General at the time in each of 
the annual budgets was at least complicity in this decline of 
resources in OIG.
    Put that lack of attention to the inspector general's 
responsibility together with what we have heard over and over 
today about the culture at the FBI and I hope you understand 
why I have come to the conclusion--and some may join me and 
some may not--that creating a separate inspector general that 
is accountable not only in his or her activity but also in his 
or her budget will tell us whether or not we have a cop on the 
beat when it comes to keeping an eye on the working of the FBI.
    I think otherwise, as you have reported, Mr. Bromwich, in 
your statement here, the OIG again is going to continue to be 
marginalized, excluded, shunned, cloistered. The FBI knows how 
to do this. The GAO learned that. I think the Intelligence 
Committee here on the Hill has learned that, too. The FBI is 
pretty good at this. They have developed this skill over many, 
many decades, and that is why I think a separate IG might be 
the way to go.
    Let me address a specific issue that I think goes to 
management maybe more than motive, and that is this whole 
question of computers. Sitting in the Intelligence Committee, I 
received a briefing which I thought was amazing and then read 
about it the next day in the New York Times--no surprise--that 
talked about Mr. Hanssen's activities 10 years ago.
    Mr. Hanssen fancied himself as a computer buff, and he 
tended to know more about computers than most of the people he 
worked with. So he bought a hacking device, put it into his 
computer, hacked into his superior's computer, downloading 
information about Russia he wasn't supposed to have. And then 
do you know what he did? He reported himself.
    He went to his superior and said, I just hacked into your 
computer, pulled down the information about Russia I am not 
supposed to have, and I want to show you how porous our system 
is, how vulnerable it is. Very crafty thinking on his part, 
because from that moment forward he could hack as much as he 
wanted and say it is just another experiment to show you how 
vulnerable we are. Well, we know those experiments were 
deriving information which, it has been alleged, he sold to the 
Russians.
    Now, what I find interesting here is that this U.S. News 
and World Report goes into some question about computers at the 
FBI. You would think that an agency with this responsibility of 
investigation would have to be on top of the computer business 
if they are going to be effective.
    What we read in the news report here really suggests 
otherwise. ``One of the FBI's divisions still uses computers 
with 386 micro processors, chips so old they haven't been sold 
for nearly a decade. FBI computers don't have rudimentary 
Internet browsers. Agents can't even send e-mail outside the 
Bureau's internal network.''
    Mr. Robert Diaz, 52 years old, a retired IBM exec who has 
been hired to try to clean up the computer mess said that for 
half a century agents and friends of agents ran everything. 
``And what do they know about computers,'' he says. ``It beats 
me.'' ``Almost every organization upgrades its computer 
networks every 2 or 3 years,'' Diaz says, ``but at the FBI 60 
percent of the desktop PCs are 4 to 8 years old. The networks 
are 12 years old. The system is not built for the level of 
complexity agents must deal with today.''
    Mr. Fine, you reported this, didn't you? You had an 
investigation 5 or 6 years ago that went into this problem and 
really pointed to the fact that going beyond the fortress 
mentality at the FBI, there frankly was a question of 
competency when it came to the mechanics of the operation of 
the Bureau. But from what I can gather, for 4 or 5 years there 
has been no response, or very little. Was that the case?
    Mr. Fine. We have reported that. In addition, we did a 
review in the campaign finance investigation and found that 
they were not inputting data into the computer system, that 
they were not using it the way they should, that they couldn't 
with confidence state what was in the computer, and that if 
they had done a search they would get it. Quite frankly, the 
response to the report was we agree and we will take measures. 
But we recently learned that they have not responded to it.
    Senator Durbin. Exactly the point. Was it not your 
responsibility as inspector general to find that sort of thing? 
Going beyond the question of whether or not there is some venal 
conduct here, we are talking about competency in management. 
And you found, and I think it has been found and repeated here, 
that when it came to the management of the premier law 
enforcement agency in America, they were in the horse-and-buggy 
era and they are still stuck there.
    Mr. Fine. They still have problems. I think that is why it 
is a good idea to bring in someone from the outside. But we are 
seeing even now that many of the agents aren't trained 
sufficiently, aren't using the computers properly, don't have 
adequate computer support. It is a significant problem.
    Senator Durbin. And so when 4,000 documents don't show up 
in the McVeigh case, I think it is conceivable that there were 
millions, as Senator Danforth has said, but it was the largest 
terrorist act in the history of the United States. It was the 
highest profile case in modern memory, and maybe it is just 
possible that beyond someone pushing a box under a desk, their 
computers just might not have been up to the job. I don't know 
the answer. Maybe Judge Webster will tell us the answer to that 
as part of his investigation, too.
    Mr. Fine. That is part of our review in the Oklahoma City 
bombing case and we certainly will be looking at that, Senator.
    Senator Durbin. Thank you, Mr. Chairman.
    Chairman Leahy. Thank you very much.
    Gentlemen, I thank all of you. We will submit other 
questions for the record. We have kept you longer than we had 
said, and this is obviously the first of what is going to be 
many such hearings.
    I was struck by a couple of things, if I could just take a 
moment on this. Judge Webster talked about the tremendous 
increase in the Federalizing of crimes. I said once in one of 
these things, the next thing we know we are going to have a 
Federal crime on jay-walking in a neighborhood because somehow 
that street goes out to the town road, which goes to the State 
road, which goes to the Federal interstate highway. But we are 
going to have to hire a few extra officers for that. The rodeo 
one is interesting.
    I am struck by the days when I was a prosecutor and I got a 
call 1 day from the local sheriff who said, you know, we 
recovered this 5-year-old car that is kind of banged up and had 
been reported stolen. The next thing you know, there are two 
FBI agents here who want to take over the case. It wasn't until 
we had a meeting and were briefed in Washington, a number of 
the prosecutors--Mr. Hoover was very proud about the enormous 
amount of money they recover for the country, and it was 
basically stolen car cases that would be reported at face value 
that the local sheriff had probably found anyway. And I thought 
how terrible it was to send a well-trained FBI agent out on 
that.
    I mentioned to Senator Hatch here earlier that I think if 
we want to do a Presidential commission or a commission, we 
ought to have somebody go back now through the whole Federal 
criminal code, and I think we could throw out three-quarters of 
what is there and allow State and local governments to handle 
them. They are far better trained for it.
    Obviously, in the Oklahoma City bombing, nobody could have 
put all that together the way the FBI did. Let them concentrate 
on things like that and let local law enforcement take care of 
the things they want. We would all be better off. The courts 
would have a lot less things in them. Everybody from Chief 
Justice Rehnquist on have said we are clogging up the courts 
with cases that should be in State courts because we have 
criminalized so much.
    What Senator Danforth has pointed out about the 
balkanization in here--we have got to find a way to break that 
down because I want the FBI to be the best possible. The 
country is better off for that. And just as we make mistakes in 
the Congress and we have to own up to it, if there are mistakes 
in agencies of whatever departments, own up to them. Usually, 
the result is you are a better department afterwards because 
you correct the mistakes and move on from there. And don't 
punish the person who points out the mistake.
    So thank you all very, very much for taking such time out 
of your very busy schedules.
    We have a statement from Senator McConnell which we will 
put in the record.
    [The prepared statement of Senator McConnell follows:]

  Statement of Hon. Mitch McConnell, a U.S. Senator from the State of 
                                Kentucky

    I would first like to thank the Chairman for calling this important 
hearing. All Americans are troubled by the stream of allegations 
surrounding the FBI over the last eight years, stemming from incidents 
such as Waco, Ruby Ridge, and more recently, the Hanssen and McVeigh 
matters. The number and significance of these incidents strongly 
indicate-if not necessitate the conclusion-that there are systemic 
problems in the Bureau's operations. And it is therefore highly 
advisable for the Chairman to convene this hearing to determine the 
scope of the problems that exist and the best solutions for them.
    That being said, the FBI is still, in my opinion, the foremost law 
enforcement agency in the world. Its successes over the years are both 
legion and legendary, and its agents and employees are some of our 
finest public servants. It is because of the desire to see the Bureau 
maintain this preeminent status that today we are taking a hard look at 
its operations. It is a disturbing marker for the rule of law when, for 
example, 61% of Americans believe that their FBI started the fire that 
consumed so many citizens at Waco. And it is just as disturbing when, 
as our former colleague found, these beliefs are unjustified and their 
causes-dishonesty, delay and disingenuousness-seemingly preventable.
    I continue to support evaluating the best remedies for the problems 
that have plagued the FBI in the recent past. But my preliminary 
opinion is that funding increases for the Office of Inspector General 
in the Department of Justice and establishing a separate Inspector 
General's Office for the FBI may be necessary-but they are not 
sufficient-conditions for major improvement. If, as Senator Danforth 
believes, the problem is one of culture, then it would seem to me that 
additional investigative offices and increased funding would provide 
better and quicker explanations as to what caused problems, but I don't 
know how effective such measures will be in helping prevent these 
problems in the first place. It seems, as Senator Danforth suggests, 
that a more organic remedy is needed, beginning with strong and 
persistent messages from the Attorney General and the Bureau's Director 
that, as our former colleague put it, ``the role of the FBI is to 
protect the country and the Constitution, not to protect the FBI from 
criticism.''
    In closing, let me thank the Chairman again for recognizing the 
need for us to explore this matter. I enjoyed reviewing the prepared 
remarks, and I look forward to hearing from our witnesses. Thank you.

    Chairman Leahy. The Committee stands adjourned.
    [Whereupon, at 3:26 p.m., the Committee was adjourned.]

 
        REFORMING FBI MANAGEMENT: THE VIEWS FROM INSIDE AND OUT

                              ----------                              


                        WEDNESDAY, JULY 18, 2001

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:07 a.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Patrick J. 
Leahy, Chairman of the Committee, presiding.
    Present: Senators Leahy, Feinstein, Schumer, Durbin, 
Cantwell, Hatch, Grassley, Specter, and Sessions.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. Good morning. I know that Senator Hatch is 
testifying at another hearing and will be joining us very soon. 
Senator Grassley is here. Senator Grassley, if you have no 
objection, I am going to go ahead and start the hearing.
    Senator Grassley. I think that would be perfectly all 
right, unless Senator Hatch's staff says otherwise.
    Chairman Leahy. He is testifying. We will start with my 
statement and then we can always go to Senator Hatch, or if he 
is detained longer there we will break into the testimony for 
him to speak.
    This is the second hearing we have held on the Federal 
Bureau of Investigation. I said when I became Chairman I 
thought it was time to take a long overdue look at some 
problems in our Nation's foremost law enforcement agency.
    Before I address the subject of today's hearing, I want to 
note three significant developments concerning the FBI that 
have taken place in recent days. The first is that the 
President has announced his intention to nominate Robert 
Mueller to be the Director of the FBI. I have met with Mr. 
Mueller and I know several other members of the Committee have, 
too, and I intend to proceed with his confirmation hearing 
expeditiously. As soon as the President actually sends the 
nomination to the Senate, we will schedule and move forward 
with a hearing.
    The second important recent development concerns an issue 
that was at the heart of this Committee's meeting earlier, and 
that is FBI oversight. Last Wednesday, the Attorney General 
issued an order redefining the jurisdiction of the Office of 
Inspector General to give it authority to investigate 
allegations of misconduct by employees of the FBI and the Drug 
Enforcement Administration.
    As the witnesses at our last hearing explained, the scope 
of the Inspector General's authority over the FBI has been a 
source of recurring controversy and it has made FBI oversight 
more difficult over the years. I commend Attorney General 
Ashcroft for his wise decision to remove the remaining 
restrictions on the Inspector General's authority, and I want 
to acknowledge Senator Grassley for his efforts in helping to 
encourage this important reform.
    But even though the Justice Department's internal rules 
have been changed, and I do commend the Attorney General for 
that, I believe we need to make this change permanent by 
legislation. We should not leave matters in a position where 
the Inspector General's important role in performing FBI 
oversight could once again be frustrated by the stroke of the 
pen by a future Attorney General.
    Now, the third development that bothers me greatly as 
Chairman of this Committee, was yesterday's announcement by the 
Attorney General about weapons and computers that are missing 
from the FBI's inventory.
    It is not just the number; when you look at the number of 
guns as compared with the number of guns in the FBI inventory, 
it seems to be a very small number. If you look at the number 
of computers, it may be a small number. But what bothers me is 
that some of the computers supposedly contained classified 
information. You would think after the total fiasco of the 
FBI's handling of the Hanssen matter that they would have 
learned on this matter. We also have missing weapons: 184 were 
stolen; 265, including 91 training weapons, were reported lost 
or missing, and 184 laptop computers.
    Now, I said at the beginning of this that there are some 
very, very serious management problems in the FBI, and I am 
hoping these hearings will help us identify them. In trying to 
figure out what we do next, we have to look at what has been 
done in the past.
    FBI headquarters in Washington constantly struggles to stay 
abreast of developments in the FBI's 56 field offices and 44 
legal attache, or LEGAT offices, and to ensure that each of 
these offices is following orders and procedures. It is often 
when field offices ignore or do not fully comply with orders 
from headquarters that problems happen. One example is the 
FBI's belated production of the Oklahoma City bombing papers.
    We continue to await the outcome of the Justice 
Department's Inspector General review of how this happened in 
the face of 16 separate orders from headquarters. The Director 
of the FBI himself sent an order for pretrial production of 
these documents: 16 orders sent from headquarters, and still 
they were not all produced.
    Then we have the May 2000 report of the Attorney General's 
Review Team. This was headed by Federal prosecutor Randy 
Bellows on The Handling of the Los Alamos National Laboratory 
Investigation of Wen Ho Lee. This dissected the relationship 
between FBI headquarters and the Albuquerque, New Mexico, field 
office, and found serious flaws, some of which stem from a fear 
on the part of lower-level FBI agents at headquarters of being 
perceived as criticizing more senior members.
    While the full Bellows report remains classified, in 
response to a request from Senator Specter and myself, the 
Justice Department has provided the Committee with an 
unclassified version of the report. The report documents how 
the National Security Division became aware of the field 
office's ``poor handling of the case,'' yet--and this is the 
important part--``took no effective measures to fix the 
problem, even when it was given an opportunity to do so. 
Instead, it simply attempted to run the case from FBI 
headquarters, an approach that was unmanageable from the start 
and which would severely handicap the investigation.''
    When, for example, two extra agents were sent to the field 
office to assist in the Wen Ho Lee investigation, they were 
diverted to other investigations. And when they were diverted 
to other investigations, the Assistant Director of the FBI's 
National Security Division was not informed. A unit chief in 
the same headquarters division explained, ``it would have been 
`impolitic' to advise [the Assistant Director] of the division. 
He said the `culture' of the FBI is `very intolerant' of that 
kind of reporting.''
    This unit chief told another supervisory agent that he 
should not `` `stir the beans' because it would have been 
inappropriate to `mess with the SAC's decision.' '' He warned, 
``you don't get ahead in the FBI `if you stab SACs in the 
back.' '' As a consequence, the problem of the two agents being 
diverted remained unresolved.
    Periodic inspections provide a significant mechanism for 
FBI headquarters to check on the progress of cases and 
communicate in the form of interrogatories specific complaints 
to field offices about their handling of cases. But not 
withstanding that, the Bellows team found some dirty laundry 
there, too.
    A supervisory agent involved in the Wen Ho Lee 
investigation at headquarters said that ``interrogatories are 
not, in reality, used as an opportunity to complain about a 
field office: we're never allowed to be candid in 
interrogatories.'' '
    Now, this, of course, prompted appropriately strong 
criticism in the Bellows report, which stated, ``If true, if 
the FBI's `culture' does not encourage, indeed require, that 
FBI-HQ personnel be blunt and candid in interrogatories, this 
essentially eviscerates the value of the interrogatories. . 
.The issue is [redacted] failure to avail itself of an 
institutional mechanism--the inspection process--which is 
specifically designed by the FBI to ensure that all significant 
problems in a field office are identified and addressed in an 
inspection.'' In effect, the process is there, but the process 
is not allowed to work. It is like a catch-22; the major is in 
only when he is out.
    The Bellows report concluded that ``[i]f the FBI `culture' 
discourages `full disclosure' in the interrogatories or 
interviews associated with the inspection process, that 
`culture' needs to be altered. All FBI personnel should be 
advised that the FBI will not tolerate anything other than 
`full disclosure' in the inspection process.'' This 
recommendation is so patently obvious it is shocking that it 
had to be made. I cannot imagine a single Senator on this 
oversight Committee who would disagree with that conclusion. So 
the challenge to the new Director and new management team he 
brings into the FBI will be to make sure it happens.
    Even within FBI headquarters, disputes between the National 
Security Division and the Criminal Investigative Division over 
the Wen Ho Lee investigation appear to have slowed the 
investigation down. In a heavily redacted part of the Bellows 
report, we learn that concern over the effect of an espionage 
prosecution on the FBI Director's interest in opening a LEGAT 
in Beijing was a factor in the investigation. Be careful how we 
investigate the Wen Ho Lee case because we want to open an 
office in Beijing. Good Lord. You can understand why the 
Bellows report summarizes ``the stark choice'' of concern to 
certain senior FBI agents ``that it might come down to doing 
without Beijing LEGAT or espionage prosecution.'' It should be 
an easy choice. ``Finally, this must be said: NSD permitted 
CID's admittedly legitimate concerns about [redacted] 
sensitivities to undermine a critical FBI investigation about 
[redacted] espionage.''
    We are fortunate today to have former Commissioner of the 
U.S. Customs Service, Raymond Kelly, to talk to us about 
structural problems he encountered at that law enforcement 
agency and what he did about them.
    Another key area of concern about FBI management is in the 
area of security and information technology. In a letter last 
month to Chairman Sensenbrenner of the House Judiciary 
Committee, former FBI Director Freeh conceded that the FBI's 
computer systems were ``obsolete'' and that its approach to 
planning and funding for improvements was ``inadequate.'' At a 
briefing last week, the FBI told our Committee staff that there 
are no less than 15 areas where the FBI's internal security 
must be improved.
    We will be hearing today from Mr. Bob Dies. Mr. Dies is a 
former executive at IBM who has been hired by the FBI as an 
assistant director to take on the herculean task of upgrading 
its information technology. Mr. Dies will tell us what he has 
discovered since he took the job.
    We are also going to hear from Mr. Ken Senser, who has 
recently been brought in from the Central Intelligence Agency 
to be a Deputy Assistant Director of the FBI in charge of 
internal security. Internal security at the FBI is obviously a 
major concern, especially in the wake of the egregious breach 
of internal security in the Hanssen case, and we appreciate Mr. 
Senser's helping to keep the Committee informed.
    A final management issue that our hearing will address is 
how the FBI handles its internal discipline. It is important 
that the process be perceived as fair. A perception that 
credible allegations of misconduct are being whitewashed or 
that a double standard of discipline is being applied in which 
senior supervisors get lighter punishment than line agents will 
erode confidence from the public. Moreover, those who 
investigate allegations of misconduct must know they are free 
to do their jobs and pursue their investigation wherever it may 
lead without any fear of retaliation.
    Some of the most disturbing testimony at our last hearing 
was given by Senator Danforth, who told of two FBI agents who 
believed they had been retaliated against for their work on the 
Ruby Ridge investigation and the Waco investigation. At the 
heart of these management flaws is how the agency deals with 
those employees.
    Senator Danforth said, ``I do believe the FBI has an 
unwritten policy of doing nothing to embarrass the FBI. The 
agency has a great deal of leverage over its agents and 
significant ability to punish `troublemakers,' with its power 
of promotions and job assignments. Therefore I believe that 
there is a real reluctance on the part of most FBI employees to 
report wrongdoing. . .The reality for an employee who loves his 
job is that there is no realistic protection from the isolation 
and rejection which can result from reporting wrongdoing within 
the organization or exposing it to criticism. . .The consistent 
message from the Department of Justice and the FBI should be 
that careers in the agency can survive mistakes, because 
everyone makes mistakes, but careers cannot survive coverups. 
Candor must be the highest value at the FBI.'' I couldn't agree 
more with Senator Danforth. The Committee will hear first-hand 
accounts from current and retired FBI agents about their 
experiences.
    In the Ruby Ridge report, almost 6 years ago, we observed 
that ``FBI agents conducting internal reviews were not 
adequately insulated from the subjects of their review.'' We 
noted instances of ``friends reviewing friends' conduct and the 
subjects of the reviews later sitting on the promotion boards 
of the very agents who reviewed their conduct.''
    I think we are going to hear that this ``good old boy'' 
network has been allowed to persist. Some may find it 
surprising to learn that the final recommendations on 
punishment for those agents involved in the aftermath of Ruby 
Ridge were issued quietly and without fanfare. When? Almost 9 
years later, in January 2001.
    The decision was that no disciplinary action should be 
taken against any FBI agents involved in the Ruby Ridge matter 
beyond those lower-level employees already disciplined. The 
conclusion was contrary to the well-supported findings and 
recommendations of the Office of Professional Responsibility of 
the Department of Justice, as well as the Justice Management 
Division's own Task Force on Ruby Ridge. They had recommended 
sanctions against four supervisory FBI agents.
    The JMD decision disregarded most of the recommendations 
and acknowledged the allegations against only two FBI agents 
who had been found by the investigators to have failed to 
ensure the integrity of interview notes or to conduct a 
complete or adequate investigation of Ruby Ridge. Because the 
Assistant Attorney General for Administration was unwilling to 
ascribe improper motive to the employees, no discipline came 
out.
    We are not trying to reopen old investigations, but we are 
showing that things have to be done differently. And we 
remember that the great majority of FBI agents bear no 
responsibility for any of the problems we have been discussing.
    Former Agent John Werner, who will be testifying on our 
second panel, states that the majority of the members of the 
Senior Executive Service at the FBI are ``sincere, dedicated 
law enforcement professionals,'' and that his observations of 
improper influence and misconduct relate only to a minority. I 
agree with him. We shouldn't forget the debt we owe to the FBI 
or the very thankless jobs that so many of them take on.
    I would conclude with what Judge Webster said. He said that 
in the courtyard of the FBI there is this inscription: ``The 
key to effective law enforcement is cooperation at all levels 
and with the support and understanding of the American 
people.'' The purpose of these hearings is to restore the 
confidence of the American people that the FBI is living up to 
this motto. We want to make the FBI the best it can be.
    [The prepared statement of Senator Leahy follows:]

 Statement of Hon. Patrick J. Leahy, a U.S. Senator from the State of 
                                Vermont

    Today, the Judiciary Committee is holding its second oversight 
hearing on the Federal Bureau of Investigation. Before I address the 
subject of today's hearing, I want to note three significant 
developments concerning the FBI that have taken place in recent days. 
The first is that the President has announced his intention to nominate 
Robert S. Mueller to be the next FBI Director. I have met with Mr. 
Mueller, as I know several other Members of the Committee have, and I 
intend to proceed with his confirmation hearing expeditiously, after 
the President formally sends his nomination to the Senate.
    The second important recent development concerns an issue that was 
at the heart of this Committee's hearing last month: FBI oversight. 
Last Wednesday, the Attorney General issued an order redefining the 
jurisdiction of the Office of Inspector General to give it authority to 
investigate allegations of misconduct by employees of the FBI and the 
Drug Enforcement Administration. As the witnesses at our last hearing 
explained, the scope of the Inspector General's authority over the FBI 
has been a source of recurring controversy that has made FBI oversight 
more difficult for many years. Although the Inspector General statute 
gives the Inspector General broad authority to investigate the FBI, 
various internal rules of Department of Justice have limited that 
authority. In 1992, then-Deputy Attorney General Terwilliger issued an 
order that generally gave the jurisdiction over attorneys and law 
enforcement personnel only to the Justice Department's OPR. The 
Inspector General's authority was broadened in 1994 by then-Attorney 
General Reno, who issued an order superseding the Terwilliger order and 
granting the Inspector general the authority to investigate FBI 
personnel when the investigation was specifically authorized by the 
Attorney General or by a Deputy Attorney General. While this was a big 
step in the right direction, it did not go far enough.
    I commend Attorney General Ashcroft for his wise decision to remove 
the remaining restrictions on the Inspector General's authority. I also 
acknowledge Senator Grassley for his efforts in helping to encourage 
this important reform. However, while the changing of the Justice 
Department's internal rules is certainly a welcome development, I 
believe that we need to make this reform permanent by legislation. We 
should not leave matters in a position where the Inspector General's 
important role in performing FBI oversight could once again be 
frustrated by the stroke of the pen by a future Attorney General.
    The third development was yesterday's announcement by the Attorney 
General about weapons and computers that are missing from the FBI's 
inventory. This audit again underscores some of the management problems 
we are examining through these hearings and that we hope to help 
remedy, and we will discuss this latest example, and what it means, 
with our witnesses today.
    In order for us to understand why the FBI has had the number of 
problems that it has in recent years, it is important to look at how it 
is managed. In recent months, we have seen a number of indications that 
the FBI's management is badly in need of an overhaul. We see the 
results of management failures, for example, in the discovery violation 
in the Oklahoma City bombing case, which led to the delay in carrying 
out the court-ordered execution of Timothy McVeigh. We also see it in 
the FBI's failure for more than 15 years to detect the espionage 
activities of former agent Robert Hanssen, who pleaded guilty to 
selling some of this country's most sensitive classified information to 
the KGB.
    The management problems at the FBI may stem in part from how the 
organization is structured. FBI Headquarters in Washington constantly 
struggles to stay abreast of developments in the FBI's 56 field offices 
and 44 foreign Legal Attache or ``Legat'' offices and to ensure that 
each of these offices is following orders and procedures. It is often 
when field offices ignore or do not fully comply with orders from 
Headquarters that problems happen--for example, in the FBI's belated 
production of documents in the Oklahoma City bombing case. We continue 
to await the outcome of the Justice Department's Inspector General 
review of how this happened in the face of 16 separate orders from 
Headquarters for pre-trial production of these documents.
    The May, 2000, report of the Attorney General's Review Team, headed 
by federal prosecutor Randy Bellows, on The Handling of the Los Alamos 
National Laboratory Investigation of Wen Ho Lee, dissected the 
relationship between FBI Headquarters and the Albuquerque, New Mexico, 
field office and found serious flaws, some of which stem from a fear on 
the part of lower-level FBI agents at Headquarters of being perceived 
as criticizing more senior agents in the field. While the full Bellows 
report remains classified, in response to a request from Senator 
Specter and myself, the Justice Department has provided the Committee 
with an unclassified version of the report. This report documents how 
the National Security Division became aware of the field office's 
``poor handling of the case,'' yet ``took no effective measures to fix 
the problem, even when it was given an opportunity to do so. Instead, 
it simply attempted to run the case from FBI Headquarters, an approach 
that was unmanageable from the start and which would severely handicap 
the investigation.'' (Bellows Report, p. 4).
    When, for example, two extra agents were sent to the field office 
to assist in the Wen Ho Lee investigation but were diverted to other 
investigations, the Assistant Director of the FBI's National Security 
Division was not informed. A Unit Chief in the same Headquarters 
Division explained that ``it would have been `impolitic' to advise [the 
Assistant Director] of the diversion. He said the `culture' of the FBI 
is `very intolerant' of that kind of reporting.'' (Bellows Report, p. 
98). This Unit Chief told another supervisory agent that he should not 
`` `stir the beans' because it would have been inappropriate to `mess 
with a SAC's decision.' '' (Id., at p. 99). He warned ``that you don't 
get ahead in the FBI `if you stab SACs in the back.' '' (Id.). As a 
consequence, the problem of the two agents being diverted remained 
unresolved.
    Periodic inspections provide a significant mechanism for FBI 
Headquarters to check on the progress of cases and communicate, in the 
form of ``interrogatories,'' specific complaints to field offices about 
their handling of cases. Yet the Bellows Team uncovered some dirty 
laundry there, too. A supervisory agent involved in the Wen Ho Lee 
investigation at Headquarters said that ``interrogatories are not, in 
reality, used as an opportunity to complain about a field office: 
`We're never allowed to be candid in interrogatories.' '' (Bellows 
Report, p. 161). This prompted appropriately strong criticism in the 
Bellows Report, which stated: ``If true, if the FBI `culture' does not 
encourage, indeed require, that FBI-HQ personnel be blunt and candid in 
interrogatories, this essentially eviscerates the value of the 
interrogatories. . . .The issue is [redacted] failure to avail itself 
of an institutional mechanism--the inspection process--which is 
specifically designed by the FBI to insure that all significant 
problems in a field office are identified and addressed in an 
inspection.'' (Id. at p. 161, italics in original).
    The Bellows Report concluded that ``[i]f the FBI `culture' 
discourages `full disclosure' in the interrogatories or interviews 
associated with the inspection process, that `culture' needs to be 
altered. All FBI personnel should be advised that the FBI will not 
tolerate anything other than `full disclosure' in the inspection 
process.'' (Bellows Report, p. 774). This recommendation is so patently 
obvious it is shocking that it had to be made. The challenge to the new 
Director and new management team he brings into the FBI will be to make 
sure it happens.
    Even within FBI Headquarters, disputes between the National 
Security Division (NSD) and the Criminal Investigative Division (CID) 
over the Wen Ho Lee investigation appear to have slowed the 
investigation down. In a heavily redacted portion of the Bellows 
Report, we learn that concern over the effect of an espionage 
prosecution on the FBI Director's interest in opening a LEGAT in 
Beijing were a factor in the investigation. The Bellows Report 
summarizes ``the stark choice'' of concern to certain senior FBI agents 
``that it might come down to doing without Beijing legat or espionage 
prosecution. . . Finally, this must be said: NSD permitted CID's 
admittedly legitimate concerns about [redacted] sensitivities to 
undermine a critical FBI investigation about [redacted] espionage.'' 
(Bellows Report, p. 183-84).
    This is an area where we are lucky to have former Commissioner of 
the U.S. Customs Service, Raymond W. Kelly, here to talk to us about 
structural problems he encountered at that law enforcement agency and 
what he did about them.
    Another key area of concern about FBI management is in the area of 
security and information technology. In a letter last month to Chairman 
Sensenbrenner of the House Judiciary Committee, former FBI Director 
Freeh conceded that the FBI's computer systems were ``obsolete'' and 
that its approach to planning and funding for improvements was 
``inadequate.'' At a briefing last week, the FBI told our Committee's 
staff that there are no less than 15 areas where FBI's internal 
security must be improved. We will be hearing today from Mr. Bob Dies, 
a former executive at IBM who has been hired by the FBI as an Assistant 
Director to take on the Herculean task of upgrading its information 
technology. Mr. Dies will tell us what he's discovered since he took on 
this job and how his efforts to upgrade the FBI's computer systems are 
progressing. We will also hear from Mr. Ken Senser, who has recently 
been brought in from the Central Intelligence Agency to be a Deputy 
Assistant Director of the FBI in charge of internal security. Internal 
security at the FBI is obviously a major concern in the wake of the 
Hanssen case, and we appreciate Mr. Senser's helping to keep the 
Committee informed in this critical area.
    A final management issue that our hearing will address is how the 
FBI handles its internal discipline. A well-managed law enforcement 
agency needs to deal appropriately with allegations of misconduct by 
its agents and employees. Further, it is important that the process be 
perceived as fair by both its employees and the American public at 
large. A perception that credible allegations of misconduct are being 
whitewashed, or that a double standard of discipline is being applied 
in which senior supervisors get lighter punishment than line agents for 
the same offenses, will erode public confidence and demoralize the 
agency's own employees. Morever, those who investigate allegations of 
misconduct must know that they are free to do their jobs and pursue 
their investigation wherever it may lead, without fear of retaliation.
    Some of the most disturbing testimony at our last hearing was given 
by Senator Danforth, who told of two FBI agents who believed that they 
had been retaliated against for their work on the Ruby Ridge 
investigation and the Waco investigation. In our second panel of 
witnesses, we will be hearing from those two agents, along with two of 
their colleagues. They will be giving us a unique insider's perspective 
on the FBI's internal disciplinary process.
    The purpose of these hearings is not to re-hash old mistakes or to 
re-open old investigations. This is not a re-investigation of what 
happened at Waco, Texas. The review so ably conducted by former Senator 
Danforth is the definitive investigation of that matter. Nor are these 
hearings intended to be a re-investigation of what happened at Ruby 
Ridge, Idaho, since that matter was thoroughly reviewed by this 
Committee under the leadership of Senator Specter and Senator Kohl in 
1995. Nevertheless, we are going to hear about both those events today. 
How the FBI handled the aftermath of both those tragedies can 
illuminate the management flaws that persist within the Bureau and must 
be corrected.
    At the heart of these management flaws is how the agency deals with 
those employees who are tasked with examining the FBI itself. Senator 
Danforth identified this crucial problem in response to my written 
questions. He said:

        ``I do believe the FBI has an unwritten policy of doing nothing 
        to embarrass the FBI. The agency has a great deal of leverage 
        over its agents and significant ability to punish 
        `troublemakers,' with its power of promotions and job 
        assignments. Therefore I believe that there is a real 
        reluctance on the part of most FBI employees to report 
        wrongdoing. . . .The reality for an employee who loves his job 
        is that there is no realistic protection from the isolation and 
        rejection which can result from reporting wrongdoing within the 
        organization or exposing it to criticism. . . .The consistent 
        message from the Department of Justice and the FBI should be 
        that careers in the agency can survive mistakes, because 
        everyone makes mistakes, but careers cannot survive coverups. 
        Candor must be the highest value at the FBI.''

    The Committee will hear first-hand accounts from current and 
retired FBI agents about their experiences on the front-line of 
conducting internal investigations of the FBI.
    A related issue is how, once an internal investigation has been 
completed, the FBI resolves the matter and, specifically, decides who 
is culpable and what the punishment, if any, should be. In the Ruby 
Ridge report filed by the Subcommittee on Terrorism, Technology and 
Government Information almost six years ago, we observed that ``FBI 
agents conducting internal reviews were not adequately insulated from 
the subjects of their review.'' We further noted instances ``of friends 
reviewing friends' conduct and the subjects of the reviews later 
sitting on the promotion boards of the very agents who reviewed their 
conduct.'' In short, we warned that ``[t]his has created the impression 
that a small group of insiders review the conduct of the FBI, punishing 
lower level, `outsider' FBI agents and protecting higher-level, inside-
track FBI agents.''
    Unfortunately, we will hear that this ``good old boy'' network has 
been allowed to persist. Some may find it surprising to learn that the 
final recommendations on punishment for those agents involved in the 
aftermath of Ruby Ridge were issued quietly and without fanfare almost 
nine years after that 1992 tragedy, in January, 2001. The decision, 
made by the Justice Management Division of the Department of Justice 
over three years after being tasked to evaluate recommendations for 
discipline, was that no disciplinary action should be taken against any 
FBI agents involved in the Ruby Ridge matter beyond those lower-level 
employees already disciplined in January, 1995. This conclusion was 
contrary to the well-supported findings and recommendations of the 
Office of Professional Responsibility of the Department of Justice as 
well as the Justice Management Division's own Task Force on Ruby Ridge. 
Those offices recommended sanctions against four supervisory FBI 
agents. JMD's Task Force also recommended that the discipline 
previously imposed on three lower-level agents be rescinded because of 
procedural defects in the original investigation and exculpatory 
information that had subsequently been developed.
    Nevertheless, the JMD decision disregarded most of these 
recommendations and acknowledged the allegations against only two FBI 
agents, who had been found by the investigators to have failed to 
insure the integrity of interview notes or to conduct a complete or 
adequate investigation of Ruby Ridge. Yet, because the Assistant 
Attorney General for Administration was unwilling to ascribe improper 
motive to the employees, no discipline was imposed.
    Again, our purpose is not to reopen old investigations, and 
fairness to those agents who were under investigation prohibits a more 
specific discussion of the case. The documents reflecting these 
decisions are not public. Nevertheless, the adjudication conducted in 
the Ruby Ridge investigation shows precisely why some have come to 
question whether there is a double standard among FBI agents on matters 
of internal discipline.
    Of course, it is always important to remember that the great 
majority of FBI agents bear no responsibility for any of the problems 
we have been discussing. Former agent John Werner, who will be 
testifying on our second panel, states that the majority of the members 
of the Senior Executive Service at the FBI are ``sincere, dedicated law 
enforcement professionals'' and that his observations of improper 
influence and misconduct relate only to a vocal minority of the Senior 
Executive Service. We should never forget the debt that we owe to all 
of the FBI agents who do their jobs fairly and professionally and who 
risk their lives in service to this country.
    The American people and this Committee owe a debt of gratitude to 
the courage of the agents who are with us to share their experiences 
and observations today. The thankless assignments they have accepted 
within the Bureau were taken and performed by them at considerable 
personal and professional cost. Their service to the nation and to the 
bedrock interests of the Bureau itself are in the best tradition 
selfless public service and of the bravery that is the centerpiece of 
the FBI emblem.
    In answers to the written questions I submitted after our last 
hearing, Judge Webster made an interesting observation. He said that in 
the courtyard at the FBI headquarters in Washington, there is the 
following inscription:

        ``The key to effective law enforcement is cooperation at all 
        levels and with the support and understanding of the American 
        people.''

    The purpose of these hearings is to restore the confidence of the 
American people that the FBI is living up to this motto. Our purpose is 
to make the FBI the best that it can be.

    Chairman Leahy. What we are going to do this morning is we 
will interrupt for Senator Hatch when he is able to get here, 
but I am delighted that we have, first, Ray Kelly, who 
encountered a number of matters when he came into Customs after 
a long career in law enforcement.
    Senator Schumer?
    Senator Schumer. Mr. Kelly is a great New Yorker and I 
wanted to join you, Mr. Chairman, in welcoming another great 
New Yorker before this panel.
    Chairman Leahy. Well, thank you. I appreciate that. I have 
known Ray Kelly for a long, long time, wearing a number of 
different hats, including being with him in Haiti and spending 
a couple of days with him down there. We also have mutual 
friends that go back to his Marine days and my association with 
friends of the Marine Corps and my son's time in the Marine 
Corps.
    Mr. Kelly?

