[Senate Hearing 108-158]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-158

DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004
=======================================================================

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   on

                           H.R. 2799/S. 1585

AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF COMMERCE, JUSTICE, 
  AND STATE, THE JUDICIARY, AND RELATED AGENCIES FOR THE FISCAL YEAR 
           ENDING SEPTEMBER 30, 2004, AND FOR OTHER PURPOSES

                               __________

                         Department of Commerce
                         Department of Justice
                          Department of State
                       Nondepartmental Witnesses
                   Securities and Exchange Commission
                             The Judiciary

                               __________

         Printed for the use of the Committee on Appropriations

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                                 senate

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                      COMMITTEE ON APPROPRIATIONS

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

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

                  JUDD GREGG, New Hampshire, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
PETE V. DOMENICI, New Mexico         DANIEL K. INOUYE, Hawaii
MITCH McCONNELL, Kentucky            BARBARA A. MIKULSKI, Maryland
KAY BAILEY HUTCHISON, Texas          PATRICK J. LEAHY, Vermont
BEN NIGHTHORSE CAMPBELL, Colorado    HERB KOHL, Wisconsin
SAM BROWNBACK, Kansas                PATTY MURRAY, Washington
                                     ROBERT C. BYRD, West Virginia
                                       (ex officio)
                           Professional Staff
                             Kevin Linskey
                          Katherine Hennessey
                             Dennis Balkham
                           Jill Shapiro Long
                         Lila Helms (Minority)
                        Kate Eltrich (Minority)
                        Chad Schulken (Minority)

                         Administrative Support

                            Jessica Roberts











                            C O N T E N T S

                              ----------                              

                        Thursday, March 6, 2003

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

                        Thursday, March 20, 2003

Department of Commerce: Office of the Secretary..................    49

                         Tuesday, April 1, 2003

Department of Justice: Office of the Attorney General............   103

                         Tuesday, April 8, 2003

Securities and Exchange Commission...............................   205

                        Thursday, April 10, 2003

Department of Justice: Federal Bureau of Investigation...........   223
Departmental Witnesses: The Judiciary............................   251
Nondepartmental Witnesses........................................   279












 
DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              


                        THURSDAY, MARCH 6, 2003

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:58 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg, Stevens, Hollings, Leahy, and 
Kohl.

                          DEPARTMENT OF STATE

                        Office of the Secretary

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


                opening statement of senator judd gregg


    Senator Gregg. Let me begin by thanking Secretary Powell 
for taking the time to appear before the Subcommittee on 
Commerce, State, Justice of the Appropriations Committee, which 
has the jurisdiction over the State Department appropriations. 
I offered the Secretary the opportunity of taking a pass on 
this hearing, given the situation in which we find ourselves 
right now relative to diplomatic activity. But he was still 
generous enough to be willing to take some time to come up 
here, which I do greatly appreciate. And I know Senator 
Hollings also appreciates his commitment to the process, the 
appropriations process.
    We have said to the Secretary that we will get him out of 
here on a prompt time frame, certainly no later than 11:30, 
hopefully even earlier. So we are going to forego opening 
statements on our part, turn to the Secretary and have his 
opening statement. And we do have a vote at 10:30. So we may 
stagger the questioning here. But then we will go to questions.
    Mr. Secretary.


                 OPENING STATEMENT OF SECRETARY POWELL


    Secretary Powell. Well, thank you very much, Mr. Chairman. 
It is a great pleasure to be back before the committee. I do 
thank you, also, for giving me a hall pass, if I had needed one 
today. It is a busy time for us in the diplomatic community. I 
will be heading up to New York this afternoon to work with my 
colleagues at the United Nations. But I really did want to be 
here because it is also an important part of my job to make 
sure that I present to the Congress our budget request and then 
appear to testify for that budget request, because the quality 
of our diplomacy depends on whether or not we get the support 
we need for the wonderful men and women of the State Department 
and for the facilities and other items that we need to make 
sure we can do our job in the most effective way.
    I do have a prepared statement for the record, which I 
would offer, Mr. Chairman. And I would summarize that very 
briefly.
    Senator Gregg. That will be put in the record.
    Secretary Powell. I am pleased to appear before you to 
testify in support of the President's International Affairs 
Budget for fiscal year 2004. The funding request for 2004 for 
the Department of State, USAID, and other foreign affairs 
agencies is, overall, $28.5 billion. I have given you a great 
deal of detail on this request in my written statement. And I 
hope you will find it useful, as you go through your 
deliberations.
    The President's budget will allow the United States to 
target security and economic assistance to sustain key 
countries supporting us in the war on terrorism and helping us 
to stem the proliferation of weapons of mass destruction. The 
budget will help us launch the Millennium Challenge Account, a 
new partnership generating support that will go to countries 
that rule justly, invest in their people, and encourage 
economic freedom.
    It will also strengthen the United States and global 
commitment to fighting HIV/AIDS and alleviating human 
hardships. It will allow us to combat illegal drugs in the 
Andean Region of South America, as well as bolster democracy in 
one of that region's most important countries, Colombia.
    Finally, it will reinforce America's world-class diplomatic 
force, focusing on the people, places, and tools needed to 
promote our foreign policies around the world.
    I am particularly proud of that last goal, Mr. Chairman, 
because, as you know, for the past 2 years I have concentrated 
on each aspect of my responsibilities, as foreign policy 
advisor to the President and Chairman and CEO of the Department 
of State. What you need in a large organization is to have the 
very best people come in and, once they are in, to take care of 
them.
    So we are asking for your full support of our Diplomatic 
Readiness Initiative. For 2 years, we have been hiring for the 
first time in years. We will hire, with this budget request, 
399 more professionals to help the President carry out the 
Nation's foreign policy. This hiring will bring us to the 
1,100-plus new Foreign and Civil Service officers we set out to 
hire when I first came into the job 2-plus years ago.
    I thank this committee and I thank the Congress for the 
support that it has provided, not only for our Diplomatic 
Readiness Initiative, but also for our overall operating 
accounts over the last several years.
    Second, I promised to bring state-of-the-art communications 
capability to the Department, because people who cannot 
communicate rapidly and effectively in today's globalizing 
world cannot carry out our foreign policy. We are doing very 
well in that regard in both unclassified and classified 
communications capability, including desktop access to the 
Internet for every man and woman in the Department. We are 
moving rapidly. We are almost there. The $157 million budget 
request before you will put us there.
    Finally, with respect to my CEO role, I wanted to sweep the 
slate clean and completely revamp the way we construct our 
Embassies and other overseas buildings, as well as improve on 
the manner in which we secure our men and women who occupy 
those facilities. That last task is a long-term, almost never-
ending one, particularly in this time of heightened terrorist 
activities. But we are well on the way to implementing both the 
construction and security tasks in a better way, in a less 
expensive way, and in a way that subsequent CEOs of the 
Department can continue and improve upon.
    I am very happy at the work we have done in Embassy 
construction and security over the past few years under the 
leadership of General Williams, who you all have come to know. 
I need your continued support for the $1.5 billion for Embassy 
security and construction and the $646 million in D&CP funding 
for worldwide security upgrades.
    Mr. Chairman, as the principal foreign policy advisor to 
the President, I have budget priorities on that side of my 
portfolio, as well. So let me highlight a few of our key 
foreign policy priorities before I stop and take your 
questions.
    I might note that one of the successes of our foreign 
policy was the Moscow Treaty, which reduced significantly the 
number of strategic offensive weapons held by the United States 
and the Russian Federation. That treaty is now on the Senate 
floor. I hope that it will be acted on promptly. I encourage 
your support for this treaty. With a little bit of luck and 
with my fingers crossed, it might even be voted on today, when 
remaining amendments, proposed amendments, have been dealt 
with.
    The fiscal year 2004 budget proposes several initiatives to 
advance U.S. national security interests and preserve American 
leadership. The fiscal year 2004 Foreign Operations budget that 
funds programs for the Department of State, USAID, and other 
foreign agencies is $18.8 billion. Today, our number one 
priority is to fight and win the global war on terrorism. The 
budget furthers this goal by providing economic, military, and 
democracy assistance to key foreign partners and allies, 
including $4.7 billion to those countries that have joined us 
in the war on terrorism.
    Of this amount, the President's budget provides $657 
million for Afghanistan, $460 million for Jordan, $395 million 
for Pakistan, $255 million for Turkey, $136 million for 
Indonesia, and $87 million for the Philippines. In Afghanistan, 
the funding will be used to fulfill our commitment to rebuild 
Afghanistan's road network. In addition, it will help establish 
security in the country through the creation of a national 
military, as well as a national police force. Our assistance 
will establish broad-based and accountable governance 
throughout democratic institutions in Afghanistan by fostering 
an active civil society.
    I am very pleased at what we have been able to do in 
Afghanistan over the last 1\1/2\ years. Some ask whether the 
glass is half empty or half full. Well, there is still a long 
way to go in Afghanistan. But, we should be very proud of what 
we have been able to accomplish. President Karzai was here 
earlier this week, and we had good discussions with him.
    When you consider we came from nothing, from zero, from 
nothing, from a ruined country to a country that now has a 
representative form of government--they have spoken out for the 
leader that they want to have as their president. They are 
getting ready for an election next year. A constitution is well 
underway. Roads are under construction. Two million refugees 
have returned. Two million people that have been living in 
other lands, in Iran, in Pakistan, have voted with their feet 
for this new country and for the leadership that it is under. 
They are also counting on our full support to rebuild that 
country. I think we should be very proud of what we have done.
    I also want to emphasize our efforts to decrease threats 
posed by terrorist groups, rogue states, and other nonstate 
actors with regards to weapons of mass destruction and related 
technology. To achieve this goal, we must strengthen 
partnerships with countries that share our views in dealing 
with the threat of terrorism and in resolving regional 
conflicts. The fiscal year 2004 budget requests support for the 
Nonproliferation and Disarmament Fund. The budget also 
increases funding for overseas Export Controls and Border 
Security and supports additional funding for Science Centers 
and Bio-Chem Redirection Programs.
    Funding increases requested for these programs will help us 
prevent weapons of mass destruction from falling into the hands 
of terrorist groups or states by preventing their movement 
across borders and destroying or safeguarding known quantities 
of weapons or source material.
    The fiscal year 2004 budget also promotes international 
peace and prosperity by launching the most innovative approach 
to foreign assistance in more than 40 years. The new Millennium 
Challenge Account, an independent Government corporation funded 
at $1.3 billion, will redefine development aid. As President 
Bush told African leaders meeting in Mauritius earlier this 
year, this aid will go to those nations that encourage economic 
freedom, root out corruption, put in place the rule of law, 
respect the rights of their people, and have made a firm 
commitment to democracy.
    Moreover, the President's budget request offers hope and a 
helping hand to countries facing health catastrophes, poverty 
and despair, and humanitarian disasters. The budget includes 
more than $1 billion to meet the needs of refugees and 
internally displaced peoples.
    The fiscal year 2004 budget also provides more than $1.3 
billion to combat the global HIV/AIDS epidemic, the worst 
crisis facing this world. The President's total budget for HIV/
AIDS is over $2 billion, which includes the first year's 
funding for the new emergency plan for HIV/AIDS relief 
announced by the President in his State of the Union address. 
This funding will target 14 of the hardest hit countries, 
especially in Africa and the Caribbean.
    The budget also includes almost $500 million for Colombia. 
This funding will support Colombian President Uribe's unified 
campaign against terrorists and the drug trade that fuels their 
activities. The aim is to secure democracy, extend security, 
and restore economic prosperity to Colombia, and prevent the 
narco-terrorists from spreading instability to the broader 
Andean Region.
    Accomplishing these goals requires more than simply funding 
for Colombia. Therefore, our total Andean Counterdrug 
Initiative is $731 million. Critical components of this effort 
include resumption of the Airbridge Denial Program to stop 
internal and cross-border aerial trafficking in illicit drugs, 
stepped up eradication and alternative development efforts, and 
technical assistance to strengthen Colombia's police and 
judicial institutions.
    Mr. Chairman, members of the committee, to advance 
America's interests around the world, we need the dollars in 
the President's budget for fiscal year 2004. We need the 
dollars under both of my hats, as principal foreign policy 
advisor to the President, as well as CEO of the Department of 
State.

                           PREPARED STATEMENT

    With that, Mr. Chairman, I will stop and be as responsive 
as I can to your questions.
    [The statement follows:]

                 Prepared Statement of Colin L. Powell

    Mr. Chairman, members of the subcommittee, I am pleased to appear 
before you to testify in support of the President's International 
Affairs Budget for fiscal year 2004. Funding requested for fiscal year 
2004 for the Department of State, USAID, and other foreign affairs 
agencies is $28.5 billion.
    The President's Budget will allow the United States to:
  --Target security and economic assistance to sustain key countries 
        supporting us in the war on terrorism and helping us to stem 
        the proliferation of weapons of mass destruction;
  --Launch the Millennium Challenge Account--a new partnership 
        generating support to countries that rule justly, invest in 
        their people, and encourage economic freedom;
  --Strengthen the U.S. and global commitment to fighting HIV/AIDS and 
        alleviating humanitarian hardships;
  --Combat illegal drugs in the Andean Region of South America, as well 
        as bolster democracy in one of that region's most important 
        countries, Colombia; and
  --Reinforce America's world-class diplomatic force, focusing on the 
        people, places, and tools needed to promote our foreign 
        policies around the world.
    I am particularly proud of the last bullet, Mr. Chairman, because 
for the past two years I have concentrated on each of my jobs--primary 
foreign policy advisor to the President and Chief Executive Officer of 
the State Department.
    Under my CEO hat, we have been reinforcing our diplomatic force for 
two years and we will continue in fiscal year 2004. We will hire 399 
more professionals to help the President carry out the nation's foreign 
policy. This hiring will bring us to the 1,100-plus new foreign and 
civil service officers we set out to hire over the first three years to 
bring the Department's personnel back in line with its diplomatic 
workload. Moreover, completion of these hires will allow us the 
flexibility to train and educate all of our officers as they should be 
trained and educated. So I am proud of that accomplishment and want to 
thank you for helping me bring it about.
    In addition, I promised to bring state-of-the-art communications 
capability to the Department--because people who can't communicate 
rapidly and effectively in today's globalizing world can't carry out 
our foreign policy. We are approaching our goal in that regard as well.
    In both unclassified and classified communications capability, 
including desk-top access to the Internet for every man and woman at 
State, we are there by the end of 2003. The budget before you will 
sustain these gains and continue our information technology 
modernization effort. Finally, with respect to my CEO role, I wanted to 
sweep the slate clean and completely revamp the way we construct our 
embassies and other overseas buildings, as well as improve the way we 
secure our men and women who occupy them. As you well know, that last 
task is a long-term, almost never-ending one, particularly in this time 
of heightened terrorist activities. But we are well on the way to 
implementing both the construction and the security tasks in a better 
way, in a less expensive way, and in a way that subsequent CEOs can 
continue and improve on.
    Mr. Chairman, since this subcommittee's oversight responsibilities 
are primarily concerned with my CEO hat, let me give you key details 
with respect to these three main priorities, as well as tell you about 
other initiatives under my CEO hat:
    the ceo responsibilities: state department and related agencies
    The President's fiscal year 2004 discretionary request for the 
Department of State and Related Agencies is $8.497 billion. The 
requested funding will allow us to:
  --Continue initiatives to recruit, hire, train, and deploy the right 
        work force. The budget request includes $97 million to complete 
        the Diplomatic Readiness Initiative by hiring 399 additional 
        foreign affairs professionals. Foreign policy is carried out 
        through our people, and rebuilding America's diplomatic 
        readiness in staffing will ensure that the Department can 
        respond to crises and emerging foreign policy priorities. This 
        is the third year of funding for this initiative, which will 
        provide a total of 1,158 new staff for the Department of State.
  --Continue to put information technology in the service of diplomacy. 
        The budget request includes $157 million to sustain the 
        investments made over the last two years to provide classified 
        connectivity to every post that requires it and to expand 
        desktop access to the Internet for State Department employees. 
        Combined with $114 million in estimated Expedited Passport 
        Fees, a total of $271 million will be available for information 
        technology investments, including beginning a major 
        initiative--SMART--that will overhaul the outdated systems for 
        cables, messaging, information sharing, and document archiving.
  --Continue to upgrade and enhance our security worldwide. The budget 
        request includes $646.7 million for programs to enhance the 
        security of our diplomatic facilities and personnel serving 
        abroad and for hiring 85 additional security and support 
        professionals to sustain the Department's Worldwide Security 
        Upgrades program.
  --Continue to upgrade the security of our overseas facilities. The 
        budget request includes $1.514 billion to fund major security-
        related construction projects and address the major physical 
        security and rehabilitation needs of embassies and consulates 
        around the world. The request includes $761.4 million for 
        construction of secure embassy compounds in seven countries and 
        $128.3 million for construction of a new embassy building in 
        Berlin.
  --The budget also supports management improvements to the overseas 
        buildings program and the Overseas Building Operations (OBO) 
        long-range plan. The budget proposes a Capital Security Cost 
        Sharing Program that allocates the capital costs of new 
        overseas facilities to all U.S. Government agencies on the 
        basis of the number of their authorized overseas positions. 
        This program will serve two vital purposes: (1) to accelerate 
        construction of new embassy compounds and (2) to encourage 
        Federal agencies to evaluate their overseas positions more 
        carefully. In doing so, it will further the President's 
        Management Agenda initiative to rightsize the official American 
        presence abroad. The modest surcharge to the cost of stationing 
        an American employee overseas will not undermine vital overseas 
        work, but it will encourage more efficient management of 
        personnel and taxpayer funds.
  --Continue to enhance the Border Security Program. The budget request 
        includes $736 million in Machine Readable Visa (MRV) fee 
        revenues for continuous improvements in consular systems, 
        processes, and programs in order to protect U.S. borders 
        against the illegal entry of individuals who would do us harm.
  --Meet our obligations to international organizations. Fulfilling 
        U.S. commitments is vital to building coalitions and gaining 
        support for U.S. interests and policies in the war against 
        terrorism and the spread of weapons of mass destruction. The 
        budget request includes $1 billion to fund U.S. assessments to 
        44 international organizations, including $71.4 million to 
        support renewed U.S. membership in the United Nations 
        Educational, Scientific, and Cultural Organization (UNESCO).
  --Support obligations to international peacekeeping activities. The 
        budget request includes $550.2 million to pay projected U.N. 
        peacekeeping assessments. These peacekeeping activities ensure 
        continued American leadership in shaping the international 
        community's response to developments that threaten 
        international peace and stability.
    Continue to eliminate support for terrorists and thus deny them 
safe haven through our ongoing public diplomacy activities, our 
educational and cultural exchange programs, and international 
broadcasting. The budget request includes $296.9 million for public 
diplomacy, including information and cultural programs carried out by 
overseas missions and supported by public diplomacy personnel in our 
regional and functional bureaus. These resources are used to engage, 
inform, and influence foreign publics and broaden dialogue between 
American citizens and institutions and their counterparts abroad.
    The budget request also includes $345.3 million for educational and 
cultural exchange programs that build mutual understanding and develop 
friendly relations between America and the peoples of the world. These 
activities establish the trust, confidence, and international 
cooperation with other countries that sustain and advance the full 
range of American national interests.
    The budget request includes $100 million for education and cultural 
exchanges for States of the Former Soviet Union and Central and Eastern 
Europe, which were previously funded under the FREEDOM Support Act and 
Support for East European Democracy (SEED) accounts.
    As a member of the Broadcasting Board of Governors, I want to take 
this opportunity to highlight to you the BBG's pending budget request 
for $563.5 million. Funding will advance international broadcasting 
efforts to support the war on terrorism, including initiation of the 
Middle East Television Network.
    Mr. Chairman, I know that your committee staff will go over this 
statement with a fine-tooth comb and I know too that they prefer an 
account-by-account laydown. So here it is:
Diplomatic and Consular Programs (D&CP)
    The fiscal year 2004 request for D&CP, the State Department's chief 
operating account, totals $4.164 billion.
    D&CP supports the diplomatic activities and programs that 
constitute the first line of offense against threats to the security 
and prosperity of the American people. Together with Machine Readable 
Visa and other fees, the account funds the operating expenses and 
infrastructure necessary for carrying out U.S. foreign policy in more 
than 260 locations around the world.
    The fiscal year 2004 D&CP request provides $3.517 billion for 
ongoing operations--a net increase of $269 million over the fiscal year 
2003 level. Increased funding will enable the State Department to 
advance national interests effectively through improved diplomatic 
readiness, particularly in human resources.
    The request completes the Department's three-year Diplomatic 
Readiness Initiative to put the right people with the right skills in 
the right place at the right time. New D&CP funding in fiscal year 2004 
of $97 million will allow the addition of 399 professionals, providing 
a total of 1,158 new staff from fiscal year 2002 through fiscal year 
2004.
    The fiscal year 2004 D&CP request also provides $646.7 million for 
Worldwide Security Upgrades--an increase of $97.3 million over last 
year. This total includes $504.6 million to continue worldwide security 
programs for guard protection, physical security equipment and 
technical support, information and system security, and security 
personnel and training. It also includes $43.4 million to expand the 
perimeter security enhancement program for 232 posts and $98.7 million 
for improvements in domestic and overseas protection programs, 
including 85 additional agents and other security professionals.
Capital Investment Fund (CIF)
    The fiscal year 2004 request provides $157 million for the CIF to 
assure that the investments made in fiscal year 2002 and fiscal year 
2003 keep pace with increased demand from users for functionality and 
speed.
    Requested funding includes $15 million for the State Messaging and 
Archive Retrieval Toolset (SMART). The SMART initiative will replace 
outdated systems for cables and messages with a unified system that 
adds information sharing and document archiving.
Embassy Security, Construction, and Maintenance (ESCM)
    The fiscal year 2004 request for ESCM is $1.514 billion. This 
total--an increase of $259.1 million over the fiscal year 2003 level--
reflects the Administration's continuing commitment to protect U.S. 
Government personnel serving abroad, improve the security posture of 
facilities overseas, and address serious deficiencies in the State 
Department's overseas infrastructure.
    For the ongoing ESCM budget, the Administration is requesting 
$524.7 million. This budget includes maintenance and repairs at 
overseas posts, facility rehabilitation projects, construction 
security, renovation of the Harry S Truman Building, all activities 
associated with leasing overseas properties, and management of the 
overseas buildings program.
    For Worldwide Security Construction, the Administration is 
requesting $761.4 million for the next tranche of security-driven 
construction projects to replace high-risk facilities. Funding will 
support the construction of secure embassies in seven countries--
Algeria, Burma, Ghana, Indonesia, Panama, Serbia, and Togo. In 
addition, the requested funding will provide new on-compound buildings 
for USAID in Ghana, Jamaica, and Nigeria.
    The ESCM request includes $100 million to strengthen compound 
security at vulnerable posts.
    The request also includes $128.3 million to construct the new U.S. 
embassy building in Berlin.
Educational and Cultural Exchange Programs (ECE)
    The fiscal year 2004 request of $345.3 million for ECE maintains 
funding for exchanges at the fiscal year 2003 level of $244 million and 
adds $100 million for projects for Eastern Europe and the States of the 
Former Soviet Union previously funded from Foreign Operations 
appropriations.
    Authorized by the Mutual Educational and Cultural Exchange Act of 
1961 (Fulbright-Hays Act), as amended, exchanges are strategic 
activities that build mutual understanding and develop friendly 
relations between the United States and other countries. They establish 
the trust, confidence, and international cooperation necessary to 
sustain and advance the full range of U.S. national interests.
    The request provides $141 million for Academic Programs. These 
include the J. William Fulbright Educational Exchange Program for 
exchange of students, scholars, and teachers and the Hubert H. Humphrey 
Fellowship Program for academic study and internships in the United 
States for mid-career professionals from developing countries.
    The request also provides $73 million for Professional and Cultural 
Exchanges. These include the International Visitor Program, which 
supports travel to the United States by current and emerging leaders to 
obtain firsthand knowledge of American politics and values, and the 
Citizen Exchange Program, which partners with U.S. non-profit 
organizations to support professional, cultural, and grassroots 
community exchanges.
    This request provides $100 million for exchanges funded in the past 
from the FREEDOM Support Act (FSA) and Support for East European 
Democracy (SEED) accounts.
    This request also provides $31 million for exchanges support. This 
is a straight-line projection of the fiscal year 2003 level.
Contributions to International Organizations (CIO)
    The fiscal year 2004 request for CIO of $1.010 billion provides 
funding for U.S. assessed contributions, consistent with U.S. statutory 
restrictions, to 44 international organizations to further U.S. 
economic, political, social, and cultural interests.
    The request recognizes U.S. international obligations and reflects 
the President's commitment to maintain the financial stability of the 
United Nations and other international organizations that include the 
World Health Organization, the North Atlantic Treaty Organization, the 
International Atomic Energy Agency, and the Organization for Economic 
Cooperation and Development.
    The budget request provides $71.4 million to support renewed U.S. 
membership in the United Nations Educational, Scientific, and Cultural 
Organization (UNESCO). UNESCO contributes to peace and security in the 
world by promoting collaboration among nations through education, 
science, culture and communication and by furthering intercultural 
understanding and universal respect for justice, rule of law, human 
rights, and fundamental freedoms, notably a free press.
    Membership in international organizations benefits the United 
States by building coalitions and pursuing multilateral programs that 
advance U.S. interests. These include promoting economic growth through 
market economies; settling disputes peacefully; encouraging non-
proliferation, nuclear safeguards, arms control, and disarmament; 
adopting international standards to facilitate international trade, 
telecommunications, transportation, environmental protection, and 
scientific exchange; and strengthening international cooperation in 
agriculture and health.
Contributions for International Peacekeeping Activities (CIPA)
    The administration is requesting $550.2 million for CIPA in fiscal 
year 2004. This funding level will allow the United States to pay its 
share of assessed U.N. peacekeeping budgets, fulfilling U.S. 
commitments and avoiding increased U.N. arrears.
    The U.N. peacekeeping appropriation serves U.S. interests in 
Europe, Africa and the Middle East, where U.N. peacekeeping missions 
assist in ending conflicts, restoring peace and strengthening regional 
stability.
    U.N. peacekeeping missions leverage U.S. political, military and 
financial assets through the authority of the U.N. Security Council and 
the participation of other states that provide funds and peacekeepers 
for conflicts around the world.
Broadcasting Board of Governors (BBG)
    The fiscal year 2004 budget request for the BBG totals $563.5 
million.
    The overall request provides $525.2 million for U.S. Government 
non-military international broadcasting operations through the 
International Broadcasting Operations (IBO) account. This account funds 
operations of the Voice of America (VOA), Radio Free Europe/Radio 
Liberty (RFE/RL), Radio Free Asia (RFA), and all related program 
delivery and support activities.
    The IBO request includes funding to advance broadcasting efforts 
related to the war on terrorism. The request includes $30 million to 
initiate the Middle East Television Network--a new Arabic-language 
satellite TV network that, once operational, will have the potential to 
reach vast audiences in the Middle East. The request also includes 
funding to double VOA Indonesian radio programming, significantly 
increase television programming in Indonesia, and expand BBG audience 
development efforts.
    The IBO request reflects the shifting of priorities away from the 
predominantly Cold War focus on Central and Eastern Europe to 
broadcasting in the Middle East and Central Asia. Funds are being 
redirected to programs in these regions through the elimination of 
broadcasting to countries in the former Eastern Bloc that have 
demonstrated significant advances in democracy and press freedoms and 
are new or soon-to-be NATO and European Union Members.
    The IBO request also reflects anticipated efficiencies that achieve 
a five-percent reduction in funding for administration and management 
in fiscal year 2004.
    The fiscal year 2004 request also provides $26.9 million through 
Broadcasting to Cuba (OCB) for continuing Radio Marti and TV Marti 
operations, including salary and inflation increases, to support 
current schedules.
    The fiscal year 2004 request further provides $11.4 million for 
Broadcasting Capital Improvements to maintain the BBG's worldwide 
transmission network. The request includes $2.9 million to maintain and 
improve security of U.S. broadcasting transmission facilities overseas.

    That finishes the State and Related Agencies part of the 
President's Budget. But before I stop and take your questions, let me 
give you an overview of the rest of our budget for fiscal year 2004, 
the Foreign Affairs part. You are all members of the larger 
Appropriations Committee and, in that capacity, I hope that you will 
strongly support this part of our budget also.

 FOREIGN POLICY ADVISOR RESPONSIBILITIES: FUNDING AMERICA'S DIPLOMACY 
                            AROUND THE WORLD

    The fiscal year 2004 budget proposes several initiatives to advance 
U.S. national security interests and preserve American leadership. The 
fiscal year 2004 Foreign Operations budget that funds programs for the 
Department of State, USAID and other foreign affairs agencies is $18.8 
billion. Today, our number one priority is to fight and win the global 
war on terrorism. The budget furthers this goal by providing economic, 
military, and democracy assistance to key foreign partners and allies, 
including $4.7 billion to countries that have joined us in the war on 
terrorism.
    The budget also promotes international peace and prosperity by 
launching the most innovative approach to U.S. foreign assistance in 
more than forty years. The new Millennium Challenge Account (MCA), an 
independent government corporation funded at $1.3 billion will redefine 
``aid''. As President Bush told African leaders meeting in Mauritius 
recently, this aid will go to ``nations that encourage economic 
freedom, root out corruption, and respect the rights of their people.''
    Moreover, this budget offers hope and a helping hand to countries 
facing health catastrophes, poverty and despair, and humanitarian 
disasters. It provides $1.345 billion to combat the global HIV/AIDS 
epidemic, more than $1 billion to meet the needs of refugees and 
internally displaced peoples, $200 million in emergency food assistance 
to support dire famine needs, and $100 million for an emerging crises 
fund to allow swift responses to complex foreign crises. Mr. Chairman, 
let me give you some details.
    The United States is successfully prosecuting the global war on 
terrorism on a number of fronts. We are providing extensive assistance 
to states on the front lines of the anti-terror struggle. Working with 
our international partners bilaterally and through multilateral 
organizations, we have frozen more than $110 million in terrorist 
assets, launched new initiatives to secure global networks of commerce 
and communication, and significantly increased the cooperation of our 
law enforcement and intelligence communities. Afghanistan is no longer 
a haven for al-Qaeda. We are now working with the Afghan Authority, 
other governments, international organizations, and NGOs to rebuild 
Afghanistan. Around the world we are combating the unholy alliance of 
drug traffickers and terrorists who threaten the internal stability of 
countries. We are leading the international effort to prevent weapons 
of mass destruction from falling into the hands of those who would do 
harm to us and others. At the same time, we are rejuvenating and 
expanding our public diplomacy efforts worldwide.

Assistance to Frontline States
    The fiscal year 2004 International Affairs budget provides 
approximately $4.7 billion in assistance to the Frontline States, which 
have joined with us in the war on terrorism. This funding will provide 
crucial assistance to enable these countries to strengthen their 
economies, internal counter-terrorism capabilities and border controls.
    Of this amount, the President's Budget provides $657 million for 
Afghanistan, $460 million for Jordan, $395 million for Pakistan, $255 
million for Turkey, $136 million for Indonesia, and $87 million for the 
Philippines. In Afghanistan, the funding will be used to fulfill our 
commitment to rebuild Afghanistan's road network; establish security 
through a national military and national police force, including 
counter-terrorism and counter-narcotics components; establish broad-
based and accountable governance through democratic institutions and an 
active civil society; ensure a peace dividend for the Afghan people 
through economic reconstruction; and provide humanitarian assistance to 
sustain returning refugees and displaced persons. United States 
assistance will continue to be coordinated with the Afghan government, 
the United Nations, and other international donors.
    The State Department's Anti-Terrorism Assistance (ATA) program will 
continue to provide frontline states a full complement of training 
courses, such as a course on how to conduct a post-terrorist attack 
investigation or how to respond to a WMD event. The budget will also 
fund additional equipment grants to sustain the skills and capabilities 
acquired in the ATA courses. It will support as well in-country 
training programs in Afghanistan, Pakistan, and Indonesia.

Central Asia and Freedom Support Act Nations
    In fiscal year 2004, over $157 million in Freedom Support Act (FSA) 
funding will go to assistance programs in the Central Asian states. The 
fiscal year 2004 budget continues to focus FSA funds to programs in 
Uzbekistan, Kyrgyzstan and Tajikistan, recognizing that Central Asia is 
of strategic importance to U.S. foreign policy objectives. The fiscal 
year 2004 assistance level for Uzbekistan, Kyrgyzstan and Tajikistan is 
30 percent above 2003. Assistance to these countries has almost doubled 
from pre-September 11th levels. These funds will support civil society 
development, small business promotion, conflict reduction, and economic 
reform in the region. These efforts are designed to promote economic 
development and strengthen the rule of law in order to reduce the 
appeal of extremist movements and stem the flow of illegal drugs that 
finance terrorist activities.
    Funding levels and country distributions for the FSA nations 
reflect shifting priorities in the region. For example, after more than 
10 years of high levels of assistance, it is time to begin the process 
of graduating countries in this region from economic assistance, as we 
have done with countries in Eastern Europe that have made sufficient 
progress in the transition to market-based democracies. U.S. economic 
assistance to Russia and Ukraine will begin phasing down in fiscal year 
2004, a decrease of 32 percent from 2003, moving these countries 
towards graduation.

Combating Illegal Drugs and Stemming Narco-terrorism
    The President's request for $731 million for the Andean Counterdrug 
Initiative includes $463 million for Colombia. An additional $110 
million in military assistance to Colombia will support Colombian 
President Uribe's unified campaign against terrorists and the drug 
trade that fuels their activities. The aim is to secure democracy, 
extend security, and restore economic prosperity to Colombia and 
prevent the narco-terrorists from spreading instability to the broader 
Andean region. Critical components of this effort include resumption of 
the Airbridge Denial program to stop internal and cross-border aerial 
trafficking in illicit drugs, stepped up eradication and alternative 
development efforts, and technical assistance to strengthen Colombia's 
police and judicial institutions.

Halting Access of Rogue States and Terrorists to Weapons of Mass 
        Destruction
    Decreasing the threats posed by terrorist groups, rogue states, and 
other non-state actors requires halting the spread of weapons of mass 
destruction (WMD) and related technology. To achieve this goal, we must 
strengthen partnerships with countries that share our views in dealing 
with the threat of terrorism and resolving regional conflicts.
    The fiscal year 2004 budget requests $35 million for the 
Nonproliferation and Disarmament Fund (NDF), more than double the 
fiscal year 2003 request, increases funding for overseas Export 
Controls and Border Security (EXBS) to $40 million, and supports 
additional funding for Science Centers and Bio-Chem Redirection 
Programs.
    Funding increases requested for the NDF and EXBS programs seek to 
prevent weapons of mass destruction from falling into the hands of 
terrorist groups or states by preventing their movement across borders 
and destroying or safeguarding known quantities of weapons or source 
material. The Science Centers and Bio-Chem Redirection programs support 
the same goals by engaging former Soviet weapons scientists and 
engineers in peaceful scientific activities, providing them an 
alternative to marketing their skills to states or groups of concern.

Millennium Challenge Account
    The fiscal year 2004 Budget request of $1.3 billion for the new 
Millennium Challenge Account (MCA) as a government corporation fulfills 
the President's March 2002 pledge to create a new bilateral assistance 
program, markedly different from existing models. This budget is a huge 
step towards the President's commitment of $5 billion in annual funding 
for the MCA by 2006, a 50 percent increase in core development 
assistance.
    The MCA supplement U.S. commitments to humanitarian assistance and 
existing development aid programs funded and implemented by USAID. It 
will assist developing countries that make sound policy decisions and 
demonstrate solid performance on economic growth and reducing poverty.
  --MCA funds will go only to selected developing countries that 
        demonstrate a commitment to sound policies--based on clear, 
        concrete and objective criteria. To become eligible for MCA 
        resources, countries must demonstrate their commitment to 
        economic opportunity, investing in people, and good governance.
  --Resources will be available through agreements with recipient 
        countries that specify a limited number of clear measurable 
        goals, activities, and benchmarks, and financial accountability 
        standards.
    The MCA will be administered by a new government corporation 
designed to support innovative strategies and to ensure accountability 
for measurable results. The corporation will be supervised by a Board 
of Directors composed of Cabinet level officials and chaired by the 
Secretary of State. Personnel will be drawn from a variety of 
government agencies and non-government institutions and serve limited-
term appointments.
    In fiscal year 2004, countries eligible to borrow from the 
International Development Association (IDA), and which have per capita 
incomes below $1,435, (the historical IDA cutoff) will be considered. 
In 2005, all countries with incomes below $1,435 will be considered. In 
2006, all countries with incomes up to $2,975 (the current World Bank 
cutoff for lower middle income countries) will be eligible.
    The selection process will use 16 indicators to assess national 
performance--these indicators being relative to governing justly, 
investing in people, and encouraging economic freedom. These indicators 
were chosen because of the quality and objectivity of their data, 
country coverage, public availability, and correlation with growth and 
poverty reduction. The results of a review of the indicators will be 
used by the MCA Board of Directors to make a final recommendation to 
the President on a list of MCA countries.

The U.S.-Middle East Partnership Initiative
    The President's Budget includes $145 million for the Middle East 
Partnership Initiative (MEPI). This initiative gives us a framework and 
funding for working with the Arab world to expand educational and 
economic opportunities, empower women, and strengthen civil society and 
the rule of law. The peoples and governments of the Middle East face 
daunting human challenges. Their economies are stagnant and unable to 
provide jobs for millions of young people entering the workplace each 
year. Too many of their governments appear closed and unresponsive to 
the needs of their citizens. And their schools are not equipping 
students to succeed in today's globalizing world. With the programs of 
the MEPI, we will work with Arab governments, groups, and individuals 
to bridge the jobs gap with economic reform, business investment, and 
private sector development; close the freedom gap with projects to 
strengthen civil society, expand political participation, and lift the 
voices of women; and bridge the knowledge gap with better schools and 
more opportunities for higher education. The U.S.-Middle East 
Partnership Initiative is an investment in a more stable, peaceful, 
prosperous, and democratic Arab world.

Fighting the Global AIDS Pandemic
    The fiscal year 2004 budget continues the Administration's 
commitment to combat HIV/AIDS and to help bring care and treatment to 
infected people overseas. The HIV/AIDS pandemic has killed 23 million 
of the 63 million people it has infected to date, and left 14 million 
orphans worldwide. President Bush has made fighting this pandemic a 
priority of U.S. foreign policy.
    The President believes the global community can--and must--do more 
to halt the advance of the pandemic, and that the United States should 
lead by example. Thus, the President's fiscal year 2004 budget request 
signals a further, massive increase in resources to combat the HIV/AIDs 
pandemic. As described in the State of the Union, the President is 
committing to provide a total of $15 billion over the next five years 
to turn the tide in the war on HIV/AIDs, beginning with $2.0 billion in 
the fiscal year 2004 budget request and rising thereafter. These funds 
will be targeted on the hardest hit countries, especially Africa and 
the Caribbean with the objective of achieving dramatic on-the-ground 
results. This new dramatic commitment is reflected in the 
Administration's $2.0 billion fiscal year 2004 budget request, which 
includes:
  --State Department--$450 million;
  --USAID--$895 million, including $100 million for the Global Fund and 
        $150 million for the International Mother & Child HIV 
        Prevention; and
  --HHS/CDC/NIH--$690 million, including $100 million for the Global 
        Fund and $150 million for the International Mother & Child HIV 
        Prevention.
    In order to ensure accountability for results, the President has 
asked me to establish at State a new Special Coordinator for 
International HIV/AIDS Assistance. The Special Coordinator will work 
for me and be responsible for coordinating all international HIV/AIDS 
programs and efforts of the agencies that implement them.

Hunger, Famine, and Other Emergencies
    Food Aid.--Historically the United States has been the largest 
donor of assistance for victims of protracted and emergency food 
crises. In 2003, discretionary funding for food aid increased from $864 
million to $1.19 billion. That level will be enhanced significantly in 
2004 with two new initiatives: a Famine Fund and an emerging crises 
fund to address complex emergencies.
  --Famine Fund.--The fiscal year 2004 budget includes a new $200 
        million fund with flexible authorities to provide emergency 
        food, grants or support to meet dire needs on a case-by-case 
        basis. This commitment reflects more than a 15 percent increase 
        in U.S. food assistance.
  --Emerging Crises Fund.--The budget also requests $100 million for a 
        new account that will allow the Administration to respond 
        swiftly and effectively to prevent or resolve unforeseen 
        complex foreign crises. This account will provide a mechanism 
        for the President to support actions to advance American 
        interests, including to prevent or respond to foreign 
        territorial disputes, armed ethnic and civil conflicts that 
        pose threats to regional and international peace and acts of 
        ethnic cleansing, mass killing and genocide.

                                SUMMARY

    Mr. Chairman, members of the committee, to advance America's 
interests around the world we need the dollars in the President's 
Budget for fiscal year 2004. We need the dollars under both of my 
hats--CEO and principal foreign policy advisor. The times we live in 
are troubled to be sure, but I believe there is every bit as much 
opportunity in the days ahead as there is danger. American leadership 
is essential to dealing with both the danger and the opportunity. With 
regard to the Department of State, the President's fiscal year 2004 
budget is crucial to the exercise of that leadership.
    Thank you and I will be pleased to answer your questions.

                        REMARKS OF SENATOR GREGG

    Senator Gregg. Thank you, Mr. Secretary, for that 
statement.
    Let me begin by saying that we have enjoyed working with 
you and your Department. I know that Senator Hollings, who I 
succeeded as chair here, has aggressively pursued many of the 
initiatives which you have outlined in his original remarks. 
And I intend to continue Senator Hollings' processes there, 
initiatives in the area, for example, of gearing up the 
Diplomatic Corps. We will certainly be funding that.
    One of my other concerns is the Consular Affairs area. We 
have to not only gear up and give the Consular Affairs folks 
status, but we also have to give them decent working places, so 
that when people come into our Embassies, they feel comfortable 
and not as though they are being treated as second class 
individuals. They should have a nice atmosphere. And I think 
that this will help the visa process, also.
    And I also am concerned about protecting our people 
overseas, not only the Foreign Service Officers and Consular 
Affairs folks, but their families, especially at places where 
they naturally congregate, such as American schools. As you 
know, we put $15 million into the budget to address that. And 
we are looking for other ideas that the Department may have in 
that area specifically.
    I want to congratulate General Williams for his efforts. I 
believe that after a number of years of out-of-control costs, 
driven in large part by a need to respond to very serious 
security issues at our Embassies, the issue is being 
aggressively and effectively addressed by General Williams.
    I would say this, however: I am concerned that we are 
building fortresses that have no architectural identity with 
the communities that they are in. And I hope that in obtaining 
security that we will not leave behind the importance of having 
American presence that does not look like a fortress, that our 
buildings start to take on some architectural identity with the 
countries that they are in. I think I would like to get into 
that issue, but not at this time.
    What I would like to address now is a couple more larger 
issues which are current to the period. Let me read you a 
couple quotes from Osama bin Laden. In a Time magazine article 
on the issue of weapons of mass destruction, Osama bin Laden 
stated, ``Acquiring weapons for the defense of Muslims is a 
religious duty. If I have indeed acquired these weapons, then I 
thank God for enabling me to do so. And if I seek to acquire 
these weapons, I am carrying out a duty. It would be a sin for 
Muslims not to try to possess weapons that would prevent 
infidels from inflicting harm on Muslims.''
    He went on to say in another quote, ``We, with Allah's 
help, call on every Muslim who believes in Allah and wishes to 
be rewarded to comply with Allah's orders to kill the Americans 
and to plunder their money wherever and whenever they find it. 
The ruling to kill the Americans and their allies, civilians 
and military, is an individual duty of every Muslim who can do 
it in any country which it is possible to do it in.''
    What, today, is to stop Saddam Hussein from delivering to 
this criminal individual, who has already participated in the 
murder of thousands of Americans, those weapons of mass 
destruction?

                       SADDAM HUSSEIN AND WEAPONS

    Secretary Powell. Nothing is prepared to stop him today, if 
he chooses to do so. We want to take away his option of doing 
so by disarming the Iraqi regime and Saddam Hussein. The 
chilling words you just read, Mr. Chairman, are from somebody 
who is committed to strike us again and again and again; let 
there be no doubt about it, he will use airplanes filled with 
fuel. He will use car bombs. As he said in those quotations, if 
he had weapons of mass destruction, he would use them.
    Should there be a doubt in anyone's mind that if Osama bin 
Laden or other terrorists like Osama bin Laden had access to 
chemical or biological or nuclear weapons, they would use them? 
If there was a doubt in anyone's mind, that doubt should have 
been erased on 9/11. That is why after 9/11 we realized the 
nature of the conflict we were now in. We had to deal with the 
Taliban in Afghanistan. We had to break up al-Qaeda. You saw 
the recent arrest over the weekend of the gentleman who was the 
brains of the organization that struck us on 9/11. We have to 
go after not only these individuals, but also the potential 
sources of their weaponry.
    That is why we redoubled our effort in making it clear to 
the United Nations that we could no longer allow its 
resolutions to be ignored with respect to Iraq, a known 
developer of weapons of mass destruction. That is why the 
moment we find ourselves in now is a critical moment, where we 
are being tested and where the Security Council, the United 
Nations, and the international community are being tested. Are 
we going to allow an individual, such as Saddam Hussein, to 
continue to develop these weapons of mass destruction or 
deceive us into believing that he is not, when we know he is, 
because it is too hard to face the consequences of dealing with 
the truth, and face a situation some years from now when Osama 
bin Laden has accomplished the goal he laid out in those 
statements, and he has such a weapon, and he got it from Iraq?
    We must go after these countries, these rogue nations, that 
proliferate and are led by leaders who would strike us and who 
have shown in the past they will strike their own neighbors, 
strike their own people, do anything to stay in power and 
pursue their own agenda. That is the argument I will be taking 
to the United Nations this afternoon. This is the time to deal 
with this kind of threat, not after we have seen thousands of 
people die as a result of the use of one of these horrible 
weapons. We cannot allow ourselves to be deterred by false 
claims that ``It is all okay. He is complying,'' when he is not 
complying but merely deceiving the international community and 
trying to keep us from doing what we said we would be prepared 
to do last October--excuse me--November, when we passed 
Resolution 1441.
    Senator Gregg. Thank you. And I want to congratulate you 
and the President for pursuing that policy, because I think it 
should be obvious to all people, whether we wish to admit it or 
not, that we are dealing with a fundamentally evil individual, 
not only in Saddam Hussein, but in Osama bin Laden, obviously, 
and that the coalescence or the convergence of those two forces 
represents a clear, present, and immediate threat to the United 
States.
    My time is up, and I yield to the ranking member.

                            VICTORY IN IRAQ

    Senator Hollings. Mr. Secretary, I support you, support 
your budget. I have some questions about Colombia and General 
Williams, the Embassy there at Berlin.
    This cost sharing proposal and the funding request for 
USAID buildings--the Foreign Operations Subcommittee ranking 
member Senator Leahy will be back momentarily--but I cannot get 
any money back from him. So we have opposed our State 
Department budget funding buildings under another 
subcommittees' jurisdiction.
    Having said that, I am reading here, I am listening to our 
President before the American Enterprise Institute, of a regime 
change. I am hearing you yesterday afternoon. And then I am 
reading yesterday morning, and I quote, ``General Meyers also 
said disarming Iraq would define victory, not capturing or 
killing President Saddam Hussein.'' Is General Meyers correct?
    Secretary Powell. All of the statements that you made 
reference to and the positions you made reference to are 
correct.
    Senator Hollings. Well, that means then you believe we have 
to remove Saddam Hussein, is that not right?
    Secretary Powell. Well, in 1998, the previous 
administration and the Congress believed that the only way----
    Senator Hollings. I am not questioning that.
    Secretary Powell. No, no. I just need----
    Senator Hollings. I have read----
    Secretary Powell. Yes, I am going to come to our position. 
But the Congress and the administration at that time, in the 
face of the intransigence of Saddam Hussein, his unwillingness 
to disarm as a result of previous U.N. resolutions, made a 
judgment that we could not solve this problem with that regime 
in place. So regime change in 1998 became the policy of 
President Clinton's administration. It was to some extent, I 
think to a large extent, endorsed by the Congress in laws that 
were passed at that time.
    When we came into office, we worked to see if there was 
some other way of disarming Saddam Hussein. We modified and 
strengthened the sanctions policies, so that it was not hurting 
the Iraqi people. We worked with our friends and allies to see 
if there was some way to disarm him. We finally got to the 
point where Resolution 1441 was passed. Resolution 1441 passed 
unanimously. It has as its goal the disarmament of Iraq.
    However, what we have seen since 1441 was passed is that 
Saddam Hussein has still not made that strategic choice to 
disarm and allow the inspectors to verify that he is disarming. 
So we are reaching the point that was reached by others in 
1998, such that it appears the only way perhaps to get him to 
disarm is to remove the regime and disarm that nation of its 
weapons of mass destruction.
    But even at this late date, it is possible to find a 
peaceful solution, if Saddam Hussein and the Iraqi regime would 
do what it has been asked to do by the international community 
for all these many years. But we do not take off the table, of 
course, the option of forcible removal of the regime. We have a 
large number of American troops that are assembled there to do 
that.
    But it is the disarmament that is the principal objective. 
I think that is the point that General Meyers was trying to 
make, when he said the regime will be removed. But whatever 
happens to Saddam Hussein, whether he goes into exile or into 
irrelevance, we will have a better situation in Iraq when those 
weapons of mass destruction are gone.

                        REMOVING SADDAM HUSSEIN

    Senator Hollings. Well, you and I would agree in a second 
that if you removed all the weapons of mass destruction in the 
next hour, you would still have to remove Saddam. You could not 
just pick up and then leave with General Meyers and say, ``The 
job is done.'' I mean, that fellow would start building bombs 
all over again. So I guess you and I agree that removing Saddam 
Hussein is the mission.
    You used the expression ``better way, less expensive way,'' 
in order to remove him. I was never worried for the last 10, 12 
years about any imminent threat from Saddam. We have what you 
and I know as the AMLR, the best force, Israel, right there. 
They do not have the luxury of calling up and getting a meeting 
with the United Nations or asking for monitors. They have to 
act in self-defense. And so if there is any imminent threat 
really, they would knock it out by 10:30 or 11:00 o'clock this 
morning, I can tell you that.
    Knowing that, and you used the expression in your major 
testimony there about ``a better way, a less expensive way.'' 
Rather than starting a war and all of these other things to 
remove him, Mossad would know where he is. Why not get a hit 
team and get rid of him? Why start a war in order to do it?
    Secretary Powell. Because I am not sure anybody really 
knows where he is. It is easy to say. It is much more difficult 
to do. I cannot tell you what Mossad or any other intelligence 
agency knows or does not know. This is a man who has spent the 
last 30 years putting in place a security system that has as 
its sole purpose to keep him in place. The suggestion that if 
there was imminent danger, everybody would know where it is and 
could hit it by 10:30 this morning, I think, is not quite the 
case.
    His capabilities are well dispersed. They are hidden. They 
are not easy to find. He has had decades of experience in 
hiding his activities and diverting the attention of those who 
are looking for his prohibited activities.
    Senator Hollings. Well, the 3,000 missiles in this same 
story that are precision guided, are they guided against 
Saddam?
    Secretary Powell. I do not know of any way to guide against 
a particular individual.
    Senator Hollings. Are those military targets alone? Is that 
your answer, just the 3,000 missiles?
    Secretary Powell. No. My answer is that I do not discuss 
targeting that might be conducted by our military authorities. 
In the old days, I used to.
    Senator Hollings. You were the chairman.
    Secretary Powell. But now I do not. I think it is unwise to 
do.
    Senator Hollings. But you know where they are guided. You 
can discuss them. I mean, we have to get the guy. You have to 
hit the palaces, as well as the command and control. You know 
what I mean. Hit a few Scud sites. In fact, if you have any 
good precision guided ones, why not tell the inspectors and let 
them take them up?
    Secretary Powell. The inspectors do not view as their role 
to be part of the U.S. targeting system. If we keep saying all 
we have to do is hit the palaces, I can assure you that the 
place Saddam Hussein will not be in is one of his palaces.
    Senator Hollings. And you do not think----
    Secretary Powell. I do not think he is as targetable as it 
is often suggested. He is a survivor. He is aware of our 
capability. I am sure he is doing everything he can to assure 
his personal survival.
    Senator Hollings. Being a survivor, there would be nothing 
wrong, if we knew to hit him. In other words, when we hit that 
automobile full of terrorists down in Yemen, we announced 
publicly--I would not have announced it, but they did, and said 
terrorists. In a terrorism war, terrorist open season, they are 
combatants. And we can hit them anywhere we can find them.
    So I take it there would be nothing wrong with trying to 
hit Saddam with one of those missiles; would there be?
    Secretary Powell. If we were in armed conflict, which we 
may well find ourselves in, then----
    Senator Hollings. As I understand it, excuse me, but we are 
in armed conflict. The President announced, said, ``We are in a 
terrorism war.'' And in a terrorism war, terrorists are 
combatants. And therefore, you can kill them. That is how he 
justified killing those people down there in Yemen.
    So we have described Saddam in every way possible, 
including as a terrorist. So you could go ahead and hit him, 
could you not?
    Secretary Powell. I, frankly, do not want to talk about 
targeting, who might be targeted, or who might not be targeted 
at an open hearing like this, Senator.
    Senator Hollings. Well, you can see what I am getting at. 
You do not want to level Baghdad to get him. I mean, how do we 
get to victory, according to General Meyers----
    Secretary Powell. We have no intention of--we are not going 
to level Baghdad.

                        DEFINING VICTORY IN IRAQ

    Senator Hollings. I agree; we are not going to level 
Baghdad. So what is going to define victory, other than getting 
him?
    Secretary Powell. Defining victory will be a disarmed Iraq. 
If it is done peacefully, with no invasion and no military 
action required, it would be an Iraqi regime that has foresworn 
these weapons of mass destruction and done so in a way that 
there is reason to believe them. It is hard to imagine 
believing them right now. If there is a military conflict, it 
will require a change in that regime, because they have 
demonstrated they will not change otherwise, and the disarming 
of the country's weapons of mass destruction, putting in place 
a better government for the people of Iraq.
    This has been a terrible government for 30 years. It has 
squandered the wealth of the nation on weapons of mass 
destruction. It is all about the survival of one individual and 
his cohorts in this one regime. The people of Iraq will be a 
lot better off when their weapons of mass destruction are no 
longer cause for the rest of the world to be concerned about. 
If it takes the removal of the regime to do it, because we 
cannot find a peaceful way, then that is what we are prepared 
to do.
    Senator Hollings. Senator Kohl, I recognize you. And I am 
going to leave to vote, too. And the chairman is coming back, 
and----
    Senator Leahy. I believe that I was really here first.
    Senator Hollings. You were here first? Excuse me then. Very 
good. Excuse me, Senator Leahy. But the distinguished Secretary 
has to leave no later than 11:30.
    Senator Leahy. Thank you, Senator Hollings. I understand we 
were doing the early bird rule.

                       CURRENT SITUATION IN IRAQ

    And I am sorry that I had to step out earlier, Mr. 
Secretary. We have one of these judicial confirmation matters 
that come up periodically on the floor of the Senate. And I was 
involved in that. So I had to drop by.
    I understand you are going to the United Nations. I am glad 
you could take the time to come here. I appreciate that all the 
years I have known you, both in the military and now in this, 
you have always been responsive to consulting with the 
Congress. I think it has helped your cause, but it has 
certainly helped our understanding. And I do appreciate that.
    I also appreciate the money that you have helped get in the 
bill for food aid to starving people in Sub-Saharan Africa. For 
that, some of us have been fighting for this for years.
    Now having said that, let me ask you this: A question I get 
in hundreds of letters, sometimes thousands of e-mails from my 
little State of Vermont, is ``How has it come to this?'' They 
are speaking of Iraq, of course.
    When my wife and I go home on weekends, I go in the grocery 
store. I get asked this question from everybody from the people 
stocking the shelves to customers. I get to my house in 
Vermont. People are calling, asking me the same question.
    In the immediate aftermath of September 11, we had hundreds 
of thousands of Germans in Berlin marching in support of the 
United States. We had Le Monde in France declaring ``We're all 
Americans.'' We had unprecedented international cooperation in 
our war against al-Qaeda, including the use of force in 
Afghanistan. Now we have deep divisions within the Security 
Council. Some of our closest allies raise serious questions 
about our effort to launch a war immediately.
    Saddam Hussein is one of the world's worst tyrants. He is a 
war criminal. He is a despicable, dangerous despot. There is no 
question that in a war crimes tribunal he could be convicted of 
heinous crimes. The United States is a country that stands for 
freedom, democracy, and human rights. We stand for making the 
world a safer place.
    But if that case is so clear, why are Russia, China, 
Germany, France, and a dozen other nations saying we are making 
a grave mistake by not giving the U.N. inspectors more time? 
Turkey, which is swimming in debt, turns down our offer of 
billions of dollars. We are threatening to go to war without a 
Security Council resolution. We are causing deep divisions 
among ourselves and within NATO. I have visited with NATO 
leaders, and the United Nations. How did it come to this?
    Secretary Powell. One of the reasons we are here is 
because----
    Senator Leahy. What do I say to Vermonters? What do I say 
to Vermonters who ask me that question?

                HISTORY REGARDING REGIME CHANGE IN IRAQ

    Secretary Powell. We are here because the international 
community has refused to deal with this tyrant, who has all the 
traits and attributes that you mentioned earlier. He is a 
dictator. He has more than oppressed his own people; he has 
allowed rape and murder and all kinds of terrible crimes to 
occur within his country.
    He is not the only one in the world like that. What makes 
him different is he also has been developing weapons of mass 
destruction; there is no question about it. He has had the 
intent to do so, and he has developed them. He has used them in 
a way that no other modern leader has used such weapons, 
against his neighbors and against his people.
    The international community made a judgment, beginning back 
in 1991, that this was unacceptable and that he had to be 
disarmed. He had to give up these weapons. For 11 years, the 
international community kept passing resolutions and did 
nothing about it.
    This administration came into office determined to do 
something about it, to see whether that behavior could be 
changed. We came into office with a strong position from the 
previous administration that this regime had to be changed, if 
it would not change itself. We worked with the United Nations 
to get them to realize the simple reality that this was a 
dangerous regime and that something had to be done.
    What really brought it into focus was 9/11, when it became 
clear, as you heard from Senator Gregg earlier, that we have 
people out there who would do anything to get their hands on 
the kinds of weapons that Saddam Hussein is developing. Now 
some argue back, ``Yes, but you cannot prove that kind of a 
nexus between al-Qaeda and Saddam Hussein. Yes, you have some 
evidence, but it is not good enough proof.''
    Well, we do not want to wait around until the proof is 
ready for a court of law, to say, ``But we have already seen 
chemical or biological weapons made in Iraq show up somewhere 
in New York or in Vermont.'' So we believe this was the time to 
deal with this. We got the United Nations to agree with a 15-0 
vote in the Security Council in early November. All members 
agreed that Saddam Hussein was guilty. He was in material 
breach, stayed in material breach. This is the time for the 
Iraqi regime to change, immediately, unconditionally, right 
now. Inspectors will help verify the disarmament. If Saddam 
Hussein did not disarm this time, there would be serious 
consequences. Everybody who voted for that knew what that 
meant. It meant that if the Iraqi regime did not comply, there 
would be a war.
    There were some at that time who were already beginning to 
say, ``Well, good. We have bought some time and then we will 
buy some more time and some more time. Then this whole thing 
will go away.''

                         STATUS OF ALLY SUPPORT

    Senator Leahy. Is that what our allies are doing? Is that 
what Germany is doing? Is that what France is doing? Is that 
what China is doing? Is that what----
    Secretary Powell. Yes. It is what some of our allies are 
doing. But some of our allies, like the United Kingdom, Spain, 
Italy, Portugal, the newly emerging nations of Eastern Europe, 
and Australia, are standing up with us and standing up 
strongly.
    We have most of these European nations standing up 
strongly, even in the face of public opinion that is in the 
other direction. The new Turkish government, not fully 
installed yet, went to their parliament and asked and lost just 
by a couple of votes. As you heard yesterday, Mr. Erdogan and 
Turkish general staff leaders said, ``We have to go back to our 
parliament, because it is the right thing to do to support 
America.''
    Senator Leahy. I do not want to make any problem there, 
but, as the administration tells us, they have not yet come to 
the appropriators. We are going to have to come up with that 
$10 billion to back up your bet.
    Secretary Powell. Which $10 billion is that, sir?

                             AID TO TURKEY

    Senator Leahy. Well, you are not offering $10 billion or $5 
billion or some number of billions of dollars in aid extra aid 
to Turkey?
    Secretary Powell. The Turkish aid package was $6 billion in 
grant aid, which could be leveraged up through loans to a 
higher amount. But it was $6 billion. And----
    Senator Leahy. No direct----
    Secretary Powell [continuing]. We were quite aware----
    Senator Leahy. No direct amounts?
    Secretary Powell. Yes.
    Senator Leahy. There will be no direct amounts?
    Secretary Powell. No. I am not sure. It is a $6 billion 
amount, some of which is direct, but some of it could be used 
to leverage loans in order to have more impact on the economy.
    Senator Leahy. I do not want to make your negotiations more 
difficult, but I would suggest that the administration come up 
here and talk to both Republicans and Democrats on the 
Appropriations Committee and make sure that the votes are there 
to support the package that is being promised, and that you are 
not taking this money from other prior, equally critical needs 
that both you and I support in the foreign aid bill; because so 
far, we have not been told where that money is going to come 
from or how it is going to be used.
    There is North Korea, which we all agree poses a major 
threat. I have heard statements made, I happen to agree with 
them, that the last thing in the world we want them doing is 
exporting their rockets or their missiles.
    We spent a fortune to track the shipment of missiles from 
North Korea to Yemen. We show our ability to stop the ship 
carrying it on the open seas. And then we say, ``Oops. Sorry 
about that. Go ahead and take the missiles anyway.''
    And I am wondering if, when people see that, when they see 
officials of the administration referring to our allies as 
``old Europe,'' as though they have not faced war and as though 
they do not have a lot of people who are still alive who have 
lived through war on their soil. Those same officials suggest 
the United Nations could be irrelevant, at the same time the 
President's fiscal year budget says the United Nations serves 
U.S. interests by helping end conflicts, restoring peace, and 
strengthen regional stability.
    I mean, which is it? If the United Nations does not go 
along with everything we ask, do they become irrelevant? Are we 
helped by calling countries in Europe ``old Europe'' in a 
dismissive fashion?

                    RELEVANCE OF THE UNITED NATIONS

    Secretary Powell. Well, first of all, with respect to the 
United Nations, if we thought it was irrelevant, the President 
would not have gone there on the 12th of September. But at the 
same time, the United Nations is in danger of becoming 
irrelevant if it passes resolution after resolution that are 
totally ignored by a country in a situation where that country 
continues to develop weapons of mass destruction.
    If the United Nations Security Council fails to deal with 
this issue, certainly there is a degree of irrelevance then in 
the Council's actions on this particular issue. The United 
Nations is a body that we support. We have done a lot of work 
in the last several years, in the previous administration and 
this administration, to clear up our arrears, to rejoin UNESCO, 
and take a number of other actions that show we understand the 
purpose of international organizations. We want to be 
multilateral with respect to our efforts.
    Europe is not of a single mind on the issue of Iraq. I can 
list more countries that are supportive of our position than 
those that are against our position. The fact of the matter is 
that European public opinion is not supportive of our position. 
But I think the anxiety that exists within the international 
community would be gone in a heartbeat if Saddam Hussein would 
do what he is supposed to do; or, in the aftermath of a 
successful military operation, people will see that we are 
doing the correct thing in removing this dangerous threat from 
the region and from the world.
    With respect to Yemen and North Korea, we are deeply 
concerned about North Korean proliferation and have been for a 
long time. In the case of those particular Scuds, when we 
determined that they were not heading to a terrorist 
organization or a rogue state, but a nation that we have close 
relations with, and the Scuds were part of a contract that had 
previously been entered into, and we had assurances from the 
Government of Yemen that the contract was now concluded with 
this last shipment and we would not have to be worried about 
any further sales from North Korea, it seemed the prudent thing 
to do. I think it was the prudent thing to do, to let the 
shipment continue to its owner, a friend of ours, with 
assurances that that was the end of it and that they were 
discharging any further contractual arrangements they might 
have had or entered into with North Korea.
    Senator Leahy. Other Senators are back now. And I will go 
and vote. But two things: One, I hope their new assurances are 
more accurate than their old assurances.
    Secretary Powell. We did not have old assurances that they 
would not purchase. We have new ones.
    Senator Leahy. And secondly, if we are going to continue to 
be offering money and aid to other countries, come on up here 
and make sure that the Congress will actually back up that 
money.
    Thank you.
    Senator Gregg. Senator Kohl.

                      STATUS OF OTHER ARAB NATIONS

    Senator Kohl. I thank you, Mr. Chairman.
    Mr. Secretary, President Bush has said that ``a new regime 
in Iraq would serve as a dramatic and inspiring example of 
freedom for other nations in the region.'' My question to you 
is: How are other Arab states reacting to our aspirations for 
Iraq to be a model democracy, given that our Arab partners in 
the region are currently not ruled by democratic regimes? What 
sort of message are we sending to the current governments, 
particularly at a time when we are relying on some of them for 
support in our war effort? Are we not implicitly saying, ``You 
are next, and, if necessary, by force''?
    Secretary Powell. No. Our friends and I stay in very close 
touch with them and spoke to several of them this morning, they 
know that we have no intention of forcing the overthrow of 
their regime or leadership, either overtly or covertly. But 
they also know, because the President has said this on a number 
of occasions, and I have said it on a number of occasions, that 
we think that democracy is not something that is just 
exclusively for Western nations. Democracy should be able to 
thrive in Arab nations, as well.
    I think what we will be seeing in the years ahead is that, 
as each Arab nation moves further into the 21st Century, they 
will see the benefits of opening their society up to great 
opportunity for women, educating their children for the kinds 
of jobs that will be needed to be performed in those societies 
in the 21st Century, removing state controls on the economy, 
diversifying their economy, and having more representative 
forms of government.
    We do not shy away from making this case to our friends in 
the region. Now, they press back. They have their own culture, 
their own history, and their own traditions. They have been 
nations far longer than the United States of America. So we 
enter into a spirit of dialogue with them. We think each of 
them will have to find their own way into the future, of 
course. We hope that we can be of assistance to them. We are.
    The Middle East Partnership Initiative that I launched not 
too long ago will try to help them with their education of 
young people for the 21st Century by helping to build up a 
civil society. We have fascinating debates and discussions with 
our Arab friends. We believe that we should say to them what we 
believe with respect to the power of a democracy to help 
transform and better their societies.

                            POST-SADDAM IRAQ

    Senator Kohl. Would it not follow that we then go in and 
disarm Iraq so that they are no longer a threat to us and let 
them set up their own society and do it in a way that most fits 
their own needs and aspirations, much as it is true in Saudi 
Arabia and so on?
    Secretary Powell. I think we would have an opportunity 
here, however, to shape this in a way that we can convince them 
that the best way to set up their new society is on the basis 
of openness, on the basis of representative government, and on 
the basis of pulling the diverse elements of the Iraqi 
population into a form of government that respects each of 
those diverse elements and yet keeps it together as a nation. 
So I think we have an important role to play.
    We will not ignore their history, traditions, and culture. 
We could not, even if we wanted to. It's 24 million people. But 
at the same time, we have some experience over the last 50 to 
60 years of going into countries that have not experienced that 
kind of representative government before and getting them to 
see the benefit of it and leaving them far better off than when 
we went in.
    Senator Kohl. So this might be something akin, not exactly 
like, but akin to what we did in Japan after the war?
    Secretary Powell. I do not think it is going to be akin to 
any of the models of the past. I do not think it is like Japan 
or--we are not going to have a MacArthur there for 7 years or 8 
years or a four power arrangement, as we had in Germany. I 
think each one of these is unique.
    Afghanistan was unique, where we were able to put in place 
an Afghan government rather quickly. There were people standing 
there, leaders ready to lead and lead in the right direction. 
We were able to support them.
    There are other models--East Timor, Cambodia, Bosnia, and 
Kosovo. We are studying all of these models to see what would 
fit best in Iraq. But our overall principle is: If a military 
operation is required, obviously then a military commander has 
to be in charge and would be in charge in the immediate 
aftermath of the conflict for some period of time. We want that 
period of time to be as short as possible.
    As we transition to a civilian administration, we will 
bring in international organizations to help with the 
rebuilding and to help with the funding of the whole exercise, 
bring in responsible Iraqi leaders to create their own 
government, work with both people who have been outside and 
inside of Iraq, and work with the traditional leaders within 
Iraq to put in place a government that does not commit itself 
to weapons of mass destruction and threaten its neighbors, as 
the current government has for the last 30 years.

                    SAUDI ARABIA AND 9/11 TERRORISTS

    Senator Kohl. Last question: Fifteen out of the nineteen 
terrorists on 9/11 were Saudi Arabian in their origins. If we 
are going after countries and obviously not willing to abide 
terrorists or those who sponsor them, where does Saudi Arabia 
fit it?
    Secretary Powell. Saudi Arabia has been a friend of the 
United States for many years and still remains one. We are 
troubled that so many came from Saudi Arabia, and they are 
troubled that so many came from their country. We are working 
with them to put in place a better visa system so we know 
exactly who is coming into the United States. We are also 
working with them on searching out sources of financing for 
terrorist organizations. They have been very cooperative in 
that regard. They realize they have a problem within Saudi 
Arabia if they are serving as a place of gestation for these 
kinds of individuals.
    It is not only a threat to the United States. I think we 
are persuading them that it is a threat to Saudi Arabia as 
well.

                                MADRASAS

    Senator Kohl. But do they not have schools that educate the 
young that----
    Secretary Powell. They have schools that I do not think 
have been organized and are being run in a way that is 
consistent with what their educational needs are for the 21st 
Century. Too often, these schools have been educating 
youngsters in a way that would lead some of these youngsters 
into this kind of activity. That is also a subject of 
discussion with the Saudis.
    They have also been funding those kinds of schools in other 
parts of the world. We are now seeing some of the consequences 
of that and taking it up with the Saudis. In fact, as part of 
our effort with Pakistan, Pakistan is trying to redo its 
educational system, so that the schools exist not as a hotbed 
of extremism, but as a place where youngsters get an education 
so that they can contribute to Pakistan and not become a 
problem for Pakistan or for the world.
    Senator Kohl. Thank you, Mr. Secretary.

                        ISLAMIC CENTER IN TURKEY

    Senator Gregg. Mr. Secretary, I just wanted to follow up on 
Senator Kohl's comments a little bit. First, I would note that 
this committee, under the leadership of Senator Hollings, set 
up the Center for Muslim Western Dialogue in Turkey, the basic 
purpose of which is to try to educate folks in the Muslim world 
about advantages of democracy. And we are continuing to fund 
that aggressively.
    And if the Department has other ideas in this area, we 
would be interested in them. These are the types of initiatives 
we would like to pursue. I think Senator Hollings has set out a 
good course here for us to follow in this committee. We would 
like to increase the effort in that area. So I guess we are 
asking for ideas.

                      ROLE FOR FRANCE AND GERMANY

    Secondly, is the issue of post-Saddam Iraq. France has had 
a very significant commercial relationship with Iraq, which 
they have continued during the period of Saddam Hussein's 
leadership and have taken advantage of that criminal regime 
through commercial activity. I am just wondering: What is the 
proper role for France, and even Germany, in a post-Saddam 
Iraq?
    Secretary Powell. Well, I think it remains to be seen. I 
think that once a new government is in place, it will be up to 
that government to determine how they will use their economic 
resources, their oil, their principal source of revenue, and 
who they will enter into various economic arrangements with. It 
is not for the United States to dictate the future of Iraq. It 
is for us, if we have to have a military operation, to hold in 
trust for the people of Iraq their wealth in the form of their 
oil. It will all be used for the benefit of the people of Iraq.
    But it would seem to me that the people of Iraq, now having 
been liberated, might glance around and see who helped and 
participated in that liberation, and who did not.

                        FRENCH ROLE IN THE CONGO

    Senator Gregg. On a tangential issue, we have spent 
approximately $800 million of American taxpayer money in the 
Democratic Republic of the Congo relative to the U.N. 
peacekeeping mission there, which is primarily being pursued 
under the auspices of France as the lead country and as the 
designer of the policy to some degree. And one has to wonder: 
With the lack of cooperation France is giving us on what we 
consider to be a major national strategic issue, our national 
defense and our right to protect ourselves from weapons of mass 
destruction, to what extent is it appropriate for taxpayers to 
continue to support the French position in the Congo?
    Secretary Powell. I think we have to be very careful if we 
are having a particular problem with one of our friends in one 
area, not to see if we can ``get even'' in another area, where 
it does not serve our interest to get even. In the case of the 
Congo, I think the money that we are using and the efforts of 
the French have started to have a result and pay off.
    For example, Germany, even though we have a major dispute 
with them over the issue of Iraq, Germany has troops in 
Afghanistan standing alongside of ours. They have troops in the 
Balkans. We are cooperating with the Germans in a number of 
areas. They are working with us in the global war on terrorism.
    So we can have strong and serious disagreements. I can 
assure you that these disagreements are fought out with emotion 
and heat in the various conference rooms that I spend a lot of 
my time in, but that does not mean that they are suddenly no 
longer our friends or that the place is a hotbed of anti-
Americanism. We are having a dispute over policy. That dispute 
over policy should not necessarily result in the end of 
friendships that have served us well for long, long periods of 
time.
    Now there may be areas where we have to question whether or 
not we ought to be cooperating with them, because if they took 
this attitude here and that same attitude translates somewhere 
else, then they could affect our equity there. So I do not say 
that we should not look at all we are doing. But, I think any 
suggestion of ``Let us get even with them somewhere else'' in a 
way that hurts us is not necessarily the right policy.

                RENOVATION OF U.N. BUILDING IN NEW YORK

    Senator Gregg. On one item which is coming at us, which is 
a big issue financially, is the request by the United Nations 
to build a new building in New York. I mentioned this to you 
earlier, $1.6 billion for a new building. Now, the 
reconstruction of the World Trade Center, which envisions the 
largest building in the world on that site, along with a 
variety of other memorials, is estimated to be less than $400 
million. The building of the Beijing Embassy, which is going to 
be the most expensive undertaking we have ever pursued as a 
foreign construction project, is projected to cost less than 
$500 million.
    The United Nations is asking for something that exceeds the 
cost of the World Trade Center reconstruction by over $1 
billion. This, on the face of it, seems to be excessive. Now 
maybe it is not. But we would like to get some ideas about 
this, since the taxpayers of America are likely to bear the 
biggest burden of this cost.
    Secretary Powell. Yes. The number I have been hearing is $1 
billion. But it is nevertheless a significant number. There are 
other buildings besides just the U.N. building itself that are 
involved. There are various partnerships that have been entered 
into with the City of New York. This is a very complex project, 
made more complex by the fact that the intent is to rebuild and 
renovate, not just start from a piece of ground. I think that 
very prospect adds a lot to the cost of this project.
    It is a historic place. It is a landmark in New York. The 
rebuilding of that landmark is expensive, but I cannot sit here 
and justify the cost. I am not saying the costs are wrong. It 
is just that I am not in a position to tell you I know enough 
about the costing of that project to defend it.
    Senator Gregg. Well, before we get assessed with an 
arrearage from the United Nations for not participating fully 
in that, I think we are going to have to have some real----
    Secretary Powell. I think the request is for----
    Senator Gregg. Maybe we should ask General Williams to be 
in charge of that.
    Secretary Powell. Well, General Williams and I have spoken 
about it. He is looking at the project, just as a matter of 
interest for me, because sooner or later we will be asked to 
come up with an interest-free loan to help pay for the 
building.
    Senator Gregg. Senator Hollings.

                   COMPENSATION FOR IRANIAN HOSTAGES

    Senator Hollings. I appreciate your answer, Mr. Secretary, 
about the French, because I fought with them in World War II. 
They are outstanding fighters. We have the French and the 
Germans and the Turks with us in Afghanistan. And I hope this 
afternoon you can convince them to rejoin us.
    I have always been concerned about Iranian hostages. On May 
22, 2002 you said a plan for compensation would soon be 
submitted. Can we count on getting that plan from you?
    Secretary Powell. I will have to research with my staff, 
sir, and give you an answer for the record.
    Senator Hollings. Yes. Because we have your letter, and you 
stated that on May 22, 2002 that a comprehensive plan for 
compensation would be forthcoming.
    Secretary Powell. Yes. I will try to find out. Obviously, 
it has not been forthcoming. So I will try to find out the 
status of it and get an answer for you.
    Senator Hollings. Very good.
    Secretary Powell. I may have it now. I do not know.
    Senator Gregg. Maybe it just arrived.
    Senator Hollings. It just arrived.
    Secretary Powell. Yes. It is out of my office.
    I know where it is. I will go ask the Director of this 
Office of Management and Budget why it is still there.
    Senator Hollings. Yes. Well, you have quite a task. And we 
appreciate it very much.
    Thank you, Mr. Chairman.
    And thank you, Mr. Secretary.
    Secretary Powell. Thank you, Senator.
    Senator Gregg. Senator Kohl, do you have any additional 
questions?

                        SITUATION IN NORTH KOREA

    Senator Kohl. Just one.
    Mr. Secretary, I and others have been very concerned about 
reports that the United States is prepared to live with a 
nuclear North Korea and that we intend to shift our focus on 
preventing the North Koreans from exporting nuclear weapons to 
other countries. I agree that we need to do all we can to 
prevent North Korea from exporting weapons of mass destruction; 
but I believe that we should not back down from our efforts to 
forestall North Korea from developing nuclear weapons in the 
first place.
    So in that area, why have we decided, or have we decided, 
not to talk to them directly? Is this not the best way to get 
to the bottom of it while at the same time encouraging other 
countries to be a part of the effort?
    Secretary Powell. Well, first of all, I read that report. I 
do not know of any basis for the report, that we have decided 
to live with a nuclearized North Korea.
    The position of the United States is: We do not want to see 
nuclear weapons in the Korean Peninsula. It is also the 
position of China. It is also the position of Japan and South 
Korea. In fact, South Korea entered into an agreement with 
North Korea a little over 10 years ago that guaranteed a non-
nuclear Korean Peninsula, yet another agreement that North 
Korea has violated.
    We are working with all of our friends in the region to see 
that North Korea does not become nuclearized or even more 
nuclearized than it may be, because our intelligence suggests 
they may have one or two nuclear weapons. Some say they do have 
one or two nuclear weapons. We will not know until we actually 
find a way to confirm that.
    So we are working hard to see that they do not move any 
further. Our concern right now would be if they started up the 
reprocessing facility. They have been acting in provocative 
ways. They have been trying to get our attention. We are not 
unmindful of these efforts on their part to get our attention.
    But we are making it clear to the North Koreans that we do 
want to talk, but we want to talk in a multilateral forum. Why 
do we want to do that? Because it is not just a problem between 
the United States and the DPRK. That is the way they want to 
see it. It is a problem with the DPRK and the international 
community and with the DPRK and the International Atomic Energy 
Agency, which has condemned them for breaking the seals and 
moving in the direction to restart the reactor. It is a problem 
between the DPRK and South Korea for violating their agreement 
with South Korea. It is a problem between the DPRK and Japan, 
China, Russia, and many other nations.
    Therefore, we are looking for a multilateral way to deal 
with this problem. Now, every time I pick up the paper in the 
morning, it says a quick solution is, ``Why do you not just 
call them up and go talk to them?'' Well, that is what happened 
some years ago when we came up with the Agreed Framework. The 
Agreed Framework served a useful purpose in capping the 
Yongbyon facility so that it was not producing any more 
fissionable material. I give credit to the Agreed Framework for 
having done that for eight years.
    But at the same time, the potential for developing 
fissionable material was left in place at Yongbyon by the 
Agreed Framework. As the ink was drying on the Agreed Framework 
and a number of other assurances that the North Koreans gave 
us, they had started work on another form of enrichment, 
enriched uranium, to produce the material needed for nuclear 
weapons.
    While we thought we had them, you know, in one jug with a 
cork in the jug, even though the jug was left there to be 
uncorked, they were working on another jug. We found out about 
it last year. We did the right thing; we called them to 
account.
    We said, ``We know you are doing this. This is in violation 
of all the commitments you have made over the years to the 
South Koreans and to the international community. It is in 
violation of the Agreed Framework, the basic intent of the 
Agreed Framework.''
    Their response was, ``Yes, we did it. Now come talk to us, 
and we will see what kind of framework we can come up with this 
time.''
    Well, what we are saying is: This time it has to be solved 
for good. It will only be solved for good if it involves all of 
the nations who are in the region. North Korea has tried to, 
through its provocative steps over the last several months, get 
the attention of the world on this issue and get the attention 
directed toward us. The attention should be directed toward the 
North Koreans. They are the ones who have people who are 
starving. Not one person will be saved by enriched uranium or 
by more plutonium coming out. They have blown the opportunity 
they had to get enormous assistance from Japan by their 
actions.
    We have a number of diplomatic initiatives underway, some 
of them very, very quietly underway, to see if we cannot get a 
multilateral dialogue started. We are looking for a peaceful 
solution to this problem. We are committed to a non-nuclear 
Korean Peninsula.
    Senator Kohl. Thank you, Mr. Chairman.
    Senator Gregg. Thank you, Mr. Secretary. I appreciate you 
taking the time.
    Well, we have been joined by the chairman of the full 
committee. So obviously we defer to the chairman of the full 
committee for any questions he may have.

                        SENATOR STEVENS' REMARKS

    Senator Stevens. No questions for my good friend. I am 
happy to have a chance to be here and to tell the world what a 
great job I think you are doing, Mr. Secretary.
    Secretary Powell. Thank you, Mr. Chairman.
    Senator Stevens. I look forward to working with you in any 
way possible.
    Secretary Powell. Thank you, sir. I was up at Elmendorf the 
other day. It looked great up there.
    Senator Stevens. Well, the next time we will arrange a site 
trip around the State, maybe do a little marine research.
    Secretary Powell. Yes, sir. I know the kind you have in 
mind. I look forward to it.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Gregg. Mr. Secretary, we will let you get up to the 
United Nations. And thank you again for what you are doing for 
the country.
    Secretary Powell. Thank you for your courtesy, Mr. 
Chairman.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Judd Gregg

                    DIPLOMATIC READINESS INITIATIVE

    Question. Could you walk us through the methodology State used to 
arrive at the numbers for the Diplomatic Readiness Initiative? What 
internal review process took place to determine where additional 
personnel were needed? Why, during this internal review process, wasn't 
the Department also able to identify posts that were overstaffed for 
right-sizing? If such a review took place, why has the Department been 
unable to tell the Committee where exactly the new FSOs will be placed?
    Answer. The Diplomatic Readiness Initiative (DRI) addresses many of 
our core needs, some of which are determined by our Overseas Staffing 
Model (OSM) and training requirements. The Overseas Staffing Model is 
the primary tool for determining baseline overseas staffing needs. It 
provides an objective, flexible tool to measure what resources are 
needed to meet the President's and the Secretary's foreign policy 
priorities and objectives. The OSM quantifies what we need to achieve 
the International Affairs Strategic Goals, to meet legislative 
mandates, and to fulfill our responsibilities to support the full USG 
presence overseas. This model, made up of seven components (``core 
program,'' consular, public diplomacy, etc.), identifies the staffing 
requirements at overseas posts based on specific categories and 
criteria and provides a comparative assessment of posts. It evaluates 
each post using workload indicators and host country factors. The OSM 
serves as a baseline and specific staffing decisions are made through 
the budget and planning process. The OSM showed in 2001 that we had 
needs expressed as 386 positions overseas that were not being met. The 
DRI request for 1,158 positions covered this shortfall.
    In addition, we determined we needed to be able to meet other needs 
without straining our workforce. In order to have people in training 
and to avoid staffing gaps when transfers and crises occur we need 
enough people in the system. The remaining DRI positions are to cover 
establishment of long-term training positions (such as for languages) 
or detailee positions--to which employees are assigned--as well as to 
increase our base level of employees. While we need more people to meet 
crisis response and emerging priority needs, we do not have people in 
positions designated as ``waiting'' for that crisis to occur; rather, 
we planned to use new DRI positions to meet those policy, program, or 
infrastructure support needs identified by the Department during our 
budget and financial plan cycle. The increases to overall staffing 
would reduce the strain when employees were sent to short term training 
(such as under our new mandatory leadership and management training 
initiative) or when they needed to be reassigned to higher priorities. 
The DRI therefore is about flexibility and preparedness rather than 
specific position-by-position detailed needs. This is also partly due 
to the nature of the Foreign Service system of ``people in motion'' 
rotating between positions as well as the inherent unpredictability of 
foreign affairs.
    The Department's senior leadership makes final decisions on the 
Department's staffing requirements, hiring plans, and position 
allocation based on emerging priorities, funding potential, Overseas 
Staffing Model projections as well as the Senior reviews led by the 
Deputy Secretary. This ensures that staffing decisions are made in 
support of mission requirements. The strong linkage between strategic 
priorities and resource decisions--with senior management involvement--
ensures the Department's ability to meet our mission. The exact 
allocation of the new positions created in fiscal year 2004 will depend 
on the results of those decisions.
    While the OSM identified that overseas staffing was below what is 
required, this does not mean that we have not identified places where 
staff can be reallocated. ``Rightsizing'' is an ongoing process. The 
Department continually reviews changing priorities and emerging issues 
and reallocates positions among regions or between functions so that 
higher priority needs are met. During the 1990's, as the Department 
downsized its employment, the necessity to reallocate scarce resources 
in line with priorities became paramount. Oftentimes, people were 
pulled to address new issues while old ones still existed. In our 
strategic planning and budgeting process we require missions to assess 
how they could meet their new needs within existing resources.
    Now, thanks to increased hiring, posts and regional bureaus have 
been able to move resources to meet the priority counterterrorism 
mission while still continuing to staff other critical requirements. As 
we have added positions overseas in the last few years, we have 
increased infrastructure across the board so that posts are not as thin 
as they had been, but more positions have gone to posts in the Middle 
East and South Asia.

                     PERSONNEL PLACEMENT DECISIONS

    Question. Have the events of September 11, 2001 impacted personnel 
placement decisions? In other words, has the list of posts slated to 
receive personnel increases changed in light of September 11?
    Answer. Post September 11 the Department immediately reprioritized 
and moved people and resources to meet the emerging counter terrorism 
mission. New positions were established based on the new needs being 
identified, particularly in the consular area. These needs are likely 
to become permanent needs that will have to be regularized and will 
need to be treated as a baseline requirement.
    We have had to use some of the Diplomatic Readiness Initiative 
(DRI) positions to cover new consular needs in the wake of 9/11 when 
the workload went up even as MRV fee revenues--which have funded many 
consular position increases--went down. We have also had increased visa 
processing requirements that have increased workload while we have also 
worked to ensure that we have fully trained commissioned Foreign 
Service Officers in all positions. In the short run we have had to meet 
these new requirements within our current workforce. These requirements 
will need to be met continuously, but the original DRI did not envision 
these changes.
    Baghdad is being staffed now by TDY employees from other embassies 
and the Department. The staffing gaps left behind may be acceptable in 
the short run, but for the longer term they must be filled. In 
addition, we must account for the Washington backup of these new 
programs, such as the new office supporting the reconstruction of 
Afghanistan.
    Even though we had to use some DRI positions for these unexpected 
contingencies, we still need the personnel complement foreseen by DRI 
to make training and future crisis response possible.

                           CONSULAR OFFICERS

    Question. Mr. Secretary, your budget request includes an increase 
of $28 million to hire an additional 68 Consular Officers. Why was this 
not included as part of the Diplomatic Hiring Initiative request?
    Answer. The Diplomatic Readiness Initiative (DRI) request was 
introduced as a three-year plan by Secretary of State Powell in 2001 to 
fill gaps created by underhiring in relation to workload in the 1990's. 
The DRI addresses many of our core needs, some of which are determined 
by our Overseas Staffing Model and training requirements. However, some 
personnel requirements are assessed and resources requested separately 
such as security, IT, and consular, which tend to have specific needs 
due to outside events. The DRI request did not take into account the 
additional requirements that would follow from the events of September 
11th. Currently, the Department is assessing future personnel needs 
taking into account the long-term needs of the Department, to include 
the implications following the events of September 11th.
    The 68 CA positions that are referenced in the question represent 
new positions not originally contemplated in the DRI. These positions 
will be used to replace temporary consular associates with full-time 
consular officers. This is a critical element in the Department's' 
efforts to support homeland security initiatives.
    Additionally, Consular positions have traditionally been funded 
through the MRV fees collected by the Department. Post September 11, 
travel has decreased and therefore so has MRV income. This means that 
we need to request appropriated funds for these additional personnel 
requirements.

                              RIGHT-SIZING

    Question. What progress has the Department made towards right-
sizing? Can you tell me where, for example, the Department has actually 
decreased the number of U.S. personnel stationed at a post? Could you 
have your staff transmit a list of the Department's right-sizing 
``success stories?''
    How do you reconcile the DRI with the concept of rightsizing? How 
does the Department justify bringing on 1,158 new FSOs when it has yet 
to maximize its existing human capital by carrying out its commitment 
to right-size overseas posts?
    Answer. The Department of State and the Office of Management and 
Budget (OMB) agree with the General Accounting Office's definition of 
rightsizing:

    ``Rightsizing [is] aligning the number and location of staff 
assigned overseas with foreign policy priorities and security and other 
constraints. Rightsizing may result in the addition or reduction of 
staff, or a change in the mix of staff at a given embassy or 
consulate.''

    The Department uses a variety of tools to rightsize its overseas 
presence, as described below. Our rightsizing is one component of the 
broader President's Management Agenda (PMA) rightsizing initiative, led 
by OMB, which looks at all agencies with overseas staffing. We are 
working closely with OMB to ensure the success of the overall PMA 
initiative.
    Diplomatic Readiness Initiative.--The DRI is an integral part of 
State's rightsizing, i.e., it addresses fundamental staffing needs to 
reverse the trend of the early 1990s when we hired under attrition. We 
need these positions to fill unmet needs overseas and to provide for 
enough personnel to respond to crises and go to training without 
leaving staffing gaps.
    Overseas Staffing Model.--The OSM is our workforce planning tool 
that assists management in allocation of resources, including those 
needed to support the USG diplomatic platform. The OSM provides an 
objective, flexible tool to measure what resources are needed to meet 
the President's and the Secretary's foreign policy priorities and 
objectives.
    Strategic Planning and Human Resource Allocation Processes.--The 
Mission Performance Planning (MPP) process integrates strategic human 
capital planning elements into the planning process with the 
categorization of staffing and funding resources by strategic goals, as 
required by the Government Performance and Results Act (GPRA). This 
enables each mission's senior management to assess the commitment of 
human resources across the strategic goals, and also assists State 
regional bureaus to better distribute State Operations and Foreign 
Operations funding across the strategic goals.
    Regionalization.--The Department of State has long made extensive 
use of regional offices to help us meet the needs of difficult or 
dangerous posts. Regional centers exist in the United States (e.g., 
Charleston, South Carolina; Fort Lauderdale, Florida; Portsmouth, New 
Hampshire), at major overseas hubs (e.g., Frankfurt, Bangkok), and at 
smaller sub-hubs on an ad hoc basis (e.g., Dakar, Hong Kong). Regional 
support provided from these centers allows the Department to accomplish 
a variety of complementary goals, including improving the overall 
efficiency of our global operations, supporting specific posts which 
could not otherwise operate effectively, and reducing the burden of 
workload, and thus staffing, at many of our most dangerous or difficult 
overseas posts. The Department is constantly reassessing the specific 
needs of particular posts and adjusting regional support accordingly.
    In addition, the Department has underway a number of initiatives 
designed to apply the benefits of continuing technological improvements 
to rightsizing. One prominent example: By the end of this fiscal year, 
the Department will complete the transfer of significant financial 
management support operations from Paris, France to Charleston, South 
Carolina, as a result reducing 109 positions in Paris.
    This action was made possible by improvements in our financial 
management systems software. We now have one overseas accounting system 
that replaces the two former legacy systems that complies with Federal 
Managers' Financial Integrity Act (FMFIA) requirements and facilitates 
the compilation and reporting of data for the Department's financial 
statements. With further enhancements, posts in Europe, Africa, the 
Near East and South Asia will be able to communicate and conduct 
certain financial operations electronically, with ``real time'' access 
to financial systems. These management actions reduced the need to 
maintain overseas staff at the Financial Service Center in Paris to 
support these posts and reinforced the decision to consolidate many 
financial operations in Charleston.
    Post Openings and Closings.--Rightsizing affects not merely the 
size of U.S. posts but also their distribution. Perhaps the best 
illustration of the Department's ongoing rightsizing efforts is the 
near-constant activity to open, close and relocate overseas diplomatic 
posts. Since 1990, we have opened 52 new posts (29 embassies, 23 
consulates, consulates general, branch offices, etc.) and closed 43 (11 
embassies, 32 consulates, etc.).

                          EMBASSY CONSTRUCTION

    Question. Mr. Secretary, what impact has 9/11 had on the way the 
Office of Overseas Buildings Operations approaches designing and 
building embassies abroad? Do you think the lessons of 9/11 were that 
we need to build more heavily fortified embassies? Or, do you believe 
that 9/11 demonstrated that we simply cannot build buildings that are 
100 percent secure and must therefore look to mitigate the threat in 
other ways (such as better deterrence and prevention)?
    Answer. The watershed event that reshaped the mission of the Bureau 
of Overseas Buildings Operations was the August 1998 bombings of our 
embassies in Dar Es Salaam, Tanzania, and Nairobi, Kenya. The events of 
9/11 served to reinforce the continuing threat and therefore the urgent 
need to accelerate the construction of new facilities that can satisfy 
the Department's stringent security requirements and protect our 
diplomatic personnel by providing secure, safe, and functional office 
and residential environments. We appreciate the support the Congress 
and this Committee have given to our efforts.

                              SOFT TARGETS

    Question. Mr. Secretary, does the possibility of further and 
perhaps more ambitious attacks against post housing, churches 
frequented by Americans, and American Schools concern you as much as it 
does me?
    I would not suggest that we should shift resources away from the 
security of our official buildings in favor of enhancing security at 
non-official locations. However, we must do more to assure the safety 
of overseas personnel outside the embassy walls. Above all, we must 
assure the safety of our children in their schools overseas.
    What do you believe is the State Department's proper role in this 
area? What level of responsibility should State bear for the security 
of non-official locales? Based on the risk and threat assessments that 
have, presumably, been conducted on these non-official locales, do you 
believe they/we are prepared? When can we expect the $15 million 
provided in the fiscal year 2003 Conference Report to start being 
distributed? Do you believe additional funds are necessary to protect 
U.S. personnel and their families in ``soft target'' environments?
    Answer. The possibility of attacks against soft targets overseas 
most certainly concerns me. However, there exist many more soft targets 
overseas where Americans gather than the U.S. government could ever 
possibly protect. I believe we must pursue a dual strategy. First, 
identify those soft targets that are readily identified with, and in 
some way connected to, U.S. Diplomatic facilities abroad. Housing for 
our employees overseas and schools supported by our missions certainly 
fit in this category, and it is appropriate that Congress has provided 
funding to mitigate security vulnerabilities in those areas. We should 
recognize, though, that in the latter case, a great many other children 
attend as well, American and non-American. Normal security costs should 
be borne by all that attend and be reflected in tuition costs. Our role 
for the schools should be to provide security advice and counsel, and 
to provide grants for high priority security upgrades such as window 
films, emergency public address systems, and communications with 
Embassies and local police and security.
    To ensure that the $15 million provided in the fiscal year 2003 
Conference Report, as well as the additional $10 million in the 
Supplemental, is distributed wisely, the Department has a working group 
with officers from the bureaus of Overseas Buildings Operations, 
Diplomatic Security, and the Office of Overseas Schools. We expect that 
funding may be provided to some schools prior to the end of the fiscal 
year, and continue over a 3-year period.
    For the many, many other possible soft targets, I believe our 
continuing responsibility, and a role that we fulfill very well, is to 
provide timely and accurate advice that fits the local situation. We 
fulfill this responsibility every day with Consular information 
bulletins, Overseas Security Advisory Counsel (OSAC) local country 
counsels, Regional Security Officer briefings, and other outreach 
programs.
    Question. How has the Consular Affairs mission changed in the 
aftermath of 9/11? Would you agree that the mission your consular 
officers perform is vital to our national security? What are the pros 
and cons of the Department's tradition of requiring new Foreign Service 
Officers to serve their first tour in Consular Affairs? Do you think 
this policy has contributed to creating a culture at State where CA 
officers are second class citizens? Do you agree that Consular Affairs 
is a sufficiently important component of the Department's mission that 
it should be staffed by career FSOs, rather than by novices?
    In my visits to U.S. embassies abroad, I have noted that it is 
often the Consular Affairs sections where conditions are the worst 
(most crowded, etc.). In my view, there is a direct link between the 
quality of CA workspace and the productivity and efficiency of our 
consular officers. Would you agree with this? What are you doing to 
change this situation?
    Answer. The work of Consular Affairs is a vital element of our 
country's overall plan to protect our national security. As part of our 
border security program, we have made significant changes in the wake 
of 9/11. We have expanded our automated lookout system to include more 
information shared with us by other government agencies and increased 
the number and type of special clearances required for applicants of 
particular concern. Our automated system now requires that we collect 
additional information on all visa applicants. And we are limiting the 
circumstances in which a personal appearance can be waived for visa 
applicants. All of these changes require additional personnel, and we 
have created additional positions to help meet this workload.
    The Department's traditional policy of requiring all junior 
officers to serve a tour in a consular assignment abroad has benefits 
for both the officer and the Department. The officer has an early 
opportunity to develop management skills, demonstrate leadership, and 
hone interpersonal and foreign language skills. For the Department, the 
Junior Officer's consular tour can be a chance to see how the officer 
performs in a difficult situation, dealing with both American and 
Foreign Service National (FSN) colleagues as well as with often 
demanding host country nationals. The officer's performance in the 
consular tour is a vital factor in determining whether the officer 
should be tenured in the Foreign Service.
    Junior Foreign Service Officers (FSOs) have gone through a rigorous 
examination process to arrive at this point. In addition to the 
consular training at the Foreign Service Institute, which has recently 
been expanded, they bring a wealth of academic and real world 
experience to their jobs. They are dedicated and motivated 
professionals who take their role in protecting homeland security 
seriously. Our junior officers are closely supervised by more senior 
career consular officers. At posts staffed by only a single consular 
officer, the Deputy Chief of Mission takes on the supervisory role and 
an experienced regional consular officer visits the posts regularly to 
provide management oversight and advice for the consular function.
    The consular cone is one of five career tracks for Foreign Service 
generalists. All Foreign Service generalists have the opportunity to 
serve in positions out of cone to broaden their experience and to 
compete for positions such as Deputy Chief of Mission.
    It has often been difficult for the physical facilities in our 
consular sections abroad to keep pace with the increasing numbers of 
personnel, both Foreign Service Officers and Foreign Service Nationals, 
required by the visa process, which has become even more complex in the 
post 9/11 world. The employees engaged in this vital work deserve 
working conditions that are secure, safe, and adequate for the job.
    Our Bureau of Overseas Buildings Operations (OBO) has embarked upon 
an ambitious building program to complete new embassies on time and 
within budget. The Bureau of Consular Affairs works closely with the 
designers and planners at OBO to ensure that consular sections in new 
embassy buildings are adequate to permit an efficient and effective 
consular operation. CA and OBO continue to work together to refine the 
standards for consular sections now being designed. OBO and CA also 
work collaboratively in the rehab of facilities to permit consular 
sections to be rehabbed along with other parts of the buildings. In 
order to react more quickly to fluctuations in consular workload, OBO 
is also looking at acquiring commercial space for consular sections. In 
the fiscal year 2003 appropriation, Congress directed OBO to undertake 
a 3-year Consular Workspace Improvement Initiative, earmarking up to $8 
million of OBO funds for this purpose. CA has worked closely with OBO 
to prioritize these projects.
    Question. Mr. Secretary, protecting information at our posts 
overseas is costly. If we had the technological capability to store 
information in the United States, rather than at post, wouldn't this be 
worth looking into? Would you agree such a technology could reduce the 
number of overseas personnel required to assure the security of 
information, and thus result in cost-savings?
    Answer. For the past two years, the Department of State has been 
exploring the technological capability to store information in the 
United States rather than at our overseas posts.
    We are also studying the implementation of the High Assurance 
Virtual Wide Area Network (HA VWAN) which will provide classified 
connectivity to critical threat posts and to posts that have 
environments with weak physical, administrative or technical security 
controls. This program would reduce classified holdings. A pilot on 
this technology will commence in Summer 2003.
    But at the core of my Information Technology priorities is to 
replace the current 60-year-old ``cable'' technology used by the 
Department and other Foreign Affairs Agencies with a new system. This 
new technology called SMART (State Messaging and Archive Retrieval Tool 
Set) will provide centralized storage in the United States of all 
document types (currently cables, memorandum, informal messages and 
notices).
    It will give our diplomats access to more information and minimize 
the holdings at a post because posts will access data from a server in 
the United States. We expect to deploy SMART in fiscal year 2005.
    While SMART will provide some reduction in classified holdings, we 
will need to continue to ensure the protection of the information and 
equipment that remains at post.
    However, we cannot guarantee, at this time, that there will be a 
reduction in the number of overseas personnel required to maintain, 
operate and ensure the integrity of our information stored overseas. 
Existing Marine Security Guard requirements would not be affected.
    Our Information Specialists safeguard and are responsible for the 
classified network infrastructure including encryption, COMSEC, and 
other classified network components that must be maintained and 
protected.
    The mandated duties of our Information Systems Security Officers 
(ISSOs) will not decrease significantly. While compliance and reporting 
requirements have increased in recent years, posts are not yet staffed 
properly to meet those new requirements. A restructuring of the duties 
of Information Specialists at overseas posts would enable the 
Department to better meet these reporting responsibilities.
    Question. I understand that the estimated cost of renovating the 
U.N. headquarters complex in New York City is $1.6 billion. Mr. 
Secretary, the design for the World Trade Center site (encompassing a 
museum, and opera house, a mall, and five office buildings, one of 
which will be the tallest building in the world) is expected to cost 
only $350 million. How is it possible, then, that the cost of 
renovating the U.N. headquarters is $1.6 billion?
    A reasonable person would expect that security of the new World 
Trade Center site would be as robust as any building complex in New 
York City. The cost of the new U.S. embassy compound in Beijing, China 
is expected to be $438 million. Surely the cost of security at the U.N. 
complex in New York City will not exceed our security costs in China by 
$1.2 billion. Can you explain this?
    Answer. As the design phase of the U.N. Capital Master Plan 
progresses, the Department remains in regular contact with U.N. 
secretariat officials to monitor closely the cost estimates and 
assumptions of the project to ensure that they are realistic and 
reasonable. Also, the General Accounting Office has just completed an 
updated study on the project--including the issue of cost estimates--
and we urge you to examine the conclusions of that report when it is 
released shortly.
    The cost components of the U.N. Capital Master Plan, as currently 
estimated, are as follows:
  --Baseline cost: $1.05 billion, including rental of swing space; and
  --``Scope options,'' related to additional security, energy 
        efficiency, and system contingencies: $150 million, assuming 
        all were to be included in the final design.
  --In addition, as part of the overall plan, the U.N. Development 
        Corporation--a public benefit corporation of the State and City 
        of New York--has proposed to construct a new office building 
        just south of the existing U.N. compound which would be used as 
        swing space during the renovation of the existing U.N. 
        facilities (permitting all staff to relocate and allowing the 
        renovation work to proceed all at once, thus reducing costs) 
        and ultimately to consolidate U.N. staff currently housed in 
        several rental buildings off the U.N. compound, with no added 
        costs to the United Nations.
    Security is a vital component of both the Beijing Embassy compound 
as well as the U.N. headquarters facilities. However, security elements 
do not represent the majority of the cost factors for either project. 
It is very difficult to compare these two projects, as they serve 
considerably different purposes. For the Beijing compound, our Office 
of Overseas Building Operations is working with a budget of $434 
million and is designing facilities to accommodate 846 staff as well as 
consular operations. The U.N. headquarters complex will continue to 
accommodate the needs of 191 U.N. member states and approximately 4,700 
U.N. staff. The existing U.N. facilities do not conform to current 
safety, fire, and building codes and do not meet U.N. technical or 
security requirements.
    The Department is not involved in the redevelopment of the World 
Trade Center (WTC) site and would refer you to the New York City 
Economic Development Corporation for the actual figures relating to 
that redevelopment project. We understand, however, that the total 
costs for the redevelopment will be significantly higher than the $350 
million figure, which we understand may only represent an estimate for 
the cost of the World Trade Center Memorial (as distinct from the 
facilities cited in your question).
    Question. The fiscal year 2007 State Department Appropriations Bill 
required the Secretary of State to notify Congress 15 days before the 
United States votes in the U.N. Security Council to establish or expand 
a peacekeeping mission. Mr. Secretary, since we have to fund these 
missions, do you believe Congress should have a more formal role in the 
decisions leading up to the Security Council votes? Wouldn't this 
lessen the need for Members of Congress to place ``holds'' in order to 
effect change in these missions?
    Answer. Pursuant to legislation, the Administration provides 
monthly briefings to Appropriations and Authorization Committee staffs 
on current and prospective peacekeeping missions and information 
related to expenditures from the Contributions to International 
Peacekeeping Activities (CIPA) appropriation. The Administration also 
provides formal Congressional notifications for proposed votes in the 
U.N. Security Council for new or expanded missions. We believe 
information provided provides sufficient information to permit the 
Appropriations Committees to exercise its Constitutionally-required 
responsibilities.
    Question. At the hearing, I raised the point that the American 
taxpayers have contributed more than $800 million to the U.N. 
peacekeeping mission to the Democratic Republic of the Congo. This 
mission is very important to France, and the United States has 
cooperated with the mission in every way. The Iraq resolution was 
important to the United States, and yet French negotiators took every 
opportunity to undermine U.S. efforts towards that end.
    Mr. Secretary, you indicated in your testimony that we should not 
break ties with our allies in one area merely because we are in 
disagreement with them in another area. Do you not support the concept 
of issue-linkage? Would you agree that issue-linkage is one of our most 
important diplomatic tools?
    If, in the case of the Congo peacekeeping mission, you believed 
that continued U.S. participation was vital to U.S. national interests, 
could you give me other examples of where the United States employed 
issue-linkage to try to elicit greater cooperation from the French (and 
Germans) in the U.N. Security Council negotiations over an Iraq 
resolution?
    Answer. The United States supported establishment and continuation 
of the U.N. peacekeeping mission in the Democratic Republic of the 
Congo, and requested funding to pay for our portion of U.N. 
peacekeeping assessments, because we believed, and continue to believe, 
that MONUC can contribute to restoration of stability in this critical 
African nation, which can help remove this destabilizing factor in 
Central Africa. You are correct that support to MONUC was an issue of 
high importance to France, but it is also an issue of high importance 
to the United States.
    As I have said publicly, France's intransigence in the United 
Nations Security Council on a resolution to follow UNSCR 1441 has 
consequences for our future relationship. There will be issues of 
special importance to France where we will seek to get their attention, 
but we should not fail to act on issues of manifest interest to the 
United States.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

    Question. Late last congress, I joined with Senators Biden and 
Lugar in sponsoring the ``Nuclear and Radiological Threat Reduction 
Act.'' This legislation would authorize the Secretary of State to take 
specific steps to prevent the use of dirty bombs as a terrorist weapon. 
It is my understanding that this bill is likely to be introduced again 
this Congress.
    Also in the 107th Congress, the Senate passed my legislation 
authorizing the National Nuclear Security Administration to take the 
lead in the Department of Energy's strategy for combating radiological 
terrorism. Enhanced technology, mitigation systems and international 
cooperative efforts are a few of the mechanisms prescribed by my bill 
to better safeguard nuclear materials that are being sought by 
terrorists.
    In addition, my bill, which is now law, calls for greater 
coordination between all Federal departments and agencies with 
responsibilities for nonproliferation.
    Given the significant roles of both the State and Energy 
Departments in addressing issues of nonproliferation, I believe there 
is opportunity for tremendous synergy between them in addressing the 
problem of nuclear terrorism.
    Would you offer your thoughts about how the Department of State and 
the Department of Energy can more effectively coordinate efforts so as 
to maximize our progress on this issue?
    Answer. In combating radiological terrorism, coordination between 
the Department of State, NNSA and other agencies has improved regarding 
the detection of illicit nuclear and radioactive materials. Working 
with NNSA, the Department of State has taken the lead with NNSA/Second 
Line of Defense (SLD) in organizing an inter-agency effort by the 
Department of Homeland Security, State, Energy and the Department of 
Defense to develop a strategy for assisting key countries overseas in 
their detection of illicit nuclear materials. NNSA/Second Line of 
Defense assisted greatly in the drafting of an USG interagency 
strategic plan for provision of radiation detection equipment, which 
provides an action plan and performance measures to guide our efforts 
on this key anti-terrorism/nonproliferation initiative.
    State and NNSA are also executing a joint plan for maintaining, 
repairing and replacing radiation detection equipment the USG has 
provided to foreign countries in recent years. In 2002-2003, this 
program, using SLD assets, was very successful in performing required 
maintenance and re-training in several countries where equipment has 
been in active use for some time.
    Yet much remains to be accomplished in terms of denying terrorists 
access to high-risk radioactive sources. With your help, NNSA has made 
a good start on securing these sources. As you have stated, there is 
indeed an opportunity for tremendous synergy between the Department of 
State and NNSA.
    We believe that a diplomatic solution is the key to a meaningful 
long-term solution. The security of radioactive sources depends on 
convincing states to change the fundamental ways that they manage and 
secure sources. Governments must agree, and be committed, to secure 
high-risk radioactive sources and keep them secure throughout their 
life cycle. The Department of State has a history of engaging foreign 
governments at the highest levels to secure these types of commitments.
    More broadly, we are using the Nonproliferation and Disarmament 
Fund (NDF) to tackle tough, urgent and often unanticipated problems on 
a worldwide basis. We expect that NDF in the future could be used to 
help countries develop infrastructures to secure radioactive sources 
and track dangerous materials, including through the NDF's existing 
``Tracker'' automated software system that helps governments strengthen 
control over sensitive exports. We hope that requested fiscal year 2004 
increases in NDF funding will support the Department's Dangerous 
Materials Initiative (DMI) to secure radioactive materials, pathogens 
and sensitive precursors. DMI aims for synergies among U.S. Government 
agencies and programs and also with international partners.
    We believe that an ongoing dialogue between NNSA and the Department 
of State, along with other relevant agencies, is necessary so that 
technical and diplomatic efforts can be combined to ensure that high-
risk radioactive sources are secured over the long term.

                   RUSSIA AND IRAN'S NUCLEAR PROGRAM

    Question. I remain concerned about Iran's drive to obtain a nuclear 
capability. Despite its claims to the contrary, Iran's construction of 
new nuclear facilities along with announced plans to mine uranium point 
to its growing ambition to advance a nuclear weapons program.
    Russia's technical assistance to Iran's nuclear program has been a 
source of frustration for the United States. It has hastened Iran's 
efforts while slowing development of the new strategic partnership 
between Russia and the United States.
    It is my understanding that State Department officials were 
recently in Moscow to discuss arms control issues in general and the 
Iranian nuclear matter specifically.
    Can you report on the substance of those discussions? Do the 
Russians share our concerns about the prospects of a nuclear-armed 
Iran? Have they indicated a willingness to consider terminating their 
support of the Iranian program?
    Answer. We raise the subject of ending Russian nuclear cooperation 
with Iran at every opportunity with senior Russian officials.
    In these meetings, the Russians have professed to share our concern 
about the prospects of a nuclear-armed Iran. And recent revelations 
about the extent of the Iranian program to develop nuclear weapons have 
been very useful in making clear to Moscow that Tehran is indeed 
pursuing this objective.
    We appear to be making some progress in our discussions in curbing 
Russia's nuclear cooperation with Iran. The Russians have agreed to 
some measures that mitigate the nonproliferation risks of their 
cooperation--such as providing fuel for the lifetime of the Bushehr 
reactor as well as taking back all the spent fuel to obviate any 
rationale for Iran to develop fuel cycle facilities.
    Much remains to be done, however. We continue to press the Russians 
to agree to end all their nuclear cooperation with Iran and more 
effectively prevent Russian entities from cooperating in other 
sensitive areas such as missile technology.

                         ANTITERRORISM TRAINING

    Question. Mr. Secretary, I have just joined with Congressman Steve 
Pearce and Senator Bingaman in a letter to you to urge that the 
Department reinstate two anti-terrorism training programs at the New 
Mexico Institute of Mining and Technology in Socorro, New Mexico. At 
the end of last year, the State Department notified New Mexico Tech the 
Hostage Negotiation course was being relocated to Louisiana State 
University, which is a partner with New Mexico Tech in the ATA 
programs. Then this past January, New Mexico Tech was notified by the 
State Department that the Rural Border Patrol Operations program was 
being terminated and moved elsewhere. This is a mistake. The community 
of Socorro and the university have operated very successful ATA 
programs for the State Department. Both have invested significantly in 
facilities to accommodate these programs, and they have been very well 
received by the foreign dignitaries and officials receiving this 
training. The decision to relocate these programs will significantly 
impact the local economy. These programs follow successful New Mexico 
Tech training for the nation's first responders as one of four training 
partners in the Office of Domestic Preparedness and the National 
Consortium on Domestic Preparedness for the Department of Justice. I 
see no valid reason why these programs should be relocated, nor were 
explanations give to New Mexico Tech for this change.
    (A) Mr. Secretary, I understand that the State Department official 
that recently ordered the relocation of the Rural Border Patrol 
Operations course did not have the authority to do so. I am now told 
that this decision has been put on hold, but that the intention is 
still to move forward with this proposal through regular channels. Will 
you please take a look at the attached letter and investigate this 
matter for me? I would urge you to keep the Rural Border Patrol 
Operations Course right where it has been successfully run for the past 
several years--at New Mexico Tech in Socorro, New Mexico.
    (B) Will you please also investigate the decision that was made to 
relocate the Hostage Negotiation course to Louisiana State University? 
While the universities work very closely on these programs, they each 
have unique capabilities which they bring to the anti-terrorism 
assistance programs.

                             Congress of the United States,
                                     Washington, DC, March 3, 2003.
The Honorable Colin L. Powell,
Department of State, 2201 C Street, N.W., Washington, DC 20520.
    Dear Secretary Powell: We write regarding the Antiterrorism 
Assistance (ATA) training program involving Louisiana State University 
(LSU) and New Mexico Tech (NMT). We are deeply concerned about the 
Department of State's (DoS) decision to terminate the Rural Border 
Patrol Operations training program at NMT. Our concerns are further 
heightened by the fact that the Hostage Negotiations program at NMT was 
terminated last year.
    Until the end of 2002, NMT successfully conducted both courses 
under a cooperative agreement between ATA and LSU and a subcontract 
between LSU and NMT. Before year end, LSU (at the direction of ATA) 
notified NMT that Hostage Negotiations training would relocate to LSU 
effective January 2003. At the time, NMT was led to believe that the 
loss of the Hostage Negotiations training program would be offset by 
increased activity in the Rural Border Patrol Operations course, 
thereby resulting in a program neutral change. However, NMT funding for 
both training programs has dwindled from approximately $1.7 million in 
fiscal year 2001 to an estimated $900,000 for fiscal year 2003. 
Obviously, the decision recently announced to relocate the Rural Border 
Patrol Operations course will eliminate any chance for a program 
neutral change and will instead have a significant negative financial 
impact on NMT.
    We are aware of the limited resources available to carry out this 
and other ATA activities during these critical times. Thus, it is 
imperative that our best resources are marshaled to provide important 
training to our allies in foreign countries. We believe the ATA 
training made available to these countries is important to their 
security and critical to our country as the front line of defense to 
antiterrorism activities. It is therefore incomprehensible to us that 
decisions have been made to terminate this important program at NMT, 
especially after NMT's success and contributions to the ATA program 
were formally recognized in the letter from ATA directing the training 
to be relocated.
    The principal reason given by the DoS for its relocation of the 
Rural Border Patrol Operations course was economic. ATA believes they 
can achieve a measure of cost savings by consolidating training at 
another location. It is important to note, however, that more dramatic 
savings can more likely be realized by consolidating additional 
training at NMT. We believe that the decision to terminate training at 
NMT will not represent the greatest cost savings and ignores other 
factors that impact on the economy and the overall quality of life of 
our citizens.
    It is also important for us to point out the considerable 
investment in the ATA training program that has been made by both the 
community of Socorro and NMT. These investments were made as a 
commitment to a long-term, productive relationship with the ATA 
program. First, NMT funded construction of a ``state-of-the-art'' small 
arms range to provide first class support for the program. Second, 
local businesses contributed to the success of the program by investing 
in expansion of their facilities to accommodate students, faculty and 
ATA representatives. Third, NMT provides an exclusive training area, 
which consists of 3,137 acres, for the Rural Border Patrol Operations 
training program at no cost to the ATA program.
    In light of the above, we affirm our desire to continue the 
successful ATA programs already established by NMT in Socorro, NM, and 
for the DoS to fully use the existing infrastructure and prior 
investments made to support these important programs. To re-establish 
this program at DOE training facilities in Albuquerque may require 
substantial investment of scarce funds and may require entry to a 
military installation where, due to heightened security restrictions, 
guaranteed access by foreign nationals could be limited, as was ATA 
student access to facilities on some military installations immediately 
following September 11th.
    The Department of State should take immediate action to accomplish 
the following actions:
  --Reverse the decision to relocate the Rural Border Patrol Operations 
        training away from NMT.
  --Reestablish Hostage Negotiation (or a comparable training course) 
        at NMT.
  --Use the unique facilities of NMT to support a Large Scale Terrorist 
        Bombing course or similar training program.
  --Relocate the office of the ATA New Mexico representative from 
        Albuquerque to Socorro, NM.
    These actions would help realize actual cost savings in the ATA 
program and permit full utilization of existing (and proven) high 
quality training facilities at NMT, thus eliminating costs associated 
with duplicating such facilities at new training locations.
    We greatly appreciate your attention to this time sensitive request 
and look forward to your swift response. Should you have any questions, 
please feel free to contact Ricardo Bernal of Rep. Steve Pearce's staff 
at (202) 225-2365.
            Sincerely,
                                             Stevan Pearce,
                                                Member of Congress.
                                             Pete Domenici,
                                             United States Senator.
                                             Jeff Bingaman,
                                             United States Senator.

    Answer. The Department has not made a final decision to relocate 
the Rural Border Patrol Operations course from New Mexico Tech. The 
Hostage Negotiations course was moved to Louisiana State University so 
that it could be co-located with the Advanced Crisis Response Team 
(SWAT) course that is taught there, where specialized facilities are 
available. Both courses end in a capstone joint exercise involving 
hostage negotiation and hostage rescue.
    New Mexico Tech has a sub-grant of a cooperative agreement between 
Louisiana State University and the Bureau of Diplomatic Security that 
is renewable each year. Diplomatic Security regularly reviews these 
agreements and compares costs for providing courses among various 
service providers. Recently, as a matter of fact, a course that was 
once taught in Washington state was relocated to a New Mexico facility.
    We would be happy to provide you or your staff with a detailed 
briefing on the consideration of this matter prior to any final 
decision.
    Question. Would you please tell the Subcommittee the Department's 
plans to fund the International Law Enforcement Academies in fiscal 
year 2003 under the omnibus appropriations bill?
    Are there sufficient funds to adequately support the operation of 
the ILEAs for the remainder of the fiscal year? If not, what 
adjustments does the Department plan to make in ILEA operating plans?
    Answer. The Department plans to continue to support the work of the 
established ILEAs in Bangkok, Budapest, Gaborone and Roswell. The level 
of funding will be approximately $3.5 million each for Bangkok, 
Budapest and Gaborone and $5 million for Roswell. In addition, $2 
million will provide initial funding for the development of the newest 
ILEA for Latin America. Existing funds can adequately support the 
current level of operations at all the ILEAs. No adjustments are 
necessary.
    Question. The conferees endorsed Senate and House report language 
regarding ILEA, and stated the expectation that the Administration 
provide sufficient funding to complete the Roswell Center where there 
is a building currently under construction. Can you please tell me what 
the status of that project is, and when it is expected to be completed?
    Answer. The Department has $3.5 million available for the 
construction of a new building at the Roswell facility. The New Mexico 
Institute of Mining and Technology has been instructed to present a 
proposal including detailed information and specifications, as required 
by statute for any building project, for review and approval. This type 
of building project typically takes 12 to 18 months to complete.
    Question. Under the President's fiscal year 2004 budget requests 
for International Law Enforcement and Narcotics Control, what are the 
Department's plans to fund each of the ILEA programs? Would you please 
provide the Subcommittee with the details on the proposed ILEA training 
for the upcoming fiscal year?
    Answer. The level of funding will be approximately $2.9 million 
each for Bangkok, $3.2 million for Budapest, $2.7 million for Gaborone, 
$5 million for Roswell and $3.3 million for San Jose. This funding will 
allow for continuing operations--at a reduced training tempo in the 
regional academies--based on fiscal year 2003 spending levels. No new 
initiatives are possible without additional funding.
                                 ______
                                 
         Questions Submitted by Senator Ben Nighthorse Campbell

    Question. Last October, I wrote to the Department, along with 
several colleagues from the Helsinki Commission, concerning Ukrainian 
President Kuchma's approval of the transfer to Iraq of the Kolchuga 
[COL-chew-ga] radar system.
    Have efforts been made to investigate possible financial benefit on 
the part of President Kuchma or his associates in connection with the 
Kolchuga affair?
    Has the Ukrainian government given indications of cooperating in 
resolving the problem of transfers of military equipment to rogue 
states such as Iraq?
    Answer. Although we remain convinced that President Kuchma 
authorized the transfer of Kolchuga to Iraq, we do not know if the 
transfer actually occurred. We are not aware of any violations of U.S. 
law in connection with payments President Kuchma or any other Ukrainian 
official might have received in connection with any transfer of the 
Kolchuga system to Iraq.
    The Kolchuga incident exposed serious weaknesses in Ukraine's arms 
export control system. The United States is working jointly with 
several other governments in a cooperative effort to strengthen 
Ukraine's export control system, enforcement, and oversight of defense 
industries and transshippers. We continue to engage the Government of 
Ukraine on these issues and are intensifying our diplomacy. As a result 
of our diplomatic efforts and pressure, the Ukrainian government has 
undertaken a number of preliminary structural reforms in the arms 
export industry that enhance nonproliferation. The Ukrainian parliament 
(Rada) also recently passed a new export control law that could 
contribute to stronger safeguards. We will be working with the 
Government of Ukraine to support effective implementation of its export 
control law and regulations in addition to pushing for continued 
structural reform.
    Question. We have seen disturbing reports that Belarus, Bulgaria, 
Bosnian Serbs and Serbia have also been actively involved with arms 
trade to Iraq. I am particularly disturbed over Belarus under 
Lukashenka--the last dictator in Europe and will soon introduce the 
Belarus Democracy Act in the Senate.
    How serious do you regard the problem of arms transfers to Iraq 
from other OSCE countries of the Former Soviet Union and Eastern 
Europe?
    While I understand some progress has been made in shutting off a 
notorious Serbian connection, are we making satisfactory progress with 
these other suppliers?
    Is the United States pursuing the issue of arms transfers within 
the OSCE framework?
    Answer. U.S. strategy to halt military assistance and gray arms 
transfers from Eastern and Central Europe and Eurasia to Saddam 
Hussein's Iraq and other state sponsors of terrorism has been a quiet, 
but significant, success for U.S. national security. Since July 2001, 
the United States has invested substantial diplomatic and intelligence 
resources in implementing nonproliferation strategies for states in 
this region, including for each of the NATO invitees. Relying on the 
tools of coordinated diplomacy, information sharing, interdiction, and 
coordinated assistance, our efforts to strengthen border security and 
encourage responsible export control policies in Eastern and Central 
Europe and Eurasia have worked remarkably well.
    Our cooperation with Serbia and Montenegro and Bulgaria in 
particular mirrors the very successful nonproliferation strategies 
pursued in Eastern Europe and the Balkans. The fruitful partnerships 
that developed as a result of this strategy proved invaluable to our 
efforts in Operation Iraqi Freedom and continue to play a significant 
role in the global war on terrorism.
    We are beginning to implement a synthesized approach to border 
security and nonproliferation cooperation in the Balkans, with support 
from many in Congress. The Department also continues to execute an 
effective small arms and light weapons destruction program. This 
program has destroyed 230,000 surplus weapons and several tons of 
ammunition in Albania, Bulgaria, and Serbia and Montenegro, and will 
destroy similar amounts in Bulgaria and Romania this year. Our 
diplomatic efforts have also resulted in virtually all Eastern and 
Central European governments vetting proposed arms sales and transfers 
with the USG. The United States has sought to use the OSCE to reinforce 
our work on conventional arms transfers in order fora, and to cement 
principles and good practices associated with arms transfers among the 
members of OSCE states. This effort dates back to agreement in 1993 on 
Principles Governing Conventional Arms Transfers, but became more 
focused at the 1999 Istanbul OSCE Summit with the OSCE Document on 
Small Arms and Light Weapons. The specific measures contained in the 
Document on Small Arms and Light Weapons go beyond the earlier 
statement of general principles--firmly based on U.S. principles and 
practices--and provide a concrete basis for U.S. efforts to encourage 
institute good practices among our OSCE partners in this regard.
    We are at an important point in implementing this strategy. We have 
begun to steer Eastern Europe away from the arms markets and military 
cooperation of the past toward productive areas for the future. These 
positive changes will contribute not only to our efforts to cut off 
supply lines to terrorists, but also to our goal of supporting further 
integration into western security and defense institutions. We will 
continue to work within the effective framework of bilateral and 
multilateral relationships, including the Wassenaar Arrangement, NATO, 
and the G-8, to ensure the sustained improvement in arms transfer 
policies in all OSCE countries.
    Question. Mr. Secretary, despite our frustration and disappointment 
with President Kuchma and his associates in Ukraine, it is important 
that we continue to assist those elements of Ukrainian society striving 
for democracy, rule of law and Euro-Atlantic integration.
    Cuts in Voice of America and Radio Liberty programming to Ukraine 
have been proposed. Isn't this a premature move, given the poor 
environment for independent media there especially in the run-up to 
next year's presidential elections?
    Answer. We share your views on the critical importance of 
developing a strong civil society in Ukraine, and on the important 
contributions made by Voice of America and especially Radio Free 
Europe/Radio Liberty (RFE/RL). In the interest of seeing a free and 
fair 2004 presidential election in Ukraine, in which all major 
candidates have access to the media, the role of the Ukrainian service 
of RFE/RL is especially vital. This is a central goal of U.S. policy 
towards Ukraine.
    In March, Under Secretary Beers sent a letter to the Chairman of 
the Board of Broadcast Governors (BBG) expressing our concerns about 
rumored reductions in staffing and operational funding for RFE/RL's 
Ukrainian language service. We also briefed the BBG on the results of 
our Ukraine policy review, which called for greater support for 
independent media in Ukraine. The Chairman, Mr. Tomlinson, assured us 
that no reductions for RFE/RL were contemplated.
    Question. As Co-Chairman of the Helsinki Commission, I recently 
introduced a bipartisan resolution (S. Con. Res. 7) concerning anti-
Semitism and related violence in the OSCE region.
    What actions is the Department taking to ensure that our friends 
are doing everything possible to confront such attacks, prosecute and 
publicly denounce such violence?
    The Porto OSCE ministerial called for a meeting focused 
specifically on anti-Semitism, a subject high on the Helsinki 
Commission agenda. Is that meeting on track to take place?
    Answer. The Department of State is concerned about the increase in 
anti-Semitic violence in the OSCE region. We have made combating anti-
Semitism a priority for our diplomacy throughout the region and 
especially at the OSCE.
    The OSCE Parliamentary Assembly led the way on this issue by 
issuing a statement at the Berlin summer session last July highlighting 
the need for vigilance and governmental attention to the problem of 
anti-Semitic activities.
    Our success at the Ministerial meeting in Porto in scheduling an 
OSCE meeting on anti-Semitism is in large part a result of the work 
done on this issue by the Parliamentary Assembly.
    Through the OSCE Permanent Council and on a bilateral basis we 
raise incidents of anti-Semitic violence or policies with the 
governments concerned.
    The OSCE meeting on anti-Semitism scheduled for June 2003, will be 
a forum to discuss best practices in the fight against anti-Semitic 
violence and tendencies in societies. The U.S. delegation, to include 
prominent governmental officials and private individuals, will be 
robust and will reflect the importance we place on this conference.
    Question. Mr. Secretary there have been reports in the media 
suggesting that the United States is allowing, if not encouraging, 
other countries to torture individuals suspected of involvement in 
terrorism. In his State of the Union Address, the President described 
the horrific forms of torture employed by the Hussein regime and 
concluded, ``if this is not evil, then evil has no meaning.'' Can you 
clarify what the U.S. policy is with respect to torture in the war 
against terrorism?
    Answer. The United States condemns and prohibits torture. The 
President recently reaffirmed this to the United Nations High 
Commissioner for Human Rights. The Department of Defense General 
Counsel has further advised in a letter on the subject addressed to 
Human Rights Watch that:
  --(1) When questioning enemy combatants, U.S. personnel are required 
        to follow this policy and applicable U.S. laws prohibiting 
        torture.
  --(2) With respect to the transfer of detained enemy combatants to 
        other countries for continued detention, U.S. Government 
        instructions are to seek and obtain appropriate assurances that 
        such enemy combatants are not tortured.
  --(3) U.S. Government personnel are instructed to report allegations 
        of mistreatment of or injuries to detained enemy combatants, 
        and to investigate any such reports.
  --(4) U.S. Government officials investigate any known reports of 
        mistreatment or injuries to detainees.
    The United States does not condone torture and is committed to 
protecting human rights as well as protecting the people of the United 
States and other countries against terrorism of global reach.
    Question. A year ago I asked you what action might be taken against 
OSCE countries like Turkmenistan who flagrantly violate their human 
rights commitments. I understand that the situation has only 
deteriorated further over the past year. What is the Department doing 
to address these developments?
    Answer. The human rights situation has continued to deteriorate in 
Turkmenistan, particularly since the November 2002 attack against 
President Niyazov's motorcade. The United States is deeply concerned 
about the human rights situation in Turkmenistan, and we have embarked 
on a number of bilateral and multilateral initiatives to address the 
problems there.
    We have raised our human rights concerns directly with President 
Niyazov and other senior officials in Turkmenistan on a number of 
occasions, as well as the Turkmen Ambassador in Washington. In those 
conversations, we especially discussed the conduct of the Turkmenistan 
Government during its investigation of the November incident. We have 
also encouraged other countries to raise the matter with the Government 
of Turkmenistan.
    We have also vigorously pursued multilateral efforts to improve 
Turkmenistan's human rights record. In December 2002, the United States 
joined other OSCE member states to invoke the rarely used ``Moscow 
Mechanism,'' requiring the Government of Turkmenistan to reply in 
writing to a request for information on the whereabouts and conditions 
of those arrested. Ashgabat failed to respond adequately, thereby 
bringing into motion the second stage of the Moscow Mechanism--the 
sending of a fact-finding team to Ashgabat to report on the situation. 
Under its OSCE commitments, the Government of Turkmenistan is obliged 
to accept a visit by the team and must appoint one member to the team. 
Despite this obligation, the Government of Turkmenistan did not 
cooperate, and the OSCE team had to investigate the matter without 
assistance.
    On March 13, 2003, the OSCE Moscow Mechanism Rapporteur submitted 
his report on abuses in Turkmenistan following the November attack on 
President Niyazov. The report condemned the attack itself, catalogued a 
range of grave human rights abuses following the attack, and publicly 
called on Turkmenistan to make reforms and work with the OSCE to 
address the problems. Turkmenistan has rejected the findings of the 
report.
    The United States also co-sponsored an April 2003 United Nations 
Human Rights Commission resolution condemning Turkmenistan for a range 
of human rights abuses including torture and political and religious 
repression. In particular, the resolution cited abuses in the crackdown 
following the November incident. We hope this resolution will encourage 
reforms in Turkmenistan and enhance U.N. engagement on this issue.
    The United States is committed to sustained diplomatic engagement 
with Turkmenistan to press for fundamental political, economic, and 
societal reforms, and to push Turkmenistan to develop a healthy respect 
for human rights in accord with its U.N. and OSCE obligations. The 
development of such reforms is inextricably tied to security, 
stability, and prosperity in Turkmenistan. Understanding that 
significant political change will take time, we have increased our 
assistance programs that promote democratic freedoms, including human 
rights, civil society and rule of law.
                                 ______
                                 
           Questions Submitted by Senator Ernest F. Hollings

                        COST SHARING INITIATIVE

    Question. Is the program voluntary or mandatory?
    Answer. The Administration's Security Capital Cost Sharing Program 
will be mandatory for all agencies under Chief of Mission authority. As 
envisioned, agencies, including the Department of State and ICASS, will 
be required to pay on a per capita basis for each authorized overseas 
position. It is an Administration initiative that is part of the 
President's Management agenda. It aligns costs with the overseas 
assignment process and is a significant right-sizing initiative. It is 
also consistent with the OPAP recommendations. This approach is 
reflected in the Foreign Affairs Authorization Bills now being 
considered by both the Senate and House.
    Question. How are you going to guarantee that other agencies will 
reimburse the Department through the Cost Sharing Program?
    Answer. The legislation now being considered (S. 925 and H.R. 1950) 
would authorize State to collect the amounts due automatically through 
the Intra-Governmental Payment and Collection System, which is the same 
way GSA collects rent for domestic buildings. Payment and collection 
would not be contingent on a particular cost sharing appropriation to 
an agency.
    Question. What specifically is the $120 million for?
    Answer. All cost sharing funds will be used solely for the 
construction of secure, safe, and functional New Embassy Compounds 
(NEC), in accordance with the Long-Range Overseas Buildings Plan. The 
fiscal year 2004 funds will help fund the NEC's identified in the 
President's fiscal year 2004 Budget. The $120 million includes State's 
cost share of $64 million and $56 million for other agencies' cost 
share. The actual transfer of funds from agencies will begin in fiscal 
year 2005 and will be fully phased in by fiscal year 2009.
    Question. You propose to phase the program in over 5 years. Does 
this mean that DOS shoulders the expense for the next 5 years?
    Answer. Under this program, State will not have to shoulder all the 
expense for the next 5 years. State has traditionally provided 100 
percent of the capital cost of New Embassy Compounds (NEC), and even 
when the Cost Sharing Program is fully phased in, the Department will 
be responsible for about two-thirds of the total budget based on its 
overseas positions. The 5-year phase-in period will allow other 
agencies time to rationalize their overseas presence, deciding either 
to increase their budgets for overseas activities or reduce the numbers 
of their least essential personnel overseas. The Department of State 
would also be making the same judgments about its own staffing in light 
of the larger financial consequences of maintaining positions overseas. 
The Administration believes that the 5-year phase-in is a practical 
accommodation to account for a significant change in the Government's 
approach to funding the construction of approximately 150 New Embassy 
Compounds over the next 12 to 14 years.
    Question. Would you provide the Committee with a breakout of DOS 
costs and costs of participating agencies for each of the next 5 years?
    Answer. The breakout of Department of State costs and costs of 
participating agencies currently available are based on data collected 
almost two years ago. The Department has recently collected fresh data 
and is now computing new cost figures. As soon as they are available, 
we will make them available to the committee. We anticipate they will 
be ready in late June.

                            USAID FACILITIES

    Question. Why did State decide to request additional funding for 
USAID facilities through CJS, when Congress has consistently not 
supported this approach?
    Answer. The Department of State and the Administration are strongly 
committed to ensuring that USAID is also provided with secure, safe, 
and functional facilities. The Secure Embassy Construction and 
Counterterrorism Act of 1999 requires all agencies, and therefore USAID 
as well, to be located on the embassy compound. This also allows for 
economies of scale resulting from concurrent construction. We are eager 
to work with the Congress to achieve this legislated mandate.
    Previous budget submissions have requested full funding from the 
Commerce, Justice, State, and Judiciary Subcommittees and from the 
Foreign Operations Subcommittees in different years, and neither 
subcommittee has been willing to fund USAID buildings. The fiscal year 
2004 budget request places the ``catch up'' projects that should have 
accompanied the already funded New Embassy Compounds (NECs) in the 
Foreign Operations budget request. USAID facilities that will accompany 
the proposed NECs are included in the CJS budget request.
    The Administration's proposed Security Capital Cost Sharing Program 
should render the USAID facilities funding issue moot since USAID, like 
other agencies, will pay into the program for the space they need.

                      BERLIN/FRANKFURT FACILITIES

    Question. What steps are you taking to ensure that the facility 
will remain safe in light of the fact that you will not know who owns 
property inches away from the embassy wall?
    Answer. The new embassy in Berlin will be built to withstand 
catastrophic and progressive collapse from blast, and is being designed 
with buffer spaces between the building and the contiguous buildings. 
Additionally, our design features non-office space such as elevator 
shafts and mechanical rooms located along the space contiguous with 
adjacent buildings, to the maximum extent feasible.
    Question. Will you know who purchases the condominiums next door?
    Answer. Our security and intelligence units keep in close contact 
with German security and intelligence services, as well as building 
owners and landlords. It is in all of our interests to provide safety 
and security for not only our facility, but for the Germans and German 
facilities close to ours. The German authorities and the owners of the 
adjacent buildings appreciate our concerns and we foresee a very high 
level of cooperation to address this issue.
    Question. If you are capable of building a structure within inches 
of private property without any knowledge of who owns that property, 
then do we truly need the 100-foot setback requirement?
    Answer. The location of our new Embassy in Berlin is a unique 
opportunity to build a chancery on a historic and prestigious site. It 
is not without security challenges, but both the Department and German 
authorities are working to provide an adequate level of security. While 
the site does have contiguous buildings, we are working to mitigate the 
threat from the buildings using both physical and procedural methods. 
It should also be noted that we are working with the Germans to ensure 
that uninspected vehicles on the roads around the chancery are kept at 
a distance of no less than 82 feet. The chancery will be built 
stronger, to the same level of protection as if it had 100 feet of 
setback.
    While certain waivers will be signed for this particular chancery 
building, the normal requirement for 100 feet of setback has allowed 
the Department to construct safe and secure facilities in many 
countries in the world that may not provide the same level of 
cooperation or have the same capabilities as the German government. 
Congress wisely included a waiver process in the Secure Embassy 
Construction and Counterterrorism Act, and that process will be used 
only when appropriate. The 100-foot requirement is still valid.
    Question. What steps are you taking to secure the property where 
the subway runs?
    Answer. The subway does not run under the building. It does run 
under the Pariser Platz in front of the chancery. There is an emergency 
escape tunnel from the subway with an exit in the street approximately 
60 feet in front of the embassy, which would open into an area where 
the public has free pedestrian circulation. We do not consider the 
subway a vulnerability.
    Question. Given the current climate and anti-American sentiment in 
Germany because of the potential war with Iraq, do you still feel as 
certain about maintaining the security of the facility today as you did 
one year ago?
    Answer. While there were differences in our positions over Iraq, 
the Germans provided excellent security for our existing facilities 
throughout this period of heightened threat. I have no doubt that they 
will continue to honor their security responsibilities and provide us 
with excellent services and support. The decision to build on Pariser 
Platz was taken only after careful consideration, with the condition 
that security issues be adequately addressed. We continue to move 
toward that goal.
    Question. When will you actually sign the waiver for the security 
requirements?
    Answer. The waiver will be signed when the Department is assured 
that security issues have been adequately addressed.