 STATEMENT OF RAYMOND W. KELLY, SENIOR MANAGING DIRECTOR, BEAR 
                  STEARNS, NEW YORK, NEW YORK

    Mr. Kelly. Thank you, Mr. Chairman. Thank you, Senator, for 
those kind remarks. Members of your Committee, thank you for 
your invitation to be here today.
    I came to Federal law enforcement after a 30-year career in 
the New York City Police Department, and I also served in the 
United States Marine Corps. The one thing both organizations 
have in common is that they are very hierarchical. While both 
encourage initiative on the part of their front-line troops, 
the fact remains that both organizations insist on adherence to 
a strict chain of command. They also maintain tight spans of 
control.
    For example, the span of control in the New York City 
Police Department would begin with sergeants and five police 
officers reporting to lieutenants, lieutenants reporting to 
captains, captains to inspectors, inspectors to chiefs 
throughout the top of the organization.
    I mention this because when I came to Federal law 
enforcement, first as Under Secretary of the Treasury for 
Enforcement and later as Commissioner of U.S. Customs, I was 
struck by the relatively loose span of control and the 
horizontal structure of enforcement agencies in the Federal 
sector.
    Where my municipal and Marine Corps experience was very 
hierarchical, Federal law enforcement tended to be more 
lateral. For example, when I arrived at Customs, there were 20 
special agents-in-charge, scattered across the United States, 
100 resident agent-in-charge offices, and 55 more attaches in 
24 foreign countries, all reporting to one assistant 
commissioner in Washington. The ratio in that span of control 
was more than surprising; it was, in my judgment, unmanageable, 
certainly on a day-to-day basis. The result was that the 
investigative arm of the Customs Service was balkanized under 
the various special agents-in-charge. Management in Washington 
was often uninformed.
    To correct this situation, we divided the country into 
three administrative regions--East, Central and West. The 
special agents-in-charge of each region had to report to a new 
director for each of the regions. Those three directors, in 
turn, reported to the assistant commissioner. Our attaches 
abroad were directed to report to a new deputy in the existing 
Office of Foreign Operations.
    The result was a much more manageable span of control. The 
assistant commissioner in Washington could get a quick picture 
of what was happening nationally and internationally by talking 
to 3 people who reported to him, instead of over 40. Similarly, 
with three deputies, the assistant commissioner could execute 
and follow up on policy, making certain his orders were not 
only transmitted but also complied with. In addition, 
inspections on a much more frequent basis could be conducted.
    With big, widely dispersed organizations, in my judgment, 
it is not enough for headquarters to send teams to the field to 
conduct periodic inspections every few years. There should be 
daily oversight, and a rational span of control allows that to 
happen.
    The balkanization I described was not limited to the 
Customs Office of Investigations. It affected the Office of 
Field Operations as well, where Customs personnel were assigned 
to 301 ports of entry located across the country. For a time, 
individual port directors tended to set their own policy. That 
led to the phrase ``port-shopping'' by brokers and others, who 
found that the rigor in which Customs regulations were being 
enforced varied from port to port.
    A policy of ``power to the ports'' was encouraged for a 
time as managers tried to apply to the Federal Government the 
devolution of power that was becoming popular in American 
business. The problem is Federal law enforcement is not a 
business enterprise. Its employees are responsible for 
enforcing the law, not making sales quotas. They are armed and 
have authority to conduct personal searches, make arrests, and 
use deadly force.
    That kind of authority demands tight spans of control, 
close supervision, a rigorous chain of command, and oversight. 
The lack of it caused problems besides port-shopping. 
Internally, the lack of consistently executed policy led to 
complaints of unevenness and favoritism in disciplinary 
procedures and promotions.
    Discipline for the same transgression, for example, might 
be dispensed differently, depending on the region of the 
country or who an employee knew within the Service. We changed 
that by establishing an agency-wide disciplinary review board 
with rotating membership.
    One of the problems Customs experienced with the public was 
inconsistency in the way in which passengers arriving at 
various international airports were subject to searches. 
Customs has broad authority to detain and search travelers, and 
did so. What was missing was a coherent policy that was closely 
supervised and uniformly adhered to. Once that policy was in 
place and closely supervised, the number of searches of law-
abiding travelers plummeted and the number of seizures of 
narcotics and other contraband increased. The authority never 
changed. What changed was how we managed it.
    I don't mean to single out the Customs Service. It happens 
to be the Federal agency that I am most familiar with. As Under 
Secretary of the Treasury, I saw similar issues with the other 
Treasury enforcement bureaus. I realize that some of these 
management problems are inherent to the geographical reach of 
Federal law enforcement agencies.
    Where none of the 40,000 police officers in the New York 
City Police Department are normally more than an hour or so 
away from headquarters, Federal law enforcement has thousands 
of agents scattered across multiple time zones, and even 
continents. That kind of geographic diversity imposes its own 
management problems. Management of such far-flung personnel and 
resources will tend to devolve to onsite middle managers unless 
strong leadership, supported by a workable management 
structure, exerts itself in Washington.
    To help us know what was happening on a daily basis, we 
established a 24-hour operations center, to which all officers, 
national and around the world, were required to report 
significant events. The incidents would be briefed around the 
same table each morning at 8:30 a.m. to the headquarters 
executive staff. This way, my executive staff got a good 
snapshot of what was happening agency-wide and not just in 
their own corner of it.
    The head of the agency must be persistent in demanding to 
know what is happening in the field and in making certain 
national policy is carried out there. Otherwise, power will 
devolve in a vacuum of leadership to the entrenched careerists 
in the field, where policy may be applied unevenly, if at all.
    With the advantage of a 10-year term, however, the FBI 
Director is less prone to be frustrated by those who might try 
to resist his leadership by waiting him out in hopes of a 
change in administration. Congress may want to consider 
applying terms of office for the heads of other Federal law 
enforcement agencies.
    Finally, I want to comment on one very important issue 
related to the management of any Federal law enforcement 
agency, any police agency for that matter, and that is 
integrity and the internal affairs function needed to protect 
it.
    Internal affairs tends to get short shrift in law 
enforcement. Police critics often call for the function to be 
handled independently by an outside agency. Law enforcement 
executives often fail to give internal investigative components 
the attention and resources they need.
    I believe that every law enforcement agency needs a robust 
internal investigative function within its ranks. While the 
inspectors general and other outside entities can play an 
oversight role, nothing is more effective in preventing and 
pursuing corruption within law enforcement than a credible 
internal affairs unit. It takes a good insider to catch a bad 
one, and toward that end internal affairs needs to be staffed 
by the best and brightest investigators available.
    Service in internal affairs in an ideal world should be 
mandatory, with rotation through internal affairs as part of 
the promotion track. The head of internal affairs should report 
directly to the head of the law enforcement agency, not through 
a deputy, and he or she should report on a daily basis.
    The internal investigative function will never be popular. 
That is why it is important that internal affairs is fully 
supported from the top, with total access to the head of the 
agency, staffed with the best of personnel and supported with 
the best of equipment.
    An organization is only as good as the people who are 
recruited and trained to work for it. Federal law enforcement, 
and the FBI in particular, has a reputation for attracting 
highly skilled and highly motivated individuals. That continues 
to be true and it is a major plus for the FBI.
    The challenge is not who to manage, but how to manage them, 
how to manage a large, far-flung workforce with a broad and 
complex law enforcement mission. That is a heavy lift for 
anyone. To lighten the load and manage effectively, I would 
recommend focusing on the four essentials that I have outlined 
today: first, impose a strict managerial hierarchy; second, 
maintain a tight span of control; third, inspect regularly to 
make certain policy is being implemented in the field; and, 
fourth, ensure integrity through a robust internal affairs 
program within the agency.
    Thank you, Mr. Chairman, and I am available to answer 
questions.
    [The prepared statement of Mr. Kelly follows:]

Statement of Raymond W. Kelly, Senior Managing Director, Bear Stearns, 
                           New York, New York

    Mr. Chairman, members of the Committee, thank you for this 
opportunity to testify.
    I came to Federal law enforcement after a 30-year career in the New 
York City Police Department. I also served in the United States Marine 
Corps. The one thing both organizations have in common is that they are 
very hierarchical. While both encourage initiative on the part of the 
their front line troops, the fact remains that both organizations 
insist on adherence to a strict chain of command. They also maintain 
tight spans of control. For example, the span of control in the New 
York City Police Department begins with a sergeant and five police 
officers, lieutenants reporting to captains and so on through to the 
very top ranks of the organization.
    I mention this because when I came to Federal law enforcement, 
first as Under Secretary of the Treasury for Enforcement and later as 
Commissioner of U.S. Customs, I was struck by the relatively loose span 
of control and the horizontal structure of enforcement agencies.
    Where my municipal and Marine Corps experience was very 
hierarchical, Federal law enforcement tended to be more lateral. For 
example, when I first arrived at Customs, there were 20 Special Agents 
in Charge scattered across the United States, 100 resident agent in 
charge offices and 55 more attaches in 24 foreign countries--all 
reporting to one assistant commissioner in Washington. The ratio in 
that span of control was more than surprising. It was unmanageable; 
certainly on a day-to-day basis. The result was that the investigative 
arm of the Customs Service was number of searches of law-abiding 
travelers plummeted, and the number of seizures of narcotics and other 
contraband increased.
    Balkanized under the various Special Agents in Charge. Routin, 
centralized management in Washington was often weak and uninformed. To 
correct the situation, we divided the country into three administrative 
regions: East, Central and West. The Special Agents in Charge in each 
region had to report to a new director for each of the regions. Those 
three directors, in turn, reported to the assistant commissioner. Our 
attaches abroad were directed to report to a new deput in the existing 
office of Foreign Operations.
    The result was a much more manageable span of control. The 
assistant commissioner in Washington could get a quick picture of what 
was happening nationally and internationally by talking to three people 
who reported to him, instead of over 40. Similarly, with three 
deputies, the assistant commissioner could execute and follow up on 
policy, making certain his orders were not only transmitted, but also 
complied with. In addition, inspections on a much more frequent basis 
could be conducted.
    With big, widely dispersed organizations, it is not enough for 
headquarters to send teams to the field to conduct periodic inspections 
every few years. There should be daily oversight. And a rational span 
of control allows that to happen.
    The balkanization I described was not limited to the Customs Office 
of Investigation. It affected the Office of Field Operations as well, 
where Customs personnel were assigned to 301 ports of entry located 
across the country. For a time, individual port directors tended to set 
their own policy. That led to ``port shopping'' by brokers and others 
who found that the rigor in which Customs regulations were being 
enforced varied from port to port.
    This policy of ``power to the ports'' was encouraged for a time, as 
managers tried to apply to the Federal government the devolution of 
power that was becoming popular in American business.
    The problem is Federal law enforcement is NOT a business 
enterprise. Its employees are responsible for enforcing the law, not 
making sales quotas. They are armed and have authority to conduct 
personal searches, make arrests and use deadly force.
    That kind of authority demands tight spans of control, close 
supervision, regorous chain of command and oversight.
    The lack of it caused problems besides port shopping.
    Internally, the lack of consistently executed policy led to 
complaints of unevenness and favoritism in disciplinary procedures and 
promotions.
    Discipline for the same transgression, for example, might be 
dispensed differently depending on the regions of the country or whom 
an employee knew within the Service. We changed that by we establishing 
an agency-wide Disciplinary Review Board with rotating membership.
    One of the problems Customs experienced with then public was 
inconsistency int he way in which passengers arriving at various 
international airports were subjected to searches. Customs has broad 
authority to detain and search travelers, and did so. What was missing 
was a coherent policy that was closely supervised and uniformly adhered 
to. Once that policy was in place and closely supervised the number of 
searches of law-abiding travelers plummeted, and the number of seizures 
of narcotics and other contraband increased.
    The authority never changed. What changed was how we managed it.
    I don't mean to single out the Customs Service. It happens to be 
the Federal agency I'm most familiar with. As Under Secretary of the 
Treasury, I saw similar issues with the other Treasury enforcement 
bureaus.
    I realize that some of these management problems are inherent to 
the geographical reach of Federal law enforcement agencies.
    Where none of the 40,000 police officers in the New York City 
Police Department is normally more than an hour or so away from 
headquarters, Federal law enforcement has thousands of agents scattered 
across multiple time zones and even continents.
    That kind of geographic diversity imposes its own management 
problems.
    Management of such far-flung personnel and resources will tend to 
devolve to onsite middle managers unless strong leadership, supported 
by a workable management structure, exerts itself in Washington.
    To help us know what was happening on a daily basis, we established 
a 24-hour operations center to which all offices national and around 
the world were required to report significant incidents.
    The incidents would be briefed around the same table each morning 
at 8:30 a.m. to headquarters executive staff. This way, my executive 
staff got a good snapshot of what was happening agency-wide and not 
just to their corner of it.
    The head of the agency must be persistent in demanding to know what 
is happening in the field and in making certain national policy is 
carried out there.
    Otherwise, power will devolve in a vacuum of leadership to the 
entrenched careerists in the field, where policy may be applied 
unevenly, if at all.
    With the advantage of a 10-year term, however, the FBI director is 
less prone to be frustrated by those who might try to resist his 
leadership by ``waiting him out'' in the hopes of a change in 
administrations. Congress may want to consider applying terms of office 
for the heads of other Federal law enforcement agencies.
    Finally, I want to comment on one very important issue related to 
the management of any Federal law enforcement agency; any police 
agency, for that matter. And that is integrity, and the internal 
affairs function needed to protect it. Internal affairs tends to get 
short shrift in law enforcement. Police critics often call for the 
function to be handled independently by an outside agency. Law 
enforcement's executives often fail to give internal investigative 
components the attention and resources it needs. I believe that every 
law enforcement agency needs a robust internal affairs function within 
its ranks. While the inspector generals and other outside entities can 
play an oversight role, nothing is more effective in preventing and 
pursuing corruption within law enforcement than a credible Internal 
Affairs Unit. It takes a good insider to catch a bad one. And, toward 
that end, internal affairs needs to be staffed by the best and 
brightest investigators available. Service in internal affairs ideally 
should be mandatory, with rotation through internal affairs as part of 
the promotion track. The head of internal affairs should report 
directly to the head of the law enforcement agency--not through a 
deputy--and he or she should report on a daily basis. The internal 
affairs function will never be popular. That's why it is important that 
internal affairs is fully supported from the top, with total access to 
the head of the agency, staffed with the best of personnel and 
supported with the best of equipment.
    An organization is only as good as the people who are recruited and 
trained to work for it. Federal law enforcement, and the FBI in 
particular, has a reputation for attracting highly skilled and highly 
motivated individuals. That continues to be true, and it is a major 
plus for the FBI. The challenge is not who to manage, but how to manage 
them. How to manage a large, far-flung workforce with a broad and 
complex law enforcement mission. That's a heavy lift for anyone. To 
lighten the load and manage effectively, I would recommend focusing on 
the four essentials I've outlined today: First: Impose a strict 
managerial hierarchy. Second: Maintain tight span of control. Third: 
Inspect regularly to make certain policy is being implemented in the 
field. And Fourth: Insure integrity through a robust internal affairs 
program within the agency. Thank you, and I'll be happy to try to 
answer any of your questions.

    Chairman Leahy. Thank you very much, Mr. Kelly.
    Mr. Dies, I realize I mispronounced your name earlier and I 
apologize for that. I am delighted to have you here. You have 
spent, I believe, a year now with the FBI.
    Mr. Dies. A year this week.
    Chairman Leahy. A year this week. Aren't you lucky to get 
the chance to be here to celebrate that year's anniversary?
    Go ahead, please.

   STATEMENT OF BOB E. DIES, ASSISTANT DIRECTOR, INFORMATION 
     RESOURCES DIVISION, FEDERAL BUREAU OF INVESTIGATION, 
                        WASHINGTON, D.C.

    Mr. Dies. Thank you. I have prepared a statement for the 
record. I can read it or you can accept it and I will comment 
on it.
    Chairman Leahy. Why don't you comment on it and we will put 
the whole statement in the record? Please comment on it.
    Mr. Dies. As you mentioned, I was with IBM for 30 years. I 
retired--
    Senator Sessions. Mr. Chairman, has his testimony been made 
a part of the record?
    Chairman Leahy. It will be part of the record, yes.
    Senator Sessions. I just haven't received it. I don't think 
I have it.
    Chairman Leahy. I beg your pardon?
    Senator Sessions. I don't think I have it. Do others have 
it?
    Chairman Leahy. I had assumed we had it and I apologize for 
that.
    Mr. Dies. I am happy to go through it, if you wish.
    Chairman Leahy. I had assumed it was already in here.
    Senator Sessions. You know, sometimes we have people who 
are slow to get their statements in.
    Chairman Leahy. I am advised by the staff it arrived just 
this morning and we just barely got it.
    Senator Sessions. Well, that is a problem. I think if we 
have a rule that it is supposed to be in, Mr. Chairman.
    Chairman Leahy. It was supposed to have been in before now.
    Senator Sessions. Well, anyway, I will listen carefully.
    Chairman Leahy. To help Senator Sessions, why don't you 
give the statement, Mr. Dies? Give the statement as you have 
prepared it, in full.
    Mr. Dies. OK, good morning, Mr. Chairman. As you said, I 
have just completed 1 year with the FBI after a career in the 
private sector.
    Former Director Freeh, I believe, understood that the FBI 
technology infrastructure was not modern, and he asked me to 
join me specifically to review what they had, prioritize the 
problems, recommend the fixes and, if possible, begin 
implementing the fixes in an orderly fashion.
    In the past decade, the Bureau has made significant 
investments in technology, but for certain programs 
specifically in support of State and local law enforcement with 
systems such as the Fingerprint Identification System, the 
National Crime Information System, which, of course, reports 
whether a car is stolen or an individual is a felon, and so 
forth.
    The FBI has also invested in technology for specific crimes 
that are of national interest, such as crimes against children 
in a program they call Innocent Images, and in DNA data bases 
for violent offender notification, known as CODIS, and the 
protection of our economic and physical infrastructure, known 
as the National Infrastructure Protection Center. What we need 
to do now is invest in the tools and support to satisfy the 
basic investigative needs of our special agents and their 
support personnel.
    Let me give you a quick overview of what I will be 
testifying to this morning. One, the FBI knows that its 
information technology needs repair. Two, this past year we 
have initiated some changes in programs and management to begin 
correcting the basis IT problems, technology problems, and to 
position the FBI for the future. That effort is a foundation 
program we call Trilogy.
    Three, Congress has supported us in the Trilogy effort both 
with funding and with active and thoughtful attention by this 
and other Committees, for which, as someone new to Government 
services, I am personally grateful.
    Four, we are on schedule with costs and we will implement 
the Trilogy program as authorized. Fifth, in light of recent 
events, we need to improve the FBI's security operations and 
other areas such as document management.
    Finally, for security, we have created a single point of 
contact and accountability reporting to the Deputy Director, 
and we have recruited a career security executive, with the 
help of the CIA--Ken Senser, to my left. He will speak after I 
finish.
    While we have taken steps to begin repairing our IT 
systems, the systems are, in fact, in need of significant 
repair and modernization. So I appreciate your counsel and 
support in those activities.
    The current situation: The FBI's job, of course, is 
investigating. Technology and computers are supposed to be 
tools for the FBI to use to accomplish its job. The Bureau's 
future ability to deter and prevent crimes requires the use of 
modern information technology.
    For a variety of reasons, the FBI information technology 
has had no meaningful improvement in well over 6 years, and 
parts of the system are much older. More than half of the 
Bureau's desktops are between 4 and 8 years old. They cannot 
run today's basic software, which means many of the agents 
accessing FBI data can't use the basic ease-of-use features--
point and click, using a mouse, et cetera--and the frustration 
that creates is enormous.
    The majority of a our smaller offices are connected to our 
internal network that speeds the equivalent of a 56K modem, 
which is, for those that use technology, a speed less than many 
of your children would use at home to connect to the Internet.
    The agents themselves are unable to electronically store 
much of the information that they have about their case in our 
investigative data bases, including photographs, graphical 
information and tabular data. Fundamentally, at the dawn of the 
21st century, the FBI is asking its agents and support 
personnel to do their jobs without the tools other companies 
use or that you and I would use at home.
    Our Trilogy project is a program you approved. It is a 36-
month program to do three things. First, in the network side, 
communications between our facilities, it will, in fact, 
provide high-speed links between the FBI locations. Second, we 
will replace the hardware and software within each office so 
that the employee is, in fact, linked at their desk to the 
information in the FBI. Finally, we have identified five 
specific applications which we will significantly enhance so 
that they can, in fact, do their casework in a more orderly and 
productive manner.
    Trilogy is structured to enhance the investigative ability 
of the agents and support personnel. It will provide the basic 
resources and fundamental tools the FBI needs to support their 
investigations. It will provide basic relief for the 
shortcomings I just mentioned. It is a necessary foundation 
upon which the other technologies can be added. We have awarded 
these contracts and the programs are in process.
    The Trilogy program enables us to have a workable system. 
It will not by itself give the FBI a world-class, state-of-the-
art system. It does give us a foundation upon which we can 
build and it is the necessary first step toward state-of-the-
art. The other components of a state-of-the-art system cannot 
be implemented without, in fact, the foundation. You can't 
build a house without a firm foundation, and for practical 
purposes Trilogy is that foundation.
    We will have more to do than just the Trilogy project. We 
need to provide our investigative teams with collaborative 
tools, with better communication with other law enforcement 
agencies, with the means to know the collective experiences of 
the whole FBI so that they can always use the best practices 
that have been developed. We are going to also need to work on 
the basic plumbing, the financial, accounting and personnel 
systems that were put in place in the FBI in the 1980's.
    However, our most pressing need has come to light as a 
result of the investigative work done to bring about the arrest 
of Robert Hanssen. Our security operations must be 
strengthened. Improved security is the most pressing need and 
the major focus area since the arrest of Robert Hanssen.
    The FBI has been active in working on its security 
problems. The Director created a task force in March of 
assistant directors to review FBI policies and procedures. He 
asked me to lead that task force, and by April we had made four 
specific recommendations that I would like to comment on.
    First, the task force recommended establishing overall 
accountability for security in a single place, having a single 
functional responsibility, someone who knows all of the 
required piece parts to the security puzzle. This has been 
done. The Security Program Office has been reorganized. We have 
asked Ken Senser, an 18-year career security and 
countermeasures executive from the CIA, to lead that operation 
and cause the change required.
    Secondly, security encompasses more than just the 
technology it uses. You need to have accountability. You need 
to have procedures and policies and people in charge and 
accountable for implementing the procedures and policies. The 
policy management system to go with the new security system is 
being addressed and they have agreed to put it in place.
    Third, we found from the Department of Defense that a 
primary deterrent to the insider threat is, in fact, education 
and awareness of the basic people within the Bureau. So an 
aggressive program for education and training was begun.
    Finally, the task force recommended that we work with the 
new security program executive, Mr. Senser in this case, to 
properly prioritize, rank and identify the changes which had to 
be made Bureau-wide for the security program to be effective.
    The information used for these policies and procedures is 
being developed as rapidly as possible, with the constraint of 
getting it right. Proposed solutions will be structured to 
incorporate additional recommendations that may come from the 
Webster Commission. However, it is prudent for us not to wait 
for the Webster Commission final report before we begin.
    In summary, our infrastructure today for technology is in 
need of serious repair and our approach to IT planning and 
funding, as you pointed out, Mr. Chairman, has been less than 
adequate. The infrastructure upgrade program which we call 
Trilogy is a significant first step, but it is a first step of 
a series of steps that need to be taken.
    Recent public events clearly indicate a need to quickly go 
beyond the infrastructure with Trilogy and incorporate state-
of-the-art IT security processes and a world-class records 
management system. Those would be our first two additional 
priorities. The needs for other systems would have to wait on 
those.
    Such an effort requires continual commitment to change at 
the Bureau, and although I have only been there for a year, I 
believe the Bureau can make those changes, if asked. Such an 
effort also requires a continual commitment from the Senate and 
from the House to support us in the required investments.
    Mr. Chairman, I appreciate the opportunity to address the 
Committee. I look forward to your continued interest, and with 
that I would like to introduce Ken Senser, who, as I said, is 
the CIA executive who was detailed to the FBI to lead these 
security changes.
    [The prepared statement of Mr. Dies follows:]

  Statement of Bob E. Dies, Assistant Director, Information Resources 
      Division, Federal Bureau of Investigation, Washington, D.C.

    Good Morning, Chairman Leahy, Senator Hatch and other members of 
the Committee. My name is Bob Dies. And I have just completed one year 
with the FBI, after a career in the private sector. Former Director 
Freeh understood that the FBI infrastructure was not modern, and he 
asked me to join the Bureau to review the problems, prioritize the 
requirements, and begin implementing the necessary changes in an 
orderly fashion.
    In the past decade, the Bureau has made significant investments in 
technology for programs in support of state and local law enforcement 
agencies, such as fingerprint identifications (known as IAFIS), the 
National Crime Information Center (known as NCIC 2000) and national gun 
checks (known as NICS). The FBI has also invested in technology for 
specific programs of national priority, such as crimes against children 
(known as Innocent Images), DNA databases for violent offender 
identification (known as CODIS), and the protection of our economic and 
physical infrastructure (known as the National Infrastructure 
Protection Center, or NIPC). What we need to do now is invest in the 
tools and support to satisfy the basic investigative needs of all our 
Special Agents and all their support personnel.
                                Overview
    Let me provide you a quick overview of what I will be testifying to 
this morning:

        1. The FBI knew that its Information Technology (IT) needed 
        repair.
        2. This past year we have initiated some changes in programs 
        and management to begin correcting the basic IT problems and to 
        position the FBI for the future. Our effort has as its 
        foundation a program we have named Trilogy.
        3. The Congress has supported us in this Trilogy effort, both 
        with funding and with the active, thoughtful attention by this 
        Committee as well as others, for which, as someone new to 
        government service, I am personally grateful.
        4. We are on schedule and within costs to implement the Trilogy 
        program improvements you authorized.
        5. In light of recent events, we need to improve the FBI 
        security operations and other areas, such as document 
        management.
        6. For secuity, we have created a single point of 
        accountability, reporting to the Deputy Director and recruited 
        a career security executive, Ken Senser, to runt it. He has 
        identified specific security enhancement initiatives needed to 
        improve our security. He will speak more fully about security 
        after my statement.
    While we have taken steps to begin repairing our IT systems, these 
Systems are in need of further modernization beyond that of Trilogy. 
And so again, we are in need of your good Counsel and your support.
                            Current Situation
    The FBI's job is investigating. Technology and computers are 
supposed to be tools the FBI uses to accomplish its job. The Bureau's 
future ability to deter and prevent crimes requires the use of modern 
information technology.
    For a variety of reasons, the FBI information technology has had no 
meaningful improvements in over 6 years. Some parts of our system are 
much older:

         More than 13,000 of our desktops are 4 to 8 years old. 
        They cannot run today's basic software. This means that many 
        Agents accessing basic FBI data cannot use basic ``ease of 
        use'' features that your teenagers have enjoy for years, such 
        as using a mouse to move around the screen. The productivity 
        loss and frustration that result are enormous.
         The majority of our smaller offices are connected to 
        our internal network at speeds equivalent to a 56KB modem--a 
        speed less than many individual Internet users have at their 
        homes.
         Agents are unable to electronically store much of 
        investigative information into our primary investigative 
        databases, including photographs, graphical and tabular data.

    Fundamentally, at the dawn of :the 2I5` century, the FBI is asking 
its Agents and support personnel to do their jobs without the tools 
other companies use or that you may use at home on your system.
                            What Trilogy Is
    The Trilogy program you approved is the FBI's foundational 36-month 
program to upgrade the infrastructure technologies throughout the FBI. 
It consists of 3 components:
         Network. High-speed connections linking the offices of 
        the FBI.
         Information Presentation. Hardware and software within 
        each office to link each employee at their desk to the entire 
        FBI.
         User Applications. Several user-specific software 
        tools to enhance each Special Agent's ability to organize, 
        access and analyze information.
    Trilogy is structured to enhance the investigative ability, of 
Agents and support personnel. It will provide the basic resources and 
fundamental tools tile FBI needs to support investigations. Trilogy 
will provide basic relief for the shortcomings I just mentioned. 
Trilogy is a necessary foundation upon which other technology can be 
added.
    We have awarded contracts to implement both parts of our Trilogy 
program, and all of its are anxious to begin seeing the results.
                          What Trilogy Is Not
    The Trilogy Program enables the FBI to have workable system of 
information technology resources. Trilogy will not by itself give the 
FBI a world-class, state-of-the-art system.
    Trilogy gives the FBI a foundation upon which it can build. Trilogy 
is the necessary first step toward state-of-the-art. The other 
components of a state-of-the-art system cannot be implemented without 
first implementing critical parts of Trilogy. You cannot build a house 
without first pouring the foundation. Trilogy is that foundation. As 
that foundation is being built, we can and should begin work on the 
follow-on components necessary to get the FBI more competitive.
                           Improved Security
    We have much more to do than just Trilogy. We need to provide our 
investigative teams collaborative tools, better communications with 
other law enforcement agencies, and the means to know the collective 
experiences of the whole FBI, so they can always use the best practices 
of the FBI.
    We also need to work on the basic ``plumbing'', the financial, 
accounting and personnel systems that we first put in place in the 
1980's.
    However, our most pressing need has come to light as a result of 
the investigative work done to bring about the arrest of Robert 
Hanssen. Our security operations must be strengthened
    Improved security is the most pressing need and a major focus area 
since the arrest of Robert Hanssen. The FBI has been active in 
improving its security. The Director created a taskforce last March of 
Assistant Directors to review FBI policies and procedures, and make 
recommendations. It made recommendations in April:

        1. This taskforce recommended establishing overall 
        accountability for security in one place, having a single 
        function responsible for knowing all the pieces to the security
        2. Security encompasses more than the technology it uses. Given 
        the establishment of a overall single accountability function. 
        it is time to tighten the security policy management system. 
        The foundation for a good security program is to have sound 
        policies in place, and to enforce them. Policy and procedures 
        must be established, against which technology can be introduced 
        to enforce and monitor.
        3. This taskforce recommended immediate investment in training 
        and education on security throughout the Bureau.
        This taskforce recommended it assist the Security Program in 
        prioritizing the areas necessary to get us where we should be 
        on security. Ken Senser has identified several areas of 
        attention for improvements. Ken will discuss these in a few 
        minutes.
    The information used for these policies and procedures will be 
developed as rapidly as possible, within the constraint of first 
getting it right. Any proposed solutions will be structured to 
incorporate additional recommendations that may come from the Webster 
Commission. However, we are not waiting for those recommendations 
before taking meaningful actions to enhance FBI data security.
                                Summary
    Today, our IT infrastructure is in need of repair and our approach 
to IT planning and funding has been less than adequate. Our IT 
infrastructure upgrade program, ``Trilogy'', represents the significant 
step in what we believe should be a continuing effort to keep pace with 
technology changes and to stay ahead of increasingly IT-sophisticated 
criminals.
    Recent public events clearly indicate a need to quickly go beyond 
Trilogy's infrastructure plan to incorporate a state-of-the-art IT 
security process and a world-class records management system. Those 
would be our first two priorities. We can then turn our attention to 
modernizing and integrating the Bureau's remaining investigative, 
administrative and financial systems. Those needs for those systems 
indicate that we should prioritize first on other investigative systems 
followed by the administrative and financial systems.
    Such an effort requires a continual commitment to change that has 
been difficult for the FBI culture in the past; although I am new; I 
believe the Bureau is up to this challenge. Such an effort also 
requires a continual commitment from Congress to support and encourage 
the changes.
    Mr. Chairman, I appreciate the opportunity to address this 
Committee. I look forward to your continued interest in our efforts, 
and your thoughtful advice on how we can best improve the technology 
systems in the FBI. Thank you.

    Chairman Leahy. Mr. Senser, we are delighted to have you 
here. Your whole statement, which I understand we do have, will 
be placed in the record. I would ask you if you might summarize 
that, with a special emphasis on the area of concern that many 
of us have expressed, both Republicans and Democrats on this 
Committee, that security is not adequate at the FBI to be 
handling some of these very, very sensitive especially 
espionage cases or terrorism cases.
    So, Mr. Senser, it is over to you and I appreciate you 
being here.

    STATEMENT OF KENNETH H. SENSER, ACTING DEPUTY ASSISTANT 
DIRECTOR, SECURITY PROGRAMS AND COUNTERMEASURES, FEDERAL BUREAU 
               OF INVESTIGATION, WASHINGTON, D.C.

    Mr. Senser. Good morning, Chairman Leahy and Senators. I do 
appreciate the opportunity to address the very important matter 
of reviewing and transforming the FBI's security program in 
order to transform it into a world-class operation that is 
capable of addressing the formidable threats facing the FBI 
today.
    This review process actually began in late 1999 and, after 
the arrest of Robert Hanssen, accelerated. The recent arrests 
of Hanssen and of James Hill in Las Vegas should leave no doubt 
in anyone's mind that there are committed adversaries that have 
both the intent and capability to do serious harm to the FBI's 
security and to the interests of the United States.
    The FBI is an extremely valuable target for a wide variety 
of opponents who are interested in interfering with 
investigations, compromising sensitive information, and also 
physically harming our employees. For this reason, today I will 
provide only a very general statement so as not to provide a 
detailed road map for any persons who are interested in 
actually doing harm to the interests of our country.
    Suffice it to say that we have done a very detailed review 
of the FBI's security program and, as I will outline, we have 
identified a number of focus areas as well as 15 specific 
categories of enhancements that need to be either bolstered, 
redesigned, or in some cases established for the first time.
    I am available, of course, to speak in a closed session to 
go into the details of both the problem areas as well as the 
focus areas, and have provided a more-depth briefing to your 
staffs about the areas being taken.
    Chairman Leahy. In fact, I might note, Mr. Senser, I have 
read some of the classified material in here. It will be 
necessary at some time, and we will do it at a time that works 
best for the most Senators, to have a classified briefing in a 
closed-door session.
    Go ahead.
    Mr. Senser. As Mr. Dies already described, Director Freeh 
established the assistant director task force and that task 
force had made four recommendations for immediate action. I am 
the result of one of those recommendations. In late April, I 
was selected to lead the total transformation of the FBI 
security program, as well as to oversee its day-to-day 
operations.
    As mentioned, I am a senior intelligence service officer 
that is detailed to the FBI from the CIA. My 18-year career 
with the Agency has been exclusively focused in the area of 
security and I have had assignments in a number of different 
disciplines of security, to include personnel, physical, 
technical, and protective security.
    The original purpose of my detail assignment, which 
actually began in October 1999, was to serve as an adviser and 
a deputy to the FBI security programs manager. That 15-month 
time period between my initial assignment and the arrest of 
Robert Hanssen gave me a unique opportunity to view the FBI 
security program through the lens of an outsider. Additionally, 
as I will mention, I have also brought in other outsiders from 
the intelligence community to help us in this transformation of 
the FBI program.
    As I said, in the late 1999, early 2000 timeframe, we 
initiated a self-assessment of the security program. There was 
clearly a recognition that the program was fragmented and was 
dispersed across many different divisions at the FBI. It lacked 
an integrated vision and security initiatives were often poorly 
coordinated, inefficient and not as effective as possible. 
Additionally, seven specific areas within the program were 
identified for more intense focus.
    The security program developed a program plan in order to 
address these deficiencies, and various management and 
operational processes were either initiated or modified in 
order to improve the delivery of security services. Also, as a 
result of this review, Deputy Director Pickard in May 2000 
established the FBI Security Council in order to facilitate the 
development of an integrated and unified strategic security 
vision for the FBI.
    In the wake of Robert Hanssen's arrest on espionage charge, 
as you all know, Director Freeh implemented a number of 
immediate actions, one of which was asking Judge Webster to 
begin his review of the security program and to recommend 
improvements. In addition, there were a number of other interim 
security enhancements started; specifically, a process for a 
more enhanced review of our automated case support system and 
the access that people had to sensitive files in that system.
    We have initiated a limited expansion of our polygraph 
program and we have implemented other measures that are 
designed to elevate the status of security within the FBI and 
to begin the process of changing the security culture at the 
FBI, which is imperative.
    Additionally, as I mentioned, there was a considerable 
effort to bring in support from across the intelligence 
community. We now have officers detailed from CIA and the 
National Security Agency, and they are helping us to develop a 
robust security education and awareness program, which is one 
of the best investments an agency can make in terms of 
improving their security program. We are also reviewing the 
handling, storage and processing of sensitive compartmented 
information, and working to establish a professional security 
cadre at the FBI.
    As far as the future, the seven focus areas that I have 
mentioned where we are concentrating our effort and were 
developed actually prior to the Hanssen arrest have led to a 
detailed, comprehensive and integrated security enhancement 
program that contains many initiatives designed to address 
those focus areas. Nothing we have discovered to this point 
subsequent to Hanssen's arrest would change the need for the 
security enhancements that we have identified.
    Additionally, the enhancements have been prioritized in an 
order that we believe reflects the seriousness of the gaps or 
focus areas that need to be addressed. Now, while these have 
been prioritized, it is important to understand that we can't 
pick and choose. We believe because of the interdependence of 
these enhancements that this should be looked at systematically 
as an integrated program.
    Additionally, it is important to realize that these changes 
are going to take some time. The recommendations and the 
additional deficiencies that we may identify as our review 
continues and the reviews of Judge Webster and the Department 
of Justice Inspector General, will most likely mean that other 
enhancements will be proposed. So the plan that we have is a 
very dynamic plan and it is something that as of today we 
believe is the best approach for addressing these focus areas.
    In summary, no security program can absolutely prevent a 
trusted insider from deciding to compromise the Nation's 
secrets. What we intend to do is to develop a program that 
provides a significant level of deterrence so that those 
persons who are thinking logically may think twice about the 
decision to spy, and also to have a system that, if somebody 
does decide to compromise information, quickly identifies the 
individual and also minimizes the damage that may occur as a 
result of the compromise.
    [The prepared statement and an attachment of Mr. Senser 
follow:]

   Statement of Kenneth H. Senser, Acting Deputy Assistant Director, 
Security Programs and Countermeasures, Federal Bureau of Investigation, 
                            Washington, D.C.

    Good morning, Chairman Leahy, Senator Hatch and other members of 
the Committee. I am pleased to appear this morning to discuss the very 
important matter of the review of the FBI Security Program and its 
transformation to a world-class operation capable of addressing the 
formidable threats facing the Bureau, a process that began in late Fall 
1999 and accelerated after the arrest of Robert Hanssen. The recent 
arrests of Hanssen and James Hill should leave no doubt that there are 
committed adversaries with the intent and capability to harm the 
interests of the FBI and the United States. As the premier domestic 
agency conducting criminal, counterintelligence, and counterterrorism 
investigations, the FBI is an attractive target for a wide variety of 
opponents who continuously strive to impede investigative operations, 
obtain sensitive information, and initiate and implement reprisal 
actions against Bureau personnel or facilities. For this very reason, 
the details I provide its this public briefing will be very general to 
prevent outlining a roadmap for those. persons intent on harming our 
country's interests. Suffice it to say, that we have conducted a 
detailed analysis and, as I will outline, identified and began 
addressing 15 categories of security areas that need to be bolstered, 
redesigned or, in some cases, established for the first time. I am 
available to present, in a closed session, a more substantive 
description of both those areas of the FBI Security Program that 
require intense focus and the detailed enhancement plan we have 
formulated to improve the Bureau's security posture. Your staffs have 
received an in-depth briefing of the problem areas identified and the 
actions being taken.
                               Background
    In late March 2001, Director Freeh took a number of internal 
security enhancement actions to include the appointment of a task force 
of Assistant Directors (ADs) to ensure the complete identification and 
effective implementation of a number of interim security enhancements 
begun shortly after Hanssen's arrest. Director Freeh also charged this 
task force, chaired by Bob Dies, AD Information Resources Division, 
with identifying and implementing any other interim changes that may be 
appropriate to enhance the FBI's Security Program and are sufficiently 
urgent so as to not await the outcome of either Judge Webster's review 
or that of the Department of Justice Inspector General.
    In mid-April 2001, the security task force concluded that the FBI 
as a foundation for a robust internal security program must have a 
single executive manager responsible and accountable for the entire 
security ``enterprise''. The existing security program function was 
fragmented throughout a number of different divisions and there was 
nobody overseeing the various security ``puzzle pieces''. The initial 
recommendation of the task force to Deputy Director Tom Pickard was 
that the existing security program be separated from the National 
Security Division as a stand-alone entity, reporting to the Deputy 
Director, and that an executive manager be identified to specifically 
direct and be accountable for the security program. The task force also 
recommended that a formal process be established to consistently 
establish, implement, technically support, enforce, and educate 
personnel regarding security policy. Deputy Director Pickard and 
Director Freeh immediately adopted these recommendations.
    I was then selected to lead the total transformation of the FBI's 
Security Program, as well as, oversee its day-to-day operations. I am a 
Senior Intelligence Service officer detailed to the FBI from the 
Central Intelligence Agency (CIA). My 18-year career with the CIA has 
been exclusively within the security field and I have served 
assignments in the disciplines of personnel, technical, physical, and 
protective security. The original purpose of my detail assignment, 
initiated in October 1999, was to serve as a deputy and advisor to the 
FBI Security Programs Managei. The 15 months between the start of my 
detail assignment and the arrest of Hanssen gave me the unique 
opportunity to view the FBI's security apparatus using the lens of an 
``outsider''. As I will mention later, other outside experts have been 
detailed to the FBI to assist in this critical endeavor.
    My responsibilities include identifying the necessary security 
processes (``puzzle pieces'') and ensuring that each one has an 
``owner''. The process owners will develop the security policy 
statements and other supporting documentation which will require the 
approval of at least two FBI executives, one of which will always be 
mine, before final review and approval by the Deputy Director or 
Director.
                             Basic Security
    An effective security program utilizes the principles of risk 
management. It is impractical and cost prohibitive to attempt to remove 
all risk from operations. Risk management is the process of selecting 
and implementing countermeasures to achieve an acceptable level of risk 
at a reasonable cost. Applying risk management within the security 
discipline involves:

         The collection and evaluation of accurate and detailed 
        information pertaining to:
         The nature and value of assets being protected.
         The degree of a specific type of threat.
         The extent of the related vulnerabilities.
         The identification and evaluation of risks.
         A cost-benefit analysis of countermeasures to mitigate 
        specific selected risks.