                    EVALUATING THE HIRING INITIATIVE

    Question. Since the whole notion of the 1,158-position Hiring 
Initiative was to meet DOS's high priority needs, why are the 68 
additional positions needed for Consular Activities not absorbed in the 
Hiring Initiative?
    Answer. The Diplomatic Readiness Initiative (DRI) request was 
introduced as a three-year plan by Secretary of State Powell in 2001 to 
fill gaps created by underhiring in relation to workload in the 1990's. 
The DRI addresses many of our core needs, some of which are determined 
by our Overseas Staffing Model and training requirements. However, some 
personnel requirements are assessed and resources requested separately 
such as security, IT, and consular which tend to have specific needs 
due to outside events.
    It did not take into account the additional requirements that would 
follow from the events of September 11th. Currently, the Department is 
assessing future personnel needs taking into account the long-term 
needs of the Department, to include the implications following the 
events of September 11th.
    The 68 CA positions that are referenced in the question represent 
new positions not originally contemplated in the DRI. These positions 
will be used to replace temporary consular associates with full-time 
consular officers. This is a critical element in the Department's' 
efforts to support homeland security initiatives.
    Additionally, Consular positions have traditionally been funded 
through the MRV fees collected by the Department. Post September 11, 
travel has decreased and therefore so has MRV income. This means that 
we need to request appropriated funds for these additional personnel 
requirements.
    Question. Does the Department support, as you stated in the letter 
of May 22, 2002, a comprehensive plan for compensation?
    Answer. Yes. We have stated on many occasions that we favor a 
comprehensive approach to compensation for U.S. victims of 
international terrorism. We sympathize greatly with suffering endured 
by U.S. victims of terrorism and their families, including the 1979 
Tehran hostages. We support a comprehensive program that allows them to 
receive quick payments in their time of need.
    The current ad hoc, piecemeal legislative approach, however, which 
depends on the vagaries of litigation, does not work. It is not fair 
and equitable, as it has provided some victims or categories of victims 
with compensation and has left others with nothing.
    Deputy Secretary Armitage's letter to Congress, dated June 12, 
2002, laid out the Administration's principles for a comprehensive 
plan. The letter stated that such a plan should provide compensation on 
par with that for death or injury to public safety officers killed in 
the line of duty in a quick, streamlined and simple claims process, 
without regard to income. It stated further that such a comprehensive 
plan should preserve the President's ability to conduct foreign policy 
by not using blocked assets to fund victims compensation.
    Question. Since you have drafted something, perhaps you would like 
to share with the committee exactly what you propose to do to 
compensate the original 52 hostages?
    Answer. First, some background on this issue is helpful. This is 
not the first time that Congress or the President has considered the 
question of compensation for the 1979 hostages. In 1980, Congress 
passed the Hostage Relief Act, which provided compensation with respect 
to the hostages' tax liabilities and other benefits in 1980. After the 
Algiers Accords were entered into in 1981, which waived the hostages' 
claims in order to secure their release from captivity, and after 
extensive hearings were held in both houses of Congress on the Accords 
as a whole and on this waiver in particular, the President established 
a special commission to make recommendations to the Congress as to how 
the hostages should be compensated for their ordeal.
    The President's Commission issued its Final Report and 
Recommendations on Hostage Compensation in 1981. It recommended that 
the hostages receive a certain amount of compensation and other 
benefits. In 1986, the Victims of Terrorism Compensation Act was passed 
and enacted into law. Section 802 and 803 of that act provided for 
additional compensation and benefits to the hostages. I understand that 
all of the hostages received compensation according to the directives 
of that act.
    Deputy Secretary Armitage's letter to Congress of June 12, 2002, 
outlined the Administration's principles for a comprehensive 
compensation plan. Because the plan is designed to address compensation 
for all U.S. victims of international terrorism, it does not single out 
any particular group or category, such as the 1979 hostages.
    Question. When can we expect to see such a proposal?
    When was the proposal submitted to OMB? What steps are you taking 
to the proposal released from OMB?
    Answer. The submission of a proposal and its timing depend on OMB. 
We have been working with OMB for some time to develop such a proposal. 
In November 2001, we sent a draft proposal to OMB that could be 
circulated for inter-agency review. Our discussions with OMB ultimately 
resulted in the letter that Deputy Secretary Armitage sent to Congress 
last June. Following my oral testimony in March, I sent a letter to 
then-OMB Director, Mitch Daniels, urging that OMB complete its review 
of our draft proposal as soon as possible. We have been in further 
discussions about this with OMB and the White House. We have made 
progress, and I am hopeful that these discussions will result in a 
proposal that is worked out between the Administration and Congress 
soon.
    Question. To date, how much funding has the Department of State 
expended on defending Iran--a known terrorist state--in court against 
American citizens?
    Answer. None. We have made appearances in proceedings in U.S. court 
to protect the interests of the United States. Unfortunately, 
plaintiffs' lawyers have sometimes mischaracterized our actions. In the 
Roeder v. Iran case in the U.S. District Court for the District of 
Columbia, Judge Sullivan noted in his decision,

    ``Plaintiffs consistently mischaracterize the nature of the 
interest asserted by the United States. The United States is not 
seeking to vindicate Iran's interests, but rather its own commitment 
under a binding international agreement, and its ever-present interest 
in the enforcement of its laws.''

    Judge Sullivan recognized that we had appeared in the litigation to 
protect U.S. interests in light of our obligations in the Algiers 
Accords.
    I would also like to address certain statements made by Senator 
Harkin concerning the Algiers Accords in recent congressional hearings. 
He suggested that the Algiers Accords should not have any binding 
effect, asserting that they were never a treaty ratified by the Senate 
and because they resulted from blackmail.
    After the Algiers Accords were signed, and after the hostages were 
released, Congress had extensive hearings on the Accords in both 
houses. Former Deputy Secretary Warren Christopher, who was the lead 
negotiator for the United States, recounted in his testimony how he had 
reported to the then-Senate Foreign Relations Committee ``on nearly a 
daily basis'' concerning the ongoing negotiations. As reflected in the 
hearings, the Accords and the negotiators received overwhelming 
bipartisan support and praise. For example, the Chairman of the House 
Foreign Affairs Committee, Rep. Zablocki, stated, ``The agreements 
preserved the honor of the United States and secured the safe release 
of the hostages.'' The Chairman of the Senate Foreign Relations 
Committee, Senator Percy, also stated, ``President Reagan has 
determined that Presidential authority did exist and does exist to 
implement these agreements and it is in the best interests of the 
United States of America that we honor them. I applaud this decision by 
President Reagan and Secretary Haig.'' And the Supreme Court noted 
Congress' approval of the Algiers Accords in its decision in Dames & 
Moore.
    Upholding U.S. obligations in the Algiers Accords is in the 
interests of the United States, and it is those interests that the 
United States has sought to protect by appearing in court in these 
cases.
    Question. What other terrorist states or organizations has the 
Department of State defended in court?
    How much has been expended on those cases?
    Answer. None.

                           DOLPHIN-SAFE TUNA

    Question. With all due respect, doesn't NMFS have greater 
scientific expertise than the Department of State to make this decision 
as to whether the science supports changing the standard?
    Answer. Yes. The Department of Commerce in general, and the 
National Marine Fisheries Service in particular, has both the capacity 
and the statutory responsibility to evaluate the scientific evidence 
bearing on the issue of dolphin-safe tuna fishing. We understand that 
the decision was made on this basis.
    Question. Despite the clear science-based standard in the statute, 
isn't it true that the Department of State believes that keeping Mexico 
and other countries at the table in the international treaty on the 
tuna fishery in the Eastern Tropical Pacific is an important factor in 
deciding whether to change the U.S. law? Wasn't this view expressed to 
the Department of Commerce?
    Answer. At the end of 2002, the Secretary of Commerce had the 
responsibility under the law in question to determine whether the purse 
seine tuna fishery in the Eastern Pacific Ocean is having a significant 
adverse impact on any of the depleted dolphin stocks in that region. As 
you know, he found that the fishery is not having such an impact.
    In advance of that finding, I wrote to Secretary Evans to describe 
what the Department of State saw as a wide range of views of various 
scientific organizations that were examining this issue and urged him 
to weigh all the competing evidence carefully, as he certainly did.
    The United States has a strong interest in maintaining the 
International Dolphin Conservation Program, which has reduced dolphin 
mortality in this fishery by 98 percent. However, the statutory 
criteria on which the Secretary of Commerce made his finding relate 
solely to the issue of whether the fishery is having a significant 
adverse impact on dolphin stocks. The Department of State has not 
argued otherwise.
    Question. There have been serious concerns raised with respect to 
the failure of certain member countries to comply with the 
international agreement to reduce dolphin mortalities in the Eastern 
Tropical Pacific. As a result of these concerns, the fiscal year 2003 
Omnibus Appropriations bill includes language calling for a report to 
Congress on compliance with the international agreement, and also 
provides $750,000 of the budget for the Bureau of Oceans and 
International Environmental and Scientific Affairs only for negotiating 
measures to strengthen the IDCP. I hope you are taking our message 
seriously.
    Answer. The Department of State is aware of the concerns that some 
have raised with respect to the implementation of the international 
dolphin conservation program. Since the initial implementation of the 
program, we have stressed to all participants the need for the highest 
standards of compliance with the provisions of the agreement and have 
worked to achieve this result in a number of ways. However, more can 
and should be done. We will continue to work with the Department of 
Commerce, Congress and affected U.S. constituent groups to pursue 
effective implementation of this program.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski

    Question. Mr. Secretary, thank you for pursuing the Diplomatic 
Readiness Initiative to fill staffing gaps in the Foreign Service and 
Civil Service. Fiscal year 2004 will be the third and final year of the 
Diplomatic Readiness Initiative.
    The State Department authorization act (Public Law 107-228, at Sec. 
301) requires that you submit to the Congress a comprehensive workforce 
plan for the Department for fiscal years 2003 through 2007. We look 
forward to receiving this workforce plan, which is due 180 days after 
enactment of the Act. The world has changed considerably since the 
Diplomatic Readiness Initiative targets were set two years ago, and we 
expect changes in the State Department to be reflected in the workforce 
plan.
    Are Diplomatic Readiness Initiative targets still adequate to fill 
the current and anticipated open positions at our diplomatic missions 
and consular posts?
    Will there be a sufficient number of Foreign Service personnel so 
they can receive needed training without leaving positions unfilled?
    Do you anticipate personnel shortfalls or unmet skills needs, which 
would be identified in the workforce plan? Do you anticipate the need 
to shift personnel, or problems in recruitment and retention, that the 
subcommittee should be prepared to consider?
    Answer. As mentioned, the Diplomatic Readiness Initiative (DRI) 
program was intended to ``right-size'' the State Department staff 
following a long period of under hiring in the mid-1990's. Events since 
the initial DRI (developed in 2001) could support increases. We 
anticipate that the next iteration of the Overseas Staffing Model will 
take some of these events into consideration and we will also be 
reviewing results of our analysis of the Domestic Staffing Model 
results.
    DRI was designed to help make it possible to plan for crises and to 
have enough people to be able to reprioritize quickly within existing 
resources; without enough people in the system, those who leave to 
cover a crisis would leave major staffing gaps.
    But for some of these new issues, they cease being crisis 
requirements and become baseline requirements--such as an embassy in 
Kabul and the increased consular workload.
    We have had to use some of the DRI positions to cover new consular 
needs in the wake of 9/11 when the workload went up even as MRV fees--
which have funded many consular position increases--went down. We have 
also had increased visa processing requirements that have increased 
workload while we have also striven to ensure that we have fully 
trained commissioned Foreign Service Officers in all positions. In the 
short run we have had to meet these new requirements within our current 
workforce. These requirements will need to be met continuously, but the 
original DRI did not envision these changes.
    Even though we had to use some DRI positions for these unexpected 
contingencies, we still need the personnel complement foreseen by DRI 
to make training and future crisis response possible.
    Question. A June 2002 General Accounting Office report on 
Diplomatic Readiness at Hardship Posts, stated, ``According to State 
officials and Foreign Service employees, the incentive provided by 
differential (hardship) pay for overseas service has been diminished by 
rules governing locality pay . . .. State has not analyzed the effect 
that this difference has had since 1994 on the number of Foreign 
Service employees who bid on overseas assignments, including hardship 
posts. However, State Department officials, the American Foreign 
Service Association, and many officers with whom we met said that this 
gap penalizes overseas employees and that if it continues to grow, it 
will inevitably keep employees from choosing an overseas career in the 
Foreign Service . . .. We estimate that by 2006 and 2010, the 
differential pay incentives from the 15 percent and 20 percent 
differential posts, respectively, will be less than the locality pay 
for Washington, D.C., assuming that the locality pay rate continues to 
increase at about 1 percent per year.''
    Do you believe the gap identified as a problem by GAO will result 
in difficulty filling positions at hardship posts? If so, how can this 
problem be addressed?
    Answer. While our employees always step up to do what is needed, we 
do believe that the overseas pay gap (now nearly 13 percent as 
Washington, DC locality pay rose in 2003) has created serious morale 
problems, causing employees to question our commitment to them as we 
ask them to do ever more difficult and dangerous work overseas.
    The hardship incentive--post ``differential''--is intended to both 
compensate employees for difficult conditions as well as to provide an 
incentive for service. It is not intended to make up for lost salary. 
Hardship incentives to do not count as salary for the purposes of 
annuity calculations or retirement fund contributions.
    We believe that this inequity between overseas and domestic 
salaries will make it harder for us to staff overseas posts--especially 
hardship posts, but all posts. At nearly a quarter of our posts, even 
including allowances such as hardship pay, salary is less than 
Washington salaries.
    Unlike the CIA, we do not currently have the legal authority to pay 
employees overseas at the Washington, DC pay level. In addition, the 
cost of doing so cannot be managed without additional appropriations. 
We are working with the Administration on a solution to this inequity 
and workforce management problem.
    Question. At the time of the bombings of our embassies in east 
Africa, about 88 percent of our embassies did not meet the Department's 
basic safety standards (according to the Overseas Presence Advisory 
Panel report).
    After five years of a ten or eleven year plan to protect our posts 
and missions abroad, what percentage now meets the Department's basis 
safety standards?
    Also, because of the changing nature of international terrorism, do 
you believe additional funds are necessary to protect U.S. personnel 
and their families in ``soft target'' environments such as 
international schools attended by our children, churches and places of 
entertainment frequented by American families, and even our housing 
complexes?
    Answer. In the immediate period after the embassy bombings, 
Congressional funding and Department effort was focused on providing 
immediate improvements to our existing facilities using the Emergency 
Security Appropriation. These efforts provided necessary and timely 
upgrades to our facilities, and were instrumental in protecting our 
people in such places as Karachi from a car bomb attack. However, this 
effort could not provide substantial improvements such as blast 
resistant buildings and improvements in setback for most of our 
buildings.
    Since early 2001, the Department has embarked on a truly ambitious 
new building program. Since then, new embassy facilities have been 
constructed in Kampala, Doha, Dar Es Salaam, Tunis, and Abu Dhabi. 
Three new embassies will be finished in 2003, including Zagreb, 
Nairobi, and Istanbul. The 88 percent figure relates to 142 of the 163 
``Inman'' era embassies that were not up to standard, leaving 21 (12 
percent) that were up to standard. Adding these 8 new embassies, the 
percentage rises to nearly 18 percent. With 2004 plans for another 8 
embassies, this figure will continue to improve.
    As to the question of soft targets, I believe funding can and is 
being provided to improve the security at overseas schools and for our 
housing. However, the school program is just commencing, and it is 
unclear how much funding will be appropriate. The Department will also 
continue to provide timely and appropriate security advice and guidance 
to businesses and religious groups overseas to enhance their ability to 
protect themselves.

                          subcommittee recess

    Senator Gregg. The subcommittee will stand in recess.
    [Whereupon, at 11:04 a.m., Thursday, March 6, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              


                        THURSDAY, MARCH 20, 2003

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

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

STATEMENT OF HON. DONALD L. EVANS, SECRETARY OF 
            COMMERCE
    Senator Gregg. Let me formally welcome you, Mr. Secretary. 
We appreciate your coming by to tell us what is happening at 
the Commerce Department. The floor is yours.
    Did you have a statement or anything?
    Senator Hollings. No, thank you.
    Secretary Evans. Thank you, Mr. Chairman. If you do not 
mind, Mr. Chairman, for the record let me go ahead and read a 
brief edition of what I would like to submit to the record in 
my written remarks.
    Mr. Chairman, Mr. Hollings, members of the committee, I am 
pleased to be here again to present the President's fiscal year 
2004 budget request for the Department of Commerce. With your 
permission, I would like to briefly highlight some of the key 
components of our budget and submit my written testimony for 
the record.
    A vibrant private sector is essential to American jobs and 
security. One hundred years ago, Congress created the 
Department of Commerce to promote American industry and 
business and economic opportunity for our citizens. This is the 
nexus of our diverse programs in trade, technology, 
entrepreneurship, and environmental stewardship.
    In developing the budget request, I have carefully followed 
the President's directive to focus on four priorities. As you 
know, making a budget entails difficult decisions and resources 
are limited. Choices have to be made. Clearly, these troubled 
times of war and attacks on our way of life demand responsible, 
targeted spending. The President's total budget request for the 
Department of Commerce is $5.4 billion. This budget provides 
for the continued funding of key Commerce programs, while 
focusing resources on four critical priorities: fostering 
economic growth, contributing to homeland security, advancing 
science and technology, and upgrading facilities.
    To generate jobs and economic growth, government and 
business decisionmakers need the best possible economic 
information. An additional $5.4 million is requested for the 
Bureau of Economic Analysis. These funds are required to 
improve the quality and timeliness of GDP and economic accounts 
data. As you know, two-thirds of the revisions in the last 
three GDP annual releases were due to lack of information.
    For the Census Bureau, which monitors the Nation's social 
and economic development, we are asking $9.3 million in 
increased spending. The money is for improved data collection 
and methods for measurement of the important services sector 
and continued planning for the 2010 census.
    The President and I are very concerned about the economic 
security of America's workers. A proposed increase of $13.8 
million for economic development administration will assist 
communities severely impacted by plant closures and layoffs.
    To meet homeland security needs, the President is 
requesting an additional $2.3 million for the Bureau of 
Industry and Security. The funds will be used to strengthen 
export controls on the dual use of goods and technologies that 
would strengthen the military capabilities of our adversaries.
    The NOAA budget request includes $5.5 million to expand 
NOAA weather radio to a truly national all-hazards warning 
network. The funding will allow first responders and emergency 
managers direct access to the network to transmit all hazard 
messages, and to further strengthen homeland security, we are 
requesting $10.3 million for NIST. As you know, NIST is 
investigating the collapse of the World Trade Center buildings. 
Using lessons learned, we want to help develop new standards 
for cost-effective safety and security of buildings. 
Additionally, the funds will be used to test performance 
standards for biometric systems used to identify visitors to 
our country and to test radiation standards.
    To support technology innovation and provide for 
intellectual property protection, the Department is working to 
eliminate the practice of using USPTO revenues for unrelated 
Federal programs. Making more fees available sooner will enable 
the agency to increase the quality of patents and trademarks 
issued. Because America's leadership in science and technology 
has a direct impact on our economic and homeland security, we 
also are requesting $9.2 million for NIST research in such 
emerging areas as nanotechnology, quantum computing, and health 
care quality assurance.
    We also include a $16.9 million increase for NOAA to study 
areas of scientific uncertainty in climate change, and an 
additional $29.8 million increase to modernize fishery 
management to better protect this $50 billion industry.
    Mr. Chairman, the scientists, engineers, and support staff 
in our Commerce laboratories are world-class. Unfortunately, in 
some cases, the facilities they occupy are not. For example, 
the NIST facilities in Boulder, Colorado were built in the 
1950s under the Eisenhower administration. I have seen them. 
They lack adequate temperature controls. They suffer power 
outages and spikes. All of this adversely affects our vital 
research. The fiscal year 2004 budget request includes funding 
to renovate the NIST Boulder facilities and to bolster safety 
and security in NOAA's facilities and throughout the 
Department.
    One last comment. As I said earlier, these are troubled, 
threatening times for our Nation, and we have had to make some 
tough choices affecting some very good programs. To enable us 
to focus on new economic and homeland security needs, this 
budget phases out funding for the Advanced Technology Program 
and the Technology Opportunities Program. It includes funding 
only for those manufacturing extension partnership centers in 
operation for less than 7 years, as the original law specifies, 
and it suspends funding for the public telecommunications 
facilities planning and construction.
    I know that there will not be universal agreement about 
these choices. There are members of this committee and other 
Members of Congress who will have different views on priorities 
and on funding. Let me say here, I sincerely respect those 
views and those judgments, and I look forward to working with 
you and working through the budget process with you on the many 
issues affecting this Department.
    Mr. Chairman, we appreciate the support of the committee 
and the support of the committee members that provided for the 
Commerce programs and initiatives in the past. This budget is 
focused on helping our Nation meet the challenges it faces in 
these difficult times.

                           PREPARED STATEMENT

    I welcome your comments, and will be pleased to answer any 
questions you may have. Thank you, Mr. Chairman.
    [The statement follows:]

                 Prepared Statement of Donald L. Evans

    Thank you for the opportunity to appear before you to present the 
Department of Commerce's fiscal year 2004 budget request. Our focus is 
on funding the core mission of the Department and its bureaus. As you 
know, the Administration faces great challenges in its commitment to 
fight and win the war on terrorism, while at the same time harnessing 
the resources of the Federal government to protect the lives and safety 
of all Americans. I hope to fully utilize the resources of the 
Department of Commerce not only to provide for the physical security of 
the Nation, but also to work with other agencies and the private sector 
to promote economic security.
    The Commerce Department's budget request of $5.4 billion supports 
the President's budget plan to focus resources to strengthen our core 
Commerce activities. In particular, our request supports the 
Administration's economic revitalization and homeland security 
priorities and continues our commitment to fund important work of the 
Department to provide infrastructure for technological innovation and 
to observe and manage the Nation's oceanic and atmospheric environment. 
To complement the digital convergence in the private sector, we will be 
proposing legislation to modernize the technology and telecommunication 
entities of the Department.
    The Commerce Department undertakes a wide range of activities 
designed to stimulate growth of the nation's economy. Commerce gathers 
and develops economic and demographic data for business and government 
decision-making; helps American firms and consumers benefit from open 
and fair international trade; issues patents and trademarks that 
support innovation; helps set industrial standards and performs 
cutting-edge scientific research; forecasts the weather to improve 
public safety; and promotes sustainable stewardship of the oceans, 
including ocean fisheries.
    This diversity of activities is reflected in Commerce's five 
strategic goals:
  --Foster the Nation's economic growth.
  --Secure our homeland and enhance public safety.
  --Upgrade the Department's facilities, infrastructure, and safety.
  --Improve and streamline the Nation's fishery management system to 
        better meet commercial, recreational, and conservation 
        objectives.
  --Implement the Administration's Climate Change Research Initiative 
        to reduce present uncertainties in climate science, and support 
        policy and management decisions to benefit public safety and 
        quality of life.
    To enhance these activities, resources will be shifted from various 
lower priority programs.

                            ECONOMIC GROWTH

    Economic growth is a central theme for the President and for the 
Department of Commerce's bureaus for fiscal year 2004. The Economics 
Statistics Administration's Bureau of Economic Analysis (BEA) supplies 
the nation's key economic statistics, including gross domestic product 
(GDP), which are crucial ingredients for business and government 
decision making. BEA seeks to strengthen the understanding of the 
United States economy and its competitive position by providing 
accurate economic accounts data in a timely and cost-effective manner. 
BEA's request includes a $5.4 million increase to accelerate the 
release of major economic estimates, to incorporate new international 
economic data classifications, and to acquire real-time data to improve 
the quality and timeliness of economic statistics.
    In conjunction with BEA's request, the Census Bureau's budget 
request includes an increase of $39.1 million in current economic and 
demographic statistics to fill gaps in data collection, to improve 
methodologies for collecting that information, and to improve the 
measurement of the Nation's service sector. The Census Bureau's budget 
for fiscal year 2004 also includes funding to process and to review 
data from the Economic Census, and to continue planning and designing 
the 2010 Decennial Census.
    The International Trade Administration (ITA) is responsible for 
assisting the growth of export businesses, enforcing U.S. trade laws 
and agreements, and improving access to overseas markets by identifying 
and pressing for the removal of trade barriers. ITA's budget for fiscal 
year 2004 focuses on promoting U.S. exports and enhancing the 
competitiveness of U.S. businesses in the global economy, by fighting 
unfair foreign trade barriers and by negotiating and implementing 
multilateral and bilateral trade agreements.
    The Economic Development Administration (EDA) helps communities 
across the nation create economic opportunity by promoting a favorable 
business environment to attract private capital investments and higher-
skill, higher-wage jobs. EDA accomplishes this principally through 
infrastructure investments and capacity building. A program increase of 
$13.8 million is requested for EDA to assist communities that 
demonstrate a high level of economic distress.
    The Minority Business Development Agency (MBDA) will continue to 
focus on accelerating the competitiveness and growth of minority-owned 
businesses by closing the gap in economic opportunities and capital 
access. MBDA is transitioning from an administrative agency to an 
entrepreneurial organization, and is driven by entrepreneurship and 
innovation. MBDA will continue to provide minority business development 
services, through its Minority Business Information Portal and local 
Business Development Centers.
    For more than one hundred years, the Nation has relied upon the 
Technology Administration's National Institute for Standards and 
Technology (NIST) for scientific and technical expertise to promote 
economic growth, commerce and trade, and national security. The quality 
of NIST work is exemplified by the awards in 1997 and 2001 of the Nobel 
Prize, the world's ultimate recognition in science, to two NIST 
scientists--Bill Phillips in Gaithersburg, Maryland, and Eric Cornell 
in Boulder, Colorado. The work they are leading in super-cold matter 
and the strange nature of quantum mechanics is driving whole new areas 
of science and technology, from atomic clocks that do not gain or lose 
more than a billionth of a second in thirty years, to the potential for 
unimaginably powerful computers based on individual atoms, to new forms 
of telecommunications that provide the ultimate in information 
security.
    The President's request includes a total of $340.8 million for the 
NIST Laboratories to strengthen the national measurements and standards 
infrastructure that enables innovation and economic growth. The request 
will enable NIST to expand its work in the areas of nanotechnology, 
advanced information technology, and health care diagnostics--all areas 
with broad economic impact.
    NIST will expand its program in nanotechnology, the so-called 
``tiny revolution'' in technology, (total request of $62 million). 
Nearly all industrial sectors plan to exploit this emerging technology, 
and most of these plans call for appropriately scaled measurements and 
standards, which is NIST's specialty. NIST closely coordinates its 
nanotechnology work with other Federal agencies through the President's 
National Nanotechnology Initiative, or NNI. NIST appropriately has the 
lead in providing the measurements and standards infrastructure for the 
NNI.
    The request also includes $7.3 million to build on NIST's world-
class expertise in quantum computing and communications. This effort, 
with teams led by NIST's two Nobel laureates, is developing 
revolutionary means of making calculations much more quickly than 
traditional electronic computers will ever be able to do. NIST 
scientists already have made the working elements of quantum computers 
based on individual atoms.
    The fiscal year 2004 Budget also requests funding to allow NIST to 
strengthen its programs supporting health care diagnostics, which not 
only improve the quality of health care, but also ensure that U.S. 
manufacturers can compete fairly in the $20 billion global market for 
these products. The request includes a total of $17.1 million to 
strengthen this effort. Consistent with the President's emphasis on 
shifting resources to reflect changing national needs, the President's 
fiscal year 2004 Budget proposes terminating the Advanced Technology 
Program (ATP) and requests a total of $27 million for administrative 
and close-out costs. The fiscal year 2004 President's Budget also 
proposes maintaining the fiscal year 2003 policy of significantly 
reducing Federal funding for the Manufacturing Extension Partnership 
(MEP), for which the budget requests $12.6 million. These programs have 
been well-run, but the scarce resources are needed for higher priority 
programs. The budget request focuses on NIST's core mission of 
measurements, standards, and laboratory research, rather than its 
extramural programs, by providing the 21st century facilities the NIST 
Laboratories need for success. Investment of limited NIST resources in 
the Laboratory programs and facilities will have the greatest impact on 
fostering innovation that leads to economic growth.
    The U.S. Patent and Trademark Office (PTO) request will support the 
second year of the agency's strategic plan to enhance the quality of 
products and services and to keep pace with workload growth by 
promoting e-government activities and reducing pendency. We understand 
that intellectual property protection is paramount to the Nation's 
ability to innovate and move products into the marketplace. 
Concurrently, Commerce has recently proposed legislation to restructure 
PTO fees to better align the fee system with the work undertaken by 
PTO. The Department is also working to eliminate the practice of using 
USPTO revenues for unrelated Federal programs so that a greater share 
of the applicants' fees are available to the agency in the year they 
are collected.

                           HOMELAND SECURITY

    The Bureau of Industry and Security (BIS) seeks to advance U.S. 
national security and foreign policy interests by regulating exports of 
critical goods and technologies that could be used to damage those 
interests, while furthering the growth of legitimate U.S. exporters to 
maintain our economic leadership. The fiscal year 2004 budget includes 
a $5.6 million increase for BIS to address vulnerabilities in 
regulating exports of critical goods and technologies. This budget 
increase will enable BIS to strengthen export enforcement with 
additional agents and capabilities and to enhance the bureau's analysis 
of U.S. export control regulations to ensure they reflect the dynamics 
of 21st century market and technological changes.
    We request an increase of $13.3 million (for a total of $38.7 
million) for NIST to address key national needs for homeland security 
measurements, standards, and technologies. This request will strengthen 
NIST's portfolio of more than 100 projects that address homeland 
security technology needs.
    Included in this request is an increase of $7 million (for a total 
of $10.9 million) as part of a program to use lessons learned from the 
NIST-led investigation of the World Trade Center (WTC) collapse to make 
buildings, occupants, and emergency responders safer from terrorist 
attacks on buildings and other building disasters. NIST has the unique 
combination of technical expertise in a broad range of building and 
fire sciences and lengthy experience working with the building and 
emergency responder communities to provide the Nation with the maximum 
benefit from the WTC investigation and associated research.
    The NIST homeland security request also includes an increase of 
$5.3 million (for a total of $26.8 million) to develop the measurement 
infrastructure needed to detect nuclear and radiological (``dirty 
bomb'') threats, to improve the use of radiation such as x-rays and 
other imaging techniques to detect concealed terrorist threats, and to 
use radiation safely and effectively to destroy biowarfare agents such 
as anthrax.
    Our homeland security request also includes a total of $1 million 
to develop standards and test methods for biometric identification 
systems, used to positively identify the approximately 20 million non-
citizens who enter the United States each year or apply for visas. This 
will enable NIST to carry out the mandate of the USA PATRIOT Act, which 
requires NIST to develop technology standards for biometric 
identification, recognizing NIST's long history of expertise in this 
area.
    Ensuring public safety remains a priority of NOAA and its National 
Weather Service (NWS). The budget request for NOAA includes an increase 
of $7.7 million (for a total of $65.1 million) to enhance homeland 
security. This increase includes new funding in the amount of $5.5 
million to support a scaled upgrade of the current NOAA Weather Radio 
(NWR) operation to an All Hazards Warning Network. This upgrade 
includes systems to standardize and automate receipt and dissemination 
of non-weather emergency messages. The Administration is also 
requesting $2.2 million in new funding for emergency preparedness and 
safety to improve physical security at 149 NWS facilities to prevent 
unauthorized individuals from entering and/or tampering with NWS 
property.
    The fiscal year 2004 budget request also includes an increase of 
$3.7 million to secure core aspects of ITA's worldwide communications 
network, to defend against unauthorized access, and to create recovery 
mechanisms should damaging events occur.

                 FACILITIES, INFRASTRUCTURE AND SAFETY

    The fiscal year 2004 budget strengthens key Commerce programs that 
provide the infrastructure that enables U.S. businesses to maintain 
their technological edge in world markets. Important priorities for 
fiscal year 2004 are to upgrade NIST's and NOAA's facilities and 
laboratories and begin consolidating PTO facilities. The NIST budget 
request includes $36.2 million to address inefficiencies and safety 
problems at its facilities in Boulder, Colorado and Gaithersburg, 
Maryland. Valuable research continues to be lost or interrupted by 
power outages, spikes, and fluctuations. This budget increase will 
enable NIST to protect critical research data from degradation, and to 
maintain employee safety and security. The budget also requests $8.2 
million to equip, maintain, and operate NIST's Advanced Measurement 
Laboratory, and to fund time scale and time dissemination backup 
elements.
    The budget includes a $47.7 million program increase for NOAA to 
address safety and security concerns associated with its buildings, 
aircraft, and ships, to upgrade weather forecast offices in the 
continental United States, Alaska and the Pacific Islands, to modernize 
the primary NWS telecommunications gateway, to continue construction of 
the NOAA Satellite Operations Facility in Suitland, Maryland, and to 
plan the replacement of the World Weather Building to be co-located 
with a major research institution. During fiscal year 2004, NOAA will 
also continue the tri-agency acquisition (with DOD and NASA) of the 
next-generation polar-orbiting satellites, and systems design and 
development for the next-generation geostationary satellite series 
(GOES R).
    In fiscal year 2004, the PTO will begin relocating its facilities 
from 18 buildings in Arlington, VA into a consolidated 5-building 
campus in Alexandria, VA with an initial move into two of the buildings 
this December. The new consolidated facility is designed to meet the 
PTO's operational needs, provide flexibility to future program or 
process changes, and fully comply with current fire, life-safety and 
accessibility guidelines. The budget includes a $44.6 million program 
increase for construction inflation costs that occurred during the 
project delay generated by litigation and maintaining dual rent and 
simultaneous operations during the eighteen-month move period.
    To strengthen the spectrum management capabilities of the National 
Telecommunications and Information Administration (NTIA), to meet the 
increasing demand for Federal wireless communication systems and 
services, the Department of Commerce requests an increase of $1 million 
for NTIA to establish a paperless system for spectrum issue resolution, 
certification, satellite coordination and frequency authorization, and 
to intensify research aimed at expanding spectrum utilization through 
greater understanding of radio frequency interference. The fiscal year 
2004 budget also proposes to suspend the Public Telecommunications 
Facilities Planning and Construction (PTFPC) grants, a program 
reduction of $41.1 million for NTIA during fiscal year 2004. Up to $80 
million in funding for digital conversion grants for public television 
stations can be made available from within the Corporation for Public 
Broadcasting (CPB) $380 million appropriation, which has already been 
enacted. The fiscal year 2004 President's Budget also proposes to 
terminate the Technology Opportunities Program (TOP) as funding within 
the Department of Commerce has been redirected to higher priority 
programs.
    GSA, in coordination with DOC, is planning a major renovation of 
the 70-year old Herbert C. Hoover Building. This initiative will 
restore the great building to its original condition, bring it up to 
current code requirements, address the realities of post 9/11 security 
needs and extend the useful life of this historic building. It is 
essential to the optimal stewardship of the taxpayers money that we 
establish a Renovations Office in fiscal year 2004. In addition, the 
Department will focus on safety issues by instituting a new 
Occupational Safety and Health Program targeted toward preventing 
accidents and injuries through incident tracking and proactive 
prevention.

                               FISHERIES

    NOAA's budget request for fiscal year 2004 contains a $29.8 million 
program increase to modernize and improve the nation's fishery 
management system. Specifically, the requested funding addresses the 
need to improve socioeconomic data collection, to reduce bycatch in 
targeted fisheries, to increase fishery observer coverage, to 
streamline the current fisheries regulatory process, and to implement 
the Columbia River Biological Opinion effectively. New funds will also 
increase the understanding of the effects of climate change on marine 
and coastal ecosystems, and build a national observer program for the 
collection of high-quality fisheries and environmental data. The fiscal 
year 2004 budget includes a reduction of $40 million for the Pacific 
Salmon Treaty for which all U.S. obligations have been met.

                             CLIMATE CHANGE

    Finally, one of the highlights of the Department's fiscal year 2004 
Budget is the request of $295.9 million for NOAA's climate change 
research, observations and services. This amount includes an increase 
of $16.9 million as part of a total request of $41.6 million for NOAA's 
contribution to the President's interagency Climate Change Research 
Initiative (CCRI). The NOAA fiscal year 2004 CCRI request supports 
NOAA's efforts to: enhance ocean observations for climate; augment 
carbon-monitoring capabilities in North America as well as in key 
under-sampled oceanic and continental regions around the globe; advance 
the understanding of all major types of aerosols; establish a climate 
modeling center within NOAA's Geophysical Fluid Dynamics Laboratory, 
which will focus on research, analysis, and policy applications for the 
development of model product generation; and coordinate and manage the 
Nation's interagency climate and global change programs through the 
Climate Change Science Program Office.
    The President's CCRI led to the creation of a new interagency 
framework in order to enhance coordination of Federal agency resources 
and research activities. Under this framework, thirteen Federal 
agencies are working together under the leadership of a Cabinet-level 
committee on climate change to improve the value of U.S. climate change 
research.
    The President's fiscal year 2004 Budget request for climate change 
activities reflects the President's priorities by focusing Federal 
research on the elements of the U.S. Global Change Research Program 
(USGCRP) that can best support improved public discussion and decision-
making. Under the CCRI, various agencies will adhere to specific 
performance goals, including providing products to decision-makers 
within four years. The priorities of the CCRI are: reducing key 
scientific uncertainties; designing and implementing a comprehensive 
global climate and ecosystem monitoring and data management system; and 
providing resources to support public evaluation of a wide range of 
climate change scenarios and response options. Even in this time of 
difficult budget decisions, the President is committed to fully funding 
climate research so that we can continue to reduce the uncertainties 
associated with climate change.
    As I previously stated, this budget request for the Department of 
Commerce has been carefully crafted to focus on those core functions 
that the American people rely on from this agency. We will focus on 
promoting innovation, entrepreneurship, exports, and safety, while 
spreading opportunity to all Americans and ensuring responsible 
stewardship of our natural resources.

                    CIAO MOVED TO HOMELAND SECURITY

    Senator Gregg. Thank you, Mr. Secretary. CIAO has been 
moved over to Homeland Security, at least in theory. I am 
wondering to what extent that has actually occurred, how it is 
physically being done, and whether the transfers are affecting 
the operations past the infrastructure protection efforts.
    Secretary Evans. It has been done. As far as I know the 
transfer was made smoothly. We continue within NIST to work 
with areas of CIAO in terms of protecting cybersecurity in this 
country, but the CIAO group has been moved over.
    Senator Gregg. Have they physically left?
    Secretary Evans. Yes, gone. At least, I am not seeing them 
around there any more. On March 1, 2003, pursuant to Public Law 
107-296 Homeland Security Act of 2002, the CIAO was transferred 
from the Department of Commerce to the Department of Homeland 
Security. There are plans for the CIAO/DHS to move out of the 
Herbert C. Hoover Building, but the move has not yet taken 
place.

                 ENTRY/EXIT SYSTEM BASED ON BIOMETRICS

    Senator Gregg. NIST is doing biometric identification work. 
To what extent is that being coordinated with the INS efforts 
to produce an exit/entry system which is based on biometrics, 
do you know?
    Secretary Evans. I am certain that there is close 
coordination, because that is the purpose of it, is to be used 
in identifying people coming into this country with biometric 
techniques, and so I know there is close coordination. I am not 
sure of the specific meetings.
    Senator Gregg. I would be interested in getting, or having 
your staff get for us an explanation of to what extent you are 
working with INS and to what extent NIST has evaluated the INS 
efforts in exit/entry, and whether or not they are on the right 
track.
    Secretary Evans. Sure.
    Senator Gregg. This committee has had very serious 
reservations about INS' capacity to do exit/entry system based 
on biometrics. NIST is an extremely talented agency, filled 
with talented people, a very strong agency. I would be very 
interested in their evaluation of the INS efforts in this area.
    Secretary Evans. You bet.
    [The information follows:]

             NIST's Work With INS on the Entry/Exit System

    Under the USA PATRIOT Act of 2001 and the Enhanced Border 
Security and Visa Entry Reform Act of 2002, NIST (with the 
Attorney General and Secretary of State) is required to 
``develop and certify a technology standard, including 
appropriate biometric identifier standards, that can be used to 
verify the identity of persons applying for a United States 
visa or such persons seeking to enter the United States 
pursuant to a visa for the purposes of conducting background 
checks, confirming identity, and ensuring that a person has not 
received a visa under a different name . . .'' NIST has an on-
going mandate to provide technical guidance on appropriate 
biometric identifiers based on technology evaluations and to 
write reports with the Departments of Justice, State, Defense, 
and Homeland Security/INS on recommendations for entry-exit 
systems. The first report, entitled ``Use of Technology 
Standards and Interoperable Databases With Machine-Readable, 
Tamper-Resistant Travel Documents,'' was submitted to Congress 
on February 4, 2003. The NIST appendix to that report is 
available at http://222.itl.nist.gov/iad/894.03/
NISTAPPXNov02.pdf. The second report on biometric standards has 
been completed and is currently circulating for comments within 
the agencies. NIST is evaluating face recognition and 
fingerprint matching systems for the INS and is planning an 
evaluation of the INS' Automated Biometric INDENTification 
System (IDENT) later in fiscal year 2003.

                NIST PROGRESS INVESTIGATING WTC ATTACKS

    Senator Gregg. NIST is also investigating the WTC attack 
and the destruction of the buildings. Do you have any 
conclusions yet that we can share?
    Secretary Evans. No--well, I think there are some, Mr. 
Chairman. I know that we have been sharing with some of the 
designers in New York some of the preliminary findings. I think 
there is a preliminary report, I believe that will be out this 
summer, but the full study is scheduled to take 2 years, which 
means we will not be finished for I think another year or so, 
but I know that those who are doing the designs under the new 
construction in New York have been talking to NIST, and they 
have been communicating, but still the findings, of course, are 
preliminary.
    Senator Gregg. Do they have the funding they need? There 
has been some indication maybe too much stuff has been sent to 
the scrap heap and NIST could not get their hands on the 
necessary material.
    Secretary Evans. Right, Mr. Chairman. That was an issue 
that was brought up about 1 year ago. I went back and inquired 
and yes, there was concern about that initially. But after 
inquiring, my understanding now is, they feel like they have 
the necessary materials to provide the public with a full, and 
complete, and thorough report of what occurred, and what kind 
of standards we ought to think about implementing for providing 
more safety and security of these kinds of structures.

                     BACKLOG OF PATENT APPLICATIONS

    Senator Gregg. The Patent Office has a 400,000 backlog of 
patent applications, and that is staggering. What is the game 
plan for getting that to some sort of reasonable conclusion?
    Secretary Evans. Well, as I mentioned, part of the game 
plan is more funding, and recruiting more examiners. Part of 
the game plan is modernization of the systems going from a 
paper-loaded system to a paperless system, which will take some 
time. In general, pendency rates have not moved a lot. They 
have come down a little bit, but I think the thrust, I would 
say, Mr. Chairman, is to move from a paper system to a 
technology computer information kind of system where we make 
more use of the modern information systems we have today, as 
well as continuing to recruit more examiners.
    But I must say to you that a substantial amount of the 
funding also is going to go into a new program that we are 
implementing which is just the requalification of the examiners 
themselves. Right now, the way PTO works is, examiners, once 
they are a full-time examiner, you would think of it as tenure. 
They are always a full-time examiner, and we felt like it was 
important to have a system in place where periodically they go 
through a requalification process.
    One other area, Mr. Chairman, I think--I mean, we are 
putting a lot of energy and a lot of effort into this, because 
it is so critical not only to protecting patents here in the 
United States--not protecting them, but approving them in a 
timely kind of way, but also making sure that those patents are 
recognized and honored around the world, and we are moving very 
aggressively toward a global patent system.
    We are working aggressively with USPTO, Europe and with 
Japan--85 percent of the patents in the world are in those 
three areas, and so we are working toward a system that would 
eventually result in the mutual exploitation of search results 
in terms of integrating the information we have and sharing it 
with the European Patent Office (EPO) and with Japan, and other 
intellectual property offices and also them sharing their 
information with us. We feel like that would not only make the 
patent system more efficient but reduce a lot of duplication 
that is out there in the world today.
    So just rest assured that I think we have got a very good 
team working on this. It is certainly a big focus of ours. We 
understand, just industry after industry in our country, how 
important intellectual property is, and protecting intellectual 
property.
    Senator Gregg. Well, I do not know about other Members of 
the Senate, but I have heard from a number of folks in New 
Hampshire that their frustration with the Patent Office is 
fairly significant right now. Some of them have just given up 
on going that route, so I would be interested if there is a 
plan, a formalized plan for how you are going to reduce the 
backlog and how you are going to make it more electronically 
controlled, and how you are going to develop this international 
system. I would like to see such a plan, if it is a formal 
plan.
    Secretary Evans. We will be glad to provide that to you, 
you bet.
    [The information follows:]

    The U.S. Patent and Trademark Office (USPTO), in response to 
stakeholder input, updated its June 2002 21st Century Strategic Plan on 
February 3, 2003, and submitted it to the Congress in support of the 
fiscal year 2004 President's budget.
    The USPTO prepared its 21st Century Strategic Plan in response to 
Congressional direction. For example, the Senate CJS Subcommittee 
report language dated July 19, 2001 directed the Secretary of Commerce 
to develop a five-year plan with three core objectives: Prepare the 
agency to handle the workload associated with the 21st century economy; 
improve patent quality; and reduce patent and trademark pendency.
    The Committee further said that the plan should include: 
Recommendations to improve retention and productivity of examiner 
workforce; targeted hiring increases to deal with high-growth areas; 
improved training; E-Government and other capital improvements designed 
to improve productivity; and benchmarks for measuring progress in 
achieving each of these objectives.
    The Committee also directed that the ``electronic file wrapper'' be 
fully implemented by the end of fiscal year 2004.
    The attached plan identifies the specific actions the USPTO is 
taking to
  --Deliver an operational system to process patent applications 
        electronically by October 1, 2004.
  --Reduce duplication of effort and decrease workload by relying on 
        search results obtained via partnerships with other 
        intellectual property offices (see Work Sharing 1).
  --Achieve an interim patent pendency goal of 27 months by fiscal year 
        2008. The USPTO will continue to work toward reducing pendency 
        and pursue the long-term optimum goal of 18 months pendency 
        beyond the five-year horizon of the strategic plan.
  --Reduce total patent examiner hires through fiscal year 2008 
        compared to the fiscal year 2003 budget and business plan 
        projection.
    Each of these actions is supported by a detailed analysis of the 
issue and an implementation plan. These are posted on the USPTO web 
site and can be made available to the Senator's staff.

                    The 21st Century Strategic Plan

                           EXECUTIVE OVERVIEW

    Today, the United States Patent and Trademark Office (USPTO) is 
under siege. Patent application filings have increased dramatically 
throughout the world. There are an estimated seven million pending 
applications in the world's examination pipeline, and the annual 
workload growth rate in the previous decade was in the range of 20-30 
percent. Technology has become increasingly complex, and demands from 
customers for higher quality products and services have escalated. Our 
applicants are concerned that the USPTO does not have access to all of 
the fees they pay to have their patent and trademark applications 
examined, thereby jeopardizing the benefits intellectual property 
rights bring to our national economy. In the United States, these 
demands have created a workload crisis. The Congress, the owners of 
intellectual property, the patent bar, and the public-at-large have all 
told us that we must address these challenges aggressively and 
promptly.
    We agree. We believe that the USPTO must transform itself into a 
quality-focused, highly productive, responsive organization supporting 
a market-driven intellectual property system. And we also believe that 
we have the tools, the skills, the will and the plan to do so.
  --The tools.--The technology exists to create a high-quality, cost-
        effective, responsive, paperless patent examination process, 
        building on our current success in automating trademarks.
  --The skills.--We have a cadre of talented staff with the technical 
        expertise and the vision to help guide and support the 
        technical and, even more important, the cultural transformation 
        of the USPTO.
  --The will.--Organizational transformations require sustained 
        commitment and constancy of purpose ``from the top.'' The USPTO 
        leadership is dedicated to this task.
  --The plan.--This strategic plan lays out our approach to creating, 
        over the next five years, an agile, capable and productive 
        organization fully worthy of the unique leadership role the 
        American intellectual property system plays in both the 
        American and the global economies.
    This new 21st Century Strategic Plan is aggressive and far-
reaching. However, anything less would fall short of the expectations 
of the U.S. Congress, the applicants for, and owners of, patents and 
trademarks, the patent and trademark bar, and the public-at-large. 
Additionally, the failure to adopt this strategic plan would have 
negative consequences. We would be unable to implement our quality and 
e-Government initiatives, pendency would rise to uncontrollable levels, 
and our costs would continue to grow.
    After the implementation of this strategic plan:
  --Market forces will drive our business model.
  --Geography and time will be irrelevant when doing business with the 
        USPTO.
  --We will strengthen our ability to be ranked as one of the highest 
        quality, most-efficient intellectual property organizations in 
        the world.
  --Our products and services will be tailored to meet the needs of 
        customers.
  --Examination will be our core expertise.
  --Our employees will be recognized as expert decision makers.
  --Independent inventors, U.S. industry and the public will benefit 
        from stronger, more enforceable intellectual property rights 
        worldwide.
  --Our workplace will become a state-of-the-art facility designed for 
        the 21st Century.
  --Following implementation of this plan and its underlying 
        assumptions, including the enactment of legislation to 
        restructure fees, statutory fees will remain steady for the 
        foreseeable future.

                 ABOUT THE 21ST CENTURY STRATEGIC PLAN

    This five-year strategic plan reflects both a thorough internal 
process review and a systematic attempt to incorporate the best 
thinking of our applicants, our counterparts in Europe, Japan and other 
countries, and our stakeholders, including our Public Advisory 
Committees. Key stakeholders also include our dedicated employees, 
without whose commitment the strategic plan could not have been 
developed and its success could not be assured.
    The strategic plan takes a global perspective by envisioning the 
patent and trademark systems of the future that American innovators 
would need to remain competitive around the world. It is built on the 
premise that American innovators want to obtain enforceable 
intellectual property rights here and abroad as seamlessly and cost-
effectively as possible. It emphasizes the opportunity for the USPTO to 
collaborate with intellectual property organizations in automation, 
global patent classification, and exploitation of search results. 
Finally, the plan is predicated on changes to the way all players in 
the intellectual property system do business with the USPTO and the way 
USPTO employees respond.
    The strategic plan is supported with detailed documentation 
analyzing all of the related issues, a five-year implementation plan 
with identified critical tasks, proposed revisions to the fiscal year 
2003 budget request to enable timely implementation of the strategic 
plan, and corresponding proposed legislation and regulations necessary 
for a successful multi-year implementation.
    This strategic plan cannot succeed without enactment of the 
legislation changing the USPTO's current fee schedule and access to 
revenue generated in fiscal year 2003, to the extent provided in the 
President's fiscal year 2003 Budget, revisions to current rules, and 
legislation for streamlining the patent and trademark systems to 
facilitate these changes. There are a number of variables, such as 
potential changes in restriction practice and the use of commercial 
search services that could affect our projected costs and revenues. 
Once they have been clarified, any ensuing revisions to our program 
costs and fee schedule will be resolved in the context of the USPTO's 
annual budget submission to the Congress.

Proof of Concept
    To ensure the USPTO proposes appropriate changes to patent and 
trademark laws, makes changes to internal processes that provide 
benefits and increased efficiency, and makes sound investment 
decisions, the initiatives proposed in this plan will be subjected to 
thorough evaluation. Pilot projects will be initiated and tested 
wherever necessary. Evaluation plans will incorporate, where 
appropriate, measurable objectives, critical measures of success, 
baseline data, and conditions for full implementation.

Performance Measures
    This plan contains measurable objectives and milestones for each of 
the general goals. The annual budget submission to the Congress will 
provide additional criteria by establishing key measurements and yearly 
milestones that will be used to determine the USPTO's success in 
achieving these goals. The annual integrated budget/performance plan is 
the most efficient and effective way of establishing accountability by 
making sure that performance measures and milestones are consistent 
with the views of the Administration and the Congress in the enacted 
annual budget.

                            STRATEGIC AGENDA

Vision
    The USPTO will lead the way in creating a quality-focused, highly 
productive, responsive organization supporting a market-driven 
intellectual property system for the 21st Century.
    We believe that quality must permeate every action taken by every 
employee of the USPTO. The new initiatives in our strategic plan are 
targeted toward creating a cultural transformation whereby quality is 
the principal focus of everything we do.

Mission
    The USPTO mission is to ensure that the intellectual property 
system contributes to a strong global economy, encourages investment in 
innovation, and fosters entrepreneurial spirit.
    In order to accomplish our mission, we have prepared this strategic 
plan. Provided we receive the funding and statutory changes necessary 
to implement this new strategy, we will:
  --Enhance the quality of patent and trademark examining operations 
        through consolidation of quality assurance activities in fiscal 
        year 2003.
  --Achieve 27 months overall patent pendency goal \1\ in fiscal year 
        2008.
---------------------------------------------------------------------------
    \1\ Pendency is a measurement of USPTO's traditional examination 
processing time; i.e., from filing (under 35 U.S.C. 111(a)) to ultimate 
disposal.
---------------------------------------------------------------------------
  --Reduce total patent examiner hires through fiscal year 2008 by 
        2,400 compared to the 2003 Business Plan.\2\
---------------------------------------------------------------------------
    \2\ The 2003 Business Plan was submitted to the Congress in 
February 2002 as part of the USPTO's fiscal year 2003 Budget.
---------------------------------------------------------------------------
  --Accelerate processing time by implementing e-Government in 
        Trademarks by November 2, 2003, and in Patents by October 1, 
        2004.
  --Competitively source classification and search functions, and 
        concentrate Office expertise as much as possible on the core 
        government functions.
  --Expand our bilateral and multilateral discussions to strengthen 
        intellectual property rights globally and to reduce duplication 
        of effort among offices.

Strategic Themes
    To achieve our vision and accomplish our mission, we must transform 
our organization and become a more agile, more capable and more 
productive USPTO. The Congress has directed us to (1) improve patent 
and trademark quality, (2) aggressively implement e-Government to 
handle the workload associated with the 21st Century economy, and (3) 
reduce patent and trademark pendency. We have identified three 
strategic themes that correspond directly to these Congressional 
requirements:
  --1. Agility: Address the 21st Century Economy by Becoming a More 
        Agile Organization.--We will create a flexible organization and 
        work processes that can handle the increasing expectations of 
        our markets, the growing complexity and volume of our work, and 
        the globalization that characterize the 21st Century economy. 
        We will work, both bilaterally and multilaterally, with our 
        partners to create a stronger, better-coordinated and more 
        streamlined framework for protecting intellectual property 
        around the world. We will transform the USPTO workplace by 
        radically reducing labor-intensive paper processing.
  --2. Capability: Enhance Quality through Workforce and Process 
        Improvements.--We will make patent and trademark quality our 
        highest priority by emphasizing quality in every component of 
        this strategic plan. Through the timely issuance of high-
        quality patents and trademarks, we will respond to market 
        forces by promoting advances in technology, expanding business 
        opportunities and creating jobs.
  --3. Productivity: Accelerate Processing Times Through Focused 
        Examination.--We will control patent and trademark pendency, 
        reduce time to first Office action, and recover our investments 
        in people, processes and technology.
    We will transform the USPTO by adhering to these themes in each of 
the improvement initiatives upon which this strategic plan is based, as 
well as in all of our other programs. These initiatives are discussed 
in more detail under each of the major theme sections.

Agility: Address the 21st Century Economy by Becoming a More Agile 
        Organization
    An agile organization responds quickly and efficiently to changes 
in the economy, the marketplace, and the nature and size of workloads. 
In pursuit of an agile organization, the USPTO will focus both 
internally and externally.
    As a first priority, we have made electronic end-to-end processing 
of both patents and trademarks the centerpiece of our business model.
    We will create a nimble, flexible enterprise that responds rapidly 
to changing market conditions. We will make the USPTO a premier place 
to work; we will rely on a smaller cadre of highly trained and skilled 
employees; and we will place greater reliance on the private sector, 
including drawing on the strengths of the information industry. We will 
enhance the quality of work life for our employees by exploring 
expansion of work-at-home opportunities and moving to the new Carlyle 
campus facility in Alexandria, Virginia.
    Further, we will enhance existing and establish new alliances with 
our friends in other national and international intellectual property 
organizations to strengthen American intellectual property rights 
around the world.
    Specific actions, with parenthetical cross-references to the 
analyses and implementation plans in the Appendices, include:
            Implement automation for patent and trademark applications
    Develop a trademark electronic file management system and begin e-
Government operations on November 2, 2003, in tandem with 
implementation of the Madrid Protocol. [E-Government 1]
    Deliver an operational system to process patent applications 
electronically by October 1, 2004, including electronic image capture 
of all incoming and outgoing paper documents. [E-Government 2]
    Develop an automated information system to support a post-grant 
patent review process. [E-Government 3]
    Establish an information technology security program for fully 
certifying and accrediting the security of automated information 
systems. [E-Government 4]
    Provide back-up systems to ensure maximum availability of computer 
systems to examiners, attorneys, the public and other patent and 
trademark offices by establishing appropriate back-up systems. [E-
Government 5]
            Expand work-at-home opportunities
    Increase the efficiency and return on investment of our work-at-
home program and thereby encourage more employees to participate. 
[Work-at-Home 1]
            Increase flexibility through greater reliance on the 
                    private sector or other intellectual property 
                    offices
    Increase reliance on the private sector or other intellectual 
property offices for:
    Classifying patent documents. [Flexibility 1]
    Supporting national application and Patent Cooperation Treaty 
search activities. [Flexibility 2]
    Transitioning to a new global patent classification system. 
[Flexibility 3]
    Classifying trademark goods/services and searching design codes. 
[Flexibility 4]
            Global Development: Streamline intellectual property 
                    systems and strengthen intellectual property rights 
                    around the world
    Promote harmonization in the framework of the World Intellectual 
Property Organization and its Standing Committee on the Law of Patents; 
resolve major issues in a broader context and pursue substantive 
harmonization goals that will strengthen the rights of American 
intellectual property holders by making it easier to obtain 
international protection for their inventions and creations. [Global 
Development 1]
    Negotiate bilateral and multilateral agreements to facilitate 
global convergence of patent standards. [Global Development 2]
    Accelerate Patent Cooperation Treaty reform efforts, focusing on 
the USPTO's proposal for simplified processing. [Global Development 3]
    Develop a ``universal'' trademark electronic application by 
leveraging the United States' experience with electronic filing of 
trademark applications. [Global Development 4]
            Share search results with other intellectual property 
                    offices
    Reduce duplication of effort and decrease workload by relying on 
search results obtained via partnerships with other intellectual 
property offices. [Work Sharing 1]
            Planned Agility Accomplishments
    Accelerate processing time by implementing e-Government in 
Trademarks by November 2, 2003, and in Patents by October 1, 2004.
    Competitively source classification and search functions, and 
concentrate USPTO expertise as much as possible on core government 
functions.
    Expand our bilateral and multilateral discussions to strengthen 
intellectual property rights globally and to reduce duplication of 
effort among intellectual property offices.
Capability: Enhance Quality Through Workforce and Process Improvements
    A capable organization has a highly skilled, appropriately sized 
workforce; it has systems and procedures that enhance the capability of 
every employee; and it has in place effective quality management 
processes to ensure high quality work and continuous performance 
improvement. In other words, a capable organization is committed to 
doing the right job right--the first time and every time. We will be 
such an organization.
    Quality will be assured throughout the process by hiring the people 
who make the best patent and trademark examiners, certifying their 
knowledge and competencies throughout their careers at the USPTO, and 
focusing on quality throughout the examination of patent and trademark 
applications. By bolstering confidence in the quality of U.S. patents 
and trademarks, the USPTO will enhance the reliability in the quality 
of products and services needed to increasingly spur our economy and 
reduce litigation costs.
    Specific actions, with parenthetical cross-references to the 
analyses and implementation plans in the Appendices, include:
            Enhance workforce capabilities by certifying competencies
    Create an enterprise-wide training strategy that meets the needs of 
the new business model and the e-Government generation. [Transformation 
1]
    Restructure the USPTO by redirecting resources to core examination 
activities, implement revised performance plans to incorporate changes 
required to implement an e-Government workplace, meet agency-wide 
standards for senior executives, and implement selected award packages. 
[Transformation 2 and 3]
    Transform the workforce by exploring alternative organizational 
concepts and structures. [Transformation 4]
    Ensure that professionals, support staff and supervisors 
responsible for the patent process possess the requisite skills needed 
to carry out their responsibilities. [Transformation 5]
    Certification of knowledge, skills and ability in the Trademark 
Process. [Transformation 6]
    Implement pre-employment testing for patent examiners. 
[Transformation 7 and 8]
    Recertify the knowledge, skills and abilities of primary examiners 
to ensure currency in patent law, practice and procedures. 
[Transformation 9]
    Certify the legal competency and negotiation abilities of patent 
examiners before promotion to grade 13. [Transformation 10]
    Improve the selection and training of supervisory patent examiners 
to focus on their primary responsibilities of training patent examiners 
and reviewing and approving their work. [Transformation 11]
            Make improvements in patent and trademark quality assurance 
                    techniques
    Enhance the current quality assurance programs by integrating 
reviews to cover all stages of examination. [Quality 1]
    Expand reviews of primary examiner work. [Quality 2]
    Engineer quality into our processing including the selective 
expansion of the ``second pair of eyes'' review \3\ of work products in 
such advanced fields of technology as semiconductors, 
telecommunications, and biotechnology. [Quality 3 and 4]
---------------------------------------------------------------------------
    \3\ A secondary review of applications for proper claim 
interpretation and to ensure that the closest prior art has been 
discovered and correctly applied.
---------------------------------------------------------------------------
    Incorporate an evaluation of search quality into the patent work 
product review process, and survey practitioners on specific 
applications. [Quality 5 and 6]
    Enhance the reviewable record of prosecution in patent 
applications. [Quality 7]
    Certify and monitor the quality of searching authorities to ensure 
that patent searches provided by the private sector contractors or 
other patent offices are complete and of the highest quality. [Quality 
8]
            Make process improvements that contribute to enhanced 
                    quality through legislation/rule changes
    Propose legislation and/or rule changes that have been identified 
as critical for the accomplishment of this strategic plan. Continue the 
process of seeking comments from stakeholders on proposed changes.
            Planned Capability Accomplishments
    Enhance the quality of patent and trademark examining operations 
through consolidation of quality assurance activities in fiscal year 
2003.
Productivity: Accelerate Processing Times Through Focused Examination
    We are committed to promoting advances in technology, expansion of 
business opportunities and creation of jobs through the timely issuance 
of high quality patents and trademarks. A productive organization 
maximizes its output of work performed. Improved productivity is key to 
reducing pendency and inventory.
    This strategic plan has aggressive timeliness goals: to make 
available, on average, a first Office action for first-filed U.S. non-
provisional patent applications, at the time of 18-month publication, 
and a patent search report for other patent applications in the same 
time frame--by far the fastest in the world. This will be accomplished 
through a redesign of the entire patent search and examination systems 
based upon multiple-examination tracks, greater reliance on qualified 
patent search services, and variable, incentive-driven fees. In 
Trademarks, achieve an average 12-month total pendency. This will be 
accomplished by a three-track examination system. Likewise, both 
Patents and Trademarks will restructure the way they do business to be 
compatible with an e-Government environment.
    Specific actions, with parenthetical cross-references to the 
analyses and implementation plans in the Appendices, include:
            Transition to market-driven examination options
    Adopt procedures that give greater choice and flexibility to 
trademark applicants for filing and examination of applications for the 
registration of trademarks, with a focus on using technology to improve 
the process and provide a lower cost filing option. [Pendency 1]
    Move from a ``one-size-fits-all'' patent examination process to a 
multi-track examination process that leverages search results of other 
organizations and permits applicants to have freedom of choice in the 
processing of their applications. This new process will eliminate 
duplication of effort, encourage greater participation by the applicant 
community and public, and improve the quality of our patents and 
decrease processing time. [Pendency 2]
    Address the number of claims presented for examination in an 
application and the size of applications through fee-setting 
legislation to reflect the cost of processing complex applications. 
[Shared Responsibility 1]
    Achieve greater examiner productivity by reducing their prior art 
search responsibilities. [Pendency 3]
            Implement an accelerated examination path option
    Offer patent applicants the market-driven new ``rocket docket'' 
option of choosing an accelerated examination procedure with priority 
processing and a pendency time of no longer than 12 months. 
[Accelerated Examination 1]
            Share responsibility for timely and high quality patents 
                    and trademarks between applicant and the USPTO
    Seek enactment of legislation to restructure the USPTO fee schedule 
by mid-fiscal year 2003, and thereby create incentives that contribute 
to achievement of USPTO goals. For example, the filing fee will be kept 
as low as possible to incentivize applicants to file, and the refund 
provision expanded to allow the USPTO to refund a portion of the search 
fee if the application is expressly abandoned before search or 
examination. [Shared Responsibility 1]
    Make patents more reliable by proposing amendments to patent laws 
to improve a post-grant review of patents. [Shared Responsibility 2]
            Planned Productivity Accomplishments
    Achieve first Office action patent pendency of 14.7 months in 
fiscal year 2008.
    Achieve an interim patent pendency goal of 27 months by fiscal year 
2008. Note: The USPTO will continue to work toward reducing pendency 
and pursue the long-term optimum goal of 18 months pendency beyond the 
five-year horizon of this strategic plan. Our best estimate is that it 
will take at least a decade to achieve the 18-month goal.
    Reduce total patent examiner hires through fiscal year 2008 by 
2,400 compared to the 2003 Business Plan projection. [See Figure 1]



              Figure 1. Patent Examiner Hiring Comparison

            Critical Needs
    The performance commitments outlined in this strategic plan demand 
extraordinary effort from every USPTO employee, and the full support of 
our key stakeholders. Our strategic plan is built around the following 
critical needs.
Multilateral and Bilateral Agreements
    We need to consult with, and receive support of, other patent 
offices in structuring new bilateral and multilateral initiatives.
Legislation/Rules
    We will need enactment of legislation by the Congress to adjust 
certain patent and trademark fees and access to revenue generated by 
mid-fiscal year 2003 to the extent provided in the President's fiscal 
year 2003 Budget. We also will need to promulgate final rules to effect 
fee changes.
    We will need to continue working to develop the proposed 
legislation and rule changes that have been identified, and continue 
the process of seeking comments from interested parties on ways to 
improve our operation.
            Labor Relations
    We will need to notify the three bargaining units representing 
USPTO employees of proposed changes and negotiate, where necessary, any 
changes in working conditions.
Budget
    We will need enactment of an appropriation for fiscal year 2003 
that is consistent with the level of the President's 2003 Budget.
Move to Carlyle in Alexandria, Virginia
    We will need to carefully plan the logistics for relocating the 
USPTO to a consolidated campus in Alexandria, Virginia, while 
minimizing any adverse effects on employees, applicants and the public. 
The USPTO is quickly moving into the implementation phase of the 
relocation of its facilities from 18 buildings spread throughout 
Crystal City to a single lease in a consolidated campus. This 
consolidation is expected to save us $72 million over the 20-year term 
of the lease, but it is a highly complex and difficult endeavor.
            President's Management Agenda
    Secretary Donald Evans has committed the Department of Commerce to 
speedy implementation of the President's Management Agenda. President 
Bush has stated that true government reform must be based on a 
reexamination of the role of the Federal Government. In this regard, he 
has called for ``active, but limited'' government: a government that 
empowers states, cities, and citizens to make decisions; ensures 
results through accountability; and promotes innovation through 
competition. The reforms that he has identified to help the Federal 
Government adapt to a rapidly changing world include a government that 
is: Citizen-centered--not bureaucracy-centered; results-oriented--not 
process-oriented; and market-based--actively promoting, not stifling, 
innovation, and competition.
    This strategic plan supports the President's Management Agenda:
    Human Capital.--We will provide the tools and the resources to 
ensure that we have a highly qualified, certified, knowledge-based, 
accountable workforce. Specifically, we will strengthen pre-employment 
testing; develop a competency certification program; create a new 
labor-management paradigm to meet changing business needs; streamline 
our workforce to maximize quality and efficiency; and focus our 
training, performance evaluation and assessment environment on our core 
expertise--examination.
    Competitive Sourcing.--We are committed to achieving performance 
enhancements and cost-savings, through the process of competitive 
sourcing. This process compares the capabilities and costs of 
commercial service providers with current government program providers. 
Greater competition drives down costs and yields more innovative 
solutions. We will seek improved effectiveness in the following areas: 
patent searching, patent documentation classification, and information 
technology and logistical support operations.
    Improved Financial Management.--The USPTO has a strong, fully 
integrated financial management system in place and we will continue to 
strengthen our internal controls, improve the timeliness and usefulness 
of our management information and continue to achieve an unqualified 
financial audit opinion.
    E-Government.--We are accelerating deployment of critical automated 
information systems, particularly electronic end-to-end processing of 
patent and trademark applications. In addition, we are currently 
working on ways to improve delivery schedules, reliability, 
performance, security and the cost of all our automated information 
systems.
    Budget/Performance Integration.--We will allocate budget resources 
to the programs based on the concept of linking them to the achievement 
of both enterprise-wide goals and individual unit performance. The 
USPTO will expand the involvement of applicants and the public in 
assessing the accomplishment of our goals and performance targets.
    As a reflection of our commitment to fund our strategic priorities, 
we conducted a comprehensive review of current operations and 
redirected substantial fiscal year 2003 resources toward improving 
examination quality and implementing e-Government processing.
Long-term Agenda
    This strategic plan is only the first step toward creating a 
quality-focused, highly productive, responsive USPTO that supports a 
market-based intellectual property system for the 21st Century. Once 
the initial phases of this plan have been supported, adopted and 
implemented, the USPTO will explore further options to enhance its 
ability to more fully operate like a business.
    Within the framework of the legislative and regulatory packages 
there are a number of items that will be implemented in the out-years 
of the strategic plan.
    Restriction practice.--We will conduct a study of the changes 
needed to implement a Patent Cooperation Treaty (PCT) style unity of 
invention standard in the United States. The study will be completed 
and appropriate legislation will be introduced before the end of the 
108th Congress.
    Patent term adjustment.--Before seeking legislation to simplify 
patent term adjustment, we will explore a number of options to address 
this issue with the small business community and other key 
stakeholders.
    Mutual exploitation of examination results.--In anticipation of 
achieving our long-term goal of substantive patent harmonization, we 
will take a cautious approach to mutual exploitation of examination 
results by first evaluating International Preliminary Examination 
Reports during national stage examination. We will subsequently analyze 
the potential of whether the acceptance of examination results (granted 
patents) from foreign offices is a proper basis for use in counterpart 
applications in the United States. However, the USPTO will never 
recommend any changes that would compromise our sovereign right to 
determine patentability issues or to preclude our right to make further 
examinations when necessary.
    Copyright issues.--As part of the implementation of the electronic 
file wrapper, we will ascertain the best means for assuring that these 
documents in an application file that may be subject to copyright 
protection can be included in the USPTO's databases. The intent of this 
option would be to ensure full public access to all the information 
contained in a pending application file.
    Third party request for reexamination.--As part of the initiative 
to seek post-grant review legislation, we will explore the need for 
retention of third-party requested reexamination.
    District court actions.--We will evaluate the desirability of a 
revision to the provisions for judicial review of USPTO decisions to 
make an appeal to the U.S. Court of Appeals for the Federal Circuit the 
sole avenue for judicial review of a Board of Patent Appeals and 
Interferences or a Trademark Trial and Appeal Board decision.
    Patent Cooperation Treaty Activities.--We will actively pursue 
revisions to Patent Cooperation Treaty search and examination 
guidelines to achieve an enhanced level of reliance on PCT 
International Search Reports and International Preliminary Examination 
Reports.
    Business-like practices.--We also will explore whether we have a 
good justification for operating in a more business-like manner.
    USPTO Campus.--Once we have settled into the Carlyle campus and 
have fully implemented automated patent and trademark processing, we 
will be able to assess the feasibility of expanding our work-at-home 
program by using such virtual office concepts as telecommuting and 
flexible workplace to the maximum potential.
    Examiner Training.--We will evaluate the feasibility of reinstating 
the Examiner Education Program through corporate sponsorship to enable 
patent examiners to gain better insights into technological 
developments in the fields in which they examine.
Some Final Thoughts
    This 21st Century Strategic Plan sets forth an ambitious agenda to 
resolve the crisis all intellectual property organizations are facing. 
We believe economic and technological progress in the United States and 
the global market can be significantly enhanced through the 
implementation of the initiatives proposed in this plan.
    We intend to refine and update our strategic plan periodically to 
adjust to changing conditions and to incorporate the best thinking of 
the entire intellectual property community. We are eager to work with 
those who believe, as we do, that American innovators and businesses 
must have the very best intellectual property system in the world. This 
21st Century Strategic Plan represents an important first step in the 
pursuit of this goal.

                          FREE TRADE CONCERNS

    Senator Gregg. Senator Hollings.
    Senator Hollings. Thank you, Mr. Chairman.
    Mr. Secretary, we have got a hot war ongoing, and there is 
no question in this Senator's mind or anybody in this room that 
we will win that one, but we have got a cold war economically 
that we are losing, and you are the Chairman of the Joint 
Chiefs of Staff in that cold war.
    As Secretary of Commerce, you are the most important 
member, and with the President, the most influential member, 
and we are looking at the results. The war did not start when 
you folks came to town. This war has been going on since World 
War II, and we had the Marshall Plan. It worked. We sent over 
the expertise, we sent over the technology and everything else 
into Europe and to the Pacific Rim and they revived them.
    But now you look and you find out you have got over $420-
some billion in the deficit in the balance of trade last year, 
and now it is inching up to over $500 billion this year, and I 
am looking at different items--well, I've already lost, don't 
worry about my questions being about textiles. They are 
Republican and they have gone anyway, so it is a sort of twofer 
for me.
    Senator Gregg. They left New Hampshire a long time ago to 
go to South Carolina.
    Senator Hollings. Over two-thirds of the clothing I am 
looking at is imported, over 86 percent of the shoes on the 
floor are imported, but then I look at the list that you made 
of critical items to our national security, and you list about 
some 500, and we have a $5 billion deficit in the balance of 
trade in those critical items.
    We have got a deficit in the balance of trade in 
semiconductors. I know I have got a deficit in the balance of 
trade in cotton. I am riding through the cotton fields 
politicking down home, but I am importing Chinese cotton 
because we do not produce enough in this country, and then I 
looked and found that we made finally a deficit in the balance 
of trade in farm products for the second time in the history of 
the country.
    Free trade is fine in the textbooks, and fine for England 
when she was in control of the world's empire. In other words, 
when old Alexander Hamilton got the note that what we ought to 
do, having won our little freedom as a colony, we ought to 
trade back what we produced best, and they in Britain would 
trade back what they produced best, the doctrine of comparative 
advantage, David Ricardo, old Hamilton said bug off--we are not 
going to remain your colony, just shipping our timber and our 
coal and our iron ore and farm products. We are going to build 
up our own manufacturing.
    So he introduced, and by gosh, old Madison supported him in 
the second bill. The first bill was for the U.S. Seal as a 
Nation. The second bill that passed the Congress was the 50-
percent tariff bill, protectionism, on about 60 articles, and 
we started rebuilding, and in fact we financed the country with 
protectionism until 1913, when we finally got the income tax.
    Other countries are doing the same thing, after World War 
II, the Japanese, the Koreans and everybody coming right on 
down the road, and they do not practice free trade, they 
practice protectionism.
    One of the big reasons behind my Advanced Technology 
Program was to try to compete with the subsidization, the 
financing of the industry, the banking, and not only that, but 
also protecting in every respect the retail markets, and the 
pricing by our foreign competitors. My Lexus cost me $30,000. 
In downtown Tokyo, that same car, I priced it, is $45,000.
    So my point is, I am trying to bring around our 
administration to where even Ronald Reagan was. He was long on 
common sense. We were losing out on semiconductors and still 
are, but he put in a voluntary restraint agreement on 
semiconductors and they instituted at the congressional level, 
Senator Danforth and myself, Sematech. We had VRAs in steel and 
automobiles and machine tools, and it worked, and it saved 
those industries.
    Now, we have got to start competing here. I am looking at 
the Ambassador from Singapore, Frank Levin. He recently 
concluded this United States-Singapore free trade agreement, 
and Levin said in the long run, and I quote him, the most 
significant economic aspect of this FTA, free trade agreement, 
could be provisions allowing products assembled in the two 
Indonesian outer islands to be counted as Singaporean in origin 
for the purpose of the FTA. This would allow U.S. electronics 
manufacturers to take advantage of low wage rates on those 
islands to assemble components from Singapore and then the 
electronic products can enter the United States duty free. Do 
you agree with that?
    Secretary Evans. Well, I have not seen the statement. You 
read the statement. I have not seen it before. I mean, I must 
say that I think that when you have a free trade agreement with 
Singapore, you have a free trade agreement with Singapore. You 
do not have a free trade agreement with some other country, or 
some other island. That is who the free trade agreement is 
with.
    And so I think there is a basic principle, and it is 
products and services that come from that country, not from 
some other sovereign nation or country to that country and into 
the United States, but I must admit, I do not know the exact 
relationship of those islands with Singapore. Are they separate 
countries or separate sovereign nations, or are they a part of 
Singapore? I do not think they are.
    Senator Hollings. Well, it is not the technicality of the 
thing, it is the actual tenor and thrust of low wage rates. 
That is what happened--58,000 textile jobs have gone from my 
little State of South Carolina down to Mexico. If your 
competition leaves, you have got to leave, so that swishing 
sound that old Ross talked about, I am telling you right now, 
we can hear it loud and clear in the Piedmont section of South 
Carolina, I can tell you.
    That is the whole point. What we have got to do is start 
competing, and we have done everything for that export 
administration. Your Commerce Department has commercial 
attaches around the world, and we have done everything to help 
our businesses compete.
    One other thing that we do is just that, the Advanced 
Technology Program. The distinguished Secretary talks growth, 
growth, growth. That is the buzzword around here. You get 
everybody on the message, so the growth thing is the Advanced 
Technology Program. That gives the growth. There is not any 
question.
    We have got I do not know how many studies. I think there 
were 14 studies, the Department of Commerce Inspector General, 
the National Academy of Sciences, the National Research 
Council, and go right on down the list, and they found that, 
quote, ATP could use more funding effectively and efficiently, 
and we cut and eliminated that and the Manufacturers Extension 
Partnership Program, but we give money to the Bureau of 
Economic Analysis to get more analysis. That is not going to 
hire any more people, except pointy-headed intellectuals, as 
George Wallace would say.
    We give money to the Patent and Trademark Office----
    Senator Gregg. We don't quote from George Wallace.
    Senator Hollings. That's right. Well, I thought I'd get 
you. I like to stick the Chairman every now and again.
    We give money to the International Trade Administration for 
promoting U.S. exports and all those things, they are not going 
to get growth. The one thing that is going to get the growth, 
and it has proved out, and they are not pork, they have got to 
be vetted by the National Academy of Engineering, like you 
said, and NIST.
    I got together--we had a fellow over there, Craig Fields in 
DARPA, and he found out the Navy program for research was rapid 
manufactured parts. We got it going through the Department of 
Commerce, because a boat would break down in the gulf and the 
destroyer is 30 years old, or whatever it is, and the part, 
they have to languish there in the gulf for 2 months and then 
go back. We have got a system now where they do not languish 
over 24 hours.
    So we have got DARPA, we have got NIST, we have got the 
Advanced Technology Program, and why do we eliminate it?
    Secretary Evans. Well, again, like I said, those are good 
programs, no question about it.
    Senator Hollings. That is all. You do not have to explain 
any more. I am going to quote you.
    Secretary Evans. You can.
    Senator Hollings. Thank you. I would yield to the 
distinguished Senator from Wisconsin.
    Secretary Evans. Good.

              MANUFACTURING EXTENSION PARTNERSHIP PROGRAM

    Senator Kohl. Thank you, Mr. Chairman, and Secretary Evans, 
I would like to talk a little bit about the Manufacturing 
Extension Partnership Program.
    I know this administration supports research and 
development to maintain American leadership and technology 
development and commercialization. To quote from the Commerce 
Department's Web site, ``Americans will never win the game to 
see who can pay their workers less. We do not want to, and 
continued innovation means that we will not have to. Innovation 
excellence starts with research and development, and since 
taking office, the President has proposed record levels of 
Federal R&D.''
    So Mr. Secretary, I am concerned and puzzled by your 
proposed budget, which includes only $12.6 million for the 
Manufacturing Extension Partnership Program, called MEP. This 
program has always had bipartisan congressional support. By way 
of comparison for fiscal year 2003, we funded the program at 
well over $100 million. Given the current situation, I 
therefore cannot understand why you would virtually eliminate a 
program like this, which truly makes a difference.
    The United States is losing hundreds of thousands of 
manufacturing jobs and production know-how to low-wage 
countries like China. We have our largest imbalance with China, 
an imbalance growing by 30 percent a year. In my State of 
Wisconsin, the jobs we are losing to overseas production are 
high-paying jobs.
    To help counter this trend, my State MEP centers work 
directly with small manufacturers to help these companies 
compete by being more productive and more effective, and so my 
question is, why are you virtually gutting Federal support for 
this program? Virtually half of the program's costs and 
expenses come from the Federal Government. Small manufacturers 
in my State have said this program is important to them, and so 
I do not know what I should be telling them with respect to 
what I know is your commitment to the development of small 
manufacturing innovation, efficiency, technology, and your 
apparent opinion that the MEP program is not all that 
important. I just give you this map for you to peruse.
    Secretary Evans. Sure, thanks Senator.
    Senator Kohl. Those MEP centers, as you can see, are all 
over the country. There are hundreds and hundreds of MEP 
centers, and without Federal support they may well evaporate.
    Senator Gregg. Aren't they called Hollings centers?
    Senator Kohl. Pardon me?
    Senator Gregg. No, I think they're called Hollings centers, 
aren't they?
    Senator Kohl. Hollings centers?
    Secretary Evans. You know, I will say what I said earlier, 
I think, that there are certainly some very good stories from 
ATP that one can look to and can say were successes. I think 
the same thing applies to MEP, the Manufacturing Extension 
Partnership Program. I travel all across the country on 
university campuses, from time to time, talk to universities 
and how they are participating in these MEPs with the Federal 
Government, with other cities, with counties and so I am very 
much aware of the programs.
    First of all, I would just say it is a matter of 
priorities, and understanding at some point you have to draw 
the line, and we are not all going to draw the line at exactly 
the same place, and I know that and you know that, and so I am 
more than happy to work through the budget process with the 
committee and talk about our differences with respect to these 
programs, but when you look at the MEP program, what confuses 
me is why this program would not be a success in the private 
sector, and the reason I say that is because the studies people 
show me and want to give to me in the way of results are the 
sizeable returns that people enjoy by participating in the MEP.
    Well, having been somebody that was out there in the 
private sector for some 26 years of my life, that looks like to 
me a pretty good opportunity to start a business, because if I 
can give those kinds of returns to some of the small businesses 
in the area, then it seems like they would be willing to pay me 
for that service I am providing to them.
    You know, I had the same kind of issue, the same related 
issue with ATP, and that I really felt like if we were going to 
provide funding for seed capital, or venture capital for 
research, and if it is successful, then maybe some of that 
ought to come back to the American taxpayer that funded it to 
begin with.
    So I think it is good programs that--what I see opportunity 
for, I see some opportunity for the private sector to step in 
and provide the same kind of service. And I also see an 
opportunity, if it is successful, if it works, then maybe there 
is an opportunity to return some of the benefits, not all of 
them, but some of those benefits back to the American taxpayer 
to help pay for the program, if the program were to continue.
    Senator Kohl. I do not totally disagree with what you are 
saying, but my response is that this is not entirely a Federal 
program. This is a 50-50 partnership between the Federal 
Government and private industry, and so the question is not 
really why does the Federal Government have to fund this 
program entirely. It is that, what is wrong with the 
partnership concept?
    I mean, if this were 100 to nothing, or 100 to zero in 
terms of percent of funding, I would understand what you are 
saying, but it is 50-50. It seems to me that is reasonable--
reasonable, and I guess my question is, why would you all take 
the position that on your list of priorities, in terms of 
funding, that almost comes down to zero?
    Secretary Evans. Well, again I guess I would say, Senator, 
it is priorities. I mean, like you, we think about the Federal 
debt and the deficit, and there are lots of worthwhile programs 
that we would like to see funded, but the resources are not 
there to fund all of the programs that we would all like to see 
funded, and so you have to draw the line some place. You have 
to make tough choices, and I understand that, we will have 
differences of opinion as to where the line should be drawn, 
and this is one of those areas where we have a difference of 
opinion.
    I am not here saying that these programs have not provided 
a service. I am not here saying that there is not some good 
results to point to historically, but I am saying that one, 
particularly at this moment in our history, we have some 
priorities of homeland security and national security that we 
are all certainly very focused on, and these are just some 
tough choices that have to be made, but certainly, as I 
mentioned, I look forward to working through the process, 
working with the committee and working through our differences 
of opinion.
    Senator Kohl. Well, thank you. I will keep on badgering if 
I can, and see if we cannot get something.
    Secretary Evans. Sure, sure.
    Senator Gregg. The Senator from Wisconsin is a very good 
badger.
    Secretary Evans. Very good, very good. Not bad. Very good, 
Chairman.
    Senator Gregg. Mr. Secretary, following up on the Senator's 
point, your comment that maybe there should be a greater return 
to the taxpayer when these MEPs produce a commercial event that 
has profitability, do you have language that you would insert 
to change the programs to create that atmosphere?
    Secretary Evans. No, Mr. Chairman, I have not. It is 
something that we would be glad to look at and would be glad to 
think about. It just seems that if you have a company that 
enjoys some 25 percent return or 35 percent return from the 
services they have been provided, then maybe they would want to 
return some funding back to the center to help some other small 
manufacturer who comes along.
    Senator Gregg. I'm attracted to the idea, so if we end up 
refunding these as a result of the Senator from Wisconsin's 
energies, I would be interested if you had language that could 
accomplish that as a part of the exercise.
    Secretary Evans. I know if I was out there running a small 
business and I had this available to my company, and it was 
successful, and we had great results from it, I would feel some 
kind of responsibility to support that program in a pretty 
direct kind of way, and so that the program could benefit other 
small, or other manufacturing companies that come along behind.
    Senator Kohl. They do. I say, the program is supported 50 
percent by these companies, so it is not as though they are 
only taking. They are also giving to the program.
    Senator Gregg. On ATP, we really do not have any place in 
the Government right now where people who are coming up with 
creative ideas on the issue of counterterrorism, technology 
ideas, can go and get a grant quickly that would allow them to 
expand their efforts, and I do not know about other offices. 
Maybe once a month somebody comes in with some fairly unique 
idea as to how they are going to screen somebody, or what they 
can do, or how they are going to develop something.

             RESEARCH AND DEVELOPMENT FOR COUNTERTERRORISM

    Would it make sense if we reauthorized or refunded ATP to 
redirect it into an exercise of being more focused on 
counterterrorism, producing technology for counterterrorism, 
experimental or commercial?
    Secretary Evans. I guess what has been called to my 
attention is, Homeland Security is requesting some $900 million 
in this area of R&D for counterterrorism.
    Senator Gregg. How are they going to oversee that? Well, we 
will have Secretary Ridge. We will ask him.
    We have been joined by the chairman of the full committee.
    Senator Stevens. Good morning, Mr. Secretary.
    Senator Gregg. Do you have anything more?
    Senator Hollings. Yes, I will, but for example, from 1992 
to 2004, the ATP funded $270 million in projects with primary 
relevance to the detection of and protection from and response 
to potential terrorist activity. They have been coming to my 
office, too, and I have been sending them over there and it is 
working. You are helping Secretary Ridge.
    Senator Gregg. I think it makes a lot of sense.
    Senator Stevens, do you have any questions?
    Senator Stevens. No, I had no questions this year. I just 
stopped by to see our friend and say hello.
    Senator Hollings. Well, I have a few more questions, and I 
am like Senator Stevens and I am going to work with the 
chairman. Your budget is in good shape, and I will work with 
Chairman Gregg for what he thinks we ought to do.
    But frankly, I am worried about this war, and I have moved 
from the military to the trouble we have in the world 
community. If the President asked me to come over in the next 
10 minutes and asked me what to do, I would say, I would get 
that best friend of yours, Secretary Evans, up to Canada. You 
cannot just get everybody--I see on my TV this morning the 
President is on the phone trying to still get support. Isn't 
that a hell of a note? But he is on the phone this morning 
trying to get support.
    Now, we all support it, we are committed, but in my war, 
World War II, the first in was Canada. So we have got to get 
you back involved. You come with the calling card of President 
Bush--and you know how to talk to people. You can help us with 
Vicente Fox. You know him down there in Mexico.
    When you start an engagement of this kind, and can't even 
get Mexico and Canada, we have got to start working back 
upstream now to get some help from the United Nations and 
everything else like that, and do not worry about budgets and 
ATP and MEP and all that other stuff. Right now, let us get 
going on this war. Yes, sir.
    Senator Gregg. Senator Stevens.
    Senator Stevens. Mr. Secretary, we lost a big one yesterday 
as far as my State is concerned, but I know we have had talks 
about the Alaska gas pipeline. We have a new hybrid proposal we 
want to discuss with the administration, and I hope we can get 
some time on your schedule to discuss that sometime soon.
    Secretary Evans. We can.
    Senator Stevens. We will be coming in this week and next 
week to talk about it. It's not an immediate project--it won't 
run gas to our system before 2011, but it is an 8-year project 
at a minimum. If we can get it off the ground this year it will 
be very meaningful. I hope you are both familiar with that 
project.
    All of the gas that is produced with 17 billion barrels of 
oil we produce and send down the Alaska pipeline was separated 
out and put right back in the ground right there at Prudhoe. We 
do not have to explore for it. All we have to have is a 
mechanism to transport it, and it is a substantial amount of 
gas.
    Secretary Evans. I would be glad to come by at your 
calling. Just give me a call and I will be there.
    Senator Stevens. Maybe we can arrange for you to come back 
up to our State again this summer and take a look at it.
    Secretary Evans. Good. Thank you, Senator.
    Senator Gregg. While we are here, I do want to acknowledge 
and thank the chairman of the committee for returning a hearing 
room to its rightful spot.
    Senator Hollings. I thank you, Mr. Chairman.
    Senator Gregg. We very much appreciate it.
    Senator Hollings. I was chairman of legislative 
appropriations. I walked in here and it was just a pile of wood 
and paint cans and everything else, and the Architect of the 
Capitol was using this just as a storeroom to do repair work 
all over, and we cleaned it up.
    Senator Gregg. I believe this was the room that the 
Dartmouth College case was argued in by Daniel Webster.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hollings. And Marbury v. Madison.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Judd Gregg

                           HOMELAND SECURITY

    Question. Mr. Secretary, BIS' work towards controlling the 
proliferation of sensitive dual-use technologies is critical to our 
national security. We are now faced with a restless nuclear power on 
the Korean Peninsula that has already acquired the necessary 
technologies to create weapons of mass destruction. There are many more 
regimes in the world that are hostile to the United States and are 
aggressively pursuing these technologies. How is BIS adapting to this 
rapidly changing global security environment? How has its mission 
changed since 9/11? Have BIS' requirements changed?
    Answer. The Bureau of Industry and Security (BIS) administers U.S. 
export controls for dual-use items, including items that may be used 
for the development of weapons of mass destruction, delivery vehicles 
for these weapons, and advanced conventional arms. Its mission remains, 
as before, to advance U.S. national security, foreign policy, and 
economic interests. Since September 11, 2001, BIS has been actively 
working with its counterparts in the Departments of State, Energy, and 
Defense to ensure that export controls address current global security 
challenges and, in particular, are adequate to prevent the acquisition 
of such items and use by hostile nations or terrorist groups. To that 
end, we have advocated proposals to strengthen export controls and 
procedures in all four multilateral export control regimes (the Nuclear 
Suppliers Group (NSG), the Australia Group (AG), the Missile Technology 
Control Regime (MTCR), and the Wassenaar Arrangement).
    For example, in the NSG, the United States has proposed a ``watch 
list'' of non-controlled commodities that could be of use to North 
Korea's nuclear program. This list would be shared with non-regime 
partners to make them more aware of the commodities that could aid 
North Korea's nuclear program. The AG has accepted U.S. proposals to 
tighten the controls on small fermenters that terrorists could use to 
produce biological warfare agents. The AG also has agreed to a U.S. 
proposal to tighten controls on technology transferred through 
intangible means such as the Internet. In the MTCR, the United States 
has advocated expanding the controls to include small unmanned aerial 
vehicles that could have applicability in spreading chemical and 
biological weapons agents. In the Wassenaar Arrangement, the United 
States advocated amending the ``Initial Principles'' to include, as a 
core regime objective, the prevention of terrorism.
    These regime changes support BIS efforts to address security 
concerns originating not only from hostile nations but also from 
terrorist groups and individuals.
    Question. Your fiscal year 2004 request for the Bureau is only $3.5 
million above the fiscal year 2003 enacted level. Is this amount 
adequate to meet all of the new requirements you will surely face in 
the upcoming months and years?
    Answer. BIS is comfortable with the funding request contained in 
the President's budget. In order to address new requirements, BIS 
believes that the budget request should be funded in full.
    Question. Is BIS' technology infrastructure adequate? From high-
powered data warehousing at headquarters to satellite phone capability 
in the field, does BIS have the tools it needs to do its job?
    Answer. BIS currently has an adequate technology infrastructure to 
perform its mission-critical functions. BIS is in the process of 
modernizing its Export Control Automated Support System (ECASS), which 
was developed in the mid-1980s, from a mainframe-based system to a 
modern server-based system with a relational database. BIS also has 
upgraded all personal computers, desktop software, and 
telecommunications links to provide its users with up-to-date 
technology and to improve productivity. BIS continues to seek ways to 
modernize its technology infrastructure to empower its employees to 
deliver critical services to its customers.
    To that end we note that in the President's fiscal year 2004 budget 
proposal, additional resources are requested to support BIS's Seized 
Computer Evidence Recovery System (SCERS) program. This program, which 
uses evidence seized from computer disk drives, has a significant 
backlog of evidence awaiting analysis. This delay has hindered the 
processing of cases and the completion of time-sensitive 
investigations. In the President's fiscal year 2004 budget, BIS seeks 
additional personnel (one agent and two technical analysts) to staff a 
modern SCERS lab, thus alleviating the burden placed on SCERS agents in 
the field currently performing this work.
    Question. To what extent will BIS be working with the Department of 
Homeland Security? In your opinion, what is the appropriate 
relationship between BIS and Homeland Security? To what degree will the 
new Department influence BIS' mission, policies, and agenda?
    Answer. BIS has an excellent working relationship with various 
agencies now located in the Department of Homeland Security, and we 
anticipate that we will continue to work well with those agencies. BIS 
has long had an excellent working relationship with the U.S. Customs 
Service in the administration and enforcement of dual-use export 
controls. BIS also maintains a good working relationship with the 
Information Analysis and Infrastructure Protection Directorate of DHS, 
to which BIS's Critical Infrastructure Assurance Office was transferred 
earlier this year. The creation of the Department of Homeland Security 
has not altered BIS's mission, policies, or agenda.
    Question. To what extent is the Bureau of Industry and Security 
working with the Department of State, which has responsibility for 
regulating weapons exports? Could you describe how this relationship 
has evolved since September 11? Are State and BIS sharing information 
and lessons-learned? Are State and BIS collaborating their efforts 
overseas, for example, sharing information about end-use checks, 
monitoring, enforcement, and the like?
    Answer. BIS continues to have a close working relationship with the 
Department of State on the implementation of U.S. export controls. BIS 
has been involved with the Departments of State, Defense, and Energy, 
and the National Security Council in a comprehensive review of goods 
and technologies on the U.S. Munitions List (USML). The State 
Department implements export controls under the USML. In addition, by 
Executive Order, State reviews export license applications submitted to 
BIS and BIS-promulgated regulations concerning exports of U.S. dual-use 
goods and technologies. BIS also works closely with State on changes to 
the multilateral export control regime lists. Through these various 
processes, State and BIS share information about countries and end-
users of concern. Moreover, since the mid-1990s, BIS has worked closely 
with State to share information relevant to each other's watch lists 
and end-use checks. Finally, BIS works closely with the State 
Department in rendering technical assistance to other countries to 
assist the development of strong indigenous export control systems and 
improve cooperation in export controls, under the State Department 
administered Export Control and Border Security program.

                   CRITICAL INFRASTRUCTURE PROTECTION

    Question. Mr. Secretary, CIAO was created within the Department of 
Commerce in fiscal year 1999. A conscious decision was made to put CIAO 
at Commerce because of Commerce's strong ties to the private sector, 
which controls the lion's share of our national critical infrastructure 
(the Internet and utilities, to name just two examples). This month, 
CIAO began its transition to the Department of Homeland Security.
    How do you think CIAO's mission will change once it is incorporated 
into the new Department? Will CIAO continue to have primary 
responsibility for liaising with the private sector on matters relating 
to critical infrastructure protection and for ensuring that the private 
sector does not inadvertently create weaknesses in our national 
critical infrastructure, or will this responsibility remain at 
Commerce?
    Answer. CIAO's mission consisted of three main functions related to 
critical infrastructure protection when it transferred into the 
Department of Homeland Security (DHS): national outreach and awareness, 
planning and policy coordination, and critical asset and 
interdependency identification for federal government agencies (Project 
Matrix). Consistent with the requirements of the Homeland Security Act 
of 2002, these functions were fully integrated into the Information 
Analysis and Infrastructure Protection Directorate. Since private 
industry owns and operates 85-90 percent of the nation's critical 
infrastructures, we anticipate that DHS will need to continue to work 
closely with U.S. industry, and has primary responsibility for doing 
so. The Planning and Partnerships Office of the new Directorate retains 
CIAO's core public-private partnering competencies and previously-built 
contacts with the private sector. Commerce stands ready to assist where 
appropriate.
    Question. Do you think Homeland Security is well-suited to handle 
the task of liaising with the private sector, as CIAO did while it was 
at Commerce? How do you think companies will react to having DHS--which 
is essentially a law enforcement agency--involved in their internal 
efforts to strengthen their systems against attack?
    Answer. Our experience suggests that U.S. industry generally 
cooperates well with government agencies on issues of national security 
and homeland defense. As we all have seen since September 11, 2001, 
national and economic security depends on homeland security. Private 
industry in general recognizes this new reality. We are optimistic that 
industry and the Department of Homeland Security will have a productive 
and mutually beneficial relationship with respect to critical 
infrastructure protection. The Commerce Department stands ready to 
assist in this effort as appropriate.
    Question. With the transfer of CIAO, will the Bureau of Industry 
and Security have any role in critical infrastructure protection?
    Answer. The Department of Commerce generally, and the Bureau of 
Industry and Security specifically, will continue to carry out programs 
and activities relating to the economic security component of critical 
infrastructure protection--as they did before CIAO was created in the 
Department of Commerce. For example, the National Telecommunications 
and Information Administration has responsibility for spectrum 
management and chairs the interagency Internet Protocol version 6 
(IPv6) task force. The Technology Administration's National Institute 
for Standards and Technology will continue its leading role in 
developing standards relating to the physical and cyber security of 
products, services, and processes, which are shared internationally as 
well as domestically.
    The Bureau of Industry and Security (BIS) continues to have 
significant defense industrial base responsibilities. The defense 
industrial base was recognized as one of the fourteen critical sectors 
in the National Homeland Security Strategy. BIS administers the 
priorities and allocations authority under Title I of the Defense 
Production Act to ensure the timely delivery of industrial products, 
equipment, materials, and services for approved national defense and 
homeland security programs. Under that authority, BIS has assisted the 
Transportation Security Administration and the FBI in acquiring 
products and equipment needed for the war on terrorism. BIS also 
conducts assessments of the viability of various critical industry 
sectors. Finally, consistent with its mission of furthering U.S. 
national security and economic security, BIS continues to advocate the 
importance of protecting the country's critical infrastructures and 
assets.
national institute of standards and technology (nist)/homeland security
    Question. It is clear that NIST and the Department of Homeland 
Security (DHS) must develop a close working relationship. Have you had 
any preliminary talks with Secretary Ridge on this subject? Do you 
believe the Director of NIST has a clear understanding of what will be 
expected of NIST under the new homeland security framework? Does he 
have the resources he needs to meet these requirements?
    Answer. There have been extensive discussions between the 
Department of Commerce (DoC) and the Department of Homeland Security 
(DHS) on the need to develop a close and effective collaboration. Such 
discussions led to the signing of a Memorandum of Understanding (MOU) 
on May 22, 2003, between the Technology Administration (TA) of DoC and 
the Science and Technology (S&T) Directorate of DHS. The MOU allows the 
S&T Directorate to leverage TA's, and specifically NIST's, expertise in 
measurement science and standards to accelerate the development, 
testing, evaluation, and deployment of homeland security technologies. 
S&T and TA seek to collaborate on research and planning activities, and 
share where appropriate facilities, personnel, and scientific 
information. This MOU builds on the long history of collaboration 
between NIST and the various agencies incorporated into DHS, such as 
the Federal Emergency Management Agency (FEMA), and the Office for 
Domestic Preparedness (ODP). To further improve ties between NIST and 
DHS in the areas of measurements and standards, NIST has detailed on a 
full-time basis the Division Chief from its Ionizing Radiation Division 
and a staff member (part time) from its Computer Security Division to 
the Office of Standards in the DHS S&T Directorate.
    The Director of NIST has a clear understanding of NIST's role in 
homeland security. This role is defined by NIST's unique mission to 
develop and promote measurement, standards, and technology to enhance 
productivity, facilitate trade, and improve the quality of life. 
Because of the overwhelming importance of homeland security to the 
quality of our life, NIST will work with the new DHS to ensure that the 
appropriate measurements and standards are in place to support the 
efforts of DHS in chemical, biological, radiological, nuclear, and 
explosive detection and defense, cybersecurity, critical infrastructure 
protection, first responders, etc. NIST's partnership with DHS will 
build upon years of experience working with a number of the agencies 
making up the new Department.
    NIST is also building upon its experience in consensus standards 
and its partnerships with standards development organizations (SDO's) 
to address the needs for homeland security standards. The Chief of 
NIST's Standards Services Division is the government co-chair of the 
ANSI Homeland Security Standards Panel that is coordinating the efforts 
of standards development organizations (SDOs) in developing standards 
required for homeland security technologies.
    Because of the importance of homeland security to our citizens, 
NIST has redirected resources to develop the critical measurements and 
standards in this area. When appropriate, NIST homeland security 
efforts are supplemented by funds from other government agencies. When 
sufficient funding is not available through these approaches, the 
Administration has proposed budget initiatives for NIST in the area of 
measurements and standards for homeland security. For fiscal year 2004 
the following homeland security budget initiatives have been proposed: 
Homeland Security: Standards, Technology, and Practices for Buildings 
and First Responders ($4.0 million, 7 permanent positions, and 5 FTE); 
Measurement Infrastructure for Homeland Security ($5.3 million, 12 
permanent positions, and 9 FTE); and Standards for Biometric 
Identification Systems ($1.0 million, 4 permanent positions, and 3 
FTE).

              NIST/LAW ENFORCEMENT TECHNOLOGIES STANDARDS

    Question. Mr. Secretary, a great deal of funding has been earmarked 
during the last two years to help first responders purchase the 
equipment they need to effectively combat terrorism. Justice has been 
doing some work in the area, but standards-development is really NIST's 
bailiwick.
    The President's budget does not request any direct funding for the 
Office of Law Enforcement Standards at NIST. Are you planning to 
request funds for OLES in the fiscal year 2005 budget request? Wouldn't 
you agree that there is a significant need in this area and that NIST 
is uniquely qualified to fill it?
    Answer. In response to your statement, developing performance 
standards for communication and personal protection equipment for first 
responders is very important and the National Institute of Standards 
and Technology (NIST) has an important role to play here. For several 
years, NIST's Office of Law Enforcement Standards (OLES) has been 
working with the Department of Justice's National Institute of Justice 
(NIJ) and other government agencies developing performance standards 
for first responders.
    The ability of law enforcement and public safety agencies to 
communicate and exchange data in critical situations is fragmented by 
equipment incompatibilities and the lack of standards to provide a 
common, nationwide approach to telecommunications and information 
sharing. In its efforts to resolve this issue, NIST's OLES has been 
working hard on a Public Safety Communications Standards program geared 
toward solving public safety interoperability and information sharing 
problems by developing and adopting NIJ standards for voice, data, 
image, and video information transfers for first responders. In 
addition, OLES has been holding discussions with end users about their 
requirements and evaluating commercial devices instrumental to ensure 
that the equipment and technologies currently being used by the U.S. 
first responders community are interoperable, safe, dependable, and 
effective.
    In addition, OLES has been managing a program since 1999, to 
develop CBRNE (chemical, biological, radiological, nuclear, and 
explosive) protective equipment standards for emergency first 
responders. This program, initially funded by NIJ, will continue with 
funding provided by the Office for Domestic Preparedness (ODP). An 
Interagency Agreement has been signed between the ODP, formerly of the 
Office of Justice Programs, now part of the Borders and Transportation 
Security Directorate, Department of Homeland Security, to continue the 
program managed by OLES for the development of a national suite of 
CBRNE protective equipment standards for emergency first responders. 
This program led to a National Institute of Occupational Safety and 
Health (NIOSH) standard for Self-Contained Breathing Apparatus (SCBA) 
and Air Purifying Respirators (gas masks) and produced an important set 
of guides and databases to help emergency first responders in the 
evaluation and purchase of chemical and biological detection, personal 
protective, and communications equipment. The continuation of this 
program under ODP will be significantly expanded beyond development of 
personal protective equipment standards to address radiological 
threats, decontamination standards, and explosive detection standards.
    Yes, the National Institute of Standards and Technology (NIST) 
believes there is a significant need in the criminal justice and public 
safety area and NIST is uniquely qualified to fill it. NIST has 
successfully filled these needs over the past 32 years through a number 
of reimbursable agreements with other agencies, such as the Department 
of Justice's National Institute of Justice, the Department of 
Transportation, and most recently with the Department of Homeland 
Security's Office of Domestic Preparedness.
    The $3 million funding for NIST's Office of Law Enforcement 
Standards (OLES) provided in the fiscal year 2003 Omnibus 
Appropriations Act will go a long way in helping NIST to ensure that 
NIST has the critical personnel with the expertise to implement law 
enforcement standards initiatives proposed by their partner federal 
agencies as specifically stated in the Act itself. This funding 
supports NIST with an appropriation in fiscal year 2003 for the staff 
and administrative costs related to the Office of Law Enforcement 
Standards, giving NIST the means to independently hire, maintain and 
manage the appropriate technical expertise to perform its 
responsibilities to the law enforcement community. In addition, it 
allows NIST to devote the entirety of its funding from reimbursable 
sponsors to the technical needs of those sponsors, without diverting 
any funding from sponsors to cover staff and administrative costs at 
NIST.
    At the time the fiscal year 2004 President's budget request was 
submitted, the fiscal year 2003 Omnibus Appropriations Act had not been 
enacted. Therefore, the fiscal year 2004 President's budget request 
builds from the fiscal year 2003 President's budget request, which did 
not include any direct appropriated funding for NIST's OLES. Decisions 
on the funding priorities to be included in the President's fiscal year 
2005 budget have not been finalized, and we will bear your concerns in 
mind as we evaluate the many competing requests for funding.

                 NIST/WORLD TRADE CENTER INVESTIGATION

    Question. Before NIST took over the World Trade Center 
investigation, there was a huge controversy over whether too much of 
the structural steel from the Twin Towers had been sold to scrap yards, 
creating an impossible situation for NIST's scientist and engineers. 
Now that NIST is seven months into the investigation, has it been able 
to gather enough evidence including structural steel to conduct the 
investigation? Could you report on NIST's progress or any preliminary 
findings from the investigation?
    Answer. Yes, the National Institute of Standards and Technology 
(NIST) is basing its review, analysis, modeling, and testing work for 
the World Trade Center (WTC) investigation on a solid foundation of 
technical evidence.
    NIST has in its possession nearly 250 pieces of WTC steel. The vast 
majority of the pieces are of significant size and include perimeter 
prefabricated column-spandrel elements, rectangular box beams, wide 
flange sections, truss sections, channels and several smaller pieces, 
such as bolts. As of March 28, 2003, NIST has catalogued 235 pieces of 
WTC steel which includes a database with photographic records and 
member markings. In addition, NIST has examined additional steel stored 
by the Port Authority at JFK airport and has transported 12 specimens 
to NIST. NIST believes that this collection of steel from the WTC 
towers is adequate for purposes of the investigation.
    NIST has also received considerable cooperation and large volumes 
of information from a variety of organizations and agencies 
representing the building designers, owners, leaseholders, suppliers, 
contractors, and insurers.
    Local authorities providing information include the Port Authority 
of New York and New Jersey (PANYNJ or Port Authority) and its 
consultants and contractors; the Fire Department of New York (FDNY); 
the New York Police Department (NYPD); the New York City Department of 
Design and Construction (DDC); the New York City Department of 
Buildings (DOB); and the New York City Office of Emergency Management 
(OEM). In addition, the Occupational Safety and Health Administration 
(OSHA) provided correspondence sent to it regarding the evacuation 
experience of WTC occupants on September 11, 2001.
    NIST also has received information from Silverstein Properties 
(Silverstein) and its consultants and contractors; the group of 
companies that insured the WTC towers and its technical experts; Nippon 
Steel; Laclede Steel; Isolatek International, formerly known as U.S. 
Mineral Products; Marsh & McLennan (a tenant of WTC 1), and Roger Morse 
Associates. The information from Silverstein and the insurance 
companies includes the large body of technical work completed by both 
parties as part of the insurance litigation involving the WTC towers, 
such as reports on the structural collapse, fire spread and severity, 
and wind tunnel test results for the WTC towers. In addition, technical 
experts for both parties independently provided extensive briefings to 
the WTC investigation team and discussed the tenability environment and 
the evacuation procedures in the buildings.
    Solid progress has been made by the investigation team at the one-
third mark of the ongoing 24-month effort. On May 7, 2003, NIST 
released a progress report (http://wtc.nist.gov/) on the WTC 
investigation, its second since the effort began in August 2002. This 
interim report does not include any conclusions or make any 
recommendations, since the investigation is still in its early stages.
    Key points in the progress report included:
  --a status update on efforts to collect critical data about the WTC 
        disaster of September 11, 2001, such as building documents, 
        video and photographic records, emergency response records and 
        oral histories (a complete listing of materials collected to 
        date and those items still needed are included in the report);
  --an interim report that documents the procedures and practices used 
        to provide the passive fire protection (fireproofing) for the 
        floor system of the WTC towers (nothing in the interim report 
        based on a review of factual data in documents obtained by NIST 
        should be taken to imply that the floor trusses played a 
        critical role in the collapse of the WTC towers);
  --a detailed description of the key factors that NIST is considering 
        in its analysis of the various collapse scenarios hypothesized 
        for the WTC buildings, including fire endurance testing of a 
        typical WTC floor system and individual steel members;
  --a look at the integrated approach for identifying the most probable 
        of the technically possible collapse sequences for WTC 1 and 2 
        (the Twin Towers) and WTC 7; and
  --a review of NIST plans originally presented in April 2003 for 
        studying the WTC evacuation and emergency response by 
        collecting first-person data from survivors (both WTC occupants 
        and first responders), families of victims, and individuals 
        with operational and command authority during the WTC disaster.

             NIST/WARWICK, RHODE ISLAND FIRE INVESTIGATION

    Question. Mr. Secretary, in January, we in New England suffered a 
horrible tragedy when 96 people were killed in a nightclub fire in West 
Warwick, Rhode Island. Was the National Construction Safety Team Act 
successful in helping avoid confusion over responsibility for the 
investigation into this tragedy? How is the Administration proposing to 
fund this and future investigations? If NIST is going to be responsible 
for investigating these events when they occur, should funds be set 
aside within NIST for this purpose to avoid the delay in starting the 
investigation?
    Answer. The tragic fire in West Warwick, Rhode Island, is the type 
of event that the National Institute of Standards and Technology (NIST) 
would have investigated under its existing authority prior to the 
passage of the National Construction Safety Team (NCST) Act. What the 
Act has done, however, is to allow us to respond immediately and to 
raise the awareness and appreciation of our activities in the eyes of 
local officials and the other Federal agencies that are conducting 
investigations. The Act provides for the criminal investigation to have 
priority over NCST activities. We have briefed local and state 
authorities on the role and objectives of the NCST investigation, and 
established liaisons with the Rhode Island State Fire Marshal's office, 
the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the 
U.S. Fire Administration. The NCST is gathering evidence, to the extent 
possible, independent of any criminal investigations.
    The Rhode Island investigation plan was issued based upon the 
redirection of base funds. The plan targets completion of the 
investigation by the end of calendar year 2003.
    NIST has not been appropriated any additional funding for 
activities associated with the NCST Act. Where appropriate, NIST will 
continue to undertake investigations of major building disasters as 
authorized by law.

           PATENT AND TRADEMARK OFFICE, INCREASE IN USER FEES

    Question. PTO's fiscal year 2004 budget request includes a 15 
percent increase in user fees. This fee increase will mean an 
additional $300 million in fee revenue for the PTO that it would 
otherwise not collect. How is a 15 percent increase in user fees 
justified when, under the current plan, PTO does not expect to 
significantly decrease patent pendency?
    Answer. The fee legislation currently pending in Congress will 
generate additional revenues and ensure the implementation of the 
USPTO's 21st Century Strategic Plan. If the fee legislation is not 
implemented for fiscal year 2004, the USPTO's projection of fee 
collections is $1,302.7 million and if the fee legislation is 
implemented before fiscal year 2004, the USPTO's projection of fee 
collections is $1,503.8 million in fiscal year 2004. This equates to an 
additional $201.1 million, or a 15 percent increase. The proposed Fee 
Modernization Act of 2003 is a critical component to the successful 
implementation of the strategic plan. The strategic plan aims to 
modernize the agency for the 21st century by addressing patent pendency 
as well as quality, workload, and e-Government. As Under Secretary 
James E. Rogan has testified before Congress, without the additional 
fees secured by passage of a fee bill this year, average patent 
pendency will climb to more than 40 months by 2008.
    The USPTO has been responsive to concerns that it continually 
attempts to address workload demands by hiring increasingly more patent 
examiners. The 21st Century Strategic Plan addresses this concern 
through a number of initiatives that will enable patent examiners to 
focus on the core mission of the organization--the examination of 
patent applications. These initiatives include the multi-track patent 
examination process, the mutual exploitation of search results, 
competitive sourcing of search, and the proposed fee restructuring. 
These initiatives, plus Under Secretary Rogan's top-to-bottom review 
resulted in a plan that reduces patent examiner hires through fiscal 
year 2008 by 2,400 compared to the fiscal year 2003 Business Plan.\1\ 
As noted in the strategic plan, average patent pendency time will 
increase over the short-term and be at 27 months in 2008. The USPTO 
will continue to work toward reducing pendency and pursue the long-term 
optimum goal of 18 months pendency beyond the five-year horizon of the 
strategic plan.
---------------------------------------------------------------------------
    \1\ The 2003 Business Plan was submitted to the Congress in 
February 2002 as part of the USPTO's fiscal year 2003 Budget.
---------------------------------------------------------------------------
                              [ATTACHMENT]

        CONSEQUENCES OF FAILING TO ENACT FEE LEGISLATION IN 2003

    Inability to Hire Needed Examiners.--In fact, patent pendency will 
increase dramatically because of our inability to hire 2,900 new patent 
examiners. An inability to hire patent examiners beginning in fiscal 
year 2003 and the out years will increase processing delays and 
severely impact USPTO's ability to bring down pendency. Over 140,000 
patents will not issue over the next five years if the USPTO is held to 
current fees and funding levels.
    Unexamined Patent Applications Skyrocket.--If recommended funding 
levels are not appropriated in future years, the inventory of 
unexamined patent applications would skyrocket to over 1,000,000 
applications by 2008 (more than double the current amount).
    Average Patent Pendency Skyrockets.--As measured from the time of 
filing, pendency would jump to over 40 months in 2008, the highest 
pendency rate in more than four decades.
    Delaying Full e-Government.--Inability to meet the stated goals of 
a fully electronic, e-Government environment for patent and trademark 
applications.

                      PTO/FIVE YEAR STRATEGIC PLAN

    Question. Mr. Secretary, I understand the PTO is now placing a 
higher priority on goals like quality assurance and e-government 
initiatives (the latter goal being driven primarily by OMB). While I 
agree that these are valid goals, I remain concerned about the issue of 
patent pendency. I understand that there is currently a 400,000 patent 
backlog. How will the Five Year Strategic Plan help decrease patent 
pendency? Will the PTO remain committed to the goal of 18 months for 
patent pendency? When can we realistically expect PTO to meet this 
goal?
    Answer. As you know, there is general agreement among the nation's 
CEOs, the inventor community, throughout lawyers in the bar, and people 
in the capital equity markets that issuing U.S. patents faster (vis-a-
vis reducing pendency) without adequate quality assurance behind them 
would lead to uncertainty for the tech community and be a terrible 
mistake overall. Further, if we do not complete our e-government 
initiatives to electronically process patent applications, we would 
remain less able to respond quickly to changes in workloads.
    As Under Secretary Rogan has also testified before Congress, 
without the passage of the Fee Bill, the USPTO's patent application 
backlog is predicted to rise to 1,000,000 by 2008 and more than 140,000 
patents will not issue in that time frame. We continue to work on all 
of these agency goals--pendency, backlog, quality assurance--through 
the 21st Century Strategic Plan and its initiatives. [See following 
graphs.]






    While the USPTO is making quality and e-Government initiatives an 
immediate priority, it continues to implement initiatives to support 
the USPTO's long-term pendency goals. The 21st Century Strategic Plan 
has aggressive timeliness goals: to make available, on average, a first 
Office action for first-filed U.S. non-provisional patent applications, 
at the time of 18 month publication, and a patent search report for 
other patent applications in the same time frame--by far the fastest in 
the world. This will be accomplished by redesigning the entire patent 
search and examination system based upon multiple-examination tracks, 
greater reliance on qualified patent search services, and variable, 
incentive-driven fees.
    Upon enactment of the Fee Modernization Act of 2003, the USPTO will 
move from a ``one-size-fits-all'' patent examination process to a 
multi-track examination process that leverages search results of other 
organizations and permits applicants to have freedom of choice in the 
processing of their applications. The new process will eliminate 
duplication of effort, encourage greater participation by the applicant 
community and the public, and improve the quality of patents and 
decrease processing time. For example, the proposed fee legislation 
contains significant authorities needed to implement the strategic 
plan, such as providing refundable search and examination fees rather 
than the composite fee currently charged. This change will provide 
patent applicants with the opportunity to terminate the application 
process because an invention does not have sufficient commercial 
viability and obtain a refund. This would abandon the application and 
obviate the need for the USPTO to proceed with the examination of the 
application. The USPTO will continue to work toward reducing pendency 
and pursue the long-term optimum goal of 18 months pendency beyond the 
five-year horizon of the strategic plan. Their best estimate is that it 
will take at least a decade to achieve the 18-month goal.
    Under a new paradigm, the USPTO will concentrate Office expertise 
as much as possible on the core government function of examination, and 
over the five-year horizon of the strategic plan, expects to hire 2,400 
fewer patent examiners than originally envisioned. However, they will 
make available, on average, a first Office action for first-filed U.S. 
non-provisional applications at the time of 18 month publication, and a 
patent search report for other patent applications in the same time 
frame which industry acknowledges is a highly beneficial interim 
pendency solution.

                  PAPERLESS PATENT APPLICATION PROCESS

    Question. Could you describe PTO's progress towards instituting a 
paperless patent application process? How high a priority is this for 
the PTO? How is this related to PTO's implementation of the various e-
government initiatives?
    Answer. The USPTO's priorities in the 21st Century Strategic Plan 
are to (1) improve patent and trademark quality, (2) aggressively 
implement e-Government to handle workload associated with the 21st 
Century economy, and (3) reduce patent and trademark pendency. One of 
the USPTO's highest priority e-Government initiatives is delivering an 
operating pipeline to process patent applications electronically by 
October 1, 2004, including electronic capture of all post-filing paper 
correspondence. At the center of the e-Government strategy is the 
collaboration with the European Patent Office (EPO) to use their 
ePHOENIX system, and collaboration with the Trilateral Offices (EPO and 
the Japan Patent Office) to achieve common goals and share systems 
already in use or development. The USPTO's Tools for Electronic 
Application Management (TEAM) project will also continue to support the 
e-Government strategy.
    The USPTO is on schedule to meet its October 1, 2004 planned 
electronic patent application processing date as follows:
    In May 2003, a prototype Image File Wrapper (IFW) system was 
installed in five Patent Examining Pilot Art Units, and more than 100 
patent examiners and support staff were trained on the use of the 
system.
    In June 2003, the USPTO will begin scanning all newly filed patent 
applications into the IFW system, and the digital copy replaces paper 
as the official patent file.
    In July 2003, the USPTO will begin full production roll-out of the 
IFW system. Seven Art Units, comprised of about 100 employees, will be 
added to the system each week. Upwards of 7,000 applications will be 
scanned per week resulting in adding over 8 million pages to the 
database each month.
    In December 2003, all working patent application files of the three 
Technology Centers moving to the USPTO's new Carlyle facility in 
Alexandria, Virginia, will be operating on the IFW system. At this 
time, there will be over 2,000 total users of the system.
    In January 2004, the USPTO will begin the final phase of full 
deployment of the IFW system throughout the Patent Examining Corps.
    In October 2004, all patent application processing will occur in a 
totally electronic environment that will be used by over 4,000 patent 
examiners and 2,500 support staff.
    Beginning in fiscal year 2004, the USPTO will collaborate with the 
European Patent Office to initiate an effort to process captured patent 
application images into text and associated images. This effort will 
use an eXtensible Markup Language (XML)-based data representation 
enabling text-based patent application processing (e.g., document 
navigation, document searching) by fiscal year 2006.

                            SOFTWOOD LUMBER

    Question. Mr. Secretary, are you aware of the softwood lumber 
issue, and can you give us a status report on the countervailing and 
antidumping investigations? Are you aware of the particular problem 
that some loggers and landowners in New England have had, which is that 
a dumping tax was, in effect, imposed on U.S. lumber that is shipped to 
Canada for processing? Is there going to be any opportunity for these 
companies to present their case and thus rectify this situation?
    Answer. After complex and thorough investigations, antidumping and 
countervailing duty orders on softwood lumber from Canada were issued 
in May 2002.
    I am aware of the issue involving duties being imposed on U.S. 
lumber shipped to Canada for processing and re-imported into the United 
States. In fact, in February 2003, based on comments we received, the 
Department issued a scope ruling to address this very issue. In 
essence, we clarified that U.S.-origin softwood lumber that is further 
processed in Canada may re-enter the United States free of antidumping 
and countervailing duties so long as, at the time of importation, the 
Bureau of Customs and Border Protection (BCBP) can be satisfied that 
the lumber was first produced in the United States. We believe that 
this matter has now been resolved. Since the Department issued its 
scope clarification, we have heard of no instances of BCBP collecting 
duty deposits on U.S. lumber processed in Canada and returned to the 
United States.
    In addition, during May 2003, we received numerous requests for 
administrative reviews of both the antidumping and countervailing duty 
orders. We will be initiating the administrative reviews by the end of 
June 2003.

                          WORKING CAPITAL FUND

    Question. Mr. Secretary, what would be the advantages and 
disadvantages of directly appropriating funds for central 
administrative services, rather than depending upon the Working Capital 
Fund?
    Answer. The Department's Working Capital Fund (WCF) was established 
on June 28, 1944, pursuant to 5 U.S.C. 607 (15 U.S.C. 1521). The 
Working Capital Fund is a no-year revolving fund established to support 
departmental services delivered more efficiently, economically, or 
advantageously on a centralized basis. Although activities and services 
have changed over the years of operation, the WCF continues to display 
full costing of services in bureau budgets. We see no advantages to 
directly appropriating funds for central administrative services.
    The disadvantages of directly appropriating funds for central 
administration services include the loss of:
  --Responsiveness/Flexibility for Bureaus.--The WCF provides a 
        mechanism where Bureaus can request additional services based 
        on their needs and funding availability, which varies year to 
        year. For example, additional guard service and security 
        investigations are requested as needed by Bureaus. If directly 
        appropriated, bureaus would lose this flexibility.
  --Flexible Cost Sharing Mechanism.--As a result of the 9/11/01 
        tragedy, applications for government jobs through the Postal 
        Service were significantly delayed throughout the federal 
        government. Hiring came to a halt in most federal agencies. 
        However, DOC job applications continued to be processed through 
        Commerce Opportunities On-Line (COOL), an automated job 
        application system. Individual DOC Bureaus may not have been 
        able to fund this initiative alone, but collectively through 
        the WCF this on-line job application system was developed and 
        is being used successfully by all participating Bureaus.
  --Economies of Scale.--The WCF provides a better vehicle to manage 
        inventory accounts and purchase large equipment or quantities 
        of items in which the Bureaus share in expenses and cost 
        savings. For example, we consolidate buying power and 
        management of services through large orders for administrative 
        services such as janitorial and printing. The WCF serves as a 
        better vehicle to realize volume cost savings.
  --Full Cost in Bureau Budgets.--Costs charged through the WCF ensure 
        that the Bureau's full cost of doing business is reflected in 
        Bureau budgets, not in a general administration budget.
                                 ______
                                 
             Question Submitted by Senator Pete V. Domenici

    PUBLIC TELECOMMUNICATIONS FACILITIES, PLANNING AND CONSTRUCTION

    Question. Secretary Evans, public television stations all across 
the country are facing a federal mandate to convert to digital 
broadcasting. Approximately 192 stations out of 355 have filed with the 
Federal Communications Commission for a waiver because they are not 
going to meet the May 2003 deadline due to lack of funding. These 
stations are counting on the Public Telecommunications Facilities 
Program (PTFP), which provides grants to public radio and TV stations 
for equipment, to help them cross the digital TV finish line with a 
federal matching grant.
    The President's fiscal year 2004 budget submission doesn't request 
funding for this important matching grant program. Can you please 
explain the thinking behind this decision?
    Answer. The President's fiscal year 2004 Budget proposes to suspend 
funding for the PTFP grant program in fiscal year 2004. The President's 
fiscal year 2004 Budget also proposes that Federal support of public 
television's digital television conversion be funded through monies 
previously appropriated to the Corporation for Public Broadcasting 
(CPB). As you probably are aware, CPB is funded through a two-year 
advance funding procedure. CPB's fiscal year 2004 appropriation of $380 
million was enacted into law on January 10, 2002, as part of the Labor/
HHS/Education appropriation, Public Law 107-116.
    The Administration proposes that up to $80 million in funding for 
digital conversion grants be made available from within CPB's $380 
million appropriation. The President's fiscal year 2004 budget 
recognizes that the FCC digital conversion requirement should be 
addressed in the next fiscal year.
    To date, public television stations have kept pace with their 
commercial counterparts in the digital conversion. PTFP's 2003 funding 
will assist approximately 109 stations meet the FCC's 2004 deadline. In 
addition, CPB has been appropriated $48 million for the digital 
transition as part of its fiscal year 2003 appropriation. NTIA has been 
in contact with CPB officials and understands that CPB will award these 
funds later in the year. Given competing national budget priorities and 
the availability of funds within CPB, the Administration believes that 
suspending PTFP grants for a year is prudent.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

                                TOURISM

    Question. Our country's engagement with Iraq has begun. The 
apprehension caused by this military conflict and terrorist incidents 
within the United States has led to a decline in air travel. This, 
coupled with weak economic conditions, has led to a decline in tourism 
such as we saw after September 11, 2001, and Desert Storm.
    Has the Commerce Department developed a strategy to reduce the 
effects on the tourism industry from this decline in business? Does the 
fiscal year 2004 budget request the necessary resources to shore up 
this important industry?
    Answer. In the fiscal year 2003 Omnibus Appropriation, Congress 
appropriated $50 million to market and promote the United States as a 
tourism destination. We are working with industry to implement this 
program and expect the tourism promotion campaign to commence in fiscal 
year 2004.
    The Department of Commerce is working in a number of ways to 
support the travel and tourism industry and to assist in its recovery. 
Immediately after 9/11, I reconvened the Tourism Policy Council (TPC) 
to coordinate throughout government the programs and policies that 
impact travel and tourism. The TPC provides the private sector with a 
forum for making known to the Federal government the industry's ideas 
and concerns. The TPC also ensures that the various Federal programs 
are coordinated to maximize support for the industry.
    The Department has launched a public-private partnership between 
the United States and Japan to restore travel and tourism between our 
two countries. Through promotional programs and events, this ``Tourism 
Export Expansion Initiative'' also seeks to address Japanese concerns 
about security and to convey that the United States is a safe 
destination--key to restoring travel from this market.
    The Department provides support to the travel and tourism industry 
through its Market Development Cooperator Program (MDCP). The MDCP is a 
competitive, matching grants program that seeks to leverage limited 
Federal support for expanding exports of small and medium-sized 
businesses. The Western States Tourism Policy Council received an award 
to focus on a cooperative strategy to restore international tourism in 
gateway communities in and around the federal public lands.
    The Department also provided a $788,000 grant to the State of 
Hawaii to help offset some of its losses attributable to the lack of 
tourism resulting from 9/11. The project was awarded to the Hawaii 
Visitor and Convention Bureau (Hawaii VCB) for a marketing campaign to 
attract visitors. Marketing will be multi-media and focused on mainland 
cities. The Hawaii VCB is based in Honolulu County but the project will 
benefit all counties of Hawaii.
    The Department provides support to the travel and tourism industry 
through its market research program. The Department is responsible for 
collecting and disseminating international traveler statistics, 
including arrival statistics and visitor expenditures.

         NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA)

    Question. Support for NOAA activities and resources in Hawaii. I am 
concerned with what appears to be a lack of Administration support for 
NOAA's commitment to address critical needs in Hawaii and the American 
Flag Territories. I have two items of particular concern. First, the 
NOAA ship VINDICATOR (to be renamed HI'I ALAKAI) will be converted this 
fiscal year to support the National Ocean Service's activities in the 
Pacific including coral reef research. I understand that while the 
vessel will be ready for deployment during fiscal year 2004, the 
Administration's budget proposal does not include any funding for the 
operations of this vessel. Please explain in full detail why funds were 
not requested by the Administration for the operation of the 
VINDICATOR?
    Answer. At the time the fiscal year 2004 budget was being 
formulated, NOAA was still defining the multi-disciplinary mission 
requirements that would be used to develop the specification package to 
convert HI'I ALAKAI to meet the requirements. The likely date for award 
of the shipyard conversion contract was still unknown as was the 
expected amount of time that would be required for conversion and 
shakedown of new or modified systems. Considering those unknowns, it 
seemed unlikely the ship would be ready for operations early enough to 
require fiscal year 2004 operating funds.
    Second, the National Marine Fisheries Service will finally 
establish the new Pacific Islands Region next month. I am informed that 
NOAA does not have the two SES positions needed to provide the new 
Region with its top level managers: a Regional Administrator and a 
Science Director. In addition to the SES positions, I have not received 
any credible confirmation that there will be adequate FTE positions to 
staff the new Region.
    Question. Please explain how you plan to address these personnel 
problems and when we can expect these problems to be resolved.
    Answer. With respect to the two Senior Executive Service (SES) 
positions, the National Marine Fisheries Service has requested 
authority from the Department of Commerce to recruit for a Pacific 
Islands Regional Administrator and Science Center Director. We expect 
to receive approval shortly and have these positions filled permanently 
by the end of the year. To fully staff the Pacific Islands Region and 
Science Center, we have projected a long term requirement (2010) of 187 
FTE positions in addition to approximately 70 contract employees to 
primarily assist in carrying out science related activities. Currently, 
there are 117 funded FTE positions (including the two SES positions) 
and 70 contract employees located in Honolulu that constitute the 
initial staff for the Pacific Islands Region.
    Question. Streamlining Fisheries Management. According to your 
written statement, one of your Department's strategic goals is to 
``improve and streamline the Nation's fishery management system to 
better meet commercial, recreational, and conservation objectives.'' 
How do you plan to implement this goal on a national scale, and how far 
will the Administration's request of $29.8 million in fiscal year 2004 
go toward meeting this goal?
    Answer. The National Marine Fisheries Service (NOAA Fisheries) has 
responsibility for the management of sustainable fisheries, the 
recovery and protection of marine mammals and endangered and threatened 
species, and the conservation and restoration of marine habitat. NOAA 
Fisheries works closely with regional fishery management councils, 
states, and other constituents to carry out these mandates. The 
regulatory process affects not just marine resources but also the 
associated people, businesses, and communities.
    The goal of the Regulatory Streamlining Project (RSP) is to improve 
the efficiency and effectiveness of regulatory operations and decrease 
NMFS's vulnerability to litigation. While the RSP initiative highlights 
the National Environmental Policy Act (NEPA) as a critical component of 
the regulatory process, there are many other requirements that must be 
addressed to ensure compliance with all of the agency's mandates. 
Extensive analyses and documentation are required to comply with the 
Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-
Stevens Act) and other associated mandates such as the Endangered 
Species Act (ESA), Marine Mammal Protection Act (MMPA), Administrative 
Procedure Act (APA), Regulatory Flexibility Act (RFA), Paperwork 
Reduction Act (PRA), Coastal Zone Management Act (CZMA), and Executive 
Orders 12612, 12630, and 12866. NOAA's fiscal year 2004 budget request 
for NOAA Fisheries includes $1.5 million specifically to implement RSP 
during fiscal year 2004, as well as requests for additional resources 
for increasing the number of stock assessments around the country and 
the collection of comprehensive biological, economic, and sociological 
data on an increasing number of species and the environmental factors 
that influence their health and abundance. Current and improved 
analyses are critical to front-loading the management and regulatory 
process.
    There are a number of other initiatives that are critical to 
regulatory streamlining on a national level. These include electronic 
rulemaking and information systems, improvements to the regulatory 
process, professional training to ensure compliance with all relevant 
laws and executive orders, and quality control/quality assurance.
    Fiscal year 2004 funding would support the development of an 
electronic web-based system for all regulatory and information 
collection activities, including rule development, the maintenance of 
administrative records or dockets that support rulemaking, and rule-
related communications with stakeholders. This initiative will directly 
support the RSP by expanding constituent participation, facilitating 
information dissemination, encouraging a more transparent decision 
making process, fostering better collaboration with stakeholders, and 
contributing to problem-solving early in the rulemaking process. NOAA 
Fisheries' performance will be greatly enhanced as the time required to 
review and process rules and regulations is reduced and long-term cost 
savings are generated. NOAA Fisheries is developing a training program 
specific to our rulemaking needs. The program will ensure that all 
appropriate staff are fully conversant with Federal Register 
documentation requirements, Agency documentation standards, compliance 
with all legal requirements, etc. Existing internal and external 
training opportunities will be utilized to the extent possible. 
Nevertheless, it will be necessary to develop specialized training 
which incorporates all applicable requirements relative to the fishery 
management context. These needs will be assessed and addressed in 
conjunction with development of revised Operational Guidelines. As 
additional responsibility is transferred to the Regions under the RSP, 
the Regional staff will need specialized training to able to fulfill 
their changing responsibilities. In addition, during 2004, NOAA 
Fisheries will undertake a retrospective bench-marking of past 
performance dealing with litigation, timeliness, and the need for 
Federal Register corrections.
    As part of RSP, NOAA Fisheries delegated signature authority for 
Endangered Species Act (ESA) section 7 consultations to Regional 
Administrators, except for those that are national in scope (i.e., 
programmatic, multi-Regional, etc.) or for permits issued by the Office 
of Protected Resources. In NOAA Fisheries Headquarters, the 
consultation program must conduct national consultations, provide 
guidance, training, expertise and program review to the Regional 
Offices, as well as all Federal agencies, Congress, and constituents. 
Regional Offices require additional resources to conduct a variety of 
consultations and to provide expert advice to fishery management 
councils and constituents. One important goal of the RSP is to have 
NOAA Fisheries alert fishery management councils and others early in 
their planning process of potential endangered species-fisheries 
interactions.
    A centerpiece of successful ESA section 7 delegation will be NOAA 
Fisheries' continued commitment to train managers and consulting 
biologists to ensure that they maintain the knowledge, skills, and 
abilities that are necessary to implement the agency's section 7 
program consistently, efficiently, and effectively. In particular, the 
following programs would be supported by fiscal year 2004 funding: 
Develop and implement basic and advanced section 7 training; develop 
and implement section 7 training for managers and Senior Executives; 
develop and implement annual regional section 7 workshops; and develop 
and implement training sessions for special topics.
    Question. You have highlighted the climate change request of $295.0 
million for fiscal year 2004. However, $266 million, or 89 percent of 
that figure, is listed as ``other programs,'' which are maintained at 
fiscal year 2003 level funding. Please explain how the majority of 
NOAA's $16.9 million increase for the Climate Change Research 
Initiative shows a commitment to ``fully funding climate research'' 
when no new funds are being requested for long standing, well 
respected, NOAA climate programs?
    Answer. The $16.9 million request for the Climate Change Research 
Initiative (CCRI) represents a single NOAA climate request that is 
targeted toward the highest priority national needs as described in 
this Presidential initiative and in the National Academy of Sciences 
2001 report Climate Change Science: An Analysis of Some Key Questions. 
This is on top of providing full funding for NOAA's long-standing 
climate programs, including provision of inflationary costs and planned 
pay raises in the President's fiscal year 2004 budget. The request 
makes full use of NOAA's long-standing climate programs. In particular, 
of the $16.9 million request, we are using existing programs and 
laboratories as follows:
  --Global Ocean Observing System (+$6.3 million request).--This effort 
        will be managed by NOAA's Office of Global Programs (OGP) and 
        is expected to include support for Scripps Institution of 
        Oceanography, University of Miami, Woods Hole Oceanographic 
        Institution, and University of Hawaii, among others.
  --Carbon Cycle Observing System ($5.0 million).--This system, focused 
        on determining the amount of carbon dioxide taken up by North 
        America, is to be operated by NOAA's Climate Monitoring and 
        Diagnostics Laboratory (CMDL) in conjunction with the Climate 
        and Global Change Program. CMDL has substantial experience in 
        operating large-scale atmospheric observing systems, having 
        operated the Baseline Observatories (including Mauna Loa) that 
        document the global rise in greenhouse gases. The Climate and 
        Global Change Program will ensure university involvement in 
        modeling and data analysis.
  --Aerosol-Climate Interactions ($1.0 million).--This increase builds 
        on an existing program aimed at one of the most prominent 
        uncertainties in climate projection, namely the impacts of fine 
        airborne particles on climate. This will be administered 
        through NOAA's Office of Global Programs and the Aeronomy 
        Laboratory.
  --Supercomputing ($3.5 million).--This will support an increase in 
        climate computational ability at NOAA's Geophysical Fluid 
        Dynamics Laboratory, which originated the modeling of climate 
        in the 1960's.
    The remaining $1.1 million in NOAA's fiscal year 2004 requested 
CCRI increase would be to fund the Climate Change Science Program 
Office, which would provide coordinated national leadership for the 
President's interagency climate and global change program, including 
the coordination for CCRI among the Departments of Commerce, State, 
Interior, Health and Human Services, Energy, Agriculture, and Defense, 
and the Environmental Protection Agency, the National Science 
Foundation, the National Aeronautics and Space Administration, the 
Smithsonian Institution, the Office of Management and Budget, and the 
Office of Science and Technology Policy.
    In addition, fiscal year 2003 CCRI funding is also being used in 
existing programs. CCRI supports expansion of the Regional Integrated 
Science and Assessments Program (RISA) of OGP, which focuses on 
developing pilot projects for using climate information and enhancing 
collaboration among researchers, decision-makers, and the public. This 
year, a new RISA project will be started in Hawaii at the East-West 
Center looking at the options, risks, and uncertainties in mitigating 
and adapting to year-to-year climate variability and long-term climate 
change.
                      trade adjustment assistance
    Question. The Commerce Department administers a small program, 
Trade Adjustment Assistance for Firms, that is authorized to be funded 
at $16 million, but is currently operating at $10.4 million. Small 
companies in my state have benefited from expertise provided through 
this program and have improved their competitiveness against imports. I 
was pleased that the fiscal year 2004 budget request includes funding 
of $13 million, but am concerned by reorganization proposals. It is my 
understanding that the Trade Adjustment Assistance Centers (TAACs) may 
be moved into the Economic Development Administration regional offices 
providing another level of bureaucracy to this small and successful 
program. I am aware that discussions have been initiated to keep the 
TAACs as free-standing programs under the International Trade 
Administration. It is also my understanding that the formula is being 
recalculated in a manner that would be unfavorable to the Western 
Region TAAC. Could you discuss these proposed changes and the effect 
they may have on the program?
    Answer. EDA's transition to a decentralized program delivery 
structure was begun during the last Administration. Current EDA 
leadership is simply completing the process. EDA's Public Works, 
Economic Adjustment and Local Technical Assistance (including 
University Centers) programs are all administered by EDA's six regional 
offices. The Trade Adjustment Assistance (TAA) for Firms program is the 
only regional program activity that is administered by EDA headquarters 
rather than by the EDA regional offices.
    The realignment of the TAA for Firms program to mirror the 
decentralized structure of EDA's other programs will simply transfer 
TAA for Firms processing functions, currently being performed in EDA 
headquarters, to the regional offices. The requirements and basic 
processes for the TAA for Firms program will remain unchanged. As with 
EDA's other programs that have been successfully decentralized to the 
regional level for many years, this action will bring the TAA for Firms 
program closer to the firms it serves and in line with the President 
Management Agenda. This change will not affect the structure of the 12 
Trade Assistance Adjustment Centers (TAAC).
    Under this structure, the TAACs will interact with new, more 
locally-based EDA personnel, but the structure will not result in an 
additional level of bureaucracy. In fact, the more robust program 
delivery capability of EDA regional offices is expected to improve 
EDA's overall administration of the TAA for Firms program.
    EDA funding allocations for the TAACs for fiscal year 2003 were 
calculated following the same methodology used in fiscal year 2002 and 
previous years. EDA is presently working with the TAAC community to 
establish a formalized and quantifiable funding formula that can be 
replicated year-to-year, allocating funding based on various factors, 
including TAAC performance levels. EDA has not yet proposed a funding 
formula for 2004 and beyond. On March 5, 2003, EDA staff met with 
representatives of the TAACs to seek input and to discuss possible 
funding formulas. On May 29, 2003, the TAAC community responded with a 
suggested funding formula, which EDA currently is considering. In 
addition, some TAACs, including the Great Lakes TAAC (Ann Arbor, MI) 
and the Western TAAC (Los Angeles, CA) expressed concerns about the 
overall TAAC community's recommendations to EDA. These minority 
opinions are also being considered by EDA. EDA intends to proceed with 
the development of a formalized and quantifiable funding formula, in 
consultation with the TAAC community, that will not only provide each 
TAAC with a base level of funding but will also reward those TAACs with 
the highest performance levels.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski

                   TRADE AGREEMENTS--IMPACT ON SUGAR

    Question. Mr. Secretary, the Administration has sought to move the 
WTO and FTAA negotiations into a more serious phase, concluded 
negotiations on free trade agreements (FTA's) with Chile and Singapore 
and launched four new FTA negotiations--with Central America, Morocco, 
the South Africa Customs Union, and Australia. And more such FTA 
initiatives may be on the way.
    I am concerned that negotiations pursued piecemeal, with inadequate 
attention to industry-specific problems, as they seem now headed, could 
bring disastrous results to American sugar beet and cane producers and 
refiners.
    Do you share my concern that inclusion of sugar trade provisions in 
bilateral or regional trade agreements could leave the U.S. sugar 
industry vulnerable to increased competition without opening European 
and other consumer markets?
    Answer. The U.S. Department of Agriculture has jurisdiction over 
this issue and therefore is the appropriate agency to respond to this 
question.
    Question. Every other major sugar producing country excludes sugar 
from their regional and bilateral trade agreements, even so-called 
``free trade agreements.'' Why would the United States include 
sensitive products like sugar in FTA's if other countries do not?
    Answer. The U.S. Department of Agriculture has jurisdiction over 
this issue and therefore is the appropriate agency to respond to this 
question.
    Question. Should trade in sugar therefore be addressed only in the 
multilateral negotiations of the World Trade Organization (WTO)?
    Answer. The U.S. Department of Commerce, primarily through its 
International Trade Administration unit supports bilateral and multi-
lateral trade negotiations and monitors the results of signed trade 
agreements. However, in relation to sugar trade issues the U.S. 
Department of Agriculture has jurisdiction and therefore is the 
appropriate agency to respond more fully to these questions.
    Question. How do you plan to address other countries' policies 
distorting trade in sugar, which create a ``dump'' in the market with 
prices averaging barely half the world average cost of production for 
the past two decades? Do you seek to impose restrictions on sugar 
trade-distorting policies on developing and developed countries alike?
    Answer. In general, the Department of Commerce is examining the 
role of market distortions and their effect on trade in the context of 
the Doha Round. We note that in their mandate for negotiations on Rules 
in the Doha Round, the Trade Ministers included disciplines on ``trade-
distorting practices'' as an explicit area for further clarification 
and improvement. Accordingly, the United States has addressed this 
issue already in our submissions to the Rules Negotiating Group. For 
example, in our October 22, 2002 Basic Concepts and Principles paper, 
we noted that:

    ``A government's industrial policies or key aspects of the economic 
system supported by government inaction can enable injurious dumping to 
take place. Although these policies take on many different forms, they 
can provide similar artificial advantages to producers. For instance, 
these policies may allow producers to earn high profits in a home 
`sanctuary market,' which may in turn allow them to sell abroad at an 
artificially low price. Such practices can result in injury in the 
importing country since domestic firms may not be able to match the 
artificially low prices from producers in the sanctuary market.'' (TN/
RL/W/27, at 4)

    We believe that addressing market- and trade-distorting practices 
is essential to a rules-based multilateral trading system where U.S. 
domestic producers and U.S. exporters can compete on a level playing 
field, and we will press strongly throughout these negotiations for 
strengthened disciplines in this area.
    More specifically, the Department of Commerce vigorously enforces 
the unfair trade laws, and has three outstanding antidumping duty 
orders covering sugar from Belgium, France, and Germany. There is also 
a countervailing duty order covering sugar from the European Community 
in effect. As you know, our antidumping and countervailing duty laws 
apply to developed and developing countries alike.