    When countermeasures are applied to mitigate the risk, they are 
done so in a layered manner. These layers, or ``rings of security'', 
are constructed from the outermost perimeter to the asset itself. 
Countermeasures must be integrated and considered in a systems 
approach. To do otherwise potentially allows the adversary to identify 
the vulnerabilities that were not properly addressed, thereby negating 
the positive effect of the countermeasures that were applied.
                      Pre-Hanssen Security Review
    In early 2000, the Security Program initiated a self-assessment of 
its Program. There was a recognition that the Program was fragmented 
and dispersed across several different divisions. It lacked an 
integrated vision and security initiatives were often poorly 
coordinated, inefficient, and not as effective as possible. 
Additionally, seven areas within the Program requiring greater focus 
were identified. The Security Program established a Program Plan 
designed to address these deficiencies. Various management and 
operational processes were initiated or modified to improve the 
delivery of security services.
    As a result of this review, Deputy Director Pickard established the 
FBI Security Council in May 2000 to facilitate the development and 
maintenance of a unified, strategic security vision. The purpose of the 
Council was to address Bureau-wide operational and policy issues that 
impact the FBI Security Program. The Council discussed a number of 
issues, to include; the status of FBI efforts to certify and accredit 
its information systems; strategies to improve information assurance; 
and options for consolidating responsibilities in various areas, such 
as, communications security and background investigations.
                          Post Arrest Actions
    In the wake of the arrest of Robert Hanssen on espionage charges, 
Director Freeh asked Judge William H. Webster to conduct a thorough 
review of the FBI's internal security functions and procedures and to 
recommend improvements. As a former FBI Director, CIA Director, and 
Director of Central Intelligence, Judge Webster is, of course, uniquely 
qualified to undertake this review. Judge Webster has assembled an 
impressive team of highly crederitialed individuals to assist him in 
conducting this review. Those members are: Clifford L. Alexander, Jr., 
Griffin B. Bell, William S. Cohen, Robert B. Fiske, Jr., Thomas S. 
Foley, and Carla A. Hills. The FBI is committed to providing Judge 
Webster and his team complete and timely access to FBI records, 
personnel, and resources to complete this task.
    Judge Webster has also established a team of investigative 
attorneys to assist in this review. Those attorneys are currently 
conducting interviews and reviewing documents in order to formulate 
recommendations to improve FBI security policies and procedures. We 
welcome their recommendations and are committed to implementing them as 
expeditiously as possible. I maintain regular contact with 
representatives of the review team to keep them informed of proposed 
security enhancement initiatives.
    The following interim security enhancements have been initiated:
    Enhanced Computer Audit Procedures. Some of the FBI's most 
sensitive information is contained in electronic case files in the 
Automated Case System. Access is determined both by one's assignment 
and restrictions placed when the case is opened or data entered.
    Director Freeh instructed our personnel to implement regular 
reviews on our most sensitive cases -reviews that can highlight all 
individuals who have looked at the case files--so that the case agents 
and their supervisors can be responsible for assuring these cases are 
being accessed by only those with a need to know.
    The FBI's Electronic Case File (ECF) Document Access Report (DAR) 
shows accesses to all documents in a particular case file for a 
specific period of time. The DAR shows the user who conducted the 
captured activity, the date and time, and the actions taken (e.g., list 
serials, view text, print, or download).
    Case Agents assigned to the most sensitive investigations will 
review the DARs every 90 days and, with their supervisors, will be 
responsible for resolving unexplained accesses. As part of the 
resolution process, the Agent and his supervisor may decide that more 
frequent monitoring of a specific case is warranted to determine 
whether accesses were anomalous and accidental or repeated and 
unauthorized.
    This procedure should act as a strong deterrent as well as identify 
unusual entries into sensitive files. It will not stymie the flow of 
information necessary for effective counterintelligence. If this 
monitoring system had been in place, Hanssen would have known that 
every time he accessed a case or program as a result of ``surfing,'' 
his entry would have been identified to the case Agent and questioned. 
And even though Hanssen did not conduct an unusual number of searches 
against FBI records, the fact that he was conducting these searches at 
all would have been immediately apparent and raised suspicions.
    Expanded Polygraph Program. Currently, the FBI conducts polygraphs 
of all new employees prior to them beginning their service. In 
addition, individuals with access to certain sensitive programs or 
cases are polygraphed and, of course, the polygraph is used during 
serious internal inquiries to resolve unexplained anomalies and 
ambiguities.
    As an interim measure, we identified for periodic polygraph 
examination those individuals who, by the nature of their assignment, 
have broad access to the FBI's most sensitive information. This 
includes any level of employee in any occupation who has access to our 
most sensitive information, such as data base administrators. In 
addition, we are conducting polygraph examinations of those employees 
leaving for and returning from permanent foreign assignments. These 
polygraph examinations are essentially complete. A more significant 
proposal for expanding the polygraph program is currently being 
reviewed by the AD security task force.
    Judge Webster will closely examine the entire polygraph issue to 
include random polygraphs and inclusion of the polygraph as part of the 
five-year reinvestigation every employee now undergoes.
    As there are elsewhere in the Intelligence Community, there will be 
unexplainable false positives and, as we saw in the Ames case, false 
negatives. On balance, however, we believe the potential for damage to 
be done by traitors outweighs these concerns. Accordingly, Director 
Freeh implemented this interim step with the full expectation that 
Judge Webster will examine this issue in its entirety and make further 
recommendations.
    Enhanced Reinvestigation Analysis. In order to practice sound risk 
management, the FBI will devote additional resources to the 
reinvestigation process of those employees assigned to positions with 
sensitive access. Director Freeh mandated that an enhanced analysis 
capability within the Security Program be established to conduct 
security adjudications and to resolve any anomalies resulting from the 
reinvestigations of persons with access to the most sensitive FBI 
information A separate unit was established within the Security Program 
for this purpose. The unit will also serve as the point for CI security 
integration. It is in the process of being staffed. A cadre of nine 
contractors (retired FBI Special Agents) is already onboard and 
preparing their analytical work to support this program.
    Other Measures Implemented. In addition to the ongoing efforts 
discussed above, Director Freeh directed implementation of the 
following changes to facilitate the continued incorporation of security 
into the FBI culture so that it is recognized as an integral part of 
operations:
         The security officer(s) in each Field Office will 
        report directly to the Assistant Director in Charge or Special 
        Agent in Charge to ensure that security issues are afforded the 
        appropriate level of Executive attention.
         Each Assistant Director in Charge and Special Agent in 
        Charge will establish a Security Council, modeled on the FBI 
        Security Council, to provide a forum for addressing security 
        issues affecting their components. These Security Councils will 
        include both support and Special Agent personnel and will 
        provide a broad representation of the respective Field Offices 
        and Headquarters components.
         The Training Division, in conjunction with the 
        Security Program, will provide a greater focus on security, 
        particularly with regard to operational security, during FBI 
        Special Agent and new employee training programs.
         The Security Program conducted a Bureau-wide training 
        conference for Security Officers in June at Quantico to ensure 
        that Security Officers are better prepared to exercise their 
        important responsibilities. The Security Officers were also 
        given the opportunity to meet with representatives of the 
        Webster Commission to discuss the security situation at the 
        FBI.
    Interagency Support. Professional security officers from the 
Central Intelligence Agency (CIA) and the National Security Agency 
(NSA) have been detailed to the Security Program to assist in: (1) 
developing the security education and awareness program; (2) reviewing 
the handling, storing and processing of Sensitive Compartmented 
Information (SCI); and, (3) establishing a professional career 
development and training proposal for the FBI Security Officer. In 
addition, FBI field Security Officers are currently TDY to headquarters 
to assist in this effort.
    Security Education and Awareness:
         In coordination with the Inspection Division, a ``Back 
        to Basics'' training day is scheduled throughout the FBI to 
        address the critical issues facing the FBI, to include 
        security. A lesson plan has been developed to ensure important 
        security policy and procedures are consistently and clearly 
        understood by all FBI employees.
    Security Education and Awareness training materials are being sent 
to FBI field offices from other intelligence community members to 
establish a resource library that will enhance employee awareness of 
security procedures. Creation of FBI specific security awareness 
materials are underway.
    SCI Security:
         The FBI is currently reviewing its SCI handling 
        procedures to ensure compliance with intelligence community 
        standards. This effort is being led by a CIA officer that 
        includes a written survey of all SCI activities in the FBI.
         Understanding the need for SCI access by senior FBI 
        officials, two Sensitive Compartmented Information Facilities 
        (SCIFs) are being constructed and accredited on the 7th floor 
        of FBI headquarters. In addition, six Secure Working Areas 
        (SWAB) are being established to ensure secure and ready access 
        to SCI materials reviewed by the Director, Deputy Director, and 
        Assistant Directors.
    Professional Development and Training for the FBI Security 
Officers:
         An updated Security Officer's Manual has been produced 
        that includes a ``cookbook'' to assist the security officer in 
        implementing security policies and procedures. This 
        practitioners's guide will address the immediate training needs 
        for the FBI field Security Officer.
         A study is underway to evaluate the process for 
        selection, retention, and development of highly skilled 
        candidates for the FBI Security Officer positions. An 
        examination of a career path for professional Security Officer 
        is being conducted.
                               The Future
    Using the seven focus areas identified during the pre-Hanssen 
review of the FBI Security Program, I have overseen the development of 
a detailed, comprehensive, and integrated set of security enhancement 
initiatives. Nothing yet discovered subsequent to the arrests of 
Hanssen or Hill change the need for the security enhancements already 
identified. The enhancement initiatives have been assigned to 15 
prioritized categories. It will take time to transform the FBI Security 
Program. While the initiatives are prioritized, it will not be 
effective to cut the proposal into pieces. They are interdependent. 
Additionally, I anticipate that other security deficiencies will be 
discovered as our comprehensive review, and those of Judge Webster and 
the Department of Justice Inspector General, continues.
                                Summary
    No security program can absolutely prevent a ``trusted insider'' 
from making the decision to compromise this organization and the 
country. However, it is our goal to provide a significant level of 
deterrence; potentially influencing those persons who are thinking 
logically. We also intend to create a system that will result in the 
ability to more swiftly detect those persons who do choose to 
compromise sensitive information and to minimize the damage resulting 
from the compromise. To be successful, we must and are changing the 
security ``culture'' at the FBI. It will also take this Committee's 
support.
    Mr. Chairman, I appreciate the opportunity to address the Committee 
and look forward to our continued collaboration to reach our mutual 
goal of a secure FBI. Only then can we achieve the success necessary to 
ensure the continued security of this great nation.

                                

                                 U.S. Department of Justice
                            Federal Bureau of Investigation
                                     Washington, D. C 20535
                                                      July 23, 2001

Honorable Patrick J. Leahy
Chairman
Committee on the Judiciary
United States Senate
Washington, D.C. 20510

Dear Mr. Chairman:

    Thank you for the opportunity to testify before your Committee last 
week to describe the significant deficiencies in the FBI Security 
Program and the steps being taken to address them. As I have reflected 
on what was said, and after speaking with persons who are more familiar 
than I with the current state of the FBI's property accountability 
system, I want to correct my testimony on one point.
        Relative to the FBI's ability to control laptop computers, you 
        asked me:
        ``Is there a system in place today so if you have a computer 
        with classified information that somebody in the FBI can say at 
        2 o'clock this afternoon 'I know where every one of the 
        computers is with classified information and who has them?' ''
        My answer was: ``Today, yes, that is true.''
    While that certainly is a reasonable objective for a property 
accountability system, I have learned subsequent to my testimony that 
the level of control outlined in your question is not possible today at 
the FBI. Work continues to tighten the property controls so that 
assurances can be made regarding the status and physical location, at 
any time, of all accountable FBI property. This includes laptop 
computers.
    I regret any misunderstanding I may have caused as a result of my 
error. I continue to look forward to working with you and the Committee 
on this very important matter.
            Sincerely yours,

                                          Kenneth H. Senser
                                   Acting Deputy Assistant Director
                              Security Programs and Countermeasures

    Chairman Leahy. That is the point that concerns me the 
most. I agree with you on the question of the trusted insider. 
In any organization as large as the FBI, that is a problem you 
are going to have. But also within that organization, as large 
as it is, you have a smaller universe of people who have the 
most sensitive information. What bothers me is not so much what 
you describe is being planned with the review in the future. 
What bothers me is a management culture that did nothing about 
this problem a long time ago.
    Mr. Dies, yesterday, as you know, my office and everybody 
else's office here was informed, as was the public, by the 
Department of Justice that the FBI currently has 449 weapons 
unaccounted for. Most of them are handguns; some are shotguns 
and machine guns. I realize that is out of a total of 490,000 
weapons owned by the Bureau. As I mentioned earlier, I am very 
concerned about the 184 unaccounted-for laptops, including 4 
purportedly used for classified information.
    Do you know when the FBI first became aware of this?
    Mr. Dies. No, I don't. Other people might, but I don't. I 
am sure we can get you briefed on it.
    Chairman Leahy. Well, it would be interesting to find out 
when this first came to the attention of the FBI. To his 
credit, the Attorney General has discovered the situation and 
he is going to take a number of steps, such as requiring a 
Department-wide check to account for all weapons.
    Mr. Senser. Mr. Chairman, I have some information on that 
topic.
    Chairman Leahy. Go ahead, Mr. Senser.
    Mr. Senser. As I mentioned earlier, the FBI established the 
Security Council in May of 2000. As part of some of the 
initiatives that the Security Council began to look at, one of 
them was the notion of protection of computers and life cycle 
controls on the computers, as well as the protection of laptop 
computers.
    This led actually to a series of recommendations that were 
approved and disseminated to the FBI population in early 2000 
relative to the emphasis on control of laptops and the 
information that they process. As part of that review, it 
became apparent that there were issues with the accounting 
system for laptops, and the focus began on trying to identify 
situations where information might have been lost or 
classified--
    Chairman Leahy. By ``issues'' you mean they didn't know 
where all the laptops were?
    Mr. Senser. Yes, in the sense that in a lot of cases it was 
impossible to even make an assessment because the records were 
such that you could not tell whether the equipment was properly 
disposed of or not, who used the equipment, what it was used 
for, and so on.
    Chairman Leahy. Would everybody agree this is a serious 
problem with regard to the FBI's security information and 
technology programs?
    Mr. Senser. Absolutely.
    Chairman Leahy. Mr. Dies, you, too?
    Mr. Dies. You bet.
    Chairman Leahy. Are we going to find a better way to track 
guns and laptop computers?
    Mr. Dies. It is a combination of having a better system in 
place to help them, but it is of no use if you don't follow the 
system. So when people have an asset assigned to them and that 
asset goes out of service, you log it in as out of service. You 
don't forget to log it in and people are held accountable for 
the results.
    Chairman Leahy. Now, let's be clear on this. You can put 
the systems in, but I think your last point is the important 
one. Somebody has got to be held accountable. Who is held 
accountable?
    Mr. Dies. Do you want to take that?
    Mr. Senser. Well, at the time actually there was nobody 
held accountable in the sense that the FBI policy was very 
clear on the control of laptop computers, and more specifically 
any laptop computers that might be used to process classified 
information.
    Chairman Leahy. You are saying nobody is held accountable, 
so you could have laptops with classified information and you 
sort of leave it up to the person who is holding it to make 
sure they are turned in when they are supposed to be?
    Mr. Senser. Well, what I am saying is--
    Chairman Leahy. We have got a much better system than that 
here in the Senate.
    Mr. Dies. There is an automated system which is supposed to 
track all of our properties over $500, for example.
    Chairman Leahy. I don't care about the $500. I mean, you 
could have a $100 Palm Pilot with classified information on it. 
I am not doing an accounting system here. I want to know, is 
there a system in place today so that if you have a computer 
with classified information, somebody in the FBI can say at two 
o'clock this afternoon I know where every one of the computers 
is with classified information on them and who has them.
    Mr. Senser. The answer is today, yes, that is true. As I 
mentioned, in early 2001 there were four recommendations put 
forward based on the work of the FBI Security Council, one of 
which was to reemphasize to all FBI employees the importance of 
the protection of laptops and the information they process.
    The second was to ensure that our Inspection Division on 
all audits and inspections of field offices do a 100-percent 
accounting of the laptops assigned to that entity. The third 
was to report to our Office of Professional Responsibility any 
laptops that were identified as missing or stolen. And the 
fourth was to institute a process whereby every 6 months the 
computer specialists for those offices physically put their 
hands on every laptop, reviewed those laptops for viruses and 
to ensure that the software was appropriate, and to do a check 
of the security of those laptops.
    Chairman Leahy. As one who has sat on this Committee for 25 
years and observed the FBI for 25 years, there is good news and 
bad news. The good news is I am sure that the people who would 
normally be handling these laptops with this classified 
material are themselves going to be very careful of it. I have 
seen FBI agents in very difficult, highly classified 
operations; I have talked with a number of them. I am convinced 
that they would be protecting this information with their 
lives, if necessary, especially if the security of the United 
States is involved.
    What I want, though, is something so that if you do have a 
Hanssen or another person with bad intentions that they know 
these things are being tracked, and we know that the laptops 
are not going to be inadvertently left where somebody else 
might find it. That is my concern.
    You have got to have both the electronic checks that are 
available, but you have also got to have the ability to go and 
find when somebody is outside the loop and be able to identify 
them quickly.
    Mr. Kelly, you referred to problems with the 20 special 
agents-in-charge in the Customs Service scattered across the 
country. I think the term you used was ``entrenched 
careerists.'' The FBI has almost three times that many SACs, 
and they each report, as I understand it, separately to FBI 
headquarters.
    Now, we saw the problems with McVeigh. They failed to 
produce records, even though the Director had given an order 
that they had to. In the Wen Ho Lee case, a field office lacked 
counterintelligence resources and then disregarded FBI 
headquarters orders in an espionage case.
    You adopted a regional structure in the Customs Service, 
but you know how strong field office autonomy is in the Bureau. 
Do you think the new Director should challenge the autonomy of 
the SACs and put a regional structure in place?
    Mr. Kelly. Mr. Chairman, I think it worked for Customs. 
Again, it is a far-flung organization that is in 24 foreign 
countries and 100 RAC offices. I think what we needed in 
headquarters was real-time information. We weren't getting it. 
It was very reactive. If you wanted to find out about a case, 
it took days to get that information up.
    I think that structure should be explored. I think, as I 
say, it has been helpful. You are able to hold people 
accountable in a much more direct way for a whole host of 
issues. Perhaps it is even property management, those sorts of 
things. I just believe, in law enforcement, in a much tighter 
span of control.
    Again, there has been this notion of empowerment, pushing 
power down. I think in the unique law enforcement field, that 
has to be examined closely because, as I said, we have the 
authority to arrest folks. Obviously, the FBI is talking about 
very sensitive investigations concerning national security. In 
Customs, we were concerned about personal search and how do you 
have uniform policies throughout the country.
    I would just simply suggest that that structure be 
examined. It gives the CEO of whatever agency you are talking 
about the ability to talk to a smaller number of people and get 
real-time information, and hold them accountable and 
responsible again on a real-time basis.
    Chairman Leahy. These things all kind of come together in a 
way, and one of the reasons for these hearings is to find out 
how we can do it better. This Committee and the members of this 
Committee have supported huge increases in money for the FBI, 
something that is not going to continue unless there are 
improvements.
    Mr. Dies, you came to the FBI from industry and you were 
asked to put together a new technology program. You said, if I 
recall your testimony correctly, that the FBI did not make any 
meaningful improvements in its information technology in over 6 
years and its computers were often incompatible. There is not a 
successful organization in business in the world that is not 
doing improvements where you can at least talk to each other 
and updating their computers.
    Now that you are familiar with the current status of the 
FBI computer systems, can you identify problems that 
contributed to Robert Hanssen's ability to spy for the KGB for 
over 15 years from within the FBI? And if there are parts of 
this that you are going to have to give us in a classified 
area, be sure and tell us that and we will arrange to do that.
    Mr. Dies. Let me say in a general sense that the technology 
security that was there was not specific enough, it was not 
granular enough. It was not always executed with management 
practices and follow-up as it should have been. I think the 
details of it we might be better off having in a closed 
session.
    Chairman Leahy. Is it fair to say, though, that you did 
find a number of things that, had they been done differently, 
would have at least greatly hampered Mr. Hanssen's ability to 
escape detection?
    Mr. Dies. It is certainly true that I have recommended they 
change some things so that things like this might be handled in 
a little more expeditious fashion.
    Chairman Leahy. I think we understand each other.
    Senator Grassley?
    Senator Grassley. Mr. Chairman, I would like to take some 
of my time for a statement, if I could.
    Chairman Leahy. Of course.

STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE 
                         STATE OF IOWA

    Senator Grassley. First of all, it would be to thank you 
for doing a good job of oversight on this issue. I don't think 
we have spent enough time on oversight, and I think when we 
don't, then we don't fulfill our constitutional 
responsibilities and bureaucracy has a longer leash.
    In the case of the FBI, I think too often we have melted 
before the FBI Director, who is called up here and asked some 
softball questions. The FBI usually goes away with more money, 
more power, and not any change in culture. So I thank you for 
doing this.
    It was almost 1 month ago that we met in this room to 
discuss ways in which we might help the FBI regain the 
confidence of the American people. While there is much work yet 
to be done, as evidenced by the latest situation involving 
weapons and laptops computers, we are beginning to see some 
positive results.
    First, President Bush has nominated Deputy Attorney General 
Robert Mueller to be the next Director. I had an opportunity to 
meet with Mr. Mueller last week and discuss with him several 
concerns that I have with how the Bureau has been managed over 
the last several years. I look forward to that confirmation 
hearing, where I will further assess his ability to make vital 
and necessary changes and eventually make up my mind on how to 
vote on his confirmation.
    Second, I commend Mr. Ashcroft for the action he took last 
week to enlarge the jurisdiction of the Office of Inspector 
General. I have been saying for years that the FBI should not 
be allowed to police itself, and obviously I am encouraged by 
this new step toward the establishment of a free and 
independent oversight entity.
    But I would also add a word of caution. These changes 
result from an administrative order, as you have said, and 
there is a need to put them in law, codify them. This is 
particularly essential with respect to whistleblower 
protections, which I am pleased to see were also addressed in 
the administrative order. But I think also not only should they 
be codified, but they fall far short of offering sufficient 
protection against retaliation of FBI personnel coming forward 
with protected disclosures.
    I would like to make one thing very clear which is a 
concern of mine as I work on FBI reform. The comments that I 
make about the FBI should not minimize the great sacrifices 
made everyday by hard-working FBI agents and support personnel.
    I received a call, for instance, last week from a special 
agent-in-charge. He and some of the folks in his office were 
concerned about some of the comments that I have made about the 
FBI. I told the special agent-in-charge that I believed the 
great majority of men and women in the FBI serve their Nation 
proudly, that the FBI works best when it sticks to the 
fundamentals, and that is to find the truth and let the truth 
convict.
    But I also told him they deserve an organization that has 
integrity and incredibility, and it is the FBI management 
system that is broken. The system that is now in place does a 
real disservice to the hard-working agents on the street.
    The FBI has an institutional arrogance in the way that it 
deals with its own employees, Congress, and its fellow law 
enforcement agencies. Part of this arrogance lies with the 
Bureau's propensity to place image and publicity before basics 
and fundamentals. An example is holding news conferences in 
high-profile cases before the investigation is complete and all 
the facts are in.
    It is also a type of arrogance that the General Accounting 
Office recently encountered when they found it took an average 
of 66 days to just set up an appointment with officials at FBI 
headquarters. Certainly, this arrogance is further supported 
and reinforced by the organizational structure at the Bureau. I 
believe it is vitally important for the next Director to 
recognize the need for change in this structure.
    As I think we will see from testimony today, it is clear 
that a double standard exists within the FBI, one for senior 
officials and another for rank-and-file. It has been a well-
known practice within the Bureau for many years that senior 
officials and rank-and-file agents are given different 
punishment for similar misconduct or offenses.
    When line agents are routinely given penalties that are by 
the book, senior officials are routinely given a slap on the 
wrist. This has been a classic example of the fox guarding the 
hen house. Senior FBI officials are given the responsibility 
for adjudicating the misconduct of their peers. The problem is 
these senior officials become so blinded by the need to protect 
the reputation of their peers in the Bureau that they fail to 
realize the consequences of their actions bring far more 
damaging results.
    The organizational structure of the FBI and the manner in 
which the Bureau manages its people and programs only serves to 
contribute to this unbalanced, obstructive condition. If there 
is anyone who still wonders what I mean when I talk about the 
FBI culture of arrogance, I can think of no better example than 
this.
    One can only imagine the kind of effect that this double 
standard has on morale within the agency. Clearly, this 
situation would be destructive in any setting, but it has 
become particularly devastating to individuals at an 
institution who are sworn to uphold truth and justice.
    Let me give you an example of just how pervasive this 
problem is within the FBI. We had an internal survey that found 
that less than 5 percent of the FBI agents sampled indicated an 
interest in promotion to FBI headquarters, and of non-SES 
agents who have already been assigned to FBI headquarters, less 
than 6 percent sampled believe that the experience was 
positive.
    Another by-product of this institutional arrogance comes at 
a significant cost to the American taxpayers. The mishandling 
by the FBI of situations such as Dr. Fred Whitehurst and Mr. 
Tom Stewart have cost the taxpayers $1 million and $6 million, 
respectively. Settlements such as these can highlight deeper 
problems with an agency.
    For that reason, I am sending a letter today to Attorney 
General Ashcroft asking for a detailed list of incidents in the 
past 5 years in which the Department of Justice has made a 
payment of over $25,000 to either private citizens or 
Government employees, because Congress has a duty to know what 
disciplinary actions are being taken against those Federal 
employees who may have caused significant expenditures of 
taxpayers' funds.
    A failure to properly discipline inappropriate actions by a 
Justice Department employee can send the wrong message to all 
employees, and I believe this information will provide a better 
understanding of the concerns about the disparity of treatment 
between SES and the rank-and-file employees within the FBI.
    The erosion of trust in the FBI is happening both from 
inside as well as outside the FBI. We now have a historic 
opportunity to help the FBI regain the trust and confidence of 
its own agents, as well as the American people. We already 
beginning to see some progress and I look forward to continuing 
to help the FBI and its next Director regain that trust.
    I would also like to make a comment about the latest mishap 
to you, Mr. Dies and Mr. Senser, representing management today. 
The history of the FBI's cooperation with outside entities, 
including Congress, leaves much to be desired. The 
investigation that will be performed by the Department of 
Justice Inspector General into lost or stolen weapons and 
laptops at the FBI will be the first under this new Attorney 
General's order.
    I suggest to both of you that you view this as an 
opportunity to change the tactics of the past and fully 
cooperate with the Inspector General's investigation. I, for 
one, will follow the investigation very closely not only 
because I want to know what happened, but also to see if this 
investigation cooperation is done in a very usual way.
    I believe it was a Supreme Court Justice who once said that 
sunshine is the best disinfectant. Perhaps we should have the 
Government Printing Office print this slogan and put it in 
every office that we have.
    I guess I will only have time for one question, so this 
will be to you, Mr. Dies, and it is regard to the computer-
related problems that you talked about. Without addressing the 
management that oversees those problems, I don't really think 
you have solved the real problem. So how is the FBI addressing 
the management of these systems?
    For example, to blame the delay of the McVeigh documents on 
computer glitches, I think, would be to look at the wrong 
place. You have got to look at the management of the systems as 
well as the systems.
    Mr. Dies. I think Director Freeh was very candid when he 
said this was not a computer problem, this was a management 
problem on the McVeigh document case, short and simple.
    From the computer and support side, I can make things 
easier for the people to use. I can make it easier for them to 
do things. If they don't execute what they are told to execute, 
it will do little good. So we can put the systems in place to 
help them, we can make it less burdensome, we can make it 
easier for someone to operate within the defined environment. 
Executing as you are told to is not a computer problem; that is 
a management system problem.
    Senator Grassley. Thank you, Mr. Dies. Thank you, Mr. 
Chairman.
    Chairman Leahy. The Ranking Member has arrived from his 
other hearing. I just checked with him and, with his 
permission, we are going to go to Senator Durbin, who has been 
waiting here, next for questions. Then we will go to Senator 
Hatch, who has both questions and an opening statement.
    Senator Durbin?
    Senator Durbin. Thank you very much, Mr. Chairman, and 
thank you for this hearing. It is certainly timely.
    I want to thank this panel and I want to join in 
acknowledging Mr. Kelly's presence here. When I first came into 
the U.S. Senate, we discovered a practice in the Customs 
Service in Chicago that needed correction, and needed it 
quickly.
    I want to salute you, Mr. Kelly. You didn't waste any time, 
you didn't come up with any excuses. You made the change in a 
hurry and I think it was in the best interests of the Customs 
Service and our Federal Government. That kind of decisive 
leadership is rare in Washington. You did a great job for your 
country with the Customs Service, and thank you for being here 
today with your suggestions.
    As I listened to the testimony here from this panel, and I 
respect the fact that you are all here bringing us information 
about what is going on, it is clear to me that the FBI has not 
been starved for funds. The FBI has been starved for 
leadership.
    It is hard to believe that the situation has disintegrated 
and deteriorated to the point that it has at this once great 
institution where so many men and women, 25,000-plus, who put 
their lives on the line for the country and are dedicated 
people, could allow this situation to reach the point that it 
has today.
    How did this great agency fall so far so fast, or has this 
been there for such a long time and it has been carefully 
concealed? Can the Federal Bureau of Investigation stand up to 
an investigation? I think that is what this Committee is asking 
today.
    Mr. Dies, for example, there is an article in the Federal 
Times here. I don't know if you saw it, but you may know the 
individual who is quoted. His name is Mark Tanner. He is the 
FBI's deputy chief information officer, and it is my 
understanding he is working with you on this Trilogy project to 
try to modernize the information technology available to the 
FBI.
    Mr. Dies. He reports to me.
    Senator Durbin. Pardon me?
    Mr. Dies. He reports to me, that is correct.
    Senator Durbin. I think he has been very honest and candid 
in this interview and I would just like to get your reaction to 
a couple of things he said.
    I quote from the Federal Times article: ``While Tanner is 
happy to bring his fellow agents the benefits of modern 
technology, he occasionally get frustrated by the bureaucratic 
procedures that come with a headquarters position. `The budget 
process is difficult,' he says. `There are so many layers of 
oversight and each person in the chain thinks their job is to 
cut your request, not refine it or understand what is really 
needed.'''
    He is asked at one point, ``Is there any part of this job 
that came as a surprise to you?'' And he says, ``I was 
surprised by the length of time it takes to gain support for 
modernization of the FBI information technology.'' I can't 
imagine a business that would tolerate that mentality through 
one quarterly earnings report, let alone as a permanent mind 
set.
    Does this accurately reflect the resistance within the FBI 
to change and modernization?
    Mr. Dies. As to your comment about commercial organizations 
couldn't tolerate this, they could, but only for one or two 
quarters. They would then be out of business. You either use 
the competitive technologies or you don't exist in the 
commercial market.
    I have only been there a year, but my opinion is there are 
two parts to the FBI culture. One part you don't want to 
change; the dedication of the men and women out there is 
unbelievable. What they do, day in day out, with no technical 
support from the systems side is truly amazing.
    All organizations have barnacles and resist change. I don't 
think the Bureau is any different. They have to learn to 
change. They have to be willing to accept technology as a tool, 
if you use technology, or implement security programs and be 
accountable for the results or whatever. So they have a long 
way to go.
    If you have an afternoon to talk about the frustrations of 
the budget process or a whole day to talk about the 
frustrations of the procurement process, I am at your disposal 
because it is really a nightmare if you come in from the 
outside to try to help.
    Senator Durbin. But what I am asking you is, within the 
FBI, are you receiving cooperation in this effort to modernize 
and change this mind set and this antiquated technology that 
can't keep up with modern needs?
    Mr. Dies. I am getting all the help I have asked for. It is 
not easy. Are there recalcitrants and people dragging their 
feet? Of course, there are in any organization. When I have 
asked for help, I have gotten what I have asked for and I am 
comfortable at this point that we can get it done.
    Senator Durbin. Mr. Senser, you have been involved in 
security and intelligence work with the CIA and now with the 
FBI. It strikes me as odd that the CIA, an important 
intelligence organization, apparently was able to modernize and 
keep up with changing technology and the FBI was left in the 
Dark Ages. Can you explain it?
    Mr. Senser. No. Actually, I can't explain it, but I think 
it is evident when you look at the results. There is a very 
different automation environment in the two organizations.
    Senator Durbin. Can you tell me what you mean by that?
    Mr. Senser. Well, in terms of processes, and I will stick 
to security, for example, we have a requirement that says that 
when somebody is preparing to travel overseas, they need to 
file a foreign travel report so that it can be duly noted and 
reviewed, brief them on the hazards, and so on.
    At the Agency, the process is electronic. You fill it out 
online. It gets sent and approved electronically. It goes to an 
automated data base. At the Bureau, it is a paper process. It 
goes to a paper file, and that limits your ability from a 
security and counterintelligence standpoint, for example, to 
search data bases, look at windows of time to see who may have 
traveled overseas, and so on. So it is just a very different 
environment.
    Senator Durbin. Well, let me just say--and I will turn it 
back over to the Chairman because I know Senator Hatch is 
waiting to make his opening statement--I have made a suggestion 
with Senator Specter about the creation of an inspector general 
for the FBI, and that inspector general would report to the 
Attorney General. There would be no question that that would be 
the line of command.
    The reason I did that and the reason that Senator Specter 
joined me was the belief that there has been a resistance to 
this sort of inspection for a long, long time. Although we can 
point on paper to all sorts of things that should have caught 
the problems that we are seeing in the newspapers every 
morning, the fact is it didn't happen.
    There is a wall that has been built between the FBI and the 
Department of Justice, and the agencies that have been 
empowered to look over that wall and find out what is going on 
have failed. They have failed miserably. When we can't find 
weapons and we have laptop computers with classified 
information disappearing, and when Robert Hanssen--and this was 
reported in the newspapers--can put a hacking device on his own 
computer at the FBI, hack into his superior's computer, take 
down classified information he wasn't supposed to see, and then 
report himself and nothing comes of it other than his continued 
betrayal of the United States and its security, that tells me 
that the system has completely disintegrated in terms of 
inspectors general and what they are expected to do.
    I am open to suggestions here, but I think merely a nod of 
the head and a furrowed brow and a show of concern isn't 
enough. We have got to take a look at this once proud agency 
and put it back into the position it deserves.
    Thanks, Mr. Chairman.
    Chairman Leahy. Thank you, and I would tell the Senator 
from Illinois I totally agree with him on that.
    As I mentioned at the beginning of the hearing, Senator 
Hatch was testifying on an extremely important issue at another 
hearing. Following our normal custom, we will go to Senator 
Hatch and then go back to the order they came in, which would 
be Senator Sessions.

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE 
                            OF UTAH