                   TRANSPARENCY IN TRADE NEGOTIATIONS

    Question. Representatives of American workers and industries report 
that they have not been consulted or even briefed sufficiently on 
ongoing trade negotiations, including Free Trade Agreements and the 
U.S.-Mexico sweetener agreement. What measures are you taking to 
improve transparency of trade negotiations with key American 
constituencies?
    Answer. Transparency throughout the negotiating process 
significantly strengthens the ability of U.S. negotiators to craft 
trade agreements that will benefit the U.S. economy. The Department of 
Commerce makes every effort to consult with American constituencies 
before, during, and after trade negotiations on all aspects of trade 
negotiations in which the Department is involved. The U.S.-Mexico 
sweetener agreement has been handled by the Department of Agriculture 
and the U.S. Trade Representative.
    At the launch of negotiations, and when major policy issues arise, 
the Administration issues a Federal Register notice. After carefully 
reviewing and cataloging the responses, we draw on this material to 
inform our positions throughout the negotiation. We also participate in 
public hearings to get additional input.
    During the negotiations, Department staff regularly brief industry 
groups on the status of trade negotiations. It is extremely important 
to share as much information as possible, as early as possible, with 
interested parties. One of the ways we seek private-sector input is 
through the Industry Consultations Program, which is jointly 
administered by Commerce and the United States Trade Representative, 
and includes 21 industry sector and functional advisory committees and 
approximately 345 industry executives as members.
    We also brief other industry groups, associations, and individual 
companies as requested. We coordinate with broad industry associations, 
such as the National Association of Manufacturers, to seek input on 
trade negotiations. Industry-specific trade specialists within the 
Department's Trade Development Unit canvass their sectors for input 
regarding all relevant policy decisions. Staff regularly draft material 
that contributes to trade negotiation summaries which are posted on 
USTR's public website. We also hold public hearings at important 
junctures in negotiations so interested parties can hear first-hand 
from the negotiators or from more senior U.S. officials how 
negotiations are proceeding. The Department uses other avenues such as 
World Trade Week and our export assistance centers to try to reach a 
broad spectrum of interests.
    After the negotiations are concluded, we prepare user-friendly 
summaries and industry-by-industry reports that are posted on our web 
site.

                      STEEL TARIFFS--WTO DECISION

    Question. Are the temporary tariffs on steel, imposed under section 
201 of the Trade Act, having the desired effect?
    Answer. In March 2002, following a thorough U.S. International 
Trade Commission (ITC) investigation and after reviewing the ITC 
recommendations, the President implemented the steel safeguard remedy 
to provide the temporary relief the industry needed to facilitate the 
adjustment and rationalization of the U.S. steel industry.
    The U.S. steel industry has experienced an unprecedented level of 
consolidation and restructuring, with additional consolidation likely 
in the near future. The International Steel Group led the way by 
acquiring and reorganizing the integrated production facilities of LTV 
and Acme Steel and last month bought Bethlehem Steel. US Steel recently 
acquired National Steel. These and other companies have negotiated more 
flexible labor agreements that are expected to generate significant 
cost savings. In the mini-mill sector, Nucor is investing heavily to 
modernize the mills it purchased from Trico Steel and Birmingham Steel. 
A number of smaller companies have closed and others have emerged from 
bankruptcy, downsized and under new ownership.
    Any decision regarding modification of the Section 201 remedy will 
follow submission of the ITC's mid-term review to the President and 
Congress on September 20, 2003. Our trade law requires the ITC to 
prepare this report, which will document the efforts of the domestic 
industry to adjust to import competition.
    After the President receives the mid-term report, the statute gives 
him greater authority to ``reduce, modify, or terminate'' the 
safeguard. A decision under this authority will be taken by the 
President, and we cannot prejudge what his decision may be.
    Question. What progress has been achieved in reducing excess steel-
making capacity abroad?
    Answer. Since September 2001, the steel initiative at the 
Organization of Economic Cooperation and Development (OECD) has engaged 
in a serious review of the world steel capacity situation in light of 
the adverse impact on world steel markets from excess inefficient 
capacity. To this end, the OECD established the Capacity Working Group 
to examine approaches that could be used to monitor and encourage the 
closure of inefficient excess capacity and restructuring developments 
in the industry through market forces. The primary tool for the 
Capacity Working Group is the periodic peer review of the reports from 
the participating countries on their respective steel industry. These 
reports describe capacity and production levels, likely closures and 
new capacities. Information on significant legal and policy changes 
that affect the steel making capacity are also contained in these 
reports. The peer reviews are conducted at OECD among the participating 
countries. When the governments present their reports, the 
participating countries ask any questions they might have on the 
reports. The purpose of the peer review to highlight any significant 
problems related to inefficient excess capacities in the global steel 
market.
    As of May 2003, the participating countries have reported 107.07 
million metric tons of crude steel capacity that have been closed 
during 1998 to 2002. The United States accounts for approximately 14 
million metric tons of this reduction. They also forecasted an 
additional 29.00-35.60 millions of closures for the period of 2003-
2005. However, some countries are also estimating some increase in new 
capacity or replacement of old capacity. On an aggregate level, we 
expect 16.75-17.05 million metric tons of new capacity for 2003-2005.
    Question. When can we expect to achieve a better balance between 
steel-making capacity and global demand?
    Answer. Global production and consumption of steel reached 902 and 
812 million metric tons respectively in 2002. While analysts generally 
agree that the figure for global capacity is about 1 billion metric 
tons, there is no definitive number. In 2002, production and 
consumption of steel products significantly increased from 2001, and 
most of the increase in demand and production has been from China. In 
some ways, the increase in demand for steel products in 2002 has 
diminished the need to reduce capacity in many regions. For example, 
there is no evidence that significant elimination of capacity or 
decreases in production have taken place in Russia and Ukraine, both 
countries which analysts cite as having significant amounts of 
inefficient excess capacity. Similar to the situation in China, these 
governments are reluctant to face the social cost of dismantling steel 
mills in towns where the steel mills are the major employment source. 
Meanwhile, we believe that Russia, Ukraine, Japan, Korea and India have 
all increased exports to China in 2002. Many analysts wonder how long 
China's growing economy will sustain this frantic pace of demand. 
China, which became the largest steel importer in the world in 2002, 
importing close to 30 million metric tons, is responsible for much of 
the increase in worldwide demand. Without continued import demand from 
China, countries that count on exports to sustain their production 
levels might become sources of excess supply. The OECD Capacity Working 
Group's peer review process will allow us to quickly detect excess 
capacity. It is therefore difficult to predict when we can achieve a 
better balance of capacity and demand. However, we do know that 
eliminating subsidy and other market-distorting practices from the 
world steel market is the key to permanently removing inefficient 
excess capacity.
    Question. Is the Administration prepared to continue the temporary 
steel tariffs, for as long as necessary, even if the World Trade 
Organization dispute settlement panel rules against the United States?
    Answer. The United States disagrees with many of the WTO panel's 
preliminary conclusions, but we are pleased that the panel rejected 
some of the complainants' claims. The WTO dispute settlement process 
regarding the steel safeguard measures is not yet complete, so it is 
premature to discuss any response to the panel report. In the WTO 
dispute settlement system, a report from either a panel or the 
Appellate Body is not final unless formally adopted. The steel panel 
report has not yet been publicly released in final form, and the appeal 
has not even begun.
    In the meantime, the steel safeguards measure will remain in place. 
From the beginning, we planned to reduce the supplemental tariffs by 
one-fifth each year. We made the first such reduction in March of this 
year. The panel report does not affect this process.
    Under our domestic safeguards laws, the International Trade 
Commission issues a report on domestic producers' condition midway 
through the term of a safeguard measure, which will occur toward the 
end of September 2003 in the steel case. The President may reduce, 
modify, or terminate a safeguard measure after receiving this report.
                                 ______
                                 
             Questions Submitted by Senator Robert C. Byrd

                             BYRD AMENDMENT

    Question. U.S. Trade Ambassador Zoellick assured me, personally, 
and publicly, that the Bush Administration would defend the Byrd 
Amendment against the case brought by our trade competitors before the 
World Trade Organization. Imagine my surprise, then, to learn that the 
Administration had recommended a repeal of the law in its fiscal year 
2004 budget request. In fact the press apparently was notified by the 
Administration of its intent to recommend a repeal of the Byrd 
Amendment the day before the WTO Appellate Body issued its final 
determination of the case.
    Why would the Administration advise me and recipients of Byrd 
Amendment funds across the nation that it strongly supported the Byrd 
Amendment, if, at the same time, the Administration was planning to 
request its repeal in the fiscal year 2004 budget?
    Answer. The Administration vigorously defended the Byrd Amendment 
at the WTO. Unfortunately, the WTO ruled against the United States on 
this issue. The Administration continues to believe that the decision 
on the Byrd Amendment (Continued Dumping and Subsidy Offset Act of 
2000) was not inconsistent with WTO rules.
    We look forward to working with USTR, Treasury and Congress to 
develop a response to the WTO's decision. We recognize that the 
ultimate response to the WTO decision lies with Congress, and your 
constitutional authority to determine whether, when, and in what way to 
comply. There may be a number of ways in which U.S. law could be 
amended to address the issues raised by the WTO Appellate Body without 
sacrificing our goal of providing effective assistance to companies and 
workers that have been injured by unfair trade.
    Question. On February 4, 2003, I sent a letter to the President 
signed by 70 Members of the U.S. Senate, urging the Administration to 
negotiate a solution to the Appellate Body's ruling on the Byrd 
Amendment, and to consult closely with the Congress on the particulars 
of these negotiations. Obviously, there is no support in Congress for a 
repeal of this law.
    How does the Administration intend to resolve this issue in WTO 
negotiations? When will the United States put this issue on the agenda 
of the WTO negotiations?
    Answer. The Office of the United States Trade Representative is the 
agency primarily responsible for developing the U.S. agenda for these 
negotiations. We would look forward to working with Congress in 
crafting a strategy that would allow us to comply while at the same 
time ensuring the effectiveness of our trade laws.

                 EMERGENCY STEEL LOAN GUARANTEE PROGRAM

    Question. Last year, in its fiscal year 2003 budget request, the 
Bush Administration recommended rescinding $96 million from the 
Emergency Steel Loan Guarantee Program. In its fiscal year 2004 budget 
request, the Administration again recommended rescinding whatever 
monies for the program remained in the budget. Congress rightfully 
rejected the Administration's recommendation for fiscal year 2003, and 
I fully anticipate it will reject the Administration's recommendation 
with respect to the fiscal year 2004 budget, as well.
    How can the Administration continue to tell America's steelworkers 
that it is doing all it can to support the U.S. steel industry on the 
one hand, while, at the same time, seeking to eliminate this program?
    Answer. Due to the lower than anticipated demand for steel loan 
guarantees, the Emergency Steel Loan Guarantee Program has been subject 
to proposed rescissions in both fiscal year 2003 and fiscal year 2004. 
The Administration believes that this program has not been an effective 
method of supporting the U.S. steel industry.
    Question. What do you say to families like the 25,000 in the Ohio 
River Valley, who, right now, are looking to the Emergency Steel Loan 
Guarantee Program to save their jobs and preserve their pensions?
    Answer. The Emergency Loan Guarantee Board has approved, with 
conditions, a loan guarantee for a loan amount of $250 million to 
Wheeling-Pittsburgh Steel Corporation, which is located in the Ohio 
River Valley.
    Question. Can you provide me with the names of any steel industry 
consultants that were recommended by Bush Administration officials to 
advise members of the Emergency Steel Loan Guarantee Program about the 
validity of the application submitted by Wheeling-Pittsburgh Steel?
    Answer. Bush Administration officials did not recommend steel 
industry consultants to advise members of the Emergency Steel Loan 
Guarantee Board or loan program staff concerning the application 
submitted by Royal Bank of Canada on behalf of Wheeling-Pittsburgh 
Steel Corporation. The loan program staff chooses and retains steel 
industry consultants to assist with review and analysis of applications 
for loan guarantees. Choices are made based on factors such as specific 
related prior experience, recommendations from third parties involved 
in the steel industry, general reputation, satisfactory performance on 
prior applications, and absence of conflicting relationships.

                       IMPORT MONITORING PROGRAM

    Question. What is the Administration's position regarding 
instituting a program to monitor surges of all [steel] imports into the 
United States, not just those steel imports that were originally 
subject to the 201 investigation of steel products? If the 
Administration will not support such an import monitoring program, why 
not?
    Answer. The Administration currently monitors steel imports through 
two steel import monitoring programs administered by the Department of 
Commerce's Import Administration. These two import monitoring programs 
differ in scope of coverage and source of information.
    One program, which was instituted as part of the safeguard remedy, 
applies only to products subject to the safeguard, and draws upon 
aggregate information collected from proprietary information reported 
on steel import licenses. Information on these imports is collected and 
reported by product category and country of origin. The primary purpose 
of this program is to provide early identification of import surges, 
particularly those from excluded developing countries, that could 
undermine the relief provided to the industry by the President.
    The other steel import monitoring program, which is much broader in 
scope, covers all imports of steel mill products. This monitoring 
program was established prior to the safeguard remedy, and is based on 
the early release of steel import data collected by the Census Bureau. 
It has been expanded over the past year to provide detailed monthly 
statistical information on steel imports including import quantity, 
value and unit values. This early release data is the most timely and 
reliable monthly data available on U.S. steel imports and is issued 
roughly three weeks after the close of the import month. Import volume 
and value data are collected and reported by AISI category as well as 
section 201 remedy category and by country of origin.
    To increase the usefulness of the monitoring programs, detailed 
information on steel imports compiled from both steel import monitoring 
programs is available to interested members of the domestic steel 
industry, government and public through the steel import monitoring 
website--www.ia.ita.doc.gov/steel/license/. The data is reviewed 
continuously and is updated on a regular basis--the day of release for 
monthly Census import data; each week for import license data.
    Expansion of the current import monitoring programs, particularly 
the extension of the licensing requirement to products beyond the scope 
of the section 201 remedies, would require additional authorizing 
legislation. Depending upon the scope of the expansion and the number 
of new product categories and additional Harmonized Tariff Schedule's 
(HTS) to be added to the system, the expanded monitoring system could 
entail a considerable outlay of new resources, particularly if the same 
level of detailed reporting is to be maintained.
    Currently, more than 25,000 licenses are issued each month and the 
website generates approximately 7,000-8,000 tables and graphs which 
must be reviewed and updated each week. Expansion to all steel mill 
products would more than double the number of licenses. The number of 
covered tariff numbers would almost triple and depending upon the 
number of steel categories added, the number of tables and graphs would 
likely triple as well. This is far beyond the capabilities of the 
existing database and monitoring program and would likely cause a 
decrease in service, timeliness and/or accuracy. Expansion to all 
tariff numbers in HTS Chapters 72 and 73 would greatly increase the 
number of licenses, covered tariff numbers and reported product 
categories and further tax the system.

                          201 MID-TERM REVIEW

    Question. The ITC has begun its mid-term review of the remedies 
that were imposed last year on imported steel under section 201. What 
criteria will the Bush Administration use to decide whether to lift the 
tariffs and other remedies that were imposed as a result of last year's 
investigation under section 201? Does the Administration plan to base 
its decision this fall on information gathered by the ITC during mid-
term review, and on advice offered by the entities referenced in 19 
U.S.C. section 2254, or on additional input, including extraneous 
comments submitted to the White House, or the U.S. Commerce Department, 
by foreign countries or foreign exporters, or by U.S. importers of 
steel products otherwise subject to the 201?
    What impact will foreign policy concerns have on the 
Administration's decision in this respect?
    Answer. The President implemented the steel safeguard remedy to 
provide the temporary relief needed to facilitate the adjustment and 
rationalization of the U.S. steel industry. Since the implementation of 
the steel safeguard remedy, the U.S. steel industry has experienced an 
unprecedentedly high level of consolidation and restructuring, with 
additional consolidation likely in the near future.
    As required by section 201, the International Trade Commission 
(ITC) recently initiated a mid-term review of the effectiveness of the 
steel safeguard remedy and the restructuring efforts undertaken by the 
industry. The ITC will collect information from a broad range of U.S. 
steel producers, foreign steel producers, and steel importers. Based on 
a request from the House Ways and Means Committee, the ITC will also 
review the impact of the safeguard remedies on steel consumers. The ITC 
will issue its report to the President in September.
    The President may reduce, modify or terminate the section 201 
remedies imposed in March 2002; he may also leave the measures 
unchanged. In accordance with the statute, the President will take into 
account the report and advice of the ITC, as well as the advice of the 
Secretaries of Commerce and Labor, in reaching a decision under section 
204. In addition, the President may consult with the House Ways and 
Means Committee or the Senate Finance Committee.
    However, the statute does not limit the President to consider only 
these sources in his decision. As it does in every section 201 
proceeding, the Administration will consider any information that is 
potentially relevant to an evaluation of the statutory factors, 
including information or advice from members of Congress, U.S. steel 
producers, U.S. steel consumers, U.S. importers and other interested 
parties. The Administration will also consider any information 
presented to it by foreign governments or foreign parties that is 
relevant to the inquiry under section 204.

                DEDUCTING 201 DUTIES FROM AD/CVD MARGINS

    Question. In a recent case, the Department considered but made no 
final determination regarding whether to deduct from the U.S. price of 
a dumped or countervailable product the amount of 201 duties that had 
already been imposed on an imported steel product. 201 duties reflect a 
decision by the President to increase normal customs duties, 
temporarily, and such duties can be deducted from the U.S. price in 
determining the margin in an antidumping or countervailing duty case. 
What is the Department's position concerning the deduction of 201 
duties from U.S. price in determining the margin in an antidumping or 
countervailing duty case?
    Answer. To date we have not made a decision concerning this 
important issue. We intend to address it in the context of upcoming 
antidumping case decisions after we have received comments from 
interested parties.
    The issue of how to treat section 201 duties in our dumping margin 
calculations was raised in the final weeks of our statutory time period 
in our recent investigation on steel wire rod from Trinidad and Tobago. 
In that case, the foreign respondent, the domestic producers and the 
United Steelworkers of America submitted comments on this issue, but 
the domestic producers and the United Steelworkers of America requested 
that the Department allow more time for broader comment on this far-
reaching policy determination. Since the adjustment in the steel wire 
rod from Trinidad and Tobago case would have had an insignificant 
effect, we did not address the treatment of section 201 duties in that 
case.
    We have a few cases currently pending in which this issue has been 
raised. We are allowing all interested parties to comment fully on this 
issue, including parties not involved in these specific proceedings. We 
will carefully consider all comments before reaching a decision.

                         IMPORT ADMINISTRATION

    Question. My office has been advised that the Office of Policy 
within the Department's Office of Import Administration has been 
steadily expanding over the past several years. There is a concern that 
available resources within Import Administration are being diverted to 
the Office of Policy at the expense of the other offices within Import 
Administration that actually conduct the antidumping and countervailing 
duty investigations and administrative reviews. Could you please 
provide me with detailed information how the Office of Policy within 
Import Administration has expanded over the past five years? And for 
what purpose?
    Answer. At no time has the Office of Policy been expanded at the 
expense of the Operations offices. With the additional fiscal year 2001 
funding, management also increased the funding of the three Operations 
offices within IA that conduct AD/CVD cases. The growth of the Office 
of Policy resulted directly from increases in the annual 
appropriations, and represents a conscious decision of both the 
Executive and Legislative branches during the past two Administrations 
to develop tools for supporting and supplementing the enforcement of 
U.S. trade laws to address foreign unfair trade practices. There were 
no reductions in the budgets of the Operations during this period for 
the purpose of expanding the Office of Policy, nor was funding diverted 
to support Office of Policy growth.

 IMPORT ADMINISTRATION STAFFING OFFICE OF POLICY VS. OPERATIONS OFFICES
                          FISCAL YEAR 1999-2002
------------------------------------------------------------------------
                                                              DAS Groups
                  Fiscal Year                      Policy      (I, II,
                                                                 III)
------------------------------------------------------------------------
1999..........................................           27          222
2000..........................................           27          222
2001..........................................           55          222
2002..........................................           65      \1\ 222
------------------------------------------------------------------------
\1\ Does not include miscellaneous overhires to work on steel issues.
 
(Source: IA Staffing Plans).

    During the past five years, IA received two budget increases 
through the annual appropriations process in fiscal year 1999 and 
fiscal year 2001. The fiscal year 1999 appropriation included a funding 
increase for IA to conduct new AD/CVD program activities set forth in 
the Uruguay Round Agreements Act (URAA). IA management directed the 
Office of Policy to assume responsibility for the new activities 
described below.
  --AD/CVD Sunset Reviews
  --Subsidies Enforcement
    The fiscal year 2001 appropriation included a funding increase to 
support the Trade Compliance Initiative (TCI) first proposed by the 
Clinton Administration and subsequently supported by the Bush 
Administration. IA's new TCI program activities were assigned to the 
Office of Policy and included the following new activities:
  --Overseas Compliance Program
  --China Trade Compliance and Japan Trade Compliance
  --Import Surge Monitoring, Expedited Investigations & Subsidies 
        Enforcement
  --IA Senior Official Stationed in Geneva, Switzerland.
    In particular, a significant portion of these funds and increased 
staffing were used to support Import Administration's increasing 
activity on three fronts--(1) steel issues, (2) pre-petition support to 
potential users of the AD/CVD laws, and (3) WTO negotiations on rules. 
Of the new policy analysts hired in the past two years, more than half 
have been dedicated to these new areas.

              IMPORT ADMINISTRATION: CUSTOMS INSTRUCTIONS

    Question. I learned of possibly misallocated resources when my 
office was advised that certain companies have been unable to obtain 
funds from the special accounts that have been established at the 
Treasury Department under the Byrd Amendment. It is my understanding 
that certain companies cannot access funds in the relevant accounts 
because investigators in Import Administration have been too short-
staffed to send necessary instructions regarding certain cases to the 
U.S. Customs Service. Consequently, some U.S. companies that have been 
eligible to receive funds under the Byrd Amendment have been told by 
Customs that there is simply no money in relevant accounts at the U.S. 
Treasury Department. Are you aware of this problem and can you tell me 
whether there has been any effort by the Department to address this 
issue?
    Answer. As explained below, it is true that, in some instances, 
there has been a delay at the Department of Commerce in issuing 
liquidation instructions. It should be understood, however, that the 
DOC does not maintain the special accounts established under the Byrd 
Amendment and cannot, therefore, speak to the reason(s) why any 
particular claimant has been unable to receive distributions.
    DOC conducts administrative reviews of antidumping (AD) and 
countervailing duty (CVD) orders where a request for review is timely 
filed by an appropriate interested party. If a review is initiated, the 
entries covered by the review remain suspended until the Department 
completes the review (typically 12 to 18 months from initiation). If 
the Department's final results are not challenged (in either the Court 
of International Trade or NAFTA), Import Administration issues 
liquidation instructions, whenever possible, within 15 days of the 
issuance of the final results of the administrative review. However, if 
parties challenge our final results and obtain an injunction against 
liquidation of the entries covered by the review, those entries will be 
suspended until the litigation is resolved. If the Department does not 
receive a request for administrative review, or if a review request 
covers only entries from certain producers/exporters, the Department 
advises the Department of Homeland Security's Bureau of Customs and 
Border Protection (BCBP) to liquidate the entries for which a review 
was not requested.
    The Department's liquidation instructions indicate to the BCBP how 
much in the way of special duties to assess on entries of merchandise 
subject to an AD and/or CVD order. BCBP then assesses duties on the 
entries and places the proceeds in special accounts pursuant to the 
Byrd Amendment. When claims are made for the funds in the special 
accounts, BCBP determines whether--and to what degree--the claims will 
be satisfied.
    The Department takes a proactive approach to ensure that 
liquidation instructions are properly issued. Despite these efforts, 
given the sheer volume of cases and instructions that must be issued by 
the Department to the BCBP, there may be instances where entries have 
inadvertently not been liquidated. Typically, the Department is 
notified of these instances by the BCBP or private parties (such as the 
domestic producer or the U.S. importer). Import Administration makes 
every effort to work with parties and the BCBP to identify the problem, 
and to address it as expeditiously as possible. We closely monitor the 
accuracy and the timeliness of our issuance of instructions to BCBP and 
immediately address any problem that we identify or is brought to our 
attention. We are not aware of any instances in which customs 
instructions were not sent due to staffing issues.
    Finally, we note that, to address concerns that there had been 
significant delays in the issuance of liquidation instructions in 
certain cases, the Department conducted a review of all completed 
proceedings to ensure that BCBP has been issued appropriate 
instructions. Import Administration officials reviewed more than 200 
final decisions in the course of this project, which took several years 
to complete. As a result, the Department ensured that all liquidation 
instructions had been issued for all entries subject to the orders/
findings involved.

              VALIDITY OF OUTSIDE CONTRACTOR PATENT SEARCH

    Question. Why does the PTO trust that an outside contractor with no 
relevant patent experience would conduct a valid patent search in the 
same thorough and learned manner as a patent examiner with years of 
experience?
    Answer. The USPTO is confident that a certified outside contractor 
can conduct a valid patent search in the same thorough manner as an 
experienced patent examiner. The USPTO's decision to split the search 
and examination functions--a key component of the 21st Century 
Strategic Plan--is not an unprecedented or untested approach. The USPTO 
and its sister patent offices throughout the world have considerable 
experience in splitting the two tasks of search and examination. For 
example, search and examination have been separated within the European 
Patent Office (EPO) for more than twenty years without any detriment to 
quality. Indeed, search quality will actually improve under a 
Contractor Search Service (CSS) system, as the examiner will be acting 
as a second pair of eyes relative to the search contractors.
    The USPTO will provide detailed search guidelines and quality 
measures to ensure the quality and uniformity of prior art searches 
performed by a CSS. Prior to contract award, all offerors will be 
evaluated to ascertain the technical background and skills of their 
employees and their abilities to provide a high quality search.
    The USPTO plans to have multiple levels of Quality Control/Review 
and will promptly terminate its contract with any provider whose 
searches and search reports do not meet the standards. Furthermore, 
patent examiners can always request a further search or perform a 
supplemental search with approval of their supervisor if the examiner 
feels the search supplied is inadequate.
    With these quality assurance measures, there should be no adverse 
effects on the presumption of validity or the public confidence in 
patents. In fact, this collaborative effort in prior art searching will 
improve both efficiency and substantive focus in the preparation, 
examination, and prosecution of patent applications in a more cost 
effective and expeditious manner. It will, with the implementation of 
the quality measures outlined in the 21st Century Strategic Plan, 
strengthen the validity of patents, thus providing a more substantive 
and valuable end product for our customers.

                COST OF OUTSIDE CONTRACTOR PATENT SEARCH

    Question. Why is the PTO not concerned that outsourcing this 
function could increase, rather than a decrease agency costs?
    Answer. The USPTO believes that, overall, it will be cost effective 
to competitively source patent searches. The USPTO has been criticized 
for ``hiring its way out'' of its growing patent workload problem. For 
example, in 2002 the Senate Appropriations Committee stated, ``PTO 
management has not been sufficiently innovative. Although patent 
filings have increased dramatically over the past decade, PTO 
management chose to remain wedded to an archaic patent process and 
attempted to hire its way out of its workload problems.''
    Competitive sourcing of searches is part of the USPTO's effort to 
address incoming work and an inventory of pending applications by 
allowing patent examiners to concentrate on patentability 
determinations rather than spending time on searching. The removal of 
search functions will allow examiners to process more patent 
applications, assisting the USPTO in lowering pendency and reducing 
backlogged applications.
    Competitive-sourcing of the search will be validated by a proof of 
concept before we proceed to full implementation.

            RELIABILITY OF OUTSIDE CONTRACTOR PATENT SEARCH

    Question. How does the PTO plan to address the issue that searches 
conducted by an outside firm could prove faulty or unreliable and, as a 
result, could undermine the validity of patents issued by the PTO?
    Answer. In addition to the steps outlined in response to the 
question above regarding confidence in contractor abilities to conduct 
prior art searches, the USPTO has benchmarked models that other 
intellectual property organizations have used for many years. For 
example:
  --The Japan Patent Office (JPO) also has experience in splitting the 
        two tasks of search and examination. The Japanese government 
        established the Industrial Property Cooperation Center (IPCC) 
        in 1985 for such purposes as providing search reports on patent 
        applications pending before the JPO, indexing patents according 
        to the F-term classification scheme used by the JPO, and 
        assigning classifications to patents according to the 
        International Patent Classification system. Since then, more 
        than one million prior art searches have been conducted by IPCC 
        for JPO's patent examiners and more than two million F-term 
        assignments have been made to JPO's searchable database. The 
        IPCC is now staffed with about 1,100 engineers, only 40 of whom 
        were previously employed as patent examiners. Based on such an 
        extensive base of empirical data, together with on-site 
        benchmarking reviews that have been conducted with JPO 
        officials over the past decade, we have no doubt that searches 
        can be done with high quality by experienced and skilled 
        engineers.
  --Closer to home, the USPTO has allowed examiners to elect the 
        services of searchers to search non-patent literature and 
        foreign patents in the Office's Electronic Information Centers 
        for the last decade. Thus far this year, examiners have 
        requested 13,011 searches. These searches are conducted by 
        contract staff or Government employees who have extensive 
        knowledge of the database content, search strategy formulation, 
        and command language of several commercial online providers, 
        such as Dialog and Lexis-Nexis. They also have knowledge of 
        internal search systems, such as the Examiner's Automated 
        Search Tool (EAST) and the Web-based Examiner Search Tool 
        (WEST), and are adept at searching the Internet.
  --The European Patent Office (EPO) serves as another benchmark. The 
        EPO has extensive experience that clearly demonstrates that a 
        high quality search can be generated by someone other than the 
        substantive patent examiner with no diminution in the quality 
        of the patentability determination or the patent examiner's 
        ability to keep current with his or her understanding of, or 
        currency with, the technology and/or state of the art. Since 
        1978, EPO searchers in The Hague and Berlin (and more recently, 
        Munich) produced almost 1.8 million searches of which half were 
        for EPO's substantive patent examiners in Munich. In fact, the 
        USPTO has already received more than 75,000 patent search 
        reports from the EPO over the past few years pursuant to the 
        Patent Cooperation Treaty (PCT). While that is not a direct 
        ``contractor'' model, conceptually there is virtually no 
        difference with the IPCC model described earlier.
    The EPO, where the search was carried out by an examiner in The 
Hague or Berlin and the examination was conducted by a three-man 
examining division in Munich, currently is moving towards combining the 
search and examination functions to improve productivity, not because 
there are quality issues associated with the separation of search and 
examination. Survey data collected from U.S. patent attorneys over the 
past five years show that the EPO's searches and patentability 
decisions are consistently of high quality.
    As Director Rogan explained in his April 3, 2003, testimony before 
the House Judiciary Committee's Subcommittee on Courts, the Internet 
and Intellectual Property, the USPTO and its sister patent offices 
throughout the world have considerable experience in splitting the two 
tasks of search and examination, as described above. Contrary to the 
assertion that quality suffers under such a structure, the reverse is 
true. During the hearing, Director Rogan entered into the record a 
letter from the President of the EPO, Dr. Ingo Kober, which discusses 
Europe's experience in this area. See attachment.
    While the EPO does not competitively source the search function, 
search and examination have been separated within the EPO for more than 
twenty years without any detriment to quality.
    For firms that would like to offer search services, the USPTO will 
follow the Federal procurement process to enter into contractual 
arrangements with them. The USPTO would maintain the authority to 
certify that a private firm, individual, or commercial entity was 
capable of providing a valid, thorough, and complete search of the 
prior art for patent examination processes.

              [ATTACHMENT--EUROPEAN PATENT OFFICE LETTER]

                                                     March 4, 2003.
Mr. James E. Rogan,
Under Secretary of Commerce for Intellectual Property and Director of 
        the United States Patent and Trademark Office, 2121 Crystal 
        Drive, Suite 906, Arlington, VA 22202 USA.
    Dear Mr. Rogan, I understand that some organisations and 
individuals in the United States have recently expressed certain 
misconceptions concerning a program of the European Patent Office, 
namely, Bringing Examination and Search Together or BEST. I would like 
to clarify some basic facts about this program to ensure it is properly 
understood.
    Any characterisation that the European Patent Office chose to 
``adopt'' the American system of searching and examining patent 
applications is simply not true. Our decision to combine the search and 
examination functions was based on the need to increase examiner 
productivity. As you know, these changes occurred during a time of 
transition to a more automated environment and a significant expansion 
of our staff.
    Indeed, the previous arrangement was initially dictated by 
historical and geographical reasons which no longer apply. However, 
this separate search and examination program, where the search was 
carried out by an examiner in The Hague or Berlin and the examination 
was conducted by a three-man examining division in Munich, produced 
high quality results and served us very well over a period of more than 
25 years. In fact, feedback we have received from our interested 
circles has consistently indicated high satisfaction levels with our 
searches.
    Finally, all major industrial property offices in the world 
currently confront a workload crisis that demands creative solutions. 
That is why I agreed to sign a bilateral record of discussion with you 
to explore the potential of exploiting searches generated by our 
respective Offices for counterpart patent applications. I am convinced 
that this will help improve patent quality, increase efficiency and 
productivity, and reduce operating costs.
    It is unfortunate that recent statements made by commentators on 
the EPO's current and future plans as well as on the USPTO's plans have 
characterised our processes as diverging, when in fact they are indeed 
converging.
    Should you wish further clarification of my views on this matter, I 
shall be glad to provide additional details.
            Yours sincerely,
                                       Dr. H.C. Ingo Kober,
                                                         President.

              VALIDITY OF OUTSIDE CONTRACTOR PATENT SEARCH

    Question. Why does the PTO trust that an outside contractor with no 
relevant patent experience would conduct a valid patent search in the 
same thorough and learned manner as a patent examiner with years of 
experience?
    Answer. The USPTO is confident that a certified outside contractor 
can conduct a valid patent search in the same thorough manner as an 
experienced patent examiner. The USPTO's decision to split the search 
and examination functions--a key component of the 21st Century 
Strategic Plan--is not an unprecedented or untested approach. The USPTO 
and its sister patent offices throughout the world have considerable 
experience in splitting the two tasks of search and examination. For 
example, search and examination have been separated within the European 
Patent Office (EPO) for more than twenty years without any detriment to 
quality. Indeed, search quality will actually improve under a 
Contractor Search Service (CSS) system, as the examiner will be acting 
as a second pair of eyes relative to the search contractors.
    The USPTO will provide detailed search guidelines and quality 
measures to ensure the quality and uniformity of prior art searches 
performed by a CSS. Prior to contract award, all offerors will be 
evaluated to ascertain the technical background and skills of their 
employees and their abilities to provide a high quality search.
    The USPTO plans to have multiple levels of Quality Control/Review 
and will promptly terminate its contract with any provider whose 
searches and search reports do not meet the standards. Furthermore, 
patent examiners can always request a further search or perform a 
supplemental search with approval of their supervisor if the examiner 
feels the search supplied is inadequate.
    With these quality assurance measures, there should be no adverse 
effects on the presumption of validity or the public confidence in 
patents. In fact, this collaborative effort in prior art searching will 
improve both efficiency and substantive focus in the preparation, 
examination, and prosecution of patent applications in a more cost 
effective and expeditious manner. It will, with the implementation of 
the quality measures outlined in the 21st Century Strategic Plan, 
strengthen the validity of patents, thus providing a more substantive 
and valuable end product for our customers.

               PILOT OF OUTSIDE CONTRACTOR PATENT SEARCH

    Question. If the PTO plans to test these searches in some sort of 
``pilot program,'' what assurances are there that such a pilot program 
will actually be undertaken? How will the PTO measure success? Who will 
measure success? Will the Congress be involved?
    Answer. To meet the requirements of their customers and to 
determine the feasibility of competitively sourcing search functions, 
the USPTO will implement a proof of concept through a pilot program. 
The Office will assure quality of contractor performance through 
continuous monitoring of the pilot and the conduct of a formal 
evaluation. The planned proof of concept will be widely vetted with 
USPTO's key stakeholders and the Patent Public Advisory Committee. The 
results of the pilot will also be widely shared. USPTO will conduct a 
formal review of the pilot prior to making a final decision as to 
whether or not to proceed with full implementation. The Congress will 
be kept informed throughout the process. Although the specifics of the 
pilot and evaluation have not been finalized, the USPTO is considering 
using an outside contractor to validate the quality of the searches.
    The USPTO already has obtained public comment on its plans and 
posted on its website for many months the answers to questions or 
suggestions they have received from the public, patent examiners, and 
the professional associations with whom it has worked extensively. The 
Office recently published on its website a detailed action plan which 
describes the implementation approach. What follows are the highlights 
of the administrative structure and processes USPTO is fully prepared 
to implement, including a description of the proof of concept.
    The USPTO will use the contractors to prepare complete and accurate 
search reports for patent applications. One or more contracts would be 
awarded. It is anticipated that there will be at least one contract 
specializing in each discipline. The contractor may be a private or 
commercial search entity with demonstrated expertise and search skills. 
The request for a search and the resulting search report are activities 
between the USPTO and the contractor.
    The USPTO would administer the same preliminary processing 
procedures currently established for new application filings. A copy of 
the application would be forwarded to the contractor approximately 
three months prior to the examination. The contractor would perform a 
prior art search and prepare a report using Patent Cooperation Treaty 
(PCT) guidelines and USPTO search guidelines for additional non-patent 
literature (NPL) resources as stated above.
    Upon completion of the report, the application would be forwarded 
to the Patent Technology Center to await review by the examiner. The 
examiner would then review the report and prior art cited. If the 
report was inadequate or if the examiner was personally aware of other 
prior art, the examiner could request time to search them, or have the 
report sent back to the contractor with an explanation of the 
deficiency and a request for supplemental information.
    The USPTO would maintain the authority to certify that a private 
firm, individual, or commercial entity was capable of providing a 
valid, thorough, and complete search of the prior art for patent 
examination processes. A certification process would be done at the 
USPTO. The process could be given to firms or individuals or a 
combination thereof. The certification process may be based on industry 
specific criteria and be given on an individual basis based on the 
firm's or individual's qualifications. Similar to the Primary Examiner 
at the USPTO, a senior member of the firm could sign off on an 
``assistant's'' search. Thus, while there are multiple options 
available, a preferred one would be to certify the ``firm'' which, in 
turn, would be responsible for certifying their individual searchers.
    The critical measures of success would be determined based on the 
contractors' ability to: (1) determine if disclosed invention is 
subject to an international search; (2) identify a field of search that 
would cover the disclosed invention; (3) select the proper tools and 
art collections to perform the search; (4) determine the appropriate 
search strategy for each of the selected search tools and art 
collections; (5) search the art collections using the selected search 
tools and search strategy, and using any additional strategy suggested 
by the art that is found; (6) retrieve sufficient information from art 
that is identified during the search to evaluate the pertinence of the 
art; (7) select the prior art that is most pertinent to the claimed 
subject matter; (8) record the results of the art that is selected 
according to the criteria set forth in the guidelines; and (9) 
determine if certain claims are found to be searchable subject matter 
and/or lack clarity or distinctness.
    The contractor would have to prove that it has ready access to the 
appropriate industry-specific search tools. Much of the work in 
developing industry-specific search tools is either in the process of 
being done or has already been published on the USPTO intranet in the 
form of Search Guidelines. These guidelines were developed by Quality 
Action Teams and represent a listing of appropriate search tools and 
databases for each technology. The guidelines include PCT Minimum 
Document requirements, appropriate text search systems, as well as the 
pertinent commercially available databases. In addition to using the 
established guidelines, a classified search using the U.S. Patent 
Classification (USPC) system would also need to be performed, if 
appropriate.
    Another requirement would be the technical qualifications of the 
contractors' staff. Just as in examining, varying levels of technical 
expertise are required for searching different technologies. In 
addition, the contractor would have to provide proof of a thorough 
understanding of the patent examining procedures and patent statutes. 
It is essential that any contractor have the ability to read and 
analyze claims, as well as broadly apply the prior art to produce a 
PCT-type search report, which would be submitted to USPTO. The 
contractor would need to be aware of patent law and practice and be 
able to understand such concepts as ``motivation'' for example. This 
could be ensured through testing requirements. Finally, the 
contractors' ability to provide timely reports would be essential to 
the program's success. Special attention would be paid to ensure treaty 
deadlines were enforced.
    For proper examination and quality comparisons, a search submission 
would be expected to include, at a minimum, a listing for every search 
including: (1) text search systems; (2) commercial databases; (3) USPC 
classified search, if appropriate; (4) the complete search statement 
and logic; and (5) a statement regarding the teachings and 
applicability of each reference against each claim.
    The USPTO also would have to maintain a ``search quality review 
process'' in order to ``sample'' the quality of searches submitted by 
the certified search authorities. A component of the in-process review 
activity is to evaluate the quality of the search results for each 
contractor. A statistically valid sample of cases would be reviewed 
using criteria such as whether the search was based on what is claimed 
and reasonably expected to be claimed. Additionally, an experienced 
examiner will conduct a separate search on the same application, to 
ensure the contractor used the proper search procedures.
    The Office would retain the ability to terminate any contract and 
``de-certify'' authorities that submit a number of poor searches from 
either the test sample or from other sources such as examiner reports, 
requests for re-examination or post-grant opposition that show clear 
errors.
    It is possible that separate contractor support would be needed to 
set up, implement, and maintain the necessary certification procedures, 
along with a dedicated staff of search and examination experts.
    Contractors may be required to supply certified translations or 
English language equivalents, with valid dates, for any non-English 
language prior art references cited, which would also eliminate the 
need for examiners requesting certified translations, partial 
translations and/or on-the-spot translations of non-English documents.
    Proof of Concept: The USPTO recognizes that the use of contractors 
to provide prior art search and/or opinion reports for patent 
applications is a major change to current patent examination processes. 
The USPTO also understands customer concerns for excellence in a prior 
art search. To ensure quality art searches are maintained and that 
there is uninterrupted service to all USPTO customers, the Office would 
use the results of the PCT pilot as its foundation for competitively 
sourcing all other search activities within the Office. By using the 
pilot study, the USPTO will be able to assess accurately the 
feasibility of competitively sourcing prior art searches. Performance 
and product will be reviewed to ensure the highest quality is 
maintained, using both an in-process review procedure and separate 
searches performed by experienced examiners.
    The PCT competitive sourcing pilot will be implemented in multiple 
arts to ensure the contractors can provide a quality search report for 
any technology. Between three and six different art areas, all with 
generally high backlogs, would be selected as pilot areas. The results 
of the PCT pilot will provide the Office with the information necessary 
to implement the best possible transition from examiner searches to 
contractor searches. Prior to full-scale implementation, a final report 
would be developed that identifies the strengths, weaknesses, costs and 
benefits. This report would be published and made available for general 
review prior to a decision on whether to further implement competitive-
sourcing in other areas of the Office.
    There would be multiple evaluations of the search and reports 
prepared by the contractors. Examiners would complete an evaluation 
every time a contracted search is used in the examination of a U.S. 
application. There would also be independent evaluations both during 
in-process reviews, and by independent third parties (similar to a 
quality review of the examination). Failure of a contractor to maintain 
the high quality expectations could result in the ``forfeit'' of the 
contract to the contractor.
    Regarding the costs of the commercial search, the USPTO's 
stakeholders' view is that quality has not been properly emphasized in 
recent years. Accordingly, the USPTO has listened to patent applicants 
and the consistent message they have conveyed is that quality must be 
improved and the cost of improving quality is something for which they 
are prepared to pay.

                 STOPPING PILOT OF COMPETITIVE-SOURCING

    Question. Is there any certainty that the outsourcing will stop if 
the pilot program proves that the experiment is not working?
    Answer. Yes. First, the planned proof of concept will be vetted in 
advance with the USPTO's key stakeholders and the Patent Public 
Advisory Committee.
    Second, the USPTO has committed to developing a final report 
documenting the strengths, weaknesses, costs and benefits. The report 
will be published and made available for general review prior to a 
decision on whether to implement further competitive-sourcing.
    The final decision to implement further competitive-sourcing will 
rest with the Director, based on the recommendation of the Management 
Council, which is chaired by the Deputy Director and comprised of 
senior managers from all USPTO divisions. The Management Council has 
responsibility for monitoring implementation of the 21st Century 
Strategic Plan. Once the proof of concept has been completed and the 
results documented, the Management Council will be responsible for 
making a final recommendation to the Director.

                   SEARCH CONTRACTORS OWNING PATENTS

    Question. Finally, what safeguards are in place to make sure that 
the contractors who are chosen to conduct these patent searches do not, 
themselves, have a financial stake in the patent system?
    Currently, by law, patent examiners may not own patents with narrow 
exceptions such as by inheritance. Will the PTO likewise bar search 
contractors from owning patents?
    Answer. The Federal Acquisition Regulation (``FAR''), 48 C.F.R.  
9.5 et seq., provides guidance and prescribes responsibilities and 
procedures for identifying, evaluating and resolving organizational 
conflicts of interest (``OCOI''). In particular, FAR  9.504 requires 
the contracting officer, before issuing a solicitation, to prepare an 
analysis and a recommendation for avoiding, neutralizing, or mitigating 
organizational conflicts of interest. Pursuant to this guidance, the 
USPTO is presently considering various plans and methods to avoid and 
neutralize actual and potential OCOIs that may occur as a result of 
contracting out patent search services. At a minimum, the USPTO will 
require patent search firms not only to disclose actual or potential 
OCOIs, such as past or present associations with major patent 
application filers, but also to submit suitable OCOI mitigation plans 
as an integral part of the evaluation of proposals to conduct patent 
search services. PTO will also seek to ensure that any personal 
conflicts of interest by employees of the search firms are minimized to 
the maximum extent practicable. The USPTO plans to award multiple 
contracts to fulfill its needs and require that all applicable OCOI 
requirements flow-down to any subcontractors and employees as well.
    The USPTO will include in all solicitations and contracts for 
patent search services clauses that: (1) invite the offerors' attention 
to FAR part 9.5; (2) state the nature of the OCOI or potential OCOI; 
(3) require the prompt disclosure of actual and potential OCOIs; and 
(4) state the proposed remedies available to the government upon 
discovery of an OCOI. As part of the procurement process, the Office 
also plans to solicit comments and suggestions on how the Agency can 
best mitigate actual or potential OCOIs.
    The USPTO also plans to include in its contracts for patent search 
services clauses which reference 35 U.S.C.  122 and prohibit the 
disclosure of information contained in patent applications as well as 
requirements to safeguard patent applicants' proprietary and trade 
secret information.
    Although the USPTO has not yet made a decision to impose a total 
ban on the ownership of patents, if ownership of patents creates an 
impermissible organizational or personal conflict of interest, which 
cannot be neutralized or mitigated, the USPTO may disqualify that firm 
from competing for the search contracts. In addition, the USPTO may 
structure the resulting contracts to allow for termination of the 
contracts for impermissible conflicts of interest.
    As described above, the USPTO fully intends to obtain early 
exchanges of information from all interested parties through a variety 
of means, such as additional Requests for Information or draft 
solicitations, to determine whether a total ban on the ownership of 
patents will be required from search firms. Further, on May 22, 2003, 
the USPTO will be holding an ``Industry Day,'' a vendor conference 
whereby USPTO will be showcasing existing and new agency initiatives. 
During Industry Day, the Office will be soliciting comments regarding 
the initiatives from vendors who conduct or will conduct business with 
the USPTO. The Office will include the issue of OCOI among search firms 
as a topic for discussion at that time.

                          SUBCOMMITTEE RECESS

    Senator Gregg. Thank you, Mr. Secretary.
    [Whereupon, at 10:40 a.m., Thursday, March 20, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              


                         TUESDAY, APRIL 1, 2003

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

                         DEPARTMENT OF JUSTICE

                     Office of the Attorney General

STATEMENT OF HON. JOHN ASHCROFT, ATTORNEY GENERAL OF 
            THE UNITED STATES

                OPENING STATEMENT OF SENATOR JUDD GREGG

    Senator Gregg. Welcome to this hearing. Senator Hollings is 
headed in this direction. It was kind of the Attorney General 
to arrive early, which we appreciate. And we thank him for 
that.
    This is obviously a time of acute sensitivities on a lot of 
issues. And we appreciate the Attorney General taking time out 
of his day to testify before the Appropriations Committee which 
has jurisdiction over the Justice Department. We also have 
jurisdiction over the Commerce Department, State Department, 
Judiciary, and a variety of independent agencies. But the 
Justice Department is the largest account in this 
subcommittee's jurisdiction and one of the most complicated.
    There is a lot going on that deals with the question of our 
national security and how we protect Americans and America. The 
Attorney General is at the center of that.
    So rather than my going on for an extended period of time 
about those concerns, we would like to hear from the Attorney 
General. And then we will proceed with questions.
    Mr. Attorney General.

                  ATTORNEY GENERAL'S OPENING STATEMENT

    Attorney General Ashcroft. Thank you very much. Good 
morning, Chairman Gregg and members of the subcommittee.
    We are at war. And I know that as we watch the events 
unfolding overseas, that our thoughts and prayers are with the 
young men and women who are defending our freedom. We pray also 
for the families who have lost loved ones or whose loved ones 
have been captured or are missing in action or wounded. Their 
efforts in the defense of freedom, which is a noble, if not the 
most noble of causes, will never be forgotten. We will honor 
their sacrifice with an ever-vigilant commitment to our war on 
terrorism.
    Indeed, the first and overriding priority of this budget 
and of the Department is to protect America from acts of 
terrorism and bring terrorists to justice. I am pleased to be 
here to present the President's fiscal year 2004 budget request 
for the Department of Justice. I thank you for your continued 
assistance in providing the Department of Justice with the 
resources to detect, disrupt, and dismantle terrorist activity.

                         IRAQI TASK FORCE PLAN

    The Justice Department's terrorism prevention efforts have 
included planning for the possibility of intensified conflict 
with Iraq. Last spring, the FBI began developing an action plan 
to address any related threats that might face us in the event 
of this intensification of the conflict. An Iraqi Task Force 
Plan was developed, in addition to the integrated prevention 
security framework put in place after September 11, 2001. The 
Iraqi Task Force Plan includes: around-the-clock operations at 
FBI headquarters and field offices, since the escalation of 
hostilities with Iraq and outreach to Middle Eastern and 
Islamic communities in the United States. The plan includes an 
analysis of prior cases involving Iraq and/or supporters of 
Iraq to identify potential intelligence targets or persons of 
interest. The plan includes stepped-up monitoring of 
individuals suspected of links to the Iraqi hostile forces or 
other terrorist organizations. The plan also includes voluntary 
interviews of 11,000 U.S.-based Iraqis to obtain 
counterterrorism information and intelligence information, as 
well as to identify any backlash threats to Iraqis in the 
United States. When I say backlash threats, I mean that we do 
not want Iraqi individuals in the United States to be the 
subject of discrimination, intimidation, harassment, or 
injustice. Those individuals of Iraqi origin are entitled to 
the same kind of security, freedom, and liberty as are other 
citizens in the United States. The voluntary interviews include 
inquiries about whether or not their well-being has been 
threatened.
    We appreciate the valuable information we have gained from 
the voluntary interviews and the cooperation of the Iraqi 
community in the United States. This cooperation has assisted 
us in our efforts in Iraq, as well as in our own domestic 
antiterrorism efforts. We have gathered intelligence about such 
things as Iraqi bunkers, tunnel systems, telecommunications 
networks, manufacturing plants, and Iraqi military officials. 
This information is being shared and analyzed by our law 
enforcement, military and intelligence officials.

                    2003 SUPPLEMENTAL BUDGET REQUEST

    On March 25, 2003, the President submitted a supplemental 
budget request for fiscal year 2003 to address the continuing 
threat to the national security of the United States posed by 
Iraq. For the Department of Justice, the request includes $500 
million for the Counterterrorism Fund to meet terrorism-related 
prevention and response requirements. Among our top priorities 
for the use of this funding is critical funding for the FBI 
that addresses response capabilities, security enhancements, 
language translation services, operational field expenses, and 
surveillance support.
    We also anticipate using a small portion of this funding to 
meet increased U.S. Marshal Service security requirements for 
the Federal judiciary and to upgrade the capability of the 
Office of Intelligence Policy and Review for its role in the 
Foreign Intelligence Surveillance Act warrant process.

                          2004 BUDGET REQUEST

    The President's overall Justice Department budget request I 
am discussing today will strengthen our capacity to fulfill all 
of the Department's top priorities. The President's budget 
requests $23.3 billion for the Department of Justice, including 
$19 billion in discretionary funding and $4.3 billion for the 
Department's mandatory and fee funded accounts.

                          TERRORISM PREVENTION

    The September 11 attacks made it clear that America's 
defense requires a new culture, a culture of prevention, 
nurtured by cooperation, built on coordination, and rooted in 
our constitutional liberties. The Justice Department is 
battling terrorism by integrating our law enforcement effort, 
not separating it, and by integrating, not separating, our 
intelligence capabilities.
    Our integrated terrorism prevention strategy is having an 
impact on terrorist threats. Listen to this recorded 
conversation between charged terrorist cell member Jeffrey 
Battle and an FBI informant on May 8, 2002, in Portland, 
Oregon. In this conversation, which was unsealed by the Court, 
Battle explained why his threatening enterprise was not as 
organized as he thought it should be. I will quote Mr. Battle 
now.

    ``Because we don't have support. Everybody's scared to give 
up any money to help us. You know what I'm saying? Because that 
law that Bush wrote about, you know, supporting terrorism, 
whatever, the whole thing. Everybody's scared. He made a law 
that says, for instance, I left out of the country and I 
fought. Right? But I wasn't able to afford a ticket. But you 
bought my plane ticket. You gave me the money to do it. By me 
going and me fighting and doing what they can by this new law, 
they can come and take you and put you in jail.''

    Mr. Chairman, terrorists clearly recognize the 
effectiveness of the laws passed by Congress and utilized by 
the Department to disrupt terrorist activity by interdicting 
the funding of terrorism. It is a credit to our new 
investigative tools, the hard work of the law enforcement 
community, and our intelligence agencies, as well as a vigilant 
public, that we have not suffered another major terrorist 
attack in this country.
    The FBI indicates that since September 11, 2001, over 100 
terrorist plots have been disrupted and some, no doubt, 
disrupted, delayed, or abandoned because funding was not 
available as the intercepted conversation between two 
individuals involved in terrorism clearly indicates.
    Nevertheless, as the President recently stated, ``There is 
no such thing as perfect security against a hidden network of 
cold-blooded killers. Yet abroad and at home we are not going 
to wait until the worst dangers are upon us.'' Therefore, we 
will continue to seek the assistance of Congress as we enhance 
a culture of prevention and ensure the resources of our 
Government are dedicated to defending Americans.

                     INTEGRATED PREVENTION STRATEGY

    Now, I would like to give you a brief overview of the 
results to date of our integrated prevention strategy to fight 
the war on terrorism.
    First, we are gathering and cultivating detailed 
intelligence on terrorism in the United States. Hundreds of 
suspected terrorists have been identified and tracked 
throughout the United States. Our human sources of information 
intelligence have doubled. Our counterterrorism investigations 
have doubled in the last year. In 2002, over 18,000 subpoenas 
and search warrants have been issued. Over 1,000 applications 
were made to the Foreign Intelligence Surveillance Act (FISA) 
court targeting terrorist spies, foreign powers that threaten 
our security, including 170 emergency FISA applications. These 
are emergency requests for surveillance activity based on our 
belief and information that there are threatening circumstances 
requiring us to implement coverage immediately. Those calls 
come to me at virtually any time of the day or night; and it is 
my responsibility to approve those, when appropriate.
    Second, we are arresting and detaining potential 
terrorists. Four alleged terrorist cells were broken up in 
Buffalo, Portland, Detroit, and Seattle. Two hundred twenty-
eight criminal charges have been brought to date. One hundred 
thirteen individuals have been convicted or pled guilty, 
including shoe bomber Richard Reid, American Taliban John 
Walker Lindh, three of the six members of the Buffalo cell, two 
more of whom pled guilty just last week, joining another 
defendant who was already cooperating, and there are 478 
deportations linked to the September 11 investigation.
    Third, we are dismantling the terrorist financial network. 
Thirty-six terrorist organizations have been designated as 
terrorist organizations, $125 million in assets have been 
frozen, and over 660 accounts frozen around the world; 70 
investigations into terrorist financing, with 23 convictions or 
guilty pleas to date related to terrorist financing.
    Fourth, we are disrupting potential terrorist travel. Nine 
major alien smuggling networks have been disrupted. Hundreds of 
terrorist criminals have been stopped through the National 
Security Entry-Exit Registration System, called NSEERS. Among 
those individuals stopped, 11 suspected terrorists with at 
least one known member of Al-Qaeda; 649 stopped at the border 
who were wanted criminals, who had committed past felonies or 
violated other laws; and 77 felons identified through domestic 
enrollment, who were in the country illegally. They were not 
stopped at the border but asked to come in and register as part 
of the NSEERS program. These included a murderer, a cocaine 
trafficker, child molesters, and individuals convicted of 
assault with a deadly weapon.
    Fifth, we are building our long-term counterterrorism 
capacity. A near threefold increase in the counterterrorism 
funds devoted by the Department, over 1,000 new and redirected 
FBI agents dedicated to counterterrorism and 
counterintelligence, 250 new assistant U.S. attorneys, 66 joint 
terrorism task forces, a 337 percent increase in the joint 
terrorism task force staffing, and fly-away expert teams for 
rapid deployment to hot spots around the world.
    We have made progress, but there is always additional work 
to be done. And to that end, the budget request includes an 
increase of $598.2 million for programs that support our 
mission to prevent and combat terrorism, including $516 million 
to enhance or complement the FBI's counterterrorism program.
    Even as the men and women of the Justice Department fight 
the war on terrorism, we do so within a framework that upholds 
our other crucial responsibilities. Let me briefly review these 
other core missions.

                       CORPORATE FRAUD TASK FORCE

    First, the Department of Justice has taken decisive action 
to combat corporate corruption and punish corporate 
lawbreakers. The relentless work of the Corporate Fraud Task 
Force, chaired by Deputy Attorney General Larry Thompson, has 
resulted in over 200 investigations opened into suspected 
corporate fraud, over 200 people charged to date, and 70 
convictions have been obtained. To date $20 million in assets 
have been frozen, $14 million in forfeitures, and we are 
seeking to forfeit more than $2.5 billion to restore to the 
creditors and investors the resources, which were lost as a 
result of the corporate fraud.
    The Department is committed to ensuring a marketplace of 
integrity and restoring the confidence of American investors 
and protecting their assets. And to that end, the fiscal year 
2004 budget requests $24.5 million to support the Corporate 
Fraud Task Force.

                            DRUG ENFORCEMENT

    Second, the Department of Justice has continued to fight 
the scourge of illegal drugs. Thanks to the tireless efforts of 
the Drug Enforcement Administration and the Organized Crime 
Drug Enforcement Task Force, we have increased the seizures of 
drug assets from major drug trafficking organizations by 20 
percent. We have dismantled 305 drug trafficking organizations 
in 2002 alone. We have more than doubled the amount of heroin 
seizures from 2000 to 2002. We have reached a 9-year low in 
student drug use.
    We have attacked the nexus, the connection between drug 
trafficking and terrorism, including bringing charges in San 
Diego against individuals for conspiring to trade heroin and 
hashish for anti-aircraft missiles, which they allegedly 
intended to sell to Al-Qaeda forces in Afghanistan. The fiscal 
year 2004 budget request includes $117.9 million to augment our 
efforts to reduce the availability of illegal drugs, to 
identify and dismantle drug trafficking organizations, and 
support drug treatment.

                        CRIMES AGAINST CHILDREN

    Third, the Department of Justice has prevented and 
prosecuted crimes against children. It allocated $2.5 million 
to develop an effective nationwide Amber Alert Network. We have 
reassigned three FBI investigative analysts to work full-time 
at the National Center for Missing and Exploited Children. We 
are supporting Internet Crimes Against Children Task Forces 
across the Nation with technology and capacity. We are 
dedicating a total of $15.2 million to the FBI's Innocent 
Images National Initiative, a $3.6 million increase, to keep 
pace with the nearly 2,000 percent increase in investigations 
since 1996, investigations to combat the proliferation of child 
pornography and child sexual exploitation via the Internet.

                       PROJECT SAFE NEIGHBORHOODS

    Fourth, the Department of Justice has provided increasing 
protection to Americans from gun crime. In the first 2 years of 
this administration's Project Safe Neighborhoods Initiative to 
combat gun crime, we have increased Federal gun crime 
prosecutions by 36 percent, which has helped lock up repeat 
offenders and lower crime in cities across America.
    For example, in Philadelphia, robberies at gunpoint dropped 
11 percent, and the homicide rate is the lowest it has been 
since 1985. In Kansas City, the murder rate dropped 23 percent 
to its lowest level in three decades. This reduction translates 
to 27 more people alive today who might not have been alive if 
the previous trend had continued.
    U.S. attorneys have charged 10,634 defendants for violating 
gun statutes, and they have convicted and taken 7,747 gun 
criminals off the street with those prosecutions. In 2002, the 
conviction rate for those charged with Federal gun crimes--
which may include other non-gun related charges as well--was 
near 90 percent. More than half of those charged were sentenced 
to more than 5 years in Federal prison. Our success in these 
areas would not be possible without the diligence and hard work 
of State and local law enforcement agencies who are partners in 
the Project Safe Neighborhoods endeavor.

                            FIRST RESPONDERS

    To that end, the administration is requesting $8.5 billion 
for first responders and state and local law enforcement in the 
budget and in the supplemental appropriation; $2 billion in the 
current war supplemental that is pending; and $6.5 billion in 
the fiscal year 2004 budget request for both the Justice 
Department and the Department of Homeland Security providing 
funding for State and local law enforcement and first 
responders.

                              CIVIL RIGHTS

    Fifth, the Department of Justice has protected vigorously 
the civil rights of all Americans. The Department has 
strengthened our Civil Rights Division with an approximately 10 
percent increase in both full-time attorneys at 355 and total 
employees at 709, enforcing the Nation's civil rights laws 
since the beginning of this administration; a 12 percent 
increase in successful prosecutions of criminal civil rights 
violations from the previous 2 years; a 100 percent increase in 
settling pattern or practice police misconduct cases during the 
first 2 years of the Bush administration than during the final 
2 years of the previous administration; a $500 million amount 
obtained for traditional black colleges through settlement of a 
25-year-old desegregation lawsuit.
    The Department has prosecuted more than 80 discriminatory 
backlash hate crimes in the wake of September 11, for example, 
by securing the conviction of Zachary Rolnik for violating the 
civil rights of Dr. James J. Zogby, the president of the Arab 
American Institute, by securing the guilty plea of Earl Leslie 
Krugel for conspiracy to manufacture and detonate bombs at a 
mosque and at a field office of United States Congressman 
Darrell Issa of California.
    The Department has prosecuted 43 non-September 11-related 
hate crimes cases in the last 2 years and initiated over 600 
non-September 11 hate crimes investigations.
    The Department has coordinated the Voting Rights Initiative 
to ensure access, honesty, and integrity at the polls on 
election day that resulted in a smooth election with far fewer 
complaints than were reported in recent years.
    The Department has investigated, prosecuted, and convicted 
record numbers of human trafficking and sex trafficking cases, 
doubling the number of trafficking prosecutions and the number 
of convictions over the previous 2 years.
    Now, obviously, our Department has other vital missions I 
have not been able to address here fully, but I would be happy 
to address them during the questions. For example, the 
Department's Antitrust Division successfully settled the 
Microsoft case, receiving praise from Judge Colar Catelli for, 
and I quote her now, ``The clear, consistent, and coherent 
manner'' in which the Division reached this historic 
settlement.
    On the criminal enforcement front last year, individuals 
convicted for antitrust violations and related criminal 
offenses received a record average sentence of greater than 18 
months.

                           prepared statement

    Mr. Chairman, ranking member, and other members of the 
subcommittee, as we work to achieve our Department's 
objectives, I want you to know that none of these are possible 
without the funding and the support and the framework of law, 
which is provided through the Department into the Nation by the 
Congress. And I want to express my appreciation to you for your 
conscientious devotion to your duties of protecting America and 
providing the resources through which the administration can 
join you in that effort to protect this Nation.
    I would be pleased to respond to questions.
    [The statement follows:]

                  Prepared Statement of John Ashcroft

    Mr. Chairman and Members of the Subcommittee: It is an honor to 
appear once again before this Subcommittee to present the President's 
budget request for the Department of Justice. For fiscal year 2004, the 
Budget seeks $23,334,844,000 for the Department of Justice, including 
$19,001,955,000 in discretionary funding and $4,332,889,000 for the 
Department's mandatory and fee-funded accounts. In total, the fiscal 
year 2004 request is $259,513,000 over the comparable fiscal year 2003 
Budget Request. The fiscal year 2004 Budget reflects the transfer of 
the Immigration and Naturalization Service, the Office of Domestic 
Programs, and a portion of the FBI's National Infrastructure Protection 
Center (NIPC) and other Departmental resources to the new Department of 
Homeland Security. It also reflects the transfer of the Bureau of 
Alcohol, Tobacco, Firearms and Explosives (ATF) from the Department of 
the Treasury to the Department of Justice.
    On March 25, 2003, the President submitted a supplemental budget 
request for fiscal year 2003 to address the continuing threat to the 
national security of the United States posed by Iraq. For the 
Department of Justice, the request includes $500,000,000 for the 
Counterterrorism Fund to meet immediate or emerging terrorism-related 
prevention and response requirements. Among our top priorities for the 
use of this funding are critical items for the FBI that address 
response capabilities, security enhancements, language translation 
services, operational field expenses, and surveillance support. We 
would also anticipate using a small portion of this funding to upgrade 
the capability of the Office of Intelligence Policy and Review for its 
role in the FISA warrant process, and to meet increased U.S. Marshals 
Service security requirements for the Federal Judiciary. The use of the 
Counterterrorism Fund provides the Department with the flexibility to 
allocate resources among components and priorities to meet 
unanticipated requirements. The Department, of course, will apprise the 
Committee through existing notification procedures of proposed 
allocations.
    The ongoing support of this Subcommittee for the Department's 
critical mission--the prevention and disruption of terrorist attacks--
is recognized and deeply appreciated. You have worked with us to stand 
up the Foreign Terrorist Tracking Task Force; reorganize the Federal 
Bureau of Investigation and the Criminal Division; improve security at 
our Nation's borders; improve inspections at our air and seaports; 
enhance our information technology infrastructure; increase information 
sharing among federal agencies and with our state and local partners; 
and undertake the largest criminal investigation in U.S. history. 
America is now more secure, more prepared, and better equipped to 
defeat the continued threat of terrorism.

   PREVENTING AND COMBATING TERRORISM, INCLUDING COUNTERINTELLIGENCE

    The fiscal year 2004 Budget places a high priority on securing 
additional resources needed to fight the nation's war on terrorism, 
while at the same time being sensitive to the overall economic picture 
that confronts our Nation. Our budget increases overall 
counterterrorism resources, while also reprioritizing some current 
resources to supplement requests for new program enhancements.
    In the days following the September 11th attacks, we initiated a 
comprehensive review and wartime reorganization in order to identify 
and redirect appropriate resources to our primary mission: 
counterterrorism. With the submission of the fiscal year 2004 Budget, 
the resources devoted to counterterrorism and homeland security have 
increased by approximately $1.9 billion over the Department's fiscal 
year 2001 Budget, representing an increase of 10 percent in the share 
of the Department's resources devoted to counterterrorism prior to 
September 11. Our budget request includes increases of $598,258,000 for 
programs supporting our mission requirements for preventing and 
combating terrorism.
    For the Federal Bureau of Investigation, the Budget requests 
$516,258,000 in enhancements above the fiscal year 2003 request that 
support or complement the FBI's Counterterrorism Program. Of the total, 
$189,107,000 is focused exclusively on the FBI's counterterrorism 
investigative capabilities. These increases will permit the FBI to 
continue its efforts to identify, track and prevent terrorist cells 
from operating within the United States and overseas and, where 
necessary, to investigate terrorist acts.
    To prevent terrorist attacks, the FBI must recognize and understand 
worldwide economic, political, social, and technological changes that 
have occurred over the last decade, and it must leverage existing 
intelligence in support of ongoing cases and operations. Following 
September 11th, with the support of this Subcommittee, Director Mueller 
restructured the FBI's Counterterrorism Division to implement a 
nationally-managed and centrally-driven Counterterrorism program (CT). 
The program seeks to improve intelligence coordination and analysis, 
enhance technical capabilities, and build a national response 
capability that is more mobile, agile, and flexible and provides a more 
proactive orientation toward meeting the terrorism threat. The fiscal 
year 2004 Budget requests 430 support positions and $27,381,000 to 
improve the FBI's capacity to manage this program, including:
  --62 positions and $3,641,000 to build a national level of expertise 
        and knowledge that can be accessed by and deployed to all field 
        offices;
  --115 positions and $7,081,000 to facilitate the collection, 
        analysis, exploitation, and dissemination of intelligence 
        gathered through the lawful interception of e-mail traffic of 
        known and suspected terrorists;
  --61 positions and $3,605,000 to provide a centralized and 
        coordinated financial investigative component to identify, 
        disrupt, and dismantle terrorist financing operations;
  --72 positions and $4,430,000 to significantly enhance the capacity 
        of the Terrorist Reports and Requirements Section to establish 
        policies and to develop and disseminate Intelligence 
        Information Reports;
  --19 positions and $1,056,000 to improve the capability of the FBI's 
        National Threat Center to evaluate terrorist threats for 
        credibility and disseminate intelligence reports to the 
        appropriate intelligence and law enforcement communities;
  --15 positions and $844,000 to support a robust analytical capacity 
        that will enable the FBI to better predict national security 
        vulnerabilities or targets;
  --86 positions and $5,224,000 to provide additional support to FBI 
        Headquarters to expand the centralized management capacity of 
        its counterterrorism mission; and
  --$1,500,000 to fund operational travel and to coordinate FBI 
        investigative efforts.
    For Counterterrorism field analytical support, the Budget requests 
214 positions and $14,603,000 to develop a comprehensive intelligence 
program that can identify emerging threats and patterns, find 
relationships among individuals and groups, and provide useful 
information to investigators in a timely manner.
    To support the FBI's prevention mission in the field, the fiscal 
year 2004 Budget includes an additional 248 positions (149 agents) and 
$28,046,000. These additional resources will expand the Bureau's 
ability to identify terrorist operatives and their targets, penetrate 
terrorist organizations, and neutralize or disrupt the threats posed by 
terrorist activities.
    New funding of $4,600,000 is requested for a communications 
application tool capable of conducting sophisticated link analysis on 
high volumes of telephone call and other relational data.
    On October 29, 2001, President Bush directed the establishment of 
the Foreign Terrorist Tracking Task Force (FTTTF), a multi-agency 
endeavor, whose mission is to prevent admission to the United States of 
foreign terrorists and their supporters and to identify and locate 
known and suspected terrorists who have gained entry to this country. 
This Subcommittee has supported the Administration's efforts to stand 
up the Task Force and to ensure a sufficient level of funding for its 
critical mission. We recognize the difficulty you faced with your 
allocation constraints and we deeply appreciate your support of the 
FTTTF in the fiscal year 2003 Omnibus Appropriations Act. The fiscal 
year 2004 Budget includes a total of $72,607,000 for on-going support 
of the FTTTF.
    The Joint Terrorism Task Forces (JTTTF) are the cornerstone of a 
coordinated Federal, State, and local law enforcement effort for 
conducting international and domestic terrorism investigations. The 
JTTFs promote an atmosphere of immediate transparency between the FBI 
and its other law enforcement partners that encourages and ensures the 
sharing of intelligence information among participating agencies. The 
fiscal year 2004 Budget requests an increase of $11,548,000 in non-
personnel funding to support the JTTF Program, of which $5,000,000 will 
support an Information Sharing Initiative.
    The FBI's Computer Intrusion Program targets cyber matters 
affecting our national security and our economic security. The FBI 
provides deterrence to disruptive intrusions by foreign powers, 
terrorists, and criminal elements through the successful 
identification, investigation, and prosecution of illegal computer 
intrusion activity. The proposed increase of 113 positions (53 agents) 
and $41,113,000 includes 66 positions (45 agents) and $11,128,000 to 
combat computer intrusions and 47 positions (8 agents) and $29,985,000 
for the Special Technologies Application Section to enhance technical 
analysis capabilities in support of cyber investigations.
    In response to the September 11th attacks, the FBI modified its 
public information system infrastructure to establish a means for the 
general public to report suspected terrorist activity via the Internet. 
Located in the FBI's Strategic Information and Operations Center 
(SIOC), the Internet Team has received 375,000 tips, resulting in 
40,000 investigative leads. The fiscal year 2004 budget proposes an 
additional 19 positions and $1,209,000 to provide 24/7 coverage for tip 
review and analysis.

Complementary Terrorism Support Programs
    The fiscal year 2004 Budget also requests an increase of 
$409,151,000 for the Department's counterintelligence, national 
security and criminal enterprise programs, all of which provide 
complementary counterterrorism support. Of this total, $327,151,000 is 
for programs and initiatives of the FBI and $82,000,000 supports 
initiatives in other DOJ components. With your support in December 
2002, the FBI reprogrammed $28,736,000 to counter the growing national 
security threats around the country and strengthen the central 
management of its counter-intelligence program. This was the first step 
in an ongoing effort to implement the FBI's counter-intelligence 
strategy. The fiscal year 2004 budget requests an additional 583 
positions (94 agents) and $69,880,000 for the FBI's counter-
intelligence mission.
    FBI Director Mueller has identified the need for upgraded 
technology as one of the top 10 priorities of the FBI, recognizing that 
over the years, the FBI failed to develop a sufficient capacity to 
collect, store, search, retrieve, analyze and share information. As 
this Committee is aware, the FBI has embarked on a comprehensive 
overhaul and revitalization of its information technology 
infrastructure. We appreciate your support of those efforts. The fiscal 
year 2004 Budget provides enhanced funding for the FBI's information 
technology programs of 3 positions and $82,247,000. Included in the 
request is an additional $61,689,000 for operation and maintenance 
costs associated with Trilogy hardware, $18,558,000 for recurring 
hardware and software upgrades over the next several years to avoid a 
gradual return to a technological state of obsolescence, and $2,000,000 
for costs associated with operations and maintenance of the FBI's Top 
Secret/Sensitive Compartmentalized Information Local Area Network (TS/
SCI LAN).
    To enhance the FBI's response to crisis situations worldwide, 
including secure, remote communications networks, specialty vehicles 
and equipment, and helicopter support for hostage rescue, the fiscal 
year 2004 Budget requests an additional 35 positions (7 agents) and 
$24,187,000. The request includes 27 positions (6 agents) and 
$14,984,000 to enhance Crisis Response Unit capabilities; $850,000 for 
automation equipment in support of rapid deployment team operations; 6 
positions (1 agent) and $2,226,000 for the Hostage Rescue Team (HRT) to 
provide aviation support during a terrorist or criminal act directed 
against the United States, its citizens, or interests; and 2 positions 
and $6,127,000 to provide Weapons of Mass Destruction (WMD) equipment 
and supplies, staff, and training, for HRT and the SWAT teams to ensure 
an appropriate state of preparedness to respond to counter-terrorism 
threats and other assigned tasks.
    The investigation of the attacks on the World Trade Center and the 
Pentagon underscores the global nature of terrorism and the ability of 
terrorists to plan, finance, and conduct operations in a variety of 
countries around the world. Terrorist organizations such as Osama Bin 
Laden's Al Qaeda have a presence throughout the Middle East, Europe, 
and Asia. The FBI's Legal Attache (Legat) Offices continue to be 
critical to our ongoing efforts to deny Al-Qaeda the ability to mount 
future attacks by building and maintaining effective international 
partnerships. For fiscal year 2004, the President's Budget includes an 
additional 82 positions (19 agents) and $61,755,000 to expand and 
support the Legal Attache (Legat) Program and the Visa Identification 
Terrorist Automated Lookout (VITAL) System. Legats and VITAL will 
provide a coordinated defense against terrorists seeking entry to the 
United States or threatening our interests and citizens abroad. The 
requested enhancements to the Legat Program of 30 positions (17 
agents), and $47,527,000 will add personnel and upgrade the 
communications capacity of the FBI's overseas offices, bringing the 
technology infrastructure of Legats in line with the Trilogy Project. 
Five new Legat Offices are requested in Sarajevo, Bosnia; Kuwait City, 
Kuwait; Tashkent, Uzbekistan; Kabul, Afghanistan; and Belgrade, Serbia. 
The requested funding will also expand five existing offices in Ottawa, 
Seoul, London, Berlin, and Moscow.
    The FBI's VITAL project will improve the Nation's security by 
providing the United States embassies and consulates with the ability 
to identify individuals who are threats to our national security before 
they can gain entry into the United States via air and seaports. When 
fully implemented, consular and immigrant officials will be able to 
electronically process fingerprint-based criminal history checks of 
visa applicants against the records in the Integrated Automated 
Fingerprint Identification System (IAFIS) and authenticate identities 
of travelers through biometrics prior to the issuance of visas. The 
budget request of 52 positions (2 agents) and $14,228,000 lays the 
groundwork for this important program by providing the necessary 
personnel and funding to develop and manage the VITAL project and to 
modify the IAFIS to provide the additional storage capacity needed to 
retain and store embassy and consulate fingerprint submissions.
    With the proliferation of information technology and the increased 
availability of computers, criminal and terrorist activity has shifted 
from a physical dimension in which evidence and investigations are 
described in tangible terms, to a cyber dimension. The role of the 
FBI's Computer Analysis Response Team (CART) is to provide assistance 
to FBI field offices in the search and seizure of computer evidence and 
in the conduct of forensic examinations where computers and storage 
media are required as evidence. It is anticipated that more than 60 
percent of the FBI's caseload will require at least one computer 
forensic examination. To meet this growing demand, the fiscal year 2004 
Budget includes an additional 45 positions (1 agent) and $18,040,000. 
Resources will be used to maintain existing and establish new Regional 
Computer Forensic Laboratories and to provide funding for rapid 
deployment teams. This Subcommittee has led the support for the FBI's 
CART program in the past and we look forward to continuing to work with 
you on this important initiative in the future.
    Since his appointment as FBI Director, Bob Mueller has made 
significant changes in the organizational structure at the FBI in an 
effort to make the agency more flexible, agile, and mobile in its 
capacity to respond to the many challenges it faces. The Director 
recognizes that the FBI must better shape its workforce and develop 
core competencies if it is to effectively respond to the array of 
national security and criminal threats facing our nation. Additional 
training resources are a necessary component of reshaping the FBI. The 
fiscal year 2004 Budget requests an additional 111 positions (76 
agents) and $17,559,000 to improve training in the fields of 
intelligence analysis ($2,450,000), counterterrorism ($14,027,000), and 
cyber crime ($1,082,000).
    The National Security Law Unit provides legal advice on all matters 
relating to the national security responsibilities of the FBI, 
including foreign counterintelligence, international terrorism, 
domestic security/terrorism, and computer intrusion/infrastructure 
protection matters. With the FBI's shift in focus to preventing future 
terrorist attacks, the workload of the National Security Law Unit has 
increased substantially. In fiscal year 2004, an additional 14 
positions and $1,405,000 is requested to meet the expanded workload of 
this office.
    Mr. Chairman and Members of the Subcommittee, you have been 
instrumental in the elevation of the role of security within the FBI 
through the establishment of a new Security Division that for the first 
time in FBI history is responsible for ALL FBI security matters. As the 
premier domestic agency conducting criminal, counterintelligence, and 
counterterrorism investigations, the FBI is an attractive target for 
individuals and organizations that seek to impede investigations, or 
obtain sensitive national security information. The fiscal year 2004 
budget requests 120 positions (32 agents) and $37,146,000 for continued 
security improvements. The request includes:
  --$5,050,000 to conduct additional contract background investigations 
        of on-board personnel and others with access to FBI information 
        and facilities;
  --5 positions and $968,000 for an enhanced adjudication program aimed 
        at ensuring that security clearances are granted as necessary 
        and appropriate;
  --24 positions and $6,888,000 for additional technical and physical 
        security improvements;
  --54 positions and $15,821,000 for Police Force and Guard Services to 
        meet increased security requirements at FBI Headquarters, the 
        Washington Field Office, the FBI Academy, the Criminal Justice 
        Information Services Facility in Clarksburg, WV; and the New 
        York Field Office;
  --37 positions (32 agents) and $6,419,000 to expand the polygraph 
        program, which is aimed at assuring that national security 
        information is not compromised by an FBI employee, contractor 
        or other individual; and
  --$2,000,000 for the Defensive Programs Unit to develop technical 
        surveillance countermeasures.
    The final fiscal year 2004 budget enhancement for the FBI relates 
to its critical need for additional staff support for field 
investigations. An increase of 300 positions and $14,932,000 is 
requested for essential personnel to focus on the administrative tasks 
associated with investigations, thereby allowing field agents, field 
investigators, and technical support personnel to focus exclusively on 
terrorist and criminal threats.
    The war against terrorism cannot be won without the support and 
assistance of our State and local partners. Our successes will depend 
on our ability to share information and intelligence in a timely manner 
with state and local law enforcement agencies. At its inception the 
OJP-funded Regional Information Sharing System (RISS) supported State 
and local law enforcement efforts to combat drug trafficking and 
organized criminal activity. However, the regional information-sharing 
concept has expanded and now more law enforcement agencies routinely 
reach out to share intelligence across jurisdictional boundaries. 
Section 701 of the USA Patriot Act authorizes RISS to operate secure 
information sharing systems to enhance the investigative and 
prosecutorial abilities of participating law enforcement agencies in 
addressing terrorism.
    A significant achievement in the last year has been the successful 
effort undertaken to link the various databases used by State and local 
law enforcement. We have connected the RISS with the FBI's Law 
Enforcement Online (LEO) system developing a backbone for further 
information sharing improvements. The fiscal year 2004 Budget seeks an 
additional $12,000,000 to further expand RISS' accessibility to state 
and local public safety agencies for the purpose of sharing terrorism 
alerts and related information.
    The Office of Justice Programs also provides significant assistance 
to State and local law enforcement and public safety entities through 
the training and technical assistance provided by its program experts. 
OJP's training and technical assistance programs provide direct 
assistance to state and local jurisdictions in developing and 
implementing comprehensive, system-wide strategies and in demonstrating 
and documenting programs that work. The fiscal year 2004 Budget 
requests an enhancement of $3,000,000 to provide training to state and 
local law enforcement, prosecution, and intelligence agency personnel 
at the command level in the areas of domestic anti-terrorism and 
extremist criminal activity. This funding will be combined with 
existing funding of $1,238,000 for the hate crimes training and 
technical assistance program to form one Bureau of Justice Assistance-
administered training program totaling $4,238,000.
    The President's fiscal year 2004 Budget for the Department of 
Justice includes $851,987,000 for the Bureau of Alcohol, Tobacco, 
Firearms, and Explosives, which became a component of the Department of 
Justice on January 24, 2003, pursuant to the Homeland Security Act of 
2002, Public Law 107-296.
    The Homeland Security Act authorized the Safe Explosives Act, 
establishing a new program of explosives licenses and permits, 
expanding the number of individuals required to have licenses and 
permits, requiring fingerprinting and background checks for all 
applicants, and mandating the establishment of a National Explosives 
Licensing Center. The provisions of this new Act will aid in the fight 
against terrorism. The fiscal year 2004 Budget requests 88 positions 
and $10,000,000 for ATF to carry out this new initiative. This budget 
request will build upon the efforts being undertaken by the ATF to 
implement these new responsibilities during fiscal year 2003.
    As we succeed in the arrest, prosecution, and conviction of 
terrorists, we must also provide for the safe incarceration of those 
individuals. An increase of 2 positions and $23,000,000 is requested 
for the Bureau of Prisons' Salaries and Expenses Account to provide 
physical security upgrades at an existing facility that will house 
terrorist inmates. The upgrades include enhancements to the perimeter 
security of the facility and construction of maximum isolation cells to 
ensure minimal exposure to other inmates.
    The ability of law enforcement and public safety agencies to 
communicate effectively is essential to our ability to respond to 
future terrorism incidents. The Department's Narrowband Communications 
Program is responsible for developing the Integrated Wireless Network, 
a joint initiative with the Department of the Treasury, and several 
agencies of the Department of Homeland Security. The fiscal year 2004 
Budget requests an increase of $32,000,000 to continue the narrowband 
investment in radio infrastructure and radio investments principally 
along the Northern and Southern land borders and in key operational 
areas such as New York City.
    The Office of Intelligence Policy and Review (OIPR) in the 
Department of Justice plays a critical role in terrorism prevention by 
providing operational support to the FBI in its investigation of 
terrorism, primarily through the application for warrants under the 
Foreign Intelligence Surveillance Act of 1978 (FISA). OIPR prepares and 
files all applications for electronic surveillance and physical search 
under FISA, assists government agencies by providing legal advice on 
matters of national security law and policy, and represents the 
Department of Justice in a variety of inter-agency forums related to 
counterintelligence. The fiscal year 2004 Budget requests an increase 
of 12 positions and $2,000,000 to increase the operational support 
provided to the FBI through the application of FISA warrants and for 
information technology improvements.

                       COMBATING CORPORATE FRAUD

    Since the exposure of the corporate fraud scandals, the Department 
of Justice has taken decisive action to combat corporate fraud and 
punish corporate wrongdoers. To restore confidence in the integrity of 
our markets, President Bush created the Corporate Fraud Task Force, 
chaired by Deputy Attorney General Larry Thompson, to bring the maximum 
combined force of the Federal Government to investigate and prosecute 
corporate fraud. In addition to the Deputy Attorney General, the 
Department's Corporate Fraud Task Force members include the Director of 
the FBI, the Assistant Attorneys General of the Criminal and Tax 
Divisions of the Department, and several United States Attorneys from 
around the Nation. We appreciate this Committee's support for the 
Department's corporate fraud efforts and the $23,000,000 in additional 
funding provided in fiscal year 2003 for the FBI and the U.S. 
Attorneys.
    The Department of Justice is working closely in coordination with 
the Securities and Exchange Commission and other agencies through the 
Corporate Fraud Task Force to ensure a marketplace of integrity. The 
goal of our law enforcement efforts is clear: Information cannot be 
corrupted; trust must not be abused; confidence must be maintained in 
the markets; and the jobs, savings, investments, and pension plans of 
hard working Americans must be protected.
    For fiscal year 2004, our budget requests enhancements of 212 
positions (56 agents and 22 attorneys) and $24,538,000 to continue 
these efforts. For the FBI, we are requesting 118 positions (56 agents) 
and $16,000,000 for staff and resources to target corporate fraud 
cases. These resources will fund the immediate development or 
improvement of existing liaison with other agencies, increased 
corporate fraud training for agents and financial analysts and fund the 
establishment of corporate fraud ``Reserve Teams'' of financial experts 
dispatched to major fraud investigations. The budget also seeks 
$8,538,000 for additional prosecutors, financial analysts and other 
staff for the U.S. Attorneys, Criminal Division, and Tax Division to 
enhance prosecutorial capacity in this arena.

                     DRUG ENFORCEMENT AND TREATMENT

    Combating illegal drug trafficking and the continued wave of 
violent crime associated with it remains among the Department's highest 
priorities. The drug threat we face is not a new one, nor is the 
priority we place on ending the toll that illegal drugs take on the 
lives of Americans. The growing combination of drug trafficking and 
terrorism serves to call us even more urgently to action. In March 
2002, I announced a strategy to reduce the availability of illegal 
drugs. The centerpiece of this strategy is the reorganization, 
revitalization and restoration of the Organized Crime Drug Enforcement 
Task Force (OCDETF) program. It is a strategy that recognizes illegal 
drugs as both a destructive force in the lives of individuals and a 
destructive force to the security of this nation.
    OCDETF's cadre of experienced and talented federal agents and 
prosecutors, with support from state and local law enforcement, 
exemplifies the government's collaborative capabilities to disrupt and 
dismantle drug trafficking organizations and their related enterprises. 
For 2004, the Administration has proposed to once again consolidate all 
OCDETF funding for participating agencies from the Departments of the 
Treasury, Homeland Security, and Justice within the Department of 
Justice's Interagency Crime Drug Enforcement appropriation. The 
reconsolidation of this funding will support the OCDETF program's 
refocused mission and removes bureaucratic barriers to improved 
accountability and resource management throughout the program. 
Moreover, the reconsolidation supports the Department's strategy for 
OCDETF to lead the charge in disrupting and dismantling the most 
significant drug trafficking and money laundering organizations.
    To establish the automated capacity to analyze and disseminate 
OCDETF investigative information, our budget proposes an enhancement of 
$22,000,000. By leveraging existing Foreign Terrorist Tracking Task 
Force (FTTTF) technology, OCDETF would analyze the drug investigative 
information stored in existing database systems and, more importantly, 
provide crucial capacity needed to rapidly ingest, conduct cross-case 
analysis, and disseminate drug investigative information. Ultimately, 
this system would expand the capability of OCDETF to use both existing 
and new drug investigative information to make nationwide connections 
among the sophisticated, compartmentalized components of major drug 
trafficking and money laundering organizations.
    In addition, our budget proposes an additional 192 positions and 
$26,000,000 to enable OCDETF participants to mount comprehensive 
attacks, in multiple national and international locations, on the 
highest-level drug traffickers and drug organizations identified on the 
Department's Consolidated Priority Organization Target (CPOT) List. By 
concentrating our efforts on the top 53 command and control targets, 
our resources will have the most profound impact on the overall drug 
supply. Drug organizations are driven by the desire for profit; as 
these organizations develop into larger enterprises, they employ 
illegal financial techniques to transfer or transport drug proceeds, to 
obtain and conceal assets, and to reinvest profits to promote ongoing 
illegal activity. To combat these efforts, our budget proposes an 
enhancement of 83 positions and $10,000,000 to expand the capability of 
OCDETF agencies to conduct meaningful investigations of the financial 
infrastructure supporting major drug organizations.
    As the world's leading drug enforcement agency and the only single-
mission federal agency dedicated to drug law enforcement, the Drug 
Enforcement Administration (DEA) continues to target aggressively the 
Nation's illegal drug threats in the post-September 11, 2001 
environment. Our budget proposes an enhancement of 329 positions 
(including 123 agents and 20 Diversion Investigators) and $38,880,000 
for the Priority Targeting Initiative. Through this initiative, DEA 
will target Priority Drug Trafficking Organizations involved in the 
manufacture and distribution of illegal drugs as well as those involved 
in the diversion of precursor chemicals used for manufacturing illegal 
drugs. International partnerships are critical to our Nation's efforts 
to combat the threat of illegal drugs. To continue the DEA's drug law 
enforcement training to our counterparts overseas, our budget proposes 
an enhancement of 20 positions (16 agents) and $1,500,000. Our fiscal 
year 2004 budget also proposes an increase of 20 positions and 
$2,500,000 to improve DEA's financial and asset management programs and 
$7,847,000 in prior-year unobligated balances to design and construct a 
state-of-the-art laboratory in the Southeast region (Miami, Florida). 
This request will provide DEA's highly skilled and specialized chemists 
with a modern, state-of-the-art facility.
    The Department's fiscal year 2004 budget requests additional 
funding for drug treatment programs in the Office of Justice Programs 
and the Bureau of Prisons. To expand the Drug Courts Program, our 
budget proposes an enhancement of $16,614,000 for fiscal year 2004. The 
Drug Courts Program provides alternatives to incarceration to encourage 
abstinence and alter behavior with a combination of escalating 
sanctions, mandatory drug testing, treatment and strong aftercare. For 
the Bureau of Prisons, our budget proposes an enhancement of 12 
positions and $467,000 to support drug treatment for approximately 
16,500 inmates. This will bring the BOP to its treatment threshold as 
required by the Violent Crime Control and Law Enforcement Act of 1994.

                   PREVENTING CRIMES AGAINST CHILDREN

    A critical focus of the fiscal year 2004 Budget and a primary 
objective of Goal II of the Department's Strategic Plan is to Combat 
Crimes Against Children and Other Vulnerable Victims of Violence and 
Exploitation. Children today face dangers wholly new to any generation. 
The rapid expansion of the Internet into our homes, libraries and 
public institutions has brought boundless opportunity within reach, but 
the same vehicle that serves young people also aids those who would 
harm them. The fiscal year 2004 Budget includes enhancements totaling 
$19,094,000 to support efforts to reduce child abductions and firearms 
violence.
    The impact of firearms violence is particularly severe on our 
children and young adults. Of the approximately 1,400 juveniles 
murdered in 2001, 44 percent were killed with a firearm; and over 2,800 
students were expelled in 1999-2000 for bringing firearms to school. 
The Youth Crime Gun Interdiction Initiative of the Bureau of Alcohol, 
Tobacco, Firearms, and Explosives (ATF) is a model partnership between 
ATF and local law enforcement designed to reduce firearms violence by 
investigating illegal trafficking to youth. The fiscal year 2004 Budget 
proposes to expand this initiative, begun in 17 cities in 1996, to an 
additional 10 cities. The enhancement of 118 positions (62 agents) and 
$13,000,000 will bring the total number of participating cities to 70.
    Nothing hits home more than a missing child and nothing galvanizes 
law enforcement and the communities they serve more than finding that 
missing child and returning that child home safely. AMBER--America's 
Missing: Broadcast Emergency Response--was created in 1996 as a legacy 
to 9-year-old Amber Hagerman, who was kidnapped while riding her 
bicycle in Arlington, Texas and then brutally murdered. After this 
heinous crime, Dallas-Fort Worth broadcasters teamed with local police 
to develop an early warning system to help find abducted children. I am 
pleased that the fiscal year 2004 Budget includes $2,500,000 to develop 
an effective, coordinated AMBER Alert program nationwide. The 
Department's AMBER Coordinator, Assistant Attorney General Deborah 
Daniels, will use these funds to train law enforcement and others in 
operating an effective AMBER Alert system and to give radio stations 
the software to upgrade their emergency alert systems so they can 
broadcast an AMBER Alert. A sound AMBER plan is vital to the swift 
recovery of a child in imminent danger of physical harm.
    The Innocent Images National Initiative, a component of the FBI's 
Cyber Crime Program, combats the proliferation of child pornography and 
child sexual exploitation facilitated by on-line computers. The 
Innocent Images National Initiative focuses on individuals who indicate 
a willingness to travel interstate for the purposes of engaging in 
sexual activity with a minor and on major producers and/or distributors 
of child pornography. In the last six years, the FBI has seen a 20-fold 
increase in the number of Innocent Images cases opened. The fiscal year 
2004 Budget requests an additional 32 positions (19 agents) and 
$3,594,000 to increase investigations and keep pace with the rising 
trend of child pornography and sexual exploitation via the Internet.

                         ENHANCING DNA PROGRAMS

    The fiscal year 2004 Budget includes increases of $106,220,000 in 
expanded funding for DNA analysis. Forensic DNA analysis has rapidly 
developed into a vital tool used to support an increasing number of 
investigative efforts. Increased demand and limited processing 
capability has created a significant backlog in cases requiring 
forensic DNA analysis. The FBI's Nuclear DNA Program has examined 
evidence from terrorist activities such as the U.S.S. Cole bombings, 
assaults on the World Trade Center and the Pentagon, the anthrax-laced 
mailings and numerous hoax anthrax letters. On the State level, DNA 
analysis has proved invaluable by instantly identifying repeat 
offenders, as well as narrowing the field of potential suspects. The 
fiscal year 2004 Budget will provide continued support to this 
indispensable investigative tool for both State and Federal programs.
    The FBI's Combined DNA Index System (CODIS) and National DNA 
Database utilize forensic sciences and computer technology as an 
effective tool for solving violent crimes. CODIS and the National 
Database enable Federal, State, and local crime laboratories to 
exchange and compare DNA profiles electronically, thereby linking 
crimes to each other and to convicted offenders. The FBI's DNA effort 
began as a pilot project in 1990 serving 14 State and local 
laboratories. Today, the FBI's National DNA Index System includes 42 
States, two Federal laboratories and the Commonwealth of Puerto Rico. 
It has produced more than 6,000 hits, assisting in more than 6,400 
criminal investigations. Ultimately, the number of crimes it helps to 
solve measures its success.
    In fiscal year 2004, the Budget is proposing an increase of 32 
positions and $3,283,000 to expand the FBI's capacity to collect, 
analyze, and store DNA forensic evidence. The FBI plans to double the 
processing rate of nuclear DNA cases by 2005, by increasing the number 
of Forensic DNA Examiners and Biologist Technicians by two-thirds and 
developing Rapid DNA Analysis Systems to replace manual processing. The 
Budget requests 28 positions and $2,692,000 for this purpose. In 
addition, 4 positions and $591,000 is requested to staff, supply and 
equip the Federal Convicted Offender Program to collect DNA samples and 
produce DNA profiles for CODIS. These resources will enable the FBI to 
keep pace with the expanded terrorism-related offenses authorized by 
the USA Patriot Act.
    The fiscal year 2004 Budget also proposes a consolidated DNA effort 
in the Office of Justice Programs (OJP) to assist state and local 
laboratories to reduce backlogs of DNA samples and improve their 
capabilities through increased information and research to make DNA 
tests faster and cheaper. The Budget request proposes funding this 
consolidated effort at a level of $177,000,000, an increase of 
$102,937,000 above the fiscal year 2003 Budget request level.
    Many of our Nation's crime labs lack the capacity to analyze all of 
the DNA evidence collected by police. While all 50 States collect DNA 
from their convicted felons, many lack the resources to enter these 
samples into the national DNA database. As a result, there are some 
500,000 samples awaiting analysis in laboratories across the country. 
Reducing this backlog by entering these samples in State and national 
DNA databases will assist law enforcement in linking offenders already 
in custody to unsolved crimes. As of March 2002, the FBI's DNA database 
had identified 610 offenders and produced 193 ``forensic hits'' in 
which cases not known to be related were found to have been committed 
by the same offender. The proposed enhancements for fiscal year 2004 
will be used to--
  --Reduce the DNA backlog through formula-based grants to expedite the 
        entry of DNA samples from convicted felons and unsolved crimes 
        into the national database;
  --Improve the capacity of DNA crime labs through grants to state and 
        local crime labs for the acquisition of DNA analysis equipment 
        that will process samples more quickly and accurately; and
  --Support continuing research on forensic DNA technology and provide 
        assistance for pilot projects.

   PROTECTING THE JUDICIAL SYSTEM AND MANAGING FEDERAL DETENTION AND 
                         INCARCERATION CAPACITY

    The Department's fiscal year 2004 budget request seeks significant 
resources to improve courtroom security, to detain the accused in 
Federal custody and to protect the American public by providing for the 
safe, secure and humane incarceration of sentenced offenders. Security 
associated with terrorist-related court proceedings requires an 
unprecedented level of protection for all trial participants because of 
the global interest and intense media attention. These high-security, 
high profile proceedings require extensive operational planning and 
support from specially trained and equipped law enforcement personnel. 
The United States Marshal Service (USMS) is responsible for safely 
transporting accused individuals to and from judicial proceedings and 
ensuring the safety of the judicial participants, the public, and USMS 
personnel. To meet better the security needs of these proceedings; our 
budget seeks 275 positions (231 Deputy United States Marshals) and 
$26,599,000. The budget request for USMS also seeks $2,000,000 from the 
Department's Working Capital Fund for courthouse security equipment. 
This additional funding is sought to fund security systems, relocation, 
and telephone and data lines for four new courthouse facilities opening 
during fiscal year 2004.
    During 2002, the Nation's prison population rose 4.4 percent, by 
over 6,800 inmates. The Department's fiscal year 2004 budget request 
seeks additional resources for the Bureau of Prisons to manage this 
growth, including activation costs for seven new facilities. Our budget 
seeks a total of 2,727 positions and $251,978,000 to activate 7 new 
facilities including United States Penitentiary (USP)--Hazelton, West 
Virginia, USP--Canaan, Pennsylvania, and USP--Terre Haute, Indiana, 
Federal Correctional Institution (FCI)--Victorville, California, FCI--
Forrest City, Arkansas, FCI--Herlong/Sierra, California, and FCI--
Williamsburg, South Carolina. These facilities will add 8,000 
critically needed beds to reduce overcrowding.
    To provide adequate space to detain individuals in the custody of 
USMS, our budget seeks an increase of $34,705,000. These resources will 
fund additional bed space in state, local and private facilities for 
Federal detainees.

    MANAGING THE DEPARTMENT'S FINANCIAL AND INFORMATION RESOURCES, 
                INCLUDING ENHANCING INFORMATION SECURITY

    The Congress has entrusted a significant level of resources to the 
Department of Justice to enable it to carry out its important mission. 
Our budget seeks additional funding to ensure that resources entrusted 
have sufficient oversight. To strengthen the Department's management 
and oversight of information technology security, including the 
continued implementation of a Department-wide security architecture and 
security standards, and the development and initial implementation of a 
Public Key Infrastructure, the Department seeks an enhancement of 13 
positions and $9,000,000. For fiscal year 2004, the Department also 
seeks an enhancement of $15,000,000 for the Department's Unified 
Financial Management System that will improve financial management and 
oversight with standardized core functions across the Department.
    To continue the deployment of the Department's Justice Consolidated 
Office Network (JCON), our fiscal year 2004 budget seeks an enhancement 
of $17,000,000 and $33,000,000 from the Department's Working Capital 
Fund. These resources will continue to enable the United States 
Marshals Service to increase the JCON-architecture deployment to 92 
percent.

                       OTHER IMPORTANT ACTIVITIES

    Our budget seeks $40,730,000, including $35,030,000 in appropriated 
resources and $5,655,000 from the Department's Working Capital Fund, to 
enhance several items of critical importance to the Department's 
continued efforts. For the United States Attorneys, we are seeking 145 
positions and $15,862,000. Of this amount, $10,207,000 in appropriated 
resources would enable the United States Attorneys throughout the 
Nation to address critical areas including civil defensive litigation 
needs arising from greater demands associated with the implementation 
of anti-terrorism programs after September 11, 2001, expanding civil 
defensive case loads, and increased complexity of employment 
discrimination and tort cases; and to provide for much needed 
litigation support and enhanced timeliness of financial reporting. In 
addition, $5,700,000 from the Department's Working Capital Fund would 
enhance the United States Attorneys' information technology 
infrastructure.
    Our budget also seeks additional resources for the Environment and 
Natural Resources and Civil Divisions of the Department. Requested 
enhancements totaling 32 positions and $4,188,000 would enable the 
Environment and Natural Resources Division to address its Tribal Trust 
Fund docket and to further implement a critically needed initiative to 
seek out and prosecute violators of hazardous material transportation 
and handling laws. Additional resources of 30 positions and $4,500,000 
for the Civil Division would enable the Division to continue to address 
high-profile immigration cases which implicate the integrity of the 
September 11, 2001 investigation and the Federal Government's response 
and to fund additional costs generated by the 2000 amendments to the 
Radiation Exposure Compensation Act (RECA), which triggered a nearly 
five-fold increase in the number of RECA claims filed. An additional 28 
positions and $2,000,000 are also sought for the Executive Office for 
Immigration Review (EOIR). These additional resources would enable EOIR 
to keep pace with workload increases as a direct result of increased 
interior and border enforcement.
    For fiscal year 2004, we are seeking $5,500,000 for the Office of 
Justice Programs to fund additional Public Safety Officers Educational 
Assistance payments and to begin converting the National Crime 
Victimization Survey conversion from primarily a paper-and-pencil 
operation to a fully automated data collection process.
    The United States National Central Bureau continues to facilitate 
international law enforcement cooperation as the United States 
representative with the International Criminal Police Organization 
(INTERPOL). Our fiscal year 2004 budget seeks an additional $932,000 to 
fund increased dues payments on behalf of the United States to 
INTERPOL. Additional funds are needed to replenish depleted reserve 
accounts, while at the same time expanding operations and personnel to 
focus on combating international terrorism.
    We are proposing additional resources to provide enhanced building 
security. In fiscal year 2004, our budget request seeks $6,517,000 for 
improved perimeter security and guard services. This request builds 
upon the fiscal year 2002 reprogramming proposal submitted by the 
Department. In addition, for the United States Trustee Program, we seek 
an additional $1,104,000 to enhance the information technology 
infrastructure of the Program.

                               CONCLUSION

    Chairman Gregg, Senator Hollings, and Members of the Subcommittee, 
I have outlined for you today the principal focus of the fiscal year 
2004 budget request for the Department of Justice. The Department 
continues to evaluate its programs and operations with the goal of 
achieving both component-specific and departmental economies of scale; 
increased efficiencies; and cost savings. Aided by ongoing reviews of 
business practices, we are beginning a comprehensive, multi-year 
process to implement a wide range of streamlining and efficiency 
measures that will result in substantial savings. Many of these 
proposals have been incorporated into our fiscal year 2004 budget 
proposal.
    I look forward to working with you on this budget proposal and 
other issues.
    Thank you. I would be pleased to answer any questions you might 
have.

    Senator Gregg. Thank you, Mr. Attorney General, for that 
extensive opening statement. It does remind me a bit of a 
fellow I used to represent when I was practicing law named 
Oscar Payne. He was about 78 years old, and he worked on a farm 
up in Acworth, New Hampshire. He went to church once, and it 
appeared he was the only one at church. And the minister spoke, 
and did three readings from the Bible. He sang four hymns and 
did a sermon, a full sermon. It was a very good sermon. They 
even had the offering. They passed the plate.
    And at the end of the service, the minister went to the 
front door and said to Oscar, as he walked out, shook his hand, 
``Oscar, what did you think?'' And Oscar said, ``Well, when I 
go down in my field, if I only find one stalk of corn, I don't 
dump the whole load of manure on it.''
    We certainly appreciate that extensive statement.
    And as is the tradition of this committee, we always defer 
to the chairman when he comes.
    Senator Stevens. I left my truck behind today, Mr. 
Chairman.
    Nice to see you, John. And you are doing a wonderful job. 
We thank you very much for what you are doing. I have to go get 
ready for the supplemental today and just dropped by briefly. 
Thank you very much.
    Attorney General Ashcroft. It is an honor to serve with 
you, sir.
    Senator Gregg. I also want to say you are doing an 
exceptional job. And we----
    Attorney General Ashcroft. You could have at least----
    Senator Gregg. As an old friend, I enjoy you.
    Senator Hollings.

                            CORPORATE FRAUD

    Senator Hollings. Thank you, Mr. Chairman.
    General, I was listening to that litany of the various 
prosecutions, indictments, convictions, and what have you, and 
particularly with respect to corporate fraud. At the time that 
you put the Deputy Attorney General Larry Thompson in charge of 
corporate fraud, at that particular time the question arose 
that his firm represented Enron, Kenny-boy, Ken Lay.
    Now 1\1/2\ years later, with all of those convictions that 
you talk about, prosecutions and indictments and everything 
else like that, we have not heard anything about Kenneth Lay. 
Specifically, we see now in the news what we heard the first 
couple of months before our Commerce Committee from California, 
that it was a total fraud the way Enron was taking more than 
their shortage of so-called allocation. And then with the more 
or overage of that particular shortage, they were sending a 
note, shipping it back in with the increased price, defrauding 
the State of California. Now that has been verified in several 
news stories here in the last 2 weeks.
    At that time, there was a witness from the California 
Public Service Commission or Authority or whatever. And I asked 
him, I said, ``Wait a minute here now. That morning, Mrs. Lay 
appeared on my television before I came to work, said that her 
husband did not know anything about it. And the witness 
testified he knew everything about it. He knew all the 
details.''
    With that in the public sector, what happens? You have 
everybody but Kenneth Lay. And that is where it all started. 
Can you tell the committee?
    Attorney General Ashcroft. Senator, the corporate fraud 
investigations are ongoing. As it relates to the Enron 
Corporation, I am not informed about that. I am not a part of 
it, because I was recused from those investigations as a result 
of a determination that was reached that recusal would be 
appropriate for me in regard to Enron. I do not want to be non-
responsive, but it would be inappropriate for me to comment on 
something in which I am not involved, which is an ongoing 
investigation, and something from which I am recused.
    Senator Hollings. Well, as the Attorney General, you should 
be curious, just as this Senator is curious. Suppose you get a 
report from Deputy Attorney General Larry Thompson for you and 
for me on the status of the Kenneth Lay case.
    Attorney General Ashcroft. I would be happy to instruct the 
Department to give you a complete report, to the extent it is 
appropriate, on that investigation. It is something about which 
I cannot give you a report.
    [The information follows:]

                            Enron Task Force

    As of June 19, 2003, the Department's Enron investigation 
has resulted in the convictions of Arthur Andersen and 5 
individuals, as well as the indictment of 15 other individuals, 
including both the Chief Financial Officer and Treasurer of 
Enron. The investigation into possible additional criminal 
activity is active and ongoing.

                       NATIONAL SECURITY COUNCIL

    Senator Hollings. Very good. Now let me ask with 
specificity with respect to the National Security Council. Now 
that we have changed over to domestic threats, at the time 
President Truman organized the National Security Council, you 
had the Vice President, the Secretary of State, and the 
Secretary of Defense, and everything else of that kind. We came 
within a vote of really asking that the Attorney General and 
that the FBI and others also be a part of that.
    My concern is that the President gets a complete report 
from his National Security Council. Do you meet with him every 
day and give him a report intelligence-wise, or what is the 
score on that? Because the old rule was that the FBI just 
handled domestic crime; the CIA handled intelligence abroad. 
Now we have got to doing or developing as you are doing, a 
domestic intelligence. And you have to coordinate the two. And 
I have some questions about the coordination. But I am 
wondering if the President gets a complete report on the 
domestic intelligence. What is the setup?
    Attorney General Ashcroft. Well, every morning at just 
about 7 o'clock, I begin my day meeting with FBI officials, as 
we prepare to go and brief the President of the United States. 
On a daily basis, we brief the President of the United States, 
and we do so in the presence of those individuals who brief the 
international intelligence.
    One of the things that is very apparent to us is that there 
is no longer a discontinuity or a break between things that 
might be happening in the United States and things that might 
be happening overseas. It is important that a complete picture 
be given and that the FBI knows what is happening 
internationally, and that the CIA knows what is happening as a 
result of the domestic thing, and that the President hears it 
all and be able to respond to it all.
    The President devotes himself to that with a discipline and 
an intensity which is very, very impressive to me. He does it 
on a daily basis, and I witness it personally.

                  TERRORISM THREAT INTEGRATION CENTER

    Senator Hollings. Good. What about the status of the TTIC, 
the Terrorism Threat Integration Center? Is that developed?
    Attorney General Ashcroft. The Terrorism Threat Integration 
Center, TTIC as some folks are calling it, is being stood up at 
this time. It will go into effect on the first of May in a 
formal sense, as a way of integrating intelligence that comes 
from virtually all the sources that generate intelligence for 
the country. It will provide access to participants in the TTIC 
operation, meaning both the intelligence sources from overseas 
and from at home, and the intelligence that is gathered, say, 
by agencies that are not thought of as being intelligence 
agencies but uncover information. For example, the Immigration 
authorities who encounter information or Customs authorities, 
who hear about potential smuggling and the like.
    The Terrorist Threat Integration Center, which would have 
the means of examining the intelligence information from all 
agencies by virtue of having search engines, could harmonize 
this information so it is all available. It is an attempt to 
have it in a format which would provide easy processing, so 
that information from different agencies, which has previously 
been assembled in different ways, would be comparable.
    The TTIC will first come into existence and be stood up, as 
I said, on the first of May. It is later expected to be housed 
at an independent location, directed by an individual chosen by 
the Director of the CIA in consultation with the Attorney 
General and the Director of the FBI and others. It will also be 
at a location which will house the counterterrorism effort of 
the FBI and the CIA. But they will be separately administered.
    I believe it is important that the output of these 
intelligence-gathering agencies be available broadly to both 
sides. They have separate gathering operations, primarily 
because the CIA has a culture of gathering outside the United 
States, where the rules are far different than the culture of 
gathering information inside the United States where we have to 
have strict adherence to the laws and to the Constitution of 
the United States.
    Once information has been gathered by each of these 
agencies and by the other contributing agencies, it is 
available in this Terrorist Threat Integration Center. The 
intelligence of these various agencies that participate is 
available through a search engine function in the center that 
should make intelligence available to the FBI, which was 
developed originally by CIA, or vice-versa, and the other 
agencies, so that we should have a far more comprehensive 
understanding.
    We should be able to integrate our understanding, rather 
than having the right hand maybe have some substantial assets 
the left hand does not know about. These assets should be 
jointly understood, although they are independently developed. 
The techniques for developing information in the United States, 
as opposed to abroad, follow a different set of protocols, 
guidelines, rules, which follow our Constitution, as opposed to 
a variety of other rules which are available and imposed in 
different settings overseas.

               TERRORIST THREAT INTEGRATION CENTER BUDGET

    Senator Hollings. The budget for TTIC, do you have it? Who 
appropriates for that?
    Attorney General Ashcroft. Well, I believe TTIC is not 
provided for in our Department. I turned to make an inquiry 
because funding associated with the TTIC will be for the entire 
counterterrorism section of the FBI, which is part of our 
budget. The $50 million to stand this project up was provided 
originally in the Defense area. But I am not--I would have to 
get back to you on the specifics.
    [The information follows:]

                  Terrorist Threat Integration Center

    The fiscal year 2003 Department of Defense appropriation 
included $104 million for the Terrorist Threat Integration 
Center (TTIC), of which no less than $50 million is to be used 
for FBI costs associated with TTIC.

              EMERGENCY WARTIME SUPPLEMENTAL APPROPRIATION

    Senator Hollings. Let us get a hold of it, so we can follow 
it.
    Now the distinguished chairman, Senator Stevens, just left 
for the supplemental. I note that you have some $500 million 
for the Department of Justice in that particular supplemental. 
Can you give the committee a breakdown on what that $500 
million will be expended for?
    Attorney General Ashcroft. Included in the $500 million are 
resources that relate to the terrorist threats, and retaliatory 
actions that might be taken against the United States. 
Counterterrorism funds are requested to reimburse departmental 
components for extraordinary costs, security enhancements, 
language translation services, operational field expenses, 
including overtime and surveillance support.
    The Office of Intelligence Policy and Review has been the 
subject of very serious demands recently and needs----
    Senator Hollings. Do you have amounts for each one of those 
items?
    Attorney General Ashcroft. We do not have a specific amount 
for each of those items listed in the request that went to the 
Congress.
    Senator Hollings. Can you furnish that for the committee?
    Attorney General Ashcroft. Pardon?
    Senator Hollings. Could you furnish the committee with the 
itemized amounts?
    Attorney General Ashcroft. We will be happy to discuss 
these needs with the committee. I do not know that I am 
prepared to provide a detailed list. But as monies would be 
spent, we would expect to be conferring with the committee 
about the way in which they are spent. I can read the list of 
the kinds of things, as I was beginning to do, that the funds 
would be used for. It goes on to include the United States 
Marshals Service courthouse security, which had to be elevated 
as a result of a number of our law enforcement efforts in 
terrorism.
    We would be happy to be very collaborative about this 
particular set of resources and understand the desire of the 
Congress to watch carefully the expenditure.
    Senator Hollings. Let me yield to----
    Senator Gregg. Okay. I have some questions.
    On that point, Senator Hollings and I expect, to offer 
language to the markup which would require that we reintroduce 
the transfer language and make it applicable to this account, 
this extra $500 million, which does not sound to be 
inconsistent with what you are suggesting you would be willing 
to do anyway.
    Senator Campbell, do you have some questions?
    Senator Campbell. Thank you, Mr. Chairman. I have listened 
very carefully and read the Attorney General's statement, too. 
And I found it very detailed, a lot of information in there. I 
was even interested in your analogy concerning the volume of 
his testimony.
    I do not want to know your reaction to that, Mr. A.G.
    Attorney General Ashcroft. Well, could I please----
    Senator Campbell. Yes. Why do you not go ahead?
    Attorney General Ashcroft [continuing]. Just personally 
note that this is April Fool's Day. And I was hoping----
    Senator Campbell. Oh, okay. That explains it.
    Attorney General Ashcroft [continuing]. That he would at 
least follow that remark with the words ``April Fool.''

                              CIVIL RIGHTS

    Senator Campbell. Well, in any event, I just want to tell 
you, I think you are in a very, very tough job. You are really 
in unchartered waters. And I want to associate my words with 
the brief remarks that Senator Stevens said before he left. I 
know that you are getting some accusations from different civil 
libertarians about, you know, sort of a punitive agenda or 
infringing on civil rights. And I do not see that at all.
    We are facing a time in the United States that we have 
never faced before. And from my perspective, I think you are 
doing just about as good a job as a person can do, fully 
recognizing that in America anybody gets to accuse anybody of 
anything. And being at sort of the top of that ladder, you are 
going to be the recipient of a lot of accusations.
    But I noted with interest the number of people you have 
increased in the Civil Rights Division, 709 employees now, I 
believe you said. And the number of hate crimes that you have 
prosecuted, and I did not remember the number of the 9/11-
related crimes you have also prosecuted, but I know that is 
going up considerably, too.
    And I think, very frankly, the numbers that you use would 
do all of us well, because we get questions in our town 
meetings and we get questions in our different forums about 
what we are doing when we hear some of these accusations. And I 
just wanted to commend you and say that you are setting an 
example, I think, for all of us to try to find that balance 
between preserving civil liberties and making sure that this is 
a safer Nation.
    I just wanted to put that in the record, Mr. Chairman. 
Thank you.

                            TERRORIST THREAT

    Senator Gregg. Thank you, Senator Campbell.
    In regard to the expanded war, Hosni Mubarak made an 
interesting comment yesterday about the expansion of the 
terrorist threat that the war is creating from his perspective. 
Do you see an expansion of terrorist activity within the United 
States?
    Attorney General Ashcroft. We have expanded our efforts 
dramatically. I think it is fair to say that there was 
intelligence that indicated that an elevated and escalated 
military presence by the United States and escalated activity 
in Iraq might occasion additional activity by terrorists. And 
we have acted to do that.
    I think in my opening statement, it may have been somewhere 
in the middle although it was less distinguishable, we have had 
a very substantial presence in seeking to curtail the 
activities of anyone who might be associated with terrorism, 
including the interviews that would help us learn about 
terrorist activities.
    So, frankly, in the United States to date, we have an 
increased effort by law enforcement and by the Department to 
make sure that we are not placed at higher risk. And to date, I 
must thank the hard work of the FBI and other law enforcement 
agencies, State and locals, who have worked very diligently 
with us to make sure that we have not seen specific terrorist 
acts carried out in the United States.
    Senator Gregg. Is there higher activity, however, that you 
are trying to interdict?
    Attorney General Ashcroft. As I indicated before, the 
intelligence indicated that there were levels of threats that 
were high. We believe that--and very frequently the level of 
threats that you have is related to the level of activity. That 
is what we are seeking to interdict. We hope that we can 
continue to do it successfully.

                  TERRORIST THREAT INTEGRATION CENTER

    Senator Gregg. Now when you were talking with Senator 
Hollings about TTIC, I am wondering how this coordinates with 
all the other activities that we have. We have the Foreign 
Terrorist Tracking Task Force. Homeland Security has a task 
force. You have the National Theater Center--the National 
Threat Center, and the FBI's analytical operations on 
counterterrorism. Are these all going to be moved out to the 
TTIC building?
    Attorney General Ashcroft. No, I do not believe they are. 
The FBI will maintain its own analysis. But it will also 
contribute its information intelligence on terrorism to the 
combined Terrorist Threat Integration Center. I think we 
anticipate that the FBI will continue to make its own 
independent evaluations but do so with the ability to gain the 
information that is available to TTIC and contribute the 
information it has to TTIC.

                          DEPORTED INDIVIDUALS

    Senator Gregg. When you deport 436 people, do you keep 
track of them after you deport them? It is sort of like putting 
the sharks back in the ocean, is it not?
    Attorney General Ashcroft. We maintain a list of those 
individuals who have been deported and seek to make sure that 
they do not come back into the United States. There are times 
when individuals are deported and, depending upon the nature of 
the situation, we alert the countries to which they are 
deported. Frequently individuals in this setting are 
individuals that we believe the receiving country ought to be 
aware of and interested in. And we try and make sure that 
happens.
    We have not deported individuals when we have felt that we 
had a valid basis for pursuing them for violations of the law 
in the United States. Generally, if persons have violated the 
law here in the United States in ways that are provable in the 
Article III Courts--and, you know, we have standards in that 
respect--for those individuals, we seek to prosecute them.
    Senator Gregg. Senator Domenici.
    Senator Domenici. Thanks very much, Mr. Chairman. I have 
three or four questions.
    It is good to see you----
    Senator Gregg. Excuse me, Senator Domenici. Senator 
Domenici, I apologize. Senator Kohl was here before you. I 
apologize.
    Senator Kohl. I would be pleased to yield. Go ahead, 
Senator.
    Senator Domenici. Thank you.
    It is good to see you. We are neighbors, but we still do 
not see each other very much.
    Attorney General Ashcroft. We sure do not.
    Senator Domenici. It looks like you are doing all right, 
though. You look healthy.
    Attorney General Ashcroft. Thank you.
    Senator Domenici. Is everything going all right, as well as 
possible?
    Attorney General Ashcroft. We are grateful for the 
successes we have. And we are going to keep working as hard as 
we can.

                        ALIEN ASSISTANCE PROGRAM

    Senator Domenici. Well, I have a few questions, I think 
three or four. My first one has to do with the Alien Assistance 
Program, SCAAP, and the Border Prosecutors Initiative. The 
President's budget eliminates funding for the State Criminal 
Alien Assistance Program, as it did last year, a $565 million 
reduction from 2002. I am concerned about the impact that 
cutting this program is going to have on struggling counties in 
States like mine, as they shoulder the significant cost burden 
created by illegal immigration, which obviously is a Federal 
responsibility.
    I am also concerned that this cost burden may damage 
localities' abilities to address other homeland security needs 
that they may have. Border counties are growing faster than any 
other region in the Nation. At the same time, they have a lower 
per capita income, and a higher percentage of people below the 
poverty level than any other region, making them the least able 
to foot the cost of services for criminal illegal aliens.
    In this time of heightened security in the border regions, 
I think it is imperative to ensure the effective processing of 
criminal illegal aliens, including incarceration by local law 
enforcement agencies. So in the past years, I have fought to 
increase SCAAP resources to relieve some of these costs for 
local communities for detaining these aliens.
    The State of New Mexico received a small amount, but 
important, $2.3 million in 2002 for funding this program. A 
recent New Mexico border county coalition study detailing the 
costs associated with processing criminal illegal aliens 
estimates that New Mexico's three counties will spend an 
estimated $5 million annually on criminal justice, law 
enforcement, and emergency medical care for illegal aliens. 
This is a small amount in your very large budget, but it is 
very important for these rural impoverished counties.
    So in view of this tremendous burden on border criminal 
justice systems, how does the Department of Justice propose to 
meet the costs of the Federal responsibilities that are 
currently shouldered by States, if not through this program?
    Attorney General Ashcroft. Well, first, Senator, let me be 
the first to recognize that the incarceration of individuals 
who come into the United States and commit crimes falls 
inordinately heavily on those States that are on the border. 
And the States of Texas, New Mexico, Arizona, California, 
Florida, Illinois as well, have relied heavily on this program, 
which is designed to undertake some of the costs of 
incarcerating individuals who commit crimes after coming to the 
United States illegally, and therefore are detained.
    The administration has sought to improve our performance at 
the borders, stop people from coming here illegally, and has 
focused its resources on doing that, so as to diminish the need 
to have people who come here illegally incarcerated because 
they commit crimes. We want to stop them before they get here. 
I think it is debatable as to how successful we are in all of 
that. We have a Border Assistance Initiative that related to 
the Southwest border that we are requesting that relates to 
prosecution. But I understand that if you prosecute, you need a 
place to put individuals, and that does not address the 
detention of those individuals.
    Ideally, we need to do a better job and continue to improve 
our performance at preventing those individuals from coming, so 
that later on we do not have to seek to remediate the problem 
by detaining them in our prison systems at great expense.
    As you mentioned, in the 2003 omnibus appropriation bill, 
Congress provided $250 million for the State Criminal Alien 
Assistance Program (SCAAP). The administration is seeking to 
address those issues by improving our border performance and 
providing the other assistance in the Border Initiative 
Program.
    Senator Domenici. Well, I bring it up because I think in 
the preparation of the budget it is so easy to eliminate and 
forget about these programs because of the bigger ones. But 
actually, when you have a border State, and especially one 
which is a broad area, not very much population in just a few 
communities, this is a tough area. A couple million dollars is 
pretty tough for those systems to try to accommodate. We will 
try to see what we can do in the process to be helpful.

                        STATE JUSTICE INSTITUTE

    There is an institute called the State Justice Institute. 
Are you aware of that within the Department, the State Justice 
Institute? It has $6 million in the past----
    Senator Gregg. I believe that is independent of the Justice 
Department.
    Attorney General Ashcroft. I am not aware of it. I think it 
may be in the court system.
    Senator Domenici. It is not in their budget?
    Senator Gregg. No, it is not. It is an independent agency.

        AMERICA'S LAW ENFORCEMENT AND MENTAL HEALTH PROJECT ACT

    Senator Domenici. I am sorry.
    Let me leave you a question with reference to the kind of 
court system that is evolving called the mental health courts. 
I am very aware of them, and had something to do with starting 
them. They are beginning to mature. I personally believe that 
they can have a great deal of positive impact on alleviating 
overcrowding and creating greater judicial economy within our 
court systems.
    Are you aware of any steps that the DOJ is taking to 
distribute the $3 million to implement America's Law 
Enforcement and Mental Health Project Act?
    Attorney General Ashcroft. We, in this fiscal year, have a 
$4 million appropriation for distribution to assist about 23 
different mental health courts around the country. As you have 
indicated, this is something sort of on the cutting edge, new.
    Senator Domenici. Yes.
    Attorney General Ashcroft. In addition to working with 
them, we are trying to develop a set of guidelines, procedures, 
develop the information that would be valuable to other groups 
that might seek to start such courts. The grant program is 
underway. The awards are in the process of being made. There 
are a couple dozen that appear to be most likely to be the 
beneficiaries of the $4 million of grant money.
    Senator Domenici. Well, I thank you for being empathetic 
toward them. Some people seem to think they are a bother. But 
essentially, when you look around the country and find that so 
many individuals occupying prison space are actually mentally 
ill. They are put there either in county courts or others 
because of their mental illness, and nobody knows what else to 
do, so they throw them in jail for a while. It does not really 
work. Setting these courts up is a very good intermediary 
process to do a better job in that regard.
    Attorney General Ashcroft. Well, Senator, last year you 
asked me at this hearing if I would get a briefing on these so 
that I could become aware----
    Senator Domenici. That is right.
    Attorney General Ashcroft [continuing]. Of the value. And I 
did get that briefing. And I have asked that the Department 
work carefully to make sure that the grant resources are 
properly made available.

                RADIATION EXPOSURE COMPENSATION PROGRAM

    Senator Domenici. My last observations and a few questions, 
which I will submit for the record, have to do with the 
Radiation Exposure Compensation Program. Now that program has 
been a difficult one. We have gone back and forth as to how it 
will be funded. But eventually we made it a mandatory program 
and put $172 million in law. The Department has $172 million to 
pay claims in 2002 and $143 million for claims in 2003.
    I would like you to submit for the record a status report 
on the payment of these claims. How many claims has the 
Department approved, and how much has been spent, and what is 
the average amount of the claims approved? This has become over 
time a program that got bounced back and forth. It became 
somewhat scandalous when people with claims could not get the 
money because they were given IOUs, because we did not have the 
appropriated funds.
    Between the chairman and others, we have attempted to fund 
it properly. It has been a terribly difficult program, not only 
for me as one who helped start it, but for the chairman. I have 
about five questions that will get this on the record so 
everybody will know exactly where we are. I would appreciate it 
if you would answer them as early as the chairman expects the 
responses to the committee.

                       FEDERAL JUDGES--NEW MEXICO

    And my last question has to do with New Mexico judges. The 
latest reports on the need for Federal judges would indicate 
that the area of the judiciary, Federal judiciary, that is most 
in need are those courts along the borders of the United 
States. And my State, while it is a small one, continues to be 
one that needs judges because of the enormous criminal 
caseload. I believe there is an indication in the latest study 
that New Mexico needs three additional judges.
    Are you aware of the last report? And are you going to do 
something to recommend that there be compliance and an effort 
to fill the need, as recommended, with reference to the Federal 
judges?
    Attorney General Ashcroft. Well, Senator, last year in the 
reauthorization of the Department, there were judges created, 
additional judges. The Department supported that. And the 
Department supports the additional judges' specific numbers in 
a particular report. Regional allocations are not something 
that I am focused on at this time. I have been made aware of 
the need, and I think that it is a need that this 
administration understands and is willing to address.
    Senator Domenici. Well, I will ask you for some specific 
answers as to what would help alleviate this, if you would 
answer those, also. We need some indication from you about them 
so we can pursue it with a little more vigor to get the 
positions filled. Thank you.
    Thank you, Mr. Chairman.
    Senator Gregg. Okay. Senator Kohl. I apologize, Senator 
Kohl, for the mixup in the order.
    Senator Kohl. Good morning.
    Attorney General Ashcroft. Good morning.

                            CHEMICAL WEAPONS

    Senator Kohl. Mr. Attorney General, within the past month 
the FBI has warned law enforcement agencies nationwide that 
terrorists could build a simple but very deadly chemical weapon 
out of readily available materials. Specifically, the FBI cited 
hydrogen cyanide, or chlorine gas, as easy to make chemical 
weapons created by combining liquid and solid materials. In the 
case of hydrogen cyanide, which was once used as a war gas, one 
need only to combine cyanide and salt--cyanide salt and acid. 
Pardon me.
    What is so disturbing is how easy it is to obtain cyanide. 
It is readily available at chemical weapon supply houses, from 
mail order catalogs, or even via the Internet. Even more 
disturbing is evidence that terrorists could use cyanide in a 
future terrorist attack.
    Has the Department of Justice reviewed the potential use of 
these poisons as a terror weapon? Do you think that Congress 
needs to consider regulating the sale of toxic substances like 
cyanide through a permit system to ensure that it does not fall 
into the wrong hands?
    Attorney General Ashcroft. Well, first let me say, Senator, 
that this is a matter of real concern. I know that this is a 
matter that the terrorist community is aware of, that among the 
kinds of evil chemistry and other threats that they deal in, 
this is among those kinds of circumstances.
    And I would be very happy to work with individuals in the 
Senate, and in the House for that matter, if they were to 
choose to seek to address this problem, just as we have been 
very pleased to work with you as it related to the Bureau of 
Alcohol, Tobacco, Firearms and Explosives (ATF). The new 
explosives regulatory format, which is being implemented--and I 
must commend your staff for working with the Justice Department 
closely to iron out the difficulties there. The ATF has become 
a part of the Department of Justice. This new regulating 
responsibility for explosives is something they are working 
together on and, I think, productively.
    We would be happy to confer in regard to efforts in the 
Congress that might relate to improving our safety and the 
security of the country when threatened by evil chemistry from 
terrorists or others.

                 TOBACCO SMUGGLING/TERRORIST FINANCING

    Senator Kohl. Thank you. I would like to work with you on 
that. Mr. Attorney General, recent ATF investigations reveal 
that tobacco smugglers are using the profits they make from 
their illegal operations in the United States to fund terrorist 
groups, like Hezbollah, among others. Furthermore, the GAO 
estimates that State governments are losing billions of dollars 
in tax revenue because of cigarette smuggling and Internet 
sales of cigarettes. This is a serious problem that is not 
getting the attention it deserves as a funding source for 
terrorism.
    I am considering introducing legislation to increase the 
penalties associated with tobacco smuggling. Do you agree that 
this is a serious terrorism-related concern? And will you 
pledge to work with me and my staff on this legislation?
    Attorney General Ashcroft. I certainly do agree that it is 
a serious terrorist concern. Last fall, in Charlotte, North 
Carolina, the Joint Terrorism Task Force of the FBI, together 
with the ATF, dismantled the terrorist financial support cell 
which operated there, which was funding terrorism, according to 
the allegations, out of the smuggled cigarettes which are 
bought in a low tax jurisdiction, transported to a high tax 
jurisdiction, and sold. The money which would have otherwise 
been available as tax revenue in the higher tax jurisdiction is 
diverted either into criminal activity or terrorist activity.
    And in the case last fall, 26 individuals were charged with 
various crimes, including racketeering, money laundering, 
immigration fraud, credit card fraud, marriage fraud, visa 
fraud, bribery, and providing materials to support terrorist 
organizations. Now that is not a litany of good things.
    So we are concerned about the problem and would be happy to 
work with you in regard to legislation that might help 
remediate the capacity of criminals generally, and terrorists 
as well, to fund their activities that threaten the security of 
our people through the use of these kinds of resources in 
smuggling.