    Senator Hatch. Well, thank you, Mr. Chairman. I am 
delighted to be with you. I did have to testify in another 
hearing and it took this long to get here. I thank you for 
convening this hearing and continuing this important oversight 
effort.
    Today's hearing, with its focus on management issues, is 
timely in light of the latest revelations concerning firearms 
unaccounted for at the FBI, and 184 missing laptop computers, 4 
of which may contain classified information. This is simply 
inexcusable. Apparently, this was a department-wide problem 
during the previous administration, as over 500 weapons are 
also unaccounted for at the INS.
    Lax administrative controls over sensitive materials like 
these cannot be tolerated. This is another example of why I 
think the FBI would benefit from a commission of outside 
experts doing a top-to-bottom review of the agency, as Senator 
Schumer and I have proposed.
    The latest revelations also highlight the challenges ahead 
for the new FBI Director, Bob Mueller, whose nomination I hope 
this Committee will consider as soon as possible. I think that 
needs to be done.
    I applaud President Bush for his choice, and I think that 
Bob Mueller will become an excellent Director. He is a 
principled, dedicated public servant with a proven record in 
law enforcement and reform. His no-nonsense style has served 
him well and helped him vastly improve the performance of the 
U.S. Attorney's office in San Francisco, and I think he can do 
the same thing at the FBI.
    There are many issues facing the FBI that I am pleased that 
today's hearing is addressing. Technology is not by itself the 
answer to all of the problems at the FBI, but it is 
unquestionably an essential part of the solution. I am pleased 
to see that the FBI has reached outside itself to an industry 
expert to develop the best possible system to fit its needs.
    Technology, however, is only a tool to enforce policies. It 
is people who must set the standards, make the value judgments, 
and insist upon adherence to those judgments. I am pleased, 
therefore, that we also have with us today a key FBI official 
who is helping to shape one set of policies critical to the 
FBI, and that is internal security.
    I am pleased to have all three of you here today, and all 
three of you are giving, I think, very important testimony. But 
I am talking right now about Deputy Assistant Director Ken 
Senser, the new head of the FBI's internal security program, 
who is here to discuss the FBI's plan for upgrading its 
security program.
    Like several key FBI officials, Mr. Senser's background 
comes from outside the FBI. He is an 18-year veteran of the 
CIA, who brings an important, independent expert perspective on 
how the FBI can protect itself and its operations from internal 
and external security headaches.
    I also welcome the testimony of the current and former 
agents on our second panel, whose testimony will focus on 
internal discipline at the FBI and how the investigation and 
adjudication of disciplinary matters can be improved.
    I applaud Attorney General Ashcroft for taking important 
and positive steps last week aimed at addressing misconduct 
issues. The Attorney General on his own initiative expanded the 
role of the Department of Justice Inspector General and gave 
that office original jurisdiction and right of first refusal 
over all allegations of misconduct by Justice Department 
personnel that are unrelated to the professional 
responsibilities of Justice Department attorneys related to 
their legal work. This is an important step which immediately 
addresses the problem without precluding additional 
Congressional action.
    Some of the agents testifying here today have expressed 
concerns over a perceived double standard under which senior 
officials at the FBI are punished less severely than regular 
agents for the same infractions. This is a very serious issue 
and one that former Director Louis Freeh tried to address in 
August of 2000 by taking the constructive first step of 
eliminating the separate SES Disciplinary Board.
    I would like to make part of the record a copy of an August 
15, 2000, memo from Director Freeh setting forth his basis for 
changing the policy.
    As described in the memo, some of the disparity in 
discipline is also the result of statutes and regulations, and 
I think it is entirely appropriate for the Committee to examine 
this statutory scheme which restricts the type of discipline 
that can be given to senior officials and whether it should be 
changed to equalize the available punishments for all employees 
regardless of rank.
    The statutory scheme, however, does not account for all 
cases of disparity of treatment. There have been cases where 
senior officials have probably been treated too leniently. 
Senior officials must be held to the highest standards of 
conduct. They must set the example for the rest of the agency. 
Any lasting improvements to the FBI's culture will have to be 
embraced and enforced at the top, and I think that Bob Mueller 
is just the kind of guy who can make this happen.
    One tool I want to give to the new Director is the benefit 
of an independent review of the agency by outside experts from 
a variety of fields. I have joined with Senator Schumer in 
sponsoring the FBI Review Commission Act of 2001, which would 
established a mechanism for a first-rate group of experts from 
a variety of fields like management, technology, and 
intelligence to do a thorough review of the FBI and make 
strategic recommendations to the Director for improvements. 
Such an independent group, with no turf to protect or axes to 
grind, could really help bring the best practices of the 
corporate and scientific worlds to bear on the challenges 
currently facing the FBI.
    There will be a lot of suggestions for improvements to the 
FBI. Some are underway, others are being developed. We in 
Congress are right to scrutinize the plans for reform and to be 
vigilant in our oversight. We will not blindly accept changes, 
but will question and test them to ensure that they will 
address the problems which exist. Through this process and by 
working in collaboration with the Justice Department and the 
new FBI Director, I hope we can be a constructive part of a 
revitalization of the FBI.
    Mr. Chairman, I for one have been very pleased with the 
service of Louis Freeh for these last many years. He inherited 
an agency that really was having a great deal of difficulty, 
and he helped straighten out an awful lot of things that were 
wrong about the agency and did, I think, as good a job as he 
could under the circumstances. And his record of major 
accomplishments is really a tremendous record, but it is 
apparent that we still have work to do.
    The new Director is going to have the benefit of these 
hearings and the benefit of the revelations that have come 
forth, and I am hopeful that the new Director, with the help of 
Congress, will get the job done and help to restore the 
agency's reputation in some of these areas.
    But I don't want to leave the impression that I was 
displeased with Director Freeh's service. I thought he did a 
terrific job and I think most people who know him believe that 
he did a terrific job under the circumstances. Does anybody 
have the ability to solve all problems? The answer to that in 
an agency as big as this one is no, but we have to keep working 
on it because this is the premier law enforcement organization 
in the world and I want to make sure that these types of 
problems don't happen again.
    Let me just ask you this, Mr. Dies. Do you anticipate any 
additional budget requests for fiscal year 2002 related to 
technology upgrades at the FBI, and if so, what will the 
requests likely be?
    Mr. Dies. Senator, the first priority, as I said, is to 
shore up the security holes that have become apparent. Some of 
those are technology-supported, some of those are personnel-
related. We have put to Justice and OMB the requests. The cycle 
we are in cued those requests up in 2003. I think you will want 
us to move significant chunks of that up to 2002. I don't think 
you want to wait until 2003 to get started on this problem.
    So a top priority for the FBI in terms of increased focus 
and funding will be to plug the security holes. Behind that 
would be a better document management system to correct the 
kinds of problems we had with the McVeigh case. Those two 
things are both, as I said, currently aimed in this budget 
cycle at 2003. I as a citizen would encourage you to let us get 
started on that a little earlier.
    Senator Hatch. Well, thank you. I am really pleased that 
you are there. You are a 30-year veteran of IBM and you have 
been hired a little over a year ago to supervise and implement 
the FBI's technology upgrades. So I am really tickled to see 
you in that position.
    Mr. Dies. Thank you.
    Senator Hatch. Of course, Mr. Kelly, I am very proud of you 
and the work that you do. You are doing a great job.
    Let me just ask you these two questions, Mr. Senser, and 
then I will cease. A key principle of security is defense in 
depth, where security measures are layered together, as you 
know. How will you bring this concept to bear on the revamped 
security plan at the FBI?
    And then let me just ask this second question, and I will 
be happy to repeat it again if you need it. Have you been 
coordinating the interim security measures the FBI is taking 
with the Webster Commission so that they are aware of what you 
are doing?
    Mr. Senser. To answer your second question first, we have 
had a very close relationship with the Webster Commission, Mike 
Shaheen, and talked frequently about the recommendations that 
we are developing, as well as the enhancements we have 
initiated. So I believe we are very closely aligned and agree 
on the philosophy and the steps that we have taken to date.
    In terms of your first question, this is a very difficult 
issue to address at the FBI in the sense that defense in depth 
comes from proper integration of activity. And at the FBI, 
security is dispersed through a number of different divisions 
and there are responsibilities for security at a number of 
different divisions.
    The initial attempt at addressing that took place in May 
2000 with the initiation of the FBI Security Council, which was 
the first forum that the FBI had to bring these issues together 
across divisional and organizational boundaries. But we have 
got to go further, and our initiative and our recommendations 
will address that.
    Senator Hatch. Well, I, for one, am happy to have you 
there, both of you, and Mr. Kelly as well.
    Let me just put in the record some of the major 
accomplishments of FBI Director Louis Freeh so that we all 
understand that this is an ongoing thing, that we have got to 
continue to upgrade the agency, but he did a terrific job while 
he was there.
    So if I can, Mr. Chairman, I will put a list of some of the 
major accomplishments in the record at this point.
    Chairman Leahy. Without objection.
    It should be noted that these hearings were not designed as 
a judgment on the administration of any past Director, but 
rather are a long overdue look at some of the inherent problems 
in the FBI. This Committee has authorized so many billions of 
dollars. We want to have the best, and that is why I have made 
it a point to have long talks with both Attorney General 
Ashcroft and the soon to be nominated Director, Mr. Mueller, 
regarding it. In fact, for that matter, we will be scheduling 
Mr. Mueller's nomination hearing as soon as the President sends 
the nomination up here.
    Senator Sessions?
    Senator Sessions. Thank you, Mr. Chairman. We are moving 
toward, I believe, an institutional spasm, a catharsis perhaps, 
with the FBI. That happened with the Internal Revenue Service. 
They were perceived as being arrogant, separated from the 
people, and marching to their own drummer. And I think we went 
too far with the IRS. I think what can be shown today is that 
we damaged that agency more than we benefited that agency.
    I have the greatest respect for FBI agents, and I have 
known them personally. Some of them are my closest friends; I 
have known them for 15, 20, 25 years. My concern is that we do 
make a change. It is time for particularly the middle-level 
bureaucrats within the agency to change, to realize that 
control and secrecy and direction all from Washington at their 
own will is not always healthy. We need a Bureau that is more 
responsive to the times that we are in, Mr. Chairman.
    I guess I would just say to you, in this hearing your 
challenge is going to be to make sure that Mr. Mueller and the 
people that he brings on board and those who are already there 
realize that we expect improvement and change, and at the same 
time not to damage one of the great investigative agencies of 
all time. I really believe that. They do so much good work. The 
agents that I have worked with over the years--I know them, 
their integrity, their hard work, their dedication, but there 
are some things that are troubling and it is time to fix them.
    Mr. Kelly, I wanted to ask you and confront you a little 
bit on your views. I am not sure the regional administrative 
departments wouldn't be helpful. Perhaps that is a very good 
idea, but what I am troubled about is a mentality that 
everything has to be approved from Washington and that the 
tendency of the Federal department head is to believe they must 
control everything.
    McDonald's controls the quality of their hamburgers and how 
long it takes to get them served and so many other things that 
they do, but they don't have somebody watching each individual 
store everyday, second-guessing every order for a hamburger.
    Is there someplace in there that we could reach an accord?
    Mr. Kelly. Yes, Senator, I think there is a middle ground. 
When you do have these far-flung, diverse organizations, they 
do tend to develop their own policies, their own way of doing 
business. I think from my own experience that we imposed an 
additional level that I think made policy more consistent and 
enabled us to get real-time information at headquarters, which 
was certainly lagging when I got there.
    That doesn't mean that they direct every activity by any 
means, but you will find--again, I am talking about my Customs 
experience--that SACs become very independent, and unless there 
is, in my view, some oversight, some communication on a regular 
basis to another level of management, there is very little 
communication.
    Now, when something is going to be done, when they are 
going to take an action, yes, in the structure that I found 
they would go to headquarters. But short of that, there wasn't 
adequate communication. In addition, there wasn't inspection, 
and I don't mean necessarily formal inspection, but there 
wasn't an examination of practices on a regular basis. So I 
think you can reach something in the middle where you are not 
controlling every activity but headquarters knows on a real-
time basis what is going on.
    Senator Sessions. Well, one of the things that President 
Reagan did that was marvelous--and I came on as United States 
Attorney in the early 1980's--he said we are going to have a 
local law enforcement coordinating Committee, and that 
coordinating Committee included the sheriffs and the chiefs of 
police and the law enforcement community, United States 
Attorneys and all the Federal agencies, and they would decide 
what priorities were important for that community.
    What we found is they didn't always coincide with the 
priorities back in Washington. They wanted organized crime, but 
there might not be any organized crime, La Cosa Nostra, in 
Mobile, Alabama, but we had other kinds of crime of critical 
importance.
    So I don't want to get to a situation in which we have some 
sort of centralized domination telling every agent what their 
daily priorities ought to be. I do believe that the SACs should 
be participating in these Committees that still exist, 
developing localized priorities, and they ought to be respected 
in that. So there is a balancing act. I understand that.
    Mr. Senser, I have just in the back of my mind over the 
years felt that some of the problems in the FBI may be that it 
has a major counterintelligence mission, and that that somehow 
spills over into all the other work that they do, creating a 
wall sometimes, a secrecy, a sense that they are more separate 
and apart than the average law enforcement agency would be.
    Have you ever given any thought to perhaps separating 
within the FBI counterintelligence more clearly from the 
routine law enforcement, and would that perhaps serve both 
missions better?
    Mr. Senser. I haven't focused on the removal of 
counterintelligence of the agency, but what--
    Senator Sessions. Or dividing it within the agency.
    Mr. Senser. Yes. Those kinds of things we have looked at in 
the sense that the task is much more complex than what might 
be, for example, at the CIA, where everything is very 
homogenous; it is all intelligence work. Eighty percent of the 
FBI focused on criminal investigations that are not classified. 
So you have a very different environment that you have to 
protect and a wide variety of information and different 
requirements on sharing that information.
    So we have conceptually talked about some ideas in terms of 
systems and doing other things, virtual networks and things, to 
separate those activities from the classified and the non-
classified.
    Senator Sessions. I don't know where it comes from, but 
there is, according to almost every Federal prosecutor I know, 
a belief that Senator Grassley is basically correct that within 
certain high levels of the FBI there is a culture of arrogance, 
a sort of defensiveness that is unhealthy.
    I am not sure some of that doesn't come from their concern 
about secrecy, that they are disciplined and they are supposed 
to contain information and not distribute it too recklessly. 
Some United States Attorney calls and says the court wants this 
document, and they are not real sure it needs to go and they 
don't think it should go. They start making independent 
decisions that get us in big-time trouble, as I think may have 
happened in the McVeigh case.
    But I do believe that breaking down that culture may 
require a separation because when you are dealing with Hanssen 
or somebody dealing with high-level espionage-type issues, they 
have got to be exceedingly secretive and disciplined about 
everything they do. But it should not spill over into the 
normal savings and loan fraud case or a bank robbery or 
something like that.
    I tend to agree that the FBI is not starved for funds. I do 
not believe the FBI is starved for funds. I think the challenge 
of reorganization and improving that agency goes beyond money, 
and I expect that Bob Mueller will be confirmed. From my 
experience with him, I knew him when he was United States 
Attorney in Boston. I think I knew him when he was the chief 
assistant there. He has been a career prosecutor all his life. 
He is a Marine, he is a tough leader. I think he has the will 
and the experience and the insight to improve the FBI. And 
those who do not cooperate in that, I hope the hammer will fall 
on them.
    I think the Bureau is going to have to get on board and we 
are going to have to improve this agency, and if they are not 
cooperative with Mr. Mueller in the improvement of it, the 
result is going to be this agency could be damaged like any 
other agency because this Congress wants some changes, and I 
think the American people do.
    I would finally say, in an agency as big as the FBI, the 
way the world develops is when you have an error and the media 
wants another error, they have got the whole United States and 
hundreds of thousands of cases going on everyday and it is easy 
to go out and find this error, that error and that error, and 
say the whole FBI is incompetent. I do not believe that is 
fair.
    I do think it is time for a culture improvement within the 
Bureau, but I don't think it is fair to say that on a routine 
basis they are not doing excellent work throughout this 
country. I know they are and I wanted to say that.
    Thank you, Mr. Chairman
    Chairman Leahy. And I don't think you have heard anybody 
say otherwise here in this Committee.
    The distinguished senior Senator from California.
    Senator Feinstein. Thanks very much, Mr. Chairman. I just 
wanted to pick up on something that Senator Sessions said 
because having sat through both the Ruby Ridge, which both 
Senators Hatch and Leahy have as well, and the Waco 
investigations that this Committee did, what appeared to me was 
that the attribution, the responsibility, didn't really go up 
the line adequately, that SACs had so much authority, and when 
you really tried to get to the top here in Washington, well, 
nobody really said do this or do that. I think that is one of 
the problems.
    I have discussed this personally with Mr. Mueller. I think 
he is going to change that so that on the big incidents where 
the whole kind of professional quality of the FBI is at stake, 
responsibility is at the top. I think there is no better thing 
in those incidents than someone at the very top going out to 
the field to really be there, to really witness what is 
happening, and to be prepared to be responsible for the 
decisions that are made so that some SAC somewhere doesn't make 
them and then they are the ones that are kind of hung out to 
dry when everything goes wrong. So that is the first thing I 
wanted to say.
    The second thing is I have a great respect for Ray Kelly. I 
have known him now for a while. I have watched him as 
Commissioner of Customs. We have had a lot of opportunity to 
talk.
    I would like to ask you this question. Questions have 
arisen about which type of disciplinary oversight is better, 
whether it is peer review within the FBI, an internal affairs 
unit that we might have in a local police department, or a 
strong outside authority that can come in and do an 
investigation from the outside.
    Some former agents, one of whom will testify later, believe 
that the peer pressure involved in agents investigating other 
agents works best. Others argue that peer review really just 
leads to cover-ups and a kind of ``protect one's own 
situation.''
    Given your experience at Customs, as well as NYPD, and 
knowing of your knowledge about the FBI, which system do you 
think would work best?
    Mr. Kelly. I think a combination of both, Senator, and in 
my prepared remarks I talked about the need, in my judgment, 
for a robust internal investigative component that is supported 
from the top that reports to the top of the agency. But what I 
think you should have is oversight of that entity by in this 
case the Office of Inspector General in the Justice Department.
    Now, the Treasury Department has a construct like that. It 
also has a separate IG for tax administration. I am not talking 
about that. I am talking about the other IG system where, for 
instance, in Customs you have an internal investigative 
component of about 150 people. We tried to get the best 
investigators from the Office of Investigations and we rotated 
them into Internal Affairs.
    The Office of Inspector General has the ability to take 
over any case, to monitor internal investigations. Indeed, 
every investigation that targets a GS-15 or above goes 
automatically to the IG. But they can supersede; they can, in 
essence, take any case themselves. I think a combination like 
that can work.
    I think if you take it totally out of the agency, you lose 
a lot. You lose the knowledge of the culture, you lose the 
knowledge of how it works on a day-to-day basis. The 
investigators are removed from it. So I think you can have a 
combination and that is what I would recommend.
    Senator Feinstein. Well, you know, a lot of what I see that 
has happened that has, I think, dulled the very stellar image 
of the FBI is really kind of a lack of professionalism. I would 
have to put it to that. I mean, the equipment missing is really 
a lack of professionalism.
    What the agents said and how they conducted themselves 
working the Wen Ho Lee case, making threats--I don't think that 
is good professionalism. The number of leaks that have come 
out--as a matter of fact, my staff did a NEXIS-LEXIS data base 
search, because I have been trying to write some legislation on 
preventing leaks, and they found various iterations of 
``Department of Justice sources say'' and ``FBI sources say''; 
over the past 2 years, over 1,000 examples of that.
    I strongly believe that professionals in an investigative 
situation should not say anything to the press about that 
investigation because people get tried in the press then, as we 
have seen happen so many times. So I have sort of come to the 
conclusion that you are right about the culture, that the 
culture is a much more relaxed culture today than it used to be 
10 or 15 years ago.
    Can you comment on that? Maybe I am all wet.
    Mr. Kelly. As far as talking to the press is concerned or 
leaks in general?
    Senator Feinstein. As far as talking to the press and in 
terms of the stringencies of the professional responsibilities 
that they carry out.
    Mr. Kelly. I think in law enforcement, in general, that is 
an issue, that is a problem. I think there are lots of leaks 
and people talking to the press. I think it can be tightened up 
if management at the highest levels of an agency put out the 
word that, hey, we don't want you to do this.
    A lot of times, it is done because of competitiveness. 
Agencies are competing against each other; they are competing 
for budgets. They want to get the story out to show they are 
doing a good job. I think it can be tightened up if the head of 
the agency makes it clear that there will be consequences if 
you do that, but oftentimes it is tacitly supported by the head 
of the agency.
    Senator Feinstein. Could I have the other two gentlemen 
comment on that point?
    Mr. Dies. There are lots of ways to do things. I can only 
speak from the commercial corporate world, where we had the 
inspections pretty much done as close to the site of the 
infraction as possible within certain guidelines. And certain 
classes of things percolate right up, so it is much in the same 
way.
    I am not one that would be knowledgeable about the pros and 
cons of an external IG organization or equivalent. I would not 
know how to comment.
    Senator Feinstein. Do you believe that an internal review 
is more effective?
    Mr. Dies. I think there is a phrase they use at IBM: you 
expect what you inspect. So you get what you pay for. If you 
expect somebody to follow a set of guidelines and procedures, 
you have to make darn sure they do, and if they don't, you take 
action. Letters to the file are nice, but sometimes 
insufficient.
    I think internal reviews, if properly managed, probably 
could be OK, but I will step aside on that to the Committee 
here.
    Senator Feinstein. So what you are saying is stronger 
management. You said before that procedures can be in effect, 
but if somebody doesn't manage them--
    Mr. Dies. If you have the right management, you enforce the 
procedures and you have an organized approach to this problem, 
there is no reason it can't work. That would be my opinion.
    Senator Feinstein. Would you like to comment?
    Mr. Senser. I agree. I mean, for the most part, when 
expectations are clear, when people understand what the 
ramifications are of violating department policy and serious 
action is pursued, I think most of the oversight can be 
accomplished internally, and in maybe some cases of very senior 
managers that you would want an outside organization or other 
entity to look at it.
    Senator Feinstein. Mr. Chairman, as a matter of fact, I 
have an appointment with Mr. Mueller, so I am going to ask to 
be excused and for the first time, I think, end before my red 
light went off.
    Thank you very much.
    Chairman Leahy. I appreciate the Senator's involvement. 
This is a matter about which she has raised numerous and 
valuable questions in the past, which I appreciate.
    Again, I would emphasize this is not a case of us ganging 
up on the FBI. Everybody here has a great deal of appreciation 
for some of the tremendous things that the FBI has done in the 
past and continues to do today. Unfortunately, many of the 
things they do the best we can't even talk about because we 
want to make sure they keep on doing it. So we should note 
that.
    We do want to make sure, though, with all the money being 
spent, that we are bringing them into the 21st century, as Mr. 
Dies and Mr. Senser have said, needs to happen in the FBI's 
information technology and security systems. And what Mr. Kelly 
has said, of course, has been to reflect some management 
things. Sometimes, we have management by inertia, or we can 
have management by innovation, and I would like to have more 
management by innovation and less by inertia.
    So I thank the Senator from California, and I would turn to 
the Senator from Washington State.
    Senator Cantwell. Thank you, Mr. Chairman, and thank you 
for holding this very important Committee hearing. I apologize, 
having two other Committee assignments this morning, that I 
wasn't here to hear your testimony in person, but I have 
reviewed them and have a few questions for Mr. Dies and Mr. 
Senser.
    I see in the background, Mr. Senser, that you were formerly 
with the CIA and that was for a period of years, is that 
correct?
    Mr. Senser. I am actually detailed to the FBI from the CIA 
and I am an 18-year security veteran with the CIA.
    Senator Cantwell. And, Mr. Dies, your background prior to--
    Mr. Dies. Thirty years with IBM.
    Senator Cantwell. Obviously, we are here reviewing a number 
of concerns about a variety of cases and also information about 
equipment and information. And I think a lot of us probably 
came with a great deal of concern and anxiety.
    Having read your testimony, I feel like we have just found 
out that where there is smoke, there is fire. That is, that the 
system security and level of what I would call ``network 
assurances'' and a variety of things that are probably in--and 
I want to get to this question--other agencies like the NSA or 
the CIA are at much higher levels of sophistication than they 
are at the FBI. What we are hearing today is basically we are 
at a very, very elementary level. In fact, the things that have 
exploded into the public realm really do signify a much greater 
underlying problem here. That is my assessment of reading your 
testimony.
    When we start with Trilogy is basically getting you system 
functionality. It is not security. It is getting you a software 
system and ease of use. So I wish I was wrong on that 
assessment, but I think I am right.
    I don't know if you care to comment on that first 
statement?
    Mr. Dies. I think the sad news is you are absolutely 
correct.
    Mr. Senser. And from the security standpoint, it is 
somewhat complex, but it gets back even to the general culture 
of security at the FBI which has to be changed.
    Senator Cantwell. Maybe I have a different perception, and 
I don't think it is just from watching movies like ``Mission 
Impossible'' or ``Code Breakers'' or what have you, but I 
definitely get a sense that the NSA and the CIA, who are in 
similar, related businesses, have much more sophisticated 
communications and security systems.
    Is that correct, having been with the CIA?
    Mr. Senser. For the most part, yes. Of course, there are 
always vulnerabilities, and certainly Ames was an example for 
the CIA of some vulnerabilities that were not addressed but 
that have been acted upon and the security improved 
considerably. Every lesson gives you learning points. But I 
think it is a fair statement to say that many, if not most, of 
the other agencies are ahead of where the FBI is today.
    Senator Cantwell. And why is that?
    Mr. Senser. Again, having not grown up in the FBI, it is 
hard to make a conclusion, other than there are always 
priorities and the FBI is very mission-oriented, investigative, 
operational, get the job done. Sometimes, that competes with 
security, where you are trying to protect information; you are 
trying to say, wait, before you do that, let's talk about it. 
But, again, it is a culture that we are working to change.
    Mr. Dies. I might make two comments, Senator. One is in the 
tactical operations supporting investigations, some of the 
technologies the Bureau uses are really quite sophisticated and 
quite good.
    The second point is my personal opinion would be neither 
the technology nor the security operations were of sufficient 
high priority that they got the attention they deserved over 
perhaps a decade. What we are now wrestling with is how to get 
the car on the highway and up to speed, both from a technology 
and a security standpoint. And the challenge will be to keep in 
front of everyone's minds and make sure that it doesn't get 
side-railed again once we do fix it.
    Senator Cantwell. Well, I think it is an interesting 
question, Mr. Chairman, whether it is the nature of those other 
two agencies, and the information business that they are in, if 
they might have put higher priorities on protecting their own 
information.
    But nonetheless wouldn't you say that one of the things 
that the agency should be doing is looking to those other 
agencies for best practices?
    Mr. Senser. Absolutely, and that is taking place, of 
course, with myself being detailed from the CIA. But as I 
mentioned in my statement for the record, we have already gone 
out to the CIA and brought in somebody to specialize on the 
protection of sensitive, compartmented information and other 
very sensitive information.
    We have gone out to the NSA and brought somebody in to 
specialize on security education and awareness, which is one of 
the most beneficial areas you can focus on in terms of getting 
a return on your investment. And we have somebody else coming 
in from the CIA that is going to take over the management of 
the physical, technical and information security areas, 
reporting to me.
    So we are drawing on the community. We have benchmarked, we 
have gained best practices, and everybody has been very 
cooperative and eager to help us get this car back on the road 
and moving in the right direction.
    Mr. Dies. The good news, if there is good news here, 
Senator, is that other agencies and other businesses know how 
to do this, and we have to import best practices, not reinvent 
some of the practices. So whether it is defense in depth from 
the Defense Department or NSA, CIA, ATF, there are people who 
are willing to help us and, to date, have been willing to do so 
when asked.
    Senator Cantwell. I didn't see that quite outlined in your 
section on security here, but do you have something more 
detailed here about the steps for--
    Mr. Senser. I do talk in the statement about bringing other 
professionals in. What I didn't go into detail in the statement 
on was the specific focus areas that we have identified, as 
well as the details of the enhancement plan that we have 
outlined, because of the concern for providing a detailed road 
map to somebody whose desire it would be to harm the country's 
interests.
    But as I have also mentioned, we are more than happy to 
talk to the members in private, and we have already given a 
more detailed briefing to your staffs on these areas and what 
we are doing to fix them.
    Senator Cantwell. Well, I do have another question about 
the overall network security, and again I have a sense that the 
CIA and NSA are up here and the FBI is way down here, again 
because maybe that mission wasn't clearly detailed.
    But do we have great concern today about the security of 
the system?
    Mr. Senser. Well, again, there are always pros and cons, 
and Mr. Dies can also comment, but from the standpoint of--
    Senator Cantwell. I am sorry. Your internal network is what 
I am specifically referring to.
    Mr. Senser. Right, and the good news is that it is an 
internal network and there is very little connectivity between 
the FBI system and the outside world, which makes security of 
that system an easier task to accomplish. The downside is we 
are not interoperable with a lot of areas in the Government.
    Mr. Dies. The FBI is a fairly closed system. We have had 
the NSA, for example, as late as 90 days ago do a penetration 
test. So the fort, if I can call it that, is fairly well 
insulated from the outside. That doesn't do a darn thing for 
you on the insider threat, however. So if you have an insider 
inside the fort, a Robert Hanssen or someone like that, having 
the right layers of defense externally, a defense in depth at 
the network level, so to speak, is helpful, but insufficient. 
You have to have those layers inside your systems. You have to 
have the management systems there and the practices. Those can 
be strengthened, and should be strengthened, and are part of 
the 15 recommended actions from Mr. Senser.
    Senator Cantwell. Again, I am surprised at some of this 
information that we are so far behind. It is going to take more 
than you two gentlemen, so how do we get the new Director and 
the mission of the agency to understand the significance of 
this, both from a security perspective, but also from an ease 
of use and technology perspective?
    Mr. Senser. From my standpoint, in terms of security the 
attitude and the approach starts from the top. The Director has 
got to be very adamant that this is of value, it is important, 
and that it will be followed in the agency.
    As an example, George Tenant came out and said that his 
value of security in counterintelligence is paramount, and that 
will be translated throughout the organization based on the 
values of the Director. And so by ensuring that Mr. Mueller 
also holds that value, then it will start from the top and 
change will begin to happen.
    Senator Cantwell. Thank you, Mr. Chairman. I do believe 
this is such an important issue that we should continue to 
monitor this progress and procedures and get more information 
particularly as it relates to the security of their network and 
the processes that they are undertaking.
    My sense is that you are basically turning a big ship 
around as it relates to something very critical to the 
information, and I am not sure I have seen the resources both 
from a manpower perspective and the mission focus in some of 
the documents that says we are going to get it turned. But I 
appreciate your testimony and honesty this morning.
    Chairman Leahy. Thank you.
    And I might say while the Senator is still here, Mr. Dies, 
you mentioned the NSA penetration effort. If we can be 
briefed--I would suspect that would be in a closed hearing, but 
to have our secured staff and Senators who want to be briefed 
on just what happened in that and where we are.
    Mr. Dies. No problem.
    Chairman Leahy. I think Senator Cantwell may be one who 
especially is at that briefing because she has more expertise 
in this than many of the rest of us, but I know I would be very 
interested in seeing how that went.
    Senator Schumer?
    Senator Schumer. Well, thank you, Mr. Chairman, and I want 
to thank you for holding the hearing. I apologize to the 
witnesses for being in and out of the room. They were marking 
up ILSA, the Iranian and Libyan Sanctions Act, in Banking at 
the same time that this was going on. I am the sponsor of that.
    I want to join my colleagues in asking a whole lot of 
questions here. I come as somebody who has been a friend of the 
FBI for a long, long time, but yesterday's revelation that 
hundreds of FBI firearms and computers have been lost and 
stolen is not the first bit of trouble we have seen. If it were 
just this last revelation, one would say, OK, they made a 
mistake.
    But when it is incident after incident after incident and 
then there is this one, sub-machine guns missing and a computer 
with classified information, you have to say to yourself what 
is going on in the FBI? Is something rotten in Denmark?
    In a certain sense, it isn't just rifles or sub-machine 
guns or laptops with classified information that have somehow 
eluded the FBI; it is basic public trust. When I grew up, I was 
so proud that America had an FBI, and you would see the TV 
shows and everything else like that. And now if you look at it, 
to be honest, the FBI is just taking a beating.
    One survey reports that 40 percent of the public views the 
FBI less favorably than before, while 36 percent express doubts 
about the honesty of the FBI's methods. That is pretty 
fundamental and pretty frightening. Another poll showed that 
Americans have twice as much confidence in their local police 
as they do in the FBI, even though the most FBI is the most 
sophisticated and well-financed investigative agency in the 
world and was once the crown jewel of law enforcement.
    I always ask about law enforcement; I care about it. It has 
been a good part of my career. I asked someone very active in 
one of the homicide bureaus in New York City what they thought 
of the FBI, and the answer was that they would rather have a 
New York City Police detective on a homicide case now than an 
FBI agent because the FBI agent had so many bosses to report to 
and so many hoops to jump through that they were losing 
effectiveness.
    I think somebody said it here, but in a certain sense the 
FBI has become a place where the sum is less than the parts. 
The individual agents are great. The individual personnel from 
the bottom to the top are great. Like Orrin Hatch, I have been 
an admirer of Louis Freeh, even though I have disagreed with 
him on certain things. But when you add it all up and put it 
together, something is wrong. Perhaps it has expanded too 
quickly. Perhaps the focus has been on new things like 
terrorism, where you have done a very good job. But something 
is wrong.
    But I still have hope. I believe that while the FBI may be 
down right now, it is certainly not out. The personnel are too 
good, the tradition is too strong, and the Bureau functions are 
so much more needed today than they even were 20 or 30 years 
ago that we still want it to work.
    I believe the President's appointment of Bob Mueller will 
give the FBI just what it needed, a serious, conscientious 
person who knows how to burrow through, who is very familiar 
with law enforcement, who doesn't have a big name and a 
different agenda, but who will roll up his sleeves and get down 
in there.
    I guess what I would say to sum it up in a certain sense is 
that the FBI's recent struggles remind me of Tiger Woods. He is 
the greatest golfer in the world, but he gets in a slump, and 
it is instructive to see what he does when he is struggling. He 
goes back to the basics. He starts working on his swing and his 
game. He breaks his swing down, builds it back up, and he comes 
back better than ever.
    With this enormous and now hugely complex agency, that is 
what we have to do. It is not just a little thing here or a 
little thing there. It is just too much, and so I believe that 
the Bureau needs an outside, comprehensive review from all 
angles. And I know that our Chairman has been pushing this kind 
of thing, and this hearing is indicative of it.
    Last month, Senator Hatch and I introduced the FBI Reform 
Commission Act. The bill will set up a blue-ribbon commission 
of law enforcement experts to look at all aspects of the FBI. 
This is not just an annual check-up. About once every 5 years, 
at least when you get to be my age, you go to a physician and 
you get a top-to-bottom. They look at you, they turn you inside 
out, they poke you in every different place to see how you are. 
That is what the FBI needs, not every 5 years, but certainly 
every 20 or so.
    That is what this commission is supposed to do. It is more 
than a tune-up; it is a fundamental and structural examination 
to look at what kind of overhaul is needed. It will operate 
outside the FBI. It should be composed of law enforcement 
experts who don't have an axe to grind.
    We do a good job here. There is no one better than the 
Chairman at being fair in holding hearings, but we can't hold 
hearings everyday on every segment of the FBI. That is why I 
feel this kind of comprehensive look is needed, and I hope we 
can do it. I have introduced this, as I mentioned, with my 
friend Orrin Hatch, from Utah. It is hardly partisan. Both of 
us have been regarded as pro-law enforcement.
    I guess my question to all three of you is what is your 
view--I am not asking you to comment on our specific 
legislation, but what is your view of the need, given that we 
have had so many different mistakes, for an outside look by 
experts, you know, a 6-month or a 9-month look?
    I asked Mr. Mueller this, and he is obviously not allowed 
to say that much right now in the sensitive time that he is, 
but I think he was very positively disposed toward something 
like this.
    So I would first ask Ray Kelly, who is not with the agency 
and is somebody who is a great law enforcement leader, and then 
Mr. Dies and Mr. Senser what they think of that type of idea.
    Mr. Kelly. Senator, I think that idea is sound. I must say 
I have had only positive experiences with the FBI for a long 
time. The thing that comes most readily to mind is the World 
Trade Center bombing. I was Police Commissioner of New York 
when that took place. We worked very closely with the FBI. I 
have had great admiration for them and a lot of friends of mine 
are in the Bureau. But I think every organization can use an 
examination like that. I think it is wise, so I certainly 
support the concept.
    Senator Schumer. I would just say to you, Mr. Kelly, an 
example of how good the FBI is in the World Trade Center 
bombing and in terrorism. Back in 1993, I had been always 
focused a little bit on the terrorism issue and I said we are 
going to have some kind of incident here, and unfortunately it 
happened much worse than anybody thought in terms of the World 
Trade Center.
    At that point, the FBI, not due to itself--they had been 
under pressure from Congress and had taken all sorts of people 
out of counterterrorism and all these other things, and they 
were really weak. And they built themselves up, and I think 
everyone who has looked at the counterterrorism measures that 
the FBI has taken gives them an A or an A-plus, and that is 
what gives us so much hope in the agency. It just seems that in 
some of the basic and other more fundamental areas, they do 
need that reexamination, restructuring and revivification, if 
you will.
    What do you think of it, Mr. Dies? Just a general comment 
because I know you can't comment on specific legislation.
    Mr. Dies. I understand. I am not a law enforcement 
professional, but I think back to the laboratory at the FBI 
which got in serious trouble. They brought in an outsider to 
run it, Dr. Kerr. I think they understand that the base 
technology they provide to their agents is insufficient. The 
security things aren't there. As a private citizen, that was a 
scary thought to me, and perhaps I can help for a couple of 
years and get them started.
    In the security operations, you have a CIA fellow sitting 
to my left. I think there is value in an agency--whether it is 
hiring external management for a period of time or whether it 
is oversight and other ideas, any company, any agency can 
benefit from ideas and inspection. It is how you choose to do 
that, and the choice on that is yours.
    Senator Schumer. Mr. Senser?
    Mr. Senser. Senator, I also agree that outside ideas and 
perspectives bring value to the organization, so it should be 
welcomed.
    Senator Schumer. Mr. Chairman, I thank you. I know these 
witnesses have been here a long time, as have you. I do have 
one or two other specific questions and I would ask permission 
to submit those in writing.
    Chairman Leahy. Thank you, and the record will be open for 
that.
    We will recess for just 2 minutes to give the panels a 
chance to change. I want to thank Commissioner Kelly, Mr. Dies 
and Mr. Senser for being here. As you can tell from the 
questions, we will probably see you again, as we are going to 
be doing some follow-up. Some of the things we have suggested 
will have to be done in a classified session and we will 
arrange a time when we can do that in a secure room.
    Mr. Kelly, it is always good to have you here. You have 
honored law enforcement in each of the hats you have worn and I 
appreciate you being here.
    [The Committee stood in recess from 12:23 p.m. to 12:29 
p.m.]
    Chairman Leahy. We will put a statement by Senator Kohl and 
a statement by Professor Samuel Walker and a September 1999 
report by the FBI Law Enforcement Ethics Unit on double 
standards mentioned in the testimony, in the record.
    I am delighted, Mr. Roberts, Mr. Werner, Mr. Perry, and Mr. 
Kiernan, that you are here. I apologize that it has taken 
longer than I thought and I appreciate you spending the time to 
sit here. It is an important hearing. I am already getting 
calls from a number of the Senate offices that have been 
watching it on our closed circuit TV, so the hearing is 
generating a great deal of interest.
    Mr. Roberts, why don't we begin with you, sir?

      STATEMENT OF JOHN E. ROBERTS, UNIT CHIEF, OFFICE OF 
 PROFESSIONAL RESPONSIBILITY, FEDERAL BUREAU OF INVESTIGATION, 
                        WASHINGTON, D.C.

    Mr. Roberts. Mr. Chairman, thank you very much. I 
appreciate the opportunity to appear before the Committee to 
discuss serious issues facing the Federal Bureau of 
Investigation, and in particular what we collectively do and 
can do to make the FBI better, restoring credibility to this 
great organization. Of significant importance is the ability of 
the FBI to conduct aggressive, objective internal 
investigations. Therefore, the protection of those employees 
assigned internal affairs work for the FBI needs to be 
considered.
    I am grateful to be an FBI employee. I am proud to be 
associated with the tremendous men and women of this great 
organization. The efforts of the agents and support personnel 
are remarkable, and the work that is conducted by this 
organization everyday is impressive.
    I am currently the Unit Chief for Internal Investigations 
in the Office of Professional Responsibility, the internal 
affairs component of the FBI. The support and agent employees 
assigned to OPR are competent, dedicated and hard-working. I am 
proud to serve with them.
    Resources in the OPR of the FBI, not unlike any other 
organization, are strained. In what was a record number of 
internal investigations in 2000, OPR supervisory special agent 
positions were recently reduced by three. This is a reduction 
difficult to understand, given the record number of internal 
investigations conducted by OPR and the need to conduct ethics 
training.
    Like so many employees in the FBI, I have served in a 
number of assignments. In 1995, I was named as one of two 
inspectors in charge of the Ruby Ridge investigation, an 
investigation conducted under the direction of the OPR for the 
Department of Justice and the Acting United States Attorney for 
the District of Columbia.
    Today, you have before you individuals who have substantial 
experience in FBI internal affairs investigations. I am 
concerned with the perception of a double standard in the FBI's 
disciplinary process and the consequences for those FBI 
employees who conduct such investigations. I believe the 
ability to conduct complete, objective and competent 
investigations and the leadership of the FBI has been 
questioned.
    Of concern to me, and what should be of concern to others 
is the apparent deference paid to Senior Executive personnel 
who are found to have violated FBI policy, rules and 
regulations. There is the perception that a double standard of 
punishment exists in the FBI. This should be alarming to all of 
us because not only is it fundamentally unfair, but more 
important, if the rank-and-file of any law enforcement 
organization believes that their executive management condones 
or approves of misconduct, that is a precursor for corruption, 
and that, sir, is destructive.
    I would like to briefly comment on two high-profile FBI 
internal investigations, the Ruby Ridge incident and subsequent 
investigations into allegations of misconduct on the part of 
FBI employees and a retirement party attended by senior 
executives who falsely claimed reimbursement for travel to that 
event.
    Most people are aware of the August 1992 incident at Ruby 
Ridge, Idaho, involving the FBI and other law enforcement 
agencies. In 1993, following a trial in this matter, the 
Department of Justice and the FBI initiated inquiries into 
numerous allegations of misconduct by Government personnel in 
connection with the standoff at Ruby Ridge. These inquiries 
resulted in disciplinary action in January 1995 against 
numerous FBI employees.
    In May 1995, the Department of Justice Office of 
Professional Responsibility received a letter from one of the 
FBI employees disciplined in that matter alleging that the 
person selected by the FBI to head the Ruby Ridge inquiry had 
manipulated the inquiry to find scapegoats and to avoid holding 
higher-ranking FBI officials responsible for the August 1992 
events at Ruby Ridge, and that the person heading the inquiry 
had purposefully attempted to steer the inquiry away from any 
findings unfavorable to higher-level executives in the FBI.
    In May 1995 while I was serving in the Boston Division of 
the FBI, personnel from OPR, Justice Department, met with the 
Director of the FBI, telling him that an investigation into 
these most recent allegations was necessary. The Department of 
Justice personnel from OPR requested Mr. John L. Werner, to my 
left, and me to conduct the investigation. The Director of the 
FBI agreed to this request and ordered that Mr. Werner and I 
conduct the investigation, along with the Office of 
Professional Responsibility, Department of Justice.
    In May 1995, we were assigned to the Department of Justice, 
and shortly thereafter we were named inspectors in charge of 
the Ruby Ridge investigation, the second investigation of the 
Ruby Ridge incident. After reviewing the reports prepared 
during the first Ruby Ridge investigation, Mr. Werner and I 
concluded that crucial interviews were not conducted and very 
serious allegations of misconduct not thoroughly investigated.
    These investigative failures resulted in a flawed 
investigative report. In my opinion, had a thorough and 
competent investigation been conducted in the first 
investigation, there would not have been a need for a second 
investigation.
    For example, crucial interviews were not conducted of all 
employees assigned to the Strategic Information Operations 
Center, commonly known as the SIOP. It is the command center 
for the FBI which was staffed 24 hours a day during the Ruby 
Ridge incident by numerous employees. Interviews of employees 
assigned to the SIOP were conducted, but there was not a 
written record made of those interviews.
    Additionally, information surfaced during the first 
investigation that there was an After Action Conference 
following the Ruby Ridge incident and an After Action Report 
may have been prepared. The After Action Report could not be 
located and the investigation did not pursue that evidence. As 
we know now, the report was destroyed and a senior executive 
was convicted for his part in the destruction of that document.
    In approximately September 1995, this investigation was 
referred to the Acting United States Attorney for the District 
of Columbia and continued until July 1997. This investigation 
again resulted in the conviction of an FBI senior executive for 
the destruction of the After Action Report.
    At the conclusion of the criminal investigation, I 
requested that the Acting United States Attorney for the 
District of Columbia refer to the Office of Professional 
Responsibility, Department of Justice, certain allegations of 
misconduct that arose during the investigation but did not rise 
to the level warranting criminal prosecution. Those referrals 
were made.
    In September 1997, under the direction of the Department of 
Justice, there was an administrative investigation commenced 
into those allegations. In June 1999, the investigation was 
completed and the findings, along with recommendations for 
discipline, were forwarded to the Department of Justice, 
Justice Management Division, by the Justice Department OPR. In 
January 2001, the Assistant Attorney General for Administration 
of the Department of Justice found no misconduct on the part of 
FBI employees.
    In the Ruby Ridge matter, Mr. Werner and I investigated 
allegations of serious misconduct on the part of some senior 
executives who were very popular individuals. As such, they had 
a great deal of support from many in the FBI. Consequently, 
almost immediately upon being assigned to the Ruby Ridge 
investigation, a senior executive in the Boston Division where 
I was assigned demanded that I return to the Boston Division 
and discontinue my assignment to the Ruby Ridge investigation.
    When I told him that was not possible, he threatened to go 
to the Deputy Director of the FBI and have me removed from the 
investigation. This senior executive questioned the need for 
the investigation and his behavior escalated to where he wanted 
virtually nothing to do with me and then set out to take out 
his anger on my wife, a support employee in the Boston 
Division. The senior executive's actions against my wife and me 
required that we be transferred from that division.
    Throughout the assignment to the Ruby Ridge investigation, 
Mr. Werner and I received what we perceived to be threats from 
senior executives. We were told that we did not work for the 
FBI.
    I see that my time is up.
    Chairman Leahy. No, that is all right. Go ahead.
    I was just going to say nobody is more cooperative with 
photographers than I am, but why don't you take the pictures 
you need and then let us have the witness table to ourselves? 
You have become sort of an integral part of it. Using 180-, 
200-, 300-millimeter lenses, you don't have to be right on top 
of the witnesses. It is pretty distracting for those of us up 
here. If you could do it in a way that you don't block either 
the witnesses or us, you are welcome to stay, but the hearing 
is primarily so that the Senate can get this information.
    Go ahead, Mr. Roberts.
    Mr. Roberts. Mr. Werner received what we perceived to be 
threats from some senior executives. We were told that we did 
not work for the FBI, that our assignment to the Ruby Ridge 
investigation could have an impact on our careers, and that 
being assigned to the investigation would not be good for us in 
the end. At one point, a retired senior executive made the 
comment that the assignment to the Ruby Ridge investigation was 
not good for my career.
    I bring this information to light just to illustrate the 
effort on the part of some senior executives, not all, but some 
to have Mr. Werner and me removed from the Ruby Ridge 
investigation. What occurred during the Ruby Ridge 
investigation should not be viewed as an isolated incident. 
There are various subtle and not so subtle actions taken which 
may impact an employee's career.
    The second one was a retirement party and was initiated in 
late 1997 based on allegations that senior executives traveled 
to the retirement party and submitted expense vouchers 
containing false information. This investigation found that 
false vouchers were submitted by these individuals, but the 
adjudication findings by their peers were that these employees 
failed to pay attention to detail. And they received letters of 
censure, a relatively light disciplinary action. Similar cases 
of voucher fraud committed by non-Senior Executive personnel 
result in different findings, harsher punishment.
    It is significant to point out that there has been a change 
to the disciplinary process so that senior executives now are 
part of one disciplinary process for the FBI, which is a 
tremendous effort and I think it is applauded by all.
    I believe that arrogance is a great part of the problem in 
the FBI today. Oversight is the first step and, for most, a 
welcome step in renewing confidence in the FBI. The cure for 
the FBI's problems is strong leadership. What we in the FBI 
have to learn is that protecting the organization rather than 
acknowledging errors up front is not always the best course of 
action. Hoping that problems will go away or that no one will 
find out about the mistakes is destructive.
    Although we in the FBI refer to the organization as ``our 
FBI,'' in fact, the FBI belongs to all of us in this great 
country. We serve the American people and they have an absolute 
right to an FBI that is corruption-free and operates at a high 
expectation of excellence.
    The Ruby Ridge and the retirement party matters completely 
destroy any concept of fundamental fairness. In my opinion, it 
is one thing to believe that you are the greatest law 
enforcement organization in the world, but it is quite another 
to voice that opinion. I believe that such statements offend 
every other law enforcement officer in the world who places his 
or her life on the line each and every day. We need to let our 
actions and accomplishments speak to our greatness.
    It was during this Committee's hearing in June 2001 that 
whistleblower protection for FBI employees was discussed. I do 
not have a great deal of confidence in the protection of FBI 
employees for whistleblower complaints. This lack of confidence 
is due to in large part to a senior executive representing to 
me that he had a visceral dislike for the whistleblower statute 
and feels it is a bad law.
    I think the belief of this individual is that employees are 
able to make allegations that are later proven to be 
unsupported by evidence and the employee is protected for those 
disclosures. I do not believe that anyone is going to admit to 
retaliating against an employee for making protected 
disclosures, and it is rare that a smoking gun can be found 
which would prove any act of retaliation.
    This concludes my testimony. I am more than happy to answer 
any questions you may have.
    [The prepared statement of Mr. Roberts follows:]

   Statement of John E. Roberts, Unit Chief, Office of Professional 
   Responsibility, Federal Bureau of Investigation, Washington, D.C.