                     LOCAL LAW ENFORCEMENT FUNDING

    Senator Kohl. Thank you. I would like to ask a question 
about local law enforcement funding. This budget slashes 
funding for State and local law enforcement. For example, the 
following programs are either drastically reduced or just plain 
eliminated. The Burne Memorial Grant Program, the Local Law 
Enforcement Block Grant Program, the Juvenile Accountability 
Incentive Block Grant Program, and State Criminal Alien 
Assistance Program, the COPS Universal Hiring Program, COPS and 
School Program, and the COPS Technology Program. Combined, 
these important programs delivered more than $2.9 billion to 
police departments across the country last year.
    The fiscal year 2004 DOJ proposal rolls most of these 
programs into a $559 million Justice Assistant Grant Program. 
And only the COPS Technology Program has survived, although 
even that program had a reduced funding level. This is a 
startling cutback of law enforcement assistance of more than $2 
billion.
    What does not make sense about this huge reduction is that 
we are asking State and local law enforcement, as you know, to 
devote even more time and resources in the fight against 
terrorism. Many of our law enforcement agencies' budgets are 
dependent on Federal aid, as you well know. And if we abandon 
them, then they will have a very tough time doing what we are 
asking them to do with even less funding. It does not seem to 
make too much sense. What are your comments?
    Attorney General Ashcroft. Well, first of all, if you 
combine the supplemental request and the request for this 
appropriation year, it is clear that the money that goes to 
local law enforcement through the Justice Department and 
through the Department of Homeland Security is far more than it 
has ever been before; so while the justice portion of the 
resources may not be what it once was, the development of new 
resources through the Department of Homeland Security provides 
a much greater resource. For example, the President's 2004 
budget request, plus the supplemental transmitted last week, 
totals $8.5 billion, which is a very, very substantial sum of 
money.
    Now as it relates to the COPS Hiring Program and a number 
of the other programs, some of them are discontinued because 
this administration believes that they have fulfilled their 
purpose. Others, like the resources available under the Justice 
Assistance Program, which is right at $600 million, are not 
earmarked for specific programs to provide for greater 
flexibility on the part of law enforcement to meet the needs 
that they have. This administration believes flexibility is 
more valuable.
    I understand that there is a difference between the 
administration and the Congress, as it relates to earmarks and 
that is probably going to be something that there is continuing 
discussion on. But overall, when you put together the 
supplemental and the budget request, it totals far in excess of 
anything we have ever done to assist State and local first 
responders and law enforcement personnel. And we believe that 
it should help them be the kind of excellent partners they have 
turned out to be.
    If I could just take this moment again to commend our 
colleagues in State and law enforcement. They have risen to the 
challenge of defending America with the kind of team work that 
is very, very gratifying.

                    TERRORISM THREAT WARNING SYSTEM

    Senator Kohl. I appreciate your comment. And I am sure you 
are aware of the many complaints across the country in terms of 
our asking them to do more and their contention that we are, in 
fact, providing fewer dollars while at the same time asking 
them to do more.
    I would like to ask a question about the orange terror 
threat level alert. For the second time in the last 2 months, 
the country is again at the orange terror threat level. Last 
month we talked about these warnings. And I asked whether they 
could be reorganized or regionalized or made more specific. And 
you gave a very thoughtful answer at that time.
    That said, the threat level was raised when the war began 
in Iraq. Was the war the rationale for raising the threat 
level, or had there been particular threats to certain cities 
or industries? My concern is that when we put the entire Nation 
at a heightened sense of alert for extended periods of time, 
then vigilance will fade. And we will become perhaps even numb 
to the orange alert.
    Is there any better way to target this alert system so that 
local law enforcement agencies or particular States and 
localities that really need to be on the lookout are alerted, 
and other places in our country which are much less at risk are 
not put at the same high level of alert?
    Attorney General Ashcroft. Senator, when we last spoke 
about this, a migration was underway, which has been underway 
for some months now, of moving that from the Department of 
Justice, in terms of primary responsibility, to the Department 
of Homeland Security. I am pleased to make a response.
    I think when we talked last, we talked about understanding 
that, I think as everyone can, there are many areas in the 
country that are not as likely as other areas to be the subject 
of major attacks. That is one of the reasons why the alert 
system is an advisory system that does not mandate specific 
activities on the part of people, but suggest things that might 
be done based on the kinds of assets, infrastructure, or 
otherwise that exist there.
    At that time, I did comment as well, and I thank you for 
reflecting on my comments then. We have learned, however, that 
preparations for terrorist attacks tend to take place in a wide 
variety of settings that are not likely to be the ultimate 
attack locations, or at least were not on September 11. We saw 
terrorist preparations all across America, in towns small and 
large, from Portland, Maine, to Oklahoma City, I believe it 
was, to the west coast, across the Southwest, Minneapolis, a 
wide variety of places.
    So one of the things we want to ask Americans to do is not 
just to be alert to the fact that there might be an attack 
there, but be alert to the kinds of circumstances that might be 
preparatory for an attack or individuals who might be involved 
in the developing of the skills or assets necessary to launch 
an attack.
    I have said all this now to say that the Department of 
Homeland Security is now the final arbiter of whether we 
change. I would just add this one final remark, which I believe 
is in direct answer to your question. I know of no instance 
when the risk, when the level was raised that it was not raised 
in response to an understanding of the risk being higher. I 
know of no instance when the level was lowered when it was not 
lowered in response to the fact that we believed that we had 
digested some of the risk, and we could go back to the lower 
level.
    So that threat warning system is a risk-related system. It 
is designed to reduce risk and that is sort of strange. As you 
know, weather reporting is not designed to reduce or change the 
weather. But this system is designed to actually reduce the 
risk because if we get on a higher alert, it is very likely 
that we can, by being more active, reduce the likelihood that 
we will be hit. And that is an anomaly, but it is the truth.
    I hope that when we elevate our sensitivity and we take 
extra steps, we displace and disrupt terrorism. So it is risk-
driven. It is information-driven, not aspiration-driven. We do 
not put the risk where we want it to be. We take a look at the 
information, and we make the determination. I am kind of 
reporting historically now, since this is not my final call 
anymore, but that is the way I believe it is run.
    And when we do it properly, we report a risk, we diminish 
the risk by reporting it and enlisting the American people in 
working to make sure the risk never materializes.

                 ROCKET LAUNCHERS AND AIRLINE SECURITY

    Senator Kohl. All right. Thank you. One last question on 
rocket launchers and airline security: Recent news reports have 
highlighted the danger that shoulder-mounted rocket launchers 
pose to commercial aircraft. In fact, there was an attempted 
rocket attack on an Israeli airliner in Kenya last November. 
Fortunately, it was not successful. News reports suggest that 
Federal authorities are concerned about the issue with regard 
to airports, or particular airports, around our country.
    Given that these weapons are widely available, cheap, and 
easy to make, should not the American flying public be 
justifiably concerned that what happened in Kenya could happen 
here? Are you doing anything to assess this risk? Do you have 
any activities that you have undertaken to help prevent such an 
attack here in this country?
    Attorney General Ashcroft. This is a matter of concern. I 
believe that the airline industry provides secure air traffic 
in the United States. My family and I are in the planes on a 
regular basis. My wife will be flying today.
    So we believe that this is a matter that is appropriate for 
our attention, and it is a matter that we consider and are 
carefully assessing.

          RISK OF INTERNATIONAL TERRORISM IN THE UNITED STATES

    Senator Kohl. One last question, if I might ask: Was 9/11 
the watershed moment in terms of all the terrorism that we are 
trying to prevent in this country? Was the risk as great before 
9/11, but we were not aware of it? I guess many of my 
constituents back home are trying to understand and figure out 
why it is today we are so, so concerned, justifiably, about 
terrorism, doing so much and spending so much to prevent 
terrorism.
    What happened before 9/11, or were we fortunate, you know, 
and perhaps somewhat naive, and we are much more sophisticated 
now? In your mind, this is just a judgment, but----
    Attorney General Ashcroft. Well, frankly, Senator, I think 
9/11 was a watershed event. I think if the water did anything, 
it washed our eyes so that we could see that America was not as 
isolated as we had once thought and hoped. We had relied on 
oceans to defend us and to make us different.
    Terrorism had been significant around the world, but it had 
only really reached America in one previous setting where it 
was an American terrorist who had killed almost 170 people in 
Oklahoma City, a very serious event. But we had not seen 
terrorism as international. We had seen terrorism in other 
settings, in other countries, but the international terrorists 
had never reached into America.
    And while we were concerned about things that were 
happening overseas and happening to our assets overseas, no 
relation, but the U.S.S. Cole bombing was one of those things. 
The bombings of our Embassies were things like that, but they 
were overseas.
    We were introduced to the idea of international terrorism 
actually having very serious impacts here, and I do not want to 
disregard the fact that there was the attempt on the World 
Trade Center in the early 1990s, which was a bombing attempt, 
and that should be understood. But we saw it entirely 
differently after 9/11, and we should. And if I could do it 
over again, I would. If I could relive the 1990s, I would spend 
some of these resources in the 1990s to see if we could have 
prevented what happened in 2001.
    It is clear from what we know, having survived 9/11, and 
what we have learned in the intelligence community, that there 
are still very serious individuals with capacity, who would 
continue to hurt the United States, at a level as great as or 
greater than the injury to the United States on 9/11. We take 
that very seriously and are addressing those threats as 
intensely as we possibly can, respecting the framework of 
freedom which we have the responsibility to defend, and without 
which we would not care about defense. The only thing worth 
securing is liberty, and we are not going to trample on liberty 
in order to develop security.
    Senator Kohl. Thank you. Thank you, Mr. Attorney General, 
Senator Gregg.

                           OPERATION TOP OFF

    Senator Gregg. That was an interesting question, Senator 
Kohl. I would just note that this committee, prior to 9/11, did 
a lot in the area of terrorism and had a lot of trouble getting 
the attention of the community out there on that issue. We held 
two operations, called Operation Top Off, which was a chemical 
attack and a major bomb attack. One was held in Denver, and one 
was held in Portsmouth, New Hampshire. They were held over the 
strongest objection of the community out there that was 
supposed to be doing the exercises. And finally this community 
had to actually force those communities to pursue that.
    In addition, we held a joint hearing with this committee, 
the Defense Committee, the Intelligence Committee, where we 
asked all the agencies to come up and testify before us. The 
Attorney General was kind enough to do that prior to 9/11. And 
what was highlighted there was once again our lack of 
readiness.
    I think our culture has a lot of trouble dealing with 
issues until we have an event. And that is just the nature of 
the American culture, I am afraid. We have had the event, and 
we are certainly aggressively dealing with it. And the Attorney 
General, I think, is doing a superb job, as is the FBI, to try 
to deal with it.
    Senator Hollings.
    Senator Hollings. Senator Gregg is too modest. Actually he, 
long before any kind of hearing or finding by Hart and Rudman, 
this subcommittee, under his leadership, had hearings on 
terrorism. He instituted a training course. Several hundred 
were lost at 9/11 that had been trained. And 80,000 at that 
time, I will never forget it, had already been trained in 
terrorism work that was an initiative by Senator Judd Gregg. So 
we have been working on it.
    On your successes, and I speak only from experience having 
served with the Hoover Commission some 50 years ago, 
investigating the CIA and the FBI, amongst other intelligence 
agencies, I was inculcated by Alan Dulles and J. Edgar Hoover 
on this need to know discipline. And yes, everybody has to be 
proud of the successes. But in your game in antiterrorism and 
otherwise, a lot of them should not be even announced.
    Specifically, I will never forget when we got that hit in 
Yemen, that car full of terrorists, the FBI participated in 
leads for that particular hit. The Yemenites covered for us. 
They said there must have been explosives in the car. They do 
not know what happened. No, no. Big mouth, ``Oh, no. We have a 
drone. We run them down with a drone.''
    We got Mohammed in Pakistan. We followed him for 6 months. 
We could not keep our mouths shut for 6 hours so the FBI could 
follow the leads we got from him.
    And on top of it, we bragged about, ``Oh, we got the 
computer, we got this, we got that.'' Lies, so you got nothing. 
You just got the fellow, but he just did not give you any 
information. But use the leads to enforce law.
    I find too much braggadocio. ``You are either with us or 
against us here. Now is the time. The time has run out. You are 
irrelevant.'' Now, ha-ha, we are running around saying, ``You 
are very relevant, and we need your help.'' I mean, this crowd 
has been bragging too much.

                        STATE AND LOCAL FUNDING

    Other than that, let us get back to Senator Kohl's question 
because, General, you said that none of this was possible 
without the funding. Yes, the Office of Domestic Preparedness 
was transferred to Home Security. And I am on that 
subcommittee. But that did not supplant the $500 million of the 
Burne Formula Grants. That does not supplant the $397.4 million 
that you cut out of local law enforcement block grants. You 
eliminated COPS Hiring Programs, the COPS interoperability, the 
$139.9 million in the COPS Law Enforcement Technology Program. 
Just when crime is on the way up, you cut out the money and 
give us a Mitch Daniel put-off, that ``Oh, well, we have a lot 
more money in the other budget.'' We are here on all the 
budgets.
    And you had the successes. And now you are cutting it out. 
Well, in the DEA, that is under you, you changed the FBI to 567 
FBI agents that were working on drug enforcement that are now 
working on terrorism. So what happens to the DEA? That was like 
the hearing we just had last Thursday. You had both Governor 
Ridge and Secretary Rumsfeld up here, and they are fighting 
over the same people. These first responders, policemen and 
firemen and the National Guard, and all my crowd had cleared 
out. They are out in the Persian Gulf now and in Iraq. And we 
look around, and we find out that we just do not have enough.
    I told Secretary Rumsfeld rather than a money supplemental, 
he needed a manpower supplemental. You have 12 of these 
peacekeeping. You have a war in Iraq. You have a war in 
Afghanistan. And you have a terrorism war here. And you are 
still trying to do it. And everybody is fighting over the same 
manpower. And we cannot afford to cut these particular grants, 
cops hiring programs and different other things of that kind, 
the DEA. A war in Iraq is not going to be shortchanged money. 
You cannot shortchange the terrorism war. We need way more 
cops. We need way more effort and everything else.
    Last week, when they had that other alert that you folks 
put out, the Governor of South Carolina had to take and put 
parole officers around the Port of Charleston. He just ran out 
of personnel. And that is the same with the airports and 
everything else.
    I just want you to get a grasp of this thing, because this 
is a grasp that you can, Senator Kohl, Chairman Gregg, all of 
us have. I mean, the buck stops here. And we are not going to 
shortchange Iraq. You do not have to worry about the money for 
Iraq. We would be falling over each other. Support the troops. 
Support the troops. We are running around with the flag. Of 
course, we are not going to pay for it. We are going to borrow 
for the troops.
    This is some crowd. But then to go even further and cut out 
the working programs when crime is on the increase and 
everything else of that kind, I just want to register that 
observation.

                                TRILOGY

    Let me ask about Trilogy. Where is that? What is the final 
price tag? What is the status of it, you know? So everybody in 
the FBI is talking to everybody. We had the Arizona agent, that 
somehow it fell between the cracks. The Minnesota young lady 
who had to travel all the way, and they then would not listen 
to her, and everything else. So we gave Mueller, Director 
Mueller, millions and millions of dollars. This committee had a 
program transfer November a year ago, a year and a half ago 
now. So what is the program? Do we have it? Is it working? Do 
you need more money? We are going to get it done.
    Attorney General Ashcroft. We are going to get Trilogy 
done. It was a project started several years ago, before 9/11. 
It has been upgraded on the basis of several things, including 
9/11. The first big deadline was to get all the computers 
talking to each other. That was to take place by March 31, 
yesterday. I am happy to report to you that we came in 3 days 
early on that. We met the deadline. By March 28 Trilogy was 
operational.
    The Trilogy Wide Area Network connects computers throughout 
the FBI, except for a couple crucial computers that were 
involved in specific matters that were ongoing and could not be 
disrupted in order to make the switch-over at this time.
    The next big deadline, which is scheduled for completion, 
is the upgrade of software for desktop computers by November 
2003. And by the end of this year, December----
    Senator Hollings. Do you have the money for that, for the 
November time line?
    Attorney General Ashcroft. The money is in the request. The 
original request was short $137.9 million. It was short for two 
reasons: 20 percent of that, about $27 million, close to $30 
million, was underestimated. The other 80 percent, $111 
million, has gone up as a result of the Hanssen case. We 
learned we did not have the security in our computer system we 
needed, if you remember the case.
    Senator Hollings. Oh, yes.
    Attorney General Ashcroft. We cannot forget it, and we 
should not forget it.
    In the McVeigh case, you will remember, that was the first 
execution the Federal Government had undertook in about 25 
years. We found out that we needed, according to the Inspector 
General, additional capacity to track evidence and the like in 
the computer system. Trilogy was upgraded as a result of 9/11.
    All of these things are accommodated in the budget. And we 
expect to have the virtual case file capacity in place by 
December of 2003. The virtual case file addresses the idea that 
you raised in your question about whether people in one part of 
the organization can know about information that is developed 
in another part of the organization. As a case oriented 
organization, when it was a paper system, the paper file of a 
case was where the case was prosecuted. The rest of the 
organization did not necessarily know about the facts and 
circumstances in that setting.
    The electronic file, of course, can be transferred and 
replicated without expense, once you have an electronic system. 
That is known as the Virtual Case File Program of the Trilogy 
effort. That is on schedule to be implemented by December of 
2003 so we will no longer have disparities between what is 
known about a circumstance in one part of the country and 
another part of the country.
    When case information is available on a broader basis, the 
information which comes out of these cases and investigations 
is also intelligence. It has intelligence value. And it 
appropriately can be fed into TTIC, so that the Terrorist 
Threat Integration Center, can be aware of that as well.
    The work in this respect is very important. We just met the 
March 31 deadline. We are on schedule to meet the other 
deadlines. And the resources are in the budget to achieve that, 
according to my best information from the Department, which is 
making major progress in this respect.
    [The information follows:]

  Clarification of Fiscal Year 2004 Trilogy Request and Reprogramming

    The fiscal year 2004 President's Budget includes $82.2 
million and 3 positions for Information Technology (IT) 
Projects, including funds to continue the Trilogy initiative 
and other critical IT projects. Funds include $18.5 million for 
recurring hardware and software upgrades and replacement over 
the next several years to preserve the gains made through the 
Trilogy program and avoid gradual erosion of the FBI's upgraded 
technology. These funds also include $61.7 million for costs 
associated with completing the communications circuit 
installation; hardware and software acquisition and 
maintenance; and contractor support for the Enterprise 
Operations Center. Finally, $2 million of the fiscal year 2004 
President's Budget is to upgrade the Top Secret/Sensitive 
Compartmented Information Local Area Network at FBI 
Headquarters.
    In addition, the Department of Justice transmitted a 
reprogramming request to Congress on May 21, 2003, proposing to 
redirect $137.9 million in existing resources to the Trilogy 
program. This proposal represents an increased level of funding 
to complete Trilogy, from a total project cost of $457.8 
million to $595.7 million. Additional funding is needed to 
ensure Trilogy addresses all identified requirements related to 
the network/infrastructure and applications components, as well 
as program management support and component integration issues. 
The reprogramming reflects the Department's response to 
changing requirements resulting from events such as the World 
Trade Center and Pentagon attacks, as well as the Hanssen and 
McVeigh cases, most notably expanding the scope and adding risk 
mitigation to ensure success of the Trilogy project.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hollings. Great.
    Thank you, Mr. Chairman. I will submit some other 
questions.
    Senator Gregg. Mr. Attorney General, we have a variety of 
questions, especially dealing with technical aspects of the 
budget and dealing with capital costs specifically and 
personnel, that we will submit to you in writing and would 
appreciate your staff getting back to us with some answers, if 
they have the opportunity.
    And we appreciate you taking the time to come and thank you 
for your courtesy.
    Attorney General Ashcroft. We will make the answers to the 
questions a matter of priority. And thank you very much for 
your help.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted by Senator Pete V. Domenici

                       SCAAP AND SOUTHWEST BORDER

    Question. Mr. Attorney General, as you are aware, the President's 
Budget completely eliminates funding for the State Criminal Alien 
Assistance Program, as it did last year, a $565 million reduction from 
fiscal year 2002. I am highly concerned about the impact cutting this 
program would have on many struggling counties in New Mexico, as they 
shoulder the significant cost burden created by illegal immigration, a 
federal responsibility. I am also concerned that this unbearable cost 
burden may damage localities' ability to address other homeland 
security needs.
    Border counties are growing faster than any other region in the 
nation. At the same time, they have a lower per capita income and a 
higher percentage of people below the federal poverty level than any 
other region, making them the least able to foot the cost of services 
for criminal illegal aliens. In this time of heightened security in our 
border regions, it is imperative to ensure the effective processing of 
criminal illegal aliens, including incarceration by local law 
enforcement agencies.
    In past years, I have fought to increase SCAAP resources to relieve 
the significant costs imposed on local communities by the costs of 
detaining criminal aliens. The state of New Mexico received $2.3 
million in fiscal year 2002 funding through this program. However, a 
recent U.S.-Mexico Border Counties Coalition study detailing costs 
associated with processing criminal illegal aliens estimates that New 
Mexico's three border counties alone spend an estimated $5.0 million 
annually on criminal justice, law enforcement, and emergency medical 
care for illegal immigrants.
    In view of the tremendous burden on border criminal justice systems 
in the border region, how does the Department of Justice propose to 
meet the costs of the federal responsibilities currently shouldered by 
states and localities, if not through SCAAP?
    Answer. The State Criminal Alien Assistance Program (SCAAP) is a 
payment program designed to provide federal assistance to states and 
localities that incur costs for incarcerating certain criminal aliens 
held as a result of state convictions. In fiscal year 2004, the Office 
of Justice Programs (OJP) requests no funding for SCAAP for the 
following reasons:
  --SCAAP does not advance the core mission of the Department of 
        Justice (DOJ). Since 1995, approximately $3.45 billion has been 
        distributed to eligible state and local jurisdictions. By 
        statute, SCAAP funds are unrestricted, and recipient 
        jurisdictions may use these funds for any lawful state or local 
        purpose. Expenditures are not limited to correctional or even 
        criminal justice purposes. Thus, in contrast to other programs 
        administered by the Department, funds awarded under SCAAP do 
        not necessarily support efforts to develop the nation's 
        capacity to prevent and control crime, administer justice, or 
        assist crime victims. Further, funds awarded are not linked to 
        overall performance or evaluation data as is now required for 
        other DOJ programs.
  --Redirecting resources from SCAAP will provide funding for 
        Congressional and Administration initiatives. These initiatives 
        include increasing resources available to stem the tide of 
        illegal immigration as well as the funding of programs such as 
        OJP'S Southwest Border Initiative (SWBI), a $50 million program 
        that provides targeted assistance to southwestern state and 
        local jurisdictions, including those in New Mexico, that 
        prosecute referred Federal drug cases. The Administration has 
        already begun to prioritize and move resources among programs 
        that are competing for scarce federal dollars in order to 
        ultimately fund those programs that provide the most cost-
        effective and direct support to jurisdictions for addressing 
        pressing national crime problems.
  --Finally, since the Bureau of Justice Assistance (BJA) began 
        administering SCAAP in fiscal year 1995, there has been only 
        marginal improvement in the technical ability of the 
        Immigration and Naturalization Service to positively identify 
        those offenders being held in the nation's prisons and jails 
        who are undocumented aliens. Yet, the number of jurisdictions 
        claiming they are housing undocumented aliens has increased to 
        more than 800 applicants as of the fiscal year 2003 cycle. The 
        vast majority of these applicants will receive some funds, and 
        many of these awards will be quite small, some falling below 
        $1,000. Without better individual verification of offender 
        identity and a clearer link between payments and relieving the 
        burden of detention costs, this trend toward more jurisdictions 
        sharing each new appropriation dilutes the impact of these 
        program funds and fails to address the purpose for which this 
        program was initiated. That purpose was to help relieve an 
        unfair financial burden on a limited number of states and 
        localities that were seriously inundated with undocumented 
        alien offenders who should have been prevented from crossing 
        the nation's borders.
    In fiscal year 2002, funds distributed to New Mexico under the 
SCAAP program totaled approximately $2.33 million of the total of $540 
million awarded. Only 14 of New Mexico's 33 counties received awards, 
which ranged from $402 to $250,610; the state's award was approximately 
$1.77 million. In contrast, more than $1.5 million had been requested 
under SWBI by New Mexico jurisdictions through June 2003. More funding 
is available, and there will be another funding opportunity to cover 
costs incurred in the second half of fiscal year 2003 later this year. 
Thus, while the scope and coverage of these two programs are not 
identical and not all cases for which payments will be provided will 
involve illegal aliens, both the offender populations involved and the 
goals of the program are very similar. And, more importantly, for the 
state of New Mexico specifically, SWBI will generate proportionally 
more funding that will go to directly reimburse local jurisdictions 
affected by illegal crime than will SCAAP.

         NEED FOR ADDITIONAL PERMANENT JUDGESHIPS IN NEW MEXICO

    Question. Attorney General Ashcroft, the Chief Justice of the 
United States Supreme Court, William H. Rehnquist, and the Chief 
Circuit Judge for the Tenth Circuit, Deanell Reece Tacha, have 
described the Southwest Border states as being in crisis. This 
description is based upon the massive number of cases that each federal 
judge currently has on his or her docket. Chief Circuit Judge Tacha 
expressed her concern about the District of New Mexico in particular. 
The District of New Mexico ranks fifth in the nation in weighted 
filings per judgeship. Two weeks ago the Judicial Conference of the 
United States asked Congress for 57 new Judgeships, including 3 more 
for the District of New Mexico (only Northern California, Eastern 
California, Southern Florida, and Eastern New York have need for a 
greater number of judgeships).
    Based upon the experiences of the U.S. Attorney practicing in this 
district, would you agree that the judicial system in the district of 
New Mexico is in a state of crisis? What would help to alleviate the 
problems that are making the administration of justice so difficult?
    Answer. The District of New Mexico has seen a marked increase in 
criminal case filings over the last ten years. In fiscal year 1992, 602 
criminal cases were filed against 905 defendants. In contrast, during 
fiscal year 2002, 2,232 criminal cases were filed against 2,570 
defendants. Clearly the heavy workload in this area impacts the federal 
judiciary. Increased staffing combined with more efficient case 
processing procedures has been highly beneficial to the United States 
Attorneys along the Southwest Border. Further refinements of the 
court's case processing procedures might have similar benefits for the 
courts.
    The Las Cruces United States Attorney's Branch Office has an area 
of responsibility that includes 15 counties comprising more than 60,000 
square miles including a 180-mile border with Mexico. The 180-mile 
Mexico/New Mexico border is highly porous, remote, and unpopulated. The 
increase in criminal immigration cases has been particularly striking. 
In fiscal year 1992, 76 cases were filed involving 92 defendants. In 
fiscal year 2002, 1,339 cases were filed against 1,401 defendants.
    Virtually 100 percent of the immigration related offenses 
prosecuted in Las Cruces are generated by the U.S. Border Patrol, now a 
part of the Department of Homeland Security. El Paso Sector Border 
Patrol encompasses West Texas and all of New Mexico. In 1993, El Paso 
Sector inaugurated an operation called ``Hold the Line.'' The 
preliminary concept of ``Hold the Line'' was to move undocumented 
immigrant traffic to areas that were less populated and would be more 
manageable. This endeavor appears to be continuing successfully.
    Undocumented immigrant apprehensions dropped dramatically (72 
percent) in El Paso at the initiation of ``Hold the Line'' in fiscal 
year 1994. Apprehensions then increased for the next two fiscal years 
until the implementation of the Illegal Immigration Reform and 
Immigrant Responsibilities Act (IIRIRA) on April 1, 1997.
    Though the number of illegal alien apprehensions dramatically 
declined after enactment of the IIRIRA, the ``Hold the Line'' stations 
that bordered the Rio Grande River continued to apprehend the largest 
number of illegal aliens. As time went on, ``Hold the Line'' stations' 
apprehensions declined and apprehensions in New Mexico began to 
increase. In 1998, Border Patrol stations in the New Mexico sector 
began to apprehend more aliens than the El Paso sector stations in 
Texas.
    The Las Cruces Office expects this trend to continue. As the 
enforcement presence remains highly visible in and around central El 
Paso and as the Border Patrol's presence continues to escalate in 
southern Arizona. The number of aliens apprehended in southern New 
Mexico will continue to skyrocket.
    Another factor in the continued rise is prosecution cases for the 
State of New Mexico is the IDENT system at all the New Mexico Stations 
and the Integrated Automated Fingerprint Identification System (IAFIS) 
in Deming, New Mexico. These systems identify fugitive aliens and 
aliens who are prior deportees and aggravated felons. When the prior 
deportees and aggravated felons are located, we are required by law to 
federally prosecute these aliens. In the near future the IAFIS system 
will be deployed in all the Border Patrol Stations in New Mexico and 
will again increase the prosecution load for the USAO in New Mexico.
    To put this into context, the El Paso Border Patrol Sector 
Prosecutions Program has seen dramatic increases in New Mexico cases 
prosecuted. In fiscal year 1999 the average number of cases prosecuted 
per month for New Mexico was 53. Currently for fiscal year 2003 the 
average number of cases prosecuted per month is 131. That is a 147 
percent increase in four years.
    There are currently no resident district judges in Las Cruces, even 
though more than 70 percent of the criminal cases in the District of 
New Mexico are prosecuted here. The active district judges, augmented 
by senior district and circuit judges as well as an array of visiting 
judges, take turns coming to Las Cruces. A given case can easily pass 
to three or four district judges prior to trial. The assignment of two 
or more district judges to Las Cruces would help our ability to 
appropriately service our caseload.

                RADIATION EXPOSURE COMPENSATION PROGRAM

    Question. Attorney General Ashcroft, I want to congratulate the 
Department of Justice for its hard work to ensure that claimants under 
the Radiation Exposure Compensation Act are receiving claims payments 
instead of IOUs as was the case a couple of years ago. I commend the 
Department for aggressively implementing language I sponsored in the 
fiscal year 2001 Supplemental Appropriations bill that provided ``such 
sums as may be necessary'' to pay RECA claims approved by September 30, 
2001, to compensate those who sustained injury as a result of the 
United States open-air nuclear testing and uranium mining activities in 
the 1950's through 1970's.
    Will you please give the Subcommittee a status report on this 
program?
    Answer. The July 2000 Amendments to the Radiation Exposure 
Compensation Act (RECA) markedly expanded the scope of the Program. 
Major changes include new categories of beneficiaries; expansion of 
eligible diseases, geographic area, and time period; and a reduction in 
the radiation exposure threshold for miners.
    It has been nearly three years since the Amendments were enacted. 
Since that time, the level of activity has increased dramatically:
  --The approval rate increased from 49 percent--before enactment--to 
        83 percent, since enactment.
  --Nearly 9,800 claims have been received since enactment--compared 
        with some 1,200 claims received in the three fiscal years 
        preceding the Amendments.
  --More than 6,200 claims, valued at over $380 million, have been 
        approved since enactment--compared with 574 approvals valued at 
        less than $42 million in the three fiscal years preceding the 
        Amendments.
    Our most current estimates for fiscal year 2003:

                            WORKLOAD SUMMARY
------------------------------------------------------------------------
                                             Fiscal year--
                             -------------------------------------------
                                 2000       2001       2002    2003 est.
------------------------------------------------------------------------
Pending, Beginning of Year..        353        728      2,936      2,679
Received....................        854      3,828      3,416      3,200
Approved....................        316      1,561      2,807      2,480
Denied......................        163         59        866        620
Pending, End of Year........        728      2,936      2,679      2,779
------------------------------------------------------------------------

    To address this sharp rise in workload, we are doing all we can to 
ensure the program is being administered to provide timely and accurate 
compensation for all eligible claimants. Currently, there are 20 staff 
on board, including 11 claims examiners. With nearly 2,800 claims 
pending, each examiner is responsible for an average of 252 claims. 
Thus, while the program is able to process a huge volume--some 3,100 
projected this fiscal year, the backlog is growing: we will end the 
year with a greater number of pending claims than the number pending at 
the year's outset.
    So that we may reduce the number of pending claims significantly, 
the Department seeks Congressional approval to reprogram funds for RECA 
administration this fiscal year. In addition, the President's fiscal 
year 2004 budget includes an increase of $1 million for RECA 
Administrative Expenses. This increase will provide examiners with much 
needed support to review claims, assist claimants in providing 
information that will complete claims, and perform many of the time-
consuming administrative tasks that detract from the primary mission--
resolving claims.
    As you know, the Fiscal Year 2002 National Defense Authorization 
Act (Public Law 107-107) made the Trust Fund a mandatory account and 
provided $665 million, setting annual spending caps for 2002-2011. We 
applaud Congress' decision to make the RECA Trust Fund mandatory. We 
are monitoring spending under the caps and can report the following 
with respect to the current status:
  --In fiscal year 2002, the cap provided $172 million and the 
        Department obligated the full amount.
  --The fiscal year 2003 cap is $143 million. To date, an average of 
        $12.3 million has been obligated per month. To stay within the 
        cap, obligations will have to drop to about $9.5 million per 
        month for the remainder of this fiscal year.
  --No ``IOU's'' will be necessary this fiscal year. However, 
        compensation for some current claims will be paid from fiscal 
        year 2004 funds.
    Question. Would you please provide for the record an updated 
breakdown of the number of claims paid by state and by category of 
beneficiary?
    Answer. The table at Attachment 1 displays the number of claims 
approved through June 11, 2003, by state and by type of claim. 
Residents of Utah, Arizona, Colorado, and New Mexico have been awarded 
79 percent of the compensation approved. However, RECA awards have been 
made to residents of all 50 states and the District of Columbia.
    Question. I also congratulate the President and the Department for 
proposing in the 2002 budget to make payments for claims under RECA an 
entitlement. Congress did enact as part of the Defense Authorization 
bill, my amendment to make the RECA program a mandatory program. The 
Department has $172 million to pay claims in 2002 and $143 million to 
pay claims in 2003, and additional amounts in future years.
    Will you please give the Subcommittee a status report on the 
payment of RECA claims? How many claims has the Department approved and 
how much has been spent out of the Trust Fund to pay these claims since 
the inception of RECA?
    Answer. Through June 11, 2003, a total of 9,588 claims have been 
approved, with a value of $631,323,282.
    Question. What is the average amount of the claims approved, the 
number of claims denied, and the general reason for denial of these 
claims?
    Answer. RECA award amounts are fixed by statute. Uranium workers 
(uranium miners, mill workers, ore transporters) are eligible for a 
$100,000 award; onsite participants are eligible for a $75,000 award; 
and downwinders are eligible for a $50,000 award. Over the 11-year 
history of the Program, the average amount approved is $65,845. 
However, since enactment of the Amendments, the average has declined 
from $74,000 to $61,000--due to the predominance of downwinder awards.
    Through June 11, 2003, the RECA Program has denied 4,866 claims. 
Claims are denied if one or more of the eligibility criteria are not 
satisfied. For example, uranium worker claims are typically denied in 
cases where the documentation does not establish that the individual 
contracted an illness specified under the law. Similarly, downwinder 
and onsite participant claims are most frequently denied where the 
records fail to establish a covered disease or the individual was 
either not present in the affected ``downwind'' area or did not 
participate in atmospheric weapons testing.
    Question. For the record, would you please provide the Subcommittee 
with a breakdown of the types of claims approved or disapproved 
(childhood leukemia, other downwinder, onsite participants, or uranium 
miners), the number of claims currently pending, and the amounts 
disbursed by type of claim paid?
    Answer. The table on the following page provides the requested 
information as of June 11, 2003.

                        RADIATION EXPOSURE COMPENSATION PROGRAM APRIL 1992-JUNE 11, 2003
----------------------------------------------------------------------------------------------------------------
                                                           Value of     Claims
                                                            Awards     Received   Approved    Denied    Pending
----------------------------------------------------------------------------------------------------------------
Childhood Leukemia.....................................   $1,200,000         44         24         19          1
Downwinder.............................................  309,170,000      9,723      6,184      1,981      1,558
Onsite Participant.....................................   42,461,782      1,808        589        955        264
Uranium Miner..........................................  251,391,500      5,096      2,520      1,861        715
Uranium Miller.........................................   21,700,000        419        217         40        162
Ore Transporter........................................    5,400,000        106         54         10         42
                                                        --------------------------------------------------------
      TOTAL............................................  631,323,282     17,196      9,588      4,866      2,742
----------------------------------------------------------------------------------------------------------------

    Question. For my use, would you please provide this same 
information specifically for claims from New Mexico, including the 
total claims received, the total claims approved, the total claims 
denied, and the total claims pending?
    Answer. With respect to claims for which the primary claimant 
resides in New Mexico, the Department has approved 801 claims, with a 
total value of $76,277,799 through June 11, 2003. The following table 
provides the requested information.

                  RADIATION EXPOSURE COMPENSATION PROGRAM: NEW MEXICO APRIL 1992-JUNE 11, 2003
----------------------------------------------------------------------------------------------------------------
                                                       Value of     Claims
                                                        Awards     Received    Approved     Denied      Pending
----------------------------------------------------------------------------------------------------------------
Childhood Leukemia..................................     $50,000           1           1           0           0
Downwinder..........................................   3,300,000         151          66          38          47
Onsite Participant..................................     993,299          55          14          33           8
Uranium Miner.......................................  66,334,500       1,706         664         753         289
Uranium Miller......................................   5,300,000         109          53          10          46
Ore Transporter.....................................     300,000          16           3           4           9
                                                     -----------------------------------------------------------
      TOTAL.........................................  76,277,799       2,038         801         838         399
----------------------------------------------------------------------------------------------------------------

    Question. How many claims are projected to be filed and processed 
under current law in the upcoming year?
    Answer. For fiscal year 2004, we estimate that 2,900 claims will be 
filed and 3,100 claims will be processed. Of the 3,100 that may be 
processed, at an estimated 2,215 claims would be approved, valued at 
$135 million. This assumes that the approval rate will fall from 80 
percent in fiscal year 2003 to 71 percent in fiscal year 2004, while 
the average value of awards holds at $61,000. Based on these 
conservative assumptions, the value of approvals would exceed the $107 
million cap by more than $28 million--exclusive of unfunded awards from 
the end of fiscal year 2003.
    To stay within the $107 million cap set for fiscal year 2004, while 
paying for awards made in the final weeks for fiscal year 2003, the 
approval rate would have to fall to 48 percent.
    Question. Does the Administration have any long-range estimates as 
to the number of claims that might still be filed under the Radiation 
Exposure Compensation Act under current law and regulations?
    Answer. In May 2000, the Congressional Budget Office (CBO) 
developed cost estimates for a bill that became the Radiation Exposure 
Compensation Act Amendments of 2000 (Public Law 106-245). CBO roughly 
estimated that about 15,600 claims might be filed over the 22-year 
lifetime of the Act. CBO projected that about 11,700 claims would be 
filed in the first five years--or, roughly 2,340 per year. These 
estimates appear to be low. In less than three years, nearly 9,800 
claims have been filed--more than 3,200 annually. Based on a three-year 
track record with the expanded program, we have developed detailed 
projections through fiscal year 2005. The following chart includes 
these projections, along with our ``guesstimates'' regarding the fiscal 
year 2006-2011 period--bearing in mind that the farther we delve into 
the future, the greater is the uncertainty we attach to our estimates. 
These projections suggest that (1) more people are responding more 
quickly then CBO anticipated and (2) the amount that may be approved in 
a given year may exceed existing caps.

                                     OUT YEAR WORKLOAD AND FUNDING ESTIMATES
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year--
                                                                 -----------------------------------------------
                                                                       2004            2005          2006-2011
----------------------------------------------------------------------------------------------------------------
Pending, Beginning of Year......................................           2,779           2,579           2,179
Received........................................................           2,900           2,300           5,200
Approved........................................................           2,215           1,625           3,235
Denied..........................................................             885           1,075           3,240
Pending, End of Year............................................           2,579           2,179             904
Value of Approvals..............................................            $135             $99            $197
Public Law 107-107 Cap..........................................            $107             $65            $168
----------------------------------------------------------------------------------------------------------------


                                                 ATTACHMENT 1--AWARDS APPROVED BY STATE AND BY CATEGORY
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Onsite      Uranium      Uranium        Ore         Total        Value of
                                                             Downwinder  Participant     Miner        Miller    Transporter     Awards        Awards
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama...................................................            4            9            3  ...........  ...........           16      $1,081,344
Alaska....................................................           10            1            7  ...........  ...........           18      $1,275,000
Arizona...................................................        2,386           38          292           10            3        2,729    $152,502,016
Arkansas..................................................           15            5           12            2  ...........           34      $2,495,490
California................................................          198           80           33            1            1          313     $19,135,196
Colorado..................................................           67           11          869           87           28        1,062    $102,575,000
Connecticut...............................................            1            2  ...........  ...........  ...........            3        $200,000
Delaware..................................................            1            3  ...........  ...........  ...........            4        $275,000
D.C.......................................................            2            1  ...........  ...........  ...........            3        $175,000
Florida...................................................           12           35            6  ...........  ...........           53      $3,692,507
Georgia...................................................            5            8            1  ...........  ...........           14        $927,181
Hawaii....................................................            3           16            1  ...........            1           21      $1,473,334
Idaho.....................................................           60            8           22            1  ...........           91      $5,870,000
Illinois..................................................            5           10            6  ...........  ...........           21      $1,585,511
Indiana...................................................            3            3            9  ...........  ...........           15      $1,275,000
Iowa......................................................            3            4            3            1  ...........           11        $822,503
Kansas....................................................           12            6            3  ...........  ...........           21      $1,350,000
Kentucky..................................................            1            4            1  ...........  ...........            6        $395,319
Louisiana.................................................  ...........            8  ...........  ...........  ...........            8        $549,170
Maine.....................................................  ...........            2  ...........  ...........  ...........            2        $150,000
Maryland..................................................           10           19            1  ...........  ...........           30      $1,945,180
Massachusetts.............................................            1            6  ...........  ...........  ...........            7        $500,000
Michigan..................................................            4            8  ...........  ...........  ...........           12        $800,000
Minnesota.................................................            8            6            2            1  ...........           17      $1,150,000
Mississippi...............................................  ...........            1            1            1  ...........            3        $275,000
Missouri..................................................           11            7           12            1  ...........           31      $2,375,000
Montana...................................................           15            4            8            1  ...........           28      $1,909,872
Nebraska..................................................            4            3            6  ...........  ...........           13      $1,025,000
Nevada....................................................          619           94           45            2            1          761     $42,775,000
New Hampshire.............................................            1            1            1  ...........  ...........            3        $225,000
New Jersey................................................            2            3  ...........  ...........  ...........            5        $325,000
New Mexico................................................           67           14          664           53            3          801     $76,277,799
New York..................................................            9            9            1  ...........  ...........           19      $1,212,608
North Carolina............................................            3           10            4  ...........  ...........           17      $1,253,241
North Dakota..............................................            1  ...........  ...........            1  ...........            2        $150,000
Ohio......................................................            2            6            3            2  ...........           13      $1,050,000
Oklahoma..................................................           13            4           24            2  ...........           43      $3,509,500
Oregon....................................................           41           10           23  ...........  ...........           74      $5,097,234
Pennsylvania..............................................            7           10  ...........  ...........  ...........           17      $1,072,054
Rhode Island..............................................  ...........            2  ...........  ...........  ...........            2        $150,000
South Carolina............................................            1            5  ...........  ...........  ...........            6        $411,328
South Dakota..............................................            2            2            5            4            1           14      $1,235,174
Tennessee.................................................            7            8            1  ...........  ...........           16        $981,133
Texas.....................................................           40           20           17            2  ...........           79      $5,298,097
Utah......................................................        2,473           35          350           37           13        2,908    $165,719,850
Vermont...................................................  ...........            1            1  ...........  ...........            2        $175,000
Virginia..................................................            9           17  ...........  ...........  ...........           26      $1,656,302
Washington................................................           42           20           26            1            1           90      $6,278,077
West Virginia.............................................  ...........            1           22  ...........  ...........           23      $2,275,000
Wisconsin.................................................  ...........            7            1  ...........  ...........            8        $561,262
Wyoming...................................................           27            2           34            6            2           71      $5,700,000
                                                           ---------------------------------------------------------------------------------------------
      Subtotal............................................        6,207          589        2,520          216           54        9,586    $631,173,282
Canada....................................................            1  ...........  ...........            1  ...........            2        $150,000
                                                           ---------------------------------------------------------------------------------------------
      TOTAL...............................................        6,208          589        2,520          217           54        9,588    $631,323,282
--------------------------------------------------------------------------------------------------------------------------------------------------------

                          MENTAL HEALTH COURTS

    Question. Attorney General Ashcroft, as you are aware, the fiscal 
year 2003 Omnibus Appropriations Bill contained $3 million for Mental 
Health Courts. The funding is the result of the Americas Law 
Enforcement and Mental Health Project Act, enacted into law three years 
ago. The Act authorized the creation of Mental Health Courts with 
separate dockets to handle cases involving individuals with a mental 
illness.
    The specific thrust of Mental Health Courts is simple to provide an 
individual with a mental illness and charged with a misdemeanor or 
nonviolent offense the option of out-patient or in-patient mental 
health treatment as an alternative to incarceration.
    Finally, the Department of Justice estimates that sixteen percent 
of all inmates in local and state jails suffer from a mental illness 
and the American Jail Association estimates that as many as 700,000 
persons suffering from a mental illness are jailed each year.
    Do you believe Mental Health Courts can alleviate prison 
overcrowding and create greater judicial economy within our court 
systems?
    Answer. Mental Health Courts can help alleviate overcrowding, to a 
degree, by employing problem-solving approaches that use alternative 
sentencing options to reduce the demands on correctional institutions 
while offering approaches that address the underlying issues of these 
mentally ill offenders. These courts use several critical elements as 
part of their comprehensive case management approach, such as complete 
individualized mental assessments as soon as possible after interface 
with law enforcement, judicial supervision, immediate mental health 
services as needed, and a plan for longer-term services. They can 
alleviate prison overcrowding by segregating a population whose minor 
criminal misbehavior is likely to be a function of their illness and 
providing the treatment they need. In doing so, it is hoped that 
communities with mental health courts will see reduced recidivism, and 
a reduction in the recurring costs to the system of continued criminal 
behavior by this population.
    This approach ensures a coordinated response between the service 
providers and community supervision that reinforces accountability and 
access to the critical services needed for the offenders to gain 
stability in their mental health and uses sanctions and incentives that 
are meaningful to the mentally ill offenders to help keep them crime 
free.
    Question. What steps are being taken by DOJ to distribute the $3 
million appropriated to implement Americas Law Enforcement and Mental 
Health Project Act?
    Answer. The competition for the fiscal year 2003 funds has taken 
place. The Bureau of Justice Assistance received 44 applications. The 
peer review process is underway, and 14 awards are expected to be made 
by the end of this fiscal year. These 14 sites will be in addition to 
the 23 sites awarded during the first cycle (fiscal year 2002 funding). 
Site awards in both cycles were for up to $150,000 each, varying 
according to the applicant's request and budget clearances, and have 
grant periods of 18 months. Additional funding will be used for 
technical support. An evaluator is assessing and documenting a sample 
of the courts in sites funded with fiscal year 2002 resources.
    Question. What plans does DOJ have to provide assistance to court 
systems seeking to develop and implement a Mental Health Court and does 
DOJ plan to offer continued technical assistance after the 
implementation of a Mental Health Court?
    Answer. Approximately $500,000 from the initial earmark in fiscal 
year 2002 was used to support non-site work related to examining the 
mental health courts approach. The Crime and Justice Research Institute 
received a grant to provide an update of an overview of the issues 
related to mental health courts and reported in May 2002 in Emerging 
Judicial Strategies for the Mentally Ill in the Criminal Caseload. The 
Bureau of Justice Assistance also funded the Criminal Justice/Mental 
Health Consensus Project. This national scope, 2-year effort prepared 
specific recommendations for local, state and federal policymakers and 
criminal justice and mental health professionals on how to improve the 
criminal justice system response to people with mental illness. The 
Council of State Governments coordinated this effort, working with the 
Association of State Correctional Administrators, Bazelon Center for 
Mental Health Law, Center for Behavioral Health, Justice and Public 
Policy, National Association of State Mental Health Program Directors, 
Police Executive Research Forum, and the Pretrial Services Resource 
Center.
    This year, approximately $750,000 will be set aside for technical 
assistance support to the sites, primarily to bring professionals 
involved in the courts to the funded sites. It is anticipated that 
several organizations will be involved, each bringing to the table 
expertise in reaching constituencies in different areas, including law 
enforcement, prosecutor, judges, community correctional personnel, and 
treatment coordinators. This technical assistance will be available to 
the courts selected and, to the extent feasible, to other jurisdictions 
attempting this approach without federal funding. Courts will be 
assisted at least through the initial startup phase.

                                 ______
                                 
               Questions Submitted by Senator Ted Stevens

    VILLAGE OF CHICKALOON AND VILLAGE FORESTRY DEPARTMENT OF ALASKA

    Question. The Office of Community Oriented Policing Services (COPS) 
was created to meet the needs of law enforcement in Native American 
Communities. According to DOJ records, the Village of Chickaloon and 
the Village of Forestry Department (of Alaska) have received 
$1,473,250.00 in funding from COPS from 1994-2002. In addition, eight 
officers have been funded through COPS. However, the Village of 
Chickaloon is not a sovereign entity and the State Troopers monitor the 
Village. Please describe each grant proposal submitted by the Village 
of Chickaloon and explain how each grant proposal meets the 
requirements for funding under the COPS program.
    Answer. The Village of Chickaloon and the Chickaloon Village of 
Forestry Department have received a total of 8 grant awards, totaling 
$1,723,238, from the COPS Office.
    The first award to the Village of Chickaloon, in 1995, was awarded 
through COPS FAST program. The FAST program provided jurisdictions 
serving fewer than 150,000 persons to hire new officers to engage in 
community policing. The Village of Chickaloon was eligible to apply 
under the FAST program, along with other state, local, and tribal law 
enforcement agencies serving populations less than 150,000.
    The following seven awards, to the Village of Chickaloon and the 
Chickaloon Village of Forestry Department, were awarded through COPS 
Tribal Resources Grant Program. Under this program federally recognized 
tribes may apply to receive funding for training and equipment for new 
and existing officers as well as salary and benefits for new community 
policing officers. As a federally recognized tribe, Chickaloon was 
eligible to apply for federal assistance through COPS Tribal Resources 
Grant Program.
    Details of the eight grants are provided in the following answers 
as well as in the supplemental documentation provided.
    Question. For each grant given to the Village of Chickaloon under 
the COPS program, detail the funds given for each year and describe the 
purpose of each grant.
    Answer. The Village of Chickaloon and the Chickaloon Village of 
Forestry Department have received a total of 8 grant awards, totaling 
$1,723,238, from the COPS Office.

    1. The Village of Chickaloon was awarded one full-time position 
through the COPS FAST grant program (COPSFAST). COPSFAST provided 
funding to jurisdictions serving populations of less than 50,000. The 
program provided funding for the payment of salaries and approved 
fringe benefits for sworn entry-level officers, lateral transfers, or 
rehired officers. The FAST grant provided a maximum federal 
contribution of 75 percent of the salary and benefits for each officer 
position over three years, up to $75,000 per officer. Chickaloon's FAST 
grant, which began March 1, 1995, and expired August 31, 1998, totaled 
$75,000.

    2. The Village of Chickaloon was awarded two full-time positions 
through the Universal Hiring Program (UHP). The UHP grant provided 
funding for the payment of salaries and approved fringe benefits for 
newly hired entry-level officer positions with a maximum federal 
contribution of 75 percent of the salary and benefits for each officer 
position over three year, up to $75,000 per officer position, unless a 
waiver of the matching local funds was granted. Chickaloon's UHP grant, 
which began December 1, 1995, and expired December 31, 2000, totaled 
$252,084--the grantee received a full waiver of the local match.

    3. The Village of Chickaloon was awarded equipment and training 
through the Tribal Resources Grant Program 1999 (TRGP99), the specifics 
of the departments's award are detailed in the attached Final Funding 
Memo. The TRGP99 grant provided funding to federally recognized tribes 
for salaries and benefits for newly hired entry-level officer 
positions, and training and equipment for new and existing with a 
maximum federal contribution of 75 percent of the approved costs, 
unless a waiver of the local matching funds is granted, up to $75,000 
per officer for salary and benefits, $3,000 for background 
investigations, $1,200 to $6,000 per type of training, $3,000 per 
officer for basic equipment, $75,000 per department for technology, 
and/or $20,000 per vehicle. Chickaloon's TRGP99 grant, which began 
September 1, 1999, and expired May 31, 2001, totaled $90,810--the 
grantee received a full waiver of the local match.

    4. The Village of Chickaloon was awarded equipment and training 
through the Tribal Resources Grant Program 2000 (TRGP00), the specifics 
of the department's award are detailed in the attached Final Funding 
Memo. The TRGP00 grant provided funding to federally recognized tribes 
for salaries and benefits for newly hired entry-level officers 
positions, and training and equipment for new and existing officers. 
The TRGP00 grant provided a maximum federal contribution of 75 percent 
of the approved costs, unless a waiver of the local matching funds is 
granted, up to $75,000 per officer for salary and benefits, $3,000 for 
background investigations, $1,200 to $6,000 per type of training, 
$3,000 per officer for basic equipment, $75,000 per department for 
technology, and/or $20,000 per vehicle. Chickaloon's TRGP00 grant, 
which began August 1, 2000, and expired on July 31, 2003, totaled 
$14,251--the grantee received a full waiver of the local match.

    5. The Village of Chickaloon was awarded two full-time positions 
through the Tribal Resources Grant Program 2000 (TRGP00). The TRGP00 
program parameters are detailed in the above paragraph (#4). 
Chickaloon's TRGP00 grant, which began August 1, 2000, and is scheduled 
to expire January 31, 2005, totals $281,172--the grantee received a 
full waiver of the local match.

    6. The Chickaloon Village Forestry Department was awarded equipment 
and training through the Tribal Resources Grant Program 2000 (TRGP00), 
the specifics of the department's award are detailed in the attached 
Final Funding Memo. The TRGP00 grant provided funding to federally 
recognized tribes for salaries and benefits for newly hired entry-level 
officer positions, and training and equipment for new and existing 
officers. The TRGP00 grant provided a maximum federal contribution of 
75 percent of the approved costs, unless a waiver of the local matching 
funds is granted, up to $75,000 per officer for salary and benefits, 
$3,000 for background investigations, $1,200 to $6,000 per type of 
training, $3,000 per officer for basic equipment, $75,000 per 
department for technology, and/or $20,000 per vehicle. Chickaloon 
Village Forestry Department's TRGP00 grant, which began August 1, 2000, 
and is scheduled to expire July 31, 2003, totaled $207,177--the grantee 
received a full waiver of the local match.

    7. The Chickaloon Village Forestry Department was awarded two full-
time positions through the Tribal Resources Grant Program 2000 
(TRGP00). The TRGP00 program parameters are detailed in the above 
paragraph (#6). Chickaloon Village Forestry Department's TRGP00 grant, 
which began August 1, 2000, and is scheduled to expire January 31, 
2005, totals $421,756--the grantee received a full waiver of the local 
match.

    8. The Village of Chickaloon received funding through the Tribal 
Hiring Renewal Grant Program (THRGP) to renew two full-time positions. 
The THRGP grant provides funding to federally recognized tribes that 
were unable to retain the previously awarded COPS-funded positions with 
tribal, state, or BIA funding and have received an exemption from the 
COPS Office's retention requirement. The THRGP grant is a two-year 
grant, which funds fourth and fifth year salaries and benefits for the 
renewal of COPS-funded police officer positions, there is not a local 
match requirement for this program. Chickaloon's grant, which began 
September 1, 2002, and is scheduled to expire August 31, 2004, totals 
$249,988.
    Question. Has the Village of Chickaloon submitted any periodic 
reports to the COPS office in Washington regarding the use of the grant 
funds and/or the effectiveness of the grant funds? If so, detail the 
results of said studies?
    Answer. All COPS grantees, including the Village of Chickaloon, are 
required to submit programmatic progress reports and quarterly 
financial status reports. The COPS Office has not conducted an on site 
visit to the Village of Chickaloon, however COPS is aware of their 
program progress through the grantee's submission of programmatic 
progress reports and quarterly financial status reports.
    Question. Has the DOJ conducted any studies regarding the effects 
of the COPS programs in Alaskan communities? If so, detail the results 
of said reports.
    Answer. The COPS Office has not funded a study to evaluate the 
effect of COPS grants specifically in Alaskan communities. However, 
independent evaluations of COPS programs have been conducted by the 
University of Nebraska and the Urban Institute to evaluate the effect 
of COPS funding.
    Question. Please submit a copy of each application received from 
Chickaloon or its Forestry Department.
    Answer. The COPS Office has submitted a binder containing grant 
information received from the Village of Chickaloon and the Chickaloon 
Village Forestry Department.
    Question. Have any official (or officials) of your Department 
visited Chickaloon?
    Answer. No, the COPS Office has not conducted a formal site visit 
to the Village of Chickaloon.
    Question. Did your office receive any letters of support for the 
applications of Chickaloon or the Department of Forestry pertaining to 
any applications?
    Answer. The COPS Office did not receive any letters of support for 
the Chickaloon or the Department of Forestry applications.
    Question. Please provide a copy of any report pertaining to 
Chickaloon received by your office from any official source Federal or 
state pertaining to Chickaloon's eligibility for these grants, or the 
need for the grants, or the use of these grants.
    Answer. The need for federal funding is demonstrated in each of the 
eight applications requesting federal assistance. Under COPS statutory 
authority and programmatic guidelines, the Village of Chickaloon and 
the Chickaloon Village Forestry Department were eligible for the grant 
funding received from the COPS Office. The Village of Chickaloon is a 
federally recognized tribe according to the Department of the Interior 
Bureau of Indian Affairs.

                                 ______
                                 
             Questions Submitted by Senator Robert C. Byrd

                          SAFE EXPLOSIVES ACT

    Question. It is my understanding that the Safe Explosives Act, 
enacted last year, requires tighter security for explosives materials 
and increased security measures for purchasers and possessors of 
explosives and that this new law will assist the Bureau of Alcohol, 
Tobacco, and Firearms (ATF) in helping to ensure that terrorists and 
criminals do not have access to explosives.
    In testimony before the House Appropriations Subcommittee on the 
Departments of Commerce, Justice and State, the Judiciary and Related 
Agencies on March 20, 2003, Acting ATF Director Bradley Buckles stated 
that the Safe Explosives Act represents a significant additional 
workload for ATF.
    I understand that, currently, the initial processing and issuance 
or denial of explosive licenses or permits is handled out of ATF's 
National Licensing Center in Atlanta, Georgia, which also handles the 
processing of Federal Firearms Licenses and is, consequently, 
overburdened, as well as overcrowded.
    In addition, Mr. Buckles stated in his testimony that the fiscal 
year 2004 budget request of $10,000,000 for the continuation of the 
implementation of the Safe Explosives Act ``* * * would continue the 
implementation of the Act and specifically, would be used to create the 
National Explosives Licensing Center (NELC) in an existing ATF facility 
in Martinsburg, West Virginia * * *.''
    I fully support the establishment of the NELC at the ATF facility 
in Martinsburg, West Virginia.
    Can you provide more details regarding the creation of the National 
Explosives Licensing Center (NELC) in West Virginia, including a 
detailed timeframe and cost estimate, including the costs of 
renovations needed to accommodate the NELC at the Martinsburg ATF 
facility, space and equipment needs, as well as the number of federal 
and contractor personnel that would be employed at the center?
    Answer. The requirements of the Safe Explosives Act (SEA) became 
fully effective on May 24, 2003. In part, the SEA increased the number 
of entities required to obtain an explosives permit from ATF. Also, the 
SEA enhanced the license/permit qualification requirements to include 
the submission of additional documentation (fingerprints and 
photographs) of individuals responsible for explosives operations and 
additional identifying information for employee possessors of 
explosives. This additional information is needed so that ATF can 
conduct, with the assistance of the FBI, more thorough background 
checks of these individuals. This increase in responsibility resulted 
in a need for a National Explosives Licensing Center (NELC). Since ATF 
currently houses the National Tracing Center in West Virginia and space 
was available at this location, the proposal was made to also house the 
NELC at the same location in Martinsburg, West Virginia.
    Renovations needed at the West Virginia site would not start any 
earlier than fiscal year 2004 and span into fiscal year 2005 due to 
other renovations taking place at the site. A minimal amount of funds 
(approximately $268,000) have been allocated in fiscal year 2003 for 
this purpose of filling two full time positions. Approximately $4 
million is estimated to establish the NELC in West Virginia. The 
following is a breakdown of the $4 million:

 
 
------------------------------------------------------------------------
Computer system development/enhancement.................        $545,000
15 contractors..........................................         771,680
16 full time positions..................................       1,258,151
2 pc moves..............................................         144,000
Space buildout/renovations/furniture....................   \1\ 1,000,000
Annualization of 2 positions funded 2003................         268,246
                                                         ---------------
      Grand total.......................................       3,987,077
------------------------------------------------------------------------
\1\ Recently revised to reflect current costs.

    The NELC in West Virginia would employ 18 federal employees and 15 
contractors.
    Question. Does the President's fiscal year 2004 budget request 
provide sufficient funding to establish a fully operational NELC? If 
not, what additional funds would be needed in fiscal year 2004 for this 
purpose?
    Answer. The President's fiscal year 2004 budget request includes 
$10 million for implementing the provisions of the Safe Explosives Act. 
A portion of this funding will be used to establish the NELC in West 
Virginia.

                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

                            USA PATRIOT ACT

    Question. Last month, when you testified before the Judiciary 
Committee, you were asked about a secret bill entitled the ``Domestic 
Security Enhancement Act of 2003,'' which was leaked to the press as a 
sequel to the USA PATRIOT Act. You responded, ``there has been no bill 
decided on, no proposal decided on.'' That was on March 4th. Three 
weeks later, a Department spokesperson told the Village Voice that the 
bill was coming soon, and that it ``will be filling in the holes'' of 
the PATRIOT Act.
    When will the Department share a draft of this bill with Congress?
    Answer. The primary mission of the Department of Justice is to 
protect the American people from the threat of terrorist attacks, while 
respecting the constitutional rights and liberties that the birthright 
of every American. Department staff constantly are thinking about new 
ways to detect and prevent terrorism. In that process, Department staff 
continually ask our prosecutors and investigators in the field what 
tools they need in the fight against terrorism. That process of 
considering ideas is continuing. It would be inappropriate to comment 
on the status of the internal deliberations or to speculate about any 
future decisions. However, if the Administration moves forward with 
such a proposal, the Department will consult with Members of Congress 
and their staff at an appropriate time. If and when a final proposal is 
approved by the Administration, we will work closely with Members of 
the Congress and their staff in their review of the proposal.
    Question. What legislative ``holes'' can we expect this bill to 
address?
    Answer. Please see the answer above.

                         PRIVACY ACT EXEMPTIONS

    Question. Please provide a detailed description of each of the 
three databases affected by the new rule, i.e., the National Crime 
Information Center (NCIC), Central Records System (CRS), and National 
Center for the Analysis of Violent Crime (NCAVC), including the types 
of records they contain and where these records originate.
    Answer. These databases are described in the following notices, 
published by the FBI in accordance with the Privacy Act, 5 U.S.C. 
552a(e)(4)(B) and (C). Each notice details the organization and 
categorization of the individuals and information in the database.
  --National Crime Information Center (NCIC), 64 Federal Register 52343 
        (Sept. 28, 1999);
  --Central Records System (CRS), 63 Federal Register 8659 (Feb. 20, 
        1998) and 66 Federal Register 17200 (March 29, 2001);
  --National Center for the Analysis of Violent Crime (NCAVC), 58 
        Federal Register 51887 (Oct. 5, 1993);
  --Blanket Routine Uses (BRU) Applicable to More Than One FBI Privacy 
        Act System of Records (JUSTICE/FBI-BRU), 66 Federal Register 
        33558 (June 22, 2001).
    Each database is summarized below. Copies of the Privacy Act 
notices are enclosed.
    The NCIC system of records provides a computerized database for 
ready access by a criminal justice agency making an inquiry. It 
includes information on fugitives, missing persons, members of violent 
criminal gangs, members of terrorist organizations, and other persons 
of interest to law enforcement. The database also includes records on 
stolen property, vehicles, and guns. The attached Privacy Act notice 
provides an exhaustive list of the available data. The NCIC system 
provides prompt disclosure of information in the system from other 
criminal justice agencies about crimes and criminals.
    The CRS maintains the FBI's investigative, personnel, applicant, 
and administrative case files. This system consists of one numerical 
sequence of subject matter files and an alphabetical index to the case 
files. The case file classifications used by the FBI in its basic 
filing system pertain primarily to Federal violations over which the 
FBI has investigative jurisdiction. The case file classifications 
include personnel, applicant, and administrative matters to facilitate 
information retrieval. As a part of the NCAVC, the Violent Crime 
Apprehensive Program (VICAP) maintains investigation reports on all 
forms of solved and unsolved violent crimes. These violent crimes 
include, but are not limited to, acts or attempted acts of murder, 
kidnapping, incendiary arson or bombing, rape, physical torture, sexual 
trauma, or evidence of violent forms of death. VICAP records include, 
but are not limited to, crime scene descriptions, victim and offender 
descriptive data, laboratory reports, criminal history records, court 
records, news media references, crime scene photographs, and 
statements. The data in the system consists of homicide, missing 
person, unidentified dead, sexual assault, and other criminal cases. 
State and local law enforcement agencies enter their case information, 
consisting primarily of victim information, offender information, and a 
description of the event, into the national database. In addition to 
entering data, law enforcement personnel can retrieve their own cases, 
run reports using their own data, and request query against the 
national database.
    Copies of the Privacy Act system notices listed above for the NCIC, 
CRS, and NCAVC are attached.

   [From the Federal Register, Vol. 64, No. 187, September 28, 1999]

                         DEPARTMENT OF JUSTICE
[AAG/A Order No. 170-99]

Privacy Act of 1974; Notice of Modified Systems of Records

    Pursuant to the Privacy Act of 1974 (5 U.S.C. 552a) and Office of 
Management and Budget (OMB) Circular No. A-130, notice is given that 
the Department of Justice, Federal Bureau of Investigation (FBI), is 
modifying the following system of records which was last published in 
the Federal Register on April 20, 1995 (60 FR 19775):
    National Crime Information Center (NCIC), JUSTICE/FBI-001.
    Also being modified is the following system of records which was 
last published in the Federal Register on February 20, 1996 (61 FR 
6386):
    Fingerprint Identification Records Systems (FIRS), JUSTICE/FBI-009.
    The FBI has made revisions to these systems of records to update 
information about these systems, make editorial adjustments to existing 
language, confirm in clearer language the categories of agencies that 
participate in the exchange of records through these systems, and add 
three new routine uses for both systems. A brief description of these 
changes is provided below.
    The two systems of records are being modified to update the 
location of the systems and denote the exact street address of the 
system manager. Both notices are also being revised to clarify existing 
language through minor editorial adjustments and to confirm in clearer 
language the authorized participation in these systems, and the 
availability of system records, to tribal, foreign, and international 
agencies, in addition to local, state, and federal agencies. Three 
routine uses have been added to allow disclosure of information 
maintained in these systems: To criminal justice agencies to conduct 
background checks under the National Instant Criminal Background Check 
System (NICS); to noncriminal justice government agencies, subject to 
appropriate controls, performing criminal justice dispatching functions 
or data processing/information services for a criminal justice 
dispatching functions or data processing/information services for a 
criminal justice agency; and to a private entity, subject to 
appropriate controls and under a specific agreement with an authorized 
governmental agency to perform an administration of criminal justice 
function (privatization). (In addition to the above changes, the FBI is 
currently reviewing additional changes to better describe new 
capabilities and practices, to be promulgated in a future notice.) 
Revisions to 28 CFR parts 0, 16, 20 and 50 which underlie these changes 
are being implemented in the Rules section of today's Federal Register.
    The Privacy Act (5 U.S.C. 552a (e)(4) and (11)) requires that the 
public be given 30 days in which to comment on any new or intended uses 
of information in a system of records. In addition, OMB, which has 
oversight responsibilities under the Act, requires that OMB and the 
Congress be given 40 days in which to review major changes to the 
system.
    Therefore, the public, OMB, and the Congress are invited to submit 
written comments to Mary E. Cahill, Management Analyst, Management and 
Planning Staff, Justice Management Division, Department of Justice, 
1400 National Place, Washington, DC 20530.
    In accordance with Privacy Act requirements (5 U.S.C. 552a(r)), the 
Department of Justice has provided a report on the modified system to 
OMB and the Congress.

    Dated: July 27, 1999.

Stephen R. Colgate,
Assistant Attorney General for Administration.
JUSTICE/FBI 001
            System name:
    National Crime Information Center (NCIC).
            System location:
    Federal Bureau of Investigation, Criminal Justice Information 
Services (CJIS) Division, 1000 Custer Hollow Road, Clarksburg, WV 
26306.
            Categories of individuals covered by the system:
    A. Wanted Persons:
    1. Individuals for whom federal warrants are outstanding.
    2. Individuals who have committed or have been identified with an 
offense which is classified as a felony or serious misdemeanor under 
the existing penal statutes of the jurisdiction originating the entry 
and for whom a felony or misdemeanor warrant has been issued with 
respect to the offense which was the basis of the entry. Probation and 
parole violators meeting the foregoing criteria.
    3. A ``Temporary Felony Want'' may be entered when a law 
enforcement agency has need to take prompt action to establish a 
``want'' entry for the apprehension of a person who has committed, or 
the officer has reasonable grounds to believe has committed, a felony 
and who may seek refuge by fleeing across jurisdictional boundaries and 
circumstances preclude the immediate procurement of a felony warrant. A 
``Temporary Felony Want'' shall be specifically identified as such and 
subject to verification and support by a proper warrant within 48 hours 
following the entry of a temporary want. The agency originating the 
``Temporary Felony Want'' shall be responsible for subsequent 
verification or re-entry of a permanent want.
    4. Juveniles who have been adjudicated delinquent and who have 
escaped or absconded from custody, even though no arrest warrants were 
issued. Juveniles who have been charged with the commission of a 
delinquent act that would be a crime if committed by an adult, and who 
have fled from the state where the act was committed.
    5. Individuals who have committed or have been identified with an 
offense committed in a foreign country, which would be a felony if 
committed in the United States, and for whom a warrant of arrest is 
outstanding and for which act an extradition treaty exists between the 
United States and that country.
    6. Individuals who have committed or have been identified with an 
offense committed in Canada and for whom a Canada-Wide Warrant has been 
issued which meets the requirements of the Canada-U.S. Extradition 
Treaty, 18 U.S.C. 3184.
    B. Individuals who have been charged with serious and/or 
significant offenses:
    1. Individuals who have been fingerprinted and whose criminal 
history record information has been obtained.
    2. Violent Felons: Persons with three or more convictions for a 
violent felony or serious drug offense as defined by 18 U.S.C. 924(e).
    C. Missing Persons:
    1. A person of any age who is missing and who is under proven 
physical/mental disability or is senile, thereby subjecting that person 
or others to personal and immediate danger.
    2. A person of any age who is missing under circumstances 
indicating that the disappearance was not voluntary.
    3. A person of any age who is missing under circumstances 
indicating that that person's physical safety may be in danger.
    4. A person of any age who is missing after a catastrophe.
    5. A person who is missing and declared unemancipated as defined by 
the laws of the person's state of residence and does not meet any of 
the entry criteria set forth in 1-4 above.
    D. Individuals designed by the U.S. Secret Service as posing a 
potential danger to the President and/or other authorized protectees.
    E. Members of Violent Criminal Gangs: Individuals about whom 
investigation has developed sufficient information to establish 
membership in a particular violent criminal gang by either:
    1. Self admission at the time of arrest or incarceration, or
    2. Any two of the following criteria:
    a. Identified as a gang member by a reliable informant;
    b. Identified as a gang member by an informant whose information 
has been corroborated;
    c. Frequents a gang's area, associates with known members, and/or 
affects gang dress, tattoos, or hand signals;
    d. Has been arrested multiple times with known gang members for 
offenses consistent with gang activity; or
    e. Self admission (other than at the time of arrest or 
incarceration).
    F. Members of Terrorist Organizations: Individuals about whom 
investigation has developed sufficient information to establish 
membership in a particular terrorist organization using the same 
criteria listed above in paragraph E, items 1 and 2 a-e, as they apply 
to members of terrorist organizations rather than members of violent 
criminal gangs.
    G. Unidentified Persons:
    1. Any unidentified deceased person.
    2. Any person who is living, but whose identify has not been 
ascertained (e.g., infant, amnesia victim).
    3. Any unidentified catastrophe victim.
    4. Body parts when a body has been dismembered.
            Categories of records in the system:
    A. Stolen Vehicle File:
    1. Stolen vehicles.
    2. Vehicles wanted in conjunction with felonies or serious 
misdemeanors.
    3. Stolen vehicle parts including certificates of origin or title.
    B. Stolen License Plate File.
    C. Stolen Boat File.
    D. Stolen Gun File:
    1. Stolen guns.
    2. Recovered guns, when ownership of which has not been 
established.
    E. Stolen Article File.
    F. Securities File:
    1. Serially numbered stolen, embezzled, or counterfeited 
securities.
    2. ``Securities'' for present purposes of this file are currency 
(e.g., bills, bank notes) and those documents or certificates which 
generally are considered to be evidence of debt (e.g., bonds, 
debentures, notes) or ownership of property (e.g., common stock, 
preferred stock), and documents which represent subscription rights, 
warrants and which are of the types traded in the securities exchanges 
in the United States, except for commodities futures. Also included are 
warehouse receipts, travelers checks and money orders.
    G. Wanted Person File: Described in ``Categories of individuals 
covered by the system: A. Wanted Persons, 1-4.''
    H. Foreign Fugitive File: Identification data regarding persons who 
are fugitives from foreign countries, who are described in ``Categories 
of individuals covered by the system: A. Wanted Persons, 5 and 6.''
    I. Interstate Identification Index File: A cooperative federal-
state program for the interstate exchange of criminal history record 
information for the purpose of facilitating the interstate exchange of 
such information among criminal justice agencies: Described in 
``Categories of individuals covered by the system: B. 1.''
    J. Identification records regarding persons enrolled in the United 
States Marshals Service Witness Security Program who have been charged 
with serious and/or significant offenses. Described in ``Categories of 
individuals covered by the system: B.''
    K. Bureau of Alcohol, Tobacco, and Firearms (BATF) Violent Felon 
File: Described in ``Categories of individuals covered by the system: 
B.2.''
    L. Missing Person File: Described in ``Categories of individuals 
covered by the system: C. Missing Persons.''
    M. U.S. Secret Service Protective File: Described in ``Categories 
of individuals covered by the system: D.''
    N. Violent Criminal Gang File: A cooperative federal-state program 
for the interstate exchange of criminal gang information. For the 
purpose of this file, a ``gang'' is defined as a group of three or more 
persons with a common interest, bond, or activity characterized by 
criminal delinquent conduct. Described in ``Categories of individuals 
covered by the system: E. Members of Violent Criminal Gangs.''
    O. Terrorist File: A cooperative federal-state program for the 
exchange of information about terrorist organizations and individuals. 
For the purposes of this file, ``terrorism'' is defined as activities 
that involve violent acts or acts dangerous to human life that are a 
violation of the criminal laws of the United States or any state or 
would be a criminal violation if committed within the jurisdiction of 
the United States or any states, which appear to be intended to:
    1. Intimidate or coerce a civilian population,
    2. Influence the policy of a government by intimidation or 
coercion, or
    3. Affect the conduct of a government by crimes or kidnaping. 
Described in ``Categories of individuals covered by the system: F. 
Members of Terrorist Organizations.''
    P. Unidentified Person File: Described in ``Categories of 
individuals covered by the system: G. Unidentified Persons.''
            Authority for maintenance of the system:
    The system is established and maintained in accordance with 28 
U.S.C. 534; 28 CFR part 20; Department of Justice Appropriation Act, 
1973, Pub. L. 92-544, 86 Stat. 1115; Securities Acts Amendment of 1975, 
Pub. L. 94-29, 89 Stat. 97; and 18 U.S.C. 924 (e). Exec. Order No. 
10450, 3 CFR (1974).
            Purpose(s):
    The purpose for maintaining the NCIC system of records is to 
provide a computerized data base for ready access by a criminal justice 
agency making an inquiry and for prompt disclosure of information in 
the system from other criminal justice agencies about crimes and 
criminals. This information assists authorized agencies in criminal 
justice objectives, such as apprehending fugitives, locating missing 
persons, locating and returning stolen property, as well as in the 
protection of the law enforcement officers encountering the individuals 
described in the system.
            Routine uses of records maintained in the system, including 
                    categories of users and the purposes of such uses:
    Data in NCIC files is exchanged with and for the official use of 
authorized officials of the federal government, the states, cities, 
penal and other institutions, and certain foreign governments. The data 
is exchanged most frequently, but not exclusively, through NCIC lines 
to federal criminal justice agencies, criminal justice agencies in the 
50 states, the District of Columbia, Puerto Rico, U.S. Possessions, 
U.S. Territories, and certain authorized foreign and international 
criminal justice agencies. Criminal history data is disseminated to 
non-criminal justice agencies for use in connection with licensing for 
local/state employment or other uses, but only where such dissemination 
is authorized by federal or state statute and approved by the Attorney 
General of the United States.
    Data in NCIC files, other than the information described in 
``Categories of records in the system: I, J, K, M, N, and O'' is 
disseminated to:
    (1) A nongovernmental agency or subunit thereof which allocates a 
substantial part of its annual budget to the administration of criminal 
justice, whose regularly employed peace officers have full police 
powers pursuant to state law and have complied with the minimum 
employment standards of governmentally employed police officers as 
specified by state statute;
    (2) A noncriminal justice governmental department of motor vehicle 
or driver's license registry established by a statute, which provides 
vehicle registration and driver record information to criminal justice 
agencies;
    (3) A governmental regional dispatch center, established by a state 
statute, resolution, ordinance or Executive order, which provides 
communications services to criminal justice agencies; and
    (4) The National Insurance Crime Bureau (NICB), a nongovernmental 
nonprofit agency which acts as a national clearinghouse for information 
on stolen vehicles and offers free assistance to law enforcement 
agencies concerning automobile thefts, identification and recovery of 
stolen vehicles.
    Disclosures of information from this system, as described in (1) 
through (4) above, are for the purpose of providing information to 
authorized agencies to facilitate the apprehension of fugitives, the 
location of missing persons, the location and/or return of stolen 
property, or similar criminal justice objectives.
    Information on missing children, missing adults who were reported 
missing while children, and unidentified living and deceased persons 
may be disclosed to the National Center for Missing and Exploited 
Children (NCMEC). The NCMEC is a nongovernmental, nonprofit, federally 
funded corporation, serving as a national resource and technical 
assistance clearinghouse focusing on missing and exploited children. 
Information is disclosed to NCMEC to assist it in its efforts to 
provide technical assistance and education to parents and local 
governments regarding the problems of missing and exploited children, 
and to operate a nationwide missing children hotline to permit members 
of the public to telephone the Center from anywhere in the United 
States with information about a missing child.
    System records may be disclosed to criminal justice agencies for 
the conduct of background checks under the National Instant Criminal 
Background Check System (NICS).
    System records may be disclosed to noncriminal justice governmental 
agencies performing criminal justice dispatching functions or data 
processing/information services for criminal justice agencies.
    System records may be disclosed to private contractors pursuant to 
a specific agreement with a criminal justice agency or a noncriminal 
justice governmental agency performing criminal justice dispatching 
functions or data processing/information services for criminal justice 
agencies to provide services for the administration of criminal justice 
pursuant to that agreement. The agreement must incorporate a security 
addendum approved by the Attorney General of the United States, which 
shall specifically authorize access to criminal history record 
information, limit the use of the information to the purposes for which 
it is provided, ensure the security and confidentiality of the 
information, provide for sanctions, and contain such other provisions 
as the Attorney General may require. The power and authority of the 
Attorney General hereunder shall be exercised by the FBI Director (or 
the Director's designee).
    In addition, information may be released to the news media and the 
public pursuant to 28 CFR 50.2, unless it is determined that release of 
the specific information in the context of a particular case would 
constitute an unwarranted invasion of personal privacy;
    System records may be disclosed to a Member of Congress or staff 
acting on the member's behalf when the member or staff requests the 
information on behalf of and at the request of the individual who is 
the subject of the record; and,
    System records may be disclosed to the National Archives and 
Records Administration and the General Services Administration for 
records management inspections conducted under the authority of 44 
U.S.C. 2904 and 2906.
            Policies and practices for storing, retrieving, accessing, 
                    retaining, and disposing of records in the system:
            Storage:
    Information maintained in the NCIC system is stored electronically 
for use in a computer environment.
            Retrievability:
    On line access to data in NCIC is achieved by using the following 
search descriptors:
    A. Stolen Vehicle File:
    1. Vehicle identification number;
    2. Owner applied number;
    3. License plate number;
    4. NCIC number (unique number assigned by NCIC computer to each 
NCIC record.)
    B. Stolen License Plate File:
    1. License plate number;
    2. NCIC number.
    C. Stolen Boat File:
    1. Registration document number;
    2. Hull serial number;
    3. Owner applied number;
    4. NCIC number.
    D. Stolen Gun File:
    1. Serial number of gun;
    2. NCIC number.
    E. Stolen Article File:
    1. Serial number of article;
    2. Owner applied number;
    3. NCIC number.
    F. Securities File:
    1. Type, serial number, denomination of security, and issuer for 
other than U.S. Treasury issues and currency;
    2. Type of security and name of owner of security;
    3. Social Security number of owner of security (it is noted the 
requirements of the Privacy Act with regard to the solicitation of 
Social Security numbers have been brought to the attention of the 
members of the NCIC system);
    4. NCIC number.
    G. Wanted Person File:
    1. Name and one of the following numerical identifiers:
    a. Date of birth;
    b. FBI number (number assigned by the Federal Bureau of 
Investigation to an arrest fingerprint record);
    c. Social Security number (it is noted the requirements of the 
Privacy Act with regard to the solicitation of Social Security numbers 
have been brought to the attention of the members of the NCIC system);
    d. Operator's license number (driver's number);
    e. Miscellaneous identifying number (military number or number 
assigned by federal, state, or local authorities to an individual's 
record);
    f. Originating agency case number;
    2. Vehicle or license plate known to be in the possession of the 
wanted person;
    3. NCIC number.
    H. Foreign Fugitive File: See G, above.
    I. Interstate Identification Index File:
    1. Name, sex, race, and date of birth;
    2. FBI number;
    3. State identification number;
    4. Social Security number;
    5. Miscellaneous identifying number.
    J. Witness Security Program File: See G, above.
    K. BATF Violent Felon File: See G, above.
    L. Missing Person file: See G, above, plus the age, sex, race, 
height and weight, eye and hair color of the missing person.
    M. U.S. Secret Service Protective File: See G, above.
    N. Violent Criminal Gang File: See G, above.
    O. Terrorist File: See G, above.
    P. Unidentified Person File: The age, sex, race, height and weight, 
eye and hair color of the unidentified person.
            Safeguards:
    Data stored in the NCIC is documented criminal justice agency 
information and access to that data is restricted to duly authorized 
users. The following security measures are the minimum to be adopted by 
all authorized users having access to the NCIC.
    Interstate Identification Index (III) File. These measures are 
designed to prevent unauthorized access to the system data and/or 
unauthorized use of data obtained from the computerized file.
    1. Computer Center.
    a. The authorized user's computer site must have adequate physical 
security to protect against any unauthorized personnel gaining access 
to the computer equipment or to any of the stored data.
    b. Since personnel at these computer centers can have access to 
data stored in the system, they must be screened thoroughly under the 
authority and supervision of an NCIC control terminal agency. (This 
authority and supervision may be delegated to responsible criminal 
justice agency personnel in the case of a satellite computer center 
being serviced through a state control terminal agency.) This screening 
will also apply to non-criminal justice maintenance or technical 
personnel.
    c. All visitors to these computer centers must be accompanied by 
staff personnel at all times.
    d. Computers having access to the NCIC must have the proper 
computer instructions written and other built-in controls to prevent 
criminal history data from being accessible to any terminals other than 
authorized terminals.
    e. Computers having access to the NCIC must maintain a record of 
all transactions against the criminal history file in the same manner 
the NCIC computer logs all transactions. The NCIC identifies each 
specific agency entering or receiving information and maintains a 
record of those transactions. This transaction record must be monitored 
and reviewed on a regular basis to detect any possible misuse of 
criminal history data.
    f. Each State Control terminal shall build its data system around a 
central computer, through which each inquiry must pass for screening 
and verification. The configuration and operation of the center shall 
provide for the integrity of the data base.
    2. Communications:
    a. Lines/channels being used to transmit criminal history 
information must be dedicated solely to criminal justice, i.e., there 
must be no terminals belonging to agencies outside the criminal justice 
system sharing these lines/channels.
    b. Physical security of the lines/channels must be protected to 
guard against clandestine devices being utilized to intercept or inject 
system traffic.
    3. Terminal Devices Having Access to NCIC:
    a. All authorized users having terminal on this system must be 
required to physically place theses terminals in secure locations 
within the authorized agency.
    b. The authorized users having terminals with access to criminal 
history must screen terminal operators and restrict access to the 
terminal to a minimum number of authorized employees.
    c. Copies of criminal history data obtained from terminal devices 
must be afforded security to prevent any unauthorized access to or use 
of the data.
    d. All remote terminals on NCIS III will maintain a manual or 
automatedlog of computerized criminal history inquiries with notations 
of individuals making requests for records for a minimum of one year.
            Retention and disposal:
    Unless otherwise removed, records will be retained in files as 
follows:
    A. Vehicle File:
    a. Unrecovered stolen vehicle records (including snowmobile 
records) which do not contain vehicle identification numbers (VIN) or 
Owner-applied number (OAN) therein, will be purged from file 90 days 
after date of entry. Unrecovered stolen vehicle records (including 
snowmobile records) which contain VINS or OANs will remain in file for 
the year of entry plus 4.
    b. Unrecovered vehicles wanted in conjunction with a felony will 
remain in file for 90 days after entry. In the event a longer retention 
period is desired, the vehicle must be reentered.
    c. Unrecovered stolen VIN plates, certificates of origin or title, 
and serially numbered stolen vehicle engines or transmissions will 
remain in file for the year of entry plus 4. (Job No. NC1-65-82-4, Part 
E. 13 h.(12 )
    B. License Plate File: Unrecovered stolen license plates will 
remain in file for one year after the end of the plate's expiration 
year as shown in the record. (Job no. NC1-65-82-4, Part E. 13 h. (2) )
    C. Boat file: Unrecovered stolen boat records, which contain a hull 
serial number or an OAN, will be retained in file for the balance of 
the year entered plus 4. Unrecovered stolen boat records which do not 
contain a hull serial number or an OAN will be purged from file 90 days 
after date of entry. (Job No. NC1-65-82-4, Part E. 13 h. (6))
    D. Gun File:
    a. Unrecovered weapons will be retained in file for an indefinite 
period until action is taken by the originating agency to clear the 
record.
    b. Weapons entered in file as ``recovered'' weapons will remain in 
file for the balance of the year entered plus 2. (Job No. NC1-65-82-4, 
Part E. 13 h. (3))
    E. Article File: Unrecovered stolen articles will be retained for 
the balance of the year entered plus one year. (Job No. NC1-65-82-4, 
Part E. 13 h. (4))
    F. Securities File: Unrecovered stolen, embezzled or counterfeited 
securities will be retained for the balance of the year entered plus 4, 
except for travelers checks and money orders, which will be retained 
for the balance of the year entered plus 2. (Job No. NC1-65-82-4, Part 
E. 13 h. (5))
    G. Wanted Person File: Person not located will remain in file 
indefinitely until action is taken by the originating agency to clear 
the record (except ``Temporary Felony Wants'', which will be 
automatically removed from the file after 48 hours''. (Job No. NC1-65-
87-114, Part E. 13 h. (7))
    H. Foreign Fugitive File: Person not located will remain in file 
indefinitely until action is taken by the originating agency to clear 
the record.
    I. Interstate Identification Index File: When an individual reaches 
age of 99. (Job No. N1-65-95-03)
    J. Witness Security Program File: Will remain in file until action 
is taken by the U.S. Marshals Service to clear or cancel the records.
    K. BATF Violent Felon File: Will remain in file until action is 
taken by the BATF to clear or cancel the records.
    L. Missing Persons File: Will remain in the file until the 
individual is located or action is taken by the originating agency to 
clear the record. (Job No. NC1-65-87-11, Part E 13h (8))
    M.U.S. Secret Service Protective File: Will be retained until names 
are removed by the U.S. Secret Service.
    N. Violent Criminal Gang File: Records will be subject to mandatory 
purge if inactive for five years.
    O. Terrorist File: Records will be subject to mandatory purge if 
inactive for five years.
    P. Unidentified Person File: Will be retained for the remainder of 
the year of entry plus 9.
            System manager(s) and address:
    Director, Federal Bureau of investigation, J. Edgar Hoover 
Building, 935 Pennsylvania Avenue, NW., Washington, DC 20535-0001.
            Notification procedure:
    Same as the above.
            Record access procedures:
    It is noted the Attorney General has exempted this system from the 
access and contest procedures of the Privacy Act. However, the 
following alternative procedures are available to a requester. The 
procedures by which an individual may obtain a copy of his or her 
criminal history record from a state or local criminal justice agency 
are detailed in 28 CFR 20.34 appendix and are essentially as follows:
    If an individual has a criminal record supported by fingerprints 
and that record has been entered in the III System, it is available to 
that individual for review, upon presentation of appropriate 
identification and in accordance with applicable state and federal 
administrative and statutory regulations.
    Appropriate identification includes being fingerprinted for the 
purpose of insuring that the individual is who the individual purports 
to be. The record on file will then be verified through comparison of 
fingerprints.
    Procedure:
    1. All requests for review must be made by the subject of the 
record through a law enforcement agency which has access to the III 
System. That agency within statutory or regulatory limits can require 
additional identification to assist in securing a positive 
identification.
    2. If the cooperating law enforcement agency can make an 
identification with fingerprints previously taken which are on file 
locally and if the FBI identification number of the individual's record 
is available to that agency, it can make an on-line inquiry through 
NCIC to obtain the III System record or, if it does not have suitable 
equipment to obtain an on-line response, obtain the record from 
Clarksburg, West Virginia, by mail. The individual will then be 
afforded the opportunity to see that record.
    3. Should the cooperating law enforcement agency not have the 
individual's fingerprints on file locally, it is necessary for that 
agency to relate the prints to an existing record by having the 
identification prints compared with those already on file in the FBI, 
or, possibly, in the state's central identification agency.
    The procedures by which an individual may obtain a copy of his or 
her criminal history record from the FBI are set forth in 28 CFR 16.30-
16.34.
            Contesting record procedures:
    The Attorney General has exempted this system from the contest 
procedures of the Privacy Act. Under the alternative procedures 
described above under ``Record Access Procedures,'' the subject of the 
requested record shall request the appropriate arresting agency, court, 
or correctional agency to initiate action necessary to correct any 
stated inaccuracy in subject's record or provide the information needed 
to make the record complete. The subject of a record may also direct 
his/her challenge as to the accuracy or completeness of any entry on 
his/her record to the FBI, Criminal Justice Information Services (CJIS) 
Division, ATTN: SCU, Mod. D-2, 1000 Custer Hollow Road, Clarksburg, WV 
26306. The FBI will then forward the challenge to the agency which 
submitted the data requesting that agency to verify or correct the 
challenged entry. Upon the receipt of an official communication 
directly from the agency which contributed the original information, 
the FBI CJIS Division will make any changes necessary in accordance 
with the information supplied by that agency.
            Record source categories:
    Information contained in the NCIC system is obtained from local, 
state, tribal, federal, foreign, and international criminal justice 
agencies.
            Systems exempted from certain provisions of the act:
    The Attorney General has exempted this system from subsection 
(c)(3) and (4); (d); (e)(1), (2), and (3); (e)(4)(G) and (H), (e)(8) 
and (g) of the Privacy Act pursuant to 5 U.S.C. 552a(j)(2) and (k)(3). 
Rules have been promulgated in accordance with the requirements of 5 
U.S.C. 553(b), (c) and (e) and have been published in the Federal 
Register.
                                 ______
                                 

    [From the Federal Register, Vol. 63, No. 34, February 20, 1998]

                         DEPARTMENT OF JUSTICE
[AAG/A Order No. 146-97]

Privacy Act of 1974; Notice of Modified Systems of Records

    Pursuant to the Privacy Act of 1974 (5 U.S.C. 552a), the Department 
proposes to modify the following Privacy Act systems of records:

    Antitrust Information Management System (AMIS)--Matter Report, 
Justice/ATR-006 (previously published on October 17, 1988 at 53 FR 
40502)
    Central Civil Rights Division Index File and Associated Records, 
Justice/CRT-001 (previously published on May 17, 1993 at 58 FR 28896)
    Central Criminal Division Index File and Associated Records, 
Justice/CRM-001 (previously published on December 11, 1987 at 53 FR 
47186)
    Civil Division Case File System, Justice/CIV-001 (previously 
published on October 17, 1988 at 53 FR 40504)
    Civil Case Files, Justice/USA-005 (previously published on January 
22, 1988 at 53 FR 1864)
    Criminal Case Files, Justice/USA-007 (previously published on 
January 22, 1988 at 53 FR 1861)
    FBI Central Records System, Justice/FBI-002 (previously published 
on October 5, 1993 at 58 FR 51858)
    Tax Division Central Classification Cards, Index Docket Cards, and 
Associated Records--Criminal Tax Cases, Justice/TAX-001 (previously 
published on September 30, 1977 at 42 FR 53389)
    Tax Division Central Classification Cards, Index Docket Cards, and 
Associated Records--Civil Tax Cases, Justice/TAX-002 (previously 
published on September 30, 1977 at 42 FR 53390)

    The Department proposes to add a new routine use disclosure to all 
of the above-named systems of records. The routine use will permit 
disclosure of health care-related information obtained during health-
care related investigations. In addition, the Department proposes to 
add an additional routine use disclosure to the Central Civil Rights 
Division Index File and Associated Records system to permit the 
disclosure of information regarding the progress and results of 
investigations to the complainants and/or victims involved. The 
proposed disclosures have been italicized for the reader's convenience. 
The modified systems of records are printed below.
    Title 5 U.S.C. 552a(e)(4) and (11) provide that the public be given 
a 30-day period in which to comment on proposed new routine use 
disclosures. The Office of Management and Budget (OMB), which has 
oversight responsibilities under the Act, requires a 40-day period in 
which to conclude its review of the new routine uses.
    Therefore, please submit any comments by March 23, 1998. The 
public, OMB, and the Congress are invited to send written comments to 
Patricia E. Neely, Program Analyst, Information Management and Security 
Staff, Justice Management Division, Department of Justice, Washington, 
DC 20530 (Room 850, WCTR Building).
    In accordance with 5 U.S.C. 552a(r), the Department has provided a 
report to OMB and the Congress on the proposed modification.

    Dated: December 31, 1997.

Stephen R. Colgate,
Assistant Attorney General for Administration.
          * * * * * * *
JUSTICE/FBI-002
            System name:
    The FBI Central Records System.
            System location:
    a. Federal Bureau of Investigation, J. Edgar Hoover Building, 10th 
and Pennsylvania Avenue, NW, Washington DC 20535; b. 56 field divisions 
(see Appendix); c. 16 Legal Attache (see Appendix).
            Categories of individuals covered by the system:
    a. Individuals who relate in any manner to official FBI 
investigations including, but not limited to subjects, suspects, 
victims, witnesses, and close relatives and associates who are relevant 
to an investigation.
    b. Applicants for and current and former personnel of the FBI and 
persons related thereto who are considered relevant to an applicant 
investigation, personnel inquiry, or other personnel matters.
    c. Applicants for and appointees to sensitive positions in the 
United States Government and persons related thereto who are considered 
relevant to the investigation.
    d. Individuals who are the subject of unsolicited information, who 
offer unsolicited information, request assistance, and make inquiries 
concerning record material, including general correspondence, and 
contacts with other agencies, businesses, institutions, clubs; the 
public and the news media.
    e. Individuals associated with administrative operations or 
services including pertinent functions, contractors and pertinent 
persons related thereto. (All manner of information concerning 
individuals may be acquired in connection with and relating to the 
varied investigative responsibilities of the FBI which are further 
described in ``CATEGORIES OF RECORDS IN THE SYSTEM.'' Depending on the 
nature and scope of the investigation this information may include, 
among other things, personal habits and conduct, financial information, 
travel and organizational affiliation of individuals. The information 
collected is made a matter of record and placed in FBI files.)
            Categories of records in the system:
    The FBI Central Records Systems--The FBI utilizes a central records 
system of maintaining its investigative, personnel, applicant, 
administrative, and general files. This system consists of one 
numerical sequence of subject matter files, an alphabetical index to 
the files, and a supporting abstract system to facilitate processing 
and accountability of all important mail placed in files. This abstract 
system is both a textual and an automated capability for locating mail. 
Files kept in FBI field offices are also structured in the same manner, 
except they do not utilize an abstract system.
    The 281 classifications used by the FBI in its basic filing system 
pertain primarily to Federal violations over which the FBI has 
investigative jurisdiction. However, included in the 281 
classifications are personnel, applicant, and administrative matters to 
facilitate the overall filing scheme. These classifications are as 
follows (the word ``obsolete'' following the name of the classification 
indicates the FBI is no longer initiating investigative cases in these 
matters, although the material is retained for reference purposes):
    1. Training Schools; National Academy Matters: FBI National Academy 
Applicants. Covers general information concerning the FBI National 
Academy, including background investigations of individual candidates.
    2. Neutrality Matters. Title 18, United States Code, Sections 956 
and 958 962; Title 22, United States Code, Sections 1934 and 401.
    3. Overthrow or Destruction of the Government. Title 18, United 
States Code, Section 2385.
    4. National Firearms Act, Federal Firearms Act; State Firearms 
Control Assistance Act; Unlawful Possession or Receipt of Firearms. 
Title 26, United States Code, Sections 5801-5812; Title 18, United 
States Code, Sections 921-928; Title 18, United States Code, Sections 
1201-1203.
    5. Income Tax. Covers violations of Federal income tax laws 
reported to the FBI. Complaints are forwarded to the Commissioner of 
the Internal Revenue Service.
    6. Interstate Transportation of Strikebreakers. Title 18, United 
States Code, Section 1231.
    7. Kidnapping. Title 28, United States Code, Sections 1201 and 
1202.
    8. Migratory Bird Act. Title 18, United States Code, Section 43; 
Title 16, United States Code, Section 703 through 718.
    9. Extortion. Title 18, United States Code, Sections 876, 877, 875, 
and 873.
    10. Red Cross Act. Title 18, United States Code, Sections 706 and 
917.
    11. Tax (Other than Income). This classification covers complaints 
concerning violations of Internal Revenue law as they apply to other 
than alcohol, social security and income and profits taxes, which are 
forwarded to the Internal Revenue Service.
    12. Narcotics. This classification covers complaints received by 
the FBI concerning alleged violations of Federal drug laws. Complaints 
are forwarded to the headquarters of the Drug Enforcement 
Administration (DEA), or the nearest district office of DEA.
    13. Miscellaneous. Section 125, National Defense Act, Prostitution; 
Selling Whiskey Within Five Miles of An Army Camp, 1920 only. Subjects 
were alleged violators of abuse of U.S. flag, fraudulent enlistment, 
selling liquor and operating houses of prostitution within restricted 
bounds of military reservations. Violations of Section 13 of the 
Selective Service Act (Conscription Act) were enforced by the 
Department of Justice as a war emergency measure with the Bureau 
exercising jurisdiction in the detection and prosecution of cases 
within the purview of that Section.
    14. Sedition. Title 18, United States Code, Sections 2387, 2388, 
and 2391.
    15. Theft from Interest Shipment. Title 18, United States Code, 
Section 859; Title 18, United States Code, Section 660; Title 18 United 
States Code, Section 2117.
    16. Violations of Federal Injunction (obsolete). Consolidated into 
Classification 69, ``Contempt of Court''.
    17. Fraud Against the Government, Department of Veterans Affairs, 
Department of Veterans Affairs Matters. Title 18, United States Code, 
Section 287, 289, 290, 371, or 1001, and Title 38, United States Code, 
Sections 787(a), 787(b), 3405, 3501, and 3502.
    18. May Act. Title 18, United States Code, Section 1384.
    19. Censorship Matter (obsolete). Pub. L. 77th Congress.
    20. Federal Grain Standards Act (obsolete) 1920 only. Subjects were 
alleged violators of contracts for sale. Shipment of Interstate 
Commerce, Section 5, U.S. Grain Standards Act.
    21. Food and Drugs. This classification covers complaints received 
concerning alleged violations of the Food, Drug and Cosmetic Act; Tea 
Act; Import Milk Act; Caustic Poison Act; and Filled Milk Act. These 
complaints are referred to the Commissioner of the Food and Drug 
Administration of the field component of that Agency.
    22. National Motor Vehicle Traffic Act, 1922-27 (obsolete). 
Subjects were possible violators of the National Motor Vehicle Theft 
Act, Automobiles seized by Prohibitions Agents.
    23. Prohibition. This classification covers complaints received 
concerning bootlegging activities and other violations of the alcohol 
tax laws. Such complaints are referred to the Bureau of Alcohol, 
Tobacco and Firearms, Department of the Treasury, or field 
representatives of the Agency.
    24. Profiteering 1920-42 (obsolete). Subjects are possible 
violators of the Lever Act--Profiteering in food and clothing or 
accused company was subject of file. Bureau conducted investigations to 
ascertain profits.
    25. Selective Service Act; Selective Training and Service Act. 
Title 50, United States Code, Section 462; Title 50, United States 
Code, Section 459.
    26. Interstate Transportation of Stolen Motor Vehicle; Interstate 
Transportation of Stolen Aircraft. Title 18, United States Code, 
Sections 2311 (in part), 2312, and 2313.
    27. Patent Matter. Title 35, United States Code, Sections 104 and 
105.
    28. Copyright Matter. Title 17, United States Code, Sections 104 
and 105.
    29. Bank Fraud and Embezzlement. Title 18, United States Code, 
Sections 212, 213, 215, 334, 655-657, 1004-1006, 1008, 1009, 1014, and 
1306; Title 12, United States Code, Section 1725(g).
    30. Interstate Quarantine Law, 1922-25 (obsolete). Subjects alleged 
violators of Act of February 15, 1893, as amended, regarding interstate 
travel of persons afflicted with infectious diseases. Cases also 
involved unlawful transportation of animals, Act of February 2, 1903. 
Referrals were made to Public Health Service and the Department of 
Agriculture.
    31. White Slave Traffic Act. Title 18, United States Code, Section 
2421-2424.
    32. Identification (Fingerprint) Matters. This classification 
covers general information concerning Identification (fingerprint) 
matters.
    33. Uniform Crime Reporting. This classification covers general 
information concerning the Uniform Crime Reports, a periodic 
compilation of statistics of criminal violations throughout the United 
States.
    34. Violation of Lacy Act. 1922-43. (obsolete) Unlawful 
Transportation and shipment of black bass and fur seal skins.
    35. Civil Service. This classification covers complaints received 
by the FBI concerning Civil Service matters which are referred to the 
Office of Personnel Management in Washington or regional offices of 
that Agency.
    36. Mail Fraud. Title 18, United States Code, Section 1341.
    37. False Claims Against the Government. 1921-22 (obsolete). 
Subjects submitted claims for allotment, vocational training, 
compensation as veterans under the Sweet Bill. Letters were generally 
referred elsewhere (Veterans Bureau). Violators apprehended for 
violation of Article No. 1, War Risk Insurance Act.
    38. Application for Pardon to Restore Civil Rights. 1921-35 
(obsolete). Subjects allegedly obtained their naturalization papers by 
fraudulent means. Cases later referred to Immigration and 
Naturalization Service.
    39. Falsely Claiming Citizenship (obsolete). Title 18, United 
States Code, Sections 911 and 1015(a)(b).
    40. Passport and Visa Matter. Title 18, United States Code, 
Sections 1451-1546.
    41. Explosives (obsolete). Title 50, United States Code, Sections 
121 through 144.
    42. Deserter; Deserter, Harboring. Title 10, United States Code, 
Sections 808 and 885.
    43. Illegal Wearing of Uniforms; False Advertising or Misuse of 
Names, Words, Emblems or Insignia; Illegal Manufacturer, Use, 
Possession, or Sale of Emblems and Insignia; Illegal Manufacture, 
Possession, or Wearing of Civil Defense Insignia; Miscellaneous, 
Forging or Using Forged Certificate of Discharge from Military or Naval 
Service; Miscellaneous, Falsely Making or Forging Naval, Military, or 
Official Pass; Miscellaneous, Forging or Counterfeiting Seal of 
Department or Agency of the United States, Misuse of the Great Seal of 
the United States or of the Seals of the President or the Vice 
President of the United States; Unauthorized Use of ``Johnny Horizon'' 
Symbol; Unauthorized Use of Smokey Bear Symbol. Title 18, United States 
Code, Sections 702, 703, and 704; Title 18, United States Code, 
Sections 701, 705, 707, and 710; Title 36, United States Code, Section 
182; Title 50, Appendix, United States Code, Section 2284; Title 46, 
United States Code, Section 249; Title 18, United States Code, Sections 
498, 499, 506, 709, 711, 711a, 712, 713, and 714; Title 12, United 
States Code, Sections 1457 and 1723a; Title 22, United States Code, 
Section 2518.
    44. Civil Rights; Civil Rights, Election Laws, Voting Rights Act, 
1965, Title 18, United States Code, Sections 241, 242, and 245; Title 
42, United States Code, Section 1973; Title 18, United States Code, 
Section 243; Title 18, United States Code, Section 244, Civil Rights 
Act--Federally Protected Activities; Civil Rights Act--Overseas 
Citizens Voting Rights Act of 1975.
    45. Crime on the High Seas (includes stowaways on boats and 
aircraft). Title 18, United States Code, Sections 7, 13, 1243, and 
2199.
    46. Fraud Against the Government (includes Department of Health, 
Education and Welfare; Department of Labor (CETA), and Miscellaneous 
Government Agencies), Anti-Kickback Statute; Department Assistance Act 
of 1950; False Claims, Civil; Federal-Aid Road Act; Lead and Zinc Act; 
Public Works and Economic Development Act of 1965; Renegotiation Act, 
Criminal; Renegotiation Act, Civil; Trade Expansion Act of 1962; 
Unemployment Compensation Statutes; Economic Opportunity Act, Title 50, 
United States Code, Section 1211 et seq.; Title 31, United States Code, 
Section 231; Title 41, United States Code, Section 119; Title 40, 
United States Code, Section 489.
    47. Impersonation. Title 18, United States Code, Sections 912, 913, 
915, and 916.
    48. Postal. Violation (Except Mail Fraud). This classification 
covers inquiries concerning the Postal Service and complaints 
pertaining to the theft of mail. Such complaints are either forwarded 
to the Postmaster General or the nearest Postal Inspector.
    49. Bankruptcy Fraud. Title 18, United States Code, Sections 151-
155.
    50. Involuntary Servitude and Slavery. U.S. Constitution, 13th 
Amendment; Title 18, United States Code, Sections 1581-1588, 241, and 
242.
    51. Jury Panel Investigations. This classification covers jury 
panel investigations which are requested by the appropriate Assistant 
Attorney General as authorized by 28 U.S.C. 533 and AG memorandum 781, 
dated November 9, 1972. These investigations can be conducted only upon 
such request and consist of an indices and arrest check, and only in 
limited important trials where defendant could have influence over a 
juror.
    52. Theft, Robbery, Embezzlement, Illegal Possession or Destruction 
of Government Property. Title 18, United States Code, Sections 641, 
1024, 1660, 2112, and 2114. Interference With Government 
Communications, Title 18, United States Code, Section 1632.
    53. Excess Profits on Wool. 1918 (obsolete). Subjects possible 
violators of Government Control of Wool Clip Act of 1918.
    54. Customs Laws and Smuggling. This classification covers 
complaints received concerning smuggling and other matters involving 
importation and entry of merchandise into and the exportation of 
merchandise from the United States. Complaints are referred to the 
nearest district office of the U.S. Customs Service or the Commissioner 
of Customs, Washington, DC.
    55. Counterfeiting. This classification covers complaints received 
concerning alleged violations of counterfeiting of U.S. coins, notes, 
and other obligations and securities of the Government. These 
complaints are referred to either the Director, U.S. Secret Service, or 
the nearest office of that Agency.
    56. Election Laws. Title 18, United States Code, Sections 241, 242, 
245, and 591-607; Title 42, United States Code, Section 1973; Title 26, 
United States Code, Sections 9012 and 9042; Title 2, United States 
Code, Sections 431-437, 439, and 441.
    57. War Labor Dispute Act (obsolete). Pub. L. 89--77th Congress.
    58. Corruption of Federal Public Officials. Title 18, United States 
Code, Sections 201-203, 205-211; Public Law 89-4 and 89-136.
    59. World War Adjusted Compensation Act of 1924-44 (obsolete). 
Bureau of Investigation was charged with the duty of investigating 
alleged violations of all sections of the World War Adjusted 
Compensation Act (Pub. L. 472, 69th Congress (H.R. 10277)) with the 
exception of Section 704.
    60. Anti-Trust, Title 15, United States Code, Sections 1-7, 12-27, 
and 13.
    61. Treason or Misprision of Treason. Title 18, United States Code, 
Sections 2381, 2382, 2389, 2390, 756, and 757.
    62. Administrative Inquiries. Misconduct Investigations of Officers 
and Employees of the Department of Justice and Federal Judiciary; 
Census Matters (Title 13, United States Code, Sections 211-214, 221-
224, 304, and 305) Domestic Police Cooperation; Eight-Hour-Day Law 
(Title 40, United States Code, Sections 321, 332, 325a, 326); Fair 
Credit Reporting Act (Title 15, United States Code, Sections 1681q and 
1681r); Federal Cigarette Labeling and Advertising Act (Title 15, 
United States Code, Section 1333); Federal Judiciary Investigations; 
Kickback Racket Act (Title 18, United States Code, Section 874); Lands 
Division Matter, other Violations and/or Matters; Civil Suits--
Miscellaneous; Soldiers' and Sailors' Civil Relief Act of 1940 (Title 
50, Appendix, United States Code, Sections 510-590); Tariff Act of 1930 
(Title 19, United States Code, Section 1304); Unreported Interstate 
Shipment of Cigarettes (Title 15, United States Code, Sections 375 and 
376); Fair Labor Standards Act of 1938 (Wages and Hours Law) (Title 29, 
United States Code, Sections 201-219); Conspiracy (Title 18, United 
States Code, Section 371 (formerly Section 88, Title 18, United States 
Code); effective September 1, 1948).
    63. Miscellaneous--Nonsubversive. This classification concerns 
correspondence from the public which does not relate to matters within 
FBI jurisdiction.
    64. Foreign Miscellaneous. This classification is a control file 
utilized as a repository for intelligence information of value 
identified by country. More specific categories are placed in 
classification 108-113.
    65. Espionage. Attorney General Guidelines on Foreign 
Counterintelligence; Internal Security Act of 1950; Executive Order 
11905.
    66. Administrative Matters. This classification covers such items 
as supplies, automobiles, salary matters and vouchers.
    67. Personnel Matters. This classification concerns background 
investigations of applicants for employment with the FBI and folders 
for current and former employees.
    68. Alaskan matters (obsolete). This classification concerns FBI 
investigations in the Territory of Alaska prior to its becoming a 
State.
    69. Contempt of Court. Title 18, United States Code, Sections 401, 
402, 3285, 3691, 3692; Title 10, United States Code. Section 847; and 
Rule 42, Federal Rules of Criminal Procedure.
    70. Crime on Government Reservation. Title 18, United States Code, 
Sections 7 and 13.
    71. Bills of Lading Act, Title 49, United States Code, Section 121.
    72. Obstruction of Criminal Investigations: Obstruction of Justice, 
Obstruction of Court Orders. Title 18, United States Code. Sections 
1503 through 1510.
    73. Application for Pardon After Completion of Sentence and 
Application for Executive Clemency. This classification concerns the 
FBI's background investigation in connection with pardon applications 
and request for executive clemency.
    74. Perjury. Title 18, United States Code, Sections 1621, 1622, and 
1623.
    75. Bondsmen and Sureties. Title 18, United States Code, Section 
1506.
    76. Escaped Federal Prisoner. Escape and Rescue; Probation 
Violator, Parole Violator, Mandatory, Release Violator. Title 18, 
United States Code, Sections 751-757, 1072; Title 18, United States 
Code. Sections 3651-3656; and Title 18, United States Code. Sections 
4202-4207, 5037, and 4161-4166.
    77. Applicants (Special Inquiry, Departmental and Other Government 
Agencies, except those having special classifications). This 
classification covers the background investigations conducted by the 
FBI in connection with the aforementioned positions.
    78. Illegal Use of Government Transportation Requests. Title 18, 
United States Code, Section 287, 495, 508, 641, 1001 and 1002.
    79. Missing Persons. This classification covers the FBI's 
Identification Division's assistance in the locating of missing 
persons.
    80. Laboratory Research Matters. At FBI Headquarters this 
classification is used for Laboratory research matters. In field office 
files this classification covers the FBI's public affairs matters and 
involves contact by the FBI with the general public, Federal and State 
agencies, the Armed Forces, Corporations, the news media and other 
outside organizations.
    81. Gold Hoarding. 1933-45. (obsolete) Gold Hoarding investigations 
conducted in accordance with an Act of March 9, 1933 and Executive 
Order issued August 28, 1933. Bureau instructed by Department to 
conduct no further investigations in 1935 under the Gold Reserve Act of 
1934. Thereafter, all correspondence referred to Secret Service.
    82. War Risk Insurance (National Life Insurance (obsolete)). This 
classification covers investigations conducted by the FBI in connection 
with civil suits filed under this statute.
    83. Court of Claims. This classification covers requests for 
investigations of cases pending in the Court of Claims from the 
Assistant Attorney General in charge of the Civil Division of the 
Department of Justice.
    84. Reconstruction Finance Corporation Act (obsolete). Title 15, 
United States Code, Chapter 14.
    85. Home Owner Loan Corporation (obsolete). This classification 
concerned complaints received by the FBI about alleged violations of 
the Home Owners Loan Act, which were referred to the Home Owners Loan 
Corporation. Title 12, United States Code, Section 1464.
    86. Fraud Against the Government--Small Business Administration. 
Title 15, United States Code, Section 645; Title 18, United States 
Code, Sections 212, 213, 215, 216, 217, 657, 658, 1006, 1011, 1013, 
1014, 1906, 1907, and 1909.
    87. Interstate Transportation of Stolen Property (Heavy Equipment--
Commercialized Theft). Title 18, United States Code, Sections 2311, 
2314, 2315 and 2318.
    88. Unlawful Flight to Avoid Prosecution, Custody, or Confinement; 
Unlawful Flight to Avoid Giving Testimony. Title 18, United States 
Code, Sections 1073 and 1074.
    89. Assaulting or Killing a Federal Officer, Crimes Against Family 
Members, Congressional Assassination Statute, Title 18, United States 
Code, Sections 1111, 1114, 2232.
    90. Irregularities in Federal Penal Institutions. Title 18, United 
States Code, Sections 1791 and 1792.
    91. Bank Burglary, Bank Larceny; Bank Robbery. Title 18, United 
States Code, Section 2113.
    92. Racketeer Enterprise Investigations. Title 18, United States 
Code. Section 3237.
    93. Ascertaining Financial Ability. This classification concerns 
requests by the Department of Justice for the FBI to ascertain a 
person's ability to pay a claim, fine or judgment obtained against him 
by the United States Government.
    94. Research matters. This classification concerns all general 
correspondence of the FBI with private individuals which does not 
involve any substantive violation of Federal law.
    95. Laboratory Cases (Examination of Evidence in Other Than 
Bureau's Cases). The classification concerns non-FBI cases where a duly 
constituted State, county or a municipal law enforcement agency in a 
criminal matter has requested an examination of evidence by the FBI 
Laboratory.
    96. Alien Applicant (obsolete). Title 10, United States Code, 
Section 310.
    97. Foreign Agents Registration Act. Title 18, United States Code, 
Section 951; Title 22, United States Code, Sections 611-621; Title 50, 
United States Code, Sections 851-857.
    98. Sabotage. Title 18, United States Code, Sections 2151-2156; 
Title 50, United States Code, Section 797.
    99. Plant Survey (obsolete). This classification covers a program 
wherein the FBI inspected industrial plants for the purpose of making 
suggestions to the operations of those plants to prevent espionage and 
sabotage.
    100. Domestic Security. This classification covers investigations 
by the FBI in the domestic security field, e.g., Smith Act violations.
    101. Hatch Act (obsolete). Public Law 252, 76th Congress.
    102. Voorhis Act, Title 18, United States Code, Section 1386.
    103. Interstate Transportation of Stolen Livestock, Title 18, 
United States Code, Sections 667, 2311, 2316 and 2317.
    104. Servicemen's Dependents Allowance Act of 1942 (obsolete). 
Public Law 625, 77th Congress, Sections 115-119.
    105. Foreign Counterintelligence Matters. Attorney General 
Guidelines on Foreign Counterintelligence. Executive Order 11905.
    106. Alien Enemy Control; Escaped Prisoners of War and Internees, 
1944-55 (obsolete). Suspects were generally suspected escaped prisoners 
of war, members of foreign organizations, failed to register under the 
Alien Registration Act. Cases ordered closed by Attorney General after 
alien enemies returned to their respective countries upon termination 
of hostilities.
    107. Denaturalization Proceedings (obsolete). This classification 
covers investigation concerning allegations that an individual 
fraudulently swore allegiance to the United States or in some other 
manner illegally obtained citizenship to the U.S. Title 8, United 
States Code, Section 738.
    108. Foreign Travel Control (obsolete). This classification 
concerns security-type investigations wherein the subject is involved 
in foreign travel.
    109. Foreign Political Matters. This classification is a control 
file utilized as a repository for intelligence information concerning 
foreign political matters broken down by country.
    110. Foreign Economic Matters. This classification is a control 
file utilized as a repository for intelligence information concerning 
foreign economic matters broken down by country.
    111. Foreign Social Conditions. This classification is a control 
file utilized as a repository for intelligence information concerning 
foreign social conditions broken down by county.
    112. Foreign Funds. This classification is a control file utilized 
as a repository for intelligence information concerning foreign funds 
broken down by country.
    113. Foreign Military and Naval Matters. This classification is a 
control file utilized as a repository for intelligence information 
concerning foreign military and naval matters broken down by country.
    114. Alien Property Custodian Matter (obsolete). Title 50, United 
States Code, Sections 1 through 38. This classification covers 
investigations concerning ownership and control of property subject to 
claims and litigation under this statute.
    115. Bond Default; Bail Jumper. Title 18, United States Code, 
Sections 3146-3152.
    116. Department of Energy Applicant; Department of Energy, 
Employee. This classification concerns background investigations 
conducted in connection with employment with the Department of Energy.
    117. Department of Energy, Criminal. Title 42, United States Code, 
Sections 2011-2281; Public Law 93-438.
    118. Applicant, Intelligence Agency (obsolete). This classification 
covers applicant background investigations conducted of persons under 
consideration for employment by the Central Intelligence Group.
    119. Federal Regulation of Lobbying Act. Title 2, United States 
Code, ections 261-270.
    120. Federal Tort Claims Act, Title 28, United States Code, 
Sections 2671 to 2680. Investigations are conducted pursuant to 
specific request from the Department of Justice in connection with 
cases in which the Department of Justice represents agencies sued under 
the Act.
    121. Loyalty of Government Employees (obsolete). Executive Order 
9835.
    122. Labor Management Relations Act, 1947. Title 29, United States 
Code, Sections 161, 162, 176-178 and 186.
    123. Section inquiry, State Department, Voice of America (U.S. 
Information Center) (Public Law 402, 80th Congress) (obsolete). This 
classification covers loyalty and security investigations on personnel 
employed by or under consideration for employment for Voice of America.
    124. European Recovery Program Administration, formerly Foreign 
Operations Administration, Economic Cooperation Administration or 
E.R.P., European Recovery Programs; A.I.D. Agency for International 
Development (obsolete). This classification covers security and loyalty 
investigation of personnel employed by or under consideration for 
employment with the European Recovery Program, Public Law 472, 80th 
Congress.
    125. Railway Labor Act; Railway Labor Act--Employer's Liability Act 
Title 45, United States Code, Sections 151-163 and 181-188.
    126. National Security Resources Board, Special Inquiry (obsolete). 
This classification covers loyalty investigations on employees and 
applicants of the National Security Resources Board.
    127. Sensitive Positions in the United States Government, Public 
Law 266 (obsolete). Public Law 81st Congress.
    128. International Development Program (Foreign Operations 
Administration) (obsolete). This classification covers background 
investigations conducted on individuals who are to be assigned to 
duties under the International Development Program.
    129. Evacuation Claims (obsolete). Public Law 886, 80th Congress.
    130. Special Inquiry. Armed Forces Security Act (obsolete). This 
classification covers applicant-type investigations conducted for the 
Armed Forces security agencies.
    131. Admiralty Matter. Title 46, United States Code, Sections 741-
752 and 781-799.
    132. Special Inquiry, Office of Defense Mobilization (obsolete). 
This classification covers applicant-type investigations of individuals 
associated with the Office of Defense Mobilization.
    133. National Science Foundation Act, Applicant (obsolete). Public 
Law 507, 81st Congress.
    134. Foreign Counterintelligence Assets. This classification 
concerns individuals who provide information to the FBI concerning 
Foreign Counterintelligence matters.
    135. PROSAB (Protection of Strategic Air Command Bases of the U.S. 
Air Force (obsolete). This classification covered contacts with 
individuals with the aim to develop information useful to protect bases 
of the Strategic Air Command.
    136. American Legion Contact (obsolete). This classification 
covered liaison contracts with American Legion offices.
    137. Informants. Other than Foreign Counterintelligence Assets. 
This classification concerns individuals who furnish information to the 
FBI concerning criminal violations on a continuing and confidential 
basis.
    138. Loyalty of Employees of the United Nations and Other Public 
International Organizations. This classification concerns FBI 
investigations based on referrals from the Office of Personnel 
Management wherein a question or allegation has been received regarding 
the applicant's loyalty to the U.S. Government as described in 
Executive Order 10422.
    139. Interception of Communications (Formerly, Unauthorized 
Publication or Use of Communications). Title 47, United States Code, 
Section 605; Title 47, United States Code, Section 501; Title 18, 
United States Code, Sections 2510-2513.
    140. Security of Government Employees; Fraud Against the 
Government, Executive Order 10450.
    141. False Entries in Records of Interstate Carriers. Title 47, 
United States Code, Section 220; Title 49, United States Code, Section 
20.
    142. Illegal Use of Railroad Pass. Title 49, United States Code, 
Section 1.
    143. Interstate Transport of Gambling Devices. Title 15, United 
States Code, Sections 1171 through 1180.
    144. Interstate Transportation of Lottery Tickets. Title 18, United 
States Code, Section 1301.
    145. Interstate Transportation of Obscene Materials. Title 18, 
United States Code, Sections 1462, 1464, and 1465.
    146. Interstate Transportation of Prison-Made Goods. Title 18, 
United States Code, Sections 1761 and 1762.
    147. Fraud Against the Government--Department of Housing and Urban 
Development, Matters. Title 18, United States Code, Sections 657, 709, 
1006, and 1010; Title 12, United States Code, Sections 1709 and 1715.
    148. Interstate Transportation of Fireworks. Title 18, United 
States Code, Section 836.
    149. Destruction of Aircraft or Motor Vehicles. Title 18, United 
States Code, Section 31-35.
    150. Harboring of Federal Fugitives, Statistics (obsolete).
    151. (Referral cases received from the Office of Personnel 
Management under Pub. L. 298). Agency for International Development; 
Department of Energy; National Aeronautics and Space Administration; 
National Science Foundation; Peace Corps; Action; U.S. Arms Control and 
Disarmament Agency; World Health Organization; International Labor 
Organization; International Communications Agency. This classification 
covers referrals from the Office of Personnel Management where an 
allegation has been received regarding an applicant's loyalty to the 
U.S. Government. These referrals refer to applicants from Peace Corps; 
Department of Energy, National Aeronautics and Space Administration, 
Nuclear Regulatory Commission, United States Arms Control and 
Disarmament Agency and the International Communications Agency.
    152. Switchblade Knife Act. Title 15, United States Code, Sections 
1241-1244.
    153. Automobile Information Disclosure Act. Title 15, United States 
Code, Sections 1231-1233.
    154. Interstate Transportation of Unsafe Refrigerators. Title 15, 
United States Code, Sections 1211-1214.
    155. National Aeronautics and Space Act of 1958. Title 18, United 
States Code, Section 799.
    156. Employee Retirement Income Security Act. Title 29, United 
States Code, Sections 1021-1029, 1111, 1131, and 1141; Title 18, United 
States Code, Sections 644, 1027, and 1954.
    157. Civil Unrest. This classification concerns FBI responsibility 
for reporting information on civil disturbances or demonstrations. The 
FBI's investigative responsibility is based on the Attorney General's 
Guidelines for Reporting on Civil Disorders and Demonstrations 
Involving a Federal Interest which became effective April 5, 1976.
    158. Labor-Management Reporting and Disclosure Act of 1959 
(Security Matter) (obsolete). Public Law 86-257, Section 504.
    159. Labor-Management Reporting and Disclosure Act of 1959 
(Investigative Matter). Title 29, United States Code, Sections 501, 
504, 522, and 530.
    160. Federal Train Wreck Statute. Title 18, United States Code, 
Section 1992.
    161. Special Inquiries for White House, Congressional Committee and 
Other Government Agencies. This classification covers investigations 
requested by the White House. Congressional committees or other 
Government agencies.
    162. Interstate Gambling Activities. This classification covers 
information acquired concerning the nature and scope of illegal 
gambling activities in each field office.
    163. Foreign Police Cooperation. This classification covers 
requests by foreign police for the FBI to render investigative 
assistance to such agencies.
    164. Crime Aboard Aircraft. Title 49, United States Code, Sections 
1472 and 1473.
    165. Interstate Transmission of Wagering Information. Title 18, 
United States Code, Section 1065.
    166. Interstate Transportation in Aid of Racketeering. Title 18, 
United States Code, Section 1952.
    167. Destruction of Interstate Property. Title 15, United States 
Code, Sections 1281 and 1282.
    168. Interstate Transportation of Wagering Paraphernalia. Title 18, 
United States Code, Section 1953.
    169. Hydraulic Brake Fluid Act (obsolete); 76 Stat. 437, Public Law 
87-637.
    170. Extremist Informants (obsolete). This classification concerns 
individuals who provided information on a continuing basis on various 
extremist elements.
    171. Motor Vehicle Seat Belt Act (obsolete). Pub. L. 88-201, 80th 
Congress.
    172. Sports Bribery. Title 18, United States Code, Section 244.
    173. Public Accommodations. Civil Rights Act of 1964 Public 
Facilities; Civil Rights Act of 1964 Public Education; Civil Rights Act 
of 1964 Employment; Civil Rights Act of 1964. Title 42, United States 
Code, Section 2000; Title 18, United States Code, Section 245.
    174. Explosives and Incendiary Devices; Bomb Threats (Formerly 
Bombing Matters; Bombing Matters, Threats). Title 18, United States 
Code, Section 844.
    175. Assaulting, Kidnapping or Killing the President (or Vice 
President) of the United States. Title 18, United States Code, Section 
1751.
    176. Anti-riot Laws. Title 18, United States Code, Section 245.
    177. Discrimination in Housing. Title 42, United States Code, 
Sections 3601-3619 and 3631.
    178. Interstate Obscene or Harassing Telephone Calls. Title 47, 
United States Code, Section 223.
    179. Extortionate Credit Transactions. Title 18, United States 
Code, Sections 891-896.
    180. Desecration of the Flag. Title 18, United States Code, Section 
700.
    181. Consumer Credit Protection Act. Title 15, United States Code, 
Section 1611.
    182. Illegal Gambling Business: Illegal Gambling Business, 
Obstruction; Illegal Gambling Business Forfeiture. Title 18, United 
States Code, Section 1955; Title 18, United States Code, Section 1511.
    183. Racketeer, Influence and Corrupt Organizations. Title 18, 
United States Code, Sections 1961-1968.
    184. Police Killings. This classification concerns investigations 
conducted by the FBI upon written request from local Chief of Police or 
duty constituted head of the local agency to actively participate in 
the investigation of the killing of a police officer. These 
investigations are based on a Presidential Directive dated June 3, 
1971.
    185. Protection of Foreign Officials and Officials Guests of the 
United States. Title 18, United States Code, Sections 112, 970, 1116, 
1117, and 1201.
    186. Real Estate Settlement Procedures Act of 1974. Title 12, 
United States Code, Section 2602; Title 12, United States Code, Section 
2606, and Title 12, United States Code, Section 2607.
    187. Privacy Act of 1974, Criminal. Title 5, United States Code, 
Section 552a.
    188. Crime Resistance. This classification covers FBI efforts to 
develop new or improved approaches, techniques, systems, equipment and 
devices to improve and strengthen law enforcement as mandated by the 
Omnibus Crime Control and Safe Streets Action of 1968.
    189. Equal Credit Opportunity Act. Title 15, United States Code, 
Section 1691.
    190. Freedom of Information/Privacy Acts. This classification 
covers the creation of a correspondence file to preserve and maintain 
accurate records concerning the handling of requests for records 
submitted pursuant to the Freedom of Information--Privacy Acts.
    191. False Identity Matters. (obsolete) This classification covers 
the FBI's study and examination of criminal elements' efforts to create 
false identities.
    192. Hobbs Act--Financial Institutions; Commercial Institutions 
Armored Carrier. Title 18, United States Code, Section 1951.
    193. Hobbs Act--Commercial Institutions (obsolete). Title 18, 
United States Code, Section 1951; Title 47, United States Code, Section 
506.
    194. Hobbs Act--Corruption of Public Officials. Title 18, United 
States Code, Section 1951.
    195. Hobbs Act--Labor Related. Title 18, United States Code, 
Section 1951.
    196. Fraud by Wire. Title 18, United States Code, Section 1343.
    197. Civil Actions or Claims Against the Government. This 
classification covers all civil suits involving FBI matters and most 
administrative claims filed under the Federal Tort Claims Act arising 
from FBI activities.
    198. Crime on Indian Reservations. Title 18, United States Code, 
Sections 1151, 1152, and 1153.
    199. Foreign Counterintelligence--Terrorism. Attorney General 
Guidelines on Foreign Counterintelligence. Executive Order 11905.
    200. Foreign Counterintelligence Matters. Attorney General 
Guidelines on Foreign Counterintelligence. Executive Order 11905.
    201. Foreign Counterintelligence Matters. Attorney General 
Guidelines on Foreign Counterintelligence. Executive Order 11905.
    202. Foreign Counterintelligence Matters. Attorney General 
Guidelines on Foreign Counterintelligence. Executive Order 11905.
    203. Foreign Counterintelligence Matters. Attorney General 
Guidelines on Foreign Counterintelligence. Executive Order 11905.
    204. Federal Revenue Sharing. This classification covers FBI 
investigations conducted where the Attorney General has been authorized 
to bring civil action whenever he has reason to believe that a pattern 
or practice of discrimination in disbursement of funds under the 
Federal Revenue Sharing status exists.
    205. Foreign Corrupt Practices Act of 1977. Title 15, United States 
Code, Section 78.
    206. Fraud Against the Government--Department of Defense, 
Department of Agriculture, Department of Commerce, Community Services 
Organization, Department of Transportation. (See classification 46 
(supra) for a statutory authority for this and the four following 
classifications.)
    207. Fraud Against the Government--Environmental Protection Agency, 
National Aeronautics and Space Administration, Department of Energy, 
Department of Transportation.
    208. Fraud Against the Government--General Services Administration.
    209. Fraud Against the Government--Department of Health and Human 
Services (Formerly Department of Health, Education, and Welfare).
    210. Fraud Against the Government--Department of Labor.
    211. Ethics in Government Act of 1978, Title VI (Title 28, Sections 
591-596).
    212. Foreign Counterintelligence--Intelligence Community Support. 
This is an administrative classification for the FBI's operational and 
technical support to other Intelligence Community agencies.
    213. Fraud Against the Government--Department of Education.
    214. Civil Rights of Institutionalized Persons Act (Title 42, 
United States Code, Section 1997).
    215. Foreign Counterintelligence Matters. Attorney General 
Guidelines on Foreign Counterintelligence. Executive Order 11905.
    216. thru 229. Foreign Counterintelligence Matters. (Same authority 
as 215.)
    230. thru 240. FBI Training Matters.
    241. DEA Applicant Investigations.
    242. Automation Matters.
    243. Intelligence Identities Protection Act of 1982.
    244. Hostage Rescue Team.
    245. Drug Investigative Task Force.
    246 thru 248. Foreign Counterintelligence Matters. (Same authority 
as 215.)
    249. Environmental Crimes--Investigations involving toxic or 
hazardous waste violations.
    250. Tampering With Consumer Products (Title 18, U.S. Code, Section 
1395).
    251. Controlled Substance--Robbery;--Burglary (Title 18, U.S. Code, 
section 2118).
    252. Violent Crime Apprehension Program (VICAP). Case folders 
containing records relevant to the VICAP Program, in conjunction with 
the National Center for the Analysis of Violent Crime Record System at 
the FBI Academy; Quantico, Virginia.
    253. False Identification Crime Control Act of 1982 (Title 18, U.S. 
Code, Section 1028--Fraud and Related Activity in Connection With 
Identification Documents, and Section 1738--Mailing Private 
Identification Documents Without a Disclaimer).
    254. Destruction of Energy Facilities (Title 18, U.S. Code, Section 
1365) relates to the destruction of property of nonnuclear energy 
facilities.
    255. Counterfeiting of State and Corporate Securities (Title 18, 
U.S. Code, Section 511) covers counterfeiting and forgery of all forms 
of what is loosely interpreted as securities.
    256. Hostage Taking--Terrorism (Title 18, U.S. Code, Section 1203) 
prohibits taking of hostage(s) to compel third party to do or refrain 
from doing any act.
    257. Trademark Counterfeiting Act (Title 18, United States Code, 
section 2320) covers the international trafficking in goods which bear 
a counterfeited trademark.
    258. Credit Card Fraud Act of 1984 (Title 18, United States Code, 
section 1029) covers fraud and related activities in connection with 
access devices (credit and debit cards).
    259. Security Clearance Investigations Program. (Same authority as 
215.)
    260. Industrial Security Program. (Same authority as 215.)
    261. Security Officer Matters. (Same authority as 215.)
    262. Overseas Homicide (Attempted Homicide--International 
Terrorism). Title 18, United States Code, Section 2331.
    263. Office of Professional Responsibility Matters.
    264. Computer Fraud and Abuse Act of 1986. Electronic 
Communications Privacy Act of 1986. Title 18, United States Code, 
Section 1030; Title 18, United States Code, Section 2701.
    265. Acts of Terrorism in the United States--International 
Terrorist. (Followed by predicate offense from other classification.)
    266. Acts of Terrorism in the United States--Domestic Terrorist. 
(Followed by predicate offense from other classification.)
    267. Drug-Related Homicide. Title 21, U.S. Code, Section 848(e).
    268. Engineering Technical Matters--FCI.
    269. Engineering Technical Matters--Non-FCI.
    270. Cooperative Witnesses.
    271. Foreign Counterintelligence Matters. Attorney General 
Guidelines on Foreign Counterintelligence. Executive Order 11905.
    272. Money Laundering. Title 18, U.S. Code, Sections 1956 and 1957.
    273. Adoptive Forfeiture Matter--Drug. Forfeiture based on seizure 
of property by state, local or other Federal authority.
    274. Adoptive Forfeiture Matter--Organized Crime. (Same explanation 
as 273.)
    275. Adoptive Forfeiture Matter--White Collar Crime. (Same 
explanation as 273.)
    276. Adoptive Forfeiture Matter--Violent Crime/Major Offenders 
Program. (Same explanation as 273.)
    277. Adoptive Forfeiture Matter--Counterterrorism Program. (Same 
explanation as 273.)
    278. Presidents Intelligence Oversight Board. Executive Order 
12334.
    279. Biological Weapons Anti-Terrorism Act of 1989. (Title 18, U.S. 
Code, Sections 175-179).
    280. Equal Employment Opportunity Investigations.
    281. Organized Crime Drug Investigations. Records Maintained in FBI 
Field Divisions--FBI field divisions maintain for limited periods of 
time investigative, administrative and correspondence records, 
including files, index cards and related material, some of which are 
duplicated copies of reports and similar documents forwarded to FBI 
Headquarters. Most investigative activities conducted by FBI field 
divisions are reported to FBI Headquarters at one or more stages of the 
investigation. There are, however, investigative activities wherein no 
reporting was made to FBI Headquarters, e.g., pending cases not as yet 
reported and cases which were closed in the field division for any of a 
number of reasons without reporting to FBI Headquarters.
    Duplicate records and records which extract information reported in 
the main files are also kept in the various divisions of the FBI to 
assist them in their day-to-day operation. These records are lists of 
individuals which contain certain biographic data, including physical 
description and photograph. They may also contain information 
concerning activities of the individual as reported to FBIHQ by the 
various field offices. The establishment of these lists is necessitated 
by the needs of the Division to have immediate access to pertinent 
information duplicative of data found in the central records without 
the delay caused by a time-consuming manual search of central indices. 
The manner of segregating these individuals varies depending on the 
particular needs of the FBI Division. The information pertaining to 
individuals who are a part of the list is derivative of information 
contained in the Central Records System. These duplicative records fall 
into the following categories:
    (1) Listings of individuals used to assist in the location and 
apprehension of individuals for whom legal process is outstanding 
(fugitives):
    (2) Listings of individuals used in the identification of 
particular offenders in cases where the FBI has jurisdiction. These 
listings include various photograph albums and background data 
concerning persons who have been formerly charged with a particular 
crime and who may be suspect in similar criminal activities; and 
photographs of individuals who are unknown but suspected of involvement 
in a particular criminal activity, for example, bank surveillance 
photographs:
    (3) Listings of individuals as part of an overall criminal 
intelligence effort by the FBI. This would include photograph albums, 
lists of individuals known to be involved in criminal activity, 
including theft from interstate shipment, interstate transportation of 
stolen property, and individuals in the upper echelon of organized 
crime:
    (4) Listings of individuals in connection with the FBI's mandate to 
carry out Presidential directives on January 8, 1943, July 24, 1950, 
December 15, 1953, and February 18, 1976, which designated the FBI to 
carry out investigative work in matters relating to espionage, 
sabotage, and foreign counterintelligence. These listings may include 
photograph albums and other listings containing biographic data 
regarding individuals. This would include lists of identified and 
suspected foreign intelligence agents and informants:
    (5) Special indices duplicative of the central indices used to 
access the Central Records System have been created from time to time 
in conjunction with the administration and investigation of major 
cases. This duplication and segregation facilitates access to documents 
prepared in connection with major cases.
    In recent years, as the emphasis on the investigation of white 
collar crime, organized crime, and hostile foreign intelligence 
operations has increased, the FBI has been confronted with increasingly 
complicated cases, which require more intricate information processing 
capabilities. Since these complicated investigations frequently involve 
massive volumes of evidence and other investigative information, the 
FBI uses its computers, when necessary to collate, analyze, and 
retrieve investigative information in the most accurate and expeditious 
manner possible. It should be noted that this computerized 
investigative information, which is extracted from the main files or 
other commercial or governmental sources, is only maintained as 
necessary to support the FBI's investigative activities. Information 
from these internal computerized subsystems of the ``Central Records 
System'' is not accessed by any other agency. All disclosures of 
computerized information are made in printed form or other appropriate 
format, in accordance with the routine uses which are set forth below 
and in compliance with applicable security requirements.
    Records also are maintained on a temporary basis relevant to the 
FBI's domestic police cooperating program, where assistance in 
obtaining information is provided to state and local police agencies. 
Also, personnel type information, dealing with such matters as 
attendance and production and accuracy requirements is maintained by 
some divisions.