    Mr. Chairman, Senator Hatch, and members of the Committee on the 
Judiciary:
    I appreciate the opportunity to appear before the Committee today 
to discuss what I believe are serious issues facing the Federal Bureau 
of Investigation (FBI), and, in particular, what we can collectively do 
to make the FBI better, restoring credibility to this great 
organization. Of significant importance is the ability of the FBI to 
conduct aggressive, objective internal investigations of FBI employee 
misconduct. Therefore, the protection of those FBI employees assigned 
to conduct the internal affairs work for the FBI needs to be 
considered.
    I am grateful to be an FBI employee and I am proud to be associated 
with the men and women of this great organization. The efforts of the 
agents and support personnel are remarkable and the work that is 
conducted by this organization every day is impressive.
    I am currently the Unit Chief (UC) in the Office of Professional 
Responsibility (OPR), FBI, responsible for internal investigations, a 
position I have held since July 1997. I have served in the Louisville, 
Miami and Boston Divisions of the FBI, as a Supervisory Special Agent 
(SSA) in the OPR, FBI, the Inspection Staff, Inspection Division, and 
as one of two Inspectors in Charge of the Ruby Ridge investigation 
under the direction of the OPR, Department of Justice (DOJ) and the 
Acting United States Attorney for the District of Columbia.
    The OPR, FBI is composed of two Internal Investigative Units 
(IfUs), two Adjudication Units (AUs), the Law Enforcement Ethics Unit 
(LEEU), and an Administrative Unit, all staffed by competent, hard 
working and dedicated SSAs and support employees. The OPR operates 
under the direction of an Assistant Director (AD) and a Deputy 
Assistant Director (DAD). My responsibility is to review all 
allegations of employee misconduct, determine the proper course of 
action, and to conduct, or, direct the conduct of all FBI internal 
investigations. I am the first phase in the disciplinary process of the 
FBI. At the conclusion of the internal investigative phase, the 
investigative results are reviewed for completeness by the IIUs and are 
referred to the AUs for a decision on the necessity for discipline. 
Approximately 75% of all internal investigations are delegated to field 
and FBI Headquarters (FBIHQ) divisions for investigation. The remaining 
25% of the internal investigations are conducted by the IIUs, because I 
have determined that there is an appearance of a conflict, or, actual 
conflict with the field or FBIHQ division conducting the investigation, 
the allegation of misconduct involves a Senior Executive Service (SES) 
employee, or, senior management of the division, the allegation of 
misconduct appears to be a matter that may generate substantial public 
interest, and when field divisions lack sufficient resources and/or 
request OPR's assistance in conducting an investigation. Resources in 
OPR, not unlike any other organization, are strained. In what was a 
record number of internal investigations in 2000, OPR SSA positions 
were recently reduced by three. This is a reduction difficult to 
understand, given the record number of investigations conducted by OPR, 
the need for an internal affairs component, and the need for the LEEU 
to conduct ethics training.
    You have before you today individuals who have substantial 
experience in FBI internal affairs investigations. I am employee who is 
concerned with perception of a double standard in the disciplinary 
process in the FBI and the consequences for those FBI employees who 
conduct such investigations. I believe the ability to conduct complete, 
objective and competent investigations and the leadership of the FBI 
has been questioned. Of concern to me is the apparent deference paid to 
SES personnel who are found to have violated FBI policy, rules and 
regulations. Although it is not likely that non-SES FBI employees know 
the results of SES internal investigations and the discipline these 
executives receive, it is the perception that there is a double 
standard of punishment in the FBI. This should be alarming to all of 
us, because if the rank and file of any law enforcement organization 
believe that their executive management condones or approves of 
misconduct, that is a precursor for corruption.
    Therefore, I would like to briefly comment on two high-profile FBI 
internal investigations. The first is the Ruby Ridge incident and the 
subsequent investigation into allegations of misconduct on the part of 
FBI employees. In August 1992, the incident at Ruby Ridge, Idaho, 
involving the FBI and other law enforcement agencies, occurred. In 
1993, following the trial where Randall Weaver and Kevin Hams were 
acquitted, the DOJ and the FBI initiated inquiries into numerous 
allegations of misconduct by government personnel in connection with 
the standoff at Ruby Ridge. These inquiries eventually resulted in 
disciplinary action in January 1995, against numerous FBI personnel.
    On May 3, 1995, the OPR/DOJ received a letter from one of the FBI 
employees disciplined as a result of this employee's actions at Ruby 
Ridge. The employee alleged that the person selected by the FBI to head 
the inquiry which resulted in the discipline of this employee, had been 
manipulated to find scapegoats and to avoid holding higher-ranking FBI 
officials responsible for the August 1992 events at Ruby Ridge. In 
particular, this employee alleged that the person heading the inquiry 
had purposely attempted to steer the inquiry away from any findings 
unfavorable to higher level executives of the FBI.
    In May 1995, while serving in the Boston Division of the FBI, 
personnel from the OPR/DOJ met with the Director of the FBI and advised 
the Director that an investigation into the allegations raised in the 
disciplined FBI employee's letter was necessary. The OPRJDOJ personnel 
requested the Director to assign Mr. John L. Werner and me to conduct 
the investigation. The Director ordered that Mr. Werner and I conduct 
the investigation, and, in May 1995, we were assigned to the OPR/DOJ, 
and shortly thereafter named as Inspectors in Charge of the Ruby Ridge 
investigation, the second investigation of the Ruby Ridge incident, an 
investigation that was administrative in nature. Mr. Werner and I 
reviewed the reports prepared during the first Ruby Ridge investigation 
and concluded that significant interviews were not conducted and 
significant allegations of misconduct were not thoroughly investigated. 
These investigative failures resulted in flawed investigative results. 
In my opinion, had a thorough and competent investigation been 
conducted, there would not have been a need for this second 
investigation. For example, significant and critical interviews were 
not conducted of all employees assigned to the Strategic Information 
Operations Center (SIOC), the command center for the FBI which was 
staffed 24 hours a day, during the Ruby Ridge incident. Those 
interviews, of a few employees assigned to the SIOC, were not recorded 
in written form, either in signed, sworn statements or FD-302s, which 
is the FBI's report of interview form. Additionally, information had 
surfaced that there was an After Action Conference following the Ruby 
Ridge incident and a After Action Report may have been prepared. The 
After Action Report could not be located and the investigation did not 
pursue that evidence. As we now know, the report was destroyed and an 
SES employee was convicted for his part in the destruction of that 
document.
    The Ruby Ridge investigation to which Mr. Werner and I were 
assigned became a criminal investigation in approximately September 
1995, and continued under the direction of the Acting United States 
Attorney for the District of Columbia. That investigation continued 
until July 1997, and resulted in the conviction of an FBI SES employee. 
At the conclusion of the criminal investigation, I requested that 
referrals be made by the Acting United States Attorney for the District 
of Columbia to the OPR/DOJ of serious misconduct issues that were noted 
during the criminal investigation and which did not warrant criminal 
prosecution. These referrals were made and an administrative 
investigation was initiated under the direction of the OPR/DOJ in 
approximately September 1997. This investigation addressed serious 
misconduct allegations against numerous FBI employees, to include seven 
SES employees. In June 1999, the investigation was completed and the 
findings, along with recommendations for discipline were forwarded by 
OPR/DOJ to the Justice Management Division, DOJ, for adjudication. In 
January 2001, the Assistant Attorney General for Administration, DOJ, 
found that there was no misconduct on the part of FBI employees. I find 
this conclusion to be outrageous and I believe anyone who reviews this 
matter will find the conclusions alarming.
    The Ruby Ridge investigation to which Mr. Werner and I were 
assigned investigated allegations of serious misconduct on the part of 
some SES personnel who were popular individuals. As such, they had a 
great deal of support from many in the FBI. Consequently, almost 
immediately upon being assigned to the Ruby Ridge investigation, an SES 
employee in the Boston Division where I was assigned, demanded that I 
return to the Boston Division and discontinue my assignment to the Ruby 
Ridge investigation. When I told him that was not possible, he 
threatened to go to the Deputy Director of the FBI and have me removed 
from the investigation. This SES employee questioned the need for the 
investigation and his behavior escalated to where he wanted nothing to 
do with me and then set out to take his anger out on my wife, a support 
employee also assigned to Boston Division. This SES employee's actions 
against my wife and me required that we be transferred from that 
division. Throughout our assignment to the Ruby Ridge investigation, 
Mr. Werner and I received, what we perceived to be threats from some 
SES personnel. We were told that we did not work for the FBI, that our 
assignment to the Ruby Ridge investigation could have an impact on our 
careers, and that being assigned to the investigation would not be good 
for us in the end. At one point, a retired SES person made the comment 
that the assignment to the Ruby Ridge investigation was not good for my 
career. I bring this information to light to illustrate the effort on 
the part of some SES personnel to have Mr. Werner and me removed from 
the Ruby Ridge investigation.
    What occurred during the Ruby Ridge investigation should not be 
viewed as an isolated incident. There are various subtle and not so 
subtle actions taken which may impact an employee's career. For 
example, within the last year an SES employee made unprofessional 
comments to two Inspectors during an inspection. The comments could 
have been interpreted as a threat to influence the careers of the 
Inspectors. Additionally, a review of career board activities will 
likely reveal that some career board members who have been subjects of 
internal investigations will sit in judgement of the investigator who 
conducted the internal investigation.
    The second investigation I will briefly discuss was initiated in 
late 1997, based upon allegations that seven SES personnel traveled to 
a retirement party and submitted expense vouchers containing false 
information. This investigation found that false vouchers were 
submitted by these individuals, but the adjudication findings by their 
peers were that these employees failed to pay attention to detail and 
they received letters of censure, a relatively light disciplinary 
action. Violations such as voucher fraud committed by non-SES personnel 
result in different findings and harsher punishment.
    It is significant to point out that investigations of alleged 
misconduct as that found in the Ruby Ridge and retirement party 
matters, can likely result in an employee not being promoted, not 
receiving awards, and not receiving a requested transfer. In the two 
cases I just discussed, some of the SES employees received promotions 
and thousands of dollars in cash awards during the pendency of the 
investigations. Recently, the SES disciplinary policy was changed so 
that now the FBI has one disciplinary process for all employees.
    It is my impression that many in the FBI know of the problems the 
organization faces. I believe that arrogance is a great part of the 
problem in the FBI today and that oversight is the first step in 
renewing confidence in the FBI. All of us in the FBI should welcome 
oversight. The cure for the FBI's problems is strong leadership. I am 
not sure if a separate Inspector General will be a better solution for 
the FBI, or, if the Inspector General for DOJ is the solution. What we 
in the FBI have to learn is that protecting the organization is not 
always the best course of action. It is better to acknowledge errors up 
front, rather than hoping they will go away or that no one will find 
out about the mistakes. Although we in the FBI refer to the 
organization as our FBI, in fact, the FBI belongs to all of us in this 
great country. We serve the American people and they have a right to an 
FBI that is corruption free and operates at a high expectation of 
excellence. In my opinion, it is one thing to believe that the you are 
the greatest law enforcement organization in the world, but it is quite 
another to voice that opinion. I believe that such statements offend 
every other law enforcement officer in the world who places his or her 
life on the line each and every day. We need to let our actions and 
accomplishments speak to our greatness.
    It was during this Committee's hearing on June 20, 2001, that 
Whistleblower protection for FBI employees was discussed. I do not have 
a great deal of confidence in the protection of FBI employees for 
Whistleblower complaints. This lack of confidence, in a large part, is 
due to a senior executive of the FBI telling me that he has a visceral 
dislike for the Whistleblower statute and feels that it is a bad law. I 
think his belief is that employees are able to make allegations that 
are later proven to be unsupported by evidence, and the employee is 
protected. Although I do not share this belief, I do not believe that 
anyone is going to admit to retaliating against an employee for making 
protected disclosures and it is rare that a ``smoking gun'' can be 
found.
    This concludes my prepared testimony. I am happy to answer any 
questions you may have.

    Chairman Leahy. Thank you, Mr. Roberts.
    I would note for the record that I and other members of 
this Committee discussed with the soon to be nominated Director 
of the FBI, Mr. Mueller, the fact that there would be this 
panel and probably subsequent panels testifying. And I asked 
for his personal assurance that he would make absolutely sure 
retaliation did not take place. I also made it very clear that 
there would be a very strong bipartisan reaction from Senator 
Grassley, myself and others if that happened.
    I appreciate your testimony, Mr. Roberts. If you could 
stand by, we will go to Mr. Werner.

    STATEMENT OF JOHN WERNER, BLUE SKY ENTERPRISES OF NORTH 
              CAROLINA, INC., CARY, NORTH CAROLINA

    Mr. Werner. First, I want to thank the Committee and the 
Chairman for the invitation to testify here today. I am a self-
employed general contractor in Cary, North Carolina. After more 
than 27 years of service, I retired from the FBI in 1999. 
During my career, I investigated criminal wrongdoing in 
Washington, D.C., served as a foreign counterintelligence 
supervisor, worked in the Office of Professional Responsibility 
as a supervisor, and supervised the Raleigh resident agency 
until my retirement.
    Additionally, I had extensive experience in internal 
affairs investigations, beginning about 1985. This included my 
being the supervisor responsible for the investigation of 
alleged wrongdoing against then-FBI Director William Sessions 
and his executive assistant.
    In another case, with Mr. Roberts, as he has said, I was 
ordered back from my office in Raleigh to investigate cover-up 
allegations in the Ruby Ridge matter. I was also involved in 
numerous other internal investigations of FBI management.
    I realize we are here today to address FBI management 
reforms and to discuss FBI problems and potential fixes for 
these problems. It is important not to forget the dedicated 
hard work performed by 26,000 FBI employees who successfully 
investigate thousands of cases each year. There are things 
broken in the FBI, primarily management-related, but the basics 
of how agents conduct their investigations are not broken. The 
rank-and-file employees are hitting on all cylinders, albeit 
frustrated over the inefficiencies of management, broken or 
non-existent information systems, and concerns over being held 
to a higher standard than senior management.
    Management problems in the FBI begin with the Senior 
Executive Service. It would not be fair to suggest all members 
of the SES have been engaged in abuses of authority described 
herein because the majority are sincere, dedicated law 
enforcement professionals who have made many sacrifices for the 
Bureau. My remarks are being addressed to that vocal minority 
of SES members, often referred to as ``the club'' by street 
agents, who are motivated by self-preservation and self-
interest at any cost. For the most part, these SES personnel 
are not motivated by the best interests of the FBI.
    In testimony before this Committee, former Senator John 
Danforth suggested that an element of management misconduct 
concerning the failure of disclosing wrongdoing has its roots 
in employees' desire not to embarrass the Bureau. While there 
may be an element of this involved, I would suggest that 
protecting their self-interest is primary and the excuse of not 
embarrassing the Bureau is a convenience to justify that 
misconduct.
    Hiding behind a wall of arrogance, senior managers hold the 
belief that they always know what is best for the Bureau. These 
SES members are intolerant of any suggestion that their way is 
wrong. They use intimidation and retaliation against anyone who 
would be so impertinent to challenge their interest.
    SES personnel have retailed against agents who have been 
assigned investigations of SES misconduct. Special Agent 
Roberts has had his career seriously impaired because of his 
determined hard work on a number of high-profile cases 
involving SES personnel. These retaliatory practices send a 
chilling message to any other agent who might be charged with 
similar investigations.
    There are instances where SES executives have taken action 
or avoided action to protect their own from career perils. In 
the first investigation of Ruby Ridge, SES inspectors sought to 
protect certain fellow peers from administrative discipline by 
conducting a sloppy and incomplete investigation. At the same 
time, they were most willing to hang lower-tier employees out 
to dry.
    Another way the SES members protect themselves is by 
handling SES misconduct adjudications differently from other 
cases. Until recently, the SES Board adjudicated SES matters. 
The discipline for SES infractions was typically somewhat less 
harsh to much less harsh than that given to non-SES employees 
charged with the same offense. This double standard has 
debilitated rank-and-file employees' morale and, as will be 
noted later, is one of the reasons quality agents are 
disinclined to enter the career development program.
    There are many recognized root problems in the management 
structure of the FBI that senior management has neglected to 
seriously address. The SES staff resists changing a system that 
benefits them and ensures excessive headquarters control over 
field operations. These problems have created disincentives 
that dissuade quality agents from participating in career 
development.
    There are significant barriers that discourage agents from 
wanting to participate in career development. For example, to 
promote to assistant director, an agent must make a minimum of 
six career moves, most requiring family relocation, and at 
least three tours of duty at headquarters. This gives 
headquarters senior management a stranglehold over these rising 
agents, requiring absolute allegiance to the SES staff.
    Another FBIHQ issue concerns SES personnel prohibiting non-
agent professional staff from assuming FBI positions that 
historically have been filled by agents. Agents are expensive, 
scarce resources who are better utilized in the field. Simply 
stated, there is an abundance of FBI positions currently filled 
by agents that could be more efficiently and economically 
filled by support staff on a more consistent and permanent 
basis.
    In 1998, Special Agent Carl Christiansen, then the 
Louisville Division assistant special agent-in-charge, ASAC, 
was tasked with conducting a survey of the executive 
development selection program to determine what impacts an 
agent's decision to participate in management. The following 
are a few of the results.
    There are far more disincentives than incentives in 
participating in career development. There are too many 
transfers, inadequate financial incentives, et cetera. FBIHQ 
assignments were viewed as very negative because headquarters 
work was viewed as clerical, devoid of supervisory 
responsibility, and did little to prepare an agent for future 
assignments. Agents expressed a reluctance to become involved 
in a management system they believed to be hypocritical and 
lacking ethics.
    SA Christiansen and his Committee identified some of the 
underlying reasons for agents' disinterest in career 
development. The FBI's organizational structure, culture and 
approach to management are no longer suited to today's world. 
They recommended that the Director needed to make drastic 
changes to the structure and philosophy of management to allow 
the organization to adapt more readily to a quickly changing 
environment.
    When SA Christiansen presented the survey recommendations 
to a group of 15 SES employees, the proposals were scoffed at. 
To date, only a few minor changes have been made to the CDP as 
a result of the survey. Recently, the outgoing president of the 
FBI Agents Association, John Sennett, stated in a letter in his 
president's column in the FBIAA newsletter, ``Along with better 
information automation, the FBI must retool. We must reengineer 
our administrative and investigative practices, keep what is 
worth keeping. We also have to be aggressive in throwing away 
outdated and cumbersome administrative practices that drag down 
even the best and most energetic investigator.''
    I fully agree with both SAs Christiansen and Bennett. A 
holistic overhaul of the entire system is needed, starting with 
the multi-tiered, bloated headquarters structure which is not 
necessary. The review might start with an eye toward expanding 
the management career track in the field to enable a street 
agent to rise to ASAC without a transfer to headquarters. New 
practices along these lines may begin to attract the FBI's best 
and brightest into management.
    The blue-ribbon commission proposed by this Committee, 
intended to examine all aspects of FBI operations, is a 
positive step toward revamping the current system. I would 
encourage the commission to research the pros and cons of a 
separate pay system for Federal law enforcement. The Office of 
Personnel Management researched this in 1993 at the direction 
of Congress and issued a report.
    The management survey I mentioned above found pay 
compression at the top as a disincentive to career development. 
In addition, the survey shows that agents believe that anyone 
who volunteers to be a manager will become one because they do 
not see a valid performance appraisal system that measures 
management attributes. An overhaul of the pay system would 
address pay compression and performance appraisal issues that 
are of great concern to the FBI, the FBI Agents Association, 
and other Federal law enforcement agencies.
    Due to recent FBI management failures, there has been a 
call for increased oversight over the FBI's internal watchdog 
functions. The oversight options are as follows: one, continue 
to operate the FBI's OPR Division in its present form, with the 
addition of an oversight function by the Senate Judiciary 
Committee or similar body. Two, expand the oversight of the 
Office of Inspector General, Department of Justice, to assume 
the functions of the FBI's OPR. And, three, create an Office of 
Inspector General in the FBI.
    On June 20, 2001, Senate bill 1065 was introduced, calling 
for the creation of an inspector general for the FBI. Last 
week, Attorney General John Ashcroft expanded the OIG/DOJ 
authority to investigate all internal matters for both the FBI 
and Drug Enforcement Administration. As a practical matter, 
because of the Attorney General's action, I believe only the 
last two options remain viable.
    In considering these two approaches, I favor the FBI IG 
concept, with a very important caveat. The FBI IG's 
investigative staff should be comprised of FBI personnel. Based 
on my extensive FBI internal affairs experience, I strongly 
believe that FBI agents can best effectively investigate their 
own. In the FBI's OPR history, the office has never failed to 
conduct aggressive, hard-hitting investigations of misconduct, 
regardless of the subject's position.
    The FBI's OPR has proven its independence and I am 
confident that the office would be loyal to the mission of the 
IG. Additionally, using FBI personnel who are already in place 
is a more cost-effective approach. This is especially 
significant when compared to increasing the $42 million budget 
of the OIG/DOJ office for additional investigators, training 
and staff to handle the increased workload.
    The FBI IG approach also preserves an increased element of 
independence for the FBI over the OIG.
    Chairman Leahy. Mr. Werner, I apologize, but I am going to 
have to ask you sum up because we had to leave here at 12:30 
and it is now 12:55. So we are running into a little bit of a 
problem.
    Mr. Werner. The only point I wanted really to make here is 
the fact that the independent office within the FBI, the IG 
office within the FBI, preserves an element of independence 
that I think is crucial to the FBI's functioning as an 
investigative agency responsible for the investigation of 
Federal--
    Chairman Leahy. And you don't see that as contradictory 
when you said earlier that many who say they are protecting the 
Bureau are actually protecting each other?
    Mr. Werner. Sir, I believe that if you charge an office 
with that responsibility and it is clear from the Director and 
senior management that they have unfettered access to employees 
and are given the green light to do aggressive, hard-hitting 
investigations, it can be very effective, and has been 
effective in the past.
    Chairman Leahy. As you know, that is one of the things we 
are going to have to wrestle with, so your statement is 
extremely valuable to us. We are asking you for your expertise, 
having been there. We look at it from the outside. You have 
been there on the inside.
    [The prepared statement of Mr. Werner follows:]

Statement of John Werner, Blue Sky Enterprises of North Carolina, Inc., 
                          Cary, North Carolina

    I want to thank the Committee for the invitation to testify.
                               Background
    I am a self-employed general contractor in Cary, N.C. After more 
than 27 years of service, I retired from the FBI in 1999. During my 
Federal Bureau of Investigation (FBI) career, I investigated criminal 
matters in Washington, D.C., served as a Foreign Counterintelligence 
supervisor, worked in the Office of Professional Responsibility (OPR) 
as a supervisor, and supervised the Raleigh Resident Agency until my 
retirement. Additionally, I had extensive experience in internal 
affairs investigations beginning about 1985. This included my being the 
supervisor responsible for the investigation of alleged wrongdoing 
against then FBI Director William Sessions and his executive assistant. 
In another case, Special Agent (SA) John Roberts and I were ordered 
back from our respective field offices to investigate cover-up 
allegations in the Ruby Ridge matter. I was also involved in numerous 
other internal investigations of FBI management.
                  Management Issues, Ethical Standards
    I realize we are here today to address FBI management reforms, 
discuss FBI problems and potential fixes for these problems. It is 
important not to forget the dedicated hard work performed by the more 
than 26,000 FBI employees, who successfully investigate thousands of 
cases each year. There are things broken in the FBI, primarily 
management-related, but the basics of how agents conduct their 
investigations are not broken. Page 1 of 8
    The rank and file employees are hitting on all cylinders, albeit 
frustrated over the inefficiencies of management, broken or nonexistent 
information systems, and concerns over being held to higher standards 
of conduct than senior management.
    Management problems begin with the FBI's Senior Executive Service 
(SES) personnel. It would not be fair to suggest all members of the SES 
have been engaged in abuses of authority described herein, because the 
majority are sincere, dedicated law enforcement professionals who have 
made many sacrifices for the Bureau. My remarks are being addressed to 
that vocal minority of SES members, often referred to as the ``Club'' 
by street agents, who are motivated by self-preservation and self-
interest at any cost. For the most part, these SES personnel are not 
motivated by the best interest of the FBI.
    In his testimony before this Committee, former Senator John 
Danforth suggested that an element of management misconduct, concerning 
the failure of disclosing wrongdoing, has its roots in the employees' 
desire to ``not embarrass the Bureau.'' While there may be an element 
of this involved, I would suggest that protecting their self-interest 
is primary, and the excuse of ``not embarrassing the Bureau'' is a 
convenience to justify their misconduct. Hiding behind a wall of 
arrogance, senior managers hold the belief that they always know what 
is best for the Bureau. These SES members are intolerant of any 
suggestion that their way is wrong. They use intimidation and 
retaliation against anyone who would be so impertinent as to challenge 
their interests.
    SES personnel have retaliated against agents who have been assigned 
investigations of SES misconduct. Special Agent Roberts, who is here 
today, has had his career seriously impaired because of his determined 
hard work on a number of high profile cases involving SES personnel. 
These retaliatory practices send a chilling message to any other agent 
who might be charged with similar investigations.
    There are incidences where SES executives have taken action or 
avoided action, to protect their own from career perils. In the first 
investigation of Ruby Ridge, SES Inspectors sought to protect certain 
fellow peers from administrative discipline by conducting a sloppy and 
incomplete investigation. At the same time, they were most willing to 
hang lower tier employees ``out to dry.'' Another way the SES members 
protect themselves is by handling SES personnel misconduct 
adjudications differently from other cases. Until recently, the SES 
Board conducted SES adjudications. The discipline for SES infractions 
was typically somewhat less harsh to much less harsh than that given to 
non-SES employees charged with the same type of offense. This double-
standard has debilitated rank and file employees' morale and, as will 
be noted later, is one of the reasons quality agents are disinclined to 
enter the Career Development Program (CDP).
                     Management Structure Overhaul
    There are many recognized root problems in the management structure 
of the FBI that senior management has neglected to seriously address. 
The SES staff resists changing a system that benefits them and ensures 
excessive headquarters control over all field operations. These 
problems have created disincentives that dissuade quality agents from 
participating in the CDP.
    There are significant barriers that discourage agents from wanting 
to participate in career development. For example, to promote to the 
level of Assistant Director (AD), an agent must make a minium of six 
career moves, most requiring family relocations, and at least three 
tours must be conducted at FBIHQ. This gives headquarters senior 
management a stranglehold over these rising agents, requiring absolute 
allegiance to the SES staff. In addition, these frequent transfers do 
not give the Bureau ample time to judge the management ability of its 
managers.
    Another FBIHQ issue concerns SES personnel prohibiting non-agent 
professional staff from assuming FBIHQ positions that historically have 
been filled by agents. Agents are expensive, scarce investigative 
resources who are better utilized in the field. Simply stated, there is 
an abundance of FBIHQ positions, currently filled by agents, which 
could be more efficiently and economically filled by support staff in a 
more consistent and permanent basis.
    In 1998, Special Agent Carl Christiansen, then the Louisville 
Division Assistant Special Agent in Charge (ASAC), was tasked with 
conducting a survey of the Executive Development Selection Program 
(EDSP) to determine what impacts an agent's decision to participate in 
management. The following is a sampling of the survey results:

         There are far more disincentives than incentives to 
        participating in the CDP. There are too many transfers, 
        inadequate financial incentives, etc.;
         FBIHQ assignments were viewed as very negative because 
        headquarters work was viewed as clerical, devoid of supervisory 
        responsibility, and did little to prepare an agent for future 
        assignments;
         Agents expressed reluctance to become involved in a 
        management system they believed to be hypocritical and lacking 
        ethics.

    SA Christiansen and his Committee identified some of the underlying 
reasons for agents' disinterest in the CDP. The FBI's organizational 
structure, culture and approach to management are no longer suited to 
today's world. They recommended that the Director needed to consider 
drastic changes to the structure and philosophy of management to allow 
the organization to adapt more readily to a quickly changing external 
environment. When SA Christiansen presented the survey recommendations 
to a group of 15 SES employees, the proposals were ``scoffed'' at. To 
date, only a few minor changes have been made to the CDP as a result of 
the survey.
    Recently the outgoing President of the FBI Agents Association 
(FBIAA), SA John J. Sennett, stated in the ``President's Column'' in 
the Spring 2001 FBIAA newsletter, ``Along with better information 
automation, the FBI must re-tool. We must re-engineer our 
administrative and investigative practices. Keeping what is worth 
keeping, we also have to be aggressive in throwing away outdated and 
cumbersome administrative practices that drag down even the best and 
most energetic investigator.''
    I fully agree with SA's Christiansen and Sennett. A holistic 
overhaul of the entire system is needed. This should begin with a 
critical evaluation of the true needs of FBIHQ. For example, the multi-
tiered, bloated headquarters structure is not necessary. The review 
might start with an eye toward expanding the management career track in 
the field to enable a street agent to rise to ASAC without a transfer 
to headquarters. New practices, along these lines, may begin to attract 
the FBI's ``best and brightest'' into management. The ``Blue Ribbon'' 
commission proposed by Senate Bill 1074 intended to examine all aspects 
of FBI operations is a positive step toward revamping the current 
system.
    I would encourage the commission to research the pros and cons of a 
separate pay system for federal law enforcement. The Office of 
Personnel Management researched this matter in 1993 at the direction of 
Congress and was the subject of a report, entitled ``Report to Congress 
A Plan to Establish a New Pay and Job Evaluation system for Federal Law 
Enforcement Officers.'' The management survey, mentioned previously, 
found pay compression at the top Page was a disincentive to CPD 
participation. In addition, the survey showed that agents believe that 
anyone who volunteers to be a manager will become one, because they do 
not see a valid performance appraisal system that measures management 
attributes. An overhaul of the pay system would address pay compression 
and performance appraisal issues that are a great concern to the FBI, 
FBIAA, and other federal law enforcement agencies.
                             FBI Oversight
    Due to recent FBI management failures there has been a call for 
increased oversight over the FBI's own internal watch dog functions. 
The oversight options are the following:

        1. Continue to operate the FBI's OPR Division in its present 
        form with the addition of an oversight function by the Senate 
        Judiciary Committee or a similar body;
        2. Expand the oversight of the Office of Inspector General, 
        Department of Justice (OIG/DOJ) to assume the functions of the 
        FBI's OPR; and
        3. Create an OIG in the FBI.

    On June 20, 2001, Senate Bill 1065 was introduced calling for the 
creation of an Inspector General (IG) for the FBI. Last week, Attorney 
General John Ashcroft expanded the OIG/DOJ authority to investigate all 
internal matters for both the FBI and the Drug Enforcement Agency. As a 
practical matter, because of the Attorney General's action only the 
last two options remain viable.
    In considering these two approaches, I favor the FBI IG concept 
with a very important caveat: the FBI IG's investigative staff should 
be comprised of FBI personnel. Based on my extensive FBI internal 
affairs experience, I strongly believe that only FBI agents can most 
effectively investigate their own. In the FBI's OPR history, the office 
has never failed to conduct aggressive, hard-hitting investigations of 
misconduct, regardless of the subject's position. For example, other 
agents and I conducted a thorough investigation of former Director 
Sessions, which resulted in his removal from office. The FBI's OPR has 
proven its independence, and I am confident the office would be loyal 
to the mission of the IG. Additionally, using FBI personnel, who are 
already in place, is a more cost effective approach. This is especially 
significant when compared to increasing the 42 million dollar budget of 
the OIG/DOJ office for additional investigators, training, and staff to 
handle the increased work load.
    The FBI IG approach also preserves an increased element of 
independence for the FBI over the OIG/DOJ concept, while still 
establishing appropriate oversight by Congress. Increased control by 
the OIG/DOJ could erode that independence in the future. I want to 
emphasize that it is absolutely necessary to protect the Bureau's 
investigative independence so that its ability to investigate 
wrongdoing within the Federal Government is not impaired. An apolitical 
FBI is a must. Some of the worst sins committed by senior FBI 
management were those acts that created the impression that the FBI was 
politicized, such as the Filegate matter.
    The problems with expanded control by the OIG/DOJ are considerable. 
If the FBI is no longer responsible for investigating internal 
wrongdoing, the FBI's ability to maintain strong command over its 
operations and employees is weakened. The organization itself is 
undermined. The FBI, every law enforcement agency, should be forced to 
conduct its own internal affairs investigations in an honest and 
straightforward manner. Additionally, the OIG/DOJ personnel would 
always be considered outsiders who would never gain the FBI employees' 
confidence and cooperation, which are necessary for successful internal 
affairs investigations. Non-FBI investigators would be hampered in 
their investigative efforts by not knowing the culture, mores, 
relationships, and subtle nuances of the FBI environment.
    I am hopeful Attorney General Ashcroft will reconsider giving OIG/
DOJ the authority to handle the FBI's internal affairs and support an 
FBI IG.
    I would be pleased to answer any questions.

    Chairman Leahy. Mr. Perry, would you go ahead, please?

STATEMENT OF FRANK L. PERRY, SUPERVISORY SENIOR RESIDENT AGENT, 
       FEDERAL BUREAU OF INVESTIGATION, WASHINGTON, D.C.

    Mr. Perry. Mr. Chairman, you have my statement and I will 
be brief and not read it all.
    In response to your invitation to appear before the 
Committee today, I offer a brief summary of my experience and 
what I intend to be and hope are constructive recommendations 
for the future of the FBI. These are offered with a sense both 
of humility and gratitude for an organization that now needs to 
examine itself honestly and with a sense of calling to better 
protect human rights and promote the national security.
    I joined the FBI as an agent in 1982 and have served in 
various divisions, to include Internal Affairs and as the head 
of the Office of Law Enforcement Ethics. I have listed in my 
statement various other assignments, but I will skip those.
    With regard to the purpose of this hearing, I respectfully 
submit that I investigated hundreds of OPR matters and was 
exposed to about 2,500 such cases over a 5-year period.
    In 1992, several of us in OPR began to see a change in the 
nature of FBI misconduct. While still a very small percentage 
of the agent population, approximately 1 to 2 percent were 
involved in substantiated allegations of serious and criminal 
misconduct. These substantiated allegations were becoming of a 
more premeditated nature, as opposed to misconduct resulting 
from poor judgment.
    The good news, subsequent to a 6-month, honest look at 
ourselves was that we saw no trends of special agents engaging 
in civil rights abuses, brutality, drugs, and classic quid pro 
quo corruption. We were seeing trends in certain categories 
that prompted OPR, comprised totally of FBI agents and with no 
prompting from the Department of Justice, to research and 
recommend to the Director a comprehensive, proactive ethics 
initiative designed to prevent misconduct as opposed to merely 
reacting to it. Any such training and culture-changing 
initiative could not be muzzled or constrained or covered up in 
any fashion. Mr. Freeh agreed, and the program was begun in 
1996.
    As head of that office, I wanted to look at ways that 
policies, programs and training would be meaningful and neither 
politically expedient nor mere window dressing. I believe the 
internal affairs and training components of the FBI were 
beginning to feel better about the course of the FBI due to 
this collaborative effort.
    During this time, I was asked to investigate the FBI's 
investigation of the Ruby Ridge standoff, and after dozens of 
interviews and document reviews drafted the results, with the 
oversight of the Justice Department's OPR and Justice 
Management Division. And I encountered overwhelming candor and 
forthrightness from FBI agents, but, sadly, I also encountered 
resistance on the part of some senior FBI executives regarding 
results that were nothing less than objective and balanced, but 
often organizationally unflattering, which were reached based 
upon a preponderance of testimony and evidence.
    I do not believe there was a conspiracy or systematic plan 
to obstruct or cover up. I do believe, because of this case and 
so many others to which I was exposed, that the culture of the 
FBI is such that, as Mr. Grassley indicated, some senior 
executives have been motivated by a desire not to embarrass the 
Bureau, as opposed to honoring the mission and purpose of the 
FBI--investigate, seek, find, speak and apply the truth.
    In my judgment, this tendency does not constitute 
corruption. It constitutes a ``made member'' or ``club'' 
mentality, as Mr. Werner indicated, that has led to the 
perception that the organization is oftentimes less than 
forthcoming, and circles the wagons rather than squares off and 
confronts what are often tragic mistakes as opposed to ethical 
wrongdoing.
    This culture can be changed without disparaging any 
individuals. Senior managers often are rated on issues that 
amount to form over substance or image over crime control. I 
would therefore suggest that the inspection process, similar to 
the OPR process, entail the use of signed, sworn statements to 
assess a senior manager's performance and the corresponding 
client surveys, as opposed to what is still perceived as a 
``blue skies'' or ``contract'' approach.
    I would argue that the measures of managerial performance 
known as ``effectiveness'' and ``efficiency'' be coupled with 
the ethical aspect of management in assessing leadership 
competence and advancement. For example, a manager's candid 
assessment and attack of a crime problem is more important to 
the taxpayer than emphasis on image, accommodation, or 
avoidance of violating a compliance issue; that is, making a 
mistake.
    As William James put it, there are worse things than being 
wrong, and Mr. Danforth put the same point before this 
Committee as ``. . .making mistakes is not as bad as hiding 
mistakes.'' I would add that this self-inspection or 
performance process--and this is the first of my two points--
continue to be conducted by selected special agents, with 
Department of Justice oversight, assessment and co-inspector 
status, the latter of which is not in place now, but would add 
to the credibility of the senior management promotion process.
    The FBI's internal affairs, or OPR, process historically 
has been, in my judgment, a firm and fair process below the 
senior executive level. This view prompted me to ask Mr. 
Kiernan to research whether the FBI had a double standard of 
discipline, as perceived by many--and you have that report, I 
believe--such that senior executives were not held to a higher 
standard of professional responsibility and accountability 
pursuant to substantiated allegations of misconduct.
    A 10-month study, which was scrutinized in detail by Mr. 
Freeh and his direct subordinates, showed a double standard, or 
certainly what was perceived to be one by the ran-and-file. As 
a result, Mr. Freeh formally changed the form and content of 
senior executive discipline and accountability in August of 
2000, as you, Mr. Leahy, alluded to at the beginning of this 
session.
    This was a step in the right direction, but I am not 
convinced that this policy changed the culture problem we are 
here to address. This tendency by some to allow, if not 
promote, the culture of reluctance to recognize sincere, 
objective and unselfish attempts to better the organization 
must be addressed and monitored by the next Director.
    I believe Mr. Freeh tried, and succeeded to some measure. 
He commented to me once, out of frustration, that some senior 
executives complained to him that he was over-emphasizing 
``this integrity thing.'' This type of comment does not 
represent the majority opinion of senior managers. It is 
symptomatic of the culture that, while emphatically not 
corrupt, is complacent, if not resistant to ethical oversight.
    So my last point: Internal discipline should be 
investigated by FBI agents, with the oversight of an artful and 
vigilant, though not zealot, OPR entity of the Department of 
Justice or the OIG. ``Physician, heal thyself'' is not an 
inappropriate analogy in this context. I see no need for a 
separate OIG, though I am aware that this is the minority 
opinion on that point.
    Special agents respond better to special agents and are 
more forthcoming, and fear peer review more than review by an 
outside agency. It is my understanding that in the military 
court martial setting, many defendants prefer facing an 
independent magistrate rather than a jury of their peers.
    This culture is not to be construed as part of the cover-up 
or ``circle the wagons'' culture. This tenet of internal 
discipline comes from professional pride, not arrogance, in 
that with the FBI's expanding jurisdiction, which includes 
investigation of so many other Government agencies, it is a 
contribution to esprit de corps to know that Congress and the 
White House allow us to investigate ourselves using, with 
oversight, a higher standard of honesty and fairness. Such 
moral freedom, as it were, may sound high-minded, but I have 
seen this process, with the appropriate leadership and 
Department of Justice oversight, work amazingly well, firmly, 
fairly, and without zealotry or political influence.
    The Criminal Division of the Department of Justice, not 
OPR, had oversight of the original Ruby Ridge matter, and the 
Justice Management Division of the Department adjudicated the 
last of the administrative inquiries. Even so, it is FBI agents 
that you have called before you today, who are responding to 
your request to truthfully attest to internal problems, and I 
believe that to be significant.
    In closing, distinguished members, my experience, my 
research and my conscience lead me to believe that we have a 
healthy baby and need not throw it out with the bath water we 
are examining. The FBI does need to come to recognize, as the 
ancient Greek thinkers knew, that a preoccupation with being 
``the best'' can indeed be an enemy of the good.
    I have spoken to these issues in an article published in 
February of this year by the FBI's own Law Enforcement 
Bulletin, copies of which I believe you have requested and have 
been provided, so I will not go into these recommendations 
here.
    We do expect of our leadership and all of our managers and 
agents and professional support the realization in all of our 
policies of hiring, promotion and crime-fighting that a morally 
good FBI is the best FBI, and that the way to maintain the good 
we have done, but become better all the while, is to put 
justice, fairness and the truth over considerations of image, 
career and accommodation. We know what to do. We require the 
collective will, culture and leadership to consistently do it.
    [The prepared statement of Mr. Perry follows:]

Statement of Frank L. Perry, Supervisory Senior Resident Agent, Federal 
            Bureau of Investigation, Raleigh, North Carolina

    Mr. Chairman and Distinguished Members of the Committee:
    In response to your invitation to appear before the Committee 
today, I offer a brief summary of my background and FBI experience, and 
what I intend to be and hope are constructive recommendations for the 
future of the FBI. These are offered with a sense of both humility and 
gratitude for an organization that now needs to examine itself honestly 
and with a sense of calling to better protect human rights and promote 
the national security.
    I joined the FBI as a Special Agent in 1982, and have served in the 
Charlotte and Tampa Divisions, Washington Field Office, and FBI 
Headquarters, working organized crime, narcotics, domestic and 
international terrorism, and counterintelligence. After a three year 
tour of duty as an undercover agent for the National Security Division, 
I was selected as a supervisor for the FBI's Internal Affairs Division 
(Office of Professional Responsibility (OPR)), where I served for five 
years. In 1996, I was appointed by the Director as head of the Office 
of Law Enforcement Ethics at the FBI Academy, Quantico, Virginia. I am 
currently the Supervisory Senior Resident Agent of the Raleigh Office, 
which reports to the Charlotte Division.
    With regard to the purpose of this hearing, I respectfully submit 
that I investigated hundreds of OPR (Internal Affairs) matters and was 
exposed to about 2,500 such cases over a five year period. In 1992, 
several of us in OPR began to see a change in the nature of FBI 
misconduct. While still a very small percentage of the Agent population 
was involved with substantiated allegations of serious and criminal 
misconduct (one to two percent of the entire Special Agent and 
management population), the substantiated allegations were becoming of 
a more premeditated nature, as opposed to misconduct resulting from 
poor judgment. The good news subsequent to a six month honest look at 
ourselves was that we saw no trends of Special Agents engaging in civil 
rights abuses, brutality, drugs, and classic or quid pro quo 
corruption. We were seeing trends in certain categories that prompted 
OPR, comprised totally of FBI SAs, and with no OPR/DOJ prompting, to 
research and recommend to the Director a comprehensive proactive ethics 
initiative designed to prevent misconduct as opposed to merely reacting 
to it when it occurred. Any such training and culture-changing 
initiative could not be muzzled or constrained or covered up. Mr. FREEH 
agreed, and the program was begun in 1996.
    As head of that office, I wanted to look at ways policies, programs 
and training would be meaningful and neither politically expedient nor 
mere window dressing. As a result, we drafted a curriculum that 
attempted to understand the moral foundation of the Constitution to 
which we gave an oath to defend. We wanted our recruits to come to see 
their work as a calling to defend human rights, which often involved 
the paradoxes of undercover work and other law enforcement-specific 
moral dilemmas, emphasizing that justice means nothing without the 
complete truth eventually coming out in the discovery and courtroom 
setting. Such understanding and practice prevents corruption, while 
maintaining the highest performance and prosecutorial standards. I 
believe the Internal Affairs and Training components of the FBI were 
beginning to feel better about the course and future of the FBI.
    During this time, I was asked to investigate the FBI's 
investigation of the RUBY RIDGE standoff, and after dozens of 
interviews and document reviews, drafted the results with the oversight 
of the Justice Department's OPR and Justice Management Division (JMD). 
I encountered overwhelming candor and forthrightness from FBI Agents, 
but sadly I also encountered resistance on the part of some senior FBI 
executives regarding results that were nothing less than objective and 
balanced, but often organizationally unflattering, which were reached 
based upon a preponderance of testimony and evidence. I do not believe 
there was a conspiracy or systematic plan to obstruct or cover up 
results. I do believe, because of this case and so many others to which 
I was exposed while in OPR, that the culture of the FBI is such that, 
as one of the members of this Committee has put it, some senior 
executives have been motivated by a desire not to embarrass the Bureau, 
as opposed to honoring the mission and purpose of the FBI: investigate, 
seek, find, speak, and apply the truth. In my judgment, this tendency 
does not constitute corruption. It constitutes a ``made member'' or 
``club'' mentality that has led to the perception that the organization 
is oftentimes less than forthcoming, and circles the wagons rather than 
squaring off and confronting what are often tragic mistakes as opposed 
to ethical wrongdoing.
    This culture can be changed without disparaging any individuals. 
Firstly, an organizational obsession with compliance issues at the 
expense of fundamental case-making as a result of aggressive, honest, 
investigative effort, must be changed. Senior managers often are rated 
on issues that amount to form over substance or image over crime-
control. I would therefore suggest that the inspection process, similar 
to the Internal Affairs process, entail the use of signed sworn 
statements to assess a senior manager's performance and the 
corresponding climate surveys, as opposed to what is still perceived as 
a ``blue skies'' or ``contract'' approach. I would argue that the 
measures of managerial performance known as ``effectiveness'' and 
``efficiency'' be coupled with the ethical aspect of management in 
assessing leadership competence and advancement. For example, a 
manager's candid assessment and attack of a crime problem is more 
important to the taxpayer than emphasis on image, accommodation or 
avoidance of violating a compliance issue (i.e. making a mistake). As 
William James put it, there are worse things than being wrong (Mr. 
Danforth put the same point before this Committee as ``. . .making 
mistakes is not as bad as hiding mistakes.''). I would add that this 
self-inspection or performance process continue to be conducted by 
selected Special Agents, with DOJ oversight, assessment, and co-
inspector status, the latter of which does not currently obtain, but 
would add to the credibility of the senior management promotion 
process.
    The FBI's Internal Affairs historically has been, in my judgment, a 
firm and fair process, below the Senior Executive (SES) level. This 
view prompted me to ask Mr. KIERNAN to research whether the FBI had a 
double standard of discipline as perceived by many, such that senior 
executives were not held to a higher standard of professional 
responsibility and accountability pursuit to substantiated allegations 
of misconduct. A ten month study which was scrutinized in detail by Mr. 
FREEH and his direct subordinates showed such a double standard 
existed, or certainly was perceived to be so, and as a result, Mr. 
FREEH formally changed the form and content of senior executive 
discipline and accountability in August of 2000. This was a step in the 
right direction, but I am not convinced that this policy changed the 
``culture'' problem we are here to address.
    This tendency by some to allow if not promote the culture of 
reluctance to recognize sincere, objective, and unselfish attempts to 
better the organization must be addressed and monitored by the next 
Director. I believe Mr. FREEH tried, and succeeded to some measure. He 
commented to me once out of frustration that some senior executives 
complained to him that he was over emphasizing ``this integrity 
thing.'' This type of comment does not represent the majority opinion 
of senior managers. It is symptomatic of the culture that, while 
emphatically not corrupt, is complacent if not resistant to ethical 
oversight.
    So, my last point: internal discipline should be investigated by 
FBI Agents, with the oversight of an artful and vigilant though not 
zealot, DOJ entity, be it OPR or the OIG. ``Physician, heal thyself' is 
not an inappropriate analogy in this context. I see no need for a 
separate OIG, though I am aware this is the minority opinion on that 
point. Special Agents respond better to Special Agents and are more 
forthcoming and fear peer review more than review by an outside agency. 
It is my understanding that in the military court martial setting, many 
defendants prefer facing an independent magistrate rather than a jury 
of their peers. This culture is not to be construed as part of the 
cover up or ``circle the wagons'' culture. This tenet of internal 
discipline comes from professional pride--not arrogance--in that with 
the FBI's expanding jurisdiction which includes the investigation of so 
many other government agencies, it is a contribution to esprit de corps 
to know that Congress and the White House allow us to investigate 
ourselves using, with oversight, a higher standard of honesty and 
fairness. Such ``moral freedom'' as it were may sound high-minded, but 
I have seen this process, with the appropriate leadership and DOJ 
oversight, work amazingly well: fairly, firmly, and without zealotry or 
political influence. The Criminal Division of DOJ, not OPR, had 
oversight of the original Ruby Ridge matter, and the Justice Management 
Division of DOJ adjudicated the last of the administrative inquiries. 
Even so, it is FBI agents that you have called before you today, who 
are responding to your request to truthfully attest to internal 
problems, and I believe that to be significant.
    Distinguished members, my experience, my research, my conscience 
lead me to believe that we have a ``healthy baby'' and need not throw 
it out with the bath water we are examining. That baby, the FBI, does 
need to come to recognize, as the ancient Greek thinkers knew, that a 
preoccupation with being ``the best'' can be an enemy of ``the good''. 
I have spoken to these issues in an article published in February of 
this year by the FBI's own Law Enforcement Bulletin, copies of which I 
believe you requested and have been provided, so I will not detail 
these recommendations here. We do expect of our leadership, mid-level 
managers, special agents, and professional support, the realization in 
all our policies of hiring, promotion, and crime fighting that a 
morally good FBI is the best FBI, and that the way to maintain the good 
we have done but become better all the while is to put justice, 
fairness, and the truth over considerations of image, career, and 
accommodation. In fact, the best image for an organization is derived 
from its efficacy, and that in turn from its professional ethics. We 
know what to do; we require the collective will, culture, and 
leadership to consistently do it.

    Chairman Leahy. Thank you.
    Before we go to Mr. Kiernan, I understand each of you have 
family members here today. Is that correct?
    Mr. Roberts. I have, sir.
    Chairman Leahy. Mr. Roberts, who is here?
    Mr. Roberts. My wife, Brenda Roberts.
    Chairman Leahy. I am glad to have you here.
    Mr. Kiernan, you get to be the wrap-up.

 STATEMENT OF PATRICK J. KIERNAN, SUPERVISORY SENIOR RESIDENT 
    AGENT, FEDERAL BUREAU OF INVESTIGATION, WASHINGTON, D.C.

    Mr. Kiernan. Thank you, Mr. Chairman. By way of background, 
I am currently a supervisory special agent in the Law 
Enforcement Ethics Unit at Quantico, Virginia. I have 
approximately 15 years in the FBI, the last 3 in that position. 
Within that 3-year time period, I spent approximately 14 months 
working with the Office of Special Counsel under Senator John 
Danforth. I am extremely proud of my 15 years of service to the 
FBI.
    The Law Enforcement Ethics Unit was established in 1996, as 
Mr. Perry stated. In that Unit, I spend the majority of my time 
instructing new agents, current agents, FBI support personnel, 
as well as police officers from all over the country when we do 
some travel, and around the world. The FBI is often looked to 
to either initiate or improve law enforcement ethics programs 
in these countries.
    However, because the FBI is made up of humans, we too have 
sometimes fallen short of the excellence expected by the 
American public. No one among us is perfect, and I certainly 
include myself in that, and we each have to struggle with our 
own individual foibles.
    One of the additional roles of the Law Enforcement Ethics 
Unit is to periodically review the practices, policies and 
guidelines of the FBI to ensure the FBI is being fair both to 
its own employees and to the American public.
    Should we discover a problem, it is our responsibility and 
obligation to point it out and correct it. It is my belief that 
if the Ethics Unit of the FBI cannot speak the truth concerning 
a particular matter and attempt to implement needed change, 
what other unit in the FBI would be willing to do that?
    In that regard, I came to work on what is now has been 
called the SES Report, or the Senior Executive Service 
Accountability Report. In that report, there was a perception 
among the agent and support population that there was a 
perceived disparate treatment between the discipline given the 
rank-and-file employee and the Senior Executive Service 
management.
    Over a 10-month period, I examined cases, I pulled cases. I 
looked at statistics, I interviewed knowledgeable personnel 
within the FBI's OPR that were aware of specific interviews, 
and concluded with a 26-page report that was presented to 
Director Freeh on September 1, 1999.
    In that report, to the opinion of our unit, the perception 
was more than just a perception; it was a reality. We were able 
to cite specific cases that, in our mind, did show the 
disparate treatment between senior managers and rank-and-file 
employees. Some of these cases also showed the great lengths 
that senior managers went to in order to mitigate or downgrade 
the alleged misconduct of some of their fellow colleagues.
    To Director Freeh's credit, he corrected this 
inconsistency, and in August of 2000 he changed it, so he 
disbanded the Senior Management Board that was reviewing these 
cases and created a single disciplinary system for all FBI 
employees.
    Shortly after this, I was asked to take on the assignment 
as the sole liaison for the FBI with the Office of Special 
Counsel. Mr. Roberts had initially called me and asked me to 
take on this role, despite the fact that he had declined it 
based on his previous problems with Ruby Ridge. I was aware of 
that, but felt that this was an important assignment and one 
that needed to be resolved as quickly as possible so that the 
American people would know once and for all what had happened 
at Waco.
    During the course of my assignment with the Office of 
Special Counsel, I was initially assigned to work with the 
Office of General Counsel. I believe there was a resistance 
there that they still wanted to control the flow of 
information. There were certain managers there that I felt were 
taking a legalistic approach to the special counsel's 
investigation and only wanted to provide what was legally 
required, as opposed to all the documents which the Office of 
Special Counsel had initially requested.
    I believe the OSC agreed with me on this philosophy and, in 
fact, subsequently sent approximately 15 investigators over to 
the FBI one morning shortly after my assignment began to search 
several offices of the Office of General Counsel.
    While performing this role, I was guided by one overriding 
philosophy, and that was to provide absolutely everything that 
had to do with Waco to the Office of Special Counsel so they 
could make an informed and independent decision on the 
Government's action during that incident. The FBI was not to 
make relevancy cuts and not to decide what was important and 
what was not.
    As a result of taking this what consider ``open the books'' 
stance, there were occasional disagreements with certain senior 
managers, not only in the Office of General Counsel, but other 
divisions. People were told not to disclose problematic issues 
with me because it would get back to the OSC. I was excluded 
from certain meetings that had to do with responding to OSC 
requests. Official letters were sent out without my review 
because I believe certain managers thought I would object to 
the wording. I was referred to as too controversial and, in 
short, seen as disloyal for trying to cooperate with the Office 
of Special Counsel.
    As I was concluding my assignment and looking for other 
career opportunities, it was pointed out that it might be best 
for me to just return to Quantico and chill out for a while. As 
a result of--
    Chairman Leahy. I just want to make sure we understand for 
the record. The Office of Special Counsel, Senator Danforth, 
was there under the direct request and on behalf of the 
Attorney General of the United States, who, after all, is over 
the FBI. Is that correct?
    Mr. Kiernan. That is correct, and in any statement that I 
had seen from Director Freeh he always wanted the FBI's full 
and complete cooperation with the OSC and that is what I was 
going on.
    As a result of my time with the Office of Special Counsel, 
several potential incidents of misconduct came to my attention. 
I forwarded these incidents to the FBI's Office of Professional 
Responsibility at the conclusion of my assignment. Three of 
those incidents dealt with senior managers. Two of them dealt 
with what I considered specifically retaliatory action against 
me, and I am content to allow that process to proceed to its 
conclusion.
    I see my time is up.
    Chairman Leahy. Go ahead. I will waive some of my time for 
questions. I want you to continue with what happened because 
Senator Danforth's efforts in getting the facts from Waco and 
your involvement with that is integral to this whole hearing 
that we are doing. So I want to hear the rest of that.
    Go ahead.
    Mr. Kiernan. I believe that some of this criticism we all 
hear about in the daily news of the FBI is well deserved. It is 
not easy and very frustrating to represent the Ethics Unit of 
the FBI, where our goal is to teach the avoidance of many of 
these issues, and yet be constantly faced with these when I go 
out to instruct either agents or law enforcement officers from 
around the country or around the world. It is not easy to 
battle people in your own organization when you are just trying 
to do the right thing. In an ideal world, the Ethics Unit of 
the FBI would never be in conflict with the senior management 
of the FBI.
    Concerning some suggested improvements, I really strongly 
believe that the ethical message that was started by Director 
Freeh to the new agents of the FBI never quite made it down to 
some of the senior managers of the FBI, and that is where it 
really needs to take strong hold and be pulled together. 
Unfortunately, career advancement at any cost sometimes becomes 
the ultimate goal, and decisions are made for selfish interest 
as opposed to the good of the country or the organization.
    I would also suggest that the Committee possibly consider 
establishing an ethics czar or a senior-level FBI official that 
is solely concerned with the ethical implications and 
perspective of either a high-level policy decision or 
operational decision. There are legal people in place to do 
that, administrative procedural people. But if you had one 
person that could just sit back and ask the question, is this 
really the right course of action for the FBI to take, that 
might go a long way toward resolving many of these problems.
    Finally, the ethical message itself must be backed up by 
action. Simply having a lot of rhetoric will do no good if the 
disciplinary system itself is not backed up, including 
demotions and dismissals, if that needs to be the case. 
Attempting to cover up investigative miscues from the American 
public or protect your colleagues from career embarrassment, no 
matter how noble the intentions, should be the quickest way to 
get fired from the FBI.
    In conclusion, I wanted to comment that during a recent 
visit to the United States Naval Academy with my family I came 
across the Latin phrase ``non sibi, sed patriae,'' which means 
``not for self, but for country.'' That is the tone that needs 
to be set at the FBI. Each person here today before your 
Committee has attempted to do that in the FBI. Countless other 
FBI employees do it everyday and live out that philosophy, with 
some having paid the ultimate sacrifice. It is for those heroes 
and others to come that we here could not simply sit idle and 
allow these problems to continue. We all care too much about 
this organization.
    Hopefully, with your Committee's oversight, a new 
administration and a new Director, the FBI can begin its 
journey back to becoming the premier law enforcement agency in 
the world, one of which the American people can be proud.
    Thank you, Mr. Chairman. I am available for questions.
    [The prepared statement of Mr. Kiernan follows:]

  Statement of Patrick J. Kiernan, Supervisory Special Agent, Federal 
                        Bureau of Investigation

    Mr. Chairman, Senator Hatch, and members of the Judiciary 
Committee.
                               Background
    I am currently a Supervisory Special Agent of the FBI who works 
full-time in the Law Enforcement Ethics Unit (LEEU), based at the FBI 
Academy, Quantico, VA. I arrived in this Unit in June 1998 and left for 
approximately14 months between November 1999 and January 2001 to work 
at FBI Headquarters as the fulltime liaison to the Office of Special 
Counsel's (OSC) Waco investigation, led by former Senator John C. 
Danforth. Prior to my time in LEEU, I spent 11 %2 years as a Special 
Agent assigned to the Dallas Division of the FBI working a variety of 
criminal and intelligence assignments. Before joining the FBI, I worked 
for two years as an attorney in a small private firm in northern New 
Jersey. I am extremely proud of my nearly 15 years of service to the 
FBI, especially the last three.
                      Law Enforcement Ethics Unit
    The LEEU was established in 1996 by Director Louis J. Freeh and 
originally placed under the supervision of Unit Chief (UC) Frank L. 
Perry. Overall supervision of the Unit falls under the FBI Office of 
Professional Responsibility (OPR). At the Unit, I instruct New Agents, 
current Agents, and FBI support personnel in the importance of always 
maintaining high standards, and in never forgetting to place ethics and 
integrity at the center of their professional lives. I also have 
instructed and met with law enforcement officers from all over the 
United States, as well as from foreign countries, including Bulgaria, 
Hungary, Macedonia, Montenegro, Albania, Latvia, Egypt, Saudi Arabia, 
England, and Ireland. These countries look to the FBI to be the role 
model to either initiate or improve their law enforcement integrity 
programs. The FBI is often the standard by which others are measured. 
However, because the FBI is made up of humans, we too, have sometimes 
fallen short of the excellence which is expected and deserved by the 
American public. No one among us is perfect. We each have to struggle 
with our own individual foibles.
    One of the additional roles of the LEEU, when not instructing, is 
to periodically review FBI policies, procedures, and guidelines to 
ensure that the FBI is being fair to its own employees and to the 
American people. Should we discover a problem, it is our responsibility 
and obligation to point it out and correct it. It is not a role that we 
take lightly, particularly since many times, it may involve taking on a 
long-established FBI policy or procedure, which others may have 
declined to try to change for fear of negative career consequences or 
retaliation. However, my belief is that if the Ethics Unit could not 
speak the truth concerning a particular matter and attempt to implement 
needed change, what other Unit in the FBI would be willing to do it? It 
is this reasoning that has brought me to your hearing today.
             Senior Executive Service Accountability Report
    During 1999, I was the primary author behind a report entitled 
``FBI SENIOR EXECUTIVE SERVICE ACCOUNTABILITY: A HIGHER STANDARD OR A 
DOUBLE STANDARD?'' The Ethics Unit had heard on numerous occasions of a 
perceived double standard in the administration of discipline between 
FBI senior managers and rank and file employees. This was an issue that 
needed to be reviewed and challenged if true. Over a ten month period, 
cases were reexamined, statistics analyzed, and interviews conducted 
with knowledgeable personnel from the FBI OPR. The final report was 
handed to Director Freeh on September 1, 1999 by UC Perry.
    The findings from the report revealed that disparate treatment did 
exist between senior managers and the rank and file FBI employees. 
Instead of senior managers receiving greater discipline for an 
infraction, as one might expect because of their greater 
responsibilities, they oftentimes received less or even none. Specific 
cases were cited to illustrate the great lengths fellow senior managers 
went through to mitigate or downgrade the alleged misconduct. A 
recommendation was made to disband the special senior manager board, 
which reviewed all senior manager cases for discipline. To Director 
Freeh's credit, he corrected this inconsistency. In August 2000, he 
disbanded the senior manager board and created a single disciplinary 
system by which all FBI employees would have their cases adjudicated.
              Office of Special Counsel Liaison Assignment
    In November 1999, I was asked by Senator Danforth to become his 
sole liaison to the OSC investigation. He was initially experiencing 
some problems in obtaining the FBI's full cooperation. In the Ethics 
Unit, we realized the last thing the FBI should be doing was to hinder 
or obstruct an outside investigation where the Bureau was accused of 
covering up the facts. Every statement I read from the Director was 
that the FBI was pledging its ``full and complete cooperation'' toward 
the OSC. Anything short of that would only make the OSC and the 
American public more suspicious of the FBI. This lack of cooperation 
was not the posture to be taking while attempting to gain back the 
public's trust. Without that trust, the FBI will never be able to 
accomplish its law enforcement mission.
    As you may be aware, UC John E. Roberts, FBI OPR, declined this 
same liaison role because of how he had been treated after leading an 
outside criminal investigation against several of his colleagues within 
the FBI. UC Roberts believed his association with the earlier Ruby 
Ridge investigation had not made him any new friends in the FBI, and in 
fact had harmed his future career opportunities because of the findings 
and some of the confrontational interviews he needed to conduct. UC 
Roberts made me aware of his previous problems before I accepted the 
OSC assignment. At the time, I believed that the public did not fully 
understand everything that had happened at Waco and I wanted to be 
involved in a short-term high profile investigation which hopefully 
would clear it up once and for all.
                       Interaction Within The FBI
    My assignment as the new liaison to Senator Danforth seemed to meet 
with immediate resistance from the FBI's Office of General Counsel 
(OGC), who I believe still wanted to maintain control of the flow of 
information. When it was pointed out to Director Freeh that there was a 
conflict of interest with assigning me to the OGC, as some of their own 
personnel and practices were under investigation, he changed my 
reporting to the FBI's Inspection Division. Although I was placed in a 
different Division, the OGC was still coordinating the retrieval and 
release of FBI documents to the OSC. Accordingly, I continued to have 
almost daily contact with the OGC. Initially, certain managers took the 
position that they were only going to provide what was legally 
required, as opposed to disclosing all Waco documents, which the OSC 
had requested. This stance was similar to an adversarial legal 
proceeding. This attitude was unacceptable to the OSC and they signaled 
this displeasure to the FBI by ``visiting'' on the morning on December 
16, 1999 with approximately 15 investigators to search several offices 
of the OGC. Ultimately, although the process was definitely rocky, I do 
believe the OSC received full disclosure of any documentary evidence 
the FBI had in it's possession and their conclusions regarding the 
events at Waco were correct.
    While performing my role as OSC liaison, I was guided by one 
overriding philosophy. The OSC was to be provided with absolutely 
everything that had to do with WACO so they could make an independent 
and informed decision about the government's actions during that stand-
off. The FBI was not to make decisions regarding the ``relevancy'' of 
the information. That was for the OSC to decide. That is how I 
understood the phrase ``full and complete cooperation.'' I was trying 
to resolve issues with an eye toward the long-term best interests of 
the FBI and the nation, not a short-term expedient ``quick fix.'' 
Unfortunately, not everyone I dealt with at the FBI had this same 
mindset.
    As a result of taking this ``open the books'' stance, there were 
occasional disagreements with some senior managers from the various FBI 
Divisions. As a mid-level manager, I believe many in senior management 
were insulted that I was coming into their Divisions and requiring 
nothing short of total cooperation with the OSC. While some resented me 
for it, I believe many other dedicated Bureau employees realized this 
was the proper course of action, no matter how embarrassing the initial 
disclosures might be. Yet, people were told not to disclose to me 
problematic issues because the revelation would get back to the OSC. I 
was excluded from meetings which discussed responding to OSC requests. 
Official letters were sent out without my review because I believe 
certain managers felt I would object to the language or wording, if it 
was not completely honest and forthcoming. I was referred to as ``too 
controversial'' and in short, seen as disloyal to the FBI for 
attempting to cooperate with the OSC. This is further evidenced by the 
fact that when my OSC assignment was concluding and I was looking for 
other career opportunities at FBIHQ, it was brought to my attention 
that it might be best for me to ``just return to Quantico for a while 
and chill out.''
    Through my assignment with the OSC, I was made aware of several 
instances of potential FBI misconduct, which occurred during the time 
period of the Waco stand-off up through the current OSC investigation. 
I initially attempted to have the OSC include these matters in their 
final report issued in November 2000. However, based on their well-
defined written mandate from Attorney General Janet Reno, the OSC did 
not wish to include issues that were not central to their core 
investigation. This left me no choice but to report them to the FBI OPR 
in December 2000. Three of these referrals dealt with onboard senior 
managers of the FBI. Two of those three dealt specifically with what I 
perceived as retaliatory action toward me. I am content to allow the 
investigative process to proceed and only wanted those actions to be 
independently reviewed. I realize that retaliation can sometimes be 
very subtle and these cases are difficult to prove.
    As difficult as it may be to hear the daily bad news about the FBI, 
in my heart, I know some of the criticism is deserved. It makes it even 
harder for me to face as I represent the Ethics Unit of the FBI, where 
our goal is to teach the avoidance of many of the same problems we are 
dealing with today. It is not easy and very frustrating to routinely 
battle the leaders of your own organization on issues of ``doing the 
right thing.'' In an ideal world, the Ethics Unit of the FBI would 
never be in conflict with senior management.
                         Suggested Improvements
    Director Freeh made a great start in 1996 by significantly 
expanding the ethics program for the new Agents of the FBI. But the 
same message needs to be provided to the leadership of the 
organization. I do not believe that people intentionally want to make 
unethical decisions. However, everyone, myself included, needs the 
occasional reminder of why we joined the FBI. In almost all cases, it 
was to make a positive difference in the lives of American citizens. It 
was certainly not to make money. Nor should it have been to acquire 
power and influence. Unfortunately, sometimes career advancement at any 
cost becomes the ultimate goal and decisions are made for selfish 
interests, as opposed to the good of the organization or the country. 
This certainly is not unique to the FBI, but because of the FBI's 
considerable powers, it can have significant detrimental effects for 
the public.
    I would suggest consideration be given to establishing an Ethics 
Czar at FBIHQ, who would have input into every high-level policy or 
operational decision. This input would be based solely on an ethical 
perspective. Not legal, administrative, or procedural, as there are 
already people in place to answer those issues. But simply to step back 
from all the other pressures of a high profile criminal investigative 
agency and ask ``Is this the right thing for the FBI to do?'' 
Consideration should also be given to creating a similar position in 
every field Division of the FBI. If the FBI is really serious about 
implementing its fifth core value, that being ``uncompromising personal 
and institutional integrity,'' then we need to do more than teach it to 
the new Agents and never talk about it again.
    Finally, once the ethical message is out there, it must be backed 
up by action. Rhetoric alone will not suffice to truly change any 
ingrained cultural problems at the FBI. Those who fail to live up to 
the high standards expected of FBI employees must be disciplined 
appropriately, including demotions and dismissals. Only by sending a 
strong message, through both words and action that unethical behavior 
will not be tolerated, can we hope to prevent such misconduct. 
Attempting to cover-up investigative miscues from the American public 
or protect colleagues from career embarrassment, no matter how noble 
the intentions, should be the quickest way to get fired in the FBI. 
This is one of the classic law enforcement dilemmas my unit teaches the 
new Special Agents of the FBI, ``Honesty versus Loyalty.'' 
Unfortunately, the loyalty in that equation is misplaced. Loyalty 
should be to the country and the United States Constitution, not to 
your colleagues and friends who helped promote you. I am not saying 
allegiance and fidelity to your associates is wrong. Camaraderie is 
very important, especially in a law enforcement agency where Agents on 
a routine basis risk their lives for each other. However, when the 
choice is between those two worthy moral goals, an FBI employee must 
choose ``principles over persons.''
                               Conclusion
    During a recent visit with my family to the United States Naval 
Academy, we stopped in at the chapel. Over the entrance doors was a 
Latin phrase that I am sure every Naval Academy graduate knows, ``Non 
Sibi, Sed Patriae'' which means ``Not for self, but for country.'' That 
phrase succinctly summarizes what needs to be done at the FBI. That is 
the tone which needs to be set. Each person here today before your 
Committee has attempted to do that in the FBI. Countless other FBI 
employees live out that philosophy every day, with some having paid the 
ultimate sacrifice. It is for those heroes and others to come, why we, 
before you today, could not simply sit idle and allow these problems to 
continue. We all care too much about this organization. Sometimes you 
have to endure short-term pain for long-term health and vitality. 
Hopefully, with your Committee's oversight, a new administration, and a 
new Director, the FBI can begin its journey back toward the goal of 
being the premier law enforcement agency in the world, one which the 
American people can be proud.

    Chairman Leahy. Thank you, Mr. Kiernan.
    I am going to yield first to Senator Grassley, who, like 
other members of the Committee, has tried to juggle three other 
Committees today and who has spent so much time on this.
    So I will yield first to you and then I will complete with 
my questions.
    Senator Grassley. Thank you, and I don't think that I will 
use the full time, Mr. Chairman.
    First of all, I want to make clear not only to you, but to 
the other people at the FBI, and I want the public to also 
appreciate what whistleblowers go through. We appreciate, first 
of all, your testifying because I know those of who are still, 
and there are three of you still with the FBI, your speaking 
may subject you to retaliation.
    I want to refer to 18 U.S.C. 1505, which carries a criminal 
sanction for interfering with a Committee investigation. 
Certainly, retaliation against a witness is interference, so if 
at any time you believe that you are retaliated against for 
providing information to Congress, I encourage you to contact 
any office, but I want to let you know that my office would be 
open to receiving your statements and to helping you.
    In addition, I am going to be writing to the Attorney 
General today and the Acting Director of the FBI, reminding 
them of the protections that the law gives employees 
cooperating with a Committee investigating, including this 
Committee. I hope that other members of the Committee would 
join in that effort as well. I know the Chairman has already 
spoken out, but I want to make sure that they know I feel the 
same way the Chairman does.
    Chairman Leahy. I think the message goes out that if you 
called either Senator Grassley or myself, you would get 
straight through to us.
    Senator Grassley. I am going to start with this question: 
It is my understanding that after the report prepared by the 
FBI Ethics Unit on the SES/rank-and-file double standard, 
former Director Freeh disbanded the SES Adjudication Board as a 
means to adjudicate senior official misconduct.
    First, I would hope that that report, assuming it isn't too 
big, is made a part of the record.
    Chairman Leahy. It is already part of the record.
    Senator Grassley. OK, thank you.
    Could any of you comment on the system that is now place to 
adjudicate the misconduct of senior officials, and what are the 
positives and negatives of the new system?
    Mr. Roberts. The system now for SES and non-SES members of 
the FBI is one and the same; that is, it goes through the same 
disciplinary process. I don't have any information that any of 
those cases have been adjudicated to date fully. However, I 
think that it was a great move and I am encouraged that this 
will be at least part of the answer to having a fair system for 
both non-SES and SES employees.
    Senator Grassley. Does anybody else want to add anything?
    Mr. Perry. I might add, Mr. Grassley, that when we finished 
that report we felt it appropriate and prudent to hand it 
directly to Mr. Freeh. And Mr. Kiernan thought about how best 
to get it to him, but we felt that going through certain chains 
of command--and he was fully aware of what we were doing, as 
well as the fact that the head of our internal affairs OPR was 
fully aware that we were involved in this project, but was not 
fully aware of the ``what's'' of the project.
    Mr. Freeh reviewed it in detail. I think five assistant 
directors looked at it from the point of view of the inspection 
process, the legal process, as well as the SES process, and, as 
we indicated, approved it in August of 2000.
    However, Mr. Kiernan and I did face comments to the effect 
that we were ``lone rangers'' and that the Ethics Unit should 
not engage in that sort of thing, although Mr. Freeh had 
approved it himself. So it is an added symptom of what we had 
to go through to have that particular report approved, and it 
is now in place.
    Senator Grassley. The second question: From your testimony, 
it looks like you are split on the question of who should 
perform the investigation of senior official misconduct within 
the FBI, the FBI OPR agents or an outside entity such as the 
Department of Justice IG.
    At the same time, the kind of retaliation that has been 
experienced by all of you by conducting such investigations 
would lead one to conclude that a senior official investigation 
is not conducive to career enhancement. Don't you think this is 
bound to have a chilling effect, and wouldn't an outside entity 
be less liable to succumb to any fears of retaliation?
    Mr. Werner. The only thing that is clear to me through the 
years that I have worked in internal affairs is that FBI agents 
working under OPR, not outside of the OPR process, have always 
been able to do the proper thing.
    I will point out Ruby Ridge. Both Mr. Roberts and I knew 
about relationships that existed between individuals involved 
in the original incident, we quickly were able to seize upon 
important witnesses and interview them to get important 
information that led to the unraveling of the mystery of what 
happened during that event. Had it not been for the fact that 
we had that prior knowledge of relationships, mores, nuances of 
management, I don't think we could have done that.
    I think it is important that you have FBI personnel 
involved in the process, with some kind of oversight, whether 
it be an inspector general of the FBI, using FBI personnel, or 
oversight by this Committee over the OPR division of the FBI. 
But I think it is important for the organization to investigate 
their own, as Mr. Kelly suggested in earlier testimony before 
this Committee.
    Senator Grassley. That is the end of my questioning. I 
thank you very much for being kind to me to let me go first.
    Chairman Leahy. Do you have more? If you have another one, 
go ahead.
    Senator Grassley. To Mr. Perry, in your review of the Ruby 
Ridge investigation, you recommended disciplinary action be 
taken with respect to several senior FBI officials. Now, I know 
you can't provide any names and I don't expect you to, but 
could you please describe the reasons for your recommendations; 
that is, the type of misconduct that you found?
    Mr. Perry. We found that the initial investigation which we 
were investigating which was conducted by inspectors--that is 
not to disparage that process, but the original investigation 
was taken out of the hands of OPR, for a number of good reasons 
and some not very good reasons.
    We were looking at that investigation because we saw a 
circle of conflict, as it were, friends investigating friends, 
people who had been promoted having been promoted by 
individuals that served on former SES career boards that they 
were now investigating and/or adjudicating. We felt that that 
entire process was flawed, and that therefore there was a 
misuse of position aspect of that, which is an OPR category of 
misconduct. We looked at that, as well as the adjudication 
process, as well as some actions on the part of others, as it 
was alleged that they tended to pull the investigation in 
certain directions, away from certain people.
    We also looked at an aspect pursuant to the inquiry by Mr. 
Werner and Mr. Roberts that certain people had not been 
interviewed, that the original investigation was incomplete. In 
one case, we found over a dozen people who were not interviewed 
who could speak to, for example, the rules of engagement which 
led in many ways to the horrible tragedy.
    So it was that sort of thing that we wrote up, and I think 
there was a preponderance of testimony and evidence that some 
actions should have been taken, both negative and positive, and 
no actions were taken, to my knowledge.
    Senator Grassley. Do you think these things are resolved or 
are there still some things from Ruby Ridge unresolved?
    Mr. Perry. I believe that a final product that is complete 
and objective, unbiased, has yet to be seen as far as from the 
point of view of adjudication. In fact, I am not aware of the 
Bureau ever releasing the adjudicative results of the 
investigation of the investigation.
    Senator Grassley. That is maybe something we would want to 
pursue.
    Chairman Leahy. I think eventually we are going to see it.
    I spent an awful lot of time on Ruby Ridge. Senator 
Specter, Senator Kohl, myself and others were involved in that. 
Hindsight, of course, is always 20/20, but you didn't have to 
be too much of an expert to know, one, that there were a number 
of serious mistakes made, but, second, that worse than some of 
the mistakes made at Ruby Ridge were the efforts made to cover 
them up. Promotions were given to people who should have been 
severely censured, and other things went on that just made no 
sense.
    In January of 2001, the Assistant Attorney General for 
Administration, Stephen Colgate, found that there was no 
misconduct on the part of FBI employees in the Ruby Ridge 
matter.
    Mr. Roberts, you said that conclusion was ``outrageous and 
alarming,'' I believe those were your words. So I would ask, 
based upon your knowledge of the facts and the precedent in 
disciplining FBI agents, and your own experience in reviewing 
the adjudication of the misconduct of FBI agents, do you 
believe that agents at the senior management level of the FBI 
should have been disciplined, without going into particular 
names?
    Mr. Roberts. Yes, sir, I do. I also believe that the Ruby 
Ridge incident, from beginning to where we are now, is probably 
one of the best training documents that could exist on how not 
to do things; that is, how not to conduct internal 
investigations, how not to do shooting inquiries, how not to 
adjudicate a matter.
    I do find it alarming, and I don't know how many have had 
an opportunity to read that report, but I would submit to you 
that to read that report and to see the preponderance of the 
evidence would lead most of us to conclude that there was some 
serious misconduct, or else we wouldn't be talking about this 
today.
    It is alarming to me that no one was at fault for what 
occurred in the aftermath of the Ruby Ridge incident; that is, 
the investigations, those people that conducted the 
investigations, the flaws in the investigation, the lack of 
following logical leads, logical evidence in an investigation 
such as that.
    And I might add, knowing that the Department of Justice and 
the FBI conducted the investigation jointly, I find it 
troubling that those in the FBI who were assisting in that 
investigation did not provide the proper guidance to the 
Department of Justice attorneys investigating that incident. I 
think it is a case of wanting to protect the organization, of 
wanting to protect perhaps people that you know or that you 
knew or that you had served with. I don't know where this will 
go. I don't know how it will end up in the future.
    Chairman Leahy. Well, how high up did that culpability go? 
I mean, if there were people who were not doing things right or 
were covering things up or were failing to follow obvious 
trails--and I can think of several instances that justify 
everything you have said there from my own experience in that 
case, but how high up does that go?
    Mr. Roberts. I think it goes to the highest levels of the 
FBI, sir, the highest levels.
    Chairman Leahy. I believe you are right.
    Mr. Roberts. And that is not easy for me to say. I think 
you will find that all of us here--
    Chairman Leahy. It is not easy for me to say either, Mr. 
Roberts, because I am one who has been a very, very strong 
supporter of the FBI. My earlier career was in law enforcement. 
I have always felt that in many ways the most challenging and 
rewarding public career I have had has been in the area of law 
enforcement. But Ruby Ridge was a very, very disturbing thing, 
and the more you peeled the onion back, the more disturbing it 
became.
    I am sorry. You were going to say something else. I didn't 
mean to interrupt.
    Mr. Roberts. I just was going to say that all of us here 
thoroughly enjoy being employed by the FBI. We want nothing 
else but to be employed by the FBI, but we all four have 
concerns, and I think Ruby Ridge is just one of the best 
examples of how not to conduct business.
    Chairman Leahy. Well, let me just say on a personal note--
and I may have other questions for the record, so we can wrap 
this up--you mentioned enjoying being with the FBI. And, Mr. 
Werner, even though you are retired, I could feel the affection 
and the pride, both of which are deserved, from your own 
experience.
    You, Mr. Perry, and Mr. Kiernan, you are down there at 
Quantico and you see some of the smartest and most able men and 
women come into the training programs there, and if they make 
it through, you know they are good.
    I remember in my days as a prosecutor when we would have 
police officers from our State of Vermont at either the local 
or State level who were going to go off to the FBI Academy to 
get further training, and many with my strong recommendation, 
how proud they were and how proud I was to have them back into 
a force that ultimately was responding to me and my office.
    Even today, I have police officers from our State of 
Vermont, very good police officers, many I have known from the 
time they were first sworn in, who tell me they have an 
opportunity to go into the FBI and they will call me and ask 
for my advice. I know the pride they feel in going in there.
    What we are trying to do is make sure that pride will 
always be justified, not just for the men and women who you 
have coming through, but those who are there today and for all 
of our sakes. This should be the example of the best of the 
world.
    I don't want it to be a case where, Mr. Werner, the people 
hide mistakes, saying they are trying to protect the image of 
the FBI, because that doesn't protect them, as you pointed out, 
especially when it is done to protect each other. I don't want 
to see SES members on promotion boards making it very clear 
that if you blow the whistle or ask questions, you are going to 
face it when you reach the promotion board.
    I want the best. I mean, no organization is perfect. I got 
elected to one that I respect greatly. I think of the U.S. 
Senate as being the conscience of the Nation, but we can point 
to people in both parties who have not shown that conscience. 
We can point out mistakes.
    I became the 21st person in our Nation's history to cast 
10,000 votes. I can go back to those 10,000 votes and find some 
I wish I had done differently. But we do most of what we do out 
in the open and in the public, and if we make a mistake we 
usually have constituents who are going to tell us about it at 
the next election. And when that happens, we usually end up 
better. If mistakes have been made in Congress and if they have 
been made public, we usually get better for it, and the same 
with any law enforcement agency.
    I admire what you do, Mr. Werner. I admire what you have 
done. I think you are in a proud organization, but I think with 
what you have done today in your testimony, you make it 
potentially a prouder organization and certainly a better one.
    I thank you, and we will stand in recess.
    [Whereupon, at 1:36 p.m., the Committee was adjourned.]
    [Questions and answers and submissions for the record 
follow.]
    [Additional material is being retained in the Committee 
files.]