(The following chart identifies various listings or indexes maintained 
by the FBI which have been or are being used by various divisions of 
the FBI in their day-to-day operations. The chart identifies the list 
by name, description and use, and where maintained, i.e., FBI 
Headquarters and/or Field Office. The number of field offices which 
maintain these indices is also indicated. The list indicates those 
indexes which are in current use (designated by the word ``active'') 
and those which are no longer being used, although maintained 
(designated by the word ``inactive''). There are 27 separate indices 
which are classified in accordance with existing regulations and are 
not included in this list. The following indices are no longer being 
used by the FBI and are being maintained at FBIHQ pending receipt of 
authority to destroy: Black Panther Party Photo Index; Black United 
Front Index; Security Index; and Wounded Knee Album.)
    1. Administrative Index (ADEX). Consists of cards with descriptive 
data on individuals who were subject to investigation in a national 
emergency because they were believed to constitute a potential or 
active threat to the internal security of the United States. When ADEX 
was started in 1971, it was made up of people who were formerly on the 
Security Index, Reserve Index, and Agitator Index. This index is 
maintained in two separate locations in FBI Headquarters. ADEX was 
discontinued in January 1978. This list is inactive at FBI Headquarters 
and 29 Field Offices.
    2. Anonymous Letter File. Consists of photographs of anonymous 
communications and extortionate credit transactions, kidnapping, 
extortion and threatening letters. It is active at FBI Headquarters.
    3. Associates of DEA Class I Narcotics Violators Listing. Consists 
of a computer listing of individuals whom DEA has identified as 
associates of Class I Narcotics Violators. It is active at FBI 
Headquarters and 56 Field Offices.
    4. Background Investigation Index--Department of Justice. Consists 
of cards on persons who have been the subject of a full field 
investigation in connection with their consideration of employment in 
sensitive positions with Department of Justice, such as U.S. Attorney, 
Federal judges, or a high level Department position. It is active at 
FBI Headquarters.
    5. Background Investigation Index--White House, Other Executive 
Agencies, and Congress. Consists of cards on persons who have been the 
subject of a full field investigation in connection with their 
consideration for employment in sensitive positions with the White 
House, Executive agencies (other than the Department of Justice) and 
the Congress. Active at FBI Headquarters.
    6. Bank Fraud and Embezzlement Index. Consists of individuals who 
have been the subject of ``Bank Fraud and Embezzlement'' investigation. 
This file is used as an investigative aid. It is active in one Field 
Office.
    7. Bank Robbery Album. Consists of photos of bank robbers, 
burglars, and larceny subjects. In some field offices it will also 
contain pictures obtained from local police departments of known armed 
robbers and thus potential bank robbers. The index is used to develop 
investigative leads in bank robbery cases and may also be used to show 
to witnesses of bank robberies. It is usually filed by race, height, 
and age. This index is also maintained in one resident agency (a 
suboffice of a field office). Active in 47 Field Offices.
    8. Bank Robbery Nickname Index. Consists of nicknames used by known 
bank robbers. The index cards on each would contain the real name and 
method of operation and are filed in alphabetical order. Active in one 
Field Office.
    9. Bank Robbery Note File. Consists of photographs of notes used in 
bank robberies in which the suspect has been identified. This index is 
used to help solve robberies in which the subject has not been 
identified but a note was left. The role is compared with the index to 
try to match the sentence structure and handwriting for the purpose of 
identifying possible suspects. Active at FBI Headquarters.
    10. Bank Robbery Suspect Index. Consists of a control file or index 
cards with photos, if available, of bank robbers or burglars. In some 
field offices these people may be part of a bank robbery album. This 
index is generally maintained and used in the same manner as the bank 
robbery album. Active in 33 Field Offices.
    11. Car Ring Case Photo Album. Consists of photos of subjects and 
suspects involved in a large car theft ring investigation. It is used 
as an investigative aid. Active in one Field Office.
    12. Car Ring Case Photo Album and Index. Consists of photos of 
subjects and suspects involved in a large car theft ring investigation. 
The card index maintained in addition to the photo album contains the 
names and addresses appearing on fraudulent title histories for stolen 
vehicles. Most of these names appearing on these titles are fictitious. 
But the photo album and card indexes are used as an investigative aid. 
Active in one Field Office.
    13. Car Ring Case Toll Call Index. Consists of cards with 
information on persons who subscribe to telephone numbers to which toll 
calls have been placed by the major subjects of a large car theft ring 
investigation. It is maintained numerically by telephone number. It is 
used to facilitate the development of probable cause for a court-
approved wiretap. Active in two Field Offices.
    14. Car Ring Theft Working Index. Contains cards on individuals 
involved in car ring theft cases on which the FBI Laboratory is doing 
examination work. Active at FBI Headquarters.
    15. Cartage Album. Consists of photos with descriptive data of 
individuals who have been convicted of theft from interstate shipment 
or interstate transportation of stolen property where there is a reason 
to believe they may request the offense. It is used in investigating 
the above violations. Active in three Field Offices.
    16. Channelizing Index. Consists of cards with the names and case 
file numbers of people who are frequently mentioned in information 
reports. The index is used to facilitate the distributing or channeling 
of information reports to appropriate files. Active in nine Field 
Offices.
    17. Check Circular File. Consists of fliers numerically in a 
control file on fugitives who are notorious fraudulent check passers 
and who are engaged in a continuing operation of passing checks. The 
fliers, which include the subject's name, photo, a summary of the 
subject's method of operation and other identifying data, are used to 
alert other FBI field offices and business establishments which may be 
the victims of bad checks.
    18. Computerized Telephone Number File (CTNF) Intelligence. 
Consists of a computer listing of telephone numbers (and) subscribers' 
names and addresses) utilized by subjects and/or certain individuals 
which come to the FBI's attention during major investigations. During 
subsequent investigations, telephone numbers, obtained through 
subpoena, are matched with the telephone numbers on file to determine 
connections or associations. Active at FBI Headquarters.
    19. Con Man Index. Consists of computerized names of individuals, 
along with company affiliation, who travel nationally and 
internationally while participating in large-dollar-value financial 
swindles. Active in four Field Offices.
    20. Confidence Game (Flim Flam) Album. Consists of photos with 
descriptive information on individuals who have been arrested for 
confidence games and related activities. It is used as an investigative 
aid. Active in one Field Office.
    21. Copyright Matters Index. Consists of cards of individuals who 
are film collectors and film titles. It is used as a reference in the 
investigation of copyright matters. Active in one Field Office.
    22. Criminal Intelligence Index. Consists of cards with name and 
file number of individuals who have become the subject of an 
antiracketeering investigation. The index is used as a quick way to 
ascertain file numbers and the correct spelling of names. This index is 
active in two Field Offices and one Resident Agency.
    23. Criminal Informant Index. Consists of cards containing identity 
and brief background information on all active and inactive informants 
furnishing information in the criminal area. Active at FBI 
Headquarters.
    24. DEA Class 1 Narcotics Violators Listing. Consists of a computer 
listing of narcotic violators--persons known to manufacture, supply, or 
distribute large quantities of illicit drugs--with background data. It 
is used by the FBI in their role of assisting DEA in disseminating 
intelligence data concerning illicit drug trafficking. This index is 
also maintained in two resident agencies.
    25. Deserter Index. Contains cards with the names of individuals 
who are known military deserters. It is used as an investigative aid. 
Active in four Field Offices.
    26. False Identities Index. Contains cards with the names of 
deceased individuals whose birth certificates have been obtained by 
other persons for possible false identification uses and in connection 
with which the FBI laboratory has been requested to perform 
examinations. Inactive at FBI Headquarters.
    27. False Identities List. Consists of a listing of names of 
deceased individuals whose birth certificates have been obtained after 
the person's death, and thus whose names are possibly being used for 
false identification purposes. The listing is maintained as part of the 
FBI's program to find persons using false identities for illegal 
purposes. Inactive at 31 Field Offices.
    28. False Identity Photo Album. Consists of names and photos of 
people who have been positively identified as using a false 
identification. This is used as an investigative aid in the FBI's 
investigation of false identities. Inactive in two Field Offices.
    29. FBI/Inspector General (IG) Case Pointer System (FICPS). 
Consists of a computerized listing of individual names of organizations 
which are the subject of active and inactive fraud investigations, 
along with the name of the agency conducting the investigation. Data is 
available to IG offices throughout the federal government to prevent 
duplication of investigative activity. Active at FBI Headquarters.
    30. FBI Wanted Persons Index. Consists of cards on persons being 
sought on the basis of Federal warrants covering violations which fall 
under the jurisdiction of the FBI. It is used as a ready reference to 
identify those fugitives. Active at FBI Headquarters.
    31. Foreign Counterintelligence (FCI). Consists of cards with 
identity background data on all active and inactive operational and 
informational assets in the foreign counterintelligence field. It is 
used as a reference aid on the FCI Asset program. Active at FBI 
Headquarters.
    32. Fraud Against the Government Index. Consists of individuals who 
have been the subject of a ``fraud against the 
Government''investigation. It is used as an investigative aid. Active 
in one Field Office.
    33. Fugitive Bank Robbers File. Consists of fliers on bank robbery 
fugitives filed sequentially in a control file. FBI Headquarters 
distributes to the field offices fliers on bank robbers in a fugitive 
status for 15 or more days to facilitate their location. Active at FBI 
Headquarters and in 43 Field Offices.
    34. General Security Index. Contains cards on all persons that have 
been the subject of a security classification investigation by the FBI 
field office. These cards are used for general reference purposes. 
Active in one Field Office.
    35. Hoodlum License Plate Index. Consists of cards with the license 
plate numbers and descriptive data on known hoodlums and cars observed 
in the vicinity of hoodlum homes. It is used for quick identification 
of such person in the course of investigation. The one index which is 
not fully retrievable is maintained by a resident agency. Active in 
three Field Offices.
    36. Identification Order Fugitive Flier File. Consists of fliers 
numerically in a control file. When immediate leads have been exhausted 
in fugitive investigations and a crime of considerable public interest 
has been committed, the fliers are given wide circulation among law 
enforcement agencies throughout the United States and are posted in 
post offices. The fliers contain the fugitive's photograph, 
fingerprints, and description. Active at FBI Headquarters and in 49 
Field Offices.
    37. Informant Index. Consists of cards with the name, symbol 
numbers, and brief background information on the following categories 
of active and inactive informants, top echelon criminal informants, 
security informants, criminal information, operational and 
informational assets, extremist informants (discontinued), plant 
informant--informants on and about certain military basis 
(discontinued), and potential criminal informants. Active in 56 Field 
Offices.
    38. Informants in Other Field Offices, Index of. Consist of cards 
with names and/or symbol numbers of informants in other FBI field 
offices that are in a position to furnish information that would also 
be included on the index card. Active in 15 Field Offices.
    39. Interstate Transportation of Stolen Aircraft Photo Album. 
Consists of photos and descriptive data on individuals who are suspects 
known to have been involved in interstate transportation of stolen 
aircraft. It is used as an investigative aid. Active in one Field 
Office.
    40. IRS Wanted List. Consists of one-page fliers from IRS on 
individuals with background information who are wanted by IRS for tax 
purposes. It is used in the identification of persons wanted by IRS. 
Active in 11 Field Offices.
    41. Kidnapping Book. Consists of data, filed chronologically, on 
kidnappings that have occurred since the early fifties. The victims' 
names and the suspects, if known, would be listed with a brief 
description of the circumstances surrounding the kidnapping. The file 
is used as a reference aid in matching up prior methods of operation in 
unsolved kidnapping cases. Active at FBI Headquarters and inactive in 
four Field Offices.
    42. Known Check Passers Album. Consists of photos with descriptive 
data of persons known to pass stolen, forged, or counterfeit checks. It 
is used as an investigative aid. Active in four Field Offices.
    43. Known Gambler Index. Consists of cards with names, descriptive 
data, and sometimes photos of individuals who are known bookmakers and 
gamblers. The index is used in organized crime and gambling 
investigations. Subsequent to GAO's review, and at the recommendation 
of the inspection team at one of the two field offices where the index 
was destroyed and thus is not included in the total. Active in five 
Field Offices.
    44. La Cosa Nostra (LCN) Membership Index. Contains cards on 
individuals having been identified as members of the LCN index. The 
cards contain personal data and pictures. The index is used solely by 
FBI agents for assistance in investigating organized crime matters. 
Active at FBI Headquarters and 55 Field Offices.
    45. Leased Line Letter Request Index. Contains cards on individuals 
and organizations who are or have been the subject of a national 
security electronic surveillance where a leased line letter was 
necessary. It is used as an administrative and statistical aid. Active 
at FBI Headquarters.
    46. Mail Cover Index. Consists of cards containing a record of all 
mail covers conducted on individuals and group since about January 
1973. It is used for reference in preparing mail cover requests. Active 
at FBIHQ.
    47. Military Deserter Index. Consists of cards containing the names 
of all military deserters where the various military branches have 
requested FBI assistance in locating. It is used as an administrative 
aid. Active at FBI Headquarters.
    48. National Bank Robbery Album. Consists of fliers on bank robbery 
suspects held sequentially in a control file. When an identifiable bank 
camera photograph is available and the case has been under 
investigation for 30 days without identifying the subject, FBIHQ sends 
a flier to the field offices to help identify the subject. Active at 
FBI Headquarters and in 42 Field Offices.
    49. National Fraudulent Check File. Contains photographs of the 
signature on stolen and counterfeit checks. It is filed alphabetically 
but there is no way of knowing the names are real or fictitious. The 
index is used to help solve stolen check cases by matching checks 
obtained in such cases against the index to identify a possible 
suspect. Active at FBI Headquarters.
    50. National Security Electronic Surveillance Card File. Contains 
cards recording electronic surveillances previously authorized by the 
Attorney General and previously and currently authorized by the FISC; 
current and previous assets in the foreign counterintelligence field; 
and a historical, inactive section which contains cards believed to 
record nonconsented physical entries in national security cases, 
previously toll billings, mail covers and leased lines. The inactive 
section also contains cards Attorney General approvals and denials for 
warrantless electronic surveillance in the national security cases. 
Inactive at FBI Headquarters.
    51. Night Depository Trap Index. Contains cards with the names of 
persons who have been involved in the theft of deposits made in bank 
night depository boxes. Since these thefts have involved various 
methods, the FBI uses the index to solve such cases by matching up 
similar methods to identify possible suspects. Active at FBI 
Headquarters.
    52. Organized Crime Photo Album. Consists of photos and background 
information on individuals involved in organized crime activities. The 
index is used as a ready reference in identifying organized crime 
figures within the field offices' jurisdiction. Active in 13 Field 
Offices.
    53. Photospread Identification Elimination File. Consists of photos 
of individuals who have been subjects and suspects in FBI 
investigations. It also includes photos received from other law 
enforcement agencies. These pictures can be used to show witnesses of 
certain crimes. Active in 14 Field Offices.
    54. Prostitute Photo Album. Consists of photos with background data 
on prostitutes who have prior local or Federal arrests for 
prostitution. It is used to identify prostitutes in connection with 
investigations under the White Slave Traffic Act. Active in four Field 
Offices.
    55. Royal Canadian Mounted Policy (RCMP) Wanted Circular File. 
Consists of a control file of individuals with background information 
of persons wanted by the RCMP. It is used to notify the RCMP if an 
individual is located. Active in 17 Field Offices.
    56. Security Informant Index. Consists of cards containing identity 
and brief background information on all active and inactive informants 
furnishing information in the criminal area. Active at FBI 
Headquarters.
    57. Security Subjects Control Index. Consists of cards containing 
the names and case file numbers of individuals who have been subject to 
security investigations check. It is used as a reference source. Active 
in one Field Office.
    58. Security Telephone Number Index. Contains cards with telephone 
subscriber information subpoenaed from the telephone company in any 
security investigation. It is maintained numerically by the last three 
digits in the telephone number. It is used for general reference 
purposes in security investigations. Active in one Field Office.
    59. Selective Service Violators Index. Contains cards on 
individuals being sought on the basis of Federal warrants for violation 
of the Selective Service Act. Active at FBI Headquarters.
    60. Sources of Information Index. Consists of cards on individuals 
and organizations such as banks, motels, local government that are 
willing to furnish information to the FBI with sufficient frequency to 
justify listing for the benefit of all agents. It is maintained to 
facilitate the use of such sources. Active in 10 Field Offices.
    61. Special Services Index. Contains cards of prominent individuals 
who are in a position to furnish assistance in connection with FBI 
investigative responsibility. Active in 28 Field Offices.
    62. Stolen Checks and Fraud by Wire Index. Consists of cards on 
individuals involved in check and fraud by wire violations. It is used 
as an investigative aid. Active in one Field Office.
    63. Stop Notices Index. Consists of cards on names of subjects or 
property where the field office has placed a stop at another law 
enforcement agency or private business such as pawn shops in the event 
information comes to the attention of that agency concerning the 
subject or property. This is filed numerically by investigative 
classification. It is used to insure that the agency where the stop is 
placed is notified when the subject is apprehended or the property is 
located or recovered. Active in 43 Field Offices.
    64. Surveillance Locator Index. Consists of cards with basic data 
on individuals and businesses which have come under physical 
surveillance in the city in which the field office is located. It is 
used for general reference purposes in antiracketeering investigations. 
Active in two Field Offices.
    65. Telephone Number Index--Gamblers. Contains information on 
persons identified usually as a result of a subpoena for the names of 
subscribers to particular telephone numbers or toll records for a 
particular phone number of area gamblers and bookmakers. The index 
cards are filed by the last three digits of the telephone number. The 
index is used in gambling investigations. Active in two Field Offices.
    66. Telephone Subscriber and Toll Records Check Index. Contains 
cards with information on persons identified as the result of a formal 
request or subpoena to the phone company for the identity of 
subscribers to particular telephone numbers. The index cards are filed 
by telephone number and would also include identity of the subscriber, 
billing party's identity, subscriber's address, date of request from 
the telephone company, and file number. Active in one Field Office.
    67. Thieves, Couriers and Fences Photo Index. Consists of photos 
and background information on individuals who are or are suspected of 
being thieves, couriers, or fences based on their past activity in the 
area of interstate transportation of stolen property. It is used as an 
investigative aid. Active in four Field Offices.
    68. Toll Record Request Index. Contains cards on individuals and 
organizations on whom toll records have been obtained in national 
security related cases and with respect to which FBIHQ had to prepare a 
request letter. It is used primarily to facilitate the handling of 
repeat requests on individuals listed. Active at FBIHQ.
    69. Top Burglar Album. Consists of photos and background data of 
known and suspect top burglars involved in the area of interstate 
transportation of stolen property. It is used as an investigative aid. 
Active in four Field Offices.
    70. Top Echelon Criminal Informer Program (TECIP) Index. Consists 
of cards containing identity and brief background information on 
individuals who are either furnishing high level information in the 
organized crime area or are under development to furnish such 
information. The index is used primarily to evaluate, corroborate, and 
coordinate informant information and to develop prosecutive data 
against racket figures under Federal, State, and local statutes. Active 
at FBI Headquarters.
    71. Top Ten Program File. Consists of fliers, filed numerically in 
a control file, on fugitives considered by the FBI to be 1 of the 10 
most wanted. Including a fugitive of the top 10 usually assures a 
greater national news coverage as well as nation-wide circulation of 
the flier. Active at FBI Headquarters and in 44 Field Offices.
    72. Top Thief Program Index. Consists of cards of individuals who 
are professional burglars, robbers, or fences dealing in items likely 
to be passed in interstate commerce or who travel interstate to commit 
the crime. Usually photographs and background information would also be 
obtained on the index card. The index is used as an investigative aid. 
Active in 27 Field Offices.
    73. Truck Hijack Photo Album. Contains photos and descriptive data 
of individuals who are suspected truck hijackers. It is used as an 
investigative aid and for displaying photos to witnesses and/or victims 
to identify unknown subjects in hijacking cases. Active in four Field 
Offices.
    74. Truck Thief Suspect Photo Album. Consists of photos and 
background data on individuals previously arrested or are currently 
suspects regarding vehicle theft. The index is used as an investigative 
aid. Active in one Field Office.
    75. Traveling Criminal Photo Album. Consists of photos with 
identifying data of individuals convicted of various criminal offenses 
and may be suspects in other offenses. It is used as an investigative 
aid. Active in one Field Office.
    76. Veterans Administrative (VA)/Federal Housing Administration 
(FHA) Matters Index. Consists of cards of individuals who have been 
subject of an investigation relative to VA and FHA matters. It is used 
as an investigative aid. Active in one Field Office.
    77. Wanted Fliers File. Consists of fliers, filed numerically in a 
control file, on badly wanted fugitives whose apprehension may be 
facilitated by a flier. The flier contains the names, photographs, 
aliases, previous convictions, and a caution notice. Active at FBI 
Headquarters and in 46 Field Offices.
    78. Wheeldex. Contains the nicknames and the case file numbers of 
organized crime members. It is used in organized crime investigations. 
Active in one Field Office.
    79. White House Special Index. Contains cards on all potential 
White House appointees, staff members, guests, and visitors that have 
been referred to the FBI by the White House security office for a 
records check to identify any adverse or derogatory information. This 
index is used to expedite such check in view of the tight timeframe 
usually required. Active at FBI Headquarters.
    80. Witness Protection Program Index. Contains cards on individuals 
who have been furnished a new identity by the U.S. Justice Department 
because of their testimony in organized crime trials. It is used 
primarily to notify the U.S. Marshals Service when information related 
to the safety of a protected witness comes to the FBI's attention. 
Active at FBI Headquarters.
            Authority for maintenance of the system:
    Federal Records Act of 1950, Title 44, United States Code, chapter 
31, section 3101; and title 36, Code of Federal Regulations, chapter 
XII, require Federal agencies to insure that adequate and proper 
records are made and preserved to document the organization, functions, 
policies, decisions, procedures and transactions and to protect the 
legal and financial rights of the Federal Government, title 28, United 
States Code, section 534, delegates authority to the Attorney General 
to acquire, collect, classify, and preserve identification, criminal 
identification, crime and other records.
            Routine uses of records maintained in the system, including 
                    categories of users and the purposes of such uses:
    Records, both investigative and administrative, are maintained in 
this system in order to permit the FBI to function efficiently as an 
authorized, responsive component of the Department of Justice. 
Therefore, information in this system is disclosed to officials and 
employees of the Department of Justice, and/or all components thereof, 
who have need of the information in the performance of their official 
duties.
    Personal information from this system may be disclosed as a routine 
use to any Federal agency where the purpose in making the disclosure is 
compatible with the law enforcement purpose for which it was collected, 
e.g., to assist the recipient agency in conducting a lawful criminal or 
intelligence investigation, to assist the recipient agency in making a 
determination concerning an individual's suitability for employment 
and/or trustworthiness for employment and/or trustworthiness for access 
clearance purposes, or to assist the recipient agency in the 
performance of any authorized function where access to records in this 
system is declared by the recipient agency to be relevant to that 
function.
    In addition, personal information may be disclosed from this system 
to members of the Judicial Branch of the Federal Government in response 
to a specific request, or at the initiation of the FBI, where 
disclosure appears relevant to the authorized function of the recipient 
judicial office or court system. An example would be where an 
individual is being considered for employment by a Federal judge. 
Information in this system may be disclosed as a routine use to any 
state or local government agency directly engaged in the criminal 
justice process, e.g., police, prosecution, penal, probation and 
parole, and the judiciary, where access is directly related to a law 
enforcement function of the recipient agency, e.g., in connection with 
a lawful criminal or intelligence investigation, or making a 
determination concerning an individual's suitability for employment as 
a state or local law enforcement employee or concerning a victim's 
compensation under a state statute. Disclosure to a state or local 
government agency, (a) not directly engaged in the criminal justice 
process or (b) for a licensing or regulatory function, is considered on 
an individual basis only under exceptional circumstances, as determined 
by the FBI.
    Information in this system pertaining to the use, abuse or traffic 
of controlled substances may be disclosed as a routine use to federal, 
state or local law enforcement agencies and to licensing or regulatory 
agencies empowered to engage in the institution and prosecution of 
cases before courts and licensing boards in matters relating to 
controlled substances, including courts and licensing boards 
responsible for the licensing or certification of individuals in the 
fields of pharmacy and medicine.
    In any health care-related civil or criminal case, investigation, 
or matter, information indicating patient harm, neglect, or abuse, or 
poor or inadequate quality of care, at a health care facility or by a 
health care provider, may be disclosed as a routine use to any Federal, 
State, local, tribal, foreign, joint, international, or private entity 
that is responsible for regulating, licensing, registering, or 
accrediting any health care provider or health care facility, or 
enforcing any health care-related laws or regulations. Further, 
information indicating an ongoing quality of care problem by a health 
care provider or at a health care facility may be disclosed to the 
appropriate health plan. Additionally, unless otherwise prohibited by 
applicable law, information indicating patient harm, neglect, abuse, or 
poor or inadequate quality of care may be disclosed to the affected 
patient or his or her representative or guardian at the discretion of 
and in the manner determined by the agency in possession of the 
information. Information in this system may be disclosed as a routine 
use in a proceeding before a court of adjudicative body, e.g., the 
Equal Employment Opportunity Commission and the Merit Systems 
Protection Board, before which the FBI is authorized to appear, when 
(a) the FBI or any employee thereof in his or her official capacity, or 
(b) any employee in his or her individual capacity where the Department 
of Justice has agreed to represent the employee, or (c) the United 
States, where the FBI determines it is likely to be affected by the 
litigation, is a party to litigation or has an interest in litigation 
and such records are determined by the FBI to be relevant to the 
litigation.
    Information in this system may be disclosed as a routine use to an 
organization or individual in both the public or private sector if 
deemed necessary to elicit information or cooperation from the 
recipient for use by the FBI in the performance of an authorized 
activity. An example would be where the activities of an individual are 
disclosed to a member of the public in order to elicit his/her 
assistance in our apprehension or detection efforts.
    Information in this system may be disclosed as a routine use to an 
organization or individual in both the public or private sector where 
there is reason to believe the recipient is or could become the target 
of a particular criminal activity or conspiracy, to the extent the 
information is relevant to the protection of life or property.
    Information in this system may be disclosed to legitimate agency of 
a foreign government where the FBI determines that the information is 
relevant to that agency's responsibilities, and dissemination serves 
the best interests of the U.S. Government, and where the purpose in 
making the disclosure is compatible with the purpose for which the 
information was collected.
    Relevant information may be disclosed from this system to the news 
media and general public where there exists a legitimate public 
interest, e.g., to assist in the location of Federal fugitives, to 
provide notification of arrests, and where necessary for protection 
from imminent threat of life or property. This would include releases 
of information in accordance with 28 CFR 50.2.
    A record relating to an actual or potential civil or criminal 
violation of the copyright statute, Title 17, United States Code, or 
the trademark statutes. Titles 15 and 17, U.S. Code, may be 
disseminated to a person injured by such violation to assist him/her in 
the institution or maintenance of a suit brought under such titles. The 
FBI has received inquiries from private citizens and Congressional 
offices on behalf of constituents seeking assistance in locating 
individuals such as missing children and heirs to estates. Where the 
need is acute, and where it appears FBI files may be the only lead in 
locating the individual, consideration will be given to furnishing 
relevant information to the requester. Information will be provided 
only in those instances where there are reasonable grounds to conclude 
from available information the individual being sought would want the 
information to be furnished, e.g., an heir to a large estate. 
Information with regard to missing children will not be provided where 
they have reached their majority.
    Information contained in this system, may be made available to a 
Member of Congress or staff acting upon the member's behalf when the 
member of staff requests the information in behalf of and at the 
request of the individual who is the subject of the record.
    A record from this system of records may be disclosed as a routine 
use to the National Archives and Records Administration and General 
Services Administration in records management inspections conducted 
under the authority of 44 U.S.C. 2904 and 2906, to the extent that 
legislation governing the records permits.
            Policies and practices for storing, retrieving, accessing, 
                    retaining, and disposing of records in the system:
            Storage:
    The active main files are maintained in hard copy form and some 
inactive records are maintained on microfilm. Investigative information 
which is maintained in computerized form may be stored in memory, on 
disk storage, on computer tape, or on a computer printed listing.
            Retrievability:
    The FBI General Index must be searched to determine what 
information, if any, the FBI may have in its files. Index records, or 
pointers to specific FBI files, are created on all manner of subject 
matters, but the predominant type record is the name index record. It 
should be noted the FBI does not index all individuals who furnish 
information or all names developed during the course of an 
investigation. Only that information considered pertinent, relevant, or 
essential for future retrieval, is indexed. In certain major cases, 
individuals interviewed may be indexed to facilitate the administration 
of the investigation. The FBI has automated that portion of its index 
containing the most recent information--15 years for criminal related 
matters and 30 years for intelligence and other type matters.
    Automation will not change the ``Central Records System''; it will 
only facilitate more economic and expeditious access to the main files. 
Searches against the automated records are accomplished on a ``batch 
off-line'' basis for certain submitting agencies where the name search 
requests conform to FBI specified formats and also in an ``on-line'' 
mode with the use of video display terminals for other requests. The 
FBI will not permit any organization, public or private, outside the 
FBI to have direct access to the FBI indices system. All searches 
against the indices data base will be performed on site within FBI 
space by FBI personnel with the assistance of the automated procedures, 
where feasible. Automation of the various FBI field office indices was 
completed in 1989. This automation initiative has been on a ``day-one'' 
basis. This indices system points to specific files within a given 
field office. Additionally, certain complicated investigative matters 
may be supported by specialized computer systems or by individual 
microcomputers. Indices created in these environments are maintained as 
part of the particular computer system and accessible only through the 
system or through printed listings of the indices. Full text retrieval 
is used in a limited number of cases as an investigative technique. It 
is not part of the normal search process and is not used as a 
substitute for the General Index or computer indices mentioned above.
    The FBI will transfer historical records to the National Archives 
consistent with 44 U.S.C. 2103. No record of individuals or subject 
matter will be retained for transferred files; however, a record of the 
file numbers will be retained to provide full accountability of FBI 
files and thus preserve the integrity of the filing system.
            Safeguards:
    Records are maintained in a restricted area and are accessed only 
by agency personnel. All FBI employees receive a complete background 
investigation prior to being hired. All employees are cautioned about 
divulging confidential information or any information contained in FBI 
files. Failure to abide by this provision violates Department of 
Justice regulations and may violate certain statutes providing maximum 
severe penalties of a ten thousand dollar fine or 10 years imprisonment 
or both. Employees who resign or retire are also cautioned about 
divulging information acquired in the jobs. Registered mail is used to 
transmit routine hard copy records between field offices. Highly 
classified records are hand carried by Special Agents or personnel of 
the Armed Forces Courier Service. Highly classified or sensitive 
privacy information, which is electronically transmitted between field 
offices, is transmitted in encrypted form to prevent interception and 
interpretation. Information transmitted in teletype form is placed in 
the main files of both the receiving and transmitting field offices. 
Field offices involved in certain complicated investigative matters may 
be provided with on-line access to the duplicative computerized 
information which is maintained for them on disk storage in the FBI 
Computer Center in Washington, DC, and this computerized data is also 
transmitted in encrypted form.
            Retention and disposal:
    As the result of an extensive review of FBI records conducted by 
NARA, records evaluated as historical and permanent will be transferred 
to the National Archives after established retention periods and 
administrative needs of the FBI have elapsed. As deemed necessary, 
certain records may be subject to restricted examination and usage, as 
provided by 44 U.S.C. section 2104.
    FBI record disposition programs relevant to this System are 
conducted in accordance with the FBI Records Retention Plan and 
Disposition Schedule which was approved by the Archivist of the United 
States and the U.S. District Court, District of Columbia. 
Investigative, applicant and administrative records which meet the 
destruction criteria will be destroyed after 20 or 30 years at FBI 
Headquarters and after 1, 5, 10 or 20 years in FBI Field Offices. 
Historical records will be transferred to the National Archives after 
30 or 50 years, contingent upon investigative and administrative needs. 
The administrative indices and listings described within this System 
were appraised separately and disposition authority established. (Job 
No. NC1-65-82-4 and amendments)
            System manager(s) and address:
    Director, Federal Bureau of Investigation, Washington, DC 20535.
            Notification procedure:
    Same as above.
            Record access procedures:
    A request for access to a record from the system shall be made in 
writing with the envelope and the letter clearly marked ``Privacy 
Access Request''. Include in the request your full name, complete 
address, date of birth, place of birth, notarized signature, and other 
identifying data you may wish to furnish to assist in making a proper 
search of our records. Also include the general subject matter of the 
document of its file number. The requester will also provide a return 
address for transmitting the information. Requests for access to 
information maintained at FBI Headquarters must be addressed to the 
Director, Federal Bureau of Investigation, Washington, DC 20535. 
Requests for information maintained at FBI field divisions or Legal 
Attaches must be made separately and addressed to the specific field 
division or Legal Attache listed in the appendix to this system notice.
            Contesting record procedures:
    Individuals desiring to contest or amend information maintained in 
the system should also direct their request to the Director, Federal 
Bureau of Investigation, Washington, DC 20535, stating clearly and 
concisely what information is being contested, the reasons for 
contesting it, and the proposed amendment to the information sought.
            Record source categories:
    The FBI, by the very nature and requirement to investigate 
violations of law within its investigative jurisdiction and its 
responsibility for the internal security of the United States, collects 
information from a wide variety of sources. Basically, it is the result 
of investigative efforts and information furnished by other Government 
agencies, law enforcement agencies, and the general public, informants, 
witnesses, and public source material.
            Systems exempted from certain provisions of the act:
    The Attorney General has exempted this system from subsections 
(c)(3), (d), (e) (1), (2) and (3), (e)(4) (G) and (H), (e)(8) (f), (g), 
of the Privacy Act pursuant to 5 U.S.C. 552a (j) and (k). Rules have 
been promulgated in accordance with the requirements of 5 U.S.C. 553 
(b), (c) and (e).

 Appendix of Field Divisions and Legal Attaches for the Federal Bureau 
           of Investigation Field Divisions; Justice/FBI-999

    5th Floor, 445 Broadway, Albany, NY 12201.
    POB 25186, Albuquerque, NM 87125.
    POB 100560, Anchorage, AK 99510.
    POB 1683, Atlanta, GA 30370.
    7142 Ambassador Road, Baltimore, MD 21207.
    2122 Building, Birmingham, AL 35203.
    One Center Plaza, Suite 600, Boston, MA 02108.
    111 West Huron Street, Buffalo, NY 14202.
    6010 Kenley Lane, Charlotte, NC 28217.
    219 S. Dearborn St., Chicago, IL 60604.
    POB 1277, Cincinnati, OH 45201.
    1240 E. 9th St., Cleveland, OH 44199.
    POB 137, Columbia, SC 29202.
    1801 W. Lamar, Dallas, TX 75202.
    POB 1229, Denver, CO 80201.
    POB 2118, Detroit, MI 48231.
    700 E. San Antonio Ave., El Paso, TX 79901.
    POB 50164, Honolulu, HI 96850.
    POB 61369, Houston, TX 77208.
    POB 1186, Indianapolis, IN 45206.
    100 W. Capitol St., Jackson, MS 39269.
    POB 8928, Jacksonville, FL 32239.
    POB 2449, Kansas City, MO 64142.
    POB 10368, Knoxville, TN 37919.
    POB 16032, Las Vegas, NV 89101.
    POB 21470, Little Rock, AR 72221-1470.
    11000 Wilshire Blvd., Los Angeles, CA 90024.
    POB 2467, Louisville, KY 40201.
    167 N. Main St., Memphis, TN 38103.
    POB 592418, Miami, FL 33159.
    POB 2058, Milwaukee, WI 53201.
    111 Washington Ave. South S-1100, Minneapolis, MN 55401.
    POB 2128, Mobile, AL 36652.
    POB 1158, Newark, NJ 07101.
    POB 2058, New Haven, CT 06521.
    POB 51930, New Orleans, LA 70151.
    POB 1425, New York, NY 10008.
    POB 3828, Norfolk, VA 23514.
    POB 54511, Oklahoma City, OK 73154.
    POB 548, Omaha, NE 68101.
    600 Arch St., Philadelphia, PA 19106.
    201 E. Indianola, Phoenix, AZ 85012.
    POB 1315, Pittsburgh, PA 15230.
    POB 709, Portland, OR 97207.
    POB 12325, Richmond, VA 23241.
    POB 13130, Sacramento, CA 95813.
    POB 7251, St. Louis, MO 63177.
    125 S. State St., Salt Lake City, UT 84138.
    POB 1630, San Antonio, TX 78296.
    880 Front St., San Diego, CA 92188.
    POB 36015, San Francisco, CA 94102.
    POB BT, San Juan, PR 00936.
    915 2nd Ave., Seattle, WA 98174.
    POB 3646, Springfield, IL 62708.
    POB 172177, Tampa, FL 33602.
    Washington Field Office, Washington, DC 20535.
    Federal Bureau of Investigation Academy, Quantico, VA 22135.
    Legal Attaches: (Send c/o the American Embassy for the Cities 
indicated).
    Athens, Greece (PSC 108, Box 45, APO AE 09842)
    Bangkok, Thailand (Box 67, APO AP 96546).
    Bern, Switzerland.
    Bogota, Columbia (APO, Miami 34038).
    Bonn, Germany (Box 310, APO, New York 09080).
    Bridgetown, Barbados (Box B, FPO, Miami 34054).
    Brussels, Belgium (APO, New York 09667).
    Canberra, Australia (APO, San Francisco 96404-0001).
    Caracas, Venezuela (Unit 4966, APO AA 34037).
    Hong Kong, B.C.C. (FPO, San Francisco 96659-0002).
    London, England (Box 2, FPO, New York 09509).
    Madrid, Spain (PSC 61, Box 0001, APO AE 09642).
    Manila, Philippines (APO, San Francisco 96528).
    Mexico City, Mexico (POB 3087, Laredo, TX 78044-3087).
    Montevideo, Uruguay (APO, Miami 34035).
    Ottawa, Canada.
    Panama City, Panama (Box E, APO, Miami 34002).
    Paris, France (APO, New York 09777).
    Rome, Italy (APO, New York 09794).
    Tokyo, Japan (APO, San Francisco 96503).
    Vienna, Austria (Unit 27937, Box 37, APO AE 09222).
                                 ______
                                 

      [From the Federal Register, Vol. 66, No. 61, March 29, 2001]

                         DEPARTMENT OF JUSTICE
[AAG/A Order No. 223-2001]

Privacy Act of 1974; Systems of Records

    Pursuant to the provisions of the Privacy Act of 1974, 5 U.S.C. 
552a, notice is given that the Department of Justice proposes to modify 
the following systems of records:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
ATR-006  Antitrust Information          2-20-98  63 FR 8660.
 Management System (AMIS)--Matter
 Report.
CIV-001  Civil Division Case File       2-20-98  63 FR 8665.
 System.
CRM-001  Central Criminal               2-20-98  63 FR 8663.
 Division Index File and
 Associated Records.
CRM-012  Organized Crime and           11-26-90  55 FR 49147.
 Racketeering Section, General
 Index File and Associated
 Records.
CRT-001  Central Civil Rights           2-20-98  63 FR 8661.
 Division Index File and
 Associated Records.
FBI-002  The FBI Central Records        2-20-98  63 FR 8671.
 System.
TAX-001  Tax Division Central           2-20-98  63 FR 8684.
 Classification Cards, Index
 Docket Cards, and Associated
 Records--Criminal Tax Cases.
TAX-002  Tax Division Central           2-20-98  63 FR 8685.
 Classification Cards, Index
 Docket Cards, and Associated
 Records--Civil Tax Cases.
USA-005  Civil Case Files........       2-20-98  63 FR 8666.
USA-007  Criminal Case Files.....      12-21-99  64 FR 71499.
------------------------------------------------------------------------

    The Department has modified the above systems of records to include 
a new routine use that allows disclosure of information relating to 
health care fraud to private health plans, associations of private 
health plans, health insurers, and associations of health insurers, for 
the following purposes: To promote the coordination of efforts to 
prevent, detect, investigate, and prosecute health care fraud; to 
assist victims of such fraud to obtain restitution; to enable private 
health plans to participate in health care fraud task force activities; 
and to assist tribunals having jurisdiction over claims against private 
health plans. It should be noted that with regard to taxpayer 
information, the addition of this routine use is not intended to affect 
the confidentiality of such taxpayer information as provided for in 26 
U.S.C. 6103.
    In accordance with 5 U.S.C. 552a(e)(4) and (11), the public is 
given a 30-day period in which to comment; and the Office of Management 
and Budget (OMB), which has oversight responsibility under the Privacy 
Act, requires a 40-day period in which to conclude its review of the 
system. Therefore, please submit any comments by [30 days after 
publication in the Federal Register]. The public, OMB, and the Congress 
are invited to submit any comments to Mary E. Cahill, Management and 
Planning Staff, Justice Management Division, United States Department 
of Justice, Washington, DC 20530-0001 (Room 1400, National Place 
Building).
    A description of the modification to the Department's systems of 
records is provided below. In accordance with 5 U.S.C. 552a(r), the 
Department has provided a report to OMB and the Congress.

    Dated: March 19, 2001.

Stephen R. Colgate,
Assistant Attorney General for Administration.
DOJ Privacy Act Systems of Records
    ATR-006  Antitrust Information Management System (AMIS)--Matter 
Report.
    CIV-001  Civil Division Case File System.
    CRM-001  Central Criminal Division Index File and Associated 
Records.
    CRM-012  Organized Crime and Racketeering Section, General Index 
File and Associated Records.
    CRT-001  Central Civil Rights Division Index File and Associated 
Records.
    FBI-002  The FBI Central Records System.
    TAX-001  Tax Division Central Classification Cards, Index Docket 
Cards, and Associated Records--Criminal Tax Cases.
    TAX-002  Tax Division Central Classification Cards, Index Docket 
Cards, and Associated Records--Civil Tax Cases.
    USA-005  Civil Case Files.
    USA-007  Criminal Case Files.
          * * * * * * *
            Routine Uses of Records Maintained in the System, Including 
                    Categories of Users and the Purposes of Such Uses:
    Information relating to health care fraud may be disclosed to 
private health plans, or associations of private health plans, and 
health insurers, or associations of health insurers, for the following 
purposes: to promote the coordination of efforts to prevent, detect, 
investigate, and prosecute health care fraud; to assist efforts by 
victims of health care fraud to obtain restitution; to enable private 
health plans to participate in local, regional, and national health 
care fraud task force activities; and to assist tribunals having 
jurisdiction over claims against private health plans.
          * * * * * * *
[FR Doc. 01-7676 Filed 3-28-01; 8:45 am]

BILLING CODE 4410-14-M
                                 ______
                                 

     [From the Federal Register, Vol. 58, No. 191, October 5, 1993]

                         DEPARTMENT OF JUSTICE
[AAG/A Order No. 79-93]
          * * * * * * *
JUSTICE/FBI-015
            System name:
    National Center for the Analysis of Violent Crime (NCAVC).
            System location:
    Federal Bureau of Investigation, Training Division, FBI Academy, 
Behavioral Science Unit, Quantico, Virginia 22135.
            Categories of individuals covered by the system:
    A. Individuals who relate in any manner to official FBI 
investigations into violent crimes including, but not limited to, 
subjects, suspects, victims, witnesses, close relatives, medical 
personnel, and associates who are relevant to an investigation.
    B. Individuals who are the subject of unsolicited information or 
who offer unsolicited information, and law enforcement personnel who 
request assistance and/or make inquiries concerning records.
    C. Individuals who are the subject of violent crime research 
studies including, but not limited to, criminal personality profiles, 
scholarly journals, and news media references.
            Categories of records in the system:
    The National Center for the Analysis of Violent Crime will maintain 
in both manual and automated formats case investigation reports on all 
forms of solved and unsolved violent crimes. These violent crimes 
include, but are not limited to, acts or attempted acts of murder, 
kidnapping, incendiary arson or bombing, rape, physical torture, sexual 
trauma, or evidence of violent forms of death. Less than ten percent of 
the records which are analyzed may not be directly related to violent 
activities.
    A. Violent Criminal Apprehension Program (VICAP) case reports 
submitted to the FBI by a duly constituted Federal, State, county, 
municipal, or foreign law enforcement agency in any violent criminal 
matter. VICAP reports include, but are not limited to, crime scene 
descriptions, victim and offender descriptive data, laboratory reports, 
criminal history records, court records, news media references, crime 
scene photographs, and statements.
    B. Violent crime case reports submitted by FBI headquarters or 
field offices, and case reports submitted to the FBI by a duly 
constituted Federal, State, county, municipal, or foreign law 
enforcement agency in any violent criminal matter.
    C. Violent crime research studies, scholarly journal articles, 
textbooks, training materials, and news media references of interest to 
NCAVC personnel.
    D. An index of all detected trends, patterns, profiles and methods 
of operation of known and unknown violent criminals whose records are 
maintained in the system.
    E. An index of the names, addresses, and contact telephone numbers 
of professional individuals and organizations who are in a position to 
furnish assistance to the FBI's NCAVC operation.
    F. An index of public record sources for historical, statistical 
and demographic data collected by the U.S. Bureau of the Census.
    G. An alphabetical name index pertaining to all individuals whose 
records are maintained in the system.
            Authority for maintenance of the system:
    44 U.S.C. Section 3101; 41 CFR subpart 101-11.2 and 28 U.S.C. 
Section 534.
            Routine uses of records maintained in the system, including 
                    categories of users and the purposes of such uses:
    Currently, the NCAVC is administered by the FBI through its 
Training Division, located at the FBI Academy, Quantico, Virginia. Its 
primary mission is to consolidate research, training, and operational 
support activities for the express purposes of providing expertise to 
any legitimate law enforcement agency confronted with unusual, bizarre, 
and/or particularly vicious or repetitive violent crimes.
    Records described above are maintained in this system to permit the 
FBI to function efficiently as an authorized, responsive component of 
the Department of Justice. Therefore, the information in this system is 
disclosed to officials and employees of the Department of Justice, and/
or all components thereof, who need the information to perform their 
official duties.
    Information in this system may be disclosed as a routine use to any 
Federal, State, local, or foreign government agency directly engaged in 
the criminal justice process where access is directly related to a law 
enforcement function of the recipient agency in connection with the 
tracking identification, and apprehension of persons believed to be 
engaged in repeated or exceptionally violent acts of criminal behavior.
    Information in this system may be disclosed as a routine use in a 
proceeding before a court or adjudicative body, e.g., the Equal 
Employment Opportunity Commission and the Merit Systems Protection 
Board, before which the FBI is authorized to appear, when (a) the FBI 
or any employee thereof in his or her official capacity, or (b) any 
employee in his or her individual capacity where the Department of 
Justice has agreed to represent the employee, or (c) the United States, 
where the FBI determines it is likely to be affected by the litigation, 
is a party to litigation or has an interest in litigation and such 
records are determined by the FBI to be relevant to the litigation.
    Information in this system may be disclosed as a routine use to an 
organization or individual in both the public or private sector 
pursuant to an appropriate legal proceeding or, if deemed necessary, to 
elicit information or cooperation from the recipient for use by the FBI 
in the performance of an authorized activity. An example could be where 
the activities of an individual are disclosed to a member of the public 
to elicit his/her assistance in FBI apprehension or detection efforts.
    Information in this system may be disclosed as a routine use to an 
organization or individual in the public or private sector where there 
is reason to believe the recipient is or could become the target of a 
particular criminal activity or conspiracy and to the extent the 
information is relevant to the protection of life or property.
    Relevant information may be disclosed from this system to the news 
media and general public where there exists a legitimate public 
interest. Examples would include: To obtain public or media assistance 
in the tracking, identifying, and apprehending of persons believed to 
be engaged in repeated acts of violent criminal behavior; to notify the 
public and/or media of arrests; to protect the public from imminent 
threat to life or property where necessary; and to disseminate 
information to the public and/or media to obtain cooperation with 
violent crime research, evaluation, and statistical programs.
    Information in this system may be disclosed as is necessary to 
appropriately respond to congressional inquiries on behalf of 
constituents.
    A record from a system of records may be disclosed as a routine use 
to the National Archives and Records Administration (NARA) in records 
management inspections conducted under the authority of 44 U.S.C. 2904 
and 2906 to the extent that legislation governing the record permits.
            Policies and practices for storing, retrieving, accessing, 
                    retaining, and disposing of records in the system:
            Storage:
    Information in the system is stored manually in locked file 
cabinets, either in its natural state or on microfilm, at the NCAVC in 
Quantico, Virginia. The active main files are maintained in hard copy 
form and some inactive records are maintained on microfilm.
    In addition, some of the information is stored in computerized data 
storage devices at the NCAVC and FBI Computer Center in Washington, DC. 
Investigative information which is maintained in computerized form may 
be stored in memory on disk storage on computer tape, or on computer 
printed listings.
            Retrievability:
    On-line computer access to NCAVC files is achieved by using the 
following search descriptors:
    A. A data base which contains the names of individuals, their birth 
dates, physical descriptions, and other identification numbers such as 
FBI numbers, if such have been assigned.
    B. Summary variables contained on VICAP reports submitted to the 
NCAVC as previously described.
    C. Key words citations to violent crime research studies. scholarly 
journal articles, textbooks, training materials, and media references.
            Safeguards:
    Records are maintained in restricted areas and accessed only by FBI 
employees. All FBI employees receive a complete pre-employment 
background investigation. All employees are cautioned about divulging 
confidential information or any information contained in FBI files. 
Failure to abide by this provision violates Department of Justice 
regulations and may violate certain statutes providing maximum severe 
penalties of a ten thousand dollar fine or 10 years' imprisonment or 
both. Employees who resign or retire are also cautioned about divulging 
information acquired in the job.
    Registered mail is used to transmit routine hard copy records 
between field offices. Highly classified records are hand carried by 
Special Agents or personnel of the Armed Forces Courier Service. Highly 
classified or sensitive privacy information, which is electronically 
transmitted between field offices and to and from FBI Headquarters, is 
transmitted in encrypted form to prevent interception and 
interpretation.
    Information transmitted in teletype form between the NCAVC in 
Quantico, Virginia and the FBI Computer Center in Washington, DC, is 
encrypted prior to transmission at both places to ensure 
confidentiality and security of the data.
    FBI field offices involved in certain complicated, investigative 
matters may be provided with on-line access to the computerized 
information which is maintained for them on disc storage in the FBI 
Computer Center in Washington, DC. This computerized data is also 
transmitted in encrypted form.
            Retention and disposal:
    Records are proposed for destruction after 50 years or upon 
termination of the program, whichever is earlier. The disposition 
schedule is pending with NARA as Job No. N1-65-88-13.
            System manager(s) and address:
    Director, Federal Bureau of Investigation, 10th and Pennsylvania 
Avenue NW., Washington, DC 20535.
            Notification procedure:
    Address inquiries to the System Manager.
            Record access procedures:
    Requests for access to records in this system shall be made in 
writing with the envelope and the letter clearly marked ``Privacy 
Access Request.'' The request must provide the full name, complete 
address, date of birth, place of birth, and notarized signature of the 
individual who is the subject of the record requested. The request 
should also include the general subject matter of the document or its 
file number--along with any other known information which may assist in 
making a search of the records. The request must also provide a return 
addressing for transmitting the information. Access requests should be 
addressed to the Director, Federal Bureau of Investigation, Washington, 
DC 20535.
            Contesting record procedures:
    Individuals desiring to contest or amend information maintained in 
the system should also direct their request to the Director, Federal 
Bureau of Investigation, Washington, DC 20535. The request should state 
clearly and concisely (1) the reasons for contesting the information, 
and (2) the proposed amendment to the information.
            Record source categories:
    The FBI, by the very nature of its responsibilities to investigate 
violations of law within its investigative jurisdiction and ensure the 
internal security of the United States, collects information from a 
wide variety of sources. Basically, information is obtained, as a 
result of investigative efforts, from other Government agencies, law 
enforcement agencies, the general public, informants, witnesses, and 
public source material.
            Systems exempted from certain provisions of the act:
    The Attorney General has exempted this system from subsections 
(c)(3), (d), (e)(1), (e)(4) (G) and (H), (f) and (g) of the Privacy Act 
pursuant to 5 U.S.C. 552a (j)(2) and (k)(2). Rules have been 
promulgated in accordance with the requirements of 5 U.S.C. 553 (b), 
(c), and (e).
                                 ______
                                 

      [From the Federal Register, Vol. 66, No. 121, June 22, 2001]

                         DEPARTMENT OF JUSTICE
[AAG/A Order No. 233-2001]

Privacy Act of 1974; System of Records

AGENCY: Federal Bureau of Investigation, DOJ.

ACTION: Notice.

SUMMARY: Pursuant to the Privacy Act of 1974 (5 U.S.C. 552a), and 
Office of Management and Budget (OMB) Circular No. A-130, notice is 
hereby given that the Department of Justice, Federal Bureau of 
Investigation (FBI), is establishing ten ``blanket'' routine uses to be 
applicable to more than one FBI system of records. Further, the FBI is 
modifying the following systems of records:
    Bureau Mailing Lists, Justice/FBI-003 (previously published on 
October 5, 1993, at 58 FR 51846); and
    Electronic Surveillance (ELSUR) Indices, Justice/FBI-006 
(previously published on March 10, 1992, at 57 FR 8473).
    Opportunity for Comment: The Privacy Act (5 U.S.C. 552a(e)(r) and 
(11)) requires that the public be given 30 days in which to comment on 
any new or amended uses of information in a system of records. In 
addition, in accordance with Privacy Act requirements (5 U.S.C. 
552a(r)), the Department of Justice has provided a report on these 
modifications to OMB and the Congress. OMB, which has oversight 
responsibilities under the Act, requires that OMB and the Congress be 
given 40 days in which to review major changes to Privacy Act systems. 
Therefore, the public, OMB, and the Congress are invited to submit 
written comments on this modification.
    Address Comments or Request for Further Information to: Mary E. 
Cahill, Management Analyst, Management and Planning Staff, Justice 
Management Division, Department of Justice, 1400 National Place, 
Washington, DC 20530.

EFFECTIVE DATE: These proposed changes will be effective August 1, 
2001, unless comments are received that result in a contrary 
determination.

SUPPLEMENTARY INFORMATION: The FBI is proposing to establish ten 
blanket routine uses in order to: (1) Foster greater public 
understanding by simplifying and consolidating FBI Privacy Act 
issuances; (2) minimize through use of standardized wording the 
potential for misunderstanding or misinterpretation which might arise 
from unintended variations in different versions of common routine 
uses; and (3) reduce costs and duplication of effort in the publication 
and maintenance of FBI Privacy Act issuances. Unless this or other 
published notice expressly provides otherwise, these blanket routine 
uses will apply to existing FBI systems of records as indicated below 
and to all FBI systems of records created or modified hereafter. 
However, the FBI is not at this time applying blanket routine uses to 
the National DNA Index System (NDIS) (Justice/FBI-017) or to the 
National Instant Criminal Background Check System (NICS) (Justice/FBI-
018). (Any blanket routine uses which the FBI may in the future propose 
to apply to these two systems will be implemented by express reference 
in revisions to the respective systems notices.)
    In large part these blanket routine uses standardize wording of 
routine uses already promulgated for one or more FBI or DOJ systems. 
The wording of a blanket use may differ somewhat from the existing 
counterpart(s). These differences generally do not reflect 
substantially different uses; however, some uses are clarified or 
broadened as to when and to whom disclosures may be made. Furthermore, 
Blanket Routine Use 9 is a new use not now reflected in any FBI system.
    Upon taking effect, these blanket routine uses will apply to the 
FBI systems indicated below:
    National Crime Information Center (NCIC), JUSTICE/FBI-001 (last 
published in the Federal Register on September 28, 1999, at 64 FR 
52343);
    FBI Central Records System, JUSTICE/FBI-002 (last published in the 
Federal Register on February 20, 1998, at 63 FR 8671);
    Bureau Mailing Lists, JUSTICE/FBI-003 (published in today's Federal 
Register);
    Electronic Surveillance (ELSUR) Indices, JUSTICE/FBI-006 (published 
in today's Federal Register);
    FBI Automated Payroll System, JUSTICE/FBI-007 (last published in 
the Federal Register on October 5, 1993, at 58 FR 51874);
    Bureau Personnel Management System (BPMS), JUSTICE/FBI-008 (last 
published in the Federal Register on October 5, 1993, at 58 FR 51875);
    Fingerprint Identification Records System (FIRS), JUSTICE/FBI-009 
(last published in the Federal Register on September 28, 1999, at 64 FR 
52347);
    Employee Travel Vouchers and Individual Earning Records, JUSTICE/
FBI-010 (last published in the Federal Register on December 11, 1987, 
at 52 FR 47248);
    Employee Health Records, JUSTICE/FBI-011 (last published in the 
Federal Register on October 5, 1993, at 58 FR 51875);
    Time Utilization Record/Keeping (TURK) System, JUSTICE/FBI-012 
(last published in the Federal Register on October 5, 1993, at 58 FR 
51876);
    Security Access Control System (SACS), JUSTICE/FBI-013 (last 
published in the Federal Register on October 5, 1993, at 58 FR 51877);
    FBI Alcoholism Program, JUSTICE/FBI-014 (last published in the 
Federal Register on December 11, 1987, at 52 FR 47251);
    National Center for the Analysis of Violent Crime (NCAVC), JUSTICE/
FBI-015 (last published in the Federal Register on October 5, 1993, at 
58 FR 51877);
    FBI/Counterdrug Information Indices Systems (CIIS), JUSTICE/FBI-016 
(last published in the Federal Register on June 9, 1994, at 59 FR 
29824);
    The routine uses currently published for each system will also 
continue to apply to that system. As individual FBI system notices are 
hereafter revised, we will eliminate individual system routine uses 
which duplicate blanket routine uses and add express reference to the 
applicability of the blanket routine uses.
    The Department is also modifying the Bureau Mailing Lists and the 
ELSUR systems of records in order to clarify and more accurately 
describe them. The Bureau Mailing Lists system notice is being modified 
to clarify the categories of individuals covered by the system, the 
categories of records in the system, and the record access procedures. 
The existing routine uses are modified to include a system specific 
routine use which permits the disclosure of system records to public 
and/or private entities where such disclosures may promote, assist, or 
otherwise serve law enforcement interests. The notice also provides 
that records can be disclosed in accordance with the blanket routine 
uses that are concurrently being established for FBI records systems.
    The ELSUR notice is being modified to include a new category of 
records in the system, ``reference records.'' Additionally, the ELSUR 
notice clarifies the record access procedures. The routine uses for the 
ELSUR system were also modified to reflect three additional system 
specific routine uses which permit the disclosure of system records to 
public and/or private entities where: (1) Such disclosures may promote, 
assist, or otherwise serve law enforcement interests; (2) the FBI deems 
it reasonable and helpful in eliciting information or cooperation from 
the recipient for use by the FBI in the performance of an authorized 
function; or (3) there is reason to believe that a person or entity 
could become the target of a particular criminal activity or 
conspiracy. In addition, the notice provides that records may be 
disclosed pursuant to the proposed blanket routine uses being published 
simultaneously herein.
    Both the Bureau Mailing Lists and the ELSUR systems are being 
republished to reflect these and other minor changes, including the 
addition of a ``Purpose'' section to both notices.
    A description of the proposed ten blanket routine uses and the 
modification to the Bureau Mailing Lists and the ELSUR systems of 
records is provided below.

    Dated: June 11, 2001.

Janis A. Sposato,
Acting Assistant Attorney General for Administration.
JUSTICE/FBI-BRU
            SUBJECT:
    Blanket Routine Uses (BRU) Applicable to More Than One FBI Privacy 
Act System of Records.
            APPLICABILITY:
    The following routine uses describe those types of disclosures 
which are common to more than one FBI Privacy Act system of records and 
which the FBI is establishing as ``blanket'' routine uses. Unless this 
or other published notice expressly provides otherwise, these blanket 
routine uses shall apply, without need of further implementation, to 
every existing FBI Privacy Act system of records and to all FBI systems 
of records created or modified hereafter. These blanket routine uses 
supplement but do not replace any routine uses that are separately 
published in the notices of individual record systems to which the 
blanket routine uses apply.
            ROUTINE USES OF RECORDS MAINTAINED IN FBI SYSTEMS, 
                    INCLUDING CATEGORIES OF USERS AND THE PURPOSES OF 
                    SUCH USES:
    System records may be disclosed to the following persons or 
entities under the circumstances or for the purposes described below, 
to the extent such disclosures are compatible with the purpose for 
which the information was collected. (These routine uses are not meant 
to be mutually exclusive and may overlap in some cases.)
    BRU-1. Violations of Law, Regulation, Rule, Order, or Contract. If 
any system record, on its face or in conjunction with other 
information, indicates a violation or potential violation of law 
(whether civil or criminal), regulation, rule, order, or contract, the 
pertinent record may be disclosed to the appropriate entity (whether 
federal, state, local, joint, tribal, foreign, or international), that 
is charged with the responsibility of investigating, prosecuting, and/
or enforcing such law, regulation, rule, order, or contract.
    BRU-2. Non-FBI Employees. To contractors, grantees, experts, 
consultants, students, or other performing or working on a contract, 
service, grant, cooperative agreement, or other assignment for the 
Federal Government, when necessary to accomplish an agency function.
    BRU-3. Appropriate Disclosures to the Public. To the news media or 
members of the general public in furtherance of a legitimate law 
enforcement or public safety function as determined by the FBI, e.g., 
to assist in locating fugitives; to provide notifications of arrests; 
to provide alerts, assessments, or similar information on potential 
threats to life, health, or property; or to keep the public 
appropriately informed of other law enforcement or FBI matters or other 
matters of legitimate public interest where disclosure could not 
reasonably be expected to constitute an unwarranted invasion of 
personal privacy. (The availability of information in pending criminal 
or civil cases will be governed by the provisions of 28 CFR 50.2.)
    BRU-4. Courts or Adjudicative Bodies. To a court or adjudicative 
body, in matters in which (a) the FBI or any FBI employee in his or her 
official capacity, (b) any FBI employee in his or her individual 
capacity where the Department of Justice has agreed to represent the 
employee, or (c) the United States, is or could be a party to the 
litigation, is likely to be affected by the litigation, or has an 
official interest in the litigation, and disclosure of system records 
has been determined by the FBI to be arguably relevant to the 
litigation. Similar disclosures may be made in analogous situations 
related to assistance provided to the Federal Government by non-FBI 
employees (see BRU-2).
    BRU-5. Parties. To an actual or potential party or his or her 
attorney for the purpose of negotiating or discussing such matters as 
settlement of the case or matter, or informal discovery proceedings, in 
matters in which the FBI has an official interest and in which the FBI 
determines records in the system to be arguably relevant.
    BRU-6. As Mandated by Law. To such recipients and under such 
circumstances and procedures as are mandated by Federal statute or 
treaty.
    BRU-7. Members of Congress. To a Member of Congress or a person on 
his or her staff acting on the Member's behalf when the request is made 
on behalf and at the request of the individual who is the subject of 
the record.
    BRU-8. NARA/GSA Records Management. To the National Archives and 
Records Administration and the General Services Administration for 
records management inspections and such other purposes conducted under 
the authority of 44 U.S.C. 2904 and 2906.
    BRU-9. Auditors. To any agency, organization, or individual for the 
purposes of performing authorized audit or oversight operations of the 
FBI and meeting related reporting requirements.
    BRU-10. Former Employees. The DOJ may disclose relevant and 
necessary information to a former employee of the Department for 
purposes of: responding to an official inquiry by a federal, state, or 
local government entity or professional licensing authority, in 
accordance with applicable Department regulations; or facilitating 
communications with a former employee that may be necessary for 
personnel-related or other official purposes where the Department 
requires information and/or consultation assistance from the former 
employee regarding a matter within that person's former area of 
responsibility. (Such disclosures will be effected under procedures 
established in title 28, Code of Federal Regulations, sections 16.300-
301 and DOJ Order 2710.8C, including any future revisions.)
            FBI RECORDS SYSTEMS TO WHICH THESE BLANKET ROUTINE USES DO 
                    NOT APPLY:
    These blanket routine uses shall not apply to the following FBI 
Privacy Act systems of records (to which shall apply only those routine 
uses established in the records system notice for the particular 
system):
    JUSTICE/FBI-017, National DNA Index System (NDIS) (last published 
in the Federal Register on July 18, 1996, at 61 FR 37495); and
    JUSTICE/FBI-018, National Instant Criminal Background Check System 
(NICS) (last published in the Federal Register on November 25, 1998, at 
63 FR 65,223).
JUSTICE/FBI-003
            SYSTEM NAME:
    Bureau Mailing Lists.
            SYSTEM LOCATION:
    Records may be maintained at all locations at which the Federal 
Bureau of Investigation (FBI) operates, including: J. Edgar Hoover 
Bldg., 935 Pennsylvania Ave., NW., Washington, DC 20535; FBI Academy, 
Quantico, VA 22135; FBI Criminal Justice Information Services (CJIS) 
Division, 1000 Custer Hollow Rd., Clarksburg, WV 26306; and FBI field 
offices, legal attaches, and information technology centers as listed 
on the FBI's Internet website, http://www.fbi.gov, including any future 
revisions to the website.
            CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    All persons appearing on mailing lists maintained throughout the 
FBI to facilitate mailings to multiple addressees in furtherance of FBI 
activities. These include persons who have requested Bureau material, 
persons who are routinely forwarded unsolicited Bureau material and who 
meet established criteria (generally law enforcement or closely related 
interests), and persons who may be in a position to furnish assistance 
in furtherance of the FBI's mission. These do not include persons on 
mailing lists not encompassed within this system as described in the 
section titled ``Categories of Records in the System.''
            CATEGORIES OF RECORDS IN THE SYSTEM:
    Records may include name, address, business affiliation, and 
supplemental information related to addressees and relevant to a list's 
purpose. These do not, however, include mailing lists which have been 
incorporated into some other FBI records system, such as a mailing list 
supporting a particular investigation maintained as an investigative 
record within the FBI's Central Records System.
            AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Title 5, United States Code, section 301; title 44, United States 
Code, section 3101; title 28, United States Code, section 533; and 
title 28, Code of Federal Regulations, section 0.85.
            PURPOSE(S):
    System records are used for mailing FBI material to multiple 
addressees, via hard copy, e-mail, or other means of distribution, in 
furtherance of FBI activities. For example, various fugitive alerts are 
furnished to local law enforcement agencies, investigations periodicals 
are provided to law enforcement professionals, and information on local 
law enforcement issues may be provided to community leaders.
            ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING 
                    CATEGORIES OF USERS AND THE PURPOSES OF SUCH USES:
    The FBI may disclose relevant system records in accordance with any 
blanket routine uses established for FBI records systems. See Blanket 
Routine Uses Applicable for FBI records systems. See Blanket Routine 
Uses Applicable to More Than One FBI Privacy Act System of Records, 
Justice/FBI-BRU, as published today in the Federal Register (and any 
future revisions).
    In addition, as a routine use specific to this system, the FBI may 
disclose relevant system records to the following persons or entities 
under the circumstances or for the purposes described below, to the 
extent such disclosures are comptiable with the purpose for which the 
information was collected. (Routine uses are not meant to be mutually 
exclusive and may overlap in some cases.)
    A. To a federal, state, local, joint, tribal, foreign, 
international, or other public agency/organization, or to any person or 
entity in either the public or private sector, domestic or entity in 
either the public or private sector, domestic or foreign, where such 
disclosure may promote, assist, or otherwise serve law enforcement 
interests. By way of example and not limitation, such disclosures may 
for instance include: Sharing names of law enforcement professionals 
receiving FBI periodicals with law enforcement agencies interested in 
reaching a similar audience; sharing information of intelligence value 
with other law enforcement on intelligence agencies to whose lawful 
responsibilities the information may be germane; or sharing information 
pertinent to victim/witness assistance with local government entities 
in furtherance of such assistance.
            POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, 
                    RETAINING, AND DISPOSING OF RECORDS IN THE SYSTEM:
            STORAGE:
    Most information is maintained in computerized form and stored in 
memory, on disk storage, on computer tape, or other computer media. 
However, some information may also be maintained in hard copy (paper) 
or other form.
            RETRIEVABILITY:
    Information typically will be retrieved by an ID number assigned by 
computer or by name of person or organization.
            SAFEGUARDS:
    System records are maintained in limited access space in FBI 
facilities and offices. Computerized data is password protected. All 
FBI personnel are required to pass an extensive background 
investigation. The information is accessed only by authorized FBI 
personnel or by non-FBI personnel properly authorized to assist in the 
conduct of an agency function related to these records.
            RETENTION AND DISPOSAL:
    FBI offices revised the lists as necessary. The records are 
destroyed, under authority granted by the National Archives and Records 
Administration, when administrative needs are satisfied (Job. No. NC1-
65-82-4, part E, item 13 (I)).
            SYSTEM MANAGER(S) AND ADDRESS:
    Director, FBI, 935 Pennsylvania Ave., NW, Washington, DC 20535-
0001.
            NOTIFICATION PROCEDURES:
    Same as Record Access Procedures.
            RECORD ACCESS PROCEDURES:
    A request for access to a record from the system shall be made in 
writing with the envelope and the letter clearly market ``Privacy Act 
Request''. Include in the request your full name and complete address. 
The requester must sign the request; and, to verify it, the signature 
must be notarized or submitted under 28 U.S.C. 1746, a law that permits 
statements to be made under penalty of perjury as a substitute for 
notarization. You may submit any other identifying data you wish to 
furnish to assist in making a proper search of the system. Requests for 
access to information maintained at FBI Headquarters must be addressed 
to the Director, Federal Bureau of Investigation, 935 Pennsylvania 
Ave., NW, Washington, DC 20535-0001. Requests for information 
maintained at FBI field offices, legal attaches, information technology 
centers, or other locations must be made separately and addressed to 
the specific field office, legal attache, information technology 
center, or other location as listed on the FBI's Internet website, 
http://www.fbi.gov, including any future revisions to the website.
            CONTESTING RECORD PROCEDURES:
    Individuals desiring to contest or amend information maintained in 
the system should also direct their request to the appropriate FBI 
office, stating clearly and concisely what information is being 
contested, the reasons for contesting it, and the proposed amendment to 
the information sought.
            RECORD SOURCE CATEGORIES:
    The mailing list information is based on information supplied by 
affected individuals/organizations, public source data, and/or 
information already in other FBI records systems.
            SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.
JUSTICE/FBI 006
            SYSTEM NAME:
    Electronic Surveillance (ELSUR) Indices.
            SYSTEM LOCATION:
    Records may be maintained at all locations at which the Federal 
Bureau of Investigation (FBI) operates, including: J. Edgar Hoover 
Bldg., 935 Pennsylvania Ave., NW, Washington, DC 20535; and FBI field 
offices and information technology centers as listed on the FBI's 
Internet website, http://www.fbi.gov, including any future revisions to 
the website.
            CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    Individuals and entities who have been the targets of electronic 
surveillance coverage sought, conducted, or administered by the FBI 
pursuant to a court order or other authority; those who have been a 
party to a communication monitored/recorded electronically pursuant to 
a court order, consensual monitoring, or other authorized monitoring 
sought, conducted, or administered by the FBI; and those who own, 
lease, license, hold a possessor interest in, or commonly use the 
location subjected to electronic surveillance.
            CATEGORIES OF RECORDS IN THE SYSTEM:
    The ELSUR Indices are comprised of four types of records:
    1. Principal records identify, by true name or best known name, all 
persons, entities, and facilities who have been the targets of 
electronic surveillance coverage sought, conducted, or administered by 
the FBI pursuant to a court order or other authority. These records 
include, but are not limited to, persons, entities, and facilities 
named in an application filed by the FBI in support of an affidavit 
seeking a court order to conduct or administer an electronic 
surveillance. Principal records may also include descriptive data 
associated with the name appearing on the record.
    2. Proprietary-interest records identify entities and/or 
individuals who own, lease, license, hold a possessory interest in, or 
commonly use the location subjected to an electronic surveillance. 
Proprietary-interest records may also include descriptive data 
associated with the name appearing on the record.
    3. Intercept records identify, by true name or best known name, 
individuals who have been reasonably identified by a first name or 
initial and a last name as being a party to a communication monitored/
recorded electronically by the FBI pursuant to an electronic 
surveillance. Intercept records also identify entities that have been a 
party to a communication monitored/recorded electronically by the FBI 
pursuant to an electronic surveillance. Intercept records may include 
descriptive data associated with the name appearing on the record.
    4. Reference records identify, by partial name, such as a first 
name only, last name only, code name, nickname, or alias those 
individuals who have been a party to a communication monitored/recorded 
electronically by the FBI pursuant to an electronic surveillance, and 
may include descriptive data associated with the individual. If the 
individual is later identified by a more complete name, e.g., through 
further monitoring or normal investigative procedures, the reference 
record is re-entered as an intercept record.
            AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    The ELSUR Indices were initiated in October, 1966, at the 
recommendation of the Department of Justice and relate to electronic 
surveillance sought, administered, and/or conducted by the FBI since 
January 1, 1960. The authority for the maintenance of these records is 
title 5, United States Code, section 301; title 44, United States Code, 
section 3101; title 18, United States Code, section 2510, et seq.; 
title 18, United States Code, section 3504; title 28, United States 
Code, section 533, title 50, United States Code 1801, et seq.; and 
title 28, Code of Federal Regulations, section 0.85.
            PURPOSE(S):
    These records are used by the FBI to maintain certain information 
regarding electronic surveillance sought, conducted or administered by 
the FBI in order to permit the agency to respond to judicial inquiries 
about possible electronic surveillance coverage of any individual or 
entity involved in Federal court proceedings and to enable the 
Government to certify, as requested by federal, state or local law 
enforcement agencies, whether or not an individual, entity, facility, 
or place on whom a court ordered authority is being sought for 
electronic surveillance coverage has ever been subjected to electronic 
surveillance coverage in the past.
            ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING 
                    CATEGORIES OF USERS AND THE PURPOSES OF SUCH USES:
    The FBI may disclose relevant system records in accordance with any 
blanket routine uses established for FBI records systems. See Blanket 
Routine Uses Applicable to More Than One FBI Privacy Act System of 
Records, Justice/FBI-BRU, as published today in the Federal Register 
(and any future revisions).
    In addition, as routine uses specific to this system, the FBI may 
disclose relevant system records to the following persons or entities 
under the circumstances or for the purposes described below, to the 
extent such disclosures are compatible with the purpose for which the 
information was collected. (Routine uses are not meant to be mutually 
exclusive and may overlap in some cases.)
    A. To the judiciary in response to inquiries about possible 
electronic surveillance coverage of any individual or entity involved 
in Federal court proceedings.
    B. To federal, state, and local law enforcement officers to enable 
the government to certify whether or not an individual, entity, 
facility, or place on whom a court ordered authority is being sought 
for electronic surveillance coverage has ever been subjected to 
electronic surveillance coverage in the past.
    C. To a federal, state, local, joint, tribal, foreign, 
international, or other public agency/organization, or to any person or 
entity in either the public or private sector, domestic or foreign, 
where such disclosure may promote, assist, or otherwise serve law 
enforcement interests. By way of example and not limitation, such 
disclosures may for instance include: Sharing information of 
intelligence value with other law enforcement or intelligence agencies 
to whose lawful responsibilities the information may be germane; 
disclosing information to another law enforcement or intelligence 
agency which may bear on the suitability of a person for employment or 
continued employment with that agency; disclosing information to a 
cognizant employer or clearance-granting authority which may bear on 
the trustworthiness of a person to obtain or retain a security 
clearance; or sharing information pertinent to victim/witness 
assistance with local government entities in furtherance of such 
assistance.
    D. To any person or entity in either the public or private sector, 
domestic or foreign, if deemed by the FBI to be reasonable and helpful 
in eliciting information or cooperation from the recipient for use by 
the FBI in the performance of an authorized function, e.g., disclosure 
of personal information to a member of the public in order to elicit 
his/her assistance/cooperation in a criminal, security, or employment 
background investigation.
    E. To any person or entity in either the public or private sector, 
domestic or foreign, where there is reason to believe that a person or 
entity could become the target of a particular criminal activity or 
conspiracy, to the extent the disclosure of information is deemed by 
the FBI to be reasonable and relevant to the protection of life, 
health, or property of such target.
            POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, 
                    RETAINING, AND DISPOSING OR RECORDS IN THE SYSTEM:
            STORAGE:
    The majority of the records are maintained in an automated data 
base. Some records are maintained in hard-copy (paper) format or other 
form.
            RETRIEVABILITY:
    Information typically will be retrieved by the name of the 
individual or entity. Telephone numbers and other such serial or 
identification numbers are retrievable numerically. Locations targeted 
are retrievable by street name.
            SAFEGUARDS:
    System records are maintained in limited access space in FBI 
facilities and offices. Computerized data is password protected. All 
FBI personnel are required to pass an extensive background 
investigation. The information is accessed only by authorized FBI 
personnel or by non-FBI personnel properly authorized to assist in the 
conduct of an agency function related to these records.
            RETENTION AND DISPOSAL:
    A reference record is purged if the individual is later identified 
by a more complete name and re-entered as an intercept record. 
Remaining reference records are purged from the system as follows: 
Those relating to court ordered electronic surveillance are purged six 
months from the date the corresponding authorization for the 
surveillance expires. Reference records relating to consensual 
intercepts are purged one year from the last intercept date shown on 
the record. Until advised to the contrary by the Department, the 
courts, or the Congress, all other indices records will be maintained 
indefinitely and have been declared permanent by the National Archives 
and Records Administration (NARA) (Job No. NC1-65-82-4, Part E, item 2 
(t)).
            SYSTEM MANAGER(S) AND ADDRESS:
    Director, Federal Bureau of Investigation, 935 Pennsylvania Avenue, 
NW, Washington, DC 20535.
            NOTIFICATION PROCEDURE:
    Same as Record Access Procedures.
            RECORD ACCESS PROCEDURES:
    A request for notification as to whether a record about an 
individual exists in the system and/or for access to a record from the 
system shall be made in writing with the envelope and the letter 
clearly marked ``Privacy Act Request.'' Include in the request your 
full name and complete address. The requests must sign the request; 
and, to verify it, the signature must be notarized or submitted under 
28 U.S.C. 1746, a law that permits statements to be made under penalty 
of perjury as a substitute for notarization. You may submit any other 
identifying data you wish to furnish to assist in making a proper 
search of the system. Requests for access to information maintained at 
FBI Headquarters must be addressed to the Director, Federal Bureau of 
Investigation, 935 Pennsylvania Avenue, NW, Washington, DC 20535-0001. 
Requests for information maintained at FBI field offices, information 
technology centers, or other locations must be made separately and 
addressed to the specific field office, information technology center, 
or other location as listed on the FBI's Internet website, http://
www.fbi.gov, including any future revisions to the website.
    Some information may be exempt from notification and/or access 
procedures as described in the section titled ``Systems Exempted from 
Certain Provisions of the Act.'' An individual who is the subject of 
one or more records in this system may be notified of records that are 
not exempt from notification and may access those records that are not 
exempt from disclosure. A determination on notification and access will 
be made at the time a request is received.
            CONTESTING RECORD PROCEDURES:
    If you desire to contest or amend information maintained in the 
system, you should also direct your request to the appropriate FBI 
office, stating clearly and concisely what information is being 
contested, the reasons for contesting it, and the proposed amendment to 
the information sought.
    Some information may be exempt from contesting record procedures as 
described in the section titled ``Systems Exempted from Certain 
Provisions of the Act.'' An individual who is the subject of one or 
more records in this system may contest and pursue amendment of those 
records that are not exempt. A determination whether a record may be 
subject to amendment will be made at the time a request is received.
            RECORD SOURCE CATEGORIES:
    Information in the indices is derived from electronic surveillance, 
public source information, and other FBI record systems.
            SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    The Attorney General has exempted this system from subsections 
(c)(3) and (4), (d), (e)(1), (2) and (3), (e)(4)(G) and(H), (e)(5) 
and(8), (f), (g) and (m) of the Privacy Act pursuant to 5 U.S.C. 
552a(j). Rules have been promulgated in accordance with the 
requirements of 5 U.S.C. 553(b), (c) and (e) and have been published in 
the Federal Register.

[FR Doc. 01-15675 Filed 6-21-01; 8:45 am]

BILLING CODE 4410-02-M

DEPARTMENT OF JUSTICE
Antitrust Division

Notice Pursuant to the National Cooperative Research and Production Act 
of 1993--National Center for Manufacturing Sciences (NCMS): Advanced 
Embedded Passives Technology

    Notice is hereby given that, on May 23, 2001, pursuant to section 
6(a) of the National Cooperative Research and Production Act of 1993, 
15 U.S.C. 4301 et seq. (``the Act''), National Center for Manufacturing 
Sciences (NCMS): Advanced Embedded Passives Technology has filed 
written notifications simultaneously with the Attorney General and the 
Federal Trade Commission disclosing changes in its membership status. 
The notifications were filed for the purpose of extending the Act's 
provisions limiting the recovery of antitrust plaintiffs to actual 
damages under specified circumstances. Specifically, SAS Circuits, 
Inc., Littleton, CO has been added as a party to this venture. Also, 
HADCO Corporation, Salem, NH and Ormet Corporation, Carlsbad, CA have 
been dropped as parties to this venture.
    No other changes have been made in either the membership or planned 
activity of the group research project. Membership in this group 
research project remains open, and National Center for Manufacturing 
Sciences (NCMS): Advanced Embedded Passives Technology intends to file 
additional written notification disclosing all changes in membership.
    On October 7, 1998, National Center for Manufacturing Sciences 
(NCMS): Advanced Embedded Passives Technology filed its original 
notification pursuant to section 6(a) of the Act. The Department of 
justice published a notice in the Federal Register pursuant to section 
6(b) of the Act on January 22, 1999 (64 FR 3571).
    The last notification was filed with the Department on August 5, 
1999. A notice was published in the Federal Register pursuant to 
section 6(b) of the Act on March 21, 2000 (65 FR 15176).

Constance K. Robinson,
Director of Operations, Antitrust Division.

[FR Doc. 01-15672 Filed 6-21-01; 8:45 am]

BILLING CODE 4410-11-M
DEPARTMENT OF JUSTICE
Antitrust Division

Notice Pursuant to the National Cooperative Research and Production Act 
of 1933--The National Center for Manufacturing Sciences, Inc.

    Notice is hereby given that, on May 15, 2001, pursuant to section 
6(a) of the National Cooperative Research and Production Act of 1993, 
15 U.S.C. 4301 et seq. (``the Act''), the National Center for 
Manufacturing Sciences, Inc. has filed written notifications 
simultaneously with the Attorney General and the Federal Trade 
Commission disclosing changes in its membership status. The 
notifications were filed for the purpose of extending the Act's 
provisions limiting the recovery of antitrust plaintiffs to actual 
damages under specified circumstances.
    Specifically, Automated Precision Inc., Gaithersburg, MD; 
Cincinnati Machine Division of Unova, Inc., Cincinnati, OH; CoCreate 
Software, Inc., Fort Collins, CO; ComauPico, Inc., Southfield, MI; 
Defense Modeling and Simulation Office of the U.S. Department of 
Defense, Alexandria, VA; Electronic Data Systems, Inc, Troy, MI; 
Holagent Corporation, Gilroy, CA; Hydrogen Technology Applications, 
Inc, Clearwater, FL; Johann A. Krause Inc., Auburn Hills, MI; Johnson 
Controls, Inc., Plymouth, MI; LFX Technologies LLC, Bloom field Hills, 
MI; Manufacturing Resources, Inc., Cleveland, OH; Michigan 
Technological University, Houghton, MI; Sulzer Metco Inc., Westbury, 
NY; and Tecumseh Products Company, Tecumseh, MI have been added as 
parties to this venture.
    Also, Aesop, Inc., Concord, NH; American Induction Heating 
Corporation, Fraser, MI; Ascent Logic Corporation, Northville, MI; 
Auto-Air Composites, Inc., Lansing, MI; Bencyn West LLC, North 
Highlands, CA; Center for Clean Industrial and Treatment Technologies 
(CenCITT), Houghton, MI; Corning, Inc., NY; Dow-United Technologies 
Composite Products, Inc., Wallingford, CT; Eaton Corporation, 
Cleveland, OH; FileNET Corporation, Denver, CO; The Federal Trchnology 
Center, North Highlands, CA; Flame Spray Industries, Inc., Port 
Wahington, NY; Gensym Corporation, Cambridge, MA; Hewlett-Packard 
Company, Kirkland, Quebec, CANADA; IBD, Inc., Winnetka, IL; Indium 
Corporation of America, Utica, NY; Information Transport Associates, 
Inc., Annapolis, MD; Iowa State University, Ames, IA; Michigan Virtual 
Automotive College, Ann Arbor, MI; Midwest Manufacturing Technology 
Corporation, St. Louis, MO; Minnesota Technology, Inc., St. Cloud, MN; 
MSC Software Corporation, Costa Mesa, CA; MSE Technology Applications, 
Inc., Butte, MT; Progressive Tool & Industries Company, Southfield, MI; 
Remmele Engineering, Inc., Big Lake, MN; Schafer Corporation, 
Albuquerque, NM; Setco Industries, Inc., Cincinnati, OH; Teknowledge 
Corporation, Palo Alto, CA; Trellis Software and Controls, Inc., 
Rochester Hills, MI; Trust Data Solutions, San Jose, CA; TRW Integrated 
SupplyChain Solutions, Reston, VA; University of New Hampshire, Durham, 
NH; and UNOVA-Industrial Automation Systems, Cincinnati, OH have been 
dropped as parties to this venture.
    No other changes have been made in either the membership or planned 
activity of the group research project. Membership in this group 
research project remains open, and the National Center for 
Manufacturing Sciences, Inc. intends to file additional written 
notification disclosing all changes in membership.
    On February 20, 1987, the National Center for Manufacturing 
Sciences, Inc. filed its original notification pursuant to section 6(a) 
of the Act. The Department of Justice published a notice in the Federal 
Register pursuant to section 6(b) of the Act on March 17, 1987 (52 FR 
8375).
    The last notification was filed with the Department on December 20, 
2000. A notice has not yet been published in the Federal Register.

Constance K. Robinson,
Director of Operations, Antitrust Division.

[FR Doc. 01-15673 Filed 6-21-01; 8:45 am]

BILLING CODE 4410-11-M

    Question. With respect to each of the three databases, please 
explain how the timeliness requirement--which sought to ensure that 
computer records were as current as possible--interfered with effective 
law enforcement. Don't we want our records to be as current as 
possible, and don't we want to create incentives for agencies like the 
FBI to meet that standard?
    Answer. As to each of these databases, the FBI continuously strives 
to keep all records as current as feasible. The exemption allows the 
FBI the necessary leeway to collect information that may be crucial to 
the successful conduct of the FBI's mission.
    In the collection of information for law enforcement purposes it 
may be impossible to determine in advance what information may still be 
of current utility. With the passage of time, seemingly irrelevant or 
untimely information may acquire new significance as further 
investigation brings new details to light. The restrictions imposed by 
paragraph (e)(5) of the Privacy Act would limit the ability of 
investigators to exercise their judgment in acquiring and exploiting 
potentially significant information (during which information quality 
can be validated through links, relationships and other evidence 
discovered during investigative efforts.) Assessing the investigative 
utility of retention and use of even very old information should thus 
be left to the investigative discretion of the FBI.
    Additionally, many records in the systems come from other federal, 
state, local, joint, foreign, tribal, and international agencies, and 
it is administratively impossible for the FBI to guarantee the records 
comply with paragraph (e)(5).
    Because NCIC functions almost exclusively as a medium for 
information exchange, additional quality assurance procedures are in 
place. The exemption has not changed NCIC's program requirements for 
entry, audit, validation, and hit confirmation of NCIC records that are 
applicable to NCIC users. For instance, the NCIC 2000 manual explains 
the requirements of ``timely entry'' for NCIC 2000 files and explains 
records should be complete and include all information available on a 
person or property at the time of entry.
    For CRS and NCAVC, in the course of an investigation, retained 
information is reviewed at reasonable intervals to determine its 
relevance. Analysts, case agents, task force members, supervisors, and 
legal counsel may perform reviews as necessary.
    Specific to NCAVC's VICAP, there is no federal statute requiring 
reports of homicide or other, serial, violent crime to be sent to a 
central location or clearinghouse. On their own initiative, several 
states have enacted mandatory reporting laws requiring timely 
submission of homicide or violent crime data to a central state 
authority. Thus, submission of a case in the VICAP database is 
voluntary on the part of the law enforcement entity with original 
jurisdiction for the offense under investigation. Once submitted, cases 
are subject to initial quality control. Reports of additional 
investigation, including laboratory results, inclusion or elimination 
of suspects, or arrest and conviction of an offender, are forwarded to 
VICAP upon the initiative of the investigator. Periodically, VICAP 
staff members may contact submitting agencies or investigators and 
request updated information.
    VICAP has demonstrated that prompt submission of cases produces 
valuable investigative results. An example is the Rafael Resendez-
Ramirez investigation. Before Mr. Resendez was identified, and when 
only three of his offenses in Texas were linked to him (there would be 
a total of six murders allegedly committed in Texas by Mr. Resendez), 
the command post in Texas notified VICAP. A murder and sexual assault 
committed in Kentucky were located in the VICAP database, and 
information concerning them was relayed to the command post. DNA 
evidence linked the Texas murders and the Kentucky murder before Mr. 
Resendez was identified.
    Question. With respect to each of the three databases, please 
explain how the other requirements that were lifted by the new rule--
that is; accuracy, relevance, and completeness--interfered with the 
legitimate collection of information for law enforcement purposes.
    Answer. See preceding response.
    Question. The new rule states that the Justice Department is 
currently reviewing additional changes to 28 CFR Part 16 for possible 
promulgation in future rulemaking. Please describe the changes the 
Department is considering.
    Answer. The FBI periodically reviews all systems and proposes 
amendments to the rule, as necessary, to further important FBI mission 
interests, implement clerical improvements, etc. For example, for ease 
of reference, the FBI may consider reorganizing the format of the rule, 
placing systems in a more logical order and eliminating the frequent 
cross-references within the rule.
                             dna initiative
    Question. Last month, the Administration unveiled a proposal to 
spend more than $1 billion over five years on forensic DNA programs. 
This proposal is overdue, but it is welcome, and it will make a 
difference. For two years, I have been urging the Administration and 
House Republicans to fully fund existing programs aimed at eliminating 
the DNA backlog crisis and, in particular, the inexcusable backlog of 
untested rape kits. Across the country, untested critical evidence has 
been piling up while rapists and killers remain at large, victims 
continue to anguish, and statutes of limitation expire. It is about 
time that we made this a national priority.
    The President's DNA Initiative includes $5 million a year for post-
conviction DNA tests that can be used by inmates to prove their 
innocence. This proposal is also long overdue. Post-conviction DNA 
testing has already been used to exonerate more than 120 prisoners 
nationwide, including 12 awaiting execution. Last year the Justice 
Department cancelled plans to spend $750,000 on a post-conviction DNA 
testing initiative, and diverted the money to another program. When I 
wrote the Department about this development, I was informed--in a 
letter dated May 8, 2002--that ``the Department does not plan to 
undertake a national effort to promote and fund post-conviction DNA 
testing.'' I am pleased that the Department has changed its position.
    The Administration proposes spending $232.6 million in federal 
funding for fiscal year 2004, which includes $100.7 million in new 
funding. Are these amounts reflected in the President's official budget 
request for fiscal year 2004?
    Answer. The President's DNA Initiative--Advancing Justice Through 
DNA Technology--calls for $232.6 million in federal funding for fiscal 
year 2004. This includes $100.7 million in new funding. Of the $232.6 
million, $177 million is proposed for DNA initiatives to be 
administered by the Office of Justice Programs (OJP) and $42.1 million 
is to be administered by the Federal Bureau of Investigation. In 
addition, the $232.6 million includes $13.5 million in training 
resources from existing programs within OJP and the Community Oriented 
Policing Services that have been identified as complementary and 
supportive of the larger DNA Initiative.
    The bulk of the $177 million proposed for OJP in the fiscal year 
2004 DNA Initiative will be administered by the National Institute of 
Justice (NIJ), and will be used to assist state and local governments 
in eliminating their backlogs of crime scene and offender DNA samples, 
and to increase state and local forensic laboratory capacity to carry 
out DNA analysis. Rape kits and other crime scene evidence that sit for 
years in storage and cannot be analyzed because of inadequate resources 
or capacity are not solving crimes. The perpetrators may remain at 
large, free to commit more crimes, and the victims continue to live in 
fear.
    By addressing these problems, the DNA backlog reduction and 
laboratory capacity programs will directly result in major benefits for 
law enforcement and increased security of the public against sexually 
violent crimes, homicides, and other offenses. In addition, the Justice 
Department expects to commit substantial funds through OJP for other 
measures to strengthen the DNA identification system, such as improved 
training in the collection and handling of DNA evidence, and DNA 
technology research and development.
    The following chart displays a detailed funding breakdown of the 
fiscal year 2004 DNA Initiative.

                        [In millions of dollars]
------------------------------------------------------------------------
                                                            2004 Budget
              Element of the DNA Initiative                   Request
------------------------------------------------------------------------
Using DNA To Solve Crimes:
    Eliminating Backlogs................................            92.9
        State Casework Backlogs.........................            76.0
        State Convicted Offender Backlogs...............            15.0
        Funding the Federal Convicted Offender Program..             1.9
    Strengthening Crime Lab Capacity....................            90.4
        Increasing the Analysis Capacity of Public Crime            60.0
         Labs...........................................
        Funding FBI Forensic Analysis Programs..........            20.5
        Funding the Combined DNA Index System...........             9.9
    Stimulating Research and Development................            24.8
        Improving DNA Technology........................            10.0
        FBI Research and Development....................             9.8
        DNA Demonstration Projects......................             4.5
        The National Forensic Science Commission........             0.5
    Training the Criminal Justice Community.............            17.5
        Law Enforcement.................................             3.5
        Prosecutors, Defense Attorneys, and Judges......             2.5
        Probation & Parole Officers, Corrections                     1.0
         Personnel......................................
        Forensic Scientists.............................             3.0
        Medical Personnel...............................             5.0
        Victim Service Providers........................             2.5
Using DNA To Protect the Innocent.......................             5.0
Using DNA To Identify Missing Persons...................             2.0
                                                         ---------------
      Total Funding.....................................           232.6
------------------------------------------------------------------------

    Question. With respect to the proposal to spend $5 million a year 
for post-conviction DNA testing, how did the Department arrive at this 
amount? Will it cover the costs of post-conviction DNA testing 
nationwide?
    Answer. The President's Initiative on DNA evidence, ``Advancing 
Justice Through DNA Technology'' calls for the appropriation to the 
Department of $5 million annually to be used by the Attorney General to 
establish a grant program to help states defray the costs of post-
conviction DNA testing and, therefore, encourage states to adopt 
procedures that authorize post-conviction DNA testing in appropriate 
cases.
    The President's Initiative was developed, in part, from the 
recommendations of a task force convened by the Department's National 
Institute of Justice (NIJ) at the request of Attorney General Ashcroft 
to assess existing DNA analysis delays and develop recommendations for 
eliminating those delays. In developing this aspect of the Initiative, 
the Department conferred with members of the NIJ task force, as well as 
other public and private laboratory directors across the United States, 
to ascertain the extent and cost of the post-conviction DNA testing 
currently on-going in those states that provide for convicted offenders 
to seek such testing.
    Based on these discussions, the Department estimates that the cost 
of post-conviction DNA analysis in those states that have, or soon will 
authorize, a post-conviction DNA testing procedure will not exceed $5 
million annually for at least the next five years. This estimate 
relates to the actual cost of testing the biological evidence at issue 
in those cases, as this program is not intended to pay for the 
operational costs of law enforcement personnel in locating any evidence 
that an offender requests or that a court orders be tested.
    Question. In your remarks announcing the DNA initiative, you said 
that you looked forward to working with the ``Chairmen'' of the House 
and Senate Judiciary Committees to develop post-conviction DNA testing 
legislation. But at your confirmation hearing, you assured me that you 
would work on such legislation with ``the Congress''--not just the 
Republican Chairmen. Are you willing to honor that commitment today by 
working with me to refine and pass the Innocence Protection Act, which 
has already garnered overwhelming bipartisan support?
    Answer. The Department is committed to working with the Chairmen of 
the House and Senate Judiciary Committees, ranking minority members, 
and all of the members of the respective authorizing and Appropriations 
Committees in developing any legislation necessary to implement all 
aspects of the President's DNA Initiative, including the recommendation 
that ``Federal law also should provide for post-conviction DNA testing 
in appropriate cases,'' and in appropriating the funds necessary to 
enable the Attorney General to establish a grant program to ``help 
states defray the costs of post-conviction DNA testing.''
                  fbi enforcement of immigration laws
    Question. Traditionally, we have not had the FBI enforce our civil 
immigration laws because we wanted to encourage maximum cooperation 
between illegal immigrants and the officers looking to prevent and 
solve crimes and acts of terrorism. Do you disagree with that logic?
    Answer. Following the transfer of the Immigration and 
Naturalization Service from the Department of Justice, the new 
Department of Homeland Security is the primary immigration law 
enforcement agency. However, the safety of the American people is the 
primary concern for both the Department of Justice and the Department 
of Homeland Security.
    Pursuant to the Attorney General's longstanding authority under the 
immigration laws, last year the Attorney General delegated immigration 
law enforcement authority to officers of the Federal Bureau of 
Investigation (FBI) and the United States Marshals Service (USMS). 
Under this delegation, in certain limited circumstances, the FBI may in 
the course of its counterterrorism investigations discover that an 
alien who poses a potential threat to national security is illegally 
present in the United States and find that DHS is unable to take 
custody immediately because agents are not available.
    The FBI has issued field guidance to implement the delegation of 
authority in a manner that ensures that it is used only in appropriate 
situations, such as when DHS immigration officials are not available or 
when the public safety requires prompt action without DHS.
    As of April 15, 2003, in connection with Operation Liberty Shield, 
the FBI had interviewed 9,383 individuals and while there were 31 
arrests for immigration violations, all arrests were made by BICE 
agents. The Department of Justice and the Department of Homeland 
Security have discussed this delegation and will continue to do so.
    Question. At the same time that the FBI is now policing immigration 
violations, it is depending upon Iraqis in the United States to provide 
information of value to the U.S. war effort. Do you have any fear that 
this expansion of FBI authority will have a chilling effect on Iraqi 
cooperation?
    Answer. Because the FBI has been mindful of the constitutional 
rights and sensitivities of the Iraqi population in the United States 
in the course of our interview program, we do not believe that the 
expansion of Department of Justice (DOJ) authority will have a chilling 
effect on future efforts to reach out to the Iraqi population.
    From the beginning of the hostilities in Iraq, the FBI conducted 
approximately 10,000 interviews of Iraqis who might have knowledge of 
the Iraqi leadership, military facilities, or Iraqi activities in 
support of terrorism. These interviews were strictly voluntary and 
conducted within the confines of the Constitution:
  --FBI agents were trained and given sensitivity training for 
        conducting these interviews, and Iraqis being interviewed were 
        informed of their civil rights.
  --High-level FBI officials met with Arab-American civic leaders to 
        explain the interview process and to enhance communication 
        between the FBI and the Arab-American community.
    The response of the interviewees and the Arab-American community 
was overwhelmingly positive, and the DOJ and the FBI would like to 
thank community leaders and those interviewed for their cooperation. As 
a result of the information derived from the interviews, the FBI 
disseminated over 250 reports to assist the military in conducting the 
war and locating Saddam Hussein's weapons of mass destruction. The 
military consumers of these reports, including CENTCOM, have indicated 
that the reports were highly useful.
    Question. Considering this committee's obvious interest in both the 
FBI and the enforcement of our immigration laws, why did you fail to 
notify us of this regulation?
    Answer. The Department appreciates the Committee's interest in its 
programs. The preceding answer explains the rationale and limited use 
of this delegation.
    Question. According to the Washington Post, the FBI has drafted 
guidelines on how this new authority should be used. Would you provide 
a copy of those guidelines to the committee?
    Answer. The information follows.
                           Federal Bureau of Investigation,
                                                        02/26/2003.
    To: All FBIHQ Divisions, All Field Offices
    Attn: Assistant Director, ADIC, SAC, CDC
    From: Office of the General Counsel, Investigative Law Unit
    Contact: UC Elaine N. Lammert (202) 324-5640
    Approved By: Mueller Robert S. III, Gebhardt Bruce J., Wainstein 
Kenneth L.
    Drafted By: Rowan Patrick
    Case ID #: 66F-HQ-A1085154-MISC Serial 85
    Title: Delegation of Authority to the FBI to Exercise the Powers 
and Duties of Immigration Officers
    Enclosure.--Memorandum summarizing the power to arrest under the 
Immigration and Naturalization Act (INA) and listing a number of INA 
violations the FBI may enforce pursuant to the delegation and guidance 
contained in this communication.
    Synopsis.--This communication advises the receiving offices that 
the Attorney General has authorized Agents to exercise the functions of 
immigration officers in some circumstances and provides guidance on the 
implementation of this authority. This guidance was prepared in 
consultation with the Department of Justice, the SAC Advisory Committee 
and FBIHQ operational components.
    Details.--The Attorney General recently issued an Order delegating 
authority to exercise the powers and duties of Immigration Officers to 
the FBI. The Order, which is no in effect, grants powers that will be 
particularly useful in the FBI's counterterrorism investigations. In 
pertinent part, the Order states as follows:

    ``I authorize the Director of the Federal Bureau of Investigation 
(``FBI'') and, under this direction Special Agents of the FBI, to 
exercise the functions of immigration officers for the purposes of (1) 
investigating, determining the location of, and apprehending, any alien 
who is in the United States in violation of the Immigration and 
Nationality Act of 1952, as amended, or any other law or regulation 
relating to visas or the conditions of visas, admission of aliens or 
the conditions of admission, or the maintenance of status as an 
immigrant or nonimmigrant or in any category of nonimmigrant; or (2) 
enforcing any requirements of such statutes or regulations, including, 
but not limited to, nonimmigrant aliens subject to special registration 
under 8 C.F.R. Sec. 264.1(f).

    This communication is to provide guidance on the implementation of 
this Order.
    Even prior to the issuance of the Attorney General's Order the FBI 
possessed broad authority to investigate criminal violations related to 
immigration offenses under both Title 18 and Title 8 of the United 
States Code and to arrest those who commit such criminal violations. 
There will be no change in the handling or the classification of those 
investigations. The Attorney General's Order expands the FBI's 
authority to include the investigation and arrest of aliens who have 
committed or are committing non-criminal, i.e., civil violations of the 
Immigration and Nationality Act of 1952 (INA) and related statutes. 
This guidance addresses the handling of aliens who are non-criminal 
violators.
    At the outset, it should be understood that the Immigration and 
Naturalization Service and its successor within the Department of 
Homeland Security (referred to hereafter collectively as the ``INS'') 
will retain primary jurisdiction over the enforcement of immigration 
statutes, including both criminal and civil violations of the INA. the 
FBI will not create a separate investigative program to cover 
violations of the INA, as these violations will ordinarily be addressed 
only in support of existing investigative programs. Individuals 
detained or arrested for immigration violations should be turned over 
to INS' custody as soon as possible. The Attorney General's Order 
provides authority in those circumstances when agents of the INS are 
not immediately available to take custody of an alien violator. It also 
provides a basis for the apprehension of alien violators encountered in 
the course of the FBI's counterterrorism investigations.
    In all instances, the Order should be employed in a manner that 
strengthens the FBI's ability to address its priorities, rather than 
diverting from them. Accordingly, as a general rule, when, during the 
course of an investigation, agents encounter an alien who is reasonably 
believed to be in violation of the INA, they should exercise their 
authority under the Order to detain, question, and, if justified, 
arrest the alien if the exercise of these powers will serve the 
objectives of the investigation. Conversely, if the exercise of these 
powers will harm or undermine the investigation, agents are under no 
obligation to do so. Even in the absence of an ongoing investigation, 
agents should exercise all appropriate authority under this Order when 
necessary to prevent serious bodily injury or destruction of property. 
With respect to counterterrorism investigations in particular, and 
keeping in mind the FBI's primary mission of preventing acts of 
terrorism against American interests, agents should not hesitate to 
exercise any or all of their lawful authority under the Order as 
appropriate to serve this vital mission, or to refrain from exercising 
these powers if, in the judgment of the agent, the FBI's investigative 
interests are best served by doing so.\1\
---------------------------------------------------------------------------
    \1\ In furtherance of its mission to prevent acts of terrorism, the 
FBI has at its disposal the National Security Entry-Exit Registration 
System (NSEERS) database, maintained by the INS. This database contains 
comprehensive information on temporary visitors to the United States 
who are from countries designated by the Attorney General or who meet 
pre-existing criteria related to national security. Any NSEERS 
registrant who violates his requirements (e.g., by overstaying his 
visa, or by failing to verify his address and activities with the INS 
after violations are immediately identified by NSEERS, and, like other 
violations of the INA, the NSEERS violation may serve as a basic for 
arrest when arrest of the violator will advance an investigation and 
the FBI's operation priorities. In such cases, the INS should be 
notified and consulted as soon as possible. In addition, FBI personnel 
supervising counterterrorism investigations should regularly consult 
the NSEERS database to determine if aliens who have violated their 
requirements have any connection to terrorist suspects already under 
FBI investigation.
---------------------------------------------------------------------------
    There may be instances, unrelated to ongoing investigations, in 
which the FBI will receive requests for assistance from state or local 
law enforcement who have detained aliens for immigration violations. 
Such requests should ordinarily be referred to the INS. In those 
instances in which the INS is unable to respond to the request, each 
ADIC or SAC should exercise his or her discretion, based on resources 
and other relevant considerations, as to whether to provide the 
requested assistance and, if so, to what extent.
    The Order grants FBI agents the authority to exercise the powers to 
arrest an alien without warrant set forth in Title 8, U.S. Code, 
Section 1357. Under that section, agents may arrest an alien when they 
have reason to believe the alien is present in the United States in 
violation of an immigration provision of the INA, a standard that can 
be met by an admission from the alien, a review of immigration records, 
or other reliable information. In many cases, agents will be unable to 
make a determination that an alien is in violation without the 
assistance of the INS. Each Field Office should consult with their 
local INS office to develop a procedure for obtaining such assistance 
on a local level. In addition, the INS maintains a Law Enforcement 
Support Center that is staffed around the clock and can perform record 
checks and provide other assistance.
    Each Field Office should also consult with their local INS office 
to formulate procedures for the prompt transfer to INS' custody of any 
alien arrested by the FBI under the authority of the Attorney General's 
Order. Any arrest made under the authority of this Order should be 
properly documented in an FD-302.
    Attached hereto is a memorandum, prepared by the Office of General 
Counsel, summarizing a number of the commonly-encountered INA 
violations. In the near future, Headquarters personnel will be working 
with their counterparts at the INS and then the Department of Homeland 
Security to resolve issues arising from this Order. Training materials 
on immigration enforcement will soon be disseminated through the Chief 
Division Counsel of each Field Office, and additional training will be 
provided in the course of the upcoming counterterrorism training 
ordered by the Deputy Attorney General.
            national security entry-exit registration system
    Question. Under the National Security Entry-Exit Registration 
System (NSEERS), male nationals from 25 countries, all but one of which 
are overwhelmingly Muslim, must register with the government if they 
meet certain criteria. As of one week ago, more than 7,000 men who 
presented themselves for registration had been notified of the 
government's intention to deport them for various violations of our 
immigration laws. Many of those 7,000 are nationals of Pakistan, a U.S. 
ally in the war on terror that has informed the United States of its 
objections to NSEERS. Earlier this year, the Senate included language 
to end the NSEERS program in our omnibus appropriations bill, but 
agreed in conference instead to demand a report about the program, from 
you, by March 1. That deadline has come and gone, even though this 
report will be critical in determining whether we continue to fund 
NSEERS, and despite the serious domestic and international 
ramifications of this program. When will you submit this report?
    Answer. The Department is continuing to assemble the materials 
required by Section 112 of Title I of Division B of Public Law 108-7. 
The material will be submitted to the Committee.
                    crime-free rural states program
    Question. Congress created the Crime-free Rural States program last 
year in the 21st Century Department of Justice Appropriations 
Authorization Act. This program authorizes $10 million for rural states 
to combat drug abuse and other crimes that increasingly affect rural 
states and have put mounting stress on rural law enforcement officers. 
Senator Hatch and I have written to the Chairman and Ranking Member of 
the subcommittee to request full funding for this program. Do you 
support our request for full funding?
    Answer. In developing the fiscal year 2004 President's Budget, the 
Department faced the challenge of managing multiple competing 
priorities with limited resources. As a result, no resources were 
specifically requested for the Crime-free Rural States program.
    However, I do appreciate the problems faced by rural law 
enforcement. In fact, the Department currently provides substantial 
resources to rural communities. For example, the Office of Justice 
Programs' (OJP) fiscal year 2004 President's Budget included $599.724 
million for the Justice Assistance Grants program, a formula program 
designed to address a wide array of criminal justice issues that would 
provide resources directly to our nation's state and local 
jurisdictions, including those in rural areas. Other OJP programs 
included in the fiscal year 2004 President's Budget that provide 
resources to rural communities across the country include: $39.460 
million for the Rural Domestic Violence program, which specifically 
targets rural communities, $47.683 million for the State and Local Gun 
Violence Assistance program, which will continue to support projects in 
rural communities; $49.387 million for the Southwest Border Initiative, 
which provides assistance to many rural prosecutors in the Southwest 
dealing with drug cases; and a total of $25.339 million in programs 
specifically requested for Tribal governments and communities, almost 
all of which are in rural areas.
                      oig oversight of dea and fbi
    Question. I have repeatedly expressed concern that the DOJ 
Inspector General's Office be as independent and strong as possible. 
Without accountability, which the Inspector General brings to the 
Department, our law enforcers will not be as efficient and as effective 
as they can be. For that reason, I sponsored bipartisan legislation, 
which was enacted as part of the landmark DOJ Authorization Act last 
Congress, that expanded the jurisdiction of the IG by statute to cover 
the FBI and DEA. In light of these important additions--and in light of 
the growth of the FBI itself as it fulfills its stated mission of 
protecting against terrorist attacks--we need to ensure that the IG's 
budget grows to meet its new responsibilities. The IG needs to have the 
resources required to examine an FBI that is retooling its computer 
systems and its entire culture. Unfortunately, however, I note that the 
President's budget request ``flat lines'' the IG's office even though 
the Republican-controlled Congress did not grant the President's entire 
requested increase for the IG in last year's Omnibus Appropriations 
bill. Please explain why the Administration is not seeking to provide 
the IG with the new resources it will need to oversee the FBI's efforts 
to modernize itself.
    Answer. The Office of the Inspector General (OIG) received 
$5,000,000 and 63 positions in fiscal year 2002 to expand the Inspector 
General's authorities in investigating employee misconduct within the 
Federal Bureau of Investigation and the Drug Enforcement 
Administration, this allowed for an 18 percent increase in staff. In 
fiscal year 2003, the OIG received an additional $2.0 million and 17 
positions, in part to address the FBI's growth in personnel and 
counterterrorism programs. These funds, coupled with the recent 
supplemental of $2,500,000 for fiscal year 2003/2004, provide 
sufficient funding for the OIG through fiscal year 2004.
 implementation of usa patriot act and other issues related to war on 
                               terrorism
    Question. In a letter dated April 1, 2003, the Chairman and Ranking 
Member of the House Judiciary Committee requested extensive information 
from the Justice Department regarding the Department's implementation 
of the USA PATRIOT Act and other issues related to the war on 
terrorism. Please provide your responses to the 38 questions posed in 
that letter, a copy of which is attached. (Attachment 1)
    Answer. In response to your letter of September 4, 2003, co-signed 
by Senate Judiciary Committee Chairman Hatch, the Department provided a 
copy of the Department's May 13, 2003, response to the April 1, 2003, 
letter from the Ranking Member of the House Judiciary Committee on 
September 9, 2003. As noted in our transmittal letter, while we made 
every effort to answer each question thoroughly and in an unclassified 
format, four of the questions required the submission of classified 
information. The answer to a portion of question 16(a), and questions 
30 and 37 are classified and were delivered to the Senate Security 
Office for the Senate Judiciary Committee under separate cover. In 
accordance with longstanding Executive branch practices on the sharing 
of operational intelligence information with the Congress, the 
classified answers to question 1(c), and a further portion of question 
16(a), were delivered to the Senate Select Committee on Intelligence.
                                 ______
                                 
                Questions Submitted by Senator Herb Kohl
         juvenile accountability incentive block grant program
    Question. Mr. Attorney General, even in a time of great domestic 
instability, we cannot forget about the important law enforcement 
functions of the DOJ. Among these responsibilities is juvenile 
delinquency prevention and enforcement. However, the fiscal year 2004 
Department of Justice budget proposal eliminates the Juvenile 
Accountability Incentive Block Grant Program (JAIBG) a program that was 
funded at $140 million last year, and more than $200 million two years 
ago. The budget justification cites that the program was found 
``ineffective'' by OMB.
    However, when we reauthorized the Department of Justice last fall, 
we also reauthorized the JAIBG program at $350 million per year. More 
importantly, we dramatically improved the program. The program purpose 
areas have been significantly expanded to provide additional services 
and treatment for troubled youth, including graduated sanctions, 
substance abuse and mental health counseling, restitution, community 
service, and supervised probation.
    Nonetheless, JAIBG has been zeroed out. The new and improved JAIBG 
has not even been given a chance by this Administration--the same 
Administration that reauthorized JAIBG just last year. I am aware that 
the Justice budget retains some funding for juvenile justice programs. 
However, a new $43 million ``Juvenile Delinquency Block Grant Program'' 
still represents almost a $100 million cut from last year's JAIBG 
program--a program authorized at $350 million. Moreover, Title V 
juvenile crime prevention programs--cut in half in the fiscal year 2003 
appropriation B are also under-funded and overly earmarked in this 
year's budget proposal.
    Why are these programs being cut at a time when the latest 
statistics suggest an up tick in juvenile crime after a steady decrease 
throughout the nineties? Now is not the time to give up juvenile 
justice programs.
    Answer. The fiscal year 2004 President's Budget request for 
juvenile justice delinquency and prevention programs focuses on those 
programs that work and provide states and local governments maximum 
flexibility. These programs include the $93.768 million Part B Formula 
Grants, the new $42.881 million Juvenile Justice Delinquency Prevention 
Block Grant Program created by the 21st Century Department of Justice 
Reauthorization Act, and the $82.255 million Title V Incentive Grants 
for Local Delinquency Prevention Program, which represents an increase 
of $36.1 million above the fiscal year 2003 enacted level. The request 
includes funding for two major activities: $69.755 million for Title V 
Delinquency Prevention Program Incentive Grants; and $12.5 million for 
the Tribal Youth Program, which awards grants directly to American 
Indian and Alaska Native communities for prevention, control, and 
juvenile justice system improvement. This is essentially the same level 
as requested in fiscal year 2001 through fiscal year 2003.
    The Juvenile Accountability Block Grant Program (JABG) was 
reauthorized under the 21st Century Department of Justice 
Reauthorization Act, which was signed into law on November 2, 2002. 
Funding for the JABG, formerly the Juvenile Accountability Incentive 
Block Grant (JAIBG) Program, was not requested because in its recent 
Program Assessment Rating Tool (PART) evaluation, OMB ranked JAIBG as 
``ineffective.'' As OMB indicated in the evaluation, program managers 
have little information on the activities and outcomes of JABG, and 
cannot verify the need for or the results of this program.
    According to the initial statutory guidance for JABG, the ultimate 
purpose of the block grants is to make juvenile offenders more 
accountable for their actions and to make the justice system more 
accountable for juveniles' safety. These stated goals make it difficult 
for managers to develop clear, outcome-based performance measures. 
Other than anecdotal evidence, the program has not demonstrated any 
measurable impact on either juvenile crime or the juvenile justice 
system to date.
    There are purpose areas in the Juvenile Delinquency Block Grant 
program that overlap with JABG purpose areas. In addition, funds under 
the proposed $599.724 million Justice Assistance Grants (JAG) program 
can be used by state and local governments to address the areas funded 
through JABG. Thus, resources will still be available to address 
juvenile offender accountability.
                          imported explosives
    Question. Federal explosives regulations require domestically 
manufactured explosives to include identifying information such as 
manufacturer, location, date, and shift of manufacture. This 
information is vital to criminal investigations when law enforcement 
authorities recover explosives. ATF can trace the purchase of 
explosives in much the same way that it traces firearms. Yet, imported 
explosives are not required to have any identification information.
    How many pounds of unmarked imported explosives enter the country--
say annually? I understand that millions of pounds of these unmarked 
explosives enter this country each year. If this is the case, should we 
not take immediate legislative action to close this loophole? Do you 
pledge to work with me on this?
    Answer. Currently there are no regulations requiring the marking of 
explosive materials imported into the United States. Federal 
regulations at 27 CFR part 555, Commerce in Explosives, administered by 
the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), require 
that licensed domestic manufacturers of explosive materials legibly 
identify all explosive materials manufactured for sale or distribution 
by placing the identity of the manufacturer and the location, date, and 
shift of manufacture on each cartridge, bag, or other immediate 
container. ATF; the Institute of Explosives Makers (IME); and the 
International Association of Bomb Technicians and Investigators (IABTI) 
recognized that these regulations do not extend similar requirements on 
importers of explosive materials. ATF; the IME; and the IABTI 
recognized that this loophole creates a major obstacle for tracing 
foreign manufactured recovered explosives, as well as results in an 
economic disadvantage by placing the marking requirement only on 
domestic producers. To that end, both the IME and IABTI petitioned ATF 
to pursue rulemaking to close this loophole. On October 16, 2002, ATF 
issued a notice of proposed rulemaking to require the marking of all 
explosive materials imported into the United States. The notice comment 
period ended January 14, 2003 and is in the final stages of review.
    There is no federal requirement for reporting the amount of 
explosives materials imported into the United States. ATF is working 
with the U.S. Customs Service to obtain a reliable figure. However, 
information from the IME indicates that there are approximately 6 
billion pounds of explosive materials used in the United States 
annually. Of that amount, approximately 2 million pounds of boosters (a 
high explosive) are imported into the United States annually. 
Additionally, industry sources have advised ATF that approximately 165 
million pounds of Chinese fireworks enter the United States annually.
              fisa (foreign intelligence surveillance act)
    Question. Press reports indicate that for the first time since FISA 
became law, surveillance requests under FISA outnumbered all of those 
under domestic law--the Washington Post reported last week that you 
personally signed more than 170 ``emergency foreign intelligence 
warrants''--this is three times the number authorized in the preceding 
23 years.
    Mr. Attorney General, can you comment on whether that is true? In 
addition, given the much greater powers granted to the government under 
FISA, can you tell us whether we should be disturbed by this trend. 
After all, the secrecy that surrounds FISA provides very little 
accountability and oversight. Are we in danger of living in a country 
where secret wiretaps and extended surveillance are the norm?
    Answer. While I cannot speak to the accuracy of press reports, as I 
have said previously, in 2002, using Foreign Intelligence Surveillance 
Act (FISA) tools, we targeted more than 1,000 international terrorists, 
spies and foreign powers who threaten our country's security. We 
requested 170 emergency FISAs. This is more than three times the total 
number of emergency FISAs obtained in the 23 years prior to September 
11.
    This is a reflection, in part, of the imminent need to protect the 
United States from potential acts of terrorism or other grave hostile 
acts from foreign powers or agents of foreign powers. I would disagree 
that the FISA provides little accountability and oversight. Every 
application that is presented to the Foreign Intelligence Surveillance 
Court (the Court) goes through a rigorous review on many levels. Before 
presenting an application to the Court, the Attorney General must 
approve the application based upon his finding that the application 
satisfies the criteria and requirements for such applications set forth 
in the FISA, including the requirement that the target of the 
surveillance or search is a foreign power or an agent of a foreign 
power. In addition, the application is certified by an appropriately 
designated official. Among other things, the official certifies that a 
significant purpose of the surveillance or search is to obtain foreign 
intelligence information. Finally, the application is presented to the 
Court for its independent judicial review. In the event that an 
application is denied by the Court, the Foreign Intelligence 
Surveillance Court of Review has jurisdiction to review such a case.
    In addition, Congress plays an important role in oversight of the 
FISA process. The Attorney General submits, on a semi-annual basis, 
detailed reports concerning activities conducted pursuant to the FISA 
to the Senate Select Committee on Intelligence, the House Permanent 
Select Committee on Intelligence, and both the House and Senate 
Judiciary Committees.
    In all cases, strict adherence to the Constitution, and observation 
of the responsibility of this government to safeguard the rights of all 
individuals regarding the Constitution, is the highest priority of the 
Department of Justice. Any surveillance or search conducted pursuant to 
the FISA is done in strict accordance with the law, and is conducted in 
ways which I believe fully respect the Constitution.
                           antitrust--telecom
    Question. A priority of the Antitrust Subcommittee has been 
promoting competition in the local and long distance phone markets. For 
many years, the Antitrust Division has had a task force--the 
Telecommunications and Media Section--devoted to monitoring competition 
in the telecom industry. Its principal responsibility has been to 
determine whether the local telephone market is open to competition 
when the incumbent Bell company applies for permission to provide long 
distance service. As you know, this is known as the Section 271 
process. The 271 process has been conducted on a state-by-state basis 
and is now nearly complete.
    With this process winding up, some observers wonder if the 
Telecommunications and Media Section is as active as it should be, and 
whether the Antitrust Division will continue to aggressively police 
anti-competitive practices in local phone markets. We must ensure that 
the markets deemed open to competition remain open, rather than 
backsliding into a monopoly environment.
    What do you see as the role of the Antitrust Division in ensuring 
competitive local phone markets in the future? Would you favor giving, 
by statute, the Telecommunications and Media Section clearly 
established periodic responsibilities to examine local phone 
competition?
    Answer. The Antitrust Division has played an important role in 
protecting competition in the telecommunications industry for decades 
and fully intends to continue doing so through vigorous antitrust 
enforcement. Following enactment of the Telecommunications Act of 1996, 
the Division has provided guidance to the FCC and the state regulatory 
agencies on the Section 271 process and has provided the FCC with an 
evaluation of each Section 271 application. Before that, the Division 
spent 14 years enforcing the 1982 antitrust consent decree that settled 
the enforcement action the Division brought against AT&T in 1974. Along 
with these responsibilities, the Division aggressively investigates 
proposed mergers and potentially anticompetitive conduct in a wide 
variety of communications and media markets.
    With the Section 271 initial application process approaching 
completion, the Division intends to continue monitoring activities in 
the telecommunications industry across the country. In states where the 
Bell Operating Company has been granted Section 271 authority, the 
Division will continue to play its traditional roles of enforcing the 
antitrust laws against Sherman Act violations and anticompetitive 
mergers, as well as engaging in competition advocacy through 
participation in FCC and state regulatory proceedings where we can 
provide competitive analysis that would assist these agencies in 
promoting and maintaining the development of local competition.
    The FCC will continue to have authority to enforce compliance with 
the specific market-opening provisions of the 1996 Act. The antitrust 
laws give the Antitrust Division sufficient authority to perform its 
broader role in protecting competition in this important marketplace, 
and the 1996 Act contains a savings clause that explicitly preserves 
the Division's antitrust enforcement authority in this area. Given our 
enforcement history and accumulated experience in telecommunications 
markets, we plan to remain fully engaged in monitoring these markets 
for possible antitrust violations. Additional authority is not needed 
in order for us to perform this role.
                             sleeper cells
    Question. What is the current status of the investigation to root 
out more terrorist sleeper cells in this country? Are we on the right 
track or do we have a long way to go?
    Answer. With the cooperation of the Joint Terrorism Task Force 
Program, the FBI successfully identified cells in Buffalo, Detroit, and 
Portland, Oregon. These investigations have resulted in convictions of 
subjects charged with offenses ranging from providing material support 
to terrorist organizations to misuse of identification documents.
    The FBI is currently working jointly with all members of the 
Intelligence Community to identify additional terrorist sleeper cells 
within the United States. Although we have identified new cells within 
the United States, and we are on the right track, the war on terrorism 
is ongoing.

                          SUBCOMMITTEE RECESS

    Senator Gregg. The next hearing will be on Tuesday, April 
8, at 10 a.m., in the Dirksen Building at 124. The subcommittee 
will be hearing testimony of SEC Chairman William Donaldson. 
This is going to be in the Senate Office Building--we are going 
to hold it over in the Capitol.
    Thank you.
    [Whereupon, at 11:25 a.m., Tuesday, April 1, the 
subcommittee was recessed, to reconvene at 10 a.m., Tuesday, 
April 8.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              


                         TUESDAY, APRIL 8, 2003

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

                   SECURITIES AND EXCHANGE COMMISSION

STATEMENT OF WILLIAM H. DONALDSON, CHAIRMAN

                OPENING STATEMENT OF SENATOR JUDD GREGG

    Senator Gregg. The committee will come to order. It is 
great to have the Chairman of the SEC here today, William 
Donaldson.
    First, I want to thank you on behalf of the Congress and 
the American people for being willing to come out of the 
private sector, with your tremendous experience and expertise, 
and take over this job. I consider it to be one of the most 
significant jobs we have in the Federal Government because it 
is the job which makes capital markets vibrant and reliable, 
and capital markets which are transparent and properly 
regulated are critical to the well-being of the American 
economy.
    International confidence in our markets is essential to the 
survival of our Nation and our free market system, so having 
your leadership at the SEC is crucial, and we are excited you 
are there.
    Senator, did you have any opening comments?
    Senator Hollings. I am equally excited and grateful that he 
would take this assignment. Thank you.
    Senator Gregg. We would be happy to hear any thoughts you 
have to add. You can summarize your statement or read it, 
however you wish to proceed.

                            OPENING REMARKS

    Mr. Donaldson. Thank you for your comments, Senator. I am 
honored to be here and to be in the position I'm in. Let me 
just make a couple of brief comments, and then we can do 
whatever you would like in terms of carrying on from there.
    I appreciate the chance to speak. Our request is for $841.5 
million. That's the largest amount that's ever been requested 
for the SEC, and it comes on the heels of last year's 
appropriation, which was the largest single year percentage 
increase ever provided the Commission. I want to thank you and 
the subcommittee for the tremendous support and leadership 
you've shown in ensuring that the Commission receives the 
resources that are necessary to fulfill our mission.
    Thanks to your efforts, the Commission has been 
appropriated $716.4 million to fund its operations this fiscal 
year as part of the omnibus appropriation. These funds will 
enable us to meet the remaining deadline for the Sarbanes-Oxley 
Act, hire over 800 new staff and advance the initial startup 
funds to the Public Company Accounting Oversight Board, improve 
our training efforts, and address our most pressing information 
technology needs.
    Ensuring that our new resources are used to promote the 
effectiveness and support the modern mission of the SEC, rather 
than simply increasing our numbers, is one of my most important 
responsibilities as Chairman. During the next several weeks and 
months I intend to get more deeply into each program area to 
verify personally that this is the best, most effective and 
efficient use of our new staffing. I would therefore like to 
reserve my option to make changes. I have been at the 
Commission I think a total of almost 8 weeks now, and my staff 
and I hope to (a) examine our budgets carefully and (b) work 
closely with the subcommittee as we finalize our resource 
allocations.

                           PREPARED STATEMENT

    As I said at the beginning, I'm honored to be Chairman of 
the SEC. I think it is the most important time in the history 
of the country to have this job, and I will be delighted to 
answer any questions you might have. Thank you.
    [The statement follows:]
               Prepared Statement of William H. Donaldson
    Chairman Gregg, Ranking Member Hollings, and Members of the 
Subcommittee: Thank you for inviting me to testify today on behalf of 
the Securities and Exchange Commission in support of the President's 
fiscal 2004 budget request. The fiscal 2004 budget request of $841.5 
million is the largest amount ever requested for the SEC and comes on 
the heels of last year's appropriation, which was the largest single-
year percentage increase ever provided to the Commission.
    At the outset, I would like to take this opportunity to thank you 
for the tremendous support and leadership you have shown in ensuring 
that the Commission receives the resources and staff necessary to 
fulfill its mission. Your backing, along with the strong support of our 
authorizing committees, demonstrates convincingly that the Congress is 
dedicated to ensuring the financial integrity and vitality of our 
markets. While recent events have shaken investor confidence in the 
financial reporting by public companies and the integrity of our 
securities markets, your support of the SEC in both fiscal 2003 and 
2004, and the landmark Sarbanes-Oxley Act, will help reinforce the 
foundations of our markets and demonstrate their resiliency.
    Although I have been at the Commission only since February 18th, I 
look forward to continuing and building on the strong and cooperative 
relationship that our Agency has developed with you in the past as we 
work together on the SEC's resource needs to implement the Sarbanes-
Oxley Act and fulfill all of our statutory duties. This is a critical 
time for the agency and the way we address the challenges before us 
will determine not only where we go tomorrow, but for years to come.
    In many ways, it may be time for the SEC to go through a 
transition--much like the transition that the U.S. military has 
experienced in recent years--and evolve into a much more efficient 
force, becoming quicker, more agile, and more pro-active. I am now 
reviewing with senior staff the Agency's operations and resource needs 
to determine appropriate changes to address both our internal and 
external needs. My hope is that the SEC can develop a new approach to 
our mission, as the military has done, so that we can play offense more 
often, be more pro-active, and anticipate the problems we may face.
                              fiscal 2003
    Although this hearing is for the Commission's 2004 appropriations 
request, I believe it is necessary to put this request in the context 
of our fiscal 2003 funding level. Thanks to your efforts, the 
Commission was appropriated $716.4 million to fund its operations this 
year as part of the recent omnibus appropriation. These funds will 
enable us to meet the remaining fast-approaching deadlines of the 
Sarbanes-Oxley Act, hire over 800 new staff, advance initial start-up 
funds to the Public Company Accounting Oversight Board, improve our 
training efforts, and address our most pressing information technology 
needs. We will continue each of these activities in fiscal 2004 and for 
that reason I would like to discuss them now.
Additional Staff
    The new staff provided in fiscal 2003 will focus equally on the 
complex issues that we currently face and on the fundamentals upon 
which the Commission was built: full disclosure, fairness, 
transparency, and investor protection. Investor confidence is 
predicated on ``minding our knitting'' in these core areas. I believe 
that any budget increases we receive must be targeted to the programs 
and activities that will have the largest impact on our mission. In 
this regard, the budget that was prepared prior to my arrival calls for 
the following staffing increases in our major program areas:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Prevention and Suppression of Fraud........................        188
Full Disclosure............................................        204
Investment Management Regulation...........................        178
Regulation of Securities Markets...........................        201
Legal and Economic Services................................         22
Program Direction..........................................         49
------------------------------------------------------------------------

    My initial review of these numbers suggests that overall this level 
of increase is warranted. However, during the next several weeks and 
months I intend to delve more deeply into each program area to verify 
personally that this is the best and most effective and efficient use 
of our new staffing. I would therefore like to reserve my option to 
make changes.
    As discussed below, we will hire aggressively but thoughtfully, not 
just to increase head-count. As a result, these hiring targets may only 
be met over a longer period of time, but they will be met with people 
that we are sure can perform the vital tasks that we assign to them. 
And we are committed to train and integrate new staff as we bring them 
on. We are grateful that legislation has been introduced in both the 
House and Senate to help the Commission expedite and streamline the 
hiring process so that we can bring on additional, mission-critical 
securities industry accountants, compliance examiners and economists as 
quickly as possible to get on with the business of protecting America's 
investors.\1\ The Commission strongly supports this legislation and 
hopes that it will be adopted at the soonest possible time and signed 
into law by the President. Without this expedited hiring authority, the 
Commission will not be able to hire the additional staff it needs--and 
which the Sarbanes/Oxley Act contemplates--in any responsive time 
frame.
---------------------------------------------------------------------------
    \1\ See H.R. 658/S. 496, ``The Accountant, Compliance, and 
Enforcement Staffing Act of 2003''.
---------------------------------------------------------------------------
    Today, over half of all U.S. households are invested in our capital 
markets. Twenty years ago, that rate was less than 20 percent. Just to 
use one example: mutual fund investments today exceed by more than $2 
trillion the amount on deposit at commercial banks and are approaching 
the approximately $7 trillion in total financial assets in the 
commercial banking system. The SEC has only 354 examiners to oversee 
these mutual funds and investment advisers. In addition, while there 
are over 7,800 registered broker-dealers--with more than 88,200 broker-
dealer branch offices--in the United States, the SEC's broker-dealer 
examination program has only 218 staff to conduct inspections of these 
institutions. These facts, along with the accounting scandals that have 
plagued us, reinforce what we all know: our markets have changed, and 
grown, dramatically, investor confidence has been shaken, and the SEC 
must act decisively to deal with these challenges.
    Equally important, I believe that the efficient functioning of the 
SEC is as much a part of investor protection as ushering in new rules 
and regulations. I have presided over similar management challenges 
while in the private sector and seen first hand what it takes to grow 
rapidly and responsibly and improve performance. The organizational and 
cultural changes that accompany the opportunity you have provided me 
are significant and require regular attention. Toward this end, the 
yardstick for measuring our success will be based both on the number 
and quality of immediate program improvements and on meeting the 
agency's long-term goals of investor protection and market strength. 
Two operational areas that play a significant role in this regard are 
staff training and management accountability.
Training and Management
    New staff and the need for regular training go hand-in-hand. For 
this reason, the Commission will increase significantly its emphasis on 
frequent, in-depth staff training. Given the challenges we face, we 
need to ensure that staff continue to have the tools and skills 
necessary to fulfill their duties effectively. We cannot afford to have 
our most skilled employees leave the agency or be underutilized. Pay 
parity and the downturn in the economy have helped attract top talent, 
but there is more that we can do.
    Management accountability is also central to our ability to perform 
our duties. I intend to enhance the Commission's operations by 
establishing a system to better train, evaluate, develop, and mentor 
managers and supervisors. This effort is consistent with the goals of 
the President's management agenda and is the right thing to do. We 
cannot expect SEC staff to successfully fulfill their duties if they do 
not have supervisors with the skills and tools to lead them. We must 
set expectations and reward our managers and staff accordingly.
Information Technology
    The Commission's operational challenges also extend to our 
information technology program. Prior to enactment of our fiscal 2003 
appropriation, our Office of Information Technology had been structured 
to maintain our existing information technology systems, undertake a 
few smaller projects each year, and complete only one large-scale 
initiative at a time. We have accomplished this level of activity 
primarily by developing a robust information technology capital 
planning program and relying heavily on contractors and outsourcing. 
This approach has been essential given past resource constraints, but 
it has left us with badly outdated IT capabilities. We must now be 
critically introspective, bring in broad IT expertise to evaluate our 
needs and further increase the involvement of our agency's divisions 
and offices in our information technology decisions. To meet our needs, 
program staff must work side-by-side with a reinforced information 
technology staff, and we must increase the number of information 
technology program managers we have available to assist the program 
offices in developing major applications to improve our effectiveness. 
While these hiring and cultural changes may not appear revolutionary, 
they are nonetheless significant and multi-year in nature, especially 
when viewed against our current inventory of major information 
technology needs.
    The fiscal 2003 funding level allows the SEC to undertake three new 
major, multi-year information technology projects. The first one 
addresses the Commission's need to move away from paper documents. It 
is the development of a robust document management and imaging system 
that will make it easier for our attorneys, examiners, and others to 
cull through the tremendous volumes of information that they review and 
file as part of their investigative, inspection, and enforcement 
activities. This system will provide agency-wide electronic capture, 
search, and retrieval of all investigative and examination materials 
and will be designed to meet the demands of our document-intensive 
litigation program, and to assist our examination staff in analyzing 
the content of documents more effectively.
    As an aside, one of the first things I noticed when I arrived at 
the Commission's headquarters and walked around was the extent to which 
the SEC is physically drowning in paper files. We need to make it 
easier for staff to do their jobs and to share information with each 
other. Document management and imaging are key components of this and, 
while it will be a multi-year effort, it is long overdue.
    The second project holds equal potential to improve the efficiency 
and effectiveness of the Commission: a comprehensive change in our 
filing and disclosure processes, especially regarding financial 
reporting. The effort to improve the filing and transparency of public 
company disclosures is expected to lead to significant business process 
changes that will result in the elimination of confusing forms, the 
collection of uniform data from filers, and internal operations 
improvements that will allow staff to conduct more rigorous financial, 
industry-specific, and comparative analyses. Although this project will 
be carried out by issuers, their accountants and their other advisors, 
under the leadership of the SEC, the principal beneficiaries of this 
initiative ultimately will be the nation's investors, who will have 
more understandable and reliable financial information upon which to 
base their investment decisions. This will result in a fundamental 
improvement in the transparency and comparability of firms' financial 
statements, which should significantly increase investor confidence.
    When the agency's electronic filing system (EDGAR) was originally 
created, it did a terrific job of converting paper disclosures and 
filings into electronic documents and making more information available 
to the public. We now need to take the next step. As part of a 
comprehensive review of our business processes, we need to change how 
we work and alter EDGAR accordingly. We need to revisit what 
information staff must have readily available to conduct more intensive 
and robust disclosure reviews. For instance, while we receive and 
archive the EDGAR data, we cannot immediately analyze them. Instead, we 
depend on outside vendors to transfer the numbers in the text of the 
filings to machine-readable form that we can then analyze. We are in 
the process of designing tags for EDGAR filings that would allow 
anybody to extract machine-readable data from them. These initiatives 
will allow us to conduct analyses and monitor trends in real-time.
    Our third major information technology requirement is to enhance 
our disaster recovery program. The SEC learned first-hand from the 
events of 9/11 and the experiences of its Northeast Regional Office, in 
New York, of the importance of keeping its data even more secure than 
it already is. In addition, we need to have the capacity to store and 
move large amounts of data from one regional or district office to 
another without first going through Washington. We need to move to a 
true ``point to point'' information technology system that allows us to 
mitigate the loss of data and to recover quickly in the event that we 
need to implement our continuity of operations plan. When this project 
is complete, the agency's critical files and information systems will 
be backed up daily and in multiple locations.
Sarbanes-Oxley Act
    Since enactment of the landmark Sarbanes-Oxley Act last summer, the 
Commission has worked vigilantly to meet the Act's timeline and 
mandates. Within 30 days of the Act's signing, we adopted rules 
requiring CEOs and CFOs to certify their financial statements and 
accelerating insider transaction reporting to two days.
    This past January was the busiest month of rulemaking in the 
history of the SEC. We adopted nine other Sarbanes-Oxley mandated rules 
relating to: Pro-forma financial information, codes of ethics for 
senior executives, financial experts on audit committees, trading 
during pension fund blackout periods, disclosure of material off-
balance sheet transactions, retention of audit records, independence 
standards for public company auditors, standards of conduct for 
corporate attorneys, and the application of certain Sarbanes-Oxley 
certification and disclosure requirements to registered investment 
companies.
    In addition, we sent four separate studies to Congress related to: 
Penalties and disgorgements in our enforcement cases, securities 
professionals who have ``aided and abetted'' federal securities law 
violations, commission enforcement actions involving reporting 
violations and restatements, and the role and function of credit rating 
agencies.
    We met these deadlines without sacrificing our other work or 
obligations--including our robust enforcement program and numerous 
regulatory initiatives unrelated to Sarbanes-Oxley. For example, in 
January we also adopted rules regarding proxy voting by investment 
companies and investment advisers, and in February we adopted rules 
regarding analyst certification of research reports. And we're hard at 
work on other rules and studies, including rules related to: Improper 
influence on auditors, listing standards related to audit committees, 
governance of the Public Company Accounting Oversight Board, investment 
adviser and investment company compliance policies, public company 
internal control reports, critical accounting policies, and expanded 
current reporting.
Public Company Accounting Oversight Board
            Selection of a new chairman
    The Commission recently announced that it adopted a plan to select 
a Chairman of the Public Company Accounting Oversight Board established 
pursuant to the Sarbanes-Oxley Act of 2002.\2\ The plan calls for the 
Chairman, the Commissioners, and the staff to reach out and solicit 
input from a variety of sources, including key members of Congress, 
investor advocates, academics, and members of the business community.
---------------------------------------------------------------------------
    \2\ See ``Statement of the Commission Regarding Selection Process 
for Chairperson of the Public Company Accounting Oversight Board 
(PCAOB)'' March 4, 2003, http://www.sec.gov/news/press/2003-28.htm.
---------------------------------------------------------------------------
    As I said in my confirmation hearing before the Senate Banking 
Committee, the selection of a Chairperson for the Public Company 
Accounting Oversight Board is my number one priority, and I am pleased 
that the Commission has been able to build upon the recommendations of 
the General Accounting Office and quickly devise a thorough and 
expeditious process to identify and vet potential candidates.
    The SEC staff will incorporate new suggestions, update the list of 
qualified candidates and circulate it to the members of the Commission. 
The Chairman and the Commissioners will narrow that list based on the 
criteria in the Sarbanes-Oxley legislation, additional criteria that 
the Commission finds desirable, but not mandatory, and the individual's 
willingness to serve.
    Each candidate on the narrowed list will undergo a preliminary 
vetting process. Upon completion, each member of the Commission will 
interview the leading candidates and a thorough background review will 
be completed. Following this review and consultation with the Chairman 
of the Federal Reserve and Secretary of the Treasury, as required, the 
Commission will vote to approve the appointment of a Chairperson.
    The Commission will be looking for an individual who has experience 
running a dynamic and innovative organization; is well recognized by 
those participating in the financial markets and possesses a keen 
understanding of those markets; is independent from any particular 
constituency; has experience that demonstrates an understanding of the 
role of auditors in the Commission's financial accounting and 
disclosure system; has no known impediments or controversies that might 
impair his or her ability to lead, or the public's ability to rely on 
the individual to lead; and is willing and able to serve a five-year 
term.
    In addition, we are seeking a person who has the ability to 
consider impartially ideas, information, and data from all sources, to 
seek additional input whenever it appears necessary, and to make timely 
decisions, as well as the ability to absorb complex information, 
analyze it objectively, and make rational decisions. Of course, we want 
someone who has the ability to communicate effectively, has a 
demonstrated commitment to public service and to the PCAOB's mission, 
as well as an awareness of the financial reporting and auditing 
environment. The individual we choose should have a demonstrated 
ability to create a collegial working environment and instill public 
trust.
    My hope and expectation is that the Commission will move 
expeditiously and select a new chairman for the PCAOB as quickly as the 
process allows.
            Funding advance
    The fiscal 2003 budget provides the resources necessary for the 
Commission to advance start-up funds to the Board. The Commission 
initially advanced $1.9 million to the Board on January 15, 2003. On 
March 28, the Commission approved a more substantial second advance of 
$13.5 million that will fund the Board's operations through May and 
allow them to begin the development of state-of-the-art information 
systems to be used in their registration, billing and collection, and 
professional oversight programs. The Board has stated its intention to 
repay all of these funds to the Commission by the end the current 
fiscal year.
            Commission Oversight
    The Commission has significant responsibilities related to the 
oversight of the Board, including approving the Board's budget and 
rules and adjudicating appeals from the Board's decisions on 
registration, inspection, and disciplinary matters. We have developed 
close communications and a good working relationship. For example, the 
Board and the Commission recently participated in a roundtable on 
issues related the Board's registration and oversight of foreign 
accounting firms.
Utilization of Commission Resources
    We have tremendous needs for the new resources made available in 
2003 and have plans in place to meet these needs. However, I want to be 
sure--and I am committed to making sure--that every penny of that new 
money is spent wisely. I am determined that we take an aggressive but 
thoughtful approach to resource allocation. We will bring on the people 
we need to help us fulfill our mission, and not simply increase our 
head-count. I view this allocation of resources and renewed commitment 
to the SEC's needs as a multi-year effort to ensure that we make long-
lasting and substantial improvements in the SEC's programs that will 
restore confidence and benefit our nation's investors.
                              fiscal 2004
    The President's request for $841.5 million in fiscal 2004 
recognizes that the Commission's needs are growing and ongoing. As I 
stated earlier, this request is the largest amount the Commission has 
ever received and will allow us to continue all of the efforts that we 
are undertaking in fiscal 2003. In particular, it will allow us to 
focus further on financial frauds, review of public company filings, 
our new risk-based examination program, and the ongoing requirements of 
the Sarbanes-Oxley Act.
Enforcement Activities
    The Commission has played, and will continue to play, a vital role 
in protecting our markets from fraud, manipulation and other practices 
that continually threaten to undermine their integrity. To meet the 
challenges facing us--including the unprecedented number of significant 
financial frauds and accounting failures, new securities products, 
technologies, and globalization--the Commission's enforcement program 
will continue to add personnel, including investigative attorneys, 
accountants, and market surveillance specialists.
    The Commission has responded swiftly to the recent rash of 
accounting failures. In fiscal 2002, approximately 27 percent of all 
filed enforcement actions involved financial disclosure and issuer 
reporting violations. Financial reporting and accounting cases remain 
our number one enforcement priority, and numerous financial fraud 
investigations are currently underway. These types of investigations 
require a significant commitment of staff resources because they are 
fact- and document-intensive and include reviews of the conduct of a 
variety of individuals and entities. The Commission's enforcement 
program will continue to need additional attorneys and accountants to 
assist in these complex financial fraud investigations.
    As the Commission seeks to aggressively investigate and punish 
corporate fraud, an increasing number of defendants are choosing to 
litigate. Even many cases that are ultimately settled are the subject 
of protracted litigation prior to settlement. Commission litigators are 
now actively involved in nearly one-half of recently filed cases. In 
addition, our litigation and investigative staff are increasingly 
involved in emergency court actions in an attempt to secure investor 
funds before they are lost forever and to alert the investing public to 
false and misleading disclosures being made by issuers. It is critical 
that the Commission maintain a strong litigation capability because it 
is the credible threat of litigation that allows us to pursue 
wrongdoers effectively and win our cases or settle them on favorable 
terms.
    Additionally, the growing internationalization of the securities 
industry and the securities markets has added new challenges for the 
Commission in combating securities fraud. An increasing number of the 
SEC's enforcement cases have substantial international dimensions that 
make it more important for the Commission to work closely with its 
international counterparts in enforcement and inspection activities. 
Our staff devotes much time and resources to tracking down assets that 
have been sent abroad.
    And finally, the Commission's enforcement staff works closely with 
U.S. Attorneys' Offices and the Department of Justice to obtain 
criminal sanctions as appropriate. This association was recently 
institutionalized by President Bush when he created Corporate Fraud 
Task Force, of which the Commission is a member and the Department of 
Justice heads. We also will continue to detail enforcement staff, in 
appropriate situations, to U.S. Attorneys' Offices around the country 
to support criminal prosecution of securities fraud.
Market Structure Issues
    The rules governing trading within equity markets and the 
relationship among competing equity markets is another area that the 
Commission will focus on this year. Aware that such issues were coming 
to a head, the Commission organized two full days of market structure 
hearings in October and November 2002. Participants at the hearings 
included senior staff members of the New York Stock Exchange, Nasdaq, 
American Stock Exchange, and Chicago Stock Exchange; market makers, 
specialists, Electronic Communication Networks, and agency brokers; 
buy-side traders; representatives of individual investors; and 
respected academics. In the remainder of this fiscal year, the 
Commission will devote significant resources to the development, 
proposal, adoption, and enforcement of the policy actions that will be 
necessary in this area.
Review of Filings of Public Companies
    The Division of Corporation Finance has been enhancing its 
selective review program to target issuers whose review would most 
protect investors--large companies, companies in critical sectors, 
companies that present particular perceived financial or disclosure 
risks. This targeted approach is consistent with the directives 
contained in the Sarbanes-Oxley Act. The review of the Fortune 500 
companies undertaken last year is an example of this approach. As 
review resources and technological enhancements that will assist in the 
assessment of risk are added to the Division, the review process will 
become more robust. While the review process cannot eliminate or 
identify all financial fraud or identify those who are determined to 
commit fraud, the review process will better fulfill its objectives of 
improving disclosure and deterring fraud.
    The review process is increasingly focusing on financial reporting 
and financial disclosure because these are the areas where defective 
disclosure puts investors at most risk. To permit this focus, 
recruiting and hiring of review staff will emphasize accountants and 
those who are able to perform financial reviews.
    The Sarbanes-Oxley Act also requires review of each reporting 
company at least once every three years. We are in the process of 
developing review processes that will permit us to meet that goal. Here 
too, the additional resources that we are adding to the Division are an 
essential element and will allow us to satisfy that mandate over a 
multi-year period. We will also use those resources to meet that review 
requirement in an efficient and effective way, and we intend to do so 
in a manner that does not undercut our investor protection objective.
Risk-Based Examinations
    With the additional staffing provided in fiscal 2003, the 
Commission's examination and inspection staff will be able to implement 
our new enhanced risk-based inspection program. For investment advisers 
and mutual funds, this enhanced program will allow examiners to 
recognize the different levels of risk inherent in the operations, 
management, and compliance processes of investment advisers and funds. 
In particular, those registrants that have relatively higher risk 
profiles will be examined every two years, while all remaining firms 
will be examined no less frequently than every four years. New firms 
will be inspected within the first year of their operation. These more 
frequent inspections are a substantial improvement over the five-year 
inspection cycle used to schedule inspections prior to fiscal 2003. For 
broker-dealers, the new staffing levels will allow us to increase 
substantially our oversight of the risk management and internal 
controls of the largest broker-dealers that have the most customer 
accounts, and also to increase the small number of broker-dealer branch 
office inspections that we are currently able to conduct.
Other Sarbanes-Oxley Act Requirements
    While the Commission has made tremendous progress in implementing 
many of the critical components of the Sarbanes-Oxley Act and has met 
each of its statutory deadlines, important initiatives and additional 
rulemaking pursuant to this historic legislation will continue to be a 
top priority for the SEC. In addition to the numerous substantive rules 
already adopted, a number of Commission actions are still mandated by 
deadlines set within the Sarbanes-Oxley Act. These forthcoming SEC 
actions include: the ratification of key rules and procedures for the 
Public Company Accounting Oversight Board; the adoption of rules on 
analyst conflicts of interest; the recognition of generally accepted 
accounting standards; as well as studies and reports relating to both 
principles-based accounting and off-balance sheet transactions and 
special purpose entities. I am confident that the Commission and its 
dedicated staff will continue to work tirelessly to implement these 
remaining provisions of the Sarbanes-Oxley Act.
    Other rulemakings under the Sarbanes-Oxley Act, although not 
limited to a statutory deadline, also will play an important role in 
improving investor confidence in the credibility of reported financial 
information. For example, management and auditor reports on an issuer's 
quality controls over its accounting and financial reporting systems 
may enhance the quality and implementation of those controls, which, in 
turn, should improve the quality of financial reports and audits.
    Another important area that will require the use of more Commission 
resources is international affairs. The development of international 
accounting, auditing, disclosure and enforcement standards is gaining 
momentum and will require more monitoring of and participation in 
international bodies that are promulgating and interpreting standards 
that could impact the credibility of information used by American 
investors.
                               conclusion
    In closing, let me reiterate how honored I am to serve as Chairman 
of the Commission at this time of great opportunity. Thank you again 
for inviting me today to speak on behalf of the needs of the investing 
public. I would be happy to answer any questions that you may have.