                         QUESTIONS AND ANSWERS

Questions from Senator Leahy and Senator McConnell for Senator Danforth

    1. Senator Danforth testified about an FBI agent who reportedly did 
not want to act as the FBI liaison for the Waco investigation for fear 
that doing so would hurt his career, and a second agent, who did agree 
to act as liaison, who believed that he was retaliated against as a 
result.

        a. Do you have an opinion of how significant a problem it is 
        for FBI employees to be reluctant to report wrongdoing within 
        the FBI because of the fear of retaliation?
        b. Is there currently adequate protection for whistleblowers 
        within the FBI?
        c. What, if anything, would be an appropriate way to strengthen 
        whistleblower protections for FBI agents?

    2. Senator Danforth referred to the unwillingness of some in the 
FBI to acknowledge their mistakes because of an FBI ``culture'' that 
seeks to avoid public embarrassment. What should be done to change this 
unwillingness to admit mistakes?
    3. Mr. Bromwich testified that the FBI has sometimes been resistant 
to obtaining guidance from groups or agencies outside of itself as 
shown, for example, in the problems with the FBI laboratory.

        a. Do the other members of the panel agree that the FBI needs 
        to be more open to outside influences?
        b. If so, in what ways has such a lack of openness made the FBI 
        less effective?
        c. How could the FBI be made more open to outside influences?

    4. One of the specific issues that this Committee may look at is 
how well the FBI works with its sister law enforcement agencies. The 
1997 Inspector General' s report on the Ames case concluded that the 
failure to detect Ames's espionage sooner was partly the result otlack 
of coordination between the FBI and the CIA. Recently, we have heard 
allegations that the FBI failed to provide evidence to the Alabama 
Attorney General that would have enabled him to prosecute two men in 
the Birmingham church bombing case in 1977. One of these men was 
convicted only this year and another apparently will not be prosecuted 
at all because of his mental condition. Do any of you have any view 
about how well the FBI works with other law enforcement agencies or 
what it might do to improve in this area?
    5. Just three weeks ago, the Ninth Circuit Court of Appeals 
reversed a district court decision that FBI Special Agent Lon Horiuchi 
was immune from prosecution on State manslaughter charges arising from 
his role in the 1992 Ruby Ridge standoff. Idaho v. Horiuchi, 2001 WL 
604255 (9th Cir. June 5, 2001) (en banc). Four former Attorneys General 
and a former FBI Director had filed an amicus brief arguing that the 
decision eventually reached by the Ninth Circuit would ``severely 
undermine, if not cripple, the ability of future Attorneys General to 
rely on specialized units in moments of crisis such as hostage taking 
and terrorist acts,'' and that it was ``impossible to imagine a more 
chilling circumstance'' than the prosecution of Agent Horiuchi. 
Furthermore, the dissenting Ninth Circuit judges stated that the 
decision was a ``grave disservice'' to Federal agents, ``who knew until 
now that if they performed their duties within the bounds of reason and 
without malice that they would be protected from state prosecution by 
Supremacy Clause immunity and not subjected to endless judicial second-
guessing.'' This leaves open a disturbing uncertainty concerning when 
Federal agents may be prosecuted by states for actions taken in the 
course of their official duties. This issue is obviously very important 
to the FBI and to Federal law enforcement generally. Do you believe 
that it is important for this Committee to consider legislation that 
would clarify this difficult area of immunity from State prosecution 
for actions taken as a Federal agent?

          Question from Senator McConnell to Senator Danforth

    Senator Danforth, you testified that the single best way to address 
many of the problems you encountered is to ``change the culture'' of 
the FBI. But changing the culture in any environment is usually a 
difficult task. How achievable is the goal of changing the culture of 
the FBI, and other than providing strong and persistent messages about 
the importance of honesty, cooperativeness, and accountability, what 
else can be done to achieve this goal?

                                

             Questions from Senator Leahy for Norman Rabkin

    1. Senator Danforth testified about an FBI agent who reportedly did 
not want to act as the FBI liaison for the Waco investigation for fear 
that doing so would hurt his career, and a second agent, who did agree 
to act as liaison, who believed that he was retaliated against as a 
result.

        a. Do you have an opinion of how significant a problem it is 
        for FBI employees to be reluctant to report wrongdoing within 
        the FBI because of the fear of retaliation?
        b. Is there currently adequate protection for whistleblowers 
        within the FBI?
        c. What, if anything, would be an appropriate way to strengthen 
        whistleblower protections for FBI agents?

    2. Senator Danforth referred to the unwillingness of some in the 
FBI to acknowledge their mistakes because of an FBI ``culture'' that 
seeks to avoid public embarrassment. What should be done to change this 
unwillingness to admit mistakes?
    3. Mr. Bromwich testified that the FBI has sometimes been resistant 
to obtaining guidance from groups or agencies outside of itself as 
shown, for example, in the problems with the FBI laboratory.

        a. Do the other members of the panel agree that the FBI needs 
        to be more open to outside influences?
        b. If so, in what ways has such a lack of openness made the FBI 
        less effective?
        c. How could the FBI be made more open to outside influences?

    4. One of the specific issues that this Committee may look at is 
how well the FBI works with its sister law enforcement agencies. The 
1997 Inspector General' s report on the Ames case concluded that the 
failure to detect Ames's espionage sooner was partly the result otlack 
of coordination between the FBI and the CIA. Recently, we have heard 
allegations that the FBI failed to provide evidence to the Alabama 
Attorney General that would have enabled him to prosecute two men in 
the Birmingham church bombing case in 1977. One of these men was 
convicted only this year and another apparently will not be prosecuted 
at all because of his mental condition. Do any of you have any view 
about how well the FBI works with other law enforcement agencies or 
what it might do to improve in this area?
    5. Just three weeks ago, the Ninth Circuit Court of Appeals 
reversed a district court decision that FBI Special Agent Lon Horiuchi 
was immune from prosecution on State manslaughter charges arising from 
his role in the 1992 Ruby Ridge standoff. Idaho v. Horiuchi, 2001 WL 
604255 (9th Cir. June 5, 2001) (en banc). Four former Attorneys General 
and a former FBI Director had filed an amicus brief arguing that the 
decision eventually reached by the Ninth Circuit would ``severely 
undermine, if not cripple, the ability of future Attorneys General to 
rely on specialized units in moments of crisis such as hostage taking 
and terrorist acts,'' and that it was ``impossible to imagine a more 
chilling circumstance'' than the prosecution of Agent Horiuchi. 
Furthermore, the dissenting Ninth Circuit judges stated that the 
decision was a ``grave disservice'' to Federal agents, ``who knew until 
now that if they performed their duties within the bounds of reason and 
without malice that they would be protected from state prosecution by 
Supremacy Clause immunity and not subjected to endless judicial second-
guessing.'' This leaves open a disturbing uncertainty concerning when 
Federal agents may be prosecuted by states for actions taken in the 
course of their official duties. This issue is obviously very important 
to the FBI and to Federal law enforcement generally. Do you believe 
that it is important for this Committee to consider legislation that 
would clarify this difficult area of immunity from State prosecution 
for actions taken as a Federal agent?
    6. The work that GAO does for the Congress is very important in 
informing both Members and the public and providing sunshine on many 
government functions. For that reason, the Congress has provided broad 
authority for you to get the information you need to do your work. The 
details you provide in your testimony about the delays you face in your 
dealings with the FBI and how those delays have adversely affected your 
ability to do your work efficiently and provide timely information and 
advice to the Congress are important for us to hear.

        a. How do you usually try to resolve your access problems at 
        the FBI?
        b. In your testimony you describe several situations in which 
        you experienced significant delays in getting information from 
        the FBI that you needed to perform an investigation. Have there 
        been any circumstances in which the GAO has been unable to 
        complete an investigation that Congress asked it to perform 
        because the FBI failed to provide you with information you 
        requested?
        c. What impact has your experience with the FBI had on the kind 
        and amount of oversight you give the agency?
        d. What are some areas that the Committee should consider for 
        future oversight of the FBI?
    7. The GAO performs oversight investigations of many federal 
agencies in addition to the FBI. Could you describe how the FBI's 
record of cooperation with your oversight investigations compares with 
other agencies that are involved in law enforcement or 
counterintelligence?

                                

Responses of John C. Danforth to questions submitted by Senators Leahy 
                             and McConnell

               Responses to questions from Senator Leahy
    Question 1a. As to the extent of the problem, my opinion is based 
on conversations with experienced federal prosecutors who worked with 
me in the Office of Special Counsel (OSC). I do believe the FBI has an 
unwritten policy of doing nothing to embarrass the FBI. The agency has 
a great deal of leverage over its agents and significant ability to 
punish ``troublemakers,'' with its power of promotions and job 
assignments. Therefore I believe that there is a real reluctance on the 
part of most FBI employees to report wrongdoing.

    Question 1b. I am unaware of what procedures the FBI has to protect 
whistleblowers. The problem the OSC confronted was not really a 
whistleblower situation. Rather, we were dealing with employees who 
were concerned about the effect on their careers of simply doing their 
jobs by cooperating fully with ongoing investigagtions. The reality for 
an employee who loves his Job is that there is no realistic protection 
from the isolation and rejection which can result from reporting 
wrongdoing within the organization or exposing it to criticism. This is 
only exaggerated in a law enforcement agency when an agent's life may 
depend on the support of fellow agents. There is no procedure which 
will protect an agent from such perceived consequences.

    Question 1c. A system which guaranteed complete anonymity would be 
essential. This would probably require being able to report to someone 
outside the FBI. But the issue which I believe truly needs to be 
addressed is the agency's resistance to being open and candid when 
dealing with the public and other governmental organizations. It 
appears to be an attitude which permeatesthe agency and which creates 
problems for the agency more than a need to protect potential 
whistleblowers.

    Question 2. The consistent message from the Department of Justice 
and the FBI should be that careers in the agency can survive mistakes, 
because everyone makes mistakes, but careers cannot survive coverups. 
Candor must be the highest value at the FBI.

    Question 3a. The FBI is one of the finest, if not the finest, law 
enforcement agency in the world. But every agency has room for 
improvement. Therefore, I fully agree that the FBI should be open to 
suggestions and ideas from outside agencies and groups.

    Question 3b. As I think happened in the case of the Waco 
investigation, the FBI's sometimes perceived arrogance and lack of 
willingness to consider other agencies' input creates a lack of trust 
which makes it harder to accomplish its objectives when dealing with 
other agencies. I am also well aware that the FBI often is very 
successful at working with other agencies and utilizing resources and 
ideas of odaee a-,encies.

    Question 3c. This is an attitude which must come from the top down. 
While the Attorney General can issue orders, the responsibility must 
fall to the Director of the FBI, whom all the agents view as their 
ultimate boss.

    Question 4. There are many stories which could be told about how 
well the FBI has worked with other agencies and many stories of how the 
FBI did not work well with other agencies. The stories we heard from 
Waco indicated that the FBI did not get along well with other law 
enforcement agencies there to assist in the situation. However, 
situations as volatile as Waco cannot be handled by Committees. 
Decisions have to be made on a moment's notice. Decisions cannot be 
weighed down by concerns of making sure everyone feels included and has 
an equal say. The FBI rightfully demands full control of some of the 
matters it handles.
    Conversely, the situations listed in your question relate more to 
the issue of sharing information. This problem again arises from the 
FBI not feeling the need to be open and candid with those outside the 
FBI. This is clearly an institutional problem which is created by an 
attitude of ``we know what is best.'' Many federal agencies often feel 
in competition with each other--vying for recognition, vying for 
limited budgetary funds--which leads to the perception that the sharing 
of information could be threatening to said agencies. The sharing of 
law enforcement information is significantly important to successful 
control of criminal activity. A system encouraging all law enforcement 
to fully cooperate with each other is a more appropriate remedy than 
simply trying to zero in on the FBI.

    Question 5. I have not studied the Ninth Circuit opinion. My 
initial opinion is that states should not prosecute federal officials 
for conduct pursuant to their offices.
             Response to a question from Senator McConnell
    Each federal law enforcement agency operates with certain goals. 
These goals are usually quantifiable into statistics kept by the agency 
and submitted to Congress each year. The statistics by which an agency 
is judged may need to be adjusted to encourage openness and 
cooperation. These same statistical evaluations are also made at the 
promotion level for agents. Success for interagency cooperation and 
proper disclosure of information should be rewarded.
    One of the primary objectives of the FBI is to investigate and help 
prosecute criminals. The FBI generally believes that there is a 
separation of duties: they investigate, the prosecutors prosecute. 
However, many cases could be handled better and information more 
readily be shared if the FBI felt it had to answer to the prosecutor at 
each stage of the investigation. The prosecutor needs to foster 
openness and cooperation to be as successful as possible. There fore, 
if he/she is in charge of investigations at an early stage, some of the 
problems which have been discussed might be avoided. The director of 
the FBI should require that agents work with assistant U.S. Attorneys 
on their cases as early as possible.
    Leadership is key here. I believe the culture can be changed much 
more easily than some would think if it was the number one priority of 
the director.
    One example points directly to the problem. More than eight months 
ago, the Office of Special Counsel referred an FBI attorney to the 
Office of Professional Responsibility for lying to federal 
investigators during the Waco investigation. No action has yet been 
taken to discipline the employee. To the contrary, I have been told she 
was given an award for her work on the Waco matter. The FBI should have 
a system in place to swiftly deal with employees who do not exercise 
total honesty, cooperation and accountability.
    In this regard, I am aware of the difficulties today to terminate a 
federal employee's employment. Consideration should be given to 
eliminating some of the legal obstacles to firing dishonest FBI and 
Department of Justice employees. While we must be protective of an 
individual's legal rights, a law enforcement agency handling sensitive 
matters must have the ability to take swift action to uphold its 
standards.

                                

 Responses of Norman J. Rabkin to questions submitted by Senator Leahy

    1. With respect to the adequacy of protections that are provided to 
FBI whistleblowers, we have not reviewed this issue and thus cannot 
address the question.
    2. Concerning the question about what can be done to change a 
``culture'' that is unwilling to admit mistakes, we believe that it is 
important particularly for public institutions, like the FBI, to 
recognize situations where performance has not met expectations. This 
is the first step in assessing the causes and the corrective actions 
needed to ensure, if possible, that future efforts meet expectations. 
It is also important for such institutions to differentiate between 
honest errors in judgement and ones resulting from inappropriate or 
negligent actions. Institutions need to be tolerant of the former and 
recognize that despite peoples' best efforts unwanted outcomes may 
occur. Punishing individuals who make honest misjudgments could create 
an institutional environment plagued by decisional paralysis. 
Therefore, individuals need to know that as long as they act 
responsibly and within their authority, they will not be punished or 
become scapegoats if their decisions go awry. In this regard, FBI 
management needs to have controls and processes in place that are aimed 
at minimizing shortfalls in performance. When shortfalls occur, the 
Bureau should have processes and procedures for identifying them and 
addressing, through training and/or agency policy revisions, how best 
to ensure that they do not occur again. Finally, enhanced and 
continuous, constructive oversight of FBI programs and activities by 
independent organizations, like GAO and the Justice IG, could help 
change the FBI culture by identifying operational problems and 
deficiencies, as well as efficiencies, and working with the Bureau to 
bring about solutions.
    3. With regard to your question about whether the FBI needs to be 
more open to outside influences, in several instances and in hindsight, 
it is clear that the FBI would be better served by being more open to 
outside influences. Certainly as pointed out by Mr. Bromwich in the 
Justice Office of Inspector General's 1997 report on the FBI laboratory 
and in the FBI's efforts to upgrade its technology, especially as such 
technology relates to FBI information systems, outside expertise could 
have been helpful. In some other areas, however, the FBI has sought 
outside assistance, most notably in investigative areas involving 
foreign counterintelligence, counterterrorism, and drug intelligence. 
The FBI's increased participation in joint initiatives with other 
federal, state, and local law enforcement agencies could go a long way 
toward improving its openness to other viewpoints. Likewise, more 
openness to and cooperation with independent oversight initiatives and 
external reviews on a regular basis could make the FBI more open to 
outside influences and alternative approaches.
    4. Regarding how well the FBI works with other law enforcement 
agencies, we are aware that over the last several years the FBI has 
increased its participation in joint task forces and has assigned some 
of its agents to work at other agencies as well as having other 
agencies' personnel work at the FBI. We have not specifically reviewed 
the question of how well the FBI works and coordinates with other law 
enforcement agencies.
    However, we know from ongoing work in the foreign 
counterintelligence area, for example, that at times there are legal 
concerns that can affect coordination efforts.
    5. Concerning whether the Committee should consider the question of 
immunity for FBI agents from state prosecutions, clearly this is an 
issue that is important to law enforcement, including the FBI. However, 
it is not an issue that we have studied and, therefore, not one on 
which we can comment.
    6a. Concerning how we try to resolve access problems at the FBI, 
our first step is to try to work through the FBI's designated liaison 
to resolve problems. If those efforts are unsuccessful, we try to work 
through higher-level FBI officials in the Office of Public and 
Congressional Affairs. If those efforts are unsuccessful, we refer the 
matter to the FBI Deputy General Counsel for resolution. Should this 
effort also be unsuccessful, our next step, as noted in our testimony, 
is to have the Comptroller General, under GAO's statutory authority, 
send the FBI Director a letter demanding access. The FBI Director would 
then have 20 days, by law, to respond.to the letter. If access has 
still not been granted, the Comptroller General can bring suit in 
federal district court to compel access. As also stated in our 
testimony, in only one instance has the Comptroller General issued the 
FBI Director a demand letter and in that instance the FBI ultimately 
complied with our request. It is important to note that the biggest 
impediment we often face is not so much the FBI's outright denial of 
requests for information and interviews as it is the delays in 
providing access to needed documents and pertinent officials and 
employees because of the Bureau's bureaucratic process. These delays 
invariably lengthen the timeframes of our FBI reviews, in comparison to 
reviews of other agencies, and make it very difficult to provide timely 
products to congressional clients.
    6b. Regarding the question of whether there have been 
congressionally requested investigations that we have been unable to 
complete because the FBI failed to provide us information we requested, 
the answer is no. However, we would note the instance described in our 
testimony where in order to avoid delaying the issuance of our report, 
we dropped the FBI from a multi-agency review of federal teams that 
respond to chemical, biological, radiological, and nuclear terrorist 
incidents because the FBI refused to provide us requested information. 
There also have been instances where we have had to adjust our 
methodology or scope in conducting our work due to difficulties in 
obtaining timely access to needed information. For example, during our 
review of the FBI's costs associated with the Montana Freemen standoff, 
we lost an opportunity to do a partial check of the completeness of the 
FBI' reported cost estimates because the Bureau would not provide us 
access to the operational plan and report relating to the standoff, 
which contained the planned and actual use of assets.
    6c. You asked what impact our experience with the FBI has had on 
our oversight of the FBI. Our experience with the Bureau has clearly 
impacted the work that we have done. Because of the difficulty we have 
encountered in obtaining information in a complete and timely manner 
even on congressionally requested reviews, we generally have not self-
initiated reviews of specific FBI programs and activities. Moreover, in 
recent years, even congressionally requested work has been limited. In 
general, the FBI has been more responsive to our efforts when the 
Committee or Subcommittee requesting the work has FBI financial or 
oversight responsibilities or where the information we are seeking is 
for comparative purposes and the primary subject of the review is 
another law enforcement agency. But, even in those situations, the 
timeframes for our work are often longer than necessary due to FBI 
delays in responding to our information requests.
    6d. Concerning areas that the Committee should consider for future 
oversight, the FBI has a wide range of programs, activities, and 
operations to carry out its mission and responsibilities. Over the past 
decade, its resources and responsibilities have increased 
significantly. Therefore, there is a growing need for oversight of 
programs, activities, and operations that have had little or no 
external oversight. Future oversight areas could include the 
implementation, management, and results of specific investigative and 
investigative-support programs; infrastructure issues, such as the 
acquisition and implementation of information systems; coordination of 
FBI efforts with other investigative and intelligence agencies and with 
prosecutorial agencies; controls over significant items such as 
confidential informant funds and evidence; and human capital issues, 
such as training and skills acquisition. We would be happy to discuss 
potential areas with Committee members or staff at their convenience 
and in the context of the Committee's agenda and current interests.
    7. Comparing the cooperation we have received from the FBI with 
that received from other law enforcement agencies, as noted in our 
testimony, our access-to-records problems have been by far the most 
contentious at the FBI. Can occasion, we have encountered access issues 
at other law enforcement agencies because of the general sensitivity of 
law enforcement information. However, we have generally been much more 
successful in obtaining investigative and program-related information 
from other agencies, such as the Drug Enforcement Administration and 
Bureau of Alcohol, Tobacco and Firearms, than from the FBI. For 
example, in a recent review of a DEA investigative program, we obtained 
timely access to a sample of completed DEA headquarters investigative 
files with limited redaction.

                                

Responses of William H. Webster to questions submitted by Senator Leahy

    The following is in response to Senator Leahy's letter to me dated 
June 28, 2001. These answers represent my personal views and not those 
of the U.S. Department of Justice's Commission for the Review of FBI 
Security Programs which I chair. As the Commission's review and 
research continues, my views may change. For your convenience, the 
questions' are also listed below.
    1. Senator Danforth testified about an FBI agent who reportedly did 
not want to act as the FBI liaison for the Waco investigation for fear 
that doing so would hurt his career, and a second agent, who did agree 
to act as liaison, who believed that he was retaliated against as a 
result.
    a. Do you have an opinion of how siguificant a problem it is for 
FBI employees to be reluctant to report wrongdoing within the FBI 
because of the fear of retaliation?
    In my experience, special agents were willing to and did report 
serious acts of misconduct by other agents to appropriate internal 
authorities particularly actions which reflected discredit on the 
Bureau. There may have been some who feared retaliation but retaliation 
for properly registered complaints is forbidden policy and practice. It 
was also the understood policy of DOJ-OPR to monitor careers of FBI 
secundees for five years to assure no retaliation.
    b. Is there currently adequate protection for whistleblowers within 
the FBI?
    During my tenure as Director, whistleblowers were fully protected. 
In a few circumstances, as in other agencies, substandard employees 
will seek whistleblower protection to avoid being held accountable for 
poor performance.
    c. What, if anything, would be an appropriate way to strengthen 
whistleblower protections for FBI agents?
    The protections should already there. Periodic reminders in Bureau 
messages and publications might enhance awareness and confidence that 
this is indeed Bureau policy.
    2. Senator Danforth referred to the unwillingness of some in the 
FBI to acknowledge their mistakes because of an FBI ``culture'' that 
seeks to avoid public embarrassment. What should be done to change this 
unwillingness to admit mistakes?
    ``Don't Embarrass the Bureau'' is a quote out of a different era. 
It is human not to advertise mistakes, but the Bureau should emphasize 
the importance of responding truthfully to official inquiries and the 
reed to cooperate fully to avoid repetition by others (``lessons 
learned ''). Discipline for concealment or lack of candor is 
appropriate.
    3. Mr. Bromwich testified that the FBI has sometimes been resistant 
to obtaining guidance from groups or agencies outside of itself as 
shown, for example, in the problems with the FBI laboratory.
    a. Do the other members of the panel agree that the FBI needs to be 
more open to outside influences?
    There are areas of specialization that require skills that are 
outside normal FBI investigative work. Special agents did not sign up 
to do this work. Getting or bringing in outside expertise is more 
common today and should be welcomed especially in areas of technology. 
Outside accreditation is no longer threatening.
    The FBI has drawn on CIA personnel to improve its security and 
analytical capability and FBI special agents have participated in 
various interagency Committees and joint task forces.
    4. One of the specific issues that this Committee may look at is 
how well the FBI 1works with its sister law enforcement agencies. The 
1997 Inspector General's report on the Ames case concluded that the 
failure to detect Ames's espionage sooner was partly the result of lack 
of coordination between the FBI and the CIA. Recently, we have heard 
allegations that the FBI failed to provide evidence to the Alabama 
Attorney General that would have enabled him to prosecute two men in 
the Birmingham church bombing case in 1977. One of these men was 
convicted only this year and another apparently will not be prosecuted 
at all because of his mental condition. Do any of you have any view 
about how well the FBI works with other law enforcement agencies or 
what it might do to improve in this area?
    The unidentified problem which became the ``Ames case'' was 
promptly reported to the FBI and one or two special agents were 
assigned as liaison. The coordination could have been better and I 
believe has been markedly better since that time.
    The FBI maintained a position in the EPIC Center of DEA at El Paso, 
Texas but did not give open access to its Organized Crime files, These 
accommodations have to be made to protect sources.
    Corruption in some law enforcement agencies is a constant concern. 
Efforts to improve cooperation and integrity can be found both 
domestically and internationally. The Bureau's National Academy and 
numerous Joint Task Forces attest to this effort. The quotation in the 
courtyard at FBI HQ is significant:
    ``The key to effective law enforcement is cooperation at all levels 
and with the support and understanding of the American people.''
    5. Just three weeks ago, the Ninth Circuit Court of Appeals 
reversed a district court decision that FBI Special Agent Lon Horiuchi 
was immune from prosecution on State manslaughter charges arising from 
his role in the 1992 Ruby Ridge standoff, Idaho v. Horiuchi, 2001 WL 
604255 (9th Cir. June 5, 2001) (en banc). Four former Attorneys General 
and a former FBI Director had filed an amicus brief arguing that the 
decision eventually reached by the Ninth Circuit would ``severely 
undermine, if not cripple, the ability of future Attorneys General to 
rely on specialized units in moments of crisis such as hostage taking 
and terrorist acts,'' and that it was ``impossible to imagine a more 
chilling circumstance'' thane the prosecution of Agent Horiuchi. 
Furthermore, the dissenting Ninth Circuit judges stated that the 
decision was a ``grave disservice'' to federal agents, ``who knew until 
now that if they performed their duties within the bounds of reason and 
without malice that they would be protected from state prosecution by 
Supremacy Clause immunity and not subjected to endless judicial second-
guessing.''
    This leaves open a disturbing uncertainty concerning when federal 
agents may be prosecuted by states for actions taken in the course of 
their official duties. This issue is obviously very important to the 
FBI and to federal law enforcement generally. Do you believe that it is 
important for this Committee to consider legislation that would clarify 
this difficult area of immunity from State prosecution for actions 
taken as a Federal agent?
    I believe this issue has Constitutional underpinnings. As you know, 
the present prosecutor in that case recently dismissed it. I was one of 
those who signed the amicus brief. It might be helpful to clarify and 
protect from state prosecutions federal agents who are acting in the 
reasonable belief that their procedures were lawful under U.S.law. I 
would not however suggest a blanket immunity from civil liability where 
actions were grossly negligent or involved unreasonable use of deadly 
force.
    6. On June 20, 2001, the day of this Committee's first FBI hearing, 
Attorney General Ashcroft issued a memorandum requesting the Strategic 
Management Council (``SMC '') of the Department of Justice to undertake 
a comprehensive review of the FBI and to submit recommendations for 
reform by January 1, 2002. The memorandum also requests the SMC to 
commission a management study of the FBI by a private fun.
                a. Have you had any meetings with members of the SMC to 
                discuss the coordination of your investigations with 
                theirs?
    No
    b. Have you reached any agreements with the SMC as to how to 
coordinate your respective reviews with theirs?
    No
    c. The Attorney General's memorandum requests that you submit your 
review to the SMC on or before November 1, 2001. Do you expect to be 
able to comply with that schedule?
    We will do our best but it is more important to have an informed 
and thorough report than to curtail our efforts prematurely. We 
understand our charter is not necessarily terminated on November 1, but 
we will be prepared to advise the SMC of our progress.
    7. Has the F13I taken any steps since the arrest and indictment of 
Mr. Hanssen to tighten internal security or is the agency waiting for 
you to complete your examination? If any steps have been taken, what 
are they?
    Steps that appear obvious have been taken and we have been kept 
informed. We have not asked that the FBI wait on us. Our 
recommendations can be considered even thougb changes have be= made. 
For example, the periodic polygraphing of some 500 special agents in 
sensitive positions has already been instituted. We hope to have some 
judgment ova the scope and frequency of this policy.
    8. It was reported last week that James Hill, a support employee of 
the FBI in Las Vegas was arrested for allegedly selling sensitive 
investigative information to organized crime. Will the scope of your 
review of internal security measures cover the many field offices of 
the FBI beyond headquarters here in Washington and the personnel 
security measures used not just to screen agents but also support 
staff?
    We feel free to examine security measures as applied in the field 
and for all employees.
    9. According to recent press reports, the FBI conducted polygraph 
examinations of approximately 500 employees in the wake of Robert 
Hanssen's arrest. The routine use of polygraphs for screening employees 
is a controversial issue, Indeed, this Committee held a hearing on that 
subject on April 25th of this year at which experts expressed a variety 
of opinions on the reliability of polygraph testing.
    a. As part of your review of internal security measures at the P13L 
are you looking at the usefulness of polygraph tests?
    Yes
    b. At the time you were FBI Director, did you use polygraphs in 
screening FBI employees with regard to security issues?
    No, but I believe it has deterrence and detection value, the need 
for which has now been demonstrated. When Director, I took a polygraph 
examination to access perceptions about its intrusiveness and 
reliability and consulted with experts. I also took a 
counterintelligence and life style examination at CIA.
    c. Under what circumstances did you as FBI Director use polygraphs 
to screen FBI agents as an internal security measure?
    d. You subsequently became Director of the CIA. Did the CIA have 
any different policy than the FBI?
    CIA utilized periodic vetting examinations. Its problem had to do 
with backlogging and quality plus some complaints about extended and 
occasionally heavy handed interviews. These problems can be addressed 
and I attempted to do so.
    e. What are your present views on polygraphs?
    The polygraph is still an art form that depends significantly on 
the skill of the examiner in recognizing inconsistencies and efforts to 
defeat it. But it is an important tool and needs to be improved.
    The FBI has been very skillful in using the polygraph for 
investigative purposes. It needs to maintain those sidlls in applying 
it to more numerous vetting procedures. Absolute reliance is dangerous. 
There should be other confirmatory information and evidence.
    In the area of counterintelligence, I think it can materially 
reduce the illegal activities of employees who cannot be 100 percent 
sure they can avoid detection. But it must not be seen as reflecting 
distrust--it is, rather, one of ``trust but verify''. Particularly 
those to whom our most important secrets are entrusted should fully 
understand and support its careful use.
    10. After the discovery violations in the Oklahoma City bombing 
case became public, Director Freeh testified before the House 
Appropriations Subcommittee on Commerce, Justice and State on May 16, 
2001. At that hearing, Director Freeh stated that he did not believe 
there should be an inspector General for the FBI. According to a recent 
issue of U.S. News & World Report, ``Freeh will reverse'' himself and 
support an ``independent inspector general as a watchdog over the 
bureau.'' (June 18, 2001 issue, p. 20). As a former FBI Director, what 
are your thoughts on the creation of such, a position?
    There have been problems with statutory inspectors general over the 
years. There have been important contributions, particularly in the 
auditing areas of their work. There is some blurring in the separation 
of powers arena that can cause problems. I prefer vesting as much self-
investigative responsibility as possible in the individual agencies. I 
do not think I favor a separate IG for the FBI. It makes more sense to 
allow the DOJ to continue; to function undez rules established by the 
AG, to whom the Director reports. However it proceeds, it must be kept 
out of politics. The Rule of Law is not political.
    I hope you find this information useful.

                                

                       SUBMISSIONS FOR THE RECORD

  Memorandum from Hon. John Ashcroft, Attorney General of the United 
                                 States

               Attorney General Memo Regarding FBI Review
    Attorney General John Ashcroft today sent the attached memorandum 
to Deputy Attorney General Larry Thompson regarding a comprehensive 
review of the Federal Bureau of Investigation.
    The Strategic Management Council referred to in the memorandum was 
created in May by the Attorney General to serve as the formal board 
within the Department of Justice to provide direction and leadership on 
long range planning and initiatives. The Council reinforces the 
linkages among the Department's Strategic Plan, Performance Plan and 
the budget process. Primary responsibilities of the Council include 
strategic policy and planning, resourse guidance and management, budget 
planning and decision-making, and performance planning, reporting and 
accountability. The Council reports tot he Attorney General.
    The Deputy Attorney General Chairs the Council and the other 
permanent members include:

        Associate Attorney General
        Assistant Attorney General for Administration
        Director of the Bureau of Prisons
        Director of the Federal Bureau of Investigation
        DEA Administrator
        INS Commissioner
        Chief of Staff to the Attorney General

                                

                             Office of the Attorney General
                                     Washington, D.C. 20530

               MEMORANDUM TO THE DEPUTY ATTORNEY GENERAL

      Comprehensive Review of the Federal Bureau of Investigation
    As you know, the mission of the FBI is to uphold the law through 
the investigation of violations of federal criminal law; to protect the 
United States from foreign intelligence and terrorist activities; to 
provide leadership and law enforcement assistance to federal, state, 
local, and international agencies; and to perform these 
responsibilities in a manner that is responsive to the needs of the 
public and is faithful to the Constitution of the United States. One 
core value that guides the pursuit of this mission is uncompromising 
personal and institutional integrity.
    In the spirit of enhancing the institutional integrity and 
performance of the Federal Bureau of Investigation (FBI), request that 
the Strategic Management Council of the Justice Department (SMC) 
undertake a comprehensive review of the Bureau, and by January 1, 2002, 
submit recommendations to me for reforms within the FBI. The members of 
the SMC--including the Deputy Attorney General, Associate Attorney 
General, Assistant Attorney General for Administration, Director of the 
Bureau of Prisons, Director of the FBI, DEA Administrator, INS 
Commissioner and the Chief of Staff to the Attorney General--should 
identify and recommend actions dedicated to improving and upgrading the 
performance of the FBI, assisting the incoming Director with the many 
challenges to be faced, and reinforcing the FBI's effectiveness as the 
premier law enforcement organization in the world. In order to assist 
the SMC in this important task, I have several additional requests.
    First, there are several ongoing reviews or investigations of the 
FBI, including the Webster review of the FBI's internal security 
procedures and the Department of Justice Inspector General's 
investigations of both the Hanssen and McVeigh matters. Please ensure 
that each of these reviews are submitted to the SMC on or before 
November 1, 2001, so they may inform the Council's recommendations.
    Second, I request that the SMC commission a management study of the 
FBI, by a private firm, to review policies and practices of the Bureau 
including information technology, personnel, crisis management and 
performance appraisal. The results of this study should be submitted to 
the SMC on or before November 1, 2001, so it may inform the Council's 
recommendations.
    Finally, the SMC should independently solicit input from other 
individuals and organizations, both internal and external, including 
Congress, who may have constructive ideas on reforming and improving 
the FBI.
    Should you need additional information on these requests, please 
contact David Ayres, Chief of Staff to the Attorney General. Thank you 
for your continued leadership.

                                

                                 U.S. Department of Justice
                            Federal Bureau of Investigation
                                       Washington, DC 20535
                                                      June 20, 2001

Mr. Norm Rabkin
Managing Director
Tax Administration and Justice Team
U. S. General Accounting Office
Washington, DC

    Dear Norm:

    Thank you for asking us to come over yesterday to discuss your 
testimony. It was helpful and, hopefully, constructive.
    After returning to Headquarters, I consulted with our Deputy 
Director, Tom Pickard, about the issues we discussed. We would like to 
take several steps immediately that should make your job easier.
    First, Laurie's suggestion to educate our senior management about 
GAO--how you function, how you safeguard documents, what you need from 
us, etc.--is an excellent one. Our Executive Conference meets nearly 
every morning at 8:30. We would like to have you and your staff make a 
presentation to us at your convenience.
    Second, I mentioned the enormous document production workload we 
have at Headquarters and how we have facilitated access to Congress in 
some cases by making the raw documents available here for review by 
staff. We are prepared to begin that approach immediately, recognizing 
that there will still be certain types of information we will want to 
protect, e.g., informant identities. Since GAO maintains office space 
at FBI Headquarters, implementation of this approach should be 
uncomplicated
    As an aside, over the last five years, the FBI has reviewed 9.2 
million pages of FBI records for release to parties in litigation, to 
the Inspector General and Special Counsel investigations of the FBI, 
and to Congress, including the GAO. The unit within the FBI responsible 
for document review and production has averaged approximately 40 
employees throughout this time frame. As we discussed yesterday, this 
is a tremendous workload and may have been the cause of some delay in 
your receipt of documents.
    In addition, we are inclined to adopt the Department of Justice 
approach to GAO liaison and facilitate direct interaction between our 
program managers and the GAO auditors following your initial approach 
to the FBI for a new audit.
    Laurie also raised a valid point about delays in returning phone 
calls, an issue for which I apologize. We will adopt her suggestion 
that if I or any other executive is unavailable, someone else will 
return the phone call the same day.
    Finally, we will review and revise our internal policy manuals 
accordingly but as I said during our meeting, regardless of the precise 
language, our liaison assumption with every audit is that GAO has the 
proper authority; that the FBI will cooperate, constrained only by 
available resources and certain disclosure concerns such as the 
identity of informants; and that we will provide access to both people 
and documents consistent with this philosophy. Any decision to the 
contrary is made based upon larger issues outside the bounds of the 
liaison function.
    Again, Norm, I appreciate the approach of both you and your staff 
on these issues and look forward to working with you to address your 
concerns.
            Sincerely Yours,

                                        John E. Collingwood
                                                 Assistant Director
                                               Office of Public and
                                              Congressional Affairs

                                

                                 U.S. Department of Justice
                            Federal Bureau of Investigation
                                     Washington. D.C. 20575
                                                    August 15, 2000

               MEMORANDUM TO ALL SPECIAL AGENTS IN CHARGE

     Re: Creation of a Single Disciplinary System for all Employees
    On March 5, 1997 (March 5, 1997, MEMORANDUM TO ALL SPECIAL AGENTS 
IN CHARGE, RE: STANDARDS OF CONDUCT: DISCIPLINARY MATTERS--REVISION OF 
THE FBI'S DISCIPLINARY PROCESS), I instituted reforms designed to 
improve the FBI's disciplinary system, merging the internal 
investigation and adjudication functions in a reorganized Office of 
Professional Responsibility (OPR) and creating new procedural 
protections and an independent appeals mechanism. Many previous 
concerns about the fairness of our disciplinary system have been 
corrected by these reforms. The statistical results show that the 
structural reorganization and process efficiencies have steadily 
improved OPR's effectiveness. The number of disciplinary inquiries and 
adjudications pending more than one year has fallen dramatically, from 
24 percent at the end of Fiscal Year 1997 to 8 percent at the end of 
Fiscal Year 1999. Continual improvements have been accomplished in 
consultation with our employee advisory groups, including the 
institution of in-person hearings in proposed dismissal cases and 
increased transparency through annual reports of disciplinary actions. 
. . (August 25, 1998, MEMORANDUM TO ALL SPECIAL AGENTS IN CHARGE, RE: 
ENHANCEMENTS TO THE FBI'S DISCIPLINARY PROCESS.)
    In the Memorandum of March 5, 1997, establishing new disciplinary 
procedures for the general Bureau population I directed that 
``Disciplinary procedures in the FBI's Senior Executive Service 
(SES).will conform as closely as feasible to these procedures.'' I have 
now determined that with the proven success of the revised 
'disciplinary process applicable to non-SES employees, the time has 
come to revise our SES disciplinary procedures to mirror those for all 
other employees.
    Criminal investigations and administrative inquiries for serious 
misconduct involving SES members have been subject to the procedural 
protections enjoyed by non-SES employees since their implementation in 
March 1997 and are conducted with the same impartiality and 
thoroughness as are cases involving non executives. However, the 
adjudication of administrative violations by the two categories of 
employees have involved different procedures. Allegations of serious 
miscondLict by non SES employees of the FBI are adjudicated by OPR 
based upon application of a precedent database containing all 
disciplinary decisions dating back to March 1997. Allegations of 
serious misconduct by senior executives are now being referred to an 
SES Board if the Deputy Director determines that the allegations appear 
to have been substantiated by the OPR inquiry. This Board makes a 
disciplinary recommendation based upon its appraisal of the facts and 
precedents, with particular reference to the relatively small number of 
prior SES disciplinary cases, some of which predate the strengthening 
of our disciplinary policies. The SES Board Chairperson then determines 
whether adverse action will be proposed against the senior executive, 
with the identity of the Deciding Official determined by the level of 
the SES member under inquiry. The determination of the Deciding 
Official is final, with no provision for appeal. This difference in 
adjudication procedures, with different deciding officials applying 
different precedent bases, permits a perception of a double standard 
which is neither warranted nor permissible, while at the same time 
denying SES members the appellate protection enjoyed by other 
employees.
    Certain governmentwide and Department of Justice regulations make 
it impossible for SES and non-SES cases to be adjudicated identically. 
By law and regulation, any suspension imposed or. an SES member must. 
be .for a minimum period of 15 days, so a decision-maker must choose 
between a letter of censure and a suspension of 15 days without :pay 
for conduct which might result in a three-day suspension for a non-SES 
employee. Moreover, the final decision on discipline of executives at 
the level of Assistant Director and above is legally reserved to the 
Department of Justice. Despite these differences, I have decided that 
the structures and procedures for processing of SES disciplinary 
matters should parallel those for non-SES employees, thereby maximizing 
consistency and removing any perception of a double standard.
    Effective immediately, all disciplinary actions, whether for senior 
executives or non-SES employees, will be governed by the procedures 
established by my March 5, 1997, and August 25, 1998, memoranda, 
insofar as not inconsistent with law or regulation. Criminal 
investigations and administrative inquiries for senior executives will 
continue to be investigated by OPR, as they are now. Adjudication of 
administrative inquiries involving senior executives will become the 
responsibility of OPR, just as it is for non-SES employees and will be 
based upon uniform application of the precedent cases decided since 
introduction of the new procedural protections in March 1997. The same 
standards for evaluating evidence will be consistently applied to all 
employees, with due regard for the increased responsibilities and 
obligations of a senior executive. The Deputy Assistant Director of OPR 
will be charged with proposing disciplinary action against SES members, 
with the Assistant Director of OPR serving as the Deciding Official, 
just as is now the case with GS-15 employees. SES members will now have 
access to the same Disciplinary Review Board (DRB) appeal from an 
adverse action provided for all other employees, with the Board members 
chosen in exactly the same manner provided in my March 5, 1997, 
Memorandum for all other employees.
    The decision of a DRB will be final for all employees except those 
executives for whom disciplinary actions must be decided at the 
Department of Justice. DRB decisions for those executives will be 
subject to review and correction by the Attorney General or Deputy 
Attorney General. To ensure complete equity for all employees and to 
define the mechanism by which I will implement my ultimate 
responsibility to oversee the personnel of the FBI, I will reserve a 
discretionary power to review and correct-disciplinary actions 
concerning all other employees. This power of correction, which may 
change a disciplinary determination in favor of or to the disadvantage 
of an employee, is not intended as an additional level of appeal and 
will not be exercised routinely. It is intended to be exercised on my 
irlitiative only in those rare and exceptional cases when I consider it 
necessary to correct an injustice or to prevent harm to the FBI.
    These revisions will help achieve our goal of giving all employees 
and the American public total confidence that the FBI's disciplinary 
system fairly and expeditiously identifies and punishes misconduct 
wherever it occurs within our organization and does so without fear or 
favor. To further this goal, OPR's future annual reports will include 
information on the number and type of SES disciplinary actions.
    Manual changes to follow.
                                             Louis J. Freeh
                                                           Director

                                

   Statement of Hon. Herbert Kohl, a U.S. Senator from the State of 
                               Wisconsin

    More than five years ago, we began the Ruby Ridge investigation in 
our Committee. I was honored to serve as the ranking member on that 
investigation with Senator Arlen Specter. And together in December 
1995, the Subcommittee issued a bipartisan, unanimous report containing 
a number of conclusions and recommendations.
    Now, so many years later, it is staggering to discover that the 
abuses, the mismanagement, and the poor judgment that marred the FBI 
during those tragic days in Idaho linger to this day. FBI agents who 
should have been scrutinized seem to have been sheltered. FBI agents 
who aggressively sought to uncover the truth within the agency believe 
they have been injured. The investigation process has been tortuous and 
protracted. Substantive reforms have been slow walked.
    The results are clear to see. The recent problems with document 
production in the McVeigh case were predictable to anyone who read the 
Ruby Ridge Report but knew that its recommendations had been ignored. 
The errors in the Hanssen case were almost inevitable at some point in 
an agency that has a culture of protecting itself from criticism.
    The Ruby Ridge investigation we conducted was even-handed and 
level-headed. We did it not to tear down the FBI but to build it up, to 
make it better. We suggested numerous procedural and substantive 
changes to help the FBI. Our goal was not to attack individual agents 
or to ruin careers. It was to improve the workings of the FBI to 
prevent future errors. However, today's witnesses and the documents 
that have been turned over to the Committee show just how entrenched 
the culture of defiance and sense of infallibility is within the FBI. 
It must be changed. The FBI must realize that it is not above the law, 
but rather that it is held to a higher standard.
    The vast majority of FBI agents already know this. Now it is up to 
the new director to see that institutional reforms are undertaken, that 
public trust in the agency is restored, and that past wrongs are 
remedied.

                                

 Statement of Professor Samuel Walker, Department of Criminal Justice, 
                    University of Nebraska at Omaha

                           Executive Summary
    ** Integrity and accountability in many law enforcement agencies 
are compromised by the socalled "code of silence" by which officers 
fail to report misconduct by other employees.
    ** The code of silence is perpetuated by a lack of rewards and 
protections for those officers might come forward to report misconduct.
    ** Existing whistle blower laws fail to provide adequate incentives 
and protections for potential whistle blowers.
    ** The proposal offered in this report involves the creation of a 
management information system that would document punitive retaliation 
for whistle blowing.
    ** The proposal offered here is based on Early Warning (EW) systems 
that are already in place in many local law enforcement agencies.
    ** The proposed system significantly shifts the burden of 
responsibility from individual officers to top management by 
establishing that protecting whistle blowers is a priority of the 
organization.
                              The Problem
    Achieving integrity and accountability in law enforcement agencies 
is seriously impeded by the existence of a so-called ``code of 
silence'' among officers.
    Police officers who have knowledge about misconduct by fellow 
officers often either passively refuse to come forward and report that 
misconduct or actively lie to investigators about the alleged events.
    At the heart of the code of silence is an officer subculture that 
places a higher value on group solidarity than on integrity and 
accountability.
    An important contributing factor to the code of silence is the 
absence of rewards and protections for the honest officers who do come 
forward and report misconduct.
                              The Evidence
    Evidence of the existence of the code of silence and a failure to 
reward and protect whistle blowing officers is widespread.
    ** In his pioneering study of the police subculture, William A. 
Westley found that officers were willing to lie to protect a fellow 
officer accused of misconduct.\1\
---------------------------------------------------------------------------
    \1\ William A. Westley, Violence and the Police (Cambridge, MA: MIT 
Press, 1970).
---------------------------------------------------------------------------
    ** Herman Goldstein, one of the leading authorities on American 
policing wrote in 1975 that ``There is no more formidable barrier to 
eliminating corruption than the blue curtain. . . .'' \2\
---------------------------------------------------------------------------
    \2\ Herman Goldstein, Police Corruption (Washington, DC: The Police 
Foundation, 1975), p. 30.
---------------------------------------------------------------------------
    ** The Christopher Commission report on the Los Angeles Police 
Department (1991) following the 1991 Rodney King beating concluded that 
``Perhaps the greatest single barrier to the effective investigation 
and adjudication of complaints is the officers's unwritten code of 
silence. . . .'' \3\
---------------------------------------------------------------------------
    \3\ Christopher Commission, Report, (Los Angles, 1991), p. xx.
---------------------------------------------------------------------------
    ** The Mollen Commission investigating corruption in the New York 
City police department concluded that ``The pervasiveness of the code 
of silence is itself alarming.''\4\
---------------------------------------------------------------------------
    \4\ Mollen Commission, Report (New York, 1994), p. 53,
---------------------------------------------------------------------------
    ** The code of silence frustrates the ability of external citizen 
oversight agencies to investigate citizen complaints about alleged 
police misconduct.\5\
---------------------------------------------------------------------------
    \5\ Samuel Walker, Police Accountability: The Role of Citizen 
Oversight (Belmont, CA: Wadsworth, 2001).
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                  Retaliation Against Whistle Blowers
    There is a general consensus among experts that police departments 
fail to reward and protect the good officers who are willing to report 
misconduct by fellow officers.
    Goldstein concluded that ``The honest officer who survives in an 
organizational atmosphere permeated by corruption is usual very 
lonely.'' \6\
---------------------------------------------------------------------------
    \6\ Goldstein, Police Corruption, p. 50.
---------------------------------------------------------------------------
    Corruption scandals such as the one involving NYPD officer Frank 
Serpico included apparent life-threatening retaliation.
    Forty-one Los Angeles police officers are currently suing the LAPD 
for punitive retaliation for their having reported misconduct.\7\
---------------------------------------------------------------------------
    \7\ Matt Lait and Scott Glover, ``LAPD Sued by Whistle-Blowers,'' 
The Los Angeles Times (August 25, 2000).
---------------------------------------------------------------------------
       Inadequate Protections for Law Enforcement Whistle Blowers
    There are no formal programs in existence today to protect law 
enforcement whistle blowers.
    Indeed, little specific attention has been given to remedies for 
the problem of the code of silence in law enforcement agencies. The 
problem of the code of silence receives only cursory mention in the 
leading police management texts.\8\
---------------------------------------------------------------------------
    \8\ James J. Fyfe, et al., Police Administration, 5 th 
Ed. (New York: McGraw-Hill, 1997), pp. 451, 467.
---------------------------------------------------------------------------
    A Five-year follow-up report on the Christopher Commission found 
that the LAPD had taken few steps to address the problem of the code of 
silence.\9\ The code of silence is not mentioned in a massive LAPD 
report on the Rampart scandal, and there is only one cursory reference 
to the failure of officers to report misconduct by other officers.\10\
---------------------------------------------------------------------------
    \9\ Merrick Bobb, et al., Five Years Later: A Report to the Los 
Angeles Police Commission )Los Angeles: Los Angeles Police Commisison, 
1996), pp. 46-47.
    \10\ Los Angeles Police Department, Board of Inquiry Report into 
the Rampart Area Corruption Incident (Los Angeles: LAPD, Mary 2000).
---------------------------------------------------------------------------
    Katherine Mader, the first Inspector General for the LAPD, 
initiated a pioneering investigation of the code of silence.\11\ Ms. 
Mader, however, resigned in protest in late 1998 over a lack of 
cooperation from the LAPD and the LA Police Commission. The current 
status of her initial investigation is not known at this time.
---------------------------------------------------------------------------
    \11\ Office of the Inspector General, Six-Month Report (Los 
Angeles: Los Angeles Police Commission, January 1997), pp. 41-42, and 
Appendix J.
---------------------------------------------------------------------------
    Investigations of police misconduct typically deplore the existence 
of the code of silence but generally provide no specific suggestions 
for ways to either break the code or reward whistle blowers.
                 Legal Protections for Whistle Blowers
    Over the past twenty-five years there has been a growing 
recognition of the need to provide protection for whistle blowers in 
both government agencies and private organizations.\12\
---------------------------------------------------------------------------
    \12\ Terance D. Miethe, Whistleblowing at Work (Boulder: Westview 
Press, 1999). Alan F. Westin, ed., Whistle Blowing! Loyalty and Dissent 
in the Corporation (New York: McGraw-Hill, 1981)
---------------------------------------------------------------------------
    As a consequence a variety of whistle blower protection laws exist 
at the federal level and in all 50 states.\13\
---------------------------------------------------------------------------
    \13\ Elleta Sangrey Callahan and Terry Morehead Dworkin, ``The 
State of State Whistleblower Protection,'' American Business Law 
Journal, V. 38 (Fall 2000): 99
---------------------------------------------------------------------------
    A number of highly publicized cases have created an image of the 
whistle blower as a hero: the lonely, conscience-stricken individual 
who takes a courageous stand at great personal and professional 
sacrifice (e.g., the tobacco industry official portrayed in the film 
The Insider).
    The social science literature on whistle blowing and the effect of 
whistle blower protection laws is not encouraging. The personal costs 
of whistle blowing are extremely high. There is a deeply-rooted bias 
against ``snitches'' in American culture. The individual whistle blower 
runs a high risk of alienating colleagues, losing friends, and 
jeopardizing his or her career. It is often very difficult to prove an 
allegation of organizational misconduct or retaliation for whistle 
blowing.\14\
---------------------------------------------------------------------------
    \14\ Miethe, Whistle Blowing at Work,
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        A Program for Protecting Law Enforcement Whistle Blowers
                              introduction
    The following proposal outlines a program for identifying 
retaliation against whistle blowers in law enforcement agencies.
    The program is a application of Early Warning (EW) systems, a 
concept that has emerged in recent years as an important strategy for 
identifying ``problem'' police officers. A recent (January 2001) report 
by the U.S. Justice Department, Principles for Promoting Police 
Integrity, recommended EW systems as a best practice.\15\
---------------------------------------------------------------------------
    \15\ U.S. Department of Justice, Principles for Promoting Police 
Integrity (Washington, DC: Department of Justice, January 2001).
---------------------------------------------------------------------------
    The major contribution of this proposal is that it substantially 
shifts the burden of responsibility from the individual to the 
management of the organization by establishing a formal program to 
protect whistle blowers and, by doing so, communicating a message that 
the organization encourages the reporting of misconduct.
                         early warning systems
    Early Warning (EW) systems are data-based management tools for 
identifying ``problem'' police officers and for providing appropriate 
intervention to correct the performance of such officers.\16\
---------------------------------------------------------------------------
    \16\ Samuel Walker, Geoffrey P. Alpert, and Dennis J. Kenney, 
``Early Warning Systems for Police: Concept, History, Issues,'' Police 
Quarterly, 3 (June 2000): 132-152. Samuel Walker and Geoffrey P. 
Alpert, ``Police Accountability: Establishing An Early Warning 
System,'' International City Management Association, IQ Service Report, 
32 (August 2000).
---------------------------------------------------------------------------
    EW systems utilize official performance data such as use of force 
reports, citizen complaints, involvement in civil litigation, late for 
duty, or other problematic behavior.
    Performance data are systematically collected, entered into a data 
base, and analyzed for the purpose of identifying those officers who 
have disproportionate levels of problematic behavior (e.g., 
significantly more citizen complaints than other officers).
    Officers identified by the EW system are then provided counseling 
or training designed to correct their performance problems.
                          impact of ew systems
    EW systems have several impacts.\17\ The first is on individual 
officers who are put on notice that their performance is sub-standard 
and who receive some form of corrective intervention.
---------------------------------------------------------------------------
    \17\ Walker and Alpert, ``Police Accountability: Establishing an 
Early Warning System,'' 3-5.
---------------------------------------------------------------------------
    The second is on first-line supervisors who are given specific new 
responsibilities for addressing problematic performance of officers 
under their command.
    The third is on the agency as a whole to the extent that the EW 
system clearly defines threshold levels of unacceptable performance and 
communicates to all personnel that unacceptable behavior will receive 
prompt and specific attention. In this respect, an EW system has the 
potential for transforming the culture of an organization. Along these 
lines, a whistle blower-oriented EW system communicates a message to 
all employees that misconduct will not be tolerated and that the 
reporting of misconduct is encouraged.
              application of ew systems to whistle blowing
    EW systems may be applied to whistle blowing by, in effect, turning 
the concept on its head. Instead of identifying ``problem'' officers it 
becomes a system for identifying and protecting good officers.\18\
---------------------------------------------------------------------------
    \18\ For a related proposal that applies Early Warning systems to 
the issue of racial profiling, see Samuel Walker, ``Searching for the 
Denominator: Problems with Police Traffic Stop Data and an Early 
Warning System Solution,'' Journal of Research and Policy, 3 (Spring 
2001): 63-95.
---------------------------------------------------------------------------
    The application assumes that an EW system includes a comprehensive 
set of performance data, including positive indicators. Regular 
performance evaluations and career path information need to be included 
in the data base.\19\
---------------------------------------------------------------------------
    \19\ A potential problem with implementing the original concept of 
EW systems is that some -and possibly many- law enforcement agencies do 
not currently have either an adequate system of performance reports or 
the necessary technological infrastructure.
---------------------------------------------------------------------------
    The concept is applied in the following manner.
    ** Assume that an officer claims punitive retaliation for having 
reported some official misconduct.
    ** The performance data in the EW system data base would help 
identify any significant changes in that officer's career path that 
suggest retaliation.

        These might include:

         A sudden change in performance evaluations following 
        misconduct reporting incident.
         Reassignment from a preferred position within the 
        agency to one that has low-status.
         Career path stagflation as indicated by a failure to 
        obtain requested assignments in a pattern that deviates 
        significantly from prior career path history.

    ** The data would also protect against an employee with a poor 
performance record raising a false claim of retaliation in an effort to 
legitimate disciplinary action. For example:

         The data base would reveal a history of performance 
        problems prior to the alleged misconduct reporting incident.
                     issues and potential problems
    The proposed whistle blower protection program requires 
considerable investment of organizational resources with respect to 
data management. Nonetheless, experts on policing argue that an EW 
system is a wise and necessary investment for the purpose of achieving 
integrity and accountability. Thus, the whistle blower aspect involves 
no more investment of resources than is otherwise advisable.
    The data in the system would not automatically prove or disprove 
any claim of retaliation. Nonetheless, in a case of actual retaliation 
they would provide strong evidence to support the aggrieved officer.
    Most important, the program would serve to deter retaliation by 
communicating a message to employees about the organization's values.
    The proposed program is no cure-all. It is simply a management 
information system that can be used wisely or not at all. The 
effectiveness of the program depends entirely on a commitment to 
integrity and accountability on the part of top management.
                               Conclusion
    The so-called code of silence is a major impediment to achieving 
integrity and accountability in law enforcement agencies.
    Effective rewards and protections do not exist for officers who 
report misconduct.
    An Early Warning system-based program can provide performance data 
that would provide significant protection against retaliation for law 
enforcement whistle blowers.
    Early Warning systems are recommended as a best practice for 
promoting integrity and accountability and should be adopted 
independent of any consideration of whistle blowing.
    An Early Warning system-based program for protecting whistle 
blowers represents a proactive stance by a law enforcement 
organization, sending a clear message that reporting misconduct is 
encouraged and will be protected.

                                

      FBI Director Louis J. Freeh Major Accomplishments, 1993-2001

                  Law Enforcement Ethics and Fairness
    Core Values: Maintained and re-emphasized five core values for the 
men and women of the FBI, including: rigorous obedience to the United 
States Constitution; respect for the dignity of all those we protect; 
compassion: fairness; and uncompromising personal and institutional 
integrity.
    Bright Lines: In January 1994, set forth ``bright lines'' that 
outline standards of professional and personal conduct for all FBI 
employees. Bright lines were later developed concerning sexual 
harassment and alcohol abuse.
    New Employment/Applicant Guidelines: In 1994, established new 
guidelines covering all FBI employees and applicants, including 
stronger penalties for misconduct, new drug-use polygraph examinations 
for all job applicants, and procedures to prevent bias based on sexual 
orientation.
                        Law Enforcement Ethics:
    In 1996, established new Office of Law Enforcement Ethics (later 
renamed the Law Enforcement Ethics Unit) to administer a new 
interdisciplinary ethics in law enforcement program.
    As part of this effort, ethics training for new Special Agents was 
significantly enhanced. This training was originally a two-hour block 
at the end of the new Agent training. Since 1996, it has encompassed 16 
hours of classroom instruction at the beginning of the 16-week training 
program. Since 1996, more than 3,300 new Special Agents have received 
the enhanced ethics training.
    To underscore how the awesome powers of law enforcement can be 
misused, initiated guided tours of the Holocaust Museum in Washington, 
D.C., in May 2000 for new Special Agents and students of the FBI 
National Academy.
    Since April 1995, trained 1,357 foreign police officers in law 
enforcement ethics and human rights during an 8-week management course; 
hundreds more have received specialized training in ethics, public 
corruption, internal controls, etc.
                 Office of Professional Responsibility:
    In March 1997, established an enhanced, independent Office of 
Professional Responsibility (OPR) headed by an Assistant Director. OPR 
investigates allegations of employee misconduct in a fair and timely 
fashion and provides appropriate sanctions against those who break FBI 
regulations. OPR also assumed responsibility for FBI ethics training.
    In 1998, the FBI began releasing annual reports on disciplinary 
actions taken by OPR to the news media for nationwide distribution.
                  FBI Leadership in National Security
    New Resources: With the support of Congress, put in place key new 
resources and programs to bolster the FBI's ability to counter growing 
national security threats:
    In In 1998, under order of the President, created a National 
Infrastructure Protection Center (NIPC), an interagency center of 
computer expertise that works to protect the nation's critical 
electronic infrastructures through high-techinvestigations, warnings to 
public and private entities, and training programs.
    In November 1998, opened a new Strategic Information Operations 
Center (SIOC) at FBI Headquarters. SIOC is a 2417 operation that 
provides a centralized, high-tech capability to manage multiple crisis 
situations.
    Established Rapid Deployment Teams in 1998 to enable teams of FBI 
experts, investigators, medical personnel, and others to respond 
quickly and effectively to terrorist incidents and special situations 
in foreign or remote locations.
    In 1999, created a new Counterterrorism Division, an inter-agency 
effort that gathers, coordinates, and shares intelligence information 
with FBI field offices and government agency representatives. An 
Investigative Services Division was created at the same time to enhance 
the FBI's intelligence capacities and to serve as a center for 
intelligence analysis.
    Established a Weapons of Mass Destruction (WMD) Operations Unit to 
conduct real-time credibility assessments of WMD threats, enabling 
incidents to be resolved with greater certainty, speed, and safety than 
ever before.
    Opened the National Domestic Preparedness Office (NDPO) in October 
1998 to help coordinate federal/state/local response to WMD incidents 
and threats.
    Key Investigations: In concert with the law enforcement community, 
successfully investigated and resolved major acts of domestic/
international terrorism, including:

        Bombing of the World Trade Center in New York City in February 
        1993
        Bombing of the Alfred P. Murrah Federal Building in Oklahoma 
        City in  April 1995
        Serial bombings of Theodore Kaczynski, who was arrested in 
        April 1996
        Deadly assault on CIA employees by Mir Aimal Kasi, captured 
        overseas in  1997
        Bombing of two U.S. Embassies in East Africa in August 1998

    Preventions: Prevented more than 40 potential acts of terrorism 
from October 1993 to October 1999, including plans to blow up two large 
propane gas tanks near Sacramento, California, which could have 
resulted in more than 12,000 deaths.
    Economic Espionage Act: Worked diligently with Congress to support 
the drafting and passage of the Economic Espionage Act of 1996, which 
makes the state sponsored and commercial theft of trade secrets a 
federal felony for the first time.
    CI-21: Supported the creation of a CI-21 (Counterintelligence for 
the 21 st Century) board to improve the national counter-intelligence 
organization and capability of the U.S. Appointed first 
Counterintelligence Executive in March 2001.
             Tools and Resources to Support Investigations
    Budget: Working with Congress, increased the FBI budget by more 
than $1.27 billion to the 2001 Budget Appropriation level of $3.44 
billion.
    Strategic Plan: In 1998, developed and published a three-tier 
Strategic Plan to guide FBI decision-making and resource allocation.
Legal Attaches.
    Recognizing Recognizing the need to respond to changes in the 
global criminal environmentbrought on by the end of the Cold War, the 
advent of globalization, and the development of sophisticated 
communications technology, more than doubled the international presence 
of the FBI. The number of overseas offices, or Legal Attaches, has 
increased from 21 in September 1993 to 44 today.
    The staffing at Legal Attaches has grown from 107 Special Agents 
and support staff in October 1993 to 172 total employees today.
Laboratory:
    Instituted a series of important changes in the organizational 
structure of the FBI Laboratory to improve effectiveness and strengthen 
management of programs, including the appointment of an internationally 
recognized scientist as an FBI Assistant Director of the Laboratory.
    In 1998, achieved the formal accreditation of the American Society 
of Crime Laboratory Directors/Laboratory Accreditation Board.
    DNA innovations:

         Introduced a national DNA indexing system that enables 
        forensic laboratories throughout the country to exchange and 
        compare DNA profiles electronically, thereby linking unsolved 
        crimes to each other and to known sex offenders.
         Became the first laboratory in the nation to implement 
        Mitochondrial DNA (mtDNA) analysis and to use DNA profiles to 
        identify positively a specific individual as the source of a 
        stain.
    Worked with Congress in the passage of the Communications 
Assistance for Law Enforcement Act (CALEA) of 1994, which clarifies and 
further defines telecommunications carriers' statutory obligation to 
assist law enforcement in executing electronic surveillance. The FBI's 
CALEA Implementation Section was transferred to the Laboratory in June 
2000.
    Developed an automated computer technology system that can make 
otherwise unidentified links between firearms-related evidence. This 
system, renamed the National Integrated Ballistic Information Network 
following its merger with a similar ATF system, assists law enforcement 
agencies in fighting violent crime.
    In 1997, developed mobile, modular laboratories that can be 
deployed by air, ground, or sea to conduct on-site forensic analyses 
and examinations in a wide spectrum of environments.
    Developed a forensic capability known as the World Forensic 
Automated Counterterrorism System (World FACTS) that shares information 
on evidence interrorist incidents with other forensic laboratories.
    Created Evidence Response Teams (ERTs) in FBI field offices. ERTs 
are well trained, high-equipped personnel that specialize in organizing 
and conducting major evidence recovery operations and have made major 
contributions in keyinvestigations, including the Oklahoma City and 
U.S. Embassy bombings.
    In June 2000, established the Indian Country Evidence Task Force 
composed of Laboratory experts in the field of DNA, firearms, latent 
prints, and trace evidence. The task force provides dedicated service 
to Indian Country cases and addresses the need for timely support and 
training.
Technology, Tools, and Information:
    In 1999, instituted the Integrated Automated Fingerprint 
Identification System (IAFIS). IAFIS replaced the laborious manual 
system of checking fingerprints with a high-speed, computerized system 
that accepts fingerprint submissions from law enforcement 
electronically and responds within hours instead of days.
    Unveiled a modernized National Crime Information Center 2000 (NCIC 
2000) in 1999. NCIC 2000 is a national computer index of documented 
crime and criminals that serves the law enforcement community. Today, 
the new system averages more than 2 million transactions a day, 
compared to 2 million a year when the original system was established 
in 1967.
    In 1995, established a dedicated Intranet network called LEO for 
all law enforcement to facilitate communication, information-sharing, 
and training. Initiated the Technology Assisted Search Program that 
employs archeological methodology and remote-sensing geophysical 
equipment to locate forensic evidence buried underground or concealed 
in buildings or other structures.
    Under a provision of the Brady Act, created the National Instant 
Check System in 1998 to process background checks on prospective 
firearm purchasers.
    Recognizing changing technology and the needs and abilities of FBI 
Agents, began issuing a laptop computer to each new Special Agent.
Critical Incident Response Group:
    In the aftermath of the Branch Davidian Case in Waco, Texas, 
created a Critical Incident Response Group (CIRG) in 1994 to 
successfully integrate the tactical and investigative expertise of the 
FBI into one organization to address terrorist activities, hostage 
taking, barricaded subjects, and other crisis situations that 
necessitate immediate law enforcement response.
                     Protecting the American People
Violent Crime:
    Enhanced the Safe Streets Task Forces concept, which includes teams 
of federal, state, and local law enforcement officers and prosecutors 
who work together to combat crimes of vlolence and gangs. The number of 
Safe Streets Task Forces has increased from 12 in 1992 to 175 today.
    In September 2000, issued ``The School Shooter,'' a report on a 
two-year behavioral analysis of recent school shooting incidents.
Organized Crime/Drug Trafficking
    Achieved major successes against the largest traditional crime 
groups in the nation, including major take downs of La Cosa Nostra 
(LCN) Families in New York City, Los Angeles, Philadelphia, Detroit, 
Miami, and other cities.
    Launched Operation Button Down, a five-year initiative designed to 
provide a long-term, sustained, and coordinated attack against the LCN. 
The recently ended initiative resulted in the indictment and conviction 
of more than 1,500 LCN members and associates.
    Launched successful investigations to disrupt organized crime 
groups with ties to Mexico, Europe, Russia and Eastern Europe, Asia, 
South America, Africa, and the Middle East.
    In 2000, established the ``Budapest Project,'' a task force with 
the Hungarian National Police that targets Russian/Eurasian criminal 
enterprises. To date, seven individuals have been arrested, including a 
top ten fugitive of the HNP.
    In 1994, established the Southwest Border Project with the DEA to 
focus investigative resources to disrupt and dismantle activities of 
significant Mexican drug trafficking organizations operating in the 
nation's southwest border region.
    Established the National Alien Smuggling Initiative to coordinate 
national law enforcement agencies and the intelligence community to 
combat international alien smuggling organizations.
Cyber Crime:
    Opened the National Infrastructure Protection Center in 1998 to 
prevent and respond to cyber attacks on critical infrastructures (see 
page 2 for more info.).
    In May 2000, established an Internet Fraud Complaint Center in 
partnership with the National White Collar Crime Center. The center 
provides a central repository for complaints and tracks and analyzes 
trends in cyber crime. To date, it has received nearly 40,000 
complaints from victims in more than 100 countries.
    Enhanced the FBI's Computer Analysis and Response Team (CART) 
comprised of computer specialists and a network of trained and equipped 
forensic examiners assigned to select FBI field divisions. CART 
performs thousands of examinations of computer evidence each year and 
provides technical support for the investigation and prosecution of 
cases involving such evidence.
    In cooperation with the U.S. Attorney's Office and federal, state, 
and local law enforcement agencies, established the Regional Computer 
Forensics Laboratory (RCFL) in San Diego, California, to acquire, 
archive, and analyze digital evidence in support of criminal 
investigations. The RCFL will serve as the prototype for new regional 
laboratories being established across the nation.
    In 1995, established the Innocent Images initiative to target 
individuals using the Internet to lure minors into illicit sexual 
relationships and to receive and distribute child pornography, To date, 
the program has resulted in the arrest and conviction of more 800 
individuals.
Health Care Fraud:
    Worked with Congress to draft the Health Insurance Portability and 
Accountability Act of 1996, which provides greatly enhanced funding in 
the fight against health care fraud, which costs American taxpayers an 
estimated $100 billion a year.
    Established Health Care Fraud Task Forces in various field offices 
to coordinate investigations with local, state, and federal agencies.
    Launched the largest and most complex health care fraud 
investigation undertaken by the federal government. In December 2000, 
the Columbia/Health Care Corporation of America agreed to pay a $95 
million fine for health care fraud, laboratory fraud, overbilling 
schemes, and kickback violations. It also agreed to pay an additional 
$745 million civil settlement.
Crimes Against Children:
    In 1995, established the Innocent Images initiative (see page 5).
    In 1997, set up a program that designates at least two Special 
Agents in each FBI Field Office to concentrate solely on crimes against 
children.
    Assigned a Special Agent full-time to the National Center for 
Missing and Exploited Children.
    Developed and published A Parent's Guide to the Internet.
Civil Rights:
    In 1997, formed a new Hate Crimes Unit at FBI Headquarters.
    Began active participation in the National Church Arson Task Force 
and national and local Hate Crime Working Groups.
Top Ten Fugitives:
    Since 1993, a total of 27 "Top Ten" fugitives have been captured. 
The latest capture was James Charles Kopp, who was wanted in connection 
with the shooting death of Dr. Barnett Slepian and was arrested in 
France on March 29.
                        Improving Relationships
Domestic Law Enforcement
    Strengthened cooperation and liaison with individual agencies and 
national organizations, including the International Association of 
Chiefs of Police, the National Sheriffs' Association, the National 
Organization of Black Law Enforcement Executives, the National District 
Attorneys Association, and the National Association of Attorneys 
General.
    Increased the number of Joint Terrorism Task Forces to 30, 
significantly enhancing the FBI's ability to work with federal, state, 
and local partners in fighting domestic and international terrorist 
attacks.
    Work closely with federal, state, and local law enforcement 
officers and prosecutors in 175 Safe Streets Task Forces (see page 5 
for more information).
CIA Partnership:
    Significantly strengthened the FBI's partnership with the CIA, 
making it the most productive in the history of the two agencies.
    Includes exchange high-level officials and close cooperation on 
sensitive national concerns such as counterterrorism and 
counterespionage.
    The new, stronger ties have enabled the two agencies to uncover 
government spies like Aldrich Ames, Harold Nicholson, Earl Pitts, and 
Robert Hanssen.
Law Enforcement Training:
    Through a variety of training programs, the FBI has developed 
excellent contacts with domestic and foreign officers and fostered 
relationships which have greatly increased cooperative investigations 
across the country and around the world.
    Since September 1993, provided a comprehensive 11-week management 
training course at the FBI National Academy to 8,110 state, local, and 
foreign police leaders from all 50 states and 118 nations around the 
world.
    Through the FBI Field Police Training program, trained 836,189 
local and state police at the field level from October 1993 to October 
2000.
    In April 1995, opened an International Law Enforcement Academy 
(ILEA) in Budapest, Hungary, to train foreign police officers from the 
former Soviet Union and Eastern Europe in policing under the Rule of 
Law. Since its inception, a total of 1,357 foreign officers have 
graduated from ILEA's 8-week management course and another 5,015 
students have taken various specialty courses.
    Since 1994, have trained more than 50,000 foreign police officers 
from 150 countries around the world.
International Outreach:
    Since taking office, the Director has traveled to 68 foreign 
countries and met with over 2,100 foreign leaders.
    The expansion of the Legal Attache program has enhanced 
partnerships overseas that have proven invaluable in the fight against 
terrorism, organized crime, cyber crimes, and transnational crimes in 
the information age.
    At the request of foreign governments, assisted numerous 
investigations in other countries. In 1999, the FBI sent teams of 
expert criminal investigators and forensic specialists to examine 
suspected massacre sites in Kosovo. The team presented its evidence to 
the U.N. International Criminal Tribunal.
Public Outreach:
    Created a public Internet home page for the FBI, which is accessed 
by more than a million visitors each month. The web page has been used 
not only to inform the public but to generate leads that help capture 
wanted fugitives.
                     Support/Concern for Employees
    Overall Hiring: With the support of Congress, hired 5,029 new 
Special Agents and more than 4,000 technical and professional employees 
since September 1993.
    Reorganization: In October 1993, announced major reorganization to 
streamline operations at FBI Headquarters and improve efficiency.
Diversity within the FBI:
    Made dramatic strides in increasing the representation of 
minorities and women in the FBI. Since September 1993, the FBI has 
hired more than 8,000 women and minority Special Agents and support 
personnel, 56% of the total new hires.
    In October 1993, appointed the first woman, first Hispanic, and 
second African American to serve as an Assistant Director, the second 
highest rank in the FBI.
    Over the course of his tenure, the Director has appointed three 
African-American men, four Hispanic men, one African-American woman, 
and one White woman as Assistant Directors.
    Developed and implemented the National Special Agent Recruitment 
Plan to ensure that the FBI effectively recruits and hires qualified 
applicants from all segments of society.

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