                               PAY PARITY

    Senator Gregg. Well, thank you, Chairman Donaldson. I have 
a couple of questions. First, after considerable effort we were 
able to get pay parity in place for the SEC. I'm wondering how 
it is working, whether you think it is going to allow you to 
attract the types of individuals you need and keep the 
individuals who are there and who are critical. You are in a 
business which, up until a few years ago at least, was 
extremely competitive for staff, although now you may be able 
to find staff with a little more ease. Our concern is that the 
SEC retain its caliber staff. Is there something further we 
should do, or is pay parity working?
    Mr. Donaldson. Well, I think, bottom line, pay parity is 
working. We probably have had too short a period of time to 
measure, but just to give you some numbers, our attrition rate 
before pay parity was averaging around 14 percent, and our 
latest figures indicate that it's 4 percent or less right now, 
so so far, so good. There are other items associated with the 
hiring of professionals which maybe we can get into, but as far 
as pay parity, it seems to be working. It's a tremendous help.

                              HEDGE FUNDS

    Senator Gregg. A question in another area, hedge funds are 
sort of viewed as the Wild West of the investing community 
these days, especially Wall Street. I'm wondering if the SEC 
has any concerns about whether or not we need additional, or 
whether or not you intend to propose additional, regulatory 
activity in the area of hedge funds and accounting disclosures 
and activities there.
    Mr. Donaldson. Clearly, the whole area of hedge funds is 
one in which we need to have more information. The latest 
numbers indicate that there are some 6,000 hedge funds in 
operation right now, with some $600 billion under management. 
The money is flowing in. The growth in hedge funds over the 
last decade has been considerable.
    I would stop and say that I think there's a slight misnomer 
that the name hedge fund implies. Many of the funds that are 
classified as hedge funds are not hedged at all, they're simply 
investment pools, but let's use that term.
    I think our posture on this is that the SEC has been, 
before I got to the SEC, attempting to get information about 
hedge funds, and since I've arrived we have initiated what will 
be a roundtable discussion in May for 2 days in which we're 
inviting a broad cross section of people associated with hedge 
funds and so forth to come in and tell us about what they're 
doing. So by the end of May we'll have a lot more information.
    I would say generally that we just need to know more about 
the techniques that are being used by hedge funds. We need to 
know more than we know now about who is investing in these 
funds. By and large they are unregulated by the SEC. Some are 
regulated under the Investment Advisors Act. We see some trends 
in terms of what I would call the retailization of hedge funds, 
that is, the putting together of groups of smaller investors, 
which is something I think we have to examine.
    Up until now, by and large, you've had to have certain 
investable assets and certain income levels in order to be 
invested in these funds, and in order for the funds to maintain 
their nonreporting status, and I think that game has shifted. 
So I think it's too early for us to make a judgment, but we're 
going to put some resources into looking at that so the next 
time you ask that question we can give you a good answer.
    Senator Gregg. Well, following up on that, from what you 
said I understand you are still early into this issue, but what 
do you see is the basic risk that you would be concerned about 
from the standpoint of protecting the public relative to hedge 
funds?
    Mr. Donaldson. Well, as you well know, there was a serious 
risk that almost caused a financial collapse in the case of 
Long-Term Capital Management, which was a particular kind of 
hedge fund that employed macroinvestment decisions and heavy 
leverage. That was a great concern when the markets turned 
against them, and I think the U.S. Government did a terrific 
job of stepping in with the Treasury Department and the Federal 
Reserve, and basically avoiding a collapse that could have been 
very damaging to other people.
    Right now, I think that area has been well covered. The 
area of potential risk now is the new entrants into the field 
that we see as Wall Street has had its problems here in the 
last 3 or 4 years. We see a lot of people breaking off from 
Wall Street firms, from investment counseling firms, and 
setting up hedge funds--one or two people raising money for 
those hedge funds--so you have a lot of potential here for 
inexperienced people with a totally unregulated vehicle getting 
themselves in trouble.
    We don't know how much leverage is being used in some of 
these funds. We need to know more about that. We need to know 
more about some of the trading techniques, so that I think 
right now all I can say is that we need to know more about 
what's going on.
    Senator Gregg. Senator Hollings.

                          STATUS OF ENRON CASE

    Senator Hollings. Chairman Donaldson, we are very lucky, in 
my opinion, to have you take this particular assignment, 
because everyone has confidence in you.
    I want to ask about two touchy things, one on the Kenneth 
Lay case. The reason I ask is, we had the Attorney General just 
the other day, and he appears before us and he relates all of 
the hard-charging comedown on corporate corruption, we've 
cleaned up corporate corruption in this Government of ours and 
everything else, and he listed the cases and what-have-you, and 
then when you ask about the leading case that we all know 
about, Kenneth Lay, he said, wait a minute, I've recused 
myself, I don't know anything about it. Do you?
    I mean, they've made reports to the Securities and Exchange 
Commission, and you're the Chairman. I hope you haven't recused 
yourself. Kenny boy didn't give you a contribution, did he?
    Mr. Donaldson. Let me say what I can say.
    Senator Hollings. The reason we're interested in this is, 
right to the point, we as good lawyers know how you can bring--
we've defended the charges and we've brought charges and 
assisted in the prosecution. Before the Commerce Committee the 
entire California crowd appeared, and the authorities just 
listed out the fraud and how it was conducted, whereby they 
would ask for way more than their allocation in energy 
shortages and then take the excess of that allocation and ship 
it out, ship it back in and get it at the higher price because 
it was imported and what-have-you.
    So I said, well, wait a minute now, referring to Mr. Lay 
and Enron knowing about it, I said, I remember specifically 
earlier this morning Ms. Lay appeared on my TV and said her 
husband didn't know anything about it, and Mr. Freeman was the 
witness. He said, the dickens he didn't, he knew everything 
about it. He was running it. He was in charge.
    So you know, there are a lot of things about knowledge and 
what-have-you, but here you've got testimony before the 
Congress that they knew it, and it was a fraud, and California 
now has brought suit for $7 billion or $8 billion, whatever it 
is, for reimbursement, but we don't ever hear anything, and 
1\1/2\ years has passed, and we all are proud about how we have 
come down hard on corporate corruption, but all of a sudden 
this case disappears.
    In the meantime, back at the ranch, they said, wait a 
minute, you know, the fellow in charge of corporate corruption 
was out of the law firm that represented Enron, namely Mr. 
Larry Thompson, so what gives here? I mean, I'm trying to find 
out the status of that case.
    Mr. Donaldson. Well, you bring up a number of issues; there 
is the criminal case, and there is the civil case. Just to give 
you a little background, the Enron criminal investigation is 
being led by the Enron Task Force, and that was formed in 
January of 2002 to investigate all the matters related to 
Enron, and it is overseen by President Bush's Corporate Fraud 
Task Force which includes us, the SEC, and the Department of 
Justice. It is a team of federal prosecutors supervised by the 
Criminal Division and agents of the FBI and the IRS Criminal 
Division.
    That task force also has coordinated with and received 
considerable assistance from the Securities and Exchange 
Commission. Now, as far as the civil case is concerned, last 
August the SEC filed a case against Michael Kopper, who is a 
former top Enron official accused of violating antifraud 
provisions, and then in October we filed a case against Andrew 
Fastow, who is Enron's former CFO, alleging violations of the 
antifraud, periodic reporting, books and records provisions and 
so forth.
    Most recently, last month the Commission charged Kevin A. 
Howard, the former chief financial officer, and Michael W. 
Krautz, the former senior director of accounting of Enron 
Broadband Services, and also March 17, charged Merrill Lynch & 
Company and four of its former senior executives with aiding 
and abetting Enron securities fraud. Now, that is the first 
time that the SEC has brought an aider and abettor action 
against a bank.
    Now, as far as a general comment on your question 
specifically referring to Lay----
    Senator Hollings. He was the chief executive officer.
    Mr. Donaldson. He was the chief executive officer, and I 
think I can say that the coordination of the criminal and civil 
action requires a lot of very careful building blocks, if I can 
put it that way.
    Senator Hollings. You are building a case, is what you're 
saying?
    Mr. Donaldson. The building blocks have to do with the way 
the criminal justice system works. It has to do with the way 
information is received. Information can be received by the 
Justice Department a little more completely than it can by us. 
I guess what I'm saying is, without commenting specifically on 
that case, that we're on the case of all the Enron activities.

                        EXPENSING STOCK OPTIONS

    Senator Hollings. If Mr. Donaldson says you're on the case, 
that's sufficient for me. Let me ask this, and go to another 
thing that Arthur Levitt, when he was the Chairman, he tried to 
get these stock options expensed. We tried to, Senator Levin 
from Michigan, he put in an amendment. We were all ready to 
vote on the amendment, then all of a sudden the majority leader 
and the minority leader said no, we are not going to take--
we're going to take it up later, and later is 1 year ago I 
think, and we haven't ever taken it up.
    I got right to the point with WorldCom, and one of the 
officials I'm asking, I'm saying how in the Lord's world did 
you give Ebbers a $400 million loan, and the answer was, we had 
to. I said, you had to? He said, yeah, he had all of these 
options and he had built them up and built them up, and he had 
them, and he was going to cash them in twofold. He was going to 
ruin the financing we had on course for WorldCom-MCI on the one 
hand and of course destroy the value of the stock, so we had to 
give it.
    Corporate governance shouldn't work itself into that kind 
of cul-de-sac, and we're ready to do it, and I have heard, I 
believe, your comment that they should be expensed. You can't 
do it both ways. They are an expense, but they're not one. What 
is the position that the Securities and Exchange Commission has 
taken? What is being done? Do you want us to write it into this 
bill? I would be glad to try to write it in here that we 
expensed the stock options so we can really get corporate 
governance back. That was the real thing, and it's still 
bothering us, these excessive executive salaries.
    We had to write on the bill just the day before yesterday, 
or last week I guess it was, Friday, that here we were 
financing the airlines $3.5 billion. All the airlines' stock, 
net worth of all the airlines does not come up to $3.5 billion. 
We've given them more money than they are all worth if you put 
them all together, and we said well, that's pretty bad, but 
even worse is, look at these bonuses they are giving, these 
millions and millions of dollars of bonuses as they all go 
broke, rewards for going broke. This is what's ruining--nobody 
wants to invest in a stock market that's got those kind of 
stock options on the one hand and financing companies giving 
excessive bonuses and everything else like that on the other 
hand for going broke. That's the problem that you have.
    Mr. Donaldson. Well, let me make just a couple of comments. 
I have made, as you allude to, comments on this subject during 
my confirmation hearing, and I will state again unequivocally 
that I believe that stock options are an expense and that that 
expense needs to be reflected. That is point number one.
    Point number two, and the more difficult question, is how 
to do it? How do you come up with a value? In a complex 
situation in terms of valuing those options over differing 
periods of years and so forth, and different markets, what is 
the value that should be reflected on the day that those 
options are given? A lot of them expire with no value. A lot of 
them are tremendously valuable. How do you rate that? How do 
you do it?
    The FASB has committed themselves now to come up with a 
formula for expensing those options and an accounting standard 
for doing so, and I'm going to be very interested to see that 
standard. It is not an easy calculation, but they have 
committed themselves.
    Senator Hollings. Will that be a rule of the Commission, 
then, once they make that recommendation?
    Mr. Donaldson. As you know, under the new arrangement with 
the Public Accounting Board, we will both be very much 
listening to the rules proposed by FASB. I think we are going 
to see that your desires are fulfilled here.
    Senator Hollings. And your desires.
    Mr. Donaldson. And my desires, absolutely.
    Senator Hollings. Thank you very much, Mr. Chairman.
    Senator Gregg. That will have a tax effect too. Will the 
Treasury be included in that exercise?
    Mr. Donaldson. The final rule will be an accounting rule, 
and our new oversight board with the primary responsibility at 
the first level will be there, but of course their rulings and 
so forth come through us and have to be approved by us, so we 
will have the ultimate responsibility.

               PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

    Senator Gregg. How about this accounting board? How are you 
doing in getting that going, and especially what are we going 
to pay these people, talking about pay?
    Mr. Donaldson. As to the status of the Board, as I've said 
publicly, it is a number one priority for me as the new SEC 
Chairman to get the right person to be Chairman of the 
Accounting Board. Although I'm saying me, it ultimately is our 
Commission that will appoint that chairman.
    We instituted a process within 1 week of my arrival, a 
process for searching for that person. I will not bore you with 
all the details of the process, except to say that we reached 
out in a broad and public way to add to our list. We talked to 
anybody and everybody that would talk to us about making 
suggestions. We brought in a tremendous number of names. We 
then had a time-phased process that boiled that down.
    We have boiled it down. We are in an advanced stage now, 
and I think that what I would say is that for anybody that has 
been in the recruiting business, if you will, we don't want to 
make a mistake on this. We want to get the right person, and 
generally speaking, the right person is not always readily 
available.
    Again, my experience has been that oftentimes the right 
person is happily doing something else, and so it is a 
recruiting effort to get the right person to come. But I am 
encouraged by the work to date, and I think presently we will 
have somebody, sooner, I hope, than later.
    Senator Gregg. Not to be parochial about this, but you're 
the right person for the SEC. You would probably be the right 
person for this board also, and obviously in taking the SEC job 
you're not getting paid a lot of money compared to what you 
made in the private sector. Yet the salary for this accounting 
board is being set at like $500,000, which is about twice what 
we pay the President.
    Mr. Donaldson. I can tell you what the relationship is to 
my salary.
    Senator Gregg. Your salary and my salary. The Chief Justice 
of the Supreme Court is paid about $160,000, I think. I'm not 
sure that it is understandable why we need to pay so much. I 
mean, isn't the person who takes this job going to be mostly 
doing it as a public service, as you are doing your job, as the 
President does his, and we hopefully do ours, and as the Chief 
Justice of the Supreme Court does his?
    Mr. Donaldson. Well, I understand exactly what you're 
saying, and I think you have to go into the history, which you 
probably know better than I do, of the Sarbanes-Oxley 
legislation and what went into the status of the Public Company 
Accounting Oversight Board, and it is not a Government agency. 
It was set up as an independent privately incorporated agency.
    Senator Hollings. Why?
    Mr. Donaldson. The reason for that, and again I'm 
speculating on this because I had nothing to do with 
establishing it, was that there are a lot of other entities out 
there in the private sector such as the FASB and other entities 
like that, which are attracting people to work there with 
private sector compensation. And I think the intention of 
Sarbanes-Oxley was to be able to go out and get not only the 
members of the Board, but also to get staff members, who were 
competitive with the best people available out there. So the 
Oversight Board was ordered to set a salary level that was 
comparable to what would exist, not in total private sector 
America, but comparable organizations.
    They did that and came up with that salary level. Actually 
it is slightly over $500,000 for the Chairman and $450,000, I 
think, for the members of the Board, and that received the kind 
of negative comments which you've expressed here.
    I will stop there, except to say that they are doing what 
they were ordered to do. Whether they could have modified it or 
presented it in a better way remains to be seen.
    Senator Gregg. I suspect the right person to do it won't do 
it just to make money.
    Mr. Donaldson. Excuse me, not to interrupt you, but I think 
you just don't know--I mean, you just don't know. You're 
absolutely right that certain people are not going to do it, 
but certain other people maybe will.

                           SARBANES-OXLEY ACT

    Senator Gregg. On Sarbanes-Oxley, how is it working? It's 8 
months into it. I hear grumbling. Maybe that's because it's 
working. Do you see issues out there that we're going to need 
to revisit?
    Mr. Donaldson. As you know, the SEC has been in an 
extensive rulemaking mode here, and we're coming to the end of 
that.
    I think that so far, so good. I think that the system is 
working the way it should work, which is that a law is passed 
and the rulemaking based on public comment and so forth can 
address some of the unintended consequences of the law, 
maintaining the spirit of the law, but being practical about 
the unintended consequences.
    I think it is working quite well. If you go out into 
corporate America, particularly in the audit committee 
function, which is where some of the rules are most advanced, I 
think there's a heightened awareness of the responsibility of 
the audit committee.
    There are still some issues that we have to cover by 
rulemaking, but I think it's working pretty well. I say pretty 
well because there's a lot of nervousness out in corporate 
America about just exactly what these rules mean. There's a lot 
of tentativeness, and that creates a kind of a distraction in 
my view for people running companies. They can become so tied 
up in trying to conform to the letter of the law that the risk 
here is that they lose flexibility and lose sight of what's 
needed to run an entrepreneurial company. That is a risk.
    My own feeling in this is that--and I probably shouldn't 
say this--but I feel very strongly that we can pass all the 
laws that we want to, but we need the atmosphere inside the 
company to be moral. The philosophy of running the company 
should be that the chief executive and the board says this is 
the kind of company we want to be, and we're not going to skate 
right up to the minimum required by the letter of the law. 
We're going to stop well short of that because that's the kind 
of company we want to run, and until companies do that and have 
a code of ethics that is more than just written on paper, I 
think we will not have solved our problems.
    I might go on to say that I think that there is a shift 
here, largely as a result of Sarbanes-Oxley, of the power, if 
you will, and authority to the board away from the chief 
executive who operates as he or she wants to. Gradually the 
boards of directors are recognizing that it is their 
responsibility to the shareholders to set that tone, and then 
to hire management that has the same feelings about the ethics 
of doing business.

            EFFECT OF SARBANES-OXLEY ON CORPORATE DIRECTORS

    Senator Gregg. I couldn't agree more with your explanation 
of the philosophy and how it should work. I'm wondering, 
however, if, with Sarbanes-Oxley and the litigation atmosphere, 
we haven't created a situation where the traditional director 
no longer wishes to serve on a board of directors. In that 
case, you're going to create an environment where you basically 
end up with professional directors who are willing to take 
risks. Taking risks is the way they make their money. This is, 
I think, one of the strengths of corporate America, which is 
that you get Main Street on your board of directors, and it may 
be a well-heeled Main Street, but at least it's Main Street. 
You talk to folks who serve as directors now and they're all 
scared, and many of them won't serve.
    Mr. Donaldson. This is a real problem, and I think there 
are two solutions to it at least. One is that the corporate 
directors themselves, the existing body of corporate directors 
are going to have to figure out how many boards they can be on 
to discharge their new obligations under Sarbanes-Oxley. 
They're going to have to think through, and the boards are 
going to have to think through as they recruit, that there is 
an enhanced responsibility here and an enhanced risk, as you 
say, and I think potential directors and existing directors are 
going to have to look at that carefully.
    Beyond that, I believe we're going to have to bring a whole 
new cadre of directors into the game. It's been a relatively 
small group of people who serve on many boards. That's been the 
tradition, a lot of CEOs serving on other CEOs' boards. There 
is a tremendous wealth of talent out there, out in corporate 
America and elsewhere, who can be very good corporate 
directors, and who have the time, and who will learn by doing 
it and bring new dimensions.
    This makes me feel that we have to organize the training of 
these people, and searching for them, and we hope to be very 
active in that. I commend the number of business schools and 
law schools in the country, and the New York Stock Exchange, 
who are all moving toward director education, if you will. And 
we want to help them do that and intend to help them do that, 
so I think you are going to find a lot of, I'll say young 
people, but maybe older people who have not had a crack at it, 
who have something to offer and are willing to take that 
challenge. But we'll see.
    Senator Hollings. Along that line, just as an aside, when I 
was a young Governor from 1958 to 1962, that is what I had. My 
Bible was right there, Dun & Brad, and I could just pick out 
those corporate directors, and there wasn't any training. They 
were just drinking buddies. I mean, the GE served on the IBM, 
served on the General Motors, served on the Dupont. I mean, you 
could find them all. I wove them into what we called the 
plantation society. We've got over 100 plantations in the low 
country of South Carolina, and each Sunday at 11 o'clock they 
would have a brunch and go from one to the other, and I was 
always at those brunches to meet those folks and everything 
else, and then talk to them and try to get them to move their 
industry, try to carpetbag New Hampshire.
    Senator Gregg. You did a good job of it, too.
    Senator Hollings. We had a good time doing it, but those 
corporate--they were good. They were good. I found all the CEOs 
and everything else very good, but it's gotten to the extreme. 
The quarterly reports and the life of a CEO is what, 3 years or 
something. He's got to get the stock up or they get him out, or 
whatever it is. They just take the money and run, all kind of 
bonuses, everything else like that. You've got a tough job 
trying to change that with the stock exchange and everything 
else and the business schools, as you indicate, working on it. 
You do a lot of good work. Thank you.

                               CONCLUSION

    Senator Gregg. Do you have anything else you wish to add?
    Mr. Donaldson. Again, I'm delighted to be here.
    Senator Gregg. The check is in the mail.
    Mr. Donaldson. I might just add one thing, if I can, which 
relates to the hiring of the people that we have to hire, we 
can hire lawyers quite easily because they don't have to go 
through the Civil Service posting and all of the competitive 
service requirements.
    We are having real problems hiring accountants and 
economists and examiners. It is hard for us to compete out 
there under existing hiring regulations; therefore we have been 
working hard to see if we can't get those laws changed, and the 
House is ready to vote out an excepted service exception for 
us. By the way, our union has agreed with this, and we have 
sent a letter from myself and the head of the union, who 
cooperated with us. So--you asked if there was anything else 
you could do.
    Senator Gregg. Well, we have been known to put authorizing 
language in our bill, so if you want to get us the language, 
and if we can get the agreement of Senator Shelby----
    Senator Hollings. That might help move it along. Any need 
like that, just contact the chairman.
    Mr. Donaldson. Well, I know it is not the direct 
jurisdiction of this committee, but it helps us.
    Senator Gregg. Well, everything is in the jurisdiction of 
this committee. This is the Appropriations Committee.
    Mr. Donaldson. Okay.
    Senator Hollings. That's the way I was taught.

                          SUBCOMMITTEE RECESS

    Senator Gregg. Thank you very much.
    The next hearing is scheduled on Thursday, April 10, at 10 
o'clock in this room, and at that time we will hear from the 
Director of the FBI.
    [Whereupon, at 10:40 a.m., Tuesday, April 8, the 
subcommittee was recessed to reconvene subject to the call of 
the Chair.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              


                        THURSDAY, APRIL 10, 2003

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room S-146, the 
Capitol, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg, Hollings and Kohl.

                         DEPARTMENT OF JUSTICE

                    Federal Bureau of Investigation

STATEMENT OF ROBERT S. MUELLER, III, DIRECTOR

                OPENING STATEMENT OF SENATOR JUDD GREGG

    Senator Gregg. The hearing will come to order.
    We appreciate Director Mueller taking time out of his very 
busy schedule at the FBI, which is obviously one of the premier 
agencies in this country for protecting our Nation in this time 
of heightened concern. The FBI has taken, I think, a dramatic 
role in the area of leading this effort and has a huge 
portfolio and, thus, it is nice to have the Director here to 
talk to us about his budget and about his game plan.
    And, Senator Hollings, do you have an opening statement?
    Senator Hollings. No. Thank you.
    Senator Gregg. So we will turn to you, Director.
    Mr. Mueller. Thank you, Mr. Chairman, Senator Hollings. I 
beg your indulgence for a short statement.
    Senator Gregg. Certainly.

                 OPENING STATEMENT OF ROBERT S. MUELLER

    Mr. Mueller. Let me just start by saying as I think you 
have pointed out, and due in no small part to the support we 
have had from this committee, the FBI is undergoing 
extraordinary and, I believe, positive changes. I believe we 
are more prepared today than we ever have been to meet the 
threats posed by terrorists, foreign intelligence services and 
criminal enterprises. The changes we have made in the past 18 
months, and many others that are ongoing, will ensure that the 
FBI stays on top of current and future threats well into the 
21st century.
    I believe that our fiscal year 2004 budget request will 
give us the resources we need to continue our positive 
momentum. As you are well aware, our total request is $4.6 
billion, and we are requesting program changes totaling $513 
million including 2,346 new positions, 503 of which will be for 
special agents.
    I would like to spend a moment walking you through some of 
our progress to date in certain areas, the assessment of the 
threats that we still face in this country, and the changes 
that we are making to align our resources to the threats we 
confront.

                            COUNTERTERRORISM

    As I know you are aware, our top three priorities currently 
are counterterrorism, counterintelligence and cyber crime. In 
turning first to counterterrorism, since the attacks of 
September 11th, the FBI has made the prevention of terrorist 
attacks our number one priority. I am pleased to report our 
efforts have yielded major successes over the last 18 months. 
As you are aware, we have disrupted suspected terrorist cells 
in Buffalo, Detroit, and Portland. And the recent apprehension 
in Pakistan of Khalid Shaikh Mohammed, a key planner and the 
mastermind of the September 11th attack, is also a significant 
achievement in the war on terrorism.
    We also have been successful in choking off terrorists' 
ability to fund their acts of terror. We have frozen $125 
million from more than 600 accounts around the world, and 
conducted 70 financial investigations with 23 convictions to 
date.
    Also in Pakistan, last month the Pakistanis apprehended 
Mustafa Ahmed al-Hawsawi, a major financial planner for Al-
Qaeda.
    As Al-Qaeda and other terrorist organizations change 
tactics, the FBI must be equally agile. We, too, must evolve, 
and we are evolving. We have dramatically increased our 
intelligence analysis and dissemination capabilities and are 
now focusing on long-term strategies to upgrade these 
capabilities.
    Our fiscal year 2004 request includes approximately $1 
billion in direct support for counterterrorism. Understandably, 
the number of counterterrorism cases has risen dramatically 
since September 11, 2001, and the recent capture of high-
ranking Al-Qaeda operatives and the information we have gleaned 
from their debriefings suggests that those numbers will 
continue to climb.
    We need to have the resources to handle those increased 
numbers of counterterrorism cases. Nearly 50 percent of all of 
our requested program changes in 2004, or $250 million, 
supports our counterterrorism mission. In particular, the 430 
positions proposed in the budget will strengthen investigative 
support in the field and improve counterterrorism management 
and coordination at Headquarters.
    Additionally, the requested amounts would support 66 of--
the 66 Joint Terrorism Task Forces we have nationwide, which 
are critical to facilitate information sharing and act as a 
first line of defense against terrorist attacks.

                          COUNTERINTELLIGENCE

    The second priority for us is counterintelligence. We 
have--we look at our counterintelligence mission in four 
sectors. First and most significant is the potential for an 
agent of a hostile group or Nation to produce or use weapons of 
mass destruction. Second is the potential for a foreign power 
to penetrate the intelligence community. Third is the targeting 
of Government-supported research and development. And finally, 
the fourth is the potential compromise of certain critical 
national assets spread across the United States.
    Just as we are transforming our counterterrorism program, 
we are also transforming our counterintelligence. We have 
reorganized the program and realigned our resources to 
concentrate on emerging threats. We now have full-time 
counterintelligence squads in 48 of the 56 field offices 
dedicated to investigating hostile foreign intelligence 
services. In the 2004 budget, we are requesting $63 million and 
599 positions of which 94 would be for agents.
    Let me turn for a second to briefly discuss the events that 
occurred yesterday in Los Angeles. As you are aware, I believe, 
yesterday in Los Angeles a retired FBI supervisor, Special 
Agent James J. Smith, was arrested along with a former 
intelligence asset, Katrina Leung. For many years, Smith, who 
had recruited Leung, served as her primary handler. The 
allegations against Smith and Leung are contained in criminal 
complaints which were unsealed yesterday. And because the 
matter is pending in Federal Court, I really cannot comment on 
the merits of these cases or on the strength of the evidence 
against Smith and Leung.
    I do want to point out, however, that when I learned of 
these--of this possibility in January of this year, we 
immediately took steps to address this issue. I brought in a 
person by the name of Randy Bellows who had done the report on 
Wen Ho Lee in the Justice Department, an experienced prosecutor 
from the Eastern District of Virginia, to go out to Los Angeles 
and review what had occurred in those cases and to come back 
and give me recommendations.
    Based on his recommendation, I appointed an Inspector in 
Charge, and it was the individual who was the lead agent in the 
Aldrich Ames case, to conduct a thorough covert investigation 
of the charges in Los Angeles. We gave him a task force in 
excess of 30 individuals who were separate and apart from the 
Los Angeles field office. And he conducted that investigation 
leading to the charges yesterday.
    I have also asked the Inspector General to look at the 
performance of the Bureau with regard to this and other cases 
out there. And I am not content to wait for the Inspector 
General's review. I have asked the Inspection Division to look 
at the managers who may have had some responsibility and 
immediately get back to me a report on their responsibility for 
what happened out there.
    I also want to point out that it is--we have, since January 
of last year, instituted a number of reforms out at the FBI 
Headquarters to ensure that these types of problems are 
corrected, not only out there, but throughout the FBI. In June 
of this last year, we established a rigorous Asset Validation 
Review Program to strengthen agent accountability and 
management oversight, and made significant changes in the 
senior management within the Counterintelligence Division. And 
as I have said before, we have promulgated a national 
counterintelligence strategy with centralized program 
management.
    We cannot minimize the problems in the Los Angeles program, 
but we have moved firmly to correct those problems. And quite 
obviously, I believe that to be an isolated event and I remain 
proud of the work of the many thousands of men and women of the 
FBI for the service they render every day to the United States. 
But we, as an organization, must learn from the mistakes of the 
past so that we do not repeat them in the future.

                              CYBER CRIME

    Leaving counterintelligence, the third priority is cyber 
crime. We, as just about everybody else in the United States, 
continue to see an explosive growth in cyber crimes. Last year 
we established a consolidated new Cyber Division at 
Headquarters to manage these investigations and to help us 
coordinate our public and private sector partners.
    In our 2004 budget request, we are requesting $234.4 
million to protect the United States against these attacks. We 
are seeking 194 positions, of which 77 would be for agents.
    In addition to the traditional cyber crimes, over the past 
6 years, we have seen cases involving child sexual exploitation 
grow in number from 113 to over 2,300. The requested resources 
for 2004 will help us to keep pace with this burgeoning 
caseload.
    Lastly in the cyber area, 6 out of 10 of our investigations 
currently require some level of computer forensic support. 
History tells us that the number of cases requiring this 
support will grow. These resources would allow us--the 2004 
resources which we request would allow us to expand our ability 
to conduct computer forensics examinations.

                          TECHNOLOGY PROGRESS

    A last moment on our technology progress. We have made 
substantial progress in the last 18 months. On March 28, we 
completed the Trilogy Wide Area Network. It was completed 3 
days ahead of schedule. There were some that said that we could 
not do it, much less do it on time. That wide area network has 
been deployed to 622 FBI locations. Over the last 18 months, we 
have also installed 21,000 new desktop computers and nearly 
5,000 printers and scanners.
    We are now focused on implementing the data warehousing 
capability that will bring together our information into a 
database or databases that can be accessed by agents throughout 
the world, as well as our analysts, as soon as that piece of 
information is developed.
    In today's world, we cannot afford to allow our technology 
to become obsolete. And it is essential that we preserve these 
investments by ensuring there is sufficient funding for life 
cycle operations and maintenance of systems and for technology 
refreshment, and the 2004 budget request includes a request for 
$82 million for this purpose.
    Mr. Chairman, in addition to the priorities I outlined 
today, the FBI is also requesting funding to continue 
restructuring our security programs, to augment nuclear DNA 
efforts, and to support our ongoing crackdown on corporate 
corruption.

                           PREPARED STATEMENT

    I believe that my Bureau is in the process of turning a 
corner in its history. We have made substantial changes to 
better equip us to protect America over the last 18 months. We 
must continue to evolve. We must continue to grow. And with 
your support, we can give our agents the resources and tools 
they need to carry out their mission of protecting America.
    Thank you for the opportunity to give a brief statement.
    Senator Gregg. Thank you, Director. We appreciate that.
    [The statement follows:]

              Prepared Statement of Robert S. Mueller, III

                              INTRODUCTION

    Good morning. Chairman Gregg, Senator Hollings and members of the 
Subcommittee, I welcome the opportunity to appear before you to discuss 
the FBI's fiscal year 2004 budget request. The FBI is undergoing 
extraordinary, positive change, to better meet the threats posed by 
terrorists, foreign intelligence services, and criminal enterprises. We 
have changed our organizational structure to address the greatest 
threats facing our country, to be more dynamic and flexible, and to 
ensure accountability. And we are dramatically upgrading our 
information technology. These changes, and many others that are 
ongoing, will ensure that the FBI stays on top of current and future 
threats well into the 21st century.
    The FBI's fiscal year 2004 budget request will give us the 
resources we need to keep this positive momentum. Our total request is 
$4.6 billion. We are requesting program changes totaling $513 million, 
including 2,346 new positions, 503 of which are Special Agents. This 
morning, I would like to briefly walk you through our progress to date, 
our assessment of the threat and the changes we are making to align our 
organization and resources to address the threat.
    Before beginning, let me make one caveat to my testimony. We are 
still analyzing the impact of the 2003 Omnibus Appropriations Act on 
our 2004 request. It is possible that some changes to the request may 
be required to reflect the 2003 enacted level. We will be working with 
the Appropriations Committee on this analysis.

                       COUNTERTERRORISM PROGRESS

    The prevention of another terrorist attack remains the FBI's top 
priority. We are thoroughly committed to identifying and dismantling 
terrorist networks, and I am pleased to report that our efforts have 
yielded major successes over the past 18 months. Over 228 suspected 
terrorists have been charged with crimes, 113 of whom have been 
convicted to date. Some are well-known--including John Walker Lindh and 
Richard Reid. But, let me give you just a few recent examples:
  --In March, Khalid Shaikh Mohammed was located by Pakistani officials 
        and is in custody of the United States at an undisclosed 
        location. Mr. Mohammed was a key planner and the mastermind of 
        the September 11th attack. Since the arrest, the FBI worked 
        with other agencies to disrupt his financial network in the UAE 
        and Pakistan and we are continuing to get extremely valuable 
        information from him.
  --On March 16, Abdullah al-Kidd, a U.S. native and former University 
        of Idaho football player, was arrested by the FBI at Dulles 
        International Airport en route to Saudi Arabia. The FBI 
        arrested three other men in the Idaho probe in recent weeks. 
        And the FBI is examining links between the Idaho men and 
        purported charities and individuals in six other jurisdictions 
        across the country.
  --In February, members of the Palestinian Islamic Jihad, including 
        Professor Sami Al-Arian, were arrested by the FBI and charged 
        under Racketeering Influence and Corrupt Organizations with 
        operating a racketeering enterprise from 1984 until the present 
        that engaged in violent activities.
  --Six individuals in Portland, Oregon, were arrested by the FBI and 
        charged with conspiracy to join al Qaeda and Taliban forces 
        fighting against U.S. and allied soldiers in Afghanistan. All 
        six have entered plea negotiations.
  --And, in Buffalo, the FBI arrested seven al-Qaeda associates and 
        sympathizers. These individuals, members of a suspected sleeper 
        cell, were indicted in September 2002 for providing material 
        support to terrorism.
    In addition, we are successfully disrupting the sources of 
terrorist financing, including freezing $125 million from 62 
organizations and conducting 70 financial investigations, 23 of which 
have resulted in convictions.

                        COUNTERTERRORISM THREAT

    Despite these successes, tangible terrorist threats remain. During 
this period, we are clearly focused on immediate threats to the nation 
because of the war in Iraq. In order to respond to potential threats, 
our Strategic Information and Operations Center at FBI Headquarters and 
our field special command posts are operating on a 24 hour basis. We 
established an Iraqi Task Force. And, our agents have interviewed over 
9,000 individuals and are obtaining important information to help 
protect the American public.
    But, even as we guard against this potential Iraqi threat, we 
believe that for the foreseeable future, the al-Qaeda network will 
remain one of the most serious threats facing this country. While the 
United States has made progress in disrupting al-Qaeda at home and 
overseas, the organization maintains the ability and the intent to 
inflict significant casualties in the United States with little 
warning.

                   CHANGING TO MEET TERRORIST THREATS

    As al-Qaeda and other terrorist organizations change their tactics, 
the FBI, too, must evolve. And we are evolving.
    Our new Analysis Branch in the Counterterrorism Division has 
produced 30 in-depth analytical assessments, including a comprehensive 
assessment of the terrorist threat to the homeland. We have also 
improved analyst training and dramatically beefed up our language 
translation capabilities.
    I am now focusing on long-term strategies to enhance our ability to 
collect, analyze, and disseminate intelligence. I have put in place a 
new, formal structure that will enable the FBI to assess gaps and to 
establish formal policies and strategic plans for intelligence 
collection. A new Executive Assistant Director for Intelligence (EAD/I) 
will have direct authority for the FBI's national intelligence program, 
and will ensure that we have optimum intelligence strategies, 
structure, and policies in place.
    We are establishing, in every field office, Intelligence units 
staffed with Reports Officers. These specially-trained individuals 
collect and extract intelligence from FBI investigations and share that 
information with our law enforcement and intelligence partners.

               FISCAL YEAR 2004 COUNTERTERRORISM REQUEST

    Our fiscal year 2004 request includes approximately $1 billion in 
direct support for counterterrorism. Nearly 50 percent of all requested 
program changes, or $250 million, supports counterterrorism. In 
particular, the 430 positions proposed in the fiscal year 2004 budget 
will strengthen operational support around the country and improve CT 
management and coordination at FBI Headquarters. New personnel would 
provide an increased level of guidance, legal advice, and operational 
support to investigators on the front line of the war on terrorism. We 
must also continue to grow our cadre of strategic analysts. The number 
of FBI counterterrorism cases more than doubled last year, and with the 
recent capture of high-ranking al-Qaeda operatives, the number of cases 
will continue to climb.
    The requested amounts would support 66 JTTFs--critical multi-agency 
task forces that facilitate cooperation and information sharing, and 
act as a ``first line'' for preventing terrorist attacks. It would 
expand vital international partnerships by adding new FBI Legal 
Attaches in Sarajevo, Bosnia; Kuwait City, Kuwait; Tashkent, 
Uzbekistan; Kabul, Afghanistan; and Belgrade, Serbia, and by enhancing 
our presence in several existing locations to handle a growing 
workload.
    Approval of this budget request would also improve FBI crisis 
response capabilities, so we are prepared to respond to the scene of a 
terrorist attack at home or abroad quickly and effectively, with the 
equipment we need.

                      COUNTERINTELLIGENCE PROGRESS

    Mr. Chairman, so far this morning I have focused on the terrorist 
threats facing this country. Our counterintelligence efforts are also 
vital to national security. I want to emphasize that the FBI is 
thoroughly engaged in fighting the serious threat from foreign 
intelligence services and their assets. The FBI had several successful 
investigations in this area. Last month, Brian Regan agreed to accept a 
life sentence for attempted espionage and unlawful gathering of defense 
information. In October 2002, Ana Montes was sentenced to 25 years in 
prison following her plea of guilty to one count conspiracy to commit 
espionage on behalf of Cuba.

                      COUNTERINTELLIGENCE THREATS

    Intelligence threats fall into four general categories. The most 
significant--and our top counterintelligence priority--is the potential 
for an agent of a hostile group or nation to enhance its capability to 
produce or use weapons of mass destruction. A second threat is the 
potential for a foreign power to penetrate the U.S. Intelligence 
Community. A third threat is the targeting of government supported 
research and development. The individuals awarded research and 
development contracts in support of ongoing operations and war-making 
capabilities constitute the highest risk. The fourth threat is the 
potential compromise of Critical National Assets (CNAs). The nation's 
CNAs are those persons, information, assets, activity, R&D technology, 
infrastructure, economic security or interests whose compromise would 
do damage to the survival of the United States.

                 CHANGING TO MEET INTELLIGENCE THREATS

    Just as we have worked to transform ourselves within the 
counterterrorism program, we have made significant changes to the FBI's 
counterintelligence program. Last May, when I announced the second 
phase of the FBI reorganization, I indicated that we would be 
refocusing our counterintelligence program to focus on the four threats 
I outlined. That effort is progressing with a centralized, nationally 
directed program. We established a Counterespionage Section responsible 
for overseeing all of the FBI's counterespionage efforts, including 
economic espionage, and we clarified our priorities and objectives in a 
``National Strategy for Counterintelligence.''
    With your support, we reprogrammed 216 positions from criminal 
investigations to counterintelligence, and we now have full-time 
counterintelligence squads in 48 of the 56 field offices.

          FISCAL YEAR 2004 COUNTERINTELLIGENCE BUDGET REQUEST

    For fiscal year 2004, we ask your support for program changes 
totaling $63 million and 599 positions, including 94 agents, to further 
our counterintelligence strategy. These resources would provide the 
necessary investigators, analysts, and surveillance capabilities needed 
to address emerging global threats, bolster both our fixed and mobile 
surveillance capabilities, and improve our ability to detect espionage 
activities targeting national assets and universities.

                          CYBER CRIME PROGRESS

    Next, I would like to discuss our third priority--cyber. We have 
created a consolidated new Cyber Division at Headquarters to manage 
investigations into Internet-facilitated crimes, to support 
investigations throughout the Bureau that call for technical expertise, 
and to help us coordinate with public and private sector partners.
    This strategy is proving successful. Our computer intrusion 
program, for example, has identified over 5,000 compromised computers, 
and resulted in 320 convictions and $20.4 million in restitutions. 
During 2002, Innocent Images National Initiative investigations 
resulted in 692 arrests, 648 indictments/informations, and 646 
convictions. And despite using only 5 percent of all FBI resources, the 
Cyber Program is facilitating investigative activities across all 
Bureau programs.

                           CYBER CRIME THREAT

    Unfortunately, we are seeing explosive growth in cyber crime--both 
traditional crimes such as fraud and copyright infringement that have 
migrated on-line, and new crimes like computer intrusions and denial of 
service attacks.
    To date, terrorists have posed only low-level cyber threats, but 
some organizations are increasingly using information technology for 
communication. Terrorist groups are increasingly computer savvy, and 
with publicly available hacker tools, many have the capability to 
launch nuisance attacks against Internet-connected systems. As 
terrorists become more computer savvy, their attack options will 
increase.

                     CHANGING TO MEET CYBER THREATS

    Looking forward, our Cyber Program will focus on identifying and 
neutralizing: (1) individuals or groups conducting computer intrusions 
and spreading malicious code; (2) intellectual property thieves; (3) 
Internet fraudsters; and (4) on-line predators that sexually exploit or 
endanger children. Our success will depend on maintaining state-of-the-
art technical capabilities to handle complex investigations and forming 
and maintaining public/private alliances.

                    FISCAL YEAR 2004 BUDGET REQUEST

    For fiscal year 2004, the FBI is requesting $234.4 million to 
protect the United States against cyber-based attacks and high-
technology crimes. This request represents program changes of $62 
million and 194 positions, including 77 agents. These resources will 
enable the FBI to staff computer intrusion squads in field offices, 
enhance technical capacities to identify persons illegally accessing 
networks, and provide funding for the training and equipment we need to 
more aggressively investigate cyber incidents. The requested resources 
will enable the FBI to increase its efforts to detect the sexual 
exploitation of children on the Internet. Over the past six years we 
have seen these cases grow in number from 113 to over 2,300. We must 
increase our commitment here. Finally, the resources would allow us to 
expand our ability to conduct computer forensics examinations. Right 
now, 6 out of 10 investigations require some level of computer 
forensics support. History tells us that the number of cases requiring 
this support will continue to grow and that the number of forensic 
examinations required per investigation will also continue to grow.

                          TECHNOLOGY PROGRESS

    I would like to touch on our efforts to upgrade FBI technology. 
Over the past two years the FBI has made significant progress in 
modernizing our information technology infrastructure to better support 
our investigative needs. On March 28, we completed the Trilogy Wide 
Area Network--three days ahead of schedule. High-speed local area 
networks have been deployed to 622 FBI locations. Over 21,000 new 
desktop computers and nearly 5,000 printers and scanners have been 
provided. The Enterprise Operations Center, which will manage our 
computer networks, becomes operational early this spring.
    We are now focused on implementing a corporate data warehousing 
capability that is key to FBI intelligence, investigative, and 
information sharing initiatives as well as to our records management 
system.
    Trilogy will change the FBI culture from paper to electronic. It 
will replace redundant searches of stove-piped systems. Agents will 
search multiple databases--linking thousands of data points of 
evidence, leads and suspects--through a single portal. Trilogy is the 
base for a modern computer architecture. Trilogy computers, servers, 
and networks will support state-of-the-art applications. Using Trilogy 
to transport, the Integrated Data Warehouse will link 31 FBI databases 
for single-portal searches and data mining. The Collaborative 
Capabilities program will allow electronic data sharing with other 
agencies.

                    FISCAL YEAR 2004 BUDGET REQUEST

    We are now at the point in our information technology upgrade where 
it is essential that we preserve these investments by ensuring there is 
sufficient funding for life-cycle operations and maintenance of systems 
and for technology refreshment. The fiscal year 2004 request includes 
increases of $82 million to fund technology refreshment and operations 
and maintenance. These resources will ensure that the equipment we have 
deployed stays in good working order, and that it is replaced in an 
orderly manner. The FBI can never again allow its equipment to become 
obsolete.

                             OTHER PROGRAMS

    We are completely restructuring our internal security programs and 
processes. We have created a dedicated Security Division and are 
consolidating security functions under a single management structure. 
As we implement these changes to improve security, we are addressing 
recommendations in the Webster and Rand reports. The fiscal year 2004 
request includes increases of $37 million and 126 positions, including 
32 agents. These resources will fund polygraph examinations, guard 
services, and other security expenses.
    The FBI Laboratory's R&D efforts generated more than 120 projects, 
providing more than 100 deliverable products to the operational units, 
58 technical publications, and 126 scientific presentations, in the 
last three years. The FBI's Combined DNA Index System software is used 
by 185 domestic and 23 foreign laboratories. The fiscal year 2004 
request includes $3.28 million and 32 positions funding nuclear DNA and 
the Federal Convicted Offender Program.
    I will conclude with the FBI's Criminal Program. We have opened 
more than 85 major corporate fraud investigations. At the end of fiscal 
year 2002, the FBI had five corporate fraud investigations with losses 
in excess of $1 billion. Currently, this number has increased to eight. 
Forty-five FBI field offices are participating in multi-agency 
corporate fraud working groups. The fiscal year 2004 request includes 
$16 million and 164 positions, including 54 agents. The request will 
fund additional investigators to support this initiative.

                                CLOSING

    The FBI has turned a corner in its history. With the support of 
Congress, we have been able to make dramatic and substantive changes. 
Our transformation continues because the threats facing the U.S. 
homeland continue to evolve. I want to reassure you that we are 
committed to protecting this country from those who seek to harm us 
through acts of terror, espionage, cyber attacks, or criminal acts. 
Every citizen must be able to enjoy the basic freedoms this great 
nation provides. The men and women of the FBI understand their roles in 
these challenging and uncertain times. With your support, we can give 
them the resources and tools they need to carry out our mission.
    Thank you.

                            COUNTERTERRORISM

    Senator Gregg. Maybe you could give us your thoughts on 
where we stand in fighting terrorism.
    Mr. Mueller. Looking at it from our perspective alone, the 
FBI is responsible for understanding the terrorist threats 
within the United States. Each month as we reorient our work 
force, as we increase our information technology (IT) 
capability, as we grow analytical capability, as we bring on 
more translators, as we focus on addressing counterterrorism as 
our number one priority and, as everyone in the organization 
comes to understand that, I think we have grown in our 
capability of understanding the threats within our borders.
    That does not mean that we could not still face individuals 
coming into the United States, sleepers who come in 
individually under our radar screen and, pursuant to some plot 
originated and directed overseas, contemplate a terrorist 
attack. But each month I believe that we have moved to better 
our capabilities and understanding of the terrorist threats 
within our borders.
    And if you couple that with the successes overseas, the 
arrest of Abu Zabaydah, the arrest of Ramzi Binalshibh, the 
detention of Khalid Shaikh Mohammed, the detention of Mustafa 
Ahmed al-Husawi, and our continuing debriefings of these 
individuals, our view of the capabilities of Al-Qaeda becomes 
more transparent and it gives us more confidence that we have 
an understanding of plots in the past, plots that were on the 
table as future possibilities.
    We still face a substantial threat, principally from Al-
Qaeda and their desire, willingness, capabilities, and unity of 
mission to kill Americans. So on the one hand, I think we are 
doing a much better job both here and overseas. On the other 
hand, we still face a substantial threat.
    Senator Gregg. What percentage of the agents are now 
involved in counterterrorism?
    Mr. Mueller. I believe it is up to--let me just check for a 
second if I could.
    Senator Gregg. Yes.
    Mr. Mueller. Yes, it is 23 percent. I had to check my 
figures.
    Senator Gregg. And what percentage are involved in the 
counterintelligence? And is that an overlapping number?
    Mr. Mueller. It is not an overlapping number, although--let 
me just--let me see if I can give you the figures, the 
percentage.
    I was just informed that we generally do not--I would be 
happy to provide the number of counterintelligence in closed 
session. Generally we do not give out the percentages or the 
numbers in open session.
    I will tell you that it is not an overlap. However, the--
since September 11th, my directions to the SACs, Special Agents 
in Charge, around the country is that their first priority is 
counterterrorism. There should be no counterterrorism lead that 
goes unaddressed. And consequently, we have overburned, as you 
would say, in counterterrorism substantially in the wake of 
September 11th, and that continues to drop until October of 
this year. And then as we ginned up for the response to the, at 
that time, probable incursion into Iraq, the numbers that were 
dedicated to counterterrorism ramped up again.
    And so there will be and there has been in the wake of 
September 11th, and there has been in anticipation and during 
the war in Iraq, a number of individuals who have been taken 
from other programs, including counterintelligence, to meet the 
short-term needs of addressing the September 11th 
investigation, and then the responsibility for protecting the 
United States from terrorist attacks which might have been 
associated with the war in Iraq.

                          CHICAGO FIELD OFFICE

    Senator Gregg. Let us take the field office, arbitrarily 
choosing Chicago as a large one. How many agents approximately 
do you think you have there? Do you know?
    Mr. Mueller. I just do not have that off the top of my 
head.
    Senator Gregg. Let us say it is 500. What----
    Mr. Mueller. I would say----
    Senator Gregg. What percentage----
    Mr. Mueller [continuing]. Yes, probably 500 or 600 in 
Chicago.
    [The information follows:]

                Number of Agents in Chicago Field Office

    As of April 10, 2003, the Chicago Field Office had a Funded 
Staffing Level of 422 agents.

    Senator Gregg. What percentage would be doing 
counterterrorism, and what percentage would be doing 
counterintelligence, and what percentage would be doing what 
they have always done in Chicago, chasing city officials?
    Mr. Mueller. I would be happy to get you those figures, but 
I can tell you in the wake of September 11th, there would have 
been a ramp up, a substantial ramp up in which probably 50 to 
60 percent of the agents in the months from October 2001 to 
April, May or June 2002, were addressing counterterrorism.
    As you got further away from September 11th, the numbers 
would drop back and be addressing the other programs, so that I 
would venture to say in a place like Chicago, 30 percent would 
be doing counterterrorism at the low point, August, September, 
before we started ramping up for Iraq. Now it is probably 
higher. And it certainly has been higher in the last several 
weeks because we completed, around the country, interviews in 
excess of 9,000 individual Iraqis who have provided us with 
tremendous information helpful to the forces overseas. But we 
have undertaken and completed 9,400 interviews around the 
country and we had to use agents from different programs.
    So if you look at it today, the percentage who would be 
working on what we say is counterterrorism would be a lot 
higher. If you looked at it back in August, I would say 
probably 20 to 30 percent of the Chicago office was working on 
counterterrorism. A lesser percent would be working on 
counterintelligence. A lesser percent would be working on 
cyber. And then a substantial number in the overall criminal 
programs, probably close to 40 percent, 30 to 40 percent, would 
be on all of the criminal programs. That would be public 
corruption, violent crime, gangs, organized crime, all lumped 
together under the criminal programs.
    [The information follows:]

 Clarification: Percentage Increase of Agents in Chicago Field Office 
Focusing on Counterterrorism Prior to September 11 to May/June of 2002, 
                        and During War With Iraq

    ``In the wake of September 11, there would have been a ramp 
up, a substantial ramp up in which probably 50 to 60 percent of 
the agents in the months from October of 2001 to April, May or 
June of 2002, were addressing counterterrorism.''
    In fiscal year 2001 (October 1, 2000-September 30, 2001) 
12.1 percent of all FBI field agents Bureau-wide were working 
counterterrorism. In the Chicago field office, 14.1 percent of 
agents were working counterterrorism.
    From October 1, 2001 through December 31, 2001, 52.4 
percent of all FBI field agents were working counterterrorism. 
In the Chicago field office, 34.7 percent of agents were 
working counterterrorism.
    From October 1, 2001 through June 30, 2002, 34.5 percent of 
all FBI field agents were working counterterrorism. In the 
Chicago field office, 26.7 percent of agents were working 
counterterrorism.
    ``As you got further away from September 11th, the numbers 
would drop back and be addressing the other programs, so that I 
would venture to say in a place like Chicago 30 percent would 
be doing counterterrorism I would say at the low point, August, 
September, before we started ramping up for Iraq. Now it is 
probably higher.''
    From October 1, 2002 through December 31, 2002, 22.3 
percent of all FBI field agents were working counterterrorism. 
In the Chicago field office, 19.2 percent of agents were 
working counterterrorism.
    From October 1, 2002 through March 31, 2003, 24.4 percent 
of all FBI field agents were working counterterrorism. In the 
Chicago field office, 19.6 percent of agents were working 
counterterrorism.
    The chart below illustrates these figures.
    The number of FBI agents involved in counterintelligence in 
the Chicago office is classified. The classified response is 
provided in a separate document.

             SUMMARY CHART OF AVERAGE FIELD AGENT ONBOARD FOR TOTAL FBI AND THE CHICAGO FIELD OFFICE
----------------------------------------------------------------------------------------------------------------
                                                               Bureau \1\                    Chicago \1\
                                                     -----------------------------------------------------------
                     Time Period                        Avg.     Avg. CT   Percent    Avg.     Avg. CT   Percent
                                                       Agents    Agents   of Total   Agents    Agents   of Total
                                                       Onboard   Onboard   Agents    Onboard   Onboard   Agents
----------------------------------------------------------------------------------------------------------------
Fiscal year 2001: 10/1/00-9/30/01...................     9,048     1,092      12.1       384        54      14.1
Fiscal year 2002, 1st Qtr: 10/1/01-12/31/01.........     8,904     4,666      52.4       377       131      34.7
Fiscal year 2002, 3rd Qtr: 10/1/01-6/30/02..........     8,791     3,029      34.5       371        99      26.7
Fiscal year 2003, 1st Qtr: 10/1/02-12/31/02.........     8,826     1,964      22.3       381        73      19.2
Fiscal year 2003, 2nd Qtr: 10/1/02-3/31/03..........     8,884     2,172      24.4       378        74      19.6
----------------------------------------------------------------------------------------------------------------
\1\ These number do not include Supervisory Special Agents.

                       COUNTERTERRORISM TRAINING

    Senator Gregg. What percentage of the curriculum at 
Quantico is dedicated to counterterrorism?
    Mr. Mueller. I can tell you that it has increased. I do not 
know the exact percentages. The basic skills, and by that I 
mean the skills that cut across all of the various substantive 
programs of the Bureau, probably take up 50 or 60 percent--and 
this is off the top of my head, and I would have to get you the 
exact figures. It is probably 50 to 60 percent.
    Thank you. For a percentage--I can tell you that since 
September 11th, we have added 32 hours of counterterrorism and 
counterintelligence training to the--on the counterterrorism 
and counterintelligence curriculum for the new agents. We also 
are putting in a separate training session specifically for 
counterintelligence.
    [The information follows:]

Percentage of Curriculum at Quantico Dedicated to Counterterrorism (CT)

    Currently, New Agents receive 116 hours of Investigative 
Training. Of these, 55 hours (approximately 47 percent) are 
dedicated directly to counterterrorism and counterintelligence 
training. Because these two training initiatives are extremely 
inter-related, singling out CT-exclusive training is difficult. 
All other training, such as Legal, Forensics, and Firearms, is 
an integral part of New Agent Training, but is not program-
specific. Additionally, CT analysts are also trained at 
Quantico in the College of Analytical Studies. The training 
includes a basic six-week course. Several advanced analyst 
courses have been developed as well.

                              FBI CULTURE

    Senator Gregg. I guess my question goes to this: How much 
has the culture changed? I mean, does the agent in the field 
today think that he is primarily a counterintelligence, 
counterterrorism agent? Or does he still think he is a super 
police officer----
    Mr. Mueller. I think the----
    Senator Gregg [continuing]. Or she?
    Mr. Mueller. No, I think that there are a couple of ways of 
looking at it. At the outset I would say when we talk about 
culture and when you think on it, if you looked at your FBI 
agent, the FBI agent is patriotic needless to say, dedicated, 
honorable, wants to do the job that is set by their country, in 
the same way that the military is. When a person joins the 
military, they do what the President directs for the military, 
to be one place one day and the next place the next day.
    In the past, we have been focused on cases with the 
expectation that a case would go to court. I believe since 
September 11th, almost everyone in the organization understands 
that you have to look at a piece of information as a piece of 
information, whether it is a piece of information for purposes 
of intelligence or a piece of information that can be used all 
the way into a courtroom. But it is very important for that 
piece of intelligence, that piece of information available to 
be looked at in a larger context of the intelligence mission of 
the Bureau.
    I have heard and believe that around the country, agents 
who want to do counterterrorism find that the skills that they 
have developed on the criminal side lend themselves to 
counterterrorism investigations, and that the mix of 
counterintelligence or counterterrorism experience is ideal. 
There are those around the country, and there probably always 
will be, who prefer doing drug investigations or white collar 
crime investigations. But I believe that the Bureau has shifted 
remarkably since September 11th to address and understand the 
importance of the intelligence function.
    I also have to give them the tools to do it. I have to give 
them the analysts. I have to give them the information 
technology. I have to develop the reports officers, and strip 
off the sources and methods so that we become a greater part of 
the intelligence community. I have to develop a cadre not just 
of reports officers, but intelligence officers who will look at 
things not just from the case perspective but also from the 
perspective of a particular strategic target, and adopt that 
which MI5 does well in certain areas in order to be successful.
    And the last point I would make is the--I have looked at 
MI5. I have looked at other intelligence areas, and I believe 
that the combination we have of intelligence capability and law 
enforcement capability under one roof is by far the best way to 
go, and avoids the stovepiping that we see elsewhere.
    Senator Gregg. I have a lot of other thoughts and 
questions. But I will turn to Senator Hollings.
    Senator Hollings. Thank you, Mr. Chairman.
    I first observe, Director Mueller, that you are not in any 
trouble. Otherwise, this table would be filled up, you know.
    It is not all of us here, just us chickens.

                               TERRORISM

    With respect to the status of terrorist that the chairman 
asked about, of course the real question is: Are they creating 
them faster than you get rid of them? You meet every morning 
and brief the President I believe.
    Mr. Mueller. Yes, sir.
    Senator Hollings. I wonder about the statement made by 
Mubarak in Cairo to the effect that we are creating 100 bin 
Ladens. That is what we have really got to worry about. We have 
got to make sure that we bring, as we are doing now, a quick 
end to Saddam. Otherwise, when we get that government going, 
but more particularly get the President's roadmap for peace in 
the Middle East ongoing--I notice that Chirac has announced a 
different roadmap. Tell the President to stick to his roadmap 
because--that is the creation of the terrorism.
    I mean, you can put on all of these numbers of agents, 
dedicate so many more agents to terrorism rather than to drugs 
or to crime or white collar, this or that, but unless and until 
we get to the source of the creation of them, they are creating 
them fast. That was the whole--but we have got our fingers 
crossed right now about the victory in Iraq. We have hit the 
bowl. The question is whether the follow-through is going to 
really work. And it is going to be extremely difficult to get 
all of these religious sects and get a democratic government. 
It is going to be tough.
    But that is the answer to the question of the status of 
terrorism, because it could be that we are creating them faster 
than you can get rid of them.
    Otherwise, on the culture, that is another difficult job 
that you have. And you talk about the agent out there, and 
you--it is a question of how do you get them so that they 
believe they are beyond the law or they can out-trick the law 
or they devolve into corruption or that kind, where they swap 
sides. We have had Miller and Hanssen, for one thing. I would 
have burned Hanssen. I do not know where you all get this that 
you can get more--I mean that was one clear-cut case and the 
files got him. So we had all the more that we could have gotten 
out of him.
    And if you do not really treat it as treason they will 
continue to say, ``Well, the jail is not so bad.'' I know we 
have built one down in South Carolina. I went to see it, and 
they had better rooms in the jail than they had the Citadel 
when I went to school. They have TV there. They have exercises, 
you know, and you can play ball in the afternoon and all of 
that kind of stuff. So the fellow who is hungry and out there--
I have worked on jails--if he does not have a pretty good go at 
it, he said he can get three squares and a warm place, and they 
get into crime.
    Similarly, if there is no real penalty and they get just 
wonderful security and three squares, what is the risk? You 
know what I mean.
    Mr. Mueller. Yes, sir.

                          COUNTERINTELLIGENCE

    Senator Hollings. Otherwise, we and the State Department 
swap around our ambassadors and chiefs of stations. We find--is 
there a swap-around system particularly in counterintelligence, 
where they just do not stay there and get corrupted in that 
sense? The Methodist ministry does that. I know we do that with 
Circuit judges in South Carolina.
    Somehow we have got to give polygraphs to everyone in 
counterintelligence. Every 3 years, I think, is the practice. 
When last did J.J. Smith get a polygraph?
    Mr. Mueller. I am not certain, Senator, on J.J. Smith. I 
can tell you that on the--on Ms. Leung, the other individual, 
she was polygraphed back in the 1980s but not more recently 
than that. I have to----
    Senator Hollings. Well, now----
    Mr. Mueller [continuing]. Tell you that we have changed our 
policy in the wake of----
    Senator Hollings. You have changed your policy?
    Mr. Mueller. We have changed our----
    Senator Hollings. Thank goodness.
    Mr. Mueller. We have dramatically improved our----
    Senator Hollings. I asked Judge Freeh about Hanssen----
    Mr. Mueller [continuing]. Use of polygraphs.
    Senator Hollings [continuing]. And he had not had one in 20 
years.
    Mr. Mueller. I also took one before my confirmation.
    Senator Hollings. Yes, sir.
    Mr. Mueller. So I have been through it along with everybody 
else, and it was an experience.
    [The information follows:]

   Most Recent Polygraph of Special Agent James J. Smith, Subject of 
               Espionage Case in Los Angeles, California

    Operating under previous policies, Agent Smith never 
received a polygraph examination, as he retired prior to the 
Hanssen case. Under the current polygraph policies, an agent in 
a similar position would be subject to periodic 5-year 
reinvestigations requiring a counterintelligence-specific 
polygraph, and would also be subject to random testing. In 
addition, all new employees are subjected to a pre-employment 
polygraph.

    Senator Hollings. I was on the Intelligence Committee, and 
we knew good and well where the leaks were in the staff, and so 
you never ask a man to do something that you are not going to 
do yourself. We learned that in the war. So I went over to the 
Capitol Police; it was a 2-hour thing. And the first question, 
I started my answer, I said, ``Well, in my humble opinion,'' 
and the damn needle just went right straight across.
    Senator Gregg. I am not sure a polygraph has been designed 
that would be able to handle your answers----
    Senator Hollings. But in any event----
    Senator Gregg [continuing]. Or understand them.

                         DOMESTIC INTELLIGENCE

    Senator Hollings. When 9/11 occurred, it was like--it is 
like that, ``When in danger, when in doubt, run in circles, 
scream and shout.'' And one of the screams was, ``We need a 
whole new division of domestic intelligence rather than the 
FBI. I think you are handling it. You are reorganizing it, but 
it has sort of been top secret in that sense that--I have 
explained to colleagues what you have been doing. Somehow you 
have a PR man. That is all J. Edgar had. Find out his 
descendant and get him.
    And tell what is going on, that can be told, because they 
do not realize the tremendous effort you have made on domestic 
intelligence.

                                TRILOGY

    With respect to the Trilogy, as I understand you said you 
were going to have a cost overrun of $137.9 million. And we 
asked you to take it out of the hide of the budget, and that 
was going to require a reprogramming.
    Mr. Mueller. Yes, sir.
    Senator Hollings. Have you got that reprogramming request 
before us?
    Mr. Mueller. I have the--it is over at the Department of 
Justice at this point.
    [The information follows:]

              Status of the Trilogy Reprogramming Request

    As of April 10, 2003, the Trilogy reprogramming request was 
at the Department of Justice. The request was forwarded to the 
Office of Management and Budget (OMB) on April 17, 2003, and 
approved by OMB on April 25, 2003. On May 21, 2003, the request 
was transmitted to Congress.

    Senator Hollings. I see. What about keeping, now, that 
Trilogy up to date? If we get all of this stuff and everything 
else like that, but do we have an ongoing plan to keep it 
moving and going?
    Mr. Mueller. Yes, absolutely. Yes. Let me back up a second 
and say that----
    Senator Hollings. Yes.
    Mr. Mueller [continuing]. I would take responsibility for 
the cost overruns.
    Senator Hollings. Yes.
    Mr. Mueller. When I came in, it took me a while to 
understand the information technology or lack thereof in the 
Bureau, and the current plans to upgrade it. And it takes a 
while to get it into my head because I am not a computer 
programmer at all. But as we went along, it seemed to me that 
our plans and what we had budgeted for and what Congress had 
given us would be inadequate to the mission that we had, in the 
sense that it was not upgrading our essential databases, giving 
and putting it into a new, upgraded database architecture that 
would be a platform for the future. And as has been described 
to me by others in the Bureau, what we were doing in the 
previous budget was putting lipstick on a pig.
    Senator Hollings. Yes.
    Mr. Mueller. In other words, the pig is our old databases 
and we are putting a GUI, Graphical User Interface, on it that 
would make everybody happier in terms of input and output, but 
would not enable us to use the analytical tools that we needed. 
So I had them go back to scratch. And in going back to scratch 
and developing the database structure that I believe will be 
the foundation for the future, it ended up costing more. That, 
coupled with the fact that we had two contractors and we need 
an integrator, is principally responsible for the overruns.
    Now, I believe that those changes that we have made are 
absolutely indispensable to our ability to continue to refresh 
our information technology down the road. It makes no sense for 
us to have and put into place that which will be obsolete in 2 
years. And we are increasingly looking at and focusing on what 
we do in-house as a foundation for the future, whether it be 5 
or 10 years down the road, and enhancing our capability to get 
commercial-off-the-shelf, COTS, products in to augment what we 
are doing, as those COTS products get developed by the various 
contractors out in the field.
    So we have asked for, I believe, something in the range 
of--what is it? $82 million, is it? Yes, $82 million in the 
2004 budget, principally directed at enhancing our information 
technology.
    [The information follows:]

 Clarification: Amount Requested for Information Technology in Fiscal 
                               Year 2004

    In fiscal year 2004, the requested increase for information 
technology is $82 million. The FBI requests $80 million for 
Trilogy operations and maintenance (O&M) and technology 
refreshment and $2 million for the Top Secret/Sensitive 
Compartmented Local Area Network O&M.

    Mr. Mueller. As to the $137.9 million, you are right. You 
did say take it out of our base funding, and we are taking it 
out of our base funding. We have the reprogramming over at the 
Department of Justice. And I am looking at the information 
technology dollars with a view to making certain that every one 
of those dollars is spent wisely.

              CRIMINAL JUSTICE INFORMATION SERVICES (CJIS)

    While I am on this subject, because it is important to the 
future of the Bureau----
    Senator Hollings. Yes.
    Mr. Mueller [continuing]. I will tell you that we have 
tremendous capabilities out at CJIS, for instance, Integrated 
Automated Fingerprint Identification System, or IAFIS, the 
fingerprint databases, NICS, National Instant Criminal 
Background Check System----
    Senator Hollings. How long does it take with the 
fingerprint thing? If I am----
    Mr. Mueller. Seconds.
    Senator Hollings [continuing]. The highway patrol and I 
take a fellow and I have his fingerprints----
    Mr. Mueller. Seconds.
    Senator Hollings. Seconds?
    Mr. Mueller. Seconds.
    Senator Hollings. It used to take 1 month or 2 months.
    Mr. Mueller. Seconds.
    Senator Hollings. Yes, good.
    Mr. Mueller. And with the expansion of our database, we 
have a number of cases now where we have gone back 20 or 30 or 
40 years and provided fingerprint matches to State and local 
law enforcement entities that have enabled them to solve 
homicides in ways they had not been able to solve them in the 
past.
    There were two officers who were killed out in Los Angeles, 
something like 30 years ago. And with our enhanced 
capabilities, fingerprint capability--they still have not 
forgotten about that case in that police department out there. 
They sent the fingerprints in from the crime scene, and it was 
matched with an individual who lived down in--it may have been 
South Carolina, but one of the Carolinas. I do not know which 
one, or Georgia. And it turned out he had been living there for 
a number of years, married, had a family, but he was 
responsible for killing these two police officers 30 years ago, 
and they brought him back and he pled guilty last week. That is 
the kind of work that is done out at CJIS.
    Now as we grow as an organization, what we have to do is 
enhance our information technology capabilities there and 
better integrate it in to what we do in the Bureau overall.
    [The information follows:]

                Clarification: IAFIS Case in Los Angeles

    More than 45 years ago, two California police officers were 
shot and killed. A latent fingerprint was developed from a 
vehicle involved in the case, but searches of that print met 
with negative results. Last year, detectives in the Los Angeles 
County Sheriff's Office initiated a search of the latent 
fingerprint against the database of the Integrated Automated 
Fingerprint Identification System (IAFIS). The search resulted 
in the identification and arrest of Mr. Gerald Mason, who was 
in the database because of a 1956 burglary arrest. The FBI 
notified the Los Angeles County Sheriff's Office. Mr. Mason was 
located and arrested at his residence in South Carolina on 
January 29, 2003.

    Mr. Mueller. I do not mean to get on my hobbyhorse on that, 
but----

                       DRUGS/TERRORISM FINANCING

    Senator Hollings. Oh, no, it is better to know that you 
have a grasp of it, and that was really the question. And you 
really know more about it than I do.
    But I am a little concerned--of course, I am--sometimes I 
get our chairman and so forth and we find out what we are going 
to do on drugs. I started 30-some years ago right at this table 
and we were burning the poppy fields in Turkey, and then we 
went to Marseilles and broke up the factories, went down into 
Paraguay and up to Colombia and over to the triangle at Chiang 
Mai, up in Laos, and I met with the Japanese and the 
Australians and everybody else. I said, ``Let us go into Burma 
now and look.'' But they said, ``Oh, no, they have armies over 
there. You would get killed.'' They were shipping in 50,000 
pounds of heroine out through Bangkok every week, that kind of 
thing.
    And now, I pick up the morning paper, and the drug war in 
Colombia has spilled over into Venezuela. However, the--you 
keep telling us, you folks in law enforcement, that this 
terrorism is financed by drug money. And I looked and see where 
you moved 567 agents from drugs to counterterrorism. Can we not 
ask for just more and get them--have them keep going, not 
necessarily on the ordinary drugs and everything, but at least 
the money part? Because that is what finances the terrorism.
    Mr. Mueller. Well, we are--whenever we have--as I said, 
terrorism is our first priority.
    Senator Hollings. Yes.
    Mr. Mueller. If it relates in some way to----
    Senator Hollings. And the money part----
    Mr. Mueller [continuing]. Financing by narcotics----
    Senator Hollings [continuing]. Is the first priority of the 
first priority.
    Mr. Mueller. First is--we take that as a priority. We 
recently did a case in New York where we found that heroin from 
Afghanistan was being sold in the United States, distributed in 
the United States, and the monies were going back to 
Afghanistan to the Taliban and Al-Qaeda. And so we address 
cases like that, and we have done a number of cases involving 
the FARC out of Colombia, where it looks like cocaine monies 
were being used to purchase weapons and the like.
    I took 400 initially, 400 positions from the drug programs 
in a reorganization and reprogramming because I believe that we 
had to reorient ourselves, first of all, as an agency before I 
came back to either the administration, the Justice Department 
or the Congress for additional resources. And in looking at it, 
it seemed to me that, first of all, I needed to put our house 
in order, focus on our priorities, be absolutely clear on what 
our priorities are up and down the line, and then have not only 
the FSL, funded staffing level, the manpower directed towards 
the priorities, but also the financing.
    The process I went through in making those decisions was to 
go to the Special Agents in Charge and say, ``What do you need 
to do in each of your territory's divisions to address either 
perceived counterterrorism, mission or threat in that 
division?'' And they came back with various numbers of agents 
that they believed they needed, depending on the division.
    Now, quite probably, one or more of them came back and 
said, ``Well, the Director is going to give us new resources,'' 
and maybe gave me more numbers than they really actually 
needed. So we cut them down and looked at it across the 
country, and came up with approximately 500 that the Special 
Agents in Charge said, ``We need these numbers in our divisions 
to address counterterrorism.''
    And I went back to them and said, ``In your divisions, what 
are your priorities? What programs would you take these agents 
from?'' And coming back, it was 400 that came from the drug 
program. And I looked at that and I said, ``Okay. Why are we 
taking them from the drug programs?'' And we looked at areas 
where we overlapped with the DEA in terms of addressing the 
cartels, and we looked at areas where we do standalone drug 
cases that increasingly can be done by State and local law 
enforcement, standalone methamphetamine case, standalone 
marijuana cases.
    And what I wished us to remain focused on, are the 
organized crime drug enforcement task force cases, the high 
intensity drug trafficking areas cases, and those areas where 
we bring something special to the table and where we do not 
overlap with other Federal agencies or State and local 
agencies.
    Now, as we go down the path and I hear from State and local 
law enforcement, many of them are saying, ``We miss you in the 
drug area. We want you back more than you were before,'' and 
that is something that I will have to address down the road.

                                 LEGATS

    Senator Hollings. Well, as I understand it, Judge Freeh was 
putting these Legats out into the different countries as drug 
agents, and now I see you have them in Sarajevo, Bosnia, 
Kuwait, Uzbekistan, Kabul, Afghanistan, Belgrade, Serbia, that 
they have really moved from drugs to counterterrorism. You have 
been putting them down in the West Bank. You have put them 
somewhere in Beirut. You have put them in Syria. You have put 
them in Cairo. You have put them down in Riyadh. When you have 
them in Bosnia and Sarajevo, you are still chasing drugs. 
Afghanistan, you still--well, I mean, you might find some Al-
Qaeda left there. But look at that, because what we have got to 
do is get both, to tell you the truth----
    Mr. Mueller. The list----
    Senator Hollings [continuing]. Of where the real money is 
coming from.
    Mr. Mueller. The list that you have read off----
    Senator Hollings. Yes.
    Mr. Mueller [continuing]. Are those that we are 
requesting----
    Senator Hollings. Yes.
    Mr. Mueller [continuing]. Expansion on in those particular 
cities. We do have a Legat in Cairo. We have Legats in Riyadh. 
We are expanding the Legat in Riyadh and minimizing--or I 
should not say minimizing, but cutting back the territory that 
was--or for which Riyadh was responsible. So we are adjusting 
our Legat distribution to reflect the new challenges of 
addressing counterterrorism. Even in South America, where there 
may well be enhanced activity from those who are affiliated 
with either Al-Qaeda, Hezbollah, or Hamas, our Legats down 
there are now finding that they are handling that type of 
activity rather than narcotics activity.
    And lastly, we do want to put a Legat in Beirut. We have 
been discussing that with the State Department for some time. 
The State Department has the embassy there, but because of the 
threat level, you need to have the personnel working the 
embassy in secure compound grounds. They simply do not have 
room now. They are anticipating building a new embassy to be 
completed in, I think, 2006, and then they will have space for 
us. And in the meantime, we are going to be exploring having a 
greater presence in Beirut than we currently do.
    Senator Hollings. Yes, you have to get to them and tell 
them to move somebody out. You cannot wait until 2006.
    One final question--Mr. Chairman, you have been very good 
to me.

                             REORGANIZATION

    How do you coordinate our--just looking at the breakdown 
now that you have in the reorganization of the Bureau itself, 
and you have all of this Trilogy and you have all of these 
different officers and responsibilities. But where is the 
coordination? And how is that working so that you are informed? 
We cannot have another Minnesota situation where they kept 
calling the Headquarters but somehow it did not get through.
    Mr. Mueller. Well, there are actually three ways. The first 
way is--every time I speak to groups at the FBI, I say, ``I 
want to know the bad news.'' Inevitably, the good news has a 
way of reaching the top. It is the bad news that does not.
    Senator Hollings. Yes.
    Mr. Mueller. When I find that I do not get the news of 
those things that are wrong and substantial, I am not happy and 
that word has gone out. And so I have tried to change and make 
people understand that I would be twice as mad about not 
hearing about a mistake than hearing that a mistake was made. 
We are going to have to take risks. I want people to be 
aggressive investigators.
    And people will take risks, and I want them to take risks, 
and I do not want them to feel that they will be disciplined 
for taking the risk. We all make mistakes; I will make more 
than most people in the organization. But I want to hear about 
the issues such as what happened in Los Angeles, such as what 
happened in Minneapolis.
    The second way is by changing the accountability and 
responsibility for the national programs. And by that I mean 
counterterrorism, counterintelligence and cyber. Whereas in the 
past it would be the field office that was responsible for any 
particular case, in those national programs it is the Assistant 
Director in charge of counterterrorism that is responsible for 
the success or failure of a case. That means that individual 
has to know what is going on around the country. The Assistant 
Director does not do the investigation but must know about the 
investigations. And when it is in counterterrorism, there has 
to be direction from the center. There has to be accumulation 
of intelligence, analysis of that intelligence, dissemination 
of that intelligence, and undertaking operational 
responsibilities for that intelligence.
    So centralizing responsibility and accountability in those 
programs, I think, is going to make a substantial difference 
from the way we operated prior to September, prior to September 
11th.
    And the third way is that I have expanded--thanks to the 
approval of my initial reorganization, I have now four 
Executive Assistant Directors who have a much smaller span of 
control than before. Before September 11th, there were I think 
12 Assistant Directors, all reporting to the Deputy Director 
and then to me. Now I have a Deputy Director and there are four 
Executive Assistant Directors who report to the Director and 
the Deputy Director. So the span of control in these various 
areas is much more narrow than it was prior to September 11th.
    Senator Hollings. Thank you, Mr. Chairman.
    Senator Gregg. Senator Kohl.

                        HYDROGEN CYANIDE WEAPONS

    Senator Kohl. Thank you, Mr. Chairman, Senator Hollings, 
Director Mueller.
    Within the past month, the FBI has warned law enforcement 
agencies nationwide that terrorists could build a simple but 
deadly chemical weapon out of readily available materials. 
Specifically, the FBI cited hydrogen cyanide or chlorine gas as 
easy-to-make chemical weapons. What is so disturbing is how 
easy it is to obtain cyanide. As you know, it is readily 
available at chemical supply warehouses, from mail-order 
catalogs, and even via the internet.
    As you probably know much better than I do, terrorists may 
well use cyanide in a future attack. Attorney General Ashcroft 
told this subcommittee last week that he would work with us to 
prevent terrorists from acquiring this simple chemistry to 
launch an attack. We also hope that you can pledge to work with 
us to address this concern.
    How serious of a threat does the widespread availability of 
toxic industrial chemicals like cyanide pose? And what do you 
suggest we do? Are you prepared to work with us on some 
legislative improvement to the problem?
    Mr. Mueller. Well, we sent out a bulletin several weeks ago 
relating to a relatively simple explosive device, the schematic 
for which we had picked up in one of our searches overseas. It 
was to alert State and local law enforcement to be aware of 
this potential threat out there.
    We have over a period of time received threats about the 
possible, the potential use of cyanide in an attack. We have 
received threats internationally. Working closely with the CIA, 
the FBI has focused on addressing and identifying the expertise 
for use of this compound, amongst other types of poisons. We 
have also focused on the individuals in Al-Qaeda who may have 
that expertise and understanding, and those individuals in Al-
Qaeda that may be participating in a network that would 
undertake such an attack utilizing cyanide.
    And when we receive the threats relating to use of the 
cyanide, we also may see in the same genre threats relating to 
the use of ricin, sarin, or other such compounds.
    With specific regard to cyanide and its ease of use in the 
United States, whenever we have an indication in a case that 
there is a potential for the use of cyanide, we utilize every 
arrow in our quiver, whether it be Foreign Intelligence 
Surveillance Act (FISA) intercepts or aerial or individual 
surveillance to make certain that we address that threat 
immediately.
    We also have reached out to the chemical companies, and the 
groups that represent chemical companies, to develop a liaison 
so we can do a better job in trying to identify misuses of 
cyanide compounds within the United States. As you know, it is 
very easy to get. It is prevalent--well, I should not say it is 
prevalent. But it is not hard to get. You can get it off of the 
internet, and we were exploring ways to curtail it, curtail 
that.
    We actually recently had a prosecution up in--I guess it 
was in Chicago, an individual who was--he had not--he was 
storing sodium cyanide and potassium cyanide and other toxic 
chemicals in passageways under the streets of Chicago. And we 
were onto that, we identified it and successfully prosecuted 
that individual. So where we find an indication of the use of 
cyanide, we investigate it, and we prosecute.
    We are working with the chemical industries within the 
United States to do more on that. We are certainly willing to 
cooperate and work with you in terms of additional legislation 
to address that threat.
    Lastly, we are working with the CIA and other agencies both 
within the United States and outside of the United States, to 
address any threats relating to the use of cyanide or any such 
compounds that comes from overseas.

                CIGARETTE SMUGGLING/TERRORISM FINANCING

    Senator Kohl. Within the past month, the FBI has warned--I 
am sorry. Recent ATF investigations reveal that tobacco 
smugglers are using the profits they make from illegal 
operations in the United States to fund terrorist organizations 
like Hezbollah among others.
    I raised this issue with the Attorney General last week, 
and he seemed genuinely interested in helping to tackle this 
issue. This is a serious problem that is not getting the 
attention I believe that it deserves. It is a funding source 
for terrorism. Should the FBI play a role in investigating the 
terrorism-related aspect of this problem? Do you agree that 
this is a serious terrorism-related concern? And can you pledge 
to work with us on finding some remedy for terrorist 
organizations which use the legal profits from the tobacco 
industry?
    Mr. Mueller. Yes, I--we have had several recent cases, 
principally Hezbollah, where cigarette smuggling has been one 
of the illegal activities engaged in by individuals affiliated 
with Hezbollah, to gather monies, of which have been siphoned 
off to terrorist organizations overseas.
    We had a successful prosecution most recently in North 
Carolina in which a number of Hezbollah-associated individuals 
were convicted for their actions in cigarette smuggling. We 
recently had a case up in, I believe it was Detroit, that we 
indicted where there were a number of illegal activities by a 
group of individuals again associated with Hezbollah, and the 
charges there are racketeering charges.
    So we have a number of areas where we have seen this as one 
of the illegal activities engaged in principally by those 
associated with Hezbollah to gather funds. We are looking at it 
individually and through our Joint Terrorism Task Forces, by 
addressing the terrorist groups engaged in all types of illegal 
activities, including cigarette smuggling, extortion and other 
traditional racketeering crimes.
    We also have a terrorism financing section that was 
established after September 11th in the Counterterrorism 
Division, that has been working hard on all means and 
mechanisms of the financing of terrorists--not just profits 
that come from cigarette smuggling but also from narcotic 
trafficking, from extortion, and as well as from non-
governmental organizations (NGOs), charitable organizations. So 
that section was established with experts in finance to focus 
on the sourcing and the funding of terrorists.
    And lastly, I would say we are working hand in glove with 
the CIA because most of the terrorism financing does not stop 
at our borders. It is integrated with other pockets of 
financing overseas, whether it be in the Middle East or in 
Europe. And so we are working very closely with our 
counterparts and with the CIA to focus on financing, to have a 
comprehensive strategy to address terrorism financing around 
the globe, of which the financing in the United States is but a 
part of it.
    Senator Kohl. Thank you for that answer.
    Thank you, Mr. Chairman.

                         INFORMATION TECHNOLOGY

    Senator Gregg. Thank you, Senator.
    I think it was Mr. Lowery who was reported to say that 
there is going to have to be a number of items in technology 
activity that would not be pursued in order to pay for the 
Trilogy. That was reported in the Federal Register. I think it 
was the Federal Register. Oh, Federal Times.
    What would be the items that you would not be pursuing in 
order to pay for Trilogy?
    Mr. Mueller. That is--he was misquoted.
    Senator Gregg. Oh. We have all experienced that.
    That is a good answer.
    That is a good answer.
    Mr. Mueller. It is also the accurate answer.
    He was misquoted. As I think we--as I have said before, to 
fund $137.7 million, we are taking those funds from a number of 
areas that I think we have let you know of. None of them are 
from other information technology projects. They are from--let 
me see. I know I have it some place here.
    We are taking the monies from unobligated balances from the 
emergency supplemental, as I know you will--we will probably 
discuss at some point; from prior year unobligated balances, as 
well as a reallocation of certain funds available in the 
current year. And they include some funds that we have set 
aside for information technology.
    I am tremendously frustrated, was when I first came and 
still am, at the fact that our information technology is not 
where I want it and need it to be tomorrow and today. I have 
come to learn through trial and error that I have to make 
certain that when we put pieces in place, that they are well 
thought out, that those pieces fit into the overall 
architecture and puzzle of the Bureau so that we do not have 
these same stovepipes. But there is so much more we could do 
with information technology, that every dollar I can get in our 
budget that I can put into advances in information technology, 
I am looking to put in. Now, that is difficult when I am having 
to ramp up the agent strength in our various programs, but 
particularly counterterrorism and counterintelligence, but I am 
loathe to take monies away from information technology for 
anything else.
    [The information follows:]

           Clarification of Sources of Trilogy Reprogramming

    The FBI proposes to fund the $137.9 million needed for 
Trilogy from prior year unobligated balances, current year 
funds, available information technology funding, and $33 
million in excess user fees. The FBI submitted a reprogramming 
request to the Department of Justice and the Office of 
Management and Budget. The detailed request was transmitted to 
Congress on May 21, 2003.

    Senator Gregg. Well, I agree with what you say. I think 
there is no question that the Department has had an antiquated 
technology capability for a long time, the agency, the Bureau. 
But the problem that we have seen, especially with the Bureau, 
but with other groups that we oversight in this committee, is 
that we build these, we make a commitment to move down these 
technology roads and then we build them out and we find that we 
have made huge errors, and we spend a lot of money. IAFIS was 
an example. NCIC was an example. Trilogy as it started was a 
classic example. The worst, of course, is the INS, which is in 
a category of its own when it comes to having wasted money on 
technology. It does not even communicate within the Department.
    And so we agree with you, that you need funds for 
technology. But our concern is if we give you too much money 
too fast, you end up buying stuff that does not work simply to 
spend the money and you end up going down roads that lead to 
dead ends or do not produce product, that do not create the 
integration that you need. So that is our reservation on some 
of this.
    I think you have done a good job of getting the technology 
on the Trilogy back together and up and focused, and that is 
great.
    I think, though, the same concept, the same fear, at least 
as far as my feeling, is with the amount of money that we are 
putting into the Bureau. It is coming in very fast, and you are 
shifting gears from a national police force to being a 
counterterrorism and counterintelligence force. And you are 
setting up, as you have to, all sorts of different things very 
quickly.
    The question is: Are we going to, by giving you this much 
money this fast, do you a disservice because you will end up 
going down the road of creating activity that 2 years, 3 years 
from now we will find out was just a waste?
    Mr. Mueller. Well----
    Senator Hollings. If you will yield on that point.
    I thought when you called about Smith, that you were going 
to call about the supplemental and I had the answer that you 
had $123 million unobligated. That is what you are talking 
about, right?
    Mr. Mueller. That is one of the answers.
    Senator Hollings. Yes.
    Mr. Mueller. Well, let me try to address those----
    Senator Gregg. Right, the $320 million is just----
    Mr. Mueller. Well, let me try to address those in some form 
of order. I think 18 months ago we had very little credibility 
in many places up here. And I came to see it because we had not 
put into place in my mind the individuals and the structure to 
address something that you need outside expertise to advise on. 
I think in the world, the FBI Special Agents, I think they are 
the best information gatherers in the world, best 
investigators.
    But when it comes to information technology, when it comes 
to financial posterity or financial planning, when it comes to 
running a 27,000-employee business, that background does not 
easily lend itself to that kind of organizational structure. 
And the biggest change I think we have made in the last 18 
months is bringing in individuals who have expertise in those 
areas. Whether it be Tina Jonas behind me as chief financial 
officer (CFO), who is familiar with this particular area, or 
Wilson Lowery, who came from IBM where he was part of the team 
that was doing re-engineering, or a chief information officer 
(CIO) that came from outside, the individuals we brought in I 
need to advise me and make certain that we are on the right 
track.
    And it is not just one person, as I have explained before. 
It is somebody who understands the finance; somebody who 
understands the technology; somebody who understands the 
project and getting the project done on time. All of these are 
talents that are specific and unique unto themselves, and you 
need all of them to reach the finish line. We have a number of 
those talents. We need some more.
    The other thing is, for my own sake, I mean, I come in from 
having been a prosecutor for a long time. Yes, I ran a criminal 
division at the Department of Justice, but I had not run a 
27,000-person institution where you needed to transform the 
institution and the technology. It has been a learning 
experience.
    And the one thing I have learned is that if I do not 
understand it and do not know and keep track of what is 
happening on the information technology side, it is going to go 
awry. Even though I am not a CIO, even though I am not a 
computer programmer, I do believe in order to transform the 
institution, you have to keep track of it from the very top and 
force yourself to learn it. And I am responsible ultimately for 
the success or failure of that program. I was delighted, as was 
everybody else, when we put in the wide area network and it 
came in on time.
    I will tell you that in October, as I may have mentioned to 
you before, we had what I call the ``graybeards'' come in and 
sit down with us for 2 days and go through our IT plans. And 
these are persons from Sandia Laboratories and elsewhere, and 
both Federal Government and outside computer specialists, to 
look through what we plan to do. And they came up with two 
points.
    One is that they said we would have substantial difficulty 
putting in the wide area network (WAN), because we were 
utilizing switches developed by the intelligence community that 
had never been put into a wide area network that size. And so I 
had some fear and trepidation that we actually would not get to 
the finish line on that, but we did.
    The second thing I learned is that--I had assumed that, for 
instance, you could put all of the information in a database, 
into one database. They came back and said no; for security 
reasons, no, keep separate databases.
    And so it is a combination of learning as we go along, 
having persons responsible for looking at the financial part of 
it, and where we are going. Are we spending our dollars 
correctly? Do we have the right contractors? Do we have the 
right technology? And will this technology put us where we want 
to be 5 years down the road?
    And these are the issues that I spend a substantial amount 
of time on now, because they are so integral to the future of 
the Bureau.
    Senator Gregg. Well, we appreciate that. And we also spend 
a substantial amount of time on that, and do appreciate 
communication in that area.
    Mr. Mueller. I always am open to suggestions, also. If we 
are doing it wrong, I want to know it, and I want to know it 
earlier rather than later. And so I am always open to 
suggestions as to how we can do it better.

                            COUNTERTERRORISM

    Senator Gregg. As an ancillary issue, you are now setting 
up, it appears to me, and which you have to, a whole series of 
counterterrorism intelligence task forces. You have TTIC. You 
have the foreign terrorism task force. As I understand it, 
every field office is going to have an intelligence officer who 
is the coordinating individual, which may have been set up 
outside without contacting the Congress, which we will need to 
discuss, but probably not here.
    Are we putting up so many of these groups that we are going 
to be back to where we were before 9/11, where there is just 
too many people out there doing the same stuff, or relatively 
related stuff, but they are not communicating with each other? 
Should we put the foreign task force in with the TTIC or----
    Mr. Mueller. Well, now, let me address a number of those 
issues. What I have tried to do in the Counterterrorism 
Division is specialize in certain areas such as finances and 
communications. The Foreign Terrorist Tracking Task Force, 
which is database mining for a particular operational mission, 
all of those are operational in the sense that they gather 
information in a particular area and then will run operations 
by that, further investigations in particular areas to identify 
terrorists, terrorist financing, terrorist communications, etc. 
And I consider those to be operational, and what we need to 
develop within the Counterterrorism Division to support the 
counterterrorism responsibilities nationwide.
    At the same time, I believe we had to enhance the focus on 
intelligence within our organization. I take full 
responsibility and I apologize for not having done the 
reprogramming that should have been done in anticipation of 
announcing the selection of an individual to be Executive 
Assistant Director for Intelligence. I had an Executive 
Assistant Director. It was my naive thought that since I had an 
open Executive Assistant Director position, I could put the 
person in there and call that person the Executive Assistant 
Director for Intelligence, without running it past Congress, 
for which I apologize.
    And with regard to the intelligence units in each of our 
field offices, we have intelligence units scattered around most 
of our field offices. And I wanted to make certain that that 
becomes an established program down the road. That also I 
should have run past you, and we will. But my expectation is 
what we will lend to our field offices is the capability of 
having an entity there that will be charged with gathering that 
intelligence and pushing it up, and as you look at it, I think 
you will find it beneficial.
    The last issue is: Do we have too many task forces? Do we--
are we----

  TERRORIST THREAT INTEGRATION CENTER/FOREIGN TERRORIST TRACKING TASK 
                                 FORCE

    Senator Gregg. Well, specifically, the Foreign Terrorist 
Task Force, why should that not be folded into this TTIC?
    Mr. Mueller. Because I believe it is operational--it is 
looking at identifying individuals who may fit a particular 
match of a terrorist and requires investigation as part of 
that.
    Now, when you look at what the TTIC is going to be--I 
believe in it. I am very supportive of the Terrorist Threat 
Integration Center because I believe we need an analytical 
center that focuses on terrorist threats, an analytical center 
where you have analysts that are pulling the pieces of 
information together from the various separate databases with 
regard to particular threats. But I do not believe that that 
should be operational.
    Senator Gregg. All right. That explains that.
    Well, let me just say on my behalf and I think I speak for 
most of the folks up here: We think you are doing a great job. 
You are trying hard, and you are certainly focused. And you are 
changing a ship that has been going one way for many years, and 
that has got to be done, and it is going fairly well. We are 
very impressed with the work you do.
    We appreciate the fact that your agents out there are 
trying to defend us and make us safe as a country, and we want 
to thank them for their service. We know they are working long 
hours, and they are out there trying to do something to protect 
us. And we appreciate that. Thank you.
    Senator Hollings. I concur.

                         conclusion of hearings

    Mr. Mueller. Thank you.
    Senator Gregg. Thank you very much.
    Senator Hollings. Thank you, Mr. Chairman.
    Senator Gregg. Thank you.
    [Whereupon, at 11:12 a.m., Thursday, April 10, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    [The following testimonies were received by the 
Subcommittee on Commerce, Justice, and State, the Judiciary, 
and Related Agencies for inclusion in the record. The submitted 
materials relate to the fiscal year 2004 budget request for 
programs within the subcommittee's jurisdiction.]

                         DEPARTMENTAL WITNESSES

                             THE JUDICIARY

 Prepared Statement of Leonidas Ralph Mecham, Director, Administrative 
                       Office of the U.S. Courts

                              INTRODUCTION

    Chairman Gregg, Senator Hollings, and Members of the Subcommittee: 
thank you for giving me the opportunity to present the fiscal year 2004 
budget request for the Administrative Office of the United States 
Courts (AO).
    Let me first take a moment to thank you for your help in conference 
on the fiscal year 2003 appropriation for the AO. I am grateful of your 
support in providing the AO with an increase in funding above the 
fiscal year 2002 appropriation. Crafting an acceptable conference 
agreement within the limited allocation you were provided was a 
difficult challenge. Your continued support and recognition of our 
service to the courts are very much appreciated.

                   ROLE OF THE ADMINISTRATIVE OFFICE

    Created by an Act of Congress in 1939, the Administrative Office of 
the United States Courts serves as the central support agency for the 
federal court system, with key responsibility for judicial 
administration, program management, and oversight.
    As such, the AO is the focal point for judiciary communication, 
information, program leadership, and administrative reform. Our 
administrators, accountants, systems engineers, analysts, architects, 
lawyers, statisticians, and other staff provide professional services 
to meet the needs of judges and staff working in the federal courts 
nationwide. We also staff the judiciary's policy-making body, the 
Judicial Conference of the United States, and its 24 committees.

                       SECURITY OF THE JUDICIARY

    During this past year, in the wake of the events of September 11, 
2001, and the anthrax incidents that followed, a principal focus of the 
AO has been to provide additional guidance on security and emergency 
preparedness to the courts. We have consulted with experts, analyzed 
alternatives, and taken numerous steps to ensure the safety and 
security of federal judges, judiciary staff, jurors, attorneys, the 
public, and others associated with the judicial process. These efforts 
would not have been possible without your support in providing the 
judiciary with $129 million in emergency supplemental funding during 
fiscal year 2002. I would like to take a few moments to highlight how 
we have used these monies as well as share with you some of the 
initiatives we have undertaken in the area of security during the last 
year.

Emergency Supplemental Funding
    First and foremost, the supplemental funding enabled the judiciary 
to augment the U.S. Marshals Service's workforce with 106 new court 
security inspectors who will oversee courthouse security and coordinate 
on- and off-site protection of judges in each of the 94 districts and 
12 regional courts of appeals. The funding also covered the costs 
associated with 358 new Court Security Officers (CSOs) to provide a 
higher level of security, including extended evening and weekend 
coverage, enhanced perimeter and internal security patrols, 100 percent 
identification checks, and visual inspection of vehicles. The inability 
to provide expanded hours of security coverage in courthouses had been 
a major weakness in the judiciary's security program. Your assistance 
in addressing this need is very much appreciated.
    In addition, the supplemental funding is being used to pay for such 
things as bomb detection equipment, enhanced x-ray equipment for 
screening, bullet-proof vests for CSOs, security enhancements around 
the perimeter of courthouses, ballistic hardening of screening posts, 
and special security requirements for courts handling high-threat 
trials.
    We also used emergency supplemental funding to enhance the physical 
security of the Thurgood Marshall Federal Judiciary Building. Monies 
have been used to upgrade the fire control system which includes 
accessible features for secondary locations. Vehicles no longer are 
allowed to park or idle outside the building. We have purchased new 
state-of-the-art x-ray machines and video surveillance cameras, 
installed protective film on perimeter windows, purchased evacuation 
chairs, radiological monitoring devices, and are pursuing other 
security upgrades based on expert security advice, and assessment 
reports.

Safe Mail Handling
    As I mentioned in my testimony before the Subcommittee last year, 
immediately following the incidents of anthrax-contaminated mail, the 
AO began sending nearly all correspondence to the courts via e-mail or 
facsimile transmission. In addition, consultant architectural services 
were obtained to study several existing courthouse mail facilities and 
handling practices to help develop procedures, standards, and 
infrastructure for safe mail handling in federal courthouses. In July 
2002, the Judicial Conference endorsed recommendations regarding safe 
mail handling procedures, and the construction of centralized mail 
rooms in courthouses using $12 million in fiscal year 2002 emergency 
supplemental funding. AO staff then developed guidelines and 
specifications for prototype mail rooms based on the size of the 
courthouse and the potential volume of mail.

Emergency Preparedness
    Also during fiscal year 2002, the AO established the Judiciary 
Emergency Preparedness Office to give direct guidance and other 
assistance to courts for emergency preparedness, crisis response, and 
continuity of operations plans. Such plans focus on the safety of 
judiciary employees and the public, and ensure that essential functions 
and activities are not interrupted for long and that critical functions 
resume as quickly as possible. During the past year, representatives 
from this office have briefed nearly 2,000 members of the judiciary on 
the emergency preparedness program.

Continuity of Operations Planning (COOP)
    And, with the help of an independent consultant, prototype 
Continuity of Operations Plan (COOP) templates and instructional 
materials have been developed for each court type based on the actual 
COOP plans developed with AO assistance by the courts in New York after 
the terrorist events of September 11, 2001. Representatives from the 
courts contributed to the development of the COOP template by 
identifying specific issues courts need to consider in creating their 
local plans. The final template was distributed to the courts in 
November 2002 and will help them identify vulnerabilities in the event 
of a crisis, do the advanced planning necessary to maintain normal 
operations, and conduct the extensive coordination required among local 
organizations. Courts can access templates and checklists about 
emergency preparedness on the judiciary's Emergency Preparedness 
Office's website. These templates will be refined and updated based on 
experience and feedback from the courts.

Court Operations Support Center
    We are particularly grateful for your endorsement in the conference 
report of the recommendations of the Court Operations Support Center 
and Continuity of Operations Housing Plan report that we provided to 
the Subcommittee in November 2002. The establishment of a small leased 
facility at least 20 miles outside of Washington, D.C. will help ensure 
the continuity of critical court support operations in the event that 
administrative and automation support functions are shut down as a 
result of closure of the Thurgood Marshall Federal Judiciary Building. 
While the primary purpose of the facility will be continuity of 
operations, consistent with the conference report direction, we intend 
to provide telework opportunities for judiciary employees at this 
facility as well. We will work quickly to establish this facility, and 
I will keep you apprized of its progress.

Courts Supported in High-Profile Trials
    The ongoing terrorist threat to our nation and increased focus of 
federal law enforcement resources on homeland security also mean that 
the federal courts are likely to be the forum for many more highly 
publicized and security-sensitive criminal proceedings. We've already 
had the Richard Reid case in Massachusetts and the John Walker Lindh 
case in the Eastern District of Virginia. We know of several more that 
are upcoming, including the Zacarias Moussaoui case, also in the 
Eastern District of Virginia. The courts hosting these trials face 
unprecedented and extraordinary challenges involving a wide range of 
issues from heightened security concerns, greater information 
technology support needs, and furnishing closed-circuit broadcasts of 
the proceedings to victims' families.
    The courts rely on the AO to provide support and advice to them on 
all of these issues. AO staff met with court staff from the Court of 
Appeals for the Fourth Circuit and the Eastern District of Virginia to 
discuss the possibilities of using videoconferencing for emergency 
appeals resulting from terrorist-related cases in the circuit. The AO 
also arranged for classified briefings from the National Security 
Agency (NSA) for judges and others to discuss increased risks from 
terrorists trials. In Massachusetts, staff, working with NSA 
representatives, conducted an information security analysis at the 
district and appellate courts, followed by briefings for court staff 
and judges.
    I look forward to working with you and the Members of this 
Subcommittee as we develop more specific plans to ensure that the 
federal courts are safe and readily accessible to the public. Even in 
the face of the grim realities of a terrorist attack, chemical or 
biological contamination, or natural disaster, we are doing our best to 
ensure that the business of the judiciary can and will continue without 
disruption.

              RELATIONSHIP WITH THE U.S. MARSHALS SERVICE

    In my role as Secretary to the Judicial Conference, one of my 
primary responsibilities is to carry out and implement policy decisions 
of the Judicial Conference. Not surprising, providing for the safety 
and security of federal judges, judiciary staff, jurors, attorneys and 
other participants in the judicial process has always been a top 
priority for the judiciary.
    On May 5, 1981, Chief Justice Warren Burger met with Attorney 
General William French Smith to discuss the need for improved court 
security. Following this meeting, in July 1981, Attorney General Smith 
formed a task force to examine court security requirements and make 
recommendations for improvements. The task force report was issued in 
March 1982.
    To quote from the Joint Statement of the Chief Justice and the 
Attorney General before the Judicial Conference of the United States on 
March 11, 1982:
    The provisions of adequate security services to all the 
participants in the federal judicial system, most especially the 
Judiciary itself, is a critical element in the relationship between the 
Department of Justice and the Federal Courts. If we cannot ensure the 
safety of all participants in the judicial process, we cannot maintain 
the integrity of the system, we cannot--in sum--``establish justice,'' 
as mandated in the preamble to the Constitution of the United States.
    The statement goes on to point out that the needs of the judiciary 
had risen dramatically due to the increase in the number of judges, the 
increase in the number of cases, combined with the increasingly complex 
and sensitive nature of the cases and people involved. Mr. Chairman, it 
is disturbing to note that twenty-one years later these statements are 
even more relevant.
    Today, the federal courts are at risk from domestic and 
international terrorists, organized domestic and international criminal 
organizations, and litigants distressed at the outcome of their 
individual cases. And, because of the role the judiciary plays in the 
prosecution of international and domestic terrorists, as well as the 
high profile of judges and court facilities in most communities, 
security threats to the federal judicial system will no doubt continue 
to increase.

USMS Staffing Shortfalls
    The judiciary is a strong advocate for the resource needs of the 
U.S. Marshals Service (USMS). But the judiciary has no binding 
authority over the general level of security services provided it by 
the USMS. By statute, the judiciary depends on the Executive Branch's 
USMS as its security provider. This relationship makes it difficult for 
us to ensure the judiciary receives the security services it requires.
    During the past several years, the U.S. Marshals Service has 
experienced severe personnel resource deficiencies, particularly at 
courts along the Southwest border and in cities with burgeoning 
criminal caseloads. The Marshals Service could not redeploy sufficient 
resources to these areas without severely short-changing others. The AO 
recently learned that the USMS' budgeting model identified personnel 
shortages of approximately 1,200 positions. The USMS is operating at 70 
percent of its required staffing. It is critical to the welfare of the 
judiciary that the USMS be adequately staffed to perform all of its 
various missions so that judicial security does not take a back seat to 
other USMS priorities. We are, so to speak, at the mercy of the USMS, 
the Department of Justice, and the Office of Management and Budget in 
terms of their ability to provide the number of deputy marshals 
necessary to ensure the judiciary has a top notch security program.
    For more than a year, Judge Jane Roth, Chair of the Judicial 
Conference Committee on Security and Facilities, and I have been 
working with the Department of Justice and Director Reyna in an attempt 
to evaluate the USMS staffing requirements and develop a multi-year 
strategy to raise the number of funded marshals. To be frank, achieving 
a collaborative effort has not been easy, but the Department has 
recently decided to seek input from the judiciary in the development of 
a revised staffing formula.
    During consideration of the third fiscal year 2002 Emergency 
Supplemental, Senator Graham was successful in amending the bill on the 
Senate floor to include funding for the hiring of 200 additional deputy 
U.S. marshals for the protection of the judiciary. With your help in 
conference, $37.9 million was provided to support up to 250 new 
positions for the USMS. Unfortunately, certain funds in the Act were 
included on a contingent basis--contingent on the President submitting 
an official budget request designating those funds as an emergency 
requirement. In a letter dated August 6, 2002, I wrote to the President 
on behalf of the Judicial Conference to urge expeditious submission of 
an official budget request so these critically needed resources could 
be released. The President declined to take that action.
    For fiscal year 2003, through your leadership in conference on the 
Omnibus Appropriations Bill, $7.9 million was included for 58 
additional deputy U.S. marshal positions for the protection of the 
judiciary for high threat trials, and for districts demonstrating the 
highest priority needs. For fiscal year 2004, while the President's 
budget for the U.S. Marshals Service seeks $26.6 million for 231 
additional deputy U.S. marshal positions, it also includes a general 
base reduction of $25.1 million to this same account. I am concerned 
that judicial security may suffer as a result.

Comprehensive Study on Judicial Security
    As I have tried to lay out before you, the AO and the Judicial 
Conference have been concerned with the state of judicial security and 
the unique position the judiciary finds itself in with regard to its 
dependence on the Department of Justice for some time. Before September 
11, 2001, the AO and the Judicial Conference Committee on Security and 
Facilities had undertaken a comprehensive look at various aspects of 
judicial security. Working with a private security contractor, the 
findings of the review were issued in November 2001. Enhancements 
funded by the three emergency supplementals and the initiatives that 
have been undertaken by the AO to strengthen the security of the courts 
were key recommendations contained in this comprehensive review.
    In fact, the 106 supervisory-level deputy U.S. marshal positions 
included in the emergency supplemental to coordinate judicial security 
in the 94 districts and 12 regional circuits were a direct outgrowth of 
a recommendation of the independent security experts. Congress has now 
transferred the funding to the USMS, Salaries and Expenses account, but 
I am grateful that you have included statutory language to ensure the 
funding and positions will continue to be assigned to court security. 
District marshals and judges have seen improvements in security with 
the addition of the new security positions.
    In the conference report accompanying the fiscal year 2003 Omnibus 
Appropriation Bill, you have directed the U.S. Marshals Service to 
conduct a study with an independent consultant on the management of the 
Court Security program and the unique relationship between the Federal 
Judiciary, the U.S. Marshals Service, and the Federal Protective 
Service in administering the Court Security program and providing 
facilities security for the judiciary. Mr. Chairman, consistent with 
our responsibility to monitor the provision of court security and our 
personal concern for the safety of the public, litigants, attorneys, 
jurors, judges, court staff and others in the judicial process, I 
respectfully urge you to permit the judiciary to share its views 
regarding the management of court security during the course of this 
study. Certainly the outcome of the study will have profound 
implications for the future delivery of judicial security. Judge Jane 
Roth and I hope that you will meet with us if you believe changes to 
our security arrangements are warranted.

                  ADMINISTRATIVE OFFICE BUDGET REQUEST

    The fiscal year 2004 budget request for the Administrative Office 
of the U.S. Courts is $70,584,000, representing an increase of 
$7,497,000, or 11.9 percent above the fiscal year 2003 available 
appropriation. While the percentage increase we are seeking appears 
significant, it should be noted that more than three-fourths of the 
requested increase for the AO, $5,842,000, is necessary to support 
adjustments to base. These adjustments are mainly comprised of standard 
pay and general inflationary increases, funding to replace a lower 
level of fee carryover with appropriated funds, and $400,000 to restore 
funding for critical cyclical replacement of information technology 
equipment that had to be deferred into fiscal year 2004. We are highly 
dependent on personal computers, data networks, and telecommunications 
to conduct AO business and support the courts. Funds must be available 
to ensure security and replacement of essential equipment.
    The remaining increase of $1,655,000, which I will describe in 
greater detail in a moment, is requested to support new security 
requirements, strengthen programmatic oversight, audits, reviews and 
assessments, allow us to fund an increase in the transit subsidy 
benefit for AO employees, and implement a cafeteria-style flexible 
benefit program.

AO Staff Support for the Courts
    Specifically, $958,000 is requested to provide nine additional FTEs 
for program and security oversight. Continuing to develop new programs 
and systems while supporting a court system whose proportional growth 
far outpaces that of the AO is a daunting task. The staffing level in 
the AO has remained essentially the same over the last ten years, while 
court staffing has grown by 20 percent during the same time period, 
thus adding substantially to the AO workload.
    Each vacancy that occurs is carefully evaluated and used to fulfill 
our highest priority needs. Nowhere has this been more evident than 
with our increased focus on security and emergency preparedness. 
Without additional funding, we have had to shift duties and 
responsibilities to meet the most pressing and immediate requirements 
of the courts, and this has meant shortchanging other needs. For 
example, during fiscal year 2002, the AO devoted $1 million and 8 FTEs 
to homeland security efforts. Roughly 50 AO employees devoted staff-
hours equivalent to 8 FTEs, developing and implementing enhanced 
judicial security programs--fulfilling responsibilities and carrying 
out duties other than those for which their positions were originally 
funded to support.
    I am proud of my staff and their dedication to serving the needs of 
the courts. However, because sufficient resources must be committed to 
core functions such as running key systems, providing basic payroll, 
personnel, and financial management services, and supporting the 
committees of the Judicial Conference, program oversight functions are 
in serious need of additional resources.
    The nine additional FTEs we are requesting will be applied to the 
following functions: adding staff to the facilities and security 
program to ensure greater emphasis on the planning aspects of emergency 
preparedness and crisis response; providing greater focus and support 
to the probation and pretrial services program, which currently has 
only 36 AO staff supporting 8,000 probation and pretrial services 
personnel in 94 districts nationwide, and a budget of $850 million; 
and, increasing program oversight and efficiency reviews to assist the 
courts in areas such as automated case management, financial 
management, and developing strengthened procurement policies and 
procedures.
    Mr. Chairman, I hope you can assist us with this much needed 
request for additional staffing at the AO.

Cafeteria-Style Flexible Benefits Program
    As you may recall, the Judicial Conference is seeking legislation 
that would provide the judiciary with the authority to use appropriated 
funds and/or fees to help defray the cost of providing supplemental 
benefits to judiciary employees. Approval of the legislation will allow 
a full-flexible cafeteria plan to be available to all judiciary 
employees, including the AO, providing a supplemental benefits package 
that is competitive with those already provided throughout the private 
sector and state governments. Benefits that may potentially be offered 
in a cafeteria plan include such items as a dental program, a vision 
program, and life insurance, as well as short-term and long-term 
disability insurance.
    While the House passed its Federal Courts Improvement Bill with 
this needed authorization in it, the Senate failed to act on the 
measure during the 107th Congress. However, in anticipation of the 
enactment of legislation in fiscal year 2003 allowing flexible 
cafeteria-style benefits to be offered to the judiciary, our fiscal 
year 2004 request includes $432,000 to begin implementing such a 
program for AO employees. A similar request implementing the program 
judiciary-wide is included in the Salaries and Expenses account.

Transit Subsidy
    Pursuant to the Transportation Equity Act for the 21st Century 
(Public Law 105-78), the AO implemented a transit subsidy benefit for 
its employees with available funding in fiscal year 2000. The benefit 
is currently $60 per month with a participation rate of approximately 
60 percent. Executive Order No. 13150 provided for an increase in the 
allowable benefit to $100 per month in January 2002. The AO is 
requesting $265,000 to increase the subsidy to the currently authorized 
amount of $100 per month.
    The already limited parking available in and around the Thurgood 
Marshall Federal Judiciary Building has been further reduced by the 
loss of parking spaces at Union Station due to security considerations. 
Compounding the situation is the elimination of nearby parking as a 
result of the construction of Station Place, which has necessitated 
employees of the AO to seek parking in remote locations that are 
unsafe. This, coupled with the continuing increase in traffic 
congestion in the Washington, D.C. area, has increased AO employee 
interest in the transit subsidy program. The requested program increase 
of $265,000 will allow us to increase the benefit for AO employees to 
the authorized level of $100 per month and cover the cost of an 
anticipated increase in the participation rate to 70 percent.

                  RESPONSIBILITIES AND ACCOMPLISHMENTS

    As I mentioned earlier, the Administrative Office has key 
responsibility for judicial administration, program management, and 
oversight. It supports the Judicial Conference and its 24 committees in 
determining judiciary policies, and develops new methods, systems, and 
programs for conducting the business of the federal courts. The AO also 
assists the courts in implementing better management practices, 
developing and supporting innovative technologies that enhance the 
operations of the courts, and collecting and analyzing statistics on 
the business of the federal courts for planning and determining 
resource needs.
    It assists the courts in program management, addressing areas such 
as case management, jury administration, defender services, court 
interpreting services, and court reporting. One of our major areas of 
support is of the probation and pretrial services program for which we 
are seeking additional oversight positions. In fiscal year 2002, 
probation and pretrial services offices supervised a record number of 
offenders and defendants (143,672) living in our communities on 
pretrial release, probation, parole, or supervised release. The AO 
staff provided policy guidance and program support to a system that 
encompasses 94 districts in 500 locations. The staff develop and 
administer national contracts for drug testing and electronic 
monitoring and help support 500 local purchase orders for substance 
abuse and mental health treatment. The AO also provides financial 
management services to the judiciary including budget formulation, 
execution, and accounting; and personnel and payroll support for 32,000 
judiciary employees. It supports the facilities and security needs of 
over 800 facilities housing judiciary operations, and conducts 
training, audits, and reviews to ensure the continued quality and 
integrity of federal court operations.
    In addition, the AO provides necessary support services to other 
entities including the Judicial Panel on Multi-District Litigation and 
the Foreign Intelligence Surveillance Court.
    Throughout 2002, the AO excelled in its day-to-day 
responsibilities. Let me take a moment to highlight just a few of these 
areas.

Financial Stewardship
    Working with the courts to ensure the efficient and effective use 
of resources is a key AO function. It is imperative that we do all in 
our power to ensure that the monies appropriated to the judiciary are 
utilized prudently; assets and resources are protected from loss, 
waste, or abuse; operations are efficient and effective; financial 
reports are timely, accurate, and reliable; and business practices 
comply with applicable laws and regulations. In 2001, a Management 
Oversight and Stewardship Handbook was published and training on 
management oversight was provided to chief district judges and chief 
bankruptcy judges. In 2002, a companion program was launched for court 
executives. The AO has held two of six planned workshops of the new 
training program, Management in the Judiciary: The Rules, Tools and 
Tips of Good Stewardship. To date, 110 court executives have received 
training. The remaining 332 will receive training in fiscal years 2003 
and 2004.

Strengthened Internal Controls
    Good internal controls are systematic safeguards that ensure 
objectives are achieved and assets are protected. With the 
participation of court managers, AO staff is developing a model 
internal controls handbook to assist court leaders in managing their 
courts. The handbook will identify the minimum procedural checks and 
balances that should be in place for finance, travel, procurement and 
contracting, property, human resources, information technology, 
records, and statistical reporting.

Information Technology
    Another key responsibility of the AO is developing, implementing, 
and supporting new automated systems and technologies for the courts. 
One of our largest automation initiatives in recent years is the Case 
Management/Electronic Case Files (CM/ECF) project, which permits courts 
to receive documents over the Internet and maintain electronic case 
filings. We began national roll-out of CM/ECF in 2001. By March 2003, 
about 130 district and bankruptcy courts had begun or completed 
implementing the new systems and national implementation in all courts 
should be completed in 2005. More than 27,000 attorneys have already 
filed documents electronically and more than 6 million cases involving 
more than 15 million documents are in the electronic files systems. In 
fact, several recent mega-bankruptcies were filed electronically, 
enhancing both public access and case management. In 2002, the total 
number of Public Access to Court Electronic Records (PACER) accounts 
topped 200,000. These systems will save considerable court resources 
while also significantly improving public access to federal court 
records.
    Many systems have also been developed through the energy and 
creativity of AO-court partnerships. Probation and pretrial services 
officers who, as I noted earlier, supervise well over 100,000 persons, 
have started using the Probation and Pretrial Services Automated Case 
Tracking System-Electronic Case Management (PACTS-ECM), which in 2002 
went live in 17 districts. It is a comprehensive system designed to 
help probation and pretrial services officers by making offender case 
information more easily accessible. The system electronically 
generates, stores, and retrieves investigation and supervision case 
information, and provides digital images of offenders. It also has 
remote capabilities to allow officer access while in the field. The 
PACTS-ECM system is an invaluable resource as the number of offenders 
released from Federal prison who are serving terms of supervised 
release continues to escalate.

                               CONCLUSION

    Mr. Chairman, Members of the Subcommittee, I do not believe that 
any one agency in the executive branch or the legislative branch offers 
the broad range of services and functions that the AO provides to the 
federal courts. However, in the interest of time and the particular 
focus of this hearing, I have tried to limit my testimony to our fiscal 
year 2004 budget request and the role of the AO in enhancing judicial 
security and ensuring the safe and uninterrupted delivery of justice. 
We take our responsibilities and service to the courts seriously and 
are always looking for ways to improve. I ask your support in 
accomplishing this by granting the increase the AO is seeking for 
fiscal year 2004. Thank you.
                                 ______
                                 

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

                              INTRODUCTION

    Chairman Gregg, Senator Hollings, Members of the Subcommittee, 
thank you for giving me the opportunity to present the judiciary's 
fiscal year 2004 budget request.
    Before addressing our fiscal year 2004 request, on behalf of the 
entire judiciary, I want to express our appreciation for the funding 
levels provided to the judiciary for fiscal year 2003. We understand 
the difficult decisions and concerns that you faced, and will continue 
to face, balancing the needs of the newly-established Department of 
Homeland Security, the ongoing war against terrorism, the war in Iraq, 
and the funding needs of numerous domestic entities, while trying to 
hold down spending. Although we did not get all the funding we 
requested, we are very grateful that you and your dedicated staff 
worked with us to fund the judiciary's most pressing needs.

                            BUDGET OVERVIEW

    The budget request the judiciary has submitted for fiscal year 2004 
is that which is necessary to maintain our current staff and operations 
and to allow the courts to handle growing workload and other critical 
needs. The appropriations request is 10.8 percent over the available 
appropriations for fiscal year 2003. We realize that this request is 
higher than the 3.8 percent increase requested for discretionary 
spending, with the exception of homeland security, in the President's 
Budget. Although we are mindful of the need for fiscal restraint, now 
more than ever a strong judiciary is critical to the protection of our 
citizens. Threats to homeland security potentially involve civil or 
criminal actions that will require court orders and adjudication in 
this nation's courts.
    For all judiciary accounts, we are requesting a $530 million 
increase in appropriations over the enacted appropriations for fiscal 
year 2003. Nearly two-thirds of this requested increase ($338 million) 
is required to maintain current operations with pay and benefit 
adjustments, inflationary adjustments, increases in GSA space rental 
costs, an increase in filled Article III judgeships, and continued 
security measures. The remainder ($192 million) is primarily to provide 
for the programmatic and workload-related needs such as high-profile 
terrorist trials, the unprecedented numbers of bankruptcy filings, and 
significant increases in the probation and pretrial services workload 
as criminal filings continue to rise and as the number of offenders 
released from prisons into our communities with a need for drug and 
mental health treatment steadily increases. A detailed explanation of 
our fiscal year 2004 request is included as an appendix.

                         PROTECTION OF FREEDOM

    In these uncertain times, with our nation's safety and freedom 
threatened as it has never been before, our three branches of 
government must work together to protect the safety of our citizens and 
our heritage of freedom. A strong, independent federal judiciary, 
providing equal justice to all, is at the heart of what this nation 
stands for. As Chief Justice Rehnquist noted in his 2002 year-end 
report on the federal judiciary, there is a fundamental interdependence 
of our three separate branches of government when it comes to funding 
our nation's priorities, and we look to the Legislative and Executive 
Branches for support, funding and staffing.

                           WORKLOAD INCREASES

    The workload asked of the judiciary is truly uncontrollable, 
whether it is processing criminal, civil, or bankruptcy cases; or 
providing jury services, supervision and treatment of defendants and 
released felons, or representation to those financially unable to 
obtain private counsel. The judiciary has no major program which can be 
cut or deferred, only the people who provide those services, the 
systems that support them, and the facilities that house them. 
Therefore, when funding is reduced, the only place the reduction can be 
taken is in the staff and the supporting systems that perform those 
essential services.
    While we are not at a point where I would use the term crisis, I am 
very concerned about certain workload indicators that I believe are 
heading in the wrong direction, likely as a result of resource 
shortfalls.
    Pending criminal and bankruptcy cases have grown by 38 percent and 
17 percent respectively between 1998 and 2002. This means that the 
number of cases terminated is less than the number of new cases filed. 
The number of judges and court staff has not kept pace with the growth 
in caseload, and a disturbing argument could be made that this lack of 
judicial resources has resulted in a growth in backlogs.
    I am also concerned about our law enforcement function, probation 
and pretrial services. The caseload in these offices has grown by 
approximately 16 percent between 1998 and 2002. That in itself is 
significant, but in addition, the nature of their work has also 
changed. Officers are supervising more hardened offenders as evidenced 
by their more extensive criminal histories and the 67 percent increase 
in the average prison sentence. Furthermore, over this same time period 
the number of offenders with mental health conditions has grown by 81 
percent, and the number with substance abuse problems has grown by 48 
percent. While the number of officers has kept pace with the growth in 
the overall number of cases during this period, there has been no 
increase associated with the increased risk presented by these cases. 
Within the same relative level of staffing, our probation and pretrial 
services officers must devote a higher level of supervision to the more 
hardened criminals and those with drug abuse and mental health issues, 
which means they must devote less time to their other cases. On the one 
hand, I applaud them for prioritizing limited resources to the more 
complex cases, but on the other hand, I am concerned that the level of 
supervision of their other cases could pose a higher risk to the 
community in the long run.
    The courts experienced record workload increases in fiscal year 
2002. Bankruptcy filings grew 8 percent, civil filings in the U.S. 
district courts climbed 10 percent, criminal cases rose 7 percent, and 
the number of persons under probation supervision and supervised 
release as well as the defendants in the pretrial services systems each 
increased by 4 percent.
    As we look to what the future will bring, we note that in 
Conference report on the fiscal year 2003 appropriations, additional 
funds were provided to the U.S. Attorneys ``to aggressively prosecute 
cases of corporate fraud'' and the funding provided to the FBI included 
increases to combat violent crime and white collar crime. And, the 
Bureau of Prisons inmate population has reached an all-time high of 
165,000. Approximately 80 percent of these prisoners will be released 
to the community and will be under the supervision of probation 
officers at the completion of their sentences.
    These are just a few of the indicators that point to continued 
increases in workload for the federal judiciary. In fiscal year 2003, 
because of limited funding, we will be unable to provide for the full 
complement of staffing required to meet the workload requirements. I 
urge the Subcommittee, as you determine your funding priorities in this 
constrained environment, to consider providing the federal courts with 
the resources required to perform the very important functions assigned 
to them by the Constitution and the Congress. Without the funding 
increases needed to address growing workload, I believe the judicial 
system, and those who depend on it to resolve disputes, will begin to 
suffer.

                              JUDICIAL PAY

    The need to increase judicial pay continues to be one of the most 
pressing issues facing the judiciary. Federal judicial salaries have 
lost 23.5 percent of their purchasing power since 1969, while during 
this same time period private sector wages have increased by 17.5 
percent. More than 70 Article III judges, all of whom have life-time 
appointments, left the bench between 1990 and February 28, 2003--either 
under the retirement statute if eligible or simply resigning--as did a 
number of bankruptcy and magistrate judges. Another judge resigned at 
the end of February, and two more judges have announced their intention 
to retire from federal bench later this year. During the 1960s only a 
handful of Article III judges retired or resigned. Many judges no 
longer take senior status and we are losing their valuable 
contributions as they seek private sector employment and compensation. 
A study of 1999 data indicated that senior judges participated in 15 
percent of appeals and presided over nearly 20 percent of trials.
    Recently, the report of the National Commission on the Public 
Service, also called the Volcker Commission, supported the need to 
address this issue. In its final report, the Commission said, ``The lag 
in judicial salaries has gone on too long, and the potential for 
diminished quality in American jurisprudence is now too large. Too many 
of America's best lawyers have declined judicial appointments.'' The 
salary differential when compared with the legal education profession 
has become quite dramatic. In 1969, the salaries of district court 
judges had just been raised to $40,000 while the salary of the dean of 
Harvard Law School was $33,000 and that of an average senior professor 
at the school was $28,000. That relationship has now been erased. The 
salaries of professors and deans at the twenty-five law schools ranked 
highest in the annual U.S. News and World Report survey found that the 
average salary for deans of those schools was $301,639. The average 
base salary for full professors at those law schools was $209,571, with 
summer research and teaching supplements typically ranging between 
$33,000 and $80,000. This compares with a district court judge's salary 
of $154,700. The Volcker Commission's report stated, ``Judicial 
salaries are the most egregious example of the failure of federal 
compensation policies. . . . Unless this is revised soon, the American 
people will pay a high price for the low salaries we impose on the men 
and women in whom we invest responsibility for the dispensation of 
justice''. The Commission expressed similar concerns about the 
inadequacy of congressional and executive salaries and recommended, 
``Congress should grant an immediate and significant increase in 
judicial, executive, and legislative salaries to ensure a reasonable 
relationship to other professional opportunities.''
    I know that to address this issue requires a broad Congressional 
consensus. Nevertheless, this Committee can take a small, but vital 
step in the right direction by including the funding for the annual ECI 
adjustment for judges in this bill.

                             NEW JUDGESHIPS

    Despite the substantial increase in workload, there has not been a 
major judgeship bill creating additional Article III judges since 1990 
or a bankruptcy judgeship bill since 1992. We are grateful for nine 
district judgeships added in the fiscal year 2000 appropriation, the 
ten additional district judgeships added in the fiscal year 2001 
appropriation, and the 15 additional permanent and temporary district 
judgeships Congress authorized in November 2002 as part of the 
Department of Justice authorization act. However, the need for 
additional appellate, district and bankruptcy judges is critical. For 
example, in 1992, when the last bankruptcy judgeships were created, 
each bankruptcy judge handled an average of 2,998 cases; each now 
handles an average of 4,777 cases. Likewise, appellate and district 
judges are handling more cases. We hope that you will support and 
provide funding for the Judicial Conference requests to create 57 
additional Article III judgeships and 36 bankruptcy judgeships.

                          COURT SUPPORT STAFF

    The court support staff are the backbone of court operations. From 
intake to disposition, it is the clerk's staff, along with the pretrial 
services and probation officers who keep the wheels of justice running 
smoothly. In order to ensure that resources are distributed as required 
by workload, the judiciary has developed scientifically-derived 
staffing formulas to construct the budget request and to allocate funds 
to the clerks' offices and to the probation and pretrial services 
offices. As filings and other workload factors fluctuate from year to 
year, the application of the formulas to the individual court units 
provides a corresponding increase or decrease in funding. This ensures 
the equitable allocation of resources to meet workload requirements.
    For the duration of the Continuing Resolutions this year, the 
clerks' offices and probation and pretrial services offices were held 
to a spending level significantly below the fiscal year 2002 
allotments, which put a major strain on the staffs. Most offices were 
unable to fill critical vacancies, and were anticipating the 
possibility of RIFs and furloughs. We are grateful for the fiscal year 
2003 appropriation, which will allow the courts the funding necessary 
to maintain a current services level of operations for the remainder of 
the year. However, it will not allow us to fully fund the formulas that 
provide for the staff necessary to keep pace with steadily growing 
workload. The gap between required staff levels and funded staff levels 
continues to grow.

                    PROBATION AND PRETRIAL SERVICES

    Federal probation and pretrial services officers protect the public 
through the investigation and supervision of defendants and released 
offenders within the federal criminal justice system. Pretrial services 
officers investigate the backgrounds of defendants charged with a 
federal crime, recommend in a report to the court whether to release or 
detain a defendant, and supervise those who are released to the 
community while they await their day in court. The probation officer 
enters the scene upon a finding of guilt, investigating the offender to 
provide the court with a presentence report, and supervising all 
offenders conditionally released to the community. As an example of the 
dedication of these officers and the difference they make in our 
communities I would like to tell you a success story that took place in 
the Eastern District of Virginia.
    ``JB'' began his three-year term of supervised release after 
serving time at the Federal Correctional Institution in Butner, North 
Carolina on a conviction for making bomb threats. He had a long-
standing history of mental health problems characterized by anger, 
suspicion, paranoia, and aggressiveness. The FBI, the local police 
department, and JB's former employer--the target of JB's bomb threats--
were extremely anxious about JB's release because of his unstable 
mental condition.
    Supervision in this case became difficult even before release. JB's 
request to relocate to his hometown in the Middle District of North 
Carolina was turned down because he had sent numerous threatening 
letters to his parents. With no acceptable release plan, he was to be 
released to Richmond--where he had no ties and where his former 
workplace was located.
    A senior Probation Officer (PO) in Virginia Eastern initiated 
contact with JB before he was released. She established and maintained 
contacts with local law enforcement, corporate security for the victim, 
and the probation office in the Middle District of North Carolina. She 
found JB temporary housing and placed him in treatment. She also began 
a close collaboration with the Richmond Behavioral and Health 
Authority, where JB was to participate in a program for homeless people 
in need of mental health treatment. This community resource provided 
the medication and treatment necessary to stabilize JB's mental 
condition and helped him with housing and job placement.
    The PO met with JB within 30 minutes of his release from custody. 
She conducted a thorough initial interview and gave him clear, detailed 
instructions as to what he was to do next. After that first contact, 
the PO closely monitored JB, speaking with him by telephone daily, when 
necessary. With each change of residence or job, the PO made a prompt 
on-site inspection and added new landlords and employers to her list of 
collateral contacts.
    Because the PO monitored JB's case very closely, she was able to 
identify potential danger signals and intervene quickly before a crisis 
arose, and to clarify what she expected of JB in each change of 
circumstance. She reinforced her expectations of him by using a blend 
of explanations, warnings, and incentives. For example, when JB took up 
photography as a hobby, the PO first set clear limits for this 
potentially intrusive activity. She then both monitored JB's work and 
complimented his growing skill. The PO also helped JB deal with the 
requirements of managing an independent life--serving as case manager 
and service broker with mental health counselors, employers, landlords, 
Social Security Administration officials, and family members. She 
encouraged JB in his successes and consoled him in his disappointments, 
while--within the bounds of confidentiality--also keeping her law 
enforcement and corporate security contacts informed of his activities 
and progress.
    As a result of these efforts, JB got a job at a local YMCA, where 
he became a productive, well-liked employee and served as their 
unofficial photographer. He became stabilized on medication and began 
receiving monthly social security disability benefits. JB occasionally 
visited his hometown, under the supervision of the North Carolina 
Middle probation office, and his relationship with his family improved 
so much that the district accepted him for courtesy supervision.
    When JB ended his term of supervised release, he was stable, back 
in his hometown with his family, equipped with a new skill, and able to 
support himself. The PO and the collateral network she developed 
provided the structure, control, treatment, and support necessary for 
JB to succeed and for the public to remain safe. Her efforts laid the 
foundation for JB's continued success in the future.
    Helping past offenders avoid becoming repeat offenders, while 
protecting the community, is the primary goal of supervision. With 
insufficient staffing resources and limited funds for programs that 
help offenders become productive members of our communities, we 
increase the risk to those communities.
    Persons under supervision have increased by 16 percent since 1998. 
More growth is expected for fiscal years 2003 and 2004. Further, the 
level of danger posed by many of those under supervision and their 
attendant drug and mental health problems has soared.

                           DEFENDER SERVICES

    Defender Services is also affected by the increase in criminal 
cases and the number of terrorist trials. In addition to the projected 
growth in representations in fiscal year 2004, the current projections 
for fiscal year 2003 exceed the funding provided. This means that some 
panel attorney payments likely will have to be deferred into fiscal 
year 2004, further raising the requirements for that year.
    We are grateful for the panel attorney rate increase to $90 per 
hour provided in fiscal year 2002. This was the first significant raise 
in private panel attorney hourly rates in most judicial districts since 
1986, and it was badly needed. The judiciary is collecting information 
in response to the Committee's questions about the extent to which the 
new rate has solved problems in obtaining adequate counsel for Criminal 
Justice Act (CJA) representation. However, even in a district where the 
$90 rate may now allow a court to obtain qualified counsel to accept 
CJA appointments, lawyers are accepting the cases at a significant 
financial sacrifice which ultimately will not bode well for the 
criminal justice system.
    To ensure that the panel rates do not further decline, in real 
terms, below the rates envisioned by the CJA, the Judicial Conference 
again has requested that the Congress raise the rate to $113 per hour. 
Even at $113 per hour, CJA counsel, who provide representation 
guaranteed by our Constitution, would be underpaid compared to rates 
paid by many federal agencies to private lawyers. In a survey of hourly 
rates paid to private counsel by government agencies conducted in 2001, 
the General Accounting Office found that the average hourly fees paid 
to private counsel ranged from $125 to $357, depending on the agency 
and the type of legal services. In addition, the average hourly billing 
rate charged by privately retained counsel, according to The 2002 Small 
Law Firm Economic Survey (Altman Weil, Inc.), is approximately $190 for 
sole practitioners and partners in small law firms. The judiciary and 
panel attorneys understand that CJA hourly rates were not intended to 
match those that lawyers charge their private clients. It is the 
judiciary's view that panel attorneys' compensation should cover 
reasonable overhead and a fair hourly fee, which warrants raising the 
CJA rate to $113.
    In deciding to continue to seek a nationwide $113 hourly rate for 
fiscal year 2004, the judiciary considered the possibility of proposing 
geographic-based rates. In addition to the reasons supporting a $113 
rate, the judiciary took note of several factors regarding geographic-
based rates, including that the cost of living in an area is not the 
only factor in a court's ability to recruit and retain qualified 
attorneys to accept CJA appointments. For example, in a low-cost rural 
area where there is a minimal retained federal criminal practice and a 
limited pool of lawyers with federal criminal defense experience, a 
higher rate may be needed in order to provide sufficient incentive for 
attorneys to invest the time required to develop the necessary 
expertise and to then be willing to take on a substantial portion of 
the CJA caseload. The judiciary will continue to examine options, such 
as geographic-based rates, in developing its future funding requests.
    We are also requesting, for the first time, an increase in the 
maximum hourly rate to $157 for panel attorney compensation in capital 
cases. The $157 hourly rate represents the $125 rate adjusted for the 
cumulative cost-of-living adjustments provided for in the Antiterrorism 
and Effective Death Penalty Act of 1996. Counsel accepting appointments 
to capital cases typically are sole practitioners or are from small, 
independent firms, which do not have other attorneys willing or able to 
subsidize the cost of the CJA work. The amount of time that the 
attorneys need to devote to these capital cases is so extensive that it 
is generally impossible for the attorneys to handle other cases 
concurrently. The current maximum capital hourly rate of $125 is 
significantly below the market rates charged by lawyers for providing 
representation in comparable high-stakes, complex, and time-consuming 
cases. An increase would be the first in the maximum rate for capital 
cases since it was set statutorily in 1996. The cost of this increase 
is only $2.9 million. We urge you to consider it.

                             COURT SECURITY

    We appreciate your continued support of our Court Security program 
and understand your concerns regarding budget administration and 
oversight of the program. This is a unique account--appropriated to the 
judiciary but primarily managed by the Department of Justice. The 
safety of the public, litigants, attorneys, jurors, judges, court staff 
and others in the judicial process is of primary concern to us, and we 
are fully committed to working with the USMS to make sure that the 
program is successful and that the resources you provide are managed in 
the most efficient and effective manner. You have directed the USMS to 
conduct a study on the management of this program, and we respectfully 
ask that the judiciary be involved actively in this study since the 
mission of the program is so important to us.
    In these troubled times when courthouses are such visible targets 
for terrorists, our Court Security program is more critical than ever. 
Court Security Officers (CSO) and security systems are key aspects in 
providing physical security to the courts. Statistical data provided by 
the USMS indicates that our security process detected 641,489 weapons 
such as guns, knives, and other items prohibited in courthouses in 
fiscal year 2002. The USMS also reported the detention or arrest of 16 
persons related to security breaches in courthouses during the year. I 
will share with you a few stories illustrating the vigilance and 
professionalism of our CSOs.
    In October of 2002, in the district of Colorado, a CSO intercepted 
an individual attempting to gain entrance into the courthouse with a 
.380 caliber automatic handgun concealed in a leather carrying case. 
The individual was also in possession of a loaded magazine. The 
individual was taken into custody.
    In December of 2001 in the Federal Courthouse and Post Office in El 
Dorado, Arkansas, two CSOs noticed a man in the Post Office lobby with 
a gun and badge. Although it is a reasonably large city, one of the 
CSOs recognized this man as an individual who some years before had 
been in court for a civil charge and was considered to have mental 
health problems. The two CSOs approached him and had to fight him to 
the floor. The individual had a fake badge and a real gun. He was 
apprehended, charged and found guilty of several charges including 
carrying a weapon into a federal building.
    In February of 2002, an individual used a hammer to shatter the 
glass in the front entrance door of the U.S. Federal Building at 
Beckley, West Virginia. Two CSOs quickly subdued this individual and 
restrained him until he was taken into custody by the U.S. Marshals 
Service.
    During a court session in the Southern District of Ohio a prisoner 
attempted escape. The prisoner was able to get out of the courtroom and 
almost out the front door, but two CSOs tackled and apprehended him at 
the front entrance.
    We appreciate your increased support and funding for this program. 
While we recognize the practical reasons for transferring the 106 
supervisory deputy marshal positions, approved by Congress in the 
fiscal year 2002 supplemental appropriation, to the USMS in fiscal year 
2003, these positions are a linchpin to effective security of our 
courthouses, and we look for your support to ensure that they will 
continue to be dedicated to courthouse security, and to our 
participation in the study on the management of the Court Security 
program.

               CAFETERIA-STYLE EMPLOYEES BENEFITS PROGRAM

    For the past several years, the judiciary has been a leader in 
offering enhanced benefits to employees. Long-term care was introduced 
in 1999, followed by the existing flexible benefits plan, introduced in 
fiscal year 2000, which offers pre-tax benefits such as flexible 
spending accounts for health care, dependent care, payment of health 
insurance premiums, and commuter reimbursement. The judiciary was able 
to implement these benefits within the existing statutory framework and 
without requiring additional funds. We would like to do more for our 
employees to stay competitive in an era when skilled workers change 
jobs frequently. This is especially important to the judiciary as the 
work force of tempered professionals reaches retirement age and we are 
looking to maintain a qualified, stable work force. We cannot continue 
to be competitive in the employment market with substandard benefits, 
and so we are seeking legislation and funding to establish a cafeteria-
style benefits program that would be funded in part by a modest per-
employee contribution by the judiciary. The combined employee and 
employer contributions could eventually be used to purchase benefits 
from a menu of choices such as dental insurance, vision insurance, 
leave conversion, expanded commuter subsidies, short-term and long-term 
disability, and prescription drug insurance and mental health insurance 
to plug gaps in the Federal Employees Health Benefits (FEHB) programs. 
Benefit programs like these are common in state governments, the 
private sector, and other federal agencies such as the Federal Reserve, 
Federal Deposit Insurance Corporation, Comptroller of the Currency and 
the Postal Service--entities with which we compete for professional 
staff.
    Although the House passed the Federal Courts Improvement Bill with 
the needed authorization allowing us to use appropriated funds and/or 
fees to help defray the cost of providing these supplemental benefits, 
the Senate failed to act on the measure during the 107th Congress. 
However, in anticipation of the enactment of legislation in fiscal year 
2003 allowing flexible cafeteria-style benefits to be offered in the 
judiciary, we are including a request for $15.9 million, hoping to 
begin implementing the program in fiscal year 2004.

               CONTRIBUTIONS OF THE ADMINISTRATIVE OFFICE

    The Administrative Office of the United States Courts serves as the 
central support agency for the federal courts, with key responsibility 
for judicial administration, policy implementation, program management, 
and oversight. The Administrative Office (AO) not only performs 
important administrative functions such as personnel, payroll, 
procurement, space management and planning, and accounting, but also 
provides a broad range of legal, financial, management, program, and 
information technology services to the courts. The AO's staff has been 
essentially frozen for ten years, while its work has expanded to 
support the courts.
    In the wake of the tragic events of September 11 and the anthrax 
mail situation, the AO has been working to provide additional guidance 
on security and emergency preparedness to the courts. The Director 
established a permanent Judiciary Emergency Preparedness Office to 
focus on crisis response, occupant emergency planning, and continuity 
of operations planning. Following the anthrax mail contamination 
crisis, the AO provided advice and contract support to test for anthrax 
and address mail handling concerns at courts across the nation. To 
avoid future contaminated mailings, the AO began using e-mail 
broadcasts, facsimile transmissions, and more extensive posting to our 
intranet site, the J-Net, to deliver information to the courts.
    With the help of an independent consultant, prototype Continuity of 
Operation Plan (COOP) templates and instructional materials have been 
developed for each court type based on the actual COOP plans for the 
U.S. Court of Appeals for the Second Circuit and the District and 
Bankruptcy Courts for the Southern District of New York. Templates and 
checklists about emergency preparedness have been made available on the 
Emergency Preparedness Office's J-Net website.
    The Director created a project team to assess the feasibility of 
establishing a Court Operation Support Center (COSC) outside downtown 
Washington, DC to address the vulnerability of key administrative and 
technical support to the courts. The primary objective of an off-site 
COSC is to ensure that support to the courts would continue 
uninterrupted in the event the Thurgood Marshall Federal Judiciary 
Building is rendered inaccessible. We intend to provide telework 
opportunities for judiciary employees at this facility as well. We are 
grateful for your endorsement of the COSC in the conference report on 
the fiscal year 2003 appropriations.
    As courts are facing more highly publicized and security-sensitive 
criminal proceedings, the AO has been providing support and advice to 
the courts on a wide range of issues from heightened security concerns 
to information technology, and furnishing closed-circuit broadcasts of 
the proceedings to victims' families.
    Working with the courts to ensure the efficient and effective use 
of resources is a key AO function. In fiscal year 2001, a Management 
Oversight and Stewardship Handbook was published and training on 
management oversight was provided to chief district judges and chief 
bankruptcy judges. In 2002, a companion program was launched for court 
executives. The AO has held two of the six planned workshops of the new 
training program, Management in the Judiciary: The Rules, Tools and 
Tips of Good Stewardship.
    The fiscal year 2004 budget request for the AO is $70,584,000, 
representing an increase of $7,497,000, or 11.9 percent above the 
fiscal year 2003 available appropriation. More than three-fourths of 
the requested increase is necessary to support adjustments to base, 
mainly standard pay and general inflationary increases, as well as 
funding to replace a lower level of fee carryover with appropriated 
funds. Of the remaining $1,655,000 increase, $958,000 is requested to 
provide nine additional FTE for program and security oversight. The 
staffing level in the AO has remained essentially the same over the 
last ten years, while court staffing has grown by 15 percent during the 
same time period.
    I urge the Committee to fund fully the AO's budget request. The 
increase in funding will ensure that the AO continues to provide 
program leadership and administrative support to the courts, and to 
lead the efforts for them to operate efficiently.

              CONTRIBUTIONS OF THE FEDERAL JUDICIAL CENTER

    The Federal Judicial Center is seeking a modest 8.3 percent 
increase over its current appropriation. The Center is the federal 
judiciary's education and research arm. Its support is vital to the 
work of federal judges and the personnel of the courts.
    Judge Smith will return to California later this year to resume her 
duties as a U.S. district judge. All of us in the judiciary are 
grateful to her and to the Center for its contributions under her four 
years of leadership.
    With Judge Smith, I thank you for last year's increase for the 
Center, including the confirmation that the funds transferred in 2002 
are part of its base budget and available to support some of the 
distance education positions that it has requested for several years.
    A main element of the increase that the Center seeks in 2004 would 
restore its basic judicial education programs to a twelve-month cycle, 
rather than the current eighteen-month cycle. Having to go a year and a 
half between continuing education programs has been a matter of great 
concern to judges over the country. These programs provide updates on 
caselaw trends, on innovations in managing cases, and on such 
specialized topics as admissibility of scientific evidence. 
Furthermore, we can share notes with colleagues from other courts as 
well as with the excellent faculty that the Center assembles.
    I want also to recognize the importance of the Center's research, 
primarily for committees of the Judicial Conference, as detailed in 
Judge Smith's statement, and the Center's education to enhance 
management skills in the federal courts. I participated last fall in a 
Center program for new chief judges and unit executives, and it has 
helped me immensely. Center programs also provide a forum to stress the 
importance of economy in administration, which I did earlier this week 
when speaking at a Center conference for the clerks and chief deputies 
of the courts of appeals and the clerks of the bankruptcy appellate 
panels. Last October I provided similar guidance on fiscal realities 
and responsibility when making a presentation at a Center workshop for 
the clerks and chief deputies of our federal district courts.
    Center programs for our clerk's offices and our probation, and 
pretrial services offices, almost all of it by satellite and on the 
Web, has never been more important for court executives who must deal 
with employee unease and insecurity in these troubled times. Its 
importance highlights the need for the educational technology positions 
the Center requests.
    I believe the Center's request deserves the committee's support and 
urge favorable action on the full amount.

                               CONCLUSION

    Chairman Gregg and Members of the Subcommittee, this concludes my 
statement. I look forward to working with you as you work to develop 
the fiscal year 2004 appropriation bill for the Judiciary.

                                Appendix

                                SUMMARY

    The fiscal year 2004 appropriation request for the Courts of 
Appeals, District Courts and Other Judicial Services totals 
$5,175,878,000, an increase of $540,200,000, or 11.7 percent, over the 
fiscal year 2003 available appropriations. In addition to appropriated 
funds, the judiciary utilizes other funding sources to supplement our 
appropriations including fee collections, carry forward of fee balances 
from a prior year, and the use of no-year funds. When all sources of 
funds are considered, the increase in obligations for fiscal year 2004 
is only $429,435,000 or 8.5 percent.
    Of the $540,200,000 increase in appropriations, 66 percent 
($357,481,000) is adjustments to the fiscal year 2003 base associated 
with standard pay and other inflationary increases as well as other 
adjustments that will allow the courts to maintain current services in 
fiscal year 2004. The remaining 34 percent ($182,719,000) is needed to 
respond to increased requirements for magistrate judges, federal 
defender offices, security, drug and mental health treatment, and to 
fund additional court staff required to process growing workload. The 
request for the principal programs are summarized below.

Salaries and Expenses
    The salaries and expenses of circuit, district, and bankruptcy 
courts and probation and pretrial services offices account for most of 
our request. A total of $4,467,930,000 in obligations is required for 
this account, including funding for the Vaccine Injury program, in 
fiscal year 2004. Funding totaling $276,285,000 is expected to be 
available from other sources including fee collections and carryforward 
balances to fund S&E requirements. This leaves an appropriation need of 
$4,191,645,000, which is $411,864,000 above the fiscal year 2003 
available appropriation.
    Of the $411,864,000 increase, 61 percent ($249,697,000) is needed 
to fund adjustments to the fiscal year 2003 base including: pay and 
benefit increases for judges ($12,563,000); increases in the number of 
filled Article III judges, senior judges, magistrates judges 
adjustments, and the filling of vacant Special Masters to handle 
vaccine injury cases ($13,725,000); pay and benefit increases for court 
support and probation and pretrial services staff ($95,327,000); 
increases necessary to maintain fiscal year 2003 staffing levels and 
automation support because of a reduction in non-appropriated funding 
($30,571,000); increases for space rental and associated costs 
($60,084,000); inflationary increases for operating costs 
($12,339,000); increases to support existing and newly installed 
automated systems and to continue development of new information 
technology systems ($17,934,000); and increases for maintenance of 
telecommunications systems and systems for new space coming on-line 
($7,154,000).
    The remaining 39 percent ($162,167,000) will fund 10 additional 
magistrate judges and their staff to help Article III judges handle the 
growing volume of civil and criminal cases facing the courts 
($4,119,000); 807 court support FTEs to address the shortfall in the 
level of staffing and operating costs funded in fiscal year 2003 
($97,025,000); 427 court support FTEs for a net increase in workload in 
fiscal year 2004 ($28,200,000); a cafeteria-style flexible benefits 
program for employees to reduce turnover and attract high quality new 
hires ($15,886,000); increased mental health and substance abuse 
treatment for projected growth in the number of offenders and 
defendants under supervision requiring this treatment ($7,369,000); 
annual recurring costs of the judiciary's off-site operations support 
center ($3,495,000); additional funding for the installation of 
courtroom audio systems during the construction of new courthouses 
($4,384,000); and funding for background investigations for probation 
and pretrial services officers and officer assistants, and for court 
staff in sensitive positions ($1,689,000).

Defender Services
    An appropriation of $635,481,000 is required for the Defender 
Services program to provide representation for eligible criminal 
defendants in fiscal year 2004. This is an increase of $100,520,000 
above the available fiscal year 2003 appropriation.
    Of this increase, 86 percent ($86,909,000) is needed for 
adjustments to the fiscal year 2003 base for inflationary and workload 
increases. Included in these adjustments are standard pay and inflation 
increases for Federal Defender Organizations ($14,002,000); a cost-of-
living adjustment for panel attorneys ($1,247,000); other inflationary 
increases ($2,149,000); increase in the projected number of 
representations ($36,923,000); funding to maintain base caseload costs 
($33,188,000); and a reduction in non-recurring costs (-$600,000).
    The remaining increase of 14 percent ($13,611,000) will fund an 
increase in the hourly panel attorney rate for non-capital cases, above 
the inflationary adjustment, to $113 beginning on April 1, 2004 
($10,378,000); an increase in the hourly panel attorney rate for 
capital cases, beyond the inflationary increase requested, to $157 
effective on April 1, 2004 ($2,633,000); and start-up costs of two new 
federal defender offices expected to be opened in fiscal year 2004 
($600,000). The Congress and the Judicial Conference have urged us to 
establish more federal defender organizations as an alternative to 
using panel attorneys in districts where this would be appropriate.

Fees of Jurors and Commissioners
    For the Fees of Jurors program, an appropriation of $53,181,000 is 
required, a decline of $1,100,000 from the fiscal year 2003 available 
appropriation. This decline is the result of a decrease in the 
projected number of juror days (-$1,447,000); and an increase for 
inflation ($347,000).

Court Security
    For the Court Security program, an appropriation of $295,571,000 is 
required, which is an increase of $28,916,000 above the fiscal year 
2003 available appropriation. Of this increase, 76 percent 
($21,975,000) is for adjustments to base including: an increase for 
standard pay, benefit and contractual services inflation ($13,237,000); 
an increase to annualize the costs for 10 new court security officers 
(CSOs) partially funded in fiscal year 2003 ($290,000); non-pay 
inflationary increases ($303,000); an increase of 26 court security 
officers for new or existing courthouse space ($980,000); and an 
increase for the cyclical replacement of security systems and equipment 
($7,165,000).
    The remaining increase of 24 percent ($6,941,000) will fund 
security systems and equipment for perimeter security, CSO radio 
repeater installations, and systems in probation and pretrial services 
offices ($6,072,000); CSO orientation training and contracting officer 
training for staff who administer the CSO contract ($550,000); and four 
additional FTE to administer the Court Security Program at the U.S. 
Marshals Service to improve program oversight and administration 
($319,000).
                                 ______
                                 

  Prepared Statement of Gregory W. Carman, Chief Judge, United States 
                      Court of International Trade

    Chairman Gregg, Senator Hollings, and Members of the Subcommittee: 
thank you once again for allowing me this opportunity to submit this 
statement on behalf of the United States Court of International Trade, 
which is a national trial-level federal court established under Article 
III of the Constitution with exclusive nationwide jurisdiction over 
civil actions pertaining to matters arising out of the administration 
and enforcement of the customs and international trade laws of the 
United States.
    The Court's budget request for fiscal year 2004 is $14,206,000, 
which is $519,000 or 3.8 percent over the fiscal year 2003 enacted 
appropriation of $13,687,000 and an increase of $597,000 or 4.4 percent 
over the level after the rescission imposed by Congress. This request 
will enable the Court to maintain current services and provide for 
standard pay and other inflationary adjustments to base. The Court's 
budget request included a small program increase of $50,000 to upgrade 
its security recording system to a digital system that will increase 
the accuracy and reliability of its current system, while, at the same 
time enhancing its internal and external surveillance capabilities. The 
requested increase, however, was included in the recently enacted 
Wartime Supplemental Appropriation Bill and will allow us to move 
forward with this security upgrade during fiscal year 2003. The Court 
continues, as it has done for the past nine years, to hold its 
requested budget increases below 6 percent.
    In response to several studies conducted by GSA and the U.S. 
Marshals Service, and in the wake of September 11th, the Court, in 
fiscal year 2002, requested and received funds for an architectural 
analysis of the structure of the Courthouse in order to determine the 
vulnerability of the facility in case of a bomb blast and/or a 
terrorist attack. As a result of this analysis, the Court, using other 
funds from its fiscal year 2002 appropriation, asked the contractor for 
recommendations as to the feasibility of modifying the existing 
building in a manner that would ensure the health, security and 
effective operation of the Court. The contractor's final report was 
completed at the beginning of fiscal year 2003. Specific 
recommendations were made that would make the courthouse less 
vulnerable and safer for the Judges, the employees and the public. The 
Court is working closely with all relevant agencies to obtain 
appropriate funding for the implementation of the needed modifications 
to the building.
    In accordance with its Long Range Plan, the Court continues to 
upgrade its technology infrastructure and expand staff development 
programs in the areas of technology and job related skills without 
requesting additional funds. The Court is in the process of completing 
the implementation of a customized version of the Federal Judiciary's 
Case Management/Electronic Case Files (CM/ECF.) System and the related 
file tracking, scanning and indexing solutions. The upgrading of the 
wiring of its data network and voice connections will be completed in 
fiscal year 2003. This upgrade will greatly increase the Court's access 
to the Judiciary's Data Communications Network (DCN), improve data 
speeds and enable the Court to address its current and future 
telecommunications needs. Additionally, the Court has installed its own 
frame relay connections for direct access to the DCN and a separate 
frame relay connection that enables the Court to host public access 
systems, such as its Internet Website. In fiscal year 2003, the Court 
will purchase a Virtual Private Network System (VPN) that will provide 
high speed remote access to Court systems by the Judges and Court 
employees working at remote locations. As in the past, the Court will 
continue to use its Judiciary Information Technology Fund for the 
cyclical replacement of aging desktop and server based hardware 
systems.
    In fiscal year 2004, the Court remains committed to ensuring that 
the Court's technology infrastructure will continue to support its 
short and long term needs, thereby permitting the Court to operate 
efficiently and effectively. Among the projects to be supported by the 
Court's budget request and the carryforward balance from its Judiciary 
Information Technology Fund are: (1) supporting the Court's Case 
Management/Electronic Case Files (CM/EC) System; (2) expanding, 
improving and supporting the Court's remote access capability; (3) 
supporting a windows-based financial management system; (4) improving 
the Court's disaster recovery capabilities; (5) supporting new software 
applications that not only enable Judges and Court staff to view 
instructional videos at individual workstations, but integrates the 
Federal Judiciary's Training Network with the Court's local area 
network; (6) upgrading the Court's networked records management and 
tracking system for all case records; and (7) upgrading and supporting 
the online library automation system that enables the Judges and Court 
staff to search electronically for books and resource materials in the 
Court's Library collection.
    Additionally, the fiscal year 2004 request will enable the Court to 
continue its cyclical maintenance program of the Court's facilities, 
including the replacement of certain furniture with ergonomic designs 
that will minimize the risk of injury to Court personnel.
    Lastly, the fiscal year 2004 request also includes funds for the 
continued support and maintenance of security system upgrades 
implemented by the Court in fiscal years 1999 through 2003.
    The Court's continued commitment to fulfill its mission through the 
use of technology will enable it to enhance the delivery of services to 
the Court family, bar and public.
    I would like to reaffirm that the Court will continue, as it has in 
the past, to conserve its financial resources through sound and prudent 
personnel and fiscal management practices. The Court's ``General 
Statement and Information'' and ``Justification of Changes,'' which 
provide more detailed descriptions of each line item adjustment, were 
submitted previously. If the Committee requires any additional 
information, we will be pleased to submit it.
                                 ______
                                 

 Prepared Statement of Hon. Fern M. Smith, Director, Federal Judicial 
                                 Center

    Mr. Chairman, Members of the Subcommittee: I am pleased to submit 
this statement in support of the Federal Judicial Center's request for 
fiscal 2004 funds to help it improve the administration of justice.
    This is the last request I will submit to you; this fall, having 
completed my four-year commitment, I will return to the Northern 
District of California, where I have been a U.S. district judge since 
1988. It has been a pleasure to work with the subcommittee and its 
staff.
    The Center's statutory Board, which the Chief Justice chairs, has 
selected U.S. District Judge Barbara Rothstein of Seattle as the 
Center's ninth director. She will take up her duties in early 
September.
    This statement summarizes our 2004 request and provides a brief 
accounting of major Center activities to promote improved judicial 
administration in the United States and, to the degree our resources 
permit it, to work with other public and private organizations to 
provide help to the judiciaries in foreign countries that need our 
assistance.
    As to the Center's 2003 funding, especially in light of the fiscal 
constraints you faced, I am grateful for the base funding and the 
partial adjustments to that funding. Thank you as well for recognizing 
as part of the base budget, the funds you transferred in 2002 for 
distance education, which provide us some of the positions for distance 
education that we have been requesting since 1998.

                              2004 REQUEST

    The Center's Board unanimously approved the 2004 request for 
$22,434,000, an 8.3 percent increase to provide adjustments to the 2003 
base, modest program enhancements to allow a return to a twelve-month 
cycle of education programs for federal judges, and five additional 
distance education positions. Statement of Hon. Fern M. Smith, 
Director, Federal Judicial Center, May 1, 2003
Judicial education and training programs ($500,000)
    The funds for more timely education for federal judges are vital to 
our task of keeping judges knowledgeable about the constant changes in 
the law, science, and technology. Last year, in fact, the Board 
prepared its own statement supporting this element of that year's 
request, noting ``the Board does not burden Congress with direct 
communications about the Center's appropriation, relying instead on the 
Center director for that task. The special importance of restoring 
these programs to an annual basis merits an exception to that 
practice.''
    Center educational programs last year reached almost 31,700 
participants. Almost 80 percent participated in satellite broadcasts 
and other forms of distance education.
    For federal judges, the Center provides education in several forms, 
including manuals, satellite broadcasts, and small seminars or 
workshops to orient new judges to their responsibilities and to provide 
experienced judges with assistance in specific areas, such as mediation 
or intellectual property law.
    Another fundamental element of our education for judges is 
periodic, general continuing education programs for circuit judges, 
district judges, magistrate judges, and bankruptcy judges. These 
programs assist judges on a variety of subjects, including updating 
them on new case law relevant to frequently litigated issues, 
describing new techniques of case management, and reviewing the ethics 
requirements that govern judges. Moreover, these programs allow judges 
to learn from their colleagues as well as from the faculty we assemble 
and to share innovations that have proven successful as well as those 
that have not.
    Until 1999, a judge could attend such a general program once a 
year. In 1999, we shifted to an eighteen-month cycle as our 
appropriation declined and because we thought that distance education 
could compensate for longer intervals between programs.
    That decision has provoked considerable negative commentary from 
judges across the country. As the Center Board said last year, ``[o]f 
all the comments we receive from other judges about the Center's work, 
none is as frequent and widespread as the need to make these programs 
available on an annual basis. The Center's general continuing education 
programs are the core of its educational effort for judges. They are 
essential to helping judges meet the challenges of rapid change, 
increasing complexity, and growing numbers in the cases before them.''
    Seeking this modest increase in funds for judicial education 
seminars in no way signals the Center's retreat from distance 
education. In most respects, distance education has been a great 
success. Our travel budget, with this request, would still be about 
$1,000,000 below our 1995 travel budget. We want to continue to 
emphasize cost-effective, non-travel, asynchronous learning for the 
employees of the courts and for judges to the degree it is effective.
    At the same time, we recognize that some face-to-face educational 
opportunities are essential, especially for those with responsibilities 
like those of federal judges. Heavy caseloads and the isolation 
inherent in performing judicial duties limit opportunities for judges 
to meet in a detached atmosphere and discuss the nuances of changing 
precedents and case-management techniques. These are not subjects or 
procedures that lend themselves to learning solely by computer or video 
screen.

Five additional positions (3 FTE) to enhance the Center's use of 
        distance education technologies ($311,000)
    The Center has long relied on distance education technologies for 
the bulk of the education it provides, including the Federal Judicial 
Television Network, which the Center began operating in April 1998. 
Since then, the Center has been requesting ten additional positions for 
video, multimedia, and automation specialists to support distance 
education and its necessary technologies. You provided for some of 
these positions in 2002 by transferring $400,000 to the Center's 
appropriation from the funds that Congress had earlier transferred to a 
completed federal appellate courts study commission, and then including 
those funds in our 2003 base. We appreciate that assistance, but the 
need for the remaining positions has not diminished, and so I am 
requesting again funds to provide for five additional distance 
education-related positions.
    The five additional positions we seek in 2004 will permit us to 
bring on additional software engineers and computer-training 
technologists to ensure the federal courts have readily available, 
quality education without the need or expense of travel.

                     CENTER SERVICES AND ACTIVITIES

    The following summary of current Center activities is an accounting 
for our stewardship of the funds you provide.

Promoting security in the administration of justice
    The Center's ``critical incident stress management'' training helps 
courts develop teams to provide crisis intervention to their personnel 
victimized by natural disasters, terrorist attacks, and work-related 
trauma. Such teams assisted in the crisis response for the New York 
federal courts following 9/11.
    Center Federal Judicial Television Network series on security 
include:
  --crisis management training through Leading in Times of Crisis, 
        featuring court managers who have successfully confronted 
        crises in their own courts, and. Confronting Crises: The 
        Employee's Perspective, to help staff prepare for potential 
        security threats and crises
  --a safety series to enable probation and pretrial services officers 
        to mentally rehearse appropriate reactions to security threats 
        in the office, in the field, and during home contacts with 
        offenders, defendants, and third parties.
    Additionally, at the request of the Judicial Conference Committee 
on Court Administration and Case Management, the Center is assessing 
the Conference's Criminal Case Files Pilot Programs to learn, among 
other things, about the possible harm or threats of harm that may 
result from providing remote public electronic access to documents 
filed in criminal cases.

Promoting the fair and efficient disposition of litigation
    Helping judges dispose of cases fairly, quickly, and inexpensively 
is a major theme of our initial orientation seminars for new judges. We 
also provide judges an extensive array of manuals and sourcebooks about 
case-management techniques, including recurring problems in criminal 
trials, managing cases for resolution by alternatives to conventional 
procedures, and effective use of courtroom technology.
    Our research for committees of the Judicial Conference includes 
analyses of class action litigation and a study of the incidence of 
sealed settlements in district courts across the country, a subject of 
national interest since the recent decision of the federal district 
court in South Carolina not to permit the practice.

Judicial ethics
    We work closely with the Judicial Conference Committee on the Codes 
of Conduct to keep judges and their staffs fully informed of their 
ethical obligations and to help them understand the often complex rules 
designed to promote judicial impartiality. This year we published two 
new guides, one for judges on their recusal obligations under the 
judicial disqualification statute and one for judges' law clerks on the 
restrictions that apply to them.

Helping courts help offenders
    The Center is conducting two related studies of federal court 
programs, prompted by increased national interest in offender re-entry 
programs and recent legislation providing post-incarceration vocational 
and remedial educational opportunities for certain releasees. One study 
will produce empirical information about federal probation officers' 
efforts to assist appropriate prisoners in preparing for reentry into 
the community. The other will help the Eastern District of Missouri 
evaluate its Offender Employment Program, which emphasizes the 
educational and employment needs of the offender and provides 
employment-related services coordinated by probation officers who are 
trained employment specialists.
    We are also assessing the substance abuse treatment and mental 
health services needs of Native American offenders, in order to help 
probation and pretrial services officers better meet the special needs 
of this group.

Promoting public understanding of the judicial process
    We recently released an interactive Web site, ``Inside the Federal 
Courts,'' available at http://www.fjc.gov, that helps federal court 
employees, as well as the media and citizens of this and other 
countries, understand the federal court system's structure and 
operation. This includes a section on Congress's role in improving the 
federal courts. We also produced an eighteen-minute video, An 
Introduction to the Patent System, that judges may use to help explain 
patents and the patent process to jurors. Bar associations are making 
copies available to lawyers and the public.

Assisting the judiciaries of foreign countries
    Mr. Chairman, I would also like to give you a brief update of our 
work to promote independent and effective dispute resolution in the 
courts of foreign countries.
    In the last twelve months, the Center has provided briefings about 
the U.S. judicial system to 488 judges and legal officials from 66 
countries, as well as a limited amount of more substantial assistance, 
either by in-country technical assistance or seminars held here in the 
United States. Neither our briefings nor our more extensive projects 
for foreign judiciaries are funded from the Center's appropriation. We 
provide this assistance at the request of either domestic agencies or 
foreign institutions, which fund the travel, lodging, and subsistence.
    Our activities this year included a small seminar on educational 
techniques with our counterparts from Mexico and Canada, this a follow-
up to the Chief Justice's meeting with the President of the Supreme 
Court of Mexico in September 2001. The Center also hosted a number of 
judges, scholars, and government officials as part of its Visiting 
Foreign Judicial Fellows Program. These included a labor judge from 
Brazil, who researched the use of alternative dispute resolution at the 
appellate level, and an official from the Ministry of Justice of 
Azerbaijan, who studied judicial education. In October 2002, I, and 
another representative from the Center, participated in a CEELI 
Institute conference in Prague, Czech Republic, that brought together 
representatives of judicial training centers from Russia, Eastern 
Europe, and Central Asia to discuss strategies for delivering judicial 
education. The Center continues to facilitate a variety of other 
international exchanges, including a bimonthly digital video-conference 
between judges from Ecuador and the United States and a recent panel 
discussion on the judiciary for officials from Afghanistan.

The Center workplace
    The Center's statute provides greater flexibility in personnel 
matters than many federal agencies enjoy. We have used that flexibility 
to adopt a broad payband system and to implement employee-recommended 
policies that will further our ability to give the taxpayers their due 
while providing employees flexible work schedules and workplace 
options. We know that the latter often contributes to the former.
    Well before 1990, we permitted flextime for all employees. Since 
1994, we have allowed employees to choose a compressed work schedule. 
All of our employees use flextime and more than half are on compressed 
work schedules.
    In 1997 we established a telecommuting policy applicable to all 
Center employees, subject to managers' discretion. Although it is not 
practical to do some Center jobs--such as video production--at home, 8 
percent of Center employees telecommute regularly. We also make 
telecommuting available to employees on a day-by-day basis, as the 
needs present themselves, and last year, we accommodated more than 50 
requests from a staff of fewer than 140. We intend to do even better in 
this regard next year.
    To encourage employee use of public transportation, we offer our 
employees a transportation subsidy of $60 per month.
    Our employees are also eligible to participate in a number of 
supplemental benefits programs, such as pretax health insurance premium 
payments, flexible spending accounts to fund health care, child care, 
and commuter costs (beyond those covered by the subsidy noted above), 
and a long-term care insurance program. We are grateful to the 
Administrative Office of the U.S. Courts for developing these 
innovative policies.
    Mr. Chairman, I appreciate this opportunity to explain our 
budgetary needs for the next fiscal year and to describe some of the 
Center's work and its effect on the work of the courts.
    I will be pleased to answer any questions you may have.
                                 ______
                                 

Prepared Statement of Diana E. Murphy, Chair, United States Sentencing 
                               Commission

    Chairman Gregg, Senator Hollings, Members of the Subcommittee, 
thank you for the opportunity to submit a statement in support of the 
United States Sentencing Commission's appropriation request for fiscal 
year 2004. The Commission was resurrected with the appointment of a 
full complement of seven voting commissioners on November 15, 1999, and 
I currently serve as Chair. In a relatively brief period, the 
Commission has reestablished its policy making role in the federal 
criminal justice system as envisioned by Congress under the Sentencing 
Reform Act of 1984.
    To date, the new commissioners have promulgated over fifty 
amendments to the federal sentencing guidelines, and Congress has 
without exception accepted all of the Commission's amendments. The 
Commission has set aggressive annual agendas and achieved significant 
results by creating new guidelines and modifying existing guidelines 
covering offenses such as:
  --nuclear, chemical, and biological weapons offenses,
  --terrorism,
  --sexual offenses against children,
  --human trafficking and peonage,
  --stalking,
  --intellectual property infringement,
  --identity theft,
  --counterfeiting,
  --economic crimes and money laundering,
  --illegal firearm sales and possession,
  --illegal reentry,
  --ecstasy trafficking,
  --methamphetamine and amphetamine manufacturing, and
  --cultural heritage resources.
    The Commission worked diligently to clear the significant backlog 
of crime legislation created by previous vacancies on the Commission. 
This amendment cycle, we expect to submit to Congress amendments to the 
federal sentencing guidelines implementing new crime legislation and 
addressing such difficult areas as:
  --terrorism,
  --corporate fraud,
  --oxycodone offenses,
  --cybersecurity,
  --involuntary manslaughter,
  --campaign finance violations, and
  --offenses involving the use of body armor.
    The Commission will be unable to respond to the emergencies 
identified by Congress without the staff resources required. Sentencing 
guidelines must be carefully crafted to meet policy needs and to fit 
within our interlocking system. To accomplish what Congress expects, 
the Commission must be able to maintain its ability to respond quickly 
to emerging national priorities. The Commission is dedicated to 
continuing its important role in addressing national priorities such as 
terrorism and corporate crime, but our current resources limit our 
ability to respond to new information, acquire sophisticated expertise, 
and develop novel approaches.
    For these reasons, the Commission requests an appropriation of 
$13,200,000 for fiscal year 2004. This funding request for fiscal year 
2004 represents a zero percent increase over the Commission's request 
for fiscal year 2003.

                          RESOURCES REQUESTED

    The Commission's appropriation request for fiscal year 2004 is 
$13,200,000, the same amount requested for fiscal year 2003. We 
understand increases are generally difficult to justify, particularly 
this year, but we need to develop the necessary staff expertise in 
areas of national importance such as terrorism and corporate crime. 
Staff resources have become increasingly taxed at the same time as we 
have received increased requests for sentencing information from the 
Congress, the General Accounting Office, the federal Judiciary, the 
media, and other interested parties. We now must analyze an increased 
number of new case filings, develop ever more proposed guideline 
amendments each year, and fulfill other statutory duties to train and 
provide expertise on sentencing issues to the federal courts, Congress, 
and the Executive branch. The Commission respectfully urges Congress to 
appropriate $13,200,000 in fiscal year 2004 to enable the Commission to 
keep pace with these significantly increased demands.

                             JUSTIFICATION

Sentencing Reform Act Requirements
    The Commission was created under the Sentencing Reform Act of 1984 
as a permanent, independent agency within the judicial branch. Congress 
gave the Commission a dual mission: (a) to establish and maintain a 
national guideline system for federal sentencing policies and 
practices; and (b) to serve as an expert agency and leading authority 
on federal sentencing matters.
    In fulfilling these basic requirements, the Commission annually 
issues a sentencing guidelines manual that delineates penalty levels 
for all federal offenses. In addition to encompassing all federal 
offenses, the guidelines manual incorporates amendments approved by the 
Commission for newly enacted crime legislation passed by Congress. The 
guidelines manual is used by prosecutors, defense counsel, and 
probation officers in making sentencing recommendations to the courts. 
Federal district judges must use the guidelines manual when imposing a 
sentence, and it must also be relied upon by all federal appellate 
judges and the justices of the United States Supreme Court when 
reviewing the imposed penalties. Since the first manual went into 
effect on November 1, 1987, over half a million defendants have been 
sentenced under the guideline system.

Commission Response to the Threat of Terrorism and Corporate Crime
    This appropriation request again grows out of the need to 
reestablish the staffing levels necessary to respond to emerging 
national priorities and to support a fully functioning Commission. The 
policy work of the Commission generally is determined by three sources: 
(1) legislative directives by Congress and new crime legislation; (2) 
resolution of conflicting interpretations of sentencing guidelines 
among the circuit courts of appeals; and (3) internal priorities that 
are set by the commissioners following an annual solicitation published 
in the Federal Register.
    Due to the extended absence of voting commissioners in the late 
1990s and a firm commitment on the part of the new Commission to 
respond quickly to congressional directives, the Commission has focused 
resources toward implementing crime legislation. Congress has called 
upon the Commission to implement crime legislation covering a wide 
range of disturbing criminal conduct, including sexual offenses against 
children, human trafficking and peonage, stalking, identity theft, 
ecstasy trafficking, methamphetamine and amphetamine manufacturing, and 
intellectual property infringement.
    New laws passed by Congress to secure our nation from the threats 
of terrorism and to protect our workforce from economic disruption 
caused by corporate crime are perhaps the most important--and most 
complex--for the Commission to implement. In the area of terrorism, the 
Commission submitted to Congress a guideline amendment that 
significantly increased the penalties for offenses involving the 
importation and exportation of nuclear, biological, and chemical 
weapons on May 1, 2001, a full four months before the terrorist strikes 
of September 11th and subsequent nationwide anthrax attacks and 
threats. By utilizing our extensive datasets to review national 
security offenses, the Commission identified the inadequacy of existing 
penalties before concerns were widely shared.
    Congress responded quickly to the threat of terrorism by passing 
the USA PATRIOT Act, Pub. L. 107-56, and the Commission responded in 
kind. In less than six months, the Commission promulgated a 
comprehensive package of amendments to the guidelines implementing the 
USA PATRIOT Act. Among the most significant of the provisions are 
appropriately severe penalties for offenses committed against mass 
transportation systems and interstate gas or hazardous liquid 
pipelines, increased sentences for threats that substantially disrupt 
governmental or business operations or result in costly cleanup 
measures, expanded guideline coverage for bioterrorism offenses, and a 
new guideline covering material support to foreign terrorist 
organizations.
    This year Congress once again has called upon the Commission to 
implement terrorism related legislation. The Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002, Pub. L. 107-188, 
and the Terrorist Bombings Convention Implementation Act of 2002, Pub. 
L. 107-197 require the Commission to develop new guideline provisions 
to address protection of the nation's food and water supplies and to 
review the penalty structure for certain national security offenses, 
including nuclear, biological, and chemical weapons offenses.
    In addition, the Homeland Security Act of 2002 (specifically 
section 225, the ``Cyber Security Enhancement Act of 2002''), Pub. L. 
107-296, requires the Commission implement new guideline provisions to 
punish appropriately and effectively deter crimes that undermine our 
nation's cybersecurity. Specifically, the Act requires the Commission 
on an expedited basis to develop guideline provisions that adequately 
account for eight enumerated factors, such as ``whether the offense 
involved a computer used by the government in furtherance of national 
defense, national security, or the administration of justice,'' and 
``whether the violation was intended to, or had the effect of, 
significantly interfering with or disrupting a critical 
infrastructure.''
    The Commission is making progress toward implementing each of these 
new terrorism related legislative items. As the nation learns more 
about identifying terrorism related conduct, the Commission expects 
Congress will continue to respond with further legislation. The 
Commission needs to acquire additional staff expertise to meets its 
related responsibilities. For example, Congress has introduced 
legislation that would require significantly increased penalties for 
certain terrorism related offenses involving identity theft, the 
``Identity Theft Penalty Enhancement Act of 2003.'' This legislation 
already has passed the Senate Judiciary Committee and would require the 
Commission to evaluate how it would affect and interact with existing 
guideline provisions.
    In April 2001, the Commission promulgated a multi-part amendment 
that made comprehensive changes to the guidelines covering economic 
crime. Economic offenses account for more than one quarter of all the 
cases sentenced in the United States federal district courts. The 
Commission had received from the federal Judiciary and the Department 
of Justice testimony and survey results that indicate that the 
sentences for these offenses were inadequate to punish appropriately 
defendants in cases in which the monetary loss was substantial. After a 
number of years of data collection, analyses, public comment, and 
public hearings, the Commission passed a comprehensive economic crime 
package that, among other things, provides significantly increased 
penalties for mid and high level fraud, theft, and tax offenses 
involving moderate and large monetary losses and significantly improved 
the operation of the money laundering guideline.
    While the Commission's guideline amendment was pending before 
Congress, a number of corporate scandals became publicized. Congress 
responded swiftly by passing the Sarbanes-Oxley Act of 2002 The Act 
required the Commission to promulgate on an emergency basis several new 
guideline provisions relating to securities fraud, pension fraud, 
accounting fraud, and other more general types of fraud. Fortunately, 
the Commission was able to build upon expertise it had acquired 
developing the 2001 economic crime package, and in six months the 
Commission completed a multi-part amendment that increases penalties 
significantly for serious fraud offenses.
    The emergency guideline, which became effective January 25, 2003, 
includes new sentencing enhancements for offenses involving more than 
100 victims, substantially endangering the solvency and financial 
security of a publicly traded corporation or other organization with 
1,000 or more employees, and securities fraud committed by officers or 
directors of publicly traded corporations. The Commission continues to 
address the problems and will submit for congressional review a 
permanent amendment by May 1, 2003.

New Opportunities in Fiscal Year 2004 in Corporate Crime and Native 
        American Issues
    Early in 2002 the Commission created two special panels of outside 
experts to study problems related to corporate crime and disparities 
encountered when Native Americans are sentenced in federal court under 
the Major Crimes Act. Each ad hoc group was given eighteen months to 
work on recommendations to the Commission, and each has been 
functioning effectively and has obtained public input into its work. 
Both groups will issue their reports in fiscal year 2004 which will be 
shared with the public. Then the Commission will need to work on 
possible amendments to Chapter 8 (the guidelines for sentencing 
organizations, including corporations, associations, municipalities, 
unions, etc.) and to guidelines particularly affecting Native 
Americans. While this method of gathering expert assistance has proven 
extremely cost effective, we need additional staff to draw out from a 
wealth of material the optimum proposals and to translate them into 
guidelines.
    The corporate crime advisory group is comprised of sixteen 
nationally recognized experts drawn from government, private business, 
and academia, and is chaired by a former United States Attorney. The 
Commission has requested the expert committee to review the 
effectiveness of the criteria for an effective corporate compliance 
program and the deterrence of corporate crime. The advisory committee 
has actively engaged in research and soliciting public comment, 
including a day-long public hearing. The hearing covered many issues 
that bear directly on organizations' abilities and incentives to detect 
and report wrongdoing before it becomes widespread and 
institutionalized.
    Congress also recognizes the critical role the organizational 
guidelines perform, and in the Sarbanes-Oxley Act directed the 
Commission to ensure that the guidelines that apply to organizations 
are sufficient to deter and punish organizational misconduct. Because 
the Commission had a jump start in this area and had already formed the 
advisory group, the expert panel will be able to report its findings 
and recommendations to the Commission in October 2003. At that time, 
the Commission expects to have a sound foundation for staff to help us 
deliberate and consider promulgation of appropriate modifications to 
the organizational guidelines during fiscal year 2004.
    The formation of the Native American advisory group grew out of a 
hearing the Commission held in Rapid City, South Dakota in 2001. The 
Rapid City hearing focused on issues relating to Native Americans and 
was attended by a number of individuals who now serve on the advisory 
group. As a result of testimony at the hearing as well as public 
comment we received, the Commission formed the advisory group and 
requested that the group to report its findings during fiscal year 
2004. The Commission is devoting additional staff resources to 
sentencing issues that particularly affect Native Americans. For 
example, the Commission has created a new sentencing guideline aimed at 
protecting our cultural heritage resources and other national 
treasures, has conducted several days of intensive training for 
prosecutors defense attorneys, and probation officers in Indian 
Country, and has begun to study federal crimes for which Native 
Americans comprise a significant proportion of offenders, such as 
manslaughter.

Additional Sentencing Priorities
    Drug trafficking offenders continue to comprise the majority of the 
federal criminal caseload, and the Commission is constantly identifying 
and responding to new drugs of abuse. In recent years, the Commission 
has acted to increase penalties significantly for methamphetamine, 
amphetamine, ecstasy, and certain List I chemical offenses.
    This amendment cycle the Commission is focusing on the increasing 
problem of oxycodone trafficking. Using its comprehensive sentencing 
database, the Commission recently identified a significant increase in 
the number of offenses involving the pain killer Oxycontin. The 
Commission currently is considering an amendment to the drug guideline 
that will recalibrate the way in which this drug is penalized so that 
the penalties for offenses involving oxycodone will be substantially 
increased. The Commission hopes that this increased penalty structure 
will help deter any further increase in the abuse of this drug and 
serve to punish appropriately those criminals who engage in its illegal 
trafficking.
    The Commission also is aware that Congress may enact legislation 
directing it to review the guidelines pertaining to GHB, a drug that is 
often associated with date rape. Bills have been introduced both in the 
Senate and the House on this issue, and, if enacted, they would require 
the Commission to engage in a comprehensive review of the penalty 
structure for this particular drug during fiscal year 2004. The 
Commission also is aware of other drug related legislation that would 
require a response from us if enacted.
    The Commission also is examining several guidelines covering 
offenses against persons and this work must be extended through fiscal 
year 2004. The 21st Century Department of Justice Appropriations 
Authorization Act, Pub. L. 107-273, for example, contains two 
directives to the Commission. The first directs the Commission to 
provide an appropriate sentencing enhancement for any crime of violence 
or drug trafficking crime in which the defendant used body armor. The 
Commission expects to submit an amendment to Congress by May 1, 2003, 
implementing this first directive. The second and more complicated 
directive requires the Commission to provide an appropriate sentencing 
enhancement for assaults against a federal judge and lists eight 
factors that the Commission must consider. The Commission expects that 
the Native American advisory group's review of the federal assault 
penalty structure will be helpful to implementation of this 
congressional directive during fiscal year 2004.
    The Commission also is reviewing the guideline covering involuntary 
manslaughter after receiving congressional inquiries on the matter. The 
Commission currently is considering an amendment that would 
significantly increase the penalties for such offenses, but the 
Commission's work in the area of crimes against individuals will 
continue into fiscal year 2004. The overwhelming majority of offenders 
convicted of assaults or homicide at the federal level are Native 
Americans. As a result, the ad hoc committee also is examining the 
guidelines pertaining to manslaughter. Even though the Commission may 
make some change to the involuntary manslaughter guideline this 
amendment cycle, we likely will continue our work in the area of 
manslaughter until after receiving the report and recommendations from 
the Native American advisory committee during fiscal year 2004.
    The Commission also has been very active in the area of sexual 
offenses. In every amendment cycle since the Commission was 
reconstituted in 1999, the Commission has promulgated new amendment 
provisions addressing various egregious sexual offenses. These many new 
guideline provisions provide severe punishment for such heinous crimes 
as human trafficking (in response to an emergency directive contained 
in the Victims of Trafficking and Violence Protection Act of 2000), 
sexual abuse of a minor, and commercial sex acts such as the production 
of child pornography and prostitution.
    Sexual offenses involving children, however, continues to be of 
great concern, and the Commission is aware of several bills recently 
introduced in the 108th Congress that would require further action by 
the Commission. For example, the Senate recently overwhelming passed S. 
151, the ``PROTECT Act,'' which creates several new offenses relating 
to ``virtual'' child pornography and contains several directives to the 
Commission. The directives, among other things, would require the 
Commission to incorporate the new virtual child pornography offense 
into the sentencing guidelines and revisit guideline treatment of 
offenses involving interstate travel to engage in illegal sexual acts 
with children. If S. 151 or other similar bills are enacted, the 
Commission will be required to devote significant resources toward 
implementing those provisions during fiscal year 2004.
Ongoing Research and Analysis Obligations
    In fiscal year 2004, as part of its ongoing mission the Commission 
will continue to work on several studies reflecting the operation of 
the guidelines since their inception. In conjunction with these 
studies, the Commission began a comprehensive assessment of the 
guidelines pertaining to drug offenses, which comprise a majority of 
the cases sentenced under the guidelines. In May 2002, the Commission 
issued a comprehensive 112 page report to Congress examining the 
current federal penalty structure for crack cocaine and powder cocaine 
offenses. The report contained concrete recommendations for Congress to 
consider regarding statutory and guideline penalties for cocaine 
offenses which I presented at a hearing before the Senate Judiciary 
Subcommittee on Crime and Drugs on May 22, 2002.
    The report on federal cocaine sentencing policy was informed by an 
intensive project which involved analyzing the court documents for 
1,600 cocaine offense cases sentenced in fiscal year 2000--representing 
approximately 20 percent of all federal cocaine offenses that year. The 
Commission analyzed important variables such as the offender's function 
in the offense, the geographic scope of the offense, and the presence 
of aggravating factors such as possession, brandishment, or use of a 
weapon, bodily injury, sales to protected persons such as minors, and 
sales in protected locations such as areas surrounding schools and 
playgrounds.
    The Commission currently is collecting similar data with respect to 
other major drugs of abuse, such as methamphetamine, heroin, and 
marijuana. This process entails gathering information on the offense 
conduct and offender characteristics for over 3,000 federal drug 
trafficking offenders. This analysis is continuing through fiscal year 
2004 and provide information on the organizational structure of drug 
trafficking operations and assist in the evaluation of the sentencing 
structure for these offenses.
    The Commission has also undertaken the most comprehensive study of 
recidivism rates for federal offenders. The Commission is tracking more 
than 6,000 federal offenders through the criminal justice system to 
determine who becomes a repeat offender and what factors may be 
predictive of such behavior. The results will assist in evaluating the 
established criminal history categories and the role of the guidelines 
in deterring crime. While encouraged by the progress made on the 
project, full access to arrest and conviction records to complete the 
work only recently occurred when Congress authorized access by the 
Commission to a National Crime Information Center terminal under the 
21st Century Department of Justice Appropriations Act. The Commission 
expects both the recidivism study and the consideration of any 
modifications to the guidelines in response to its findings to continue 
through fiscal year 2004.

Commission Struggles with Increasing Caseload
    A key component to the Commission's ability to implement 
legislation and develop new guideline provisions is its comprehensive, 
computerized data collection system. This comprehensive database serves 
as a clearinghouse of federal sentencing information and forms the 
basis for the Commission's monitoring and evaluating the guidelines, 
undertaking many of its research projects, and responding to hundreds 
of data requests received from Congress and other criminal justice 
entities each year.
    For each case sentenced under the guidelines, the Commission enters 
over 200 items of information into its database, such as each count of 
conviction, the number and nature of victims, the magnitude of economic 
loss, the type and quantity of drugs, and the number and type of 
weapons. The Commission is only funded and physically equipped to 
process some 40,000 cases annually, but for each of the last four years 
it has received well over 50,000 cases annually. We expect to receive 
63,000 cases in fiscal year 2003, and our resources do not permit 
timely processing of the extensive information. We plan to experiment 
with an electronic file transfer system to enable the 94 federal 
districts to submit five major court documents (the Judgment and 
Commitment Order, the Presentence Report, the Indictment, the Plea 
Agreement, and the Statement of Reasons) to the Commission in a 
paperless manner, thereby improving efficiencies and lessening delays, 
but this system will require substantial start up costs.
    Additionally, the Commission performs case processing for 
organizational/corporate sentences, appellate cases, and probation 
revocation/supervised release violations. The Commission also has 
received requests that additional coding modules be added to analyze 
Rule 35 sentencings and plea bargaining, which we could undertake only 
with additional funding.

Increased Training Needs for Larger Federal Criminal Justice System
    Over the last several years, as Congress has devoted increased 
resources to law enforcement, the number of federal judges, 
prosecutors, probation officers, and defense attorneys who require 
training and assistance on how to use the guidelines has increased 
proportionately. The Sentencing Reform Act requires the Commission to 
provide guideline training, in part because training promotes 
uniformity in guideline application and thereby reduces sentencing 
disparity--both central goals of the Act.
    Commission staff provides training on the sentencing guidelines to 
more than 2,500 individuals annually at approximately 50 training 
programs across the country, including ongoing programs sponsored by 
the Commission, the Federal Judicial Center, the Department of Justice, 
the American Bar Association, and other criminal justice entities. Each 
year the Commission cosponsors a National Sentencing Seminar to train 
hundreds of probation officers, prosecutors, and defense attorneys on 
guideline application. New personnel often have no knowledge of the 
federal guidelines system, and seasoned personnel need training in the 
new guidelines promulgated each year. The program is so popular that we 
must turn away people due to the high volume of interest.
    The Commission also plays a major role preparing for and 
participating in the biennial National Sentencing Institute sponsored 
by the Federal Judicial Center and attended by a large number of 
federal judges. The Commission also maintains a telephone HelpLine 
service to answer guideline application inquiries from federal judges, 
probation officers, prosecuting and defense attorneys, and law clerks. 
However, if the Commission is not provided sufficient funding to 
restore personnel in other areas of the agency, its quality of training 
will suffer because its training staff may be diverted to other 
projects.

                               SUMMATION

    The Commission has worked very hard with limited resources to 
respond when called upon to help the President and Congress address 
emerging national priorities such as the threat of terrorism and 
corporate fraud. In many ways these are novel complex areas that 
require the Commission to acquire and maintain additional in-house 
expertise. Moreover, Congress and the Commission continue to identify 
new areas of concern that require substantial resources, such as 
oxycodone offenses, involuntary manslaughter, and sexual offenses 
against children. We cannot undertake a policy agenda of any real 
significance without enhancing our staff power, particularly given the 
large increase in the number of cases sentenced each year which require 
compilation and analysis.
    The requested funding level would enable the Commission to continue 
its work in areas of national importance, enhance staff expertise, 
provide training to a rapidly expanding audience, process its surging 
caseload effectively, continue its monitoring and research of the 
guidelines, and continue to be responsive to the concerns of the 
federal criminal justice community.
                                 ______
                                 

Prepared Statement of Haldane Robert Mayer, Chief Judge, U.S. Court of 
                    Appeals for the Federal Circuit

    Mr. Chairman, I am pleased to submit my statement to the Committee 
for the United States Court of Appeals for the Federal Circuit's fiscal 
year 2004 budget request.
    Our 2004 budget request totals $22,422,000. This is an increase of 
$2,227,000 over the fiscal year 2003 approved appropriation of 
$20,195,000. Twenty-nine percent (29 percent) of the requested 
increase, $646,000, is for mandatory, uncontrollable increases in 
costs. The remaining increase of $1,581,000 is for funding of 
additional positions and other program increases.
Request for Program Increases
    A total of $1,581,000 for program increases is requested. The 
breakdown and further justification for each amount follows. The 
justifications for the program increases are separated into four 
categories: staffing; courtroom renovations; technology advancements; 
and security staffing enhancements.
    A portion of this program increase request, $653,000, was requested 
to cover the cost of thirteen (13) additional Court Security Officers 
(CSOs) for fiscal year 2004. These additional CSOs were requested and 
needed to bring our total CSOs up to current U.S. Marshal Service 
Standards. This requested increase, however, was included in the 
recently enacted Supplemental Appropriation Bill. This amount will 
enable us to begin the recruiting and hiring process in fiscal year 
2003.

Two New Staff Positions
    The court requests $208,000 to cover the cost of two new positions 
for nine (9) months in fiscal year 2004. The positions requested are 
for a Deputy to the Circuit Executive position ($130,000) and a 
Computer Security Specialist ($78,000).
    The position of Deputy to the Circuit Executive has become 
necessary to assist the Circuit Executive with the variety of duties 
assigned to that office. The Deputy would assist in overseeing the 
offices that operate under the direction of the Circuit Executive and 
would act in the absence of the Circuit Executive.
    We also request funding to hire a full-time permanent Computer 
Security Specialist. Upon completion of a formal security review and 
assessment of the court's electronic information system, the National 
Security Agency in August 2000 concluded that the court should hire an 
Information Technology Specialist. This person would monitor and 
protect the security of the court's information system. The Computer 
Security Specialist would ensure that all electronic communications and 
information in judges' chambers and staff offices are protected and 
secure from compromise or unlawful release. Both of these positions 
were requested in our fiscal year 2003 budget request and denied.

Courtroom Renovations
    The court is requesting $170,000 to begin the long-overdue 
renovations of courtrooms to bring them up to 21st Century security and 
technology standards to benefit judges, attorneys, and litigants. There 
have been no upgrades to the courtrooms, with the exception of new 
carpet, since the opening of the courthouse in 1967.
    We have requested funding for this project in our 2001, 2002, and 
2003 budget requests. We have taken our request to GSA as suggested by 
the Subcommittee. At this time, GSA has indicated that they are taking 
every appropriate action to have this project included in their fiscal 
years 2004 and 2005 budgets. Should the court be successful in 
receiving funding through GSA to pay for the renovations of the 
courtroom Congress will be notified that this request for $170,000 is 
no longer necessary.

Improvements in the Court's Courtroom and Courthouse Computer 
        Technology and Security
    We request $490,000 for program advancements in the area of 
technology in the courtrooms, judges' chambers, and staff offices.
    The Judicial Conference of the United States recognized that 
courtroom technologies are a necessary and integral part of courtrooms. 
Based on those findings and the fact that the Administrative Office of 
the United States Courts (AO) currently is implementing this program in 
courts across the country, the court is requesting funding to upgrade 
the courtroom technology in one of its courtrooms. The figure of 
$215,000 was provided to the court by the AO based on its experience to 
date with upgrading courtrooms. Not only would this benefit the 
Judiciary and the court, it would benefit counsel and litigants. One 
phase of this new technology will give counsel the opportunity to argue 
a case offsite while connected to the courtroom as if the attorney were 
in the courthouse, thus cutting expenses for the litigant.
    We also request $205,000 to develop and augment a disaster recovery 
plan for the court's electronic data system. In the event of a major 
disaster, it will be necessary to access the court's computer network 
from a remote site as well as locally. This amount is a one-time cost 
estimate to put this recovery system in place.
    The National Security Agency performed a study of court security in 
2000 and recommended improved computer security hardware and software 
to assist in the detection and prevention of electronic computer 
attacks and intrusions to the court's computer network. The cost of 
upgrading the security of the court's computer system is $70,000.

Increased Security Position
    This court requests $60,000 to cover the cost of hiring one (1) 
Supervisory Level on-site Deputy U.S. Marshal.
    The court requests funding to hire one (1) full-time Supervisory 
Level Deputy U.S. Marshal Inspector to coordinate facilities security 
at the National Courts Building based on this same need for upgraded 
security. The Inspector will report to the Chief Judge, will ensure 
that protection of judges on and off-site is properly coordinated, will 
supervise the court security officers assigned to the National Courts 
Building, and will work with the court security committee on matters 
involving staff and courthouse security.
    Currently the Federal Circuit shares a Deputy U.S. Marshal with the 
United States Court of Appeals for the District of Columbia Circuit and 
the United States District Court for the District of Columbia. The 
shared U.S. Deputy Marshal is assigned to the U.S. District Court for 
the District of Columbia and is located at the District of Columbia 
Circuit courthouse. It is a daunting task and a big assignment for one 
person to cover adequately the security needs of two separate 
courthouses and four separate courts located in different parts of the 
District of Columbia.
    In a March 7, 2003 memorandum to Chief Judges of the U.S. Courts, 
AO Director L. Ralph Mecham emphasized the importance of having a full-
time Deputy U.S. Marshal Inspector assigned to each court. ``It seems 
clear,'' Director Mecham said, ``that in today's high risk environment 
there should be USMS personnel at the local level assigned to security 
responsibilities on a full-time basis.'' As the only United States 
Court of Appeals with national jurisdiction, the Federal Circuit should 
be given the same consideration in the assignment of security personnel 
as the twelve other regional circuits. Indeed, it is hard to understand 
how the USMS can assign a Deputy U.S. Marshal Inspector to the District 
of Columbia Circuit--a regional court of appeals--and direct that 
Inspector to provide security to the Federal Circuit--a national court 
of appeals located across from The White House--on an as-needed basis.
    I also would like to address a statement that was contained in the 
Conference Report for our 2003 budget request. That document contained 
language referring to a reduction in the number of filings at the 
Federal Circuit between 1992 and 2001. Our figures show that total case 
filings for the Federal Circuit for the ten-year period did drop 219 
cases from 1,702 in fiscal year 1992 to 1,483 in fiscal year 2001. That 
drop is consistent with the statement contained in the Conference 
Report. However, the reduction in the court's caseload does not justify 
a reduction in staff for two reasons.
    First, starting with the 1,702 cases in 1992--which represented at 
that time the second highest number of annual case filings since 1982--
the number of total cases filed each subsequent year through 2001 
sometimes increased and sometimes decreased and occasionally exceeded 
1,702. In fiscal year 2002, the Federal Circuit's total filings 
increased to 1,748; this is the third highest number of filings ever 
for the Federal Circuit--nearly 18 percent higher than the 2001 filings 
and 3 percent higher than the 1992 filings.
    The second reason why the reduction of 219 case filings over the 
ten-year period does not justify a reduction in court staff is that the 
reduction does not reflect an important change in the court's workload. 
In short, it ignores how particular categories of cases have increased 
or decreased. Attention to the number of appeals in patent cases from 
district courts is critical when assessing the court's workload. Patent 
cases typically involve complex science and engineering principles, as 
well as multiple issues dealing with patent validity, infringement, 
defenses, counterclaims, and damages. In addition, the patent cases 
often have lengthy trial records and extensive damages. In sum, patent 
appeals typically take much more time than, for example, the court's 
Merit Systems Protection Board (MSPB) cases. Hence, even though case 
filings went down by 219 when comparing 1992 to 2001, appeals from 
district courts--almost all of which are patent cases--went up from 315 
in 1992 (about 18.5 percent of the total cases), to 403 in 2001 (about 
27 percent of the total cases). At the same time, the much easier MSPB 
cases dropped from 789 in fiscal 1992, to 421 in fiscal 2001. And in 
fiscal 2002, when total cases increased nearly 18 percent from 2001, 
district court cases increased 19 percent, to 480, while MSPB cases 
rose only 3 percent, to 435.
    The significant rise over the last 10 years in the number of patent 
infringement cases filed with the court and the nearly 18 percent 
increase in the court's annual filings from 2001 to 2002 warrant an 
increase--not a decrease--in court staff. Further, a careful review of 
the number of support personnel assigned to the Federal Circuit will 
establish that the staff numbers are considerably smaller than other 
courts of appeals.
    I would be pleased, Mr. Chairman, to answer any questions the 
Committee may have or to meet with the Committee members or staff about 
our budget requests.
    Thank you.
                                 ______
                                 
                       NONDEPARTMENTAL WITNESSES

           Prepared Statement of the American Bar Association

    The American Bar Association is centrally concerned with promoting 
improvements in the administration of justice and preserving the 
independence of the judiciary as fundamental to a free society. In 
furtherance of these two objectives, we are submitting this statement 
to address the need for increased compensation for Article III judges 
and to urge Congress to appropriate adequate funds for the State 
Justice Institute. We respectfully request that this statement be 
incorporated into the Subcommittee's record of hearings on fiscal year 
2004 appropriations for Commerce, Justice and State, the Judiciary and 
Related Agencies.

                        STATE JUSTICE INSTITUTE

    In 1984, Congress created the State Justice Institute (SJI) as a 
federally funded, private, non-profit corporation to award federal 
grants to improve the quality of justice in state courts, facilitate 
better coordination between state and federal courts, and foster 
innovative, efficient solutions to common problems faced by all courts. 
It is the only source of federal funding exclusively dedicated to 
helping to meet the needs of our state courts, which hear over 97 
percent of the nation's cases. Since it became operational in 1987, the 
SJI has parlayed a modest amount of federal money into court 
improvement projects that benefit the nation's judicial system in its 
entirety and the public it serves. On behalf of the Association's 
410,000 members, we can unequivocally say that the overwhelming 
consensus in the legal community is that the SJI effectively, 
efficiently and consistently executes its mandate despite a de minimis 
annual budget, which has never exceeded $13.55 million.
    In creating the State Justice Institute, Congress recognized that 
our state and federal courts are separate but interdependent and that 
the quality of justice in this nation depends on the vitality of both 
court systems. Concluding that the federal government has a stake in 
maintaining strong state judicial systems and improving state-court 
partnerships, Congress created SJI to monitor the state judicial 
system, assist in prioritizing the needs of the state courts and award 
small federal grants to foster solutions to critical problems 
confronting the courts. To enable all courts to benefit from federally 
funded projects, Congress required SJI to maximize the impact of each 
grant--even those that provide technical assistance to a court with a 
specific problem--through a variety of techniques, such as maintaining 
readily accessible information clearinghouses to assure that effective 
new approaches are shared with courts nationwide, convening national 
conferences to address emerging justice system issues, and placing 
practical products into the hands of judges and court personnel who can 
most benefit from them. These various strategies have proven effective 
in maximizing the benefits derived from each spent federal dollar and 
avoiding wasteful duplication of effort to solve identical or similar 
judicial administration problems.
    After 15 years of SJI's operation, and out of a renewed concern for 
fiscal restraint in a time of competing budgetary demands, Congress 
requested that the Attorney General of the United States evaluate and 
report back on the effectiveness of the SJI. In November 2002, the 
Attorney General submitted his report to Congress in which he concluded 
that SJI effectively implements its mission with only minimal 
administrative costs. Moreover, the Attorney General reaffirmed the 
wisdom of the 98th Congress by validating the premise on which SJI was 
created. He noted that an important Federal purpose was served by 
supporting SJI's mission to improve the quality of justice in state 
courts, observing that, ``given overlapping state-federal jurisdiction, 
it is in the Federal government's interest to have effective and fair 
state courts, lest litigants turn to Federal courts to resolve matters 
properly within state court responsibilities.''
    The American Bar Association concurs with these core findings. By 
strengthening our state courts, SJI grants strengthen our entire 
justice system. Furthermore, we would like to point out that the 
federal government also has a direct interest in the vitality of our 
state courts because many important federal programs depend on state 
courts for their implementation.
    Subsequent Congresses, including this one, have in fact 
acknowledged the appropriateness of providing federal assistance to 
state court projects by regularly appropriating funds for specific 
state court improvement projects sponsored by individual members. In 
fact, the funds spent on these projects often have exceeded the maximum 
appropriation SJI has ever received. While we do not doubt that such 
funds have been expended for worthy state court projects that have 
improved the administration of justice in a particular jurisdiction or 
state, we do not believe that it is a cost-efficient or effective way 
to provide federal financial support to strengthen our state judicial 
system. In contrast, disseminating federal funds through SJI assures 
that government money is spent on finding solutions to the most 
pressing judicial administration problems and sharing these solutions 
with every state and federal court.
    The conference report accompanying Pub. L. No. 108-7 appropriated 
$3.1 million in funding for SJI for fiscal year 2003 but contained the 
proviso that SJI should obtain future funding from ``bar associations 
and the States, who are the beneficiaries of SJI's work.'' Such a 
proposal is unrealistic and would effectively terminate this highly 
effective program.
    The courts are an integral part of our democratic system of 
government. Their support should come from the public fisc. SJI was 
created to provide federal support for needed improvements to 
supplement state court resources, which are often inadequate because of 
strapped state budgets. Bar associations and other grantee 
organizations, in essence, already contribute their own funds to SJI by 
absorbing some of the cost of any grant activity in which they are 
involved. Furthermore, SJI relies on the dedication and expertise of 
organizations, such as the ABA, to develop and implement programs that 
will strengthen the justice system; and in return, SJI pays for a 
substantial portion of the cost of worthy programs, while grantees 
provide a certain amount of matching funds. In this way, SJI grants not 
only require a sharing of the financial burden, but they also help 
forge essential public-private partnerships to address justice system 
issues.
    In addition, the ABA and other bar associations already make 
substantial financial (in addition to other) contributions to promote 
excellence in the justice system by annually allocating a significant 
amount of their general revenues for judicial system improvements. For 
example, in fiscal year 2004, the ABA alone will spend almost $2.5 
million on such programs and projects.
    In conclusion, terminating funding for the only government-funded 
entity exclusively dedicated to providing federal grants for projects 
to improve state courts makes no sense, especially at a time when our 
courts are facing a nation-wide fiscal crisis. Congress has a strong 
federal interest in strengthening the state courts and maintaining a 
robust justice system as well as a responsibility to implement sound 
fiscal policies. To deny the small sum of $13.5 million to a program 
that is supported by every state supreme court and highly praised by 
the legal community, but authorize appropriations for projects that 
primarily benefit individual state courts, represents a serious fiscal 
miscalculation. For all these reasons, the ABA urges Congress to 
preserve SJI as a federally funded institute and to appropriate 
sufficient funds for fiscal year 2004 for SJI to carry out its mandate. 
The ABA recommends an appropriation of $13.5 million--the amount that 
SJI received in 1996.

Article III Judicial Salaries
    The 108th Congress has inherited a federal salary system for top-
level government officials that is badly in need of reform. This is 
particularly true with respect to the Federal Judiciary.
    The National Commission on the Public Service (otherwise known as 
the ``Volcker Commission'') concurs with this assessment. Composed of 
government leaders from past Administrations, the non-partisan 
Commission recently issued its report, Urgent Business for America: 
Revitalizing the Federal government for the 21st Century, which 
concluded that ``[j]udicial salaries are the most egregious example of 
the failure of federal compensation policies.'' It recommended that 
Congress take immediate steps to substantially raise federal judicial 
pay.
    During the past decade in particular, judges have experienced both 
an absolute loss in purchasing power and a relative decline in 
remuneration as the salaries of peer group members have risen 
dramatically. Despite five salary adjustments since 1993, judges have 
suffered a 10.9 percent decline in the purchasing power of their 
salaries. That judicial pay has not even kept pace with inflation has 
robbed judges of the prospect of salary stability during their tenure 
on the bench.
    Judges freely acknowledge that rendering public service in a highly 
visible and respected role and serving in a lifetime appointment are 
intangible benefits that help compensate for the reduced salary levels 
associated with the bench. Nonetheless, compensation levels for 
attorneys from other work sectors are relevant to the issue of fair and 
adequate judicial compensation.
    While the vast majority of federal judges have the requisite years 
of experience and legal skills that would enable them to command 
compensation similar to that paid to top-notch, seasoned attorneys in 
the private sphere ($400,000 to $800,000 according to the most recent 
surveys conducted by the National Law Journal), it is obviously not 
practical to suggest that Federal judges should be paid that much. The 
salaries of leaders of academia or nonprofit institutions are 
considered more reasonable points of reference because the level of 
education and expertise required of leaders of these institutions and 
the psychic satisfaction derived from holding such jobs are comparable 
to those of Federal judges.
    Associate Justice Stephen Breyer, in testimony submitted to the 
Volcker Commission, stated that the average salary of nonprofit CEOs is 
$212,000--approximately 20 percent higher than that of a Supreme Court 
Justice and about 35 percent higher than that of a federal district 
judge. Further, the differential between federal judicial salaries and 
salaries of leaders in the academic world is even larger: the average 
salary for deans of the twenty-five law schools ranked highest in the 
annual U.S. News and World Report survey was $301,639 and the average 
base salary for full professors at those law schools was $209,571.
    Even though market conditions alone should not be the measure of 
the adequacy of judicial salaries, the widening disparity between 
judicial salaries and those of attorneys with comparable skills 
employed in the private sphere is causing demonstrable harm to our 
nation's Third Branch by deterring excellent candidates from seeking 
judicial appointments and motivating sitting judges to resign 
prematurely from office to enter a more lucrative field.
    Between 1990 and 2003, 77 Article III judges resigned or retired 
from the Federal bench and many of them returned to private practice. 
Fifty-one of the 77 departed judges entered the private practice of law 
and 14 others accepted jobs in related fields. Sixteen of the 77 judges 
departed before reaching retirement age, thereby forfeiting their right 
to salary for life. Premature departures from the bench impose both 
real and intangible costs upon the Third Branch, by compromising 
judicial independence fostered by life tenure and depriving the Federal 
Judiciary of the skills of some of its most capable and experienced 
jurists.
    Inadequate judicial salaries also disadvantage the Federal 
Judiciary in the ``war for talent.'' Judicial pay may not be a 
deterrent to individuals who are independently wealth or who are 
already in public service, where salaries are generally lower, but it 
is a strong disincentive for lawyers in private practice whose varied 
experiences bring a perspective and independence that is vital to the 
judiciary. Our analysis of the occupations held immediately prior to 
the confirmation of all district and circuit court judges appointed 
since 1977 supports this conclusion. For example, during President 
Carter's term of office, 49.5 percent of his district court appointees 
came from the public sector, while 57.6 percent of President Bush's 
district court appointees through the 107th Congress have come from the 
public sector.
    White House Counsel Alberto Gonzales made this same point in an 
interview published in the May 2002 edition of The Third Branch:

    ``We are aware of both young lawyers with family obligations and 
established prominent lawyers with substantial investment in their 
practice and community who feel that they cannot afford to go on the 
federal bench. The Judiciary suffers when it cannot attract top tier 
lawyers for whatever reason.''

    The Federal Judiciary benefits from the collective wealth of 
experience of its jurists who have served in different capacities in 
the public and private sectors. It is enriched by their diverse 
backgrounds and better able to serve the need of all Americans. We 
cannot afford to lose the diversity of the bench that comes from the 
appointment of individuals of varying financial means who have served 
in different capacities in both the public and private sectors.
    In conclusion, while we recognize that there is a compelling need 
for salary reform within all top levels of government, we believe that 
there is an urgent and immediate need to substantially increase 
judicial salaries in order to maintain a stellar judiciary and protect 
one of the pillars of our democracy--Federal judicial independence. We 
urge you to support an appropriation for the Federal Judiciary that is 
sufficient to cover a substantial pay raise for all Article III judges.
                                 ______
                                 

      Prepared Statement of the American Sportfishing Association

    The American Sportfishing Association (ASA) recommends the 
following as the Subcommittee considers appropriations for the National 
Marine Fisheries Service (NMFS) for fiscal year 2004. The American 
Sportfishing Association is a non-profit trade association whose 555 
members include fishing tackle manufacturers, sport fishing retailers, 
boat builders, state fish and wildlife agencies, and the outdoor media.
    The ASA makes these recommendations on the basis of briefings with 
agency staff and from years of experience with fisheries management in 
this Nation. It is important to note that sportfishing provides $116 
billion in economic output to the economy of the United States each 
year. Sportfishing in marine waters alone provides a $31 billion impact 
each year to coastal states.
    Saltwater fishing is the fastest growing sector of recreational 
fishing. Because of this the ASA urges NMFS to continue the pursuit of 
sound management of marine fish stocks by supporting the Regional 
Fishery Management Councils, the States, and the Interstate Marine 
Fisheries Commissions. Collectively, these programs conduct research 
and collect data that is essential for managers to appropriately 
maintain marine stocks and assure that areas are open to anglers. For 
the Regional Fishery Management Councils to carry out the regulations 
of the Magnuson-Stevens Fisheries Conservation and Management Act they 
must be properly funded. The Association recommends funding the 
Regional Councils activities at the $16.032 million level.
    The Association supports the fiscal year 2004 President's request 
for a $3.0 million increase in funds for fisheries stock assessment and 
improvement of data collection, but also recommends an additional $21.2 
million with the goal of funding stock assessment at the $100 million 
level by fiscal year 2008.
    The ASA requests a total of $12.8 million for Fish Statistics--
Economics and Social Science Research. These would include:
  --An increase in base funding for NOAA Fisheries could create a 
        premiere Center for Excellence in Recreational Fisheries 
        Economics. The Center could be housed in NOAA Fisheries and 
        could provide the umbrella for recreational fisheries data 
        collection and economic analysis conducted within NOAA 
        Fisheries and by academia under contract. The Center will serve 
        three primary functions: (1) strategic planning for data 
        collection and analysis; (2) development and application of 
        analytical techniques for measuring the costs, benefits, and 
        impacts of recreational fisheries management; and (3) improved 
        outreach and information sharing to ensure that both fisheries 
        managers and the public receive and understand the data 
        products. The Center will work in concert with and complement 
        the existing NOAA Fisheries recreational fisheries economics 
        program and the Marine Recreational Fisheries Statistics Survey 
        (MRFSS) program. The ASA recommends a $500,000 increase in base 
        funding in fisheries statistics for the Center.
  --The Association urges Congress to appropriate an additional $9.5 
        million in new base funding for fisheries statistics to 
        significantly improve catch and effort data through the NOAA 
        Fisheries' Marine Recreational Fisheries Statistics Survey 
        (MRFSS). Base funding has not increased substantially since the 
        survey's inception in 1979. Improved data collection is central 
        to achieving the rebuilding and management standards called for 
        in the Sustainable Fisheries Act.
  --The ASA recommends Congress increase base funding by $2.8 million 
        for the NOAA Fisheries recreational economics program. This 
        program within NOAA Fisheries is severely understaffed and 
        under-funded. The most basic recreational fishery data is 
        unavailable making NOAA Fisheries unable to fulfill their 
        congressionally mandated requirements to provide the basic data 
        for recreational fisheries management. This additional funding 
        should go directly towards outfitting new Centers with PhD 
        level recreational fisheries economists, improving data 
        collection and conducting expenditure surveys, and conducting 
        critical research.
    The Association urges congress to appropriate $10 million for the 
Atlantic Coastal Fisheries Cooperative Management Act which allows 
government, state agencies, and interstate marine fishery commissions 
to work together in support of fisheries resources. These efforts have 
showed success in stripped bass and weakfish management, and it's 
continued success relies on this level of funding.
    Fish habitat restoration programs would be more cost-effective and 
successful if partnered under a State-Federal cooperative program 
undertaking research and management of fish habitat. ASA is pleased 
with the Administration's budget of $13.22 million for fish habitat 
restoration. Furthermore, we support the continuation of the Charleston 
Bump Billfish Tagging program that serves as an important fish nursery 
for Atlantic Highly Migratory Fish species (AHMF).
    Providing a complete database of information on high priority 
species aids in identification, protection and restoration efforts of 
exploited fish along the Atlantic, Gulf and Pacific coasts. The SEAMAP 
program builds this database and partners with another program, the 
MARFIN program, and together they work to support fishery independent 
research on high priority species. ASA is concerned about the erosion 
of these partnerships and recommends funding for the SEAMAP program at 
$6 million and the MARFIN program also at $6 million ($4 million for 
the Southeast and $2 million for the Northeast).
    The American Sportfishing Association is very concerned with the 
low level of funding for the Anadromous Fisheries Act. Continual 
declines in funding means the needs of most anadromous fish stocks will 
not be met because funding cannot be supported through other federal 
and state funds or the fisheries management community. Therefore, the 
Association urges Congress to fund the Anadromous Fisheries Act grants 
to States at $8 million.
    The ASA is again disappointed in the level of funding for the 
Saltonstall-Kennedy grant program. This program promotes and develops 
fisheries by funding high priority research and development needs. ASA 
urges the Administration to restore this program to the fiscal year 
1999 level of $11.171 million.
    The ASA agrees with the Administration's request to ensure NMFS' 
vessels are in good condition for proper management and research needs. 
These vessels are chartered privately by universities and states, and 
thus their condition is important to the safety of their users.
    Concluding with our NMFS recommendations we would also like to 
comment on some of the other line items in NOAA's budget.
    ASA urges Congress to recognize critical marine resources issues 
and how funding efforts can play a large role in developing new 
technologies. These efforts are stronger with the ability of a 
coalition of federal and state scientists for these critical issues. 
Two important efforts taking place at the Hollings Marine Laboratory 
(HML) and the Fish Cooperative Institute, does important work on marine 
environmental health, biotechnology, and ecototxicology. The 
Association is pleased with the Administration's request to fund the 
HML at $2.5 million and the Fish Cooperative Institute at $750,000.
    The past few years have encountered a large breakout of algal 
blooms resulting in bad pfiesteria seasons. In response to this, effort 
to research and control the problem was largely taken on by the South 
Carolina Harmful Algal Bloom Task Force and was funded by the 
government. The Administration has proposed to terminate this program 
and the ASA urges Congress to continue funding this program at $600,000 
to continue the work on the outbreak of algal blooms.
    Two of the most successful state-federal cooperative efforts to 
improve the quality of our natural resources are the National Estuarine 
Research Reserve (NERR) and Coastal Zone Management (CZM) programs. The 
American Sportfishing Association is pleased with the proposed $16.4 
million for NERR and the $10.012 million for research facilities at 
NERR sites. In addition, we are very pleased with the many efforts of 
these programs ranging from public access to non-point source 
pollution. The ASA also supports the Administration's request for $85 
million for the CZM grants to help states and local communities work to 
improve coastal areas.
    The Coastal Services Center makes valuable contributions toward 
stewardship and provides support to the coastal states in regards to 
advanced coastal decision support systems. This program has yielded 
innovative work in conjunction with state participation and the ASA 
urges funding at the $18 million level.
    One important task of NOAA is to be able to access and treat 
damaged marine resources caused by releases of hazardous substances. 
The Damage Assessment and Restoration Program (DARP) directs these 
efforts and takes on the responsibility of restoring these damaged 
areas as quickly as possible to reduce the amount of loss of fisheries 
and marine habitats. The Association strongly supports the President's 
request for $17.199 million for damage assessment activities and 
restoration efforts of DARP.
    The Sea Grant College Program provides critical research and 
educational opportunities for maintenance and improvement of marine 
resources. The Association recommends funding at the authorized level 
of $73 million and we also disagree with the proposed moving of the 
program to the National Science Foundation. NOAA is more efficient at 
connecting the researchers and their findings to the marine community.
    Finally, Mr. Chairman, the ASA is concerned about NMFS' promotion 
and use of marine reserves to the exclusion of other proven management 
options. This has penalized recreational anglers and is far from a 
proven management tool for marine resources. Public closures should be 
the last management option, not the first. Furthermore, NMFS has 
prepared no standardized implementation guidelines, no conservation 
goals, or long term monitoring plans for the use of marine reserves. 
The ASA requests that funding for the planning and implementation of 
any future marine reserves be halted until management guidelines, such 
as those outlined in the Freedom To Fish legislation, are put in place.
    Mr. Chairman, please make these recommendations part of the record 
for the Subcommittee's 2004 appropriations process.
                                 ______
                                 

           Prepared Statement of the Doris Day Animal League

    Mr. Chairman and members of the Appropriations Subcommittee on 
Commerce, Justice, State and Judiciary, thank you for the opportunity 
to submit testimony on behalf of the 300,000 members and supporters of 
the Doris Day Animal League requesting that the Federal Bureau of 
Investigation assign the crime of animal cruelty its own classification 
in the Uniform Crime Reporting Program.

The Significance of Animal Cruelty as a Crime: ``The Violence 
        Connection''
    Animal cruelty, especially egregious acts, was once viewed as an 
offensive behavior unrelated to other crimes. Now it is recognized as a 
serious crime with important implications for human society. A growing 
body of research, produced over the last thirty years, establishes a 
clear link between animal abuse and human violence. One comprehensive 
study of data from a twenty-year period found that adults convicted of 
animal were more likely than their peers to engage in other forms of 
criminal activities, including violent crimes against humans, property 
crimes, and drug and disorderly offenses. Other studies conducted in a 
number of counties in the United States confirm the overlap between 
committing acts of animal cruelty and engaging in other types of 
criminal behavior. In addition to the association between animal 
cruelty and criminal behavior, there is also evidence that the severity 
of violence against animals can indicate the degree of aggressiveness 
toward human individuals. Research on incarcerated adult males 
demonstrated that the most aggressive inmates had the most violent 
histories of animal cruelty. It is worth noting that in dangerous 
situations such as a hostage taking, the FBI has included a history of 
animal cruelty among the factors used to determine an individual's 
threat level.
    Another important link between animal abuse and human violence, 
with important policy implications, is the co-occurrence of family 
violence and animal abuse. In interview studies with domestic violence 
victims, between 54-71 percent of the women report that their partners 
also harmed or killed the family pet. Child abuse and animal abuse also 
are linked: animal abuse was confirmed in 88 percent of families under 
the supervision of a child welfare agency for physically abusing their 
children.
    In addition to being linked to other types of criminal activity and 
family violence, animal abuse by children signals an important warning. 
The Federal Bureau of Investigation was one of the first to recognize 
the significance of juvenile animal cruelty when it reported that many 
serial killers had abused animals as children. It also has been 
reported that many of the school shooters had engaged in various forms 
of animal cruelty. The National Crime Prevention Council, the 
Department of Education, and the American Psychological Association all 
list animal cruelty as one of the indicators or warning signs of future 
violence. Furthermore, researchers agree that persistent aggressive 
behavior in childhood, termed ``conduct disorder,'' tends to be fairly 
stable trait throughout life and is the single best predictor of later 
criminal behavior. Animal cruelty is one of the symptoms for a 
diagnosis of conduct disorder and therefore can be one of the earliest 
indicators that a child is at risk.
    Not all children who abuse animals will become serial killers, 
school shooters, or criminals as adults. However, research clearly 
suggests that engaging in childhood animal cruelty conditions an 
individual to accept, or engage in, interpersonal violence as an adult.
Responses to ``The Violence Connection''
    Government bodies, professional organizations, and communities have 
responded to information about the animal abuse-human violence 
connection. For example, before 1990, only seven states had felony 
provisions in their animal anti-cruelty statutes; now 41 states and the 
District of Columbia have felony-level laws. As of this date, 24 states 
have provisions in their animal anti-cruelty statutes that permit or 
mandate psychological counseling for offenders.
    In addition to changes in state animal cruelty statutes, awareness 
of the significance of animal abuse as a crime has resulted in the 
development of a number of programs. ``Safe Pet'' programs, in which 
the pets of domestic violence victims are provided safekeeping so that 
women feel free to leave dangerous situations, are being instituted in 
communities throughout the United States. Animal control officers are 
being trained to ``cross report,'' that is, to look for signs of child 
and spousal abuse when investigating an animal abuse or neglect 
complaint. Intervention programs for children and adults who abuse 
animals have been developed and mental health professionals are being 
trained in this area of treatment.

Modifying the Reporting Categories of the Uniform Crime Reporting 
        Program
    The Uniform Crime Reporting (UCR) Program is a nationwide effort in 
which crime statistics are collected from nearly 17,000 city, county, 
and state law enforcement agencies. During 2000, the participating 
agencies represented 94 percent of the total U.S. population. The 
current UCR Program classifies offenses in two groups, Part I and Part 
II. Crimes vary from criminal homicide in Part I to vagrancy and curfew 
and loitering laws in Part II. Not only law enforcement, but also 
criminologists, sociologists, legislators, municipal planners, the 
media, and others interested in criminal justice use the statistics for 
research and planning purposes. However, under the current UCR Program, 
there is no category to report crimes of animal cruelty, even though 
animal abuse often is an indicator of other types of criminal behavior, 
including family violence.
    Assigning the crime of animal cruelty to its own classification 
would have a number of advantages. Law enforcement agencies, 
researchers, policy planners, and others would be better able to 
understand the factors associated with animal abuse, track trends at 
the state and national level, and determine demographic characteristics 
associated with animal abuse--all of which would assist in promoting 
more effective intervention and prevention strategies to interrupt the 
cycle of violence. Finally, assigning animal cruelty its own category 
would assist law enforcement agencies by helping them identify and 
track individuals with histories of violence.

Proposed Report Language for the Senate Subcommittee on Commerce, 
        Justice, State and Judiciary Appropriations
    We respectfully request that the Subcommittee consider the 
following report language for the Commerce, Justice, State and 
Judiciary Appropriations bill:
    ``The Committee commends the Federal Bureau of Investigation (FBI) 
for its successful Uniform Crime Reporting (UCR) Program. Currently, 
there is no individual category for animal cruelty in the UCR Program 
even though animal cruelty is a crime in all states, certain acts of 
animal cruelty are felonies in 41 and the District of Columbia, and it 
is linked to other types of crime, including family violence. 
Therefore, there is no way to systematically track such cases. The 
current practice is to rely on the limited ability of local animal 
control agencies to monitor animal cruelty cases or literally check 
local court records. Given the current arrangement, state and national 
trends are impossible to identify.
    ``The Committee directs the FBI to provide the necessary resources 
to assign the crime of animal cruelty its own classification in the UCR 
Program by adding this category to its software and other reporting 
mechanisms. This will enable law enforcement agencies and researchers 
to track trends and better understand factors associated with 
committing animal abuse, allowing more effective interventions. 
Additionally, individuals who are more likely to commit other serious 
crimes could be identified.
    ``The Committee further directs the FBI to provide a report to the 
Committee by December 2003 on the integration of this category into its 
UCR Program.''

                             REFERENCE LIST

    Ascione, F. A. (1993). Children who are cruel to animals: A review 
of research and Implications for developmental psychopathology. 
Anthrozoos, 6, 226-247.
    Ascione, F. A. (1998). Battered women's reports of their partners' 
and their children's' cruelty to animals. Journal of Emotional Abuse, 
1, 119-133.
    Ascione, F. A. (2001). Animal abuse and youth violence. Office of 
Juvenile Justice and Delinquency Prevention (OJJDP), Juvenile Justice 
Bulletin, September.
    Boat, B. (1999). Abuse of children and abuse of animals: Using the 
links to inform child assessment and protection. In F. R. Ascione & P. 
Arkow (Eds.), Child abuse, domestic violence, and animal abuse: Linking 
the circles of compassion for prevention and intervention (pp. 83-100). 
West Lafayette, Indiana: Purdue University Press.
    Deviney, E., Dickert, J., & Lockwood, R. (1983). The care of pets 
within child abusing families. International Journal for the Study of 
Animal Problems, 4, 321-329.
    Felthous, A.R. & Kellert, S.R (1987). Childhood cruelty to animals 
and later aggression against people: A review. American Journal of 
Psychiatry, 144, 710-717.
    Flynn, C. P. (2000). Why family professionals can no longer ignore 
violence toward animals. Family Relations, 49, 87-95.
    Jory, B. & Randour, M.L. (1999). The AniCare Model of Treatment for 
Animal Abuse (adult version). Printed and distributed by the Doris Day 
Animal Foundation and Psychologists for the Ethical Treatment of 
Animals.
    Kellert, S.R. & Felthous, A. R. (1985). Childhood cruelty toward 
animals among criminals and noncriminals. Human Relations, 38, 1113-
1129.
    Luke, C., Arluke, A., Levin, (1997) Cruelty to animals and other 
crimes: A study by the MSPCA and Northeastern University. Boston: 
Massachusetts. Society for the Prevention of Cruelty to Animals.
    Randour, M.L., Krinsk, S., & Wolf, J. (2002). AniCare Child: An 
Approach for the Assessment and Treatment of Childhood Animal Abuse. 
Printed and distributed by the Doris Day Animal Foundation and 
Psychologists for the Ethical Treatment of Animals.
                                 ______
                                 

   Prepared Statement of the University Corporation for Atmospheric 
                                Research

    On behalf of the University Corporation for Atmospheric Research 
(UCAR) and the university community involved in weather and climate 
research and related education, training and support activities, I 
submit this written testimony for the record of the U.S. Senate 
Committee on Appropriations, Subcommittee on Commerce, Justice, State 
and the Judiciary. This testimony pertains to the fiscal year 2004 
budget request for the National Oceanic and Atmospheric Administration 
(NOAA). UCAR is a consortium of 66 universities that manages and 
operates the National Center for Atmospheric Research (NCAR) and 
additional atmospheric and related sciences programs. In addition to 
its member universities, UCAR has formal relationships with 
approximately 100 additional undergraduate and graduate schools 
including several historically black and minority-serving institutions, 
and 40 international universities and laboratories. The National 
Science Foundation (NSF) and other federal agencies, including NOAA, 
support UCAR.

                              INTRODUCTION

    As one of the world's foremost scientific and environmental 
agencies, NOAA has responded to the needs of the nation in designing 
its budget and program to protect citizens, the environment and the 
economy. Last year the NOAA leadership conducted a nationwide program 
review, asking for input from NOAA's many stakeholders. Those responses 
are reflected in the subsequent strategic plan, ``New Priorities for 
the 21st Century.'' We applaud the NOAA leadership for its vision, and 
urge the Committee to support the critical, evolving work of this 
agency. Within the NOAA fiscal year 2004 budget request, I would like 
to comment on the following offices and programs:
Office of Oceanic and Atmospheric Research (OAR)
    The OAR supports a network of scientists and environmental research 
laboratories in order to provide the sound science upon which decision 
makers can frame effective regulations to solve environmental problems 
and upon which economic growth can be managed in an environmentally 
sound manner. The President's request for OAR overall is down 2 percent 
from the fiscal year 2003 final appropriation. However, since the 
fiscal year 2004 request, which preceded the fiscal year 2003 final 
numbers, was based on the fiscal year 2003 request and reflected a 
major increase for OAR, we believe that the Administration is 
demonstrating strong commitment to the work of OAR. Therefore, I ask 
the Committee to provide OAR with a five percent increase and fund the 
Office at $384.0 million in fiscal year 2004.
    U.S. Weather Research Program (USWRP).--USWRP is an interagency 
program that is dedicated to making forecasts of high-impact weather 
more specific, accurate, and reliable, thereby saving lives and 
property, and helping regional economies. I urge the Committee to 
support the fiscal year 2004 request of $4.0 million for the USWRP Base 
and $1.3 million for THORPEX, an international program focused on 
extending weather predictability from the current 7 days to two weeks 
and double the rate of improvements in forecast skill by 2012, and to 
support the request of $7.3 million for the High Impact Weather Program 
component of the USWRP.
    U.S. Weather Research Program--Collaborations Fund.--Through the 
Office of Oceanic and Atmospheric Research (OAR) and the National 
Weather Service (NWS), NOAA bears a great responsibility for advancing 
the nation's weather research and the application of that research to 
improve weather forecasts and warnings. The best way to accomplish this 
is to form working alliances, or partnerships, between the scientific 
expertise that exists within NOAA and the country's broad expertise 
within the university and private sector communities. Competitive 
proposals and a peer review process through the establishment of a 
Collaborations Fund would ensure that the best research results and 
technologies are achieved for the resources available. I urge the 
Committee to establish the USWRP Collaborations Fund with a new 
allocation of $20 million in NOAA's Office of Oceanic and Atmospheric 
Research, in order to leverage the research and research applications 
expertise of this country toward accelerated implementation of the 
USWRP goals.
    Climate and Global Change Program.--The climate variability 
predictions provided by the Climate and Global Change Program are 
absolutely critical to related national and international policy 
formulation and to efforts to adapt to and mitigate the effects of 
long-term climate change. The Program is an integral part of the 
interagency U.S. Global Change Research Program (USGCRP) that is the 
major U.S. contributor to the world's understanding of the global 
climate system. The President's request for this program is $73.0 
million, down 2.3 percent from the fiscal year 2003 final 
appropriation. I urge the Committee to provide the Climate and Global 
Change Program $74.7 million at the very least, the level at which this 
program is funded for fiscal year 2003.
    Phased-Array Radar.--NOAA requests $1 million to develop new 
technologies for forecasting and detecting tornadoes and other forms of 
severe weather and to disseminate this information to emergency 
managers, the media, and the general public for appropriate action. 
This initiative will provide the meteorological research community with 
the first dedicated phased-array radar facility to collect real-time 
data around the clock. When fully implemented, tornado warning lead 
times could be doubled from 11 to a life-saving 22 minutes. I urge the 
Committee to support the $1 million request for the Phased-Array Radar.
    Climate Observations and Services Program.--I urge the Committee to 
fund the $55.3 million fiscal year 2004 request for Climate 
Observations and Services. A robust observing system is perhaps the 
most critical tool for the development of more accurate weather and 
climate models. The increase for this program will build the climate 
observing system required to support the research, modeling, and 
decision support activities for the Administration's Climate Change 
Research Initiative (CCRI). I further urge the Committee to support the 
President's fiscal year 2004 request of $42.0 million for CCRI, our 
nation's key research contribution to the global issue of climate and 
environmental change.

Laboratories and Joint Institutes
    The 12 NOAA Research Laboratories, located across the country with 
field stations around the world, conduct an integrated program of 
fundamental research, technology development, and services to improve 
understanding of the Earth and its oceans and inland waters, the lower 
and upper atmosphere, and the space environment. The Laboratories have 
established formal collaborative agreements with universities and non-
profit research institutions to form 11 Joint Institutes to study the 
earth's oceans, inland waters, intermountain west, atmosphere, arctic, 
and solar-terrestrial environment. I would like to comment on the 
fiscal year 2004 request for the following laboratories:
    Forecast Systems Laboratory (FSL).--The fiscal year 2004 request 
terminates the nation's Wind Profiler Network, 35 stations that provide 
hourly wind profiles from the ground to 53,000 feet to operational 
weather forecasters and weather models. These data provide invaluable 
support in the forecasting of tornadoes, winter storms and flash 
floods. I strongly urge the Committee to restore $4.1 million for the 
Wind Profiler Network and to thereby fund the Forecast Systems 
Laboratory $11.5 million for fiscal year 2004.
    Boulder Facilities Operations.--Six of the 12 NOAA Research 
Laboratories, one NESDIS Data Center, one of OAR's 11 Joint Institutes, 
and the Denver Forecast Office of the National Weather Service (NWS) 
are all housed in Boulder at the David Skaggs Research Center. The 
fiscal year 2003 Omnibus Bill eliminated rent, maintenance, utility, 
and security charges assessed by the General Services Administration 
for this building. It is critical that the Committee support Boulder 
Facilities Operations at $4.5 million as requested for fiscal year 
2004.
    Adjustments to Base.--Failure to fund unavoidable increases to the 
base budget, such as inflationary costs, changes in costs for salaries, 
and good and services, can have a significant impact on the operations 
of an agency, and affect productivity over time when those increases 
have to be funded out of research programs. I urge the Committee to 
restore the $4.5 million that was cut from Adjustments to Base in the 
fiscal year 2003 Omnibus Bill, thereby increasing the fiscal year 2004 
request to $10.0 million.
    Space Environment Center (SEC).--The SEC is the national and world 
warning center for disturbances that can affect people and equipment 
working in the space environment. It provides real-time monitoring and 
forecasting of solar and geophysical events, conducts research in 
solar-terrestrial physics, and develops techniques for forecasting 
solar and geophysical disturbances. SEC's Space Weather Operations 
Center is jointly operated with the U.S. Air Force because DOD's smart 
weapons' accuracies, as well as the ability of ships, planes and 
special forces units to fix their positions using GPS, are adversely 
affected by space weather events. The fiscal year 20043 Omnibus Bill 
cut the SEC by $2.25 million, an amount that seems to have been 
restored in the fiscal year 2004 request. I urge the Committee to fund 
the fiscal year 2004 request of $8.3 million for the Space Environment 
Center.

National Weather Service (NWS)
    As the nation's vulnerability to weather related hazards rises 
because of increasing population, enhanced infrastructure, and 
population movement toward cities in threatened regions such as coastal 
areas, the NWS strives to mitigate impacts through improved forecasts 
and warning systems for the protection of life and property. There are 
few agency programs that impact our daily lives and the health of our 
economy as profoundly as does the NWS. I urge the Committee to support 
the fiscal year 2004 NWS overall request of $820 million. Within NWS, I 
would like to comment on the following programs:
    NWS Adjustments to Base.--As the largest and most labor-intensive 
service within NOAA--70 percent of its budget dedicated to labor--the 
NWS depends on full funding of personnel cost increases in order to 
sustain current service levels. In the past, reductions in ATBs 
resulted in cutbacks in NWS research grants and forecaster training 
programs. It is critical that the Committee support the $20.1 million 
to fund adjustments to base.
    NOAA Center for Weather and Climate Prediction.--The Department of 
Commerce, the State of Maryland, and academic community advisors have 
all agreed on a shared vision to build a Center of Excellence for 
Environmental Research, Education, Applications and Operations in order 
to meet NOAA operational requirements to create research synergy in 
weather and climate prediction; to accelerate transition of new science 
and technology into operations; and to enhance recruitment 
opportunities. I ask that the Committee support the request of $10.4 
million for this new state-of-the-art facility.
    Advanced Hydrologic Prediction System (AHPS).--Seventy-five percent 
of all Presidential Disaster Declarations involve flood damages. AHPS 
will provide emergency managers with critical data with which to save 
lives and property, manage energy and water resources more efficiently, 
and enable a more rapid infusion of scientific advances into the 
system. Within the NWS Operations, Research, and Facilities account, I 
urge the Committee to support the fiscal year 2004 request of $6.1 
million.
    Aviation Weather.--Weather is the cause of approximately 200 U.S. 
general aviation pilot fatalities per year and over 70 percent of U.S. 
commercial airline delays that result in tremendous cost to customers 
and companies. The Aviation Weather program increases the number of 
aviation weather observations; transitions research into operations 
more efficiently; and develops and implements new training programs for 
forecasters, pilots, and air traffic controllers. I urge the Committee 
to support the NWS Aviation Weather initiative at the requested $2.5 
million for fiscal year 2004.
    NWS Weather and Climate Supercomputing and Backup (Systems 
Acquisition).--The critical nature of the separate request for NWS 
supercomputing backup cannot be exaggerated. The NWS forecast computing 
capabilities are located at a single facility which means that the 
nation's severe weather watches and warnings all emanate from one 
location that could fail for a number of reasons including faulty 
technology, power supply problems, or terrorism. The redundancy, 
provided by supercomputing backup, covers those risks and is a critical 
component of the Department of Commerce Homeland Security Initiative. 
When not in emergency use, the backup provides needed computing time 
for weather and climate research. I urge the Committee to support the 
fiscal year 2004 request of $19.3 million for NWS Weather and Climate 
Supercomputing and $7.2 million to implement the backup computer 
system.
    Radiosonde Replacement Network.--There is little doubt that the 
obsolete infrastructure for this principle data source on upper air for 
all weather forecasts and models will fail by 2005 if it does not 
receive adequate modernization funding now. I urge the Committee to 
support the fiscal year 2004 request of $6.9 million for the Radiosonde 
Replacement Network in the NWS Procurement, Acquisition and 
Construction (PAC) account.
    Advanced Weather Interactive Processing System (AWIPS).--This 
interactive computer system integrates all meteorological and 
hydrological data, and all satellite and radar data. AWIPS is a 
fundamental source of data for the research community and, when 
combined with NEXRAD radar, it enables the NWS to issue far more 
effective weather warnings and forecasts for the entire country. In the 
NWS Operations, Research and Facilities (ORF) account, I urge the 
Committee to support the fiscal year 2004 proposed amount of $37.6 
million for AWIPS. In the NWS Procurement, Acquisition and Construction 
(PAC) account, I urge the Committee to fund AWIPS at the $16.3 million 
request at least, an amount level with fiscal year 2003.
    Cooperative Observer Network.--The network's 11,000 weather 
observation sites are used to maintain the country's climate record and 
to provide data to NWS local field offices and to university 
laboratories. I urge the Committee to support the request of $1.9 
million, the same as the fiscal year 2003 enacted level, for 
Cooperative Observer Network maintenance.
    Central Forecast Guidance.--The NWS Central Forecast Guidance line 
provides most of the funding for the National Centers for Environmental 
Prediction (NCEP), nine centers within the NWS that all work together 
toward the common goal of using data for weather predictions and 
seasonal forecasts in order to save lives, protect property, and create 
economic opportunity. Forecasts that reach the public via media outlets 
originate at NCEP. In recent years, the centers have not been supported 
adequately to process weather data and transfer it into operations. In 
order to address this problem, I urge the Committee to support the 
fiscal year 2004 request of $45.1 million, a 3.7 percent increase over 
the fiscal year 2003 enacted level.

National Environmental Satellite, Data and Information Service (NESDIS)
    NESDIS operates this country's space-based component of the global 
environment observing system, and manages the world's largest 
collection of atmospheric, geophysical, and oceanographic data 
representing 85 percent of the data used by the NWS for forecasting 
activities. Society depends on NESDIS for data that affect numerous 
activities including distributing energy supplies, maintaining 
satellite communications, developing global food supplies, increasing 
aviation safety, managing natural resources, protecting citizens from 
natural hazards, and transporting our nation's armed forces. I urge the 
Committee to support the fiscal year 2004 request of $91.2 million for 
NESDIS Environmental Satellite Observing Systems, an increase of $5 
million over the fiscal year 2003 enacted level.
    The rich data collected by the NESDIS satellite systems are 
acquired, processed, analyzed, archived and disseminated through the 
Data Information Management Systems to commerce, industry, agriculture, 
science and engineering, the general public, and government at all 
levels. While the Satellite Systems function collects data, the Data 
Centers and Information Services function makes those data useful and 
available, so I am disturbed to see that the data management function 
is recommended for a $5.3 million decrease. An increase in funding for 
the observing systems that collect data obviously should be coupled 
with an increase in funding for the management systems that make the 
collected data useful and accessible. I urge the Committee to 
appropriate, at the very least, $5.3 million above the request in order 
to restore the NESDIS Data Centers and Information Services to the 
fiscal year 2003 enacted level of $64.4 million in fiscal year 2004.

Educational Partnership Program with Minority Serving Institutions
    Under-representation of minorities in earth science disciplines in 
this country is a serious issue that must be addressed by multiple 
programs across multiple agencies and institutions. I urge the 
Committee to support the $15.0 million request for NOAA's Educational 
Partnership Program with Minority Serving Institutions.
    On behalf of the UCAR community, I want to thank the Committee for 
the important work you do for U.S. scientific research, infrastructure, 
education, and training. We understand and appreciate that the nation 
is undergoing significant budget pressures at this time, but a strong 
nation in the future depends on the investments we make in science and 
technology today. We appreciate your attention to the recommendations 
of our community concerning the fiscal year 2004 budget of the National 
Oceanic and Atmospheric Administration.
                                 ______
                                 

Prepared Statement of the National Federation of Community Broadcasters

    Thank you for the opportunity to submit testimony to this 
Subcommittee regarding the appropriation for the Public 
Telecommunications Facilities Program (PTFP). As the President and CEO 
of the National Federation of Community Broadcasters, I speak on behalf 
of over 200 community radio stations and related organizations across 
the country. This includes the new Low Power FM service that has 
recently been authorized by the FCC. NFCB is the sole national 
organization representing this group of stations, which provide service 
in both the smallest communities and largest metropolitan areas of this 
country. Nearly half of our members are rural stations, and half are 
minority controlled stations.
    In summary, the points we wish to make to this Subcommittee are 
that NFCB:
  --Supports funding for PTFP that will cover the on-going needs of 
        public radio and television stations.
  --Supports funding for conversion of public radio and television to 
        digital broadcasting.
  --Requests report language to ensure that PTFP utilizes any digital 
        funds it receives for radio as well as television needs.
    Community radio supports $70 million in funding for the Public 
Telecommunications Facilities Program in fiscal year 2004.--Federal 
support distributed through the PTFP is essential to continuing and 
expanding the public broadcasting service throughout the United States. 
It is particularly critical for rural stations and for those stations 
serving minority communities. PTFP funds new stations, expanding the 
reach of public broadcasting to rural areas and to audiences that are 
not presently served by existing stations. In addition, it replaces 
obsolete and worn out equipment so that the existing stations can 
continue to broadcast high quality programming. Finally, with the 
advent of digital broadcasting, PTFP funding will help with the 
conversion to this new technology.
    We support $70 million in funding to ensure that both the on-going 
program--currently funded in fiscal year 2003 at $43.4 million--will be 
continued, and that the increase to $70 million will be available to 
help cover the cost of radio and television converting to digital 
transmission. This increase in funding is particularly urgent this year 
because the FCC has now endorsed a standard for digital radio 
broadcasting and the television conversion deadline is imminent.
    Federal funding is particularly critical to stations serving rural 
and underserved audiences which have limited potential for fundraising 
because of sparse populations, limited number of local businesses, and 
low income levels. Even so, PTFP funding is a matching program so that 
the federal money is leveraged with a local commitment of funds. This 
program is a strong motivating factor in raising the significant money 
necessary to replace, upgrade and purchase expensive broadcast 
equipment.
    Community radio supports funding for conversion to digital 
broadcasting for public radio and television.--While public 
television's digital conversion needs are more immediate, the Federal 
Communications Commission has now approved a standard for digital radio 
transmission. The initial conversion of radio stations is being 
concentrated in 13 seed markets. The Corporation for Public 
Broadcasting (CPB) is using some of its previously appropriated digital 
funds to help public stations in these markets convert to digital, 
conduct additional research on AM radio conversion, and work with radio 
receiver manufacturers to build in the capacity to receive a 2nd audio 
channel. The development of 2nd audio channels will potentially double 
the public service that public radio can provide, particularly to 
unserved and underserved communities. This initial funding from CPB 
will only help a small number of the stations that will ultimately need 
to either convert or be left behind while the world goes digital.
    We appreciate Congress' direction to the Corporation for Public 
Broadcasting that it utilize its digital conversion fund for both radio 
and television and ask that you ensure that the PTFP funds are used for 
both media. Congress stated, with regard to the fiscal year 2000 
digital conversion funds:
    The required (digital) conversion will impose enormous costs on 
both individual stations and the public broadcasting system as a whole. 
Because television and radio infrastructures are closely linked, the 
conversion of television to digital will create immediate costs not 
only for television, but also for public radio stations (emphasis 
added). Therefore, the Committee has included $15,000,000 to assist 
radio stations and television stations in the conversion to 
digitization . . . (S. Rpt. 105-300)
    NFCB requests that the funding for digital conversion be committed 
in advance to facilitate the orderly transition of a very 
individualized process--a process that will be different at each 
station. Advance funding will give the system time to raise the 
substantial matching funds that will be necessary and to know what 
additional funds will be needed to complete the process.
    Thank you for your consideration of our testimony.
                                 ______
                                 

 Prepared Statement of the Regional Information Sharing Systems (RISS) 
                                Program

    The Regional Information Sharing Systems (RISS) Program 
respectfully requests that Congress appropriate for fiscal year 2004, 
$50 million to continue their support in combating drug trafficking and 
organized crime.
    These funds will enable RISS to continue identifying, targeting, 
prosecuting, and removing criminal conspirators involved in terrorism 
activity, drug trafficking, organized criminal activity, criminal 
gangs, and violent crime that span multijurisdictional boundaries. 
Funds will allow RISS to continue to support the investigation and 
prosecution efforts of over 6,300 local, state, and federal law 
enforcement member agencies across the nation comprising over 675,000 
sworn law enforcement personnel.
    Through funding from Congress, RISS has implemented and operates 
the only secure Web-based nationwide network--called riss.net--for 
communications and sharing of criminal intelligence by local, state, 
and federal law enforcement agencies. Funds will allow RISS to upgrade 
the technology infrastructure and resources to support increased use 
and reliance on the system by member law enforcement agencies and 
support the integration of other systems connected to riss.net for 
information sharing and communication. Using Virtual Private Network 
technology, the law enforcement users access the public Internet from 
their desktop and have a secure connection over the private riss.net 
intranet to all RISS criminal intelligence databases and resources. 
RISS member law enforcement agencies accessed riss.net an average of 
3.9 million times per month during fiscal year 2002. Riss.net is a 
proven, highly effective system that improves the quality of criminal 
intelligence information available and puts it in the hands of the law 
enforcement officers to make key decisions at critical points in their 
investigation and prosecution efforts.
    The Office of Justice Programs (OJP), Regional Information Sharing 
Systems (RISS) is a federally funded program comprised of six regional 
intelligence centers. The six centers provide criminal information 
exchange and other related operational support services to local, 
state, and federal law enforcement agencies located in all fifty 
states, the District of Columbia, U.S. territories, Canada, Australia, 
and England. These centers are:
    Middle Atlantic-Great Lakes Organized Crime Law Enforcement Network 
(MAGLOCLEN).--Delaware, District of Columbia, Indiana, Maryland, 
Michigan, Pennsylvania, Ohio, New Jersey, and New York, as well as 
Canada and England.
    Mid-States Organized Crime Information Center (MOCIC).--Illinois, 
Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South 
Dakota, and Wisconsin, as well as Canada.
    New England State Police Information Network (NESPIN).--
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and 
Vermont, as well as Canada.
    Regional Organized Crime Information Center (ROCIC).--Alabama, 
Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North 
Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and 
West Virginia, as well as Puerto Rico and the U.S. Virgin Islands.
    Rocky Mountain Information Network (RMIN).--Arizona, Colorado, 
Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming, as well as 
Canada.
    Western States Information Network (WSIN).--Alaska, California, 
Hawaii, Oregon, and Washington, as well as Canada, Guam, and Australia.
    RISS is a crucial force in fighting terrorism, increased violent 
criminal activity by street gangs, drug traffickers, sophisticated 
cyber criminals, and emerging criminal groups that require a 
cooperative effort by local, state, and federal law enforcement. 
Interagency cooperation has proven to be the best method to combat the 
increasing criminal activity in these areas. The RISS Centers are 
filling law enforcement's need for rapid, but controlled sharing of 
information and intelligence pertaining to known or suspected drug 
traffickers and criminals. Congress funded the RISS Program to address 
this need as evidenced by its authorization in the Anti-Drug Abuse Act 
of 1988.
    The success of RISS has been acknowledged and vigorously endorsed 
by the International Association of Chiefs of Police (IACP), as well as 
other national law enforcement groups such as the National Sheriff's 
Association (NSA) and the National Fraternal Order of Police (NFOP). 
These groups have seen the value of this congressional program to law 
enforcement nationally and have worked with the National Association of 
Attorneys General (NAAG), the National District Attorneys Association 
(NDAA), and the National Criminal Justice Association (NCJA) to further 
strengthen the awareness of RISS.
    RISS is operating current state-of-the-art technical capabilities 
and systems architecture that allow local, state, and federal law 
enforcement member agencies to interact electronically with one another 
in a secure environment. The RISS system has built-in accountability 
and security. The RISS secure intranet (riss.net) protects information 
through use of encryption, smart cards, Internet protocol security 
standards, and firewalls to prevent unauthorized access. The RISS 
system is governed by the operating principles and security and privacy 
standards of 28 CFR Part 23 (Criminal Intelligence Systems Operating 
Policies). The technical architecture adopted by RISS requires proper 
authorization to access information, but also provides flexibility in 
the levels of electronic access assigned to individual users based on 
security and need-to-know issues. Riss.net supports secure e-mail and 
is easily accessible using the Internet. This type system and 
architecture is referenced and recommended in the General Counterdrug 
Intelligence Plan (GCIP).
    The RISS Program promotes federal, state, local, and tribal law 
enforcement information sharing. RISS is the mechanism that state and 
federal law enforcement agencies are using to leverage their resources 
and existing systems for sharing sensitive but unclassified 
information. RISS has entered into a partnership with the High 
Intensity Drug Trafficking Areas (HIDTA) to electronically connect all 
of the HIDTA's to riss.net for communications and information sharing. 
Currently, 15 HIDTA's are electronically connected as nodes to riss.net 
and RISS is working to complete the connection of the remaining 
HIDTA's. Nine state agencies are currently connected as nodes on 
riss.net. An additional 15 state law enforcement agencies are pending 
connection as nodes to share information, including terrorism and 
homeland security information, using riss.net.
    The National Drug Intelligence Center (NDIC) is a member of RISS 
and uses the RISS network as a communications mechanism for publishing 
counterdrug intelligence products to federal, state, and local law 
enforcement members. RISS and the El Paso Intelligence Center (EPIC) 
officials entered into a partnership and have electronically connected 
EPIC as a node to riss.net to capture clandestine laboratory seizure 
data from RISS state and local law enforcement member agencies. RISS is 
currently working with the U.S. Department of the Interior, Bureau of 
Land Management (BLM), to connect all of the BLM offices to riss.net. 
Other systems connected to riss.net are the Law Enforcement 
Intelligence Unit (LEIU) and the National Drug Pointer Index (NDPIX). 
The National White Collar Crime Center (NW\3\C) and the Financial 
Crimes Enforcement Network (FinCEN) are currently pending connection to 
riss.net as nodes.
    During 2002, officials of the FBI Law Enforcement Online (LEO) 
system and the RISS system achieved interconnection of the two systems 
for distribution of sensitive but unclassified homeland security 
information to authorized users of both LEO and RISS. In addition, the 
Executive Office of the United States Attorneys (EOUSA) and the RISS 
Centers initiated actions to connect staff to riss.net at each of the 
93 U.S. Attorneys' Offices (USAO) Anti-Terrorism Task Forces throughout 
the United States.
    RISS is also expanding its resources to deliver the RISS Anti-
Terrorism Information Exchange (RISS ATIX) to provide access through 
riss.net to additional groups of users for secure interagency 
communication, information sharing, and dissemination of terrorist 
threat information. These additional groups of users, referred to as 
RISS ATIX participants, will include public service, public safety, 
emergency management, utility, and other critical infrastructure 
personnel that have traditionally not been served by RISS. RISS ATIX 
participants will be assigned restricted access to certain specific 
RISS services and resources as appropriate in consideration of their 
roles with regard to terrorism and disasters.
    All of these above mentioned state and federal agencies are 
integrating with and using the riss.net secure nationwide 
communications backbone to share criminal intelligence and alerts and 
homeland security information within their own agencies and among the 
other agencies. RISS needs funds to purchase hardware and software to 
support these agency system connections to riss.net to continue to 
provide and improve access for sharing information for law enforcement 
agencies across the country. In addition, RISS has developed RISS ATIX 
to provide first responders and critical infrastructure personnel with 
a secure means via riss.net to communicate, share information, and 
receive terrorist threat information. RISS is operating an 
unprecedented nationwide network for communicating critical information 
in a secure environment to both law enforcement and other first 
responders. To support the increased needs of these personnel and 
continue to maintain the RISS system and demand for RISS services and 
resources, RISS is requesting an increase in funding to $50 million for 
2004.
    RISS continues to promote interagency investigations by improving 
capabilities for member agencies to quickly and easily access RISS 
databases and resources by expanding the enrollment of member agencies 
for access to riss.net through distribution of security hardware and 
software. In view of today's increasing demands on federal, state, and 
local law enforcement budgets, requests for RISS services have risen. 
The Institute for Intergovernmental Research (IIR) report on the RISS 
Program showed that as of December 31, 2002, the number of criminal 
subjects maintained in the RISSIntel intelligence databases for all 
Centers combined was 1,079,369 with 258,907 new subjects being added in 
2002. The combined databases of all six RISS Centers also maintained 
data on 1,712,307 locations, vehicles, weapons, and telephone numbers 
for a grand total of 2,791,676 data entries available for search. For 
the twelve-month period January through December 2002, the total number 
of inquiries by law enforcement member agencies to the RISSIntel 
database for all six regional intelligence centers combined was 
766,845. These inquiries resulted in hits or information to assist law 
enforcement agencies in their criminal cases. All RISS Centers combined 
delivered 19,777 analytical products to member agencies in support of 
their investigation and prosecution efforts in 2002.
    This support of law enforcement has had a dramatic impact on the 
success of their investigations. Over the three-year period 2000-2002, 
RISS generated a return by member agencies that resulted in 10,024 
arrests, seizure of narcotics valued at almost $141 million, seizure of 
over $13 million in currency, and recovery or seizure of property 
valued at over $25 million. In addition, almost $3 million was seized 
through RICO civil procedures. In the 22-year period since 1980 when 
the Program was fully implemented, the RISS Program has assisted its 
member agencies with their investigations. Results of these 
investigations have amounted to over $12.7 billion dollars in 
recoveries at a total cost that approximates 2.72 percent of that 
amount, or a $37 return for every dollar spent.
    The Bureau of Justice Assistance administers the RISS Program and 
has established guidelines for provision of services to member 
agencies. The RISS regional intelligence centers are subject to 
oversight, monitoring, and auditing by the U.S. Congress, the General 
Accounting Office, a federally funded program evaluation office; the 
U.S. Department of Justice, Bureau of Justice Assistance; and local 
government units. The Intelligence Systems Policy Review Board also 
monitors the RISS Centers for 28 CFR Part 23 compliance.
    It is respectfully requested that the Congress fully fund the RISS 
Program as a line item in the congressional budget, in the requested 
amount of $50 million. Local and state law enforcement, who depend on 
the RISS Centers for information sharing, training, analytical support, 
funding, and technical assistance, are anticipating increased 
competition for decreasing budget resources. The state and local 
agencies require more, not less, funding to fight the nation's crime/
drug problem.
    We are grateful for this opportunity to provide the committee with 
this testimony and appreciate the support this committee has 
continuously provided to the RISS Program.
                                 ______
                                 

              Prepared Statement of The Ocean Conservancy

    The Ocean Conservancy (TOC) is pleased to share its views regarding 
the marine conservation programs in the budgets of the National Oceanic 
and Atmospheric Administration's (NOAA) and the Department of State's 
Bureau of Oceans and International Environmental and Scientific 
Affairs. TOC requests that this statement be included in the official 
record for the fiscal year 2004 Commerce, Justice, State, the Judiciary 
and Related Agencies bill. TOC cannot overstate the importance of this 
Subcommittee in advancing marine conservation and greatly appreciates 
the funding provided in fiscal year 2003. TOC recognizes the 
constraints this Subcommittee faces this year and urges you to continue 
to make ocean conservation a top priority.

            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

Conservation Trust Fund
    Passed by Congress in 2000, the Conservation Trust Fund (also 
referred to as the Conservation Spending Category) is a groundbreaking 
bipartisan accomplishment and represents a major advancement in 
conservation funding. TOC is grateful that this Subcommittee has upheld 
its commitment to funding the Conservation Trust Fund over the last 
three fiscal years and calls for your continued commitment in fiscal 
year 2004 by dedicating $520 million for critical ocean and coastal 
conservation activities within NOAA. We also urge you to protect the 
integrity of the trust fund by limiting its uses for net increases 
rather than a substitute for base funding.

Coral Reef Conservation
    NOAA plays a critical role in protecting coral reefs, serves on the 
successful Interagency Coral Reef Task Force and has major 
responsibilities for implementing the National Action Plan to Conserve 
Coral Reefs. Through monitoring, mapping, restoration and outreach 
activities, NOAA works with state, territory, local and other parties 
to reduce land-based pollution, overfishing, diseases, and other 
threats to coral reefs. TOC is disappointed that the Subcommittee cut 
funding for coral reefs in fiscal year 2003 and respectfully requests 
that at a minimum, funding be restored in fiscal year 2004. In 
addition, $2 million above the Administration's request is desperately 
needed to support local efforts to protect coral reefs and should be 
directed to the Coral Reef Conservation Fund established by the Coral 
Reef Conservation Act of 2000 (Public Law 106-562). This funding will 
leverage an additional $2 to $4 million in matching resources through 
partnerships with local, state and territory governments, universities, 
the private sector and others to fund on-the-ground coral reef 
conservation and management activities in the United States and its 
territories. This funding is one of The Ocean Conservancy's highest 
priorities.

National Ocean Service
            Marine Sanctuary Program
    Our nation's 13 sanctuaries encompass almost 18,000 square miles of 
our most significant marine resources. TOC requests the Subcommittee 
provide $37.8 million for sanctuary operations, $2 million above the 
Administration's request. This increase is critical to reducing 
staffing shortages and supporting conservation, community outreach, 
research, and education programs, and updating sanctuary management 
plans as required by law. TOC also supports the Administration's 
request of $10 million for construction, particularly for interpretive 
facilities to educate the general public about the role of the federal 
government in managing our nation's ocean and coastal resources.

            Marine Protected Areas (MPAs)
    TOC greatly appreciates this Subcommittee's $1 million increase in 
fiscal year 2003 to support NOAA's MPAs initiative and requests an 
additional $1 million increase in fiscal year 2004. This $5 million 
will allow NOAA to work more effectively with federal and state 
agencies and other partners to acquire data for the ongoing MPA 
inventory and support the recently formed Marine Protected Areas 
Advisory Committee and its working groups. This increase will allow 
NOAA to better assist stakeholders, including states, the National Park 
Service and others by holding regional workshops and providing training 
and technical assistance to determine how best to design and implement 
MPAs.

            Nonpoint Pollution Implementation Grants
    Nonpoint source pollution continues to be the nation's largest 
source of water pollution. There were over 13,410 closings and 
advisories at U.S. beaches in the year 2001. TOC supports the 
Administration's fiscal year 2004 request of $10 million to help 
coastal states and territories, with approved nonpoint plans, continue 
to make progress in implementing their priority activities.

            National Marine Fisheries Service
    The Ocean Conservancy remains concerned about the state of our 
nation's fisheries. As the $100 million for fisheries disaster 
assistance in fiscal year 2003 demonstrates, we must do a better job 
managing our fisheries. Below is what TOC believes are NMFS's most 
pressing needs.

            Expanding Fisheries Stock Assessments
    The status of roughly two-thirds of our commercially caught ocean 
fish populations is unknown due in large part to lack of funding for 
basic research and regular stock assessments. We applaud the 
Subcommittee's decision to increase stock assessment funding to $17 
million in fiscal year 2003 and urge that this trend continues with $25 
million in fiscal year 2004. Doing so will help reduce the backlog in 
research days-at-sea and give managers baseline information critical to 
managing our fisheries. This funding is one of The Ocean Conservancy's 
highest priorities.

            Fisheries Observers
    Along with stock assessments, reliable, objective information about 
how many fish are being caught, directly and as bycatch, is crucial to 
responsible management of our fish populations. Observers are a key 
means of collecting such information. TOC recommends $25 million for 
fisheries observers in fiscal year 2004, $5 million above the 
Administration's request and encourages the Subcommittee to prioritize 
the following three programs.

            Bycatch Observers
    TOC fully supports the Administration's $2.8 million initiative to 
reduce bycatch. The $2 million within this initiative for bycatch 
observers will support approximately 2,000 observer days-at-sea, 
thereby enhancing the collection of bycatch data from commercial and 
recreational fishing vessels. Two fisheries in the Gulf of Mexico in 
desperate need of increased observer coverage are the bottom longline 
fishery and the shrimp otter trawl fishery. Longlines capture a variety 
of ocean wildlife besides the reef fish they target, including marine 
birds, sea turtles and soft corals. The shrimp fishery is believed to 
be the largest fishery in the Gulf of Mexico, but efforts to monitor 
the effort and catch are limited. With revised turtle excluder device 
regulations going into effect in August, it is critical that an 
observer program be established.

            National Observer Program
    While encouraged by the Administration's request to expand the 
national observer program, TOC believes that $7 million is still 
inadequate and recommends additional support for NMFS to meet its 
national observer needs.

            West Coast Observers
    TOC respectfully requests that the Subcommittee, at the minimum, 
return funding for West Coast Observers to the fiscal year 2002 level 
of $4.0 million.

            Enforcement/Surveillance and Vessel Monitoring System
    In addition to better data, enforcement of our fishery management 
laws is critical. Unfortunately, lack of funding has hampered NMFS's 
ability to kept pace with the need. TOC urges $46.9 million in fiscal 
year 2004 to address this shortfall so that more officers can be hired 
to better enforce our fisheries management laws. TOC supports expanding 
the Vessel Monitoring System (VMS) program. While we are pleased that 
the Subcommittee provided a slight increase in VMS in fiscal year 2003, 
we urge that the President's request of $7.4 million be fully supported 
in fiscal year 2004.

            Essential Fish Habitat (EFH)
    Given the need to better understand the impacts of fishing and 
other activities on EFH, and the need to more fully comply with the 
Magnuson-Stevens Fishery Conservation and Management Act's requirement 
to minimize impacts to those habitats, TOC believes that increased 
funding is crucial and requests $12.5 million in fiscal year 2004.

            Atlantic Coast Cooperative Statistics Program
    TOC greatly appreciates the Subcommittee's support of $2 million in 
fiscal year 2003 for this unique cooperative state and federal 
fisheries data collection program. We request $3 million in fiscal year 
2004 so that this program can be expanded and better implemented along 
the East Coast, thereby helping to ensure that data collection methods 
are more consistent and reliable.

            Highly Migratory Shark Fisheries Research Program
    This effective multi-regional collaborative effort conducts 
research on shark and ray populations in the Gulf of Mexico, the 
Atlantic, and the Pacific. Information developed from this program has 
provided critical information for assessing the status of shark 
populations and informing better management. TOC greatly appreciates 
the Subcommittee's rejection of the Administration's proposed cut in 
fiscal year 2003 and requests at least level funding in fiscal year 
2004.

            Pacific Highly Migratory Species Research
    TOC supports funding for this program, believes the 
Administration's request of $750,000 is inadequate and requests $1.5 
million in fiscal year 2004. Specifically, funding is needed to conduct 
stock assessments and biological studies and improve bycatch mitigation 
techniques for these fisheries.

            Marine Mammal Protection
    TOC believes the lack of adequate resources has severely hampered 
NMFS's ability to effectively implement the MMPA and requests $9.1 
million in fiscal year 2004, $2 million above the Administration's 
request. This increase is necessary to fund top priority studies 
identified by the take reduction teams: to design and implement fishery 
management plans that will not endanger marine mammals; conduct 
research on population trends, health, and demographics; and to carry 
out education and enforcement programs. It would also allow research 
into the causes of strandings and die-offs and identification of 
mitigation measures to prevent such deaths in the future.

            Bottlenose Dolphin Research
    In response to the more than 100 bottlenose dolphin mortalities in 
the gillnet fishery off North Carolina (over four times allowable 
levels), the Atlantic Bottlenose Take Reduction Team was established in 
2001. TOC recommends $3 million in fiscal year 2004 to reduce dolphin 
mortalities by refining population estimates, conducting bycatch 
estimates and increasing observer coverage.

            Endangered Species
    NMFS bears significant responsibility for administering the 
Endangered Species Act and is responsible not only for the recovery of 
already-listed species such as Northern Atlantic Right Whales (see 
below), smalltooth sawfish, Steller sea lions, and all species of sea 
turtles found in U.S. waters, but also for responding to listing 
petitions in a timely fashion, consulting with federal agencies on 
proposed actions that may affect listed species, designating critical 
habitat, and implementing recovery plans. TOC is concerned about NMFS's 
ability to meet its responsibilities under the ESA and respectfully 
requests the Subcommittee increase NMFS's ESA base funding by $2 
million to meet its fiscal year 2004 demands.

            North Atlantic Right Whales
    With approximately only 300 North Atlantic Right Whales still 
alive, funding is needed to improve our understanding of right whales 
and to develop fishing technologies to reduce entanglements. TOC thanks 
the Subcommittee for its support of $10 million in fiscal year 2003 and 
requests level funding in fiscal year 2004.

                          DEPARTMENT OF STATE

Bureau of Oceans and International Environmental and Scientific Affairs
            International Fisheries Commission Account
    TOC requests $200,000 for the State Department to support 
implementation of two landmark agreements, the Inter-American 
Convention for the Protection and Conservation of Sea Turtles (IAC) and 
the Memorandum of Understanding on the Conservation and Management of 
Marine Turtles and their Habitats of the Indian Ocean and South East 
Asia (IO). To date, nine nations, including Brazil, Costa Rica, 
Ecuador, Honduras, Mexico, the Netherlands, Peru, and Venezuela have 
ratified the IAC. To date, 23 countries have signed the IO agreement. 
Since ratifying the IAC and becoming a signatory of the IO agreement in 
2000, the United States has played a leading role in the establishment 
of these instruments and continued leadership and support will ensure 
their early momentum continues.

                        MARINE MAMMAL COMMISSION

    TOC requests that the Subcommittee support the Marine Mammal 
Commission at $1.895 million in fiscal year 2004, per the 
Administration's request.

                       ANTI-ENVIRONMENTAL RIDERS

    TOC urges this Subcommittee to not attach any anti-environmental 
rider to this or any other appropriations bill. In the past, riders 
have been used by Members of Congress to rollback environmental 
protection and prevent NOAA from advancing marine conservation.
    These programs and issues are of the utmost importance to the 
stewardship of the nation's living marine resources. We greatly 
appreciate your support for these programs in the past and look forward 
to continued, responsible funding for these programs in fiscal year 
2004. Thank you for considering our requests.
                                 ______
                                 

               Prepared Statement of The Asia Foundation

    The importance and continuing relevance of the Asia Foundation's 
mission and mandate have been underscored by the events of September 11 
and the war on terrorism: to develop institutions of governance, 
including constitutional frameworks, legislative branch and judiciary; 
support civil discourse and conflict resolution; expand economic 
opportunity to improve the quality of life and give more people a stake 
in stability; and promote better understanding between the United 
States and the countries of Asia.
    The Asia Foundation is gratified by the confidence of the Congress 
in its programs, as demonstrated by an increased appropriation of 
$10.44 million for fiscal year 2003, $1 million above the 
Administration's request. While the Administration has endorsed the 
work of The Asia Foundation by requesting an appropriation of $9.25 
million for fiscal year 2004, the Foundation respectfully hopes that 
the Congress will once again add to its funding, given the unparalleled 
new challenges facing Asia and The Asia Foundation's distinctive 
capacity to address them. As the Subcommittee knows, The Asia 
Foundation implements concrete programs in Asia that improve governance 
and legal reform, protect human rights, promote economic reform and 
encourage peaceful, cooperative international relations.
    In the face of growing anti-Americanism and the threats of rising 
extremism in countries with predominantly Muslim populations in Asia, 
where over 70 percent of the world's Muslims live, it is more important 
than ever to address the root causes of persistent poverty, lack of 
opportunity, and loss of faith in local leaders and institutions. These 
new circumstances in Asia highlight the importance and value of The 
Asia Foundation's programs. The Foundation is the only American 
organization with a distinctive history of fifty years of presence and 
engagement in Asia, especially in Afghanistan, Pakistan, and Indonesia, 
the front line states in the war on terrorism.

                                OVERVIEW

    The United States and Asia both face new challenges, complicated by 
the war on terrorism, the war in Iraq and the instability likely to 
occur in its aftermath. More than ever, the United States must support 
political stability, and economic reform, and give attention to 
countries where recent events have exacerbated U.S. bilateral 
relations, in countries that have been traditional allies of the United 
States, as well as in the countries with predominantly Muslim 
populations in Asia. Working together with Asian organizations as a 
trusted partner through a network of 17 offices in Asia, The Asia 
Foundation is the only longstanding American nongovernmental, 
nonpartisan organization with local credibility, a nuanced 
understanding of the issues facing each country, and unparalleled 
access and relationships with government, nongovernmental groups, and 
the private sector. In addition to the importance of these programs in 
the lives of people of these countries, the Foundation's efforts also 
make an important and tangible contribution to public diplomacy for the 
United States.

                     THE ASIA FOUNDATION'S MISSION

    The Asia Foundation's core objectives are central to U.S. interests 
in the Asia-Pacific region.
  --Democracy, human rights and the rule of law: developing and 
        strengthening democratic institutions and encouraging an 
        active, informed and responsible non-governmental sector; 
        advancing the rule of law; and building institutions to uphold 
        and protect human rights, including women's rights and 
        opportunity;
  --Open Trade and Investment: supporting open trade, investment and 
        economic reform at the regional and national levels;
  --Peaceful and Stable Regional Relations: promoting U.S.-Asian 
        dialogue on security, regional economic cooperation, law and 
        human rights.
    In the past, this Committee has encouraged the Foundation's grant 
making role, and we remain faithful to that mission. The Foundation's 
hallmark is to make sequential grants to steadily build and strengthen 
institutions, develop leadership, and advance policy reforms in Asia. 
Foundation assistance supports training, technical assistance, and seed 
funding for new, local organizations, all aimed at promoting reform, 
building Asian capacity, and strengthening U.S.-Asia relations. 
Foundation grantees can be found in every sector in Asia, leaders of 
government and industry and at the grass roots level, in the 
increasingly diverse civil society of Asia. The Foundation is 
distinctive in this role, not only providing the technical assistance 
necessary, as in the case of the drafting of the Afghan constitution, 
but also in providing grants that cover nuts and bolts necessities to 
support that effort, such as reference materials, equipment and 
administrative support costs for the Constitutional Commission. The 
Asia Foundation is a well recognized American organization, but its 
programs are grounded in Asia, helping to solve local problems in 
cooperation with Asian partners.

                                PROGRAMS

    Examples of programs include:
  --Legislative Development.--The Foundation has contributed to the 
        development of legislatures in 17 countries in Asia through 
        technical assistance, training members and staff and 
        facilitating interaction with the nongovernmental sector. The 
        Foundation is the only American organization providing 
        legislative training on responsible legislative practice, and 
        orientation for all four newly elected provincial assemblies in 
        Pakistan. The Foundation is also the only American organization 
        providing technical assistance to the Constitutional Commission 
        in Afghanistan for the drafting of the new constitution, the 
        public consultation and Constitutional Loya Jirga process.
  --Civil Society.--The Foundation is the single largest supporter of 
        the nongovernmental sector in the Asian countries in which we 
        operate. The Foundation builds the capacity of organizations, 
        encourages public participation and works to improve the 
        regulatory environment for NGOs. In Cambodia, the Foundation 
        continues to be the largest supporter of human rights, 
        environment and research and policy NGOs in Cambodia. The 
        Foundation's Pakistan programs support community based 
        organizations that provide educational services in areas where 
        none exist, particularly in the economically distressed border 
        areas of the Northwest Frontier Province (NWFP). The Foundation 
        also supports new NGO activities in Afghanistan, such as 
        ASCHIANA which provides education for girls and young women 
        denied schooling under the Taliban through a cooperative 
        project with the National Geographic Society.
  --Human Rights, Conflict and Islam.--The Foundation's human rights 
        programs promote the protection and advancement of human rights 
        through support of nongovernmental and governmental human 
        rights efforts at the local, regional and national levels. The 
        Foundation's programs focus on human rights education, the 
        development of monitoring groups, forensic training to 
        investigate past abuses, media training, guides on 
        international human rights standards, conflict reporting for 
        journalists, programs to prevent trafficking and violence 
        against women and alternative dispute resolution programs in 
        conflict areas. The Foundation's twenty year history of working 
        with mainstream Muslim groups in Indonesia, Pakistan and 
        Mindanao in the Philippines makes it uniquely positioned to 
        encourage programs that promote moderate views, religious 
        tolerance, peace, conflict management and the rights of women 
        under Islam, including the use of Islamic scriptures to 
        communicate messages of tolerance and non-violence. These 
        innovative and sensitive programs can only be accomplished 
        through an on the ground knowledge of the context facing 
        mainstream Muslims, and through partnerships built on trust. 
        The Foundation gives special attention to the troubled areas of 
        Indonesia through support for local human rights efforts in 
        Aceh, Papua and most recently, in the Maluku Islands. Programs 
        include media campaigns through radio and television by 
        moderate groups to promote pluralism and tolerance in conflict 
        prone areas and the utilization of mosque youth networks to 
        educate and strengthen networks for democracy and pluralistic 
        Islam.
  --Legal Reform.--In East Timor, the Foundation provided technical 
        assistance for the drafting of the constitution and new 
        legislation, and for increased access to justice for citizens, 
        by involving civil society and public consultation in the law 
        making process. In China, the Foundation supports legal aid 
        services and popular legal education in some of China's poorest 
        provinces, including those with minority populations such as 
        Yunnan and Xinjiang, and for millions of migrant women workers 
        in Guangdong. In Nepal, the Foundation piloted mediation 
        projects in western Nepal, areas under the heavy influence of 
        the Maoist rebels, and continues to expand community mediation 
        programs, legal reform within the courts, establishment of 
        legal information systems, and the development of watchdog 
        citizens' groups to raise awareness of corruption and 
        misconduct. The Foundation supports reform of the Supreme Court 
        in Indonesia, which has included civil society input in an 
        unprecedented step to reform case assignment, audit its 
        procedures and processes, and improve the quality of the 
        judicial appointment process.
  --Economic Growth and Opportunity.--Small and medium enterprises are 
        a vital engine for economic growth, providing employment and 
        opportunity for millions throughout the region. The 
        Foundation's programs help to reform the environment for small 
        business growth in Indonesia, Bangladesh, Thailand, and Sri 
        Lanka by removing policy barriers and regulatory red tape, 
        reducing corruption, and providing a voice for small 
        entrepreneurs through support for business associations and 
        business-government dialogue. The Foundation funds efforts to 
        improve corporate governance in Korea, China, Japan, and the 
        Philippines.
  --International Relations.--The Foundation continues to invest in 
        young leaders through diplomatic training programs in U.S. 
        universities for Chinese foreign affairs staff, fellowships for 
        Vietnamese and Indian diplomats, and study programs for 
        Southeast Asian young leaders. Programs also include support 
        for the Council for Security Cooperation in the Asia Pacific 
        (CSCAP), training programs for compliance with trade agreements 
        and the WTO for Chinese and Vietnamese officials, and track II 
        programs on cross-straits relations and Northeast Asian 
        security.

                               CONCLUSION

    As the preceding examples of The Asia Foundation's work emphasize, 
the Foundation is a field-based organization that supports projects in 
Asia that build the capacity of Asian institutions and support reform 
efforts, while at the same time maintaining close links with the U.S. 
foreign policy community. We are first and foremost a grant making 
organization. The Foundation has consistently received national 
recognition for its efficient grant-to-operating ratio, reflecting its 
commitment to maximizing the impact of its programs in Asia, while 
keeping expenses low. We are not a research organization or an academic 
institution, nor are we Washington based. We operate on the ground in 
Asia as an accepted, trusted partner and supporter of Asian reform 
efforts that simultaneously support and reinforce American political, 
economic, and security interests. We partner in our programs with 
American and international public and private organizations to leverage 
our resources and make investments pay off. The Foundation's 
partnership with the Microsoft Corporation on the Cambodian Information 
Centers, the first project of its kind to expand Internet and media 
resources to all 22 provinces of the country, is but one example.
    Public funding is essential to the Foundation's mission. While the 
Foundation has made gains in expanding private funding, the flexibility 
and reliability that public funding lends to the Foundation's efforts 
are critical. As an organization committed to U.S. interests in Asia, 
we can only be successful if potential private donors understand that 
the U.S. government continues to support our efforts in the region. 
Furthermore, private funds are almost always tied to specific projects 
(as are USAID funds for which the Foundation competes) and do not 
replace public funding, either in scale or flexibility. Moreover, the 
flexibility afforded by U.S. government appropriated funds enables the 
Foundation to respond quickly to fast-breaking developments and program 
opportunities, as demonstrated by our programs related to the needs of 
the Ministry of Women's Affairs in Afghanistan in 2001 and the National 
Human Rights Commission office in Aceh, during the height of the 
violence in the conflict-prone province in 2002.
    Budget constraints resulted in significant reductions in the 
Foundation's annual appropriation in 1996. The current requested level 
for fiscal year 2004 is still well below the Foundation's $15 million 
annual appropriation during the decade prior to 1996. The $15 million 
level has been authorized consistently by the Congressional authorizers 
in recent years. We have worked hard to manage our budget, reduce staff 
and expenditures, increase our efficiency, and diversify our funding 
sources. We have struggled to maintain our country office presence in 
Asia, although budget cuts did force closure of the Malaysia office in 
1996.
    But commitment to a field operation is not without risk, as seen in 
the situation facing U.S. embassies abroad. Now more than ever, the 
Foundation and its supporters believe that its critical and most 
important asset is its field office network in Asia, enabling the 
Foundation to address critical development and reform on the ground, 
especially in critical front line states such as Pakistan, Afghanistan, 
and Indonesia. Increased security measures to protect Foundation staff 
have been necessary, and Foundation offices all have contingency 
evacuation measures in place. Maintaining overseas offices costs more 
than maintaining operations within the United States and the new 
demands to ensure adequate security have added to this cost. Today, we 
face serious budgetary constraints. We cannot forsake the safety of our 
staff, but at the same time, we are, as always, committed to ensuring 
that the maximum possible amount of appropriated funds are dedicated to 
programs on the ground.
    In closing, we believe that we have an opportunity and the 
obligation to demonstrate America's strong commitment to working with 
Asian leaders to assure the security and well being of the people of 
Asia. The Asia Foundation's programs represent a distinctive and 
positive American response to the challenges facing Asia today, 
contributing to the development of stable societies and advancing the 
interests of the United States in the region. At a time of rapid change 
and uncertainty, additional funding would enable the Foundation to 
expand its role and its programs to help meet these challenges.
                                 ______
                                 

         Prepared Statement of the Investment Company Institute

    The Investment Company Institute \1\ appreciates this opportunity 
to submit testimony to the Subcommittee in support of the fiscal year 
2004 Appropriations request for the Securities and Exchange Commission 
(SEC). The Institute would like to commend the Subcommittee for its 
consistent past efforts to assure adequate resources for the SEC.
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    \1\ The Investment Company Institute is the national association of 
the American investment company industry. Its membership includes 8,929 
open-end investment companies (``mutual funds''), 553 closed-end 
investment companies and 6 sponsors of unit investment trusts. Its 
mutual fund members have assets of about $6.322 trillion, accounting 
for approximately 95 percent of total industry assets, and 90.2 million 
individual shareholders.
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    Mutual funds are one of the primary savings and investment vehicles 
for middle-income Americans. Today, more than 95 million investors in 
over 54 million U.S. households own mutual fund shares. Since 1990, the 
percentage of U.S. retirement assets held in mutual funds has more than 
quadrupled. Moreover, most mutual fund investors are ordinary 
Americans; the median household income of fund shareholders is 
approximately $62,000. These millions of average Americans deserve 
continued vigilant regulatory oversight of mutual funds. For this 
reason, sufficient funding of the SEC should be a priority. The 
Institute urges Congress to provide appropriations at a level 
sufficient to ensure the SEC's ability to fulfill its regulatory 
mandate.
    The Administration's fiscal year 2004 budget proposes SEC funding 
at a level of $841.5 million. This greatly exceeds last year's 
appropriation of $711.7 million. The Institute supports this enhanced 
level of funding to support the SEC's operations, especially those of 
the Division of Investment Management, which regulates the mutual fund 
industry. Such resources will help the SEC to carry out its many 
important initiatives, which include, among other things, adopting 
requirements for improved shareholder reports, analyzing the 
feasibility of requiring new compliance related rules for investment 
companies and investment advisers, finalizing rules to combat money 
laundering, and finalizing amendments to the mutual fund advertising 
rules.
    The recommended enhanced level of funding also will permit the SEC 
to monitor compliance with the many significant new requirements 
adopted as a result of the Sarbanes-Oxley Act of 2002, which include, 
among others, disclosure regarding codes of ethics for senior executive 
officers and the presence of financial experts on audit committees, 
certification of financial and other information, independence 
standards for public company auditors, and standards of conduct for 
corporate attorneys. Moreover, it will permit the SEC to fulfill its 
mandate to oversee the operation of the Public Company Accounting 
Oversight Board (PCAOB), including the ratification of fundamental 
rules and procedures for the PCAOB. We also are pleased that H.R. 658/
S. 496, ``The Accountant, Compliance, and Enforcement Staffing Act of 
2003,'' has been introduced in both the House and the Senate. This bill 
would permit the SEC more flexibility in its hiring process, making it 
easier for the SEC to hire the staff it needs to carry out these 
additional responsibilities.
    Several important SEC initiatives indicate an enhanced workload for 
the Division of Investment Management. First, the Division will be 
responsible for monitoring compliance with the new requirements related 
to proxy voting. Second, the Division will be responsible for providing 
the SEC with a report on the hedge fund industry, assisting with SEC 
hearings to be conducted in connection with this endeavor, and 
analyzing the need for, and potentially developing, new regulations 
related to hedge funds. Third, the Division will be instrumental in 
responding to Congressional inquiries related to mutual fund issues. 
These important initiatives, which will affect millions of American 
investors, will require additional staff to see that they are properly 
analyzed and to develop appropriate recommendations.
    Adequate funding is also needed for the SEC's new enhanced risk-
based inspection program, which began in fiscal year 2003 and will 
continue in fiscal year 2004. For investment companies and investment 
advisers, this means that those with relatively higher risk profiles 
will be examined every two years, while all remaining firms will be 
examined no less frequently than every four years. These more frequent 
inspections are a significant improvement over the five-year inspection 
cycle for investment advisers and investment companies that existed 
prior to fiscal year 2003, and the SEC's appropriations should be 
sufficient to continue this important initiative.
    Finally, adequate funding is essential to the SEC's efforts to 
educate investors. The SEC's Internet website contains many sources of 
important information for investors, including an on-line publication 
explaining mutual funds and investor alerts that help investors avoid 
scams and securities frauds. These and other SEC programs assist 
investors to understand the capital markets and establish realistic 
expectations about market performance. This is an integral part of the 
agency's mission to protect investors.
    In order to accomplish these worthy objectives and to continue to 
function as an effective regulatory agency, we support that the SEC be 
funded at the level requested by the Administration and supported by 
Chairman Donaldson.
    We appreciate your consideration of our views.
                                 ______
                                 

                 Prepared Statement of American Rivers

            NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

    This year, American Rivers was joined by more than 400 national, 
regional and local organizations concerned with river conservation 
throughout the United States \1\ in calling for significantly increased 
funding for the following programs in the Commerce, Justice, State and 
the Judiciary (CJS) Appropriations bill. I urge that these requests be 
incorporated in the CJS Appropriations bill for fiscal year 2004.
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    \1\ These groups have endorsed the ``River Budget for fiscal year 
2004'', a report of national funding priorities for local river 
conservation. A list of groups endorsing the River Budget can be viewed 
at http://www.americanrivers.org/riverbudget/default.htm
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Federal Salmon Plan for the Columbia and Snake rivers
    Several Members of Congress from the Northwest, as well as the 
Administration, have pledged to work to restore twelve Endangered 
Species Act listed stocks of Snake and Columbia river salmon without 
partially removing the lower four Snake River dams. Congress can help 
honor that commitment by funding the necessary salmon recovery 
measures. More than two years since the release of the 2000 Federal 
Salmon Plan for the Columbia and Snake rivers, federal agencies have 
failed to fulfill nearly three-quarters of its requirements.
    The Salmon Plan relies primarily on improving tributary and estuary 
habitat and reforming hatchery and harvest practices. While over 500 
fisheries scientists and most conservationists believe that partial 
removal of the lower Snake River dams must be the cornerstone of a 
larger strategy to recover Snake River salmon, many elements of the 
Salmon Plan are also necessary to achieve salmon recovery.
    If the Salmon Plan's non-breach recovery package is not funded and 
implemented, or if these actions do not yield the needed biological 
benefit for Snake River stocks, the plan contemplates seeking 
congressional authorization--after a ``check-in'' this September--to 
partially remove the four lower Snake River dams or pursue other 
stronger recovery measures.
    Inadequate federal funding is a major reason that implementation of 
the Salmon Plan has fallen so far behind. Full funding for fiscal year 
2004 will require $529.3 million distributed among ten different 
federal agencies through five different appropriations bills. The CJS 
Appropriations bill governs funding for the National Marine Fisheries 
Service (NMFS), which is charged with pursuing and administering the 
Salmon Plan's crucial science and monitoring activities, as well as 
implementing hatchery and harvest reform measures. The administration 
has proposed increasing the NMFS budget for Columbia River salmon by 
approximately 50 percent this year, from the fiscal year 2003 level of 
$26.2 million to $39.7 million in fiscal year 2004. While this increase 
would be helpful, internal NMFS documents estimate that fully 
implementing the Salmon Plan would require an increase of closer to 200 
percent.
    To ensure full development of the scientific standards, reforms, 
and restoration activities required by the Federal Salmon Plan, 
Congress should fund NMFS Columbia Basin salmon programs at $69.8 
million.

Pacific Coastal Salmon Recovery Fund
    Pacific salmon are a national treasure with enormous economic, 
cultural, and environmental significance in the states of Washington, 
Oregon, California, Idaho, and Alaska. A century ago, salmon were an 
anchor of the region's economy. Unfortunately, past and present 
mismanagement of our rivers, lands, and salmon fisheries have caused 
populations of salmon to decline dramatically over the past century, 
and 26 runs of Pacific salmon and steelhead are now listed under the 
Endangered Species Act.
    One important program aimed at restoring imperiled runs of chinook, 
coho, sockeye, and chum salmon, as well as steelhead trout, is the 
Pacific Coastal Salmon Recovery Fund, funded through the National 
Oceanic and Atmospheric Administration. For the past three years, this 
program has provided much-needed assistance to state, local, and tribal 
governments in Washington, Oregon, California, and Alaska for salmon 
recovery projects. This year we urge Congress to make the State of 
Idaho and Snake River salmon and steelhead eligible to benefit from 
this program as well.
    By increasing funding for the Pacific Coastal Salmon Recovery Fund 
in fiscal year 2004, Congress can help restore this economically, 
culturally, and ecologically valuable resource and help the Northwest 
states and local communities to adopt and embrace the measures needed 
to restore Pacific salmon and steelhead. Restoring salmon will also 
allow the United States to satisfy treaty obligations with Northwest 
Indian tribes and Canada.
    We urge Congress to increase funding for the Pacific Coastal Salmon 
Recovery Fund to no less than $200 million in fiscal year 2004.

Fisheries Habitat Restoration
    The fisheries habitat provided by estuaries and coastal wetlands 
serves many essential functions for communities across the nation. 
Eighty to 90 percent of all recreational fish catch and 75 percent of 
all commercial harvest depends upon healthy coastal and estuarine 
habitats. More than half the coastal wetlands in the lower 48 states 
have been lost, and almost 40 percent of estuarine habitat has been 
impaired by damming and diverting countless rivers and streams.
    The Fisheries Habitat Restoration program, funded through the 
National Oceanic and Atmospheric Administration (NOAA) Restoration 
Center, reaches out to local constituencies to accomplish on-the-
ground, community-based projects to restore estuaries and coastal 
habitats. Partnerships and local involvement are fundamental to the 
success of this program. Partners typically match federal dollars 1:1 
and leverage those dollars up to 10 times more through state and local 
participation. To date, the program has funded 600 projects in 25 
states, promoting fishery habitat restoration in coastal areas with a 
grassroots, bottom-up approach.
    We urge Congress to provide the NOAA Fisheries Habitat Restoration 
Program with $18,500,000 to help more communities restore and protect 
and restore the health of their estuaries and coastal habitats.

Hydropower Relicensing
    The National Marine Fisheries Service (NMFS) would greatly benefit 
from additional funding to address the growing number of hydropower 
dams that need renewal of their operating licenses from the Federal 
Energy Regulatory Commission (FERC). Under the Federal Power Act, NMFS 
plays a role in setting license conditions to protect and conserve 
anadromous (sea-run) fisheries such as Pacific and Atlantic salmon, 
steelhead and sea-run cutthroat trout, and shad. Licenses are nearing 
expiration at hundreds of dams around the country, and workloads are 
increasing for NMFS and other resource agencies. Increasing NMFS's 
limited hydropower relicensing budget would help ensure a more 
efficient licensing process, benefit the hydropower industry, and 
further efforts to protect and restore our nation's anadromous 
fisheries.
    Congress should provide NMFS with a $2 million increase to its 
Habitat Conservation line item specifically for hydropower relicensing.
                                 ______
                                 

 Prepared Statement of the Alliance for International Educational and 
                           Cultural Exchange

    The Alliance for International Educational and Cultural Exchange 
appreciates the opportunity to submit testimony in support of the 
educational and cultural exchange programs administered by the 
Department of State.
    The Alliance is the leading policy voice of the U.S. exchange 
community, and has worked closely with the subcommittee on exchange 
issues. We note with gratitude the subcommittee's role in increasing 
exchange appropriations in recent years.
    The Alliance comprises 67 nongovernmental organizations, with 
nearly 8000 staff and 1.25 million volunteers throughout the United 
States. Through its members, the Alliance supports the international 
interests of 3300 American institutions of higher education.
    With grassroots networks reaching all 50 states, Alliance members 
help advance the U.S. national interest by putting a human face on 
American foreign policy, transmitting American values, fostering 
economic ties with rapidly developing overseas markets, and assisting 
individuals with the development of critical foreign language, cross-
cultural, and area studies expertise. Our members also leverage 
considerable private resources--in cash and in kind--in support of 
these critical programs.
    By engaging a very broad array of American individuals and 
institutions in the conduct of our foreign affairs, exchange programs 
build both enhanced understanding and a web of productive contacts 
between Americans and the rest of the world.
    Our requests for the fiscal year 2004 exchange appropriation fall 
into three broad categories:
Core Exchange Budget--Bureau of Educational and Cultural Affairs
    As a nation, we need to provide more opportunities for emerging 
leaders around the world to experience first-hand our society, our 
values, and our people. The Alliance therefore urges the subcommittee 
to provide substantial increases in funding for exchange programs. 
While appropriations for these programs have moved up in recent years, 
this account still lags well behind its historic levels in constant 
dollars due to the deep cuts of the mid-nineties. Coupled with the 
increases in fixed program costs such as airfare and accommodation, 
reduced appropriations have resulted in significantly diminished 
participant levels in programs consistently cited by our embassies as 
one of their most effective means of advancing U.S. policy interests.
    For example, the Bush Administration's request for the State 
Department's core exchanges in fiscal year 2004, excluding funding for 
programs provided for under the Freedom Support Act and SEED, appears 
to be level with the current year appropriation of $245 million. In 
fact, we understand that this ``level funding'' amounts to a reduction 
of approximately $7.5 million available for programs, when one factors 
in increased costs.
    While exchange budgets have risen in recent years thanks to the 
leadership of this subcommittee, State Department figures for the core 
exchange budget--excluding Freedom Support Act and SEED funding--
indicate that exchange funding has declined 40 percent in constant 
dollars over a 10-year period (1993-2002).
    As our experiences since September 11, 2001, demonstrate clearly, 
we need public diplomacy and exchanges more than ever. We need to build 
trust and understanding for our people and our policy goals not just in 
the Muslim world--an effort that will be of critical importance--but 
around the globe. To win the war on terrorism and to rebuild Iraq, we 
will need the help of our friends and allies in every region of the 
world. This is a time to intensify and expand our public diplomacy, and 
we believe there is strong bipartisan support in Congress to do exactly 
that.
    We therefore urge the subcommittee to fund the Department of 
State's core exchange budget at $286 million, the level authorized by 
the 107th Congress. This amount would provide for targeted, meaningful 
growth in every region of the world in support of our most important 
foreign policy objectives.

Exchanges with the countries of the former Soviet Union and Central 
        Europe
    We note that the Bush Administration budget request moves funding 
for exchange programs authorized by the Freedom Support Act (FSA) and 
SEED into the CJS bill for the first time. If the appropriations 
subcommittees agree with this change and the CJS subcommittee includes 
these programs in its bill, we urge you to substantially increase 
funding over the Administration's request.
    The Administration has requested $100 million for these programs. 
Our best estimates suggest that this level represents a cut of 
approximately 28 percent. We hope the subcommittee will agree that this 
reduction is unwise in regions of the world of such strategic 
importance to the United States. This is particularly true when one 
considers the effectiveness and impact of these exchange programs.
    We urge the subcommittee to fund FSA and SEED programs at an 
overall level of $145 million, which would allow for increases in 
program costs and a modest boost for these high priority activities.
    A central aspect to the opening of the region has been the 
opportunity for the peoples of these countries to see how a democratic 
society functions, based on the principles of democracy and a free 
market economy. In recent Congressional testimony, former U.S. 
Ambassador to the Russian Federation James W. Collins said, ``Efforts 
at reform in business and education--are just beginning to take hold. 
We're just starting to create an established and recognizable critical 
mass of individuals able to sustain our national interest in fostering 
reforms in these countries. Now is not the time to be reducing these 
efforts, particularly with Russia and Ukraine, whose challenges remain 
paramount. I believe there is no greater priority in Eurasia at this 
time than developing and sustaining the young leadership of that region 
in their associations with the West and that responsibility remains 
critically in our hands.''

Islamic Exchange Initiative--Building Cultural Bridges
    While the need for increased funding is worldwide, increased 
exchanges with the Islamic world are particularly critical as we pursue 
the war on terrorism. To defeat terrorism, the United States will need 
more than the might and skill of our armed forces. To ultimately defeat 
terrorism, we must also engage the Muslim world in the realm of ideas, 
values, and beliefs.
    No previous foreign affairs crisis has been so deeply rooted in 
cultural misunderstanding. One of the lessons of September 11 is that 
we have not done an adequate job of explaining ourselves to the world, 
or of building the personal and institutional connections with these 
countries that support healthy bilateral relationships. Policy 
disagreements alone cannot account for the fact that many in Islamic 
countries regard the United States, the greatest force for good in 
human history, as a source of evil.
    A Gallup poll conducted in February 2002 reported that 61 percent 
of Muslims believe that Arabs did not carry out the attack on the 
United States. That statistic alone speaks somber volumes about our 
failure to project our values and ideals effectively in Islamic 
nations.
    Given the importance and urgency of the task and the broad arc of 
countries we will need to engage, stretching from Africa to Southeast 
Asia, we urge the subcommittee to appropriate $100 million for this 
purpose.
    As a long-term solution to the profound problems of cultural 
misunderstanding, there is no substitute for public diplomacy. It must 
be a key component of our long-term effort to eradicate terrorism. 
Public diplomacy in the Muslim world will require a sustained, serious 
effort if we are to succeed in our quest for lasting peace and 
security, stable bilateral relationships, and an end to terrorism. An 
Islamic Exchange Initiative, designed to broaden the range of 
meaningful relationships based on shared interests with current and 
emerging leaders and key institutions in Muslim countries, will be 
critical to our success.
    Changing minds--or merely opening them--is a long, painstaking 
process. There are no quick fixes. If we are to win the war on 
terrorism, there will be no avoiding the need to build bridges between 
the American people and the people of the Muslim world. We must begin 
this process now.
    In the Islamic world, we envision this initiative engaging the full 
range of programs and activities managed by the Bureau of Educational 
and Cultural Affairs: Fulbright and Humphrey exchanges that will 
stimulate broader cultural understanding, joint research and teaching, 
and foster positive relationships with a new generation of leaders; 
university affiliations targeted toward key fields such as mass media 
and economic development; International Visitor and other citizen 
exchange programs designed to bring emerging leaders into significant 
and direct contact with their professional counterparts and the daily 
substance of American life; youth and teacher exchanges and enhanced 
English teaching programs, all designed to bring larger numbers of 
young people a direct and accurate picture of our society, based on 
personal experience rather than vicious stereotyping.
    Increasing the State Department's exchanges with the Islamic world 
will give us the means to develop productive, positive relationships. 
This initiative will engage the American public--in our communities, 
schools, and universities--in an effort to project American values. We 
will find no better or more convincing representatives of our way of 
life.
    And the engagement of the American public will leverage significant 
additional resources to support this effort.
    Initial efforts were made during the 107th Congress to both 
authorize and fund programs on a broad range of exchange activities to 
build relationships with the Islamic world and enhance U.S. national 
security.
    We commend the subcommittee for funds made available in the fiscal 
year 2002 supplemental for Islamic exchanges. The $10 million 
appropriated by this subcommittee has been put to good use by the 
Department of State in key programs such as Fulbright, International 
Visitors, and English teaching.
    We also recognize that this funding reflected the broad bipartisan 
support for an Islamic Exchange Initiative, clearly expressed in the 
passage in the House of the Hyde/Lantos Freedom Promotion Act, and in 
the Kennedy/Lugar Cultural Bridges Act, which attracted 12 cosponsors 
of both parties in the Senate.
    A meaningful and effective Islamic exchange initiative will require 
$100 million above the appropriation for the State Department's core 
exchanges. We recognize that this is a significant amount of money. We 
believe, however, that this funding level is necessary and appropriate 
given the expanse of the Muslim world and the urgency and importance of 
the task at hand. Moreover, this amount of money spent on promoting our 
ideas and values is very small when compared to the sums we will expend 
on military hardware, but it is no less crucial to our success.
    The level of support we have witnessed from senior members of both 
parties and both chambers underscores the timeliness and importance of 
this initiative. This is a moment when our national interests require 
Congressional leadership to build these cultural bridges.
Other program issues
    In addition, we would like to draw the subcommittee's attention to 
three specific programs we believe are deserving of additional support:
  --The Foreign Study Grants for U.S. Undergraduates program, also 
        known as the Gilman Scholarship Program, assists students of 
        limited financial means from the United States to pursue study 
        abroad. Demand for the scholarships is enormous, demonstrated 
        by the nearly 3,000 applicants from 44 states and Puerto Rico 
        last year. Due to funding constraints, however, the program was 
        only able to grant 302 awards.
  --The Educational Partnership Program (formerly known as the College 
        and University Affiliations Program) supports cooperation 
        between U.S. colleges and universities and foreign post-
        secondary institutions in the form of faculty exchanges, 
        curriculum development, collaborative research and other 
        activities.
  --Overseas Educational Advising/Information Centers serve as an 
        important, unbiased information resource for prospective 
        foreign students interested in the United States.
    We have provided subcommittee staff with report language on these 
issues and welcome the opportunity to discuss them with you.
    The U.S. exchange community stands ready to assist you in these 
efforts, and is grateful for your support.
                                 ______
                                 

     Prepared Statement of the American Foreign Service Association

    Mr. Chairman and members of the Subcommittee, on behalf of the 
American Foreign Service Association (AFSA) and the 23,000 active-duty 
and retired members of the Foreign Service, I express our appreciation 
for the opportunity to share our views and concerns with you.
    The work of this Subcommittee is vital to the success of our 
Nation's foreign policy. Your decisions determine whether we have the 
infrastructure and many of the tools of diplomacy needed to implement 
our policy. The Subcommittee's and the Congress's support of the 
Administration's request in meeting our staffing needs, improving our 
information technology systems, making our posts and missions more 
secure, and providing for an active exchange program is very much 
appreciated. Certainly Secretary of State Colin Powell and his staff 
also must be thanked for their hard work on our behalf as they make 
their presentations before the Congress. The Secretary consistently 
describes his current role as both the President's principal foreign 
policy advisor and as the CEO of the Department of State. It has been a 
long time since the Foreign Service has had a Secretary who has worn 
both hats so effectively.
    As the representative of the Foreign Service, our major concern is 
the appropriations for the Administration of Foreign Affairs section of 
the appropriations bill. This area covers funding for personnel and 
especially the Secretary's Diplomatic Readiness Initiative (DRI), 
funding to bring the Department into the 21st Century in terms of 
information and communications technology, and the security of our 
people as they serve this Nation in over 250 posts and missions around 
the world.

             CONTINUED VIGILANCE OF STAFFING NEEDS REQUIRED

    With the fiscal year 2004 request of $97 million for the DRI to 
hire 399 additional foreign affairs personnel above attrition, we are 
in the final year of a three-year plan to fill an identified personnel 
shortfall of over 1,100 people.
    As you know, several important 1999 and 2000 studies from very 
respectable organizations found the infrastructure of diplomacy ``near 
a state of crisis.'' The Overseas Presence Advisory Panel (OPAP) 
reported in 1999:

    ``The United States overseas presence, which provided the essential 
underpinnings of U.S. foreign policy for many decades, is near a state 
of crisis. Insecure and often decrepit facilities, obsolete information 
technology, outmoded administrative and human resources practices, poor 
allocation of resources, and competition from the private sector for 
talented staff threaten to cripple our nation's overseas capability, 
with far-reaching consequences for national security and prosperity.''

    Fortunately the warnings in those studies were taken to heart. The 
Secretary and the Congress worked together to fill that personnel 
shortfall and to improve our information technology over three years. 
We are already beginning to see the benefits as new personnel are 
hired, the stress is being lifted from the shoulders of overly 
stretched personnel and there is an easing, though not a reduction, in 
the work expectations of ``doing more with less.'' Foreign Service 
personnel are able to take needed training and participate in career 
development programs instead of having to choose between training and 
filling an empty position, and a surge capacity is developing.
    Further, because of the support for our information and 
communications technology systems, our equipment is modern and we have 
or will soon have classified and unclassified connectivity to every 
post that requires it, and access to the Internet from our desktops. 
Our communications and information systems are no longer the sad joke 
they had become, and there are plans to continue improvements in these 
areas including the SMART initiative to overhaul the systems for 
cables, messaging, information sharing, and document archiving.
    The momentum that started two years ago needs to be maintained. The 
DRI needs to be successfully completed and the drive to improve our 
information and communications technology sustained.
    However, Mr. Chairman, in terms of the DRI, I would also urge the 
Subcommittee to see adequate staffing as a dynamic process. The 1,158-
person shortfall was identified nearly 3 years ago as existing at that 
point in time. Conditions have changed since then, and the complexity 
of the demands on diplomacy continue to grow around the world. Section 
301 of Public Law 107-228, the Foreign Relations Authorization Act of 
2003 requires the Secretary of State to submit a ``Comprehensive 
Workforce Plan'' for the Department for the fiscal years 2003 through 
2007. ``The plan shall consider personnel needs in both the Civil 
Service and the Foreign Service and expected domestic and overseas 
personnel allocations.'' AFSA would encourage the Subcommittee to 
consider these workforce plans for staffing considerations as a start 
to accommodate changes in the world in the coming years. We were near 
crisis until the Administration and the Congress stepped in to turn 
things around. The job is not done, and such a situation should not be 
allowed to occur again. As the Secretary often states, ``diplomacy is 
the first line of offense,'' and there are serious consequences for the 
economy, the welfare and the security of our nation if diplomacy is not 
adequately funded to do the job.

                EMBASSY SECURITY--STILL MUCH TO BE DONE

    AFSA believes that together, the Department of State and the 
Congress have been making impressive strides in improving the security 
of our posts and missions abroad. After the 1998 east Africa bombings 
of our embassies, the Accountability Review Boards (ARB), chaired by 
Admiral William Crowe, looked into the cause of those bombings and made 
several important conclusions. First, they found that there was a new 
face to international terrorism and a new threat environment. Secondly, 
the ARB found that the cause of the bombings could not be placed at the 
doorstep of any single individual but that it was a systemic problem of 
inattention.

    ``. . . there was a collective failure by several Administrations 
and Congresses over the past decade to invest adequate efforts and 
resources to reduce the vulnerability of U.S. diplomatic missions 
around the world to terrorist attacks.''

    The ``new threat environment'' continues to haunt us as seen by the 
continued attacks on the symbols of our country at home and abroad. 
However, we have seen the second lesson addressed through a major 
multi-year increase in security funding in both the hiring of 
additional security personnel and in security upgrades that has left no 
facility abroad unimproved. This increased funding is paying off as 
evidenced by the minimal damage done to the American Consulate in 
Karachi in a terrorist bombing in July 2002.
    Mr. Chairman, despite significant upgrades to the security of our 
facilities around the world, the General Accounting Office reported in 
its March 20, 2003 testimony before the Senate Committee on Foreign 
Relations:

    ``. . . even with these improvements, most office facilities do not 
meet security standards. As of December 2002, the primary office 
building at 232 posts lacked desired security because it did not meet 
one or more of State's five key current security standards. . . . Only 
12 posts have a primary building that meets all 5 standards. As a 
result, thousands of U.S. government and foreign national employees may 
be vulnerable to terrorist attacks.''

    The Foreign Service does not seek hilltop fortresses in which to do 
our work. Such would be counterproductive to our purpose for being in a 
country. We accept the dangers that are part of our profession, but we 
also expect that our government, which sends us to these posts, should 
seek to provide for our safety as much as possible. AFSA urges that 
funding continue at its current, if not an accelerated pace, to 
complete the work of securing our posts and missions abroad.
    ``Soft Targets''.--There is a subset of our concerns about the 
security of our posts and missions abroad. As you know from our 
testimony submitted to the Subcommittee last year, threats to ``soft 
targets'' are a major concern to the Foreign Service. In just the past 
year, we have had a mother and daughter killed in a church in 
Islamabad, Pakistan, and an USAID official assassinated in front of his 
house in Amman, Jordan. We also saw the bombing of a nightclub that was 
popular a Western tourist spot in Bali, Indonesia. The threats to 
``soft targets'' are very real for us. To Foreign Service members, the 
term ``soft targets'' means our spouses and children as we try and lead 
a somewhat normal life of going to school, to church, and on other 
family outings.
    Mr. Chairman, we appreciate and thank you for your personal concern 
and leadership in this area. It is clear that through your and this 
Committee's work, the legislative branch understands that more than 
bricks and mortar need to be protected, but the Foreign Service 
community as well. The lead that this Committee took in setting aside 
funds to examine the threat against schools abroad that our children 
attend, and the Senate's designation, through your work, to have $10 
million additional funds for soft target protection in the fiscal year 
2003 Supplemental Appropriations add to our appreciation. While the 
additional funds for embassy security were significant, we were sorry 
to see that Conference recommendations had dropped the additional funds 
specifically designated for soft target protection.
    AFSA urges this Subcommittee to continue in its efforts to provide 
additional funding to shore up this important part of our overseas 
security. ``Soft targets'' is a descriptive euphemism, but what we are 
really talking about is the lives of our people and their families as 
they serve this Nation abroad.

                               CONCLUSION

    Mr. Chairman and members of the Subcommittee, I again wish to 
express our appreciation for the opportunity for the American Foreign 
Service Association to share our views and concerns with you. The 
decisions you make affect both our professional and private lives as we 
serve this Nation abroad. You directly help determine how safe we are 
at work and in our housing abroad; what our working conditions are 
like, from having to work in converted cargo boxes to comfortable, 
fully equipped offices; whether we have adequate staffing to share the 
work and whether we have information and telecommunications software 
and equipment to talk to our Colleagues around the world. We thank you 
for your understanding these past few years, and we ask for your 
continued support in the fiscal year 2004 funding process and beyond.
                                 ______
                                 

  Prepared Statement of the Association of Small Business Development 
                                Centers

    Mr. Chairman, Mr. Ranking Member and members of the Subcommittee, I 
am Donald Wilson, President of the Association of Small Business 
Development Centers (ASBDC). The Association is grateful for the 
opportunity to submit this testimony for the record of the 
Subcommittee's fiscal year 2004 hearings.
    ASBDC's members are the 58 State, Regional and Territorial Small 
Business Development Center programs comprising America's Small 
Business Development Center Network. All Small Business Development 
Center (SBDC) grantees, located throughout the 50 States, the District 
of Columbia, Puerto Rico, the Virgin Islands, Guam and American Samoa, 
are members of the ASBDC.
    Since its establishment by Congress in 1980, America's Small 
Business Development Center Network has provided in-depth counseling of 
an hour or more, and training of two hours or more, to roughly 10 
million small business owners and aspiring entrepreneurs. In addition, 
millions more entrepreneurs have used the network as an informational 
resource for answers to questions as simple as how to get a business 
license or where to get an employer identification number.
    ASBDC urges the Subcommittee to fund our nation's SBDC network at 
its currently authorized level of $125 million in the fiscal year 2004 
Commerce-Justice-State Appropriations bill. The Association recognizes 
the difficult funding choices that the Subcommittee must make in these 
difficult times, and that ASBDC's recommendation represents a 
significant increase in the current funding level for the SBDC program. 
However, America's SBDC network can help our country recover from its 
current economic stagnation, create desperately needed new jobs, and 
generate the additional Federal revenues needed to reduce the budget 
deficit.
    First, it is important to note that Federal funding for the SBDC 
network generates more revenue for the Federal treasury than it costs 
the taxpayer. The President's fiscal year 2004 Budget points out that 
an independent evaluation of the SBDC program indicated that each $1 
spent on SBDC counseling resulted in $2.78 in tax revenues. The SBDC 
program generated an estimated $182.9 million in Federal revenue in 
2001--an excellent return for a Federal investment of $88 million for 
the nationwide SBDC program.
    In addition, America's SBDC network has a proven record of creating 
jobs and generating growth for America's small businesses. At the 
beginning of the most recent recession in 2001, as large corporation 
after large corporation announced layoffs, long-term counseling clients 
of the SBDCs added 46,688 new jobs, saved 34,215 existing jobs, started 
12,872 new businesses, increased sales by $3.9 billion, and saved an 
additional $4.3 billion in sales. In addition, SBDC long-term 
counseling helped small businesses obtain an estimated $2.7 billion in 
financing in 2001. That means every dollar spent on the operation of 
the SBDC network leveraged approximately $15.89 in new capital raised 
by long-term SBDC clients in 2001.
    Based on its record over the past 10 years, with funding of $125 
million our nation's SBDC network could help SBDC long-term counseling 
clients to:
  --create an estimated 111,744 new full time jobs;
  --increase sales by an estimated nine billion dollars;
  --produce an estimated $266 million in additional revenue for the 
        Federal government; and
  --produce an estimated $397 million in additional tax revenue for 
        State governments.
    Federal funding for the national SBDC network is an investment in 
the job creation potential of America's small business sector--the 
engine of our nation's economy. Today, job creation by small businesses 
has declined as America's entrepreneurs struggle in a sluggish economy. 
Initial weekly unemployment claims have been above 400,000 for the past 
eleven consecutive weeks--a clear indication that the economy is still 
struggling to recover from recession. In fact, 2001 and 2002 were the 
worst two consecutive years of job creation in the American economy 
since the 1950's.
    America's SBDC Network can help the small business sector of our 
economy generate jobs again, but we need the resources to do the job. 
Federal funding available for distribution to the SBDC program 
decreased between fiscal year 1994 and fiscal year 2004 (after 
accounting for inflation, earmarks and the establishment of the SBDC 
program in Guam and American Samoa)--while Federal government receipts 
increased by 26 percent in constant dollars. In addition, as a result 
of the 2000 Census, 24 States--including Kentucky, Maryland, New Mexico 
and Wisconsin--are subject to receiving less Federal funding for their 
SBDC programs than they received in 2001--simply because their 
populations did not grow as fast as other State populations.
    There is room in the Federal budget for increased resources for our 
nation's SBDC network. For example, the Small Business Administration 
(SBA) Budget proposal for fiscal year 2004 calls for increasing the 
SBA's Salaries and Expenses account to $219 million. That is an 
increase of $57 million (35 percent) compared to fiscal year 2002, and 
an increase of $10 million (5 percent) compared to the SBA's fiscal 
year 2003 Budget proposal. However, the SBA's Budget proposal calls for 
cutting the SBA Non-Credit Business Assistance account to $141 million 
in fiscal year 2004. This is the account that funds SBDCs and other 
programs that provide direct assistance to small businesses. For those 
programs, the SBA's Budget proposes to cut $26 million (20 percent) 
compared to fiscal year 2002, and $3 million (2 percent) compared to 
the SBA's fiscal year 2003 Budget proposal. Funding for SBA can be more 
wisely spent on direct assistance for small businesses rather than on 
administrative overhead.
    I urge you to consider that Federal funding for the SBDC network is 
now more important than ever, as State governments across the country--
including possibly Colorado, Hawaii, Kentucky, Maryland, New Hampshire, 
Texas, Vermont, Wisconsin and others--are cutting back on their 
contributions to the SBDCs. This is not because of lack of support for 
the SBDC program, but rather because of the revenue crises faced by 
State governments across the country. Unless Federal support for the 
national SBDC network is able to make up for cuts in State funding, 
SBDC program capacity across the United States will have to be severely 
cut back. Counselors will have to be laid off and service centers will 
have to be closed. The job creation and economic development activities 
of the SBDC network will be curtailed proportionately--at the very time 
that the economy is in need of a stimulus.
    Recent and pending state budget cuts in SBDC funding will assure 
that America's Small Business Development Center network will contract 
even further this year without a significantly increased federal 
appropriation. Rural areas which have unique economic development needs 
have already been adversely impacted by the closing of centers and the 
laying off of counselors. Unlike other federal management and technical 
assistance programs, federal dollars appropriated to the SBDC program 
leverage roughly three additional non-federal dollars. The decline in 
state resources as result of the crisis in state budgets cannot 
possibly be made up from private sector sources in the current economic 
climate. The Federal government needs to recognize the growing 
financial plight of the SBDC network in these trying economic times. If 
the Federal government does not allocate resources to the SBDC program 
at a level approximating $125 million for fiscal year 2004, the 
management and technical assistance needs of tens of thousands of small 
firms will go unmet and thousands of private sector jobs will likely be 
lost. The resulting decline in economic activity will surely have a 
significantly negative impact on state and federal budgets. The 
remarkable infrastructure of over 900 SBDC service centers developed 
over the past twenty-three years will deteriorate even further as more 
service centers are closed and dedicated counselors are laid off.
    The work of America's Small Business Development Center Network is 
constantly being recognized by others. The Bill J. Priest Institute for 
Economic Development, a Division of the Dallas County Community College 
District, was the only recipient of the Texas Award for Performance 
Excellence in 2002. The award is patterned after the Malcolm Baldrige 
National Quality award and recognizes Texas organizations that excel in 
world-class management, achievement, and performance excellence in 
applying quality and customer satisfaction principles. A critical 
component of the Institute is the Dallas Regional SBDC. NAMTAC, the 
National Association of Manufacturing and Technical Assistance 
Center's, presented its 2002 Outstanding Project of the Year Award to 
the New York State SBDC for its efforts to help small businesses 
recover from the September 11, 2001 terrorists attack in that state. 
The Maine SBDC program late last year was awarded the Margaret Chase 
Smith Maine State Quality Award. This award recognizes organizations 
for performance excellence based on criteria corresponding to the 
Malcolm Baldrige National Quality Award.
    In June of last year Secretary of Commerce Evans presented the 
Black Hawk College Export Trade Center, a special component of the 
Black Hawk College SBDC, with the President's ``E'' Award for Exporting 
Excellence. This prestigious award was created by President John F. 
Kennedy to recognize U.S. Businesses or organizations that have 
demonstrated outstanding growth and innovation in exports or export 
service. ASBDC is proud of the accomplishments of its members and their 
capable and committed personnel.
    The Subcommittee's consideration of fiscal year 2004 funding for 
the SBDC program comes at a critical time for our nation's economy. 
Small businesses generate 52 percent of Gross Domestic Product, 
represent 99 percent of all employers and employ 51 percent of all 
private sector employees. During the past decade small businesses 
created roughly 70 percent of net new jobs in our economy. But all is 
not well with the small business sector. The most recent data available 
from SBA's Office of Advocacy finds that in 2001 small business 
bankruptcies nationwide increased nearly 13 percent over the previous 
year. No doubt, newer national figures will show those numbers further 
increasing. The majority of small business owners have never received 
any formal entrepreneurial training. The majority has never managed a 
business during an economic downturn. The need for management and 
technical assistance within the small business sector is greater today 
than ever before. The Department of Labor confirms that when 
unemployment rises, self-employment rises.
    There are 23 million small business owners in the United States, 
and the Kauffman Foundation estimates that one in 10 adult Americans is 
seeking to start his or her own business. Forty percent of SBDC clients 
are women (SBDC's served over a quarter million female clients last 
year) and 22 percent are minorities. Demand for entrepreneurial 
services among these constituencies is exploding.
    SBA figures for fiscal year 2002 show that SBDC counseling cases 
and training attendees combined increased from 610,000 in fiscal year 
2001 to 650,000 in fiscal year 2002 despite an increase in federal 
funding of less than $100,000. These client numbers represent real 
people, your constituents, individuals, many with families, and 
mortgages, tuition payments and dreams. They are real people like Dr. 
Harris Goldberg, a chemist from Hillsborough, New Jersey who was 
featured in a December 16, 2002 article in the Wall Street Journal. Dr. 
Goldberg had been laid off, decided to seek assistance at his local 
SBDC and now has his own successful firm providing employment to 
others.
    If we are to have any chance of growing this economy at the level 
needed to provide jobs and enhance federal revenues, there must be a 
clear determination by Congress to provide the resources to increase 
the service capacity of the SBDC program. ASBDC appreciates the 
Subcommittee's support for the SBDC network in past years. I urge you 
to support an appropriation of $125 million for our nation's SBDC 
network in the fiscal year 2004 Commerce-Justice-State Appropriations 
bill. Thank you.
                                 ______
                                 

              Prepared Statement of The Nature Conservancy

    The Nature Conservancy is escalating its focus on freshwater, 
coastal, and marine conservation by establishing Freshwater and Marine 
Initiatives that will employ the science, partnerships, ecosystem 
approach, and site-based conservation that has worked throughout our 
fifty-year history. These initiatives will strengthen the work that we 
are engaging in with partners to develop a ``conservation blueprint'' 
identifying the places that, if conserved, will collectively protect 
the nation's plants, animals, and natural communities for the long-
term. Several NOAA programs have been, or will be successful at 
conserving many places identified by our blueprint.

Coastal Zone Management
            CZM Grants to States--$80 million
            CZM Program Administration--$7.5 million
            Non-point Pollution Implementation Grants--$15 million
    This unique federal-state-territorial partnership created under the 
Coastal Zone Management Act (CZMA) serves to protect, restore, and 
responsibly develop the nation's coastal communities and resources 
along 95,000 miles of shoreline. State and territorial CZM programs 
link national objectives with implementation and stewardship at the 
local level. Increased funding for this program in fiscal year 2004 
would advance protection of coastal, ocean, and Great Lakes species and 
their habitats; maintain the natural shoreline such as beaches, dunes 
and wetlands; and enhance scientific research and education, while 
allowing for certain economic growth.
    Many Conservancy chapters already pursue mutual goals with state 
CZM programs. We are working to strengthen these partnerships in light 
of our heightened emphasis on conserving freshwater, coastal, and 
marine biodiversity.

National Estuarine Research Reserve System
            Operations--$18 million
            Procurement, Acquisition and Construction--$15 million
    Authorized as part of the Coastal Zone Management Act (CZMA), the 
twenty-five ``living laboratories'' making up the National Estuarine 
Research Reserve System (NERRS) require funding appropriate to the 
importance of estuaries to critical habitat and coastal economies. 
Adequate funding for the NERRS will permit individual reserves to 
better implement strong management, research, education, and 
stewardship activities within surrounding communities, and acquire key 
tracts of land and conservation easements that buffer development 
impacts. This funding would also facilitate implementation of system-
wide monitoring and coastal training programs, and would enable 
expansion in order for the system to represent the suite of 
biogeographic regions that together comprise our nation's coastlines.
    We work closely with New Hampshire's Great Bay, Florida's 
Apalachicola Bay, Alaska's Kachemak Bay, South Carolina's ACE Basin, 
and Mississippi's Grand Bay reserves. As preserve managers, we at the 
Conservancy know first hand that the NERRS implements solid science to 
inform communities about how coastal ecosystems function, how humans 
affect them, and methods for improving their condition.

National Marine Sanctuaries--$38 million
    The Nature Conservancy urges the Committee to fund the National 
Marine Sanctuary Program at their fully authorized level of $38 million 
in fiscal year 2004 and we support the President's funding request for 
$10 million for Procurement, Acquisition & Construction for the 
Sanctuaries. This funding would extend volunteer programs, provide for 
additional monitoring, and would fulfill a national plan for public 
outreach. It would also enable new investments in science needed to 
better manage complex issues surrounding sanctuaries. Finally, 
additional funding will enable implementation of revised and more 
detailed management plans.
    The Conservancy is currently working cooperatively with the NMS 
program and the National Marine Sanctuary Foundation to develop 
effective volunteer programs for all of the Sanctuaries to better 
leverage federal investments with the ``sweat equity'' of those 
thousands of committed volunteers across the country. We are also 
working with the Monterey Bay NMS to determine overlapping goals and 
opportunities for collaboration as the sanctuary reviews its management 
plan. Finally, our most extensive experience has been with the Florida 
Keys NMS where their management plan, developed in cooperation with the 
state of Florida and the Sanctuary Advisory Committee, is being 
implemented.

Coastal and Estuarine Land Conservation Program--$60 million
    The Coastal and Estuarine Land Conservation Program (CELCP) was 
authorized by Congress as part of the Commerce, Justice, State, and 
Judiciary Appropriations Act of 2002. In its first year, this new 
program directed $15.8 million to coastal and estuarine areas with 
significant conservation, recreation, ecological, historical, or 
aesthetic value that are threatened by conversion from their natural 
state to other uses.
    Nowhere in the nation are threats such as sprawl, habitat loss, and 
fragmentation more significant than along our nation's coasts. That is 
why a program providing grants that allow for land acquisition as a 
conservation strategy serves as an important addition to federal 
efforts focused on protecting valuable habitat for the long-term. As a 
result, The Nature Conservancy supports a significant increase in 
funding ($60 million) for the CELCP in fiscal year 2004.
    In addition, we have identified four high-priority projects for 
CELP funding in fiscal year 2004:
  --Crow's Nest (VA)--$4 million
  --Gustavus Land Access and Enhancement (AK)--$1.5 million
  --Amsterdam Beach (NY)--$3 million
  --Ingleside (TX)--$500,000

Fisheries Habitat Restoration--$20 million
    The Nature Conservancy strongly supports NOAA's coastal habitat 
restoration efforts, and recommends funding levels of $20 million for 
Fishery Habitat Restoration. Most of this funding would ensure the 
continued success of NOAA's Community-based Restoration Program (CRP). 
This funding level would enable the CRP to direct more seed money to 
local communities across the country for the restoration of vital 
habitats including wetlands, seagrass beds, mangroves, anadromous fish 
spawning areas, and coastal rivers. Additionally, it would increase the 
CRP's geographic scope and the rate at which it can encourage community 
ownership and restoration of critical and rapidly dwindling habitat. 
This program has not only leveraged up to $10 for every federal dollar 
invested at more than 500 projects, but has also leveraged a 
conservation ethic across the nation.
    As a national partner, the Conservancy has experienced first hand 
how the CRP inspires local efforts to conduct meaningful, on-the-ground 
restoration of freshwater, coastal, and marine habitat. Since 
partnering with the CRP in 2000, we have already directed $1 million to 
community-based projects in Florida, New York, Connecticut, North 
Carolina, Delaware, Virginia, California, and Texas. With one year 
remaining in our national partnership, we are excited about what lies 
ahead.

Pacific Salmon Recovery Program
    The Conservancy considers salmon conservation a critical aspect of 
our work in the Pacific Northwest, Alaska, and the Northeast. Given the 
complex life history of this keystone species--migrating hundreds of 
miles past forests and farms, cities and dams, from fresh to saltwater 
during their lifecycle--successful salmon conservation requires action 
across a broad landscape.
    History has shown that money spent on habitat restoration and 
recovery could have been used more effectively and at less cost to the 
taxpayer if applied at a landscape-scale before systems were altered 
and degraded. However, habitat destruction, reduced streamflows, 
pollution, passage impediments, and overharvest have already played a 
role in the decline of salmon stocks. That is why generous funding to 
conserve and recover salmon in the Pacific Northwest and Alaska ($200 
million for the Pacific Coastal Salmon Recovery Fund; $55 million for 
NMFS Funding for Pacific Salmon Recovery), and in the Northeast ($30 
million for an equivalent Atlantic Coastal Salmon Recovery Fund), is 
now needed.
    In the Pacific Northwest and Alaska, the Pacific Coastal Salmon 
Recovery Fund has enabled states and tribes to support local efforts to 
evaluate, protect, and restore key habitat while enhancing local 
economies. NMFS funding enhances that support with scientific research 
and monitoring, and by spurring new cooperative efforts. In the 
Northeast, a significant amount of collaborative work among federal 
agencies, industry, private landowners, and other stakeholders has 
begun. The time is right to establish a similar approach and 
complementary funding for USFWS and NMFS.

Marine Protected Areas--$5 million
    Marine protected areas (MPAs) are proven tools for rebuilding and 
sustaining fisheries, recovering threatened and endangered species, and 
providing recreational opportunities. The Conservancy has learned this 
first hand through work with scientists, community members, 
international governments, and federal agencies to establish MPAs and 
identify and protect biodiversity within them in places such as the 
Florida Keys, the Exuma Cays Land and Sea Park in the Bahamas, and 
Kimbe Bay in Papua New Guinea.
    The Conservancy recommends that $5 million be appropriated for MPAs 
so that NOAA can continue working with federal and state agencies and 
other partners to assess MPA design and effectiveness as a management 
tool that protects biodiversity while permitting use of the nation's 
valuable marine resources. Increased funding would also expedite 
information collection and collaborative efforts required for 
completion of the first nationwide inventory of MPAs. Additional funds 
would be employed to improve coordination and information sharing at 
regional and national levels; support training and technical assistance 
for communities, users, management agencies, and others; and increase 
public involvement through the MPA web site.

Coral Reef Conservation--$30.25 million (total)
    The Nature Conservancy supports the President's request for $28.25 
million in fiscal year 2004 for activities that benefit coral reefs, 
including:
  --National Ocean Service--$16 million + $2 million
  --National Marine Fisheries Service--$11 million
  --Ocean and Atmospheric Research--$500,000
  --NESDIS--$750,000
    This funding would be used to advance priorities identified by the 
U.S. Coral Reef Task Force including comprehensive mapping and 
monitoring of coral reefs, research into ecological processes upon 
which reefs depend, integration of human activities, and public 
education. With such funding, this scientifically-based effort will 
protect and restore coral reefs in the United States and its 
territories. It will serve as a model in intergovernmental coordination 
and coral reef protection for similar initiatives around the world.
    The Conservancy urges the Committee to add to the President's 
request $2 million for grants to support on-the-ground conservation 
efforts. The availability of a small pot of funds that could be made 
available as grants to community-based efforts to address land-based 
sources of pollution or to support collaborative efforts to identify 
and designate Marine Protected Areas would be of substantial benefit to 
implementing the Coral Reef Task Force Action Plan.
    While NOAA's activities, guided by the Task Force, have made great 
strides in coral reef conservation, the Conservancy would like to see 
more funding dedicated to addressing this issue at an international 
scale. The combined effects of global climate change and human 
activities have led coral reef ecosystem health to decline severely all 
over the world in recent decades. It is now critical to take action 
before the tragedy becomes irreversible. Successful conservation of 
coral reefs will involve a broad-scale, global, and long-term 
commitment.

Estuary Restoration Program--$1.2 million
    The Nature Conservancy supports the President's request of $1.2 
million for NOAA in fiscal year 2004 to carry out their duties related 
to this program.
    The Estuary Restoration Act of 2000 created this program with the 
goal of restoring one million acres of estuary habitat by 2010. Subject 
to annual appropriations by Congress, the legislation authorized $275 
million over five years dedicated to public-private partnerships 
reversing the deterioration of estuaries through restoration of habitat 
that has been degraded by population growth, dams, and pollution. The 
Estuary Restoration Act emphasized the need for a centralized source of 
information on restoration activities, that provides for a consistent 
monitoring methodology that supports an iterative process and 
meaningful measures of success.

International Conservation
            Technical Assistance under CZMA--$1 million
            International Cooperation under NMSA--$500,000
    We recognize the significant accomplishments of the National Ocean 
Service (NOS) over the past several years in developing international 
capacity for integrated coastal management and marine protected area 
management particularly in Asia, the Pacific, and the Caribbean. NOS 
provides critical environmental leadership, for example: in the 
development of the recently ratified Protocol on Specially Protected 
Areas and Wildlife (SPAW) in the wider Caribbean region, its support of 
the International Coral Reef Initiative and the Global Coral Reef 
Monitoring Network, its leadership of IUCN's World Commission on 
Protected Areas (Marine) and especially extensive preparations for the 
marine program of the World Parks Congress in September 2003. We 
encourage increased allocation of resources toward these and other 
international activities with $1 million added to appropriations under 
Section 310, Technical Assistance, of the Coastal Zone Management Act, 
and $500,000 added to appropriations under Section 305, International 
Cooperation, of the National Marine Sanctuaries Act.
                                 ______
                                 

           Prepared Statement of the American Bar Association

    I am Jonathan Ross a lawyer in private practice with the 
Manchester, New Hampshire law firm of Wiggin & Nourie. This testimony 
is submitted at the request of the President of the American Bar 
Association, Alfred P. Carlton, Jr., to voice the Association's views 
with respect to the fiscal year 2004 appropriations for the Legal 
Services Corporation and the Judiciary's Defender Services Program.
    I submit this testimony in my capacity as Chair of the American Bar 
Association's Standing Committee on Legal Aid and Indigent Defendants. 
This Standing Committee serves the ABA and the nation by examining 
issues relating to the delivery of civil legal assistance and criminal 
defender services to the poor. It maintains a close liaison with state 
and local bar association leaders, providing information and developing 
policy and initiatives on civil legal aid and indigent defense.

                       LEGAL SERVICES CORPORATION

    The ABA recommends LSC's fiscal year 2004 appropriation be 
increased to $387.7 million.--The ABA is profoundly grateful for the 
Subcommittee's inclusion of the Harkin-Smith-Domenici amendment in the 
Senate's version of the fiscal year 2003 appropriation bill. This 
amendment increased LSC's funding by $19 million and was intended to 
prevent drastic funding cuts to legal aid programs serving 26 states. 
We are also grateful for the Subcommittee's hard work to ensure that 
half of that amount, $9.5 million, was included in the final version of 
the fiscal year 2003 appropriations bill.
    As you know, the Corporation redistributes grants to local legal 
aid programs every 10 years using a formula based on the most recent 
census. This reallocation resulted in significant cuts to service areas 
in these 26 states, including Ohio, Mississippi, Pennsylvania, 
Missouri, Kentucky, Alabama, Texas, Wisconsin, Vermont, Louisiana, 
Illinois, West Virginia, Minnesota and Michigan. Because of the static 
nature of LSC funding and the 5.74 percent increase in the poverty 
population nationwide, even states whose poverty population (and LSC-
eligible clients) remained the same or actually increased may have 
received funding cuts.
    At present, however, no state is able to meet the current demand 
for legal assistance, as programs must continue to turn away eligible 
clients with all but critical legal needs. In addition to the increase 
in the number of eligible clients as a result of the increase in the 
national poverty population, almost every state has already experienced 
or expects significant decreases in supplemental funding provided 
through state legislatures and/or Interest on Lawyer Trust Accounts 
(IOLTA).
    At the same time, various credible studies--state and national--
continue to show that despite the combined efforts of legal aid 
programs and private bar pro bono attorneys, 80 percent of the legal 
needs of those in poverty go unmet. These people are substantially the 
``working poor'' who encounter legal problems relating to family 
relationships, domestic violence, health, employment, housing and other 
basic life issues. Such hardships have only increased in scope and 
frequency since the terrorist attacks and as a result of the faltering 
economy. Now, with the mobilization of U.S. forces for the war in Iraq, 
there has been an increased demand for legal services among our 
servicemen and women, many of whom qualify for legal aid.
    We understand that your Subcommittee faces many difficult funding 
choices right now. However, assuring access to our justice system for 
low-income individuals to resolve their legal problems peacefully is 
essential to preserving the rule of law. At this time, the ABA 
respectfully requests that the Subcommittee fund LSC at $387.7 million 
for fiscal year 2004.
    The LSC has historically been grossly under-funded. In 1996, 
Congress reduced LSC's funding by 30 percent from $415 million to $278 
million and required many reforms in the way the LSC operated and 
restricted the activities of its local program grantees. The LSC has 
fully implemented all the required reforms, insuring that local 
grantees focus on meeting the basic, everyday legal needs of the poor. 
The appropriation has increased modestly since 1996, to $338.8 million 
for fiscal year 2003, but this amount is less than half the funding, in 
constant dollars, that LSC received in 1980.
    We estimate that, with inflation, the amount needed to merely bring 
LSC to pre-1996 levels would be $490 million. The ABA therefore urges 
Congress to restore LSC's funding to $490 million. In view of other 
pressing needs, we recognize that this cannot be accomplished at once, 
and ask the Subcommittee to increase LSC's funding from the fiscal year 
2003 level of $338.8 million to this amount over a three-year period 
starting with a $51.1 million increase in fiscal year 2004.
    At the very minimum, the ABA urges the Subcommittee to provide at 
least $352.4 million for fiscal year 2004, as recently requested by the 
Legal Services Corporation. LSC's request represents an increase 
correlating to the increase in the poverty population reported by the 
2000 census.
    The Legal Services Corporation Plays A Vital Role in the Justice 
System.--For more than a quarter century, the Legal Services 
Corporation has been a lifeline for Americans in desperate need. For 
poor Americans, LSC-funded legal services programs have been there at 
times when they had nowhere else to go. These are just a few examples 
of the millions of people legal aid lawyers help every year:
  --Alexander and his wife had to move to another state for health 
        reasons. They were unable to sell their mobile home, and 
        eventually the lender repossessed the unit. Later, a collection 
        agency notified them that they still owed $12,000 on the note. 
        At age 84, Alexander, who took pride in his good credit rating, 
        wanted to do the right thing. He could not, however, pay the 
        amount owed, nor could he afford an attorney. The local legal 
        services office was able to assist him in obtaining a 
        settlement agreement. He paid the settlement amount and was 
        able to keep his good credit rating. He has returned to the 
        work force part time and is caring for his ailing wife.
  --Mark, 38 years old, was dying from non-Hodgkin's lymphoma. 
        Conventional chemotherapy had helped, but he needed a special 
        type of bone marrow transplant to ensure that the lymphoma 
        would not recur. Without the procedure, his doctors predicted 
        that he would have only one year to live. Medicaid denied the 
        procedure, claiming that this type of transplant was not a 
        covered benefit even though it is considered the current 
        standard of care for the disease. Mark's legal services 
        attorney successfully argued that the denial was improper. The 
        transplant was successful, and Mark is now home and seeking 
        employment.
    The Corporation, formed in 1974 with bipartisan Congressional 
support and the endorsement of the Nixon Administration, was created to 
ensure that all Americans have access to a lawyer and the justice 
system for civil legal issues regardless of their ability to pay. 
Today, this is more important than ever. A weak economy has created 
pressing new legal needs for many Americans who have lost employment or 
suffered other setbacks. According to the 2000 census, more than 36 
million Americans live in poverty, making more than one in six 
Americans eligible for LSC-funded representation.
    The National Legal Aid Program Merits Strong Congressional Support 
Because:
  --LSC-funded programs provide basic legal services for poor Americans 
        in every Congressional District in the country.--LSC disburses 
        95 percent of its annual federal appropriation to 161 local 
        legal aid programs serving low-income individuals and families 
        in every county and Congressional District in the country. 
        Boards consisting of leaders in the local business and legal 
        communities set the priorities for and oversee these programs, 
        which are required by law to provide basic legal services to 
        the poor.
  --LSC-funded legal aid lawyers save and protect American families.--
        Local legal aid programs make a real difference in the lives of 
        millions of low-income American families by helping them 
        resolve everyday legal matters, including family law, housing, 
        and consumer issues, and by helping them obtain wrongly denied 
        benefits such as social security and veterans' pensions. LSC-
        funded programs often provide assistance to those who suddenly 
        qualify and need legal assistance, such as when natural or 
        national disaster strikes; LSC-funded programs were 
        instrumental in assisting September 11 victims and families. 
        Many low-income military families qualify for legal aid, and 
        seek help with such matters as estate planning, consumer and 
        landlord/tenant problems and family law.
  --LSC-funded programs are the nation's primary source of legal 
        assistance for women who are victims of domestic violence.--
        Legal aid programs identify domestic violence as one of the top 
        priorities in their caseloads. While domestic violence occurs 
        at all income levels, low-income women are significantly more 
        likely to experience violence than other women, according to 
        the U.S. Bureau of Justice Statistics. Recent studies also show 
        that the only public service that reduces domestic abuse in the 
        long term is women's access to legal aid.
  --The White House, the Congress and the American people support the 
        LSC.--President Bush supports funding for the LSC, recognizing 
        that ``[f]or millions of Americans, LSC-funded legal services 
        is the only resource available to access the justice system.'' 
        A bipartisan majority in Congress supports LSC; the Harkin-
        Smith-Domenici amendment ultimately added $9.5 million to LSC's 
        fiscal year 2003 budget at a time when many other domestic 
        programs were being cut or flat-funded. The American public 
        agrees that federal tax dollars should fund LSC: a national 
        poll reported in 2000 that 82 percent of those surveyed 
        supported government-funded legal aid.
  --The private bar cannot replace the services provided by LSC-funded 
        programs.--The private bar actively encourages and organizes 
        its members to provide pro bono legal services. Among many 
        other efforts, the ABA's Standing Committee on Legal Aid to 
        Military Personnel helps the military and the Department of 
        Defense improve the effectiveness of legal assistance in civil 
        matters to an estimated nine million servicemen and women and 
        their dependents. However, a well-funded federal legal services 
        program is essential to leverage other resources--human and 
        financial--to help meet the legal needs of the poor. Without 
        adequate federal funding, these non-LSC resources would be both 
        less abundant and less effectively utilized--and, in many 
        cases, would not exist.
            criminal justice act: defender services program
    The ABA supports the request of the U.S. Judicial Conference for an 
hourly rate increase from $90 to $113 for compensation for panel 
attorneys who represent indigent defendants under the Criminal Justice 
Act. This modest increase is needed to continue to attract and retain 
competent panel attorneys. We also support the Judiciary's request for 
funds sufficient to increase the maximum hourly capital panel attorney 
rate from $128 to $157. The current capital panel attorney rate has not 
been raised since 1989, and now does not even cover overhead costs for 
many attorneys doing this most difficult work, work often done under 
highly stressful, emergency conditions. The Florida Supreme Court 
recently concluded that every capital case by definition involves 
``extraordinary circumstances and unusual representation.'' Without a 
fee increase, scores of qualified attorneys will simply stop taking 
capital cases.

                               CONCLUSION

    The American Bar Association urges the Subcommittee to provide 
adequate funding for the Legal Services Corporation and the Defender 
Services Program. These two programs are essential for ensuring ``equal 
access to justice'' for all.
    Thank you for your consideration.
                                 ______
                                 

     Prepared Statement of the National Center for Victims of Crime

    My name is Susan Herman, and I am the executive director of the 
National Center for Victims of Crime. I submit this testimony to urge 
members of the Subcommittee on Commerce, Justice, State and the 
Judiciary to raise the cap on the Victims of Crime Act (VOCA) Fund to 
$685 million for fiscal year 2004. In addition, I urge you to prevent 
the creation of additional earmarks off the top of the VOCA Fund.
    The National Center for Victims of Crime is the leading resource 
and advocacy organization for victims of crime. We are well acquainted 
with the funding needs of the nation's crime victim assistance 
programs. Since its founding in 1985, the National Center has worked 
with public and private non-profit organizations and agencies across 
the country, and has provided information, support, and technical 
assistance to hundreds of thousands of victims, victim service 
providers, allied professionals, and advocates. Our toll-free 
information and referral Helpline keeps us in touch with the needs of 
crime victims nationwide. Through our day-to-day interactions with our 
members and with the 7,800 crime victim service providers in our 
service referral network, we are aware of the work they do and of the 
impact that funding decisions at the federal level have on their 
ability to meet the needs of victims. We also interact with crime 
victim service providers through our Training Institute, which offers 
training on a variety of issues to service providers throughout the 
country. In short, we hear from victims and service providers every day 
about the impact and importance of the VOCA Fund.
    As you know, the VOCA Fund consists of fines and penalties imposed 
on federal offenders. The bulk of the money is distributed each year by 
formula grants to the states to fund both their crime victim 
compensation programs, which pay many of the out-of-pocket expenses 
incurred by victims, and victim assistance programs, such as rape 
crisis centers, domestic violence shelters, victim assistants in law 
enforcement and prosecutor offices, and other direct services for 
victims of crime.
    Last year's $600 million cap on the VOCA Fund translated to a cut 
in funding for crime victim assistance programs of approximately eight 
percent. This eight percent funding decrease resulted from a change in 
the VOCA formula enacted in October 2001 as part of the anti-terrorism 
legislation, the USA PATRIOT Act, Pub. L. 107-56. That change increased 
the amount of VOCA Funds paid to states for their crime victim 
compensation programs, leaving less available for grants to victim 
service agencies.
    The amount of VOCA money a state receives for compensation is 
limited to a percentage of what that state paid out in a given year. 
Previously, states received a reimbursement of 40 percent of what they 
paid out in crime victim compensation. Beginning in fiscal year 2003, 
that amount increased to 60 percent of what the state paid out. The 
increase in VOCA funds that states received for compensation programs 
limited the funds available for crime victim services. The USA PATRIOT 
Act had coupled the formula change with an incremental annual increase 
in the VOCA cap that would have offset the loss of funds for victim 
services. That annual increase mechanism, however, was stricken by 
language in the appropriations measures for fiscal year 2002.
    The impact of that eight percent cut has been significant for 
programs already suffering from reduced private giving and state 
support. From around the country, programs have reported to us that 
they have had to:
  --Lay off staff, or reduce full time staff to part time.--Uniformly, 
        programs reported that they were already operating at bare 
        bones levels. The only area left to cut is staff time, which 
        directly reduces services available to victims. Many programs 
        also reported that there were no similar agencies or services 
        in their area to whom victims could turn. The following 
        response from a Louisiana rape crisis center was typical: ``We 
        have already cut as many positions as we can without shutting 
        down entirely. We counsel victims of sexual assault, and any 
        cut will mean no counseling for those victims.'' In many 
        instances, programs have only one or two paid staff, and the 
        reduction in their time will necessitate elimination of 
        extensive volunteer programs because there will be insufficient 
        professional oversight and coordination.
  --Limit their geographic coverage.--For instance, from Colorado, 
        Michigan, and Virginia we heard from programs that had been 
        serving victims in 5 to 10 counties; now they have had to pull 
        back from service in the outlying regions, leaving those 
        victims without services. Some programs serving rural victims 
        can no longer reimburse mileage or phone costs for volunteer 
        advocates who offer services throughout a large area.
  --Discontinue services for special populations of victims.--In some 
        places, victim assistance programs have recently conducted or 
        been a part of needs assessments and strategic planning 
        efforts, and thus have a clear picture of special victim 
        populations which are not being adequately served. Many 
        services that had been developed for special populations are 
        being eliminated because of reduced funding. One program from 
        Minnesota stated that their ``immigrant and refugee program to 
        sexual assault victims will be cut. The bilingual advocate for 
        this program will most likely be laid off. The outreach to this 
        population in our community has been building for the past 8 
        years. The trust and confidence from the community will be 
        eroded. Most importantly, an underserved community will go 
        unserved.''
  --Discontinue services for secondary victims.--For example, many 
        battered women's programs, which had relied on VOCA funding to 
        support services for the children who witnessed or sustained 
        abuse, are having to restrict and even eliminate those 
        services. A North Carolina shelter told us, ``In [our] county 
        there have been two domestic violence murders in 2003 one of 
        which was a stalking case. The five children involved in those 
        cases need our programs and we may not have the resources to 
        serve them. Then what?''
  --Turn away crime victims.--Victim service providers from Alabama, 
        Massachusetts, and Nevada all reported that the numbers of 
        victims seeking assistance, and the numbers of schools and 
        other organizations seeking outreach programs, have increased 
        at the same time the available funding has decreased. One North 
        Carolina program noted, ``County guidance counselors and 
        medical professionals continue to identify and refer more and 
        more children who are victims of family violence, sexual 
        assault and sexual abuse due to the education provided by this 
        agency to teach them how to recognize child victims/witnesses 
        of domestic violence. Yet, we will not be able to offer our 
        afternoon programming or summer programs to additional children 
        until some of the current children enrolled in the program age 
        out.''
    The effect of this year's cuts have been significant. The National 
Center for Victims of Crime is asking that the VOCA Fund cap be raised 
to $685 million for fiscal year 2004, to help programs make up for the 
loss in funding this year and enable them to begin to expand their 
programs. When we asked victim assistance programs about their spending 
priorities for any increase in funding, they reported the following 
needs:
  --Services to immigrant victims of crime.--All over the country, 
        there are limited services, or even a complete absence of 
        services, for large groups of immigrant victims of crime. Such 
        victims are often linguistically or culturally isolated. 
        Without the availability of interpreters or bi-lingual service 
        providers, such victims cannot access the services that may 
        otherwise be available. Additionally, victims who come from a 
        society where the police are not trusted, or a culture where 
        sexual violence is unmentioned or domestic violence is 
        condoned, often require a different approach to providing 
        services. Effective victim services require ready access to 
        service providers who are culturally knowledgeable and 
        sensitive to these varying needs, and programs in Arizona, 
        Georgia, Michigan, Mississippi, Nebraska, and Wyoming all 
        listed providing services to immigrant victims as a priority.
  --Services to victims in rural jurisdictions.--Too many victims in 
        rural jurisdictions still lack access to basic services. In 
        many parts of the country, victims are hundreds of miles from 
        the nearest rape crisis center or battered women's shelter. 
        Victim service providers in Alabama, Idaho, Kentucky, and 
        Montana all reported a need to expand efforts to cover multi-
        county areas through the creation of satellite offices, the use 
        of volunteers or staff to travel to victims' homes or other 
        locations; or to increase the use of the Internet to serve 
        victims in rural communities.
  --Assistance to victims with disabilities.--One area of greatest need 
        is in reaching and serving crime victims with disabilities: 
        developmentally disabled victims, mentally ill victims, hearing 
        impaired victims, and others whose disability makes them 
        simultaneously more vulnerable to crime and less able to access 
        existing services. Many service providers, including programs 
        in Michigan, Minnesota and Pennsylvania, would like to expand 
        their programs to provide appropriate services to such crime 
        victims.
  --Assistance to elderly victims.--A number of victim assistance 
        programs noted a need to increase their services to elderly 
        victims of crime, who often lack other forms of support and who 
        may require a service provider to visit them in their homes. 
        Victim assistance programs in Ohio, Pennsylvania, Texas and 
        Wyoming all listed services to elder victims as a priority.
  --Assistance to teen victims.--Many victim assistance programs are 
        hoping to extend services to teen victims of crime, especially 
        teen victims of dating violence. Providing prompt services to 
        teen victims can significantly lessen the lifelong impact of 
        crime, and programs in Indiana, Iowa, Minnesota, and Texas all 
        described a need for services to teen victims.
  --Providing more timely services to victims.--Victims in many 
        programs are waiting weeks or months to get into counseling or 
        support groups; victims in the criminal justice system may not 
        be contacted until close to the trial stage. Victim service 
        providers in Colorado, Massachusetts, New York, and Virginia 
        all spoke of the need to hire additional staff to eliminate or 
        significantly reduce such waiting periods for services.
  --Serving victims of non-violent crime.--As the incidence of identity 
        theft and fraud have increased, and the understanding of the 
        impact of non-violent crime on victims has grown, many victim 
        assistance programs, including those in Minnesota, Ohio, and 
        Pennsylvania, expressed a desire to expand their services to 
        include such victims.
  --Technology investments to enhance victim services.--Many victim 
        assistance programs reported that outdated computer equipment 
        limits their efficiency. There is also a great need for case 
        management software and assessment tools to help programs 
        improve and evaluate their effectiveness in serving victims of 
        crime. Programs in Kentucky, Pennsylvania and Texas all noted 
        such needs.
    Finally, while our first priority is to see the cap on the VOCA 
Fund raised to $685 million for fiscal year 2004, we also urge you to 
discontinue earmarks for federal positions off the top of the VOCA 
Fund. New earmarks on the Fund have been enacted over the last several 
legislative sessions, limiting the amount of money ultimately available 
to states to fund local programs. These earmarks provide for victim/
witness coordinators in U.S. Attorneys' offices, for victim assistance 
in the FBI, and for an automated victim notification system at the 
federal level. Such expenditures are expected to be nearly $34 million 
in fiscal year 2003. These earmarks result in a significant decrease in 
funding available to help the vast majority of crime victims--victims 
whose cases are prosecuted and who are served at the state and local 
levels. Such federal positions may be warranted, but surely Congress 
can find other sources of revenue to support federal employees.
    The most important action Congress can take to help this nation's 
victims of crime is to provide the funding for services and 
compensation programs that help them rebuild their lives. Congress' 
creation of the VOCA Fund in 1984 was a landmark action that 
fundamentally changed the way our society responds to victims of crime. 
We urge you to continue this great effort, by raising the cap on the 
VOCA Fund to $685 million, and resisting pressure to earmark the Fund. 
We must continue the progress of our national response to victims of 
crime.
                                 ______
                                 

 Prepared Statement of the California Industry and Government Central 
                California Ozone Study (CCOS) Coalition

    Mr. Chairman and Members of the Subcommittee: On behalf of the 
California Industry and Government Central California Ozone Study 
(CCOS) Coalition, we are pleased to submit this statement for the 
record in support of our fiscal year 2004 funding request of $500,000 
from the National Oceanic and Atmospheric Administration (NOAA) for 
CCOS as part of a Federal match for the $9.1 million already 
contributed by California State and local agencies and the private 
sector. NOAA was under contract for approximately $700,000 to measure 
winds and temperatures during the CCOS field study. Currently, NOAA is 
under contract for $250,000 to participate in the CCOS data analysis 
and modeling. This request will partially replace funding already spent 
for NOAA's participation in CCOS.
    Most of central California does not attain federal health-based 
standards for ozone and particulate matter. The San Joaquin Valley is 
developing new State Implementation Plans (SIPs) for the federal ozone 
and particulate matter standards in the 2002 to 2004 timeframe. The San 
Francisco Bay Area has committed to update their ozone SIP in 2004 
based on new technical data. In addition, none of these areas attain 
the new federal 8-hour ozone standard. SIPs for the 8-hour standard 
will be due in the 2007 timeframe--and must include an evaluation of 
the impact of transported air pollution on downwind areas such as the 
Mountain Counties. Photochemical air quality modeling will be necessary 
to prepare SIPs that are approvable by the U.S. Environmental 
Protection Agency.
    The Central California Ozone Study is designed to enable central 
California to meet Clean Air Act requirements for ozone State 
Implementation Plans (SIPs) as well as advance fundamental science for 
use nationwide. The CCOS field measurement program was conducted during 
the summer of 2000 in conjunction with the California Regional 
PM10/PM2.5 Air Quality Study (CRPAQS), a major 
study of the origin, nature, and extent of excessive levels of fine 
particles in central California. CCOS includes an ozone field study, a 
deposition study, data analysis, modeling performance evaluations, and 
a retrospective look at previous SIP modeling. The CCOS study area 
extends over central and most of northern California. The goal of the 
CCOS is to better understand the nature of the ozone problem across the 
region, providing a strong scientific foundation for preparing the next 
round of State and Federal attainment plans. The study includes six 
main components:
  --Developed the design of the field study
  --Conducted an intensive field monitoring study from June 1 to 
        September 30, 2000
  --Developing an emission inventory to support modeling
  --Developing and evaluating a photochemical model for the region
  --Designing and conducting a deposition field study
  --Evaluating emission control strategies for upcoming ozone 
        attainment plans
    The CCOS is directed by Policy and Technical Committees consisting 
of representatives from Federal, State and local governments, as well 
as private industry. These committees, which managed the San Joaquin 
Valley Ozone Study and are currently managing the California Regional 
Particulate Air Quality Study, are landmark examples of collaborative 
environmental management. The proven methods and established teamwork 
provide a solid foundation for CCOS. The sponsors of CCOS, representing 
state, local government and industry, have contributed approximately 
$9.1 million for the field study. The federal government has 
contributed $3,730,000 to support some data analysis and modeling. In 
addition, CCOS sponsors are providing $2 million of in-kind support. 
The Policy Committee is seeking federal co-funding of $6.25 million to 
complete the data analysis and modeling portions of the study and for a 
future deposition study. California is an ideal natural laboratory for 
studies that address these issues, given the scale and diversity of the 
various ground surfaces in the region (crops, woodlands, forests, urban 
and suburban areas).
    There is a national need to address national data gaps and 
California should not bear the entire cost of addressing these gaps. 
National data gaps include issues relating to the integration of 
particulate matter and ozone control strategies. The CCOS field study 
took place concurrently with the California Regional Particulate Matter 
Study--previously jointly funded through Federal, State, local and 
private sector funds. CCOS was timed to enable leveraging the efforts 
of the particulate matter study. Some equipment and personnel served 
dual functions to reduce the net cost of the CCOS field study. From a 
technical standpoint, carrying out both studies concurrently was a 
unique opportunity to address the integration of particulate matter and 
ozone control efforts. To effectively address these issues requires 
federal assistance.
    For fiscal year 2004, our Coalition is seeking funding of $500,000 
from the National Oceanic and Atmospheric Administration (NOAA). 
Meteorological data were continuously collected during the CCOS field 
program. Extensive meteorological data collected as part of the field 
study can be used by NOAA to strengthen its ongoing research activities 
such as improving meteorological forecasting and providing information 
on weather conditions along the Pacific coast for use in U.S. weather 
models. In addition, CCOS provides data for research on air flows in 
complex terrain. The improved results obtained from this research have 
national applicability.
    Thank you very much for your consideration of our request.
                                 ______
                                 

   Prepared Statement of the Monmouth University School of Science, 
                       Technology and Engineering

      ESTABLISHMENT OF THE CENTER FOR COASTAL WATERSHED MANAGEMENT

    The Department of the Interior's policies and practices reflect the 
fact that clean water is essential to all Americans. Water resources in 
the United States provide water to drink, water to irrigate crops, 
provide habitat for a diversity of fish and wildlife, as wells as 
provide for recreational opportunities such as fishing, boating, and 
swimming. However, the U.S. Environmental Protection Agency (EPA) has 
acknowledged that a majority of our watersheds have water quality 
problems that include contamination with pathogens or toxic chemicals, 
nutrient enrichment, fish and wildlife habitat loss, and invasive 
species. According the EPA, these problems continue to impair 
watersheds nationwide and prohibit the attainment of water quality 
goals. They conclude by stating that problems are complex and varied, 
and that governments working alone cannot solve all of them.
    The Nation's fish and aquatic resources are among the richest and 
most diverse in the world and annually they provide ecological, social, 
and economic benefits to citizens and visitors. However, despite 
efforts to conserve fish and other aquatic resources, a growing number 
are declining and in need of special protection or management efforts 
in some part of their natural or historic range. According to the U.S. 
Fish and Wildlife Service (FWS), the reasons for these declines are 
linked largely to habitat loss or alteration and the impacts of harmful 
exotic or transplanted species. To move forward in efforts to conserve 
and manage aquatic resources and their habitats across the country, FWS 
acknowledges the need to take an ecosystems approach and form 
partnerships that promote collaboration among governmental agencies, 
organizations, and individuals.

Rationale for a Coastal Watersheds Approach
    New Jersey is a state richly endowed with coastal resources. These 
resources support traditional fisheries and maritime industries as well 
as more contemporary businesses and rapidly growing new concepts in 
residential development. However, because of the rapid growth of both 
resident and tourist populations, the nation's most densely populated 
state faces enormous pressures balancing growth demand with the limited 
nature of its coastal resources.
    The marine ecosystems within the state currently exhibit signs of 
stress and deterioration, as documented in the scientific and popular 
literature. As coastal use and development increase and coastal 
population continues to rise, impacts on the environment will become 
even more severe. Among the most important impacts of concern in the 
coastal zone are degradation and loss of habitats and the deterioration 
of water quality.
    The health and vitality of New Jersey's marine resources are 
dependent upon the ability of governmental decision-making processes to 
protect and enhance the coastal environment and reduce environmental 
risk associated with unwise development and waste disposal practices. 
However, throughout the past decade New Jersey citizens have been 
disillusioned by what many perceive as an apparent inability to 
properly manage the coastal zone even after such events as beach 
closures, nuisance algal blooms, fish kills, contamination of habitats 
and organisms with pathogens and toxic chemicals, sewage treatment 
problems, depletion of fish stocks, and rampant coastal development 
resulting in nonpoint pollution problems in ocean waters, coastal bays, 
their tributaries and watersheds. A significant part of this 
frustration is due to the inability of multiple governmental units to 
collectively respond to very complex environmental phenomena.
              the center for coastal watershed management

Progress To Date
    Projects conducted by the Monmouth University Center for Coastal 
Watershed Management will assist federal, state and local agencies, 
communities, and organizations in achieving their goals and objects as 
they relate to coastal watersheds and their natural and living 
resources.
    During the past year, as plans for the Center for Coastal Watershed 
Management were under development at Monmouth, a number of projects 
dealing with watershed research and education were initiated:
  --Bacterial source tracking (BST) methodologies are being used for 
        identification of specific sources of fecal contamination in 
        local rivers, lakes, and estuaries.
  --Rapid bioassessment (RBA) techniques are being used to characterize 
        several streams and lakes in Monmouth County.
  --Fish communities in Whale Pond Brook, Deal Lake, Wreck Pond and the 
        Manasquan River Estuary are being characterized using passive 
        and active fishery sampling techniques.
  --Local watershed and community groups have been assisted with 
        organization and implementation of stream cleanups and 
        assessments of impairments to the Whale Pond Brook and Poplar 
        Brook watersheds.
  --STE has hosted or conducted numerous seminars and workshops dealing 
        with coastal and watershed issues in conjunction with a variety 
        of groups:
    --Atmospheric Deposition (NJ Sea Grant Program)
    --Nuisance Algal Blooms (NJ Sea Grant Program)
    --Early Life History of Fishes of the Mid-Atlantic (NOAA/NMFS)
    --Watershed Educators Workshop (NJDEP/Monmouth County)
    --Stormwater Management and Restoration Techniques for Coastal 
            Ponds and Lakes (NJDEP/Monmouth County)
    --Volunteer Watershed Monitoring (NJDEP/Monmouth County)
    --Watershed Area 12 Congress (NJDEP/Monmouth County)
    --Water Monitoring Training Course (Monmouth County/YSI, Inc.)

Current and Future Objectives
    In New Jersey, persistent coastal issues remain to be addressed, 
including nonpoint source pollution, headwaters destruction, deposition 
of pollutants into waterways, and habitat degradation. The State of New 
Jersey has acknowledged the need for creative, comprehensive solutions 
to watershed preservation, protection, and management. In 1997, 
Department of Environmental Protection (NJDEP) began implementing a 
statewide watershed management framework to provide a means to further 
restore and maintain the physical, chemical, and biological integrity 
of waters in the state using sustainable management principles that 
allow a more holistic, rather than site-specific, approach to most 
effectively protect water resources. The state's watershed management 
framework is based on three key components: a geographic focus; 
continuous improvement based on sound science; and partnership/
stakeholder involvement.
    The Monmouth University Center for Coastal Watershed Management (MU 
CCWM) will be housed within the School of Science, Technology and 
Engineering. The Center will spearhead the application of science and 
technology to the effective management of watershed resources in New 
Jersey's coastal environment. The Center, in partnership with the 
Monmouth County Health Department and with other regional 
organizations, will serve as a focal point for the development of 
leading edge approaches to the solution of problems facing local 
communities and decision-makers at all levels of government by:
  --Promoting interdisciplinary studies of coastal watersheds by 
        Monmouth University faculty, students, associates, and 
        colleagues; and
  --Fostering collaboration between citizens, watershed and community 
        organizations, governmental agencies, local businesses, the 
        scientific community, and other parties interested in watershed 
        management and restoration.
    Specific objectives of the Monmouth University Center for Coastal 
Watershed Management include:
  --Strengthen teaching, research, and outreach at Monmouth University 
        with emphasis on programs crossing university departmental 
        boundaries as they relate to the environmental, social, and 
        economic aspects of coastal watershed management.
  --Provide a forum for the integration of knowledge from a wide array 
        of technical disciplines in addressing watershed management 
        issues.
  --Establish an analytical capability to provide scientific 
        information necessary for making informed watershed management 
        decisions.
  --Facilitate access to objective and scientifically sound information 
        on effective techniques to protect and restore coastal and 
        urban watersheds.
  --Conduct community outreach programs highlighting the need for 
        greater protection of our waters and reliable and effective 
        ways of protecting and restoring coastal and urban watersheds.
  --Conduct workshops and special programs for pre-college students and 
        educators from local school districts.
  --Conduct continuing professional education programs for practicing 
        professionals in the form of short courses, workshops, and 
        seminars.
  --Involve undergraduate students in faculty-supervised independent 
        research related to ecology, natural resource management, 
        environmental and resource economics, and local environmental 
        issues.
  --Maximize University participation in the local, regional, and 
        statewide watershed initiatives.
                                 ______
                                 

      Prepared Statement of the American Museum of Natural History

About the American Museum of Natural History
    The American Museum of Natural History [AMNH] is one of the 
nation's preeminent institutions for scientific research and public 
education. Since its founding in 1869, the Museum has pursued its 
mission to ``discover, interpret, and disseminate--through scientific 
research and education--knowledge about human cultures, the natural 
world, and the universe.'' It is renowned for its exhibitions and 
collections of more than 32 million natural specimens and cultural 
artifacts. With nearly four million annual visitors--approximately half 
of them children--its audience is one of the largest, fastest growing, 
and most diverse of any museum in the country. Museum scientists 
conduct groundbreaking research in fields ranging from all branches of 
zoology, comparative genomics, and informatics to earth, space, and 
environmental sciences and biodiversity conservation. Their work forms 
the basis for all the Museum's activities that seek to explain complex 
issues and help people to understand the events and processes that 
created and continue to shape the Earth, life and civilization on this 
planet, and the universe beyond.
    Today more than 200 Museum scientists with internationally 
recognized expertise, led by 46 curators, conduct laboratory and 
collections-based research programs as well as fieldwork and training. 
The Museum's research programs are organized under five divisions 
(Anthropology; Earth, Planetary, and Space Sciences; Invertebrate 
Zoology; Paleontology; and Vertebrate Zoology), along with the Center 
for Biodiversity and Conservation (CBC). The Museum also conducts 
graduate training programs in conjunction with a host of distinguished 
universities, supports doctoral and postdoctoral scientists with highly 
competitive research fellowships, and offers talented undergraduates an 
opportunity to work with Museum scientists.
    The Museum's Center for Biodiversity and Conservation, founded in 
1993, is dedicated to enhancing the use of rigorous scientific data to 
mitigate critical threats to global biodiversity. The CBC draws on the 
strengths of the Museum's scientific, education, and exhibition 
departments to integrate this information into the conservation process 
and to disseminate it widely. It forges key partnerships to conduct 
conservation-related field projects around the world, train scientists, 
organize scientific symposia, present public programs, and produce 
publications geared toward scientists, policy makers, and the lay 
public. Each spring, the CBC hosts symposia that focus on conservation 
issues. In 2002, the symposium, ``Sustaining Seascapes: the Science and 
Policy of Marine Resource Management,'' was co-sponsored by NOAA's 
Marine Protected Areas Center, along with other federal and private 
organizations, and examined the large-scale conservation of marine 
ecosystems, giving special consideration to novel approaches to the 
sustainable management of biodiversity and fisheries. The focus of 
2003's symposium, held March 20-21, was on conservation issues related 
to increased ecotourism in Southeast Asia.
    The Museum's vast collections are a major scientific resource, 
providing the foundation for the Museum's interrelated research, 
education, and exhibition missions. They often include endangered and 
extinct species as well as many of the only known ``type specimens''--
examples of species by which all other finds are compared. Within the 
collections are many spectacular individual collections, including the 
world's most comprehensive collections of dinosaurs, fossil mammals, 
Northwest Coast and Siberian cultural artifacts, North American 
butterflies, spiders, Australian and Chinese amphibians, reptiles, 
fishes, and one of the world's most important bird collections. 
Collections such as these are historical libraries of expertly 
identified and documented examples of species and artifacts, providing 
an irreplaceable record of life on earth. They provide vital data for 
Museum scientists as well for more than 250 national and international 
visiting scientists each year.
    An exciting chapter in the Museum's history will occur this spring 
when one of the flagship and most popular halls--the Hall of Ocean 
Life--reopens after an extension renovation. Drawing on the Museum's 
world-renowned expertise in Ichthyology as well as other areas of 
vertebrate as well as invertebrate zoology, the Hall will be pivotal in 
educating visitors about the oceans' key role in sustaining life on our 
planet. It will feature two new ``Spectrum of Life'' walls highlighting 
the extraordinary diversity of marine life, a completely renovated two-
story diorama of the Andros Coral Reef, a spectacular sea floor slab 
from the late Jurassic Period, and panels showcasing fossil specimens 
and some of the earliest signs of life on Earth, as well as the 
beloved, and refurbished, 94-foot-long giant blue whale. The renovated 
Hall of Ocean Life, together with the new Halls of Biodiversity, Planet 
Earth, and the Universe and the rebuilt Hayden Planetarium (part of the 
new Rose Center for Earth and Space), will provide visitors a seamless 
educational journey from the universe's beginnings to the formation and 
processes of Earth to the extraordinary diversity of life on our 
planet.
    With the reopening of the Hall of Ocean Life, the Museum will have 
a singular opportunity for public education about marine environments, 
and it will draw on its vast educational resources to do so. In its 
Halls of Biodiversity, Planet Earth, and Ocean Life, the Museum 
presents current science news through Science Bulletins--multimedia 
productions that bring the latest science news and discoveries to the 
public using high-definition video documentaries, kiosks, and the web. 
The Bulletins will present features on such issues as marine 
biodiversity report, ocean life discoveries, and more. In addition, the 
Museum's Education Department provides standards-based curricular 
materials and on-site programs for more than 400,000 students and 
teachers who visit the Museum in school and camp groups each year, as 
well as professional development programs for teachers, Moveable 
Museums that travel to schools and community sites, a model after-
school program, award-winning online educational resources, and 
lectures, workshops, and field excursions for adult learners. The 
Museum's National Center for Science Literacy, Education, and 
Technology, launched in 1997 in partnership with NASA, employs 
innovative technologies to bring educational materials and programs to 
online audiences nationwide.

              COMMON GOALS OF NOAA AND THE AMERICAN MUSEUM

    Today, as throughout its history, the National Oceanic and 
Atmospheric Administration [NOAA] is committed to describing and 
predicting changes in the Earth's environment and to conservation and 
wise management of the nation's coastal and marine resources. It 
dedicates itself to forecasting environmental changes, providing 
decision makers with reliable scientific information, and fostering 
global environmental stewardship.
    The American Museum shares NOAA's commitment to these environmental 
goals and to the scientific research, technologies, and public 
education that underlie them. Indeed, informed environmental 
stewardship and preservation of our planet's biodiversity and 
resources--in marine, coastal, and other natural environments and 
habitats--are integral to the Museum's most fundamental purposes. 
Museum scientists conduct research worldwide on conservation biology 
and habitat protection. Their investigations advance scientific 
understanding and public awareness of these vital issues. The Museum 
has also long been at the forefront of developing new research modes 
and methods, and today, throughout the science divisions and the CBC, 
AMNH investigators are exploring applications of GIS and remote sensing 
technologies to advance research pertinent to conservation and 
protecting threatened species and habitats.
    The research programs of the CBC and the science divisions are 
enhanced by the Museum's research resources and technological capacity. 
New research tools--including molecular technologies, new collection 
types, innovations in computation, and GIS and remote sensing--are 
revolutionizing the way research can be conducted and data analyzed, as 
well as the way museum collections can be used and accessed by 
scientists, educators, policy makers, and the general public. The 
Museum has significant resources in these areas which it would bring to 
bear in its proposed partnership with NOAA. These include the 
following:
    Molecular Laboratories.--The Museum's molecular systematics program 
is at the leading edge of comparative genomics and the analysis of DNA 
sequences for evolutionary research. It includes two Molecular 
Systematics Laboratories, with sophisticated technologies for 
sequencing and advanced genomics research. In these laboratories, more 
than 40 researchers in molecular systematics, conservation genetics, 
and developmental biology conduct their research on a variety of study 
organisms.
    Frozen Tissue Collection.--The Museum is expanding its collections 
to include preserved biological tissues and isolated DNA in its new 
super-cold storage facility. This collection is an invaluable resource 
for research in many fields, including conservation biology, genetics 
and comparative genomics because it preserves genetic material and gene 
products from rare and endangered organisms that may become extinct 
before science fully exploits their potential. Capable of housing one 
million specimens, it will be the largest super-cold tissue collection 
of its kind. In the past two years, 15,000 specimens not available at 
any other institute or facility have already accessioned. At the same 
time, the Museum is pioneering the development of collection and 
storage protocols for such collections. To maximize use and utility of 
the facility for researchers worldwide, the Museum is also developing a 
sophisticated website and online database that includes collection 
information and digitized images.
    Supercomputing.--Museum researchers now have onsite access to a 
560-processor cluster--the fastest parallel computing cluster in an 
evolutionary biology laboratory and one of the fastest installed in a 
non-defense environment. This computing cluster, constructed in-house 
from scratch, represents one of the key achievements of Museum 
scientists who, over the last eight years, have taken a leadership role 
in developing and applying new computational approaches to deciphering 
evolutionary relationships through time and across species. Their 
groundbreaking efforts in cluster computing, algorithm development, and 
evolutionary theory have been widely recognized and commended for their 
broad applicability for biology as a whole. Indeed, the bioinformatics 
tools these Museum scientists are creating will not only help to 
generate evolutionary scenarios, but also will inform and make more 
efficient large genome sequencing efforts pertinent to biodiversity 
science as well as be applicable in other informatics contexts, in non-
genomics areas of evolutionary biology as well as in other disciplines.
    Remote Sensing and Geographical Information Systems Technologies.--
The CBC houses a Remote Sensing/Geographical Information Systems (RS/
GIS) lab which has had noted success since it was launched in the fall 
of 1998. Wise conservation policy requires effective knowledge of the 
distribution of species and ecological communities at local, regional, 
and global scales. Without this information, it is difficult to decide 
where to allocate scarce conservation resources. Remote sensing 
technologies can provide essential data on such things as land-cover 
and land-use, as well as sea surface temperatures and chlorophyll 
content. GIS makes it possible for scientists to compare and visualize 
the relationships among satellite and legacy data, raw standardized 
samples, and data obtained through ground truthing. Because it provides 
the database backbone than can connect field work to analysis, GIS is 
becoming an indispensable component in environmental data analysis and 
is thus revolutionizing work in conservation.
    The CBC uses its RS/GIS technologies in biodiversity and marine 
reserve research in various ways--for example, to identify sites 
suitable for biological inventory; to provide supplementary 
quantitative and qualitative data in and around study sites (e.g. 
extent of habitat fragmentation); and to develop persuasive visual 
depictions and digital presentations for reports, publications, and 
meetings.
    Building on the scientific strengths and resources outlined above, 
the Museum now proposes to launch, in partnership with NOAA, a basic 
and applied research initiative that employs the latest technologies to 
advance scientific understanding of resource management and stewardship 
issues for marine and coastal environments. The explosion of research 
technologies creates a unique window of opportunity for the Museum to 
develop new ways to integrate these state-of-the-art analytical tools 
into its biological and environmental research, as well as to present 
results to the public in its exhibition halls, websites, and 
educational programs. It is this intersection of research capability 
and technological opportunity that underlies the planned initiative.
    The Museum proposes a multifaceted initiative to include work in 
areas of concern it shares with NOAA, such as the following:
    Conservation research using GIS.--Museum vertebrate and 
invertebrate zoologists carry out ambitious field work and collection 
expansion programs throughout the tropical freshwaters of the globe, 
conduct biotic surveys, and explore marine ecosystems:
  --Ichthyologists, for example, study the evolution, behavior, and 
        conservation of the largest and most diverse populations--and 
        one of the most endangered of all vertebrate groups--the 
        fishes. Their work concerns not only discovery and 
        classification of many still unknown species but also the 
        protection and conservation of many species whose habitats and 
        survival are at risk.
  --Invertebrate zoologists are discovering many species of marine 
        invertebrates. Field research in the Florida Keys, for 
        instance, is documenting for the first time the extraordinary 
        biodiversity of marine mollusks.
    These researchers, in studying endangered ecosystems, marine 
species, and marine reserves, can use GIS to develop finer, tighter, 
more precise datasets. Also, GIS analysis enables them to ask more 
sophisticated and flexible questions, and to discover patterns, series, 
and gradations.
    Biodiversity conservation.--CBC investigators are conducting 
important research field projects relying on the capacities of GIS/RS. 
They include:
  --Marine reserve networks.--Researchers in the CBC's marine program 
        are using GIS to analyze the physical, biological, and cultural 
        processes affecting coral reef systems in the Bahamas. GIS is 
        an indispensable tool in this research, because it allows the 
        researchers to integrate maps with sets of biophysical and 
        socioeconomic data and to create dynamic models for testing 
        hypotheses about marine reserve networks in a spatially 
        realistic framework.
  --Humpback whales in Madagascar.--Collaborating researchers from the 
        American Museum and the Wildlife Conservation Society are using 
        GIS to track the migrations of Humpback whales in the western 
        Indian Ocean region. They are creating a database that contains 
        identification photos, biopsies, DNA sequences, and sighting 
        information for hundreds of individual whales. Being able to 
        identify individuals at the genetic level will enable 
        researchers to unravel the complex migration patterns of 
        Humpbacks with greater accuracy, thus improving conservation 
        practices and increasing understanding of marine sanctuaries, 
        the status of whales, their population structure, abundance, 
        and recent trends in their distribution.
  --Biotic surveys and inventories.--The CBC conducts floral and faunal 
        surveys in ecologically threatened regions of Bolivia and 
        Vietnam. Both countries are extremely rich in biodiversity that 
        is threatened by high rates of deforestation and inadequate 
        conservation planning. These biotic surveys provide essential 
        data on the distribution and abundance of species, thus 
        enabling researchers to analyze the role of climate change on 
        land cover and develop plans to reduce threats to biodiversity. 
        They also create an opportunity for Museum researchers to train 
        local field biologists and conservation managers how to conduct 
        surveys using remote sensing data and biophysical measures and 
        how to apply results to the long-term management and 
        conservation of biodiversity.
    Collections data and access.--Museum researchers can use GIS to 
bring the Museum's vast collections alive and to increase exponentially 
the analyses that researchers can carry out for conservation research 
and decision making. By coupling GIS with the Museum's increasingly 
strong web presence to provide easy access, researchers worldwide will 
be able to pose more sophisticated questions and uncover new 
connections and relationships among the collections data. For example, 
by using georeferenced data, researchers can compare current maps with 
legacy data to trace environmental changes over time.
    Public education and outreach.--As an added benefit of the proposed 
partnership with NOAA, the Museum plans to feature current NOAA-related 
science and discovery in the renovated Hall of Ocean Life as well as in 
its other educational programs and resources. With access to GIS 
applications and datasets, the Science Bulletins, for example, can 
promote public understanding of current science through global earth 
science-related datasets, maps, and more.
    These research applications for GIS and other technologies 
demonstrate the Museum's enormous potential for using cutting-edge 
tools to help advance environmental forecasting, provide decision 
makers with reliable scientific information, and foster global 
environmental stewardship.
    We therefore request $1 million to join in partnership with NOAA to 
advance basic and applied research that will strengthen resource 
management and conservation of marine and coastal environments and 
public understanding of these issues. In so doing, the Museum will 
support its participatory share with funds from nonfederal as well as 
federal sources. By generating critical scientific knowledge about the 
vital role of ocean and marine environments, we can advance our shared 
commitment to environmental stewardship so pivotal to our nation's and 
our planet's health.
                                 ______
                                 

         Prepared Statement of the City of Gainesville, Florida

    Mr. Chairman: On behalf of the City of Gainesville, Florida, I 
appreciate the opportunity to present this written testimony to you 
today. The City of Gainesville is seeking federal funds in the fiscal 
year 2004 Commerce, Justice, State and Judiciary Appropriations bill to 
assist with the following innovative projects the City is undertaking:
  --The Joint Communications Project, to facilitate communication and 
        data sharing between our urban area public safety and court 
        system agencies. The project is an innovative crime data 
        gathering, reporting and training system that will include a 
        Geographic Information System (GIS), interactive Internet/
        Intranet applications, Crime Mapping and automated reporting 
        through the use of laptop computers. The goal is to obtain 
        accurate, timely information that will be shared with the 
        appropriate criminal justice system entities and/or individuals 
        and to focus efforts on training others in this highly 
        technical area of law enforcement.

Joint Communications Project
    The City of Gainesville seeks a federal funding strategy to 
implement an innovative crime data gathering, reporting and training 
system that will include a Geographic Information System, (GIS), 
interactive Internet/Intranet applications, Crime Mapping and automated 
reporting through the use of laptop computers. Though portions of this 
project have been attempted by other agencies, the Gainesville Police 
Department will become one of the first law enforcement agencies in the 
state to gather, analyze and provide information regarding crime and 
quality of life type incidents in such an efficient, comprehensive and 
automated manner.
    The goal is to obtain accurate, timely information that will be 
shared with the appropriate criminal justice system entities and/or 
individuals and to focus efforts on training others in this highly 
technical area of law enforcement. At least one outcome of this effort 
will be the facilitation of communication and data sharing between our 
urban area public safety and court system agencies through the use of 
system-wide technology upgrades. The impact for the entire region is 
considerable, since this county serves as the regional center for much 
of rural north Florida's medical care, disaster management, and 
criminal justice services. The estimated funds needed to continue these 
efforts are $4.77 million.
    The City of Gainesville, located in the north central portion of 
the State of Florida, is a diverse community of 110,000 and serves as 
the county seat for Alachua County and its additional 130,000 
residents. Gainesville is the home of the University of Florida and 
serves as the regional business center for the surrounding, 
predominately rural counties. The community is served primarily by 
three law enforcement agencies, the Gainesville Police Department, the 
University Police Department and the Alachua County Sheriff's Office 
representing approximately 625 sworn men and women. The City of 
Gainesville has been a proven leader for many years in the field of law 
enforcement with innovative programs developed here being adopted by 
agencies from around the nation. Over the past 15 years the City has 
been dedicated to the principles of Community Oriented Policing and is 
one of the few agencies in the nation to apply its concepts department 
wide. The City and County serve as the regional center for much of 
rural north Florida's medical care, disaster management, and criminal 
justice services.
    The need for this system is driven by the lack of availability of 
resources provided to tier 1 (population over 250,000) and tier 2 (seat 
of government) cities that have been funded by prior Federal 
initiatives. Although the region has a total population over 450,000 
and geographic area of 8,500 square miles, it is not within the primary 
grant recipient categories in previous efforts. However, considerable 
efforts have been made to provide resources through other means and 
utilizing existing resources. The estimated funds needed to continue 
these efforts are $4.77 million.
    This community faces problems endemic to communities nationwide. In 
a time where the individual on the street can obtain any amount of 
immediate and up to date information, the law enforcement officer must 
often make decisions based on information that is incomplete or out of 
date. The City of Gainesville has taken steps to attempt to partially 
remedy this situation by combining communications systems with area law 
enforcement in an effort allowing neighboring agencies to at least 
communicate by voice transmission. What we are seeking is the funding 
to take these initial steps to the next level providing the officer on 
the street with clear, complete, and accurate information about the 
situations they encounter. Included in this project is the benefit of 
data sharing between agencies working in this community allowing better 
informed decision making and improved distribution of resources. The 
various portions of this program are designed to work together to 
provide improved, more effective service to the residents of this 
community.
    The project consists of:
  --Equipping law enforcement, fire personnel and emergency medical 
        responders with interoperable mobile data communications 
        system. ($3.54 million), and
  --System wide upgrades to improve data collection, incident 
        assignment and dissemination of data to allow combined 
        operations. ($1.23 million).
    Communications interoperability and accurate, timely data 
collection are crucial to law enforcement and disaster response. Recent 
events such as acts of domestic terrorism, natural disasters, anti-war 
protests and mass casualty tragedies have highlighted the importance of 
coordinated interactions among public safety agencies from all levels 
of government. This ability to interoperate among public safety 
responders can be measured in lives saved. Interoperability consists of 
the ability of public safety personnel from one agency to communicate 
by radio and data transmission with personnel from other agencies on 
demand and in real time. To achieve interoperability requires improving 
public safety wireless communications by addressing each of the five 
areas of interoperability--coordination and partnerships, funding, 
spectrum, standards and technology, and security.
    The Alachua County Sheriff, with funding from the City and County, 
operates a combined communication center constructed in fiscal year 
2000 with $4.2 million in local funding. The center serves five law 
enforcement agencies, eleven fire rescue agencies, the county 
correctional facility, multiple government agencies of the city and 
county, a regional airport, and an industrial fire brigade. The local 
city owned utility, Gainesville Regional Utilities, provides an owned 
and operated 800 Mhz. Trunked Radio System (voice-only) to all of these 
agencies, along with another, the University of Florida's Police 
Department. This project has demonstrated the nadir of the 
interoperability standard promulgated by the FCC and other Federal 
agencies. The infrastructure for digital interoperability has also been 
built into the system, but thus far only one agency, because of its 
small numbers of units, has been able to make that next step into 
wireless data communications. The funds being sought for data 
interoperability will take the system to the next step by enhancing 
joint response capability, information sharing, data acquisition, 
intelligence gathering and dissemination, data security, and agency 
efficiency. While each entity alone and in joint projects such as the 
communications center has attempted to address these shortcomings, the 
high capital cost of these acquisitions is the major stumbling block to 
providing the final step to what is truly the pinnacle of 
interoperability achievement in a medium-sized community (225,000 total 
county population).
    The utilization of a mobile data system has numerous advantages for 
the law enforcement officer as well as for the public. Removing the 
reliance on strictly verbal communication by way of radio and widening 
the information flow through direct data communications results in an 
enhancement of the ability to successfully resolve problems in the 
field. Laptop computers as in-car computer aided dispatch terminals 
significantly increase the ability for public safety officers to 
communicate.
    Computers used in this manner can perform many important tasks. The 
mobile data computers can send and receive information between the 
officer and the dispatcher, including calls for service. Non-emergency 
calls are forwarded from the dispatcher to the appropriate unit without 
the need to transmit the information verbally over the radio, thus 
saving ``air-time'' for use in emergency situations and reducing the 
possibility of misunderstanding or receiving incorrect information. 
This also allows an increase in the amount of information the officer 
in the field has available in responding to situations. Additionally 
there is the potential for a decrease in the need for additional 
dispatchers even if the number of calls for service increases.
    Through the use of mobile data computers officers and supervisors 
can find the location of other officers and check on their current 
status. Eliminating the need for officers to request this information 
from a dispatcher gives all members of the agency a complete picture of 
the availability of officers for calls for service. Officers can also 
refer to information about calls awaiting dispatch and information 
regarding previous calls for service. Officers would be able to view 
past and current activity within his/her assigned area. Obtaining 
pertinent information in a timely manner permits the officer(s) to make 
more informed strategic and investigative decisions. This accessibility 
to information would permit officers to better inform citizens and 
business owners regarding activities. In addition officers would be 
able to communicate vehicle-to-vehicle by sending messages from one 
officer to another. This eliminates the need for officers to use ``air-
time'' with less important transmissions. Law enforcement officers can 
conduct computer checks on wanted persons and stolen vehicles without 
having to tie up a dispatcher. This allows officers to check a large 
number of persons and vehicles, which can significantly increase the 
number of people who are arrested for warrants and the number of 
recovered stolen vehicles. A single dispatcher can only handle one (1) 
request at a time, while the computer system can handle numerous 
requests at the same time.
    In a time where crime knows no geographical boundaries, the ability 
to easily share timely information between differing agencies is of 
great importance. The ability for field officers to share information 
is a growing concern. Incidents spill across jurisdictional boundaries 
and there is an increasing need to share resources between agencies. 
The widening of the data pipeline to the field officer allows more 
flexibility and increases the amount of information readily available. 
The use of mobile data computers would allow increased and easier 
information sharing which should improve the ability of officers to 
respond to most situations.
                                 ______
                                 

              Prepared Statement of the Hoopa Valley Tribe

    He Yung: my name is Clifford Lyle Marshall, Chairman of the Hoopa 
Valley Tribe. The Hoopa Valley Tribe is located in Northern California 
and in the County of Humboldt. Our treaty was signed providing the 
whole Hoopa Valley as a reservation. It was not until 1876 that an 
executive order was signed acknowledging this treaty. Since first 
European contact the culture and tradition remains to this day.
    The culture of the Hoopa Valley People is a way of life. Our 
ceremonial dances are healing or payer dances. These dances are held 
for spiritual meaning performed at sacred places, to balance the world. 
The Hoopa Valley People lived in harmony for over 10,000 years prior to 
European Contact. We had our own laws and rules that our people 
followed to live together and settle controversial issues by a form of 
payment.
    Currently we have a Tribal Court and Tribal Police Department that 
operates on a daily basis and is utilized by the Hoopa and surrounding 
Communities. We do not receive any of the monies for fines or tickets 
issued on the Hoopa Valley Tribal Reservation this money is collected 
by the State of California. This is not helping our community as far as 
administering the law enforcement or Tribal Court Programs. Our 
community looses approximately $750,000 annually in fines that should 
be distributed back to the Hoopa Valley Tribe to offer more services to 
our community. Further, the county refers probationary matters, such as 
counseling and the like, to our Human Services Department without 
paying part of expenses. This is becoming costly and burdensome to the 
Tribe.
    Law Enforcement operations consist of many diverse activities which 
are directed toward the attainment of Department objectives. Activities 
such as patrolling and issuing traffic citations are not objectives in 
themselves, rather, they are methods of achieving the real objectives 
of preventing and deterring crime, arresting criminal offenders, and 
preventing traffic accidents.
    Law Enforcement needs:
  --15 Full Time Officers (at $36,000 per year) = $540,000.00
  --6 Part Time Positions (at $18,000 per year) = $108,000.00
  --7 Dispatchers
  --2 Full-time:  $22,880.00 = $160,160
  --5 Part-time  $11,440.00 = $57,200
  --Vehicles: 3 at 35,000 = $105,000
  --Gas/maintenance/other = $50,000
  --Communications = $12,000.00
Tribal Court Needs
    A new building. The current building is over 78 years old. We are 
growing as a community and will need to grow to accommodate the needs 
as follows:
  --Automated Case Management System: $26,000
  --Personnel and Automated Court Services: $395,000
  --Law Library: $15,457
  --Structural Modification: $1,336,000.00
  --Tribal Court Improvements: $43,800

                     TRIBAL COURT NEEDS ASSESSMENT

    The Hoopa Valley Tribal Court's prospective improvements are listed 
below according to the level of priority within each category. We have 
included a brief summary of information, which follows each list. 
Please note that some of the items are listed below as autonomous 
functions and the court lists them in the interest of demonstrating 
their supplemental impact upon the court's ability to function 
effectively within our jurisdiction.

Unresolved Essential Tribal Court Needs
  --Automated Case Management System $26,000.00
  --Telephone System with Voice Mail
    Our court currently operates on a hard paper file system with very 
little computer management backup. This creates a burden upon the court 
because it compromises the court's ability to effectively manage its 
caseload. As our caseload begins to increase as a result of recent 
legislative activity, the daily operations of the tribal court will 
increasingly begin to diminish in the absence of the above listed 
requirements.
    Our current telephone system is antiquated and problematic. Our 
Court employs the use of a single answering machine, which makes it 
necessary to personally manage all incoming telephone calls, which is 
often an ineffective use of the current clerk's time.

Funding Requirements for Personnel and Ancillary Court Services
            Existing Positions
  --Court Liaison Officer/Bailiff Subsidization $24,000.00
            Proposed Positions
  --Deputy Court Clerk $27,000.00
  --Public Defender $45,000.00
  --Probation Officer $40,000.00
  --Mediator/Mediation Services Provider $70,000.00
  --Associate Judge $60,000.00
  --Legal Aid Provider $36,000.00
  --Guardian Ad Litem $46,000.00
  --Public Guardian $47,000.00
    Our existing personnel have repeatedly proven themselves committed 
both to the Tribal Court and to its community. Although the budget has 
not previously allowed for any substantial increases, the tribal court 
staff deserves to be adequately compensated for their exemplary work. 
The Hoopa Valley Tribal Police Department has recently provided the 
court an opportunity to utilize a Court Liaison Officer who functions 
as a liaison between the court, the law enforcement department, and the 
community. The court would like to retain this myriad of services by 
supplementing the CLO salary in conjunction with the Hoopa Valley 
Tribal Police Department.

Law Library
  --Three Computers $6,000.00
  --One Computer Printer $257.00
  --Subscription to Lexis-Nexis on line legal search engine $600.00
  --Self Help Legal Aid Manuals $8,600.00
    Our Court is required to provide a legal library to the public. 
This library currently consists of the entire Hoopa Valley Tribal Law 
and Order Code and the Indian Law Reporter. These often prove sorely 
inadequate in meeting our public's needs. We would ultimately like to 
provide three computers that would allow citizens to conduct legal 
research via a computer generated legal search engine. We would also 
like to empower our litigants to represent themselves using Self-Help 
manuals that we would provide in our library.

Necessary Structural Modifications
  --Secured Parking Area $10,000.00
  --Court Renovation $126,000.00
  --Juvenile Detention Facility $585,000.00
  --Youth Regional Treatment Facility $615,000.00
    The court staff currently utilizes 90 percent of the court's 
available parking. This creates a problem for persons attempting to 
access the court. Our courthouse also needs a great deal of structural 
renovation. Our courthouse has had very basic maintenance services in 
the 38 years that it has existed. Our building requires a great deal of 
renovation and preventive maintenance in order to secure its continued 
existence for the coming years. We have a new juvenile justice avenue 
available in our court. The effectiveness of this juvenile court would 
be tenfold with the use of ancillary programs such as a detention 
facility and a treatment facility. The court is ready to assist 
juveniles and the families of juveniles in need, and these ancillary 
programs would greatly increase our effectiveness in doing so.

Tribal Court Improvements
    Tables, Chairs, Desks $10,000.00
    Fireproof File Cabinets $800.00
    Metal Detector $5,000.00
    Court Automobile $28,000.00
    Some additional minor improvements such as these listed above would 
assist in the daily functioning of the court. Our courtroom needs 
plaintiff and defendant tables, and we are currently utilizing very old 
court furniture that belongs to the state court. We need additional 
file cabinets with the ability to protect our files from damage, and 
security and convenience necessitate the additional listed items.
                                 ______
                                 
Prepared Statement of the National Association of University Fisheries 
                         and Wildlife Programs

    The National Association of University Fisheries and Wildlife 
Programs (NAUFWP) appreciates the opportunity to submit testimony 
concerning the National Sea Grant Program in the fiscal year 2004 
budget of the National Oceanic and Atmospheric Administration (NOAA). 
NAUFWP represents approximately 55 university programs and their 440 
faculty members, scientists, and extension specialists, and over 9,200 
undergraduates and graduate students working to enhance the science and 
management of fisheries and wildlife resources.
    The Office of Oceanic and Atmospheric Research (OAR) is the main 
research arm of NOAA, contributing to all other Line Offices and 
Strategic Plan goals and providing the scientific basis for national 
policy decisions in key areas. OAR supports a world-class network of 
scientists and environmental research laboratories, and partnerships 
with academia and the private sector. NAUFWP supports the President's 
fiscal year 2004 request of $380.6 million for Oceanic and Atmospheric 
Research.
    The National Sea Grant College Program provides essential academic 
research, education, and extension services for the oceans community. 
Sea Grant research is critical to the maintenance and improvement of 
the nation's marine resources. We were concerned by the 
Administration's proposal in fiscal year 2003 to move the Sea Grant 
College Program to the National Science Foundation (NSF). While the 
NSF's record of accomplishment in basic research is unparalleled, their 
strength is not in the deployment of applied research, education, and 
extension--the very characteristics that have made the National Sea 
Grant College Program so successful. Unfortunately, the Sea Grant 
program has been under funded for many years. Therefore, NAUFWP 
strongly supports the maintenance of the Sea Grant Program in the NOAA 
budget, and urges Congress to appropriate $68.41 million for this 
program in fiscal year 2004.
    NAUFWP supports the National Invasive Species Act Program, and the 
Marine Aquaculture Program, two partnership programs within NOAA that 
provide information to support policy and management decisions, 
increase knowledge of coastal and marine ecosystems, and provide the 
scientific basis for enhancing the Nation's marine economic sector. 
NAUFWP supports the Administration's $1 million increase for the NOAA 
Invasive Species Initiative, and the $2.6 million request for the NOAA 
Marine Aquaculture Program. We urge Congress to appropriate these 
amounts for fiscal year 2004.
    Thank you for considering the views of universities with fisheries 
and wildlife programs. We look forward to working with you and your 
staff to ensure adequate funding for fish and wildlife research, 
education, and conservation.


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Alliance for International Educational and Cultural Exchange, 
  Prepared Statement.............................................   302
American Bar Association, Prepared Statements..................279, 313
American Foreign Service Association, Prepared Statement.........   305
American Museum of Natural History, Prepared Statement...........   321
American Rivers, Prepared Statement..............................   301
American Sportfishing Association, Prepared Statement............   282
Ashcroft, Hon. John, Attorney General of the United States, 
  Office of the Attorney General, Department of Justice..........   103
    Prepared Statement...........................................   109
Association of Small Business Development Centers, Prepared 
  Statement......................................................   307

Byrd, Senator Robert C., U.S. Senator From West Virginia, 
  Questions Submitted by.........................................1, 149

California Industry and Government Central California Ozone Study 
  (CCOS) Coalition, Prepared Statement...........................   318
Campbell, Senator Ben Nighthorse, U.S. Senator From Colorado, 
  Questions Submitted by.........................................    39
Carman, Gregory W., Chief Judge, United States Court of 
  International Trade, the Judiciary, Prepared Statement.........   266
City of Gainesville, Florida, Prepared Statement.................   324

Domenici, Senator Pete V., U.S. Senator From New Mexico, 
  Questions Submitted by....................................35, 84, 138
Donaldson, William H., Chairman, Securities and Exchange 
  Commission.....................................................   205
    Prepared Statement...........................................   206
Doris Day Animal League, Prepared Statement......................   284

Evans, Hon. Donald L., Secretary of Commerce, Office of the 
  Secretary, Department of Commerce..............................    49
    Prepared Statement...........................................    51

Gregg, Senator Judd, U.S. Senator From New Hampshire:
    Opening Statements.................................1, 103, 205, 223
    Questions Submitted by.......................................29, 74
    Remarks of...................................................    12

Heyburn, Honorable John G., II, Chairman, Committee on the 
  Budget, Judicial Conference of the United States, the 
  Judiciary, Prepared Statement..................................   257
Hoopa Valley Tribe, Prepared Statement...........................   327
Hollings, Senator Ernest F., U.S. Senator From South Carolina, 
  Questions Submitted by.........................................    42

Inouye, Senator Daniel K., U.S. Senator From Hawaii, Questions 
  Submitted by...................................................    85
Investment Company Institute, Prepared Statement.................   300

Kohl, Senator Herb, U.S. Senator From Wisconsin, Questions 
  Submitted by...................................................   200

Leahy, Senator Patrick J., U.S. Senator From Vermont, Questions 
  Submitted by...................................................   150

Mayer, Haldane Robert, Chief Judge, U.S. Court of Appeals for the 
  Federal Circuit, the Judiciary, Prepared Statement.............   277
Mecham, Leonidas Ralph, Director, Administrative Office of the 
  U.S. Courts, the Judiciary, Prepared Statement.................   251
Mikulski, Senator Barbara A., U.S. Senator From Maryland, 
  Questions Submitted by.........................................46, 89
Monmouth University School of Science, Technology and 
  Engineering, Prepared Statement................................   319
Mueller, Robert S., III, Director, Federal Bureau of 
  Investigation, Department of Justice...........................   223
    Opening Statement............................................   223
    Prepared Statement...........................................   227
Murphy, Diana E., Chair, United States Sentencing Commission, the 
  Judiciary, Prepared Statement..................................   271

National Association of University Fisheries and Wildlife 
  Programs, Prepared Statement...................................   329
National Center for Victims of Crime, Prepared Statement.........   315
National Federation of Community Broadcasters, Prepared Statement   290

Powell, Hon. Colin L., Secretary of State, Office of the 
  Secretary, Department of State.................................     1
    Opening Statement............................................     1
    Prepared Statement...........................................     5

Regional Information Sharing Systems (RISS) Program, Prepared 
  State- 
  ment...........................................................   291

Smith, Hon. Fern M., Director, Federal Judicial Center, the 
  Judiciary, Prepared Statement..................................   268
Stevens, Senator Ted, U.S. Senator From Alaska, Questions 
  Submitted by...................................................   147

The Asia Foundation, Prepared Statement..........................   296
The Nature Conservancy, Prepared Statement.......................   310
The Ocean Conservancy, Prepared Statement........................   293

University Corporation for Atmospheric Research, Prepared 
  Statement......................................................   286


                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

                                                                   Page
Additional Committee Questions...................................    74
Backlog of Patent Applications...................................    57
Byrd Amendment...................................................    91
CIAO Moved to Homeland Security..................................    56
Climate Change...................................................    55
Cost of Outside Contractor Patent Search.........................    96
Critical Infrastructure Protection...............................    75
Deducting 201 Duties From AD/CVD Margins.........................    94
Economic Growth..................................................    52
Emergency Steel Loan Guarantee Program...........................    92
Entry/Exit System Based on Biometrics............................    56
Facilities, Infrastructure and Safety............................    54
Fisheries........................................................    55
Free Trade Concerns..............................................    67
Homeland Security................................................53, 74
Import Administration............................................    94
    Customs Instructions.........................................    95
Import Monitoring Program........................................    93
Manufacturing Extension Partnership Program......................    69
National Institute of Standards and Technology (NIST)/Homeland 
  Security.......................................................    76
    Law Enforcement Technologies Standards.......................    77
    Progress Investigating WTC Attacks...........................    57
    Warwick, Rhode Island Fire Investigation.....................    79
    Work With INS on the Entry/Exit System.......................    56
    World Trade Center Investigation.............................    78
National Oceanic and Atmospheric Administration (NOAA)...........    85
Paperless Patent Application Process.............................    83
Patent and Trademark Office:
    Five Year Strategic Plan.....................................    80
    Increase in User Fees........................................    79
Pilot of Outside Contractor Patent Search........................    99
Public Telecommunications Facilities, Planning and Construction..    84
Reliability of Outside Contractor Patent Search..................    97
Research and Development for Counterterrorism....................    72
Search Contractors Owning Patents................................   101
Softwood Lumber..................................................    83
Steel Tariffs--WTO Decision......................................    90
Stopping Pilot of Competitive-sourcing...........................   101
The 21st Century Strategic Plan..................................    59
Tourism..........................................................    85
Trade Adjustment Assistance......................................    88
Trade Agreements--Impact on Sugar................................    89
Transparency in Trade Negotiations...............................    89
201 Mid-term Review..............................................    93
Validity of Outside Contractor Patent Search.....................96, 98
Working Capital Fund.............................................    84

                         DEPARTMENT OF JUSTICE

                    Federal Bureau of Investigation

Changing to Meet:
    Cyber Threats................................................   230
    Intelligence Threats.........................................   229
    Terrorist Threats............................................   228
Chicago Field Office.............................................   232
Cigarette Smuggling/Terrorism Financing..........................   244
Clarification of Sources of Trilogy Reprogramming................   246
Clarification:
    Amount Requested for Information Technology in Fiscal Year 
      2004.......................................................   238
    IAFIS Case in Los Angeles....................................   239
    Percentage Increase of Agents in Chicago Field Office 
      Focusing on Counterterrorism Prior to September 11 to May/
      June of 2002, and During War With Iraq.....................   233
Counterintelligence............................................225, 236
    Progress.....................................................   229
    Threats......................................................   229
Counterterrorism..........................................224, 231, 248
    Progress.....................................................   227
    Threat.......................................................   228
    Training.....................................................   234
Criminal Justice Information Services (CJIS).....................   239
Cyber Crime......................................................   226
    Progress.....................................................   229
    Threat.......................................................   229
Domestic Intelligence............................................   237
Drugs/Terrorism Financing........................................   240
FBI Culture......................................................   234
Fiscal Year 2004:
    Budget Request...............................................   230
    Counterintelligence Budget Request...........................   229
    Counterterrorism Request.....................................   228
Hydrogen Cyanide Weapons.........................................   243
Information Technology...........................................   245
Legats...........................................................   241
Most Recent Polygraph of Special Agent James J. Smith, Subject of 
  Espionage Case in Los Angeles, California......................   237
Number of Agents in Chicago Field Office.........................   232
Other Programs...................................................   230
Percentage of Curriculum at Quantico Dedicated to 
  Counterterrorism (CT)..........................................   234
Reorganization...................................................   242
Status of the Trilogy Reprogramming Request......................   238
Technology Progress............................................226, 230
Terrorism........................................................   235
Terrorist Threat Integration Center/Foreign Terrorist Tracking 
  Task Force.....................................................   249
Trilogy..........................................................   237

                     Office of the Attorney General

Additional Committee Questions...................................   138
Alien Assistance Program.........................................   126
America's Law Enforcement and Mental Health Project Act..........   127
Antitrust--Telecom...............................................   202
Attorney General's Opening Statement.............................   103
Chemical Weapons.................................................   129
Civil Rights...................................................108, 124
Clarification of Fiscal Year 2004 Trilogy Request and 
  Reprogramming..................................................   137
Combating Corporate Fraud........................................   114
Corporate Fraud..................................................   120
    Task Force...................................................   107
Crime-Free Rural States Program..................................   199
Crimes Against Children..........................................   108
Deported Individuals.............................................   125
DNA Initiative...................................................   194
Drug Enforcement.................................................   107
    And Treatment................................................   115
Emergency Wartime Supplemental Appropriation.....................   123
Enhancing DNA Programs...........................................   117
Enron Task Force.................................................   120
FBI Enforcement of Immigration Laws..............................   196
Federal Judges--New Mexico.......................................   128
First Responders.................................................   108
FISA (Foreign Intelligence Surveillance Act).....................   202
Implementation of USA PATRIOT Act and Other Issues Related to War 
  on Terrorism...................................................   200
Imported Explosives..............................................   201
Integrated Prevention Strategy...................................   106
Iraqi Task Force Plan............................................   104
Juvenile Accountability Incentive Block Grant Program............   200
Local Law Enforcement Funding....................................   130
Managing the Department's Financial and information Resources, 
  Including Enhancing Information Security.......................   118
Mental Health Courts.............................................   146
National Security Council........................................   121
National Security Entry-Exit Registration System.................   199
Need for Additional Permanent Judgeships in New Mexico...........   139
OIG Oversight of DEA and FBI.....................................   200
Operation Top Off................................................   134
Other Important Activities.......................................   118
Preventing and Combating Terrorism, Including Counterintelligence   110
Preventing Crimes Against Children...............................   116
Privacy Act Exemptions...........................................   150
Project Safe Neighborhoods.......................................   108
Protecting the Judicial System and Managing Federal Detention and 
  Incarceration Capacity.........................................   117
Radiation Exposure Compensation Program........................128, 140
Risk of International Terrorism in the United States.............   133
Rocket Launchers and Airline Security............................   133
Safe Explosives Act..............................................   149
SCAAP and Southwest Border.......................................   138
Sleeper Cells....................................................   203
State and Local Funding..........................................   135
State Justice Institute..........................................   127
Terrorism:
    Prevention...................................................   105
    Threat:
        Integration Center.......................................   121
        Warning System...........................................   131
Terrorist Threat.................................................   124
    Integration Center.........................................122, 125
        Budget...................................................   122
Tobacco Smuggling/Terrorist Financing............................   130
Trilogy..........................................................   136
2003 Supplemental Budget Request.................................   104
2004 Budget Request..............................................   105
USA PATRIOT Act..................................................   150
Village of Chickaloon and Village Forestry Department of Alaska..   147

                          DEPARTMENT OF STATE

                        Office of the Secretary

Additional Committee Questions...................................    29
Aid to Turkey....................................................    20
Antiterrorism Training...........................................    37
Berlin/Frankfurt Facilities......................................    43
Compensation for Iranian Hostages................................    26
Consular Officers................................................    30
Cost Sharing Initiative..........................................    42
Current Situation in Iraq........................................    18
Defining Victory in Iraq.........................................    17
Diplomatic Readiness Initiative..................................    29
Dolphin-Safe Tuna................................................    46
Embassy Construction.............................................    32
Evaluating the Hiring Initiative.................................    44
Foreign Policy Advisor Responsibilities: Funding America's 
  Diplomacy Around the World.....................................     9
French Role in the Congo.........................................    25
History Regarding Regime Change in Iraq..........................    19
Islamic Center in Turkey.........................................    24
Madrasas.........................................................    24
Personnel Placement Decisions....................................    30
Post-Saddam Iraq.................................................    23
Relevance of the United Nations..................................    21
Removing Saddam Hussein..........................................    16
Renovation of U.N. Building in New York..........................    25
Right-sizing.....................................................    31
Role for France and Germany......................................    24
Russia and Iran's Nuclear Program................................    36
Saddam Hussein and Weapons.......................................    13
Saudi Arabia and 9/11 Terrorists.................................    23
Situation in North Korea.........................................    27
Soft Targets.....................................................    32
Status of:
    Ally Support.................................................    20
    Other Arab Nations...........................................    22
The CEO Responsibilities: State Department and Related Agencies..     6
USAID Facilities.................................................    43
Victory in Iraq..................................................    14

                   SECURITIES AND EXCHANGE COMMISSION

Effect of Sarbanes-Oxley on Corporate Directors..................   219
Expensing Stock Options..........................................   216
Fiscal 2003......................................................   207
Fiscal 2004......................................................   211
Hedge Funds......................................................   213
Pay Parity.......................................................   213
Public Company Accounting Oversight Board........................   217
Sarbanes-Oxley Act...............................................   218
Status of Enron Case.............................................   214

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